This document amends regulations at 7 CFR part 51 issued under the Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627), as amended.

The USDA is issuing this rule in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means. This final rule falls within a category of regulatory actions that the Office of Management and Budget (OMB) has exempted from review under Executive Order 12866.

This rule has been reviewed under Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” which requires agencies to consider whether their rulemaking actions would have Tribal implications.

AMS has determined that this rule is unlikely to 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.

This rule has been reviewed under Executive Order 12988, “Civil Justice Reform.” This action is not intended to have retroactive effect. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this rule.

On June 20, 2024, a proposed rulemaking was published in the Federal Register (89 FR 51850) providing a 60-day comment period for interested parties to comment on proposed changes to Section 8e import inspection charges and revisions to the fee structure of the Specialty Crop Inspection Division (Division). One comment in support of the proposal was received. Prior to developing proposed revisions to the Section 8e fee structure, AMS engaged in discussions with State partners including Association of Fruit and Vegetable Inspection and Standardization Agencies (AFVISA) members and the Texas Cooperative Inspection Program (TCIP), as well as industry stakeholders. The outcome of those discussions was a positive perception of the fee changes as proposed. AMS is adopting the proposed rulemaking with no changes. Through this final rule, AMS will charge for certain Section 8e import inspections on a per-pound basis and implement additional revisions to the fee structure of the Division.

Currently, fees for all terminal market inspections, including Section 8e import inspections, are charged on a carlot basis (7 CFR 51.37). The current single carlot fee structure charges per conveyance and does not account for sampling and inspection time required for today's larger conveyances transporting larger volumes. Under this final rule, the fees for Section 8e import inspections for lots qualifying as a full carlot (or a whole lot) or for lots less than a full carlot will no longer be calculated on a per-carlot basis. Instead, those fees will be calculated on a per-pound rate basis. The per-pound fee structure will better ensure full recovery of inspection cost by AMS while mitigating the financial impact on applicants of additional sublot fees.

The per-pound rate will be calculated by dividing the current inspection fee for a full carlot by the average weight by pound of a full carlot (40,000 pounds) (for example: the current inspection fee for a full carlot ($254) divided by 40,000 will result in a per-pound rate of $0.00635). The Division will use 40,000 lbs. as the appropriate measurement for calculating the per-pound rate. AMS notes that 40,000 pounds is generally recognized as the standard weight of the measurement used in USDA-AMS inspection practices when identifying a full carlot.

Additionally, AMS will have two separate sublot (or additional lot of the same product) fees: one for Section 8e sublots and one for non-Section 8e sublots. For example, under this rule, the fee for a Section 8e sublot is reduced by 50 percent, from the current $116 per sublot fee (the FY 2025 rate) to $58 per sublot. All non-8e inspection fees remain unchanged by this rule. The per-pound rate for a full carlot or for lots less than a full carlot, and the 8e sublot fee, are subject to the annual updated Specialty Crops Program's inspections fee schedule.

Under this rule, for all Section 8e import inspections, AMS will apply the current lot separation and sampling rates at 7 CFR 51.2(d)(1) through (3). To calculate inspection fees for a full carlot, AMS will multiply the current per-pound rate, using the calculation as noted above, by the total weight of the full carlot, plus any applicable sublot fees. To calculate the inspection fee for lots less than a carlot, AMS will multiply the current per-pound rate, using the per-pound rate calculation as noted above, by the total weight of the lot, with a minimum charge equivalent to 2-hours computed at the current established hourly rate, whichever is greater, plus any sublot fee(s) as applicable. As shown in Table 1, applicants importing typical 40,000-pound loads comprising one lot will see no change in inspection fees under this new rule. Table 2 shows that larger size loads, which typically require increased sampling and inspection, will see a proportional increase in fees under this new rule. However, loads currently subject to additional sublot fees will see a significant decrease in fees per sublot under this new rule. The fee calculation changes under this final rule more accurately assess fees on inspected volume, better aligning the Division's ability to ensure cost recovery while significantly reducing additional sublot fees charged to applicants. The following comparison of the Section 8e fee structure is based on FY 2025 fees. Any increase or decrease to Section 8e fees will be included in the annual fee structure package in subsequent years.

Columns 1 and 2 of Table 1 compare the currently scheduled FY 2025 fee structure to the new fee structure for a standard 40,000-pound lot. As shown in row 1, column 1, the currently scheduled FY 2025 fee structure for one lot is $254. Row 1, column 2 shows that under the new fee structure, the fee for one lot will remain at $254 but will be expressed at the per pound rate of $0.00635 (multiplied by 40,000 pounds).

Column 1 (rows 2 through 5) shows that without the new fee structure, the inspection fee for each additional 40,000-pound increases by $116. Column 2 shows that with the new fee, the incremental cost per additional lot will be cut in half to $58. Column 3 shows the cost savings for additional lots.

Table 2 shows the new fee structure for alternative lot sizes under this final rule. Row 2 shows again that the 40,000-pound lot fee will remain $254. Row 3 shows that for a 50,000-pound lot, the $317.50 inspection fee will be determined by multiplying the proposed per-pound rate ($0.00635) by 50,000 pounds. Row 1 shows that for any lot weighing less than 40,000 pounds, the applicable fee will be a 2-hour minimum charge at the currently established FY 2025 hourly inspection rate of $123 ($123 multiplied by 2 equals $246). Any increase or decrease to the hourly inspection rates will be included in the annual fee structure package in subsequent years.

Pursuant to the requirement set forth in the Regulatory Flexibility Act (RFA), AMS has considered the economic impact of this action on small entities. Accordingly, AMS provides this final regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened.

The action described herein is being taken for several reasons, including that additional user fee revenues are needed to cover the costs of (1) providing current program operations and services; (2) improving the timeliness in which inspection services are provided; and (3) improving the work environment. AMS regularly reviews its user-fee financed programs to determine if the fees are adequate.

This rule revises the regulations governing the inspection and certification for fresh fruits, vegetables, and other products by increasing certain fees charged for Section 8e import inspections on a per-pound basis. These revisions recover, as nearly as practicable, the costs of performing inspection services on imported commodities in accordance with the Agricultural Marketing Agreement Act of 1937.

Since the inspection fees to be charged under this final rule's new rate structure are proportional to size of lots, smaller businesses (importers) are not unduly or disproportionately burdened. This new fee structure, for imports subject to Section 8e grading requirements, balances cost increases (for lots larger than 40,000 pounds) with cost decreases for additional sublots. The fee for a standard 40,000-pound lot remains unchanged.

Tables 3 and 4 show the impact on the nine Section 8e commodities affected by this rule, using data from USDA's Compliance Enforcement Management System (CEMS) database, which lists the weight of each lot inspected over the three-year period FY 2021 through FY 2023. Table 3 puts the number of inspections into two categories: column 1 shows the number of lots that weighed 40,000 pounds or less, and column 2 shows the number of lots that weighed more than 40,000 pounds. Column 3 presents the sum of columns 1 and 2. The last row of column 3 shows that the total number of inspections for the three-year period was 611,475.

Table 4 shows that for all nine commodities combined, 77 percent of the inspections would have had equal or lower fees if charged with the new fee structure. Twenty-three percent of the lots would have been subject to higher fees. Looking at individual years (not shown), the percentage of inspections representing lots weighing 40,000 pounds or less for FY 2021, FY 2022 and FY 2023 was 73, 75, and 80 percent, respectively. Therefore, for a large majority of annual inspections, the cost per individual inspection would have been the same or lower than with the previous fee system in place.

The impacts of the revised fee structure vary significantly by commodity. Table 4 shows that for six of the nine commodities, at least two thirds of the lots inspected would have had equal or lower fees ( i.e., lots weighing 40,000 pounds or less—avocadoes, grapes, tomatoes, grapefruit, filberts, potatoes) under the revised fee structure. One commodity, onions, would have had the opposite result, with 25 percent of lots seeing lower fees, and 75 percent higher. This variation would be offset by the onion industry's prevalence of additional sublots in inspections. See Table 1, “SCI Sec. 8e Inspection Fees for Standard 40,000 Pound Lot: Comparison of FY 2025 Fee to New Fee Structure, Showing Reduced Cost for Additional Lots.” For oranges and kiwifruit, the results were about even; slightly more than 50 percent of the lots weighed equal to or less than 40,000 pounds and, therefore, would have been subject to lower fees.

This analysis assumes that each lot is sampled and inspected independently. This may overstate the extent of higher fees because under the new fee structure the cost declines for each additional sublot, as shown in Table 1. To the extent that the lots for which fees were charged in the CEMS database are actually sublots associated with an inspected lot from a particular importer, the value in Table 4, column (2) ( i.e., for lots more than 40,000 pounds) overstates the percentage of lots that would have been subject to a higher fee.

It is also important to note that certain commodities represented larger proportions of the lots inspected, as shown in columns (4) and (5) of Table 3. Just over 75 percent of the inspected lots were for avocadoes. Adding the next four commodities in terms of the magnitude of total inspections (onions, grapes, oranges, and kiwifruit) raises the cumulative percentage up to nearly 99 percent. Four commodities (tomatoes, grapefruit, filbert, and potatoes) represented about 1.3 percent of the total number of lots inspected.

This analysis shows that the fee impacts vary by commodity, with smaller fees per inspected lot expected for eight of the nine commodities, suggesting that for a large majority of annual inspections the cost per individual inspection would be the same or lower than with the fee system that would otherwise be in place in FY 2025 and future years.

AMS received one comment from the Texas International Produce Association (TIPA) in full support of implementing this rule, noting the changes not only help prevent increased food prices but also reflects a modernization of the fresh produce industry.

USDA has determined that this rule is consistent with and will effectuate the purpose of the Agricultural Marketing Act of 1946. Therefore, AMS is amending certain fees charged for Section 8e import inspections from a per-carlot basis to a per-pound basis, reducing the fee for each additional sublot by 50 percent, and establishing a new fee calculation for lots less than a carlot.

For reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 51 as follows:

In April 2008, the Commission issued staff requirements memorandum (SRM) M080317B, “Briefing on State of NRC Technical Programs,” which directed the staff to “examine the license renewal process for non-power reactors and identify and implement efficiencies to streamline this process while ensuring that adequate protection of public health and safety are maintained.” The need for improvement in the reliability and efficiency of the license renewal process was primarily driven by four issues: (1) historic NRC priorities and emergent issues; (2) limited licensee resources; (3) inconsistent existing license infrastructure; and (4) regulatory requirements and the broad scope of the renewal process.

The major provisions of this final rule include changes that:

• Revise the definitions for Non-power reactor, Testing facility, and Research reactor;

• Eliminate license terms for medical therapy or research and development facilities, other than testing facilities, licensed under paragraphs (a) or (c) of § 50.21 of title 10 of the Code of Federal Regulations (10 CFR);

• Define the license renewal process for all commercial or industrial NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c);

• Require all NPUF licensees to submit an updated FSAR and subsequent FSAR updates to the NRC at intervals not to exceed 5 years;

• Amend the current timely renewal provision under § 2.109, allowing NPUFs subject to license renewal to continue operating under an existing license past its expiration date if the licensee submits a license renewal application at least 2 years (rather than 30 days) before the current license expiration date;

• Provide an accident dose criterion of 1 rem (0.01 Sv) TEDE for NPUFs other than testing facilities;

• Extend the applicability of § 50.59 to NPUF licensees regardless of their decommissioning status;

• Clarify an NPUF applicant's requirements for meeting the existing provisions of § 51.45 for submitting an environmental report; and

• Eliminate the requirement for NPUF licensees to submit financial qualification information with license renewal applications under § 50.33(f)(2).

Concurrent with this final rule, the NRC is issuing Regulatory Guide (RG) 2.7, Revision 0, “Preparation of Updated Final Safety Analysis Reports for Non-Power Production or Utilization Facilities.”

The NRC prepared a regulatory analysis to determine the expected quantitative costs and benefits of this final rule and the final implementing guidance, as well as qualitative factors to be considered in the NRC's rulemaking decision. Based on the analysis, the NRC concluded that this final rule will result in net savings to licensees and the NRC. The analysis examined the benefits and costs of the final rule requirements and the final implementing guidance compared to the baseline for the current license renewal process ( i.e., the no-action alternative). Compared to the no-action baseline, the NRC estimates that total net benefits to NPUFs ( i.e., cost savings minus costs) will be $5.5 million ($3.9 million using a 3-percent discount rate or $2.6 million using a 7-percent discount rate) over a 20-year period. The average NPUF will receive net benefits ranging from approximately $78,000 to $166,000 over a 20-year period. The NRC will receive total net benefits of $12 million ($8.6 million using a 3-percent discount rate or $5.9 million using a 7-percent discount rate) over a 20-year period.

The regulatory analysis also considered, in a qualitative fashion, additional benefits of this final rule and the final implementing guidance associated with regulatory efficiency, protection of public health and safety, promotion of the common defense and security, and protection of the environment.

The regulatory analysis concluded that this final rule and the final implementing guidance are justified because of the cost savings received by both licensees and the NRC while public health and safety are maintained. A detailed discussion of the methodology and complete results is presented in the “Regulatory Analysis” section of this document.

The NRC licenses NPUFs under the authority granted in Sections 103 and 104 of the AEA. Section 103 of the AEA applies to commercial and industrial facilities, and Sections 104a and 104c of the AEA apply to facilities used for medical therapy or research and development activities, respectively. The section of the AEA that provides licensing authority for the NRC corresponds directly to the class of license issued to a facility ( e.g., Section 104a of the AEA authorizes the issuance of a “class 104a” license). Furthermore, Sections 104a and 104c of the AEA require that the Commission impose the minimum amount of regulation needed to promote the common defense and security; protect the health and safety of the public; and permit, under Section 104a, the widest amount of effective medical therapy possible and, under Section 104c, the conduct of widespread and diverse research and development.

The NRC regulates 34 NPUFs, of which 29 are research reactors or testing facilities currently licensed to operate. The NRC has issued construction permits for two of the five remaining NPUFs (SHINE Medical Technologies, Inc. (SHINE) and the Hermes-Kairos Testing facility), 1 and the other three licensees are in the process of decommissioning their facilities ( i.e., removing a facility or site safely from service and reducing residual radioactivity to a level that permits release of the site for unrestricted use or use under restricted conditions). Most NPUFs are located at universities or colleges throughout the United States. The NRC regulates one operating testing facility at the National Institute of Standards and Technology.

The AEA dictates an initial license term of no more than 40 years for class 103 facilities, which the NRC licenses under § 50.22, but the AEA does not specify license terms for class 104a or 104c facilities, which are licensed under § 50.21(a) or (c). The regulation that implements this statutory authority, § 50.51(a), currently specifies that the NRC may grant an initial license for NPUFs for no longer than a 40-year license term. If the NRC initially issues a license for a shorter period, then it may renew the license by amendment for a maximum aggregate period not to exceed 40 years. An NPUF license is usually renewed for a term of 20 years. If the requested renewal would extend the license beyond 40 years from the date of issuance, the original license may not be renewed by amendment. Rather, the NRC must issue a renewed license that supersedes the initial license.

Any application for license renewal must include an FSAR describing: (1) changes to the facility or facility operations resulting from new or amended regulatory requirements, and (2) changes and effects of changes to the facility or procedures and new experiments. The FSAR must include the elements specified in § 50.34. The NRC has guidance for preparing the FSAR in NUREG-1537, Part 1, “Guidelines for Preparing and Reviewing Applications for the Licensing of Non-Power Reactors: Format and Content.” The NRC reviews NPUF initial and renewal license applications using NUREG-1537, Part 2, “Guidelines for Preparing and Reviewing Applications for the Licensing of Non-Power Reactors: Standard Review Plan and Acceptance Criteria.”

As a license term nears its end, a licensee must submit a license renewal application to continue operations. A “timely renewal” provision exists in § 2.109(a) to enable operations to continue beyond the license term during the NRC's review of a license renewal application. If the licensee files an application for a renewal or for a new license for the authorized activity at least 30 days before the expiration of an existing license, the existing license will not be deemed to have expired until the application has been finally determined.

In 2008, the NRC recognized a need to identify and implement efficiencies in the NPUF license renewal process while ensuring that adequate protection of public health and safety is maintained. Four issues primarily drove this effort to improve the reliability and efficiency of the process.

Under the Atomic Energy Commission (AEC), the NRC's predecessor agency, NPUFs were some of the first reactors licensed and the first reactors to undergo license renewal. Most of these reactors were initially licensed in the late 1950s and 1960s for terms that varied from 10 to 40 years. The AEC started renewing these licenses in the 1960s. License renewal was primarily an administrative activity until 1976, when the NRC decided to also conduct a technical review equivalent to the initial licensing of the facility. The licenses that had been issued with initial 20-year terms were due for renewal during this timeframe. As the NRC started developing methods for conducting these technical reviews, an accident occurred at Unit 2 of the Three Mile Island (TMI) nuclear power plant.

The NRC's focus on post-TMI activities resulted in a suspension of NPUF license renewal activities for several years. After license renewal activities were reinitiated, the NRC issued numerous renewals in a short period of time, primarily by relying on generic evaluations. These 20-year renewals expired starting in the late 1990s. The original licenses issued with 40-year terms also started expiring in the late 1990s, creating a new surge of license renewal applications.

As a result of the NRC's response to the events of September 11, 2001, the NRC deferred work on a number of NPUF license renewal applications. In addition, the NRC's NPUF licensing activities focused on implementing § 50.64, “Limitations on the use of highly enriched uranium (HEU) in domestic non-power reactors,” to convert non-power reactors to the use of low-enriched uranium. Therefore, reviews of these license renewal applications extended for many years. In all cases, the timely renewal provision enabled these NPUFs to continue operating during the NRC's review period.

Many NPUF licensees have limited staff resources available for licensing support. The number of NPUF staff can range from one part-time employee for some low-power facilities to four or five full-time employees for higher-power facilities. The NPUF staff that perform the licensing function typically do so in addition to their normal organizational responsibilities, which often results in delays in the license renewal process, particularly in responding to the NRC's requests for additional information.

The NPUFs licensed under § 50.21(a) or (c) are primarily at college and university sites. Staff turnover and limited staffing resources at an NPUF often contribute to a lack of historical knowledge of the development of the licensee's FSAR and changes to the FSAR. During the most recent round of license renewals, the NRC found that some of the submitted FSARs did not adequately reflect the current licensing bases for the respective licensees. Because the only required FSAR submission comes at license renewal, which can be at 20-year or greater intervals, submitted FSARs often contain varying levels of completeness and accuracy. Consequently, the NRC has issued requests for additional information to obtain missing information, seek clarifications and corrections, and document the current licensing basis.

For power reactors, license renewal reviews have a defined scope, primarily focused on aging management, as described in 10 CFR part 54. For NPUFs, there are no explicit requirements on the scope of issues to be addressed during license renewal. Therefore, the scope of review for license renewal was initially treated the same as that for an original license.

In response to Commission direction in SRM-SECY-91-061, “Separation of Non-Reactor and Non-Power Reactor Licensing Activities from Power Reactor Licensing Activities in 10 CFR part 50,” the NRC developed licensing guidance for the first time since many NPUF applicants were originally licensed. In that guidance (NUREG-1537, Parts 1 and 2), the NRC provides detailed descriptions of the scope, content, and format of FSARs and the NRC's process for reviewing initial license applications and license renewal applications. However, the first license renewals using NUREG-1537 had varying levels of consistency and did not propose an acceptable alternative to the guidance. This resulted in the NRC sending requests for additional information and some of the issues already described in Section I.B. of this document.

As a result of these issues, a backlog of NPUF license renewal applications developed and persisted. The Commission and other stakeholders voiced concerns not only about the backlog, but also about the burdensome nature of the license renewal process itself. The Commission issued SRM-M080317B, “Briefing on State of NRC Technical Programs,” in April 2008, directing the staff to “examine the license renewal process for non-power reactors to identify and implement efficiencies to streamline this process while ensuring that adequate protection of public health and safety are maintained.”

In October 2008, the staff provided the Commission with plans to improve the review process for NPUF license renewal applications in SECY-08-0161, “Review of Research and Test Reactor License Renewal Applications.” In SECY-08-0161, the staff summarized a public meeting held with stakeholders to gather feedback on the current process, ways the process could be improved, and options for improving the review process. The staff provided a detailed description of five options for streamlining the NPUF license renewal process:

• An “alternate safety review approach” that would limit the review of license renewal applications to changes to the facility since the previous license review occurred. Safe operation of the facility would be assured by the review of changes to the facility, compliance with the current regulations, the previous NRC analysis, and the NRC's inspection process.

• A “graded approach” that would base the areas of review on the relative risk associated with the facility applying for a renewed license. The graded approach would ensure safe operation by properly identifying the inherent risk associated with the facility and ensuring those risks are minimized.

• A “generic analysis approach” that would require the NRC to review and approve a generic reactor design similar to the NRC topical report process. The NRC would rely on the previously approved generic analysis and would not reanalyze those items.

• A “generic siting analysis approach” that would require the NRC to develop a generic communication that contains information related to each of the licensee sites. The licensees could then reference this generic communication in their license renewal submittals.

• An “extended license term approach” would permit extended or indefinite terms for NPUF licenses. The staff described this approach in SECY-08-0161:

The Commission issued SRM-SECY-08-0161, “Review of Research and Test Reactor License Renewal Applications,” in March 2009. The Commission directed the staff to: (1) immediately implement short-term program initiatives to address the backlog of license renewal applications; (2) work with the regulated community and other stakeholders to develop an interim streamlining process to focus the review on the most safety-significant aspects of the license renewal application; and (3) streamline the review process to ensure that it becomes more efficient and consistent, thereby reducing uncertainties in the process while ensuring compliance with regulatory requirements.

As part of its direction to develop the program initiatives, the Commission instructed the staff to implement a graded approach commensurate with the risk posed by each facility, incorporate elements of the alternate safety review approach, and use risk insights from security assessments to inform the dose threshold. In addition, the Commission told the staff to develop an interim staff guidance (ISG) document that employs the graded approach to streamline the license renewal application process.

Lastly, the Commission instructed the staff to submit a long-term plan for an enhanced NPUF license renewal process. The Commission directed that the plan include development of a basis for redefining the scope of the process as well as a recommendation regarding the need for rulemaking and guidance development.

The staff responded to the Commission's direction by implementing short-term actions to address the license renewal application backlog and developing ISG-2009-001, “Interim Staff Guidance on the Streamlined Review Process for License Renewal for Research Reactors,” hereafter referred to as the ISG. The ISG called for employing a graded approach to streamline the license renewal application process. Since October 2009, the NRC has reviewed license renewal applications according to the streamlined review process presented in the ISG. The ISG identified the three most safety-significant sections of an FSAR: reactor design and operation, accident analysis, and technical specifications. The NRC also has reviewed licensees' radiation protection and waste management programs and compliance with financial requirements. The ISG divided facilities into two groups: (1) those facilities with licensed power of less than 2 megawatts thermal (MW(t)), which would undergo a limited review focusing on the safety-significant aspects, considering the decisions and precedents set by past NRC reviews; and (2) those facilities with licensed power of 2 MW(t) and greater, which would undergo a full review using NUREG-1537, Part 2. The process outlined in the ISG facilitated the NRC's review of license renewal applications and enabled the NRC to review applications in a timelier manner.

In addition, the staff issued SECY-09-0095, “Long-Term Plan for Enhancing the Research and Test Reactor License Renewal Process and Status of the Development and Use of the Interim Staff Guidance,” in June 2009, to provide the Commission with a long-term plan for enhancing the NPUF license renewal process. In the long-term plan, the staff proposed to develop a regulatory basis to support rulemaking to streamline and enhance the NPUF license renewal process. The Commission issued SRM-M090811, “Briefing on Research and Test Reactor (RTR) Challenges,” in August 2009, which directed the staff to accelerate the rulemaking to establish a more efficient, effective, and focused regulatory framework.

In August 2012, the staff completed the “Non-Power Reactor (NPR) License Renewal Rulemaking: Regulatory Basis Document,” hereafter referred to as the regulatory basis. 2

The NRC, in the regulatory basis, analyzed the NPUF license renewal process's technical, legal, and policy issues; effects on public health, safety, and security; effects on licensees; effects on the NRC; and stakeholder feedback. The NRC also considered lessons learned from implementation of the streamlined review process outlined in the ISG. The NRC concluded that a rulemaking was warranted. A public meeting was held on August 7, 2014, to discuss the regulatory basis and rulemaking options. The NRC held another public meeting on October 7, 2015, to afford stakeholders the opportunity to provide feedback and comment on preliminary proposed rule concepts. Participant comments and questions focused on the potential effects of eliminating license terms, the scope of review under the new process, and how the amended regulation would work compared to the existing license renewal process. The NRC considered the comments when developing the proposed rule.

On March 30, 2017, the NRC published the proposed rule, “Non-Power Production or Utilization Facility License Renewal” in the Federal Register (82 FR 15643). The NRC proposed to eliminate license terms for facilities used for medical therapy or research and development licensed under the authority of Sections 104a or 104c of the AEA, other than for testing facilities. Other proposed amendments addressed the license renewal process for licenses issued to testing facilities under the authority of Section 104c of the AEA and licenses issued to non-power commercial facilities under the authority of Section 103 of the AEA (including testing facilities). The proposed rule also included a provision to require all NPUF licensees to submit FSAR updates to the NRC every 5 years. The NRC also proposed an accident dose criterion of 1 rem (0.01 Sv) TEDE for NPUFs other than testing facilities. The NRC requested public feedback on specific questions, including the criteria, other than power level, to use when determining the applicability of requirements for low-risk commercial production or utilization facilities and low-risk testing facilities. The proposed rule provided a public comment period of 75 days. The NRC received 16 comment submissions on the proposed rule and draft implementation guidance, as discussed further in Section IV of this document. The NRC considered those comments in developing this final rule.

This final rule: (1) revises the definitions for Non-power reactor, Research reactor, and Testing facility; (2) eliminates license terms for NPUFs licensed under § 50.21(a) or (c), other than testing facilities; (3) defines the license renewal process for NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c); (4) requires all NPUF licensees to submit to the NRC an updated FSAR and subsequent FSAR updates at intervals not to exceed 5 years; (5) amends the current timely renewal provision under § 2.109, allowing an NPUF subject to license renewal to continue operating under an existing license past its expiration date if the licensee submits a license renewal application at least 2 years before the current license expiration date; (6) provides an accident dose criterion of 1 rem (0.01 Sv) TEDE for NPUFs other than testing facilities; (7) extends the applicability of § 50.59 to NPUFs regardless of their decommissioning status; (8) clarifies the requirements for NPUF license applicants to meet the existing provisions of § 51.45; and (9) eliminates the requirement to submit financial qualification information with license renewal applications under § 50.33(f)(2).

This final rule enhances the effectiveness and efficiency of the NPUF license renewal process, consistent with the AEA's criterion for imposing minimum regulation on facilities of these types that is needed to promote the common defense and security and protect the health and safety of the public. Each of the nine main objectives of this final rule are discussed in detail in this section.

1. Revises the definitions for Non-power reactor, Research reactor, and Testing facility.

This final rule addresses inconsistencies in definitions and terminology throughout 10 CFR chapter I to improve clarity in determining the applicability of the regulations associated with NPUFs as defined in § 50.2.

The NRC received public comments on the proposed definition of Non- power production or utilization facility. In reviewing the comments, the NRC identified that the proposed definition for Non-power production or utilization facility was too broad for defining production facilities that are NPUFs. Previously, the definition excluded fuel reprocessing plants, but did not exclude production facilities designed or used primarily for the formation of plutonium or uranium-233 or designed or used for the separation of the isotopes of plutonium. Ultimately, the NRC did not revise the definition for Non-power production or utilization facility because an appropriate definition to exclude all production facilities as defined under paragraphs (1) and (2) of the definition of Production facility in § 50.2 was added by the rule on Emergency Preparedness for Small Modular Reactors and Other New Technologies (88 FR 80050; November 16, 2023). Production facilities of the type defined under paragraph (1) of the definition of Production facility in § 50.2 have been owned by the U.S. Department of Energy to produce plutonium or uranium-233 and have not been NRC licensees. If such a facility were to be licensed by the NRC, the facility's particular use of special nuclear material would require the Commission to determine the licensing path for the facility. Production facilities, as defined under paragraph (2) of the definition of Production facility in § 50.2, are not NPUFs because these facilities have a higher potential of radiological risk to the environment and the public than NPUFs ( e.g., an inventory of high-level liquid radioactive wastes). This higher risk is evidenced by the applicability to these facilities of NRC regulations in appendix B to 10 CFR part 50, “Quality Assurance Criteria for Nuclear Power Plants and Fuel Reprocessing Plants” and appendix F to 10 CFR part 50, “Policy Relating to the Siting of Fuel Reprocessing Plants and Related Waste Management Facilities.” The definition of Non-power production or utilization facility in § 50.2 excludes production facilities designed or used primarily for the formation of plutonium or uranium-233 or the separation of the isotopes of plutonium.

The NRC also received a comment from the National Institute of Standards and Technology on the definition of Testing facility in § 50.2 and Research reactor in § 171.11(b)(2). The commenter recommended that the NRC revise the definitions of Testing facility and Research reactor to “remove the arbitrary 10 MW(t) threshold, and apply instead a risk-based approach to its regulation of a testing facility.” Further, the commenter stated that the risk “is best quantified by accident analyses performed under a licensing safety analysis” and linked the recommended definition to the NRC's accident dose criterion of 1 rem (0.01 Sv) in the proposed rule.

The technical basis associated with the 10 MW(t) threshold under the current definition for Testing facility, while generally based on safety significance, is not explicitly documented. Similarly, the technical basis for the 1 MW(t) threshold (coupled with specific design features) under the current definition for Testing facility is not explicitly documented. These prescriptive power thresholds do not account for the safety features that are engineered into the facility design and those barriers that must be breached during an accident before a release of radioactive material to the environment can occur. Therefore, these thresholds do not accurately represent the risk associated with a particular facility. For these reasons, the use of a postulated accident dose is a more risk-informed, performance-based approach, compared to using the power level of the reactor for distinguishing between types of NPUFs, such as research reactors and testing facilities. As a result of this public comment, the NRC revised the definitions of Testing facility and Research reactor to reflect this risk-informed approach by incorporating an accident dose criterion of 1 rem (0.01 Sv) TEDE, the basis for which is discussed in section II.6 of this document.

Additionally, the NRC is making conforming changes to the definitions of Testing facility, Research reactor, and Non-power reactor wherever these definitions appear throughout 10 CFR chapter I. The regulations currently refer to many types of facilities that are categorized as NPUFs, such as non-power reactors, research reactors, training reactors, testing reactors, testing facilities, and critical assemblies. The NRC reviewed each instance of these various terms in 10 CFR chapter I. Where appropriate in this final rule, the NRC added, corrected, or standardized the terminology and definitions.

While this final rule revises the definition of Research reactor in §§ 170.3 and 171.5 to conform to other definitions in 10 CFR chapter I, the NRC did not change the definition of Research reactor in the specific exemption for Federally owned and State-owned research reactors in § 170.11(a)(9) or § 171.11(b)(2). The current definition in § 171.11(b)(2) is based on the language of the Omnibus Budget Reconciliation Act of 1990, as amended (Pub. L. 101-508) (OBRA-90), a statutory requirement imposed by Congress. Further, a substantively similar definition of Research reactor was included in the provisions of the Nuclear Energy Innovation and Modernization Act (Pub. L. 115-439) (NEIMA) that relate to the NRC's fee recovery structure. Changing the definition of Research reactor in § 171.11(b)(2) would therefore be inconsistent with OBRA-90 and NEIMA. The definition of Research reactor in § 170.11(a)(9) is not based on OBRA-90, but the basis for that exemption from fees parallels the basis for the exemption from annual fees in § 171.11(b)(2). Changing the definition of Research reactor in § 170.11(a)(9) would be a substantive change beyond the scope of this final rule.

Where appropriate, this final rule standardizes the terminology in other parts of the regulations to modify the intended scope of regulations citing Research and test reactors to be either Non-power reactors or Non-power production or utilization facilities. For example, this final rule changes Research and test reactors to Non-power production or utilization facilities in appendix E to 10 CFR part 50, “Emergency Planning and Preparedness for Production and Utilization Facilities,” while in § 55.40, this final rule changes Test and research reactors to Non-power reactors. Also, where appropriate, the final rule changes the uses in other parts of the regulations for Testing facility, Research reactor, and Non-power reactor to reference only one definition in the part where that definition is used most, unless the specific meaning is needed and different for a given part. In addition, the final rule adds the definition of Non-power reactor, as it is defined in § 50.2, to the definitions section in 10 CFR part 73 because the term is used many times throughout that part. These changes increase clarity by defining all NPUF-related terms consistently where they are most used in the regulations.

This final rule also revises the definition of Non-power reactor to distinguish between non-power reactors used for research and development activities and non-power reactors used for commercial or industrial purposes. Before this final rule, all non-power reactors were defined in § 50.2 as “a research or test reactor licensed under §§ 50.21(c) or 50.22 of this part for research and development.” This final rule defines non-power reactors more precisely as one of three mutually exclusive categories of facilities: (1) testing facilities, (2) research reactors that are NPUFs licensed under § 50.21(c), or (3) commercial or industrial reactors that are NPUFs licensed under § 50.22. The second and third categories exclude testing facilities, and the facilities in those categories must meet the accident dose criterion in § 50.34(a)(1)(i). If they do not meet this criterion, then they will be considered testing facilities.

2. Eliminates license terms for NPUFs, other than testing facilities, licensed under § 50.21(a) or (c).

The final rule language in § 50.51(c) eliminates license terms for NPUFs, other than testing facilities, licensed under § 50.21(a) or (c). Before this final rule, § 50.51(a) stated, “Each license will be issued for a fixed period of time to be specified in the license but in no case to exceed 40 years from date of issuance.” This included all facility licenses issued under 10 CFR part 50, including licenses for facilities issued under § 50.21(a) or (c). However, the AEA does not establish specific license terms nor the need for license terms for class 104 facilities.

Historically, license renewal afforded both the NRC and the public the opportunity to re-evaluate the licensing basis of the NPUF. The purpose of license renewal was to assess the likelihood of continued safe operation of the facility, such that radioactive materials can be used for beneficial civilian purposes in a safe and secure manner. For several reasons that are unique to NPUFs, this objective can be achieved through existing oversight activities and review of FSAR updates submitted pursuant to the new requirements in § 50.71(e) of the final rule (see Section II.4. of this document). This approach is consistent with the NRC's goal of efficient and effective licensing and will implement and reflect lessons learned from decades of processing license renewal applications. The NRC reached this conclusion based on three considerations: (1) low overall radiological risk, (2) limited aging-related issues, and (3) slow evolution of the design basis.

First, compared to power reactors, the NPUFs licensed under § 50.21(a) or (c), other than testing facilities, operate at low power levels, temperatures, and pressures, and have a small inventory of fission products in the fuel. Therefore, these NPUFs present a lower potential radiological risk to the environment and the public. Additionally, the consequences of the maximum hypothetical accidents (MHAs) for these facilities fall below the standards in 10 CFR part 20 for protecting the health and safety of the public.

Of the 30 NPUFs that are currently licensed to operate and are eligible for non-expiring licenses (excluding the one testing facility), 26 have cores that are submerged in tanks or pools of water that provide sufficient passive decay heat removal to prevent overheating of the fuel. 3 Of these 26 licensed facilities, 24 are not required to have emergency core cooling systems (ECCSs) because conservative accident analyses have shown that these NPUFs do not generate enough decay heat, even after extended operation at maximum licensed power, to be at risk of overheating, failure of a fission product barrier, or posing a threat to public health and safety. Additionally, many of the licensees monitor for leaks by routinely inspecting the facility, tracking and trending water inventory, and performing surveillance on installed pool-level instrumentation and sensors. Licensees sample the water periodically and analyze the radioisotopes in the primary and, if applicable, secondary coolant. Many licensees sample weekly for gross radioactive material content. This data also is used to establish trends to quickly identify fuel or heat exchanger failure. Most of these licensees analyze, in their FSARs, pool and heat exchanger failures and the potential consequences for the safety of the reactor, workers, and public. In general, the radioisotope concentrations in pool or tank water at NPUFs are within the effluent concentration limits specified in appendix B to 10 CFR part 20, and therefore are not radiologically significant.

Only two of the NPUFs eligible for non-expiring licenses are required by their safety analyses to have an ECCS to maintain core cooling in the highly unlikely case that a loss-of-coolant accident uncovers the core. 4 For these NPUFs, the ECCS is needed only to direct flow into the top of the tank or pool to provide cooling for a limited time after reactor shutdown. This period of time depends on the recent operational history of the reactor, which determines the decay heat present at reactor shutdown. After this relatively brief time, air cooling is adequate to remove decay heat without the ECCS. Additionally, required surveillance and testing of the ECCS at these facilities help ensure the performance of the system. Operation of the facility is not permitted if the ECCS has not been verified to be operable before reactor startup or if the system is deemed inoperable during reactor operation.

Second, the NRC has found that the simple design and operation of these facilities yield a limited scope of aging-related concerns. There have been no significant aging issues identified at the time of license renewal because the NRC currently imposes aging-related surveillance requirements on NPUFs via technical specifications, as needed. Aging of components is specifically addressed in the standard review plan and acceptance criteria used for evaluating license renewal applications ( i.e., NUREG-1537, Part 2). Parts 1 and 2 of NUREG-1537 document lessons learned and known aging issues from prior reviews. Since NUREG-1537 was published in 1996, NRC reviews and assessments have not revealed any additional issues or need to update the NUREG. Specifically, based on operating experience over the past 60 years and review of license renewal applications over the past 40 years, and as documented in NUREG-1537, Parts 1 and 2, the NRC has determined that for NPUFs, the two main areas related to aging that could need surveillance because of potential safety concerns are 1) fuel cladding and 2) instrumentation and control features.

Regarding fuel cladding, the NRC currently requires NPUFs to perform periodic fuel inspections. Through years of experience, the NRC has found that aging-related fuel failures either do not occur, or failures that do occur do not release significant amounts of fission products and are quickly detected by existing monitoring systems and surveillances. If fuel failures are detected, licensees are able to take the facility out of service and remove any failed assemblies from service.

With regard to instrumentation and control, the NRC has found that failures in this area result in automatic facility shutdown. Failures reveal themselves to the licensee and do not prevent safe shutdown. Over the past 60 years of operation of these facilities, the potential occurrence of age-related degradation has been successfully mitigated through inspection, surveillance, monitoring, trending, recordkeeping, replacement, and refurbishment. In addition, licensees are required to report preventive and corrective maintenance activities in their annual reports, which are reviewed by the NRC. This allows the NRC to identify new aging issues if they occur. Therefore, the NRC has concluded that existing requirements and facility design and operational features will address concerns over aging-related issues during a non-expiring license term.

Third, the design bases of these facilities evolve slowly over time, with approximately five license amendment requests from all NPUF licensees combined each year and, on average, only five § 50.59 evaluations per facility per year for changes that do not require prior NRC approval.

Given these considerations, the elimination of license terms for medical therapy or research and development facilities, other than testing facilities, licensed under § 50.21(a) or (c), combined with the addition of requirements for periodic FSAR submittals, will provide a new framework for enabling licensees to continue to operate safely while reducing burden on licensees and the NRC. The final rule at § 50.71(e) requires licensees to submit updated FSARs and subsequent FSAR updates to ensure that a facility's licensing basis is kept up-to-date, a major function previously provided by the license renewal process, while imposing significantly less burden on licensees. Eliminating license terms for these licensees will allow the NRC to focus its resources on oversight of these facilities, such as conducting routine inspection activities and reviewing annual reports and FSAR updates. Recurring FSAR updates by licensees and reviews by the NRC will increase licensees' focus on maintaining their facilities' licensing bases. Should the NRC identify potential issues with the facility's continued safe operation in its reviews of FSAR updates, the Commission can undertake regulatory actions specified in § 2.202 to modify, suspend, or revoke a license. In addition, the public will remain informed about facility operations through the publicly available FSAR submittals and will continue to have opportunities to participate in the regulatory process through licensing actions and the § 2.206 petition process. By eliminating license terms and requiring periodic FSAR update submittals, coupled with existing oversight processes, the NRC will reduce the burden on the affected licensees and the NRC, which is consistent with the AEA and supports the NRC's goal of efficient and effective licensing.

Most licenses of existing NPUFs licensed under § 50.21(a) or (c), other than testing facilities, will be modified by order to remove the license terms after the effective date of this final rule (see Section II.4. of this document). Facilities licensed under § 50.21(a) or (c), other than testing facilities, that have undergone relicensing using the guidance in NUREG-1537, Part 2 will be eligible to receive a non-expiring license without again renewing the current license. The current NPUF licensees that have not undergone the license renewal process using the guidance in NUREG-1537, Part 2, will each need to submit an application for license renewal if they wish to continue facility operation beyond the current license term. The NRC will review the application using NUREG-1537, Part 2, and the ISG. If the NRC concludes that a licensee's application meets the standard for issuing a renewed license, then the NRC would issue a non-expiring renewed license. If, in the future, the NRC issues an operating license to a new facility, other than a testing facility, under § 50.21(a) or (c), the license would be non-expiring and would be subject to periodic FSAR submittal requirements applicable to all NPUF licensees.

This final rule makes conforming changes to requirements for facilities that are decommissioning by revising § 50.82(b) and (c). These provisions currently use the expiration of the operating license as a reference point to address license termination applications and collection periods for shortfalls in decommissioning funding for NPUFs. This final rule clarifies that NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c) are the only NPUFs with license expiration dates. The reference point for NPUFs licensed under § 50.21(a) or (c), other than testing facilities, is the NPUF's permanent cessation of operations.

3. Defines the license renewal process for NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c).

For NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c), this final rule defines the license renewal process in § 50.135. This one section consolidates existing regulatory requirements ( e.g., requirements regarding written communications, application filing, application contents, and the issuance of renewed licenses) for current and future licensees. This final rule does not impose new regulations on these facilities. The NRC also is making a conforming change to § 50.8 to reflect the approved information collection requirement of § 50.135.

Section 103 of the AEA establishes a license term of no more than 40 years for commercial or industrial facilities licensed under § 50.22. Although the AEA does not establish a fixed license term for testing facilities, licensees for these facilities are currently subject to additional license renewal requirements ( e.g., siting subject to 10 CFR part 100, Advisory Committee on Reactor Safeguards review, and environmental impact statements) because of the potential for higher radiological risks associated with their facilities' design, operation, or use as compared to other class 104a or 104c licensees. Therefore, all commercial or industrial NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c) will continue to have fixed license terms and undergo license renewal. As described in § 50.135(c)(2), these NPUFs will be able to submit a license renewal application to the Commission no more than 10 years in advance of the expiration of the operating license currently in effect. The requirement in § 50.135(c)(2) is not intended to affect the term of operating licenses granted to NPUFs.

The NRC is making renewed operating licenses for these facilities effective, and thereby replacing the previous operating license, immediately upon the date of issuance. The applicant for the renewed license can propose a schedule for implementation of the renewed licensee. This implementation schedule would ensure that the licensee can make any necessary and conforming changes to the facility processes and procedures required by the applicable conditions of the renewed license. The NRC will review and make the schedule, if approved, a condition of the renewed license. The immediate effectiveness of the renewed license is a change from the proposed rule, which would have made the renewed license effective 30 days after issuance. This final rule provides a substantively similar result as the proposed rule and provides licensees additional flexibility in the timing of their implementation of the renewed license.

If administrative or judicial appeal affects the renewed license, then the previous operating license will be reinstated unless its term has expired and the facility has failed to submit a license renewal application in a timely manner.

During the development of this final rule, the NRC recognized that § 50.135(e)(2) in the proposed rule could have unnecessarily restricted the license term for a renewed NPUF license to less than 40 years. Section 103 of the AEA allows for license terms of up to 40 years. To address this issue, this final rule clarifies that renewed licenses are issued for a fixed period of time, not to exceed 40 years.

4. Requires all NPUF licensees to submit to the NRC updated FSARs and subsequent FSAR updates at intervals not to exceed 5 years.

Maintaining up-to-date FSARs facilitates safe management of a facility, including current understanding of the licensing bases and effective training of personnel, and enables the NRC to fulfill its statutory obligations and regulatory responsibilities effectively. Section 50.71(e) of the final rule requires all NPUF licensees to submit to the NRC updated FSARs and subsequent FSAR updates at intervals not to exceed 5 years. The updated FSAR will incorporate the various supplements and amendments that may have been submitted, either in response to NRC questions or on the licensee's own initiative, following the original submittal to create a single and complete updated document that can then serve as the baseline for future changes. Given the requirement to submit subsequent FSAR updates, the NRC anticipates that licensees will document changes to the licensing bases as they occur, which will aid in maintaining continuity of knowledge and the understanding of changes and effects of changes on the facility both for the licensee and the NRC. The NRC anticipates that these changes will result in minimal additional burden on licensees and the NRC because only a small number of changes have occurred per facility each year. In addition, licensees should have already documented these changes under § 50.59 or through a license amendment request under § 50.90.

This final rule requires licensees to submit, in accordance with § 50.4, a complete updated FSAR within 5 years of receipt of a facility operating license (§ 50.71(e)(3)(iv)) and subsequent FSAR updates at successive intervals not to exceed 5 years (§ 50.71(e)(4)(ii)). The NRC will issue orders to existing facilities licensed under § 50.21(c) that have undergone the license renewal process using the guidance in NUREG-1537, Part 2. These licensee-specific orders will direct these licensees to submit their updated FSARs, after which they will be subject to the new requirement in § 50.71(e)(4)(ii) to submit subsequent FSAR updates.

To issue the licensee-specific orders, the NRC will group the facilities based upon when they have undergone license renewal using NUREG-1537. The orders will dictate when a licensee's initial updated FSAR will be due to the NRC. The NRC plans to stagger the dates over a 5-year period following the effective date of this final rule. The NRC will place existing operating and decommissioning NPUF licensees in three groups as follows:

(1) Group 1 consists of licensees that completed the license renewal process most recently using NUREG-1537. The NRC will establish a due date for the updated FSAR that will be at least 1 year and no later than 3 years from the effective date of this final rule. The NRC will require these licensees to submit an updated FSAR first because, with a recent license renewal, the FSARs should require minimal updates.

(2) Group 2 generally consists of licensees for which the NRC reviewed the license renewal application before Group 1 using NUREG-1537, and includes the three facilities currently in decommissioning. The NRC will establish a due date for the updated FSAR that will be at least 2 years and no later than 5 years from the effective date of this final rule. The NRC will allow these licensees more time to submit an updated FSAR than Group 1 licensees because more time has passed since license renewal, so additional time may be needed to update their FSARs.

(3) Group 3 consists of the remaining NPUF licensees that have not undergone license renewal using NUREG-1537. The licenses for these facilities are all due to expire in less than 5 years from the effective date of this final rule. If these licensees choose to renew their facility operating licenses, they will be subject to the requirements in § 50.71(e) after issuance of the renewed license.

The general approach will be to stagger the submittal dates within Groups 1 and 2 such that licensees that most recently completed license renewal will be the first to submit their updated FSAR. However, the licensee-specific orders will also consider facility-specific circumstances and NRC discretion.

This final rule also corrects a grammatical error in footnote 1 to § 50.71(e). The footnote previously stated, “Effects of changes includes appropriate revisions of descriptions in the FSAR such that the FSAR (as updated) is complete and accurate.” This final rule changes “includes” to “include” so that the plural subject is followed by a plural verb.

5. Amends the current timely renewal provision under § 2.109, allowing an NPUF subject to license renewal to continue operating under an existing license past its expiration date if the licensee submits a license renewal application at least 2 years before the current license expiration date.

The requirements in § 2.101(a) allow the NRC to determine the acceptability of an application for review by the NRC. However, before this final rule, § 2.109 allowed an NPUF licensee to submit its license renewal application as late as 30 days before the expiration of the existing license. Historical precedent indicates that 30 days is not a sufficient period of time for the NRC to adequately assess the sufficiency of a license renewal application for review. As a result, the NRC accepted license renewal applications and addressed their deficiencies in the license renewal process by issuing requests for additional information. This approach increased the duration of the license renewal process and resulted in multiple facilities operating many years into a “timely renewal” period without renewed licenses.

To address this issue, the NRC is revising the timely renewal provision for NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c) to establish a length of time adequate for the NRC to review the sufficiency of a license renewal application. Specifically, this final rule amends § 2.109, allowing a facility to continue operating under an existing license past its expiration date if the licensee submits a sufficient license renewal application at least 2 years before the current license expiration date. In such cases, the existing license will not be deemed to have expired until the application has been finally determined by the NRC. This final rule ensures that the NRC has adequate time prior to the expiration of the current license to review the sufficiency of license renewal applications while the facility continues to operate under the terms of its current license.

The proposed rule would have eliminated this provision for medical therapy or research and development facilities, other than testing facilities, licensed under § 50.21(a) or (c), because these facilities would no longer have license expiration dates.

The NRC reinstates the provision in this final rule to enable its use for the remaining license renewal applications that may be submitted after this final rule is published. The NRC anticipates that there is one research reactor licensee that would use this provision.

6. Provides an accident dose criterion of 1 rem (0.01 Sv) TEDE for NPUFs other than testing facilities.

The standards in 10 CFR part 20 for protection against ionizing radiation provide a limit on the maximum yearly radiation dose a member of the public can receive from the operation of any NRC-licensed facility. Licensees are required to maintain programs and facility design features to ensure that these limits are met. In addition to the dose limits in 10 CFR part 20, accident dose criteria are also applied during licensing to determine the acceptability of the licensed facility. The accident dose criteria are not dose limits; they inform a licensee's accident analyses and the development of successive safety measures ( i.e., defense in depth) so that in the unlikely event of an accident, the NRC has reasonable assurance that no acute radiation-related harm will result to any member of the public. Before this final rule, the accident dose criterion for NPUFs, other than testing facilities, was the 10 CFR part 20 dose limit to a member of the public. For testing facilities, accident dose criteria are found in 10 CFR part 100: 25 rem (0.25 Sv) to the whole body and 300 rem (3 Sv) to the thyroid.

Before January 1, 1994, the NRC had generally found acceptable accident doses for applicants applying for an initial or renewed NPUF license, other than for testing facilities, that were less than 0.5 rem (0.005 Sv) to the whole body and 3 rem (0.03 Sv) to the thyroid for members of the public. On May 21, 1991, 5 the NRC amended 10 CFR part 20 to reduce the dose limit to a member of the public to 0.1 rem (0.001 Sv) TEDE (56 FR 23360) with an implementation date of January 1, 1994. Since January 1, 1994, for applicants applying for an initial or renewed NPUF license, other than for testing facilities, the NRC has compared the results from the accident analyses submitted in initial or renewed license applications with the standards in 10 CFR part 20.

The NRC has determined that the public dose limit of 0.1 rem (0.001 Sv) TEDE in 10 CFR part 20 is unduly restrictive to be applied as accident dose criteria for NPUFs except for testing facilities, which are subject to 10 CFR part 100. The NRC bases this determination on the NRC Atomic Safety and Licensing Appeal Board's decision that the standards in 10 CFR part 20 are unduly restrictive as accident dose criteria for research reactors (Trustees of Columbia University in the City of New York, ALAB-50, 4 AEC 849, 854-855 (May 18, 1972)). At the time of this decision, the 10 CFR part 20 public dose limit was 0.5 rem (0.005 Sv) whole body.

However, the NRC considers the accident dose criteria in 10 CFR part 100 to be too high for NPUFs other than testing facilities, because those NPUFs have lower risk profiles than testing facilities. For these reasons, this final rule modifies § 50.34 to add an accident dose criterion of 1 rem (0.01 Sv) TEDE for NPUFs not subject to 10 CFR part 100. The accident dose criterion of 1 rem (0.01 Sv) TEDE is based on the Environmental Protection Agency's (EPA) Protection Action Guides (PAGs). The EPA PAGs are dose guidelines that support decisions during a radiological incident to take protective actions such as staying indoors or evacuating. The proposed rule stated that the 1 rem (0.01 Sv) TEDE accident dose criterion was based on the EPA PAGs published in EPA 400-R-92-001, “Manual of Protective Action Guides and Protective Actions for Nuclear Incidents.” In January 2017, the EPA published an update to its PAGs in EPA-400/R-17/001, “PAG Manual: Protective Action Guides and Planning Guidance for Radiological Incidents.” This update to the EPA PAGs does not change the basis for the 1 rem (0.01 Sv) TEDE accident dose criterion.

The PAG is defined as the projected dose to an individual from a release of radioactive material at which a specific protective action to reduce or avoid that dose is recommended. Three principles considered in the development of the EPA PAGs include: (1) prevent acute effects; (2) balance protection with other important factors and ensure that actions result in more benefit than harm; and (3) reduce risk of chronic effects. In the early phase ( i.e., the beginning of the radiological incident, which may last hours to days), if the sum of the projected dose from external radiation exposure and the inhalation of radioactive material is 1 rem (0.01 Sv) to 5 rem (0.05 Sv), the EPA PAG recommends the protective action of sheltering-in-place or evacuation of the public to avoid inhalation of gases or particulates in an atmospheric plume and to minimize external radiation exposures. The EPA PAG Manual does not provide a protective action recommendation for the public when the projected dose to an individual from an incident is less than 1 rem (0.01 Sv). In light of this understanding of the early phase EPA PAG, the NRC's accident dose criterion of 1 rem (0.01 Sv) TEDE for NPUFs, other than testing facilities, provides reasonable assurance of adequate protection of the public from unnecessary exposure to radiation.

The NRC revised § 50.34(a)(1)(ii)(D)( 2 ) of the proposed rule to replace “postulated accidental release of licensed material” with “postulated accident.” This final rule requires applicants and licensees to evaluate the potential dose from postulated accidents to include the potential exposure from all radiological sources, such as direct or scattered radiation from an unshielded source inside the facility, in addition to potential exposure from a release of radioactive materials. This requirement is consistent with the evaluation methodology described in NUREG-1537, Part 1. Under this final rule, these evaluations need to demonstrate that the dose to any individual located in the unrestricted area will not be in excess of 1 rem (0.01 Sv) TEDE for the duration of the accident. Although the EPA PAGs were developed for radiological incidents that lead to the release or potential release of radioactive materials into the environment, the three principles considered in their development are not dependent on whether the dose received is due to exposure from a release of radioactive materials or from direct or scattered radiation.

To provide further clarification on the NRC's intent of the 1 rem (0.01 Sv) TEDE accident dose criterion for NPUFs, other than testing facilities, a footnote has been incorporated into the final rule text. The footnote clarifies that this 1 rem (0.01 Sv) TEDE accident dose criterion is not a dose limit, as explained in the preceding paragraphs.

In this final rule, the NRC moves proposed § 50.34(a)(1)(ii)(D)( 2 ) to § 50.34(a)(1)(i) and leaves the rule language in § 50.34(a)(1)(ii)(D) unchanged. During the development of this final rule, the NRC recognized that the accident dose criterion more appropriately belongs in § 50.34(a)(1)(i) because the requirements in § 50.34(a)(1)(ii) apply to power reactor construction permit applicants, while the requirements in § 50.34(a)(1)(i) apply to all other construction permit applicants, such as NPUF applicants. Similarly, proposed § 50.34(a)(1)(ii)(D)( 2 ) would have imposed a requirement on applications for renewed NPUF operating licenses, which more appropriately belongs in § 50.34(b). Therefore, the NRC moved the requirement to new § 50.34(b)(13) in this final rule to clarify that an application for an operating license or a renewed operating license for an NPUF must include in the FSAR a final evaluation of the applicable radiological consequences consistent with § 50.34(a)(1)(i).

7. Extends the applicability of § 50.59 to NPUFs regardless of their decommissioning status.

Before this final rule, § 50.59(b) of the Commission's regulations did not apply § 50.59 to NPUFs whose licenses were amended to reflect permanent cessation of operations and that no longer had fuel on site ( e.g., they returned all of their fuel to the U.S. Department of Energy). The former language stated that § 50.59 applied to licensees “whose license has been amended to allow possession of nuclear fuel, but not operation of the facility.” Therefore, § 50.59 did not apply to NPUF licensees that no longer possessed nuclear fuel. For these licensees, the NRC has typically added license conditions identical to the provisions of § 50.59 to allow the licensee to make changes to its facility or changes in its procedures that would not otherwise require obtaining a license amendment pursuant to § 50.90. Because most NPUFs promptly return their fuel to the U.S. Department of Energy after permanent shutdown, in contrast to decommissioning power reactors, these licensees had to request the addition of the license conditions, which imposed an administrative burden on the licensees and the NRC. This final rule eliminates this burden by revising § 50.59(b) to extend the applicability of § 50.59 to NPUFs regardless of their decommissioning status.

8. Clarifies an applicant's requirements for meeting the existing provisions of § 51.45.

The NRC is required to prepare either an environmental impact statement or environmental assessment, as appropriate, for all licensing actions pursuant to 10 CFR part 51, unless a categorical exclusion applies as provided in § 51.22. For most types of licenses, 10 CFR part 51 specifies that an applicant must submit environmental documentation in the form of an environmental report, or a supplement to a previously submitted environmental report, to assist the NRC's review and its compliance with the National Environmental Policy Act of 1969, as amended. However, before this final rule, the NRC did not have explicit requirements under 10 CFR part 51 with respect to the nature of the environmental documentation that must accompany applications for construction permits, initial licenses, and renewed licenses for NPUFs.

This final rule adds a new section to 10 CFR part 51 to clarify NPUF environmental reporting requirements. Section 51.56 clarifies an applicant's existing requirements for meeting the provisions of § 51.45. This change improves consistency throughout 10 CFR part 51 with respect to environmental report submissions required from applicants. The NRC also is making a conforming change to § 51.17 to reflect the approved information collection requirement of § 51.56.

9. Eliminates the requirement for NPUF licensees to submit financial qualification information with license renewal applications under § 50.33(f)(2).

This final rule eliminates license renewal financial qualification requirements for NPUFs. Before this final rule, § 50.33(f) required NPUF license applicants to provide information sufficient to demonstrate their financial qualifications to carry out the activities for which the license is sought. Because the regulatory requirements for the content of an application for a renewed NPUF license were the same as those for an original license, NPUF licensees that requested license renewal were required to submit an update to the same financial information that was required in an application for an initial license. In addition, the NRC found that the financial qualification information did not meaningfully contribute to the NRC's safety determination on the license renewal application. The elimination of NPUF license renewal financial qualification requirements reduces the burden associated with license renewal applications while still enabling the NRC to conduct its review of these applications.

This change is consistent with the current license renewal process for power reactors. On January 30, 2004, the NRC published in the Federal Register the final rule, “Financial Information Requirements for Applications to Renew or Extend the Term of an Operating License for a Power Reactor” (69 FR 4439). This final rule discontinued financial qualification reviews for power reactors at the license renewal stage except in very limited circumstances. The Commission stated that “[t]he NRC believes that its primary tool for evaluating and ensuring safe operations at nuclear power reactors is through its inspection and enforcement programs . . . .” Further, the Commission stated that “[t]he NRC has not found a consistent correlation between licensees' poor financial health and poor safety performance. If a licensee postpones inspections and repairs that are subject to NRC oversight, the NRC has the authority to shut down the reactor or take other appropriate action if there is a safety issue.”

At NPUF sites, the NRC's inspection and enforcement programs serve as important tools for evaluating licensee performance and ensuring safe operations. The NRC periodically inspects each operating NPUF using a graded approach that prioritizes higher-power facilities. The NRC completes an annual inspection of NPUFs licensed to operate at power levels of 2 MW(t) or greater. For NPUFs operating under 2 MW(t), the inspection program is designed to be completed every two years, although inspector availability and licensee availability sometimes dictate that an inspection cycle is carried out in multiple inspections over the 2-year cycle. Inspections can include reviews of organizational structure, operator training and qualification, design and design control, radiation and environmental protection, maintenance and surveillance activities, transportation, material control and accounting, operational activities, review and audit functions, experiments, fuel handling, procedural controls, emergency preparedness, and security. The NRC also performs special and reactive inspections. In addition, the NRC manages the NPUF operator license examination program. The NRC also manages the review of NPUF emergency and security plans and develops and implements policy and guidance concerning the NPUF licensing program.

The same basis for the NRC's elimination of financial qualification requirements for power reactor licensees at the time of license renewal supports the NRC's elimination of NPUF financial qualification requirements at the time of license renewal. The NRC is not aware of any connection between an NPUF's financial qualifications at license renewal and safe operation of the facility. The NRC retains broad authority under the AEA and § 50.54(cc), § 50.54(f), and § 2.102 to request additional financial information from its licensees and applicants, as necessary, to protect public health and safety.

The NRC hosted two public meetings to engage with external stakeholders on the proposed rule and associated draft guidance document during the public comment period. A public meeting was held on May 24, 2017, to discuss the proposed rule. A public meeting on the implementation schedule of the final requirements was held on April 25, 2019. Summaries of both public meetings are available in ADAMS, as provided in the “Availability of Documents” section. The feedback from these public meetings informed the development of this final rule.

The NRC prepared a summary and analysis of public comments received on the 2017 proposed rule and draft regulatory guide, as referenced in the “Availability of Documents” section. In response to the proposed rule and draft regulatory guide, the NRC received 16 comment submissions.

The public comment submittals are available from the Federal e-Rulemaking website at http://www.regulations.gov under Docket ID NRC-2011-0087. Responses to the public comments, including a summary of how the final rule text or guidance changed as a result of the public comments, can be found in the public comment analysis document.

For more information about the associated guidance document, see the “Availability of Guidance” section of this document.

The following paragraphs describe the specific changes within this final rule.

In § 2.109, this final rule revises paragraph (a) to exclude NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c) from the 30-day timely renewal provision by adding paragraph (f) to require these same licensees to submit a license renewal application at least 2 years before license expiration to be considered timely.

In § 20.1905, this final rule revises paragraph (g) to standardize terminology by replacing the term “reactors” with the phrase “production or utilization facilities.”

In § 26.3, this final rule revises paragraph (e) to standardize terminology by replacing the term “reactor” with the phrase “production or utilization facility.”

In § 50.2, this final rule revises the definitions for Non-power reactor and Testing facility.

In § 50.8, this final rule revises paragraph (b) to include new § 50.135 as an approved information collection requirement in 10 CFR part 50.

In § 50.33, this final rule revises paragraph (f)(2) to remove the phrase “for a power reactor” from the fourth sentence and to remove the fifth sentence, which required a non-power reactor applicant to submit with license renewal applications the same financial information that is required for initial license applications. It also redesignates the footnote to conform to the Office of the Federal Register's requirements.

In § 50.34, this final rule revises paragraph (a)(1)(i) to include an accident dose criterion for applicants for construction permits for NPUFs not subject to 10 CFR part 100 and a new footnote 2. It also redesignates the footnotes to conform to the Office of the Federal Register's requirements. This final rule also adds paragraph (b)(13) to require an applicant for an operating or a renewed operating license for an NPUF to include in the FSAR a final evaluation of the applicable radiological consequences in § 50.34(a)(1)(i).

In § 50.36, this final rule revises paragraph (c)(6) to standardize terminology by replacing the term “non-power reactor” with the phrase “non-power production or utilization.”

In § 50.51, this final rule revises paragraph (a) to add the conditional phrase “except as noted under § 50.51(c).” This final rule also adds new paragraph (c) to clarify that NPUFs licensed under § 50.21(a) or (c), other than testing facilities, after the effective date of this final rule, will have non-expiring license terms.

In § 50.59, this final rule revises paragraph (b) to extend applicability to NPUFs that have permanently ceased operations and that no longer have fuel on site.

In § 50.71, this final rule revises paragraph (e) to include NPUFs in the requirement and makes a tense correction to footnote 1. This final rule also revises paragraph (e)(3)(i) and redesignates paragraph (4) as paragraph (4)(i) to clarify that these paragraphs only apply to nuclear power reactors. New paragraphs (e)(3)(iv) and (e)(4)(ii) are added to include the requirements for NPUFs. This final rule also revises paragraph (g) to standardize terminology by replacing the phrase “non-power reactor” with the phrase “non-power production or utilization facility.”

In § 50.75, this final rule also revises paragraphs (d)(1), (e)(1)(iv), and (f)(4) to standardize terminology by replacing the phrase “non-power reactor” with the phrase “non-power production or utilization facility.” This final rule also revises paragraph (f)(5) by replacing the phrase “non-power reactors” with the phrase “non-power production or utilization facilities.”

In § 50.82, this final rule revises paragraph (b) to standardize terminology by replacing the term “reactor” with the phrase “production or utilization facility” and revises paragraph (b)(1) to include testing facilities licensed under § 50.21(c) and holders of a license issued under § 50.22. Paragraph (c) is revised by moving the phrase “that has permanently ceased operation before the expiration of its license” to new paragraph (c)(2) to clarify when the collection period for shortfalls in funding will be determined for NPUFs and holders of licenses issued under § 50.21(b) or § 50.22, or testing facilities.

This final rule adds new § 50.135 to clearly define the license renewal process for NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c).

In appendix C to part 50, this final rule revises paragraph III by replacing the reference to “medical and research reactors” with a reference to “non-power production or utilization facilities of a type described in § 50.21(a) or (c), other than testing facilities.”

In appendix E to part 50, this final rule revises footnote 2 in paragraph I.3 to include the title of Regulatory Guide 2.6 and to replace the phrase “research and test reactor” with the phrase “non-power production or utilization facility.”

In § 51.17, this final rule revises paragraph (b) to add new § 51.56 as an approved information collection requirement in 10 CFR part 51.

In § 51.45, this final rule revises paragraph (a) to add a cross reference to new § 51.56.

This final rule adds new § 51.56 to clarify existing requirements for the submittal and content of environmental reports by applicants seeking a permit to construct, a license to operate, or a renewal of a license to operate a non-power production or utilization facility.

In § 55.5, this final rule revises paragraph (b)(1) to remove the conditional phrase “except for test and research reactor facilities.” It also revises paragraph (b)(3) to clarify the applicability of this paragraph to utilization facilities licensed under 10 CFR part 50 that are not power reactors.

In § 55.40, this final rule revises paragraph (d) to replace the phrase “test and research reactors” with the phrase “non-power reactors.”

In § 55.53, this final rule revises paragraphs (e) and (f)(2) to replace the phrase “test and research reactors” with the phrase “non-power reactors.” It also revises paragraphs (j) and (k) to clarify that these paragraphs apply to utilization facilities licensed under 10 CFR part 50 that are not power reactors.

In § 55.59, this final rule revises paragraph (c)(7) to clarify that this paragraph applies to utilization facilities licensed under 10 CFR part 50 that are not power reactors.

In § 55.61, this final rule revises paragraph (b)(5) to clarify that this paragraph applies to utilization facilities licensed under 10 CFR part 50 that are not power reactors.

In § 73.2, this final rule adds the definition of Non-power reactor as it is defined in § 50.2.

In § 73.21, this final rule revises paragraph (a)(1)(ii) to replace the phrase “research and test reactors” with the phrase “non-power reactors.”

In § 73.23, this final rule replaces the phrase “research and test reactors” with the phrase “non-power reactors.”

In § 73.60, this final rule revises all instances of “nonpower” to read “non-power.”

In § 140.3, this final rule removes the definition of Testing reactor and adds the definition of Testing facility as it is defined in § 50.2.

In § 140.11, this final rule revises paragraph (a)(3) to standardize terminology by replacing the term “reactor” with the term “facility.”

In § 170.3, this final rule revises the definition of Research reactor and revises the definition of Testing facility to align with the definition in § 50.2.

In § 171.5, this final rule revises the definitions of Research reactor and Testing facility to align with the definitions in § 170.3 and § 50.2, respectively.

Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the NRC certifies that this rule does not have a significant economic impact on a substantial number of small entities. This final rule affects only the licensing and operation of NPUFs. In general, the companies, universities, and government agencies that own and operate these facilities do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the size standards established by the NRC (10 CFR 2.810). Additional information is provided in Section 4 of the regulatory analysis, which is available as indicated in the “Availability of Documents” section of this document.

The NRC has prepared a final regulatory analysis on this regulation and the implementation guidance. The analysis examines the costs and benefits of the alternatives considered by the NRC. The regulatory analysis is available as indicated in the “Availability of Documents” section of this document.

The NRC's backfitting regulations for entities that are licensed under 10 CFR part 50 and within the scope of the NRC's backfitting policy appear in § 50.109, “Backfitting.” “Backfitting” is defined in § 50.109(a)(1), in relevant part, as a modification of or addition to the systems, structures, components, or design of a facility, or the procedures or organization required to design, construct, or operate a facility, which results from a new or amended provision in the Commission's regulations.

The amendments in this final rule include the following:

• revising the definitions for Non-power reactor, Testing facility, and Research reactor; eliminating license terms for medical therapy or research and development facilities, other than testing facilities, licensed under 10 CFR 50.21(a) or (c);

• defining the license renewal process for all commercial or industrial NPUFs (including testing facilities) licensed under § 50.22 and testing facilities licensed under § 50.21(c) by consolidating existing regulatory requirements in one section of the NRC's regulations; requiring all NPUF licensees to submit an updated FSAR and subsequent FSAR updates to ensure that a facility's licensing basis is kept up-to-date;

• amending the current timely renewal provision under § 2.109, allowing NPUFs subject to license renewal to continue operating under an existing license past its expiration date if the licensee submits a license renewal application at least 2 years (rather than 30 days) before the current license expiration date; providing an accident dose criterion of 1 rem (0.01 Sv) TEDE for NPUFs other than testing facilities, for use in applicants' accident analyses; extending the applicability of § 50.59 to NPUF licensees regardless of their decommissioning status;

• clarifying an NPUF applicant's environmental report requirements in § 51.45; and eliminating the requirement for NPUF licensees to submit financial qualification information with license renewal applications under § 50.33(f)(2).

These amendments do not result in a modification of or addition to the systems, structures, components, or design of a facility, or the procedures or organization required to design, construct, or operate a facility. The final rule changes do not meet the § 50.109(a)(1) definition of “backfitting” and, thus, do not constitute backfitting for any NPUF that may be within the scope of backfitting.

The NRC will clarify whether commercial NPUFs ( i.e., NPUFs licensed under Section 103 of the AEA) are within the scope of the NRC's backfitting policy as a general matter through an interpretive rule process. An interpretive rule is an agency's interpretation of a statute or its regulations that does not revise the agency's regulations. Examples of NRC interpretive rules include regulatory guides and notices of interpretation.

As described in the “Availability of Guidance” section of this document, the NRC is issuing Regulatory Guide (RG) 2.7, “Preparation of Updated Final Safety Analysis Reports for Non-Power Production or Utilization Facilities,” which provides guidance on methods acceptable to the NRC for complying with the requirements in § 50.71(e) of this final rule. Issuance of this RG does not constitute backfitting under § 50.109. As discussed in the “Implementation” section of RG 2.7, licensees generally are not required to comply with the guidance in that RG. If, in the future, the NRC seeks to impose positions stated in the RG in a manner that would constitute backfitting or forward fitting, the NRC would need to make the showing as required in § 50.109 for backfitting or Management Directive 8.4, “Management of Backfitting, Forward Fitting, Issue Finality, and Information Requests,” for forward fitting, that would allow the NRC to impose the positions.

Cumulative Effects of Regulation (CER) consists of the challenges licensees may face in addressing the implementation of new regulatory positions, programs, and requirements ( e.g., rulemaking, guidance, generic letters, backfits, inspections). The CER may manifest in several ways, including the total burden imposed on licensees by the NRC from simultaneous or consecutive regulatory actions that can adversely affect the licensee's capability to implement those requirements, while continuing to operate or construct its facility in a safe and secure manner.

The goals of the NRC's CER effort were met throughout the development of this final rule. The NRC engaged external stakeholders at public meetings and by soliciting public comments on the proposed rule and associated draft guidance document. A public meeting was held on May 24, 2017, to discuss the proposed rule. A public meeting on implementation was held on April 25, 2019. Summaries of both public meetings are available in ADAMS, as provided in the “Availability of Documents” section of this document. The feedback from the April 25, 2019, public meeting informed the NRC's final rule implementation schedule.

Based upon input from the public and affected licensees, the NRC has specified that this final rule will take effect 30 days from the date of publication of this document. For the purposes of implementing the requirements of § 50.71(e), the NRC will be issuing orders to certain holders of operating licenses, as described in Section II.4 of this document.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31885).

The National Technology Transfer and Advancement Act of 1995, Public Law 104-113, requires agencies to use technical standards developed or adopted by voluntary consensus standards bodies unless the use of such standards is inconsistent with applicable law or is otherwise impractical. The NRC is amending its requirements for the license renewal process for certain production or utilization facilities. This action does not constitute the establishment of a standard that contains generally applicable requirements.

The Commission has determined under the National Environmental Policy Act of 1969, as amended, and the Commission's regulations in subpart A of 10 CFR part 51, that this final rule will not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required. The provision to eliminate license terms for NPUFs, other than testing facilities, licensed under § 50.21(a) or (c) will result in no additional radiological or non-radiological impacts because of the minimal accident consequences of these facilities, existing surveillance and reporting by licensees, and NRC oversight. In addition, the implementation of this final rule will not affect the environmental review requirements for new facilities and facilities applying for license renewal. The NRC concludes that this final rule will not cause any additional radiological or non-radiological impacts on the human environment.

The NRC requested the views of the States on the environmental assessment for this rule. No States filed comments regarding the environmental assessment for this rule.

The determination of this environmental assessment is that there will be no significant offsite impact to the public from this action. The environmental assessment is available as indicated under the “Availability of Documents” section.

This final rule contains new or amended collections of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq. ). The collections of information were approved by the Office of Management and Budget (OMB), approval number 3150-0268.

The burden to the public for the information collections is estimated to average 51 hours per response for information collection requirements contained in 10 CFR part 50 and 0 hours per response for information collection requirements contained in 10 CFR part 51, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the information collections.

The information collections are being conducted to create a more efficient licensing process that continues to protect public health, safety, and the environment. Information will be used by the NRC to ensure that licensing bases remain up-to-date and that adequate protection of public health and safety is maintained. Responses to these collections of information are mandatory under § 50.71(e) and § 51.56. Confidential and proprietary information submitted to the NRC is protected in accordance with NRC regulations at § 9.17(a) and § 2.390(b).

You may submit comments on any aspect of the information collections, including suggestions for reducing the burden, by the following methods:

• Federal Rulemaking Website: Go to http://www.regulations.gov and search for Docket ID NRC-2011-0087.

• Mail comments to: FOIA, Library, and Information Collections Branch, Office of the Chief Information Officer, Mail Stop: T-6 A10M, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; InfoCollects@nrc.gov; or to the OMB reviewer at: OMB Office of Information and Regulatory Affairs (3150-0268), Attn: Desk Officer for the Nuclear Regulatory Commission, 725 17th Street NW, Washington, DC 20503.

The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.

This final rule is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.

For the purposes of Section 223 of the AEA, the NRC is issuing this final rule that amends 10 CFR 50.34, 50.36, 50.59, 50.71, 50.75, 50.82, 55.40, 55.53, 55.59, 73.21, 73.23, 73.60, and 140.11 and creates § 50.135 under one or more of Sections 161b, 161i, or 161o of the AEA. Willful violations of these provisions would be subject to criminal enforcement.

The NRC is issuing RG 2.7, Revision 0, “Preparation of Updated Final Safety Analysis Reports for Non-Power Production or Utilization Facilities,” for the implementation of the requirements in § 50.71(e) of this final rule. The guidance is available in ADAMS under Accession No. ML18031A007. You can access information and public comment submissions related to the guidance at the federal rulemaking website, www.regulations.gov, by searching on Docket ID NRC-2011-0087.

The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

For the reasons set out in the preamble and under the authority of the AEA, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR parts 2, 20, 26, 50, 51, 55, 73, 140, 170, and 171:

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act) requires FHFA to establish several annual housing goals for both single-family and multifamily mortgages purchased by the Enterprises. 1 The annual housing goals are one measure of the extent to which the Enterprises are meeting their public purposes, which include “an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return.”  2

FHFA establishes annual housing goals for Enterprise purchases of single-family and multifamily mortgages consistent with the requirements of the Safety and Soundness Act. The structure of the housing goals and the parameters for determining how mortgage purchases are counted or not counted towards the goals are defined in FHFA's Enterprise housing goals regulation. 3 This final rule amends the regulation to establish benchmark levels for the single-family and multifamily housing goals for 2025-2027.

Single-family housing goals. The single-family housing goals defined under the Safety and Soundness Act include separate categories for home purchase mortgages for low-income families, very low-income families, and families that reside in low-income areas. 4 For purposes of the single-family housing goals, families that reside in low-income areas  5 include: (1) families in low-income census tracts, defined as census tracts with median income less than or equal to 80 percent of area median income (AMI);  6 (2) families with incomes less than or equal to 100 percent of AMI who reside in minority census tracts (defined as census tracts with a minority population of at least 30 percent and a tract median income of less than 100 percent of AMI);  7 and (3) families with incomes less than or equal to 100 percent of AMI who reside in designated disaster areas. 8 The Enterprise housing goals regulation also includes subgoals, 9 within the low-income areas housing goal, that focus on single-family housing occupied by families in low-income census tracts and moderate-income families in minority census tracts. 10 Performance on the single-family home purchase goals and subgoals is measured as the percentage of the total home purchase mortgages purchased by an Enterprise each year that qualify for each goal or subgoal. There is also a separate goal for single-family refinance mortgages for low-income families, and performance on the refinance goal is determined in a similar way.

Under the Safety and Soundness Act, the single-family housing goals are limited to mortgages on owner-occupied housing with one to four units. The single-family goals cover first lien, conventional, conforming mortgages, meaning mortgages that are not subordinate to other mortgage liens, that are not insured or guaranteed by the Federal Housing Administration or another government agency, and that have principal balances that do not exceed the conforming loan limits for Enterprise mortgages.

Two-part evaluation approach for single-family housing goals. The Enterprises' performance on the single-family housing goals is evaluated using a two-part approach that compares the goal-qualifying share of each Enterprise's mortgage purchases to two separate measures: a benchmark level and a market level. To meet a single-family housing goal, the percentage of mortgage purchases by an Enterprise that qualifies for credit under each goal must equal or exceed either the benchmark level or the market level for that year. The benchmark level is set prospectively by rulemaking based on various factors set forth in the Safety and Soundness Act, which are further discussed below. 11 The market level is determined retrospectively for each year, based on the actual goal-qualifying share of the overall market as measured by the Home Mortgage Disclosure Act  12 (HMDA) data for that year. The overall market that FHFA uses for setting both the prospective benchmark level and the retrospective market level consists of all single-family, owner-occupied, conventional, conforming mortgages that would be eligible for purchase by either Enterprise. It includes loans purchased by the Enterprises as well as comparable loans held in a lender's portfolio. It also includes any loans that are part of a private label security, although few such securities have been issued for conventional conforming mortgages since 2008. Since 2018, several new HMDA data fields have become available. FHFA continues to monitor reporting of these new fields to consider potential adjustments to the way FHFA measures the overall market. Because FHFA's econometric market models use past years' data to construct the models, a potential transition to incorporate any new data variables will require time to obtain an adequate input data series.

While the retrospective market levels measure mortgage originations in a particular year, the performance of the Enterprises on the housing goals includes all Enterprise purchases in that year, regardless of the year in which the loan was originated. This includes any loans that are originated in one year and purchased by an Enterprise in a later year.

Multifamily housing goals. The multifamily housing goals defined under the Safety and Soundness Act include separate categories for mortgages on multifamily properties (properties with five or more units) with rental units affordable to low-income and very low-income families. The Safety and Soundness Act also requires reporting on smaller properties, and the Enterprise housing goals regulation includes a small multifamily low-income subgoal for properties with 5 to 50 units. The multifamily housing goals include all Enterprise multifamily mortgage purchases, regardless of the purpose of the loan. The multifamily housing goals evaluate the performance of the Enterprises based on the share of affordable units in properties that serve as collateral for mortgages purchased by an Enterprise. The Enterprise housing goals regulation does not include a retrospective market level measure for the multifamily housing goals, due in part to a lack of comprehensive data about the multifamily market. As a result, FHFA currently measures Enterprise multifamily housing goals performance against the benchmark levels only and the final rule retains this approach.

The Safety and Soundness Act requires that affordability for rental units under the multifamily housing goals be determined based on rents that “[do] not exceed 30 percent of the maximum income level of such income category, with appropriate adjustments for unit size as measured by the number of bedrooms.”  13 The Enterprise housing goals regulation considers the net rent paid by the renter, i.e., the rent is decreased by any subsidy payments that the renter may receive, including housing assistance payments. 14

If, after publication of this final rule, new information indicates that any of the single-family or multifamily housing goals or subgoals should be adjusted in light of market conditions or the safety and soundness of the Enterprises, or for any other reason, FHFA may take any steps that are necessary and appropriate to respond, consistent with the Safety and Soundness Act and the Enterprise housing goals regulation.

For example, under the Safety and Soundness Act and the Enterprise housing goals regulation, FHFA is permitted to reduce a benchmark level in response to an Enterprise petition for reduction for any of the single-family or multifamily housing goals or subgoals in a particular year. Any adjustment in response to such a petition must be based on a determination by FHFA that: (1) market and economic conditions or the financial condition of the Enterprise require a reduction; or (2) efforts to meet the goal or subgoal would result in the constraint of liquidity, over-investment in certain market segments, or other consequences contrary to the intent of the Safety and Soundness Act or the purposes of the Enterprises' charter acts. 15

The Safety and Soundness Act and the Enterprise housing goals regulation also consider the possibility that achievement of a particular housing goal or subgoal may or may not have been feasible for an Enterprise. If FHFA determines that a housing goal or subgoal was not feasible for an Enterprise to achieve, then the statute and regulation do not require any further action related to that housing goal or subgoal for that year. 16

If FHFA determines that an Enterprise did not meet a housing goal or subgoal and that achievement of the housing goal or subgoal was feasible, then the statute and regulation provide FHFA with discretionary authority to require the Enterprise to submit a housing plan describing the specific actions the Enterprise will take to improve its housing goals performance. 17

On September 6, 2008, FHFA placed each Enterprise into conservatorship. Although the Enterprises remain in conservatorship, they continue to have the mission of supporting a stable and liquid national market for residential mortgage financing. FHFA has continued to establish annual housing goals for the Enterprises and assess their performance under the housing goals each year during conservatorship.

FHFA published a notice of proposed rulemaking (NPRM or proposed rule) in the Federal Register on August 29, 2024, that proposed benchmark levels for the single-family and multifamily housing goals for 2025-2027. 18 The public comment period on the proposed rule ended on October 28, 2024. The NPRM proposed decreasing the benchmark levels for the single-family low-income home purchase and very low-income home purchase goals from the current benchmark levels in response to recent market conditions and forecast updates. The NPRM also proposed increasing the minority census tracts home purchase subgoal benchmark level, while maintaining the existing low-income census tracts home purchase subgoal and the low-income refinance goal benchmark levels.

With respect to the multifamily benchmark levels, the NPRM proposed maintaining the existing low-income multifamily goal benchmark level, increasing the very low-income multifamily goal benchmark level, and decreasing the small (5-50 units) multifamily subgoal benchmark level.

In response to potential future uncertainty regarding the size and composition of the single-family mortgage market, the NPRM proposed including “Enforcement Factors” that FHFA would consider in determining when a housing plan would be required if an Enterprise failed to meet certain single-family housing goals during the 2025-2027 period.

The NPRM also proposed referring to the multifamily very low-income housing subgoal as a goal instead of a subgoal. In addition, the NRPM proposed technical changes intended to better conform the regulation to statutory text and existing FHFA practices and procedures and indicated that it may include additional technical changes or corrections in the final rule based on comments received.

Overview of comments received.

FHFA received 31 comment letters from 61 organizations and individuals in response to the proposed rule. Comments were submitted by both Enterprises, as well as by a community development financial institution, two mortgage companies, and four trade associations (one trade association submitted two letters). FHFA also received one comment letter signed by 20 Members of Congress, and seven comment letters from policy advocacy organizations, with one letter representing the views of eleven organizations and another representing the views of five organizations. Eleven individuals submitted the remaining thirteen comment letters (one individual submitted three letters). FHFA also held several meetings with stakeholders to describe the content of the proposed rule and to discuss issues raised by the proposed rule. 19

FHFA has reviewed and considered all the comments. Several of the letters raised issues unrelated to the housing goals or beyond the scope of the proposed rule, and those comments are not addressed in this final rule. Specific provisions of the proposed rule, and the comments received on those provisions, are discussed below and throughout this final rule.

Proposed single-family housing goals benchmark levels.

Most of the commenters who addressed the proposed single-family goals, including the Enterprises, three individuals, three trade associations, and three nonprofit advocacy organizations, expressed overall support for the proposed benchmark levels. Many of these commenters also acknowledged the challenges associated with developing updated benchmark levels for the single-family housing goals using forecast models, particularly given recent and future mortgage market conditions. One nonprofit advocacy organization stated that while their organization has traditionally opposed reductions in the affordable housing goals, they recognize that higher interest rates and a historically low supply of affordable homes have combined to severely limit home purchase options for low-income households. The commenter also expressed support for FHFA's efforts to balance market dynamics and the desire to set single-family goals at relatively high levels. Another comment letter submitted on behalf of several nonprofit advocacy groups acknowledged the challenges posed by rising interest rates in the housing market in recent years and FHFA's ongoing commitment to navigate the complexities of a high-interest rate environment while supporting racial equity initiatives. The comment letter also noted that while the previous housing goals were established as reasonable stretch targets based on market conditions at that time, it is vital that FHFA adopt new strategies to better address the current economic landscape. One trade association stated that the proposed goals strike the right balance between continuing to push the Enterprises to fulfill their mission to serve low- and moderate-income homebuyers and homeowners, while doing so in a financially responsible and achievable manner.

Although both Enterprises conveyed support for the proposed single-family home purchase benchmark levels, both also expressed concerns over uncertainty in the housing and loan origination market. Fannie Mae welcomed the proposed reductions in the low-income and very low-income benchmark levels but noted that uncertainty and constraints in housing supply and affordability could challenge its ability to meet the proposed benchmark levels.

Three nonprofit advocacy organizations, one trade association, and a community development financial institution disagreed with all or many of the proposed single-family goal benchmark levels, and their comments supported maintaining or increasing the benchmark levels relative to the levels established for 2022 through 2024. Some of these commenters specifically opposed the proposed reductions in the benchmark levels for the low-income home purchase and very low-income home purchase goals. A few of these commenters also recommended that the benchmark levels for the low-income refinance goal and the low-income census tracts home purchase subgoal be increased. These commenters urged FHFA to remain aggressive and ambitious when setting the housing goal benchmark levels as a means to motivate the Enterprises to lead the market. Several of these commenters stressed the critical role the goals and subgoals play in providing access to mortgage credit for low-income and very low-income borrowers by ensuring that the Enterprises properly focus on this important aspect of their mission.

Proposed benchmark levels for single-family low-income and very low-income home purchase goals.

Three nonprofit advocacy organizations and one community development financial institution recommended that the proposed benchmark levels for the single-family low-income home purchase goal, which FHFA proposed to lower from 28 percent to 25 percent, and the single-family very low-income home purchase goal, which FHFA proposed to lower from 7 percent to 6 percent, be increased in the final rule. These commenters maintained that the proposed benchmark levels were not aggressive enough given that interest rates had declined since the proposed rule was published. A few of these commenters pointed out that the proposed benchmark levels for the low-income and very low-income home purchase goals were set at levels lower than the midpoints of the forecasts. As noted above, several of these commenters stated that the Enterprises should be given more ambitious low-income and very low-income home purchase goals to motivate them to lead the market.

Proposed single-family low-income census tracts home purchase subgoal.

One individual commented that the proposed rule, which would maintain the current benchmark level for the single-family low-income census tracts home purchase subgoal at 4 percent, is lower than past performance as well as projected forecast performance. The commenter further noted that a higher benchmark level for this subgoal would be more consistent with past Enterprise performance and projected market performance ( i.e., two of the statutory factors that must be considered when establishing a goal or subgoal). Two policy advocacy groups urged FHFA to set a higher benchmark level for this subgoal and pointed out that FHFA's model forecast and Enterprise performance in recent years have been higher than the proposed benchmark level of 4 percent.

Proposed single-family minority census tracts subgoal.

Many commenters supported the proposed increase in the benchmark level for the single-family minority census tracts home purchase subgoal from 10 percent to 12 percent. A comment letter submitted on behalf of several nonprofit advocacy organizations expressed support for this proposed increase and noted that the previous benchmark level did not present a significant challenge for the Enterprises to meet. A community development financial institution also supported the proposed increase, and encouraged FHFA to further increase it over time given the critical need to close the persistent racial and ethnic homeownership gaps that perpetuate inequality. A nonprofit advocacy organization recommended that FHFA set the benchmark level at 13 percent rather than 12 percent to push the Enterprises to pursue innovations that drive the market in light of population trends that may lead to a greater share of census tracts where at least 30 percent of the population identifies as non-white. Another nonprofit advocacy group stated that because the statutory definition of “minority census tract” is broad, FHFA should greatly increase the benchmark level for this subgoal to incentivize the Enterprises to close the racial homeownership gaps for specific minority groups.

Proposed single-family low-income refinance goal.

Most of the commenters who addressed the proposed low-income refinance goal supported the proposal, which would maintain the current benchmark level at 26 percent. Several of the commenters recognized the challenges associated with forecasting the refinance market. For example, one trade association noted that the refinance market is more sensitive to interest rates, making it more difficult to forecast compared to the home purchase market. A policy advocacy group acknowledged that the refinance market is more unpredictable and volatile than the home purchase market due to increased sensitivity to interest rates, but nevertheless encouraged FHFA to increase the benchmark level for this goal in response to the forecasted market. To address the challenges associated with establishing this goal, the trade association also suggested that FHFA consider establishing a secondary assessment factor based on the number of loans purchased when unique market factors drive large or unanticipated increases in the denominator  20 to better assess the number of low-income refinances purchased year over year.

Measurement buffers (called “Enforcement Factors” in the proposed rule ).

In the proposed rule preamble, FHFA specifically requested comments on the proposed factors (referred to as “Enforcement Factors” in the NPRM) that FHFA would consider when determining if a housing plan would be required if an Enterprise failed to meet certain single-family housing goals during the 2025-2027 housing goals period. Specifically, FHFA proposed language in section 1282.22 to indicate that it would not require a housing plan if the benchmark level for a single-family housing goal is higher than the market level for the goal and the Enterprise's performance meets or exceeds the market level minus a specified percentage point. The applicable percentage point is different for the low-income home purchase goal, the very low-income home purchase goal, and the low-income refinance goal. FHFA did not propose similar factors for single-family subgoals. FHFA also proposed limitations so that the factors would not apply in 2027 if the Enterprise did not meet the market and the benchmark levels in 2025 and 2026.

Several commenters, including a nonprofit advocacy organization, both Enterprises, three trade associations, and a mortgage company expressed support for the proposed factors. The nonprofit advocacy organization commented that the proposed factors would offer flexibilities that will allow the Enterprises to better adapt their business activities to market changes without having to focus on meeting one static metric. One trade association noted that the proposed factors would allow the Enterprises to address unexpected market outcomes to prevent unintended consequences, including unwanted market behaviors that would not benefit the intended borrowers. A mortgage company welcomed the additional flexibility based on current market conditions that the proposed factors would provide.

Fannie Mae expressed general support for the proposed enforcement factors, indicating that the proposed factors considered the difficulties an Enterprise may experience when managing to the anticipated market share rather than the fixed benchmark levels. Fannie Mae noted that while the use of the proposed factors would not change the requirement that an Enterprise meet or surpass each of the single-family housing goals benchmark levels or market share levels, implementation of the factors would provide the Enterprises some assurance considering the uncertainty inherent in predicting market share, especially in the absence of fulsome data.

Freddie Mac expressed support for the proposed enforcement factors, noting that they would appropriately account for market fluctuations and uncertainties that cannot be adequately predicted months or years in advance due to the lack of inclusive and timely market data. Freddie Mac described the proposed factors as a “necessary safeguard” for offsetting any potential gap between the actual and forecasted market levels during the 2025-2027 housing goal period. Freddie Mac also supported the proposed limitations on the use of the proposed factors. Specifically, if an Enterprise fails to meet one of the single-family low-income housing goals in both 2025 and 2026, it would not be allowed to apply the proposed factor to the applicable housing goal in 2027. Freddie Mac noted that the proposed limitation on the use of the proposed factors would appropriately account for the uncertainty of market conditions and forecasting while maintaining the Enterprises' responsibility to develop strategies for achieving the housing goals.

Comment letters submitted on behalf of several policy advocacy organizations expressed opposition to the proposed enforcement factors, based on the view that they would reduce the accountability of the Enterprises and allow them to meet a share lower than the market level. As noted in the NPRM, the use of the enforcement factors would be limited and designed to balance the importance of meeting the housing goals with support for liquidity in all market segments. To balance these needs, FHFA narrowly targeted the proposed enforcement factors to apply only to certain single-family housing goals and only for 2025-2027. FHFA noted that it would consider a proposed factor only if the benchmark levels for certain single-family goals were a stretch goal ( i.e., above the HMDA market measure) for the year.

Two comments submitted on behalf of nonprofit advocacy organizations expressed concern that the proposed factors would relax performance requirements for the Enterprises. FHFA notes that these comments do not reflect the intent behind the proposed factors. As proposed, the factors do not modify the standards for meeting the housing goals. The Enterprises are still required to meet the lower of the benchmark level or the market level for each goal. FHFA will continue to make a final determination of each Enterprise's performance under each single-family housing goal and subgoal and each multifamily housing goal and subgoal and will continue to notify Congress if an Enterprise fails to meet any of the goals or subgoals.

Proposed multifamily housing goals benchmark levels.

Several of the commenters that commented on the proposed multifamily housing goals benchmark levels supported the proposal to maintain the current multifamily low-income goal benchmark level at 61 percent, to increase the multifamily very low-income goal benchmark level from 12 percent to 14 percent, and to reduce the small multifamily low-income subgoal benchmark level from 2.5 to 2.0 percent. One trade association supported all the proposed multifamily goal benchmark levels, stating that they would effectively balance the role of the Enterprises in supporting affordable housing and providing liquidity to the entire multifamily market. Another trade association stated that the proposed benchmark levels strike the right balance between continuing to push the Enterprises to fulfill their mission while doing so in a financially responsible and achievable manner. Another trade association referred to the proposed benchmark levels as a “reasonable” mandate for the Enterprises that would provide a critical framework for mortgage funding. A nonprofit advocacy organization supported the proposal to keep the multifamily housing goals at elevated levels. The organization particularly supported the proposed increase in the very low-income goal benchmark level from 12 percent to 14 percent, noting that very low-income renters have been disproportionately impacted by the affordable housing crisis and face a severe shortage of affordable options.

Of the remaining commenters on the multifamily housing goals, three nonprofit advocacy organizations, 20 Members of Congress, and three individuals supported one or more of the proposed multifamily goals or the subgoal benchmark levels, while two nonprofit advocacy organizations opposed all the proposed multifamily goals benchmark levels. Two letters submitted by nonprofit advocacy organizations (one submitted on behalf of 11 nonprofit advocacy organizations) encouraged FHFA to adopt a higher benchmark level for the multifamily low-income housing goal but expressed support for the proposed multifamily very low-income benchmark level. Conversely, another policy advocacy organization supported maintaining the multifamily low-income housing goal benchmark level at 61 percent but urged FHFA to adopt a benchmark level for the multifamily very low-income housing goal higher than 12 percent, not realizing that FHFA proposed increasing this goal to 14 percent. A letter submitted on behalf of 20 Members of Congress called on FHFA to increase the proposed multifamily low-income housing goal benchmark level. With respect to the proposed multifamily low-income housing goal, the letters submitted by and on behalf of policy advocacy organizations, as well as the 20 Members of Congress, stressed that the Enterprises' previous performance highlighted their ability to lead in providing credit for multifamily mortgages that serve low-income households. For example, one of the commenters noted that because both Enterprises' multifamily lending activity easily exceeded the 61 percent benchmark level each year from 2020 to 2023, the multifamily low-income housing goal benchmark level should be increased to 65 percent. The letter submitted of behalf of the Members of Congress also noted that recent decreases in the target range for the federal funds rate, as well as the potential for additional decreases, coupled with individual state actions to increase housing supply pointed towards new opportunities for the Enterprises to meet higher benchmark levels.

Regarding the proposed multifamily very low-income goal, a nonprofit advocacy organization expressed support for the proposed increase in the benchmark level by highlighting the important role the Enterprises play in helping to address the affordable housing needs of very low-income renters. The commenter pointed out that both Enterprises have easily exceeded the 12 percent benchmark level in recent years. The commenter also noted that developers of very low-income rental units often struggle to access affordable capital and that the Enterprises are well-suited to address these developers' funding needs. Another policy advocacy organization viewed a benchmark level of 12 percent to be proportionally low in comparison to the proposed multifamily low-income housing goal benchmark level as well as the past performance of the Enterprises. The commenter noted that Fannie Mae's multifamily very low-income housing goal performance was 18.7 percent for 2023, while Freddie Mac's was 20.6 percent. As a result, the commenter recommended that FHFA increase the multifamily very low-income housing goal benchmark level in the final rule to reflect the greater need for affordable housing as well as to make it more proportional to the relationship between performance and benchmarking.

One of the nonprofit advocacy organizations stated that FHFA is too conservative with its setting of the multifamily goal benchmark levels. The commenter noted that the recent historical performance of the Enterprises indicates that the proposed multifamily goals and subgoal benchmark levels should be more ambitious. The commenter expressed concern that the large difference between goal benchmark level setting and historical performance will encourage the Enterprises to “back slide,” which will hurt the housing supply for low-income rental units during a time when rents have been increasing significantly. Another nonprofit advocacy organization strongly urged FHFA to set higher multifamily goal benchmark levels in response to the “fair and affordable housing crisis” to incentivize the Enterprises to lead and move the market to give renters more opportunities for fair and affordable multifamily housing.

Proposed small multifamily housing subgoal benchmark level.

There were mixed reactions among those commenters that addressed the proposal to lower the benchmark level for the small multifamily low-income subgoal (which is for properties with 5 to 50 units) from 2.5 percent to 2 percent. One trade association supported the proposed reduction in the benchmark level, stating that this sector is well-supported by private capital sources. Freddie Mac stated that the proposal was appropriate given how sensitive this segment of the market is to market conditions and noted that this market sensitivity has resulted in fewer owners of such properties seeking financing relative to the market overall. Freddie Mac also stated that while it is important for the Enterprises to play a role in this market by advancing beneficial standards and providing countercyclical liquidity, the Enterprises should not crowd out private capital providers including regional banks and small financial institutions. Fannie Mae also supported the proposed benchmark level, stating that a reduction from 2.5 percent to 2 percent is consistent with the ongoing competition for these loans in the market.

One nonprofit advocacy organization and three individuals urged FHFA to maintain the benchmark level for this subgoal at the current 2.5 percent. A nonprofit advocacy organization and a letter on behalf of 20 Members of Congress recommended that the benchmark level be raised to above 2.5 percent. The commenters argued that because the Enterprises have exceeded the 2.5 percent subgoal for the last four years, there is no need to decrease the benchmark level. The commenters emphasized that Enterprise support is crucial for these properties, noting that small multifamily properties serve as a critical source of affordable housing in rural areas and other underserved communities and owners of these properties struggle to access capital as readily as owners of larger developments.

Can credit card issuers violate the law if they or their rewards partners devalue earned rewards or otherwise inhibit consumers from obtaining or redeeming promised rewards?

Yes. Covered persons that offer, provide, or operate credit card rewards programs, and their service providers, may violate the prohibition against unfair, deceptive, or abusive acts or practices in a variety of circumstances, including instances where some of the conduct in question may be attributable to a third party, such as a merchant partner, and regardless of whether covered persons or service providers are taking actions consistent with rewards program terms. This circular provides some examples where covered persons that offer, provide, or operate credit card rewards programs, and their service providers, may violate the prohibition against unfair, deceptive, and abusive acts or practices, where: (1) the redemption values of rewards that consumers have already earned or purchased are devalued; (2) consumers' receipt of rewards is revoked, canceled, or prevented based on buried or vague conditions, such as criteria disclosed only in fine print or up to the operator's discretion; or (3) consumers have reward points deducted from their balance without receiving the corresponding benefit of the rewards, including due to technical failures when redeeming rewards points on merchant partners' systems.

Rewards programs are increasingly used to encourage consumers to apply for and use specific credit cards. 1 As of 2019, more than 90 percent of general purpose credit card spending occurred on rewards cards, and by the end of 2022, 75 percent of general purpose credit cards were rewards cards. 2 While rewards cards are more common for consumers with higher credit scores, the use of rewards cards is growing fastest among deep subprime, subprime, and near-prime consumers. 3 The amount of money or value that consumers earn and maintain in credit card rewards programs is also large and has increased substantially in recent years. For example, in 2022, consumers earned more than $40 billion in rewards from major general-purpose credit cards, more than a 50 percent increase from 2019. 4 Consumer rewards balances at the end of 2022 were more than $33 billion, up 40 percent relative to the fourth quarter of 2019. 5 More consumers are also using rewards to make payments, including for day-to-day purchases and necessary expenses. 6

Credit card rewards programs are typically structured around earning rewards “currencies”—most commonly “miles” or other units of value issued by a co-brand partner (such as an airline or hospitality chain) or, alternatively, a credit card issuer's own “points.”  7 Consumers typically earn miles or points through credit card spending or by directly purchasing them in accordance with pre-determined formulas, or “earn rates.”  8 Many issuers also offer promotional rewards through things like sign-up bonuses and referrals. 9

Once earned or purchased by consumers, points can be redeemed for rewards like “cash back” (statement credits or direct deposits) or transfers to a co-brand or merchant partner ( e.g., miles or merchant-specific gift cards), and also for other types of goods or services, like buying merchandise, donating to charities, applying to purchases at check out, and others. 10 However, both credit card issuers and loyalty programs generally reserve, and often assert a right to, unilaterally change the value of rewards, including at the point of redemption. 11 Reward points or miles valuation changes can sometimes be tied to price changes in the underlying product or service for which the reward is being redeemed ( e.g., changes in flight pricing), but program operators also adjust rewards redemption rates distinct from underlying prices, apparently as a means to “preserve” or “maintain” profit margins. 12

As the market for credit card rewards programs has grown, so too has their complexity. 13 Rewards program operators often assert their ability to unilaterally modify credit card rewards programs, which has caused at least one State to take action to provide consumers with additional protections against such unilateral program modifications. 14 Additionally, the number of consumer complaints that the CFPB receives about credit card rewards programs has also risen dramatically in recent years. 15 Many consumers' complaints describe how the marketing or initial offering of a rewards program is inconsistent with their actual, later experiences earning and redeeming credit card rewards. For instance, consumers have complained to the CFPB about companies devaluing their rewards relative to what they were marketed, or increasing barriers to redeeming cash or cash-equivalent rewards, such as eliminating the ability for consumers to redeem points for a statement credit. 16

Consumers have also complained about being denied access to promotional or other rewards because of terms or other requirements hidden in their cardholder or rewards program agreements, including instances of unexpectedly being found ineligible after applying for a credit card  17 or being forced to return a promotional offer because they closed their account within a certain period. 18 For many of these types of complaints, companies and merchant partners justified revoking, canceling, or preventing consumer access to rewards through requirements and guidelines absent from their marketing materials and only found buried in their cardholder or rewards program agreements.

Consumers have also repeatedly alerted the CFPB about difficulties redeeming their rewards or inexplicably seeing their points disappear. These reported challenges include issues with customer service, 19 technical failures, 20 and dispute resolution, 21 all of which can be further compounded when neither the issuer nor its merchant partner accept responsibility and both refer consumers to the other. 22 Because of these issues, some consumers have seen their rewards disappear when being transferred or applied to a merchant partner, with little recourse to resolve such problems. 23

The CFPA prohibits any “covered person” or “service provider” from “committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with . . . the offering of a consumer financial product or service.”  24 An act or practice is unfair when: (1) it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers and (2) such injury is not outweighed by countervailing benefits to consumers or to competition. 25 Substantial injury includes monetary harm, and may be based on likely rather than actual injury. 26 In general, an injury is not reasonably avoidable if consumers cannot reasonably anticipate the injury, or when there is no way to avoid the injury even if it is anticipated. 27

Under the CFPA, a representation, omission, or practice is deceptive if it is likely to mislead a reasonable consumer and is material. 28 Representations, omissions, or practices are “material” if they “involve[ ] information that is important to consumers and, hence, likely to affect their choice of, or conduct regarding, a product.”  29 In assessing the meaning of a communication, the CFPB looks to its overall, net impression; in other words, the CFPB considers the entire advertisement, transaction, or course of dealing rather than evaluating statements in isolation. 30 A misrepresentation can be “an express or implied statement [that is] contrary to fact.”  31 It may also be deceptive, for example, when a seller partially discloses information about the nature of a product or service, but fails to disclose other material information. 32 Further, “[w]ritten disclosures or fine print may be insufficient to correct a misleading representation.”  33

Rewards programs are a feature common to many credit cards, and tend to both be prominently marketed by issuers and widely used by consumers. 34 Credit card rewards programs also play a major role in consumer's choices on which cards to apply for and use for any given transaction. 35

The CFPB is issuing this circular to underscore that the CFPA's prohibition on unfair or deceptive acts or practices applies to the design, marketing, and administration of credit card rewards programs. 36 Rewards program operators may violate this prohibition in a variety of circumstances regardless of whether they are taking actions consistent with rewards program terms. In particular, rewards program operators risk committing unfair or deceptive acts or practices when (1) rewards that consumers have already earned are devalued; (2) consumers' receipt of rewards is revoked, cancelled, or prevented based on buried or vague conditions; and (3) rewards points are deducted without consumers receiving the corresponding benefit of the rewards. These examples are illustrative and non-exhaustive.

As described further below, the CFPB emphasizes that covered persons that offer, provide, or operate credit card rewards programs may be liable for an unfair or deceptive act or practice where some of the conduct in question may be attributable to a third party or service provider, such as a merchant partner. 37

Rewards program operators may commit an unfair or deceptive act or practice when they materially reduce the overall value of rewards that consumers have already earned or purchased. Consumers make decisions on whether to open or use a credit card based on the explicit and implicit representations about the value of card benefits and rewards. For instance, consumers' reasonable expectations about the value of rewards may be informed by advertisements at account opening, as well as by redemption values of rewards communicated to consumers on or around the time the consumer makes decisions to purchase goods with the card and accrue rewards benefits. Furthermore, fine print disclaimers or contract terms stating that rewards program operators have the right to adjust rewards offerings often will not be sufficient to correct consumers' net impression about the expected value of rewards.

When rewards operators influence consumers' expectations about the value of rewards in their product or marketing efforts ( e.g., to support customer acquisition, retention, or increased purchase volume), but later make decisions to deflate the overall value of accrued rewards, they may have engaged in actions that resemble a traditional “bait-and-switch” scheme. 38 These activities may constitute unfair or deceptive acts or practices under the CFPA. 39

Enforcers investigating potentially unfair or deceptive acts or practice should consider a variety of different devaluation tactics by rewards program operators. Unfair or deceptive devaluations are easier to detect when the rewards program involves simple, fixed redemption rates with one retailer or merchant partner. But such schemes may be harder to detect where there are numerous potential rewards available or rewards program operators implement more complex program changes. For example, if a rewards program operator uses dynamic pricing for rewards redemptions, enforcers can examine whether the firm is unfairly or deceptively devaluing points over time by considering, for example, whether the dynamic prices in points have increased, in aggregate, relative to dynamic cash prices for the same products or services. Similarly, if a rewards program includes redemption options from multiple participating merchant partners, and the rewards program operator loses a major merchant partner or a major partner materially downgrades the service provided, enforcers can look to whether the rewards program operator is taking reasonable measures to generally maintain the value of rewards, such as by increasing points usable at other merchant partners, allowing customers to cash out points, replacing lost rewards with other rewards, or by other means. Additionally, when two firms merge, resulting in a conversion of one firm's customers into a new rewards program, enforcers can look at whether the resulting firm took actions to convert customers' points to the new system without a reduction in points value. 40

In any investigation into whether a rewards program operator has engaged in an unfair or deceptive devaluation scheme, enforcers are encouraged to collect and consider accounting or other metrics maintained by program operators or others regarding rewards values. For example, many companies maintain internal figures on the dollar value of outstanding rewards for accounting purposes, including an estimated cost-per-point or weighted average redemption cost. 41 If a firm's cost-per-point or weighted average redemption cost decreases over time, that could suggest a firm has engaged in a bait-and-switch or similar unfair or deceptive act or practice.

The CFPB emphasizes that covered persons that offer, provide, or operate credit card rewards programs may be liable for an unfair or deceptive act or practice even when the material devaluation of rewards could arguably be attributed to the actions of a third party. In other words, if a covered person that offers, provides, or operates a credit card rewards program makes explicit or implicit representations about, and thereby induces consumer expectations regarding, the value of the card benefits or rewards, and the value of those benefits or rewards is subsequently materially reduced by actions that may be attributable to the covered person's merchant partner, the covered person may be liable for an unfair or deceptive act or practice.

Rewards program operators also risk committing unfair or deceptive acts or practices when they revoke or cancel rewards, or prevent the award of rewards, based on buried or vague conditions. 42 Rewards programs have become increasingly complex, with lengthy terms and unintuitive restrictions that consumers may not be aware of as they use their credit cards day to day. These lengthy terms may use buried or vague conditions set by rewards program operators that are non-negotiable and may not be consistent with prominent promotional language advertising the rewards that consumers can earn. As noted above, consumer complaints received by the CFPB suggest that, despite descriptions in the fine print of rewards program terms, consumers often do not understand the basis of many rewards forfeitures or denials.

The following are illustrative examples of potentially unfair rewards program practices:

• Revoking or canceling rewards based on vague catch-all language in program terms, such as “gaming” or “abuse.” This can be especially problematic when those terms are also subject to the rewards program operator's discretion. 43

• Revoking previously earned rewards based on policies that tie revocation to actions that are not within the consumer's control and do not constitute fraud or misconduct by the consumer, like an issuer unilaterally closing an account. 44

• Promotional “sign-up” offers that are denied based on hidden conditions that consumers were not reasonably aware of, such as “churning” conditions that restrict how frequently a consumer can earn sign-up rewards, time periods to earn rewards that are effectively shortened by the hidden and unavoidable period of time needed to receive and activate a card, or promotional offers that are unavailable for applicants through certain channels.

These sorts of dark patterns and fine print will often constitute deceptive representations, omissions, or practices about material concerns, and thus violate the prohibition on deceptive practices. 45 In addition, denying or preventing rewards based on buried or vague terms could cause a substantial monetary injury in the form of lost rewards value and may be unfair. 46 These injuries may not be reasonably avoidable by consumers where conditions are buried or vague, and accordingly hinder consumers' ability to make a “free and informed choice.”  47 Specifically, consumers cannot reasonably avoid injuries where they are not “adequately informed” of key conditions or presented such information in a confusing way. 48 As noted above, rewards program operators typically promote most prominently the availability of rewards, even more so than other key credit card terms, such as APR or annual fees, while putting conditions around rewards in fine print. 49 Consumers may not understand the restrictive eligibility criteria buried in the fine print where program operators send marketing materials that target rewards promotions to the specific consumers. 50 Similarly, a consumer may be confused by the way a rewards program operator interprets vague catch-all language, such as terms restricting rewards based on impermissible “gaming” or “abuse,” when those interpretations conflict with prominent promotional language or other representations. 51 There are no countervailing benefits that outweigh the injury to consumers or competition of inducing consumers to use credit cards with vague or fine-print conditions that consumers cannot reasonably understand. 52

Rewards program operators can also commit unfair or deceptive acts or practices when their customers lose their points because redemption procedures do not function properly. In offering rewards programs, operators make representations to consumers about how rewards can be redeemed, often developing online interfaces for consumers to use to redeem rewards. A rewards program operator is accordingly responsible for administering the rewards program it offers, including coordinating with its merchant partners or vendors, so that consumers can redeem the rewards that they have earned and selected in accordance with the rewards program. 53

If systems failures result in consumers losing points when attempting to redeem, it may result in a deceptive practice because consumers would typically have a basis to reasonably believe they were purchasing products or services with their points, which would be false as a result of the failure. It would likely also be unfair because consumers would incur injury as a result of the loss of rewards, with no ability to avoid the harm and no countervailing benefits that outweigh the injury. Even if a rewards program operator ultimately refunds unredeemed points to a consumer, the consumer may be harmed by the consumer's inability to redeem points in the interim, 54 and often consumers end up expending significant time and resources trying to obtain the refund. 55 Consumers cannot reasonably avoid these harms as they do not have control over operators' rewards program administration, including procedures for redeeming points or converting them for use with co-brand or merchant partners.

Again, the CFPB emphasizes that covered persons that offer, provide, or operate credit card rewards programs may commit an unfair or deceptive act or practice when the loss of points due to failures of redemption procedures could arguably be attributed to a merchant partner or service provider. For instance, a covered person may be liable for an unfair or deceptive act or practice when a consumer attempts to transfer rewards points from the online portal of such covered person to the points portal of a merchant partner ( e.g., requests a “conversion” of credit card rewards points to points at a travel partner), but technical failures on the merchant partner's system result in the consumer losing the points.

Consumer Financial Protection Circulars are issued to all parties with authority to enforce Federal consumer financial law. The CFPB is the principal Federal regulator responsible for administering Federal consumer financial law, see 12 U.S.C. 5511, including the Consumer Financial Protection Act's prohibition on unfair, deceptive, and abusive acts or practices, 12 U.S.C. 5536(a)(1)(B), and 18 other “enumerated consumer laws,” 12 U.S.C. 5481(12). However, these laws are also enforced by State attorneys general and State regulators, 12 U.S.C. 5552, and prudential regulators including the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the National Credit Union Administration. See, e.g., 12 U.S.C. 5516(d), 5581(c)(2) (exclusive enforcement authority for banks and credit unions with $10 billion or less in assets). Some Federal consumer financial laws are also enforceable by other Federal agencies, including the Department of Justice and the Federal Trade Commission, the Farm Credit Administration, the Department of Transportation, and the Department of Agriculture. In addition, some of these laws provide for private enforcement.

Consumer Financial Protection Circulars are intended to promote consistency in approach across the various enforcement agencies and parties, pursuant to the CFPB's statutory objective to ensure Federal consumer financial law is enforced consistently. 12 U.S.C. 5511(b)(4).

Consumer Financial Protection Circulars are also intended to provide transparency to partner agencies regarding the CFPB's intended approach when cooperating in enforcement actions. See, e.g., 12 U.S.C. 5552(b) (consultation with CFPB by State attorneys general and regulators); 12 U.S.C. 5562(a) (joint investigatory work between CFPB and other agencies).

Consumer Financial Protection Circulars are general statements of policy under the Administrative Procedure Act. 5 U.S.C. 553(b). They provide background information about applicable law, articulate considerations relevant to the Bureau's exercise of its authorities, and, in the interest of maintaining consistency, advise other parties with authority to enforce Federal consumer financial law. They do not restrict the Bureau's exercise of its authorities, impose any legal requirements on external parties, or create or confer any rights on external parties that could be enforceable in any administrative or civil proceeding. The CFPB Director is instructing CFPB staff as described herein, and the CFPB will then make final decisions on individual matters based on an assessment of the factual record, applicable law, and factors relevant to prosecutorial discretion.

This rule implements the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), Public Law 101-410, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Act), Public Law 114-74, 129 Stat. 599, codified at 28 U.S.C. 2461 note. The FCPIAA and the 2015 Act require Federal agencies to adjust minimum and maximum civil penalty amounts to preserve their deterrent impact. The 2015 Act amended the formula and frequency of the adjustments. It required an initial catch-up adjustment in the form of an interim final rule, followed by annual adjustments of civil penalty amounts using a statutorily mandated formula. Section 4(b)(2) of the 2015 Act specifically directs that the annual adjustment be accomplished through final rule without notice and comment. This rule is effective immediately.

The Department's authorities over the specific civil penalty regulations being amended by this rule are provided in the preamble discussion below.

On November 2, 2015, the President signed into law the 2015 Act, which amended the FCPIAA, to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. The 2015 Act requires Federal agencies to: (1) adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rule (IFR); and (2) make subsequent annual adjustments.

The 2015 Act directed the Office of Management and Budget (OMB) to issue guidance on implementing the required annual adjustment no later than December 15 of each year. 1 OMB released this required guidance in OMB Memorandum M-25-02, available at https://www.whitehouse.gov/omb/information-for-agencies/memoranda/, which provides instructions on how to calculate the 2025 annual adjustment. To derive the 2025 adjustment, the Department must multiply the maximum or minimum penalty amount by the percent change between the October 2024 Consumer Price Index for All Urban Consumers (CPI-U) and the October 2023 CPI-U. In this case, as explained in OMB Memorandum M-25-02, the percent change between the October 2024 CPI-U and the October 2023 CPI-U is 1.02598. 2

On May 16, 2024, the President signed the FAA Reauthorization Act of 2024 (2024 Reauthorization Act) (Pub. L. 118-63) into law. Updates to the Department's civil penalties authority in the 2024 Reauthorization Act are reflected, as appropriate, in this final rule.

This final rule is being published without notice and comment and with an immediate effective date. The 2015 Act provides clear direction for how to adjust the civil penalties, and clearly states at section 4(b)(2) that this adjustment shall be made “notwithstanding section 553 of title 5, United States Code.” By operation of the 2015 Act, DOT must publish an annual adjustment by January 15 of every year, and the new levels take effect upon publication of the rule. Accordingly, DOT is publishing this final rule without prior notice and comment, and with an immediate effective date.

In 2016, OST and DOT's operating administrations with civil monetary penalties promulgated the “catch up” IFR required by the 2015 Act. All DOT operating administrations have finalized their “catch up” IFRs, and this rule makes the annual adjustment required by the 2015 Act.

The Department emphasizes that this rule adjusts penalties prospectively, and therefore the penalty adjustments made by this rule will apply only to violations that take place after this rule becomes effective. This rule also does not change previously assessed or enforced penalties that DOT is actively collecting or has collected.

OST's 2025 civil penalty adjustments are summarized in the chart below. Pursuant to section 507 of the 2024 Reauthorization Act, the Department increased the maximum civil penalty in 49 U.S.C. 46301(a)(1) to $75,000 for persons who are not individuals or small business concerns. 3 The maximum penalty for individuals and small business concerns was not changed by the 2024 Reauthorization Act.

Also, subsection 542(a) of the 2024 Reauthorization Act requires DOT to issue a notice of proposed rulemaking to develop requirements for minimum training standards related to stowing on an aircraft wheelchairs and scooters used by passengers with disabilities. Subsections (b) and (c) specify requirements of the rule and considerations that the Department must make in conducting the rulemaking. Subsection (d) requires issuance of a final rule, and subsection (e) authorizes DOT to assess a civil penalty in accordance with 49 U.S.C. 46301 against any air carrier or foreign air carrier who does not meet the requirements established in the rulemaking. In addition, subsection 543(a) of the 2024 Reauthorization Act requires DOT to issue a notice of proposed rulemaking to develop requirements for minimum training standards for airline personnel or contractors who assist wheelchair users who board or deplane using an aisle chair or other boarding device. Subsections (b) and (c) specify requirements of the rule and considerations that the Department must make in conducting the rulemaking. Subsection (d) requires issuance of a final rule, and subsection (e) authorizes DOT to assess a civil penalty in accordance with 49 U.S.C. 46301 against any air carrier or foreign air carrier who does not meet the requirements established in the rulemaking. DOT will conduct the rulemakings as required by the 2024 Reauthorization Act. Any penalties would subsequently be included and updated in the Department's annual civil penalties update rulemaking.

FAA's 2025 civil penalty adjustments are summarized in the chart below. Pursuant to section 507 of the 2024 Reauthorization Act, the Department increased the maximum civil penalty in 49 U.S.C. 46301(a)(1) to $75,000 for persons who are not individuals or small business concerns. The Department also added the civil penalty specified in section 770 of the 2024 Reauthorization Act for violations of 47 U.S.C. 47107(a)(22) related to the restriction or prohibition of the sale or self-fueling of any 100-octane low lead aviation gasoline, including any grant assurances made under that section. 4

NHTSA's 2025 civil penalty adjustments are summarized in the chart below.

FMCSA's civil penalties affected by this rule are all located in appendices A and B to 49 CFR part 386. The 2025 adjustments to these civil penalties are summarized in the chart below. Note that in the regulatory text for the 2023 update, the penalty for violations of Appendix A IV (i) Out-of-service order (conducting operations during suspension or revocation for failure to pay penalties) and the penalty for Appendix B (a)(3) Non-recordkeeping violations were incorrectly stated as $18,758. The correct dollar amount, as stated in the preamble of the 2023 update, was $18,759. The error in the regulatory text has been corrected in this 2024 update, reflecting a penalty for this 2025 update of $19,246.

FRA's 2025 civil penalty adjustments are summarized in the chart below.

PHMSA's civil penalties affected by this rule for hazardous materials violations are located in 49 CFR 107.329, appendix A to subpart D of 49 CFR part 107, and § 171.1. The civil penalties affected by this rule for pipeline safety violations are located in § 190.223. PHMSA's 2025 civil penalty adjustments are summarized in the chart below.