The Animal Welfare Act (7 U.S.C. 2131-2159, hereafter the AWA) authorizes the Secretary of Agriculture to promulgate standards and other requirements governing the humane care, treatment, and transportation of certain animals by dealers, research facilities, exhibitors, carriers, and other regulated entities. Among other things, section 2143(a) provides that the aforementioned standards must include minimum requirements for the exercise of dogs as determined by attending veterinarians in accordance with general standards promulgated by the Secretary.

The Secretary has delegated the authority for enforcing the AWA to the Administrator of the Animal and Plant Health Inspection Service (APHIS). Regulations established under the AWA are contained in 9 CFR parts 1, 2, and 3.

The regulations governing the humane handling, care, treatment, and transportation of dogs are contained in 9 CFR part 3, subpart A. Within that subpart, animal husbandry standards for dogs are found in §§ 3.7 through 3.13. Section 3.7 of the subpart contains compatible grouping standards for dogs; § 3.8 contains exercise standards; §§ 3.9 and 3.10 contain feeding and watering standards respectively; § 3.11 contains cleaning, sanitation, housekeeping, and pest control standards; and § 3.13 contains standards for veterinary care for dogs. (Section 3.12 does not contain standards for dogs and is focused on employees involved in husbandry practices and care.)

Sections 3.1 through 3.11 were last substantially revised in a final rule published in the Federal Register on February 15, 1991 (56 FR 6426-6505; Docket No. 90-218, referred to below as the February 1991 final rule); the standards for veterinary care for dogs found in § 3.13 were added to the regulations in a final rule published in the Federal Register on May 30, 2020 (85 FR 28772-28799, Docket No. APHIS-2017-0062, referred to below as the May 2020 final rule).

We are aware that advances continue to be made, new information developed, and new concepts implemented with regard to the handling and care of dogs. For example, APHIS is aware of advancements in and special considerations provided by State laws regarding the care of breeding females at dog breeding facilities, including “adequate rest” between breeding cycles, minimum and maximum breeding ages, and pre-breeding examinations and caps on the maximum number of litters female breeding dogs may have over the course of their lifetime. In addition, the Croney Research group at Purdue University's College of Veterinary Medicine ( https://www.purdue.edu/vet/discovery/croney/ ) has advanced science-based standards for breeding dogs through their applied research and outreach education programs which inform their voluntary breeding canine welfare certification program, a program that addresses behavioral needs of dogs and informs limits for breeding ages and litter numbers, health requirements, and retirement and rehoming plans.

We are also aware of enhanced exercise requirements for dogs in several States that include minimum daily exercise unless contraindicated and/or otherwise directed by a veterinarian, as well as socialization requirements, such as positive physical contact with humans and compatible animals. The American Kennel Club, a canine welfare and advocacy organization, has also advanced kennel improvements to enhance dog welfare, including additional space, enhanced exercise and environmental enrichment, and outdoor access.

In light of these developments, we consider it appropriate to review and seek data and scientific information on care considerations for breeding females at dog breeding facilities and the exercise and socialization needs of dogs, and are soliciting public comment on the issues outlined below. We invite the submission of data and reviewed scientific information, and where possible, request citations for any referenced studies and scientific evidence to support your comments.

• Do breeding female dogs require additional veterinary or other care considerations over those for non-breeding dogs? What are the most common health issues documented in female breeding dogs?

• Are there studies regarding the specific nutrition requirements during pregnancy and lactation for breeding females?

• What scientific evidence is there regarding the impact of breeding age on the health of breeding females?

• What, if any, impact does the number and frequency of litters have on the health of female dogs? Are there studies evaluating the impact of breed size on the health and breeding of female dogs?

• What scientific evidence is there regarding the impact of heritable defects on the health of breeding females? What are the costs and benefits of genetic testing in breeding females for dog breeding facilities?

• Are there studies assessing the socialization needs of dogs, including interactions with humans and compatible dogs?

• Are there studies assessing the health and wellbeing of singly housed dogs?

• What scientific information is available regarding the exercise needs of dogs, including considerations of the animal's age, breed, and health, the type of exercise, and exercise frequency and duration?

• Are there studies evaluating the effects of human interaction on the health and welfare of dogs in breeding facilities?

The OCC first created a process for the appeal of material supervisory determinations in 1993 under Comptroller Eugene Ludwig. 1 In 1994, Congress passed the Riegle Community Development and Regulatory Improvement Act of 1994  2 (the Riegle Community Act or the Act) which codified the requirement for the OCC, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board of Governors (Board), and the National Credit Union Administration to have internal appeals processes for appeals of material supervisory determinations. 3 The Riegle Community Act based its requirements on the OCC's 1993 process for appeals, and thus the OCC only needed to make minor changes to conform its process to the new requirements. 4 The OCC issued proposed guidance for public comment in 1994 and adopted its final guidance in 1996. 5 The OCC has amended its appeals process three times since then, 6 but these amendments did not make significant structural changes to the process.

The Riegle Community Act requires that the OCC establish an independent intra-agency appellate process to review material supervisory determinations made with respect to insured depository institutions that the agency supervises. 7 It further requires that in establishing this independent appellate process, the OCC must ensure that “any appeal of a material supervisory determination by an insured depository institution or insured credit union is heard and decided expeditiously” and that “appropriate safeguards exist for protecting the appellant from retaliation by agency examiners.”  8 The Act clarifies that independent appellate process means “a review by an agency official who does not directly or indirectly report to the agency official who made the material supervisory determination under review.”  9 Finally, the Act requires that the OCC appoint an ombudsman to act as a liaison between the OCC and any affected person with respect to any problem such party may have in dealing with the agency resulting from regulatory activities and to assure that safeguards exist to encourage complainants to come forward and preserve confidentiality. 10

The OCC's current appeals process for supervisory decisions and actions is articulated in OCC Bulletin 2013-15, “Bank Appeals Process: Guidance for Bankers” (2013 Guidance). It provides that the Ombudsman operates independently from the bank supervision process and reports directly to the Comptroller of the Currency. The Ombudsman may report weaknesses in OCC policy to the Comptroller and make recommendations regarding changes in OCC policy. The 2013 Guidance emphasizes that the OCC's “core policy” for dispute resolution is to resolve disputed items in an informal, amicable manner outside of the formal appeals process. However, the 2013 Guidance further notes that if a bank cannot resolve a dispute through these means, the bank is encouraged to seek a further review of the OCC decision in dispute through the formal appeals process as described in the 2013 Guidance.

Under the 2013 Guidance, banks can appeal any agency supervisory decision or action to the Ombudsman, with several specific exceptions. Appealable matters include, but are not limited to:

 Examination ratings.

 Adequacy of the allowance for credit losses methodology.

 Individual loan ratings.

 Violations of law.

 Shared National Credit (SNC) decisions.

 Fair-lending-related decisions, including referrals to the U.S. Department of Justice or U.S. Department of Housing and Urban Development.

 Licensing decisions.

Material supervisory determinations such as matters requiring attention, compliance with enforcement actions, or other conclusions in a report of examination (ROE).

The 2013 Guidance also provides specific exceptions from matters that are appealable. Most of these matters have other appeals processes for them ( e.g., enforcement-related actions), are not final conclusions, or are time sensitive and cannot be easily undone once they are completed ( e.g., the appointment of receivers or conservators). These specific exemptions are:

Appointments of receivers and conservators.

Preliminary examination conclusions communicated to the bank before a final ROE or before other written communication from the OCC is issued.

Any formal enforcement-related actions, including, but not limited to, decisions to (a) seek the issuance of a formal agreement or a cease-and-desist order, or the assessment of a civil money penalty pursuant to section 8 of the Federal Deposit Insurance Act, Public Law 81-797 (FDIA) (12 U.S.C. 1818); (b) take prompt corrective action pursuant to section 38 of the FDIA (12 U.S.C. 1831(o)); (c) issue a safety and soundness order pursuant to section 39 of the FDIA (12 U.S.C. 1831p-1); or (d) commence formal investigations pursuant to 12 U.S.C. 481, 1464(d), 1818(n), and 1820(c).

Formal and informal rulemakings pursuant to the Administrative Procedure Act, Public Law 79-404 (APA) (5 U.S.C. 500 et seq. ).

Decisions or recommended decisions following formal and informal adjudications conducted pursuant to the APA (5 U.S.C. 701 et seq. ).

Requests for agency records or information under the Freedom of Information Act covered by 5 U.S.C. 552 or 12 CFR part 4 and submission of information to the OCC that is governed by this statute and this regulation. 11

Decisions to disapprove directors and senior executive officers pursuant to section 914 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Public Law 101-73 (12 U.S.C. 1831i). 12

Any other agency decisions that are subject to judicial review other than those described in the appealable matters listed above.

Under the 2013 Guidance, while banks may not appeal a decision by the supervisory office to pursue a formal enforcement-related action, banks may appeal any conclusion in an ROE. However, in such circumstances, the appeal is limited to a consideration of whether the examiners appropriately applied agency policies and standards. If a bank disagrees with the agency decision to pursue a formal enforcement action, the bank can contest the action through the administrative process. Once a bank has entered into a formal enforcement action, conclusions regarding the bank's level of compliance with the formal enforcement action are an appealable matter. However, if the OCC determines that the lack of compliance with an existing enforcement action requires an additional enforcement action, the proposed new enforcement action is not appealable, as the bank can contest the action through administrative adjudication.

Banks may seek review of appealable matters by filing a formal appeal with either the appropriate Deputy Comptroller or the Ombudsman. Banks requesting an appeal must file their appeal within 60 days of receipt of the written agency decision in dispute. A formal appeal to the Deputy Comptroller must be filed with the Deputy Comptroller responsible for the division that issued the decision or action in dispute.

Banks filing an appeal with the appropriate Deputy Comptroller must submit information in writing fully describing the matter in dispute and the basis for the bank's disagreement. The appeal must include the supervisory standards that the bank deems were inappropriately applied by OCC officials. To ensure that a bank's board of directors supports the appeal, the bank's president or chief executive officer must submit the appeal and include in the submission the board's approval of the decision to appeal.

Upon receiving the appeal, the Deputy Comptroller is required to contact the bank to discuss the appeals process and to ensure that the Deputy Comptroller has all the information needed. Within seven days of receiving a formal appeal, the Deputy Comptroller shall notify the bank in writing whether the appeal has been accepted. If the Deputy Comptroller directly or indirectly participated in making the decision under review or directly or indirectly reports to the agency official who made the decision under review, the Deputy Comptroller must transfer the appeal to the Ombudsman after advising the appellant. If the Deputy Comptroller accepts an appeal, that official contacts the OCC management official(s) involved in the dispute to submit a written response to the appeal. In the absence of any extenuating circumstances, the Deputy Comptroller will issue an appeals decision letter within 45 days. If a bank disagrees with the response from the Deputy Comptroller, the bank may further appeal the matter to the Ombudsman within 15 days of receiving the decision letter from the Deputy Comptroller.

The Ombudsman can hear matters filed directly with the Ombudsman's office, appealed from a decision of a Deputy Comptroller, or appealed through an alternative decision making process such as the SNC process or the fair lending referral process. Similar to an appeal filed with a Deputy Comptroller, an appeal filed directly with the Ombudsman must include information in writing fully describing the matter in dispute and the basis for the bank's disagreement and the bank's president or chief executive officer must submit the appeal and include in the submission the bank board's approval of the action. The appeal must include the supervisory standards that the bank deems were inappropriately applied. Upon receiving the appeal, the Ombudsman will contact the bank to discuss the appeals process and supervisory standards related to the issue in dispute and to ensure that the Ombudsman has all relevant materials. Within seven days of receiving a formal appeal, the Ombudsman will notify the bank whether the appeal has been accepted. If the Ombudsman accepts an appeal, he or she will contact the OCC management officials involved in the dispute to submit a written response to the appeal. In the absence of any extenuating circumstances, the Ombudsman will issue a written response to the appeal within 45 days.

For SNC decisions, banks may appeal to the Deputy Comptroller for Large and Global Financial Institutions. The appeal must be filed within 14 days of notification of the decision. Senior bank management must explain why it disagrees with the SNC decision. The SNC appeals letter must identify the credit, the commitment amount, the disposition, the basis for the bank's disagreement, and any documentation that supports management's position on the matters in dispute. The Deputy Comptroller for Large and Global Financial Institutions will forward a copy of the SNC appeal to the examiner in charge of the agent bank, who must provide his or her formal comments and opinions to the appropriate Deputy Comptroller for Large and Global Financial Institutions within 10 days of receipt of the appeal. An interagency panel consisting of senior credit examiners that are independent of the original voting team will evaluate the appeal and recommend a decision to senior management. Large and Global Financial Institutions normally concludes the entire SNC appeals process within 30 days of receipt. If a bank disagrees with the decision rendered through the SNC appeals process, it may further appeal the matter to the Ombudsman within 30 days of receiving the decision letter.

For matters related to fair lending, when the OCC has made a determination that there is reason to believe an instance or pattern or practice of discrimination exists that will result in either a referral to the U.S. Department of Justice or notification to the U.S. Department of Housing and Urban Development, the relevant Senior Deputy Comptroller will provide written notice to the bank of this finding. Banks may file an appeal to the Ombudsman for reconsideration of this decision within 15 days of the date of this notice.

Currently, as a general matter, decisions and actions in dispute are not stayed during the pursuit of an appeal. In appropriate circumstances, with the prior consent of the Comptroller, the Ombudsman or the appropriate OCC official, upon written request of a bank, may relieve the bank of the obligation to comply with a supervisory decision or action while the supervisory appeal is pending.

After the appropriate OCC official renders a decision on a formal appeal, the Ombudsman will contact the bank to ask whether the bank believes OCC examiners have taken actions against the bank in retaliation for its appeal. The Ombudsman will contact bank management both 60 days after the date of the decision letter and 60 days after completion of the first examination of the appellant bank following its appeal. A bank may also contact the Ombudsman any time during or after the appeal. The Ombudsman will investigate any complaints of retaliation, and, in the absence of extenuating circumstances, the Ombudsman will complete the investigation within 30 days. To prevent future retaliation, the Ombudsman may recommend to the Comptroller that the next examination of the bank exclude personnel involved in the ruling appealed by the bank.

Though the OCC's appeals process was an innovative step toward fair treatment of regulated institutions at the time of its adoption, over the subsequent 30 years several potential shortcomings have been identified in the process. First, few formal appeals are being brought. Though this fact could indicate that the OCC's focus on informal negotiation of grievances is resolving most issues, the OCC is concerned that this low rate of appeals could be attributable to a sense on the part of OCC supervised entities that the appeals process is not structured to guarantee fair consideration of the matters appealed or a fear that a formal appeal could damage the bank's relationship with its regulator. Indeed, in 2024, the OCC supervised 1,040 institutions and only 11 appeals were filed with the Ombudsman, suggesting that only approximately one percent of OCC supervised institutions availed themselves of the OCC appeals process. Of those appeals, 10 were upheld by the Ombudsman and one was a split decision between the supervisory office and the bank.

An underlying reason for this perception could be that the OCC has not clearly articulated a de novo standard of review for appeals. While other Federal banking agencies such as the FDIC and the Board have clearly articulated standards of review that provide for more even deliberation, 13 the OCC's guidance has remained silent on whether the Ombudsman and Deputy Comptroller will apply a de novo standard of review or whether it will defer to the judgment of the supervisory office and only overruling findings where there is clear error. This lack of a clear standard, coupled with the fact that the OCC appeals process finds in favor of the supervisory office the majority of the time, has led to a perception that filing a formal appeal is not worth the resources and risk of retaliation because there is a low chance of success. This is especially true in regard to certain types of challenges, such as those regarding referrals to the Department of Housing and Urban Development and the Department of Justice of potential fair lending violations. For instance, between 2017 and 2024, the OCC received 12 appeals of such fair lending referrals, and it upheld the supervisory office's decision in every appeal under the current silent standard of review. The silent standard of review also appears to have influenced the outcomes of appeals of shared national credit decisions. At the first appeal level for SNCs, which consists of an interagency panel of three senior credit examiners, between 2021 and 2024 there were 30 appeals of SNC decisions. Of these appeals, approximately 80 percent were upheld by the interagency panel of three senior credit examiners.

While it is difficult to create a clear statistic for appeals that combine multiple questions of law and policy into one appeal because the Ombudsman often issues split decisions on such appeals, finding partially in favor of the bank and partially in favor of the OCC, there has been a public perception regarding these appeals as well that the OCC wins the majority of the time because the standard of review does not give appellants a fair chance to challenge the OCC's original supervisory decision.

Thus, there is evidence that the current appeals process's lack of a clearly articulated standard of review and the consequently high percentage of appeals that are found in favor of the OCC is creating a perception among OCC supervised entities that challenging material supervisory determinations, especially in certain areas, will not be fruitful. This perception may be discouraging supervised entities from bringing formal appeals.

The purpose of the proposed rulemaking is to ensure that the OCC's process for appeals of material supervisory determinations provides a meaningful opportunity for supervised entities to challenge OCC decisions and actions. These proposed changes are designed to enhance the independence of the appeals process and the transparency of the OCC's decision-making standards with the goal of increasing regulated entities' confidence in the appeals process and their protections against retaliation for using the process while affording the public an opportunity to provide comments on changes to the process.

In general, the appeals process is an informal process that is not subject to the adjudicative provisions of the APA (5 U.S.C. 554, 556-557). Even if the OCC adopts the proposed rule, the OCC would still retain its current policy concerning dispute resolution, which is to resolve disputed issues in an informal, amicable manner. However, if supervised entities cannot resolve disagreements through discussion, they are encouraged to seek a further review of disputed OCC decisions through the OCC's formal appeals process. The appeals process in the proposed rule is detailed below.

The proposed rule would provide definitions for the key terms used. First, the OCC is proposing to define “Appeals Board” to mean a panel consisting of the chief national bank examiner and two term appointees. However, the OCC invites comments on how the Appeals Board could be composed. For instance, the Appeals Board could also include the Ombudsman or the Chief Counsel. The term appointees, if that option is selected, would be individuals with relevant supervisory experience gained either from working with a financial regulator or from working for a financial institution, law firm, consulting firm, trade group, or other similar organization. 14 Under the proposal, current OCC employees would not be eligible to serve as term appointees to the Appeals Board, though the OCC is also considering alternatives whereby OCC employees from reporting lines separate from the one that rendered the supervisory determination may serve on the Appeals Board. The OCC invites comment on all of these options and suggestions for other ways to compose the Appeals Board.

The OCC is proposing to define “de novo standard of review” to mean a standard of review that is not deferential to either party and that does not defer to the determinations of either party. De novo standard of review means that the review does not defer to the previous decision but freely considers the matter anew, as if no decision had been rendered below, on the materials in the review record. 15 This standard would be designed to bolster confidence in the fairness and independence of the appeals process. The OCC anticipates that both the appellant and the supervisory office involved in the initial decision will still submit arguments in support of their position to the Appeals Board, similar to the current process, but the arguments submitted by both parties will be weighed evenly.

The OCC is proposing to define “substantively involved” to mean someone that directly approved, advised on, or recommended the decision being appealed or a determination underlying the decision being appealed.

The OCC is proposing to define “supervised entity” to mean an entity for which the OCC makes material supervisory determinations. This includes national banks, Federal savings associations, U.S. agencies or branches of a foreign bank, and permitted payment stablecoin issuers and foreign payment stablecoin issuers subject to the OCC's regulatory authority. An institution-affiliated party of such an entity that is directly affected by an informal enforcement action may also appeal the informal enforcement action. This definition is intentionally broader than the mandate in the Reigle Community Act, which only covers insured depository institutions and insured credit unions. The OCC is proposing this broad definition because it believes that uninsured institutions, including uninsured national trust banks, should also have a meaningful opportunity to appeal OCC determinations, and the OCC seeks to enhance the accessibility of its appeals process to those affected by OCC material supervisory determinations.

Under the proposal, any supervised entity, as defined above, that is affected by an OCC material supervisory determination may file an appeal for review of the determination. An institution-affiliated party of such an entity that is directly affected by an informal enforcement action taken against the individual may also appeal the informal enforcement action, though not other OCC decisions. Outside of this limited right for institution-affiliated parties, only the supervised entity who is the direct subject of a material supervisory determination may appeal the determination. Members of the general public cannot file an appeal of an OCC material supervisory determination, and a financial institution cannot file an appeal of a material supervisory determination directed at another financial institution, with the exception of the procedure for appeals of SNC determinations.

The proposed regulation would define material supervisory determination to mean any final agency or supervisory decision or action, including, but not limited to, the following:

i. Examination ratings;

ii. Adequacy of the allowance for credit losses methodology;

iii. Individual loan ratings;

iv. Violations of law;

v. SNC decisions;

vi. Fair-lending-related decisions, including referrals to the U.S. Department of Justice or U.S. Department of Housing and Urban Development;

vii. Licensing decisions; and

viii. Material supervisory determinations such as matters requiring attention, compliance with enforcement actions, or other conclusions in the report of examination (ROE).

This list is not meant to be an exclusive list of matters that supervised entities may appeal. The regulation would further provide that a supervised entity may not appeal:

i. Appointments of receivers and conservators;

ii. Decisions related to bidder status or submitted bids on an institution to which the Corporation provides assistance under 12 U.S.C. 1823;

iii. Preliminary examination conclusions communicated to the bank before a final ROE or other written communication from the OCC is issued;

iv. Any formal enforcement-related actions, including, but not limited to, decisions to:

(A) Seek the issuance of a formal agreement or a cease-and-desist order, or the assessment of a civil money penalty pursuant to 12 U.S.C. 1818;

(B) Take prompt corrective action pursuant to 12 U.S.C. 1831(o);

(C) Issue a safety and soundness order pursuant to 12 U.S.C. 1831p-1; or

(D) Commence formal investigations pursuant to 12 U.S.C. 481, 1464(d) 1818(n), and 1820(c).

v. Formal and informal rulemakings pursuant to 5 U.S.C. 500 et seq.;

vi. Decisions or recommended decisions following formal and informal adjudications conducted pursuant to 5 U.S.C. 701 et seq.;

vii. Requests for agency records or information under the Freedom of Information Act covered by 5 U.S.C. 552 or 12 CFR part 4 and submission of information to the OCC that is governed by this statute and this regulation;

viii. Decisions to disapprove directors and senior executive officers pursuant to 12 U.S.C. 1831i;

ix. Any other agency decisions that are subject to judicial review other than those described as appealable above;

x. Any decision by the agency that is non-final, other than those described as appealable above;

xi. Supervisory observations;

xii. Conclusions in OCC interpretive letters; or

xiii. Agency decisions that are administrative and do not substantially affect the rights of the supervised entity.

Certain agency decisions that are insignificant or non-final would also not be appealable in the interest of conserving agency resources. Such matters would include issues such as the scheduling for examinations or additional information requests.

The proposed rule adopts both the list of appealable and non-appealable matters from the 2013 Guidance with certain additions and clarifications. Certain items on the lists are mandated by the Riegle Community Act. The Riegle Community Act specifies that material supervisory determination must include examination ratings, the adequacy of loan loss reserve provisions, and loan classifications on loans that are significant to an institution. 16 The Act further explicitly excludes from the appeals process a determination to appoint a conservator or receiver or a decision to take action pursuant to 12 U.S.C. 1831o, which provides authority for regulators to take prompt corrective action to resolve problems that could impose losses on the deposit insurance fund. 17 The current lists of appealable and non-appealable matters have worked well based on the OCC's supervisory experience and have not faced significant criticism. Thus, the OCC is proposing to generally maintain these lists with certain changes, but the agency invites comment on whether they should be amended to the extent statutorily permissible.

The proposed rule also continues to largely adopt the procedures in the 2013 Guidance concerning appeals when formal enforcement proceedings are pending. That is, under the proposed rule, while supervised entities may not appeal a decision by the supervisory office to pursue a formal enforcement-related action, they may appeal conclusions in the ROE before the commencement of a formal enforcement-related action. This includes determinations and the underlying facts and circumstances that may form the basis of a subsequent formal enforcement action. Once the OCC informs an institution that a formal enforcement-related action has been approved, a supervised entity may not pursue an appeal, except for the limited purpose of challenging whether examiners appropriately followed agency policies and standards in preparing the ROE. Also, once a supervised entity has entered into a formal enforcement action, conclusions regarding the supervised entity's level of compliance with the formal enforcement action are an appealable matter. However, if the OCC determines that the lack of compliance with an existing enforcement action requires an additional enforcement action, the proposed new enforcement action is not appealable. Remarks in an ROE and other communications about a potential formal enforcement action made prior to a final decision are preliminary and therefore may not be appealed. Individual minimum capital ratios under 12 CFR 3.403 and notices of deficiency under 12 CFR part 30 may be appealed. 18

The proposed appeals process is not intended to allow appeals that seek to change or modify OCC policies, rules, or legal interpretations. If an appeal would raise a legal question of first impression, the matter would be referred to the Chief Counsel's Office for decision rather than the Appeals Board, as that is the correct forum for legal determinations.

The proposed rule provides that the appeal may be filed with the Deputy Comptroller responsible for the unit that issued the determination in dispute or directly with the Appeals Board. It is at the supervised entity's discretion where to file the initial appeal, though the OCC retains the discretion to escalate an appeal directly to the Appeals Board if there is a risk that delay can harm remediation of a material financial risk or result in costs to the Deposit Insurance Fund. This option is preserved from the existing guidance. The OCC invites comment on whether this option should be maintained. The proposed rule further adopts from the 2013 Guidance the requirement that if the Deputy Comptroller was substantively involved in making the decision under review, he or she must transfer the appeal to the Appeals Board after informing the appellant.

The proposed rule maintains the deadlines from the existing guidance for the filing of the appeal, which mandate that the appeal must be filed within 60 days of receipt of the determination in dispute, except for decisions relating to fair lending referrals to the U.S. Department of Justice or notifications to the U.S. Department of Housing and Urban Development, which must be filed within 15 days. The OCC's supervisory experience has shown that this time period is sufficient for banks to prepare and submit appeals. In keeping with the OCC's policy of encouraging informal resolution of disagreements between supervised entities and the OCC, the OCC would still maintain its existing practice of waiving this deadline if an institution is engaged in good faith dialogue with the supervisory office in an attempt to informally resolve the dispute. Also adopted from the 2013 Guidance is the requirement that the appeal must include the supervisory standards that the bank asserts were inappropriately applied by OCC officials. Supervisory standards means statutes, regulations, or articulations of OCC policy in guidance such as the Comptroller's Handbook, bulletins, or interpretive letters. This requirement is not meant to prevent appeals where the specific standard applied is unknown to the bank.

If the appeal is by a financial institution, the president or chief executive officer must submit the appeal and include in the submission the board of the institution's approval of the action. This requirement is adopted from the current guidance and is designed to ensure that the bank's leadership supports the appeal. The OCC is soliciting comment on whether this requirement is necessary.

Under the proposed process, the appellant has the choice whether to file the appeal directly with the Appeals Board or to first file it with the Deputy Comptroller of the division that rendered the decision at issue. The Deputy Comptroller would be required to transfer the appeal directly to the Appeals Board if the Deputy Comptroller substantively involved in making the decision under review. If the Deputy Comptroller determines that such a transfer is necessary, the appellant would be informed.

Under the proposal, the Deputy Comptroller has 45 days from the receipt of the appeal to render his or her decision unless there are extenuating circumstances requiring additional time. This is the same timeframe contained in the 2013 Guidance. If the Deputy Comptroller determines that the filed appeal is incomplete or requires more information from the appellant, the 45 days would not start until the Deputy Comptroller receives a complete appeal. Consistent with the current process, the proposed rule would require that once a complete appeal is received, the Deputy Comptroller would solicit the views of the supervisory office involved in issuing the material supervisory determination. The OCC is soliciting comments on whether this initial appeal to the Deputy Comptroller is a meaningful opportunity for redress that should be maintained as part of the appeals process.

Under the proposal, when considering the matters being appealed, the Deputy Comptroller would apply a de novo standard of review. The OCC is soliciting comments on whether this is the right standard of review to be applied. Though the Deputy Comptroller may use workpapers and materials prepared by the supervisory office, he or she would reach his own conclusions about each issue in dispute and would not give deference to either party. If necessary to render a decision, the Deputy Comptroller may, in his or her discretion, request that the record be supplemented, including through further fact-finding or sending staff to visit the appellant on site and gather further information.

The proposed rule would require the Deputy Comptroller to issue a decision in writing. If the appellant disagrees with the determination of the Deputy Comptroller, the appellant would have the option of further appealing the matter to the Appeals Board. This approach generally follows the process specified in the 2013 Guidance. The appellant would be required to file its appeal to the Appeals Board within 15 days of receiving the written decision from the Deputy Comptroller.

The proposed rule would replace the role currently played by the Ombudsman with an Appeals Board consisting of the Chief National Bank Examiner and two term appointees. This change is being proposed to increase confidence in the independence of the decision making on appeals. Under the proposal, the term appointees would not be eligible to have their terms renewed in order to prevent the appointees from being pressured to find in the OCC's favor to secure reappointment. The OCC is also considering other options for how to compose the Appeals Board. For instance, the Board could also include the Ombudsman or the Chief Counsel. It could also be composed of one term appointee and two OCC officials. The term appointees, if that option is selected, would be individuals with relevant banking, regulatory, legal, or supervisory experience gained either from working with a financial regulator, for a financial institution, or in the financial services sector. Under the proposal, current OCC employees would not be eligible to serve as term appointees to the Appeals Board, though the OCC is also considering alternatives whereby OCC employees from reporting lines separate from the one that rendered the supervisory determination may serve on the Appeals Board. The agency is further considering maintaining the current structure with the Ombudsman as the decision maker. The OCC welcomes comments on what structure would provide the most fairness, independence, and expertise.

Under the proposal, the Appeals Board would be able to consider issues either directly appealed to it or appealed to it after a determination by a Deputy Comptroller. It would also consider appeals referred to it by a Deputy Comptroller who was substantively involved in the material supervisory determination. It would further consider appeals of SNCs, fair lending determinations, and licensing decisions. Regardless of the way the matter comes before the Appeals Board, the Appeals Board would apply a de novo standard of review. As explained above, this means that no deference would be shown to either party. The OCC is soliciting comments on whether this is the correct standard of review for the Appeals Board to apply. On the one hand, this standard of review would provide the most opportunity for appellants to be able to show the merits of their arguments. On the other hand, the supervisory staff who made the initial determination often have more technical expertise regarding the matter than the members of the Appeals Board, so it could introduce more risk of error into the process for the Appeals Board to overturn the supervisory staff without a finding of clear error. The OCC does anticipate continuing to allow the supervisory office that made the original determination to submit arguments and explanation in support of its determination to the Appeals Board, which will weigh the supervisory office's arguments equally with the appellant's arguments.

The Appeals Board would solicit the views of the supervisory office involved in issuing the material supervisory determination and would include in its deliberations their response to the appellant's arguments. It is envisioned that the Appeals Board would be assisted by its own independent staff who could help review disputed facts and standards. The Appeals Board could also supplement the review record by soliciting the views of other OCC staff, staff of other supervisory agencies, or other sources. When necessary, the Appeals Board would consult subject matter experts from across the OCC. When such consultations occur, the Appeals Board would attempt to use experts who were not substantively involved in the initial decision. If necessary, the Appeals Board or its staff could engage in gathering additional facts or information to verify factual conclusions in the supervisory record. All decisions by the Appeals Board would be reviewed by an OCC attorney for conformance with law and OCC policy. The attorney rendering this opinion would be someone who was not substantively involved in the initial decision.

The Appeals Board's review will generally be limited to the facts and circumstances as they existed prior to, or at the time the material supervisory determination was made. However, the Appeals Board may gather additional evidence as described above. As well, the Appeals Board may permit in its discretion supplementation of the record by either party in the interest of fairness provided the request is timely received by the Appeals Board. Though the OCC recognizes that this introduces the possibility of the Appeals Board overturning the supervisory office's decision based on evidence that the supervisory office did not have available to consider, in some circumstances it is important for the OCC to reach the right conclusion for the bank from a safety and soundness perspective regardless of whether that requires new materials be considered.

If any member of the Appeals Board had been substantively involved in one or more of the determinations being appealed, the member would be required to observe a recusal. If a member of the Appeals Board is recused and the two remaining members cannot reach a decision, the Comptroller would decide the matter.

Under the proposal, the Appeals Board would issue a written decision within 45 days of receiving the appeal unless there are extenuating circumstances requiring additional time. This is the same timeframe referenced in the 2013 Guidance. Similar to the current process, the written decision would state the reasons for the Appeals Board's conclusion and the evidence it relied upon to reach that conclusion. If the Appeals Board relied on confidential supervisory information from other institutions, that information would be subject to all applicable limits on its disclosure.

The proposal would require a redacted version of the Appeals Board's decision to be published. The OCC envisions that this publication would occur on the OCC's website, as is the current practice. As is the current practice, the decision would be redacted to remove all identifying information about the bank involved but, to the greatest extent possible while still maintaining confidentiality, allow the reader to understand the issues in contention and how the OCC considered those issues. As well, if any member of the Appeals Board chooses to write a dissent, this would also be published in redacted form. These publication requirements would provide transparency into the OCC's decision making process and accountability to regulated entities and the public for the outcomes of appeals. This transparency is important for ensuring that supervisory standards are applied consistently and fairly.

The proposed rule would also codify the appeals process for SNCs. It would generally maintain the current process as contained in the 2013 Guidance, but make revisions as needed to conform to changes such as the establishment of an Appeals Board as the final decision maker.

Under the proposed rule, an agent bank may submit a SNC appeal directly or on behalf of any participant bank. If the agent bank refuses, for whatever reason, to file the appeal on behalf of the bank group, the OCC would accept an appeal from any participating bank. The proposal would require a bank to file a SNC appeal with the regulator that supervises the agent bank. When no agent bank is named, the appeal would need to be filed with the regulator that supervises the bank at which the SNC was reviewed. The proposal would require the agent bank to file the appeal within 14 days of notification by the OCC of the preliminary disposition of the credit. Any participant bank would be allowed to appeal either through the agent bank or on its own within 14 days of receiving the preliminary SNC results from the agent bank. If the agent bank does not provide preliminary results to the participant banks, participant banks would be permitted to file an appeal within 14 days of receiving the official SNC results from the primary regulator. These are the same deadlines for appeal as under the 2013 Guidance. They are designed to provide flexibility for banks to be able to appeal regardless of the communication processes between the agent bank and the participant banks.

The proposed rule would require a SNC appeal to identify the credit, the commitment amount, the disposition, the basis for the bank's disagreement, and any documentation that supports the institution's position on the matters in dispute. This is the same information that is called for by the current guidelines. As under the 2013 Guidance, an interagency panel consisting of senior credit examiners that are independent of the original voting team would evaluate the appeal and recommend a decision to OCC senior management. Absent extenuating circumstances this independent review team would issue its decision on a SNC appeal within 30 days of receipt of a complete appeal. If a bank disagrees with the independent review team's decision, the rule would permit it to appeal the matter to the Appeals Board within 30 days of receiving the decision letter from the OCC. These are the same timeframes for rendering a decision and for appealing the decision as under the 2013 Guidance, and the OCC's supervisory experience has found them to be largely appropriate for SNC appeals. The Appeals Board would hear SNC appeals under the same procedures, standard of review, and timeframe as it hears all other appeals. It would also apply the same independence requirements for Appeals Board members and for supporting staff.

Under the proposed rule, with a finding of good cause, the Appeals Board would retain the discretion to extend any time limit, either on behalf of the OCC or on behalf of an appellant, or waive any other procedural requirement under the proposed rule. The OCC is proposing this provision to maintain flexibility for the appeals process in recognition of the fact that the proposed procedures might not be appropriate for all situations. For instance, an appeal raising particularly complex issues might require more than 45 days for the Appeals Board to consider. Likewise, it might take an appellant more than 60 days to complete an appeal submission if the applicant needs to consult outside experts on issues under contention. As well, issues outside of the OCC or the appellant's control, such as natural disasters, could affect the party's ability to meet the proposed regulation's deadlines.

Under the proposal, if the Appeals Board cannot reach a conclusion on a matter due to a member being recused, then the Comptroller would decide the matter. The OCC is soliciting comments on this approach and on whether an official other than the Comptroller should serve as the decision maker in such situations, for instance, the Chief Counsel or the Ombudsman. Under the current proposal, if all members of the Appeals Board are recused, the Comptroller would decide the matter. However, the OCC is also considering having the Comptroller appoint one or more replacement members of the Appeals Board in these matters. The OCC invites comments on these alternative approaches.

Under the proposed rule, the Appeals Board will consist of the Chief National Bank Examiner and two term appointees. The term appointees would be individuals not currently employed by the OCC and who have never before served as a term appointee on the Appeals Board. The requirement that the term appointee never before has served as a term appointee on the Appeals Board is to prevent the term appointees from feeling pressured to decide in the OCC's favor in order to be reappointed. These individuals would be required to have relevant experience and expertise, either in government or in the industry. They would be appointed for a one-year term that is not eligible for renewal and would be appointed directly by the Comptroller. The OCC is soliciting comment on whether the term should be longer, such as two-years, three-years, or four-years, and whether if the term is longer, the terms should be staggered so that the term appointees are not all replaced at the same time. The Appeals Board would report directly to the Comptroller to maintain its independence from the lines of business issuing the supervisory determinations. The OCC is also considering having the term appointees be part-time positions and allowing them to hold outside employment while serving on the Appeals Board. The OCC is also soliciting comments about whether such an arrangement would raise ethical or independence concerns. The OCC is considering and soliciting feedback on what types of external employment should be permitted, if it decides to adopt that option. For instance, it is considering allowing term appointees to work for another government agency or for a consulting firm.

The OCC envisions that the Appeals Board would have OCC staff appointed as necessary to assist with the investigation and analysis of the appeals before it. Such staff would be required to be recused from an appeal if they were substantively involved in the determination being appealed, the same as for members of the Appeals Board itself.

The current guidelines provide that determinations generally will not be stayed during an appeal, though in the appropriate circumstances, the Ombudsman may stay a decision with the prior consent of the Comptroller. The proposed rule would provide more clarity on when a stay will be granted. Specifically, the proposed rule would provide that an appealed material supervisory determination will be stayed if the bank requests a stay and the appropriate Deputy Comptroller or the Appeals Board concludes that:

i. Delaying the implementation of the material supervisory determination would not result in a risk of immediate financial harm to an OCC supervised institution;

ii. The material supervisory determination would impose costs on the appellant within the timeframe for the OCC to decide the appeal; and

iii. The public interest would not be harmed by delaying the implementation of the material supervisory determination.

For instance, if the OCC determination requires an appellant to immediately adopt costly compliance measures, the OCC could consider granting a stay if delaying the implementation of corrective actions during the pendency of the appeal would not result in the risk of immediate financial harm to the institution or the public. This is because once an institution has expended the resources on implementing costly systems and processes, it cannot undo those costs if it wins the appeal. This reality can discourage appeals. However, the OCC is cognizant that, depending on the type of potential deficiency, a stay may not be appropriate.

In weighing whether to grant a stay, the OCC would consider the size of the institution and the burden that immediately implementing the appealed determination will have on the appellant's resources. The OCC would require a lower showing of burden from community banks than from larger institutions, with a presumption that stays of decision should mostly be issued for institutions with more limited resources.

The OCC is soliciting feedback on whether these are the right factors for the OCC to consider when determining whether to grant a stay of a decision pending the outcome of the appeal. The OCC is also soliciting feedback on whether to allow the Ombudsman to grant a stay in addition to the Appeals Board.

The proposed rule would provide that when a material supervisory determination relates to or causes an institution to become critically undercapitalized, as defined by 12 U.S.C. 1831o, the review of any appeal of that supervisory determination would be processed on an expedited basis. For appeals processed on an expedited basis, the appropriate Deputy Comptroller or the Appeals Board would issue its decision in no more than 30 days and would issue the decision in less if the situation demands. The OCC is also considering implementing a shorter timeline than 30 days and is contemplating timelines between 10 and 30 days. The OCC invites comment on the appropriate timeline for expedited appeals.

The expedited appeals process is a change from the 2013 Guidance, which does not adopt expedited treatment for any issue. However, the OCC recognizes that, given the severe outcome of becoming critically undercapitalized, it is important for such issues to be resolved as rapidly as practicable. Notwithstanding the proposal's timeline, situations may arise that would prevent an appeal from being completed before the prompt corrective action framework requires a receivership to be imposed. In these situations, the existence of an outstanding appeal would not prevent the OCC from meeting its statutorily mandated obligation under the prompt corrective action framework to appoint a receiver, in which case an appeal would become moot.

The OCC is soliciting feedback on whether there are other types of decisions that should also be subject to expedited proceedings.

The OCC is proposing to change the role of the Ombudsman in the appeals process. Currently, the Ombudsman acts as the decision maker in appeals. As explained above, the proposed rule would replace the Ombudsman with the Appeals Board as the final decision maker for appeals. The Ombudsman's role would shift to acting as an impartial liaison between the appellant and the Deputy Comptroller or the Appeals Board. This change would allow the Ombudsman to better assist the appellant as the appellant will be more likely to consult the Ombudsman with questions if the Ombudsman is not also the final decision maker. The change would further make the Ombudsman a neutral party in the appeals process and thus allow him to better focus on assisting appellants. It would also dovetail with the Ombudsman's new responsibility under the proposed rule to conduct outreach to supervised institutions after exams to determine their satisfaction with the experience and any issues they may wish to discuss. Institutions are more likely to be open and honest with the Ombudsman during such outreach if the Ombudsman is not the decision maker in any appeal they are considering filing. Under the proposed rule, the Ombudsman's office would be responsible for issuing an annual report to the Comptroller detailing trends and issues it observed through its outreach to institutions after their examinations, assisting banks with navigating the appeals process, and investigating complaints from supervised entities of OCC misconduct. Examples of misconduct that may be investigated by the Ombudsman include: failure to follow OCC procedures for conducting an exam, OCC employees making statements to discourage a bank from exercising its right to appeal, or an OCC examiner soliciting a bribe. If the Ombudsman investigates an allegation that the OCC or its employees engaged in misconduct and failed to follow the law, the Chief Counsel's Office will coordinate with the Ombudsman and will render a final decision on all questions of law.

In this new role, the Ombudsman would be in a unique position to identify and report patterns of issues arising from complaints related to OCC regulatory activities. The Ombudsman could track inquiries and complaints based on relevant characteristics, such as geographic location, scope, policy implications, and final disposition, to help identify any such trends, including trends that implicate differently sized institutions disproportionately. This tracking will be conducted in a manner designed to preserve confidentiality of the complainant to the maximum extent possible. In its required annual report, the Ombudsman will report findings of patterns of issues to the Comptroller. The Ombudsman will also report any issue stemming from a complaint that is likely to have a significant impact on the OCC's mission or activities. The Ombudsman will compose an annual report, which will be published by the OCC, that will provide information including the number of appeals for the year, the topics of appeals, the average length of time it took to resolve the appeals decided that year, and a summary of the OCC's decisions for the year.

Under the proposed rule, similar to under the 2013 Guidance, the Ombudsman is responsible for preventing the OCC or any of its employees from retaliating against the bank for its appeal. This requirement for the Ombudsman is derived from the Riegle Community Act. 19 To fulfill this mission, the proposed rule would require that after the appropriate OCC official renders a decision on a formal appeal, the Ombudsman will contact the bank to ask whether the bank believes OCC examiners have taken actions against the bank in retaliation for its appeal. The Ombudsman would then contact bank management again 60 days after the date of the decision letter and then 60 days after completion of the first examination of the appellant bank following its appeal. This process is similar to the process under the 2013 Guidance.

Similar to under the current process, the proposed rule also provides that a bank may also contact the Ombudsman at any time during or after the appeal if the bank believes that retaliation has occurred. Under the proposed rule, the Ombudsman's role would be extended to receiving any bank complaints of misconduct by the OCC or its staff beyond just claims of retaliation. The Ombudsman would field complaints not just about OCC employees, but also about the term appointees on the Appeals Board and about contractors and other third-parties interacting with supervised entities on the OCC's behalf. The Ombudsman would assist institutions with issues and questions related to OCC regulatory activities. In doing so, the Ombudsman would operate independently of the supervisory process to ensure that appropriate safeguards exist to encourage complainants to come forward and preserve confidentiality. The Ombudsman may initiate a factual inquiry into complaints of alleged retaliation or complaints of other misconduct or mistakes at any time. In the absence of extenuating circumstances, the Ombudsman will complete the investigation within 30 days.

Similar to the OCC's current structure, the Ombudsman would continue to report directly to the Comptroller in order to preserve his independence.

In cases involving allegations of retaliation, if the Ombudsman finds that retaliation has occurred, the Ombudsman will forward the complaint directly to the Inspector General. Appropriate action, including disciplinary action consistent with OCC policies, will be taken as warranted, and the Ombudsman may recommend to the Comptroller that the next examination of the bank exclude personnel involved in the ruling appealed by the bank. The Comptroller will make the final decision on any such exclusion.

The proposed rule would provide that neither the OCC nor any employee of the OCC may retaliate against an institution or person for filing an appeal. Retaliation would be defined as any action or decision by the OCC or by OCC employees that causes a supervised entity to be treated differently or more harshly than other similarly situated entities because the supervised entity attempted to resolve a complaint by filing an appeal of a material supervisory determination or utilized any other OCC mechanisms for resolving complaints, including informal discussions with OCC supervisory staff.

The proposed rule further provides that neither the OCC nor any of its employees may discourage a supervised entity from filing an appeal or from otherwise communicating concerns and objections to the OCC through the appeals process, through the Ombudsman's office, or through other channels such as reaching out directly to the Comptroller. The OCC values honest communication and feedback from supervised entities, and any attempt by examiners or others to discourage banks from such communication or to retaliate against banks for such communication is prohibited.

The proposed rule further provides that if the Appeals Board finds in favor of a supervised entity on an appeal, the OCC may not impose a substantially similar decision based on the same underlying facts in future material supervisory determinations. This is to prevent examiners from retaliating against a supervised entity for filing an appeal and to reaffirm the importance of the appeals process. Supervised entities may be discouraged from filing appeals if the OCC does not make it clear that the decision of the Appeals Board will be respected by the supervisory staff and others across the OCC.

The OCC seeks comment on all aspects of the proposed rule, including the following:

1. Is the definition of supervised entity correct? Is it too broad or too narrow? Are there other groups not included in the definition who should have an opportunity to challenge the OCC's supervisory determinations?

2. Is the composition of the Appeals Board, consisting of the Chief National Bank Examiner and two term appointees, a preferable approach to a single OCC decisionmaker or a board with a different composition? Would a different composition better ensure independence or better promote the confidence of supervised entities in the process's independence and fairness? For instance, the Appeals Board could also be composed of one term appointee and two OCC officials. It could also be composed of three term appointees and no OCC officials.

3. Would removing the Ombudsman's role as the decisionmaker on appeals increase the independence and fairness of the appeals process and the perception of independence and fairness? Would the Appeals Board consisting of the Chief National Bank Examiner and two term appointees, or some other composition, be better positioned to render an impartial decision than the Ombudsman?

4. Does restricting the Appeals Board's term appointees to only serving one term better position them to render fair and impartial decisions than permitting reappointments, which could cause the appointees to feel pressured to find in the OCC's favor to secure reappointment? Are there other provisions that could be placed in appointees' terms or conditions of service that would be effective in positioning them to render fair and impartial decisions and to prevent the term appointees from being pressured to find in the agency's favor? Are there alternatives other than term appointees that the OCC should consider in determining the composition of the Appeals Board that would be more likely to promote impartial decision-making?

5. What should be the criteria for those selected to serve on the Appeals Board as term appointees in terms of experience and independence? Should the rule further clarify what constitutes relevant experience for serving on the Appeals Board? Should there be a restriction on the Appeals Board being constituted exclusively of ex-OCC employees? Should there be a requirement that the Appeals Board include someone with community banking experience?

6. Are there other changes that would increase the independence of the Appeals Board and prevent the Appeals Board from being predisposed to find in favor of the supervisory office?

7. Should the OCC implement a de novo standard of review as contemplated, or would it be a better use of agency resources to implement a standard of review more deferential to the work already done by the supervisory office? Should the OCC clarify the standard for the burden of proof, and, if so, what should that standard be?

8. Should the OCC maintain the current structure whereby supervised entities have the option to appeal to the appropriate Deputy Comptroller before appealing to the final decision maker (either the Appeals Board or the Ombudsman, depending on the structure ultimately chosen)?

9. Is the list of examples of OCC actions or decisions that can be appealed as material supervisory determinations sufficient, or are there further types of decisions that the OCC should explicitly note can be appealed?

10. Is the list of decisions that are excluded from the appeals process sufficient, or are there further types of OCC actions or determinations that should be excluded?

11. If one or more members of the Appeals Board is recused from deciding a matter due to conflicts of interest or having participated in the initial decision, and the remaining two members cannot come to a joint decision, how should the OCC decide the matter? Should the Comptroller decide the matter himself? Or should the Comptroller appoint someone else as the replacement such as the Ombudsman, the Chief Counsel, or another term appointee?

12. When discussing the relevant experience required for members of the Appeals Board, the proposed regulation would provide that “a person will be considered to have such required expertise if the person has significant executive, professional, educational, or regulatory experience in banking supervision.” Does this standard need further clarification or refinement? Should the OCC have a more detailed standard, or a more flexible standard? Is there a different standard that would be more appropriate?

13. Are the deadlines proposed for an appellant filing an appeal and the OCC rendering a decision reasonable? Have the current deadlines and timeframes contained in the 2013 Guidance been appropriate?

14. If the OCC does adopt the proposal to replace the Ombudsman with an Appeals Board, is the proposed one-year term the appropriate term length for the term appointees? Or would it work better for the term appointees to have two-year, three-year, or four-year terms? If the OCC does select a term longer than one year, should it stagger the terms so that term appointees do not all change at the same time? Would the frequent staffing changes that such a short term would dictate cause delays in the processing of matters? Given the high level of expertise required of the members of the Appeals Board, would it be difficult for the OCC to hire the necessary experts for such short durations?

15. Are the expedited procedures for determinations that cause an institution to become critically undercapitalized appropriate? Should the timelines for such matters be longer or shorter? The OCC is considering implementing a shorter timeline and is contemplating timelines between 10 and 30 days. Are there other types of determinations that should also be subject to expedited procedures such as a potential program violation of the Bank Secrecy Act that involves a risk of money laundering or Office of Foreign Asset Controls sanctions violations?

16. Would the proposed rule have any costs, benefits, or other effects that the OCC has not identified? If so, please describe any such costs, benefits, or other effects.

17. Is the proposed definition of “substantively involved” appropriate? Will this definition help ensure independence of the process? Would a different definition be more appropriate?

18. The OCC is considering making the term appointees part-time positions. While the OCC would observe all applicable ethics laws for the term appointees, the agency is considering allowing the term appointees to hold outside employment while serving on the Appeals Board. Would there be a conflict of interest if the term appointees are employed outside of the OCC while serving on the Appeals Board? If the OCC does choose to make the term appointee positions part-time, what restrictions should the OCC place on outside employment? For instance, would a bank be comfortable having its appeal heard by someone who is employed by a competitor? Should the term appointees be permitted to work for another government agency or for a consulting firm?

19. Currently, the proposed rule provides that the Appeals Board can issue a stay of a decision while an appeal of that decision is pending. Should the OCC also give the Ombudsman the ability to issue a stay of a decision pending an appeal?

20. Should appeals of decisions related to licensing applications that cause a delay in the licensing application being decision be considered on an expedited basis?

As previously discussed, the OCC believes the proposed rulemaking is necessary to ensure that the OCC's process for appeals of material supervisory determinations provides a meaningful opportunity for supervised entities to challenge OCC decisions and actions. Currently, the standard of review for an appeal is not clear. For example, the OCC's guidance remains silent on whether the Ombudsman and Deputy Comptroller will apply a de novo standard of review or whether they will defer to the judgment of the supervisory office and only overruling findings where there is clear error. The proposed changes are designed to enhance the independence of the appeals process and the transparency of the OCC's decision-making standards with the goal of increasing regulated entities' confidence in the appeals process and their protections against retaliation for using the process while affording the public an opportunity to provide comments on changes to the process.

The proposed rule would move the Ombudsman from the role of decision maker on appeals to the role of a neutral liaison between the OCC and its supervised institutions who are seeking redress. The role of decision maker for appeals would be assigned to a newly created Appeals Board. The proposed rule is soliciting public feedback on how the Appeals Board should be composed, but it is proposing that it be composed of two term appointees selected by the Comptroller who are not current OCC employees and one OCC employee, possibly the Chief National Bank Examiner.

Another major change in the proposed rulemaking would be the adoption of a formal de novo standard of review. As previously stated, the current guidance is silent on the standard of review.

The proposed rule adopts the list of what is appealable and not appealable from the current guidance with certain additions and clarifications. It maintains the current prohibition on appeals of formal enforcement orders, a determination to appoint a conservator or receiver, or a decision to take action pursuant to 12 U.S.C. 1831, which provides authority for regulators to take prompt corrective action to resolve problems that could impose losses on the deposit insurance fund.

The proposed rule would maintain the current deadlines for submission of the appeal and related materials and the OCC's review of the appeal. The proposal would establish standards for independence for those involved in reviewing the appeal. It would provide for the publication of the final decision and any dissent in writing.

The proposed rule would also expand the role and responsibilities of the Ombudsman. Rather than being the decision maker in the appeals, the Ombudsman would act as a neutral liaison for supervised entities considering filing an appeal or another grievance against the OCC. The Ombudsman would also have the new duty of issuing an annual report to the Comptroller detailing trends and issues it has observed. The Ombudsman would continue to have the duty of reaching out to institutions after they have appealed to determine their satisfaction with the process and whether they believe they have suffered any retaliation for filing the appeal. In addition to this duty, the proposal would have the Ombudsman reach out to institutions after each examination to determine whether they have grievances or concerns stemming from the examination.

The proposed rule would establish standards for when a stay of a decision would be granted pending an appeal, would clarify the record on review, and would clarify the authority of the Comptroller. In addition, the proposed rule would clarify that neither the OCC nor any of its employees can discourage a supervised entity from filing an appeal or from otherwise communicating concerns or objections to the OCC through the appeals process, through the Ombudsman's office, or through any other channel. As well, the proposed rule further provides that if the Appeals Board finds in favor of a supervised entity on an appeal, the OCC may not impose a substantially similar material supervisory determination based on the same underlying facts in future material supervisory determinations.

The OCC currently supervises approximately 998 national banks and Federal savings associations (banks). Because the proposed rule revises the appeals process for all OCC-regulated banks, the proposed rule would affect all 998 OCC-regulated banks.

In addition, the OCC notes that the proposed rule would cover the appeals of permitted payment stablecoin issuers that will probably fall under OCC supervision in the near future. Because the OCC does not have experience supervising this novel industry, the agency does not believe that it can accurately predict how many stablecoin issuers the OCC will supervise.

The baseline for the proposed rule includes the pre-existing review process which is described in the 2013 Guidance. The 2013 Guidance provides a process for appeals for OCC institutions whereby these institutions may appeal to the Ombudsman for a reconsideration of material supervisory determinations. The proposed rule would replace this guidance.

When the OCC evaluates the costs and benefits of the mandates and effects of the proposed rule, the agency evaluates the costs and benefits of the mandates that impose costs beyond those already incurred in the existing process.

The Agency also notes that its evaluation of the proposed rule only evaluates the impact of the differences between the proposed rule and the baseline. That is, the agency does not incorporate possible changes stemming from other OCC guidance or rules when evaluating the impact of this proposed rule. The agency assumes that all other factors, such as the number of possible appeals and the types remain the same.

The agency expects that both the OCC and OCC-regulated institutions would be affected by the proposed rule. The agency expects that the OCC would incur costs in setting up the new appeals process and processing new appeals. The agency also expects OCC-regulated institutions would incur costs in making more appeals that they may not have made under the 2013 Guidance, but also may benefit from having a greater number of appeals potentially approved and stays granted due to the proposed rule.

To calculate the costs and benefits of the proposed rule, the agency first estimates the number of new appeals, the expected percentage increase in accepted appeals, and the percentage of stays granted from appeals due to the proposed rule. The agency expects that the proposed rule would increase the number of appeals that OCC-regulated institutions make because of the proposal's de novo standard of review, the possibility of receiving a temporary stay from filing an appeal, the possibility of receiving expedited review, and the assistance that appellants would receive in making appeals from the newly independent Ombudsman. The agency believes that the increased clarity in the appeals process articulated as well as other changes ( e.g., stays) would significantly increase the number of appeals relative to the appeals that would continue to take place under the baseline.

To estimate the number of new appeals, the OCC used information from a survey of regulated financial institutions exploring their desires to make appeals cited in a study by Hill (2015). 20 Hill cited survey data that the OCC believes suggests that OCC-regulated institutions would appeal supervisory determinations at a significantly higher rate than they have historically. The study stated that:

Although Hill cited data on credit unions, the OCC believes that OCC and credit union regulations and supervision are similar enough to justify extrapolating conclusions from credit union survey responses to OCC-regulated institutions. And coupled with Hill's citing of banks' general dissatisfaction with examinations and CAMELS ratings, the OCC believes that her study provides a sufficient basis for the agency to expect the revised appeal process in the proposed rule would increase the number of appeals made by OCC-regulated institutions.

The article also stated that the survey responses were voluntary and that responses could be biased toward respondents with grievances that are more likely to complain. Therefore, this analysis expects that the claim that 21 percent of credit unions would appeal could overstate the number of institutions that would like to appeal supervisory actions. However, since these percentages of credit unions seeking to appeal are much higher than past appeal rates that the OCC has observed amount OCC-supervised institutions, the OCC takes these statements as reasonable support for believing that the number of appeals could significantly increase due to the proposed rule.

Based on this information, the OCC concludes that it expects the new appeals process would significantly increase the number of appeals. The agency notes that in the past five years, the OCC received only five appeals per year on average. Based on the above articles and subject matter expert (SME) input that also suggests appeals could significantly increase, the agency estimates that appeals could increase by 50 appeals per year if five percent of OCC regulated banks make an appeal each year under the new process. This represents a much smaller percentage of institutions predicted to appeal than the 21 percent number from the article by Hill (2015) and still represents a large, predicted increase in appeals relative to recent appeal rates.

The OCC assumes that the average appeal would have an equal likelihood of success or failure under then proposed rule because the new appeals system would not defer to supervisory determinations and because the new appeal system would not treat any party preferentially. Therefore, the OCC predicts that 50 percent of appeals would be successful and therefore, there would be 25 successful new appeals per year due to the proposed rule.

The agency notes that this implies that it predicts that the proposed rule would increase the acceptance rate for appeals, as the pre-existing appeals system resulted in appeals that favored supervisors more on average. This would imply that the agency would expect the percentage of appeals decided in favor of banks would rise from under 50 percent to 50 percent under the proposed rule.

The OCC also wanted to address the possibility that supervisory staff could anticipate which appeals would most likely succeed and cease making supervisory determinations that would be likely to be successfully appealed. In the extreme, the agency could expect that supervision could potentially anticipate nearly all supervisory determinations that would be successfully appealed under the proposed rule and that there could be very few successful appeals following the enactment of the proposed rule.

If the agency expected this to be the most likely scenario to result from the proposed rule, it would revise our numbers to predict 25 appeals without any successful appeals. However, it would then revise the analysis to state that the deterrence of the 25 appeals that would have been approved would have been an effect of the proposed rule. And it would state that even though no appeals were successful in this case, the rule would result in a cost savings to the banks by reducing the number of supervisory determinations that may likely be overturned on appeal.

Therefore, if the proposed rule would result in a decrease in supervisory determinations because examiners anticipate and refrain from making determinations that would be ruled in favor of the bank, the overall conclusion remains the same. In fact, there may be even more cost savings because neither the banks nor the OCC would have to incur costs associated with the appeal process for cases that would likely have been overturned from the new appeals process.

However, the agency would assume for its analysis of expected effects that supervisors would not change the way in which they make supervisory determinations in response to the proposed rule, and the agency believes that its estimate of 50 appeals is more realistic.

For the purpose of the remainder of the analysis, the agency assumes that examiners would not change their decisions as to whether or not they make supervisory determinations in response to the proposed rule. However, the agency notes that our overall cost estimate for the proposed rule would be decreased for each determination that would not be made in response to the proposed rule.

Finally, to estimate the benefits of stays that would be granted under the proposed rule, the agency assumes that as an upper bound, all appeals would be granted a temporary stay of supervisory actions. Therefore, the OCC predicts that there would be 50 stays granted per year due to the proposed rule. A stay suggests that if the appeal is not overturned, the cost associated with addressing the supervisory determination would be shifted in the future, while for those that are eventually overturned, there would be cost savings associated with not having to start addressing the supervisory determination during the appeals process. On net, the OCC believes the stays would result in a cost savings to the bank.

Because the proposed rule states that the OCC would incur the costs of hiring two new full time appeals board members, the OCC estimates that this mandate would cause the OCC to incur an expense for these staff of $730,800 per year ($730,800 = 2 × $365,400 salaries and benefits for appeals board members).

The agency also expects that the OCC could incur some costs under the proposal to gather new information on certain appeals and obtain additional staff as needed to investigate appeals. Additional resources for appeals would be needed because of the enhanced standard of independent review under the de novo standard of appeal. This is because the de novo standard which requires reviewers to freely consider the matter anew, as if no decision had been rendered below, on the materials in the review record, without deferring to any prior determinations.

To estimate these costs, the agency assumes that the deputy comptroller and Appeals Board would have one staff member allocated to an appeal. The OCC assumes that support staff would separately spend at most 2 full days supporting the appeal to both the deputy comptroller and the appeals board. The analysis assumes that the hourly wage for OCC support staff for appeals would be $173.75 per hour. Given this wage, the OCC would incur a cost for support staff of $556,000 ($556,000 = 4 days × 2 staff × 8 hours × $173.75 × 50 appeals).

Therefore, the OCC calculates that in total the OCC would incur total costs from the proposed rule of $1,286,800.00 ($1,286,800.00 = $556,000 + $730,800).

The OCC expects that OCC regulated entities would result in cost savings due to the increased number of successful appeals. In discussions with internal SMEs with regard to the cost of supervisory actions, the SMEs have suggested that the upward bound of consulting costs to remediate a matter requiring attention (MRA) could range upwards of several million dollars, depending on the size and complexity of the institution as well as the complexity and the severity of the MRA.

Because supervisory determinations cover a broad range of actions, some of which would be less costly than MRAs for institutions to resolve, the OCC estimates that OCC-regulated entities would save $1,000,000 in expenditures from resolving a supervisory determination for each successful appeal. The OCC expects that $1,000,000 would be a conservative estimate that reflects the lower end of the SME range of cost savings for supervisory determinations terminated under appeal.

Therefore, since this analysis stated earlier that the OCC expects entities to obtain 25 successful appeals per year, the OCC estimates that total cost savings from the rule would be $25 million per year ($25 million = 25 × $1,000,000).

The OCC also expects that OCC-regulated entities would benefit from the discounted-time-value of delaying expenditures to comply with supervisory determinations for appeals that are not found in favor of the appellant. The benefit from delaying expenditures would be the difference between $1,000,000 expenditure that institutions would incur to immediately resolve a supervisory determination and the value of a $1,000,000 expenditure that would be made following the failure of an appeal.

Since the appeals board and the deputy comptroller each have 45 days to decide on appeals, the OCC assumes that the expenditures would be delayed by roughly 90 days. Therefore, the OCC would like to calculate the value of a $1,000,000 expenditure 90 days in the future. As stated earlier, the OCC estimates that 25 out of 50 appeals would receive a stay and be unsuccessful, and therefore, 25 appeals would benefit from delaying expenditures under a stay. If the analysis assumes a discount rate of 7 percent as suggested by OMB, the discounted value of the $1,000,000 expenditure over the 90 day stay period to regulated entities would be $24.57 million [$24.57 million = 25 × $1,000,000/(1 + (.07 × (90/360)))]. Therefore, the total savings to regulated institutions from delaying expenditures would be $429,975 ($429,975 = $25 million−$24.57 million).

Because the OCC expects the proposed rule to induce OCC-regulated entities to increase the number of appeals entities would make relative to the regulatory baseline, the OCC predicts that, due to the proposed rule, these entities would incur costs in making these additional appeals.

The OCC estimates that entities would incur an average cost of $100,000 to make an appeal. This would include the costs of internal staff and resources and the hiring of legal representation and any other outside services to make the appeal. Therefore, the OCC expects banks would incur costs of $5 million ($5 million = 50 × $100,000) to make new appeals under the proposed rule.

The OCC estimates that the proposed rule would result in an ongoing total yearly net benefit of $19,143,200. This net benefit reflects the total gross savings to OCC regulated entities of $25,430,000 due to overturned and delayed supervisory determinations less $5 million in costs cost incurred from OCC regulated entities appealing 50 supervisory determinations. The OCC would incur total costs of $1,286,800 from implementing the process articulated in the proposed rule.

The Paperwork Reduction Act of 1995  22 (PRA) states that no agency may conduct or sponsor, nor is the respondent required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC has reviewed this proposed rule and determined that it does not create any new or revise any existing collection of information pursuant to the PRA. Accordingly, no PRA submissions to OMB will be made with respect to this proposed rule.

As part of our analysis, the OCC considers whether the proposed rule would have a significant economic impact on a substantial number of small entities, pursuant to the Regulatory Flexibility Act. The OCC currently supervises approximately 609 small entities, all of which may be impacted by the proposed rule. 23

In general, the OCC classifies the economic impact on an individual small entity as significant if the total estimated impact in one year is greater than 5 percent of the small entity's total annual salaries and benefits or greater than 2.5 percent of the small entity's total non-interest expense. Furthermore, the OCC considers 5 percent or more of OCC-supervised small entities to be a substantial number. Thus, at present, 30 OCC-supervised small entities would constitute a substantial number.

While our analysis concludes that all small OCC-regulated entities would be subject to the proposed rule, the OCC does not believe 30 OCC-supervised small entities would increase their number of appeals nor would any small entity spend over 5 percent of their total annual salaries and benefits or greater than 2.5 percent of the small entity's total non-interest expense to appeal in one year. Accordingly, the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities.

The OCC has analyzed the proposed rule under the factors in the Unfunded Mandates Reform Act of 1995 (UMRA). 24 Under this analysis, the OCC considered whether the proposed rule includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year ($187 million as adjusted annually for inflation). Pursuant to section 202 of the UMRA, 25 if a proposed rule meets this UMRA threshold the OCC would need to prepare a written statement that includes, among other things, a cost-benefit analysis of the proposal.

The OCC's estimated UMRA cost is a net benefit of $20,430,000. This net benefit reflects the total gross savings to OCC regulated entities of $25,430,000 due to overturned and delayed supervisory determinations less $5 million in costs cost incurred from OCC regulated entities appealing 50 supervisory determinations. Therefore, the OCC finds that the proposed rule does not trigger the UMRA cost threshold. Accordingly, the OCC has not prepared the written statement described in section 202 of the UMRA.

Pursuant to section 302(a) of the Riegle Community Development and Regulatory Improvement Act of 1994, 26 in determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, the OCC must consider, consistent with principles of safety and soundness and the public interest (1) any administrative burdens that the final rule would place on depository institutions, including small depository institutions and customers of depository institutions and (2) the benefits of the final rule. This rulemaking would not impose any reporting, disclosure, or other requirements on insured depository institutions. Therefore, section 302(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 does not apply to this rulemaking.

The Providing Accountability Through Transparency Act of 2023  27 requires that a notice of proposed rulemaking include the internet address of a summary of not more than 100 words in length of a proposed rule, in plain language, that shall be posted on the internet website www.regulations.gov.

The Office of the Comptroller of the Currency (OCC) is issuing a notice of proposed rulemaking to establish revised procedures and policies for appeals of material supervisory determinations by OCC supervised entities. The proposed changes would reflect the OCC's experience administering the bank appeals process and are intended to enhance the independence and efficiency of the appeals function. The proposed changes would include changing the role of the Ombudsman, establishing an Appeals Board to decide appeals, and clarifying a de novo standard of review.

The proposal and the required summary can be found for the OCC at https://www.regulations.gov by searching for Docket ID OCC-2026-0001 and https://occ.gov/topics/laws-and-regulations/occ-regulations/proposed-issuances/index-proposed-issuances.html.

Executive Order 12866, titled “Regulatory Planning and Review,” as amended, requires the Office of Information and Regulatory Affairs (OIRA), OMB, to determine whether a proposed rule is a “significant regulatory action” prior to the disclosure of the proposed rule to the public. If OIRA finds the proposed rule to be a “significant regulatory action,” Executive Order 12866 requires the OCC to conduct a cost-benefit analysis of the proposed rule and for OIRA to conduct a review of the proposed rule prior to publication in the Federal Register . Executive Order 12866 defines a “significant regulatory action” to mean a regulatory action that is likely to (1) have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866.

OIRA has determined that this proposed rule is not a significant regulatory action under section 3(f)(1) of Executive Order 12866 and, therefore, is subject to review under Executive Order 12866. The OCC's analysis conducted in connection with Executive Order 12866 is included above under the “Expected Impacts” section of this document.

Executive Order 14192, titled “Unleashing Prosperity Through Deregulation,” was issued on January 31, 2025. Section 3(a) of Executive Order 14192 requires an agency, unless prohibited by law, to identify at least ten existing regulations to be repealed when the agency publicly proposes for notice and comment or otherwise promulgates a new regulation. In furtherance of this standard, section 3(c) of Executive Order 14192 requires that the new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least ten prior regulations.

Under E.O. 14192, although the OCC predicts that the OCC and OCC-regulated institutions would incur new expenditures due to the proposed rule, the agency concludes that the proposed rule is deregulatory because it would provide standards for institutions appealing OCC material supervisory determinations to receive a stay during the pendency of the appeal. Since more institutions would be able to receive a stay during their appeal and thus avoid expending resources to comply with OCC determinations that may ultimately be overturned, it would have a minor net cost savings for OCC institutions.

For the reasons set forth in the preamble, the OCC proposes to amend chapter I of title 12 of the Code of Federal Regulations as follows:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments using a method listed under the ADDRESSES section. Include “Docket No. FAA-2026-1329; Project Identifier AD-2025-01626-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, 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 proposal 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 NPRM.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Taylor Stanley, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; phone: 407-852-7677; email: taylor.stanley@faa.gov . Any commentary that the FAA receives that is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA has received a report of a supplier notice of escapement documenting that some titanium cargo track crown fittings had suspect material certifications. The supplier did not have correct material records to make sure that type design specified material was used. The FAA is issuing this AD to address suspect material certifications on the titanium track crown fittings. The unsafe condition, if not addressed, could result in cargo track failure and could lead to uncommanded movement of the cargo pallet and subsequent damage to critical systems located in the sidewall or ceiling area of the main cargo compartment, along with inability of a principle structural element to sustain limit loads, which could significantly affect controllability of the airplane.

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

The FAA reviewed Boeing Alert Requirements Bulletin 767-53A0337 RB, dated October 17, 2025. This material specifies procedures for an XRF spectrometer inspection to identify the material composition of the cargo track crown fittings and applicable on-condition actions. On-condition actions include replacing each affected cargo track crown fitting with a new cargo track crown fitting having Ti-6Al-4V alloy material. This material also specifies, as an option, procedures for replacement of all cargo track crown fittings with new cargo track crown fittings having Ti-6AI-4V alloy material.

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

This proposed AD would require accomplishing the actions specified in the material already described, except for any differences identified as exceptions in the regulatory text of this proposed AD. For information on the procedures and compliance times, see this material at regulations.gov under Docket No. FAA-2026-1329.

The FAA estimates that this AD, if adopted as proposed, would affect 43 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments using a method listed under the ADDRESSES section. Include “Docket No. FAA-2026-1328; Project Identifier MCAI-2025-00462-T” at the beginning of your comments. The most helpful comments reference a specific portion of the proposal, 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 proposal 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 NPRM.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Andrew Younglove, Aviation Safety Engineer, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone 206-231-3644; email: andrew.e.younglove@faa.gov. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

The FAA issued AD 2021-03-08, Amendment 39-21411 (86 FR 16038, March 26, 2021) (AD 2021-03-08), for certain Airbus SAS Model A350-941 and -1041 airplanes. AD 2021-03-08 was prompted by an MCAI originated by EASA, which is the Technical Agent for the Member States of the European Union. EASA issued AD 2020-0139R1, dated July 3, 2020 (EASA AD 2020-0139R1), to correct an unsafe condition.

AD 2021-03-08 requires repetitive inspections for migration of the bushings of the HTP LLF on the left- and right-hand sides and terminating repair or modification of any affected bushing. The FAA issued AD 2021-03-08 to address combined corrosion and fatigue damage of the primary structure, possibly resulting in failure of the HTP LLF and damage to adjacent structure, which could result in reduced controllability of the airplane.

Since the FAA issued AD 2021-03-08, EASA superseded EASA AD 2020-0139R1 and issued EASA AD 2025-0073, dated April 3, 2025 (EASA AD 2025-0073) (also referred to as the MCAI), to correct an unsafe condition for certain Airbus SAS Model A350-941 and -1041 airplanes. The MCAI states that new occurrences of bushing migration on HTP LLF have been reported on airplanes with modification 110669, which were not in the applicability of EASA AD 2020-0139R1. Additionally, it has been determined that the repair instructions provided by Airbus Service Bulletin A350-55-P013at any revision can no longer be considered terminating action for the repetitive inspections.

The FAA is proposing this AD to address combined corrosion and fatigue damage of the primary structure, possibly resulting in failure of the HTP LLF and damage to adjacent structure, which could result in reduced controllability of the airplane. You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2026-1328.

Although this proposed AD does not explicitly restate the requirements of AD 2021-03-08, this proposed AD would retain certain requirements of AD 2021-03-08. Those requirements are referenced in EASA AD 2025-0073, which, in turn, is referenced in paragraph (g) of this proposed AD.

The FAA reviewed EASA AD 2025-0073, which specifies procedures for repetitive detailed inspections (DET) for discrepancies ( e.g., broken sealant and migration) of the bushings of the HTP LLF on the left- and right-hand sides, and repair or modification of any affected bushing. EASA AD 2025-0073 specifies that modification of affected bushings terminates the repetitive inspections. EASA AD 2025-0073 also requires reporting inspection results to Airbus. EASA AD 2025-0073 also provides, for certain airplanes, an optional method of compliance for doing the initial inspections. 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 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 NPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in EASA AD 2025-0073 described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate EASA AD 2025-0073 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2025-0073 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2025-0073 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 2025-0073. Material required by EASA AD 2025-0073 for compliance will be available at regulations.gov under Docket No. FAA-2026-1328 after the FAA final rule is published.

The FAA estimates that this AD, if adopted as proposed, would affect 36 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend Class D and Class E2 airspace in Wilmington, DE.

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should submit only one time if comments are filed electronically, or commenters should send only one copy of written comments if comments are filed in writing.

The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The FAA may change this proposal in light of the comments it receives.

Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edits, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

An electronic copy of this document may be downloaded through the internet at www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's web page at www.faa.gov/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Operations office (see ADDRESSES section for address, phone number, and hours of operations). An informal docket may also be examined during regular business hours at the office of the Eastern Service Center, Federal Aviation Administration, Room 210, 1701 Columbia Ave., College Park, GA 30337.

Class D and Class E2 airspace designations are published in paragraphs 5000 and 6002 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document proposes to amend the current version of that order, FAA Order JO 7400.11K, dated August 4, 2025, and effective September 15, 2025. These updates would be published in the next update to FAA Order JO 7400.11. FAA Order JO 7400.11K, which lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points, is publicly available as listed in the ADDRESSES section of this document.

This action proposes to amend 14 CFR part 71 by modifying both the Class D airspace and Class E2 airspace for New Castle Airport, Wilmington, DE. Controlled airspace is necessary for the safety and management of IFR operations in the area for existing instrument approach procedures. A review of the current airspace revealed a need for a modification to the lateral dimensions. The proposal would add an arrival extension to the north to encompass IFR operations on the RNAV RWY 19 approach to Newcastle Airport. The 1,000 ft. above ground level (AGL) point on the arrival is outside the basic radius of the Class D/E2 (3.72 NM from the arrival runway threshold), so a .2 NM extension is required.

Specifically, this action proposes to increase the lateral dimensions of the Wilmington, DE Class D airspace, serving New Castle Airport, from a 4.2-mile radius of the airport to a 4.2-mile radius of the airport, and within 1 mile each side of the 008° bearing from the airport extending from the 4.2-mile radius to 4.4 miles north of the airport.

This action also proposes to increase the lateral dimensions of the Wilmington, DE Class E2 airspace, serving New Castle Airport, from a 4.2-mile radius of the airport to a 4.2-mile radius of the airport, and within 1 mile each side of the 008° bearing from the airport extending from the 4.2-mile radius to 4.4 miles north of the airport.

This action also proposes to update the language in both the Class D and Class E2 airspace for Wilmington, DE by changing “Notice to Air Missions” to “Notice to Airmen”. This change will bring the airspace legal descriptions into compliance with current FAA directives.

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

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1G, “FAA National Environmental Policy Act Implementing Procedures” prior to any FAA final regulatory action.

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

The Coast Guard proposes revising its regulation for recurring fireworks displays in the geographic boundaries of the Northwest District Sector Columbia River Captain of the Port (COTP) Zone, 33 CFR 165.1315. This proposed rule would add one (1) safety zone for a new, recurring fireworks display that was previously published as a temporary safety zone. This proposed rule would also remove one (1) previously established safety zone for a fireworks display. This proposed rule would change the name of an existing fireworks display. Finally, this rule would add a second date for an existing fireworks display. The purpose of this revision is to provide the public accurate information regarding safety zones for annual fireworks displays in the Sector Columbia River Captain of the Port Zone.

The Sector Columbia River COTP has determined that fireworks displays create hazardous conditions for the maritime public because of the large number of vessels near the displays, as well as the noise, falling debris, and explosions that occur during the events. Because firework discharge sites pose a potential hazard to the maritime public, these safety zones are necessary to restrict vessel movement and reduce vessel congregation near firework discharge sites. Therefore, the COTP is proposing 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 regulatory text we are proposing appears at the end of this document.

The Coast Guard proposes establishing a safety zone for one fireworks display event (Irrigon Watermelon Festival) that occurs annually in July. The Irrigon Watermelon Festival safety zone was previously issued as a temporary final rule (Docket Number USCG-2025-0691), and after conferring with the event sponsor, the Coast Guard has learned it will be a recurring fireworks display. The safety zone will cover all navigable waters within 550 feet of the launch site located at approximately 45°54′3.72″ N, 119°29′15.36″ W at Marina Park, located in Irrigon, OR. No vessel or person would be permitted to enter the safety zone without obtaining permission from the COTP or their designated representative.

The Coast Guard also proposes to disestablish a safety zone for one fireworks display event (Westport 4th of July). The Westport 4th of July event has moved inland and thus is no longer subject to the authority and jurisdiction of the Coast Guard.

The Coast Guard proposes to change the name of “The Mill Casino Independence Day” fireworks display to “Ko-Kwel Casino Resort Independence Day Celebration” to reflect the changed name of the event.

Finally, the Coast Guard proposes to change the date of the “Portland Rose Festival Fireworks” from “one day in May or June” to “one day in May and one day in June,” to reflect an additional day of the Festival's fireworks.

We developed this proposed 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 Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities for the following reasons.

Vessel traffic will be able to safely transit around this regulated area. This regulation will only impact a small area for a few hours. The enforcement period is during a time when vessel traffic is normally low. In addition, the Coast Guard will issue a Broadcast Notice to Marines via VHF FM marine channel 16, which will allow small entities to adjust their transit plans, and the rule allows vessels to request permission to enter the regulated area from the COTP.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this proposed rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this proposed 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).

This proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 proposed rule, which establishes a safety zone and disestablishes a different safety zone, is categorically excluded from further review. The establishment of the safety zone is excluded under paragraph L60(a), and the disestablishment is excluded under paragraph L60(b) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting the establishment is available in the docket; however, one is not required for the disestablishment.

We view public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments at https://www.regulations.gov . To do so, go to https://www.regulations.gov, type USCG-2026-0025 in the search box and click “Search.” Next, look for this document in the Search Results column, and click on it. Then click on the Comment option. If you cannot submit your material by using https://www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in the docket. To view available documents, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. We will post public comments in our online docket. Additional information is on the https://www.regulations.gov Frequently Asked Questions web page.

Personal information. We accept anonymous comments. Comments we post to https://www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 165 as follows:

(a) Safety zones. The following areas are designated safety zones: Waters of the Columbia River and its tributaries, waters of the Siuslaw River, Yaquina River, Umpqua River, Clatskanie River, Tillamook Bay and waters of the Washington and Oregon Coasts, within a 450 yard radius of the launch site at the approximate locations listed in table 1.

The Coast Guard views public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.

Submitting comments. We encourage you to submit comments at www.regulations.gov. To do so, go to www.regulations.gov, type USCG-2024-0893 in the search box and click “Search.” Next, look for this document in the Search Results column and click on it. Then click on the Comment option. If you cannot submit your material by using www.regulations.gov, call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule for alternate instructions.

Viewing material in docket. To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the www.regulations.gov Frequently Asked Questions (FAQ) web page. That FAQ page also explains how to subscribe for email alerts that will notify you when comments are posted or if a final rule is published. We review all comments received, but we will only post comments that address the topic of the proposed rule. We may choose not to post off-topic, inappropriate, or duplicate comments that we receive.

Personal information. We accept anonymous comments. Comments we post to www.regulations.gov will include any personal information you have provided. For more about privacy and submissions to the docket in response to this document, see DHS's eRulemaking System of Records notice (85 FR 14226, March 11, 2020).

Public meeting. We do not plan to hold a public meeting, but we will consider doing so if we determine from public comments that a meeting would be helpful. We would issue a separate Federal Register notice to announce the date, time, and location of such a meeting.

The legal basis for this rulemaking is 46 U.S.C. Chapter 700, and specifically 46 U.S.C. 70003 and 70034. Section 70003 authorizes the Secretary to designate necessary fairways and traffic separation schemes for vessels operating in the territorial sea of the United States and in high seas approaches, outside the territorial sea, to provide safe access routes for the movement of vessel traffic proceeding to or from ports or places. Establishing the deeper fairways anchorage locations adjacent to the existing fairways would advance the Sabine Pass Fairway's purpose to provide safe access routes for the movement of vessel traffic proceeding to or from ports. Section 70034 grants the Secretary authority to issue regulations necessary to implement 46 U.S.C. Chapter 700, Subchapters I through IV, which includes Section 70001. The Secretary delegated these authorities to the U.S. Coast Guard in Department of Homeland Security (DHS) Delegation No. 00170.1, Revision No. 01.4, paragraph (II)(70).

The purpose of this rulemaking is to amend 33 CFR 166.200 to establish two new voluntary use fairway anchorages off the Texas and Louisiana coastlines. A chartlet and Geographic Information System data showing the proposed locations for the fairway anchorages are available in the docket for this rulemaking (see the Public Participation and Request for Comments portion of the preamble for directions on accessing the docket). The proposed regulations would provide charted locations for safe anchorage of vessels with drafts too deep to use existing fairway anchorages. Any vessel operator may use the fairway anchorages. The new fairway anchorages would reduce the potential for collisions, allisions, and groundings for vessels arriving, holding, or anchoring. For these reasons, the fairways anchorages would promote the efficient movement of commerce. The proposed deeper anchorage areas would also advance the goals of Executive Order 14154, Unleashing American Energy, by providing the unobstructed and safe flow of energy transportation, primarily petroleum tanker ships, to and from ports in the Sabine-Neches Waterway. Lastly, we propose revising an existing Sabine Bank fairway anchorage name to more accurately describe its location.

On July 22, 2011, the U.S. Army Corps of Engineers recommended deepening the Sabine-Neches Waterway (SNWW) from 40 feet to 48 feet and extending the offshore channel by 11.5 nautical miles to reach deeper water. The deepening project began in 2020 and is on-going at the time of publication of this proposed rule. For more information about how the joint U.S. Army Corps of Engineers and Sabine-Neches Navigation District deepening project will increase energy exports and deeper-draft vessel traffic in the SNWW, see the website https://navigationdistrict.org/deepening-project.

There are four existing fairway anchorages adjacent to the Sabine Bank and Sabine Pass fairways described in 33 CFR 166.200(d)(13)(i)-(iv). A fairway anchorage is a specific area, identified on a nautical chart, where vessels may drop anchor and not interfere with other transiting vessels. However, vessels with drafts deeper than 40 feet are unable to use these fairway anchorages because of the insufficient water depth in those fairway anchorage areas. Draft refers to the vertical distance between the waterline and the lowest part of a ship's hull or propellers or other appendages. In existing 33 CFR 166.105(b) we define Fairway anchorage as “an anchorage area contiguous to and associated with a fairway, in which fixed structures may be permitted within certain spacing limitations, as described for specific areas in Subpart B.” The Coast Guard has historically used fairway anchorages adjacent to shipping safety fairways to promote the statutory goal of promoting safe and efficient transit of vessel traffic to and from our ports. The existing fairway anchorages and their relevant shipping safety fairway are listed in section 166.200.

Currently, three fairway anchorages are available for use outside the existing channel entrance. The relocation of the channel entrance 11.5 nautical miles into deeper waters results in no fairway anchorages available outside the channel entrance. Other facilities and obstructions in the area, such as oil rigs, submerged pipelines, and shoals (bottom features dangerous to navigation), also limit the ability of deeper-draft vessels to anchor safely. Local pilots have requested Coast Guard assistance in establishing these fairway anchorages for vessels with drafts exceeding 40 feet and whose operators are unfamiliar with the area. The new proposed deeper anchorages will be outside of this safe water mark. In addition to deeper-draft vessels, some companies require a pilot when transiting the channel. Therefore, we anticipate that a majority of vessels capable of anchoring in the existing fairway anchorages would, nevertheless, use these proposed new fairway anchorages to reduce risk consistent with safety management systems.

In January 2021, the Sabine Pilots Association (licensed professional mariners charged with the safe navigation of vessels on the SNWW) requested that the Coast Guard create two new fairway anchorages, adjacent to the existing safety fairway, to accommodate deep-draft vessels that are unable to use existing fairway anchorages. In response, we propose putting the fairway anchorages approximately 28 nautical miles south-southeast of Sabine Pass, TX, on the east and west sides of the exiting Sabine Bank approach fairway. We would establish the fairway anchorages in water deep enough for deeper-draft vessels. The combined surface area of the two proposed fairway anchorages would be approximately 37.1 square statute miles. Tables 1 and 2 show the proposed fairway anchorages coordinates (World Geodetic System 1984 (WGS84)). The proposed Sabine Bank Approach (East) Anchorage Area would include the area enclosed by rhumb lines joining points at:

The coordinates (WGS84) for the proposed Sabine Bank Approach (West) Anchorage Area would include the area enclosed by rhumb lines joining points at:

Establishing these fairway anchorages would provide unobstructed anchorage areas adjacent to existing shipping safety fairways. The fairway anchorages play a crucial role in advancing the goal of facilitating commerce by enhancing the safety, efficiency, and predictability of maritime operations. By creating defined fairway anchorages, vessels can wait for clearance or better weather conditions without blocking important routes or causing congestion. This enhances the flow of traffic and helps maintain the schedule of cargo delivery, reducing delays in the global supply chain. The time saved by reducing the need for vessels to maneuver around unsuitable anchorage areas or wait in less organized spaces directly supports faster, more predictable commerce.

If adopted, the fairway anchorages would be documented on navigational charts maintained by other agencies. The charts would be the primary way to identify the fairway anchorages' locations. There are currently no plans to place physical markers or buoys around the proposed fairway anchorages. None of the other Gulf of America fairways anchorages are marked with physical aids either, but they are usually marked on nautical charts. Additional fairway anchorages adjacent to the fairways would reduce congestion in the waterway by providing more space for vessel berths, thereby clarifying vessel maneuver protocols in the SNWW. These proposed fairway anchorages, which we propose codifying in 33 CFR 166.200(d)(13)(v) and (vi), would provide adequate anchorage areas for deep-draft vessels that are unable to use the existing, more shallow fairway anchorages. The additional designated areas to anchor would enhance safe vessel movements for arriving and departing vessels because it creates safe areas where vessels should await port entry.

Relatedly, the Coast Guard published a notice on March 1, 2023 to announce a Port Access Route Study titled “Port Access Route Study: Approaches to Galveston Bay and Sabine Pass, Texas and Calcasieu Pass, Louisiana” at 88 FR 12966. The notice and related material are in docket USCG-2023-0063 on regulations.gov . Before establishing or adjusting fairways or TSSs, the Coast Guard must conduct a Port Access Route Study, a study of potential traffic density and the need for safe access routes for vessels. Through the study process, the Coast Guard coordinated with Federal, State, Tribal, and foreign state agencies and considered the views of maritime community representatives, environmental groups, and other stakeholders. The primary purpose of the coordination was, to the extent practicable, to reconcile the need for safe access routes with other reasonable waterway uses such as anchorages, construction, operation of energy facilities, marine sanctuary operations, commercial and recreational activities, and other uses. While the PARS is not required for establishing the fairways anchorage areas, the PARS is considering the need for anchorage areas. We will post the final report to the docket USCG-2023-0063 when we issue it.

Establishing two new fairway anchorages would limit construction of fixtures and obstructions within the designated areas by way of spacing restrictions. Structures may be placed within an area designated as a fairway anchorage, but they must meet existing spacing regulations in § 166.200(c)(1) for structures within fairway anchorages. Specifically, the center of a structure must be at least 2 nautical miles from the center of any existing structure. However, if a drilling or production complex extends more than 500 yards from the center, a new structure cannot be erected closer than 2 nautical miles from the outer limit of the complex per existing § 166.200(c)(4). There are no existing structures or obstructions in the proposed fairway anchorages at the time of publication of this proposed rule. As the federal government's waterway navigation safety expert, the Coast Guard reviews all offshore construction proposals through the Navigation Safety Risk Assessment process. The assessment ensures permitting agencies are advised of potential impacts to navigational safety and recommendations to mitigate or eliminate hazards to navigation. The Coast Guard works closely with NOAA to ensure charting of structures, obstructions, and hazards to navigation.

In addition, we propose to update the name of an existing Sabine Bank Offshore fairway anchorage, as described in existing 33 CFR 166.200(d)(13)(ii). We propose to change the name from “Sabine Bank Offshore (North) Anchorage Area” to “Sabine Bank Offshore (West) Anchorage Area.” “West” is a more accurate description of its location relative to the fairway. This proposed change to the fairway anchorage area name would not have any impact on the public.

We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. A summary of our analyses based on these statutes or Executive orders follows.

Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 14192 (Unleashing Prosperity Through Deregulation) directs agencies to significantly reduce the private expenditures required to comply with Federal regulations and provides that “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.”

The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action” under section 3(f) of Executive Order 12866.. Accordingly, OMB has not reviewed it.

This proposed rule, if finalized as proposed, is expected to be an Executive Order 14192 deregulatory action.

Currently, there are four existing fairway anchorages that are not deep enough to be used by vessels with drafts exceeding 40 feet that will transit the SNWW southeast of Sabine Pass, TX. As a result, these vessels may drift, loiter, or anchor in random, unmarked locations. The Coast Guard is proposing to establish two new fairway anchorages in this area, adjacent to the existing safety fairway, to allow vessels with deeper drafts to anchor. The creation of the two new fairway anchorages would benefit vessel owners and operators who transit this area because it would help in the movement of vessels, promote safe anchoring, and alleviate congestion in the waterway. We do not expect this proposed rule to impose any additional costs, other than minimal regulatory costs, on vessel owners and operators who transit this waterway or on the Federal Government. Table 3 provides a summary of the impacts of this proposed rule.

The use of these two proposed new fairway anchorages would be voluntary, and any vessel could anchor in these areas; however, these fairway anchorages would be intended primarily for use by deep-draft vessels. The number of U.S.-flagged vessels with drafts greater than 40 feet that call on the SNWW and would be able to use these two new fairway anchorages is an annual average of approximately 10 (see Table 7).

The cost savings of the proposed rule to owners and operators of U.S.-flagged vessels is based on the quantified fuel that would be saved with the new anchorage areas. We expect this proposed rule to generate cost savings from the reduction of time for U.S.-flagged deep draft vessels that call on the SNWW. Based on the information obtained from the Sabine Pilots  4 in the SNWW, vessel owners and operators would save approximately 30 minutes to 2 hours from maneuvering offshore while waiting to reach the safe water mark before they enter the new anchorage areas in the SNWW. There may be some occurrences during the year where vessels may wait longer outside of the safe water mark, but the estimates provided to us would be the typical waiting times without the new anchorage areas.

The establishment of these anchorages would reduce vessel fuel consumption because vessels would no longer wait or drift offshore using their main engines. As a result, owners and operators of these vessels would save fuel and fuel costs by directly entering the new anchorage areas and not waiting offshore. Once in the anchorage areas, vessels would revert to using generator power as they would do normally. Of the 302 unique U.S.-flagged vessels that called on the SNWW in the past 3 years, 298 of them were Panamax-class vessels. 5 Because Panamax vessels comprise nearly the entire population of U.S.-flagged vessels in this proposed rule, we will need to obtain the fuel type for this vessel class for the purpose of this cost savings analysis.

The average fuel consumption of Panamax class vessels is between approximately 30 to 35 metric tons per day. 6 Using data from U.S. Energy Information Administration (EIA), the cost of ULSFO is $1,029 per metric ton. 7 Using a 24-hour day and an average of 33 metric tons of fuel used in a day, a Panamax class vessel would use approximately 1.4 metric tons of fuel an hour (33 metric tons ÷ 24 hours). Therefore, the fuel cost for a Panamax class vessel that would wait offshore without the benefit of the new anchorage areas would be approximately $1,441($1,029 × 1.4) per hour, rounded. Using a low estimate of 30 minutes of waiting time, the fuel cost for a Panamax class vessel would be approximately $721, rounded. Using a high estimate of 2 hours, the fuel cost for a Panamax class vessel would be approximately $2,884, rounded. For the purpose of this analysis, we will use an average time of 1.25 hours or 75 minutes for our cost savings calculations.

Approximately 10 unique U.S.-flagged vessels call on SNWW every year. Based on Port Arthur VTS data, these 10 vessels make approximately 10 trips, rounded, each to the SNWW, or 100 total trips annually. Therefore, the fuel costs and subsequent fuel cost savings would be a function of the number of trips made by U.S.-flagged vessels. For the low estimate of 30 minutes of waiting time offshore without the new anchorage areas and using approximately 100 trips annually, the total time savings would be approximately 3,000 (30 minutes per trip × 100 trips) minutes or 50 hours annually. Using fuel cost per hour that we derived previously, the total undiscounted fuel cost savings for U.S.-flagged vessels that call on the SNWW would be approximately $72,050 annually (50 hours × $1,441/hour). Similarly, for the high estimate of 2 hours and using the same number of trips, the total time savings for the U.S.-flagged vessels that call on the SNWW would be approximately 12,000 minutes (120 minutes per trip × 100 trips) or approximately 200 hours annually. The total undiscounted fuel cost savings for U.S.-flagged vessels that call on SNWW would be approximately $288,200 annually (200 hours × $1,441/hour). Because we are using the average time estimate of 75 minutes (1.25 hours), the average annual undiscounted cost savings of this proposed rule U.S.-flagged vessel owners and operators would be approximately $180,125. See table 8.

Based on our analysis, we expect this proposed rule to generate cost savings for industry, or vessel owners and operators who transit the SNWW area, or shoreside facilities that receive cargo from deeper-draft vessels that would use the two new fairway anchorages. Table 9 presents the total quantified fuel cost savings to U.S.-flagged vessel owners and operators from the adoption of these two new anchorages in the SNWW. We estimate the total present value or discounted fuel cost savings to owners and operators of U.S.-flagged vessels over a 10-year period of analysis to be between $1.3 and $1.5 million, at 7- and 3-percent discount rates, respectively. We estimate the annualized fuel cost savings to owners and operators of U.S.-flagged vessels to be about $180,125 at each discount rate. We estimate that this rule generates $157,328 in net annualized fuel cost savings to owners and operators of U.S.-flagged vessels at a 7-percent discount rate, discounted relative to year 2024, over a perpetual time horizon.

This proposed rule would also generate cost savings for owners and operators of foreign-flagged vessels. The quantified fuel cost savings stem from the reduction of time for foreign flagged deep draft vessels that call on the SNWW. Following the same methodology that we used for U.S.-flagged vessels and using the average of time saved (1.25 hours) from the adoption of these anchorages and ULSFO cost of $1,029 per metric ton. For example, a Suezmax class vessel would consume approximately 2.4 metric tons of fuel per hour (58 metric tons ÷ 24 hours). Therefore, the fuel cost for a Suezmax class vessel that would wait offshore without the benefit of the new anchorage areas would be approximately $2,470 per hour (2.4 metric tons × $1,029 ULSFO cost per metric tons). Multiplying this by the time saved of 103 hours (1.25 average hours saved × 82 trips by Suezmax vessels) would generate approximately $254,410 in quantified fuel savings to foreign-flagged Suezmax vessels that transit the SNWW. Therefore, the total annual quantified fuel cost savings (undiscounted) for all 4 classes of foreign-flagged vessels that transit the SNWW is approximately $2.1 million. See Table 10.

Table 11 presents the total quantified fuel cost savings to owners and operators of foreign-flagged vessels from the adoption of these two new anchorages in the SNWW. We estimate the total present value or discounted fuel cost savings to owners and operators of foreign-flagged vessels over a 10-year period of analysis to be between $14.8 and $18.0 million, at 7- and 3-percent discount rates, respectively. We estimate the annualized fuel cost savings to owners and operators of foreign-flagged vessels to be approximately $2.1 million at each discount rate.

We request public comments on this preliminary analysis.

This proposed rule would designate two new fairway anchorages to accommodate vessels with deep drafts in the Sabine Bank and Sabine Pass fairways. The use of the two proposed new fairway anchorages by U.S.-flagged vessel owners and operators would be voluntary, and any vessel owner or operator may anchor in these new areas. The establishment of these two new fairway anchorages for vessels that transit the SNWW would provide safe access to the adjacent fairways, manage vessel activity, and help in secure anchoring and efficient movement of vessels from the fairway anchorages to the pilot boarding area. Vessels would utilize the fairway anchorages, as opposed to anchoring in unregulated areas with pipelines, or transiting in and around the highly trafficked safety fairways and energy production platforms. Access to charted fairway anchorages would enhance navigational safety by accounting for current and future growth of the marine transportation system (MTS) in this area and alleviate congestion in the SNWW, which may reduce the likelihood of a grounding, allision, or collision incident. It also preserves an efficient flow of commerce.

Additionally, this proposed rule will increase the efficient transportation of energy resources and advance our national energy dominance.

Alternative 1: Increase the number of the proposed fairway anchorages.

Under this alternative, the Coast Guard would establish three or more new fairway anchorages. This alternative would not impose any new regulatory costs on vessels owners and operators who transit this area. We rejected this alternative because it would not generate the optimal benefit for the marine industry. We want to designate the smallest area necessary to accomplish the objective. We do not anticipate needing the third fairway anchorage for the number of vessels transiting the area. The Sabine Pilots Association, based on their extensive knowledge of the use of and need for anchorages, determined and requested the establishment of only two new fairway anchorages in the SNWW.

Alternative 2: Reduce the size of one or both proposed fairway anchorages.

The Coast Guard considered a smaller, alternate fairway anchorage B, which would reduce the proposed anchorage areas in size and depth by approximately 25.1 percent. The Sabine Pilots Association provided this size estimate to the Coast Guard based on an increase in the scope of the anchor chain that would be needed as a result of an increase in the depth of the water. We rejected this alternative because it would provide less area for vessels to anchor and could create a marginal increase in the risk of collisions, allisions, and groundings when compared to the preferred alternative. This alternative would not impose any new regulatory costs on vessels owners and operators who transit this area. It would also not provide any additional benefits to vessel owners and operators because this anchorage area would be smaller in size and could increase congestion and the likelihood of incidents in this area, as opposed to the preferred alternative.

Alternative 3: Preferred Alternative.

With this alternative, the Coast Guard would designate two new fairway anchorages for use by vessel owners and operators in the Sabine Bank and Sabine Pass fairways. This is the preferred alternative because it would allow vessels with drafts greater than 40 feet to anchor. These vessels are currently unable to use the existing fairway anchorages because their drafts are deeper than the existing anchorages allow. This alternative provides designated locations for anchorage of deep-draft vessels, which promotes safe navigation for current and future growth of the MTS and alleviates congestion in the SNWW. This alternative would not impose any regulatory costs on vessels owners and operators who transit this area.

Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

As this rule imposes no regulatory costs on the affected population, the Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment to the docket at the address listed in the ADDRESSES section of this preamble. In your comment, explain why you think it qualifies and how and to what degree this proposed rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person in the FOR FURTHER INFORMATION CONTACT section of this proposed rule. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This proposed rule would call for no new or revised collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.

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

It is well settled that States may not regulate in categories reserved for regulation by the Coast Guard. It is also well settled that Congress gave the Coast Guard the authority to establish vessel movement restrictions in 46 U.S.C. 70001 and 70003. The proposed fairways would be located offshore in waters outside of State and local jurisdiction. The use of the new fairway anchorages would be voluntary for vessel operators. They would be available to use by any vessel transiting the area. Establishing the voluntary fairway anchorages would not interfere with other state requirements that apply to these vessels. Therefore, this proposed rule is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

While it is well settled that States may not regulate in categories in which Congress intended the Coast Guard to be the sole source of a vessel's obligations, the Coast Guard recognizes the key role that State and local governments may have in making regulatory determinations. Additionally, for rules with federalism implications and preemptive effect, Executive Order 13132 specifically directs agencies to consult with State and local governments during the rulemaking process. If you believe this proposed rule would have implications for federalism under Executive Order 13132, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section of this preamble.

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

This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630 (Governmental Actions and Interference with Constitutionally Protected Property Rights).

This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, (Civil Justice Reform), to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this proposed rule under Executive Order 13045 (Protection of Children from Environmental Health Risks and Safety Risks). This proposed rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.

This proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would 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.

We have analyzed this proposed rule under Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use). We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

The National Technology Transfer and Advancement Act, codified as a note to 15 U.S.C. 272, directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through OMB, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (for example, specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this proposed rule under Executive Order 12114, Environmental Effects Abroad of Major Federal Actions, as well as Department of Homeland Security's National Environmental Policy Act (NEPA) Procedures, Management Directive 023-01, Rev. 1, Associated Implementing Instructions, and Environmental Planning Policy, COMDTINST 5090.1 (series), and the Environmental Planning Implementing Procedures for COMDTINST 5090.1 Environmental Planning Policy (Feb. 2025). We have made a preliminary determination that this proposed rule would not significantly harm the environment.

The Coast Guard is conducting an environmental analysis pursuant to Executive Order 12114. NEPA does not apply to extraterritorial activities or decisions, which means agency activities or decisions with effects located entirely outside of the jurisdiction of the United States. 42 U.S.C. 4336e(10)(B)(vi).

For the reasons discussed in the preamble, the Coast Guard is proposing to amend 33 CFR part 166 as follows:

The Department seeks to clarify the appropriate use of the terms “regional” and “national” by an accrediting agency recognized by the Department when describing an accrediting agency's area of operation or recognition scope. This interpretive rule seeks to update and clarify the Department's position on the use of such nomenclature by accrediting agencies when describing their area of operation or recognition, as well as by higher education institutions, State licensure boards, and other stakeholders, when referencing accrediting agencies, as stated in the Student Assistance General Provisions, The Secretary's Recognition of Accrediting Agencies, and The Secretary's Recognition Procedures for State Agencies Final Rule (“Final Rule”) published on November 1, 2019. 84 FR 58834.

The Final Rule took effect on July 1, 2020, ending the Department's recognition of accrediting agencies as “regional.” Nevertheless, many accrediting agencies and institutions of higher education continue to use the term “regional” in their standards, marketing materials, and other representative texts. 1 As a result, the Department has a general interest in ensuring that accrediting agencies recognized by the Secretary, and institutions of higher education, do not make false statements and misrepresentations. The Department does not recognize accrediting agencies as “regional” accreditors, and the Department believes that these representations mislead the public, institutions of higher education, and students. Continued assertions that an institution is “regionally” accredited may send false signals to students and the public that an institution's accreditation is of a higher quality than institutions that are accredited by accrediting agencies that are nationally recognized. Indeed, when institutions properly refer to their accreditation as being from a nationally recognized accredited agency, while other institutions continue to use the “regional” nomenclature, it may send false signals to students or the public that the institution lost its accreditation from a “regional accreditor” or that it now has a lesser accreditation status.

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

On August 12, 2022, the Hawaii Department of Health (HDOH) submitted a revision to its SIP, titled “Hawaii State Department of Health Regional Haze State Implementation Plan, Second Planning Period” to address regional haze for the second implementation period. 1 Then, on August 2, 2024, 2 HDOH withdrew its original SIP submission and simultaneously submitted a revised regional haze SIP submission, titled “Hawaii State Department of Health Regional Haze State Implementation Plan, Revision 1, Second Planning Period” (henceforth referred to as the “2024 Hawaii Regional Haze Plan” or “the Plan”) for the second implementation period. HDOH made this SIP submission to satisfy the requirements of the CAA's regional haze program pursuant to CAA sections 169A and 169B and 40 CFR 51.308. For the reasons described in this document, the EPA is proposing to partially approve and partially disapprove the 2024 Hawaii Regional Haze Plan. Specifically, we are proposing to approve the elements of the 2024 Hawaii Regional Haze Plan related to requirements contained in 40 CFR 51.308(f)(1), (f)(4) through (6), and (g)(1) through (5) and to disapprove the elements of the 2024 Hawaii Regional Haze Plan related to requirements contained in 40 CFR 51.308(f)(2), (f)(3), and (i)(2) through (4). We are proposing to disapprove these elements because Hawaii did not provide necessary assurances that the unconsented closures in the long-term strategy would not violate federal and possibly state law, as required by CAA section 110(a)(2)(E)(i). In particular, the EPA proposes to find that approval by the EPA of unconsented source closures, without just compensation, could violate the Takings Clause of the U.S. Constitution and possibly comparable provisions of state law, and that Hawaii has not provided the necessary assurances that such violations would not occur. The Plan included the enforceable shutdown of a combined six boiler units at the Kanoelehua-Hill and Kahului Generating Stations, on the islands of Hawaii and Maui, respectively, and the option to shut down several diesel engine generators at the Maalaea Generating Station on the island of Maui. However, Hawaiian Electric, the owner of these units no longer consents to their shutdown due to concerns that it would result in potential energy reserve shortfalls which would endanger grid reliability. Thus, the long-term strategy does not meet 110(a)(2)(E)(i) and does not meet 40 CFR 51.308(f)(2). In the absence of an approved long-term strategy, we also cannot approve the associated RPGs under 40 CFR 51.308(f)(3) or the FLM consultation requirements under 51.308(i)(2) through (4).

A detailed history and background of the regional haze program is provided in prior EPA proposal actions. 3 For additional background on the 2017 RHR revisions, please refer to Section III. Overview of Visibility Protection Statutory Authority, Regulation, and Implementation of “Protection of Visibility: Amendments to Requirements for State Plans” of the 2017 RHR. 4 The following is an abbreviated history and background of the regional haze program and 2017 RHR as it applies to the current action.

In the 1977 CAA Amendments, Congress created a program for protecting visibility in the nation's mandatory Class I Federal areas, which include certain national parks and wilderness areas. 5 CAA 169A. The CAA establishes as a national goal the “prevention of any future, and the remedying of any existing, impairment of visibility in mandatory class I Federal areas which impairment results from manmade air pollution.”  6

Regional haze is visibility impairment that is produced by a multitude of anthropogenic sources and activities which are located across a broad geographic area and that emit pollutants that impair visibility. Visibility impairing pollutants include fine and coarse particulate matter (PM) ( e.g., sulfates, nitrates, organic carbon, elemental carbon, and soil dust) and their precursors ( e.g., sulfur dioxide (SO 2 ), nitrogen oxides (NO X ), and, in some cases, volatile organic compounds (VOC) and ammonia (NH 3 )). Fine particle precursors react in the atmosphere to form fine particulate matter (PM 2.5 ), which impairs visibility by scattering and absorbing light. Visibility impairment reduces the perception of clarity and color, as well as visible distance. 7

To address regional haze visibility impairment, the 1999 RHR established an iterative planning process that requires both states in which Class I areas are located and states “the emissions from which may reasonably be anticipated to cause or contribute to any impairment of visibility” in a Class I area to periodically submit SIP revisions to address such impairment. 8

On January 10, 2017, the EPA promulgated revisions to the RHR, that apply for the second and subsequent implementation periods. 9 The reasonable progress requirements as revised in the 2017 rulemaking (referred to here as the 2017 RHR Revisions) are codified at 40 CFR 51.308(f).