The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended TILA to add special appraisal requirements for “higher-risk mortgages.”  1 In January 2013, the OCC, the Board, the Bureau, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Federal Housing Finance Agency (FHFA) (collectively, the Agencies) jointly issued a final rule implementing these requirements and adopted the term “higher-priced mortgage loan” (HPML) instead of “higher-risk mortgage” (January 2013 Final Rule). 2 In July 2013, the Agencies proposed additional exemptions from the January 2013 Final Rule. 3 In December 2013, the Agencies issued a supplemental final rule with additional exemptions from the January 2013 Final Rule (December 2013 Supplemental Final Rule). 4 Among other exemptions, the Agencies adopted an exemption from the new HPML appraisal rules for transactions of $25,000 or less, to be adjusted annually for inflation.

The OCC's, Board's, and Bureau's versions of the January 2013 Final Rule and December 2013 Supplemental Final Rule and corresponding official interpretations are substantively identical. The FDIC, NCUA, and FHFA adopted the Bureau's version of the regulations under the January 2013 Final Rule and December 2013 Supplemental Final Rule. 5

The OCC's, Board's, and Bureau's regulations, 6 and their accompanying official interpretations, 7 provide that the exemption threshold for smaller loans will be adjusted effective January 1 of each year based on any annual percentage increase in the CPI-W that was in effect on the preceding June 1. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. If there is no annual percentage increase in the CPI-W, the OCC, the Board, and the Bureau will not adjust the threshold amounts from the prior year. 8

On November 30, 2016, the OCC, the Board, and the Bureau published a final rule in the Federal Register to memorialize the calculation method used by the OCC, the Board, and the Bureau each year to adjust the exemption threshold to ensure that the values for the exemption threshold keep pace with the CPI-W (HPML Small Dollar Adjustment Calculation Rule). 9 The HPML Small Dollar Adjustment Calculation Rule memorialized the policy that, if there is no annual percentage increase in the CPI-W, the OCC, Board, and Bureau will not adjust the exemption threshold from the prior year. The HPML Small Dollar Adjustment Calculation Rule also provided that, in years following a year in which the exemption threshold was not adjusted because there was a decrease in the CPI-W from the previous year, the threshold is calculated by applying the annual percentage change in the CPI-W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI-W had been taken into account. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly; if the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted, after rounding.

Effective January 1, 2026, the exemption threshold amount is increased from $33,500 to $34,200. This amount is based on the CPI-W in effect on June 1, 2025, which was reported on May 13, 2025 (based on April 2025 data). 10 The CPI-W is a subset of the CPI-U index (based on all urban consumers) and represents approximately 30 percent of the U.S. population. The CPI-W reported on May 13, 2025, reflects a 2.1 percent increase in the CPI-W from April 2024 to April 2025. Accordingly, the 2.1 percent increase in the CPI-W from April 2024 to April 2025 results in an exemption threshold amount of $34,200, after rounding. The OCC, the Board, and the Bureau are revising the official interpretations to their respective regulations to add new comments as follows:

• Comment 203(b)(2)-3.xiii to 12 CFR part 34, appendix C to subpart G (OCC);

• Comment 43(b)(2)-3.xiii to supplement I of 12 CFR part 226 (Board); and

• Comment 35(c)(2)(ii)-3.xiii to supplement I of 12 CFR part 1026 (Bureau).

These new comments state that, from January 1, 2026, through December 31, 2026, the threshold amount is $34,200. These revisions are effective January 1, 2026.

Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the agency finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 11 The amendments in this rule are technical and apply the method previously memorialized in the December 2013 Supplemental Final Rule and the HPML Small Dollar Adjustment Calculation Rule. For these reasons, the OCC, the Board, and the Bureau have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendments are adopted in final form.

Section 553(d) of the APA generally requires publication of a final rule not less than 30 days before its effective date, except in the case of (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule. 12 At a minimum, the OCC, the Board, and the Bureau have determined that the amendments fall under the third exception to section 553(d). The OCC, the Board, and the Bureau find that there is good cause to make the amendments effective on January 1, 2026. The amendments in this final rule are technical and non-discretionary, and apply the method previously established in the regulations for determining adjustments to the threshold.

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required. 13 As noted previously, the OCC, the Board, and the Bureau have determined that it is unnecessary to publish a general notice of proposed rulemaking for this final rule. Accordingly, the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply.

The OCC, the Board, and the Bureau reviewed this final rule in accordance with the Paperwork Reduction Act of 1995. 14 The OCC, the Board, and the Bureau have determined that this rule does not create any new information collections or substantially revise any existing collections.

The OCC analyzes proposed rules for the factors listed in section 202 of the Unfunded Mandates Reform Act of 1995, before promulgating a final rule for which a general notice of proposed rulemaking was published. 15 As discussed above, the OCC has determined that the publication of a general notice of proposed rulemaking is unnecessary.

The Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB) has determined that this action is not a “significant regulatory action” under Executive Order 12866, as amended.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Bureau will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to the rule taking effect. The Office of Information and Regulatory Affairs has designated this rule as not a “major rule” as defined by 5 U.S.C. 804(2).

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments using a method listed under ADDRESSES . Include “Docket No. FAA-2025-5385; Project Identifier MCAI-2025-01589-R” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

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

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

EASA, which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2025-0217, dated October 1, 2025 (EASA AD 2025-0217) (also referred to as the MCAI), to correct an unsafe condition on AHD Model BO105 A, BO105 C, BO105 D, BO105 S, BO105 LS A-3 (including helicopters modified in accordance with EASA Supplemental Type Certificate (STC) 10039633), or previously by LBA STC EMZ NR. 0654/3058 (so called “Superlifter”), MBB-BK 117 A-3, MBB-BK 117 A-4, MBB-BK 117 B-1, MBB-BK 117 B-2, and MBB-BK 117 C-1 helicopters. The MCAI states that there was a report of a crack on the fork lever of a Model MBB-BK117 helicopter. The MCAI further states that due to similarity of design, the same unsafe condition could also affect Model BO105 helicopters. EASA considers this MCAI an interim action and further action may follow.

The FAA is issuing this AD to detect and address any cracks on the fork lever, which could result in failure of the fork lever, and consequent loss of control of the helicopter.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2025-5385.

The FAA reviewed EASA AD 2025-0217, which specifies procedures for inspecting certain part-numbered fork levers for cracks and inspecting the mixing lever assembly for certain conditions (missing components, damage, or corrosion). Based on the inspection results, EASA AD 2025-0217 specifies procedures for replacing affected parts and reporting the inspection results to the manufacturer. Additionally, EASA AD 2025-0217 prohibits installing an affected fork lever unless certain requirements are met.

This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

These products have been approved by the civil aviation authority (CAA) of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this AD after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.

This AD requires accomplishing the actions specified in EASA AD 2025-0217, described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD. See “Differences Between this AD and the MCAI and Referenced Material” for a discussion of the general differences included in this AD.

The MCAI applies to AHD Model BO105 D helicopters, whereas this AD does not because that model does not have an FAA type certificate.

Where the material referenced in EASA AD 2025-0217 does not specify instructions if there are any doubts on the result from the visual inspection, create a Technical Event (TE) on WebTEK for further instructions, this AD requires, before further flight, performing a borescope inspection on the fork lever if there is a line having no visible gap or misalignment.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some CAA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, EASA AD 2025-0217 is incorporated by reference in this AD. This AD requires compliance with EASA AD 2025-0217 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in EASA AD 2025-0217 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2025-0217. Material required by EASA AD 2025-0217 for compliance will be available at regulations.gov under Docket No. FAA-2025-5385 after this AD is published.

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

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because the affected component is part of an assembly that is critical to the flight control of a helicopter, such that if a failure occurs in the affected part, loss of control of a helicopter could occur. The FAA has no information pertaining to the extent of fatigue of the affected component that may currently exist in helicopters or how quickly the condition may propagate to failure. Thus, the affected helicopters must be inspected no later than 30 days with higher usage helicopters in a shorter period of time if utilized more than 110 hours time-in-service in 30 days. This compliance time is shorter than the time necessary for the public to comment and for publication of the final rule. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b).

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

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

The FAA considers that this AD is an interim action. This unsafe condition is still under investigation by the manufacturer and, depending on the results of that investigation, the FAA may consider further rulemaking action.

The FAA estimates that this AD affects 40 helicopters of U.S. registry.

The FAA estimates the following costs to comply with this AD:

The FAA estimates the following costs to do any repairs or replacements that would be required based on the results of the inspection. The agency has no way of determining the number of helicopters that might need these repairs or replacements:

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska.

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

The FAA published a final rule in the Federal Register (90 FR 54228; November 26, 2025), which modified the Class E airspace area extending upward from 700 feet or more above the surface and Class E airspace area designated as an extension to a Class D or Class E surface area at KOA. Subsequent to publication, and following a recent survey, the FAA amended the geographic coordinates for KOA. Accordingly, the updated geographic location will now serve as the point of origin from which the Class E airspace area boundaries are derived, no longer requiring reference to the Point in Space Alpha fix that appeared in the KOA's airspace legal description in the final rule. The previous correction failed to fully implement these corrections. This action addresses the remaining corrections needed.

Accordingly, pursuant to the authority delegated to me, FAA Docket No. 2025-1187, published in the Federal Register on November 26, 2025 (90 FR 54228), FR Doc. 2025-21291, is corrected as follows:

On June 24, 2020, the Commission published in the Federal Register final interpretive guidance concerning the term “actual delivery” as set forth in the Commodity Exchange Act (“CEA”)  1 pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). 2 Specifically, the final interpretive guidance was issued to inform the public of the Commission's views when determining whether actual delivery has occurred in the context of retail commodity transactions in certain types of digital assets that serve as a medium of exchange, colloquially known as “virtual currencies” (the “Final VC Actual Delivery Guidance”). 3

The Commission has determined to withdraw the Final VC Actual Delivery Guidance in order to reevaluate such guidance in light of further developments during the past five years in the means and methods deployed in the spot market for the purchase and sale of virtual currencies and the derivatives markets connected to such spot market. The Commission has further determined that withdrawal is appropriate based on the findings and recommendations for the CFTC contained in the report of the President's Working Group on Digital Asset Markets, Strengthening American Leadership in Digital Financial Technology, 4 established by Executive Order 14178. 5 After careful review, the Commission believes that the Final VC Actual Delivery Guidance is likely outdated and thus provides limited value to market participants and, further, may conflict with the ongoing work of the Commission necessary to implement the President's Working Group's recommendations.

The Office of Management and Budget has determined that this action is not a significant regulatory action as defined in Executive Order 12866, as amended, and therefore it was not subject to Executive Order 12866 review.

Pursuant to the Congressional Review Act, 6 the Office of Information and Regulatory Affairs has designated this rule as not a “major rule,” as defined by 5 U.S.C. 804(2).

On this matter, Acting Chairman Pham voted in the affirmative. No Commissioner voted in the negative.

In this order, the Drug Enforcement Administration (DEA) extends the temporary scheduling of 4F-MDMB-BUTICA, ADB-4en-PINACA, 5F-EDMB-PICA, and MMB-FUBICA in schedule I of the Controlled Substances Act (CSA), including their salts, isomers, and salts of isomers, whenever the existence of such salts, isomers, and salts of isomers is possible, within the specific chemical designation:

• 4F-MDMB-BUTICA (other names: 4F-MDMB-BICA; methyl 2-[[1-(4-fluorobutyl)indole-3-carbonyl]amino]-3,3-dimethyl-butanoate)

• ADB-4en-PINACA (other name: N -(1-Amino-3,3-dimethyl-1-oxobutan-2-yl)-1-(pent-4-en-1-yl)-1 H -indazole-3-carboxamide)

• 5F-EDMB-PICA (other names: 5F-EDMB-2201; ethyl 2-[[1-(5-fluoropentyl)indole-3-carbonyl]amino]-3,3-dimethyl-butanoate)

• MMB-FUBICA (other name: methyl 2-(1-(4-fluorobenzyl)-1 H -indole-3-carboxamido)-3-methyl butanoate)

On December 12, 2023, pursuant to 21 U.S.C. 811(h)(1), DEA published an order in the Federal Register temporarily placing 4F-MDMB-BUTICA, ADB-4en-PINACA, 5F-EDMB-PICA, and MMB-FUBICA in schedule I of the CSA based upon a finding that these substances posed an imminent hazard to the public safety. 1 That temporary order was effective upon the date of publication. Pursuant to 21 U.S.C. 811(h)(2), the temporary scheduling of a substance expires at the end of two years from the date of issuance of the scheduling order, except that DEA may extend temporary scheduling of that substance for up to one year during the pendency of proceedings under 21 U.S.C. 811(a)(1) with the respect to the temporarily controlled substance. In this instance, the temporary scheduling of 4F-MDMB-BUTICA, ADB-4en-PINACA, 5F-EDMB-PICA, and MMB-FUBICA expires on December 12, 2025, unless extended.

Proceedings for the issuance, amendment, or repeal of the scheduling of any drug or other substance under 21 U.S.C. 811(a) may be initiated by the Attorney General (delegated to the Administrator of DEA pursuant to 28 CFR 0.100) on her own motion, at the request of the Secretary of the Department of Health and Human Services (HHS), or on the petition of any interested party. 2 The Administrator of DEA, on his own motion pursuant to 21 U.S.C. 811(a), has initiated proceedings under 21 U.S.C. 811(a)(1) to permanently schedule 4F-MDMB-BUTICA, ADB-4en-PINACA, 5F-EDMB-PICA, and MMB-FUBICA. DEA is publishing a notice of proposed rulemaking elsewhere in this issue of the Federal Register for the permanent placement of 4F-MDMB-BUTICA, ADB-4en-PINACA, 5F-EDMB-PICA, and MMB-FUBICA in schedule I. If that proposed rule is finalized, DEA will publish a final rule in the Federal Register to make permanent the schedule I status of these substances.

Pursuant to 21 U.S.C. 811(h)(2), the Administrator orders that the temporary scheduling of 4F-MDMB-BUTICA, ADB-4en-PINACA, 5F-EDMB-PICA, and MMB-FUBICA and their salts, isomers, and salts of isomers whenever the existence of such salts, isomers, and salts of isomers is possible, be extended for one year, or until the permanent scheduling proceeding is completed, whichever occurs first.

The CSA provides for an expedited temporary scheduling action where such action is necessary to avoid an imminent hazard to the public safety. 3 This provision of the CSA allows the Attorney General, by order, to temporarily place substances in schedule I. 4 The same subsection also provides that the temporary scheduling of a substance shall expire at the end of two years from the date of the issuance of the order scheduling such substance, except that the Attorney General may, during the pendency of proceedings to permanently schedule the substance under 21 U.S.C. 811(a)(1), extend the temporary scheduling for up to one year.

To the extent that 21 U.S.C. 811(h) directs that temporary scheduling actions be issued by order and sets forth the procedures by which such orders are to be issued and extended, the notice and comment requirements of the Administrative Procedure Act (APA) at 5 U.S.C. 553, do not apply to this extension of the temporary scheduling action. The APA expressly differentiates between orders and rules, as it defines an “order” to mean a “final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making. ”  5 This contrasts with permanent scheduling actions, which are subject to formal rulemaking procedures done “on the record after opportunity for a hearing,” and final decisions that conclude the scheduling process and are subject to judicial review. 6 The specific language chosen by Congress indicates an intention for DEA to proceed through the issuance of an order instead of proceeding by rulemaking. Given that Congress specifically requires the Attorney General to follow rulemaking procedures for other kinds of scheduling actions, 7 it is noteworthy that, in subsection 811(h), Congress authorized the issuance of temporary scheduling actions by order rather than by rule.

In the alternative, even if this action were subject to 5 U.S.C. 553, the Administrator finds that there is good cause under 5 U.S.C. 553(b)(B) and (d)(3) to forgo the notice-and-comment requirements and the delayed effective date requirements of such section, as any further delays in the process for extending the temporary scheduling order would be impracticable and contrary to the public interest in view of the manifest urgency to avoid an imminent hazard to the public safety that these substances would present if scheduling expired, for the reasons expressed in the temporary scheduling order. 8

Further, DEA believes that this order extending the temporary scheduling action is not a “rule” as defined by 5 U.S.C. 601(2) and, accordingly, is not subject to the requirements of the Regulatory Flexibility Act (RFA). The requirements for the preparation of an initial regulatory flexibility analysis in 5 U.S.C. 603(a) are not applicable where, as here, DEA is not required by the APA at 5 U.S.C. 553 or any other law to publish a general notice of proposed rulemaking. Therefore, in this instance, since DEA believes this temporary scheduling action is not a “rule,” it is not subject to the requirements of the RFA when issuing this temporary action.

In addition, in accordance with the principles of Executive Orders (E.O.) 12866 and 13563, this action is not a significant regulatory action. E.O. 12866 directs 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). E.O. 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in E.O. 12866. E.O. 12866, sec. 3(f), provides the definition of a “significant regulatory action,” requiring review by the Office of Management and Budget. Because this is not a rulemaking action, this is not a significant regulatory action as defined in subsection 3(f) of E.O. 12866. DEA scheduling actions are not subject to either E.O. 14192, Unleashing Prosperity Through Deregulation, or E.O. 14294, Fighting Overcriminalization in Federal Regulations.

This action will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with E.O. 13132 (Federalism), it is determined that this action does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

As noted above, this action is an order, not a rule. Accordingly, the Congressional Review Act (CRA) is inapplicable, as it applies only to rules. However, if this were a rule, pursuant to the CRA, “any rule for which an agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, shall take effect at such time as the federal agency promulgating the rule determines.”  9 Nonetheless, DEA has submitted a copy of this temporary order to both Houses of Congress and to the Comptroller General, although such filing is not required under the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act), 5 U.S.C. 801-808 because, as noted above, this action is an order, not a rule.

It is in the public interest to maintain the temporary placement of 4F-MDMB-BUTICA, ADB-4en-PINACA, 5F-EDMB-PICA, and MMB-FUBICA, including their salts, isomers, and salts of isomers, in schedule I because they pose a public health risk. The temporary scheduling action was taken pursuant to 21 U.S.C. 811(h), which is specifically designed to enable DEA to act in an expeditious manner to avoid an imminent hazard to the public safety. Under 21 U.S.C. 811(h), temporary scheduling orders are not subject to notice and comment rulemaking procedures. For the same reasons that underlie 21 U.S.C. 811(h), that is, the need to keep these four substances in schedule I because they pose an imminent hazard to public safety, it would be contrary to the public interest to delay implementation of this extension of the temporary scheduling order. Further, public notice and comment is impracticable in the amount of time remaining before expiration of the temporary scheduling order and considering the manifest urgency to avoid an imminent hazard to the public safety that these substances would present if scheduling expired, for the reasons expressed in the temporary scheduling order. Therefore, in accordance with section 808(2) of the CRA, this order extending the temporary scheduling order for four synthetic cannabinoids, currently covered under the temporary order, shall take effect immediately upon its publication.

This document of the Drug Enforcement Administration was signed on December 10, 2025, by Administrator Terrance C. Cole. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .

This document contains amendments to provisions of 26 CFR part 1 (Income Tax Regulations) under section 6417 of the Internal Revenue Code (Code) and 26 CFR part 301 (Procedure and Administration Regulations) under section 7701 of the Code that address the Federal tax treatment of certain Tribal entities wholly owned by one or more Indian Tribal governments  1 (final regulations).

Section 6417(h) provides an express delegation of authority to the Secretary of the Treasury or the Secretary's delegate (Secretary) relating to elective payment elections under section 6417 (section 6417 elections), stating, “[t]he Secretary shall issue such regulations or other guidance as may be necessary to carry out the purposes of this section, including guidance to ensure that the amount of the payment or deemed payment made under this section is commensurate with the amount of the credit that would be otherwise allowable (determined without regard to section 38(c)).”

Section 7701(a)(40) provides an express delegation of authority to the Secretary related to identifying Indian Tribal governments for Federal tax purposes, stating, “[t]he term `Indian tribal government' means the governing body of any tribe, band, community, village, or group of Indians, or (if applicable) Alaska Natives, which is determined by the Secretary, after consultation with the Secretary of the Interior, to exercise governmental functions.”

Finally, section 7805(a) of the Code provides an express delegation of authority to the Secretary to “prescribe all needful rules and regulations for the enforcement of [the Code], including all rules and regulations as may be necessary by reason of any alteration of law in relation to internal revenue.”

The Federal government has long recognized the unique aspects of Tribal sovereignty and Tribal sovereign immunity. Tribes themselves are not subject to Federal income tax under the Code. 2 IRS guidance on the issue in the 1960s raised questions about the extent to which Tribal corporations incorporated under section 17 of the Indian Reorganization Act of 1934 (IRA), as amended, 25 U.S.C. 5124 (section 17 corporations) or under section 3 of the Oklahoma Indian Welfare Act, as amended, 25 U.S.C. 5203 (section 3 corporations) should share the Tribe's Federal income tax status. In response, the IRS published further guidance and issued proposed regulations in 1996 on the treatment of section 17 corporations and section 3 corporations for Federal tax purposes. See the notice of proposed rulemaking, Simplification of Entity Classification Rules (PS-43-95), published in the Federal Register (61 FR 21989) on May 13, 1996 (explaining the basis for the proposed rule later adopted in § 301.7701-1(a)(3)).

On December 18, 1996, the Department of the Treasury (Treasury Department) and the IRS published final regulations (TD 8697) in the Federal Register (61 FR 66584) under section 7701, known as the entity classification regulations. These regulations (at § 301.7701-1(a)(3)) make clear that entities formed under local laws are not always recognized as separate entities for Federal tax purposes. For example, an organization wholly owned by a State is not recognized as a separate entity for Federal tax purposes if it is an integral part of the State. Similarly, these regulations (until their amendment by this Treasury decision) provided that section 17 corporations and section 3 corporations are not recognized as separate entities for Federal tax purposes. These regulations, however, did not specifically address whether an entity organized or incorporated under Tribal law and wholly owned by a Tribe (that is, a wholly owned Tribal entity) is recognized as a separate entity for Federal tax purposes.

The preamble to TD 8697 stated that the IRS received a number of comments asking for clarification of the tax treatment of wholly owned Tribal entities. 61 FR 66584. The preamble also indicated that the Treasury Department and the IRS continued to study the issue and would issue additional guidance, if necessary. Id. at 66585-86.

Over the past several decades, Tribes have sought clarity concerning the Federal tax status of wholly owned Tribal entities, in part to provide certainty for Tribal economic development and to support the generation of revenue for Indian Tribal governments. To obtain Tribal input on the issue before publishing the proposed regulations, and in accordance with Executive Order 13175 (November 6, 2000), “Consultation and Coordination with Indian Tribal Governments,” and the Treasury Department's Tribal Consultation Policy (80 FR 57434, September 23, 2015), superseded by Treasury Order 112-04 (November 22, 2023), the Treasury Department and the IRS held Tribal consultations on the issue on June 21 and June 22, 2023, October 8 and 10, 2019, and a listening session on December 3, 2019.

During Tribal consultations, Tribes have explained that they view incorporating corporations under Tribal law as an exercise of their inherent sovereign authority to generate governmental revenue, self-govern the use of that revenue according to their own laws, and self-determine the use of that revenue for their citizenry. Tribes highlighted that incorporating corporations under Tribal law enables Tribes to create entities that meet their emerging revenue opportunities, establish guidelines for the operation of these entities that are culturally appropriate and protect Tribal assets, and dissolve them when they are no longer needed. Tribes also highlighted that clarifying the status of corporations incorporated under Tribal law is consistent with recent Federal policy to promote Tribal sovereignty, self-governance, and self-determination in economic development activities.

In contrast, Tribes highlighted that section 17 and section 3 corporations are not always sufficient to meet their needs. The incorporation process for these entities is a lengthy multi-step Federal process that subjects Tribal authority to Federal oversight and approval and results in increased administrative costs to Tribes. In addition, an act of Congress is required to dissolve the chartered entity.

This issue has taken on increased salience in recent years with the enactment of laws that extend greater access to capital and new economic opportunities to certain governments (including Indian Tribal governments), tax-exempt organizations, and other entities. Tribes have reiterated their requests for guidance through meetings of the Treasury Tribal Advisory Committee and other Tribal consultations.

In light of the considerations of Tribal sovereignty and self-determination described previously, on October 9, 2024, the Treasury Department and the IRS published a notice of proposed rulemaking (REG-113628-21) in the Federal Register (89 FR 81871), which provided proposed guidance under sections 6417 and 7701 (proposed regulations). See the preamble to the proposed regulations for additional information regarding the developments leading to this rulemaking.

The proposed regulations proposed to amend the existing section 7701 regulations to make clear that entities wholly owned by Tribes and organized, incorporated, or authorized under the laws of the Tribes that own them generally are not recognized as separate entities for Federal tax purposes. As has been the case with Tribes and section 17 corporations or section 3 corporations, the proposed regulations proposed that an entity wholly owned by one or more Indian Tribal governments, within the meaning of section 7701(a)(40), that is organized or incorporated under the laws of the Tribe or Tribes that own the entity, or organized or incorporated under the laws of one or more of the owning Tribes and authorized by all of the other owning Tribes (wholly owned Tribal entity), would not be recognized as a separate entity for Federal tax purposes (and thus not subject to Federal income tax). The use of the term “organized” includes the creation of Tribal entities other than corporations. For instance, a single member limited liability company (LLC) organized under the laws of the Tribe that owns the LLC would be a wholly owned Tribal entity covered by the proposed regulations. Accordingly, such wholly owned entities generally would be viewed as one and the same as the Tribes that own them for Federal income tax purposes and therefore are not subject to Federal income tax.

In addition, the proposed regulations proposed to amend the existing section 6417 regulations to provide that wholly owned Tribal entities, section 17 corporations, and section 3 corporations are treated, for purposes of making section 6417 elections (including determining eligibility for and the consequences of such elections), as instrumentalities of the Indian Tribal government(s) that wholly own them. As a result, the wholly owned Tribal entity itself, rather than the Indian Tribal government(s) owning the entity, would be required to make a section 6417 election for an applicable credit determined with respect to any applicable credit property held directly by the wholly owned Tribal entity.

The proposed regulations recognized that Tribal law is established by each individual Tribe. The notice of proposed rulemaking stated that, where multiple Tribes work together to establish an entity that is owned by more than one Tribe, each Tribe would need to provide for the entity under its own laws.

The notice of proposed rulemaking noted that, as is the case for determining the ownership of all corporations (including a corporation wholly owned by a State or other government), the determination of whether an outside investor (a person other than a Tribe) holds equity in a Tribal entity, such that it would fail to be wholly owned by one or more Indian Tribal governments for Federal tax purposes, would take into account principles of Federal tax law, such as the substance over form doctrine, debt versus equity analyses, and the economic substance doctrine.

Under the proposed regulations, an entity could satisfy the wholly owned requirement through a multi-Tribe ownership structure, so long as the entity is organized or incorporated under each Tribe's laws. Proposed § 301.7701-1(a)(4)(iii)(D) ( Example 4 ) illustrates an example of the organizational structure of such an entity.

The proposed regulations did not address an entity formed under Tribal law that was not also wholly owned by one or more Indian Tribal governments for Federal tax purposes.

Under 26 CFR 1.6417-1(f) as of April 1, 2025, section 17 corporations and section 3 corporations were treated as “disregarded entities” for purposes of section 6417, and the applicable entity owner of a disregarded entity that directly holds applicable credit property was required to make a section 6417 election for applicable credits determined with respect to such property pursuant to § 1.6417-2(a)(1)(ii). Under the proposed regulations, for purposes of making a section 6417 election (including determining eligibility for and the consequences of such election), entities described in proposed § 301.7701-1(a)(4)(i) (that is, section 17 corporations, section 3 corporations, and wholly owned Tribal entities), would be treated as instrumentalities of Indian Tribal governments. This change would mean that an entity described in proposed § 301.7701-1(a)(4)(i) that directly owns applicable credit property, rather than the entity's owner or owners, would make the section 6417 election. Such an entity generally would do so by filing a Form 990-T, Exempt Organization Business Income Tax Return, as described in § 1.6417-1(b)(2), using its own name and employer identification number.

Given that proposed § 301.7701-1(a)(4)(i) generally provided that an entity owned by multiple Tribes is not recognized as a separate entity from those Tribes for Federal income tax purposes, treating the entity as a “disregarded entity” for section 6417 purposes would have required each of the entity's owners to make a section 6417 election with respect to an applicable credit determined with respect to an applicable credit property owned directly by the entity. That approach would have been administratively burdensome and complex for the Tribes that own the entity as well as for the IRS. Given the need for coordination among these Tribes in making consistent tax filings, that approach could also have resulted in cases in which the amount of the total payments or deemed payments claimed under section 6417 might not be commensurate with the amount of the underlying credit. In addition, even for an entity owned by a single Tribe, the entity directly owning the applicable credit property may be better positioned to fulfill the pre-filing registration and other requirements to make the section 6417 election. Accordingly, the proposed regulations were intended to simplify the filing obligations for Tribes and their wholly owned entities and ensure that the amount of any payment or deemed payment made under section 6417 will be commensurate with the amount of the credit that would be otherwise allowable.

In general, the determination of whether an entity is an agency or instrumentality is analyzed on a facts and circumstances basis. In determining whether an entity is an agency or instrumentality for Federal tax purposes, Federal courts have applied the six-factor test in Rev. Rul. 57-128, 1957-1 C.B. 311, which generally provides guidance on whether an entity is an instrumentality for purposes of the exemptions from employment taxes under sections 3121(b)(7) and 3306(c)(7) of the Code. See, e.g., Rose v. Long Island Railroad Pension Plan, 828 F.2d 910, 918 (2d Cir. 1987), cert. denied, 485 U.S. 936 (1988); Berini v. Federal Reserve Bank of St. Louis, Eighth District, 37 Employee Benefits Cas. 1072, 420 F. Supp. 2d 1021 (E.D. Mo. 2005).

The special rule in proposed § 1.6417-1(c)(7) is informed in part by administrative considerations and would be issued under the express delegation of authority in section 6417(h) to promulgate rules that carry out the purposes of section 6417 and ensure that the amount of the payment or deemed payment made thereunder is commensurate with the amount of the underlying credit. No inferences should be drawn from the instrumentality treatment in proposed § 1.6417-1(c)(7) as to whether any particular entity is or is not an instrumentality for any other Federal tax purpose.

The Treasury Department and the IRS conducted Tribal consultations on December 16-18, 2024, to obtain additional input on questions involving the proposed regulations. The content of these consultations is published in a Tribal consultation summary available at: https://home.treasury.gov/system/files/136/Tax-Status-of-Tribally-Chartered-Corporations-Consultation-Summary.pdf. In addition, the Treasury Department and the IRS received written comments in response to the proposed regulations. A public hearing on the proposed regulations was held on January 17, 2025. Copies of written comments and the list of speakers at the public hearing are available at https://www.regulations.gov or upon request.

After full consideration of all comments received on the proposed regulations, including through the Tribal consultations, and the testimony presented at the public hearing, this Treasury decision adopts the proposed regulations as final regulations with clarifying changes and modifications as described in this Summary of Comments and Explanation of Revisions. Overall, commenters largely supported the proposed regulations' recognition of a Tribe's inherent authority to create businesses under Tribal law and that wholly owned Tribal entities should have parity with federally chartered Tribal corporations.

Section I of this Summary of Comments and Explanation of Revisions addresses the comments and revisions applicable to § 301.7701-1. Section II of this Summary of Comments and Explanation of Revisions addresses the comments and revisions applicable to § 1.6417-1.

Unless otherwise indicated in this Summary of Comments and Explanation of Revisions, provisions of the proposed regulations for which no comments were received are adopted without substantive change. Comments that merely summarize the proposed regulations, recommend statutory revisions to section 7701, section 6417, or other statutes, address issues that are outside the scope of this rulemaking (such as proposed changes to other guidance), or recommend changes to IRS forms are beyond the scope of these regulations and are not adopted. In addition, comments that are related to executive orders and prior guidance described in the preamble to the proposed regulations are beyond the scope of these regulations and are not adopted. The final regulations include non-substantive modifications, including modifications that promote consistency across rules and examples, rearrange provisions, and improve the overall clarity of the guidance. Such non-substantive modifications are not addressed in this Summary of Comments and Explanation of Revisions.

The final regulations under section 7701 provide that a wholly owned Tribal entity (including a single member LLC organized under the laws of the Tribe that owns it) is not recognized as a separate entity for Federal income tax purposes, but is recognized as separate and treated as a corporation for Federal employment tax purposes and certain Federal excise tax purposes. The final regulations also provide that section 17 corporations and section 3 corporations are recognized as entities separate from the Tribe(s) that own these entities for Federal employment and certain Federal excise tax purposes.

The majority of commenters expressed support for the recognition that Tribes may organize or incorporate an inter-Tribal entity serving multiple Tribes. However, some commenters stated that it is impractical and unworkable to require that an inter-Tribal entity wholly owned by more than one Indian Tribal government (within the meaning of section 7701(a)(40) of the Code) be organized or incorporated under the laws of each of the Indian Tribal governments with an ownership stake in the entity. Commenters stated that the rules should provide that an inter-Tribal entity with a single charter authorized by each Tribe's governing body, or other body or official acting pursuant to authority delegated by the Tribe's governing body, shares the tax status of the Tribe(s) that own it. These commenters recommended that, although authorized under each Tribe's legislative or administrative process, the inter-Tribal entity charter should allow for a choice of law or forum clause that subjects the inter-Tribal entity to the corporate or limited liability company laws of just a single Tribe. To clarify the proposed regulations, the same commenters requested amendments to the language of the regulations to require that the inter-Tribal entity be authorized under each owner Tribe's law and to allow Tribes to adopt their choice of law and forum. Additionally, a commenter requested the regulations be amended to allow Tribes to enter into co-ownership arrangements with respect to existing entities previously organized and incorporated under the laws of one or more Tribes.

Other commenters suggested that entities owned solely by multiple Tribal governments should be disregarded where (a) the entity is formed under the laws of one of the member Tribes, (b) the Tribe's laws permit ownership by the other Tribes, and (c) each owner Tribe agrees to such outcome by resolution or other suitable document.

Based on these comments, the final regulations provide that an inter-Tribal entity is not recognized as a separate entity when organized or incorporated exclusively under the laws of one or more of the Indian Tribal governments that own it. The final regulations also add a sentence that clarifies that whether an entity is organized or incorporated under the laws of one or more Indian Tribal government(s) is determined without regard to any specified choice of law or forum. These changes are intended to minimize the administrative burden on Tribes seeking to form or acquire interests in inter-Tribal entities that would generally not be recognized as separate entities under these final regulations.

The word “exclusively,” as used in these regulations, means that the entity must be formed under the laws of one or more of the Indian Tribal governments that own it and not the laws of an Indian Tribal government that does not have an interest in the entity or the laws of a state or foreign government. Therefore, an entity formed solely under the laws of one owning Indian Tribal government that is also owned by several other Indian Tribal governments would be considered as organized or incorporated exclusively under the laws of one or more of the Indian Tribal governments that own it and would generally not be recognized as a separate entity for Federal tax purposes.

One commenter expressed concern that entities organized or incorporated under the laws of a Tribe that is not federally recognized but recognized by a State (State-recognized Tribe) would not be covered under these proposed regulations and requested clarity as to how the result might change, if at all, in proposed § 301.7701-1(a)(4)(iii)(D) ( Example 4 ) if one or more of the four participating Tribes were State-recognized Tribes.

The United States has a government-to-government relationship with and recognizes the sovereignty of federally recognized Tribes. Revenue Procedure 2008-55 (2008-39 I.R.B. 768) treats all federally recognized Tribes as Indian Tribal governments under section 7701(a)(40). Federally recognized Tribes are not subject to Federal income taxes. Section 301.7701-1(a)(3) has long provided that section 17 corporations and section 3 corporations chartered under Federal law and wholly owned by federally recognized Tribes are not recognized as separate entities for Federal tax purposes. These final regulations extend the same treatment to entities organized or incorporated under Tribal law and wholly owned by Tribes. Because section 17 corporations, section 3 corporations, and wholly owned Tribal entities are not recognized as separate entities, they, like the Tribes that own them, are not subject to Federal income tax.

Corporations wholly owned by State-recognized Tribes were not covered by the proposed regulations and are not covered by these final regulations. If one or more of the four participating Tribes in § 301.7701-1(a)(4)(iii)(D) ( Example 4 ) were a State-recognized Tribe or an entity created by a State-recognized Tribe, then the jointly owned corporation would not satisfy the requirements of § 301.7701-1(a)(4) and would be respected as a separate legal entity that could be subject to Federal income taxation.

Some commenters suggested that not only entities wholly owned by Indian Tribal governments and organized or incorporated under the laws of their Indian Tribal government owner, section 3, or section 17, but also Tribally owned entities organized under State law should be treated as not separate from the Tribe for Federal tax purposes. The Treasury Department and the IRS have previously ruled that a corporation organized by an Indian Tribe under State law is subject to Federal income tax on the income earned in the conduct of a commercial business on and off the Tribe's reservation. See Rev. Rul. 94-16, situation 3, 1994-1 C.B. 19 (1994). The commenters proposed that the relevant consideration for Federal income tax purposes is not which government created the corporate entity but, rather, the tax status of the owner. Commenters explained the advantages of State-chartered entities to include that their structure is more familiar to outside investors and offers a broader spectrum of opportunities, particularly for business ventures outside of the Tribe's reservation. These regulations only address the Federal tax treatment of entities chartered by DOI or under Tribal law. Accordingly, the Federal tax treatment of State-chartered entities is outside the scope of these regulations, and, therefore, the final regulations do not adopt this comment.

Many commenters recommended extending Federal income tax exemption to entities with 51 percent or greater ownership by Tribes so that they are on parity with State and local governments to receive the same tax advantages afforded to State and local government entities in public-private partnerships. Commenters also requested clarifying guidance on the tax treatment of partially owned entities, including distinctions between wholly owned, partially owned, and majority owned entities.

As these matters are outside the scope of the guidance contained in the proposed regulations that these regulations finalize, the final regulations do not adopt these comments. The Treasury Department and the IRS continue to consider possible guidance on the Federal tax treatment of corporations incorporated under Tribal law that are owned in part by persons other than Tribes. The Treasury Department and the IRS would conduct Tribal consultation prior to issuing any guidance in that area.

Some commenters suggested that wholly owned corporations incorporated under Tribal law should be considered exempt from Federal income tax without the fiction that such corporations are not separate from the parent Tribe. These commenters explained that Revenue Ruling 94-16, 1994-1 C.B. 19, does not rely on this concept. The commenters indicated that section 17 corporations share the same tax status as the Tribe without relying on a fiction that the section 17 corporation is not separate from the Tribe. As support, the commenters indicated that Federal law permits a Tribe to organize both section 16 corporations and section 17 corporations, separate classes of entities with differing powers, purpose, and function. Commenters further explained that if a corporation incorporated under Tribal law is not distinct from the Tribal government, this could prohibit Tribes from qualifying a wholly owned Tribal entity for section 501(c)(3) status and, thus, would require Tribes to charter non-profit corporations under State law, contrary to Federal policy.

Under the existing framework of the section 7701 regulations, an entity recognized as separate from the Tribe does not share the same tax status as the Tribe. Thus, in order to be an entity not subject to Federal income tax under those regulations, section 17 corporations and section 3 corporations cannot be recognized as separate and distinct from the Tribe for Federal income tax purposes. These final regulations treat wholly owned Tribal corporations similarly to section 17 corporations and section 3 corporations. The commenter is correct that a wholly owned corporation incorporated under Tribal law that is not separate and distinct from the Tribal government cannot qualify for section 501(c)(3) status. However, there is nothing in these regulations to prevent Tribes from creating non-stock Tribal law entities that are described in section 501(c)(3), nor would doing so be contrary to Federal policy.

Commenters requested the addition of clarifying language to confirm that LLCs that qualify as wholly owned Tribal entities are not recognized as separate entities for Federal income tax purposes and, therefore, would not be subject to Federal income tax. The commenters indicated that confusion arises because an entity can be classified as one type of entity for local law purposes such as an LLC or partnership, and then make an entity classification election by filing Form 8832, Entity Classification Election, with the IRS to be taxed differently for Federal tax purposes. A majority of commenters supported the addition to the final regulations of a separate illustrative example of an LLC that qualifies as a wholly owned Tribal entity that is not regarded as a separate entity and, therefore, not subject to Federal income tax. Other commenters suggested that it is unnecessary for the proposed regulations to apply to entities other than corporations that qualify as wholly owned Tribal entities. Those commenters explained that since the section 7701 regulations treat a domestic eligible entity with a single owner as disregarded unless the owner otherwise elects, many Tribes have created LLCs that qualify as wholly owned Tribal entities with the understanding that the rules under the existing regulations apply. Commenters expressed concern that adopting a rule that automatically disregards the separateness of all wholly owned Tribal entities for Federal tax purposes disrupts that understanding.

The treatment of limited liability companies for Federal tax purposes is determined under the general classification rules of § 301.7701-3(a). However, the term “organized” used in § 301.7701-1(a)(4)(i) is meant to apply to LLCs organized under Tribal law that are wholly owned by one or more Tribe(s) (Tribally organized LLC), which is consistent with both the preamble to the proposed regulations and proposed § 301.7701-1(a)(4)(iii)(C).

Comments indicate that taxpayers understand that the proposed regulations would treat a Tribally organized LLC with a single member as not separate from the Tribe for Federal tax purposes, and therefore not subject to Federal income tax under these final regulations. Therefore, the final regulations do not adopt these comments.

However, the Treasury Department and the IRS understand the need for certainty in this area. Therefore, the final regulations adopt the general comments that the examples provided in the regulation should explicitly state that the rules apply equally to Tribally organized LLCs.

Many commenters requested clarification in the final regulations that the treatment of wholly owned Tribal entities as not separate entities from their Tribal owners applies equally to subsidiary entities. Similarly, many commenters also suggested revising proposed § 301.7701-1(a)(4)(iii)(B) ( Example 2 ) to indicate that it involves a holding company and a subsidiary. A few commenters also suggested adding an example of a multi-tier partnership entity similar to proposed § 301.7701-1(a)(4)(iii)(B) ( Example 2 ).

Proposed § 301.7701-1(a)(4) did not expressly state that entities that are owned through a chain of entities that themselves are not recognized for Federal tax purposes are not recognized as separate entities for Federal tax purposes. In order to ensure clarity on this point, the final regulations add language in § 301.7701-1(a)(4) to clarify that the wholly owned requirement can be met through ownership by other entities not recognized as separate under § 301.7701-1(a)(4).

The final regulations, in § 301.7701-1(a)(4)(iii)(B) ( Example 2 ), illustrate that in a tiered structure where Corporation Z is wholly owned by Corporation X and Corporation X is wholly owned by Tribe B, where both Corporation Z and Corporation X are organized or incorporated exclusively under the laws of Tribe B, both entities are not recognized as separate from Tribe B for Federal tax purposes and are not subject to Federal income tax. This example was intended to be a general illustration of the proposed rule that subsidiaries in a tiered entity structure of wholly owned Tribal entities are not recognized as separate entities for Federal tax purposes and are, therefore, exempt from Federal income tax. Revising the example as suggested by the commenters to specify that proposed § 301.7701-1(a)(4)(iii)(B) ( Example 2 ) involves a holding company and a subsidiary would unnecessarily narrow the scope and relevancy of this example, which was intended to be a general illustration. Therefore, the final regulations do not adopt this comment.

One commenter requested adding an example to confirm that a Tribally organized LLC would retain its status as not regarded when it enters into a partnership with a third-party for-profit corporation formed under State law. Though the final regulations do not add such an example, the Treasury Department and the IRS confirm that the Federal tax status of a Tribally organized LLC would not be affected by holding an interest in a partnership regardless of who the other partners in the partnership were.

A commenter recommended clarifying that a section 17 corporation is a federally chartered corporation created through a lengthy incorporation process for a corporation with the DOI and the eventual approval of such corporation's charter.

These final regulations do not adopt the recommendation in this comment concerning detailing the processes by which a section 17 corporation is created because the regulations do not modify or otherwise affect the incorporation process of section 17 corporations and section 3 corporations. They do provide certainty that wholly owned Tribal entities are accorded the same tax treatment as section 17 corporations and section 3 corporations. The final regulations do, however, adopt the recommendation to change the description of section 17 corporations and section 3 corporations to reflect that they are federally chartered corporations.

Several commenters also requested clarification that entities formed under resolutions or interim measures, rather than formal ordinances, are also afforded Federal income tax exemption if established under Tribal law. The proposed regulations did not address the specific mechanisms or administrative processes by which Tribes organize or incorporate a wholly owned entity under their sovereign laws. While the final regulations do not specifically adopt these comments by providing the requested clarification, the Treasury Department and the IRS confirm that any acts to organize or incorporate a wholly owned Tribal entity under the laws of the Tribes would satisfy the requirements of being “organized under Tribal law” for such entity to not be recognized as a separate entity from the Tribe under § 301.7701-1(a)(4)(i).

A commenter recommended expressly stating in the text of proposed § 301.7701-1(a)(4)(i) that section 17 corporations, section 3 corporations, and wholly owned Tribal entities are not subject to Federal income tax on income earned by them in the conduct of commercial business, investment, and/or other activities on or off the organizing Tribe's reservation or Tribes' reservations (as applicable). The commenter suggested that, although proposed § 301.7701-1(a)(4)(iii)(A) through (C) ( Examples 1 through 3 ) illustrated that entities wholly owned by one or more Tribes and organized or incorporated exclusively under the laws of such Tribe or Tribes are both not recognized as separate entities for Federal tax purposes and not subject to Federal income tax, additional language explicitly stating that such entities are not subject to Federal income tax is necessary in proposed § 301.7701-1(a)(4)(i) for consistency and to avoid any ambiguity on this issue.

This commenter also indicated that the use of the phrase “in the conduct of commercial business” in connection with the statement of exemption from Federal income tax in the preamble to the proposed regulations creates uncertainty as to the scope of the exemption from Federal income tax of section 17 corporations and section 3 corporations, creating the possibility of disputes regarding whether income from investments or other activities or sources is excluded from the exemption from Federal income tax. Thus, the commenter requests clarification in the final regulations on the scope of the exemption from Federal income tax for section 17 corporations and section 3 corporations.

The Treasury Department and the IRS adopt the recommendation and added language to § 301.7701-1(a)(4)(i) to clarify that such entities are not subject to Federal income tax. As such, the source of their income is not relevant because their Federal tax status is not based on the source or type of income earned. Accordingly, the final regulations do not comment on the nature or source of income excluded from Federal income tax derived by section 17 corporations, section 3 corporations, or wholly owned Tribal entities.

Some commenters requested that the IRS defer to Tribes' sole discretion to determine whether wholly owned Tribal entities that have been in existence for decades have consistently applied § 301.7701-1(a)(4) and relied on that provision for tax years prior to the final regulations' publication date. By providing such deference, these commenters suggest, the IRS would respect Tribal sovereignty and self-governance, and reduce administrative burdens. To that effect, some commenters suggested developing a specific streamlined refund process for wholly owned Tribal entities that may have paid Federal income taxes for a period before the final regulations' publication date.

While the final regulations do not adopt the foregoing comments, the Treasury Department and the IRS confirm that Federal income tax refund requests may be processed under the general principles of tax administration. In particular, wholly owned Tribal entities that choose to apply the final regulations retroactively may seek income tax refunds by filing Form 1120-X, Amended U.S. Corporation Income Tax Return, for tax years for which the applicable period of limitations is open and obtain the assistance of the Indian Tribal Governments office of the Tax Exempt and Government Entities Division of the IRS to process their refund requests.

The majority of commenters recommended that the final regulations treat section 17 corporations, section 3 corporations, and wholly owned Tribal entities as entities that are separate from the Tribe(s) that own these entities for Federal excise tax purposes because Tribes create these entities to limit the risk of liability to the Tribes themselves. The commenters' suggestion would be consistent with the treatment of disregarded entities as separate from their owners for purposes of certain Federal excise taxes under the special rule in § 301.7701-2(c)(2)(v). Additionally, the Background section of the preamble to the proposed regulations notes at footnote 2 that while Tribes are not subject to Federal income tax, they generally are subject to Federal excise taxes absent a rule (such as section 7871 of the Code) providing otherwise. Other commenters requested that the final regulations allow Tribes to elect to treat a wholly owned entity as either regarded or disregarded for Federal excise tax purposes. These commenters asserted that Tribes have a sovereign right to elect specific Federal tax treatment.

In addition, several commenters expressed concern that the rules applying to “business entities” in § 301.7701-2(c)(2)(i) and (v) may not include section 17 corporations, section 3 corporations, or wholly owned Tribal entities. Section 301.7701-2(a) defines a “business entity” as an entity recognized for Federal tax purposes, and § 301.7701-1(a)(3), as of April 1, 2025, provided that section 17 corporations and section 3 corporations were not “recognized” for Federal tax purposes. Similarly, proposed § 301.7701-1(a)(4)(i) generally would not have recognized section 17 corporations, section 3 corporations, or wholly owned Tribal entities as separate entities for Federal tax purposes. These commenters requested that the final regulations explicitly treat these three types of Tribal entities as separate entities for Federal excise tax purposes. Specifically, commenters suggested modifying § 301.7701-2(c)(2)(v) to apply both to business entities described in § 301.7701-2(c)(2)(i) and to Tribal entities described in proposed § 301.7701-1(a)(4)(i). In conjunction with this change, commenters also suggested modifying proposed § 301.7701-1(a)(4)(i) to provide an exception for cases where the (newly modified) special rule relating to Federal excise taxes at § 301.7701-2(c)(2)(v) applies to Tribal entities.

The Treasury Department and the IRS agree with the recommendation of the majority of commenters to treat section 17 corporations, section 3 corporations, and wholly owned Tribal entities as entities separate from the Tribe(s) that own them for Federal excise tax purposes. The final regulations do not adopt these commenters' specific recommendation to amend § 301.7701-2(c)(2)(v) because the rules of § 301.7701-2 apply solely to “business entities.” Instead, the final regulations provide for this separate entity treatment in § 301.7701-1. Specifically, while the final regulations in § 301.7701-1(a)(4)(i) provide the general rule that section 17 corporations, section 3 corporations, and wholly owned Tribal entities are not recognized as separate entities for Federal tax purposes, the final regulations in § 301.7701-1(a)(4)(iii) provide an exception under which such entities are treated as separate entities for certain Federal excise tax purposes under rules identical to those of § 301.7701-2(c)(2)(v). This aligns the rules applicable to section 17 corporations, section 3 corporations, and wholly owned Tribal entities with the existing rules under § 301.7701-2(c)(2)(v) that treat disregarded entities as separate from their owners for certain Federal excise tax purposes.

The Treasury Department and the IRS decline to adopt the suggestion of some commenters that Tribes be allowed to elect the treatment of wholly owned Tribal entities for Federal excise tax purposes. Instead, as explained in the previous paragraph, the final regulations provide that wholly owned Tribal entities (as well as section 17 corporations and section 3 corporations) will, in all cases, be regarded as separate entities for the Federal excise tax purposes identified in § 301.7701-2(c)(2)(v). This approach is consistent with most commenters' requests and aligns with the existing Federal excise tax regime under § 301.7701-2(c)(2)(v).

This approach also avoids a number of administrative difficulties that taxpayers and the IRS have experienced with respect to disregarded entities generally, due to the interaction of the disregarded entity rules and certain Federal excise tax provisions. Many Federal excise tax provisions rely on State law, rather than Federal law, to determine when tax attaches or whether to allow an excise tax credit or refund. Federal excise taxes are generally transaction-based, and State law often governs one or more aspects of a transaction, such as when title to an article passes. As such, difficulties arose prior to the 2007 regulations, TD 9356 (72 FR 45891, August 16, 2007), when an entity that was regarded under State law, but disregarded under Federal tax law, engaged in transactions subject to a Federal excise tax. To address these problems, in 2007, the Treasury Department and the IRS promulgated § 301.7701-2(c)(2)(v) to treat wholly owned business entities otherwise disregarded for Federal tax purposes as separate from their owners for certain Federal excise tax purposes. See TD 9356 (72 FR 45891, August 16, 2007) (adopting final regulations and stating no comments were received regarding the excise tax provisions of the proposed regulations); REG-114371-05 (70 FR 60475-60476, October 18, 2005) (preamble to proposed § 301.7701-2(c)(2)(v), explaining reasons for the change).

To prevent similar problems with respect to Tribal entities, the final regulations adopt separate Federal excise tax treatment, identical to that of § 301.7701-2(c)(2)(v), for section 17 corporations, section 3 corporations, and wholly owned Tribal entities. Having all wholly owned Tribal entities on a uniform system for Federal excise tax purposes that conforms with the existing § 301.7701-2(c)(2)(v) rules avoids inconsistency and promotes sound tax administration.

Finally, other commenters requested that wholly owned Tribal entities be not recognized as separate entities for excise tax exemption purposes but recognized as separate entities for excise tax liability purposes. These commenters requested that the final regulations allow Tribes to extend their sovereign privileges, such as a tax exemption, to their wholly owned entities while also permitting Tribes to shield their assets from potential liabilities by forming business entities. The Treasury Department and the IRS decline to adopt this suggestion because excise tax exemptions, such as those provided in section 7871, are outside the scope of this rulemaking.

In expressing their views on the classification of Tribal entities as separate from the Tribe for Federal excise tax purposes, some commenters expressed concern about the potential impact of such treatment on the section 7871 exemption from certain Federal excise taxes. Those commenters stated that section 17 corporations, section 3 corporations, and wholly owned Tribal entities should be explicitly permitted to claim Federal excise tax exemptions to the same extent as Tribes under section 7871. Some of those commenters suggested that language be added to proposed § 301.7701-1(a)(4) to provide that section 17 corporations, section 3 corporations, and wholly owned Tribal entities are treated as an “Indian Tribal government” for purposes of section 7871 and obsolete § 305.7871-1. Other commenters requested that such entities be deemed a “subdivision” for purposes of section 7871.

The final regulations do not adopt these commenters' suggestions, as section 7871 and any regulations thereunder are outside the scope of this rulemaking. The proposed regulations did not address section 7871 or obsolete § 305.7871-1. Accordingly, the final regulations do not address the existing law under section 7871 or the availability of the section 7871(a)(2) exemption from certain Federal excise taxes for Tribes, section 17 corporations, section 3 corporations, or wholly owned Tribal entities.

Prior to the publication of this Treasury decision, § 301.7701-1(a)(3) provided that section 17 corporations and section 3 corporations are not recognized as separate entities for Federal tax purposes. However, the regulations did not specifically address whether a wholly owned Tribal entity is recognized as a separate entity for Federal employment tax purposes.

In general, employment tax responsibilities rest with an employer. Employers are required to deduct and withhold Federal income taxes and Federal Insurance Contributions Act (FICA) taxes from their employees' wages under sections 3402(a) and 3102(a) of the Code, and are separately liable for their share of FICA taxes as well as for Federal Unemployment Tax Act (FUTA) taxes under sections 3111 and 3301 of the Code. These Federal income tax withholding, FICA, and FUTA taxes are collectively referred to herein as “Federal employment taxes.” Sections 3403, 3102(b), 3111, and 3301 provide that the employer is the person liable for the withholding and payment of Federal employment taxes. In addition, the employer is required to make timely tax deposits, file Federal employment tax returns, and issue wage statements (Forms W-2) to employees, which are collectively referred to herein as “other Federal employment tax obligations.”

An employer is generally defined as the person for whom an individual performs services as an employee. See sections 3401(d), 3121(d), and 3306(a) of the Code. If an entity were not recognized as separate from its owner for Federal employment tax purposes, the owner of the entity would be treated as the employer for purposes of Federal employment tax liabilities and all other Federal employment tax obligations related to wages paid to employees performing services for the disregarded entity. In the context of wholly owned Tribal entities, the IRS has not previously issued guidance regarding their employment tax treatment.

Outside the context of wholly owned Tribal entities, § 301.7701-2(c)(2)(iv)(A) and (B) treat business entities that are disregarded for Federal tax purposes as separate corporations for purposes of Federal employment taxes and related reporting requirements. Specifically, certain other single-owner eligible entities (under §§ 301.7701-1 through 301.7701-3) that are disregarded as entities separate from their owners for other Federal tax purposes are treated as entities separate from their owners for Federal employment tax purposes. See § 301.7701-2(c)(2)(iv)(A) and (B).

Several commenters requested a provision treating wholly owned Tribal entities separately for employment tax purposes to ensure that such entities can assume direct responsibility without burdening the Tribes that own them. The final regulations adopt these comments and treat wholly owned tribal entities as separate from their Tribal owners for Federal employment tax purposes. As discussed above, this approach is consistent with the treatment of disregarded entities in § 301.7701-2(c)(2)(iv)(A) and (B), which generally are disregarded as separate from their owners for Federal tax purposes, but regarded as separate for Federal employment tax purposes. Further, this approach would generally not subject Tribes to liability for Federal employment taxes owed with respect to employees performing services for their wholly owned Tribal entities, a result that many commenters support. This approach also minimizes administrative burdens, particularly for inter-Tribal entities.

Other commenters expressly requested that FICA and FUTA tax benefits applicable to Tribes be applied to wholly owned Tribal entities. Another commenter suggested that the final regulations should confirm that wholly owned Tribal entities share their owner's Federal tax exemption benefits from certain Federal employment taxes and provide a wide range of hypothetical examples.

There are some Federal employment tax provisions that specifically apply to services performed in the employ of a Tribe. For example, an exception from FUTA taxes exists for service performed in the employ of a Tribe, or any instrumentality that is wholly owned by a Tribe. See section 3306(c)(7). Section 3306(u) provides that, for FUTA purposes, the term “Indian tribe” has the meaning given to such term by section 4(e) of the Indian Self-Determination and Education Assistance Act (codified at 25 U.S.C. 5304(e)), and includes any subdivision, subsidiary, or business enterprise wholly owned by such an Indian tribe. 25 U.S.C. 5304(e) provides that “Indian Tribe” means, inter alia, any Indian tribe, band, nation, or other organized group or community which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.

Accordingly, even though wholly owned Tribal entities are treated as separate from the Tribes for employment tax purposes, they remain eligible for the FUTA tax exception in section 3306(c)(7) because section 3306(u) makes it clear that for purposes of FUTA tax, the term “Indian Tribe” has the meaning given to such term by 25 U.S.C. 5304(e) and includes “any subdivision, subsidiary, or business enterprise wholly owned by such an Indian tribe.”

As an example, if a Tribe establishes a wholly owned Tribal entity, under the final regulations, it will generally be treated as a separate corporation for Federal employment tax purposes, but it will be treated as an Indian Tribe for purposes of the FUTA tax exception provided by section 3306(c)(7) because it is a subdivision, subsidiary, or business enterprise wholly owned by the Tribe as defined in section 3306(u).

The final regulations provide that wholly owned Tribal entities, section 17 corporations, and section 3 corporations are treated, for purposes of making section 6417 elections (including determining eligibility for and the consequences of such elections), as instrumentalities of the Indian Tribal government(s) that wholly own them. This is the same rule contained in proposed § 1.6417-1, which stated that an entity described in § 301.7701-1(a)(4)(i) is treated as an instrumentality of the Indian Tribal government(s) or subdivision(s) thereof that own(s) it.

Commenters generally supported the proposed rule treating wholly owned Tribal entities as instrumentalities of the Tribes that own them for purposes of the section 6417 elective payment election. Some commenters requested clarification on the application of the elective payment election rules when an applicable credit is generated by a wholly owned Tribal entity jointly owned by multiple Tribes. As a clarification, a wholly owned Tribal entity that is jointly owned by multiple Tribes would be treated as an instrumentality for purposes of section 6417. The wholly owned Tribal entity will determine any applicable credit generated by the Tribal entity's activities and make the elective payment election for any applicable credit so determined. This avoids each Tribe having to separately determine a credit and separately make an elective payment election. By following the procedural rules in the section 6417 final regulations, TD 9988 (89 FR 17584, March 11, 2024), the wholly owned Tribal entity generally will make the elective payment election by completing pre-filing registration and then filing a return including a completed Form 990-T, Exempt Organization Business Income Tax Return, as described in § 1.6417-1(b)(2), using its own name and employer identification number, any relevant source credit form(s), Form 3800, General Business Credit (or its successor), and any additional information, including supporting calculations, required in instructions to the relevant forms. Any refund resulting from the elective payment election would be paid to the wholly owned Tribal entity. This treatment should reduce overall complexity for Tribes and the IRS as it reduces the number of necessary credit calculations and elective payment elections and also helps ensure any elective payment amount is commensurate with the amount of the otherwise allowable credit.

Another commenter suggested that the proposed regulations be revised to allow Tribes the choice of having the Tribe or the wholly owned Tribal entity make the elective payment election because in some cases it may be impractical for the wholly owned Tribal entity to do so. The final regulations do not adopt this suggestion, consistent with the view of most commenters who supported the rule providing that the wholly owned Tribal entity that is treated as an instrumentality must make the election. There also are additional administrative benefits gained for both Tribes and the IRS by having certainty on how to file elective payment elections. For example, it will be clear that the wholly owned Tribal entity makes the elective payment election when an entity is wholly owned by multiple tribes. Thus, the final regulations provide that a wholly owned Tribal entity is treated as an instrumentality of an Indian Tribal government and such instrumentality (and not the Indian Tribal government) would make the elective payment election.

A commenter suggested that, rather than being treated as a payment of tax, the elective payment amount should be treated as a grant and paid prior to the time a project is placed in service. The statutory text of section 6417(a) expressly requires the entity making an elective payment election with respect to an applicable credit to be treated as making a payment of tax equal to the amount of such credit. Furthermore, the statutory text of section 6417(d)(4) controls the timing of an elective payment and provides that the payment is treated as being made by the applicable entity on the later of the due date for the return or the date the return is actually filed. As this comment could only be adopted if statutory revisions were made, these final regulations do not adopt the commenter's suggestions.

Several commenters recommended that Tribes be given the option to monetize credits through transferability under section 6418 of the Code, rather than only being able to make elective payment elections under section 6417. The commenters also suggested additional changes to the section 6418 rules if Tribes were allowed to make transfers. Tribal governments (and their instrumentalities, pursuant to § 1.6417-1(c)(7)) are listed as applicable entities under section 6417(d)(1)(A)(iv) and section 6418(f)(2) expressly provides that an eligible taxpayer for section 6418 is any taxpayer not listed in section 6417(d)(1)(A). Thus, Tribal governments (and their instrumentalities) are only allowed to make elective payment elections under section 6417. As the comment requesting the option to use section 6418 and the other comments suggesting additional section 6418 changes would require statutory revisions, these final regulations do not adopt the commenters' suggestions.

The final regulations apply to taxable periods, or taxable years for purposes of section 6417, beginning on or after January 1, 2026. The final regulations provide that section 17 corporations, section 3 corporations, and wholly owned Tribal entities are treated as instrumentalities for purposes of making a section 6417 election, and as entities separate from their owners for the Federal employment and excise tax purposes identified in § 301.7701-2(c)(2)(iv) and (v). Accordingly, each such entity must have its own employer identification number (EIN) for these purposes. Each such entity must separately calculate, report, and pay all employment tax obligations identified in § 301.7701-2(c)(2)(iv) with respect to its employees under its own name and EIN for wages paid on or after January 1, 2026. With respect to taxable periods beginning on or after January 1, 2026, each such entity must separately report, calculate, and pay taxes for any purpose identified in § 301.7701-2(c)(2)(v) under its own name and EIN. To ensure that taxpayers have sufficient time to make any necessary changes to their systems in response to these final regulations, the final regulations apply only to taxable periods beginning on or after January 1, 2026.

For Federal income tax purposes only, an entity may choose to apply § 301.7701-1(a)(4) to taxable periods beginning before January 1, 2026, for which the applicable period of limitations is open.

For section 6417 purposes, an entity described in § 301.7701-1(a)(4)(i) may choose to apply § 1.6417-1(c)(7) and (f) to taxable years beginning before January 1, 2026, but only if the Indian Tribal government(s) that own the entity also apply § 1.6417-1(c)(7) and (f) consistently with such entity for all such taxable years.

Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments) prohibits an agency from publishing any rule that has Tribal implications if the rule either imposes substantial, direct compliance costs on Indian Tribal governments and is not required by statute, or preempts Tribal law, unless the agency meets the consultation and funding requirements of section 5 of the Executive order. This final rule would neither impose substantial, direct compliance costs on Indian Tribal governments nor preempt Tribal law within the meaning of the Executive order.

The Office of Management and Budget's Office of Information and Regulatory Analysis has determined that this regulation is not significant and is not subject to review under section 6(b) of Executive Order 12866. Therefore, a regulatory impact assessment is not required.

The Executive Order 14192 designation for this final rule is anticipated to be deregulatory.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) generally requires that a Federal agency obtain the approval of the Office of Management and Budget (OMB) before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The collection of information in these regulations contain reporting and recordkeeping requirements. The recordkeeping requirements mentioned within these final regulations are considered general tax records under § 1.6001-1(e). These records are required for the IRS to validate that taxpayers have met the regulatory requirements and are entitled to make an elective payment election and to verify the Federal tax classification of entities described in these final regulations. For PRA purposes, general tax records are already approved by OMB under 1545-0047 for tax-exempt organizations and government entities.

These regulations also mention reporting requirements related to making elections under section 6417. These elections will be made by taxpayers on Forms 990-T, and credit calculations will be made on Form 3800 and supporting forms. These forms are approved under 1545-0047 for tax-exempt organizations and government entities.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), the Secretary of the Treasury hereby certifies that the final regulations will not have a significant economic impact on a substantial number of small entities pursuant to the Regulatory Flexibility Act. These final regulations would affect entities that are wholly owned by Tribes. Additionally, no added burden is created through these final regulations; rather, these final regulations would expand the definition of an eligible entity for section 6417 of the Code but does not expand the requirements for entities to make the elective payment election. Although data is not readily available about the number of small entities that are potentially affected by this rule, it is possible that a substantial number of small entities may be affected.

To the extent the entities described in these regulations make elections under section 6417, the Treasury Department and the IRS certify the final regulatory flexibility analysis undertaken in TD 9988 (89 FR 17584, March 11, 2024).

For the reasons stated, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required.

Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this Treasury decision was submitted to the Chief Counsel for the Office of Advocacy of the Small Business Administration for comment on its impact on small business, and no comments were received.

Section 202 of the Unfunded Mandate Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Indian Tribal government, in the aggregate, or by the private sector, of $100 million (updated annually for inflation). These final regulations do not include any Federal mandate that may result in expenditures by State, local, or Indian Tribal governments or by the private sector in excess of that threshold.

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

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

The Revenue Rulings and Revenue Procedure cited in this preamble are published in the Internal Revenue Bulletin and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at https://www.irs.gov.

The principal author of these final regulations is the Office of Associate Chief Counsel (Passthroughs, Trusts, and Estates). However, other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, 26 CFR parts 1 and 301 are amended as follows:

The Coast Guard will enforce the special local regulations in 33 CFR 100.1101 for the San Diego Parade of Lights in San Diego Bay, CA in 33 CFR 100.1101, Table 1, Item 5 of that section from 5:30 p.m. until 9:30 p.m. on December 14, 2025, and from 5:30 p.m. until 9:30 p.m. on December 21, 2025. This enforcement action is being taken to provide for the safety of life on navigable waterways during the event. The Coast Guard's regulation for recurring marine events in the San Diego Captain of the Port Zone identifies the regulated entities and area for this event. During the enforcement periods, as reflected in § 100.1101, persons and vessels are prohibited from anchoring, blocking, loitering, or impeding within this regulated area, unless authorized by the Captain of the Port, or his designated representative. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

In addition to this notification of enforcement in the Federal Register , the Coast Guard will provide the maritime community with advance notification of this enforcement period via the Local Notice to Mariners, marine information broadcasts, and local advertising by the event sponsor.

Coast Guard District Commanders and Captains of the Port (COTP) must be immediately responsive to the safety and security needs within their jurisdiction; therefore, District Commanders and COTPs have been delegated the authority to issue certain local regulations. Safety zones may be established for safety or environmental purposes. A safety zone may be stationary and described by fixed limits or it may be described as a zone around a vessel in motion. Security zones limit access to prevent injury or damage to vessels, ports, or waterfront facilities. Special local regulations are issued to enhance the safety of participants and spectators at regattas and other marine events.

Timely publication of these rules in the Federal Register may be precluded when a rule responds to an emergency, or when an event occurs without sufficient advance notice. The affected public is, however, often informed of these rules through Local Notices to Mariners, press releases, and other means. Moreover, actual notification is provided by Coast Guard patrol vessels enforcing the restrictions imposed by the rule. Timely publication of notifications of enforcement of reoccurring regulations may be precluded when the event occurs with short notice or other agency procedural restraints.

Because Federal Register publication was not possible before the end of the effective period, mariners would have been notified of the contents of these safety zones, security zones, special local regulations, regulated navigation areas or drawbridge operation regulations by Coast Guard officials on-scene prior to any enforcement action. However, the Coast Guard, by law, must publish in the Federal Register notice of substantive rules adopted. To meet this obligation without imposing undue expense on the public, the Coast Guard periodically publishes a list of these temporary safety zones, security zones, special local regulations, regulated navigation areas and drawbridge operation regulations. Permanent rules are not included in this list because they are published in their entirety in the Federal Register . Temporary rules are also published in their entirety if sufficient time is available to do so before they are placed in effect or terminated. In some of our reoccurring regulations, we say we will publish a notice of enforcement as one of the means of notifying the public. We use this notification to announce those notifications of enforcement that we issued and will post them to their dockets.

The following unpublished rules were placed in effect temporarily during the period between April 2025 and June 2025. To view copies of these rules, visit www.regulations.gov and search by the docket number indicated in the following table.

The Coast Guard will enforce the safety zone for event (L)(1) in Table 1 to 33 CFR 165.939 for the City of North Tonawanda NYE Fireworks from 11:45 p.m. on December 31, 2025, through 12:30 a.m. on January 1, 2026. The regulation specifies the location of the regulated area for this event. Pursuant to 33 CFR 165.939(a), entry into, transiting, or anchoring within the safety zone during an enforcement period is prohibited unless authorized by the COTP Eastern Great Lakes or their designated on-scene representative. Those seeking permission to enter the safety zone may request permission from the COTP Eastern Great Lakes via channel 16, VHF-FM or by contacting the Sector Eastern Great Lakes Command Center via (888) 230-4703. Vessels and persons granted permission to enter the safety zone shall obey the directions of the COTP Eastern Great Lakes or their designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

In addition to this notification of enforcement in the Federal Register , the Coast Guard will provide the maritime community with advance notification of the enforcement periods via Broadcast Notice to Mariners or other suitable means. If the COTP Eastern Great Lakes determines that the safety zone need not be enforced for the full duration stated in this notice, they may use a Broadcast Notice to Mariners to grant general permission to enter the safety zone.

The Coast Guard received notification that fireworks will be launched from a barge on the Lower Mississippi River near Natchez, MS. Hazards from fireworks displays include accidental discharge of fireworks, dangerous projectiles, and falling hot embers or other debris. The Captain of the Port Sector Lower Mississippi River (COTP) has determined that potential hazards associated with fireworks are a safety concern for anyone within a half mile of the fireworks display. Therefore, the COTP is issuing this rule under the authority in 46 U.S.C. 70034, which is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone.

The Coast Guard is issuing this rule without prior notice and comment. As is authorized by 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest. The Coast Guard was notified of this event on November 21, 2025, but we must establish this safety zone by December 31, 2025, to protect personnel, vessels, and the marine environment. Therefore, we do not have enough time to solicit and respond to comments.

For the same reasons, the Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

This rule establishes a safety zone from 6 p.m. until 7 p.m. on December 31, 2025. The safety zone will cover all navigable waters of the Lower Mississippi River between Mile Markers 363 and 364. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or their designated representative.

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

The regulatory flexibility analysis provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to rules that are not subject to notice and comment. Because the Coast Guard has, for good cause, waived the notice and comment requirement that would otherwise apply to this rulemaking, the Regulatory Flexibility Act's flexibility analysis provisions do not apply here.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards by calling 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

We have analyzed this rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.

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

As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment.

This rule is a safety zone. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket.

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

EPA is issuing this rulemaking under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a. FFDCA section 408(c)(2)(A)(i) allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” FFDCA section 408(c)(2)(A)(ii) defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” Additionally, FFDCA section 408(b)(2)(D) requires that the Agency consider, among other things, “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.”

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. If you fail to file an objection to the final rule within the time period specified in the final rule, you will have waived the right to raise any issues resolved in the final rule. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2025-0212 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before February 17, 2026.

EPA's Office of Administrative Law Judges (OALJ), in which the Hearing Clerk is housed, urges parties to file and serve documents by electronic means only, notwithstanding any other particular requirements set forth in other procedural rules governing those proceedings. See “Revised Order Urging Electronic Filing and Service,” dated June 22, 2023, which can be found at https://www.epa.gov/system/files/documents/2023-06/2023-06-22%20-%20revised%20order%20urging%20electronic%20 filing%20and%20service.pdf. Although EPA's regulations require submission via U.S. Mail or hand delivery, EPA intends to treat submissions filed via electronic means as properly filed submissions; therefore, EPA believes the preference for submission via electronic means will not be prejudicial. When submitting documents to the OALJ electronically, a person should utilize the OALJ e-filing system at https://yosemite.epa.gov/OA/EAB/EAB-ALJ_upload.nsf.

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket at https://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute. If you wish to include CBI in your request, please follow the applicable instructions at https://www.epa.gov/dockets/commenting-epa-dockets#rules and clearly mark the information that you claim to be CBI. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice.

In the Federal Register of July 3, 2025 (90 FR 29515) (FRL-12474-05-OSCPP), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 4E9159) by Soil Culture Solutions LLC (d/b/a Soilcea), 3802 Spectrum Blvd., Suite 157, Tampa, FL 33612. The petition requested that 40 CFR part 174 be amended by establishing an exemption from the requirement of a tolerance for residues of the PIP Cas9 protein in citrus. That document referenced a summary of the petition prepared by the petitioner Soilcea, which is available in the docket.

Thirty-six comments were received in response to the notice of filing. All supported the proposed tolerance exemption for SpCas9 protein and urged the Agency to approve the tolerance exemption and associated PIP product registration. No substantive issues were raised in these comments that would affect this tolerance exemption action.

EPA evaluated the available toxicological and exposure data on Cas9 protein and considered their validity, completeness, and reliability, as well as the relationship of this information to human risk. A full explanation of the data upon which the EPA relied and its risk assessment based on those data can be found within the document entitled “ Product Characterization Review and Human Health Risk Assessment of the Three Plant-Incorporated Protectants for the Loss-Of-Function Edits in Accelerated Cell Death 2 (ACD2); Lethal Leaf Spot 1 (LLS1); and Papain-Like Cysteine Protease (PLCP) and the Genetic Material Necessary for their Production (gRNAs g5, g213, g86) along with the Cas9 Protein, as Expressed in Citrus Rootstock Containing Event CarriCea T1 ” (Human Health Risk Assessment). This document, as well as other relevant information, are available in the docket for this action as described under ADDRESSES .

The Cas9 protein is an enzyme (endonuclease) that is part of the CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats) precision genome editing system. CRISPR is an adaptive immune system in procaryotes and archaea that defends the organism from viral infection by cleaving viral DNA. Specifically, CRISPR is a complex consisting of the Cas9 enzyme and a guide RNA (gRNA) molecule. The gRNA binds to DNA in a sequence-specific manner, while the Cas9 protein makes a double-stranded break at that position. Cas9 alone does not have catalytic activity; instead, the incorrect repair of the DNA cut caused by Cas9 results in the loss of function of the targeted gene.

In citrus, SpCas9 protein (derived from the bacterium Streptococcus pyogenes ), along with three gRNAs have been genetically engineered into the Carrizo cultivar (“CarriCea T1” rootstock). Each gRNA is complementary to an endogenous citrus gene and the CRISPR system causes loss of function to those genes. The proteins that would be otherwise produced from the targeted genes are involved in pathways exploited by the bacterium Candidatus Liberibacter asiaticus (CLas), the known causal agent of Huanglongbing disease (also known as citrus greening). The loss of function modifications in these genes disrupt the interactions between the plant proteins and CLas effector proteins, thus interfering with the bacterium's ability to suppress the plant's immune response and establish infection. As a result, the CarriCea T1 rootstock exhibits resistance to bacterial infection by CLas.

The CRISPR/Cas9 system is ubiquitous in bacteria and archaea where it functions by recognizing and removing foreign DNA, serving as a key component of bacterial immune defense. Cas9 proteins are prevalent across a wide range of bacterial groups, highlighting their ubiquitous presence in the environment. Humans are expected to be exposed to natural Cas9 proteins through their interactions with the natural environment. For example, Cas9 is also found in bacteria used in food production, such as Streptococcus thermophilus, and in commensal bacteria like Lactobacillus plantarum which is found in the human gastrointestinal tract. This widespread presence suggests regular human exposure to Cas9 proteins through environmental and dietary sources. While the amino acid sequences of the various Cas9 proteins vary between species, the endonuclease function remains conserved. This consistent mechanism across bacteria suggests that the function of Cas9 remains the same in pathogenic and non-pathogenic bacteria and therefore indicates a history of safe exposure to Cas9.

In citrus, exposure to SpCas9 protein through the dietary route is expected to be negligible as the SpCas9 protein is expected to remain localized to the rootstock, with no presence identified in the leaves of grafted scions and therefore no expectation of the protein to be present in the fruit of grafted scions. Similarly, exposure via drinking water is considered unlikely due to SpCas9's containment in the rootstock, as well as the protein's susceptibility to degradation by environmental conditions and microbial activity. If exposure were to occur, the risk is expected to be negligible due to (1) the history of safe exposure of humans to the Cas9 protein due to the ubiquitous presence of Cas9 proteins in the environment, and the SpCas9 protein in CarriCea T1 sharing nearly identical amino acid sequence homology with the naturally occurring SpCas9; (2) a pesticidal mode of action that is not toxic; (3) bioinformatic analyses demonstrating the absence of significant homology between SpCas9 protein and known toxins or allergens; and (4) data showing the rapid digestibility of SpCas9 protein in gastric enzymes and heat lability at 100 °C, which limits the likelihood for allergenic effects.

As a PIP, the SpCas9 protein is contained within the plant cells and as such, non-occupational and residential exposure is considered to be negligible. Further, there are no proposed residential uses for the CarriCea T1 product containing SpCas9 protein; therefore, a residential handler and post-application exposure and risk assessment has not been conducted.

Although FFDCA section 408(b)(2)(C) provides for an additional tenfold margin of safety for infants and children in the case of threshold effects, EPA has determined that there are no such effects due to the lack of toxicity and allergenicity of SpCas9 protein. As a result, an additional margin of safety for the protection of infants and children is unnecessary.

EPA has determined that an analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation. Nonetheless, a Western blot method using a monoclonal anti-FLAG antibody was submitted to determine the levels of SpCas9 protein in plant samples. The antibody used to detect SpCas9 protein through its FLAG-tag could also be used to determine SpCas9 presence in citrus, provided no other FLAG-tagged proteins are present at the same time.

Based upon its evaluation in the Human Health Risk Assessment, which concluded that SpCas9 protein residues in or on citrus are not toxic to mammals, the EPA concludes that there is a reasonable certainty that no harm will result to the U.S. population, including infants and children, from aggregate exposure to residues of SpCas9 protein. Therefore, an exemption from the requirement of a tolerance is established for residues of SpCas9 protein in or on citrus when used according to the label and good agricultural practices.

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

This action is exempt from review under Executive Order 12866 (58 FR 51735, October 4, 1993), because it establishes or modifies a pesticide tolerance or a tolerance exemption under FFDCA section 408 in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866.

Executive Order 14192 (90 FR 9065, February 6, 2025) does not apply because actions that establish a tolerance under FFDCA section 408 are exempted from review under Executive Order 12866.

This action does not impose an information collection burden under the PRA, 44 U.S.C. 3501 et seq., because it does not contain any information collection activities.

This action is not subject to the RFA, 5 U.S.C. 601 et seq. The RFA applies only to rules subject to notice and comment rulemaking requirements under the Administrative Procedure Act (APA), 5 U.S.C. 553, or any other statute. This rule is not subject to the APA but is subject to FFDCA section 408(d), which does not require notice and comment rulemaking to take this action in response to a petition.

This action does not contain an unfunded mandate of $100 million or more (in 1995 dollars and adjusted annually for inflation) as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any State, local or Tribal governments or the private sector.

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

This action does not have Tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because it will not have substantial direct effects on Tribal governments, on the relationship between the Federal Government and the Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it is not a significant regulatory action under section 3(f)(1) of Executive Order 12866 (See Unit IV.A.), and because EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children.

However, EPA's 2021 Policy on Children's Health applies to this action. This rule finalizes an exemption from the requirement of a tolerance under the FFDCA, which requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . .” (FFDCA 408(b)(2)(C)). The Agency's consideration is documented in Unit III.A.

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

This action does not involve technical standards that would require Agency consideration under NTTAA section 12(d), 15 U.S.C. 272.

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

For the reasons set forth in the preamble, EPA is amending 40 CFR chapter I as follows:

The Pacific Coast Groundfish Fishery Management Plan (PCGFMP) and its implementing regulations at title 50 in the Code of Federal Regulations (CFR), part 660, subparts C through G, regulate fishing for over 90 species of groundfish off the coasts of Washington, Oregon, and California. The Pacific Fishery Management Council (Council) develops groundfish harvest specifications and management measures for 2-year periods ( i.e., a biennium). NMFS published the final rule to implement harvest specifications and management measures for the 2025-2026 biennium for most species managed under the PCGFMP on December 16, 2024 (89 FR 101514). In general, the management measures set at the start of the biennial harvest specifications cycle help the various sectors of the fishery attain, but not exceed, the catch limits for each stock. The Council, in coordination with Pacific Coast Treaty Indian Tribes and the States of Washington, Oregon, and California, recommends adjustments to the management measures during the fishing year to achieve this goal.

At its September 2025 meeting, the Council recommended an inseason action for the Pacific Coast groundfish fishery. This action involves a canary rockfish sub-bag limit for recreational fishing off the coast of California.

In June 2025, the Council's Scientific and Statistical Committee (SSC) adopted a new benchmark assessment for California quillback rockfish. At the same meeting, the Council adopted an inseason action to relax recreational fishing management measures off the coast of California that were originally implemented to reduce angler interactions with quillback rockfish. The June 2025 action included restoring recreational fishing access to all depths between the California/Oregon border and Point Conception (42° N. lat. to 37°07′ N. lat.). In summer 2025, the California Fish and Game Commission (FGC) also took emergency action to implement complementary changes within state regulations to restore recreational fishing access to all depths along that portion of the California coast. In addition, the FGC approved a recreational 2-fish sub-bag limit for the state recreational fishery canary rockfish within the state regulations.

This FGC 2-fish sub-bag limit action was effective on August 28, 2025, and only applies to state jurisdictional waters. Currently, there is no sub-bag limit for canary rockfish in federal regulations for the California recreational fishery, only the 10 fish aggregate bag limit for rockfish, cabezon, and greenlings. The previous changes to allow increased recreational fishing access to depth limits along the California coast allow increased access to the depth range where canary rockfish are commonly encountered in the recreational fishery; thus increasing the likelihood that the California share of the coastwide canary rockfish allocation would be exceeded if additional management measures to address the probability of higher canary rockfish mortality along the California coast were not addressed for the 2025-2026 biennium. Thus, in a September 2025 supplemental California Department of Fish and Wildlife (CDFW) report, CDFW recommended inseason action to implement a recreational 2-fish sub-bag limit for canary rockfish off California within federal regulations. This action is expected to keep canary rockfish mortality off California within limits and accountable to the states' sharing agreements on the percentage of catch to occur off each state, which are contained in the Pacific Coast groundfish fishery Stock Assessment and Fishery Evaluation (SAFE) document available at https://www.pcouncil.org/documents/2024/08/status-of-the-pacific-coast-groundfish-fishery-stock-assessment-and-fishery-evaluation-july-2025.pdf/ . Additionally, this inseason action would establish consistency across state and federal regulations, and thus across jurisdictional boundaries, which would reduce regulatory complexity for the angling public.

The Council moved, and NMFS is implementing, a sub-bag limit for canary rockfish of 2 in the recreational fishery in federal waters off California, as recommended by CDFW.

This final rule makes routine inseason adjustments to groundfish fishery management measures, based on the best scientific information available, consistent with the PCGFMP and its implementing regulations.

This action is taken under the authority of 50 CFR 660.60(c) and is exempt from review under Executive Order 12866.

The aggregate data upon which these actions are based are available for public inspection by contacting Christopher Biegel in NMFS West Coast Region (see FOR FURTHER INFORMATION CONTACT section above), or view at the NMFS West Coast Groundfish website: https://www.westcoast.fisheries.noaa.gov/fisheries/groundfish/index.html .

Pursuant to 5 U.S.C. 553(b), NMFS finds good cause to waive prior public notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest. The adjustments to management measures in this document are designed to keep catch within allocations established by the 2025-2026 harvest specifications. No aspect of this action is controversial, and changes of this nature were anticipated in the final rule for the 2025-2026 harvest specifications and management measures, which published on December 16, 2024 (89 FR 101514).

The Council recommended, and NMFS is implementing, a sub-bag limit for canary rockfish off the coast of California of 2 fish to be consistent with the CDFW bag limit. This inseason change is in response to new information about the fishery and to conservation issues that need to be addressed for the 2025 and 2026 fishing years. Delaying implementation to allow for public comment would impact NMFS's ability to keep the fishery within catch targets set for sustainable fishing. For these same reasons, NMFS finds reason to waive the 30-day delay in effectiveness pursuant to 5 U.S.C. 553(d)(1) so that this final rule may become effective upon publication in the Federal Register . These adjustments were requested by the Council's advisory bodies, as well as members of industry during the Council's September 2025 meeting, and recommended by the Council. No aspect of this action is controversial, and changes of this nature were anticipated in the biennial harvest specifications and management measures for 2025-2026 (89 FR 101514), which were established through a notice and comment rulemaking.

For the reasons set out in the preamble, NMFS amends 50 CFR part 660 as follows:

NMFS manages the groundfish fishery in the GOA according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared and recommended by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2025 Pacific cod TAC specified for catcher vessels using trawl gear in the Central Regulatory Area of the GOA is 5,617 metric tons (mt), as established by the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025).

The 2025 Pacific cod TAC specified for vessels using pot gear is 4,148 mt, as established by the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025).

The 2025 Pacific cod TAC specified for catcher/processors using trawl gear is 626 mt, as established by the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025). The final 2025 and 2026 harvest specifications also establish a directed fishing closure for Pacific cod for catcher/processors using trawl gear in the Central Regulatory Area of the GOA.

The Administrator, Alaska Region, NMFS (the Administrator) has determined that catcher vessels using trawl gear will not be able to harvest 440 mt of the 2025 Pacific cod TAC allocated to those vessels under § 679.20(a)(12)(i)(B)( 4 ). The Administrator has also determined that catcher/processors using trawl gear and vessels using pot gear have the capability to harvest additional Pacific cod TAC.

Therefore, in accordance with § 679.20(a)(12)(ii)(B), NMFS apportions 420 mt of Pacific cod from catcher vessels using trawl gear to the annual amount specified for catcher/processors using trawl gear and 20 mt of Pacific cod from catcher vessels using trawl gear to the annual amount specified for vessels using pot gear in the Central Regulatory Area of the GOA.

The harvest specifications for 2025 Pacific cod TAC allocated to vessels in the Central Regulatory Area of the GOA included in the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025) is revised as follows: 5,177 mt to catcher vessels using trawl gear, 1,046 mt to catcher/processors using trawl gear, and 4,168 mt to vessels using pot gear.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would not allow for the full harvest of the Pacific cod TACs by the sectors with harvesting capability. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data on the harvest of Pacific cod by sectors operating in the Central Regulatory Area of the GOA and the capability of certain sectors to harvest additional TAC only became available as of December 11, 2025.

There is also good cause under 5 U.S.C. 553(d)(3) to make this action effective immediately upon filing with the Office of the Federal Register. This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

NMFS manages the groundfish fishery in the GOA according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared and recommended by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2025 Pacific cod TAC allocated to catcher vessels using trawl gear in the Western Regulatory Area of the GOA is 2,260 metric tons (mt), as established by the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025).

The 2025 Pacific cod TAC allocated to catcher vessels using hook-and-line gear in the Western Regulatory Area of the GOA is 82 mt, as established by the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025).

The 2025 Pacific cod TAC allocated to vessels using pot gear in the Western Regulatory Area of the GOA is 2,236 mt, as established by the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025).

The Administrator, Alaska Region, NMFS (the Administrator) has determined that catcher vessels using trawl gear will not be able to harvest 220 mt of the 2025 Pacific cod TAC allocated to those vessels under § 679.20(a)(12)(i)(A)( 3 ). The Administrator, has also determined that catcher vessels using hook-and-line gear and vessels using pot gear have the capability to harvest additional Pacific cod TAC.

Therefore, in accordance with § 679.20(a)(12)(ii)(B), NMFS apportions 70 mt of Pacific cod from catcher vessels using trawl gear to the annual amount specified for catcher vessels using hook-and-line gear and 150 mt of Pacific cod from catcher vessels using trawl gear to the annual amount specified for vessels using pot gear.

The harvest specifications for 2025 Pacific cod TAC allocated to vessels in the Western Regulatory Area of the GOA included in the final 2025 and 2026 harvest specifications for groundfish in the GOA (90 FR 12468, March 18, 2025) is revised as follows: 2,040 mt to catcher vessels using trawl gear, 152 mt to catcher vessels using hook-and-line gear, and 2,386 mt to vessels using pot gear.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would not allow for the full harvest of the Pacific cod TACs by the sectors with harvesting capability. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data on the harvest of Pacific cod by sectors operating in the Western Regulatory Area of the GOA and the capability of certain sectors to harvest additional TAC only became available as of December 8, 2025.

There is good cause under 5 U.S.C. 553(d)(3) to make this action effective immediately upon filing with the Office of the Federal Register. This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.