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Office of Energy Efficiency and Renewable Energy, Department of Energy.
Notification of tentative determination and request for comment.
On June 2, 2023, the U.S. Department of Energy (“DOE” or the “Department”) published a test procedure final rule which established test procedures for commercial warm air furnaces (“CWAFs”). The Air-Conditioning, Heating, and Refrigeration Institute (“AHRI”) filed a petition for review of the final rule in the United States Court of Appeals for the Fourth Circuit on August 1, 2023. In a February 6, 2024, order, the Fourth Circuit granted a voluntary remand of the final rule to the Department of Energy (“DOE”) to determine whether establishment of the test procedure for the thermal efficiency two (“TE2”) metric is supported by the specific provisions applicable to CWAFs under the Energy Policy and Conservation Act (“EPCA”). More specifically, DOE agreed in this voluntary remand to only establish the TE2 test procedure if the Department makes a determination that the TE2 test procedure is consistent with the amended industry test procedure, or a determination, supported by clear and convincing evidence, that the amended industry test procedure fails to satisfy the statutory requirements. This document provides DOE's tentative determination that the amended industry test procedure fails to satisfy EPCA's statutory requirements and requests comment on this topic.
DOE will accept comments, data, and information regarding this document no later than January 8, 2025.
Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at
(1)
(2)
No telefacsimiles (“faxes”) will be accepted. For detailed instructions on submitting comments and additional information on this process,
The docket web page can be found at
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (240) 597-6737. Email:
Mr. Pete Cochran, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (240) 961-1189. Email:
For further information on how to submit a comment or review other public comments and the docket, contact the Appliance and Equipment Standards Program staff at (202) 287-1445 or by email:
The Energy Policy and Conservation Act, Public Law 94-163, as amended (“EPCA”),
The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA include definitions (42 U.S.C. 6311), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), energy conservation standards (42 U.S.C. 6313), and the authority to require information and reports from manufacturers (42 U.S.C. 6316; 42 U.S.C. 6296).
The Federal testing requirements consist of test procedures that manufacturers of covered equipment must use as the basis for: (1) certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(b); 42 U.S.C. 6296), and (2) making other representations about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE uses these test procedures to determine whether the equipment complies with relevant standards promulgated under EPCA. DOE's test procedures for CWAFs are currently prescribed at subpart D of part 431 of title 10 of the Code of Federal Regulations (“CFR”).
Federal energy efficiency requirements for covered equipment established under EPCA generally supersede state laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and 42 U.S.C. 6316(b); 42 U.S.C. 6297) DOE may, however, grant waivers of Federal preemption for particular state laws or regulations, in accordance with the procedures and other provisions of EPCA. (42 U.S.C. 6316(b)(2)(D))
Under 42 U.S.C. 6314, EPCA sets forth the criteria and procedures DOE must follow when prescribing or amending test procedures for covered equipment. EPCA requires that any test procedures prescribed or amended under this section must be reasonably designed to produce test results that reflect energy efficiency, energy use, or estimated annual operating cost of a given type of covered equipment during a representative average use cycle (as determined by DOE) and requires that test procedures not be unduly burdensome to conduct. (42 U.S.C. 6314(a)(2))
EPCA generally requires that, at least once every seven years, DOE evaluate test procedures for each type of covered equipment, including CWAFs, to determine whether amended test procedures would more accurately or fully comply with the requirements for the test procedures to not be unduly burdensome to conduct and be reasonably designed to produce test results that reflect energy efficiency, energy use, and estimated operating costs during a representative average use cycle. (42 U.S.C. 6314(a)(1)-(3)) DOE refers to these provisions as the “lookback” provisions and rulemakings conducted under these provisions as “lookback” rulemakings.
Specific to certain commercial equipment, including CWAFs, EPCA required that the initial test procedures for this equipment be those generally accepted industry testing procedures or rating procedures developed or recognized by AHRI or ASHRAE, as referenced in ASHRAE Standard 90.1, “Energy Standard for Buildings Except Low-Rise Residential Buildings” (“ASHRAE Standard 90.1”), that were in effect on June 30, 1992. (42 U.S.C. 6314(a)(4)(A)) Further, if such an industry test procedure is amended, DOE must update its test procedure to be consistent with the amended industry test procedure unless DOE determines, by rule published in the
Whether pursuant to the lookback provision or the trigger provision, if DOE determines that a test procedure amendment is warranted, EPCA requires that the Department publish proposed test procedures in the
The purpose of energy conservation standards issued under EPCA is to reduce energy use by improving the energy efficiency of covered products and equipment. (
Representative average use cycles for covered products and equipment can also change over time as DOE's understanding of how the product or equipment is used in the field improves, consumer habits change, or technologies improve. For example, DOE recently issued an amended test procedure for air-cooled commercial package air conditioners and heat pumps that reflects how the representative average use cycle for this equipment has changed over time. 89 FR 43986 (May 20, 2024). DOE adopted this new test procedure for air-cooled commercial air conditioners and heat pumps with the
Having determined a representative average use cycle for a covered product or equipment, the next step in EPCA's energy conservation standards rulemaking process is to prescribe a test procedure that is reasonably designed to produce test results that measure energy use of the covered product or equipment for that representative average use cycle and that is not unduly burdensome to conduct. (42 U.S.C. 6293(b)(3); 42 U.S.C. 6314(a)(2)) For example, when Congress required DOE to include standby and off mode energy use in standards for covered products, it first directed DOE to amend test procedures for all covered products to include provisions for measuring standby and off mode energy use. (42 U.S.C. 6295(gg)(2)(A)) Congress then directed DOE to use these amended test procedures when prescribing new or amended standards that incorporate standby and off mode energy use. (42 U.S.C. 6295(gg)(3)(A)) As the new standards would be based on a different representative use cycle,
Under EPCA's lookback provision, DOE initiated a test procedure rulemaking for CWAFs by publishing a request for information (“RFI”) in the
DOE subsequently published a notice of proposed rulemaking (“NOPR”) for the CWAFs test procedure in the
The February 2022 NOPR had a 60-day comment period and DOE held a webinar public meeting on March 29, 2022. As directed by the remand order from the Fourth Circuit, this document considers whether the amended industry test procedure fails to satisfy the applicable statutory requirements. In this document, DOE focuses on two discrete issues related to whether the amended industry test procedure is reasonably designed to product test results that reflect energy use during a representative average use cyle: the lack of jacket loss and part-load testing provisions in the amended industry test procedure. DOE believes the comment period provided for in the
Following publication of the February 2022 NOPR, the latest update to ASHRAE Standard 90.1 was released in January 2023 (“ASHRAE Standard 90.1-2022”). ASHRAE Standard 90.1-2022 references CSA/ANSI Z21.47-2021,
On June 2, 2023, DOE published a test procedure final rule for CWAFs. 88 FR 36217 (“June 2023 Final Rule”). In the June 2023 Final Rule, DOE amended the current test procedure for TE in appendix A and incorporated by reference the latest industry test procedures referenced in ASHRAE Standard 90.1-2022. The amendments to the industry test procedure were relatively minor and not based on any updates to the representative average use cycle for CWAFs. Rather, they were clarifications to the existing test procedure intended to improve clarity and help with the execution of the current test procedure. DOE also finalized the proposed appendix B test procedure that is based on an updated representative average use cycle that includes jacket losses and part-load operation. Similar to other rulemakings
Following publication of the June 2023 Final Rule, the Air-Conditioning, Heating, and Refrigeration Institute (“AHRI”) filed a petition for review of the final rule in the United States Court of Appeals for the Fourth Circuit on August 1, 2023. In its opening brief, AHRI argued that DOE failed to provide notice and an opportunity for comment after being triggered by the ASHRAE Standard 90.1-2022 publication prior to publishing the June 2023 Final Rule; DOE did not undertake the required analysis under 42 U.S.C. 6314(a)(4)(B); and that if DOE had conducted the correct analysis under 42 U.S.C. 6314(a)(4)(B), it would necessarily have concluded that it lacked clear and convincing evidence that the industry test procedure did not meet the statutory requirements.
On February 6, 2024, the Fourth Circuit granted the Department's motion for voluntary remand. In its order, the Court granted DOE's motion for voluntary remand to clarify that, in this particular circumstance, where ASHRAE published an amended industry test procedure during the pendency of a rulemaking under the 7-year lookback provision, the Department will solicit public comment prior to making: (1) a final determination that the test procedure in appendix B for the TE2 metric is consistent with the amended industry test procedure; or (2) a final determination, supported by clear and convincing evidence, that the industry test procedure fails to satisfy the statutory requirements.
DOE is publishing this document in accordance with the order from the Fourth Circuit. Specifically, DOE is presenting its tentative determination, supported by clear and convincing evidence, that the industry test procedure is not reasonably designed to produce test results that reflect energy efficiency during a representative average use cycle that, as determined by DOE, includes jacket losses and part-load operation. DOE requests public comment on this tentative determination.
As discussed, EPCA requires that if the industry test procedure for CWAFs is amended, DOE must update its test procedure to be consistent with the amended industry test procedure unless DOE determines, by rule published in the
In the June 2023 Final Rule, DOE considered that the existing test procedure and standards were based on a representative average use cycle that did not include consideration of jacket losses or part-load performance. 88 FR 36217, 36223-36227. CWAFs lose energy to the environment through jacket losses and are capable of and do operate differently under part-load conditions. As a result, DOE determined in the June 2023 Final Rule that jacket losses and part-load performance can contribute significantly to overall equipment energy use and should be part of the representative average use cycle for CWAFs.
As discussed previously, the industry test procedure, which is referenced in appendix A and is used for determining compliance with the current energy conservation standards, is based on a representative average use cycle that assumes CWAFs only operate at 100 percent capacity and that energy is only lost through flue exhaust gases. As discussed previously, these assumptions are an over-simplification of how CWAFs operate in the field. In this document, DOE evaluates the industry test procedure in the context of the ASHRAE trigger provisions and presents DOE's tentative determination, supported by clear and convincing evidence, that the industry test procedure does not satisfy all of the criteria in 42 U.S.C. 6314(a)(2) and (3). Specifically, DOE has tentatively determined that the industry test procedure is not reasonably designed to produce test results which reflect energy efficiency during a representative average use cycle that, as determined by DOE, includes jacket losses and part-load operation. As such, DOE's adoption of the appendix B test procedure, which DOE determined met the applicable statutory criteria in the June 2023 Final Rule, is consistent with the ASHRAE
As explained in more detail in the following sections, DOE estimates that the test procedure for TE2 could produce a result that is between 3.5 percent lower (in a model with high jacket loss and poor part-load performance) to 1 percent higher (in a model with negligible jacket loss and good part-load performance) than the industry test procedure because the TE2 metric includes jacket loss and part-load performance. This variation in efficiency is significant. For example, when DOE last amended the standards for gas-fired CWAFs, the minimum required efficiency went from 80 to 81 percent, which DOE determined would result in significant additional conservation of energy. 81 FR 2420, 2430. Further, the average life-cycle cost savings to a consumer from that 1 percent increase in efficiency was $284.
As discussed, the current energy efficiency metric for CWAFs is TE. 10 CFR 431.77. TE for a CWAF is defined in 10 CFR 431.72 as 100 percent minus the percent flue loss and is determined using the test procedure in appendix A. Appendix A and the industry test procedure produce results that are essentially a measure of combustion efficiency. However, the energy efficiency of CWAFs in the field is influenced by factors in addition to combustion efficiency (
While manufacturers currently complying with the ASHRAE Standard 90.1 requirements would have to limit jacket losses so as not to exceed 0.75 percent of the input rating, DOE notes that because the jacket loss percentage would be multiplied by the jacket loss factor for weatherized CWAFs designed to be installed outdoors (which represent the majority of CWAFs on the market and which have a jacket loss factor of 3.3), a jacket loss of 0.75 percent could result in a difference of nearly 2.5 percent as compared to a unit with negligible jacket losses. As discussed previously, even a 1 percent difference in efficiency is significant both in terms of the national benefits of energy conservation standards and benefits to individual consumers.
DOE has reviewed the current CWAF market and found that the vast majority of CWAFs have two or more stages of heating. DOE notes that CWAFs with two or more stages can operate at reduced firing rates to meet the building load. Part-load performance refers to the efficiency of the CWAF when operating at a reduced firing rate (as opposed to full-load performance which reflects the efficiency when operating at the maximum firing rate).
Under the appendix A test procedure, TE reflects the efficiency of the CWAF when firing at the maximum input rate (
In previous testing of similar products, DOE has observed that the efficiency when operating at the reduced input rate can be as much as 2 percent higher or lower than the efficiency when operating at the maximum input rate.
The potential difference in CWAF efficiency measured under the industry test procedure and the appendix B test procedure is an excellent example of why Congress updated representative use cycles for covered products to include standby and off mode energy use in new or amended energy conservation standards and why stakeholders, including manufacturers, asked DOE to update the representative average use cycle for air-cooled commercial air conditioners and heat pumps—consumers and manufacturers are both better off when DOE test procedures and energy conservation standards capture more energy use in the field. For example, as discussed previously, a CWAF with a TE of 81 percent as measured by the industry test procedure could, depending on jacket losses and part-load operation, have an actual range of efficiencies from 77.5 to 82 percent using the appendix B test procedure for TE2. That is a significant difference in efficiency and corresponds to a significant difference in fuel costs over the lifetime of the CWAF, which is important information for consumers. The industry test procedure also does not allow manufacturers to fully differentiate their products in the market. For example, under the industry test procedure, a manufacturer with a line of CWAF models with well-insulated jackets has no way to advertise their improved efficiency in the market. Under the industry test procedure, these models will have the same advertised efficiency as similar models that lack insulation and have higher jacket losses.
Having determined that any future, amended standards for CWAFs should be based on a representative average use cycle that includes jacket losses and part-load operation, DOE adopted the appendix B test procedure in the June 2023 Final Rule. The appendix B test procedure contains specific provisions for measuring jacket losses and energy use during part-load operation and will be used by DOE to evaluate potential amended standards for CWAFs. Use of the appendix B test procedure by manufacturers would not be required until such time as compliance is required with amended energy conservation standards based on the new representative average use cycle, should DOE adopt such standards.
In this document, DOE evaluated whether the industry test procedure is reasonably designed to produce test results which reflect energy use during a representative average use cycle that, as determined by DOE, includes jacket losses and part-load operation. Unlike the appendix B test procedure, the industry test procedure does not have provisions for calculating jacket losses and changes in energy efficiency due to part-load operation. As discussed previously, this results in the industry test procedure producing test results that do not account for significant variations in energy use across different CWAF models. As a result, DOE has tentatively determined, supported by clear and convincing evidence, that the industry test procedure is not reasonably designed to produce test results which reflect energy efficiency during a representative average use cycle. DOE requests comment on this tentative determination.
DOE has concluded that the determinations made pursuant to the various procedural requirements applicable to the June 2023 Final Rule remain unchanged for this notification of tentative determination. These determinations are set forth in the June 2023 Final Rule. 88 FR 36217, 36230-36233. DOE is publishing this document to present its tentative determination, supported by clear and convincing evidence, that the industry test procedure would not provide test results that are representative of an average use cycle for the TE2 metric, and to seek comment from interested parties.
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The Secretary of Energy has approved publication of this notification of tentative determination and request for comment.
This document of the Department of Energy was signed on December 13, 2024, by Jeffrey Marootian, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
National Credit Union Administration (NCUA).
Final rule.
The NCUA Board (Board) is issuing this final rule to further strengthen succession planning efforts for all consumer federally insured credit unions (FICUs). This final rule requires that a FICU board of directors establish a written succession plan that addresses specified positions and contains certain information. In addition, the board of directors is required to regularly review the succession plan. The final rule also requires that newly appointed members of the board of directors have a working familiarity with the succession plan no later than six months after appointment. The final rule follows publication of a July 25, 2024, proposed rule and takes into consideration the public comments received on the proposed rule. In response to comments, the Board has amended the proposal to provide that a credit union board must review its succession plan no less than every 24 months, as opposed to the annual review that would have been required under the proposed rule. The Board has also revised the proposed rule by removing loan officers, credit committee members, and supervisory committee members from the list of FICU officials that must be covered by the succession plans. In addition, non-substantive changes have been made to the wording used in the list of covered officials for purposes of clarity. The final rule also streamlines the required contents of the succession plans and no longer requires that deviations from approved succession plans be documented in the FICU board's meeting minutes. Further, to help ensure that FICUs have the necessary time to develop their succession plans, the Board is delaying the effective date of the final rule until January 1, 2026.
This final rule is effective on January 1, 2026.
At its July 18, 2024, meeting, the Board approved a proposed rule to address succession planning at FICUs. The proposed rule was published in the
Under the July 25, 2024, proposed rule a FICU board of directors would have been required to establish a written succession plan that addresses specified positions and contains certain information. In addition, the board of directors would have been required to review the succession plan in accordance with an established schedule, but no less than annually. The proposed rule would also have required that newly appointed members of the board of directors have a working familiarity with the FICU's succession plan no later than six months after appointment. Interested readers are referred to the preamble of the proposed rule for additional details regarding the proposed regulatory amendments.
Two ongoing factors highlighted the need for rulemaking on succession planning. The long-running trend of consolidation across all depository institutions has remained relatively constant across all economic cycles for more than three decades. Voluntary mergers can be used to create economies of scale to offer more or better products and services to FICU members. However, the Board is also aware of numerous instances in recent years where FICUs merged because of a lack of succession planning. More emphasis on succession planning would help reduce the number of such mergers.
Another reason for a heightened focus on succession planning are the ongoing retirements of the “Baby Boomer” generation (individuals born between 1946 and 1964). According to some sources, approximately 10 percent of credit union chief executive officers were expected to retire between 2019 and 2021.
Given the importance of the topic, the NCUA has taken several steps to strengthen current succession planning efforts of FICUs. For example, in March 2022 the NCUA issued Letter to Credit Unions 22-CU-05,
This final rule follows publication of the July 25, 2024, proposed rule and takes into consideration the public comments received on the proposed rule. In this final rule, the Board has incorporated the following amendments to the July 25, 2024, proposal:
1. In response to public comments, the final rule provides that a board must review its succession plan no less than every 24 months, as opposed to the annual review that would have been required under the proposed rule.
2. Also in response to public comments, the Board has revised the proposed rule by removing loan officers, credit committee members, and supervisory committee members from the list of FICU officials who must be covered by the succession plans.
3. In addition, non-substantive changes have been made to the wording used in the list of covered officials for purposes of clarity. Specifically, the proposed rule listed “management officials” (as defined in the model FCU bylaws) and the “senior executive officers” identified in 12 CFR 701.14(b)(2). Given the potential overlap between these two categories of officials, the final rule merges their listing in a single paragraph of the regulation. The final rule also simplifies the regulatory text by cross referencing to § 701.14(b)(2), rather than listing the senior executive officers.
4. The final rule also streamlines the required contents of the succession plans. Specifically, the rule no longer specifies that a succession plan must address unexpected or temporary vacancies in covered positions. Although the Board encourages a FICU to consider these types of vacancies in its plan, it believes FICUs, and not the NCUA, are best positioned to determine how much detail is necessary to address the required plan elements.
5. The final rule no longer requires that deviations from approved succession plans be documented in the FICU board's meeting minutes.
6. The final rule also makes a few technical, non-substantive, edits for clarity and precision of language.
The final rule otherwise adopts the proposed regulatory requirements. FICUs are reminded that succession plans should include an estimate of the budgetary impacts of executing the succession plan, including costs associated with new hires, such as any hiring of recruitment firms and any increased compensation packages for new hires. Credit unions are not required to have an exact figure for any such anticipated costs, but at a minimum should provide an estimate to allow for better planning.
To help ensure that FICUs have the necessary time to develop their succession plans, the Board is delaying the effective date of the final rule until January 1, 2026. This rule will be reapproved three years after its effective date for a term of the Board's choosing.
The comment period on the proposed rule closed on September 23, 2024. The NCUA received 187 public comments on the proposal. Comments were received from individual FICUs, state and regional credit union organizations, credit union trade organizations, credit union consulting services providers, and individuals. Approximately 116 of the comments were form letters with nearly identical wording. The issues raised in the form letters were similar to those made in many of the other comment letters. This section of the preamble summarizes the significant issues raised by the commenters and the Board's responses to these comments.
The majority of commenters, while acknowledging the importance of succession planning and agreeing with the intent of the proposed rule, raised concerns about the need for succession planning regulations, as well as some of the specifics of the proposed regulatory amendments.
As discussed in greater detail in the following paragraphs, the large majority of the commenters questioned the need for succession planning regulations. Some of these commenters objected that the NCUA was overstepping its regulatory authority by issuing regulations on internal management matters best left to credit union discretion. Other commenters wrote that the NCUA already has tools capable of addressing succession planning, or that the topic could be better addressed through non-regulatory guidance. These
A majority of the commenters also questioned the data cited in the preamble of the proposed rule as justification for the rulemaking. These commenters objected that the data was stale, and that more recent data did not seem to support the need for succession planning regulations to prevent FICU consolidations. The commenters also wrote that the NCUA had underestimated the time and resources required for complying with the proposed requirements, and that the rule would impose an undue compliance burden. Many commenters wrote that the burden of complying with the rule would actually increase the number of consolidations. Still others wrote that the NCUA's goal of reducing FICU consolidations was misguided.
With regard to the specific amendments, many commenters objected to the list of officials covered by the succession plans, writing that it was overly inclusive for the stated purposes of the rulemaking. Other commenters were concerned about the possibility that succession plans might be publicly posted, potentially raising privacy or age-discrimination issues. Some commenters wrote that requiring boards to review their succession plans at least annually was unnecessarily prescriptive. Commenters also expressed concerns about the proposed board education requirements and requested clarification of other provisions.
However, the Board does not agree that these codified guidelines are a suitable alternative to this final rule. For one thing, the guidelines are non-regulatory in nature and therefore do not establish the enforceable standards that, as discussed in the preceding responses, the Board has determined are necessary for succession planning. Further, the guidelines are broader in scope than, and only tangentially related to, succession planning. The guidelines are intended to ensure the continued operations of a FICU in response to an external, unforeseen, and hopefully infrequent event, whereas succession planning is meant to address the ongoing retention and recruitment
The commenters also objected to the preamble language stating that the 2014 findings had been corroborated by industry participants.
The fact that some of the mergers included in the NCUA's 2014 analysis occurred during the global financial crisis in no way diminishes the validity of the study. Indeed, the analysis acknowledges that the FICU's weak financial condition was the primary or secondary cause for 78 percent of the consolidations, the largest cause for mergers during the ten-year period under review (2003 to 2012). The fact that during that same period the lack of adequate succession planning was still cited as a primary or secondary cause for 32 percent of mergers only serves to underscore the need for rulemaking in this area.
Neither does the Board believe that the NCUA's more recent analysis of mergers between 2017 and 2021 undermines the earlier study. The 2014 study specifically analyzed succession planning, while the more recent study looked at “inability to obtain officials.” While this inability could be partially due to the lack of a succession plan, it might also encompass other factors deterring potential candidates, such as the FICU's inability to offer a competitive compensation package, reputational and operational obstacles to hiring, or geographic undesirability. A succession plan is critical to addressing such factors, but it is not a guarantee, especially when the FICU is faced with a sudden or unexpected leadership vacancy. The more recent study's utility to inform this rulemaking is thus limited by the fact that it does not distinguish between those mergers occurring because of a lack of succession planning and those that happened despite the FICU's best efforts in this regard.
The Board also rejects the objections raised by the commenters regarding the news articles cited in support of the proposition that the merger “data has been corroborated by industry participants.” The commenters object to the number of mergers discussed in the articles. However, the footnote citation was included simply to illustrate the credit union industry's general recognition that a failure to plan for succession is a contributing factor in consolidations. The footnote was included to complement the data and rationale set forth in the main text of the preamble rather than as an independent data source for the rulemaking.
The Board also notes that it has taken several steps to ease the burden imposed on FICUs by the new requirements. For example, the NCUA has posted a video series on succession planning on the internet.
As noted by the commenters, the preamble to the proposed rule discussed that smaller FICUs may also benefit from seeking the assistance of larger and more sophisticated FICUs in developing and implementing their succession plans. For example, a larger FICU may provide technical expertise in the drafting of the plan or may detail personnel to temporarily fill a critical vacancy in a smaller credit union until such time as it is permanently filled. The Board recognizes the concerns raised by the commenters that such strategic partnerships between a larger and smaller FICU may sometimes lead to a merger. However, that is an individual decision that must be made by the FICUs involved, based on their specific facts and circumstances.
The estimate noted by the commenters that was provided in the proposed rule issued by another federal banking agency does not provide a useful comparison. Under its own terms, that rulemaking applies solely to covered institutions with total consolidated assets of $10 billion or more. According to the most recent quarterly data available to the NCUA, there were only 21 FICUs in this asset category as of the second quarter in 2024.
The Board is especially mindful of the burden imposed on smaller FICUs, as they may lack the resources or expertise to develop succession plans. Accordingly, smaller FICUs may especially benefit from the existing resources identified above. The NCUA's Small Credit Union and Minority Depository Institution Support Program is another available resource through which FICUs with less than $100 million in total assets and minority depository institutions of any size may seek assistance in a variety of areas, including succession planning. In addition, the Board again notes that it has developed a sample template for a succession plan that may be appropriate for smaller FICUs, though all FICUs may benefit from it. FISCUs electing to use the template should consult applicable state requirements to ensure their succession plans are consistent with any such requirements.
The CRA defines a major rule as one that has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, federal, state, or local government agencies, or geographic regions; or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. The CRA vests the ultimate decision as to whether this final rule qualifies as “major” with OMB. However, the Board does not believe that this final rule meets the definition of a “major rule” under the CRA.
While the final rule may impose some additional costs on FICUs, it is unlikely that these costs would rise to the $100 million required under the CRA definition of a “major rule.” The Board also believes that several factors mitigate the potential costs imposed on FICUs. For example, the Board is providing a sample template for a simple succession plan that may be appropriate for some FICUs. Many FICUs have already adopted succession plans, and these existing plans should already address at least some of the elements required by the final rule, thereby minimizing the cost of complying with the new requirements. As previously noted, the NCUA also offers training and other resources to aid credit unions in developing their succession plans. FICUs are also encouraged to use already existing information in preparing their plans, such as the data used to develop the recommended program to prepare for a catastrophic act. These resources should further reduce the costs of preparing succession plans.
Neither does the Board believe that the final rule meets the second and third prongs of the CRA “major rule” definition. The final rule imposes new reporting requirements that will not directly impact consumer costs for the financial products offered by FICUs. Nor are these reporting requirements likely to drive up costs for the credit union industry, governments, or geographic regions. The effects of the new requirements are also unlikely to significantly affect employment, competition, investment, or innovation, as contemplated under the CRA.
The proposed regulatory changes are designed to mitigate this risk and are consistent with the Board's statutory duty to ensure a safe and sound system of cooperative credit for its member-owners, as the proposed rule explained. Under the FCU Act, the NCUA is the chartering and supervisory authority for FCUs and the federal supervisory authority for FICUs.
In assessing compliance with this rule, the NCUA will focus on whether the FICU has developed a succession plan that addresses the elements required by the final rule and is consistent with the FICU's size and complexity. The Board emphasizes that FICUs, not the NCUA, are best positioned to assess various risks and opportunities related to succession planning. A FICU will need to make its own determinations as to how much detail is necessary to address the required plan elements and whether additional factors, besides those required by this final rule, should be considered in its succession planning process. The NCUA does not intend to micromanage a FICU's succession planning process and may issue guidance, as it deems necessary, to clarify a FICU's discretion in developing its succession plans and further assist FICU succession planning efforts.
As the preamble to the proposed rule noted, the expectation is for a FICU to develop a succession plan that is consistent with its size and complexity. Therefore, smaller FICUs are more likely to have a simple succession plan that only addresses a few key leadership positions. Larger and more sophisticated FICUs are expected to have more detailed plans. For example, smaller FICUs may have fewer board members, or have fewer staff that would qualify for the positions listed in the proposed rule for inclusion in the succession plan. Likewise, smaller FICUs are likely to have less expansive employee recruitment, development, and retention strategies.
The Board emphasizes that, contrary to the assertion made by the commenters, this final rule does not reflect a statement on the efficacy of state efforts to address succession planning. Specifically, the final rule provides that for FISCUs in states that have established succession planning requirements, the NCUA will defer to such requirements to the extent no conflict exists between the final rule and the state requirements.
In addition, one commenter wrote that neither the preamble nor the proposed regulatory text uses the word “exempt” to describe the applicability of the rule to a FISCU in a state that addresses succession planning. Instead, the preamble uses defer, and the regulatory text is silent. The commenter recommended that, absent a total exclusion of FISCUs from the scope of the rule, the Board should provide a simplified exemption provision that exempts FISCUs in a state upon notice from the state regulator to the NCUA regional director that the state supervises succession planning by rule, guidance, or through the examination process. The commenter wrote that this approach would reduce confusion, ease administration, and presents no greater risk of material loss to the Share Insurance Fund.
The provision is intended solely as a planning aid. In the case of elected officials, such date is clearly the expiration of the incumbent's term. However, the expected vacancy date for non-elected officials can be less clear. The final rule does not require the FICU use a specific date, but suggests some possible proxies, including the individual's anticipated retirement date or announced departure date. A credit union can also note that a retirement or departure date is unknown. The decision of what to reflect for the date is at the FICU's discretion.
The Board emphasizes that inclusion of any known or estimated retirement or departure date is not intended to create a requirement that an individual will retire or otherwise vacate a position on a specific date. The Board, therefore, understands that these dates may evolve. Nevertheless, the inclusion of a specific or approximate date will
Despite their differing recommendations, almost all the commenters writing on this topic suggested that loan officers and assistant managers be excluded from the list. Several of these commenters wrote that larger FICUs may have hundreds of loan officers involved in the daily review of loans. The commenters wrote that, given the decentralized lending structure of many large FICUs, there is likely minimal risk to the ability to serve members if a loan officer vacancy occurs. The commenters wrote the risk is even less for assistant management officials, who are not crucial to a FICU's continuity of operations.
As noted in a preceding response, FICUs may include within the scope of their plans “other personnel the board of directors deems critical given the [FICU's] size, complexity, or risk of operations.”
The Regulatory Flexibility Act
The final rule requires that a FICU board of directors establish, and comply with, a written succession plan that addresses certain specified positions and contains specified elements. In addition, the board of directors will be required to review the succession plan no less than every 24 months. These requirements may impose some cost on FICUs. However, the NCUA believes several factors mitigate the potential costs, especially for small FICUs with assets of less than $100 million.
First, a FICU is expected to develop a succession plan that is consistent with its size and complexity. Therefore, small FICUs may have a simple succession plan that is less costly to prepare than would be the case for larger and more complex FICUs. Further, in recognition that smaller FICUs may lack the resources or expertise to develop succession plans, the Board is providing a sample template for a simple succession plan that may be appropriate for these FICUs. The Board is also aware that many FICUs, including small FICUs, have already adopted succession plans. Many of these existing plans should already address, either partially or in their entirety, the elements that would be required by the proposed rule. This could minimize the burden of complying with the new requirements.
In response to comments, the Board has narrowed the list of FICU officials that must be covered by the succession plans. This should further minimize burden by enabling FICUs to develop more tailored succession plans that reflect their unique circumstances. Further, the Board is delaying the effective date of the final rule until January 1, 2026, which will provide additional time to make any operational changes or resource allocations necessary for development of the succession plans.
The NCUA also offers training and other resources to aid credit unions in developing their succession plans. For example, the NCUA has posted a video series on succession planning on the internet. The NCUA's Small Credit Union and Minority Depository Institution Support Program is an available succession planning resource for FICUs with less than $100 million in total assets and minority depository institutions of any size. Smaller FICUs are also encouraged to seek assistance from larger or more sophisticated FICUs in the development of the required succession plans.
Accordingly, the NCUA certifies the final rule will not have a significant economic impact on a substantial number of small credit unions.
The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)
As required by SBREFA, the NCUA has submitted this final rule to OMB for it to determine if the final rule is a “major rule” for purposes of SBREFA. The NCUA also will file appropriate reports with Congress and the GAO so this rule may be reviewed.
The Paperwork Reduction Act of 1995 (PRA) applies to rulemaking in which an agency creates a new or amends existing information collection requirements.
The final rule establishes new information collections in the form of succession policies and plans. The NCUA estimates a total annual burden of 46,750 hours as follows:
•
•
•
• Estimated number of responses per respondent: 1.
•
•
•
The NCUA addressed comments on the proposed PRA burden estimate under section II. Discussion of Public Comments. In accordance with the PRA, the information collection requirements included in this final rule have been submitted to OMB for approval under control number 3133-NEW.
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. The NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. This final rule applies to FCUs and to FISCUs. By law, FISCUs are already subject to numerous provisions of NCUA's rules, based on the agency's role as the insurer of member share accounts and the significant interest NCUA has in the safety and soundness of their operations. The rulemaking may, therefore, have an occasional direct effect on the states, the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
The NCUA has determined that this final rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.
Credit, Credit unions, Reporting and recordkeeping requirements.
Bank deposit insurance, Credit, Credit unions, Reporting and recordkeeping requirements.
By the National Credit Union Administration Board, this 17th day of December 2024.
For the reasons stated in the preamble, the NCUA Board amends 12 CFR parts 701 and 741, as follows:
12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 1782, 1784, 1785, 1786, 1787, 1788, 1789. Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 15 U.S.C. 1601
The addition and revision to read as follows:
(b) * * *
(3) At the time of election or appointment, or within a reasonable time thereafter, not to exceed six months, have at least a working familiarity with, and to ask, as appropriate, substantive questions of management and the internal and external auditors of:
(i) Basic finance and accounting practices, including the ability to read and understand the Federal credit union's balance sheet and income statement; and
(ii) The Federal credit union's succession plan established pursuant to paragraph (e) of this section.
(e)
(2)
(i) Members of the board of directors;
(ii) Management officials and assistant management officials, as those terms are defined in Appendix A, if provided for in the federal credit union's bylaws, and, to the extent not already covered, the senior executive officers identified in § 701.14(b)(2); and
(iii) Any other personnel the board of directors deems critical given the federal credit union's size, complexity, or risk of operations. This includes new positions that may be required due to planned changes in operations, supervisory landscape, or corporate structure.
(3)
(i) The title for each covered position and the expiration of the incumbent's term (if serving in a term-limited capacity) or other anticipated vacancy date if known (such as the incumbent's retirement eligibility date or announced departure date).
(ii) The federal credit union's plan for permanently filling vacancies for each of the positions.
(iii) The federal credit union's strategy for recruiting candidates with the potential to assume each of the positions.The strategy must consider how the selection and diversity of skills among the employees covered by the succession plan collectively and individually promotes the safe and sound operation of the federal credit union.
(4)
(i) Approve a written succession plan that meets the requirements of paragraphs (e)(2) and (e)(3) of this section; and
(ii) Review, and update as necessary, the succession plan in accordance with a schedule established by the board of directors but no less than every 24 months.
12 U.S.C. 1757, 1766(a), 1781-1790, and 1790d; 31 U.S.C. 3717.
Any credit union that is insured pursuant to Title II of the Act must adhere to the requirements in § 701.4(b)(3) and (e) of this chapter, to the extent these regulatory provisions do not conflict with an applicable state requirement.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Class E airspace extending upward from 700 feet above the surface at Dubois Airport, Dubois, WY, in support of the airport's transition from visual flight rules (VFR) to instrument flight rules (IFR) operations.
Effective date 0901 UTC, February 20, 2025. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
A copy of the Notice of Proposed Rulemaking (NPRM), all comments received, this final rule, and all background material may be viewed online at
FAA Order JO 7400.11J, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Jeffrey Drasin, Federal Aviation Administration, Western Service Center, Operations Support Group, 2200 S. 216th Street, Des Moines, WA 98198; telephone (206) 231-2248.
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 establishes Class E airspace to support IFR operations at Dubois Airport, Dubois, WY.
The FAA published a notice of proposed rulemaking for Docket No. FAA-2024-2087 in the
Class E5 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
FAA Order JO 7400.11J lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.
This action amends 14 CFR part 71 by establishing Class E airspace extending upward from 700 feet above the surface at Dubois Airport, Dubois, WY, in support of the airport's forthcoming transition from VFR to IFR operations.
This airspace extends 8.2 miles southeast and 4.5 miles north and northwest of the airport. The configuration is designed to contain departing and missed approach IFR operations until reaching 1,200 feet above the surface and arriving IFR operations below 1,500 feet.
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.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p.389.
That airspace extending upward from 700 feet above the surface within 1.9 miles on either side of the 117° bearing extending from the airport to 8.2 miles southeast, and within 4.8 miles northeast and 1.9 miles southwest of the 297° bearing extending from the airport to 4.5 miles northwest.
Tennessee Valley Authority.
Final rule.
The Tennessee Valley Authority (TVA) is publishing a final rule to amend its regulations that govern floating cabins located on the Tennessee River System.
This final rule is effective January 27, 2025.
David B. Harrell, 865-632-1327,
This final rule is promulgated under the authority of the TVA Act, as amended, 16 U.S.C. 831
TVA is a multi-purpose federal agency that has been charged by Congress with promoting the wise use and conservation of the resources of the Tennessee Valley region, including the Tennessee River System. In carrying out this mission, TVA operates a system of dams and reservoirs on the Tennessee River and its tributaries for the purposes of navigation, flood control, and power production. Consistent with those purposes, TVA uses the system to improve water quality and water supply and to provide a wide range of public benefits including recreation.
To promote the unified development and regulation of the Tennessee River System, Congress directed TVA to approve obstructions across, along, or in the river system under Section 26a of the TVA Act. “Obstruction” is a broad term that includes, by way of example, boat docks, piers, boathouses, buoys, floats, boat launching ramps, fills, water intakes, devices for discharging effluents, bridges, aerial cables, culverts, pipelines, fish attractors, shoreline stabilization projects, channel excavations, and floating cabins. TVA also owns, as agent for the United States, much of the shoreland and inundated land along and under its reservoir system.
Since 1971, TVA has used its Section 26a authority to prohibit the mooring on the Tennessee River System of new floating cabins (formerly nonnavigable houseboats) that are designed and used primarily for habitation and not for water transportation. In particular, TVA amended its regulations in 1971 to prohibit the mooring or anchoring of new nonnavigable houseboats except for those in existence before November 21, 1971. Since 1971, TVA has made minor changes to its regulations affecting nonnavigable houseboats, including in 1978 when TVA prohibited mooring of nonnavigable houseboats on the Tennessee River System except for those in existence on or before February 15, 1978. Effective October 1, 2018, TVA updated its regulations to change the terminology to floating cabins (rather than nonnavigable houseboats) and prohibit new floating cabins that did not exist on the Tennessee River System on or before December 16, 2016.
Despite over 40 years of regulation related to floating cabins, the number of floating cabins on the Tennessee River System continued to increase. In determining what action to take with respect to floating cabins, TVA prepared an Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act. This EIS assessed the environmental and socioeconomic impacts of different policies to address the proliferation of floating cabins on the Tennessee River System. TVA released a draft of this EIS for public comment in June 2015 and held four public meetings and a webinar to provide information about its analyses and to facilitate public involvement. The final EIS and associated documents can be found at
After considering the comments received during the EIS process and the analyses of impacts, TVA identified as its preferred policy one that establishes standards to ensure safer mooring, electrical connections, and protection of water quality. Under the preferred policy, the mooring of new floating cabins would be prohibited on the Tennessee River System. The preferred policy would have required all existing floating cabins, including nonnavigable houseboats, to be removed from the Tennessee River System by January 1, 2036, and be subject to a regulatory program in the interim. On May 5, 2016, the TVA Board of Directors adopted the preferred policy, except the Board extended the removal date to May 5, 2046.
On December 16, 2016, Congress enacted the Water Infrastructure Improvements for the Nation Act of 2016 (WIIN Act). Section 5003 related to floating cabins and amended the TVA Act to include Section 9b (16 U.S.C. 831h-3). This new section of the TVA Act provides that TVA may approve and allow the use of floating cabins on waters under the jurisdiction of TVA as of December 16, 2016, if the floating cabin is maintained to reasonable health, safety, and environmental standards as required by the TVA Board of Directors and if the owner pays a compliance fee if assessed by TVA. The WIIN Act stipulates that TVA may not require the removal of a floating cabin that was located on the Tennessee River System as of December 16, 2016: (1) for a period of 15 years if it was granted a permit by TVA before enactment, or (2) for a period of 5 years if it was not granted a permit by TVA before enactment. It further stipulates that TVA
TVA published “Phase I” rule amendments for floating cabins that became effective on October 1, 2018. These amendments clarified the types of structures that TVA will regulate as a floating cabin and prohibited new floating cabins from mooring on the Tennessee River System after December 16, 2016. TVA estimates that approximately 2,200 floating cabins were moored on the Tennessee River System on December 16, 2016.
TVA published “Phase II” rule amendments for floating cabins that became effective on October 12, 2021. These amendments included health, safety, environmental, and permitting standards that apply to all floating cabins and a deadline by which floating cabin owners were to apply to TVA for a Section 26a permit. A diverse stakeholder group composed of 18 members advised TVA on the development and drafting of these standards. Owners of floating cabins were given until October 1, 2024, to comply with the standards in TVA's regulations and submit a complete permit application that certifies compliance and includes the payment of a Section 26a permit application fee. The permit application submission date of October 1, 2024, gave owners approximately three years from the effective date of the new standards to bring structures into compliance.
The final rule for floating cabins applies to all existing floating cabins, including those formerly referred to as nonnavigable houseboats originally permitted on or before February 15, 1978. All floating cabins and attached structures must comply with the standards in TVA's regulations and submit a complete Section 26a permit application that certifies compliance and includes the payment of a permit application fee by October 1, 2029. TVA will not require floating cabin owners to pay the initial permit application fee if they possess a permit in their name issued before December 16, 2016, and the structure is compliant with the terms of the permit, constructed in accordance with the permit (same dimensions, attached structures such as docks, and utility connections), and moored at the permitted location.
TVA's Section 26a regulations previously required floating cabins to comply with the standards and apply for a new permit by October 1, 2024. This final rule extends that time until October 1, 2029. TVA has encouraged floating cabin owners to bring floating cabins into compliance and then apply for a permit without delay. TVA may deny an initial application for a floating cabin if it is submitted after the deadline of October 1, 2029.
Upon submission of the application, owners of floating cabins may remain in place until TVA acts on the application. If TVA approves the application, TVA will issue a Section 26a permit to the owner. If TVA denies the application, the owner must remove the structure in accordance with Section 9b of the TVA Act and 18 CFR 1304.406.
This final rule also clarifies language on rebuilding floating cabins. Any alterations to the dimensions or approved plans for an existing floating cabin (monolithic frame or attached structure) are deemed a structural modification and require written approval from TVA.
Floating cabins can pose a threat to public safety due to unsafe electrical systems. TVA is aware that floating cabins are currently obtaining electricity from the shore via underwater cables, through onboard portable generators, and by other methods. When the final Phase II rule on floating cabins was published in 2021, TVA was not aware of any local, state, or federal entity that monitored the construction of floating cabins and enforced building codes. However, after working with multiple state agencies, it became clear that state and local entities have the ability and expertise to regulate and inspect electrical requirements for floating cabins within their jurisdiction. Separate standards in TVA's Section 26a regulations have potential to create confusion for floating cabin owners about applicable requirements.
This final rule does not change the requirement that floating cabin owners comply with all applicable federal, state, and local laws and regulations regarding electrical wiring and equipment. If a floating cabin is documented to be in violation of any federal, state, or local electrical standard or regulation by the respective regulatory agency, TVA may revoke the permit and require removal of the floating cabin from the Tennessee River System if the violation is not corrected as specified by the relevant regulatory agency in accordance with the agency's requirements. The final rule removes the separate electrical standards for floating cabins from the Section 26a regulations and removes the requirement that floating cabin owners submit a certification of compliance to TVA every even-numbered year. This appropriately recognizes that state and local agencies are best equipped to adopt and enforce electrical standards for floating cabins while reinforcing that compliance with those other agency standards is a condition of the Section 26a permit. This final rule also clarifies that applicants must provide documentation, upon TVA's request, that demonstrates the floating cabin is in compliance with applicable wastewater and electric standards. In the event that a floating cabin owner fails to provide satisfactory evidence of compliance upon request, TVA may revoke the Section 26a permit and require removal of the floating cabin from the reservoir.
In addition to the changes affecting floating cabins listed above, this final rule provides other minor amendments to the Section 26a regulations. These include minor edits for clarity and consistency in the regulations. This includes a clarification that TVA's issuance of a Section 26a permit for any proposed facility or obstruction does not mean the proposed facility or obstruction has been deemed safe by TVA. TVA is also clarifying that TVA may proceed with the review of a Section 26a application absent the submission of some of the application materials identified in 18 CFR 1304.2.
TVA published the proposed rule for public review and comment in the
On December 16, 2016, Congress enacted the Water Infrastructure Improvements for the Nation Act of 2016 (WIIN Act), which related to floating cabins and amended the TVA Act to include Section 9b. This new section of the TVA Act removed the 30-year sunset period and provided that floating cabins that were located on waters under the jurisdiction of TVA as of December 16, 2016, may remain if the floating cabin is maintained to reasonable health, safety, and environmental standards as required by TVA. The WIIN Act further stipulated that TVA may not require the removal of a floating cabin that was located on the Tennessee River System as of December 16, 2016: (1) for a period of 15 years if it was granted a permit by TVA before the WIIN Act's enactment, or (2) for a period of five years if it was not granted a permit by TVA before the WIIN Act's enactment.
TVA's Section 26a regulations include a deadline of December 31, 2031, when all unencased flotation must be removed and replaced with flotation commercially manufactured for marine use and consistent with standards defined in the regulations. This requirement applies to all water-use facilities permitted by TVA, including floating cabins.
This final rule requires floating cabin owners to comply with the regulations and apply for a permit no later than October 1, 2029. Any permit issued will be contingent upon compliance with the flotation rule by December 31, 2031. The Board sunset period no longer applies. The WIIN Act removal date for floating cabins that were not granted a permit before the WIIN Act has already passed; TVA may not require the removal of previously permitted floating cabins until December 16, 2031.
In determining what action to take with respect to floating cabins, TVA prepared an Environmental Impact Statement (EIS) in accordance with the National Environmental Policy Act. This EIS assessed the environmental and socioeconomic impacts of different policies to address the proliferation of floating cabins on the Tennessee River System. TVA released a draft of this EIS for public comment in June 2015 and held four public meetings and a webinar to provide information about its analyses and to facilitate public involvement. The final EIS and associated documents can be found at
This final rule contains no federal mandates for state, local, or tribal government or for the private sector. TVA has determined it will not have a significant annual effect of $200 million or more or result in expenditures of $200 million in any one year by state, local, or tribal governments or by the private sector. This final rule will not have a substantial direct effect on the States or Indian tribes, on the relationship between the Federal Government and the States or Indian tribes, or on the distribution of power and responsibilities between the Federal Government and States or Indian tribes. Nor will this final rule have concerns for environmental health or safety risks that may disproportionately affect children, have significant effect on the supply, distribution, or use of energy, or disproportionally impact low-income or minority populations. Unified development and regulation of the Tennessee River System through an approval process for obstructions across, along, or in the river system and management of United States-owned land entrusted to TVA are federal functions for which TVA is responsible under the TVA Act, as amended. In general, this final rule updates TVA's regulations relating to the standards that
Under the Regulatory Flexibility Act, 5 U.S.C. 605, TVA is required to prepare a regulatory flexibility analysis unless the head of the agency certifies that the proposal will not have a significant economic impact on a substantial number of small entities. TVA's Chief Executive Officer has certified that this rule will not have a significant economic impact on a substantial number of small entities. The statute defines “small entity” as a “small business,” “small organization” (further defined as a “not-for-profit enterprise”), or a “small governmental jurisdiction.” Most floating cabins are owned by individuals and not businesses, not-for-profit enterprises, or small governmental jurisdictions, and therefore relatively few “small entities” will be affected by TVA's proposal. Even if the final rule tangentially impacts marinas that accommodate floating cabins, a relatively small number of marinas will be impacted. Accordingly, this rule will not have a significant impact on a substantial number of small entities; no regulatory flexibility analysis is required; and TVA's Chief Executive Officer has made the requisite certification.
This rule contains information collection requirements for registration and permitting of floating cabins, which were approved by the Office of Management and Budget (OMB) on July 31, 2024.
Administrative practice and procedure, Natural resources, Navigation (water), Rivers, Water pollution control.
For the reasons set out in the preamble, the Tennessee Valley Authority amends 18 CFR part 1304 as follows:
16 U.S.C. 831-831ee.
The revision and additions read as follows:
(b) Applications shall be submitted on TVA's online application system or addressed to the Tennessee Valley Authority, at the appropriate location as listed on the application and on TVA's website. * * *
(c) * * * TVA, in its sole discretion, may proceed with the review of an application in the absence of some materials listed in this section.
(e) TVA's issuance of a permit does not mean that TVA has determined a facility or obstruction is safe for any purpose or that TVA has any duty to make such a determination. In issuing a permit, TVA assumes no liability to the applicant or to any third party for any damages to property or personal injuries arising out of or in any way connected with applicant's construction, operation, or maintenance of the permitted facility.
The revision and addition read as follows:
* * * Existing floating cabins may remain moored on the Tennessee River System provided they remain in compliance with the rules in this part and obtain a section 26a permit from TVA issued after October 12, 2021. Existing floating cabins that do not apply for a permit by the deadline in this part or do not remain in compliance with the rules in this part are subject to the removal provisions of this part and section 9b of the TVA Act.* * *
The revisions read as follows:
(c) All floating cabins shall comply with the rules contained in this part and make application for a section 26a permit by October 1, 2029. TVA may, at its sole discretion, deny an initial application for a floating cabin submitted after this date. Unpermitted structures are subject to the removal provisions of this part and section 9b of the TVA Act.
(h) * * *
(2) Any alterations to the dimensions or approved plans for an existing floating cabin (monolithic frame or attached structure) shall be deemed a structural modification and shall require prior written approval from TVA. All expansions in length, width, or height are prohibited, except under the following circumstances if approved in writing in advance by TVA. Structural modifications to attached structures are subject to § 1304.101(i).
(3) Owners must submit an application to TVA sixty (60) days in advance of proposed rebuilding of an entire or significant portion of a floating cabin (monolithic frame or attached structures). The owner shall not begin construction until prior written acknowledgment from TVA is received. Plans for removal of the existing floating cabin or portions to be rebuilt shall be acknowledged in writing by TVA before removal occurs, and the removal shall be at the owner's expense before construction of the rebuild may begin. The owner shall provide evidence of approval from the marina operator to rebuild within the approved harbor limits of a commercial marina. TVA may require a new permit for the proposed rebuilding. Construction of the rebuilt floating cabin must be completed within 18 months. The rebuilt monolithic frame of the floating cabin shall match the exact configuration and dimensions (length, width, and height) of both the total monolithic frame and the enclosed and open space as approved by TVA; attached structures are subject to § 1304.101(i). The footprint of the attached structures shall not be incorporated into the footprint of the monolithic frame of the floating cabin.
(i) * * *
(3) Attached structures shall not exceed 14 feet in height from the lowest floor level, shall not be enclosed, shall
The revisions read as follows:
(a)
(d)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary moving security zone for navigable waters within a 500-yard radius of certain vessels carrying cargo requiring an elevated level of security in the Corpus Christi Ship Channel. The temporary security zone is needed to protect the vessels, the cargo, and the surrounding waterway from terrorist acts, sabotage, or other subversive acts, accidents, or events of a similar nature. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port, Sector Corpus Christi or a designated representative.
For the purposes of enforcement, actual notice will be used from December 20, 2024, until December 26, 2024. This rule is effective without actual notice from December 26, 2024 until December 27, 2024.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions about this rule, call or email Lieutenant Tim Cardenas, Sector Corpus Christi Waterways Management Division, U.S. Coast Guard; telephone 361-939-5130, email
The Coast Guard is issuing this temporary rule under the authority in 5 U.S.C. 553(b)(B). This 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.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. The Coast Guard was notified of these vessels' transit and cargo on December 12, 2024. There is insufficient time to publish an NPRM before this operation because the security zone must be established by December 20, 2024, to ensure security of the vessels and the surrounding area and there is insufficient time to provide a reasonable comment period and to consider those comments before issuing the rule.
Under 5 U.S.C. 553(d)(3), the Coast Guard also finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this security zone regulation under the authority in 46 U.S.C. 70051 and 70124. The Captain of the Port, Sector Corpus Christi (COTP) has determined that potential hazards are associated with the transit of the Motor Vessel (M/V) ARC INDEPENDENCE. There is a security concern within a 500-yard radius of the vessel when it's loaded and transiting while loaded. This rule is needed to provide for the safety and security of the vessel, its cargo, and the surrounding waterway from terrorist acts, sabotage, or other subversive acts, accidents, or other events of a similar nature while the vessel is transiting within Corpus Christi, TX.
The Coast Guard is establishing a 500-yard radius, temporary, moving security zone around M/V ARC INDEPENDENCE. Other mariners and vessels will be able to identify the security zone because the M/V ARC INDEPENDENCE's name is clearly marked on its stern, and port and starboard sides. The zone for the vessel will be effective from December 20, 2024, through December 27, 2024, and will be enforced when the vessel is loaded and transiting the Corpus Christi Ship Channel. The security zone will be
No vessel or person will be permitted to enter the security zone without obtaining permission from the COTP or a designated representative. As used in this section, “designated representative” means a Coast Guard Patrol Commander, including a Coast Guard coxswain, petty officer, or other officer operating a Coast Guard vessel and a Federal, State, and local officer designated by or assisting the Captain of the Port, USCG Sector Corpus Christi (COTP) in the enforcement of the security zone. Persons or vessels desiring to enter or pass through each zone must request permission from the COTP or a designated representative on VHF-FM channel 16 or by telephone at 361-939-0450. If permission is granted, all persons and vessels must comply with the instructions of the COTP or designated representative. The COTP or a designated representative will inform the public through Broadcast Notices to Mariners and Marine Safety Information Bulletins (MSIBs) as appropriate for the enforcement times and dates for the security zone.
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 Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule is not subject to review by the Office of Management and Budget (OMB).
This regulatory action determination is based on the size, duration, and location of the security zone. This rule will impact a small, designated area of 500-yards around the moving vessel in the Corpus Christi Ship Channel as the vessel transits the channel over a period of approximately four hours or less. Most vessels will be able to move around the security zone and therefore the impediment to the movement of other vessels will be minimal. Moreover, the rule allows other vessels to seek permission to enter the zone.
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 temporary security zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
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 contact the person listed in the
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. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
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 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 a moving security zone lasting for the duration of time that the M/V ARC INDEPENDENCE is within the Corpus Christi Ship Channel while loaded with cargo. It will prohibit entry within a 500-yard radius of the M/V ARC INDEPENDENCE while the vessel is
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(c)
(2) Persons or vessels desiring to enter or pass through the zone must request permission from the COTP Sector Corpus Christi on VHF-FM channel 16 or by telephone at 361-939-0450.
(3) If permission is granted, all persons and vessels must comply with all lawful orders and directions of the COTP or the COTP's designated representative.
(d)
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is making a final determination that the St. Clair, MI sulfur dioxide (SO
This final rule is effective on January 27, 2025.
EPA has established a docket for this action under Docket ID No. EPA-R05-OAR-2020-0385. All documents in the docket are listed on the
Alexis Bender, Air and Radiation Division (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-9497,
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.
On September 26, 2024 (89 FR 78837), EPA proposed to determine that the St. Clair, MI SO
EPA is making a determination that the St. Clair nonattainment area attained the 2010 SO
This final action will address EPA's obligation under CAA section 179(c) to determine if the St. Clair Area attained the 2010 SO
This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Order 14094 (88 FR 21879, April 11, 2023).
This rule does not impose an information collection burden under the provisions of the PRA of 1995 (44 U.S.C. 3501
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
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The division of responsibility between the Federal government and the states for purposes of implementing the NAAQS is established under the CAA.
Executive Order 13175 (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by Tribal officials in the development of regulatory policies that have Tribal implications.” This action does not have Tribal implications as specified in Executive Order 13175. This action does not apply on any Indian reservation land, any other area where EPA or an Indian Tribe has demonstrated that a Tribe has jurisdiction, or non-reservation areas of Indian country. Thus, Executive Order 13175 does not apply to this action.
EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying to those regulatory actions 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 the Executive Order. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety 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. Therefore, EPA is not considering the use of any voluntary consensus standards.
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on communities with environmental justice (EJ) concerns to the greatest extent practicable and permitted by law. Executive Order 14096 (Revitalizing Our Nation's Commitment to Environmental Justice for All, 88 FR 25251, April 26, 2023) builds on and supplements E.O. 12898 and defines EJ as, among other things, the just treatment and meaningful involvement of all people, regardless of income, race, color, national origin, or Tribal affiliation, or disability in agency decision-making and other Federal activities that affect human health and the environment.”
EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898/14096 of achieving EJ for communities with EJ concerns.
This action is subject to the Congressional Review Act, and EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 24, 2025. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Sulfur dioxide.
For the reasons stated in the preamble, title 40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(e) * * *
Environmental Protection Agency (EPA).
Interim final determination.
The Environmental Protection Agency (EPA) is making an interim final determination that the California Air Resources Board (CARB) has submitted a rule and other materials on behalf of the Mojave Desert Air Quality Management District (MDAQMD) that corrects deficiencies in its Clean Air Act (CAA or “Act”) State Implementation Plan (SIP) concerning reasonably available control technology (RACT) ozone nonattainment requirements for controlling emissions of oxides of nitrogen (NO
This interim final determination is effective December 26, 2024. However, comments will be accepted on or before January 27, 2025.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2024-0563 at
La Kenya Evans-Hopper, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105; phone: (415) 972-3245; email
Throughout this document, “we,” “us,” and “our” refer to the EPA.
On June 16, 2023, the EPA issued a final rule (88 FR 39366, the “2023 final rule”) promulgating a limited approval and limited disapproval for the MDAQMD rule listed in Table 1, which was submitted by the California Air Resources Board (CARB) to the EPA for inclusion into the California SIP.
Areas classified as “Moderate” or above nonattainment for an ozone standard must implement RACT for each category of sources covered by a Control Techniques Guidelines (CTG) document as well as each major source of NO
In the 2023 final rule, we determined that although the MDAQMD rule strengthened the SIP and was largely consistent with the requirements of the CAA, the submitted rule included a deficiency that precluded our full approval of the rule into the SIP. The MDAQMD's previously submitted Rule 1157 stated, “[n]o compliance determination shall be established based on data obtained from compliance testing, including integrated sampling methods, during a start-up period or shut-down period.” This provision prohibits the use of data gathered during periods of startup and shutdown from being used for determining compliance with the applicable limit.
The EPA found that the provision was not consistent with the EPA's SSM policy and Credible Evidence Rule because it forbids the use of credible evidence (compliance testing data generated during startup and shutdown periods) in establishing violations of the applicable emissions limit. In addition, the previously submitted Rule 1157 removed the definitions of “start-up period” and “shut-down period,” making the scope of this provision unclear.
Pursuant to section 179 of the CAA and our regulations at 40 CFR part 52, the disapproval action on Rule 1157 under title I, part D started a sanctions clock for imposition of offset sanctions 18 months after the action's effective date of July 17, 2023, and highway sanctions six months later.
On September 25, 2023, the MDAQMD revised Rule 1157, and on January 10, 2024, CARB submitted it to the EPA for approval into the California SIP, as shown in Table 2 below.
On July 10, 2024, the submittal for MDAQMD Rule 1157 was deemed by operation of law to meet the completeness criteria in 40 CFR part 51 appendix V.
The revised MDAQMD Rule 1157 in Table 2 of this document is intended to address the disapproval issues in our June 16, 2023 final rule. In the Proposed Rules section of this
The EPA is providing the public with an opportunity to comment on this deferral of sanctions. If comments are submitted that change our assessment described in this interim final determination and the proposed approval of MDAQMD Rule 1157, we would take final action to lift this deferral of sanctions under 40 CFR 52.31. If no comments are submitted that change our assessment, then all sanctions and any sanction clocks triggered by our June 16, 2023 final rule would be permanently terminated on the effective date of our final approval of Rule 1157.
We are making an interim final determination to defer CAA section 179 sanctions associated with our limited disapproval action on June 16, 2023, of MDAQMD Rule 1157 with respect to the requirements of part D of title I of the CAA. This determination is based on our concurrent proposal to fully approve MDAQMD Rule 1157 which resolves the deficiencies that triggered sanctions under section 179 of the CAA.
Because the EPA has preliminarily determined that MDAQMD Rule 1157, amended on September 25, 2023, addresses the limited disapproval issues under part D of title I of the CAA identified in our 2023 final rule and the amended rule is now fully approvable, relief from sanctions should be provided as quickly as possible. Therefore, the EPA is invoking the good cause exception under the Administrative Procedure Act (APA) in not providing an opportunity for comment before this action takes effect (5 U.S.C. 553(b)(3)). However, by this action, the EPA is providing the public with a chance to comment on the EPA's determination after the effective date, and the EPA will consider any comments received in determining whether to reverse such action.
The EPA believes that notice-and-comment rulemaking before the effective date of this action is impracticable and contrary to the public interest. The EPA has reviewed the State's submittal and, through its proposed action, is indicating that it is more likely than not that the State has submitted a revision to the SIP that corrects deficiencies under part D of the Act that were the basis for the action that started the sanctions clocks. Therefore, it is not in the public interest to impose sanctions. The EPA believes that it is necessary to use the interim final rulemaking process to defer sanctions while the EPA completes its rulemaking process on the approvability of the State's submittal. Moreover, with respect to the effective date of this action, the EPA is invoking the good cause exception to the 30-day notice requirement of the APA because the purpose of this notice is to relieve a restriction (5 U.S.C. 553(d)(1)).
This action defers sanctions and imposes no additional requirements. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it proposes to approve a State program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act.
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian Tribe has demonstrated that a Tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on communities with environmental justice (EJ) concerns to the greatest extent practicable and permitted by law. Executive Order 14096 (Revitalizing Our Nation's Commitment to Environmental Justice for All, 88 FR 25251, April 26, 2023) builds on and supplements Executive Order 12898 and defines EJ as, among other things, “the just treatment and meaningful involvement of all people, regardless of income, race, color, national origin, Tribal affiliation, or disability, in agency decision-making and other Federal activities that affect human health and the environment.”
The State did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. The EPA did not perform an EJ analysis and did not consider EJ in this action. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of Executive Order 12898 of achieving EJ for communities with EJ concerns.
This action is subject to the Congressional Review Act (CRA), and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. The CRA allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and comment rulemaking procedures are impracticable, unnecessary, or contrary to the public interest (5 U.S.C. 808(2)). The EPA has made a good cause finding for this action as discussed in section II of this preamble, including the basis for that finding.
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 24, 2025. Filing a petition for reconsideration by the EPA Administrator of this action does not affect the finality of this action for the purpose of judicial review, nor does it extend the time within which petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see CAA section 307(b)(2)).
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping requirements.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notification of determination.
The Centers for Disease Control and Prevention (CDC), located within the Department of Health and Human Services (HHS), has determined that a previously excluded attenuated strain, Junín virus vaccine strain Candid No.1, has key attenuating mutations in the glycoprotein envelope at GP1 T168A and GP2 F427I. Revertants at either of these positions have increased pathogenicity and virulence. Therefore, Junín virus vaccine strain Candid No. 1 containing GP1 168T and/or GP2 427F is a select agent and is subject to the select agent and toxin regulations.
This determination is applicable as of May 3, 2024.
Daniel A. Singer, MD, MPH, FACP, Acting Director, Division of Regulatory Science and Compliance, Centers for Disease Control and Prevention, 1600 Clifton Road NE, Mailstop H21-4, Atlanta, Georgia 30329, Telephone: (404) 718-2000.
Junín virus is a negative sense, double stranded RNA virus and is the causative agent of Argentine hemorrhagic fever. Junín virus causes chronic infection in
In accordance with the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Response Act), HHS regulates biological agents and toxins that have the potential to pose a severe threat to public health and safety (42 U.S.C. 262a(a)(1)). The list of HHS select agents and toxins is provided in the HHS select agent and toxin regulations (42 CFR part 73) and Junín virus, a South American hemorrhagic fever virus, is included as a select agent (42 CFR 73.3(b)).
The HHS select agent and toxin regulations established a process by which an attenuated strain of a select biological agent that does not have the potential to pose a severe threat to public health and safety may be excluded from the requirements of the select agent and toxin regulations (42 CFR 73.3(e)). On February 7, 2003, Junín virus vaccine strain Candid No.1 was excluded from the regulations as it does not pose a significant threat to public health and safety (McKee KT Jr, Oro JG, Kuehne AI, Spisso JA, Mahlandt BG. “Candid No. 1 Argentine hemorrhagic fever vaccine protects against lethal Junín virus challenge in rhesus macaques” Intervirology. 1992: 34(3):154-63). This exclusion was granted based on the historically safe use of this strain as a vaccine against Argentine hemorrhagic fever for
As set forth under 42 CFR 73.3(e)(2), if an excluded attenuated strain is subjected to any manipulation that restores or enhances its virulence, the resulting select agent will be subject to the requirements of the regulations. CDC's Intragovernmental Select Agents and Toxins Technical Advisory Committee (ISATTAC), which comprises federal government subject-matter experts from HHS, the U.S. Department Agriculture, the Department of Homeland Security, the Environmental Protection Agency, and the Department of Defense, reviewed the data published in the study, “Restoration of virulence in the attenuated Candid No.1 vaccine virus requires reversion at both positions 168 and 427 in the envelope glycoprotein GPC” (published in the Journal of Virology [
Bureau of Land Management, Interior.
Final rule; technical corrections.
The Bureau of Land Management (BLM) is making technical corrections to regulations that published in the
Effective on December 26, 2024.
Jayme Lopez, Interagency Coordination Liaison, by phone at (520) 235-4581, or by email at
Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
BLM published FR Doc. 2024-08099, beginning on page 35634 in the
Subsequently, BLM published a correction to the final rule on June 28, 2024 (89 FR 53869), correcting its instructions for 43 CFRs 2801.5 to clarify the addition of the term “Megawatt hour (MWh) rate” instead of revising the term “Megawatt hour (MWh) rate.” However, the instructions were not updated to remove the conflicting term “Megawatt rate,” which is no longer necessary with the changes in the final rule. This correcting amendment removes the term “Megawatt rate” from § 2801.5(b).
Section 2803.10 of the final rule did not include the change to the title adding the words “or lease” as intended with the publication of the final rule. This correcting amendment revises the section title to read as, “Who may hold a grant or lease?”
Section 2804.12 in the final rule did not include the title to paragraph (j) intended for reader clarity. This correcting amendment revises paragraph (j) adding the intended title, “Complete applications:” to the paragraph.
In the final rule, § 2806.51(a) was not updated consistent with the changes of the final rule and incorrectly left regulatory text that directed readers to sections of the rule that are specific to the 2016 rule and are now incorrect and inaccurate and no longer able to be implemented. This correcting amendment revises paragraph (a) to retain the first sentence of paragraph (a) with slight revisions using the terminology of the final rule. The second and third sentences of paragraph (a) direct readers to the standard rate adjustment method and the scheduled rate adjustment method which are no longer available and were removed with the final rule.
In the final rule, instruction 28 specified § 2806.52(a) through (c) were being revised without correctly identifying the removal of § 2806.52(d). Section 2806.52(d) includes regulatory citations specific to the 2016 final rule that are now incorrect and inaccurate and no longer able to be implemented. This correcting amendment removes § 2806.52(d).
BLM also corrects § 2809.15(d)(2) by removing the colon at the end of the paragraph and adding a semicolon in its place.
Sections 2807.17 and 2807.20 of the final rule did not include the intended addition “or lease” in the titles. These section titles are revised to include the missing text to now read as, “§ 2807.17 Under what conditions may BLM suspend or terminate my grant or lease?” and “§ 2807.20 When must I amend my application, seek an amendment of my grant or lease, or obtain a new grant or lease?”
Sections 2809.13 and 2809.17 of the final rule did not include the intended section title revisions to change “offers” to read as “processes,” consistent with the changes in the regulatory text. These correcting amendments change the titles to read as “§ 2809.13 How will the BLM conduct competitive processes?” and “§ 2809.17 Will the BLM ever reject bids or re-conduct a competitive process?”
In the final rule, the title to § 2809.18 was intended to include the addition to the section title “solar and wind energy development,” consistent with the new definition of “solar and wind energy development” added to the final rule. The section now reads as, “What terms and conditions apply to a solar and wind energy development lease?” Additionally, the regulatory reference in paragraph (a) should direct readers to § 2805.11(c), not 2805.11(b), for the term of a solar and wind energy development lease. Paragraph (a) is revised, correcting the regulatory reference to read as § 2805.11(c).
Electric power, Highways and roads, Penalties, Public lands and rights-of-way, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, the BLM corrects 43 CFR part 2800 by making the following technical corrections:
43 U.S.C. 1733, 1740, 1763, 1764, and 3003.
(j) Complete applications: Your application will not be complete until you have met or addressed the requirements of this section to the satisfaction of the BLM. The BLM will notify you in writing when your application is complete.
(a) The BLM will adjust your acreage rent and capacity fee for the term of your right-of-way as described in these regulations.
(d) * * *
(2) By the close of official business hours on the day on which the BLM conducts the competitive process or such other time as the BLM may have specified in the offer notices, submit for each parcel;
(a)
This action by the Principal Deputy Assistant Secretary is taken pursuant to an existing delegation of authority.
Office of Refugee Resettlement (ORR), Administration for Children and Families (ACF), U.S. Department of Health and Human Services (HHS).
Interim final rule; correction.
ORR is correcting an interim rule (IFR) that was published in the
Effective December 27, 2024.
Toby Biswas, Director of Policy, Unaccompanied Children Bureau, Office of Refugee Resettlement, Administration for Children and Families, Department of Health and Human Services, Washington, DC, (202) 205-4440 or
In the interim final rule published November 27, 2024, there were two technical errors that are now identified and corrected in this document. The provisions in this correction document are effective as if they had been included in the document published November 27, 2024. Accordingly, the following corrections are effective December 27, 2024.
In FR Doc. 2024-27626, appearing on page 93498 in the
1. On page 93498, in the third column, the text “
2. On page 93498, in the third column, the text “
3. On page 93512, in the first column, in the first sentence of the first full paragraph, “At § 412.102(c), ORR is establishing a process for substantiated perpetrators at Tier I or Tier II to appeal of ORR's disposition” is corrected to read “At § 412.102(c), ORR is establishing a process for substantiated perpetrators at Tier I or Tier II to appeal ORR's disposition.”
4. On page 93512, in the third column, in the first full paragraph, “The ALJ will issue a written decision upholding, modifying, or reversing the ORR's disposition.” is corrected to read “The ALJ will issue a written decision upholding, modifying, or reversing ORR's disposition.”
5. On page 93512, in the third column, the text “Under § 412.102(e)(1), a substantiated perpetrator at Tier I or Tier II may request review of the ALJ's decision within 30 days of receipt of the ALJ's decision, by filing a request for review with Office of the Assistant Secretary for ACF.” is corrected to read “Under § 412.102(e)(1), a substantiated perpetrator at Tier I or Tier II may request review of the ALJ's decision within 30 days of receipt of the ALJ's decision, by filing a request for review with the Office of the Assistant Secretary for ACF.”
6. On page 93513, in the first full sentence of the first column, the text “Under § 412.102(e)(2), the Assistant Secretary has discretion, within 30 days after receiving a timely request for review of an ALJ's decision under § 412.102(e)(1), to review the ALJ's decision and to dismiss a request for review based on untimeliness or other procedural defects, or to affirm, modify, or reverse the ALJ's decision with regard to dismissal or ORR's disposition of the allegation.” is corrected to read “Under § 412.102(e)(2), the Assistant Secretary has discretion, within 30 days after receiving a timely request for review of an ALJ's decision under § 412.102(e)(1), to review the ALJ's decision to dismiss a request for review based on untimeliness or other procedural defects, and to affirm, modify, or reverse the ALJ's decision with regard to dismissal or ORR's disposition of the allegation.”
7. On page 93517, in the first column, the List of Subjects in corrected to read:
Administrative practice and procedure, Aliens, Child welfare, Reporting and recordkeeping requirements, Unaccompanied children.”
“
(c)
The corrections read as follows:
(d) * * *
(1) When a substantiated perpetrator at Tier I or Tier II appeals ORR's disposition to an ALJ pursuant to paragraph (c)(1)(i) of this section, ORR must transmit to the ALJ all of the evidence upon which the disposition was based.
(7) The ALJ shall conduct a fair and impartial hearing and de novo review to determine whether the substantiated perpetrator met their burden of establishing that, considering the totality of the evidence, there is not a preponderance of the evidence to support the substantiated allegation. The ALJ may either dismiss the case for untimeliness, withdrawal of the appeal, abandonment of the appeal, or because the individual does not have the right to appeal or because of other procedural defects, or will issue a written decision to uphold, modify, or reverse ORR's disposition.
(8) The ALJ shall serve a copy of the decision upon the parties and the Assistant Secretary for ACF. The ALJ's decision shall provide the sustained perpetrator at Tier I or Tier II and their attorney, if any, with instructions for requesting review by the Assistant Secretary for ACF. The ALJ also shall provide a copy of the decision to the alleged victim and the alleged victim's parent(s), legal guardian(s) (as appropriate), or sponsor(s). The complete record upon which the decision is based shall be made available to the Assistant Secretary
(e) * * *
(1) A substantiated perpetrator at Tier I or Tier II may request a review of the ALJ's decision within 30 days of receipt of the ALJ's decision, by filing a request for review with the Office of the Assistant Secretary for ACF.
(6) The Office of the Assistant Secretary for ACF shall serve a copy of the final decision upon the parties involved. The Office of the Assistant Secretary for ACF also shall provide a copy of the final decision issued by the Assistant Secretary, based on review of the ALJ's decision under this paragraph (e), to the alleged victim and the alleged victim's parent(s), legal guardian(s) (as appropriate), or sponsor(s).
Fish and Wildlife Service, Interior.
Temporary rule; emergency action.
We, the U.S. Fish and Wildlife Service (Service), exercise our authority pursuant to the Endangered Species Act of 1973, as amended (Act), to emergency list the blue tree monitor (
This temporary rule is effective December 26, 2024 through August 25, 2025.
This temporary rule, the species status assessment report and other materials related to this temporary rule, and the proposed rule published concurrently with this temporary rule are available on the internet at
Rachel London, Manager, Branch of Delisting and Foreign Species, Ecological Services Program, U.S. Fish and Wildlife Service, MS: ES, 5275 Leesburg Pike, Falls Church, VA 22041-3803; telephone 703-358-2171. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
On April 15, 2022, we received a petition from the Center for Biological Diversity requesting that the blue tree monitor be listed as an endangered or threatened species and that the petition be considered on an emergency basis. The Endangered Species Act of 1973, as amended (Act; 16 U.S.C. 1531
A species status assessment (SSA) team prepared an SSA report, which is currently under peer review, for the blue tree monitor. The SSA team was composed of Service biologists, in consultation with other species experts. The SSA report represents a compilation of the best scientific and commercial data available concerning the status of the species, including the impacts of past, present, and future factors (both negative and beneficial) affecting the species.
In accordance with our joint policy on peer review published in the
A thorough review of the taxonomy, life history, and ecology of the blue tree monitor is presented in the SSA report (Service 2024, entire).
The blue tree monitor (
The blue tree monitor is a narrow-ranging endemic (highly local and known to exist only in their place of origin), and is native to the island of Batanta, within the Raja Ampat Islands of Papua, Indonesia (Böhme and Jacobs 2004, p. 214). The species is rarely encountered on Batanta, so there is little detail available on its life-history and habitat requirements (Philipp and Philipp 2007, p. 867; Auliya and Koch 2020, p. 72). The blue tree monitor is diurnal and arboreal (Böhme and Jacobs 2004, p. 214; Del Canto 2013, p. 19; Ziegler et al. 2009, p. 122), primarily feeds on invertebrates (Auliya and Koch 2020, p. 72; Del Canto 2013, p. 20), and occupies low-lying forested habitats with an ambient humidity that ranges from 65 to 100 percent (Del Canto 2013, p. 19; Sprackland 2011, unpaginated).
No quantitative population information exists for the species (Bennett 2015, p. 50), though there is evidence of declines in the wild population on Batanta as a result of overcollection for the pet trade (Arida et al. 2021, pp. 113-114; Del Canto 2013, p. 19). Blue tree monitors are valuable on the international pet market, and collecting and selling them is a source of income for local residents on Batanta (Arida et al. 2021, pp. 112-115). Blue tree monitors have been overcollected to the point that the species is now undetectable or extirpated from multiple localities on eastern Batanta (Del Canto 2013, p. 19; Arida et al. 2021, pp. 112-114), and lizard hunters report they are finding fewer specimens during week-long hunting sessions than they were historically and now must travel to more remote areas of the island to collect the species (Arida et al. 2021, pp. 114-116). Monitor lizards have a high mortality rate along the trade route and in captivity (Natusch and Lyons 2012, p. 2902; Mendyk 2015, p. 3), and many individuals are injured or die before they are exported from Indonesia (Natusch and Lyons 2012, p. 2902). Thus, the number of individuals in trade reported by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) Trade Database are likely a fraction of those that are taken from the wild.
According to the CITES Trade Database, between 2003 and 2022, a total of 5,502 individual blue tree monitors were exported from Indonesia for commercial purposes (Service 2024, p. 11). The Service's Law Enforcement Management Information System (LEMIS) recorded the importation of 1,584 live blue tree monitors into the
After evaluating threats to the species and assessing the cumulative effect of the threats under the Act's section 4(a)(1) factors, we determined that the blue tree monitor population has been reduced across its range, due to the loss of its limited habitat and overcollection for the international pet trade. Because the blue tree monitor exists in a single population that is endemic to a small island that is threatened by historical and current habitat loss, it is at increased risk of extirpation due to stochastic and catastrophic events, leaving the species immediately susceptible to extinction. The blue tree monitor currently maintains insufficient resiliency, redundancy, and representation for its continued existence to be secure. Thus, after assessing the best scientific and commercial data available, we determine that the blue tree monitor is in danger of extinction throughout all of its range.
For further discussion of the blue tree monitor's biological background information and biological status, previous Federal actions concerning the species, our threats analysis for the species, conservation efforts and regulatory mechanisms affecting the species, our determination of the species' status under the Act, and conservation measures available to listed and proposed species under the Act, consult the proposed rule to list the blue tree monitor as an endangered species that is published in this issue of the
Under section 4(b)(7) of the Act and regulations at 50 CFR 424.20, we may emergency list a species if the threats to the species constitute an emergency posing a significant risk to its wellbeing. An emergency listing will take effect immediately upon publication in the
We conclude that emergency listing the blue tree monitor as an endangered species is warranted. In making this determination, we have carefully assessed the best scientific and commercial data available regarding the past, present, and future threats faced by the blue tree monitor. As discussed above, and in the proposed rule published concurrently with this rule, ongoing and recently increasing overcollection for the pet trade, combined with habitat loss, poses a significant and imminent threat to the blue tree monitor, such that continued unsustainable exploitation may soon lead to the extirpation of the species. Significant and possibly irreversible negative impacts to the species may occur before listing could become effective following completion of the usually required rulemaking procedures for listing a species. We, therefore, conclude that the current circumstances constitute an emergency.
By emergency listing the blue tree monitor as an endangered species, the protections of the Act (through sections 7, 9, and 10) and recognition that will immediately become available to the species will increase the likelihood that it can be saved from extinction. Published concurrently in the Proposed Rules section of this issue of the
The purposes of the Act are to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, to provide a program for the conservation of such endangered species and threatened species, and to take such steps as may be appropriate to achieve the purposes of the treaties and conventions set forth in the Act. Under the Act, a number of steps are available to advance the conservation of species listed as endangered or threatened species. As explained further below, these conservation measures include: (1) recognition, (2) recovery actions, (3) requirements for Federal protection, (4) financial assistance for conservation programs, and (5) prohibitions against certain activities.
Recognition through listing results in public awareness, as well as in conservation by Federal, State, Tribal, and local agencies, foreign governments, private organizations, and individuals. The Act encourages cooperation with the States and other countries and calls for recovery actions to be carried out for listed species.
Section 7 of the Act is titled, “Interagency Cooperation,” and it mandates all Federal action agencies to use their existing authorities to further the conservation purposes of the Act and to ensure that their actions are not likely to jeopardize the continued existence of listed species or adversely modify critical habitat. Regulations implementing section 7 are codified at 50 CFR part 402.
Section 7(a)(2) states that each Federal action agency shall, in consultation with the Secretary, ensure that any action they authorize, fund, or carry out is not likely to jeopardize the continued existence of a listed species or result in
A Federal “action” that is subject to the consultation provisions of section 7(a)(2) of the Act is defined in our implementing regulations at 50 CFR 402.02 as all activities or programs of any kind authorized, funded, or carried out, in whole or in part, by Federal agencies in the United States or upon the high seas. With respect to the blue tree monitor, no known actions will require consultation under section 7(a)(2) of the Act. Given the regulatory definition of “action,” which clarifies that it applies to activities or programs “in the United States or upon the high seas,” the blue tree monitor is unlikely to be the subject of section 7 consultations, because the entire life cycle of this species occurs in terrestrial areas outside of the United States and the species is unlikely to be affected by U.S. Federal actions. Additionally, no critical habitat will be designated for this species because, under 50 CFR 424.12(g), we will not designate critical habitat within foreign countries or in other areas outside of the jurisdiction of the United States.
Section 8(a) of the Act (16 U.S.C. 1537(a)) authorizes the provision of limited financial assistance for the development and management of programs that the Secretary of the Interior determines to be necessary or useful for the conservation of endangered or threatened species in foreign countries. Sections 8(b) and 8(c) of the Act (16 U.S.C. 1537(b) and (c)) authorize the Secretary to encourage conservation programs for foreign listed species, and to provide assistance for such programs, in the form of personnel and the training of personnel.
The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to endangered wildlife. The prohibitions of section 9(a)(1) of the Act, and the Service's implementing regulations codified at 50 CFR 17.21, make it illegal for any person subject to the jurisdiction of the United States to commit, to attempt to commit, to solicit another to commit, or to cause to be committed any of the following acts with regard to any endangered wildlife: (1) import into, or export from, the United States; (2) take (which includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct) within the United States, within the territorial sea of the United States, or on the high seas; (3) possess, sell, deliver, carry, transport, or ship, by any means whatsoever, any such wildlife that has been taken illegally; (4) deliver, receive, carry, transport, or ship in interstate or foreign commerce, by any means whatsoever and in the course of commercial activity; or (5) sell or offer for sale in interstate or foreign commerce. Certain exceptions to these prohibitions apply to employees or agents of the Service, the National Marine Fisheries Service, other Federal land management agencies, and State conservation agencies.
We may issue permits to carry out otherwise prohibited activities involving endangered wildlife under certain circumstances. Regulations governing permits for endangered wildlife are codified at 50 CFR 17.22, and general Service permitting regulations are codified at 50 CFR part 13. With regard to endangered wildlife, a permit may be issued: for scientific purposes, for enhancing the propagation or survival of the species, or for take incidental to otherwise lawful activities. The statute also contains certain exemptions from the prohibitions, which are found in sections 9 and 10 of the Act.
The Service may also register persons subject to the jurisdiction of the United States through its captive-bred wildlife (CBW) program if certain established requirements are met under the CBW regulations (see 50 CFR 17.21(g)). Through a CBW registration, the Service may allow a registrant to conduct certain otherwise prohibited activities under certain circumstances to enhance the propagation or survival of the affected species, including take; export or re-import; delivery, receipt, carriage, transport, or shipment in interstate or foreign commerce in the course of a commercial activity; or sale or offer for sale in interstate or foreign commerce. A CBW registration may authorize interstate purchase and sale only between entities that both hold a registration for the taxon concerned. The CBW program is available for species having a natural geographic distribution not including any part of the United States and other species that the Service Director has determined to be eligible by regulation. The individual specimens must have been born in captivity in the United States.
The provisions in section 9(b)(1) of the Act (16 U.S.C. 1538(b)(1)) provide a limited exemption from certain otherwise prohibited activities regarding wildlife specimens held in captivity or in a controlled environment on the pre-Act date (for species first listed after the enactment of the Endangered Species Act, the pre-Act date is the date of publication in the
Therefore, for pre-Act wildlife, there is a limited exemption from the prohibitions associated with: (1) import into, or export from, the United States of any endangered wildlife, or (2) violation of regulations pertaining to endangered or threatened wildlife. Other prohibitions of section 9—including those at section 9(a)(1)(B)-(F), regarding take of endangered wildlife, possession and other acts with unlawfully taken wildlife, interstate or foreign commerce in endangered wildlife, and sale or offer for sale of endangered wildlife—continue to apply to activities with qualifying endangered pre-Act wildlife specimens. Specimens born after the pre-Act date and specimens taken from the wild after the pre-Act date do not qualify as “pre-Act” wildlife under the text of section 9(b)(1) of the Act. If a person engages in any commercial activity with a “pre-Act” specimen on or after the pre-Act date, the wildlife would immediately cease to qualify as pre-Act wildlife and become subject to the relevant prohibitions, because it has been held or used in the course of a commercial activity.
Additional requirements apply to activities with all blue tree monitors, separate from their listing or proposed listing as endangered species or threatened species. As a CITES-listed species, all international trade of any blue tree monitor by persons subject to the jurisdiction of the United States must also comply with CITES requirements pursuant to section 9, paragraphs (c) and (g), of the Act (16 U.S.C. 1538(c) and (g)) and to 50 CFR part 23. As “fish or wildlife” (16 U.S.C. 1532(8)), blue tree monitor imports and
We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act (42 U.S.C. 4321
A complete list of references cited in this rulemaking is available on the internet at
The primary authors of this rule are the staff members of the Fish and Wildlife Service's Species Assessment Team and the Branch of Delisting and Foreign Species.
Endangered and threatened species, Exports, Imports, Plants, Reporting and recordkeeping requirements, Transportation, Wildlife.
Martha Williams, Director of the U.S. Fish and Wildlife Service, approved this action on December 3, 2024. Acting Director Steve Guertin approved these packages December 15, 2024. On December 16, 2024, the acting Director authorized the undersigned to sign the document electronically and submit it to the Office of the Federal Register for publication as an official document of the U.S. Fish and Wildlife Service.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; and 4201-4245, unless otherwise noted.
(h) * * *
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Inseason modification of 2024 management measures.
NMFS announces 13 inseason actions for the 2024-2025 ocean salmon fishing season. These inseason actions modify the recreational and commercial salmon troll fisheries in the area from the U.S./Canada border to Humbug Mountain, OR.
The effective dates for these inseason actions are set out in this document under the heading “Inseason Actions” and the actions remain in effect until superseded or modified.
Anna Heeter, (971) 361-8895,
The annual management measures for the 2024 and early 2025 ocean salmon fisheries (89 FR 44553, May 21, 2024) govern the commercial and recreational fisheries in the area from the U.S./Canada border to the U.S./Mexico border, effective from 0001 hours Pacific
Management of the salmon fisheries is divided into two geographic areas: north of Cape Falcon (NOF) (U.S./Canada border to Cape Falcon, OR), and south of Cape Falcon (SOF) (Cape Falcon, OR, to the U.S./Mexico border). The actions described in this document affect the NOF commercial salmon troll fisheries, NOF recreational fisheries, and SOF recreational fisheries, as set out under the heading “Inseason Actions” below.
Consultation with the Council Chairperson on these inseason actions occurred on June 27, 2024, July 10, 2024, July 31, 2024, August 8, 2024, August 15, 2024, August 19, 2024, August 21, 2024, August 28, 2024, August 29, 2024, and September 11, 2024. These consultations included representatives from NMFS, Washington Department of Fish and Wildlife, Oregon Department of Fish and Wildlife, and California Department of Fish and Wildlife. Representatives from the Salmon Advisory Subpanel and Salmon Technical Team were also present. A Council representative was present on June 27, 2024, July 10, 2024, July 31, 2024, August 8, 2024, August 15, 2024, August 19, 2024, August 21, 2024, August 28, 2024, August 29, 2024, and September 11, 2024.
These inseason actions were announced on NMFS' telephone hotline and U.S. Coast Guard radio broadcast on the date of the consultations (50 CFR 660.411(a)(2)).
• Effective 12:01 a.m., Monday, July 1, 2024, for the commercial salmon troll fishery, the landing and possession limit for the entire area between the U.S./Canada border and Cape Falcon, OR will be modified from 70 Chinook salmon and 100 coho salmon per vessel to 40 Chinook salmon and 100 coho salmon per vessel for the open period July 1-10.
• Effective 12:01 a.m., Thursday, July 11, 2024, for the commercial salmon troll fishery, the landing and possession limit for the entire area between the U.S./Canada border and Cape Falcon, OR will be modified from 120 Chinook salmon and 100 coho salmon per vessel per landing week to 40 Chinook salmon and 100 coho salmon per vessel per landing week.
The NMFS West Coast Regional Administrator (RA) considered the 2024 abundance forecasts for Chinook salmon stocks, the timing of the actions relative to the length of the season and the remaining Chinook commercial troll quota, and determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modified quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered the landings of Chinook salmon in the NOF commercial salmon fishery, fishery effort occurring to date, quotas set preseason, and the Salmon Technical Team's (STT's) calculations for the impact-neutral quota adjustment. The RA determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modified quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered the 2024 abundance forecasts for Chinook salmon stocks, the remaining quota, the timing of the action relative to the length of the season, the catch and effort to date, and determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures including season length. This inseason action modifies
The RA considered the 2024 abundance forecasts for Chinook salmon stocks, the timing of the actions relative to the length of the season, the remaining quota, as well as catch and effort to date, and determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modifies quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered the 2024 abundance forecasts for Chinook salmon stocks, the remaining quota, and the timing of the actions relative to the length of the season, and determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modifies quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
• Effective Thursday, August 15, 2024, at 6 p.m., the landing and possession limit for the North of Falcon commercial ocean salmon troll fishery is modified to 25 Chinook salmon and 100 marked coho salmon per vessel per landing week from 20 Chinook salmon and 100 marked coho salmon per vessel per landing week (Thursday-Wednesday).
• Effective Monday, August 19, 2024, at 12:01 a.m., the recreational salmon fishery in the area between Cape Falcon and Leadbetter Point (Columbia River subarea) is open to fishing for salmon. The daily limit will be two salmon, no more than one of which may be a Chinook salmon with a minimum size limit of 22 inches (55.8 cm). All coho must be marked with a healed adipose fin clip. The Columbia River Control Zone will remain closed.
The RA considered the 2024 abundance forecasts for Chinook salmon stocks, the timing of the actions relative to the length of the season, as well as catch and effort to date, and determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modifies quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered landings of Chinook and coho salmon stocks to date and projected catches in the recreational salmon fishery, fishery effort occurring to date and projected effort, quotas and guidelines set preseason, and the recreational coho salmon quota remaining. The RA determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modifies quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered landings of Chinook and coho salmon stocks to date
The RA considered landings of Chinook and coho salmon stocks to date and projected catches in the recreational salmon fishery, fishery effort occurring to date and projected effort quotas and guidelines set preseason, and the recreational coho salmon quota remaining. The RA determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modifies quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The STT calculated that an impact-neutral rollover of the unutilized coho salmon quota would add 5,700 coho salmon from the June-August mark-selective period to the September non-selective coho salmon fishery quota of 25,000 to an adjusted quota of 30,700 coho salmon.
The RA determined that this inseason action is necessary to meet management and conservation goals for the 2024-early 2025 management measures after considering the best available information on the 2024 abundance forecasts for coho salmon stocks, remaining quota, effects on coho conservation objectives and the other factors and considerations set forth in 50 CFR 660.409. This inseason action modified quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered catch of Chinook and coho salmon stocks to date and projected catches in the recreational salmon fishery, fishery effort occurring to date and projected effort, quotas and guidelines set preseason, and the recreational coho salmon quota remaining. The RA determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modifies quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered catch of Chinook and coho salmon stocks to date and projected catches in the recreational salmon fishery, fishery effort occurring to date and projected effort, quotas and guidelines set preseason, and the recreational coho salmon quota remaining. The RA determined that this inseason action is necessary to meet management and conservations goals for the 2024-2025 management measures. This inseason action modifies quotas and/or fishing seasons as authorized under 50 CFR 660.409(b)(1)(i).
The RA considered the catch of Chinook and coho salmon stocks to date and projected catches in the recreational salmon fishery, fishery effort occurring to date and projected effort, quotas and guidelines set preseason, and the recreational coho salmon quota remaining and determined that this inseason action was necessary to meet
All other restrictions and regulations remain in effect as announced for the 2024 ocean salmon fisheries (89 FR 44553, May 21, 2024; 89 FR 61355, July 31, 2024).
The States and Tribes manage the fisheries in State waters adjacent to the areas of the U.S. exclusive economic zone (3-200 nautical miles; 5.6-370.4 kilometers) off the coasts of the States of Washington, Oregon, and California consistent with these Federal actions. As provided by the inseason notice procedures at 50 CFR 660.411, actual notice of the described regulatory actions was given, prior to the time the actions became effective, by telephone hotline numbers 206-526-6667 and 800-662-9825, and by U.S. Coast Guard Notice to Mariners broadcasts on Channel 16 VHF-FM and 2182 kHz.
NMFS issues these actions pursuant to section 305(d) of the Magnuson-Stevens Fishery Conservation and Management Act (MSA). These actions are authorized by 50 CFR 660.409, which was issued pursuant to section 304(b) of the MSA, and is exempt from review under Executive Order 12866.
Pursuant to 5 U.S.C. 553(b)(3)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest. Prior notice and opportunity for public comment on this action was impracticable because NMFS had insufficient time to provide for prior notice and the opportunity for public comment between the time Chinook salmon and coho salmon abundance, catch, and effort information were developed and fisheries impacts were calculated, and the time the fishery modifications had to be implemented in order to ensure that fisheries are managed based on the best scientific information available and consistent with the conservation objectives. As previously noted, actual notice of the regulatory action was provided to fishers through telephone hotlines and radio notifications. These actions comply with the requirements of the annual management measures for ocean salmon fisheries (88 FR 30235, May 11, 2023), the Pacific Salmon FMP, and regulations implementing the FMP under 50 CFR 660.409 and 660.411.
There is good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effective date, as a delay in effectiveness of this action would allow fishing at levels inconsistent with the goals of the FMP and the current management measures.
16 U.S.C. 1801
Office of Personnel Management.
Withdrawal of proposed rule.
The Office of Personnel Management is clarifying its withdrawal of a proposed rule published on December 17, 2020. The notice of proposed rulemaking,
OPM withdraws the proposed rule as of March 12, 2021, or no later than December 20, 2024.
The docket for this withdrawn rule is available at
Latonia Page (202) 936-3459 or email:
On December 17, 2020, the Office of Personnel Management (OPM) published a notice of proposed rulemaking (NPRM or proposed rule) titled “Reduction in Force,” in the
In response to the NPRM, OPM received approximately 44 comments during the 30-day comment period which ended on January 19, 2021.
On January 22, 2021, President Biden issued an E.O. 14003 titled “Protecting the Federal Workforce,” which, among other things, revoked E.O. 13839.
On March 12, 2021, OPM withdrew its NPRM from its regulatory agenda (
OPM believes its withdrawal on March 12, 2021, was valid and the agency, regulated entities, and the public have operated with that understanding. Nevertheless, in an abundance of caution, OPM hereby clarifies that the NPRM is withdrawn.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to supersede Airworthiness Directive (AD) 2016-14-04, which applies to certain The Boeing Company Model 787-8 airplanes. AD 2016-14-04 requires replacing the potable waterline couplings above the forward and aft electronics equipment (EE) bays with new, improved couplings. AD 2016-14-04 also requires sealing the main cabin floor areas above the aft EE bay, installing drip shields and foam blocks, and rerouting the wire bundles near the drip shields above the equipment in the aft EE bay. Since the FAA issued AD 2016-14-04, it was determined that sealant, moisture barrier tape and tape dam requirements above the EE bays may not have been installed on production airplanes. This proposed AD continues to require the actions in AD 2016-14-04 and would require an inspection of seat tracks above the EE bays for missing, damaged, or deteriorated sealant, moisture barrier tape, or tape dams, as applicable, and applicable on-condition actions. This proposed AD also adds airplanes to the applicability. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by February 10, 2025.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For the material identified in this proposed AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS),
• You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available at
Courtney Tuck, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3986; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
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
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 NPRM 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 NPRM, 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 NPRM. Submissions containing CBI should be sent to Courtney Tuck, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3986; email:
The FAA issued AD 2016-14-04, Amendment 39-18585 (81 FR 44499, July 8, 2016) (AD 2016-14-04), for certain The Boeing Company Model 787-8 airplanes. AD 2016-14-04 was prompted by reports of water leakage from the potable water system due to improperly installed waterline couplings, and water leaking into the EE bays from above the floor in the main cabin, resulting in water on the equipment in the EE bays. AD 2016-14-04 requires replacing the potable waterline couplings above the forward and aft EE bays with new, improved couplings. AD 2016-14-04 also requires sealing the main cabin floor areas above the aft EE bay, installing drip shields and foam blocks, and rerouting the wire bundles near the drip shields above the equipment in the aft EE bay. The agency issued AD 2016-14-04 to prevent a water leak from an improperly installed potable water system coupling, or main cabin water source, which could cause the equipment in the EE bays to become wet, resulting in an electrical short and potential loss of system functions essential for safe flight.
Since the FAA issued AD 2016-14-04, it was determined that sealant, moisture barrier tape and tape dam requirements above the EE bays may not have been installed on production airplanes. Missing moisture barrier tape, tape dams, and sealant at the end of exposed seat tracks above the forward and aft EE bays could allow water to leak onto equipment located in the EE bay(s) which could result in an electrical short and potential loss of several functions essential for safe flight.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
The FAA reviewed Boeing Alert Requirements Bulletin 787-81205-SB530085-00 RB, Issue 001, dated March 6, 2024. This material specifies procedures for a detailed inspection of seat tracks located above the aft EE bays for missing, damaged, or deteriorated sealant, moisture barrier tape, or tape dams, as applicable, and applicable on-condition actions. On-condition actions include applying sealant, moisture barrier tape, and tape dams to each affected area.
The FAA also reviewed the following material:
• Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 003, dated April 28, 2017, which describes procedures for replacing the existing potable waterline couplings located above the forward and aft EE bays with new, improved couplings, doing a potable water system leak test and repairing any leaks found.
• Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 003, dated May 6, 2019, which describes procedures for applying sealant to the main cabin floor areas located above the aft EE bay.
• Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 003, dated April 24, 2017, which describes procedures for installing drip shields and foam blocks, and rerouting the wire bundles near the drip shields above the equipment in the aft EE bay.
This proposed AD would also require the following material, which the Director of the Federal Register approved for incorporation by reference as of August 12, 2016 (81 FR 44499, July 8, 2016):
• Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 002, dated December 9, 2015.
• Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 002, dated January 26, 2016.
• Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 002, dated March 16, 2016.
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
This proposed AD would retain all requirements of AD 2016-14-04. This proposed AD would add certain Model 787-8, 787-9, and 787-10 airplanes to the applicability. This proposed AD would also require accomplishing the
For information on the procedures and compliance times, see this material at
Paragraphs (g), (h)(1), and (h)(2) of AD 2016-14-04 specify doing actions in accordance with certain service information. However, the paragraphs apply to all airplanes identified in the applicability and did not limit the paragraphs to airplanes identified in the service information identified in each paragraph. Therefore, in paragraphs (g), (h)(1), and (h)(2) of this AD, the FAA has clarified the affected airplanes for each paragraph.
The FAA estimates that this AD, if adopted as proposed, would affect 64 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of the proposed inspection. The agency has no way of determining the number of aircraft that might need this repair:
The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some or all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected operators.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by February 10, 2025.
This AD replaces AD 2016-14-04, Amendment 39-18585 (81 FR 44499, July 8, 2016) (AD 2016-14-04).
This AD applies to the airplanes identified in paragraphs (c)(1) and (2) of this AD, certificated in any category.
(1) The Boeing Company Model 787-8, 787-9, and 787-10 airplanes as identified in Boeing Alert Requirements Bulletin 787-81205-SB530085-00 RB, Issue 001, dated March 6, 2024.
(2) The Boeing Company Model 787-8 airplanes, as identified in the service
(i) Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 002, dated December 9, 2015.
(ii) Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 002, dated January 26, 2016.
(iii) Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 002, dated March 16, 2016.
Air Transport Association (ATA) of America Code 38, water waste; 53, Fuselage.
This AD was prompted by reports of water leakage from the potable water system due to improperly installed waterline couplings, and water leaking into the electronics equipment (EE) bays from above the floor in the main cabin, resulting in water on the equipment in the EE bays. In addition, after AD 2016-14-04 was issued, it was determined that sealant, moisture barrier tape and tape dam requirements above the EE bays may not have been installed on production airplanes. A water leak from an improperly installed potable water system coupling, or main cabin water source, if not addressed, could cause the equipment in the EE bays to become wet, resulting in an electrical short and potential loss of system functions essential for safe flight.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (g) of AD 2016-14-04, with revised service information. For airplanes identified in Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 002, dated December 9, 2015: Within 24 months after August 12, 2016 (the effective date of AD 2016-14-04), replace the existing potable waterline couplings located above the forward and aft EE bays with new, improved couplings, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 002, dated December 9, 2015; or Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 003, dated April 28, 2017. Before further flight after doing the replacement, do a potable water system leak test and repair any leaks found before further flight, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 002, dated December 9, 2015; or Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 003, dated April 28, 2017. As of the effective date of this AD, only use Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 003, dated April 28, 2017, for the actions required by this paragraph.
This paragraph restates the requirements of paragraph (h) of AD 2016-14-04, with revised service information. Within 60 months after August 12, 2016 (the effective date of AD 2016-14-04), do the actions specified in paragraphs (h)(1) and (2) of this AD, as applicable.
(1) For airplanes identified in Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 002, dated January 26, 2016: Apply sealant to the main cabin floor areas located above the aft EE bay, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 002, dated January 26, 2016; or Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 003, dated May 6, 2019. As of the effective date of this AD, only use Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 003, dated May 6, 2019, for the actions required by this paragraph.
(2) For airplanes identified in Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 002, dated March 16, 2016: Install drip shields and foam blocks, and reroute the wire bundles above the equipment in the aft EE bay, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 002, dated March 16, 2016; or Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 003, dated April 24, 2017, except as specified in paragraph (i) of this AD. As of the effective date of this AD, only use Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 003, dated April 24, 2017, for the actions required by this paragraph.
This paragraph restates the requirements of paragraph (i) of AD 2016-14-04, with no changes. Where Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 002, dated March 16, 2016, specifies “Group 6, Configuration 1” airplanes in reference to Task 29, the correct airplane group identification is “Group 7, Configuration 1” airplanes.
For airplanes identified in Boeing Alert Requirements Bulletin B787-81205-SB530085-00 RB, Issue 001, dated March 6, 2024: Except as specified by paragraph (k) of this AD, at the applicable times specified in the “Compliance” paragraph of Boeing Alert Requirements Bulletin B787-81205-SB530085-00 RB, Issue 001, dated March 6, 2024, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin B787-81205-SB530085-00 RB, Issue 001, dated March 6, 2024.
Where the Boeing Recommended Compliance Time columns of the tables in the “Compliance” paragraph of Boeing Alert Requirements Bulletin B787-81205-SB530085-00 RB, Issue 001, dated March 6, 2024, refer to the Issue 001 date of the Requirements Bulletin B787-81205-SB530085-00 RB, this AD requires using the effective date of this AD.
This paragraph provides credit for the corresponding actions specified in paragraphs (g) and (h) of this AD, if those actions were performed before August 12, 2016 (the effective date of AD 2016-14-04) using the applicable service information specified in paragraphs (l)(1) through (3) of this AD.
(1) Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 001, dated March 26, 2015.
(2) Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 001, dated March 26, 2015.
(3) Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 001, dated March 26, 2015.
(1) The Manager, AIR-520, Continued Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (n)(1) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by The Boeing Company Organization Designation Authorization (ODA) that has been authorized by the Manager, AIR-520, Continued Operational Safety Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(4) AMOCs approved for AD 2016-14-04 are approved as AMOCs for the corresponding provisions of paragraphs (g) and (h) of this AD.
(5) For material that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (m)(5)(i) and (ii) of this AD apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or substep is labeled “RC Exempt,” then the RC
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
(1) For more information about this AD, contact Courtney Tuck, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 206-231-3986; email:
(2) Material identified in this AD that is not incorporated by reference is available at the address specified in paragraph (o)(5) of this AD.
(1) The Director of the Federal Register approved the incorporation by reference of the material listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this material as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(3) The following material was approved for IBR on [DATE 35 DAYS AFTER PUBLICATION OF THE FINAL RULE].
(i) Boeing Alert Requirements Bulletin B787-81205-SB530085-00 RB, Issue 001, dated March 6, 2024.
(ii) Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 003, dated April 28, 2017.
(iii) Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 003, dated May 6, 2019.
(iv) Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 003, dated April 24, 2017.
(4) The following material was approved for IBR on August 12, 2016 (81 FR 44499, July 8, 2016).
(i) Boeing Alert Service Bulletin B787-81205-SB380009-00, Issue 002, dated December 9, 2015.
(ii) Boeing Alert Service Bulletin B787-81205-SB530029-00, Issue 002, dated January 26, 2016.
(iii) Boeing Alert Service Bulletin B787-81205-SB530031-00, Issue 002, dated March 16, 2016.
(5) For the material identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; website
(6) You may view this material at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(7) You may view this material at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, visit
Issued on December 16, 2024.
Federal Aviation Administration, DOT.
Notice of public meeting for proposed rulemaking; request for comment.
The Federal Aviation Administration (FAA) announces a public meeting to solicit input on the modernization of pilot school regulations. This will be the first in a series of public meetings on this topic.
The FAA will hold the first public meeting (virtual only) on Thursday, March 6, 2025, from 10:00 a.m.-2:00 p.m., Eastern Time.
Written comments are requested no later than March 21, 2025.
Members of the public must register to attend the virtual public meeting. See website for registration link:
Send comments identified by docket number FAA-2024-2531 using any of the following methods:
•
•
•
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For questions concerning this action, contact Lyndsay Carlson with the Part 141 Modernization Initiative Team, Office of Safety Standards, General Aviation and Commercial Division, Training and Certification Group (AFS-810): email
Title 14 Code of Federal Regulations (14 CFR) part 141 prescribes the requirements for issuing pilot school air agency certificates, provisional pilot school air agency certificates, associated ratings, and the general operating rules applicable to a holder of a part 141 pilot school or provisional pilot school air agency certificate. Through a part 141 pilot school or provisional pilot school, a student may obtain equivalent levels of aeronautical experience in fewer hours than required by 14 CFR part 61. Part 141 schools are required to have FAA certification, and FAA oversight. Specifically, part 141 includes curricula standards for training and procedures to ensure a training course used by a school is adequate, appropriate, and is administered by qualified personnel including an experienced chief instructor who supervises instructors.
The process of licensing or certification of pilot schools in the United States is approaching 100 years of existence. Although the FAA has revised certain regulatory requirements pertaining to pilot schools during this time, part 141 still has many foundational ties to Civil Air Regulations (CAR) part 50, which was implemented in the 1940s. Regulations for pilot schools are typically promulgated to improve safety, reduce aircraft accidents, and embrace changes such as advances in technology and the need for data collection and analysis. Modernizing part 141 would address challenges pertaining to certification, certification management, examining
Therefore, part 141 must be analyzed to determine how it can evolve with the changing aviation industry. Over the course of the project, the FAA is seeking engagement from the flight training industry through participation in public meetings and submitted comments. Collaboration within the industry is encouraged to stimulate the innovation of a modern part 141 that will serve the needs of current and future pilot schools, as well as provide a robust and safe training environment that instills the necessary knowledge, skills, critical thinking, and aeronautical decision making in its pilots to create a safer national airspace system.
For more information about the Part 141 Modernization Initiative, visit
The FAA will provide the project goals, overview, and plans to address the modernization of part 141 initiative at the introductory virtual public meeting on March 6, 2025. Throughout the project period, the FAA intends to have additional public meetings, which the FAA will announce in the
The U.S. Department of Transportation is committed to providing equal access to this meeting for all participants. If you require an alternative version of files provided or alternative accommodations, such as sign language, interpretation, or other ancillary aids, please contact the Part 141 Modernization Initiative Team, at
The FAA encourages the public to submit comments to
The submission of public comments is encouraged but not required for meeting participation. The FAA will consider public feedback to determine the need for future considerations to the CFR; however, because such comments would be submitted outside of a notice-and-comment rulemaking, there is no requirement for the FAA to respond to submitted comments. The FAA will review comments that are post-marked, or submitted electronically, on or before the comment closing date of March 21, 2025. Comments made after the closing date may be reviewed as time and resources permit.
Additional information and resources, including future schedule details, will be provided on the project website as they become available. Specific questions regarding the project can be emailed to
Federal Trade Commission.
Initial notice of informal hearing; final notice of informal hearing; list of Hearing Participants; requests for submissions from Hearing Participants.
The Federal Trade Commission (“FTC” or “Commission”) published a supplemental notice of proposed rulemaking (“SNPRM”) in the
Hearing Participants may submit their oral presentations in writing or file supplementary documentary submissions, online or on paper, by following the instructions in part IV of the
Thomas Harris,
Following public comment on an advance notice of proposed rulemaking (“ANPRM”), 86 FR 72901 (Dec. 23, 2021), the FTC published a notice of proposed rulemaking (“NPRM”), 87 FR 62741 (Oct. 17, 2022), entitled “Trade Regulation Rule on Impersonation of Government and Business” (“Rule”), in the
On March 1, 2024, the Commission published its final Rule in the
In accordance with section 18(b)(1) of the FTC Act, 15 U.S.C. 57a(b)(1), which requires the Commission to provide the opportunity for an informal hearing in section 18 rulemaking proceedings, the SNPRM also announced the opportunity for interested persons to present their positions orally at an informal hearing. Six of the commenters requested the opportunity to present their position orally or participate at an informal hearing. Three additional commenters requested the opportunity to participate in a hearing if one were held but did not request a hearing themselves.
After further consideration, the Commission has decided not to proceed with the SNPRM's proposed means and instrumentalities provision (proposed § 461.5) at this time. Therefore, the purpose of the informal hearing will be to address issues relating to the proposed prohibition on impersonating individuals (proposed § 461.4).
Section 18 of the FTC Act, 15 U.S.C. 57a, as implemented by the Commission's Rules of Practice, 16 CFR 1.11(e), provides interested persons with the opportunity to present their positions orally at an informal hearing upon request.
The following six commenters requested an informal hearing generally in accordance with the requirements of 16 CFR 1.11(e):
1. The Abundance Institute;
2. Andreesen Horowitz (a16z);
3. The Consumer Technology Association (CTA);
4. Software & Information Industry Association (SIIA);
5. TechFreedom;
6. TechNet.
In addition, while the following commenters stated that an informal hearing was not necessary, they requested the opportunity to make an oral presentation if the Commission holds an informal hearing at others' request:
1. Electronic Privacy Information Center (EPIC), et al.;
2. The Internet & Television Association (NCTA);
3. Truth in Advertising (TINA).
The Commission finds that the requests submitted were generally adequate and therefore will hold an informal hearing. The nine commenters listed will have the opportunity to make oral presentations during the informal hearing. The Commission does not find it necessary to identify any group of interested persons with the same or similar interest in the proceeding.
In the SNPRM, the Commission did not identify any disputed issues of material fact that needed to be resolved at an informal hearing. However, the Commission may still do so in this initial and final notice of informal hearing, either on its own initiative or in response to a persuasive showing from a commenter.
In response to the SNPRM, six commenters proposed disputed issues of material fact related to proposed § 461.5 (
The Abundance Institute claimed in its comment: “The record contains reports of business practices described as `means and instrumentalities' violations. But none of the reports identify even a single incident (let alone a `prevalent' practice) of a party `pass[ing] on a false or misleading representation' as is necessary to meet the first prong of the two-prong test for M&I violations of Section 5.”
CTA proposed three disputed issues of material fact:
1. “Whether the Means and Instrumentalities Proposal imposes an affirmative obligation on companies to address the misuse of their products and services, and whether there are any costs associated with implementing compliance plans to satisfy this requirement.”
2. “Whether the Means and Instrumentalities Proposal will chill the development of new products and services that could be misused by fraudsters.”
3. “Whether the Means and Instrumentalities Proposal's liability framework is responsive to the known trends and evidence of online fraud.”
TechNet proposed two disputed issues of material fact:
1. “Whether the means and instrumentalities provision imposes an affirmative obligation to address the misuse of tools, products, and services and the costs associated with such compliance programs.”
2. “Whether the means and instrumentalities provision will chill the development and deployment of legitimate tools that can be misappropriated for impersonation.”
SIIA proposed three disputed issues of material fact:
1. “Whether the Commission has accurately estimated the costs associated with the proposed rule.”
2. “Whether the means and instrumentalities provision would impose an affirmative obligation on companies to address misuses of goods and services and, if so, costs associated with implementing additional compliance programs or efforts to address potential misuse.”
3. “Whether the means and instrumentalities provision will impede the development of technologies that have positive societal benefits but could be misused to enable impersonation.”
a16z quoted the following portion of a paragraph from the SNPRM, noting that it disputed “those material facts[:]” “Because the deceptive impersonation of individuals is already prohibited by section 5 of the FTC Act, and section 5 similarly makes unlawful providing the means and instrumentalities for a violation of section 5 of the Act, the SNPRM would not change the state of law in terms of what is legal and what is illegal. Furthermore, the proposed amendments to the Rule would impose no recordkeeping requirement and would not create or impose any compliance costs.”
TechFreedom proposed as disputed issues of material fact whether “the rule would apply to AI tools covered by Section 230” and “the applicability of a constructive knowledge standard” in proposed § 461.5.
Each of these proposed disputed issues of material fact relates to the § 461.5 proposal to extend liability to parties who provide goods or services with knowledge or reason to know that they will be used in impersonation schemes. After further consideration, the Commission has decided not to proceed with proposed § 461.5 at this time. It is therefore not necessary to address the proposed disputed issues concerning § 461.5, and the purpose of the informal hearing will be to address issues relating to proposed § 461.4's prohibition on impersonating individuals.
Thus, the Commission finds that there are no “disputed issues of material fact” to resolve at the informal hearing
This initial notice of informal hearing also serves as the “final notice of informal hearing.”
Pursuant to Commission Rule § 1.12(a)(4), 16 CFR 1.12(a)(4), the following is the list of interested persons (“Hearing Participants”) who will have the opportunity to make oral presentations at the informal hearing:
1. The Abundance Institute;
2. Andreesen Horowitz (a16z);
3. The Consumer Technology Association (CTA);
4. Software & Information Industry Association (SIIA);
5. TechFreedom;
6. TechNet;
7. Electronic Privacy Information Center (EPIC) (et al.);
8. The Internet & Television Association (NCTA); and
9. Truth in Advertising (TINA).
Because the Commission has decided not to proceed with proposed § 461.5, the purpose of the hearing will be to address issues relating to the remaining proposal to prohibit impersonation of individuals in § 461.4. Oral statements will be limited to 15 minutes, although they may be supplemented by documentary submissions, and the presiding officer may grant an extension of time for good cause shown. Transcripts of the oral statements will be placed in the rulemaking record. Hearing Participants will be provided with instructions as to how to participate in the virtual hearing.
If you are a Hearing Participant and would like to submit your oral representation in writing or file a supplementary documentary submission, please write “Impersonation SNPRM, R207000” on your submission and send it
If you file a documentary submission under this section, your submission—including your name and your State—will be placed on the public record of this proceeding, including on the website
Documentary submissions containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with Commission Rule § 4.9(c), 16 CFR 4.9(c). In particular, the written request for confidential treatment that accompanies the submission must include the factual and legal basis for the confidentiality request and must identify the specific portions to be withheld from the public record.
Visit the FTC website to read this document and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of submissions to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive documentary submissions it receives from the Hearing Participants on or before January 9, 2025. For information on the Commission's privacy policy, including routine uses permitted by the Privacy Act, see
Hearing Participants who need assistance should indicate as much in their submissions, and the Commission will endeavor to provide accommodations. Hearing Participants without the computer technology necessary to participate in video conferencing will be able to participate in the informal hearing by telephone; they should indicate as much in their submissions.
The Commission's Chief Presiding Officer, the Chair, has appointed and designates Administrative Law Judge for the Federal Trade Commission, the Honorable Jay L. Himes, to serve as the presiding officer of the informal hearing. Judge Himes will conduct the informal hearing virtually using video conferencing starting at 1 p.m. Eastern on January 17, 2025. The informal hearing will be available for the public to watch live from the Commission's website,
Because there are no “disputed issues of material fact” to resolve at the informal hearing, the presiding officer is not anticipated to make a recommended decision.
Pursuant to Commission Rule § 1.18(c)(1), 16 CFR 1.18(c)(1), the Commission has determined that communications with respect to the merits of this proceeding from any outside party to any Commissioner or Commissioner advisor shall be subject to the following treatment. Written communications and summaries or transcripts of oral communications shall be placed on the rulemaking record if the communication is received before the participation deadline. They shall be placed on the public record if the communication is received later. Unless the outside party making an oral communication is a Member of Congress, such communications are permitted only if advance notice is published in the Weekly Calendar and Notice of “Sunshine” Meetings.
By direction of the Commission.
Food and Drug Administration, HHS.
Notification of petition.
The Food and Drug Administration (FDA or we) is announcing that we have filed a petition, submitted by Monterey Mushrooms, LLC, proposing that the food additive regulations for vitamin D
The food additive petition was filed on December 11, 2024.
For access to the docket to read background documents or comments received, go to
Katie Overbey, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-7536.
Under section 409(b)(5) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 348(b)(5)), we are giving notice that we have filed a food additive petition (FAP 5M4841), submitted by Monterey Mushrooms, LLC, 260 Westgate Dr., Watsonville, CA 95076. The petition proposes to amend the food additive regulations in § 172.382 (21 CFR 172.382
The petitioner has claimed that this action is categorically excluded from the requirement to prepare an environmental assessment or an environmental impact statement under 21 CFR 25.32(k) because the substance is intended to remain in food through ingestion by consumers and is not intended to replace macronutrients in food. In addition, the petitioner has stated that, to their knowledge, no extraordinary circumstances exist. If FDA determines a categorical exclusion applies, neither an environmental assessment nor an environmental impact statement is required. If FDA determines a categorical exclusion does not apply, we will request an environmental assessment and make it available for public inspection.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking; technical correction.
This document contains technical corrections to a notice of proposed rulemaking (REG-112129-23), which was published in the
Written or electronic comments are still being accepted and must be received by Thursday, January 16, 2025.
Commenters are strongly encouraged to submit public comments electronically via the Federal eRulemaking Portal at
Concerning general corrections (including corrections to proposed §§ 1.56A-1 and 1.59-2), Madeline Padner at (202) 317-7006, and concerning corrections to proposed §§ 1.56A-15 and 1.56A-16, C. Dylan Durham at (202) 317-7005, each of the Office of Associate Chief Counsel (Income Tax and Accounting); concerning corrections to proposed §§ 1.56A-5 and 1.56A-20, Elizabeth Zanet or Brian Barrett, each of the Office of Associate Chief Counsel (Passthroughs and Special Industries) at (202) 317-6850; concerning corrections to proposed §§ 1.56A-18, 1.56A-19, 1.56A-21, 1.56A-23(e) and (f), and 1.1502-56A, Jeremy Aron-Dine or William W. Burhop, each of the Office of Associate Chief Counsel (Corporate) at (202) 317-3181; concerning corrections to proposed § 1.56A-26, Michelle L. Ng at (202) 317-6939, and concerning § 1.59-4, John J. Lee at (202) 317-6934, each of the Office of Associate Chief Counsel (International); and concerning submissions of comments or the public hearing, the Publications and Regulations Section, (202) 317-6901 (not toll-free numbers) or by email at
The notice of proposed rulemaking (REG-112129-23) that is the subject of these corrections is under sections 55, 56A, 59, and 1502 of the Internal Revenue Code.
As published, the notice of proposed rulemaking (REG-112129-23) contains errors that need to be corrected.
The Treasury Department and the IRS intended that CAMT basis be used in amortizing or depreciating property not subject to the rules in proposed § 1.56A-15 (AFSI adjustments for section 168 property) and proposed § 1.56A-16 (AFSI adjustments for qualified wireless spectrum property). Therefore, the Treasury Department and IRS correct proposed § 1.56A-1(d)(4) to clarify that to the extent the CAMT basis of an asset is different than its AFS basis, and if income and expense (as well as gain or loss) is recognized for AFSI purposes under the section 56A regulations, then such income or expense (as well as gain or loss) reflected in FSI is redetermined for AFSI purposes by reference to the CAMT basis of the asset.
The Treasury Department and the IRS intended that the simplified method for determining applicable corporation status take into account the adjustments provided to tax-exempt entities in section 56A(c)(12) and proposed § 1.56A-14. Therefore, the Treasury Department and IRS correct proposed § 1.59-2(g)(2) to take into account the adjustments provided to tax-exempt entities by proposed § 1.56A-14.
The Treasury Department and the IRS intended proposed § 1.56A-19(g)(4)(iii) and (g)(5)(iii) to prevent a section 351 transferee that is an applicable corporation from (i) causing a section 351 exchange to be treated as a covered recognition transaction by issuing a de minimis amount of boot to a section 351 transferor that is not an applicable corporation, and thereby (ii) determining the section 351 transferee's CAMT basis in the assets received to be its AFS basis (that is, taking a fair value basis in the assets). Therefore, the Treasury Department and IRS correct proposed § 1.56A-19(g)(4)(iii) and (g)(5)(iii) to clarify that, if the amount of boot issued by the section 351 transferee to a section 351 transferor that is not an applicable corporation is less than ten percent of the fair market value of the assets transferred to the section 351
This document also contains corrections for other errors contained in the notice of proposed rulemaking (REG-112129-23) that need to be corrected.
Accordingly, FR Doc. 2024-20089 (REG-112129-23), appearing on page 75062 in the
1. On page 75063, in the third column, in the first partial paragraph, in the fifth line down from the top of the paragraph, the language “56(c)(3)(A)” is corrected to read “56A(c)(3)(A)”.
2. On page 75065, in the first column, in the second full paragraph, in the fifth line up from the bottom of the paragraph, the language “AFSI Tests” is corrected to read “AFSI tests”.
3. On page 75066, in the second column, in the first paragraph, in the third line down from the top of the paragraph, the language “2024-3 I.R.B.” is corrected to read “2024-3 I.R.B. 406”.
4. On page 75074, in the second column, in the first partial paragraph, in the tenth line up from the bottom of the paragraph, the language “388(g)” is corrected to read “338(g)”.
5. On page 75075, in the first column, in the thirteenth line up from the bottom of the page, the language “asset acquisition” is corrected to read “asset transaction”.
6. On page 75080, in the first column, the third line down from the top of the page is corrected to read “distributive share amount that is disallowed”.
7. On page 75086, in the third column, in the first full paragraph, the eighth line up from the bottom of the paragraph is corrected to read, “ending after December 31, 2019,”.
8. On page 75088, in the third column, in the first partial paragraph, the ninth line down from the top of the paragraph is corrected to read “in method of accounting for depreciation or a tax”.
9. On page 75088, in the third column, in the first full paragraph, in the ninth line up from the bottom of the paragraph, the language, “§ 1.56A-(d)(1)(iii)” is corrected to read, “§ 1.56A-15(d)(1)(iii)”.
10. On page 75089, in the third column, in the first full paragraph, the language, “§ 1.56A-15(e)(7)” is corrected to read, “§ 1.56A-15(e)(8)”.
11. On page 75090, in the second column, in the first full paragraph, the second line up from the bottom of the paragraph is corrected to read “ending on or before December 31,”.
12. On page 75090, in the second column, in the second full paragraph, the second line up from the bottom of the paragraph is corrected to read “ending on or before December 31,”.
13. On page 75091, in the second column, in the first full paragraph, the eighth line up from the bottom of the paragraph is corrected to read “taxable years ending on or before”.
14. On page 75101, in the first column, in the first partial paragraph:
i. The ninth and eighth lines up from the bottom of the paragraph are corrected to read, “causing the deferred sale gain or loss to be accelerated into AFSI in”.
ii. The fifth line up from the bottom of the paragraph is corrected to read “sum of (A) the deferred sale gain or loss that”.
15. On page 75101, in the third column, in the first partial paragraph, the last line of the paragraph is corrected to read “in which the distribution occurs unless the special rule in proposed § 1.56A-20(d)(1)(ii)(E) would apply to the timing of the inclusion.”.
16. On page 75103, in the third column, in the first partial paragraph, the seventh and sixth lines up from the bottom of the paragraph are corrected to read “which an acceleration or partial acceleration event described in § 1.721(c)-4(b) or § 1.721(c)-5(d), respectively, occurred; and (D) the”.
17. On page 75105, in the second column, in the first partial and first full paragraphs, the language “Section 168 Property”, is corrected to read “section 168 property”, everywhere it appears.
18. On page 75113, in the first column, the heading “3. Corporation in Existence for Less Than Three Taxable Years” is corrected to read “3. Corporation in Existence for Less Than Three Taxable Years and Short Taxable Years”.
19. On page 75120, in the first column, in the second partial paragraph, in the twelfth line up from the bottom of the paragraph, the language “section 904” is corrected to read “section 901”.
20. On page 75120, in the third column, the heading “
21. On page 75124, in the third column, in the second full paragraph, in the ninth line down from the top of the paragraph, the language “beginning after” is corrected to read “ending after”.
22. On page 75125, in the second column, in the first full paragraph, in the eighteenth line down from the top of the paragraph, the language “beginning after” is corrected to read “ending after”.
23. On page 75125, in the second column, in the first full paragraph, in the twenty-third line down from the top of the paragraph, following the word “holds”, the word “the” is removed.
24. On page 75125, in the third column, in the first paragraph, in the tenth line down from the top of the paragraph, the language “beginning after December 31, 2019.” is corrected to read “ending after December 31, 2019.”.
25. On page 75127, in the first column, in the last partial paragraph, in the fourth line up from the bottom of the page, following the word “applicable”, the language “and also apply all of the rules in proposed §§ 1.56A-4 and 1.56A-6 that apply to transfers (as defined in proposed § 1.56A-4(b)(3)) to any transfers occurring in such taxable years” is added.
26. On page 75127, in the first column, in the last partial paragraph, the second line up from the bottom of the page is corrected to read “and 1.56A-6 that apply to transfers,” and the last line of the page is removed.
27. On page 75127, in the second column, in the first partial paragraph, in the fifth line up from the bottom of the paragraph, following the language “September 13, 2024,” the language “during a taxable year of the taxpayer and each subsequent taxable year until the final regulations are applicable to such transfers,” is added.
28. On page 75127, in the second column, in the first full paragraph, following the word “applicable” in the sixteenth line up from the bottom of the paragraph, the language “and also apply all of the rules described in proposed §§ 1.56A-4 and 1.56A-6 that apply to any transfers occurring in such taxable years” is added.
29. On page 75130, in the second column, under the authority citation for Part 1, in the last paragraph in the column, in the entry for §§ 1.1502-53 and 1.1502-56A, the language
30. On page 75135, in the third column, the entry for § 1.56A-20(c)(2)(iv) is corrected to read as follows:
(c) * * *
(2) * * *
(iv) Inclusion of deferred sale gain upon an acceleration or partial acceleration event described in § 1.721(c)-4(b) or § 1.721(c)-5(d).
31. On page 75136, in the second column, the entries for § 1.56A-21(c)(6) introductory text and (c)(6)(i) through (iv) are redesignated as entries for § 1.56A-21(c)(7) introductory text and (c)(7)(i) through (iv), and a new entry for § 1.56A-21(c)(6) is added to read as follows:
(c) * * *
(6) Exclusion from AFSI.
(7) Examples.
(i) Example 1: Bankruptcy emergence in a covered nonrecognition transaction.
(ii) Example 2: Bankruptcy emergence in a covered recognition transaction.
(iii) Example 3: Attribute reduction.
(iv) Example 4: Excluded income from the discharge of indebtedness of insolvent taxpayer.
32. On page 75140, in the second column, in paragraph (c)(4)(ii), the last line of the paragraph is corrected to read “18(c)(3) and (4) and 1.56A-4(c)(4) and (d)(4)).”
33. On page 75142, in the first column, in paragraph (d)(4):
i. The paragraph heading is corrected to read, “(4)
ii. The third line down from the top of the paragraph is corrected to read, “the section 56A regulations, if income, expense, gain or”.
iii. The seventh line up from the bottom of the paragraph is corrected to read, “different from its AFS basis, and if such income, expense,”.
iv. The fourth line up from the bottom of the paragraph is corrected to read, “regulations, then such income, expense, gain or loss”.
34. On page 75154, in the third column, in paragraph (k)(4)(i), in the sixth and fourth lines up from the bottom of the paragraph, the language “AFS $50” is corrected to read “AFS $50x”.
35. On page 75155, in the first column, in paragraph (k)(5)(i):
i. In the fifth line down from the top of the page, the language “AFS $75” is corrected to read “AFS $75x”.
ii. In the sixth and eighth lines down from the top of the page, the language “AFS $50” is corrected to read “AFS $50x”.
36. On page 75155, in the third column, in paragraph (k)(7), the eighth line up from the bottom of the paragraph is corrected to read, “property owned by PRS1. As a result of”.
37. On page 75163, in the second column:
i. In paragraph (b)(11)(i), in the third line up from the bottom of the paragraph, the language “beginning after” is corrected to read “ending after”.
ii. In paragraph (b)(11)(ii), the fifth line up from the bottom of the paragraph, the language “beginning after December 31, 2019,” is corrected to read “ending after December 31, 2019,”.
38. On page 75165, in the first column, in paragraph (d)(4), the seventh line up from the bottom of the column is corrected to read, “taxable year were a full 12-month taxable”.
39. On page 75168, in the first column, in paragraph (d)(5)(v)(C), in the thirteenth line up from the bottom of the paragraph, the number “481” is corrected to read, “481(a)”.
40. On page 75168, in the second column, in paragraph (d)(5)(v)(D):
i. The thirteenth line down from the top of the page is corrected to read, “taxable years ending after”.
ii. The twentieth and twenty-first lines down from the top of the page are corrected to read “respect to taxable years ending after December 31, 2019, and before the”.
iii. The ninth and tenth lines up from the bottom of the paragraph are corrected to read, “to taxable years ending after December 31, 2019, and before the tax”.
41. On page 75168, in the third column, in paragraph (d)(5)(vi)(B), in the thirteenth line up from the bottom of the paragraph, the word “be” is removed.
42. On page 75169, in the first column, in paragraph (d)(5)(vi)(C):
i. The eighth line down from the top of the page is corrected to read, “ending after December 31, 2019,”.
ii. The sixteenth line down from the top of the page is corrected to read, “ending after December 31, 2019,”.
iii. The eighth line up from the bottom of the paragraph is corrected to read “years ending after December 31,”.
43. On page 75170, in the first column, in paragraph (d)(5)(ix)(A), the sixth line up from the bottom of the paragraph is corrected to read, “PRS1. As a result of the basis adjustment,”.
44. On page 75170, in the second column, in paragraph (d)(5)(x)(A), the fourth line up from the bottom of the paragraph is corrected to read, “As a result of the basis adjustment, X is”.
45. On page 75173, in the second column, in paragraph (e)(8)(iii)(B), the third line up from the bottom of paragraph is corrected to read, “following the Exchange/40 years) of”.
46. On page 75174, in the first column, in paragraph (e)(8)(iv)(A):
i. In the fifth line up from the bottom of the paragraph, the number “$50” is corrected to read “$50x”.
ii. The fourth line up from the bottom of the paragraph is corrected to read “sale of Property A ($900x”.
iii. In the third line up from the bottom of the paragraph the number “$850” is corrected to read “$850x”.
iv. The last line of the paragraph is corrected to read, “expense)).”.
47. On page 75176, in the first column, in paragraph (e)(8)(ix)(B), in the sixth line up from the bottom of the page, the word “to” is corrected to read “into”.
48. On page 75176, in the third column, in paragraph (e)(8)(xi)(A), the seventh line up from the bottom of the paragraph is corrected to read “owned by PRS1. As a result of the basis”.
49. On page 75177, in the first column, in paragraph (e)(8)(xi)(C), the second line up from the bottom of the paragraph is corrected to read “§ 1.56A-5(e)(1)(iv) and (e)(4)(ii)(A),”.
50. On page 75177, in the second column, in paragraph (b)(8)(i), the third line up from the bottom of the paragraph is corrected to read, “to taxable years ending after”.
51. On page 75177, in the second column, in paragraph (b)(8)(ii), the sixth line up from the bottom of the paragraph is corrected to read, “with respect to taxable years ending”.
52. On page 75179, in the first column, in paragraph (e)(2)(ii)(D), the tenth line up from the bottom of the page is corrected to read “adjustments described in paragraphs”.
53. On page 75180, in the third column, in the first full paragraph, in paragraph (c)(2)(i)(A), the second line up from the bottom of the paragraph is corrected to read “ending on or before December 31,”.
54. On page 75180, in the third column, in paragraph (c)(2)(ii)(A), in the second line up from the bottom of the paragraph, the language “beginning on or before” is corrected to read “ending on or before”.
55. On page 75180, in the third column, the paragraph heading for paragraph (c)(3)(ii)(A) is corrected to read, “(ii)
56. On page 75181, in the third column, in paragraph (d)(1)(i):
i. In the twenty-fourth line up from the bottom of the paragraph, the language “beginning after December” is corrected to read “ending after December”.
ii. In the sixth line up from the bottom of the paragraph, the language “taxable years beginning” is corrected to read “taxable years ending”.
57. On page 75182, in the third column, paragraph (g) is corrected to read as follows:
(g)
(2)
58. On page 75182, in the third column, in paragraph (a)(2)(i), in the third line down from the top of the paragraph, the language “shareholders of other” is removed.
59. On page 75183, in the third column, in paragraph (b)(9)(i), in the last line of the column, the word “respectively,” is removed.
60. On page 75184, in the first column, in paragraph (b)(12)(i)(A), in the second line of the paragraph, the language “the corporation” is corrected to read “that party or property”.
61. On page 75184, in the third column, paragraph (b)(19)(xv) is corrected to read “(xv) A transferor corporation; and”.
62. On page 75186, in the second column, the last sentence in paragraph (c)(6) is removed.
63. On page 75187, in the second column, in paragraph (c)(8)(vi)(C), in the second line up from the bottom of the page, the word “transaction” is corrected to read “exchange”.
64. On page 75187, in the third column, in paragraph (c)(8)(vi)(E), in the third line up from the bottom of the paragraph, the word “transaction” is corrected to read “exchange”.
65. On page 75188, in the third column, in paragraph (d)(4)(iv), the second line of the paragraph is corrected to read “recipient's CAMT basis in the other property”.
66. On page 75189, in the first column, in paragraph (d)(5)(i)(A), the first partial paragraph, the fourth line down from the top of the page is corrected to read “issued stock with a fair market value of $25x to X (that is, a distribution”.
67. On page 75189, in the third column, in paragraph (d)(5)(iv)(B), the last two lines up from the bottom of the paragraph are corrected to read “section 312 by the amount of AFSI, or $12.5x.”.
68. On page 75190, in the first column, in paragraph (e)(2)(ii), the last three lines of the paragraph are corrected to read “equal to the target corporation's AFS basis in that property that would obtain if the transaction were treated as an asset sale for AFS purposes.”.
69. On page 75190, in the third column, in paragraph (e)(6), the last two lines of the paragraph are corrected to read “AFS basis in that property that would obtain if the transaction were treated as an asset sale for AFS purposes.”.
70. On page 75190, in the third column, in paragraph (e)(7)(i), in the tenth line down from the top of the paragraph, the language “a regular tax” is corrected to read “an AFS”.
71. On page 75190, in the third column, in paragraph (e)(7)(ii), the last line of the page is corrected to read “Distributing applies section 336(e) to the”.
72. On page 75191, in the first column, in paragraph (e)(7)(ii), the first partial paragraph, in the fourth line up from the bottom of the paragraph, the number “$66x” is corrected to read “$60x”.
73. On page 75191, in the first column, in the first partial paragraph, paragraph (e)(7)(ii), in the last line of the paragraph, the language “regular tax” is corrected to read “AFS”.
74. On page 75193, in the first column, in paragraph (g)(4), the last two lines of the paragraph are corrected to read “corporation's AFS basis in that property that would obtain if the transaction were treated as an asset sale for AFS purposes.”.
75. On page 75193, in the first column, in paragraph (g)(6)(i)(A), in the second line up from the bottom of the paragraph, the language “and a value of $30x” is removed.
76. On page 75193, in the second column, in the first partial paragraph, paragraph (g)(6)(ii)(B), in the last line of the paragraph, the language “regular tax” is corrected to read “AFS”
77. On page 75193, in the second column, in paragraph (g)(6)(iii)(A), in the fourteenth line up from the bottom of the paragraph, the language “regular tax” is corrected to read “AFS”.
78. On page 75193, in the second column, in paragraph (g)(6)(iii)(B), the last two lines of the paragraph are corrected to read “assets is equal to new Target's AFS basis in those assets, or $100x.”.
79. On page 75194, in the third column, in paragraph (b)(4)(i), the eighth line up from the bottom of the paragraph is corrected to read “paragraphs (b)(1) and (3) of this”.
80. On page 75195, in the second column, in paragraph (b)(7)(ii):
i. The seventh line down from the top of the paragraph is corrected to read “of Acquiror nonvoting stock.” and the eighth line down from the top of the paragraph is removed.
ii. The thirteenth through tenth lines up from the bottom of the paragraph are corrected to read “determines its AFSI by redetermining any FSI reflected in its AFS resulting from the transaction by reference to its CAMT basis in the Target stock. As a result, X”.
81. On page 75196, in the third column, in the first full paragraph, paragraph (c)(8)(i)(A), in the fourth line up from the bottom of the paragraph, the language “and a value of $30x” is removed.
82. On page 75198, in the second column, in paragraph (d)(6)(i)(A), the seventeenth line up from the bottom of the paragraph is corrected to read “transactions that qualify for nonrecognition treatment under section”.
83. On page 75198, in the second column, in paragraph (d)(6)(i)(B), the sixth line up from the bottom of the page is corrected to read, “Contribution, or $0x. Additionally, under paragraph (d)(1)(i)(C) of this section, Distributing adjusts its CAMT earnings resulting from the Controlled Split-Off by applying section 312. Under paragraph”.
84. On page 75198, in the third column, in paragraph (d)(6)(ii)(A), the seventh line up from the bottom of the paragraph is corrected to read “$200x, and additionally Controlled transfers $10x cash to”.
85. On page 75198, in the third column, in paragraph (d)(6)(iii)(A), the seventh through third lines up from the bottom of the page are corrected to read “$210x, and additionally Distributing receives $20x of cash. Distributing distributes only $15x of the cash received from Controlled to its shareholders.”.
86. On page 75199, in the first column, in paragraph (d)(6)(iii)(B):
i. In the second through seventh lines down from the top of the paragraph, the language, “Distributing distributed Controlled securities with a fair market value of more than the adjusted basis of the property transferred to Controlled, resulting in gain to Distributing under section 361(b)(3),” is removed and the language “Distributing did not purge all of the boot received from Controlled in the Contribution,” is added in its place.
ii. The ninth line down from the top of the paragraph is corrected to read “is a covered recognition transaction.
iii. The last line of the paragraph is corrected to read “$190x. Under paragraph (d)(5)(i)(A) of this section, the Contribution is a covered recognition transaction to Controlled. Under paragraph (d)(5)(ii)(B) of this section Controlled's CAMT basis in the property received from Distributing is its AFS basis, or $210x.”.
87. On page 75199, in the first column, in paragraph (d)(6)(iii)(C), the sixth line down from the top of the paragraph is corrected to read “of this section (
88. On page 75199, in the second column, in paragraph (e)(2)(ii), the fourth and third lines up from the bottom of the paragraph are corrected to read “or security holder.
89. On page 75201, in the third column, in paragraph (g)(4)(ii), in the third line up from the bottom of the paragraph, the language “CAMT gain” is corrected to read “AFSI”.
90. On page 75201, in the third column, the introductory text of paragraph (g)(4)(iii) is corrected to read as follows:
(g) * * *
(4) * * *
(iii)
91. On page 75202, in the first column, the introductory text of paragraph (g)(5)(iii) is corrected to read as follows:
(g) * * *
(5) * * *
(iii)
92. On page 75202, in the second column, in paragraph (g)(6), the last line of the introductory text is corrected to read “of a tax consolidated group. Additionally, X is a section 351 transferor, and Y is a section 351 transferee.”.
93. On page 75202, in the second column, in paragraph (g)(6)(i):
i. The language “Acquiror” is removed, and the language “X” is added in its place, everywhere it appears.
ii. The language “Target” is removed, and the language “Y” is added in its place everywhere it appears.
94. On page 75202, in the second column, in paragraph (g)(6)(ii)(A):
i. In the third line up from the bottom of the paragraph, the language “Acquiror” is corrected to read “X”.
ii. In the second line up from the bottom of the paragraph, the language “Target” is corrected to read “Y”.
95. On page 75202, in the second and third columns, paragraph (g)(6)(ii)(B) is corrected to read as follows:
(g) * * *
(6) * * *
(ii) * * *
(B)
96. On page 75202, in the third column, in paragraph (g)(6)(iii)(A):
i. In the fourth line up from the bottom of the paragraph, the language “X” is corrected to read “Z”.
ii. The language “Target” is corrected to read “Y”, everywhere it appears,
97. On page 75202, in the third column, in paragraph (g)(6)(iii)(B):
i. The language “X” is corrected to read “Z” everywhere it appears.
ii. The language “Acquiror” is corrected to read “X” everywhere it appears.
iii. The language “Target” is corrected to read “Y” everywhere it appears.
98. On page 75202, in the third column, in paragraph (g)(6)(iv)(A):
i. In the fourth line up from the bottom of the paragraph, the language “Acquiror” is corrected to read “X”.
ii. In the second line up from the bottom of the paragraph, the language “Target” is corrected to read “Y”.
99. On page 75202, in the third column, in paragraph (g)(6)(iv)(B):
i. The second line down from the top of the paragraph is corrected to read “transferred by Y to X in the”.
ii. In the fifth line down from the top of the paragraph, the language “Target” is corrected to read “Y”.
iii. In the sixth line down from the top of the paragraph, the language “Acquiror” is corrected to read “X”.
iv. The last five lines of the page are corrected to read “Y's CAMT basis in the assets received from X is determined under section 362, using CAMT basis in lieu of AFS basis, increased by any gain recognized by X for regular tax purposes, or $45x ($40x + $5x).”.
100. On page 75203, in the first column, the first two lines of the page are removed.
101. On page 75203, in the first column, in paragraph (a)(1), in the twelfth and thirteenth lines down from the top of the paragraph, the language “sets forth the scope of this section and” is removed.
102. On page 75203, in the third column, in paragraph (c)(2)(i)(E), the eighth line down from the top of the paragraph is corrected to read “year and thus subject to depreciation or amortization in”.
103. On page 75203, in the third column, the paragraph heading of paragraph (c)(2)(ii) is corrected to read “(ii)
104. On page 75204, in the first column, in paragraph (c)(2)(ii)(A), the fifth line up from the bottom of the paragraph is corrected to read “(c)(2)(ii) as a result of a decrease in the”.
105. On page 75204, in the second column, the paragraph heading of paragraph (c)(2)(iv) is corrected to read “(iv)
106. On page 75204, in the third column, in paragraph (c)(3)(ii)(B), the second and third lines of the paragraph are corrected to read “causing the deferred sale gain or loss to be accelerated into AFSI in”.
107. On page 75205, in the second column, in paragraph (d)(1)(ii)(C), in the fourth line down from the top of the page, the word “sale” is corrected to read “distribution”.
108. On page 75205, in the second column, in paragraph (d)(1)(ii)(D), in the second to last line of the paragraph, the word “sale” is corrected to read “distribution”.
109. On page 75205, in the second column, in paragraph (d)(1)(ii)(E), in the fourth line up from the bottom of the paragraph, the word “sale” is corrected to read “distribution”.
110. On page 75206, in the third column, paragraph (g)(2)(i)(C) is corrected to read, “(C) The date on which an acceleration event or partial acceleration event described in § 1.721(c)-4(b) or § 1.721(c)-5(d), respectively, occurred; and”.
111. On page 75207, in the third column, in paragraph (h)(3)(ii)(B), in the second line down from the top of the page, the number “$437.5” is corrected to read “$437.5x”.
112. On page 75207, in the third column, in paragraph (h)(5)(ii), in the second and tenth lines up from the bottom of the paragraph, the number “$5,000” is corrected to read “$5,000x”.
113. On page 75209, in the third column, in paragraph (b)(3)(iii):
i. The last line of the introductory text is corrected to read “indebtedness of the CAMT entity that results from—“.
ii. Paragraph (b)(3)(iii)(A) is removed.
iii. Paragraph (b)(3)(iii)(B) is redesignated as new paragraph (b)(3)(iii)(A) and the first line of the newly redesignated paragraph is corrected to read “(A) The satisfaction”.
iv. Paragraph (b)(3)(iii)(C) is redesignated as new paragraph (b)(3)(iii)(B) and the first line of the newly redesignated paragraph is corrected to read “(B) The satisfaction”.
114. On page 75210, in the third column, in the first partial paragraph, paragraph (c)(4)(iv)(A), in the last line of the paragraph, the language “
115. On page 75211, in the first column, paragraph (c)(6) is redesignated as paragraph (c)(7) and new paragraph (c)(6) is added to read as follows:
(c) * * *
(6)
116. On page 75211, in the first column, in newly redesignated paragraph (c)(7), the last line of the introductory text is corrected to read “of a tax consolidated group, and the exclusion in paragraph (c)(6) of this section does not apply.”.
117. On page 75211, in the first column, in newly redesignated paragraph (c)(7)(i)(A), the third line up from the bottom of the paragraph is corrected to read “the discharge of indebtedness. X has no other items of income, gain, deduction, or loss for its 2024 taxable year. Y”.
118. On page 75211, in the second column, in newly redesignated paragraph (c)(7)(ii)(A), in the fourth line down from the top of the paragraph, the language “paragraph (c)(6)(i)(A)” is corrected to read “paragraph (c)(7)(i)(A)”.
119. On page 75211, in the third column, in newly redesignated paragraph (c)(7)(iv)(A), in the fifth line down from the top of the paragraph, the language “(c)(6)(iii)(A)” is corrected to read “(c)(7)(iii)(A)”.
120. On page 75211, in the third column, in newly redesignated paragraph (c)(7)(iv)(B), the tenth line down from the top of the paragraph is corrected to read “of computing its AFSI.
121. On page 75211, in the third column, in paragraph (d)(2)(i), the last line on the page is corrected to read “
122. On page 75212, in the first column, in paragraph (d)(2)(i), the first five lines of the page are corrected to read “emergence from bankruptcy by a CAMT entity, the CAMT entity determines its CAMT consequences resulting from that emergence (and not as the result of a discharge of indebtedness or covered recognition transaction, as provided in paragraphs (d)(2)(ii) and (iii) of this section) by—”.
123. On page 75214, in the first column, in paragraph (c)(2)(ii), in the eleventh line up from the bottom of the paragraph, the word “section” is removed.
124. On page 75215, in the third column, paragraph (e)(2)(i) is corrected to read “(i) A transaction described in section 381(a) of the Code; or”.
125. On page 75216, in the first column, in paragraph (e)(3)(i)(B), the last line of the paragraph is corrected to read “section and the exceptions in paragraph (e)(3)(v) of this section.”.
126. On page 75216, in the third column, the paragraph heading of paragraph (e)(4)(i) is corrected to read “(i)
127. On page 75216, in the third column, in paragraph (e)(4)(i)(A):
i. In the seventh line up from the bottom of the paragraph, the language “assets” is corrected to read “assets that do not constitute a line of business”.
ii. In the sixth line up from the bottom of the paragraph, the language “(Expansion)” is corrected to read “(Contribution)”.
iii. In the fifth line up from the bottom of the paragraph, the language “Expansion” is corrected to read “Contribution”.
128. On page 75218, in the second column, in paragraph (f)(4)(iii), in the third line up from the bottom of the paragraph, the language “RBIL” is
129. On page 75218, in the second column, in paragraph (f)(5)(i);
i. In the eighth line up from the bottom of the paragraph, the language “an unrealized loss” is corrected to read “a built-in loss”.
ii. In the sixth line up from the bottom of the paragraph, the language “an unrealized gain” is corrected to read “a built-in gain”.
130. On page 75221, in the third column, in paragraph (d)(1), the fourth and fifth lines up from the bottom of the paragraph are corrected to read, “CAMT entity must adjust its AFSI with respect to that transaction to reflect”.
131. On page 75223, in the third column, in paragraph (c)(2)(ii)(B), in the sixth line down from the top of the paragraph, the language “(c)(2)(i)(C)” is corrected to read “(c)(2)(ii)(C)”.
132. On page 75226, in the first and second columns, paragraph (f)(2)(i) is corrected to read as follows:
(f) * * *
(2) * * *
(i)
(
(
(B)
(C)
(
(
(
133. On page 75227, in the first, second, and third columns, in paragraphs (f)(3)(i)(D) and (E) and (f)(3)(ii)(C), the reference “(b)(6)” is corrected to read, “(b)(7)”, everywhere it appears.
134. On page 75228, in the first column, in paragraph (g)(2)(iii)(B), the second and third lines down from the top of the paragraph are corrected to read, “than the AFSI adjustments in §§ 1.56A-8(b), 1.56A-14, and, solely for purposes of”.
135. On page 75238, in the second column, in paragraph (d)(3)(i):
i. The fifth and sixth lines up from the bottom of the paragraph are corrected to read, “
ii. The second line up from the bottom of the paragraph is corrected to read “(shareholder member) on the first day of the first taxable year beginning after December 31, 2019, the CAMT basis of such share equals the sum”.
136. On page 75238, in the second column, in paragraph (d)(3)(ii):
i. In the fifth line up from the bottom of the paragraph, the language “The CAMT basis in a” is corrected to read “For each”.
ii. The last line of the paragraph is corrected to read “consolidated group after the first day of the first taxable year beginning after December 31, 2019, the CAMT basis of such share equals the sum of:”.
137. On page 75238, in the second column, in paragraph (d)(3)(iii)(A), in the fourth line up from the bottom of the page, the word “including” is corrected to read “incorporating”.
138. On page 75239, in the first column, in paragraph (e)(4)(i)(B), the third line up from the bottom of the paragraph is corrected to read “elimination)). Accordingly, the P Group's”.
139. On page 75240, in the third column, in paragraph (f)(6)(ii), the sixth and fifth lines up from the bottom of the paragraph are corrected to read “apportioned to M2 (($20x/($20x + $40x + $5x)) × $55x = $16.9x).
140. On page 75243, in the first column, in paragraph (j)(3)(ii), the second to last and last lines of the paragraph are corrected to read “is apportioned to T (($200x/($200x + $1,000x)) × $165x = $27.5x).”.
Office of the Secretary, Treasury.
Notice of proposed rulemaking, notice of public hearing, and withdrawal of notice of proposed rulemaking.
This document contains proposed amendments to the regulations governing practice before the IRS. These regulations propose to eliminate provisions related to
Electronic or written comments must be received by February 24, 2025. The public hearing is being held on March 6, 2025, at 10 a.m. Eastern Time (ET). Requests to speak and outlines of topics to be discussed at the public hearing must be submitted as prescribed in the “Comments and Public Hearing” section. The IRS must receive speakers' outlines of the topics to be discussed at the public hearing by February 24, 2025. If no outlines are received by February 24, 2025, the public hearing will be cancelled. Requests to attend the public hearing must be received by 5 p.m. ET on March 4, 2025. As of December 26, 2024, the notice of proposed rulemaking (REG-113289-08) published on July 28, 2009 (74 FR 37183), is withdrawn.
Commenters are strongly encouraged to submit public comments electronically. Submit electronic submissions via the Federal eRulemaking Portal at
Concerning the proposed regulations, William J. Prater at (202) 317-6251; concerning submissions of comments or the public hearing, The Publications and Regulations Section at (202) 317-6901 (not toll-free numbers) or by sending an email to
This document contains proposed regulations that would amend the regulations under 31 U.S.C. 330 relating to the regulation of practice before the IRS, which are codified at 31 CFR part 10 and reprinted as Treasury Department Circular No. 230 (Circular 230). Since 1884, Federal law (now codified at 31 U.S.C. 330), has expressly authorized the Secretary of the Treasury (Secretary) to regulate practice before the Treasury Department. Specifically, 31 U.S.C. 330(a) provides that subject to section 500 of title 5, the Secretary may “regulate the practice of representatives of persons before the Department of the Treasury.” In addition, before admitting a representative to practice, the Secretary may require that the representative demonstrate “good character,” “good reputation,” the “necessary qualifications to enable the representative to provide to persons valuable service,” and “competency to advise and assist persons in presenting their cases.”
The provisions of 31 CFR part 10 are currently designated as §§ 10.0 through 10.93 and a section of the current regulations is referred to as, as an example, “current § 10.0” in this Background and the Explanation of Provisions. Circular 230, which contains current §§ 10.0 through 10.93 related to governing practice before the IRS, has been amended periodically since it was first published in 1921.
Prior to 2011, individual tax return preparers were generally not subject to Circular 230 unless the tax return preparer was an attorney, certified public accountant (CPA), enrolled agent (EA), or other type of practitioner identified in Circular 230. On June 3, 2011, the Treasury Department and the IRS published final regulations (TD 9527) in the
The 2011 amendments were challenged in
Final regulations (TD 9359) published in the
On July 28, 2009, the Treasury Department and the IRS published in the
In 2014, the District Court for the District of Columbia held that preparing and filing ordinary refund claims, like preparing original tax returns, did not involve representing taxpayers or practice before the IRS.
Circular 230 was most recently amended in TD 9668, which was published in the
The proposed regulations contained in this notice of proposed rulemaking would amend Circular 230 by eliminating provisions related to registered tax return preparers or that imposed standards on tax return preparation that are unrelated to representation before the Treasury Department and the IRS. The proposed regulations would also amend Circular 230 by eliminating current § 10.27, which, among other things, treats the preparation of tax returns and claims for refund or credit as matters before the IRS for which contingent fees may not be charged, and defining certain contingent fee arrangements as disreputable conduct. Specifically, the proposed regulations would establish that contingent fee arrangements for services in connection with preparing an original tax return, amended tax return, or claim for refund or credit constitute disreputable conduct subject to sanction. Because the proposed regulations would make substantial changes to the regulation of contingent fees under Circular 230, this document also proposes to withdraw the 2009 proposed regulations.
The proposed regulations would also revise or eliminate provisions that are out of date and incorporate new provisions to better align Circular 230 with the modern practice environment. The scope of the proposed regulations is limited to practice before the IRS. Therefore, the proposed regulations would not alter or supplant other ethical standards applicable to practitioners.
A section of the proposed regulations is referred to as, as an example, “proposed § 10.0” in this Explanation of Provisions and the Special Analyses.
As a result of the decision and injunction order in
Circular 230 contains provisions that are unrelated to the registered tax return preparer program but impose specific standards on tax return preparation. Consistent with the holding in
Current § 10.8 provides rules related to tax return preparation, describes actions that individuals who did not prepare all, or substantially all, of a tax return can take before the IRS, and prohibits non-practitioners from preparing all, or substantially all, of a tax return. The proposed regulations would eliminate the current language under § 10.8 in its entirety. However, guidance regarding what actions non-practitioners may take in response to IRS inquiries is still necessary and authorized under 31 U.S.C. 330. Therefore, the proposed regulations would retitle current § 10.8 as “Participation in IRS proceedings by non-practitioners” and would provide that, except for appraisers who have been disqualified pursuant to proposed § 10.61(a), any individual may appear as a witness before the IRS or furnish information at the request of the IRS.
Current § 10.22 imposes standards related to diligence as to accuracy, including standards related to the preparation or approval of tax returns, documents, affidavits, and other papers. The proposed regulations would revise current § 10.22 to specify that the diligence as to the accuracy requirement for tax returns is limited to tax returns prepared, approved, or submitted in connection with representing a client in a matter before the IRS. The proposed regulations would not revise existing diligence standards related to documents, affidavits, and other papers that are not tax returns. The diligence requirements in the proposed regulations would also apply to a practitioner's preparation of a tax return prior to representing a client in a matter before the IRS when the subsequent representation involves the tax return. When the representation involves a tax return prepared by a practitioner, the practitioner's diligence with respect to preparing the tax return would be treated under the proposed regulations as related to the practitioner's practice before the IRS under 31 U.S.C. 330(a).
Current § 10.34 imposes standards with respect to a practitioner's preparation of tax returns and other documents. The current regulations incorporate standards under the Code relating to tax return positions, describe standards for advising clients with
Current § 10.27 prohibits practitioners from entering into contingent fee arrangements for services rendered in connection with a “matter before the IRS,” which § 10.27(c)(2) defines to include assisting with filing tax returns or claims for refund or credit and “all matters connected with a presentation to the [IRS] . . . relating to a taxpayer's rights, privileges, or liabilities under the laws and regulations administered by the [IRS].” Current § 10.27 was intended to restrict contingent fee arrangements based on their potential to encourage practitioners and their clients to take aggressive positions with the hope that they will not be audited.
As described in the Background, the District Court for the District of Columbia held in
The proposed regulations would remove current § 10.27 and, under subpart C, define disreputable conduct under proposed § 10.51 to include both charging contingent fees in connection with the preparation of an original or amended tax return or claim for refund or credit, and charging fees that, under the facts and circumstances, are unconscionable fees.
Charging a contingent fee for the preparation of an original return, amended return, or claim for refund or credit prepared prior to the examination of a tax return is disreputable conduct because these circumstances encourage evasion or abuse of Federal tax laws by incentivizing practitioners to take unduly aggressive tax positions for their clients, which would increase their clients' reported tax benefits, thus resulting in personal gain for the practitioner. A practitioner with a direct, financial interest in the tax benefits of a client may be incentivized to increase such tax benefits. Therefore, these contingent fee arrangements reflect conduct that is incompatible with ethical practice before the Treasury Department or the IRS under Circular 230.
Under 31 U.S.C. 330(c), the Treasury Department and the IRS have the authority to censure or suspend or disbar from practice before the Treasury Department or the IRS practitioners who engage in disreputable conduct whether or not the conduct constitutes representation of a client. Unlike the contingent fee standards under current § 10.27, proposed § 10.51 is not dependent upon the preparation of a tax return or claim for refund or credit constituting practice before the IRS. Charging contingent fees for preparing tax returns, amended returns, and claims for refund or credit is prohibited under the rules of professional conduct applicable to many accountants. The American Institute for Certified Public Accountants (AICPA) Code of Professional Conduct, for example, acknowledges the disreputable nature of contingent fees and prohibits CPAs from charging contingent fees for the preparation of original returns, amended returns, and ordinary refund claims because of the risk that these contingent fee arrangements would allow a CPA to benefit improperly from an interest in, or relationship with, a client.
Current § 10.3(e)(1) provides that enrolled retirement plan agents (ERPAs) may practice before the IRS. Current § 10.4(b) authorizes the IRS to grant status as ERPAs to individuals who demonstrate special competence in qualified retirement plan matters by passing a written examination and who have not engaged in any conduct that would justify suspension or disbarment under Circular 230. The IRS stopped offering the Enrolled Retirement Plan Agent Special Enrollment Examination (ERPA-SEE) on February 12, 2016, and no longer accepts applications for new enrollment as an ERPA. Because of a steady decline in ERPA-SEE test-takers, the cost to administer the ERPA-SEE no longer warranted offering the test.
Current § 10.4(d) provides that a former IRS employee, based on past service and technical experience in the IRS, may be granted enrollment as an EA or ERPA without testing if certain criteria are met. There is no statutory requirement that the IRS provide this exemption to former employees and administering requests for this waiver has consumed substantial IRS resources. Accordingly, the proposed regulations would eliminate the opportunity for former IRS employees to apply for a waiver of enrollment requirements as of 30 days after the date these regulations are published in the
Current § 10.5 includes ERPAs in the description of application procedures to become a practitioner under Circular 230. Because the IRS no longer offers
Current § 10.6(b) states that the IRS will provide confirmation of enrollment to EAs and ERPAs by issuing a registration card or certificate. Instead of specifying the form of confirmation, proposed § 10.6(b) would provide that the IRS will issue a document, which may be an enrollment card or other document. This revision would give the IRS flexibility as to the form of enrollment confirmation provided to practitioners in the future without requiring an amendment to the regulations.
Current § 10.6(d)(2) provides an explanation of the renewal period for EAs. Proposed § 10.6(d)(2) would make minor revisions to this description but makes no substantive changes to the renewal period or renewal process for EAs.
Proposed § 10.7(c)(1)(viii) would provide that individuals who possess a current Annual Filing Season Program (AFSP) Record of Completion may engage in limited practice, by representing taxpayers before the IRS with respect to tax returns or claims for refund or credit the individuals prepared and signed during a calendar year for which a Record of Completion was issued. The individual must have a valid Record of Completion for the calendar year in which the tax return or claim for refund or credit was prepared and signed and a valid Record of Completion for the year or years in which the representation occurs. AFSP participants generally are otherwise unenrolled preparers who, pursuant to Rev. Proc. 2014-42, 2014-29 I.R.B. 192 (July 14, 2014), voluntarily consent to be subject to Circular 230 duties and restrictions to participate in the AFSP, including prohibitions on incompetence or disreputable conduct, and must comply with the duties and restrictions to the extent they represent taxpayers before the IRS under the AFSP. The authority for the Treasury Department and the IRS to implement the AFSP was upheld by the D.C. Circuit, in
Under current § 10.9(a)(2), continuing education providers that provide education to practitioners on subject matters described under current § 10.6(f) must be approved by the IRS, obtain a continuing education number, and pay any applicable user fee. Continuing education providers must follow the procedures outlined under Rev. Proc. 2012-12, 2012-2 I.R.B. 275 (January 9, 2012) to become an accredited provider and obtain a continuing education provider number. Continuing education providers must renew their status annually by renewing their provider number and paying a user fee. Under current § 10.9(a)(4), continuing education providers must seek approval for individual continuing education programs and obtain a program number.
The continuing education program is administered by a third-party vendor through a five-year contract with the IRS. The vendor will charge continuing education providers a $650 application and renewal fee through 2025. Continuing education providers must renew for the upcoming calendar year before midnight on December 31 or incur late fees ranging between $100 and $200. Under the vendor's contract with the IRS, the vendor's fee is reviewed and approved by the IRS.
Because the IRS does not incur any direct costs to administer the continuing education program, it does not currently charge a separate user fee to recover costs. In the future, however, the IRS may charge a user fee if circumstances change. Any future user fee will be calculated pursuant to the Independent Offices Appropriation Act of 1952 (31 U.S.C. 9701) and OMB Circular A-25,
Current § 10.21 requires practitioners to advise a client of any noncompliance with internal revenue laws or any error or omission on a tax return or other document submitted to the IRS and the consequences under the Code and regulations of the noncompliance, error, or omission. Proposed § 10.21 would clarify that the noncompliance, error, or omission may have been made by either the client or the practitioner or a prior practitioner, such as if the practitioner or prior practitioner made an inadvertent mistake on a tax return prepared and filed for the client that the practitioner later discovers.
Proposed § 10.21 would expand the current guidance by requiring practitioners to explain actions the client should take to correct the noncompliance, error, or omission. Knowingly failing to inform a client of the noncompliance, error, or omission is disreputable conduct under 31 U.S.C. 330(c) because it causes practitioners to perpetuate false or misleading information to the IRS and potentially exposes the client to penalties and other adverse consequences. Proposed § 10.21 would also instruct practitioners to consider whether they can continue to meet their obligation to exercise diligence under proposed § 10.22(a) as to the accuracy of tax returns and other documents if the client refuses to take corrective action during the course of the practitioner's representation. A practitioner's obligation under proposed § 10.22(a) applies only to tax returns that are prepared, approved, or submitted in connection with representing a client in a matter before the IRS. Under those circumstances, the failure to correct inaccurate or unsupportable return positions would result in their perpetuation in submissions to the IRS during the course of the practitioner's representation. These changes would align Circular 230 with similar professional standards relating to knowledge of a client's error.
Current § 10.31 provides that a practitioner may not endorse or otherwise negotiate any check issued to a client by the Government in respect of a Federal tax liability, including directing or accepting payment by any means, electronic or otherwise, into an account owned or controlled by the practitioner or any firm or other entity with which the practitioner is associated. When it was last amended in 2014, this regulation was revised to clarify that the prohibition on practitioner negotiation of taxpayer tax refunds applied to the electronic environment in which both the IRS and practitioners operated. Proposed § 10.31 would maintain this prohibition and broaden it to apply to all electronic payments to clients with respect to a Federal tax liability, including prepaid debit cards, phone or mobile payments, or other forms of electronic payments, even if that payment method is not currently used by the Treasury Department. These changes
Current § 10.33 provides best practices for practitioners related to client representation. Proposed § 10.33 would replace references to “tax advisors” with “tax practitioners” to better align § 10.33 with descriptions used elsewhere in Circular 230.
Proposed § 10.33(a)(4) would provide that it is a best practice for practitioners to create a data security policy to maintain safeguards with respect to client information and establish a plan and procedures for responding to data breaches. Practitioners who also prepare returns have a legal obligation to comply with the Federal Trade Commission's Safeguards Rule under the Gramm-Leach Bliley Act, which requires businesses to implement safeguards, including a written information security plan, to protect the security, confidentiality and integrity of customer information. 16 CFR part 314 (2002). This proposed change acknowledges this duty and complements the newly proposed duty to maintain technological competence under proposed § 10.35 and better aligns Circular 230 with other professional standards.
Proposed § 10.33(a)(5) would provide that it is a best practice for practitioners to identify, evaluate, and address a mental impairment arising out of, or related to, age, substance abuse, a physical or mental health condition, or some other circumstance that could adversely impact a practitioner's ability to effectively represent a client before the IRS. An impairment, left untreated, can have adverse consequences on a client's representation and to the health and well-being of a practitioner. The purpose of proposed § 10.33(a)(5) is to encourage practitioners who are suffering from a mental impairment to seek and obtain assistance or treatment.
Proposed § 10.33(a)(6) would provide that it is a best practice for practitioners to establish a business continuity and succession plan that includes procedures and safeguards related to both the cessation of a practitioner's practice or the occurrence of an outside event, such as a natural disaster or cyberattack. Business continuity and succession planning are essential because they proactively protect clients in the event of a practitioner's death or disability or from the occurrence of an unforeseen event.
Finally, proposed § 10.33 would eliminate current § 10.33(b), which provides steps to ensure that a firm's procedures are consistent with best practices. Current § 10.33(b) would be duplicative of procedures under proposed § 10.36 to ensure compliance with subparts A, B, and C of part 10, which instructs practitioners to take reasonable steps to ensure that the firm's procedures are consistent with the best practices under proposed § 10.33(a).
Current § 10.35 provides that a practitioner must be competent when engaged in practice before the IRS. Specifically, practitioners are required to have the appropriate level of knowledge, skill, thoroughness, and preparation necessary for the matter in which the practitioner is engaged. Increasingly, competence also includes maintaining familiarity with technological tools used to represent a client. A similar standard for technological competency is included in the American Bar Association (ABA) Model Rules of Professional Conduct. Proposed § 10.35 is based on Comment 8 to ABA Model Rule 1.1 and would define competency to include understanding the benefits and risks associated with relevant technology used by the practitioner to provide services to clients or to store or transmit confidential information, including tax return information.
Current § 10.37 provides basic principles to which all practitioners must adhere when giving written tax advice. Circular 230 was amended in 2014 to eliminate the covered opinion rules (in former § 10.35) and replace them with broad standards for written tax advice under a current § 10.37.
This proposed change aligns standards for written tax advice under proposed § 10.37 more closely with the statutory language of 31 U.S.C. 330(e), which acknowledges that the Treasury Department may “impose standards applicable to the rendering of written advice with respect to any entity, transaction plan or arrangement, or other plan or arrangement, which is of a type which the Secretary determines as having a potential for tax avoidance or evasion.”
Current § 10.37(c)(1) imposes a reasonable practitioner standard, considering all of the facts and circumstances, to determine whether a practitioner has complied with the written advice standards under this section. Current § 10.37(c)(2) imposes the same reasonable practitioner standard in the case of an opinion the practitioner knows or has reason to know will be used by another person to promote, market, or recommend to one or more taxpayers a partnership or other entity, investment plan, or arrangement a significant purpose of which is the avoidance or evasion of any tax (Significant Purpose Transactions). Current § 10.37(c)(2) adds that, under the facts-and-circumstances analysis for Significant Purpose Transactions, emphasis will be “given to the additional risk caused by the practitioner's lack of knowledge of the taxpayer's particular circumstances.” Considering a practitioner's knowledge of the taxpayer's circumstances is generally relevant to whether a practitioner has satisfied written tax advice standards. Therefore, the proposed regulations would remove paragraph (c)(2) in current § 10.37 and proposed § 10.37(c) would include consideration of the practitioner's knowledge of the client's particular circumstances under the reasonable practitioner standard.
Current § 10.51 defines disreputable conduct for which a practitioner may be sanctioned. Incompetence or disreputable conduct under current § 10.51 is a basis for imposing sanctions against practitioners that is separate from a failure to meet the duties and abide by the restrictions relating to practice before the IRS under subpart B. Subpart C, retitled to relate to
Proposed § 10.50(a) would explain that a practitioner can be sanctioned for conduct that relates to the practitioner's overall fitness to practice and is not limited to actions taken while representing clients in a matter before the IRS. Proposed § 10.50(a)(12) would clarify that contemptuous conduct subject to sanction includes conduct in connection with practice before the IRS, any proceeding pursuant to redesignated proposed § 10.80 or any investigation by the Treasury Inspector General for Tax Administration. New proposed § 10.50(a)(19) would provide that the willful failure to follow any Federal tax law is disreputable conduct because knowingly violating a Federal tax law reflects a lack of due regard for the tax laws.
New proposed § 10.50(b) would provide that any assessment against a practitioner of penalties relating to a willful attempt to understate tax liabilities under section 6694(b); aiding or abetting in the understatement of tax liabilities under section 6701; careless, reckless, or intentional disregard for the rules or regulations (within the meaning of 26 CFR 1.6662-3(b)(2) and 1.6694-3(c)) under section 6662(b)(1); or promotion of abusive tax shelters under section 6700 will be considered a violation of proposed § 10.50(a)(7). The assessment of any of these penalties, however, would not be required to show a violation of proposed § 10.50(a)(7).
The proposed regulations would incorporate new subpart D, which provides definitions related to appraisers and standards for the disqualification of appraisers. Current § 10.50(b) references the authority of the Secretary, or her delegate, and the IRS to disqualify appraisers from presenting evidence or testimony in any administrative proceeding before the Treasury Department or the IRS. Current Circular 230, however, does not provide a separate definition of appraisers or what constitutes an administrative proceeding for purposes of disqualification. The proposed regulations would provide separate definitions for both appraisers and administrative proceedings and explain how they would relate to the new appraiser standards. Current § 10.60(b) provides that proceedings to disqualify appraisers can be instituted whenever a penalty has been assessed against an appraiser under the Code and the IRS determines that the appraiser acted willfully, recklessly, or through gross incompetence with respect to the conduct at issue.
This penalty prerequisite limits the IRS's ability to respond to misconduct under Circular 230 when the misconduct is not covered by a specific penalty, an applicable penalty is not imposed, or a proposed penalty assessment has not yet been made. There is no penalty prerequisite for appraiser disqualification under 31 U.S.C. 330, and the only procedural requirement for the disqualification of appraisers under 31 U.S.C. 330(d) is notice and an opportunity for a hearing. An appraiser's conduct may be disreputable or fail to conform to appraisal standards even when the IRS has not assessed a penalty or when no penalty under the Code is applicable. Therefore, the proposed regulations would eliminate the penalty prerequisite under current § 10.60(b) because it provides an unnecessary barrier to address misconduct.
Proposed § 10.61, under new subpart D, would require appraisals submitted in an administrative proceeding before the IRS to conform to the substance and principles of the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Standards Board of the Appraisal Foundation or the International Valuation Standards (IVS) promulgated by the International Valuation Standards Council. Proposed § 10.61 would thus ensure that appraisals submitted in an administrative proceeding generally conform to broadly applicable standards without requiring strict compliance with such standards. Appraisers who willfully fail to meet these standards may be subject to disqualification under Circular 230. A failure to conform to the substance and principles of either USPAP or IVS standards that is not the result of willful, reckless, or grossly incompetent conduct is not sanctionable. In contrast, appraisers who recklessly or through gross incompetence engage in a pattern of submitting appraisals that do not conform to the substance and principles of USPAP or IVS standards may be subject to disqualification under the proposed regulations. The IRS's Office of Professional Responsibility (OPR) would determine whether an appraisal conforms to the substance and principles of these general appraisal guidelines during the Circular 230 investigatory and disciplinary process, prior to instituting any formal disciplinary proceeding under subpart F of 31 CFR part 10. An opinion by a court, such as the United States Tax Court (Tax Court), finding that an appraiser failed to comply with the substance and principles of USPAP (or otherwise violated the standards for appraisers) may be considered when making that determination.
Using the substance and principles of the USPAP or IVS appraisal standards as a basis for disqualification would enable the IRS to proactively address inadequate appraisals submitted in administrative proceedings. Both USPAP and IVS provide broad standards for general appraisal methodology. USPAP and IVS appraisal standards also provide a generally accepted standard of care that is widely followed in U.S. and international valuation matters for real property, personal property, and businesses. As such, they form a “floor” for appraiser competency, similar to how the ABA's Model Rules of Professional Conduct provide general standards for attorneys. Like state bars, other professional appraiser organizations and state licensing boards elaborate on and are free to impose stricter standards on appraisers. Further, USPAP is required for state-licensed and state-certified real property appraisers and has been widely adopted by professional appraisal societies. Internal Revenue Service Advisory Council Annual Report at 118-28 (November 2017). Under Notice 2006-96, 2006-46 I.R.B. 902 (November 13, 2006), the IRS already recognizes USPAP as generally accepted appraisal standards relating to charitable contribution deductions under section 170(f)(11)(E)(i) of the Code. The Tax Court has also looked to adherence to USPAP as a measure of the credibility of an appraisal.
Proposed § 10.61(b)(2) would also provide that appraisers who know or reasonably should know that an appraisal will be used in an administrative proceeding by taxpayers to support a substantial valuation misstatement under section 6662(e), a substantial estate or gift tax valuation
Consistent with current § 10.60(b), new proposed § 10.61(c) would provide that an appraiser who has been assessed a penalty under section 6694, 6695A, 6700, or 6701 of the Code, for which it is determined that the appraiser acted willfully, recklessly, or through gross incompetence with respect to the proscribed conduct may be disqualified for engaging in disreputable conduct, although this assessment is not a prerequisite to disqualification. Appraisers who have been assessed penalties as a result of their willful, reckless, or grossly incompetent conduct have engaged in disreputable conduct that should disqualify them from presenting evidence or testimony in an administrative proceeding before the Treasury Department or the IRS and should result in the appraiser's appraisals having no probative effect in an administrative proceeding. If the penalty is later abated, an appraiser can petition for reinstatement under redesignated proposed § 10.101.
The proposed regulations also provide that an appraiser may show adherence to USPAP standards when issuing the relevant appraisal, which will be taken into account as a defense in determining whether an appraiser acted willfully, recklessly, or through gross incompetence with respect to potential disqualification under proposed § 10.61(b)(2) or (c).
Because appraisers are not practitioners under Circular 230, it is appropriate to include standards relating to their disqualification under a separate subpart from standards relating to practitioners. However, because appraisers are subject to the same notice and opportunity for a hearing as practitioners under Circular 230, disqualification procedures for appraisers would remain the same as those for practitioners under new subpart F (Rules Applicable to Disciplinary Proceedings).
In 2017, the United States District Court for the District of Nevada held in
Proposed § 10.99(e) would clarify that suspended practitioners remain practitioners under Circular 230 for the purposes of investigating and acting on any violation of a suspension or any violation of the law or regulations governing practice before the IRS while suspended. It is also important to the enforcement of 31 U.S.C. 330 and the integrity of Circular 230 for the IRS to ensure that individuals who are not authorized to practice before the IRS, either because they have been disbarred or because they do not have the required credentials, do not claim authority to practice. Proposed § 10.99(f), therefore, would clarify that the IRS has jurisdiction to make inquiries to determine whether an individual has wrongly held themselves out as a practitioner.
Current § 10.81 provides guidance on how practitioners can petition OPR for reinstatement, but it does not address practitioners or appraisers who have been suspended or disqualified through the expedited procedures under current § 10.82. Moreover, while current § 10.82 authorizes the immediate suspension of a practitioner who has engaged in certain conduct, it does not include expedited procedures for appraisers or address the voluntary forfeiture of a license or certification by practitioners or appraisers. Current § 10.81, which is proposed to be redesignated as § 10.101, would allow practitioners or appraisers who have received an expedited suspension or disqualification to petition for reinstatement at any time upon a showing of good cause.
The proposed changes to current § 10.82, which is proposed to be redesignated as § 10.102, explain that practitioners can establish good cause by showing that the conditions giving rise to their expedited suspension or disqualification no longer apply. For example, the restoration of a suspended license, the reversal of a conviction, or the removal of a sanction may be sufficient to show good cause. Proposed § 10.102 would also extend expedited disciplinary proceedings to appraisers who have had a license or certification revoked or suspended by a state licensing or certification board or who have voluntarily forfeited their license or certification. Finally, proposed § 10.102(e)(1)(iii) would clarify that, when a practitioner or appraiser responds to a show cause order but does not request a conference, the IRS will issue a written notice of expedited suspension immediately following consideration of a practitioner or appraiser's response.
Proposed § 10.102(a)(7)(i) and (ii), redesignated from § 10.82(b)(5)(i) and (ii), would only update the cross-references in those provisions. They are otherwise not proposed to be revised, though they are set out in their entirety below for the convenience of the reader. The Treasury Department and IRS do not seek comments on the substance of these provisions, and any such comments would be outside the scope of the proposed regulations.
The Treasury Department and the IRS request comments on all aspects of the proposed regulations. Comments are also specifically requested on whether, in a future regulation, the definition of practitioners eligible to practice before the IRS should be proposed to be expanded to include individuals admitted to practice law in a Tribal court.
The proposed regulations are proposed to apply 30 days after date of publication of final regulations in the
The Office of Information and Regulatory Affairs has determined that this regulation is not significant and not subject to review under Executive Order 12866 (June 9, 2023). Therefore, a regulatory impact assessment is not required.
When the IRS issues a general notice of proposed rulemaking, the Regulatory Flexibility Act (RFA) requires the agency to “prepare and make available
Description of the reasons why action by the agency is being considered and succinct statement of the objectives of, and the legal basis for, the proposed rule.
As discussed in this preamble, current Circular 230 has not been amended since 2014 and many of its provisions have been made obsolete by current law or need to be updated to reflect the current practice environment. Accordingly, the proposed regulations would eliminate provisions related to tax return preparation outside of practice before the IRS, revise contingent fee rules, and update various standards and procedures. In addition, the definition of appraiser and the procedures for disqualifying appraisers from submitting appraisals in an administrative proceeding before the Treasury Department or the IRS are being amended and updated. Thus, the general objective of the proposed regulations is to align Circular 230 with current law and to clarify or update its standards. None of the revisions, however, propose to impose new standards or burdens on practitioners or appraisers. The proposed regulations would either update long-standing Circular 230 standards or incorporate standards that practitioners or appraisers comply with outside of practice before the IRS. For example, the proposed contingent fee restrictions are also incorporated in other widely applicable rules of professional conduct. Likewise, appraisers are generally already required to meet the broad appraisal standards referenced by the proposed regulations.
The legal basis for the proposed regulations is 31 U.S.C. 330.
Description of and, where feasible, an estimate of the number of small entities to which the proposed rule will apply.
The proposed regulations would affect EAs, ERPAs, attorneys, CPAs, and AFSP participants who practice before the IRS. The proposed regulations would also affect appraisers who submit appraisals in an administrative proceeding before the Treasury Department or the IRS. Circular 230 affects both individual practitioners and firms. For example, the flush language of 31 U.S.C. 330(c) authorizes the Secretary, or her delegate, to impose a monetary penalty on a firm if the firm knew or should have known that a representative acting on its behalf intended to defraud a client. Further, proposed § 10.36(a) would require practitioners who oversee a firm's practice to take reasonable steps to ensure that the firm has adequate procedures to comply with Circular 230. However, because the proposed regulations would only affect individual practitioners and appraisers, the economic impact of these regulations on any small entity generally will be the result of an individual practitioner or appraiser owning a small business, or a small business employing a practitioner or appraiser, and the business paying for the individual to maintain its status or to comply with other requirements in the Circular. Because an estimate of the number of small entities to which the proposed rule will apply is not available, the Treasury Department and the IRS considered the estimated number of practitioners and appraisers who will be affected by the proposed rule. Based on IRS records, the total number of impacted practitioners and appraisers is approximately 451,405. Specifically, Centralized Authorization File records, which reflect practitioners who filed third-party authorizations with the IRS, reflect approximately 200,000 unique CPAs, 65,000 unique attorneys, and 40,000 unique practitioners who identify as both attorneys and CPAs as of May 17, 2024. Further, IRS Return Preparer Office (RPO) registration records show approximately 62,383 EAs, 608 ERPAs, 3,402 enrolled actuaries, and 75,357 AFSP participants. Finally, in 2022, the most recent year for which complete data are available, approximately 4,200 unique appraisers signed the “Declaration of Appraiser” on a Form 8283,
A description of the projected recordkeeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities that will be subject to such requirements that the type of professional skills necessary for preparation of the report or record.
No reporting or recordkeeping requirements are projected to be associated with the proposed regulations.
Identification, to the extent practicable, of all relevant Federal rules that may duplicate, overlap, or conflict with the proposed rule.
The IRS is not aware of any Federal rules that duplicate, overlap, or conflict with the proposed rule.
Description of any significant alternatives to the proposed rule that accomplish the stated objectives of applicable statutes and that minimize any significant economic impact of the proposed rule on small entities, including a discussion of significant alternatives.
Section 330 of title 31, United States Code authorizes the Secretary, or her delegate, to impose standards on individuals who practice before the Treasury Department and the IRS; to suspend or disbar from practice certain individuals; and to bar certain appraisers from submitting evidence or testimony in any administrative proceeding before the Treasury Department or the IRS. The Treasury Department and the IRS have issued regulations under Circular 230 for these purposes since 1921 and have regularly updated them to reflect changing law and current standards of practice. These updates, including those found in the proposed regulations, are essential to ensure that practitioners and appraisers are competent, reputable and have the necessary requirements to provide taxpayers with valuable service. The proposed regulations could have created a new standard for appraisals submitted in an administrative proceeding before the IRS, but that would have been more burdensome to appraisers. Instead, requiring appraisals to conform in substance and principles to the USPAP or IVS is less costly and burdensome because appraisers are already required to abide by these standards. Further, the proposed regulations could have implemented case law to preclude regulating contingent fee arrangements for preparing original or amended returns and ordinary refund claims, but this position would not have met the objective to discourage unduly
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. This proposed rule does not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector in excess of that threshold.
Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. These proposed regulations do not have federalism implications and do not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive order.
Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments) prohibits an agency from publishing any rule that has Tribal implications if the rule either imposes substantial, direct compliance costs on Indian Tribal governments, and is not required by statute, or preempts Tribal law, unless the agency meets the consultation and funding requirements of section 5 of the Executive order.
The Treasury Department and the IRS will hold a consultation with Tribal leaders to receive Tribal feedback on whether practitioners eligible to practice before the IRS should include individuals admitted to practice law in a Tribal court, which will inform the development of future regulations.
IRS Revenue Procedures, Revenue Rulings, Notices, and other guidance cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at
Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are timely submitted to the Treasury Department and the IRS as prescribed in this preamble under the
A public hearing is being held on March 6, 2025, beginning at 10 a.m. ET, in the Auditorium at the Internal Revenue Building, 1111 Constitution Avenue NW, Washington, DC. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. Participants may alternatively attend the public hearing by telephone.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit an outline of the topics to be discussed as well as the time to be devoted to each topic by February 24, 2025. A period of ten minutes will be allocated to each person for making comments. After the deadline for receiving outlines has passed, the IRS will prepare an agenda containing the schedule of speakers. Copies of the agenda will be made available free of charge at the hearing. If no outlines of the topics to be discussed at the hearing are received by February 24, 2025, the public hearing will be cancelled. If the public hearing is cancelled, a notification of cancellation of the public hearing will be published in the
Individuals who want to testify in person at the public hearing must send an email to
Individuals who want to testify by telephone at the public hearing must send an email to
Individuals who want to attend the public hearing in person without testifying must also send an email to
Individuals who want to attend the public hearing telephonically without testifying must also send an email to
Hearings will be made accessible to people with disabilities. To request special assistance during the hearing, contact the Publications and Regulations Branch of the Office of Associate Chief Counsel (Procedure and Administration) by sending an email to
The principal author of these regulations is William J. Prater of the Office of the Associate Chief Counsel (Procedure and Administration). However, other personnel from the Treasury Department and the IRS participated in the development of the regulations.
The Treasury Department and the IRS withdraw the notice of proposed rulemaking (REG-113289-08) that was published in the
Accountants, Administrative practice and procedure, Lawyers, Reporting and recordkeeping requirements, Taxes.
Accordingly, the Treasury Department and the IRS propose to amend 31 CFR part 10 as follows:
Sec. 3, 23 Stat. 258, secs. 2-12, 60 Stat. 237
(a)
(b)
The revisions read as follows:
(a) * * *
(4)
(5)
(6) A
(b) This section is applicable beginning on [date 30 days after date of publication of final regulations in the
The revisions read as follows:
(c)
(d) * * *
(3) An individual who practices before the Internal Revenue Service pursuant to paragraph (d)(1) of this section is subject to the provisions of this part in the same manner as attorneys, certified public accountants, enrolled agents, and enrolled retirement plan agents.
(e) * * *
(1) Any individual enrolled prior to February 12, 2016, as a retirement plan agent pursuant to this part who is not currently under suspension or disbarment from practice before the Internal Revenue Service, and whose enrollment is not in inactive status or has not been terminated under § 10.6, may practice before the Internal Revenue Service.
(3) An individual who practices before the Internal Revenue Service pursuant to paragraph (e)(1) of this section is subject to the provisions of this part in the same manner as attorneys, certified public accountants, enrolled agents, and enrolled actuaries.
(i)
The revisions read as follows:
(c)
(a)
(b)
(d) * * *
(2) If the applicant does not pass the tax compliance or suitability check, the applicant will not be issued a confirmation of enrollment pursuant to § 10.6(b). An applicant who is initially denied enrollment for failure to pass a tax compliance check may reapply after the initial denial if the applicant becomes current with respect to the applicant's tax liabilities.
(e)
(g)
The revisions read as follows:
(a)
(b)
(c)
(d) * * *
(1)
(2)
(ii) Enrolled agents who have a Social Security number or tax identification number that ends with the numbers 0, 1, 2, or 3, except for those individuals who received their initial enrollment after November 1, 2024, must apply for renewal between November 1, 2024, and January 31, 2025. The renewal will be effective April 1, 2025.
(iii) Enrolled agents who have a Social Security number or tax identification number that ends with the numbers 4, 5, or 6, except for those individuals who received their initial enrollment after November 1, 2025, must apply for renewal between November 1, 2025, and January 31, 2026. The renewal will be effective April 1, 2026.
(iv) Enrolled agents who have a Social Security number or tax identification number that ends with the numbers 7, 8, or 9, or who do not have a Social Security number, except for those individuals who received their initial enrollment after November 1, 2026, must apply for renewal between November 1, 2026, and January 31, 2027. The renewal will be effective April 1, 2027.
(4)
(6)
(e)
(f) * * *
(2) * * *
(ii)
(iii) * * *
(C) The maximum continuing education credit for instruction and preparation may not exceed six hours annually for enrolled agents and enrolled retirement plan agents.
(i) * * *
(4) If a request for waiver is not approved, the individual will be placed in inactive status. The individual will be notified that the waiver was not approved and that the individual has been placed on a roster of inactive enrolled agents or enrolled retirement plan agents.
(5) If the request for waiver is not approved, the individual may file a protest as prescribed by the Internal Revenue Service in forms, instructions, or other appropriate guidance. A protest filed under this section is not governed by subpart F of this part.
(j) * * *
(2) The continuing education records of an enrolled agent or enrolled retirement plan agent may be reviewed to determine compliance with the requirements and standards for renewal as provided in paragraph (f) of this section. As part of this review, the enrolled agent or enrolled retirement plan agent may be required to provide the Internal Revenue Service with copies of any continuing education records required to be maintained under this part. If the enrolled agent or enrolled retirement plan agent fails to comply with the requirement in this paragraph (j)(2), any continuing education hours claimed may be disallowed.
(4) Individuals in inactive status and individuals who are ineligible to practice before the Internal Revenue Service may not state or imply that they are eligible to practice before the Internal Revenue Service, or use the terms enrolled agent or enrolled retirement plan agent, the designations
(5) An individual placed in inactive status may be reinstated to an active status by filing an application for renewal and providing evidence of the completion of all required continuing education hours for the enrollment cycle. Continuing education credit under this paragraph (j)(5) may not be used to satisfy the requirements of the enrollment cycle in which the individual has been placed back on the active roster.
(6) An individual placed in inactive status must file an application for renewal and satisfy the requirements for renewal as set forth in this section within three years of being placed in inactive status. Otherwise, the name of such individual will be removed from the inactive status roster and the individual's status as an enrolled agent or enrolled retirement plan agent will terminate. Future eligibility for active status must then be reestablished by the individual as provided in this section.
(k)
(l)
(n)
(c) * * *
(1) * * *
(viii) An individual who possesses a current Annual Filing Season Program (AFSP) Record of Completion may represent a client before revenue agents, customer service representatives, or similar officers and employees of the Internal Revenue Service, including the Taxpayer Advocate Service, during an examination of a tax return or claim for refund or credit that the individual prepared and signed. The individual must have: a valid Record of Completion for the calendar year in which the tax return or claim for refund or credit was prepared and signed and a valid Record of Completion for the year or years in which the representation occurs.
(f)
(a)
(b)
The revision and addition read as follows:
(c)
(d)
(a)
(b)
(c)
(a) * * *
(1) In preparing or assisting in the preparation of, approving, or submitting documents, affidavits, and other papers, including tax returns prepared, approved or submitted in connection with representing a client in a matter before the Internal Revenue Service;
(2) In determining the correctness of oral or written representations made by the practitioner when representing a client in a matter before the Internal Revenue Service; and
(3) In determining the correctness of oral or written representations made by the practitioner to clients when representing clients in a matter before the Internal Revenue Service.
(c)
(a) * * *
(1) A practitioner may not, with respect to any Internal Revenue Service matter, in any way use or participate in the use of any form of public communication or private solicitation containing a false, fraudulent, or coercive statement or claim; or a misleading or deceptive statement or claim. Enrolled agents and enrolled retirement plan agents, in describing their professional designation, may not utilize the term
(e)
(a)
(b)
The revisions and additions read as follows:
(a)
(1) Communicating clearly with the client regarding the terms of the engagement, including those relating to fees, expenses, and payment. For example, the practitioner should determine the client's expected purpose for and use of the advice and should have a clear understanding with the client regarding the form and scope of the advice or assistance to be rendered.
(4) Maintaining a policy related to data security safeguards with respect to a client's tax return or other confidential information. Practitioners should also consider developing an incident response plan with specific procedures for responding to a data breach and for disclosure of data breaches to clients.
(5) Identifying, evaluating, and addressing a mental impairment, whether chronic or temporary, arising out of or related to age, substance abuse, a physical or mental health condition, or other circumstance that may have an adverse impact on a tax practitioner's ability to provide the highest quality representation of a client before the Internal Revenue Service.
(6) Establishing a business continuity and succession plan that addresses procedures and safeguards in the event of the sale or cessation of the practitioner's practice, the practitioner's death or disability, or the occurrence of extraordinary events such as a natural disaster, cyberattack, or pandemic.
(b)
(a)
(i) Prepare, while representing a client in a matter before the Internal Revenue Service or, for tax returns prepared by the practitioner prior to the representation, including returns already filed with the Internal Revenue Service, submit a tax return or claim for refund or a claim for a credit that the practitioner knows or reasonably should know contains a position that—
(c) * * *
(1) * * *
(i) A position taken on a tax return that is relevant to the representation of a client in a matter before the Internal Revenue Service if—
(A) The practitioner provided written advice, as defined under § 10.37, to the client with respect to the position; or
(B) The practitioner prepared and submitted the tax return while representing the client in a matter before the IRS.
(ii) Any document, affidavit or other paper submitted in a matter before the Internal Revenue Service.
(d)
(e)
(a) * * * Competency includes understanding the benefits and risks associated with relevant technology that is used by the practitioner to provide services to clients or to store and transmit tax return and other confidential information.
(b) This section is applicable beginning on [date 30 days after date of publication of final regulations in the
(a) Any individual subject to the provisions of this part who has (or individuals who have or share) principal authority and responsibility for overseeing a firm's practice governed by this part, including, while representing a client, the provision of advice concerning Federal tax matters or the preparation or submission of documents in a matter before the Internal Revenue Service, must take reasonable steps to ensure that the firm has adequate procedures in effect for all members, associates, and employees (whether or not those individuals are otherwise subject to this part) for purposes of complying with subparts A through C of this part, as applicable (including the best practices described in § 10.33(a)). In the absence of a person or persons identified by the firm as having the principal authority and responsibility described in this paragraph (a), the Internal Revenue Service may identify one or more individuals subject to the provisions of this part responsible for compliance with the requirements of this section.
(c) This section is applicable beginning on [date 30 days after date of publication of final regulations in the
(b) * * *
(2) The practitioner knows or reasonably should know that the other person is not competent or lacks the necessary qualifications to provide the advice, or is unaware of all relevant facts and circumstances; or
(c)
(d)
(2) Any provision of law impacting a person's obligations under the internal revenue laws and regulations, including but not limited to the person's liability to pay tax, ability to take a specific return position (whether prospective or completed), or obligation to file returns; or
(e)
The revisions and additions read as follows:
(a)
(12) Contemptuous conduct in connection with practice before the Internal Revenue Service (or during any proceeding pursuant to § 10.80 or an investigation by the Treasury Inspector General for Tax Administration), including the use of abusive or otherwise contemptuous acts or language, making false accusations or statements, knowing them to be false, or circulating or publishing malicious or libelous matter.
(19) Willfully failing to follow any Federal tax law.
(b)
(c)
(a)
(b)
(1)
(2)
(c)
(a)
(b)
(c)
(a)
(1) The disqualification of an appraiser will remain in effect until the appraiser is authorized to present evidence or testimony pursuant to § 10.101. The prohibition applies to appraisals, evidence, and testimony submitted or presented by the appraiser and is not limited to a specific appraisal or client. The prohibition also applies to appraisals made before the effective date of disqualification.
(2) Any appraisal made by a disqualified appraiser after the effective date of disqualification will not have probative effect in any administrative proceeding before the Department of the Treasury or the Internal Revenue Service. An appraisal otherwise barred from admission into evidence pursuant to this section may be admitted into evidence solely for the purpose of determining the client's reliance in good faith on such appraisal.
(b)
(2) An appraiser may not prepare an appraisal, where the appraiser knew or reasonably should have known that it would be submitted during an administrative proceeding and used to support a substantial valuation misstatement as defined in section 6662(e) of the Internal Revenue Code (Code), a substantial estate or gift tax valuation understatement as defined in section 6662(g), or a gross valuation misstatement as defined in section 6662(h).
(c)
(d)
(1) Willfully violates any of the standards described in paragraphs (b)(1) and (2) of this section.
(2) Recklessly or through gross incompetence engages in a pattern of submitting appraisals that violate the standards described in paragraph (b)(1) of this section.
(3) Recklessly or through gross incompetence violates the standard described in paragraph (b)(2) of this section.
(4) Engages in the disreputable conduct described in paragraph (c) of this section.
(e)
(f)
(a)
(b)
(c)
(d)
(e)
The revision reads as follows:
(e)
(a) A practitioner may be sanctioned under § 10.70 if the practitioner—
(1) Willfully violates any of the regulations (other than § 10.33) contained in this part; or
(2) Recklessly or through gross incompetence (within the meaning of § 10.50(a)(13)) violates § 10.34, § 10.35, § 10.36, or § 10.37.
(b) This section is applicable to conduct occurring on or after [date 30
(d)
(e)
(b) Whenever the Secretary of the Treasury, or delegate, determines that the appraiser acted willfully, recklessly, or through gross incompetence, or engaged in disreputable conduct, as defined under § 10.61(d)(1) through (4), with respect to the proscribed conduct, the appraiser may, in accordance with this section, be subject to a proceeding for disqualification. A proceeding for disqualification of an appraiser is instituted by the filing of a complaint, the contents of which are more fully described in § 10.82.
(d) This section is applicable beginning on [date 30 days after date of publication of final regulations in the
The revisions and addition read as follows:
(a) * * *
(2) It appears that the respondent has knowingly introduced false testimony during the proceedings against the respondent; or
(3) It appears that the respondent has engaged in contemptuous conduct within the meaning of § 10.50(a)(12) during the proceedings against the respondent.
(c)
(e)
(f)
(g)
(a)
(b)
The revisions and additions read as follows:
(a)
(1) A practitioner has a license to practice as an attorney, certified public accountant, or actuary suspended or revoked for cause (not including failure to pay a professional licensing fee) by any authority or court, agency, body, or board described in § 10.50(a)(10).
(2) An appraiser has a license or certification to conduct appraisals revoked or suspended by any state licensing or certification board.
(3) A practitioner or appraiser has voluntarily forfeited a practitioner's or appraiser's license or certification after any authority described in paragraph (a)(1) or (2) of this section initiated an investigation of, or proceeding against, the practitioner or appraiser for alleged violations of applicable standards or rules of conduct for which the practitioner's or appraiser's license or certification could be suspended or
(4) A practitioner has, irrespective of whether an appeal has been taken, been convicted of any crime under title 26, United States Code, any crime involving dishonesty or breach of trust, or any felony for which the conduct involved renders the practitioner unfit to practice before the Internal Revenue Service.
(5) A practitioner has violated conditions imposed on the practitioner pursuant to § 10.99(d).
(6) A practitioner has been sanctioned by a court of competent jurisdiction, whether in a civil or criminal proceeding (including suits for injunctive relief), relating to any client's tax liability or relating to the practitioner's own tax liability, for—
(i) Instituting or maintaining proceedings primarily for delay;
(ii) Advancing frivolous or groundless arguments; or
(iii) Failing to pursue available administrative remedies.
(7) A practitioner has demonstrated a pattern of willful disreputable conduct by—
(i) Failing to make an annual Federal tax return, in violation of the Federal tax laws, during 4 of the 5 tax years immediately preceding the institution of a proceeding under paragraph (b) of this section and remains noncompliant with any of the practitioner's Federal tax filing obligations at the time the notice of suspension is issued under paragraph (e) of this section; or
(ii) Failing to make a return required more frequently than annually, in violation of the Federal tax laws, during 5 of the 7 tax periods immediately preceding the institution of a proceeding under paragraph (b) of this section and remains noncompliant with any of the practitioner's Federal tax filing obligations at the time the notice of suspension is issued under paragraph (e) of this section.
(b)
(2) That an expedited suspension or disqualification decision by default may be rendered if the respondent fails to file a response as required;
(4) That the respondent may be suspended or disqualified either immediately following the expiration of the period within which a response must be filed or, if a conference is requested, immediately following the conference.
(e)
(i) The expiration of the period within which a response to a show cause order must be filed if the respondent does not file a response as required by paragraph (c) of this section;
(ii) The conference described in paragraph (d) of this section if the Internal Revenue Service finds that the respondent is described in paragraph (a) of this section;
(iii) If the respondent has not requested a conference, upon consideration of any response described in paragraph (c) of this section; or
(iv) The respondent's failure to appear, either personally or through an authorized representative, at a conference scheduled by the Internal Revenue Service under paragraph (d) of this section.
(2)
(i) The date the Internal Revenue Service lifts the suspension or disqualification upon receipt of a petition for reinstatement under § 10.101 and after determining that the practitioner or appraiser has shown good cause based on all the relevant facts and circumstances why the suspension or disqualification should be lifted and the individual reinstated to practice; or
(ii) The date the suspension or disqualification is lifted or otherwise modified by an Administrative Law Judge or the Secretary of the Treasury, or delegate deciding appeals, in a proceeding referred to in paragraph (f) of this section and instituted under § 10.80.
(3)
(i) Under paragraphs (a)(1) through (3) of this section, and the individual's license or certificate to practice as an attorney, certified public accountant, actuary, or appraiser has been restored;
(ii) Under paragraph (a)(4) of this section, and the conviction was reversed on appeal, with no retrial underway or pending;
(iii) Under paragraph (a)(5) of this section, and the individual is no longer in violation of the conditions imposed on the individual under § 10.99(d) and the individual either fully satisfied the conditions or is compliant with them if they are still in effect;
(iv) Under paragraph (a)(6) of this section, and the individual has satisfied any terms of the court-imposed sanction, such as payment of a monetary sanction or completion of mandated hours of pro bono work; has not been sanctioned again for the same or substantially similar conduct by a court or any other authority described in § 10.50(a)(10); and has ceased the conduct that resulted in the sanction (for example, ceased advancing frivolous or groundless arguments in matters before the Internal Revenue Service and courts or other tribunals); or
(v) Under paragraph (a)(7) of this section, and the individual is fully compliant with the individual's tax filing and payment obligations, including any installment agreement or other payment arrangement entered into with the Internal Revenue Service.
(f)
(g)
The revision reads as follows:
(c)
(a)
(b)
Any proceeding instituted under this part prior to [date 30 days after date of publication of final regulations in the
Except as otherwise provided in any section of this part and subject to § 10.112, the provisions of this part are applicable on [date 30 days after date of publication of final regulations in the
Office of Postsecondary Education, Department of Education.
Withdrawal of notice of proposed rulemaking and termination of rulemaking proceeding.
The U.S. Department of Education (Department) is withdrawing a notice of proposed rulemaking (NPRM) that, under the Secretary's authority to waive repayment of a loan provided by the Higher Education Act of 1965, as amended (HEA), proposed to specify the Secretary's authority to waive all or part of any student loan debts owed to the Department based on the Secretary's determination that a borrower has experienced or is experiencing hardship related to such a loan.
The notice of proposed rulemaking published in the
Tamy Abernathy, U.S. Department of Education, Office of Postsecondary Education, 400 Maryland Avenue SW, 5th floor, Washington, DC 20202. Telephone: (202) 245-4595. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
Background
On October 31, 2024, the Department published an NPRM in the
The Department accepted public comments on the NPRM from October 31, 2024 through December 2, 2024. In response to the NPRM, the Department received 14,735 written comments, and the Department reviewed such comments.
Withdrawal of the Notice of Proposed Rulemaking and Termination of the Rulemaking Proceeding
In accordance with the Secretary's authority under sections 432(a)(6) and 468(2) of the HEA to waive repayment of a loan, the Department issued the NPRM to specify the Secretary's discretion to provide targeted debt relief to borrowers who have experienced or are experiencing hardship repaying their student loans based on the criteria specified in the NPRM.
The Department believed clarifying the circumstances in which the Secretary may use the existing and longstanding waiver authority under sections 432(a)(6) and 468(2) of the HEA would better inform the public about how the Secretary may exercise this waiver authority in a consistent and equitable manner. Current regulations do not describe how the Secretary uses this waiver authority. We also believed that providing such specificity would allow the Department to highlight circumstances where we are particularly concerned about borrowers' inability to successfully repay their debts in full and where the Department anticipated that the costs of collection would exceed the expected benefits.
However, upon further consideration of the operational challenges in implementing the proposals in the NPRM, the Secretary withdraws the NPRM and terminates the rulemaking proceeding.
In making this decision, we reconsidered the Department's ability to implement the proposed rules if they were finalized in a form identical or largely similar to what was included in the NPRM. With the time remaining in this Administration, the Department is focused on several priorities including court-ordered settlements and helping borrowers manage the final elements of the return to repayment following the Fall 2024 end of the 12-month on-ramp period designed to assist borrowers who were unable to make their payments or who needed more time to access information to determine the right repayment plan for their circumstances. With the end of the on-ramp period, some borrowers may start becoming delinquent and start down the path to default. Given that many newer borrowers are at risk of default, and the Department expects that many of these newer borrowers would not have been otherwise eligible for immediate relief under the proposed rules in the NPRM, along with the uncertainty around the implementation of the NPRM proposals, the Department at this time intends to commit its limited operational resources to helping at-risk borrowers return to repayment successfully. For all of these independently sufficient reasons, the Department is withdrawing this NPRM.
Importantly, the Department is not withdrawing this NPRM and terminating this rulemaking proceeding based upon a changed view of the Secretary's authority under section 432(a) and 468(2) of the HEA, or based upon any preliminary determination about the limitations of such authority.
We do not intend for a final rule to be issued on this NPRM. Were the Department to issue a regulation in this area in the future, it would be bound by the requirements of section 492(a) and (b) of the HEA, 20 U.S.C. 1098a(a) and (b).
You may also access Department documents published in the
Office of Postsecondary Education, Department of Education.
Notice of proposed rulemaking; withdrawal.
The U.S. Department of Education (Department) is withdrawing a notice of proposed rulemaking to rescind regulations related to religious student organizations at certain public institutions of higher education (IHEs). The proposed regulations would have applied to public IHEs that receive a direct grant from the Department or a subgrant from a State-administered formula grant program of the Department.
The notice of proposed rulemaking published in the
Scott Prince, U.S. Department of Education, Office of Postsecondary Education, 400 Maryland Avenue SW, 5th floor, Washington, DC 20202. Telephone: (202) 453-5568. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
On September 23, 2020, the Department promulgated a final rule that addressed freedom of speech and the free exercise of religion at institutions of higher education participating in certain programs administered by the Department.
The Department accepted public comments on the NPRM from February 22, 2023, through March 24, 2023. In response to that NPRM the Department received approximately 58,000 public comments.
The Department issued the NPRM to amend 34 CFR parts 75 and 76 and provided its reasons for proposing to rescind the 2020 final regulations in that document. However, upon further consideration, the Department is withdrawing the NPRM and terminating the rulemaking proceeding.
During the public comment period, the Department received approximately 58,000 comments. Several hundred of the comments calling for withdrawal were from individuals and organizations who argued that rescinding the current rule is not necessary because it is not complex or burdensome. Additionally, many comments in support of the current regulations pointed to ongoing issues faced by religious student groups as evidence of the need to keep these regulations. Numerous commenters in favor of rescinding these provisions asserted that the current regulations are not necessary to protect these constitutional freedoms and expressed concern that the regulations could be read to require institutions to afford preferential treatment to religious student groups.
We appreciate the feedback that the Department received in response to the NPRM. In light of the concerns raised by commenters both in support of and in opposition to the proposed rescissions, the forthcoming change in administration, and the significant resources needed to review and consider all relevant matters presented in the public comments, the Department for each of these independent reasons does not believe that finalizing the proposed rescissions is an efficient use of Department resources at this time. Therefore, the Secretary exercises his discretion to withdraw the NPRM and terminate this rulemaking. We do not intend for a final rule to be issued on this NPRM. Any future rulemaking the Department may undertake on this topic would similarly be subject to the notice and comment requirements of the Administrative Procedure Act, 5 U.S.C. 551,
Importantly, this withdrawal does not change or alter the Department's role with respect to the other material grant conditions added by the 2020 final regulations at §§ 75.500(b) and (c) and 76.500(b) and (c). The Department will determine if an IHE has violated the grant conditions in those provisions only if a State or Federal court issues a final, non-default judgment against a public IHE for violating the First Amendment or against a private IHE for violating stated institutional policies. Absent such a judgment, the Department presumes public IHEs to be in compliance with the First Amendment where the alleged violations concern matters other than denial of equal treatment to religious student organizations because of the organization's beliefs, practices, policies, speech, membership standards, or leadership standards, which are informed by sincerely held religious beliefs. Under the 2020 final regulations at §§ 75.500(b) and (c) and 76.500(b) and (c), the Department's role is not to investigate alleged violations of these grant conditions and is limited to deciding whether and to what extent to impose additional penalties where a State or Federal court has rendered a relevant final, non-default judgment.
You may also access Department documents published in the
Office for Civil Rights, Department of Education.
Notice of proposed rulemaking; withdrawal.
The U.S. Department of Education (Department) is withdrawing the notice of proposed rulemaking entitled “Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance: Sex-Related Eligibility Criteria for Male and Female Athletic Teams” published in the
The notice of proposed rulemaking published in the
Bianca Costello, U.S. Department of Education, 400 Maryland Avenue SW, Fifth Floor, Washington, DC 20202. Telephone: (202) 219-2126. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
On April 13, 2023, the Department published a notice of proposed rulemaking titled “Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance: Sex-Related Eligibility Criteria for Male and Female Athletic Teams” (Athletics NPRM) in the
The Department invited the public to comment on all aspects of the Athletics NPRM, as well as the Regulatory Impact Analysis. In response, the Department received more than 150,000 public comments on the Athletics NPRM during the 30-day comment period.
The Department reviewed and considered all comments submitted during the comment period and appreciates the time and effort spent by commenters in sharing their views with the Department. Commenters offered a broad spectrum of opinions on the Athletics NPRM. Some commenters expressed general support for the proposed regulation, and some asked the Department to modify the proposed regulation to provide for more students to participate on a sex-separate athletic team consistent with their gender identity, particularly at the elementary and secondary school levels. Other commenters opposed the proposed regulation in its entirety and asked the Department to withdraw the Athletics NPRM. Numerous commenters expressed concerns about the application of the proposed regulation in practice, arguing that the proposed regulation was unclear or too complex for recipients to implement, and many commenters offered alternative regulatory text for the Department's consideration to clarify, simplify, elaborate on, or substantively change the focus and impact of the proposed rule. Additionally, a significant number of commenters included discussions of case law, scientific studies and research papers, and existing athletic association policies and practices regarding athletic eligibility criteria that, according to the commenters, supported the adoption, modification, or withdrawal of the proposed regulation.
The Department recognizes that there are multiple pending lawsuits related to the application of Title IX in the context of gender identity, including lawsuits related to Title IX's application to athletic eligibility criteria in a variety of factual contexts. In light of the comments received and those various pending court cases, the Department has determined not to regulate on this issue at this time. Therefore, the Department hereby withdraws the Athletics NPRM and terminates this rulemaking proceeding. We do not intend for a final rule to be issued on this NPRM. If, in the future, we decide it is appropriate to issue regulations on this topic, we will do so via a new notice of proposed rulemaking, subject to the requirements of the Administrative Procedure Act, 5 U.S.C. 551,
To the extent the Department receives complaints of discrimination about a recipient's obligation to provide equal opportunity to participate in athletics regardless of sex, it will continue to apply the longstanding legal standards reflected in the athletics regulations at 34 CFR 106.41 and in U.S. Dep't of Health, Educ., and Welfare, Office for Civil Rights, A Policy Interpretation: Title IX and Intercollegiate Athletics, 44 FR 71413 (Dec. 11, 1979),
The Athletics NPRM issued on April 13, 2023, is hereby withdrawn, and the rulemaking proceeding for that NPRM is terminated as of the date of publication of this notice in the
You may also access Department documents published in the
Office of Postsecondary Education, Department of Education.
Termination of negotiated rulemaking process for State Authorization, Cash Management, Accreditation and Related Issues.
The U.S. Department of Education (Department) announces the termination of the negotiated rulemaking process for three Program Integrity and Institutional Quality issues that were undertaken as part of a larger negotiated rulemaking process for
The negotiated rulemaking process for State Authorization, Cash Management, and Accreditation and Related Issues is terminated as of December 20, 2024.
Scott Prince, U.S. Department of Education, Office of Postsecondary Education, 400 Maryland Avenue SW, 5th Floor, Washington, DC 20202. Telephone: (202)453-5568. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
On March 24, 2023, the Department published a notification in the
On April 11-13, 2023, the Department held a virtual public hearing at which individuals and representatives of interested organizations provided advice and recommendations relating to the issues identified in the March 24 notification. We also took written public comments from March 24, 2023, through April 24, 2023.
On November 29, 2023, the Department published a negotiated rulemaking in the
(1) The Federal TRIO programs, including improvements to programmatic eligibility and operations under 34 CFR parts 642 through 647;
(2) The Secretary's recognition of accrediting agencies in 34 CFR part 602 and related parts;
(3) Institutional eligibility under 34 CFR 600.2, including State authorization as a component of such eligibility under 34 CFR 600.9;
(4) Return of title IV funds, to address requirements for participating institutions to return unearned title IV funds in a manner that protects students and taxpayers while easing administrative burden for institutions of higher education under 34 CFR 668.22;
(5) Cash management, to address timely student access to disbursements of title IV, HEA Federal student financial assistance and provisions related to credit balances, escheatment, or loss of such funds under 34 CFR part 668, subpart K; and
(6) The definition of “distance education” under 34 CFR 600.2 as it pertains to clock hour programs and reporting for students who enroll primarily online.
The Department held three negotiated rulemaking sessions of four days each. During each daily negotiated rulemaking session, we provided an opportunity for public comment and expanded that time to one hour for the second and third sessions. Additionally, non-Federal negotiators shared feedback from their stakeholders with the negotiating committee.
On July 24, 2024, the Department published in the
This document pertains to the three remaining issues included in the November 29, 2023, notification establishing the negotiated rulemaking committee: accreditation, state authorization, and cash management. For the reasons discussed below, the Department is terminating the negotiated rulemaking process for these issues.
The Department began the rulemaking efforts described above to amend 34 CFR parts 600, 602, and 668 to create more student-friendly policies relating to the use and receipt of Federal student financial aid and to hold institutions accountable for providing high-quality educational opportunities. However, the Department has decided not to make any regulatory changes on the issues of accreditation, state authorization, and cash management at this time, to allow for additional evaluation of recent changes in other regulations and industry practices. This decision reflects the Department's commitment to deliberative policymaking and consideration of feedback received during the negotiated rulemaking process, which highlighted the need for additional time and further study. Terminating the negotiated rulemaking process at this time will allow the agency to gather additional data, assess evolving industry practices, and evaluate whether existing regulations remain necessary or require modification.
The Department considered several factors in reaching the decision to terminate the negotiated rulemaking process on these remaining three identified issues. We considered that two of the areas—state authorization and accreditation—have recently undergone significant changes, as explained below, that continue to affect the field even after the conclusion of negotiated rulemaking, and we decided it is preferable to wait and see the effectiveness of those changes before issuing further regulations. Waiting to assess the effects of these changes will allow the Department to better identify any needed future alterations and improve the evidentiary base for future rulemaking.
Regarding state authorization, the Department decided to terminate the negotiated rulemaking process so we could observe the effects of two recent policy changes. One is a change to § 668.14(b)(32)(iii) that went into effect on July 1, 2024.
The Department also believes it is worth evaluating how State-led efforts at improving state authorization proceed before making further regulatory changes. This particularly involves the policy modification process adopted by the National Council for State Authorization Reciprocity Agreements (NC-SARA), an organization formed in partnership with four regional compacts
Regarding accreditation, the Department adopted a series of final regulations in this area that went into effect on July 1, 2020.
The Department also has decided to terminate the negotiated rulemaking process on the third remaining regulatory area, cash management. While we discussed several regulatory changes to this topic, the most significant was a proposal addressing textbook billing practices. That issue generated significant discussion during negotiated rulemaking and from public commenters, among all the cash management proposals. We are persuaded by concerns raised during the negotiated rulemaking sessions about the need to gather additional data, assess evolving industry practices, and evaluate how policies related to the costs of books and supplies as part of tuition and fees best serve students and their use of financial aid. The current provisions are in § 668.164(c) and (m). The Department received public feedback during the negotiated rulemaking process articulating the benefits of these policies. The Department also acknowledges concerns from commenters, including from students who have experience navigating these products, that these policies may not always deliver costs to students that are below market rates or may not give students a true opportunity to opt out. Given this mix of input, we believe further research to assess the benefits or drawbacks of this way of billing for textbooks is needed before proceeding with rulemaking. Additionally, because textbook billing is the most significant issue related to cash management addressed by the committee, we do not believe exploring further regulatory changes in this part of the regulations is the best use of limited Department resources at this time. Any institution that includes the costs of books and supplies as part of tuition and fees as described in 668.164(c) must ensure they have a clearly communicated and actionable policy under which the student may opt out of the method the institution provides for students to obtain books and supplies. If the Department continues to find that institutions are not complying with the current requirements in § 668.164(c) and (m), we may propose additional protective or restrictive measures to ensure that students have access to books or supplies at below competitive market rates.
For the reasons described above, at this time the Secretary exercises his discretion to terminate the negotiated rulemaking process for issues related to accreditation, state authorization, and cash management. Were the Department to issue a regulation in this area in the future, it would be bound by the requirements of Section 492(a) and (b) of the HEA, 20 U.S.C. 1098a(a) and (b).
You may also access Department documents published in the
Office of Postsecondary Education, Department of Education.
Withdrawal of notice of proposed rulemaking and termination of rulemaking proceeding.
The U.S. Department of Education (Department) is withdrawing a notice of proposed rulemaking (NPRM) that, under the Secretary's authority to waive repayment of a loan provided by the Higher Education Act of 1965, as amended (HEA), proposed to do the following: amend regulations regarding waiver of certain student loan debts; provide targeted debt relief as part of efforts to address the burden of student loan debt; and modify the Department's existing debt collection regulations to provide greater specificity regarding certain non-exhaustive situations in which the Secretary may exercise discretion to waive all or part of any debts owed to the Department.
The notice of proposed rulemaking published in the
Tamy Abernathy, U.S. Department of
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
On April 17, 2024, the Department published an NPRM in the
The Department accepted public comments on the NPRM from April 17, 2024 through May 17, 2024. In response to the NPRM, the Department received 148,567 written comments, and the Department has reviewed such comments.
Withdrawal of the Notice of Proposed Rulemaking and Termination of the Rulemaking Proceeding
In accordance with the Secretary's authority under section 432(a) of the HEA to waive repayment of a loan, the Department issued the NPRM to specify the Secretary's discretion to provide targeted debt relief to borrowers facing specific challenges repaying their student loans. The NPRM also proposed revisions to update and clarify various references and provisions in subparts A, C, E, and F of 34 CFR part 30 and proposed to amend part 682 by adding a new § 682.403.
The Department believed clarifying the circumstances in which the Secretary may use the existing and longstanding waiver authority under section 432(a) of the HEA would better inform the public about how the Secretary may exercise this waiver authority in a consistent and equitable manner. Current regulations do not describe how the Secretary uses this waiver authority. We also believed that providing such specificity would allow the Department to highlight circumstances where we are particularly concerned about borrowers' inability to successfully repay their debt in full in a reasonable period, where the Department anticipated that the costs of collection would exceed the amount recoverable, and in circumstances that would implicate equity and fairness.
However, upon further consideration of the operational challenges in implementing the proposals in the NPRM, the Secretary withdraws the NPRM and terminates the rulemaking proceeding.
In making this decision, we considered the Department's ability to implement the proposed rules if they were finalized in a form identical or largely similar to what was included in the NPRM. With the time remaining in this administration, the Department is focused on several priorities including court-ordered settlements and helping borrowers manage the final elements of the return to repayment following the Fall 2024 end of the 12-month on-ramp period designed to assist borrowers who were unable to make their payments or who needed more time to access information to determine the right repayment plan for their circumstances. With the end of the on-ramp period, some borrowers may start becoming delinquent and start down the path to default. Given that many newer borrowers are at risk of default, and many of these borrowers would not have been otherwise affected by the proposed rules in the NPRM, along with the uncertainty around the implementation of the NPRM proposals, at this time the Department intends to commit its limited operational resources to helping at-risk borrowers return to repayment successfully. The Department has also concluded that withdrawing the NPRM will assure agency flexibility in re-examining the issues and exploring options and alternatives with stakeholders in the future. For all of these independently sufficient reasons, the Department is withdrawing this NPRM.
Importantly, the Department is not withdrawing this NPRM and terminating this rulemaking proceeding based upon a changed view of the Secretary's authority under section 432(a) of the HEA, or based upon any preliminary determination about the limitations of such authority.
We do not intend for a final rule to be issued on this NPRM. Were the Department to issue a regulation in this area in the future, it would be bound by the requirements of Section 492(a) and (b) of the HEA, 20 U.S.C. 1098a(a) and (b).
You may also access Department documents published in the
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a State implementation plan (SIP) revision submitted by the State of Maryland. This revision (Maryland Submittal #24-01) pertains to the re-allocation of nitrogen oxides (NO
Written comments must be received on or before January 27, 2025.
Submit your comments, identified by Docket ID No. EPA-R03-OAR-2024-0512 at
Amber Iglesias, Planning & Implementation Branch (3AD30), Air & Radiation Division, U.S. Environmental Protection Agency, Region III, 1600 John F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103. The telephone number is (202) 564-3175. Ms. Iglesias can also be reached via electronic mail at
On June 10, 2024, the State of Maryland, through the Maryland Department of the Environment (MDE), submitted for approval into the Maryland SIP amendments to the Code of Maryland Regulation (COMAR) 26.11.40-
On October 27, 1998 (63 FR 57356), EPA finalized the “Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone”—commonly called the NO
On May 12, 2005 (70 FR 25162), EPA promulgated the Clean Air Interstate Rule (CAIR), to address transported emissions that significantly contributed to downwind States' nonattainment and maintenance of the 1997 ozone and fine particulate matter (PM
In Maryland, Luke Paper Mill (formerly the Westvaco pulp and paper mill) had the only non-EGUs sources that had been covered under the NO
In October 2018, Maryland adopted a COMAR 26.11.40—
On June 10, 2024, Maryland submitted for inclusion in the Maryland SIP regulation COMAR 26.11.40—
Section .02 lists the currently affected non-EGUs meeting the definition of “non-trading large NO
Section .03 of COMAR 26.11.40 establishes the NO
EPA finds that this June 2024 SIP submittal meets Maryland's NO
The June 10, 2024 Maryland SIP submittal does not result in increased NO
EPA's review of this material indicates that Maryland's June 10, 2024 SIP revision submittal (Maryland SIP Revision #24-01) is approvable in accordance with CAA section 110. EPA is proposing to approve the Maryland SIP revision that reallocates the NO
In this document, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference the revised Maryland regulation COMAR 26.11.40.02 and the revised COMAR 26.11.40.03, as described in section II of this preamble. EPA has made, and will continue to make, these materials generally available through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this proposed action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act;
Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”
The air agency did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.
In addition, this proposed rulemaking, that amends Maryland's NO
Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements.
Environmental Protection Agency (EPA).
Proposed rule; extension of comment period.
The Environmental Protection Agency (EPA) is extending the comment period for a proposed rule published November 29, 2024, and corrected on December 11, 2024. The corrected comment period end date for the proposed rule was December 30, 2024. In response to commenter request, the EPA is now extending the comment period for the proposed rule to January 29, 2025.
The comment period for the proposed rule published on November
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2024-0417 at
Allison Kawasaki, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105; phone: (415) 972-3922; email:
On November 29, 2024 (89 FR 94633), the EPA published the proposed rule “Air Plan Conditional Approval; California; Bay Area Air Quality Management District” in the
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a revision to the Mojave Desert Air Quality Management District (MDAQMD) portion of the California State Implementation Plan (SIP). This revision concerns emissions of oxides of nitrogen (NO
Comments must be received on or before January 27, 2025.
Submit your comments, identified by Docket ID No. EPA-R09-OAR-2024-0563 at
La Kenya Evans-Hopper, EPA Region IX, 75 Hawthorne St., San Francisco, CA 94105; phone: (415) 972-3245; email:
Throughout this document, “we,” “us,” and “our” refer to the EPA.
Table 1 lists the rule addressed by this proposal with the dates that it was adopted by the local air agency and submitted by the California Air Resources Control Board (CARB).
On July 10, 2024, the submittal for MDAQMD Rule 1157 was deemed by operation of law to meet the completeness criteria in 40 CFR part 51 appendix V.
On June 16, 2023, (88 FR 39366), we finalized a limited approval and limited disapproval of Rule 1157 as adopted on January 22, 2018. The MDAQMD adopted revisions to the SIP-approved version on September 25, 2023, and CARB submitted them to us on January 10, 2024. If we take final action to approve the September 25, 2023 version of Rule 1157, this version will replace the previously approved version of this rule in the SIP.
Emissions of NO
Revised Rule 1157 establishes emission limits of NO
The EPA's technical support document (TSD) has more information about this rule.
Rules in the SIP must be enforceable (see CAA section 110(a)(2)), must not interfere with applicable requirements concerning attainment and reasonable further progress or other CAA requirements (see CAA section 110(l)).
Generally, SIP rules must require reasonably available control technology (RACT) for each major source of NO
In our June 16, 2023 action, we found that Rule 1157 was largely consistent with the relevant CAA requirements, including RACT. However, in that rulemaking we identified certain deficiencies that prevented full approval of Rule 1157. As a result, in this rulemaking, we focus our analysis primarily on the revisions that have recently been made to Rule 1157.
Guidance and policy documents that we used to evaluate enforceability, revision/relaxation, and rule stringency requirements for the applicable criteria pollutants include the following:
1. “Issues Relating to VOC [volatile organic compound] Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook, revised January 11, 1990).
2. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).
3. “NO
4. “Withdrawal of the October 9, 2020, Memorandum Addressing Startup, Shutdown, and Malfunctions in State Implementation Plans and Implementation of the Prior Policy,” EPA, September 30, 2021.
5. “State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction,” EPA, June 12, 2015, 80 FR 33839.
6. “Inclusion of Provisions Governing Periods of Startup, Shutdown, and Malfunctions in State Implementation Plans,” EPA October 9, 2020.
7. “Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters,” CARB, July 18, 1991.
In our 2023 action, we determined that section (E)(1)(b)(iii) of Rule 1157, which provided that “[n]o compliance determination shall be established based on data obtained from compliance testing, including integrated sampling methods, during a start-up period or shut-down period,” was not consistent with the EPA's SSM policy and Credible Evidence Rule because it forbids the use of credible evidence (compliance testing data generated during startup and shutdown periods) in establishing violations of the applicable emissions limit. In addition, the rule revision removed the definitions of “start-up period” and “shut-down period,” making the scope of this provision unclear. The District has corrected this deficiency by removing section (E)(1)(b)(iii) from Rule 1157. In addition, the District made other improvements to Rule 1157 based on EPA's prior recommendations. The TSD has more information on our evaluation.
Considering the most recent revisions to Rule 1157, we propose to fully approve Rule 1157 because it meets all applicable CAA requirements and is consistent with relevant guidance regarding enforceability, RACT, and SIP revisions. If we finalize this rulemaking as proposed, MDAQMD will have corrected the deficiencies identified in our prior action, and all sanction and Federal implementation plan clocks started by our June 16, 2023 action would be permanently stopped. We are concurrently making an interim final determination to defer CAA section 179 sanctions associated with our June 16, 2023 rulemaking finalizing a limited approval and limited disapproval of Rule 1157. Consistent with our order of sanction regulations,
As authorized in section 110(k)(3) of the Act, the EPA proposes to approve the submitted rule because it fulfills all relevant requirements. We will accept comments from the public on this proposal until January 27, 2025. If we take final action to approve the submitted rule, our final action will incorporate this rule into the federally enforceable SIP. In addition, it will permanently stop the sanctions and Federal implementation plan (FIP) clocks started by our June 16, 2023 final action.
In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the MDAQMD Rule 1157, “Boilers and Process Heaters,” amended on September 25, 2023, which regulates NO
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve State choices, provided that they meet the criteria of the Act. Accordingly, this proposed action merely proposes to approve State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this proposed action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it proposes to approve a State program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA.
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian Tribe has demonstrated that a Tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on communities with environmental justice (EJ) concerns to the greatest extent practicable and permitted by law. Executive Order 14096 (Revitalizing Our Nation's Commitment to Environmental Justice for All, 88 FR 25251, April 26, 2023) builds on and supplements Executive Order 12898 and defines EJ as, among other things, “the just treatment and meaningful involvement of all people, regardless of income, race, color, national origin, Tribal affiliation, or disability, in agency decision-making and other Federal activities that affect human health and the environment.”
The State did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. The EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of Executive Orders 12898 and 14096 of achieving EJ for communities with EJ concerns.
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Nitrogen oxides, Ozone, Reporting and recordkeeping requirements.
Environmental Protection Agency.
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a revision to the State of New York's State Implementation Plan (SIP) for the ozone National Ambient Air Quality Standard (NAAQS) related to a Source-specific SIP (SSSIP) revision for Lehigh Cement Company LLC, located at 313 Warren Street, Glens Falls, New York (the Facility). The EPA is proposing to find that the control options in this SSSIP revision implement Reasonably Available Control Technology (RACT) with respect to nitrogen oxide (NO
Comments must be received on or before January 27, 2025.
Submit your comments, identified by Docket Number EPA-R02-OAR-2023-0242, at
Stephanie Lin, Air Programs Branch, Environmental Protection Agency, Region 2 Office, 290 Broadway, 25th Floor, New York, New York 10007-1866, 212-637-3711, or by email at
Ground level ozone is predominantly a secondary air pollutant created by chemical reactions that occur when ozone precursors, including nitrogen oxides (NO
A geographic area of the United States that is not meeting the primary or secondary National Ambient Air Quality Standard (NAAQS) for ozone is described as a nonattainment area. Nonattainment areas are classified as either Marginal, Moderate, Serious, Severe, or Extreme. With respect to this proposed action, there are two relevant ozone NAAQS standards. First, on March 12, 2008, the EPA promulgated a revision to the ozone NAAQS, setting both the primary and secondary standards at 0.075 parts per million (ppm) averaged over an 8-hour time frame (2008 8-hour Ozone Standard).
The State of New York has two ozone nonattainment areas: (1) Jamestown, and (2) the New York Metro Area,
RACT is defined as the lowest emission limit that a source is capable of meeting through the application of control technology that is reasonably available considering technological and economic feasibility. The CAA section 182, Plan Submissions and Requirements, requires States with ozone nonattainment areas to include in their statewide SIPs, among other things, provisions to require the implementation of RACT. CAA section 184(b)(2)
The plan provisions required under this subpart for major stationary sources of volatile organic compounds shall also apply to major stationary sources (as defined in section 7602 of this title and subsections (c), (d), and (e) of this section) of oxides of nitrogen.
The New York State Department of Environmental Conservation (NYSDEC) RACT regulations require applicable facilities to meet certain requirements, referred to as “presumptive RACT requirements.” These presumptive requirements generally require sources to implement emission limits, control efficiency requirements, specific control technologies, averaging plans, and/or fuel/raw material switching practices. In some instances, the presumptive RACT requirements may not be technologically or economically feasible for a certain source, and the State can make a source-specific RACT determination, which is submitted to the EPA as a SSSIP. The SSSIP should include the facility's RACT plan that demonstrates how the facility will implement RACT. The SSSIP will also
Under existing NYSDEC RACT regulations, facilities are required to assess all technologically feasible control options that meet the State's cost threshold. The cost threshold for NYSDEC RACT requirements is found under NYSDEC 2013 policy, “DAR-20 Economic and Technical Analysis for Reasonably Available Control Technology (RACT).” Under this policy, facilities must consider in their RACT determinations control technologies that remove VOC or NO
This action relates to a SSSIP revision that concerns a Portland cement manufacturing and quarry facility operated by Lehigh Cement Company LLC, located in Glens Falls, New York. This Lehigh Cement SSSIP was submitted by NYSDEC on July 1, 2022, and is intended to implement NO
The source at issue in this action is a short, dry preheater Kiln. NYSDEC RACT regulations establish RACT requirements for this source in 6 NYCRR Subpart 220-1, “Portland Cement Plants,” last approved in the New York SIP by the EPA on July 12, 2013. However, 6 NYCRR Subpart 220-1 does not establish presumptive NO
In November 2010, the Facility conducted a NO
Lehigh installed and is currently operating a selective non-catalytic reduction (SNCR) system to meet NO
A nationwide Federal consent decree (CD), Civil Action #5:19-cv-05688, was executed on November 18, 2020, due to violations that occurred, in pertinent part, at one or more of Lehigh Cement Company LLC's (Lehigh) Portland cement plants. The obligations of the CD were negotiated between Lehigh and the U.S. Department of Justice (on behalf of EPA as well as non-federal jurisdictions, including the State of New York), and are binding.
The terms of the CD imposed a lower emission limit (2.5 lbs NO
To comply with the requirements outlined in the CD, Lehigh revised its Air Title V Facility Permit to contain two permit conditions (permit conditions 85 and 86) that include the NO
The intended effect of this source-specific SIP revision is to: establish the source-specific emission limit by incorporating the NO
The EPA is proposing to determine through this SSSIP action that the NO
The Facility submitted a RACT plan for the emission limit requirements and
The EPA is proposing to determine that the proposed limit for Emission Unit 0-UKILN implements RACT because the Facility's more stringent BACT NO
The CAA and applicable implementing regulations neither prohibit nor require an evaluation of environmental justice (EJ) considerations and/or concerns, and so the State of New York did not evaluate EJ concerns as part of its SSSIP submittal. The EPA evaluated EJ concerns for informational purposes only and is providing the following details for transparency about this rulemaking to the public. The EPA did not rely on this information to reach any decisions described in this action. The EPA created a Community Report (Report) using its EJ Screen, Version 2.3. The Report is contained in the EPA docket assigned to this
The Report addresses a 1-mile ring centered at the Facility. All thirteen EJ Screen environmental indexes were considered for the Report: (1) Particulate matter; (2) ozone; (3) nitrogen dioxide; (4) diesel particulate matter; (5) toxic releases to air; (6) traffic proximity; (7) lead paint; (8) superfund proximity; (9) risk management plan (RMP) facility proximity; (10) hazardous waste proximity; (11) underground storage tanks; (12) wastewater discharge; and (13) drinking water noncompliance. Both the EJ Indexes and the Supplemental Indexes were verified using the thirteen environmental indexes. The difference between the EJ and Supplemental indexes is that the EJ Indexes combine data on low income and people of color populations, whereas the Supplemental Indexes combine data on percent low-income, percent persons with disabilities, percent limited English speaking, and low life expectancy. We analyze both EJ Indexes and Supplemental Indexes because they offer different perspectives on community level vulnerability based on different factors. The EPA uses the National percentile for the Report results and not the State percentile since this SSSIP action is a Federal action. The EPA notes that any environmental index result that is 80 percentile or greater is relatively high compared to the United States population. The “percentile” is what EJ Screen uses to compare the area of study to national figures.
The results of the EPA's environmental justice analysis indicated that the following National Supplemental Indexes were above the 80th percentile: Superfund Proximity and RMP Facility Proximity.
In addition, via EJScreen, the Facility was determined to be in a Justice40 area. In January 2021, President Joe Biden issued Executive Order (E.O.) 14008, Tackling the Climate Crisis at Home and Abroad. Section 223 of the E.O. established the Justice40 Initiative which directs 40 percent of certain Federal investments to flow to disadvantaged communities.
To understand the indexes that are at or higher than 80th percentile, and the Justice40 categories that represent Glens Falls, NY, refer to
The EPA is proposing to approve this current source-specific revision because the limit included in the SSSIP is demonstrated to implement RACT for the Kiln. Based on an analysis of this source-specific SIP revision, the EPA proposes to approve Lehigh Cement Company LLC's operation under the NO
In this document, the EPA is proposing to include regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference revisions to Lehigh Cement Company LLC Title V operating permit conditions 85 and 86 as described in section II of this preamble. The EPA has made, and will continue to make, these materials generally available through
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Clean Air Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it approves a State program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act.
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, Feb. 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on communities with environmental justice (EJ) concerns to the greatest extent practicable and permitted by law. Executive Order 14096 (Revitalizing Our Nation's Commitment to Environmental Justice for All, 88 FR 25251, April 26, 2023) builds on and supplements E.O. 12898 and defines EJ as, among other things, the just treatment and meaningful involvement of all people, regardless of income, race, color, national origin, or Tribal affiliation, or disability in agency decision-making and other Federal activities that affect human health and the environment.
The New York State Department of Environmental Conservation did not evaluate EJ considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA performed an EJ analysis, as is described earlier in the section titled, “EJ Considerations.” The analysis was done for the purpose of providing additional context and information about this rulemaking to the public, not as a basis of the action. In addition, there is no information in the record upon which this decision is based inconsistent with the stated goal of E.O. 12898/14096 of achieving EJ for communities with EJ concerns.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Oxides of nitrogen, Ozone, Reporting and recordkeeping requirements.
42 U.S.C. 7401
Fish and Wildlife Service, Interior.
Prior analysis and determination; opening of comment period.
We, the U.S. Fish and Wildlife Service, are opening a public comment period on a 2023 analysis regarding the significant portion of the range for the northern distinct population segment of the southern subspecies of the scarlet macaw (
We will accept comments received or postmarked on or before January 27, 2025. Comments submitted electronically using the Federal eRulemaking Portal (see
You may submit comments by one of the following methods:
(1)
(2)
We request that you send comments only by the methods described above. We will post all comments on
Rachel London, Manager, Branch of Delisting and Foreign Species, Ecological Services Program, U.S. Fish and Wildlife Service, MS: ES, 5275 Leesburg Pike, Falls Church, VA 22041-3803 (telephone 703-358-2171). Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
On February 26, 2019, we, the U.S. Fish and Wildlife Service (Service), published in the
The 2019 rule revised the List of Endangered and Threatened Wildlife in title 50 of the Code of Federal Regulations (at 50 CFR 17.11(h)) to add the northern subspecies of scarlet macaw (
In the 2019 rule, we determined that the northern DPS of the southern subspecies of scarlet macaw meets the definition of a threatened species because it was likely to become in danger of extinction within the foreseeable future throughout all of its range. At that time, we followed our Final Policy on Interpretation of the Phrase “Significant Portion of Its Range” in the Endangered Species Act's
After the 2019 rule was published, the portion of the Final Policy that we had relied upon in the 2019 rule was vacated in
In response to the Court's decision, we published a document in the
Taking into consideration all public comments received on the 2022 reconsideration and based on our additional analysis, on April 3, 2023, we published a new SPR analysis and final threatened species determination for the northern DPS of the southern subspecies of scarlet macaw (88 FR 19549; hereafter, “the 2023 SPR analysis”).
In the 2023 SPR analysis, we assessed four portions of the northern DPS of the southern subspecies of scarlet macaw: the Pacific slope of Costa Rica, mainland Panama, Colombia west of the Andes, and Panama and Colombia combined. We concluded that none of the portions in the northern DPS are both in danger of extinction and significant. Having completed the SPR analysis for the northern DPS and having determined that the northern DPS is not in danger of extinction in any significant portion of its range, we did not propose to revise the current status of the southern subspecies of scarlet macaw in the northern DPS. Therefore, we affirmed the listing of the scarlet macaw as set forth in the 2019 rule.
For a description of previous Federal actions concerning the scarlet macaw, please refer to the 2022 reconsideration (87 FR 66093, November 2, 2022) and the 2023 SPR analysis (88 FR 19549, April 3, 2023).
In response to an amended complaint filed by Friends of Animals, the Court found that we inappropriately limited the scope of public comments in the 2022 reconsideration. On July 10, 2024, the Court vacated the 2023 SPR analysis and remanded it to us to reconduct that analysis after soliciting and considering public comments on the relevant, substantive issues. Accordingly, with this document, we hereby open a 30-day public comment period on the 2023 SPR analysis with no limitations on the comments requested.
We will accept written comments and information during this comment period on our 2023 SPR analysis for the northern DPS of the southern subspecies of scarlet macaw (88 FR 19549, April 3, 2023). Consistent with the Court's order in
Comments should be as specific as possible. Please include sufficient information with your submission (such as scientific journal articles or other publications) to allow us to verify any scientific or commercial information you include. Please note that section 4(b)(1)(A) of the Act directs that determinations as to whether any species is an endangered species or a threatened species must be made solely on the basis of the best scientific and commercial data available. Comments or information already submitted on the proposed rule (77 FR 40222, July 6, 2012); revised proposed rule (81 FR 20302, April 7, 2016); or the 2022 reconsideration of the 2019 rule (87 FR 66093, November 2, 2022) need not be resubmitted. Any such comments are already incorporated as part of the public record of the rulemaking proceeding, and we will fully consider them as part of this action.
You may submit your comments and materials by one of the methods listed in
The primary authors of this document are the staff members of the Fish and Wildlife Service's Species Assessment Team and the Branch of Delisting and Foreign Species.
The Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Martha Williams, Director of the U.S. Fish and Wildlife Service, approved this action on December 3, 2024. Acting Director Steve Guertin approved these packages December 15, 2024. On December 16, 2024, the acting Director authorized the undersigned to sign the document electronically and submit it to the Office of the Federal Register for
Fish and Wildlife Service, Interior.
Proposed rule.
We, the U.S. Fish and Wildlife Service (Service), propose to list the blue tree monitor (
We will accept comments received or postmarked on or before February 24, 2025. Comments submitted electronically using the Federal eRulemaking Portal (see
(1)
(2)
We request that you send comments only by the methods described above. We will post all comments on
Rachel London, Manager, Branch of Delisting and Foreign Species, Ecological Services Program, U.S. Fish and Wildlife Service, MS: ES, 5275 Leesburg Pike, Falls Church, VA 22041-3803; telephone 703-358-2171. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States. Please see Docket No. FWS-HQ-ES-2023-0033 on
We intend that any final action resulting from this proposed rule will be based on the best scientific and commercial data available and be as accurate and as effective as possible. Therefore, we request comments or information from other governmental agencies, Native American Tribes, the scientific community, industry, or any other interested parties concerning this proposed rule. We particularly seek comments concerning:
(1) The species' biology, range, and population trends, including:
(a) Biological or ecological requirements of the species, including habitat requirements for feeding, breeding, and sheltering;
(b) Genetics and taxonomy;
(c) Historical and current range, including distribution patterns and the locations of any additional populations of this species;
(d) Historical and current population levels, and current and projected trends; and
(e) Past and ongoing conservation measures for the species, its habitat, or both.
(2) Threats and conservation actions affecting the species, including:
(a) Factors that may be affecting the continued existence of the species, which may include habitat destruction, modification, or curtailment; overutilization; disease; predation; the inadequacy of existing regulatory mechanisms; or other natural or manmade factors;
(b) Biological, commercial trade, or other relevant data concerning any threats (or lack thereof) to this species; and
(c) Existing regulations or conservation actions that may be addressing threats to this species.
(3) Additional information concerning the historical and current status of this species.
Please include sufficient information with your submission (such as scientific journal articles or other publications) to allow us to verify any scientific or commercial information you include.
Please note that submissions merely stating support for, or opposition to, the action under consideration without providing supporting information, although noted, do not provide substantial information necessary to support a determination. Section 4(b)(1)(A) of the Act (16 U.S.C. 1533(b)(1)(A)) directs that determinations as to whether any species is an endangered or a threatened species must be made solely on the basis of the best scientific and commercial data available.
You may submit your comments and materials concerning this proposed rule by one of the methods listed in
If you submit information via
Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on
Our final determination may differ from this proposal because we will consider all comments we receive during the comment period as well as any information that may become available after this proposal. Based on the new information we receive (and, if relevant, any comments on that new information), we may conclude that the species is threatened instead of endangered, or we may conclude that the species does not warrant listing as either an endangered species or a threatened species. In our final rule, we will clearly explain our rationale and the basis for our final decision, including why we made changes, if any, that differ from this proposal.
Section 4(b)(5) of the Act (16 U.S.C. 1533(b)(5)) provides for a public hearing on this proposal, if requested. Requests must be received by the date specified in
On April 15, 2022, we received a petition from the Center for Biological Diversity to list the blue tree monitor as an endangered species under the Act (16 U.S.C. 1531
A species status assessment (SSA) team prepared an SSA report for the blue tree monitor. The SSA report currently is undergoing peer review and will be finalized before a final listing decision is made. The SSA team was composed of Service biologists, in consultation with other species experts. The SSA report represents a compilation of the best scientific and commercial data available concerning the status of the species, including the impacts of past, present, and future factors (both negative and beneficial) affecting the species.
In accordance with our joint policy on peer review published in the
The blue tree monitor (
The blue tree monitor is endemic to the island of Batanta, within the Raja Ampat Islands of Papua, Indonesia (Böhme and Jacobs 2004, p. 214). Batanta has a total area of 455 square kilometers (sq km) (174.9 square miles (sq mi)), with a maximum length of 61 kilometers (km) (37.9 miles (mi)) and a maximum width of 13 km (8.1 mi) (Ziegler et al. 2009, p. 122). The species is rarely encountered on Batanta, so there is little detail available on the species' life-history and habitat requirements (Philipp and Philipp 2007, p. 867; Auliya and Koch 2020, p. 72). The blue tree monitor is diurnal and arboreal (Böhme and Jacobs 2004, p. 214; Del Canto 2013, p. 19; Ziegler et al. 2009, p. 122), primarily feeds on invertebrates (Auliya and Koch 2020, p. 72; Del Canto 2013, p. 20), and occupies low-lying forested habitats with an ambient humidity that ranges from 65 to 100 percent (Del Canto 2013, p. 19; Sprackland 2011, unpaginated).
No published studies describe the reproductive biology of the blue tree monitor in the wild; however, experts suggest that breeding activity coincides with periods of reduced rainfall, such as the post-monsoonal dry season (Rahmanto et al. 2022, p. 20; Ziegler et al. 2009, p. 130). Blue tree monitors are capable of laying up to four clutches of 2 to 7 eggs (average of 3.9 ± 1.2 eggs per clutch) per year, and the shortest interval between subsequent clutches was recorded at 95 days (Ziegler et al. 2009, p. 130). Because blue tree monitors take approximately 2 years to reach sexual maturity (Rauhaus et al. 2014, p. 33), we estimate the average generation time for the species to be approximately 2.5 years.
No quantitative population information for the species exists (Bennett 2015, p. 50), though there is evidence of declines in the wild population on Batanta as a result of overcollection for the pet trade (Arida et al. 2021, pp. 113-114; Del Canto 2013, p. 19; see
A thorough review of the taxonomy, life history, and ecology of the blue tree monitor is presented in the SSA report (version 1.1; Service 2024, pp. 1-7).
Section 4 of the Act (16 U.S.C. 1533) and the implementing regulations in title 50 of the Code of Federal Regulations set forth the procedures for determining whether a species is an endangered species or a threatened species, issuing protective regulations for threatened species, and designating critical habitat for endangered and threatened species.
The Act defines an “endangered species” as a species that is in danger of extinction throughout all or a significant portion of its range, and a “threatened species” as a species that is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. The Act requires that we determine whether any species is an endangered species or a threatened species because of any of the following factors:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
These factors represent broad categories of natural or human-caused actions or conditions that could have an effect on a species' continued existence. In evaluating these actions and conditions, we look for those that may have a negative effect on individuals of the species, as well as other actions or conditions that may ameliorate any negative effects or may have positive effects.
We use the term “threat” to refer in general to actions or conditions that are known to or are reasonably likely to negatively affect individuals of a species. The term “threat” includes actions or conditions that have a direct impact on individuals (direct impacts), as well as those that affect individuals through alteration of their habitat or required resources (stressors). The term “threat” may encompass—either together or separately—the source of the action or condition or the action or condition itself.
However, the mere identification of any threat(s) does not necessarily mean that the species meets the statutory definition of an “endangered species” or a “threatened species.” In determining whether a species meets either definition, we must evaluate all identified threats by considering the species' expected response and the effects of the threats—in light of those actions and conditions that will ameliorate the threats—on an individual, population, and species level. We evaluate each threat and its expected effects on the species, then analyze the cumulative effect of all of the threats on the species as a whole. We also consider the cumulative effect of the threats in light of those actions and conditions that will have positive effects on the species, such as any existing regulatory mechanisms or conservation efforts. The Secretary determines whether the species meets the definition of an “endangered species” or a “threatened species” only after conducting this cumulative analysis and describing the expected effect on the species.
The Act does not define the term “foreseeable future,” which appears in the statutory definition of “threatened species.” Our implementing regulations at 50 CFR 424.11(d) set forth a framework for evaluating the foreseeable future on a case-by-case basis, which is further described in the 2009 Memorandum Opinion on the foreseeable future from the Department of the Interior, Office of the Solicitor (M-37021, January 16, 2009; “M-Opinion,” available online at
The SSA report documents the results of our comprehensive biological review of the best scientific and commercial data available regarding the status of the species, including an assessment of the potential threats to the species. The SSA report does not represent our decision on whether the species should be proposed for listing as an endangered or threatened species under the Act. However, it does provide the scientific basis that informs our regulatory decisions, which involve the further application of standards within the Act and its implementing regulations and policies.
To assess the blue tree monitor's viability, we used the three conservation biology principles of resiliency, redundancy, and representation (Shaffer and Stein 2000, pp. 306-310). Briefly, resiliency is the ability of the species to withstand environmental and demographic stochasticity (for example, wet or dry, warm or cold years); redundancy is the ability of the species to withstand catastrophic events (for example, droughts, large pollution events); and representation is the ability of the species to adapt to both near-term and long-term changes in its physical and biological environment (for example, climate conditions, pathogens). In general, species viability will increase with increases in (and decrease with decreases in) resiliency, redundancy, and representation (Smith et al. 2018, p. 306). Using these principles, we identified the species' ecological requirements for survival and reproduction at the individual, population, and species levels, and described the beneficial and risk factors influencing the species' viability.
The SSA process can be categorized into three sequential stages. During the first stage, we evaluated the individual species' life-history needs. The next stage involved an assessment of the historical and current condition of the species' demographics and habitat characteristics, including an explanation of how the species arrived at its current condition. The final stage of the SSA involved making predictions about the species' responses to positive and negative environmental and anthropogenic influences. Throughout all of these stages, we used the best available information to characterize viability as the ability of a species to sustain populations in the wild over time, which we then used to inform our regulatory decision.
The following is a summary of the key results and conclusions from the SSA report; the full SSA report can be found at Docket No. FWS-HQ-ES-2023-0033 on
In this discussion, we review the biological condition of the species and its resources, and the threats that influence the species' current and future condition, in order to assess the species' overall viability and the risks to that viability.
Based on the species' biology described above and in the SSA report (version 1.1; Service 2024, pp. 1-7), the blue tree monitor requires an adequate supply of invertebrates for food; undisturbed, humid, lowland forests with good canopy cover and continuity; and sufficient conspecific individuals to find a mate. Owing to the limited data available, our assessment of species-level needs is developed further based on general principles as they apply to lizard biology.
Deforestation causes habitat loss that directly contributes to the decline of native reptile species in Indonesia
The Intergovernmental Panel on Climate Change predicts that continued greenhouse gas emissions will likely increase global temperatures to 1.5 degrees Celsius (°C) (2.7 degrees Fahrenheit (°F)) above pre-industrial levels by 2040, even under optimistic low-emissions scenarios (Lee et al. 2023, p. 12). Extreme wet and dry events in Indonesia are expected become more frequent (Kurniadi et al. 2024, p. 160), which will increase the likelihood of natural disasters, such as landslides (Ahmad et al. 2019, p. 2) and tropical cyclones (Christensen et al. 2007, p. 879). Natural disasters ultimately exacerbate habitat loss, and each additional catastrophic event increases extirpation risk for the blue tree monitor. Considering the life history and biology of the blue tree monitor, habitat loss and climate change will continue to decrease the species' viability because of the species' specialized habitat requirements and narrow distribution.
Blue tree monitors are valuable on the international pet market, and collecting and selling them is a source of income for local residents on Batanta (Arida et al. 2021, pp. 112-115). Newly described species that are popular in the pet trade are often overcollected to the point that they become extirpated from their type locality (Stuart et al. 2006, p. 1137), and blue tree monitors are already undetectable or extirpated from Pulau Ayem, the collection site of the original type specimen (Del Canto 2013, p. 19; Arida et al. 2021, pp. 112-114). Furthermore, lizard hunters in Amdui Village have reported they now find fewer blue tree monitors during week-long hunting sessions than they found historically, and they can no longer find the species within the vicinity of their village and must travel by boat to more remote areas of Batanta to collect the species (Arida et al. 2021, pp. 114-116). Despite the indication that overcollection likely is causing unsustainable population declines, the blue tree monitor continues to be heavily collected from the wild for the international pet trade (Arida et al. 2021, pp. 114-115).
It is illegal to export wild blue tree monitors from Indonesia (wild includes specimens taken from the wild and held in captivity, specimens born in captivity where the parents mated in the wild such as from fertilized eggs or gravid females collected from the wild, and any specimens for which there is insufficient evidence that the specimen meets the requirements for captive-bred or bred in captivity); however, it is legal to export individuals bred in captivity (CITES source code C) with a permit (see
Monitor lizards are often subject to stressful, unhygienic, and inhumane conditions along the trade route (Koch et al. 2013, p. 48), and many specimens are injured or die before they are exported from Indonesia (Natusch and Lyons 2012, p. 2902; Marshall and Beehler 2007, as cited in Koch et al. 2013, p. 48). Those blue tree monitors that survive the trade route often do not survive long in captivity because tree monitors are particularly susceptible to chronic dehydration and require specialized care (Mendyk 2015, p. 10). Between 22.5 and 26.4 percent of monitor lizards die before their second year in captivity, regardless of the specimen's origins (
According to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) Trade Database, between 2003 and 2022, a total of 5,502 individual blue tree monitors were exported from Indonesia for commercial purposes (Service 2024, p. 12). The United States is the largest importer of blue tree monitors and imported 1,455 live blue tree monitors from 2003 to 2022, which accounts for approximately 45 percent of the 3,225 global importations reported by CITES (Service 2024, pp. 11-13). In 2023, the Service's Law Enforcement Management Information System (LEMIS) recorded the importation of 153 individual blue tree monitors, the largest annual importation total to date, and more than double the
Because reptile collectors often desire to keep rare and brightly colored species in their collection (Altherr and Lameter 2020, p. 6), the market demand for blue tree monitors will likely remain high. Overcollection for the pet trade is known to cause extirpations in newly described reptile species (Stuart et al. 2006, p. 1137). Overcollection represents an immediate threat to the blue tree monitor's viability because unsustainable exploitation will likely lead to the species becoming a rarer and more valuable commodity on the pet market, and thus a more appealing target for collection (Janssen and Krishnasamy 2018, p. 2). The average declared value of individual blue tree monitors in LEMIS has steadily increased from approximately $300 in 2003 to $540 in 2024 (U.S. dollars; Service 2024, p. 9), which is likely a reflection of the increasing rarity of the species, and the increasing demand for the species driving further pressure on the species in the wild. Ultimately, the unsustainable collection of blue tree monitors increases the species' risk of extinction.
The blue tree monitor is not listed as a protected species in Indonesia (Regulation of the Republic of Indonesia No. 7/1999 on Preserving Flora and Fauna Species). Indonesia may establish a harvest and export quota for specifically listed non-protected species, which would allow for a purposeful, sustainable harvest of a species that benefits the local economy and ensures the long-term conservation of the species (Regulation of the Minister of Forestry No. 447/Kpts-11/2003). However, the blue tree monitor has no established harvest quota that allows for commercial trade, and, therefore, trade of wild-caught specimens is illegal under Indonesian law. Despite Indonesia having restrictions and guidelines in place to regulate the wildlife trade, few individuals abide by them (Natusch and Lyons 2012, p. 2905), and these laws and regulations are easily circumvented when trading protected species or species without commercial harvest quotas (Lyons and Natusch, 2011 p. 3; Natusch and Lyons, 2012 p. 2902).
Indonesia has been party to CITES since 1979, and the trade of CITES-listed wildlife from Indonesia is internationally monitored and regulated (Nijman 2019, pp. 197-198). All
Batanta has one protected area, Pulau Batanta Barat, that covers 170.95 sq km (66 sq mi), but it is unlikely that this area offers effective protection to blue tree monitors, because logging has been observed within the protected area (Newman and Valentinus 2005, p. 19; Takeuchi 2003, p. 105), and the laws protecting the area are not adhered to by locals or corporations (Koch 2016, p. 40).
The best available scientific and commercial data indicate the blue tree monitor is a narrow endemic with low genetic diversity comprised of a single population that occupies one island with an area of approximately 455 sq km (174.9 sq mi) (Ziegler et al. 2009, p. 122). While no quantitative population data are available to definitively assess the population status and population trends of the blue tree monitor (Bennett 2015, p. 50), we are able to assess the resiliency of the species based on a multitude of factors. Ecological traits alone leave the blue tree monitor prone to extinction, because the risk of extinction is highest in monitor lizards that are arboreal, endemic to small islands, and associated with pristine tropical rainforest habitats (Koch et al. 2013, p. 46). The blue tree monitor satisfies all three of these criteria, and the greatest threats to the species' viability are habitat loss and overcollection for the pet trade.
Much of the blue tree monitor's limited habitat has already been lost due to deforestation, and illegal logging is expected to continue on Batanta due to the island's remoteness and lack of legal enforcement (Webb 2005, p. 25; Newman and Valentinus 2005, p. 19; Takeuchi 2003, p. 105). Habitat loss reduces the amount of space that blue tree monitors are able to occupy, which leaves the population more vulnerable to catastrophic events (
Species with high redundancy are less vulnerable to random catastrophic events because they have many populations that are geographically dispersed over a wide area. Because the blue tree monitor exists in a single population that is dispersed over an area that amounts to less than 455 sq km (174.9 sq mi) (Ziegler et al. 2009, p. 122), the species is vulnerable to extinction caused by catastrophic events and, therefore, has low redundancy.
Representation is improved in species with high genetic variability or that inhabit a wide range of ecological settings; both of these characteristics facilitate adaptation to future environmental changes, whether natural or anthropogenic. Blue tree monitors do not occupy a wide range of ecological settings and are restricted to low-lying, humid forests on a single island (Ziegler et al. 2009, p. 122; Del Canto 2013, p. 19; Sprackland 2011, unpaginated). Climate change further threatens the viability of the single blue tree monitor population because an increased frequency of extreme dry events threatens to decrease ambient humidity (Kurniadi et al. 2024, p. 160), which may increase blue tree monitor mortality resulting from dehydration (Mendyk 2015, p. 10). Because the blue tree monitor only has one population that occupies a single narrow ecological setting and the species has a low capacity to adapt to future environmental changes, the species has low representation.
We note that, by using the SSA framework to guide our analysis of the scientific information documented in the SSA report, we have analyzed the cumulative effects of identified threats and conservation actions on the species. To assess the current and future condition of the species, we evaluate the effects of all the relevant factors that may be influencing the species, including threats and conservation efforts. Because the SSA framework considers not just the presence of the factors, but to what degree they collectively influence risk to the entire species, our assessment integrates the cumulative effects of the factors and replaces a standalone cumulative-effects analysis.
Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations (50 CFR part 424) set forth the procedures for determining whether a species meets the definition of an endangered species or a threatened species. The Act defines an “endangered species” as a species in danger of extinction throughout all or a significant portion of its range, and a “threatened species” as a species likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. The Act requires that we determine whether a species meets the definition of an endangered species or a threatened species because of any of the following factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence.
After evaluating threats to the species and assessing the cumulative effect of the threats under the Act's section 4(a)(1) factors, we determined that the blue tree monitor population has been reduced across its range because of the loss of its limited habitat and overcollection for the international pet trade. Because the blue tree monitor is threatened by overcollection for the international pet trade and only exists in a single population that is endemic to a small island that is threatened by historical and current habitat loss, the species is at increased risk of extirpation due to stochastic and catastrophic events, and is immediately at risk of extinction. The blue tree monitor currently maintains insufficient resiliency, redundancy, and representation for its continued existence to be secure.
Thus, after assessing the best scientific and commercial data available, we determine that the blue tree monitor is in danger of extinction throughout all of its range. The species does not meet the statutory definition of a threatened species because it is currently in danger of extinction, whereas threatened species are those likely to become in danger of extinction within the foreseeable future.
Under the Act and our implementing regulations, a species may warrant listing if it is in danger of extinction or likely to become so within the foreseeable future throughout all or a significant portion of its range. We have determined that the blue tree monitor is in danger of extinction throughout all of its range and accordingly did not undertake an analysis of any significant portion of its range. Because the blue tree monitor warrants listing as an endangered species throughout all of its range, our determination does not conflict with the decision in
Based on the best scientific and commercial information available, we determine that the blue tree monitor meets the Act's definition of an endangered species. Therefore, we propose to list the blue tree monitor as an endangered species in accordance with sections 3(6) and 4(a)(1) of the Act.
The purposes of the Act are to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, to provide a program for the conservation of such endangered species and threatened species, and to take such steps as may be appropriate to achieve the purposes of the treaties and conventions set forth in the Act. Under the Act, a number of steps are available to advance the conservation of species listed as endangered or threatened species. As explained further below, these conservation measures include: (1) recognition, (2) recovery actions, (3) requirements for Federal protection, (4) financial assistance for conservation programs, and (5) prohibitions against certain activities.
Recognition through listing results in public awareness, as well as in conservation by Federal, State, Tribal, and local agencies, foreign governments, private organizations, and individuals. The Act encourages cooperation with the States and other countries and calls for recovery actions to be carried out for listed species.
Section 7 of the Act is titled, “Interagency Cooperation,” and it mandates all Federal action agencies to use their existing authorities to further the conservation purposes of the Act and to ensure that their actions are not likely to jeopardize the continued existence of listed species or adversely modify critical habitat. Regulations implementing section 7 are codified at 50 CFR part 402.
Section 7(a)(2) states that each Federal action agency shall, in consultation with the Secretary, ensure that any action they authorize, fund, or carry out is not likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of designated critical habitat.
A Federal “action” that is subject to the consultation provisions of section 7(a)(2) of the Act is defined in our implementing regulations at 50 CFR 402.02 as all activities or programs of any kind authorized, funded, or carried out, in whole or in part, by Federal agencies in the United States or upon the high seas. With respect to the blue tree monitor, no known actions would require consultation under section 7(a)(2) of the Act. Given the regulatory definition of “action,” which clarifies that it applies to activities or programs “in the United States or upon the high seas,” the blue tree monitor is unlikely to be the subject of section 7 consultations, because the entire life cycle of this species occurs in terrestrial areas outside of the United States and the species is unlikely to be affected by U.S. Federal actions. Additionally, no critical habitat will be designated for this species because, under 50 CFR 424.12(g), we will not designate critical habitat within foreign countries or in other areas outside of the jurisdiction of the United States.
Section 8(a) of the Act (16 U.S.C. 1537(a)) authorizes the provision of limited financial assistance for the development and management of programs that the Secretary of the Interior determines to be necessary or useful for the conservation of endangered or threatened species in foreign countries. Sections 8(b) and 8(c) of the Act (16 U.S.C. 1537(b) and (c)) authorize the Secretary to encourage conservation programs for foreign listed species, and to provide assistance for such programs, in the form of personnel and the training of personnel.
The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to endangered wildlife. The prohibitions of section 9(a)(1) of the Act, and the Service's implementing regulations codified at 50 CFR 17.21, make it illegal for any person subject to the jurisdiction of the United States to commit, to attempt to commit, to solicit another to commit, or to cause to be committed any of the following acts with regard to any endangered wildlife: (1) import into, or export from, the United States; (2) take (which includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct) within the United States, within the territorial sea of the United States, or on the high seas; (3) possess, sell, deliver, carry, transport, or ship, by any means whatsoever, any such wildlife that has been taken illegally; (4) deliver, receive, carry, transport, or ship in interstate or foreign commerce, by any means whatsoever and in the course of commercial activity; or (5) sell or offer for sale in interstate or foreign commerce. Certain exceptions to these prohibitions apply to employees or agents of the Service, the National Marine Fisheries Service, other Federal land management agencies, and State conservation agencies.
We may issue permits to carry out otherwise prohibited activities involving endangered wildlife under certain circumstances. Regulations governing permits for endangered wildlife are codified at 50 CFR 17.22, and general Service permitting regulations are codified at 50 CFR part 13. With regard to endangered wildlife, a permit may be issued: for scientific purposes, for enhancing the propagation or survival of the species, or for take incidental to otherwise lawful activities. The statute also contains certain exemptions from the prohibitions, which are found in sections 9 and 10 of the Act.
The Service may also register persons subject to the jurisdiction of the United States through its captive-bred wildlife (CBW) program if certain established requirements are met under the CBW regulations (see 50 CFR 17.21(g)). Through a CBW registration, the Service may allow a registrant to conduct certain otherwise prohibited activities under certain circumstances to enhance the propagation or survival of the affected species, including take; export or re-import; delivery, receipt, carriage, transport, or shipment in interstate or foreign commerce in the course of a commercial activity; or sale or offer for sale in interstate or foreign commerce. A CBW registration may authorize interstate purchase and sale only between entities that both hold a registration for the taxon concerned. The CBW program is available for species having a natural geographic distribution not including any part of the United States and other species that the Service Director has determined to be eligible by regulation. The individual specimens must have been born in captivity in the United States.
The provisions in section 9(b)(1) of the Act (16 U.S.C. 1538(b)(1)) provide a limited exemption from certain otherwise prohibited activities regarding wildlife specimens held in captivity or in a controlled environment on the pre-Act date (for species first listed after the enactment of the Endangered Species Act, the pre-Act date is the date of publication in the
Therefore, for pre-Act wildlife, there is a limited exemption from the prohibitions associated with: (1) import into, or export from, the United States of any endangered wildlife, or (2) violation of regulations pertaining to endangered or threatened wildlife. Other prohibitions of section 9—including those at section 9(a)(1)(B)-(F), regarding take of endangered wildlife, possession and other acts with unlawfully taken wildlife, interstate or foreign commerce in endangered wildlife, and sale or offer for sale of endangered wildlife—continue to apply to activities with qualifying endangered pre-Act wildlife specimens. Specimens born after the pre-Act date and specimens taken from the wild after the pre-Act date do not qualify as “pre-Act” wildlife under the text of section 9(b)(1) of the Act. If a person engages in any commercial activity with a “pre-Act” specimen on or after the pre-Act date, the wildlife would immediately cease to qualify as pre-Act wildlife and become subject to the relevant prohibitions, because it has been held or used in the course of a commercial activity.
Additional requirements apply to activities with all blue tree monitors, separate from their listing or proposed listing as an endangered species or threatened species. As a CITES-listed species, all international trade of any blue tree monitor by persons subject to the jurisdiction of the United States
Published concurrently in the Rules and Regulations section of this issue of the
We are required by E.O.s 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:
(1) Be logically organized;
(2) Use the active voice to address readers directly;
(3) Use clear language rather than jargon;
(4) Be divided into short sections and sentences; and
(5) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us comments by one of the methods listed in
We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act (42 U.S.C. 4321
A complete list of references cited in this proposed rulemaking is available on the internet at
The primary authors of this proposed rule are the staff members of the Fish and Wildlife Service's Species Assessment Team and the Branch of Delisting and Foreign Species.
Endangered and threatened species, Exports, Imports, Plants, Reporting and recordkeeping requirements, Transportation, Wildlife.
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Martha Williams, Director of the U.S. Fish and Wildlife Service, approved this action on December 3, 2024. Acting Director Steve Guertin approved these packages December 15, 2024. On December 16, 2024, the acting Director authorized the undersigned to sign the document electronically and submit it to the Office of the Federal Register for publication as an official document of the U.S. Fish and Wildlife Service.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS proposes to approve changes to the Pacific Halibut Catch Sharing Plan for the International Pacific Halibut Commission's regulatory Area 2A off Washington, Oregon, and California. In addition, NMFS proposes to implement new management measures for the 2025 recreational fisheries in Area 2A that are not implemented through the International Pacific Halibut Commission (IPHC). These measures include the recreational fishery seasons and subarea allocations for Area 2A. This action would also add a new inseason management provision to transfer anticipated uncaught recreational fishery allocation from the Northern California subarea to the South of Point Arena subarea. These actions are intended to conserve Pacific halibut and provide angler opportunity where available.
Comments on the proposed rule must be received on or before January 27, 2025.
A plain language summary of this proposed rule is available at
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Melissa Mandrup, phone: 562-980-3231 or email:
The Northern Pacific Halibut Act of 1982 (Halibut Act), 16 U.S.C. 773-773k, gives the Secretary of Commerce responsibility for implementing the provisions of the Convention between Canada and the United States for the Preservation of the Halibut Fishery of the North Pacific Ocean and Bering Sea (Halibut Convention, signed at Ottawa, Ontario, on March 2, 1953), as amended by a Protocol Amending the Convention,(signed at Washington, DC, on March 29, 1979), including adopting regulations to carry it out (16 U.S.C. 773c). Additionally, the regional fishery management councils having authority for the geographic area concerned may develop, and the Secretary of Commerce may implement, regulations governing Pacific halibut fishing in in U.S. waters that are in addition to, and not in conflict with, approved IPHC regulations (
As provided in the Halibut Act at 16 U.S.C. 773b, the Secretary of State, with the concurrence of the Secretary of Commerce, may accept or reject, on behalf of the United States, regulations recommended by the IPHC in accordance with the Convention. Following acceptance by the Secretary of State, the annual management measures promulgated by the IPHC are published in the
Since 1988, the Pacific Fishery Management Council (Council) has developed a CSP that allocates the IPHC regulatory Area 2A Pacific halibut FCEY between treaty Tribal and non-Tribal harvesters and among non-Tribal commercial and recreational (sport) fisheries. NMFS has implemented at 50 CFR 300.63
This rule proposes to approve the changes the Council recommended at its November 2024 meeting to the 2025 Area 2A CSP. The recommended changes to the 2025 CSP were developed through the Council's public process over multiple meetings. This rule also proposes to implement recreational Pacific halibut fishery management measures for 2025, which include season opening and closing dates consistent with 2025 CSP as modified by the Council's November 2024 recommendations.
Each year at the Council's September meeting, members of the public have an opportunity to propose changes to the CSP for consideration by the Council. At the September 2024 Council meeting, per the typical annual process, the Washington Department of Fish and Wildlife (WDFW), Oregon Department of Fish and Wildlife (ODFW), and California Department of Fish and Wildlife (CDFW) proposed changes to the CSP for the fisheries that occur off of their respective coasts.
At its November 2024 meeting, the Council considered the results of State-sponsored workshops on the proposed changes to the CSP, along with public input provided at the September and November 2024 Council meetings, and made its recommendations for modifications to the CSP. NMFS proposes to approve all the Council's recommended changes to the CSP, which are discussed below.
1. The Council recommended changes to Section 5.6.4 of the Catch Sharing Plan regarding the notice and timing of non-tribal directed commercial fishery sequential season openings. Specifically, the Council recommended that NMFS notice the dates for the first three openers in the
2. In section 6.9.2(d) of the CSP, the Council recommended that NMFS revise the season structure in the Washington North Coast subarea to allow for fishing on the Saturday of Memorial Day Weekend if the 2A FCEY is at least 1.3 million pounds (lb) or 589.7 metric tons (mt) and up to 3 days per week in June if the Area 2A FCEY is less than 1.3 million lb (589.7 mt).
2. In section 6.9.3(d) of the CSP, the Council recommended that NMFS revise the season structure in the Washington South Coast subarea to include the Sunday of Memorial Day Weekend.
3. In section 6.10(d) of the CSP, the Council recommended that NMFS revise the season structure in the Columbia River subarea to allow for 2 additional days be added to the 3-day opener in June depending on the remaining allocation for the subarea.
4. In section 6.11(d) of the CSP, the Council recommended that NMFS revise the allocations and season structure in the Oregon Central Coast subarea to allow more of the Central Coast allocation to be for the all-depth fisheries (
5. In sections 6.8.1 and 6.12 of the CSP, the Council recommended that NMFS allow for inseason transfers of the Northern California allocation to the South of Point Arena subarea. Specifically, in section 6.8.1(f), the Council recommended that NMFS allow for an inseason transfer of any projected unused Northern California subarea allocation by the season ending date of November 15 from the Northern California subarea to the South of Point Arena subarea. For section 6.12(f), the Council recommended that NMFS allow for an inseason transfer (
Additional discussion of these changes is included in the materials submitted to the Council at its September and November meetings, available at
As described above, NMFS proposes to implement recreational fishery management measures, including season dates for the 2025 fishery, consistent with the Council's recommendations. The CSP includes a framework for setting days open for fishing by subarea; under this framework, each State submits final recommended season dates annually to NMFS during the proposed rule comment period. In addition, the final dates will be based on the 2025 FCEY Area 2A allocation, which is issued as described above. However, this proposed rule contains preliminary dates based on the CSP framework and/or recommendations received to date.
After the opportunity for public comment, including comments from WDFW, ODFW, and CDFW, and after each State has concluded its public meetings gathering input on season dates, NMFS will publish a final rule approving the CSP and promulgating the annual management measures for the Area 2A recreational fishery, as appropriate and required by implementing regulations at 50 CFR 300.63(c)(1). If there is any discrepancy between the CSP and Federal regulations, Federal regulations take precedence.
NMFS proposes recreational fishing subareas, allocations, and fishing dates as described below. Fishery and subarea allocations are provided in net weight. These provisions may be modified through inseason action consistent with 50 CFR 300.63(c). Inseason actions taken by NMFS will be published in the
The subarea allocation for landings into ports in Puget Sound and the U.S. waters in the Strait of Juan de Fuca will be provided in the final rule based on the allocation formula in the CSP.
(a) If the 2025 Area 2A FCEY is 1.3 million lb (589.7 mt) or greater, NMFS is proposing to open the Puget Sound and the U.S. Convention Waters in the Strait of Juan de Fuca fishery on April 3 through June 30, 7 days a week. If the subarea allocation remains for at least another full day of fishing after June 30, NMFS may take inseason action to reopen the fishery in August, up to 7 days per week, through September. The area will be closed when there is not sufficient subarea allocation for another full day of fishing. If the Puget Sound subarea season is closed prior to September 30 and there is insufficient allocation for an additional fishing day, then any remaining Puget Sound subarea allocation may be transferred inseason to another Washington coastal subarea by NMFS.
If the 2025 Area 2A FCEY is less than 1.3 million lb (589.7 mt), then NMFS proposes to open the fishery every Thursday, Friday, Saturday, Sunday, and Monday from April 3 through June 30. If the subarea allocation remains for at least another full day of fishing after June 30, NMFS may take inseason action to reopen the fishery in August, up to 7 days per week, through September. The area will be closed when there is not sufficient subarea allocation for another full day of fishing. If the Puget Sound subarea season is closed prior to September 30 and there is insufficient allocation for an additional fishing day, then any remaining Puget Sound subarea allocation may be transferred inseason to another Washington coastal subarea by NMFS.
Any inseason action, including closures and intrastate subarea allocation transfers, will be announced in accordance with Federal regulations at 50 CFR 300.63(c) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825.
(b) The daily bag limit is one Pacific halibut of any size per person.
The allocation for landings into ports in the Washington North Coast subarea will be provided in the final rule based on the allocation formula in the CSP.
(a) If the Area 2A 2025 FCEY is greater than 1.3 million lb (589.7 mt), NMFS is proposing to open the Washington North Coast fishery:
• May 1, 2, 3, 8, 9, 10, 15, 16, 17 (Thursday, Friday, Saturday),
• May 23, 24, 25 (Friday, Saturday, Sunday—Memorial Day weekend),
• May 29, 30, 31 (Thursday, Friday, Saturday),
• June 1, 5, 6, 7, 8, 12, 13, 14, 15, 19, 20, 21, 22, 26, 27, 28, 29 (Thursday, Friday, Saturday, Sunday).
If the subarea allocation remains for at least another full day of fishing after June 30, NMFS may take inseason action to reopen the fishery in August, up to 7 days per week, through September. The area will be closed when there is not sufficient subarea allocation for another full day of fishing. If the fishery is closed prior to September 30 and there is insufficient allocation remaining to reopen for another fishing day, then any remaining allocation may be transferred inseason to another Washington coastal subarea by NMFS. Any inseason action, including closures, will be announced
If the 2025 Area 2A FCEY is less than 1.3 million lb (589.7 mt), then NMFS is proposing to open the fishery:
• May 1, 3, 8, 10, 15, 17 (Thursday, Saturday),
• May 23 and May 25 (Friday, Sunday—Memorial Day weekend),
• May 29, 31 (Thursday, Saturday),
• June 5, 6, 7, 12, 13, 14, 19, 20, 21, 26, 27, 28 (Thursday, Friday, Saturday).
If the subarea allocation remains for at least another full day of fishing after June 30, NMFS may take inseason action to reopen the fishery in August, up to 7 days per week, through September. The area will be closed when there is not sufficient subarea allocation for another full day of fishing. If the fishery is closed prior to September 30 and there is insufficient allocation remaining to reopen for another fishing day, then any remaining allocation may be transferred inseason to another Washington coastal subarea by NMFS.
Any inseason action, including closures and intrastate subarea allocation transfers, will be announced in accordance with Federal regulations at 50 CFR 300.63(c) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825.
(b) The daily bag limit is one Pacific halibut of any size per person.
The allocation for landings into ports in the South Coast subarea will be provided in the final rule based on the allocation formula in the CSP. The South Coast subarea has a primary and a nearshore fishery.
(a) NMFS is proposing to open the Washington South Coast primary fishery:
• May 1, 4, 6, 8, 11, 13, 15, 18, 20, 22, 25, 27, 29 (Thursday, Sunday, Tuesday),
• June 12, 15, 17, 19, 22, 24, 26, 29 (Thursday, Sunday, Tuesday).
The fishery will close when there is not sufficient subarea allocation for another full day of fishing. If the subarea allocation remains for at least another full day of fishing after June 30, NMFS may take inseason action to reopen the fishery in August, up to 7 days per week, through September. The area will be closed when there is not sufficient subarea allocation for another full day of fishing. Any inseason action, including closures and intrastate subarea allocation transfers, will be announced in accordance with Federal regulations at 50 CFR 300.63(c) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825.
When the South Coast subarea primary fishery does not have sufficient allocation 0to open for at least another full day of fishing, any remaining primary fishery allocation will be used to open a nearshore fishery. The nearshore fishery will open the first Saturday after the closure of the primary fishery and will be open 7 days per week until there is not sufficient nearshore fishery allocation remaining for another full day of fishing, at which point the area will be closed.
If the primary fishery is closed prior to September 30 and there is not sufficient allocation remaining for at least a full day of fishing in the nearshore fishery, NMFS may take inseason action to transfer any remaining subarea allocation to another Washington coastal subarea.
Any inseason action, including closures and intrastate subarea allocation transfers, will be announced in accordance with Federal regulations at 50 CFR 300.63(c) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825.
(b) The daily bag limit is one Pacific halibut of any size per person.
The allocation for landings into ports in the Columbia River subarea will be provided in the final rule based on the allocation formula in the CSP. The Columbia River subarea has an all-depth fishery and a nearshore fishery.
If the 2025 2A FCEY is at least 1.3 million lb (589.7 mt), NMFS proposes to open the all-depth fishery as follows:
• May 1, 2, 4, 8, 9, 11, 15, 16, 18, 22, 23, 25, 29, 30 (Thursday, Friday, Sunday),
• June 1, 5, 6, 8, 12, 13, 15, 19, 20, 22, 26, 27, 29 (Thursday, Friday, Sunday).
If at least 55 percent of the Columbia River subarea allocation remains as of May 25, 2025, then NMFS may take inseason action to allow the all-depth fishery open the following additional days:
• June 9, 10, 16, 17, 30 (Monday and Tuesday).
If the 2025 2A FCEY is less than 1.3 million lb (589.7 mt), NMFS proposes to open the all-depth fishery as follows:
• May 1, 2, 4, 8, 9, 11, 15, 16, 18, 22, 23, 25, 29, 30 (Thursday, Friday, Sunday),
• June 1, 5, 6, 8, 12, 13, 15, 19, 20, 22, 26, 27, 29 (Thursday, Friday, Sunday).
The nearshore fishery will be open Monday through Wednesday following the opening of the all-depth fishery until the nearshore allocation is taken or September 30, whichever is earlier. On days when the all-depth halibut fishery is closed, taking, retaining, possessing, or landing halibut on groundfish trips is only allowed in the nearshore area.
If the subarea allocation remains for at least another full day of fishing after June 30, NMFS may take inseason action to reopen the nearshore fishery in August, up to 7 days per week, through September. The area will be closed when there is not sufficient subarea allocation for another full day of fishing. Any remaining subarea allocation may be transferred inseason to other Washington or Oregon subareas by NMFS in proportion to the allocation formula in the CSP, in accordance with Federal regulations at 50 CFR 300.63(c). Any inseason action, including closures and reallocation, will be announced in accordance with Federal regulations at 50 CFR 300.63(c) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825.
(b) The daily bag limit is one Pacific halibut of any size per person.
The allocation for landings into ports in the Oregon Central Coast subarea will be provided in the final rule based on the allocation formula in the CSP. The Oregon Central Coast subarea has a nearshore, a spring all-depth, and a summer all-depth fishery.
(a) If the FCEY is 1.2 million lb (544.3 mt) or greater, NMFS proposes 10,000 lb (4.5 mt) of the Central Coast subarea allocation be allocated to the nearshore fishery. If the FCEY is between 700,000 lb (317.5 mt) and 1.2 million lb (544.3 mt), NMFS proposes to allocate 25 percent of the Central Coast subarea allocation to the nearshore fishery. If the FCEY is less than 700,000 lb (317.5 mt), NMFS proposes to allocate 12 percent of the Central Coast subarea allocation to the nearshore fishery. For the season structure, NMFS proposes to open the nearshore fishery 7 days per week from May 1 through October 31 if the nearshore fishery allocation is 25,000 lb (11.3 mt) or more, or from June 1 through October 31 if the nearshore fishery allocation is less than 25,000 lb (11.3 mt). The area will be closed when there is not sufficient subarea allocation for another full day of fishing. Any closure will be announced in accordance with Federal regulations at 50 CFR 300.63(c)(3) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825.
If the FCEY is 1.2 million lb (544.3 mt) or greater, NMFS proposes 75 percent of the Central Coast subarea allocation be allocated to the spring all-
If the FCEY is 700,000 lb (317.5 mt) or greater, NMFS proposes 25 percent of the Central Coast subarea allocation be allocated to the summer all-depth fishery. If the FCEY is less than 700,000 lb (317.5 mt) the summer all-depth fishery will not open. Should the summer all-depth fishery receive an allocation, NMFS is proposing to open the summer all-depth fishery from August 1 through October 31. The area will close when there is not sufficient subarea allocation for another full day of fishing. At the close of the spring all-depth fishery (July 31), if there is 50,000 lb (22.7 mt) or more allocation remaining, NMFS proposes to open the summer all-depth fishery 7 days a week, every week, from August 1 through October 31. If there is is less than 50,000 lb (22.7 mt) allocation remaining, NMFS proposes to open the summer all-depth fishery 7 days a week, every other week, from August 1 through October 31. If the entire Central Oregon Coast subarea allocation is 30,000 lb (13.6 mt) or more following Labor Day Weekend, the summer all-depth season will be open every week. The subarea will close when the remaining combined spring all-depth fishery and summer all-depth fishery allocations in the Oregon Central Coast subarea is not sufficient for another full day of fishing. Any closure will be announced in accordance with Federal regulations at 50 CFR 300.63(c)(3) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825.
(b) The daily bag limit is two Pacific halibut of any size per person.
The allocation for landings into ports in the Southern Oregon subarea will be provided in the final rule based on the allocation formula in the CSP.
(a) NMFS is proposing to open the fishery May 1 through October 31 or until there is not sufficient subarea allocation for another full day of fishing, at which point the area will be closed. Any closure will be announced in accordance with Federal regulations at 50 CFR 300.63(c)(3) and on the NMFS hotline at (206) 526-6667 or (800) 662-9825
(b) The daily bag limit is two Pacific halibut of any size per person.
The allocation for landings into ports in the Northern California Coast subarea will be provided in the final rule based on the allocation formula in the CSP.
(a) NMFS is proposing to open the fishery May 1 through November 15 or until there is not sufficient subarea allocation for another full day of fishing, at which point the area will be closed. NMFS will announce any closure in accordance with Federal procedures at 50 CFR 300.63(c) and on the NMFS hotline (206) 526-6667 or (800) 662-9825.
(b) The daily bag limit is one Pacific halibut of any size per person.
The allocation for landings into ports in the South of Point Arena subarea will be provided in the final rule based on the allocation formula in the CSP.
(a) NMFS is proposing to open the fishery May 1 through December 31 or until there is not sufficient subarea allocation for another full day of fishing, at which point the area will be closed. NMFS will announce any closure in accordance with Federal procedures at 50 CFR 300.63(c)(3) and on the NMFS hotline (206) 526-6667 or (800) 662-9825.
(b) The daily bag limit is one Pacific halibut of any size per person.
In addition to the State-specific recreational fishing measures described above, NMFS also proposes to add an inseason provision for the California recreational subareas to provide for transfer of any projected unused Northern California subarea allocation to the South of Point Arena subarea prior to or by the end of the Northern California fishing season (November 15). The transfer of projected unused recreational fishery subarea allocation within a State is not a new concept in Area 2A as both Oregon and Washington have similar provisions. These changes are primarily intended to provide more opportunities for anglers to achieve but not exceed applicable allocations and were widely supported by stakeholders at multiple Council meetings.
While each year, in working with the Council and States, NMFS establishes State-specific season structures and management measures intended to fully attain the State's recreational fishery allocation and management objectives, partial attainment of a State recreational fishery allocation may occur, which contributes to lower attainment of the overall Area 2A FCEY. Certain existing inseason action provisions were intended as tools to achieve full attainment, such as modifying bag limits or the transfer of uncaught allocations within the Washington subareas and from the Columbia River subarea to other Washington and Oregon subareas as specified at 50 CFR 300.63(c)(6). However, under-attainment of the State recreational fishery allocations has still occurred despite these efforts to modify management measures inseason to meet the needs of the fishery.
As a way to address potential under-attainment of the State recreational fishery allocations in future years, the Council recommended adding an inseason provision for the California recreational subareas to transfer any projected unused Northern California subarea allocation to the South of Point Arena subarea. Therefore, through this action, NMFS proposes an inseason provision, through consultation with CDFW, where if NMFS determines that the Northern California subarea will be unable or unlikely to attain their originally established recreational subarea allocation for that fishing year, then NMFS may transfer any projected unused Northern California subarea allocation to the South of Point Arena subarea prior to or by the end of the Northern California fishing season (November 15). NMFS will announce any inseason action in accordance with Federal procedures at 50 CFR 300.63(c)(6) and on the NMFS hotline (206) 526-6667 or (800) 662-9825.
In previous years, the California recreational fishery has closed in late July/early August due to the fishery attaining their allocation from catches in what is now the Northern California subarea. However, in 2024, the Northern California subarea allocation was approximately 50 percent attained by the end of the season (November 15). During the summer, Pacific halibut are known to be encountered in other non-Pacific halibut directed recreational fisheries in the south of Point Arena subarea. Allowing the transfer of any projected unused Northern California subarea allocation to the South of Point Arena subarea prior to or by the end of the season could provide additional opportunities for anglers and charter operations across more of the State and
Under section 773 of the Halibut Act, the Pacific Fishery Management Council may develop, and the Secretary of Commerce may implement, regulations governing Pacific halibut fishing by U.S. fishermen in Area 2A that are in addition to, and not in conflict with, approved IPHC regulations (16 U.S.C. 773c(c)). The proposed rule is consistent with the Council and NMFS's authority under the Halibut Act.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities, for the following reasons:
For Regulatory Flexibility Act (RFA) purposes only, NMFS has determined that charter vessels targeting Pacific halibut are all small businesses. Charter fishing operations are classified under NAICS code 487210, with a corresponding Small Business Association size standard of $14 million in annual receipts (13 CFR 121.201).
This proposed rule would open the 2025 Area 2A Pacific halibut recreational fishery and establish season dates and subarea allocations. Additionally, this proposed rule would add an inseason management provision for the California recreational fishery to transfer any projected unused Northern California subarea allocation to the South of Point Arena subarea. These changes were uncontroversial throughout the Council's public process, and overall participation in the recreational fisheries is not expected to change.
This action would affect anglers, charter vessels (which are small entities), and small businesses relying on recreational fishing across all of Area 2A. There are no large entities involved in the Pacific halibut fisheries off the West Coast, and no commercial fishing entities are directly affected by this rule. None of these changes will have a disproportionately negative effect on small entities versus large entities. Private vessels used for recreational fishing are not businesses and are therefore not included in the RFA analysis.
In 2024, NMFS issued 77 permits to the charter vessel fleet for Area 2A. NMFS anticipates a similar number of permits to be issued in 2025 and assumes a majority of permit holders may be affected by these regulations as those vessels operate in Area 2A. The major effect of Pacific halibut management on small entities (
For the reasons described above, the proposed action, if adopted, will not have a significant economic impact on a substantial number of small entities. As a result, an initial regulatory flexibility analysis is not required and none has been prepared.
This proposed rule contains no information collection requirements under the Paperwork Reduction Act of 1995.
Administrative practice and procedure, Antarctica, Canada, Exports, Fish, Fisheries, Fishing, Imports, Indians, Labeling, Marine resources, Reporting and recordkeeping requirements, Russian Federation, Transportation, Treaties, Wildlife.
For the reasons set out in the preamble, NMFS proposes to amend 50 CFR part 300, subpart E, as follows:
16 U.S.C. 773-773k.
(c) * * *
(6) * * *
(i) * * *
(E) If the Northern California recreational (sport) subarea is not projected to utilize its respective allocation prior to or by the season ending date, NMFS may take inseason action to transfer any projected unused allocation to the South of Point Arena subarea.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by January 27, 2025 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
To operate a demonstration project, State agencies must prepare and submit new project requests, project modifications, and project renewal requests to FNS for approval. After review, FNS may issue a demonstration project approval, outlining the terms and conditions of the demonstration project. States must also prepare and submit data reports as part of the evaluation component to measure the project's intended outcomes and benefits.
State agencies must complete and submit new, modification, and extension requests in the SNAP Waiver Information Management System (WIMS). FNS uses the information provided by State agencies to evaluate and determine whether to approve or deny the demonstration project.
After the demonstration project is approved, State agencies must submit data reports to assess the project's overall performance. Data report requirements are detailed in the evaluation section of the demonstration project approval and may include, but is not limited to, selecting a case sample, conducting case reviews, and validating the findings. States complete demonstration project data reports using a combination of caseload-level data, SNAP Quality Control (QC) case review data, and, if needed, additional case reviews of client circumstances. Additional case reviews may be necessary if the minimum sample size for statistical analysis is not met through other means and involves a State reaching out to a household using the QC review process.
Annual reports allow FNS to monitor demonstration project trends such as average caseload size, demographic data (
Food and Nutrition Service (FNS), USDA.
Notice; Request for Information.
The U.S. Department of Agriculture's (USDA) Food and Nutrition Service (FNS) requests comments from the public to help inform future policymaking, guidance, and technical assistance related to grain-based desserts and high-protein yogurt (which may include Greek and Greek-style yogurt) crediting in the Child Nutrition Programs. FNS welcomes comments from all interested partners, including child nutrition professionals, State agencies, the food industry, the research community, and other individuals and organizations with an interest in the Child Nutrition Programs.
Written comments must be received on or before March 26, 2025.
USDA invites the submission of the requested information through one of the following methods:
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All comments submitted in response to this Request for Information will be included in the record and will be made available to the public. Please be advised that the substance of the comments and the identity of the individuals or entities submitting the comments will be subject to public disclosure. USDA will make the comments publicly available via
Heather Hopwood, School Meals Policy Division, Child Nutrition Programs, USDA Food and Nutrition Service, 703-305-2054.
The U.S. Department of Agriculture's (USDA's) Child Nutrition Programs (CNPs) help to ensure that participants have access to nutritious meals and snacks in schools, summer food service programs, child and adult care centers and homes, afterschool programs, and emergency shelters. Program operators plan meals and snacks that meet participants' nutrition and energy requirements by following meal patterns that are consistent with the goals of the “
CNP meal patterns establish the types of foods and minimum serving sizes that Program operators must offer to receive Federal reimbursement for meals or snacks served.
Crediting is the process established by FNS to determine how individual foods and beverages contribute toward meal pattern requirements. Menu planners comply with meal pattern requirements by designing menus that offer foods and beverages that “credit” toward meal component requirements. A food is “creditable” when it meets the minimum standards that count toward a reimbursable meal or snack. Generally, this means foods are grouped into categories of similar foods that are credited in a similar way. FNS' crediting system intends to provide simple information that allows Program operators to (1) easily plan menus with foods and beverages in quantities that meet meal pattern requirements, and (2) offer foods and beverages in a way that encourages healthy habits and teaches participants how to build well-balanced meals. Crediting information is conveyed to Program operators through regulations, resources such as FNS'
Several factors impact how foods and beverages credit toward CNP meal pattern requirements. Crediting decisions are made on the fullest range of factors possible to ensure transparency and consistency. The overall nutrient profile of a food is a primary consideration. Generally, foods in each meal component are based on a range of nutrients, rather than an individual product's specific nutrient profile. Another important factor is the usual and customary function of the food in a meal or a snack. One example of this principle is coffee cake offered at breakfast. In school breakfast, all cake varieties are prohibited from being offered to meet the grains requirement, except for coffee cake. Coffee cake has historically been allowed to contribute toward the grains requirement at school breakfast given its “usual and customary” function as a popular grain item served at breakfast in the United States. Foods and beverages that credit toward reimbursable meals and snacks sometimes have a Federal standard of identity. Federal standards of identity are established by the U.S. Food and Drug Administration (FDA) and the USDA Food Safety and Inspection Service (FSIS). They are mandatory requirements that determine what a food must contain to be marketed and sold under a certain name. FNS relies on FDA's and FSIS' standards of identity because they provide a common Federal standard under which specific foods are made. This allows FNS to establish crediting policy with confidence that products from all manufacturers will have the same characteristics and make consistent contributions to Program meal patterns.
FNS first considers Federal standards of identity when making crediting decisions. There are some commercial products on the market that do not have
FNS evaluates the CNPs' food crediting system on an ongoing basis to keep pace with the evolving food and nutrition environment, ensure participants have access to the nutrition they need, and offer excellent customer service to those operating, and benefitting from, the Programs. It is important that FNS' crediting system balances the nutritional needs of participants, as recommended by the
Grains play an important role in CNPs, helping Program operators offer a variety of food options for participants to enjoy as part of their meals and snacks. Products that are considered grain-based desserts may be offered to meet part of the grains requirement in some CNPs. Menu planners may offer grain-based desserts to encourage whole grains consumption and/or provide participants with foods they enjoy while still meeting nutritional standards. Under current policy, grain-based desserts include foods that are typically considered desserts, such as cakes, cookies and brownies, as well as other foods such as breakfast bars and toaster pastries.
The FDA defines the term “high” in its nutrient claim regulations (21 CFR 101.54(b)) as a food with 20 percent or more of the Reference Daily Intake (RDI) or Daily Reference Value (DRV) for a nutrient per Reference Amount Customarily Consumed (RACC), as established in 21 CFR 101.9(c)(8)(iv) or 21 CFR 101.9(c)(9), respectively.
Given this context, FNS is gathering additional public input on how to make its guidance related to grain-based desserts (and other grains high in added sugars) more effective at reducing added sugars in CNP menus, while also providing Program operator flexibility in menu planning, maintaining participant satisfaction, and continuing to make investments in the healthy, balanced diets of Program participants.
Consistent with the
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On February 7, 2023, FNS issued a proposed rule to update CNP meal pattern requirements:
To make progress toward reducing added sugars in CNPs, the final rule referenced above gradually phases in product-based and weekly added sugars limits. Product-based limits will be required for breakfast cereals, yogurt, and flavored milk by July 1, 2025, and added sugars will be limited to no more than 10 percent of total calories, per week, by July 1, 2027. FNS expects that the weekly limits will lead menu planners to choose grains that are lower in added sugars as they adjust their menu offerings to meet the limits. However, weekly limits also give menu planners flexibility to occasionally offer grains higher in added sugars, provided they are balanced with foods that are lower in added sugars throughout the week. While FNS recognizes that many partners prefer consistent requirements across the CNPs, the weekly limits for added sugars only apply to SBP and NSLP. Therefore, this approach would only be applicable to the school meals programs (SBP and NSLP).
FNS is considering how to best support schools as they work to meet the aforementioned added sugars requirements and is interested in understanding what guidance and technical assistance Program operators needed to help them identify grains high in added sugars and consider them in menu planning. FNS is also interested in partner input on how to improve and simplify its current grain-based desserts requirements, including whether changes would support efforts to reduce added sugars in the CNPs.
FNS welcomes public input on this topic and invites the public to submit other ideas to simplify current guidance, assist CNP operators in managing the use of grain-based desserts and other grain products high in added sugars, support schools in meeting the forthcoming added sugars limits, and reduce children's consumption of added sugars in the CNPs.
In addition to seeking input on grain-based desserts, FNS also seeks public input related to high-protein yogurt (which may include Greek and Greek-style yogurt), including how such yogurt is defined, if a definition separate from regular yogurt is warranted, and how high-protein yogurt should credit toward CNP meal pattern requirements.
Yogurt is a popular menu item and may credit toward all or part of the meats/meat alternates component in the CNPs.
Yogurt crediting in the CNPs was established in 1997. Since then, the variety of yogurt available at retail and in the K-12 market has grown and evolved significantly. Manufacturers offer a range of flavors and varieties, including high-protein yogurt (which may include Greek and Greek-style yogurt) and plant-based yogurt, to cater to diverse consumer preferences. High-protein yogurt (including some Greek and Greek-style yogurt) continues to expand in availability and popularity; it differs from regular yogurt due to its unique manufacturing process, which typically involves straining the product to remove liquid whey, resulting in a thicker yogurt with higher protein content. Yogurt can also be thickened without straining, by ultrafiltration,
FNS collaborates with industry partners to ensure that products are available for menu planners to offer nutritious foods and beverages that participants enjoy. In 2013, USDA operated a pilot program designed to test the cost effectiveness of making “Greek-style yogurt” available to schools in four States via USDA Foods in Schools. Greek-style yogurt is popular in school meals and schools expressed interest in procuring such yogurt via USDA Foods in Schools.
In 2017, FNS issued a Request for Information to solicit public input on a variety of crediting topics, including high-protein yogurt, and received a total of 437 comments. Most comments came from Program operators and individuals, but the food industry, advocacy organizations, and State agencies also submitted comments. In the 2017 Request for Information, FNS asked if a separate crediting standard should be created for high-protein yogurt that is different than the crediting standard for
As the CNPs and product availability continue to evolve, FNS seeks additional public input regarding high-protein yogurt crediting. This includes whether FNS should allow a lesser volume (
USDA has already adopted FDA's definition of “high” for nutrient claims in high-protein yogurt in some Programs. USDA Foods began using FDA's definition of “high” for nutrient claims in high-protein yogurt in 2013. The most recent USDA Commodity Requirements—Yogurt Products specification references the USDA Agricultural Marketing Service's Commercial Item Description for Yogurt, which includes the following: “6.1.2. High protein. Shall conform to the Standard of Identity for yogurt (21 CFR 131.200), lowfat yogurt (21 CFR 131.203), or nonfat yogurt (21 CFR 131.206) and shall meet the FDA requirements for a “high” nutrient content claim for protein (21 CFR 101.54(b)(1)).”
Public input in response to this Request for Information may inform future FNS policymaking related to how high-protein yogurt (including some Greek and Greek-style yogurt) credits toward meal pattern requirements (
FNS is committed to finding ways to ease menu planning for Program operators and ensure that children and adult participants have access to a wide array of nutritious food and beverage choices. Staying up to date with the evolving food environment through ongoing conversations with stakeholders helps FNS learn about additional food options that could improve Program menus. With these general interests in mind, FNS is seeking information on the following questions:
Although FNS has taken recent action to reduce added sugars in school meals,
Certain grain products, including cookies, cakes, cereal bars, and toaster pastries, are categorized as grain-based desserts based on their characteristics. FNS' current policy related to grain-based desserts is detailed in
1. What challenges do Program operators face in identifying grain-based desserts, under the current policies?
2. Is the current NSLP policy that permits up to two ounce equivalents of grain-based desserts per week effective at reducing added sugars in school lunches?
a. The weekly added sugars limit for NSLP will be implemented by July 1, 2027. Will the current grain-based dessert limit for NSLP lunch still be helpful for menu planning purposes, once the weekly added sugars limit is implemented?
3. Should FNS adjust its current grain-based desserts policies, such as changing which grain products are categorized as grain-based desserts?
In addition to potential changes to its current grain-based desserts policies, FNS is also interested in public input on alternative approaches that partners recommend to reduce added sugars in CNP meals. This includes seeking public input on grain products high in added sugars.
1. Should FNS consider alternative approaches to its current grain-based desserts policies, such as replacing these policies with limits for “grains high in added sugars”?
2. If FNS were to establish limits for “grains high in added sugars,” how should the limits be established?
a. Should FNS adopt FDA's definition for “high” for nutrient content claims used on food labels to define “grains high in added sugars”? What are the benefits or limitations of this approach?
b. What opportunities and challenges could arise from having different limits for grains offered to children ages one through three, versus children and adults ages four and older?
c. What other approaches should FNS consider to define “grains high in added sugars”?
FNS recognizes the specific challenges with reducing added sugars in school breakfast. The Agency invites public input on effective strategies to reduce added sugars at breakfast, including when using alternative school breakfast models.
1. Are there strategies for reducing added sugars in the SBP that would support menu planners offering a variety of grains in alternative SBP service models (
2. What menu items are schools serving to reduce added sugars at breakfast? Examples may include protein foods (
a. Please share examples of breakfast menu items lower in added sugars that are popular with students.
3. What additional resources from FNS could help Program operators reduce added sugars in CNP menus, including breakfast? Resources could include marketing ideas/materials, menu planners, online trainings and courses, and others.
Currently, all yogurt credits the same in CNPs: four ounces (weight) or 1/2 cup (volume) of yogurt is one ounce equivalent of meat alternate. FNS invites public comments to determine if different crediting is warranted for different types of yogurt, including high-protein yogurt, which may include Greek and/or Greek-style yogurt. Responses may help FNS determine how to define and credit high-protein yogurt in the CNPs.
Currently, four ounces (weight) or 1/2 cup (volume) of yogurt credits in the CNPs as one ounce equivalent of meat alternate. High-protein yogurt (which may include Greek and Greek-style yogurt) credits the same as regular yogurt.
1. Are Program operators currently offering Greek or Greek-style yogurt, or other types of yogurt that contain more protein than regular yogurt, as part of reimbursable meals or snacks?
a. To which age groups and in which meals are these types of yogurt offered?
b. How frequently are these types of yogurt offered?
c. Are these types of yogurt popular with participants? Are they more popular than regular yogurt?
2. If Program operators are not offering Greek or Greek-style yogurt, or other types of yogurt that contain more protein than regular yogurt, as frequently as desired, why not? What are the challenges with offering these types of yogurt?
3. Has high-protein yogurt available via USDA Foods in Schools helped school Program operators offer high-protein yogurt to participants?
a. Is high-protein yogurt incorporated into meals, particularly breakfast, in the same manner as traditional yogurt? Please share examples of how high-protein yogurt is used in menus and/or recipes; are traditional and high-protein yogurt used interchangeably or are there novel uses for high-protein yogurt in school meals?
FNS is interested in public input on potential changes to the current yogurt crediting policies, including what changes would be beneficial to Program operators and participants, and any challenges associated with potential changes.
1. Should FNS create a separate crediting standard for high-protein yogurt that is different than the crediting standard for regular yogurt? Why or why not?
2. If high-protein yogurt contributes differently to the CNP meal patterns than regular yogurt, how should high-protein yogurt be credited? Be as specific as possible, such as the volume or weight needed.
3. If high-protein yogurt were to contribute differently to the CNP meal patterns than regular yogurt, should FNS adopt FDA's definition of “high” for nutrient content claims used on food labels to define high-protein yogurt?
a. What are the benefits or limitations of this approach?
b. What opportunities or challenges could arise from having different limits for high-protein yogurt offered to children ages one through three, versus children and adults ages four and older?
4. If high-protein yogurt contributes differently to the CNP meal patterns than regular yogurt, should USDA place any limits on the types of yogurt that can qualify as high-protein yogurt?
a. Should changes be limited to any specific type of high-protein yogurt?
b. Should yogurt that is thickened by adding thickening agents (
c. Should changes include plant-based yogurt alternatives (
5. What other approaches should USDA consider for how to define and credit high-protein yogurt?
FNS welcomes additional input on its current yogurt crediting policies, potential alternatives for high-protein yogurt, and other feedback from partners.
National Agricultural Statistics Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the intention of the National Agricultural Statistics Service (NASS) to request revision and extension of a currently approved information collection, the Vegetable Surveys Program. A revision to burden hours will be needed due to changes in the size of the target population, sampling design, and/or questionnaire length.
Comments on this notice must be received by February 24, 2025 to be assured of consideration.
You may submit comments, identified by docket number 0535-0037, by any of the following methods:
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Joseph J. Prusacki, Associate Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, 202-720-2707. Copies of this information collection and related instructions can be obtained without charge from Richard Hopper, NASS—OMB Clearance Officer, at 202-720-2206 or at
Every 5 years NASS conducts a program review following the completion of the Census of Agriculture. The primary purpose is to ensure that the NASS annual estimating program targets commodities and states most relevant based on the latest available information. The last program reviewed occurred after the 2022 Census of Agriculture. The supporting statements, burden, questionnaires, and other documents (from 2022) will be revised in this renewal. All questionnaires included in this information collection will be voluntary.
All NASS employees and NASS contractors must also fully comply with all provisions of the Confidential Information Protection and Statistical Efficiency Act (CIPSEA) of 2018, Title III of Public Law 115-435, codified in 44 U.S.C. Ch. 35. CIPSEA supports NASS's pledge of confidentiality to all respondents and facilitates the agency's efforts to reduce burden by supporting statistical activities of collaborative agencies through designation of NASS agents, subject to the limitations and penalties described in CIPSEA.
All responses to this notice will become a matter of public record and be summarized in the request for OMB approval.
Rural Business-Cooperative Service, USDA.
Notice.
The Rural Business-Cooperative Service (RBCS or Agency), a Rural Development (RD) agency of the United State Department of Agriculture (USDA), announces the acceptance of applications and availability of funding under the Timber Production Expansion Guaranteed Loan Program (TPEP) for fiscal year (FY) 2024. These guaranteed funds will be made available to eligible lenders to make loans to eligible borrowers seeking to establish, reopen, retrofit, expand, or improve a sawmill or other wood processing facility, in close proximity to a unit of United States Forest Service (USFS) National Forest System lands, including Indian forest land or rangeland, identified as high priority or very high priority on the map accessible using the following link:
Completed applications may be submitted beginning December 26, 2024. Applications will be accepted until funds are exhausted.
Applicants are encouraged to contact the Agency to discuss projects and ask any questions about the program or application process. Entities wishing to apply for assistance may download the application documents and requirements delineated in this notice from:
Applicants are encouraged to contact their respective RD State Office for an email contact to submit an electronic application. A list of the USDA RD State Office contacts can be found at:
Shaun Stehr at
• Addressing Climate Change and Environmental Justice; Reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities.
• Advancing Racial Justice, Place-Based Equity, and Opportunity; Ensuring all rural residents have equitable access to RD programs and benefits from RD funded projects.
• Creating More and Better Market Opportunities; Assisting rural communities recover economically through more and better market opportunities and through improved infrastructure.
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(a) Loan amount. The total amount of guaranteed loans under this notice to one borrower, including the aggregate amount of guaranteed loans to affiliate entities dependent upon another's operations and generation of revenue for loan repayment, must not exceed $25 million.
(b) Percentage of guarantee. The percentage of guarantee will be 90 percent.
(c) Guarantee Fees. Guarantee fees, as determined under 7 CFR 5001.454, are not applicable to the TPEP program. The guaranteed loan will not have guarantee origination fees or annual guarantee service fees.
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(a) An entity engaged in or proposing to engage in establishing, reopening, retrofitting, expanding, or improving a sawmill or other wood-processing facility. For purposes of this notice, an eligible borrower entity may include a forest worker, logger, heavy equipment operator, material handler, or other professional entity responsible for purchasing and processing ecosystem restoration byproducts.
(b) Eligible borrowers must use ecosystem restoration byproducts from Federal or Tribal lands that USFS identified as high or very high priority for ecological restoration involving vegetation removal and must procure a significant amount of raw materials from Federal or Tribal lands. High priority designated lands can be found using the TPEP Priority Areas dashboard at the following link:
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(a) Lender fees, as determined under 7 CFR 5001.403.
(b) Professional service fees and charges, provided the Agency approves the amounts as reasonable and customary in the area and fees for construction permits and licenses.
(c) Feasibility studies and business plans.
(d) Interest (including interest on interim financing) during the period before the first principal payment becomes due or when the facility becomes income producing, whichever is earlier.
(e) Refinancing in accordance with 7 CFR 5001.102(d). Unless the amount to be refinanced is owed directly to the Federal Government or is federally guaranteed, no more than 50 percent of loan funds may be used to refinance existing debt.
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Carefully review this notice, 7 CFR parts 5001.301, 5001.302, 5001.303 and 5001.306, and the TPEP Application Guide, which collectively detail all required items for a complete application. Submitted applications and any accompanying materials become Federal records by law and cannot be returned to you.
Applicants may submit complete applications, until funds are expended, containing all parts necessary for the Agency to determine applicant and project eligibility, and to score the application in order to be considered.
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(a) At the time of application, each applicant must have an active registration in the System for Award Management (SAM) before submitting its application in accordance with 2 CFR part 25. To register in SAM, entities will be required to obtain a Unique Entity Identifier (UEI). Instructions for obtaining the UEI are available at
(b) Applicants must maintain an active SAM registration, with current, accurate and complete information, at all times during which it has an active Federal award or an application under consideration by a Federal awarding agency.
(c) Applicants must ensure they complete the Financial Assistance General Certifications and Representations in SAM.
(d) Applicants must provide a valid UEI in their application, unless determined exempt under 2 CFR 25.110.
(e) TheAgencywillnot make anaward until the applicant has complied with all SAM requirements including providing the UEI. If an applicant has not fully complied withthe requirements by the time theAgency is ready to make anaward, theAgency may determine that the applicant is not qualified to receive aFederalaward and use that determination as a basis for making aFederalaward to another applicant.
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In addition to the scoring criteria outlined in 7 CFR 5001.318, there will be an additional 10 points that may be awarded for projects that address wildfire risk reduction or that provide documented justification for the following RD key priority categories:
(a) Assisting rural communities recover economically through more and better market opportunities and through improved infrastructure. An applicant would receive priority points if the project is located in or serving a rural community whose economic well-being ranks in the most distressed tier (distress score of 80 or higher) of the Distressed Communities Index using the Distressed Communities Look-Up Map available at
(b) Ensuring all rural residents have equitable access to RD programs and benefits from RD funded projects. Using the Social Vulnerability Index (SVI) Look-Up Map (available at
• The project is located in or serving a community with score 0.75 or above on the SVI;
• The applicant is a federally recognized Tribe, including Tribal instrumentalities and entities that are wholly owned by Tribes; or
• Is a project where at least 50 percent of the project beneficiaries are members of federally Recognized Tribes and non-Tribal applicants include a Tribal Resolution of Consent from the Tribe or Tribes (or other documentation of Consent consistent with the laws, procedures or practices of a Tribe or Tribes) that the applicant is proposing to serve.
• The application is from or benefiting a Rural Partner's Networks (RPN) community network. Currently, RPN networks exist in Alaska, Arizona, Georgia, Kentucky, Mississippi, Nevada, New Mexico, North Carolina, Puerto Rico, West Virginia, and Wisconsin. Use the Community Look-up map (available at
(c) Reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities. Using the Disadvantaged Community and Energy Community Look-Up Map (available at
• If the project is located in or serves a Disadvantaged Community as defined by the Climate and Economic Justice Screening Tool (CEJST), from the White House Council on Environmental Quality;
• If the project is located in or serves an Energy Community as defined by the Inflation Reduction Act (IRA); and
• If applicants can demonstrate through a written narrative how the proposed climate-impact projects will improve the livelihoods of community residents and meet pollution mitigation or clean energy goals, including benefits calculated using the social cost of carbon estimates developed by the Environmental Protection Agency.
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The Agency reserves the right to offer the applicant less than the funding requested.
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The provisions of 7 CFR 5001.502 Oversight and Monitoring and the provisions of 7 CFR 5001.504 Financial Reports will apply to guarantees provided under this notice.
For general questions about this announcement, please contact Shaun Stehr at
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(a) Faith-based organizations may apply for this award on the same basis as any other organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb
(b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law. Religious accommodations may also be sought under many of these religious freedom and conscience protection laws.
(c) A faith-based organization may not use direct Federal financial assistance from USDA to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. An organization receiving Federal financial assistance also may not, in providing services funded by USDA, or in their outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.
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Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (
To file a program discrimination complaint, a complainant should complete a Form AD-3027,
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USDA is an equal opportunity provider, employer, and lender.
U.S. Census Bureau, Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act (PRA) of 1995, invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment on the proposed extension of the Current Population Survey, School Enrollment Supplement, prior to the submission of the information collection request (ICR) to OMB for approval.
To ensure consideration, comments regarding this proposed information collection must be received on or before February 24, 2025.
Interested persons are invited to submit written comments by email to the Current Population Surveys Branch email address at
Requests for additional information or specific questions related to collection activities should be directed to Kyra Linse, Survey Director, Current Population Surveys via the internet at
The Census Bureau plans to request clearance from the Office of Management and Budget (OMB) for the collection of data concerning the School Enrollment Supplement to be conducted in conjunction with the October Current Population Survey (CPS). The Census Bureau and the Bureau of Labor Statistics (BLS) sponsor the basic annual school enrollment questions, which have been collected annually in the CPS for over 50 years. The current clearance
This survey provides information on public/private elementary school, secondary school, and college enrollment, and on characteristics of private school students and their families, which is used for tracking historical trends, policy planning, and support.
This survey is the only source of national data on the age distribution and family characteristics of college students and the only source of demographic data on preprimary school enrollment. As part of the federal government's efforts to collect data and provide timely information to local governments for policymaking decisions, the survey provides national trends in enrollment and progress in school.
The School Enrollment Supplement information will be collected by both personal visit and telephone interviews in conjunction with the regular October CPS interviewing. All interviews are conducted using computer-assisted interviewing.
We are soliciting public comments to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include, or summarize, each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
On August 20, 2024, Toyota Material Handling, Inc. submitted a notification of proposed production activity to the FTZ Board for its facility within FTZ 72, in Columbus, Indiana.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is amending the final results of the administrative review of the antidumping duty (AD) order on certain activated carbon (activated carbon) from the People's Republic of China (China) to correct ministerial errors. Based on the amended final results, we find that the companies under review sold activated carbon in the United States at less than normal value during the period of review (POR), April 1, 2022, through March 31, 2023.
Applicable December 26, 2024.
Andrew Hart or Katherine Smith, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1058 or (202) 482-0557, respectively.
On November 25, 2024, Commerce published in the
Section 751(h) of the Tariff Act of 1930, as amended (the Act), defines a “ministerial error” as including “errors in addition, subtraction, or other arithmetic function, clerical errors resulting from inaccurate copying, duplication, or the like, and any other unintentional error which the administering authority considers ministerial.”
Commerce reviewed the record, and we agree that the errors alleged by the mandatory respondents constitute ministerial errors within the meaning of section 751(h) of the Act and 19 CFR 351.224(f).
For a complete discussion of the ministerial error allegation, as well as Commerce's analysis,
As a result of correcting these ministerial errors described above, Commerce determines that the following estimated weighted-average dumping margins exist for the period April 1, 2022, through March 31, 2023:
Commerce intends to disclose the calculations performed in connection with these amended final results of review to interested parties within five days after public announcement of the
Pursuant to section 751(a)(2)(A) of the Act, and 19 CFR 351.212(b)(1), Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the amended final results of this review.
For the GHC and Jilin Bright, Commerce will calculate importer-specific assessment rates for antidumping duties, in accordance with 19 CFR 351.212(b)(1). For entries that were not reported in the U.S. sales database submitted by the exporter individually examined during this review, Commerce will instruct CBP to liquidate such entries at the China-wide rate.
For the six companies identified in the appendix to this notice as part of the China-wide entity, we will instruct CBP to apply the China-wide per-unit assessment rate to all entries of subject merchandise made during the POR which were exported by those companies.
Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of the final results of this review in the
Upon publication of this notice in the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice serves as the final reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing these amended final results of review in accordance with sections 751(h) and 777(i) of the Act and 19 CFR 351.224(e).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is amending the final results of the administrative review of the countervailing duty order on phosphate fertilizers (fertilizers) from the Kingdom of Morocco (Morocco) to correct a ministerial error. The period of review (POR) is January 1, 2022, through December 31, 2022.
Applicable December 26, 2024.
Faris Montgomery or Jaron Moore, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401
In accordance with section 751(a)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.221(b)(5), on November 7, 2024, Commerce disclosed its calculations to interested parties and provided interested parties with the opportunity to submit ministerial error comments.
Section 751(h) of the Act, defines a “ministerial error” as including “errors in addition, subtraction, or other arithmetic function, clerical errors resulting from inaccurate copying, duplication, or the like, and any other unintentional error which the administering authority considers ministerial.” With respect to final results of administrative reviews, 19 CFR 351.224(e) provides that Commerce “will analyze any comments received and, if appropriate, correct any ministerial error by amending . . . the final results of review . . .”
Commerce has determined that one of the two errors alleged by OCP constitutes a ministerial error within the meaning of section 751(h) of the Act and 19 CFR 351.224(f). In its ministerial error allegations, OCP alleges that, with regard to the provision of phosphate mining rights for less than adequate remuneration (LTAR) program, Commerce: (1) did not include OCP's allocated debt costs in OCP's total cost of production when calculating OCP's profit for phosphate rock; and (2) should have calculated a simple average of two datasets provided by different parties for a third-market country from the same business proprietary data source, as Commerce did with two datasets provided from the same business proprietary data source for another third-market country.
For the calculation of the simple average of two datasets, we disagree with OCP and find that not averaging the datasets was a methodological decision and not a ministerial error. However, Commerce agrees that, in the
For a complete discussion of the ministerial error allegations, as well as Commerce's analysis,
As a result of correcting the ministerial error, we determine that the countervailable subsidy rate for the producer/exporter under review to be as follows:
We intend to disclose to parties in this proceeding, under administrative protective order, the calculations performed for these amended final results within five days after publication of this notice in the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b)(2), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, countervailing duties on all appropriate entries of subject merchandise in accordance with the amended final results of this review, for the above-listed company at the applicable
In accordance with section 751(a)(1) of the Act, Commerce intends to instruct CBP to collect cash deposits of estimated countervailing duties in the amount shown for OCP on shipments of the subject merchandise entered, or withdrawn from warehouse for consumption, on or after the date of publication of the amended final results of this administrative review. The cash deposit requirement, effective upon the publication of the amended final results of this review, shall remain in effect until further notice.
This notice also serves as a final reminder to parties subject to an APO of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(h) and 777(i)(1) of the Act, and 19 CFR 351.224(e).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) finds that revocation of the countervailing duty (CVD) order on circular welded carbon quality steel line pipe (welded line pipe) from the People's Republic of China (China) would be likely to lead to continuation or recurrence of countervailable subsidies at the levels indicated in the “Final Results of the Sunset Review” section of this notice.
Applicable December 26, 2024.
T.J. Worthington, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4567.
On January 23, 2009, Commerce published the
On October 3, 2024, Commerce received an adequate substantive response from the domestic interested party within the 30-day deadline specified in 19 CFR 351.218(d)(3)(i).
The merchandise covered by this
A complete discussion of all issues raised in this sunset review, including the likelihood of continuation or recurrence of subsidization and the countervailable subsidy rates likely to prevail if the
Pursuant to sections 751(c) and 752(b) of the Act, we determine that revocation of the
This notice serves as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the
Commerce is issuing and publishing these final results and this notice in accordance with sections 751(c), 752(b), and 777(i)(1) of the Act, and 19 CFR 351.218.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Based on affirmative final determinations by the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC), Commerce is issuing an antidumping duty (AD) order on frozen warmwater shrimp (shrimp) from Indonesia and countervailing duty (CVD) orders on shrimp from Ecuador, India, and the Socialist Republic of Vietnam (Vietnam).
Applicable December 26, 2024.
Benjamin Nathan (CVD India) at (202) 482-3834; Reginald Anadio or Zachary Shaykin (CVD Ecuador) at (202) 482-3166 or (202) 482-5377, respectively; Rachel Jennings or Miranda Bourdeau (AD Indonesia) at (202) 482-1110 or (202) 482-2021, respectively; and Adam Simons (CVD Vietnam) at (202) 482-6172; AD/CVD Operations, Offices II, IV, V, and IX, respectively, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.
In accordance with sections 705(d), 735(d), and 777(i) of the Tariff Act of 1930, as amended (the Act), on October 28, 2024, Commerce published its affirmative final determination of sales at less than fair value (LTFV) of shrimp from Indonesia,
On December 12, 2024, pursuant to sections 705(d) and 735(d) of the Act, the ITC notified Commerce of its final affirmative determinations that an industry in the United States is materially injured by reason of dumped imports of shrimp from Indonesia, and subsidized imports of shrimp from Ecuador, India, and Vietnam, within the meaning of sections 705(b)(1)(A)(i) and 735(b)(1)(A)(i) of the Act.
The merchandise covered by these orders is frozen warmwater shrimp from Ecuador, India, Indonesia, and Vietnam. For a complete description of the scope of the orders,
On December 12, 2024, in accordance with section 735(d) of the Act, the ITC notified Commerce of its final determinations that an industry in the United States is materially injured within the meaning of section 735(b)(1)(A)(i) of the Act by reason of imports of shrimp from Indonesia that are sold in the United States at LTFV.
Therefore, in accordance with section 736(a)(1) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to assess, upon further instruction by Commerce, antidumping duty deposits equal to the amount by which the normal value of the merchandise exceeds the export price (or constructed export price) of the merchandise on all relevant entries of shrimp from Indonesia. Antidumping duties will be assessed on unliquidated entries of shrimp entered, or withdrawn from warehouse, for consumption on or after May 30, 2024, the date of publication of the
Except as noted in the “Provisional Measures—AD” section of this notice, Commerce intends to instruct CBP to continue to suspend liquidation on all relevant entries of shrimp from Indonesia, in accordance with section 736 of the Act. Because the estimated weighted-average dumping margin calculated for PT Bahari Makmur Sejati (BMS) in the
Commerce also intends to instruct CBP to require cash deposits equal to the estimated weighted-average dumping margins indicated in the tables below. Accordingly, effective on the date of publication in the
The estimated weighted-average dumping margins are as follows:
Section 733(d) of the Act states that suspension of liquidation pursuant to an affirmative preliminary determination may not remain in effect for more than four months, except where exporters representing a significant proportion of exports of the subject merchandise request that Commerce extend the four-month period to no more than six months. At the request of exporters that accounted for a significant proportion of exports of shrimp from Indonesia, Commerce extended the four-month period to no more than six months.
As stated above, based on the above-referenced affirmative final determination by the ITC that an industry in the United States is materially injured within the meaning of section 705(b)(1)(A)(i) of the Act by reason of subsidized imports of shrimp from Ecuador, India, and Vietnam,
Therefore, in accordance with section 706(a) of the Act, Commerce intends to direct CBP to assess, upon further instructions by Commerce, countervailing duties on all relevant entries of shrimp from Ecuador, India, and Vietnam, which are entered, or withdrawn from warehouse, for consumption on or after April 1, 2024, the date of publication of the
In accordance with section 706 of the Act, Commerce intends to instruct CBP to reinstitute the suspension of liquidation of shrimp from Ecuador, India, and Vietnam, effective on the date of publication of the ITC's final affirmative injury determination in the
The estimated countervailing duty subsidy rates are as follows:
Section 703(d) of the Act states that the suspension of liquidation pursuant to an affirmative preliminary determination may not remain in effect for more than four months. Commerce published the
Therefore, in accordance with section 703(d) of the Act, we instructed CBP to terminate the suspension of liquidation and to liquidate, without regard to countervailing duties, unliquidated entries of shrimp from Ecuador, India, and Vietnam or withdrawn from warehouse, for consumption, on or after July 30, 2024, the date on which the provisional measures expired, until and through the day preceding the date of publication of the ITC's final injury determination in the
On September 20, 2021, Commerce published the
In accordance with the
Interested parties who wish to be added to the annual inquiry service list for an order must submit an entry of appearance to the annual inquiry service list segment for the order in ACCESS within 30 days after the date of publication of the order. For ease of administration, Commerce requests that law firms with more than one attorney representing interested parties in an order designate a lead attorney to be included on the annual inquiry service list. Commerce will finalize the annual inquiry service list within five business days thereafter. As mentioned in the
Commerce may update an annual inquiry service list at any time as needed based on interested parties' amendments to their entries of appearance to remove or otherwise modify their list of members and representatives, or to update contact information. Any changes or announcements pertaining to these procedures will be posted to the ACCESS website at
In the
This notice constitutes the AD order with respect to shrimp from Indonesia and the CVD orders with respect to shrimp from Ecuador, India, and Vietnam, pursuant to sections 706(a) and 736(a) of the Act. Interested parties can find a list of AD and CVD orders currently in effect at
These orders are issued and published in accordance with sections 706(a) and 736(a) of the Act and 19 CFR 351.211(b).
The scope of these orders includes certain frozen warmwater shrimp and prawns whether wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off, deveined or not deveined, cooked or raw, or otherwise processed in frozen form. “Tails” in this context means the tail fan, which includes the telson and the uropods.
The frozen warmwater shrimp and prawn products included in the scope, regardless of definitions in the Harmonized Tariff Schedule of the United States (HTSUS), are products which are processed from warmwater shrimp and prawns through freezing and which are sold in any count size.
The products described above may be processed from any species of warmwater shrimp and prawns. Warmwater shrimp and prawns are generally classified in, but are not limited to, the
Frozen shrimp and prawns that are packed with marinade, spices or sauce are included in the scope. In addition, food preparations, which are not “prepared meals,” that contain more than 20 percent by weight of shrimp or prawn are also included in the scope.
Excluded from the scope are: (1) breaded shrimp and prawns (HTSUS subheading 1605.21.1020); (2) shrimp and prawns generally classified in the
The products covered by the scope are currently classified under the following HTSUS subheadings: 0306.17.0004, 0306.17.0005, 0306.17.0007, 0306.17.0008, 0306.17.0010, 0306.17.0011, 0306.17.0013, 0306.17.0014, 0306.17.0016, 0306.17.0017, 0306.17.0019, 0306.17.0020, 0306.17.0022, 0306.17.0023, 0306.17.0025, 0306.17.0026, 0306.17.0028, 0306.17.0029, 0306.17.0041, 0306.17.0042, 1605.21.1030, and 1605.29.1010. These HTSUS subheadings are provided for convenience and for customs purposes only and are not dispositive, but rather the written description of the scope is dispositive.
Minority Business Development Agency, Department of Commerce.
Request for comments.
The Minority Business Development Agency (MBDA) is accepting written comments from the public regarding the MBDA Information Clearinghouse, through February 28, 2025. The comments will inform MBDA of the types of data and other information sought, best practices or recommendations for studies, analysis and data about Minority Business Enterprises (MBEs) to be published, and ways to improve the user experience.
Please submit all comments in response to the questions presented in this notice at
Mr. Efrain Gonzalez, Jr., Associate Director, Office of Data, Research and Evaluation, Minority Business Development Agency, at (202) 482-1079; or by email at
The Minority Business Development Act of 2021, 15 U.S.C. 9513, mandates MBDA to develop and implement an Information Clearinghouse that will collect and disseminate demographic, economic, financial, managerial, and technical data relating to MBEs. In conjunction with this Request for Public Comment, MBDA will launch the Information Clearinghouse and allow the public an opportunity to review, and comment based on the initial deployment. The Information Clearinghouse is being released as a beta version hosting data, research, and reports about MBEs, with on-going improvements to its technical functionality and content planned
The purpose of this request for comment is to inform MBDA on user preferences related to the content type, maintenance, collection and dissemination to relevant parties (including business owners and researchers).
Members of the general public are invited to submit responses to the following:
(1) The types of data and information MBDA should have available in the Information Clearinghouse (
(2) Provide examples of how the data and information could be used.
(3) Provide preferences for how data and information is made available, including but not limited to preferences on file formats, 3rd party access & software integration, visualization of data sets, and language.
(4) Provide best practices and/or recommendations, which may include examples, of evidentiary-based studies, analysis and data related to Minority Business Enterprises (MBEs) for publication through the Information Clearinghouse.
(5) Provide feedback on overall use of the system including challenges in finding specific data and/or information.
All comments must be submitted in written form at
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
NMFS will convene a workshop on walleye pollock in Alaska for the purposes of synthesizing ongoing research, building and strengthening collaborations, and highlighting topics which need more attention. The focus will be on biological and ecological scientific research.
The workshop is open to the public from January 14, 2025-Jan 16, 2025 from 9 a.m. to 5 p.m. Pacific standard time. Please see
The meeting will be a hybrid format with the in-person component in Room 2076, Building 4, Alaska Fisheries Science Center, Western Regional Center, Seattle, WA. The virtual component will be held on Google Meet at:
Or dial: (US) +1 636-649-4229 PIN: 118 376 198;
For further information, please visit
The agenda is subject to change; all times are in Pacific Standard Time (PST), and are approximate and may be changed at the discretion of the coordinators. Presentations are grouped by themes, and can focus on different large marine ecosystems (LME) in Alaska, including the Gulf of Alaska (GOA), Bering Sea and Aleutian Islands (BSAI), the Northern Bering Sea (NBS), and the Eastern Bering Sea (EBS).
The meeting is open to the public; however, during the `Report Writing' session on Thursday, January 16th, the public should not engage in discussion.
This meeting is physically accessible to people with disabilities. Special requests should be directed to Cole Monnahan, via email (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Gulf of Mexico Fishery Management Council will hold a half-day virtual meeting of its Law Enforcement Technical Committee (LETC).
The meeting will convene on Thursday, January 16, 2025, beginning at 9 a.m. and ending at 1 p.m., EST.
The meeting will be held virtually, via webinar only. Please visit the Gulf Council website (
Dr. Max Birdsong, Social Scientist, Gulf of Mexico Fishery Management Council;
The following items of discussion are on the agenda, though agenda items may be addressed out of order and any changes will be noted on the Council's website when possible.
The LETC will begin with introductions and adoption of agenda, approval of minutes from the October 2023 LETC meeting from and election of Committee Chair and Vice Chair.
The Gulf Council LETC will hold a review and discuss the Federal Charter Vessel ID Marking Requirements and 20-Fathom Recreational Seasonal Closure for
The Agenda is subject to change, and the latest version along with other meeting materials will be posted on
The Law Enforcement Technical Committee consists of principal law enforcement officers in each of the Gulf States, as well as the NOAA Office of Law Enforcement, U.S. Fish and Wildlife Service, the U.S. Coast Guard, and the NOAA Office of General Counsel for Law Enforcement.
Although other non-emergency issues not on the agenda may come before this group for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act, those issues may not be the subject of formal action during this meeting. Actions will be restricted to those issues specifically identified in the agenda and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take action to address the emergency.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Scallop Advisory Panel via webinar to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Tuesday, January 14, 2025 at 9 a.m.
Webinar registration URL information:
Cate O'Keefe, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Scallop Advisory Panel will meet to Review 2025 Scallop Work Priorities, including a work plan for this calendar year. The discussion will focus on the development of a Long-Term Strategic Plan. Other business will be discussed, if necessary.
Although non-emergency issues not contained on the agenda may come before this Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Cate O'Keefe, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; response to comments.
As required by the Marine Mammal Protection Act (MMPA), NMFS has considered public comments for revisions of the 2023 marine mammal stock assessment reports (SARs). This notice announces the availability of 66 final 2023 SARs that were updated and finalized.
The 2023 final SARs are available in electronic form via the internet at
Zachary Schakner, Office of Science and Technology, 301-427-8106,
Section 117 of the MMPA (16 U.S.C. 1361
The MMPA requires NMFS and USFWS to review the SARs at least annually for strategic stocks and stocks for which significant new information is available and at least once every three years for non-strategic stocks. The term “strategic stock” means a marine mammal stock: (A) for which the level of direct human-caused mortality exceeds the potential biological removal level or PBR (defined by the MMPA as the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population); (B) which, based on the best available scientific information, is declining and is likely to be listed as a threatened species under the Endangered Species Act (ESA) within the foreseeable future; or (C) which is listed as a threatened species or endangered species under the ESA or is designated as depleted under the MMPA. NMFS and USFWS are required to revise a SAR if they determine the review indicates that the status of the
In order to ensure that marine mammal SARs constitute the best scientific information available, the updated SARs under NMFS' jurisdiction are peer-reviewed within NMFS Science Centers and by members of three regional independent scientific review groups established under the MMPA to independently advise NMFS and the USFWS on marine mammals. As a result of the time involved in the assessment of new scientific information, revision, and peer-review of the SARs, the period covered by the 2023 final SARs is generally 2017 through 2021.
NMFS reviewed the status of all marine mammal strategic stocks and considered whether significant new information was available for all other stocks under NMFS' jurisdiction. As a result of this review, NMFS revised or developed new reports for 66 stocks in the Alaska, Atlantic, and Pacific regions to incorporate new information. The 2023 revisions to the SARs consist primarily of updated or revised human-caused M/SI estimates and updated abundance estimates. This publication also finalizes (1) a new SAR for a newly described species, Sato's beaked whale (2) revisions to the stock structure of West Coast harbor porpoise that splits the Northern California-Southern Oregon stock into two stocks (the Northern California-Southern Oregon stock and the Central Oregon stock) and (3) name changes for all stocks with '4-Islands' in the name to 'Maui Nui' to align with the original Hawaiian names of various islands and places where the stocks reside.
The 2023 revisions to the abundance and trend sections of the main Hawaiian Islands insular false killer whale section of the false killer whale SAR are not being finalized at this time because of a delay in the publication of updated abundance estimates. The mortality and serious injury information has been updated together with the other false killer whale stocks represented in this SAR. The abundance and trend sections for main Hawaiian Islands insular false killer whales will be revised in a subsequent SAR cycle. The draft 2023 SAR for the Washington Inland Waters harbor seal stocks is not being finalized at this time given that the draft Pearson
NMFS received comments on the draft 2023 SARs from the Marine Mammal Commission (Commission); the Department of Fisheries and Oceans Canada (DFO); two fishing industry associations (Hawaii Longline Association (HLA) and Maine Lobstermen's Association (MLA)); an environmental non-governmental organization (Center for Biological Diversity); two Alaska Natives Organizations (Chugach Regional Resources Commission and the Aleut Community of St. Paul Island); and the Western Pacific Regional Fishery Management Council (Council). Our responses to substantive comments are below. We have not responded to comments that failed to raise a significant point for us to consider (
In response to a comment from MLA that noted NMFS relied on an incorrect population size estimate for the NARW SAR, we have further revised the NARW SAR to include the latest and best available estimate on NARW abundance, which also now incorporates an improvement to the underlying model to allow for the potential of recruitment based on observed calves (Linden 2024a,b). However, we note that the issue of having multiple abundance estimates for the NARW population using the same general model is not new. It is an outcome of the timing of the SAR cycle and when the data are available to perform an updated model run.
Since 2017, NMFS has produced annual NARW population size estimates in collaboration with the New England Aquarium, which are released at the North Atlantic Right Whale Consortium's annual meeting, typically in October each year. In 2023, NMFS began publishing these estimates in stand-alone peer-reviewed Technical Memorandum to provide full and transparent documentation of the estimation process and results (
To address this timing issue for the final 2023 SAR and minimize similar timing issues going forward, NMFS is modifying certain procedural steps in developing the NARW SAR. Specifically, the final 2023 NARW SAR has been updated to include the latest abundance estimate published in Linden (2024b) in October 2024, along with the most recent human-caused mortality and serious injury data based on Henry
A key aspect of the NARW stock assessment process that allows for NMFS to incorporate the best available science into the final SAR is that unless the model used to estimate population abundance is significantly modified, additional runs of the model to produce newer estimates only necessitate a Level 1 review per NMFS'
For the 2023 NARW SAR, the population abundance model was indeed substantively modified to improve the estimates by allowing the model to accommodate for potential recruitment into the population based on observed calves (Linden 2024a). Following this, the improved model was then used to produce an updated annual abundance estimate of the population (Linden 2024b). In accordance with the GAMMS Level 2 peer review guidance, NMFS requested a review of the model improvements (Linden 2024a) by the Atlantic SRG in October 2024 and received positive feedback, noting that the improved model provides the best available estimate of NARW abundance. Following this, NMFS also sought a review of its application of the improved model to produce an updated NARW abundance estimate from the Atlantic SRG. While the Atlantic SRG chair indicated SRG review was unnecessary given that the new information met the GAMMS Level 1 peer review guidance, the chair nonetheless provided a positive review of the new abundance estimate (Linden 2024b). For the updated information on human-caused M/SI that became available after publication of the draft 2023 NARW SAR (Henry
In summary, given MLA's comment and the best scientific information that has become available and peer reviewed since publication of the draft 2023 NARW SAR, the final 2023 NARW SAR has been updated to include the most recent and best available scientific information on NARW population abundance and human-caused mortality and serious injury of the stock.
The Aleut Community of St. Paul Island also commented that the updated SAR must include an estimate of mortality due to prey competition from commercial fishing, claiming that such mortality is human caused and is incidental to human activities. They cited Short
Regarding the model assuming an equal sex ratio and probability of mortality, in response to MLA's comment on this issue for the 2022 SARs, we revised the NARW SAR to clarify that “[t]he model does not assume an equal sex ratio and allows survival and capture rates to differ between the sexes.” However, MLA comments that this issue remains and cites Pace (2021), which states, “We estimated the relative effective detection effort as the mean adult female capture probability for the era.” To clarify, the MLA incorrectly attributes a quote from Pace
However, it is important to note that for NARWs, small changes in population size have minimal effect on their PBR level and, thus, management targets. The PBR level for NARWs has been 0.7 since the final 2021 NARW SAR was published and less than 1 since 1995 when the first NARW SAR was published following the 1994 amendments to the MMPA. PBR in the final 2023 SAR for NARWs is 0.73. While we have revised the SAR to include the most recent available estimate on the population's size, it does not significantly impact other metrics in the SAR. Until such time that the minimum population size is greater than 500 NARWs, the PBR level benchmark for the stock will remain below 1 individual whale. Moreover, regardless of the stock's PBR level, NARWs will remain a strategic and depleted stock under the MMPA as long as the species is listed under the ESA.
With respect to the removal of some discussion on vessel strike management measures, NMFS is striking this text because it believes it is overly detailed and already covered in general in the SAR and in more detail in the cited studies. The text simply elaborated on the specifics of the studies except in the case of Hayes
The methodology and resulting Hawai'i Pelagic stock assessment area was reviewed by the Pacific Scientific Review Group (PSRG) during their 2023 annual meeting and was modified based on their recommendations. At the time the area was established, there were no data available on the presence of false killer whales from the Hawai'i pelagic stock outside this area. NMFS did not receive any comments on alternative biologically data-driven approaches to define the assessment area, and as such, we are retaining the area as presently defined following the recommendations of the PSRG. As noted in the comment from HLA, a Hawai'i pelagic false killer whale tagged near the main Hawaiian Islands made a brief excursion a short distance outside of the current assessment area following PSRG review and the publication of the draft SAR. We have added clarifying language to the SAR to explicitly note that the assessment area does not represent the full stock range and therefore, N
Bradford, A.L., E.M. Oleson, R.W. Baird, C.H. Boggs, K.A. Forney, and N.C. Young. 2015. Revised stock boundaries for false killer whales (
Bradford, A.L., E.A. Becker, E.M. Oleson, K.A. Forney, J.E. Moore, and J. Barlow. 2020. Abundance estimates of false killer whales in Hawai'ian waters and the broader central Pacific. NOAA Tech Memo NMFS-PIFSC-104. 78pp.
Divine, L., M.J. Peterson Williams, J. Davies, M. LeVin, and B. Robson. 2022. A synthesis of Laaqudax (northern fur seal) community surveys and commercial fishery data in the Pribilof Islands Marine Ecosystem, Alaska. J. Mar. Sci. and Eng. 10(4): 467.
Hayes, S.A., S. Gardner, L. Garrison, A. Henry and L. Leandro. 2018. North Atlantic Right Whales—Evaluating their recovery challenges in 2018. NOAA Tech Memo NMFS-NE 247. 24p.
Henry, A., M. Garron, D. Morin, A. Smith, A. Reid, W. Ledwell, T. Cole. 2024. Serious injury and mortality determinations for baleen whale stocks along the Gulf of Mexico, United States East Coast, and Atlantic Canadian Provinces, 2018-2022. NOAA CRD 24-10. 60pp.
Keating, J. M., C. Woodard, M. Brown, and D. Koster. 2023. Marine mammal harvest in the Chugach Region, Alaska. Alaska Department of Fish and Game Special Publication No. 2023-01, Anchorage. Kelley, D.E., J.P. Vlasic and SW Brillant. 2020. Assessing the lethality of ship strikes on whales using simple biophysical models. Mar. Mam. Sci. 37: 251-267.
Lettrich, M.D., M.J. Asaro, D.L. Borggaard, D.M. Dick, R.B. Griffis, J.A. Litz, C.D. Orphanides, D.L. Palka, M.S. Soldevilla, B. Balmer, S. Chavez, D. Cholewiak, D. Claridge, R.Y. Ewing, K.L. Fazioli, D. Fertl, E.M. Fougeres, D. Gannon, L. Garrison, J. Gilbert, A. Gorgone, A. Hohn, S. Horstman, B. Josephson, R.D. Kenney, J.J. Kiszka, K. Maze-Foley, W. McFee, K.D. Mullin, K. Murray, D.E. Pendleton, J. Robbins, J.J. Roberts, G. Rodriguez-Ferrer, E. Ronje, P.E. Rosel, T. Speakman, J.E. Stanistreet, T. Stevens, M. Stolen, R. Tyson Moore, N.L. Vollmer, R. Wells, H.R. Whitehead and A. Whitt. 2023. Vulnerability to climate change of United States marine mammal stocks in the western North Atlantic, Gulf of Mexico, and Caribbean. PLoS ONE 18(9): e0290643.
Linden, D.W. 2024a. Using known births to account for delayed marking in population estimation of North Atlantic right whales. bioRxiv.
Linden, D.W. 2024b. Population size estimation of North Atlantic right whales from 1990-2023. NOAA Tech Memo NMFS-NE 324. 20pp.
McHuron, E.A., J.T. Sterling, D.P. Costa, and M.E. Geobel. 2019. Factors affecting energy expenditure in a declining fur seal population. Conserv. Physiol. 7(1): coz103.
McHuron, E.A., K. Luxa, N.A. Pelland, K. Holsman, R. Ream, T. Zeppelin, and J.T. Sterling. 2020. Practical application of a bioenergetic model to inform management of a declining fur seal population and their commercially important prey. Front. Mar. Sci. 7.
Meyer-Gutbrod, E.L., and C.H. Greene. 2014. Climate-associated regime shifts drive decadal scale variability in recovery of North Atlantic right whale population. Oceanography 27(3):148-153.
Meyer-Gutbrod, E.L., C.H. Greene, K.T.A. Davies and D.G. Johns. 2021. Ocean Regime Shift is Driving Collapse of the North Atlantic Right Whale Population. Oceanography. 34. 22-31.
Meyer‐Gutbrod, E.L., Davies, K.T., Johnson, C.L., Plourde, S., Sorochan, K.A., Kenney, R.D., Ramp, C., Gosselin, J.F., Lawson, J.W. and Greene, C.H., 2023. Redefining North Atlantic right whale habitat‐use patterns under climate change. Limnology and Oceanography, 68, pp.S71-S86.
NMFS. 2023. Guidelines for Preparing Stock Assessment Reports Pursuant to the Marine Mammal Protection Act. Protected Resources Policy Directive 02-204-01.
Pettis, H.M., R.M. Pace and P.K. Hamilton P.K. 2022. North Atlantic Right Whale Consortium: 2021 annual report card. Report to the North Atlantic Right Whale Consortium.
Record, N.R., J.A. Runge, D.E. Pendleton, W.M. Balch, K.T.A. Davies, A.J. Pershing, C.L. Johnson, K. Stamieszkin, R. Ji, Z. Feng, S.D. Kraus, R.D. Kenney, C.A. Hudak, C.A. Mayo, C. Chen, J.E. Salisbury and C.R.S. Thompson. 2019. Rapid climate-driven circulation changes threaten conservation of endangered North Atlantic right whales. Oceanography. 32(2):162-169.
Rehberg, M. 2023. Status of marine mammals for Chugach Regional Resources Commission—Final Report. Alaska Department of Fish and Game, 13 p.
Rolland, R.M., R.S. Schick, H.M. Pettis, A.R. Knowlton, P.K. Hamilton, J.S. Clark and S.D. Krauss. 2016. Health of North Atlantic right whales Eubalaena glacialis over three decades: From individual health to demographic and population health trends. Mar. Ecol. Prog. Series. 542:265-282.
Ross, C.H., Runge, J.A., Roberts, J.J., Brady, DC, Tupper, B. and Record, N.R., 2023. Estimating North Atlantic right whale prey based on Calanus finmarchicus thresholds. Marine Ecology Progress Series, 703, pp.1-16.
Short, J.W., H.J. Geiger, L.W. Fritz, and J.J. Warrenchuk. 2021. First-year survival of northern fur seals (
Stewart, J.D., J.W. Durban, A.R. Knowlton, M.S. Lynn, H. Fearnbach, J. Barbaro, W.L. Perryman, C.A. Miller, and M.J. Moore. 2021. Decreasing body lengths in North Atlantic right whales. Current Biology 31:3174-3179.
Stewart, J.D., J.W. Durban, H. Europe, H. Fernbach, P.K. Hamilton, A.R. Knowlton, M.S. Lynn, C.A. Miller, W.L. Perryman, B.W.H. Tao, and M.J. Moore. 2022. Larger females have more calves: influence of maternal body length on fecundity in North Atlantic right whales. Mar. Ecol. Prog. Ser. 689:179-189.
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National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice.
This action serves as a notice that NMFS, on behalf of the Secretary of Commerce (Secretary), has found that Puerto Rico Caribbean spiny lobster and Mid-Atlantic Coast golden tilefish are now subject to overfishing, Klamath River fall Chinook salmon and Queets Spring/Summer Chinook salmon continue to be overfished, and the Western and Central North Pacific Ocean Striped Marlin continues to be subject to overfishing. NMFS, on behalf of the Secretary, is required to provide this notice whenever it determines that a stock or stock complex is subject to overfishing, overfished, or approaching an overfished condition.
Diana Perry, (301) 427-7863.
Pursuant to section 304(e)(2) of the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1854(e)(2), NMFS, on behalf of the Secretary, must notify councils, and publish a notice in the
NMFS has determined that Puerto Rico Caribbean spiny lobster is now subject to overfishing. This determination is based on the most recent assessment completed in 2022 and using data through 2021 that found that the fishing mortality rate (F) exceeds the maximum fishing mortality threshold (MFMT). NMFS has notified the Caribbean Fishery Management Council of its requirement to end overfishing on this stock.
NMFS has determined that Mid-Atlantic Coast golden tilefish is now subject to overfishing. This determination is based on the most recent assessment completed in 2024 using data through 2023, which found that the F exceeds the MFMT. NMFS has notified the Mid-Atlantic Fishery Management Council of its requirement to end overfishing.
NMFS has determined that Klamath River fall-run Chinook salmon and Queets Spring/Summer Chinook salmon continue to be overfished. These determinations are based on the 3-year geometric mean of the annual spawning escapement for each stock completed in 2024, and using data from 2021-2023 for the Klamath River fall-run Chinook salmon stock and data from 2020-2022 for the Queets spring/summer Chinook salmon stock which fall below their respective minimum stock size threshold. NMFS continues to work with the Pacific Fishery Management Council to rebuild the Klamath River fall-run Chinook and Queets spring/summer Chinook salmon stocks.
NMFS has determined that Western and Central North Pacific Ocean Striped Marlin continues to be subject to overfishing. This determination is based on the most recent international stock assessment, completed in 2023 and using data through 2020, which indicates that F exceeds the MFMT. NMFS continues to work with the Western and Central Pacific Fisheries Commission to end overfishing.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notification of standard ex-vessel prices.
NMFS publishes standard ex-vessel prices for groundfish and halibut for the calculation of the observer fee under the North Pacific Observer Program (Observer Program). This notice is intended to provide information to vessel owners, processors, registered buyers, and other Observer Program participants about the standard ex-vessel prices that will be used to calculate the Observer Program fee associated with landings of groundfish and halibut made in 2025. NMFS will send invoices to processors and registered buyers subject to the fee by January 15, 2026. Fees are due to NMFS on or before February 15, 2026.
The standard prices take effect on January 1, 2025.
Additional information about the Observer Program is available on NMFS Alaska Region's website at
For general questions about the observer fee and standard ex-vessel prices, contact Amy Hadfield at (907) 586-7376. For questions about the fee billing process, contact Charmaine Weeks at (907) 586-7231.
Regulations at 50 CFR part 679, subpart E, governing the Observer Program, require the deployment of NMFS-certified observers (observers) and electronic monitoring (EM) systems to collect information necessary for the conservation and management of the Bering Sea and Aleutian Islands (BSAI) and Gulf of Alaska (GOA) groundfish and halibut fisheries. Fishery managers use information collected by observers and EM to monitor quotas, manage groundfish and prohibited species catch, and document and reduce fishery interactions with protected resources. Scientists use observer-collected information for stock assessments and marine ecosystem research.
The Observer Program includes two observer coverage categories: the partial coverage category and the full coverage category. All groundfish and halibut vessels and processors subject to observer coverage are included in one of these two categories. Defined at § 679.51, the partial coverage category includes vessels and processors that are not required to have an observer or EM at all times when fishing, and the full coverage category includes vessels and processors required to have all of their fishing and processing activity observed. Vessels and processors in the full coverage category arrange and pay for observer services from a permitted observer provider. Observer coverage and EM for the partial coverage category is funded through a system of fees based on the ex-vessel value of groundfish and halibut. Throughout this notice, the term “processor” refers to shoreside processors, stationary floating processors, and catcher/processors in the partial coverage category.
Pursuant to section 313 of the Magnuson-Stevens Fishery Conservation and Management Act, NMFS is authorized to assess a fee on all landings accruing against a Federal total allowable catch (TAC) for groundfish or commercial halibut quota landings made by vessels that are subject to Federal regulations and not included in the full coverage category. A fee is only assessed on landings of groundfish from vessels designated on a Federal Fisheries Permit or from vessels landing individual fishing quota (IFQ) or community development quota (CDQ) halibut or IFQ sablefish. Within the subset of vessels subject to the observer fee, only landings accruing against an IFQ allocation or a Federal TAC for groundfish are included in the fee assessment. A table with additional information about which landings are subject to the observer fee is at § 679.55(c) and on page 2 of an informational bulletin titled “Observer Fee Collection” that can be downloaded from the NMFS Alaska Region website at
A fee equal to 1.65 percent of the ex-vessel value is assessed on the landings of groundfish and halibut subject to the fee. Ex-vessel value is determined by multiplying the standard price for groundfish by the round weight equivalent for each species, gear, and port combination, and the standard price for halibut by the headed and gutted weight equivalent. Standard prices are determined by aggregating prices by species, gear, and area grouping to arrive at an average price per pound for each grouping. NMFS reviews each vessel landing report and determines whether the reported landing is subject to the observer fee and, if so, which groundfish species in the landing are subject to the observer fee. All IFQ or CDQ halibut in a landing subject to the observer fee will be included in the observer fee calculation. For any landed groundfish or halibut subject to the observer fee, NMFS will apply the appropriate standard ex-vessel prices for the species, gear type, and port and calculate the observer fee associated with the landing.
Processors and registered buyers can access the landing-specific, observer fee information through the NMFS Web Application (
Under the fee system, catcher vessel owners split the fee with the registered buyers or owners of shoreside or stationary floating processors. While the owners of catcher vessels and processors in the partial coverage category are each responsible for paying their portion of the fee, the owners of
NMFS sends invoices to processors and registered buyers by January 15 of each calendar year. The total fee amount is determined by the sum of the fees reported for each landing at that processor or registered buyer in the prior calendar year. Processors and registered buyers must pay the fees to NMFS using eFISH. Payments are due by February 15 of each year. Processors and registered buyers have access to this system through a User ID and password issued by NMFS. Instructions for electronic payment are provided on the NMFS Alaska Region website at
This notification provides the standard ex-vessel prices for groundfish and halibut species subject to the observer fee in 2025. Data sources for ex-vessel prices include the following:
• For groundfish other than sablefish IFQ and sablefish accruing against the fixed gear sablefish CDQ reserve, the State of Alaska's Commercial Fishery Entry Commission's (CFEC) gross revenue data, which are based on the Commercial Operator Annual Report (COAR) and Alaska Department of Fish and Game (ADF&G) fish tickets; and
• For halibut IFQ, halibut CDQ, sablefish IFQ, and sablefish accruing against the fixed gear sablefish CDQ reserve, the IFQ Buyer Report that is submitted to NMFS annually by each registered buyer that operates as a shoreside processor and receives and purchases IFQ landings of sablefish and halibut or CDQ landings of halibut under § 679.5(l)(7)(i).
The standard prices in this notification were calculated using the following procedures for protecting confidentiality of data submitted to or collected by NMFS. NMFS does not publish any price information that would permit the identification of an individual or business. For NMFS to publish a standard price for a particular species-gear-port combination, the price data used to calculate the standard price must represent landings from at least four different vessels delivered to at least three different processors in a port or port group. NMFS has aggregated price data that are confidential because fewer than four vessels or three processors contributed data to a particular species-gear-port combination.
Table 1 shows the groundfish species standard ex-vessel prices that will be used to calculate the fee for 2025. These prices are based on the CFEC gross revenue data, which are based on landings data from ADF&G fish tickets and information from the COAR. The COAR contains statewide buying and production information and is considered the most complete routinely collected information to determine the ex-vessel value of groundfish harvested from waters off Alaska.
The standard ex-vessel prices for groundfish were calculated by adding ex-vessel value from the CFEC gross revenue files for 2021, 2022, and 2023 by species, port, and gear category, and adding the volume (round weight equivalent) from the CFEC gross revenue files for 2021, 2022, and 2023 by species, port, and gear category, and then dividing total ex-vessel value over the 3 year period in each category by total volume over the 3 year period in each category. This calculation results in an average ex-vessel price per pound by species, port, and gear category for the 3 year period. Three gear categories were used for the standard ex-vessel prices: (1) non-trawl gear, including hook-and-line, pot, jig, troll, and others (Non-Trawl); (2) non-pelagic trawl gear (NPT); and (3) pelagic trawl gear (PTR).
CFEC ex-vessel value and volume data are available in the fall of the year following the year the fishing occurred. Thus, it is not possible to base ex-vessel fee liabilities on standard prices that are less than two years old. For the 2025 groundfish standard ex-vessel prices, the most recent ex-vessel value and volume data available are from 2023.
If a particular groundfish species is not listed in table 1, the standard ex-vessel price for a species group (if it exists in the management area) will be used. If price data for a particular species remained confidential once aggregated to the outside of Alaska (ALL) level, data are aggregated by species group (Flathead Sole; GOA Deep-water Flatfish; GOA Shallow-water Flatfish; GOA Skate, Other; and Other Rockfish). Standard prices for the groundfish species groups are shown in table 2.
If a port-level price does not meet the confidentiality requirements, the data are aggregated by port group. Port-group data for Southeast Alaska (SEAK) and the Eastern GOA excluding Southeast Alaska (EGOAxSE) also are presented separately when price data are available. Port-group data are aggregated by regulatory area in the GOA (Eastern GOA, Central GOA, and Western GOA) and by subarea in the BSAI (BS subarea and AI subarea). If confidentiality requirements are still not met by aggregating prices across ports at these levels, the prices are aggregated at the level of BSAI or GOA, then statewide (AK) and ports outside of Alaska (OTAK), and finally all ports, including those outside of Alaska (ALL).
Standard prices are presented separately for non-pelagic trawl and pelagic trawl when non-confidential data are available. NMFS also calculated prices for a “Pelagic Trawl/Non-pelagic Trawl Combined” (PTR/NPT) category that can be used when combining trawl price data for landings of a species in a particular port or port group will not violate confidentiality requirements. Creating this standard price category allows NMFS to assess a fee on 2025 landings of some of the species with pelagic trawl gear based on a combined trawl gear price for the port or port group. If confidentiality requirements are still not met with the PTR/NPT category, fixed and trawl gear prices are combined for an all gear price.
If no standard ex-vessel price is listed for a species or species group and gear category combination in table 1, table 2, or table 3, no fee will be assessed on that landing. Volume and value data for that species will be added to the standard ex-vessel prices in future years, if the data become available and display of a standard ex-vessel price meets confidentiality requirements.
Table 3 shows the observer fee standard ex-vessel prices for halibut and sablefish. These standard prices are calculated as a single annual average price, by species and port or port group. Volume and ex-vessel value data collected on the 2024 IFQ Buyer Report for landings made from October 15, 2023 through September 30, 2024 were used to calculate the standard ex-vessel prices for the 2025 observer fee for halibut IFQ, halibut CDQ, sablefish IFQ, and sablefish landings that accrue against the fixed gear sablefish CDQ reserve.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application for Letter of Authorization; request for comments and information.
NMFS has received a request from the Alabama Department of Conservation and Natural Resources (ALDCNR) for authorization to take small numbers of marine mammals incidental to fisheries independent research programs in Mobile Bay and adjacent waters of Alabama over the course of five years from the date of issuance. Pursuant to regulations implementing the Marine Mammal Protection Act (MMPA), NMFS is announcing receipt of the ALDCNR's
Comments and information must be received no later than January 27, 2025.
Comments on the applications should be addressed to Jolie Harrison, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service. Physical comments should be sent to 1315 East-West Highway, Silver Spring, MD 20910 and electronic comments should be sent to
Craig Cockrell, Office of Protected Resources, NMFS, (301) 427-8401. An electronic copy of the ALDCNR's application may be obtained online at:
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An incidental take authorization shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance, which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On April 12, 2024, NMFS received an application from the ALDCNR requesting authorization for take of marine mammals incidental to their fisheries independent research programs related to sampling activities with gillnet and trawl gear in Mobile Bay and adjacent waters of Alabama. Following NMFS' review of the application, ALDCNR provided responses to NMFS initial questions on July 11, 2024 and responses to follow up questions on December 10, 2024. NMFS determined the application was adequate and complete on December 12, 2024. The requested regulations would be valid for five years from the date of issuance. The ALDCNR plans to conduct the research in Mobile Bay and adjacent waters including Mississippi Sound, Perdido Bay, Wolf Bay, and Little Lagoon. It is possible that marine mammals may interact with fishing gear (
The ALDCNR conducts fishery independent surveys throughout the inshore and coastal waters of Alabama, in the northern Gulf of Mexico, to produce scientific information necessary for the management and conservation of living marine resources in that area. The fisheries independent research programs use sampling gear including gillnets, seines, and otter trawls to assess marine organisms in different habitats and trophic levels and provides data about post-larval, juvenile, and adult populations of marine organisms in Alabama inshore and coastal waters. The collective data is used by fisheries scientists to monitor growth, seasonal and geographical distribution, changes in population structures, and correlation of abundance with some abiotic factors for all Alabama marine fauna. These proposed activities by ALDCNR would be conducted over the 5-year period of the regulations and subsequent LOA.
Interested persons may submit information, suggestions, and comments concerning the ALDCNR's request (see
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of meeting open to the public.
The Gulf of Mexico Fishery Management Council (Council) will hold a second Recreational Initiative
The webinar will convene Thursday, January 16, 2025, from 6 p.m. to 9 p.m., EST.
The workshop will take place via webinar. You may participate by accessing the log-on information by visiting our website at
Emily Muehlstein, Public Information Officer, Gulf of Mexico Fishery Management Council; telephone: (813) 348-1630;
The meeting will begin with a brief presentation on the purpose of the Recreational Initiative, provide a brief overview of results of the second Working Group Meeting, and outline the meeting format and expected outcomes. Staff will ask a series of open-ended questions and allow for open public comment on the Recreational Initiative.
Visit the Gulf Council's website for meeting registration information:
The meeting will be via webinar only. You may register for the webinar by visiting
The timing and order in which agenda items are addressed may change as required to effectively address the issue, and the latest version along with other meeting materials will be posted on the website as they become available.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid or accommodations should be directed to Kathy Pereira, (813) 348-1630, at least 15 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Scallop Committee via webinar to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Tuesday, January 14, 2025 at 1 p.m.
Webinar registration URL information:
Cate O'Keefe, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The Scallop Committee will meet to Review 2025 Scallop Work Priorities, including a work plan for this calendar year. The discussion will focus on the development of a Long-Term Strategic Plan. Other business will be discussed, if necessary.
Although non-emergency issues not contained on the agenda may come before this Council for discussion, those issues may not be the subject of formal action during this meeting. Council action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency. The public also should be aware that the meeting will be recorded. Consistent with 16 U.S.C. 1852, a copy of the recording is available upon request.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Cate O'Keefe, Executive Director, at (978) 465-0492, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS); National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of standard prices and fee percentage.
NMFS publishes the individual fishing quota (IFQ) standard prices and fee percentage for cost recovery for the IFQ Program for the halibut and sablefish fisheries of the North Pacific (IFQ Program). The fee percentage for 2024 is 3.0 percent. This action is intended to provide holders of halibut and sablefish IFQ permits with the 2024 standard prices and fee percentage to calculate the required payment for IFQ cost recovery fees due by January 31, 2025.
The standard prices and fee percentages are valid on December 26, 2024
Charmaine Weeks, Fee Coordinator, 907-586-7231.
NMFS Alaska Region administers the IFQ Program in the North Pacific. The IFQ Program is a limited access system authorized by the Magnuson-Stevens
In 1996, the Magnuson-Stevens Act was amended to, among other purposes, require the Secretary of Commerce to collect a fee to recover the actual costs directly related to the management and enforcement of any individual quota program. This requirement was further amended in 2006 to include collection of the actual costs of data collection and to replace the reference to “individual quota program” with a more general reference to “limited access privilege program” at section 304(d)(2)(A) of the Magnuson-Stevens Act. Section 304(d)(2) of the Magnuson-Stevens Act also specifies an upper limit on these fees, when the fees must be collected, and where the fees must be deposited.
On March 20, 2000, NMFS published regulations at § 679.45 to implement cost recovery for the IFQ Program (65 FR 14919, March 20, 2000). Under the regulations, an IFQ permit holder must pay a cost recovery fee for every pound of IFQ halibut and sablefish that is landed on their IFQ permit(s), including any halibut that is landed as guided angler fish. The IFQ permit holder is responsible for self-collecting the fee for all IFQ halibut and sablefish landings on their permit(s). The IFQ permit holder is also responsible for submitting IFQ fee payments(s) to NMFS on or before January 31 of the year following the year in which the IFQ landings were made. The total dollar amount of the fee is determined by multiplying the NMFS published fee percentage by the ex-vessel value of all IFQ landings made on the permit(s) during the IFQ fishing year. As required by § 679.45(d)(1) and (d)(3)(i), NMFS publishes this notice of the fee percentage for the IFQ halibut and sablefish fisheries in the
The fee is based on the sum of all payments from, for example, fish processors, made to fishermen for the sale of the fish during the year. This includes any retro-payments (
For purposes of calculating IFQ cost recovery fees, NMFS distinguishes between two types of ex-vessel value: actual and standard. Actual ex-vessel value is the amount of all compensation, monetary or non-monetary, that an IFQ permit holder received as payment for his or her IFQ fish sold. Standard ex-vessel value is the default value used to calculate the fee. IFQ permit holders have the option of using actual ex-vessel value if they can satisfactorily document it; otherwise, the standard ex-vessel value is used.
Section 679.45(b)(3)(iii) requires the Regional Administrator to publish IFQ standard prices during the last quarter of each calendar year. These standard prices are used, along with estimates of IFQ halibut and IFQ sablefish landings, to calculate standard ex-vessel values. The standard prices are described in U.S. dollars per IFQ equivalent pound for IFQ halibut and IFQ sablefish landings made during the 2024 year. According to § 679.2, IFQ equivalent pound(s) means the weight amount, recorded in pounds, and calculated as round weight for sablefish and headed and gutted weight for halibut, for an IFQ landing. The weight of halibut in pounds landed as guided angler fish is converted to IFQ equivalent pound(s) as specified in 50 CFR 300.65(c)(5)(ii)(E). NMFS calculates the standard prices to closely reflect the variations in the actual ex-vessel values of IFQ halibut and IFQ sablefish landings by month and port or port-group. The standard prices for IFQ halibut and IFQ sablefish are listed in the tables that follow the next section. Data from ports are combined as necessary to protect confidentiality.
NMFS calculates the fee percentage each year according to the factors and methods described at § 679.45(d)(2). NMFS determines the fee percentage that applies to landings made in the previous year by dividing the total costs directly related to the management, data collection, and enforcement of the IFQ Program (management costs) during the previous year by the total standard ex-vessel value of halibut and sablefish IFQ landings made during the previous year (fishery value). NMFS identifies the actual management costs associated with certain management, data collection, and enforcement functions through an established accounting system that allows staff to track labor, travel, contracts, rent, and procurement. NMFS calculates the fishery value as described under the section Standard Prices.
Using the fee percentage formula described above, NMFS determined that the percentage of management costs to fishery value for the 2024 calendar year is 5.2 percent of the standard ex-vessel value; however, the fee percentage must not exceed 3.0 percent pursuant to section 304(d)(2)(B) of the Magnuson-Stevens Act. Therefore, the 2024 fee percentage is set at 3.0 percent. An IFQ permit holder is to use the fee percentage of 3.0 percent to calculate their fee for IFQ equivalent pound(s) landed during the 2024 halibut and sablefish IFQ fishing season. An IFQ permit holder is responsible for submitting the 2024 IFQ fee payment to NMFS on or before January 31, 2025. Payment must be made in accordance with the payment methods set forth in § 679.45(a)(4)(iv). Payment can be made using credit card, debit card, or electronic check via the
Due to the regulatory cap the 2024 fee percentage of 3.0 percent is the same as the 2023 fee percentage of 3.0 percent (88 FR 89667, December 28, 2023). Net fishery management costs decreased by 12% when compared to 2023's net fishery management costs. However, the total fishery value declined by 43%, resulting in a capped fee percentage.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public workshops.
Atlantic Shark Identification Workshops and Safe Handling, Release, and Identification Workshops will be held in January, February, and March of 2025. Certain fishermen and shark dealers are required to attend a workshop to meet regulatory requirements and to maintain valid permits. Specifically, the Atlantic Shark Identification Workshop is mandatory for all federally permitted Atlantic shark dealers. The Safe Handling, Release, and Identification Workshop is mandatory for vessel owners and operators who use bottom longline, pelagic longline, or gillnet gear, and who have also been issued shark or swordfish limited access permits. Additional free workshops will be conducted in 2025 and will be announced in a future notice. In addition, NMFS has implemented online recertification workshops for persons who have already taken an in-person training.
The Atlantic Shark Identification Workshops will be held on January 16, 2025, February 13, 2025, and March 20, 2025. The Safe Handling, Release, and Identification Workshops will be held on January 7, 2025, February 4, 2025, and March 6, 2025.
The Atlantic Shark Identification Workshops will be held in Kenner, LA, Fort Pierce, FL, and Wilmington, NC. The Safe Handling, Release, and Identification Workshops will be held in Marathon, FL, Portsmouth, NH, and Houston, TX.
Elsa Gutierrez by email at
Atlantic highly migratory species (HMS) fisheries (tunas, swordfish, sharks, and billfish) are managed under the 2006 Consolidated HMS Fishery Management Plan (FMP) and its amendments, pursuant to the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801
Since January 1, 2008, Atlantic shark dealers have been prohibited from receiving, purchasing, trading, or bartering for Atlantic sharks unless a valid Atlantic Shark Identification Workshop certificate is on the premises of each business listed under the shark dealer permit that first receives Atlantic sharks (71 FR 58058, October 2, 2006). Dealers who attend and successfully complete a workshop are issued a certificate for each place of business that is permitted to receive sharks. These certificate(s) are valid for 3 years. Thus, certificates that were initially issued in 2022 will expire in 2025.
Currently, permitted dealers may send a proxy to an Atlantic Shark Identification Workshop. However, if a dealer opts to send a proxy, the dealer must designate a proxy for each place of business covered by the dealer's permit that first receives Atlantic sharks. Only one certificate will be issued to each proxy. A proxy must be a person who is currently employed by a place of business covered by the dealer's permit; is a primary participant in the identification, weighing, and/or first receipt of fish as they are offloaded from a vessel; and who fills out dealer reports. Atlantic shark dealers are prohibited from renewing a Federal shark dealer permit unless a valid Atlantic Shark Identification Workshop certificate for each business location that first receives Atlantic sharks has been submitted with the permit renewal application. Additionally, a copy of a valid dealer or proxy Atlantic Shark Identification Workshop certificate must be in any trucks or other conveyances that are extensions of a dealer's place of business.
1. January 16, 2025, 12 p.m.-4 p.m., Home2 Suites Kenner Airport, 1112 Veterans Memorial Boulevard, Kenner, LA 70062. 2. February 13, 2025, 12 p.m.-4 p.m., Hampton Inn & Suites Fort Pierce, 1985 Reynolds Drive, Fort Pierce, FL 34945. 3. March 20, 2025, 12 p.m.-4 p.m., Wingate by Wyndham Wilmington, 5126 Market Street Bus 17, Wilmington, NC 28405.
To register for a scheduled Atlantic Shark Identification Workshop, please contact Eric Sander at
To ensure that workshop certificates are linked to the correct permits, participants will need to bring the following specific items to the workshop:
• Atlantic shark dealer permit holders must bring proof that the attendee is an owner or agent of the business (such as articles of incorporation), a copy of the applicable permit, and proof of identification.
• Atlantic shark dealer proxies must bring documentation from the permitted dealer acknowledging that the proxy is attending the workshop on behalf of the permitted Atlantic shark dealer for a specific business location, a copy of the appropriate valid permit, and proof of identification.
The Atlantic Shark Identification Workshops are designed to reduce the number of unknown and improperly identified sharks reported in the dealer reporting form and increase the accuracy of species-specific dealer-reported information. Reducing the number of unknown and improperly identified sharks will improve quota monitoring and the data used in stock assessments. These workshops will train shark dealer permit holders or their proxies to properly identify Atlantic shark carcasses.
Since January 1, 2007, shark limited access and swordfish limited access
In addition to vessel owners, at least one operator on board vessels issued a limited access swordfish or shark permit that uses longline or gillnet gear is required to attend a Safe Handling, Release, and Identification Workshop and receive a certificate. Vessels that have been issued a limited access swordfish or shark permit and that use longline or gillnet gear may not fish unless both the vessel owner and operator have valid workshop certificates on board at all times. Vessel operators who have not already attended a workshop and received a NMFS certificate, or vessel operators whose certificate(s) will expire prior to their next fishing trip, must attend a workshop to operate a vessel with swordfish and shark limited access permits on which longline or gillnet gear is used.
1. January 7, 2025, 9 a.m.-2 p.m., Faro Blanco Resort Curio by Hilton, 1996 Overseas Highway, Marathon, FL 33050.
2. February 4, 2025, 9 a.m.-2 p.m., Residence Inn by Marriott Downtown Portsmouth, 100 Deer Street, Portsmouth, NH 03801.
3. March 6, 2025, 9 a.m.-2 p.m., Holiday Inn Express-Houston Medical Center, 9300 S. Main Street, Houston, TX 77025.
To register for a scheduled Safe Handling, Release, and Identification Workshop, please contact Angler Conservation Education at 386-682-0158. Pre-registration is highly recommended, but not required.
To ensure that workshop certificates are linked to the correct permits, participants will need to bring the following specific items with them to the workshop:
• Individual vessel owners must bring a copy of the appropriate swordfish and/or shark permit(s), a copy of the vessel registration or documentation, and proof of identification;
• Representatives of a business-owned or co-owned vessel must bring proof that the individual is an agent of the business (such as articles of incorporation), a copy of the applicable swordfish and/or shark permit(s), and proof of identification; and
• Vessel operators must bring proof of identification.
The Safe Handling, Release, and Identification Workshops are designed to teach the owner and operator of a vessel that fishes with longline or gillnet gear the required techniques for the safe handling and release of entangled and/or hooked protected species, such as sea turtles, marine mammals, smalltooth sawfish, Atlantic sturgeon, and prohibited sharks. In an effort to improve reporting, the proper identification of protected species and prohibited sharks will also be taught at these workshops. Additionally, individuals attending these workshops will gain a better understanding of the requirements for participating in these fisheries. The overall goal of these workshops is to provide participants with the skills needed to reduce the mortality of protected species and prohibited sharks, which may prevent additional regulations on these fisheries in the future.
NMFS implemented an online option for shark dealers and owners and operators of vessels that fish with longline and gillnet gear to renew their certificates in December 2021. To be eligible for online recertification workshops, dealers and vessel owners and operators need to have previously attended an in-person workshop. Information about the courses is available online at
Commodity Futures Trading Commission.
Notice.
In compliance with the Paperwork Reduction Act of 1995 (PRA), this notice announces that the Information Collection Request (ICR) abstracted below has been forwarded to the Office of Information and Regulatory Affairs (OIRA), of the Office of Management and Budget (OMB), for review and comment. The ICR describes the nature of the information collection and its expected costs and burden.
Comments must be submitted on or before January 27, 2025.
Written comments and recommendations for the proposed information collection should be submitted within 30 days of this notice's publication to OIRA, at
In addition to the submission of comments to
Or by either of the following methods:
•
•
Melissa Chiang, Senior Assistant General Counsel, Office of the General Counsel, Commodity Futures Trading Commission, (202) 418-5578; email:
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.
There are no capital costs or operating and maintenance costs associated with this collection.
Commodity Futures Trading Commission.
Notice.
The Commodity Futures Trading Commission (“Commission” or “CFTC”) is announcing an opportunity for public comment on the proposed renewal of a collection of certain information by the agency. Under the Paperwork Reduction Act (“PRA”), Federal agencies are required to publish notice in the
Comments must be submitted on or before February 24, 2025.
You may submit comments, identified by “Renewal of Collection 3038-0074, Core Principles and Other Requirements for Swap Execution Facilities” by any of the following methods:
• The CFTC website, at
•
•
Please submit your comments using only one method.
Roger Smith, Associate Chief Counsel, Division of Market Oversight Commodity Futures Trading Commission, (202) 418-5344; email:
Under the PRA, 44 U.S.C. 3501
With respect to the collection of information, the CFTC invites comments on:
• Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use;
• The accuracy of the Commission's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Ways to enhance the quality, usefulness, and clarity of the information to be collected; and
• Ways to minimize the burden of collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology;
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
There are no capital costs or operating and maintenance costs associated with this collection.
Consumer Financial Protection Bureau.
Supervisory highlights.
The Consumer Financial Protection Bureau (CFPB or Bureau) is issuing its thirty sixth edition of
The findings in this edition of
Jaclyn Sellers, Senior Counsel, at (202) 435-7449. If you require this document in an alternative electronic format, please contact
Student loans represent the second-largest form of U.S. consumer debt at around $1.77 trillion in total outstanding balances. While Federal student loans comprise the vast majority of the student lending market, private student loans present notable risks. The refinance market, for example, may offer certain benefits, but refinancing or consolidating Federal loans through a private lender results in the loss of important Federal protections. And institutional lending products—private loans made by the borrower's school directly to the student—warrant special attention because of the uniquely close relationship between student and school. Additionally, the terms of private student loans are not standardized, and examiners have found certain loan terms problematic for consumers. Because of these substantial risks, the Consumer Financial Protection Bureau (CFPB) is actively engaged in vigorous oversight of all areas of the student loan market to ensure that entities comply with Federal consumer financial laws, including the Consumer Financial Protection Act (CFPA),
This edition of
The fifth and last group of findings relate to the servicing of Federal student loans. For over three years, payments on these loans were paused due to the COVID-19 pandemic. During that time, approximately 20 million borrower accounts were transferred to different Federal student loan servicers. In September 2023, interest began accruing on nearly $1.5 trillion in federally owned loans owed by approximately 43 million consumers.
In October 2023, loan payment obligations resumed for around 28 million borrowers—including more than 6 million entering repayment for the first time. Many of these borrowers applied for income-driven repayment (IDR) plans to reduce their monthly payment amounts. Our recent supervisory work identified significant and pervasive violations related to servicers' handling of the return to repayment. These violations include failing to provide appropriate avenues for consumers to communicate with their servicers, sending deceptive billing statements, withdrawing excess amounts from borrowers' deposit accounts, and numerous problems related to processing of IDR applications.
To maintain the anonymity of the supervised institutions discussed in
Refinancing student loans poses risks for borrowers, including loss of benefits tied to Federal student loans. In addition to other benefits, Federal student loans offer access to various forgiveness programs. For example, under the Public Service Loan Forgiveness program, eligible borrowers can have their remaining loan balance forgiven after making 120 qualifying loan payments on an IDR plan, while working for a qualifying public service employer. Under the Teacher Loan Forgiveness program, teachers may be eligible to have a portion of their loans forgiven after working for five years in low-income public schools. When borrowers refinance or consolidate these loans through a private lender, they lose these benefits and protections.
Examiners found that private lenders offering to refinance Federal student loans engaged in deceptive acts or practices where their marketing and disclosure materials give a misleading net impression that refinancing Federal loans might not result in forfeiting access to Federal forgiveness programs, when, in fact, it was a certainty. A representation, omission, act, or practice is deceptive when: (1) the representation, omission, act, or practice misleads or is likely to mislead the consumer; (2) the consumer's interpretation of the representation, omission, act or practice is reasonable under the circumstances; and (3) the misleading representation, omission, act or practice is material.
Examiners observed that the lenders repeatedly disclosed some of the benefits borrowers would lose access to if they refinanced their Federal loans into private loans, but omitted the fact that borrowers would lose access to forgiveness plans. In one instance, the lenders said borrowers “may” lose access to Federal benefits, despite it being a certainty. In phone calls about refinancing Federal loans, the lenders scripted responses to direct questions about loan forgiveness that omitted the loss of forgiveness benefits upon refinance.
These statements were misleading because they created the net impression that borrowers could refinance their loans with the lenders without losing access to forgiveness programs, which is false. The borrowers' interpretation of the representations was reasonable, as borrowers are entitled to accept statements on the lenders' website and the lenders' responses to direct questions in assessing the pros and cons of refinancing Federal student loans. The representations are material as they may affect borrowers' decisions regarding whether to refinance their Federal loans.
Examiners also found instances of abusive acts or practices by private lenders in connection with misleading statements about Federal forgiveness in connection with refinancing Federal loans by private lenders. An abusive act or practice: (1) materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or (2) takes unreasonable advantage of: a lack of understanding on the part of the consumer of the material risks, costs or conditions of the product or service; the ability of the consumer to protect the interest of the consumer in selecting or using a financial product or service; or the reasonable reliance by the consumer on a covered person to act in the interest of the consumer.
Examiners found that the lenders engaged in abusive acts or practices by taking unreasonable advantage of a lack of understanding on the part of borrowers regarding the material risks, costs, or conditions of refinancing Federal loans into private loans. The lenders took unreasonable advantage of borrowers where their representations misled borrowers about the Federal benefits at risk when borrowers refinance their student loans. Here, the lenders created the impression that refinancing Federal loans may not result in forfeiting access to Federal forgiveness programs.
The lenders profited from borrowers paying the full amount of their loans, when the borrowers otherwise potentially could have had some or all of those loans forgiven. They also gained customers who might not otherwise refinance their loans with the lenders, expanding their market share. And they increased loan amounts when borrowers consolidated Federal loans with private loans, which increased their revenue from interest on the loans. Borrower complaints evidenced a lack of understanding about the impact on eligibility for loan forgiveness and confusion based on the lenders' representations.
Examiners found that student loan originators engaged in unfair acts or practices by failing to re-amortize or offer to re-amortize a consolidated refinanced student loan when the borrower requested a modification to the loan package to exclude certain loans during the three-day cancellation period. An act or practice is unfair when: (1) it causes or is likely to cause substantial injury to consumers; (2) the injury is not reasonably avoidable by
This practice was unfair because it caused or was likely to cause substantial injury to borrowers because they were charged monthly payments larger than what they would have been charged had the Federal loans not been included and not given a choice about how to allocate their funds. Borrowers could not reasonably avoid the injuries because they could not control lenders' decisions not to re-amortize or offer to re-amortize the loans. The injuries outweighed any countervailing benefits to consumers or competition.
Examiners found that student loan originators violated Regulation Z
Examiners found that lenders engaged in unfair acts or practices by denying borrowers' applications for discharge based on Total and Permanent Disability for reasons other than those identified in the loan note where they otherwise satisfied the criteria for discharge based on Total and Permanent Disability.
Examiners observed that borrowers' loan notes provided for Total and Permanent Disability discharge based on the criterion that borrowers were unable to engage in any substantial gainful activity due to a physical or mental impairment of a certain type. The lenders denied applications for Total and Permanent Disability discharges based on criteria not included in the loan note.
This practice caused substantial injury because borrowers were required to continue to make loan payments on loans that should have been discharged according to the contract terms. Borrowers may be required to pay down loan balances of thousands of dollars each. The injury is not reasonably avoidable because borrowers have no way to prevent the lenders from applying additional criteria to their discharge applications. The injury does not outweigh any countervailing benefits to consumers or competition.
Examiners found that private student lenders engaged in deceptive acts or practices by inaccurately representing that their autopay discount was not available to borrowers with certain types of loans when in fact they were eligible.
The lenders had policies providing qualifying borrowers with a discount of 0.25% on their student loan interest rate if they sign up for autopay. On their online borrower portals, the lenders represented that certain types of loans did not qualify for an autopay rate reduction, just before a link to enroll in autopay. However, these types of loans had become eligible for the autopay discount five years earlier.
This representation misled or was likely to mislead borrowers, as it misstated that certain borrowers were not eligible for the autopay discount when they were, in fact, eligible. Borrowers' interpretation of the representation was reasonable, as it is reasonable for borrowers to take at face value an express claim on their lender's portal regarding its policies for autopay eligibility. The representation is material, as borrowers often enroll in autopay to receive the discount on their student loan interest rate. Some borrowers who believe they are ineligible for the autopay rate reduction because they accepted the lenders' misleading misrepresentations may not sign up for autopay, and they may pay more in interest than they would have otherwise.
Private student loan originators advertised on their websites and on phone calls with borrowers that private student loan borrowers could suspend their loan payments if they lost their job. Examiners found that the lenders continued to advertise this as an attribute of their private student loans, even after the lenders unilaterally replaced the unemployment program with a less generous one that only allowed borrowers to reduce their payments during unemployment, but only if the borrower met new ability-to-pay eligibility criteria.
Examiners identified two law violations related to advertising this unemployment program, unilaterally eliminating the benefit, and then failing to honor it.
Examiners found that entities offering private student loans engaged in deceptive acts or practices by falsely advertising that private student loan borrowers could suspend their payments for short periods of unemployment when, in fact, the lenders no longer allowed borrowers to do so.
The statements were likely to mislead reasonable borrowers into believing that suspension of the payments would be available if they lost their job. In fact, after a point, the lenders no longer offered this benefit. Borrowers may reasonably take the websites and lenders' statements at face value regarding the ability to suspend their payments during unemployment. These representations were material because they were likely to affect borrowers' choice to originate or refinance their student loans based on the availability of the advertised benefit.
Examiners also found that private student loan originators engaged in abusive acts or practices by taking unreasonable advantage of borrowers' inability to protect their own interest in selecting or using a consumer financial product or service by prominently advertising unemployment protections and then eliminating or not providing those protections after the borrower had already elected the loans.
Lenders took unreasonable advantage of borrowers by promoting the ability to suspend payments for periods of unemployment to attract borrowers, and then reducing costs by significantly rolling back the unemployment protections. Some private student loan borrowers were unable to protect their interests because the lenders did not eliminate the unemployment benefit until after the borrower had taken out the loan. Once they were unemployed,
Student loan borrowers sometimes allege their schools fraudulently induced them to enroll and to secure private student loans to finance their education. These borrowers may be able to discharge certain loans due to their school's misconduct under numerous State and Federal laws and protections. For example, the Borrower-Defense-to-Repayment regulation, 34 CFR 685.400
The Borrower-Defense-to-Repayment regulation does not apply to private student loans. However, other legal protections may allow borrowers to seek to have their private student loans discharged based on school misconduct. Many private student loans include a contractual guarantee in the promissory note—which may be required by the Federal Trade Commission's Holder-in-Due-Course Rule
Examiners identified two violations related to private student loan servicers' treatment of borrowers whose loan contracts have provisions allowing them to challenge their loans against subsequent noteholders and who allege misconduct by their schools.
Examiners reviewed private student loan servicers' practices in connection with borrower contracts that contained language stating that any holder of the contract is subject to all claims and defenses that the borrower would have been able to assert against their school. They found that the servicers engaged in deceptive acts or practices when they implied to these borrowers that they could not challenge their loans using claims or defenses they could have had against their schools. In email responses to borrower complaints (both those made directly to servicers and to complaints referred by the CFPB), servicers stated that there was no discharge program available to these borrowers. In fact, provisions in their loan notes guaranteed their right to allege fraud by their schools as a claim or defense against repayment.
This statement was likely to mislead borrowers by implying that they could not challenge their loans using claims or defenses they could have had against their school. The borrowers' interpretation of the statement to mean that they had no avenues for challenging their private loans based on their school's conduct is reasonable under the circumstances, as they are entitled to accept that their servicers are providing accurate information about the borrower's rights. The servicers' representations were material because they likely affected the borrowers' decisions regarding whether to pursue their claims.
Examiners found that private student loan servicers engaged in an unfair act or practice by failing to consider most borrowers' challenges to their loans related to school misconduct, using claims or defenses they could have had against their schools. The servicers lacked policies and procedures to effectively consider most borrowers' challenges regarding their schools and failed to do so even though provisions in the borrowers' loan notes guaranteed the borrowers' right to assert such challenges. Servicers considered borrowers' claims against their schools only if the borrowers retained attorneys.
This practice resulted in substantial injury to consumers because it caused borrowers to forgo further attempts to challenge their loans or required them to incur the costs necessary to obtain an attorney. Borrowers could not reasonably avoid the injury because they could not know that the servicer would disregard contractual provisions in their loan notes providing that any holder of the contract is subject to all claims and defenses that the borrower would have been able to assert against the seller. The injury is not outweighed by any countervailing benefits to consumers or competition.
To address these UDAAPs related to noteholder liability, Supervision directed the private student loan lenders and servicers to maintain and publicize a robust process to consider borrower claims of misconduct by their school. More specifically, Supervision directed the entities to implement a claims-review process that is not unduly burdensome for the borrowers and gives due deference to findings of the DOE or courts regarding claims of misconduct, fraud, or misrepresentation by a borrower's school; that is public and easily accessible; and that ensures any denials are individualized and detailed. With respect to private student loans where the entity had actual notice that the DOE or a court had made a finding of fraud, misconduct, or misrepresentation by the school that resulted in discharge of loans to attend that school, Supervision further directed the entities to suspend collections until they provided the borrower with a detailed reason why their private loans were not the result of similar misconduct.
Examiners found that private student loan servicers engaged in deceptive acts or practices when they included language in collection letters that gave the misleading impression that the servicers would take legal action against borrowers who fell behind on loan payments. Servicers sent letters to borrowers that included language about enforcing collection of debts and adding legal costs to borrowers' debts if the borrowers did not pay. In fact, the servicers had no practice of bringing legal actions and incurred no legal costs associated with pursuing past due amounts during the exam period. Instead, the servicers returned severely delinquent accounts back to the noteholder.
This act or practice was likely to mislead borrowers because they could reasonably understand the letters to mean that the servicer may bring legal
In response to these findings, servicers removed the language referencing legal actions from their letters.
Academic transcripts are certified records of a student over their course of study. They provide information about courses taken, courses completed, grades, credits earned, certain credentials like majors or minors, and graduation status. Transcripts provide essential documentation of consumers' post-secondary education histories. When requested, institutions provide, or authorize third parties to provide, official transcripts to prospective employers, State licensing or credentialing agencies, and other post-secondary institutions.
Employers or licensing agencies require official transcripts for a range of reasons. For example, some employers may require transcripts to confirm the accuracy of applicants' resumes, and licensing authorities use them to demonstrate that applicants obtained the requisite training.
Consumers also need transcripts when applying to other post-secondary institutions as transfer students or for higher level degrees or credentials. Students may need to demonstrate their completed coursework to obtain credit for that education and progress toward a terminal degree or credential. Moreover, even when consumers do not need or wish to receive credit for any prior education, some post-secondary institutions still require the consumer to provide official transcripts prior to enrollment.
During examinations of entities that created and distributed model retail installment contracts to schools, examiners identified contracts that contained language that allowed for the withholding of transcripts in situations where student borrowers were in default on their education loans. The model contracts contained language allowing educational institutions, as a remedy for default, to “withhold [the student]'s transcripts [or] course completion certificates.” Schools used these model contracts to originate institutional loans and reassigned the loans back to the entities for servicing.
Examiners found that the entities risked engaging in an abusive act or practice by taking unreasonable advantage of consumers' inability to protect their interests when they created and distributed to their clients' contracts for institutional student loans that contained language allowing, as a remedy for default, unconditional withholding of official transcripts as a blanket policy.
In response to these findings, the entities removed the contract language and advised their client schools to cease utilizing the contract provision.
Examiners conducted reviews of entities that created and distributed model retail installment contracts to schools who then originated institutional loans and then assigned the loans to the entities for servicing. The model contracts required repayment during the in-school period and contained language allowing, as a remedy for default, educational institutions to “deny Buyer access to classes, computers, final exams, and other education services at the School, terminate or suspend Buyer's enrollment, deny or cancel Buyer's registration for additional classes, . . . and take other similar actions affecting Buyer's status as a student at the School.”
Examiners found that entities risked engaging in unfair acts or practices by distributing to their clients' contracts for institutional student loans which required repayment during the in-school period that contain language stating that a remedy for default is to deny students access to classes or other services related to ongoing education. This language created a risk of injury to consumers because if they defaulted, then schools could deny them access to education programs that consumers had already paid for, including potentially with other loans or savings. Additionally, since jobs that require advanced education generally pay more, this practice reduces the chances that consumers can earn their degree, and in turn reduces consumers' potential earnings, making repayment of the underlying debt more difficult. Borrowers are unlikely to select a school or loan based on these provisions, as opposed to factors relating to the education itself. Consumers generally do not expect to default, do not consider consequences of default when making product decisions, and cannot bargain over contractual terms. Once the consumer defaults, there is no way to avoid the injury of missing classes and other education benefits because the school controls access to classes. The injury caused by the practices were not outweighed by countervailing benefits to consumers or competition.
In response to these findings, the entities removed the contract language and advised their client schools to cease utilizing the contract provision.
Many student-loan borrowers make payments through auto debits, known as electronic fund transfers. Under Regulation E, the servicer, or designated payee, must obtain written authorization before transferring funds from consumers' accounts.
Examiners continue to identify issues with failures to notify consumers of preauthorized electronic fund transfers that vary in amount.
Federal student loan servicers operate call centers through which they offer borrowers various services to address key loan issues by phone. These issues include resolving disputes, inquiring about account status, enrolling in Federal repayment programs, and making loan payments. Despite purporting to offer the ability to address key loan issues by phone, servicers failed to provide, for extended time periods, adequate avenues for borrowers to manage key aspects of their loans over the phone.
During the return to repayment in the fall of 2023, examiners reviewed metrics the servicers provided on a biweekly basis regarding how they handled incoming calls from student loan borrowers. These metrics covered average call-hold time, abandonment rate, callback speed, and call-center staffing levels. In this period, borrowers calling their servicers faced key average call hold times of 40-58 minutes. Average hold times exceeded 30 minutes during 57-91 percent of operating hours. And more than 41 percent of borrowers abandoned their calls before connecting with an agent. The periods of unavailability lasted multiple weeks.
Examiners concluded that that a lack of oversight contributed to these failures. Servicers' boards did not provide for the appropriate staffing levels to handle the influx of calls generated from the Federal return to repayment process.
Supervision found that the servicers' failures to provide, for an extended period, an adequate avenue for borrowers to timely resolve disputes, inquire about account status, or in enroll in Federal repayment programs, when they offered the option of addressing these issues by phone amounted to unfair acts or practices in violation of 12 U.S.C. 5531 and 5536. The failures caused or were likely to cause borrowers substantial injury by wasting time, delaying information, and delaying their ability to apply for benefits, which can result in increased payment amounts or delayed loan forgiveness. Borrowers cannot avoid this injury because they do not choose their loan servicer and have no control over its level of service, and other methods of seeking assistance like online account access or callbacks were unavailable or ineffective. And they cannot resolve individualized issues through other channels such as online accounts. This injury is not outweighed by any countervailing benefits to borrowers or competition.
Supervision also found that these failures violated the CFPA's prohibition against abusive acts or practices.
In response to these findings, Supervision directed servicers to maintain adequate avenues for borrowers to timely resolve disputes, inquire about account status, and enroll in Federal repayment programs by phone (including by ensuring against unreasonably long average call-hold times and unreasonably high call-drop rates for any extended period); develop and maintain plans to address reasonably foreseeable spikes in borrower communications demand to ensure that, regardless of demand, borrowers consistently have adequate avenues to manage their loans; identify the borrowers who attempted to call their servicers, waited more than an hour before abandoning their call, and within three months took significant action on their loan; and provide information on borrower remediation.
Examiners found that Federal student loan servicers engaged in a deceptive act or practice by providing borrowers with inaccurate payment amounts and due dates on billing statements and disclosures.
Federal student loan servicers provided borrowers inaccurate monthly payment amounts due to both system weaknesses and miscalculations. Some of the miscalculations were due to the servicers misapplying Federal poverty guidelines, using the wrong family size or income, or failing to include spousal debt. Examiners also reviewed billing statements or disclosures with incorrect payment due dates. These included providing borrowers incorrect due dates prior to October 1, 2023, the end of the Federal student loan payment pause, and giving repayment dates to borrowers with pending and approved borrower defense applications. Borrowers with pending or approved borrower defense applications should have been in a forbearance until the discharge or decision process was completed.
These misrepresentations were likely to mislead borrowers about the amount they owed and when their payment was due. Borrowers reasonably interpreted billing statements and disclosures from their Federal student loan servicers as an accurate and reliable source of
Regulation E requires the designated payee to obtain written authorization before transferring funds from consumers' accounts.
In other instances, consumers signed authorizations that allowed servicers to withdraw monthly payment amounts for certain loans from one deposit account and monthly payment amounts for other loans from a different deposit account. The servicers then withdrew payments for all the loans from one of the two deposit accounts. Because the authorization only allowed the servicers to withdraw the monthly payment amounts for specific loans and they instead withdrew monthly payment amounts for other loans, the preauthorized electronic funds transfers were not authorized in writing and therefore violated Regulation E.
Federal student loan borrowers are eligible for a number of repayment plans that base monthly payments on their income and family size; these plans are called IDR plans. To enroll in IDR plans, consumers must submit applications to their servicers who process the applications.
Examiners found that servicers engaged in unfair acts or practices when they caused consumers to experience excessive delays in processing times for IDR applications. In many reviewed files, it took more than 90 calendar days for servicers to process the IDR applications. These delays caused or were likely to cause substantial injury as interest continued to accrue while servicers processed IDR applications, so excessive delays likely resulted in unnecessary accrued interest. In addition, the delays may have prevented borrowers from making payments which count towards loan forgiveness. These delays also caused borrowers considerable frustration and wasted time as they repeatedly tried to obtain information from servicers about the status of their applications. Consumers could not reasonably avoid the injury because they do not choose their servicer and have no control of how long it takes servicers to review and evaluate borrowers' applications. The injury to consumers was not outweighed by countervailing benefits to consumers or to competition.
Examiners found that servicers engaged in unfair acts or practices when they improperly denied consumers' IDR applications. Examiners found that servicers denied consumers' applications for failing to provide sufficient income documentation despite consumers providing sufficient documentation of income. Examiners also found that servicers denied consumers' applications because they had ineligible loan types, when in fact the consumers had eligible loans. These improper denials caused or were likely to cause substantial injury because consumers who are improperly denied paid or were at risk of paying higher monthly payments. Additionally, some consumers may have spent time and resources addressing the denials. Consumers could not reasonably avoid the injury because servicers are responsible for processing IDR applications in accordance with processing requirements and consumers do not choose their servicers. And the injury to consumers is not outweighed by countervailing benefits to consumers or competition.
Examiners found that servicers engaged in deceptive acts or practices by providing inaccurate denial reasons to consumers who applied for IDR plans. The denial letters misled or were likely to mislead borrowers as the denial reasons were not accurate, and in multiple cases, erroneously denied eligible consumers. It is reasonable for borrowers to expect servicers to properly evaluate their eligibility for IDR plans and for denial letters to accurately explain the reasons why servicers denied their IDR applications. The misleading representations were material as the inaccurate denial reasons were likely to influence borrower choices with respect to applying for IDR plans by, for example, leading to borrowers' confusion about eligibility criteria and discouraging borrowers from re-applying for an IDR plan by telling them to find and provide unnecessary additional information in order to qualify.
During the COVID-19 pandemic and through February 29, 2024, the Department of Education allowed consumers to apply for IDR plans by providing an attestation of income over the phone or in writing, this process was referred to as self-certification.
Examiners found that servicers engaged in unfair acts or practices by failing to advise consumers that they could self-certify their income when applying for an IDR plan. Consumers contacted their servicers to discuss their pending IDR applications that were delayed due to missing income documentation, but the servicer representatives did not advise consumers that they could provide the missing information by making an oral attestation during the call. These acts or practices caused or were likely to cause substantial injury because it caused servicers to deny consumers' applications, preventing lower payment amounts, potential interest subsidies, and credit towards loan forgiveness. Consumers could not avoid this injury because they do not choose their servicers and relied on the servicers to provide relevant information regarding IDR applications. The injury to consumers is not outweighed by countervailing benefits to consumers or competition.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 21-19 and Policy Justification.
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Funding Source: National Funds
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* As defined in Section 47(6) of the Arms Export Control Act.
The Kingdom of Saudi Arabia has requested a continuation of a blanket order training program inside and outside of the Kingdom of Saudi Arabia that includes, but is not limited to, flight training; technical training; professional military education; specialized training; Mobile Training Teams (MTTs); Technical Assistance Field Team (TAFT); Extended Training Service Specialists (ETSS); and English language training. These blanket order training cases will cover all relevant types of training offered by or contracted through the U.S. Air Force or DoD. This training for the Royal Saudi Air Force (RSAF) and other Saudi forces will include such subjects as civilian casualty avoidance; the laws of armed conflicts; human rights; command and control; and targeting via MTTs and/or broader Programs of Instruction (POIs). Program management; trainers, simulators; travel; billeting; and medical support may also be included. The estimated total cost is $1 billion.
This proposed sale will support the foreign policy goals and national security objectives of the U.S. by improving the security of a friendly country that is a force for political stability and economic progress in the Middle East.
The proposed sale will improve Saudi Arabia's capability to meet current and future threats and increase its interoperability with the U.S. through comprehensive U.S. Air Force training. The training will assist Saudi Arabia by fostering a climate of security in the region through the improved proficiency of the RSAF. Saudi Arabia will have no difficulty absorbing this training into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
There is no principal contractor for the proposed sale. Training will be provided by U.S. Government or contract vendors based upon requirements as they are determined. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will require the temporary or continuation of assignment of approximately three hundred thirty-nine (339) U.S. Government or contractor training personnel to Saudi Arabia for at least one year with a possibility of extension.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 24-16, Policy Justification, and Sensitivity of Technology.
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Funding Source: Foreign Military Funds and National Funds
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The above notification requirements are combined as follows:
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* As defined in Section 47(6) of the Arms Export Control Act.
The Government of Israel has requested four thousand seven hundred ninety-two (4,792) M107 155mm High Explosive projectiles. Also included are various 155mm projectiles; 155mm ancillaries; publications; technical documentation; U.S. Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The original FMS cases were below congressional notification threshold at $96.51 million and included four thousand seven hundred ninety-two (4,792) M107 155mm High Explosive projectiles (MDE), fifty-two thousand two hundred twenty-nine (52,229) M795 155mm High Explosive projectiles (non-MDE), and thirty thousand (30,000) M4 propelling charges (non-MDE), along with publications, associated technical documentation, and logistics support services, which have subsequently been delivered. Israel has requested additional 155mm ancillaries, which will exceed the notification value threshold, and thus notification of the entire program is required. The estimated total cost is $147.5 million.
The Secretary of State has determined and provided detailed justification to Congress that an emergency exists that requires the immediate sale to the Government of Israel of the above defense articles and services in the national security interests of the United States, thereby waiving the congressional review requirements under Section 36(b) of the Arms Export Control Act, as amended.
The United States is committed to the security of Israel, and it is vital to U.S. national interests to assist Israel to develop and maintain a strong and ready self-defense capability. This proposed sale is consistent with those objectives.
Israel will use the enhanced capability as a deterrent to regional threats and to strengthen its homeland defense. Israel will have no difficulty absorbing this equipment into its armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The 155mm artillery ammunition will be provided from U.S. Army stock. There are no offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to Israel.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
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1. The M107 and M795 are standard Army 155mm high explosive projectiles capable of being fired from many of the 155mm howitzers in use around the world today. These projectiles have steel bodies which are filled with explosives, typically TNT.
2. The M739 and M782 are standard Army 155mm fuzes. Fuzes cause the projectile to detonate at the target and are attached to the projectile by the crew of the howitzer just before loading and firing. The M739 is a point detonating fuze which functions on impact; the M782 is a multi-function fuze which can be set to point detonate or to burst in the air above the target.
3. The M119 and M4 are standard Army 155mm propelling charges. They are loaded into the howitzer, separately from the M107 or M795 projectiles, and propel the projectile from the barrel when the weapon is fired.
4. The M82 is the standard Army 155mm primer. The primer serves to ignite the propelling charge when the howitzer is fired.
5. The highest level of classification of defense articles, components, and services included in this potential sale is UNCLASSIFIED.
6. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
7. A determination has been made that the Government of Israel will provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
8. All defense articles and services listed in this transmittal have been authorized for release and export to Israel.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-77, Policy Justification, and Sensitivity of Technology.
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Funding Source: National Funds
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* As defined in Section 47(6) of the Arms Export Control Act.
The NATO Support and Procurement Agency (NSPA), as Lead Nation on behalf of Germany, Italy, and the Netherlands, has requested to buy nine hundred forty (940) FIM-92K Stinger Missiles. Also included are Battery Coolant Units (BCU); metal containers; United States (U.S.) Government and contractor production, technical, and engineering assistance; and other related elements of logistics and program support. The estimated total cost is $780 million.
This proposed sale will support the foreign policy and national security objectives of the U.S. by improving the security of Germany, Italy, and the Netherlands, three NATO Allies.
The proposed sale will improve the air defense capabilities of these three NATO Allies. They will use the system to defend their territorial integrity and to promote regional stability. The proposed sale supports NATO's goal of improving national and territorial defense as well as improving interoperability with U.S. and NATO forces. Germany, Italy, and the Netherlands will have no difficulty absorbing this equipment into their armed forces.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The prime contractors will be Raytheon, Tucson, AZ, and Lockheed Martin, Syracuse, NY. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any U.S. Government personnel or contractor representatives to NATO.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
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1. The Stinger Re-programmable Micro-Processor (RMP) Block I Missile is a lightweight, self-contained air defense system that can be rapidly deployed by ground troops. Its seeker and guidance systems enable the weapon to acquire, track, and engage a target with one shot.
2. The highest level of classification of defense articles, components, and services included in this potential sale is SECRET.
3. If a technologically advanced adversary were to obtain knowledge of the specific hardware and software elements, the information could be used to develop countermeasures that might reduce weapon system effectiveness or be used in the development of a system with similar or advanced capabilities.
4. A determination has been made that the NSPA and Germany, Italy, and the Netherlands can provide substantially the same degree of protection for the sensitive technology being released as the U.S. Government. This sale is necessary in furtherance of the U.S. foreign policy and national security objectives outlined in the Policy Justification.
5. All defense articles and services listed in this transmittal have been authorized for release and export to NSPA, Germany, Italy, and the Netherlands.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(1) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-80 and Policy Justification.
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Funding Source: National Funds
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* As defined in Section 47(6) of the Arms Export Control Act.
The North Atlantic Treaty Organization (NATO) Support and Procurement Agency as Lead Nation has requested to buy contractor logistics support for the C-17 Strategic Airlift Capability program; United Stats (U.S.) Government and contractor engineering, technical, and logistics support services; and other related elements of logistics and program support. The estimated total cost is $150 million.
This proposed sale will support the foreign policy goals and national security objectives of the U.S. by improving the security of NATO partners that are a force for political stability and economic progress in the North Atlantic region.
The proposed sale will improve NATO's capability to meet current and future threats by improving and maintaining a flexible strategic airlift capability. The multinational Heavy Airlift Wing already has C-17s in its inventory and will have no difficulty absorbing these additional services into its armed services.
The proposed sale of this equipment and support will not alter the basic military balance in the region.
The principal contractor will be The Boeing Company, Arlington, VA. There are no known offset agreements proposed in connection with this potential sale.
Implementation of this proposed sale will not require the assignment of any additional U.S. Government or contractor representatives to NATO.
There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.
Defense Security Cooperation Agency, Department of Defense (DoD).
Arms sales notice.
The DoD is publishing the unclassified text of an arms sales notification.
Pamela Young at (703) 953-6092,
This 36(b)(5)(C) arms sales notification is published to fulfill the requirements of section 155 of Public Law 104-164 dated July 21, 1996. The following is a copy of a letter to the Speaker of the House of Representatives with attached Transmittal 23-0Y.
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Date: August 1, 2023
Implementing Agency: Army
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This transmittal notifies an increase in non-MDE value by $180 million, resulting in a new estimated non-MDE and overall total case value of $575 million. There is no MDE included in this potential sale.
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United States Marine Corps, Department of Defense (DoD).
Notice of a modified system of records.
In accordance with the Privacy Act of 1974, the Department of the Navy is modifying and reissuing a current system of records titled, “Marine Corps Marathon Automated Support System,” MMC00010. This system of records was originally established to collect and maintain records to register and promote participation in Marine Corps Marathon Organization's race events. The system name and identifier are changing from “Marine Corps Marathon Automated Support System,” MMC0010 to “Marine Corps Marathon Organization Event Records,” M01710-2. Additionally, this system of records notice (SORN) is being updated to expand the events and individuals covered, include information regarding medical treatment provided at events, and incorporate the DoD standard routine uses and support additional information sharing of these records outside the DoD. The DoD is also modifying various other sections within the SORN to improve clarity or update information that has changed.
This system of records is effective upon publication; however, comments on the Routine Uses will be accepted on or before January 27, 2025. The Routine Uses are effective at the close of the comment period.
You may submit comments, identified by docket number and title, by either of the following methods:
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Sally A. Hughes, FOIA/PA Programs Manager (ARSF), Headquarters, U.S. Marine Corps, 3000 Marine Corps Pentagon, Washington, DC 20350-3000, or by phone (703) 614-3685.
The Marine Corps Marathon Automated Support System of records is used to register, acknowledge, and promote participation in Marine Corps Marathon Organization's race events. Information from this system of records is used to plan, organize, coordinate, and execute the events and communicate with the runners, first responders, medical and general volunteers. Subject to public comment, the DoD is updating this SORN to add the standard DoD routine uses (routine uses A through J) and to allow for additional disclosures outside DoD related to the purpose of this system of records. Additionally, the following sections of this SORN are being modified: (1) to the Categories of Individuals Covered by the System section to expand the individuals covered; (2) to the Categories of Records to include medical data, treatment, and transportation information; (3) to the Purpose(s) to clarify how the records related to the Category of Individuals (4) to the Retrievability section to permit retrieval using revised Categories of Records; (5) to the Administrative, Technical, and Physical Safeguards to update the individual safeguards protecting the personal information; (6) to the Contesting Records Procedures section to update the appropriate citation for contesting records; (7) to the System Manager and System Location sections to update the addresses and office name; and (8) Retention and Disposal section to reflect current National Archives and Records Administration approved retentions. Furthermore, this notice includes non-substantive changes to simplify the formatting and text of the previously published notice.
DoD SORNs have been published in the
Under the Privacy Act, a “system of records” is a group of records under the control of an agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particular assigned to the individual. In the Privacy Act, an individual is defined as a U.S. citizen or lawful permanent resident.
In accordance with 5 U.S.C. 552a(r) and Office of Management and Budget (OMB) Circular No. A-108, OATSD(PCLT) has provided a report of this system of records to the OMB and to Congress.
Marine Corps Marathon Organization Event Records, M01710-2.
Unclassified.
Marine Corps Marathon Office, Building 3399 Russell Road, Quantico, VA 22134-5000.
The system manager is Director, Marine Corps Marathon Organization, 3399 Russell Road, Quantico, VA 22134-5000, or by phone 703-784-2225/6.
10 U.S.C. 5013, Secretary of the Navy; 10 U.S.C. 5041, Headquarters, Marine Corps: Function, Composition; DoD 7000.14-R Volume 13, Financial Management Regulations (FMR); SECNAVINST 1700.12B, Operation of Morale, Welfare, and Recreation Activities; and Marine Corps Marathon Charter, 27 March 2017.
To register, acknowledge and promote participation in Marine Corps Marathon Organization's race events. Information is used to plan, organize, coordinate, and execute the events and communicate with the runners, first responders, medical and general volunteers before, during and after the event to include publication of finisher results, finisher certificates and race photographs, videos, and motion pictures. Data and photographs, videotape, motion pictures and other recordings may be used by the Marine Corps Marathon Organization and its select partners and sponsors for surveys,
Participants, parents/guardians and volunteers for the Marine Corps Marathon, Marine Corps Marathon Transfer/Deferment, Marine Corps Marathon 10K, Marine Corps Marathon Kids Run, Marine Corps Historic Half, Historic 10K, Semper Fred 5K, Marine Corps 1775K, Run Amuck, Mini Run Amuck, Quantico Triathlon, Turkey Trot 10K, and Turkey Trot Kids Mile.
A. Personal information such as: name, address, date of birth, country, phone number(s), gender, emergency contact information, medical information (current and chronic health conditions, medications, injuries, allergies, and assistive devices as well as medical treatment requested and received). If participant is a minor, parent's name, contact information, and consent.
B. Employment information such as: position/title, rank/grade, work address, email address, military service, medical specialty/sub-specialty, certification/license number, status and expiration date, type, and associated state.
C. First responder and volunteer information such as: organization, race name and volunteer job selection/assignment, and eligibility information (such as experience, education, professional qualifications/skills), and start and completion dates of service.
D. Other information such as: apparel selection and size, race payment information, club member ID and bib number, solo or team runners, team captain selection, and team category (
Records and information stored in this system of records are obtained from: individuals (
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act of 1974, as amended, all or a portion of the records or information contained herein may specifically be disclosed outside the DoD as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the federal government when necessary to accomplish an agency function related to this system of records.
B. To the appropriate Federal, State, local, territorial, tribal, foreign, or international law enforcement authority or other appropriate entity where a record, either alone or in conjunction with other information, indicates a violation or potential violation of law, whether criminal, civil, or regulatory in nature.
C. To any component of the Department of Justice for the purpose of representing the DoD, or its components, officers, employees, or members in pending or potential litigation to which the record is pertinent.
D. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body or official, when the DoD or other Agency representing the DoD determines that the records are relevant and necessary to the proceeding; or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
E. To the National Archives and Records Administration for the purpose of records management inspections conducted under the authority of 44 U.S.C. 2904 and 2906.
F. To a Member of Congress or staff acting upon the Member's behalf when the Member or staff requests the information on behalf of, and at the request of, the individual who is the subject of the record.
G. To appropriate agencies, entities, and persons when (1) the DoD suspects or confirms a breach of the system of records; (2) the DoD determines as a result of the suspected or confirmed breach there is a risk of harm to individuals, the DoD (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the DoD's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
H. To another Federal agency or Federal entity, when the DoD determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
I. To another Federal, State or local agency for the purpose of comparing to the agency's system of records or to non-Federal records, in coordination with an Office of Inspector General in conducting an audit, investigation, inspection evaluation, or other review as authorized by the Inspector General Act of 1978, as amended.
J. To such recipients and under such circumstances and procedures as are mandated by Federal statute or treaty.
K. To the news media, social media channels, or the general public, when there exists a legitimate public interest in the disclosure of information, and the disclosure would not constitute an unwarranted invasion of personal privacy.
L. To select sponsors approved by the Marine Corps Marathon Organization to communicate with the runners.
M. To medical facilities/professionals receiving patients transported for additional care or for follow up care.
Records may be stored electronically on secure servers or on paper in secure facilities in a locked drawer behind a locked door. The records may be stored on magnetic disc, tape, or digital media; in agency-owned cloud environments; or in vendor Cloud Service Offerings
Records may be retrieved by name, home address, email address, telephone number, bib number, runners club ID.
A. Race Winner Records: PERMANENT: Cut off every 4 years. Transfer electronic records to the National Archives for pre-accessioning immediately after 10 YEARS. Transfer to the National Archives immediately after 20 Years.
B. General event management and participant records other than Race Winner Records: TEMPORARY: Cut off at CY. Destroy when 10 years old.
C. First Responder and Volunteer records: TEMPORARY: Cut off at CY or when individual leaves the program. Destroy 3 years after cutoff.
The DoD safeguards records in this system of records according to applicable rules, policies, and procedures, including all applicable DoD automated systems security and access policies. DoD policies require the use of controls to minimize the risk of compromise of personally identifiable information (PII) in paper and electronic form and to enforce access by those with a need to know and with appropriate clearances. Additionally, the DoD established security audit and accountability policies and procedures which support the safeguarding of PII and detection of potential PII incidents. The DoD routinely employs safeguards such as the following to information systems and paper recordkeeping systems: Multifactor log-in authentication including Common Access Card (CAC) authentication and password; physical token as required; physical and technological access controls governing access to data; network encryption to protect data transmitted over the network; disk encryption securing disks storing data; key management services to safeguard encryption keys; masking of sensitive data as practicable; mandatory information assurance and privacy training for individuals who will have access; identification, marking, and safeguarding of PII; physical access safeguards including multifactor identification physical access controls, detection and electronic alert systems for access to servers and other network infrastructure; and electronic intrusion detection systems in DoD facilities.
Individuals seeking access to information about themselves contained in this system of records should address written inquiries to Director, Marine Corps Marathon Organization, P.O. Box 188, Quantico, VA 22134-5000. Written requests must contain full name, current address, telephone number, and must be signed by the individual. An email address is optional. In addition, the requester must provide either a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the appropriate format:
If executed outside the United States: “I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature).”
If executed within the United States, its territories, possessions, or commonwealths: “I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature).”
For personal visits, the individual should be able to provide an identification bearing picture and signature or sufficient verbal data to ensure that the individual is the subject of the inquiry. A visitor may review their records in person by appointment only, Monday through Friday, 8 a.m. to 4:30 p.m., Marine Corps Marathon Organization, Building 3399 Russell Road, Quantico, VA 22134. Contact by phone (703) 784-2225 for an appointment.
The DoD rules for accessing records, contesting contents, and appealing initial Component determinations are contained in 32 CFR part 310, or may be obtained from the system manager.
Individuals seeking to determine whether information about themselves is contained in this system of records should follow the instructions for Record Access Procedures above.
None.
August 3, 1993, 58 FR 41254; February 13, 2015, 80 FR 8078.
Office of Science, Department of Energy.
Notice of open meeting.
This notice announces an open meeting of the Department of Energy (DOE) Advanced Scientific Computing Advisory Committee (ASCAC). The Federal Advisory Committee Act requires that public notice of these meetings be announced in the
Thursday, January 16, 2025; 10 a.m. to 5 p.m. (EDT)
Friday, January 17, 2025; 10 a.m. to Noon (EDT)
Hilton Rockville, 1750 Rockville Pike, Rockville MD 20852. Teleconference: Remote attendance of the ASCAC meeting will be possible via Zoom. Instructions will be posted on the ASCAC website at
Tanner Crowder, Office of Advanced Scientific Computing Research; SC-ASCR/Germantown Building; U.S. Department of Energy; 1000 Independence Avenue SW, Washington, DC 20585-1290; Telephone (301) 903-5384; email at
The meeting agenda includes an update on the accomplishments and planned activities of the Advanced Scientific Computing Research program; technical presentations; updates from subcommittee, and there will be an
With respect to an order issued by the Commission on December 16, 2024, in the above-captioned docket, with the exceptions noted below, the staff of the Office of Enforcement are designated as non-decisional in deliberations by the Commission in this docket.
Exceptions to this designation as non-decisional are:
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
Take notice that the Commission received the following electric securities filings:
Take notice that the Commission received the following public utility holding company filings:
Take notice that the Commission received the following electric reliability filings
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Environmental Protection Agency (EPA).
Notice.
EPA has received a second renewal request for a specific exemption from the Hawaii Department of Agriculture for use of the pesticide DQB Males (
Comments must be received on or before January 10, 2025.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2024-0590, and the specific case number for the chemical substance related to your comment, through the
Charles Smith, Registration Division (7505T), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are a pesticide manufacturer, North American Industrial Classification System (NAICS) (Code 32532) or involved with Hawaiian wildlife conservation areas that have known populations of
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Under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (7 U.S.C. 136p), at the discretion of the EPA Administrator, a Federal or State agency may be exempted from any provision of FIFRA if the EPA Administrator determines that emergency conditions exist which require the exemption. The Hawaii Department of Agriculture has requested the EPA Administrator to issue a specific exemption for the use of DQB males for conservation purposes to control mosquitoes (
As part of this request, the applicant asserts that avian malaria was introduced into the Hawaiian Islands in the 19th century and spread by a non-native mosquito. Hawaii is experiencing increased mosquito populations that have significantly reduced Hawaiian bird populations. According to the applicant, without mosquito control, the survival and recovery of Hawaii's few remaining forest birds, including threatened and endangered species, are at imminent risk.
The applicant proposes to make a maximum of 156 applications of DQB male mosquitoes per release site per year based on an anticipated maximum of 3 releases per week. The total number of application days is a maximum of 156 during the year. The total amount of DQB Males to be applied per year to treat conservation lands throughout Hawaii is up to 3,000,000 male mosquitoes per week or 156,000,000 males per year. The maximum amount of
This notice does not constitute a decision by EPA on the application itself. The regulations governing FIFRA section 18 require publication of a notice of receipt of an application for a specific exemption proposing a new use of a microbial pesticide (
The Agency will review and consider all comments received during the comment period in determining whether to issue the specific exemption requested by the Hawaii Department of Agriculture.
Environmental Protection Agency (EPA).
Notice.
EPA has authorized its contractor General Dynamics Information Technology (GDIT) of Falls Church, VA, and its subcontractors to access information which has been submitted to EPA under the Toxic Substances Control Act (TSCA). Some of the information may be claimed or determined to be Confidential Business Information (CBI).
Access to the confidential data will occur no sooner than January 2, 2025.
This action is directed to the public in general. This action may, however, be of particular interest to those who submit certain information or data to EPA under the Toxic Substances Control Act (TSCA). Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be affected by this action.
Under contract number 47QTCK18D0003, task order number 47QFCA22F0018, contractor General Dynamics Information Technology (GDIT) of 3150 Fairview Park Drive, Falls Church, VA 22042, and its subcontractors will assist the Office of Pollution Prevention and Toxics (OPPT) by hosting the servers and managing the infrastructure where TSCA CBI resides.
In accordance with 40 CFR 2.306(j), EPA has determined that under EPA contract number 47QTCK18D0003, task order number 47QFCA22F0018, GDIT and its subcontractors will require access to CBI submitted to EPA under all sections of TSCA to perform successfully the duties specified under the contract. GDIT's and its subcontractor's personnel will be given access to information claimed or determined to be CBI information submitted to EPA under all sections of TSCA. Some of the information may be claimed or determined to be CBI.
EPA is issuing this notice to inform all submitters of information under all sections of TSCA that EPA will provide the herein identified contractor and its subcontractors with access to the CBI materials on a need-to-know basis only. All access to TSCA CBI under this contract, in accordance with EPA's
• Berrett & Associates, Inc., P.O. Box 2891, Sterling, VA 20167.
• CompTech Computer Technologies, Inc., 7777 Washington Village Drive, Suite 270 Dayton, OH 45459.
• Gridiron IT Solutions, LLC, 7777 Washington Village Drive, Suite 270 Dayton, OH 45459.
• IdentityNest, 115100 Weston Pkwy. #103, Cary, NC 27513.
• SCI Consulting Services, Inc., 4005 Taylor Drive, Fairfax, VA 21032; Shineteck, Inc., 5000 Ritter Road, Suite 202.
• Mechanicsburg, WV 17055.
• SkyePoint Decisions, Inc., 45240 Business Court, Suite 160, Dulles, VA 20166.
• SONA NETWORKS, LLC, 516 North Charles Street, Suite 311, Baltimore, MD 21201.
• TITANONEZERO, LLC, 7666 Fullertone Road, Unit G, Springfield, VA 22153.
• Woolpert, Inc., 4454 Idea Center Blvd., Dayton, OH 45402.
The personnel of the contractor and subcontractors will be required to sign nondisclosure agreements and will be briefed on specific security procedures for TSCA CBI.
Access to TSCA data, including CBI, will continue until April 24, 2029. If the contract is extended, this access will also continue for the duration of the extended contract without further notice.
Environmental Protection Agency (EPA).
Notice of availability.
The Environmental Protection Agency (EPA) is announcing the availability of draft Clean Water Act (CWA) national recommended ambient water quality criteria (AWQC) for the protection of human health for three per- and polyfluoroalkyl substances (PFAS)—perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), and perfluorobutane sulfonic acid (PFBS)—for a 60-day public comment period. The EPA has developed these draft PFAS national recommended human health criteria (HHC) to reflect the latest scientific information, consistent with current EPA guidance, methods, and longstanding practice. When PFAS national recommended HHC are finalized, they will provide information that States and Tribes may consider when adopting water quality standards.
Comments must be received on or before February 24, 2025.
You may send comments, identified by Docket ID No. EPA-HQ-OW-2024-0454, by any of the following methods:
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Brandi Echols, Office of Water, Health and Ecological Criteria Division (4304T), Environmental Protection Agency, 1301 Constitution Ave. NW, Washington, DC 20460; telephone number: (202) 566-2717; email address:
The EPA has established Docket ID No. EPA-HQ-OW-2024-0454 for three draft PFAS human health criteria: “Draft Human Health Ambient Water Quality Criteria: Perfluorooctanoic Acid (PFOA) and Related Salts;” “Draft Human Health Ambient Water Quality Criteria: Perfluorooctane Sulfonic Acid (PFOS) and Related Salts;” and “Draft Human Health Ambient Water Quality Criteria: Perfluorobutane Sulfonic Acid (PFBS) and Related Salts.” Publicly available docket materials are available either electronically through
The three draft human health criteria documents can be accessed on the EPA's website through the following link:
Submit your comments, identified by Docket ID No. EPA-HQ-OW-2024-0454, at
In preparation for submitting comments to the EPA on this action, please review the draft chemical-specific criteria documents the EPA is publishing in the public docket for this action under Docket ID No. EPA-HQ-OW-2024-0454. Provide the EPA with comments regarding scientific views related to the draft national recommended water quality criteria for protecting human health. Include any recommended references for data and other scientific information to be considered by the EPA. To ensure that the EPA can properly respond to comments, commenters should cite the section(s) or chemical(s) in the draft criteria documents to which each comment refers. Commenters should use a separate paragraph for each issue discussed and submit any references cited in their comments. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comment. Electronic files should avoid any form of encryption and should be free of any defects or viruses.
Per- and polyfluoroalkyl substances (PFAS) are a large class of thousands of synthetic chemicals that have been in use in the United States and around the world since the 1940s. The ability for PFAS to withstand heat and repel water and stains makes them useful in a wide variety of consumer, commercial, and industrial products, and in the manufacturing of other products and chemicals. Current scientific research and available evidence have shown the potential for harmful human health effects after being exposed to some PFAS, even at very low levels. PFAS' persistence and resistance to hydrolysis,
The EPA has developed draft recommended criteria for three PFAS: perfluorooctanoic acid (PFOA), perfluorooctane sulfonic acid (PFOS), and perfluorobutane sulfonic acid (PFBS). In the United States, most production of PFOA and PFOS, along with other long-chain PFAS, has been phased out and generally replaced by production of other PFAS. PFOA and its precursors have been used in flame repellents, cosmetics, paints, polishes, and processing aids used in the manufacture of nonstick coatings on cookware. PFOS has been used in a variety of products including surface treatments for soil and stain resistance, coating of paper, and in specialized applications such as firefighting foams. PFBS has been used as a replacement chemical for PFOS. Prior to its use as a PFOS replacement, PFBS had been produced as a byproduct and was present in consumer products as an impurity. Environmental releases of PFBS may result directly from the production and use of PFBS itself, production and use of PFBS-related substances for various applications, and/or from the degradation of PFBS precursors (
Section 304(a)(1) of the CWA requires the EPA to develop, publish, and, from time to time, revise criteria for protection of water quality and human health that accurately reflect the latest scientific knowledge. HHC developed under CWA section 304(a) are based solely on data and scientific judgments on the relationship between pollutant concentrations and human health effects. CWA section 304(a) criteria do not reflect consideration of economic impacts or the technological feasibility of meeting pollutant concentrations in ambient water. HHC are scientifically derived numeric concentrations of a pollutant that are expected to protect human health from the adverse effects of that pollutant in ambient water. HHC are designed to minimize the risk of adverse effects occurring to humans from chronic (lifetime) exposure to substances through drinking water and eating fish and shellfish from inland and nearshore waters.
Under the CWA and its implementing regulations, States and authorized Tribes are required to adopt water quality criteria to protect designated uses (
The EPA's national recommended water quality criteria are not regulations, and they do not substitute for the CWA or regulations. The EPA's recommended criteria do not impose legally binding requirements. States and authorized Tribes have the discretion to adopt, where appropriate, other scientifically defensible water quality criteria that differ from the EPA's CWA section 304(a) national recommendations.
The EPA is publishing draft national recommended HHC for PFOA, PFOS, and PFBS, based on the latest scientific knowledge and following the EPA's longstanding, peer reviewed methodology for deriving human health criteria. See
The EPA derived the draft HHC using the latest scientific information regarding human health toxicity and potential exposures via drinking water and eating fish and shellfish from inland and nearshore waters. Specifically, the EPA derived the draft HHC using final EPA toxicity values (reference doses, cancer slope factors) for each of the three PFAS, which have undergone external peer review and public comment. To account for human exposure to these three individual PFAS from the fish and shellfish consumption pathway, the EPA developed draft bioaccumulation factors for freshwater and estuarine fish and shellfish, according to longstanding Agency methods. Consistent with past practice, the EPA derived the draft HHC using 90th percentile per capita rates for fish and shellfish consumption and drinking water ingestion, and a mean body weight for adults, all based on national survey data. The EPA derived a relative source contribution for each PFAS to ensure that a person's total exposure to each chemical does not exceed its noncancer toxicity value (reference dose).
The draft national recommended HHC for the three PFAS are summarized in table 1. Each of the draft criteria documents transparently describes the human health toxicity and exposure information that the EPA used to derive the HHC. Each draft criteria document also provides an illustrative example to assist States and Tribes in the consideration of water quality standards for PFAS mixtures.
The EPA will consider the comments received, revise the criteria documents, and prepare final national recommended HHC for PFOA, PFOS, and PFBS that reflect EPA's consideration of those comments. The EPA will announce the availability of the final national recommended HHC for these three PFAS in the
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), Consolidated Air Rule for the Synthetic Organic Chemical Manufacturing Industry (EPA ICR Number 1854.14, OMB Control Number 2060-0443) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through December 31, 2024. Public comments were previously requested via the
Comments may be submitted on or before January 27, 2025.
Submit your comments, referencing Docket ID Number EPA-HQ-OAR-2023-0129, to EPA online using
The EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Submit written comments and recommendations to OMB for the proposed information collection within 30 days of publication of this notice to
Muntasir Ali, Sector Policies and Program Division (D243-05), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-0833; email address:
This is a request for approval of a new collection. 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.
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
Compliance with the CAR is a voluntary alternative. Sources may either continue to comply with existing applicable rules or may choose to comply with the consolidated rule. All existing sources must be in compliance with the requirements of the CAR and/or its referencing Subparts within three years of the effective date (
In general, all the NSPS, NESHAP, CAR, and maximum achievable control technology (MACT) standards require initial notifications, performance tests, and periodic reports by the owners/operators of the affected facilities. They are also required to maintain records of the occurrence and duration of any startup, shutdown, or malfunction in the operation of an affected facility or any period during which the monitoring system is inoperative. These notifications, reports, and records are essential in determining compliance, and are required of all affected facilities subject to these standards.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA or Agency) is announcing the availability of an updated guide for pesticide registrants to translate parts of their pesticide product labels into Spanish. The Spanish Translation Guide for Pesticide Labeling (STGPL) is written based on a universal form of Spanish to reach as many Spanish speakers as possible and provide example translations for language typically used in the health and safety sections of pesticide product labels.
This guide is effective December 26, 2024.
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2024-0521, is available online at
Susan Bartow Pesticide Re-evaluation Division (7508M), Office of Pesticide Programs, Office of Chemical Safety and Pollution Prevention, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; telephone number: (202) 566-2280 email address:
This action is directed to the general public and may be of specific interest to persons or entities that register or use pesticide products. Since a potentially broad range of entities may be interested in this action, the Agency has not attempted to describe all the specific entities that may be interested. If you have any questions regarding the applicability of this guidance to a particular entity or registration action, contact the person listed under
Pesticide registration activities are governed by the Federal Insecticide Fungicide and Rodenticide Act (FIFRA), 7 U.S.C. 136
EPA is announcing that an updated Spanish Translation Guide for Pesticide Labeling (STGPL) is available on the Agency web page to help guide pesticide registrants translate parts of their pesticide product labels into Spanish. EPA generally allows pesticide registrants to translate their product labels into any language so long as there is an EPA-approved English version of the label, and the translation is true and accurate.
For additional information about bilingual labeling for pesticide products, go to
EPA's Office of Pesticide Programs (OPP) originally released the STGPL to the public in 2019 in response to concerns voiced by farmworker advocates, who argued that having bilingual pesticide labeling is critical to the well-being and protection of pesticide applicators and farmworkers who may be exposed to pesticides, many of whom in the U.S. may not be English literate. This more recent version of the STGPL includes changes or updates following stakeholder feedback, a sampling of current labeling, and statements from the 2021 Label Review Manual (LRM) that had not previously been included. These updates are comprised of additional language examples for different sections, updates made based on the LRM, and entirely new sections inserted with examples.
The STGPL is a resource for pesticide registrants to use for the translation of the required human health and safety sections on pesticide labeling from English to Spanish. Only these sections are necessary for translation to ensure that workers have access to important information to protect themselves from pesticide exposure, and to get appropriate help if exposed to a pesticide product. While use of the specific language from the STGPL is not required, EPA encourages use of the language in the STGPL to ensure translations are “true and accurate” per the responsibility of the registrant.
The STGPL is intended to provide guidance to pesticide registrants and EPA personnel and decision makers. While the requirements in the statutes and Agency regulations are binding on EPA and the pesticide registrants, the STGPL does not impose binding requirements on the Agency or any outside parties. As guidance, EPA may depart from the guidance where circumstances warrant and without prior notice. Likewise, pesticide registrants may assert that the guidance is not appropriate generally or not applicable to a specific pesticide or situation.
EPA encourages the use of the language in the STGPL to ensure that translations of the English text are “true
Environmental Protection Agency (EPA).
Notice of proposed consent decree; request for public comment.
In accordance with the Clean Air Act, as amended (CAA or the Act), notice is given of a proposed consent decree in
Written comments on the proposed consent decree must be received by
Submit your comments, identified by Docket ID No. EPA-HQ-OGC-2024-0601, online at
Abi Vijayan, Air and Radiation Law Office, Office of General Counsel, U.S. Environmental Protection Agency; telephone (202) 564-3178; email address
The official public docket for this action (identified by Docket ID No. EPA-HQ-OGC-2024-0601) contains a copy of the proposed consent decree. The official public docket is available for public viewing at the Office of Environmental Information (OEI) Docket in the EPA Docket Center, EPA West, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744 and the telephone number for the OEI Docket is (202) 566-1752.
The electronic version of the public docket for this action contains a copy of the proposed consent decree and is available through
The proposed consent decree would establish a deadline for EPA to take action pursuant to CAA section 110(k) on a SIP revision, the “Heavy-Duty Inspection and Maintenance Regulation,” submitted by the State of California on December 14, 2022. The Heavy-Duty Inspection and Maintenance Regulation reduces emissions from on-road heavy-duty vehicles through periodic testing requirements, emissions monitoring techniques, and expanded enforcement strategies.
The proposed consent decree would require EPA to sign a notice of final rulemaking by July 31, 2025, and, within 15 business days of signature, to send the required signed notice of final rulemaking to the Office of
In accordance with section 113(g) of the CAA, for a period of thirty (30) days following the date of publication of this document, the Agency will accept written comments relating to the proposed consent decree. EPA or the Department of Justice may withdraw or withhold consent to the proposed consent decree if the comments disclose facts or considerations that indicate that such consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the Act.
Submit your comments, identified by Docket ID No. EPA-HQ-OGC-2024-0601, via
If you submit an electronic comment, EPA recommends that you include your name, mailing address, and an email address or other contact information in the body of your comment. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical
Use of the
Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments.
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), Environmental Justice Thriving Communities Grantmaking (TCGM) Program: Applications for Subawards, Public Outreach Information Collections, and Post-Award Reporting (EPA ICR Number 2795.01, OMB Control Number 2035-NEW) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a request for approval of a new collection. Public comments were previously requested via the
Comments may be submitted on or before January 27, 2025.
Submit your comments, referencing Docket ID Number EPA-HQ-OEJECR-2023-0531, to EPA online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Submit written comments and recommendations to OMB for the proposed information collection within 30 days of publication of this notice to
Aarti Iyer, Office of the Chief Financial Officer, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; email address:
This is a request for approval of a new collection. 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.
Public comments were previously requested via the
Export-Import Bank of the United States.
Notice of information collection; request for comment.
The Export-Import Bank of the United States (EXIM), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
Comments must be received on or before February 24, 2025 to be assured of consideration.
Comments may be submitted electronically on
To request additional information, please contact Edward Coppola (202) 565-3717. The form can be viewed at:
Export-Import Bank of the United States.
Submission for OMB review and comments request.
The Export-Import Bank of the United States (EXIM), as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
Comments must be received on or before February 24, 2025 to be assured of consideration.
Comments may be submitted electronically on
To request additional information, please contact Edward Coppola (202) 565-3717.
This is the application form for use by small U.S. businesses with limited export experience. Companies that are eligible to use the Express policy will need to answer approximately 32 questions and sign an acknowledgement of the certifications that appear on the reverse of the application form. This program does not provide discretionary credit authority to the U.S. exporter, and therefore the financial and credit information needs are minimized.
Thursday, January 9, 2025, at 10:00 a.m.
1050 First Street NE, Washington, DC and virtual (this meeting will be a hybrid meeting.)
This meeting will be closed to the public.
Compliance matters pursuant to 52 U.S.C. 30109.
Matters relating to internal personnel decisions, or internal rules and practices.
Investigatory records compiled for law enforcement purposes and production would disclose investigative techniques.
Information the premature disclosure of which would be likely to have a considerable adverse effect on the implementation of a proposed Commission action.
Matters concerning participation in civil actions or proceedings or arbitration.
Additional Information: This meeting will be cancelled if the Commission is not open due to a funding lapse.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments received are subject to public disclosure. In general, comments received will be made available without change and will not be modified to remove personal or business information including confidential, contact, or other identifying information. Comments should not include any information such as confidential information that would not be appropriate for public disclosure.
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington DC 20551-0001, not later than January 27, 2025.
1.
Board of Governors of the Federal Reserve System.
The companies listed in this notice have given notice under section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a) (HOLA) and Regulation LL (12 CFR part 238) to engage de novo, or to acquire or control voting securities or assets of a company, including the companies listed below, that engages either directly or through a subsidiary or other company, in a nonbanking activity that is listed in § 238.53 of Regulation LL (12 CFR 238.53). Unless otherwise noted, these activities will be conducted throughout the United States.
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments received are subject to public disclosure. In general, comments received will be made available without change and will not be modified to remove personal or business information including confidential, contact, or other identifying information. Comments should not include any information such as confidential information that would not be appropriate for public disclosure.
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue, NW, Washington DC 20551-0001, not later than January 27, 2025.
1.
Board of Governors of the Federal Reserve System.
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).
Notice.
This notice announces a solicitation for up to 10 additional eligible hospitals to participate in the Rural Community Hospital Demonstration program, to run through June 30, 2028.
To be assured consideration, applications must be received at the address provided below by 11:59 p.m. Eastern Standard Time (E.S.T.) on March 1, 2025.
Please email completed applications to the following email address:
Alexis Lilly at 410-786-3501 or by email at
Section 410A(a) of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Public Law (Pub. L. 108-173) required the Secretary to establish a demonstration program to test the feasibility and advisability of establishing cost-based reimbursement for “rural community hospitals” to furnish covered inpatient hospital services to Medicare beneficiaries. The demonstration pays rural community hospitals for such services under a cost-based methodology for Medicare payment purposes for covered inpatient hospital services furnished to Medicare beneficiaries. A rural community hospital, as defined in section 410A(f)(1) of Public Law 108-173, is a hospital that—
• Is located in a rural area (as defined in section 1886(d)(2)(D) of the Social Security Act (the Act)) or is treated as being so located pursuant to section 1886(d)(8)(E) of the Act;
• Has fewer than 51 acute care inpatient beds (excluding beds in a distinct psychiatric or rehabilitation unit of the hospital) as reported in its most recent cost report;
• Provides 24-hour emergency care services; and
• Is not designated or eligible for designation as a critical access hospital under section 1820 of the Act.
The demonstration is designed to test the feasibility and advisability of reasonable cost reimbursement for inpatient services to small rural hospitals. The demonstration is aimed at increasing the capability of the selected rural hospitals to meet the needs of their service areas.
We began the demonstration in 2004 for the initial 5-year period mandated under section 410A of Public Law 108-173. The demonstration has been extended three times, each time for an additional 5-year period—first, by sections 3123 and 10313 of the Affordable Care Act (Pub. L. 111-148); then by section 15003 of the 21st Century Cures Act (Pub. L. 114-255), and again by section 128 of the Consolidated Appropriations Act of 2021 (Pub. L. 116-260). The current 5-year period of participation, mandated by Public Law 116-260, ends June 30, 2028.
As part of our broader rural strategy initiative and recognizing the health care challenges facing rural communities, we are conducting a new solicitation to select 10 additional qualifying hospitals to participate in the Rural Community Hospital Demonstration approving such hospitals on a rolling basis beginning May 1, 2025 through June 30, 2028. Please note that, although previous agreements ran for 5-year periods, agreements under this provision will run only until June 30, 2028. Given the upcoming statutory termination of the model, we are aligning performance dates for the selected hospitals with the last performance day for the last currently participating hospital in this performance cycle.
Section 410A(a)(4) of Public Law 108-173 specified that the Secretary was to select for participation from among the applicants in rural areas of States that the Secretary identified as having low population densities. Therefore, we will only accept applications to this solicitation from hospitals in the 20 least densely populated States, according to data for 2020 from the U.S. Census Bureau. These States are: Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Vermont, and Wyoming. We will not accept applications from hospitals located in other States or in the US territories.
This notice announces the solicitation for up to 10 additional hospitals to participate in the Rural Community Hospital Demonstration Program. Hospitals that enter the demonstration under this solicitation will be able to participate from May 1, 2025 through June 30, 2028
Hospitals selected for the demonstration will be paid the reasonable costs of providing covered inpatient hospital services, with the exclusion of services furnished in a psychiatric or rehabilitation unit that is a distinct part of the hospital, using the following rules. For discharges occurring—
• In the first cost report period upon the hospital's participation in the demonstration, reasonable costs for covered inpatient services; and
• During the second or subsequent cost reporting period, the lesser of their reasonable costs or a target amount. The target amount in the second cost reporting period is defined as the reasonable costs of providing covered inpatient hospital services in the first cost reporting period, increased by the inpatient prospective payment system update factor (as defined in section 1886(b)(3)(B) of the Act) for that particular cost reporting period. The target amount in subsequent cost reporting periods is defined as the preceding cost reporting period's target amount increased by the hospital inpatient prospective payment system (IPPS) update factor for that particular cost reporting period.
Covered inpatient hospital services means inpatient hospital services (as defined in section 1861(b) of the Act) and includes extended care services furnished under an agreement under section 1883 of the Act (also known as “swing beds”).
Section 410A of Public Law 108-173 requires that, in conducting the demonstration program under this section, the Secretary shall ensure that the aggregate payments made by the
To participate in the demonstration, a hospital must be located in one of the identified States with low-population density and meet the criteria for a rural community hospital. Eligible hospitals that desire to participate in the demonstration must properly submit a timely application. Only applications that are received by the deadline specified in the
The information collection requirements contained in this notice are subject to the Paperwork Reduction Act of 1995. As discussed in section II.B. of this notice, a hospital must submit the required information listed on the cover sheet of the CMS Medicare Waiver Demonstration Application to receive consideration by the technical review panel. The burden associated is the time and effort necessary to complete the Medicare Waiver Application and submit the information to CMS and is associated with OMB control number 0938-0880.
The Administrator of the Centers for Medicare & Medicaid Services (CMS), Chiquita Brooks-LaSure, having reviewed and approved this document, authorizes Chyana Woodyard, who is the Federal Register Liaison, to electronically sign this document for purposes of publication in the
Office of Planning, Research, and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.
Request for public comments.
The Administration for Children and Families' (ACF) Office of Planning, Research, and Evaluation (OPRE) requests Office of Management and Budget (OMB) approval for an overarching generic clearance to collect data from programs delivered by Sexual Risk Avoidance Education (SRAE) grant recipients on behalf of the SRAE National Evaluation. The generic mechanism will allow ACF to rapidly respond to research and evaluation opportunities that would not otherwise be feasible under the timelines associated with the Paperwork Reduction Act of 1995. The opportunities may relate to innovative implementation strategies and program components in use by SRAE grant recipients as they arise, and in particular, for youth subpopulations served by grant recipients. The purpose of the data collections submitted under the generic will be to inform ACF programming by building evidence about what innovations work to improve programming and outcomes across the SRAE grant recipients and the youth they serve.
You can obtain copies of the proposed collection of information and submit comments by emailing
Under this generic clearance, information is meant to inform ACF activities and may be incorporated into documents or presentations that are made public such as through conference presentations, websites, or social media. The following are some examples of ways in which we may share information resulting from these data collections: technical assistance (TA) plans, webinars, presentations, infographics, issue briefs/reports, evaluation specific reports, or other documents relevant to the field, such as federal leadership and staff, grant recipients, local implementing agencies, researchers, and/or training/TA providers. In sharing findings, we will describe the study methods and limitations regarding generalizability and as a basis for policy.
Following standard OMB requirements, OPRE will submit an individual request for each specific data
Office of Planning, Research, and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.
Request for public comments.
The Office of Planning, Research, and Evaluation (OPRE) in the Administration for Children and Families (ACF) is conducting additional data collection activities for the Next Generation of Enhanced Employment Strategies Project (NextGen Project) that provides an in-depth look at participant experiences. This effort includes photo elicitation methods and will be referred to as the Well-Being Storytelling Exhibit. The study team will use photo elicitation and human-centered design methods to explore how NextGen participants, staff, and community members conceptualize well-being. This data will help the study team explore the factors that may enhance or explain impact study findings.
Comments due February 24, 2025. In compliance with the requirements of the Paperwork Reduction Act of 1995, ACF is soliciting public comment on the specific aspects of the information collection described above.
You can obtain copies of the proposed collection of information and submit comments by emailing
The study team is continuing primary data collection activities; while this request builds on those efforts, it is specific to new data collection activities that will create a Well-Being Storytelling Exhibit. First, the study team will use photo elicitation methods with NextGen participants and staff. Respondents will submit photos that show how they conceptualize well-being across several aspects of their lives, including economic security, physical and mental health, relationships, and safety. Then, the study team will use the photos as the basis for an interview with respondents. During the analysis phase, the study team will code photos and interviews using a codebook based on the NextGen programs' logic models, to make it easy to identify where participant- and staff-defined well-being overlaps (or does not) with the program's intended outcomes. After photo elicitation data collection is complete, the study team will create an exhibit that displays
Administration for Children and Families, HHS.
Notice; correction.
The Administration for Children and Families (ACF) published a document in the
Anne-Marie Twohie, Deputy Director, Office of Child Care, 330 C Street SW, Washington, DC 20201, (240) 935-1159.
In the
F.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration's (FDA), Center for Drug Evaluation and Research's (CDER), Office of Surveillance and Epidemiology (OSE) and Office of New Drugs (OND) has modified their organizational structure. The new organizational structure was approved by the Secretary of Health and Human Services on November 20, 2014.
Jennifer Wade, Acting Director, Division of Reorganizations and Delegations of Authority, Office of Budget, Office of Finance, Budget, and Acquisitions, Food and Drug Administration, 10903
Part D, Chapter D-B, (Food and Drug Administration), the Statement of Organization, Functions and Delegations of Authority for the Department of Health and Human Services (35 FR 3685, February 25, 1970, 60 FR 56606, November 9, 1995, 64 FR 36361, July 6, 1999, 72 FR 50112, August 30, 2007, 74 FR 41713, August 18, 2009, 76 FR 45270, July 28, 2011, and 84 FR 22854, May 20, 2019) is revised to reflect the Food and Drug Administration's reorganization of CDER's OSE and OND.
The purpose of this reorganization is to strengthen OSE and OND's ability to support FDA's mission and streamline its operations.
Within OSE, the newly elevated Office of Regulatory Science (ORS) will provide scientific and technical leadership in pharmacovigilance informatics, regulatory informatics systems, and science operations, including securing access to necessary data sources for drug product surveillance operations and overseeing applied research studies. While the newly elevated Office of Regulatory Operations (ORO) will manage strategic and operational projects associated with drug safety, particularly with drug safety reviews. The Executive Operations Staff (EOS) will liaise with stakeholders through the Center and the FDA as well as with external groups as appropriate to activities within OSE, coordinate executive operations of Office leadership, and support organizational development activities for OSE staff.
Within OND, this overall reorganization proposal addresses key priorities for the country as exhibited by their direct connection to multiple acts of Congress or declarations from the executive branch, including the Over-The-Counter (OTC) Monograph Reform, Biosimilars User Fee Act III (BsUFA III), Opioids Public Health Emergency Declaration, and the SUPPORT Act. Through this reorganization the FDA will be best organized and positions to address the critical workload, policy and oversight demands expected in the space of biosimilars, OTC drug products, rare disease drug development, and opioids.
The FDA's CDER has been restructured as follows:
DCDE ORGANIZATION. The CDER's OSE is headed by the Director, OSE and includes the following:
DCDG ORGANIZATION. The CDER's OND is headed by the Director, OND and includes the following organizational units:
Pending further delegation, directives, or orders by the Commissioner of Food and Drugs, all delegations and redelegations of authority made to officials and employees of affected organizational components will continue in them or their successors pending further redelegations, provided they are consistent with this reorganization.
This reorganization is reflected in FDA's Staff Manual Guide (SMG). Persons interested in seeing the complete Staff Manual Guide can find it on FDA's website at:
Food and Drug Administration, Department of Health and Human Services.
Notice of a modified system of records.
In accordance with the requirements of the Privacy Act of 1974, as amended, the Department of Health and Human Services (HHS) is modifying an existing departmentwide system of records, “Federal Advisory Committee Membership Files,” System No. 09-90-0059. The modifications include, among other things, adding records about any prospective guest speakers at Federal advisory committee meetings who disclose financial interests and professional relationships related to the matter they will be speaking on, and changing the name of the system of records to “Federal Advisory Committee/Subgroup Member, Subscriber/Registrant, and Guest Speaker Records.”
In accordance with 5 U.S.C. 552a(e)(4) and (11), the modified system of records is effective December 26, 2024. The new and revised routine uses will be effective January 27, 2025. Submit any comments by January 27, 2025.
The public should submit written comments, by mail or email, to Beth Kramer, HHS Privacy Act Officer, at 200 Independence Ave. SW, Suite 729H, Washington, DC 20201, or
General questions about the modified system of records should be submitted by mail, email, or telephone to Beth Kramer, HHS Privacy Act Officer, at 200 Independence Ave. SW, Suite 729H, Washington, DC 20201, or
This departmentwide system of records currently covers records retrieved by personal identifier about: (1) members and prospective members of HHS advisory committees established under the Federal Advisory Committee Act (FACA) and (2) members of the public who have requested to be included in mailing lists in order to receive publications or notices of information issued or posted by a particular HHS Federal advisory committee. The system of records notice (SORN) is being revised to add three additional categories of individuals and records,
A “guest speaker” is an individual whose professional background or other qualifications are checked and/or who is screened for possible conflicts of interest (financial interests and professional relationships) related to a matter the guest speaker wishes to speak on at an HHS Federal advisory committee meeting, so that the agency can decide whether to invite the individual to speak and can publicly acknowledge the speaker's relevant qualifications and interests at the start of the meeting, to enable the committee members to objectively evaluate the speaker's presentation. The term “guest speaker” as used in SORN 09-90-0059 does not include agency employees speaking at an HHS Federal advisory committee meeting in an official, governmental capacity and individual participants in the public hearing portion of an advisory committee meeting. A guest speaker is either a non-Federal government employee (non-FGE) or a special government employee (SGEs) acting in a non-official, non-governmental capacity.
Only certain HHS components, such as the Food and Drug Administration (FDA), screen guest speakers for potential conflicts of interest (all FDA advisory committees must conduct conflict screening of potential guest speakers). Such screening promotes transparency and openness in the advisory committee process and supports compliance with the requirement in 5 U.S.C. 1004(b)(3) and 41 CFR 102-3.105(g) to prevent committees' advice and recommendations from being influenced by special interests. For FDA, such screening also supports compliance with the requirement in FDA regulations at 21 CFR 14.60(b)(2) to document in meeting minutes the “names and affiliations or interests of public participants.”
Guest speakers who are screened for conflicts are not required to complete a Federal confidential financial disclosure form. The invitation extended to them to participate as a guest speaker in an HHS Federal advisory committee meeting may be conditioned on their voluntary disclosure of potential
Note that financial and other conflict disclosure and waiver records about FGEs and SGEs are covered in other SORNs, so are not covered in SORN 09-90-0059 (see instead OGE/GOVT-1 Executive Branch Personnel Public Financial Disclosure Reports and Other Name-Retrieved Ethics Program Records; OGE/GOVT-2 Executive Branch Confidential Financial Disclosure Reports; and 09-90-0008 Conflict of Interest Records).
HHS is making the following modifications to SORN 09-90-0059:
• The system of records name has been changed to “Federal Advisory Committee/Subgroup Member, Subscriber/Registrant, and Guest Speaker Records.”
• The System Location and System Manager sections have been updated to reflect current addresses and contact information for the components and officials responsible for the system of records, and to mention that the General Services Administration (GSA) maintains facadatabase.gov as a third-party service provider.
• In the Authorities section, the citation to the FACA statute has been updated to cite “5 U.S.C. 1001
• The Purpose(s) section now states purposes for which records about the three new categories of individuals (working group/subcommittee members, meeting registrants, and guest speakers) and one existing category (subscribers) are used; and also describes additional purposes for which records about the other existing category (committee members) are used,
• The Categories of Individuals and Categories of Records sections have been revised to add subcommittee/working group members, meeting registrants, and guest speakers and records about them, and to update the description of subscribers and records about them to mention that a subscriber may be included on a mailing “or emailing” list.
• The Routine Use(s) section has been revised to mention at the start that the routine uses are in addition to other disclosures authorized directly in the Privacy Act at 5 U.S.C. 552a(b); and to add nine new routine uses, revise four existing routine uses, and delete one routine use, as explained below:
○ Existing routine use 1, which formerly authorized disclosures in the Annual Report to the President and in administrative reports to the Office of Management and Budget (OMB) and GSA, has been revised to limit the routine use to disclosures made to GSA when HHS enters or uploads information about committee members or guest speakers in facadatabase.gov.
○ Routine use 2 is new; it authorizes HHS to publicly disclose on its websites and in facadatabase.gov the names of and limited information about the qualifications and financial disclosures of members of FACA committees, subcommittees, and working groups, and guest speakers, limited to information that would be required to be disclosed to a requester under the Freedom of Information Act (FOIA).
○ Existing routine use 3 (formerly listed second), which authorizes records indicating a violation or potential violation of law to be referred to the responsible investigatory or enforcement agency, has been revised to add “state, local, Tribal, and other” to the description of recipient agencies; to permit “relevant” records to be disclosed “when HHS becomes aware of evidence of” a potential violation of law; and to explain that, in most cases, the disclosures would be made after first referring the information to another HHS component, such as the HHS Office of the General Counsel or the HHS Office of the Inspector General, to determine if the information is appropriate to refer to an outside agency, and that if that component made the referral, the equivalent routine use published in that component's SORN would apply to the disclosure.
○ The routine use that was formerly listed third has been deleted. It authorized disclosures to the Department of Justice (DOJ) to obtain its advice regarding whether particular records are required to be disclosed under FOIA. The routine use is unnecessary, because such advice is provided by the HHS Office of the General Counsel, and any disclosures that need to be made to DOJ in connection with FOIA litigation are authorized in a separate, litigation-related routine use.
○ Existing routine use 4, which authorizes disclosures to DOJ in litigation, has been revised to include “other adjudicative proceedings;” to add “a court or other adjudicative body” as disclosure recipients; to require that the information disclosed be “relevant and necessary” to the proceedings; and to remove the requirement that disclosures be compatible with the purpose for which the records were collected, because such wording repeats part of the definition of a routine use.
○ Existing routine use 5, which authorizes disclosures about an individual in responding to an inquiry from a congressional office made at the individual's request, has been revised to require that the congressional inquiry and the individual's request to the congressional office be “written.”
○ Existing routine use 6, which was added in 1994, is included without change.
○ Routine uses 7 through 14 are new. They authorize disclosures to Federal agencies and contractors engaged by HHS to assist with matters related to this system of records (routine use 7); disclosures to the committee chairperson or vice chairperson for committee work purposes (routine use 8); disclosures to the Executive Office of the President, OMB, or other agencies for coordination on advisory committee member selection (routine use 9); disclosures to any source from which information is needed by HHS to support an HHS decision involving the individual (routine use 10); disclosures to aid another government agency's decision on a hiring, licensing, contracting, security clearance, or other matter involving the individual (routine use 11); disclosures to the National Archives and Records Administration (NARA) or other relevant Federal agencies in records management inspections (routine use 12); disclosures to Federal agencies and entities for program evaluation or assessment purposes (routine use 13); and disclosures to the Department of Homeland Security (DHS) for cybersecurity monitoring purposes (routine use 14).
○ Existing routine uses 15 and 16, which were added in 2018, are included without change.
• The Storage section has been updated to remove references to “index cards” and “magnetic tape.”
• The Retrieval section has been revised to remove references to “an alphabetical index,” “a cross index,” and “individually identifiable computer identification codes,” and to simply state that records are retrieved by the subject individual's name, with the exception of records about subscribers, which are retrieved by the subscriber's name or email address.
• The Retention section, which previously stated that retention varies from 1 year to permanent depending on the type of record, now cites the applicable NARA-approved disposition schedules and itemizes the record types and disposition periods applicable to each.
• The Safeguards section has been updated to remove a reference to “locked magnetic tape libraries” and to list current safeguards used to protect records stored in electronic media, instead of “lockword-password computer access systems.”
• The sections specifying procedures for making access, amendment, and notification requests have been revised to specify the required contents for each type of request, including identity verification information that must be provided (the existing SORN specified the required contents of amendment requests only, and merely stated that identity was required to be verified in accordance with Department's Privacy Act regulations).
Because some of these changes are significant, a report on the modified system of records has been sent to OMB and the Congressional committees that oversee privacy, in accordance with 5 U.S.C. 552a(r).
Federal Advisory Committee/Subgroup Member, Subscriber/Registrant, and Guest Speaker Records, 09-90-0059.
Unclassified.
The addresses of the agency components responsible for the system of records are listed below. At HHS, Federal advisory committee records are not centralized at the Department level or Operating Division level; instead, each committee's Designated Federal Officer (DFO) maintains the records pertaining to that committee. (Note that the manner of maintenance may vary. Records pertaining to a particular committee will constitute Privacy Act records only if the DFO maintains them in a paper-based or electronic recordkeeping system from which the records are retrieved by the subject individuals' names or other personal identifiers.) For purposes of simplification, one address is provided for each HHS Operating Division (OpDiv).
GSA, as a third-party service provider, maintains the web-based facadatabase.gov system that HHS uses to make certain records available to Congress and the public as required to inform them of the existence and activities of HHS Federal advisory committees. GSA's address is: U.S. General Services Administration, Committee Management Secretariat, 1800 F St. NW, Washington, DC 20405.
Each committee's Committee Management Officer (CMO) is responsible for the records in this system of records that pertain to that committee, including records about any subcommittees, working groups, or other subgroups formed under the committee. Contact information for the current CMO for each active and recently (
Federal Advisory Committee Act (FACA), 5 U.S.C. 1001
Records in this system of records are used in the administration and management of Federal advisory committees (including any subgroups of same) in the Department, including for these specific purposes:
• Records about members or prospective members of a Federal advisory committee or subgroup are used (1) in the preparation of reports; quarterly alphabetical listings of past, present, and recommended members; lists of vacancies, acceptances, and separations; and documentation of nominations; (2) to identify the most qualified applicants and ensure that the makeup of the committee, subcommittee, or working group is sufficiently balanced and diverse (see 41 CFR part 102-3.30(c)); (3) to ensure compliance with ethics and conflict-of-interest requirements; and (4) to communicate with the members about committee or subgroup activities.
• Records about guest speakers are used to determine whether the speakers will be invited to give a presentation on the matter in question and to inform the committee members of the speakers'
• Records about subscribers (members of the public who subscribe to receive publications or other information issued or posted by a particular Federal advisory committee) are used for the purpose of maintaining the subscriber list (
• Records about registrants (members of the public who register as attendees for in-person and web-based Federal advisory committee meetings) are used for the purpose of maintaining the meeting registration lists and may also be used to indicate if a particular registrant needs a sign language interpreter, wheelchair access, or other accommodation to participate in a meeting.
The records are about these categories of individuals:
•
• Subcommittee and working group members (some may also be committee members, covered in the preceding category).
•
•
•
The categories of records are:
• Records about members and prospective members of HHS Federal advisory committees. These records consist of membership records, accountability records, and management records, containing name and other data such as the following about each member or prospective member: title, gender, place and date of birth, contact information (
• Records about members or prospective members of HHS Federal advisory committee working groups or subcommittees (subgroups). These records are similar to, but not co-extensive with, records about members and prospective members of committees, described above (for example, the OGE Form 450 isn't completed by subgroup members and prospective members unless they are also committee members or prospective members).
•
•
•
All information about a subscriber or meeting registrant is obtained directly from that individual. The vast majority of information about a committee member or prospective member, or a subcommittee or working group member or prospective member, is obtained directly from that individual, or from the individual's administrative assistant or organization contact; other information in the form of references and recommendations is obtained from other private individuals, program personnel, biographical reference books, private organizations, former employers, regional offices of HHS, Members of Congress, and other government sources. Information about a prospective guest speaker is provided directly by the individual or is derived or obtained from materials supplied by the individual, from observation and analysis made by agency staff, from correspondence between the agency and the individual, and from any other relevant source necessary to conduct a complete a review of the individual's disclosed qualifications and/or interests.
In addition to other disclosures which are authorized directly in the Privacy Act statute at 5 U.S.C. 552a(b), information about a subject individual may be disclosed from this system of records to non-HHS officers and employees, without the subject
1. Records about committee members and guest speakers may be disclosed to GSA when HHS enters and uploads committee information and records in GSA's facadatabase.gov system, for the purpose of keeping Congress and the public informed of the existence, membership, and activities of advisory committees as authorized by the FACA at 5 U.S.C. 1002(b)(5). Committee member names are also disclosed in administrative reports to the President and OMB.
2. HHS may publicly disclose the names of and limited information about qualifications (
3. Relevant records may be disclosed to appropriate Federal, State, local, or Tribal agencies; international agencies; or foreign governments responsible for investigating, prosecuting, enforcing, or implementing statutes, rules, regulations, or orders, when HHS becomes aware of evidence of a potential violation of civil or criminal law. In most cases, these disclosures will be made after first referring the information to another HHS component, such as the HHS Office of the General Counsel or the HHS Office of the Inspector General, to determine if the information is appropriate to refer to an outside law enforcement or other appropriate agency; if that component makes the disclosure to an outside agency, the equivalent routine use published in that component's SORN would apply instead of this routine use.
4. Records may be disclosed to DOJ or to a court or other adjudicative body in litigation or other adjudicative proceedings when HHS or any of its components, or any employee of HHS in his or her official capacity, or any employee of HHS in his or her individual capacity where the DOJ or HHS has agreed to represent the employee, or the United States, is a party to the proceedings or has an interest in the proceedings and, by careful review, HHS determines that the records are both relevant and necessary to the proceedings.
5. Disclosure may be made to a congressional office from the record of an individual in response to a written inquiry from the congressional office made at the written request of that individual.
6. Records may be disclosed to student volunteers, individuals working under a personal services contract, and other individuals performing functions for the Department but technically not having the status of agency employees, if they need to access the records in order to perform their assigned agency functions.
7. Disclosures may be made to Federal agencies and HHS contractors that have been engaged by HHS to assist in accomplishment of an HHS function relating to the purposes of this system of records (including ancillary functions, such as compiling reports and evaluating program effectiveness and contractor performance) and that have a need to have access to the records in order to assist HHS in performing the activity. Any contractor will be required to comply with the requirements of the Privacy Act.
8. Records may be disclosed to the Chairperson or Vice Chairperson of the relevant advisory committee to use for purposes such as determining membership on subcommittees, assigning tasks to members, and distributing information to members for meeting or other committee work purposes.
9. Records may be disclosed to the Executive Office of the President, the Office of Management and Budget, or other agencies for coordination on advisory committee member selection.
10. Records about a member or prospective member or guest speaker may be disclosed to any source from which additional information is requested by HHS (to the extent necessary to identify the individual, inform the source of the purpose of the request, and identify the type of information requested) when necessary to obtain information relevant to an HHS decision involving the individual.
11. Records may be disclosed to a Federal, foreign, State, local, Tribal, or other public authority of the fact that this system of records contains information relevant to that entity's decision regarding hiring or retention of an employee, retention of a security clearance, letting of a contract, or issuance or retention of a license, grant or other benefit, so that it may then make a request supported by the written consent of the individual for further information if it so chooses. HHS will not make an initial disclosure unless the information has been determined to be sufficiently reliable to support a referral to another office within the agency or to another Federal agency for criminal, civil, administrative, personnel, or regulatory action.
12. HHS may disclose records from this system of records to NARA, GSA, or other relevant Federal agencies in connection with records management inspections conducted under the authority of 44 U.S.C. 2904 and 2906.
13. Records may be disclosed to Federal agencies and entities (
14. Records may be disclosed to DHS if captured in an intrusion detection system used by HHS and DHS pursuant to a DHS cybersecurity program that monitors internet traffic to and from Federal government computer networks to prevent a variety of types of cybersecurity incidents.
15. Disclosures may be made to appropriate agencies, entities, and persons when (1) HHS suspects or has confirmed that there has been a breach of the system of records; (2) HHS has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, HHS (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with HHS efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
16. Disclosure may be made to another Federal agency or Federal entity, when HHS determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
Records are stored in hard-copy files and on electronic media.
Records are retrieved by the subject individual's name, with the exception of
Records about individuals who serve as members of Federal advisory committees and subgroups are retained and disposed of in accordance with NARA General Records Schedule (GRS) 6.2, Items 010, 040, and 050:
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•
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Records about prospective members of Federal advisory committees are retained and disposed of in accordance with GRS 6.2, Item 050 (see above).
Records about guest speakers are disposed of in accordance with GRS 6.2, Item 040 (see above).
Records about meeting registrants and subscribers are retained and disposed of in accordance with GRS 6.5, Item 020, which authorizes sign-up forms and distribution lists for distributing information such as publications and data produced by the agency to be deleted when superseded or obsolete or when the customer requests the agency to remove the records.
Records are protected from unauthorized access through appropriate administrative, physical, and technical safeguards. Safeguards conform to the HHS Information Security and Privacy Program,
An individual seeking access to records about him or her in this system of records must submit a written access request to the relevant System Manager, at the address indicated in the “System Manager(s)” section, above, in accordance with the Department's Privacy Act implementation regulations in 45 CFR. The request must contain the individual's full name and address, and, for identity verification purposes, signature, and date and place of birth. In addition, to verify the individual's identity, the individual must provide either a notarized request or a written certification that the individual is who he or she claims to be and understands that the knowing and willful request for acquisition of a record pertaining to an individual under false pretenses is a criminal offense under the Privacy Act, subject to a fine of up to $5,000.
An individual seeking to amend a record about him or her in this system of records must submit a written amendment request to the relevant System Manager, at the address indicated in the “System Manager(s)” section, above, in accordance with the Department's Privacy Act implementation regulations in 45 CFR. The request must contain the same information required for an access request, and must reasonably identify the record, specify the information contested, state the corrective action sought, provide the reasons for the amendment, and include any supporting justification or documentation. The individual must verify his or her identity in the same manner required for an access request. The right to contest records is limited to information that is factually inaccurate, incomplete, irrelevant, or untimely (obsolete).
An individual who wishes to know if this system of records contains records about him or her must submit a written notification request to the relevant System Manager at the address indicated in the “System Manager(s)” section, above, in accordance with the Department's Privacy Act implementation regulations in 45 CFR. The request must contain the same information required for an access request, and the individual must verify his or her identity in the same manner required for an access request.
None.
47 FR 45514 (October 13, 1982); 59 FR 55845 (November 9, 1994); 83 FR 6591 (February 14, 2018).
Food and Drug Administration, HHS.
Notice; request for information; extension of comment period.
The Food and Drug Administration (FDA or we) is extending the comment period for the request for information, published in the
FDA is extending the comment period announced in the notice for request for information published November 8, 2024 (89 FR 88785).
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Lauren Ferguson Baham, Office of Policy, Regulations, and Information, Human Foods Program, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2371.
In the
• There are many different types of establishment listing and certification procedures for establishments that produce human food products. Please share your experience with other countries' establishment listing, certification, and registration requirements.
• FDA requires those on export lists to reapply regularly if they wish to remain listed. Do reapplicants experience any challenges with the renewal process? If you have experienced challenges, how were those challenges resolved?
• For those included on export lists, please describe any challenges you have experienced with exporting human food products included on the export lists.
• FDA is authorized to collect up to $175 per certification for each company and its human food products that FDA certifies through inclusion on an export list. For those that would be charged a fee, do you have any specific suggestions about how FDA should approach the implementation of fees? Please provide details relating to any suggestions you might have (89 FR 88785).
The docket for public comments was scheduled to close January 7, 2025.
We have received several requests to extend the comment period. In general, the requests explain that FDA's consideration to charge fees for its export list services to offset costs is a significant change from current Agency practice that will take firms time to fully evaluate the impacts of the proposed changes and to provide substantive comment that details firms' experiences and challenges with export lists. The requests also note that the comment period overlaps with the holiday season.
We have considered the requests and are extending the comment period until February 21, 2025. We believe that the extension will allow adequate time for interested persons to submit comments.
Office of the Secretary, HHS.
Notice.
In compliance with the requirement of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, is publishing the following summary of a proposed collection for public comment.
Comments on the ICR must be received on or before February 24, 2025.
Submit your comments to
When submitting comments or requesting information, please include the document identifier 0937-New-60D and project title for reference, to Sherrette A. Funn, email:
Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
OMB No. 0937-NEW—Office of Population Affairs.
The Office of Minority Health (OMH) published a notice in the
Telephone: (240) 453-6816; Email:
The Office of Minority Health (OMH) published a notice in the
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications and contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Anna Guido, Clearance Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) Ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Anna Guido, Clearance Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
The ICDBG program regulations are at 24 CFR part 1003. The ICDBG program requires eligible applicants to submit information to enable HUD to select the best projects for funding during annual competitions. Additionally, the information submitted is essential for HUD in monitoring grants to ensure that grantees are complying with applicable statutes and regulations and implementing activities as approved.
ICDBG recipients are required to submit annually a Federal Financial Report (SF-425) that describes the use of grant funds drawn from the recipient's line of credit. The reports are used to monitor cash transfers to the recipients and obtain expenditure data from the recipients. (2 CFR 200.327)
The regulations at 24 CFR part 200 require that grantees and sub-grantees take all necessary affirmative steps to assure that minority firms, women's business enterprises, and labor surplus area firms are used when possible. Consistent with these regulations, 24 CFR 1003.506(b) requires that ICDBG grantees report on these activities on an annual basis, with Contract and Subcontract Activity Report being due to HUD on October 10 of each year (HUD-2516).
The regulations at 24 CFR 1003.506 instruct recipients to submit to HUD an Annual Status and Evaluation Report (ASER) that describes the progress made in completing approved activities with a listing of work to be completed; a breakdown of funds expended; and when the project is completed, a program evaluation expressing the effectiveness of the project in meeting community development needs. The ASER is due by November 15 each year and at grant closeout. The information collected will allow HUD to accurately audit the program.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) Ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Anna Guido, Clearance Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email
Copies of available documents submitted to OMB may be obtained from Ms. Guido.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) Ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Office of Public and Indian Housing, HUD.
Notice of a modified system of records.
The Enterprise Income Verification System (EIV) is used to verify program participants/tenants, reported income, identify unreported income sources and/or amounts and identify substantial annual income discrepancies amongst households that receive HUD provided rental assistance through programs administered by HUD's Office of Public and Indian Housing and Office of Housing Multifamily program. Under the Privacy Act of 1974, the Department of Housing and Urban Development, the Office of Public and Indian Housing proposes to update the system of records titled EIV. The EIV System has been modified replacing the Income Discrepancy Report with the Income Validation Tool built on the MicroStrategy platform.
Comments will be accepted on or before January 27, 2025. This proposed action will be effective on the date following the end of the comment period unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number or by one of the following methods:
LaDonne White; 451 Seventh Street SW, Room 10139; Washington, DC 20410-0001; telephone number (202) 708-3054 (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
The EIV System is used to verify program participants/tenants, reported income, identify unreported income sources and/or amounts and identify substantial annual income discrepancies amongst households that receive HUD provided rental assistance through programs administered by HUD's Office of Public and Indian Housing and Office of Housing's Multifamily Housing Programs. The EIV System has been modified replacing the Income Discrepancy Report with the Income Validation Tool built on the MicroStrategy platform. This change was necessary to address OIG Audit #2014-FO-0004, Compliance with the Improper Payments and Elimination Recovery Act of 2010, findings and recommendations related to improper payments and the identification of tenant unreported and/or underreported income during mandatory reexaminations of family composition and income. The intended effect of this change is to eliminate false positives within EIV's Income Discrepancy Report which was estimated at approximately 50% of all income discrepancies, and to allow HUD to make better decisions for determination of rental subsidy and the degree of improper payments in HUD rental subsidy programs. Further, the IVT provides projections of discrepant income enabling users to analyze in detail, income, wage, and social security benefit information for a specific household and/or household member(s), detailing all captured income sources and dates of employment.
Enterprise Income Verification (EIV), HUD/PIH-05.
Unclassified.
Records are maintained at the NASA Stennis Space Center, John C. Stennis Space Center, MS 39529-0001.
Shalene Domingo, System Owner, Office of Public and Indian Housing, 550 12th Street SW, First Floor, Washington, DC 20410-10001.
Section 453(j) of the Social Security Act as amended, now codified at 42 U.S.C. 653(j), section 904 of the Stewart B. McKinney Homeless Assistance Amendments Act of 1988, as amended, now codified at 42 U.S.C. 3544, The Omnibus Budget Reconciliation Act of 1993 (Budget Reconciliation Act) 6103(l)(7) of title 26 of the United States Code (Internal Revenue Code).
The EIV System is a web-based Upfront income verification System that allows authorized Public Housing Agencies, Multifamily Housing Owners/Agents, and Contract Administrators to verify program participants/tenants, reported income, identify unreported income sources and/or amounts and identify substantial annual income discrepancies amongst households that receive HUD provided rental assistance through programs administered by HUD's Office of Public and Indian Housing and Office of Housing's Multifamily Housing Programs.
Families participating in housing programs administered by HUD's Office of Public and Indian Housing (current and former participants), including Tribally Designated Housing Entities, participating in the public housing program, section 8 HCV program, Disaster Housing Assistance Programs and families currently participating in the Office of Housing, Multifamily Housing Division programs.
Records consist of unit address (subsidized property address), family composition (names, dates of birth and SSNs of Household Members), financial data such as tenant-reported income to PHAs, O/As, and C/As, and wage, unemployment compensation, SS and SSI benefit data obtained from Department of Health and Human Services (HHS) and Social Security Administration (SSA).
Inventory Management System/Public Housing Information Center, Tenant Rental Assistance Certification System (IMS/PIC, TRACS), Social Security Administration and the Department of Health and Human Services.
(A) To a congressional office from the record of an individual, in response to an inquiry from the congressional office made at the request of that individual.
(B) To appropriate Federal, State, and local governments, or persons, pursuant to a showing of compelling circumstances affecting the health or safety or vital interest of an individual or data subject, including assisting such agencies or organizations in preventing the exposure to or transmission of a communicable or quarantinable disease, or to combat other significant public health threats, if upon such disclosure appropriate notice was transmitted to the last known address of such individual to identify the health threat or risk.
(C) To Federal, State, and local agencies, their employees, and agents for the purpose of conducting computer matching programs as regulated by the Privacy Act of 1974, as amended (5 U.S.C. 552a).
(D) To Federal agencies, non-Federal entities, their employees, and agents (including contractors, their agents or employees; employees or contractors of the agents or designated agents); or contractors, their employees or agents with whom HUD has a contract, service agreement, grant, cooperative agreement, or computer matching agreement for the purpose of: (1) Detection, prevention, and recovery of improper payments; (2) detection and prevention of fraud, waste, and abuse in major Federal programs administered by a Federal agency or non-Federal entity; (3) detection of fraud, waste, and abuse by individuals in their operations and programs, but only to the extent that the information shared is necessary and relevant to verify pre-award and prepayment requirements prior to the release of Federal funds, prevent and recover improper payments for services rendered under programs of HUD or of those Federal agencies and non-Federal entities to which HUD provides information under this routine use.
(E) To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the Federal Government when necessary to accomplish an agency function related to this system of records. Also, to a recipient who has provided the agency with advance, adequate written assurance that the record provided from the system of records will be used solely for statistical research or reporting purposes. Records under this condition will be disclosed or transferred in a form that does not identify an individual.
(F) To contractors, grantees, experts, consultants and their agents, or others performing or working under a contract, service, grant, or cooperative agreement with HUD, when necessary to accomplish an agency function related to a system of records. Disclosure requirements are limited to only those data elements considered relevant to accomplishing an agency function. Individuals provided information under these routine use conditions are subject to Privacy Act requirements and disclosure limitations imposed on the Department.
(G) To contractors, experts and consultants with whom HUD has a contract, service agreement, or other assignment of the Department, when necessary to utilize relevant data for the purpose of testing new technology and systems designed to enhance program operations and performance.
(H) To appropriate agencies, entities, and persons when (1) HUD suspects or has confirmed that there has been a breach of the system of records, (2) HUD has determined that as a result of the suspected or confirmed breach there is a risk of harm to individuals, [the agency] (including its information systems, programs, and operations), the Federal Government, or national security; and (3) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with the HUD's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm. To another Federal agency or Federal entity, when HUD determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
(I) To appropriate Federal, State, local, Tribal, or governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the
(J) To a court, magistrate, administrative tribunal, or arbitrator while presenting evidence, including disclosures to opposing counsel or witnesses during civil discovery, litigation, mediation, or settlement negotiations; or in connection with criminal law proceedings; or in response to a subpoena or to a prosecution request when such records to be released are specifically approved by a court provided order.
(K) To appropriate Federal, State, local, Tribal, or governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the violations of, or for enforcing or implementing, a statute, rule, regulation, order, or license, where HUD determines that the information would assist in the enforcement of civil or criminal laws.
(L) To third parties during a law enforcement investigation to the extent necessary to obtain information pertinent to the investigation, provided disclosure is appropriate to the proper performance of the official duties of the officer making the disclosure.
(M) To another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency that maintains the record, specifying the portion desired and the law enforcement activity for which the record is sought.
(N) To any component of the Department of Justice or other Federal agency conducting litigation or in proceedings before any court, adjudicative, or administrative body, when HUD determines that the use of such records is relevant and necessary to the litigation and when any of the following is a party to the litigation or have an interest in such litigation: (1) HUD, or any component thereof; or (2) any HUD employee in his or her official capacity; or (3) any HUD employee in his or her individual capacity where the Department of Justice or agency conducting the litigation has agreed to represent the employee; or (4) the United States, or any agency thereof, where HUD determines that litigation is likely to affect HUD or any of its components.
Records are maintained in paper and electronic storage media.
Records are retrieved by Name, Date of Birth, and/or SSN.
Destroy one year after System of Records is placed on inactive list.
EIV Physical controls include, key cards, security guards and Identification badges. HUD will secure downloaded reports on HUD secure SharePoint site. Public Housing Agencies, Multifamily Housing Owners/Agents, and Contract Administrators must secure downloaded data to a secure/locked space and/or cabinet. Computer terminals are secured in controlled areas which are locked when unoccupied. Access to automated records is limited to authorized personnel who must use a password to gain access to the system. Administrative controls include methods to ensure only authorized personnel access to PII. Each EIV user must first have access to HUD' Web Access Secure Systems. Each EIV User must be re-certified to use the EIV System every April and October of the calendar year. EIV Technical controls include, Encryption of Data at Rest, Firewall, Role-based Access Controls, VPN, Encryption of Data in Transit, User ID and Password, and PIV Card.
Individuals requesting records of themselves should address written inquiries to the Department of Housing Urban and Development 451 7th Street SW, Washington, DC 20410-0001. For verification, individuals should provide their full name, current address, and telephone number. In addition, the requester must provide either a notarized statement or an unsworn declaration made under 24 CFR 16.4.
The HUD rule for contesting the content of any record pertaining to the individual by the individual concerned is published in 24 CFR 16.8 or may be obtained from the system manager.
Individuals requesting notification of records of themselves should address written inquiries to the Department of Housing Urban Development, 451 7th Street SW, Washington, DC 20410-0001. For verification purposes, individuals should provide their full name, office or organization where assigned, if applicable, and current address and telephone number. In addition, the requester must provide either a notarized statement or an unsworn declaration made under 24 CFR 16.4.
None.
87 FR 50635, August 17, 2022.
Office of the Secretary, U.S. Department of Housing and Urban Development (HUD).
Notice and request for public comment.
In accordance with the Build America, Buy America Act (BABA), this notice advises that HUD is proposing to issue a temporary, limited non-availability partial waiver of the manufactured product requirements in BABA included in the Infrastructure Investment and Jobs Act (IIJA) for domestically assembled solar modules used in Federal financial assistance (FFA) awarded for infrastructure projects. This waiver covers multiple projects that HUD anticipates will involve the installation of solar modules with the intent of addressing multiple project specific non-availability waivers into one document to reduce paperwork and support administrative efficiency. The narrowly tailored BABA waiver proposed in this notice would support the establishment of a domestic solar supply chain, increase benefits for
HUD published this proposed waiver for public comment on its website on December 13, 2024. Pursuant to section 70914(c)(2) of BABA, HUD is soliciting comments from the public on this proposed waiver for a period of fifteen days from the date published on HUD's web page in this instance. Comments on the proposed waiver set out in this document are due on or before December 28, 2024. HUD will consider comments received in response to this Notice and announce its determination with respect to the adoption of this notice, including any changes that may be made in response to comments through a subsequent Notice. The proposed duration of the waiver would be from the effective date (“Effective Date”) of the proposed waiver until December 31, 2025. The waiver applies to solar modules with Final Assembly in the United States (as defined below in the “Proposed Waiver” section).
Interested persons are invited to submit comments on this notice. Copies of all comments submitted are available for inspection and downloading at
To receive consideration as public comments, comments must be submitted through one of the two methods specified below. All submissions must refer to the above docket number and title. Commenters are encouraged to identify the number of the specific question or questions to which they are responding. Responses should include the name(s) of the person(s) or organization(s) filing the comment; however, because any responses received by HUD will be publicly available, responses should not include any personally identifiable information or confidential commercial information. Business confidential information can be submitted to
Faith Rogers, Department of Housing and Urban Development, 451 Seventh Street SW, Room 10126, Washington, DC 20410-5000, at (202) 402-7082 (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 and communication disabilities. To learn more about how to make an accessible telephone call, please visit
The Build America, Buy America Act (“BABA” or “the Act”) was enacted on November 15, 2021, as part of the Infrastructure Investment and Jobs Act (“IIJA”) (Pub. L. 117-58). The Act establishes a domestic content procurement preference, the BAP, for Federal infrastructure programs. Section 70914(a) of the Act establishes that no later than 180 days after the date of enactment, HUD must ensure that none of the funds made available for infrastructure projects may be obligated by the Department unless it has taken steps to ensure that the iron, steel, manufactured products, and construction materials used in a project are produced in the United States. In section 70912, the Act further defines a project to include “the construction, alteration, maintenance, or repair of infrastructure in the United States” and includes within the definition of infrastructure those items traditionally included along with buildings and real property. Thus, starting May 14, 2022, new awards of HUD FFA, and any of those funds newly obligated by HUD then obligated by the grantee for infrastructure projects, are covered under BABA provisions of the Act, 41 U.S.C. 8301 note, unless covered by a waiver.
Solar modules are manufactured products. Per sections 70912(6)(A) and (B) of the Act, manufactured products are considered to be produced in the United States if (i) the manufactured product was manufactured in the United States; and (ii) the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation.
The IIJA and the Inflation Reduction Act (Pub. L. 117-169, Aug. 16, 2022) provided historic investments for federal infrastructure, including $1 billion in funding for green retrofits. These developments in addition to HUD's base funding, provide an opportunity for significant expansion of domestic manufacturing capacity for products. Since the enactment of the Act, HUD has worked diligently to develop a plan to fully implement the BAP across its FFA programs. HUD understands that advancing Made in America objectives is a continuous effort and believes setting forth a transparent schedule of future implementation for FFA programs provides recipients, stakeholders, and industry partners with the time and notice necessary to efficiently and effectively implement the BAP. HUD continues its efforts to implement the Act in HUD's FFA programs consistent
In order to ensure orderly implementation of the BAP across HUD's FFA programs, HUD has provided public interest, general applicability waivers in order to implement the BAP in phases in connection with the application of the BAP in such programs and announced a corresponding implementation plan. As part of those efforts, HUD has published two general applicability, public interest waivers covering Exigent Circumstances and De Minimis and Small Grants; a general applicability, public interest waiver applied to Pacific Island Territory Recipients of HUD FFA; and waivers that remain applicable to funds obligated by HUD during the relevant periods of applicability, all of which can be found at
Under section 70914(b), HUD and other Federal agencies have authority to waive the application of a domestic content procurement preference when (1) application of the preference would be contrary to the public interest, (2) the materials and products subject to the preference are not produced in the United States at a sufficient and reasonably available quantity or satisfactory quality, or (3) inclusion of domestically produced materials and products would increase the cost of the overall project by more than 25 percent. All waivers must have a written explanation for the proposed determination; provide a period of not less than fifteen (15) calendar days for public comment on the proposed waiver; and submit the proposed waiver to the OMB Made in America Office for review to determine if the waiver is consistent with policy.
Section 70914(c) provides that a waiver under section 70914(b) must be published by the agency with a detailed written explanation for the proposed determination and provide a public comment period of not less than 15 days. Pursuant to section 70914(d)(2), when seeking to extend a waiver of general applicability, HUD is required to provide for a public comment period of not less than 30 days on the continued need such waiver.
HUD is proposing to issue a temporary, limited non-availability partial waiver of the manufactured product requirements of Section 70914(a) of the Build America, Buy America Act (“BABA”) included in the Infrastructure Investment and Jobs Act (IIJA) (Pub. L. 117-58) for domestically assembled solar modules used in federal financial assistance awarded for infrastructure projects. This waiver covers multiple projects that HUD anticipates will involve the installation of solar modules with the intent of addressing multiple project specific non-availability waivers into one document to reduce paperwork and support administrative efficiency.
HUD's proposed waiver
This proposed waiver would apply on or after the Effective Date of this notice until December 31, 2025 for all new solar modules with Final Assembly in the United States. Solar modules where final assembly occurred outside the United States are not eligible for coverage under this waiver. “Final Assembly” means all operations involved in the transformation of individual solar cells and all other module components into a fully functional encapsulated module, including deposition of electrically active PV absorber material (e.g, cadmium telluride on glass) etc. For recipient expenditures to be covered by this waiver, the solar modules will need to be installed by June 30, 2026. “Installed by” means modules being permanently fastened to an outdoor support structure at the project site. HUD proposes to apply this waiver, if approved, to all Federal Financial Assistance. For Awards and amendments that otherwise meet the criteria of the waiver but were obligated prior to the Effective Date, the waiver will apply to eligible expenditures incurred on or after the Effective Date of the final waiver for the period that the waiver is active.
In accordance with Section 70914(c) of the BABA, HUD is providing notice that it is seeking a limited, partial general applicability nonavailability waiver of the BABA manufactured product requirements for domestically assembled solar modules used in federal financial assistance awards for infrastructure projects due to the determination that compliant solar modules are not available in sufficient quality or quantity for use in HUD-funded infrastructure projects. The Department of Energy conducted market research to determine availability of BABA compliant solar modules which included subject matter expert analysis of domestic solar production based on announcements and non-public manufacturing plans disclosed by manufacturers. Based on this market research, HUD proposes to find that BABA-compliant solar modules are not produced in the United States in sufficient and reasonably available quantities for use in HUD-assisted solar projects, and will not become available in sufficient and reasonably available quantities until December 2025 or later. This proposed waiver, if finalized, will ensure recipients can effectively carry out the activities of their award in a timely manner while promoting domestic solar module manufacturing. HUD seeks to issue this waiver on the basis of nonavailability in accordance with Section 70914(b)(2) of the BABA.
HUD is proposing a temporary, limited partial nonavailability waiver of BABA manufactured product requirements for solar modules to apply to the use of domestically assembled modules that may incorporate foreign components. The United States is the second largest market for solar hardware, representing about 10%-15% of global solar demand. Developing and enhancing United States solar manufacturing will mitigate global supply chain challenges and meet decarbonization goals as well as benefit United States' workers, employers, and the economy. To reestablish domestic solar manufacturing in the United States, entities that produce and sell solar components will require a holistic industrial strategy to offset the 30-40% higher cost of domestic solar production relative to imported components. A narrowly tailored BABA waiver will meet immediate solar demands while the domestic solar industry expands supply.
Domestically, the United States currently has 10,600 MWdc/year nameplate production capacity for CdTe modules and 47,000 MWdc/yr nameplate production capacity for c-Si modules. Market research indicates c-Si module production capacity was historically underutilized for a variety of reasons including foreign competition, workforce shortages, and obsolete production equipment, with about 3,700 MWdc actually produced
There are a significant number of grant programs funded by HUD that could be used to pay for solar installations subject to BABA. Even where the funding was obligated by HUD prior to being subject to BABA any new funding source added to a project that becomes subject to BABA might make the entire project subject to BABA, for example in the Public Housing Capital Fund. However, more importantly, the demand for solar modules for projects funded by HUD subject to BABA will derive from projects funded not only by HUD itself, but also by projects where HUD funding is part of the “Capital Stack” of a project that may or may not be subject to BABA. Two significant examples of such programs are the Clean Energy Tax Credits and Solar for All.
A significant driver of demand for solar modules stems from the Investment Tax Credit (ITC). Projects that are funded with the ITC that also qualify for additional bonus credits will often be located on or directly benefit HUD-assisted housing. Under the Clean Electricity Low-Income Communities Bonus Credit under section 48E(h) of the Internal Revenue Code, HUD-assisted properties are categorically eligible for the highest bonus credit available under the allocation of for eligible property that is part of a qualified low-income residential building project also known as Category 3 facility. It is highly likely, therefore, that such projects will further spur demand for solar modules purchased with HUD Federal Financial Assistance that is subject to BABA. Furthermore, 100% of the 7-billion-dollar Solar for All program funded by the Environmental Protection Agency must be spent in low and disadvantaged communities, which are often the same communities that receive some form of HUD funding subject to BABA and will likely be combined with such funding.
In addition to current production capacity, future domestic manufacturing indicates growth will result in substantially more BABA-compliant module supply. As of November 2024 over $20 billion in planned solar investments have been announced at over 148 new and expanded manufacturing plants for modules, module parts and other hardware. U.S. Department of Energy subject matter experts performed a probabilistic analysis of these announcements to identify a date when full BABA compliance may be achievable. Subject matter expert review identified technical delays from announced dates due to site readiness as well as likelihood of project success and considered the time required to ramp to full production capacities. Overall analysis concludes that domestic manufactures will likely be capable of producing fully BABA-compliant modules in sufficient quantities for all Federal financial assistance recipients no sooner than December 31, 2025. Thus, HUD proposes to find that BABA-compliant solar modules are not produced in the United States in sufficient and reasonably available quantities for use in HUD-assisted solar projects and will not become available in sufficient and reasonably available quantities until December 2025.
To support BABA compliance verification, HUD is considering step-certification, which is a type of certification process under which each handler (supplier, fabricator, manufacturer, processor, etc.) of the subject products and materials certifies that their step in the process was domestically performed. Each time a step in the manufacturing process takes place, the manufacturer delivers its work along with a certification of its origin. This process is common practice for verifying Buy America requirements for iron and steel. A solar step process may include manufacture of the wafers, cells, as well as modules in the United States, or equivalent processes for other solar manufacturing technologies.
Without a waiver, HUD anticipates most recipients with solar projects subject to BABA will develop, implement, and submit unavailability waiver packages for solar modules. This conclusion is based upon known well-established domestic sourcing challenges for BABA-compliant solar modules. The corresponding administrative burden will impact the cost and schedule of recipients, and in some cases diminish the use of solar projects, or, in extreme cases, deter overall participation. For those that participate and propose solar projects, recipient resources will be required to perform market research and submit unavailability packages. Project schedules will need to be extended to account for waiver development and waiver processing though final approval. These anticipated delays adversely impact numerous agency goals of these projects, including climate action and energy justice.
The absence of a narrowly tailored BABA waiver will result in missed strategic opportunities to advance goals such as those within E.O. 14017
Under OMB Memorandum M-24-02, agencies are expected to assess “whether a significant portion of any cost advantage of a foreign-sourced product is the result of the use of dumped steel, iron, or manufactured products or the use of injuriously subsidized steel, iron, or manufactured products” as appropriate before granting a waiver. HUD's analysis has concluded that this assessment is not applicable to this waiver, because this waiver is not based on cost advantage of foreign sourced products.
This proposed waiver, if finalized, applies to expenditures on solar panels after the Effective Date and by December
As required under section 70914 of the Act, HUD is soliciting comment from the public on the proposed waiver described in this Notice for a period of 15 days from the date of publication on HUD's web page. HUD seeks public comment from all interested parties. Input is sought from the public; specifically, stakeholders, including, but not limited to, FFA applicants and recipients, manufacturers, installers and other stakeholders across sectors and geographies. In particular, HUD seeks comment regarding the scope of this waiver and the following:
• Proposed dates of applicability, including effective date of the waiver and installed by date.
• Recommendations and comments regarding certification for BABA compliant solar modules. HUD is considering step-certification, a type of certification process under which each handler (supplier, fabricator, manufacturer, processor, etc.) of the subject products and materials certifies that their step in the process was domestically performed. Each time a step in the manufacturing process takes place, the manufacturer delivers its work along with a certification of its origin.
Relevant information and comments will help HUD to understand completely the facts surrounding the waiver request and the agency's proposed finding of nonavailability. If issued, this waiver will be applicable to FFA that HUD obligates on or after the effective date of the final waiver and in connection with the expenditure of FFA, which had been previously obligated by HUD, throughout the applicable waiver period.
Fish and Wildlife Service, Interior.
Notice of receipt of permit application; request for comments.
We, the U.S. Fish and Wildlife Service, have received an application for a permit to conduct activities intended to enhance the propagation and survival of endangered species under the Endangered Species Act. We invite the public and local, State, Tribal, and Federal agencies to comment on this application. Before issuing the requested permit, we will take into consideration any information that we receive during the public comment period.
We must receive your written comments on or before January 27, 2025.
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Karen Colson, Regional Recovery Permit Coordinator, Ecological Services, (503) 231-6283 (telephone);
We, the U.S. Fish and Wildlife Service, invite the public to comment on an application for a permit under section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
With some exceptions, the ESA prohibits activities that constitute take of listed species unless a Federal permit is issued that allows such activity. The ESA's definition of “take” includes such activities as pursuing, harassing, trapping, capturing, or collecting, in addition to hunting, shooting, harming, wounding, or killing.
A recovery permit issued by us under section 10(a)(1)(A) of the ESA authorizes the permittee to conduct activities with endangered or threatened species for scientific purposes that promote recovery or for enhancement of propagation or survival of the species. These activities often include such prohibited actions as capture and collection. Our regulations implementing section 10(a)(1)(A) for these permits are found in the Code of Federal Regulations (CFR) at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.
Proposed activities in the following permit request are for the recovery and enhancement of propagation or survival of the species in the wild. The ESA requires that we invite public comment before issuing the requested permit. Accordingly, we invite local, State, Tribal, and Federal agencies and the public to submit written data, views, or arguments with respect to this application. The comments and recommendations that will be most useful and likely to influence agency decisions are those supported by quantitative information or studies.
Written comments we receive become part of the administrative record associated with this action. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comment that we withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. All submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, will be made available for public disclosure in their entirety.
If we decide to issue a permit to the applicant listed in this notice, we will publish a notice in the
We publish this notice under section 10(c) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice.
The United States, as a Party to the Convention on International
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For information pertaining to species proposals, contact Rosemarie Gnam, Head, Division of Scientific Authority, at 703-358-1708 (phone); 703-358-2276 (fax); or
Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of- contact in the United States.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora, hereinafter referred to as CITES or the Convention, is an international treaty designed to control and regulate international trade in certain animal and plant species that are or may be affected by trade and are now, or potentially may become, threatened with extinction. Species are included in the Appendices to CITES, which are available on the CITES Secretariat's website at
Currently there are 184 Parties to CITES—183 countries, including the United States, and one regional economic integration organization, the European Union. The Convention calls for regular biennial meetings of the Conference of the Parties (CoP) unless the Conference decides otherwise. At these meetings, the Parties review the implementation of CITES, make provisions enabling the Secretariat in Switzerland to carry out its functions, consider amendments to the species included in Appendices I and II, consider reports presented by the Secretariat, and make recommendations for the improved effectiveness of CITES. Any country that is a Party to CITES may propose amendments to Appendices I and II, as well as resolutions, decisions, and agenda items for consideration by all the Parties. The U.S. Fish and Wildlife Service (Service) regulations governing this public process are found in title 50 of the Code of Federal Regulations at 50 CFR 23.87.
The Endangered Species Act (ESA; 16 U.S.C. 1531
This is our second notice in a series of
We published our first CoP20-related
In response to our March 2024 notice, we received 46 comments with recommendations from 19 individuals and 25 organizations for possible proposals involving almost 3,500 animal taxa and 13 plant taxa for amendments to the CITES Appendices. The commenters include organizations such as the Association of Zoos and Aquariums, Animal Welfare Institute, California Native Plant Society, Center for Biological Diversity, Humane Society International, International Fund for Animal Welfare, IUCN (International Union for Conservation of Nature) Species Survival Commission Specialist Groups, International Wood Products Association, League of American Orchestras, Natural Resource Defense Council, Safari Club International, Species Survival Network, United Plant Savers, Wildlife Conservation Society, and World Wildlife Fund. Additionally, the United States may consider two animal species (United States is a range country) proposals that previously resulted from the Periodic Review process (Resolution Conf. 14.8 (Rev. CoP17)) by the Animals Committee, and where that Committee recommended that Mexico, as a range country for the species being reviewed, bring forward a proposal to amend the Appendices.
We have undertaken initial evaluations of the available trade and biological information on many of these taxa, but we recognize that many of the commenters provided little biological, trade, and other information with which to support their comments. Based on the limited information available, we made provisional evaluations of whether to proceed with the development of proposals for species to be included in, removed from, or transferred between the CITES Appendices. We made these evaluations by considering the best information available on the species; the presence, absence, and effectiveness of other mechanisms that may preclude the need for species' inclusion in the CITES Appendices (
(1) Does the proposed action address a serious wildlife or plant trade issue that the United States is experiencing as a range country for species in trade?
(2) Does the proposed action address a serious wildlife or plant trade issue for species not native to the United States?
(3) Does the proposed action provide additional conservation benefit for a species already covered by another international agreement?
Based on our initial evaluations, we have assigned each taxon to one of three categories, which reflects the likelihood of our submitting a proposal. In sections A, B, and C, below, we have listed the current status of each species proposal recommended by the public, as well as some species proposals we have been developing internally or from the Periodic Review process. Please note that we have provided here only a list of taxa and the proposed action of likely, unlikely, or undecided on whether to submit a species proposal for consideration at CoP20. We have posted an extended table version of this notice on our website (at
We welcome your comments, especially if you are able to provide any additional biological or trade information on these species. Please note that, throughout this notice, an asterisk (*) indicates species that occur in the United States of America or its territories.
The two taxa in this section have undergone review through the Periodic Review of the Appendices by the Animals Committee (AC), most recently at its 33rd meeting (AC33; Geneva, July 2024), in accordance with Resolution Conf. 14.8 (Rev. CoP17). This is a regular process under CITES to evaluate whether listings of taxa in CITES Appendices I and II continue to be appropriate, based on current biological and trade information.
Mexico undertook the periodic review evaluation for these two taxa and submitted the results of their review for consideration at AC33 (
The United States is still undecided on whether to submit CoP20 proposals for the following taxa. In most cases, we have not completed our consultations with relevant range countries. In other cases, we expect meetings to occur in the immediate future, at which participants will generate important recommendations, trade analyses, or biological information on the taxon in question that may be useful to our final decision making.
The United States does not intend to submit proposals for the following taxa unless we receive significant additional information indicating that a proposal is warranted.
In response to the request in our first notice concerning possible CoP20 submissions of resolutions, decisions, and agenda items, we received information and recommendations from the following organizations: Animal Welfare Institute, Association of Zoos & Aquariums, Center for Biological Diversity, Defenders of Wildlife, Environmental Investigation Agency, Humane Society International, International Fund for Animal Welfare, International Wood Products Association, Jamma International, League of American Orchestras, Natural Resources Defense Council, Panthera, Safari Club International, Species Survival Network, Wildlife Conservation Society, and World Wildlife Fund. We also received comments from two individuals.
We evaluated the recommendations submitted by the above organizations and individuals, as well as the factors described in the U.S. approach for CoP20, discussed in our March 22, 2024,
We welcome your comments and information regarding the resolutions, decisions, and agenda items discussed below. Please review the information under
Due to the significant number of issues that are subject to ongoing discussions in the Standing Committee, to date, we have not identified any issues for which we are likely to submit a document to CoP20. As described in this notice, we will make a final decision on whether to submit a document to CoP20 for many issues described in this document pending the outcomes and discussions at SC78.
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The United States regards the RST process in CITES as an extremely important and essential tool to ensure that trade in Appendix-II species is biologically sustainable in the short and long term. The ability to select an appropriate number of species/country combinations of greatest concern already exists within the Resolution, and the RST process is flexible to address the conservation concerns raised. We understand the concerns notably for migratory and marine species such as sharks that would allow for the selection of taxa at a broader level, especially at geographic levels, and the concerns specifically expressed at the 32nd meeting of the Animals Committee (AC32; Geneva, June 2023). Any apparent constraints noted at recent meetings were unrelated to the structure of the Resolution and were instead largely a function of the time and resource constraints of the scientific committees and the Secretariat, in particular with the added workload during this intersessional period from work that was delayed during the Covid-19 pandemic. We have actively engaged in the RST review process at Animals, Plants, and Standing Committee meetings and support efforts to build the capacity of CITES Parties. We are concerned about the continued threats to sharks and rays. Therefore, we are considering options to complement the RST process that have conservation benefits to these species. We remain undecided on how best to accomplish such objectives and seek input on possible solutions.
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While the United States appreciates the recommendation to review the terms “disposal” and “euthanasia” to ensure they accurately reflect the task required of Parties, we believe that the current terms are adequate. “Management” is a term typically used when describing stockpiles (parts and products, and not live specimens). Similarly, disposal refers to specifying a destination for the specimens. Regarding the recommendation to update Resolution Conf. 17.8 (Rev. CoP19), we are undecided at this time, including
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The United States continues to support the NIAP process and is an active participant in the Standing Committee's intersessional working group that is currently considering the relationship between the Elephant Trade Information System, which informs NIAP decisions, and the CITES Annual Illegal Trade Report. We are concerned with the lack of progress toward implementing the NIAP review recommendations and will consider ways to advance these initiatives at CoP20.
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The United States is a longtime active participant in the Standing Committee's intersessional working group on Electronic Systems and Information Technologies. This working group is the main conduit for developing standards and best practices for electronic permit issuance and enforcement and data reporting. Additionally, staff from the U.S. Fish and Wildlife Service, Office of Law Enforcement, engage in technical assistance activities with other Parties interested in developing their own LEMIS-like processes for collecting legal and illegal CITES trade data, as well as data on legal and illegal trade in non-CITES species consistent with stricter domestic measures such as the U.S. Endangered Species Act and Lacey Act. Each Party has a unique set of circumstances regarding regulations and governance, and there is no one-size-fits-all approach to data system development. That said, it is possible for interested Parties to learn from the U.S. experience as well as the experiences of other Parties that are also developing their own data systems. The United States will consider whether a CoP20 information document on LEMIS or side event at CoP20 would be useful for other Parties. In addition, we will explore the possibility of coordinating with other Parties to present a more comprehensive view of the options available for creating systems similar to LEMIS in collecting and reporting data.
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The United States acknowledges the importance of transparency and comprehensive decision making to the CITES processes. Although we are currently undecided on submitting a document to CoP20 specifically calling for the proposed changes, we strongly support the need for ensuring transparency in the Secretariat's activities and operations, including in its implementation of CITES Decisions. We believe that this is particularly the case with regard to the development of terms of reference and selection of consultants to carry out the mandates of Decisions, which we believe are crucial for delivering meaningful outputs that respond to the expectations of the CoP. Consequently, although we are currently undecided, we may submit a discussion document to CoP20 on this issue.
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With regard to the recommendation to revise Resolution Conf. 17.8 (Rev. CoP19), we are undecided at this time, pending the outcome of discussions under Decision 19.174 on
We are unlikely to review language on the advantages and disadvantages of euthanasia because we believe it is consistent with Article VIII of the Convention. We make determinations about the disposal of confiscated specimens on a case-by-case basis, consistent with the Resolution and U.S. regulations. The most important factor to consider in the disposal of confiscated live specimens is the welfare of the wildlife or plants. For live specimens, generally, the disposal options are maintenance in captivity, return to the wild, or euthanasia. In the absence of other options, euthanasia may be the most humane or appropriate option. Although under Article VIII returning confiscated live specimens to the country of export is one available option, it is often not possible. Return to the wild of confiscated specimens can carry risks for existing wild populations, such as introduction of disease, and can result in the death of the specimens released due to starvation, disease, or predation. Before considering return to the wild, a country must decide if that action would make a significant contribution to the conservation of the species or might be harmful to the conservation of the species in the wild. In many countries, including the United States, some confiscated specimens are donated to sanctuaries, zoos, aquariums, or botanical gardens. This option may not be available when a seizure involves a large number of common species, as placement of specimens of lower conservation value in limited space may benefit those individuals but may not support conservation efforts as a whole. We are undecided on whether additional guidance is needed in the Resolution for placement of confiscated live specimens in research laboratories and would welcome additional information on this matter.
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Additionally, as noted in the Convention text, CITES is not subject to general reservations and Parties have the ability to enter specific reservations to amendments to the Appendices in accordance with the provisions of Articles XV, XVI, and XXIII. In Resolution Conf. 4.25 (Rev. CoP19) on
Additionally, as noted in the Convention text, CITES is not subject to general reservations and Parties have the ability to enter specific reservations to amendments to the Appendices in accordance with the provisions of Articles XV, XVI, and XXIII. In Resolution Conf. 4.25 (Rev. CoP19) on
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The United States appreciates WWF's recommendation to introduce a draft resolution on traceability. At the 17th meeting of the Conference of the Parties (CoP17; Johannesburg, September/October 2016), the Parties adopted a working definition for traceability and guidance on its application, which is available to Parties on the CITES website with links to the associated documents. The 70th meeting of the Standing Committee (SC70; Sochi, October 2018) and the 18th meeting of the Conference of the Parties (CoP18; Geneva, August 2019) considered whether a resolution on traceability should be drafted and decided it was not warranted at that time. We continue to support those conclusions and are not convinced that a resolution is needed at this time. Therefore, we are unlikely to submit one to CoP20 unless additional information becomes available that warrants reassessing this issue.
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With regard to immortal cell lines and genome libraries, the individuals contend that they do not have “any template of the organism from which they are derived . . . and are considered as synthetic DNA, eligible for exclusion under CITES.” With regard to trace DNA, the individuals argue that amounts of 50 micrograms or less have no anticipated financial value and, therefore, should be excluded from CITES requirements.
We note that the Parties in Resolution Conf. 9.6 (Rev. CoP19) have agreed that “the term `readily recognizable part or derivative,' as used in the Convention, is interpreted to include any specimen that appears from an accompanying document, the packaging or a mark or label, or from any other circumstances, to be a part or derivative of an animal or plant of a species included in the Appendices.” As defined by the commenters, immortal cells, genome libraries, and trace DNA all meet the current CITES definition of a readily recognizable part or derivative.
We note that the potential financial value of specimens of CITES-listed species is not the determining factor for regulating international trade in the species. Also, recognizing that the trade in many biological samples, because of their special nature or because of the special purpose of such trade, requires expedited processing of permits and certificates to allow for the timely movement of shipments, the Parties have adopted simplified procedures to issue permits and certificates for such samples, subject to certain requirements (see Resolution Conf. 12.3 (Rev. CoP19) on
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The United States recognizes the importance of enforcement officers, including rangers, in the effective implementation and enforcement of CITES. However, we are unlikely to submit a document on this subject to CoP20. We will continue to seek opportunities to support the recognition, protection, and support of rangers and other enforcement officers.
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The United States is a member of the intersessional working group and will continue to actively engage in its work. We acknowledge that achieving the conservation aim of CITES can result in important positive benefits to Indigenous Peoples as well as local communities, while on the other hand illegal trade and unsustainable use that CITES is designed to prevent can have serious negative consequences for Indigenous Peoples as well as local communities. The United States believes that effective engagement of Indigenous Peoples as well as local communities in CITES decision making is critical to the successful implementation of CITES decisions. However, we believe that Parties should engage Indigenous Peoples as well as local communities in their national processes via the consultative processes already provided in existing CITES Resolutions, with the addition of supportive, non-binding guidance that is being developed through current CITES Decisions. We maintain that it is up to Parties as to whether and how their national Indigenous Peoples as well as local communities would be included in international meetings, including as delegation members of those Parties, consistent with Resolution Conf. 16.6 (Rev. CoP18) on
Considering the workload and financial impact to Parties and the Secretariat, we do not support the establishment of another permanent committee. We will continue to engage in discussions in the working group but do not support a separate Indigenous Peoples as well as local communities registration category within the CITES process, as it is not in line with text of the Convention and would put additional burdens on the Secretariat. We are open to other ideas to engage Indigenous Peoples as well as local communities in CITES, and we have expressed that perspective in the intersessional working group.
13.
14.
15.
16.
17.
18.
With regard to the recommendation to update Resolution Conf. 17.8 (Rev. CoP19), we are unlikely to recommend them at this time but will make a final decision based on additional discussions and pending the outcome of discussions at SC78. Consistent with the guidance in Resolution Conf. 17.8 (Rev. CoP19), the most important factor we consider in the disposal of confiscated living specimens is the welfare of the wildlife or plants, and we make such determinations on a case-by-case basis, consistent with the Resolution and our regulations. Additional work on transport of live specimens is already taking place under several Decisions, including to ensure that Parties have the resources and guidance necessary to implement and enforce the Convention's requirements (Articles III, IV, V, and VII) that “any living specimens are so prepared and shipped” and “transported and cared for as to minimize the risk of injury, damage to health or cruel treatment” and further requirements (Article VIII) that “all living specimens, during any period of transit, holding or shipment, are properly cared for so as to minimize the risk of injury, damage to health or cruel treatment.” Therefore, we are unlikely to submit a document directed at the suggested revisions. We are also unlikely to submit a document on trade in live elephants, as current Decisions and ongoing discussions are already considering these issues.
19.
20.
The United States also remains concerned regarding the funding and prioritization of core CITES work and will continue to work through the Standing Committee's Finance and Budget Subcommittee and the CoP to address these issues. Currently, we do not intend to submit draft decisions on this matter to CoP20.
21.
22.
23.
Each of the current quotas for leopards from range countries were reviewed by the Animals Committee at its 30th or 31st meeting (AC30: Geneva 2018; AC31: online 2021). Decisions were taken and each of the export quotas were approved at either CoP18 (Geneva 2019) or CoP19 (Panama 2022). At AC33, the Animals Committee agreed to propose draft decisions for consideration at CoP20 that concern consolidating and sharing information related to the management and monitoring of leopard and hunting quotas that assist Parties in making non-detriment findings for trade in leopard hunting trophies in accordance with Resolution Conf. 10.14 (Rev. CoP19). Therefore, we are unlikely to propose amendments to Resolution Conf. 10.14 (Rev. CoP19) to CoP20.
24.
25.
We invite information and comments concerning any of the possible CoP20 species proposals, resolutions, decisions, and agenda items discussed above. Please note that we are unlikely to submit any suggested species proposals to amend the Appendices that contained no information (or minimal information) for consideration other than species name and Appendix suggestion. We have limited resources with which to analyze and prepare potential species proposals for consideration by the Conference of the Parties to CITES and are unable to prioritize consideration of these recommendations for preparation of U.S. proposals to CoP20 where no information (or minimal information) has been presented demonstrating the CITES criteria are met for the suggested species proposal. We may still consider these possible proposals if we receive information demonstrating the CITES criteria in Resolution Conf. 9.24 are met.
We note that in our request for information in our first
You must submit your information and comments to us no later than the date specified in DATES, above, to ensure that we consider them. We will not consider comments sent by email or fax, or to an address not listed in
Comments and materials received will be posted for public inspection on
Article XI, paragraph 7, of CITES states that “any body or agency technically qualified in protection, conservation or management of wild fauna and flora, in the following categories, which has informed the Secretariat of its desire to be represented at meetings of the Conference by observers, shall be admitted unless at least one-third of the Parties present object:
(a) international agencies or bodies, either governmental or non-governmental, and national governmental agencies and bodies; and
(b) national non-governmental agencies or bodies which have been approved for this purpose by the State in which they are located. Once admitted, these observers shall have the right to participate but not to vote.”
Persons wishing to be observers representing international nongovernmental organizations (which must have offices in more than one country) at CoP20 may request approval directly from the Secretariat. Persons wishing to be observers representing U.S. national nongovernmental organizations at CoP20 must receive prior approval from the U.S. Division of Management Authority (
An organization seeking approval from our office to attend CoP20 as an observer must include in their request evidence of their technical qualifications in protection, conservation, or management of wild fauna or flora, for both the organization and the individual representative(s). The request must also include copies of the organization's charter and any bylaws, and a list of representatives it intends to send to CoP20.
Organizations seeking approval for the first time should detail their experience in the protection, conservation, or management of wild fauna or flora, as well as their purposes for wishing to participate in CoP20 as an observer. An organization that we have approved within the past 5 years as an observer to a meeting of the Conference of the Parties does not need to provide as much detailed information concerning its qualifications as an organization seeking approval for the first time. Requests should be sent to the Division of Management Authority at the address provided in
Once we approve an organization as an observer, we will direct them to the location on the CITES website where they can obtain instructions for registering with the Secretariat and obtain logistical information about the meeting. A list of organizations approved for observer status at CoP20 will be available upon request from the Division of Management Authority immediately prior to the start of CoP20.
The Secretariat will prepare a provisional agenda for CoP20 following the submission of documents for the meeting. We will publish the CoP20 provisional agenda in the
The United States must submit any proposals to amend Appendix I or II and any draft resolutions, decisions, or agenda items for discussion at CoP20 to the Secretariat at least 150 days (
Through additional notices and website postings in advance of CoP20, we will inform you about preliminary negotiating positions on resolutions, decisions, and proposals to amend the Appendices proposed by other Parties for consideration at CoP20. We will also publish an announcement of a public meeting to be held approximately 2 to 3 months prior to CoP20, to receive public input on our positions regarding CoP20 issues. The procedures for developing U.S. documents and negotiating positions for a meeting of the Conference of the Parties to CITES are outlined in 50 CFR 23.87. As noted in paragraph (c) of that section, we may modify or suspend the procedures outlined there if they would interfere with the timely or appropriate development of documents for submission to the CoP and of U.S. negotiating positions.
The primary authors of this notice are Thomas E.J. Leuteritz, Ph.D., Branch Chief, Division of Scientific Authority, and Anne St. John, Biologist, Division of Management Authority, U.S. Fish and Wildlife Service.
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
U.S. Geological Survey, Department of the Interior.
Notice of public meetings.
In accordance with the Federal Advisory Committee Act (FACA) of 1972, the U.S. Geological Survey (USGS) is publishing this notice to announce that a meeting of the Advisory Committee on Scientific Quality and Integrity will take place and is open to members of the public.
The following meetings will be held as a webinar:
The following meeting will be held in person:
The January 13-14, 2025, and October 7-9, 2025, meetings will be held online and via teleconference. The June 17-18, 2025, meetings will be held at the USGS National Center, 12201 Sunrise Valley Drive, Reston, Virginia, 20192. The meetings are open to the public. Members of the public may attend any of the meetings, whether in person on virtually. Registration instructions for both the online and in-person meetings will be posted at
Dr. Maggie Hardy, Designated Federal Officer, by email at
This meeting is being held under the provisions of the FACA of 1972 (5 U.S.C. Ch. 10), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR part 102-3.
Before including your address, phone number, email address, or other personally identifiable information (PII) in your comment, you should be aware that your entire comment—including your PII—may be made publicly available at any time. While you may ask us in your comment to withhold your PII from public review, we cannot guarantee we will be able to do so.
Bureau of Indian Affairs, Interior.
Notice.
This notice announces the approval by operation of law of Tribal-State gaming compacts (Compacts) governing the operation and regulation of class III gaming activities between the State of California and the Campo Band of Diegueno Mission Indians of the Campo Indian Reservation, California; Elem Indian Colony of Pomo Indians of the Sulphur Bank Rancheria, California; La Posta Band of Diegueno Mission Indians of the La Posta Indian Reservation, California; Table Mountain Rancheria, Timbisha Shoshone Tribe; Tule River Indian Tribe of the Tule River Reservation, California.
The Compacts takes effect on December 26, 2024.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Office of the Assistant Secretary—Indian Affairs, Washington, DC 20240,
The Indian Gaming Regulatory Act of 1988, 25 U.S.C. 2701
The Secretary took no action on the Compacts between the State of California and the Campo Band of Diegueno Mission Indians of the Campo Indian Reservation, California; the Elem Indian Colony of Pomo Indians of the Sulphur Bank Rancheria, California, the La Posta Band of Diegueno Mission Indians of the La Posta Indian Reservation, California; the Table Mountain Rancheria; the Timbisha Shoshone Tribe; and the Tule River Indian Tribe of the Tule River Reservation, California, within the 45-day statutory review period. Therefore, the Compacts are considered to have been approved, but only to the extent they are consistent with IGRA.
Bureau of Indian Affairs, Interior.
Notice.
The Bureau of Indian Affairs (BIA) owns or has an interest in irrigation projects located on or associated with various Indian reservations throughout the United States. We are required to establish irrigation assessment rates to recover the costs to administer, operate, maintain, and rehabilitate these projects. We request your comments on the proposed rate adjustments.
Interested parties may submit comments on the proposed rate adjustments on or before February 24, 2025.
All comments on the proposed rate adjustments must be in writing. You may send comments via email to
Leslie Underwood, Program Specialist, Division of Water and Power, Office of Trust Services, (406) 657-5985. For details about a particular irrigation project, please use the table in the
The first table in this notice provides contact information for individuals who can give further information about the irrigation projects covered by this notice. The second table provides the proposed rates for calendar year (CY) 2026 for all irrigation projects.
In this notice:
This notice affects you if you own or lease land within the assessable acreage of one of our irrigation projects or if you have a carriage agreement with one of our irrigation projects.
You can contact the appropriate office(s) for the irrigation project that serves you. Please use the table in the
We are publishing this notice to inform you that we propose to adjust our irrigation assessment rates. This notice is published in accordance with the BIA's regulations governing its operation and maintenance of irrigation projects, found at 25 CFR part 171. This regulation provides for the establishment and publication of the proposed rates for annual irrigation assessments as well as related information about our irrigation projects.
Our authority to issue this notice is vested in the Secretary of the Interior by 5 U.S.C. 301 and the Act of August 14, 1914 (38 Stat. 583; 25 U.S.C. 385). The Secretary has in turn delegated this authority to the Assistant Secretary—Indian Affairs under part 209, Chapter 8.1A, of the Department of the Interior's Departmental Manual.
We will put the rate adjustments into effect for CY 2026.
We calculate annual irrigation assessment rates in accordance with 25
Consistent with 25 CFR 171.500, these expenses include the following:
(a) Personnel salary and benefits for the project engineer/manager and project employees under the project engineer/manager's management or control;
(b) Materials and supplies;
(c) Vehicle and equipment repairs;
(d) Equipment costs, including lease fees;
(e) Depreciation;
(f) Acquisition costs;
(g) Maintenance of a reserve fund available for contingencies or emergency costs needed for the reliable operation of the irrigation facility infrastructure;
(h) Maintenance of a vehicle and heavy equipment replacement fund;
(i) Systematic rehabilitation and replacement of project facilities;
(j) Contingencies for unknown costs and omitted budget items; and
(k) Other expenses we determine necessary to properly perform the activities and functions characteristic of an irrigation project.
We will mail or hand deliver your bill notifying you (a) the amount you owe to the United States; and (b) when such amount is due. If we mail your bill, we will consider it as being delivered no later than five (5) business days after the day we mail it. You should pay your bill by the due date stated on the bill.
All responsible parties are required to provide the following information to the billing office associated with the irrigation project where you own or lease land within the project's assessable acreage or to the billing office associated with the irrigation project with which you have a carriage agreement:
(1) The full legal name of the person or entity responsible for paying the bill;
(2) An adequate and correct address for mailing or hand delivering our bill; and
(3) The taxpayer identification number or social security number of the person or entity responsible for paying the bill.
Public Law 104-134, the Debt Collection Improvement Act of 1996, requires that we collect the taxpayer identification number or social security number before billing a responsible party and as a condition to servicing the account.
If you are late paying your bill because of your failure to furnish the required information listed above, you will be assessed interest and penalties as provided below, and your failure to provide the required information will not provide grounds for you to appeal your bill or any penalties assessed.
We can refuse to provide you irrigation service.
Yes. 25 CFR 171.545(a) states: “We will not provide you irrigation service until: (1) Your bill is paid; or (2) You make arrangement for payment pursuant to § 171.550 of this part.” If we do not receive your payment before the close of business on the 30th day after the due date stated on your bill, we will send you a past due notice. This past due notice will have additional information concerning your rights. We will consider your past due notice as delivered no later than five (5) business days after the day we mail it. We follow the procedures provided in 31 CFR 901.2, “Demand for Payment,” when demanding payment of your past due bill.
Yes. We are required to assess interest, penalties, and administrative costs on past due bills in accordance with 31 U.S.C. 3717 and 31 CFR 901.9. The rate of interest is established annually by the Secretary of the United States Treasury (Treasury) and accrues from the date your bill is past due. If your bill becomes more than 90 days past due, you will be assessed a penalty charge of no more than six percent per year, which accrues from the date your bill became past due. Each time we try to collect your past due bill, you will be charged an administrative fee of $12.50 for processing and handling.
If you do not pay your bill or make payment arrangements to which we agree, we are required to transfer your past due bill to Treasury for further action. Pursuant to 31 CFR 285.12, bills that are 120 days past due will be transferred to Treasury.
The contact table below contains the regional and project/agency contacts for our irrigation facilities. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services.
The rate table below contains final CY 2025 rates for irrigation projects where we recover costs of administering, operating, maintaining, and rehabilitating them. The table also contains proposed CY 2026 rates for all irrigation projects. An asterisk immediately following the rate category notes irrigation projects where rates are proposed for adjustment.
The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this notice under the Department's consultation policy and under the criteria of Executive Order 13175 and have determined there to be substantial direct effects on federally recognized Tribes because the irrigation projects are located on or associated with Indian reservations. To fulfill its consultation responsibility to Tribes and Tribal organizations, BIA communicates, coordinates, and consults on a continuing basis with these entities on issues of water delivery, water availability, and costs of administration, operation, maintenance, and rehabilitation of projects that concern them. This is accomplished at the individual irrigation project by project, agency, and regional representatives, as appropriate, in accordance with local protocol and procedures. This notice is one component of our overall coordination and consultation process to provide notice to, and request comments from, these entities when we adjust irrigation assessment rates.
The proposed rate adjustments are not a significant energy action under the definition in Executive Order 13211. A statement of energy effects is not required.
These proposed rate adjustments are not a significant regulatory action and do not need to be reviewed by the Office of Management and Budget under Executive Order 12866, as amended by Executive Order 14094.
These proposed rate adjustments are not a rule for the purposes of the Regulatory Flexibility Act because they establish “a rule of particular applicability relating to rates.” 5 U.S.C. 601(2).
These proposed rate adjustments do not impose an unfunded mandate on State, local, or Tribal governments in the aggregate, or on the private sector, of more than $130 million per year. They do not have a significant or unique effect on State, local, or Tribal governments or the private sector. Therefore, the Department is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
These proposed rate adjustments do not effect a taking of private property or otherwise have “takings” implications under Executive Order 12630. The proposed rate adjustments do not deprive the public, State, or local governments of rights or property.
Under the criteria in section 1 of Executive Order 13132, these proposed rate adjustments do not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement because they will not affect the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. A federalism summary impact statement is not required.
This notice complies with the requirements of Executive Order 12988. Specifically, in issuing this notice, the Department has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct as required by section 3 of Executive Order 12988.
These proposed rate adjustments do not affect the collections of information which have been approved by the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995. The OMB Control Number is 1076-0141 and expires March 31, 2026.
The Department has determined that these proposed rate adjustments do not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because the proposed rate adjustments are of an administrative, financial, legal, technical, or procedural nature. (For further information
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act and the Federal Advisory Committee Act, the U.S. Department of the Interior, Bureau of Land Management's (BLM) Alaska Resource Advisory Council (RAC) will meet as follows.
The RAC will meet February 12 and 13, 2025, from 9 a.m. to 3 p.m. Alaska time. A virtual participation option will be available.
The meeting will be held at the BLM Alaska State Office, 4th floor, 222 W. 7th Avenue, Anchorage AK, 99516. Attendees who wish to participate virtually are required to register online at
RAC Coordinator, Azure Hall, email:
The Alaska RAC advises the Secretary of the Interior, through the BLM, on a variety of planning and management issues associated with BLM-managed public lands in Alaska. Agenda topics include a briefing on land use planning projects, the BLM Alaska Strategic Plan, Tribal relations, recreation projects, youth and hiring initiatives, and cooperative efforts.
RAC meetings are open to the public. A public comment period will be offered both days at 2 p.m. Alaska Time. Each RAC meeting has time allotted for public comments. Depending on the number of people wishing to speak and the time available, the amount of time for verbal comments may be limited. Written public comments may be sent to the BLM Alaska State Office or RAC Coordinator listed in the
A final agenda and meeting information will be made widely available to the public via news media, social media, the BLM Alaska RAC web page at
Bureau of Land Management, Interior.
Notice of realty action.
The Bureau of Land Management (BLM) proposes to offer 11 parcels of public land totaling 89.35 acres in the Las Vegas Valley (Valley) by modified competitive sale at no less than each parcel's Fair Market Value (FMV) pursuant to the Southern Nevada Public Land Management Act of 1998 (SNPLMA), as amended. The sale will be processed in conformance with applicable provisions of the Federal Land Policy and Management Act of 1976 (FLPMA) and BLM regulations.
The sale will take place on March 18, 2025, at 8 a.m. Pacific time (PT), on the EnergyNet website at:
Prior to the sale, a sales matrix will be published on the following website:
Brad Gallimore, Supervisory Realty Specialist, Las Vegas Field Office, by email:
Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States. You will receive a reply during normal business hours.
It is the buyer's responsibility to be aware of all applicable Federal, State, and local government laws, regulations, and policies that may affect the subject lands, including any required dedication of lands for public uses. It is the buyer's responsibility to be aware of existing or prospective uses of nearby properties. When conveyed out of Federal ownership, the lands will be subject to any applicable laws, regulations, and policies of the applicable local government for proposed future uses. It is the responsibility of the purchaser to be aware through due diligence of those laws, regulations, and policies, and to seek any required local approvals for future uses. Buyers should make themselves aware of any Federal or State law or regulation that may impact the future use of the property. Any land lacking access from a public road or highway will be conveyed as such and acquiring future access will be the responsibility of the buyer.
Of the 11 parcels of public lands that the BLM proposes to offer, 6 parcels are within Clark County's jurisdiction: one is located on the southwest corner of North Fort Apache Road and West La Madre Way; one is located west of South Rainbow Blvd. and West Silverado Blvd.; one is located off of Las Vegas Blvd. and West Roban Ave.; one is located north of Blue Diamond Road between South Grand Canyon Drive and South Hualipai Way; one is located off of Blue Diamond Road and South Torrey Pines Drive; and one is located west of South Buffalo Drive and south of West Cougar Ave. Three parcels are within the City of Las Vegas' jurisdiction: one is in the north part of the Valley, west of Oso Blanco Road and south of Moccasin Road through and near US Highway 95 and Frontage Road; one is located south of West Centennial Parkway and east of Michelli Crest Way; and one is located west of North Hualapai Way and north of Azure Drive. Two parcels are within the City of Henderson's jurisdiction: one is located west of South Magic Way and south of Burkholder Blvd.; and one is located south of Burkholder Blvd. and east of South Racetrack Road.
The subject public lands for the proposed sale are legally described as:
The areas described aggregate 89.35 acres, according to the official plats of the surveys of the said lands on file with the BLM.
The following National Environmental Policy Act (NEPA) documents support this proposed land sale: The Las Vegas Valley Disposal Boundary Environmental Impact Statement and Record of Decision issued on December 23, 2004, and the Las Vegas In-Valley Area Multi-Action Analysis Environmental Assessment (EA), DOI-BLM-NV-S010-2016-0054-EA (
Submit comments to the address in the
Any comments regarding the proposed sale will be reviewed by the BLM LVFO Assistant Field Manager, Division of Lands, who may sustain, vacate, or modify this realty action in response to such comments. In the absence of any adverse comments, this realty action will become the final determination of the Department of the Interior. The use of the modified competitive sale method is consistent with 43 CFR 2711.3-2. Public lands may be offered for sale by modified competitive bidding procedures when the authorized officer determines it is necessary based on public policies. Consistent with Executive Order 14008,
The regulations at 43 CFR 2711.2 require that qualified conveyees (bidders) must be:
(1) A citizen of the United States 18 years of age or older;
(2) A corporation subject to the laws of any State or of the United States;
(3) A State, State instrumentality, or political subdivision authorized to hold property; or
(4) An entity legally capable of conveying and holding lands or interests therein under the laws of the State of Nevada.
The successful bidder must submit proof of citizenship or Articles of Incorporation within thirty (30) days from receipt of the Acceptance of Bid letter. Evidence of United States citizenship is a birth certificate, passport, or naturalization papers. Citizenship documents or Articles of Incorporation (as applicable) must be provided to the BLM LVFO for each sale.
The EnergyNet auction website is viewable by the public in real-time; however, you must register as a bidder with EnergyNet in advance to submit bids for a parcel during the auction. The online auction website will be active and available for use approximately ten (10) days after the date of this notice and will remain available for viewing until the completion of the auction. The available parcels in this notice will be listed in detail on the EnergyNet website. Interested parties may visit the website at any time.
Potential bidders are encouraged to visit the EnergyNet website at least ten (10) business days prior to the start of the open bidding period to review the bidding instructions available at
Potential bidders may register for the online auction as soon as the auction website is active. To participate in the BLM bidding process, you must register with EnergyNet and obtain a bidder number. Registration for online bidding will be available prior to the sale date on the EnergyNet website at
To participate in this sale, prospective buyers must create an EnergyNet account, complete the EnergyNet Bidding Terms Agreement, request a bid allowance, and register for the BLM Nevada SNPLMA 11 Parcel Land Sale Winter 2025. EnergyNet may require approximately five (5) business days to determine the bidder's financial qualifications. Additional information on how to register with EnergyNet may be found at
Assistance with creating an EnergyNet account and registering for the sale is available by contacting the EnergyNet Government Resources Department at 877-351-4488. Use the following link to create a Buyer's Account:
EnergyNet will verify that the bank is an accredited financial institution and contact the bank to ensure the prospective buyer has the financial means to cover the requested bid allowance. The bidder must contact its banker and grant permission for the banker to speak with EnergyNet about the bidder's bid allowance request. EnergyNet will not request the bidder's account balance nor ask any questions about assets or other lines of credit. EnergyNet will not request the bank account number, nor whether it can withdraw funds.
Payments to the BLM will not be made through EnergyNet. At the conclusion of the bidding period for the final parcel, the bidder with the highest accepted bid during the open auction period (winning bidder) for each parcel will be provided instructions via email by the online auction system on how to make the required payment to the BLM.
In addition, you will be required to pay a service fee to EnergyNet's broker of 1.5 percent of the highest qualifying bid for each parcel purchased by the successful bidder. EnergyNet will submit one invoice via email to each successful bidder for the total amount due to the BLM and a separate invoice for the amount due to EnergyNet's broker.
Bidding will begin at the established FMV of each parcel. Each parcel will have its own unique open bidding period, with start and stop times clearly identified on the auction website. The open bidding period for each parcel will run for 24 hours from start to finish, and only bids placed during this 24-hour period will be accepted. Bidding will close sequentially so that each bidder will know if it is the highest winning bid before subsequent parcels close. The website will display each current high bid, and the high bidder's number.
The online system allows participants to submit maximum bids, which is the highest amount a bidder is willing to pay for each parcel, to enable a bidder to participate in the online auction without having to be logged into the website at the time the auction period closes. The auction website provides a full explanation of placing maximum bids, as well as an explanation of how it works to place bids on your behalf to maintain your high bidder status up to the chosen maximum bid amount. The BLM strongly encourages potential bidders to review the bidding tutorial in the Frequently Asked Questions area on the auction website in advance of the sale. EnergyNet will declare the highest qualifying bid as the high bid. The successful bidder must submit a deposit of no less than 20 percent of the successful bid amount by 4:00 p.m. PT, immediately following the close of the sale, in the form of a certified check, postal money order, electronic fund transfer, bank draft, or cashier's check made payable in U.S. dollars to the “Department of the Interior, Bureau of Land Management.”
The BLM will send the successful bidder(s) an Acceptance of Bid letter with detailed information for making payment in full. In accordance with 43 CFR 2711.3-1(d), the successful bidder will forfeit the bid deposit if it fails to pay the full purchase price within 180 days of the sale. The BLM will make no exceptions. The BLM cannot accept the remainder of the bid price at any time following the 180th day after the sale.
If a bidder is the apparent successful bidder with respect to multiple parcels and that bidder fails to submit the minimum 20 percent bid deposit resulting in default on any single parcel following the sale, the BLM may cancel the sale of all parcels to that bidder. If a successful bidder cannot consummate the transaction for any reason, the BLM may consider the second highest bidder to purchase the parcel. If there are no acceptable bids, a parcel may remain available for sale on a future date without further legal notice.
The BLM LVFO must receive requests for escrow instructions a minimum of 30 business days prior to the prospective patentee's scheduled closing date. There are no exceptions.
All name changes and supporting documentation must be received at the BLM LVFO by 4:00 p.m. PT, 30 days from the date on the Acceptance of Bid letter. There are no exceptions. To submit a name change, the apparent successful bidder must submit the name change in writing on the Certificate of Eligibility form to the BLM LVFO.
The BLM must receive the remainder of the full bid price for the parcel no later than 4:00 p.m. PT, within 180 days following the day of the sale. The successful bidder must submit payment in the form of a certified check, postal money order, bank draft, cashier's check, or make available by electronic fund transfer payable in U.S. dollars to the “Department of the Interior—Bureau of Land Management” to the BLM LVFO. The BLM will not accept personal checks or other non-certified funds.
Arrangements for electronic fund transfer to the BLM for payment of the balance due must be made a minimum of two weeks prior to the payment date. The BLM will not sign any documents related to 1031 Exchange transactions. The bidder is responsible for timing for completion of such an exchange. The BLM cannot be a party to any 1031 Exchange.
In accordance with 43 CFR 2711.3-1(f), the BLM may accept or reject any or all offers to purchase or withdraw any parcel of land or interest therein
Per SNPLMA Section 4(c), lands identified within the Las Vegas Valley Disposal Boundary are withdrawn from location and entry under the mining laws and from operation under the mineral leasing and geothermal leasing laws until such time as the Secretary of the Interior (Secretary) terminates the withdrawal or the lands are patented.
Upon publication of this notice in the
Terms and Conditions: FLPMA Section 209, 43 U.S.C. 1719(a), states that “all conveyances of title issued by the Secretary . . . shall reserve to the United States all minerals in the lands.” Accordingly, the patents, when issued, will contain a mineral reservation to the United States for all minerals.
In response to requests to clarify this mineral reservation as it relates to mineral materials, such as sand and gravel, we refer interested parties to the regulations at 43 CFR 3601.71(b), which provides that the owner of the surface estate of lands with reserved Federal minerals may “use a minimal amount of mineral materials” for “personal use” within the boundaries of the surface estate without a sales contract or permit. The regulation provides that all other use, absent statutory or other express authority, requires a sales contract or permit. The BLM refers interested parties to the explanation of this regulatory language in the preamble to the final rule published in the
The following numbered terms and conditions will appear on the conveyance documents for the sale parcels:
(1) All mineral deposits in the lands so patented, and to it, or persons authorized by it, the right to prospect for, mine, and remove such deposits from the same under applicable law and regulations to be established by the Secretary are reserved to the United States, together with all necessary access and exit rights.
(2) A right-of-way is reserved for ditches and canals constructed by authority of the United States under the Act of August 30, 1890 (43 U.S.C. 945).
(3) The parcels are subject to valid existing rights.
(4) The parcels are subject to reservations for roads, public utilities, and flood control purposes, both existing and proposed, in accordance with the local governing entities' transportation plans.
(5) An appropriate indemnification clause protecting the United States from claims arising out of the patentee's use, occupancy, or occupations on the patented lands.
To the extent required by law, the parcel is subject to the requirements of section 120(h) of CERCLA, as amended. Accordingly, notice is hereby given that the lands have been examined and no evidence was found to indicate that any hazardous substances have been stored for one year or more, nor that any hazardous substances have been disposed of or released on the subject properties.
No warranty of any kind, express or implied, is given by the United States as to the title, the boundaries, whether or to what extent the land may be developed, its physical condition, future uses, or any other circumstance or condition. The conveyance of a parcel will not be on a contingency basis.
National Park Service, Interior.
Notice.
The National Park Service is soliciting electronic comments on the significance of properties nominated before December 14, 2024, for listing or related actions in the National Register of Historic Places.
Comments should be submitted electronically by January 10, 2025.
Comments are encouraged to be submitted electronically to
Sherry A. Frear, Chief, National Register of Historic Places/National Historic Landmarks Program, 1849 C Street NW, MS 7228, Washington, DC 20240,
The properties listed in this notice are being considered for listing or related actions in the National Register of Historic Places. Nominations for their consideration were received by the National Park Service before December 14, 2024. Pursuant to Section 60.13 of 36 CFR part 60, comments are being accepted concerning the significance of the nominated properties under the National Register criteria for evaluation.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Nominations submitted by State or Tribal Historic Preservation Officers
An owner objection received for the following resource(s):
An additional documentation has been received for the following resource(s):
National Park Service, Interior.
Notice of availability, request for comments.
The National Park Service (NPS) has prepared Director's Order #20 to set forth its policies and procedures for formalizing relationships with other entities through six, specific agreement types. Once adopted, the policies and procedures in Director's Order #20 and the accompanying Reference Manual 20 (RM-20) will supersede and replace the policies and procedures issued in Director's Order #20: Agreements, dated July 23, 2003.
Written comments will be accepted until January 27, 2025.
Draft Director's Order #20 is available online at
Joshua Wilks, Deputy Bureau Financial Assistance Chief, NPS,
The NPS is updating its current system of internal written instructions. When these documents contain new policy or procedural requirements that may affect parties outside the NPS, they are first made available for public review and comment before being adopted. Director's Order #20 and a reference manual (subsequent to the Director's Order) will be issued. The draft Director's Order provides direction to NPS managers and employees with responsibilities for preparing, reviewing, and approving these types of agreements with other Federal and non-Federal entities: Federal Intragovernmental Agreements, Reimbursable Service Agreements with Non-Federal Entities, Financial Assistance Agreements, Cooperative Management Agreements, General Agreements, and Funding Agreements with Self-Governance Tribes.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the institution of investigations and commencement of preliminary phase antidumping and countervailing duty investigation Nos. 701-TA-752 and 731-TA-1730 (Preliminary) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of active anode material from China, provided for in subheadings 2504.10.50, 3801.10.50, and 3801.90.00 of the Harmonized Tariff Schedule of
December 18, 2024.
Calvin Chang (202-205-3062), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these investigations and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and B (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings during this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled “Certain Glass Substrates for Liquid Crystal Displays, Products Containing the Same, and Methods for Manufacturing the Same”,
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to § 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of Corning Incorporated on December 18, 2024. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain glass substrates for liquid crystal displays, products containing the same, and methods for manufacturing the same. The complaint names as respondents: Caihong Display Devices Co., Ltd., d/b/a Irico Display Devices Co., Ltd. of China; Hisense USA Corporation of Suwanee, GA; HKC Corporation Ltd. of China; HKC Overseas Ltd. of China; LG Electronics U.S.A., Inc. of Englewood Cliffs, NJ; TCL China Star Optoelectronics Technology Co., Ltd. of China; TTE Technology, Inc., d/b/a TCL North America of Irvine, CA; VIZIO, Inc. of Irvine, CA; and Xianyang CaiHong Optoelectronics Technology Co., Ltd. of China. The complainant requests that the Commission issue a general exclusion order or, in the alternative, issue a limited exclusion order, cease and desist orders, and impose a bond upon respondents' alleged infringing articles during the 60-day Presidential review period pursuant to 19 U.S.C. 1337(j).
Proposed respondents, other interested parties, members of the public, and interested government agencies are invited to file comments on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions on the public interest must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above. Submissions should refer to the docket number (“Docket No. 3795”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
Judicial Conference of the United States.
Advisory Committee on Bankruptcy Rules; notice of cancellation of open hearing.
The following public hearing on proposed amendments to the Federal Rules of Bankruptcy Procedure has been canceled: Bankruptcy Rules Hearing on January 17, 2025.
January 17, 2025.
H. Thomas Byron III, Esq., Chief Counsel, Rules Committee Staff, Administrative Office of the U.S. Courts, Thurgood Marshall Federal Judiciary Building, One Columbus Circle NE, Suite 7-300, Washington, DC 20544, phone (202) 502-1820,
The announcement for this hearing was previously published in the
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Employment and Training Administration (ETA)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before January 27, 2025.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Michael Howell by telephone at 202-693-6782, or by email at
National Agriculture Workers Survey (NAWS) provides an understanding of the manpower resources available to U.S. agriculture. It is the national source of information on the demographic, occupational health and employment characteristics of hired crop workers. For additional substantive information about this ICR, see the related notice published in the
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Bureau of Labor Statistics (BLS)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before January 27, 2025.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Nicole Bouchet by telephone at 202-693-0213, or by email at
The Occupational Requirements Survey (ORS) is a nationwide survey that the BLS is conducting at the request of the Social Security Administration (SSA). Data collection and capture for the current collection wave of ORS began in 2023 and was planned to end in 2028. BLS is seeking approval in this 30-day revision request to extend the collection and processing time used to produce public final ORS estimates from this wave which will result in collection of this wave through 2031 with publication in 2032. ORS is also eliminating collection of the data elements pertaining to job work levels. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
Bureau of Labor Statistics, Department of Labor.
Notice of information collection; request for comment.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The Bureau of Labor Statistics (BLS) is soliciting comments concerning the proposed extension of the “International Training Application.” A copy of the proposed information collection request can be obtained by contacting the individual listed below in the Addresses section of this notice.
Written comments must be submitted to the office listed in the Addresses section of this notice on or before February 24, 2025.
Send comments to Morgan Scheinin, BLS Clearance Officer, Division of Management Systems, Bureau of Labor Statistics by email to
Morgan Scheinin, BLS Clearance Officer, at 202-691-7628 (this is not a toll free number). (See
The BLS is one of the largest labor statistics organizations in the world and has provided international training since 1945. Upon request, the BLS Division of International Technical Cooperation (ITC) conducts seminars at its training facilities in the Washington, DC metropolitan area for groups of three or more. ITC may also conduct seminars overseas or virtually, upon request. The seminars bring together statisticians, economists, analysts, and other data users from countries all over the world. Each seminar is designed to strengthen the participants' ability to collect and analyze economic and labor statistics. Seminars include lectures, discussions, and workshops.
Office of Management and Budget clearance is being sought for the proposed extension of the International Training Application. Continuing the existing collection will allow the BLS to continue to collect information needed to enroll participants in the international training programs of BLS. No questions have been added or deleted on the form since the last Office of Management and Budget approval.
The Bureau of Labor Statistics is particularly interested in comments that:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they also will become a matter of public record.
National Credit Union Administration (NCUA).
Notice of submission to the Office of Management and Budget.
As required by the Paperwork Reduction Act of 1995, The National Credit Union Administration (NCUA) is submitting the following extensions and revisions of currently approved collections to the Office of Management and Budget (OMB) for renewal.
Written comments should be received on or before January 27, 2025 to be assured consideration.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Copies of the submission may be obtained by contacting Madeleine Humm at (703) 518-6547, emailing
By the National Credit Union Administration Board.
National Science Foundation.
Notice.
The National Science Foundation (NSF) is announcing plans to establish this collection. In accordance with the requirements of the Paperwork Reduction Act of 1995, we are providing the opportunity for public comment on this action. After obtaining and considering public comment, NSF will prepare the submission requesting Office of Management and Budget (OMB) clearance of this collection for no longer than 3 years.
Written comments on this notice must be received by February 24, 2025 to be assured consideration. Comments received after that date will be considered to the extent practicable. Send comments to address below.
Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 2415 Eisenhower Avenue, Suite E6300, Alexandria, Virginia 22314; telephone (703) 292-7556; or send email to
In addition to standard NSF annual and final report requirements, PIs for all S&CC award recipients will prepare a one-page graphic summary of their project that will be submitted no later than the due date of the first annual report and at the end of the award period. A five-minute project video is also required for all SCC-IRG and SCC-LSR recipients and will be due at the end of the award period. The video should present major project accomplishments. Award recipients must provide NSF permission to publish their video online for public access and/or to share it with interested parties. NSF anticipates the documents may be posted on the S&CC Virtual Organization or other appropriate website.
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
Pursuant to 39 CFR 3041.405, the Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to Competitive negotiated service agreement(s). The request(s) may propose the addition of a negotiated service agreement from the Competitive product list or the modification of an existing product currently appearing on the Competitive product list.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
Section II identifies the docket number(s) associated with each Postal Service request, if any, that will be reviewed in a public proceeding as defined by 39 CFR 3010.101(p), the title of each such request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each such request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 and 39 CFR 3000.114 (Public Representative). Section II also establishes comment deadline(s) pertaining to each such request.
The Commission invites comments on whether the Postal Service's request(s) identified in Section II, if any, are consistent with the policies of title 39. Applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3041. Comment deadline(s) for each such request, if any, appear in Section II.
Section III identifies the docket number(s) associated with each Postal Service request, if any, to add a standardized distinct product to the Competitive product list or to amend a standardized distinct product, the title of each such request, the request's acceptance date, and the authority cited by the Postal Service for each request. Standardized distinct products are negotiated service agreements that are variations of one or more Competitive products, and for which financial models, minimum rates, and classification criteria have undergone advance Commission review.
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This Notice will be published in the
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a Priority Mail Express International, Priority Mail International & First-Class Package International Service contract to the list of Negotiated Service Agreements in the Competitive Product List in the Mail Classification Schedule.
Christopher C. Meyerson, (202) 268-7820.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 17, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean C. Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 13, 2024, it filed with the Postal Regulatory Commission a
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Sean Robinson, 202-268-8405.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 16, 2024, it filed with the Postal Regulatory Commission a
Office of Science and Technology Policy (OSTP).
Notice of public meetings.
The National Nanotechnology Coordination Office (NNCO), on behalf of the Nanoscale Science, Engineering, and Technology (NSET) Subcommittee of the Committee on Technology of the National Science and Technology Council (NSTC), will facilitate stakeholder discussions of targeted nanotechnology topics through workshops and webinars, as well as meetings on behalf of communities of research and networks, between the publication date of this Notice and December 31, 2025.
The NNCO will hold one or more meetings between the publication date of this Notice and December 31, 2025.
Information about upcoming workshops, webinars, and other events, will be posted on
Patrice Pages at
These public meetings address the charge in the 21st Century Nanotechnology Research and Development Act for NNCO to provide “public input and outreach . . . by the convening of regular and ongoing public discussions.” Workshop and webinar topics may include technical subjects; environmental, health, and safety issues related to nanomaterials (nanoEHS); business case studies; or other areas of potential interest to the nanotechnology community. Areas of focus for the communities of research may include research on nanoEHS, nanotechnology education, nanomedicine, nanomanufacturing, climate change, nanometrology, or other areas of potential interest to the nanotechnology community. The communities of research are not intended to provide any government agency with advice or recommendations; such action is outside of their purview.
On September 19, 2024, Cboe BZX Exchange, Inc. (“BZX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Cboe BZX Exchange, Inc. (“BZX” or the “Exchange”) is filing with the Securities and Exchange Commission (“Commission” or “SEC”) a proposed rule change to list and trade shares of the Franklin Crypto Index ETF (the “Fund”), a series of the Franklin Crypto Trust (the “Trust”),
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set
This Amendment No. 1 to SR-CboeBZX-2024-091 amends and replaces in its entirety the proposal as originally submitted on September 19, 2024. The Exchange submits this Amendment No. 1 in order to clarify certain points and add additional details to the proposal.
The Exchange proposes to list and trade the Shares under BZX Rule 14.11(e)(4),
The Commission has approved numerous series of Trust Issued Receipts,
The Commission has historically approved or disapproved exchange filings to list and trade series of Trust Issued Receipts, including spot-based Commodity-Based Trust Shares, on the basis of whether the listing exchange has in place a comprehensive surveillance sharing agreement with a regulated market of significant size related to the underlying commodity to be held.
Both the Exchange and Chicago Mercantile Exchange (“CME”) are members of the Intermarket Surveillance Group (“ISG”).
In the Spot Ether ETP Approval Order the Commission also concluded that:
As such, the listing exchanges demonstrated “other means to prevent fraudulent and manipulative acts and practices will be sufficient” to justify dispensing with the “regulated market of significant size” test.
The Exchange notes that the Commission has also previously approved the listing and trading of a series of Commodity-Based Trust Shares on another exchange that, like the Fund, holds two commodities.
CSC Delaware Trust Company, a subsidiary of the Corporation Service Company, is the trustee (“Trustee”). Bank of New York Mellon is the custodian for the Fund's cash and cash equivalents
According to the Registration Statement, the Trust is neither an investment company registered under the 1940 Act,
Neither the Trust or the Fund, nor the Sponsor, nor the Custodian, nor any other person associated with the Trust or Fund will, directly or indirectly, engage in action where any portion of the Fund's ether becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ether or generate income or other earnings. The Fund will not acquire and will disclaim any incidental right (“IR”) or IR asset received, for example as a result of forks or airdrops, and such assets will not be taken into account for purposes of determining the Fund's net asset value (“NAV”).
When the Fund sells or redeems its Shares, it will do so in cash transactions in large blocks of 50,000 Shares (a “Creation Basket”) at the Fund's NAV. For creations, authorized participants will deliver, or facilitate the delivery of, cash to the Fund's account with the Cash Custodian in exchange for Shares. Upon receipt of an approved creation order, the Sponsor, on behalf of the Fund, will submit to one or more previously onboarded trading partners an order to buy the amount of bitcoin and ether represented by a Creation Basket.
According to the Registration Statement and as further described below, the investment objective of the Fund is to seek to provide investment results that closely correspond, before Fund expenses and liabilities, to the performance of the Index. The Fund will seek to achieve its investment objective by investing in bitcoin and ether in approximately the same weights as they represent in the Index. The Index is a free float-adjusted market capitalization weighted index of liquid digital assets that are recognized as being in conformance with prevailing markets regulations of major financial jurisdictions as determined by CF Benchmarks Ltd. (the “Index Provider”).
In seeking to achieve its investment objective, the Fund will hold only bitcoin, ether, cash, and cash equivalents. The price of bitcoin and ether within the Index is based on the CME CF Bitcoin Reference Rate—New York Variant for the Bitcoin—U.S. Dollar trading pair (the “CF Bitcoin Reference Rate”) and the CME CF Ether-Dollar Reference Rate—New York Variant for the ether-U.S. Dollar trading pair (the “CF Ether Reference Rate”, and together with the CF Bitcoin Reference Rate, the “CF Reference Rates”).
If a CF Reference Rate is not available or the Sponsor determines, in its sole discretion, that a CF Reference Rate should not be used, the Fund's holdings may be fair valued in accordance with the policy approved by the Sponsor.
As described in the Registration Statement, the Fund generally seeks to reflect the price of the digital assets included in the Index. Currently, the Index's only constituent digital assets are bitcoin and ether. The Fund's investment objective is to seek to provide investment results that closely correspond, before Fund expenses and liabilities, to the performance of the Index. The Fund will seek to achieve its investment objective by investing in bitcoin and ether in approximately the same weights as they represent in the Index.
The Index is owned, administered and calculated by the Index Provider. The Index is derived from a rules-based methodology and related ground rules (together, the “Index Rules”), which are overseen by the Index Provider. Eligible constituent digital assets are screened, including for their liquidity, asset turnover and ability to be stored in custody by third parties that have regulatory approval to provide services for the safe keeping of digital assets on behalf of investors. To be eligible for inclusion in the Index, the digital asset (1) must be listed on two or more eligible constituent trading platforms as determined by the Index Provider and (2) must be supported by one or more eligible third-party custodians as determined by the Index Provider. Digital assets that are pegged to the
The free float supply of each digital asset is determined by the Index Provider in accordance with the Index Rules, with different calculations applying depending on whether the digital asset is determined to be “coin-centric” (such as bitcoin) or “account-centric” (such as ether). The Index is rebalanced and reconstituted quarterly. The Sponsor will seek to reconstitute and rebalance the Fund's portfolio in accordance with any reconstitution and rebalancing of the Index. Any such reconstitution and rebalancing of the Fund's portfolio will occur without U.S. registered broker-dealer intermediation.
The price of bitcoin and ether within the Index is based on the respective CF Reference Rate (
In addition, the Sponsor notes that an oversight function is implemented by the Index Provider in seeking to ensure that the CF Reference Rates are administered through codified policies for index integrity. CF Reference Rate data and the description of the CF Reference Rates are based on information made publicly available by the Index Provider on its website at
NAV means the total assets of the Fund (which includes bitcoin, ether, cash and cash equivalents) less total liabilities of the Fund. The Administrator will determine the NAV of the Fund on each day that the Exchange is open for regular trading, as promptly as practical after 4:00 p.m. ET. The NAV of the Fund is the aggregate value of the Fund's assets less its estimated accrued but unpaid liabilities (which include accrued expenses). In determining the Fund's NAV, the Administrator values the bitcoin and ether held by the Fund based on the CF Reference Rates as of 4:00 p.m. ET. The Administrator also determines the NAV per Share.
The NAV for the Fund will be calculated by the Administrator once a day and will be disseminated daily to all market participants at the same time.
If one or both of the CF Reference Rates is not available or the Sponsor determines, in its sole discretion, that the CF Bitcoin Reference Rate or the CF Ether Reference Rate should not be used, the Fund's holdings may be fair valued in accordance with the policy approved by the Sponsor.
On each business day, as soon as practicable after 4:00 p.m. ET, the Administrator evaluates the bitcoin and ether held by the Fund as reflected by the CF Reference Rates and determines the NAV of the Fund.
The CF Reference Rates serve as once-a-day benchmark rates of the U.S. dollar price of ether (USD/ETH) and bitcoin (USD/BTC), calculated as of 4:00 p.m. ET. The CF Reference Rates aggregate the trade flow of several ether and bitcoin trading platforms, during an observation window between 3:00 p.m. and 4:00 p.m. ET into the U.S. dollar price of one bitcoin and ether at 4:00 p.m. ET. Specifically, the CF Reference Rates are calculated based on the “Relevant Transactions” (as defined below) of all of its constituent bitcoin and ether trading platforms, which are currently Coinbase, Bitstamp, Kraken, itBit, LMAX Digital and Gemini (the “Constituent Platforms”), as follows:
• All Relevant Transactions are added to a joint list, recording the time of execution, trade price and size for each transaction.
• The list is partitioned by timestamp into 12 equally-sized time intervals of 5 (five) minute length.
• For each partition separately, the volume-weighted median trade price is calculated from the trade prices and sizes of all Relevant Transactions,
• The CF Reference Rate is then determined by the equally-weighted average of the volume medians of all partitions.
The Constituent Platforms may change from time to time. The CF Reference Rates do not include any futures prices in their methodologies. A “Relevant Transaction” is any cryptocurrency versus U.S. dollar spot trade that occurs during the observation window between 3:00 p.m. and 4:00 p.m. ET on a Constituent Platform in the XBT/USD and ETH/USD pairs that are reported and disseminated by a Constituent Platform through its publicly available Application Programming Interface (“API”) and observed by the Index Provider.
The Sponsor believes that the use of the CF Reference Rates is reflective of a reasonable valuation of the average spot price of ether and bitcoin and that resistance to manipulation is a priority aim of its design methodology. The methodology: (i) takes an observation period and divides it into equal partitions of time; (ii) then calculates the volume-weighted median of all transactions within each partition; and (iii) the value is determined from the arithmetic mean of the volume-weighted medians, equally weighted. By employing the foregoing steps, the CF Reference Rates thereby seek to ensure that transactions in ether and bitcoin conducted at outlying prices do not have an undue effect on the value of the CF Reference Rates, large trades or clusters of trades transacted over a short period of time will not have an undue influence on the CF Reference Rates, and the effect of large trades at prices that deviate from the prevailing price are mitigated from having an undue influence on the CF Reference Rates.
The website for the Fund, which will be publicly accessible at no charge, will contain the following information: (a) the current NAV per Share daily and the prior business day's NAV per Share and the reported BZX Official Closing Price;
The Intraday Indicative Value (“IIV”) will be calculated by using the prior day's closing NAV per Share as a base and updating that value during Regular Trading Hours
The price of bitcoin and ether will be made available by one or more major market data vendors, updated at least every 15 seconds during Regular Trading Hours.
As noted above, each CF Reference Rate is calculated daily and aggregates the notional value of trading activity across major spot trading platforms. CF Reference Rate data, the CF Reference Rate value, and the description of the CF Reference Rate are based on information made publicly available by the Index Provider on its website at
Quotation and last sale information for bitcoin and ether is widely disseminated through a variety of major market data vendors, including Bloomberg and Reuters. Information relating to trading, including price and volume information, in bitcoin and ether are available from major market data vendors and from the trading platforms on which ether and bitcoin are traded. Depth of book information is also available from ether and bitcoin trading platforms. The normal trading hours for ether and bitcoin trading platforms are 24 hours per day, 365 days per year.
Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's BZX Official Closing Price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA.
The Custodian carefully considers the design of the physical, operational and cryptographic systems for secure storage of the Fund's private keys in an effort to lower the risk of loss or theft. The Custodian utilizes a variety of security measures to ensure that private keys necessary to transfer digital assets remain uncompromised and that the Fund maintains exclusive ownership of its assets. The Custodian will keep the private keys associated with the Fund's bitcoin and ether in “cold storage”
When the Fund sells or redeems its Shares, it will do so in cash transactions in Creation Baskets that are based on the quantity of bitcoin and ether attributable to each Share of the Fund at the NAV. According to the Registration Statement, on any business day, an authorized participant may place an order to create one or more Creation Baskets. Purchase orders for cash transaction Creation Baskets must be placed by 2:00 p.m. Eastern Time, or the close of regular trading on the Exchange, whichever is earlier. The day on which an order is properly received is considered the purchase order date. The total deposit of cash required is based on the combined NAV of the number of Shares included in the Creation Baskets being created determined as of 4:00 p.m. ET on the purchase order date. The Administrator determines the quantity of bitcoin and ether associated with a Creation Basket for a given day by dividing the number of bitcoin and ether held by the Fund as of the opening of business on that business day, adjusted for the amount of bitcoin and ether constituting estimated accrued but unpaid fees and expenses of the Fund as of the opening of business on that business day, by the quotient of the number of Shares outstanding at the opening of business divided by the number of Shares in a Creation Basket. The procedures by which an authorized participant can redeem one or more Creation Baskets mirror the procedures for the creation of Creation Baskets.
The authorized participants will deliver only cash to create Shares and will receive only cash when redeeming Shares. Further, authorized participants will not directly or indirectly purchase, hold, deliver, or receive bitcoin or ether as part of the creation or redemption process or otherwise direct the Fund or a third-party with respect to purchasing, holding, delivering, or receiving bitcoin or ether as part of the creation or redemption process.
The Fund will create Shares by receiving ether or bitcoin from a third-party that is not the authorized participant and the Fund—not the authorized participant—is responsible for selecting the third-party to deliver the ether and bitcoin. Further, the third-party will not be acting as an agent of the authorized participant with respect to the delivery of the ether and bitcoin to the Fund or acting at the direction of the authorized participant with respect to the delivery of the bitcoin and ether to the Fund. The Fund will redeem Shares by delivering bitcoin and ether to a third-party that is not the authorized participant and the Fund—not the authorized participant—is responsible for selecting the third-party to receive the ether and bitcoin. Further, the third-party will not be acting as an agent of the authorized participant with respect
The Sponsor (including its delegates) will maintain ownership and control of the Fund's ether and bitcoin in a manner consistent with good delivery requirements for spot commodity transactions.
The Shares will be subject to BZX Rule 14.11(e)(4), which sets forth the initial and continued listing criteria applicable to Commodity-Based Trust Shares. The Exchange represents that, for initial and continued listing, the Fund must be in compliance with Rule 10A-3 under the Act. A minimum of 100,000 Shares will be outstanding at the commencement of listing on the Exchange. The Exchange will obtain a representation that the NAV will be calculated daily and that the NAV and information about the assets of the Fund will be made available to all market participants at the same time. The Exchange notes that the Shares will meet the definition of Rule 14.11(e)(4)(C)(i) except that the Fund will hold two commodities (
Upon termination of the Fund, the Shares will be removed from listing. The Trustee is a trust company having substantial capital and surplus and the experience and facilities for handling corporate trust business, as required under Rule 14.11(e)(4)(E)(iv)(a) and no change will be made to the trustee without prior notice to and approval of the Exchange. The Exchange also notes that, pursuant to Rule 14.11(e)(4)(F), neither the Exchange nor any agent of the Exchange shall have any liability for damages, claims, losses or expenses caused by any errors, omissions or delays in calculating or disseminating any underlying commodity value, the current value of the underlying commodity required to be deposited to the Fund in connection with issuance of Commodity-Based Trust Shares; resulting from any negligent act or omission by the Exchange, or any agent of the Exchange, or any act, condition or cause beyond the reasonable control of the Exchange, its agent, including, but not limited to, an act of God; fire; flood; extraordinary weather conditions; war; insurrection; riot; strike; accident; action of government; communications or power failure; equipment or software malfunction; or any error, omission or delay in the reports of transactions in an underlying commodity. Finally, as required in Rule 14.11(e)(4)(G), the Exchange notes that any registered market maker (“Market Maker”) in the Shares must file with the Exchange in a manner prescribed by the Exchange and keep current a list identifying all accounts for trading in an underlying commodity, related commodity futures or options on commodity futures, or any other related commodity derivatives, which the registered Market Maker may have or over which it may exercise investment discretion. No registered Market Maker shall trade in an underlying commodity, related commodity futures or options on commodity futures, or any other related commodity derivatives, in an account in which a registered Market Maker, directly or indirectly, controls trading activities, or has a direct interest in the profits or losses thereof, which has not been reported to the Exchange as required by this Rule. In addition to the existing obligations under Exchange rules regarding the production of books and records (see,
The Exchange is able to obtain information regarding trading in the Shares and the underlying ether and bitcoin, CME Ether Futures and CME Bitcoin Futures, options on CME Ether Futures and CME Bitcoin Futures, or any other bitcoin or ether derivative through members acting as registered Market Makers, in connection with their proprietary or customer trades.
As a general matter, the Exchange has regulatory jurisdiction over its Members and their associated persons, which include any person or entity controlling a Member. To the extent the Exchange may be found to lack jurisdiction over a subsidiary or affiliate of a Member that does business only in commodities or futures contracts, the Exchange could obtain information regarding the activities of such subsidiary or affiliate through surveillance sharing agreements with regulatory organizations of which such subsidiary or affiliate is a member.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. The Exchange will halt trading in the Shares under the conditions specified in BZX Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) the extent to which trading is not occurring in the bitcoin or ether underlying the Shares; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 14.11(e)(4)(E)(ii), which sets forth circumstances under which trading in the Shares may be halted.
If the IIV or the value of the Index is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the IIV or the value of the Index occurs. If the interruption to the dissemination of the IIV or the value of the Index persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption.
In addition, if the Exchange becomes aware that the NAV with respect to the Shares is not disseminated to all market participants at the same time, it will halt trading in the Shares until such time as
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. BZX will allow trading in the Shares during all trading sessions on the Exchange. The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in BZX Rule 11.11(a) the minimum price variation for quoting and entry of orders in securities traded on the Exchange is $0.01 where the price is greater than $1.00 per share or $0.0001 where the price is less than $1.00 per share. The Shares of the Fund will conform to the initial and continued listing criteria set forth in BZX Rule 14.11(e)(4).
The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Commodity-Based Trust Shares. FINRA conducts certain cross-market surveillances on behalf of the Exchange pursuant to a regulatory services agreement. The Exchange is responsible for FINRA's performance under this regulatory services agreement.
The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares, CME Ether Futures and CME Bitcoin Futures, or any other bitcoin or ether derivative with other markets and other entities that are members of the ISG, and the Exchange, or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares, CME Ether Futures and CME Bitcoin Futures, or any other ether or bitcoin derivative from such markets and other entities.
In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
The Sponsor has represented to the Exchange that it will advise the Exchange of any failure by the Fund or the Shares to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Exchange Act, the Exchange will surveil for compliance with the continued listing requirements. If the Fund or the Shares are not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (i) the procedures for the creation and redemption of Creation Baskets (and that the Shares are not individually redeemable); (ii) BZX Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (iii) how information regarding the IIV and the Fund's NAV are disseminated; (iv) the risks involved in trading the Shares outside of Regular Trading Hours when an updated IIV will not be calculated or publicly disseminated; (v) the requirement that members deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (vi) trading information. The Information Circular will also reference the fact that there is no regulated source of last sale information regarding ether or bitcoin, that the Commission has no jurisdiction over the trading of ether or bitcoin as a commodity, and that the CFTC has regulatory jurisdiction over the trading of CME Ether Futures contracts and CME Bitcoin Futures contracts and options on CME Ether Futures contracts and CME Bitcoin Futures contracts.
In addition, the Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Shares. Members purchasing the Shares for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Act.
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Commission has approved numerous series of Trust Issued Receipts,
The Commission has historically approved or disapproved exchange filings to list and trade series of Trust Issued Receipts, including spot-based Commodity-Based Trust Shares, on the basis of whether the listing exchange has in place a comprehensive surveillance sharing agreement with a regulated market of significant size related to the underlying commodity to be held.
Both the Exchange and CME are members of the ISG.
In the Spot Ether ETP Approval Order the Commission also concluded that:
As such, the listing exchanges demonstrated “other means to prevent fraudulent and manipulative acts and practices will be sufficient” to justify dispensing with the “regulated market of significant size” test.
The Exchange notes that the Commission has also previously approved the listing and trading of a series of Commodity-Based Trust Shares on another exchange that, like the Fund, holds two commodities.
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed on the Exchange pursuant to the initial and continued listing criteria in Exchange Rule 14.11(e)(4). The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Commodity-Based Trust Shares. The Sponsor has represented to the Exchange that it will advise the Exchange of any failure by the Fund or the Shares to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Exchange Act, the Exchange will surveil for compliance with the continued listing requirements. If the Fund or the Shares are not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. The Exchange may obtain information regarding trading in the Shares and listed ether or bitcoin derivatives via the ISG, from other exchanges who are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement.
In addition to the price transparency of the Index, the Fund will provide information regarding the Fund's bitcoin and ether holdings as well as additional data regarding the Fund.
The website for the Fund, which will be publicly accessible at no charge, will contain the following information: (a) the current NAV per Share daily and the prior business day's NAV per Share and the reported BZX Official Closing Price;
The IIV will be calculated by using the prior day's closing NAV per Share as a base and updating that value during Regular Trading Hours to reflect changes in the value of the Fund's bitcoin and ether holdings during the trading day, which are based on CME CF Ether-Dollar Real Time Index and CME CF Bitcoin Real Time Index. The IIV disseminated during Regular Trading Hours should not be viewed as an actual real-time update of the NAV, which will be calculated only once at the end of each trading day. The IIV will be widely disseminated on a per Share basis every 15 seconds during the Exchange's Regular Trading Hours through the facilities of the consolidated tape association (CTA) and Consolidated Quotation System (CQS) high speed lines. In addition, the IIV will be available through on-line information services such as Bloomberg and Reuters.
The price of bitcoin and ether will be made available by one or more major market data vendors, updated at least every 15 seconds during Regular Trading Hours.
As noted above, each CF Reference Rate is calculated daily and aggregates the notional value of trading activity across major spot trading platforms. CF Reference Rate data, the CF Reference Rate value, and the description of the
Quotation and last sale information for ether and bitcoin is widely disseminated through a variety of major market data vendors, including Bloomberg and Reuters. Information relating to trading, including price and volume information, in bitcoin and ether are available from major market data vendors and from the trading platforms on which ether and bitcoin are traded. Depth of book information is also available from ether and bitcoin trading platforms. The normal trading hours for ether and bitcoin trading platforms are 24 hours per day, 365 days per year.
Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's BZX Official Closing Price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA.
The proposed rule change is designed to perfect the mechanism of a free and open market, and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a surveillance sharing agreement. The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares, CME Ether Futures and CME Bitcoin Futures, or any other bitcoin or ether derivative with other markets and other entities that are members of the ISG, and the Exchange, or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares, CME Ether Futures and CME Bitcoin Futures, or any other ether or bitcoin derivative from such markets and other entities.
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposed rule change, rather will facilitate the listing and trading of an additional exchange-traded product that will enhance competition among both market participants and listing venues, to the benefit of investors and the marketplace.
The Exchange neither solicited nor received comments on the proposed rule change.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission” or “SEC”).
Notice.
Notice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the “Act”) and rule 17d-1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 under the Act.
The Commission:
Laura J. Riegel, Senior Counsel, or Thomas Ahmadifar, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
For Applicants' representations, legal analysis, and conditions, please refer to Applicants' fourth amended and restated application, dated December 13, 2024, which may be obtained via the Commission's website by searching for the file number at the top of this document, or for an Applicant using the Company name search field, on the SEC's EDGAR system.
The SEC's EDGAR system may be searched at
For the Commission, by the Division of Investment Management, under delegated authority.
On November 8, 2024, Cboe BZX Exchange, Inc. (“BZX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing with the Commission a proposed rule change to amend Rule 19.3, Criteria for Underlying Securities. The text of the proposed rule change is provided in Exhibit 5.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the
The Exchange proposes to amend Exchange Rule 19.3 (Criteria for Underlying Securities) to allow the Exchange to list and trade options on the Fidelity Wise Origin Bitcoin Fund (“the Fidelity Fund”) and the ARK 21Shares Bitcoin ETF (the “ARK 21 Funds” and, with the Fidelity Fund, the “Bitcoin Funds”), designating the Bitcoin Funds as appropriate for options trading on the Exchange.
Current Exchange Rule 19.3(i) provides that, subject to certain other criteria set forth in that Rule, securities deemed appropriate for options trading include shares or other securities (“Fund Shares”) that represent certain types of interests,
The Bitcoin Funds are Bitcoin-backed commodity exchange-traded funds (“ETFs”) structured as trusts. Similar to any Fund Share currently deemed appropriate for options trading under Rule 19.3(i), the investment objective of each Bitcoin Fund is for its shares to reflect the performance of Bitcoin (less the expenses of the trust's operations), offering investors an opportunity to gain exposure to Bitcoin without the complexities of Bitcoin delivery. As is the case for Fund Shares currently deemed appropriate for options trading, a Bitcoin Fund's shares represent units of fractional undivided beneficial interest in the trust, the assets of which consist principally of Bitcoin and are designed to track Bitcoin or the performance of the price of Bitcoin and offer access to the Bitcoin market.
The Exchange believes each Bitcoin Fund satisfies the Exchange's initial listing standards for Fund Shares on which the Exchange may list options. Specifically, each Bitcoin Fund satisfies the initial listing standards set forth in Rule 19.3(i), as is the case for other Fund Shares on which the Exchange lists options (including trusts that hold commodities). Rule 19.3(i)(1) requires that Fund Shares either (1) meet the criteria and standards set forth in Rule 19.3(a) and (b), or (2) are available for creation or redemption each business day in cash or in kind from the investment company, commodity pool or other entity at a price related to net asset value, and the investment company, commodity pool or other entity is obligated to provide that Fund Shares may be created even if some or all of the securities and/or cash required to be deposited have not been received by the Fund, the unit investment trust or the management investment company, provided the authorized creation participant has undertaken to deliver the securities and/or cash as soon as possible and such undertaking is secured by the delivery and maintenance of collateral consisting of cash or cash equivalents satisfactory to the Fund, all as described in the Fund's or unit trust's prospectus. Each Bitcoin Fund satisfies Rule 19.3(i)(1)(B) as each is subject to this creation and redemption process.
While not required by Exchange Rules for purposes of options listings, the Exchange believes each Bitcoin Fund satisfies the criteria and guidelines set forth in Rule 19.3(a) and (b). Pursuant to Rule 19.3(a), a security (which includes a Fund Share) on which options may be listed and traded on the Exchange must be registered with the Commission and be an NMS stock (as defined in Rule 600 of Regulation NMS under the Securities Exchange Act of 1934, as amended (the “Act”)), and be characterized by a substantial number of outstanding shares that are widely held and actively traded.
Each Bitcoin Fund had significantly more than 7,000,000 shares outstanding (approximately 29 and 6.5 times that amount, respectively), which is the minimum number of shares of a corporate stock that the Exchange generally requires to list options on that stock pursuant to Rule 19.3(b). The Exchange believes this demonstrates that each Bitcoin Fund is characterized by a substantial number of outstanding shares.
Further, the below table contains information regarding the number of beneficial holders of the Bitcoin Funds as of the specified dates:
As this table shows, each Bitcoin Fund has significantly more than 2,000 beneficial holders (approximately 140 and 35 times more, respectively), which is the minimum number of holders the Exchange generally requires for corporate stock in order to list options on that stock pursuant to Rule 19.3(b). Therefore, the Exchange believes the shares of each Bitcoin Fund are widely held.
The Exchange also believes the shares of each Bitcoin Fund are actively traded. As of August 7, 2024, the total trading volume (by shares) for each fund for the six-month period of February 8 through August 7, 2024 and the approximate average daily volume (“ADV”) (in shares and notional) over the 30-day period of July 9 through August 7, 2024 for each Bitcoin Fund was as follows:
As demonstrated above, despite the fact that the Bitcoin Funds had been trading for approximately seven months
Options on the Bitcoin Funds will be subject to the Exchange's continued listing standards set forth in Rule 19.4(g) for Fund Shares deemed appropriate for options trading pursuant to Rule 19.3(i). Specifically, 19.4(g) provides that Fund Shares that were initially approved for options trading pursuant to Rule 19.3 will not be deemed to meet the requirements for continued approval, and the Exchange shall not open for trading any additional series of option contracts of the class covering such Fund Shares if the security ceases to be an NMS stock (see Rule 19.4(b)(4)). Additionally, the Exchange will not open for trading any additional series of option contracts of the class covering Fund Shares in any of the following circumstances: (1) in the case of options covering Fund Shares approved for trading under Rule 19.3(i)(4)(A), in accordance with the terms of Rule 19.4(b)(1), (2) and (3); (2) in the case of options covering Fund Shares approved pursuant to Rule 19.3(i)(4)(B), following the initial 12-month period beginning upon the commencement of trading in the Fund Shares on a national securities exchange and are defined as NMS stock under Rule 600 of Regulation NMS, there were fewer than 50 record and/or beneficial holders of such Fund Shares for 30 consecutive days; (3) the value of the index, non-U.S. currency, portfolio of commodities including commodity futures contracts, options on commodity futures contracts, swaps, forward contracts and/or options on physical commodities and/or Financial Instruments or Money Market Instruments, or portfolio of securities on which the Fund Shares are based is no longer calculated or available; or (4) such other event occurs or condition exists that in the opinion of the Exchange makes further dealing in such options on the Exchange inadvisable.
Options on each Bitcoin Fund will be physically settled contracts with American-style exercise.
Pursuant to Rule 19.5, Interpretation and Policy .01, which governs strike
Bitcoin Fund options will trade in the same manner as any other Fund Share options on the Exchange. The Exchange Rules that currently apply to the listing and trading of all Fund Share options on the Exchange, including, for example, Rules that govern listing criteria, expirations, exercise prices, minimum increments, margin requirements, customer accounts, and trading halt procedures will apply to the listing and trading of Bitcoin Funds options on the Exchange in the same manner as they apply to other options on all other Fund Shares that are listed and traded on the Exchange, including the precious-metal backed commodity Fund Shares already deemed appropriate for options trading on the Exchange pursuant to current Rule 19.3(i).
Pursuant to Rules 18.7
The Exchange then compared the number of outstanding shares of the Bitcoin Funds to those of other ETFs. The following table provides the approximate average position (and exercise limit) of ETF options with similar outstanding shares (as of August 27, 2024), compared to the proposed position and exercise limit for the Bitcoin Fund options:
The Exchange considered current position and exercise limits of options on ETFs with outstanding shares comparable to those of each Bitcoin Fund, with the proposed limit significantly lower (between two and ten times lower) than the average limits of the options on the other ETFs. As discussed above, the Bitcoin Funds are actively held and widely traded: (1) each Bitcoin Fund (as of August 7, 2024) had significantly more than 7,000,000 shares outstanding, which is the minimum number of shares of a corporate stock that the Exchange generally requires to list options on that stock pursuant to Rule 19.3(b)(1); (2) each Bitcoin Fund (as of the dates listed above) had significantly more than 2,000 beneficial holders, which is the minimum number of holders the Exchange generally requires for corporate stock in order to list options on that stock pursuant to Rule 19.3(b)(2); and (3) each Bitcoin Fund had a six-month trading volume substantially higher than 2,400,000 shares, which is the minimum 12-month volume the Exchange generally requires for a security in order to list options on that security as set forth in Rule 19.3(b)(4).
With respect to outstanding shares, if a market participant held the maximum number of positions possible pursuant to the proposed position and exercise limits, the equivalent shares represented by the proposed position/exercise limit would represent the following
As this table demonstrates, if a market participant held the maximum permissible options positions in one of the Bitcoin Fund options and exercised all of them at the same time, that market participant would control a small percentage of the outstanding shares of the underlying Bitcoin Fund.
There are two methods of qualifying for a position limit tier above 25,000 option contracts. The first method is based on six-month trading volume in the underlying security, and the second method is based on slightly lower six-month trading volume and number of shares outstanding in the underlying security. An underlying stock or ETF that qualifies for method two based on trading volume and number of shares outstanding would be required to have the minimum number of outstanding shares as shown in middle column of the table below.
The table, which provides the equivalent shares of the position limits applicable to equity options, including ETFs, further represents the percentages of the minimum number of outstanding shares that an underlying stock or ETF must have to qualify for that position limit (under the second method described above), all of which are higher than the percentages for the Bitcoin Funds.
The equivalent shares represented by the proposed position and exercise limits for each Bitcoin Fund as a percentage of outstanding shares of the underlying Bitcoin Fund is significantly lower than the percentage for the lowest possible position limit for equity options of 25,000 (under 6% compared to 40%) and is lower than that percentage for each current position limit bucket.
Further, the proposed position and exercise limits for each Bitcoin Fund option are significantly below the limits that would otherwise apply pursuant to current Rules 18.7 and 18.9. These position and exercise limits are the lowest position and exercise limits available in the options industry, are extremely conservative and more than appropriate given the market capitalization, average daily volume, and high number of outstanding shares of the Bitcoin Funds.
All of the above information demonstrates that the proposed position and exercise limits for the Bitcoin Fund options are more than reasonable and appropriate. The trading volume, ADV, and outstanding shares of each Bitcoin Fund demonstrate that these funds are actively traded and widely held, and proposed position and exercise limits are well below those of other ETFs with similar market characteristics. The proposed position and exercise limits are the lowest position and exercise limits available for equity options in the industry, are extremely conservative, and are more than appropriate given each Bitcoin Fund's market capitalization, ADV, and high number of outstanding shares.
Today, the Exchange has an adequate surveillance program in place for options. MEMX intends to apply those same program procedures to options on the Bitcoin Funds that it applies to the Exchange's other options products.
The underlying shares of spot bitcoin exchange-traded products (“ETPs”), including the Bitcoin Funds, are also subject to safeguards related to addressing market abuse and manipulation. As the Commission stated in its order approving proposals of several exchanges to list and trade shares of spot bitcoin-based ETPs, “[e]ach Exchange has a comprehensive surveillance-sharing agreement with the CME via their common membership in the Intermarket Surveillance Group. This facilitates the sharing of information that is available to the CME through its surveillance of its markets, including its surveillance of the CME bitcoin futures market.
The Exchange has also analyzed its capacity and represents that it believes the Exchange and OPRA have the necessary systems capacity to handle the additional traffic associated with the listing of new series that may result from the introduction of options on Bitcoin Funds up to the number of expirations currently permissible under the Rules. Because the proposal is limited to two classes, the Exchange believes any additional traffic that may be generated from the introduction of Bitcoin Fund options will be manageable.
The Exchange believes that offering options on Bitcoin Funds will benefit investors by providing them with an additional, relatively lower cost investing tool to gain exposure to the price of Bitcoin and hedging vehicle to meet their investment needs in connection with Bitcoin-related products and positions. The Exchange expects investors will transact in options on Bitcoin Funds in the unregulated over-the-counter (“OTC”) options market,
2.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange the Exchange [sic] believes that the proposal to list and trade options on the Bitcoin Funds will remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, protect investors because offering options on the Bitcoin Funds will provide investors with an opportunity to realize the benefits of utilizing options on a Bitcoin Fund, including cost efficiencies and increased hedging strategies. The Exchange believes that offering Bitcoin Fund options will benefit investors by providing them with a relatively lower-cost risk management tool, which will allow them to manage their positions and associated risk in their portfolios more easily in connection with exposure to the price of Bitcoin and
The Exchange also believes the proposed rule change will remove impediments to and perfect the mechanism of a free and open market and a national market system, because it is consistent with current Exchange Rules previously filed with the Commission. Options on the Bitcoin Funds satisfy the initial listing standards and continued listing standards currently in the Exchange Rules applicable to options on all Fund Shares, including Fund Shares that hold other commodities already deemed appropriate for options trading on the Exchange. Additionally, as demonstrated above, each Bitcoin Fund is characterized by a substantial number of shares that are widely held and actively traded. Bitcoin Fund options will trade in the same manner as any other Fund Share options—the same Exchange Rules that currently govern the listing and trading of all Fund Share options, including permissible expirations, strike prices and minimum increments, and applicable margin requirements, will govern the listing and trading of options on Bitcoin Funds in the same manner.
The Exchange believes the proposed position and exercise limits are designed to prevent fraudulent and manipulative acts and practices and promote just and equitable principles of trade, as they are designed to address potential manipulative schemes and adverse market impacts surrounding the use of options, such as disrupting the market in the security underlying the options. The proposed position and exercise limits are 25,000 contracts, which is the lowest limit applicable to any equity options (including ETF and options on other Bitcoin ETFs). The Exchange believes the proposed position and exercise limits are extremely conservative for each Bitcoin Fund option given the trading volume and outstanding shares for each. The information above demonstrates that the average position and exercise limits of options on ETFs with comparable outstanding shares and trading volume to those of the Bitcoin Funds are significantly higher than the proposed position and exercise limits for Bitcoin Fund options. Therefore, the proposed position and exercise limits for the Bitcoin Fund options are conservative relative to options on ETFs with comparable market characteristics.
Further, given that the issuer of each Bitcoin Fund may create and redeem shares that represent an interest in Bitcoin, the Exchange believes it is relevant to compare the size of a position limit to the market capitalization of the Bitcoin market. As of August 27, 2024, the global supply of Bitcoin was 19,745,940, and the price of one Bitcoin was approximately $59,466.82,
Therefore, if a market participant with the maximum 25,000 same side contracts in either Fidelity Fund options or ARK 21 Fund options exercised all positions at one time, such an event would have no practical impact on the Bitcoin market.
The Exchange also believes the proposed limits are appropriate given position limits for Bitcoin futures. For example, the Chicago Mercantile Exchange (“CME”) imposes a position limit of 2,000 futures (for the initial spot month) on its Bitcoin futures contract.
The approximate number of option contracts for each Bitcoin Fund that equate to the notional value of CME Bitcoin futures is significantly higher than the proposed limit of 25,000 options contract for each Bitcoin Fund option. The fact that many options ultimately expire out-of-the-money and thus are not exercised for shares of the underlying, while the delta of a Bitcoin Future is 1, further demonstrates how conservative the proposed limits of 25,000 options contracts are for the Bitcoin Fund options.
The Exchange notes, unlike options contracts, CME position limits are calculated on a net futures-equivalent basis by contract and include contracts that aggregate into one or more base contracts according to an aggregation ratio(s).
The Exchange believes the proposed position and exercise limits will have no material impact to the supply of Bitcoin. For example, consider again the proposed position limit of 25,000 option contracts for each Bitcoin Fund option. As noted above, a position limit of 25,000 same side contracts effectively restricts a market participant from holding positions that could result in the receipt of no more than 2,500,000 shares of the applicable Bitcoin Fund (if that market participant exercised all its options). As of August 7, 2024, the Bitcoin Funds had the number of shares outstanding set forth in the table below. The table below also sets forth the approximate number of market participants that could hold the maximum of 25,000 same side positions in each Bitcoin Fund that would equate to the number of shares outstanding of that Bitcoin Fund:
This means if 80 market participants had 25,000 same side positions in Fidelity Fund options, each of them would have to simultaneously exercise all of those options to create a scenario that may put the underlying security under stress. Similarly, this means if 18 market participants had 25,000 same side positions in ARK 21 Fund options, each of them would have to simultaneously exercise all of those options to create a scenario that may put the underlying security under stress. The Exchange believes it is highly unlikely for either such event to occur; however, even if either such event did occur, the Exchange would not expect either Bitcoin Fund to be under stress because such an event would merely induce the creation of more shares through the trust's creation and redemption process.
As of August 7, 2024, the global supply of Bitcoin was approximately 19,736,528.
The Exchange believes the available supply of Bitcoin is not relevant to the determination of position and exercise limits for options overlying the Bitcoin Funds.
The Exchange notes that a Registration Statement on Form S-1 was filed with the Commission for each Bitcoin Fund, each of which described the supply of Bitcoin as being limited to 21,000,000 (of which approximately 90% had already been mined), and that the limit would be reached around the year 2140.
Based on the above information demonstrating, among other things, that each Bitcoin Fund is characterized by a substantial number of outstanding shares that are actively traded and widely held, the Exchange believes the proposed position and exercise limits are extremely conservative compared to those of ETF options with similar market characteristics. The proposed position and exercise limits reasonably and appropriately balance the liquidity provisioning in the market against the prevention of manipulation. The Exchange believes these proposed limits are effectively designed to prevent an individual customer or entity from establishing options positions that could be used to manipulate the market of the underlying as well as the Bitcoin market.
The Exchange represents that it has the necessary systems capacity to support the new Bitcoin Fund options. As discussed above, the Exchange believes that its existing surveillance and reporting safeguards are designed to deter and detect possible manipulative behavior which might arise from listing and trading Fund Share options, including Bitcoin Fund options.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. In this regard and as indicated above, the Exchange notes that the rule change is being proposed as a competitive response to a filing submitted by Cboe.
the purposes of the Act as the Bitcoin Fund options will be equally available to all market participants who wish to trade such options and will trade generally in the same manner as other options. The Exchange Rules that currently apply to the listing and trading of all Fund Share options on the Exchange, including, for example, Rules that govern listing criteria, expirations, exercise prices, minimum increments, margin requirements, customer accounts, and trading halt procedures will apply to the listing and trading of Bitcoin Funds options on the Exchange in the same manner as they apply to other options on all other Fund Shares that are listed and traded on the Exchange. Also, and as stated above, the Exchange already lists options on other commodity-based Fund Shares.
The Exchange does not believe that the proposal to list and trade options on Bitcoin Funds will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the extent that the advent of Bitcoin Fund options trading on the Exchange may make the Exchange a more attractive marketplace to market participants at other exchanges, such market participants are free to elect to become market participants on the Exchange. Additionally, other options exchanges are free to amend their listing rules, as applicable, to permit them to list and trade options on the Bitcoin Funds. The Exchange notes that listing and trading Bitcoin Fund options on the Exchange will subject such options to transparent exchange-based rules as well as price discovery and liquidity, as opposed to alternatively trading such options in the OTC market.
The Exchange believes that the proposed rule change may relieve any burden on, or otherwise promote, competition, as it is designed to increase competition for order flow on the Exchange in a manner that is beneficial to investors by providing them with a lower-cost option to hedge their investment portfolios. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues that offer similar products. Ultimately, the Exchange believes that offering Bitcoin Fund options for trading on the Exchange will promote competition by providing investors with an additional, relatively low-cost means to hedge their portfolios and meet their investment needs in connection with Bitcoin prices and Bitcoin-related products and positions on a listed options exchange.
The Exchange neither solicited nor received comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to amend the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and the Code of Arbitration Procedure for Industry Disputes (“Industry Code”) (together, “Codes”) to add new FINRA Rules 12808 and 13808 (Accelerated Processing) to accelerate the processing of arbitration proceedings for parties who qualify based on their age or health condition.
The text of the proposed rule change is available on FINRA's website at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
FINRA currently offers a program to expedite arbitration proceedings in the forum administered by FINRA Dispute Resolution Services (“DRS”) for parties who have a serious health condition or are at least 65 years old (“current program”).
Although the intent of the current program is to shorten case processing times for parties that qualify based on their age or health condition, cases that qualify for the current program close only marginally more quickly than cases that are not in the current program. While the median time for customer arbitrations that are not in the current program to close is approximately 15.7 months, the median time for customer arbitrations that are in the current program to close is approximately 13.7 months, a difference of just two months.
FINRA believes that it would protect investors and the public interest to materially shorten case processing times for those parties who may be unable to meaningfully participate in a lengthy arbitration because of their age or health condition. As is discussed more fully below, when a party is unable to meaningfully participate in an arbitration—for example, if they become ill and are unable to testify—the outcome of the proceeding may be affected. This potentially harms not only the immediate parties to the arbitration but also the broader investing public because the resolution of the arbitration may not accurately reflect the underlying merits of the case.
Accordingly, FINRA is proposing to add a new rule to the Codes that would help to accelerate the arbitration process for those parties who qualify based on their age or health condition. Unlike the current program, the proposed rule change would establish shortened case-processing deadlines for the parties, including the time to respond to discovery deadlines, and provide direction to arbitrators regarding how quickly the proceeding should be completed. By codifying these shortened deadlines and providing additional direction to arbitrators, FINRA believes that the length of the proceedings subject to the proposed rule change would shorten by approximately six months, which would make a meaningful difference for older parties or those suffering from a serious health condition.
Under the proposed rule change, parties would be able to request accelerated processing if they meet one of two eligibility requirements, based on their age or their health condition.
The first way for a party to qualify for accelerated processing under the proposed rule change would be based on their age. Under proposed Rules 12808(a)(1)(A) and 13808(a)(1)(A), a party may request accelerated processing of a case when initiating an arbitration or filing an answer provided that the party making the request is at least 70 years of age at the time of the request.
FINRA believes it is appropriate for parties who are 70 years of age and older to qualify for accelerated processing because these parties are more likely than younger individuals to become seriously ill or experience an adverse health condition during the course of an arbitration.
Further, as is discussed in more detail below, a party younger than 70, but who has an eligible health condition, still would be able to request accelerated processing under proposed Rules 12808(a)(1)(B) and 13808(a)(1)(B) provided that the party making the request certifies, in the manner and form required by the Director, that (i) the party has received a medical diagnosis and prognosis and (ii) based on that medical diagnosis and prognosis, the party has a reasonable belief that accelerated processing of the case is necessary to prevent prejudicing the party's interest in the arbitration.
FINRA understands that, under the proposed rule change, some younger parties would not be eligible to request accelerated processing based on either their age or their health condition. Although some of these parties might benefit if their arbitrations were completed more quickly, as discussed in more detail below,
First, under proposed Rules 12808(a)(3) and 13808(a)(3), parties who would not qualify for accelerated processing based on either their age or health condition still would be able to request, once the panel is appointed, that the panel consider other factors, including their age or a change in their health condition during the arbitration proceeding, when scheduling hearings and discovery, briefing, and motion deadlines. Thus, although these proceedings would not be subject to the shortened, rule-based deadlines of the proposed rule change, the panel may determine at a party's request, to expedite the proceedings based on the party's particular circumstances.
Second, due to the increase in the number of customer claimants who would qualify for accelerated processing,
Third, a lower age cut off may have a negative impact on non-accelerated customer arbitrations. Arbitrators and industry parties and their counsel are often involved in more than one arbitration at the same time and may seek to extend the case processing times of their concurrent, non-accelerated arbitrations in order to meet the shortened deadlines that would apply to their accelerated arbitrations.
Based on these considerations, FINRA believes that an age cutoff of 70 would help ensure that the proposed rule change is effective at helping those parties who would benefit most from accelerated processing. That said, if the Commission approves the proposed rule change, FINRA would monitor the program to determine if adjustments to the age cutoff for qualifying for accelerated processing are warranted.
In addition to allowing parties to qualify for accelerated processing based on their age, the proposed rule change separately would allow parties to qualify based on their health condition.
FINRA believes it is appropriate to allow parties, regardless of age, to qualify for accelerated processing based on an eligible health condition. Parties who are suffering from an eligible health condition may be unable to meaningfully participate in a lengthy arbitration proceeding, which, in turn, could affect the outcome of the proceeding.
Unlike the proposed rule change, the current program does not require a certification to qualify for expedited proceedings based on a party's health condition. Under the current program, the Director determines whether the party qualifies for the program on the face of the information contained in the party's request at the outset of the case through the online claim filing form, statement of claim, or optional cover letter.
FINRA believes that the proposed certification requirement is the most appropriate way to minimize unnecessary intrusions into a party's private health information while, at the same time, allowing FINRA to identify those individuals who could benefit most from accelerated processing because they are suffering from an eligible health condition.
FINRA understands the concerns of some forum users that, unless proof of their medical condition is required, parties may submit a false certification in order to qualify for accelerated processing.
Finally, some forum users have expressed the concern that parties who request accelerated processing on the basis of an eligible health condition could be subject to discovery requests for the production of medical records or other private information about their health condition.
Based on these considerations, FINRA believes that the proposed certification requirement and the threat of potential sanctions would be sufficient to protect against abuse of the process while, at the same time, minimizing unnecessary intrusions into a party's private medical information.
Finally, as noted above, for those parties who may benefit from shortened proceedings but do not meet the eligibility requirements of the proposed rule change, proposed Rules 12808(a)(3) and 13808(a)(3) would allow those parties to request that the panel consider other factors, including their age or a change in their health condition during the arbitration proceeding, when scheduling hearings and discovery, briefing, and motions deadlines. Thus, although these proceedings would not be subject to the shortened, rule-based deadlines of the proposed rule change, the panel may determine at a party's request, to expedite the proceedings based on the party's particular circumstances.
Under proposed Rules 12808(b)(1) and 13808(b)(1), the Director would be responsible for determining whether a requesting party qualifies for accelerated processing.
Once the Director determines that an arbitration qualifies for accelerated processing, the proposed rule change would accelerate the proceedings in three ways. First, the proposed rule change would accelerate the arbitrator selection process by shortening the deadlines for the Director to send the list of potential arbitrators to the
The first way that the proposed rule change would shorten the proceedings is by requiring that the Director send out the lists of potential arbitrators to the parties more quickly.
The second way that the proposed rule change would shorten the length of the proceedings is to provide arbitrators with direction as to how quickly the case should be completed. Specifically, under proposed Rules 12808(b)(2)(B) and 13808(b)(2)(B), the panel shall endeavor to render an award within 10 months of the date the Director determines that a case is subject to accelerated processing. In addition, under proposed Rules 12808(b)(2)(C) and 13808(b)(2)(C), the panel shall hold a prehearing conference at which it shall set discovery, briefing, and motions deadlines, and schedule hearing sessions, that are consistent with rendering an award within 10 months or less.
By providing arbitrators with specific guidance regarding how quickly they should endeavor to complete an arbitration, FINRA believes that the proposed rule change would be more likely than the current program—which does not provide arbitrators with any similar guidance—to significantly reduce the overall length of the proceedings in cases that qualify for accelerated processing.
FINRA also believes that 10 months is the appropriate timeframe within which arbitrators should endeavor to render awards in accelerated arbitrations. Currently, the median time for customer arbitrations to close by award after a hearing when they are not part of the current program is almost 16 months, as is discussed more fully below.
As noted above, although shortening the length of the proceedings for parties who qualify for accelerated processing is an important goal, FINRA understands that speed cannot come at the cost of fairness. However, FINRA believes that 10 months should provide a reasonable and fair opportunity for discovery, motions, briefing, and hearings to be completed.
At the same time, FINRA recognizes that there are some cases that may qualify for accelerated processing but that cannot reasonably be completed within 10 months because, for example, they are too complex. As to these matters, FINRA believes that the proposed rule change—which would establish a benchmark but would not mandate that all cases be completed within 10 months—would provide the arbitrators with sufficient flexibility to accommodate the particular circumstances of each case.
Finally, the third way that the proposed rule change would shorten the length of the proceedings is to shorten several of the default deadlines that apply to parties under the Codes, as follows:
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Based on FINRA's experience, FINRA believes these proposed shortened deadlines are reasonable and would not compromise the fairness of the arbitration proceedings because they would be manageable in most cases. In addition, arbitrators and parties could extend the proposed deadlines if warranted. Specifically, there may be some cases in which the complexity of the case, the volume of discovery, or other factors may justify extending these proposed deadlines.
While these provisions in the Codes provide the panel and the parties with flexibility to modify the shortened deadlines in the proposed rule change, FINRA expects the extensions to be the exception and not the rule. Accordingly, if the Commission approves the proposed rule change, FINRA would provide training and guidance to arbitrators on accelerated processing, which would include training on evaluating requests to extend the proposed shortened deadlines.
If the Commission approves the proposed rule change, FINRA will announce the effective date of the proposed rule change in a
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA believes that the proposed rule change will protect investors and the public interest by shortening case processing times for those parties—most of whom are likely to be customers—who may not be able to meaningfully participate for the duration of a lengthy arbitration because of their age or health condition. When parties are unable to meaningfully participate in an arbitration, it can affect the outcome of the proceedings. By shortening the length of the arbitration for these parties, the proposed rule change will make it more likely that they are able to meaningfully participate for the duration of the proceedings. This, in turn, will protect investors and the public interest by helping to ensure that arbitration cases are resolved based on the underlying merits.
In addition, those parties who do not meet the eligibility requirements of the proposed rule change still will be able to request, once the panel has been appointed, that the panel consider other factors, including their age or a change in their health condition during the arbitration proceeding, when scheduling hearings and discovery, briefing, and motion deadlines. Thus, although these proceedings would not be subject to the shortened, rule-based deadlines of the proposed rule change, the panel may determine at a party's request, to expedite the proceedings based on the party's particular circumstances.
FINRA does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
FINRA has undertaken an economic impact assessment, as set forth below, to analyze the regulatory need for the proposed rulemaking, its potential economic impacts, including anticipated benefits and costs, and the alternatives FINRA considered in assessing how to best meet its regulatory objectives.
The proposed rule change would address concerns that FINRA has received that certain parties who are seriously ill or 70 years or older may be unable to meaningfully participate in a lengthy arbitration. An inability to meaningfully participate harms these parties if, as a result, the resolution of the arbitration does not accurately reflect the underlying merits of the case. For the parties who qualify, the proposed rule change would shorten case deadlines and provide arbitrators with instruction on how quickly the arbitration should be completed.
The economic baseline is the current provisions under the Codes that address the administration of arbitration proceedings and the current program to shorten case processing times. The proposed rule change is expected to affect the parties to cases in the DRS forum, their counsel, and FINRA arbitrators.
Under the current program, parties who have a serious health condition or are at least 65 years of age may request that the processing of their arbitration be expedited. Since the current program is voluntary, requesting parties presumably anticipate that the benefits from the shortened case processing times more than offset any additional costs, such as paying for expedited legal services. Expedited processing may also impose additional costs on the other parties and arbitrators associated with arbitrations.
From 2019 through 2023, customers requested expedited processing in approximately 29 percent of customer arbitrations. During this time period, 10,961 customer arbitrations (where customers appeared as claimants) closed where DRS had served the statement of claim on respondents. Parties requested expedited processing in 3,174 of these arbitrations. Ninety-nine percent, or 3,132 of the 3,174 requests, were granted. Parties did not request expedited processing in the remaining 7,787 arbitrations.
Arbitrations in the current program closed only slightly faster than arbitrations not in the current program. The median time for the 3,132 customer
The proposed rule change would impact the number of parties who are eligible for accelerated processing.
FINRA anticipates that the proposed rule change would shorten the length of arbitrations for parties who request and are granted accelerated processing. In these arbitrations, arbitrators would be required to endeavor to render an award within 10 months. From a sample of arbitrations in the current program in 2020 that have since closed, 384 were granted on the basis of serious illness or age 70 or over. Seventy percent (269 of 384 arbitrations in the current program) took longer than 10 months to close. Among the arbitrations in the current program that took longer than 10 months to close, approximately 50 percent took longer than 15.3 months to close.
Relative to the baseline, the proposed rule change would benefit parties who are seriously ill or at least 70 years old by shortening case deadlines for their arbitrations and providing arbitrators with instruction on how quickly the arbitration should be completed. This would help reduce the length of the arbitration and increase the chance that qualifying parties can fully participate. The ability of these parties to meaningfully participate would help facilitate outcomes that are more consistent with the merits of the case.
The proposed rule change, however, may also impose additional costs on parties and arbitrators to meet the shorter, rule-based deadlines. The parties who are eligible and request accelerated processing would incur these costs at their own discretion. The types of costs the other parties to the proceeding may incur would depend on how they manage their resources to meet the shortened deadlines. For example, these parties may reallocate resources from other activities, possibly increasing the time required to meet other business objectives; or they may incur additional costs from adding staff or using outside counsel; or do a combination of the two. How these parties would adjust to meet the shortened deadlines may differ depending on their business models and available resources. The additional costs parties incur, however, may be partly offset by the gains to efficiency from the shorter deadlines and a more focused effort on the associated tasks.
Participants to non-accelerated arbitrations may also incur costs associated with longer processing times. It could be difficult for arbitrators, industry parties and their counsel—many of whom participate concurrently in more than one arbitration—to maintain their current timelines for non-accelerated arbitrations. As a result, case processing times of non-accelerated arbitrations may lengthen.
Reducing the length of the arbitration may help more parties with serious health issues than are helped under the current program, though the reduction may not be sufficient to help all parties with more serious health issues and shorter life expectancies. Also, under the proposed rule change, parties between the ages of 65 and 69 who are seriously ill would no longer be able to rely on their age to qualify for accelerated processing. These parties may incur additional costs to certify that they have received a medical diagnosis and prognosis in order to take advantage of accelerated processing.
Finally, it is not expected that the proposed rule change would impose costs on those parties who would no longer qualify for accelerated processing on the basis of either their age or health condition. These parties would still be able to ask that the panel consider their age and health in making scheduling decisions and setting deadlines.
FINRA considered different age eligibility cutoffs when developing the proposed rule change.
Even though the data suggests that lowering the proposed age cutoff from 70 to 65 would only affect approximately six percent of customer claimants, FINRA is concerned that this change may reduce the likelihood that the proposed rule change would materially shorten the length of the proceedings for those parties who may be less likely to be able to participate for the duration of a lengthy arbitration. FINRA is also concerned that participation by arbitrators, industry parties and their counsel in more than one arbitration, including an arbitration that is accelerated under the proposed rule change may affect parties in other arbitrations in the DRS forum in the form of longer processing times.
FINRA understands that the average likelihood of becoming unable to meaningfully participate in an arbitration may differ among populations and that these differences can persist after the age of 65.
Finally, FINRA also considered establishing different deadlines for parties (
FINRA published the proposed rule change for comment in
Eleven commenters supported FINRA's efforts to accelerate arbitration proceedings for those parties who may not be able to meaningfully participate in lengthy proceedings but suggested modifications.
In its response to the
FINRA understands that any shortening in the length of an arbitration can be helpful to a party who is elderly or suffering from a serious health condition. However, FINRA believes that the proposed rule change has the potential to shorten the time that it takes for arbitrations to close to approximately 10 months, thereby shortening the median closing time by approximately an additional three months. As a number of commenters noted, the additional time savings contemplated by the proposed rule change could be critical for parties who are elderly or suffering from a serious health condition and who, therefore, may be unable to meaningfully participate in a lengthy arbitration.
SIFMA suggests that, even without the proposed rule change, FINRA could encourage arbitrators to endeavor to render awards in accelerated proceedings within a period of 10 months. FINRA agrees that arbitrator training is important, and, as noted above, if the Commission approves the proposed rule change, FINRA would provide training and guidance to arbitrators on accelerated processing, which would include training on evaluating requests to extend the proposed shortened deadlines.
As discussed below, those commenters who addressed the issue of which parties should be eligible for accelerated processing almost uniformly supported allowing parties to qualify based on either their age or their health condition.
All but one of the commenters who addressed the issue supported allowing parties to qualify for accelerated processing based solely on age.
FINRA disagrees with Cambridge. Even if they are otherwise healthy at the outset of the arbitration, elderly parties may be more likely because of their age to become seriously ill or die during the arbitration, in which case they would be unable to meaningfully participate for the duration of the proceedings. For this reason, FINRA believes it is appropriate that the proposed rule change would allow parties to qualify for accelerated processing based solely on age.
The remaining commenters, other than Cambridge, focused principally on the question of what the appropriate age cutoff should be for a party to qualify for accelerated processing. In the
After considering the comments, FINRA has determined to propose an age cutoff to qualify for accelerated processing of 70. As discussed in detail above, an age cutoff of 70 would make accelerated processing available to more parties who are at a higher risk of becoming seriously ill or experiencing an eligible health condition during the course of an arbitration, or potentially not living to see the outcome of the arbitration proceeding.
Those commenters who addressed the issue of which parties should be eligible for accelerated processing unanimously supported allowing parties to qualify based on their health condition.
Given the breadth of potential diagnoses and prognoses that could result in parties reasonably believing that they would be prejudiced without accelerated processing, FINRA does not believe it would be helpful to provide examples of eligible health conditions. In addition, FINRA is concerned that doing so could discourage parties with medical diagnoses and prognoses that fall outside of the examples from making a legitimate request for accelerated processing.
FINRA also believes that the “reasonable belief” standard is appropriate. As discussed above, when assessing eligibility for accelerated processing under proposed Rules 12808(b)(1) and 13808(b)(1), the Director would make an objective determination as to whether the requesting party has submitted the required certification regarding an eligible health condition. This determination would not require any assessment by the Director regarding the reasonableness of the requesting party's belief that accelerated processing is necessary. FINRA believes that these concerns are unfounded.
Although they supported making accelerated processing available to parties based on their age or health condition, two commenters suggested that FINRA should allow parties to request accelerated treatment based on other factors.
FINRA understands that there are some parties who would benefit if their arbitration were accelerated but who would not qualify for accelerated processing under the proposed rule change. However, FINRA is concerned that the needs-based approach suggested by St. John's is too vague and subjective to be workable. Although FINRA understands that parties with ill spouses or immediate family members might benefit if—according to St. John's, they were able to “spend less time and money on the arbitration process,”—there is no evidence that these parties would be unable to meaningfully participate in arbitration proceedings absent accelerated processing. Finally, FINRA believes it is unnecessary to expand the categories of eligible parties as suggested by the commenters because the proposed rule change provides those parties who do not meet the eligibility requirements of the proposed rule change with an alternative route to seek to accelerate the proceedings. Specifically, as discussed above, proposed Rules 12808(a)(3) and 13808(a)(3) would allow parties who do not meet the eligibility requirements of the proposed rule change to request, once the panel has been appointed, that the panel consider other factors, including their age or a change in their health condition during the arbitration proceeding, when scheduling hearings and discovery, briefing, and motion deadlines. Thus, although the shortened deadlines in proposed Rules 12808(b) and 13808(b) would not apply to these parties, they would be able to ask the arbitration panel to accelerate their proceedings based on a consideration of their particular circumstances, including developing a serious health condition after the panel is appointed.
As noted above, although almost all of the commenters supported allowing parties to qualify for accelerated processing based on their age or their health conditions, two of those commenters suggested that, in order to minimize the potential for abuse of the process, FINRA should require parties to produce proof of their age or health condition.
SIFMA suggested that parties requesting accelerated processing on the basis of age should be required to prove they are at least 70 years old by producing “a driver's license, passport, birth certificate, or other similar official record.” However, FINRA believes that requiring proof of age is unnecessary. Just as there is no evidence that parties have falsely claimed to be suffering from a serious health condition, FINRA has no evidence that parties have falsified their age to qualify for the current program. Nor is there any reason to believe that parties are more likely to falsify their age under the proposed rule change, particularly when such conduct could result in potential sanctions under existing FINRA Rules 12212 and 13212. FINRA is also concerned that requiring proof of age under the proposed rule change could discourage some parties from making legitimate requests for accelerated processing as they may view this as an unnecessary intrusion into their personal information.
To minimize the risk that parties will falsely certify that they are suffering from an eligible health condition, two commenters suggested that parties should be required to provide additional proof of their health condition, for example, by providing a certification from a physician.
Some commenters also expressed the concern that parties who request accelerated processing on the basis of an eligible health condition could be subject to discovery requests for the production of medical records or other private information about their health condition.
To further protect a party's privacy, Cardozo requested that the proposed rule change require that the certification be submitted only to FINRA staff and not shared with other parties or the arbitrators. However, FINRA believes that such a requirement is unnecessary because the certification required under the proposed rule change would not contain any details regarding the party's medical condition or other private health information.
To provide further protection against abuse of the process, two commenters suggested that the existing sanctions provisions in the Codes should be expanded.
Two commenters addressed the proposed 10-month timeframe within which arbitrators should endeavor to render awards in accelerated arbitrations.
For the reasons discussed above, FINRA believes that 10 months is the appropriate timeframe within which arbitrators should endeavor to render awards in accelerated arbitrations.
As discussed above, in addition to establishing a 10-month timeframe within which arbitrators should endeavor to render an award in accelerated cases, proposed Rules 12808(b)(2)(D) and 13808(b)(2)(D) would accelerate the proceedings by establishing shortened deadlines for the parties. Three commenters expressed concerns regarding some or all of these proposed shortened deadlines.
FINRA disagrees with Cambridge's suggestion to eliminate all shortened deadlines from the proposed rule change. To meaningfully reduce case processing times for those parties who may be unable to fully participate in lengthy arbitration proceedings—a goal that the current program has been unable to achieve—FINRA believes it is necessary and appropriate to establish rule-based shortened deadlines. As to the other concerns raised by commenters regarding specific deadlines, FINRA understands that the proposed shortened deadlines may not be reasonable in some cases, for example, if the case is complex or involves voluminous discovery. However, as discussed above, FINRA believes that the existing provisions of the Codes provide the parties and arbitrators with sufficient flexibility to modify the proposed shortened deadlines when necessary.
In response to the
All of these comments are beyond the scope of the proposed rule change. However, with respect to NASAA's comment, FINRA notes that its rules do not require customers to enter into agreements to arbitrate disputes with member firms, nor do FINRA rules preclude customers from pursuing relief in state or federal courts. The Supreme Court has held that predispute arbitration agreements are enforceable as to claims brought under the Act.
With respect to Kolber's comment, FINRA notes that it does not have direct authority to investigate or discipline representative misconduct in the DRS forum.
With respect to St. John's comment, FINRA notes that any increase to the $50,000 threshold for simplified arbitrations would require a separate proposed rule change as the focus of this proposed rule change is on accelerating the processing of arbitration proceedings for parties who qualify based on their age or health condition rather than claim size.
Finally, with respect to Iannarone's comment, FINRA notes that its website offers several resources to help parties find an attorney.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change will (i) correct DTC's rule filing record by unwinding a prior rule filing (“2014 Filing”)
In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The proposed rule change will (i) correct DTC's rule filing record by unwinding the 2014 Filing regarding DTC's NIIDS and (ii) update the description of NIIDS in the OA to more clearly describe NIIDS.
NIIDS was established by DTC in 2008.
DTC collects NIIDS Data Elements about New Muni Issues from Dissemination Agents in electronic format through DTC's underwriting system as part of DTC's New Muni Issue underwriting process. Those NIIDS Data Elements are then disseminated to market participants that subscribed to such information (“NIIDS Subscribers”).
Prior to 2014, DTC was responsible for disseminating NIIDS Data Elements to NIIDS Subscribers upon approval to do so by the Dissemination Agent. The 2014 Filing was a rule change by DTC to transfer the dissemination process from DTC to a non-clearing agency affiliate (
Since the OA was never updated and because DTC will remain the disseminator of NIIDS Data Elements, DTC is now proposing to correct the record and unwind the 2014 Filing with this rule filing.
In addition to unwinding the 2014 Filing, this proposed rule change will delete the current NIIDS description in the OA and replace that language with a more concise, clear, and accurate description of the NIIDS dissemination process. The proposed language would not change the way NIIDS works; rather, the new description would simply provide a more thorough and precise explanation of NIIDS. Specifically, the proposed rule language would (1) provide an improved introduction and explanation of the purpose of NIIDS, how NIIDS is integrated into DTC's underwriting system (
Section 17A(b)(3)(F) of the Act requires that the rules of the clearing agency be designed,
As described above, the proposed rule change will (i) correct DTC's filing record by unwinding the 2014 Filing, and (ii) remove the current description of NIIDS in the OA and replace it with an update description that more clearly and accurately describes the service, including an updated and clearer liability disclaimer. By unwinding the 2014 Filing and updating and correcting the description of NIIDS in the OA, the proposed rule change clarifies for Participants, NIIDS Subscribers, and other interested parties in NIIDS how the service works, which, in turn, better enables the timely and accurate reporting of NIIDS Data Elements and their use in associated transactions. Therefore, DTC believes that the proposed rule change would help promote the prompt and accurate clearance and settlement of securities transactions, consistent with the requirements of the Act, in particular Section 17A(b)(3)(F) of the Act, cited above.
DTC does not believe that the proposed rule change would have any impact or impose any burden on competition because, as described above, the proposed rule change simply corrects DTC's filing record with respect to the dissemination of NIIDS Data Elements, and more clearly describes NIIDS, without making any actual changes to the service.
DTC has not received or solicited any written comments relating to this proposal. If any written comments are received, they will be publicly filed as an Exhibit 2 to this filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting written comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b-4, the Securities and Exchange Commission (“Commission”) does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information.
All prospective commenters should follow the Commission's instructions on
DTC reserves the right to not respond to any comments received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to modify the NYSE Arca Options Fee Schedule (“Fee Schedule”) regarding certain transaction fees. The Exchange proposes to implement the fee change effective December 17, 2024. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The purpose of this filing is to amend the Fee Schedule to modify certain transaction fees. Specifically, the Exchange proposes to adopt pricing incentives to encourage trading in options on Exchange Traded Funds that hold digital assets (“digital asset ETFs”) that are listed on NYSE Arca Equities. The Exchange proposes to implement the fee change effective December 17, 2024.
On November 22, 2024, the Exchange began trading options on the following digital asset ETFs, each of which is listed on NYSE Arca Equities: Grayscale Bitcoin Trust ETF (GBTC); Grayscale Bitcoin Mini Trust ETF (BTC); and Bitwise Bitcoin ETF Trust (BITB).
Specifically, the Exchange proposes that executions in options on NYSE Arca Equities-listed digital asset ETFs (excluding QCC transactions) will
Although the Exchange cannot predict with certainty whether any OTP Holders would seek to trade digital asset ETF options, the Exchange believes that the proposed change would incentivize OTP Holders to submit these types of orders to the Exchange, which brings increased liquidity and order flow for the benefit of all market participants.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The proposed change to the Fee Schedule are reasonable, equitable, and not unfairly discriminatory. As a threshold matter, the Exchange is subject to significant competitive forces in the market for options securities transaction services that constrain its pricing determinations in that market. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
There are currently 18 registered options exchanges competing for order flow. Based on publicly-available information, and excluding index-based options, no single exchange has more than 16% of the market share of executed volume of multiply-listed equity and ETF options trades.
The Exchange believes that the proposed discount/credit of five cents per contract is reasonable because it is designed to encourage liquidity in options classes on digital asset ETFs newly listed and traded on the Exchange, thereby promoting market depth, price discovery and improvement, and enhanced order execution opportunities to the benefit of all market participants. Moreover, the proposal is designed to encourage OTP Holders to utilize the Exchange as a primary trading venue for options on digital asset ETFs.
The Exchange believes the proposed rule change is an equitable allocation of its fees and credits and is not unfairly discriminatory as it available equally to all similarly-situated market participants on an equal and non-discriminatory basis.
To the extent the proposed change continues to attract greater volume and liquidity, the Exchange believes the proposed change would improve the Exchange's overall competitiveness and strengthen its market quality for all market participants. In the backdrop of the competitive environment in which the Exchange operates, the proposed rule change is a reasonable attempt by the Exchange to increase the depth of its market and improve its market share relative to its competitors. The Exchange's fees are constrained by intermarket competition, as OTP Holders may direct their order flow to any of the competing options exchanges that list and trade options on digital asset ETFs.
Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition.
In accordance with Section 6(b)(8) of the Act, the Exchange does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Instead, as discussed above, the Exchange believes that the proposed changes would encourage the submission of additional liquidity to a public exchange, thereby promoting market depth, price discovery and transparency and enhancing order execution opportunities for all market participants. As a result, the Exchange believes that the proposed change furthers the Commission's goal in adopting Regulation NMS of fostering integrated competition among orders, which promotes “more efficient pricing
The Exchange believes that the proposed rule change reflects this competitive environment because it modifies the Exchange's fees in a manner designed to encourage market participants to direct trading interest (particularly for options on digital assets ETFs) to the Exchange. To the extent that this purpose is achieved, all the Exchange's market participants should benefit from the improved market quality and increased opportunities for price improvement.
The Exchange believes that the proposed change could promote competition between the Exchange and other execution venues, including those that list and trade options on digital asset ETFs, by encouraging additional orders to be sent to the Exchange for execution.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On June 21, 2024, New York Stock Exchange LLC (“NYSE”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
On August 21, 2024, pursuant to Section 19(b)(2) of the Exchange Act,
Section 19(b)(2) of the Act
The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change, the issues raised therein, and the comments received. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing with the Commission a proposed rule change to amend Rule 19.3, Criteria for Underlying Securities. The text of the proposed rule change is provided in Exhibit 5.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 19.3 regarding the criteria for underlying securities. Specifically, the Exchange proposes to amend Rule 19.3(i) to allow the Exchange to list and trade options on shares or other securities (“Fund Shares”) that are principally traded on a national securities exchange and are defined as an “NMS stock” under Rule 600 of Regulation NMS and that represent interests in the Grayscale Bitcoin Trust (the “Grayscale Fund”), the Grayscale Bitcoin Mini Trust (the “Grayscale Mini Fund”), or the Bitwise Bitcoin ETF (the “Bitwise Fund” and, together with the Grayscale Fund, and the Grayscale Mini Fund, the “Bitcoin Funds”).
The Bitcoin Funds are Bitcoin-backed commodity exchange-traded funds (“ETFs”) structured as trusts. Similar to any Fund Share currently deemed appropriate for options trading under Rule 19.3(i), the investment objective of each Bitcoin Fund is for its shares to reflect the performance of Bitcoin (less the expenses of the trust's operations), offering investors an opportunity to gain exposure to Bitcoin without the complexities of Bitcoin delivery. As is the case for Fund Shares currently deemed appropriate for options trading, a Bitcoin Fund's shares represent units of fractional undivided beneficial interest in the trust, the assets of which consist principally of Bitcoin and are designed to track Bitcoin or the performance of the price of Bitcoin and offer access to the Bitcoin market.
The Exchange's initial listing standards for Fund Shares on which options may be listed and traded on the Exchange will apply to the Bitcoin Funds. Pursuant to Rule 19.3(a), a security (which includes a Fund Share) on which options may be listed and traded on the Exchange must be registered with the Commission and be an “NMS stock” as defined in Rule 600 of Regulation NMS under the Act; and the security shall be characterized by a substantial number of outstanding shares that are widely held and actively traded. Rule 19.3(i)(1) requires that Fund Shares either (1) meet the criteria and standards set forth in Rule 19.3(a) and (b),
Options on the Bitcoin Funds will be subject to the Exchange's continued listing standards set forth in Rule 19.4(g) for Fund Shares deemed appropriate for options trading pursuant to Rule 19.3(i). Specifically, 19.4(g) provides that Fund Shares that were initially approved for options trading pursuant to Rule 19.3 will not be deemed to meet the requirements for continued approval, and the Exchange shall not open for trading any additional series of option contracts of the class covering such Fund Shares if the security ceases to be an NMS stock (see Rule 19.4(b)(4)). Additionally, the Exchange will not open for trading any additional series of option contracts of the class covering Fund Shares in any of the following circumstances: (1) in the case of options covering Fund Shares approved for trading under Rule 19.3(i)(4)(A), in accordance with the terms of Rule 19.4(b)(1), (2) and (3); (2) in the case of options covering Fund Shares approved pursuant to Rule 19.3(i)(4)(B), following the initial 12-month period beginning upon the commencement of trading in the Fund Shares on a national securities exchange and are defined as NMS stock under Rule 600 of Regulation NMS, there were fewer than 50 record and/or beneficial holders of such Fund Shares for 30 consecutive days; (3) the value of the index, non-U.S. currency, portfolio
Options on each Bitcoin Fund will be physically settled contracts with American-style exercise.
Pursuant to Rule 19.5, Interpretation and Policy .01, which governs strike prices of series of options on Fund Shares, the interval of strikes prices for series of options on Bitcoin Funds will be $1 or greater when the strike price is $200 or less and $5 or greater where the strike price is over $200.
Bitcoin Fund options will trade in the same manner as any other Fund Share options on the Exchange. The Exchange Rules that currently apply to the listing and trading of all Fund Share options on the Exchange, including, for example, Rules that govern listing criteria, expirations, exercise prices, minimum increments, margin requirements, customer accounts, and trading halt procedures will apply to the listing and trading of Bitcoin Funds options on the Exchange in the same manner as they apply to other options on all other Fund Shares that are listed and traded on the Exchange, including the precious-metal backed commodity Fund Shares and the Fidelity and Ark 21 Funds already deemed appropriate for options trading [sic] on the Exchange pursuant to current already deemed appropriate for options trading [sic] on the Exchange pursuant to current Rule 19.3(i).
Pursuant to Rules 18.7
Based on this trading volume,
Second, with respect to the outstanding shares of these three Bitcoin Funds, the Exchange reviewed NYSE American's data regarding the outstanding shares of each of these Bitcoin Funds. NYSE American performed an exercise to demonstrate that if a market participant held the maximum number of contracts possible pursuant to the proposed position and exercise limits (25,000 contracts), the equivalent shares represented by the proposed position and exercise limits (2,500,000 shares) would represent the following approximate percentage of outstanding shares as of August 30, 2024:
As this table demonstrates, if a market participant held the maximum permissible options positions in one of the Bitcoin Fund options and exercised all of them at the same time, that market participant would control a small percentage of the outstanding shares of the underlying Bitcoin Fund. For example, as noted above, a position limit of 25,000 same side contracts effectively restricts a market participant from holding positions that could result in the receipt of no more than 2,500,000 shares of the applicable Bitcoin Fund (if that market participant exercised all its options). NYSE American used the number of shares outstanding for each Bitcoin Fund as of August 30, 2024, and calculated the approximate number of market participants that could hold the maximum of 25,000 same side positions in each Bitcoin Fund that would equate to the number of shares outstanding of that Bitcoin Fund:
This means if 114 market participants had 25,000 same side positions in options on the Grayscale Fund, each of them would have to simultaneously exercise all of those options to create a scenario that may put the underlying security under stress. Similarly, this means if 147 market participants had 25,000 same side positions in options on the Grayscale Mini Fund, each of them would have to simultaneously exercise all of those options to create a scenario that may put the underlying security under stress. Finally, this means if 27 market participants had 25,000 same side positions in options on the Bitwise Fund, each of them would have to simultaneously exercise all of those options to create a scenario that may put the underlying security under stress. The Exchange believes it is highly unlikely for this to occur; however, even if such event did occur, the Exchange would not expect any of the Bitcoin Fund to be under stress because such an event would merely induce the creation of more shares through the trust's creation and redemption process.
NYSE American also performed an exercise to compare the size of the proposed position limit to the market capitalization of the Bitcoin market given that the issuer of each of these three Bitcoin Funds may create and redeem shares that represent an interest in Bitcoin. NYSE American took the global supply of Bitcoin, which was 19,747,066, and the price of one Bitcoin, which was approximately $59,108.23, as of August 30, 2024, which equates to a market capitalization of approximately
Therefore, if a market participant with the maximum 25,000 same side contracts in options on the Grayscale Fund, the Grayscale Mini Fund, or the Bitwise Fund exercised all positions at one time, such an event would have no practical impact on the Bitcoin market.
The Exchange also reviewed NYSE American's data regarding the market capitalization of each of these three Bitcoin Funds relative to the market capitalization of the entire Bitcoin market, as of August 30, 2024:
As this data gathered by NYSE American demonstrates, none of these three Bitcoin Funds represent more than 1.2% of the global supply of Bitcoin (19,747,066). Based on the $46.75 price of a Grayscale Fund share on August 30, 2024, a market participant could have redeemed one Bitcoin for approximately 1,264 Grayscale Fund shares. Another 24,967,146,455 Grayscale Fund shares could be created before the supply of Bitcoin was exhausted. As a result, 9,987 market participants would have to simultaneously exercise 25,000 same side positions in Grayscale Fund options to receive shares of the Grayscale Fund holding the entire global supply of Bitcoin. Similarly, based on the $5.20 price of a Grayscale Mini Fund share on August 30, 2024, a market participant could have redeemed one Bitcoin for approximately 11,367 Grayscale Mini Fund shares. Another 224,464,249,382 Grayscale Mini Fund shares could be created before the supply of Bitcoin was exhausted. As a result, 89,786 market participants would have to simultaneously exercise 25,000 same side positions in Grayscale Mini Fund options to receive shares of Grayscale Mini Fund holding the entire global supply of Bitcoin. Similarly, based on the $31.95 price of a Bitwise Fund share on August 30, 2024, a market participant could have redeemed one Bitcoin for approximately 1,850 Bitwise Fund shares. Another 36,532,522,591 Bitwise Fund shares could be created before the supply of Bitcoin was exhausted. As a result, 14,613 market participants would have to simultaneously exercise 25,000 same side positions in Bitwise Fund options to receive shares of Bitwise Fund holding the entire global supply of Bitcoin.
NYSE American also compared the proposed position limits to the position limit of CME Bitcoin futures, which as noted above is 2,000 futures. On August 28, 2024, CME Aug 24 Bitcoin Futures settled at $58,950. A position of 2,000 CME Bitcoin futures, therefore, would have a notional value of $589,500,000. The following table shows the share price of each Bitcoin Fund on August 28, 2024, and the approximate number of option contracts that equates to that notional value:
The approximate number of option contracts for each Bitcoin Fund that equate to the notional value of CME Bitcoin futures is significantly higher than the proposed limit of 25,000 options contracts for each Bitcoin Fund option. As noted above, the fact that many options ultimately expire out-of-the-money and thus are not exercised for shares of the underlying, while the delta of a Bitcoin Future is 1, further demonstrates how conservative the proposed limits of 25,000 options contracts are for the Bitcoin Fund options.
The Exchange notes, again, unlike options contracts, CME position limits are calculated on a net futures-
While the supply of Bitcoin is limited to 21,000,000, it is believed that it will take more than 100 years to fully mine the remaining Bitcoin.
Importantly, because the supply of Bitcoin is much larger than the available supply of most securities and the proposed 25,000 contract position limit is so conservative, the Exchange believes that evaluating the available supply of Bitcoin in establishing a position limit for options on each of the Bitcoin Funds would demonstrate that the proposed limit is safe for investors and the market.
The Exchange believes the available supply of Bitcoin is not relevant to the determination of position and exercise limits for options overlying the Bitcoin Funds.
The Exchange notes that a Registration Statement on Form S-1 was filed with the Commission for each Bitcoin Fund, each of which described the supply of Bitcoin as being limited to 21,000,000 (of which approximately 90% had already been mined), and that the limit would be reached around the year 2140.
All of the above information demonstrates that the proposed position and exercise limits for the Bitcoin Fund options are more than reasonable and appropriate. The trading volume, ADV, and outstanding shares of each Bitcoin Fund demonstrate that these funds are actively traded and widely held, and proposed position and exercise limits are well below those of other ETFs with similar market characteristics. The proposed position and exercise limits are the lowest position and exercise limits available for equity options in the industry, are extremely conservative, and are more than appropriate given each Bitcoin Fund's market capitalization and ADV.
Today, the Exchange has an adequate surveillance program in place for options. The Exchange intends to apply those same program procedures to options on the Bitcoin Funds that it applies to the Exchange's other options products.
The underlying shares of spot bitcoin exchange-traded products (“ETPs”), including the Bitcoin Funds, are also subject to safeguards related to addressing market abuse and manipulation. As the Commission stated in its order approving proposals of several exchanges to list and trade shares of spot bitcoin-based ETPs, “[e]ach Exchange has a comprehensive surveillance-sharing agreement with the CME via their common membership in the Intermarket Surveillance Group. This facilitates the sharing of information that is available to the CME through its surveillance of its markets, including its surveillance of the CME bitcoin futures market.
The Exchange has also analyzed its capacity and represents that it believes the Exchange and OPRA have the necessary systems capacity to handle the additional traffic associated with the listing of new series that may result from the introduction of options on Bitcoin Funds up to the number of expirations currently permissible under the Rules. Because the proposal is limited to two classes, the Exchange believes any additional traffic that may be generated from the introduction of Bitcoin Fund options will be manageable.
The Exchange believes that offering options on Bitcoin Funds will benefit investors by providing them with an additional, relatively lower cost investing tool to gain exposure to the price of Bitcoin and hedging vehicle to meet their investment needs in connection with Bitcoin-related products and positions. The Exchange expects investors will transact in options on Bitcoin Funds in the unregulated over-the-counter (“OTC”) options market,
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the Exchange believes that the proposal to list and trade options on the Bitcoin Funds will remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, protect investors because offering options on the Bitcoin Funds will provide investors with an opportunity to realize the benefits of utilizing options on a Bitcoin Fund, including cost efficiencies and increased hedging strategies. The Exchange believes that offering options on a competitively priced ETF based on spot Bitcoin will benefit investors by providing them with an additional, relatively lower-cost risk management tool, allowing them to manage, more easily, their positions and associated risks in their portfolios in connection with exposure to spot Bitcoin. Today, the Exchange lists options on other commodity (including Bitcoin) ETFs structured as a trust, which essentially offer the same objectives and benefits to investors, and for which the Exchange has not identified any issues with the continued listing and trading of options on those ETFs.
The Exchange also believes the proposal to permit options on the Bitcoin Funds will remove impediments to and perfect the mechanism of a free and open market and a national market system, because options on the Bitcoin Funds will comply with current Exchange Rules. Options on the Bitcoin Funds must satisfy the initial listing standards and continued listing standards currently in the Rules, applicable to options on all ETFs, including options on other commodity ETFs already deemed appropriate for options trading on the Exchange pursuant to Rule 19.3(i). Additionally, as demonstrated above, the Bitcoin Funds are characterized by a substantial number of shares that are widely held and actively traded. Further, Rules that currently govern the listing and trading of options on ETFs, including permissible expirations, strike prices, minimum increments, position and exercise limits (as proposed herein), and margin requirements, will govern the listing and trading of options on the Bitcoin Funds.
The proposed position and exercise limits for options on each of the Bitcoin Funds is 25,000 contracts. These position and exercise limits are the lowest position and exercise limits available in the options industry, are extremely conservative and more than appropriate given Bitcoin Fund's market capitalization, ADV, and high number of outstanding shares. The proposed position limit, and exercise limit, is consistent with the Act as it addresses concerns related to manipulation and protection of investors because, as demonstrated above, the position limit (and exercise limit) is extremely conservative and more than appropriate given the Bitcoin Funds are actively traded. In support of the proposed position and exercise limits for options on the Bitcoin Funds of 25,000 contracts, the Exchange is citing the in depth analysis NYSE American did in its filing. As noted above, NYSE American considered: (1) the applicable Bitcoin Fund's market capitalization and ADV, and proposed position limit in relation to other securities; (2) the market capitalization of the entire Bitcoin market in terms of exercise risk and availability of deliverables; (3) the proposed position limit by comparing it to position limits for derivative products regulated by the CFTC; and (4) the supply of Bitcoin. Based on the Exchange's review of this analysis, the Exchange believes that setting position and exercise limits for options on each of the Bitcoin Funds of 25,000 contracts is more than appropriate. The proposed position and exercise limits reasonably and appropriately balance the liquidity provisioning in the market against the prevention of manipulation. The Exchange believes these proposed limits are effectively designed to prevent an individual customer or entity from establishing options positions that could be used to manipulate the market of the underlying as well as the Bitcoin market.
The Exchange represents that it has the necessary systems capacity to support the new Bitcoin Fund options. As discussed above, the Exchange believes that its existing surveillance and reporting safeguards are designed to deter and detect possible manipulative behavior which might arise from listing and trading Fund Share options, including Bitcoin Fund options.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act as the Bitcoin Fund options will be equally available to all market participants who wish to trade such options and will trade generally in the same manner as other options. The Rules that currently apply to the listing and trading of all Fund Share options on the Exchange, including, for example, Rules that govern listing criteria, expirations, exercise prices, minimum increments, margin requirements, customer accounts, and trading halt procedures will apply to the listing and trading of Bitcoin Funds options on the
The Exchange does not believe that the proposal to list and trade options on Bitcoin Funds will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the extent that the advent of Bitcoin Fund options trading on the Exchange may make the Exchange a more attractive marketplace to market participants at other exchanges, such market participants are free to elect to become market participants on the Exchange. The Commission recently approved a rule filing of another exchange to permit the listing and trading of options on the Bitcoin Funds.
The Exchange believes that the proposed rule change may relieve any burden on, or otherwise promote, competition, as it is designed to increase competition for order flow on the Exchange in a manner that is beneficial to investors by providing them with a lower-cost option to hedge their investment portfolios. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues that offer similar products. Ultimately, the Exchange believes that offering Bitcoin Fund options for trading on the Exchange will promote competition by providing investors with an additional, relatively low-cost means to hedge their portfolios and meet their investment needs in connection with Bitcoin prices and Bitcoin-related products and positions on a listed options exchange.
The Exchange neither solicited nor received comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (“PRA”) (44 U.S.C. 3501
Rule 204(a) provides that a participant of a registered clearing agency must deliver securities to a registered clearing agency for clearance and settlement on a long or short sale in any equity security by settlement date, or if a participant of a registered clearing agency has a fail to deliver position at a registered clearing agency in any equity security for a long or short sale transaction in the equity security, the participant shall, by no later than the beginning of regular trading hours on the applicable close-out date, immediately close out its fail to deliver positions by borrowing or purchasing securities of like kind and quantity. For a short sale transaction, the participant must close out a fail to deliver by no later than the beginning of regular trading hours on the settlement day following the settlement date. If a participant has a fail to deliver that the participant can demonstrate on its books and records resulted from a long sale, or that is attributable to bona-fide market making activities, the participant must close out the fail to deliver by no later than the beginning of regular trading hours on the third consecutive settlement day following the settlement date. Rule 204 is intended to help further the Commission's goal of reducing fails to deliver by maintaining the reductions in fails to deliver achieved by the adoption of temporary Rule 204T, as well as other actions taken by the Commission. In addition, Rule 204 is intended to help further the Commission's goal of addressing potentially abusive “naked” short selling in all equity securities.
The information collected under Rule 204 will continue to be retained and/or provided to other entities pursuant to the specific rule provisions and will be available to the Commission and self-regulatory organization (“SRO”) examiners upon request. The information collected will continue to aid the Commission and SROs in monitoring compliance with these requirements. In addition, the information collected will aid those subject to Rule 204 in complying with its requirements. These collections of information are mandatory.
Several provisions under Rule 204 will impose a “collection of information” within the meaning of the Paperwork Reduction Act.
Allocation Notification Requirement: As of quarter four of 2023, there were 3,429 registered broker-dealers.
The total aggregate annual burden for the collection of information undertaken pursuant to all five provisions is thus 1,506,165 hours per year (337,348 + 156,038 + 338,083 + 337,348 + 337,348).
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number.
The public may view and comment on this information collection request at:
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 239 (17 CFR 230.239) provides exemptions under the Securities Act of 1933 (15 U.S.C. 77a
Written comments are invited on: (a) whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of
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 control number.
Please direct your written comment to Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg, 100 F Street, NE, Washington, DC 20549 or send an email to:
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Sections 140 and 141 of the NYSE American Company Guide (the “Company Guide') to (i) amend the original and annual listing fees for bonds, and (ii) amend the annual fee for stock issues. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Sections 140 and 141 of the Company Guide to (i) amend the original and annual listing fees for bonds, and (ii) amend the annual fee for stock issues. The proposed changes will take effect from the beginning of the calendar year commencing on January 1, 2025.
The Exchange currently charges an annual fee of $55,000 to issuers with 50 million or fewer shares outstanding and an annual fee of $75,000 to issuers with more than 50 million shares outstanding. The Exchange proposes to amend Section 141 of the Company Guide to increase the annual fee for issuers with 50 million or fewer shares outstanding to $60,000, and to increase the annual fee for issuers with more than 50 million shares outstanding to $80,000.
The proposed increase to the annual fee for stock issues reflects increases in the costs the Exchange incurs in providing services to listed companies on an ongoing basis including in relation to company events and advocacy on behalf of listed companies, as well as increases in the costs of conducting its related regulatory activities. The Exchange proposes to make the aforementioned fee increases to better reflect the Exchange's costs related to listing equity securities and the corresponding value of such listing to companies.
The revised annual fee for stock issues will be applied in the same manner to all issuers with listed securities in the affected categories and the Exchange believes that the changes will not disproportionately affect any specific category of issuers.
Pursuant to Section 140 of the Company Guide, the Exchange currently charges an original listing fee for bond issues equal to $100 per $1 million principal amount (or fraction thereof) and subject to a minimum original listing fee of $5,000 and a maximum fee of $10,000. Pursuant to Section 141 of the Company Guide, the Exchange currently charges an annual fee for listed bonds equal to $5,000.
Similar to bonds listed on New York Stock Exchange LLC (“NYSE”), bonds that are listed on NYSE American trade on the NYSE Bonds platform. The quantitative original listing standards for bonds listed on the NYSE or NYSE American exchanges are nearly identical.
Accordingly, the Exchange proposes to amend Section 140 of the Company Guide to specify that listed bonds will be subject to a flat original listing fee of $25,000.
The Exchange further notes that Section 141 of the Company Guide currently sets forth the annual fee for listed bonds of companies whose equity securities are not listed on the Exchange, but does not contain a corresponding fee schedule for listed bonds of companies whose equity securities are listed on the Exchange.
The Exchange proposes to further amend Section 141 of the Company Guide to adopt an overall cap of $100,000 on the original and annual fees that may be paid by an issuer of listed bonds in any calendar year. The Exchange notes that issuers will frequently issue bonds from various wholly-owned financing subsidiaries. Therefore, for purposes of calculating the fee cap, the Exchange will aggregate listing fees for bonds of an issuer and its wholly-owned subsidiaries.
The Exchange notes that companies frequently issue several series of bonds at the same time. For example, as part of a single offering, a company may issue debt securities of different series with varying maturities (ex. 5-year, 10-year, 20-year or 30-year). In the Exchange's experience, there are efficiencies in (i) qualifying for listing multiple series of bonds of the same issuer, and (ii) servicing such listings on an ongoing basis. Because of these efficiencies, the Exchange believes it is appropriate to establish a maximum fee of $100,000 payable by an issuer of listed bonds in any calendar year.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that it is not unfairly discriminatory and represents an equitable allocation of reasonable fees to amend Section 141 of the Company Guide to increase the annual fees for listed equity securities as set forth above because of the increased costs incurred by the Exchange since it established the current rates.
The Exchange believes that it is not unfairly discriminatory and represents an equitable allocation of reasonable fees to amend Sections 140 and 141 of the Company Guide to adopt (i) a flat $25,000 original listing fee for bonds and (ii) a tiered annual listing fee for bonds based on the number of bonds an issuer has listed on the Exchange. In this regard, the Exchange believes it is reasonable to align the Exchange's bond original and annual listing fees with those of the NYSE, as bonds listed on either exchange trade on the NYSE Bonds platform and are subject to nearly identical quantitative listing standards.
The Exchange believes that it is not unfairly discriminatory and represents an equitable allocation of reasonable fees to amend Section 141 to establish a maximum fee cap payable in any calendar year by an issuer of bonds because the Exchange experiences efficiencies is qualifying and servicing the listing of multiple series of bonds of the same issuer (or a wholly-owned subsidiary of such issuer).
The Exchange believes that the proposed changes to the annual fee schedule for listed equity securities are reasonable. In that regard, the Exchange notes that its general costs to support its listed companies have increased, including due to price inflation. The Exchange also continues to expand and improve the services it provides to listed companies. Specifically, the Exchange has (among other things) increased expenditure on listed companies and the value of an NYSE listing by increasing programming for listed companies and enhancing its conference space which can be utilized by listed companies.
The Exchange believes it is reasonable to align the Exchange's bond original and annual listing fees with those of the NYSE, as bonds listed on either exchange trade on the NYSE Bonds platform and are subject to nearly identical quantitative listing standards. Therefore, the value of a bond listing to an issuer is the same regardless of the exchange on which the bond is listed.
The Exchange believes that it is reasonable to establish a maximum fee cap payable in any calendar year by an issuer of bonds because there are efficiencies in listing multiple series of bonds of the same issuer (or a wholly-owned subsidiary of such issuer).
The Exchange operates in a highly competitive marketplace for the listing of the various categories of securities affected by the proposed annual fee adjustments. The Commission has repeatedly expressed its preference for
The Exchange believes that the ever-shifting market share among the exchanges with respect to new listings and the transfer of existing listings between competitor exchanges demonstrates that issuers can choose different listing markets in response to fee changes. Accordingly, competitive forces constrain exchange listing fees. Stated otherwise, changes to exchange listing fees can have a direct effect on the ability of an exchange to compete for new listings and retain existing listings.
Given this competitive environment, the adoption of the proposed increase the annual listing fee for equity securities represents a reasonable attempt to address the Exchange's increased costs in servicing these listings while continuing to attract and retain listings. The establishment of a flat original listing fee, a tiered annual listing fee, and a maximum fee cap payable in a calendar year by an issuer of bonds represents a reasonable attempt to accurately reflect the Exchange's costs in listing and servicing such securities.
The Exchange proposes to make the aforementioned fee increases in Sections 140 and 141 of the Company Guide to better reflect the value of such listing to issuers.
The Exchange believes its proposal equitably allocates its fees among its market participants.
The Exchange believes that the proposed amendments to the annual fees for equity securities are equitable because they do not change the existing framework for such fees, but simply increase the amount of the annual fee to reflect increased operating costs. Similarly, as the fee structure remains effectively unchanged apart from the proposed increases in the rates paid by all issuers, the changes to the annual fee for equity securities neither target nor will they have a disparate impact on any particular category of issuer.
The Exchange believes that the adoption of a flat original listing fee and a tiered annual listing fee for bonds is equitable because it accurately reflects the value of a bond listing to an issuer while recognizing the efficiencies realized by the Exchange when listing multiple series of bonds. The Exchange believes that the proposed flat original fee and tiered annual fee is equitable because it will apply equally to all issuers and will not target nor have a disparate impact on any particular category of issuer.
The Exchange believes that the proposed maximum fee cap for issuers of bonds is equitable because the work required to list a bond does not increase on a proportional basis for each additional series of bonds that are listed on the Exchange. There are efficiencies in listing multiple series of bonds and the Exchange believes that its proposed fee cap is an equitable reflection of such efficiencies.
The Exchange believes that the proposal is not unfairly discriminatory. The proposed fee changes are not unfairly discriminatory among issuers of operating company equity securities because the same fee schedule will apply to all such issuers. The proposed changes to the original and annual fee schedule for bonds is not unfairly discriminatory because the same schedule will apply to all bond issuers and the proposed fee cap will be available to all issuers. Further, the Exchange operates in a competitive environment and its fees are constrained by competition in the marketplace. Other venues currently list all of the categories of securities covered by the proposed fees and if a company believes that the Exchange's fees are unreasonable it can decide either not to list its securities or to list them on an alternative venue. Currently, there are few bonds listed on the Exchange. While the listing fees for such bonds will increase under the proposed rule change, the Exchange notes that all listed bonds (whether listed on the Exchange or the NYSE) trade on the NYSE Bonds platform. The value of the listing to a specific bond issuer, therefore, is the same. Accordingly, the Exchange believes it is not unfairly discriminatory to align the Exchange's bond listing fee schedule with the NYSE's corresponding schedule.
For the foregoing reasons, the Exchange believes that the proposal is consistent with the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is designed to ensure that the fees charged by the Exchange accurately reflect the services provided and benefits realized by listed issuers. The market for listing services is extremely competitive. Each listing exchange has a different fee schedule that applies to issuers seeking to list securities on its exchange. Issuers have the option to list their securities on these alternative venues based on the fees charged and the value provided by each listing. Because issuers have a choice to list their securities on a different national securities exchange, the Exchange does not believe that the proposed fee changes impose a burden on competition.
The proposed amended fees will be charged to all listed issuers on the same basis. The Exchange does not believe that the proposed amended fees will have any meaningful effect on the competition among issuers listed on the Exchange.
The Exchange operates in a highly competitive market in which issuers can readily choose to list new securities on other exchanges and transfer listings to other exchanges if they deem fee levels at those other venues to be more favorable. Because competitors are free to modify their own fees, and because issuers may change their chosen listing venue, the Exchange does not believe its proposed fee change can impose any burden on intermarket competition.
No written comments were solicited or received with respect to the proposed rule change.
Pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Sections 902.02, 902.03 and 902.08 of the NYSE Listed Company Manual (the “Manual') to (i) amend its initial listing fee and certain of its annual fees charged to listed issuers, and (ii) establish a maximum fee payable in a calendar year for debt securities and structured products listed on the NYSE Bonds platform. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend its initial listing fee and certain of its annual fees charged to listed issuers as set forth in Sections 902.02 and 902.03 of the Manual. The proposed changes will take effect from the beginning of the calendar year commencing on January 1, 2025.
The Exchange currently charges a flat initial listing fee of $300,000 the first time an issuer lists a class of common shares on the Exchange. The Exchange proposes to increase this flat initial listing fee by $25,000 from $300,000 to $325,000. Section 902.03 of the Manual contains examples of how listing fees are calculated for certain UPREITs, U.S. issuers and foreign private issuers. The Exchange proposes to make conforming changes to these examples in Section 902.03 to reflect the new $325,000 flat initial listing fee.
The Exchange currently charges an annual fee of $0.001265 per share for each of the following: a primary class of common shares (including Equity Investment Tracking Stocks); each additional class of common shares (including tracking stock); a primary class of preferred stock (if no class of common shares is listed); each additional class of preferred stock (whether primary class is common or preferred shares); and each class of warrants or rights. The Exchange proposes to change the per share annual fee for the foregoing classes of securities from $0.001265 per share to $0.001285 per share.
The annual fee for a primary class of common shares (including Equity Investment Tracking Stocks) and a primary class of preferred stock (if no class of common shares is listed) is currently subject to a minimum fee of $80,000 per year. The Exchange proposes to increase the minimum fee for such securities from $80,000 per year to $82,000 per year.
The proposed increase in (i) the initial listing fee, (ii) the per share rates for annual fees, and (iii) the minimum annual fee for a primary class of equity or preferred stock reflects increases in the costs the Exchange incurs in providing services to listed companies on an ongoing basis, as well as increases in the costs of conducting its related regulatory activities. As described below, the Exchange proposes to make the aforementioned fee increases to better reflect the Exchange's costs related to listing equity securities and the corresponding value of such listing to companies.
The revised annual fees will be applied in the same manner to all issuers with listed securities in the affected categories and the Exchange believes that the changes will not disproportionately affect any specific category of issuers.
The Exchange currently charges a flat $25,000 initial listing fee for (i) all securities that list under the debt standard in Section 703.19 of the Manual and trade on NYSE Bonds, and (ii) all debt securities that list under Sections 102.03 and 103.05 of the Manual and trade on NYSE Bonds (such securities described in items (i) and (ii), collectively, “NYSE Bonds Securities”). The Exchange charges annual fees for NYSE Bonds Securities on a tiered basis (from $25,000 to $100,000) according to the number of such securities listed and traded on the NYSE Bonds platform.
The Exchange notes that companies frequently issue several series of NYSE Bonds Securities at the same time. For example, as part of a single offering, a company may issue debt securities of different series with varying maturities (ex. 5-year, 10-year, 20-year or 30-year). In the Exchange's experience, there are efficiencies in (i) qualifying for listing multiple series of NYSE Bonds Securities of the same issuer, and (ii) servicing such listings on an ongoing basis. Because of these efficiencies, the Exchange believes it is appropriate to establish a maximum fee of $100,000 payable by an issuer of NYSE Bonds Securities in any calendar year.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that it is not unfairly discriminatory and represents an equitable allocation of reasonable fees to amend Sections 902.02 and 902.03 to (i) increase the initial listing fee and annual fees for the various categories of equity securities, and (ii) increase the minimum annual fee for a primary class of common equity or preferred stock because of the increased costs incurred by the Exchange since it established the current rates. The Exchange believes that it is not unfairly discriminatory and represents an equitable allocation of reasonable fees to amend Sections 902.08 to establish a maximum fee cap payable in any calendar year by an issuer of NYSE Bonds Securities because the Exchange experiences efficiencies is qualifying and servicing the listing of multiple series of bonds of the same issuer (or a wholly-owned subsidiary of such issuer). Currently, there are more than 170 issuers of NYSE Bonds Securities and the substantial majority of those issuers will not see their fees change as a result of the proposed maximum fee cap. No issuer will see an increase in its listing fees for NYSE Bonds Securities.
The Exchange believes that the proposed changes to its initial listing fee and the annual fee schedule (including the minimum fee) are reasonable. In that regard, the Exchange notes that its general costs to support its listed companies have increased, including due to price inflation. The Exchange also continues to expand and improve the services it provides to listed companies. Specifically, the Exchange has (among other things) increased expenditure on listed companies and the value of an NYSE listing by increasing programming for listed companies and enhancing its conference space which can be utilized by listed companies.
The Exchange believes that it is reasonable to establish a maximum fee cap payable in any calendar year by an issuer of NYSE Bonds Securities because there are efficiencies in listing multiple series of bonds of the same issuer (or a wholly-owned subsidiary of such issuer).
The Exchange operates in a highly competitive marketplace for the listing of the various categories of securities affected by the proposed annual fee adjustments. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS,
The Exchange believes that the ever-shifting market share among the exchanges with respect to new listings and the transfer of existing listings between competitor exchanges demonstrates that issuers can choose different listing markets in response to
Given this competitive environment, the adoption of the proposed increase to the initial listing fee and annual fees for various categories of equity securities represents a reasonable attempt to address the Exchange's increased costs in servicing these listings while continuing to attract and retain listings. The establishment of a maximum fee cap payable in a calendar year by issuers of NYSE Bonds Securities represents a reasonable attempt to accurately reflect the Exchange's costs in listing and servicing such securities.
The Exchange proposes to make the aforementioned fee increases in Sections 902.02, 902.03 and 903.08 to better reflect the value of such listing to issuers.
The Exchange believes its proposal equitably allocates its fees among its market participants.
The Exchange believes that the proposed amendments to the initial listing fee and annual fees for equity securities are equitable because they do not change the existing framework for such fees, but simply increase the amount of the flat initial listing fee, minimum annual fee, and per unit annual fee to reflect increased operating costs. Similarly, as the fee structure remains effectively unchanged apart from the proposed increases in the rates paid by all issuers, the changes to the initial listing fee or annual fees for equity securities neither target nor will they have a disparate impact on any particular category of issuer.
The Exchange believes that the proposed maximum fee cap for issuers of NYSE Bonds Securities is equitable because the work required to list a bond does not increase on a proportional basis for each additional series of bonds that are listed on the Exchange. There are efficiencies in listing multiple series of bonds and the Exchange believes that its proposed fee cap is an equitable reflection of such efficiencies.
The Exchange believes that the proposal is not unfairly discriminatory. The proposed fee changes are not unfairly discriminatory among issuers of operating company equity securities because the same fee schedule will apply to all such issuers and the proposed fee cap will be available to all issuers. Further, the Exchange operates in a competitive environment and its fees are constrained by competition in the marketplace. Other venues currently list all of the categories of securities covered by the proposed fees and if a company believes that the Exchange's fees are unreasonable it can decide either not to list its securities or to list them on an alternative venue.
For the foregoing reasons, the Exchange believes that the proposal is consistent with the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is designed to ensure that the fees charged by the Exchange accurately reflect the services provided and benefits realized by listed companies. The market for listing services is extremely competitive. Each listing exchange has a different fee schedule that applies to issuers seeking to list securities on its exchange. Issuers have the option to list their securities on these alternative venues based on the fees charged and the value provided by each listing. Because issuers have a choice to list their securities on a different national securities exchange, the Exchange does not believe that the proposed fee changes impose a burden on competition.
The proposed amended fees will be charged to all listed issuers on the same basis. The Exchange does not believe that the proposed amended fees will have any meaningful effect on the competition among issuers listed on the Exchange.
The Exchange operates in a highly competitive market in which issuers can readily choose to list new securities on other exchanges and transfer listings to other exchanges if they deem fee levels at those other venues to be more favorable. Because competitors are free to modify their own fees, and because issuers may change their chosen listing venue, the Exchange does not believe its proposed fee change can impose any burden on intermarket competition.
No written comments were solicited or received with respect to the proposed rule change.
Pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Regulation G (17 CFR 244.100—244.102) under the Securities Exchange Act of 1934 (the “Exchange Act”) (15 U.S.C. 78a
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 control number.
On October 17, 2024, The Nasdaq Stock Market LLC (“Nasdaq” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Form F-X (17 CFR 239.42) is used to appoint an agent for service of process by Canadian issuers registering securities on Forms F-7, F-8, F-9, or F-10 under the Securities Act of 1933 (15 U.S.C. 77a
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 control number.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Commission invites comment on updates to its Electronic Data Collection System database (the Database), which will support information provided by members of the public who would like to file an online tip, complaint or referral (TCR) to the Commission. The Database will be a web based e-filed dynamic report based on technology that pre-populates and establishes a series of questions based on the data that the individual enters. The individual will then complete specific information on the subject(s) and nature of the suspicious activity, using the data elements appropriate to the type of complaint or subject. The information collection is voluntary. The public interface to the Database will be available using the agency's website,
The Commission further invites comment on updates to Form TCR, which is a hard copy form adopted by the Commission in 2011.
Written comments are invited on: (a) whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication by February 24, 2025.
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 control number.
Please direct your written comment to Austin Gerig, Director/Chief Data Officer, Securities and Exchange Commission, c/o Tanya Ruttenberg, 100 F Street, NE, Washington, DC 20549 or send an email to:
On November 6, 2024, The Nasdaq Stock Market LLC (“Nasdaq” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change, so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
1:30 p.m. on Friday, December 20, 2024.
The meeting will be held via remote means and/or at the Commission's headquarters, 100 F Street NE, Washington, DC 20549.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission's website at
The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
The subject matter of the closed meeting will consist of the following topics:
Institution and settlement of injunctive actions;
Institution and settlement of administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations and enforcement proceedings.
At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters.
For further information, please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
On June 25, 2024, Cboe BZX Exchange, Inc. (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
On August 28, 2024, pursuant to Section 19(b)(2) of the Exchange Act,
Section 19(b)(2) of the Act
The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change, as modified by Amendment No. 1, so that it has sufficient time to
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to make clarifying changes related to new Time-In-Force (“TIF”) instructions that were adopted as part of a recent proposal to expand the trading hours of its equity trading platform (referred to herein as “MIAX Pearl Equities”).
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to make clarifying changes related to new TIF instructions that were adopted as part of a recent proposal to expand the trading hours of MIAX Pearl Equities. The Exchange recently submitted a proposed rule change to expand its hours of operations by adopting both an Early and Late Trading Session.
The Exchange currently offers two TIF instructions, Immediate-Or-Cancel (“IOC”) and Regular Hours Only (“RHO”), the operation of each are described under Exchange Rule 2614(b)(1) and (2), respectively. In its proposal to add the Early and Late Trading Sessions, among other things, the Exchange amended its rules to adopt the following four additional TIF instructions: Day, Fill-Or-Kill (“FOK”), Good-`til Time (“GTT”), and Good-`til Extended Day (“GTX”). In sum, the Day TIF is an instruction that may be attached to an order stating that an order to buy or sell which, if not executed, expires at the end of Regular Trading Hours. The FOK TIF is an instruction that may be attached to an order stating that the order is to be executed in its entirety as soon as it is received and, if not so executed, cancelled. The GTT TIF is an instruction that may be attached to an order specifying the time of day at which the order expires. Lastly, the GTX TIF is an instruction that may be attached to an order to buy or sell which, if not executed, will be cancelled by the close of the Late Trading Session.
Like RHO, the TIF instructions of Day, GTT, and GTX all allow Equity Members
The Exchange now proposes to make other clarifying changes to its rules to account for the new TIF instructions that it inadvertently did not include in its earlier proposed rule change. As described below, each of these changes would ensure the Exchange's rules provide for the consistent treatment of like TIF instructions, provide additional clarity, and are consistent with the rules of other national securities exchanges. The Exchange does not propose to make any other changes to its rules or to amend functionality. Each of these changes are as follows:
• Exchange Rule 2614(a)(1)(ii) currently provides that a Limit Order may include a TIF of IOC or RHO. In the filing to adopt the Early and Late Trading Sessions and additional TIF instructions, Exchange Rule 2614(a)(1)(ii) was amended to also provide that a Limit Order may include a TIF of FOK, Day, GTT, or GTX.
• In sum, Exchange Rule 2614(c)(7) provides that Minimum Execution Quantity (“MEQ”) is an order instruction that may be attached to a non-displayed order requiring the System to execute the order only to the extent that a minimum quantity can be satisfied. Exchange Rule 2614(c)(7)(B) describes the operation of orders with an MEQ instruction when resting on the MIAX Pearl Equities Book. The Exchange now proposes to amend Exchange Rule 2614(c)(7)(ii) to account for the new additional TIF instructions and provide that “[w]here there is insufficient size to satisfy an incoming order's minimum quantity condition, that incoming order with a Minimum Execution Quantity instruction with a time-in-force of RHO
• Exchange Rule 2614(e) provides for the cancelation and replacement of an existing order. The Exchange now proposes to amend Exchange Rule 2614(e)(1) to include the new additional TIF instruction of FOK and provide that “[o]rders may only be cancelled or replaced if the order has a time-in-force term other than IOC
• Exchange Rule 2615(e) describes how the Exchange re-opens a security following a halt and provides, in sum, that the re-opening process would operate in the same manners as the Exchange's Opening Process set forth under Exchange Rule 2615(a)—(c), with certain exceptions. One exception is provided for under Exchange Rule 2615(e)(1) which states that orders with a TIF instruction of IOC would be cancelled or rejected, as applicable. The Exchange proposes to amend Exchange Rule 2615(e)(1) to include the TIF instruction of FOK and provide that “ISOs and orders that include a time-in-force of IOC
• Exchange Rule 2622 discusses the Exchange's mechanisms to comply with the Limit Up-Limit Down Plan.
○ First, Exchange Rule 2622(h)(2)(i)5.a. provides that Market Orders and orders designated IOC will only be executed at or within the Price Bands. This provision would be amended to also provide that orders designated as FOK will only be executed at or within the Price Bands.
○ Second, Exchange Rule 2622(h)(3)(B) provides that during any Operational Halt, the System will accept all orders, except orders designated as ISO and orders that include a TIF instruction of IOC, for queuing and participation in the Re-Opening Process pursuant to Rule 2615(e). This provision would be amended to also provide that orders that include a TIF instruction of FOK will not be accepted for queuing and participation in the Re-Opening Process pursuant to Rule 2615(e).
Due to the technological changes associated with this proposed change, the Exchange will issue a trading alert publicly announcing the implementation date of the proposed enhancements to its risk controls set forth herein. The Exchange anticipates that the implementation date will be in the first or second quarter of 2025.
The proposed rule change is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes its proposal will not impose any burden on inter-market competition because the proposal simply seeks to provide for the consistent treatment of like TIF instructions, provide market participants additional clarity within the Exchange's Rules, and provide consistency with the rules of other national securities exchanges.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not:
(i) significantly affect the protection of investors or the public interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change consists of amendments to the Clearing Agency Operational Risk Management Framework (“ORM Framework” or “Framework”) of NSCC and its affiliates The Depository Trust Company (“DTC”) and Fixed Income Clearing Corporation (“FICC,” and together with NSCC and DTC, the “Clearing Agencies”) in order to reflect recent changes to group names and make other nonmaterial clarifying edits.
In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Clearing Agencies adopted the ORM Framework
In connection with the annual review and approval of the Framework by the Board of Directors of each of the Clearing Agencies, the Clearing Agencies are proposing to make certain revisions to the Framework. Such proposed changes would include updating the ORM Framework to reflect recent changes to group names and making other nonmaterial clarifying edits. The proposed changes are described in greater detail below.
The Framework is owned and managed by an officer within the Operational Risk group within the Group Chief Risk Office of DTCC,
The proposed rule change would make additional immaterial edits to the Framework that include (a) the removal of a defined term not used in the Framework and therefore unnecessary, and (b) adding additional context in Section 6 related to data centers. The proposed changes to Section 6 add context around data centers, specifically the out-of-region centers, to allow for greater understanding of configurations, parameters, and limitations. This proposed change also provides consistency across the Clearing Agencies disclosures. These immaterial changes do not alter how the Clearing Agencies comply with the applicable requirements of Rule 17ad-22(e)(17) under the Act.
The Clearing Agencies believe that the proposed changes are consistent with Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that the rules of a registered clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions, and to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
The Clearing Agencies do not believe that the proposed changes to the ORM Framework described above would have any impact, or impose any burden, on competition. The proposed changes would enhance the Framework by providing additional clarity and accuracy concerning the Clearing Agencies' operational risk management processes. The proposed changes to the Framework would not advantage or disadvantage any participant or user of the Clearing Agencies' services or unfairly inhibit access to the Clearing Agencies' services. As such, the Clearing Agencies do not believe that the proposed rule changes would have any impact on competition.
The Clearing Agencies have not received or solicited any written comments relating to this proposal. If any written comments are received, they will be publicly filed as an Exhibit 2 to this filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b-4, the Commission does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information.
All prospective commenters should follow the Commission's instructions on how to submit comments, available at
The Clearing Agencies reserve the right to not respond to any comments received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission” or “SEC”).
Notice.
Notice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the “Act”) and rule 17d-1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 under the Act.
The Commission:
Laura L. Solomon, Senior Counsel, or Terri G. Jordan, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
For Applicants' representations, legal
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule change consists of amendments to the Clearing Agency Operational Risk Management Framework (“ORM Framework” or “Framework”) of FICC and its affiliates National Securities Clearing Corporation (“NSCC”) and The Depository Trust Company (“DTC,” and together with NSCC and FICC, the “Clearing Agencies”) in order to reflect recent changes to group names and make other nonmaterial clarifying edits.
In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Clearing Agencies adopted the ORM Framework
In connection with the annual review and approval of the Framework by the Board of Directors of each of the Clearing Agencies, the Clearing Agencies are proposing to make certain revisions to the Framework. Such proposed changes would include updating the ORM Framework to reflect recent changes to group names and making other nonmaterial clarifying edits. The proposed changes are described in greater detail below.
The Framework is owned and managed by an officer within the Operational Risk group within the Group Chief Risk Office of DTCC,
The proposed rule change would make additional immaterial edits to the Framework that include (a) the removal of a defined term not used in the Framework and therefore unnecessary, and (b) adding additional context in Section 6 related to data centers. The proposed changes to Section 6 add context around data centers, specifically the out-of-region centers, to allow for greater understanding of configurations, parameters, and limitations. This proposed change also provides consistency across the Clearing Agencies disclosures. These immaterial changes do not alter how the Clearing Agencies comply with the applicable requirements of Rule 17ad-22(e)(17) under the Act.
The Clearing Agencies believe that the proposed changes are consistent with Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that the rules of a registered clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions, and to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.
The Clearing Agencies do not believe that the proposed changes to the ORM Framework described above would have any impact, or impose any burden, on competition. The proposed changes would enhance the Framework by providing additional clarity and accuracy concerning the Clearing Agencies' operational risk management processes. The proposed changes to the Framework would not advantage or disadvantage any participant or user of the Clearing Agencies' services or unfairly inhibit access to the Clearing Agencies' services. As such, the Clearing Agencies do not believe that the proposed rule changes would have any impact on competition.
The Clearing Agencies have not received or solicited any written comments relating to this proposal. If any written comments are received, they will be publicly filed as an Exhibit 2 to this filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b-4, the Commission does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information.
All prospective commenters should follow the Commission's instructions on how to submit comments, available at
The Clearing Agencies reserve the right to not respond to any comments received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes one new request, as well as extensions and revisions of OMB-approved information collections.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers.
Or you may submit your comments online through
The information collections below are pending at SSA. SSA will submit them to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than February 24, 2025. Individuals can obtain copies of the collection instruments by writing to the above email address.
1. Request for Hearing by Administrative Law Judge—20 CFR 404.929, 404.933, 416.1429, 404.1433, 418.1350, and 42 CFR 405.722—0960-0269. When SSA denies applicants', claimants', or beneficiaries' requests for new or continuing disability benefits or payments, the Act entitles those applicants, claimants, or beneficiaries to request a hearing to appeal the decision. To request a hearing, individuals complete Form HA-501; the associated Modernized Claims System (MCS) or Supplemental Security Income (SSI) Claims System interview; or the internet application (i501). SSA uses the information to determine if the individual: (1) filed the request within the prescribed time; (2) is the proper party; and (3) took the steps necessary to obtain the right to a hearing. SSA also uses the information to determine: (1) the individual's reason(s) for disagreeing with SSA's prior determinations in the case; (2) if the individual has additional evidence to submit; (3) if the individual wants an oral hearing or a decision on the record; and (4) whether the individual has (or wants to appoint) a representative. The respondents are Social Security or SSI disability applicants and recipients who want to appeal SSA's denial of their request for new or continued benefits for disability and non-medical hearing requests; and Medicare Part B recipients who must pay the Medicare Part B Income-Related Monthly Adjustment Amount.
2. Surveys in Accordance with E.O. 12862 for the Social Security Administration—0960-0526. Under the auspices of Executive Order 12862, Setting Customer Service Standards, SSA conducts multiple customer satisfaction surveys each year. These voluntary customer satisfaction assessments include paper, internet, and telephone surveys; mailed questionnaires; and customer comment cards. The purpose of these questionnaires is to assess customer satisfaction with the timeliness, appropriateness, access, and overall quality of existing SSA services and proposed modifications or new versions of services. The respondents are recipients of SSA services (including most members of the public), professionals, and individuals who work on behalf of SSA beneficiaries.
3. Request for Reconsideration—20 CFR 404.907-404.921, 416.1407-416.1421, 408.1009, and 418.1325—0960-0622. The Social Security Act states those individuals who are dissatisfied with the results of an initial determination regarding their Title II disability; Tile XVI disability (Supplemental Security Income); Title VIII (Special Veterans benefits); or Title XVIII (Medicare benefits), they can request a reconsideration hearing. Individuals use Form SSA-561-U2; the associated MCS or SSI Claims System interview; or the internet application (i561) to initiate a request for reconsideration of a denied claim. SSA uses the information to document the request and to determine an individual's eligibility or entitlement to Social Security benefits (Title II); SSI payments (Title XVI); Special Veterans Benefits (Title VIII); Medicare (Title XVIII); and for initial determinations regarding
4. Supportive Housing & Individual Placement and Support (SHIPS) Study—0960-0840.
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•
The primary goals of the SHIPS study are:
• To measure the effects of IPS participation on employment, income, health, and long-term self-sufficiency measured as a combination of housing stability, income, and receipt of DI and SSI benefits.
• To describe the study population to understand both the generalizability of the study's findings and the potential reasons for the observed effects.
• To explore the IPS implementation process to understand barriers and facilitators to high-fidelity IPS implementation in the supportive housing context.
Grantee researchers and SSA will use the information collected during this study to: (1) assess the short-term and long-term effectiveness of the proposed intervention to improve employment, income, and self-sufficiency; (2) understand the implementation process; (3) provide detailed subgroup-specific data related to the effect of IPS.
The respondents are residents in supportive housing units operated by
Notice is hereby given of the following determinations: I hereby determine that certain objects being imported from abroad pursuant to agreements with their foreign owners or custodians for temporary display in the exhibition “Iba N'Diaye: Between Latitude and Longitude” at The Metropolitan Museum of Art, New York, New York, and at possible additional exhibitions or venues yet to be determined, are of cultural significance, and, further, that their temporary exhibition or display within the United States as aforementioned is in the national interest. I have ordered that Public Notice of these determinations be published in the
Reed Liriano, Program Coordinator, Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
The foregoing determinations were made pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
Surface Transportation Board.
Approval of rail cost adjustment factor.
The Surface Transportation Board has adopted the first quarter 2025 Rail Cost Adjustment Factor and cost index filed by the Association of American Railroads.
Pedro Ramirez, (202) 245-0333. If you require an accommodation under the Americans with Disabilities Act, please call (202) 245-0245.
The rail cost adjustment factor (RCAF) is an index formulated to represent changes in railroad costs incurred by the nation's largest railroads over a specified period of time. The Surface Transportation Board (Board) is required by law to publish the RCAF on at least a quarterly basis. Each quarter, the Association of American Railroads computes three types of RCAF figures and submits those figures to the Board for approval. The Board has reviewed the submission and adopts the RCAF figures for the first quarter of 2025. The first quarter 2025 RCAF (Unadjusted) is 0.944. The first quarter 2025 RCAF (Adjusted) is 0.367. The first quarter 2025 RCAF-5 is 0.347. Additional information is contained in the Board's decision, which is available at
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
Central Oregon & Pacific Railroad, Inc. (CORP), a Class III rail carrier, has filed a verified notice of exemption pursuant to 49 CFR 1150.41 to lease from Union Pacific Railroad Company (UP) and operate the (1) Brooklyn
According to the verified notice, UP is the current operator of the Line. CORP states that it has entered into an agreement with UP to lease and operate the Line.
CORP certifies that its projected annual revenues as a result of this transaction will not exceed those that would qualify it as a Class III rail carrier but its annual revenues currently exceed $5,000,000. Pursuant to 49 CFR 1150.42(e), if a carrier's projected annual revenues will exceed $5 million, it must, at least 60 days before the exemption becomes effective, post a notice of its intent to undertake the proposed transaction at the workplace of the employees on the affected lines, serve a copy of the notice on the national offices of the labor unions with employees on the affected lines, and certify to the Board that it has done so. In an exhibit attached to its verified notice of exemption, CORP certified that notice of the transaction was posted at the workplaces of current UP employees on the Line on December 10, 2024, and that it was concurrently serving a copy of the certification and the verified notice on the national offices of the labor unions for those employees.
According to the verified notice, the lease contains an interchange commitment. CORP has provided additional information regarding the interchange commitment, as required by 49 CFR 1150.43(h).
The earliest this transaction may be consummated is February 8, 2025 (60 days after the certification under 49 CFR 1150.42(e) was filed).
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than January 31, 2025.
All pleadings, referring to Docket No. FD 36818, must be filed with the Surface Transportation Board either via e-filing on the Board's website or in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on CORP's representative, Eric M. Hocky, Clark Hill PLC, Two Commerce Square, 2001 Market Street, Suite 2620, Philadelphia, PA 19103.
According to CORP, this action is categorically excluded from environmental review under 49 CFR 1105.6(c) and from historic preservation reporting requirements under 49 CFR 1105.8(b).
Board decisions and notices are available at
By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings.
Office of the United States Trade Representative (USTR).
Notice; correction.
The Office of the United States Trade Representative (USTR) published a notice in the
The changes made by this notice are applicable on January 1, 2025.
Sarah Fasano, Office of Agricultural Affairs, 202.395.6127 or
In the December 11 notice (89 FR 99959), USTR provided notice of the tariff-rate quota quantity limitations in calendar year 2025 of originating goods of Australia entering the United States under certain subheadings of the HTSUS. USTR became aware of a ministerial error in paragraph 10 of the Annex of the December 11 notice. This paragraph indicates that for purposes of U.S. note 17 to subchapter XXII of chapter 98 of the HSTUS, the aggregate quantity of originating goods of Australia entered under subheading 9822.04.45 shall not exceed 1,355,423 metric tons for calendar year 2025. USTR is correcting this paragraph to indicate that for purposes of U.S. note 17 to subchapter XXII of chapter 98 of the HSTUS, the aggregate quantity of originating goods of Australia entered under subheading 9822.04.45 shall not exceed 1,355 metric tons for calendar year 2025.
Federal Highway Administration (FHWA), DOT.
Notice and request for comments.
The FHWA has forwarded the information collection request described in this notice to the Office of Management and Budget (OMB) to approve a new information collection. We are required to publish this notice in the
Please submit comments by January 27, 2025.
You may submit comments identified by DOT Docket ID Number 0083 by any of the following methods:
Follow the online instructions for submitting comments.
Melissa Corder, 202-366-5853, Office of
We published a
Issued on: December 18, 2024.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of application for exemption; request for comments.
FMCSA announces that it has received an application for an exemption from the American Public Transportation Association (APTA), on behalf of public transit agencies and their contractor partners, to allow State Driver Licensing Agencies (SDLAs) to waive the “under-the-hood” portion of the pre-trip vehicle inspection skills test requirement for commercial driver's license (CDL) applicants seeking to operate vehicles in public transportation, including interstate commerce. FMCSA requests public comment on APTA's request for an exemption.
Comments must be received on or before January 27, 2025.
You may submit comments identified by Federal Docket Management System (FDMS) Number FMCSA-2024-0293 by any of the following methods:
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Each submission must include the Agency name and the docket number (FMCSA-2024-0293) for this notice. Note that DOT posts all comments received without change to
Mr. Richard Clemente, Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards, FMCSA; (202) 366-2722;
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2024-0293), indicate the specific section of this document to which the comment applies, and provide a reason for your suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to the notice contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to the notice, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission that constitutes CBI as “PROPIN” to indicate it contains proprietary information. FMCSA will treat such marked submissions as confidential under the Freedom of Information Act, and they will not be placed in the public docket of the notice. Submissions containing CBI should be sent to Brian Dahlin, Chief, Regulatory Evaluation Division, Office of Policy, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001 or via email at
FMCSA has authority under 49 U.S.C. 31136(e) and 31315(b) to grant exemptions from Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted and determines whether granting the exemption would likely maintain a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305(a)). The Agency must publish its decision in the
The CDL regulations at 49 CFR 383.113(a) require that applicants for a CDL possess basic pre-trip vehicle inspection skills for the vehicle class that they operate or expect to operate. Applicants must be able to identify each safety-related part on the test vehicle and explain what needs to be examined during a pre-trip vehicle inspection to ensure the safe operation of the commercial motor vehicle. Under 49 CFR 383.113(a)(1)(i), applicants must possesses this skill for the engine compartment of the vehicle. This portion of the test is known as the “under-the-hood” testing component.
APTA, on behalf of public transit agencies and their contractor partners, applied for an exemption from the “under-the-hood” portion of the pre-trip inspection segment of the CDL skills test. The exemption would allow SDLAs to waive the engine compartment component of the pre-trip vehicle inspection skills test required under 49 CFR 383.113(a)(1)(i) for CDL applicants seeking to operate vehicles in public transportation, including interstate transportation.
According to the applicant, the public transit industry continues to experience a severe shortage of drivers and is struggling to maintain its workforce. APTA has identified the “under-the-hood” testing requirement as a significant impediment to hiring bus operators, leading to reduced transit service, missed trips, and increased costs for public transit agencies. APTA believes that the CDL “under-the-hood” test is completely unrelated to transit bus operators' job responsibilities; creates equity concerns and serves as a deterrent to certain individuals who would otherwise thrive in this career; and is increasingly becoming obsolete with the transition to zero-emission vehicles. The applicant further adds that its members' bus operator hiring issues are similar to those faced by the school bus industry and that FMCSA has granted similar relief allowing States to waive the “under-the-hood” test for CDL applicants intending to become school bus operators.
In support of its application, APTA submitted a research report it commissioned entitled, “Impact of CDL Under-the-Hood Testing Requirement on Public Transit Agencies' Ability to Hire Bus Operators,” dated November 1, 2024.
A copy of APTA's application for exemption and its research report are available for review in the docket for this notice.
In accordance with 49 U.S.C. 31315(b), FMCSA requests public comment from all interested persons on the APTA's application for an exemption. All comments received before the close of business on the comment closing date indicated at the beginning of this notice will be considered and will be available for examination in the docket at the location listed under the
Departmental Offices, U.S. Department of the Treasury.
Notice of information collection; request for comment.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other federal agencies to comment on the proposed information collections listed below, in accordance with the Paperwork Reduction Act of 1995.
Written comments must be received on or before February 24, 2025.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to Treasury PRA Clearance Officer, 1750 Pennsylvania Ave. NW, Suite 8100, Washington, DC 20220, or email at
Copies of the submissions may be obtained from Spencer W. Clark by emailing
Veterans Health Administration, Department of Veterans Affairs.
Notice.
Veterans Health Administration (VHA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Comments must be received on or before February 24, 2025.
Comments must be submitted through
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VHA invites comments on: (1) whether the proposed collection of information is necessary
VA Form 10-10EC, Application for Extended Care Services, is used to collect financial information necessary to determine a Veteran's copayment obligation for extended care services, also known as long term care (LTC). The 10-10EC design has been revised to clarify the instructions and make it easier to understand and complete the form. However, there are no changes to the anticipated annual number of responses or burden hours for this information collection.
Department of Veterans Affairs.
Notice of funding availability.
The Department of Veterans Affairs (VA) is announcing the availability of funds for grants under the SSVF Program. This NOFO contains information concerning the SSVF Program, the renewal and new applicant grant application processes, and the amount of funding available. Awards made for grants will fund operations beginning October 1, 2025.
Applications for grants must be received by 4 p.m. eastern standard time on March 3, 2025. In the interest of fairness to all competing applicants, this deadline is firm as to date and hour. VA will treat as ineligible for consideration any application that is received after the deadline. Applicants should take this practice into account and submit their materials early to avoid risk of loss of eligibility, unanticipated delays, computer service outages, or other submission-related problems.
Information about the application can be downloaded from the SSVF website at
A.
SSVF prioritizes the delivery of rapid re-housing services to homeless Veteran households. Rapid re-housing is an intervention designed to help individuals and families quickly exit homelessness, return to housing in the community, and avoid homelessness again in the near term. The core components of a rapid re-housing program are housing identification, move-in and rent financial assistance, and rapid rehousing case management and services. These core components represent the minimum that a program must provide to households to be considered a rapid rehousing program. Applicants should familiarize themselves with the Homelessness Prevention and Rapid Re-housing Best Practice Standards found at
B.
Under Priority 1, SSVF is introducing a new priority for FY 2026 to expand services to Tribal and rural communities and the U.S. territories. VA has the ability to award up to a 3-year project period to Tribal and rural communities and the U.S. territories under this NOFO. Indian Tribe means a Tribe that is a federally recognized Tribe or a State recognized tribe. See 25 U.S.C. 4103(13). With this priority, SSVF is seeking Native-led organizations, organizations who are deeply invested in providing services on Tribal lands and reservations, and organizations who have extensive experience working with Native Veterans and Veteran families. There is an emphasis on organizations that would serve the 29 Tribal communities that have Tribal Department of Housing and Urban Development—VA Supportive Housing (HUD-VASH) (
Rural communities are defined using the U.S. Department of Agriculture's (USDA) definition of a rural area. Rural means: 1. Open countryside; 2. Rural towns (places with fewer than 5,000 people and 2,000 housing units); and 3. Urban areas with populations ranging up to 50,000 people that are not part of larger labor market areas (metropolitan areas) (
The U.S. territories are a priority including American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands. Priority 1 for FY 2026 is open to new and existing applicants; however, priority will be given to organizations that have a demonstrated track record of serving the Tribal or rural community or the U.S. territory that they are proposing to serve. Additionally, applicants should have demonstrated cultural awareness and language access for the areas they are proposing to serve.
Under Priority 2, VA will provide funding to existing grantees who have at least one of the following accreditations: 3-year accreditation from the Commission on Accreditation of Rehabilitation Facilities (CARF) in Employment and Community Services: Rapid Rehousing and Homeless Prevention standards, a 4-year accreditation in Housing Stabilization and Community Living Services from the Council on Accreditation (COA), or a 3-year accreditation in The Joint Commission's (JC) Behavioral Health Care: Housing Support Services Standards. Priority 2 applicants must demonstrate that accreditation is active at the date of submission, and accreditation must be maintained throughout the project period and/or funding cycle.
Under Priority 3, existing SSVF grantees not included in Priority 2 but who have annual awards and are seeking to renew their grants, may apply. Existing grantees are SSVF grantees that have a Memorandum of Agreement (MOA) for operations through September 30, 2025.
C.
The additional funds may be used to facilitate the leasing of rental units to tenants with significant housing barriers. Landlords are less likely to lease to certain groups due to the risk of non-payment of rent or concerns about damage or disruption to their buildings. Tenants with significant housing barriers might include Veterans with poor credit histories and criminal justice involvement that might otherwise disqualify them from obtaining a lease. Veterans with histories of sex offenses are generally considered high-risk tenants by landlords. Veterans are sometimes reluctant to move into apartments that do not offer any of the comforts typically associated with living independently.
The General Housing Stability Assistance (GHSA), provided under 38 CFR 62.34(e), while offering some funds for bedding and kitchen supplies, leaves significant needs unaddressed. Therefore, grantees also will be allowed to provide up to $1,000 to Veteran families for miscellaneous move-in expenses under 38 CFR 62.34(g), to encourage them to obtain permanent housing with a lease of not less than 1 year. These funds are to be provided to assist Veterans through accounts established at local merchants, such as grocery stores and retailers, in the enrolled Veteran's name. These items could include, but are not limited to, food, furniture, household items, electronics (including televisions), or other items typically associated with independent living in permanent housing.
Furthermore, internet can now be considered as utilities as the definition for financial assistance as utility payments under 38 CFR 62.34(b) is expected with this NOFO to include these changes. Access to the internet is an essential component of the modern economy, comparable to utilities. Veterans without such access are put at a disadvantage in finding and applying for work opportunities, purchasing needed consumer goods at the lowest possible cost, and communicating through email and other forms of social media.
In addition to the definitions and requirements described in 38 CFR part 62, this NOFO provides further clarification in this paragraph on the use of Emergency Housing Assistance (EHA). EHA may be provided by the SSVF grantee under 38 CFR 62.34(f) to
D.
Through this NOFO, grantees can pay fees related to securing a lease of at least 1 year. In addition, as noted previously herein, Veterans are sometimes reluctant to move into apartments that do not offer any of the comforts typically associated with living independently. Pursuant to this NOFO, grantees would be able to use funds for miscellaneous expenses associated with moving into a new home. Moreover, nationally, the median average rental unit has increased in price by 28% since September 2023.
Furthermore, service-connected Veterans with high levels of disability may have incomes that exceed the current SSVF income threshold of 50% of the Area Median Income (AMI). These Veterans, some of the most vulnerable served by the VA, can be left ineligible for critically needed SSVF services. As a result, VA is invoking the provision in 38 U.S.C. 2044(f)(6)(C) and 38 CFR 62.2, allowing VA to establish an income ceiling higher or lower than 50% of the AMI if VA determines that such variations are necessary because the area has unusually high or low construction costs, fair market rents (as determined under section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f) or family incomes. AMI is one factor SSVF uses to establish eligibility. A higher income ceiling, as reflected by the AMI, will allow grantees to serve Veterans who have endured significant increases in their housing cost burden, placing them at greater risk for homelessness. For the purposes of this NOFO, grantees will be able to serve Veterans in their communities who have up to 80% of AMI. Aligning SSVF and HUD-VASH eligibility will allow SSVF grantees' housing navigators to assist Veterans eligible for HUD-VASH as necessary with identifying and obtaining permanent housing. Aligning SSVF and HUD-VASH eligibility will also improve the coordination of care and simplify and standardize eligibility determinations.
Applicants are strongly encouraged to provide letters of support from the Continuums of Care (CoC) in the location where they plan to deliver services, reflecting the applicant's engagement in the CoC's efforts to coordinate services. A CoC is a community planning entity that organizes and delivers housing and services to meet the needs of people who are homeless as they move to stable housing and maximize housing stability. The CoC develops and implements plans to end homelessness and prevent a return to homelessness. CoC locations and contact information can be found at
The CoC's letter of support should note if the applicant is providing assistance to the CoC in building local capacity to build Coordinated Entry Systems (CES) and the value and form of that assistance, whether support is direct funding or staffing. CES requires that providers operating within the CoC's geographic area must also work together to ensure the CoC's coordinated entry process allows for coordinated screening, assessment, and referrals (HUD Notice: CPD-17-01). The CoC's letter of support also must describe the applicant's participation in the CoC's community planning efforts. Failure for a Priority 2 or Priority 3 applicant to provide a letter of support from the CoC as described may limit the maximum award to 90% of the award made in the previous fiscal year as described herein at II.C.6. In addition, any applicant proposing to serve a Native American Tribal area is strongly encouraged to provide a letter of support from the relevant Tribal Government. Priority 1 applicants are strongly encouraged to provide a CoC letter of support, a letter from the relevant Indian Tribal Government, or other relevant letter of support.
The aim of the provision of supportive services is to assist very low-income Veteran families residing in permanent housing to remain stably housed and to rapidly transition those not currently in permanent housing to stable housing. Assistance in obtaining or retaining permanent housing is a fundamental goal of the SSVF Program. SSVF emphasizes the placement of homeless Veteran families who are described in 38 CFR 62.11(b)-(c) as follows:
(b)(1) Is lacking a fixed, regular and adequate nighttime residence, meaning:
(i) That the Veteran family's primary nighttime residence is a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings, including a car, park, abandoned bus or train station, airport, or camping ground,
(ii) That the Veteran family is living in a supervised publicly or privately operated shelter designated to provide temporary living arrangements (including congregate shelters, transitional housing, and hotels and motels paid for by charitable organizations or by Federal, State, or local government programs for low-income individuals), or
(iii) That the Veteran family is exiting an institution where the Veteran family resided for 90 days or less and who resided in an emergency shelter or place not meant for human habitation immediately before entering that institution,
(b)(2) Are at risk to remain in the situation described herein at paragraph,
(b)(1) of this section but for the grantee's assistance, and
(b)(3) Scheduled to become a resident of permanent housing within 90 days pending the location or development of housing suitable for permanent housing or; (c) Has met any of the conditions described herein at paragraph (b)(1) of this section after exiting permanent housing within the previous 90 days to seek other housing that is responsive to the very low-income Veteran family's needs and preferences.
E.
F.
1. Grantees may use a maximum of 10% of supportive services grant funds for administrative costs identified in 38 CFR 62.70(e).
2. Grantees must enroll a minimum of 60% of Veteran households who are
3. Grantees are required to have available temporary financial assistance resources that can be paid directly to a third party on behalf of a participant and may be used for childcare, emergency housing assistance, transportation, rental assistance, utility-fee payment assistance, security deposits, utility deposits, moving costs, and general housing stability assistance (which includes emergency supplies) and as otherwise stated in 38 CFR 62.33 and 38 CFR 62.34.
4. Grantees are able to provide up to $1,000 supplemental assistance to every Veteran household who obtains a lease of not less than 1 year to cover miscellaneous move-in expenses.
5. Grantees are able to pay landlords up to an amount equal to 2 months' rent for fees related to securing a lease of at least 1 year. This incentive may be provided at lease-up or split up into multiple payments to be paid within the first 90 days of the Veteran being housed.
G.
Grantees must develop plans that will ensure that Veteran participants have the level of income and economic stability needed to remain in permanent housing after the conclusion of the SSVF intervention. Both employment and benefits assistance from VA and non-VA sources represent a significantly underutilized source of income stability for homeless Veterans. Income is not a pre-condition for housing. Case management should include income maximization strategies to ensure households have access to benefits, employment, and financial counseling. The complexity of program rules and the stigma some associate with entitlement programs contribute to their lack of use. For this reason, grantees are encouraged to consider strategies that can lead to prompt and successful access to employment and benefits that are essential to retaining housing.
Consistent with 38 CFR 62.30-62.34, grantees are expected to offer the following supportive services: counseling participants about housing; assisting participants in understanding leases; securing utilities; making moving arrangements; providing representative payee services concerning rent and utilities when needed; using health care navigation services to help participants access health and mental health care; providing legal services; and providing mediation and outreach to property owners related to locating or retaining housing. Grantees also may assist participants by providing rental assistance; security or utility deposits; moving costs; emergency housing; or general housing stability assistance; or using other Federal resources, such as the HUD Emergency Solutions Grants Program (ESG) or supportive services grant funds subject to the limitations described in this NOFO and 38 CFR 62.34.
1. As SSVF is a short to medium-term crisis intervention, grantees must develop plans with Veterans and Veteran families that will maximize income and supports to help Veterans sustain permanent housing at the conclusion of SSVF. Grantees must ensure the availability of employment and vocational services either through providing the services directly or through formal or informal service agreements with other agencies. Agreements with the Homeless Veteran Reintegration Programs funded by the U.S. Department of Labor are strongly encouraged. For participants unable to work due to disability, income must be established through available benefits programs.
2. Per 38 CFR 62.33, grantees must assist participants in obtaining public benefits. Grantees must screen all participants for eligibility for a broad range of entitlements such as the U.S. Department of Health and Human Services' (HHS) Temporary Assistance for Needy Families, Social Security, the USDA's Supplemental Nutrition Assistance Program, the HHS Low-Income Home Energy Assistance Program, the Earned Income Tax Credit, and local General Assistance programs. Grantees are expected to access the Substance Abuse and Mental Health Services Administration's Supplemental Security Income/Social Security Disability Insurance Outreach, Access, and Recovery (SOAR) program directly by training staff and providing the service or subcontracting services to an organization to provide SOAR services. In addition, where available, grantees should access information technology tools to support case managers in their efforts to link participants to benefits.
3. In accordance with 38 CFR 62.33(g), grantees must assist participants in obtaining and coordinating the provision of legal services relevant to issues that interfere with the participants' ability to obtain or retain permanent housing or supportive services. Grantees may provide legal services directly, through a formal referral agreement as contract services, or through referrals to another entity. (NOTE: Information regarding legal services provided may be protected from being released to the grantee or VA under attorney-client privilege, although the grantee must provide sufficient information to demonstrate the frequency and type of service delivered.) Support for legal services can include paying for court filing fees to assist a participant with issues that interfere with the participant's ability to obtain or retain permanent housing or supportive services, including issues that affect the participant's employability and financial security. Grantees (in addition to employees and members of grantees) may represent participants before VA with respect to a claim for VA benefits, but only if they are recognized for that purpose pursuant to 38 U.S.C. chapter 59. Further, the individual providing such representation must be accredited pursuant to 38 U.S.C. chapter 59.
4. Access to mental health and addiction services is required by SSVF; however, grantees cannot fund these services directly through the SSVF grant. Applicants must demonstrate their ability to promote rapid access to and engagement with mental health and addiction services for Veterans and Veteran families. In the past, grantees were able to add health care navigator responsibilities to existing positions as an alternative to hiring a Health Care Navigator. Beginning in FY 2026, the Health Care Navigator position is required. Grantees are required to hire at least one Health Care Navigator that will assist participants with accessing health and mental health services.
5. When serving participants who are residing in permanent housing, the defining question to ask is “Would this
6. SSVF grantees are required to participate in local planning efforts designed to end Veteran homelessness. Grantees may use grant funds to support SSVF involvement in such community planning by sub-contracting with CoCs, when such funding is essential, to create or sustain the development of these data driven plans.
7. When other funds from community resources are not readily available to assist program participants, grantees may choose to use supportive services grants, to the extent described in this NOFO and in 38 CFR 62.33 and 62.34, to provide temporary financial assistance. Such assistance may, subject to the limitations in this NOFO and 38 CFR part 62, be paid directly to a third party on behalf of a participant for childcare; transportation; family emergency housing assistance; rental assistance; utility-fee payment assistance; security or utility deposits; moving costs; and general housing stability assistance as necessary.
8. SSVF requires grantees to offer Rapid Resolution (also known as diversion or problem-solving) services. These services engage Veterans immediately before or after they become homeless and assist them to avoid continued homelessness. These efforts can reduce the trauma and expense associated with extended periods of homelessness, and the strain on the crisis response and affordable housing resources in the community. Through Rapid Resolution, the grantee and the Veteran explore safe, alternative housing options immediately before or quickly after they become homeless.
Rapid Resolution can identify an immediate safe place to stay within the Veteran's network of family, friends, or other social networks. All Veterans requesting SSVF services should have a Rapid Resolution screening and if not appropriate for Rapid Resolution grantees should then assess the Veteran for other SSVF services. More information about Rapid Resolution can be found at
A.
B.
Under Priority 2, VA will provide funding to existing grantees who have at least one of the following accreditations: 3-year accreditation from CARF in Employment and Community Services: Rapid Rehousing and Homeless Prevention standards, a 4-year accreditation in Housing Stabilization and Community Living Services from the COA or a 3-year accreditation in the JC's Behavioral Health Care: Housing Support Services Standards. Priority 2 applicants must demonstrate that accreditation is active at the date of submission, and accreditation must be maintained throughout the project period and/or funding cycle. Existing grantees previously awarded under this priority with grants scheduled to end by September 30, 2025, must apply using the renewal application. To be eligible for renewal of a supportive services grant, applicants' program must be substantially the same as the program of the grantee's current award. Renewal applications can request funding that is equal to or less than their current annualized amount. If sufficient funding is available, VA may provide an increase of the previous year's award. Any funding increase, if provided, will be based on previous grant funding utilization and enrollment. VA may award a 3-year project period to those submitting successful applications who remain in good standing and show proof of accreditation as defined above. VA may also elect to decrease the grant award to an amount that is less than the previous fiscal year award. This will be done based on available funds as well as previous grant utilization and enrollment.
Grantees previously awarded a 3-year project period that is not scheduled to end by September 30, 2025, cannot submit a renewal application under this NOFO but instead are required to submit a Letter of Intent (LOI) application package by the NOFO deadline indicating their intention of continuing SSVF services in FY 2026. All grantees submitting a LOI must include a letter of support from the CoC (see section II.C.6.) and a proposed budget for FY 2026. Priority 2 grantees submitting a LOI must also submit proof of continued accreditation. Based on the results of audit findings or performance concerns, VA may change grantees' previously awarded funds from Priority 2 to Priority 3 at renewal. The reprioritized grantees would then be required to submit a renewal application for the FY 2027 grant year.
Under Priority 3, existing SSVF grantees not included in Priority 2 but who have annual awards and are seeking to renew their grants, may apply. Existing grantees are SSVF grantees that have a MOA for operations through September 30, 2025. Priority 3 includes all other existing grantees seeking to renew their annual grant awards. Priority 3 applicants must apply using the renewal application. To be eligible for renewal of a supportive services grant, Priority 3 applicants' program must be substantially the same as the program of the grantees' current grant award. Renewal applications can request funding that is equal to or less than their current annualized award. If sufficient funding is available, VA may provide an increase of the previous year's award. Any funding increase, if provided, will be based on previous grant funding utilization and
C.
1. New and existing organizations can apply under Priority 1. For existing grantees, a new application is required if they are pursuing Priority 1.
2. Only existing grantees can apply under Priority 2 and Priority 3.
3. If a Priority 2 or 3 applicant is not renewed, all existing SSVF grants made to the non-renewed grantee, including awards made to support 62.34(a), will be discontinued on September 30, 2025.
4. If a grantee failed to use any previously awarded funds or had unspent funds returned to VA, VA may elect to limit the renewal award to the amount of funds used in the previous fiscal year or in the current fiscal year less the money swept.
5. If, during the course of the grant year, VA determines that grantee spending is not meeting the following minimum percentage milestones, VA may elect to recoup projected unused funds and reprogram such funds to provide supportive services in areas with higher need. Should VA elect to recoup unspent funds, reductions in available grant funds would take place the first business day following the end of the quarter. VA may elect to recoup funds under the following circumstances:
a. By the end of the first quarter (December 31, 2025) of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds are less than an amount equal to 15% of the total supportive services grant award. (During this same period, the grantee's cumulative requests for supportive services grant funds may not exceed 35% of the total supportive services grant award.)
b. By the end of the second quarter (March 31, 2026) of the grantee's supportive services annualized grant award period, the grantee's cumulative request for supportive services grant funds is less than an amount equal to 40% of the total supportive services grant award. (During this same period, the grantee's cumulative requests for supportive services grant funds may not exceed 60% of the total supportive services grant award.)
c. By the end of the third quarter (June 30, 2026) of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds are less than an amount equal to 65% of the total supportive services grant award. (During this same period, the grantee's cumulative requests for supportive services grant funds may not exceed 80% of the total supportive services grant award.)
6. Priority 2 and Priority 3 applicants who fail to provide a letter of support from at least one of the CoCs that they plan to serve will be eligible for renewal funding at a level no greater than 90% of their previous award. Applicants are responsible for determining who in each serviced CoC is authorized to provide such letters of support. Existing Priority 2 grantees operating under a 3-year project period that are only required to submit a LOI application package in response to this NOFO must also submit a letter of support from at least one of the CoC's that they plan to serve. The letter of support should include the following information described herein at 6a and 6b of this section. Applicants may seek an exception to this requirement if they submit a letter from the CoC stating that by policy they cannot provide a letter of support. To meet this requirement and allow the applicant to be eligible for full funding, letters must include the following:
a. A detailed description of the applicant's participation in the CoC's Coordinated Entry process or planning activities and overall community planning efforts (for example, confirmation of the applicant's active participation in coordinated entry; commitment to participate in coordinated entry; hours spent on a CoC-sponsored committee or work group; and the names of said committees or work groups).
b. The applicant's contribution to the CoC's coordinated entry process capacity building efforts, detailing the specific nature of this contribution (for example, the hours of staff time and/or the amount of funding provided), if such SSVF capacity has been requested by the CoC or otherwise has shown to be of value to the CoC.
7. Should additional funding become available over the course of the grant term from funds recouped under the Award Information section of this Notice, from funds that are voluntarily returned by grantees, from funds that become available due to a grant termination, or from other funds still available for grant awards, VA may elect to offer these funds to grantees in areas where demand has exceeded available SSVF resources. Additional funds will be provided to the highest scoring grantee in the selected area who is in compliance with their grant agreement and has the capacity to use the additional funds.
D.
1. Funding used for staff education and training cannot exceed 5% of the overall program grant award. This limitation does not include the cost to attend VA-mandated training. All training costs must be directly related to the provision of services to homeless Veterans and their families.
2. Expenses related to maintaining accreditation are allowable. Grantees are allowed to include expenses for seeking initial accreditation only once in a 5-year period. The expenses to renew full accreditation are allowed and are based on the schedule of the accrediting agency: for example, every 3 years for CARF and every 4 years for COA. Expenses related to the renewal of less than full accreditation are not allowed.
1. Existing applicants applying for Priority 2 or Priority 3 grants may apply only as renewal applicants using the application designed for renewal grants.
2. At the discretion of VA, multiple grant proposals submitted by the same Lead agency may be combined into a single grant award if the proposals provide services to contiguous areas.
3. Additional supportive services grant application requirements are specified in the application package. Submission of an incorrect or incomplete application package will result in the application being rejected during threshold review. The application packages must contain all required forms and certifications. Selections will be made based on criteria described in 38 CFR part 62 and this NOFO. Applicants and grantees will be notified of any additional information needed to confirm or clarify information provided in the application and the deadline by which to submit such information. Applicants must submit applications electronically. Applications may not be mailed, hand carried, or faxed.
This NOFO is not subject to Executive Order 12372, Intergovernmental Review of Federal Programs. To learn more about your State's process, see the State Single Point of Contact List.
1. VA will screen all applications to identify those that meet the threshold requirements described in 38 CFR 62.21.
2. VA will use the criteria described in 38 CFR 62.24 to score grantees applying for renewal of a supportive services grant.
3. VA will use the criteria described in 38 CFR 62.22 and 62.23 to score new applications for supportive services grants.
1. LOI applications that meet threshold requirements described in 38 CFR 62.21 will be offered funding.
2. Score all renewal applications that meet the threshold requirements described in 38 CFR 62.21.
3. Rank those renewal applications that score at least 75 cumulative points and receive at least 1 point under each of the categories identified for renewal applicants in 38 CFR 62.24. The applications will be ranked in order from highest to lowest scores in accordance with 38 CFR 62.25 for renewal applicants.
4. VA will use the ranked scores of renewal applications as the primary basis for selection. However, VA also will use the following considerations in 38 CFR 62.23(d) to select applicants for funding:
(a) Give preference to applications that provide or coordinate the provision of supportive services for very low-income Veteran families transitioning from homelessness to permanent housing. Consistent with this preference, applicants are required to enroll no less than 60% of participants who are homeless as defined in 38 CFR 62.11(b) and (c). Rural communities are defined using USDA's definition of a rural area. Rural means: 1. Open countryside; 2. Rural towns (places with fewer than 5,000 people and 2,000 housing units); and 3. urban areas with populations ranging up to 50,000 people that are not part of larger labor market areas (metropolitan areas) (
Other areas may seek waivers to this 60% requirement when grantees can demonstrate significant local progress toward eliminating homelessness in the target service area. Waiver requests must include data from authoritative sources such as point-in-time counts and by-name-lists indicating that a community has made enough progress on reducing homelessness that it can shift additional resources to prevention. Waiver requests must include an endorsement by the impacted CoC explicitly stating that a shift in resources from rapid rehousing to prevention will not result in an increase in homelessness. Grantees who are exempt or receive waivers to this 60% requirement must still enroll no less than 40% of all participants who are homeless as defined in 38 CFR 62.11 (b) and (c).
(b) To the extent practicable, ensure that supportive services grants are equitably distributed across geographic regions, including rural communities, U.S. territories, and Tribal lands. This equitable distribution criteria will be used to ensure that SSVF resources are provided to those communities with the highest need as identified by VA's assessment of expected demand and available resources to meet that demand.
5. Subject to the considerations noted previously herein at paragraph B.4. VA will fund the highest-ranked applicants for which funding is available.
Prior to making a Federal grant award, the SSVF Program Office will review eligibility information for applicants and financial integrity information for applicants available in the Office of Management and Budget-designated databases per the Payment Integrity Information Act of 2019 (Pub. L. 116-117), the “Do Not Pay Initiative” (31 U.S.C. 3354), and 41 U.S.C. 2313.
The SSVF program Office will review the responsibility and qualification records available in the non-public segment of
1. Upon execution of a supportive services grant agreement with VA, grantees will have a VA Regional Coordinator assigned by the SSVF Program Office who will provide oversight and monitor supportive services provided to participants.
2. Grantees will be required to enter data into a Homeless Management Information System (HMIS) web-based software application. This data will consist of information on the participants served and types of supportive services provided by grantees. Grantees must treat the data for activities funded by the SSVF Program separate from that of activities funded by other programs.
Grantees will be required to work with their HMIS Administrators to export client-level data for activities funded by the SSVF Program to VA on at least a monthly basis. The completeness, timeliness and quality of grantee uploads into HMIS will be factored into the evaluation of their grant performance.
3. VA will complete annual monitoring evaluations of each grantee. Monitoring will also include the submittal of quarterly and annual financial and performance reports by the grantee. The grantee will be expected to demonstrate adherence to the grantee's proposed program as described in the grantee's application. All grantees are subject to audits conducted by VA or its representative. Pursuant to § 62.80, when a grantee fails to comply with the terms, conditions, or standards of the supportive services grant, VA may, on 7-days notice to the grantee, withhold further payment, suspend the supportive services grant, or prohibit the grantee from incurring additional obligations of supportive services grant funds, pending corrective action by the grantee or a decision to terminate. Additionally, grantees who are identified as not meeting performance standards pursuant to § 62.80 are subject to withholding, suspension, de-obligation, termination, and recovery of funds by VA.
4. Grantees will be assessed based on their ability to meet critical performance measures. In addition to meeting program requirements defined by the regulations and applicable NOFO(s), grantees will be assessed on their ability to place participants into housing and the housing retention rates of participants served. Higher placement for homeless participants and higher housing retention rates for participants at risk of homelessness are expected for low-income Veteran families when compared to extremely low-income Veteran families with incomes below 30% of the area median income.
5. Grantees' performance will be assessed based on their consumer satisfaction scores. These scores include the participation rates and satisfaction results of the standardized survey offered to all participant households.
6. Organizations receiving priority 1 or renewal awards that have had ongoing SSVF program operation for at least 1 year (as measured from the start of initial SSVF services until March 3, 2025 may be eligible for a 3-year project period.
Grantees meeting outcome goals defined by VA and in substantial compliance with their grant agreements (defined by meeting targets and having no outstanding corrective action plans) and who, in addition, are providing supportive services to Veterans in Tribal or rural communities or the U.S. territories or who have a 3-year accreditation from either CARF in Employment and Community Services: Rapid Rehousing and Homeless Prevention standards, a 4-year accreditation from COA in Supported Community Living Services, or a 3-year accreditation in The Joint Commission's Behavioral Health Care: Housing Support Services Standards are eligible for a 3-year project period. (NOTE: Multi-year project periods are contingent on funding availability.) If awarded a multiple year renewal, grantees may be eligible for funding increases as defined in NOFOs that correspond to years two and three of their renewal funding. At its discretion, VA may reduce 3-year project periods to a 1-year project period based on previous fiscal year performance concerns or most recent audit results.
The terms and conditions for this award will be outlined in the MOA. Applicants may review the general terms and conditions of award at
1. Veteran families earning less than 30% of area median income as most recently published by HUD for programs under section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f) (
2. Veterans with at least one dependent family member.
3. Veterans returning from Operation Enduring Freedom, Operation Iraqi Freedom or Operation New Dawn).
4. Veteran families located in a community, as defined by HUD's CoC, or a county not currently served by a SSVF grantee.
5. Veteran families located in a community, as defined by HUD's CoC, where the current level of SSVF services is not sufficient to meet demand of
6. Veteran families located in a rural area.
7. Veteran families located on Tribal areas.
8. Veteran families located in a U.S. territory.
1. During the first quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 35% of the total supportive services grant award without written approval by VA.
2. By the end of the second quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 60% of the total supportive services grant award without written approval by VA.
3. By the end of the third quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 80% of the total supportive services grant award without written approval by VA.
4. By the end of the fourth quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 100% of the total supportive services grant award.
Denis McDonough, Secretary of Veterans Affairs, approved and signed this document on December 16, 2024, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Final rule.
The Energy Policy and Conservation Act, as amended (“EPCA”), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including gas-fired instantaneous water heaters, which are a type of consumer water heater. EPCA also requires the U.S. Department of Energy (“DOE” or the “Department”) to periodically review its existing standards to determine whether more-stringent standards would be technologically feasible and economically justified, and would result in significant energy savings. In this final rule, DOE is adopting amended energy conservation standards for gas-fired instantaneous water heaters. It has determined that the amended energy conservation standards for these products would result in significant conservation of energy, and are technologically feasible and economically justified.
The effective date of this rule is March 11, 2025. Compliance with the amended standards established for gas-fired instantaneous water heaters in this final rule is required on and after December 26, 2029.
The docket for this rulemaking, which includes
The docket web page can be found at
For further information on how to review the docket, contact the Appliance and Equipment Standards Program staff at (202) 287-1445 or by email:
Ms. Julia Hegarty, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC, 20585-0121. Telephone: (202) 586-0729. Email:
Mr. Uchechukwu “Emeka” Eze, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC, 20585-0121. Telephone: (240) 961-8879. Email:
The Energy Policy and Conservation Act, Public Law 94-163, as amended (“EPCA”),
Pursuant to EPCA, DOE is required to review its existing energy conservation standards for covered consumer products no later than six years after issuance of any final rule establishing or amending a standard. (42 U.S.C. 6295(m)(1)) Pursuant to that statutory provision, DOE must publish either a notification of determination that standards for the product do not need to be amended, or a notice of proposed rulemaking (“NOPR”) including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (
In accordance with these and other statutory provisions discussed in this document, DOE analyzed the benefits and burdens of four trial standard levels (“TSLs”) for gas-fired instantaneous water heaters with less than 2 gallons of effective storage volume and rated inputs greater than 50,000 Btu/h. The TSLs and their associated benefits and burdens are discussed in detail in sections V.A through V.C of this document. As discussed in section V.C of this document, DOE has determined that TSL 2 represents the maximum improvement in energy efficiency that is technologically feasible and economically justified. The adopted standards, which are expressed in UEF are shown in table I.1. These standards apply to products with effective storage volumes less than 2 gallons and input ratings greater than 50,000 Btu/h (as listed in table I.1) and manufactured in, or imported into, the United States starting on December 26, 2029.
For all other gas-fired instantaneous water heaters, DOE is adopting new standards that do not constitute an increase to stringency, but simply a change in rating metric to the UEF descriptor. These standards apply to all remaining products listed in table I.1 and manufactured in, or imported into, the United States starting on December 26, 2029.
The following sections of this synopsis summarize the findings of the analysis carried out for gas-fired instantaneous water heaters with less than 2 gallons of effective storage volume and rated inputs greater than 50,000 Btu/h.
The average life-cycle cost (“LCC”) savings are $112, and the simple payback period (“PBP”),
DOE's analysis of the impacts of the adopted standards on consumers is described in section IV.F of this document.
The industry net present value (“INPV”) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2024-2059). Using a real discount rate of 9.6 percent, DOE estimates that the INPV for manufacturers of gas-fired instantaneous water heaters in the case without amended standards is $1,193.9 million in 2023$. Under the adopted standards, DOE estimates the change in INPV to range from −2.8 percent to 3.4 percent, which is approximately −$33.7 million to $40.5 million. In order to bring products into compliance with amended standards, it is estimated that industry will incur total conversion costs of $20.4 million.
DOE's analysis of the impacts of the adopted standards on manufacturers is described in section IV.J of this document. The analytic results of the manufacturer impact analysis (“MIA”) are presented in section V.B.2 of this document.
DOE's analyses indicate that the adopted energy conservation standards for gas-fired instantaneous water heaters would save a significant amount of energy. Relative to the case without amended standards, the lifetime energy savings for gas-fired instantaneous water heaters purchased during the 30-year period that begins in the anticipated year of compliance with the amended standards (2030-2059), amount to 0.58 quadrillion British thermal units (“Btu”), or quads.
The cumulative net present value (“NPV”) of total consumer benefits of the standards for gas-fired instantaneous water heaters ranges from $0.87 billion (at a 7-percent discount rate) to $3.06 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product and installation costs for gas-fired instantaneous water heaters purchased during the period 2030-2059.
In addition, the adopted standards for gas-fired instantaneous water heaters are projected to yield significant environmental benefits. DOE estimates that the standards will result in cumulative emission reductions (over the same period as for energy savings) of 32 million metric tons (“Mt”)
DOE estimates the value of climate benefits from a reduction in greenhouse gases (“GHG”) using different estimates of the social cost of CO
DOE estimated the monetary health benefits of SO
Table I.2 summarizes the monetized benefits and costs expected to result from the amended standards for gas-
The benefits and costs of the adopted standards can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are: (1) the reduced consumer operating costs, minus (2) the increase in product purchase prices and installation costs, plus (3) the value of climate and health benefits of emission reductions, all annualized.
The national operating cost savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered products and are measured for the lifetime of gas-fired instantaneous water heaters shipped during the period 2030-2059. The benefits associated with reduced emissions achieved as a result of the adopted standards are also calculated based on the lifetime of gas-fired instantaneous water heaters shipped during the period 2030-2059. Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with a 2 percent near-term Ramsey discount rate for the 2023 SC-GHG estimates and the average SC-GHG with 3-percent discount rate for the 2021 interim SC-GHG estimates.
Table I.3 presents the total estimated monetized benefits and costs associated with the adopted standard, expressed in terms of annualized values. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and health benefits from reduced NO
Using a 3-percent discount rate for consumer benefits and costs and health benefits from reduced NO
DOE's analysis of the national impacts of the adopted standards is described in sections IV.H, IV.K, and IV.L of this document.
DOE concludes that the standards adopted in this final rule represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. Specifically, with regards to technological feasibility products achieving these standard levels are already commercially available. As for economic justification, DOE's analysis shows that the benefits of the standards exceed, to a great extent, the burdens of the standards.
Using a 7-percent discount rate for consumer benefits and costs and NO
The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.
As previously mentioned, the standards are projected to result in estimated national energy savings (“NES”) of 0.58 quads full-fuel-cycle (“FFC”), the equivalent of the primary annual energy use of 4 million homes. Based on these findings, DOE has determined the energy savings from the standard levels adopted in this final rule are “significant” within the meaning of 42 U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for these conclusions is contained in the remainder of this document and the accompanying TSD.
The following section briefly discusses the statutory authority underlying this final rule, as well as some of the relevant historical background related to the establishment of standards for gas-fired instantaneous water heaters, which, as discussed in section III.B of this document, are a subset of consumer water heaters. Gas-fired instantaneous water heaters are defined at 10 CFR 430.2 as a water heater that uses gas as the main energy source, has a nameplate input rating less than 200,000 Btu/h, and contains no more than one gallon of water per 4,000 Btu per hour of input.
EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291-6317, as codified) Title III, Part B of EPCA
The energy conservation program under EPCA, consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy conservation standards (42 U.S.C. 6295), and the authority to require information and reports from manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal preemption in limited circumstances for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (42 U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their product complies with the applicable energy conservation standards and as the basis for any representations regarding the energy use or energy efficiency of the product. (42 U.S.C. 6295(s) and 42 U.S.C. 6293(c)). Similarly, DOE must use these test procedures to evaluate whether a basic model complies with the applicable energy conservation standard(s). (42 U.S.C. 6295(s)) The DOE test procedures for gas-fired instantaneous water heaters appear at title 10 of the Code of Federal Regulations (“CFR”) part 430, subpart B, appendix E (“appendix E”).
EPCA prescribed energy conservation standards for gas-fired instantaneous water heaters (42 U.S.C. 6295(e)(1)) and directed DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6295(e)(4)) Not later than six years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of determination (“NOPD”) that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1)) DOE must make the analysis on which a NOPD or NOPR is based publicly available and provide an opportunity for written comment. (42 U.S.C. 6295(m)(2)) Not later than two years after a NOPR is issued, DOE must publish a final rule amending the energy conservation standard for the product. (42 U.S.C. 6295(m)(3)(A))
DOE must follow specific statutory criteria for prescribing new or amended standards for covered products, including gas-fired instantaneous water heaters. Any new or amended standard for a covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary of Energy (“Secretary”) determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3)(B))
Moreover, DOE may not prescribe a standard if: (1) for certain products, including gas-fired instantaneous water heaters, no test procedure has been established for the product; or (2) DOE determines by rule that the establishment of such standard will not result in significant conservation of energy (or, for certain products, water), or is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water) savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA, as codified, also contains what is known as an “anti-backsliding”
Additionally, EPCA specifies requirements when promulgating an energy conservation standard for a covered product that has two or more subcategories. A rule prescribing an energy conservation standard for a type (or class) of product must specify a different standard level for a type or class of products that has the same function or intended use if DOE determines that products within such group (A) consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-related feature justifies a different standard for a group of products, DOE considers such factors as the utility to the consumer of such a feature and other factors DOE deems appropriate.
Finally, pursuant to the amendments to EPCA contained in the Energy Independence and Security Act of 2007, Public Law 110-140, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B))
DOE is publishing this final rule pursuant to the six-year-lookback review requirement in EPCA described herein for gas-fired instantaneous water heaters with less than 2 gallons of effective storage volume and rated inputs greater than 50,000 Btu/h. (42 U.S.C. 6295(m)) DOE is also publishing this final rule pursuant to its authority to establish uniform efficiency descriptors for covered water heaters (42 U.S.C. 6295(e)(5))
As directed by EPCA (42 U.S.C. 6295(e)(4)), DOE conducted two cycles of rulemakings to determine whether to amend the statutory standards for consumer water heaters found in 42 U.S.C. 6295(e)(1). The most recent rulemaking from April 2010 resulted in amended standards using the EF metric originally prescribed by EPCA with a requirement for compliance starting on April 16, 2015. 75 FR 20112 (Apr. 16, 2010) (the “April 2010 Final Rule”). Later amendments to EPCA directed DOE to establish a uniform efficiency metric for consumer water heaters (
The resulting standards for gas-fired instantaneous water heaters set forth in DOE's regulations at 10 CFR 430.32(d)(1) are shown in table II.1.
In the December 2016 Conversion Factor Final Rule, DOE declined to develop conversion factors and UEF-based standards for consumer water heaters of certain sizes (by rated storage volume or input rating) and of certain types (
On May 21, 2020, DOE initiated the most recent rulemaking for consumer water heaters, including gas-fired instantaneous water heaters, by publishing in the
On October 21, 2022, DOE received a set of recommendations on amended energy conservation standards for consumer water heaters from a coalition of seven public- and private-sector organizations, including two water heater manufacturers, three energy efficiency organizations, one environmental group, and one consumer organization—collectively the Joint Stakeholders—which, in part, addressed standards for gas-fired instantaneous water heaters. This coalition's submission has been referred to as the “Joint Stakeholder Recommendation.” (
On July 28, 2023, DOE published in the
Subsequent to the July 2023 NOPR, DOE determined it would continue to consider comments prior to finalizing standards for gas-fired instantaneous water heaters, although standards for all other consumer water heaters were finalized in a rule published on May 6, 2024 (“May 2024 Final Rule”). 89 FR 37778. Most recently, DOE published a notice of data availability in the
In response to the July 2024 NODA, a larger coalition of stakeholders co-signed a joint comment recommending standards for gas-fired instantaneous water heaters. This coalition—consisting of AHRI (a trade association representing the views of multiple manufacturers), three energy efficiency organizations, one environmental group, and one consumer organization—submitted the previous Joint Stakeholder Recommendation for renewed consideration by DOE. Hence the submission by this larger, more recent coalition is still referred to as the Joint Stakeholder Recommendation throughout this final rule.
A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record.
DOE developed this final rule after a review of the market for the subject gas-fired instantaneous water heaters. DOE also considered comments, data, and information from interested parties that represent a variety of interests. This final rule addresses issues raised by these commenters.
This section summarizes general comments received from interested parties regarding rulemaking timing and process.
In response to the July 2024 NODA, the Joint Requesters recommended that DOE provide stakeholders with an additional 30 days (
DOE notes the limited scope of the NODA and reiterates that the July 2024 NODA updated only specific aspects of DOE's analysis of potential amended energy conservation standards for gas-fired instantaneous water heaters. The analysis from the July 2023 NOPR was updated to reflect the latest available versions of the data sources used. Overall, the cost-benefit analysis
AGA
In response, DOE notes that it published the July 2024 NODA to inform stakeholders of newly available data and results with respect to potential amended standards for gas-fired instantaneous water heaters, a limited update to the July 2023 NOPR analysis.
In response to the July 2023 NOPR, DOE received 2,880
AWHI expressed support for more stringent standards for gas-fired instantaneous water heaters. (AWHI, No. 1036 at pp. 3-4) The Joint Stakeholders stated that the proposed standards for gas-fired instantaneous water heaters are consistent with their recommendations. (Joint Stakeholders, No. 1156 at p. 2) NEEA, the Joint Regional Advocacy Groups (citing the estimated FFC and monetary savings), and Bosch supported the proposed standards for gas-fired instantaneous water heaters. (NEEA, No. 1199 at p. 9; Joint Regional Advocacy Groups, No. 1154 at p. 1; Bosch, No. 1204 at p. 2) Bosch commented that condensing gas-fired instantaneous water heaters are readily available and widely accepted in the market, and can create significant energy savings and emissions reductions. Bosch stated that nearly every gas-fired instantaneous water heater manufacturer sells a condensing-level product and, therefore, the required technology is well-understood and minimal research and development efforts would be required to achieve the proposed efficiency levels. (Bosch, No. 1204 at p. 2)
CEC and A.O. Smith also supported DOE's proposed standards for gas-fired instantaneous water heaters because they would result in significant savings, lower monthly energy bills for homeowners, and also provide emissions benefits. CEC urged DOE to finalize the proposed standards as soon as possible. (CEC, No. 1173 at p. 12; A.O. Smith, No. 1182 at p. 14)
Two individual commenters expressed support for the proposed rulemaking on the basis that clean energy is necessary for securing a peaceful and prosperous future and for the economic benefits that will result from the proposed rulemaking. (DuBard-Weis, No. 1430 at p. 1; Anderson, No. 1431 at p. 1) An anonymous commenter also expressed support for the proposed rulemaking on the basis of reducing emissions related to water heaters for the benefit of the planet. (Anonymous, No. 1432 at p. 2)
In response to the July 2024 NODA, DOE received the following comments in support of the updated analytical results and potential amended standards at efficiency level (“EL”) 2.
NEEA, AHRI, AHRI and the Joint Stakeholders, the Joint Advocates, Rheem, and BWC expressed support for the standards proposed at EL 2 for gas-fired instantaneous water heaters in the July 2023 NOPR, with NEEA, AHRI, AHRI and the Joint Stakeholders, the Joint Advocates, and BWC noting the significant national energy savings and LCC savings for consumers. NEEA, The Joint Advocates, and BWC stated that the proposed standard aligns with the Joint Stakeholder Recommendations made in 2022. AHRI and the Joint Stakeholders expressed concern that DOE had not yet adopted these standards and commented that the proposed levels would, enable a broad set of consumer options while meeting EPCA's directives of achieving significant national energy savings as well as cost effectiveness and technological feasibility for consumers who install these products. The Joint Advocates supported DOE's proposal to adopt EL 2 for gas-fired instantaneous water heaters because EL 2 represents an intermediate condensing level and reflects the Joint Stakeholder recommendations. The Joint Advocates further commented that DOE's updated analysis in the NODA reinforces the economic and energy benefits of adopting EL 2 for gas-fired instantaneous water heaters and, while similar to those in the July 2023 NOPR, the updates in the July 2024 NODA improve the analysis. (NEEA, No. 1434 at p. 1; Rheem, No. 1436 at p. 1; AHRI, No. 1437 at p. 2; AHRI and the Joint Stakeholders, No. 1438 at p. 1; BWC, No. 1441 at p. 1; Joint Advocates, No. 1444, at pp. 1-2)
NEEA commented that the July 2024 NODA effectively updates the analysis for gas-fired instantaneous water heaters to thoroughly represent the market and better account for manufacturer impacts of updating standards for gas-fired instantaneous water heaters by updating from Energy Information Administration's Residential Energy Consumption Survey (“RECS”) 2015 to RECS 2020 data, accounting for the use of concentric pipe venting for both condensing and non-condensing gas-fired instantaneous water heaters, and updating the analysis to include outdoor installations of gas-fired instantaneous water heaters that don't require venting or that require short through-the-wall vents. NEEA commented that according to DOE's analysis, impacts on manufacturers from a condensing-level standard would be modest and potentially beneficial to domestic production. NEEA recommended that DOE quickly issue a final rule for gas-fired instantaneous water heaters, as NEEA agreed with DOE that condensing-level standards at EL 2 would be cost effective and deliver significant energy savings while having minimal negative impacts. (NEEA, No. 1434 at pp. 1-3)
Rheem recommended that DOE amend standards for gas-fired instantaneous water heaters to EL 2, stating that DOE's analysis remains justified. (Rheem, No. 1436 at p. 1) BWC urged DOE to establish minimum energy
In response to the July 2023 NOPR, DOE received comments from several stakeholders raising concern over the impact of the proposed standards.
An individual commenter requested careful consideration of the impacts of the proposed levels for gas-fired instantaneous water heaters on the economy. The individual commenter noted that they work at a propane company whose installation and servicing of tankless
Commenters from the U.S. House of Representatives indicated that the popularity of non-condensing gas-fired instantaneous water heaters among homeowners and small business owners across the United States reflects the efficiency and affordability of the products. Additionally, the Commenters from the U.S. House of Representatives stated that restricting consumer access to gas-fired instantaneous water heaters by adopting higher standards would reduce consumer choice and increase product prices. (U.S. House of Representatives, No. 1205 at p. 1) Then, in response to the July 2024 NODA, the Commenters from the U.S. House of Representatives stated that gas-fired instantaneous water heaters are projected to reach 11 percent of the U.S. market by 2028 and that sales of non-condensing tankless water heaters from 2005 to 2022 have saved 339 million MMBtus (0.34 quads) and 37.7 billion pounds (17 million metric tons) of carbon emissions. Commenters from the U.S. House of Representatives also stated that the July 2023 NOPR would eliminate the non-condensing gas-fired instantaneous water heaters while leaving costlier or higher emission profile products on the market. (U.S. House of Representatives, No. 1445 at p. 1)
Regarding stakeholders' comments that the standards proposed in the July 2023 NOPR would discourage adoption of gas-fired instantaneous water heaters, DOE notes that it expects the share of gas-fired instantaneous water heaters to continue to increase as a percentage of the overall U.S. market in both the no-new-standards case and standards cases.
In addition to emphasizing several of the points it made in response to the July 2023 NOPR, Rinnai claimed that, although the July 2024 NODA appears to make some adjustments for data provided by Rinnai as well as other inputs, methods and approaches, it does not sufficiently account for historic market data and trends, consumer decision making, product and installation costs, and concerns with modeling and methodology, nor does it suffice to meet statutory requirements relating to economic justification, significant energy savings, or product unavailability. Rinnai stated that the analysis in the July 2024 NODA does not change its conclusion that the proposed rule would limit the affordable, efficient options available to consumers, would impede a market-driven shift toward more efficient storage-type water heaters,
Rinnai raised concern with the condensing-level standards supported by the Joint Stakeholders, asserting that such standards would not adequately consider the gas-fired instantaneous water heater market and industry as a whole. Specifically, Rinnai expressed that it does not believe that non-condensing gas-fired instantaneous water heaters are “on the way out” of the market. According to Rinnai, the July 2024 NODA showed a projected 30 percent of gas-fired instantaneous water heater sales in 2030 would be non-condensing models, consistent with current trends. Rinnai stated that it would suffer the direct impacts of this rule, being not only one of the leading manufacturers of gas-fired instantaneous water heaters in general but also the market leader in sales of non-condensing models, producing approximately 60 percent of the market share of non-condensing models. (Rinnai, No. 1443 at pp. 23-24) Rinnai argued that DOE's consumer water heater rulemaking, and in particular its actions with regard to gas-fired instantaneous water heaters, depend heavily on DOE's interpretation of several statutory provisions in EPCA. According to Rinnai, DOE's interpretations of statutory provisions are not entitled to deference—for example, DOE's interpretation of the unavailability provision, section 6295(o)(4), the “significant conservation of energy” provision, section 6295(o)(3), the economic justification provision, section 6295(o)(2)(B), and the separate standards provision, section 6295(q). Rinnai expressed its concern that DOE's consumer water heater rulemaking, in conjunction with its rulemaking proceedings on furnaces and boilers, represent a significant overhaul of the appliance manufacturing industry. Rinnai commented that, in line with the outcome of
DOE's rulemaking to amend energy conservation standards for gas-fired instantaneous water heaters does not disallow the production, import, or sale of water heaters using any specific fuel type. Moreover, gas-fired instantaneous water heaters will not be made unavailable as a result of this rulemaking. Stakeholders have not indicated that raising standards for gas-fired instantaneous water heaters would push consumers towards electric or oil-fired water heaters—and such a case would be highly improbable based on DOE's own analysis of consumer purchasing decisions. Instead, stakeholders such as Rinnai and the Gas Association Commenters appear to indicate that more-stringent standards for gas-fired instantaneous water heaters may impact shipments of other gas-fired water heaters, and these comments are discussed further in section IV.F.10 of this document. As such, there is no evidence to support Rinnai's suggestion that DOE's action “favors” one fuel type over another. Furthermore, since the statutory consumer water heater standards were established by EPCA at 42 U.S.C. 6295(e)(1), DOE has maintained separate product classes (
DOE has statutory authority to routinely evaluate and address minimum efficiency levels for gas-fired instantaneous water heaters (and all other consumer water heaters).
DOE has evaluated the statutory criteria—technological feasibility, significant energy savings, and economic justification—and considered the application of the statutory “unavailability provision” (
EL 3 corresponds to the efficiency that would meet the current ENERGY STAR Specification version 5.0, and as such is an efficiency level that many manufacturers currently target. In the July 2023 NOPR, DOE tentatively determined that the additional benefits and savings from amended standards at EL 3 could be considered significant, but there was uncertainty as to whether manufacturing capacity of EL 3 models could be scaled up to meet national demand for gas-fired instantaneous water heaters. 88 FR 49058, 49161. While the July 2023 NOPR proposed standards at EL 2, DOE requested additional information on the benefits and burdens of a potential amended standard for gas-fired instantaneous water heaters at EL 3, especially with respect to manufacturers being able to scale their entire production to EL 3 in the compliance time frame being considered by this rulemaking.
In response, Bosch stated that EL 3 would be significantly more difficult to reach compared to EL 2, adding that though EL 3 is feasible with current technology, the technology comes with increased complexity. Specifically, Bosch stated that the most significant challenge in raising the efficiency of a gas-fired instantaneous water heater from a UEF of 0.93 to 0.95 for the high draw pattern is the need for significant burner modulation. Bosch recommended DOE retain the EL 2 proposal for gas-fired instantaneous water heaters. (Bosch, No. 1204 at pp. 4-5) Noritz stated that EL 3 is significantly more difficult to reach than EL 2, due to complexity related to the software, controls, fan, and gas valve, as well as higher material costs due to increased heat exchanger surface area. (Noritz, No. 1202 at p. 3) BWC recommended against adopting standards for gas-fired instantaneous water heaters at EL 3 because this would be inconsistent with the Joint Stakeholder Recommendation, and the proposed standards at EL 2 already amount to substantial increase in efficiency. (BWC, No. 1164 at p. 16) Rheem stated that it does not support EL 3 for gas-fired instantaneous water heaters as the costs to the manufacturer outweigh the benefit of the slight increase in UEF. Rheem further stated that EL 3 requires completely different condensing technology than EL 2 and will have significantly more impact on existing manufacturing facilities. (Rheem, No. 1177 at p. 13)
AHRI stated that gas-fired instantaneous water heaters would experience more difficulty achieving EL 3 compared to EL 2 due to increasing complexity, driven by designs incorporating full burner modulation. AHRI further stated that this would require substantial research and development and more expensive components. (AHRI, No. 1167 at pp. 12-13)
CEC stated that if DOE received data in response to the request for information in the July 2023 NOPR, DOE should consider finalizing a standard consistent with EL 3 for gas-fired instantaneous water heaters. (CEC, No. 1173 at p. 12)
In response to the July 2023 NOPR, the CA IOUs encouraged DOE to set more stringent standards for gas-fired instantaneous water heaters, recommending that DOE establish the standards proposed at TSL 6 in the July 2023 NOPR, equivalent to max-tech (
In this final rule analysis, DOE finds that although EL 3 would present many consumer benefits, the average estimated simple payback period for EL 3 is 8.3 years, whereas for EL 2 it is 8.9 years, which is not strikingly different in the context of the product's lifespan, which is estimated to be about 20 years. DOE acknowledges that setting standards at EL 3 for gas-fired instantaneous water heaters would require notably higher levels of investment compared to EL 2 for gas-fired instantaneous water heaters. In this final rule, DOE is adopting TSL 2, which corresponds to EL 2 for gas-fired instantaneous water heaters. DOE notes that industry would need to significantly scale up production of models that meet EL 3 given the lower quantity of shipments of these models today. Approximately 60 percent of gas-fired instantaneous water heater shipments currently meet the adopted level (
Gas-fired instantaneous water heaters are a subset of consumer water heaters. Generally, DOE defines a “water heater,” consistent with EPCA's definition at 42 U.S.C. 6291(27) and codified at 10 CFR 430.2, as a product which utilizes oil, gas, or electricity to heat potable water for use outside the heater upon demand. An instantaneous-type water heater is one that heats water but contains no more than one gallon of water per 4,000 Btu per hour of input, and consumer gas-fired instantaneous water heaters are additionally defined as having an input rating less than 200,000 Btu per hour. 10 CFR 430.2; (42 U.S.C. 6291(27)).
This rulemaking does not cover gas-fired circulating water heaters, which must be used in combination with recirculation pump and a storage tank or recirculation loop, and therefore constitute storage-type water heaters. 10 CFR 430.2.
As stated in section I of this document, EPCA prescribed energy conservation standards for all consumer water heaters (
EPCA sets forth generally applicable criteria and procedures for DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) Manufacturers of covered products must use these test procedures as the basis for certifying to DOE that their product complies with the applicable energy conservation standards and as the basis for any representations regarding the energy use or energy efficiency of the product. (42 U.S.C. 6295(s) and 42 U.S.C. 6293(c)). Similarly, DOE must use these test procedures to evaluate whether a basic model complies with the applicable energy conservation standard(s). 10 CFR 429.110(e). The current test procedure for consumer and residential-duty commercial water heaters is codified at 10 CFR part 430, subpart B, appendix E. Appendix E includes provisions for determining UEF, the metric on which current standards are based. 10 CFR 430.32(d)(1).
DOE most recently amended the test procedure for these products at appendix E in the consumer and residential-duty commercial water heater test procedure final rule published on June 21, 2023 (“June 2023 TP Final Rule”) pursuant to the 7-year review requirement as specified by EPCA. (42 U.S.C. 6293(b)(1)(A) and 42 U.S.C. 6314(a)(1)(A)) In that final rule, DOE established effective storage volume (“V
In response to the July 2023 NOPR, BWC reiterated its comments in response to the March 2022 Preliminary Analysis asserting that there is evidence to suggest that gas-fired instantaneous water heaters may gain an unfair advantage in the current test procedure
In response, DOE notes that the current test procedure for consumer water heaters is designed to represent generally how consumer water heaters are used in-field. As such, if one type of water heater generally receives higher efficiency ratings than another, it would be the result of that water heater type having a more efficient design for actual consumer usage patterns than the other. This difference would therefore not be a bias, but a reflection of actual differences in operating efficiency being captured by the test result. The Davis Energy Group, Inc. study cited by BWC shows the efficiency of the gas-fired instantaneous water heater that was tested was more affected by the time between water draws than that of the gas-fired storage water heater that was tested. That is, the efficiency of the gas-fired instantaneous water heater degraded more when the time between water draws increased than did the gas-fired storage water heater. However, for these findings to have any significance, DOE would also need evidence to show that the water draw sequencing of the current test procedure at appendix E is unrepresentative. The draw sequence was developed as a representative test method in the 2014 test procedure rulemaking that established the UEF test method, and it considered factors such as standby loss periods, test stand capabilities, and water heater recovery rates (
As discussed, any new or amended energy conservation standard must be designed to achieve the maximum improvement in energy efficiency that DOE determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A))
To determine whether potential amended standards would be technologically feasible, DOE first develops a list of all known technologies and design options that could improve the efficiency of the products or equipment that are the subject of the rulemaking. DOE considers technologies incorporated in commercially available products or in working prototypes to be “technologically feasible.” 10 CFR part 430, subpart C, appendix A, sections 6(a)(3)(iii)(A) and 7(b)(1). Section IV.A.2 of this document discusses the technology options identified by DOE for this analysis. For further details on the technology assessment conducted for this final rule,
After DOE has determined which, if any, technologies and design options are technologically feasible, it further evaluates each technology and design option in light of the following additional screening criteria: (1) practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; (3) adverse impacts on health or safety; and (4) unique-pathway proprietary technologies. 10 CFR part 430, subpart C, appendix A, sections 6(a)(3)(iii)(B) through (E) and 7(b)(2) through (5). Those technology options that are “screened out” based on these criteria are not considered further. Those technology and design options that are not screened out are considered as the basis for higher efficiency levels that DOE could consider for potential amended standards. Section IV.B of this document discusses the results of this screening analysis conducted for this final rule. For further details on the screening analysis conducted for this final rule,
EPCA requires that for any proposed rule that prescribes an amended or new energy conservation standard, or prescribes no amendment or no new standard for a type (or class) of covered product, DOE must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for each type (or class) of covered products. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE identifies the maximum efficiency level currently available on the market. DOE also defines a “max-tech” efficiency level, representing the maximum theoretical efficiency that can be achieved through the application of all available technology options retained from the screening analysis.
The max-tech levels that DOE determined for this analysis are described in section IV.C.1.a of this document and in chapter 5 of the final rule TSD.
For each TSL, DOE projected energy savings from application of the TSL to gas-fired instantaneous water heaters purchased during the 30-year period that begins in the first year of compliance with the amended standards (2030-2059).
DOE used its national impact analysis (“NIA”) spreadsheet models to estimate NES from potential amended standards for gas-fired instantaneous water heaters. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports NES in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. For natural gas, the primary energy savings are considered to be equal to the site energy savings. DOE also calculates NES in terms of FFC energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (
To adopt any new or amended standards for a covered product, DOE must determine that such action would result in significant energy savings. (42 U.S.C. 6295(o)(3)(B))
The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking.
As stated, the standard levels adopted in this final rule are projected to result in NES of 0.58 quad, the equivalent of the primary annual energy use of about 4 million homes. Based on the amount of FFC savings, the corresponding reduction in emissions, and the need to confront the global climate crisis, DOE has determined the energy savings from the standard levels adopted in this final rule are “significant” within the meaning of 42 U.S.C. 6295(o)(3)(B).
As noted previously, EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)(VII)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking.
In determining the impacts of potential new or amended standards on manufacturers, DOE conducts a manufacturer impact analysis (“MIA”), as discussed in section IV.J of this document. First, DOE uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include: (1) INPV, which values the industry on the basis of expected future cash flows; (2) cash flows by year; (3) changes in revenue and income; and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the changes in LCC and PBP associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national NPV of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard.
EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analysis.
The LCC is the sum of the purchase price of a product (including its installation) and the operating cost (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. The LCC analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates appropriate for consumers. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more-stringent standard by the change in annual operating cost for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with new or amended standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new or amended standards. DOE's LCC and PBP analysis is
Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As discussed in section IV.H, DOE uses the NIA spreadsheet models to project NES.
In establishing product classes, and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards adopted in this document would not reduce the utility or performance of the gas-fired instantaneous water heaters under consideration in this rulemaking.
EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) To assist the Department of Justice (“DOJ”) in making such a determination, DOE transmitted copies of its proposed rule and the NOPR TSD to the Attorney General for review, with a request that the DOJ provide its determination on this issue. In its assessment letter responding to DOE, DOJ concluded that the proposed energy conservation standards for gas-fired instantaneous water heaters are unlikely to substantially lessen competition. DOE is publishing the Attorney General's assessment at the end of this final rule.
In response to the July 2023 NOPR, Rinnai asserted that eliminating non-condensing gas-fired instantaneous water heaters from the market would create detrimental effects on competition by limiting consumer choice, raising prices on more efficient products, eliminating consumers' option to make like-for-like product replacements, all of which would place Rinnai at a disadvantage as a smaller competitor in a concentrated water heater market. (Rinnai, No. 1186 at p. 7) In response to the July 2024 NODA, Rinnai commented that the consumer water heater market is already a highly concentrated market with three dominant players, and that moving to a standard for gas-fired instantaneous water heaters that requires condensing technology would impede competition. (Rinnai, No. 1443 at p. 22)
DOE recognizes the importance of competition in the marketplace. For this final rule, DOE reviewed its Compliance Certification Database,
DOE also considers the need for national energy and water conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the adopted standards are likely to provide improvements to the security and reliability of the Nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation's needed power generation capacity, as discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits associated with the more efficient use of energy are important to take into account when considering the need for national energy conservation. The adopted standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and GHGs associated with energy production and use. DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the estimated emissions impacts are reported in section V.B.6 of this document. DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document.
In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant information regarding
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effect potential amended energy conservation standards would have on the PBP for consumers. These analyses include, but are not limited to, the 3-year PBP contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV.F of this final rule.
This section addresses the analyses DOE has performed for this rulemaking with regard to gas-fired instantaneous water heaters. Separate subsections address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the standards considered in this document. The first tool is a spreadsheet that calculates the LCC savings and PBP of potential amended or new energy conservation standards. The NIA uses a second spreadsheet set that provides shipments projections and calculates NES and NPV of total consumer costs and savings expected to result from potential energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (“GRIM”), to assess manufacturer impacts of potential standards. These three spreadsheet tools are available on the DOE website for this rulemaking:
DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this rulemaking include: (1) a determination of the scope of the rulemaking and product classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends, and (6) technologies or design options that could improve the energy efficiency of gas-fired instantaneous water heaters. The key findings of DOE's market assessment are summarized in the following sections.
When evaluating and establishing or amending energy conservation standards, DOE establishes separate standards for a group of covered products (
EPCA, as amended by the National Appliance Energy Act (NAECA; Pub. L. 100-12), established initial energy conservation standards for consumer water heaters, expressed in EF, that were based on three product classes differentiated by fuel type: (1) gas-fired, (2) oil-fired, and (3) electric. (42 U.S.C. 6295(e)(1)) These standards applied to consumer water heaters manufactured on or after January 1, 1990. Gas-fired instantaneous water heaters were, at the time, required to comply with the same EF standards as gas-fired storage water heaters because the standards were not differentiated by storage versus instantaneous water heaters.
DOE subsequently amended these EF standards twice, most recently in the April 2010 Final Rule, with which compliance was required starting on April 16, 2015. 75 FR 20112. By the April 2010 Final Rule, DOE had further divided gas-fired consumer water heaters into product classes based on demand type (storage, instantaneous), storage volume, and input rate. While the April 2010 Final Rule had separate standards for gas-fired instantaneous water heaters and gas-fired storage water heaters, DOE did not adopt standards for gas-fired instantaneous water heaters with less than 50,000 Btu/h of input because, at that time, there were no such low-input gas-fired instantaneous water heaters available on the market.
Most recently, the December 2016 Conversion Factor Final Rule, published and effective on December 29, 2016, translated the EF-based standards to UEF-based standards. 81 FR 96204. In doing so, separate product classes were created for each of the four draw patterns (very small, low, medium, and high) in the UEF test procedure. However, due to concerns that the UEF test procedure would not apply to gas-fired instantaneous water heaters 2 gallons or larger at the time, DOE determined that the translated UEF-based standards would apply only to gas-fired instantaneous water heaters with less than 2 gallons of storage volume.
In response to the July 2024 NODA, A.O. Smith noted that the conversion factor rulemaking did not establish a product class for gas-fired instantaneous water heaters ≥2 gallons and ≤200,000 Btu/h. A.O. Smith noted that, while the intent of the December 2016 Conversion Factor Final Rule was to satisfy the requirements of AEMTCA, DOE is not statutorily required under EPCA to establish standards in terms of UEF for the entirety of this product class because some products meet the criteria for exclusion on account of being commercial equipment. (A.O. Smith, No. 1440 at p. 3) A.O. Smith claimed that the hot water delivery capacity, as a function of input capacity and storage volume, of a subset of products in the ≥2 gallon, ≤200,000 Btu/h proposed product class for gas-fired instantaneous water heaters includes equipment that would not be used or installed residentially and would only be suitable for commercial applications. A.O. Smith noted that equipment meeting the capacity ranges of the proposed product class already exist on the market and are exclusively used in commercial applications. (A.O. Smith, No. 1440 at pp. 3-4) A.O. Smith recommended that DOE re-evaluate the gas-instantaneous water heater product class structure and avoid prescribing a UEF test metric and standard for these water heaters where the UEF metric is inappropriate. A.O. Smith noted that EPCA's definition for commercial gas-fired instantaneous water heaters does not include a minimum input or volume limit and claimed that it does not prevent DOE from specifying a reasonable storage volume threshold for gas-fired instantaneous water heaters above which the product would be rated to commercial metrics and considered as commercial equipment. (A.O. Smith, No. 1440 at p. 4)
As stated earlier, in the December 2016 Conversion Factor Final Rule, DOE determined that the translated UEF-based standards would apply only to gas-fired instantaneous water heaters with less than 2 gallons of storage volume due to concerns at the time that the UEF test procedure would not apply to gas-fired instantaneous water heaters 2 gallons or larger. 81 FR 96204, 96205. However, after conducting the market assessment for this rulemaking, DOE is now aware of multiple gas-fired instantaneous water heaters with 2 or more gallons of storage volume presently on the market. These products are specifically marketed for residential applications in publicly available product listings and literature.
In response to the July 2023 NOPR, some stakeholders provided comments specific to the proposed standards for gas-fired instantaneous water heaters in reference to the “unavailability provision” found in EPCA, 42 U.S.C. 6295(o)(4). DOE indicated that these comments would not be addressed in the May 2024 Final Rule. 89 FR 37778, 37814. After further consideration of these comments DOE is addressing them in this final rule. Relatedly, DOE received a multitude of comments throughout this rulemaking pertaining to a potential product class structure that differentiates between non-condensing and condensing products.
Per 42 U.S.C. 6295(o)(4), which outlines certain criteria for prescribing new or amended standards, the Secretary may not prescribe an amended or new standard under this section if the Secretary finds (and publishes such finding) that interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States at the time of the Secretary's finding. The failure of some types (or classes) to meet this criterion shall not affect the Secretary's determination of whether to prescribe a standard for other types (or classes).
Briefly, condensing and non-condensing products differ in how efficiently they make use of flue gas heat. A baseline gas-fired instantaneous water heater relies on a single heat exchanger, which extracts heat energy from the flue gases and transfers it to the water being delivered to the consumer. However, these flue gases contain more heat energy than the baseline heat exchanger is able to extract and, as a result, much of the heat in the flue gases is lost as they are exhausted outdoors. Enhancements to the heat exchanger—including the use of a secondary heat exchanger—enable high-efficiency gas-fired instantaneous water heaters to extract much more of the energy available in the flue gases. When enough energy is extracted by the heat exchangers, the flue gases cool to the point where they begin to condense,
As noted in the comments submitted by NPGA, APGA, AGA, and Rinnai in response to the July 2023 NOPR, the UEF requirements for gas-fired instantaneous water heaters as proposed in the July 2023 NOPR would require condensing technology. (NPGA, APGA, AGA, and Rinnai, No. 441 at pp. 2-3) Rinnai contended that the proposed rule exceeds DOE's authority because it is in conflict with statutory provisions in EPCA, most notably the unavailability provision. Rinnai added that if the proposed rule were adopted, it would eliminate non-condensing tankless water heaters, one of its product offerings. (Rinnai, No. 1186 at p. 2) Rinnai further argued that DOE may not make non-condensing gas-fired instantaneous water heaters unavailable pursuant to the section 6295(o)(4) of EPCA (the “unavailability provision”). Rinnai cited to DOE's interpretation of the unavailability provision in a recent rulemaking for residential furnaces and commercial water heaters and suggested that DOE's interpretation of the provision is unduly narrow and not supported by the provision's plain language.
Rinnai stated that even if DOE's interpretation of the unavailability provision in section 6295(o)(4) of EPCA is taken as correct, non-condensing gas-fired instantaneous water heaters still provide utility because the consumer's operation of, or interaction with, the appliance necessarily depends on whether or not the appliance can be installed. Rinnai added that installation costs should be considered under the unavailability provision in section 6295(o)(4) of EPCA, not just as part of determining whether or not a standard is economically justified. (Rinnai, No. 1186 at pp. 10-11) Similarly, ONE Gas claimed that DOE's proposed standards for gas-fired instantaneous water heaters violate section 6295(o)(4) of EPCA because the unavailability provision is not only limited to product classes and types, but also certain performance characteristics including, features, reliability, sizes, capacities, and volumes within those product classes and types. ONE Gas asserted that DOE's association of customer utility with understanding of, and interaction with, the covered appliance is incorrect and is an overreach in interpretation of section 6295 of EPCA. (ONE Gas, No. 1200 at pp. 4-5)
In response to the July 2024 NODA, Rinnai reiterated its position that non-condensing gas-fired instantaneous water heaters have useful and valuable features, including the ability to have like-for-like replacements, compatibility for easier and wider applications of installations, compatibility with non-condensing venting, smaller space requirements, and greater efficiency at lower cost than gas-fired storage water heaters. Rinnai claimed that there is no sound statutory basis for DOE's refusal to recognize that non-condensing gas-fired instantaneous water heaters have distinct features and characteristics from those of condensing gas-fired instantaneous water heaters that provide utility to consumers. Rinnai stated that DOE could instead establish separate standards for condensing and non-condensing gas-fired instantaneous water heaters to recognize the different functions, capabilities, and installation requirements while preserving consumer choice, and therefore retain the increased energy efficiency standard for condensing gas-fired instantaneous water heaters. Rinnai requested that DOE run an analysis of this proposal with product substitution and other factors taken properly into account. (Rinnai, No. 1443 at pp. 4-5)
Regarding Rinnai's request for further analysis on product substitution, see section IV.F.10 of this document for further details.
Regarding Rinnai's assertion that DOE's interpretation of the unavailability provision requires a redundant reading of 42 U.S.C. 6295(q) to 42 U.S.C. 6295(o)(4), DOE notes that while these provisions are related, they are not redundant. EPCA provides DOE authority to establish product classes with different standard levels under 42 U.S.C. 6295(q). Under this authority, DOE has to determine if a performance-related feature justifies a different standard,
As for Rinnai's statement that there is no reference to “consumer utility” in the unavailability provision detailed in section 6295(o)(4) of EPCA, Rinnai's own comment also cited a House of Representatives report that stated the purpose of the unavailability provision is to ensure that an amended standard does not deprive consumers of product choices and characteristics, features, sizes, etc., and that significant energy savings can be achieved without
DOE also disagrees with Rinnai's contention that the specific provisions of the unavailability provision—performance characteristics (including reliability), features, sizes, capacities, and volumes—should be read to also include, among other things, “installation costs” and “greater efficiency at lower cost than gas-fired storage water heaters.” Extending the unavailability provision to installation costs and efficiency is demonstrably an impossibly broad interpretation of what DOE is expected to preserve in the market under the unavailability provision. Efficiency is certainly a performance characteristic of a water heater as it measures how well a water heater performs its intended function. However, it would be nonsensical for efficiency to be a performance characteristic under the unavailability provision as the express purpose of the statute is to improve the energy efficiency of covered products and equipment,
Additionally, in determining whether a standard is economically justified under EPCA, DOE is directed, among other things, to consider any lessening of the utility or performance of the covered product likely to result from the standard. Thus, extending the unavailability provision to preserve any performance characteristic or feature would frustrate EPCA's purpose and statutory scheme. Simply put, EPCA requires DOE to adopt standards set at the maximum improvement in energy efficiency determined to be technologically feasible and economically justified. EPCA anticipates that new or amended energy conservation standards will result in the unavailability of certain inefficient technologies. An overly broad reading of the unavailability provision to include attributes of the covered product not addressed by the text of that provision (
As discussed previously, DOE's interpretation of the unavailability provision does not require a redundant reading of 42 U.S.C. 6295(q). Instead, DOE interprets these two provisions as complementing one another. EPCA provides DOE some discretionary authority to establish product classes with different standard levels under 42 U.S.C. 6295(q). Under this authority, DOE has to determine if a performance-related feature justifies a different standard by considering, among other things, utility to the consumer. And based on DOE's own research as well as information presented in stakeholder comments, differences in cost or complexity of installation between different methods of venting (
Unlike specific methods of venting, a covered product's capacity is addressed under the unavailability provision in 42 U.S.C. 6295(o)(4), and described under the product class provision in 42 U.S.C. 6295(q)(1)(B). DOE notes that a water heater's capacity provides utility to a consumer during use (unlike the type of venting or installation costs). For example, water heaters with higher capacities enable consumers to run multiple applications requiring hot water at the same time. Further, DOE is required to preserve the utility offered by larger capacity water heaters in the market under the unavailability provision in 42 U.S.C. 6295(o)(4). Unlike capacity, a lower installation cost has no effect on the performance of a water heater and offers no utility to a consumer during use. In addition to capacity, DOE has also established product classes for water heaters based on: volumes (
APCA opposed DOE's proposed standards for gas-fired instantaneous water heaters because these standards would require condensing operation. (APCA, No. 1152 at p. 1) The Governor of Georgia commented that the proposed standards would limit consumer choice by reducing the availability of many non-condensing tankless water heaters currently on the market, negatively impact consumers through increased product costs, and contradict EPCA requirements. (Governor of Georgia, No. 1157 at pp. 1-3)
ONE Gas indicated that non-condensing/positive vent pressure gas-fired instantaneous water heaters peak at approximately 0.82 UEF and that UEF ratings from 0.89 to 0.93 would be technologically infeasible for non-condensing products. (ONE Gas, No. 1200 at pp. 2-3) Huntsville Utilities expressed opposition to the proposed standards for gas-fired water heaters, adding that it is especially concerned with the proposed standards for gas-fired instantaneous water heaters that require an efficiency level over 91 percent, effectively eliminating the non-condensing option for this product class. (Huntsville Utilities, No. 1176 at p. 1) JEA, WMU, PGW, Southeast Gas, CEA, ASGE and ONE Gas stated that the proposed standard for gas-fired water heaters would effectively eliminate the option of a non-condensing instantaneous water heater and requested that DOE reassess the negative impacts on public gas utility customers and manufacturers of water heaters that would result from the proposed standard for gas-fired water heaters. (JEA, No. 865 at pp. 1-2; WMU, No. 872 at pp. 1-2; PGW, No. 886 at pp. 1-2; Southeast Gas, No. 887 at pp. 1-2; CEA, No. 914 at pp. 1-2; ASGE, No. 976 at pp. 1-2; ONE Gas, No. 1200 at p. 2)
The Gas Association Commenters expressed that the transition to condensing-level efficiencies for gas-fired instantaneous water heaters would result in the unavailability of products with what it considered to be performance characteristics and features provided by non-condensing products. This group of commenters cited comments submitted by Rinnai, stating that non-condensing gas-fired instantaneous water heaters can be installed and used in cases where condensing products cannot be (
In response to these comments, DOE acknowledges that the standards for gas-fired instantaneous water heaters cannot be achieved by non-condensing designs. Nevertheless, in response to comments from ONE Gas suggesting that the amended standards are technologically infeasible, condensing-level standards are still technologically feasible because condensing designs are widely available on the market. DOE has determined that non-condensing technology does not provide any inherent performance benefit to consumers beyond what is provided by condensing designs. Instead, as discussed previously in this section of this document, DOE has determined that non-condensing technology does not constitute a performance-related feature for which a separate product class must be established under EPCA, nor does non-condensing technology warrant preservation under the unavailability provision. Condensing gas-fired instantaneous water heaters can be installed in the same locations where non-condensing gas-fired water heaters are currently installed with proper consideration for the venting requirements of condensing water heaters. As discussed in section IV.F.2 of this document, the venting requirements of each type of water heater are considered in the analysis of installation costs. Moreover, DOE has not identified, nor have commenters provided, any specific examples of buildings that currently use gas-fired water heaters that cannot be retrofitted to accommodate a condensing gas-fired water heater in place of an existing non-condensing gas-fired water heater. DOE research indicates that historically protected buildings can be renovated with appropriate permitting from local jurisdictions.
First, regarding reliability, as discussed in the March 2022 preliminary analysis and the July 2023 NOPR, standards adopted at EL 2 would result in a transition towards condensing technology for gas-fired instantaneous water heaters (for those with less than 2 gallons of storage volume and more than 50,000 Btu/h of rated input) but would not result in the unavailability of reliably-performing products. (
Regarding sizes, capacities and volumes, gas-fired instantaneous water heaters are typically described in terms of capacity,
DOE has found no sound statutory basis for interpreting “size” to refer to the physical dimensions or total installation footprint of a covered product. As technology advances, many products get smaller. Computers used to be the size of rooms and now they can fit in a pocket. Similarly, televisions, which are covered products under 42 U.S.C. 6292(a)(12) and are typically referred to by screen size, have undergone significant technological advances over the past two decades as the market has shifted from cathode-ray-tube (CRT) televisions and rear-projection televisions to liquid-crystal-display (LCD) televisions. LCD televisions are a fraction of the physical size of a CRT television or rear-projection television for the same screen size. It would make little sense for the unavailability provision to require DOE to preserve CRT and rear-projection televisions in the market because they take up more space than an LCD television with the same screen size. As such, DOE views size, capacities, and volumes as product-specific terms that all refer to the same aspect of a covered product.
Nonetheless, even if a smaller installation footprint is considered a performance characteristic or feature, interested persons have not established by a preponderance of the evidence that the standard is likely to result in the unavailability of gas-fired instantaneous water heaters with smaller installation footprints. Gas-fired instantaneous water heaters that only just meet the current standards (“baseline” models) are designed with a combustion blower to help exhaust the flue gases and improve heat exchange. These designs use “category III”
For these reasons, DOE has concluded that interested persons have not established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States of gas-fired instantaneous water heaters with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. Additionally, DOE has determined that separate product classes for inefficient non-condensing technology and designs are not justified under 42 U.S.C. 6295(q)(1)(B).
Lastly, DOE notes that the condensing-level standards adopted by this final rule do not apply to
In the July 2023 NOPR market analysis and technology assessment, DOE identified several technology options initially determined to improve the efficiency of gas-fired instantaneous water heaters, as measured by the DOE test procedure. The technology options DOE identified are listed in table IV.3. These technology options pertain to gas-fired instantaneous water heaters with less than 2 gallons of stored volume and over 50,000 Btu/h of rated input. Technology options for other types of gas-fired instantaneous water heaters are largely similar; however, additional options may be used to complement the applications of those products. For example, gas-fired instantaneous water heaters with substantial storage volume may employ thicker insulation to improve UEF ratings by reducing standby losses. As discussed in section IV.C of this document, the engineering analysis for products with 2 or more gallons of storage volume and for products with less than 50,000 Btu/h of rated input consists of a “crosswalk,”
DOE uses the following five screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking:
(1)
(2)
(3)
(4)
(5)
In sum, if DOE determines that a technology, or a combination of technologies, fails to meet one or more of the listed five criteria, it will be excluded from further consideration in the engineering analysis. The reasons for eliminating any technology are discussed in the following sections.
The subsequent sections include DOE's evaluation of each technology option against the screening analysis criteria, and whether DOE determined that a technology option should be excluded (“screened out”) based on the screening criteria.
In the July 2023 NOPR, DOE screened out the following technology options pertaining to gas-fired instantaneous water heaters based on the previously described criteria: condensing pulse combustion and reduced burner size. 88 FR 49058, 49083. DOE did not modify its screening analysis in the July 2024 NODA or in this final rule analysis.
Regarding condensing pulse combustion, DOE has determined it is not technologically feasible for the broader market and not likely to be practicable to manufacture, install, and service this technology on the scale necessary to serve the relevant market at the time of the effective date of this standard. Although condensing pulse
Through a review of each technology, DOE tentatively concludes that all of the other identified technologies listed in section IV.B.2 met all five screening criteria to be examined further as design options in DOE's final rule analysis. In summary, DOE did not screen out the following technology options:
DOE determined that these technology options are technologically feasible because they are being used or have previously been used in commercially available products or working prototypes. DOE also finds that all of the remaining technology options meet the other screening criteria (
The purpose of the engineering analysis is to establish the relationship between the efficiency and cost of the product. There are two elements to consider in the engineering analysis: the selection of efficiency levels to analyze (
As discussed in section IV.A.1 of this document, certain classes of gas-fired instantaneous water heaters currently have UEF-based standards, while for others EPCA's EF-based standards apply. For this rulemaking, DOE analyzed amended UEF standards for the product classes that currently have standards in terms of UEF. For the product classes with EF-based standards, DOE developed translated standards in terms of UEF for use in the analysis but did not analyze higher efficiency levels because, as discussed in section IV.C.2.b of this document, DOE does not currently have sufficient information to determine which higher efficiencies may be economically justified and result in significant national energy savings.
DOE has analyzed standards with respect to the effective storage volume metric (as proposed in the July 2023 NOPR) to allow consistency between standards in different product classes. As outlined in the July 2023 NOPR, there are two types of water heaters that can cause the system to store more energy than would be otherwise determined by the rated storage volume: (1) water heaters capable of operating with an elevated tank temperature, and (2) circulating water heaters.
The product classes analyzed in this final rule and the respective analytical approaches utilized are listed in table IV.5.
DOE typically uses one of two approaches to develop energy efficiency levels for the engineering analysis: (1) relying on observed efficiency levels in the market (
In the July 2023 NOPR, DOE developed efficiency levels with a combination of the efficiency-level and design-option approaches. DOE conducted a market analysis of currently available models listed in DOE's Compliance Certification Database to determine which efficiency levels were most representative of the current distribution of gas-fired instantaneous water heaters available on the market. DOE also completed physical teardowns of commercially available units to determine which design options manufacturers may use to achieve certain efficiency levels. DOE requested comments from stakeholders concerning these efficiency levels, which, in this final rule, are consistent with those analyzed in the July 2024 NODA.
For each product class, DOE generally selects a baseline model as a reference point for each class, and measures anticipated changes resulting from potential energy conservation standards against the baseline model. The baseline model in each product class represents the characteristics of a product typical of that class (
In this final rule, DOE has analyzed the same efficiency levels as were considered in the July 2023 NOPR and the July 2024 NODA. These efficiency levels are presented in table IV.6. For each draw pattern, EL 2 corresponded with the levels proposed in the Joint Stakeholder Recommendation (“JSR”) as discussed in section II.B.2 of this document.
In response to the July 2023 NOPR, ONE Gas stated that as efficiencies of non-condensing instantaneous gas water heaters have increased since their introduction, replacements would accrue efficiency gains and emissions reductions over the products when first introduced in the 2000s and now at the end of their predicted lives (20 years according to the Department's analysis). (ONE Gas, No. 1200 at p. 4)
DOE agrees that efficiencies of gas-fired instantaneous water heaters have increased over time. In the present rulemaking, DOE considered the baseline efficiency of gas-fired instantaneous water heaters to be equivalent to the current standards. This efficiency was required as a result of the April 2010 Final Rule, which set standards at a level that typically corresponds to electronic ignition, larger non-condensing heat exchangers, and power venting. As shown in chapter 3
With respect to efficiency level 2, Rinnai stated that DOE's proposed standard is not technically achievable by non-condensing gas-fired instantaneous water heaters, and, accordingly, will make them obsolete. Rinnai noted that it had previously submitted comments on the July 2023 NOPR, stating that the proposed rule would eliminate one of Rinnai's two residential water heater product offerings and significantly impact Rinnai's tankless water heater sales and manufacturing facility. (Rinnai, No. 1443 at pp. 1-2)
DOE has concluded that the efficiency levels analyzed in this rulemaking are technologically feasible for gas-fired instantaneous water heaters through the use of condensing heat exchangers, which are widely used in the market today. DOE understands Rinnai's concern regarding the elimination of less-efficient models impacting the manufacturer, and therefore these topics are addressed more in detail in section IV.J.3 of this document, which discusses MIA comments. After consideration of feedback from commenters, DOE is maintaining the efficiency levels provided in the July 2024 NODA.
Based on its teardown analyses and feedback provided by manufacturers in confidential interviews, DOE determined the technology options that are most likely to constitute the pathway to achieving the efficiency levels assessed. These technology options are referred to as “design options.” While manufacturers may achieve a given efficiency level using more than one design strategy, the selected design options reflect what DOE expects to be the most likely approach (most likely to prove cost-effective) for the market in general in a standards-case scenario. Further details are provided in chapter 5 of the final rule TSD.
DOE has found that gas-fired instantaneous water heaters are often differentiated based on heat exchanger and burner designs. Step-modulating burners feature a manifold with multiple solenoids regulating the gas flow into the burner. Sections of the burner can be shut off or opened up as demand for hot water varies. Each additional open solenoid means another “step up” in heat input. By contrast, fully modulating burners make use of the full combustion chamber and heat exchanger surface area, modulating the input rate in tandem with the combustion blower. Such systems tend to be more complex than step-modulating gas-fired instantaneous water heaters. In the March 2022 Preliminary Analysis, DOE observed some manufacturers using fully modulating burners in lieu of step-modulating burners at the max-tech efficiency level. In the July 2023 NOPR, DOE analyzed an additional efficiency level, EL 3, that was close to the max-tech level, EL 4, and used generally similar design options. However, in the July 2024 NODA, upon further review DOE found products that meet EL 3 but not EL 4 using step modulation. Thus, DOE tentatively determined that fully modulating burners are more likely to be implemented in only EL 4 designs. In the July 2024 NODA, based on additional data collected in its analyses, DOE also surmised that EL 4 efficiencies could still be met without the use of fully modulating burners—
In response to the July 2024 NODA, AHRI disagreed with DOE's assessment that EL 3 and EL 4 can be achieved using step modulating burners. AHRI stated that fully modulating burners are required to achieve EL 3 and EL 4. AHRI claimed that fully modulating burners provide the precise control necessary to optimize combustion efficiency, minimize energy waste, and consistently achieve the higher performance levels associated with EL 3 and EL 4. AHRI claimed that this is supported by current market data, which shows that the vast majority of gas-fired instantaneous water heaters achieving high efficiency levels, particularly those with a UEF above 0.93, rely on fully modulating burners. AHRI claimed DOE's findings are not supported by the existing market landscape. AHRI urged DOE to consider performing a detailed review of the efficiency gains that can be realistically expected from step modulating versus fully modulating burners, as well as a comprehensive assessment of market data in order to support the claim that step-modulating burners can be used to achieve EL 3 and EL 4. (AHRI, No. 1437 at pp. 1-2)
Rinnai requested that DOE analyze and validate the assumptions regarding the feasibility of achieving EL 3 or EL 4 using step modulating burners, a change made in the July 2024 NODA. According to Rinnai, fully modulating burners consistently achieve EL 3 and EL 4, which the July 2024 NODA now contradicts. (Rinnai, No. 1443 at p. 23)
Rheem disagreed with the design options for EL 3 and EL 4 as described in the July 2024 NODA, claiming that step modulation was not reflected in the MPCs. Rheem indicated that there are currently no models utilizing step modulating burners on the market that meet EL 4. In addition, Rheem stated that, while there are step modulating designs currently on the market that meet EL 3, some are complex down-fired designs that were not reflected in the technology options discussed in the NOPR TSD. Finally, Rheem questioned whether traditional step modulating designs can meet EL 3 at all input rates. (Rheem, No. 1436 at p. 2)
A.O. Smith stated that DOE's engineering analysis should reflect the technologies and design pathways currently available on the market and avoid making speculative assumptions regarding cost and performance of theoretical designs which have not been fully vetted or proven to be market ready and emphasized that the use of theoretical design pathways is more prone to inaccurate or incomplete cost estimates. (A.O. Smith, No. 1440 at pp. 5-6)
BWC agreed that designs utilizing step modulating burners can achieve EL 4, but stated that manufacturers do not widely design their products in this way due to their increased complexity, which correlates with reduced product lifetimes. Additionally, the manufacturer stressed that added product complexity would entail more specialized manufacturing processes, leading to additional costs passed on to consumers. (BWC, No. 1441 at pp. 1-2) BWC further stated that for products achieving EL 4 efficiencies with the use of step modulating burners the increased complexity of step modulating burners would make
To clarify, DOE bases its assignment of design options not only on publicly available product literature, but also on its independent analysis of teardown samples. DOE combines this information to determine what the most cost-effective pathway to increasing efficiency may be.
With respect to burner configuration (
Where DOE has found a correlation between down-fired configurations and UEF is in the implementation of fully modulating burners. Down-fired configurations tend to have higher UEF ratings because fully modulating burners are typically always down-fired. This may be because, as discussed further in the following paragraphs, fully modulating burners require different manufacturing equipment and production lines. For example, if a manufacturer is designing a new production line for models with fully modulating burners, there may be an opportunity to implement a down-fired design for the condensate. However, the research and teardown analyses conducted by DOE did not yield evidence to suggest that the down-fired configuration causes an increase in UEF without the implementation of a fully modulating burner. Hence DOE maintains that the pathway to increasing efficiencies up to the max-tech level includes incorporating fully modulating burner designs, which happen to be down-fired. For condensing efficiency levels below the max-tech level, DOE's teardown analyses indicate that there would not be a significant difference in MPC between a down-fired design and an up-fired design, all else the same. Therefore, DOE has not directly analyzed the incorporation of down-fired burners as a design option in this engineering analysis except where fully modulating burners are used.
With respect to the burner modulation type, DOE agrees that fully modulating burners are capable of achieving higher efficiencies, including those from EL 1 through EL 4. However, in its teardowns, DOE identified samples of gas-fired instantaneous water heaters currently on the market meeting the efficiencies as high as EL 3 using step-modulating burners. Additionally, the comments from Rheem implicitly provide that fully modulating designs are associated with higher costs compared to step-modulating designs, which may be a reason step-modulating burners are still commonly used at higher efficiencies. DOE's teardown analyses verify this understanding—fully modulating burners use more advanced components that cause MPCs to rise commensurately. Responding to the comments from BWC, DOE understands that a production line built to manufacture step-modulating burners would have additional equipment that a fully modulating burner production line would not require. For example, manufacturers typically need additional metal presses and/or dies to stamp the compartments of a step-modulated burner and combustion chamber. Each manufacturer has the ability to choose which type of burner to implement in its designs, taking into consideration the pros and cons of each approach (
As stated earlier, DOE aims to identify the most cost-effective and likely pathway to achieving higher efficiency levels. The cost-efficiency curves serve as estimates for what the overall market—not just one manufacturer—would experience in a scenario where standards are set to that efficiency levels. In the July 2024 NODA, DOE tentatively determined that the continued use of step-modulating burners, along with heat exchanger improvements, would be the most cost-effective pathway to achieve EL 3. Then, to reach EL 4, fully modulating burners may have similar cost-effectiveness such that manufacturers could opt to use either a step-modulating burner with an even larger heat exchanger or a fully modulating burner at this level.
DOE once again reviewed its teardowns and online product literature to assess how different manufacturers implement step-modulating and fully modulating burner designs, as suggested by AHRI. To Rheem's point, DOE once again found that step-modulating designs on the market today can achieve EL 3 and can span the full range of capacities (up to 200,000 Btu/h), as described in chapter 5 of the final rule TSD. While there may be some cases of product lines not reaching EL 3 across the full span of capacities, DOE believes these discrepancies in efficiency can be addressed by improving the heat exchanger (and the added costs of doing so are included in DOE's estimates of MPCs). Considering this, the Department has confirmed that the design option pathway to EL 3 could be more cost-effective using step-modulating burners.
DOE also found that, although step-modulating designs would be capable of meeting EL 4 (as BWC indicated), more manufacturers use fully-modulating burners at EL 4. To determine whether step-modulating burners would be appropriate to consider for EL 4, DOE evaluated the comments from manufacturers regarding manufacturing complexity. Currently, approximately only 8 percent of shipments currently
As a result, the design options analyzed in this final rule are listed in table IV.7.
The cost analysis portion of the engineering analysis is conducted using one or a combination of cost approaches. The selection of cost approach depends on a suite of factors, including the availability and reliability of public information, characteristics of the regulated product, the availability and timeliness of purchasing the product on the market. The cost approaches are summarized as follows:
•
•
•
In the present case, DOE conducted the analysis using a combination of the physical and catalog teardown approaches to develop estimates of the manufacturer production cost (“MPC”) at each UEF efficiency level analyzed. Data from the teardowns were used to create bills of materials (“BOMs”) that capture all of the materials, components, and manufacturing processes necessary to manufacture products at various efficiency levels spanning the full range of efficiencies from the baseline to max-tech. DOE used the BOMs along with publicly available material and component cost data as the basis for estimating the MPCs. DOE refined its cost estimates and its material and component cost data based on feedback received during confidential manufacturer interviews conducted during this rulemaking.
To perform this analysis, DOE selects representative capacities for each product class. These capacities reflect the most common or average size of a gas-fired instantaneous water heater in that product class, and this step is important because the MPC is dependent upon the size of the water heater—water heaters with higher input rates cost more to manufacture. In the July 2023 NOPR and July 2024 NODA, DOE analyzed input rates of 120,000 Btu/h and 199,000 Btu/h as representative capacities for the medium and high draw patterns, respectively. DOE has determined that these capacities remain representative in this final rule. Based on the results of the market assessment, DOE has determined that there are very few models in the low draw pattern, with only one manufacturer making these products. There are no very small draw pattern gas-fired instantaneous water heaters greater than 50,000 Btu/h in input rating. DOE's teardown analyses have shown that the design option pathways and manufacturer production cost versus efficiency curves are generally similar for all tankless gas-fired instantaneous water heaters, such that the results from a direct analysis of the medium and high draw patterns would be representative for the very small and low draw patterns as well. Thus, the very small and low draw patterns were not directly analyzed product classes in this final rule.
Rheem stated that the incremental MPCs from EL 2 to EL 3 and from EL 3 to EL 4 are too low, and do not adequately capture the higher costs associated with the new step modulation or fully modulating burner systems. Furthermore, Rheem reiterated its comment in response to the July 2023 NOPR that the incremental retail cost between step modulating and fully modulating gas-fired instantaneous water heater designs is 50 percent lower than expected. (Rheem, No. 1436 at pp. 2-3)
As described in section IV.C.1.b, DOE determined that the burner design options for EL 3 and EL 4 would be step-modulating burners and fully modulating burners, respectively. The July 2024 NODA assumed that only a fraction of the market would switch to fully modulating burners at EL 4, and, therefore, the incremental cost increase reflected an average of some manufacturers retaining the step-modulating burner (no additional burner cost) and some manufacturers switching to fully modulating burners (significant additional burner cost). As a result, the incremental MPC between EL 3 and EL 4 in the July 2024 NODA averaged out to be lower than the estimated total cost of switching to a fully modulating burner. In this final rule analysis, DOE assumes that all models at EL 4 would utilize fully modulating burners. Hence, the MPCs at EL 4 are increased to reflect this change in design pathway, and this would in turn increase the incremental retail cost between EL 3 and EL 4.
As discussed in the July 2024 NODA, DOE similarly maintained the methodology for shipping costs from the July 2023 NOPR (
A.O. Smith stated that DOE does not account for the increase in downstream shipping costs at EL 3 and EL 4 that would result from incorporating larger heat exchangers into consumer gas fired instantaneous water heaters. (A.O. Smith, No. 1440 at pp. 5-6)
DOE agrees that larger heat exchangers would increase the product footprint. In some cases, this causes fewer units to fit in a container or trailer, thereby increasing the per-unit outbound shipping cost to manufacturers. To determine how many units would fit, DOE assumed standard trailer dimensions and a nearly full truckload configuration (
To account for manufacturers' non-production costs and profit margin, DOE applies a multiplier (the manufacturer markup) to the MPC. The resulting manufacturer selling price (“MSP”) is the price at which the manufacturer distributes a unit into commerce. DOE developed an average manufacturer markup by examining the annual Securities and Exchange Commission (“SEC”) 10-K
The results of the engineering analysis are reported as cost-efficiency data in the form of MPCs and shipping costs calculated for each efficiency level of each product class for which DOE is proposing amended UEF-based standards. As discussed previously, DOE determined these costs by developing BOMs based on a combination of physical and catalog teardowns and using information in the BOMs along with component and material price data to estimate MPCs. As discussed in section IV.C.1.c of this document, the very small and low draw patterns were not directly analyzed due to the low number of basic models identified in these draw patterns during the market and technology assessment. However, as shown in section IV.C.1.a of this document, higher efficiency levels of the very small and low draw pattern product classes continue to be assessed. Further evaluation of the economic justification of potential amended standards for gas-fired instantaneous water heaters (all models with V
In the December 2016 Conversion Factor Final Rule, DOE established that EF-based standards as established by EPCA are applicable to consumer water heaters but would not be enforced until conversion factors and converted standards are adopted. 81 FR 96204, 96209-96211. To convert these EF-based standards to UEF-based standards, DOE first developed conversion factors that convert tested values measured under the DOE test procedure in effect prior to the July 2014 TP Final Rule (which produces the EF metric) to values found under the current DOE test procedure (which produces the UEF metric). DOE then applied these conversion factors to representative baseline models and derived the UEF-based energy conservation standards from the resulting UEF values.
For the July 2023 NOPR, DOE applied a similar methodology to translate from minimum efficiency levels denominated in EF to those in UEF for classes of covered consumer water heaters that do not yet have UEF-based standards. 88 FR 49058, 49098. The translated standards for gas-fired instantaneous water heaters are shown in table IV.9. These efficiencies all correspond to non-condensing operation.
In the July 2023 NOPR, DOE proposed to adopt these translated standards and reiterated that the stringency of the standards is not increasing as a result of the conversion. 88 FR 49058, 49098-49100.
In the July 2023 NOPR, DOE requested feedback regarding the appropriateness of the proposed converted UEF-based standards and whether products on the market can meet or exceed the proposed levels. 88 FR 49058, 49100.
The Gas Association Commenters stated that DOE did not justify the proposed new standards for gas-fired instantaneous water heaters that are <2 gallons and <50,000 Btu/h or greater than or equal to 2 gallons. In its comments, the Gas Association Commenters interpreted the economic analysis performed for gas-fired instantaneous water heaters that are <2 gallons and >50,000 Btu/h as being treated as representative for all gas-fired instantaneous water heater standards being proposed in the July 2023 NOPR. These commenters noted that DOE tentatively concluded these product classes are different enough to warrant separate standards, but that there was no economic justification provided for the two product categories remaining at non-condensing efficiency levels. Citing the statutory requirement for any new or amended energy conservation standards to be technologically feasible and economically justified, the Gas Association Commenters recommended that DOE modify its approach. (Gas Association Commenters, No. 1181 at p. 8)
EPCA directed DOE to establish a uniform efficiency descriptor to be used to regulate all covered water heaters, with certain exceptions for water heaters used only in commercial applications. (42 U.S.C. 6295(e)(5)) Therefore, DOE has conducted this analysis in satisfaction of its statutory obligation to delineate standards for all consumer water heaters, including gas-fired instantaneous water heaters, in terms of UEF. Because the statute requires that the UEF-based standards for these product classes reflect the same stringency as the statutory EF-based standards that are currently applicable—
In the July 2023 NOPR, DOE also requested information and data regarding the UEF of products within these product classes if they are found to generally exceed the proposed levels. 88 FR 49058, 49100.
Some commenters identified a need to consider more stringent standards for gas-fired instantaneous water heaters with less than 50,000 Btu/h of input, discussed as follows.
A.O. Smith indicated that simultaneous establishment of baseline UEF levels for converted product classes while increasing the standard levels for existing product classes creates a scenario where new products may emerge, and shipments may shift from product classes with more stringent standards to very similar products in new product classes with less stringent standards. (A.O. Smith, No. 1182 at p. 14) A.O. Smith identified that product classes for <2 gallon and <50,000 Btu/h gas-fired instantaneous water heaters and ≥2 gallon and ≤200,000 Btu/h gas-fired instantaneous water heaters with non-condensing standard levels are likely to incentivize circumvention of the <2 gallon and >50,000 Btu/h condensing standards. (A.O. Smith, No. 1182 at p. 14)
Bosch noted that there are still pathways for non-condensing gas-fired instantaneous water heaters to stay in the market, which could be realized by creating model lines that are either below 50,000 Btu/h in input or above 2 gallons in storage capacity. To remedy this, Bosch recommended DOE require condensing technology for all gas-fired instantaneous water heaters. (Bosch, No. 1204 at pp. 2-3)
By contrast, the CA IOUs stated that the proposed product sub-class with a rated volume of <2 gallons and an input rating of ≤50,000 Btu/h is appropriate for point-of-use applications and that this subclass will not account for a significant amount of gas fired instantaneous water heater shipments. (CA IOUs, No. 1442 at pp. 2-3) Rheem suggested that DOE consider increasing the standards for gas-fired instantaneous water heaters <2 gallons and less than or equal to 50,000 Btu/h of input to an efficiency that corresponds to removal of standing pilot lights, but not an efficiency that utilizes condensing technology. Rheem stated that gas-fired instantaneous water heaters under 50,000 Btu/h exist and have residential applications (
DOE agrees that there may be a market for gas-fired instantaneous water heaters with less than 50,000 Btu/h of input based on the designs it has reviewed. Gas-fired instantaneous water heaters with less than 50,000 Btu/h of heat input are typically used in “point-of-use” applications (
While DOE acknowledges that removing standing pilot lights would result in additional energy savings, DOE does not currently possess data supporting more stringent standards than those being established as part of this rulemaking. However, DOE may analyze the benefits and burdens of higher standards for these products at a later time. Further, after the compliance date of this final rule, the availability of UEF certification data for these products may inform a future analysis of more stringent standards in a future rulemaking.
In addition to Bosch and A.O. Smith, several other commenters raised concerns regarding non-condensing standards for larger gas-fired instantaneous water heaters—those with 2 or more gallons of storage volume.
Rheem commented that gas-fired instantaneous water heaters greater than or equal to 2 gallons of rated storage volume do not currently exist on the market because there is no need for them. (Rheem, No. 1177 at p. 13) Rheem stated that the ≥2 gallons and ≤200,000 Btu/h product category could be used to circumvent the condensing-level standards for <2 gallon and >50,000 Btu/h gas-fired instantaneous water heaters and recommended aligning the standards to the condensing levels (
In response to the July 2024 NODA, the CA IOUs stated that manufacturers could produce gas fired instantaneous water heaters with a rated volume of ≥2 gallons and an input rating of ≤200,000 Btu/h that do not meet condensing standards. The CA IOUs expressed concern that this would allow manufacturers to avoid meeting condensing standards for all consumer gas fired instantaneous water heater offerings. The CA IOUs expressed concern that, because of the low cost to manufacturers of increasing the rated volume of existing non-condensing gas fired instantaneous water heaters to 2 gallons or higher, DOE's proposal could allow non-condensing products to remain in the market at lower prices than condensing products. The CA IOUs urged DOE to modify its proposed subclass definitions if it can do so in a timely manner and to immediately begin a new rulemaking to address its concerns should modifying product sub-classes present a significant delay to a final rule being issued for gas fired instantaneous water heaters (CA IOUs, No. 1442 at pp. 3-4). Specifically, the CA IOUs recommended that DOE expand the existing subclass to include all gas fired instantaneous water heaters with a volume less than 20 gallons and an input rating >50,000 Btu/h and ≤200,000 Btu/h. (CA IOUs, No. 1442 at pp. 3-4)
A.O. Smith claimed that, because some products ≥2 gallons and ≤200,000 Btu/h are used only in commercial applications, condensing-level standards are justified for these products, citing the conclusions of DOE's rulemaking for commercial water heaters. (A.O. Smith, No. 1440 at p. 4) A.O. Smith emphasized the importance of establishing condensing-level standards for all gas-fired instantaneous water heaters, noting that finalizing the proposed standard for this product class leaves open the opportunity for the entry of new products intended to circumvent both consumer condensing standards and commercial condensing standards effective in October 2026. (A.O. Smith, No. 1440 at p. 4) A.O. Smith stated that in this rulemaking, in contrast with the conversion factor rulemaking, DOE is evaluating whether more stringent standards for gas-fired instantaneous water heaters would be technologically feasible, economically justified, and result in significant energy savings and that in this context, DOE must consider the factors outlined in EPCA at 42 U.S.C. 6295(q) for establishing product classes and adjust the gas-instantaneous product classes accordingly. (A.O. Smith, No. 1440 at p.4)
A.O. Smith recommended that DOE expand the analyzed product class from <2 gallons and >50,000 Btu/h to <5 gallons and >50,000 Btu/h to ensure that condensing standards are not circumvented through minor design changes. (A.O. Smith, No. 1440 at p. 4) A.O. Smith claimed that a gas-fired instantaneous water heater with a 5-gallon storage volume would have negligible standby losses and a consistent UEF standard value could apply to the entire zero-to-five-gallon range. A.O. Smith noted that EPCA only established standby loss standards for commercial gas-fired instantaneous water heaters with a rated storage volume greater than 10 gallons, stating that this indicates that standby losses are not expected to be significant enough to warrant separate standards and separate product classes until 10 gallons of storage volume for commercial gas-fired instantaneous water heaters. A.O. Smith stated that this suggests that DOE expanding the storage capacity range up to 5 gallons for the gas-fired instantaneous consumer water heater product class under consideration for amended standards is appropriate. (A.O. Smith, No. 1440 at pp. 4-5)
In response to A.O. Smith, DOE notes that the most recent commercial water heaters rulemaking, which published in the
Further, DOE understands that the recommendations to expand the applicability of the condensing-level standards to products with 2 or more gallons of storage may be based on an assumption that such a stringency increase would have minimal impact to the market. However, contrary to the comments from Rheem, Bosch, and A.O. Smith, DOE has identified several consumer gas-fired instantaneous water heaters on the market with 2 or more gallons, as discussed in section IV.A.1 of this document. Some of these models use non-condensing operation and would not comply with condensing-level standards at efficiency level 2. DOE does not currently possess data
In light of these considerations, DOE is maintaining the proposed separation of product classes for products without current UEF-based standards in this final rule as proposed in the July 2023 NOPR. DOE will continue to monitor the market for these products and may address consider potential more-stringent standards for larger gas-fired instantaneous water heaters in a future rulemaking.
The markups analysis develops appropriate markups (
As part of the analysis, DOE identifies key market participants and distribution channels. For consumer gas-fired instantaneous water heaters, the main parties in the distribution chain are (1) manufacturers, (2) wholesalers or distributors, (3) retailers, (4) plumbing contractors, (5) builders, (6) manufactured home manufacturers, and (7) manufactured home dealers/retailers.
For this final rule, DOE characterized how consumer gas-fired instantaneous water heater products pass from the manufacturer to residential and commercial consumers
For mobile home replacement or new owner applications, the same distribution channels are applicable for consumer gas-fired instantaneous water heaters.
For consumer gas-fired instantaneous water heaters in commercial applications, DOE considers an additional distribution channel for which the manufacturer sells the equipment to the wholesaler and then to the consumer through a national account in both replacement and new construction markets.
The new construction distribution channel includes an additional link in the chain—the builder. The distribution channels for consumer gas-fired instantaneous water heaters in new construction
Manufacturer → Wholesaler → Plumbing Contractor → Builder → Consumer
Manufacturer → Wholesaler → Builder → Consumer
Manufacturer → Wholesaler (National Account) → Consumer
DOE developed baseline and incremental markups for each actor in the distribution chain. Baseline markups are applied to the price of products with baseline efficiency, while incremental markups are applied to the difference in price between baseline and higher-efficiency models (the incremental cost increase). The incremental markup is typically less than the baseline markup and is designed to maintain similar per-unit operating profit before and after new or amended standards.
To estimate average baseline and incremental markups, DOE relied on several sources, including: (1) form 10-K
The purpose of the energy use analysis is to determine the annual energy consumption of consumer gas-fired instantaneous water heaters at different efficiencies in representative U.S. single-family homes, mobile homes, multi-family residences, and commercial buildings, and to assess the energy savings potential of increased consumer gas-fired instantaneous water heater efficiency. The energy use analysis estimates the range of energy use of consumer gas-fired instantaneous water heaters in the field (
DOE estimated the annual energy consumption of consumer gas-fired instantaneous water heaters at specific energy efficiency levels across a range of climate zones, building characteristics, and water heating applications. The annual energy consumption includes the natural gas, liquid petroleum gas (“LPG”), and electricity used by the consumer gas-fired instantaneous water heater.
To determine the field energy use of consumer water heaters used in homes, DOE established a sample of households using consumer water heaters from EIA's 2015 Residential Energy Consumption Survey (“RECS 2015”) in the July 2023 NOPR, which was the most recent such survey that was then fully available.
For this final rule, DOE incorporated RECS 2020 as the basis of the building sample development and updated the analyses accordingly.
To determine the field energy use of consumer water heaters used in commercial buildings, DOE established a sample of buildings using consumer water heaters from EIA's 2018 Commercial Building Energy Consumption Survey (“CBECS 2018”), which is the most recent such survey that is currently fully available.
AGA
Based on the reported water heating energy use from RECS and CBECS, DOE estimated the hot water use for each sampled household and building. Then, in order to disaggregate the selected sampled gas-fired instantaneous water heaters into draw patterns, DOE used model data from DOE's public CCD
Responding to the July 2023 NOPR, AHRI recommended DOE explain its inputs in the energy use calculations. AHRI commented that DOE's use of nesting of various assumptions for residential water heaters leads to unlikely results that DOE does not, or cannot, explain. AHRI raised concerns on two oddities in the energy use calculations for gas-fired instantaneous water heaters. First, the water
Gas Association Commenters argued that water consumption should be based on household size and that there are problems with water consumption calculations, particularly for gas-fired instantaneous water heaters. Gas Association Commenters argue that for gas-fired instantaneous water heaters, DOE models incorrect tankless water heater results (greater outliers than there are for storage unit equivalents) in regard to household size. Gas Association Commenters argue the model results in unrealistic outliers for smaller households reaching consumption levels equivalent to space heating. Gas Association Commenters argue that a potential reason for this failure is how the model calculates daily water usage. For example, Gas Association Commenters argued that in DOE's model, some single person households use 200-350 gallons a day which is far from reasonable (4-7 baths of water a day every day of the year). Gas Association Commenters argued that Draw Pattern ID is based on randomly assigned distribution. Gas Association Commenters state that DOE assumes that households will always use more water if they use an instantaneous unit. Gas Association Commenters argue that while for small storage units, there is a 5 percent chance of a large draw pattern but there is a 75 percent chance for instantaneous. Gas Association Commenters argued that if consumption behavior was more consistent between the gas storage water heaters and gas-fired instantaneous water heaters, LCC savings would be lower. Gas Association Commenters argues that a better solution would be to use the test procedure for water heaters as a basis for modeling energy usage rather than assuming draw rates based on the size of the original equipment in RECS. Gas Association Commenters suggested that alternately, gas-fired instantaneous water heaters could just have the same assumptions about water usage as their gas storage water heaters counterparts. (Gas Association Commenters, No. 1181 at pp. 25-31) Similarly, in response to the July 2024 NODA, Rinnai stated that the energy use estimates in the energy conservation standard should use the same standardized draw patterns outlined in the UEF test method rather than relying on RECS, which the commenters characterized as unreliable. Rinnai recommended that the Department use the hot water draw patterns from the UEF test method as the basis for comparing efficiency proposals and reserve the RECS hot water consumption data for estimating national energy savings potential and other downstream impacts. (Rinnai, No. 1443 at p. 20)
In response, DOE notes that RECS and CBECS data provide the information on the household size and water heating energy use in buildings. RECS and CBECS are the most comprehensive, nationally-representative, and robust data source on actual household and commercial building energy consumption available to DOE. In general, DOE has found that the weighted average energy use for water heating correlates with the size of the household,
For this final rule, DOE incorporated the latest RECS 2020 data for its analyses. With the increased sample size and the most recent timeline of the fielding of the survey, RECS 2020 provides a large sample pool with current national representation of housing characteristics and energy consumption. Specifically, for gas-fired instantaneous water heaters, which historically have had a lower market share relative to the gas storage type, RECS 2020 reports over 800 sample households utilizing a gas-fired instantaneous water heater. As discussed previously, the weighted average of the energy use on water heating and the derived hot water use generally correlates with the size of the household with deviations that represent the real world complexities of the use of a hot water heater in households of different types. With the update to RECS 2020, for example, the
To calculate the energy use of consumer water heaters, DOE determined the energy consumption associated with water heating and any auxiliary electrical use. DOE calculated the energy use of water heaters using a simplified energy equation, the water heater analysis model (“WHAM”). WHAM accounts for a range of operating conditions and energy efficiency characteristics of water heaters. The current version of WHAM is most appropriate for calculating the energy use of electric resistance storage water heaters. To account for the characteristics of consumer gas-fired instantaneous water heaters, energy use must be calculated using modified versions of the WHAM equation. For gas-fired instantaneous water heaters, the water heater operating conditions are indicated by the daily hot water draw volume, inlet water temperature, and thermostat setting. To describe energy efficiency characteristics of water heaters, WHAM also uses parameters in the DOE test procedure including recovery efficiency (“
The daily hot water draw volume is estimated based on the gas-fired instantaneous water heater energy use from RECS 2020 and CBECS 2018. The inlet water temperature is based on weather station temperature data and RECS 2020 ground water temperature data for each household. The consumer gas-fired instantaneous water heater thermostat setting is based on multiple sources including contractor survey data and field data.
AGA
Gas Association Commenters commented that there is a bug in the LCC tool that causes it to use only a single year of weather data rather than 10-year average, which they believe impacts gas-fired instantaneous water heater results. (Gas Association Commenters, No. 1181 at p. 34) In response, DOE notes that the analysis uses the NOAA's 30 year average weather data for the outside air temperature.
Chapter 7 of the final rule TSD provides details on DOE's energy use analysis for consumer gas-fired instantaneous water heaters.
DOE conducted LCC and PBP analyses to evaluate the economic impacts on individual consumers of potential energy conservation standards for consumer gas-fired instantaneous water heaters. The effect of new or amended energy conservation standards on individual consumers usually involves a reduction in operating cost and an increase in purchase cost. DOE used the following two metrics to measure consumer impacts:
• The LCC is the total consumer expense of an appliance or product over the life of that product, consisting of total installed cost (manufacturer selling price, shipping costs, distribution chain markups, sales tax, and installation costs) plus operating costs (expenses for energy use, maintenance, and repair). To compute the operating costs, DOE discounts future operating costs to the time of purchase and sums them over the lifetime of the product.
• The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient product through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost at higher efficiency levels by the change in annual operating cost for the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC relative to the LCC in the no-new-standards case, which reflects the estimated efficiency distribution of consumer gas-fired instantaneous water heaters in the absence of new or amended energy conservation standards. In contrast, the PBP for a given efficiency level is measured relative to the baseline product.
For each considered efficiency level, DOE calculated the LCC and PBP for a nationally representative set of housing units and commercial buildings. As stated previously, DOE developed household samples from the RECS 2020 and CBECS 2018. For each sample household and commercial building, DOE determined the energy consumption for the consumer gas-fired instantaneous water heaters and the appropriate energy price. By developing a representative sample of households and commercial buildings, the analysis captured the variability in energy consumption and energy prices associated with the use of consumer gas-fired instantaneous water heaters.
Inputs to the LCC calculation include the installed cost to the consumer, operating expenses, the lifetime of the product, and a discount rate. Inputs to the calculation of total installed cost include the cost of the product—which includes MPCs, manufacturer markups, retailer and distributor markups,
The computer model DOE uses to calculate the LCC relies on a Monte Carlo simulation to incorporate uncertainty and variability into the analysis. The Monte Carlo simulations sample input values from constrained probability distributions based on available data and consumer water heater user samples. For this rulemaking, the Monte Carlo approach is implemented in MS Excel together with the Crystal Ball
DOE calculated the LCC and PBP for consumers of consumer gas-fired instantaneous water heaters as if each were to purchase a new product in the first year of required compliance with new or amended standards. New and amended standards apply to consumer water heaters manufactured 5 years after the date on which any new or amended standard is published. (42 U.S.C. 6295(m)(4)(A)(ii)) Therefore, DOE used 2030 as the first full year of compliance with any amended standards for consumer gas-fired instantaneous water heaters.
Table IV.10 summarizes the approach and data DOE used to derive inputs to the LCC and PBP calculations. The subsections that follow provide further discussion. Details of the spreadsheet model, and of all the inputs to the LCC and PBP analyses, are contained in chapter 8 of the final rule TSD and its appendices.
To calculate consumer product costs, DOE multiplied the total manufacturer price, which is MSPs developed in the engineering analysis plus shipping cost, by the markups described previously (along with sales taxes). DOE used different markups for baseline products and higher-efficiency products, because DOE applies an incremental markup to the increase in total manufacturer price associated with higher-efficiency products.
Examination of historical price data for certain appliances and equipment that have been subject to energy conservation standards indicates that the assumption of constant real prices may, in many cases, overestimate long-term trends in appliance and equipment prices. Economic literature and historical data suggest that the real costs of these products may in fact trend
In the experience curve method, the real cost of production is related to the cumulative production or “experience” with a manufactured product. This experience is usually measured in terms of cumulative production. As experience (production) accumulates, the cost of producing the next unit decreases. The percentage reduction in cost that occurs with each doubling of cumulative production is known as the learning rate. In typical experience curve formulations, the learning rate parameter is derived using two historical data series: cumulative production and price (or cost). DOE obtained historical PPI data for water heating equipment from 1967-1973 and 1977-2022 for all other consumer water heaters from the U.S. Bureau of Labor Statistics' (“BLS”).
From 1967 to 2002, the deflated price index for consumer gas-fired instantaneous water heaters was mostly decreasing, or staying flat. Since then, the index has risen, primarily due to rising prices of copper, aluminum, and steel products which are the major raw material used in water heating equipment. The rising prices for copper and steel products were attributed to a series of global events, from strong demand from China and other emerging economies to the recent severe delay in commodity shipping due to the COVID-19 pandemic. Given the slowdown in global economic activity in recent years and the lingering impact from the global pandemic, DOE believes that the extent to which the trends of the past five years will continue is very uncertain. DOE also assumes that any current supply chain constraints are short-lived and will not persist to the first year of compliance. Given the uncertainty regarding the magnitude and direction of potential future price trends, DOE decided to use constant prices as the default price assumption to project future consumer gas-fired instantaneous water heater prices. Thus, projected prices for the LCC and PBP analysis are equal to the 2023 values for each efficiency level in each product class. However, DOE performed a sensitivity analysis utilizing both a decreasing and an increasing price trend (see appendix 8C). The relative comparison of potential standard levels remains the same regardless of which price trend is utilized and the conclusions of the analysis do not change.
BWC requested that DOE detail its methods in utilizing price learning curves for condensing gas products, as was indicated in section IV(F)(1) of the July 2023 NOPR, so that stakeholders may review them. BWC suggested the additional components required to manufacture higher efficiency products required by this proposal, in addition to their more complex manufacturing processes, will continue to compel higher product costs than is currently expected of non-condensing gas water heaters common in the market today, economies of scale notwithstanding. (BWC No. 1164 at p. 17) The available data only allow estimation of price trends for water heaters as a group, not for different efficiency levels of water heaters. DOE agrees that the product costs of condensing gas products will continue to be higher than non-condensing gas water heaters. However, it is reasonable to expect that factors affecting water heaters as a whole, such as growing experience in production or changes in commodity prices, will affect all water heaters. Thus, for this final rule, DOE maintained that same methodology as the July 2023 NOPR and assumed the same price trend assumptions would apply to all gas-fired instantaneous water heater efficiency levels. To assess the impact of alternative price learning assumptions, DOE analyzed scenarios using low- and high-price trends in the LCC. From this sensitivity analysis, DOE finds that LCC savings for alternative price trends are similar to the reference case results and DOE would arrive at the same policy conclusion.
Responding to the July 2023 NOPR, Ecotemp stated that non-condensing tankless water heaters typically cost half the price of comparable condensing tankless water heaters. (Ecotemp, No. 1092 at p. 1) Rinnai argued that the marginal price for non-condensing to condensing gas-fired instantaneous water heater prices are too low and should be $450 rather than the $310 calculated by DOE. (Rinnai, No. 1186 at p. 24) Rinnai claimed DOE's installed cost differential of $200 between non-condensing and condensing is too low and based on data collected from installers and distributors the value is closer to $665. (Rinnai, No. 1443 at p. 19)
To investigate stakeholder concerns, DOE reviewed present-day retail prices for non-condensing and condensing models for this final rule. Overall, DOE determined that comparable non-condensing and condensing gas-fired instantaneous water heater models can retail for similar prices, with condensing models priced competitively at 1.2-1.3 times the retail price of non-condensing models. In this final rule LCC analysis, DOE estimates average retail prices of gas-fired instantaneous water heaters at condensing efficiency levels are 1.30-1.42 times that of the baseline non-condensing gas-fired instantaneous water heater corresponding to incremental retail price of $294 to $414. DOE notes that gas-fired instantaneous water heaters are marked up differently per distribution channels, as discussed in section IV.D, and that the incremental in retail prices between any given condensing and non-condensing models can be higher or lower than the reported values above. DOE's analysis calculated weighted averages taking into account both the markup associated with individual distribution channels and the probability of water heaters sold to customers through each channel. In response to Rinnai's comment on installed cost, which is the sum of retail price and installation cost, DOE estimated that the differential between non-condensing and condensing slightly lowered to between $217 and $337. This is due to average installation cost for condensing gas-fired instantaneous water heaters being slightly lower than that for non-condensing baseline.
Rheem believes that incremental retail costs between step and fully modulating designs is about 50 percent too low. (Rheem, No. 1436 at p. 3; Rheem, No. 1177 at p.12)
In response, DOE revised the manufacturer production cost for EL 4 for the final rule such that retail price estimates for max-tech designs, which incorporate fully modulating burners, have increased in this final rule analysis. The incremental retail price between step modulating burner and fully modulating burner gas-fired instantaneous water heaters, taking EL 2 and EL 4 as an example, is $106, increasing from $56 (in 2022$) in the July 2024 NODA (see section IV.C.1.c for more details).
The installation cost is the cost to the consumer of installing the consumer gas-fired instantaneous water heater, in addition to the cost of the water heater itself. The cost of installation covers all labor, overhead, and material costs associated with the replacement of an existing water heater or the installation of a water heater in a new home, as well as delivery of the new water heater, removal of the existing water heater, and any applicable permit fees. Higher-efficiency water heaters may require consumers to incur additional installation costs.
DOE's analysis of installation costs estimated specific installation costs for each sample household based on building characteristics given in RECS 2020 and CBECS 2018. For this final rule, DOE used 2023 RSMeans data for the installation cost estimates, including labor costs.
AHRI stated that replacement costs are not uniform across the country and vary by regional labor rates, building codes, and availability of skilled installers. AHRI believes that this variability should be factored in each state when assessing economic impacts. (AHRI, No. 1437 at p. 3) In response, as stated above, DOE has accounted for the regional difference in labor rates by incorporating regional labor cost factors derived from RSMeans. DOE believes that, therefore, variability in state level labor costs is factored in in its analysis.
First, DOE estimated basic installation costs that are applicable to all consumer gas-fired instantaneous water heaters, in replacement, new owner, and new home or building installations. These costs include putting in place and setting up the consumer water heater, gas piping and/or electrical hookup, permits, water piping, removal of the existing consumer water heater, and removal or disposal fees.
AGA
After accounting for the basic costs for removing the old water heater and setting up the new, DOE considered the installation costs associated with venting. Non-condensing gas-fired instantaneous water heaters are Category III appliances that operate under positive pressure. They require stainless steel vent material. Condensing gas-fired instantaneous water heaters are Category IV appliance that can be vented through a PVC, CPVC, or polypropylene vent material. In its analysis, DOE accounted for the cost for setting up the vent pipes, vent elbows, and terminations of the appropriate material and the air intake pipe for those that are direct vented (
DOE received comments after the publication of July 2023 NOPR and July 2024 NODA regarding the use of concentric vent, vent length, and outdoor installations.
In response to July 2023 NOPR, Rinnai stated the Department's estimated venting costs of $499 for non-condensing gas-fired instantaneous water heater and $263 for condensing gas-fired instantaneous water heater overstate the cost differential, if any even exists. (Rinnai, No. 1186 at p. 24) Rinnai stated that most non-condensing gas-fired instantaneous water heaters require 3″ diameter venting and not 4″ diameter venting as is used in the analysis, leading to 25 percent reduction in the cost of venting materials. Rinnai stated that more than 75 percent of non-condensing models do not use stainless steel venting and instead use concentric and aluminum venting. Rinnai stated that 20ft of venting and associated fittings used in the LCC analysis needs to be subjected to additional sensitivity analysis, including the variation in installed vent lengths, materials used, concentric versus single wall vents, and product installation location. Rinnai stated that tankless water heaters are installed typically on an outside wall, which would require far less than 20 feet of venting, and for outdoor installations, no venting would be required. (Rinnai, No. 1186 at p. 24)
In response to July 2024 NODA, Rinnai claimed that the analysis overlooks that gas-fired instantaneous water heater installation uses a different pipe installation from furnaces that is cheaper and significantly shorter than vertical venting. Rinnai stated that they account for half of sales for non-condensing gas-fired instantaneous water heater units and those units use aluminum/plastic concentric venting and have on average 1-2 feet of venting because they are mostly installed outside or on outside walls (
Rinnai claimed DOE's model makes unjustified assumptions on the gas-fired instantaneous water heater installation location. Rinnai claimed that the July 2024 NODA only estimates 12 percent of gas-fired instantaneous water heaters installed outdoors which is much lower than the value inferred from RECS 2020 which reports half of households install their water heater in an “outdoor closet, crawlspace, or outdoor”. Rinnai stated their data indicate 23 percent of gas-fired instantaneous water heaters are installed outdoors. Rinnai further stated that their data show that an additional 55 percent of gas-fired instantaneous water heater installations are likely to be located close to outside walls in order to minimize venting. (Rinnai, No. 1443 at p.18)
Rheem believed that only 20 percent of condensing units would be installed with concentric venting due to lower relative costs of plastic venting and wall/roof penetrations. Rheem estimated that up to 50 percent of non-condensing units are installed outdoors in new construction where non-condensing is more common. Rheem estimated that about 40 percent of outdoor installations use recess boxes or pipe covers (split evenly between the two). Rheem estimated that 7 percent of condensing units are installed outdoors and expects that number to rise if energy conservation standards are amended. (Rheem, No. 1436 at p. 2-3)
A.O. Smith and BWC commented that they found DOE's estimate of 50 percent of condensing gas-fired instantaneous water heaters using concentric vent to be high. BWC did not provide a percentage that they believe is reasonable. A.O. Smith commented that they would estimate only 20 percent of condensing gas-fired instantaneous water heaters use a concentric pipe. (A.O. Smith, No. 1440 at p. 6; BWC, No. 1441 at p. 3)
BWC stated that DOE underestimated the installed costs for gas-fired instantaneous water heaters in the July 2024 NODA when assuming half of these products installed outdoors, in outdoor closets, or crawlspaces, would not require venting. BWC countered that the need for venting in these install locations is not uncommon, particularly in crawlspaces, which are often located within the building envelope. BWC added that some outdoor units require use of a special vent kit, or a box that would protect product controls from inclement weather, both of which would add to the installed cost of the product. (BWC, No. 1441 at p. 3)
In response, for the July 2024 NODA, DOE made further improvements to its methodology used in the July 2023 NOPR to account for the venting costs for gas-fired instantaneous water heaters. First, DOE took into account the use of a concentric pipe (a pipe used for both air intake and venting) for some installations in its analysis, which was not previously included in the NOPR analysis. There are two main vent configurations for gas-fired instantaneous water heaters—(1) single pipe for venting with room air intake or two pipes with one for outdoor air intake and one for venting; (2) concentric pipe for both air intake and venting. DOE estimated that 90 percent of the non-condensing and 50 percent of the condensing gas-fired instantaneous water heaters that would be direct vented would use concentric pipes for the benefit of only having to make one wall penetration. Among all installations, these updates result in approximately 22 percent of condensing gas-fired instantaneous water heaters and 41 percent of non-condensing gas-fired instantaneous water heaters being installed with a concentric vent. In terms of its impact to the total installation costs, because a single concentric pipe is cheaper to install than two separate pipes (one for air intake and one for venting) this installation scenario reduced overall installation costs, particularly for non-condensing gas-fired instantaneous water heaters. Additionally, because metal venting for non-condensing water heaters is more expensive per foot than plastic venting for condensing water heaters, updates to the analysis that decrease the length of total venting required for some installations will lower the LCC savings when replacing a non-condensing gas-fired instantaneous water heater with a condensing gas-fired instantaneous water heater for these installations. For this final rule, DOE maintained the methodology used in July 2024 NODA.
Second, DOE adjusted its methodology of estimating the minimum length of the vent run in the July 2024 NODA. In the July 2023 NOPR, DOE calculated the minimum vent length based on housing configuration and installation location and estimated that the shortest route to vent a gas-fired instantaneous water heater is 3 ft. DOE conducted further research of product literature and concluded that for many installations a shorter vent run could be achieved, primarily by venting through a side wall. Therefore, DOE recalibrated its methodology and estimated that the minimum vent length can be as low as 1 ft for a certain subset of installations.
Lastly, in the July 2023 NOPR, DOE did not account for the outdoor installation of gas-fired tankless water heaters. In the July 2024 NODA, DOE utilized the location information from RECS 2020 and assumed that half of the residential households that report their water heaters being installed in an “outdoor closet, crawlspace, or outdoor” would actually install the tankless water heater on the outside of a wall without venting. Therefore, DOE estimated that among the entire sample, about 12 percent of gas-fired instantaneous water heaters are installed outdoors. For the outdoor installations, DOE assumed no venting costs but a cost for an outdoor installation conversion kit or box needed to protect the water heater from weather impacts. As with lowering the minimum vent length above, this update to the analysis reduces LCC savings when replacing a non-condensing gas-fired instantaneous water heater with a condensing gas-fired instantaneous water heater for these installations.
Rinnai asserted that the vent cost distributions used in the July 2024 NODA are skewed with the average vent cost for non-condensing units being higher than the average for condensing units. Additionally, Rinnai noted that for EL 0, the vent cost distribution has a border spread of higher costs relative to EL1-3 which have a gradual taper with more concentration in lower cost brackets. Rinnai claimed that, on average, the two types of venting installations are not significantly different, though noted that there is a small increase for non-condensing units due to the venting materials used. (Rinnai, No. 1443 at pp.15-16) Rinnai pointed to a particular simulation case in which the venting cost for EL 0 is $841 and the venting cost at higher ELs is $83 and noted that this variation is not supported by typical data and affect the accuracy of the July 2024 NODA's economic assessments. (Rinnai, No. 1443 at p. 16)
In response, the difference between the venting costs for non-condensing and condensing gas-fired instantaneous water heaters depends largely on the vent configuration (type of vent pipe and vent length). As indicated by Rinnai, the non-condensing units generally have higher installation cost because of the more expensive vent material required. For this final rule, after accounting for concentric pipes, shorter vent lengths, and outdoor installations, as elaborated above, DOE noted a decrease in the differential in installation cost between non-condensing and condensing. The installation cost for non-condensing gas-fired instantaneous water heaters is 7 percent higher than the condensing, instead of 10 percent higher compared to the July 2023 NOPR. For this final rule analysis, DOE estimated an average installation cost of $1,102 for non-condensing units and $1,025 for condensing units. Further details regarding installation cost methodology can be found in chapter 8 and appendix 8D of the final rule TSD.
PHCC commented that DOE did not mention additional installation costs for vertical vents. PHCC commented that in most vertical instances, the installation will require walls to be opened for vent removal, new vents and supports installed, and the finished surfaces replaced and it appears that DOE did not consider these costs. (PHCC, No. 1151 at p. 3) In response, DOE determined that for a fraction of
In response to July 2024 NODA, AGA
AGA
In response, DOE believes that commenters have misinterpreted documentation in July 2023 NOPR TSD and the July 2024 NODA analytical tool. As discussed above, non-condensing gas-fired instantaneous water heaters are Category III appliance that operates under positive pressure requiring stainless steel vent material. Condensing gas-fired instantaneous water heaters are Category IV appliance that can be vented through a PVC, CPVC, or polypropylene vent material. DOE did not assume the same venting for gas-fired instantaneous water heaters as for furnaces. DOE also did not assume 100 percent of non-condensing gas-fired instantaneous water heater installations to be using stainless steel vent pipe. To further clarify, for the 41 percent of non-condensing gas-fired instantaneous water heater installations that are assumed to be using a concentric pipe, DOE applied the material cost estimated based on market research of aluminum/PVC concentric pipe which is the most affordable option on the market. In its analytical tool, a conversion factor of 1.33 was applied to convert the material price data for a regular 4” stainless steel vent to that of a concentric pipe for simplicity. Note that the conversion factor changed slightly from 1.39 in July 2024 NODA because of the update from 2022$ to 2023$.
Rinnai claimed that in the July 2024 NODA, DOE ignored the replacement market where consumers already using a non-condensing gas-fired instantaneous water heaters will have no venting cost with a like-for-like replacement. (Rinnai, No. 1443 at p.18) In response, DOE believes that it is unlikely for a new gas-fired instantaneous water heater to be compatible with the old vent of a unit being replaced, even if both water heaters fall under the same vent category. According to product literature, many models recommend installation with vent pipes from a suggested list of specific brands. Even if the new non-condensing water heater is from the same manufacturer, the model is not likely to be the same since the model nomenclature, specifications and designs change every several years and therefore such installation will likely require a new venting system. Therefore, DOE did not consider the case of reusing stainless steel vent. DOE notes that even if no venting cost was associated with a like-for-like replacement of non-condensing units, given the limited market share of non-condensing gas-fired instantaneous water heaters in no-new-standards case, this assumption will not impact the economic justification reflected in the positive LCC savings at the adopted TSL.
Besides the basic installation cost for removing the old water heater and setting up the new and the venting cost associated with setting up the flue vent and air intake pipework, DOE also considered specifically for condensing gas-fired instantaneous water heaters the cost of condensate management. In order to drain condensate properly, cost items can apply based on the specifics of the installation including condensate pipe, condensate pump, condensate neutralizer, and condensate drain. DOE additionally considered cases where a heat tape is applied and cases where an electric connection setup is needed.
In response to the June 2023 NOPR, Rinnai stated that DOE excluded from its analysis of condensing gas-fired instantaneous water heaters many of the costs of condensate management including drains, pumps, neutralizers, and associated and recurring maintenance costs. (Rinnai, No. 1186 at pp. 24-25) In response to July 2024 NODA, Rinnai further claimed that the analysis underestimates the cost of condensate management and states that DOE either omits typical costs needed for condensing installations or applies them to a relatively small proportion of condensing gas-fired instantaneous water heater installations. For example, Rinnai claimed that the July 2024 NODA only applies a condensate neutralizer to 12.5 percent of installations rather than 25 percent of cases. Rinnai further requested DOE provide evidence that the default of 12.5 percent represents a survey of installations and market conditions. (Rinnai, No. 1443 at p. 17) In response, as mentioned above, DOE took into account various cost items for condensate management. DOE assumed that some cost items would apply to only a certain fraction of installation. For example, DOE assumed that condensate pipe cost is needed for both replacement and new construction installations but then only 12.5 percent of replacement installations where the household does not have a central AC or heat pump would need to be applied the cost of a condensate pump. As Rinnai pointed out, DOE assumed that 12.5 percent of all installations would be applied the cost of condensate neutralizer. DOE adopted this estimate
PHCC commented that DOE's assumption that drains are required at or near water heaters is wrong as codes do not require it. They commented that changing to an appliance that produces condensate will require a pump or drain that is near the heater because that condensate cannot drain routinely across the floor as it can create slippery surfaces, and that an installed pipe to a remote drain can be a trip hazard. PHCC commented that the cost for adding a drain should be allocated against all replacement water heaters that will produce condensate. (PHCC, No. 1151 at p. 3) In response, DOE took into consideration the cost items of setting up a condensate pump and condensate drain in its analysis. Condensate pump is usually needed when the water heater is below the closest drain or when without an immediate drain the condensate need to be pumped to a remote drain. DOE assumed that for gas-fired instantaneous water heaters, around 12.5 percent of the replacements will need to set up a new condensate pump when the households do not have installed central air conditioner or heat pump that may already be equipped with a condensate pump. Accordingly, DOE applied the cost of non-corrosive drain to those installations that require the setup of a condensate pump. On average, DOE estimated a cost of $36 for condensate management in total.
Noritz commented that the ability to replace a water heater in an emergency is an important attribute of value to consumers, and changes in installation patterns raise costs and impose other time-related constraints such as changing venting patterns, carpentry to make changes to the house, and possible electrical work to complete installation. Noritz commented that a condensing gas-fired instantaneous water heater does provide the same utility to customers, but as noted in the NOPR there are significant installation changes which would require significant cost. (Noritz, No. 1202 at pp. 1-2) DOE agrees that in emergency replacement, like-for-like equipment provides the most convenience to the consumer. However, DOE estimates that the installation of condensing equipment, including the flue venting, the condensate pipe, and pump can be accomplished as part of an emergency replacement, meaning that for emergency replacements, non-condensing equipment do not necessarily bring significant additional value.
For each sampled household and building, DOE determined the energy consumption for consumer gas-fired instantaneous water heaters at different efficiency levels using the approach described previously in section IV.E of this document.
Higher-efficiency gas-fired instantaneous water heaters reduce the operating costs for a consumer, which can lead to greater use of the water heater. A direct rebound effect occurs when a product that is made more efficient is used more intensively, such that the expected energy savings from the efficiency improvement may not fully materialize. At the same time, consumers benefit from increased utilization of products due to rebound. Although some households may increase their water heater use in response to increased efficiency, DOE does not include the rebound effect in the LCC analysis because the increased utilization of the water heater provides value to the consumer, thus it is not simply an added cost. DOE does include rebound in the NIA for a conservative estimate of national energy savings and the corresponding impact to consumer NPV. See chapter 10 of the final rule TSD for more details.
Because marginal energy price more accurately captures the incremental savings associated with a change in energy use from higher efficiency, it provides a better representation of incremental change in consumer costs than average electricity prices. Therefore, DOE applied average energy prices for the energy use of the product purchased in the no-new-standards case, and marginal energy prices for the incremental change in energy use associated with the other efficiency levels considered.
DOE derived average monthly marginal residential and commercial electricity, natural gas, and LPG prices for each state using data from EIA.
To estimate energy prices in future years, DOE multiplied the 2022 energy prices by the projection of annual average price changes for each of the 50 U.S. states and District of Columbia from the reference case in
Rinnai stated that the July 2024 NODA improperly uses national averages in its state-level analysis and failed to account for regional differences in cost and utilization. Rinnai noted that there are significant regional and state differences that directly impact water heating demands, the efficiency and operational costs of water heating. Rinnai encouraged DOE to consider state-specific data in its distribution using discrete inputs to ensure results reflect diverse conditions across the U.S. (Rinnai, No. 1443 at p. 20) In response to Rinnai's concern, DOE reiterates that, given that the hot water use was derived based on representative energy consumption data reported from RECS 2020, there is already embedded regionality accounted for in the results. For no-new-standards case efficiency distribution, for lack of more granular data, DOE did not derive a market share that varies by state. In terms of operating costs of water heating, as discussed above, DOE utilized state-level energy prices for calculating the operating
Repair costs are associated with repairing or replacing product components that have failed in an appliance; maintenance costs are associated with maintaining the operation of the product. DOE included additional maintenance and repair costs for higher efficiency consumer gas-fired instantaneous water heaters (including maintenance costs associated with condensate withdrawal and deliming of the heat exchanger and repair costs associated with burner and blower assembly) based on 2023 RSMeans data.
Rinnai and AGA
Product lifetime is the age at which an appliance is retired from service. DOE conducted an analysis of gas-fired instantaneous water heater lifetimes based on the methodology described in a journal paper.
Noritz disputed that condensing and non-condensing products have the same average lifespan based on their internal testing. Noritz argued that the less complex nature of the non-condensing product in their testing typically lasts between 10 and 20 percent longer than a similar condensing product. Noritz argued that the analysis conducted by DOE that proposes the average lifespan of the two products to be identical will impact the LCC and payback analysis. (Noritz, No. 1202 at p. 3). In response, DOE has not found any evidence in its research pointing to a significantly different lifespan for the two types of water heaters. As described in appendix 8G of the final rule TSD, the data sources cited did not indicate any systematic decrease in lifetime for gas-fired condensing products (additionally, a majority of gas-fired instantaneous water heaters in the market are condensing). For this final rule, DOE maintains its methodology of assuming the same lifetime for all gas-fired instantaneous water heaters.
In order to evaluate the impact of the lifetime on the economic analysis results, for this final rule DOE conducted a sensitivity analysis, where two additional lifetime scenarios were evaluated. The sensitivity results do not change DOE's conclusion of economic justification of the adopted standards (see appendix 8G of the final rule TSD for the comparison of results).
In the calculation of LCC, DOE applies discount rates appropriate to households to estimate the present value of future operating cost savings. DOE estimated a distribution of discount rates for consumer gas-fired instantaneous water heaters based on the opportunity cost of consumer funds.
DOE applies weighted average discount rates calculated from consumer debt and asset data, rather than marginal or implicit discount rates.
To establish residential discount rates for the LCC analysis, DOE identified all relevant household debt or asset classes in order to approximate a consumer's opportunity cost of funds related to appliance energy cost savings. It estimated the average percentage shares of the various types of debt and equity by household income group using data from the Federal Reserve Board's triennial Survey of Consumer Finances
To establish commercial discount rates for the small fraction of consumer gas-fired instantaneous water heaters installed in commercial buildings, DOE estimated the weighted-average cost of capital using data from Damodaran Online.
See chapter 8 of this final rule TSD for further details on the development of consumer and commercial discount rates.
To accurately estimate the share of consumers that would be affected by a potential energy conservation standard at a particular efficiency level, DOE's LCC analysis considered the projected distribution (market shares) of product efficiencies under the no-new-standards case (
To estimate the energy efficiency distribution of consumer gas-fired instantaneous water heaters for 2030, DOE used available shipments data by efficiency including in previous AHRI submitted historical shipment data,
The estimated market shares for the no-new-standards case for consumer gas-fired instantaneous water heaters are shown in table IV.11. See chapter 8 of the final rule TSD for further information on the derivation of the efficiency distributions.
The LCC Monte Carlo simulations draw from the efficiency distributions and assign an efficiency to the gas-fired instantaneous water heater purchased by each sample household in the no-new-standards case according to these distributions.
Finally, DOE considered the 2019 AHCS survey,
DOE acknowledges that economic factors may play a role when consumers, commercial building owners, or builders decide on what type of water heater to install. However, assignment of water heater efficiency for a given installation based solely on economic measures such as life-cycle cost or simple payback period does not fully and accurately reflect actual real-world installations. There are a number of market failures discussed in the economics literature that illustrate how purchasing decisions with respect to energy efficiency are unlikely to be perfectly correlated with energy use, as described below. While this literature is not specific to water heaters, DOE finds that the method of assignment simulates behavior in the water heater market, where market failures and other consumer preferences result in purchasing decisions not being perfectly aligned with economic interests, more realistically than relying only on apparent cost-effectiveness criteria derived from the limited information in CBECS or RECS. DOE further emphasizes that its approach does not assume that all purchasers of water heaters make economically irrational decisions (
First, consumers are motivated by more than simple financial trade-offs. There are consumers who are willing to pay a premium for more energy-efficient products because they are environmentally conscious.
The first of these market failures—the split-incentive or principal-agent problem—is likely to affect water heaters more than many other types of appliances. The principal-agent problem is a market failure that results when the consumer that purchases the equipment does not internalize all of the costs associated with operating the equipment. Instead, the user of the product, who has no control over the purchase decision, pays the operating costs. There is a high likelihood of split incentive problems in the case of rental properties where the landlord makes the choice of what water heater to install, whereas the renter is responsible for paying energy bills In the LCC sample, for gas-fired instantaneous water heaters, approximately 10 percent of households are renters. Given the greater market share of instantaneous water heaters in new construction compared to other water heater product classes, this fraction of renters is lower than the national average (which is approximately one third). For low-income households (see section IV.I of this document and chapter 11 of the final rule TSD), however, the fraction of renters increases to 38 percent of households. The principle-agent problem can also impact homeowners. For example, in new construction, builders influence the type of water heater used in many homes but do not pay operating costs. Finally, contractors install a large share of water heaters in replacement situations, and they can exert a high degree of influence over the type of water heater purchased based on which products they are familiar with.
In addition to the split-incentive problem, there are other market failures that are likely to affect the choice of water heater efficiency made by consumers. For example, emergency replacements of essential equipment such as water heaters are strongly biased toward like-for-like replacement (
Additionally, Davis and Metcalf
In part because of the way information is presented, and in part because of the way consumers process information, there is also a market failure consisting of a systematic bias in the perception of equipment energy usage, which can affect consumer choices. Attari, et al.
These market failures may affect a sizeable share of the consumer population. A study by Houde
Although consumer gas-fired instantaneous water heaters are predominantly installed in the residential sector, some are also installed in commercial buildings (6 percent of projected shipments; see chapter 9 of the final rule TSD). There are market failures relevant to consumer gas-fired instantaneous water heaters installed in commercial applications as well. It is often assumed that because commercial and industrial customers are businesses that have trained or experienced individuals making decisions regarding investments in cost-saving measures, some of the commonly observed market failures present in the general population of residential customers should not be as prevalent in a commercial setting. However, there are many characteristics of organizational structure and historic circumstance in commercial settings that can lead to underinvestment in energy efficiency.
First, a recognized problem in commercial settings is the principal-agent problem, where the building owner (or building developer) selects the equipment and the tenant (or subsequent building owner) pays for energy costs.
Second, the nature of the organizational structure and design can influence priorities for capital budgeting, resulting in choices that do not necessarily maximize profitability.
Stole, L.A., and Zwiebel, J. (1996). “Organizational design and technology choice under intrafirm bargaining,”
Takahashi, M and Asano, H (2007). “Energy Use Affected by Principal-Agent Problem in Japanese Commercial Office Space Leasing,” In
Visser, E and Harmelink, M (2007). “The Case of Energy Use in Commercial Offices in the Netherlands,” In
Bjorndalen, J. and Bugge, J. (2007). “Market Barriers Related to Commercial Office Space Leasing in Norway,” In
Schleich, J. (2009). “Barriers to energy efficiency: A comparison across the German commercial and services sector,”
Muthulingam, S., et al. (2013). “Energy Efficiency in Small and Medium-Sized Manufacturing Firms,”
Boyd, G.A., Curtis, E.M. (2014). “Evidence of an `energy management gap' in US manufacturing:
Fazzari, S.M., Hubbard, R.G., Petersen, B.C., Blinder, A.S., and Poterba, J.M. (1988). “Financing constraints and corporate investment,”
Cummins, J.G., Hassett, K.A., Hubbard, R.G., Hall, R.E., and Caballero, R.J. (1994). “A reconsideration of investment behavior using tax reforms as natural experiments,”
DeCanio, S.J., and Watkins, W.E. (1998). “Investment in energy efficiency: do the characteristics of firms matter?”
Hubbard R.G. and Kashyap A. (1992). “Internal Net Worth and the Investment Process: An Application to U.S. Agriculture,”
Third, there are asymmetric information and other potential market failures in financial markets in general, which can affect decisions by firms with regard to their choice among alternative investment options, with energy efficiency being one such option.
Jollands, N., Waide, P., Ellis, M., Onoda, T., Laustsen, J., Tanaka, K., and Meier, A. (2010). “The 25 IEA energy efficiency policy recommendations to the G8 Gleneagles Plan of Action,”
In sum, the commercial and industrial sectors face many market failures that can result in an under-investment in energy efficiency. This means that discount rates implied by hurdle rates
The existence of market failures in the residential and commercial sectors is well supported by the economics literature and by a number of case studies. Although these studies are not specifically targeted to the water heater market, they cover decision-making generally and the impact of energy efficiency, operating costs, and future savings/expenditures on those decisions, all of which apply to the purchase of a consumer gas-fired instantaneous water heater. DOE is not aware of any market failure studies specifically and narrowly focused on gas-fired instantaneous water heaters and so relies on the available literature discussed above. If DOE developed an efficiency distribution that assigned water heater efficiency in the no-new-standards case solely according to energy use or economic considerations such as life-cycle cost or payback period, the resulting distribution of efficiencies within the building sample
AGA
Rinnai asserted that installations of condensing and non-condensing units vary regionally and DOE should account for this in the model instead of using national market share for each product level and assuming an increased likelihood a consumer purchases a more efficient option based on square footage. (Rinnai, No. 1443 at p.18)
In response, DOE notes that the market share data for gas-fired instantaneous water heaters are not available at a regional or State level. Manufacturer and industry associations did not provide any regional or State-level shipments data by efficiency level to be incorporated into the analyses. There is similarly no data set DOE is aware of, nor that any stakeholder pointed to, that correlates gas-fired instantaneous water heater efficiency to household attributes or consumer demographics. DOE therefore used national-level data to estimate the market share by efficiency level for gas-fired instantaneous water heaters. However, RECS 2020 is a nationally representative survey of energy consumption and incorporates regional variation with respect to household attributes, water heater usage, water inlet temperature, and energy consumption. Therefore, the LCC analysis does include regional variation with respect to housing characteristics, sample location, labor cost (and therefore installation cost), and estimates of water heating usage. The total costs are therefore not based solely on square footage, but rather on multiple household attributes. Square footage is used to adjust the national efficiency distribution based on the observed consumer behavior that larger homes are more likely to invest in more efficient water heating equipment, as discussed above.
Rinnai objected to DOE's use of the Monte Carlo method for estimating energy savings, which Rinnai argues overstates benefits by ignoring rational consumer choice. Rinnai further stated that this error is compounded by not analyzing product switching. (Rinnai, No. 1443 at pp. 22-23)
In response, DOE notes that there are a multitude of market failures present in the water heater market that can influence the efficiency of water heater chosen by consumers in the absence of new standards, as discussed above. DOE is not ignoring rational consumer choice, rather the methodology acknowledges the range in consumer behavior present in the market, including those who make equipment choices that minimize their costs. Those consumers are indeed reflected in the analysis, along with other consumers who do not or cannot make choices that minimize their costs for a variety of reasons. With respect to switching to other types of water heaters, as discussed in greater detail in section IV.F.10 of this document, the LCC savings over a longer product lifetime, other attributes of instantaneous water heaters valued by consumers, logistical barriers to switching in some housing contexts, and marginal installed cost differences will minimize the incentives for consumers to switch to alternative water heater product classes rather than simply adopting a standards-compliant gas-fired instantaneous water heater. DOE therefore concludes that the likelihood of an adopted standard for gas-fired instantaneous water heaters driving any significant product class switching to be negligible.
AGA
In response, DOE has never stated that economic considerations never matter. This is a mischaracterization of the analysis. DOE acknowledges the full range of consumer behaviors in the water heater market and the analysis is modeled to reflect this range. As discussed below, the model produces a variety of outcomes including a significant fraction of consumers who choose an efficiency level that minimizes their life-cycle costs in the absence of new standards. These are consumers that the commenter would characterize as “reasonable” and they are reflected in the total sample. However, DOE also acknowledges that other groups of consumers exist who face a variety of market failures, preventing from choosing an efficiency level that minimizes their life-cycle costs in the absence of new standards.
DOE's focus on a limited number of variables in projecting the efficiency assignment in the no-new-standards case reflects the limits that constrain consumer decision-making. A full life-cycle analysis requires a variety of inputs, such as product prices, product energy consumption, energy prices, maintenance and repair costs, product lifetime, and discount rates. All of these figures are—by their nature—forward looking, predictive, and, therefore, subject to uncertainty. To account for uncertainty and variability in specific inputs, such as equipment lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value.
In terms of how consumers make purchase decisions in the real world, a typical consumer has neither the expertise nor the time to review information about discount rates, projected price trends, or the host of other variables included in DOE's own calculations. Instead, consumers generally rely on the appliances recommended by contractors, who typically prefer to install appliances that are in stock and with which they are familiar. That is particularly true in emergency replacement situations, such as when an appliance and a replacement must be obtained and installed quickly. Consumer decisions, therefore, do not necessarily involve an exhaustive review of all variables that may affect long-run costs, but instead primarily reflect the prevalence of existing units in the relevant market.
There are many reasons to conclude that this imperfect decision-making environment leads consumers to purchase fewer condensing gas-fired instantaneous water heaters than would be economically justified. Studies show that consumers tend to undervalue energy efficiency and that a subset appear to purchase appliances without taking into account their energy efficiency and operating costs at all.
The market failures that generally affect energy-related decisions are particularly pernicious in the context of consumer water heaters. As discussed elsewhere in this document, landlords, contractors, and developers often make the choice of what appliance to install but do not benefit from the lower operating costs associated with condensing units (or suffer from the higher utility bills associated with non-condensing units).
As courts have found, EPCA itself recognizes that consumers do not invariably select appliances that are cost-justified in the long-term, but
In promulgating EPCA (Pub. L. 94-163, 89 Stat. 871 (1975)), Congress itself expressed a view that markets are not perfect, enacting the statute to promote national “energy conservation,” including by improving the energy efficiency of certain “major appliances” and “consumer products.” (42 U.S.C. 6201(4), (5)) Congress initially established a voluntary, market-based program for achieving that goal (
The use of the efficiency assignment methodology of the gas-fired instantaneous water heater efficiency in the no-new-standards case in the LCC model is a methodological approach that reflects the full range of consumer behaviors in this market, including consumers who make informed and beneficial cost-minimizing decisions and other consumers who, due to the market failures discussed, do not or cannot make such perfectly beneficial decisions. The methodology is further constrained by shipments data by efficiency level; it must produce an overall distribution that matches the available market data. For example, for the gas-fired instantaneous water heater consumer sample at the adopted standard level (EL 2), DOE's methodology results in the following groups of consumers:
(1) Consumers who, in the absence of standards, choose a lower efficiency product with a lower life-cycle cost based on their surveyed hot water usage. These consumers are making an optimal choice from the perspective of cost savings in the model in the no-new-standards case. These are consumers who are choosing a baseline non-condensing gas-fired instantaneous water heater (EL 0) or consumers choosing a condensing gas-fired instantaneous water heater with the lowest efficiency (EL 1). With amended standards, they are made to purchase a more efficient product at EL 2 and therefore experience a net cost in the standards case. (15 percent of the gas-fired instantaneous water heater sample.) These consumers represent nearly half of all consumers choosing EL 0 in the no-new-standards case, therefore the efficiency assignment model is already assigning minimum-cost choices to this fraction of consumers in the no-new-standards case.
(2) Consumers who, in the absence of standards, choose a higher efficiency product that also lowers their life-cycle cost compared to the baseline efficiency product. These are consumers who are choosing a condensing gas-fired instantaneous water heater with higher efficiency, including at the adopted standard level (EL 2, EL 3, and EL 4). These consumers are making a cost-minimizing choice in the model in the no-new-standards case. With amended standards, these consumers are not impacted because they are already purchasing a standards-compliant product. (34 percent of the gas-fired instantaneous water heater sample.) The efficiency assignment model is already assigning minimum-cost choices to this fraction of consumers in the no-new-standards case.
(3) Consumers who, in the absence of standards, choose a lower efficiency product that does not minimize the life-cycle cost. These are consumers who are choosing a baseline non-condensing gas-fired instantaneous water heater (EL 0) or consumers choosing a condensing gas-fired instantaneous water heater with the lowest efficiency (EL 1). The market failures discussed above apply to these consumers, preventing them from making the choice that minimizes their life-cycle costs in the no-new-standards case. With amended standards, they are made to purchase a more efficient product at EL 2 that ultimately results in a lower life-cycle cost. These consumers experience a net benefit as a result of the standard. (23 percent of the gas-fired instantaneous water heater sample)
(4) Consumers who, in the absence of standards, choose a higher efficiency product that does not lower their life-cycle cost compare to the baseline or lower efficiency product. These are consumers who are choosing a condensing gas-fired instantaneous water heater with higher efficiency, including at the adopted standard level (EL 2, EL 3, and EL 4). Although these consumers are choosing a higher efficiency product in the no-new-standards case, they may have incomplete knowledge of the energy consumption of the equipment or may value environmental features such as efficiency more heavily, resulting in a choice of a higher efficiency product that does not lower life-cycle cost compared to a baseline or lower efficiency product. With amended standards, these consumers are not impacted because they are already purchasing a standards-compliant product. (29 percent of the gas-fired instantaneous water heater sample)
DOE's methodological approach is a proxy that ultimately reflects a diversity of scenarios for consumers and therefore the range of outcomes that will result from this diversity. The approach already reflects market share outcomes with some degree of market efficiency and optimal decision-making among some consumers, but the approach also acknowledges a number of factors that hinder perfect decision-making for others. Furthermore, the model produces an overall distribution of efficiency that matches the available shipments data.
Although DOE's efficiency assignment methodology does not explicitly model consumer decision making, nor does it take a stance on the rationality or irrationality of specific consumers, DOE believes that the approach would be consistent with a model in which some share of consumers make optimal cost-minimizing decisions, and some consumers—in the face of market failures—do not. The use of an assignment of gas-fired instantaneous water heater efficiency is a methodological approach that reflects the full range of consumer behaviors in this market, including consumers who make beneficial decisions that minimize their costs and consumers who, due to market failures, do not or cannot make such beneficial decisions, both of which occur in reality. Within those constraints, DOE then assigns product efficiencies to consumers in the LCC, consistent with the economics literature discussed above, to reflect neither purely rational nor purely irrational decision-making.
DOE's analytical approach reflects some degree of market efficiency. An alternative approach which assumes consumer behavior is based solely on cost outcomes, for example by ranking
As part of the assignment, some households or buildings with large water heating loads will be assigned higher-efficiency water heaters in the no-new-standards case, and some households or buildings with particularly low water heating loads will be assigned baseline water heaters—
Regarding the role of contractors, DOE notes that they can exert a high degree of influence over the type of water heater purchased. DOE acknowledges that they can serve as an information mediator. However, it is possible for a contractor to also influence the decision toward a familiar like-for-like replacement, for example, or perhaps the quickest replacement option available (
As DOE has noted, there is a complex set of behavioral factors, with sometimes opposing effects, affecting the water heater market. It is impractical to model every consumer decision incorporating all of these effects at this extreme level of granularity given the limited available data. Given these myriad factors, DOE estimates the resulting distribution of such a model would be very scattered with high variability. It is for this reason DOE utilizes a probability distribution (after accounting for market share constraints) to approximate these effects. This is the standard methodological approach used on all of DOE's prior rules. The methodology is not an assertion of economic irrationality, but instead, it is a methodological approximation of complex consumer behavior. The analysis is neither necessarily biased toward high or low energy savings. The methodology does not preferentially assign lower-efficiency gas-fired instantaneous water heaters to households in the no-new-standards case where savings from the rule would be greatest, nor does it preferentially assign lower-efficiency gas-fired instantaneous water heaters to households in the no-new-standards case where savings from the rule would be smallest. However, it is worth noting that energy use could be improperly estimated if preferences for energy efficiency are correlated with demand for hot water. Some consumers were assigned the water heaters that they would have chosen if they had engaged in perfect economic thinking. Others were assigned less-efficient water heaters even where a more-efficient water heater would eventually result in life-cycle savings, simulating scenarios where, for example, various market failures prevent consumers from realizing those savings. Still others were assigned water heaters that were more efficient than one would expect simply from life-cycle costs analysis, reflecting, say, “green” behavior, whereby consumers ascribe independent value to minimizing harm to the environment.
DOE cites the available economic literature of which it is aware on this subject, supporting the existence of the various market failures in other appliance markets which would give rise to such a distribution, and has requested more data or studies on this topic in the May 2020 RFI, March 2022 preliminary analysis, and July 2023 NOPR. DOE is not aware of any specific study regarding how consumer water heaters (and their efficiency) are purchased.
DOE acknowledges that in the LCC, there are a handful of outcomes with large benefits as a consequence of the assignment methodology. Nevertheless, the median results (instead of the average results) from the LCC continue to show positive LCC savings at the adopted standard levels. However, for gas-fired instantaneous water heaters, DOE considered a sensitivity analysis that eliminated these outcomes with large benefits. Under certain combinations of parameters, particularly in new construction, the total installed cost of a condensing, higher efficiency gas-fired instantaneous water heater can be lower than a non-condensing baseline gas-fired instantaneous water heater (due to the differing vent lengths and material costs). With assignment methodology used by DOE (and the constraints of the market data by efficiency level), there are a handful of individual gas-fired instantaneous water heater LCC consumers assigned a baseline non-condensing gas-fired instantaneous water heater even though a higher efficiency product would cost less. This is a rare outcome and only occurs for approximately 2.5 percent of the sample. In the sensitivity analysis, DOE removed these outlier consumers from the analysis in case they may be overly biasing the overall results. This sensitivity scenario therefore eliminates any instance of a consumer assigned EL 0 even though EL 2 would cost less to install. The resulting average LCC savings are reduced to $87 across the rest of the entire gas-fired instantaneous water heater consumer sample, with 15 percent of consumers experiencing a net cost, 20 percent experiencing a net savings, and 65 percent of consumers not impacted by the rule. Although the average LCC savings are reduced in this sensitivity analysis, and slightly more consumers are negatively impacted by the adopted standards, the average (and median) LCC savings remain positive and there continue to be significant energy and environment savings. DOE continues to conclude that the adopted standard level for gas-fired instantaneous water heaters is economically justified even in this sensitivity analysis that eliminates outlier results.
In summary, DOE's efficiency assignment methodology produces overall results that are consistent with the observed distribution of efficiency across products as seen in the shipments data. The methodology also results in a share of consumers being assigned product efficiencies that minimize their life-cycle costs in the absence of standards. This represents consumers making informed decisions regarding the efficiency of their products, without amended standards. These consumers will be negatively impacted by the adopted standard levels and the analysis accounts for these impacts. However, the methodology also acknowledges that some consumers are unable to minimize the life-cycle costs of their products for a variety of reasons discussed in the economics literature (
The payback period is the amount of time (expressed in years) it takes the consumer to recover the additional installed cost of more-efficient products, compared to baseline products, through energy cost savings. Payback periods that exceed the life of the product mean that the increased total installed cost is not recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the change in total installed cost of the product and the change in the first-year annual operating expenditures relative to the baseline. DOE refers to this as a “simple PBP” because it does not consider changes over time in operating cost savings. The PBP calculation uses the same inputs as the LCC analysis when deriving first-year operating costs.
As noted previously, EPCA establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency level, DOE determined the value of the first year's energy savings by calculating the energy savings in accordance with the applicable DOE test procedure, and multiplying those savings by the average energy price projection for the year in which compliance with the amended standards would be required.
For the preliminary analysis, DOE did not account for product switching under potential standards. For the July 2023 NOPR and this final rule, DOE maintained the same approach and did not include any product switching with respect to gas-fired instantaneous water heaters in its analysis. DOE assumes that any product switching as a result of the adopted standards is likely to be minimal.
As discussed in the specific examples in the following paragraphs and in section 9.4 of the final rule TSD, the costs to switch to another product class can be higher than simply purchasing a standards-compliant product in the same product class. When faced with the need to replace a gas-fired instantaneous water, a consumer can either install a standards-compliant product of the same product class as they originally had, or consider a switch to a standards-compliant product of an alternative product class. Similarly, when faced with the need to install a consumer water heater in new construction, the consumer can choose from available standards-compliant products across various product classes. As part of considering which water heater to purchase, consumers look at the first cost, the installation cost, expected energy savings, and the amenities provided by the water heaters such as the location within the residence and the amount of hot water the water heater could deliver.
In consumer hot water heater replacement scenarios, shipments data demonstrate purchasers mostly replace their existing water heater with the same product class when purchase price is similar (
DOE compared the costs of a consumer switching from a baseline non-condensing gas-fired instantaneous water heater to three potential replacement options (standards-compliant gas-fired instantaneous water heater, baseline gas-fired storage water heater under the recently updated standard, and baseline electric storage water heater under the recently updated standard), in both residential new construction and replacement scenarios for existing households. In the new construction scenario, the analysis shows that average total installed costs are typically lowest for a standards-compliant gas-fired instantaneous water heater. In the replacement scenario, the factors considered in DOE's analysis show that average total installed costs are lower in some cases and marginally higher in others. However, switching to an alternative option also involves several additional costs to accommodate the alternative water heater, including new venting, electrical upgrades, and potential relocation of the water heater. Accordingly, even if, for a given household, a potential replacement option other than a standards-compliant gas-fired instantaneous water heater is cheaper to install, DOE expects that other factors will limit consumer incentives for product switching: logistical barriers arising from different physical and space requirements as described below, the greater LCC savings of a gas-fired instantaneous water heater, the longer lifetime of a gas-fired instantaneous water heater, and consumer preferences for instantaneous water heater attributes such as limitless hot water supply. DOE notes many consumers have already switched from a gas-fired storage to a gas-fired instantaneous water heater despite the high costs of doing so (to replace all the venting and potentially relocate the water heater), and does not expect this trend to reverse as a result of the amended standards.
In the hypothetical case of a consumer switching from a gas-fired instantaneous water heater to an electric storage water heater when replacing a water heater in an existing household, there are likely additional installation costs necessary to add an electrical connection since this type of water heater typically requires high wattage. These are costs above and beyond the normal equipment and installation costs. In some cases, it may be possible to install a 120-volt heat pump storage water heater with minimal additional installation costs, particularly if there is a standard electrical outlet nearby already. In most
In the hypothetical case of a consumer switching from a gas-fired instantaneous water heater to a gas-fired storage water heater when replacing a water heater in an existing household, there are additional installation costs necessary as well. The vast majority of gas-fired storage water heaters (“GSWHs”) utilize non-condensing technology that utilizes Category I type B metal vent material, whereas gas-fired instantaneous water heaters require Category III or Category IV venting material, depending on the existing efficiency level. Regarding existing non-condensing gas-fired instantaneous water heaters, A.O. Smith and Rinnai noted that these utilize Category III venting (A.O. Smith, No. 1182 at p. 15; Rinnai, No. 1443 at p. 12). Condensing gas-fired instantaneous water heaters require Category IV venting. Switching from a gas-fired instantaneous water heater to a baseline GSWH would therefore require replacing the venting regardless of the existing efficiency of the gas-fired instantaneous water heater. Replacing the venting system would result in significant additional installation costs if a consumer opted to switch to a GSWH. The most comparable cost for this scenario is the average cost to install a GSWH in new construction ($2,095),
Furthermore, the average lifetime of a gas-fired instantaneous water heater is approximately 20 years, compared to approximately 14.5 years for GSWHs, which results in a total annualized cost of ownership for instantaneous water heaters that is even lower compared to GSWHs. Instantaneous water heaters also provide differing utility to consumers (
As a result of all the cost and other considerations above, DOE estimates that it is highly unlikely that consumers would switch from gas-fired instantaneous water heaters to GSWHs when needing to replace their existing water heater, specifically as a result of the incremental costs of an energy conservation standard, particularly in the case of an emergency replacement.
Even if some small subset of existing gas-fired instantaneous water heater consumers opt to switch to GSWHs instead of replacing their gas-fired instantaneous water heaters with a more efficient unit as a result of the adopted standards, despite the additional costs in doing so, those consumers would still need to switch to a more efficient
In new construction, the average total installed costs are different because new venting is always required if installed indoors, however the location of the water heater can be optimized to limit those venting costs for gas-fired instantaneous water heaters. Water heaters can also be installed outdoors in some cases. In today's market, the total installed cost of a gas-fired instantaneous water heater in new construction is typically less than a GSWH, a factor in the increasing market share of gas-fired instantaneous water heaters seen in recent historical shipments (as described in section IV.G) and projected in the no-new-standards case. With newly adopted standards for both GSWHs and gas-fired instantaneous water heaters, the average total installed cost (including all venting) of a minimally standards-compliant GSWH in residential new construction is $2,095,
In existing installations of GSWHs, there are significant costs to switch from a GSWH to a gas-fired instantaneous water heater, since new venting is required. In today's market, however, some consumers are electing to make that switch despite the extra costs, because instantaneous water heaters have certain attributes that consumers value (
Even if a small subset of existing GSWH consumers, who would have switched to gas-fired instantaneous water heaters in the no-new-standards case, instead remain with GSWHs as a result of the adopted standards, the adopted rule for gas-fired instantaneous water heaters will still result in significant energy savings even though the overall energy savings might be incrementally lower than estimated in this final rule analysis. In this hypothetical scenario, even if the market growth of gas-fired instantaneous water heaters slows down and more consumers remain with GSWHs, there are still energy and LCC savings for gas-fired instantaneous water heaters, the rule as a whole saves a significant amount of energy, and therefore the conclusion of economic justification remains unchanged.
DOE received comments from stakeholders who were concerned that, if DOE were to adopt more stringent standards for gas-fired instantaneous water heaters compared to the standards adopted for gas-fired storage water heaters, consumers would opt for gas-fired storage water heaters instead of gas-fired instantaneous water heaters, which could have negative impacts to the outcome of this rulemaking.
TPPF stated that consumers recognize the differences between condensing and non-condensing products, which leads consumers to purchase products at different price points. Because condensing products are more expensive, TPPF stated, consumers will instead opt for non-condensing gas-fired storage water heaters, and these economic tradeoffs illustrate that condensing and non-condensing water heaters are not interchangeable. (TPPF, No. 1153 at pp. 3-4)
Rinnai stated their expectation that most would-be consumers of non-condensing tankless water heaters would instead purchase less efficient
The Attorney General of GA commented that condensing and non-condensing gas-fired tankless water heaters are highly efficient and reduce standby heat loss as compared to traditional storage-type units. The Attorney General of GA commented that both types (condensing and non-condensing) of tankless water heaters require less energy and have higher lifespans than units with tanks, and both types currently satisfy DOE's minimum efficiency requirement. (Attorney General of GA, No. 1026 at p. 1) In response to the July 2024 NODA, Commenters from the U.S. House of Representatives claimed that the “unique design” of non-condensing gas-fired instantaneous water heaters yields a longer appliance life-cycle by heating water only on demand, limiting exposure to corrosive elements. (U.S. House of Representatives, No. 1445 at p. 1)
DOE agrees with the commenters that instantaneous water heaters are different from storage water heaters because they heat water on demand; however, this ability is not unique to non-condensing gas-fired products. “Tankless” models are instantaneous water heaters with very little storage volume. They are equipped with sensors that activate the heating process based on water flow to produce hot water on demand. Endless hot water is a feature that is valued by some consumers, as indicated by the recent increasing market share of gas-fired instantaneous water heaters. Furthermore, DOE's analysis shows that gas-fired instantaneous water heaters can have longer lifetimes than gas-fired storage water heaters. The estimated average lifetime for a gas-fired instantaneous water heater is about 20 years, whereas gas-fired storage water heaters operate for about 14 to 15 years. This is one reason why there has been a historical trend of increasing shipments of gas-fired instantaneous water heaters—both non-condensing and condensing—and why it is reasonable to expect consumers to continue opting for gas-fired instantaneous water heaters in a scenario where standards are set at a condensing efficiency level.
Rinnai noted that the efficiency levels for gas-fired instantaneous water heaters proposed in the July 2023 NOPR represent a much larger increase from existing standards than the proposed efficiency levels for gas-fired storage water heaters. (Rinnai, No. 1186 at pp. 6-7) Commenters from the U.S. House of Representatives expressed concern that the efficiency level for the proposed standards for gas-fired storage water heaters are less stringent than the efficiency level proposed for gas tankless water heaters. Commenters from the U.S. House of Representatives asserted that this efficiency difference would restrict consumer choice and increase prices. (U.S. House of Representatives, No. 1025 at pp. 1-2) Commenters from the U.S. House of Representatives reiterated these concerns in response to the July 2024 NODA, claiming that the proposed standards would eliminate non-condensing gas-fired instantaneous water heaters from the market. The U.S. House of Representatives stated that the proposed standards would leave condensing gas-fired instantaneous water heaters, which are significantly more expensive, and gas-fired storage water heaters, which have significantly higher emissions profiles, on the market. (U.S. House of Representatives, No. 1445 at p. 1) Commenters from the U.S. House of Representatives claimed that the proposed standards would harm consumers who rely on the size, cost, and flexibility of gas-fired instantaneous water heaters. (U.S. House of Representatives, No. 1445 at p. 1)
CNGC urged DOE to reconsider the implications on both consumers and manufacturers, stating that if efficiency standards exceed 91 percent, it becomes technologically infeasible to produce non-condensing gas-fired tankless water heaters at their current affordable price, leaving consumers to choose less-efficient storage water heaters and undermine environmental goals. (CNGC, No. 648 at p. 1) CHPK and Huntsville Utilities also stated that the unattainable energy efficiency requirements for gas-fired instantaneous water heaters utilizing non-condensing technology would discourage consumers from investing in tankless models, and instead they would purchase less-efficient water heaters. (CHPK, No. 1008 at pp. 1-2; Huntsville Utilities, No. 1176 at p. 1) The Attorney General of GA commented that the proposed standards are feasible only for condensing units and would make tankless water heaters unaffordable for many consumers. The Attorney General of GA added that the proposed rulemaking will effectively eliminate non-condensing gas-fired tankless water heaters and leave consumers with a choice between less-efficient storage water heaters, or more expensive condensing tankless water heaters, and suggested that if consumers are incentivized to purchase inefficient storage water heaters, the rule will violate DOE's requirement that any new or amended standards must result in a significant conservation of energy. (Attorney General of GA, No. 1026 at pp. 1-2)
DOE recognizes that total installed cost is a significant factor in consumer decision-making when purchasing a new water heater. In this final rule, DOE has incorporated specific feedback from stakeholders to improve its life-cycle cost analysis with respect to installation cost estimates. As discussed above, DOE concludes that, based on costs, consumers who already have gas-fired instantaneous water heaters would not switch to a gas-fired storage water heater when making a replacement. Secondly, in new construction, installing a gas-fired instantaneous water heater is still less expensive on average than installing a gas-fired storage water heater with the adoption of amended standards. Thirdly, consumers switching from gas-fired storage water heaters to gas-fired instantaneous water heaters in the no-new-standards case will require a change to the venting configuration regardless of whether the gas-fired instantaneous water heater is non-condensing or condensing. The choice to switch from a storage water heater to an instantaneous water heater in the no-new-standards case is influenced by other factors beyond just cost. Based on its assessments of total installed costs in the life-cycle cost analysis, DOE has determined that it is unlikely for consumers to stop switching from gas-fired storage water heaters to gas-fired instantaneous water heaters only as a result of the adopted rule. Even if that premise was true, where a fraction of consumers in the amended standards case, as compared to the no-new-standards case, opted to stay with storage water heaters instead of switching to instantaneous water heaters, DOE would still find economic justification with the adopted rule. A majority of consumers would have to
The Attorney General of TN commented that the proposed rulemaking does not consider the loss of consumer utility that could occur from the implementation of these standards, particularly consumers' needs for different types of water heaters (
In the July 2023 NOPR, DOE explained why non-condensing versus condensing gas-fired appliances do not constitute a consumer utility for which the Department can justify separate standards. 88 FR 49058, 49079. This determination is discussed further in section IV.A.1 of this document.
NPGA, APGA, AGA, and Rinnai stated that DOE misunderstands the consumer water heater market due to its claim that consumers do not make decisions based on rational economic terms, but conceded that many water heater decisions are made in emergencies where price and immediate availability are the strongest factors in decision-making. According to NPGA, APGA, AGA, and Rinnai, DOE rejects the idea that consumers would switch products across various product classes and does not evaluate associated market shifts, and by failing to understand that by limiting or eliminating the market for non-condensing instantaneous water heaters, consumers may choose to switch to a non-condensing gas-fired storage water heaters, resulting in a lower UEF and enhanced emissions from their water heater and has not accounted for installation costs of this potential product class switch. (NPGA, APGA, AGA, and Rinnai, No. 441 at p. 3)
In response, DOE notes that its assessment is based on the comparison of total installed costs needed to switch from product class to product class, as noted above. The total costs to switch product classes in response to an amended standard are higher than simply purchasing a compliant product in the same product class. Therefore, DOE estimates no switching in response to an amended standard as a result of incremental costs. DOE does not reject the idea that this may happen in the no-new-standards case for reasons other than just total cost. Indeed, the shipments projection accounts for recent market trends that show growing consumer demand for gas-fired instantaneous water heaters compared to GSWHs. Consumers are valuing instantaneous water heater features beyond just cost. DOE estimates that this trend will not substantively change in the standards case, given that cost comparison between GSWHs and gas-fired instantaneous water heaters is similar, whether at baseline ELs or at the adopted ELs.
Commenting on the July 2023 NOPR, Ecotemp commented that product switching, from tankless to tank water heaters is likely to happen as a result of this rule and DOE not modeling that possibility is missing a huge consumer base doing exactly that. (Ecotemp, No. 1092 at p. 2) NMHC and NAA stated that DOE fails to properly evaluate the impacts of market unavailability that forces product switching with the example of the elimination of non-condensing tankless water heaters from the proposed standard potentially requiring a non-condensing gas storage water heater over a traditional replacement of non-condensing tankless water heaters, and the 25 percent drop in efficiency associated with these products. NMHC and NAA stated that this rule will result in greater use of electric water heaters in replacement of existing gas water heaters which will require more interconnectivity, changes to power systems, and upgrades to electrical infrastructure. (NMHC and NAA, No. 996 at p. 5)
In response, DOE notes that existing market trends are incorporated into the shipments analysis and projection. To the extent that some product classes are becoming more prevalent in certain types of buildings, that is reflected in the no-new-standards case shipments projection. With respect to switching from a tankless to storage tank water heater, as summarized above, DOE determines that minimal switching would happen to either a gas-fired storage or electric storage water heater. As DOE has discussed above, the costs to switch product classes in response to amended standards are larger than simply purchasing standards-compliant products within the same product classes. Therefore, DOE estimates that no additional switching will occur beyond existing market trends.
Atmos Energy argued that because the cost to fuel switch is high, DOE fails to “acknowledge the equally prohibitive costs that will be associated with high efficiency gas appliances as a result of this proposal and the lack of gas-fired replacements in the market.” (Atmos Energy, No. 1183 at p. 6). Rinnai argued that DOE has failed to take into account substitution effects in replacement markets, especially in regards to non-condensing gas-fired instantaneous water heater. Rinnai argued that in particular the lack of consideration of non-condensing gas-fired instantaneous water heater to gas storage water heater (due to lack of condensing gas-fired instantaneous water heater option) is not being represented. (Rinnai, No. 1186 at pp. 30-31) As discussed above, DOE estimates that switching away from gas-fired instantaneous water heaters as a result of the rule is likely to be negligible, due to the high installation costs of such switching, (costs that are acknowledged to be high by Atmos Energy in their comment). DOE finds no evidence that there would be a lack of condensing gas-fired instantaneous water heater models available in the standards case for replacements. Many such models for gas-fired instantaneous water heaters are currently available on the market by multiple manufacturers. See chapter 8 and appendix 8D of the final rule TSD for detailed description of the installation costs.
Rinnai stated that the July 2024 NODA declares that no consumers would switch between product categories, including to gas storage water heaters, an assumption that Rinnai stated would contradict historic market data and evidence of consumer purchasing behavior. According to Rinnai, gas tankless water heaters are taking market share from gas tank sales, with GSWH sales declining at the same time gas-fired instantaneous water heater sales have increased. Rinnai speculated that this may be due to consumer purchasing decisions due to the increased cost to purchase and install gas-fired instantaneous water heater. Rinnai also note that by removing non-condensing gas-fired instantaneous water heater options, consumers may be less inclined to replace an existing GWSH with an even more expensive condensing gas-fired instantaneous water heater unit. Rinnai stated that DOE's position that consumers purchasing gas tankless water heaters will never consider buying a gas tank in contrary to observable market behavior. (Rinnai, No. 1443, at p. 2 and pp. 5-8)
In contrast, the Joint Advocates supported DOE's conclusion that the proposed standards for gas-fired instantaneous water heaters would not
A.O. Smith agreed with DOE's conclusion that condensing standards for gas-instantaneous water heaters would not shift shipments away from tankless products due to significant cost for changing venting system. The commenter also noted that approximately 65 percent of shipments are already condensing products and it suggests that consumers are already voluntarily opting for condensing tankless products despite their higher initial costs over non-condensing tankless products. (A.O. Smith, No. 1440 at p. 6)
In response, DOE acknowledges that historic and present-day market trends show an increasing demand for gas-fired instantaneous water heaters over GSWHs. This overall trend is incorporated into the shipments analysis and shipment projections, as discussed in section IV.G of this document. However, this market dynamic is occurring in the absence of any new energy conservation standard for gas-fired instantaneous water heaters. In new construction, instantaneous water heaters are becoming popular in large part because the total installed cost of a gas-fired instantaneous water heater is, on average, similar to or less than a GSWH, since new venting is required in either case and the venting length can be very short for gas-fired instantaneous water heaters. Even with the adopted standard level, gas-fired instantaneous water heaters will continue to be similar to or less expensive to install in new construction, on average, and therefore the standard is highly unlikely to cause significant product switching to GSWHs. Furthermore, instantaneous water heaters also provide differing utility to consumers (
Rinnai stated that the Department has proposed new minimum efficiency standards for twelve separate categories of consumer gas-fired instantaneous water heaters but the Department provided only one life-cycle-cost analysis for them. (Rinnai, No. 1186 at p. 34)
In response, DOE clarifies that for two types of gas-fired instantaneous water heaters (and each of their four their associated draw patterns), DOE is only updating the rating metric to the UEF descriptor and the adopted standards do not constitute an increase in stringency. This applies to 8 of the 12 categories the commenter identified. For gas-fired instantaneous water heaters with less than 2 gallons of effective storage volume and rated inputs greater than 50,000 Btu/h, DOE conducted an analysis, as presented in this final rule, to determine whether amended UEF standards would be appropriate and justified. Two of the four draw patterns have no products and no market share in today's market and thus there is no analysis to conduct. For the remaining two draw patterns (medium and high draw), they are fully analyzed as part of DOE's rulemaking analysis and incorporated into the LCC consumer sample. DOE assigned a draw pattern to the sampled household or building based on the market split of two draw patterns. The analytical results are a weighted average representing the economic impact to the market as a whole combing the two draw patterns. Additionally, the published analytical results spreadsheet contains the breakdown of the results by draw patterns.
Commenting on the July 2023 NOPR, Rinnai argued that the density distribution of its LCC analysis for gas-fired instantaneous water heaters shows heavily skewed distributions which can be attributed to high impact outliers. Rinnai argued that because the mean is being used to determine feasibility, it moves the LCC results away from its central tendencies and typical savings/costs for consumers. Rinnai argued that DOE should do a sensitivity analysis on gas-fired instantaneous water heater to defend the impact of the proposal. (Rinnai, No. 1186 at p. 21) Rinnai argued that small changes in estimates of installation costs or maintenance costs for condensing gas-fired instantaneous water heaters could result in negative average LCC savings. Rinnai argued this sensitivity warrants not enacting the standard for gas-fired instantaneous water heaters. (Rinnai, No. 1186 at p. 22)
Rinnai noted that the LCC probability distribution contains a long tail with many consumers experiencing higher LCC values than the average value. Rinnai suggested that DOE should produce results using “different averaging” to better understand the impact of different data populations. Rinnai stated that DOE should consider the distribution in consumer trade-offs between upfront costs and long-term savings, as well as the overall costs that many consumers will face across different scenarios, to provide more accurate insights on consumer behavior, purchasing decisions, and impacts on cost savings and energy savings. (Rinnai, No. 1443 at pp. 20-21) In response, DOE clarifies that it uses probability distributions for a number of input variables that are reasonably expected to exhibit natural variation and diversity in practice (
DOE develops probabilities for as many inputs to the LCC analysis as possible, to reflect the distribution of impacts as comprehensively as possible. For example, DOE develops probabilities for building sampling, installation costs, lifetime, discount rate, and efficiency distribution, among other inputs. If there are insufficient data with respect to a specific input parameter to create a robust probability distribution, DOE will utilize a single input parameter. Such approach is neither arbitrary nor capricious; it is informed by the available data.
The installation and maintenance cost estimates are the result of a significant research and cite multiple sources, as discussed at length in section IV.F.2 and appendix 8D of the final rule TSD. DOE has incorporated feedback from various stakeholders and revised those costs for this final rule. There is no basis to expect installation costs are under- or overestimated and therefore creating sensitivity scenarios based on hypothetical adjustments to those costs is unwarranted.
As discussed in section IV.F.8, DOE also conducted a sensitivity analysis for gas-fired instantaneous water heaters in which certain positive outlier outcomes were replaced. While the average (and median) LCC savings are reduced in this sensitivity analysis, they are still positive.
DOE provides stakeholders with the opportunity to provide accurate data to represent a breadth of operating conditions, prices, and use cases. In the absence of stakeholder provided information, DOE makes a good-faith effort to collect reliable data from various sources and summarize assumptions on the missing parameters. The Monte Carlo simulation and its large number of samples (10,000 for each product class) ensures that the results converge to a representative average. For some inputs whose uncertainty is not well characterized, such as future equipment prices or economic growth conditions, DOE performed a series of sensitivity analyses to ensure that the results of the analysis are not strongly dependent on those inputs and that the conclusions of the analysis remain the same. As a result, DOE's conclusion of economic justification is robust to a broad range of sensitivity scenarios which capture the uncertainty inherent in economic projections.
Rinnai claimed that the LCC savings at the EL 2 in the July 2024 NODA are minimal (approximately $5 a year), while imposing substantial costs on a large percentage of consumers. Rinnai claimed that the July 2024 NODA results are based on flawed and inaccurate data and assumptions and Rinnai's analysis shows the LCC savings would be negative at the proposed EL if DOE adjusted venting installation costs. (Rinnai, No. 1443 at pp.10, 18-19 and 25) In response, DOE has individually responded to Rinnai's specific comments to the venting installation cost methodology in section IV.F.2. DOE reviewed the analytical method for this final rule and based on the results the LCC savings are still in support of the proposed efficiency level.
DOE uses projections of annual product shipments to calculate the national impacts of potential amended or new energy conservation standards on energy use, NPV, and future manufacturer cash flows.
DOE developed shipment projections based on historical data and an analysis of key market drivers for each product. DOE estimated consumer gas-fired instantaneous water heater shipments by projecting shipments in three market segments: (1) replacement of existing consumer gas-fired instantaneous water heaters; (2) new housing; and (3) new owners in buildings that did not previously have a consumer gas-fired instantaneous water heater or existing gas-fired instantaneous water heater owners that are adding an additional consumer gas-fired instantaneous water heater.
To project gas-fired instantaneous water heater replacement shipments, DOE developed retirement functions from gas-fired instantaneous water heater lifetime estimates and applied them to the existing products in the housing stock, which are tracked by vintage. DOE calculated replacement shipments using historical shipments and lifetime estimates. Annual historical shipments sources are: (1) AHRI data submittals;
To project shipments to the new housing market, DOE used the
DOE estimated shipments to the new owners' market based on residual shipments from the calculated replacement and new construction shipments compared to historical shipments in the last 5 years (2018-
For the preliminary analysis and July 2023 NOPR, assumptions regarding future policies encouraging electrification of households and electric water heating were speculative at that time, so such policies were not incorporated into the shipments projection.
DOE acknowledges, however, that ongoing electrification policies at the Federal, State, and local levels are likely to encourage installation of electric water heaters in new homes and adoption of electric water heaters in homes that currently use gas-fired water heaters. For example, the Inflation Reduction Act includes incentives for heat pump water heaters and electrical panel upgrades. However, there are many uncertainties about the timing and impact of these policies that make it difficult to fully account for their likely impact on gas and electric water heater market shares in the time frame for this analysis (
DOE does not estimate that a significant market shift away from instantaneous water heaters would occur, given that the relative comparison of prices between gas-fired instantaneous and storage water heaters will remain similar. See section IV.F.10 for a detailed discussion.
DOE estimated a fraction of consumer gas-fired instantaneous water heater replacement installations that choose to repair their equipment, rather than replace their equipment in the new standards case. The approach captures not only a decrease in consumer gas-fired instantaneous water heater replacement shipments, but also the energy use from continuing to use the existing consumer gas-fired instantaneous water heater and the cost of the repair. DOE assumes that the demand for water heating is inelastic and, therefore, that no household or commercial building will forgo either repairing or replacing their equipment (either with a new consumer gas-fired instantaneous water heater or a suitable water heating alternative).
For details on DOE's shipments analysis and the repair option, see chapter 9 of the final rule TSD.
The NIA assesses the national energy savings (“NES”) and the NPV from a national perspective of total consumer costs and savings that would be expected to result from new or amended standards at specific efficiency levels.
DOE evaluates the impacts of new or amended standards by comparing a case without such standards with standards-case projections. The no-new-standards case characterizes energy use and consumer costs for each product class in the absence of new or amended energy conservation standards. For this projection, DOE considers historical trends in efficiency and various forces that are likely to affect the mix of efficiencies over time. DOE compares the no-new-standards case with projections characterizing the market for each product class if DOE adopted new or amended standards at specific energy efficiency levels (
DOE uses a spreadsheet model to calculate the energy savings and the national consumer costs and savings from each TSL. Interested parties can review DOE's analyses by changing various input quantities within the spreadsheet. The NIA spreadsheet model uses typical values (as opposed to probability distributions) as inputs.
Table IV.12 summarizes the inputs and methods DOE used for the NIA analysis for the final rule. Discussion of these inputs and methods follows the table. See chapter 10 of the final rule TSD for further details.
A key component of the NIA is the trend in energy efficiency projected for the no-new-standards case and each of the standards cases. Section IV.F.8 of this document describes how DOE developed an energy efficiency distribution for the no-new-standards case (which yields a shipment-weighted average efficiency) for the year of anticipated compliance with an amended standard. To project the trend in efficiency absent amended standards for consumer gas-fired instantaneous water heaters over the entire shipments projection period, DOE used available historical shipments data and manufacturer input. The approach is further described in chapter 10 of the final rule TSD.
For the standards cases, DOE used a “roll-up” scenario to establish the shipment-weighted efficiency for the year that standards are assumed to become effective (2030). In this scenario, the market shares of products in the no-new-standards case that do not meet the standard under consideration would “roll up” to meet the new standard level, and the market share of products above the standard would remain unchanged.
To develop standards case efficiency trends after 2030, DOE used historical shipment data and current consumer gas-fired instantaneous water heater model availability by efficiency level (see chapter 8). DOE estimated growth in shipment-weighted efficiency by assuming that the implementation of ENERGY STAR's performance criteria and other incentives would gradually increase the market shares of higher efficiency water heaters. Using historical BRG shipments data and ENERGY STAR criteria, DOE estimated the annual increase in market share for condensing units between 2015—2022 and assumed the increasing trend would continue would continue over the shipments projection period. DOE notes that at present, most gas-fired instantaneous water heater models already achieve EL 2 or higher.
The national energy savings analysis involves a comparison of national energy consumption of the considered products between each potential standards case (“TSL”) and the case with no new or amended energy conservation standards. DOE calculated the national energy consumption by multiplying the number of units (stock) of each product (by vintage or age) by the unit energy consumption (also by vintage). DOE calculated annual NES based on the difference in national energy consumption for the no-new-standards case and for each higher efficiency standard case. DOE estimated energy consumption and savings based on site energy and converted the electricity consumption and savings to primary energy (
Use of higher-efficiency products is sometimes associated with a direct rebound effect, which refers to an increase in utilization of the product due to the increase in efficiency. DOE examined a 2009 review of empirical estimates of the rebound effect for various energy-using products.
In 2011, in response to the recommendations of a committee on “Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency Standards” appointed by the National Academy of Sciences, DOE announced its intention to use FFC measures of energy use and greenhouse gas and other emissions in the national impact analyses and emissions analyses included in future energy conservation standards rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the approaches discussed in the August 18, 2011 notice, DOE published a statement of amended policy in which DOE explained its determination that EIA's National Energy Modeling System (“NEMS”) is the most appropriate tool for its FFC analysis and its intention to use NEMS for that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, multi-sector, partial equilibrium model of the U.S. energy sector
Rinnai claimed that DOE has not adequately explained how national energy savings at the proposed level increased to 0.52 quads in the July 2024 NODA from 0.4 quads in the NOPR. (Rinnai, No. 1443 at p. 8)
For the July 2023 NOPR, DOE incorporated RECS 2015 as the basis of the building sample development and energy use determination, while for July 2024 NODA, DOE incorporated RECS 2020 as the basis of the building sample development and energy use determination and updated the analyses accordingly (see section IV.E of this document). The updated RECS includes a much larger sample size and higher water usage and energy consumption estimates on average for consumer gas-fired instantaneous water heaters. Using RECS 2020 for the sample development and energy use determination therefore results in larger differences in annual energy consumption between higher efficiency levels and lower efficiency levels. Because the estimates of national energy savings are based on the differences in annual energy consumption between higher efficiency levels and lower efficiency levels, the estimated national primary energy savings increased from approximately 0.45 quads to approximately 0.52 quads. Rinnai claims the national energy savings and associated emission reductions are overstated because DOE did not properly account for consumers switching to gas-fired storage water heaters as a response to the standard which would increase overall energy consumption of water heaters. Rinnai projects that an additional savings of 0.61 quads and reductions of 39 million metric tons in CO
DOE estimates that it is highly unlikely that consumers would switch from gas-fired instantaneous water heaters to gas-fired storage water heaters specifically as a result of the incremental costs of an energy conservation standard because the differential costs between the two products will remain similar (see section IV.F.10 for an expanded discussion). Therefore, product switching as a result of the proposed standards is likely to be negligible. DOE's estimates of national energy savings and associated emission reductions appropriately reflect current data and market trends. Any potential energy savings that might occur from consumers switching from gas-fired storage water heaters to gas-fired instantaneous water heaters, in the absence of new standards, is already incorporated into the no-new-standards case. And because DOE estimates that switching is unlikely to be impacted as a result of amended standards, these potential energy savings are present in both the standards and no-new-standards cases. The commenter's projection of additional energy savings and emissions reduction if non-condensing gas-fired instantaneous water heaters are allowed to stay on the market is a misunderstanding of DOE's estimates of national energy savings and associated emission reductions.
The inputs for determining the NPV of the total costs and benefits experienced by consumers are (1) total annual installed cost, (2) total annual operating costs (energy costs and repair and maintenance costs), and (3) a discount factor to calculate the present value of costs and savings. DOE calculates net savings each year as the difference between the no-new-standards case and each standards case in terms of total savings in operating costs versus total increases in installed costs. DOE calculates operating cost savings over the lifetime of each product shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE used constant prices as the default price assumption to project future consumer gas-fired instantaneous water heater prices. However, DOE also developed consumer gas-fired instantaneous water heater price trends based on historical PPI data. To evaluate the effect of uncertainty regarding the price trend estimates, DOE investigated the impact of different product price projections on the consumer NPV for the considered TSLs for consumer gas-
The operating cost savings are energy cost savings, which are calculated using the estimated energy savings in each year and the projected price of the appropriate form of energy. To estimate energy prices in future years, DOE multiplied the average regional energy prices by the projection of annual national-average residential energy price changes in the Reference case from
In considering the consumer welfare gained due to the direct rebound effect, DOE accounted for change in consumer surplus attributed to additional water heating from the purchase of a more efficient unit. Overall consumer welfare is generally understood to be enhanced from rebound. The net consumer impact of the rebound effect is included in the calculation of operating cost savings in the consumer NPV results. See appendix 10E of the final rule TSD for details on DOE's treatment of the monetary valuation of the rebound effect.
In calculating the NPV, DOE multiplies the net savings in future years by a discount factor to determine their present value. For this final rule, DOE estimated the NPV of consumer benefits using both a 3-percent and a 7-percent real discount rate. DOE uses these discount rates in accordance with guidance provided by the Office of Management and Budget (“OMB”) to Federal agencies on the development of regulatory analysis.
In analyzing the potential impact of new or amended energy conservation standards on consumers, DOE evaluates the impact on identifiable subgroups of consumers that may be disproportionately affected by a new or amended national standard. The purpose of a subgroup analysis is to determine the extent of any such disproportional impacts. DOE evaluates impacts on particular subgroups of consumers by analyzing the LCC impacts and PBP for those particular consumers from alternative standard levels. For this final rule, DOE analyzed the impacts of the considered standard levels on three subgroups: (1) low-income households, (2) senior-only households, and (3) small businesses. The analysis used subsets of the RECS 2020 sample composed of households and CBECS 2018 sample composed of commercial buildings that meet the criteria for the three subgroups. DOE used the LCC and PBP spreadsheet model to estimate the impacts of the considered efficiency levels on these subgroups. Chapter 11 of the final rule TSD describes the consumer subgroup analysis.
Low-income households, as defined by the poverty thresholds from the U.S. Bureau of the Census, are significantly more likely to be renters or live in subsidized housing units and less likely to be homeowners. DOE notes that in these cases, the landlord purchases the equipment and may pay the gas bill as well. RECS 2020 includes data on whether a household pays for the gas bill, allowing DOE to categorize households appropriately in the analysis.
DOE finds no evidence that significant rental cost increases would occur due to an amended standard. Rental prices are largely dictated by supply and demand of housing in individual locations, not the sum of equipment costs in those rentals, such that two similar rentals could have widely differing prices. Furthermore, a landlord would be responsible for replacing an end-of-life gas-fired instantaneous water heater in the no-new-standards case as well yet the rent is unlikely to increase simply because of this regular maintenance. The installation costs estimated in the LCC already include any potential replacement of venting for gas-fired instantaneous water heaters. Finally, even if a landlord were to fully pass on the incremental costs due to amended standards, those costs would presumably be spread out over a monthly rent spanning many years, possibly the lifetime of the water heater, resulting in relatively small monthly rent increases. It is for these reasons that the low-income subgroup analyzes impacts assuming renters do not bear installation and equipment costs. However, as described in section IV.F, for the overall LCC analysis, DOE makes the simplifying assumption that all installation and equipment costs are paid for by the consumer of the equipment, including renters. Therefore, the main LCC results do assume that landlords pass on all costs and yet the analysis still finds that the rule is economically justified. The main LCC and the consumer subgroup analysis are therefore two boundary conditions with respect to costs and benefits accrued by renters.
The majority of low-income households that experience a net cost at higher efficiency levels are homeowner households, as opposed to renters. These households typically have lower hot water use. Unlike renters, homeowners would bear the full cost of installing a new water heater. For these households, a potential rebate program to reduce the total installed costs would be effective in lowering the percentage of low-income consumers with a net cost. DOE understands that the landscape of low-income consumers with a gas-fired instantaneous water heater may change before the
Responding to the July 2023 NOPR, Atmos Energy argued the elimination of non-condensing instantaneous water heaters will cause consumers to switch to less efficient options. Atmos Energy and ECSC argued that non-condensing instantaneous water heaters require less space and changing to a condensing alternative (or electric alternatives) will cost significantly more. Atmos Energy and ECSC argued that this elimination will impact low-income/multi-family/small home consumers disproportionately. (Atmos Energy, No. 1183 at pp. 2-3; ECSC, No. 1185 at pp. 1-2) As DOE has discussed in section IV.F.10 of this document, it is very unlikely that consumers would switch from existing non-condensing instantaneous water heaters to storage water heaters in response to amended standards. The costs to do so would exceed the costs of simply installing a standards-compliant condensing instantaneous water heater. Furthermore, both a standards-compliant instantaneous water heater and a non-condensing instantaneous water heater require less space compared to a storage water heater.
Additionally, DOE does not expect the existing market trends of consumers switching from storage to instantaneous water heaters (in the no-new-standards case) would be impacted by an amended standard, as any incremental cost for a condensing instantaneous water heater would be small compared to the overall costs to switch from a storage to an instantaneous water heater.
Commenters from the U.S. House of Representatives stated that the proposed rulemaking imposes an unattainable standard for non-condensing, gas-fired tankless water heaters, and expressed concern that it would discourage budget-conscious consumers from investing in tankless models, negatively impacting Georgia manufacturing companies. (U.S. House of Representatives, No. 1205 at p. 1) Commenters from the U.S. House of Representatives reiterated these comments in response to the July 2024 NODA. (U.S. House of Representatives, No. 1445 at p. 1)
In response to the affordability concerns, DOE acknowledges that the average installed cost of gas-fired instantaneous water heaters at EL 2 is estimated to increase by $231 compared to current baseline efficiency levels. However, as discussed in chapter 11 of the TSD, low-income households make up only 3.2 percent of the market for gas-fired instantaneous water heaters, and of these approximately 38 percent are renters who would likely benefit from the increased efficiency through energy savings without bearing the full burden of installation costs. DOE estimates that at EL 2 low-income consumers of gas-fired instantaneous water heaters will experience on average lifecycle cost savings of $248, with only 6.5 percent of low-income consumers experiencing a net cost. DOE acknowledges that a small proportion of low-income homeowners may experience higher installation costs for condensing gas-fired instantaneous water heaters. However, DOE estimates that the energy savings benefits across the low-income subgroup outweigh these costs.
Senior-only households are households with occupants who are all at least 65 years of age. RECS 2020 includes information on the age range of household occupants, allowing for the identification of senior-only households from the sample Senior-only households comprised 23.5 percent of the country's households. In estimating the LCC impacts to senior-only households, it is assumed that any residual value of a long-lived product is capitalized in the value of the home.
DOE identified small businesses in CBECS 2018 using threshold levels for maximum number of employees within each building principal building activity.
GRA commented that the proposed standards will discourage restaurants from investing in tankless models and instead choose less efficient water heating solutions and add constraints for restaurant operating with limited space availability. GRA stated that many restaurants rely on gas-fired tankless water heaters due to their space saving attributes and the proposed standards would disproportionately limit the options of small businesses, resulting in higher costs and reduced efficiency. (GRA, No. 449 at p. 1)
As DOE has discussed in section IV.F.10, it is very unlikely that businesses would switch from existing non-condensing instantaneous water heaters to storage water heaters in response to amended standards. The costs to do so would exceed the costs of simply installing a standards-compliant condensing instantaneous water heater. Additionally, DOE does not expect the existing market trends of businesses investing in or switching from storage to instantaneous water heaters (in the no-new-standards case) would be impacted by an amended standard, as any incremental cost for a condensing instantaneous water heater would be small compared to the overall costs to switch from a storage to an instantaneous water heater. If a business is considering investing in a tankless model, they are doing so for space-saving or energy saving reasons that remain valid with a condensing tankless water heater.
DOE performed an MIA to estimate the financial impacts of amended energy conservation standards on manufacturers of gas-fired instantaneous water heaters and to estimate the potential impacts of such standards on direct employment and manufacturing capacity. The MIA has both quantitative and qualitative aspects and includes analyses of projected industry cash flows, the INPV, investments in research and development (“R&D”) and manufacturing capital, and domestic manufacturing employment. Additionally, the MIA seeks to determine how amended energy conservation standards might affect manufacturing employment, capacity, and competition, as well as how standards contribute to overall regulatory burden. Finally, the MIA serves to identify any disproportionate impacts on manufacturer subgroups, including small business manufacturers.
The quantitative part of the MIA primarily relies on the GRIM, an industry cash flow model with inputs specific to this rulemaking. The key GRIM inputs include data on the industry cost structure, unit production costs, product shipments, manufacturer markups, and investments in R&D and manufacturing capital required to produce compliant products. The key GRIM outputs are the INPV, which is the sum of industry annual cash flows over the analysis period, discounted using the industry-weighted average
The qualitative part of the MIA addresses manufacturer characteristics and market trends. Specifically, the MIA considers such factors as a potential standard's impact on manufacturing capacity, competition within the industry, the cumulative impact of other DOE and non-DOE regulations, and impacts on manufacturer subgroups. The complete MIA is outlined in chapter 12 of the final rule TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase 1 of the MIA, DOE prepared a profile of the gas-fired instantaneous water heater manufacturing industry based on the market and technology assessment, preliminary manufacturer interviews, and publicly-available information. This included a top-down analysis of gas-fired instantaneous water heater manufacturers that DOE used to derive preliminary financial inputs for the GRIM (
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow analysis to quantify the potential impacts of amended energy conservation standards. The GRIM uses several factors to determine a series of annual cash flows starting with the announcement of the standard and extending over a 30-year period following the compliance date of the standard. These factors include annual expected revenues, costs of sales, SG&A and R&D expenses, taxes, and capital expenditures. In general, energy conservation standards can affect manufacturer cash flow in three distinct ways: (1) creating a need for increased investment, (2) raising production costs per unit, and (3) altering revenue due to higher per-unit prices and changes in sales volumes.
In addition, during Phase 2, DOE developed interview guides to distribute to manufacturers of gas-fired instantaneous water heaters in order to develop other key GRIM inputs, including product and capital conversion costs, and to gather additional information on the anticipated effects of energy conservation standards on revenues, direct employment, capital assets, industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed interviews with representative manufacturers. During these interviews, DOE discussed engineering, manufacturing, procurement, and financial topics to validate assumptions used in the GRIM and to identify key issues or concerns. As part of Phase 3, DOE also evaluated subgroups of manufacturers that may be disproportionately impacted by amended standards or that may not be accurately represented by the average cost assumptions used to develop the industry cash flow analysis. Such manufacturer subgroups may include small business manufacturers, low-volume manufacturers, niche players, and/or manufacturers exhibiting a cost structure that largely differs from the industry average. DOE identified one subgroup for a separate impact analysis: small business manufacturers. The small business subgroup is discussed in section VI.B of this document, “Review under the Regulatory Flexibility Act” and in chapter 12 of the final rule TSD.
DOE uses the GRIM to quantify the changes in cash flow due to new or amended standards that result in a higher or lower industry value. The GRIM uses a standard, annual discounted cash-flow analysis that incorporates manufacturer costs, manufacturer markups, shipments, and industry financial information as inputs. The GRIM models changes in costs, distribution of shipments, investments, and manufacturer margins that could result from an amended energy conservation standard. The GRIM spreadsheet uses the inputs to arrive at a series of annual cash flows, beginning in 2024 (the base year of the analysis) and continuing to 2059. DOE calculated INPVs by summing the stream of annual discounted cash flows during this period. For manufacturers of gas-fired instantaneous water heaters, DOE used a real discount rate of 9.6 percent, which was derived from industry financials and then modified according to feedback received during manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles and compares changes in INPV between the no-new-standards case and each standards case. The difference in INPV between the no-new-standards case and a standards case represents the financial impact of the new or amended energy conservation standard on manufacturers. As discussed previously, DOE developed critical GRIM inputs using a number of sources, including publicly available data, results of the engineering analysis, results of the shipments analysis, and information gathered from industry stakeholders during the course of manufacturer interviews. The GRIM results are presented in section V.B.2 of this document. Additional details about the GRIM, the discount rate, and other financial parameters can be found in chapter 12 of the final rule TSD.
Manufacturing more efficient products is typically more expensive than manufacturing baseline products due to the use of more complex components, which are typically more costly than baseline components. The changes in the MPCs of covered products can affect the revenues, gross margins, and cash flow of the industry.
As discussed in section IV.C.1 of this document, DOE conducted a market analysis of currently available models listed in DOE's CCD to determine which efficiency levels were most representative of the current distribution of gas-fired instantaneous water heaters available on the market. DOE also completed physical teardowns of commercially available units to determine which design options manufacturers may use to achieve certain efficiency levels. In this final rule, DOE developed efficiency levels
The GRIM estimates manufacturer revenues based on total unit shipment projections and the distribution of those shipments by efficiency level. Changes in sales volumes and efficiency mix over time can significantly affect manufacturer finances. For this analysis, the GRIM uses the NIA's annual shipment projections derived from the shipments analysis from 2024 (the base year) to 2059 (the end year of the analysis period).
New or amended energy conservation standards could cause manufacturers to incur conversion costs to bring their production facilities and product designs into compliance. DOE evaluated the level of conversion-related expenditures that would be needed to comply with each considered efficiency level for gas-fired instantaneous water heaters. For the MIA, DOE classified these conversion costs into two major groups: (1) capital conversion costs, and (2) product conversion costs. Capital conversion costs are investments in property, plant, and equipment necessary to adapt or change existing production facilities such that new compliant product designs can be fabricated and assembled. Product conversion costs are investments in research, development, testing, marketing, and other non-capitalized costs necessary to make product designs comply with new or amended energy conservation standards.
In the July 2023 NOPR and the July 2024 NODA, DOE relied on manufacturer feedback to evaluate the level of capital and product conversion costs that gas-fired instantaneous water heater manufacturers would likely incur to meet each analyzed efficiency level. 88 FR 49058, 49127-49128; 89 FR 59692, 59699-59700. During confidential interviews, DOE asked manufacturers to estimate the capital conversion costs (
At lower TSLs, manufacturer feedback and a review of the market indicate that most manufacturers already have sufficient condensing production capacity and offer range of models that meet the required efficiency levels. Thus, DOE modeled low-levels of capital and product conversion costs for most manufacturers at TSL 1 and TSL 2. As TSLs increase in stringency, DOE expects most manufacturers would need to add production capacity as fewer shipments currently meet the required levels and product designs increase in complexity. DOE also expects product conversion costs would increase at higher TSLs since fewer manufacturers currently offer fewer models that meet the efficiency levels required. For the July 2024 NODA, DOE refined its conversion cost estimates to reflect feedback submitted by Rinnai in response to the July 2023 NOPR. (Rinnai, No. 1186 at p. 23) DOE incorporated Rinnai's estimate of $15 million
For this final rule, DOE updated its conversion cost estimates from 2022$ to 2023$ but otherwise maintained its conversion cost methodology used in the July 2024 NODA.
In general, DOE assumes all conversion-related investments occur between the year of publication of the final rule and the year by which manufacturers must comply with the amended standard. The conversion cost figures used in the GRIM can be found in section V.B.2 of this document. For additional information on the estimated capital and product conversion costs,
MSPs include direct manufacturing production costs (
Under the preservation of gross margin percentage scenario, DOE applied a single uniform “gross margin percentage” across all efficiency levels, which assumes that manufacturers would be able to maintain the same amount of profit as a percentage of revenues at all efficiency levels within a product class. As MPCs increase with efficiency, this scenario implies that the per-unit dollar profit will increase. DOE estimated a gross margin percentage of 31 percent for gas-fired instantaneous water heaters.
Under the preservation of operating profit scenario, DOE modeled a situation in which manufacturers are not able to increase per-unit operating profit in proportion to increases in MPCs. In the preservation of operating
A comparison of industry financial impacts under the two manufacturer markup scenarios is presented in section V.B.2.a of this document.
In response to the July 2023 NOPR, Rinnai stated that DOE's review of manufacturer impacts did not account for the direct impact of the rulemaking on Rinnai's manufacturing facility located in Griffin, Georgia, which is tooled and optimized for production of non-condensing gas-fired instantaneous water heaters. Rinnai commented that the Griffin facility cost $70 million to build. Rinnai estimates that should the Griffin plant close, it would lead to a loss of gross profit between $30 million to $36 million, annually, and a write-off of $2 million in capital expenditures that could not be repurposed. Rinnai asserted that it would require more than $15 million
In response to the July 2024 NODA, Rinnai questioned DOE's assumption that it would convert its Griffin, Georgia manufacturing facility to produce condensing gas-fired instantaneous water heaters. Rinnai restated that it has overseas manufacturing capacity for condensing gas-fired instantaneous water heaters, and the need to expand that capacity would depend on an assessment of market demand. Rinnai commented that under a condensing-level standard, it is not realistic to assume Rinnai would maintain current sales levels (
The Governor of Georgia stated that the standards proposed in the July 2023 NOPR could negatively impact the non-condensing gas-fired instantaneous water heater industry in the State of Georgia and could harm domestic manufacturing jobs. (Governor of Georgia, No. 1157 at pp. 1-3) The Attorney General of GA stated that the standards proposed in the July 2023 NOPR, if adopted, would have a negative economic impact on the State of Georgia, which is host to a large new facility optimized for manufacturing non-condensing units. The Attorney General of GA added that the proposed rulemaking could eliminate manufacturing jobs in Georgia, particularly jobs held by female and minority workers. (Attorney General of GA, No. 1026 at pp. 1-2) Commenters from the U.S. House of Representatives added that the proposed rulemaking would have a negative economic impact on the State of Georgia, which is home to the largest domestic assembly facility for non-condensing gas-fired instantaneous water heaters. (U.S. House of Representatives, No. 1205 at p. 1) Commenters from the U.S. House of Representatives reiterated this comment in response to the July 2024 NODA. (U.S. House of Representatives, No. 1445 at p. 1)
CNGC noted that investments made by Rinnai, a member of its coalition, would be put at risk if the standards were adopted as proposed in the July 2023 NOPR. (CNGC No. 648 at p. 1) Gas Association Commenters further highlighted Rinnai's concerns, citing Rinnai's recently opened facility in Griffin, Georgia, which exclusively makes non-condensing gas-fired instantaneous water heaters, as potentially being off-shored.
Regarding the potential impact to domestic production employment due to amended standards, DOE understands that Rinnai recently invested approximately $70 million to develop its new Georgia manufacturing facility dedicated to non-condensing gas-fired instantaneous water heaters.
DOE previously analyzed the potential changes in direct employment in the July 2023 NOPR. 88 FR 49058, 49145-49147. For the July 2024 NODA, DOE revised its direct employment analysis to account for Rinnai's new domestic production facility dedicated to manufacturing gas-fired instantaneous water heaters. 89 FR 59692, 59697. (
Regarding the potential investment required to convert Rinnai's newly built domestic production facility, DOE incorporated Rinnai's feedback provided in response to the July 2023 NOPR into its conversion cost model for the July 2024 NODA and this final rule. Although DOE cannot be certain whether or not Rinnai would invest in repurposing its U.S. manufacturing facility, DOE incorporated Rinnai's feedback into its industry conversion cost estimates to avoid underestimating the potential investments industry would incur as a result of amended standards. Should Rinnai choose to maintain condensing capabilities in its existing facilities in Japan, the industry conversion costs would be lower. DOE updated its conversion cost estimates from 2022$ to 2023$ for this final rule but otherwise maintained its methodology from the July 2024 NODA.
Regarding Rinnai's assertion that it was not contacted to provide feedback in advance of the July 2023 NOPR, DOE notes that manufacturer outreach and interviews are conducted by DOE's contractors under nondisclosure agreements. As such, information surrounding manufacturer outreach and participation is kept as confidential by DOE's contractors and cannot be disclosed.
Regarding Rinnai's request to review the GRIM, DOE notes that a copy of the GRIM developed for this final rule analysis is available for download at:
In response to the July 2023 NOPR, AHRI stated that it supported the inclusion of amortization of product conversion costs under standards into the projected MSP in a recent rulemaking for microwave ovens, and urges DOE to use this methodology in all rulemakings.
DOE models different manufacturer markup scenarios to assess the potential impacts on prices and profitability for manufacturers following the implementation of amended energy conservation standards. The analyzed scenarios lead to different manufacturer markup values that, when applied to the manufacturer production costs, result in varying revenue and cash flow impacts. These scenarios are meant to reflect the potential range of financial impacts for manufacturers of the specific covered product or equipment. The analyzed manufacturer markup scenarios vary by rulemaking because they are informed by manufacturer feedback and reflect the market for the specific product type.
For the July 2023 NOPR and the July 2024 NODA, DOE applied a preservation of gross margin percentage
In response to the July 2023 NOPR, AHRI submitted written comments regarding cumulative regulatory burden. AHRI urged DOE to consider the high volume of regulatory activity that directly affects manufacturers of consumer water heaters, including gas-fired instantaneous water heaters, and expressed concern that DOE was rushing to publish recent rulemakings, risking significant revision that will prolong uncertainty, confuse consumers, and potentially undermine broader policy goals. AHRI cited standards and test procedure rulemakings for other covered products and equipment, as well as low and zero NOx actions by California Air Resources Board (“CARB”) and individual air quality management districts. (AHRI, No. 1167 at pp. 7-9)
In response to the July 2023 NOPR, BWC commented that the impact of cumulative regulatory burden experienced by manufacturers is not limited to conversion costs, but also to the preparations manufacturers must undergo in order to respond to proposed rules. BWC further stated that DOE has promulgated several major rulemakings that will directly impact the products that BWC manufactures, in addition to actions undertaken by other governments and programs, and that the ability of manufacturers to draw on outside resources for assistance will be severely limited by the concurrent needs of many manufacturers across rulemakings, particularly in the case of third-party laboratories. BWC stated that due to the burden this rulemaking will place on third-party laboratories, as well as the general burden of multiple concurrent ongoing regulatory actions, BWC strongly disagreed with DOE's decision not to consider test rulemakings as part of its analysis. (BWC, No. 1164 at pp. 24-26) BWC also stated that, due to concurrent regulatory actions regarding energy efficiency at both the State and Federal levels, it disagreed with DOE's conclusion in section VI.B.5 of the July 2023 NOPR that there are no rules or regulations that duplicate, overlap, or conflict with this proposed rule and encouraged DOE to account for all of these issues, ideally allowing manufacturers more time to review and respond to DOE rulemakings when requested. (BWC, No. 1164 at p. 24)
With respect to comments regarding the regulatory burden, DOE recognizes that the gas-fired instantaneous water heater industry is subject to regulations from Federal, State, and local entities. DOE analyzes and considers the impact on manufacturers of multiple product/equipment-specific Federal regulatory actions. Specifically, DOE analyzes cumulative regulatory burden pursuant to section 13(g) of appendix A. 10 CFR part 430, subpart C, appendix A, section 13(g); 10 CFR 431.4. DOE notes that regulations that are not yet finalized are not considered as cumulative regulatory burden, as the timing, cost, and impacts of unfinalized rules are speculative. However, to aid stakeholders in identifying potential cumulative regulatory burden, DOE does list rulemakings that have proposed rules, which have tentative compliance dates, compliance levels, and compliance cost estimates. The results of this analysis can be found in section V.B.2.e of this document.
Regarding AHRI's comment about ultra-low NOx and zero NOx regulations, DOE notes that in its analysis of cumulative regulatory burden, DOE considers Federal, product specific regulations that have compliance dates within 3 years of one another. DOE is not aware of any Federal or State ultra-low NOx or zero NOx regulations specific to gas-fired instantaneous water heaters with compliance dates within the 7-year cumulative regulatory burden timeframe (2027-2033).
Regarding BWC's request that DOE not discount the costs for stakeholders to review rulemakings, although DOE appreciates that monitoring and responding to rulemakings does impose costs for stakeholders, DOE believes that this is outside the scope of analysis for individual product rulemakings. Because EPCA requires DOE to establish and maintain the energy conservation program for consumer products and to
In response to the July 2024 NODA, Rheem stated that they agreed with a 70 percent market share estimate for condensing gas-fired instantaneous water heaters and gradual shift towards condensing models. Rheem indicated that most manufacturers already possess the design and manufacturing capabilities necessary to produce products across the full range of efficiencies. Rheem stated that while a condensing-level standard at EL 2 or EL 3 would require manufactures to repurpose and retool assembly lines, a standard consistent with EL 2 (
Regarding the need for manufacturers to repurpose and retool assembly lines, DOE accounted for the capital and product conversion costs associated with increasing production of condensing gas-fired instantaneous water heaters in its analysis. Consistent with Rheem's comment, DOE's analysis estimates that conversion costs would be higher at EL 3 and EL 4 compared to EL 2.
The Joint Advocates commented that DOE's analysis for the July 2024 NODA shows that the potential impacts on gas-fired instantaneous water heater manufacturers at EL 2 and higher would be modest and that, specifically, the potential impact on INPV at EL 2 ranges from a loss of 2.7 percent to a gain of 3.2 percent. (Joint Advocates, No. 1444 at pp. 1-2) The Joint Advocates commented that the proposed standards for gas-fired instantaneous water heaters could increase U.S. manufacturing jobs because the labor content required to produce a condensing gas-fired instantaneous water heater is approximately 59 percent more than that required to produce a non-condensing gas-fired instantaneous water heater. (Joint Advocates, No. 1444 at p. 2)
Regarding the potential impacts on gas-fired instantaneous water heater manufacturers, for this final rule, the estimated change in INPV at TSL 2 ranges from a loss of 2.8 percent to a gain of 3.4 percent.
The emissions analysis consists of two components. The first component estimates the effect of potential energy conservation standards on power sector and site (where applicable) combustion emissions of CO
The analysis of electric power sector emissions of CO
The on-site operation of consumer gas-fired instantaneous water heaters involves combustion of fossil fuels and results in emissions of CO
FFC upstream emissions, which include emissions from fuel combustion during extraction, processing, and transportation of fuels, and “fugitive” emissions (direct leakage to the atmosphere) of CH
The emissions intensity factors are expressed in terms of physical units per MWh or MMBtu of site energy savings. For power sector emissions, specific emissions intensity factors are calculated by sector and end use. Total emissions reductions are estimated using the energy savings calculated in the national impact analysis.
DOE's no-new-standards case for the electric power sector reflects the
SO
However, beginning in 2016, SO
CSAPR also established limits on NO
The MATS limit mercury emissions from power plants, but they do not include emissions caps and, as such, DOE's energy conservation standards would be expected to slightly reduce Hg emissions. DOE estimated mercury emissions reduction using emissions factors based on
As part of the development of this final rule, for the purpose of complying with the requirements of Executive Order 12866, DOE considered the estimated monetary benefits from the reduced emissions of CO
To monetize the benefits of reducing GHG emissions, the July 2023 NOPR used the interim social cost of greenhouse gases (“SC-GHG”) estimates presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates Under Executive Order 13990 published in February 2021 by the Interagency Working Group on the SC-GHG (“IWG”) (“2021 Interim SC-GHG estimates”). As a member of the IWG involved in the development of the February 2021 SC-GHG TSD, DOE agreed that the 2021 interim SC-GHG estimates represented the most appropriate estimate of the SC-GHG until revised estimates were developed reflecting the latest, peer-reviewed science. See 87 FR 78382, 78406-78408 for discussion of the development and details of the 2021 interim SC-GHG estimates. The IWG has continued working on updating the interim estimates, but has not published final estimates.
Accordingly, in the regulatory analysis of its December 2023 Final Rule, “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review,” the EPA estimated climate benefits using a new, updated set of SC-GHG estimates (“2023 SC-GHG estimates”). EPA documented the methodology underlying the new estimates in the RIA for the December 2023 Final Rule and in greater detail in a technical report entitled “Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances” that was presented as Supplementary Material to the RIA.
On December 22, 2023, the IWG issued a memorandum directing that when agencies “consider applying the SC-GHG in various contexts . . . agencies should use their professional judgment to determine which estimates of the SC-GHG reflect the best available evidence, are most appropriate for particular analytical contexts, and best facilitate sound decision-making”
DOE has been extensively involved in the IWG process and related work on the SC-GHGs for over a decade. This involvement includes DOE's role as the federal technical monitor for the seminal 2017 report on the SC-GHG issued by the National Academies, which provided extensive recommendations on how to strengthen and update the SC-GHG estimates.
Based on this review, in the July 2024 NODA, DOE proposed for public comment its preliminary determination that the updated 2023 SC-GHG estimates, including the approach to discounting, represent a significant improvement in estimating the SC-GHG through incorporating the most recent advancements in the scientific literature and by addressing recommendations on prior methodologies. That NODA presented climate benefits using both the 2023 SC-GHG values and the 2021 interim SC-GHG estimates. 89 FR 59693, 59700. In this final rule, DOE has not made a final decision regarding that preliminary assessment or adoption of the updated 2023 SC-GHG estimates, as such a decision is not necessary for purposes of this rule. DOE will continue to decide, for each particular analytical context, whether to rely on, present for presentation purposes, or use in some other way, the updated 2023 SC-GHG values, the 2021 interim SC-GHG estimates, or both. In this final rule, DOE is presenting estimates using both the updated 2023 SC-GHG values and the 2021 interim SC-GHG estimates, as DOE believes itis appropriate to give the public more complete information regarding the benefits of this rule. DOE notes, however, that the adopted standards would be economically justified using either set of SC-GHG values, and even without inclusion of the estimated monetized benefits of reduced GHG emissions. In future rulemakings, DOE will continue to evaluate the applicability in context and use our professional judgment to apply the SC-GHG estimates that are most appropriate to use at that time.
The 2023 EPA technical report presents SC-GHG values for emissions years through 2080; therefore, DOE did not monetize the climate benefits of GHG emissions reductions occurring after 2080 when using the 2023 estimates for the SC-GHG. DOE expects additional climate impacts to accrue from GHG emissions changes post 2080, but due to a lack of readily available SC-GHG estimates for emissions years beyond 2080 and the relatively small emission effects expected from those years, DOE has not monetized these additional impacts in this analysis. Similarly, the interim 2021 interim SC-GHG estimates include values through 2070. DOE expects additional climate benefits to accrue for products still operating after 2070, but a lack of available SC-GHG estimates published by the IWG for emissions years beyond 2070 prevents DOE from monetizing these potential benefits in this analysis.
The overall climate benefits are generally greater when using the higher, updated 2023 SC-GHG estimates, compared to the climate benefits using the older 2021 interim SC-GHG estimates, which were used in the July 2023 NOPR. The net benefits of the rule are positive, however, under either SC-GHG calculation methodology; in fact, the net benefits of the rule are positive without including any monetized climate benefits at all. The adopted standards would be economically justified even without inclusion of the estimated monetized benefits of reduced GHG emissions using either methodology, therefore the conclusions of the analysis (as presented in section V.C of this document) are not dependent on which set of estimates of the SC-GHG are used in the analysis or on the use of the SC-GHG at all. The adopted standard level would remain the same under either SC-GHG calculation methodology (or without using the SC-GHG at all).
DOE received several comments regarding its preliminary determination on the use of the 2023 SC-GHG methodologies in the July 2024 NODA. As noted above, DOE is not making a final determination regarding which of the two sets of SC-GHG is most appropriate to apply here or across all DOE analyses. Accordingly, DOE is not addressing in this rule comments regarding such a final determination. Because DOE is presenting results using both sets of estimates, however, to the extent that commenters raised concerns about any reference to the 2023 SC-GHG methodologies, DOE is responding to that limited set of comments here.
AHRI disagreed with DOE's use of 2023 SC-GHG estimates in its analysis to justify proposed energy conservation standards. AHRI stated that adoption of 2023 SC-GHG methodologies introduces complexity, uncertainty, and traceability issues. AHRI recommended that DOE provide guidance on how 2023 SC-GHG methodologies were applied and offer comparison to the analysis performed in the July 2023 NOPR (AHRI, No. 1437 p. 3).
Rinnai disagreed with DOE's preliminary decision to adopt 2023 SC-GHG methodologies, which they claim introduce challenges regarding the traceability of the data, the complexity and uncertainty of the new estimates, validation of the long-term costs and benefits of GHG emissions and the ability to compare the July 2024 NODA and July 2023 NOPR results. Rinnai further states that if the DOE updates the SC-GHG methodology, the update should be performed for all water heater product classes to reflect a fair comparison. (Rinnai, No. 1443 at p. 10)
In response, DOE reiterates that it would promulgate the same standards in this final rule even in the absence of the benefits of the GHG reductions achieved by the rule because the adopted standards for gas-fired instantaneous water heaters are economically justified even without including such benefits. DOE would also promulgate the same standards in this final rule using either the 2021 interim SC-GHG estimates or the 2023 SC-GHG estimates. In this rule, DOE is presenting SC-GHG results using both the interim 2021 SC-GHG estimates and the updated 2023 SC-GHG estimates.
In the July 2024 NODA, DOE preliminarily agreed with EPA's assessment that the updates implemented in the 2023 SC-GHG estimates reflect the best available science and address recommendations from the National Academies. DOE acknowledges commenters' concerns regarding uncertainty of the new estimates, but notes that the 2021 interim SC-GHG estimates are also uncertain and that uncertainty is inherent in all complex cost estimates that quantify physical impacts and translate them into dollar values.
DOE further notes that EPA accounted for uncertainty in various aspects of the 2023 SC-GHG estimates in each of the modules and comprehensively discussed these sources of uncertainty in the Final SC-GHG Report and supporting literature. (See,
Because, in this rule, DOE is presenting both the interim 2021 SC-GHG estimates and the 2023 SC-GHG estimates, the comment contending that the updated 2023 SC-GHG estimates are less traceable or less transparent than the 2021 interim SC-GHG estimates are no longer relevant. Insofar as this comment objects to DOE even referring to the 2023 SC-GHG methodologies and using them for presentation purposes, however, we note that EPA developed these estimates through a process that included an initial draft with sensitivity analyses, independent peer review, responses to peer review and comments, available documentation associated with the underlying inputs and a public docket that includes all the studies and reports cited in the analysis. (See
Because, in this rule, DOE is presenting both the interim 2021 SC-GHG estimates and the 2023 SC-GHG estimates, the comments that adding an additional, updated estimate of the SC-GHG benefits impairs the public or the industry's ability to compare the July 2024 NODA and July 2023 NOPR results with the final rule are not relevant.
Finally, the commenter asserted that DOE should update the SC-GHG values for all water heater product classes to reflect a fair comparison. As stated above, because DOE is presenting both the interim 2021 SC-GHG estimates and the 2023 SC-GHG estimates for this rule, this comment is not relevant.
BWC stated that the 2023 SC-GHG estimates are a significant step forward in quantifying the social cost of greenhouse gases. BWC further commented that given the permanence of any minimum energy conservation standards that are established by DOE under EPCA, it is essential that the Department first finalize a robust, consistent, and objective approach towards accurately calculating SC-GHG before allowing this metric to economically justify more stringent standards that would otherwise not yield a positive net present value. BWC also questioned the consistency of the methodologies going forward and the extent that peer experts were able to review and participate in the process. (BWC, No. 1441 at p. 3-4)
DOE appreciates commenter's statement that the 2023 SC-GHG estimates are an important step forward in the monetization of greenhouse gas emissions.
With respect to the commenter's concerns about peer review, DOE notes again that the 2023 SC-GHG estimates were subjected to independent peer review in line with EPA's Peer Review Handbook 4th Edition, 2015. This process was conducted by an independent contractor and involved two separate comment periods for outside experts. EPA reported that the peer reviewers commended the agency on its development of this update and labeled it a much-needed improvement in estimating the SC-GHG. (EPA Report at p. 3; EPA RTC A-7-11).
Regarding the commenter's concerns about the consistency of the methodologies going forward (BWC, No. 1441 at p. 3-4), DOE reiterates that it is presenting climate benefits using both sets of SC-GHG estimates and that, in future rulemakings, DOE will continue to evaluate the applicability in context and use its professional judgment to apply the SC-GHG estimates that are most appropriate to use at that time.
Finally, DOE reiterates that it would promulgate the same standards in this final rule even in the absence of the benefits of the GHG reductions achieved by the rule. DOE would also promulgate the same standards in this final rule, using either the 2021 interim SC-GHG estimates, rather than the 2023 SC-GHG estimates. Thus, DOE did not, in fact, rely on either the 2023 SC-GHG estimates or the 2021 interim SC-GHG estimates “to economically justify more stringent standards that would otherwise not yield a positive net present value,” as the commenter suggests because the adopted standards for gas-fired instantaneous water heaters are economically justified even without including such benefits.
DOE's derivations of the SC-CO
The SC-CO
DOE also presents results using interim SC-CO
DOE multiplied the CO
The SC-CH
DOE also presents results using interim SC-CH
DOE multiplied the CH
For the final rule, DOE estimated the monetized value of NO
DOE also estimated the monetized value of NO
DOE multiplied the site emissions reduction (in tons) in each year by the associated $/ton values, and then discounted each series using discount rates of 3 percent and 7 percent as appropriate.
The utility impact analysis estimates the changes in installed electrical capacity and generation projected to result for each considered TSL. The analysis is based on published output from the NEMS associated with
The output of this analysis is a set of time-dependent coefficients that capture the change in electricity generation, primary fuel consumption, installed capacity and power sector emissions due to a unit reduction in demand for a given end use. These coefficients are multiplied by the stream of electricity savings calculated in the NIA to provide estimates of selected utility impacts of potential new or amended energy conservation standards. The utility analysis also estimates the impact on gas utilities in terms of projected changes in natural gas deliveries to consumers for each TSL.
BWC expressed concerns that DOE overestimated the impact of this metric in the analysis presented in the July 2024 NODA pointing to table III.9, which demonstrates electric utility impact results indicating a substantial decrease in electric load for both installed capacity, as well as electric generation. BWC contended that since gas-fired instantaneous water heaters utilize very little electric energy, they question how adopting more stringent energy conservation standards for these products could impact electric load demand to such a significant extent. (BWC, No. 1441 at p. 4)
In response, DOE notes that the changes listed in table III.9 of the July 2024 NODA in installed capacity and generation are significantly smaller than total US electric capacity which is over a million Megawatts. Additionally, DOE notes that results for EL 1 through 3 results in an increase in installed capacity as denoted by parentheses.
DOE considers employment impacts in the domestic economy as one factor in selecting a standard. Employment impacts from new or amended energy conservation standards include both direct and indirect impacts. Direct employment impacts are any changes in the number of employees of manufacturers of the products subject to standards. The MIA addresses those impacts. Indirect employment impacts are changes in national employment that occur due to the shift in expenditures and capital investment caused by the purchase and operation of more-efficient appliances. Indirect employment impacts from standards consist of the net jobs created or eliminated in the national economy, other than in the manufacturing sector being regulated, caused by (1) reduced spending by consumers on energy, (2) reduced spending on new energy supply by the utility industry, (3) increased consumer spending on the products to which the new standards apply and other goods and services, and (4) the effects of those three factors throughout the economy.
One method for assessing the possible effects on the demand for labor of such shifts in economic activity is to compare sector employment statistics developed by the Labor Department's Bureau of Labor Statistics (“BLS”). BLS regularly publishes its estimates of the number of jobs per million dollars of economic activity in different sectors of the economy, as well as the jobs created elsewhere in the economy by this same economic activity. Data from BLS indicate that expenditures in the utility sector generally create fewer jobs (both directly and indirectly) than expenditures in other sectors of the economy.
DOE estimated indirect national employment impacts for the standard levels considered in this final rule using an input/output model of the U.S. economy called Impact of Sector Energy Technologies version 4 (“ImSET”).
DOE notes that ImSET is not a general equilibrium forecasting model, and that there are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Because ImSET does not incorporate price changes, the employment effects predicted by ImSET may over-estimate actual job impacts over the long run for this rule. Therefore, DOE used ImSET only to generate results for near-term timeframes (2030-2034), where these uncertainties are reduced. For more details on the employment impact analysis, see chapter 16 of the final rule TSD.
The following section addresses the results from DOE's analyses with respect to the considered energy conservation standards for consumer gas-fired instantaneous water heaters. It addresses the TSLs examined by DOE, the projected impacts of each of these levels if adopted as energy conservation standards for consumer gas-fired instantaneous water heaters, and the standards levels that DOE is adopting in this final rule. Additional details regarding DOE's analyses are contained in the final rule TSD supporting this document.
In general, DOE typically evaluates potential new or amended standards for products and equipment by grouping individual efficiency levels for each class into TSLs. Use of TSLs allows DOE to identify and consider manufacturer cost interactions between the product classes, to the extent that there are such interactions, and price elasticity of consumer purchasing decisions that may change when different standard levels are set.
In the analysis conducted for this final rule, DOE analyzed the benefits and burdens of four TSLs for consumer gas-fired instantaneous water heaters. These TSLs are equivalent to each of the ELs analyzed by DOE with results presented in this document. TSL 1 represents a transition from non-condensing to condensing technology (
DOE analyzed the economic impacts on consumer gas-fired instantaneous water heaters consumers by looking at the effects that potential amended standards at each TSL would have on the LCC and PBP. DOE also examined the impacts of potential standards on selected consumer subgroups. These analyses are discussed in the following sections.
In general, higher-efficiency products affect consumers in two ways: (1) purchase price increases, and (2) annual operating costs decrease. Inputs used for calculating the LCC and PBP include total installed costs (
Table V.2 and table V.3 show the LCC and PBP results for the TSLs considered. In the first table, the simple payback is measured relative to the baseline product. In the second table, the impacts are measured relative to the efficiency distribution in the no-new-standards case in the compliance year (
In the consumer subgroup analysis, DOE estimated the impact of the considered TSLs on low-income households, senior-only households, and small businesses. Table V.4 compares the average LCC savings and PBP at each efficiency level for the consumer subgroups with similar metrics for the entire consumer sample for consumer gas-fired instantaneous water heaters. In most cases, the average LCC savings and PBP for low-income households and senior-only households at the considered efficiency levels are not substantially different from the average for all households. Chapter 11 of the final rule TSD presents the complete LCC and PBP results for the subgroups.
As discussed in section III.F.2 of this document, EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the increased purchase cost for a product that meets the standard is less than three times the value of the first-year energy savings resulting from the standard. In calculating a rebuttable presumption payback period for each of the considered TSLs, DOE used discrete values, and, as required by EPCA, based the energy use calculation on the DOE test procedures for consumer gas-fired instantaneous water heaters. In contrast, the PBPs presented in section V.B.1.a of this document use averages that were calculated using distributions that reflect the range of energy use in the field.
Table V.5 presents the rebuttable-presumption payback periods for the considered TSLs for consumer gas-fired instantaneous water heaters. While DOE examined the rebuttable-presumption criterion, it considered whether the standard levels considered for this rule are economically justified through a more detailed analysis of the economic impacts of those levels, pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to the consumer, manufacturer, Nation, and environment. The results of that analysis serve as the basis for DOE to definitively evaluate the economic justification for a potential standard level, thereby supporting or rebutting the results of any preliminary determination of economic justification.
DOE performed an MIA to estimate the impact of amended energy conservation standards on manufacturers of gas-fired instantaneous water heaters. The next section describes the expected impacts on manufacturers at each considered TSL. Chapter 12 of the final rule TSD explains the analysis in further detail.
In this section, DOE provides GRIM results from the analysis, which examines changes in the industry that would result from a standard. The following tables summarize the estimated financial impacts (represented by changes in INPV) of potential amended energy conservation standards on manufacturers of gas-fired instantaneous water heaters, as well as the conversion costs that DOE estimates manufacturers of gas-fired instantaneous water heaters would incur at each TSL.
As discussed in section IV.J.2.d of this document, DOE modeled two scenarios to evaluate a range of cash flow impacts on the gas-fired instantaneous water heater industry: (1) the preservation of gross margin percentage scenario and (2) the preservation of operating profit scenario. Under the preservation of gross margin percentage scenario, DOE applied a single uniform “gross margin percentage” across all efficiency levels. As MPCs increase with efficiency, this scenario implies that the per-unit dollar profit would also increase. DOE assumed a “gross margin percentage” of 31 percent for gas-fired instantaneous water heaters.
The preservation of operating profit scenario reflects manufacturers' concerns about their inability to maintain margins as MPCs increase to reach more-stringent efficiency levels. In this scenario, while manufacturers make the necessary investments required to convert their facilities to produce compliant products, operating profit does not change in absolute dollars and decreases as a percentage of revenue.
Each of the modeled manufacturer markup scenarios results in a unique set of cash flows and corresponding industry values at each TSL. In the following discussion, the INPV results refer to the difference in industry value between the no-new-standards case and each standards case resulting from the sum of discounted cash flows from 2024 through 2059. To provide perspective on the short-run cash flow impact, DOE
At TSL 1, DOE estimates that impacts on INPV would range from −$22.9 million to $40.1 million, or a change in INPV of -1.9 percent to 3.4 percent. At TSL 1, industry free cash flow is $84.6 million, which is a decrease of $7.1 million, or a drop of 7.8 percent, compared to the no-new-standards case value of $91.7 million in 2029, the year leading up to the standards year. Approximately 70 percent of gas-fired instantaneous water heater shipments are expected to meet TSL 1 by the analyzed 2030 compliance date in the no-new-standards case.
TSL 1 would set the energy conservation standard for gas-fired instantaneous water heaters at EL 1. Compared to the non-condensing design considered at baseline, the design options analyzed at TSL 1 includes a tube design condensing heat exchanger. Out of the 12 gas-fired instantaneous water heater OEMs identified, 11 offer models that meet TSL 1. These 11 manufacturers currently offer 84 unique basic models, accounting for 61 percent of model listings, that meet this TSL. Based on feedback from manufacturer interviews and a review of the market, DOE does not expect that most manufacturers would need to add production capacity or incur significant capital conversion costs to meet this level. However, in response to the July 2023 NOPR, one manufacturer commented that its U.S. production facility is currently optimized to produce non-condensing models. Converting this U.S. production facility to produce condensing gas-fired instantaneous water heaters would require significant investment. To avoid underestimating the potential investments required to meet levels that may necessitate condensing technology (
At TSL 1, the shipment-weighted average MPC for gas-fired instantaneous water heaters increases by 9.4 percent relative to the no-new-standards case shipment-weighted average MPC for gas-fired instantaneous water heaters in 2030. In the preservation of gross margin percentage scenario, the increase
Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2030. This reduction in the manufacturer markup and the $16.5 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 1 under the preservation of operating profit scenario.
At TSL 2, DOE estimates that impacts on INPV would range from −$33.7 million to $40.5 million, or a change in INPV of -2.8 percent to 3.4 percent. At TSL 2, industry free cash flow is $82.9 million, which is a decrease of $8.8 million, or a drop of 9.6 percent compared to the no-new-standards case value of $91.7 million in 2029, the year leading up to the standards year. Approximately 62 percent of gas-fired instantaneous water heater shipments are expected to meet TSL 2 by the analyzed 2030 compliance date in the no-new-standards case.
TSL 2 would set the energy conservation standard for gas-fired instantaneous water heaters at EL 2. The design options analyzed at TSL 2 include increasing the tube design condensing heat exchanger area relative to TSL 1. Of the 12 gas-fired instantaneous water heater OEMs, 10 manufacturers offer models that meet TSL 2. These 10 OEMs currently offer 71 unique basic models, accounting for 51 percent of model listings, that meet this TSL. As with TSL 1, DOE does not expect that most manufacturers would need to add production capacity (or incur notable capital conversion costs) to meet this level. However, the larger condensing heat exchanger that manufacturers may implement to meet TSL 2 could necessitate some capital investments to optimize production lines. Similar to TSL 1, DOE does not expect that there would be significant product conversion costs at this level since most manufacturers already offer a range of models that meet TSL 2. DOE estimates that industry would incur approximately $16.7 million in capital conversion costs and $3.7 million in product conversions at TSL 2. Industry conversion costs total $20.4 million.
At TSL 2, the shipment-weighted average MPC for gas-fired instantaneous water heaters increases by 9.8 percent relative to the no-new-standards case shipment-weighted average MPC for gas-fired instantaneous water heaters in 2030. In the preservation of gross margin percentage scenario, the increase in cashflow from the higher MSP outweighs the $20.4 million in conversion costs, causing a positive change in INPV at TSL 2 under this scenario.
Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2030. This reduction in the manufacturer markup and the $20.4 million in conversion costs incurred by manufacturers cause a slightly negative change in INPV at TSL 2 under the preservation of operating profit scenario.
At TSL 3, DOE estimates that impacts on INPV would range from −$61.8 million to $23.7 million, or a change in INPV of -5.2 percent to 2.0 percent. At TSL 3, industry free cash flow is $65.2 million, which is a decrease of $26.5 million, or a drop of 28.9 percent, compared to the no-new-standards case value of $91.7 million in 2029, the year leading up to the standards year. Approximately 16 percent of gas-fired instantaneous water heater shipments are expected to meet TSL 3 by the analyzed 2030 compliance date in the no-new-standards case.
TSL 3 would set the energy conservation standard for gas-fired instantaneous water heaters at EL 3. The design options analyzed at TSL 3 include a more efficient heat exchanger design (
At this level, most manufacturers would need to add additional assembly lines to meet demand, which would require a large capital investment. The investment required to add production capacity would vary by manufacturer as it depends on floor space availability in and around existing manufacturing plants. Compared to TSL 1 and TSL 2, manufacturers offer fewer models that meet the required efficiency levels. Manufacturers without any models that meet TSL 3 would need to develop new gas-fired instantaneous water heater products with more complex, efficient condensing heat exchanger designs. Manufacturers with gas-fired instantaneous water heaters that meet TSL 3 may need to allocate technical resources to provide a full range of product offerings since most manufacturers currently only offer a handful of models that meet TSL 3. DOE estimates that manufacturers would incur approximately $55.3 million in capital conversion costs and $4.8 million in product conversions at TSL 3. Industry conversion costs total $60.1 million.
At TSL 3, the shipment-weighted average MPC for gas-fired instantaneous water heaters increases by 11.2 percent relative to the no-new-standards case shipment-weighted average MPC for gas-fired instantaneous water heaters in 2030. In the preservation of gross margin percentage scenario, the increase in cashflow from the higher MSP outweighs the $60.1 million in conversion costs, causing a slightly positive change in INPV at TSL 3 under this scenario.
Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards case, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2030. This reduction in the manufacturer markup and the $60.1 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 3 under the preservation of operating profit scenario.
At TSL 4, DOE estimates that impacts on INPV would range from −$74.5 million to −$81.2 million, or a change in INPV of −6.2 percent to 6.8 percent. At TSL 4, industry free cash flow is $65.2 million, which is a decrease of $26.5 million, or a drop of 28.9 percent, compared to the no-new-standards case value of $91.7 million in 2029, the year leading up to the standards year. Approximately 8 percent of gas-fired instantaneous water heater shipments are expected to meet TSL 4 by the analyzed 2030 compliance date in the no-new-standards case.
TSL 4 would set the energy conservation standard for gas-fired
At TSL 4, the shipment-weighted average MPC for gas-fired instantaneous water heaters increases by 20.1 percent relative to the no-new-standards case shipment-weighted average MPC for gas-fired instantaneous water heaters in 2030. The increase in cashflow from the higher MSP outweighs the $60.1 million in conversion costs, causing a positive change in INPV at TSL 4 under this scenario.
Under the preservation of operating profit scenario, manufacturers earn the same per-unit operating profit as would be earned in the no-new-standards, but manufacturers do not earn additional profit from their investments. In this scenario, the manufacturer markup decreases in 2030. This reduction in the manufacturer markup and the $60.1 million in conversion costs incurred by manufacturers cause a negative change in INPV at TSL 4 under the preservation of operating profit scenario.
To quantitatively assess the potential impacts of amended energy conservation standards on direct employment in the gas-fired instantaneous water heater industry, DOE used feedback from stakeholder comments, the engineering analysis, and shipments analysis to estimate the domestic labor expenditures and number of direct employees in the no-new-standards case and in each of the standards cases during the analysis period.
In the July 2023 NOPR, DOE estimated that approximately 70 percent of consumer water heaters subject to the proposed amended standards were produced domestically. Of that 70 percent, DOE estimated that all gas-fired instantaneous water heaters, which currently account for 12 percent of the overall consumer water heater market, were produced outside of the United States. For the July 2024 NODA, DOE revised its direct employment analysis to account for Rinnai's new domestic production facility dedicated to manufacturing non-condensing gas-fired instantaneous water heaters. In the July 2024 NODA, DOE estimated that approximately 20 percent of gas-fired instantaneous water heaters were produced domestically. DOE derived this value by using its shipments analysis and public market share feedback.
In addition to Rinnai's market share feedback, DOE relied on the employment figures provided in Rinnai's comments in response to the July 2023 NOPR to estimate the potential range of direct employment impacts in 2030 (the analyzed compliance year) in the July 2024 NODA. Rinnai's comments indicated that there were 122 domestic production workers dedicated to manufacturing non-condensing gas-fired instantaneous water heaters in 2023. (Rinnai No. 1186 at p. 1) Using results of the shipments analysis, DOE projected that there would be approximately 128 domestic production workers in 2030 (the analyzed compliance year) in the no-new-standards case.
To establish a conservative lower bound, DOE assumed domestic manufacturers would shift production to foreign countries at efficiency levels that would likely necessitate condensing technology. The upper bound domestic direct employment estimate corresponds to a potential increase in the number of domestic workers that would result from amended energy conservation standards if manufacturers continue to produce the same scope of covered products within the United States after compliance takes effect (
For this final rule, DOE updated its estimate of domestic production workers of gas-fired instantaneous water heaters from 128 to 190
For the conservative lower bound of direct employment impacts for this final rule, DOE models a decrease of domestic direct employment of 190 production workers at TSL 1 through TSL 4 in 2030. This lower bound reflects the scenario where Rinnai chooses to continue to source condensing gas-fired instantaneous water heaters from Japan. In response to the July 2023 NOPR and July 2024 NODA, Rinnai commented that due to the large upfront investment required to repurpose its Georgia facility to accommodate production of condensing gas-fired instantaneous water heaters and its current production capacity of condensing gas-fired instantaneous water heaters in Japan, it is possible that manufacturing could shift overseas. (Rinnai No. 1186 at p. 23; Rinnai No. 1443 at pp. 21-22)
For the upper bound of direct employment impacts, using a shipment-weighted average, DOE estimates that the labor content required to produce a
Additional details on the analysis of direct employment, as well as the estimated labor content for each efficiency level, can be found in chapter 12 of the final rule TSD. Additionally, the employment impacts discussed in this section are independent of the employment impacts from the broader U.S. economy, which are documented in chapter 16 of the final rule TSD.
Nearly all gas-fired instantaneous water heater OEMs currently offer condensing gas-fired instantaneous water heater models. Of the 12 manufacturers identified, 11 manufacturers already offer a range of condensing gas-fired instantaneous water heater models that meet TSL 1. DOE estimates that condensing gas-fired instantaneous water heaters account for 67 percent of current shipments. For a condensing-level standard, most manufacturers would have to repurpose and retool assembly lines to produce only condensing models since the manufacturing processes (
As discussed in section IV.J of this document, using average cost assumptions to develop an industry cash flow estimate may not be adequate for assessing differential impacts among manufacturer subgroups. Small manufacturers, niche manufacturers, and manufacturers exhibiting a cost structure substantially different from the industry average could be affected disproportionately. DOE used the results of the industry characterization to group manufacturers exhibiting similar characteristics. Consequently, DOE identified small business manufacturers as a subgroup for a separate impact analysis.
For the small business subgroup analysis, DOE applied the small business size standards published by the U.S. Small Business Administration (“SBA”) to determine whether a company is considered a small business. The size standards are codified at 13 CFR part 121. To be categorized as a small business under North American Industry Classification System (“NAICS”) code 335220, “Major Household Appliance Manufacturing,” a gas-fired instantaneous water heater manufacturer and its affiliates may employ a maximum of 1,500 employees. The 1,500-employee threshold includes all employees in a business's parent company and any other subsidiaries. Based on this classification, DOE did not identify any manufacturers that qualify as a domestic small business.
The small business subgroup analysis is discussed in more detail in chapter 12 of the final rule TSD. DOE examines the potential impacts of this final rule on small business manufacturers in section VI.B of this document.
One aspect of assessing manufacturer burden involves looking at the cumulative impact of multiple DOE standards and the regulatory actions of other Federal agencies and States that affect the manufacturers of a covered product or equipment. While any one regulation may not impose a significant burden on manufacturers, the combined effects of several existing or impending regulations may have serious consequences for some manufacturers, groups of manufacturers, or an entire industry. Multiple regulations affecting the same manufacturer can strain profits and lead companies to abandon product lines or markets with lower expected future returns than competing products. For these reasons, DOE conducts an analysis of cumulative regulatory burden as part of its rulemakings pertaining to appliance efficiency.
For the cumulative regulatory burden analysis, DOE examined Federal, product-specific regulations that could affect gas-fired instantaneous water heater manufacturers and that take effect approximately 3 years before or after the estimated compliance date (2027 to 2033). This information is presented in table V.8.
This section presents DOE's estimates of the NES and the NPV of consumer benefits that would result from each of the TSLs considered as potential amended standards.
To estimate the energy savings attributable to potential amended standards for consumer gas-fired instantaneous water heaters, DOE compared their energy consumption under the no-new-standards case to their anticipated energy consumption under each TSL. The savings are measured over the entire lifetime of products purchased during the 30-year period that begins in the year of anticipated compliance with amended standards (2030-2059). Table V.9 presents DOE's projections of the NES for each TSL considered for consumer gas-fired instantaneous water heaters. The savings were calculated using the approach described in section IV.H.2 of this document.
OMB Circular A-4
DOE estimated the cumulative NPV of the total costs and savings for consumers that would result from the TSLs considered for consumer gas-fired instantaneous water heaters. In accordance with OMB Circular A-4, DOE calculated NPV using both a 7-percent and a 3-percent real discount rate. Table V.11 shows the consumer NPV results with impacts counted over the lifetime of products purchased during the period 2030-2059.
The NPV results based on the aforementioned 9-year analytical period are presented in table V.12. The impacts are counted over the lifetime of products purchased during the period 2030-2038. As mentioned previously, such results are presented for informational purposes only and are not indicative of any change in DOE's analytical methodology or decision criteria.
The previous results reflect the use of a default trend to estimate the change in price for consumer gas-fired instantaneous water heaters over the analysis period (
DOE estimates that amended energy conservation standards for consumer gas-fired instantaneous water heaters will reduce energy expenditures for consumers of those products, with the resulting net savings being redirected to other forms of economic activity. These expected shifts in spending and economic activity could affect the demand for labor. As described in section IV.N of this document, DOE used an input/output model of the U.S. economy to estimate indirect employment impacts of the TSLs that DOE considered. There are uncertainties involved in projecting employment impacts, especially changes in the later years of the analysis. Therefore, DOE generated results for near-term timeframes (2030-2034), where these uncertainties are reduced.
The results suggest that the adopted standards are likely to have a negligible impact on the net demand for labor in the economy. The net change in jobs is so small that it would be imperceptible in national labor statistics and might be offset by other, unanticipated effects on employment. Chapter 16 of the final rule TSD presents detailed results regarding anticipated indirect employment impacts.
As discussed in section III.F.1.d of this document, DOE has concluded that the standards adopted in this final rule will not lessen the utility or performance of the gas-fired instantaneous water heaters under consideration in this rulemaking. Manufacturers of these products currently offer units that meet or exceed the adopted standards.
DOE considered any lessening of competition that would be likely to result from new or amended standards. As discussed in section III.F.1.e of this document, EPCA directs the Attorney General of the United States (“Attorney General”) to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination in writing to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. To assist the Attorney General in making this determination, DOE provided the Department of Justice (“DOJ”) with copies of the NOPR and the TSD for review. In its assessment letter responding to DOE, DOJ concluded that the proposed energy conservation standards for gas-fired instantaneous water heaters are unlikely to substantially lessen competition. DOE is publishing the Attorney General's assessment at the end of this final rule.
Enhanced energy efficiency, where economically justified, improves the Nation's energy security, strengthens the economy, and reduces the environmental impacts (costs) of energy production. Chapter 15 in the final rule TSD presents the estimated impacts on electricity-generating capacity, relative to the no-new-standards case, for the TSLs that DOE considered in this rulemaking.
Energy conservation resulting from potential energy conservation standards for gas-fired instantaneous water heaters is expected to yield environmental benefits in the form of reduced emissions of certain air pollutants and GHG. Table V.13 provides DOE's estimate of cumulative emissions reductions expected to result from the TSLs considered in this rulemaking. In the case of mercury, negative values (denoted in parenthesis) indicate a slight increase in emissions due to slightly higher electricity use at those TSLs. The emissions were calculated using the multipliers discussed in section IV.K of this document. DOE reports annual emissions reductions for each TSL in chapter 13 of the final rule TSD.
As part of the analysis for this rule, DOE estimated monetary benefits likely to result from the reduced emissions of CO
As discussed in section IV.L.2, DOE estimated the climate benefits likely to result from the reduced emissions of methane and N
DOE is well aware that scientific and economic knowledge about the contribution of CO
DOE also estimated the monetary value of the economic benefits associated with NO
Not all the public health and environmental benefits from the reduction of GHG, NOx, and SO
The Secretary, in determining whether a standard is economically justified, may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No other factors were considered in this analysis.
Table V.22 and table V.23 present the NPV values that result from adding the estimates of the economic benefits resulting from reduced GHG and NO
When considering new or amended energy conservation standards, the standards that DOE adopts for any type (or class) of covered product must be designed to achieve the maximum improvement in energy efficiency that the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining whether a standard is economically justified, the Secretary must determine whether the benefits of the standard exceed its burdens by, to the greatest extent practicable, considering the seven statutory factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard must also result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)).
For this final rule, DOE considered the impacts of amended standards for gas-fired instantaneous water heaters at each TSL, beginning with the maximum technologically feasible level, to determine whether that level was economically justified. Where the max-tech level was not justified, DOE then considered the next most efficient level and undertook the same evaluation until it reached the highest efficiency level that is both technologically feasible and economically justified and saves a significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of each TSL, tables in this section present a summary of the results of DOE's quantitative analysis for each TSL. In addition to the quantitative results presented in the tables, DOE also considers other burdens and benefits that affect economic justification. These include the impacts on identifiable subgroups of consumers who may be disproportionately affected by a national standard and impacts on employment.
DOE also notes that the economics literature provides a wide-ranging discussion of how consumers trade off upfront costs and energy savings in the absence of government intervention. Much of this literature attempts to explain why consumers appear to undervalue energy efficiency improvements. There is evidence that consumers undervalue future energy savings as a result of: (1) a lack of information; (2) a lack of sufficient salience of the long-term or aggregate benefits; (3) a lack of sufficient savings to warrant delaying or altering purchases; (4) excessive focus on the short term, in the form of inconsistent weighting of future energy cost savings relative to available returns on other investments; (5) computational or other difficulties associated with the evaluation of relevant tradeoffs; and (6) a divergence in incentives (for example, between renters and owners, or builders and purchasers). Having less than perfect foresight and a high degree of uncertainty about the future, consumers may trade off these types of investments at a higher than expected rate between current consumption and uncertain future energy cost savings.
In DOE's current regulatory analysis, potential changes in the benefits and costs of a regulation due to changes in consumer purchase decisions are included in two ways. First, if
While DOE is not prepared at present to provide a fuller quantifiable framework for estimating the benefits and costs of changes in consumer purchase decisions due to an energy conservation standard, DOE is committed to developing a framework that can support empirical quantitative tools for improved assessment of the consumer welfare impacts of appliance standards. DOE has posted a paper that discusses the issue of consumer welfare impacts of appliance energy conservation standards, and potential enhancements to the methodology by which these impacts are defined and estimated in the regulatory process.
Table V.24 and table V.25 summarize the quantitative impacts estimated for each TSL for gas-fired instantaneous water heaters with effective storage volumes less than 2 gallons and with rated inputs greater than or equal to 50,000 Btu/h. The national impacts are measured over the lifetime of gas-fired instantaneous water heaters purchased during the 30-year period that begins in the anticipated year of compliance with amended standards (2030-2059). The energy savings, emissions reductions, and value of emissions reductions refer to full-fuel-cycle results. DOE is presenting monetized benefits of GHG emissions reductions in accordance with the applicable Executive Orders, and DOE would reach the same conclusion presented in this final rule in the absence of the estimated benefits from reductions in GHG emissions, including the estimates published by EPA in December 2023 or the Interim Estimates presented by the Interagency Working Group in 2021. The efficiency levels contained in each TSL are described in section V.A of this document.
DOE first considered TSL 4, which represents the max-tech efficiency level analyzed for gas-fired instantaneous water heaters with current UEF-based standards. At TSL 4, the design option pathway includes the use of high-efficiency flat-plate condensing heat exchangers and fully modulating burners. TSL 4 would require extensive changes to the way manufacturers currently produce gas-fired instantaneous water heaters. At TSL 4, approximately 8 percent of shipments are expected to meet the required efficiency levels by 2030 in the no-new-standards case; therefore, a significant ramp-up in manufacturing capacity would be needed to support the market transition.
TSL 4 would save an estimated 1.07 quads of energy, an amount DOE considers significant. Under TSL 4, the NPV of consumer benefit would be $0.98 billion using a discount rate of 7 percent, and $4.50 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 54 Mt of CO
Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO
At TSL 4, consumers will experience an average LCC savings of $39, which includes the cost of purchasing and installing a more expensive model with fully modulating burner technology. The fraction of consumers experiencing a net LCC cost is 56.2 percent.
At TSL 4, the projected change in INPV ranges from a decrease of $74.5 million to an increase of $81.2 million, which corresponds to a decrease of 6.2 percent and an increase of 6.8 percent, respectively. The range of impacts is driven primarily by the ability of manufacturers to recover their investments. DOE estimates that industry would need to invest $60.1 million to comply with standards set at TSL 4. At this level, given the greater complexity and assembly time of max-tech models, most manufacturers would need to add production lines to meet demand, which would require large capital investments and updates to the factory floor. The investment required to add production capacity would vary by manufacturer as it depends on floor space availability in and around existing manufacturing plants. Manufacturers would also need to upgrade their facilities to accommodate the production of models with large, high-efficiency condensing heat exchangers and fully modulating burners. DOE understands that implementing larger, improved condensing heat exchanger designs would add a significant amount of complexity to the manufacturing process. Feedback from confidential interviews and public comments indicate that it would require notable investment to incorporate fully modulating burners into their gas-fired instantaneous water heater designs. Of the 12 gas-fired instantaneous water heater OEMs, five OEMs offer 19 models that meet TSL 4 (which represents approximately 14 percent of gas-fired instantaneous water heater basic model listings).
The Secretary concludes that at TSL 4 for gas-fired instantaneous water heaters, the benefits of energy savings, positive NPV of consumer benefits, emissions reductions, and estimated monetary value of the emissions reductions would be outweighed by economic impacts to manufacturers (driven by the ramp-up in scale and offerings needed to support max-tech efficiencies), and a majority of consumers would experience a net cost (56.2 percent). At TSL 4, most manufacturers would need to add production lines to meet demand, which would require large capital expenditures. DOE projects that only 8 percent of shipments would meet TSL 4 efficiencies by 2030 in the no-new-standards case. Consequently, the Secretary has concluded that TSL 4 is not economically justified.
DOE then considered TSL 3, which represents the next highest efficiency level analyzed for gas-fired instantaneous water heaters with current UEF-based standards and represents efficiencies that can meet the current ENERGY STAR specification. At TSL 3, the design option pathway includes the use of high-efficiency flat-plate condensing heat exchangers. TSL 3 may also require changes to the way manufacturers currently produce gas-fired instantaneous water heaters since many designs on the market today use tube heat exchangers. At TSL 3, approximately 16 percent of shipments are expected to meet the required efficiency levels by 2030 in the no-new-standards case.
TSL 3 would save an estimated 0.85 quads of energy, an amount DOE considers significant. Under TSL 3, the NPV of consumer benefit would be $1.45 billion using a discount rate of 7 percent, and $4.89 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 46 Mt of CO
Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO
At TSL 3, consumers will experience an average LCC savings of $90, which includes the cost of purchasing and installing a more expensive condensing model. The fraction of consumers experiencing a net LCC cost is 25.0 percent.
At TSL 3, the projected change in INPV ranges from a decrease of $61.8 million to an increase of $23.7 million, which corresponds to a decrease of 5.2 percent and an increase of 2.0 percent, respectively. As with TSL 4, the range of impacts is driven primarily by the ability of manufacturers to recover their investments. DOE estimates that industry must invest $60.1 million to comply with standards set at TSL 3. At this level, DOE expects manufacturers would implement the same high-efficiency heat exchanger design as at max-tech and increase the condensing heat exchanger area relative to lower efficiency levels but not to the extent as required at max-tech. Given the greater complexity and assembly time of high-efficiency models, most manufacturers would need to add production lines to meet demand, which would require capital investments and potential updates to the factory floor. The investment required to add production capacity would vary by manufacturer as it depends on floor space availability in and around existing manufacturing plants. Manufacturers would also need to upgrade their facilities to accommodate the production of models
The Secretary concludes that at TSL 3 for gas-fired instantaneous water heaters, the benefits of energy savings, positive NPV of consumer benefits, emissions reductions, and estimated monetary value of the emissions reductions would be outweighed by economic impacts to manufacturers (driven by the potential conversion costs for production equipment and tooling, as well as the ramp-up in production necessary for all model lines to meet this efficiency). At TSL 3, most manufacturers would need to add production lines to meet demand. Consequently, the Secretary has concluded that TSL 3 is not economically justified.
DOE then considered TSL 2, which represents the next highest efficiency level analyzed for gas-fired instantaneous water heaters with current UEF-based standards. TSL 2 also aligns with the Joint Stakeholder Recommendation efficiency level. At TSL 2, the design option pathway includes the use of condensing heat exchangers. At TSL 2, approximately 62 percent of shipments are expected to meet the required efficiency levels by 2030 in the no-new-standards case, which is a significant increase from TSL 3 and TSL 4.
TSL 2 would save an estimated 0.58 quads of energy, an amount DOE considers significant. Under TSL 2, the NPV of consumer benefit would be $0.87 billion using a discount rate of 7 percent, and $3.06 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 2 are 32 Mt of CO
Using a 7-percent discount rate for consumer benefits and costs, health benefits from reduced SO
At TSL 2, consumers will experience an average LCC savings of $112 which includes the cost of purchasing and installing a more expensive condensing model. The fraction of consumers experiencing a net LCC cost is 15.2 percent.
At TSL 2, the projected change in INPV ranges from a decrease of $33.7 million to an increase of $40.5 million, which corresponds to a decrease of 2.8 percent and an increase of 3.4 percent, respectively. DOE estimates that industry must invest $20.4 million to comply with standards set at TSL 2.
At higher TSLs, the primary driver of high conversion costs is the required capital investment to meet market demand for high-efficiency condensing gas-fired instantaneous water heaters. However, at TSL 2, industry has extensive experience producing gas-fired instantaneous water heater models that meet this level, and, furthermore, this TSL was strongly supported by a coalition of industry stakeholders, including manufacturers. DOE believes that having major manufacturers and the industry trade association sign on to the Joint Stakeholder Recommendation is a testament to industry's ability to ramp up capacity to produce volumes necessary to support a transition to condensing efficiencies at TSL 2. Based on manufacturer feedback, DOE does not expect that most manufacturers would need to add production lines at this level. All 12 gas-fired instantaneous water heater OEMs currently manufacture condensing gas-fired instantaneous water heater models. Of these 12 OEMs, 10 OEMs currently manufacture condensing gas-fired instantaneous water heater models that meet this level. Collectively, these 10 OEMs offer 71 unique basic models that meet TSL 2 (which represent approximately 51 percent of gas-fired instantaneous water heater basic model listings). Furthermore, these 10 OEMs account for the majority of gas-fired instantaneous water heater sales, representing over 95 percent of industry shipments.
After considering the analysis and weighing the benefits and burdens, the Secretary has concluded that standards set at TSL 2 for gas-fired instantaneous water heaters would be economically justified. At this TSL, the average LCC savings for consumers are expected to be positive. The FFC national energy savings are significant and the NPV of consumer benefits is positive using both a 3-percent and 7-percent discount rate. These national benefits vastly outweigh the costs. The standard levels at TSL 2 are economically justified even without weighing the estimated monetary value of emissions reductions. When those emissions reductions are included—representing $7.1 billion in climate benefits (associated with the average SC-GHG at a 2-percent near-term Ramsey discount rate using the 2023 SC-GHG estimates) or $1.7 billion in climate benefits (associated with the average SC-GHG at a 3-percent discount rate using the 2021 interim SC-GHG estimate), and $0.9 billion (using a 7-percent discount rate) or $2.7 billion (using a 3-percent discount rate) in health benefits—the rationale becomes stronger still. In addition, DOE considered that TSL 2 is representative of the Joint Stakeholder Recommendation. More specifically, DOE believes the Joint Stakeholder agreement from a cross-section group of stakeholders provides DOE with a good indication of stakeholder views on this rulemaking and some assurance that industry can transition to these levels. And, as indicated by DOE's analysis, the market will see significant benefits at this efficiency level.
Accordingly, the Secretary has concluded that TSL 2 would offer the maximum improvement in efficiency that is technologically feasible and economically justified, and would result in significant conservation of energy. Lastly, TSL 2 represents the recommended standard levels submitted by Joint Stakeholders to DOE, providing
As stated, DOE conducts the walk-down analysis to determine the TSL that represents the maximum improvement in energy efficiency that is technologically feasible and economically justified as required under EPCA. The walk-down is not a comparative analysis, as a comparative analysis would result in the maximization of net benefits instead of energy savings that are technologically feasible and economically justified, which would be contrary to the statute. 86 FR 70892, 70908. Although DOE has not conducted a comparative analysis to select the amended energy conservation standards, DOE notes that at higher TSLs, larger fractions of consumers experience increased costs greater than operating savings, and manufacturer investments to meet consumer demand would be significantly higher.
Therefore, based on the above considerations, DOE adopts the conservation standards for consumer water heaters at TSL 2 for those product classes where there are existing applicable UEF standards. For the remaining product classes, DOE adopts converted standards in the UEF metric based on the amended appendix E test procedure. The amended energy conservation standards for gas-fired instantaneous water heaters, which are expressed as UEF, are shown in table V.26.
The benefits and costs of the adopted standards can also be expressed in terms of annualized values. The annualized net benefit is: (1) the annualized national economic value (expressed in 2023$) of the benefits from operating products that meet the adopted standards (consisting primarily of operating cost savings from using less energy), minus increases in product purchase costs; and (2) the annualized monetary value of the climate and health benefits.
Table V.27 shows the annualized values for gas-fired instantaneous water heaters analyzed under TSL 2, expressed in 2023$. The results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and health benefits from reduced NO
Using a 3-percent discount rate for consumer benefits and costs and health benefits from reduced NO
As discussed in section II.A of this document, DOE is conducting this rulemaking in satisfaction of the lookback review provisions and the UEF metric provisions in EPCA.
Executive Order (“E.O.”) 12866, “Regulatory Planning and Review,” as supplemented and reaffirmed by E.O. 13563, “Improving Regulation and Regulatory Review,” 76 FR 3821 (Jan. 21, 2011) and amended by E.O. 14094, “Modernizing Regulatory Review,” 88 FR 21879 (April 11, 2023), requires agencies, to the extent permitted by law, to: (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public. DOE emphasizes as well that E.O. 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management and Budget has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. For the reasons stated in the preamble, this final regulatory action is consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit “significant regulatory actions” to OIRA for review. OIRA has determined that this final regulatory action constitutes a “significant regulatory action” within the scope of section 3(f)(1) of E.O. 12866, as amended by E.O. 14094. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE has provided to OIRA an assessment, including the underlying analysis, of benefits and costs anticipated from the final regulatory action, together with, to the extent feasible, a quantification of those costs; and an assessment, including the underlying analysis, of costs and benefits of potentially effective and reasonably feasible alternatives to the planned regulation, and an explanation why the planned regulatory action is preferable to the identified potential alternatives. These assessments are summarized in this preamble and further detail can be found in the technical support document for this rulemaking.
The Regulatory Flexibility Act (5 U.S.C. 601
DOE reviewed this final rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. DOE certifies that this final rule would not have a significant economic impact on a substantial number of small entities. As such, DOE has not prepared a FRFA for the products that are the subject of this rulemaking. The factual basis of this certification is set forth in the following paragraphs.
For manufacturers of gas-fired instantaneous water heaters, the SBA has set a size threshold, which defines those entities classified as “small businesses” for the purposes of the statute. DOE used the SBA's small business size standards to determine whether any small entities would be subject to the requirements of the rule. (
To estimate the number of companies that could be small business manufacturers of gas-fired instantaneous water heaters, DOE conducted a market survey using public information and subscription-based company reports to identify potential small business manufacturers. DOE reviewed DOE's Compliance Certification Database,
DOE identified 12 OEMs of gas-fired instantaneous water heaters subject to more stringent standards. Of these 12 OEMs, DOE did not identify any domestic OEMs that meet SBA's definition of a “small business.” Given the lack of small, domestic OEMs with a direct compliance burden, DOE concludes that this final rule would not have “a significant impact on a substantial number of small entities.”
DOE has transmitted the certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b).
In response to the July 2023 NOPR, the Gas Association Commenters and NPGA, APGA, AGA, and Rinnai submitted comments noting that DOE identified only two small businesses, neither of which produce gas-fired water heaters. As a result, these commenters stated that DOE has no data on small businesses that produce gas-fired water heaters relative to redesign costs, product availability, or whether the proposed efficiency levels could cause small businesses to exit the market. (Gas Association Commenters No. 1181, pp. 38-39; NPGA, APGA, AGA, and Rinnai, No. 441 at p. 5) NPGA, APGA, AGA, and Rinnai asserted that the July 2023 NOPR fails to comply with Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” and must be addressed. (NPGA, APGA, AGA, and Rinnai, No. 441 at p. 5)
For the IRFA conducted in support of the July 2023 NOPR, which proposed standards for covered consumer water heaters, DOE identified one small domestic OEM of oil-fired storage water heaters and one small domestic OEM of electric storage water heaters. For this certification, DOE refreshed its product database to include up-to-date information on gas-fired instantaneous water heaters marketed for the United States. Based on its comprehensive review of the gas-fired instantaneous water heater market, DOE maintains its finding from the IRFA that there are no small, domestic OEMs that manufacture gas-fired instantaneous water heaters. As such, DOE does not expect that the standards adopted in this final rule would directly impact small businesses that manufacture gas-fired instantaneous water heaters.
DOE did not receive written comments in response to the July 2024 NODA that specifically addressed the potential impacts on small businesses.
Manufacturers of gas-fired instantaneous water heaters must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for gas-fired instantaneous water heaters, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including gas-fired instantaneous water heaters. (
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.
Pursuant to the National Environmental Policy Act of 1969 (“NEPA”), DOE has analyzed this rule in accordance with NEPA and DOE's NEPA implementing regulations (10 CFR part 1021). DOE has determined that this rule qualifies for categorical exclusion under 10 CFR part 1021, subpart D, appendix B5.1 because it is a rulemaking that establishes energy conservation standards for consumer products or industrial equipment, none of the exceptions identified in B5.1(b) apply, no extraordinary circumstances exist that require further environmental analysis, and it meets the requirements for application of a categorical exclusion. See 10 CFR 1021.410. Therefore, DOE has determined that promulgation of this rule is not a major Federal action significantly affecting the quality of the human environment within the meaning of NEPA, and does not require an environmental assessment or an environmental impact statement.
E.O. 13132, “Federalism,” 64 FR 43255 (Aug. 10, 1999), imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. The Executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this rule and has determined that it would 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. EPCA governs and
With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of E.O. 12988, “Civil Justice Reform,” imposes on Federal agencies the general duty to adhere to the following requirements: (1) eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. 61 FR 4729 (February 7, 1996). Regarding the review required by section 3(a), section 3(b) of E.O. 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of E.O. 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this final rule meets the relevant standards of E.O. 12988.
Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy statement is also available at
DOE has concluded that this final rule may require expenditures of $100 million or more in any one year by the private sector. Such expenditures may include: (1) investment in research and development and in capital expenditures by gas-fired instantaneous water heater manufacturers in the years between the final rule and the compliance date for the new standards; and (2) incremental additional expenditures by consumers to purchase higher-efficiency gas-fired instantaneous water heaters, starting at the compliance date for the applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the content requirements of UMRA in any other statement or analysis that accompanies the final rule. (2 U.S.C. 1532(c)) The content requirements of section 202(b) of UMRA relevant to a private sector mandate substantially overlap the economic analysis requirements that apply under section 325(o) of EPCA and Executive Order 12866. The preamble section of this document and the TSD for this final rule respond to those requirements.
Under section 205 of UMRA, DOE is obligated to identify and consider a reasonable number of regulatory alternatives before promulgating a rule for which a written statement under section 202 is required. (2 U.S.C. 1535(a)) DOE is required to select from those alternatives the most cost-effective and least burdensome alternative that achieves the objectives of the rule unless DOE publishes an explanation for doing otherwise, or the selection of such an alternative is inconsistent with law. As required by 42 U.S.C. 6295(m), this final rule establishes amended energy conservation standards for gas-fired instantaneous water heaters that are designed to achieve the maximum improvement in energy efficiency that DOE has determined to be both technologically feasible and economically justified, as required by sections 6295(o)(2)(A) and 6295(o)(3)(B). A full discussion of the alternatives considered by DOE is presented in chapter 17 of the TSD for this final rule.
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any proposed rule or policy that may affect family well-being. When developing a Family Policymaking Assessment, agencies must assess whether: (1) the action strengthens or erodes the stability or safety of the family and, particularly, the marital commitment; (2) the action strengthens or erodes the authority and rights of parents in the education, nurture, and supervision of their children; (3) the action helps the family perform its functions, or substitutes governmental activity for the function; (4) the action increases or decreases disposable income or poverty of families and children; (5) the proposed benefits of the action justify the financial impact on the family; (6) the action may be carried out by State or local government or by the family; and whether (7) the action establishes an implicit or explicit policy concerning the relationship between the behavior and personal responsibility of youth, and the norms of society. In evaluating the above factors, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment as none of the above factors are implicated. Further, this proposed determination would not have any financial impact on families nor any impact on the autonomy or integrity of the family as an institution.
DOE has considered how the benefits of this final rule compare to the possible financial impact on a family (the only factor listed that is relevant to this proposed rule). As part of its rulemaking process, DOE must determine whether the energy conservation standards enacted in this final rule are economically justified. As discussed in section V.C.1 of this document, DOE has determined that the standards enacted in this final rule are economically justified because the benefits to consumers would far outweigh the costs to manufacturers. Families will also see LCC savings as a result of this final rule. Moreover, as discussed further in section V.B.1 of this document, DOE has determined that for low-income households, average LCC savings and
Pursuant to E.O. 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 18, 1988), DOE has determined that this rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving Implementation of the Information Quality Act (April 24, 2019), DOE published updated guidelines which are available at
E.O. 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that: (1) is a significant regulatory action under Executive Order 12866, or any successor order, and is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) is designated by the Administrator of OIRA as a significant energy action. For any significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
DOE has concluded that this regulatory action, which sets forth amended energy conservation standards for gas-fired instantaneous water heaters, is not a significant energy action because the standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects on this final rule.
On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy (“OSTP”), issued its Final Information Quality Bulletin for Peer Review (“the Bulletin”). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the Bulletin is to enhance the quality and credibility of the Government's scientific information. Under the Bulletin, the energy conservation standards rulemaking analyses are “influential scientific information,” which the Bulletin defines as “scientific information the agency reasonably can determine will have, or does have, a clear and substantial impact on important public policies or private sector decisions.” 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of the energy conservation standards development process and the analyses that are typically used and prepared a report describing that peer review.
As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule prior to its effective date. The report will state that the Office of Information and Regulatory Affairs has determined that the rule meets the criteria set forth in 5 U.S.C. 804(2).
The Secretary of Energy has approved publication of this final rule.
Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Intergovernmental relations, Reporting and recordkeeping requirements, and Small businesses.
This document of the Department of Energy was signed on December 16, 2024, by Jeffrey Marootian, Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
For the reasons set forth in the preamble, DOE amends part 430 of chapter II, subchapter D, of title 10 of the Code of Federal Regulations, as set forth below:
42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
(d) * * *
(3) The uniform energy factor of water heaters manufactured on or after December 26, 2029 shall not be less than the following:
(4) The provisions of paragraph (d) of this section are separate and severable from one another. Should a court of competent jurisdiction hold any provision(s) of paragraph (d) of this section to be stayed or invalid, such action shall not affect any other provision of paragraph (d) of this section.
The following letter will not appear in the Code of Federal Regulations.
I am responding to your August 23, 2023 letter seeking the views of the Attorney General about the potential impact on competition of proposed energy conservation standards for consumer water heaters.
Your request was submitted under section 325(o)(2)(B)(i)(V) of the Energy Policy and Conservation Act, as amended (ECPA), 42 U.S.C. 6295(o)(2)(B)(i)(V), which requires the Attorney General to determine the impact of any lessening of competition that is likely to result from the imposition of proposed energy conservation standards. The Attorney General's responsibility for responding to requests from other departments about the effect of a program on competition has been delegated to the Assistant Attorney General for the Antitrust Division in 28 CFR 0.40(g). The Assistant Attorney General for the Antitrust Division has authorized me, as the Policy Director for the Antitrust Division, to provide the Antitrust Division's views regarding the potential impact on competition of proposed energy conservation standards on his behalf.
In conducting its analysis, the Antitrust Division examines whether a proposed standard may lessen competition, for example, by substantially limiting consumer choice, by placing certain manufacturers at an unjustified competitive disadvantage, or by inducing avoidable inefficiencies in production or distribution of particular products. A lessening of competition could result in higher prices to manufacturers and consumers.
We have reviewed the proposed standards contained in the notice of proposed rulemaking (“NOPR”) (88 FR 49058, July 28, 2023) and the related Technical Support Document. We have also reviewed public comments and information provided by industry participants and have reviewed the transcript and information presented at the Webinar of the Public Meeting held on September 13, 2023. Based on this review, we do not have an evidentiary basis to conclude that the proposed energy conservation standards for consumer water heaters are likely to substantially lessen competition.
Food and Drug Administration, Department of Health and Human Services (HHS).
Final rule.
The Food and Drug Administration (FDA, the Agency, or we) is issuing a final rule to establish requirements for a nonprescription drug product with an additional condition for nonprescription use (ACNU). A nonprescription drug product with an ACNU is a drug product that could be marketed without a prescription if an applicant implements an additional condition to ensure appropriate self-selection or appropriate actual use, or both, by consumers without the supervision of a practitioner licensed by law to administer such drug. The final rule is intended to increase options for applicants to develop and market safe and effective nonprescription drug products and increase consumer access to appropriate, safe, and effective drug products, which could improve public health.
This rule is effective January 27, 2025.
For access to the docket to read background documents or comments received, go to
FDA is finalizing this rule to establish requirements for a nonprescription drug product with an ACNU. A nonprescription drug product with an ACNU is a drug product that could be legally marketed without a prescription if an applicant implements an additional condition to ensure appropriate self-selection or appropriate actual use, or both, by consumers without the supervision of a practitioner licensed by law to administer such drug. Without this rule, nonprescription drug products are limited to drug products that can be labeled with sufficient information for consumers to appropriately self-select and use the drug product without the supervision of a practitioner licensed by law to administer such drug. For certain drug products, labeling alone cannot adequately communicate the information needed for consumers to appropriately self-select or use the drug product without the supervision of a practitioner licensed by law to administer such drug. The final rule is intended to increase options for applicants
This final rule establishes requirements for a nonprescription drug product with an ACNU, including application, labeling, and postmarketing reporting requirements. In addition to applicable existing application requirements, the final rule establishes the specific requirements for a new drug application (NDA) or abbreviated new drug application (ANDA) for a nonprescription drug product with an ACNU. In circumstances where a prescription drug product is already approved, the rule requires an applicant to submit a separate application for the approval of a nonprescription drug product with an ACNU, rather than a supplement to the existing application for the approved prescription drug product. The final rule establishes specific labeling requirements, including the content and format of specific labeling statements. Additionally, the rule requires that an applicant submit a postmarketing report of an ACNU failure.
The final rule clarifies that an ACNU constitutes a meaningful difference
The final rule specifies that FDA will refuse to approve an application for a nonprescription drug product with an ACNU if the application fails to meet applicable requirements.
The final rule exempts a nonprescription drug product with an ACNU from the requirement to be labeled with adequate directions for use, provided that certain labeling conditions are met and the ACNU is implemented by the applicant as approved by FDA.
Finally, the final rule explains certain circumstances in which a nonprescription drug product with an ACNU would be misbranded.
FDA received many comments supporting the proposed rule's intent to increase options for applicants to develop and market safe and effective nonprescription drug products and increase consumer access to appropriate, safe, and effective drug products. Additionally, we received comments expressing concerns about certain proposed requirements and the burden of those requirements for applicants. In response to several comments expressing concerns about the proposed postmarketing reporting requirements for nonprescription drug products with an ACNU, we are revising the proposed requirements to provide greater clarity for when a postmarketing report of ACNU failure must be submitted to FDA and to reduce the burden on applicants by decreasing any potential unnecessary reporting and ensuring consistency with existing postmarketing reporting requirements. In response to several comments about the proposed labeling statements on the principal display panel (PDP) and Drug Facts labeling (DFL), we are revising the proposed labeling requirements to allow FDA to approve an applicant's proposed labeling statements that vary somewhat from the labeling statements in the codified text, under certain circumstances. Additionally, we are revising the proposed labeling requirements to allow flexibility for the placement of the labeling statement on the DFL depending on the purpose of the ACNU.
This final rule, which establishes requirements for a nonprescription drug product with an ACNU, is authorized by sections 201(n), 502, 503(b), 505, and 701(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 321(n), 352, 353(b), 355, and 371(a)).
The final rule establishes requirements for a nonprescription drug product with an ACNU. Compared to traditional nonprescription drug products, which consumers must be able to self-select and use based on their labeling, this approved ACNU, in addition to the labeling, will ensure the appropriate self-selection, the appropriate use, or both of a nonprescription drug product without the supervision of a practitioner licensed by law to administer such drug. We expect this rule will expand consumer access to certain drug products in a nonprescription setting and increase options for applicants to develop and market safe and effective nonprescription drug products.
We estimate a reduction in access costs to consumers who could transfer from a prescription to a nonprescription drug product with an ACNU. In our analysis, access costs include the time to see a doctor to obtain a prescription, including waiting time and other transportation costs. We also include co-pay and out-of-pocket costs in our estimate of access costs. We compare the baseline access costs to the access costs under potential scenarios with the final rule to estimate the potential benefits for each consumer purchase. In this analysis, we use the costs to obtain candidate prescription-only products as our baseline access cost. Our primary estimate of reduction in access costs is $33.62 per consumer per purchase with a range of $0 to $67.23. We also quantify the value of the potential reduction in the number of meetings with applicants that will occur during the approval process. This estimate includes benefits to FDA and industry. Our primary estimate is $68,773.11 per applicant with a range of $56,332.65 to $81,763.56. We do not monetize our estimates of benefits over a 10-year horizon because of the high uncertainty about the number of applicants, applications, potential approvals, and purchases that might occur; and consumer preferences to switch drug products. However, we present estimates in the uncertainty section of this analysis.
Although an applicant will incur the costs to develop and submit an application for a nonprescription drug product with an ACNU, for this analysis, we assume that applicants submit applications only when they believe that the profits from the approval will exceed the costs of the application. We lack information to monetize these potential profits and costs over a 10-year horizon.
Monetized costs include a one-time cost of reading and understanding the rule per interested party in pursuing this path for their drug products. We do not monetize these estimates for more than one interested party because of the high uncertainty about the number of interested parties over this time horizon. The primary estimate equals $1,156.74 with a range of $533.88 to $1,779.60.
Government-sponsored and commercial insurance payers may experience cost savings because the availability of nonprescription drug products with an ACNU may decrease insurance claims and, potentially, future medical costs. For example, access to drug products under this new paradigm will allow consumers to treat some medical conditions using nonprescription drug products with an ACNU without the supervision of a practitioner licensed by law to administer such drug. We do not estimate such cost savings due to lack of data.
Nonprescription drug products are important for the treatment of many conditions and diseases. Unlike prescription drug products, nonprescription drug products may be accessed and used safely and effectively by consumers without the supervision of a practitioner licensed by law to administer such drugs for their intended use. At present, the majority of nonprescription drug products are intended to provide temporary relief of minor symptoms or to treat self-limited conditions and diseases. Nonprescription drug products are usually available for consumers to purchase at pharmacies, supermarkets, or other retail locations, and from online retailers.
FDA recognizes the potential benefit of providing consumers with access to additional types of nonprescription drug products, such as some drug products that are currently available only by prescription and that treat certain chronic diseases or conditions. This rule will increase options for applicants to develop and market safe and effective nonprescription drug products and increase consumer access to appropriate, safe, and effective drug products. The availability of nonprescription drug products with an ACNU may provide public health benefits by facilitating consumers' ability to care for themselves and access to appropriate medical treatment. For more information on the need for regulation, see 87 FR 38313 (June 28, 2022; 2022 proposed rule).
There are two regulatory pathways to bring a nonprescription drug product to market in the United States: (1) the over-the-counter (OTC) drug review process under section 505G of the FD&C Act (21 U.S.C. 355h) and (2) the new drug application process under section 505 of the FD&C Act (21 U.S.C. 355). Under the OTC drug review process, a nonprescription drug product may be marketed without an approved NDA or ANDA under section 505 of the FD&C Act if the nonprescription drug product meets the requirements of section 505G of the FD&C Act, and other applicable requirements in the FD&C Act and implementing regulations.
FDA approves drugs as either prescription or nonprescription drug products under section 505 of the FD&C Act. A drug must be dispensed by prescription when it is not safe for use except under the supervision of a practitioner licensed by law to administer such drug product because of its toxicity or other potentiality for harmful effect, or the method of its use, or the collateral measures necessary to its use (see section 503(b)(1) of the FD&C Act). If the approved drug does not meet the criteria for prescription-only dispensing, it may be marketed as nonprescription. For more on FDA's regulatory framework for nonprescription drug products, see the 2022 proposed rule entitled “Nonprescription Drug Product With an Additional Condition for Nonprescription Use” (87 FR 38313).
In the 2022 proposed rule, FDA proposed requirements for a nonprescription drug product with an ACNU, a drug product that could be marketed without a prescription if an applicant implements an additional condition to ensure appropriate self-selection or appropriate actual use, or both, by consumers without the supervision of a healthcare practitioner. The proposed rule proposed additional application requirements, labeling requirements, and postmarketing reporting requirements for a nonprescription drug product with an ACNU. For more information on the history of rulemaking for the proposed rule, see 87 FR 38313.
We received approximately 200 comments. Comments were submitted by different entities and individuals including private citizens, consumer groups, trade organizations, pharmaceutical industry, and public advocacy groups. We received comments on different topics including:
• General support for or opposition to the proposed rule;
• The applicability of the proposed rule and whether certain drug products are appropriate for development as a nonprescription drug product with an ACNU;
• The proposed definition of ACNU;
• The proposed requirements for an application for a nonprescription drug product with an ACNU, including specific application requirements such as the submission of a separate application, labeling, and postmarketing reports;
• The simultaneous marketing of prescription drug products and nonprescription drug products with an ACNU; and
• The role of the pharmacist with a nonprescription drug product with an ACNU.
FDA considered all comments received on the proposed rule, and in response, we have made changes for clarity and to reduce the burden on applicants in meeting certain requirements. The following is a summary of certain changes from the proposed rule:
• Revising the postmarketing reporting requirement to further clarify that a report must be submitted when there is an ACNU failure, and further explain the meaning of ACNU failure, to enhance consistency with current processes for the submission of other required postmarketing reports;
• Revising the requirements for required labeling statements on the PDP and DFL to permit applicants to propose revisions to the content of the required statements under certain circumstances;
• Revising the placement for the required labeling statement on the DFL depending on the purpose of the ACNU; and
• Clarifying certain circumstances when a nonprescription drug product with an ACNU would be misbranded by providing more detail about what it means when an ACNU is not implemented by the applicant as approved by FDA in the application.
We are issuing this final rule under sections 201(n), 502, 503(b), 505, and 701(a) of the FD&C Act. Section 502(f) of the FD&C Act deems a drug to be misbranded unless its labeling bears adequate directions for use and adequate warnings against use in those conditions where its use may be dangerous to health, as well as adequate warnings against unsafe dosage or methods or duration of administration or application, in such manner and form, as are necessary for the protection of users. Section 502(f) also authorizes the issuing of regulations exempting a drug or device from the requirement to bear adequate directions for use upon a determination that such directions are not necessary for the protection of public health.
In addition, section 502(a) of the FD&C Act deems a drug to be misbranded if its labeling is false or misleading in any particular. Under section 201(n) of the FD&C Act, in determining whether labeling is misleading, there shall be taken into account (among other things), not only representations made or suggested, but also the extent to which the labeling fails to reveal facts material in the light of such representations or material with respect to consequences that may result
In addition, under section 505 of the FD&C Act, FDA will approve an NDA only if the drug is shown to be both safe and effective for use under the conditions prescribed, recommended, or suggested in the proposed labeling for the drug. See section 505(c)(1) and (d) of the FD&C Act. If, for example, on the basis of information submitted as part of the NDA or on the basis of any other information before the Agency with respect to such drug, there is insufficient information to determine whether such drug is safe for use under such conditions, the Agency will not approve the drug. Section 505(j) of the FD&C Act describes the requirements for ANDAs. In particular, section 505(j)(2)(A) specifies the information that must be included in an ANDA, and section 505(j)(4) describes the approval standard for an ANDA.
In addition, section 503(b) of the FD&C Act contains provisions requiring that a drug product be dispensed by prescription when it is not safe for use except under the supervision of a practitioner licensed by law to administer such drug product because of toxicity or other potentiality for harmful effect, or the method of the drug product's use, or the collateral measures necessary to the drug product's use (see section 503(b)(1) of the FD&C Act). If a drug product does not require a prescription under these provisions, it can be marketed as nonprescription. Section 503(b) gives authority for the Secretary, which is delegated to FDA, to make certain decisions regarding a drug's applicable category (see,
Finally, section 701(a) of the FD&C Act authorizes FDA to issue regulations for the efficient enforcement of the FD&C Act.
We received approximately 200 comment letters on the proposed rule by the close of the comment period, each containing one or more comments on one or more issues. We received comments from entities and individuals including private citizens, consumer groups, trade organizations, pharmaceutical industry, and public advocacy groups. The 120-day comment period was extended by an additional 30 days based on requests from members of the public.
We describe and respond to the comments in sections V.B through V.N of this document. We have numbered each comment to help distinguish between different comments. We have grouped similar comments together under the same number, and in some cases, we have separated different issues discussed in the same comment and designated them as distinct comments for purposes of our responses. The number assigned to each comment or comment topic is purely for organizational purposes and does not signify the comment's value or importance or the order in which comments were received.
We received many general comments supporting and opposing the purpose, necessity, and appropriateness of the proposed rule. In the following paragraphs, we discuss and respond to these general comments. We did not make any changes to the final rule based on consideration of these general comments.
(Comment 1) Many comments generally support the proposed rule because it could broaden the types of nonprescription drug products available to consumers. For example, these commenters believe the proposed rule has the potential to improve consumer access, improve consumer autonomy, expand the market for companies, address undertreatment of many common and chronic conditions in the United States, and reduce the number of routine visits to a healthcare practitioner.
(Response 1) We appreciate the general support. The rule is intended to increase options for applicants to develop and market safe and effective nonprescription drug products and increase consumer access to appropriate, safe, and effective drug products, which could improve public health.
(Comment 2) We received a comment recommending that Congress, in conjunction with State boards of pharmacy, State health departments, and State/national pharmacist associations, is better positioned to increase options for the development and marketing of safe and effective nonprescription drug products through legislative changes, as compared to FDA acting through regulatory changes. The same comment sought clarity on whether FDA has the legal authority to approve nonprescription drug products with ACNUs that restrict distribution and sales of the drug product.
(Response 2) As part of the statutory framework for regulation of drug products, Congress recognized the need for specific considerations and requirements for prescription drugs. As explained further in the response to comment 41, Congress amended section 503(b) of the FD&C Act in 1951 to reduce confusion and uncertainty in the market as to when a drug is safe for use without the supervision of a practitioner licensed by law to administer such drug, as well as to remove unnecessary restrictions on dispensing, and to protect public health from abuses in the sale of potent prescription drugs. Several provisions of the FD&C Act, including section 503(b), demonstrate that Congress envisioned that FDA would determine which drugs must be dispensed only upon a prescription and which drugs would not require a prescription. For example, section 503(b)(1) of the FD&C Act states, in relevant part, that a drug intended for human use that, “because of its toxicity or other potentiality for harmful effect, or the method of its use, or the collateral measures necessary to its use, is not safe for use except under the supervision of a practitioner licensed by law to administer such drug,” must be limited to prescription use. That section authorizes FDA, in approving an application under section 505 of the FD&C Act, to require the supervision of a practitioner licensed by law to administer such a drug. Conversely, FDA may approve drugs that do not fall within section 503(b)(1) of the FD&C Act for nonprescription use. In addition, section 503(b)(3) of the FD&C Act authorizes FDA to issue regulations to remove the prescription-only dispensing requirements from drugs when such requirements are not necessary for the protection of the public health. Congress explicitly delegated FDA authority to use its scientific judgement to determine which drugs should be prescription or nonprescription, within the statutory criteria.
Further, section 503(b)(1)(A) of the FD&C Act specifies certain identified features of a drug, such as its “toxicity or other potentiality for harmful effect, or the method of its use, or the collateral measures necessary for its use,” that are relevant to the determination of prescription or nonprescription status. The statute only states these factors in describing the prescription drug category, while leaving the nonprescription drug category described in opposition to the prescription
Features of a drug that qualify as “collateral measures” vary from drug to drug, and can include, for example, things which a layperson, because of their lack of education, training, and experience, cannot do to safely manage the disease. These include, but are not limited to, taking a proper history, doing a physical exam, ordering appropriate laboratory tests, having a knowledge of the relevant diseases, integrating the results of the history, exam, and tests with this knowledge, making a diagnosis, designing a treatment plan, and carrying the plan through with proper continuing evaluation. If the collateral measures necessary for safe use of the drug require the supervision of a practitioner licensed by law to administer such drug, section 503(b)(1)(A) requires that it can only be dispensed pursuant to a prescription.
This rule recognizes that drugs approved with certain types of collateral measures do not require supervision of a practitioner licensed by law to administer such drug. Some such measures may be things that used to require a practitioner's direct involvement, but that no longer require such supervision because of the availability of technological advancements. For example, with Drug X (see more information about Drug X, a fictitious nonprescription drug product with an ACNU, in the proposed rule (87 FR 38313 at 38319)), the ACNU requires all consumers to complete a questionnaire located on a secure website created by the applicant to determine whether Drug X is appropriate for the consumer. Using a consumer's answers to the questions, the underlying program or other operating information used by the secure website, not the consumer, calculates the risk score for a serious side effect and determines if the consumer has an acceptable disease-specific risk score to use Drug X and therefore purchase Drug X.
This type of collateral measure could also be accomplished through the direct involvement of a practitioner licensed by law to administer such drug, as the practitioner integrates their knowledge of the patient with their knowledge of the disease and the drug—but now, in certain cases, this has the potential to be done without a practitioner's direct involvement because of the availability of technology that can conduct the necessary evaluation. By carefully evaluating whether such advancements in collateral measures mean that the drug “is
More generally, as part of its broad authority to approve and regulate drug products, including to establish specific regulations for drug products, FDA is authorized to determine the conditions under which a drug is safe and effective for use without a prescription, including a determination that an ACNU is needed where labeling alone will not suffice (see,
For certain drug products, labeling alone may not adequately communicate the information needed for consumers to appropriately self-select or use the drug product, but consumers may still be able to use the product safely and effectively without the supervision of a practitioner licensed by law to administer such drug under certain conditions. Nonprescription drug products approved with ACNUs have an additional condition of use, beyond labeling, that allows consumers to appropriately self-select or use the drug product without the supervision of a practitioner licensed by law to administer such drug. Thus, a nonprescription drug product with an ACNU, although not an “over-the-counter” drug product, is a nonprescription drug product under section 503(b) of the FD&C Act, because, when approved with an ACNU, it is safe and effective for consumers to use without the supervision of a practitioner licensed by law to administer such drug.
Additionally, FDA disagrees with this comment's suggestion that legislative change is needed to authorize this rule. As explained above, FDA has adequate statutory authority to issue this rule. See also the responses to comments 39 through 43 below. FDA has long determined which drug products are ones that consumers can appropriately self-select or use without the supervision of a practitioner licensed by law to administer such drug, and under what conditions, and these determinations are squarely within FDA's scientific expertise and authority under the FD&C Act. Additionally, FDA has engaged the public in various ways throughout the development of this rule. For example, FDA held a public hearing and participated in a series of workshops convened by the Engelberg Center for Health Care Reform at the Brookings Institution (Brookings Institution) to solicit public input on expanding the approval of nonprescription drug products. FDA used stakeholder input from the public hearing and the workshops to develop the 2022 proposed rule (see 87 FR 38313). FDA also carefully considered public comments in developing the final rule.
(Comment 3) We received many comments on the role of a pharmacist in relation to nonprescription drug products with ACNUs. One comment suggests that nonprescription drug products with ACNUs be available only from State-licensed pharmacies, where there is a licensed pharmacist available to assist consumers. Many of these comments suggest that FDA require nonprescription drug products with ACNUs to be sold only after consultation with a pharmacist. The comments assert that pharmacists should: (1) assist with determining whether a nonprescription drug product with an ACNU is appropriate for the consumer; (2) ensure consumer fulfillment of the ACNU; and (3) provide a stopgap for consumer
Additionally, we received many comments about the practice of pharmacy or medicine that are outside the scope for this rulemaking, including comments about reimbursement for pharmacist professional services, increased prescribing authority for pharmacists, pharmacy recordkeeping, documentation of nonprescription drug products in profiles for the consumer or drug history data repositories, State laws about sales of nonprescription drug products, and legal liability for pharmacists.
(Response 3) FDA disagrees that a nonprescription drug product with an ACNU should be available only from State-licensed pharmacies, where there is a licensed pharmacist available to assist consumers, or sold only after consultation with a pharmacist. The purpose of this rule is to increase options for applicants to develop and market safe and effective nonprescription drug products, which in turn may increase consumer access to appropriate, safe, and effective drug products. FDA recognizes the potential benefit of providing consumers with access to additional types of nonprescription drug products, such as some drug products that are currently available only by prescription and that treat chronic diseases or conditions. Nonprescription drug products are generally available for consumers to purchase at such as pharmacies, supermarkets, or other retail locations, and from online retailers. FDA anticipates that nonprescription drug products with an ACNU would be sold similarly. FDA recognizes the potential benefit of providing consumers with appropriate access to nonprescription drug products. As long as consumers can fulfill the ACNU, limiting the locations in which nonprescription drug products with an ACNU can be sold, or requiring consultation with a healthcare professional (
Such a system also would be inconsistent with this final rule, which pertains to nonprescription drug products. Section 503(b) of the FD&C Act requires that a drug product be dispensed by prescription when it is not safe for use except under the supervision of a practitioner licensed by law to administer such drug because of toxicity or other potentiality for harmful effect, or the method of the drug product's use, or the collateral measures necessary to the drug product's use (see section 503(b)(1) of the FD&C Act). If an approved drug product does not meet the criteria for prescription-only dispensing, it may be marketed as nonprescription (see 87 FR 38313 at 38316).
We proposed requirements for NDAs and ANDAs for nonprescription drug products with ACNUs (see proposed 21 CFR 201.67, 201.130, 314.56, 314.81, 314.125, and 314.127). In the following paragraphs, we discuss comments on the applicability of the rule. After consideration of public comments received, we are finalizing our proposals without change.
(Comment 4) We received several comments on how the rule will be applied to already marketed drug products. We received a comment asserting that an ACNU cannot be retroactively required for a nonprescription drug product that FDA has already approved without an ACNU. However, the comment requests FDA make clear in the final rule that FDA has the authority to revisit the approval of a nonprescription drug product when information emerges in the postmarketing setting regarding the safety and efficacy of the nonprescription drug product. Further, we received a comment that FDA approval of a nonprescription drug product with an ACNU should not become the “temporary stopping ground” for every drug moving from prescription to nonprescription status.
(Response 4) We do not intend, as a result of this rule, to revisit nonprescription drug products marketed under approved applications. The approval of an application for a nonprescription drug product prior to the finalization of this rule was based on FDA's finding, in part, that labeling alone is sufficient for the drug product to be used safely and effectively by consumers. Under this rule, such a finding by FDA would obviate the need for the approved nonprescription drug product to have an ACNU in order for the drug product to be used safely and effectively. In addition, we do not think that FDA approval of a nonprescription drug product with an ACNU will generally become a “temporary stopping ground” as a step toward nonprescription approval without an ACNU (
We agree that FDA has authority to address safety and efficacy concerns observed for an approved drug product in the postmarketing setting, including existing authority under the FD&C Act and current regulations to withdraw approval of an application in certain circumstances (see section 505(e) of the FD&C Act and 21 CFR 314.150). This includes withdrawal of an approval of an application for a nonprescription drug product with or without an ACNU for safety or efficacy concerns. In certain situations, if FDA withdraws approval of an application for a nonprescription drug product due to the emergence of a safety issue with regard to appropriate self-selection or actual use of the drug product, the applicant could submit a new application for the product as a nonprescription drug product with an ACNU to ensure appropriate self-selection or actual use, as appropriate.
(Comment 5) We received over 100 comments recommending that specific drug products be available as nonprescription (
Additionally, we received a few comments discussing the appropriateness of approving nonprescription drug products with ACNUs for certain general types of drug products. We received one comment recommending FDA only approve a nonprescription drug product with an ACNU if it has a low risk for misuse. We received a few comments expressing concerns about the appropriateness of nonprescription drug products with ACNUs for the treatment of chronic conditions and asserting that consumers may not be able to appropriately manage chronic health conditions without the communication and supervision by a healthcare practitioner. We also received a comment discussing that FDA may have unintentionally implied that a drug product to treat chronic conditions or intended for long-term use must have an ACNU to be available as nonprescription. We received several comments expressing concern about the approval of a nonprescription drug
(Response 5) We disagree that we need to clarify the rule to address comments regarding approval of specific drug products or categories of drug products or restrict the types of drug products that FDA may consider for approval as a nonprescription drug product with an ACNU. FDA considers the specifics of each application during its review, including the potential risk for misuse of the drug product. As long as the application meets the existing evidentiary standards under the FD&C Act and current FDA regulations to demonstrate the safety and effectiveness of the drug product, and the drug product does not meet the criteria for prescription-only dispensing (see section 503(b)(1) of the FD&C Act), FDA may approve the application as nonprescription. FDA has the authority to approve a nonprescription drug product intended for a chronic disease or condition, or for long-term use, that meets the existing evidentiary standards and FDA regulations. In fact, FDA has approved nonprescription drug products for chronic diseases or conditions, or for long-term use, based on FDA's finding, in part, that labeling alone is sufficient for the drug product to be used safely and effectively by consumers. For example, on January 25, 2013, FDA approved NDA 202211 Oxytrol for Women (oxybutynin) extended-release film, 3.9 milligrams (mg), for the treatment of overactive bladder in women. When relevant, the applicant must ensure consumers understand information on potential interactions to safely and effectively use a nonprescription drug product with an ACNU. Further, consistent with the existing requirements for all nonprescription drug products, an applicant of a nonprescription drug product with an ACNU must include specific warnings, including all major drug-drug and drug-food interaction warnings in the DFL (see § 201.66(c)(5)(v) (21 CFR 201.66(c)(5)(v))).
We appreciate the public's interest in advocating for specific drug products or types of drug products to be approved or not be approved for nonprescription use, such as oral contraceptives and naloxone. Of note, on July 13, 2023, FDA approved supplemental NDA 017031 for Opill (norgestrel) tablet, 0.075 mg, as a nonprescription daily oral contraceptive to prevent pregnancy. On March 29, 2023, FDA approved supplemental NDA 208411 for Narcan (naloxone hydrochloride) nasal spray, 4 mg, for nonprescription use to reverse the effects of a life-threatening opioid emergency. Additionally, on July 28, 2023, FDA approved NDA 217722 for RiVive (naloxone hydrochloride) nasal spray, 3 mg, for nonprescription use for emergency treatment of opioid overdose in adults and children. Based on FDA's review under relevant statutory and regulatory standards for approval, FDA determined the labeling for these drug products was sufficient to ensure consumers' appropriate self-selection and use of the products without the supervision of a practitioner licensed by law to administer such drug.
(Comment 6) We received several comments asking FDA to clarify when an applicant should propose an ACNU for a nonprescription drug product. We received a comment that asserts that the definition of an ACNU should be limited to those conditions that are most feasible to implement at the pharmacy-patient level and suggests that FDA provide a finite list of additional conditions that would be applied to real-world situations. We received several comments asking FDA to provide examples when labeling is inherently insufficient for appropriate self-selection or actual use, if these examples exist, or examples of specific drug products that FDA considers as possible candidates for approval.
(Response 6) We decline to establish such inflexible limits on when an ACNU should be proposed. The rule is intended to increase options for an applicant to develop and market safe and effective nonprescription drug products and increase consumer access to appropriate, safe, and effective drug products. The rule is intentionally flexible, mindful that technologies evolve and ACNUs may be developed for many different nonprescription drug products. FDA placing limits on the types of conditions that can be proposed or the creation of a finite list of additional conditions is not warranted and may unnecessarily restrict the type and number of drug products that could be marketed nonprescription, contrary to the intent of this rule.
We expect applicants may submit applications for nonprescription drug products with ACNUs for a wide range of indications, including for drug products intended to treat both acute and chronic diseases. However, FDA cannot predetermine the full range of indications for which nonprescription drug products with ACNUs could be approved, nor can the Agency predetermine that all proposed nonprescription drug products with ACNUs for a given indication would be safe and effective, because FDA considers the specifics of each application during its review. Further, we cannot provide a general list or guideline of when labeling alone is insufficient to ensure appropriate self-selection or appropriate actual use, or both, because the determination of when labeling is insufficient is made for a specific nonprescription drug product based upon the data or other information that the applicant submits to FDA as part of an application.
We proposed to establish a definition for additional condition for nonprescription use (ACNU) (see proposed 21 CFR 201.67(b)(1) and 314.56(a)(1)). As proposed, an ACNU means one or more FDA-approved conditions that an applicant of a nonprescription drug product must implement to ensure consumers' appropriate self-selection or appropriate actual use, or both, of the nonprescription drug product without the supervision of a healthcare practitioner if the applicant demonstrates and FDA determines that labeling alone is insufficient to ensure appropriate self-selection or appropriate actual use, or both. As an example, an ACNU for appropriate self-selection could be a questionnaire that consumers are required to complete on a secure website or mobile application created by the applicant to determine whether the drug product is appropriate for the consumer. The questionnaire would contain a series of questions that the consumer answers. The underlying program or other operating information used by the secure website or mobile application would determine if the drug is appropriate for the consumer based on these responses. If the drug is indeed appropriate for the consumer, the consumer could then access and purchase the drug product. For a more specific example, see the proposed rule (87 FR 38313 at 38319), in which we discuss Drug X, a fictitious nonprescription drug product with an ACNU.
In the following paragraphs, we discuss comments on the proposed definition. After consideration of public comments received, we are finalizing our proposal with revisions for consistency with the wording in section 503(b) of the FD&C Act. Therefore, we
(Comment 7) We received one comment supporting FDA's proposed definition of an ACNU because it provides sufficient flexibility for the applicant to develop and tailor the ACNU to a specific drug product.
(Response 7) We agree that the proposed definition of ACNU is sufficiently broad, as was intended, to give applicants flexibility regarding the types of additional conditions that may be proposed and how those conditions can be implemented (87 FR 38313 at 38318). This flexibility will allow applicants to consider the unique benefit and risk considerations for a particular drug product while developing an ACNU to ensure consumers' appropriate self-selection or appropriate actual use, or both, of the drug product.
(Comment 8) We also received several comments disagreeing with FDA's proposed definition of ACNU. Some comments disagree with the use of the term “ensure” in the definition and recommend FDA revise the definition to replace the term “ensure” with “enable.” The comments assert that the term “ensure” implies that any risk to consumers from the nonprescription drug product with an ACNU has been eliminated even though all drug products have residual risk regardless of any mitigation steps taken. We received one comment asserting that the proposed definition is vague and suggesting that FDA provide a definition of “appropriate actual use” and “appropriate self-selection.”
(Response 8) We disagree with replacing the term “ensure” with “enable” in the definition. The Merriam-Webster dictionary defines “ensure” as “to make sure, certain, or safe.” The Merriam-Webster dictionary defines “enable” as “to make possible, practical, or easy or to provide with the means or opportunity.” The term “ensure” reflects a greater level of certainty that is consistent with FDA's approval standards. All drug products, including nonprescription drug products, have risks. As part of our regulatory decision-making process, we conduct a structured benefit-risk assessment to facilitate the balanced consideration of benefits and risks (see,
FDA disagrees that specifically defining “appropriate actual use” and “appropriate self-selection” is necessary for nonprescription drug products with an ACNU. The terms “actual use” and “self-selection” are used in the context of all nonprescription drug products. In general, applicants of nonprescription drug products conduct consumer studies such as label comprehension studies, self-selection studies, actual use studies, and human factors studies to help demonstrate that consumers can correctly self-select and correctly use the drug products (see also 87 FR 38313 at 38316). FDA has defined “self-selection” in FDA guidance for industry (Ref. 1 and 87 FR 38313 at 38315).
(Comment 9) Several comments recommend FDA revise the proposed definition to make clear that applicants, not FDA, should determine when an ACNU is necessary. The comments assert that the applicant should have the ability to evaluate the need for an ACNU and propose the use of an ACNU without seeking prior agreement from FDA.
(Response 9) We disagree with revising the definition to permit the applicant, not FDA, to make the final determination on the necessity of the ACNU. To approve a drug product, FDA must determine whether the specific application meets the applicable statutory and regulatory requirements. FDA will not require a nonprescription drug product to have an ACNU if the drug product can be used safely and effectively by consumers, without the supervision of a practitioner licensed by law to administer such drug, based on labeling alone. Requiring unnecessary ACNUs would be inconsistent with the goal of this rulemaking, which is to increase consumer access to safe and effective nonprescription drug products.
While applicants are not required to meet with FDA prior to the submission of an application for a nonprescription drug product with an ACNU, we encourage applicants to meet with FDA to discuss their drug development plans and seek feedback, including whether an ACNU may be necessary. However, it is during FDA's review of an application that FDA must determine whether the application meets the applicable statutory and regulatory requirements, including whether the applicant demonstrates the necessity of the ACNU to ensure appropriate self-selection or appropriate actual use, or both (see,
We proposed that an applicant must submit a separate application for a nonprescription drug product with an ACNU (proposed 21 CFR 314.56(b)). For cases where there is an approved prescription drug product, we proposed that initial approval for a nonprescription drug product with an ACNU cannot be obtained through a supplement to the approved application for prescription use of the drug product.
In the following paragraphs, we discuss comments on this proposed requirement. After consideration of public comments received, we are finalizing our proposal with a clarifying revision to explain that this provision supersedes § 310.200(b) (21 CFR 310.200(b)) with regard to nonprescription drug products with an ACNU. To clarify and avoid ambiguity, we are adding the clause “Notwithstanding § 310.200(b)” to the beginning of the first sentence in 21 CFR 314.56(b).
(Comment 10) We received a few comments supporting the proposed requirement for the submission of a separate application for a nonprescription drug product with an ACNU because it would improve consumer options. Additionally, a commenter asserted that the proposed requirement increases equity and access to drug products. We also received several comments opposing this proposed requirement and asserting that an applicant should be allowed to submit a supplement to an approved prescription application rather than a separate application. One comment asserts that an applicant should not be required to submit a separate application simply because the ACNU is part of a development program, especially where the formulation is similar to the approved prescription application. We received a comment requesting FDA remove the proposed requirement and, instead, address the issue on a case-by-case basis to determine the circumstances when it would be appropriate for an applicant to seek approval of a nonprescription drug product with an ACNU by submitting a supplement. The comment argues that the proposed requirement for a separate application is inconsistent with the FDA guidance for industry from December 2004 “Submitting Separate Marketing Applications and Clinical Data for Purposes of Assessing User Fees” (available at
(Response 10) We disagree with removing the requirement for the submission of a separate application. This requirement is essential to achieving the key policy goal of increasing consumer access to appropriate drug products. In cases where there is an approved prescription drug product, this requirement creates a pathway for the simultaneous marketing of the prescription drug product, along with the nonprescription drug product with an ACNU. While many consumers will benefit from the availability of nonprescription drug products with ACNUs, FDA also recognizes that some may not be able to access the nonprescription drug product with an ACNU. For example, a consumer may not be able to access the technology that operationalizes the ACNU. Therefore, continued availability of the prescription drug product along with the nonprescription drug product with an ACNU promotes the greatest access to needed drug products.
We are also clarifying that a separate application must be submitted for a nonprescription drug product with an ACNU notwithstanding § 310.200, which states that an interested person may submit a supplement to an approved new drug application to propose to exempt a drug from the prescription-dispensing requirements of section 503(b)(1)(B) of the FD&C Act. Under § 310.200(b), applicants may continue to submit a supplement to switch a drug from prescription to nonprescription status if the nonprescription drug product would not have an ACNU and the resulting approved application would only address the nonprescription drug product. Nonprescription drug products without ACNUs do not implicate the same issues regarding continued consumer access to appropriate drug products, because they are generally available to consumers and do not have additional conditions of approval that restrict consumer access.
Additionally, we do not agree that the proposed separate application requirement is inconsistent with existing FDA guidance. The guidance entitled “Submitting Separate Marketing Applications and Clinical Data for Purposes of Assessing User Fees” did not contemplate and, therefore, did not address the submission of an application for a nonprescription drug product with an ACNU. Therefore, the guidance is not relevant to the question of whether a separate application or a supplement is appropriate for such a product. Furthermore, the guidance document merely provides FDA's recommendations on submission of certain applications to FDA. The guidance document does not set forth any requirements, and the recommendations therein are not binding on FDA or applicants.
We also do not agree that requiring a separate application would necessarily disincentivize innovation and limit utilization of the ACNU pathway. This assertion is speculative and does not outweigh the potential benefits from requiring a separate application, which would increase consumer access to appropriate drug products. We acknowledge that the cost to develop a nonprescription drug product with an ACNU is higher than a nonprescription drug product without an ACNU. The Appendix of the Regulatory Impact Analysis estimates that the core development cost of a nonprescription drug product is $31.1 million while the estimated cost to develop cost of a nonprescription drug product with an ACNU is $47.3 million, an estimated markup of $16.2 million for ACNU-related development. However, as noted in section I.C. of the Regulatory Impact Analysis, evidence shows that roughly 60 percent of purchases for a nonprescription drug product are from new-to-therapy consumers who had not previously taken the drug before it switched from prescription status, suggesting that the potential to attract new-to-therapy consumers for nonprescription drug products is substantial (Ref. 13). Further, section V.B. of the Regulatory Impact Analysis estimates that every year nonprescription drug manufacturers get $112.02 million of additional revenue from switching a drug to nonprescription status (Ref. 13), which also indicates there will be incentives for drug manufacturers to innovate and use the ACNU pathway. We disagree that simultaneous marketing would reduce or render moot the benefit of any statutory exclusivity that may be associated with a nonprescription drug product. For example, three-year new clinical investigation exclusivity (
(Comment 11) Several comments express concerns that submitting an application is more burdensome than submitting a supplement. Although another comment acknowledges FDA's explanation that applicants can cross-reference information in an approved application, the comment asserts that the applicant would be required to pay a new application user fee, even though the commenter believes that FDA's review would be less resource-intensive compared to other NDAs.
(Response 11) We acknowledge that submitting a separate application may be more burdensome than submitting a supplement to the approved prescription drug application; however, an applicant may cross-reference information from its approved NDA for the prescription drug product and would not need to duplicate studies already conducted for and submitted in its NDA for the prescription drug product (87 FR 38313 at 38318). While we acknowledge that a new application user fee will be required, we disagree that FDA's review of an application for a nonprescription drug product with an ACNU is less resource intensive for the Agency compared to other NDAs. As required for other NDAs, the application must include data and information from studies to support the safety and efficacy of the drug product as nonprescription as well as meet the additional specific requirements for a
(Comment 12) We also received one comment requesting that FDA establish a process for the applicant to revise or remove an approved ACNU for a nonprescription drug product with an ACNU. The comment notes that an ACNU should not be expected to remain unchanged or permanent.
(Response 12) We disagree that we need to establish a new, separate process specific for making post approval changes to an application for a nonprescription drug product with an ACNU. An applicant may propose revisions to an approved application for a nonprescription drug product with an ACNU by submitting a supplement and may describe certain changes in the annual report, consistent with our current regulations for making changes to an FDA-approved application (see §§ 314.70, 314.81, 314.97, and 314.98 (21 CFR 314.70, 314.81, 314.97, and 314.98)). An applicant seeking to make changes to an NDA or ANDA submitted for a nonprescription drug product with an ACNU that is under review by FDA would submit an amendment to the application to request a change (see §§ 314.60 and 314.96 (21 CFR 314.60 and 314.96)). An applicant seeking to make changes to an FDA-approved NDA or ANDA for a nonprescription drug product with an ACNU would submit a supplement to the approved NDA or ANDA (see §§ 314.70 and 314.97) (87 FR 38313 at 38319).
We proposed to establish specific NDA and ANDA requirements for a nonprescription drug product with an ACNU (proposed 21 CFR 314.56(c)). After consideration of public comments received, we are finalizing these proposals with a few editorial modifications to provide clarity. The changes are described below in sections V.F.1. and V.F.2.
In addition to existing content and format requirements for an NDA (§ 314.50), FDA proposed specific requirements for an NDA for a nonprescription drug product with an ACNU. We discuss the specific requirements in the following paragraphs.
(Comment 13) We received a few comments asserting that the proposed rule lacks clarity on how often an ACNU must be fulfilled by consumers. A few commenters question if the consumer would be required to fulfill an ACNU each time the consumer repurchases the drug product, which would be burdensome, particularly if the drug product is indicated for a chronic condition. One comment recommends that FDA require the application to include information on how the consumer would repurchase a nonprescription drug product with an ACNU.
(Response 13) There is not one standard for the frequency in which an ACNU must be fulfilled by the consumer; this will be determined on a case-by-case basis as we consider the specifics of each application for a nonprescription drug product with an ACNU during our review. As finalized in this final rule, we require that the application include a description of how the ACNU ensures appropriate self-selection or appropriate actual use, or both (21 CFR 314.56(c)(1)(iii) in this final rule), and describe the additional condition(s) implemented and the criteria by which the consumer would successfully fulfill the ACNU, including a description of the specific actions to be taken by a consumer as part of the description of key elements of the ACNU (21 CFR 314.56(c)(1)(iv) in this final rule). Therefore, the application may include information describing how a consumer would make subsequent purchases of the nonprescription drug product with an ACNU, if appropriate. For example, an applicant may explain that a consumer would fulfill an ACNU (
FDA believes that the requirement for demonstrating that the ACNU is necessary, as reflected in the ACNU definition and in 21 CFR 314.56(c)(1)(v), and as determined by FDA, is necessary to fulfill the key goals of this rulemaking. The key goals are to: (1) increase options for applicants to develop and market safe and effective nonprescription drug products, which would broaden the types of nonprescription drug products available to consumers and (2) increase consumer access to appropriate, safe, and effective drug products, by providing for the availability of prescription versions of nonprescription drug products approved with ACNUs, both of which in turn could improve public health (see the discussion in this section F.1.
(Comment 14) We received several comments requesting that FDA provide further guidance on the meaning of “adequate data” as it pertains to demonstrating the necessity of the ACNU and the effect of the ACNU. FDA received one comment stating the proposed rule does not address the types of consumer studies that would be needed to provide adequate data. A few comments assert that FDA should not limit adequate data to prospective consumer behavior studies if other sources referenced by the applicant are reliable and fit for purpose.
(Response 14) Consistent with our proposal, the applicant must conduct or reference adequate testing to show that labeling alone would not support the safe and effective use of the nonprescription drug product (87 FR 38313 at 38320 and 21 CFR 314.56(c)(1)(vi) in this final rule). Further, the applicant must submit data that show that consumers appropriately self-select or actually use the drug product, or both, safely and effectively using the ACNU. To clarify, adequate data need to be relevant to the specific application and need to be interpretable for FDA to evaluate the scientific finding. The types of data that can be submitted are not limited. Applicants can submit data from consumer studies such as label comprehension studies, self-selection studies, actual use studies, and human factors studies (87 FR 38313 at 38315) to demonstrate the necessity of the ACNU and the effect of the ACNU. The specific types of consumer studies an applicant would conduct depends on the development program for the particular nonprescription drug product with an ACNU.
FDA has issued guidances on some types of consumer studies (Refs. 1, 2, and 3). We may provide advice (
(Comment 15) We received many comments asserting that FDA should remove the proposed requirement that the applicant must develop or reference adequate data to demonstrate that labeling is insufficient for safe and effective use of a nonprescription drug product. We received many comments expressing concerns that, before developing an ACNU, an applicant must first generate data from a failed labeling study (
(Response 15) We disagree with removing the requirement that the applicant must provide adequate data or other information to show that labeling alone would not support the safe and effective use of the nonprescription drug product and disagree that the requirement is inconsistent with the methods of developing labeling for nonprescription drug products. An ACNU cannot be proposed merely to provide consumers with additional information when the labeling could be sufficient to ensure appropriate self-selection or actual use or both. In such case, the use of an ACNU can present potential barriers for another applicant developing a nonprescription drug product. We cannot make a determination about whether labeling alone is insufficient without adequate data or other information. While the data or other information will typically come from consumer testing or by reference, it does not necessarily need to come from a failed labeling study. Further, the necessity for adequate data or other information, which typically comes from consumer testing or by reference is consistent with FDA's approval requirements for all nonprescription drug products. For a nonprescription drug product, the applicant develops and optimizes the labeling using an iterative process and conducts consumer studies (
We encourage applicants to meet with FDA to discuss their drug development plans and seek advice. However, these meetings are not required; applicants that view these meetings as unnecessary are not required to have them.
(Comment 16) We received a few comments recommending that FDA clarify when an applicant can submit “other information” explaining the necessity of the ACNU. One comment recommends FDA define the criteria for when an applicant can submit “other information”; for example, situations that require additional tests, lab values, or other ancillary values or measurements as part of self-selection or actual use; literature; and medical practice guidelines. One comment recommends that FDA clarify how FDA will signal to an applicant when labeling alone is insufficient because clear communication with FDA will allow the applicant to proceed in its development program.
(Response 16) FDA disagrees with providing criteria in the rule for when an applicant can submit “other information” to demonstrate the necessity of the ACNU. Because this determination is specific to the circumstances surrounding each individual drug development program, FDA does not think specifying such criteria in the rule would be feasible and may instead unnecessarily limit the options available to applicants for development program designs.
An applicant may be able to submit information explaining the necessity of the ACNU for appropriate self-selection or appropriate actual use, or both, when FDA has previously signaled that labeling alone is not sufficient to ensure appropriate self-selection or appropriate actual use, or both. For example, this might apply if FDA has previously approved multiple nonprescription drug products for the same indication with a similar ACNU. FDA is available to meet with applicants to discuss drug development plans, which can include discussing questions about when “other information” can demonstrate the necessity of the ACNU. FDA encourages applicants to discuss their drug development plans with FDA and seek advice.
(Comment 17) We received a few comments suggesting that FDA revise the rule to permit the submission of adequate data or other information that demonstrate “the rationale for use of an ACNU,” rather than adequate data or other information that demonstrate “the necessity of the ACNU.” Another comment also asserts that the results of the self-selection and label comprehension studies or other adequate data or information should justify, rather than demonstrate, that consumers cannot appropriately self-select the drug product with labeling alone.
(Response 17) While this rule has the potential to provide consumers with access to additional types of nonprescription drug products, FDA recognizes that nonprescription drug products without ACNUs do not necessarily implicate the same issues regarding continued consumer access to appropriate drug products, because they are generally available to consumers and do not have additional conditions of approval that restrict consumer access. Therefore, we disagree with the commenters' assertions because providing adequate data or other information that simply provides a rationale or justification for the use of an ACNU is a lower threshold. A lower threshold may result in an applicant submitting an application for a nonprescription drug product with an ACNU even when an ACNU is not necessary to ensure consumers' appropriate self-selection or appropriate actual use or both (
(Comment 18) We received a few comments recommending that FDA provide a streamlined process for demonstrating the necessity of an ACNU because, in certain instances, the need for an ACNU may be obvious and requiring data may delay drug product development. One comment requests that FDA clarify—in situations where the need for an ACNU is uncertain—that applicants may streamline the drug development process by running simultaneous trials that test the effectiveness of labeling both with and without an ACNU.
(Response 18) FDA disagrees with providing a streamlined process applicable to all applications. Because each development program is unique, establishing a “streamlined” process and standards that applicants must follow as part of the development program may be overly restrictive. FDA acknowledges that applicants may choose to conduct simultaneous trials to demonstrate the necessity of the ACNU and the effect of the ACNU. However, because the results of the studies needed to demonstrate the necessity of the ACNU could affect the studies needed to demonstrate the effect of the ACNU, conducting simultaneous studies may result in the need to conduct additional trials. In general, FDA recommends the development program for a nonprescription drug product with an ACNU proceed in a stepwise approach. The development of labeling for all nonprescription drug products, including a nonprescription drug product with an ACNU, is an iterative process that may depend upon testing and retesting as the label evolves (Ref. 1). The applicant should begin by creating the complete labeling for the drug product that includes consumer-friendly language for all directions, warnings, and precautions, that is consistent with the available prescription labeling, in cases where there is an approved prescription drug product. FDA expects that the applicant will then optimize the labeling using an iterative process and conduct or reference adequate testing (
(Comment 19) We received one comment questioning whether applicants should assume that the statutory standard for approving an NDA applies to NDAs for nonprescription drug products with ACNUs (
(Response 19) Yes, the statutory standard that an application for a nonprescription drug product must meet under the FD&C Act and current FDA regulations to demonstrate the safety and effectiveness of the drug product would apply to a nonprescription drug product with an ACNU just as they apply to any other NDAs and ANDAs (see section 505(b)(1) or (2) and (j) of the FD&C Act). For example, an NDA for a nonprescription drug product with an ACNU must demonstrate the proposed drug product's safety and effectiveness. Therefore, the NDA must include full reports of investigations to demonstrate that the proposed drug product is safe and effective under the conditions prescribed, recommended, or suggested in its proposed labeling (
(Comment 20) A comment recommends that health literacy be a significant factor in determining adequate data or other information that demonstrates the effect of the ACNU.
(Response 20) FDA understands this comment to be suggesting that health literacy be considered when enrolling study participants. An application for a nonprescription drug product with an ACNU must include adequate data or information that demonstrates the effect of the ACNU on the appropriate self-selection or appropriate actual use, or both, by the consumer of the nonprescription drug product (21 CFR 314.56(c)(1)(vi)). The data must show that consumers appropriately self-select or use the drug product safely and effectively, or both, with the ACNU. Because a nonprescription drug product with an ACNU, like other nonprescription drug products, would be used by consumers from the general population without the supervision of a practitioner licensed by law to administer such drug, an applicant is expected to include a wide range of subjects in consumer studies. Specifically, in self-selection studies, exclusion criteria should be minimal (
(Comment 21) We received a few comments that support FDA's position that an ACNU can be operationalized in different ways as long as it reliably meets its objective. Specifically, one comment supports the flexibility in how an ACNU may be operationalized given that the technologies used may change over time. One comment requests that FDA clarify its expectation for the description of how the applicant will operationalize the ACNU.
(Response 21) We appreciate commenters' support and firmly believe that the ACNU can be operationalized in different ways provided it reliably meets the objective. The applicant should describe the specific way the ACNU is operationalized so that we can understand how the ACNU is ensuring appropriate self-selection or appropriate actual use, or both. Because each development program is different, we encourage the applicant to discuss its drug development plans with FDA. Additionally, FDA may consider issuing guidance in the future to address general considerations that may arise and are applicable to all applicants developing nonprescription drug products with an ACNU, or to address new technology, if appropriate.
(Comment 22) We received a few comments that request that FDA add language to the rule clarifying that ACNUs must be operationalized in ways that do not restrict the sale of a nonprescription drug product with an ACNU so that the ACNU does not become a barrier to long-term use of a drug product.
(Response 22) We do not think that additional language needs to be added to the rule to address this comment. Because the ACNU is necessary to ensure appropriate self-selection or appropriate actual use, or both, by consumers of the drug product, the nonprescription drug product with an ACNU must only be made available to the consumer after the ACNU has been fulfilled by the consumer. However, in the case of long-term use of a nonprescription drug product with an ACNU where there is the need to repurchase the drug product, there is not one standard for the frequency in which an ACNU must be fulfilled by the consumer; this will be determined on a case-by-case basis as we consider the specifics of each application for a nonprescription drug product with an ACNU during our review. Therefore, the application may include information describing how a consumer would make subsequent purchases of the nonprescription drug product, if appropriate. For example, an applicant may explain that a consumer would fulfill an ACNU (
(Comment 23) Several comments suggest that the operationalization of an ACNU may have potential implications on access, health equity, privacy, and ultimately health outcomes. A few comments state that applicants should consider how to prevent or mitigate potential access issues for older adults, people with disabilities, people in long-term care facilities, incarcerated persons, and for people with limited English proficiency, health literacy, or digital literacy. One comment recommends that FDA require the applicant to describe considerations of ease of use, health equity, access, and privacy in deciding how to operationalize the ACNU. Some comments suggest that applicants should implement more than one way of operationalizing an ACNU to accommodate various health and digital literacy or comfort levels to ensure equitable access. One comment recommends that FDA clarify that applicants and FDA will abide by existing and future Federal, State, and local protections against discrimination in designing, approving, and implementing ACNUs such as the Federal Americans with Disabilities Act and section 1557 of the Affordable Care Act, which prohibits discrimination based on race, color, national origin, sex, age, or disability in any health program administered by the Department of Health and Human Services.
(Response 23) We acknowledge and understand the concerns and emphasize the importance of access to appropriate drug products. FDA recognizes the potential benefit of providing consumers with access to additional types of nonprescription drug products and the rule has the potential to broaden the types of drug products that FDA could approve as nonprescription (87 FR 38313 at 38316). As discussed in Response 20, because a nonprescription drug product with an ACNU, like other nonprescription drug products, would be used by consumers from the general population without the supervision of a practitioner licensed by law to administer such drug, an applicant is expected to include a wide range of subjects in consumer studies. While FDA does not have specific recommendations for enrolling subjects with varying levels of health literacy, applicants should include an adequate number of subjects who have limited literacy skills in their consumer studies (including human factors validation studies of the user interface) to help ensure that the study population is representative of the population that may use ACNU for the nonprescription drug product. As discussed further in our response to Comment 59, FDA acknowledges the benefits of having translated drug information for individuals with limited English proficiency. FDA strongly encourages applicants to work with retailers and other organizations to ensure that a nonprescription drug product with an ACNU is accessible to individuals with limited English proficiency. Additionally, FDA recognizes that in certain situations, an individual may need assistance in fulfilling an ACNU. Therefore, FDA acknowledges the possibility an individual other than the intended user might be the person who fulfills the ACNU and obtains the drug product. For example, a caregiver may fulfill the ACNU on behalf of a child or an older adult.
We disagree with revising the requirement regarding the specific way the ACNU is operationalized because the requirement is intentionally broad to allow applicants significant flexibility regarding how the ACNU can be operationalized, mindful that technologies evolve and ACNUs may be developed for many different nonprescription drug products. The flexibility in this requirement will allow applicants to develop an ACNU appropriate for the specific drug product while taking into consideration a diverse group of consumers who may use the drug product if approved. While FDA will not require an applicant to operationalize an ACNU in more than one way, an applicant may submit and FDA may approve an application that includes more than one way to operationalize an ACNU for a particular nonprescription drug product with an ACNU provided that the ways the ACNU is operationalized reliably meets the objective (
Additionally, continued availability of the prescription drug product, if one is approved, along with the availability of the nonprescription drug product with an ACNU, will promote greater access to needed drugs by providing flexibility in how people can obtain them. Patients can continue interacting with their healthcare practitioner and obtain the drug by prescription, or choose to purchase a nonprescription drug product with an ACNU after fulfilling the ACNU, if appropriate (21 CFR 314.56(b) and see also 87 FR 38313 at 38319).
We agree that FDA and applicants must comply with all applicable statutory and regulatory requirements, including Federal, State, and local protections against discrimination. However, FDA does not provide guidance on how to comply with any legal obligations stemming from a source outside of the statutes and regulations that FDA administers. To the extent the comments summarized here also pertain to privacy considerations, those portions of the comments are addressed in our response to Comment 70.
(Comment 24) We received a comment expressing concern that remote, technological access to fulfill an ACNU for a nonprescription drug product may not ensure that the individual fulfilling the ACNU is in fact the consumer.
(Response 24) FDA acknowledges the possibility that an individual other than the intended user might be the person who fulfills the ACNU and obtains the drug product. In some cases, this might be acceptable. For example, a caregiver may fulfill the ACNU on behalf of a child or an older adult. However, in other cases, an individual might attempt to misrepresent themself as the intended user to inappropriately access the nonprescription drug product with an ACNU. FDA expects applicants to mitigate this by incorporating safeguards against such attempts. For example, an applicant may consider bot detection, unique user identification, requirements for affirmation of truthfulness, or other methods.
(Comment 25) We received a few comments requesting guidance on the use of technology. We received a comment recommending that when operationalization of an ACNU is based on software (
(Response 25) We disagree that software should be considered a key element of the ACNU. The applicant must describe the specific way the ACNU is operationalized (see 21 CFR 314.56(c)(1)(vii)). While it is important for FDA to understand how the ACNU
(Comment 26) We received one comment asserting that an applicant must ensure that safeguards are in place to deny access to the nonprescription drug product with an ACNU if a technology failure in the operationalization of the ACNU occurs and the ACNU cannot be completed. The comment also suggests that FDA could allow a manufacturer's representative, a pharmacist, or a pharmacy technician to be able to administer a questionnaire to consumers in the event that the technology fails (
(Response 26) We agree that the applicant must ensure that consumers cannot access the nonprescription drug product with an ACNU without fulfilling the ACNU. “Additional condition for nonprescription use” (ACNU) is defined as one or more FDA-approved conditions that an applicant of a nonprescription drug product must implement to ensure consumers' appropriate self-selection or appropriate actual use, or both, of the nonprescription drug product without the supervision of a practitioner licensed by law to administer such drug if the applicant demonstrates and FDA determines that labeling alone is insufficient to ensure appropriate self-selection or appropriate actual use, or both (21 CFR 314.56(a) and 201.67(b) of this final rule). The requirement that the applicant describe the specific way the ACNU is operationalized is intentionally broad to allow significant flexibility regarding how the ACNU can be operationalized (21 CFR 314.56(c)(1)(vii) of this final rule). An applicant may submit, and FDA may approve, more than one way to operationalize an ACNU, which could also increase consumers' ability to access the drug product with an ACNU if one way the ACNU is operationalized fails. There is no requirement that an ACNU be operationalized using particular technology.
(Comment 27) We received a few comments recommending that FDA provide clarity about the process and information needed for an applicant to update how an approved ACNU is operationalized. One comment seeks clarity on the process an applicant would use to notify FDA when software upgrades and technology updates are needed for the ACNU. The comment suggests most technical changes and software upgrades should be submitted in the applicant's annual report. However, the comment suggests if the change is expected to result in a substantive change in how a consumer interacts with the ACNU, impacts the drug product's intended use, significantly improves safety and effectiveness of the ACNU, impacts risk controls, or increases risk to consumers, then the applicant would be expected to seek prior approval from FDA before proceeding with the change. The comment further states that the principles outlined in the existing Center for Devices and Radiological Health (CDRH) guidances, including the guidance for industry and FDA staff from October 2017, entitled “Deciding When to Submit a 510(k) for a Software Change to an Existing Device” (available at
(Response 27) An applicant of an approved NDA or ANDA for a nonprescription drug product with an ACNU must follow the same requirements as holders of other approved NDAs and ANDAs to make changes to a drug product. This means that an applicant must propose revisions to an approved application for a nonprescription drug product with an ACNU by submitting a supplement, or, if applicable, by describing changes in an annual report, consistent with our current regulations for making changes to an FDA-approved application (see §§ 314.70, 314.81, 314.97, and 314.98). FDA may consider issuing guidance in the future to address general considerations that may arise applicable to all applicants on changes to the operationalization of, or software or technology associated with, an ACNU, if appropriate.
(Comment 28) FDA sought comment on any unique retail issues that might arise for retailers or consumers based on the way the applicant operationalizes the ACNU. We received two comments asking FDA to clarify whether consumers who satisfy the ACNU for the reference listed drug (RLD) (
(Response 28) We acknowledge and appreciate the retail concerns expressed in the comments. During the development program of a nonprescription drug product with an ACNU, we encourage applicants to consider the feasibility of the specific way the ACNU is operationalized and the potential impact on retailers so as not to impede consumer access.
As our review is inherently application-specific, we expect a consumer seeking a particular nonprescription drug product with an ACNU will fulfill the ACNU as operationalized for that specific product. Accordingly, in general, consumers could not purchase the generic drug product without fulfilling the ACNU as operationalized for the generic drug product. FDA will review and approve NDAs and ANDAs for nonprescription drug products with an ACNU consistent with applicable requirements, which includes
In addition to the content and format requirements under § 314.94, FDA proposed specific requirements for an ANDA for a nonprescription drug product with an ACNU (proposed 21 CFR 314.56(c)(2)). We are making a few editorial modifications to the proposed requirement. The first editorial modification is adding the word “include” at the end of the introductory statement for ease of reading, and other changes are described below in section V.F.2. In the following paragraphs, we discuss a general comment on the topic of ANDAs as a whole prior to discussing each of the specific requirements.
(Comment 29) We received one comment that asserts that when there are significant differences in efficacy or side effect profiles between the RLD nonprescription drug product with an ACNU and an ANDA nonprescription drug product with an ACNU, such discrepancies should be addressed in the ANDA. The comment further asserts that different formulations should require a separate process which might not require a de novo application but would be more rigorous than an ANDA, which could include additional pharmacokinetic data and evidence demonstrating that consumers can safely use the drug product.
(Response 29) We disagree with the comment. To be approved, an ANDA for a nonprescription drug product with an ACNU must meet the standards specified in section 505(j) of the FD&C Act and relevant FDA regulations (see part 314, subpart C (21 CFR part 314, subpart C)) (see also 87 FR 38313 at 38318), as is true for any other ANDA. These standards do not change as a result of this final rule. For example, consistent with all ANDAs (other than ANDAs with differences approved under a petition filed under § 314.93), an ANDA for a nonprescription drug product with an ACNU must contain information to show that the drug product is pharmaceutically equivalent and bioequivalent to its RLD, and thus is expected to have the same clinical effect and safety profile as its RLD when used under the conditions specified in the labeling (see 87 FR 38313 at 38321).
We received no comment regarding this proposed requirement, and we are finalizing it with editorial modifications for clarity and consistency. We are making a modification by revising the wording from “State the purpose of the ACNU” to “A statement regarding whether the purpose of the ACNU is to ensure appropriate self-selection or appropriate actual use, or both, by consumers of the nonprescription drug product with an ACNU without the supervision of a practitioner licensed by law to administer such drug, which must be the same as the purpose of the ACNU for its reference listed drug (RLD)” for consistency and to capture the requirement more clearly. This modification clarifies that the ACNU for the ANDA must have the same purpose as the ACNU for the RLD, consistent with the discussion in the proposed rule (87 FR 38313 at 38321). This modification also makes the language consistent with the requirement for NDAs for a nonprescription drug product with an ACNU (see 87 FR 38313 at 38320 and 21 CFR 314.56(c)(1)(i) in this final rule).
(Comment 30) We received a few comments that specifically support the requirement that an ANDA demonstrate that the key elements of the ACNU are the same as the key elements of the ACNU for its RLD. We also received a comment that suggests FDA reconsider what it defines as the key elements of the ACNU and provide more flexibility than the rule already provides for differences in how an ACNU is implemented by the RLD and ANDA applicants. The commenter further states that it does not believe that if the purpose of the ACNU is to ensure adequate self-selection by screening out consumers with certain conditions, that purpose can only be achieved through a single set of questions and responses that might be proprietary to the RLD.
(Response 30) We appreciate the comments supporting the requirement that an ANDA demonstrate that the key elements of the proposed ACNU are the same as the key elements of the ACNU for its RLD. We disagree that FDA should reconsider what it defines as the key elements of the ACNU and provide more flexibility for differences in how an ACNU is implemented by the RLD and ANDA applicants.
Based on existing statutory and regulatory requirements for ANDAs, applicants may submit an ANDA referencing a listed drug (including a listed drug that has been approved with an ACNU) under section 505(c) of the FD&C Act and rely on FDA's previous finding that the RLD is safe and effective (see 87 FR 38313 at 38321). Because FDA is approving the description of the key elements of the ACNU for the NDA (see 21 CFR 314.56(c)(1)(iv)), which includes the criteria by which the consumer would successfully fulfill the ACNU, including a description of the specific actions to be taken by a consumer or required responses to be provided by a consumer), which are necessary for the safe and effective use of the nonprescription drug product with the ACNU, and because the ANDA is relying upon FDA's previous finding that the RLD is safe and effective, the ANDA must demonstrate that the key elements of the proposed ACNU are the same as the key elements of the ACNU approved for its RLD. The labeling for the ANDA drug product must be the same as the labeling for its RLD at the time of the ANDA's approval, except for changes required because of differences approved under a petition filed under § 314.93 or because the drug product for which an ANDA is submitted and the RLD are produced or distributed by different manufacturers (see sections 505(j)(2)(A) and (j)(4) of the FD&C Act and §§ 314.94(a)(8)(iv) and 314.127(a)(7)). Generally, we anticipate that the ANDA applicant would use the same questions and responses as the RLD in its labeling.
Lastly, consistent with 505(j) of the FD&C Act and our general approach to ANDAs, we are providing flexibility in how an ANDA applicant can operationalize its ACNU in a different way from its RLD (87 FR 38313 at 38321). The ANDA would contain information to support that the way in which the ACNU is operationalized achieves the same purpose as the ACNU for its RLD, and the differences from the RLD are otherwise acceptable in an ANDA (87 FR 38313 at 38321).
(Comment 31) We received a few comments that express concern about the complexities of consumer selection of ANDAs. A comment expresses concerns that allowable differences between the RLD and ANDA(s) for a nonprescription drug product with an ACNU could lead to increased consumer confusion and limit the ability of consumers to transition to a generic drug product, which could undermine the cost-saving potential that accompanies generic drug products. Another comment states that generic drug product applicants may conceivably be able to devise a completely novel ACNU that achieves substantially the same result as the ACNU for the RLD, which could cause consumer confusion. A few comments assert that consumers who have become accustomed to fulfilling an ACNU for a nonprescription drug product may be hesitant to change to a generic drug product if the ACNU varies too drastically from the RLD. One comment requests FDA clarify that all similar drug products that require an ACNU for nonprescription use will be subject to the same ACNU to limit consumer confusion and asserts that such a clarification could aid in retailers' ability to stock multiple nonprescription drug products with an ACNU.
(Response 31) While we agree that the rule permits an ANDA applicant to operationalize its ACNU in a different way from its RLD, we disagree that this rule permits the ANDA applicant to devise a completely novel ACNU. An ANDA for a nonprescription drug product with an ACNU must meet the evidentiary standards under the FD&C Act and FDA regulations for approval of an ANDA (see 87 FR 38313 at 38318). This final rule does not affect the applicability of these standards. As with all ANDAs (other than ANDAs with differences approved under a petition filed under § 314.93), an ANDA for a nonprescription drug product with an ACNU must contain information to show that the drug is pharmaceutically equivalent and bioequivalent to its RLD, and thus is expected to have the same clinical effect and safety profile as its RLD when used under the conditions specified in the labeling. Applicants submitting an ANDA referencing a listed drug that has been approved with an ACNU under section 505(c) of the FD&C Act are relying on FDA's previous finding that the RLD is safe and effective. Therefore, because FDA would have previously approved the description of the key elements of the ACNU for the NDA, which are necessary for the safe and effective use of the nonprescription drug product with the ACNU, and the ANDA is relying upon FDA's previous finding that the RLD is safe and effective, the ANDA must demonstrate that the purpose and key elements of the proposed ACNU are the same as the purpose and key elements of the ACNU approved for its RLD (see 21 CFR 314.56(c)(2)(i) and (ii) of this final rule). As noted, the requirement provides flexibility for ANDAs in how the applicant operationalizes the ACNU. The rule requires that the ANDA contain information to support that the way in which the ACNU is operationalized achieves the same purpose as the ACNU for its RLD, and to show that differences from the RLD are otherwise acceptable in an ANDA. Moreover, the labeling for the ANDA drug product must be the same as the labeling for its RLD at the time of the ANDA's approval, except for changes required because of differences approved under a petition filed under § 314.93 or because the drug product for which an ANDA is submitted and the RLD are produced or distributed by different manufacturers (see section 505(j)(2)(A) and (j)(4) of the FD&C Act and §§ 314.94(a)(8)(iv) and 314.127(a)(7)).
Therefore, while we appreciate concerns that consumers may be hesitant to use a generic drug product with an ACNU that is operationalized differently from the RLD, we disagree that the differences between the RLD and the ANDA would be so great as to impede consumers' consideration of using a generic nonprescription drug product with an ACNU.
(Comment 32) We received a comment that recommends FDA require an ANDA include information demonstrating that the key elements of the ACNU are “equivalent to” the key elements of the ACNU for its RLD, rather than “the same as” the key elements of the ACNU for its RLD.
(Response 32) We disagree. The use of the term “same as” is consistent with current regulations applicable to ANDAs. For example, when determining the appropriateness of an ANDA, the term “same as” generally means identical in active ingredient(s), dosage form, strength, route of administration, and conditions of use (see § 314.92(a)(1) (21 CFR 314.92(a)(1))).
(Comment 33) We received a comment asserting that FDA's proposed rule incorrectly suggested that ACNUs are not “conditions of use” under section 505(j) of the FD&C Act. The comment states that although the proposed rule contends that “the specific ways to operationalize the ACNU are not considered key elements of the ACNU and otherwise are not considered a condition of use of the drug product,” the proposed rule does not provide a basis for distinguishing an ACNU from other labeling elements that qualify as “conditions of use.”
(Response 33) We agree with the comment that an ACNU is a “condition of use” under section 505(j) of the FD&C Act, and we appreciate the opportunity to clarify, as relevant to section 505(j), the differences between the ACNU and the way(s) the ACNU is operationalized.
An ANDA for a nonprescription drug product with an ACNU must meet the standards specified under section 505(j) of the FD&C Act and applicable FDA regulations for approval of an ANDA. This final rule does not affect the applicability of these standards, as noted in our responses to Comments 29 and 31. Under section 505(j), an ANDA applicant can rely on FDA's previous finding that the RLD is safe and effective so long as the ANDA applicant demonstrates that the proposed drug product and the RLD are the same with respect to active ingredient(s), conditions of use, dosage form, route of administration, strength, and, with certain exceptions, labeling. (An ANDA must also include sufficient information to demonstrate that the proposed product is bioequivalent to the RLD and that the ANDA meets the approval requirements relating to chemistry, manufacturing, and controls. See sections 505(j)(2)(A) and (4) of the FD&C Act.) This means that for an RLD with an ACNU, FDA would have previously approved the NDA with the description of the key elements of the ACNU (including the additional condition implemented by the applicant to be fulfilled by the consumer, the labeling specifically associated with the ACNU, and the criteria by which the consumer would successfully fulfill the ACNU) as necessary for the safe and effective use of the nonprescription drug product with the ACNU (see 21 CFR 314.56(c)(1)(i) through (vii)). This also means that for an ANDA—which relies upon FDA's previous finding that the RLD is safe and effective—the ANDA must demonstrate that the purpose and key elements of the proposed ACNU are the same as the purpose and key elements of the ACNU approved for its RLD (see 21 CFR 314.56(c)(2)(i) and (ii) of this final rule) as part of meeting section 505(j)'s requirements for sameness (see section 505(j)(2)(A)(ii) of the FD&C Act).
However, an ANDA generally is not required to be the same as the listed drug it references in all respects (see section 505(j)(2)(A)). For example, a generic drug generally can differ from its RLD in certain respects, such as with regard to device configuration or with respect to inactive ingredients. As explained in response to Comment 31, this rule intentionally provides the ANDA applicant flexibility to operationalize its ACNU in a different way from its RLD, as long as the ANDA applicant is able to show that it achieves the same purpose as the ACNU for its RLD and that any differences from the RLD are otherwise acceptable in an ANDA. Moreover, the labeling for the ANDA drug product must be the same as the labeling for its RLD at the time of the ANDA's approval, except for changes required because of differences approved under a petition filed under § 314.93 or because the drug product for which an ANDA is submitted and the RLD are produced or distributed by different manufacturers (see section 505(j)(2)(A) and (j)(4) of the FD&C Act and §§ 314.94(a)(8)(iv) and 314.127(a)(7)). Differences in operationalization between an ANDA and its RLD, and differences in labeling that stem from those differences in operational design, may be permissible; the extent to which such differences affect the approvability of a proposed ANDA will be evaluated on a case-by-case basis. See section 505(j)(2)(A)(v) and (j)(4)(B) of the FD&C Act. We would expect an ANDA that meets the statutory and regulatory sameness requirements for an ANDA, and that operationalizes the ACNU in a different way than the RLD yet achieves the same purpose as the ACNU for its RLD, to be as safe and effective as its RLD.
(Comment 34) We received a comment that recommends that when an ANDA applicant proposes a different way to operationalize the ACNU, the applicant is required to include information to show that this different way to operationalize the proposed ACNU achieves “an equivalent” purpose as the ACNU for its RLD, rather than “the same” purpose as the ACNU for its RLD.
(Response 34) We disagree. The use of the term “same as” is consistent with section 505(j) of the FD&C Act and current regulations applicable to ANDAs. For example, when determining the appropriateness of an ANDA, the term “same as” generally means identical in active ingredient(s), dosage form, strength, route of administration, and conditions of use (see § 314.92(a)(1)).
(Comment 35) We received a few comments that encourage FDA to consider the use of shared system ACNUs between the RLD and ANDA applicants. One comment encourages FDA to establish processes to have ANDA applicants use the same ACNU as the RLD to maintain consistency, similar to the use of shared risk evaluation and mitigation strategy (REMS) programs by generic and brand manufacturers. Another comment states that use of shared system ACNUs could facilitate implementation of the systems in pharmacies and other points of sale and provide a simpler ACNU experience for consumers; however, the comment further states that FDA should not require the use of shared system ACNUs because they could be used to block generic competition.
(Response 35) FDA disagrees with the comment that FDA should encourage ANDA applicants to use a shared system to operationalize the ACNU. While ANDA applicants are required to
(Comment 36) We received a few comments that state that patents claiming aspects of an ACNU for a nonprescription drug product should be eligible for patent listing in FDA's publication “Approved Drug Products With Therapeutic Equivalence Evaluations” (commonly known as the Orange Book) if they meet the criteria outlined in the FD&C Act and FDA's patent listing regulations. One comment states that the statute, which was amended by the Orange Book Transparency Act (Pub. L. 116-290, 134 Stat. 4889 (2021)), and existing regulations already identify the factors that govern whether an ACNU-related patent must be listed. Another comment asserts that the ACNU itself should be given the same full purview of patent protection afforded in the ANDA drug review process and require the follow-on applicant to consider and certify as to the NDA holder's patents. The comment further states that this would serve to put the original ACNU applicant on notice and allow them to take any necessary action regarding potential patent infringement before the follow-on nonprescription drug product with an ACNU comes to market. A separate comment discusses patentability of the ACNU and recommends that an ACNU be afforded similar intellectual patent protection as the drug formulation but only as it relates to drug products indicated to treat a specific condition or symptom. The comment further states that such protection is not advisable for the operationalization of the ACNU because it is unlikely that a sufficiently broad array of possibilities exists to operationalize ACNUs to justify any periods of market exclusivity.
FDA also received a comment recommending that patents claiming aspects of an ACNU for the nonprescription drug product should not be submitted for listing because allowing patents claiming aspects of the ACNU to be listed in the Orange Book would allow a patent holder to try to delay FDA approval of an ANDA for a nonprescription drug product with an ACNU.
(Response 36) We appreciate the comments received in response to our request for comments on whether patents claiming aspects of the ACNU for the nonprescription drug product may be submitted consistent with applicable laws and regulations. To the extent the comments opined on whether an ACNU should be subject to patent protection, FDA notes that questions of patentability are overseen by the U.S. Patent and Trademark Office, and not FDA.
As a general matter, any applicant who submits an NDA must submit applicable patent information to FDA. Such submission of patent information must be consistent with section 505(b)(1)(A)(viii) and (c)(2) of the FD&C Act and 21 CFR 314.53, and a patent must not be submitted for listing unless the patent claims the drug that is the subject of the application and is a drug substance (active ingredient) patent or drug product (formulation or composition) patent, or claims a method of using the drug described in the drug's approved labeling. In turn, a 505(b)(2) or ANDA applicant must provide an appropriate patent certification or statement with respect to each such patent. The status of each patent listed for the listed drug(s) relied upon or reference listed drug, and the relevant patent certification or statement, must be considered in determining the timing of the approval of a 505(b)(2) or ANDA application.
Taking into consideration patent certification and other requirements that might serve as potential barriers to ANDA applicants developing nonprescription drug products, we proposed significant flexibility in the rule to allow an ANDA applicant to operationalize its ACNU in a different way from its RLD. As described throughout this rule (
To the extent the comments summarized here about “market exclusivity” also pertain to statutory exclusivity, those portions of the comments are addressed in our response to Comment 72.
We proposed to establish that because the ACNU allows the nonprescription drug product to be used safely and effectively without the supervision of a practitioner licensed by law to administer such drug, the ACNU is a meaningful difference between the prescription drug product and the nonprescription drug product with an ACNU. Therefore, a prescription drug product and a nonprescription drug product with an ACNU that contain the same active ingredient can be simultaneously marketed even if they do not have other meaningful differences, such as different indications or strengths (proposed 21 CFR 314.56(d)).
After consideration of public comments received, we are finalizing our proposal with an editorial correction. We are making an editorial correction to the proposed heading in 21 CFR 314.56(d), “Simultaneous marketing of nonprescription and prescription products,” by adding the word “drug” such that it now more accurately states, “Simultaneous marketing of nonprescription and prescription drug products”.
FDA believes that the requirement for submission of a separate application (21 CFR 314.56(b)) and the simultaneous marketing provision (21 CFR 314.56(d)) are necessary to fulfill the key goals of this rulemaking, which are to: (1) increase options for applicants to develop and market safe and effective nonprescription drug products, which would broaden the types of nonprescription drug products available to consumers and (2) increase consumer access to appropriate, safe, and effective drug products, by providing for the availability of prescription versions of nonprescription drug products approved with ACNUs, both of which in
Therefore, if 21 CFR 314.56(b) or (d) is stayed or determined to be invalid or unenforceable, the entire rule should be invalidated.
(Comment 37) Many comments support the simultaneous marketing of the same drug as a prescription drug product and a nonprescription drug product with an ACNU. One comment supports simultaneous marketing to increase equitable access to safe and effective drug products and expand consumer choice. Another comment expresses support for FDA clarifying that an ACNU is a meaningful difference and asserts that there has not been clear understanding to date as to what “meaningful difference” means. We also received a comment requesting that FDA require the applicant to have a marketed prescription version of the same drug product at the same time as a marketed nonprescription drug product with an ACNU. However, we received a few comments that disagree with simultaneous marketing and assert that it does not improve or otherwise affect opportunities for consumer access. These commenters assert that simultaneous marketing would inadvertently create a less competitive marketplace by failing to incentivize investment in the process of switching prescription drug products to nonprescription status and, consequently, fail to realize the public health benefits associated with the introduction of novel nonprescription drug products. These commenters also assert that simultaneous marketing is not necessary because the applicant could choose to initiate discussions with FDA about possible options for product access for persons who cannot or choose not to fulfill the ACNU or a consumer would be able to speak to their healthcare practitioner about treatment options if they cannot fulfill the ACNU.
(Response 37) As discussed in section V.G. of this document, we agree that simultaneous marketing could increase consumer access. Continued access to the prescription drug product, along with the availability of the nonprescription drug product with an ACNU, allows greater access to needed drugs by providing flexibility in how to obtain them. The consumer may obtain a nonprescription drug product with an ACNU however it is operationalized or continue to interact with their healthcare practitioner and obtain the approved prescription drug product, if appropriate (see also 87 FR 38313 at 38319).
As discussed in our response to Comment 10, we disagree that simultaneous marketing is not necessary to promote greater access to drug products or that simultaneous marketing would disincentivize development of a nonprescription drug product with an ACNU. FDA recognizes that some consumers may not be able to access the nonprescription drug product with an ACNU. While we agree, as discussed in our response to comment 23, that the applicant may operationalize an ACNU in more than one way, there are consumers that the drug product would not be appropriate for in the nonprescription setting, but the drug product would be an appropriate use when under the supervision of a practitioner licensed by law to administer such drug. If there is not simultaneous marketing of the prescription drug product and nonprescription drug product with the ACNU, the prescription drug product would no longer be able to be marketed, which would eliminate the prescription drug product as a treatment option for health care practitioners to prescribe for patients. Therefore, continued availability of the prescription drug product along with the nonprescription drug product with an ACNU promotes the greatest access to needed drug products in both the prescription and nonprescription settings.
We disagree with the recommendations to revise the rule to require that the applicant market both a prescription version of the drug product and a nonprescription with an ACNU version of the drug product. A nonprescription drug product with an ACNU is not required to first be marketed as a prescription drug product. If the application for a nonprescription drug product with an ACNU meets the evidentiary standards under the FD&C Act and current FDA regulations to demonstrate the safety and effectiveness of the drug product in the nonprescription setting, then FDA could approve the application even if there is not a marketed prescription version.
(Comment 38) We received a comment that many stakeholders have misconceptions about a nonprescription drug product with an ACNU, including the view that nonprescription drug products with ACNUs are a third class of drugs or “an expansion of dual status.” The commenter states that FDA can address these misconceptions by changing the terminology from “simultaneous marketing” to “simultaneous access.”
(Response 38) We clarify that the rule does not establish a third class of drug products for purposes of section 503(b) of the FD&C Act. FDA approves drugs as either prescription or nonprescription drug products under section 505 of the FD&C Act. The rule is intended to increase options for applicants to develop and market safe and effective nonprescription drug products. Also, we interpret the comment about “dual status” to refer to simultaneous marketing of prescription and nonprescription drugs. While we recognize that there may be various misconceptions about what constitutes meaningful differences between prescription and nonprescription drug products, we disagree that changing the terminology in this rule from “simultaneous marketing” to “simultaneous access” will reduce any confusion that may exist. Based on our experience with industry, the term does not currently cause confusion. FDA has consistently used the term “simultaneous marketing” to explain FDA's interpretation of the language in section 503(b) of the FD&C Act to allow the same active ingredient to be simultaneously marketed in both a prescription drug product and nonprescription drug product if a meaningful difference exists between the two that makes the prescription product safe only under the supervision
(Comment 39) We received comments that agree that FDA has the legal authority under the FD&C Act to allow the simultaneous marketing of products with the same active ingredient as both a prescription drug product and a nonprescription drug product if there is a meaningful difference between the two drug products.
(Response 39) We agree with the comments that the FD&C Act permits the simultaneous marketing of a prescription drug product and a nonprescription drug product where a meaningful difference exists between the two that makes the prescription product safe only under the supervision of a practitioner licensed by law to administer such drug.
As noted in the proposed rule, under section 503(b) of the FD&C Act, the same active ingredient can be simultaneously marketed in both a prescription drug product and nonprescription drug product if a meaningful difference exists between the two that makes the prescription product safe only under the supervision of a practitioner licensed by law to administer such drug (see 87 FR 68702, 87 FR 38313 at 38321, 83 FR 13994, and 70 FR 52050). Section 503(b)(1)(A) requires a drug to be limited to prescription-only status if, because of its toxicity or other potentiality for harmful effect, or the method of its use, or the collateral measures necessary to its use, it is not safe for use except under the supervision of a practitioner licensed by law to administer such drug. Conversely, a drug that can be used safely by consumers without the supervision of a practitioner licensed by law to administer such drug does not require a prescription. Under section 503(b)(1), a drug cannot be both prescription and nonprescription at the same time, because it cannot be both safe and unsafe for use without the supervision of a practitioner licensed by law to administer such drug. For the same reason, two drug products with the same active ingredient that don't have meaningful differences also can't be simultaneously marketed as prescription and nonprescription. However, consistent with section 503(b)(1), if there is a meaningful difference (
In addition, under section 503(b)(4)(B) of the FD&C Act, a drug for which the prescription dispensing provisions of section 503(b)(1) do not apply shall be deemed to be misbranded if at any time prior to dispensing, the label of the drug bears the “Rx only” symbol. Likewise, under section 503(b)(4)(A), drugs that are subject to the prescription dispensing provisions of section 503(b)(1) must bear the “Rx only” symbol, or else they are misbranded. This effectively means that, absent a meaningful difference between them, simultaneous marketing of two drug products with the same active ingredient as both prescription and nonprescription drug products would result in one of the two products being misbranded. However, if there is a meaningful difference between two drug products with the same active ingredient that makes one drug product safe for use only under the supervision of a practitioner licensed by law to administer such drug, then simultaneous marketing of the two products is permitted. See also the responses to Comment 2 and Comments 40 through 43, below.
(Comment 40) Some commenters contend that an ACNU is not a meaningful difference for purposes of simultaneous marketing of prescription and nonprescription drugs under section 503(b) of the FD&C Act (see also Comments 41-43 and FDA responses). Specifically, the comments argue that a meaningful difference between two drug products must exist in indication, strength, route of administration, dosage form, or patient population. The commenters assert that a switch to nonprescription status may be accompanied by one of these meaningful changes in addition to an ACNU, but the ACNU itself does not establish such a difference. The commenters specifically cite FDA's decision to withdraw ANDA drug products that referenced the prescription NDA 020698, MiraLAX Powder (polyethylene glycol (PEG)-3350) powder for occasional constipation because FDA approved a full switch of NDA 02698 from prescription to nonprescription marketing. The commenters assert that FDA found that while there were differences in labeling, FDA looks to differences in indication, strength, route of administration, dosage form, [and] patient population to determine whether there is a meaningful difference between the two products. Therefore, the commenters assert that the mere presence of an ACNU does not implicate any of these factors.
(Response 40) FDA disagrees with these comments. FDA's considered judgment, based on the Agency's scientific and technical expertise, is that an ACNU would in fact constitute a meaningful difference between a prescription drug product and a nonprescription drug product with an ACNU, even if they do not have other meaningful differences, such as different indications or strengths. While we have previously provided some examples of what may constitute a meaningful difference, such as indication, strength, route of administration, dosage form, or patient population (see 83 FR 13994 and 70 FR 52050), we have not created a finite list of what may constitute a meaningful difference and will continue to make determinations of “meaningful difference” as appropriate.
In circumstances where the applicant would like to market a previously approved prescription drug product as nonprescription, the applicant must demonstrate that the proposed nonprescription drug product does not meet the criteria in section 503(b)(1) of the FD&C Act. FDA evaluates the data submitted by the applicant and makes a scientific determination about whether consumers can use the drug product safely and effectively without the supervision of a practitioner licensed by law to administer such drug, and therefore the drug product can be approved as nonprescription. When FDA determines that, based on the data, a proposed nonprescription drug product does not meet the criteria in section 503(b)(1) of the FD&C Act, the Agency may also make a scientific determination regarding whether there is a meaningful difference between the nonprescription drug product and a prescription drug product that contains the same active ingredient. If there is no meaningful difference between the products, then the product marketed as a prescription drug product would no longer meet the criteria for prescription drugs in section 503(b)(1) and would need to switch to nonprescription status. For example, with NDA 020698, MiraLAX (PEG-3350) powder for occasional constipation, FDA made a scientific determination that there are no meaningful differences between the prescription and nonprescription drug
There are also examples in which FDA has determined that, based on the data submitted, a drug meets the criteria in section 503(b)(1) of the FD&C Act for certain conditions of use; however, for other conditions of use, it does not meet the criteria in section 503(b)(1) of the FD&C Act. For example, Nasonex (mometasone furoate) nasal spray, 50 microgram (mcg)/spray (NDA 020762) was approved with two indications. FDA determined that data supported that the indication related to treatment of allergy symptoms did not meet the criteria for a prescription drug in section 503(b)(1) of the FD&C Act and that consumers could self-select and use the drug product for that indication in the nonprescription setting. Therefore, on March 17, 2022, based on data submitted by the applicant, FDA approved nonprescription Nasonex 24HR Allergy (mometasone furoate) nasal spray, 50 mcg/spray (NDA 215712) for the temporary relief of allergy symptoms. However, Nasonex's indication of “treatment of chronic rhinosinusitis with nasal polyps in adult patients 18 years of age and older” continues to meet the criteria in section 503(b)(1) of the FD&C Act. Therefore, FDA made a scientific determination that there is a meaningful difference between the prescription and nonprescription drug products because of their different indications, and the prescription and nonprescription drug products may be marketed simultaneously consistent with section 503(b).
Another example involves Xyzal (levocetirizine dihydrochloride) 0.5 mg/milliliter (mL) solution. The prescription product (NDA 022157) was approved in 2008 for the relief of symptoms associated with seasonal allergic rhinitis (SAR) and perennial allergic rhinitis (PAR), and the treatment of uncomplicated skin manifestations of chronic idiopathic urticaria (CIU) for patients 6 years of age and older. In 2009, it was approved for SAR for patients 2 years of age and older, and PAR and CIU in adults and children 6 months of age and older. In 2017, Xyzal Allergy 24HR (NDA 209090) was approved for nonprescription use with the previously prescription indication of SAR in adults and children 2 years of age and older. The nonprescription drug product was also approved with the PAR indication, but only for adults and children 2 years of age and older. The younger age range (6 months of age to under 2 years) remained prescription because the diagnosis of PAR in infants and children under the age of 2 years is more complex and requires the evaluation of a physician. The indication for CIU for all age ranges continues to meet the criteria for prescription use. Thus, the meaningful difference between the prescription and nonprescription versions of Xyzal (levocetirizine dihydrochloride) for the PAR indication is a difference in patient population (
An ACNU is a condition that must be affirmatively fulfilled by a consumer before they can self-select, use, or both self-select and use, a nonprescription drug product. Therefore, a consumer will generally need to act to fulfill an ACNU, and, as explained further in response to Comment 42 below, this distinguishes it from labeling. Similar to the different indications and patient population in the above examples for Nasonex and Xyzal, an ACNU will be a meaningful difference that exists between two drugs that makes the prescription drug product safe only under the supervision of a practitioner licensed by law to administer the drug and the nonprescription drug product safe for use without the supervision of such a practitioner. If an NDA is submitted for a nonprescription drug with an ACNU, FDA would only approve it if FDA determines that the applicant's studies and other information in the application demonstrate the ACNU would make the nonprescription drug product safe for use without the supervision of a practitioner licensed by law to administer the drug product. However, without the ACNU, the drug product would be safe and effective only under the supervision of a practitioner licensed by law to administer the drug product, and FDA could not approve the drug product as nonprescription.
(Comment 41) Some commenters argue that FDA's position that an ACNU is a meaningful difference ignores the statutory language in section 503(b) of the FD&C Act, legislative history of the Durham-Humphrey Amendments to the FD&C Act, legal precedent, specifically the D.C. Circuit's decision in the MiraLAX case,
(Response 41) As discussed in response to Comments 39 through 40 above, and discussed further below in responses to Comments 42 through 43, FDA's position is entirely consistent with, and is in fact the best reading of, the statutory language in section 503(b) of the FD&C Act. Under section 503(b), the same active ingredient can be simultaneously marketed in both a prescription drug product and nonprescription drug product if a meaningful difference exists between the two that makes the prescription product safe only under the supervision of a practitioner licensed by law to administer the drug. FDA disagrees with commenters who argue that a
Recognizing that an ACNU can be a meaningful difference that allows for simultaneous marketing is also consistent with the legislative history of the Durham-Humphrey Amendments of 1951 (Pub. L. 82-215, 65 Stat. 648). Until 1951, the FD&C Act did not contain criteria for determining when to limit a drug's approval to prescription use. As a result, different manufacturers made different decisions about whether to market a drug as prescription or nonprescription. This resulted in confusion and uncertainty for pharmacists and consumers about whether certain drugs were safe for use without the supervision of a physician. To eliminate this confusion and uncertainty, and to protect the public health, Congress amended section 503(b) of the FD&C Act with the Durham-Humphrey Amendments, which had two primary objectives: (1) to protect the public from abuses in the sale of potent prescription drugs; and (2) to relieve retail pharmacists and the public from burdensome and unnecessary restrictions on the dispensing of drugs that are safe for use without the supervision of a physician (see S. Rep. No. 946, at 1 (1951), reprinted in 1951 U.S.C.C.A.N. 2454). By recognizing that there are circumstances under which an ACNU (
FDA's decision to withdraw approval of ANDA products that referenced NDA 020698 MiraLAX (PEG-3350) powder for occasional constipation, and the D.C. Circuit's decision in
Furthermore, FDA's determination here that an ACNU would constitute a meaningful difference is consistent with FDA's approach to the MiraLAX proceedings. There, FDA stated: “In determining whether an Rx drug product and an OTC drug product are the same, FDA considers whether there are any meaningful differences between the OTC and Rx products that would justify the different marketing status of the products” (see 73 FR 63491 at 63492, October 24, 2008). As explained in our response to Comment 40, FDA's considered judgment is that an ACNU, as defined in this rule, would be such a meaningful difference because it would allow a drug product that would otherwise require a prescription to be marketed as a nonprescription drug product.
(Comment 42) One comment argues that an ACNU is labeling or “functionally equivalent to labeling” because it is intended to enable an individualized consumer response for the purpose of self-selection and/or actual use, the same role played by traditional drug labeling, and therefore it does not constitute a meaningful difference between a prescription drug product and a nonprescription drug product.
(Response 42) FDA does not agree that an ACNU is labeling or “functionally equivalent to labeling,” or that legal precedent is being ignored. Prescription drug labeling is designed to inform healthcare practitioners and thus contains more detailed information than nonprescription drug labeling. Nonprescription drug labeling is designed for consumers. As illustrated in the MiraLAX proceedings in
This is consistent with FDA's determination than an ACNU is a meaningful difference because an ACNU (as defined in this regulation) cannot consist merely of labeling, even if one aspect of it includes labeling. A label is the written, printed, or graphic matter on the immediate container of the drug product (see section 201(k) of the FD&C Act). Labeling is all labels or other written, printed, or graphic matter on the drug product or any of its containers or wrappers, or accompanying the drug product (see section 201(m) of the FD&C Act). Labeling for nonprescription drugs provides information to consumers to self-select and use the drug product, and the consumer reads this information to self-select and use the drug product.
In contrast to labeling, an ACNU is a condition that must be affirmatively fulfilled by a consumer before they can self-select, use, or both self-select and use, a nonprescription drug product. Therefore, a consumer will generally need to act to fulfill an ACNU. For example, with Drug X (see more information about Drug X, a fictitious nonprescription drug product with an ACNU, in the proposed rule (87 FR 38313 at 38319)), the ACNU requires all consumers to complete a questionnaire located on a secure website created by the applicant to determine whether Drug X is appropriate for the consumer. Using a consumer's answers to the questions, the underlying program or other operating information used by the secure website, not the consumer,
FDA disagrees that an ACNU is “functionally equivalent to labeling.” With previous prescription-to-nonprescription switches that have been approved by FDA, including the one at issue in the MiraLAX proceedings in
With regard to the comment's argument that an ACNU is functionally equivalent to labeling because they both “ensure appropriate self-selection and use of the OTC product,” the comment does not explain why this is different from other characteristics of a drug that it concedes are meaningful differences. In particular, the comment “request[s] that the final rule acknowledge and maintain FDA's prior position that it will look to indication, strength, route of administration, dosage form, and patient population to determine whether there are meaningful differences between two products with the same active ingredient . . . .” The comment therefore concedes that the indication and patient population can be meaningful differences for purposes of simultaneous marketing under section 503(b) of the FD&C Act, but does not acknowledge that these conditions, which are only reflected in the labeling, also serve to “ensure appropriate self-selection and use of the OTC product.” Such conditions are, in fact, critical to appropriate self-selection and use. Because the ACNU would similarly provide a difference for the drug that is meaningful, the nonprescription drug with an ACNU would be a different drug product from a prescription version, even if it does not have other meaningful differences for purposes of simultaneous marketing under section 503(b) of the FD&C Act.
(Comment 43) We received a comment that argues that this rule, by allowing the simultaneous marketing of the prescription version of the drug product and a nonprescription with an ACNU version of the drug product, “indisputably triggers the major questions doctrine because it would radically overhaul the OTC drug market and limit consumer access to OTC drugs . . . which is undeniably an issue of `vast economic and political significance.' ” (quoting
(Response 43) We do not agree that this rule implicates the “major questions doctrine” because of the provision providing for simultaneous marketing. In
None of the findings described above in
Likewise, for decades other drug products have been approved as nonprescription drug products even though prescription drug products contained the same active ingredient (see 70 FR 52051 for some examples, including loperamide in a prescription drug product for chronic diarrhea and in an OTC drug product for acute diarrhea). In 2005, FDA noted that such meaningful differences had, up to that time, included a difference in indication, strength, route of administration, and dosage form. FDA also indicated that it was considering whether a difference in patient population could also constitute a meaningful difference for purposes of simultaneous marketing (see 70 FR 52050, September 1, 2005). Later, in the
In addition, in 2018, the D.C. Circuit Court of Appeals in
The simultaneous marketing provision in this rule is also unlike the Agency actions in “major questions” cases because, among other things, it does not represent an attempt to “substantially restructure” a market. All that this provision of the rule will do is provide an additional consideration for applicants seeking authorization for a product to enter the market. With regard to simultaneous marketing of prescription drug products and nonprescription drug products, as noted above, there are currently, and there have long been, marketed prescription drug products and nonprescription drug products that contain the same active ingredient because there is some meaningful difference that supports the simultaneous marketing of the drug products, and FDA has made determinations regarding what constitutes a meaningful difference under section 503(b) of the FD&C Act for decades. For this same reason, the simultaneous marketing provision in this rule, which simply clarifies another difference that the Agency has determined would constitute a meaningful difference between prescription and nonprescription drug products under section 503(b), does not represent a “transformative expansion in . . . regulatory authority” that is derived from “vague language of an `ancillary provision[ ]' of the Act.” In addition, inclusion of the simultaneous marketing provision does not create a “regulatory program that Congress [has] conspicuously and repeatedly declined to enact itself.” FDA is not aware of any Congressional consideration of legislation regarding the marketing of nonprescription drugs with ACNUs alongside prescription versions of such drugs.
The comment also appears to be arguing that the simultaneous marketing provision implicates the major questions doctrine because it would “limit consumer access to OTC drugs.” But any prediction that the simultaneous marketing provision would limit consumer access is highly speculative. To support this assertion, the comment claims that “prescription drug companies may decide not to pursue OTC switch opportunities that use an ACNU” if prescription versions of the drug continue to be marketed. Similarly, by way of analogy, one might argue that the benefit of statutory exclusivity, such as that provided at section 505(j)(5)(F)(iii) of the FD&C Act, would be undermined by FDA's rule. However, FDA would disagree with this because as noted below in response to Comment 72, an application—including an application for a nonprescription drug product with an ACNU—is eligible for exclusivity if applicable statutory requirements are met. Further, as noted above, the assertion that the ACNU pathway or the benefit of exclusivity would be undermined by the rule is speculative, particularly considering the evidence showing that roughly 60 percent of purchases for a nonprescription drug product are from new consumers who had not previously taken the drug before it switched from prescription status, suggesting that the potential to attract new-to-therapy consumers for nonprescription drug products is substantial (Ref. 13). Moreover, this critique is not specific to nonprescription drug products with ACNUs; it would also apply to other drug products for which there is a meaningful difference that allows simultaneous marketing. Furthermore, although we do not anticipate this scenario, even if no applicant pursues the development and eventual marketing of a nonprescription drug product with an ACNU, ACNU products do not currently exist in the marketplace. So, it is not clear how this rule would “limit consumer access to OTC drugs,” or how that would implicate the major questions doctrine. Rather, the final rule is intended to increase options for applicants to develop and market safe and effective nonprescription drug products and increase consumer access to appropriate, safe, and effective drug products, which could improve public health.
Ultimately, the simultaneous marketing provision in this rule does not present one of the “extraordinary cases that call for a different approach” in statutory interpretation, because it is not one of the “cases in which the `history and the breadth of the authority that [the agency] has asserted,' and the `economic and political significance' of that assertion, provide a `reason to hesitate before concluding that Congress' meant to confer such authority.” 597 U.S. at 721.
We also note that in the context of arguing that the major questions doctrine applies, this comment further argued that
In any case, we believe this rule represents the best reading of the FD&C Act. As explained in the response to comment 39 and in the proposed rule, section 503(b) of the FD&C Act allows the same active ingredient to be simultaneously marketed in both a prescription drug product and nonprescription drug product if a meaningful difference exists between the two that makes the prescription product safe only under the supervision of a practitioner licensed by law to
In addition, under section 503(b)(4)(B) of the FD&C Act, a drug, for which the prescription dispensing provisions of section 503(b)(1) do not apply, shall be deemed to be misbranded if at any time prior to dispensing, the label of the drug bears the “Rx only” symbol. Likewise, under section 503(b)(4)(A), drugs that are subject to the prescription dispensing provisions of section 503(b)(1) must bear the “Rx only” symbol, or else they are misbranded. The juxtaposition of these two provisions dictates that, absent a meaningful difference between the products, simultaneous marketing of two drug products with the same active ingredient as both a prescription and a nonprescription drug product would result in one of the two products being misbranded. However, if there is a meaningful difference between two drug products with the same active ingredient that makes one drug product safe for use only under the supervision of a practitioner licensed by law to administer such drug, then simultaneous marketing of the two products is permitted.
We believe that FDA's longstanding interpretation of section 503(b), in which a meaningful difference allows prescription and nonprescription drug products with the same active ingredient to be simultaneously marketed, represents the best reading of that provision. A contrary reading would require all ibuprofen products, for example, to be restricted to prescription status because some products containing ibuprofen meet the prescription drug definition in section 503(b)(1) of the FD&C Act. Under the Agency's longstanding interpretation of section 503(b), however, because the nonprescription versions of ibuprofen have meaningful differences from the prescription versions, such as different indications and strengths, they are different drugs that no longer meet the prescription drug definition for purposes of section 503(b). Likewise, a drug that no longer meets the prescription drug definition in section 503(b)(1) of the FD&C Act because it is approved with an ACNU is a different drug for purposes of simultaneous marketing of prescription drugs containing the same active ingredient consistent with section 503(b).
We have already explained in this response how the simultaneous marketing provision of this rule simply reflects another determination by the Agency regarding whether a particular difference constitutes a meaningful difference for purposes of simultaneous marketing of prescription and nonprescription drugs with the same active ingredient under section 503(b) of the FD&C Act. In our responses to Comments 2 and 39 through 42, we also explained how this is consistent with FDA's statutory authority to make scientific determinations about which drugs should be prescription or nonprescription drugs, the legislative history of the Durham-Humphrey Amendments, which added section 503(b) to the FD&C Act, as well as legal precedent and Agency practice.
(Comment 44) We received a few comments asserting that simultaneous marketing of a prescription drug product and the nonprescription drug product with an ACNU could lead to inaccurate case reporting of adverse events for the nonprescription drug product with an ACNU. The comments describe concerns that reports of adverse events for the prescription drug product and the nonprescription drug product with an ACNU could be conflated and identification of a true safety signal for a drug product may not be detected accurately or could be delayed due to background noise.
(Response 44) We disagree that simultaneous marketing of a prescription drug product and a nonprescription drug product with an ACNU, where the only meaningful difference between the two drug products is the ACNU, could lead to inaccurate case reporting of adverse events or delayed identification of a safety signal arising for either drug product. An applicant must report adverse drug experience information to FDA in compliance with applicable postmarketing reporting requirements (§ 314.80). Among other information, an individual case safety report contains certain identifiable information that would be unique to either the prescription drug product or the nonprescription drug product with an ACNU, such as application number and type, drug product name, national drug code, and lot number (§ 314.80(f)). Therefore, FDA would have information to investigate whether the safety signal was associated with a prescription drug product, nonprescription drug product with an ACNU, or both.
Additionally, FDA has robust reporting systems for consumers to report adverse drug experiences, complaints, or other issues with FDA-regulated products, including nonprescription drug products. MedWatch is FDA's program for reporting serious adverse drug experiences, product quality problems, therapeutic inequivalence/failure, and product use errors with human medical products (Ref. 5). Additionally, consumers can contact the FDA Consumer Complaint Coordinator for the State in which they reside to report adverse drug experiences or other problems with FDA-regulated products. FDA's Consumer Complaint Coordinators, located in FDA offices, will listen, document a complaint about an FDA-regulated product, and follow up as necessary (Ref. 6). As with other FDA-regulated products, FDA has experience investigating if there is a safety signal with a particular product.
(Comment 45) We received a few comments opposing simultaneous marketing stating that marketing of a prescription drug product and a nonprescription drug product with an ACNU may lead to consumer confusion because the labeling information for the prescription drug product and nonprescription drug product with an ACNU would not be identical in content or format.
(Response 45) We disagree that simultaneous marketing of a prescription drug product and a
FDA specified in the proposed rule that we would refuse to approve an application for a nonprescription drug product with an ACNU if FDA has determined the application failed to meet the requirements specified in proposed 21 CFR 314.56 applicable to NDAs (proposed 21 CFR 314.125(b)(20)) or ANDAs (proposed 21 CFR 314.127(a)(15)). In the following paragraphs, we discuss the comments on this proposal. After consideration of public comments received, we are finalizing our proposals without change.
(Comment 46) We received a few comments supporting the provision. One comment explains that this provision is important because it alerts applicants to the requirements for a nonprescription drug product with an ACNU and explains FDA's action if the application does not comply with the requirements. We received one comment requesting that FDA include language in the rule to explain that FDA would not approve a nonprescription drug product with an ACNU if it has not been shown that the ACNU is necessary because the commenter believes this specific reason for rejecting an application is somewhat unusual.
(Response 46) An application for a nonprescription drug product with an ACNU must meet all applicable requirements for an application in addition to the specific requirements for a nonprescription drug product with an ACNU in § 314.56 in this final rule. FDA is including in the rule when FDA would refuse to approve an application for a nonprescription drug product with an ACNU. In addition to the other reasons for refusing to approve an application previously established at 21 CFR 314.125 and 314.127, we are establishing at 21 CFR 314.125(b)(20) and 314.127(a)(15) in this final rule, that we would refuse to approve an application for a nonprescription drug product with an ACNU if FDA determined the application failed to meet the applicable requirements in 21 CFR 314.56. For example, if an application for a nonprescription drug product with an ACNU fails to include a statement regarding the necessity of the ACNU (21 CFR 314.56(b)(1)(ii) in this final rule) or include adequate data or other information that demonstrates the necessity of the ACNU to ensure appropriate self-selection or appropriate actual use, or both (21 CFR 314.56(b)(1)(v) in this final rule), FDA would not approve the application.
We proposed to require a new postmarketing report for nonprescription drug products with ACNUs. We proposed that applicants must report to FDA information concerning any incident of failure in the implementation of an ACNU using the FDA Adverse Event Reporting System (FAERS) (proposed 21 CFR 314.81(b)(3)(v)). In the following paragraphs, we discuss comments on this proposed requirement.
After considering the comments, which we discuss below, we are making clarifying changes to the requirement because of significant commenter confusion as to when a postmarketing report should be submitted to FDA and concerns about duplicative reporting requirements. We are replacing the title “Report of failure in the implementation of an additional condition for nonprescription use” with “Report of additional condition of nonprescription use (ACNU) failure for a nonprescription drug product with an ACNU” in the heading. We are replacing the phrases “when a failure in the implementation of an additional condition for nonprescription use (ACNU) for a nonprescription drug product occurs” and “report of a failure in implementation of an ACNU” with “report of an ACNU failure” throughout 21 CFR 314.81(b)(3)(v) of the final rule. We are designating 21 CFR 314.81(b)(3)(v)(A) and adding the subtitle “ACNU failure” followed by the explanation that an ACNU failure occurs upon either of the following events: (1) a failure associated with the implementation of the key elements of the ACNU under 21 CFR 314.56(c)(1)(iv) or (c)(2)(ii)) or (2) a failure associated with the operationalization of an ACNU under 21 CFR 314.56(c)(1)(vii) or (c)(2)(iii), as approved by FDA in the application (21 CFR 314.81(b)(3)(v)(A) in this final rule). To address confusion about applicant responsibilities in connection with ACNU failure reporting requirements and to be consistent with certain existing postmarketing reporting requirements for adverse drug experiences (see § 314.80), we are adding 21 CFR 314.81(b)(3)(v)(B), stating that the applicant must develop written procedures for the surveillance, receipt, evaluation, and reporting of ACNU failures to FDA. We note that FDA has described its intention to issue a proposed rule that, among other things, would modernize postmarketing safety reporting requirements for human drug and biological products and require application holders for drug products and certain biological products to establish and maintain a pharmacovigilance quality system (see Regulation Identifier Number 0910-AI61 on Fall 2023 Unified Agenda of Regulatory and Deregulatory Actions). In that proposed rule, FDA intends to provide notice and an opportunity for comment on any proposed changes that, if finalized, may affect the requirements in § 314.81(b)(3)(v) of this final rule.
We are designating § 314.81(b)(3)(v)(C) and adding the subtitle “Report of ACNU failure” followed by information about the report of ACNU failure. To address commenter confusion that a report of an ACNU failure is duplicative of existing
We are designating the content of the report of ACNU failure to § 314.81(b)(3)(v)(D) in this final rule and adding the subheading “Content of Report of ACNU failure.” We are revising the subheading in § 314.81(b)(3)(v)(A)(
We are also making nonsubstantive changes to align with existing postmarketing reporting requirements. We are replacing “adverse event” with “adverse drug experience” throughout § 314.81(b)(3)(v) in this final rule to align with the terminology used for postmarketing reporting requirements for adverse drug experiences in § 314.80. Although reports of an ACNU failure will be submitted to FAERS, we have removed specific mention of FAERS from the rule to align with existing postmarketing reporting requirements which do not specifically refer to an FDA database for submissions (see,
We are also making the following clarifying revisions on our own initiative in § 314.81(b)(3)(v): (1) replacing the word “submitter” with “applicant,” (2) replacing “obtains” with “receives or otherwise obtains,” (3) removing the word “as” before the clause “required in § 314.80(f),” and making corresponding grammatical changes in sentences (
(Comment 47) We received many comments that support FDA's proposal to require postmarketing reports for an ACNU failure. We received many comments that support robust postmarketing surveillance for nonprescription drug products with ACNUs for FDA to monitor the drug products. One comment recommends that if an applicant does not comply with the reporting requirement, the applicant must market its drug product as a prescription drug product and cannot market its drug product as a nonprescription drug product with an ACNU.
(Response 47) FDA agrees that postmarketing reports of an ACNU failure are an important part of FDA surveillance to ensure that consumers are appropriately accessing the nonprescription drug product with the ACNU as approved by FDA. If an applicant does not comply with the requirements for postmarketing reports, the applicant may be subject to an FDA enforcement action for failure to submit required postmarketing reports (see section 301(e) of the FD&C Act (21 U.S.C. 331(e)); see also section 505(e) of the FD&C Act).
(Comment 48) We received a few comments asserting that the requirement for a report of an ACNU failure exceeds FDA's statutory authority, particularly where no adverse event occurred.
(Response 48) We disagree that FDA lacks authority to require postmarketing reports of ACNU failures, including when they are not associated with particular adverse drug experiences.
When describing the kinds of data or information that FDA may require to be reported, section 505(k)(1) of the FD&C Act does not expressly refer to adverse drug experiences, and instead refers to a broader category of “data relating to clinical experience and other data or information.” In contrast, in other parts of the FD&C Act, the statute does expressly use the term “adverse drug experience,” see,
Additionally, like these other kinds of information, even when there is no adverse drug experience that is clearly associated with an ACNU failure, ACNU failures generally would have a bearing on whether the Agency may consider withdrawal proceedings pursuant to section 505(e) of the FD&C Act. For example, under section 505(e), the Agency may withdraw approval of an application if certain new information shows that a drug is not safe for use under the conditions of use upon the basis of which the application was approved. If the applicant does not ensure that the ACNU is implemented and operationalized as approved by FDA in the application, then the drug may no longer be considered safe and effective for use in the nonprescription setting. In such a case, FDA may consider withdrawing an application, if, for example, an applicant fails to take appropriate corrective action to prevent reoccurrence of an ACNU failure of the same nature.
More specifically, because a nonprescription drug product with an ACNU must only be made available to consumers who fulfill the ACNU for whom it is appropriate, ACNU failures are relevant to understanding the safety and effectiveness of the drug. With an ACNU failure, an adverse drug experience may very well occur even if there are no reported adverse drug experiences associated with a particular ACNU failure. The ACNU failure could be an indication that the method of implementing or operationalizing the ACNU is flawed, which may result in the drug product not being made available to consumers for whom it is appropriate and, in other instances, may result in the drug product being made available to consumers for whom it is not appropriate. For example, with Drug X (see more information about Drug X, a fictitious nonprescription drug product with an ACNU, in the proposed rule (87 FR 38313 at 38319)), the ACNU requires all consumers to complete a questionnaire located on a secure website created by the applicant to determine whether Drug X is appropriate for the consumer. The consumer answers the series of questions in the questionnaire and the underlying program or other operating information used by the secure website calculates the risk score for a serious side effect and determines if the consumer has an acceptable disease-specific risk score to use Drug X and therefore purchase Drug X. A software failure that results in a miscalculation of the risk score would be an ACNU failure even if the failure did not provide the consumer with access to drug product because such failure in calculating the risk score could similarly provide consumers access to the drug product for whom it is not appropriate. FDA and applicants have an interest in understanding the ACNU failures and mitigating the risk of reoccurrence of an ACNU failure because ACNU failures could result in adverse drug experiences or lead to the drug product being made available to consumers that should not be taking the drug product for various reasons.
(Comment 49) We also received several comments that oppose the proposed postmarketing reporting requirement for a nonprescription drug product with an ACNU as “overly broad,” “unnecessary”, or “excessive burdensome.” Those comments request that FDA revise or remove the requirement to report an ACNU failure. The comments contend that a nonprescription drug product with an ACNU would already be subject to the same postmarketing reporting requirements for adverse drug experiences in § 314.80 and, if applicable, 21 CFR part 803 for medical devices. The comments assert that the postmarketing reporting requirement for ACNU failures could require the submission of a very large number of postmarketing reports and will place undue resource demands on both applicants and FDA. Several comments suggest revisions in how FDA defines a failure in implementation of an ACNU to narrow the scope of the reporting requirement. A few of these comments suggest that the submission of a report should be limited to an ACNU failure that results in an adverse event or that is likely to result in an adverse event. A few comments suggest that what they consider nonsignificant failures (
(Response 49) After consideration of comments received, FDA is revising the requirement to report ACNU failures for clarity and to decrease any potential duplicative reporting. We are clarifying the events that would result in the submission of a report of an ACNU failure to make clear that these reports are not duplicative of the applicable regulatory requirement for the submission of postmarketing reports of adverse drug experiences under § 314.80. In order to clarify that only reports of ACNU failures are required to be submitted in a postmarketing report under § 314.81 and because postmarketing reports of adverse experiences are currently required under § 314.80, we are removing language that: (1) a report of an ACNU failure should be submitted if the failure may cause or lead to inappropriate medication use or consumer harm and (2) a report must be submitted to FAERS whether or not the failure in implementation of the ACNU is associated with an adverse event. We clarify that a report of an ACNU failure must be submitted to FDA when an event occurs that differs from the following, as approved by FDA in the application including: (1) a failure associated with the implementation of one or more of the key elements of an ACNU under § 314.56(c)(1)(iv) or (c)(2)(ii) or (2) a failure associated with operationalization of the ACNU under 21 CFR 314.56(c)(1)(vii) or (c)(2)(iii) (§ 314.81(b)(3)(v) in this final rule). A nonprescription drug product with an ACNU that includes a device constituent part is also subject to combination product reporting requirements, including malfunction reporting (see 21 CFR 803.50 and part 4) for an event involving the device constituent part.
For the reasons explained in response to Comment 48, we disagree that reports of ACNU failure should only be submitted for ACNU failures that result in an adverse event or that is likely to result in an adverse event.
(Comment 50) We received a comment suggesting that the proposed postmarketing reporting provision would require reports about a wide range of technological failures, including routine and quickly resolved technological failures (
(Response 50) Reports of ACNU failures may need to be submitted for various types of technological failures. However, the specific circumstances of the technological failure would
(Comment 51) One comment states that frequent reporting of “problems” to FDA also might stigmatize nonprescription drug products with ACNUs, as some observers may incorrectly equate any reported problem with a threat to someone's health.
(Response 51) We interpret the comment about “frequent reporting of problems” to mean frequent reporting of ACNU failures and disagree. FDA has a public health interest in receiving reports of ACNU failures because the FDA-approved ACNU ensures consumers' appropriate self-selection or appropriate actual use, or both, of the nonprescription drug product without the supervision of a practitioner licensed by law to administer such drug. FDA and applicants have an interest in understanding the ACNU failures and mitigating the risk of reoccurrence of an ACNU failure because ACNU failures could result in adverse drug experiences or lead to the drug product being made available to consumers that should not be taking the drug product for various reasons, even if the initial failure did not.
(Comment 52) We received a comment expressing concerns that the proposed rule requires immediate reporting regardless of the nature of the failure and will require a significant change to pharmacovigilance programs with limited benefit.
(Response 52) As explained in our responses to Comments 49-50, FDA clarified the events that would result in the submission of a report of an ACNU failure. The applicant must submit the report of an ACNU failure as soon as possible but no later than 15 calendar days from the date when the applicant has acquired the minimum dataset for an ACNU failure (§ 314.81(b)(3)(v)(E) of this final rule). We disagree that applicants will need to make significant changes to pharmacovigilance programs in order to comply with the timeframe for submitting a report of an ACNU failure under § 314.81 because the requirement is consistent with the timeframe for the submission of certain postmarketing reports of adverse drug experiences under § 314.80. Therefore, applicants will generally already have systems in place that could be adapted to facilitate the reporting of ACNU failures. FDA has a public health interest in receiving reports of ACNU failures expeditiously because the FDA-approved ACNU ensures consumers' appropriate self-selection or appropriate actual use, or both, of the nonprescription drug product without the supervision of a practitioner licensed by law to administer such drug. Further, as explained previously, FDA and applicants have an interest in understanding the ACNU failures and working to mitigate the risk of recurrence of an ACNU failure.
(Comment 53) We received several comments on the burden and benefits of submitting individual reports to FDA for each individual ACNU failure encountered by a consumer resulting from the same cause of failure, as opposed to a single, consolidated report for all such failures. We received several comments supporting a single, consolidated report to reduce the reporting burden on applicants. We received a few comments that recommend FDA consider the nature of the failure or clinical outcome of the failure (
(Response 53) As explained in our responses to Comments 49-50, FDA clarified the events that would result in the submission of a report of an ACNU failure as not all issues related to an ACNU are ACNU failures. FDA specifically sought comment on the burden and benefits of submitting an individual report to FDA for each ACNU failure encountered by a consumer resulting from the same cause of failure, as opposed to a single, consolidated report for such failures. Given the possibility for numerous reasons for an ACNU failure depending on the particular circumstances, FDA believes that individual reporting for ACNU failures would provide more specific information to facilitate an understanding of ACNU failures, their causes, and their outcomes. Therefore, we disagree with submitting a single, consolidated report of an ACNU failure resulting from the same cause of failure.
The VMSR program (see 83 FR 40973, August 17, 2018) is a voluntary program intended to streamline reporting of device malfunctions in certain situations based on FDA experience with summary reporting programs, key findings from CDRH's pilot program for the submission of Medical Device Reports (MDRs) in summary format on a quarterly basis, and other information summarized in the 2017 proposal for the VMSR program (see 82 FR 60922, December 26, 2017). Therefore, we disagree with implementing a reporting procedure for nonprescription drug products with ACNUs similar to the VMSR program because we do not have findings on which to base a streamlined approach. To decrease any potential duplicative reporting burden by applicants, we clarified the events that would result in the submission of a report of an ACNU failure to FDA.
(Comment 54) We received a few comments questioning whether FAERS is an appropriate database for collecting reports of ACNU failures. One comment specifically raises a concern about whether FAERS is appropriate to collect reports of technological failures, considering that FAERS currently focuses on adverse events and product defects and quality. The comment further asks FDA to clarify any changes that would be required to the reporting forms to accommodate ACNU failures. A few comments also question whether the clinical reviewers of FAERS reports have the expertise to evaluate reports of technological problems and the attempted remedies.
(Response 54) FAERS is the database currently designed to support FDA's postmarketing safety surveillance program for drugs and certain biological products and can currently accommodate reports of ACNU failures. Although reports of an ACNU failure will currently be submitted to FAERS, we have removed specific mention of FAERS from the rule to align with other postmarketing reporting regulations,
The informatic structure of the FAERS database aligns with the International Council for Harmonisation guidance for industry entitled “E2B(R3) Electronic Transmission of Individual Case Safety Reports (ICSRs) Implementation Guide—Data Elements and Message Specification” (available at
FDA reviewers are trained to evaluate reports of technological problems and the attempted remedies. Center for Drug Evaluation and Research (CDER) reviewers may consult CDRH reviewers, when appropriate, to address any issues regarding technology related to an ACNU.
(Comment 55) We received one comment suggesting that pharmacies or sellers would be required to report and record ACNU failures thereby placing a tremendous burden on the pharmacies or sellers.
(Response 55) We disagree. While a pharmacist or other individual may voluntarily submit a report of an ACNU failure to FDA's reporting systems such as Medwatch (Ref. 5), the rule requires the applicant of the nonprescription drug product with an ACNU to submit reports of an ACNU failure (see § 314.81(b)(3)(v) in this final rule). Therefore, unless they are applicants for the relevant drug product, pharmacies and sellers are not required under the rule to report ACNU failures.
(Comment 56) We received a comment seeking clarification on whether FDA expects an applicant to implement remediation for every ACNU failure. The comment further states that an applicant should determine when remediation should be implemented based on its safety assessment and that the remedial action taken to address the ACNU failure depends on the type of failure and the consequence of the failure.
(Response 56) If there is an ACNU failure, an event has occurred that is not consistent with FDA's approval of the nonprescription drug product with an ACNU in one or both of two ways: (1) a failure associated with the implementation of the key elements of an ACNU under 21 CFR 314.56(c)(1)(iv) or (c)(2)(ii) or (2) a failure associated with operationalization of the ACNU under 21 CFR 314.56(c)(1)(vii) or (c)(2)(iii), as approved by FDA in the application (§ 314.81(b)(3)(v) in this final rule). The applicant must explain the remedial action initiated or completed and the corrective action to prevent ACNU failures of the same nature in the future (§ 314.81(b)(3)(v)(A)(
(Comment 57) We received a comment requesting that FDA provide guidance on how often applicants should monitor a nonprescription drug product with an ACNU.
(Response 57) We understand the need for additional clarity here. In the proposed rule, we stated that, “to meet these reporting requirements, applicants will likely need quality assurance systems in place to capture instances where failures in implementation of an ACNU occur” (87 FR 38313 at 38322). The proposed rule also proposed that the report must include certain information that the applicant is aware of about the drug product and the initial reporter, as well as a narrative summary of the failure in implementation of an ACNU and a description of the action initiated or completed to address the failure in implementation of an ACNU (87 FR 38313 at 38323 and proposed § 314.81). As mentioned earlier, to address confusion and be consistent with the existing postmarketing reporting requirements for adverse drug experiences (see § 314.80) and cognizant of minimizing burden we are adding § 314.81(b)(3)(v)(B), stating that the applicant must develop written procedures for the surveillance, receipt, evaluation, and reporting of ACNU failures to FDA. This gives applicants flexibility to develop procedures specific to the drug product and potentially align with any written procedures already established with respect to § 314.80 to help minimize burden. We anticipate that applicants could adapt any written procedures for surveillance, receipt, evaluation, and reporting of postmarketing adverse drug experiences as already required under § 314.80 to also include instances of an ACNU failure.
(Comment 58) We received a comment that recommends FDA create a consumer-friendly website and telephone number for consumers to report issues with a nonprescription drug product with an ACNU.
(Response 58) FDA already has reporting systems for consumers to report adverse drug experiences, complaints, or other issues with FDA-regulated products, including nonprescription drug products. MedWatch is the FDA's program for reporting serious adverse drug experiences, product quality problems, therapeutic inequivalence/failure, and product use errors with human medical products (Ref. 5). Additionally, consumers can contact the FDA Consumer Complaint Coordinator for the State in which they reside to report adverse drug experiences or other problems with FDA-regulated products. FDA's Consumer Complaint Coordinators, located in FDA offices, will listen, document a complaint about an FDA-regulated product, and follow up as necessary (Ref. 6). Therefore, we disagree that FDA needs to create an additional consumer-friendly website and telephone number for consumers to report issues specific for a nonprescription drug product with an ACNU.
We proposed to require that a nonprescription drug product with an ACNU must comply with all applicable regulatory requirements for nonprescription drug products under part 201 (21 CFR part 201), including the format and content of nonprescription drug product labeling under § 201.66 and the statements specified in proposed 21 CFR 201.130(a) (proposed 21 CFR 201.67(c)). In the following paragraphs, we discuss the comments on these requirements. After consideration of public comments received, we are finalizing our proposals with modifications for clarity and consistency with revisions made to § 201.130 in this final rule. Specifically, we are revising the citation in 21 CFR 201.67(c) of the final rule from “§ 201.130(a)” to “§ 201.130(a) and (b).”
(Comment 59) We received several comments supporting the proposed labeling requirements because the labeling will help consumers use nonprescription drug products with ACNUs safely and effectively. However, a few comments express concerns about whether consumers possess the capacity to obtain, process, and understand the basic health information needed to make an appropriate health decision using the labeling for nonprescription drug products with ACNUs. A few comments discuss accessibility of labeling for nonprescription drug products with an ACNU, and one comment recommends that labeling should be made available to consumers in multiple languages using a quick-response code (commonly referred to as a QR code) on the labeling. Another comment requests that FDA develop criteria to ensure accessibility of labeling for nonprescription drug products with ACNUs.
(Response 59) We understand commenters' concerns that some consumers may have difficulty using the labeling for a nonprescription drug product with an ACNU. However, consistent with the development of nonprescription drug products,
FDA acknowledges the benefits of having translated drug information for individuals with limited English proficiency. FDA's current regulations require that all words, statements, and other information required by or under authority of the FD&C Act appear on the label or labeling in the English language, with limited exceptions (see § 201.15(c)). In the case of articles distributed solely in the Commonwealth of Puerto Rico or in a Territory where the predominant language is one other than English, the predominant language may be substituted for English. In addition to English, an applicant may provide consumers with labeling in other languages; however, applicants (and not FDA) must ensure the translation of the labeling is accurate and complete. FDA strongly encourages applicants to work with retailers and other organizations to ensure that a nonprescription drug product with an ACNU is accessible to individuals with limited English proficiency. To the extent an applicant, retailer, or other organization receives Federal financial assistance from the U.S. Department of Health and Human Services (HHS), they are required to take reasonable steps to provide meaningful access to their programs and activities by individuals with limited English proficiency under Title VI of the Civil Rights Act of 1964 and its implementing regulations (42 U.S.C. 2000d,
We note that we considered requiring that the label include additional information for consumers such as information that the drug may also be available as a prescription drug product. We ultimately rejected that idea, however; the purpose of applicable labeling requirements for nonprescription drug products and the specific labeling requirements for nonprescription drug products with an ACNU is to provide consumers with the information that they need to self-select and use the drug product in the nonprescription setting, not to inform them of other treatment options. However, while FDA would not require this information on the labeling of the nonprescription drug product, the applicant may choose to engage in promotional communications for both the approved prescription and nonprescription drug products.
(Comment 60) We received one comment that requests FDA clarify the standards for permissible labeling differences between an RLD and an ANDA nonprescription drug product with an ACNU that is operationalized differently from the RLD to increase the viability of the ACNU pathway for generic drug products.
(Response 60) We disagree with the need to clarify permissible labeling differences specific to an RLD and an ANDA nonprescription drug product with an ACNU because the rule does not change the standards for permissible labeling differences between an RLD and an ANDA. The labeling for the ANDA drug product must be the same as the labeling for its RLD at the time of the ANDA's approval, except for changes required because of differences approved under a petition filed under § 314.93 or because the drug product for which an ANDA is submitted and the RLD are produced or distributed by different manufacturers (see section 505(j)(2)(A) and (j)(4) of the FD&C Act and §§ 314.94(a)(8)(iv) and 314.127(a)(7)). Any permissible labeling difference would be determined on a case-by-case basis as we consider the specifics of each application for a nonprescription drug product with an ACNU during our review.
(Comment 61) We received a comment that the proposed labeling requirements of 21 CFR 201.67(c) do not impose any incentive or requirement for consumers to read the information provided by the applicant before accessing and fulfilling the ACNU. The comment suggests that consumers could access the information on the provided website, disregard the information, and fulfill the ACNU without having the requisite knowledge to make an informed decision.
(Response 61) While FDA acknowledges that we cannot require a consumer to read labeling, the applicant must describe how the ACNU will ensure appropriate self-selection or appropriate actual use, or both, by consumers (21 CFR 314.56(c)(1)(iii) in this final rule) and submit adequate data or other information that demonstrates the effect of the ACNU on the appropriate self-selection or appropriate actual use, or both, by the consumer of the nonprescription drug product (21 CFR 314.56(c)(1)(vi) in this final rule).
We proposed to require that the ACNU Statement specified in proposed 21 CFR 201.130(a)(2) meet specific format requirements (proposed 21 CFR 201.67(d)). In the following paragraphs, we discuss the comments on this proposed requirement. After consideration of public comments received, we are finalizing our proposal with modifications for consistency with changes made to 21 CFR 201.130 and elsewhere in this final rule. We are finalizing the proposed title of the requirement, “Format requirements for required ACNU statement” with minor revision to read as follows: “Format requirements for the required statement about the ACNU.” We are replacing the word “statement” with the phrase “statement about the ACNU” in all instances throughout § 201.67(d) for clarity. We proposed that the statement specified in § 201.130(a)(2) must meet all format requirements that are specified in § 201.67(d). However, due to revisions in the regulation's text, we are revising the citation of 21 CFR 201.130(a)(2) to 21 CFR 201.130(b)(1).
(Comment 62) We received one comment in support of the proposed format requirement that the ACNU Statement specified in proposed 21 CFR 201.130(a)(2) appear in a yellow background banner. However, several comments oppose the proposed format requirement that the statement about the ACNU appear in boldface and black type in a yellow background banner. Several comments state that the proposed format requirements: (1) are overly prescriptive, (2) may not achieve
(Response 62) We disagree with revising the format requirements for the statement about the ACNU. While we understand concerns from some commenters that the formatting of the statement may visually conflict with trade dress, the distinctive formatting (
(Comment 63) A few comments oppose the proposed font size requirement asserting the font size is exceptionally large given the variability of package sizes. One comment suggests that the proposed font size requirements result in the statement consuming a significant portion of the PDP, from one-quarter to one-third of the PDP, at a minimum. One comment recommends permitting the use of a smaller font size when the required minimum font size is not feasible due to the package size (
(Response 63) FDA disagrees that the required font size is exceptionally large. Published references recommend a larger font size, such as 12-point sans serif to improve readability (Refs. 7 and 8). A larger font size will help ensure consumers can identify a nonprescription drug product with an ACNU and read the statement that alerts consumers that the drug product is not suitable for all individuals and should only be used after fulfilling the ACNU. As required in existing regulations for nonprescription drug product labeling, the PDP must be large enough to accommodate all the mandatory label information required to be placed on the PDP with clarity and conspicuousness and without obscuring designs, vignettes, or crowding (see § 201.60). Applicants can reduce the font size of the trade or proprietary name of the nonprescription drug product with an ACNU, if one exists, and promotional material to allow room for the statement about the ACNU. We believe an applicant should generally be able to include the statement on the PDP as specified in the rule without having to increase the package size. However, we also proposed an exception—an applicant may request an exception to the minimum font size requirement for containers where its size would render compliance with the requirement impractical (§ 201.67(d)(5) in this final rule).
We proposed to exempt a nonprescription drug product with an ACNU from the statutory requirement to be labeled with adequate directions for use, provided that certain conditions are met. Specifically, we proposed a nonprescription drug product approved with an ACNU under section 505(c) or (j) of the FD&C Act would be exempt from section 502(f)(1) if the product contains the labeling required under proposed 21 CFR 201.130(a) and the ACNU is implemented by the applicant as approved by FDA in the application (proposed 21 CFR 201.130). We proposed to require that the following statement appear as the first direction under the heading “Directions” in the labeling, as required in 21 CFR 201.66(c)(6): “To check if this drug is safe for you, go to [insert where or how consumers can find information about the ACNU; for example, applicant's website, phone number, or specific retail location] and [insert action to be taken by consumer]. Do not take this drug without completing this step.” (Proposed 21 CFR 201.130(a)(1)) We also proposed to require that the following statement appear on the immediate container label and, if one exists, the outside container or wrapper of the retail package: “You must complete an extra step to see if this drug is safe for you before you use it. Do not take this drug without completing this step. See the Drug Facts Labeling for more information.” (Proposed 21 CFR 201.130(a)(2)) We proposed that this statement must meet the specific format requirements as specified in proposed 21 CFR 201.67(d). We also proposed that the labeling of the drug must comply with other applicable labeling requirements for nonprescription drug products under part 201, including the format and content requirements for nonprescription drug product labeling under 21 CFR 201.66 (proposed 21 CFR 201.130(a)(3)). Lastly, we proposed to require the ACNU to be implemented by the applicant under the conditions set forth in the approved application for the nonprescription drug product with an ACNU to be exempt from the requirement to be labeled with adequate directions for use (see 87 FR 38313 at 38324 and proposed 21 CFR 201.130(b)).
In the following paragraphs, we discuss the comments on this requirement. After consideration of public comments received, we are finalizing our proposals with modifications as discussed. After considering comments, as discussed below, we are adding flexibility to the labeling requirements regarding instructions for the ACNU and the statement about the ACNU (21 CFR 201.130(a) and (b) in this final rule). These requirements, as revised based on comments we received, provide flexibility for applicants to better convey information to consumers for a particular nonprescription drug product with an ACNU. FDA feels strongly that the content of required labeling in 21 CFR 201.130(a)(1) and (b)(1) in this final rule should generally be consistent across all nonprescription drug products with ACNUs. Consistency in the content of the labeling is important to help consumers understand (including the original purchaser and persons other than the original purchaser) that these nonprescription drug products are not
FDA is also adding flexibility by requiring the location of the instructions for the ACNU specified in 21 CFR 201.130(a)(1) in this final rule to either appear under the “Use” or “Uses” heading or the “Directions” heading, depending on the purpose of the ACNU, to better inform consumers of the reason that the ACNU needs to be fulfilled (21 CFR 201.130(a)(2) in this final rule).
To accommodate the revisions, we had to make changes to the structure of the regulatory text. We are adding “(ACNU)” to the header in 21 CFR 201.130 in this final rule. We are deleting the clause “in paragraphs (a) and (b) of this section are met” in the introductory text. We are revising 21 CFR 201.130(a) completely in this final rule to explain the required instructions for the ACNU. The introductory text at 21 CFR 201.130(a) in this final rule now states: “The label of the drug must include instructions for the ACNU as follows:”. We are also completely revising 21 CFR 201.130(a)(1) introductory text in this final rule to read “Content of instructions for the ACNU must either be:” in order to accommodate revisions that the applicant may propose to the instructions for the ACNU. We are also moving the language of the instructions for the ACNU from 21 CFR 201.130(a)(1) as proposed to 21 CFR 201.130(a)(1)(i). Therefore, the ACNU instructions in 21 CFR 201.130(a)(1)(i) will read as follows: “[T]o check if this drug is safe for you, go to [insert where or how consumers can find information about the ACNU; for example, applicant's website, applicant's phone number, or specific retail location] and [insert action to be taken by consumer]. Do not take this drug without completing this step”. Additionally, we are adding alternative ACNU instructions in 21 CFR 201.130(a)(1)(ii) to read “FDA may approve an NDA applicant's revisions to the ACNU Instructions when the revisions are appropriate for a specific drug product and the applicant supports the revisions with adequate data or other information that demonstrate sufficient consumer understanding of the revised statement.” We are deleting the clause in proposed 21 CFR 201.130(a)(1) “The statement must be followed by the other information required in 21 CFR 201.66(c)(6)” as it was redundant after the revisions to the final rule. We are adding 21 CFR 201.130(a)(2) introductory text for clarity and to provide the location of the instructions, which will read “The locations of instructions for the ACNU are as follows:”. We are adding flexibility to the placement of the statement by adding 21 CFR 201.130(a)(2)(i) through (iii) in this final rule (previously proposed in 21 CFR 201.130(a)(1)). We are adding 21 CFR 201.130(a)(2)(i), stating that if the purpose of the ACNU is for self-selection, the instructions for the ACNU must appear under the “Use” or “Uses” heading required in 21 CFR 201.66(c)(4) as the first statement, followed by the other information required in 21 CFR 201.66(c)(4). We are also adding 21 CFR 201.130(a)(2)(ii) in the final rule, stating that if the purpose of the ACNU is for actual use, the instructions for the ACNU must appear under the “Directions” heading required in 21 CFR 201.66(c)(6) as the first direction, followed by the other information required in 21 CFR 201.66(c)(6), which is consistent with the location of the statement on the labeling as proposed. We are adding 21 CFR 201.130(a)(2)(iii) in the final rule, stating that if the purpose of the ACNU is for both self-selection and actual use, the instructions for the ACNU must appear under the “Use” or “Uses” heading as the first statement, followed by the other information required in 21 CFR 201.66(c)(4) and may also appear under the “Directions” heading as the first direction, followed by the other information required in 21 CFR 201.66(c)(6).
Additionally to further accommodate the added flexibility, we are revising 21 CFR 201.130(b) introductory text in this final rule to state that the label of the drug must include a statement about the ACNU. We are also adding 21 CFR 201.130(b)(1) to read “Content of the statement about the ACNU must either be:” We are adding 21 CFR 201.130(b)(1)(i) to include the language of the statement in proposed 21 CFR 201.130(a)(2) as follows: “You must complete an extra step to see if this drug is safe for you before you use it. Do not take this drug without completing this step. See the Drug Facts Labeling for more information”. We are also adding 21 CFR 201.130(b)(1)(ii), stating that FDA may approve an NDA applicant's revisions to the ACNU Statement when revisions are appropriate for a specific drug product and the applicant supports the revisions with adequate data or other information that demonstrate sufficient consumer understanding of the revised statement. We are adding 21 CFR 201.130(b)(2) in this final rule to include information consistent with the format information proposed in § 201.130(a)(2) to read as follows: “The statement about the ACNU must be in the form and manner required by § 201.67(c).” We are redesignating proposed 21 CFR 201.130(a)(3) to § 201.130(c) of this final rule with minor editorial changes to revise “Complies” to “The labeling of the drug must comply” for clarity. We are redesignating proposed § 201.130(b) to § 201.130(d) in this final rule with minor editorial revisions to revise “The additional condition for nonprescription use” to “ACNU.” Furthermore, we are also making revisions for consistency with revisions to 21 CFR 201.67(e) and 314.81(b)(3)(v) in this final rule to provide clarity on implementation of an ACNU by revising “under the conditions set forth in the approved application.” to state that the ACNU
(Comment 64) A few comments oppose the placement of the proposed statement of instructions for the ACNU specified in proposed 21 CFR 201.130(a)(1) in the DFL under the “Directions” heading because the placement of the statement should distinguish between an ACNU that is necessary for appropriate self-selection, appropriate actual use, or both. For example, one comment recommends that the labeling statement should appear under the “Use” heading in the DFL to alert consumers that they will need to fulfill an ACNU for the listed use(s) rather than under the “Directions” heading because information under the “Directions” heading is more closely associated with how consumers should take a product after the consumer determines whether the nonprescription drug product with an ACNU is appropriate for the consumer to use.
(Response 64) We agree with the concerns about the standardized placement of the statement in the DFL under the heading “Directions.” Therefore, FDA is revising the rule to require the labeling statement to either appear under the “Use” or “Uses” heading or the “Directions” heading, depending on the purpose of the ACNU, to better inform consumers of the reason that the ACNU needs to be fulfilled. Therefore, we are revising the requirement at 21 CFR 201.130(a)(2) in this final rule to require that if the purpose of the ACNU is to ensure appropriate self-selection, the labeling statement must appear under the “Use” or “Uses” heading as the first statement, followed by the other information required in 21 CFR 201.66(c)(4) (21 CFR 201.130(a)(2)(i) in this final rule); if the purpose of the ACNU is to ensure appropriate actual use, the labeling statement must appear under the “Directions” heading as the first direction, followed by the other information required in 21 CFR 201.66(c)(6) (21 CFR 201.130(a)(2)(ii) in this final rule); or if the ACNU is for both self-selection and actual use, the statement must appear under the “Use” or “Uses” heading as the first statement, followed by the other information required in 21 CFR 201.66(c)(4) and may also appear under the “Directions” heading as the first direction, followed by the other information required in 21 CFR 201.66(c)(6) (21 CFR 201.130(a)(2)(iii) in this final rule).
(Comment 65) Several comments support the use of standardized statements in proposed 21 CFR 201.130(a)(1) and (2) to communicate the presence of an ACNU clearly and prominently for a nonprescription drug product to consumers, especially because fulfillment of an ACNU will be a completely new behavior for consumers. However, many comments oppose the standardized wording of the proposed labeling statement specified in proposed 21 CFR 201.130(a)(1) and (2) for being unnecessarily specific and restrictive. Many comments suggest the proposed labeling statements are too lengthy, not consumer-friendly and should be significantly streamlined. Many comments recommend that FDA's proposed language should be an example or template to help guide applicants during their development programs to allow for flexibility to convey specific information about a particular ACNU. A few comments state that the proposed wording for the required labeling statement in proposed 21 CFR 201.130(a)(2) is only appropriate for an ACNU necessary to ensure appropriate self-selection, but not an ACNU necessary to ensure appropriate actual use. We received one comment providing results of a small qualitative research study assessing consumer understanding of the proposed labeling statement specified in proposed 21 CFR 201.130(a)(2); the study suggested poor understanding of the statement's intended purpose. A few comments suggest FDA consider requiring a validated symbol or simple, universal flag in lieu of the proposed ACNU Statement. Several comments recommend that the content of the proposed required labeling statement be determined on a product-by-product basis. For example, a comment recommends that a stronger labeling statement be used on nonprescription drug products with ACNUs that have the potential for more adverse events.
(Response 65) FDA believes that consistency in the content of the required labeling is important to alert consumers and decrease confusion (see discussion above). However, we recognize that in certain situations, revisions to the required labeling may be appropriate for a drug product to convey specific information for a particular nonprescription drug product with an ACNU. Therefore, we are revising the requirements at 21 CFR 201.130(a)(1)(ii) and (b)(1)(ii) in this final rule to permit FDA to approve an NDA applicant's revisions to the required labeling when the revisions are appropriate for a specific drug product and the applicant supports the revisions with adequate data or other information that demonstrate sufficient consumer understanding of the revised statement. For example, the NDA applicant would submit adequate data from robust label comprehension studies that demonstrate consumers understand the revised labeling statement(s). Additionally, while we reviewed the qualitative research study that was submitted, the study was small and did not provide usable data with which to assess or revise the required labeling.
(Comment 66) One comment supports the proposed exemption from adequate directions for use for nonprescription drug products with an ACNU provided the following information is adequately described and provided to consumers at the point of purchase: (1) name and description of the drug product, (2) dosage form, dosage, route of administration, and duration of drug therapy, (3) special directions and precautions for preparation, administration, and use by the consumer, (4) common severe side effects or adverse effects or interactions and therapeutic contraindications that may be encountered, (5) techniques for self-monitoring of drug therapy, (6) proper storage, and (7) action to be taken in the event of an erroneous dose (
(Response 66) Existing statutory and regulatory requirements ensure that the information discussed in the comment would be included on the labeling of the nonprescription drug product with an ACNU, if relevant for the drug product. Consistent with section 502(c) of the FD&C Act, approved labeling for a nonprescription drug product with an ACNU would need to be available to consumers under the customary conditions of purchase and use of the product. Nonprescription drug products, including nonprescription drug products with ACNUs, must comply with applicable labeling requirements under part 201, including the format and content requirements for the DFL (see 21 CFR 201.66).
(Comment 67) A few comments discuss the need for exemption from the labeling requirements in part 201. One comment recommends that FDA amend proposed 21 CFR 201.130(a)(3) by adding the following sentence at the end of the paragraph: “This requirement would not apply when an exemption has been granted or approved.” One comment states that because nonprescription drug products may be sold in convenience or small pack sizes, there may be limited space for the required statement provided at
(Response 67) We disagree with revising the rule to provide a waiver or an exemption for nonprescription drug products with an ACNU from the applicable labeling requirements in part 201. The required labeling in 21 CFR 201.130(a)(1) and (b)(1) of this final rule are important for consumers to appropriately self-select or appropriately use the nonprescription drug product with an ACNU because it informs consumers where the additional condition would be found and explains the additional condition that the consumer must fulfill. The statement about the ACNU also alerts consumers that the drug product is not suitable for all individuals and should only be used after fulfilling the ACNU. Further, a nonprescription drug product with an ACNU must comply with all applicable labeling requirements for nonprescription drug products, including the DFL requirements under 21 CFR 201.66.
We proposed an exemption for a nonprescription drug product with an ACNU from the requirement for adequate directions for use in section 502(f)(1) of the FD&C Act, if the product contains the labeling specified in proposed 21 CFR 201.130(a) and the ACNU is implemented by the applicant as approved by FDA in the application (see proposed 21 CFR 201.67(e)). In the following paragraphs, we discuss a comment on this proposal. After consideration of the public comment received, as discussed below, we are finalizing our proposal with modifications for consistency with revisions made elsewhere to the rule. We are revising 21 CFR 201.67(e)(1) from “It is made available without the labeling” to “It does not comply with the labeling requirements” for clarity. We are revising the citation in 21 CFR 201.67(e)(1) from “§ 201.130(a)” to “paragraphs (c) and (d) of this section and § 201.130(a) through (c)” for clarity and completeness. We are also making revisions to 21 CFR 201.67(e)(2) for clarity and consistency with revisions to 21 CFR 201.130(d) and 314.81(b)(3)(v) in this final rule by revising “as approved by FDA in the application” to state that the ACNU is not implemented by the applicant in accordance with the following, as approved by FDA in the application: (1) the key elements of the ACNU under 21 CFR 314.56(c)(1)(iv) for NDAs or 21 CFR 314.56(c)(2)(ii) for ANDAs or (2) the operationalization of the ACNU under 21 CFR 314.56(c)(1)(vii) for NDAs or 21 CFR 314.56(c)(2)(iii) for ANDAs.
(Comment 68) We received one comment seeking clarity on what it means when an ACNU is not implemented by the applicant as approved by FDA in the application. The comment questions whether implementation of the ACNU means to make the ACNU available, or whether implementation includes the steps the pharmacy/seller must take to ensure the ACNU was fulfilled.
(Response 68) We understand the commenter's need for clarity and are revising the misbranding provision accordingly. Specifically, we are revising 21 CFR 201.67(e)(2) in this final rule, consistent with the revisions in 21 CFR 201.130(d) in this final rule, to state that a nonprescription drug product with an ACNU is misbranded when the ACNU is not implemented by the applicant in accordance with: (1) the key elements of the ACNU under 21 CFR 314.56(c)(1)(iv) or (c)(2)(ii) or (2) the operationalization of the ACNU under in 21 CFR 314.56(c)(1)(vii) or (c)(2)(iii), as approved by FDA in the application.
We received other relevant comments on the proposed rule, but not specific to a requirement. In the following paragraphs, we discuss and respond to these comments. After considering these comments, we are not making any changes as a result of these comments.
(Comment 69) We received several comments requesting that FDA advise applicants on where the specific NDA and ANDA requirements for a nonprescription drug product with an ACNU should be included in the existing structure of an application (
(Response 69) Consistent with applications for nonprescription drug products, an application for a nonprescription drug product with an ACNU must be submitted electronically (see section 745A(a) of the FD&C Act) in electronic common technical document (eCTD) format. eCTD is the standard format for submitting applications, amendments, supplements, and certain reports to FDA's Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research. Generally, the eCTD format consists of five modules. FDA issues guidances related to eCTD, which are applicable to nonprescription drug products with ACNUs (Ref. 9). We may provide guidance specific for applications for nonprescription drug products with ACNUs in the future as appropriate. Additionally, an applicant can request to meet with FDA staff to discuss questions that arise during the development of a nonprescription drug product with an ACNU, including in which module(s) specific information should be placed.
(Comment 70) We received a comment that requests FDA require applicants to protect any consumer data that may have been collected via an ACNU.
(Response 70) It is unclear what kinds of data are the focus of the comment. Although FDA does not provide guidance on how to comply with any legal obligations stemming from a source outside of the statutes and regulations that FDA administers, FDA generally expects that applicants will comply with applicable statutory and regulatory requirements related to protecting consumer information, including health information and consumer data (
(Comment 71) We received a few comments stating that the proposed rule lacks clarity on the criteria that FDA will use to determine when a nonprescription drug product with an ACNU is a combination product because of the inclusion of a component that is deemed to be a medical device. The comments request that FDA issue a companion guidance to explain the criteria that will be used to determine whether a nonprescription drug product with an ACNU is a combination product. The comments also request that FDA confirm that when a nonprescription drug product with an ACNU is considered a combination product, CDER will continue to be the lead review center if the primary mode of action is attributed to the drug component, which aligns with current practices.
(Response 71) In some cases, a nonprescription drug product with an ACNU may be comprised of a drug constituent part and a device constituent part (see § 3.2(e)) and, therefore, be subject to regulatory requirements applicable to combination
(Comment 72) FDA received a comment that the proposed rule does not discuss whether an NDA for a nonprescription drug product with an ACNU would be eligible for 3-year, new clinical investigation exclusivity, or whether an ANDA for a nonprescription drug product with an ACNU and containing a paragraph IV certification could give rise to 180-day exclusivity even if the RLD was originally approved as a prescription drug product. The comment requests that FDA address these issues in the final rule.
(Response 72) FDA declines to address these exclusivity comments in the final rule, as this rulemaking does not propose any changes or considerations regarding exclusivity. An NDA or ANDA holder, including an NDA or ANDA holder for a nonprescription drug product with an ACNU, is eligible for exclusivity if applicable statutory requirements are met (see,
(Comment 73) We received a comment stating that the proposed rule does not mention whether FDA or the Federal Trade Commission (FTC) will oversee the advertisement of nonprescription drug products with ACNUs.
(Response 73) Consistent with the memorandum of understanding between FTC and FDA, FTC has primary responsibility with respect to the regulation of the truth or falsity of all advertising of nonprescription drug products, which would include nonprescription drug products with ACNUs (Ref. 11). FDA has primary responsibility with respect to regulating the labeling of nonprescription drug products.
(Comment 74) We received a comment that strongly encourages FDA to implement educational campaigns geared toward consumers, retailers, and healthcare professionals to explain the differences between prescription drug products, nonprescription drug products, and nonprescription drug products with ACNUs. The comment further states that members of the Nonprescription Drugs Advisory Committee will also need training about how they should evaluate applications that propose an ACNU.
(Response 74) We will provide robust communication to inform the public about the final rule. We will have specific communications tailored to interested parties, including consumers, retailer, and healthcare providers. We will also have specific communication and educational information for members of FDA advisory committees, should an advisory committee be necessary for a specific application for a nonprescription drug product with an ACNU. FDA will especially focus communication and education for consumers both about the final rule and in the future should FDA approve a nonprescription drug product with an ACNU.
(Comment 75) We received a comment requesting that FDA create a public registry of all approved nonprescription drug products with ACNUs, including all data and information about the ACNU and the purpose of the ACNU.
(Response 75) FDA agrees with including approved nonprescription drug products with an ACNU, including relevant information about the approval, in a database. FDA has an existing public database of approved drug products entitled “Drugs@FDA” available at
(Comment 76) We received a comment requesting that FDA either clarify how it will enforce the requirement that a nonprescription drug product with an ACNU not be made available to consumers unless the ACNU is fulfilled, or require the applicant to submit procedures to ensure that requirement is met.
(Response 76) The burden is on the applicant to implement the ACNU as approved by FDA in the application and to ensure that the drug product is not made available to consumers unless the ACNU is fulfilled. A nonprescription drug product with an ACNU that is made available to a consumer without the ACNU being fulfilled by the consumer would be misbranded (21 CFR 201.67(e) in this final rule). It is a prohibited act under section 301(a) of the FD&C Act to introduce or deliver for introduction into interstate commerce any drug that is misbranded (21 U.S.C. 331(a)). It is also a prohibited act under section 301(k) of the FD&C to do any act with respect to a drug if such act is done while such drug is held for sale after shipment in interstate commerce and results in the drug being misbranded. Additionally, a nonprescription drug product with an ACNU would be an unapproved new drug product if it is made available to consumers without an ACNU. With certain limited exceptions not relevant here, it is a violation of sections 301(d) and 505(a) of the FD&C Act to introduce or deliver into interstate commerce an unapproved new drug (87 FR 38313 at 38325). FDA may pursue enforcement action against applicants who violate the FD&C Act.
(Comment 77) We received a few comments requesting further clarification of certain topics (
(Response 77) We encourage applicants to read existing applicable FDA guidance documents by searching for relevant topics on our website available at
(Comment 78) We received a comment encouraging FDA to explain how it intends to address any application proposing an ACNU for a nonprescription drug product that was submitted for approval before the proposed rule is finalized.
(Response 78) Once the rule is in effect, FDA may approve applications for nonprescription drug products that meet the relevant standard, regardless of whether such applications were submitted before or after the rule was in effect.
This rule is effective January 27, 2025.
We have examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, Executive Order 14094, the Regulatory Flexibility Act (5 U.S.C. 601-612), the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801, Pub. L. 104-121), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
Executive Orders 12866, 13563, and 14094 direct us to assess all benefits, costs, and transfers of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Rules are “significant” under Executive Order 12866, section 3(f)(1) (as amended by Executive Order 14094) if they “have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of [the Office of Information and Regulatory Affairs (OIRA)] for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities.” OIRA has determined that this final rule is not a significant regulatory action under Executive Order 12866, section 3(f)(1).
Because this rule is not likely to result in an annual effect on the economy of $100 million or more or meets other criteria specified in the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act, OIRA has determined that this rule does not fall within the scope of 5 U.S.C. 804(2).
The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. This rule would establish requirements for a nonprescription drug product with an ACNU. We cannot anticipate the number of applicants that would submit applications or the types of drug products that would be covered under such applications. However, we estimate the costs for any applicant to read and understand the rule would likely range between 0.04 percent and 0.12 percent of the gross receipts of very small applicants. Therefore, we certify that the final rule will not have a significant economic impact on a substantial number of small entities.
The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes estimates of anticipated impacts, before issuing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $183 million, using the most current (2023) Implicit Price Deflator for the Gross Domestic Product. This final rule will not result in an expenditure in any year that meets or exceeds this amount.
The final rule will establish requirements for a nonprescription drug product with an ACNU. Compared to traditional nonprescription drug products, which consumers must be able to self-select and use based on labeling, alone, an approved ACNU, in addition to the labeling, will ensure the appropriate self-selection, the appropriate use, or both of a nonprescription drug product without the supervision of a practitioner licensed by law to administer such drug. We expect this rule will expand consumer access to certain drug products in a nonprescription setting and increase options for applicants to develop and market safe and effective nonprescription drug products.
Table 1 shows our quantified benefits. We estimate a reduction in access costs to consumers who could transfer from a prescription drug product to a nonprescription drug product with an ACNU. Our primary estimate for this item is $33.62 per consumer per purchase with a range of $0 to $67.23. We also quantify the value of the potential reduction in the number of repetitive meetings with applicants that will occur during the approval process. For example, potential applicants have requested additional meetings with us for each development program to discuss this topic; these types of individual meetings are time-consuming and use Agency resources. Multiple potential applicants have been asking the same types of questions, creating repetitiveness and inefficiencies. Because the rule addresses these and other questions, we anticipate that the rule will reduce or eliminate this burden for potential applicants and us. Our primary estimate is $68,773.11 per applicant with a range of $56,332.65 to $81,763.56. We do not monetize our estimates of benefits over a 10-year horizon because of the high uncertainty about the number of applicants, applications, potential approvals, and purchases that might occur; and consumer preferences to switch products. However, we present estimates in the uncertainty section of this analysis.
Although an applicant will incur the costs to develop and apply for a nonprescription drug product with an ACNU, for this analysis, we assume that applicants submit applications only when they believe that the profits from the approval will exceed the costs of the application. We lack information to monetize these potential profits and costs over a 10-year horizon.
Monetized costs include a one-time cost of reading and understanding the rule for those potentially interested in pursuing this path for their drug products. We do not monetize these estimates for more than one interested party because of the high uncertainty about the number of interested parties over this time horizon. The primary estimate equals $1,156.74 with a range of $533.88 to $1,779.60.
Government-sponsored and commercial insurance payers may experience cost savings because the availability of nonprescription drug products with an ACNU may decrease insurance claims and, potentially, future medical costs. For example, access to drug products under this new paradigm will allow consumers to treat medical conditions using nonprescription drug products with ACNUs without the supervision of a practitioner licensed by law to administer such drug. We do not estimate such cost savings due to lack of data.
We have developed a Final Economic Analysis of Impacts that assesses the impacts of the final rule. The full analysis of economic impacts is available in the docket for this final rule (Ref. 13) and at
We have determined under 21 CFR 25.30(h) and (k) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The title, description, and respondent description of the information collection provisions are shown in the following paragraphs with an estimate of the annual reporting and recordkeeping burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.
In the proposed rule, we sought comments on this analysis. We did not receive any comments that were specific to our numeric hour burden estimates. However, we received numerous comments on the provisions of the proposed rule having to do with proposed requirements for applications, postmarketing reports, and labeling. This final rule contains comment summaries and responses for these comments in section V. E and F, and I through M. Additionally, we received comments that the preliminary regulatory impact analysis does not adequately account for the costs of quality assurance systems or implementing the reporting requirements. We understand concerns about the potential costs of establishing and maintaining quality assurance systems. However, due to the uncertainty about the nature of ACNU failures that could occur, the likelihood, the number, and the cost, any estimate would be characterized by a substantial degree of uncertainty.
FDA estimates the burden of existing information collection 0910-0001 will be increased by the information collections in this rule this information collection as follows:
Based on our experience with information collection associated with current NDA and ANDA submissions, we estimate six applications for a nonprescription drug product with an ACNU will be submitted annually. Based on Broad Agency Announcement proposals that set forth the number of hours anticipated to produce study reports for submission to us, we assume it will take an average of 320 hours per application for both NDA and ANDA applicants to prepare and submit the information required for applications for nonprescription drug products with an ACNU (in addition to meeting the general NDA or ANDA requirements under §§ 314.50 and 314.94, already approved in OMB Control Number 0910-0001). The 320 hours would include scientific studies and experimentation such as developing new technology to aid consumers in self-selection, advancing statistical methods for analyzing complex data, developing innovative clinical trial designs, or research on new drug delivery systems for both NDA and ANDA applications.
We estimate six respondents will submit 25 reports each to FDA for an individual ACNU failure under § 314.81(b)(3)(v). We assume an average of 40 hours per response for each applicant, for a total of 6,000 hours annually.
Based on our experience with postmarket recordkeeping requirements, we assume an average burden of 8 hours of recordkeeping for each report and therefore have calculated 1,200 hours annually.
FDA estimates the burden of existing information collection 0910-0340 will be increased by the information collections in this rule, as follows:
Based on our experience with NDA and ANDA submissions, we estimate six respondents will each submit an application for a nonprescription drug product with an ACNU, each becoming subject to all nonprescription labeling regulations in 21 CFR part 201, subpart C, including the requirements for statements of identity and net contents (§§ 201.61 and 201.62) which appear on the principal display panel (PDP) (defined by § 201.60), and the Drug Facts labeling (DFL) requirements of § 201.66, as part of which the respondents must also include (where applicable) labeling to satisfy sodium, calcium, magnesium, and potassium labeling requirements (§§ 201.64, 201.70, 201.71, and 201.72), and the statements required by § 201.130(a)(1) and (2). These products may also have additional labeling beyond the DFL requirements (§ 201.67(c)(2)).
Estimating six respondents will expend 1 hour annually to comply with PDP and DFL labeling requirements under § 201.67(c)(1), and assuming each disclosure will require 15 hours, we calculate a total of 90 hours annually. Additionally, we estimate six respondents will each submit one application for a nonprescription drug product with an ACNU that contains additional labeling requirements, for a total of six annual responses. Based on our experience with nonprescription labeling requirements, we assume an average burden per response of 9 hours, for a total of 54 hours annually.
The information collection provisions in this final rule have been submitted to OMB for review as required by section 3507(d) of the Paperwork Reduction Act of 1995.
Before the effective date of this final rule, FDA will publish a notice in the
We have analyzed this final rule in accordance with the principles set forth in Executive Order 13132. We have determined that the rule does not contain policies that 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. Accordingly, we conclude that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.
We have analyzed this rule in accordance with the principles set forth in Executive Order 13175. We have determined that the rule does not contain policies that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. Accordingly, we conclude that the rule does not contain policies that have Tribal implications as defined in the Executive order and, consequently, a Tribal summary impact statement is not required.
The following references are on display at the Dockets Management Staff (see
1. FDA, Guidance for Industry, “Label Comprehension Studies for Nonprescription Drug Products,” August 2010 (available at
2. FDA, Guidance for Industry, “Self-Selection Studies for Nonprescription Drug Products,” April 2013 (available at
3. FDA, Guidance for Industry, “Application of Human Factors Engineering Principles for Combination Products: Questions and Answers,” September 2023 (available at
4. FDA, Guidance for Industry and FDA Staff, “Policy for Device Software Functions and Mobile Medical Applications,” September 2013 (updated September 2019 and September 2022) (available at
5. FDA, Medwatch: The FDA Safety Information and Adverse Event Reporting Program, (available at
6. FDA, Consumer Complaint Coordinators, web page, (available at
7. National Patient Safety Agency, “Information Design for Patient Safety: A Guide to the Graphic Design of Medication Packaging,” 2nd edition, 2007 (available at
8. United States Pharmacopeia, Recommendations to the Safe Medication Use Expert Committee by the Health Literacy and Prescription Container Labeling Advisory Panel, May and November 2009, posted April 2010 (available at
9. FDA, eCTD Resources, web page (available at
10. FDA, Combination Products, web page (available at
11. Memorandum of Understanding Between the Federal Trade Commission and the Food and Drug Administration Concerning the Exchange of Information (FDA-225-71-8003), April 1971 (available at
12. FDA, Prescription to Over-the-Counter (OTC) Switch List, web page (available at
13. FDA, Final Regulatory Impact Analysis; Final Regulatory Flexibility Analysis; Unfunded Mandates Reform Act Analysis, Nonprescription Drug Product With an Additional Condition for Nonprescription Use; Final Rule (available at
Drugs, Labeling, Reporting and recordkeeping requirements.
Administrative practice and procedure, Confidential business information, Drugs, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act, and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 201 and 314 are amended as follows:
21 U.S.C. 321, 331, 343, 351, 352, 353, 355, 358, 360, 360b, 360ccc, 360ccc-1, 360ee, 360gg-360ss, 371, 374, 379e; 42 U.S.C. 216, 241, 262, 264.
(a)
(b)
(1)
(2) [Reserved]
(c)
(2) A nonprescription drug product with an ACNU may also be approved with additional labeling that supplements the format and content requirements for nonprescription drug product labeling under § 201.66.
(d)
(1) The statement about the ACNU must appear on the principal display panel (see § 201.60) and the immediate container surface that the consumer is most likely to view when seeking information about the drug product. If the immediate container is a bottle, the statement about the ACNU must appear on the surface that the consumer is most likely to consider the front of the bottle. If the immediate container is a blister card (including a card that contains more than one blister unit), the statement about the ACNU must appear on the blister card surface that the consumer would most likely view when removing the drug product from the blister card. If the blister card contains more than one blister unit (
(2) The statement about the ACNU must appear in boldface and black type.
(3) The statement about the ACNU must appear in a yellow background banner. No other information or statements may be included within the yellow background banner.
(4) The statement about the ACNU must be in one of the following font sizes, whichever is greater:
(i) At least 25 percent as large as the font size of the largest printed words on the principal display panel and immediate container; or
(ii) At least 12-point font (1 point = 0.0138 inches).
(5) An applicant may request an exception to the minimum font size requirement specified in paragraph (d)(4) of this section for containers where its size would render compliance with this requirement impractical. FDA may allow such an exception upon request by an applicant if FDA determines an exception is warranted.
(e)
(1) It does not comply with the labeling requirements specified in paragraphs (c) and (d) of this section and § 201.130(a) through (c); or
(2) The ACNU is not implemented by the applicant in accordance with the following, as approved by FDA in the application:
(i) The key elements of the ACNU under § 314.56(c)(1)(iv) of this chapter for NDAs or § 314.56(c)(2)(ii) of this chapter for ANDAs; or
(ii) The operationalization of the ACNU under § 314.56(c)(1)(vii) of this chapter for NDAs or § 314.56(c)(2)(iii) of this chapter for ANDAs.
A nonprescription drug product approved under section 505(c) or 505(j) of the Federal Food, Drug, and Cosmetic Act with an ACNU as defined in § 201.67(b)(1) is exempt from section 502(f)(1) only if all the following conditions are met:
(a) The label of the drug must include instructions for the ACNU as follows:
(1) Content of instructions for the ACNU must either be:
(i) ACNU Instructions, which read as follows: “To check if this drug is safe for you, go to [insert where or how consumers can find information about the ACNU; for example, applicant's website, applicant's phone number, or specific retail location] and [insert action to be taken by consumer]. Do not take this drug without completing this step”; or
(ii) Alternative ACNU Instructions: FDA may approve an NDA applicant's revisions to the ACNU Instructions when the revisions are appropriate for a specific drug product and the applicant supports the revisions with adequate data or other information that
(2) The locations of instructions for the ACNU are as follows:
(i) If the purpose of the ACNU is for self-selection, the instructions for the ACNU must appear under the “Use” or “Uses” heading required in § 201.66(c)(4) as the first statement, followed by the other information required in § 201.66(c)(4);
(ii) If the purpose of the ACNU is for actual use, the instructions for the ACNU must appear under the “Directions” heading required in § 201.66(c)(6) as the first direction, followed by the other information required in § 201.66(c)(6); or
(iii) If the purpose of the ACNU is for both self-selection and actual use, the instructions for the ACNU must appear under the “Use” or “Uses” heading as the first statement, followed by the other information required in § 201.66(c)(4) and may also appear under the “Directions” heading as the first direction, followed by the other information required in § 201.66(c)(6).
(b) The label of the drug must include a statement about the ACNU as follows:
(1) The content of the statement about the ACNU must either be:
(i) The ACNU Statement, which reads as follows: “You must complete an extra step to see if this drug is safe for you before you use it. Do not take this drug without completing this step. See the Drug Facts Labeling for more information”; or
(ii) An Alternative ACNU Statement: FDA may approve an NDA applicant's revisions to the ACNU Statement when the revisions are appropriate for a specific drug product and the applicant supports the revisions with adequate data or other information that demonstrate sufficient consumer understanding of the revised statement.
(2) The statement about the ACNU must be in the form and manner required by § 201.67(c).
(c) The labeling of the drug must comply with other applicable labeling requirements for nonprescription drug products under this part, including the format and content requirements for nonprescription drug product labeling under § 201.66.
(d) The ACNU must be implemented by the applicant in accordance with the following, as approved by FDA in the application:
(1) The key elements of the ACNU under § 314.56(c)(1)(iv) of this chapter for NDAs or § 314.56(c)(2)(ii) of this chapter for ANDAs; and
(2) The operationalization of the ACNU under § 314.56(c)(1)(vii) of this chapter for NDAs or § 314.56(c)(2)(iii) of this chapter for ANDAs.
21 U.S.C. 321, 331, 351, 352, 353, 355, 355a, 355f, 356, 356a, 356b, 356c, 356e, 360cc, 371, 374, 379e, 379k-1.
(a)
(1)
(2) [Reserved]
(b)
(c)
(1)
(i) A statement regarding whether the purpose of the ACNU is to ensure appropriate self-selection or appropriate actual use, or both, by consumers of the nonprescription drug product with an ACNU without the supervision of a practitioner licensed by law to administer such drug;
(ii) A statement regarding the necessity of the ACNU;
(iii) A description of how the ACNU ensures appropriate self-selection or appropriate actual use, or both;
(iv) A description of the key elements of the ACNU, including:
(A) The additional condition implemented by the applicant to be fulfilled by the consumer to obtain the nonprescription drug product with an ACNU;
(B) The labeling specifically associated with the ACNU; and
(C) The criteria by which the consumer would successfully fulfill the ACNU, including a description of the specific actions to be taken by a consumer or required responses to be provided by a consumer;
(v) Adequate data or other information that demonstrates the necessity of the ACNU to ensure appropriate self-selection or appropriate actual use, or both;
(vi) Adequate data or other information that demonstrates the effect of the ACNU on the appropriate self-selection or appropriate actual use, or both; and
(vii) A description of the specific way(s) the ACNU is operationalized.
(2)
(i) A statement regarding whether the purpose of the ACNU is to ensure appropriate self-selection or appropriate actual use, or both, by consumers of the nonprescription drug product with an ACNU without the supervision of a practitioner licensed by law to administer such drug, which must be the same as the purpose of the ACNU for its reference listed drug (RLD);
(ii) Information demonstrating that the key elements of the ACNU are the same as the key elements of the ACNU for its RLD; and
(iii) A description of the specific way(s) the ACNU is operationalized. If an applicant believes the ACNU is operationalized in the same way as the RLD, include information demonstrating that the ACNU is operationalized in the same way as the RLD. If a different way to operationalize the proposed ACNU is used, include information to show that this different way to operationalize the proposed ACNU achieves the same purpose as the ACNU for its RLD and that the differences from the RLD are otherwise acceptable in an ANDA.
(d)
(b) * * *
(3) * * *
(v)
(
(
(B)
(C)
(D)
(
(
(
(
(
(
(
(
(
(
(
(
(E)
(
(F)
(
(G)
(b) * * *
(20) For an NDA for a nonprescription drug product with an additional condition for nonprescription use under § 314.56, if FDA has determined the application failed to meet the requirements in § 314.56 applicable to NDAs.
(a) * * *
(15) For an ANDA for a nonprescription drug product with an additional condition for nonprescription use under § 314.56, if FDA has determined the application failed to meet the requirements in § 314.56 applicable to ANDAs.