Upon request, FDA (the Agency or we) has classified the device to detect and identify microorganism nucleic acids and resistance markers from patients with suspected orthopedic infection into class II (special controls), which we have determined will provide a reasonable assurance of safety and effectiveness of the device. In addition, we believe this action will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens by placing the device into a lower device class than the automatic class III assignment.

The automatic assignment of class III occurs by operation of law and without any action by FDA, regardless of the level of risk posed by the new device. Any device that was not in commercial distribution before May 28, 1976, is automatically classified into, and remains within, class III and requires premarket approval unless and until FDA takes an action to classify or reclassify the device (21 U.S.C. 360c(f)(1)). We refer to these devices as “postamendments devices” because they were not in commercial distribution prior to the date of enactment of the Medical Device Amendments of 1976, which amended the Federal Food, Drug, and Cosmetic Act (FD&C Act).

FDA may take a variety of actions in appropriate circumstances to classify or reclassify a device into class I or II. We may issue an order finding a new device to be substantially equivalent under section 513(i) of the FD&C Act (21 U.S.C. 360c(i)) to a predicate device that does not require premarket approval. We determine whether a new device is substantially equivalent to a predicate device by means of the procedures for premarket notification under section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807).

FDA may also classify a device through “De Novo” classification, a common name for the process authorized under section 513(f)(2) of the FD&C Act (see also part 860, subpart D (21 CFR part 860, subpart D)). Section 207 of the Food and Drug Administration Modernization Act of 1997 (Pub. L. 105-115) established the first procedure for De Novo classification. Section 607 of the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144) modified the De Novo classification process by adding a second procedure. A device sponsor may utilize either procedure for De Novo classification.

Under the first procedure, the person submits a premarket notification (510(k)) for a device that has not previously been classified. After receiving an order from FDA classifying the device into class III under section 513(f)(1) of the FD&C Act, the person then requests a classification under section 513(f)(2).

Under the second procedure, rather than first submitting a 510(k) and then a request for classification, if the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence, that person requests a classification under section 513(f)(2) of the FD&C Act.

Under either procedure for De Novo classification, FDA is required to classify the device by written order within 120 days. The classification will be according to the criteria under section 513(a)(1) of the FD&C Act. Although the device was automatically placed within class III, the De Novo classification is considered to be the initial classification of the device.

We believe this De Novo classification will enhance patients' access to beneficial innovation, in part by reducing regulatory burdens. When FDA classifies a device into class I or II via the De Novo process, the device can serve as a predicate for future devices of that type, including for 510(k)s (see section 513(f)(2)(B)(i) of the FD&C Act). As a result, other device sponsors do not have to submit a De Novo request or premarket approval application to market a substantially equivalent device (see section 513(i) of the FD&C Act, defining “substantial equivalence”). Instead, sponsors can use the less burdensome 510(k) process, when necessary, to market their device.

On October 27, 2020, FDA received BioFire Diagnostics, LLC's request for De Novo classification of the BioFire Joint Infection (JI) Panel. FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act.

The Coast Guard will enforce a safety zone for the Delaware River, Philadelphia, PA, from 8:15 p.m. to 8:30 p.m. on May 12, 2026. This action is necessary to ensure safety of life on the navigable waters of the United States immediately prior to, during, and immediately after fireworks displays. Our regulation for safety zones of fireworks displays within the USCG East District, table 1 to paragraph (h)(1) to 33 CFR 165.506, entry 10 specifies the location of the regulated area as all waters of the Delaware River adjacent to Penn's Landing, Philadelphia, PA, within a 500-feet radius of the fireworks barge position. On May 12, 2026, the approximate position will be 39°56′30.39″ N, 75°8′17.55″ W. During the enforcement period, as reflected in § 165.506(d), vessels may not enter, remain in, or transit through the safety zone unless authorized by the Captain of the Port or designated Coast Guard patrol personnel on-scene.

In addition to this notification of enforcement in the Federal Register , the Coast Guard plans to provide notification of this enforcement period via the Local Notice to Mariners, marine information broadcasts, and Broadcast Notice to Mariners.

The Coast Guard received notification that SOF Week demonstrations will be occurring in Seddon Channel, in the vicinity of the Tampa Convention Center, Tampa, FL. Hazards from these demonstrations include high speed airborne and waterborne activities. The Captain of the Port (COTP) St. Petersburg has determined that potential hazards associated with these demonstrations are a safety concern for anyone within the event area. Therefore, the COTP is issuing this rule under the authority in 46 U.S.C. 70034, which is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone.

Because of these potential hazards, the Coast Guard is issuing this rule without prior notice and comment. As is authorized by 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest. Additionally, the Coast Guard was notified of this event too late in the planning process to engage in the public comment process, but we must establish this safety zone by May 18, 2026, to protect personnel, vessels, and the marine environment. Therefore, we do not have enough time to solicit and respond to comments.

The Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register because delaying the effective date of this rule would risk the safety of the public and marine environment, so it would be contrary to the public interest.

This rule establishes a safety zone daily from 8 a.m. to 5 p.m. on May 18, 2026, through May 22, 2026. The safety zone will cover all navigable waters in the Seddon Channel within the following points: Point 1 at 27°56′14″ N, 082°27′25″ W, thence to Point 2 at 27°56′15″ N, 082°27′19″ W; thence to Point 3 at 27°56′22″ N, 082°27′16″ W, thence to Point 4 at 27°56′25″ N, 082°27′17″ W; thence to Point 5 at 27°56′30″ N, 082°27′29″ W, thence to Point 6 at 27°56′29″ N, 082°27′33″ W, thence to Point 7 at 27°56′25″ N, 082°27′35″ W, thence to Point 8 at 27°56′23″ N, 082°27′33″ W, thence returning to Point 1. Vessels and persons will not be allowed to enter the zone during this time, unless authorized by the Captain of the Port.

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

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

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

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

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

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

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

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

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

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

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

The Bureau of Land Management (BLM) is issuing this final rule to fully rescind the Conservation and Landscape Health Rule (2024 Rule), which amended 43 CFR part 1600 and established 43 CFR part 6100. This action restores balance to federal land management under the Federal Land Policy and Management Act of 1976 (FLPMA) by reaffirming the principles of multiple use and sustained yield, ensuring conservation does not restrict productive use of the public lands, and reducing regulatory burdens that impede efficient decision-making.

The 2024 Rule introduced unnecessary complexity and placed operational constraints on the BLM's planning and permitting processes. It also inappropriately elevated conservation as a discrete “use” of the public lands, contrary to FLPMA's intent and statutory framework. By rescinding the 2024 Rule, the BLM eliminates mechanisms—such as restoration and mitigation leasing—that threatened to restrict productive use of the public lands and introduced uncertainty and unnecessary burdens in planning and permitting. Existing authorities and tools remain sufficient to address conservation objectives without imposing prescriptive mandates or rigid timelines on public land users and the BLM itself. Repeal of the 2024 Rule will, therefore, improve the BLM's management of the public lands by restoring the more efficient processes in place prior to that Rule's promulgation and removing any thumb on the scale in favor of conservation at the expense of productive use and development of the public lands and their many important resources.

This final rule restores the regulations that govern Areas of Critical Environmental Concern (ACEC), 43 CFR 1610.7-2, to the framework in place since 1983, ensuring ACEC designations remain site-specific, based on appropriate relevance and importance criteria, and integrated into land use planning decisions. The rule also eliminates provisions that would allow third parties to obtain leases for restoration or mitigation on public lands. Such leases are not necessary for the BLM to achieve its conservation objectives through its own affirmative land management and go beyond what the BLM may legally grant under FLPMA, which only allows the BLM to grant third parties authorization to “use, occup[y], and develop[ ]” the public lands (43 U.S.C. 1732(b)). Additionally, the rule rescinds provisions governing Land Health Standards (LHS), which imposed procedural burdens and timing requirements that disrupted established processes. The BLM will continue to apply LHS under existing grazing regulations and may consider future refinements to that framework through separate rulemaking.

In preparing this final rule, the BLM has reviewed, evaluated, and responded to substantive comments received during the public comment period. The BLM received 138,161 comment letter submissions, including 129,029 duplicative form letter submissions and 9,132 unique submissions. Commenters expressed both support for and opposition to rescinding the 2024 Rule. Many of the public comments supported the BLM's proposal and provided their views as to how the 2024 Rule was overly restrictive, economically harmful, and inconsistent with FLPMA. The BLM generally agrees with these comments and finds that they support the decision in this final rule to make no changes relative to the proposed rule.

Many other comments, meanwhile, opposed rescission on the theory that the 2024 Rule could help the BLM to address conservation, ecosystem protection, impacts of permitted activities, and tribal engagement. These opponents were concerned that rescission of the 2024 Rule might reduce protections for cultural, biological, and recreational resources, and suggested the rescission could impact the BLM's ability to proactively reduce risks that the comments associated with climate change, such as catastrophic wildfire and flooding events.

In addition to expressing views about the problems with or value of the 2024 Rule overall, many comments also opined on the value of rescinding particular provisions. With respect to the 2024 Rule's ACEC regulations, many commenters saw them as regulatory overreach and expressed concern that provisions for temporary management and the presumption in favor of designation, among other aspects of the 2024 Rule, would lead the BLM to make overly broad ACEC designations that would incidentally—or even intentionally—crowd out productive uses of the public lands. Opponents of the proposed rule, meanwhile, cast the ACEC provisions as necessary updates to improve designation processes.

The proposal to eliminate the 2024 Rule's restoration and mitigation leasing provisions drew mixed reactions as well. Supporters of the proposal to rescind pointed out that the 2024 Rule lacked clarity, was built on a faulty understanding of the scope of the BLM's leasing authority under FLPMA, and could preclude other, productive land uses. Opponents of rescission highlighted potential benefits the leases could have with respect to proactive conservation and climate resilience.

Those who supported rescission noted that the 2024 Rule's land health provisions would lead to delays and place a heavy burden on BLM staff for any and all management actions the Bureau might take. Opponents of rescission argued that those provisions and the associated monitoring requirements should be retained on the theory that they promote transparency and responsible land management. More detailed responses to representative substantive comments are provided in section III of this preamble.

After consideration of the substantive comments, the BLM finds that full rescission of the 2024 Rule aligns the BLM's regulations with statutory requirements and national energy policy, avoids unnecessary litigation risk, and supports efficient, transparent management of public lands. This deregulatory action does not alter the BLM's authority under FLPMA to take management actions to conserve public lands and resources, as appropriate. The BLM will continue to responsibly manage under principles of multiple use and sustained yield while using existing tools to provide for resource conservation, as appropriate, notwithstanding the rescission of the 2024 Rule effected by this final rule.

The BLM manages approximately 245 million acres of public lands, roughly one-tenth of the land area of the United States, primarily under FLPMA, as amended (43 U.S.C. 1701 et seq. ). FLPMA requires that, unless “public land has been dedicated to specific uses according to any other provisions of law,” the Secretary, through the BLM, must manage the “use, occupancy, and development” of the public lands under principles of multiple use and sustained yield, in accordance with applicable land use plans, and to serve present and future generations (43 U.S.C. 1732(a)). “Multiple use” refers to balancing varied uses, including recreation, range, timber, mineral development, and use of other natural scenic, scientific, and historical values. “Sustained yield” refers to managing public lands and resources in perpetuity to achieve a high-level annual or regular periodic output of the various renewable resources of the public lands, consistent with multiple use. 1 In addition, FLPMA directs the BLM to take actions necessary to prevent unnecessary or undue degradation of the lands (43 U.S.C. 1732(b)). FLPMA provides the BLM with the authority and direction to ensure public lands and other resources and values are managed “to sustain the health, diversity, and productivity of public lands for the use and enjoyment of present and future generations” (blm.gov; see also 43 U.S.C. 1702(c)).

In 2024, the BLM promulgated the Conservation and Landscape Health Rule, which was codified in amendments to 43 CFR part 1600 and the newly created 43 CFR part 6100 (89 FR 40308 (May 9, 2024) (hereinafter, 2024 Rule)). 2 The 2024 Rule purported to establish a “policy for the BLM to build and maintain the resilience of ecosystems on public lands.” (89 FR 40308). The BLM has determined, however, based on a review of the Conservation and Landscape Health Rule, and after consideration of public comments received in response to the proposed rescission of the rule, that the 2024 Rule is unnecessary to achieve that goal and is, in fact, harmful to the BLM's efforts to efficiently manage the public lands under applicable law. The BLM has determined through its review that the 2024 Rule vested too much discretion in individual authorizing officers to preclude productive uses of the public lands ( e.g., grazing, mining, and energy development) as incompatible with the goals of conservation that were promoted in the 2024 Rule. Among other things, the 2024 Rule identified conservation as a permissible third-party use of the public lands that could be authorized through leases issued under FLPMA. This is contrary to the BLM's mandate and statutory authority. It is not appropriate, or logical, to treat conservation as a “use” under FLPMA. Under a more appropriate interpretation and implementation of FLPMA's mandate, the BLM works to responsibly conserve resources to ensure balanced development while also achieving long-term productivity of those resources, in all cases consistent with the principles of multiple use and sustained yield. This may be achieved through land management efforts, including in partnership with other entities, but it does not follow that FLPMA's leasing authority allows for conservation ( i.e., mitigation and restoration) as a “use.” By rescinding the regulations promulgated by the 2024 Rule across 43 CFR parts 1600 and 6100, the BLM will avoid these unnecessary burdens to decision-making and management of public lands.

The rescission of the 2024 Rule will restore the regulations governing ACECs at 43 CFR 1610.7-2 to those that the BLM had been following for ACEC designation and management since 1983. That prior framework provides a clear, legally sound process for identifying and managing ACECs through land use planning, consistent with FLPMA. The restored regulations ensure that ACEC designations remain site-specific and are based on relevant criteria. By rescinding the provisions adopted in 2024, the BLM is removing ACEC procedures that introduced complexity and uncertainty into the planning process, including by allowing for interim management of nominated areas even before that planning process can be completed.

Rescission of the 2024 Rule also eliminates burdensome requirements that the BLM consider certain values ( e.g., “intact landscapes”) in planning and document a justification for implementation-level decisions that would have potential impacts to those values. The BLM should, and already does, consider and account for the full range of issues and values when engaged in the planning process and for the impacts of permitting authorized land uses and other implementation-level management decisions. To provide by rule additional requirements to do so risked incentivizing strategic litigation challenging the BLM's planning and permitting decisions that could hamper the implementation of those decisions.

As noted above, the repeal of the restoration and mitigation leasing provisions at 43 CFR 6102.4 and 6102.4.1 will prevent the prioritization of conservation activities that could exclude other, productive uses. The BLM has the tools, information, and processes necessary to manage the public lands without inviting third parties to seek land use authorizations for the conservation activities traditionally performed by the Bureau.

Finally, the provisions of the 2024 Rule governing the development and implementation of LHS imposed rigid timelines and procedural requirements that disrupt established planning processes and create administrative burdens, interfering with efficient land management. The preexisting regulatory framework for LHS, which appears in the grazing regulations, provides sufficient authority to address land health concerns while allowing flexibility to apply standards in other contexts without imposing prescriptive mandates. Moreover, the BLM may consider future refinements to its approach to LHS through a separate rulemaking.

For those reasons, and the reasons discussed in more detail below and in the preamble to the proposed rule (see SUPPLEMENTARY INFORMATION section in Federal Register publication [90 FR 43990] dated September 11, 2025), the BLM is promulgating this final rule to fully rescind all aspects of the 2024 Rule. In preparing this final rule, the BLM has reviewed, evaluated, and provided responses to substantive comments received in response to the proposed rule during the public comment period. A summary overview of public comments and the agency's responses thereto follows.

On September 11, 2025, the BLM published a notice in the Federal Register proposing to rescind the 2024 Rule and initiating a 60-day public comment period on that proposed rule. The public comment period ended on November 10, 2025. During this comment period, the BLM received 138,161 comment letter submissions, including 129,029 duplicative form letter submissions and 9,132 unique submissions. Comments of general support or opposition to the proposed rescission of the 2024 Rule that did not elaborate on specific reasoning for support or opposition, and comments addressing topics outside the scope of the 2024 Rule and elements of the proposed rescission were deemed non-substantive. The BLM analyzed and is responding to those comments that provided new information, identified potential errors, requested clarifications, or offered specific suggestions and rationale applicable to the proposed rescission. A general synopsis of those comments is provided below, followed by detailed summaries of, and responses to, comments addressing the proposed rescission of the 2024 Rule's provisions pertaining to ACECs, restoration and mitigation leasing, LHS, and monitoring, as well as comments that discussed economic considerations and the statutory authorities relevant to rescission of the 2024 Rule.

Among the many comments, commenters indicated both support for and opposition to rescinding the 2024 Rule. Those supporting rescission viewed the 2024 Rule as overly restrictive and harmful to economic interests, while those opposed to rescission took the position that the 2024 Rule was important for conservation, ecosystem protection, and tribal involvement.

Those who supported rescission pointed to the 2024 Rule's many procedural requirements, noting that such requirements slow down land management decision-making on the front end and introduce litigation risk on the back end. Supporters of rescission also expressed concerns about provisions of the 2024 Rule, including the ACEC and leasing provisions, that could be used to prioritize conservation above other, productive uses of the public lands, contrary to the direction in FLPMA generally to manage those lands under principles of multiple use and sustained yield.

Opponents of rescission, meanwhile, highlighted risks to tribal, historic, cultural, biological, recreational, water, and air resources, as well as increased wildfire threats and climate impacts, suggesting that rescission of the 2024 Rule could amount to removal of protections for these resources.

Comments specific to the ACEC provisions reflected these contrasting views. Comments that supported the proposed rescission noted that the 2024 ACEC provisions amounted to unnecessary regulatory overreach and argued, in particular, that the temporary management provisions and presumption in favor of designation would result in an increase in the number and geographic scope of ACEC designations and other actions to preclude productive use of the public lands, going far beyond what Congress intended in FLPMA's ACEC provisions. Opponents of rescission viewed the 2024 ACEC regulations as necessary updates to address issues with the ACEC designation process, including with respect to timing, public comment periods, temporary management, and impacts on tribal and cultural interests.

The 2024 Rule's restoration and mitigation leasing mechanisms received similarly mixed feedback. Many commenters criticized the 2024 Rule's leasing provisions' lack of clarity, questioned their statutory basis, and raised concerns about their potential to restrict other land uses. Opponents of rescission emphasized their view that the leasing provisions carried the potential to benefit proactive conservation, increase climate resilience, and leverage collaborative restoration efforts. Some commenters offered suggestions for amending, rather than wholly rescinding, the leasing provisions.

Commenters who favored rescission noted that the 2024 Rule's land health provisions introduced significant management burdens to all BLM decision-making processes and, as such, were likely to cause delays and increase litigation risk. Opponents of rescission, meanwhile, expressed support for the rule's LHS and monitoring requirements, arguing for their potential to promote ecosystem resilience and transparency.

Commenters also discussed the economic effects of the 2024 Rule and its impacts on local governments, small businesses, and rural economies, raising concerns, in support of the BLM's proposal to rescind the rule, about revenue losses from reductions in grazing and mineral development and impacts on recreation and tourism that the 2024 Rule would likely cause. Comments also proffered views on the benefits of rescission for economic growth and regulatory certainty. Opponents of rescission, meanwhile, suggested potential economic advantages could flow from maintaining the 2024 Rule by supporting recreation, restoration economies, and ecosystem services.

Commenters debated the rule's consistency, both legally and as a matter of policy, with FLPMA and other applicable laws, regulations, and executive orders. Some viewed the 2024 Rule as lawful (and necessary), while others expressed concerns, similar to the concerns that the BLM expressed in its preamble to the proposed rule to rescind the 2024 Rule, that the 2024 Rule was inconsistent with the BLM's statutory authority. Additional detail on the nature and context of these comments, and the BLM's responses to them, is provided below.

The BLM received numerous comments responding to the BLM's proposal to restore the ACEC regulations at 43 CFR 1610.7-2 to the form they took prior to promulgation of the 2024 Rule. With the proposed rule, the BLM solicited comments as to whether those legacy ACEC regulations should be restored verbatim, as proposed, or revised to allow for more efficient and flexible management of ACECs as part of managing the public lands under principles of multiple use and sustained yield. After reviewing the public comments received on the proposed rule, the BLM here in the final rule is restoring the ACEC regulations to their prior form under which the BLM had, until just recently, managed ACEC designations since 1983.

The BLM received comments against the verbatim reinstatement of the legacy ACEC regulations. Many of these comments raised concerns that the reinstatement of a 60-day comment period for ACECs would reintroduce burdensome steps to the planning process. Commenters noted that these public comment periods often hinder the BLM's ability to meet required National Environmental Policy Act (NEPA) deadlines and that they find these periods inefficient and a hindrance to streamlining the designation and de-designation process. Other comments that opposed reinstatement of the legacy regulations suggested that there were flaws in the ACEC regulations that predated the 2024 Rule. Commenters discussed the importance of using ACEC designations to aid in the protection of ecologically, culturally, and scientifically significant landscapes, consistent with the direction in FLPMA to prioritize such designation, while still safeguarding access to and development of public lands.

The BLM received comments opposing the proposed rule and supporting retention of, or further revisions to, the version of the ACEC regulations promulgated by the 2024 Rule. These commenters argued that the existing version or appropriate further revisions to it would provide greater clarity on ACEC designation and management than would the 1983 version of the regulations and would, thereby, increase efficiency. Commenters noted the benefit that comes from giving regulatory clarity to FLPMA's requirement that special management attention be required to protect and prevent irreparable damage before the BLM may designate an ACEC. Commenters suggested that these measures are lawful, necessary, and consistent with FLPMA's multiple-use and sustained-yield principles, while they also ensure public participation and transparency. Other comments noted the benefit of having an explicit regulation to address ACEC boundaries such as is included in the 2024 Rule but suggested different language to ensure that ACEC designations are narrowly tailored to small, well-defined areas while also allowing compatible uses to continue.

The BLM also received comments supporting the BLM's proposal to reinstate the legacy ACEC regulations verbatim. Many commenters raised concerns that the 2024 Rule represented regulatory overreach and set designation procedures contrary to law. For example, commenters suggested that the inclusion of a “presumption” in favor of designation and the procedures for temporary management for nominated ACECs, without first undergoing planning, are not grounded in FLPMA's provision for designation of ACECs through the land use planning process. Commenters further asserted that the 2024 Rule distorts the original intent of ACEC designations, which are meant to be site-specific and based on rigorous criteria for relevance, importance, and the need for special management and expressed concern that the expansion of ACEC regulations under the 2024 Rule could allow for large-scale designations that preclude management for other uses without sufficient justification or procedural protections. Similarly, comments that supported rescission argued that restricting a State Director's discretion to remove an ACEC designation was inappropriate, considering that FLPMA contains no such restriction. Commenters indicated that the 2024 Rule made it more difficult to remove an ACEC designation, even when designation is no longer justified. These commenters indicated that, based on these many concerns, the 2024 ACEC provisions would likely restrict productive use of public lands.

After reviewing public comments, the BLM is, as part of this deregulatory effort, restoring the ACEC regulations to the text that has guided the BLM's management of ACECs since 1983. Commenters identified concerns with the regulations promulgated by the 2024 Rule, particularly those provisions that commenters interpreted to create a presumption in favor of designation and a higher bar for de-designation and that authorized the BLM to impose restrictions in the form of “temporary management.” At the same time these and other commenters also raised concerns about returning to the regulatory language previously in place, including concerns about the reimposition of redundant notice provisions and the old regulations' silence on setting ACEC boundaries. Ultimately, those concerns are outweighed by the concerns around the 2024 Rule.

While some of the concerns associated with the 2024 Rule might have been addressed through further revisions, rather than a return to the pre-2024 regulations, the BLM has determined that reestablishing those older regulations verbatim is preferable at this stage. The BLM is best positioned to navigate gaps in the framework or concerns about its operation in the context of regulations with which it is familiar from decades of implementation. Nevertheless, although the BLM is restoring the ACEC regulations verbatim to their prior form with this final rule, the BLM is giving further consideration to those comments that indicated support for further refinement of the ACEC regulations as part of broader initiatives underway to reduce burdensome regulations and barriers to efficient management of public lands. The BLM may, in a separate process, pursue further rulemaking to address the ACEC regulations in a manner that could address some of the issues raised.

Many comments supported the proposal to rescind the restoration and mitigation leasing provisions contained in the 2024 Rule. Some commenters warned that the leasing provisions could create a market-based system for monetizing conservation outcomes, allowing well-funded entities to obtain quasi-exclusive control of public lands and, as a result, encourage speculative behavior.

Commenters also argued that the restoration and mitigation leasing provisions of the 2024 Rule were unnecessary because the BLM already has effective mitigation tools and longstanding partnerships capable of supporting landscape-scale conservation efforts. They expressed concern that the leases, then, were duplicative, confusing, and potentially disruptive to existing conservation efforts and those long-standing partnerships in that they could create inequities between landscape-scale and site-specific conservation efforts. Several commenters said the 2024 Rule's leasing framework lacked transparency and clarity, particularly with respect to the definition, allocation, and implementation of mitigation credits associated with the mitigation leases for which the 2024 Rule provided. Commenters also raised concerns that restoration and mitigation leases could encourage passive management, a particular concern in arid ecosystems where active stewardship is needed to control wildfire risk, invasive species spread, and habitat decline. These commenters felt that the leasing framework did not provide adequate detail to address and adapt to these potential consequences.

Finally, and most fundamentally, commenters reiterated concerns that the BLM has heard all throughout the process of first promulgating and now considering rescission of the 2024 Rule that the leasing provisions set up a framework for excluding productive uses—grazing, mineral development, recreation, etc.—of the public lands as incompatible with a lease for restoration of those same lands, including a lease for passive restoration. Such exclusion, the commenters correctly point out, runs contrary to the letter and spirit of FLPMA's direction, in general, to manage the public lands under principles of multiple use and sustained yield.

Other commenters supported the 2024 Rule's leasing provisions, and opposed their rescission, taking the position that they provided a predictable and accountable framework for addressing environmental degradation and improving ecosystem resilience. Opponents of rescission argued that the leasing provisions could provide benefits for climate adaptation, habitat connectivity, watershed health, and collaborative conservation. They viewed the leasing program as a flexible tool that could complement other uses and attract private investment in restoration. Many commenters offered recommendations for amending—rather than rescinding—the leasing provisions, including revisions to expand eligibility for state and local governments, incorporate climate resilience, require active management and adaptive management, and clarify standards for judging compatibility of restoration and mitigation leases with other land uses, along with other suggestions for adjusting lease terms and valuation methods. Several commenters highlighted the need for clear coordination mechanisms among the BLM, state agencies, tribes, local governments, and private partners. They recommended formal collaboration structures, standardized evaluation processes, and clearer guidance on how restoration and mitigation leases could interact with existing uses and rights. Finally, some commenters expressed concern that removal of the program would reduce accountability for mitigating development impacts and weaken proactive land management.

Ultimately, the BLM finds that the 2024 Rule's leasing provisions are not required to implement FLPMA and exceed the Bureau's statutory authority by elevating conservation as a discrete “use” for those leases. (For additional discussion of the latter point, see below under “Statutory Authority.”) While the BLM recognizes the importance of conservation for responsible management of public lands, existing authorities—including land use planning under 43 CFR part 1600, project-level NEPA review, and longstanding partnership programs—already provide sufficient tools to address environmental impacts, promote restoration, and prevent unnecessary or undue degradation without the additional regulatory structure created by the 2024 Rule. Because the agency determined that the 2024 framework is unnecessary—not to mention inconsistent with FLPMA—suggestions to revise or refine the leasing program do not warrant further consideration in this rulemaking. Moreover, the many and disparate suggestions for further revisions to the 2024 Rule illustrate the concerns with the Rule as written but without identifying a clear solution short of full rescission. The BLM will continue to coordinate and collaborate with partners to responsibly manage for and balance multiple use and sustained yield and will look for opportunities to strengthen existing conservation tools, improve coordination with partners, and enhance restoration outcomes.

Many comments discussed the 2024 Rule's provisions governing the development and implementation of LHS and the proposal to rescind them. Several comments raised concerns about the feasibility and potential harms of implementing LHS broadly, including the possibility of delays in issuing land use authorizations, redundant requirements for grazing permittees, and challenges in applying LHS beyond the grazing context to which they were limited prior to the 2024 Rule. Other commenters advocated for retaining the land health regulations in some form, underscoring the value of monitoring ecological indicators tailored to track specific resource trends that vary across major ecosystem types. Still others suggested that the 10-year interval for land health evaluations, introduced by the 2024 Rule, should be either shorter or longer, with different commenters taking opposing views. Commenters also expressed support for the provisions of the 2024 Rule that make land health evaluations available to the public; apply LHS to evaluate the effectiveness of restoration projects; and require the consideration of potential impacts on land health as part of management decisions.

Upon consideration of the many comments related to the 2024 Rule's LHS provisions, the BLM maintains that those provisions created additional, counterproductive burdens and challenges to accomplishing the agency's mission and concludes that the existing LHS regulatory framework, in place prior to the 2024 Rule as part of the grazing regulations, offers sufficient ability to address land health without the additional complexity introduced by the 2024 Rule. For example, as commenters noted in support of rescission, the 2024 Rule includes provisions that often require the BLM to act on a fixed or rapid timetable. Such timing provisions hamstring the Bureau by displacing its usual processes to meet the deadline. Even with a full recission of the 2024 Rule, the Bureau can still choose to apply specific LHS (developed under the grazing rule provisions) when developing and considering management actions and their alternatives outside the grazing context. But doing so would no longer be required by regulation in those circumstances where it does not make sense. Finally, although the BLM is promulgating a full rescission of the 2024 Rule, including the LHS provisions therein, it is considering, as part of a separate rulemaking effort, whether to further refine its approach to the development and application of LHS. The BLM will consider salient points raised in comments on this rulemaking as part of that separate effort.

Commenters suggested there was value in the 2024 Rule's provisions for standardized data collection and reporting in that they contributed to enhancing land and water planning and management, while also promoting transparency and informed decision-making through annual reporting and public access to land health data. Commenters also asked how rescission of the 2024 Rule would affect the BLM's monitoring and evaluation practices, including watershed condition assessments, land health evaluations, and restoration monitoring, and whether rescission would limit the BLM's ability to use data collected by state, local, or partner agencies.

The concerns expressed in those comments are misplaced in that the rescission of the 2024 Rule is not likely to adversely affect the bureau's management and monitoring functions. Indeed, the BLM anticipates that rescission of the rule will aid the bureau by providing greater flexibility to tailor its monitoring program appropriately and dynamically. The BLM continues to implement resource monitoring through the Assessment, Inventory, and Monitoring (AIM) program, which provides a robust, systematic framework for tracking resource conditions over time. AIM data support watershed condition assessments and other analyses regardless of whether the 2024 Rule is in place. The rescission of the 2024 Rule does not prevent the BLM from standardizing data collection and reporting, nor does it restrict the BLM's use of data collected by state or local agencies or alter existing cooperative data-sharing practices. The BLM remains committed to incorporating the best available data from all sources to support informed decision-making and avoid unnecessary duplication of monitoring efforts. The BLM recognizes the benefits of standardized annual reporting of land health data for decision-making and may address that issue in a separate rulemaking effort.

Some commenters expressed concern that rescinding the 2024 Rule could create uncertainty with respect to cleanup, mitigation, and site restoration obligations for lands leased for extractive uses. These comments, too, posit harms that are unlikely to result from rescission of the 2024 Rule. The 2024 Rule did not alter existing requirements for cleanup, mitigation, or site restoration. Under current regulations, and without reference to the 2024 Rule, permittees and lessees engaged in extractive uses are accountable for avoiding and minimizing impacts and for reclaiming disturbed areas in accordance with applicable Conditions of Approval and lease stipulations. The BLM continues to be responsible for monitoring operator compliance with those requirements, and rescission of the 2024 Rule does not change that responsibility.

The BLM considered numerous comments that addressed the economic impact of particular provisions of the 2024 Rule and, by extension, the proposal to rescind them. Those comments contained a range of views regarding the potential economic impacts of the proposed rule to rescind the 2024 Rule, with arguments both that it would lead to economic benefits and that it would lead to economic costs.

Commenters identified potential costs and benefits of restoring the ACEC regulations at 43 CFR 1610.7-2 to the form they took prior to promulgation of the 2024 Rule. Some commenters stated that removing provisions allowing for temporary management of areas nominated to be ACECs would limit negative impacts to extractive uses or adjacent landowners while designation is being considered. Other comments expressed concerns that there would be fewer ACEC designations leading to degradation of natural, cultural, and scenic resources.

The BLM evaluated the potential positive and negative aspects of restoring the ACEC regulations at 43 CFR 1610.7-2 to the form they took prior to promulgation of the 2024 Rule, as described in the economic analysis of the rule. That analysis is revised and improved based in part on public comments received on the proposed rule. While the BLM is restoring the ACEC regulations verbatim to their prior form with this final rule, the BLM is giving further consideration to the comments received regarding the ACEC regulations as part of the broader initiatives underway to reduce burdensome regulation and barriers to efficient management of public lands. The BLM may pursue further rulemaking with respect to ACECs that could address some of the issues raised.

The BLM received many comments both for and against the proposed rule on the basis that removing the emphasis on landscape intactness and restoration in planning will impact industry, communities, and ecosystem services. Some comments asserted that rescission of the 2024 Rule will lead to economic expansion by prioritizing industry over conservation. Other comments stated that the change will lead to economic contraction for communities dependent on outdoor recreation economies, which are, in turn, dependent on healthy landscapes. Some comments stated that the rule change will result in losses from a reduction in ecosystem services.

Some commenters claimed that the BLM's initial economic analysis of the proposed rule did not fully account for the foregone benefits of the 2024 Rule. Those commenters criticized the BLM for dismissing these impacts as merely qualitative, arguing that established nonmarket valuation methods could and should be used to quantify these costs. They cited research purporting to validate the high economic value of public lands for activities like hiking and wildlife viewing, which generate substantial consumer surplus.

OMB has determined that the final rule is significant under section 3(f) of E.O. 12866. The BLM has complied with the requirements of E.O. 12866 by preparing an economic analysis.. Consistent with Circular A-4, where benefits and costs are difficult to quantify, qualitative discussion of the issues and evidence may be presented. Contrary to comments suggesting otherwise, providing a qualitative analysis is not the same as assuming nonmarket benefits are zero. The BLM recognizes the validity and applicability of nonmarket valuation methods. However, applying these methods requires an estimate of a change in resource use or similar metric. This regulatory change does not change management decisions and does not have any direct on-the-ground impacts. This rule does not prohibit or require particular future land management decisions. Any positive or negative impacts would only result from future land management decisions that are not constrained by this regulatory change. It is not possible to predict the future change in resource use that might result from the complex set of future land management decisions.

For example, changes in consumer surplus associated with recreation derive either from a change in the number of trips or the quality of each trip. The final rule does not expand or restrict recreation on public lands. By rescinding the relevant provisions of the 2024 Rule, it may affect future planning and implementation decisions that, in turn, affect recreation access. The net effect of those future decisions, and how they might change due to this regulatory change, however, is unknowable. It is possible that the final rule may create a process in which a future recreation or restoration activity is denied while it otherwise would have been approved. It is equally possible that a different decision, in a different location, may allow recreation activity where it may otherwise have been denied. This dynamic can be seen across the breadth of the public comments received, some of which expressed concerns that rescinding the 2024 Rule would reduce future recreation activity while others emphasized the repeal was necessary to ensure future recreation activity.

Comments claim that rescission will affect small entities including small business, governments, and not-for-profit organizations in various positive and negative ways by changing the mix of uses authorized on public lands. Some commenters expressed concern that the 2024 Rule would significantly harm small businesses in the mineral extraction, recreation, and ranching sectors—including by restricting those uses in favor of restoration and mitigation leases—and that rescission of the 2024 Rule would alleviate those harms. Other commenters expressed concern that rescinding the 2024 Rule would negatively impact small tourism and recreation businesses by prioritizing extractive uses.

Again, this regulatory change does not change management decisions and does not have any direct on-the-ground impacts. Any positive or negative impacts on small entities would result from future land management decisions which are not constrained by this regulatory change. The net result of how those future decisions might change due to the current regulatory change is highly uncertain. To help further explain this, the BLM notes that regulatory updates can influence how public lands are managed by clarifying procedures, streamlining reviews, or adjusting how types of uses may be considered. These changes can shape the range of possibilities for future land use, but they do not directly result in new projects or developments. Actual land-use decisions depend on many factors beyond the rulemaking process, including market demand, the cost of development, technical feasibility, and public involvement. In many cases, these factors are more influential than the regulations themselves in determining what ultimately happens on the ground. Therefore, while a regulatory change might make certain types of uses easier to propose and evaluate, it does not guarantee that those uses will occur. The BLM agrees that the Initial Regulatory Flexibility Analysis did not sufficiently consider the impacts on small government jurisdictions. This has been added to the Threshold Analysis of the Final Rule. Specifically, the analysis now identifies how future land management decisions could impact the mix of industry within a jurisdictional area leading to changes in small government tax bases. Any changes would result from future management decisions and not directly from this rulemaking effort.

Finally, outfitters and guides commented that subpart 6103's streamlining and tiering elements of the current rule (Baseline) provide a useful regulatory framework to guide the BLM's decisions on their special recreation permits. The BLM acknowledges this feature of the current rule and has added related information and discussion to the Threshold Analysis of the Final Rule. The BLM recognizes the potential positive benefit of the provisions cited in comments by outfitters and guides and is considering whether to promulgate similar provisions through a separate rulemaking effort.

Many comments discussed the relationship between the 2024 Rule, the proposed rule to rescind the 2024 Rule, and the BLM's rulemaking authority under FLPMA. Some commenters argued that the BLM lacked statutory authority to promulgate the 2024 Rule, or elements of it, at least, or that the 2024 Rule was otherwise unlawful. Others took the position that the 2024 Rule was within the BLM's authority to promulgate. As an initial matter, even if the 2024 Rule were promulgated consistent with the BLM's authority, there is no suggestion that FLPMA obliges maintenance of that rule now in the face of the sound policy reasons for rescission, discussed elsewhere in this preamble and in the preamble to the proposed rule. For example, direction in FLPMA to give priority to the designation of ACECs does not require that the BLM maintain regulations pertaining to the designation of ACECs in any particular form, particularly where, as here, the BLM has judged the 2024 Rule's ACEC provisions to place unneeded burdens on the designation process.

As for suggestions that the 2024 Rule exceeded the BLM's authority, not all of the arguments advanced by the public comments on the proposed rule have merit. However, as noted in the preamble to the proposed rule, the BLM remains concerned that the 2024 Rule inappropriately treats conservation as a use alongside other, productive uses of the public lands. From that misconception of the role of conservation in the BLM's management of the public lands under FLPMA, the 2024 Rule allowed for restoration and mitigation leases that cannot be squared with the BLM's authority under Title III of FLPMA to authorize third parties to “use, occup[y], and develop[]” the public lands. 43 U.S.C. 1732(b). This is not to say that conservation is not a legitimate objective of the BLM, but it does not follow that FLPMA's leasing authority may be used to that end.

Some comments took specific issue with the proposal to rescind the 2024 Rule's definition of “unnecessary or undue degradation,” as part of rescinding the 2024 Rule in its entirety. Although these commenters are correct to point out that FLPMA obliges the BLM to “take any action necessary to prevent unnecessary or undue degradation of the lands,” 43 U.S.C. 1732(b), that statutory obligation is not changed at all by the rescission of the 2024 Rule, just as it applied to the BLM without regulatory definition of the term “unnecessary or undue degradation” (outside of the limited case of the hard rock mining regulations) for all the years between enactment of FLPMA and the 2024 Rule. Ultimately, rescinding the 2024 Rule's definition of “unnecessary or undue degradation” is appropriate because the definition applied only within Part 6100, which is itself being wholly repealed.

Commenters invoked a number of Executive and Secretary's Orders to argue both in favor of and against the proposal to rescind the 2024 Rule. Commenters have not identified any violation or other legal inconsistency between this rule and any Executive or Secretary's Order. To the extent those commenters have suggested that this rule would be inconsistent with the policy direction underlying any particular Executive or Secretary's Order, the BLM disagrees. The BLM can and will continue to implement direction it receives from the President and from the Secretary of the Interior when managing the public lands. It is not necessary to maintain the overly burdensome regulations promulgated by the 2024 Rule to do so. The BLM agrees, meanwhile, with commenters who pointed out consistency between the proposal to rescind the 2024 Rule and the policy underlying, for example, Executive Orders 14154, Unleashing American Energy, 14156, Declaring a National Energy Emergency, and 14261, Reinvigorating America's Beautiful Clean Coal Industry and Amending Executive Order 14241, and Secretary's Orders 3417, Addressing the National Energy Emergency, 3418, Unleashing American Energy, and 3421, Achieving Prosperity through Deregulation. The direction provided in those Executive and Secretary's Orders further supports the BLM's rationale for rescinding the 2024 Rule.

The Secretary of the Interior certifies that this final rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996; 5 U.S.C. 601 et seq. ). The Final Rule eliminates regulations that directed the BLM's processes and, thus, is procedural and legal in character. It does not directly regulate industry or other small entities. Other than one-time costs associated with reading and adjusting to the Final Rule ( i.e., rule familiarization), the changes will not impose direct costs or generate direct benefits for any small entities. These regulatory updates may influence future land management decisions by clarifying procedures, streamlining reviews, or adjusting how types of uses may be considered. These changes can shape the range of possibilities for future land use, but they do not directly result in new projects or developments. Actual land-use decisions depend on many factors beyond regulatory requirements.

To the extent the Final Rule leads to changes in future land use decisions that affect the mix of authorized activity in the future, there may be indirect impacts of the regulatory change on some small entities. For example, if the Final Rule leads to future land management decisions that, in aggregate, increase opportunities for grazing, natural resource extraction, and energy development relative to what would otherwise occur, small entities in these sectors may benefit. Conversely, if the Final Rule reduces opportunities for environmental consulting, restoration, or remediation, small businesses in these sectors may be negatively affected. Further, fees associated with restoration and mitigation leases are transfer payments from lease holders, potentially including small businesses, to the federal government that would no longer occur under the Final Rule. Any effects on businesses that stem from the Final Rule, may impact small governments by increasing or decreasing sources of tax revenue.

The BLM identified a range of industries that might be affected by the Final Rule, including those involved in ranching, resource extraction, energy production, restoration, and recreation, as well as environmental organizations. Using the size standards developed by the Small Business Administration, the BLM estimated the number of small businesses in each industry and the net cost that would be necessary to result in a significant impact on a substantial number of small entities. For this calculation, the BLM defined a significant impact as one greater than 3% of annual receipts, and a substantial number as 20% or greater of all small entities operating in a particular sector. The BLM is not able to quantify benefits or costs that might result indirectly if the Final Rule leads to different future management decisions. However, the BLM does not expect the net effects of future land management decisions on small entities to exceed the estimated thresholds.

There are no compliance costs for small entities other than potential rule familiarization costs. If the rule change takes two hours to read and understand at an hourly wage of $45 per hour, it would inflict a cost of $90 per business. However, since this rulemaking is a rescission of a previously new section of regulations, some industries will see this as a return to the known status quo and therefore will not incur a familiarization cost ( e.g., grazing and extractive industries). To the extent that additional impacts occur, the Final Rule is expected to indirectly benefit Ranching, Natural Resource Extraction, Energy Production, and Energy Transmission businesses operating on BLM-managed lands. Recreation industries may feel mixed indirect effects depending on whether the relevant recreation activity would increase or decrease following subsequent land use decisions. The Final Rule is not expected to change the demand for Restoration and Remediation services, but rather shift that demand to work on non-BLM-managed lands. Small governments may be indirectly positively or negatively impacted if the Final Rule results in changes to the mix of industries comprising their local tax bases. Small Environmental Organizations with the goal of conducting conservation on BLM-managed land my face less certainty regarding funding and their ability to conduct conservation on BLM-managed land after removal of the restoration and mitigation leasing provisions.

Further, the BLM solicited comments from potentially affected small entities, and received 164 comments that discussed impacts to small entities, including small governments (70 comments) and small businesses (94 comments). These comments did not provide any additional information indicating impacts would exceed these thresholds. As such, the BLM is not required to prepare a Final Regulatory Flexibility Analysis with this Final Rule. Further description of the number of small entities potentially impacted by this deregulatory action and the size of any impact is provided in the document titled, “ Economic Analysis for Final Rule: Rescinding Conservation and Landscape Health Rule, ” which is part of the eRulemaking docket.

The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) generally provides that an agency may not conduct or sponsor, and not withstanding any other provision of law a person is not required to respond to, a collection of information, unless it displays a currently valid Office of Management and Budget (OMB) control number. The information collection requirements contained in Part 6100 are approved by OMB under OMB Control Number 1004-0218.

The final rule would eliminate all the information collection requirements that were previously approved under that OMB Control Number. The eliminated information collection requirements are listed below, along with the resulting information collection burden reductions:

• Restoration and Mitigation Leasing/Restoration or Mitigation Development Plan—43 CFR 6102.4(a)(6) and (7);

• Restoration and Mitigation Leasing/Additional Information 43 CFR 6102.4(a)(8);

• Restoration and Mitigation Leasing/Monitoring Plan—43 CFR 6102.4(a)(9);

• Restoration and Mitigation Leasing/Annual Report—43 CFR 6102.4(a)(9);

• Termination and Suspension of Restoration and Mitigation Leases/written request to resume or suspended activity—43 CFR 6102.4.1(d)(3);

• Bonding for Restoration and Mitigation Leases—43 CFR 6102.4.2(a);

• Mitigation/Approval third parties as mitigation fund holders—43 CFR 6102.5.1(e); and

• Mitigation/Approval third parties as mitigation fund holders/Annual Fiscal Reports—43 CFR 6102.5.1(e).

The BLM submitted a request to OMB to discontinue OMB Control Number 1004-0218. The rescission of these regulations, along with the information collection requirements contained therein and the discontinuance of OMB Control Number 1004-0218 reduces public information collection burdens by 63 annual responses and 1,459 annual burden hours.

The rescission rule, like the 2024 Rule, is within the category of actions described in the categorical exclusion that appears in the Department of the Interior's (Department's) NEPA regulations at 43 CFR 46.210(i). The rule is legal, procedural, and administrative in nature in that it defines the procedures (here, by removing them) that the Bureau will follow in the course of conducting its land management activities. As such, the rule has no direct environmental effects. Any indirect environmental effects that the rule may have are “too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case.” 43 CFR 46.210(i). Therefore, the categorical exclusion applies to this rulemaking. A copy of the final CE is available at https://www.regulations.gov/docket/BLM-2025-0001.

Section 6(a) of E.O. 12866 requires agencies to submit “significant regulatory actions” to the Office of Information and Regulatory Affairs (OIRA) for review. This regulatory action is a “significant regulatory action” under section 3(f) of E.O. 12866. Accordingly, this action was submitted to OIRA for review under E.O. 12866.

The BLM is required to conduct an economic analysis in accordance with section 6(a)(3)(B) of E.O. 12866. More can be found in the document titled, “ Economic Analysis for Final Rule: Rescinding Conservation and Landscape Health Rule ,” which is part of the eRulemaking docket.

The BLM has examined this final rulemaking and has determined that it is consistent with the policies and directives outlined in E.O. 14154, Unleashing American Energy, and E.O. 14192, Unleashing Prosperity Through Deregulation. This final rule is an E.O. 14192 deregulatory action.

The BLM has determined that it is not obliged by Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, or Department or Bureau policy to conduct tribal consultation in advance of promulgating this final rule.

The rescission rule will not have “tribal implications”; that is, it will not “have substantial direct effects on one or more Indian tribes.” E.O. 13175, §§ 1(a), 5(b). That is because the rule eliminates regulations that had set agency procedures but does not dictate any outcome for future land management decisions. Rather, any effects on tribes will occur, if at all, only as a result of separate planning and implementation decisions. Though those decisions may pertain to the subject matter of this final rule, the BLM's discretion to make such future decisions will be guided by the scope of its statutory authority, which is neither restricted nor expanded by the rescission of the 2024 Rule.

It is true, as commenters pointed out in the public comment process, that the wholesale rescission of the 2024 Rule includes rescission of the provisions of that rule that related to engagement with tribes and the rescission of the definition, for purposes of 43 CFR part 6100, of the term Indigenous Knowledge. But the rescission of those elements merely reflects the fact that the regulations establishing the processes to which those provisions attached are themselves being rescinded. It does not imply any change to Bureau policy or the BLM's commitment to consult with tribes and to consider and include Indigenous Knowledge in the course of land management under other law and policies that continue to apply, undisturbed by the rescission of the 2024 Rule. Any future land management decisions that are made once the 2024 Rule is no longer in place will be subject to those policies, including to the extent that they call for consultation with tribes.

Though no substantial direct effects on one or more Indian Tribes are expected under this rule, pursuant to E.O. 13175 and Department policy, Federally Recognized Indian Tribes have the ability to request consultation on future planning and implementation decisions related to the subject matter of this rule.

Under E.O. 13211, agencies are required to prepare and submit a Statement of Energy Effects to the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, for those matters identified as significant energy actions. This is to include a detailed statement of “any adverse effects on energy supply, distribution, or use (including a shortfall in supply, price increases, and increased use of foreign supplies) should the proposal be implemented” and “reasonable alternatives to the action with adverse energy effects and the expected effects of such alternatives on energy supply, distribution, and use.”

Section 4(b) of E.O. 13211 defines a “significant energy action” as “any action by an agency (normally published in the Federal Register ) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1)(i) that is a significant regulatory action under E.O. 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by OIRA as a significant energy action.”

This final rule is expected to not have a significant effect on the Nation's energy supply.

Accordingly, for the reasons set out in the preamble, the Bureau of Land Management amends 43 CFR parts 1600 and 6100 as set forth below:

This final rule is being issued under the authority granted to the Secretary of Health and Human Services by the Child Care and Development Block Grant (CCDBG) Act of 1990, as amended (42 U.S.C. 9857, et seq. ), and section 418 of the Social Security Act (42 U.S.C. 618).

The CCDBG Act, hereafter referred to as the “Act” (42 U.S.C. 9857 et seq. ), together with section 418 of the Social Security Act (42 U.S.C. 618), authorize the Child Care and Development Fund (CCDF), which is the primary federal funding source dedicated to supporting working families with low incomes to afford child care and to increase the quality of child care for all children. CCDF funds child care services in the 50 States, the District of Columbia, 5 Territories, and 264 Tribal organizations. Federal Fiscal year (FFY) 2026 enacted CCDF funding is $12.381 billion awarded by formula to States, Territories, and Tribes. CCDF child care subsidies, primarily administered through vouchers, help working families with low incomes access child care that best meets their needs. In FFY 2023, the most recent year for which data is available, CCDF provided subsidies to more than 1.6 million children from 994,000 families each month. 1 CCDF also promotes the quality of child care for all children in care by requiring CCDF Lead Agencies to spend at least 12 percent of their CCDF funding each year on activities to improve child care quality. In FFY 2022, States spent $2.9 billion on activities to improve the quality of child care and an additional $477 million on improving the quality and supply of infant and toddler care. 2

Congress last reauthorized the CCDBG Act in 2014 (Pub. L. 113-186), and HHS published regulations implementing the new provisions of the Act in September 2016 (81 FR 67438). The 2016 regulations built on the priorities Congress included in the 2014 reauthorization. In July 2023, HHS proposed changes to a limited number of provisions in the CCDF regulations (88 FR 45022). The changes were codified in a final rule published by HHS in March 2024 (89 FR 15366).

Since publication of the March 2024 final rule, 55 of 56 States and Territories have requested and received two-year transitional and legislative waivers because they all needed additional time to implement at least one of the new requirements. Several States and Territories have shared with HHS that some of the requirements added in the March 2024 final rule are more costly and difficult to implement than HHS had estimated. More recently, 19 States have requested new transitional and legislative waivers for two additional years to implement the changes because of the high cost and extensive systems changes necessary to come into compliance.

In addition, States have expressed concerns about the increased potential for fraudulent payments associated with the requirements added in the March 2024 final rule. This concern is magnified by the fact that CCDF funding has risen significantly in recent years, from $8.1 billion in FFY 2019 to $12.4 billion in FFY 2026. This 50 percent increase in funding warrants appropriate accountability measures, including the prevention of any fraudulent payments. The 2020 Government Accountability Office (GAO) report Child Care and Development Fund: Office of Child Care Should Strengthen Its Oversight and Monitoring of Program-Integrity Risks (GAO-20-227) identified program integrity risks for CCDF, including the need to fully assess fraud risks. 3 Every year, single audits identify findings for the CCDF program across the range of compliance requirements, including findings related to insufficient internal controls. To address increased focus on allegations of fraud, the President issued an Executive Order 14395 “Establishing the Task Force to Eliminate Fraud” to coordinate and accelerate a comprehensive national strategy to stop fraud, waste, and abuse within Federal benefit programs, including programs administered jointly with State, local, tribal, and territorial partners. 4

In January 2026, HHS proposed to rescind the four most onerous requirements from the March 2024 final rule, including requirements to limit family co-payments to 7 percent of family income, to provide some direct services through grants or contracts, to pay child care providers prospectively, and to pay providers based on a child's authorized enrollment. This final rule codifies those recissions. These changes prioritize Lead Agency flexibility and align with the purposes of the Act. This final rule continues to allow States, Territories, and Tribes the option to implement these policies based on their own assessment of what works best for children, families, and child care providers in their communities and what best supports their ability to prevent fraud within the CCDF program.

By removing four overly prescriptive requirements, this final rule responds to Executive Order 14192, Unleashing Prosperity through Deregulation and restores State, Territory, and Tribal flexibility for designing and operating their CCDF programs as they deem most appropriate. Under this Executive Order, “It is the policy of the executive branch to be prudent and financially responsible in the expenditure of funds, from both public and private sources, and to alleviate unnecessary regulatory burdens placed on the American people.”

The final rule also responds to Secretary Robert F. Kennedy Jr.'s directive to “launch the most sweeping deregulatory initiative in the history of the Department” of Health and Human Services by “eliminating bureaucratic red tape and “aggressively deregulating to return the freedoms eroded over decades by unnecessary and burdensome regulations.” 90 FR 20394.

This final rule rescinds four requirements added in the March 2024 final rule that are costly, burdensome, and overly prescriptive, especially compared to other block grant programs. As is standard with block grant programs, Lead Agencies continue to have the flexibility to implement the policies formerly required by the March 2024 final rule. All four rescissions apply to States and Territories. Only the repeal of the family co-payment limit applies to Tribal Lead Agencies, as Tribal Lead Agencies are already exempt from the requirements related to payment practices. Once this final rule takes effect, HHS will no longer require implementation of all rescinded requirements. Forthcoming guidance will outline the process HHS will follow to terminate existing transitional and legislative waivers for rescinded requirements.

• Repeal the federally mandated cap on family co-payments at § 98.45( l )(3). This final rule removes the mandatory 7 percent cap that was imposed in the March 2024 final rule, and reverts to the previous requirement that matches the statutory language that co-payments cannot be a barrier to families receiving child care assistance. This change restores Lead Agency flexibility to decide how best to balance the trade-offs between reducing child care costs for families participating in CCDF and serving additional families with higher co-payments. According to FFY 2025-2027 CCDF State and Territory Plan data, as of March 2026, 31 states, the District of Columbia, and 5 territories currently limit co-payments to 7 percent or less of family income. Under this final rule, Lead Agencies may continue to set family co-payments to align with community needs.

• Repeal the requirement to use some grants or contracts for direct services at § 98.30(b)(1). The March 2024 final rule mandated States and Territories to use some grants or contracts to provide direct services for infants and toddlers, children with disabilities, and children in underserved geographic areas. This requirement is excessively prescriptive by mandating grants or contracts for particular populations and is difficult to implement. The stringent requirements mean that even some States that have a long history of using grants or contracts for direct services for the identified populations would have to make significant changes to meet the requirements of the March 2024 final rule. By repealing this requirement, HHS is ensuring that parents can use federal funding through vouchers or certificates to access the providers of their choice that will meet their unique needs.

• Repeal the requirement to pay child care providers prospectively at § 98.45(m)(1). The March 2024 final rule required provider payment in advance of or at the beginning of the delivery of service ( i.e., prospectively) with limited exceptions. This final rule rescinds this requirement and reverts to the option established in the 2016 final rule for States and Territories to pay providers prospectively or on a reimbursement basis. This change increases Lead Agency flexibility to develop payment policies that they believe best support program integrity and combat potential fraud in their CCDF programs. As required by the Act at Section 658E(c)(4)(B)(iv) (42 U.S.C. 9858c(c)(4)(B)(iv)), States and Territories must still ensure that child care providers are paid in a timely manner, which is critical for providers to participate in CCDF and increases the options available to parents.

• Repeal the requirement to pay child care providers based on a child's enrollment rather than attendance at §  98.45(m)(2). The March 2024 final rule required States and Territories, with limited exceptions, to pay providers based on a child's authorized enrollment. This policy, once fully implemented, was estimated to cost $16.5 million per year. With its repeal, States and Territories will have the opportunity to use more of their CCDF budget to provide direct services for eligible children. The change provides greater flexibility and multiple allowable options to meet the statutory requirement to delink provider payments from a child's occasional absences. States and Territories will also have increased flexibility to support program integrity and combat potential fraud in their CCDF programs.

This final rule will become effective 60 days from the date of its publication.

By rescinding four of the mandatory provisions added by the March 2024 final rule, this final rule will prevent the occurrence of the estimated transfers and costs reported in the 2024 Regulatory Impact Analysis (RIA), with the exception of the anticipated economic impacts in the first year. 89 FR 15400-11.

Over a 5-year time horizon covering 2025 through 2029, HHS estimates annualized transfers of $23.4 million using a 3-percent discount rate and $22.8 using a 7-percent discount rate; and annualized costs of $6.7 million using a 3-percent discount rate and $6.6 million using a 7-percent discount rate. Negative costs represent cost savings and negative transfers represent a reversal of the direction of transfers compared to the 2024 RIA. Transfers represent a shift in payments from one party to another but do not affect the total resources available to society. In this context, transfers under the March 2024 final rule represented a transfer of payments from parents and child care providers to Lead Agencies. By rescinding the policies from the March 2024 final rule, the transfers in this final rule now represent the transfer of payments from Lead Agencies to parents and child care providers.

To produce an estimate of cost savings under Executive Order 14192, HHS assumes the impacts of the proposed changes on costs in 2029 will extend in perpetuity. HHS estimates that this final rule will generate $6.1 million in annualized cost savings at a 7-percent discount rate, discounted relative to year 2024, in perpetuity.

The provisions of this final rule are intended to be severable, such that, in the event a court were to invalidate any particular provision or deem it to be unenforceable, the remaining provisions would continue to be valid. The changes address a variety of issues relevant to child care. None of the provisions in the final rule contained herein are central to an overall intent of the final rule, nor are any provisions dependent on the validity of other, separate provisions.

Since publication of the March 2024 final rule, several States and Territories have reiterated to HHS that some of the requirements added in the March 2024 final rule are more costly and difficult to implement than HHS had estimated. This feedback has been shared through State and Territory CCDF plan appendices, in-person meetings and focus groups with CCDF administrators, and technical assistance inquiries. The changes in this final rule are informed by these concerns and designed to provide CCDF Lead Agencies with additional flexibility in administering their CCDF program.

HHS published a notice of proposed rulemaking (NPRM) in the Federal Register on January 5, 2026, (91 FR 207) proposing revisions to CCDF regulations. HHS provided a 30-day comment period during which interested parties could submit comments in writing electronically through Regulations.gov or via email to the Office of Child Care.

During the 30-day comment period, HHS received 1,244 comments from State human services and educational agencies; members of the U.S. Congress; national, State, and local early childhood and family-focused advocacy organizations, including research and policy organizations; labor unions; child care resource and referral agencies; and provider organizations. Child care providers, parents, and individual members of the public also submitted comments. Of the comments received, 1,138 were posted on www.regulations.gov and 106 were not posted because they contained inappropriate language or were not submitted in the English language. HHS also received several comments that are not addressed below because they were beyond the scope of the proposed regulatory changes or were vague or incomplete.

Of the 1,138 comments posted on www.regulations.gov, 998 comments were unique and 246 comments were duplicate comments. Some national, State and local organizations and groups of child care providers coordinated to submit the same comment separately. Others submitted one comment signed by or on behalf of hundreds of individuals.

HHS received comments from seven State CCDF Lead Agencies: Georgia, Missouri, New Mexico, North Dakota, Ohio, Tennessee, and Texas. Individuals submitted 787 comments. Child care providers submitted 276 comments. Of the remaining comments, 57 comments came from national organizations, and 80 comments came from State and local organizations. HHS also received 3 comments from Congressional members or groups of members. A comment from Senator Jon Husted supported rescinding the requirement to pay providers based on enrollment. Comments from the Democratic Women's Caucus and a bicameral group of 74 Democratic Senators and Representatives were in opposition to the proposed changes.

At the conclusion of the public comment period, HHS analyzed the content of the comments to inform the development of this final rule. To support the analysis of public comments, HHS staff used a large language model, a type of artificial intelligence (AI), as a tool to conduct an initial scan of comment content, sentiment, and language. The AI output was thoroughly analyzed and refined by content experts. All comments were reviewed by content experts to determine each commenter's support or opposition towards the policies proposed in the NPRM.

Public comments reflected a range of perspectives, with commenters expressing support and opposition for the proposed rescissions. All comments were reviewed and informed the Department's consideration of the final rule.

Changes in this final rule affect the State, Territory, and Tribal agencies that administer the CCDF. HHS has and will continue to consult with State, Territory, and Tribal agencies and provide technical assistance throughout implementation.

This final rule maintains the structure and organization of the current CCDF regulations. The preamble in this final rule discusses the changes to current regulations. Where language of previous regulations remains unchanged, the preamble explanation and interpretation of that language published with all prior final rules are also retained, unless specifically modified in the preamble to this rule. (See 57 FR 34352, Aug. 4, 1992; 63 FR 39936, Jul. 24, 1998; 72 FR 27972, May 18, 2007; 72 FR 50889, Sep. 5, 2007; 81 FR 67438, Sept. 30, 2016; 89 FR 15366 March 1, 2024).

This final rule includes substantive changes in four key policy areas in the CCDF regulations. HHS received and reviewed comments on all the significant proposed changes. Following review of all comments, HHS has maintained all proposed changes from the NPRM. Specific comments are discussed in the section-by-section analysis later in this final rule.

Most of the State commenters and organizations that represent State and local human services agencies expressed overall support for the proposed recissions, noting that the proposals would remove costly requirements and increase flexibility for Lead Agencies. One State expressed overall opposition to the NPRM, and a different State did not express support or opposition but requested clarification about whether States would continue to have the option to implement the policies proposed for rescission.

The majority of unique public comments opposed the changes proposed in the NPRM. Commenters who opposed the NPRM argued that the changes may make child care more costly for families, noting the importance of ensuring co-payments are not a barrier to child care access. Commenters also opposed the NPRM because they argued that the proposed changes to provider payment practices may not be consistent with private pay practices which could potentially hurt child care provider operations and lead providers to stop participating in the CCDF program.

Commenters also noted that many States and Territories had already started making policy and systems changes to implement the requirements included in the March 2024 final rule, including making costly systems investments that may not be easily undone. These commenters expressed concerns that the time and funding used for these changes would be wasted if the proposed changes were finalized.

HHS acknowledges concerns raised by commenters who opposed the NPRM but moves forward with rescinding the four requirements as proposed. This final rule does not prohibit any State or Territory from implementing the four rescinded requirements. Lead Agencies that have already dedicated resources and made system changes to implement may continue to do so. The flexibility this final rule allows Lead Agencies to pause and reassess whether formerly required policies are the best way to meet the unique needs of the families, children, and providers in their State or Territory and not simply to meet federal requirements. HHS reiterates the importance for Lead Agency flexibility in developing CCDF policies that support child care affordability and provider payment practices that promote parental choice for CCDF-eligible families. HHS will continue its regular work of supporting CCDF Lead Agencies through guidance and technical assistance in partnership with the CCDF-funded Child Care Technical Assistance Network.

HHS received comments about changes proposed to specific subparts of the regulation. Below, HHS identifies each subpart, summarizes the comments, and responds to them accordingly.

Supply of child care. The final rule amends § 98.16(x), removes paragraphs (y) and (z), and redesignates § 98.16(aa) through ( ll ) to (y) through (jj) to conform with the changes described below in §§ 98.30 and 98.50 removing the requirement to use some grants or contracts for direct child care services. The change to § 98.16(x) restores language from the 2016 final rule that the CCDF Plan must: Identify shortages in the supply of high-quality child care providers; list the data sources used to identify supply shortages; and describe the method of tracking progress to support equal access and parental choice.

The amended language at § 98.16(x) is based on statutory language at Section 658E(c)(2)(M) of the Act (42 U.S.C. 9858c(c)(2)(M)), which requires the Lead Agency to describe strategies to increase the supply and improve the quality of child care services for children in underserved areas, infants and toddlers, children with disabilities, and children who receive care during nontraditional hours. As described in the Act, the strategies may include alternative payments rates to child care providers, the provision of direct contracts or grants to community-based organizations, offering child care certificates to parents, or other means determined by the Lead Agency. In addition to alternative payment rates and contracts, Lead Agencies may consider other strategies, including training and technical assistance to child care providers to increase quality for these types of care.

Comment: HHS received comments supporting removal of the underlying requirement that Lead Agencies must use grants or contracts for some direct services. Commenters suggested options for descriptions and data points that should be required within the State and Territory CCDF Plans to demonstrate a Lead Agency's efforts to increase the supply and improve the quality of child care services for children in underserved areas, infants and toddlers, children with disabilities, and children who receive care during nontraditional hours, as required by the Act. Commenters also provided suggestions of data points that Lead Agencies should be required to provide in the CCDF Plan related to the supply of child care services for these specific populations of children.

Response: Prior to final publication of the CCDF Plan, draft versions of the document are published in the Federal Register with a request for public comment. Through those public comment periods, commenters can provide input on the draft Plan document, including any suggestions for additional information that should be collected from Lead Agencies.

The final rule rescinds the requirement at § 98.30(b)(1) for States and Territories to provide some portion of the delivery of direct services via grants or contracts, including at a minimum for children in underserved geographic areas, infants and toddlers, and children with disabilities. This change restores State and Territory flexibility and does not impact a Lead Agency's ability to utilize grants or contracts for some direct child care services if they choose to do so. From the publication of the first CCDBG rules in 1992 until the March 2024 final rule, CCDF regulations provided for the option for Lead Agencies to provide some direct child care services through grants or contracts, while ensuring that all families must be offered the option to receive a child care certificate. The March 2024 final rule placed new and difficult mandates on State and Territory Lead Agencies to establish grants or contracts for some direct services for particular populations. This final rule restores the flexibility for Lead Agencies that existed prior to the March 2024 final rule by removing the mandate for State and Territory Lead Agencies to provide at least some direct child care services through grants and contracts. The Act requires that a State or Territory CCDF Plan provide assurances that parents participating in CCDF be offered “the option either- to enroll such child with a child care provider that has a grant or contract for the provision of such services; or to receive a child care certificate.” 42 U.S.C. 9858c(c)(2)(A)(i). If a Lead Agency chooses to utilize grants or contracts for some direct child care services, the Lead Agency must continue to offer all families the option to receive a child care certificate for all CCDF-eligible children.

Comment: Commenters supporting the proposed changes argued that the requirement for Lead Agencies to use some grants or contracts for direct services would negatively impact parental choice, noting that child care vouchers or certificates provide the greatest amount of flexibility for families to locate and enroll their child with a child care provider that aligns with their child and family's needs. Those opposing the proposed changes raised concerns that the recission of the requirement would limit parental choice to locate and enroll their child in a child care provider of their choosing due to child care supply constraints.

Response: HHS rescinds the requirement to use some grants or contracts for direct services for infants and toddlers, children with disabilities, and children in underserved geographic areas. Lead Agencies may continue, at their option, to contract for the provision of some direct child care services; however, parents must always be offered the option to receive CCDF child care through a child care certificate they can use for an eligible provider of their choosing. Parental choice is a central tenant of the Act and CCDF regulations. Within CCDF programs, the funding mechanism that allows the greatest degree of flexibility and parental choice is the use of child care vouchers or certificates. These certificates allow parents to select from any child care provider that accepts the Lead Agency's vouchers or certificates, allowing families to choose from a wider range of child care providers than just those with which the Lead Agency may have direct service grants or contracts. It is important for parents, especially parents of children of the identified populations who may need specialized care, to have maximum flexibility to choose a provider that matches their unique needs and values.

Comment: Commenters also expressed support for the proposed rescission because the requirement to use some grants or contracts for direct services was overly prescriptive and difficult for States and Territories to implement.

Response: According to FFY 2025-2027 CCDF State and Territory Plan data, as of March 2026, only 7 States and 1 Territory have implemented grants or contracts for children with disabilities, 11 States and 1 Territory have implemented grants or contracts for infants and toddlers, and 10 States have implemented grants or contracts for children in underserved geographic regions. HHS is dedicated to ensuring maximum State flexibility in implementing CCDF, this final rule rescinds this burdensome requirement.

Comment: Those opposing the proposed changes raised concerns that the recission of the requirement to use some grants or contracts for direct child care services for children in underserved geographic areas, infants and toddlers, and children with disabilities would limit parental choice because there may be a lack of the type of child care they need in their area, particularly for children with disabilities or in rural areas. Commenters noted that grants or contracts for direct services can be a useful tool in addressing these supply gaps.

Response: This final rule does not prohibit a State or Territory's from providing direct child care services through grants or contracts if the Lead Agency finds this funding mechanism a useful tool to address supply gaps. However, the requirement for providing some grants or contracts for direct child care services has thus far shown to be an expensive and complicated process for Lead Agencies to adopt, and inhibits their ability to provide direct child care services in the manner they determine to be best for their State or Territory's CCDF program.

Demonstrating Affordable Co-Payments. The final rule makes a conforming change at § 98.45(b)(5) and removes the requirement for Lead Agencies to describe in their CCDF Plans how co-payments “do not exceed 7 percent of income for all families.” Lead Agencies are still required to demonstrate in their CCDF Plan how their co-payments are based on a sliding fee scale and are not a barrier to families receiving CCDF assistance. The final rule conforming change aligns with the final rule rescission of the requirement at § 98.45( l )(3) to limit family co-payments to 7 percent of family income.

Comment: Commenters requested that States demonstrate that they considered the previous 7 percent benchmark or other regional economic data when establishing their sliding fee scales.

Response: CCDF regulations at § 98.45( b )(5) continue to require Lead Agencies to provide a summary of data and facts in their CCDF Plans describing how co-payments based on a sliding fee scale are affordable. The final rule restores flexibility to States to define affordability in a manner consistent with their State context, including using local or regional economic data to understand when co-payment amounts become barriers to families receiving CCDF assistance.

Family Co-payments. The final rule at § 98.45( l )(3) rescinds the requirement for States, Territories, and Tribes to establish co-payment policies for families that are “not to exceed 7 percent of income for all families, regardless of the number of children in care who may be receiving CCDF assistance.” Section 658E(c)(5) of the Act requires Lead Agencies to establish and periodically revise a sliding fee scale that provides for cost sharing ( i.e., co-payment) that is “not a barrier to families receiving” CCDF assistance. 42 U.S.C. 9858c(c)(5). The Act does not specify what constitutes “a barrier.” The final rule restores Lead Agency flexibility to decide how best to balance limited resources by having lower family co-payments and serving fewer families or having higher family co-payments and serving more families. According to FFY 2025-2027 CCDF State and Territory Plan data, as of March 2026, 37 Lead Agencies currently limit co-payments to 7 percent or less of a family's income. These Lead Agencies have the flexibility to continue their established co-payment policies.

Comment: Commenters who supported this proposal emphasized State flexibility in establishing co-payment policies and agreed that Congress provided more flexibility in the statutory co-payment requirement than allowed under the 7 percent cap.

Response: Section 658E(c)(5) of the Act provides Lead Agencies flexibility in defining what constitutes “a barrier to families.” HHS has rescinded the requirement to cap family co-payments at 7 percent of a family's income.

Comment: Commenters who supported the recission noted that the 7 percent cap requirement posed fiscal and operational challenges for many States in absence of additional funding. Commenters also noted that repealing the federally mandated 7 percent cap would support the flexibility for States to manage their child care programs while adapting to changing budget limitations. Commenters also noted the implications of balancing affordable co-payments with available CCDF funding, especially given many States already face long child care waitlists.

Response: Implementing the 7 percent cap on family co-payments may cause difficult financial decisions for Lead Agencies. The final rule rescinds the requirement to cap family co-payments at 7 percent of family income and restores Lead Agency flexibility to determine a sliding fee scale that meets the CCDF requirement of not being “a barrier” to families receiving assistance within budget constraints.

Comment: Commenters who opposed this proposal to rescind the co-payment cap requested HHS retain the 7 percent cap requirement. Commenters noted that States are already implementing the 7 percent cap with a positive impact on families and child care. Commenters shared research and anecdotal information about the impact of reduced co-payments for families in their States.

Response: Lead Agencies continue to have the flexibility to limit co-payments to a percentage of family income. States currently implementing the 7 percent cap have the flexibility to continue to limit co-payments in this way. States also have the flexibility to limit co-payments based on a lower threshold to support affordability. Based on the FFY 2025-2027 CCDF State and Territory Plans, as of March 2026, 15 states and the District of Columbia currently limit family co-payments to 7 percent of family income and 16 States and 5 Territories cap co-payments at a level less than 7 percent ( e.g., limit co-payments to 1 percent of family income).

Comment: Commenters who opposed the proposal argued that removing the 7 percent cap would be detrimental for families due to child care affordability and access concerns, especially coupled with general rising cost of living. Commenters noted that eliminating affordability parameters for families receiving CCDF subsidies may open the door to increased co-payments that can impede the intended purpose of the law to best meet the needs of children and parents, (42 U.S.C. 9857(b)(1)).

Response: Lead Agencies continue to be required to establish sliding fee scales that are not a “barrier to families receiving assistance.” Lead Agencies have the flexibility to take into account general rising cost of living for families receiving CCDF when developing their cost sharing and sliding fee scale policies.

Comment: Commenters who opposed the proposal highlighted the implications rescinding the 7 percent cap may have on provider stability and parental choice for CCDF families if high co-payments result in families needing to disenroll children from providers.

Response: Lead Agencies continue to have the flexibility to develop cost-sharing and sliding fee policies that support affordability and allow families to choose providers that best meet their preferences and child care needs. HHS encourages Lead Agencies to exercise their flexibility to ensure any changes in family co-payments does not impact the availability of providers and parent choice.

Comments: Commenters noted that the NPRM did not address whether HHS would be recommending a benchmark for co-payments. Both those who supported and opposed the proposal expressed concerns about how Lead Agencies would ensure that co-payments were not a barrier to accessing child care assistance without a required or recommended level. Commenters suggested that HHS reinstate the 7 percent recommended benchmark established in the preamble to the 2016 final rule.

Commenters noted the benefit of HHS conducting a comprehensive study to better understand child care affordability in today's market and questioned the validity of the 7 percent co-payment benchmark for affordability included in the 2016 final rule. Commenters from various States offered specific and local data on affordable co-payments and general child care affordability.

Response: HHS will not be recommending a benchmark for co-payments at this time. The optional Federal benchmark for family co-payments of no more than 7 percent of family income established in the preamble to the 2016 final rule was based on 2011 data from a U.S. Census Bureau report that showed families, on average, spent 7 percent of income on child care. 81 FR 67467-68. These data are outdated and therefore cannot be used to support a new national recommendation. HHS may conduct research on how co-payments impact a family's access and participation in CCDF to inform potential future recommendations.

Comment: Commenters argued that States should be discouraged from increasing co-payment amounts above current levels for families unless an evidence-based benchmark is established. Commenters noted that States should be encouraged to adopt policies that take into account affordability for families with multiple children in care.

Response: HHS may conduct research to examine affordability in child care and affordable co-payments. Lead Agencies have the flexibility to develop cost-sharing policies to ensure affordability when multiple children are in care. The recission of the 7 percent cap restores Lead Agency flexibility to make cost sharing and sliding fees policies that balance affordability and funding availability.

Payment Practices. This final rule makes key changes at § 98.45(m) to restore Lead Agency flexibility regarding CCDF payment practices.

Timely Payments to Providers. This final rule repeals the requirement at § 98.45(m)(1) that Lead Agencies pay CCDF child care providers in advance of or at the beginning of delivery of services ( i.e., prospectively). This change restores Lead Agency flexibility regarding the timing of payments to CCDF providers and provides Lead Agencies with the option to pay providers prospectively or on a reimbursement basis. As required by the Act at Section 658E(c)(4)(B)(iv) (42 U.S.C. 9858c(c)(4)(B)(iv)), States and Territories must still ensure that child care providers are paid in a timely manner. When child care providers are not paid in a timely manner, they may choose not to participate in the CCDF program, which can limit child care options for parents. Therefore, the final rule requires Lead Agencies to either pay child care providers prospectively or to reimburse child care providers within 21 days of receiving a completed invoice.

Comments: Commenters who supported the proposed rescission emphasized the need for increased flexibility for Lead Agencies. They noted that timely payments were important, but that there were other ways to ensure this while allowing some State discretion in policymaking that balances supporting providers and families with program integrity and accountability.

Response: This final rule rescinds the requirement to pay providers prospectively, restoring Lead Agency flexibility to pay CCDF providers within a timeframe that works best for families and providers in their individual State or Territory, while also ensuring sound stewardship of taxpayer dollars.

Comments: Commenters who opposed the proposed rescission argued that prospective payment is more in line with the private pay child care market and is a stabilizing practice for child care providers that are predominantly small businesses. More specifically, commenters said that delayed payments make it difficult to cover fixed costs, such as payroll and other operating expenses, in a timely manner.

Response: Rescinding the requirement to pay providers prospectively does not prohibit this payment practice. Lead Agencies continue to have the flexibility to pay providers prospectively if the payment practice meets the needs of their individual State or Territory. As of March 2026, nine Lead Agencies have implemented policies to pay all child care providers prospectively, per the FFY 2025-2027 CCDF State and Territory Plans. Ensuring timely provider payments is a statutory requirement and is important for parent choice as it relates to the impact on providers' businesses and the availability of child care providers. Moving forward, HHS intends to strengthen monitoring and oversight of the requirement to pay providers within 21 days in order to ensure payments to providers are timely, while maintaining State flexibility in administration of CCDF programs.

Comment: HHS requested comments in the NPRM on the appropriate timeframe for providers to receive payment after submitting a completed invoice. All commenters who responded voiced support for a timeframe shorter than 21 days, but specific comments varied from general support to more specific timeframes such as three days or 14 days.

Response: HHS considered commenters' suggestions and has decided to maintain the proposed 21-day payment requirement as a minimum standard, while restoring Lead Agency flexibility to pay providers prospectively or on a reimbursement basis.

Delinking Payments from Absences. The final rule repeals the requirement at 45 CFR 98.5(m)(2) that State and Territory Lead Agencies pay child care providers based on a child's authorized enrollment. This change restores Lead Agencies' flexibility to implement options to meet the statutory requirement to support the fixed costs of providing child care services by delinking provider payment rates from an eligible child's occasional absences due to holidays or unforeseen circumstances such as illness, to the extent practicable. Under the final rule, Lead Agencies may meet this statutory requirement by: (1) Paying providers based on a child's enrollment, rather than attendance; (2) providing a full payment to providers as long as a child attends for 85 percent of the authorized time; (3) providing full payment to providers as long as a child is absent for five or fewer days in a four week period; or (4) establishing an alternative approach justified in the CCDF Plan. According to FFY 2025-2027 CCDF State and Territory Plan data, as of March 2026, 29 Lead Agencies currently pay providers based on authorized child enrollment. These Lead Agencies have the flexibility to continue their established payment policies.

HHS reminds Lead Agencies that regardless of the approach a Lead Agency takes to delink payments from an eligible child's absences, Lead Agencies are required to ensure integrity and accountability through implementing processes to ensure sound fiscal management, identify areas of risk, train Lead Agency staff and other agency staff about program requirements and integrity, and regularly evaluate internal control activities (§ 98.68). All Lead Agencies are strongly encouraged to collect and review provider attendance and billing records, conduct quality control or quality assurance reviews, and swiftly enforce corrective actions and penalties when violations occur.

Comment: Commenters supported the proposal to rescind the requirement to pay providers based on authorized enrollment and argued that Lead Agencies should retain their flexibility to design and operate their CCDF programs as they deem most appropriate. These commenters further argued that HHS lacked the authority to restrict Lead Agencies to only one approach.

Response: The final rule maintains the language in the NPRM that restores additional flexibilities for States, Territories, and Tribes to continue to have the option to adopt payment policies based on their own assessment of what works best for children, families, and child care providers in their communities.

Comment: HHS received comments generally opposed to the practice of paying providers based on enrollment. These commenters described the unintended consequences of the practice, including increasing child care costs, program integrity concerns, and ability to combat potential fraud. In addition, commenters recommended removing the option that States delink absences from provider payments thereby ensuring that payments are made only for services provided.

Response: It is important for Lead Agencies to have flexibility to implement payment practices that they believe best support program integrity and combat potential fraud within their CCDF programs. This final rule allows Lead Agencies the option to reimburse child care services based on attendance. Section 658E(c)(2)(S) of the Act requires States to implement enrollment and eligibility policies that support the fixed costs of providing child care services by delinking provider reimbursement rates from an eligible child's occasional absences due to holidays or unforeseen circumstances such as illness, to the extent practicable. The final rule allows Lead Agencies to implement practices other than paying providers based on enrollment and is consistent with the requirement in the Act.

Comment: HHS received comments concerned with ensuring that Lead Agencies implement provider payment practices that safeguard against improper or fraudulent payments. While some commenters had reservations that paying providers based on enrollment was transparent enough to employ such safeguards, other commenters encouraged Lead Agencies to implement robust controls regardless of their payment practices.

Response: HHS is dedicated to ensuring that CCDF funds are spent providing child care to eligible children attending eligible child care providers. As discussed above, Lead Agencies must take steps to address improper payments and fraud. Lead Agencies that choose to pay child care providers based on enrollment are strongly encouraged to collect attendance records to ensure that the child still needs care and that the child care provider is operating within CCDF requirements.

Comment: Commenters opposed to the proposal described enrollment-based payment as the best approach to ensure providers' financial stability and ability to meet the expenses of their fixed operational costs. They argued that it is a generally accepted practice among families paying for child care privately to pay a fixed fee to providers based on enrollment regardless of a child's daily attendance. Commenters maintained that providers opt out of participating in CCDF when they are not paid based on enrollment. In addition, commenters warned that providers who are unwilling or unable to absorb the loss of income due to a child's absence may pass those costs to families.

Response: This final rule does not prohibit a Lead Agency's ability to pay providers based on a child's authorized enrollment, and Lead Agencies that currently pay providers based on enrollment may continue to do so. Section 658E(c)(2)(S)(ii) of the Act requires Lead Agencies to delink payments from occasional absences. This final rule reinstates Lead Agencies' flexibility to adopt policies based on their own assessment of what works best for children, families, and child care providers in their communities.

Comment: HHS requested comments in the NPRM on the appropriate number of paid absence days or attendance rates to ensure providers participate in the CCDF program to support parental choice, while ensuring Lead Agency flexibility. HHS received a range of recommendations on the appropriate number of paid absence days and attendance rates. Commenters also recommended that the paid absences be applied at the provider level rather than the child level so that one provider's payment would not be affected by a child's absences with a secondary provider. In addition, commenters recommended that any allowable absence policy be aligned with health and safety standards that may result in a child's chronic absenteeism.

Response: This final rule maintains the options proposed in the NPRM, including the options to provide full payment to providers as long as a child is absent for five or fewer days in a four week period or attends for 85 percent of the authorized time. Lead Agencies retain the flexibility to implement more generous absence policies that pay providers the full payment if a child has more than five absences.

Restructuring to Align with Previous Regulations. This final rule revises § 98.45 to revert to the paragraph structure of the 2016 final rule. First, the final rule moves language from the introduction at § 98.45(m) requiring provider payment practices to reflect generally accepted payment practices to § 98.45(m)(3). This change aligns with regulatory language in the 2016 final rule, which included this text when describing the requirement to pay providers based on a part-time or full-time basis and to pay for reasonable mandatory fees. This paragraph structure change does not change requirements related to paying providers on a part-time or full-time basis or to pay for reasonable mandatory fees.

Second, the final rule removes unnecessary language at § 98.45(n)(4) that indicates Lead Agencies are able to take “precautionary measures when a provider is suspected of fiscal mismanagement.” This language was added in the March 2024 rule to reinforce that States and Territories could choose not to pay a provider prospectively and based on enrollment if that provider was suspected of fraud. States and Territories already had, and continue to have, the responsibility to take actions when a provider has been suspected of fraud. Lead Agencies have sufficient flexibility in the revised regulatory language for payment practices to adjust payment policies in response to suspected provider fraud. Therefore, HHS has removed this redundant provision. Lastly, the final rule removes paragraphs § 98.45(n)(4) and (5), combine § 98.45(m)(3) and (4) under a revised § 98.45(m)(3), and redesignate the provisions at § 98.45(n)(1)-(3) as § 98.45(m)(4)-(6).

HHS did not receive comments on these technical changes.

Clarification on Total Payment to Providers. The final rule removes language at § 98.45(n)(5) to require States and Territories to demonstrate in their CCDF Plan that the total payment to a provider (subsidy payment amount and family co-payment) is not impacted by cost-sharing policies. This clarification was included in the March 2024 final rule in response to comments on the requirement at § 98.45( l )(3) to limit family co-payments to 7 percent of family income and concerns that reductions in family co-payments could reduce the amount received by child care providers. Given that the final rule rescinds the requirement for States and Territories to limit family co-payments to 7 percent of family income, this clarification is no longer needed.

Comments: Commenters opposed the removal of language at § 98.45(n)(5). Commenters argued that removing the requirement for Lead Agencies could weaken transparency and public oversight and discourage provider participation and ultimately reduce access for families. Commenters also asserted that providers should not be expected to effectively subsidize lower costs for families due to reduced payments.

Response: This final rule removes the language at § 98.45(n)(5). HHS reminds Lead Agencies that the Act requires Lead Agencies to set payment rates at levels that provide CCDF families equal access to child care services that are comparable to care provided to children whose parents are not eligible for CCDF. 42 U.S.C. 9858c(c)(4)(A). Under CCDF, payments to providers are a combination of the Lead Agency share and the parent share ( i.e., co-payment). HHS encourages Lead Agencies to exercise their flexibility in setting payment rates to ensure co-payment policies do not result in decreases in total payment to providers.

The final rule makes conforming changes to § 98.50(a)(3) and (b) that align with the recission of the requirement in § 98.30(b) discussed earlier in this preamble, which required States and Territories to use grants or contracts for some direct child care services for children in underserved geographic areas, infants and toddlers, and children with disabilities. This final rule revises § 98.50(a)(3) by deleting “including grants or contracts for slots for children in underserved geographic areas, for infants and toddlers, and children with disabilities. Grants solely to improve the quality of child care services like those in (b) of this section would not satisfy the requirements at § 98.30(b).” The final rule also revises § 98.50 (b) by deleting (b)(4) completely. This provision is no longer relevant due to the changes in § 98.30(b) to remove the requirement to utilize grants or contracts for some direct child care services.

Comment: HHS received comments that supported the proposed recission of the requirement to utilize grants or contracts for some direct child care services but requested clarification on the continued allowability of utilizing CCDF funds to implement grants or contracts to provide some direct services and utilization of grants for general child care supply-building activities.

Response: Lead agencies may continue, at their option, to utilize CCDF funding to implement grants or contracts for some direct child care services; however, they are no longer required to do so. Lead Agencies may also continue to use CCDF funding to provide grants to child care providers that do not involve the provision of direct services, such as grants to assist with start-up funds for new child care providers.

This subpart addresses requirements and procedures for Indian Tribes and Tribal organizations applying for or receiving CCDF funds and serves as the Tribal summary impact statement as required by Executive Order 13175. 5 The amendments in this subpart are conforming changes and do not change requirements for Tribal CCDF Lead Agencies.

Paragraphs 98.81(b)(6) and 98.83(d)(1) specify from which provisions all Tribal Lead Agencies are exempted. All Tribal Lead Agencies were already exempted from the previous requirement to provide some direct services through grants or contracts. Because this final rule rescinds the requirements for States and Territories to provide services through grants or contracts, the provisions exempting Tribal Lead Agencies from the requirement are no longer necessary. Therefore, this final rule removes §§ 98.81(b)(6)(x), 98.83(d)(1)(i), and 98.83(d)(1)(x).

HHS did not receive comments on these conforming changes.

The final rule does not amend § 98.83(d)(1)(vi), which exempts all Tribal Lead Agencies from the requirement for a sliding fee scale at § 98.45( l ). However, as discussed above, the change removes the requirement for Tribal Lead Agencies with medium and large allocations that choose to implement cost-sharing and require family co-payments for their CCDF programs to cap family co-payments to 7 percent of the family's income. Tribes with small allocations were already exempt from the requirement to limit family co-payments to 7 percent of income. With this final rule, all Tribal Lead Agencies now have maximum flexibility in establishing those co-payment amounts.

Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq., as amended) (PRA), all Departments are required to submit to the Office of Management and Budget (OMB) for review and approval any reporting or recordkeeping requirements inherent in a proposed or final rule. As required by this Act, HHS will submit any proposed revised data collection requirements to OMB for review and approval.

The final rule modifies the previously approved ACF-118 CCDF State and Territory Plan information collection, but HHS has not yet initiated the OMB approval process to implement these changes. HHS will publish Federal Register notices soliciting public comment on specific revisions to this information collection and the associated burden estimates and will make available the proposed form and instructions for review.

The table below provides current approved annual burden hours and estimated annual burden hours for the existing information collection that is modified by this final rule.