On August 21, 2024, OPM issued a proposed rule (89 FR 67563) to define Saratoga County, NY, as an area of application to the Jefferson, NY, NAF FWS wage area for pay-setting purposes. The Federal Prevailing Rate Advisory Committee, the national labor-management committee responsible for advising OPM on matters concerning the pay of FWS employees, reviewed and recommended these changes by consensus.

The proposed rule had a 30-day comment period, during which OPM received no comments. Therefore, this final rule adopts the proposed rule at 89 FR 67563 without change.

Section 5343 of title 5, U.S. Code, provides OPM with the authority and responsibility to define the boundaries of NAF FWS wage areas. Any changes in wage area definitions can have the long-term effect of increasing pay for Federal employees in affected locations. OPM expects this final rule to impact approximately one NAF FWS employee. Considering the small number of employees affected, OPM does not anticipate this rule will substantially impact local economies or have a large impact in local labor markets. As this and future wage area changes may impact higher volumes of employees in geographical areas and could rise to the level of impacting local labor markets, OPM will continue to study the implications of such impacts in this or future rules as needed.

Executive Orders 13563, 12866, and 14094 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). This rule is not a “significant regulatory action” under the provisions of Executive Order 14094 and, therefore, was not reviewed by OMB.

The Acting Director of OPM certifies that this rule will not have a significant economic impact on a substantial number of small entities.

OPM has examined this rule in accordance with Executive Order 13132, Federalism, and has determined that this rule will not have any negative impact on the rights, roles and responsibilities of State, local, or tribal governments.

This rule meets the applicable standard set forth in Executive Order 12988.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits before issuing any rule that would impose spending costs on State, local, or tribal governments in the aggregate, or on the private sector, in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold is currently approximately $183 million. This rule will not result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, in excess of the threshold. Thus, no written assessment of unfunded mandates is required.

OMB's Office of Information and Regulatory Affairs has determined this rule does not satisfy the criteria listed in 5 U.S.C. 804(2).

This rule does not impose any reporting or record-keeping requirements subject to the Paperwork Reduction Act.

Accordingly, OPM amends 5 CFR part 532 as follows:

On August 27, 2021, Aerocon applied for a supplemental type certificate for a LLCR installation in the Model A350-941 airplane. The Airbus Model A350-941 airplane is a twin-engine, transport-category airplane with a maximum takeoff weight of 623,908 pounds and maximum seating for 480 passengers.

Under the provisions of 14 CFR 21.101, Aerocon must show that the Airbus Model A350-941 airplane, as changed, continues to meet the applicable provisions of the regulations listed in Type Certificate No. T000631B or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.

If the Administrator finds that the applicable airworthiness regulations ( e.g., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Airbus A350-941 airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Airbus A350-941 series airplane must comply with the exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.

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

The Airbus A350-941 airplane will incorporate the following novel or unusual design feature:

The installation of a LLCR under the passenger cabin floor in the cargo compartment.

Section 25.819 applies to lower deck service compartments (including galleys) but is not directly applicable to forward LLCR compartments. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. Special conditions are required for the certification of the LLCR to supplement part 25.

The LLCR will be located under the passenger cabin floor in the forward cargo compartment of Airbus A350-941 model airplanes. It will be the size of three standard airfreight containers and be removeable from the cargo compartment. Occupancy of the LLCR will be limited to a maximum of eight crew members, and it will only be occupied in flight, i.e., not during taxi, takeoff or landing. A smoke detection system, fire extinguishing system, oxygen system and occupant amenities will be provided.

The LLCR will be accessed from the main deck via a stair house. The floor within the stair house has an access hatch that leads to the stairs, which occupants use to descend into the LLCR. This hatch locks automatically in the open position when fully opened. In addition, there will be an emergency hatch, which opens directly into the main passenger cabin area.

The LLCR also has a maintenance access/ground loading door, which allows access to and from the cargo compartment. The intended use of this door is to allow cargo loading and maintenance personnel to enter the LLCR from the cargo compartment when the airplane is on the ground and not moving.

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

The FAA issued Notice of Proposed Special Conditions No. 25-24-04-SC for Airbus Model A350-941 airplanes, which was published in the Federal Register on September 11, 2024 (89 FR 73604).

The FAA received a response from Airbus Commercial Aircraft (Airbus) requesting the FAA consider Special Conditions No. 25-281-SC as the minimum set of requirements for the design of the A350-941 lower deck crew rest compartment. Airbus request the FAA issue special conditions consistent with previously approved special conditions for similar installations.

The FAA agrees with the Airbus response. The limitations and conditions of this special condition are essentially the same as the limitations and conditions listed in special condition number 25-281-SC.

The special conditions are adopted as proposed.

As discussed above, these special conditions are applicable to Airbus Model A350-941 airplanes as modified by Aerocon. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would apply to the other model as well.

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in the Federal Register . However, as the certification date for the Airbus Model A350-941 is imminent, the FAA finds that good cause exists to make these special conditions effective upon publication.

This action affects only certain novel or unusual design feature on the Airbus 350-941 airplane. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Airbus Model A350-941 airplanes, as modified by Aerocon Engineering Company. The LLCR must meet the below requirements:

1. Occupancy of the forward lower lobe crew rest compartment is limited to a maximum of eight. There must be an approved seat or berth able to withstand the maximum flight loads when occupied for each occupant permitted in the crew rest compartment.

(a) There must be appropriate placards displayed in a conspicuous place at each entrance to the LLCR compartment to indicate:

(1) The maximum number of occupants allowed;

(2) That occupancy is restricted to crewmembers trained in the evacuation procedures for the crew rest compartment;

(3) That occupancy is prohibited during taxi, take-off and landing;

(4) That smoking is prohibited in the crew rest compartment;

(5) That hazardous quantities of flammable fluids, explosives, or other dangerous cargo is prohibited from the crew rest compartment.

(6) That the crew rest area must be limited to the stowage of crew personal luggage and must not be used for the stowage of cargo or passenger baggage.

(b) There must be at least one ashtray located conspicuously on or near the entry side of any entrance, usable in-flight, to the crew rest compartment.

(c) There must be a means to prevent passengers from entering the compartment in the event of an emergency or when no flight attendant is present.

(d) There must be a means for any door installed between the crew rest compartment and passenger cabin to be capable of being quickly opened from inside the compartment, even when crowding occurs at each side of the door.

(e) For all doors installed in the evacuation routes, there must be a means to preclude anyone from being trapped inside the compartment. If a locking mechanism is installed, it must be capable of being unlocked from the outside without special tools. The lock must not prevent opening from the inside of the compartment at any time.

2. There must be at least two emergency evacuation routes, which could be used by each occupant of the crew rest compartment to rapidly evacuate to the main cabin and be able to be closed from the main passenger cabin after evacuation. In addition—

(a) The routes must be located with one at each end of the compartment, or with two having sufficient separation within the compartment and between the routes to minimize the possibility of an event (either inside or outside of the crew rest compartment) rendering both routes inoperative.

(b) The routes must be designed to minimize the possibility of blockage, which might result from fire, mechanical or structural failure, or persons standing on top of or against the escape route. If an evacuation route utilizes an area where normal movement of passengers occurs, it must be demonstrated that passengers would not impede egress to the main deck. If a hatch is installed in an evacuation route, the point at which the evacuation route terminates in the passenger cabin should not be located where normal movement by passengers or crew occurs (main aisle, cross aisle, passageway or galley complex). If such a location cannot be avoided, special consideration must be taken to ensure that the hatch or door can be opened when a person, the weight of a ninety-fifth percentile male, is standing on the hatch or door. The use of evacuation routes must not be dependent on any powered device. If there is low headroom at or near an evacuation route, provisions must be made to prevent or to protect occupants of the crew rest area from head injury.

(c) Emergency evacuation procedures, including the emergency evacuation of an incapacitated occupant from the crew rest compartment, must be established. All of these procedures must be transmitted to the operator for incorporation into their training programs and appropriate operational manuals.

(d) There must be a limitation in the airplane flight manual or other suitable means requiring that crewmembers be trained in the use of evacuation routes.

3. There must be a means for the evacuation of an incapacitated person (representative of a 95th percentile male) from the crew rest compartment to the passenger cabin floor. The evacuation must be demonstrated for all evacuation routes. A flight attendant or other crewmember (a total of one assistant within the crew rest area) may provide assistance in the evacuation. Additional assistance may be provided by up to three persons in the main passenger compartment. For evacuation routes having stairways, the additional assistants may descend down to one half the elevation change from the main deck to the lower deck compartment, or to the first landing, whichever is higher.

4. The following signs and placards must be provided in the crew rest compartment:

(a) At least one exit sign, located near each exit, meeting the requirements of § 25.812(b)(1)(i) at Amendment 25-58, except that a sign with reduced background area of no less than 5.3 square inches (excluding the letters) may be utilized, provided that it is installed such that the material surrounding the exit sign is light in color ( e.g., white, cream, light beige). If the material surrounding the exit sign is not light in color, a sign with a minimum of a one-inch wide background border around the letters would also be acceptable;

(b) An appropriate placard located near each exit defining the location and the operating instructions for each evacuation route;

(c) Placards must be readable from a distance of 30 inches under emergency lighting conditions; and

(d) The exit handles and evacuation path operating instruction placards must be illuminated to at least 160 microlamberts under emergency lighting conditions.

5. In the event of failure of the aircraft's main power system, or of the normal crew rest compartment lighting system, there must be a means for emergency illumination to be automatically provided for the crew rest compartment.

(a) This emergency illumination must be independent of the main lighting system.

(b) The sources of general cabin illumination may be common to both the emergency and the main lighting systems if the power supply to the emergency lighting system is independent of the power supply to the main lighting system.

(c) The illumination level must be sufficient for the occupants of the crew rest compartment to locate and transfer to the main passenger cabin floor by means of each evacuation route.

(d) The illumination level must be sufficient with the privacy curtains in the closed position for each occupant of the crew rest to locate a deployed oxygen mask.

6. There must be means for two-way voice communications between crewmembers on the flight deck and occupants of the crew rest compartment. There must also be public address (PA) system microphones at each flight attendant seat required to be near a floor level exit in the passenger cabin per § 25.785(h) at Amendment 25-51. The PA system must allow two-way voice communications between flight attendants and the occupants of the crew rest compartment, except that one microphone may serve more than one exit provided the proximity of the exits allows unassisted verbal communication between seated flight attendants.

7. There must be a means for manual activation of an aural emergency alarm system, audible during normal and emergency conditions, to enable crewmembers on the flight deck and at each pair of required floor level emergency exits to alert occupants of the crew rest compartment of an emergency situation. Use of a public address or crew interphone system will be acceptable, provided an adequate means of differentiating between normal and emergency communications is incorporated. The system must be powered in flight, after the shutdown or failure of all engines and auxiliary power units (APU), or the disconnection or failure of all power sources dependent on their continued operation ( i.e., engine & APU), for a period of at least ten minutes.

8. There must be a means, readily detectable by seated or standing occupants of the crew rest compartment, which indicates when seat belts should be fastened. In the event there are no seats, at least one means must be provided to cover anticipated turbulence ( e.g., sufficient handholds). Seat belt type restraints must be provided for berths and must be compatible for the sleeping attitude during cruise conditions. There must be a placard on each berth requiring that seat belts must be fastened when occupied. If compliance with any of the other requirements of these special conditions is predicated on specific head location, there must be a placard identifying the head position.

9. In lieu of the requirements specified in § 25.1439(a) at Amendment 25-38 that pertain to isolated compartments and to provide a level of safety equivalent to that which is provided occupants of a small, isolated galley, the following equipment must be provided in the crew rest compartment:

(a) At least one approved hand-held fire extinguisher appropriate for the kinds of fires likely to occur;

(b) Two protective breathing equipment (PBE) devices approved to Technical Standard Order (TSO)-C116 or equivalent, suitable for firefighting, or one PBE for each hand-held fire extinguisher, whichever is greater; and

(c) One flashlight.

10. A smoke or fire detection system (or combination of systems) must be provided that monitors each occupiable area within the crew rest compartment, including those areas partitioned by curtains. Flight tests must be conducted to show compliance with this requirement. Each system (or combination of systems) must provide:

(a) A visual indication to the flight deck within one minute after the start of a fire;

(b) An aural warning in the crew rest compartment; and

(c) A warning in the main passenger cabin. This warning must be readily detectable by a flight attendant, and considering the positioning of flight attendants throughout the main passenger compartment during various phases of flight.

11. The crew rest compartment must be designed such that fires within the compartment can be controlled without a crewmember having to enter the compartment, or the design of the access provisions must allow crewmembers equipped for firefighting to have unrestricted access to the compartment. The time for a crewmember on the main deck to react to the fire alarm, to don the firefighting equipment, and to gain access must not exceed the time for the compartment to become smoke-filled, making it difficult to locate the fire source.

12. The crew rest compartment design must incorporate a means provided to exclude hazardous quantities of smoke or extinguishing agent originating in the crew rest compartment from entering any other compartment occupied by crewmembers or passengers. This means must include the time periods during the evacuation of the crew rest compartment and, if applicable, when accessing the crew rest compartment to manually fight a fire. Smoke entering any other compartment occupied by crewmembers or passengers when the access to the crew rest compartment is opened, during an emergency evacuation, must dissipate within five minutes after the access to the crew rest compartment is closed. Hazardous quantities of smoke may not enter any other compartment occupied by crewmembers or passengers during subsequent access to manually fight a fire in the crew rest compartment (the amount of smoke entrained by a firefighter exiting the crew rest compartment through the access is not considered hazardous). The firefighting procedures must include a provision to ensure that all door(s) and hatch(es) at the crew rest compartment outlets are closed after evacuation of the crew rest compartment and during firefighting to minimize smoke and extinguishing agent from entering other occupiable compartments. During the 1-minute smoke detection time, penetration of a small quantity of smoke from the crew rest compartment into an occupied area is acceptable. Flight tests must be conducted to show compliance with this requirement. If a built-in fire extinguishing system is used in lieu of manual firefighting, then the fire extinguishing system must be designed so that no hazardous quantities of extinguishing agent will enter other compartments occupied by passengers or crew. The system must have adequate capacity to suppress any fire occurring in the crew rest compartment, considering the fire threat, volume of the compartment and the ventilation rate.

13. The crew rest compartment design must include a supplemental oxygen system equivalent to that provided for main deck passengers for each seat and berth in the crew rest compartment. The system must provide an aural and visual warning to the occupants of the crew rest compartment to don oxygen masks in the event of decompression. The warning must activate before the cabin pressure altitude exceeds 15,000 feet. The aural warning must sound continuously for a minimum of five minutes or until a reset push button in the crew rest compartment is depressed. Procedures for crew rest occupants in the event of decompression must be established. These procedures must be transmitted to the operator for incorporation into their training programs and appropriate operational manuals.

14. The following requirements apply to crew rest compartments that are divided into several sections by the installation of curtains or partitions:

(a) To compensate for sleeping occupants, there must be an aural alert that can be heard in each section of the crew rest area compartment that accompanies automatic presentation of supplemental oxygen masks. A visual indicator that occupants must don an oxygen mask is required in each section where seats or berths are not installed. A minimum of two supplemental oxygen masks is required for each seat or berth. There must also be a means by which the oxygen masks can be manually deployed from the flight deck.

(b) A placard is required adjacent to each curtain that visually divides or separates, for privacy purposes, the crew rest area compartment into small sections. The placard must require that the curtain(s) remains open when the private section it creates is unoccupied.

(c) For each crew rest section created by the installation of a curtain, the following requirements of these special conditions must be met with the curtain open or closed:

(1) Emergency illumination (Special Condition no. 5);

(2) Emergency alarm system (Special Condition no. 7);

(3) Seat belt fasten signal or return to seat signal as applicable (Special Condition no. 8); and

(4) The smoke or fire detection system (Special Condition no. 10).

(d) Crew rest compartments visually divided to the extent that evacuation could be affected must have exit signs that direct occupants to the primary stairway exit. The exit signs must be provided in each separate section of the crew rest compartment and must meet the requirements of § 25.812(b)(1)(i) at Amendment 25-58. An exit sign with reduced background area as described in Special Condition no. 4.(a) may be used to meet this requirement.

(e) For sections within a crew rest compartment that are created by the installation of a partition with a door separating the sections, the following requirements of these special conditions must be met with the door open or closed:

(1) There must be a secondary evacuation route from each section to the main deck, or alternatively, it must be shown that any door between the sections is designed to preclude anyone from being trapped inside the compartment. Removal of an incapacitated occupant within this area must be considered. A secondary evacuation route from a small room designed for only one occupant for short time duration, such as a changing area or lavatory, is not required. However, removal of an incapacitated occupant within this area must be considered.

(2) Any door between the sections must be shown to be openable when crowded against, even when crowding occurs at each side of the door.

(3) There may be no more than one door between any seat or berth and the primary stairway exit.

(4) There must be exit signs in each section meeting the requirements of § 25.812(b)(1)(i) at Amendment 25-58 that direct occupants to the primary stairway exit. An exit sign with reduced background area as described in Special Condition no. 4.(a) may be used to meet this requirement.

(5) Special Conditions no. 5 (emergency illumination), no. 7 (emergency alarm system), no. 8 (fasten seat belt signal or return to seat signal as applicable) and no. 10 (smoke or fire detection system) must be met with the door open or closed.

(6) Special Conditions no. 6 (two-way voice communication) and no. 9 (emergency firefighting and protective equipment) must be met independently for each separate section except for lavatories or other small areas that are not intended to be occupied for extended periods of time.

15. Where a waste disposal receptacle is fitted, it must be equipped with a built-in fire extinguisher designed to discharge automatically upon occurrence of a fire in the receptacle.

16. Materials (including finishes or decorative surfaces applied to the materials) must comply with the flammability requirements of § 25.853 at Amendment 25-66. Mattresses must comply with the flammability requirements of § 25.853(b) and (c) at Amendment 25-66.

17. All lavatories within the crew rest are required to meet the same requirements as those for a lavatory installed on the main deck except with regard to Special Condition no. 10 for smoke detection.

18. When a crew rest compartment is installed or enclosed as a removable module in part of a cargo compartment or is located directly adjacent to a cargo compartment without an intervening cargo compartment wall, the following applies:

(a) Any wall of the module (container) forming part of the boundary of the reduced cargo compartment, subject to direct flame impingement from a fire in the cargo compartment and including any interface item between the module (container) and the airplane structure or systems, must meet the applicable requirements of § 25.855 at Amendment 25-60.

(b) Means must be provided so that the fire protection level of the cargo compartment meets the applicable requirements of §§ 25.855 at Amendment 25-60, 25.857 at Amendment 25-60 and 25.858 at Amendment 25-54 when the module (container) is not installed.

(c) Use of each emergency evacuation route must not require occupants of the crew rest compartment to enter the cargo compartment in order to return to the passenger compartment.

(d) The aural warning in Special Condition no. 7 must sound in the crew rest compartment in the event of a fire in the cargo compartment.

19. Means must be provided to prevent access into the Class C cargo compartment during all airplane operations and to ensure that the maintenance door is closed during all airplane flight operations.

20. All enclosed stowage compartments within the crew rest that are not limited to stowage of emergency equipment or airplane-supplied equipment ( e.g., bedding) must meet the design criteria given in the table below. As indicated by the table below, this special condition does not address enclosed stowage compartments greater than 200 ft 3 in interior volume. The in-flight accessibility of very large, enclosed stowage compartments and the subsequent impact on the crewmembers' ability to effectively reach any part of the compartment with the contents of a hand fire extinguisher will require additional fire protection considerations similar to those required for inaccessible compartments such as Class C cargo compartments.

The substance of these special conditions has been published in the Federal Register for public comment in several prior instances with no substantive comments received. Therefore, the FAA finds, pursuant to 14 CFR 11.38(b), that new comments are unlikely, and notice and comment prior to this publication are unnecessary.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in title 14, Code of Federal Regulations (14 CFR) 11.35, the FAA will post all comments received without change to www.regulations.gov, including any personal information you provide. The FAA will also post a report summarizing each substantive verbal contact received about these special conditions.

Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to these special conditions contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to these special conditions, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and the indicated comments will not be placed in the public docket of these special conditions. Send submissions containing CBI to the individual listed in the For Further Information Contact section above. Comments the FAA receives, which are not specifically designated as CBI, will be placed in the public docket for these special conditions.

The FAA invites interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

The FAA will consider all comments received by the closing date for comments. The FAA may change these special conditions based on the comments received.

On September 23, 2024, Airbus S.A.S. applied for an amendment to Type Certificate No. (TC no.) A28NM to include new Models A321 neo ACF and A321 neo XLR airplanes. Airbus Model A321 neo ACF and Model A321 neo XLR airplanes, which are derivatives of the Model A321 currently approved under TC no. A28NM, are twin-engine transport category airplanes with a maximum passenger capacity of 244. The maximum takeoff weight of the Airbus Model A321 neo ACF is approximately 213,848 pounds, while the Airbus Model A321 neo XLR has a maximum takeoff weight of approximately 222,667 pounds.

Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Airbus S.A.S must show that Models A321 neo ACF and A321 neo XLR airplanes, as changed, continue to meet the applicable provisions of the regulations listed in TC No. A28NM, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.

If the Administrator finds that the applicable airworthiness regulations ( e.g., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Airbus Models A321 neo ACF and A321 neo XLR airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

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

In addition to the applicable airworthiness regulations and special conditions, Airbus Models A321 neo ACF and A321 neo XLR airplanes must comply with the exhaust-emission requirements of 14 CFR part 34 and the noise-certification requirements of 14 CFR part 36.

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

Airbus Models A321 neo ACF and A321 neo XLR airplanes will incorporate a novel or unusual design feature: single occupant oblique (side-facing) passenger seats that may include a 3-point restraint system with pretensioner. These oblique seats may be installed at an angle of 18 to 45 degrees relative to the aircraft centerline and have surrounding furniture that introduces occupant and loading concerns.

Title 14, Code of Federal Regulations (14 CFR) 25.785(d) requires that each occupant of a seat that makes more than an 18 degree angle with the vertical plane containing the airplane centerline must be protected from head injury by a safety belt and an energy absorbing rest that will support the arms, shoulders, head, and spine, or by a safety belt and shoulder harness that will prevent the head from contacting any injurious object.

The proposed Airbus Model A321 neo ACF and A321 neo XLR seat installations are novel in that the current requirements do not adequately address protection of the occupant's neck and spine for seating configurations that are positioned at angles greater than 18 degrees up to and including 45 degrees from the airplane centerline. The installation of passenger seats at angles of 18 to 45 degrees to the airplane centerline is unique due to the seat/occupant interface with the surrounding furniture that introduces occupant alignment/loading concerns with or without the installation of a 3-point or airbag restraint systems. The existing special conditions for Airbus Model A321 neo ACF series airplane oblique seat installations (Special Conditions No. 25-779-SC) also do not address oblique seats with 3-point restraint systems equipped with pretensioners. Therefore, in order to provide a level of safety equivalent to that afforded to occupants of forward and aft facing seating, additional airworthiness standards in the form of new special conditions are necessary.

The FAA has been conducting and sponsoring research on appropriate injury criteria for oblique (side-facing) seat installations. To reflect current research findings, the FAA issued Policy Statement PS-AIR-25-27, “Technical Criteria for Approving Side-Facing Seats,” dated July 11, 2018, which defines injury criteria for oblique seats.

FAA-sponsored research has found that an un-restrained flailing of the upper torso, even when the pelvis and torso are nearly aligned, can produce serious spinal and torso injuries. At lower impact severities, even with significant misalignment between the torso and pelvis, these injuries did not occur. Tests with an FAA H-III anthropomorphic test dummy (ATD) have identified a level of lumbar spinal tension corresponding to the no-injury impact severity. This level of tension is included as a limit in the special conditions. The spine tension limit selected is conservative with respect to other aviation injury criteria since it corresponds to a no-injury loading condition.

Other restraint systems, in lieu of single lap belt restraint systems have been used to comply with the occupant injury criteria of § 25.562(c)(5). For instance, shoulder harnesses have been widely used on flight-attendant seats, flight-deck seats, in business jets, and in general-aviation airplanes to reduce occupant head injury in the event of an emergency landing. Special conditions, pertinent regulations, and published guidance exist that relate to other restraint systems. However, the use of pretensioners in the restraint system on transport category airplane seats to comply with the occupant injury criteria of § 25.562(c)(5) is a novel design.

Pretensioner technology involves a step-change in loading experienced by the occupant for impacts below and above that at which the device deploys, because activation of the shoulder harness, at the point at which the pretensioner engages, interrupts upper-torso excursion. Such excursion could result in the head-injury criteria (HIC) being higher at an intermediate impact condition than that resulting from the maximum impact condition corresponding to the test conditions specified in §  25.562. See condition 7 in these special conditions.

The ideal triangular maximum-severity pulse is defined in Advisory Circular (AC) 25.562-1B, “Dynamic Evaluation of Seat Restraint Systems and Occupant Protection on Transport Airplanes”. For the evaluation and testing of less-severe pulses for purposes of assessing the effectiveness of the pretensioner setting, a similar triangular pulse should be used with acceleration, rise time, and velocity change scaled accordingly. The magnitude of the required pulse should not deviate below the ideal pulse by more than 0.5g until 1.33 t1 is reached, where t1 represents the time interval between 0 and t1 on the referenced pulse shape, as shown in AC 25.562-1B. This is an acceptable method of compliance to the test requirements of the special conditions.

Additionally, the pretensioner might not provide protection, after actuation, during secondary impacts. Therefore, the case where a small impact is followed by a large impact should be addressed. If the minimum deceleration severity at which the pretensioner is set to deploy is unnecessarily low, the protection offered by the pretensioner may be lost by the time a second, larger impact occurs.

Conditions 1 through 7 address occupant protection in consideration of the oblique-facing seats. Conditions 8 through 10 ensure that the pretensioner system activates when intended and protects a range of occupants under various accident conditions. Conditions 11 through 16 address maintenance and reliability of the pretensioner system, including any outside influences on the mechanism, to ensure it functions as intended.

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

As discussed above, these special conditions are applicable to the Airbus Model A321 neo ACF and Model A321 neo XLR airplanes. Should Airbus S.A.S. apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would apply to that model as well.

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

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for the Airbus Model A321 neo ACF and A321 neo XLR series airplanes.

In addition to the requirements of § 25.562, passenger seats installed at an angle between 18 degrees and 45 degrees from the aircraft centerline must meet the following conditions:

1. Body-to-Wall and Body-to-Furnishing Contact:

If a seat is installed aft of a structure ( e.g., interior wall or furnishings) that does not provide a homogenous contact surface for the expected range of occupants and yaw angles, then additional analysis and tests may be required to demonstrate that the injury criteria are met for the area that an occupant could contact. For example, if, in addition to a pretensioner restraint system, an airbag device is present, different yaw angles could result in different airbag-device performance, then additional analysis or separate tests may be necessary to evaluate performance.

2. Neck Injury Criteria:

The seating system must protect the occupant from experiencing serious neck injury. In addition to a pretensioner restraint system, if an airbag device also is present, the assessment of neck injury must be conducted with the airbag device activated, unless there is reason to also consider that the neck injury potential would be higher for impacts below the airbag-device deployment threshold.

(a) The Nij (calculated in accordance with 49 CFR 571.208) must be below 1.0, where Nij = Fz/Fzc + My/Myc, and Nij critical values are:

(b) In addition, peak Fz must be below 937 lbs. in tension and 899 lbs. in compression.

(c) Rotation of the head about its vertical axis relative to the torso is limited to 105 degrees in either direction from forward facing.

(d) The neck must not impact any surface that would produce concentrated loading on the neck.

3. Spine and Torso Injury Criteria:

(a) The lumbar spine tension (Fz) cannot exceed 1,200 lbs.

(b) Significant concentrated loading on the occupant's spine, in the area between the pelvis and shoulders during impact, including rebound, is not acceptable. During this type of contact, the interval for any rearward (X direction) acceleration exceeding 20g must be less than 3 milliseconds as measured by the thoracic instrumentation specified in 49 CFR part 572, subpart E, filtered in accordance with SAE International (SAE) recommended practice J211/1, “Instrumentation for Impact Test-Part 1-Electronic Instrumentation.”

(c) The occupant must not interact with the armrest or other seat components in any manner significantly different than would be expected for a forward-facing seat installation.

4. Pelvis Criteria:

Any part of the load-bearing portion of the bottom of the ATD pelvis must not translate beyond the edges of the seat bottom seat-cushion supporting structure.

5. Femur Criteria:

Axial rotation of the upper leg (about the Z-axis of the femur per SAE Recommended Practice J211/1) must be limited to 35 degrees from the nominal seated position. Evaluation during rebound does not need to be considered.

6. ATD and Test Conditions:

Longitudinal tests conducted to measure the injury criteria above must be performed with the FAA Hybrid III ATD, as described in SAE 1999-01-1609, “A Lumber Spine Modification to the Hybrid III ATD for Aircraft Seat Tests.” The tests must be conducted with an undeformed floor, at the most-critical yaw cases for injury, and with all lateral structural supports ( e.g. armrests or walls) installed.

7. Head Injury Criteria:

The HIC value must not exceed 1000 at any condition at which the pretensioner does or does not deploy, up to the maximum severity pulse that corresponds to the test conditions specified in §  25.562. Tests must be performed to demonstrate this, taking into account any necessary tolerances for deployment.

When an airbag is present in addition to the pretensioner restraint system, and the anthropomorphic test dummy (ATD) has no apparent contact with the seat/structure but has contact with the airbag, a HIC unlimited score in excess of 1000 is acceptable provided the HIC15 score (calculated in accordance with 49 CFR 571.208) for the contact is less than 700. ATD head contact with the seat or other structure, through the airbag, or contact subsequent to contact with the airbag, requires a HIC value that does not exceed 1000.

8. Protection During Secondary Impacts:

The pretensioner activation setting must be demonstrated to maximize the probability of the protection being available when needed, considering secondary impacts.

9. Protection of Occupants Other than 50th Percentile:

Protection of occupants for a range of stature from a 2-year-old child to a 95th percentile male must be shown. For shoulder harnesses that include pretensioners, protection of occupants other than a 50th percentile male may be shown by test or analysis. In addition, the pretensioner must not introduce a hazard to passengers due to the following seat configurations:

(a) The seat occupant is holding an infant.

(b) The seat occupant is a child in a child-restraint device.

(c) The seat occupant is a pregnant woman.

10. Occupants Adopting the Brace Position:

Occupants in the traditional brace position when the pretensioner activates must not experience adverse effects from the pretensioner activation.

11. Inadvertent Pretensioner Actuation:

(a) The probability of inadvertent pretensioner actuation must be shown to be extremely remote ( i.e., average probability per flight hour of less than 10 −7 ).

(b) The system must be shown not susceptible to inadvertent pretensioner actuation as a result of wear and tear, or inertia loads resulting from in-flight or ground maneuvers likely to be experienced in service.

(c) The seated occupant must not be seriously injured as a result of inadvertent pretensioner actuation.

(d) Inadvertent pretensioner activation must not cause a hazard to the airplane, nor cause serious injury to anyone who may be positioned close to the retractor or belt ( e.g., seated in an adjacent seat or standing adjacent to the seat).

12. Availability of the Pretensioner Function Prior to Flight:

The design must provide means for a crewmember to verify the availability of the pretensioner function prior to each flight, or the probability of failure of the pretensioner function must be demonstrated to be extremely remote ( i.e., average probability per flight hour of less than 10 −7 ) between inspection intervals.

13. Incorrect Seat Belt Orientation:

The system design must ensure that any incorrect orientation (twisting) of the seat belt does not compromise the pretensioner protection function.

14. Contamination Protection:

The pretensioner mechanisms and controls must be protected from external contamination associated with that which could occur on or around passenger seating.

15. Prevention of Hazards:

The pretensioner system must not induce a hazard to passengers in case of fire, nor create a fire hazard, if activated.

16. Functionality After Loss of Power:

The system must function properly after loss of normal airplane electrical power, and after a transverse separation in the fuselage at the most critical location. A separation at the location of the system does not have to be considered.

On April 10, 2023, Skyryse applied for a supplemental type certificate for removal of the mechanical control system and installation of a computer controlled flight control system in the Model R66 helicopter. The Robinson Model R66 helicopter, currently approved under Type Certificate No. R00015LA, is a single engine normal category rotorcraft. The maximum take-off weight is 2,700 pounds, with a maximum seating capacity of five passengers.

Under the provisions of 14 CFR 21.101, Skyryse must show that the Robinson Model R66 helicopter, as changed, continues to meet the applicable provisions of the regulations listed in Type Certificate No. R00015LA or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.

If the Administrator finds that the applicable airworthiness regulations do not contain adequate or appropriate safety standards for the Robinson Model R66 helicopter because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the Robinson Model R66 helicopter must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.

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

The Robinson Model R66 helicopter will incorporate the following novel or unusual design feature:

Novel control input and FBW system.

Skyryse has proposed to install an FBW flight control system (FCS) intended to replace the current hydraulicly boosted mechanical primary FCS, on a Robinson Model R66 helicopter. FBW systems are new to part 27 rotorcraft and as such, the rotorcraft FCS will now contain control functions that affect the static strength of rotorcraft structure.

These special conditions would give the applicant an option to offset the structural factor of safety based on the probability of system failure. These special conditions apply to systems that can induce loads on the airframe or change the response of the rotorcraft to maneuvers or to control inputs, as a result of failure. Some potential examples include part 27 rotorcraft equipped with FBW or fly-by-light FCSs, autopilots, stability augmentation systems, load alleviation systems, flutter control systems, fuel management systems, and other systems that either directly or as a result of failure or malfunction affect structural performance.

The FAA has issued special conditions for the interaction of systems and structures to other aircraft in the past (parts 23, 25, and 29). Active flight control systems are capable of providing automatic responses to inputs from sources other than the pilots. These automatic systems may become inoperative or may operate in a degraded mode, which could impact the loads envelope and rotorcraft static strength.

Therefore, it is necessary to determine the structural factors of safety and operating margins such that the joint probability of structural failures due to application of loads during system malfunctions is not greater than that found in rotorcraft equipped with earlier technology control systems. To achieve this objective, it is necessary to define the failure conditions with their associated frequency of occurrence in order to determine the structural factors of safety and operating margins that will ensure an acceptable level of safety.

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

The FAA issued Notice of Proposed Special Conditions No. 27-24-01-SC for the Robinson Model R66 helicopter, as modified by Skyryse, which was published in the Federal Register on August 28, 2024 (89 FR 68833).

No comments were received, and the special conditions are adopted as proposed.

As discussed above, these special conditions are applicable to the Robinson R66 helicopter. Should Skyryse apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. R00015LA to incorporate the same novel or unusual design feature, these special conditions would apply to that model as well.

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in the Federal Register . However, as the certification date for the Robinson R66 helicopter, as modified by Skyryse, is imminent, the FAA finds that good cause exists to make these special conditions effective upon publication.

This action affects only a certain novel or unusual design feature on one model of helicopter. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the helicopter.

Aircraft, Aviation safety, Reporting and recordkeeping requirements.

The authority citation for these special conditions is as follows:

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for the Robinson R66 helicopter, as modified by Skyryse.

For rotorcraft equipped with systems that affect structural performance, either directly or as a result of a failure or malfunction, the influence of these systems and their failure conditions must be taken into account when showing compliance with the requirements of subparts C and D of part 27 of title 14 of the Code of Federal Regulations (14 CFR).

The following criteria must be used for showing compliance with these special conditions:

(a) The criteria defined herein only address the direct structural consequences of the system responses and performance. They cannot be considered in isolation but should be included in the overall safety evaluation of the rotorcraft. These criteria may, in some instances, duplicate standards already established for this evaluation. These criteria are only applicable to structures whose failure could prevent continued safe flight and landing. Specific criteria that define acceptable limits on handling characteristics or stability requirements, when operating in the system degraded or inoperative mode, are not provided in these special conditions.

(b) Depending upon the specific characteristics of the rotorcraft, additional studies may be required that go beyond the criteria provided in these special conditions in order to demonstrate the capability of the rotorcraft to meet other realistic conditions such as alternative gust or maneuver descriptions for a rotorcraft equipped with a load alleviation system.

(c) The following definitions are applicable to these special conditions.

(1) Structural performance: Capability of the rotorcraft to meet the structural requirements of 14 CFR part 27.

(2) Flight limitations: Limitations that can be applied to the rotorcraft flight conditions following an in-flight occurrence and that are included in the flight manual ( e.g., speed limitations, avoidance of severe weather conditions, etc.).

(3) Operational limitations: Limitations, including flight limitations that can be applied to the rotorcraft operating conditions before dispatch ( e.g., fuel, payload, and master minimum equipment list limitations).

(4) Failure condition: The term failure condition is the same as that used in § 27.1309; however, these special conditions apply only to system failure conditions that affect the structural performance of the rotorcraft ( e.g., system failure conditions that induce loads, change the response of the rotorcraft to inputs such as gusts or pilot actions, or lower flutter margins).

(a) General. The following criteria will be used in determining the influence of a system and its failure conditions on the rotorcraft structure.

(b) System fully operative. With the system fully operative, the following apply:

(1) Limit loads must be derived in all normal operating configurations of the system from all the limit conditions specified in subpart C of this part (or used in lieu of those specified in subpart C of this part), taking into account any special behavior of such a system or associated functions or any effect on the structural performance of the rotorcraft that may occur up to the limit loads. In particular, any significant nonlinearity (rate of displacement of control surface, thresholds, or any other system nonlinearities) must be accounted for in a realistic or conservative way when deriving limit loads from limit conditions.

(2) The rotorcraft must meet the strength requirements of part 27 (static strength, residual strength), using the specified factors to derive ultimate loads from the limit loads defined above. The effect of nonlinearities must be investigated beyond limit conditions to ensure the behavior of the system presents no anomaly compared to the behavior below limit conditions. However, conditions beyond limit conditions need not be considered when it can be shown that the rotorcraft has design features that will not allow it to exceed those limit conditions.

(3) The rotorcraft must meet the flutter requirements of § 27.629.

(c) System in the failure condition. For any system failure condition not shown to be extremely improbable, the following apply:

(1) At the time of occurrence. Starting from 1-g level flight conditions, a realistic scenario, including pilot corrective actions, must be established to determine the loads occurring at the time of failure and immediately after the failure.

(i) For static strength substantiation, these loads multiplied by an appropriate factor of safety that is related to the probability of occurrence of the failure, are ultimate loads to be considered for design. The factor of safety is defined in figure 1.

(ii) For residual strength substantiation, the rotorcraft must be able to withstand two thirds of the ultimate loads defined in paragraph (c)(1)(i) of these special conditions.

(iii) Freedom from flutter and divergence must be shown under any condition of operation including:

(A) Airspeeds up to 1.11 V NE (power on and power off).

(B) Main rotor speeds from 0.95 × the minimum permitted speed up to 1.05 × the maximum permitted speed (power on and power off).

(C) The critical combinations of weight, center of gravity position, load factor, altitude, speed, and power condition.

(iv) For failure conditions that result in excursions beyond operating limitations, freedom from flutter and divergence must be shown to increased speeds, so that the margins intended by paragraph (c)(1)(iii) of these special conditions are maintained.

(v) Failures of the system that result in forced structural vibrations (oscillatory failures) must not produce loads that could result in detrimental deformation of primary structure.

(2) For the continuation of the flight. For the rotorcraft in the system failed state, and considering any appropriate reconfiguration and flight limitations, the following apply:

(i) The loads derived from the following conditions (or used in lieu of the following conditions) at speeds up to V NE (power on and power off) (or the speed limitation prescribed for the remainder of the flight) and at the minimum and maximum main rotor speeds (if applicable) must be determined:

(A) The limit symmetrical maneuvering conditions specified in §§ 27.337 and 27.339;

(B) The limit gust conditions specified in § 27.341;

(C) The limit yaw maneuvering conditions specified in § 27.351;

(D) The limit unsymmetrical conditions specified in § 27.427; and

(E) The limit ground loading conditions specified in § 27.473.

(ii) For static strength substantiation, each part of the structure must be able to withstand the loads in paragraph (c)(2)(i) of these special conditions multiplied by a factor of safety depending on the probability of being in this failure state. The factor of safety is defined in figure 2.

(iii) For residual strength substantiation, the rotorcraft must be able to withstand two thirds of the ultimate loads defined in paragraph (c)(2)(ii) of these special conditions.

(iv) If the loads induced by the failure condition have a significant effect on fatigue or damage tolerance, then their effects must be taken into account.

(v) Freedom from flutter and divergence must also be shown up to 1.11 V NE (power on and power off), including any probable system failure condition combined with any damage required or selected for investigation by either § 27.571(e) or § 27.573(d).

(3) Consideration of certain failure conditions may be required by other sections of 14 CFR part 27 regardless of calculated system reliability. Where analysis shows the probability of these failure conditions to be extremely improbable, criteria other than those specified in this paragraph may be used for structural substantiation to show continued safe flight and landing.

(d) Failure indications. For system failure detection and indication, the following apply:

(1) The system must be checked for failure conditions, not shown to be extremely improbable, that degrade the structural capability below the level required by part 27 or that significantly reduce the reliability of the remaining operational portion of the system. As far as reasonably practicable, the flight crew must be made aware of these failures before flight. Certain elements of the control system, such as mechanical and hydraulic components, may use special periodic inspections, and electronic components may use daily checks, in lieu of detection and indication systems to achieve the objective of this requirement. These other means of detecting failures before flight are considered certification maintenance requirements and must be limited to components that are not readily detectable by normal detection and indication systems, and where service history shows that inspections will provide an adequate level of safety.

(2) The existence of any failure condition, not shown to be extremely improbable, during flight that could significantly affect the structural capability of the rotorcraft and for which the associated reduction in airworthiness can be minimized by suitable flight limitations, must be signaled to the flight crew. For example, failure conditions that result in a factor of safety between the rotorcraft strength and the loads of subpart C of this part, below 1.25, or flutter and divergence margins below 1.11 V NE (power on and power off), must be signaled to the crew during flight.

(e) Dispatch with known failure conditions. If the rotorcraft is to be dispatched in a known system failure condition that affects structural performance, or that affects the reliability of the remaining operational portion of the system to maintain structural performance, then the provisions of these special conditions must be met, including the provisions of paragraph (b) of these special conditions for the dispatched condition and paragraph (c) of these special conditions for subsequent failures. Expected operational limitations may be taken into account in establishing Pj as the probability of failure occurrence for determining the safety margin in figure 1. Flight limitations and expected operational limitations may be taken into account in establishing Qj as the combined probability of being in the dispatched failure condition and the subsequent failure condition for the safety margins in figure 2. These limitations must be such that the probability of being in this combined failure state and then subsequently encountering limit load conditions is extremely improbable. No reduction in these safety margins is allowed if the subsequent system failure rate is greater than 10 −3 per flight hour.

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2024-2553; Project Identifier MCAI-2024-00674-T” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this final rule.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Timothy P. Dowling, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 206-231-3667; email timothy.p.dowling@faa.gov. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2024-0216, dated November 15, 2024 (EASA AD 2024-0216) (also referred to as the MCAI), to correct an unsafe condition for all Airbus SAS Model A318 series airplanes; Model A319-111, -112, -113, -114, -115, -131, -132, -133, -151N, -153N, and -171N airplanes; Model A320-211, -212, -214, -215, -216, -231, -232, -233, -251N, -252N, -253N, -271N, -272N, and -273N airplanes; and Model A321 series airplanes. Model A320-215 airplanes are not certificated by the FAA and are not included on the U.S. type certificate data sheet; this AD therefore does not include those airplanes in the applicability. Model A321-253NY airplanes are not on the U.S. type certificate data sheet. However, the U.S. has certificated this model and plans to add it to the U.S. type certificate data sheet soon. Therefore, this AD includes Model A321-253NY airplanes. The MCAI states that occurrences were reported of jamming of, or inability to open, the MLG door during maintenance operations. Investigations identified that certain MLG door actuators may not have been assembled correctly. The FAA is issuing this AD to address this condition, which if not detected and corrected, could prevent the extension of the MLG, possibly resulting in significant damage to the airplane, and potentially causing a fire that will involve emergency evacuation of the passengers. You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2024-2553.

EASA AD 2024-0216 specifies procedures for repetitive inspections for any discrepancy of each affected MLG door, replacing affected parts, and eventual replacement of all affected parts. The discrepancy is defined as any MLG door actuator that does not meet all the results specified in the table in paragraph 5.6.2.2 in the material referenced in EASA AD 2024-0216. EASA AD 2024-0216 also prohibits the installation of affected parts. 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.

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 is issuing this AD after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This AD requires accomplishing the actions specified in EASA AD 2024-0216 described previously, except for any differences identified as exceptions in the regulatory text of this AD and except as discussed under “Differences Between This AD and the MCAI.”

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, EASA AD 2024-0216 is incorporated by reference in this AD. This AD requires compliance with EASA AD 2024-0216 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in EASA AD 2024-0216 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2024-0216. Material required by EASA AD 2024-0216 for compliance will be available at regulations.gov under Docket No. FAA-2024-2553 after this AD is published.

Paragraph (3) of EASA AD 2024-0216 specifies to replace each affected part with a serviceable part within 12 months. The FAA is considering requiring this replacement. However, the planned compliance time for the replacement would allow enough time to provide notice and opportunity for prior public comment on the merits of the replacement, and the unsafe condition is being addressed through repetitive inspections. Therefore, this AD does not adopt the requirements of paragraph (3) of EASA AD 2024-0216. However, operators may still do this optional terminating replacement.

Section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without providing notice and seeking comment prior to issuance. Further, section 553(d) of the APA authorizes agencies to make rules effective in less than thirty days, upon a finding of good cause.

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because certain MLG door actuators may not have been assembled correctly. This condition, if not detected and corrected, could prevent the extension of the MLG, possibly resulting in significant damage to the airplane, and potentially causing a fire that will involve emergency evacuation of the passengers. Additionally, the compliance time in this AD is shorter than the time necessary for the public to comment and for publication of the final rule. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b).

In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forgo notice and comment.

The requirements of the RFA do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because the FAA has determined that it has good cause to adopt this rule without notice and comment, RFA analysis is not required.

The FAA estimates that this AD affects 1,933 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates the following costs to do any necessary on-condition action that would be required based on the results of any required or optional actions. The FAA has no way of determining the number of aircraft that might need this on-condition action:

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, and

(2) Will not affect intrastate aviation in Alaska.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes the Class E airspace extending upward from 700 feet above the surface at Ottawa Executive Airport, Zeeland, MI, to support IFR operations at this airport.

The FAA published an NPRM for Docket No. FAA-2024-2084 in the Federal Register (89 FR 68376; August 26, 2024) proposing to establish Class E airspace at Zeeland, MI. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. Two comments were received by the end of the comment period October 10, 2024. One of the anonymous commenters stated their support for the proposed development of the Class E airspace at the Ottawa Executive Airport located in Zeeland, MI, believed that the development of a Class Echo airspace around Ottawa Executive Airport (Z98), will be greatly beneficial to the airport and its surrounding airports. They felt that since there is currently no published instrument procedures, it is unsafe for even instrumental rated pilots to attempt to navigate around the airport. It was also stated that Z98 should receive an AWOS system to ensure weather safety for pilots operating from the airport. They also, believed that the establishment of a Class E airspace would prove greatly beneficial to Ottawa Executive Airport.

The other commenter expressed their support for the proposed development of Class E airspace at the Ottawa Executive Airport located in Zeeland, MI. Expressed that the change will significantly improve the safety of IFR operations at Z98. The 6.4-mile radius seems reasonable as the boundary for the airspace as this will establish safer approaches and departures under instrument operations. Also, stated that Z98, would be a great alternative as an airport with instrument procedures, if a pilot were not interested in entering the neighboring Class C and D airports. Commenter felt this would improve airport traffic and benefit the local economy. However, they would consider Z98 to obtain an AWOS/ASOS for METAs as an extra precaution, while this airport is developing a Class E. Overall, this proposal would be efficient in improving the safety and efficiency at the Ottawa Executive Airport in Zeeland, Michigan. The FAA only considers airports for Class E airspace establishment to support instrument flight rule operations at an airport.

Class E airspace designations are published in paragraph 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11J, dated July 31, 2024, and effective September 15, 2024. FAA Order JO 7400.11J is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next update to FAA Order JO 7400.11.

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

This amendment to 14 CFR part 71 establishes Class E airspace extending upward from 700 feet above the surface to within a 6.4-mile radius of Ottawa Executive Airport, Zeeland, MI.

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

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

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it corrects an error of incorrect coordinates in a previously published regulatory text.

The FAA published a final rule for Docket No. FAA-2024-1347 in the Federal Register (89 FR 84812; October 24, 2024) that amended Q-1, Q-902, V-495, and J-502. The action also revoked J-589 and established T-487 and T-895. Subsequent to publication, the FAA identified the coordinates listed in the regulatory text for the route point DISCO are incorrect. This action corrects that error.

Accordingly, pursuant to the authority delegated to me, Amendment of United States Area Navigation Routes Q-1 and Q-902, Very High Frequency Omnidirectional Range Federal Airway V-495, and Jet Route J-502. Also, the revocation of Jet Route J-589 and the establishment of United States Area Navigation Route T-487 and Canadian Area Navigation Route T-895 in Northwestern United States, published in the Federal Register on October 24, 2024 (89 FR 84812), is corrected as follows:

FR Doc. 2024-24590, on page 84814, the coordinates listed for the route point DISCO in the regulatory text for Q-902 and T-487 are revised to read (lat. 48°22′35.81″ N, long. 123°09′30.60″ W)

Mortgagees seeking to originate a Federal Housing Administration (FHA)-insured mortgage regulated pursuant to 24 CFR part 200, subpart A, must comply with the project completion funding requirements in 24 CFR 200.54. These requirements provide that a mortgagor must deposit funds with its mortgagee that are sufficient, when added to the proceeds from the FHA-insured mortgage, to assure completion of planned multifamily or healthcare facility project work and to pay the initial service charge, carrying charges, and legal and organization expenses incident to the construction of the project. Typically, 24 CFR 200.54(b) requires that the funds deposited by the mortgagor with the mortgagee (mortgagor-provided funds) must be disbursed in full for project work, material, and incidental charges and expenses (collectively, “project-related expenses”) before the mortgagee may disburse any mortgage proceeds. HUD requires that mortgagees disburse the mortgagor-provided funds in full before disbursing any mortgage proceeds as a basic risk measure. 1

For most mortgages regulated pursuant to 24 CFR part 200, subpart A, the mortgagor-provided funds are disbursed in full to pay for project-related expenses with the initial advance of the insured mortgage proceeds at the time the insured mortgage is endorsed. For certain mortgages, however, the amount of mortgagor-provided funds exceeds the amount of project-related expenses due at the time the insured mortgage is endorsed. Where the mortgagor-provided funds are not fully disbursed at the time the insured mortgage is endorsed, the mortgagor-provided funds are fully disbursed through subsequent disbursements by the mortgagee, usually with the mortgagor-provided funds being disbursed within two months after the insured mortgage is endorsed.

Given that 24 CFR 200.54(b) does not typically permit insured mortgage proceeds to be disbursed until the mortgagee disburses all mortgagor-provided funds, if the mortgagor-provided funds are not fully disbursed at the time the insured mortgage is endorsed, there may be challenges in pooling the mortgage into a mortgage-backed security (MBS) guaranteed by the Government National Mortgage Association (Ginnie Mae) without conflicting with 24 CFR 200.54(b), possibly creating financial difficulties for the mortgagor. 2 As such, for an insured mortgage to be pooled into a Ginnie Mae guaranteed MBS, the insured mortgage proceeds must be permitted to be disbursed.

This financial difficulty created by 24 CFR 200.54(b) typically only exists for a short period of usually no longer than two months after the endorsement of the FHA-insured mortgage, by which time the mortgagor-provided funds are usually fully disbursed. During the short period, the mortgagee must implement unusual and burdensome mortgage servicing practices to maintain compliance with 24 CFR 200.54(b). If a mortgagee is unable to pool an insured mortgage into a Ginnie Mae guaranteed MBS at endorsement, the mortgagee might never be able to securitize the insured mortgage and might fail to meet contractually required delivery dates between the mortgagee and investor. This could potentially lead to costly investor compensation fees. The mortgagee may also experience issues relating to its financial liquidity cycle. When many insured mortgages are unable to be pooled into Ginnie Mae guaranteed MBSs at the time the insured mortgages are endorsed, cascading issues for the broader mortgage market can occur. These can include reducing the overall liquidity of the mortgage market and increasing the cost on mortgagors to borrow funds, which reduces the availability of housing and ultimately harms HUD's mission to create strong, sustainable, inclusive communities and affordable homes for all.

HUD has recently addressed this issue with the requirements in 24 CFR 200.54(b) for mortgages insured under National Housing Act sections 213 and 221(d)(4) by issuing a partial regulatory waiver of the requirements of 24 CFR 200.54(b) (Partial Waiver of 24 CFR 200.54(b)). 3 The Partial Waiver of 24 CFR 200.54(b) partially waives the requirement in 24 CFR 200.54(b) that mortgagor-provided funds “must be disbursed in full” for project-related expenses before any disbursement of funds from the insured mortgage. Instead, the Partial Waiver of 24 CFR 200.54(b) permits a mortgagee to disburse funds from the insured mortgage in an amount up to one-half percent (0.5%) of the initially endorsed mortgage amount. The Partial Waiver of 24 CFR 200.54(b) allows mortgagees to comply with FHA's requirements and pool insured mortgages into Ginnie Mae guaranteed MBSs.

On August 6, 2024, HUD published for public comment a proposed rule entitled “Disbursing Multifamily Mortgage Proceeds: Permitting Mortgagees to Disburse Mortgage Proceeds with Mortgagor-Provided Funds.”  4 The proposed rule proposed to add an exception to the requirement in 24 CFR 200.54(b) that the funds provided by the mortgagor must be disbursed in full before the disbursement of any proceeds from the insured mortgage. The proposed rule also proposed to make non-substantive terminology and organizational edits to 24 CFR 200.54 that would not affect any other requirements within the section.

The exception proposed to be added to 24 CFR 200.54(b) would permit mortgagees, where the funds provided by the mortgagor are not fully disbursed with the initial advance of the insured mortgage proceeds, to disburse up to 1 percent of the mortgage amount initially endorsed for insurance before requiring that the funds provided by the mortgagor be disbursed in full. This proposed exception would permit that a mortgagee could disburse mortgage proceeds at the time the mortgage is initially endorsed for insurance up to a maximum of 1 percent of the initially endorsed mortgage amount. Alternatively, a mortgagee could choose to disburse mortgage proceeds in any amount on a monthly basis, whether consecutive or not, up to a combined maximum of 1 percent of the initially endorsed insured mortgage amount until the mortgagor-provided funds are fully disbursed.

After reviewing and considering the public comments received during the proposed rule stage of this rulemaking, HUD is publishing this final rule with only minor, non-substantive revisions from the proposed rule. HUD believes that the added exception to 24 CFR 200.54(b) will help keep FHA-insured mortgage products competitive in economic environments with rising interest rates and/or multi-year high interest rates, especially for new construction projects, where a higher proportion of mortgage proceeds are constrained by FHA's debt service coverage ratio requirements. In an economic environment with rising and high interest rates, mortgagors must deposit additional funds with their mortgagee, making it more likely that the mortgagor-provided funds will not be fully disbursed during the initial advance of the insured mortgage proceeds. HUD believes that this added exception will help ensure that interest rates for FHA-insured mortgages remain competitive and ensure the liquidity of FHA-insured mortgages on the secondary mortgage market.

This public comments section contains a summary of the public comments that HUD received in response to the proposed rule.

HUD should allow mortgage proceeds to be disbursed using a proportional debt to equity amount without requiring that mortgagor-proved funds first be fully exhausted.

A commenter supported the proposed rule as a step in the right direction but suggested that HUD go further. Other commenters supported HUD's goal to allow mortgagees to pool mortgages into Ginnie Mae guaranteed MBSs prior to mortgagor-provided funds being disbursed in full but believed the rule as proposed would be ineffective.

A commenter stated that HUD's proposed rule should be changed to allow mortgage proceeds to be drawn for HUD-covered multifamily loans proportionate to the proportion of the amount of debt i.e., the loan amount, to equity, i.e., the mortgagor-provided funds, in the HUD transaction. As the commenter provided by example, a loan that has a 60 percent loan to cost ratio would, at each draw, draw 60 percent from the Ginnie Mae MBS and 40% from borrower equity.

Another commenter, similarly, suggested that HUD allow up to 35 percent of the insured loan proceeds to be drawn at initial endorsement, and then allow subsequent draws in proportion to the mortgagor's remaining funds. This commenter stated that their recommendation would significantly lower insured loan interest rates.

Commenters pointed to the problems associated with higher interest rates for construction loans and stated that their recommendations would address the issue of investors requiring higher interest rates to hedge variable interest rates while waiting for issuance.

A commenter stated that the multiple Ginnie Mae guaranteed MBSs issued and delivered in various amounts to a Ginnie Mae investor over the length of the construction period, typically 18 to 24 months, are delivered to the investor in an amount equal to the mortgage proceeds disbursed and, in months where no mortgage proceeds can be disbursed, no Ginnie Mae MBS is delivered. The commenter stated concerns that under HUD's proposed rule, in situations where mortgagor-provided funds are not fully disbursed in the first installment that the first Ginnie Mae guaranteed MBS delivery can be no more than 1 percent of the mortgage, and no subsequent Ginnie Mae guaranteed MBS deliveries will occur until borrower equity is exhausted. The commenter noted that it is common in today's lending environment that borrower equity makes up 30 percent to 40 percent of the total sources of funds in a construction loan. The commenter described that all of this means that investors must price into the agreed interest rate the cost of waiting 7 to 14, or more, months for Ginnie Mae guaranteed MBS issuance in any substantive amount. The commenter stated that this delay can increase interest rates by approximately 10 to 50 basis points.

Another commenter specifically noted that for Midwestern and smaller community projects, it can take up to a year before any insured loan proceeds are disbursed in a meaningful amount because the amount of required equity can be higher and take longer to exhaust. The commenter noted that because of this, the increase in interest rates in these communities can be anywhere between 0.15 and 0.40 percentage points.

Commenters stated that their suggested changes represented a low risk to HUD, and that their suggestions do not increase the risk beyond the risk level already accepted under the proposed rule. A commenter noted that FHA-approved lenders are required to hold all the mortgagor's required funds in escrow and to hold the initial operating deficit and working capital escrow fund either in cash or an irrevocable letter of credit. Another commenter noted that if a HUD-insured project defaulted during construction, HUD and the lender, under HUD forms HUD-92441M (building-loan agreement) and HUD-94000M (security instrument), have the right to use mortgagor-provided funds, which are pledged collateral, to offset any losses or claims on disbursed loan proceeds. The commenter provided the example of a $10 million project with 40 percent mortgagor-provided funds and 60 percent mortgage-proceeds, which the commenter stated that the proposed rule would allow for a $60,000 Ginnie Mae draw before the mortgagor began to draw down equity. Under the commenter's suggestion, the cash equity balance would stay higher for a longer period, meaning at the point where $3 million had been drawn from Ginnie Mae, $2 million would remain in cash equity as collateral.

A commenter noted that FHA lenders can model the projected interest cost by preparing a draw schedule based on the projected draw down of insured loan proceeds. The commenter noted an additional 10 percent cushion could be added to the estimate to be reasonably confident there is sufficient capitalized interest carried in the project's budget.

Commenters also stated that HUD has extensive experience with proportional debt to equity construction loan disbursements through the Low-Income Housing Credit (LIHTC) exception to HUD's full mortgagor-provided funds disbursement requirement. Commenters stated that HUD has allowed this LIHTC exception without increased risk to HUD and its mortgage insurance fund. Commenters stated that allowing proportional debt to equity disbursements for non-LIHTC projects, under their suggested change, would be less risky because LIHTC equity and bridge loan proceeds are not funded in full nor are they held by the lender like the funds are in non-LIHTC construction projects to which this proposed change would apply.

HUD Response: HUD disagrees that mortgage proceeds should be disbursed to mortgagors in proportional debt to equity amounts. Through this rulemaking, HUD's is maintaining the intent of the existing regulation, which is that a borrower's equity should be invested ahead of debt. With a borrower's equity at risk upfront, the owners are properly incentivized to prudently manage and complete the project.

The regulation change made through this rulemaking is a technical, limited modification to support the timely issuance of Ginnie Mae guaranteed MBSs, while preserving the risk mitigation principle of upfront equity investment. Under the existing 24 CFR 200.54(b), a strict requirement that 100 percent of all borrower equity must be disbursed can delay the initial issuance of a Ginnie Mae guaranteed MBS and potentially disrupt the mortgage-banking liquidity cycle. HUD has determined that 1 percent of the mortgage amount can be drawn before borrower's equity is disbursed in full, without impairing a borrower's incentive to protect its equity investment. HUD determined this, in part, by its experience processing mortgages and observing mortgagee performance while relying on the Partial Waiver of 24 CFR 200.54(b).

HUD should also allow disbursements of up to $25,000 per month in mortgage proceeds.

A commenter suggested several technical edits to the proposed regulatory text of 24 CFR 200.54(b)(2). The commenter suggested that HUD allow the greater of 1 percent of the mortgagee funds or $25,000 monthly in mortgage proceeds. The commenter noted that drawdowns are made monthly, and HUD's proposed rule appeared to only apply to the initial draw.

HUD Response: HUD disagrees that the regulation should allow the greater of 1 percent of the mortgagee funds or $25,000 monthly in mortgage proceeds. In very infrequent cases, certain small loan balance multifamily loans may not achieve the investors' preferred $25,000 minimum denomination under a 1 percent threshold; however, modifying the regulation to optimize investor preferences for the infrequently occurring nuances of small loan sizes is beyond the scope of this regulation change.

HUD should adjust its permitted disbursement amount through Federal Register notice.

A commenter suggested that HUD create a new 24 CFR 200.54(b)(3) that allows HUD to adjust the permitted disbursement amount through the publication of a notice in the Federal Register . The commenter stated that the Federal Register notice should provide a 30 day public comment period prior to the finalizing of the adjusted disbursement amount that was announced in the suggested notice. The commenter believed that a 1 percent disbursement amount may not be enough and thought HUD might decide to increase the percentage in the future. The commenter noted that adjusting the permitted disbursement amount through a Federal Register notice is similar to the strategy used for HUD's mortgage insurance premium regulations.

HUD Response: HUD disagrees that 24 CFR 200.54(b) needs periodic updates. Periodically adjusting the 1 percent threshold to a different percentage through a Federal Register notice is unnecessary because HUD has determined that it is sufficient to allow up to the 1 percent threshold amount can be drawn before a borrower's equity is disbursed in full without impairing borrower incentive to protect its equity investment.

HUD's proposed rule goes too far by allowing even 1 percent of mortgage proceeds to be disbursed before requiring the full disbursement of mortgagor-provided funds.

A commenter disagreed with HUD's proposed rule by saying that HUD's proposed rule goes too far by allowing even 1 percent of mortgagee proceeds to be disbursed before requiring the full disbursement of mortgagor-provided funds. The commenter stated that requiring full disbursement of mortgagor-provided funds before mortgage proceeds is a crucial risk mitigation measure to prevent financial mismanagement and delays in projects. The commenter stated that HUD's proposed rule could introduce instability into the MBS market because, as is currently required, by first requiring the full disbursement of mortgagor-provided funds ensures the financial soundness of the securities issued. The commenter also suggested that HUD's proposed rule could negatively impact small businesses by creating unpredictable financial environments, which would cause business uncertainties and cash-flow issues.

HUD Response: HUD disagrees that a 1 percent disbursement of mortgage proceeds prior to full disbursement of mortgagor-provided funds materially impairs the over-arching risk mitigation set forth by HUD's regulations. HUD has determined that 1 percent of the mortgage amount can be drawn before a borrower's equity is disbursed in full without impairing borrower incentive to protect its equity investment. HUD determined this, in part, by its experience processing mortgages and observing mortgagee performance while relying on the Partial Waiver of 24 CFR 200.54(b).

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

The only substantive regulatory change made through this rulemaking is to permit mortgagees, where the funds provided by the mortgagor are not fully disbursed with the initial advance of the insured mortgage proceeds, to disburse up to 1 percent of the mortgage amount initially endorsed for insurance before requiring that the funds provided by the mortgagor be disbursed in full. This rulemaking was determined to not be a “significant regulatory action” as defined in section 3(f) of Executive Order 12866, as amended by Executive Order 14094, and is not an economically significant regulatory action and therefore was not subject to OMB review.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The changes in this rulemaking are limited to permitting mortgagees, where the funds provided by the mortgagor are not fully disbursed with the initial advance of the insured mortgage proceeds, to disburse up to 1 percent of the mortgage amount initially endorsed for insurance before requiring that the funds provided by the mortgagor be disbursed in full. This change will not have a significant economic impact on a substantial number of small entities. Accordingly, the undersigned certifies that this final rule will not have a significant economic impact on a substantial number of small entities.

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 rulemaking 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.

A Finding of No Significant Impact (FONSI) with respect to the environment was made, at the proposed rule stage of this rulemaking, in accordance with HUD regulations at 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI remains applicable to this final rule and is available through the Federal eRulemaking Portal at http://www.regulations.gov. The FONSI is also available for public inspection during regular business hours in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, you must schedule an appointment in advance to review the FONSI by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

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

For the reasons stated in the preamble, HUD amends 24 CFR part 200 as follows:

The Coast Guard will enforce the special local regulation in 33 CFR 100.703 for the Gasparilla parade regulated area identified in Table 1 to § 100.703, Item 1, from 11:30 a.m. through 2 p.m. on January 25, 2025. This action is being taken to provide for the safety of life on navigable waterways during this event. Our regulation for recurring marine events, Captain of the Port Sector St. Petersburg, Table 1 to § 100.703, Item 1, specifies the location of the regulated area for the Gasparilla parade, which encompasses portions of Hillsborough Bay, Seddon Channel, Sparkman Channel and Hillsborough River located in Tampa, FL. Under the provisions of 33 CFR 100.703(c), all persons and vessels are prohibited from entering the regulated area, except those persons and vessels participating in the event, unless they receive permission to do so from the Coast Guard Patrol Commander, or designated representative.

Under the provisions of 33 CFR 100.703, spectator vessels may safely transit outside the regulated area, but may not anchor, block, loiter in, impede the transit of festival participants or official patrol vessels or enter the regulated area without approval from the Coast Guard Patrol Commander or a designated representative. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation. In addition to this notice of enforcement in the Federal Register , the Coast Guard will provide notice of the regulated area via Local Notice to Mariners, Marine Safety Information Bulletins, Broadcast Notice to Mariners, and on-scene designated representatives.

On January 9, 2023, the Coast Guard issued a temporary interim rule, titled Safety Zone, Port Arthur Canal, Sabine, Pass, TX (88 FR 1145), detailing the safety zone locations with an effective date range of January 1, 2023, through December 31, 2024. There, we indicated we would publish a temporary final rule if we determined that changes to the temporary interim rule are necessary.

On October 31, 2024, the Coast Guard was notified that previously planned high pressure testing of piping systems at Golden Pass LNG in Sabine Pass, TX was delayed, and that one additional test is needed. The test will occur between January 1, 2025, and June 30, 2025. As a result, the Coast Guard is extending the effective date of the safety zones through June 30, 2025.

The Coast Guard is issuing this temporary rule under the authority in 5 U.S.C. 553(b)(B). This statutory provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this extension because doing so would be impracticable. These safety zones must remain in place through June 30, 2025, to protect persons and vessels from the potential blast and fragmentation hazards associated with high pressure testing of piping systems at Golden Pass LNG. It is impracticable to publish an NPRM because we must extend these safety zones by December 31, 2024.

Also, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date of this temporary rule would be impracticable because prompt action is required to ensure the protection of persons and vessels from the potential hazards associated with high pressure testing of piping systems at Golden Pass LNG.

The Coast Guard is issuing this temporary interim rule under authority in 46 U.S.C. 70034. The Captain of the Port, Marine Safety Unit Port Arthur (COTP) has determined that potential hazards from high pressure testing of LNG piping systems are a safety concern for persons and vessels in the area of the testing. This rule is needed to protect persons and vessels from the hazards present during high pressure test of these piping systems.

This rule extends the effective date of safety zones, originally established on January 20, 2023, and effective through December 31, 2024, through June 30, 2025.

The safety zones have three separate exclusion areas: (1) Port Arthur Canal in the vicinity of Golden Pass LNG, shoreline to shoreline, between a western boundary of 093°55′44″ N and an eastern boundary of 093°54′36″ W; (2) Port Arthur Canal in the vicinity of Golden Pass LNG between a western boundary of 093°55′44″ N and an eastern boundary of 093°54′36″ W and extending from the south/west shoreline to the near channel limits as charted; and (3) Golden Pass LNG ship mooring basin within the following boundaries: starting on the shoreline west of the mooring basin at position 29°45′57.9″ N 093°55′39.6″ W, thence northeast to 29°45′59.25″ N 093°55′37.5″ W, thence to position W, thence the shoreline on the east side of the basin at position 29°45′50.7″ N 093°55′17.0″ W.

The extended duration of the zones is intended to protect personnel, vessels, and the maritime environment in these navigable waters during high pressure testing of LNG piping systems. No vessel or person will be permitted to enter the safety zones without obtaining permission from the COTP or a designated representative.

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

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

This regulatory action determination is based on the size, location, duration and entities impacted by the safety zones. Theses temporary safety zones affect approximately 750-yards of Port Arthur Canal in the vicinity of Golden Pass LNG. The test may permit vessel movements within the adjacent navigable channel or may restrict vessel traffic for a period of not more than 2 hours. Mariners will be advised of the time of testing and any associated vessel traffic restriction in advance via Broadcast Notice to Mariners and Vessel Traffic Service (VTS) Advisories.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zones may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves safety zones of short duration intended to protect persons and vessels from potential hazards associated with high pressure testing of piping system at the Golden Pass LNG facility in Sabine Pass, TX. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

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

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

On October 15, 2024, the Postal Service published a notice of proposed rulemaking (89 FR 82948) to discontinue the use of dual shipping labels in DMM subsection 602.10. In response to the proposed rule, the Postal Service received four formal responses, one of which was in agreement with the proposal. Two of the responses had several comments. The comments and responses are as follows:

Comment: Three comments requested an extension to the effective date.

Response: The Postal Service has taken these comments into consideration and, upon request, may provide a 90-day extension for compliance until April 1, 2025, for mailers specifically impacted by the elimination of dual shipping labels. However, the effective date will remain January 1, 2025. Mailers seeking an extension should submit a request to the attention of Nicole T. Wilson at delivery.confirmation@usps.gov.

Comment: One comment suggested the proposed solution failed to account for specific use cases where there is no clear alternative to dual shipping labels.

Response: The Postal Service has considered specific use cases and determined that there are few, if any, instances in which there are no alternatives to dual shipping labels. The shipper always has the option to simply determine in advance of label creation what carrier will ultimately deliver the package. Alternatively, if a dual label was created after the effective date of the rule, such label could simply be over labeled or the carrier markings could be obliterated in such fashion as to only display the selected delivery carrier's markings.

Comment: One comment suggests that the definition of what constitutes a “dual shipping label” for purposes of the enforcement of this rule is unclear.

Response: The Postal Service has considered this comment. DMM section 602.10.0 currently states, “Dual shipping labels are used by private shipper[s] to identify both the Postal Service and a private carrier as possible delivery agents.” This definition will now be reinserted into the new rule. Consistent with this, under the new rule, a label that identifies the Postal Service as the carrier may also include additional items of information so long as none of those additional items of information identify delivery agents other than the Postal Service. In other words, a label will not be considered a prohibited “dual shipping label” simply because it includes additional information beyond what is required for Postal Service label and address formats. Instead, it will only be considered a dual shipping label if any of the additional information included thereon identifies or can be used to designate delivery agents other than the Postal Service.

The Postal Service is discontinuing the use of dual shipping labels. Items bearing dual shipping labels should not be accepted and may be returned to the sender.

The Postal Service adopts the described changes to Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM), incorporated by reference in the Code of Federal Regulations. We will publish an appropriate amendment to 39 CFR part 111 to reflect these changes.

Accordingly, the Postal Service amends Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM), incorporated by reference in the Code of Federal Regulations as follows ( see 39 CFR 111.1):

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of 40 CFR part 174 through the Office of the Federal Register's e-CFR site at https://www.ecfr.gov/current/title-40 .

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2023-0022, in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before February 11, 2025. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2023-0022, by one of the following methods:

• Federal eRulemaking Portal: https://www.regulations.gov . Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at https://www.epa.gov/dockets/where-send-comments-epa-dockets .

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at https://www.epa.gov/dockets .

In the Federal Register of February 23, 2023 (88 FR 11401) (FRL-10579-01), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 0F9003) by Pioneer Hi-Bred International, Inc., 7100 NW 62nd Avenue, P.O. Box 1000, Johnston, Iowa 50131. The petition requested that 40 CFR part 174 be amended by establishing an exemption from the requirement of a tolerance for residues of Cry1Da2 protein. That document referenced a summary of the petition prepared by the petitioner Pioneer Hi-Bred International, Inc., which is available in the docket, https://www.regulations.gov . There were no comments received in response to the notice of filing.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . . ” Additionally, FFDCA section 408(b)(2)(D) requires that the Agency consider “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.”

EPA evaluated the available toxicity and exposure data on Cry1Da2 protein and considered its validity, completeness, and reliability, as well as the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. A summary of the data upon which EPA relied and its risk assessment based on those data can be found within the document entitled “Product Characterization Review and Human Health Risk Assessment of the Insecticidal Plant-Incorporated Protectant Active Ingredient, Bacillus thuringiensis Cry1Da2 and Plant-Incorporated Inert Ingredient DGT-28 EPSPS, and the Genetic Material Necessary (PHP88492) for their Production in Event DAS-1131-3 Maize, and Establishment of a Permanent Tolerance Exemption for Residues of these Proteins when used as a plant-incorporated protectant in corn” (hereafter Human Health Risk Assessment). This document, as well as other relevant information, is available in the docket for this action EPA-HQ-OPP-2023-0022.

The gene for the insecticidal protein Cry1Da2 was derived from the bacterium Bacillus thuringiensis (Bt) and contains sequences from Bt crystal toxins, Cry1Ab and Cry1D. The Cry1Da2 protein is intended to provide protection from certain lepidopteran pests of corn. In assessing the safety of the protein, the Agency used a “weight of evidence” approach and determined that, Cry1Da2 is not expected to pose any risk of toxicity to humans and the likelihood of the protein to be a food allergen is minimal. Submitted data show that the Cry1Da2 protein is not toxic via the oral route of exposure and a bioinformatics analysis did not indicate any homology to known toxins. Likewise, the potential for allergenicity is low because: (1) The bacterium source of Cry1Da2 protein, Bacillus thuringiensis, has a long history of safe use and is not considered to be a source of allergenic proteins; (2) bioinformatic analysis indicates no similarity between Cry1Da2 protein and known allergens; (3) Cry1Da2 protein degrades rapidly when exposed to simulated gastric fluid and completely digested within one minute when exposed to simulated intestinal fluid; (4) Cry1Da2 is inactivated when heated to high temperatures (≥75 °C) that are typical of food cooking; and (5) Cry1Da2 protein is not glycosylated, which further reduces its allergenicity potential. Glycosylation is an enzymatic post-translational process in which carbohydrates (glycans) link to proteins, creating structures which could lead to an immune response in humans.

The most likely exposure to the Cry1Da2 protein is dietary through consumption of food products made from corn containing the protein. Oral exposure from ingestion of drinking water is unlikely because the Cry1Da2 protein is present at very low levels within the plant cells and the amounts likely to enter the water column from leaves, pollen or plant detritus are low. Additionally, proteases and nucleases found in water and the environment would likely degrade the biological material containing the active ingredient and treatment process for municipal water plants are likely to remove Cry1Da2 residues. While dietary exposure is expected to be limited, even if there is dietary exposure to residues of Cry1Da2 protein, such exposure presents no concern for adverse effects due to the lack of toxicity or allergenicity.

Non-dietary, non-occupational or residential exposure via pulmonary, dermal, or ocular exposure is not likely since the Cry1Da2 protein is contained within plant cells and corn pollen is not respirable, which essentially eliminates these exposure routes or reduces them to negligible levels. Corn pollen is not considered respirable, as it consists of spherical particles ranging in size from 90 to 100 μm, whereas respirable particles are typically less than 10 μm. In the case of agricultural dusts derived from activities such as planting, cultivation, and harvest, these particles also tend to be of non-respirable sizes. Additionally, the low expression of Cry1Da2 in the grain of plants containing Cry1Da2 further supports the expectation that exposure via seed dust would be negligible. If exposure should occur, EPA concludes that such exposure would not be expected to present any risk due to the lack of toxicity. Thus, adverse effects are not expected due to non-occupational and residential exposure to Cry1Da2 protein. These findings are discussed in more detail in the Human Health Risk Assessment.

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.” No risk of cumulative toxicity or effects from Cry1Da2 protein has been identified as no toxicity or allergenicity has been shown for this protein in the submitted studies. Therefore, EPA has concluded that Cry1Da2 protein does not have a common mechanism of toxicity with other substances.

Although FFDCA section 408(b)(2)(C) provides for an additional tenfold margin of safety for infants and children in the case of threshold effects, EPA has determined that there are no such effects due to the lack of toxicity of Cry1Da2 protein. As a result, an additional margin of safety for the protection of infants and children is unnecessary.

Based upon its evaluation described above and in the Human Health Risk Assessment, EPA concludes that there is a reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of Cry1Da2 protein. Therefore, an exemption from the requirement of a tolerance is established for residues of Cry1Da2 protein in or on the food and feed commodities of corn: corn, field; corn, sweet; and corn, pop when used as a plant-incorporated protectant in corn.

EPA has determined that an analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation. Nonetheless, a validated enzyme linked immunosorbent assay (ELISA) was developed for detection of Cry1Da2 protein. This ELISA has been demonstrated to reliably detect the level of Cry1Da2 protein in the tissues of corn.

Therefore, an exemption from the requirement of a tolerance is established for residues of the Bacillus thuringiensis Cry1Da2 protein in or on the food and feed commodities of corn: corn, field; corn, sweet; and corn, pop when used as a plant-incorporated protectant (PIP) in corn.

This action establishes a tolerance exemption under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or Tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal governments, on the relationship between the National Government and the States or Tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of 40 CFR part 174 through the Office of the Federal Register's e-CFR site at https://www.ecfr.gov/current/title-40.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2022-0990, in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before February 11, 2025. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2022-0990, by one of the following methods:

• Federal eRulemaking Portal: https://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at https://www.epa.gov/dockets/where-send-comments-epa-dockets.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at https://www.epa.gov/dockets.

In the Federal Register of March 24, 2023 (88 FR 17778) (FRL-10579-02-OCSPP), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of an FFDCA petition (IN 11746) by Pioneer Hi-Bred International, Inc., 7100 NW 62nd Avenue, P.O. Box 1000, Johnston, Iowa 50131. The petition requested that 40 CFR part 174 be amended by establishing an exemption from the requirement of a tolerance for residues of DGT-28 EPSPS protein derived from Streptomyces sviceus when used as an inert ingredient in a plant-incorporated protectant in or on maize. That document referenced a summary of the petition prepared by the petitioner Pioneer Hi-Bred International, Inc., which is available in the docket, https://www.regulations.gov. There were no comments received in response to the notice of filing.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . . ” Additionally, FFDCA section 408(b)(2)(D) requires that the Agency consider “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.”

EPA evaluated the available toxicity and exposure data on DGT-28 EPSPS protein and considered its validity, completeness, and reliability, as well as the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. A summary of the data upon which EPA relied and its risk assessment based on those data can be found within the document entitled “Product Characterization Review and Human Health Risk Assessment of the Insecticidal Plant-Incorporated Protectant Active Ingredient, Bacillus thuringiensis Cry1Da2 and Plant-Incorporated Inert Ingredient DGT-28 EPSPS, and the Genetic Material Necessary (PHP88492) for their Production in Event DAS-1131-3 Maize, and Establishment of a Permanent Tolerance Exemption for Residues of these Proteins when used as a Plant-incorporated protectant in corn.” (hereafter Human Health Risk Assessment). This document, as well as other relevant information, is available in the docket for this action EPA-HQ-OPP-2022-0990.

The gene for the inert plant-incorporated protectant protein DGT-28 EPSPS was derived from the soil bacterium Streptomyces sviceus and is intended to confer tolerance to glyphosate herbicides. The Agency used a “weight of evidence” approach and determined that DGT-28 EPSPS protein is not expected to pose any risk of toxicity to humans and the likelihood of the protein to be a food allergen is minimal. Submitted data show that the DGT-28 EPSPS protein is not toxic via the oral route of exposure and bioinformatics analysis did not indicate any homology to known toxins. Likewise, the potential for allergenicity is low because: (1) A literature search for the bacterium source of DGT-28 EPSPS protein, Streptomyces sviceus, did not yield any results that would indicate that S. sviceus is a known source of mammalian toxic or allergenic proteins; (2) DGT-28 EPSPS has been demonstrated to catalyze the same reaction as other EPSPS enzymes covered under current tolerance exemptions and have not been found to be associated with adverse health effects; (3) bioinformatic analysis indicates no biologically relevant similarity between DGT-28 EPSPS protein and known allergens; (4) DGT-28 EPSPS protein degrades rapidly when exposed to simulated gastric fluid and is completely digested in simulated intestinal fluid; DGT-28 EPSPS is heat labile at temperatures exceeding 50 °C, indicating that it will likely denature in the course of normal thermal treatment during food preparation; and (5) DGT-28 EPSPS protein is not glycosylated, which further reduces its allergenicity potential. Glycosylation is an enzymatic post-translational process in which carbohydrates (glycans) link to proteins, creating structures which could lead to an immune response in humans.

The most likely exposure to the DGT-28 EPSPS protein is dietary through consumption of food products made from corn containing the protein. Oral exposure from ingestion of drinking water is unlikely because the DGT-28 EPSPS protein is present at very low levels within the plant cells, and the amounts likely to enter the water column from leaves, pollen or plant detritus are low. Additionally, proteases and nucleases found in water and the environment would likely degrade the biological material containing the active ingredients and treatment process for municipal water plants are likely to remove DGT-28 EPSPS residues. While dietary exposure is expected to be limited, even if there is dietary exposure to residues of DGT-28 EPSPS protein, such exposure presents no concern for adverse effects due to the lack of toxicity or allergenicity.

Non-dietary, non-occupational or residential exposure via pulmonary or ocular exposure is not likely since DGT-28 EPSPS protein is contained within plant cells, and corn pollen is not respirable. Exposure via the skin is somewhat more likely via the contact with corn products which might have been processed in a way that disrupts cellular structure. However, naturally occurring proteases are likely to degrade proteins in contact with the skin and, as described above, the DGT-28 EPSPS protein has little or no potential toxicity to mammals and minimal potential for allergenicity. Thus, adverse effects are not expected due to non-occupational and residential exposure to DGT 28-EPSPS protein. These findings are discussed in more detail in the Human Health Risk Assessment.

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.” No risk of cumulative toxicity or effects from DGT-28 EPSPS protein has been identified as no toxicity or allergenicity has been shown for this protein in the submitted studies. Therefore, EPA has concluded that DGT-28 EPSPS protein does not have a common mechanism of toxicity with other substances.

Although FFDCA section 408(b)(2)(C) provides for an additional tenfold margin of safety for infants and children in the case of threshold effects, EPA has determined that there are no such effects due to the lack of toxicity of DGT-28 EPSPS protein. As a result, an additional margin of safety for the protection of infants and children is unnecessary.

Based upon its evaluation described above and in the Human Health Risk Assessment, EPA concludes that there is a reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of the DGT-28 EPSPS protein. Therefore, an exemption from the requirement of a tolerance is established for residues of DGT-28 EPSPS protein in or on the food and feed commodities of corn: corn, field; corn, sweet; and corn, pop when used as a plant-incorporated protectant inert ingredient in corn.

Validated enzyme linked immunosorbent assays (ELISAs) are available analytical methods for detection of DGT-28 EPSPS protein. These ELISAs have been demonstrated to reliably detect the levels of protein in the tissues of corn.

Therefore, an exemption from the requirement of a tolerance is established for residues of the Streptomyces sviceus DGT-28 EPSPS (5-enolpyruvylshikimate-3-phosphate synthase) protein in or on the food and feed commodities of corn: corn, field; corn, sweet; and corn, pop when used as an inert ingredient in a plant-incorporated protectant (PIP) in corn.

This action establishes a tolerance exemption under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance exemption in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or Tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal governments, on the relationship between the National Government and the States or Tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

In 1980, Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9601-9675 (“CERCLA” or “the Act”), in response to the dangers of uncontrolled releases or threatened releases of hazardous substances, and releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. CERCLA was amended on October 17, 1986, by the Superfund Amendments and Reauthorization Act (“SARA”), Public Law 99-499, 100 Stat. 1613 et seq.

To implement CERCLA, the EPA promulgated the revised National Oil and Hazardous Substances Pollution Contingency Plan (“NCP”), 40 CFR part 300, on July 16, 1982 (47 FR 31180), pursuant to CERCLA section 105 and Executive Order 12316 (46 FR 42237, August 20, 1981). The NCP sets guidelines and procedures for responding to releases and threatened releases of hazardous substances, or releases or substantial threats of releases into the environment of any pollutant or contaminant that may present an imminent or substantial danger to the public health or welfare. The EPA has revised the NCP on several occasions. The most recent comprehensive revision was on March 8, 1990 (55 FR 8666).

As required under section 105(a)(8)(A) of CERCLA, the NCP also includes “criteria for determining priorities among releases or threatened releases throughout the United States for the purpose of taking remedial action and, to the extent practicable, taking into account the potential urgency of such action, for the purpose of taking removal action.” “Removal” actions are defined broadly and include a wide range of actions taken to study, clean up, prevent or otherwise address releases and threatened releases of hazardous substances, pollutants or contaminants (42 U.S.C. 9601(23)).

The NPL is a list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States. The list, which is appendix B of the NCP (40 CFR part 300), was required under section 105(a)(8)(B) of CERCLA, as amended. Section 105(a)(8)(B) defines the NPL as a list of “releases” and the highest priority “facilities” and requires that the NPL be revised at least annually. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation to assess the nature and extent of public health and environmental risks associated with a release of hazardous substances, pollutants or contaminants. The NPL is of only limited significance, however, as it does not assign liability to any party or to the owner of any specific property. Also, placing a site on the NPL does not mean that any remedial or removal action necessarily need be taken.

For purposes of listing, the NPL includes two sections, one of sites that are generally evaluated and cleaned up by the EPA (the “General Superfund section”) and one of sites that are owned or operated by other Federal agencies (the “Federal Facilities section”). With respect to sites in the Federal Facilities section, these sites are generally being addressed by other federal agencies. Under Executive Order 12580 (52 FR 2923, January 29, 1987) and CERCLA section 120, each Federal agency is responsible for carrying out most response actions at facilities under its own jurisdiction, custody or control, although the EPA is responsible for preparing a Hazard Ranking System (“HRS”) score and determining whether the facility is placed on the NPL.

There are three mechanisms for placing sites on the NPL for possible remedial action (see 40 CFR 300.425(c) of the NCP): (1) A site may be included on the NPL if it scores sufficiently high on the HRS, which the EPA promulgated as appendix A of the NCP (40 CFR part 300). The HRS serves as a screening tool to evaluate the relative potential of uncontrolled hazardous substances, pollutants or contaminants to pose a threat to human health or the environment. On December 14, 1990 (55 FR 51532), the EPA promulgated revisions to the HRS partly in response to CERCLA section 105(c), added by SARA. On January 9, 2017 (82 FR 2760), a subsurface intrusion component was added to the HRS to enable the EPA to consider human exposure to hazardous substances or pollutants and contaminants that enter regularly occupied structures through subsurface intrusion when evaluating sites for the NPL. The current HRS evaluates four pathways: ground water, surface water, soil exposure and subsurface intrusion, and air. As a matter of agency policy, those sites that score 28.50 or greater on the HRS are eligible for the NPL. (2) Each State may designate a single site as its top priority to be listed on the NPL, without any HRS score. This provision of CERCLA requires that, to the extent practicable, the NPL include one facility designated by each State as the greatest danger to public health, welfare or the environment among known facilities in the State. This mechanism for listing is set out in the NCP at 40 CFR 300.425(c)(2). (3) The third mechanism for listing, included in the NCP at 40 CFR 300.425(c)(3), allows certain sites to be listed without any HRS score, if all of the following conditions are met:

• The Agency for Toxic Substances and Disease Registry (ATSDR) of the U.S. Public Health Service has issued a health advisory that recommends dissociation of individuals from the release.

• The EPA determines that the release poses a significant threat to public health.

• The EPA anticipates that it will be more cost-effective to use its remedial authority than to use its removal authority to respond to the release.

The EPA promulgated an original NPL of 406 sites on September 8, 1983 (48 FR 40658) and generally has updated it at least annually.

A site may undergo remedial action financed by the Trust Fund established under CERCLA (commonly referred to as the “Superfund”) only after it is placed on the NPL, as provided in the NCP at 40 CFR 300.425(b)(1). (“Remedial actions” are those “consistent with a permanent remedy, taken instead of or in addition to removal actions” (40 CFR 300.5).) However, under 40 CFR 300.425(b)(2), placing a site on the NPL “does not imply that monies will be expended.” The EPA may pursue other appropriate authorities to respond to the releases, including enforcement action under CERCLA and other laws.

The NPL does not describe releases in precise geographical terms; it would be neither feasible nor consistent with the limited purpose of the NPL (to identify releases that are priorities for further evaluation), for it to do so. Indeed, the precise nature and extent of the site are typically not known at the time of listing.

Although a CERCLA “facility” is broadly defined to include any area where a hazardous substance has “come to be located” (CERCLA section 101(9)), the listing process itself is not intended to define or reflect the boundaries of such facilities or releases. Of course, HRS data (if the HRS is used to list a site) upon which the NPL placement was based will, to some extent, describe the release(s) at issue. That is, the NPL site would include all releases evaluated as part of that HRS analysis.

When a site is listed, the approach generally used to describe the relevant release(s) is to delineate a geographical area (usually the area within an installation or plant boundaries) and identify the site by reference to that area. However, the NPL site is not necessarily coextensive with the boundaries of the installation or plant, and the boundaries of the installation or plant are not necessarily the “boundaries” of the site. Rather, the site consists of all contaminated areas within the area used to identify the site, as well as any other location where that contamination has come to be located, or from where that contamination came.

In other words, while geographic terms are often used to designate the site ( e.g., the “Jones Co. Plant site”) in terms of the property owned by a particular party, the site, properly understood, is not limited to that property ( e.g., it may extend beyond the property due to contaminant migration), and conversely may not occupy the full extent of the property ( e.g., where there are uncontaminated parts of the identified property, they may not be, strictly speaking, part of the “site”). The “site” is thus neither equal to, nor confined by, the boundaries of any specific property that may give the site its name, and the name itself should not be read to imply that this site is coextensive with the entire area within the property boundary of the installation or plant. In addition, the site name is merely used to help identify the geographic location of the contamination; and is not meant to constitute any determination of liability at a site. For example, the name “Jones Co. plant site,” does not imply that the Jones Company is responsible for the contamination located on the plant site.

EPA regulations provide that the remedial investigation (“RI”) “is a process undertaken . . . to determine the nature and extent of the problem presented by the release” as more information is developed on site contamination, and which is generally performed in an interactive fashion with the feasibility study (“FS”) (40 CFR 300.5). During the RI/FS process, the release may be found to be larger or smaller than was originally thought, as more is learned about the source(s) and the migration of the contamination. However, the HRS inquiry focuses on an evaluation of the threat posed and therefore the boundaries of the release need not be exactly defined. Moreover, it generally is impossible to discover the full extent of where the contamination “has come to be located” before all necessary studies and remedial work are completed at a site. Indeed, the known boundaries of the contamination can be expected to change over time. Thus, in most cases, it may be impossible to describe the boundaries of a release with absolute certainty.

Further, as noted previously, NPL listing does not assign liability to any party or to the owner of any specific property. Thus, if a party does not believe it is liable for releases on discrete parcels of property, it can submit supporting information to the agency at any time after it receives notice it is a potentially responsible party.

For these reasons, the NPL need not be amended as further research reveals more information about the location of the contamination or release.

The EPA may delete sites from the NPL where no further response is appropriate under Superfund, as explained in the NCP at 40 CFR 300.425(e). This section also provides that the EPA shall consult with States on proposed deletions and shall consider whether any of the following criteria have been met:

(i) Responsible parties or other persons have implemented all appropriate response actions required;

(ii) All appropriate Superfund-financed response has been implemented and no further response action is required; or

(iii) The remedial investigation has shown the release poses no significant threat to public health or the environment and taking of remedial measures is not appropriate.

In November 1995, the EPA initiated a policy to delete portions of NPL sites where cleanup is complete (60 FR 55465, November 1, 1995). Total site cleanup may take many years, while portions of the site may have been cleaned up and made available for productive use.

The EPA also has developed an NPL construction completion list (“CCL”) to simplify its system of categorizing sites and to better communicate the successful completion of cleanup activities (58 FR 12142, March 2, 1993). Inclusion of a site on the CCL has no legal significance.

Sites qualify for the CCL when: (1) any necessary physical construction is complete, whether or not final cleanup levels or other requirements have been achieved; (2) the EPA has determined that the response action should be limited to measures that do not involve construction ( e.g., institutional controls); or (3) the site qualifies for deletion from the NPL. For more information on the CCL, see the EPA's internet site at https://www.epa.gov/superfund/construction-completions-national-priorities-list-npl-sites-number.

The Sitewide Ready for Anticipated Use measure represents important Superfund accomplishments, and the measure reflects the high priority the EPA places on considering anticipated future land use as part of the remedy selection process. See Guidance for Implementing the Sitewide Ready-for-Reuse Measure, May 24, 2006, OSWER 9365.0-36. This measure applies to final and deleted sites where construction is complete, all cleanup goals have been achieved, and all institutional or other controls are in place. The EPA has been successful on many occasions in carrying out remedial actions that ensure protectiveness of human health and the environment for current and future land uses, in a manner that allows contaminated properties to be restored to environmental and economic vitality. For further information, please go to https://www.epa.gov/superfund/about-superfund-cleanup-process#reuse.

In order to maintain close coordination with States and Tribes in the NPL listing decision process, the EPA's policy is to determine the position of the States and Tribes regarding sites that the EPA is considering for listing. This consultation process is outlined in two memoranda that can be found at the following website: https://www.epa.gov/superfund/statetribal-correspondence-concerning-npl-site-listing.

The EPA has improved the transparency of the process by which State and Tribal input is solicited. The EPA is using the Web and where appropriate more structured State and Tribal correspondence that: (1) Explains the concerns at the site and the EPA's rationale for proceeding; (2) requests an explanation of how the State intends to address the site if placement on the NPL is not favored; and (3) emphasizes the transparent nature of the process by informing States that information on their responses will be publicly available.

A model letter and correspondence between the EPA and States and Tribes where applicable, is available on the EPA's website at https://www.epa.gov/superfund/statetribal-correspondence-concerning-npl-site-listing.

Yes, documents relating to the evaluation and scoring of the site in this final rule are contained in dockets located both at the EPA headquarters and in the EPA regional offices.

An electronic version of the public docket is available through https://www.regulations.gov (see table below for docket identification numbers). Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facilities identified in section II.D.

The headquarters docket for this rule contains the HRS score sheets, the documentation record describing the information used to compute the score, a list of documents referenced in the documentation record for each site and any other information used to support the NPL listing of the site. These documents are also available online at https://www.regulations.gov.

The EPA regional dockets contain all the information in the headquarters docket, plus the actual reference documents containing the data principally relied upon by the EPA in calculating or evaluating the HRS score. These reference documents are available only in the regional dockets.

You may view the documents that support this rule online at https://www.regulations.gov or by contacting the EPA HQ docket or appropriate regional docket. The hours of operation for the headquarters docket are from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding federal holidays. Please contact the individual regional dockets for hours. For addresses for the headquarters and regional dockets, see ADDRESSES section in the beginning portion of this preamble.

You may obtain a current list of NPL sites via the internet at https://www.epa.gov/superfund/national-priorities-list-npl-sites-site-name.

This final rule adds the following site to the General Superfund section of the NPL. This site is being added to the NPL based on HRS scores of 28.50 or above.

The EPA is adding one site to the National Priorities List (NPL) in this final rule. The Upper Columbia River site in Upper Columbia River, WA was proposed for addition to the NPL on March 7, 2024 (89 FR 16498). The public comment period on the proposed rule to add the Upper Columbia River site to the NPL closed on May 6, 2024. The EPA reviewed all public comments received on the site in this rule during the 60-day public comment period and responded to all comments pertaining to the contents of Docket EPA-HQ-OLEM-2024-0068.

The public comments received on the proposal of the Upper Columbia River site to the NPL are being addressed in a response to comment support document that is available in the public docket alongside this rule. To view the compilation of public comments received on the proposal of the Upper Columbia River site to the NPL, as well as EPA's response to these comments, please refer to the support document available at https://www.regulations.gov.

Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action does not impose an information collection burden under the PRA. This rule does not contain any information collection requirements that require approval of the OMB.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. This rule listing sites on the NPL does not impose any obligations on any group, including small entities. This rule also does not establish standards or requirements that any small entity must meet and imposes no direct costs on any small entity. Whether an entity, small or otherwise, is liable for response costs for a release of hazardous substances depends on whether that entity is liable under CERCLA 107(a). Any such liability exists regardless of whether the site is listed on the NPL through this rulemaking.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action imposes no enforceable duty on any State, local or Tribal governments or the private sector. Listing a site on the NPL does not itself impose any costs. Listing does not mean that the EPA necessarily will undertake remedial action. Nor does listing require any action by a private party, State, local or Tribal governments or determine liability for response costs. Costs that arise out of site responses result from future site-specific decisions regarding what actions to take, not directly from the act of placing a site on the NPL.

This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. Listing a site on the NPL does not impose any costs on a tribe or require a tribe to take remedial action. Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because this action itself is procedural in nature (adds sites to a list) and does not, in and of itself, provide protection from environmental health and safety risks. Separate future regulatory actions are required for mitigation of environmental health and safety risks.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

This rulemaking does not involve technical standards.

The EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations because it does not affect the level of protection provided to human health or the environment. As discussed in section I.C. of the preamble to this action, the NPL is a list of national priorities. The NPL is intended primarily to guide the EPA in determining which sites warrant further investigation to assess the nature and extent of public health and environmental risks associated with a release of hazardous substances, pollutants or contaminants. The NPL is of only limited significance as it does not assign liability to any party. Also, placing a site on the NPL does not mean that any remedial or removal action necessarily need be taken.

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

Provisions of the Congressional Review Act (CRA) or section 305 of CERCLA may alter the effective date of this regulation. Under 5 U.S.C. 801(b)(1), a rule shall not take effect, or continue in effect, if Congress enacts (and the President signs) a joint resolution of disapproval, described under section 802. Another statutory provision that may affect this rule is CERCLA section 305, which provides for a legislative veto of regulations promulgated under CERCLA. Although INS v. Chadha, 462 U.S. 919,103 S. Ct. 2764 (1983), and Bd. of Regents of the University of Washington v. EPA, 86 F.3d 1214,1222 (D.C. Cir. 1996), cast the validity of the legislative veto into question, the EPA has transmitted a copy of this regulation to the Secretary of the Senate and the Clerk of the House of Representatives.

If action by Congress under either the CRA or CERCLA section 305 calls the effective date of this regulation into question, the EPA will publish a document of clarification in the Federal Register .

For the reasons set out in the preamble, the Environmental Protection Agency amends title 40, chapter I, part 300, of the Code of Federal Regulations as follows:

You may be potentially affected by this action if you manufacture (including import) chemical substances and mixtures. The North American Industrial Classification System (NAICS) codes affected by this rule are those that align with these activities. This typically includes manufacturing and chemical processing sectors, as well as any related industries where these chemicals might be used or introduced into commerce, including those who fall within the following list of NAICS codes:

• Chemical manufacturing (NAICS code 325); and

• Petroleum refineries (NAICS code 324110).

This action applies to manufacturers in these NAICS codes who are currently manufacturing (including importing) a listed chemical substance (or will do so during the chemical's reporting period), or who have manufactured (including imported) or proposed to manufacture (including import) a listed chemical substance within the last 10 years.

This action may also affect manufacturers of substances for commercial purposes that coincidentally produce the substance during the manufacture, processing, use, or disposal of another substance or mixture, including byproducts and impurities. Such byproducts and impurities may, or may not, in themselves have commercial value. They are nonetheless produced for the purpose of obtaining a commercial advantage since they are part of the manufacture of a chemical product for a commercial purpose.

EPA is requiring manufacturers of chemical substances listed in this document to submit copies and lists of certain unpublished health and safety studies to EPA. EPA is taking final action on the proposed rule published on March 26, 2024 (89 FR 20918 (FRL-11164-01-OCSPP). This rulemaking is intended to provide EPA with useful information for prioritization, risk evaluations, and risk management activities under TSCA section 6 regarding the chemical substances identified in this final rule. This action lists the chemical substances and their Chemical Abstracts Service Registry Numbers (CASRNs) being added to 40 CFR 716. It also lists specific data reporting requirements.

EPA promulgated the Health and Safety Data Reporting Rule that is codified at 40 CFR part 716 under TSCA section 8(d) (15 U.S.C. 2607(d)). EPA is finalizing this rule under its authority in TSCA section 8(d) to require submission of health and safety studies, and lists of studies, regarding certain chemical substances.

EPA prepared an economic analysis for the addition of the 16 chemical substances to the TSCA section 8(d) Health and Safety Data Reporting rule (Ref. 1), which is available in the docket and summarized here. EPA estimates that the costs of this action will be approximately $5,884,568 in the first year of reporting and involve 70,630 burden hours (Ref. 1). In addition, EPA has determined that, of the 35 small businesses affected by this action, 2 are estimated to incur a maximum annualized cost impact of more than 1% of revenues. Thus, this action is not expected to have a significant adverse economic impact on a substantial number of small entities (Ref. 1).

EPA is amending the list at 40 CFR 716.120 to add 16 chemical substances. The list at 40 CFR 716.120 contains chemical substances for which the health and safety study data reporting is required. Additionally, the chemical specific reporting requirements will be incorporated into 40 CFR 716.21(a)(11). Any special exemptions are required for a specific chemical substance are identified in the table at 40 CFR 716.120 under special exemptions. Special exemptions are reporting requirements that are specific to a chemical substance and include specific language about specific studies and requirements. The chemical substances addressed in this final rule are as follows:

• 4,4-Methylene bis(2-chloraniline) (CASRN 101-14-4);

• 4-tert-octylphenol(4-(1,1,3,3-Tetramethylbutyl)-phenol) (CASRN 140-66-9);

• Acetaldehyde (CASRN 75-07-0);

• Acrylonitrile (CASRN 107-13-1);

• Benzenamine (CASRN 62-53-3);

• Benzene (CASRN 71-43-2);

• Bisphenol A (CASRN 80-05-7);

• Ethylbenzene (CASRN 100-41-4);

• Naphthalene (CASRN 91-20-3);

• Vinyl Chloride (CASRN 75-01-4);

• Styrene (CASRN 100-42-5);

• Tribromomethane (Bromoform) (CASRN 75-25-2);

• Triglycidyl isocyanurate; (CASRN 2451-62-9);

• Hydrogen fluoride (CASRN 7664-39-3);

• N-(1,3-Dimethylbutyl)-N′-phenyl-p-phenylenediamine (6PPD) (CASRN 793-24-8); and

• 2-anilino-5-[(4-methylpentan-2-yl) amino]cyclohexa-2,5-diene-1,4-dione (6PPD-quinone) (CASRN 2754428-18-5).

Listed in Unit II. are the reporting requirements for the 16 chemical substances identified in Unit II.A. Generally, the reporting described in Unit II.D. is required by March 13, 2025.

The specific types of health and safety studies are listed in Unit II.D. and include the following:

• Manufacturers who, in the 10 years preceding the date a chemical substance is listed, either have proposed to manufacture or have manufactured any of the listed chemical substances must submit to EPA, during the 60-day reporting period specified in 40 CFR 716.65 and according to the reporting schedule set forth at 40 CFR 716.60, a copy of each specified type of health and safety study which is in their possession at the time the chemical substance is listed in part 716.

• Manufacturers who, either at the time of or after the chemical substance is listed in 40 CFR 716, propose to manufacture or are manufacturing the listed chemical substance must submit to EPA during the 60-day reporting period specified in 40 CFR 716.65 and according to the reporting schedule set forth at 40 CFR 716.60:

•A copy of each specified type of health and safety study which is in their possession at the time the chemical substance is listed;

• A list of the specified types of health and safety studies known to them but not in their possession at the time the chemical substance is listed;

• A list of the specified types of health and safety studies that are ongoing at the time the chemical substance is listed and are being conducted by or for them;

• A list of the specified types of health and safety studies that are initiated after the date the chemical substance is listed and will be conducted by or for them; and

• A copy of each specified type of health and safety study that was previously listed as ongoing or subsequently initiated ( i.e., listed in accordance with reporting requirements in Unit II.D., respectively) and is now complete regardless of completion date.

• For this rulemaking, EPA is requiring submission of information only on those studies in which the listed chemical is specifically identified in the studies.

Any person who manufactures (including imports) or who proposes to manufacture the listed chemical substance from January 13, 2025 to March 13, 2025 must:

(1) Inform EPA (by submitting a list) of any studies initiated during the period from January 13, 2025 to March 13, 2025 within 30 days of their initiation, but in no case later than April 14, 2025; and

(2) For those who submitted lists of studies that were ongoing or initiated during the period from January 13, 2025 to March 13, 2025, such persons must submit a copy of each study within 30 days after its completion, regardless of the study's completion date. See 40 CFR 716.60 and 716.65.

Requirements for reporting unpublished health and safety data is provided at 40 CFR part 716, and with explanations of reporting exemptions detailed in 40 CFR 716.20. As explained in the proposed rule (89 FR 20918 March 26, 2024 (FRL-11164-01-OCSPP)), EPA did not include the exemption listed at 40 CFR 716.20(a)(9), which allows for the inclusion of an exemption for persons manufacturing a substance only as an impurity. A person manufacturing or proposing to manufacture a substance listed in this rule must report on the substance where it was only manufactured (or is being proposed for manufacturing) as an impurity. An impurity is defined at 40 CFR 716.3 as a chemical substance that is unintentionally present with another chemical substance. Additionally, pursuant to the procedure at 40 CFR 716.20(b)(5) that requires EPA to identify the chemical grade/purity, EPA is requiring reporting on any chemical grade/purity level of the chemical.

EPA is requiring submissions of health and safety studies from companies manufacturing the identified chemical substances, including when a company is importing the chemical substance as a pure substance, or within a mixture, formulated product, or article that contains the subject chemical substance. This includes instances where the chemical substance is manufactured only as an impurity. EPA considers conditions of use, as discussed in further detail in Unit II. F., associated with circumstances where a chemical substance subject to a risk evaluation even where the chemical substance is an impurity. To such ends, health and safety information associated with the conditions of use, whether as a pure chemical, part of a mixture or article, or as an impurity helps inform such risk evaluation (see e.g., 89 FR 37028, 37033 (“[EPA must include consideration of] known circumstances associated with the chemical ( e.g., [. . .] de minimis amounts such as an impurity or within an article, etc.)”)). For this rulemaking, EPA is requiring submission of information only on those studies in which the listed chemical is specifically identified in the studies.

Accordingly, the chemicals included in this final rule are of particular interest to EPA because they are either in the process of prioritization as candidates for high-priority designation or are expected to be candidates in the upcoming years. For those found to be of high-priority designation, EPA is required to initiate a risk evaluation under TSCA section 6(b). Collecting health and safety studies on the chemicals included in this final rule will assist EPA in selecting chemicals to designate as high-priority chemicals, as well as in conducting the risk evaluation on such chemicals.

Pursuant to 40 CFR 716.10 and 716.50, manufacturers are required to submit the following types of information:

• Lists and copies of unpublished health and safety studies for all substances specified in this rule on health effects, such as toxicity studies ( e.g., in vivo, in vitro) on carcinogenicity, reproductive and developmental effects, genotoxicity, neurotoxicity, immunotoxicity, endocrine effects, and other systemic toxicity and toxicokinetic (absorption, distribution, metabolism, or elimination), including modeling studies, in humans or animals.

• All unpublished studies on environmental effects and physical-chemical properties if performed as described in 40 CFR 716.50.

• All unpublished studies on occupational, general population, consumer, bystander, and environmental exposure, such as: unpublished studies on inhalation and dermal exposure, human biomonitoring, environmental monitoring of indoor and outdoor air, soil, water, and household dust, chamber emission rates from products or polymeric matrices, and unpublished modeling studies that estimate environmental concentrations or human exposures.

• Studies showing any measurable content of the listed substance (single substance or mixture). The composition and purity of test substances must be reported if included as part of the study.

• Surveys, tests, and studies of biological, photochemical, and chemical degradation. Chemical identities are part of the submitted health and safety studies or data and must be submitted to EPA. Information from health and safety studies and/or data relating to chemical substances offered for commercial distribution or subject to reporting under TSCA Section 4 or 5 is not protected from disclosure, with limited exceptions as stated in 15 U.S.C. 2613(2)(B).

The following types of information are not included in this action and need not be submitted to EPA:

• Studies previously submitted to EPA pursuant to a requirement under TSCA or of the submitter's own accord and studies conducted or to be conducted pursuant to a TSCA section 4 action are exempt from the submission of lists of health and safety studies required under 40 CFR 716.35 and the submission of studies required under this rule.

• Certain types of studies when the subject of the study is a mixture known to contain a listed substance. These studies include acute oral toxicity; acute dermal toxicity; acute inhalation toxicity; primary eye irritation; primary dermal irritation; dermal sensitization; and physical-chemical properties.

• Analyzed aggregations of monitoring data when either based on monitoring data acquired over five years prior to the date of this rule, or when the data are not analyzed to determine the exposure or concentration levels of the listed chemical.

All submitters must report TSCA section 8(d) data electronically using the Chemical Safety and Pesticide Programs (CSPP) Software, which is accessible via EPA's Central Data Exchange (CDX) system available at https://cdx.epa.gov/. The CSPP Software provides a TSCA 8(d) Health and Safety Data Reporting application that a registered CDX user will access to submit TSCA section 8(d) records. Information on how to submit TSCA section 8(d) data is available in the docket (EPA-HQ-OPPT-2023-0360) and via EPA's TSCA section 8(d) web page at https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/section-8d-health-safety-data-reporting-user-guide-0. Submitters may also contact EPA's TSCA Hotline at tsca-hotline@epa.gov or 202-554-1404. For help with accessing your CDX account, please contact the CDX help desk at https://cdx.epa.gov/contact or (888) 890-1995 (for international callers: (970) 494-5500).

1. Submitting CBI. Any person submitting copies of records may assert a business confidentiality claim covering all or part of the submitted information in accordance with the procedures described in 40 CFR part 703, and using the CSPP Software. Requirements for asserting and maintaining confidentiality claims are described in 40 CFR 703.5. Such claims must be made concurrent with submission of the information. If no claim accompanies the submission, EPA will not recognize a confidentiality claim, and the information in that submission may be made available to the public without further notice. Confidentiality claims must be substantiated at the time of submission to EPA pursuant to the requirements of 40 CFR 703.5(b). To assert a claim of confidentiality for information contained in a submitted record, the respondent must submit two copies of the document. One copy must be complete, and, on each page containing information claimed as confidential, the respondent must indicate what information, if any, is claimed as confidential by marking the specific information on that page with a label such as “confidential”, “proprietary”, or “CBI.” The other copy must be a public version of the submission and attachments, with all information that is claimed as confidential removed (40 CFR 703.5(c)). Both the copy containing information claimed as CBI and the “sanitized” copy must be submitted electronically. The TSCA section 8(d) Health and Safety Data Reporting application incorporates many of the requirements for asserting CBI claims, including substantiation questions, a required certification statement, and prompts to provide a sanitized copy. Further details regarding the requirements for confidentiality claims can be found in 40 CFR part 703.

2. Submitting OECD harmonized templates. Additionally, EPA is requiring all existing information concerning health and environmental effects and that have CBI claims as described in Unit II.E.1. to be submitted in the format of Organization of Economic Cooperation and Development's (OECD) harmonized templates (OHTs), where such templates exist for the type of data pursuant to 40 CFR 703. OECD templates are accessible to the public online at https://oecd.org/ehs/templates/harmonised-templates.htm. This can be accomplished by using the freely available IUCLID6 software by exporting the dossier in the OECD Harmonized Template working context. EPA can accept any dossiers generated using any version of IUCLID6 available at https://www.epa.gov/tsca-cbi/final-rule-requirements-confidential-business-information-claims-under-tsca#Implementation. EPA believes that some of the data will already be available as an OECD template if the company had already submitted the studies under the European Union's Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation. In addition to the required template format, those subject to this rulemaking must submit any associated full study reports or underlying data as support documents. The full study reports and support documents are necessary for EPA to understand the full context and evaluate the quality of the data, which is necessary for the Agency to review to determine whether such data may be used for any future Agency actions. If an OHT is not available for a particular endpoint for which the manufacturer has relevant information, then the manufacturer must still submit the study under 40 CFR 716.

This rule does not require the submission of OHTs for health and safety studies that do not have CBI claims. As explained in the Response to Comments document (Ref. 2), 40 CFR 703.5(g) already requires that studies containing CBI claims be submitted using OHTs. However, EPA is declining to extend this requirement to those studies without CBI claims. Forgoing an OHT requirement for non-CBI claims alleviates some of the overall submission burden. However, EPA welcomes any OHTs for those non-CBI studies, especially if they have already been prepared pursuant to other authorities ( e.g., REACH). EPA also advises manufacturers that it reserves the authority to promulgate OHT requirements for non-CBI health and safety studies in future rulemakings and anticipates doing so.

EPA's assessment of chemical substances under TSCA section 6 involves a three-stage process: (1) Prioritization; (2) Risk evaluation; and, as applicable, (3) Risk management. Prioritization and risk evaluation are carried out in accordance with procedural regulations at 40 CFR part 702, subparts A and B, respectively.

During prioritization, EPA identifies chemical substances that are candidates for prioritization and then uses reasonably available information to screen each candidate chemical substance against certain criteria and considerations specified in TSCA section 6(b)(1)(A):

• Hazard and exposure potential of the chemical substance;

• Persistence and bioaccumulation of the chemical substance;

• Potentially exposed or susceptible subpopulations;

• Storage near significant sources of drinking water;

• Conditions of use or significant changes in the conditions of use of the chemical substance. Conditions of use is defined under TSCA section 3(4) to mean “the circumstances, as determined by the Administrator, under which a chemical substance is intended, known, or reasonably foreseen to be manufactured, processed, distributed in commerce, used or disposed of.”;

• Volume or significant changes in the volume of the chemical substance manufactured or processed; and

• Other risk-based criteria that EPA determines to be relevant to the designation of the chemical substance's priority.

EPA identified 15 chemical substances that are the subject of this rule as potential candidates for prioritization based on a screening process that is based on a combination of hazard, exposure (including uses), and persistence and bioaccumulation characteristics. To support the prioritization process as well as to inform its risk evaluation findings on any of these substances that EPA might designate as a high-priority substance, EPA is seeking unpublished health and safety studies on these chemical substances to ensure that such studies are available to EPA to inform any activities undertaken pursuant to TSCA section 6.

EPA is also including the 6PPD transformation product, 2-anilino-5-[(4-methylpentan-2-yl) amino]cyclohexa-2,5-diene-1,4-dione (6PPD-quinone) (CASRN: 2754428-18-5) in response to a citizen's petition filed under TSCA section 21 regarding 6PPD and 6PPD-quinone. Cited in the petition are the potential impacts of 6PPD-quinone to aquatic organisms and on population levels for some fish, such as the coho salmon. The Agency is including this chemical in this request for unpublished health and safety studies to address data needs and to better understand and characterize potential risks associated with this chemical. For details on 6PPD and 6PPD-quinone and EPA's current key actions to address this chemical, please visit, https://www.epa.gov/chemical-research/6ppd-quinone.

Information received pursuant to this rulemaking will help inform other EPA activities involving these chemical substances. Additionally, non-CBI collected pursuant to this final rule will be made public via ChemView ( https://chemview.epa.gov/chemview/ ), the EPA online system that contains information EPA receives and develops about chemicals regulated under TSCA. ChemView is part of EPA's commitment to strengthen its chemicals management programs by improving access to and the usefulness of chemical information. The goal is for people to easily get information they need to make safe chemical choices and to help businesses, individuals and others make more informed decisions about the chemicals they use.

Benefits of this final rule include addressing market failure stemming from incomplete or imperfect information regarding the hazards associated with the listed chemicals. This final rule addresses market failure by making information about the health and safety effects of the listed chemicals available to EPA. By making this information available, EPA will be able to base decisions on actual data rather than relying on assumptions. Additionally, the information provided by this rule can aid in addressing negative externalities that occur when the costs associated with known hazards are external to manufacturers' decision-making and may result in overuse and/or overproduction of certain harmful products.

EPA received 35 unique public comments during the public comment period for the proposed rule (89 FR 20918, March 26, 2024 (FRL-11164-01-OCSPP)). Comments were submitted by citizens, industry groups and companies, non-governmental organizations, and a state agency. The public comments revealed varied perspectives across different types of commenters.

Industry stakeholders were generally supportive of the need for comprehensive chemical data under TSCA section 6. Some industry commenters, however, expressed concerns about the utility of studies involving low concentrations of chemicals or cases in which the chemical is not the test substance ( e.g., included in the study as an impurity of the test substance or test mixture). Many such commenters were not supportive of EPA lifting the impurity exemption and/or requiring the submission of studies with the listed chemical substance at any concentration or purity. Several industry commenters also discussed the proposed OHTs requirement, with different points of view. While some supported the use of templated and standardized submissions, others expressed concerns about the administrative and financial burdens of compliance, particularly with reporting on impurities. Some industry stakeholders suggested extending the reporting deadlines from 90 to 180 days to allow more time for compliance. Finally, many comments from companies or trade groups discussed EPA's draft burden analysis, with many claiming that EPA had underestimated the time and cost related to preparing and submitting OHTs.

Environmental groups and NGOs strongly supported the rule as proposed, including the requirement to submit studies with the chemical substances even when present as impurities. These commenters also highlighted the importance of gathering data on 6PPD and its degradant, 6PPD-quinone, and urged EPA to finalize this rule quickly.

EPA considered all comments and information in the development of this final rule. A comprehensive response to comments document can be found in the docket (Ref. 2).

The following is a listing of the documents that are specifically referenced in this document. The docket includes these documents and other information considered by EPA. For more information about these references, please consult the technical person listed under FOR FURTHER INFORMATION CONTACT .

Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action under Executive Order 12866 (58 FR 51735, October 4, 1993), as amended by Executive Order 14094 (88 FR 21879, April 11, 2023), and was therefore not subject to Executive Order 12866 review.

As required by the PRA, 44 U.S.C. 3501 et seq., the information collection activities associated with TSCA section 8(d) reporting are approved by OMB under OMB Control No. 2070-0224. The Information Collection Request (ICR) document that EPA prepared has been assigned EPA ICR No. 2703.01 (Ref. 3). A copy of the approved ICR is in the docket for this rule, and is briefly summarized here.

This action requires the reporting of unpublished health and safety studies to EPA by manufacturers of certain chemical substances that are being added to the Health and Safety Data Reporting Rule in 40 CFR part 716. EPA intends to use the information collected to assist in assessing the chemical substances under TSCA, and to inform any additional work necessary under environmental protection mandates beyond TSCA. Submitters may designate information as confidential, trade secret, or proprietary. EPA has implemented procedures to protect any confidential, trade secret or proprietary information from disclosure. These procedures comply with TSCA section 14 and EPA's confidentiality regulations, 40 CFR part 2, subpart B.

Respondents/affected entities: Manufacturers (including importers) of the 16 chemical substances identified in the rulemaking, see also Unit I.A. and the ICR.

Respondent's obligation to respond: Mandatory, TSCA section 8(d) (15 U.S.C. 2607(d)), and implementing regulations in 40 CFR part 716.

Estimated number of respondents: 160.

Frequency of response: One-time.

Total estimated burden: 23,962 hours (per year). Burden is defined at 5 CFR 1320.3(b).

Total estimated cost: $2,011,604 (per year), with no annualized capital or operation & maintenance costs. (Ref. 1)

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA, 5 U.S.C. 601 et seq. The small entities subject to the requirements of this action are manufacturers of 16 chemicals to be added to the Health and Safety Data Reporting Rule. The Agency has determined that 35 out of 160 of the firms in the affected universe are small entities. Of those small firms, 2 may experience an impact of above 1% and 1 may have impacts above 3%. Details of this analysis are presented in Chapter 6 of the Economic Analysis for this rule (Ref. 1), which can be found in the docket.

This action does not contain an unfunded mandate of $100 million (adjusted annually for inflation) or more (in 1995 dollars) as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The costs involved in this action are estimated not to exceed $183 million in 2023$ ($100 million in 1995$ adjusted for inflation using the GDP implicit price deflator) or more in any one year.

This action does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000) because it will not have substantial direct effects on tribal governments, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. This rule affects entities who manufacture (including import) chemical substances for commercial purposes. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to regulatory actions considered significant under section 3(f)(1) of Executive Order 12866 and that concern environmental health or safety risks that EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of Executive Order 13045.

Since this is not a “covered regulatory action,” E.O. 13045 does not apply. However, the Policy on Children's Health does apply. Although this action does not directly concern an environmental health or safety risk to children, the information obtained from the reporting required by this rule will be used to inform the Agency's decision-making process regarding chemical substances to which children may be exposed. This information will also assist the Agency and others in determining whether the chemical substances included in this rule present potential risks, allowing the Agency and others to take appropriate action to investigate and mitigate those risks.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not a significant regulatory action under Executive Order 12866.

This rulemaking does not involve technical standards under the NTTAA section 12(d), 15 U.S.C. 272.

The EPA believes that this type of action does not concern human health or environmental conditions and therefore cannot be evaluated with respect to potentially disproportionate and adverse effects on communities with environmental justice concerns. Although this action does not directly impact human health or environmental conditions, EPA identifies and addresses environmental justice concerns in accordance with Executive Orders 12898 (59 FR 7629, February 16, 1994) and 14096 (88 FR 25251, April 26, 2023) by requiring reporting of unpublished health and safety data. This regulatory action requires the submission of unpublished health and safety data for 16 chemical substances that will result in more information being available for EPA's use under TSCA section 6, thereby enabling the Agency to better protect human health and the environment, including in low-income and minority communities.

This action is subject to the CRA, 5 U.S.C. 801 et seq., and EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” under 5 U.S.C. 804(2).

Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR chapter I as follows:

We published a proposed rule titled “Administrative Simplification: Modifications of Health Insurance Portability and Accountability Act of 1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) Retail Pharmacy Standards; and Adoption of Pharmacy Subrogation Standard” (hereafter referred to as the November 2022 proposed rule) that appeared in the November 9, 2022, Federal Register (87 FR 67634). In that rule, we proposed to adopt modifications to the retail pharmacy and Medicaid subrogation standards. This final rule adopts modifications to standards for electronic retail pharmacy transactions and the Medicaid pharmacy subrogation transaction adopted under the Administrative Simplification subtitle of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The modified standards adopted in this rule will benefit the health care industry by offering more robust data exchange and workflow automation, enhanced patient safety, improved coordination of benefits, and expanded financial fields, so that entities may not have to manually enter free text, split claims, or prepare and submit a paper Universal Claim Form. The current retail pharmacy standards adopted in 2009 remain unchanged. In 2018, the National Committee on Vital and Health Statistics (NCVHS) recommended that HHS adopt more recent standards to address evolving industry business needs. Consistent with the NCVHS recommendations and collaborative industry and stakeholder input, we believe the updated retail pharmacy standards we are adopting are sufficiently mature for adoption and that covered entities are ready to implement them.

Through subtitle F of title II of HIPAA, Congress added to title XI of the Social Security Act (the Act) a new Part C, titled “Administrative Simplification,” which requires the Secretary of the Department of Health and Human Services (the Secretary) to adopt standards for certain transactions to enable health information to be exchanged more efficiently and to achieve greater uniformity in the transmission of health information. More specifically, section 1174 of the Act requires the Secretary to review the adopted standards and adopt modifications to them, including additions to the standards, as appropriate, but not more frequently than once every 12 months, unless the Secretary determines that the modification is necessary in order to permit compliance with the standard, thus providing the legal authority for this regulatory action.

The provisions in this final rule adopt the following modifications: the NCPDP Telecommunication Standard Implementation Guide, Version F6 (Version F6) and equivalent NCPDP Batch Standard Implementation Guide, Version 15 (Version 15) and NCPDP Batch Standard Subrogation Implementation Guide, Version 10 (Version 10). These updated standards will replace the currently adopted NCPDP Telecommunication Standard Implementation Guide, Version D, Release 0 (Version D.0) and the equivalent NCPDP Batch Standard Implementation Guide, Version 1, Release 2 (Version 1.2), and NCPDP Batch Standard Medicaid Subrogation Implementation Guide, Version 3, Release 0 (Version 3.0).

Version 3.0 was adopted to support Federal and State requirements for State Medicaid agencies to seek reimbursement from the health plan responsible for paying the pharmacy claim after the State Medicaid agency has paid the claim on behalf of the Medicaid recipient.

In the November 2022 proposed rule, we proposed to broaden the scope of the subrogation transaction to apply not only to State Medicaid agencies but to all health plans, such as Medicare Part D, State assistance programs, and commercial health plans, attempting to recover reimbursement from the responsible payer, and to rename the transaction the Pharmacy subrogation transaction. At §  162.1902(b), we proposed to adopt Version 10 to replace Version 3.0 as the standard for the subrogation transaction. This would have been a modification for State Medicaid agencies, and for non-Medicaid health plans this would have been the adoption of an initial standard.

However, compelling comments to the November 2022 proposed rule persuaded us to adopt Version 10 solely for State Medicaid agencies. While we are not adopting Version 10 for non-Medicaid health plans in this final rule, they are permitted to use the standard

The policies adopted in this final rule are effective 60 days after publication of the final rule in the Federal Register .

In the November 2022, proposed rule, we proposed that all covered entities would need to comply with Version F6, Version 15, and Version 10 beginning 24 months after the effective date of the final rule. For Version F6 and Version 15, we are adopting a later compliance date than we had proposed, and are including an 8-month transition period:

• Starting August 11, 2027, all covered entities, as agreed to by trading partners, may use either Version D.0 and Version 1.2 or Version F6 and Version 15 for 8 months as a transition period prior to full compliance, which begins 36 months after the effective date of the final rule.

• All covered entities must be in compliance with Version F6 and Version 15 beginning February 11, 2028.

As noted previously and discussed in section III. of this final rule, we are adopting Version 10 to apply solely to State Medicaid agencies. This final rule adopts a compliance date for State Medicaid agencies to comply with Version 10 that aligns with the compliance date for Version F6 and Version 15:

• Starting August 11, 2027, State Medicaid agencies, as agreed to by trading partners, may use Version 3.0 or Version 10 for 8 months as a transition period prior to full compliance, which begins 36 months after the effective date of the final rule.

• State Medicaid agencies must be in compliance with Version 10 beginning February 11, 2028.

The overall cost for affected HIPAA covered entities—independent and non-independent pharmacies, pharmacy benefit plans, and State Medicaid agencies—to move to the updated versions of the retail pharmacy transaction standards and the Medicaid pharmacy subrogation transaction standard will be approximately $386.3 million. The cost is based on the need for such entities to engage in technical development, implementation, testing, and initial training to be prepared to meet a compliance date beginning February 11, 2028. As discussed in the November 2022, proposed rule, we believe that HIPAA covered entities, or their contracted vendors, have already largely invested in the hardware, software, and connectivity necessary to conduct the transactions with the updated versions of the retail pharmacy standards and the Medicaid pharmacy subrogation standard.

This final rule adopts updated versions of currently adopted standards for numerous provisions under aspects of the Administrative Simplification subtitle of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Subtitle F of Title II of HIPAA added a new Part C to Title XI of the Social Security Act (sections 1171 through 1179 of the Act, 42 U.S.C. 1320d through 1320d-8). These updated versions are modifications to the currently adopted standards for the following retail pharmacy transactions: health care claims or equivalent encounter information; eligibility for a health plan; referral certification and authorization; and coordination of benefits. This final rule also adopts a modification to the standard for the Medicaid pharmacy subrogation transaction. The provisions adopted would be distinct provisions. We believe these distinct processes may function independently of each other. To the extent a court may enjoin any part of a final rule, the Department of Health and Human Services (HHS) intends that other provisions or parts of provisions should remain in effect, ensuring the continuity of the regulations. We intend that any provision of the requirements described in this section or in another section held to be invalid or unenforceable by its terms or as applied to any person or circumstance would be construed so as to continue to give maximum effect to the provision permitted by law unless such holding is one of utter invalidity or unenforceability, in which event we intend that the provision would be severable from the other finalized provisions described in this section and in other sections and would not affect the remainder thereof or the application of the provision to persons not similarly situated or to dissimilar circumstances.

This background discussion presents a history of statutory and regulatory provisions that are relevant for the purposes of this final rule.

Congress addressed the need for a consistent framework for electronic transactions and other administrative simplification issues in HIPAA (Pub. L. 104-191, enacted on August 21, 1996). Through subtitle F of title II of HIPAA, Congress added to title XI of the Act a new Part C, titled “Administrative Simplification,” which required the Secretary of the Department of Health and Human Services (the Secretary) to adopt standards for certain transactions to enable health information to be exchanged more efficiently and to achieve greater uniformity in the transmission of health information. For purposes of this and later discussion in this final rule, we sometimes refer to this statute as the “original” HIPAA.

Section 1172(a) of the Act states that “[a]ny standard adopted under [HIPAA] shall apply, in whole or in part, to . . . (1) A health plan. (2) A health care clearinghouse. (3) A health care provider who transmits any health information in electronic form in connection with a [HIPAA transaction],” which are collectively referred to as “covered entities.” Generally, section 1172 of the Act requires any standard adopted under HIPAA to be developed, adopted, or modified by a standard setting organization (SSO). In adopting a standard, the Secretary must rely upon recommendations of the NCVHS, in consultation with the organizations referred to in section 1172(c)(3)(B) of the Act, and appropriate Federal and State agencies and private organizations.

Section 1172(b) of the Act requires that a standard adopted under HIPAA be consistent with the objective of reducing the administrative costs of providing and paying for health care. The transaction standards adopted under HIPAA enable financial and administrative electronic data interchange (EDI) using a common structure, as opposed to the many varied, often proprietary, transaction formats on which industry had previously relied and that, due to lack of uniformity, engendered administrative burden.

Section 1173(g)(1) of the Act, which was added by section 1104(b) of the Patient Protection and Affordable Care Act (Affordable Care Act), Pub. L. 111-148), further addresses the goal of uniformity by requiring the Secretary to adopt a single set of operating rules for each HIPAA transaction. Section 1171(9) of the Act defines operating rules as “the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications.” Section 1173(g)(1) of the Act requires operating rules to be consensus-based and reflect the necessary business rules that affect health plans and health care providers and the manner in which they operate in accordance with HIPAA standards.

Section 1173(a) of the Act requires that the Secretary adopt standards for financial and administrative transactions, and data elements for those transactions, to enable health information to be exchanged electronically. The original HIPAA provisions require the Secretary to adopt standards for the following transactions: health claims or equivalent encounter information; health claims attachments; enrollment and disenrollment in a health plan; eligibility for a health plan; health care payment and remittance advice; health plan premium payments; first report of injury; health claim status; and referral certification and authorization. The Affordable Care Act additionally required the Secretary to adopt standards for electronic funds transfers transactions. Section 1173(a)(1)(B) of the Act requires the Secretary to adopt standards for any other financial and administrative transactions the Secretary determines appropriate. Section 1173(a)(4) of the Act requires that the standards and operating rules, to the extent feasible and appropriate: enable determination of an individual's eligibility and financial responsibility for specific services prior to or at the point of care; be comprehensive, requiring minimal augmentation by paper or other communications; provide for timely acknowledgment, response, and status reporting that supports a transparent claims and denial management process; describe all data elements in unambiguous terms, require that such data elements be required or conditioned upon set terms in other fields, and generally prohibit additional conditions; and reduce clerical burden on patients and providers.

Section 1174 of the Act requires the Secretary to review the adopted standards and adopt modifications to them, including additions to the standards, as appropriate, but not more frequently than once every 12 months, unless the Secretary determines that the modification is necessary in order to permit compliance with the standard.

Section 1175(a)(1)(A) of the Act prohibits health plans from refusing to conduct a transaction as a standard transaction. Section 1175(a)(1)(B) of the Act also prohibits health plans from delaying the transaction or adversely affecting or attempting to adversely affect a person or the transaction itself on the grounds that the transaction is in standard format. Section 1175(b) of the Act provides for a compliance date not later than 24 months after the date on which an initial standard or implementation specification is adopted for all covered entities except small health plans, which must comply not later than 36 months after such adoption. If the Secretary adopts a modification to a HIPAA standard or implementation specification, the compliance date for the modification may not be earlier than 180 days following the date of the adoption of the modification. The Secretary must consider the time needed to comply due to the nature and extent of the modification when determining compliance dates and may extend the time for compliance for small health plans if he deems it appropriate.

Sections 1176 and 1177 of the Act establish civil money penalties (CMPs) and criminal penalties to which covered entities may be subject for violations of HIPAA Administrative Simplification provisions. HHS administers the CMPs under section 1176 of the Act and the U.S. Department of Justice administers the criminal penalties under section 1177 of the Act. Section 1176(b) of the Act sets out limitations on the Secretary's authority and provides the Secretary certain discretion with respect to imposing CMPs. This section provides that no CMPs may be imposed with respect to an act if a penalty has been imposed under section 1177 of the Act with respect to such act. This section also generally precludes the Secretary from imposing a CMP for a violation corrected during the 30-day period beginning when an individual knew or, by exercising reasonable diligence would have known, that the failure to comply occurred.

We published a final rule entitled “Health Insurance Reform: Standards for Electronic Transactions” that appeared in the August 17, 2000, Federal Register (65 FR 50312) (hereinafter referred to as the Transactions and Code Sets final rule). That rule implemented some of the HIPAA Administrative Simplification requirements by adopting standards for electronic health care transactions developed by SSOs, and medical code sets to be used in those transactions. We adopted X12 Version 4010 standards for administrative transactions, and the National Council for Prescription Drug Programs (NCPDP) Telecommunication Standard Version 5.1 for retail pharmacy transactions at 45 CFR part 162, subparts K through R.

Since initially adopting the HIPAA standards in the Transactions and Code Sets final rule, we have adopted a number of modifications to them. The most extensive modifications were adopted in a final rule titled “Health Insurance Reform; Modifications to the Health Insurance Portability and Accountability Act (HIPAA) Electronic Transaction Standards” that appeared in the January 16, 2009, Federal Register (74 FR 3296) (hereinafter referred to as the 2009 Modifications final rule). Among other things, that rule adopted updated X12 and NCPDP standards, moving from X12 Version 4010 to X12 Version 5010, and Telecommunication Standard Version 5.1 and equivalent Batch Standard Implementation Guide Version 1, Release 1, to Telecommunication Standard Version D.0 and Version 1.2. In that rule, we also adopted Version 3.0 for the Medicaid pharmacy subrogation transaction. Covered entities were required to comply with these standards beginning on and after January 1, 2012, with the exception of small health plans, which were required to comply on and after January 1, 2013.

In the Transactions and Code Sets final rule, we defined the terms “modification” and “maintenance.” We explained that when a change is substantial enough to justify publication of a new version of an implementation specification, such change is considered a modification and must be adopted by the Secretary through regulation (65 FR 50322). Conversely, maintenance describes the activities necessary to support the use of a standard, including technical corrections to an implementation specification (65 FR 50322). Maintenance changes are typically corrections that are obvious to readers of the implementation guides, not controversial, and essential to implementation as such, in the February 20, 2003 final rule (68 FR 8334) titled, “Health Insurance Reform: Security Standards”.

Maintenance changes to Telecommunication Standard Version D.0 were identified by the industry, balloted and approved through the NCPDP, and are contained in a document titled “Telecommunication Version D and Above Questions, Answers and Editorial Updates,” that can be accessed free of charge from the NCPDP website's HIPAA Information Section, at https://member.ncpdp.org/Member/media/pdf/VersionDQuestions.pdf. In an October 13, 2010, Federal Register notice titled “Health Insurance Reform; Announcement of Maintenance Changes to Electronic Data Transaction Standards Adopted Under the Health Insurance Portability and Accountability Act of 1996” (75 FR 62684), the Secretary announced the maintenance changes and the availability of the Telecommunication Standard Version D.0 Editorial and how it then could be obtained. The document is a consolidated reference for questions that have been posed based on the review and implementation of Version D.0.

In a final rule titled “Administrative Simplification: Modification of the Requirements for the Use of Health Insurance Portability and Accountability Act of 1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) D.0 Standard,” that appeared in the January 24, 2020 Federal Register (85 FR 4236) (hereafter referred to as the Modification of Version D.0 Requirements final rule), the Secretary adopted a modification of the requirements for the use of the Quantity Prescribed (460-ET) field Version D.0. The modification required covered entities to treat the Quantity Prescribed (460-ET) field as required where a transmission uses Version D.0 for a Schedule II drug for the following transactions: (1) health care claims or equivalent encounter information; (2) referral certification and authorization; and (3) coordination of benefits.

In that rulemaking, the Secretary noted that the NCPDP had published an updated telecommunication standard implementation guide, the October 2017 Telecommunication Standard Implementation Guide, Version F2 (Version F2), that, among other changes, revised the situational use of a not used field to specify an even broader use of the Quantity Prescribed (460-ET) field. The change described the Quantity Prescribed (460-ET) field as “required only if the claim is for a controlled substance or for other products as required by law; otherwise, not available for use.” We explained that we chose not to adopt Version F2 at that time because, given the public health emergency caused by the opioid crisis and the urgent need to find ways to yield data and information to help combat it, we believed it was more appropriate to take a narrow, targeted approach while taking additional time to evaluate the impact of a new version on covered entities.

The law generally requires at section 1172(c) of the Act that any standard adopted under HIPAA be developed, adopted, or modified by an SSO. Section 1171 of the Act defines an SSO as an SSO accredited by the American National Standards Institute (ANSI), and specifically mentions the NCPDP (the SSO associated with this final rule), that develops standards for information transactions, data, or any standard that is necessary to, or will facilitate the implementation of, Administrative Simplification. Information about the NCPDP's balloting process, the process by which it vets and approves the standards it develops and any changes thereto, is available on its website, http://www.ncpdp.org.

In the Transactions and Code Sets final rule, the Secretary adopted procedures to maintain and modify existing, and adopt new, HIPAA standards and established a new organization type called the “Designated Standard Maintenance Organization” (DSMO). Regulations at 45 CFR 162.910 provide that the Secretary may designate as a DSMO an organization that agrees to conduct, to the satisfaction of the Secretary, the functions of maintaining the adopted standard, and receiving and processing requests for adopting a new standard or modifying an adopted standard. In a notice titled “Health Insurance Reform: Announcement of Designated Standard Maintenance Organizations” (65 FR 50373), which appeared in the August 17, 2000 Federal Register concurrently with the Transactions and Code sets final rule, the Secretary designated the following six DSMOs: X12, NCPDP, Health Level Seven, the National Uniform Billing Committee (NUBC), the National Uniform Claim Committee (NUCC), and the Dental Content Committee (DCC) of the American Dental Association.

As noted previously, in general, HIPAA requires the Secretary to adopt standards that have been developed by an SSO. The process for adopting a new standard or a modification to an existing standard is described in the Transactions and Code Sets final rule (65 FR 50344) and implemented at § 162.910. Under § 162.910, the Secretary considers recommendations for proposed modifications to existing standards, or a proposed new standard, if the recommendations are developed through a process that provides for: open public access; coordination with other DSMOs; an appeals process for the requestor of the proposal or the DSMO that participated in the review and analysis if either of the preceding were dissatisfied with the decision on the request; an expedited process to address HIPAA content needs identified within the industry; and submission of the recommendation to the NCVHS.

Any entity may submit change requests with a documented business case to support its recommendation to the DSMO. The DSMO receives and manages those change requests, including reviewing them and notifying the SSO of its recommendation for approval or rejection. If the changes are recommended for approval, the DSMO also notifies the NCVHS and suggests that a recommendation for adoption be made to the Secretary.

The foregoing processes were followed with respect to the standards modifications finalized in this rule, which stemmed from the following change requests the NCPDP submitted to NCVHS: (1) DSMO request 1201 that requested replacing Version D.0 and Version 1.2 with the Version F2 and Version 15; (2) DSMO request 1202 that requested replacing Version 3.0 with Version 10 to be used by Medicaid plans only; and (3) DSMO request 1208 that updated DSMO request 1201, and requested adopting Version F6, instead of Version F2.

The NCVHS, which was established by statute in 1949, serves as an advisory committee to the Secretary and is statutorily conferred a significant role in the Secretary's adoption and modification of HIPAA standards. In 2018, the NCVHS conducted 2 days of hearings seeking the input of health care providers, health plans, clearinghouses, vendors, and interested stakeholders regarding Version F2 as a potential replacement for Version D.0, and Version 15 as a potential replacement for Version 1.2. Testimony was also presented in support of replacing Version 3.0 with Version 10. In addition to the NCPDP, organizations submitting testimony included the Centers for Medicare & Medicaid Services on behalf of the Medicare Part D program, the National Association of Chain Drug Stores (NACDS), Ohio Medicaid, Pharmerica, CVS Health, and an independent pharmacy, Sam's Health Mart. 1

In a letter dated May 17, 2018, the NCVHS recommended that the Secretary adopt Version F2 to replace Version D.0, Version 15 to replace Version 1.2, and Version 10 to replace Version 3.0. 2 As discussed in section III.B. of this final rule, we did not propose to adopt Version F2 based on that NCVHS recommendation in our proposed rule titled “Administrative Simplification: Modification of the Requirements for the Use of Health Insurance Portability and Accountability Act of 1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) D.0 Standard” that appeared in the Federal Register on January 31, 2019 (84 FR 633) because we believed that proposing a modification to the retail pharmacy standards required further evaluation, including an assessment of the impact of implementing the modification, given the many significant changes a version change would require covered entities to undertake.

The NCVHS held a later hearing, on March 24, 2020, to discuss Change Request 1208 that recommended that Version F6 supplant Version F2, in regard to the NCVHS's prior recommendation that the Secretary adopt Version F2. During the hearing, the NCPDP noted that Version F6 had resolved several key limitations of Version F2. Significantly, with respect to the number of digits in the dollar field, Version F2 did not support dollar fields of $1 million or more. Since the NCVHS's May 17, 2018, recommendation, several new drugs priced at, or in excess of, $1 million have entered the market, and researchers and analysts anticipate that over the next several years, dozens of new drugs priced similarly or higher may enter the market, while hundreds of likely high-priced therapies, including gene therapies that target certain cancers and rare diseases, are under development. To meet emerging business needs, the NCPDP updated the Telecommunication Standard to support dollar fields equal to, or more than, $1 million and made other updates including enhancements to improve coordination of benefits processes, prescriber validation fields, plan benefit transparency, codification of clinical and patient data, harmonization with related standards, and controlled substance reporting, that necessitated the new Version F6. The March 24, 2020, NCVHS meeting transcript and testimony is available at https://ncvhs.hhs.gov/meetings/full-committee-meeting-4/.

In a letter dated April 22, 2020, 3 the NCVHS recommended that the Secretary adopt Version F6 to replace Version D.0, provide a 3-year pre-implementation window allowing, but not requiring, covered entities to use Version F6 beginning at the end of the 3 years, and allowing both Versions F6 and D.0 to be used for an 8-month period until a compliance date of May 1, 2025, when only Version F6 and Version 15 could be used. The recommendation letter stated that allowing the industry to use either Version D.0 or Version F6 would enable an effective live-testing and transition period. The NCVHS recommended that the Secretary adopt Batch Standard Versions 15 and 10, as it had previously recommended in May 2018. The NCVHS has not, as of publication of this final rule, recommended that the Secretary adopt any other version of the NCPDP Telecommunication Standard, such as Version F7, which is discussed in section III. A. of this final rule.

In response to the November 2022 proposed rule, we received 25 timely pieces of correspondence, which resulted in over 47 unique comments from a variety of commenters, including a pharmacy standards development organization, data content committees, health plans, health care companies, professional associations, technology companies, and individuals.

In this section of this final rule, we present our proposals, a summary of the comments received, and our responses to the comments. Some of the public comments received in response to the November 2022 proposed rule were outside of the scope of the proposed rule and are not addressed in this final rule.

In the November 2022 proposed rule, we proposed to adopt a modification to the current HIPAA retail pharmacy standards for the following transactions: (1) health care claims or equivalent encounter information; (2) eligibility for a health plan; (3) referral certification and authorization; and (4) coordination of benefits. We indicated that moving to Version F6 and Version 15 would: allow for the accommodation of drug therapies priced at or in excess of $1 million; include information needed for prior authorizations and enhancements to the drug utilization review (DUR) fields; include new coordination of benefits segment fields that would improve the identification of the previous payer and its program type, such as Medicare, Medicaid, workers compensation, or self-pay programs, which would eliminate the need to use manual processes to identify this information; and accommodate business needs to comply with other industry requirements, among other benefits. For the full discussion, we refer readers to the November 2022 proposed rule (87 FR 67638 and 67639).

We proposed that covered entities conducting the following HIPAA transactions would be required to use Version F6:

• Health care claims or equivalent encounter information (§ 162.1101).

++ Retail pharmacy drug claims.

++ Retail pharmacy supplies and professional claims.

• Eligibility for a health plan (§ 162.1201)—Retail pharmacy drugs.

• Referral certification and authorization (§ 162.1301)—Retail pharmacy drugs.

• Coordination of benefits (§ 162.1801)—Retail pharmacy drugs.

We note that, as is the case with Version D.0, Version F6 is specifically designed for communication between retail pharmacies and health plans, as described in the NCPDP Version F6 Telecommunication Standard Implementation Guide  4 and equivalent NCPDP Version 15 Batch Standard Implementation Guide. Specifically, the implementation guides for Version F6 and Version 15 specify that those standards support transmissions to and from “providers” and indicate that a provider “ may be a retail pharmacy, mail order pharmacy, doctor's office, clinic, hospital, long-term care facility, or any other entity, which dispenses prescription drugs.” This means the use cases for the retail pharmacy drugs transactions addressed in this Final Rule, including the HIPAA requirements for the use of Version F6 and Version 15 we are finalizing here, apply only to providers that dispense prescription drugs. That is, they do not apply to providers that do not dispense prescription drugs.

Comment: A number of commenters supported HHS's proposal to modify the currently adopted retail pharmacy standards from Version D.0 and Version 1.2 to Version F6 and Version 15. Commenters remarked that it has been over 10 years since Version D.0 was adopted for retail pharmacy transactions and agreed that the enhancements in the updated standards will better meet the present business needs of pharmacies and payers, thereby reducing administrative burden. While most commenters agreed that adopting Version F6 is appropriate, several suggested that HHS instead adopt an even more recently updated NCPDP Telecommunication Standard, Version F7 (Version F7). Commenters remarked that the only difference between Version F6 and Version F7 is the addition of a field that distinguishes between administrative gender (used to indicate the sex a person has listed with their insurance company) and clinical sex at birth. Commenters noted that the Patient Gender Code field (305-C5) in Version F6 includes “Non-Binary” as an optional value. While the “Non-Binary” value can be used to support various eligibility and enrollment business functions, it does not support gender-specific coverage rules or clinical patient safety functions. To address this clinical concern, the NCPDP updated Version F6 to Version F7 by adding a new field called Sex Assigned at Birth (F32-W8). Commenters urged HHS to consider the need for this field and adopt Version F7 in this final rule.

Response: We thank the commenters for their support of our proposal to adopt Version F6. While we appreciate comments urging us to adopt Version F7 instead of Version F6, as of the publication date of this final rule there is no DSMO recommendation to adopt Version F7 in accordance with the processes specified in § 162.910(c), nor has the NCVHS been asked to consider updating its prior recommendation to adopt Version F6. While we did not discuss adopting Version F7 in the November 2022 proposed rule, we may address it in future rulemaking. therefore, covered entities will be required to use Version F6 only.

Comment: A commenter acknowledged that adoption of Version F6 would reduce industry burden by replacing several free text fields with discrete data fields, thus allowing the industry to automate additional pharmacy workflows. However, another commenter expressed concern that the replacement of free text fields with discrete data fields in Version F6 would result in the permitted information being too limited or not well-defined. The commenter noted that poorly designed discrete data fields potentially lead to unclear communication and confusion, which has patient-safety implications. The commenter said that before deploying the discrete data fields, the standard should be broadly tested by both physicians and pharmacists to ensure clear communication.

Response: HHS consulted with the NCPDP, the SSO associated with this rulemaking, and was advised that the free text fields were not removed from Version F6. Rather, the free text fields still exist in Version F6 and can be used when additional text is needed for clarification or detail or when a discrete data field does not exist. But, Version F6 provides a format to convey situational plan benefit information, previously sent using free text fields, in discrete data fields. The discrete data fields, which are on the claim response from the payer or PBM to the pharmacy, enable the plan benefit information to be better communicated to the pharmacy, which in turn enables the pharmacy to better communicate to the patient and the prescriber. The use of discrete data fields improves communication of the plan benefit information because it does not rely on the pharmacist reading and interpreting free text. The types of plan benefit information that are communicated via free text fields in Version D.0 and that will be sent in discrete data fields in Version F6 are dates (for example, next available fill date and prior authorization date), minimum/maximum ages, minimum/maximum quantity, minimum/maximum day supply, minimum/maximum dollar amounts, and maximum or remaining fills. Additional detail about formulary alternatives, if applicable, will be communicated via the new discrete data fields rather than via free text. Such detail includes the required duration of therapy and plan benefit tiers.

It is also important to note that since the new discrete data fields are not codified, the information conveyed is not limited to, or defined by, a set of values. A codified field is one that that requires a value that is defined either in NCPDP's External Code List (ECL) or a code set maintained by a non-NCPDP organization (for example SNOMED CT values or ICD-10 code values), where only those values may be included in the data field. The new discrete data fields do not require a defined set of values—they are date fields or fields for a number representing, for example, an age, quantity, or dollar amount.

In light of these updates, we continue to agree with the NCPDP's assessment that replacing free text fields with discrete data fields for clinical and non-clinical information will enhance patient safety processes because there will be less room for interpretation, and, therefore, likely less room for the error and confusion that can occur with free text fields. By ensuring standardization and enabling pharmacy and prescriber system automation and interoperability of clinical information, critical pharmacy information will thus be more readily identifiable and actionable. Lastly, we believe that adopting a later compliance date, including an 8-month transition period, than what we had proposed, will allow for the standard to be broadly tested by health plans, pharmacies, and pharmacy benefit managers (PBM) to ensure clear communication. We discuss the compliance dates in section III.C. of this final rule.

In the November 2022 proposed rule (87 FR 67640), we discussed that the 2009 Modifications final rule adopted Version 3.0 as the standard for the Medicaid pharmacy subrogation transactions. We discussed how State Medicaid agencies sometimes pay claims for which a third party may be legally responsible, and where the State is required to seek recovery. For the full 2009 Modifications final rule discussion, please refer to 74 FR 3296.

The November 2022 proposed rule (87 FR 67640) proposed to broaden the scope of the pharmacy subrogation transaction to apply to all health plans, not just State Medicaid agencies. In doing so, we proposed to modify the name and definition of the transaction to reflect the proposed amended requirements. The transaction at 45 CFR 162.1901 is presently known as the Medicaid pharmacy subrogation transaction and is described as the transmission of a claim from a Medicaid agency to a payer for the purpose of seeking reimbursement from the responsible health plan for a pharmacy claim the State has paid on behalf of a Medicaid recipient. The proposal would have changed the name of the transaction to the Pharmacy subrogation transaction and defined it as the transmission of a request for reimbursement of a pharmacy claim from a health plan that paid the claim, for which it did not have payment responsibility, to the health plan responsible for the claim.

Comment: Several commenters responded to our proposal to require all health plans, not just State Medicaid agencies to use the HIPAA standard for pharmacy subrogation transactions. Most of those commenters disagreed with the proposal, but a few supported it and specifically expressed support for our proposal to change the name and definition of the transaction.

Response: We appreciate the commenters' input. As discussed in section III. B.2. of this final rule, we are not finalizing our proposal to require all health plans to use the HIPAA standard for pharmacy subrogation transactions, and, therefore, we are not finalizing our proposal to change the name and definition of the transaction at § 162.1901.

As discussed previously, the current HIPAA standard, Version 3.0, only applies to State Medicaid agencies seeking reimbursement from health plans responsible for paying pharmacy claims. In the November 2022 proposed rule (87 FR 67640), we stated that Version 3.0 does not address business needs for other payers and that adopting a more broadly applicable subrogation transaction standard would facilitate the efficiency and effectiveness of data exchange and transaction processes for all payers involved in post-payment of pharmacy claims and support greater payment accuracy across the industry.

Comment: The majority of those who commented on our proposal to adopt Version 10 for all health plans expressed support for the adoption of Version 10 to replace Version 3.0 for State Medicaid agencies but opposed our proposal to adopt the standard to apply to all health plans. Commenters believe there are differences between Medicaid subrogation and non-Medicaid subrogation that Version 10 does not address, such as the different payer order rules that are required for non-Medicaid subrogation. They asserted that making Version 10 available, but not required, for non-Medicaid subrogation transactions would allow the pharmacy industry to determine if there are additional data elements, use cases, payer order rules, and other guidance needed for different subrogation transactions.

Response: We thank the commenters for their input. As noted in the November 2022 proposed rule (87 FR 67640 and 67641), during the March 2018 NCVHS hearing, several testifiers noted that there was a need to expand the use of the subrogation transaction beyond State Medicaid agencies based on other payers'—such as Medicare Part D, State assistance programs, or private health plans—business needs to seek similar reimbursement that could not be accommodated by Version 3.0. A testifier noted that a subrogation standard that addresses all payers would allow the industry to have a standardized approach to subrogation, which ultimately would reduce the manual processes that health plans and pharmacies currently use. The testifier added that requiring use of a subrogation standard by all health plans would allow for better tracking of subrogation efforts, which would improve payment accuracy and support cost containment efforts. Another testifier advised that expanding the requirement for non-Medicaid health plans to use the transaction standard would allow for any PBM to use the standard. For these reasons, we proposed that all health plans would be required to use Version 10 for pharmacy subrogation transactions.

Nonetheless, we have decided to adopt Version 10 for State Medicaid agencies only and are not requiring non-Medicaid health plans to use a subrogation standard for pharmacy subrogation transactions. While reviewing commenters' concerns and suggestions, we consulted with the NCPDP, the SSO associated with the rulemaking, and found that Version 10 does not address requirements for all non-Medicaid subrogation situations, especially when these situations involve multiple commercial health plans. In the “Health Insurance Reform; Modifications to the Health Insurance Portability and Accountability Act (HIPAA) Electronic Transaction Standards” August 2008 proposed rule (73 FR 49751), we explained that Federal law requires, with some exceptions, that Medicaid be the payer of last resort, which means that health plans that are legally required to pay for health care services received by Medicaid recipients are required to pay for services primary to Medicaid. However, Medicaid agencies will sometimes pay claims for which a third party is legally responsible. This occurs when the Medicaid agency is not aware of the existence of another coverage, and there are also specific circumstances for which State Medicaid agencies are required by Federal law to pay claims and then seek reimbursement afterward.

Payer order rules are critical in subrogation transactions since they determine the primary or secondary insurer, and, in the case of subrogation, a payer needs to know which insurer to bill for the payment it incorrectly made. In retrospect, since payer order rules aside from Medicaid are not well developed, we believe that Version 10 is not ready for adoption beyond State Medicaid agency subrogation transactions. Although we are not adopting Version 10 for all health plans in this rule, we note that the standard is available for use, meaning covered entities may use it for non-Medicaid subrogation transactions between willing trading partners.

In the November 2022 proposed rule (87 FR 67641), we proposed to replace Version 3.0 with Version 10 as the standard for Pharmacy subrogation transactions at §  162.1902(b).

Comment: As noted previously, commenters agreed that Version 10 should replace Version 3.0 for Medicaid subrogation transactions but opposed requiring its use by non-Medicaid health plans.

Response: We thank commenters for their input and suggestions. As previously discussed, we are adopting the NCPDP Batch Standard Subrogation Implementation Guide, Version 10 as the standard for Medicaid pharmacy subrogation transactions at §  162.1902(b) to apply only to Medicaid pharmacy subrogation transactions.

Section 1175(b)(2) of the Act addresses the timeframe for compliance with modified standards. The section provides that the Secretary must set the compliance date for a modification at such time as the Secretary determines appropriate, taking into account the time needed to comply due to the nature and extent of the modification, though the compliance date may not be sooner than 180 days after the effective date of the final rule. In the November 2022 proposed rule, we proposed that covered entities would need to be in compliance with Version F6 and Version 15 for retail pharmacy transactions 24 months after the effective date of the final rule, which we would reflect in §§ 162.1102, 162.1202, 162.1302, and 162.1802.

In the November 2022 proposed rule (87 FR 67641), we acknowledged that in its April 22, 2020, recommendation letter to the Secretary, the NCVHS recommended the following implementation timelines and dates for Version F6 and Version 15:  5

• A 3-year pre-implementation window following publication of the final rule, allowing (but not requiring) industry use beginning at the end of the 3 years (or 36 months).

• Allow both Versions D.0 and F6 and their equivalent batch standards, Version 1.2 and Version 15, to be used for an 8-month period after the 36-month pre-implementation window, which the NCVHS suggested would enable an effective live-testing and transition period.

• Require full compliance, that is, exclusive use of Version F6, after the 8-month transition period, following the 36-month pre-implementation window.

The NCVHS also recommended a compliance date in May, as opposed to January, due to: seasonal organizational burdens associated with the end-of-year timeframe, such as processing burden for annual benefit plan changes, which are typically effective January 1; unavailability of full staff during the holiday season preceding January 1; competing administrative obligations requiring information technology (IT)/operations and corporate resources such as closing out annual books and compiling reports; and annual flu season peaks affecting both providers and IT/operations staff.

After carefully considering the NCVHS's recommendation and industry testimony on implementation timelines and dates, as well as the potential benefits that would be derived from implementing Version F6 and Version 15 (discussed in section III.A.1. of the November 2022 proposed rule and section III. of this final rule) as soon as possible, we chose not to propose a 3-year pre-implementation compliance window or an 8-month transition period. Instead, we proposed a 24-month compliance date. We believed that the industry was capable of implementing the changes necessary to comply with the updated standards by 24 months from the effective date of the final rule, in light of: (1) limited industry testimony on any barriers specific to the implementation of Version F6; (2) industry testimony on the similarities between the level of effort necessary to implement Version F2 and Version F6, as discussed in the NCVHS's 2018 recommendation; (3) and the limited scope of the modification to only retail pharmacy transactions.

Comment: The majority of commenters opposed the proposed 24-month compliance date requirement for Version F6 and Version 15. In response to our solicitation for information on barriers the industry may face that would require additional time for implementation, commenters noted that there were fewer than 100 data element changes between Version 5.1 and Version D.0, but more than 300 data element changes between Version D.0 and Version F6 and their equivalent batch standards, a greater than 300-percent increase when comparing the two standards. Commenters described that the volume of changes affect multiple business functions, including, for example, transaction routing, pricing, controlled substance billing, Medicare Part D long term care dispensing frequencies, coordination of benefits, Medicare eligibility response, and reversals, which require expansion of internal databases and system updates to build the new data elements into automated claims adjudication processes. Commenters noted the updates will require extensive internal IT development and testing and external trading partner testing across multiple databases and systems before covered entities can conduct real-time exchanges in compliance with the requirements.

In addition to the volume of required data element changes, several commenters provided detailed information about the complexity of the changes. For example, as discussed in section III. of the November 2022 proposed rule, Version F6 supports drugs priced at and in excess of $1 million. This change is specific to Version F6 and, therefore, was not accounted for in any of the earlier industry testimony regarding appropriate timeframes for moving from Version D.0 to Version F2. Commenters noted that, to accommodate drugs priced at $1 million and up, Version F6 includes 31 expanded pricing fields. To comply with these changes, covered entities must ensure that their own systems and/or their business associates' systems increase database capacity to store the expanded field length and have the ability to recognize when a ninth digit may be missing across all 31 expanded pricing fields.

Additionally, Version F6 eliminated 13 distinct patient pay fields in Version D.0 and combined them into one qualified, repeating field. Commenters suggested that changes necessary to move 13 distinct patient pay fields into one pose complex implementation challenges. As a result of these financial field changes, commenters believe that the coding tasks required to ensure that accurate pricing data is included within Version F6 and Version 15-compliant transactions will require additional time. Further, commenters noted that should pricing fields associated with coordination of benefits transactions not be coded correctly as a result of rushed attempts to comply with Version F6 and Version 15, it could result in communicating incorrect patient co-insurance and out-of-pocket calculations to pharmacy providers.

Some commenters also raised concerns regarding the required changes necessary for moving from Version 3.0 to Version 10. Version 10 uses an 8-digit Issuer Identifier Number (IIN) in place of the 6-digit Bank Identification Number (BIN) required by Version 3.0. 6 As discussed in section III. of the November 2022 proposed rule (87 FR 67639), within a pharmacy transaction the BIN is a field in the Telecommunication Standard that is used for the routing and identification in pharmacy claims. These commenters believed that there will need to be system updates in order to recognize and process 8-digit IINs, and systems will also need to be updated to map all 8-digit IINs to the former 6-digit BINs. At one time, both Version 5.1 and Version D.0 required the use of the BIN in a 6-digit, mandatory, fixed-length field located in the header section of the transaction. However, since the adoption of Version D.0, the International Organization for Standardization (ISO) created the IIN, which was expanded to 8 digits (as opposed to the 6-digit BIN) to increase the pool of possible identifiers. Version F6 includes an 8-digit, mandatory, fixed-length field to accommodate 8-digit IINs and represents the first change to the header section of the NCPDP Telecommunication standard since the adoption of Version 5.1 in 2002. However, commenters were concerned that, should system changes to accommodate the new header information not be implemented properly, it could result in transactions being routed to the wrong PBMs, delaying patient access to care.

Several commenters also suggested that additional time to comply with Version F6 and Version 15 is needed to accommodate competing regulatory demands on stakeholder resources. Specifically, commenters identified the need to implement updated electronic prescribing standards as proposed in the Medicare Program; Contract Year 2024 Policy and Technical Changes proposed rule, 7 to develop Application Programming Interfaces to support prior authorization transactions as proposed in CMS's Advancing Interoperability and Improving Prior Authorization Processes proposed rule, 8 and to implement pharmacy changes required under the Inflation Reduction Act of 2022.

Finally, most commenters suggested that the Secretary re-consider and adopt the NCVHS's recommended implementation timeline, which included an additional 8-month period after a 36-month compliance timeframe, during which use of both Version D.0 and Version F6 and their equivalent batch standards would be allowed. Ultimately, this suggestion would result in a 44-month compliance timeframe. Commenters explained that this type of flexibility would allow trading partners to revert to Version D.0 should initial attempts to comply with Version F6 reveal gaps within specific use cases that require recoding and testing efforts prior to a final compliance date. A commenter stated that before finalizing the modification, HHS should consider permitting more testing time between physicians and pharmacists to ensure clear communication. Another commenter identified that the additional 8-month period would be especially beneficial to small, independent pharmacies and State health programs, which have traditionally had the most difficulty in achieving compliance with new standards.

Response: We continue to believe that it is prudent to expedite compliance with the updated standards to ensure that the industry can realize value as soon as possible. However, commenters' detailed explanation of the increased level of complexity in moving from Version D.0 and Version 1.2 to Version F6 and Version 15, as compared to moving from Version 5.1 and Version 1.1 to Version to D.0 and Version 1.2, offered in response to the compliance timeframe proposals, persuaded us to reconsider whether we were allowing sufficient time for covered entities to make system and process updates to accommodate the changes in the standards.

After carefully considering the public comments and reconsidering the NCVHS's recommended implementation timelines and dates, we are attempting to strike a balance by finalizing a longer compliance timeline than we proposed, though not as long as that advocated by some commenters, and also including a transition period. We are finalizing a 36-month compliance date, which includes an 8-month transition period during which covered entities may use both Version D.0 and Version F6. We premised our decision on the fact that most commenters echoed the NCVHS's recommendations and suggested that HHS should provide a 3-year pre-implementation window following publication of the final rule, allowing (but not requiring) industry use beginning at the end of the 3 years and allowing both Versions D.0 and F6 to be used for an 8-month period after the 3-year pre-implementation window, which would enable an effective live testing and transition period. We anticipate that, in order to enable covered entities to use both standards during the permitted 8-month transition period, trading partner agreements will have to be implemented so health plans, processors, PBMs and pharmacies, and software vendors can set up the appropriate editing and formatting of the transactions. With the exception of the requirements set forth in § 162.915, regarding certain specifics that may not be included in them, we do not dictate the terms of trading partner agreements but expect that health plans and pharmacies will continue to collaborate on processes to adjudicate these claims during the permitted 8-month transition.

Finally, it is important to note that HHS received comments stressing the importance of covered entities taking steps as soon as possible to become prepared to move to the updated versions of the Telecommunication and Batch Standards so as to be ready soon to take advantage of their significant improvements.

The 2009 Modifications final rule provided covered entities approximately 36 months from the final rule's effective date to comply with Version D.0 and Version 1.2, though the proposed rule had proposed a 24-month compliance date. In support of the increased compliance timeframe that we finalized, we stated that the competition for resources to make system and business process changes necessary to comply with both the modified pharmacy transactions standard and Version 5010 at the same time necessitated the additional 12 months. While we acknowledge that the level of complexity and volume of changes between Version D.0 and Version F6 and their equivalent batch standards far exceed those between Version 5.1 and Version D.0 and their equivalent batch standards, they do not far exceed the volume and complexity of changes necessary to concurrently comply with updated pharmacy and X12 standards. As such, we do not believe these changes necessitate a compliance timeframe exceeding 36 months. Therefore, we disagree with commenters that a total of 44 months is necessary to comply with the modified pharmacy transaction standards finalized in this rule. Additionally, we are persuaded by commenters, and now agree with the April 22, 2020, NCVHS recommendation letter, which was based on consideration of industry feedback, that advised the Secretary to consider an 8-month transition period. The NCVHS suggested that an 8-month transition period is necessary and sufficient to support a successful and timely transition, stating in its recommendation letter that, should covered entities identify errors in their systems and processes after moving Version F6 and Version 15 into production, the transition period would allow them, if needed, to revert to Version D.0 and Version 1.2 to avoid stops in business functions and delays in patient access to care.

As stated at the beginning of this preamble, this final rule is effective 60 days after publication in the Federal Register . The effective date is the date on which the policies set forth in this final rule take effect. The compliance date is the date on which covered entities are required to implement the policies adopted in this rule. The final transition and compliance dates for Version F6 and Version 15 at §§ 162.1102, 162.1202, 162.1302 and 162.1802 are as follows:

• All covered entities may, as agreed to by trading partners, use either Version D.0 and Version 1.2 or Version F6 and Version 15 beginning August 11, 2027.

• All covered entities must comply with only Version F6 and Version 15 beginning February 11, 2028.

As discussed in section III.B. of this final rule, we are not finalizing our proposal to broaden the scope of the Medicaid pharmacy subrogation transaction to apply to all health plans. Therefore, we discuss here only the compliance date for State Medicaid agencies to comply with Version 10.

As previously noted, with respect to State Medicaid agencies, Version 10 is a modification of the currently adopted standard, Version 3.0. Section 1175(b)(2) of the Act requires the Secretary to set the compliance date for a modification to a standard at such time as the Secretary determines appropriate, but no sooner than 180 days after the effective date of the final rule in which we adopt that modification. We proposed to align the compliance date for Version 10 with the compliance date for Version F6 and Version 15 to reduce confusion and administrative burden. Therefore, we proposed to reflect at § 162.1902(b) that State Medicaid agencies would be required to comply with Version 10 beginning 24 months after the effective date of the final rule.

Comment: A majority of commenters agreed that the implementation timeline for Version 10 needs to align with the implementation timeline for the NCPDP Telecommunication Standard. Commenters suggested a longer implementation timeframe for Version F6 and Version 15 (described earlier), they suggested the Secretary implement a 36-month compliance timeframe, followed by an 8-month period where both Version 3.0 and Version 10 could be used as agreed to by trading partners.

Response: HHS agrees that it is important to align the transition period and compliance date for Version 10 and for the NCPDP Telecommunication standard. We understand that without employing burdensome workarounds it would be difficult for State Medicaid agencies to comply with Version 10 for Medicaid subrogation transactions prior to complying with F6 and Version 15. As such, we believe that aligning the compliance timeframes will reduce confusion for, and burden on, State Medicaid agencies. This includes establishing an 8-month transition period where State Medicaid agencies may, as agreed to by trading partners, use either Version 3.0 or Version 10. The changes required for State Medicaid agencies to comply with Version 10 are minimal, as discussed in section III.B.3. of the November 2022 proposed rule.

After careful consideration of the comments received, at § 162.1902, we are finalizing the compliance date for Version 10 as beginning February 11, 2028, which aligns with the timeline we are adopting for Version F6 and Version 15. In addition, at § 162.1902, we are finalizing that beginning August 11, 2027, which is 8 months before the compliance date, State Medicaid agencies may, as agreed to by trading partners, use either Version 3.0 or Version 10 for Medicaid pharmacy subrogation transactions.

This final rule incorporates by reference the following implementation guides at 45 CFR 162.920: (1) the Telecommunication Standard Implementation Guide Version F6, January 2020, National Council for Prescription Drug Programs; (2) the Batch Standard Implementation Guide, Version 15, October 2017, National Council for Prescription Drug Programs; and (3) the Batch Standard Subrogation Implementation Guide, Version 10, September 2019, National Council for Prescription Drug Programs.

The Telecommunication Standard Implementation Guide Version F6 provides a standard format that addresses data format and content, transmission protocol, and other applicable requirements, for the electronic submission between pharmacy providers, insurance carriers, third-party administrators, and other responsible parties of the following transactions, eligibility verification, claim and service billing, prior authorization, predetermination of benefits, and information reporting (the latter two categories are not HIPAA transactions).

The Batch Standard Implementation Guide Version 15 provides practical guidelines and ensures consistent implementation throughout the industry of a file submission standard to be used between pharmacies and processors, or pharmacies, switches, and processors, when using the Telecommunication Standard framework.

The Batch Standard Subrogation Implementation Guide Version 10 provides the guidelines and process for payers and PBMs to communicate to other payers' reimbursement requests for covered services paid to pharmacy providers for which the other payers are responsible. 9 This implementation guide uses the Telecommunication Standard and the Batch Standard as frameworks for exchange.

The materials we incorporate by reference are available to interested parties and can be inspected at the CMS Information Resource Center, 7500 Security Boulevard, Baltimore, MD 21244-1850. The implementation specifications for the retail pharmacy standards, and for the batch standard for the Medicaid pharmacy subrogation transaction, may be obtained from the NCPDP, 9240 East Raintree Drive, Scottsdale, AZ 85260. Telephone (480) 477-1000; FAX (480) 767-1042. They are also available through the internet at http://www.ncpdp.org. NCPDP charges a fee for all of its Implementation Guides. Charging for such publications is consistent with the policies of other publishers of standards.

We received several comments on subjects that were outside the scope of the November 2022 proposed rule. We do not directly respond to those types of comments, but we acknowledge them. They are summarized in the following list:

• A commenter suggested that HHS consider expanding the Referral Certification and Authorization transaction (§ 162.1301) in order to provide a clear breakdown of the contractual cost of medication before a rebate or the patient cost (copay or deductible) is paid by the health plan. Another commenter expressed that, in order to address these costs, pharmacies should be able to disclose to the patient the lowest cost option for the prescribed medication at the pharmacy, which should include available discounted prescription drug programs resulting in reduced patient cost that is sometimes lower than when using the consumer's health insurance prescription drug benefit. Another comment suggested that HHS should review drug costs first and then consider streamlining drug dispensing.

• A commenter encouraged HHS to work with Congress to allow Medicare beneficiaries to use pharmaceutical discount cards and coupons the same way commercially insured consumers may.

• A few commenters expressed concern that retail pharmacies and health plans may pass the cost of implementing Version F6 to consumers by increasing the costs consumers pay for prescription drugs, thereby increasing the cost of health insurance premiums.

• A commenter was concerned that the costs associated with the proposals will raise taxes at a time when inflation is at an all-time high.

• A commenter requested that the cost to update electronic health records and e-prescribing platforms to reflect these changes not be passed on to physicians.

• A commenter expressed concern that if the updated pharmacy standards are adopted, it will limit the use of paper that some retail pharmacies continue to utilize. The commenter explained that pharmacies that do not have access to ample technology, or those that are unfamiliar with the use of technology, would be disadvantaged by these proposals. Therefore, the commenter recommended that the best solution would be to allow pharmacies the flexibility to choose whether to use Version F6 or paper-based claims based on their business practice or customer base.

Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 required that we solicit comment on the following issues:

• The need for the information collection and its usefulness in carrying out the proper functions of our agency.

• The accuracy of our estimate of the information collection burden.

• The quality, utility, and clarity of the information to be collected.

• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.

In this rule, we are finalizing the sections that contain proposed “collection of information” requirements as defined under 5 CFR 1320.3(c) of the PRA's implementing regulations. If regulations impose administrative costs on reviewers, such as the time needed to read and interpret this final rule, then we should estimate the cost associated with regulatory review. We estimate there are currently 104 affected entities (which also includes PBMs and vendors). In the November 2022 proposed rule, we assumed each entity will have four designated staff members who will review the entire final rule, meaning there would be 416 total reviewers. The particular staff members involved in this review will vary from entity to entity but will generally consist of lawyers responsible for compliance activities and individuals familiar with the NCPDP standards at the level of a computer and information systems manager. We did not receive any comments and are finalizing this rule based on our assumptions.

Using the wage information from the Bureau of Labor Statistics (BLS) for computer and information systems managers (code 11-3021), we estimate that the labor cost of having two computer and information systems managers reviewing this final rule is $99.93 per hour, including fringe benefits and overhead costs ( https://www.bls.gov/oes/current/oes_nat.htm ). Assuming an average reading speed, we estimate that it would take each such individual approximately 4 hours to review this final rule. The estimated cost per entity would therefore be $799.44 (4 hours × $99.93 × 2 staff), and), and the total cost borne by the 104 affected entities would be $83,142 ($799.44 × 104 entities).

We are also assuming that an entity would have two lawyers reviewing this final rule. Using the wage information from the BLS for lawyers (code 23-1011), we estimate that their cost of reviewing this final rule would be $100.47 per hour per lawyer, including fringe benefits and overhead costs ( https://www.bls.gov/oes/current/oes_nat.htm ). Assuming an average reading speed, we estimate that it will take approximately 4 hours each for two lawyers to review this final rule. The estimated cost per entity would therefore be $803.76 (4 hours × $100.47 × 2 staff), and the total cost borne by the 104 affected entities would be $83,592 ($803.76 × 104 entities).

The following requirements and burden associated with the information collection requirements contained in §§ 162.1102, 162.1202, 162.1302, 162.1802, and 162.1902 of this final rule are subject to the PRA. However, this one-time burden was previously approved and accounted for in the information collection request previously approved under OMB control number 0938-0866 and titled “CMS-R-218: HIPAA Standards for Coding Electronic Transactions.”

OMB has determined that the establishment of standards for electronic transactions under HIPAA (which mandate that the private sector disclose information and do so in a particular format) constitutes an agency-sponsored third-party disclosure as defined under the PRA (44 U.S.C. 3501 et seq. ) (see 65 FR 50350 (August 17, 2000)). With respect to the scope of its review under the PRA, however, OMB has concluded that its review will be limited to the review and approval of initial standards and to changes in industry standards that will substantially reduce administrative costs (see 65 FR 50350 (August 17, 2000)). This document, which finalizes updates to adopted electronic transaction standards that are being used, will constitute an information collection requirement because it will require third-party disclosures. However, because of OMB's determination, as previously noted, there is no need for OMB review under the PRA.

Should our assumptions be incorrect, this information collection request will be revised and reinstated to incorporate any additional transaction standards and modifications to transaction standards that were previously covered in the PRA package associated with OMB approval number 0938-0866.

This rule finalizes modifications to standards for electronic retail pharmacy transactions and the Medicaid pharmacy subrogation transaction adopted under the Administrative Simplification subtitle of HIPAA. Under HIPAA, the NCVHS recommends standards to the Secretary following review and approval of standards or updates to standards from the applicable SSO—in this case, the NCPDP. The Secretary must generally promulgate notice-and-comment rulemaking to adopt new or updated standards before they can be utilized to improve industry processes. On May 17, 2018, the NCVHS recommended that the Secretary adopt Version F2 to replace Version D.0, Version 15 to replace Version 1.2, and Version 10 to replace Version 3.0. On April 22, 2020, the NCVHS recommended that the Secretary adopt Version F6 in lieu of Version F2, as well as the two batch standard recommendations set forth in the May 2018 letter. These standards have been developed through consensus-based processes and subjected to public comment which indicated, without opposition, that the updates are required for current and future business processes. Based on informal communication with industry, should the updates to the standards not be adopted, industry will need to continue using Version D.0 and associated workarounds, including manual claims processing and claims splitting for drugs priced at, or in excess of, $1 million.

We have examined the financial impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 14094 on Modernizing Regulatory Review (April 6, 2023), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (September 19, 1980; Pub. L. 96-354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (CRA) (5 U.S.C. 804(2)).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 14094 amends section 3(f) of Executive Order 12866 to define a “significant regulatory action” as an action that is likely to result in a rule: (1) that may have an annual effect on the economy of $200 million or more in any one year, or adversely affecting in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities; (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in the Executive order.

Based on our estimates, OMB's Office of Information and Regulatory Affairs (OIRA) has determined this rulemaking is 3(f)(1) significant as measured by the $200 million or more in any 1 year and meets the criteria under 5 U.S.C. 804(2) (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, also known as the Congressional Review Act). Accordingly, we have prepared an RIA and Regulatory Flexibility Analysis (RFA) that, to the best of our ability, presents the revised costs and benefits from the November 2022 proposed rule and the impact it will have on small entities.

We did not receive any comments on the RIA or RFA presented in the proposed rule. We adjusted our previous calculations to accommodate a 3-year implementation timeframe and updated our summary of the RFA using updated business data. OMB has reviewed these final regulations and provided an assessment of their impact. For details, we refer readers to the discussion provided as follows.

While significant efforts were taken to ensure that the cost and benefits captured for this rule were accurate, there are a few key uncertainty factors that should be considered in reviewing the regulatory impact analysis:

The analysis is based in part on industry research conducted in 2019 and 2020 by the CMS Alliance to Modernize Healthcare (CAMH), a Federally Funded Research and Development Center, to assess the costs and benefits associated with the potential adoption of Versions F2 and F6. As part of this effort, CAMH did the following: identified the relevant stakeholders that will be affected by the adoption of a new HIPAA standard for retail pharmacy drug transactions; obtained expert opinion, expressed qualitatively and quantitatively, on impacts on affected stakeholders of moving from the current version to the updated standards; and developed a high-level aggregate estimate of stakeholder impacts, based on available information from public sources and interviews. References to conversations with industry stakeholders in the RFA and RIA are based on the interviews conducted by CAMH, unless otherwise noted.

Because the industry has not conducted entity-specific financial impact analyses for the adoption of the modified standards in this rulemaking, the analysis relies on preliminary assessments from industry stakeholders that the conversion to Version F6 will entail between two to four times the level of effort as the previous HIPAA pharmacy standard conversion from Version 5.1 to Version D.0. Moreover, as discussed in connection with comments received on the 2009 Modifications proposed rule generally, many commenters mentioned underestimated costs or overestimated benefits of transitioning to the new versions, but few provided substantive data to improve the regulatory estimates. In addition, we did not receive any comments on assumptions in the November 2022 proposed rule. We are finalizing this RIA using the estimates provided in public comments reported in the 2009 Modifications final rule to develop estimates of the true baseline Version D.0 conversion costs applying a Version F6 multiplier.

With respect to benefits, we are not aware of any available information or testimony specifically quantifying cost savings or other benefits, although there is ample testimony supporting the business need and benefits of the modified standards subject to this rulemaking.

To implement Version F6, pharmacies and vendors will likely hire coders, software development and testing specialists, and/or consultants to modify their production code and will likely conduct employee training to facilitate the use of the new version. These one-time, out-of-pocket expenditures constitute a cost attributable to the final rule. Costs to transmit transactions using the Version F6 standard after business systems have been modified to implement the adopted standard, as well as costs to maintain those systems for compliance with the standard, were not factored into the RIA. These ongoing costs are currently incurred by affected entities that are required to use the current standard and are attributable to conducting electronic transactions in general. Therefore, we do not anticipate any costs attributable to this final rule after the completion of the final 3-year compliance timeframe.

Based on oral and written NCVHS testimony by the retail pharmacy industry and pharmacy management system vendors, it was suggested that their software development process for a HIPAA standard conversion would represent an opportunity cost. We believe Version F6 implementation will shift the priorities of technical staff at large pharmacy firms, potentially delaying other improvements or projects. In this scenario, the opportunity cost consists of the time-value of delayed projects. Other pharmacies have an ongoing relationship with their pharmacy management software vendors. The purchaser generally obtains a hardware and software package with an ongoing agreement that includes periodic payments for maintenance, updates, upgrades, training, installation, financing, etc. Thus, the software is expected to evolve, rather than being just a one-time installation. The balance between upfront charges and monthly maintenance fees more closely resembles a multiyear lease than the one-time sale of an off-the-shelf application to a consumer. Thus, the parties often contemplate an ongoing supplier relationship in which maintenance and upgrades represent an opportunity cost.

Further, the RIA in the November 2022 proposed rule used average costs to assess costs to each industry stakeholder because of their availability and verifiability. We did not receive any responses to our solicitation for comments related to these assumptions and cost interpretations.

The RIA summarizes the costs and benefits of adopting the following standards:

• Telecommunications Standard Version F6, replacing Version D.0, including equivalent Batch Standard Version 15 for health care claims or equivalent encounter information; eligibility for a health plan; referral certification and authorization; and coordination of benefits transactions.

• Batch Standard Subrogation Implementation Guide, Version 10 replacing Batch Standard Medicaid Subrogation Implementation Guide, Version 3, for Medicaid Pharmacy Subrogation Transactions.

This RIA amends the RIA from the November 2022 proposed rule, while acknowledging any changes made in this final rule, to reflect a 3-year compliance date following the effective date of this final rule. All other information regarding the details supporting the cost-benefit analysis for each of the standards listed previously remains unchanged.

Table 1 is the compilation of the estimated costs for all of the standards adopted in this final rule. To allocate costs over the 3-year implementation period, we use a 30-40-20-10 percent allocation of IT upgrades and training expenses across the 3-year implementation period. We believe that since the effective date of this final rule will be in the latter part of 2024, costs will start at that time and go into 2027.

The objective of this portion of the RIA is to summarize the costs and benefits of implementing Version F6.

Almost all pharmacies and all intermediaries that transfer and process pharmacy claim-related information already use Version D.0 for eligibility verification, claim and service billing, prior authorization, predetermination of benefits, and information reporting transaction exchanges (the latter two categories are not HIPAA-standard transactions). Pharmacies utilize technology referred to as pharmacy management systems that encode Version D.0 to submit these transactions for reimbursement on behalf of patients who have prescription drug benefits through health and/or drug plan insurance coverage (health plans). These submissions are generally routed through two intermediaries: a telecommunication switching vendor (switch) and a specialized third-party administrator for the health plan, generally a PBM.

Based on the business data from the CAMH, pharmacies have a bimodal size distribution. About 99 percent of firms have a single location, predominantly the traditional independent, owner-operated storefront, and the remainder of fewer than 200 large firms operate an average of approximately 150 establishments (locations) each. According to other industry data, the largest five pharmacy corporations represent over 28,000 locations, and the two largest corporations each exceed 9,000 locations. 10 However, the business data from the Pharmacy and Drug Store segment (NAICS code 456110) may not capture all pharmacy firms affected by this final rule.

Pharmacies are typically classified by ownership as either not-independent or independents. Health data analytics company IQVIA estimated  11 in 2021 that there were 66,083 pharmacies, of which 70 percent (46,964) were not-independent and 30 percent (19,119) were independents. Retail pharmacies, which provide access to the general public, comprised the clear majority of pharmacy facility types at 91 percent (59,395). The five largest pharmacy corporations owned about 40 percent (close to 29,000) of retail locations. The remaining 8 percent of facility types included closed-door pharmacies, which provide pharmaceutical care to a defined or exclusive group of patients because they are treated or have an affiliation with a special entity such as a long-term care facility, as well as central fill, compounding, internet, mail service, hospital-based nuclear, and outpatient pharmacies. Most of these pharmacy types may be included in Medicare Part D sponsor networks. We are aware that the largest pharmacy corporations are increasingly likely to operate multiple pharmacy business segments (channels), such as retail, mail, specialty, and long-term care. We did not receive any responses to our solicitation for comments on whether there are meaningful distinctions in cost structures or data sources to assist in quantifying entities in these segments.

This rule is published under the authority granted to the Secretary of Health and Human Services by section 1102 of the Social Security Act (the Act) (42 U.S.C. 1302). Section 1102 of the Act authorizes the Secretary to publish regulations, not inconsistent with the Act, as may be necessary to the efficient administration of the functions with which the Secretary is responsible under the Act.

This rule is also authorized by sections 452(a)(1) and 454(13) of the Act (42 U.S.C. 652(a)(1) and 654(13)). Section 452(a)(1) of the Act expressly delegates authority to the Secretary's designee requiring the designee to “establish such standards for State programs for locating noncustodial parents, establishing paternity, and obtaining child support . . . as he determines to be necessary to assure that such programs will be effective.” Section 454 of the Act establishes requirements that States must include in their title IV-D  1 State plans, the costs of which are eligible for FFP under section 455 of the Act (42 U.S.C. 655). Specifically, section 454(13) of the Act provides the Secretary with delegated authority to require the State's title IV-D plan to “provide that the State will comply with such other requirements and standards as the Secretary determines to be necessary to the establishment of an effective program for locating noncustodial parents, establishing paternity, obtaining support orders, and collecting support payments . . . .” State plans may be updated at any time and a State would submit updates to their State plan at the time of electing to provide employment and training services.

This rule is further published in accordance with section 455(f) of the Act (42 U.S.C. 655(f)) which authorizes the Secretary to make child support funding available to Tribes and Tribal organizations operating child support programs and to issue regulations establishing requirements for Tribal child support programs.

The rulemaking is also consistent with section 451 of the Act, which authorizes Federal funding to States for enforcing support obligations, obtaining child support payments, and assuring that assistance in obtaining support is available to all children.

The purpose of this rule is to allow State and Tribal child support agencies the option to use FFP under title IV-D of the Act to provide certain optional and nonduplicative employment and training services for eligible noncustodial parents in the child support program.

In 1975, Congress established the child support program under title IV-D of the Social Security Act (Pub. L. 93-647) to provide funding to States for effective enforcement of child support obligations. The child support program is administered at the Federal level by the OCSS and functions in all States and over 60 Tribes. 2 The program has evolved over the past 50 years and has been guided by the changing needs of families, by Federal legislation, and by research and data that contribute to OCSS's understanding of the standards and requirements necessary to establish an effective child support program. Today the program is focused on delivering child support services that improve the financial support of children, by collecting and facilitating consistent child support payments based on the noncustodial parents' ability to pay.

Families and labor market opportunities have fundamentally changed since 1975. The percentage of children who need child support services has increased and the ability of noncustodial parents to pay child support has declined. 3 In calendar year 2021, 40 percent of births were to unmarried women, up from 14 percent in 1975. 4 In calendar year 2023, 25 percent of children lived with a single parent, up from 17 percent in 1975. 5 In fiscal year 2023, the child support program served one in five children in the United States, or 12.7 million children. 6 The labor market has been particularly difficult for less-educated men during this period, leaving them with significantly fewer job opportunities and less income than before. In 2015, the real hourly earnings for men 25-54 years old with only a high school degree was 18 percent lower than it was in 1973. 7 As of 2018, over 70 percent of noncustodial parents had not attended college. 8 In 2017, more than one-third of noncustodial parents (3.4 million) lived in families with incomes below 200 percent of the official poverty thresholds, and 43 percent did not work full-time, year-round. 9 Stable employment is particularly important for a parent to be able to make reliable consistent child support payments for their children.

Other societal changes have also affected the child support program, including greatly elevated incarceration rates. Incarceration rates increased dramatically between 1980 and 2008 and have since declined, but the percent of the U.S. population incarcerated in 2020 was more than double the figure in 1980. 10 It is estimated that six percent of all children in the United States have a parent who is or has been incarcerated. 11 Research shows that the subgroup of noncustodial parents who participate in employment and training programs have high rates of prior arrests, convictions, and incarceration. 12 For example, 65 percent of noncustodial parents who enrolled in a recently completed national demonstration of child support-led employment and training programs reported that they had been previously incarcerated. 13 Having an incarceration record is a barrier to employment that diminishes earnings potential, reducing a parent's ability to work and pay child support. 14

In 1996, Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA, Pub. L. 104-193), which made significant changes to the child support program. 15 These changes included the introduction of a new “family first” child support payment distribution policy, which required that families who previously received cash assistance must receive certain child support arrearage payments before the State and Federal governments retain their share of collections. 16 PRWORA also amended the Social Security Act to allow courts and child support agencies to require noncustodial parents owing past-due child support for a child receiving assistance under the Temporary Assistance for Needy Families (TANF) program to participate in work activities. Specifically, section 466(a)(15) of the Act requires States to have laws and procedures under which the State has the authority to issue an order requiring an individual to participate in work activities, as defined by section 407(d) of the Act. 17

In 1997, Congress authorized a total of $3 billion for the Welfare-to-Work (WtW) Grants program as part of the Balanced Budget Act of 1997 (Pub. L. 105-33). Administered by the U.S. Department of Labor, these grants were intended to help long-term welfare recipients and noncustodial parents of children whose custodial parents met certain criteria find and keep good jobs. 18 Congress appropriated funds for fiscal years 1998 and 1999, and grantees were allowed five years to spend their funds, which ended in 2004. OCSS encouraged IV-D and IV-A agencies (TANF agencies) to work together to increase the participation of noncustodial parents in WtW programs and encouraged States to make “special efforts to inform potentially eligible noncustodial parents about the existence and availability of WtW services.”  19

In addition, OCSS issued policy guidance in PIQ-98-03  20 and AT-00-08  21 to respond to State inquiries about the availability of FFP under title IV-D to pay for the costs of work activities for noncustodial parents under section 466(a)(15) of the Act. OCSS concluded that because section 466(a)(15) of the Act did not require that IV-D programs establish, provide, or administer work activity programs for noncustodial parents, the costs of these activities could not be attributed to the IV-D program. In guidance, OCSS stated that under section 466(a)(15) of the Act FFP was available “for the identification and referral of unemployed noncustodial parents to job training, coordination with courts regarding compliance with court orders, tracking participation, and data collection,” but was not available for “training and services provided by entities other than the IV-D agency.”  22 OCSS viewed the determination of eligibility for and cost of participation in WtW programs as “the responsibilities of the WtW grantees, not the courts or the IV-D agency.”  23

This final rule allows FFP for employment and training services for noncustodial parents under the separate authority provided to the Secretary in sections 451(a)(1) and 454(13) of the Act. As mentioned above, sections 451(a)(1) and 454(13) of the Act provide the Secretary with delegated authority to establish requirements and standards that the Secretary determines to be necessary to the establishment of an effective child support program. Upon reviewing the results of research studies detailed below, and described in the Notice of Proposed Rulemaking, indicating that providing employment and training services for noncustodial parents can lead to more reliable and regular child support payments, the Secretary has determined that allowing funding under title IV-D for such services improves the effectiveness of the child support program.

In the decades that followed OCSS's policy guidance of 1998 and 2000, national demonstrations and state-based programs have examined the effectiveness of providing employment and training services to unemployed and underemployed noncustodial parents. Collectively, these demonstrations and programs found positive outcomes in employment rates, earnings, child support payment rates, the amount of child support paid, and payment regularity. 24

The legal basis of this rulemaking is 46 U.S.C. Chapter 93, 1 which requires foreign merchant vessels and United States vessels operating “on register”—meaning United States vessels engaged in foreign trade—to use United States or Canadian pilots while transiting the United States waters of the St. Lawrence Seaway and the Great Lakes system. 2 For U.S. Great Lakes Pilots, the statute requires the Secretary to “prescribe by regulation rates and charges for pilotage services, giving consideration to the public interest and the costs of providing the services.” Title 46 of the U.S.C. 9303(f) also requires that rates be established or reviewed and adjusted each year, no later than March 1. The Secretary's duties and authority under 46 U.S.C. Chapter 93 have generally been delegated to the Coast Guard. 3

The purpose of this final rule is to issue new pilotage rates for 2025 by revising a base rate established in 2023. The Coast Guard believes that the new rates will continue to promote our goal, as outlined in 46 CFR 404.1(a), to promote safe, efficient, and reliable pilotage service in the Great Lakes by generating sufficient revenue for each pilot association, to reimburse its necessary and reasonable operating expenses, fairly compensate trained and rested Pilots, and provide appropriate funds to use for improvements.

Rates are the foundation for safe, efficient, and reliable pilotage service to facilitate maritime commerce, protect the marine environment, and comply with National Transportation Safety Board recommendations regarding staffing and pilot fatigue. The pilotage rates for the 2025 season range from $440 to $986 per pilot hour, depending on which of the specific six areas pilotage service is provided, and are paid by shippers to the pilot associations.

There are three American pilotage districts on the Great Lakes, each represented by a pilot association. 4 Each pilotage district is further divided into “designated” and “undesignated” areas. Designated areas, classified as such by Presidential Proclamation, are waters in which pilots must direct the navigation of vessels at all times. 5 Undesignated areas are open bodies of water where pilots must only “be on board and available to direct the navigation of the vessel” at the discretion of the vessel master. 6 For these reasons, pilotage rates in designated areas can be significantly higher than those in undesignated areas.

The three pilot associations, which are the exclusive U.S. source of Registered Pilots on the Great Lakes, use the revenue from the shippers to cover operating expenses, maintain infrastructure, compensate Apprentice and Registered Pilots, acquire and implement technological advances, train new personnel, and provide for continuing professional development. Each pilot association is an independent business and is the sole provider of pilotage services in its district of operation. Each pilot association is responsible for funding its own operating expenses, infrastructure maintenance, and compensation for Pilots and Apprentice Pilots. 7

The actual demand for service dictates the compensation amount for United States Registered Pilots. We divide that amount by the historic 10-year average for pilotage demand. We recognize that in years where demand for pilotage services exceeds the 10-year average, pilot associations will accrue more revenue than projected, while in years where demand is below average, they will take in less. We believe over the long term, however, this scheme ensures that infrastructure will be maintained, and that Pilots will receive adequate compensation and work a reasonable number of hours, with adequate rest between assignments, to ensure retention of highly trained personnel.

For this final rule, we conducted our annual review and interim adjustment to the base pilotage rates for 2025. The Coast Guard last conducted a full ratemaking in 2023, with the “Great Lakes Pilotage Rates—2023 Annual Ratemaking and Review of Methodology” final rule (hereafter the 2023 final rule) (88 FR 12226, published February 27, 2023). This final rule is an interim ratemaking under 46 CFR 404.100(b).

In this final rule, we set new pilotage rates for 2025. We conducted this 2025 ratemaking as an interim ratemaking, as we did with the “Great Lakes Pilotage Rates—2024 Annual Review” final rule (hereafter the 2024 final rule) (89 FR 9038, published February 9, 2024). Thus, the Coast Guard adjusts the compensation benchmark following the interim ratemaking procedures under § 404.100(b), rather than following the procedures for a full ratemaking under § 404.100(a).

The Coast Guard is setting the rates shown in table 1.

This final rule affects 61 U.S. Great Lakes Pilots, 3 Apprentice Pilots, 3 pilot associations, and the owners and operators of an average of 280 oceangoing vessels that transit the Great Lakes annually. This final rule will not affect the Coast Guard's budget or increase Federal spending because foreign shippers, foreign cruise ships, and vessels requesting voluntary pilotage pay these rates directly to the respective pilot association The estimated overall annual regulatory economic impact of this rate change will be a net increase of $2,879,028 in payments made by the foreign shippers, foreign cruise ships, and vessels requesting voluntary pilotage service, which is a 7-percent increase from operating costs in the 2024 shipping season. This represents an increase in revenue needed for target Pilot compensation, a decrease in revenue needed for the total Apprentice Pilot wage benchmark, an increase in the revenue needed for adjusted operating expenses, and an increase in the revenue needed for the working capital fund.

This final rule establishes the 2025 yearly target compensation for Pilots on the Great Lakes at $464,317 per Pilot (a $23,659, or 5.37 percent, increase over their 2024 target compensation). Because the Coast Guard must review, and, if necessary, adjust rates each year, we analyze these as single-year costs and do not annualize them over 10 years. Section VIII., Regulatory Analyses, in this preamble, provides the regulatory impact analyses of this final rule.

We received three comments in response to the notice of proposed rulemaking (NPRM) for this this final rule, titled “Great Lakes Pilotage Rates—2025 Annual Review” (hereafter 2025 Ratemaking NPRM) (89 FR 63334, published August 5, 2024). We made no changes to the rates in response to those comments.

One anonymous commenter was concerned that the ratemaking methodology was not accurately capturing trends in demand, citing this year's rate increase in District One as surprising, given that transits and time on task have gone down over the past couple of seasons. While the ratemaking methodology itself is not included in the scope of this rule, we note that the 10-year rolling average is designed to minimize volatility in the ratemaking. This decision has been confirmed by the courts as a “rational choice.” Am. Great Lake Ports Assn. v. United States Coast Guard. 8

Another commenter, representing three trade associations, suggested that the Coast Guard should use Federal Open Market Committee (FOMC) Projections for the inflation numbers used in Step 2 of the methodology. Modifying the ratemaking methodology is outside the scope of this rule—since this is an interim ratemaking—but we will consider this suggestion in the next full ratemaking. 9

The same commenter supported the elimination of the Working Capital Fund in Step 5 of the ratemaking process. We appreciate the commenter's support, but elimination of the Working Capital Fund is outside the scope of this rule and will be addressed in next year's full ratemaking.

This commenter also supported District One's efforts to improve their dispatch operations and suggested that Districts Two and Three make similar efforts. Pilotage association dispatch operations are outside the scope of this rulemaking, but we will take the comment under advisement for potential future rulemakings.

This commenter suggested that the Coast Guard should update the Memorandum of Understanding (MOU) between the U.S. Coast Guard and the Canadian Great Lakes Pilotage Authority because that “document provides for the coordination of services, including the division of dispatch activity and the sharing of work assignments.” The MOU is outside the scope of this rulemaking, but we will take this comment under advisement and communicate it to the relevant parties.

The commenter urged the Coast Guard to make individual pilot compensation publicly available. The Coast Guard will not accommodate this request. Compensation of individual pilots is not included in the expense base or methodology, and, therefore, we decline to add a regulatory requirement for pilot associations to publicly report the compensation of individual pilots. The Coast Guard does not use actual earnings or average earnings; instead, we use target pilot compensation (described in Step 4 of the existing methodology), which the Coast Guard has determined to be reasonable and necessary. Because actual individual salary values are not used in the ratemaking, the Coast Guard believes that a requirement to report pilot compensation is not in the public interest or necessary to provide for the costs of services. Concerns about equity among the pilots are outside the scope of this rulemaking.

The commenter's last suggestion was that the Coast Guard should conduct a line-by-line inspection of pilot association expenses to determine if they meet the “necessary and reasonable” standard. This is a suggested change to the methodology, which is outside the scope of this rule. We will consider this comment for the next full ratemaking.

The last comment, from the Western Great Lakes Pilots Association (WGLPA), contained three requests for the Coast Guard. First, WGLPA requested an upward adjustment of $47,924 based on legal expenses related to negotiations of the collective bargaining agreement between the WGLPA and the International Longshoremen's Association. However, the only evidence of these charges was a letter from WGLPA's outside counsel. In order to make a change to the expenses, the Coast Guard would need to see verifiable and detailed evidence that explains those charges. For legal work, a detailed record of an attorney's billable hours would be sufficient. Even with this information, we may not be able to recognize this expense as the other pilot associations perform this function without incurring substantial legal expenses. We would also need additional justification to determine if this was a necessary expense, and if so, whether all or some portion of the expense is a reasonable amount to include in the association's expense base.

Second, WGLPA requested an upward adjustment of $45,296 based on a 2023 arbitration ruling that found that wages were owed for work performed by their dispatch team. These are 2023 expenses and, therefore, cannot be added to this year's ratemaking. If properly submitted next year to CohnReznick (the third-party firm under contract to create revenue and expense reports for the three pilot association expenses), the expenses will be evaluated in next year's ratemaking.

Last, WGLPA alleged that they did not have sufficient opportunity to engage with the Coast Guard and CohnReznick to adequately provide explanation or documentation for certain expenses. The Coast Guard disagrees with this assertion. According to our records, the opportunity to provide documentation and information to CohnReznick commenced on August 10, 2023, and concluded on January 24, 2024, a day before the draft report was generated. We believe WGLPA had sufficient time to organize and segregate records to comply with the Coast Guard contract to perform this work. Additionally, the Director confirmed with CohnReznick personnel that they verbally communicated the project timeline to WGLPA personnel during the initial “prepared by client” phone call on August 10, 2023, and, on the same day, emailed the WGLPA with a list of documents and information the WGLPA would need to provide in order to successfully produce the report.

The only change from the NPRM results from updated inflation data becoming available since the publication of the proposed rule. Table 2 summarizes the changes between the 2025 Ratemaking NPRM and this final rule. This table includes changes from the proposed rule that are not based on comments from the NPRM.

The ratemaking methodology, outlined in 46 CFR 404.101 through 404.110, consists of 10 steps that are designed to account for the revenues needed and total traffic expected in each district. The first several steps of the methodology establish base pilotage rates. Additional steps to incorporate the weighting factors are necessary to establish the final pilotage rates. The result is an hourly rate, determined separately for each of the areas administered by the Coast Guard.

In Step 1, “Recognize previous operating expenses,” (§ 404.101), the U.S. Coast Guard's Director of the Great Lakes Pilotage (Director) uses an independent third party to review each pilot association's audited operating expenses from each of the three pilot associations. Operating expenses include all allowable expenses, minus Pilot and Apprentice Pilot wages and benefits. This number forms the baseline amount that each association is budgeted. Because of the time delay between when the association submits raw numbers and when the Coast Guard receives audited numbers, this number is 3 years behind the projected year of expenses. Therefore, in calculating the 2025 rates in this final rule, we began with the audited expenses from the shipping activity in 2022.

While each pilot association operates in an entire district, including both designated and undesignated areas, the Coast Guard determines costs by area. We allocate certain operating expenses to designated areas and certain operating expenses to undesignated areas. In some cases, we can allocate the costs based on where they are accrued. For example, we can allocate the costs of insurance for Apprentice Pilots who operate in undesignated areas only. In other situations, such as general legal expenses, expenses are distributed between designated and undesignated waters on a pro rata basis based upon the proportion of income forecasted from the respective portions of the district.

In Step 2, “Project operating expenses, adjusting for inflation or deflation,” (§ 404.102), the Director develops the 2025 projected operating expenses. To do this, we apply inflation adjustors for 3 years to the operating expense baseline received in Step 1. The inflation factors are from the Bureau of Labor Statistics' (BLS) Consumer Price Index (CPI) for the Midwest Region, or, if not available, the FOMC median economic projections for Personal Consumption Expenditures (PCE) inflation. This step produces the total operating expenses for each area and district.

In Step 3, “Estimate number of registered pilots and apprentice pilots,” (§ 404.103), the Director calculates how many Registered and Apprentice Pilots are needed for each district. To do this, we employ a “staffing model,” described in § 401.220, paragraphs (a)(1) through (3), to estimate how many Pilots would be needed to handle shipping during the beginning and close of the season. This number provides guidance to the Director in approving an appropriate number of Pilots.

At the September 7, 2023 Great Lakes Pilotage Advisory Committee (GLPAC) meeting, there was a unanimous recommendation for an August 1 cutoff date to allow an Apprentice Pilot, who has completed all their training, to be recognized as a fully registered Pilot in the rate. 10 The Coast Guard agrees that this change is both necessary and reasonable, as it provides the proper compensation based on the most accurate data. If an Apprentice Pilot is scheduled to complete training and becomes a fully registered Pilot before August 1, they will be counted as a fully registered Pilot in the rate; if they do not meet the August 1 deadline, those funds may be adjusted in the proceeding rate for up to the full amount. In addition, if a fully registered Pilot retires, or an Apprentice Pilot resigns, and has been counted in the rate, the proceeding rate may be adjusted accordingly for up to the full amount.

In Step 4 of the ratemaking calculation, we determine the number of Pilots provided by the pilot associations (see § 404.103) and use that figure to determine how many Pilots need to be compensated via the pilotage fees collected. In the first part of Step 4, “Determine target pilot compensation benchmark and apprentice pilot wage benchmark,” (§ 404.104(b)(1)), the Director adjusts the previous year's individual target Pilot compensation by the difference between the previous year's BLS ECI for the Transportation and Materials sector and the FOMC median economic projections for PCE inflation value used to inflate the previous year's target Pilot compensation.

In the second part of Step 4, (§ 404.104(b)(2)), the Director then adjusts that value by the FOMC median economic projections for PCE inflation for the upcoming year.

In the final part of Step 4, § 404.104(c) and (d), the Director determines the total target compensation figure for each district. To do this, the Director multiplies the compensation benchmark by the number of Pilots for each area and district (from Step 3), producing a figure for total Pilot compensation. Based on the total Pilot compensation, the Director determines the individual Apprentice Pilot wage benchmark at the rate of 36 percent of the individual target Pilot compensation, as calculated according to paragraphs (a) or (b) of this section.

In Step 5, “Project working capital fund,” (§ 404.105), the Director calculates an added value to pay for needed capital improvements and other non-recurring expenses, such as technology investments and infrastructure maintenance. This value is calculated by adding the total operating expenses (derived in Step 2) to the total target Pilot compensation and the total target Apprentice Pilot wage (derived in Step 4), then by multiplying that figure by the preceding year's average annual rate of return for new issues of high-grade corporate securities. This figure constitutes the “working capital fund” for each area and district.

In Step 6, “Project needed revenue,” (§ 404.106), the Director simply adds the totals produced by the preceding steps. The projected operating expenses for each area and district (from Step 2) is added to the total target Pilot compensation, including Apprentice Pilot wage benchmarks (from Step 4), and the working capital fund contribution (from Step 5). The total figure, calculated separately for each area and district, is the “needed revenue.”

In Step 7, “Calculate initial base rates,” (§ 404.107), the Director calculates an hourly pilotage rate to cover the needed revenue, as calculated in Step 6. This step consists of first calculating the 10-year average of traffic hours for each area. Next, we divide the revenue needed in each area (calculated in Step 6) by the 10-year average of traffic hours to produce an initial base rate.

An additional element, the “weighting factor,” is required under § 401.400. Pursuant to that section, ships pay a multiple of the “base rate,” as calculated in Step 7, by a number ranging from 1.0 (for the smallest ships, or “Class I” vessels) to 1.45 (for the largest ships, or “Class IV” vessels). This significantly increases the revenue collected, and we need to account for the added revenue produced by the weighting factors to ensure that shippers are not overpaying for pilotage services. We do this in the next step.

In Step 8, “Calculate average weighting factors by Area,” (§ 404.108), the Director calculates how much extra revenue, as a percentage of total revenue, has historically been produced by the weighting factors in each area. We do this by using a historical average of the applied weighting factors for each year since 2014 (the first year the current weighting factors were applied).

In Step 9, “Calculate revised base rates,” (§ 404.109), the Director modifies the base rates by accounting for the extra revenue generated by the weighting factors. We do this by dividing the initial pilotage rate for each area (from Step 7) by the corresponding average weighting factor (from Step 8), to produce a revised rate.

In Step 10, “Review and finalize rates,” (§ 404.110), often referred to informally as “Director's discretion,” the Director reviews the revised base rates (from Step 9) to ensure that they meet the goals set forth in 46 U.S.C. 9303(f) and 46 CFR 404.1(a), which include promoting efficient, safe, and reliable pilotage service on the Great Lakes; generating sufficient revenue for each pilot association to reimburse necessary and reasonable operating expenses; compensating trained and rested pilots fairly; and providing appropriate revenue for improvements.

Step 1 in the ratemaking methodology requires that the Coast Guard review and recognize the operating expenses for the last full year for which figures are available (§ 404.101). To do so, we begin by reviewing the independent accountant's financial reports for each association's 2022 expenses and revenues. For accounting purposes, the financial reports divide expenses into designated and undesignated areas. For costs accrued by the pilot associations generally, such as employee benefits, the cost is divided between the designated and undesignated areas on a pro rata basis. Adjustments have been made by the auditors and are explained in the auditor's reports, which are available in the docket for this rulemaking, where indicated under the ADDRESSES portion of this preamble.

The recognized operating expenses for District One are shown in table 3.

In accordance with the text in § 404.102, having identified the recognized 2022 operating expenses in Step 1, the next step is to estimate the current year's operating expenses by adjusting for inflation over the 3-year period. We calculate inflation using the BLS data from the CPI for the Midwest Region of the United States for the 2023 inflation rate. 11 Because the BLS does not provide forecasted inflation data, we use economic projections from the Federal Reserve for the 2024 and 2025 inflation modification. 12 Based on that information, the calculations for Step 2 are as presented in table 4.

In accordance with the text in §  404.103, the Coast Guard estimates the number of fully registered Pilots in each district. In the past, this was done using the staffing model and the process described in §  404.103. During the 2023 GLPAC meeting, there was a unanimous recommendation by the GLPAC that, after 2024, the Director be given discretion to increase the staffing model plus three Pilots per District, based on industry demand and to ensure shipping reliability. 13 Additionally, the previous staffing model's maximum is now considered the minimum in regard to the number of Pilots needed in each district. 14

We determine the number of fully registered Pilots based on data provided by the St. Lawrence Seaway Pilots Association (SLSPA) as well as the previously mentioned recommendation. We determine the number of Apprentice Pilots based on input from the district on anticipated retirements and staffing needs. These numbers can be found in table 5.