This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This final rule is issued under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674) (the Act), amending Marketing Order No. 905 (7 CFR part 905; the Order), regulating the handling of oranges, grapefruit, tangerines, and pummelos grown in Florida. The Citrus Administrative Committee (Committee) locally administers the Order and is comprised of growers of fresh citrus operating within the area of production, as well as a public member.

This action is exempt from the Office of Management and Budget (OMB) review process required by Executive Order 12866. This rule amends existing Marketing Order No. 905, as amended (7 CFR part 905), Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida, and is necessary for the continued operation of Marketing Order No. 905. Additionally, this action is exempt from the requirements of Executive Order 14192, “Unleashing Prosperity Through Deregulation,” pursuant to section 5(c).

This final rule has been reviewed under Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments,” which requires Federal agencies to consider whether their rulemaking actions would have Tribal implications. The Agricultural Marketing Service (AMS) has determined that this rule is unlikely to have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

This final rule has been reviewed under Executive Order 12988, “Civil Justice Reform.” Under the Order now in effect, Florida citrus handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate will be applicable to all assessable Florida citrus for the 2024-2025 fiscal period, and continue until amended, suspended, or terminated.

The Act provides that administrative remedies must be exhausted before parties may file suit in court. Under section 608(c)(15)(A) of the Act, any handler subject to an order may file with U.S. Department of Agriculture (USDA) a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This final rule increases the assessment rate for Florida citrus handled under the Order from $0.02 to $0.025 per 4/5-bushel carton or equivalent for the 2024-2025 fiscal period and subsequent fiscal periods.

Sections 905.40 and 905.41 of the Order authorize the Committee, with AMS approval, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are familiar with the Committee's needs and with the costs of goods and services in their local area and are able to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting, and all directly affected persons have an opportunity to participate and provide input.

For the 2023-2024 fiscal period and subsequent fiscal periods, the Committee recommended, and AMS approved, an assessment rate of $0.02 per 4/5-bushel carton or equivalent of Florida citrus. That rate continues in effect from fiscal period to fiscal period until modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other information available to AMS.

The Committee met on September 23, 2024, and unanimously recommended, with a vote of 18 in favor and none opposed, 2024-2025 fiscal period expenditures of $119,624 and an assessment rate of $0.025 per 4/5-bushel carton or equivalent of citrus handled for the 2024-2025 fiscal period and subsequent fiscal periods. In comparison, budgeted expenditures for the 2023-2024 fiscal period were $124,624. The assessment rate of $0.025 is $0.005 higher than the rate currently in effect. The Committee recommended increasing the assessment rate to reduce the burden on its financial reserve, which had been strained during the previous two seasons after unexpected, decreased shipment volumes. Following Hurricanes Helene and Milton, the Committee met again on November 14, 2024, and reaffirmed its recommendation for an assessment rate increase to help respond to the damage incurred by both weather events. The Committee estimates shipments of approximately 4,500,000 4/5-bushel cartons or equivalent of citrus for the 2024-2025 fiscal period, which is 1,145,904 cartons fewer than was handled for the 2023-2024 fiscal period.

The Committee derived the recommended assessment rate by considering anticipated expenses, an estimated 4,500,000 4/5-bushel cartons or equivalent of assessable Florida citrus, and the amount of funds available in the authorized reserve. At the current assessment rate of $0.02, the expected 4,500,000 4/5-bushel cartons or equivalent of the assessable Florida citrus would generate $90,000 (4,500,000 cartons multiplied by $0.02 assessment rate), which would require the use of $29,624 of reserves to cover the anticipated expenditures of $119,624 for the 2024-2025 fiscal period. By increasing the assessment rate by $0.005 to $0.025, assessment income is expected to generate $112,500 (4,500,000 cartons multiplied by $0.025 assessment rate) for the 2024-2025 fiscal period and only require $7,124 in reserves to cover expenditures. Income derived from handler assessments along with reserve funds and interest income should be sufficient to meet the Committee's recommended budgeted expenditures of $119,624 for the 2024-2025 fiscal period. Funds available in reserves (approximately $146,000) will be kept within the maximum permitted by the Order (approximately two fiscal periods' expenses as authorized in § 905.42).

The assessment rate will continue in effect indefinitely until modified, suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other available information. Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or from AMS. Committee meetings are open to the public and interested persons may express their views at these meetings. AMS will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2024-2025 fiscal period budget, and those for subsequent fiscal periods, will be reviewed and as appropriate, approved by AMS.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this final rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such action in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act are unique regulations in that they are brought about through group action of typically small entities acting on their own behalf.

There are approximately 500 producers of Florida citrus in the production area and 12 handlers subject to regulation under the Order. At the time this analysis was prepared, the Small Business Administration (SBA) defined small agricultural producers as those having annual receipts equal to or less than $4,000,000 for orange producers (North American Industry Classification System (NAICS) code 111310), and $4,250,000 for other citrus producers (including grapefruit) (NAICS code 111320). Small agricultural service firms, including handlers, are defined as those whose annual receipts are equal to or less than $34,000,000 (NAICS 115114, Postharvest Crop Activities) (13 CFR 121.201).

The USDA National Agricultural Statistics Service (NASS) reported an average free on board (FOB) price for fresh Florida oranges for the 2023-2024 season of approximately $18.15 per carton with total shipments of 3,504,000 cartons for a total value of $63,597,600. The average FOB price for fresh Florida grapefruit for the 2023-2024 season was $22.75 per carton with total fresh shipments of 1,201,000 cartons for a total value of $54,645,000. Based on this information, the majority of fresh citrus handlers have average annual receipts less than $34,000,000 ($63,597,600 plus $54,645,500 equals $118,243,100 divided by 12 handlers equals $9,853,591.67).

In addition, based on the NASS data, the on-tree price for growers for the 2023-2024 season was estimated at a weighted average price of $4.51 per carton. Fresh oranges make up a small segment of the citrus industry. The on-tree price for fresh oranges was $7.93 per carton with shipments of 3,504,000 cartons for a value of $27,786,720, while oranges for processing were $4.14 per carton with shipments of 32,416,000 cartons for a total value of $134,202,240.

Conversely, the grapefruit market is predominantly fresh. The on-tree price for fresh grapefruit was $13.44 per carton during the same period with shipments of 2,402,000 for a total value of $32,282,880. NASS could not estimate an on-tree price for processing. Based on grower prices, shipment data, and the total number of Florida growers, the average annual grower revenue, even including oranges for processing, is well below $4,000,000 ($27,786,720 in fresh orange shipments plus $134,202,240 in processed orange shipments, plus $32,282,880 in fresh grapefruit shipments equals $194,109,760 divided by 500 growers equals $388,219). Thus, the majority of Florida citrus handlers and growers may be classified as small entities.

This final rule increases the assessment rate for the 2024-2025 fiscal period and subsequent fiscal periods from $0.02 to $0.025 per 4/5-bushel carton or equivalent of Florida citrus. The Committee recommended 2024-2025 expenditures of $119,624 and an assessment rate of $0.025 per 4/5-bushel carton or equivalent of Florida citrus. The new assessment rate of $0.025 is $0.005 more than the current assessment rate. The quantity of assessable Florida citrus for the 2024-2025 season is estimated at 4,500,000 4/5-bushel cartons or equivalent. The $0.025 rate should provide $112,500 in assessment income (4,500,000 cartons multiplied by $0.025 assessment rate). Income derived from handler assessments along with reserve funds and interest income, should provide sufficient funds to cover budget expenses.

The Committee recommended increasing the assessment rate to minimize the use of reserves after drawing down these funds over the past two seasons due to shipment volumes and assessments being lower than expected. The Committee estimates shipments of approximately 4,500,000 4/5-bushel cartons or equivalent of citrus for the 2024-2025 fiscal year, which is 1,145,904 fewer cartons than was handled for the 2023-2024 fiscal year. At the current assessment rate of $0.02, the expected 4,500,000 4/5-bushel cartons or equivalent of the assessable Florida citrus would generate $90,000 (4,500,000 cartons multiplied by $0.02 assessment rate), which would require the use of close to $30,000 of reserves to cover the anticipated expenditures of $119,624 for the 2024-2025 fiscal period. By increasing the assessment rate by $0.005 to $0.025, assessment income should generate $112,500 (4,500,000 cartons multiplied by $0.025 assessment rate) for the 2024-2025 fiscal year and require the use of less reserve funds to cover expenditures. The increased assessment amount, along with reserve funds and interest income, should provide sufficient funds to meet anticipated expenses for the 2024-2025 fiscal period.

Prior to arriving at this budget and assessment rate, the Committee considered alternatives, including raising the assessment rate to $0.03 per carton to replenish reserves. However, Committee members determined that because annual expenditures were relatively stable, it was not crucial to add to reserves at this time and the alternative was rejected. The Committee also considered maintaining the current assessment rate of $0.02 per carton. However, the Committee members did not want to make another large draw on reserves to meet 2024-2025 expenses after doing so in previous seasons. Consequently, this alternative was also rejected.

A review of historical and preliminary information pertaining to the 2024-2025 fiscal period indicates the average grower price should be approximately $7.43 per 4/5-bushel carton or equivalent of citrus. Therefore, the estimated assessment revenue for the 2024-2025 fiscal period as a percentage of total grower revenue would be about 0.34 percent ($0.025 divided by $7.43 multiplied by 100).

This final rule increases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, these costs are expected to be offset by the benefits derived by the operations of the Order.

Committee meetings are widely publicized throughout the production area. The Florida citrus industry and all interested persons are invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the September 23, 2024, and November 14, 2024, meetings were public meetings and all entities, both large and small, were able to express views on this issue. Finally, interested persons were invited to submit comments on this rule, including the regulatory and information collection impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0189 Fruit Crops. No changes in those requirements would be necessary as a result of this final rule. Should any changes become necessary, they would be submitted to OMB for approval.

This final rule will not impose any additional reporting or recordkeeping requirements on either small or large Florida citrus handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

A proposed rule concerning this action was published in the Federal Register on October 1, 2025 (90 FR 47240). Copies of the proposed rule were provided to all Florida citrus handlers. In addition, the proposal was made available through the internet by AMS and the Office of the Federal Register via https://www.regulations.gov. A 30-day comment period ending October 31, 2025, was provided for interested persons to respond to the proposal. AMS received four comments during the comment period. Two comments supported the proposal and one comment did not pertain to the merits of the rule. One comment challenged the procedural sufficiency of the rulemaking, asserting that AMS did not adhere to the requirements of the Administrative Procedure Act and the Regulatory Flexibility Act.

Specifically, the commenter claimed that AMS procedurally bypassed notice and comment or waived the 30-day delayed effective date without adequate good cause and failed to present a clear analysis of the impacts on small businesses. The commenter also claimed that this action would have an impermissible retroactive effect to the start of the fiscal period on August 1, 2024. After review of the comment, AMS determined that all the statutory and procedural requirements for rulemaking have been met regarding this action.

Contrary to the comment's assertions, AMS did not bypass notice and comment or invoke good cause. Interested persons had numerous opportunities to review pertinent information, present their views, and participate in the rulemaking process. As noted above, AMS published a notice of proposed rulemaking to the Federal Register on October 1, 2025, that included a 30-day comment period for interested persons, ending October 31, 2025. The proposed rulemaking also included an Initial Regulatory Flexibility Analysis, pursuant to requirements set forth in the Regulatory Flexibility Act, that considered and detailed for the public's review, the economic impact of this rule on small entities. AMS has provided adequate opportunity for interested persons to consider the proposal and provide comments. Accordingly, AMS made no changes to the rule as proposed.

Regarding the retroactive effect of this action, the commenter also cited Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) for the proposition that there is a “presumption against retroactivity” absent clear congressional authorization. Even if the assessments are retroactive rules, Congress expressly granted the Secretary the power to promulgate them. The Act provides that handlers shall pay assessments for such expenses “as the Secretary may find are reasonable and are likely to be incurred by such authority or agency, during any period specified by him[.]” 7 U.S.C. 610(b)(2)(ii). See Cal-Almond, Inc. v. U.S. Dep't of Agric., 14 F.3d 429, 442-43 (9th Cir. 1993). Accordingly, AMS made no changes to the rule as proposed.

After consideration of all relevant material presented, including the information and recommendations submitted by the Committee and other available information, AMS has determined that this final rule is consistent with and effectuates the purposes of the Act.

For the reasons set forth in the preamble, 7 CFR part 905 is amended as follows:

DHS invites all interested parties to participate in this rulemaking by submitting written data, views, comments, and arguments on all aspects of this interim final rule. DHS also invites comments that relate to the economic, environmental, or federalism effects that might result from this interim final rule. Comments must be submitted in English, or an English translation must be provided. Comments that will provide the most assistance to USCIS in implementing these changes will reference a specific portion of the interim final rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. Comments submitted in a manner other than the one listed above, including emails or letters sent to DHS or USCIS officials, will not be considered comments on the interim final rule and may not receive a response from DHS.

Instructions: If you submit a comment, you must include the agency name (U.S. Citizenship and Immigration Services) and the DHS Docket No. USCIS-2026-0133 for this interim final rule. Please note all submissions will be posted, without change, to the Federal eRulemaking Portal at http://www.regulations.gov, and will include any personal information you provide. Therefore, submitting this information makes it public. You may wish to consider limiting the amount of personal information that you provide in any voluntary public comment submission you make to DHS. DHS may withhold information provided in comments from public viewing that it determines may impact the privacy of an individual or is offensive. For additional information, please read the Privacy and Security Notice available at http://www.regulations.gov.

Docket: For access to the docket and to read background documents or comments received, go to http://www.regulations.gov, referencing DHS Docket No. USCIS-2026-0133. You may also sign up for email alerts on the online docket to be notified when comments are posted or a final rule is published.

On July 4, 2025, the President signed into law H.R.1—One Big Beautiful Bill Act, Public Law 119-21, 139 Stat. 72 (“H.R.1”). H.R.1 was a comprehensive legislative package that changed many laws and added new laws that touch many areas of the United States government. Among those changes, the law established several new provisions and fees to the Immigration and Nationality Act (INA). See H.R.1, Title X, Subtitle A, Part I, Sections 100001 through 1000018. This IFR codifies several of the H.R.1 immigration fee provisions and other limitations on aliens.

Specifically, the IFR does the following: (1) codification in the Code of Federal Regulations (CFR) of the Form I-94 fee requirement set forth in 8 U.S.C. 1807 as it applies to USCIS; (2) codification of the Annual Asylum Fee (AAF) requirement in 8 U.S.C. 1808, including consequences for failure to pay the AAF and limitations related to employment authorization required by 8 U.S.C. 1810(b); (3) codification of the requirement that every asylum application include the fee required by 8 U.S.C. 1802 at filing regardless of whether the application is rejected, and is not refundable; and (4) codification of the H.R.1 limits on the validity of Temporary Protected Status (TPS) employment authorization required by 8 U.S.C. 1803(c) and 8 U.S.C. 1811(a).

This rule is issued under section 208(d)(3) of the Immigration and Nationality Act (INA), 8 U.S.C. 1158(d); section 102 of the Homeland Security Act of 2002 (HSA), 6 U.S.C. 112; and sections 100002 through 100018 of H.R.1, codified at 8 U.S.C. 1802 through 1815. These statutes authorize DHS to administer the asylum process, and collect certain fees as required by law.

DHS is issuing this rule as an interim final rule under the “good cause” exception of 5 U.S.C. 553(b)(B), as prior notice and comment would be impracticable and contrary to the public interest. H.R.1 requires immediate implementation to ensure compliance with the statutory mandate and provides no discretion to DHS on the provisions implemented in this rule.

This rule codifies certain H.R.1 fee provisions applicable to USCIS:

• Form I-94 Fee required by 8 U.S.C. 1807: Establishes a fee requirement that, for USCIS, is applicable to the filing of Form I-102, Application for Replacement/Initial Nonimmigrant Arrival-Departure Document. New 8 CFR 103.7(d)(4).

• Annual Asylum Fee required by 8 U.S.C. 1808: Codifies the requirement that an alien pay the AAF and establishes that, procedurally, failure to pay within 30 days of notice results in rejection of the pending asylum application and the denial of any associated application for employment authorization. New 8 CFR 106.2(c)(15)(ii) and 208.3(c)(6).

• Retention of Asylum Application Fee required by 8 U.S.C. 1802: Codifies the fee requirement and provides that the asylum application filing fee is retained by USCIS if a Form I-589 is rejected. New 8 CFR 106.2(c)(14).

• TPS Employment Authorization Validity required by 8 U.S.C. 1803(c) and 8 U.S.C. 1811(a): Limits work authorization and any associated employment authorization document under TPS to one year, or the remaining period of designation if shorter, with conforming changes to ensure consistency across DHS regulations. New 8 CFR 274a.12(a)(12) and 274.12(c)(19).

DHS also analyzed the costs and benefits of this rule. Because the rule codifies statutory mandates or procedural processes, DHS estimates minimal incremental cost beyond those imposed by Congress. Qualitative benefits include improved fee transparency, reduced administrative ambiguity, and enhanced enforcement efficiency consistent with the goals of H.R.1.

The H.R.1 Reconciliation Act of 2025 (H.R.1), Public Law 119-21, established a new framework of immigration fees that Congress directed DHS to implement beginning FY 2025. 1 Congress intended H.R.1 to ensure that aliens who apply for or maintain eligibility for immigration benefits bear more of the costs of administering the immigration system. 2 In explaining its decision, Congress made clear that these new fees were long overdue and necessary to recover the growing costs of adjudicating the millions of pending asylum applications before both USCIS, a component agency of DHS, and the Department of Justice, Executive Office for Immigration Review (EOIR). 3 H.R.1 requires that these fees be applied commencing in FY 2025 “in addition to any other fee authorized by law.”  4 Unless otherwise described in this rule with respect to a specific fee, the fees set forth in H.R.1 are imposed in addition to fees in 8 CFR part 106, or any other fee promulgated by DHS under INA sec. 286(m), 8 U.S.C. 1356(m), and are not refundable. See 89 FR 6194 (Jan. 31, 2024); 90 FR 34511 (July 22, 2025). On July 22, 2025, USCIS published a Federal Register notice (FRN) announcing the implementation of several fees administered by USCIS mandated by H.R.1 (H.R.1 Fee notice). 90 FR 34511 (July 22, 2025). 5 That notice implemented a minimum $100 asylum application filing fee commencing in FY 2025 under 8 U.S.C. 1802 and a minimum $100 annual asylum fee (AAF) starting in FY 2025 for each calendar year an asylum application remains pending under 8 U.S.C. 1808. 90 FR 34511 (July 22, 2025). The notice also announced fees for Temporary Protected Status (TPS), special immigrant juveniles (SIJs) under 8 U.S.C. 1805, and certain categories of employment authorization under 8 U.S.C. 1803(a)-(c). 90 FR 34511 (July 22, 2025).

The USCIS notice also provides that USCIS will issue personal, individualized notice to each asylum applicant with an application pending with USCIS from whom the AAF is required, and that the notice will include the amount of the fee, when and how the fee must be paid, and the consequences of failure to pay. 6 For the AAF due for FY 2025, DHS has issued AAF notices that only state that failure to pay the fee before the deadline may negatively affect the application, but do not specify what will occur if the fee is not paid. 7

The H.R.1 Fee notice expressly deferred announcement of multiple statutory fees. Among them were: (1) the Immigration Parole Fee (IPF) required by 8 U.S.C. 1804, which includes multiple enumerated statutory exceptions, and (2) the Form I-94 fee required by 8 U.S.C. 1807 applicable to any alien who submits an application for a Form I-94 Arrival/Departure Record. 90 FR 34511 at 34516 (July 22, 2025). In both cases, USCIS explained that further interpretation and guidance were necessary before implementation could proceed. 90 FR 34511 (July 22, 2025). On October 16, 2025, DHS published an additional FRN to address the Immigration Parole Fee (IPF) required by 8 U.S.C. 1804. 90 FR 48317 (Oct. 16, 2025). The IPF notice announced the new fee to be administered by DHS components, including USCIS, and specified the classes of applicants to whom the fee applies, the effective date of the new requirement, and instructions for remitting payment. 90 FR 48317 (Oct. 16, 2025). It also described the circumstances under which the fee exceptions may apply in accordance with the statutory exceptions provided in H.R.1 and clarified the consequences for failure to pay. 90 FR 48317 (Oct. 16, 2025). The IPF notice fulfilled the commitment made in the H.R.1 Fee notice, which stated that the fee mandated by 8 U.S.C. 1804, subject to multiple statutory exceptions requiring agency interpretation, would be announced in a future publication. 90 FR 34511 (July 22, 2025). By providing this follow-up guidance, DHS ensured that members of the public received the necessary information to comply fully with the new statutory mandate.

H.R.1 requires that DHS, beginning in FY 2026 and continuing for each subsequent fiscal year, adjust the immigration-related fees for inflation. H.R.1 prescribes that DHS use the percentage change to the CPI-U for the month of July in the current year compared to the preceding calendar year, and round each fee to the next lowest multiple of $10 or down to the nearest dollar as authorized by H.R.1. In furtherance of enacting the text of H.R.1, DHS components published multiple FRNs announcing the new H.R inflationary increases (90 FR 52085 (Nov. 19, 2025), 90 FR 52425 (Nov. 20, 2025), and 90 FR 52693 (Nov. 21, 2025)).

The Secretary of Homeland Security's authority for the regulatory amendment is found in various sections of the INA, 8 U.S.C. 1101 et seq. and the Homeland Security Act of 2002 (HSA), 6 U.S.C. 101 et seq. General authority for issuing this IFR is found in section 103(a) of the INA, 8 U.S.C. 1103(a), which authorizes the Secretary to administer and enforce the immigration and nationality laws and establish such regulations as the Secretary deems necessary for carrying out such authority, 8 as well as sections 102 of the HSA, 6 U.S.C. 112, which vests all of the functions of DHS in the Secretary and authorizes the Secretary to issue regulations. 9 In addition to the general authority, the asylum-specific authority at INA sec. 208(d)(5)(B), 8 U.S.C. 1158(d)(5)(B), states that “the Attorney General may provide by regulation for any other conditions or limitations on the consideration of an application for asylum not inconsistent with this chapter.”  10

The H.R.1 text “in addition to any other fee authorized by law” is clear. 11 H.R.1 fees do not supersede or replace the fee schedule DHS promulgated in 8 CFR part 106 and related provisions, nor do they limit DHS's authority under INA sec. 286(m), 8 U.S.C. 1356(m), to recover the costs of providing adjudication and naturalization services. The H.R.1 fees are a distinct set of statutory requirements intended to raise revenue to support enforcement priorities, improve public safety, and provide revenue to the Treasury while USCIS continues to fund adjudicatory functions through its existing fee authority. To interpret H.R.1 as supplanting the USCIS fees DHS codified in 8 CFR part 106 would produce a large shortfall in USCIS' operating revenue, compromise USCIS' ability to fund its operations, and jeopardize service levels Congress has not indicated should be curtailed.

This IFR expands upon the H.R. 1 Fee notice and the IPF notice to more fully implement the H.R.1 fees related to USCIS. Congressional intent, reflected in both the statutory text of H.R.1 and in the accompanying legislative history, makes clear that these statutory provisions were enacted to expeditiously strengthen immigration enforcement and improve public safety. 12 The specific changes are as follows:

H.R.1 requires “any alien who submits an application for a Form I-94 Arrival/Departure Record to pay a minimum of $24.”  13 This new fee shall be adjusted annually for inflation and is to be collected “in addition to any other fee authorized by law.”  14 The statute specifies that this fee “shall not be waived or reduced.”  15 This IFR codifies the new 8 U.S.C. 1807 fee requirement for applicants that submit a Form I-94 Arrival/Departure Record and that the fee must be submitted when the applicants request the Form I-94 in addition to the fee required by 8 CFR 106.2(a)(2). 16

USCIS interprets the language “submits an application for a Form I-94” in 8 U.S.C. 1807 to apply exclusively to scenarios where an applicant files an application explicitly requesting a Form I-94 Arrival/Departure record. This interpretation limits USCIS' collection of the Form I-94 fee solely to Form I-102, Application for Replacement/Initial Nonimmigrant Arrival-Departure Document, or successor form, as required by 8 U.S.C. 1807. 17

USCIS recognizes that in many adjudications, the agency may create or update an electronic Form I-94 record in its systems when approving an application or petition that confers, extends, or changes a period of authorized stay. However, this process is distinct from a direct request for a Form I-94 through the filing of Form I-102. Accordingly, as it pertains to USCIS' collection, the Form I-94 fee required by 8 U.S.C. 1807 is limited to cases involving the direct filing of Form I-102 and does not extend to an adjudication that results in the incidental creation or amendment of a Form I-94 record. 18

Form I-102, Application for Replacement/Initial Nonimmigrant Arrival-Departure Document, is the application an alien requests the issuance, replacement, or correction of a Form I-94. Form I-102 may be filed for a range of reasons, as outlined in the USCIS form instructions and codified at 8 CFR 264.6. 19 These include the “general filing” category, which applies where an applicant requires replacement of a lost, stolen, mutilated, or damaged Form I-94 or otherwise needs a Form I-94 not covered by one of the specific exceptions. In addition, applicants may file Form I-102 where U.S. Customs and Border Protection (CBP) did not issue a Form I-94 at the time of admission at a land border, airport, or seaport, where a correction of a Forms I-94, I-94W, Nonimmigrant Visa Waiver Arrival/Departure Record, or I-95, Alien Crew Landing Permit, is necessary through no fault of the applicant, or where the record cannot be retrieved electronically through CBP's website. 20 Other categories reflect special provisions for nonimmigrant members of the U.S. Armed Forces, North Atlantic Treaty Organization (NATO) forces, or Partnership for Peace programs, where initial requests may be exempt from the underlying USCIS filing fee but subsequent requests remain subject to it. 21

Under 8 U.S.C. 1807 and new 8 CFR 103.7(d)(4), benefit requests submitted on Form I-102, Application for Replacement/Initial Nonimmigrant Arrival-Departure Document are subject to the new Form I-94 fee, in addition to the existing DHS filing fees. Even in instances where the DHS filing fee is waived or set at $0, the H.R.1 Form I-94 fee remains applicable. 22 The only exception to the H.R.1 Form I-94 fee is for Form I-102 filings when the application is submitted to correct a DHS error. The fees eligible for a waiver request under 8 CFR 106.3(a) do not include the H.R.1 Form I-94 fee.

Table 1 shows the current USCIS paper filing fee for each Form I-102 filing category, the additional minimum $24 H.R.1 Form I-94 fee, and the total fee to be collected. This format follows the structure used in the H.R.1 Fee notice and complements the parallel CBP notice for the H.R.1 Form I-94 fee published August 28, 2025. 90 FR 34511 (July 22, 2025); 90 FR 42025 (Aug. 28, 2025). 23

On December 1, 2025, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the agencies) published in the Federal Register a notice of proposed rulemaking (the proposal) to amend the community bank leverage ratio (CBLR) framework. 1 The proposal would have lowered the CBLR requirement from 9 percent to 8 percent and would have extended the length of time that certain depository institutions and depository institution holding companies can remain in the CBLR framework while not meeting one or more of the qualifying criteria from two consecutive quarters to four consecutive quarters, subject to a limit of eight quarters in the previous five-year period. Following review of the comments received on the proposal, the agencies are finalizing the proposal without revision. Elements of the final rule also address comments received from the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review. 2

The CBLR framework  3 implements section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), which requires the agencies to establish a CBLR requirement of not less than 8 percent and not more than 10 percent for qualifying community banking organizations. 4

Under section 201(c) of EGRRCPA, a qualifying community banking organization that exceeds the CBLR requirement shall be considered to have met: (i) the generally applicable risk-based and leverage capital requirements in the capital rule;  5 (ii) the capital ratio requirements to be considered well capitalized under the agencies' prompt corrective action (PCA) framework (in the case of insured depository institutions); and (iii) any other applicable capital or leverage requirements. Section 201(b) of EGRRCPA also requires the agencies to establish procedures for the treatment of a qualifying community banking organization whose leverage ratio falls below the CBLR requirement as established by the agencies.

In 2019, the agencies issued a final rule establishing the CBLR framework, which became effective January 1, 2020 (2019 final rule). 6 Under the 2019 final rule, the agencies established a CBLR requirement of greater than 9 percent. The CBLR requirement was defined by reference to the capital rule's existing leverage ratio, equal to tier 1 capital divided by average total consolidated assets. 7

Under the 2019 final rule, depository institutions and depository institution holding companies are eligible to opt into the CBLR framework if they are a “qualifying community banking organization.” The final rule defined this term to include institutions that have less than $10 billion in total consolidated assets; a leverage ratio of greater than 9 percent; off-balance sheet exposures (excluding derivatives other than sold credit derivatives and unconditionally cancelable commitments) of 25 percent or less of total consolidated assets; and trading assets and liabilities of 5 percent or less of total consolidated assets. 8 A qualifying community banking organization also cannot be an advanced approaches banking organization. 9

A qualifying community banking organization that elects to use the CBLR framework is considered to satisfy the risk-based capital requirements and any other applicable capital or leverage requirements and, in the case of an insured depository institution, to meet the capital ratio requirements for the well capitalized capital category under the PCA framework. 10 At the time, the agencies adopted the 9 percent requirement on the basis that this threshold, with complementary qualifying criteria, would generally maintain the level of regulatory capital held by qualifying community banking organizations and support the agencies' goal of reducing regulatory burden while maintaining safety and soundness. 11

The 2019 final rule also established a two-quarter grace period during which a qualifying community banking organization that fails to meet all of the qualifying criteria but maintains a leverage ratio of greater than 8 percent would continue to be considered to satisfy the risk-based capital requirements and any other applicable capital or leverage requirements and, in the case of an insured depository institution, to meet the capital ratio requirements for the well capitalized capital category under the PCA framework. Under the 2019 final rule, if a community banking organization returns to compliance with all qualifying criteria following the two-quarter grace period, the banking organization could continue to participate in the CBLR framework. A community banking organization that either failed to meet all of the qualifying criteria following the grace period or that, at any time, failed to maintain a leverage ratio of greater than 8 percent would have been required to comply with the risk-based capital requirements and file the associated information in its regulatory reports for the quarter in which it ceased to be a qualifying community banking organization.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. 12 The CARES Act directed the agencies to make temporary changes to the CBLR framework. Specifically, section 4012 of the CARES Act directed the agencies to issue an interim final rule that would temporarily lower the CBLR requirement to 8 percent and provide a reasonable grace period for qualifying community banking organizations that fell below the 8 percent requirement.

The agencies issued an interim final rule implementing the CARES Act's temporary changes to the CBLR framework on April 23, 2020 (statutory interim final rule). 13 To provide for a more gradual return to the initial CBLR calibration, the agencies also issued a separate interim final rule providing a graduated transition from the temporary 8 percent CBLR requirement back to the 9 percent requirement (transition interim final rule). 14 These interim final rules did not make any changes to the other qualifying criteria in the CBLR framework. 15

Consistent with section 201(c) of EGRRCPA, under the transition interim final rule, a community banking organization that temporarily failed to meet any of the qualifying criteria, including the applicable CBLR requirement, generally would have been considered to satisfy the risk-based capital requirements and any other applicable capital or leverage requirements and, in the case of an insured depository institution, to meet the capital ratio requirements for the well capitalized capital category under the PCA framework during a two-quarter grace period so long as the community banking organization maintained a leverage ratio: greater than 7 percent in the second quarter through fourth quarter of calendar year 2020, greater than 7.5 percent in calendar year 2021, and greater than 8 percent thereafter. Both interim final rules were finalized without change. 16

On December 21, 2021, the agencies issued a statement confirming that the CARES Act's temporary changes to the CBLR framework would expire at the end of 2021. 17 The CBLR requirement reverted to 9 percent on January 1, 2022.

The CBLR framework is intended to provide qualifying community banking organizations the option to use a simpler, less burdensome measure of capital adequacy. The CBLR framework reduces regulatory burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework, thereby providing meaningful regulatory relief for such qualifying community banking organizations, while maintaining capital levels that support safety and soundness.

As of the second quarter of 2025, the agencies estimate that 84 percent of community banking organizations qualified to use the CBLR framework, 18 but only 48 percent of qualifying community banking organizations had adopted it. This adoption rate has remained relatively constant since the rule was implemented in 2020. Notably, data show that smaller banking organizations are more likely to adopt the framework, underscoring the value of the simplification of the regulatory capital requirements for those banking organizations. For example, approximately half of qualifying community banking organizations with less than $1 billion in assets have opted into the framework, compared to a quarter of qualifying community banking organizations with more than $1 billion and less than $10 billion in assets. (See section V.A.2. for more information).

Since the introduction of the CBLR framework, the overwhelming majority of qualifying community banking organizations that participate in the framework have continued to operate in a safe and sound manner through a range of conditions, and most maintain capital levels well in excess of the CBLR requirement. 19

To address concerns that the CBLR framework did not provide effective regulatory burden relief and discouraged broader adoption, the agencies proposed to lower the CBLR requirement from 9 percent to 8 percent and to extend the grace period from two quarters to four quarters, subject to a limit on use of the grace period over time.

The agencies received approximately 30 comments on the proposal from a range of parties, including a policy advocacy group, banking organizations, banking and financial trade associations, other financial market participants, a law firm, and individuals. Most of these comments were supportive of the proposal, including the proposed calibration of the CBLR requirement and the proposed grace period for CBLR banking organizations to return to compliance with the CBLR framework. One commenter asserted that the proposal improves market efficiency, while another recommended that the proposal be finalized and made permanent. Some comments, including from trade associations and individuals, recommended the agencies take further action to reduce regulatory burden on community banking organizations, including with respect to regulatory reporting. These comments are discussed in additional detail in section IV.F. The agencies also received comments regarding specific aspects of the proposal discussed further below.

To provide more meaningful regulatory burden relief to community banking organizations while continuing to achieve the CBLR framework's safety and soundness objectives, the agencies are finalizing the proposal without modification. The final rule lowers the CBLR requirement from 9 percent to 8 percent, as proposed. The final rule also includes the proposed extension of the grace period from two quarters to four quarters, subject to a limit of eight quarters in the previous five-year period. The final rule is effective on July 1, 2026. This SUPPLEMENTARY INFORMATION presents the economic analysis of the final rule's changes and discusses administrative law matters.

The agencies proposed to lower the calibration of the CBLR requirement from 9 percent to 8 percent. Most commenters specifically supported the proposal to lower the calibration of the CBLR requirement from 9 percent to 8 percent. These commenters agreed that a lower calibration would increase eligibility for, and adoption of, the CBLR framework. Many commenters expressly agreed that the proposed 8 percent calibration would remain comparable to the requirements for the well capitalized category under the agencies' PCA framework. Commenters also noted that the proposed calibration appropriately balanced regulatory burden relief with safety and soundness. Several commenters stated that the reduced calibration would support additional lending by banking organizations that participate in the CBLR framework. One commenter stated that the proposal would result in larger management buffers that would allow some community banking organizations to redirect “excess” capital toward lending and enhancements in business operations and risk management processes. This commenter recommended that the reduced calibration should only be provided to community banking organizations that use the excess capital for such activities. One commenter suggested that the proposed 8 percent calibration would result in a higher effective capital requirement than its face amount would suggest due to deductions from regulatory capital set by the agencies' current capital rule. No commenters opposed the proposed reduced calibration.

The agencies are adopting the 8 percent CBLR requirement as proposed. As discussed in the proposal, the recalibration expands eligibility as more community banking organizations will qualify for the CBLR framework, which is significantly less burdensome than the risk-based capital framework. This revision is also consistent with comments received under EGRPRA, as commenters requested that the CBLR be recalibrated to a more appropriate level, such as 8 percent, to ensure broader access to the framework and to support credit availability in local markets. According to data from the second quarter of 2025, an additional 477 community banking organizations qualify to opt into the framework with the 8 percent CBLR requirement, and the agencies estimate that a total of 95 percent of community banking organizations (that is, banking organizations with less than $10 billion in total consolidated assets) qualify to participate in the CBLR framework (see section V.B.1 for additional information).

The CBLR recalibration would generally increase management buffers for community banking organizations participating in the CBLR framework and could encourage community banking organizations that are currently eligible, but that are not participating in the framework, to opt in. A larger surplus of regulatory capital above the CBLR requirement decreases the likelihood that qualifying community banking organizations that participate in the CBLR framework would be required to revert to the risk-based capital framework due to unexpected fluctuations in their leverage ratios.

The final rule remains broadly consistent with the current well capitalized category under the PCA framework. Specifically, the CBLR framework remains comparable to and, in most cases, materially more stringent than the requirements under the PCA framework. 20 The 8 percent CBLR requirement is more stringent than the 8 percent tier 1 risk-based capital requirement to be considered well capitalized under the PCA framework for all newly eligible community banking organizations and for nearly all community banking organizations that are currently eligible but do not participate in the CBLR framework. 21 Similarly, an 8 percent CBLR requirement is substantially higher than the 5 percent tier 1 leverage ratio required to be considered well capitalized under the PCA framework. As of the second quarter of 2025, all community banking organizations that would be newly eligible under the 8 percent CBLR requirement were well capitalized under the PCA framework.

The final rule does not include a requirement that the reduced calibration be provided to only community banking organizations that redirect “excess” capital toward lending and enhancements to business operations and risk management processes. As further discussed in the economic analysis in section V.C.2, lowering the calibration to 8 percent provides additional balance sheet capacity for lending and other activities by community banking organizations that are currently participating in the CBLR framework. Community banking organizations serve a vital function in the economy through their relatively outsized lending to agricultural and commercial borrowers. 22 In addition, rural communities rely heavily on community banking organizations for lending and financial services. 23 Additional lending by community banking organizations supports the economic activity of the communities and industries that they serve. However, the agencies do not determine how banking organizations allocate capital, so long as they meet applicable minimum capital requirements and any other applicable legal requirements, and operate in a safe and sound manner.

The agencies proposed to extend the grace period from two quarters to four quarters, thus allowing certain qualifying community banking organizations that fail to fully meet the qualifying criteria after opting into the CBLR framework to have four reporting periods to either return to fully meeting the qualifying criteria under the CBLR framework or transition to the risk-based capital framework. Commenters were largely supportive of the proposal to extend the grace period to provide additional time for temporarily non-compliant banking organizations to return to compliance with the CBLR framework. Some commenters noted that a four-quarter grace period would be better aligned with community banking organizations' reliance on retained earnings to build regulatory capital, which makes rapid adjustments difficult. Some commenters noted that the proposed grace period would provide more time for community banking organizations to address potential volatility in capital ratios. Two commenters noted that the extended grace period, combined with the reduced calibration, would reduce operational burden and allow qualifying community banking organizations participating in the CBLR framework to sunset parallel systems maintained in the event the banking organization reverted to the risk-based capital framework. One commenter specifically stated that the proposed rule's 7 percent minimum CBLR to use the grace period provides an appropriate safeguard. One commenter recommended that the agencies require a community banking organization to present a “CBLR restoration plan” to its board of directors within the first quarter of entering the grace period to ensure that it uses the grace period to execute a capital strategy. No commenters opposed the proposed extension of the grace period.

The agencies are finalizing this aspect of the proposal without modification. As discussed in the proposal, community banking organizations tend to rely more heavily on retained earnings for regulatory capital in part because smaller banking organizations may have reduced access to capital markets compared to larger banking organizations. As a result, community banking organizations may face challenges increasing capital quickly, particularly in environments in which bank profitability is constrained. 24 For additional analysis of the change to the grace period, see section V.C.1.

The four-quarter grace period should allow a banking organization that ceases to meet the CBLR criteria sufficient time to make appropriate changes to its activities and build up its regulatory capital levels as necessary, or to begin reporting risk-based capital consistent with the risk-based capital framework. By reducing the risk of a banking organization being required to rapidly implement the risk-based capital framework, the finalized changes could incentivize greater adoption of the CBLR framework.

Under the final rule, a community banking organization that has opted into the CBLR framework and no longer meets one or more of the qualifying criteria would have a four-quarter grace period to remain in the CBLR framework provided it maintains a leverage ratio above 7 percent. A community banking organization whose CBLR falls to or below 7 percent would be required to fully comply with risk-based capital framework requirements for the quarter in which it reports a leverage ratio of 7 percent or less. This 7 percent minimum ensures that community banking organizations with capital levels that have declined significantly would be subject to the more risk sensitive risk-based capital framework.

For example, if a qualifying community banking organization that has opted into the CBLR framework no longer meets one of the qualifying criteria as of February 15 and still does not meet the criteria as of the end of that quarter, the grace period for such a banking organization will begin as of the end of the quarter ending March 31 (grace period quarter 1), as long as the banking organization maintains a leverage ratio above 7 percent. The banking organization may continue to use the CBLR framework in the June 30 quarter (grace period quarter 2), September 30 quarter (grace period quarter 3) and December 31 quarter (grace period quarter 4) but would need to comply fully with the risk-based capital framework (including the associated reporting requirements) as of March 31 of the following calendar year, unless by that date the banking organization once again meets all qualifying criteria of the CBLR framework. 25

The agencies do not consider it appropriate to require, as one commenter suggested, that a community banking organization submit a capital restoration plan to its board of directors within the first quarter of entering the grace period. The CBLR framework is an optional framework, and community banking organizations may use the grace period to transition back to the risk-based capital framework. Similarly, a community banking organization may enter the grace period as a result of breaching other qualifying thresholds, including the threshold for off-balance sheet exposures, trading activity, or total assets.

Consistent with the 2019 final rule, a banking organization that no longer meets the definition of a qualifying community banking organization as a result of a merger or acquisition would not be able to use the grace period as of the quarter in which the merger or acquisition occurs. A banking organization that plans to grow or materially expand its activities due to a merger or acquisition should develop systems to calculate and report risk-based capital commensurate with those plans.

A qualifying community banking organization that has elected to use the CBLR framework and that expects to no longer meet the qualifying criteria as a result of a business combination generally would be expected to provide its pro forma risk-based capital ratios to its primary federal supervisor as part of its merger application, if applicable, and fully comply with risk-based capital requirements for the regulatory reporting period during which the transaction is completed.

Under the proposal, the agencies would have limited use of the grace period such that a community banking organization that had used the grace period for eight quarters in the previous five-year (twenty-quarter) period ending before the current quarter, would not have been permitted to use the grace period in the current quarter. A few commenters expressed support for the proposed limitation on usage of the grace period, noting that it would provide an appropriate safeguard. No commenters opposed the proposed limitation on usage of the grace period. One commenter requested that the agencies provide illustrative examples showing how the limitation would be applied.

To ensure that the recalibration of the CBLR and the extended grace period continue to support prudent levels of capitalization, the agencies are finalizing the limitation regarding the use of the grace period as proposed. Specifically, although a qualifying community banking organization may use the grace period for up to four consecutive quarters, it would only be allowed to use the grace period for the current quarter if it had not used the grace period for eight or more of the twenty quarters ending before the current quarter. If a banking organization that has used the grace period for eight of the previous twenty quarters subsequently ceases to meet the definition of a qualifying community banking organization, it must immediately comply with the minimum risk-based capital requirements and report the required risk-based capital ratios. For purposes of the limitation, a banking organization is considered to have used the grace period for one quarter each time it does not meet the definition of a qualifying community banking organization at the end of a quarter. 26

For example, provided a community banking organization maintains a leverage ratio above 7 percent, if the community banking organization were to use the grace period for each quarter in calendar years 2027 and 2029 (eight total quarters in the grace period), without using the grace period in calendar year 2028, it would not be able to use the grace period during calendar years 2030 or 2031 or the first quarter of 2032. If it ceases to meet the CBLR criteria at the end of any quarter during calendar years 2030 or 2031 or the first quarter of 2032, it would be required to comply immediately with the risk-based capital requirements. The community banking organization would, however, be able to use the grace period in the second quarter of 2032 because, in the twenty quarters prior (the second quarter of 2027 through the first quarter of 2032), it would have used the grace period for less than eight quarters (the second, third and fourth quarters of 2027 and all four quarters of 2029).

Use of the grace period is based on the previous twenty quarters irrespective of whether the community banking organization has elected to participate in the CBLR framework for each of those quarters. For example, if a qualifying community banking organization were to opt into the CBLR framework and use the grace period for each of the four quarters in calendar year 2026, revert to the risk-based capital framework in 2027, and then opt back into the CBLR framework in 2028, the community banking organization would include the four quarters of 2026 in which it used the grace period when calculating its grace period limit in 2028.

In the case of a merger or acquisition, the resulting banking organization would calculate the limitation based on the historical usage of the grace period by the surviving entity. For example, if a community banking organization were to use the grace period in the third and fourth quarters of both 2027 and 2030, and were to acquire another community banking organization in the second quarter of 2031 where the acquired entity had used the grace period in the third and fourth quarters of 2029, the surviving community banking organization would be considered to have used the grace period for four of the prior twenty quarters (the third and fourth quarters of 2027 and 2030). The acquired community banking organization's two quarters of grace period usage in 2029 are disregarded for purposes of the CBLR framework's limitation on the usage of the grace period.

As noted in the proposal, the agencies intend to monitor usage of the grace period to determine whether it is functioning as intended. If unique or unusual circumstances warrant a further extension of the grace period, or if application of different regulatory capital requirements becomes necessary, the agencies continue to reserve the authority to apply different risk-based or leverage capital requirements as appropriate and commensurate with the relevant risks and circumstances of a banking organization. 27

The agencies also proposed to remove the provisions under the CBLR framework that provided temporary relief for qualifying community banking organizations during the COVID-19 outbreak, including provisions required by the CARES Act. 28 The agencies received no comments on this aspect of the proposal and are finalizing these amendments as proposed. Because this temporary relief expired on December 31, 2021, removal of these provisions will have no substantive impact.

The agencies also received additional comments that were not related to specific aspects of the proposed changes. The agencies have considered these comments, but the final rule does not make changes to the proposal to address these comments. The agencies will continue to monitor the effectiveness of their rule and may make or propose changes in the future as appropriate.

Several commenters recommended that the total asset threshold for eligibility for the CBLR framework be increased beyond the $10 billion total asset threshold provided by section 201 of EGRRCPA. Some commenters recommended that the threshold be raised to $20 billion, $25 billion, or $30 billion and be indexed by inflation or nominal gross domestic product going forward. One commenter recommended that interest rate swaps sold to customers and interest rate hedges for a banking organization's interest-rate management not be included in the calculation of total consolidated assets.

Section 201(a)(3) of EGRRCPA provides that a qualifying community banking organization with total consolidated assets of less than $10 billion, that satisfies other factors, would be eligible to participate in the CBLR framework. The agencies are retaining this qualification criterion, consistent with EGRRCPA. The agencies will continue to monitor the effectiveness of their rule and may make or propose changes, including changes to asset thresholds, in the future as appropriate and as permitted by statute.

The final rule's changes to the calibration of the CBLR requirement achieve the agencies' goal of reducing regulatory burden on banking organizations while continuing to broadly maintain alignment between the treatment of exposures across the CBLR framework and the Tier 1 leverage ratio applicable to banking organizations that do not participate in the CBLR framework. Therefore, qualifying community banking organizations will continue to calculate total consolidated assets in accordance with the reporting instructions to the Call Report, or to Form FR Y-9C, as applicable.

Several commenters requested that the final rule eliminate the current 25 percent threshold deduction on mortgage servicing assets (MSAs) under the capital rule. These commenters asserted that the treatment for such assets is not commensurate with their risk and that the threshold deduction may prevent community banking organizations that would otherwise qualify from participating in the CBLR framework. Some commenters also asserted that the current regulatory treatment of MSAs has moved mortgage servicing outside of the banking system, and several commenters asserted that MSAs are effectively supervised through the examination process. Some commenters argued that the 25 percent threshold deduction on MSAs prevents adoption of the CBLR framework by community banking organizations that are well capitalized or have low risk profiles, which is inconsistent with the purpose of the CBLR framework. Other commenters argued that the threshold deduction on MSAs is overly complicated, should be inapplicable to small banking organizations, and is therefore inconsistent with the EGRRCPA. Additionally, one commenter recommended that the agencies adjust the regulatory treatment of MSAs for all banking organizations, in addition to adjusting for community banking organizations.

MSAs can be a useful tool for banking organizations to manage interest rate risk. The value of MSAs generally increases when interest rates rise, which extends the expected duration of related servicing fees. As a result, they may provide a hedge against losses on other assets that decline in value in the same interest rate environment. Moreover, MSAs are important for banking organizations to maintain their relationship with borrowers by retaining customer-facing relationships even after transferring the underlying loans, allowing cross-selling of products. Banking organizations can also improve efficiency of servicing activities by increasing scale. The current threshold deduction approach for MSAs can discourage banking organizations from creating economies of scale in mortgage servicing, which can hinder their ability to manage mortgage related interest rate risks.

While the agencies are not eliminating or raising the existing threshold for MSA deductions as part of this final rule, the agencies are currently proposing to remove the MSA threshold deduction for all banking organizations, including those subject to the CBLR framework, under separate notices of proposed rulemaking. 29 The agencies welcome comments on the MSA threshold deduction in response to those proposals and expect to consider changes to the threshold across the capital framework, including the CBLR framework.

One commenter recommended that the threshold in the CBLR framework for off-balance sheet exposures be increased from the current threshold of 25 percent to at least 30 percent to account for seasonality and provide more flexibility to community banking organizations whose business activities result in significant off-balance sheet exposures. This commenter argued that some CBLR banking organizations were at, or above, the halfway point for this threshold. The commenter also highlighted that conditionally cancelable unused commitments comprise the majority of off-balance sheet exposures for CBLR banking organizations. Additionally, the commenter noted that commitments can be subject to seasonal variation, particularly for banking organizations that engage in commercial and agricultural lending.

To qualify for the CBLR framework, community banking organizations may not have off-balance sheet exposures of more than 25 percent of total consolidated assets. In response to comments, the agencies conducted additional analysis of banking organizations' off-balance sheet exposures. While the bulk of these exposures are composed of conditionally cancellable commitments, the vast majority of community banking organizations have total off-balance sheet exposures below the 25 percent threshold. 30 Moreover, the data suggest that instances in which community banking organizations exceed the 25 percent threshold attributable to seasonal variation tend to be temporary and resolve within a one-year period.

The four-quarter grace period under the final rule helps to mitigate the impact of temporary fluctuations in off-balance-sheet exposures, including those arising from seasonal movements in unused commitments. The extended grace period ensures that a banking organization that ceases to meet the criteria for a qualifying community banking organization has sufficient time to make appropriate changes to its activities, and has the flexibility to manage seasonal variations in off-balance sheet exposures, in order to reestablish compliance with the CBLR framework. As a result, the final rule retains the 25 percent threshold for off-balance sheet exposures.

One commenter recommended that the connection between sustained compliance with the CBLR framework and the capital component of the CAMELS rating be strengthened. Another commenter requested that the final rule prohibit examiners from requiring qualifying community banking organizations that opt into the CBLR framework to calculate risk-based capital ratios, and another commenter asked the agencies to confirm that community banking organizations participating in the CBLR framework are not expected to maintain parallel risk-based capital systems. One commenter supported the early release of draft updates to relevant reporting instructions to provide banking organizations sufficient time to prepare, reduce implementation risk, and minimize operational disruption.

Any review of the CAMELS rating system would be conducted through the Federal Financial Institutions Examination Council (FFIEC). A qualifying community banking organization that participates in the CBLR framework is not required to calculate risk-based capital ratios or satisfy risk-based capital requirements. It has not been the agencies' policy to require qualifying community banking organizations that opt in to the CBLR framework to demonstrate to their primary federal supervisor that they have a readiness plan to comply with risk-based capital requirements in the event they become ineligible to participate in the CBLR framework. As noted in section VI.A, the agencies expect to make clarifying revisions to the instructions for the Call Reports and the FR Y-9C to reflect the final rule. These clarifications are not expected to affect the items that community banking organizations participating in the CBLR framework are required to report.

One commenter stated that despite the proposed changes to the CBLR framework, community banking organizations would continue to face higher capital requirements than large banking organizations, and another commenter noted that other rulemakings could increase competitive advantages for larger banking organizations. One commenter recommended that the agencies eliminate the need to choose between the CBLR framework and the Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (Small BHC and SLHC Policy Statement). 31 Another commenter requested that the agencies clarify that the CBLR framework applies separately to community bank depository institutions and community bank holding companies. One commenter recommended that the CBLR framework continue to be optional for community banking organizations. Another commenter suggested that the agencies allow banking organizations with multiple depository institutions, some of which have chosen to participate in the CBLR framework and some of which have not, to use a single consolidated risk-based calculation at the parent level.

The agencies have proposed modifications to the risk-based capital framework and will consider public comment on the risk-based capital framework in connection with these risk-based capital proposals. 32 The CBLR framework is intended to be used by community banking organizations that meet certain qualifying criteria. The final rule does not prevent bank holding companies or savings and loan holding companies, regardless of their subsidiary depository institutions' adoption or non-adoption of the CBLR framework, from operating under the Small BHC and SLHC Policy Statement if they meet its requirements. The CBLR framework continues to be optional for qualifying community banking organizations, and the final rule does not prevent a qualifying community banking organization from adopting the CBLR, regardless of the adoption or non-adoption by an affiliate depository institution or depository institution holding company. Banking organizations within a consolidated group may make different elections with respect to the CBLR framework.

This section outlines the expected economic effects of the final rule, including both its benefits and costs, on community banking organizations. The final rule modifies the CBLR framework for qualifying community banking organizations along two key dimensions. First, it reduces the calibration of the CBLR requirement from 9 percent to 8 percent. Second, a qualifying community banking organization that fails to meet one or more of the qualifying criteria after opting into the CBLR framework will have four quarters, rather than two quarters, 33 to meet the qualifying criteria under the CBLR framework or to comply with the risk-based capital requirements. The analysis compares outcomes under the final rule to a baseline scenario in which the current framework would not have changed; specifically, the baseline assumes a 9 percent CBLR requirement with a two-quarter grace period for electing community banking organizations.

The analysis is based on data from Reports of Condition and Income (Call Reports) for depository institutions and Consolidated Financial Statements for Holding Companies (FR Y-9C) for the quarter ending June 30, 2025. 34 Core statistics are reported at the depository institution, community bank holding company, and community banking organization levels, with the latter using consolidated organization data aggregated at the top-tier consolidated organization level. While some supporting analysis is conducted at either the depository institution level or the community banking organization level, the agencies expect the conclusions to be broadly applicable across these entity types.

According to Call Reports for the quarter ending June 30, 2025, there are 4,477 depository institutions operating in the United States. 35 Of these, 4,241 meet the size and simplicity thresholds for CBLR eligibility: total consolidated assets of less than $10 billion, off-balance sheet exposures of no more than 25 percent of total consolidated assets, total trading assets and trading liabilities of no more than 5 percent of total consolidated assets, and are not an advanced approaches banking organization.

According to FR Y-9C data for the quarter ending June 30, 2025, there are 238 community bank holding companies subject to the capital rule. 36 Of these, 227 meet the size and simplicity thresholds for CBLR eligibility.

Taking a consolidated perspective, these depository institutions and holding companies together compose 4,100 unique community banking organizations as of June 30, 2025. 37 Of these, 4,030 meet the size and simplicity thresholds for CBLR eligibility.

Of the 4,241 depository institutions that meet the size and simplicity thresholds for CBLR eligibility, 3,638 report a leverage ratio greater than 9 percent and therefore meet all requirements to qualify for the CBLR framework. Of those 3,638 qualifying depository institutions, 1,693 currently participate in the CBLR framework. That is, 47 percent of eligible depository institutions have adopted the CBLR framework. This participation rate has remained relatively constant since the CBLR framework was implemented in 2020. Another 23 depository institutions, although not presently meeting the CBLR requirement, remain in the framework under the current two quarter grace period. 38 Table 1 reports counts of these depository institutions, including a breakdown by discrete leverage ratio:

As Table 1 shows, the fraction of participating depository institutions increases with the depository institutions' excess leverage ratio. This tendency suggests that, by decreasing the CBLR requirement to 8 percent, the final rule could encourage some currently eligible depository institutions to opt into the framework.

Turning to community bank holding companies, 165 report a leverage ratio greater than 9 percent and meet all requirements to be considered qualifying community banking organizations. Of the 165 qualifying community bank holding companies, 25 currently opt into the CBLR framework. 39 That is, 16 percent of qualifying community bank holding companies are participating in the CBLR framework.

Taking a consolidated perspective, 3,426 community banking organizations have a leverage ratio greater than 9 percent and meet all requirements to be considered qualifying community banking organizations. Of those 3,426 qualifying community banking organizations, 1,658 currently opt in to the CBLR framework. 40 That is, 48 percent of qualifying community banking organizations participate in the CBLR framework.

The smallest community banking organizations tend to opt into the CBLR framework at higher rates. Fifty-three percent of qualifying community banking organizations with assets less than $1 billion are participating in the framework as of June 30, 2025, compared to 28 percent of qualifying community banking organizations with assets above $1 billion. Of qualifying community banking organizations with less than $500 million in assets, 57 percent are currently participating in the framework. Viewed another way, 91 percent of community banking organizations that are currently participating in the CBLR framework have total assets of less than $1 billion. 41

As shown in Table 1 above, 480 depository institutions have leverage ratios between 8 and 9 percent while meeting all other qualifying criteria for the CBLR framework. Under the final rule, these 480 depository institutions would become eligible for the CBLR framework, in addition to the 3,638 depository institutions that already qualify as of June 30, 2025, which would represent a 13 percent increase in the population of eligible depository institutions. As such, under the final rule, more depository institutions would become eligible for the CBLR framework.

While the final rule is expected to increase the number of qualifying depository institutions, historical experience indicates that a portion of qualifying depository institutions prefer to not opt into the CBLR framework. Several commenters agreed with the agencies that the revisions to the CBLR framework in the proposal are likely to encourage greater participation. To provide a broad estimate of the number of depository institutions that could opt into the framework under the final rule, the agencies assume that the likelihood of adoption depends primarily on a depository institution's buffer of tier 1 capital in excess of the CBLR requirement. This assumption implies that the relationship between adoption rates and excess leverage ratios will remain consistent with that observed under the baseline. Based on this approach, the agencies estimate that 2,039 depository institutions would adopt the CBLR under the expanded scope, representing an increase of 323 depository institutions relative to the current rule. 42 This estimate is imprecise because it is based on a simple model, which does not take into account the potential impact of the grace period extension on CBLR adoption. 43 The model also does not account for the potential impact of regulatory capital proposals currently released for comment on qualifying depository institutions' decisions to adopt or not adopt CBLR. 44 Institutions generally face a tradeoff between lower required capital under the risk-based framework and simpler reporting requirements under the CBLR framework. Any reductions in capital requirements under the risk-based framework could lead to fewer qualifying depository institutions choosing to adopt the CBLR framework than estimated by the model. 45

For community bank holding companies, 46 have leverage ratios between 8 and 9 percent while meeting all other criteria for the CBLR framework, which would represent a 28 percent increase in the population of eligible community bank holding companies relative to the 165 that currently qualify.

Considering the depository institutions and holding companies together from a consolidated perspective, 477 community banking organizations have leverage ratios between 8 and 9 percent while meeting all other qualifying criteria, which would represent a 14 percent increase in the population of eligible community banking organizations relative to the 3,426 community banking organizations that currently qualify.

The agencies assess the stringency of the CBLR framework by comparing the 8 percent risk-based tier 1 capital requirement to be considered well capitalized under the PCA framework directly with the CBLR requirement for community banking organizations that are not participating in the CBLR framework and are expected to be eligible under the final rule. 46 The 8 percent CBLR requirement is less stringent than the tier 1 risk-based capital requirement for five of the 1,768 currently eligible banking organizations that are not participating in the framework. 47 No newly eligible community banking organizations are expected to face a less stringent tier 1 capital requirement under the 8 percent CBLR requirement.

The agencies identify two main benefits of the final rule's changes to the CBLR framework. First, by expanding eligibility and extending the grace period, the final rule is expected to enable more community banking organizations to benefit from the regulatory cost savings provided by the CBLR framework. Second, the reduced CBLR requirement is expected to provide community banking organizations that are currently participating in the CBLR framework with capacity to expand their balance sheets, which could lead to increased lending to the communities served by these banking organizations.

Several commenters agreed that the proposed changes to the CBLR framework are likely to provide material benefits to community banking organizations. For additional details on benefits described by commenters see Section V.F.

All participating community banking organizations under the final rule are expected to benefit from the CBLR framework by avoiding the costs associated with gathering, recording, and reporting various risk-based capital measures. While the agencies do not have sufficient information to quantify all aspects of these savings, 48 participating community banking organizations that operate internal recordkeeping systems to comply with risk-based capital regulations may discontinue or simplify these systems. Other participating community banking organizations that rely on third party vendors to operate the relevant compliance systems could experience reductions in outsourcing costs. 49

Some participating community banking organizations currently maintain parallel record keeping systems to comply with both the CBLR framework and the risk-based capital requirements to minimize the cost of falling out of compliance with the CBLR framework. The final rule is expected to reduce the risk of having to revert to the risk-based capital framework and to provide additional time to adjust systems in the event that a community banking organization no longer meets the qualifying criteria. As such, the final rule could enable some participating community banking organizations to discontinue these systems and realize meaningful cost savings. Although institutions that discontinue a parallel system could incur costs to reestablish it if they later exit the CBLR framework, institutions would be expected to make such decisions only where the anticipated net benefits of discontinuation exceed these potential future costs.

The final rule's extension of the CBLR grace period is expected to provide benefits to community banking organizations participating in the framework who enter the grace period due to a drop in their leverage ratios or a failure to meet any of the other qualifying criteria and who are capable of meeting the criteria within a four-quarter period but not a two-quarter period. Between the second quarter of 2022 and fourth quarter of 2024, 210 participating depository institutions have entered grace periods for one or more quarters. 50 Within these two years, there were 28 depository institutions that were required to leave the CBLR framework at least once because they did not regain CBLR eligibility within two quarters, and subsequently regained CBLR eligibility within four quarters. 51 Thus, if the grace period had been four quarters, these 28 depository institutions would have been able to remain in the CBLR framework and avoid any costs incurred by returning to the risk-based capital framework. This suggests that some depository institutions could benefit from the extension of the grace period.

Many commenters noted that the extended grace period would allow more temporarily non-compliant CBLR banking organizations to return to full compliance without experiencing operational challenges or incurring unnecessary costs.

An increase in CBLR framework adoption is expected to especially benefit smaller banking organizations that participate by reducing their costs of compliance with the risk-based capital framework. Such fixed costs can have greater salience for smaller banking organizations. This benefit is consistent with the finding in section V.A.2 that a greater fraction of smaller banking organizations participate in the CBLR framework.

The agencies examine how the calibration under the final rule expands the balance sheet capacity of community banking organizations that currently participate in the CBLR framework using a two-step process. First, the agencies estimate the potential reduction in community banking organizations' tier 1 leverage ratios due to the final rule's change in the CBLR requirement from 9 percent to 8 percent. The analysis assumes that community banking organizations participating in the CBLR framework could reduce their tier 1 leverage ratios by the final rule's change of 1 percentage point of average consolidated assets, except for those community banking organizations with a leverage ratio less than 10 percent. The latter are assumed to reduce their tier 1 leverage ratio to 9 percent (that is, maintain an excess leverage ratio of 1 percentage point).

In the second step, the analysis computes the growth in each participating community banking organization's total consolidated assets that would reduce its tier 1 leverage ratio to the ratio derived in step one, while holding tier 1 capital fixed. The estimated asset growth rate is then multiplied by the community banking organization's average consolidated assets to obtain its expanded asset base under the final rule, with the provision that community banking organizations do not grow above $10 billion in total assets.

The agencies estimate that the reduced CBLR requirement under the final rule could provide currently participating community banking organizations with the capacity to expand their balance sheets by $64 billion in aggregate. This would represent an 8.1 percent expansion of participating community banking organizations' assets or a 1.8 percent expansion relative to the total assets of all community banking organizations. This increase in balance sheet capacity could facilitate additional lending by community banking organizations participating in the CBLR framework and support the economic activity of the communities they serve. 52 However, community banking organizations may not utilize this capacity in full. There is uncertainty regarding the extent to which such an increase in lending by these banking organizations will occur. 53

Many newly eligible community banking organizations that opt into the CBLR framework could also increase their lending relative to total assets. Historical data indicate that among depository institutions that adopted the CBLR framework between 2020Q1 and 2025Q2, the share of loans and leases  54 in total average assets increased by about 6.6 percentage points during the year following adoption. 55 This average increase only occurs after adoption of the CBLR framework—it is not present in analogous year-over-year differences ending four quarters prior, one quarter prior, or one quarter after the election, 56 —which suggests that the final rule could result in an increase in lending by newly eligible community banking organizations that opt into the CBLR framework.

In summary, the expected benefits of the final rule accrue to both community banking organizations participating under the current requirements and to community banking organizations that will adopt the framework under the requirements of the final rule. Although the agencies cannot precisely quantify these benefits, the fact that fewer than half of qualifying community banking organizations currently opt into the CBLR framework suggests that the potential benefits could be substantial.

The final rule remains broadly consistent with the current well capitalized category under the PCA framework. It may, however, impose costs on banking organizations and the banking industry in that it could encourage community banking organizations currently participating in the CBLR framework to operate with lower capital ratios or newly eligible community banking organizations that opt into the CBLR framework to take on riskier loans. For example, the increase in balance sheet capacity presented in section V.C.2 assumes banking organizations currently participating in the CBLR framework will grow their balance sheets while maintaining the same amount of capital.

The evidence on potential balance sheet adjustments is mixed. Some studies evaluating the initial creation of the CBLR framework suggest that participating community banking organizations increased their share of relatively higher-yielding assets, including unsecured loans, and experienced modest increases in non-performing loans, charge-offs, or subordinate mortgage exposures. 57 However, the extent of these changes appears heterogeneous across organizations and the overall effect on risk-taking seems muted. This also suggests that, while the final rule may result in changes to the composition, in addition to the level, of bank lending, the compositional shift will likely be minimal.

In addition, the agencies could not find evidence that previous temporary changes in the CBLR requirement substantially affected the amount of tier 1 capital maintained by depository institutions. Between the fourth quarter of 2020, when the CBLR requirement was above 8 percent, and the fourth quarter of 2022, when the CBLR requirement was above 9 percent, the aggregate leverage ratio for a balanced panel of 1,337 participating depository institutions increased by 8 basis points, from 13.39 to 13.47, suggesting that the aggregate tier 1 capital at electing depository institutions did not react in aggregate to the increase in the CBLR requirement. 58 These results should be interpreted with caution, however. In addition to being based on a relatively short observation window amid unusual economic conditions, the temporary nature of the previous change in requirements limits comparability to the final rule as banking organizations are likely to react more strongly to changes that are not subject to expiration. Moreover, depository institutions participating in the CBLR framework currently maintain high levels of tier 1 capital, with a median excess leverage ratio of 2.9 percent of average total consolidated assets.

Some commenters argued that the revisions to the CBLR framework would not materially increase risk to the financial system or the communities served by participating organizations. Other commenters emphasized the low-risk profile common to CBLR-eligible banking organizations, which helps to alleviate potential safety and soundness concerns about the reduced CBLR requirement.

The final rule's extension of the grace period from two quarters to four quarters could entail additional costs if community banking organizations approaching the CBLR requirement delay timely capital adjustments. A longer grace period may allow some community banking organizations to operate temporarily below the CBLR requirement while remaining in the CBLR framework, potentially increasing supervisory monitoring needs. One commenter expressed concern that a four-quarter grace period could lead to number of organizations below the 8 percent threshold. However, as noted in the proposal, the final rule's grace period limitation—which allows a qualifying community banking organization to use the grace period for up to four consecutive quarters at a time only if it has not used the grace period for eight or more of the prior twenty quarters—is expected to mitigate these potential costs. In addition, the extension could produce regulatory cost savings for community banking organizations by limiting unnecessary exits and re-entries into the framework due to short-term fluctuations in their leverage ratios.

Overall, the agencies anticipate that the benefits of the final rule justify the costs.

The agencies considered several alternatives to the final rule that could meet the objectives of this rulemaking. For the reasons described, the agencies view the final rule as the most appropriate and effective means of achieving the policy objectives described in Section III.

The agencies considered not promulgating any regulatory action to amend the CBLR framework. However, as previously discussed, the agencies desire to increase the adoption rate for the CBLR framework. As discussed above, the final rule is expected to provide clear cost savings and other benefits over this no-action alternative.

The agencies also considered lowering the CBLR requirement to above 8 percent but keeping the grace period to two quarters. This alternative would have provided some relief to community banking organizations; however, as described above, the extension of the grace period under the final rule is expected to provide substantial regulatory relief that meets the objectives of the EGRRCPA and the stated objectives of the final rule without entailing significant costs. The agencies did not receive any comments regarding this alternative.

Several commenters noted that the anticipated reduction in regulatory burden is likely to provide material benefits to community banking organizations, such as enhanced capital planning and greater capacity to fund operational improvements. One commenter noted that retained earnings could be redirected by CBLR banking organizations to improve their business operations and risk management, for example, via technology upgrades. 59 The same commenter suggested that the changes described in the proposal may also provide CBLR banking organizations with greater capacity to rebuild capital in periods of stress, despite the likelihood of decreased retained earnings. Another commenter noted, similarly, that the reduced CBLR requirement could strengthen electing banking organizations' ability to weather the volatility of local business cycles. Additional benefits for CBLR banking organizations mentioned by commenters include greater flexibility to invest in innovation necessary to remain competitive and the potential enablement of accretive mergers and acquisitions useful for achieving economies of scale.

Many of the benefits raised by commenters are possible under the final CBLR rule. In addition to benefits that follow directly from regulatory cost savings, CBLR banking organizations may use some of the expanded balance sheet capacity quantified in Section V.C.2 to invest in assets that support operational enhancements or innovation.

Table 2 calculates the fraction of depository institutions that adopt the CBLR framework by groups of excess tier 1 leverage ratios split in 1 percentage point increments. For example, 31 percent of depository institutions with an excess leverage ratio between 0 and 1 percent of average total consolidated assets adopted the CBLR framework as of June 30, 2025. Assuming that these observed adoption rates remain unchanged for each excess leverage ratio category under the 8 percent calibration, the agencies can estimate the number of depository institutions that will join the framework.

The agencies estimate that 2,039 depository institutions could adopt the CBLR framework under the 8 percent calibration, representing an increase of 323 depository institutions relative to the current rule. Under this projection, 129 of the newly electing depository institutions have a leverage ratio between 8 and 9 percent and would be newly eligible, while 189 depository institutions are currently eligible and would decide to join under the new calibration. 60

In the National Bank Act (NBA), Congress granted national banks enumerated powers, including to “loan[ ] money on personal security” and to “receiv[e] deposits,” as well as “all such incidental powers as shall be necessary to carry on the business of banking.”  1 As the OCC and courts have long recognized, national banks thus have broad powers to engage in activities that are part of, or incidental to, the business of banking, including issuing debit cards and credit cards (payment cards) and processing payments. 2

National banks also have the authority to receive compensation for the products and services they provide, including to charge and receive interchange fees  3 for processing payment card transactions. 4 Specifically, 12 CFR 7.4002, which implements the NBA, sets out national banks' broad authority to impose non-interest charges and fees and provides each national bank with the discretion to make business decisions about how to impose these charges and fees. 5

Recently, a Federal district court in the Northern District of Illinois created ambiguity about the scope of § 7.4002, asserting that national banks do not “set” interchange fees and finding that “[t]he thrust of 12 CFR 7.4002 is not to protect fees centrally established by a third-party company.”  6 Such a finding is, however, inapposite to the OCC and courts' longstanding interpretation of § 7.4002 and fails to recognize the reality of the payment card systems and the modern economy. The OCC is issuing this interim final rule to clarify the scope of this national bank power.

National banks routinely rely on third parties for a range of products and services. 7 In particular, third parties are crucial to national banks' provision of payment cards, which are vital and deeply rooted components of the American and global economy. These cards are among the most universally accepted and common methods of payment and are routinely used by millions of consumers to pay for products and services worldwide. 8

National banks serve essential roles within card networks, which are a crucial means of exercising their statutory deposit-taking and lending powers. National banks contract with card networks ( e.g., Visa and Mastercard) and others to facilitate payment card transactions. As the issuers of credit and debit cards, they provide payment cards to customers, assess cardholder risk, and offer services including fraud detection and prevention, dispute resolution, and rewards programs. As acquirers, they contract with merchants who accept payment cards and connect these merchants to the card network so that transactions are seamlessly processed and settled.

As compensation, national banks are paid fees for their payment card services. These fees, which include interchange fees, compensate these institutions for the costs of their participation, incentivize their provision of services and continued participation in the network, and enable enhancements, such as fraud detection and prevention, rewards programs, and technology upgrades.

National banks could engage in bilateral negotiations with myriad merchants and other banks involved in processing payment card transactions to establish the terms of this activity, including fees. 9 Given the global nature of payment card systems, however, such a process would be complex, inefficient, ineffective, and costly. Moreover, most national banks do not have the resources to engage in such activities. Accordingly, most national banks agree to the interchange fees set by the card networks. The NBA clearly permits national banks to make this decision, along with decisions about the payment card services to offer, the card networks with which to contract, and the terms of the agreements. Therefore, the applicability of § 7.4002 should not be read to change simply because a third party has a role in setting the non-interest charges and fees.

Although the OCC believes that § 7.4002 already allows national banks to impose fees that are set by a third party, the OCC is revising § 7.4002 to make that explicit and resolve any uncertainty about the scope of the regulation. The OCC is also revising § 7.4002 to specifically include interchange fees as a type of non-interest charge or fee national banks may impose.

Some of the confusion about the scope of § 7.4002 appears to be related to the lack of clarity about what it means for a national bank to “ charge . . . non-interest charges and fees.” Accordingly, the OCC is adding a definition of “charge” to paragraph (a) of § 7.4002 and moving the authority to impose non-interest charges and fees to paragraph (b) of the section. This definition clarifies that charge means to assess, collect, impose, levy, receive, reserve, take, or otherwise obtain, including through a fee sharing or similar economic relationship. This definition also clarifies that national banks may take such actions directly or through intermediaries, partners, payment networks, interchanges, or other third parties. These amendments are intended to encompass various means by which a national bank may obtain non-interest compensation for providing a product or service, regardless of which entity sets the amount of the non-interest charge or fee or exactly how the national bank obtains the charge or fee. 10

The OCC is also amending the authority to impose non-interest charges and fees, now redesignated as paragraph (b) of § 7.4002, to remove the word “customer.” As reflected in the new definition of “charge,” the purpose of revised § 7.4002 is to clearly articulate national banks' power to receive non-interest compensation for providing products or services, regardless of whether that compensation comes directly from the individual or entity receiving the product or service or via a third party that may not have a “customer” relationship with the bank.

Current § 7.4002 contains only one example of the types of non-interest charges and fees national banks can impose—deposit account service charges. Although previous iterations of § 7.4002 contained additional examples of non-interest charges and fees, the OCC generally removed the examples in 2001, noting that “explicit reference to the . . . types of fees is unnecessary and could be misinterpreted as a limitation on a national bank's ability to charge other types of fees.”  11 Given recent confusion, however, the OCC is adding interchange fees as another nonexclusive example of the charges and fees covered by § 7.4002 to provide additional clarity. The agency continues to emphasize, however, that the inclusion of this example does not imply the exclusion of other non-interest charges and fees. 12

The OCC is also amending several parts of newly redesignated paragraph (c)(2) of § 7.4002 to explicitly include scenarios where non-interest charges or fees may be set by, or in conjunction with, third parties. The existing paragraph (b)(2) provides that the establishment of non-interest charges and fees, their amounts, and the method of calculating them are business decisions to be made by each national bank, in its discretion, according to sound banking judgment and safe and sound banking principles. This paragraph also describes the factors a national bank considers when making the business decision to establish non-interest charges and fees in accordance with safe and sound banking principles. This interim final rule amends this paragraph to make explicit that a national bank's choices regarding charging non-interest charges and fees, including whether to enter into business relationships or lines of business or charge fees set by or in consultation with third parties, are also business decisions to be made by each bank, in its discretion according to sound banking judgment and safe and sound banking principles. These amendments also clarify that the factors a national bank considers include the use of third parties to provide or facilitate the provision of a product or service. The amendments reflect the reality of the modern financial system and global economy, where products and services may be more efficiently and effectively provided through the use of third parties, which may also make or influence decisions regarding pricing.

The OCC is also making conforming edits to paragraph (c)(1) of § 7.4002 to clarify that it applies to the business decisions a national bank makes regarding non-interest charges and fees. Consistent with this provision and applicable antitrust law, national banks are prohibited from engaging in illegal anticompetitive conduct in making business decisions regarding non-interest charges and fees. 13

The OCC is issuing this interim final rule without prior notice and the opportunity for public comment that are ordinarily prescribed by the Administrative Procedure Act (APA). 14 Pursuant to 5 U.S.C. 553(b)(B), general notice and the opportunity for public comment are not required with respect to a rulemaking when an “agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

The OCC has found that prior notice and public comment are impracticable for this interim final rule due to the regulatory confusion created by the February 2026, Raoul SJ opinion, which found that Federal law does not preempt a key provision of the Illinois Interchange Fee Prohibition Act (IFPA), 15 and the potential consequences of such confusion. In the Raoul SJ opinion, the district court removed its December 2024 preliminary injunction of the IFPA as applied to national banks and other depository institutions. 16 The court's analysis in the Raoul SJ opinion was based, in part, on a misunderstanding of the NBA and § 7.4002. As a result, absent this interim final rule, there likely will be significant uncertainty as to whether national banks are required to comply with the IFPA by July 1, 2026.

As explained below, the IFPA creates a complex and potentially unworkable standard, and it imposes significant potential liability for non-compliance. Therefore, national banks may take drastic actions to avoid these risks, up to and including declining payment card transactions subject to the IFPA. 17 Given the complexity of the payment card systems and the modern economy, these effects may not be limited to Illinois.

For national banks that choose to continue to support these payment card transactions, the OCC understands that these banks will need to inform customers, in advance of the IFPA's July 1, 2026 effective date, that the terms and conditions of their payment cards may soon change. 18 The OCC also understands that national banks will need to inform merchants about possible changes, including updates to how they process payments, the need for new software or hardware, or that some transactions may be declined. 19 These communications, as well as the potential for national banks to stop supporting covered payment card transactions, may generate significant customer and merchant confusion about whether, or how, payment cards will work after the IFPA's effective date. These potential actions may cause doubt about continued access to basic lending and deposit services, which could lead to economic harm and disruption and pose significant risks to the safety and soundness of national banks and the national banking system as a whole.

In light of these potential consequences, the OCC, for good cause, finds that advance notice and comment is impracticable and is issuing this interim final rule. This rule will provide certainty that the IFPA is preempted with respect to national banks before it goes into effect and therefore help prevent the imminent negative effects of the IFPA's application to national banks. Given the importance of this issue, however, the OCC invites public comment on all aspects of this interim final rule and intends to issue a final rule as soon as possible after the close of the comment period and sufficient time to consider and address comments.

In the modern economy, millions of customers and merchants worldwide rely on payment cards every day, including an estimated 1.3 million merchants in Illinois. 20 As discussed above, national banks serve an essential function in the U.S. payment card systems. 21 A significant disruption of these payment networks could cause substantial economic harm.

On June 7, 2024, Illinois enacted the IFPA, which, among other things, prohibits card issuer banks, card networks, acquirer banks, and other participants from receiving or charging a merchant an interchange fee on the tax or gratuity amount of a payment card transaction. 22 This prohibition, known as the interchange fee prohibition, applies if the merchant informs the acquirer of the tax or gratuity amount as part of the authorization or settlement of the transaction (automatic process). 23 Alternatively, the merchant has 180 days to transmit the relevant documentation ( e.g., paper receipts) to the acquirer bank, after which the issuer has 30 days to credit the merchant for any interchange fee charged on the tax or gratuity amount (manual process). 24 Violations of the interchange fee prohibition carry a civil penalty of $1,000 per transaction. 25 The IFPA goes into effect on July 1, 2026.

In August 2024, the Illinois Credit Union League, Illinois Bankers Association, America's Credit Unions, and American Bankers Association (collectively, IBA) sought to enjoin the IFPA. 26 On December 20, 2024, the district court for the Northern District of Illinois granted a preliminary injunction as applied to national banks. 27 In February 2026, however, approximately four months before the IFPA's effective date, the district court reversed course. It found that the interchange fee prohibition was not preempted by federal law, reasoning that “[t]he thrust of 12 CFR 7.4002 is not to protect fees centrally established by a third-party company.”  28

The OCC understands that current payment card infrastructure does not support the IFPA's automatic process and cannot be updated by the IFPA's effective date. 29 To implement this process would appear to require, at a minimum: (1) the card networks to develop new technological and standards changes in coordination with relevant U.S. and international standards bodies; (2) acquirer and issuer banks to implement these changes; and (3) merchants to develop and adopt systems to transmit the requisite information at the point of sale. 30 Such changes likely would entail lengthy and careful planning because implementation glitches or failures could disrupt global payment card systems or create opportunities for fraud or misuse. 31

As an alternative, certain merchants may invoke IFPA's manual process by submitting tax documentation. It is unclear, however, how this process could be implemented. Acquirer national banks may not be able to identify the issuer national bank in a given transaction. 32 Even if identification were possible, there is generally no mechanism for direct communication between these banks. 33 Furthermore, based on the broad definition of tax documentation, which includes “invoices, receipts, journals, ledgers, and tax returns,” an issuer bank may not be able to reliably identify the tax and gratuity amount for each transaction or calculate the corresponding interchange fee credit. 34 Even if each of these hurdles could be overcome, building new systems and hiring staff to facilitate this highly manual process would require time to develop and test. 35

Despite the complex and potentially unworkable nature of the interchange fee prohibition, the IFPA exposes national banks to penalties of $1,000 per transaction for failing to comply with its provisions. 36 Given the upwards of 6.5 billion payment card transactions that occur yearly in Illinois, participants in the payment card systems could be subject to as much as $6.5 trillion in liability per year for non-compliance with IFPA. 37 The potential liability could pose significant risk to a national bank's safety and soundness as well as the national banking system.

In light of the above, the card networks and banks may seek to mitigate their liability, for example, by advising merchants in Illinois not to accept payment cards for tax and gratuity, attempting to decline certain classes of transactions ( e.g., purchases of gasoline, where excise tax is imbedded in the product's price), 38 or denying payment card transactions originating in Illinois or elsewhere. 39 Some smaller banks may even be forced to stop offering payment cards altogether. 40 Some have stated that compliance with the IFPA could lead to “potentially business-ending consequences” for some participants. 41

The OCC understands that banks will need to communicate with customers and other stakeholders about the effects of the IFPA, including potential changes to the functionality of payment cards. 42 As noted above, these communications may generate significant confusion and doubt about access to basic lending and deposit services, especially when combined with potential widespread and unpredictable declinations of payment card transactions. This could lead to economic harm and disruption and pose significant risks to the safety and soundness of national banks and the national banking system as a whole.

To avoid these potentially grave consequences, the OCC is acting by interim final rule.

Under the Paperwork Reduction Act of 1995 (PRA), 43 the OCC may not conduct or sponsor, and a respondent is not 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 interim final rule and determined that it does not create any new or revise any existing collections of information. Accordingly, no PRA submissions to OMB will be made with respect to this interim final rule.

The Regulatory Flexibility Act (RFA)  44 requires an agency to consider whether the rules it proposes will have a significant economic impact on a substantial number of small entities. 45 The RFA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). As discussed above, consistent with § 553(b)(B) of the APA, the OCC has determined for good cause that general notice and opportunity for public comment is impracticable and therefore is not issuing a notice of proposed rulemaking. Accordingly, the RFA's requirements relating to initial and final regulatory flexibility analysis do not apply to this interim final rule.

However, the OCC evaluated whether the interim final rule will have a significant economic impact on a substantial number of small entities. The OCC currently supervises approximately 609 small entities, of which 420 are national banks that will be impacted by the interim final rule.

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. Therefore, since the interim final rule will affect all 420 OCC-supervised national banks, a substantial number of OCC-supervised small entities would be impacted.

However, the interim final rule imposes no new mandates, and thus no direct costs, on affected OCC-supervised institutions. Therefore, the OCC believes that the interim final rule will not have a significant economic impact on a substantial number of small entities.

As a general matter, the Unfunded Mandates Reform Act of 1995 (UMRA) requires the preparation of a budgetary impact statement before promulgating a rule that 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 ($193 million as adjusted annually for inflation). 46 However, the UMRA does not apply to final rules for which a general notice of proposed rulemaking was not published. As discussed above, consistent with § 553(b)(B) of the APA, the OCC has determined for good cause that general notice and opportunity for public comment is impracticable and therefore is not issuing a notice of proposed rulemaking. Moreover, the OCC has analyzed the interim final rule under the factors in UMRA. Because this interim final rule imposes no new mandates, it will not require additional expenditure of $193 million or more annually by any State, local, or tribal governments, in the aggregate, or by the private sector. Accordingly, for these reasons, the OCC has not prepared the written statement described in § 202 of UMRA.

Pursuant to § 302(a) of the Riegle Community Development and Regulatory Improvement Act (RCDRIA) of 1994, 47 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 does not impose any reporting, disclosure, or other requirements on insured depository institutions. Therefore, § 302(a) does not apply to this interim final rule.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) within OMB will review all “significant regulatory actions” as defined therein. OIRA has determined that this interim final rule is an economically significant regulatory action under section 3(f)(1) of Executive Order 12866.

As discussed above and in the Supplementary Information section of the OCC's concurrent interim final order finding that Federal law preempts the IFPA (Preemption Order), the IFPA would impose substantial costs on banks. This interim final rule clarifies the scope of national banks' power to charge non-interest charges and fees. As explained in the Preemption Order, the IFPA prevents or significantly interferes with this power and is preempted with respect to national banks. Therefore, this interim final rule, the effect of which is made clear by the Preemption Order, will result in significant cost savings.

Executive Order 14192, titled “Unleashing Prosperity Through Deregulation,” separately requires that an agency, unless prohibited by law, identify at least 10 existing regulations to be repealed when the agency publicly proposes for notice and comment or otherwise promulgates a new regulation with total costs greater than zero. Executive Order 14192 further requires that 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. The OCC has determined that the interim final rule will be a deregulatory action under Executive Order 14192 because it may provide legal clarity for affected OCC-supervised institutions.

Before a rule can take effect, Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act or CRA)  48 provides that the OCC must submit to Congress and to the Comptroller General the rule along with a report indicating whether it is a “major rule.” In general, if a rule is a “major rule,” the CRA provides that the rule may not takes effect until 60 days after Congress receives the required report or publication of the rule in the Federal Register . 49 The CRA defines a “major rule” as any rule that the Administrator of OIRA finds has resulted in or is likely to result in (1) an annual effect on the economy of $100,000,000; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (3) a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. 50 OIRA has determined that this interim final rule is a major rule.

The effective date of this interim final rule is June 30, 2026. As required by the Congressional Review Act, the OCC will submit the interim final rule and other appropriate reports to Congress and the Government Accountability Office for review.

The Providing Accountability Through Transparency Act of 2023  51 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 . While the OCC is not issuing a notice of proposed rulemaking, a summary of this interim final rule can be found below and at https://occ.gov/topics/laws-and-regulations/occ-regulations/proposed-issuances/index-proposed-issuances.html .

The OCC is adopting an interim final rule to clarify that national banks' power to charge non-interest charges and fees includes the power to assess, collect, impose, levy, receive, reserve, take, or otherwise obtain non-interest charges and fees, including interchange fees from credit and debit card operations. Further, the interim final rule explains that national banks may charge non-interest charges or fees, even when such charges and fees are set by or in consultation with third parties. The OCC invites public comments on this interim final rule.

For the reasons set out in the preamble, the OCC amends part 12 of chapter I of title 12 of the Code of Federal Regulations as follows:

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments using a method listed under ADDRESSES . Include “Docket No. FAA-2026-3867; Project Identifier MCAI-2026-00403-R” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

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

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

The FAA issued Emergency AD 2026-08-51, dated April 16, 2026 (Emergency AD 2026-08-51) (also referred to as the emergency AD), to address an unsafe condition on all AHD Model MBB-BK 117 D-3 helicopters. The FAA sent the emergency AD to all known U.S. owners and operators of these helicopters. The emergency AD requires inspecting the rotor hub-shaft for a crack and depending on the inspection results, replacing any rotor hub-shaft that has any cracks and reporting information after accomplishment of the replacement. The emergency AD also prohibits installing any affected rotor hub-shaft on any helicopter, unless certain requirements are met.

Emergency AD 2026-08-51 was prompted by EASA Emergency AD 2026-0078-E, dated April 13, 2026 (EASA Emergency AD 2026-0078-E) (also referred to as the MCAI), issued by EASA, which is the Technical Agent for the Member States of the European Union, to correct an unsafe condition on all AHD Model MBB-BK 117 D-3 and D-3m helicopters. The MCAI states a report of a crack on the affected part was detected after the crew reported an increased vibration of the helicopter. The MCAI defines the affected part as a rotor hub-shaft manufacturer part number D623M1501203 and D623M1501204.

The FAA is issuing this AD to address cracking of the rotor hub-shaft, which could lead to failure of the main rotor transmission and consequent loss of control of the helicopter.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2026-3867.

The FAA reviewed EASA Emergency AD 2026-0078-E, which specifies procedures for inspecting the rotor hub-shaft and depending on the results of the inspection, replacing any rotor hub-shaft that has cracks or suspicion of cracks, and reporting the results of the inspection to Airbus Helicopters. EASA Emergency AD 2026-0078-E also prohibits installing any affected rotor hub-shaft that has not passed an inspection on any helicopter.

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

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

This AD requires accomplishing the actions specified in EASA Emergency AD 2026-0078-E, described previously, as incorporated by reference, except for any differences identified as exceptions in the regulatory text of this AD. See “Differences Between this AD and the MCAI,” for a detailed description of the differences.

The MCAI applies to MBB-BK117 D-3m helicopters, whereas this AD does not because that model does not have an FAA type certificate.

In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some CAA ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, EASA Emergency AD 2026-0078-E is incorporated by reference in this AD. This AD requires compliance with EASA Emergency AD 2026-0078-E in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this AD. Using common terms that are the same as the heading of a particular section in EASA Emergency AD 2026-0078-E does not mean that operators need comply only with that section. For example, where EASA Emergency AD 2026-0078-E 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 Emergency AD 2026-0078-E. Material required by EASA Emergency AD 2026-0078-E for compliance will be available at regulations.gov under Docket No. FAA-2026-3867 after this AD is published.

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

An unsafe condition exists that required the immediate adoption of Emergency AD 2026-08-51, issued on April 16, 2026, to all known U.S. owners and operators of these helicopters. The FAA found that the risk to the flying public justified forgoing notice and comment prior to adoption of this rule because a number of helicopters that have the affected part installed require immediate action. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b).

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

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

The FAA considers that this AD is an interim action. If final action is later identified, the FAA might consider additional rulemaking.

The FAA estimates that this AD affects 78 helicopters of U.S. registry.

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

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

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

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska.

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 757-200 and -300 series airplanes. The NPRM was published in the Federal Register on September 8, 2025 (90 FR 43159). The NPRM was prompted by an operator report indicating that during a maintenance H-check inspection, a crack was found at the splice fitting between the original wing and the Aviation Partners Boeing (APB) modified lower wing skin panel, which is spliced at wing station (WS) 711 on a Boeing Company Model 757-200 airplane with the APB blended winglets installed in accordance with STC ST01518SE. APB reviewed the crack finding and determined the existing airworthiness limitations (AWL) structural significant items (SSI) 57-20-32B (which is required by AD 2020-01-18, Amendment 39-19824 ((85 FR 5304, January 30, 2020); corrected February 26, 2020 (85 FR 10969)) (AD 2020-01-18)) does not provide adequate probability of detection for foreseeable fatigue cracking of SSIs at WS 711. If cracks grow undetected, it may result in the inability of a principal structural element to sustain limit loads. The FAA determined that it is necessary to revise the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations for The Boeing Company Model 757-200 and -300 airplanes that have been modified in accordance with STC ST01518SE, with or without blended or scimitar blended winglets installed. In the NPRM, the FAA stated that incorporating the revision required by the proposed AD would terminate the requirements of paragraphs (g) and (h)(2) of AD 2020-01-18. In the NPRM, the FAA proposed to require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations. The FAA is issuing this AD to address fatigue cracking on the wing and winglet. This condition, if not addressed, could result in the inability of a principal structural element to sustain limit loads, which could adversely affect the structural integrity of the airplane.

The FAA received comments from three commenters, who supported the NPRM without change.

The FAA received an additional comment from Aviation Partners Boeing (APB). The following presents the comment received on the NPRM and the FAA's response to the comment.

APB requested that the FAA remove the fax number listed for APB contact information in the Material Incorporated by Reference section and paragraph (l)(3) of the proposed AD. APB stated that it no longer has an active fax machine.

The FAA agrees and has removed the fax number in the Material Incorporated by Reference section and paragraph (l)(3) of this AD accordingly.

The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed Aviation Partners Boeing AP57.2-0604.2 Supplement to D622N001-9 (Sep 2020) 757 Maintenance Planning Data (MPD) Document Section 9 Airworthiness Limitations (AWLs) and Certification Requirements (CMRs) Boeing 757-200 with Winglets FAA STC Number ST01518SE and EASA STC Number 10015659, Revision February 2022; and Aviation Partners Boeing AP57.3-0604.2 Supplement to D622N001-9 (Sep 2020) 757 Maintenance Planning Data (MPD) Document Section 9 Airworthiness Limitations (AWLs) and Certification Maintenance Requirements (CMRs) 757-300 with Blended Winglets FAA STC ST01518SE and EASA STC Number 10015659, Revision August 2022. This material specifies airworthiness limitations for structural inspections, structural safe life parts, systems, and certification maintenance requirements.

The FAA also reviewed Aviation Partners Boeing AP57.2-0604.2-DTR Supplement to D622N001-DTR (Oct 2018) 757 Damage Tolerance Rating (DTR) Check Form Document for Boeing 757-200 with Winglets FAA STC Number ST01518SE and EASA STC Number 10015659, Revision August 2023; and Aviation Partners Boeing AP57.3-0604.2-DTR Supplement to D622N001-DTR (Oct 2018) 757 Damage Tolerance Rating (DTR) Check Form Document for Boeing 757-300 with Blended Winglets FAA STC Number ST01518SE and EASA STC Number 10015659, Revision August 2023. This material provides the DTR check forms and the procedure for their use.

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.

The FAA estimates that this AD affects 156 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA has determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the FAA estimates the average total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

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

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain ATR—GIE Avions de Transport Régional Model ATR72 airplanes. The NPRM was published in the Federal Register on September 26, 2025 (90 FR 46362). The NPRM was prompted by AD 2025-0006, dated January 7, 2025 (EASA AD 2025-0006) (also referred to as the MCAI), issued by EASA, which is the Technical Agent for the Member States of the European Union. The MCAI states that new or more restrictive airworthiness limitations have been developed.

In the NPRM, the FAA proposed to require revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations, as specified in EASA AD 2025-0006. The FAA is issuing this AD to address the failure of air conditioning shut-off valves and consequent degradation of the efficiency of the fire procedure, which could lead to the relight and further propagation of the suppressed fire and subsequent reduced capability to contain a cargo compartment fire. The FAA is also issuing this AD to address rudder deflection not being limited at high airplane speed, which, if combined with a large rudder pedal input, could lead to the loss of control of the airplane.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2025-2554.

The FAA received comments from the Air Line Pilots Association, International (ALPA) who supported the NPRM without change.

The FAA received additional comments from the Citizens Rulemaking Alliance. The following presents the comments received on the NPRM and the FAA's response to each comment.

The Citizens Rulemaking Alliance requested that the FAA either provide its justification for finding good cause to bypass notice and comment procedures, convert this action to an NPRM, or stay the effective date until 30 days after close of a comment period of at least 45 days. The commenter asserted the FAA has not adequately justified use of the good cause exemption to bypass notice and comment and the 30-day delayed effective date.

The FAA notes the comment was submitted in response to an NPRM for which the FAA provided a 45-day comment period. This final rule is effective 35 days after its publication in the Federal Register . Therefore, no change to this AD is necessary.

The Citizens Rulemaking Alliance stated that the FAA's current practices for IBR frequently fail to meet the legal and regulatory standards for reasonable availability. The commenter called on the FAA to guarantee that all IBR materials are easily and freely accessible to the public and affected parties for both commenting and compliance purposes. The commenter also requested that this access be documented in the rulemaking record.

The FAA notes that this AD incorporates by reference EASA AD 2025-0006, not the manufacturer service information referenced in that EASA AD. The FAA posted EASA AD 2025-0006 to the AD docket when the NPRM was published in the Federal Register . The material referenced in EASA AD 2025-0006 may only be posted before the final rule's publication if it is already publicly available or if there is written consent from the owner of that material. Additionally, the FAA provided notice in the NPRM that the material referenced in EASA AD 2025-0006 will be available in the AD docket after this AD is published. Therefore, the FAA did not change this AD as a result of this comment.

The Citizens Rulemaking Alliance requested that the FAA revise the AD to comply with the PRA if reporting is required or remove any reporting provisions until PRA requirements are satisfied. If reporting is not required, the commenter requested the FAA clarify that in the AD.

The FAA notes this AD does not require reporting. If an AD were to require reporting, the preamble of the AD would include a paragraph titled “Paperwork Reduction Act” that would provide the applicable OMB control number, required PRA statements, and the estimated time to collect the required information (burden). Any costs associated with the reporting requirement would be included in the Costs of Compliance section in the preamble of the AD. Therefore, the FAA did not change this AD as a result of this comment.

The Citizens Rulemaking Alliance requested that the FAA either provide the factual basis for its Regulatory Flexibility Act (RFA) certification that the AD will not have a significant economic impact on a substantial number of small entities, or prepare an initial regulatory flexibility analysis.

The FAA provides the following clarification. The RFA of 1980 (5 U.S.C. 601-612), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) and the Small Business Jobs Act of 2010 (Pub. L. 111-240), requires Federal agencies to consider the effects of the regulatory action on small business and other small entities and to minimize any significant economic impact. The term “small entities” comprises small businesses and 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.

This AD will affect 6 domestic entities, of which 5 are small entities. The table below displays the industries of the small entities, their average annual revenue, and the AD's estimated cost burden relative to average annual revenue.

While FAA has determined that this final AD affects a substantial number of small entities, the compliance cost of the AD relative to each small entity's annual revenue is minimal. The FAA estimates the total cost per affected entity to be $7,650 (90 work-hours × $85 per work-hour), which is 0.189% of the average small entity's annual revenue. Therefore, as provided in section 605(b), the FAA certifies this AD will not result in a significant economic impact on a substantial number of small entities. The FAA did not change this AD as a result of this comment.

The Citizens Rulemaking Alliance requested that the FAA add to the AD docket the methodology and assumptions supporting the estimated cost of the proposed AD and reopen the comment period for public input on the additional cost information. The commenter stated that the FAA should also provide the fleet size, per airplane labor and parts cost, any assumed downtime or out-of-service impacts, aggregate costs, and any assumption that the manufacturer would provide parts free of charge.

In the Cost of Compliance section of the proposed AD, the FAA disclosed the number of airplanes affected on the U.S. registry, estimated number of work hours provided by the manufacturer, and the aggregate costs. The FAA did not disclose an estimated parts cost since this AD does not require any parts. Additionally, the FAA considered the impact that this AD will have on affected operators and determined this AD will not trigger any downtime costs because revising the existing maintenance or inspection program, as applicable, is an administrative action that can be performed without impacting operations. Since the FAA has assessed and disclosed the total known costs of the AD requirements in the Costs of Compliance section of the proposed AD, and the commenter did not provide additional cost data for the FAA to consider in its cost analysis, it is not necessary to reopen the comment period or provide additional information in the AD docket. The FAA did not change this AD as a result of this comment.

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 reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

EASA AD 2025-0006 specifies new or more restrictive airworthiness limitations for airplane structures as specified below:

• For Model ATR72-101, -102, -201, -202, -211, -212, and -212A airplanes: Operational tests of the rudder travel limiter unit.

• For Model ATR72-212 and ATR72-212A airplanes (that are POST MOD 4511): Operational test of air conditioning shut-off valves.

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.

The FAA estimates that this AD affects 32 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA has determined that revising the existing maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the FAA estimates the average total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2023-08-04, Amendment 39-22419 (88 FR 33823, May 25, 2023) (AD 2023-08-04). AD 2023-08-04 applied to certain The Boeing Company Model 787-8, 787-9, and 787-10 airplanes. The NPRM was published in the Federal Register on July 3, 2025 (90 FR 29512). The NPRM was prompted by reports of a loss of water pressure during flight and water leaks that affected multiple pieces of electronic equipment. In the NPRM, the FAA proposed to continue to retain the requirements of AD 2023-08-04 and require, for certain airplanes, a detailed inspection of all clamshell couplings for the presence and correct installation of safety straps at door 1 and door 3 lavatories and galleys with a potable water system and applicable on-condition actions, which would terminate the existing requirements. Additionally, Model 787-10 airplanes were included in the applicability of the NPRM to prevent the installation of affected parts on Model 787-10 airplanes as required by the Parts Installation Prohibition paragraph of this AD. The FAA is issuing this AD to prevent the unsafe condition, which, if not addressed, could lead to water leaks and water migration to critical flight equipment, which may affect the continued safe flight and landing of the airplane.

The FAA received comments from the Air Line Pilots Association, International (ALPA), and United Airlines who supported the NPRM without change.

The FAA received additional comments from Boeing, Turkish Airlines (THY), Kenya Airlines, an individual commenter, and The Foundation for Aviation Safety. The following presents the comments received on the NPRM and the FAA's response to each comment.

Boeing requested clarification on why Model 787-10 airplanes were included in the applicability of the proposed AD. Boeing stated that the Background section of the proposed AD includes Model 787-10 airplanes, although the applicability of Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 002, dated February 28, 2025, is limited to the Model 787-8 and 787-9 airplanes. Boeing noted that revising the Background section to explain that Model 787-10 airplanes were included because of the Parts Installation Prohibition paragraph would avoid confusion.

The FAA agrees to clarify. This AD retains the requirements of paragraph (g) of AD 2023-08-04, which incorporates by reference (IBR) Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022, which applies to Boeing Model 787-8, 787-9, and 787-10 airplanes. In addition, some Model 787-10 airplanes may not have been inspected as required by AD 2023-08-04; therefore, the Parts Installation Prohibition paragraph in this AD also applies to Model 787-10 airplanes. For these reasons, the Background section of this AD has been revised to clarify that Model 787-10 airplanes are included because of the Parts Installation Prohibition requirement of this AD.

Turkish Airlines requested the FAA revise the Parts Installation Prohibition paragraph in the proposed AD that prohibits installation of (P/N) 14C02-08C or P/N AS1655A08. Turkish Airlines explained that P/N AS1655A08 is listed in THY illustrated parts data (IPD) 38-10-01-10 as the specification number for P/N 14C02-08A, and therefore it would be applicable to all THY Model 787 airplanes.

The FAA agrees and has revised the Parts Installation Prohibition paragraph in this AD to identify these part numbers as “P/N 14C02-08C (AS1655C08)” and “P/N 14C02-08A (AS1655A08)”.

Turkish Airlines requested clarification on whether the replacement required by the Parts Installation Prohibition paragraph in the proposed AD would apply to its fleet, given that Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 002, dated February 28, 2025, is not applicable to Turkish Airlines. Turkish Airlines also requested clarification on whether it would be required to perform any actions specified in the Parts Installation Prohibition paragraph for airplanes that are not included in the Effectivity of Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 002, dated February 28, 2025.

The FAA provides the following clarification. The Parts Installation Prohibition paragraph does not describe an action; rather, it prohibits installation of affected part numbers in locations where they have been replaced with approved part numbers. The Parts Installation Prohibition paragraph applies to all airplanes identified in the Applicability paragraph of this AD. Therefore, the Parts Installation Prohibition paragraph of this AD applies to any Turkish Airlines airplanes included in the Applicability paragraph of this AD, even if those airplanes are not listed in the Effectivity of Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 002, dated February 28, 2025.

Kenya Airways requested the FAA include an additional paragraph in the NPRM to provide credit for the actions required by the New Required Actions paragraph if those actions were performed before the effective date of this AD using Boeing Alert Service Bulletin B787-81205-SB250299-00 RB, Issue 001, dated July 31, 2023. Kenya stated that it has accomplished Boeing Alert Service Bulletin B787-81205-SB250299-00 RB, Issue 001, dated July 31, 2023, on some of its airplanes, and therefore requested credit for those completed actions.

The FAA disagrees with the request. Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 001, dated July 31, 2023, omits certain inspection locations. As a result, Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 001, dated July 31, 2023, does not fully address the unsafe condition, and therefore cannot be credited. No changes have been made to this AD in this regard.

An individual commenter requested the FAA confirm the correct part number referenced as “P/N 14C33-08” in paragraph (m) of the proposed AD. The commenter noted that the listed part number is inconsistent with Boeing documentation and industry parts catalogs, which list “P/N 14C34-08C”. The commenter also requested clarification that the parts installation prohibition applies only to new installations and that properly installed units may remain in service until the next scheduled replacement. The commenter stated that paragraph (m) prohibits installation of P/N 14C02-08C and P/N AS1655A08 at affected locations but does not distinguish between existing and new installations.

The FAA provides the following clarification. The Parts Installation Prohibition paragraph in this AD has been revised as described previously. Both P/N 14C34-08C and P/N 14C33-08 are valid replacement parts; therefore, P/N 14C02-08C (AS1655C08) or P/N 14C02-08A (AS1655A08) may be replaced with either P/N 14C34-08C or P/N 14C33-08. Additionally, paragraph (m) of this AD specifies that the prohibited part numbers cannot be installed in locations where they have been replaced with valid part numbers, indicating that the parts installation prohibition only applies to new installations where the affected parts have already been replaced with P/N 14C34-08C or P/N 14C33-08.

An individual commenter requested the FAA define the term “inspection locations” as the clamshell coupling points at door 1 and door 3 lavatories and galleys and include a note or diagram to that effect. The commenter stated that the term was not defined in the regulatory text of the proposed AD and could be misconstrued to include all potable-water system fittings.

The FAA disagrees with the request. The inspection locations are defined in Table 5 of Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 002, dated February 28, 2025. Table 5 instructs operators to “Do a Detailed Inspection (DET) of all clamshell couplings at Door 1 and Door 3 lavatories and galleys with potable water system for a safety strap and that clamshell coupling with a safety strap is correctly installed.” Therefore, the inspection locations are already defined in the referenced service information. No changes have been made to this AD in this regard.

An individual commenter requested the FAA provide a consolidated compliance table within the regulatory text or as a standalone matrix in the proposed AD. The commenter stated that the proposed AD incorporated six separate service documents with distinct information that could be technically misinterpreted.

The FAA disagrees that the quantity of service documents referenced in this AD will lead to technical misinterpretation. The issue dates of each referenced service document are identified in this AD. The FAA has determined that the current structure of this AD provides the most accurate and enforceable method for identifying the required actions. No changes have been made to this AD in this regard.

The FAA received a comment from the Foundation for Aviation Safety asking how many additional water intrusion issues might occur as the airplane ages and what the FAA is doing to ensure that Boeing maintains manufacturing quality to prevent leaks. The Foundation for Aviation Safety also suggested that all affected airplanes be inspected and undergo leak detection testing rather than waiting for electrical or electronic failures.

The FAA acknowledges the commenter's concerns. However, the questions and suggestions provided are general in nature and are not specific to the unsafe condition addressed in this AD. Broader concerns regarding potential future water intrusion issues and fleetwide leak detection testing are outside the scope of this AD. Therefore, no changes have been made to this AD in this regard.

The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed Boeing Alert Requirements Bulletin B787-81205-SB250299-00 RB, Issue 002, dated February 28, 2025. This material specifies procedures for a detailed inspection for the presence and correct installation of safety straps at the clamshell couplings at door 1 and door 3 lavatories and galleys with a potable water system. The material also specifies applicable on-condition actions including correcting the installation of the safety strap, replacing any clamshell coupling that does not have a strap with a new clamshell coupling that has a safety strap, and performing a water leak test.

This AD also requires Boeing Alert Requirements Bulletin B787-81205-SB380021-00 RB, Issue 001, dated August 12, 2022, which the Director of the Federal Register approved for incorporation by reference as of June 29, 2023 (88 FR 33823, May 25, 2023).

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.

The FAA estimates that this AD affects 165 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates the following costs to do any on-condition actions that would be required based on the results of the inspections. The agency has no way of determining the number of aircraft that might need these actions:

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain De Havilland Aircraft of Canada Limited Model DHC-8-401 and -402 airplanes. The NPRM was published in the Federal Register on January 7, 2026 (91 FR 454). The NPRM was prompted by AD CF-2025-19, dated March 24, 2025 (Transport Canada AD CF-2025-19) (also referred to as the MCAI), issued by Transport Canada, which is the aviation authority for Canada. The MCAI states there have been reports of multiple instances of in-service cracking in the elevator PCU brackets (fittings) located on the horizontal stabilizer rear spar, as well as four cases of cracking on the elevator front spar. In one case, the cracking progressed to the point where the PCU bracket detached. An investigation determined that the common contributing factor in all cases was force-fight loads generated during elevator movement by the PCUs. Potential root causes identified include elevator system mis-rigging, improper clamping of PCU brackets due to insufficient shimming, and misalignment of the horizontal stabilizer and elevator hinges during assembly.

In the NPRM, the FAA proposed to require replacing bushings and installing new washers on the elevator PCU arm fitting assembly, installing doublers at the front spar of the elevator structure assembly, replacing horizontal stabilizer rear spar elevator PCU fittings, and applicable on-conditions actions, as specified in Transport Canada AD CF-2025-19. The FAA is issuing this AD to address cracks in the elevator PCU brackets (fittings) and the elevator front spar, which could result in failure of an elevator PCU bracket and lead to an elevator jam. The unsafe condition, if not addressed, could, if both elevators are affected, result in the loss of pitch control.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2025-5402.

The FAA received a comment from Air Line Pilots Association, International (ALPA) who supported the NPRM without change.

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 reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The accomplishment of certain actions required by this AD, as specified in Transport Canada AD CF-2025-19, terminates inspections required by Transport Canada AD CF-2024-10, dated March 1, 2024, which corresponds to FAA AD 2025-19-05, Amendment 39-23145 (90 FR 46340, September 26, 2025) (AD 2025-19-05). Paragraph (j) of AD 2025-19-05 provides the terminating action that corresponds to the terminating action specified in paragraph C of Part I and paragraph D of Part II of Transport Canada AD CF-2025-19.

Transport Canada AD CF-2025-19 specifies the following procedures:

• Replacing bushings and installing new washers on the elevator PCU arm fitting assembly, which includes inspecting bushing holes in the arm fitting assembly for corrosion, scoring, and structural degradation ( i.e., hole diameters are not within specified diameters).

• Installing doublers between ribs 12 and 13 and between ribs 13 and 14 at the front spar of the elevator structure assembly and applicable on-condition actions. The installation includes a detailed visual inspection of the elevator front spar caps and detailed inspection of the upper skin panel for damage ( i.e., cracking or corrosion), a bolt hole eddy current inspection for cracking at certain fastener holes, a high frequency eddy current for radial cracking at bend radius of certain rib lightening holes, and an inspection of the pressure sensitive lightening tape on certain lightening holes for missing or torn tape. On-condition actions include contacting the DHC technical helpdesk for an approved repair, contacting DHC technical helpdesk for support, and replacing pressure sensitive lightening tape with new tape.

• Replacing horizontal stabilizer rear spar elevator PCU fittings, which includes an eddy current inspection, if fittings are removed, for cracking at all mating holes on the spar web assembly and the lower skin.

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.

The FAA estimates that this AD affects 54 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA has received no definitive data on which to base the cost estimates for the on-condition actions specified in this AD.

The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some or all of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators.

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

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

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

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

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

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

This rule amends 14 CFR part 97 by establishing, amending, suspending, or removes SIAPS, Takeoff Minimums and/or ODPS. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms are 8260-3, 8260-4, 8260-5, 8260-15A, 8260-15B, when required by an entry on 8260-15A, and 8260-15C.

The large number of SIAPs, Takeoff Minimums and ODPs, their complex nature, and the need for a special format make publication in the Federal Register expensive and impractical. Further, pilots do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPS, Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure, and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPS, Takeoff Minimums and/or ODPs as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as amended in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flights safety relating directly to published aeronautical charts.

The circumstances that created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making some SIAPs effective in less than 30 days.

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

Accordingly, pursuant to the authority delegated to me, 14 CFR part 97 is amended by establishing, amending, suspending, or removing Standard Instrument Approach Procedures and/or Takeoff Minimums and Obstacle Departure Procedures effective at 0901 UTC on the dates specified, as follows:

This rule amends 14 CFR part 97 by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (NFDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, pilots do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained on FAA form documents is unnecessary. This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

The material incorporated by reference is publicly available as listed in the ADDRESSES section.

The material incorporated by reference describes SIAPs, Takeoff Minimums and ODPs as identified in the amendatory language for part 97 of this final rule.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP and Takeoff Minimums and ODP as modified by FDC permanent NOTAMs.

The SIAPs and Takeoff Minimums and ODPs, as modified by FDC permanent NOTAM, and contained in this amendment are based on criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts.

The circumstances that created the need for these SIAP and Takeoff Minimums and ODP amendments require making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), good cause exists for making these SIAPs effective in less than 30 days.

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

Accordingly, pursuant to the authority delegated to me, 14 CFR part 97 is amended by amending Standard Instrument Approach Procedures and Takeoff Minimums and ODPs, effective at 0901 UTC on the dates specified, as follows:

On January 6, 2025, HUD published the HOME Investment Partnerships Program: Program Updates and Streamlining final rule (HOME Final Rule) in the Federal Register , available at 90 FR 746. The HOME Final Rule incorporated a majority of the proposed regulatory changes described in the HOME Proposed Rule. The HOME Final Rule provided for the rule to take effect on February 5, 2025.

On January 20, 2025, the President issued a memorandum entitled “Regulatory Freeze Pending Review” (Regulatory Freeze Pending Review Memorandum) to executive departments and agencies. 1 The Regulatory Freeze Pending Review Memorandum, among other things, asks executive departments and agencies to consider postponing the effective date of rules that had been published in the Federal Register but had not yet taken effect. The postponement allowed executive departments and agencies time to review any questions of fact, law, and policy that the rules may raise.

On February 3, 2025, consistent with the Regulatory Freeze Pending Review Memorandum, HUD delayed the effective date of the HOME Final Rule from February 5, 2025, until April 20, 2025. 2 HUD's delay of the effective date of the HOME Final Rule until April 20, 2025, provided HUD with time to review the HOME Final Rule for any questions of fact, law, and policy that arose in the HOME Final Rule, as directed by the Regulatory Freeze Pending Review Memorandum.

On April 17, 2025, HUD published the HOME Investment Partnerships Program Updates and Streamlining—Delay of Effective Date, Withdrawal, and Correction (Delay of Effective Date for Certain Provisions of the HOME Final Rule Notice). 3 The Delay of Effective Date for Certain Provisions of the HOME Final Rule Notice further delayed the effective date for the HOME Final Rule's addition of 24 CFR 92.250(c) and revisions to 24 CFR 92.253 until October 30, 2025, while allowing a majority of the HOME Final Rule to go into effect as of April 20, 2025. The Delay of Effective Date for Certain Provisions of the HOME Final Rule Notice also made certain technical revisions to the effective and compliance dates in 24 CFR 92.3 of the HOME Final Rule. The effective date was further delayed to April 30, 2026 (90 FR 48443).

HUD now indefinitely delays the effective date for all provisions of the final rule not yet in effect. This includes the change to § 92.250 in 90 FR 16085 regarding green building standards and the change to § 92.253 in 90 FR 746 regarding tenant protections and selection. HUD is indefinitely delaying these amendments so it can take additional comment on these changes. HUD will, imminently, publish a proposed rule. In a final rule, after consideration of comments on the proposed rule, HUD will make a final determination on the these delayed provisions.

On October 6, 9, and 27, 2025, the MoDNR, on behalf of the State of Missouri, submitted a request for partial delegation of the RMP for facilities with an anhydrous ammonia storage capacity of ten thousand pounds or more that is intended to be used as fertilizer or in the manufacturing of a fertilizer (“agricultural anhydrous ammonia facilities”), as defined in state regulation at 10 Code of State Regulations (CSR) 10-6.255(2)(B). Included within this request for partial delegation are regulations under Missouri CSR Division 10 Air Conservation Commission, Chapter 6 Air Quality Standards, Definitions, Sampling and Reference Methods and Air Pollution Control Regulations for the Entire State of Missouri, section 255, Chemical Accident Prevention for Agricultural Anhydrous Ammonia (10 CSR 10-6.255), effective February 28, 2025.

The EPA proposed to approve Missouri's request for delegation of authority to implement and enforce a partial RMP for agricultural anhydrous ammonia facilities on February 26, 2026 (91 FR 9523). Specifically, the EPA proposed to approve the request as satisfying the relevant criteria of 40 CFR 63.91, 63.93, and 63.95, and therefore meeting the approval requirements of CAA section 112(l). In addition, the EPA proposed to approve, and to incorporate by reference into 40 CFR part 63, MoDNR regulation 10 CSR 10-6.255. These state regulations took effect on February 28, 2025.

The EPA accepted comments on this proposal from February 26, 2026, through March 30, 2026.

Section 112(l) of the CAA and 40 CFR part 63, subpart E, authorize the EPA to approve State rules and programs to be implemented and enforced in place of certain CAA requirements, including the RMP set forth at 40 CFR part 68.

The criteria that must be demonstrated by a State to receive approval of a program are set forth in section 112(l)(5) of the CAA and 40 CFR 63.91(a), and a State seeking approval of State rules implementing part 68 must also satisfy requirements under 40 CFR 63.95 to obtain delegation of a section 112 program.

When a State adopts federal rules with changes, as here, then the provisions of either 40 CFR 63.92 or 40 CFR 63.93 must also be met. The provisions for 40 CFR 63.92 are followed if the changes are pre-approved, and the provisions of 40 CFR 63.93 are followed if the changes do not qualify for approval under 40 CFR 63.92. See 40 CFR 63.91(a)(2) and (a)(4).

After a thorough review, as described in detail in our proposed approval of Missouri's partial delegation request, of the pertinent statutes and regulations, and public notice of the proposed delegation, Region 7 found that Missouri had satisfied the criteria in 40 CFR 63.91, 63.93 and 63.95 by demonstrating it has adequate and effective authorities, resources, and procedures in place for implementation and enforcement of agricultural anhydrous ammonia facilities subject to the RMP and that the State's two changes to the federal rule were no less stringent than the applicability criteria and program requirements of 40 CFR part 68.

As approved, Missouri has the primary authority and responsibility to carry out elements of the RMP for agricultural anhydrous ammonia facilities within the State, including on-site inspections, recordkeeping reviews, audits, compliance assistance and outreach, and enforcement. The EPA will retain the RMP for all other regulated chemicals that may be present at these facilities and any anhydrous ammonia that does not meet the definition of agricultural anhydrous ammonia. See 40 CFR 68.130. These responsibilities are outlined in a Memorandum of Understanding signed by the MoDNR and the EPA, which describes how the agencies plan to coordinate their program functions.

In instances where there is a conflict between a MoDNR interpretation and a Federal interpretation of applicable regulations in 40 CFR part 68, the Federal interpretation must be applied if it is more stringent than that of the MoDNR. The Administrator retains the specific authorities under 40 CFR 68.120 regarding the petition process for modifying the list of regulated substances identified in table 2 of 40 CFR 68.130. Although the MoDNR has primary authority and responsibility to implement and enforce the chemical accident prevention provisions for agricultural anhydrous ammonia, nothing shall preclude, limit, or interfere with the authority of the EPA to exercise its outreach and compliance assistance, enforcement, investigatory, and information gathering authorities concerning this part of the CAA.

We received four comments in support of the proposed approval of MoDNR's request for delegation. The comments are posted to the docket (EPA R07-OAR-2026-0497). We thank the commenters for their input and acknowledge their participation in the process. Since these comments are not adverse to the specific action with the EPA proposed, the EPA will not be responding further to these comments or making any changes to the proposed rulemaking.

The EPA is approving MoDNR's request for delegation of authority to implement and enforce a partial RMP for agricultural anhydrous ammonia facilities in Missouri as defined by 10 CSR 10-6.255(2)(C).

If the EPA determines that MoDNR's procedures for enforcing or implementing the 40 CFR part 68 requirements are inadequate, or are not being effectively carried out, this delegation may be revoked in whole or in part in accordance with the procedures set out in 40 CFR 63.96(b).

In this document, the EPA is finalizing regulatory text that includes incorporation by reference of MoDNR regulation 10 CSR 10-6.255, “Chemical Accident Prevention for Agricultural Anhydrous Ammonia” with an effective date of February 28, 2025, as discussed in section I. of this preamble. These regulatory provisions adopted the requirements of 40 CFR part 68 and specifically apply only to agricultural anhydrous ammonia facilities, as that term is defined in 10 CSR 10-6.255(2)(C). They require a stationary source facility that uses, stores, or sells agricultural anhydrous ammonia that meets the threshold quantity of 10,000 pounds to comply with the RMP provisions of 40 CFR part 68. The EPA has made, and will continue to make, these materials generally available through https://www.regulations.gov and at the EPA Region 7 Office (please contact the person identified in the FOR FURTHER INFORMATION CONTACT section of this preamble for more information). Therefore, these materials have been approved by the EPA for inclusion in 40 CFR part 63, have been incorporated by reference by the EPA in 40 CFR 63.14(n)(11), and are fully federally enforceable under sections 112 and 113 of the CAA as of the effective date of the final rule of the EPA's approval.

Under the CAA, the Regional Administrator has the authority to approve section 112(l) submissions that comply with the provisions of the CAA and applicable Federal regulations.

Thus, in reviewing delegation requests under 112(l), the EPA's role is to review and approve State program delegation requests, provided that they meet the criteria and objectives of the CAA and the EPA's implementing regulations. Accordingly, this proposed action merely approves the State's request and does not impose additional requirements beyond those imposed by State law. For that reason:

This action is not a significant regulatory action as defined in Executive Order 12866 (58 FR 51735, October 4, 1993) and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action is not an Executive Order 14192 regulatory action because this action is not significant under Executive Order 12866.

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

This action is certified as not having a significant economic impact on a substantial number of small entities under the RFA (5 U.S.C. 601 et seq. ). This action merely delegates to the local agency the authority to implement the already applicable requirements of the Federal Rule.

This action does not contain an unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538 and does not significantly or uniquely affect small governments.

This action does not have federalism implications as specified in Executive Order 13131 (64 FR 43255, August 10, 1999). It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This action does not have Tribal implications as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this action.

Executive Order 13045 directs federal agencies to include an evaluation of the health and safety effects of the planned regulation on children in federal health and safety standards and explain why the regulation is preferable to potentially effective and reasonably feasible alternatives. This action is not subject to Executive Order 13045 because it is not a significant regulatory action under section 3(f)(1) of Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action merely delegates to a State agency the authority to administer the already applicable RMP.

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

This rulemaking does not involve technical standards. This action merely delegates to a State agency the authority to administer the already applicable RMP.

In addition, this action is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian Tribe has demonstrated that a Tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal Governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 29, 2026. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

For the reasons stated in the preamble, EPA amends 40 CFR part 63 as set forth below:

Oil and gas leasing on Federal lands managed by the BLM is governed by the Mineral Leasing Act of 1920 (MLA), 30 U.S.C. 181 et seq., and other pertinent statutes. See 43 CFR 3100.3. Section 226 of the MLA sets out the general provisions governing oil and gas leasing on Federal lands. Before 2022, section 226(b)(1)(A) prescribed the royalty rate for oil and gas leases to be set at a “rate of not less than 12.5 percent.” In 2022, Congress passed the Inflation Reduction Act (IRA), Public Law 117-169 (136 Stat. 2056). Section 50262(a) of the IRA amended section 226(b)(1)(A) to require the royalty rate to be changed to 16 2/3 percent. In 2024, the BLM issued the final rule, “Fluid Mineral Leases and Leasing Process” (89 FR 30916, June 22, 2024), which implemented the provisions of the IRA. Some of those changes are contained in 43 CFR subpart 3103—Fees, Rents and Royalties. That subpart sets out the general fees, rents and royalty amounts and requirements for oil and gas leases. The regulations in 43 CFR 3103.31 specify the royalty rates applicable to both newly issued oil and gas leases, as well as those that may be reinstated under applicable law and regulations.

Section 50101(a)(1) of the OBBB repealed section 50262(a) of the IRA, stating that any provision of law amended or repealed by that subsection is restored or revived as if that subsection had not been enacted into law. Based on the language in the OBBB, the applicable royalty provision in the MLA is once again set at an amount of not less than 12.5 percent. The BLM is issuing this DFR to return the royalty rate required for production from Federal oil and gas leases issued after the enactment of the OBBB to “not less than 12.5 percent” or “minimum of 12.5 percent.” Issuance of this DFR will avoid any confusion on the part of the regulated community as to the royalty rate for production from Federal oil and gas leases.

The BLM has determined that 43 CFR 3103.31(a) must be revised to reflect the correct royalty rate applicable to production from Federal oil and gas leases issued after the enactment of the OBBB such that this section will now include a statement that the royalty is not less than 12.5 percent. The regulations at 43 CFR 3103.31(a)(2) and (3) are removed in their entirety as these paragraphs included royalty rates that are no longer applicable. The regulations at 43 CFR 3103.31(a)(4) will be redesignated to § 3103.31(a)(2) and all references to 16.67 percent will be removed and replaced with 12.5 percent to reflect the royalty rate required by the OBBB. A new 43 CFR 3103.31(a)(3) is added to address the royalty rate for non-competitive leases, which were reinstituted by the OBBB with this royalty rate. The existing 43 CFR 3103.31(a)(5) will be redesignated to become paragraph (a)(4) and will be revised to conform to the requirements of the OBBB to address the royalty rate for reinstated leases.

The BLM has determined that enactment of the OBBB, independently and alone, justifies the revisions to 43 CFR 3103.31(a)(1) through (5). The BLM has no interest in maintaining a regulation that is inconsistent with more recent controlling legislation and that could lead to confusion if left in place.

This regulatory change does not amend existing oil and gas leases with royalty rates that are higher than 12.5 percent. The BLM is taking action outside of this rulemaking to implement this royalty rate change for new leases going forward.

The BLM is issuing this rule as a DFR. Although the Administrative Procedure Act (APA, 5 U.S.C. 551 through 559) generally requires agencies to engage in notice and comment rulemaking, section 553 of the APA provides an exception when the agency “for good cause finds” that notice and comment are “impracticable, unnecessary, or contrary to the public interest.” Id. 553(b)(B). The BLM has determined that notice and comment are unnecessary because the revisions reflected in this rule implement requirements for which the agency has no discretion; and is unlikely to receive any significant adverse comments given the statutory mandate in the OBBB. Significant adverse comments are those that oppose the revision of the rule and raise, alone or in combination, (1) Reasons why the revision of the rule is inappropriate, including challenges to the revision's underlying premise; or (2) Serious unintended consequences of the revision. A comment recommending an addition to the rule will not be considered significant and adverse unless the comment explains how this DFR would be ineffective without the addition.

This rule does not result in a taking of private property or otherwise have regulatory takings implications under E.O. 12630. The rule revises provisions that no longer reflect existing statutory authority and removes and replaces obsolete regulatory provisions, as required by the OBBB. The rule will not result in private property being taken for public use without just compensation. A takings implication assessment is not required.

E.O. 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB) will review all significant rules. OIRA has determined that this rule is significant.

The incremental or decremental change in royalties are changes in revenue to the U.S. Government, State governments, and funds, and they are costs or cost savings to operators of new onshore Federal oil and gas leases. As such, they are transfer payments that do not affect the total resources available to society. An important, but sometimes difficult, problem in cost estimation is to distinguish between real costs and transfer payments. While transfers should not be included in the estimates of the benefits and costs of a regulation, they may be important for describing the distributional effects of a regulation.

Overall, economic theory suggests that the quantity of Federal oil or gas produced may increase due to the new OBBB provisions compared to the IRA provisions, which increased production costs.

E.O. 13563 reaffirms the principles of E.O. 12866, while calling for improvements in the Nation's regulatory system to promote predictability, reduce uncertainty, and use the best, most innovative, and least burdensome tools for achieving regulatory ends. E.O. 13563 directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that agencies must base regulations on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. The Department developed this rule in a manner consistent with these requirements.

This DFR complies with the requirements of E.O. 12988. Among other things, this rule:

(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation;

(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

Under the criteria of section 1 of E.O. 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. A federalism summary impact statement is not required.

The Department of the Interior strives to strengthen its government-to-government relationship with Indian tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. The Department evaluated this DFR under E.O. 13175 and the Department's consultation policies and determined that it has no substantial direct effects on Federally recognized Indian tribes and that consultation under the Department's Tribal consultation policies is not required. The rule merely revises the Federal regulations to remove obsolete regulatory language.

This DFR is not a significant energy action as defined in E.O. 13211. Therefore, a Statement of Energy Effects is not required.

This DFR does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under NEPA (42 U.S.C. 4321 et seq. ) is not required because this rule is covered by a categorical exclusion applicable to regulatory functions “that are of an administrative, financial, legal, technical, or procedural nature.” 43 CFR 46.210(i). In addition, the BLM has determined that this rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

This rule does not impose any new information collection burden under the Paperwork Reduction Act. OMB previously approved the information collection activities contained in the existing regulations and assigned OMB control number 1004-0185. This rule does not impose an information collection burden because the Department is not making any changes to the information collection requirements.

The Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612) requires an agency to prepare a regulatory flexibility analysis for all rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA applies only to rules for which an agency is required to first publish a proposed rule. See 5 U.S.C. 603(a) and 604(a). As the BLM is not required to publish a notice of proposed rulemaking for this DFR, the RFA does not apply.

This rule is not a major rule under the Congressional Review Act, 5 U.S.C. 804(2). Specifically, the DFR: (a) Will not have an annual effect on the economy of $100 million or more; (b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector, of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments, or the private sector. The rule merely revises the Federal regulations to remove an obsolete provision in compliance with the OBBB. Therefore, a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

For the reasons stated in the preamble, the Bureau of Land Management amends 43 CFR part 3100 as follows:

NMFS manages the Cook Inlet EEZ Area according to the Fishery Management Plan for Salmon Fisheries in the EEZ off Alaska (Salmon FMP). The intended effect of this action is to conserve and manage the salmon resources in the Cook Inlet EEZ Area in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing fishing by U.S. vessels in accordance with the Salmon FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

In accordance with 50 CFR 679.118(c)(1)(ii), the Regional Administrator, Alaska Region, NMFS (Regional Administrator) has determined it is necessary to close Chinook salmon recreational fishing for conservation and management purposes and is therefore prohibiting recreational fishing for Chinook salmon in the Cook Inlet EEZ Area. In making this determination, the Regional Administrator has considered the following factors: the low proposed 2026 Chinook salmon acceptable biological catch (ABC) in the Cook Inlet EEZ Area (proposed ABC of 261 Chinook salmon; 91 FR 20085, April 15, 2026), which is based on the assessment of Chinook salmon in NMFS's 2026 SAFE report, found at https://www.fisheries.noaa.gov/alaska/commercial-fishing/cook-inlet-exclusive-economic-zone-salmon-stock-assessment-and-fishery; anticipated harvest rates, expected mortality, and the potential number of participants in the commercial and recreational fisheries in the Cook Inlet EEZ Area; and the State of Alaska's 2026 prediction of run sizes. Newly released 2026 Chinook salmon forecasts from the Alaska Department of Fish and Game (ADF&G) predict very low run sizes for Chinook salmon stocks in Cook Inlet, which is likely to negatively impact the achievement of spawning escapement targets and returns during future years. The ADF&G Chinook salmon forecasts can be found at https://www.adfg.alaska.gov/sf/EONR/index.cfm?ADFG=region.NR&Year=2026&NRID=3989. As such, ADF&G has issued a closure of recreational fishing in State marine waters of Upper Cook Inlet effective May 1, 2026 through August 15, 2026, found at https://www.adfg.alaska.gov/sf/EONR/index.cfm?ADFG=region.NR&Year=2026&NRID=3976. This action parallels the closure in State marine waters and prohibits recreational fishing for Chinook salmon in the Cook Inlet EEZ Area May 1, 2026 through August 15, 2026.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is authorized by 50 CFR 679.118(c)(1)(ii), which was issued pursuant to section 304(c) of the Magnuson-Stevens Act, and is necessary to carry out the Salmon FMP. This action is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action. Notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent information regarding the status of Cook Inlet Chinook salmon stocks in a timely fashion and would delay the closure of recreational fishing for Chinook salmon in the Cook Inlet EEZ Area. A delay of this closure could result in recreational harvest of Chinook salmon that is not supported by current stock levels, which would prevent the conservation and management objectives for the Cook Inlet EEZ Area salmon fishery. NMFS developed this action as quickly as possible based on the relevant information on stock levels for Chinook salmon, primarily NMFS's finalization of the SAFE report that informs NMFS's proposed 2026 ABC for Chinook salmon (91 FR 20085, April 15, 2026) and the State's release of 2026 Chinook salmon forecasts for Cook Inlet.

There is good cause under 5 U.S.C. 553(d)(3) to establish an effective date less than 30 days after date of publication. This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.