Federal Register Vol. 80, No.224,

On September 11, 2014, the Commission received a Petition for Rulemaking from Level the Playing Field regarding the Commission's regulation at 11 CFR 110.13(c). That regulation governs the criteria that debate staging organizations (which the petitioner refers to as “sponsors”) use for inclusion in candidate debates. The regulation requires staging organizations to “use pre-established objective criteria to determine which candidates may participate in a debate” and further specifies that, for general election debates, staging organizations “shall not use nomination by a particular political party as the sole objective criterion to determine whether to include a candidate in a debate.” 11 CFR 110.13(c). The petition asks the Commission to amend 11 CFR 110.13(c) in two respects: (1) To preclude sponsors of general election presidential and vice presidential debates from requiring that a candidate meet a polling threshold in order to be included in the debate; and (2) to require sponsors of general election presidential and vice presidential debates to have a set of objective, unbiased criteria for debate participation that do not require candidates to satisfy a polling threshold.

The Commission published a Notice of Availability seeking comment on the petition on November 14, 2014. Candidate Debates, 79 FR 68137. The Commission received 1264 comments in response to that notice. One comment, that of an organization that stages presidential and vice presidential debates, opposed the petition; the remaining comments either supported the petition or took no position thereon.

The petition and many of the comments supporting it argue that a staging organization's requirement that a candidate meet a polling threshold for inclusion in a debate unfairly benefits major party candidates at the expense of independent and third party candidates. As an alternative, the petition and some of the comments proposed requiring staging organizations to include each candidate who has qualified for the general election ballot in states that collectively have enough Electoral College votes for the candidate to attain the presidency.1 The petition states that this would provide an objective, and more inclusive, criterion preferable to polling thresholds. Other commenters did not necessarily support or oppose the petitioner's proposed alternative but supported a rulemaking to determine if changes are warranted. Still other commenters proposed alternative and additional rule modifications for the Commission's consideration, such as a requirement that debate staging organizations provide the public with information about candidates not included in a debate.

The commenter that opposed the petition urged the Commission to continue allowing a debate staging organization substantial discretion in formulating the nonpartisan objective candidate selection criteria of its choice. This commenter further argued that its particular polling thresholds are reasonable and objective selection criteria adopted for nonpartisan reasons and designed to advance voter education. This commenter also asserted that the petitioner's proposed alternative would favor early ballot qualification by candidates with the most resources over more meaningful measures of candidate support and viability.

The Commission has evaluated the petition and comments and decided not to initiate a rulemaking to amend 11 CFR 110.13(c) at this time.

As the Commission stated in adopting the current candidate debate rule in 1995, “the purpose of section 110.13 . . . is to provide a specific exception so that certain nonprofit organizations . . . and the news media may stage debates, without being deemed to have made prohibited corporate contributions to the candidates taking part in debates.” Corporate and Labor Organization Activity; Express Advocacy and Coordination with Candidates, 60 FR 64260, 64261 (Dec. 14, 1995).2 Accordingly, the Commission has required that debate “staging organizations use pre-established objective criteria to avoid the real or apparent potential for a quid pro quo, and to ensure the integrity and fairness of the process.” Id. at 64262. In discussing objective selection criteria, the Commission has noted that debate staging organizations may use them to “control the number of candidates participating in . . . a meaningful debate” but must not use criteria “designed to result in the selection of certain pre-chosen participants.” Id. The Commission has further explained that while “[t]he choice of which objective criteria to use is largely left to the discretion of the staging organization,” the rule contains an implied reasonableness requirement. Id. Within the realm of reasonable criteria, the Commission has stated that it “gives great latitude in establishing the criteria for participant selection” to debate staging organizations under 11 CFR 110.13.3 First General Counsel's Report at n.5, MUR 5530 (Commission on Presidential Debates) (May 4, 2005), http://eqs.fec.gov/eqsdocsMUR/000043F0.pdf.

The Commission has a well-established history of ensuring that corporate contributions are not made to candidates taking part in debates, including by evaluating the objectivity and neutrality of a debate staging organization's selection criteria in the Commission's enforcement process. Enforcement matters regarding that issue have involved a wide range of candidate selection criteria, including polling thresholds (from 5% to 15%), campaign finance activity levels (such as a minimum number of contributors as shown in reports filed with the Commission), campaign engagement levels (such as numbers of yard signs or participation in neighborhood association meetings), ballot access, and office eligibility. See, e.g., First General Counsel's Report at 5 n.5, MUR 5530 (Commission on Presidential Debates) (May 4, 2005), http://eqs.fec.gov/eqsdocsMUR/000043F0.pdf (including 15% polling threshold and ballot access criteria). In each of these matters, the Commission evaluated whether the criteria were objective, pre-established, and not arranged in a manner to promote or advance one candidate over another so as to constitute corporate contributions to the participating candidates.

In these enforcement matters, the Commission has carefully examined the use of polling thresholds and found that they can be objective and otherwise lawful selection criteria for candidate debates. Indeed, almost two decades ago, the Commission found that a staging organization's use of polling data (among other criteria) did not result in an unlawful corporate contribution, with five Commissioners observing that it would make “little sense” if “a debate sponsor could not look at the latest poll results even though the rest of the nation could look at this as an indicator of a candidate's popularity.” MUR 4451/4473 Commission Statement of Reasons at 8 n.7 (Commission on Presidential Debates) (Apr. 6, 1998), http://www.fec.gov/disclosure_data/mur/4451.pdf#page=459. Citing this statement, one court noted with respect to the use of polling thresholds as debate selection criteria that “[i]t is difficult to understand why it would be unreasonable or subjective to consider the extent of a candidate's electoral support prior to the debate to determine whether the candidate is viable enough to be included.” Buchanan v. FEC, 112 F. Supp. 2d 58, 75 (D.D.C. 2000).

Because the regulation at issue is designed to provide debate sponsors with discretion within a framework of objective and neutral debate criteria, and because the Commission can evaluate the objectivity and neutrality of a debate sponsor's selection criteria through the enforcement process, the Commission finds that the rulemaking proposed by the petition is not necessary at this time. The Commission concludes that section 110.13(c) in its current form provides adequate regulatory implementation of the corporate contribution ban and is preferable to a rigid rule that would prohibit or mandate use of particular debate selection criteria in all debates. See 11 CFR 200.5(c) (listing desirability of proceeding on case-by-case basis as consideration in declining to initiate rulemaking); see also MUR 4451/4473 Commission Statement of Reasons at 8-9 (Commission on Presidential Debates) (noting that Commission cannot reasonably “question[ ] each and every . . . candidate assessment criterion” but can evaluate “evidence that [such a] criterion was `fixed' or arranged in some manner so as to guarantee a preordained result”).

The petition and the commenters who support it rely primarily on policy arguments in favor of debate selection criteria that would include more candidates in general election presidential and vice presidential debates. The rule at section 110.13(c), however, is not intended to maximize the number of debate participants; it is intended to ensure that staging organizations do not select participants in such a way that the costs of a debate constitute corporate contributions to the candidates taking part. Corporate and Labor Organization Activity; Express Advocacy and Coordination with Candidates, 60 FR at 64261-62. Staging organizations' use of polling criteria is a reasonable way for a debate staging organization to select and “control the number of candidates participating in . . . a meaningful debate,” id., and to do so in a way that is objective and does not constitute a corporate contribution. A per se rule prohibiting the use of polling criteria is therefore not necessary to prevent debates from constituting unlawful contributions.

Furthermore, the rule at 11 CFR 110.13(c) already permits the use of criteria by staging organizations that could result in larger numbers of candidates participating in debates. Indeed, the specific criterion that the petition asks the Commission to include in a revised section 110.13(c) is already lawful: A debate staging organization has the discretion to stage a general election presidential or vice presidential debate using selection criteria similar to the Electoral College approach preferred by the petitioner (so long as the organization's reasonable selection criteria are pre-established, objective, and not designed to result in the selection of certain pre-chosen participants). No rule change is necessary to enable that approach, and the petitioner may sponsor a debate using such criteria or persuade a debate sponsor to do so.4

The petition sets forth certain data in support of its argument that the use of polling thresholds as a debate selection criterion by one staging organization “creates a hurdle that third-party and independent candidates cannot reasonably expect to clear,” and therefore is designed to result in the selection of certain pre-chosen participants. Petition at 15. The use of polling data by a single debate staging organization for candidate debates for a single office, however, does not suggest the need for a rule change. The Commission acknowledges that lower (or no) polling threshold selection criteria may open debates to more candidates and that polling thresholds could be used to promote or advance one candidate (or group of candidates) over another. But to the extent that a debate staging organization uses non-objective selection criteria “designed to result in the selection of certain pre-chosen participants,” this would already be unlawful under the Commission's existing regulation. Corporate and Labor Organization Activity; Express Advocacy and Coordination with Candidates, 60 FR at 64262.

Finally, the Commission notes that the petition focuses on and seeks to amend the rule only with respect to polling threshold criteria in the selection of participants for presidential general election debates. However, the candidate debate rule applies to all debates (primary and general election) “at the presidential, House, and Senate levels.” Funding and Sponsorship of Candidate Debates, 44 FR 39348 (July 5, 1979).5 In the absence of any indication that polling thresholds are inherently unobjective or otherwise unlawful as applied to all federal elections (and the Commission is aware of no such indication),6 the Commission declines to initiate a rulemaking that would impose a nationwide prohibition on the use of such thresholds, or that could result in giving different legal effect to the use of polling criterion in different elections.

For all of the above reasons, the Commission therefore declines to commence a rulemaking to amend the criteria for staging candidate debates in 11 CFR 110.13(c).

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.

We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.

Gulfstream Aerospace Corporation applied for several changes to Type Certificate No. T00015AT to install non-rechargeable lithium batteries in the Model GVI airplane. The Gulfstream Model GVI airplane is a twin-engine, transport-category airplane with a maximum passenger capacity of 19 and maximum takeoff weight of 99,600 pounds.

Under the provisions of Title 14, Code of Federal Regulations, (14 CFR) 21.101, Gulfstream must show that the design change and areas affected by the change continue to meet the applicable provisions of the regulations listed in Type Certificate No. T00015AT, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA. The regulations listed in the type certificate are commonly referred to as the “original type certification basis.” The regulations listed in Type Certificate No. T00015AT are 14 CFR part 25 effective February 1, 1965 including Amendments 25-1 through 25-120, 25-122, 25-124, and 25-132. The certification basis also includes certain special conditions, exemptions, and equivalent safety findings that are not relevant to these proposed special conditions.

In addition to the applicable airworthiness regulations and special conditions, the Gulfstream Model GVI airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Gulfstream Model GIV airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the Gulfstream Model GVI airplane model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.

A battery system consists of the battery and any protective, monitoring and alerting circuitry or hardware inside or outside of the battery and venting capability where necessary. For the purpose of these special conditions, we refer to a battery and battery system as a battery. The Gulfstream GVI will incorporate non-rechargeable lithium batteries, which are novel or unusual design features.

We derived the current regulations governing installation of batteries in transport-category airplanes from Civil Air Regulations (CAR) 4b.625(d) as part of the re-codification of CAR 4b that established 14 CFR part 25 in February 1965. We basically reworded the battery requirements, which are currently in § 25.1353(b)(1) through (b)(4), from the CAR requirements. Non-rechargeable lithium batteries are novel and unusual with respect to the state of technology considered when these requirements were codified. These batteries introduce higher energy levels into airplane systems through new chemical compositions in various battery-cell sizes and construction. Interconnection of these cells in battery packs introduces failure modes that require unique design considerations, such as provisions for thermal management.

Recent events involving rechargeable and non-rechargeable lithium batteries prompted the FAA to initiate a broad evaluation of these energy-storage technologies. In January 2013, two independent events involving rechargeable lithium-ion batteries demonstrated unanticipated failure modes. A National Transportation Safety Board (NTSB) letter to the FAA, dated May 22, 2014, which is available at http://www.ntsb.gov, filename A-14-032-036.pdf, describes these events.

On July 12, 2013, an event involving a non-rechargeable lithium battery, in an emergency locator transmitter installation, demonstrated unanticipated failure modes. Air Accident Investigations Branch Bulletin S5/2013 describes this event.

Some other known uses of rechargeable and non-rechargeable lithium batteries on airplanes include:

• Flight deck and avionics systems such as displays, global positioning systems, cockpit voice recorders, flight data recorders, underwater locator beacons, navigation computers, integrated avionics computers, satellite network and communication systems, communication-management units, and remote-monitor electronic line-replaceable units (LRU);

• Cabin safety, entertainment, and communications equipment, including life rafts, escape slides, seatbelt air bags, cabin management systems, Ethernet switches, routers and media servers, wireless systems, internet and in-flight entertainment systems, satellite televisions, remotes, and handsets;

• Systems in cargo areas including door controls, sensors, video surveillance equipment, and security systems.

Some known potential hazards and failure modes associated with non-rechargeable lithium batteries are:

In general, these batteries are significantly more susceptible to internal failures that can result in self-sustaining increases in temperature and pressure (i.e., thermal runaway) than their nickel-cadmium or lead-acid counterparts. The metallic lithium can ignite, resulting in a self-sustaining fire or explosion.

Fast discharging or an imbalanced discharge of one cell of a multi-cell battery may create an overheating condition that results in an uncontrollable venting condition, which in turn leads to a thermal event or an explosion.

Unlike nickel-cadmium and lead-acid batteries, these batteries use higher energy and current in an electrochemical system that can be configured to maximize energy storage of lithium. They also use liquid electrolytes that can be extremely flammable. The electrolyte, as well as the electrodes, can serve as a source of fuel for an external fire if the battery casing is breached.

Proposed Special Condition 1 requires that each individual cell within a battery be designed to maintain safe temperatures and pressures. Proposed Special Condition 2 addresses these same issues but for the entire battery. Proposed Special Condition 2 requires the battery be designed to prevent propagation of a thermal event, such as self-sustained, uncontrolled increases in temperature or pressure from one cell to adjacent cells.

Proposed Special Conditions 1 and 2 are intended to ensure that the battery and its cells are designed to eliminate the potential for uncontrolled failures. However, a certain number of failures will occur due to various factors beyond the control of the designer. Therefore, other special conditions are intended to protect the airplane and its occupants if failure occurs.

Proposed Special Conditions 3, 9, and 10 are self-explanatory, and the FAA does not provide further explanation for them at this time.

The FAA proposes Special Condition 4 to make it clear that the flammable-fluid fire-protection requirements of § 25.863 apply to non-rechargeable lithium battery installations. Section 25.863 is applicable to areas of the airplane that could be exposed to flammable fluid leakage from airplane systems. Non-rechargeable lithium batteries contain electrolyte that is a flammable fluid.

Proposed Special Condition 5 requires each non-rechargeable lithium battery installation to not damage surrounding structure or adjacent systems, equipment, or electrical wiring from corrosive fluids or gases that may escape. Proposed Special Condition 6 requires each non-rechargeable lithium battery installation to have provisions to prevent any hazardous effect on airplane structure or systems caused by the maximum amount of heat the battery installation can generate due to any failure of it or its individual cells. The means of meeting these proposed special conditions may be the same, but they are independent requirements addressing different hazards. Proposed Special Condition 5 addresses corrosive fluids and gases, whereas Proposed Special Condition 6 addresses heat.

Proposed Special Conditions 7 and 8 require non-rechargeable lithium batteries to have automatic means for battery disconnection and control of battery discharge rate due to the fast-acting nature of lithium-battery chemical reactions. Manual intervention would not be timely or effective in mitigating the hazards associated with these batteries.

These special conditions will apply to all non-rechargeable lithium battery installations in lieu of § 25.1353(b)(1) through (b)(4) at Amendment 25-113. Sections 25.1353(b)(1) through (b)(4) at Amendment 25-113 will remain in effect for other battery installations.

These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

As discussed above, these special conditions are applicable to the Gulfstream Model GVI airplane. Should Gulfstream apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability.

Accordingly, the FAA proposes the following special conditions as part of the type certification basis for Gulfstream Aerospace Corporation Model GVI airplanes.

In lieu of § 25.1353(b)(1) through (b)(4) at Amendment 25-113, each non-rechargeable lithium battery installation must:

1. Maintain safe cell temperatures and pressures under all foreseeable operating conditions to prevent fire and explosion.

2. Prevent the occurrence of self-sustaining, uncontrolled increases in temperature or pressure.

3. Not emit explosive or toxic gases, either in normal operation or as a result of its failure, that may accumulate in hazardous quantities within the airplane.

4. Meet the requirements of § 25.863.

5. Not damage surrounding structure or adjacent systems, equipment, or electrical wiring from corrosive fluids or gases that may escape.

6. Have provisions to prevent any hazardous effect on airplane structure or systems caused by the maximum amount of heat it can generate due to any failure of it or its individual cells.

7. Be capable of automatically controlling the discharge rate of each cell to prevent cell imbalance, back-charging, overheating, and uncontrollable temperature and pressure.

8. Have a means to automatically disconnect from its discharging circuit in the event of an over-temperature condition, cell failure or battery failure.

9. Have a failure sensing and warning system to alert the flightcrew if its failure affects safe operation of the airplane.

10. Have a means for the flightcrew or maintenance personnel to determine the battery charge state if the battery's function is required for safe operation of the airplane.

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2015-5809; Directorate Identifier 2015-NM-055-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

On September 13, 2006, we issued AD 2006-19-12, Amendment 39-14769 (71 FR 55727, September 25, 2006), for certain Boeing Model 777-200 and -300 series airplanes. AD 2006-19-12 requires inspecting the lower web of the aft fairing of engine struts for any discoloration and doing any related investigative and corrective action if necessary; inspecting the heat shield castings for any damage and doing any corrective action if necessary; installing gap cover strips; and replacing insulation blankets with new insulation blankets. AD 2006-19-12 resulted from a report that several discolored fairing lower webs and some damaged/deteriorated insulation blankets were found in the aft fairings of engine struts. We issued AD 2006-19-12 to prevent cracking of lower webs of the aft fairings, which could result in flammable hydraulic fluid leaking onto or near an ignition source, and possibly result in an uncontrollable fire in the engine strut area.

Since we issued AD 2006-19-12, Amendment 39-14769 (71 FR 55727, September 25, 2006), we have received a report that an aft fairing lower spar web exceeded the allowable conductivity limits. An investigation concluded that wear to the pan casting and gap cover strips allowed increased heat into the aft fairing heat shield cavity, which exceeded the thermal capability of the insulation blankets.

We have reviewed Boeing Service Bulletin 777-54-0026, Revision 2, dated January 5, 2012. The service information describes procedures for a detailed inspection of the gap cover strips and heat shield pan castings for damage, corrective actions, and installation of new gap cover strip fillers, new velcro strips, and new aft fairing insulation blankets.

We reviewed Boeing Special Attention Service Bulletin 777-54-0038, dated March 6, 2015. The service information describes procedures for one-time and repetitive detailed inspections for any cracking and deformation, as applicable, of the aft fairing lower structure; conductivity inspections of the aft fairing lower structure; and related investigative and corrective actions.

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

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would retain all requirements of AD 2006-19-12, Amendment 39-14769 (71 FR 55727, September 25, 2006). In addition, this proposed AD would add airplanes to the applicability of this AD. This proposed AD would also require accomplishing the actions specified in the service information described previously.

The phrase “related investigative actions” is used in this proposed AD. “Related investigative actions” are follow-on actions that (1) are related to the primary action, and (2) further investigate the nature of any condition found. Related investigative actions in an AD could include, for example, inspections.

The phrase “corrective actions” is used in this proposed AD. “Corrective actions” are actions that correct or address any condition found. Corrective actions in an AD could include, for example, repairs.

Since AD 2006-19-12, Amendment 39-14769 (71 FR 55727, September 25, 2006) was issued, the AD format has been revised, and certain paragraphs have been rearranged. As a result, the corresponding paragraph identifiers have been redesignated in this proposed AD, as listed in the following table:

We estimate that this proposed AD affects 99 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

We estimate the following costs to do any necessary related investigative and corrective actions that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need these inspections and replacements:

According to the manufacturer, all of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

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

For the reasons discussed above, I certify that the proposed regulation:

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

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

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

Background

On July 6, 2012, President Obama signed into law MAP-21 (Pub. L. 112-141, 126 Stat. 405), which contains new requirements that FHWA and FTA, hereafter referred to as the “Agencies,” must meet in complying with NEPA (42 U.S.C. 4321 et seq.), as well as a requirement to initiate a rulemaking to allow for the use of programmatic approaches. 23 U.S.C. 139(b)(3)(A). Through this NPRM, the Agencies propose to revise their regulations that implement NEPA at 23 CFR part 771—Environmental Impact and Related Procedures, and 23 U.S.C. 138 and 49 U.S.C. 303 (hereafter referred to as Section 4(f) 1 ) at 23 CFR part 774—Parks, Recreation Areas, Wildlife and Waterfowl Refuges, and Historic Sites. The proposed revisions would reflect MAP-21 requirements and better reflect current Agency practice, as well as improve readability consistent with Executive Order 13563, “Improving Regulation and Regulatory Review” (2011).

The following bullets are sections of MAP-21 that affect 23 CFR parts 771 and 774; the list does not include the sections of MAP-21 that have been the subject of other rulemakings:

• Section 1119(c)(2) revised the Section 4(f) exception for park road and parkway projects to apply to Federal lands transportation facilities, which affects the Section 4(f) exception in 774.13(e);

• Section 1122 replaced the former “transportation enhancement projects program” with a new “transportation alternatives projects program,” which affects the Section 4(f) exception in 774.13(g);

• Section 1302 amended 23 U.S.C. 108 to address advance acquisition of real property interests, which affects the timing of administrative activities in section 771.113;

• Section 1305 amended 23 U.S.C. 139(b)-(e) concerning programmatic approaches for environmental reviews; the Secretary's designation of lead Federal agency for projects with more than one modal administration; participating agency roles and responsibilities; and project initiation information, which affects early coordination, public involvement, and project development as described in section 771.111;

• Section 1315 expanded the emergency actions covered by categorical exclusion (CE), which were addressed in a previous rulemaking, but also affected information in section 771.131, emergency action procedures, which are addressed in this rule;

• Section 1319 provided for the preparation of a final environmental impact statement (EIS) using errata sheets in certain circumstances and requiring the combination of final EISs with records of decision (ROD) to the maximum extent practicable if certain circumstances are met. This requirement affects definitions in § 771.107 as well as final EISs and RODs in §§ 771.125 and 771.127, respectively;

• Section 1320(d) provided a definition of “early coordination activities;”

• Section 20003 amended 49 U.S.C. 5301 and struck minimization of environmental impacts from the statement of policies and purposes so the reference to section 5301 has been removed from § 771.101;

• Section 20016 amended 49 U.S.C. 5323 by striking requirements for public review and comment and public hearings for capital projects that will not substantially affect a community or its public transportation service, which affects references in §§ 771.101 and 771.125; and

• Section 20017 amended 49 U.S.C. 5324 by striking requirements for findings of no significant impacts (FONSI) and RODs to have a written statement that no adverse environmental effect is likely from the project or no reasonable and prudent alternative exists and all attempts have been made to minimize effects, which affects a reference in § 771.125.

In addition to the proposed MAP-21-related changes, this proposed rule includes other proposed changes to provide clarification and guidance. All proposed changes are discussed in the next section.

The Agencies propose to remove outdated references from and include new references in § 771.101 in accordance with MAP-21. The Agencies propose to revise the last sentence in section 101 to include MAP-21 references and updated U.S. Code references: “This regulation also sets forth procedures to comply with 23 U.S.C. 109(h), 128, 138, 139, 325, 326, 327; 49 U.S.C. 303, and 5323(q); and Pub. L. 112-141, 126 Stat. 405, sections 1301, and 1319.”

The Agencies propose no changes to section 771.103 in this NPRM.

The Agencies propose to remove references to specific guidance documents in the footnote to paragraph (a). The revised footnote would continue to refer to the Agencies' Web sites for the most recent guidance documents. These changes will allow the regulation to stay current as the Agencies release new guidance documents.

The Agencies propose to add a new paragraph (b) to support development of programmatic approaches consistent with MAP-21 Section 1305(a) (23 U.S.C. 139(b)): it is the Administration's policy that “[p]rogrammatic approaches be developed for compliance with environmental requirements, coordination among agencies and/or the public, or to otherwise enhance and accelerate project development.” Addressing programmatic approaches in this section and under a separate paragraph refects the Agencies' intent to encourage their broader use.

With the addition of proposed paragraph (b), current paragraphs (b), (c), (d), (e), and (f) would be re-lettered as paragraphs (c), (d), (e), (f), and (g), respectively. The Agencies propose no change in wording to any of these paragraphs.

The Agencies propose to modify the first sentence of the definition of “Administration action” from passive voice to active voice without losing the original intent of the definition: “FHWA or FTA approval of the applicant's request for Federal funds for construction.” The rest of the definition would not change.

The Agencies propose to modify the definition of “applicant” by adding the word “Federal” to include Federal governmental units as potential applicants. This change would provide for instances when the Federal Lands program is an FHWA applicant.

The Agencies propose to add a definition for “programmatic approaches” to § 771.107 consistent with MAP-21 Section 1305(a) (23 U.S.C. 139(b)). The proposed definition is “an approach that reduces the need for project-by-project reviews, eliminates repetitive discussion of the same issue, or focuses on the actual issues ripe for analyses at each level of review, while maintaining appropriate consideration for the environment” and is taken in large part from 23 U.S.C. 139(b)(3)(A). The Agencies do not propose adding or deleting any other definitions.

The Agencies propose to modify the definition of “Project sponsor” by adding “Federal funding” to the definition and clarifying that the project sponsor, if not the applicant, may conduct some of the activities on behalf of the applicant. This change would slightly broaden the definition of project sponsor and make it consistent with other parts of the regulation, as well as clarify that the project sponsor and the applicant are not always one and the same entity. The proposed revised definition is “[t]he Federal, State, local, or federally-recognized Indian tribal governmental unit, or other entity, including any private or public-private entity that seeks Federal funding or an Administration action for a project. The project sponsor, if not the applicant, may conduct some of the activities on behalf of the applicant.”

The Agencies propose to modify the definition of “Section 4(f)” to include a reference to the current implementing regulations for Section 4(f) (23 CFR part 774), and to delete footnote 2, which is discussed in 23 CFR part 774.

Structurally, the Agencies propose reorganizing the definitions within this section by organizing them in alphabetical order and removing the lettering of paragraphs. This change is consistent with other regulations (e.g., 23 CFR part 774), and will aid reader comprehension, as definitions are typically in alphabetical order. In addition, this change would reduce future associated formatting changes to the regulation should definitions be added or removed.

The Agencies propose several changes to § 771.109 that provide greater clarity on Agency, project sponsor, and applicant responsibilities, as well as improve the organizational structure of the section. For example, the Agencies propose to reorganize paragraph (b) by renumbering it as paragraph (b)(1) and to modify the language of proposed paragraph (b)(1) by adding the phrase “unless the Administration approves of their deletion or modification in writing” to the end of the first sentence. This text is not new; the Agencies propose to move this concept from the last clause in paragraph (d) of this section and revise the language to be in active voice, clarifying that the Administration performs the action (i.e., the Agencies will approve of any deletions or modifications of mitigation measures previously committed to in the environmental documents prepared pursuant to this regulation). In addition to that change, the Agencies propose to modify the language of proposed paragraph (b)(1) by clarifying the responsibilities of FHWA in the second sentence. The current phrase, “program management,” would be replaced with “stewardship and oversight,” and the phrase, “that include reviews of designs, plans, specifications, and estimates (PS&E), and construction inspections,” would be deleted. The Agencies propose this change to reflect the customary practice and responsibilities of FHWA. In summary, paragraph (b)(1) would read, “The applicant, in cooperation with the Administration, is responsible for implementing those mitigation measures stated as commitments in the environmental documents prepared pursuant to this regulation unless the Administration approves of their deletion or modification in writing. The FHWA will assure that this is accomplished as a part of its stewardship and oversight responsibilities. The FTA will assure implementation of committed mitigation measures through incorporation by reference in the grant agreement, followed by reviews of designs and construction inspections.”

The Agencies propose creating a new paragraph (b)(2) that reaffirms FHWA's commitment to ensuring that the State highway agency with which it partners fulfills all environmental commitments as listed in approved environmental review documents. The language found in proposed paragraph (b)(2) was previously found in section 771.109(d), though the last clause of paragraph (d) was added to paragraph (b)(1) as explained above. The Agencies moved the language to its new position in paragraph (b)(2) in order to improve the logical sequence of the section; paragraphs (b)(1) and (b)(2) both address mitigation measures.

The Agencies propose to add a new paragraph (c)(7) that clarifies the responsibility of a participating agency: “[a] participating agency is responsible for providing input, as appropriate, during the times specified in the coordination plan under 23 U.S.C. 139(g), and providing comments and concurrence on a schedule if included within the coordination plan.” This change is proposed in accordance with MAP-21 Section 1305(e) (23 U.S.C. 139(g)(1)(B)(i)).

As noted in the discussion above, the Agencies propose to delete paragraph (d), as these responsibilities are now articulated through revisions to paragraph (b)(1) and in proposed new paragraph (b)(2).

Upon review of § 771.111, the Agencies found the beginning of the section to be out of logical order. The Agencies propose to reorganize paragraph (a) into three subparagraphs, keeping much of the same information: Paragraph (a)(1) addresses early coordination activities; paragraph (a)(2) covers the transportation planning process in relation to the environmental review process; and paragraph (a)(3) remains focused on class of action identification. The proposed new sentence in paragraph (a)(1) would discuss the benefits of early coordination activities: “These [early coordination] activities contribute to reducing or eliminating delay, duplicative processes, and conflict by incorporating planning outcomes that have been reviewed by agencies and Indian tribal partners in project development.” The Agencies developed this language after considering the language in section 1320(a)(1) of MAP-21, which essentially contains the goals of early coordination. Early coordination activities include: (1) Technical assistance on identifying potential impacts and mitigation issues; (2) the potential appropriateness of using planning products and decisions in later environmental reviews; and (3) the identification and elimination from detailed study in the environmental review process of the issues that are not significant or that have been covered by prior environmental reviews (for the list of activities, see MAP-21 Section 1320(d)). The Agencies propose deleting the second sentence currently in paragraph (a)(1) (“This involves the exchange of information from the inception of a proposal for action to preparation of the environmental review documents.”) because it is duplicative of the concepts addressed in paragraph (a)(2) (now proposed paragraph (a)(2)(i)).

The Agencies propose modifying current paragraph (a)(2) by renumbering it as paragraph (a)(2)(i) and updating the citations to read “40 CFR parts 1500 through 1508, 23 CFR part 450, or 23 U.S.C. 168” in order to be more encompassing of the referenced statute and regulations. In addition, a new paragraph (a)(2)(ii) would address the inclusion of mitigation actions in the planning process: “The planning process described in paragraph (a)(2)(i) may include mitigation actions consistent with a programmatic mitigation plan developed pursuant to 23 U.S.C. 169 or from a programmatic mitigation plan developed outside of that framework.” Programmatic mitigation plans are the subject of a separate on-going MAP-21 rulemaking action (see 79 FR 31784, June 2, 2014); in the event the Agencies publish a final rule, the Agencies would revise the proposed paragraph (a)(2)(ii) text to include a reference to the applicable regulation. The Agencies propose including the reference to programmatic mitigation plans to further encourage the link between the planning and environmental processes.

Finally, paragraph (a)(3) would include the class of action identification language currently found in the last two sentences of paragraph (a)(1): “Applicants intending to apply for funds should notify the Administration at the time that a project concept is identified. When requested, the Administration will advise the applicant, insofar as possible, of the probable class of action (see 23 CFR 771.115) and related environmental laws and requirements and of the need for specific studies and findings that would normally be developed during the environmental review process.” Generally, this is a non-substantive change in that most of the information found in proposed new paragraph (a)(3) comes from the current paragraph (a)(1). But the Agencies clarified that the Administration may advise applicants of the need for specific studies and findings that would normally be developed during the environmental review process by replacing “concurrently with” with “during,” and “documents” with “process.” The Agencies want to highlight through these changes that the focus is on the environmental review process, not documents, and the studies and findings performed are completed as part of the process.

In paragraph (c), the Agencies propose to replace the word “project” with “action” to be consistent within 23 CFR part 771 and to more accurately reflect the work of the Agencies, which is not solely devoted to projects but to actions taken in advancement of projects. “Action” is defined in section 771.107.

In paragraph (d), the Agencies propose to delete the outdated footnote (footnote 4): “The FHWA and FTA have developed guidance on 23 U.S.C. Section 139 titled “SAFETEA-LU Environmental Review Process: Final Guidance,” November 15, 2006, and available at http://www.fhwa.dot.gov or in hard copy upon request.” The Agencies are updating the guidance regarding section 139 to reflect MAP-21 changes and may update the guidance in response to future transportation bills. In order to maximize the flexibility of these regulations, the Agencies propose deleting the specific reference to the 2006 document.

In paragraph (e), the Agencies propose to revise the second sentence to read: “The Administration will provide direction to the applicant on how to approach any significant unresolved issues as early as possible during the environmental review process.” This replaces the provision that the “Administration will prepare a written evaluation of any significant unresolved issues.” The change reflects current practice and is consistent with the responsibilities of the Agencies. The Agencies also replaced the references to environmental assessments and draft EIS documents with the broader term “environmental review process” because the Agencies may provide direction on any class of action. Although a CE will not have significant unresolved issues, the Agencies could provide early input on an action with significant unresolved issues that allow for the use of a CE.

Paragraph (f) would notably be modified to include CEs. The Agencies propose replacing “In order to ensure meaningful evaluation of alternatives and to avoid commitments to transportation improvements before they are fully evaluated, the action evaluated in each EIS or finding of no significant impact (FONSI) shall:” with “Any action evaluated through a categorical exclusion (CE), environmental assessment (EA), or environmental impact statement (EIS) shall:”. This change would clarify that actions evaluated in a CE, EA, or EIS must comply with NEPA requirements related to connected actions and segmentation, per 40 CFR 1508.25. The Agencies recognize that projects cannot be segmented improperly, regardless of the NEPA class of action; any action evaluated must have independent utility, connect logical termini when applicable (i.e., linear facilities), and not restrict consideration of alternatives for other reasonably foreseeable transportation improvements. The Agencies have presented this guidance in recent rulemakings (e.g., 79 FR 60100, October 6, 2014 and 79 FR 2107, January 13, 2014). For consistency, the term “FONSI” would be removed from the list and replaced with “EA.”

The Agencies propose to delete the outdated footnote in paragraph (h)(2)(viii) regarding Section 4(f) guidance (“The FHWA and FTA have developed guidance on Section 4(f) de minimis impact findings titled “Guidance for Determining De Minimis Impacts to Section 4(f) Resources,” December 13, 2005, which is available at http://www.fhwa.dot.gov or in hard copy upon request.”) as de minimis guidance is now included in the Section 4(f) Policy Paper, available at http://www.environment.fhwa.dot.gov/4f/4fpolicy.pdf.

The Agencies propose a number of non-substantive modifications to paragraph (i) in subparagraphs (1), (3), and (4). Subparagraph (1) would be modified to improve readability and improve understanding. The term “projects” would be replaced with “actions” to better reflect the work of the Agencies in two places, and the first sentence would be changed to reflect that scoping is about the environmental review “process,” not simply about “documents.” In addition, the Agencies propose to remove the last sentence, “For other projects that substantially affect the community or its public transportation service, an adequate opportunity for public review and comment must be provided,” because the support for the statement (i.e., 49 U.S.C. 5323) was repealed by MAP-21 Section 20016, and the opportunity for the public to review EA and EIS documents is provided for in sections 771.119 (EA) and 771.123 (draft EIS). In subparagraph (3), the Agencies would modify the first sentence to provide examples of “NEPA documents” by adding “(e.g., EAs and EISs),” and would add “environmental studies (e.g., technical reports)” and “meeting” minutes to the list of potential information and material that the Agencies encourage applicants for capital assistance in the FTA program to post and distribute to enhance public involvement. Finally, in subparagraph (4), the Agencies would clarify and update the list of materials FTA encourages applicants in the FTA program to post on a project Web site until the project is constructed and open for operation. This list would include FONSIs, combined final EIS/RODs, and RODs. This sentence would now read: “Are encouraged to post all findings of no significant impact (FONSI), combined final environmental impact statement (EIS)/records of decision (ROD), and RODs on a project Web site until the project is constructed and open for operation.”

Paragraph (j) would be modified to include updated contact information for FTA, and the Web site address for each Agency. These changes are meant simply to provide complete contact information for both Agencies.

The Agencies propose modest changes to each of the four paragraphs in § 771.113. In paragraph (a), the Agencies propose revising the paragraph by replacing the phrase “(if not a lead agency)” with “and project sponsor as appropriate,” in the first sentence. This change recognizes that the applicant and the project sponsor are not always the same entity and may not be identified as “lead agencies,” but they may work with the lead agencies to “perform the work necessary to complete the environmental review process.” As noted in the previous sentence, the Agencies would also revise the sentence by replacing the text, “a finding of no significant impact (FONSI) or a record of decision (ROD) and comply with other related environmental laws and regulations to the maximum extent possible during the NEPA process” with the text, “the environmental review process.” This modification changes the focus from the completion of a FONSI or a ROD to the completion of the environmental review process, which is a broader term and more accurately reflects the Agencies' goals. In addition, the Agencies propose revising the second sentence to more clearly provide examples of work that takes place during the review process. This sentence would be changed from, “This work includes environmental studies, related engineering studies, agency coordination and public involvement” to “This work includes drafting environmental documents and completing studies, related engineering studies, agency coordination, and public involvement.” Finally, the Agencies propose reorganizing the last sentence to bring the exception clause forward to lend greater reader comprehension; there is no content change to the last sentence.

In subparagraph (a)(1), the Agencies propose to update the document types that indicate the environmental review process is complete. In (a)(1)(i), the Agencies would simply use “CE.” In paragraph (a)(1)(ii), the Agencies would reword the sentence to make clear that the Administration issues a FONSI by replacing passive language with active language and by adding the text “The Administration has issued a” before “FONSI” and deleting “has been approved.” In paragraph (a)(1)(iii), the Agencies would replace the text, “A final EIS has been approved and available for the prescribed period of time and a record of decision has been signed” with “The Administration has issued a combined final EIS/ROD or a final EIS and ROD.” This change would be in compliance with MAP-21 Section 1319.

Paragraph (b) would be reworded to clarify that it applies to FHWA alone. The phrase “For activities proposed for FHWA action” would be added to the beginning of the sentence.

In paragraph (d), the Agencies propose several modifications pursuant to MAP-21, including MAP-21 Section 1302 (and as implemented in 23 CFR part 710, subpart E, Property Acquisition Alternatives), MAP-21 Section 20008, and MAP-21 Section 20016. Generally, final design activities, property acquisition, purchase of construction materials or rolling stock, or project construction cannot proceed until the proposed action has been classified as a CE or a decision document has been issued. Exceptions to that prohibition, however, are found in paragraph (d). The Agencies propose modifying the text for subparagraph (d)(1) to read, “Early acquisition, hardship and protective acquisitions of real property in accordance with 23 CFR part 710, subpart E for FHWA.” This exception refers the reader to FHWA property acquisition regulations for the acquisition compliance requirements. The FTA's existing exception in subparagraph (d)(1) (i.e., the second sentence) would not change. To summarize, this subparagraph states that acquisition of land for hardship or protective purposes may occur prior to the completion of NEPA for Agency actions. Subparagraph (d)(2) pertains to FTA only; the text, revised as proposed, would no longer refer to FTA's “acquisition of right-of-way” CE, specifically, but would refer to the broader corridor preservation statute and guidance, pursuant to MAP-21 Section 20016. The proposed text for subparagraph (d)(2) would read: “The early acquisition of right-of-way for future transit use in accordance with 49 U.S.C. 5323(q) and FTA guidance.” The Agencies propose deleting subparagraphs (d)(3) and (d)(4) because the proposed language in subparagraph (d)(1) broadly encompasses 23 CFR part 710; therefore, the current references to 23 CFR 710.503 and 23 CFR 710.501 would no longer be necessary. Finally, subparagraph (d)(5) would be renumbered as subparagraph (d)(3), and the statutory reference at the end of the sentence would be updated to reflect changes to 49 U.S.C. 5309 by MAP-21 Section 20008: “A limited exception for rolling stock is provided in 49 U.S.C. 5309(l)(6).” These are non-substantive changes.

The Agencies propose several minor modifications to § 771.115 to clarify this section. In the introductory paragraph, the Agencies would add the sentence “A programmatic approach may be used for any class of action” to be consistent with MAP-21 Section 1305 (23 U.SC. 139(b)).

In paragraph (a), the Agencies would move the acronym “EIS” to the beginning of the sentence and move “Class 1” to parentheses to aid in readability.

Paragraph (a) states that “actions that significantly affect the environment require an EIS” and provides examples of actions that normally require an EIS in the subsequent subparagraphs. In subparagraph (a)(3), FTA proposes to modify the current example, “Construction or extension of a fixed transit facility (e.g., rapid rail, light rail, commuter rail, bus rapid transit) that will not be located within an existing transportation right-of-way,” by inserting the term “primarily” before “within an existing transportation right-of-way.” This addition would be in response to FTA's recent revisions to its list of CEs since 2012, including the “assembly or construction of facilities” CE (23 CFR 771.118(c)(9)). The FTA has categorically excluded some actions from requiring an EIS or EA when they take place primarily or entirely within existing transportation right-of-way; therefore, FTA proposes adding “primarily” to subparagraph (a)(3) in order to distinguish clearly that actions not primarily within existing transportation right-of-way will normally require an EIS.

In subparagraph (a)(4), the Agencies would add “For FHWA actions” to the beginning of the sentence, but no other modifications are proposed to the subparagraph: “For FHWA actions, new construction or extension of a separate roadway for buses or high occupancy vehicles not located within an existing highway facility.” The Agencies propose this change because the Agencies propose adding a new subparagraph (a)(5) to reflect FTA actions. The subparagraph (a)(5) language would be similar to subparagraph (a)(4) language, but it would not refer to high occupancy vehicles because they are not typically part of the FTA program. In addition, the subparagraph would include the “not located primarily within an existing transportation right-of-way” condition (emphasis added) to reflect FTA's program, as discussed above for subparagraph (a)(3). Proposed subparagraph (a)(5) would read: “For FTA actions, new construction or extension of a separate roadway for buses not located primarily within an existing transportation right-of-way.”

As the Agencies propose for paragraph (a), the Agencies propose moving the acronym for CEs to the beginning of the sentence in paragraph (b), and moving the acronym for EAs to the beginning of the sentence in paragraph (c) to aid in readability, followed by their class in parentheses. Finally, the Agencies propose to slightly reword the first sentence in paragraph (c) to clarify that it is the Administration's responsibility to determine the significance of the environmental impact, and where significance is not clearly established, then an EA would be the appropriate class of action. The first sentence in paragraph (c) would read, “Actions in which the Administration has not clearly established the significance of the environmental impact.”

The Agencies propose no changes to § 771.117 in this NPRM.

The Agencies propose no changes to § 771.118 in this NPRM.

The Agencies propose modifications to paragraphs (a) through (f) and paragraph (h) in § 771.119. In paragraph (a), the Agencies would revise the first sentence from passive voice to active voice. It would instead read as, “The applicant shall prepare an EA. . .” This would make it clear that it is the applicant's responsibility to prepare an EA. In addition, the Agencies would reorganize the paragraph as subparagraph (a)(i). This change would aid in readability. It would also support a second proposed modification to paragraph (a): New subparagraph (a)(ii).

The Agencies propose adding a new subparagraph (a)(ii) that would apply to FTA actions alone. Subparagraph (a)(ii) would read, “For FTA actions: When FTA or the applicant, as joint lead agency, select a contractor to prepare the EA, then the contractor shall execute an FTA conflict of interest disclosure statement. The statement must be maintained in the FTA Regional Office and with the applicant. The contractor's scope of work for the preparation of the EA will not be finalized until the early coordination activities or scoping process found in paragraph (b) is completed (including FTA approval, in consultation with the applicant, of the scope of the EA content).” This new subparagraph would address two issues. First, it would specify that if the applicant selects a contractor to prepare the EA, the contractor must execute an FTA conflict of interest disclosure statement (statement) attesting to the lack of a conflict of interest in the NEPA process, pursuant to 40 CFR 1506.5. The Agencies propose that the statement must be maintained in the FTA Regional Office and with the applicant. This addition to our regulation is not a major change from how FTA and its applicants currently prepare EAs, but it updates our regulation to reflect current practice. Second, proposed subparagraph (a)(ii) would require that the contractor's scope of work for the preparation of the EA not be finalized until the early coordination activities or scoping process found in paragraph (b) has been completed. Under this proposal, the contractor's scope of work would not be finalized until FTA and the applicant have approved the scope, in terms of NEPA, of the EA analysis and documentation. This addition would emphasize the importance that FTA places on early coordination activities and scoping for its NEPA documents, with the goal being more refined analyses that focus on significant issues rather than all potential impacts. Although scoping as a formal process is associated with EISs, a less formal type of scoping may be conducted for projects evaluated with EAs. Regardless of the form early coordination takes, FTA believes this addition will lead to better decisionmaking and documentation. Note, the language proposed for subparagraph (a)(ii) is similar to language proposed in a previous NPRM (see 77 FR 15310, March 15, 2012), but the language was never finalized. The FTA considered the comments received during the previous NPRM comment period when developing the language proposed in this rule.

In paragraph (b), the Agencies would revise the last two sentences regarding early coordination activities to read, “The applicant shall accomplish this through early coordination activities or through a scoping process. The applicant shall summarize the public involvement process and include the results of agency coordination in the EA.” The Agencies changed the reference from “an early coordination process (i.e., procedures under § 771.111)” to “early coordination activities” for consistency with other early coordination references proposed in this rule and MAP-21 Section 1320. The Agencies modified the last sentence by (1) revising language from passive voice to active voice and (2) identifying the applicant as the entity responsible for summarizing the public involvement process and including the results of agency coordination in the EA, which reflects current practice.

In paragraph (c), the Agencies would revise the sentence to clearly state in a reader-friendly manner that the Administration must approve the EA before it is made available to the public. Paragraph (c) would read: “The Administration must approve the EA before it is made available to the public as an Administration document.”

In paragraph (d), the Agencies would revise the text from passive voice to active voice, clearly identify the responsibilities of the applicant, and make this paragraph easier to read and understand overall. Paragraph (d) would read: “The applicant does not need to circulate the EA for comment but the document must be made available for public inspection at the applicant's office and at the appropriate Administration field offices in accordance with paragraphs (e) and (f) of this section. The applicant shall send the notice of availability of the EA, which briefly describes the action and its impacts, to the affected units of Federal, State, and local government. The applicant shall also send notice to the State intergovernmental review contacts established under Executive Order 12372.” Other than clearly identifying the applicant's role in this paragraph, there are no changes regarding content.

In paragraph (e), the Agencies would revise the first sentence by changing the text from “as part of the application for Federal funds” to “as part of the environmental review process for an action.” This change more accurately reflects current practice and is consistent with other changes proposed in this rule (e.g., use of “environmental review process” and “action”). In addition, the Agencies propose revising the second and third sentence of paragraph (e) by clarifying the applicant's role in providing notice of the public hearing and availability of the EA and clarifying when comments are accepted on the EA, respectively. The second and third sentences of paragraph (e) would read: “The applicant shall publish a notice of the public hearing in local newspapers that announces the availability of the EA and where it may be obtained or reviewed. Any comments must be submitted in writing to the applicant or the Administration during the 30-day availability period of the EA unless the Administration determines, for good cause, that a different period is warranted.” These changes are minor but improve the quality of the written language.

The Agencies propose revising the last sentence in paragraph (f) to reflect the changes proposed for the last sentence in paragraph (e) regarding comment submittal during the EA public availability period. Paragraph (f) would read: “When a public hearing is not held, the applicant shall place a notice in a newspaper(s) similar to a public hearing notice and at a similar stage of development of the action, advising the public of the availability of the EA and where information concerning the action may be obtained. The notice shall invite comments from all interested parties. Any comments must be submitted in writing to the applicant or the Administration during the 30-day availability period of the EA unless the Administration determines, for good cause, that a different period is warranted.” This is a non-substantive change proposed for consistency between paragraphs.

Lastly, the Agencies propose to limit paragraph (h) to FHWA actions only by replacing “Administration” with “FHWA” at the beginning of the paragraph. For FTA project sponsors, application of the Council on Environmental Quality's (CEQ) regulatory provision alone aligns better with how transit projects are planned, developed, and reviewed. The FTA would direct its applicants and project sponsors to rely on the CEQ NEPA Implementing Regulations, specifically 40 CFR 1501.4(e)(2), which requires that in certain circumstances the FONSI be available for public review for 30 days before FTA makes its final determination and before the action may begin. This requirement applies when the proposed action is (or is closely similar to) one that normally requires the preparation of an EIS pursuant to § 771.115, or when the nature of the proposed action is one without precedent.

The Agencies propose minor text revisions to all three paragraphs in § 771.121. In paragraph (a), the Agencies propose to reword the first sentence to reflect existing practice: “The Administration will review the EA, comments submitted on the EA (in writing or at public hearings/meetings), and other supporting documentation, as appropriate.” This is a non-substantive change and is meant to improve readability.

Similarly, in paragraph (b), the Agencies propose to reword the first sentence in active voice and to make it clear to the reader that the Administration issues a FONSI. The first sentence would be rewritten to read, “After the Administration issues a FONSI . . .” This non-substantive change does not affect the responsibility of the Administration in issuing a FONSI, and it does not affect the applicant's responsibility in providing notice of availability of the FONSI to affected units of Federal, State, and local government or any other responsibilities noted within this section.

In paragraph (c), the Agencies propose a slight modification to include those times when the Administration may have an approval role for another Federal agency's action (e.g., when FHWA issues Interstate Access Point Approval). The modification would add “or approval” after “Administration funding” in the first sentence: “If another Federal agency has issued a FONSI on an action which includes an element proposed for Administration funding or approval . . .” In these rare situations, the Administration would evaluate the other agency's “EA/FONSI” (replacing the term “FONSI” at the end of the first sentence) in determining whether to issue its own FONSI incorporating the other agency's “EA/FONSI” (again, replacing the term “FONSI” but at the end of the second sentence). The Administration could also issue a CE for the element of the project proposed for Administration funding or approval if it determines that a CE would be appropriate.

The Agencies propose a number of modifications to § 771.123. In paragraph (b), the Agencies would revise the language in the first sentence to reference CEQ's NEPA Implementing Regulations (40 CFR parts 1500 through 1508), and replace “which” with “that.” In addition, the Agencies propose deleting the reference to the FHWA in the third sentence and deleting the fourth sentence pertaining to FTA; the revised third sentence would apply to both Agencies. The Agencies propose paragraph (b) read: “After publication of the Notice of Intent, the lead agencies, in cooperation with the applicant (if not a lead agency), will begin a scoping process that may take into account any planning work already accomplished, in accordance with 23 CFR 450.212, 450.318, or any applicable provisions of the CEQ regulations at 40 CFR parts 1500 through 1508. The scoping process will be used to identify the purpose and need, the range of alternatives and impacts, and the significant issues to be addressed in the EIS and to achieve the other objectives of 40 CFR 1501.7. Scoping is normally achieved through public and agency involvement procedures required by § 771.111. If a scoping meeting is to be held, it should be announced in the Administration's Notice of Intent and by appropriate means at the local level.” These minor changes would update the text to be more encompassing of the environmental review requirements and more readable.

In paragraph (d), the Agencies would add language requiring a conflict of interest disclosure for FTA actions. This change would be consistent with proposed modifications to section 771.119(a)(ii) and 40 CFR 1506.5(c). Paragraph (d) would read, “Any of the lead agencies may select a consultant to assist in the preparation of an EIS in accordance with applicable contracting procedures and with 40 CFR 1506.5(c). For FTA actions: When FTA or the applicant, as joint lead agency, select a contractor to prepare the EIS, then the contractor shall execute an FTA conflict of interest disclosure statement. The statement must be maintained in the FTA Regional Office and with the applicant. The contractor's scope of work for the preparation of the EIS will not be finalized until the early coordination activities or scoping process found in paragraph (b) is completed (including FTA approval, in consultation with the applicant, of the scope of the EIS content).” See the discussion above in § 771.119 for a more robust discussion regarding this proposed addition.

The Agencies propose to add a new paragraph (e). Proposed new paragraph (e) would encourage identification of the preferred alternative in the draft EIS: “The draft EIS should identify the preferred alternative to the extent practicable. If the draft EIS does not identify the preferred alternative, the Administration should provide agencies and the public with an opportunity after issuance of the draft EIS to review the impacts.” This addition would update the regulations in response to changes created by MAP-21 Section 1319 and is consistent with the Agencies' “Interim Guidance on MAP-21 Section 1319 Accelerated Decisionmaking in Environmental Reviews” (January 14, 2013) (“Section 1319 Guidance”). It would also provide for the cases where the preferred alternative is not identified in the draft EIS. Section 1319(b) directs the lead agency, to the maximum extent practicable, to expeditiously develop a single document that consists of a final EIS and ROD, unless certain conditions exist. By identifying the preferred alternative in the draft EIS, the lead agencies more easily facilitate issuance of a combined final EIS/ROD document.

The Agencies would also add a new paragraph (f). Proposed new paragraph (f) would allow the lead agency to develop the preferred alternative (or portion thereof) for a project to a higher level of detail than other alternatives in order to facilitate the development of mitigation measures or compliance with requirements for permitting: “At the discretion of the lead agency, the preferred alternative (or portion thereof) for a project, after being identified, may be developed to a higher level of detail than other alternatives in order to facilitate the development of mitigation measures or compliance with requirements for permitting. The development of such higher level of detail must not prevent the lead agency from making an impartial decision as to whether to accept another alternative that is being considered in the environmental review process.” This concept is not new to the Agencies, as it was codified in 23 U.S.C. 139 via the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) in 2005; the Agencies propose including a direct copy of the codified language (23 U.S.C. 139(f)(4)(d)) in this section. It is important to note that although the development of such higher level of detail is acceptable in some circumstances as noted in the proposed language, the lead agency must make an impartial decision among the alternatives considered in the environmental review process. Including this proposed paragraph would help streamline the environmental review process, particularly in terms of fulfilling permitting requirements and possibly in terms of complying with MAP-21 Section 1319(b). It also would safeguard the impartiality of the alternative analysis done during the NEPA process.

With the addition of proposed new paragraphs (e) and (f), current paragraphs (e), (f), (g), (h), and (i) would be re-lettered as paragraphs (g), (h), (i), (j), and (k), respectively.

In paragraph (g), the Agencies propose to add a sentence that encourages including a notice on the cover sheet that the Administration will issue a combined final EIS/ROD document unless statutory criteria or practicability considerations preclude it. This change would be consistent with MAP-21 Section 1319(b). Paragraph (g) would read: “The Administration, when satisfied that the draft EIS complies with NEPA requirements, will approve the draft EIS for circulation by signing and dating the cover sheet. The cover sheet should include a notice that after circulation of the draft EIS and consideration of the comments received, the Administration will issue a combined final EIS/ROD document unless statutory criteria or practicability considerations preclude issuance of the combined document.”

The Agencies propose modifying the first sentence of paragraph (i) (existing paragraph (g)) to read, “The applicant, on behalf of the Administration, shall circulate the draft EIS for comment.” This change is non-substantive and would change the current text from passive voice to active voice. In addition, two subparagraphs of paragraph (i) would be slightly modified. In subparagraph (i)(2), the Agencies propose to replace “Federal, State and local government agencies expected to have jurisdiction or responsibility over, or interest or expertise in, the action,” with “Cooperating and participating agencies,” because the types of agencies listed are typically cooperating or participating agencies in the Agencies' environmental review process. This change is consistent with 23 U.S.C. 139 and 40 CFR 1508.5, and provides additional consistency within the Agencies' regulations. In proposed subparagraph (i)(3), the Agencies would correct a small grammatical error; the word “which” would be replaced with “that.” This change would be non-substantive.

The Agencies propose to delete the first two sentences found in existing paragraph (h), which contain specific FHWA and FTA references. The Agencies also propose to revise the third sentence to include a general reference to § 771.111, which would broaden the existing language to clearly apply to both agencies. These changes would be reflected in proposed paragraph (j); the first sentence would read: “When a public hearing on the draft EIS is held (if required by 23 CFR 771.111), the draft EIS shall be available at the public hearing and for a minimum of 15 days in advance of the public hearing.” This rewriting would not change the substance of the paragraph or current practice; a draft EIS would still be required to be available at the public hearing and for a minimum of 15 days in advance of the public hearing, should one be held on the draft EIS, and the reader is directed to § 771.111 for specific Agency information. The remainder of the paragraph would remain unchanged.

The Agencies propose to add new § 771.124 to address MAP-21 Section 1319(b) development of a combined final EIS/ROD. Section 1319(b) directs Agencies, to the maximum extent practicable, to expeditiously develop a single document that consists of a final EIS and ROD, unless certain conditions exist.

Proposed paragraph (a)(1) would make the section 1319(b) requirement clear and identify the conditions when a combined final EIS/ROD document would not be appropriate: “After circulation of a draft EIS and consideration of comments received, the lead agencies, in cooperation with the applicant (if not a lead agency), shall combine the final EIS and record of decision (ROD), to the maximum extent practicable, unless (1) the final EIS makes substantial changes to the proposed action that are relevant to environmental or safety concerns, or (2) there are significant new circumstances or information relevant to environmental concerns and that bear on the proposed action or the impacts of the proposed action.” This language is consistent with the MAP-21 language and the Agencies' Section 1319 Guidance.

The existing applicable requirements for both a final EIS and ROD must be met for issuance of a combined final EIS/ROD document. Proposed paragraph (a)(2) clarifies this and refers the reader to other applicable requirements: “When the combined final EIS/ROD is a single document, it shall include the content of a final EIS presented in § 771.125 and present the basis for the decision as specified in 40 CFR 1505.2, summarize any mitigation measures that will be incorporated in the project, and document any required Section 4(f) approval in accordance with part 774 of this title.”

Proposed paragraph (a)(3) establishes that both provisions of MAP-21 Section 1319 (i.e., paragraphs (a) and (b)) may be used in concert with each other. The proposed language is: “If the comments on the draft EIS are minor and confined to factual corrections or explanations that do not warrant additional agency response, an errata sheet may be attached to the draft statement, which together shall then become the combined final EIS/ROD document.” Errata sheets are not new to the Agencies, but the Agencies are including them in this section in response to MAP-21 Section 1319(a) to highlight their potential use, especially with the new combined final EIS/ROD document type. When both errata sheets and a combined final EIS/ROD are used, the combined final NEPA document would consist of the draft EIS, errata sheets, and any additional information required in a final EIS and ROD.

Proposed paragraph (a)(4) establishes that a combined final EIS/ROD must meet legal sufficiency requirements. The proposed language is: “A combined final EIS/ROD will be reviewed for legal sufficiency prior to issuance by the Administration.” Legal sufficiency involves ensuring adequate documentation exists to support the final agency action/decision, as well as determining whether the combined final EIS/ROD complies with minimum legal standards of NEPA and other procedural or substantive requirements. It is not new to the Agencies' environmental review process; it is included in this section for consistency with § 771.125.

Proposed paragraph (a)(5) would address Administration approval of the combined final EIS/ROD: “The Administration shall indicate approval of the combined final EIS/ROD by signing the document. The provision on Administration's Headquarters prior concurrence in § 771.125(c) applies to the combined final EIS/ROD.”

Proposed paragraph (b) would make clear that the Federal Register public availability notice does not establish a comment period for the combined final EIS/ROD: “The Federal Register public availability notice published by EPA (40 CFR 1506.10) does not establish a waiting period or a period of time for the return of comments on a combined final EIS/ROD.”

The Agencies propose deleting paragraph (d) (“The signature of the FTA approving official on the cover sheet also indicates compliance with 49 U.S.C. 5324(b) and fulfillment of the grant application requirements of 49 U.S.C. 5323(b).”) because sections 20016 and 20017 of MAP-21 repealed the environmental review process-related requirements previously found through those statutory references for FTA.

Due to the proposed deletion of paragraph (d), existing paragraphs (e), (f), and (g) would be re-lettered as paragraphs (d), (e), and (f), respectively.

The Agencies propose to modify paragraph (e), previously paragraph (f), by replacing the word “printing” with the word “publication.” This change would address the fact that the final EIS may be produced by electronic means and that paper hardcopies are not required except as necessary to meet State requirements.

The Agencies propose to add a new paragraph (g) that states: “The final EIS may take the form of an errata sheet pursuant to 40 CFR 1503.4(c).” As noted above, this change would make the Agencies' regulations consistent with MAP-21 Section 1319(a), which provides for the preparation of a final EIS by attaching errata sheets to the draft EIS if certain conditions are met. The use of errata sheets is appropriate when comments received on a draft EIS are minor, and the lead agency's responses to those comments are limited to factual corrections or explanations of why the comments do not warrant further response.

The Agencies propose to modify paragraph (a) to reflect that the minimum 30-day period between final EIS and ROD is incompatible with the publication of a combined final EIS/ROD, as required by MAP-21 Section 1319. The modification would be made by adding the phrase, “When the final EIS is not combined with the ROD,” to the beginning of the first sentence in this paragraph. This change would make clear that the 30-day waiting period between final EIS and ROD applies only for those instances where the final EIS is not combined with the ROD. Under the scenario where the Administration signs a combined final EIS/ROD document, there is no waiting period. In addition, the Agencies propose to remove the last sentence from paragraph (a) (“Until any required ROD has been signed, no further approvals may be given except for administrative activities taken to secure further project funding and other activities consistent with 40 CFR 1506.1”) because it is duplicative of § 771.113 and unnecessary to repeat in this section. The changes presented to this paragraph are, therefore, non-substantive.

In paragraph (b), the Agencies propose to modify the language to reflect the possibility of an amended ROD, as well as to include a reference to the combined final EIS/ROD process. In the discussion of a revised ROD, the Agencies would add the text “or amended” before the term “ROD” in both sentences to reflect FTA current practice. Examples of when the Agencies would amend a ROD include where (1) the Administration previously signed a combined final EIS/ROD or ROD and subsequently decides to approve an alternative that was not identified as the preferred alternative but was fully evaluated in the final EIS, or (2) the Administration proposes to make substantial changes to the mitigation measures or findings discussed in the combined final EIS/ROD or ROD. To provide for the combined final EIS/ROD process requirements, the Agencies propose inserting “§ 771.124(a) or” prior to the existing reference to § 771.125(c) at the end of the first sentence, and removing “pursuant to § 771.125(g)” from the second sentence.

The Agencies propose to add introductory text before paragraph (a) to provide the purpose and timing of re-evaluations. The introductory text would read: “The Administration shall determine, prior to granting any new approval related to an action or amending any previously approved aspect of an action, including mitigation commitments, whether an approved environmental document remains valid as described below. . . .” This change would clarify the Administration's responsibility regarding re-evaluations and provide a link to existing paragraphs (a) through (c).

In paragraph (a), the Agencies propose a non-substantive change that changes passive voice to active voice. The Agencies would add the text “The applicant shall prepare a” to the beginning of this paragraph and remove “shall be prepared by the applicant” from later in the sentence. This change clearly states that the applicant is responsible for preparing the written evaluation of the draft EIS.

In paragraph (b), the Agencies propose similar modifying language to clarify that the applicant is responsible for preparing a written evaluation of the final EIS before further Administration approvals may be granted. The first sentence would be modified to read: “The applicant shall prepare a written evaluation of the final EIS before the Administration may grant further approvals if major. . . .” This change clarifies the actions of the applicant and Administration and is consistent with current practice.

The Agencies propose revising the first sentence in paragraph (c) to include combined final EIS/ROD documents in the list of environmental documents that the Administration issues and to clearly state the Administration's role. Paragraph (c) would be revised to read: “After the Administration issues a combined final EIS/ROD, ROD, FONSI, or CE designation, the applicant. . . .” The original language noted “approval” of the ROD, FONSI, or CE designation, but did not state who approved the document nor did the use of “approval” accurately reflect the Administration's role. The proposed change would clarify that it is the Administration that issues environmental decision documents, which is consistent with other proposals in this rule.

The Agencies propose to delete paragraph (e) from this section (“A supplemental draft EIS may be necessary for major new fixed guideway capital projects proposed for FTA funding if there is a substantial change in the level of detail on project impacts during project planning and development. The supplement will address site-specific impacts and refined cost estimates that have been developed since the original draft EIS.”). The FTA proposes deleting this paragraph because it is not necessary to refer specifically to major new fixed guideway capital projects; a supplemental document may be needed for a variety of public transportation projects.

The Agencies propose to modify existing paragraph (f) (proposed paragraph (e) if the deletion noted above is finalized) to add EAs as a supplemental document type that may be used to analyze issues of limited scope; the addition of EAs to this paragraph is consistent with § 771.130(c). The modification would be made by revising the first sentence: “In some cases, an EA or supplemental EIS may be required . . .” In addition, the Agencies would replace the term “EIS” with “document” in the last sentence of the paragraph and the last sentence of subparagraph (e)(3) to account for the possibility of completing an EA for the supplemental analyses.

The Agencies propose to add an introductory sentence to the current paragraph in this section to address emergency and disaster-related CEs. This change would reflect the recently updated Agencies' CEs in §§ 771.117 and 771.118 for FHWA and FTA, respectively. The introductory sentence would read: “Responses to some emergencies and disasters are categorical exclusions under § 771.117 for FHWA or § 771.118 for FTA.” In the second sentence, the Agencies would add “Otherwise,” to the beginning of the sentence to account for those actions that do not qualify for a CE and must follow current emergency action procedures.

The Agencies are proposing to modify the current paragraph by reorganizing the section and adding or modifying text. The existing paragraph would be listed as paragraph (a) and, in accordance with Section 1319 of MAP-21, paragraph (a) would be modified to include “combined final EIS/ROD” as a document type that should comply with requirements of all applicable environmental laws, Executive orders, and other related requirements. In the last sentence of paragraph (a), the Agencies propose changing the reference to “the Administration” to “the FHWA” because the report requirements referenced in the paragraph and found in 23 U.S.C. 128 do not apply to FTA. This is a minor change that accurately reflects legal requirements and current practice.

The Agencies propose to add a new paragraph (b) to provide for the possibility that applicants may want to meet compliance requirements with other laws, regulations or Executive orders through programmatic approaches, consistent with MAP-21 Section 1305(a) (23 U.S.C. 139(b)). This new paragraph would read, “In consultation with the Administration and subject to Administration approval, an applicant may develop a programmatic approach for compliance with the requirements of any law, regulation, or Executive order applicable to the project development process.”

The Agencies propose no changes to § 771.137 in this NPRM.

The Agencies propose to modify this section by replacing the 180-day statute of limitations for claims arising under Federal law seeking judicial review of any final decisions by the Administration or by other Federal agencies on a transportation project announced in the Federal Register with a 150-day time period. The Agencies would replace the text “180” with “150”. This modification would make the paragraph consistent with MAP-21 Section 1308 (23 U.S.C. 139(l)).

In paragraph (i), the Agencies propose to revise the examples of documentation that would be adequate to show that a transportation facility and a Section 4(f) property were concurrently or jointly planned or developed: “(1) Formal reservation of a property for a future transportation use can be demonstrated by a government document created prior to or contemporaneously with the establishment of the park, recreation area, or wildlife and waterfowl refuge. Examples of an adequate document to formally reserve a future transportation use include: (A) A government map that depicts a transportation facility on the property; (B) a land use or zoning plan depicting a transportation facility on the property; or (C) a fully executed real estate instrument that references a future transportation facility on the property. (2) Concurrent or joint planning or development can be demonstrated by a government document created after, contemporaneously with, or prior to the establishment of the Section 4(f) property. Examples of an adequate document to demonstrate concurrent or joint planning or development include: (A) A government document that describes or depicts the designation or donation of the property for both the potential transportation facility and the Section 4(f) property; or (B) a government agency map, memorandum, planning document, report, or correspondence that describes or depicts action taken with respect to the property by two or more governmental agencies with jurisdiction for the potential transportation facility and the Section 4(f) property, in consultation with each other.” This would expand the current text that provides more limited direction to applicants as to what the Agencies will accept as adequate documentation of concurrent or joint planning or development of a transportation facility and a park, recreation area, or wildlife and waterfowl refuge.

In paragraph (e), the Agencies propose to revise the exception to read: “Projects for the Federal lands transportation facilities described in 23 U.S.C. 101(a)(8).” This replaces: “Park road or parkway projects under 23 U.S.C. 204.” This change is necessary due to the restructuring of the Federal Lands Highway Program by MAP-21, and more specifically, to implement Section 1119(c)(2) of MAP-21, which revised and broadened the Section 4(f) exception for park road and parkway projects to apply to Federal lands transportation facilities. Federal lands transportation facilities are public highways, roads, bridges, trails, and transit systems that are located on, adjacent to, or provide access to Federal lands for which title and maintenance responsibility is vested in the Federal Government, and that appear on the national Federal lands transportation facility inventory described in 23 U.S.C. 203(c).

In paragraph (g), the Agencies propose to revise the exception to read: “Transportation enhancement activities, transportation alternatives projects, and mitigation activities . . .” This replaces: “Transportation enhancement projects and mitigation activities . . .” This change is necessary because Section 1122 of MAP-21 replaced the former “transportation enhancement projects program” with a new “transportation alternatives projects program.” This exception would continue to be limited to situations where the official(s) with jurisdiction over the Section 4(f) resource agrees that “the use of the Section 4(f) property is solely for the purpose of preserving or enhancing an activity, feature, or attribute that qualifies the property for Section 4(f) protection.”

The Agencies derive explicit authority for this rulemaking action from 49 U.S.C. 322(a), which provides authority to “[a]n officer of the Department of Transportation [to] prescribe regulations to carry out the duties and powers of the officer.” The Secretary delegated this authority to the Agencies in 49 CFR 1.81(a)(3), which provides that the authority to prescribe regulations contained in 49 U.S.C. 322(a) is delegated to each Administrator “with respect to statutory provisions for which authority is delegated by other sections in [49 CFR part 1].” The Secretary has delegated authority to the Agencies to implement NEPA and Section 4(f), the statutes implemented by this rule, in 49 CFR 1.81(a)(4) and (5). Moreover, the CEQ regulations that implement NEPA provide at 40 CFR 1507.3 that agencies shall continue to review their policies and NEPA implementing procedures and revise them as necessary to ensure full compliance with the purposes and provisions of NEPA.

The agencies will consider all comments received before the close of business on the comment closing date indicated above and will be available for examination in the docket (FHWA-2015-0011) at regulations.gov. Comments received after the comment closing date will be filed in the docket and the Agencies will consider them to the extent practicable. In addition to late comments, the Agencies will also continue to file relevant information in the docket as it becomes available after the comment period closing date, and interested persons should continue to examine the docket for new material. The Agencies may publish a final rule at any time after close of the comment period.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). The Agencies have determined preliminarily that this action would not be a significant regulatory action under section 3(f) of Executive Order 12866 nor would it be significant within the meaning of U.S. Department of Transportation regulatory policies and procedures (44 FR 11032, February 26, 1979). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Agencies anticipate that the economic impact of this rulemaking would be minimal. The Agencies do not have specific data to assess the monetary value of the benefits from the proposed changes because such data does not exist and would be difficult to develop.

This NPRM proposes to modify 23 CFR parts 771 and 774 in order to be consistent with changes introduced by MAP-21 as well as to provide clarification and make the regulation more consistent with the Agencies' practices. These proposed changes would not adversely affect, in any material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and would not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. Consequently, a full regulatory evaluation is not required. The Agencies anticipate that the changes in this NPRM would enable projects to move more expeditiously through the Federal review process and would reduce the preparation of extraneous environmental documentation and analysis not needed for compliance with NEPA or Section 4(f) while still ensuring that projects are built in an environmentally responsible manner. The Agencies request comment, including data and information on the experiences of project sponsors, on the likely effects of the changes being proposed.

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612), the Agencies have evaluated the effects of this proposed rule on small entities and anticipate that this action would not have a significant economic impact on a substantial number of small entities. “Small entities” include small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations under 50,000. The proposed revisions are expected to expedite environmental review and thus are anticipated to be less than any current impact on small business entities.

This proposed rule would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). This proposed rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $148.1 million or more in any one year (2 U.S.C. 1532). Further, in compliance with the Unfunded Mandates Reform Act of 1995, the Agencies will evaluate any regulatory action that might be proposed in subsequent stages of the proceeding to assess the effects on State, local, and tribal governments and the private sector.

Executive Order 13132 requires agencies to ensure meaningful and timely input by State and local officials in the development of regulatory policies that may have a substantial, direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. The Agencies analyzed this proposed action in accordance with the principles and criteria contained in Executive Order 13132 and determined that it would not have sufficient federalism implications to warrant the preparation of a federalism assessment. The Agencies have also determined that this proposed action would not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions. The Agencies invite State and local governments with an interest in this rulemaking to comment on the effect that adoption of specific proposals may have on State or local governments.

The Agencies have analyzed this action under Executive Order 13175, and determined that it would not have substantial direct effects on one or more Indian tribes; would not impose substantial direct compliance costs on Indian tribal governments; and would not preempt tribal law. Therefore, a tribal summary impact statement is not required.

The Agencies have analyzed this action under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. The Agencies have determined that this action is not a significant energy action under that order because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects under Executive Order 13211 is not required.

The DOT's regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities (49 CFR part 17) apply to this program. Accordingly, the Agencies solicit comments on this issue.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et seq.), Federal agencies must obtain approval from the Office of Management and Budget for each collection of information they conduct, sponsor, or require through regulations. The Agencies have determined that this proposal does not contain collection of information requirements for the purposes of the PRA.

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

Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, and DOT Order 5610.2(a), 91 FR 27534 (May 10, 2012) (available online at www.fhwa.dot.gov/environment/environmental_justice/ej_at_dot/order_56102a/index.cfm), require DOT agencies to achieve environmental justice (EJ) as part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects, including interrelated social and economic effects, of their programs, policies, and activities on minority populations and low-income populations in the United States. The DOT Order requires DOT agencies to address compliance with the Executive order and the DOT Order in all rulemaking activities. In addition, both Agencies have issued additional documents relating to administration of the Executive order and the DOT Order. On June 14, 2012, FHWA issued an update to its EJ order, FHWA Order 6640.23A, FHWA Actions to Address Environmental Justice in Minority Populations and Low Income Populations (available online at www.fhwa.dot.gov/legsregs/directives/orders/664023a.cfm). The FTA also issued an update to its EJ policy, FTA Policy Guidance for Federal Transit Recipients, 77 FR 42077 (July 17, 2012) (available online at http://www.fta.dot.gov/legislation_law/12349_14740.html).

The Agencies have evaluated this proposed rule under the Executive order, the DOT Order, the FHWA Order, and the FTA Circular. The Agencies have determined that the proposed changes to 23 CFR part 771, if finalized as proposed, would not cause disproportionately high and adverse human health and environmental effects on minority or low income populations.

At the time the Agencies apply the NEPA implementing procedures in 23 CFR part 771, the Agencies would have an independent obligation to conduct an evaluation of the proposed action under the applicable EJ orders and guidance to determine whether the proposed action has the potential for EJ effects. The rule would not affect the scope or outcome of that EJ evaluation. In any instance where there are potential EJ effects resulting from a proposed Agency action covered under any of the NEPA classes of action in 23 CFR part 771, public outreach under the applicable EJ orders and guidance would provide affected populations with the opportunity to raise any concerns about those potential EJ effects. See DOT Order 5610.2(a), FHWA Order 6640.23A, and FTA Policy Guidance for Transit Recipients (available at links above). Indeed, outreach to ensure the effective involvement of minority and low income populations where there is potential for EJ effects is a core aspect of the EJ orders and guidance. For these reasons, the Agencies have determined that no further EJ analysis is needed and no mitigation is required in connection with the proposed revisions to the Agencies' NEPA and Section 4(f) implementing regulations (23 CFR parts 771 and 774).

The Agencies have analyzed this action under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. The Agencies certify that this action would not be an economically significant rule and would not cause an environmental risk to health or safety that may disproportionately affect children.

The Agencies do not anticipate that this action would affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

Agencies are required to adopt implementing procedures for NEPA that establish specific criteria for, and identification of, three classes of actions: those that normally require preparation of an EIS; those that normally require preparation of an EA; and those that are categorically excluded from further NEPA review (40 CFR 1507.3(b)). The CEQ regulations do not direct agencies to prepare a NEPA analysis or document before establishing Agency procedures (such as this regulation) that supplement the CEQ regulations for implementing NEPA. The changes proposed in this rule are part of those agency procedures, and therefore establishing the proposed changes does not require preparation of a NEPA analysis or document. Agency NEPA procedures are generally procedural guidance to assist agencies in the fulfillment of agency responsibilities under NEPA, but are not the agency's final determination of what level of NEPA analysis is required for a particular proposed action. The requirements for establishing agency NEPA procedures are set forth at 40 CFR 1505.1 and 1507.3.

A RIN is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross reference this action with the Unified Agenda.

In consideration of the foregoing, the Agencies propose to amend title 23, Code of Federal Regulations parts 771 and 774, and title 49, Code of Federal Regulations part 622, as follows:

The revisions read as follows:

I. Background

In order to address evidence of arbitrary exclusion of lesbian, gay, bisexual, and transgender individuals (LGBT) and their families from housing opportunities, HUD published its Equal Access Rule in the Federal Register on February 3, 2012, at 77 FR 5662. The Equal Access Rule, codified primarily at 24 CFR 5.100 and 5.105(a)(2) and in applicable program regulations, defines the terms sexual orientation and gender identity, at 24 CFR 5.100, and requires, at 24 CFR 5.105(a)(2), that housing assisted or insured by HUD be made available to individuals and families without regard to an individual's actual or perceived sexual orientation, gender identity, or marital status. Certain other rules governing HUD housing programs were revised to clarify that all otherwise eligible families, regardless of sexual orientation, gender identity, or marital status of any member, have the opportunity to participate in HUD programs. The 2012 rule also revised 24 CFR 203.33(b) by adding sexual orientation and gender identity, in addition to marital status, to the characteristics that an FHA-certified lender may not take into consideration in determining the adequacy of a mortgagor's income.

Further, § 5.105(a)(2)(ii) prohibits owners and administrators of HUD-assisted or HUD-insured housing, approved lenders in a Federal Housing Administration (FHA) mortgage insurance program, and any other recipients or subrecipients of HUD funds from inquiring about sexual orientation or gender identity to determine eligibility for HUD-assisted or HUD-insured housing or otherwise make such housing available. The prohibition on inquiries regarding sexual orientation or gender identity does not prohibit individuals from voluntarily self-identifying sexual orientation or gender identity. Further, the rule provides a limited exception for inquiries about the sex of an individual to determine eligibility for housing provided or to be provided in temporary, emergency shelters with shared sleeping areas or bathrooms, or to determine the number of bedrooms to which a household may be entitled.

In response to public comments recommending that HUD-assisted programs accommodate individuals in accordance with their gender identity, HUD stated in the preamble to the Equal Access Rule that it was not adopting a national policy on the placement of transgender persons in temporary, emergency shelters with shared sleeping quarters or shared bathing facilities at that time, but would instead monitor its programs to determine whether additional guidance or a national policy was needed to ensure equal access. In response to comments on the permissibility of inquiries about an individual's sex, HUD stated in the preamble to the Equal Access Rule that HUD would monitor its programs and review the prohibition on inquiries to determine whether additional guidance was necessary to provide transgender individuals with equal access to shelters and other housing. The Fair Housing Act 1 prohibits discrimination in the sale, rental, making unavailable, or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status, and national origin, and thus prohibits making housing unavailable to a person because of that person's sex. However, temporary, emergency shelters and other buildings and facilities that are not covered by the Fair Housing Act 2 because they provide short-term, temporary accommodations may provide sex-segregated accommodations, when the buildings and facilities have physical limitations or configurations that require shared sleeping quarters or shared bathing facilities.3

Since the publication of the Equal Access Rule, HUD has conducted further review on the issue of transgender individuals' access to temporary, emergency shelters and other facilities with physical limitations or configurations that require shared sleeping quarters or bathing facilities, both in terms of individual cases and evidence from broader research. In this regard, HUD and the U.S. Interagency Council on Homelessness conducted a listening session on LGBT issues at the National Alliance to End Homelessness's 2012 National Conference on Ending Homelessness, where homeless service providers reported that, if given the choice between a shelter designated for their assigned birth sex or sleeping on the streets, many transgender shelter-seekers would choose the streets.4 One participant reported that, in her community, transgender women are excluded from the women's shelter, and conditions for them are so dangerous at the men's shelter that the shelter forces them to try to disguise their gender identity. HUD has also investigated several cases in which transgender persons have not been provided equal access to housing as required by the Equal Access Rule or have faced discrimination under the Fair Housing Act because of nonconformance with gender stereotypes.

National research indicates that these denials of access are a common occurrence. According to one major national survey on the experiences of transgender persons, nearly half (47 percent) of all transgender respondents who accessed shelters left those shelters because of the treatment they received there—choosing the street over the abuse and indignity they experienced in the shelters.5 This survey further reported that 25 percent of transgender individuals who stayed in shelters were physically assaulted, and 22 percent were sexually assaulted, by another resident or shelter staff.6

The experiences of homeless transgender youth, specifically, have also been documented, with similar findings of lack of access to housing and services. While research suggests that transgender youth represent less than one percent of the youth in the United States,7 a disproportionately high 6.8 percent of youth living on the streets identify as transgender.8 In addition, a report detailing case studies of runaway and homeless youth found that transgender youth were particularly at risk of emotional distress resulting from discrimination or harassment because of gender identity and supported establishing clear nondiscrimination and antiharassment policies relating to gender identity. With respect to facilities with shared sleeping or bathing areas, the policies recommended include addressing the needs of transgender persons and other persons who do not identify with the sex assigned to the individual at birth.9 A recent report on experiences of homeless LGBT youth also calls for the creation of safe and supportive protocols for housing and placement specific to transgender individuals and individuals who do not conform with gender stereotypes.10

HUD has also reviewed steps that other Federal agencies have taken since the Equal Access Rule was promulgated in February 2012 to provide equal access for transgender persons and other persons who do not conform with gender stereotypes.

U.S. Department of Justice Guidance. On April 9, 2014, the Office for Civil Rights, Office of Justice Programs, at the U.S. Department of Justice (DOJ) published guidance entitled “Frequently Asked Questions: Nondiscrimination Grant Condition in the Violence Against Women Reauthorization Act of 2013” 11 (VAWA 2013 FAQ). VAWA 2013 authorizes certain grants administered by DOJ, including grants to provide housing assistance for survivors of domestic violence. VAWA 2013 also imposes a new grant condition that prohibits discrimination by recipients of such grants on the basis of sexual orientation and gender identity. The VAWA 2013 FAQ, which is not applicable to HUD-assisted housing,12 addresses how a recipient of DOJ funds can operate a single-sex facility funded through VAWA and not discriminate on the basis of gender identity. The DOJ guidance states:

U.S. Department of Education Guidance. Similarly, on December 1, 2014, the U.S. Department of Education's Office for Civil Rights issued guidance providing that “under Title IX [of the Education Amendments of 1972, which prohibits discrimination based on sex], a recipient generally must treat transgender students consistent with their gender identity in all aspects of the planning, implementation, enrollment, operation, and evaluation of single-sex classes.” 15

Given HUD's mission to provide equal housing opportunities for all, and the significant violence, harassment, and discrimination faced by transgender individuals and other persons who do not identify with the sex they were assigned at birth in attempting to access programs, benefits, services, and accommodations, HUD has a responsibility to provide leadership in establishing a policy for HUD's community development programs that addresses these serious concerns. After considering the feedback from HUD recipients and subrecipients, the experiences of the beneficiaries of HUD's community development programs who have been denied access because of their gender identity, research on transgender discrimination in shelter settings, and the actions taken by other Federal agencies to address access to programs, benefits, services, and accommodations in accordance with an individual's gender identity, CPD released Notice CPD-015-02, “Appropriate Placement for Transgender Persons in Single-Sex Emergency Shelters and Other Facilities,” applicable to the Housing Opportunities for Persons with AIDS, Emergency Solutions Grants, and Continuum of Care programs, on February 20, 2015.16 This guidance states:

CPD's guidance also outlines best practices for appropriate and inappropriate inquiries related to sex, and states that where a provider is uncertain of the client's sex or gender identity, the provider informs the client or potential client that the agency provides shelter based on the individual's gender identity. The guidance further states that there generally is no legitimate reason for the provider to request documentation of a person's sex in order to determine appropriate placement, nor should the provider have any basis to deny access to a single-sex emergency shelter or facility solely because the provider possesses identity documents indicating a sex different than the client's or potential client's gender identity. Further, the provider may not ask questions or otherwise seek information or documentation concerning the person's anatomy or medical history, nor consider a client ineligible for an emergency shelter or other facility because the client's appearance or behavior does not conform with gender stereotypes. In addition, the guidance provides examples of steps that providers may take to address safety or privacy concerns, and says that providers should train staff on adhering to this guidance.18

To adopt requirements consistent with the guidance recently published by HUD, HUD is proposing to add in 24 CFR part 5 a new section that would require recipients and subrecipients of assistance under the HOME Investment Partnerships program, Community Development Block Grant program, Housing Opportunities for Persons with AIDS program, Emergency Solutions Grants program, and the Continuum of Care program, as well as owners, operators, and managers of shelters and other buildings and facilities and providers of services funded in whole or in part by any of these programs, to provide equal access to programs, benefits, services, and accommodations in accordance with an individual's gender identity. If the proposed rule becomes a final rule, the final rule would be effective upon receipt of assistance after the effective date of the final rule. Nothing in this proposed rule is meant to prevent necessary and appropriate steps to address any fraudulent attempts to access services or legitimate safety concerns that may arise in any shelter, building, or facility covered by this rule.

Prior to discussing the requirements that would be established in this section, it is important to clarify which individuals would be covered by the protections of this new section. While some individuals refer to themselves as transgender, other persons who do not identify with the sex they were assigned at birth may use other terms to describe themselves. For this reason, the proposed rule seeks to ensure that all individuals, regardless of the terms they use to describe themselves, are afforded equal access to programs, benefits, services, and accommodations in accordance with their gender identity.

The following requirements would be established by this proposed rule:

§ 5.100—Revised definition of gender identity.

HUD is proposing to amend the definition of gender identity in § 5.100, which currently provides that “Gender identity means actual or perceived gender-related characteristics.” This definition of gender identity, which was adopted by HUD in its 2012 Equal Access Rule for purposes of ensuring equal access in HUD-assisted and HUD-insured housing, is the same definition that was used in the Matthew Shepard and James Byrd, Jr., Hate Crimes Prevention Act of 2009, 18 U.S.C. 249. While this definition is effective for purposes of prosecuting hate crimes, HUD has concluded that it would be more effective for purposes of ensuring equal access to HUD programs to separate the definitions of actual and perceived gender identity. The Department is therefore proposing to amend the definition of gender identity to read as follows: “Gender identity means the gender with which a person identifies, regardless of the sex assigned to that person at birth. Perceived gender identity means the gender with which a person is perceived to identify based on that person's appearance, behavior, expression, other gender-related characteristics, or sex assigned to the individual at birth.” Perceived gender identity may differ from the identity with which a person identifies.

§ 5.106—Providing access in accordance with an individual's gender identity in community planning and development programs.

HUD proposes to add a new § 5.106, which would contain equal access provisions specifically tailored to HUD's community development programs. This proposed new provision would be placed after the more general equal access provisions applicable to all HUD housing programs, added in 2012 to § 5.105.

Section 5.106(a) would identify the programs covered by the new § 5.106. Section 5.106 would apply to recipients and subrecipients of assistance under the HOME Investment Partnerships program (24 CFR part 92), Community Development Block Grant program (24 CFR part 570), Housing Opportunities for Persons with AIDS program (24 CFR part 574), Emergency Solutions Grants program (24 CFR part 576), or Continuum of Care program (24 CFR part 578), as well as to owners, operators, and managers of shelters and other buildings and facilities and providers of services funded in whole or in part by any of these programs.

Section 5.106(b) is the operative provision in § 5.106. Under this subsection, a recipient, subrecipient, or provider would be required to establish, amend, or maintain program admissions, occupancy, and operating policies and procedures, including policies and procedures to protect individuals' privacy and security, so that equal access is provided to individuals based on their gender identity. This requirement includes tenant selection and admission preferences. The provision also requires that services, benefits, and accommodations be provided in a manner that affords equal access to the individual's family.19

Section 5.106(c) addresses temporary, emergency shelters and other buildings and facilities with physical limitations or configurations that require shared sleeping quarters or shared bathing facilities. This section requires that the placement and accommodation of individuals in such facilities that are permitted to be single-sex because they are not covered by the Fair Housing Act must be made in accordance with the individual's gender identity.

The only exception to the requirement to accommodate and serve a person in accordance with the individual's gender identity is that the recipient, subrecipient, owner, operator, manager, or provider may consider, on a case-by-case basis, whether a particular housing assignment would ensure health and safety. It is prohibited for such a determination to be based solely on a person's actual or perceived gender identity or on complaints of other shelter residents when those complaints are based on actual or perceived gender identity. It is likewise prohibited to deny appropriate placement based on a perceived threat to health or safety that can be mitigated some other less burdensome way (e.g., providing the transgender shelter seeker the option to use single-use bathing facilities).

Section 5.106(d) requires that when such a determination is made, the recipient, subrecipient, owner, operator, manager, or provider is required to provide either (1) equivalent alternative accommodation, benefits, and services or (2) a referral to a comparable alternative program that meets the needs of the individual. HUD expects the recipient, subrecipient, owner, operator, manager, or provider to refer the individual to a comparable alternative program that can more appropriately mitigate or eliminate the safety risk and that has available accommodations, or offer the individual equivalent alternative accommodation (e.g., a hotel or motel voucher), benefits, and services. HUD anticipates that the use of this limited exception for the provision of equivalent alternative accommodations, benefits, and services or referral to a comparable alternative program would be rare, since it would not apply unless the facts and circumstances demonstrated a nondiscriminatory risk to health or safety that could not be eliminated or appropriately mitigated by policy adjustments and physical modifications to buildings and facilities.

Section 5.106(e) requires that records of case-by-case determinations must be kept by the recipient, subrecipient, owner, operator, manager, or provider, including when the determination is made that an individual cannot safely be served in accordance with the individual's gender identity. Where an alternative placement is made, recipients, subrecipients, owners, operators, managers, or providers must thoroughly document the reasons for that placement, in accordance with the recordkeeping requirements established in this subsection. Further, the recordkeeping section proposes that when a referral is made, the recipient, subrecipient, owner, operator, manager, or provider documents the facts and circumstances regarding the referral and whether the individual and the individual's family, in instances where the individual presents with a family, has been admitted and accommodated.

§ 5.105(a)(2)(ii)—Removal of prohibited inquiries.

In the preamble to HUD's 2012 Equal Access Rule, HUD stated that it would review the prohibition of inquiries in § 5.105(a)(2)(ii) following monitoring of the application of this provision in HUD programs. As discussed earlier in this preamble, CPD released Notice CPD-015-02 “Appropriate Placement for Transgender Persons in Single-Sex Emergency Shelters and Other Facilities,” applicable to the Housing Opportunities for Persons with AIDS, Emergency Solutions Grants, and Continuum of Care programs, on February 20, 2015,20 which provided that HUD expected recipients, subrecipients, and providers to accommodate individuals in accordance with the individual's gender identity. The guidance states that where a provider is uncertain of the client's sex or gender identity and that information matters for the determination of placement, the provider informs the client or potential client that the agency provides shelter based on the individual's gender identity. HUD now believes, however, that the prohibition of inquiries at § 5.105(a)(2)(ii) may hinder a provider from making an appropriate placement decision for fear of violating the rule. For this reason, HUD is proposing to remove the prohibition of inquiries.

HUD's intent in proposing removal of § 5.105(a)(2)(ii) is not to now permit recipients or subrecipients to ask questions in order to seek information that could be used for discriminatory purposes. Rather, HUD is proposing removal because § 5.105(a)(2)(ii) has raised several legitimate questions about implementation. Removal of § 5.105(a)(2)(ii) would allow shelters and other facilities with physical limitations or configurations that require shared sleeping quarters or shared bathing facilities to ask the individual's gender identity, and it would permit inquiries of the individual's gender identity and sexual orientation to determine the number of bedrooms to which a household is entitled. Removal of § 5.105(a)(2)(ii) also reaffirms that HUD permits mechanisms for voluntary and anonymous reporting of sexual orientation or gender identity for compliance with data collection requirements of State and local governments or Federal assistance programs.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order.

This proposed rule is consistent with Administration policy, as has been noted in the preamble by citing to policy already implemented by the U.S Department of Education, the U.S. Department of Justice, the U.S. Department of Labor, and the CPD guidance already implemented by HUD. This proposed rule clarifies how facilities funded by CPD that have shared sleeping quarters or shared bathing facilities comply with the requirement that equal access be provided to programs, buildings, facilities, services, benefits, and accommodations in accordance with the individual's gender identity. This clarification should provide benefits to clients accessing CPD-funded, temporary, emergency shelters and other buildings and facilities by assuring all clients receive equal access, and will benefit the CPD-funded facilities by making compliance with HUD's equal access requirements easier.

In this proposed rule, HUD recognizes a limited exception to accommodating individuals in accordance with the individual's gender identity when a recipient, subrecipient, owner, operator, manager, or provider identifies a legitimate safety risk that cannot be eliminated or appropriately mitigated and makes a written case-by-case analysis. The written case-by-case analysis only applies when the benefits, services, and accommodations are not being provided to an individual in accordance with the individual's gender identity. The written case-by-case analysis benefits the client accessing the services and the recipient, subrecipient, owner, operator, manager, or provider by keeping a record of when a legitimate safety risk is identified. The recipient, subrecipient, owner, operator, manager, or provider must also undertake reasonable efforts to ensure that equivalent alternative accommodations are provided or refer the individual to a comparable alternative program that will meet the individual's needs. This proposed rule also seeks to amend the definition of gender identity in § 5.100 to clarify the difference between actual and perceived gender identity, which would be necessary if proposed § 5.106 is adopted. This proposed rule also would eliminate the prohibition on inquiries relating to sexual orientation or gender identity in § 5.105(a)(2)(ii). Both of these proposed changes would make it easier for recipients, subrecipients, owners, operators, managers, and providers of programs, buildings, and facilities funded by CPD programs to comply with the requirements of existing § 5.105(a)(2)(i) and proposed § 5.106. An estimate of the cost of recording and retaining that written case-by-case analysis, in the limited situations in which it may apply, is discussed in the Paperwork Reduction Act section of this proposed rule.

The docket file is available for public inspection in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the docket file by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals who are deaf or hard of hearing and individuals with speech impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339 (this is a toll-free number).

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Approximately 4,000 providers participating in the CPD programs covered by this rule are small organizations, but the number of entities that would address the accommodation needs addressed by this rule is much lower. The benefit of this proposed rule is to ensure equal access to CPD programs, facilities, services, benefits, and accommodations. The rule does require organizations to make a written case-by-case analysis and referral in limited situations. Although HUD does not have any way to determine the number of written case-by-case analyses or referrals that will occur in any one year, HUD does not believe that costs will be significant for small service providers and estimates it will take a provider 15 minutes per case-by-case analysis and referral. HUD invites interested parties to provide data with which HUD can formulate better estimates of the compliance costs associated with the written notice and referral requirements of this proposed rule. Accordingly, for the foregoing reasons, the undersigned certifies that this rule will not have a significant economic impact on a substantial number of small entities. Notwithstanding HUD's determination that this proposed rule would not have a significant effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives and the principles in Executive Order 13559, as described in this preamble.

The proposed rule requires CPD programs to include a written case-by-case analysis and make referrals. This rule also requires the retention of records to show that the case-by-case analysis was followed and referral requirements in this rulemaking have been met. HUD estimates that a case-by-case analysis and referral will be required infrequently given that the case-by-case analysis is only necessary when the provider is not providing accommodations to an individual in accordance with the gender with which an individual identifies because there is a legitimate safety risk that cannot be eliminated or appropriately mitigated. HUD estimates that only 0.05 percent of facilities that are covered by this proposed regulation will need to make a written case-by-case analysis and referral, and estimates it will take an individual 15 minutes to complete the case-by-case analysis and referral. This estimate includes the time required to write down the basis for the analysis, identify service providers that provide similar services, and make the referral.

The information collection requirements for the CPD's HOME Investment Partnerships program, Community Development Block Grant program (State and entitlement), Housing Opportunities for Persons with AIDS program, Emergency Solutions Grants program, or Continuum of Care program impacted by this rule have been approved by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control numbers 2506-0171, 2506-0085, 2506-0077, 2506-0133, 2506-0089, and 2506-0199. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a currently valid OMB control number. The existing forms will be changed to include the new recordkeeping requirement added by this proposed rule.

In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments from members of the public and affected agencies concerning this collection of information to:

(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.

(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information.

(3) Enhance the quality, utility, and clarity of the information to be collected.

(4) Minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology (e.g., by permitting electronic submission of responses).

Interested persons are invited to submit comments regarding the information collection requirements in this rule. Comments must refer to the proposed rule by name and docket number (FR-5583-P-01) and must be sent to: HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503, Fax number: 202-395-6947; and Reports Liaison Officer, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 9128, Washington, DC 20410.

Interested persons may submit comments regarding the information collection requirements electronically through the Federal eRulemaking Portal at http://www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

This proposed rule sets forth nondiscrimination standards. Accordingly, under 24 CFR 50.19(c)(3), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either: (i) Imposes substantial direct compliance costs on State and local governments and is not required by statute or (ii) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This proposed rule would not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive order.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments, and on the private sector. This proposed rule does not impose any Federal mandates on any State, local, or tribal governments, or on the private sector, within the meaning of the UMRA.

This document contains proposed amendments to the Income Tax Regulations (26 CFR part 1) for relief from joint and several liability under section 6015 of the Code and relief from the operation of state community property law under section 66.

Section 6013(a) permits a husband and wife to file a joint income tax return. Section 6013(d)(3) provides that spouses filing a joint income tax return are jointly and severally liable for liabilities for tax arising from that return. The term “tax” includes additions to tax, additional amounts, penalties, and interest. See sections 6665(a)(2) and 6601(e)(1). Joint and several liability allows the IRS to collect the entire liability from either spouse who signed the joint return, without regard to whom the items of income, deduction, credit, or basis that gave rise to the liability are attributable. Prior to 1998, section 6013(e) provided limited relief from joint and several liability. In 1998, Congress enacted the Internal Revenue Service Restructuring and Reform Act of 1998, Public Law 105-206, 112 Stat. 685 (1998), which repealed section 6013(e) and replaced it with section 6015. Section 6015 applies to liabilities arising after July 22, 1998, and liabilities that arose on or before July 22, 1998, but remained unpaid as of that date.

Section 6015 provides three avenues for relief from joint and several liability—sections 6015(b), (c) and (f). To be eligible for relief from joint and several liability, a spouse must request relief. Under section 6015(b), a requesting spouse may be entitled to relief from joint and several liability for an understatement of tax attributable to erroneous items of the nonrequesting spouse. Section 6015(c) permits a taxpayer who is divorced, separated, widowed, or who had been living apart from the other spouse for 12 months to allocate his or her tax deficiency between the spouses as if separate returns had been filed. Claims for relief under section 6015(b) and (c) must be made within two years of the IRS's first collection activity against the requesting spouse. Finally, section 6015(f) confers discretion upon the Commissioner to grant equitable relief from joint and several liability for understatements and underpayments, based on all the facts and circumstances. Regulations under section 6015 were first prescribed in TD 9003, Federal Register (67 FR 47278) on July 18, 2002.

These proposed amendments are necessary to carry out the provisions of section 6015 and to reflect changes in the law since the publication of TD 9003. On December 20, 2006, Congress enacted the Tax Relief and Health Care Act of 2006, Public Law 109-432, div. C, title IV, section 408, 120 Stat. 2922, 3061-62 (2006) (the 2006 Act). The 2006 Act amended section 6015 to provide the United States Tax Court with jurisdiction to review the Commissioner's determination to deny equitable relief under section 6015(f) when the Commissioner has not determined a deficiency and to suspend the period of limitation for collection under section 6502 when relief is requested only under section 6015(f). The proposed regulations also provide clarification and additional guidance on procedural and substantive issues related to the three types of relief from joint and several liability under section 6015.

Section 66 provides relief for a spouse who did not file a joint return in a community property state and did not include in gross income an item of community income that would be attributable solely to the nonrequesting spouse but for the operation of state community property law. Regulations under section 66 were first prescribed in TD 9074, Federal Register (68 FR 41067) on July 10, 2003. The proposed regulations under section 66 contain only non-substantive changes.

Recently, other amendments to the regulations under section 6015 were proposed in a notice of proposed rulemaking (REG-132251-11) published in the Federal Register (78 FR 49242) on August 13, 2013. Those regulations proposed changes to § 1.6015-5 to remove the two-year deadline for taxpayers to file requests for equitable relief under section 6015(f), and other changes related to the time and manner for requesting relief. Additionally, on September 16, 2013, the IRS issued Rev. Proc. 2013-34 (2013-2 CB 397). Rev. Proc. 2013-34 revised the factors used in determining if a requesting spouse is eligible for equitable relief under sections 66(c) and 6015(f).

These regulations propose to make a number of significant changes to the existing regulations. These changes include providing additional guidance on the judicial doctrine of res judicata and the section 6015(g)(2) exception to res judicata when a requesting spouse did not meaningfully participate in a prior court proceeding. The regulations propose to add a list of acts to be considered in making the determination as to whether the requesting spouse meaningfully participated in a prior proceeding and provide examples of the operation of these rules. The regulations also (1) propose a definition of underpayment or unpaid tax for purposes of section 6015(f); (2) provide detailed rules regarding credits and refunds in innocent spouse cases; (3) expand the rule that penalties and interest are not separate items from which relief can be obtained to cases involving underpayments; (4) incorporate an administratively developed rule that attribution of an erroneous item follows the attribution of the underlying item that caused the increase to adjusted gross income (AGI); (5) update the discussion of the allocation rules under section 6015(c) and (d); and (6) revise the rules regarding prohibition on collection and suspension of the collection statute.

The procedures for requesting relief on Form 8857, “Request for Innocent Spouse Relief,” under section 6015 have changed since 2006 because of the amendments to section 6015(e) made by Section 408 of Title IV of Division C of the 2006 Act. The amendments to section 6015(e) conferred jurisdiction on the Tax Court to review the Commissioner's denial of relief under section 6015(f) in cases in which a deficiency had not been asserted. The amendments also provided for a prohibition on collection and a corresponding tolling of the collection statute under section 6502 upon the filing of a request for relief under section 6015(f). The amendments apply to any liability for taxes arising on or after December 20, 2006, and to any liability for taxes arising before December 20, 2006, and remaining unpaid as of that date. As a result of the amendments, any request for relief under section 6015 will toll the collection statute, making it unnecessary for a spouse to elect or request a particular type of relief as required under § 1.6015-1(a)(2) of the current regulations. Accordingly, § 1.6015-1 and all sections referencing an election under §§ 1.6015-2 and 1.6015-3 or a request for relief under § 1.6015-4 are proposed to be revised to reflect that a requesting spouse is no longer required to elect or request relief under a specific provision of section 6015. Thus, beginning with the June 2007 revision to the Form 8857, a requesting spouse makes a single request for relief on Form 8857. Section 1.6015-1 is also being revised to provide that the IRS will consider in all cases whether the requesting spouse is eligible for relief under § 1.6015-2 or § 1.6015-3, and if relief is not available under either of those sections, under § 1.6015-4.

Section 6015(g)(2) provides an exception to the common law doctrine of res judicata except in a case in which relief under section 6015 was at issue in a prior court proceeding or if a requesting spouse meaningfully participated in a prior proceeding. in which relief under section 6015 could have been raised Current § 1.6015-1(e) is being revised in these proposed regulations to provide more detailed guidance on how the exception to res judicata and the meaningful participation rule work, and to reflect developments in the case law since 2002 (described below). Proposed § 1.6015-1(e)(1) restates the general rule from the current regulations.

Proposed § 1.6015-1(e)(2) incorporates the holding in Deihl v. Commissioner, 134 T.C. 156 (2010) (When a requesting spouse generally raises relief under section 6015 in a proceeding but does not specifically plead relief under any subsection of section 6015, relief under section 6015(c) will not be treated as being at issue in that proceeding if the requesting spouse was not eligible to elect relief under section 6015(c) because the requesting spouse was not divorced, widowed, legally separated, or living apart for 12 months at any time during the prior proceeding.).

Proposed § 1.6015-1(e)(3) provides guidance on the meaningful participation exception to res judicata provided by section 6015(g)(2). A requesting spouse meaningfully participated in the prior proceeding if the requesting spouse was involved in the proceeding so that the requesting spouse could have raised the issue of relief under section 6015 in that proceeding. Meaningful participation is a facts and circumstances determination. A nonexclusive list of acts was added in proposed § 1.6015-1(e)(3) to provide indicators of “meaningful participation” within the context of a bar against relief based on the judicial doctrine of res judicata. Whether a requesting spouse meaningfully participated in a prior proceeding is based on all the facts and circumstances. No one act necessarily determines the outcome. The degree of importance of each act varies depending on the requesting spouse's facts and circumstances. The following acts, derived from case law and experience since 2002, are among the acts the IRS and courts consider in making the determination regarding meaningful participation: Whether the requesting spouse participated in the IRS Appeals process while the prior case was docketed; whether the requesting spouse participated in discovery; whether the requesting spouse participated in pretrial meetings, settlement negotiations, or trial; whether the requesting spouse signed court documents; and whether the requesting spouse was represented by counsel in the prior proceedings.

Proposed § 1.6015-1(e)(3)(i) provides a new rule under which the requesting spouse will not be considered to have meaningfully participated in the prior proceeding if the requesting spouse establishes that the requesting spouse performed any of the acts listed in proposed § 1.6015-1(e)(3) because the nonrequesting spouse abused or maintained control over the requesting spouse, and the requesting spouse did not challenge the nonrequesting spouse for fear of the nonrequesting spouse's retaliation. Proposed § 1.6015-1(e)(3)(ii) restates the rule from the current regulations that a requesting spouse did not meaningfully participate in a prior proceeding if, due to the effective date of section 6015, relief under section 6015 was not available in that proceeding.

Proposed § 1.6015-1(e)(3)(iii) provides that in a case petitioned from a statutory notice of deficiency under section 6213, the fact that the requesting spouse did not have the ability to effectively contest the underlying deficiency is irrelevant for purposes of determining whether the requesting spouse meaningfully participated in the prior proceeding. Treasury and the IRS disagree with the holding in Harbin v. Commissioner, 137 T.C. 93 (2011), in which the Tax Court concluded that Mr. Harbin did not meaningfully participate in the deficiency case in part because he could not effectively contest the part of the deficiency related to his ex-wife's gambling losses without her. The Tax Court found that Mr. Harbin could not effectively contest this part of the deficiency without his ex-wife because she “was the one with personal knowledge of the winnings and losses from the gambling activities” and was the one “who maintained and provided all of the documentation relating to the gambling activities.” The Tax Court concluded that this knowledge and control of the documentation resulted in Mr. Harbin's ex-wife effectively exercising “exclusive control” of the case. Harbin v. Commissioner, 137 T.C. at 98.

Treasury and the IRS believe that the Tax Court applied the incorrect standard to determine whether a taxpayer meaningfully participated in a proceeding for purposes of section 6015(g)(2). The purpose of the meaningful participation exception to res judicata is not to ensure that a taxpayer had the opportunity to contest the deficiency but rather to ensure that the taxpayer could have raised relief under section 6015. Moore v. Commissioner, T.C. Memo. 2007-156. This is evident because, if section 6015 relief was at issue in the prior case, the taxpayer is not permitted to raise section 6015 relief in a subsequent proceeding regardless of the degree to which the taxpayer participated or whether taxpayer's ability to contest the deficiency was impaired. See Deihl v. Commissioner, 134 T.C. 156, 161 (2010).

Proposed § 1.6015-1(e)(4) provides examples of how the rules in paragraphs (e)(1), (e)(2), and (e)(3) work. Proposed § 1.6015-1(e)(5) restates the collateral estoppel rule from current § 1.6015-1(e) without change.

Proposed § 1.6015-1(h)(1) and (h)(5) are being revised to remove the distinction between electing and requesting relief as discussed earlier in this preamble.

Proposed § 1.6015-1(h)(6) defines “unpaid tax” for purposes of § 1.6015-4. For purposes of § 1.6015-4, the regulations propose that the terms “unpaid tax” and “underpayment” have the same meaning. The unpaid tax or underpayment on a joint return is the balance shown as due on the return reduced by the tax paid with the return or paid on or before the due date for payment (without considering any extension of time to pay). The balance due is determined after applying withholding credits, estimated tax payments, payments with an extension, and other credits applied against the total tax reported on the return. Payments made with the return include payments made by check in the same envelope with the return or remitted at a later date (but before the due date for payment) with Form 1040-V, “Payment Voucher.” Payments made with the return also include remittances made by direct debit, credit card, or other commercially acceptable means under section 6311 on or before the due date for payment. The determination of the existence and amount of unpaid tax is made as of the date the joint return is filed, or as of the due date for payment if payments are made after the return is filed but on or before the due date.

If the payments made with the joint return, including any payments made on or before the due date for payment (without considering any extension of time for payment), completely satisfy the balance due shown on the return, then there is no unpaid tax for purposes of § 1.6015-4. A requesting spouse is not entitled to be considered for relief (credit or refund) under § 1.6015-4 for any tax paid with the joint return (including a joint amended return). Payments made after the later of the date the joint return is filed or the due date for payment (without considering any extension of time for payment), including offsets of overpayments from other tax years, do not change the amount of unpaid tax reported on the joint return. Under § 1.6015-4, a requesting spouse can only get relief from the unpaid tax on the return, and if refunds are available, from any payments made on the liability after the later of the date the joint return was filed or the due date for payment (without considering any extension of time for payment).

Proposed § 1.6015-1(h)(7) and (h)(8) define understatement and deficiency, respectively. Section 6015(b)(3) provides that an “understatement” for purposes of section 6015 has the same meaning given to that term by section 6662(d)(2)(A). The definition of understatement is in current § 1.6015-2(b) and therefore only applies to requests under that section. The term “understatement,” however, is a term that is relevant to relief under sections 6015(b), (c), and (f). These regulations propose to move the definition of “understatement” to proposed § 1.6015-1(h)(7) to allow a consistent definition to apply throughout the regulations. Likewise, proposed § 1.6015-1(h)(8) adds a definition of deficiency, by reference to section 6211 and the regulations under section 6211, to clarify that the term deficiency has the same meaning throughout the regulations.

Section 6015(g)(1) provides that requesting spouses generally can receive a credit or refund of payments made on the joint liability if the requesting spouse is entitled to relief under section 6015. This general rule is set forth in proposed § 1.6015-1(k)(1). Section 6015(g) also provides some limitations on the availability of credit or refund. New § 1.6015-1(k)(2) through (5) discuss these and other limitations on credit or refund when a requesting spouse is eligible for relief.

Proposed § 1.6015-1(k)(2) sets forth the limitation on refunds from section 6015(g)(3) when a requesting spouse is entitled to relief under § 1.6015-3. Proposed § 1.6015-1(k)(3) sets forth the rule from current § 1.6015-4(b) that relief under § 1.6015-4 is not available when the requesting spouse is entitled to full relief under § 1.6015-3 but is not entitled to a refund because of the limitation in section 6015(g)(3) and proposed § 1.6015-1(k)(2). Proposed § 1.6015-1(k)(4) incorporates, consistent with section 6015(g)(1), the limitations on credit or refund provided by sections 6511 (general limitations on credits or refunds) and 6512(b) (limitations on credits or refunds where the Tax Court determines that a taxpayer made an overpayment). This section also clarifies that, in general, Form 8857 will be treated as the requesting spouse's claim for credit or refund.

Proposed § 1.6015-1(k)(5) sets forth the general rule that a requesting spouse who is entitled to relief is generally not eligible for a credit or refund of joint payments made with the nonrequesting spouse. Under the proposed rule, a requesting spouse, however, may be eligible for a credit or refund of the requesting spouse's portion of the requesting and nonrequesting spouse's joint overpayment from another tax year that was applied to the joint income tax liability to the extent that the requesting spouse can establish his or her contribution to the overpayment. Both spouses have an interest in a joint overpayment relative to each spouse's contribution to the overpayment. See, for example, Gordon v. United States, 757 F.2d 1157, 1160 (11th Cir. 1985) (“Where spouses claim a refund under a joint return, the refund is divided between the spouses, with each receiving a percentage of the refund equivalent to his or her proportion of the withheld tax payments.”). If the requesting spouse contributed to the joint overpayment through withholding, estimated tax, or other payments, then the requesting spouse may be entitled to a refund of that portion of the overpayment that was applied to the joint liability. Under the proposed rule, a requesting spouse in a state that is not a community property state may establish his or her portion of a joint overpayment using the allocation rules of Rev. Rul. 80-7 (1980-1 CB 296), or successor guidance. A requesting spouse in a community property state may establish his or her portion of a joint overpayment using the allocation rules of Rev. Rul. 2004-71 (2004-2 CB 74), Rev. Rul. 2004-72 (2004-2 CB 77), Rev. Rul. 2004-73 (2004-2 CB 80), or Rev. Rul. 2004-74 (2004-2 CB 84), or successor guidance, whichever is applicable to the state in which the requesting spouse is domiciled. For copies of Revenue Procedures, Revenue Rulings, notices, and other guidance published in the Internal Revenue Bulletin, please visit the IRS Web site at http://www.irs.gov.

These proposed regulations reflect the elimination of the more restrictive rule regarding credit or refund when relief is granted under § 1.6015-4 in cases involving a deficiency, as provided by Rev. Proc. 2013-34. A credit or refund, subject to the limitations in § 1.6015-1(k), is available to a requesting spouse who is entitled to relief under § 1.6015-4 in both underpayment and deficiency cases.

Current § 1.6015-1(h)(4) provides, in part, that penalties and interest are not separate erroneous items from which a requesting spouse can be relieved separate from the tax. Rather, relief from penalties and interest related to an understatement or deficiency will generally be determined based on the proportion of the total erroneous items from which the requesting spouse is relieved.

Thus, under the existing regulations, a requesting spouse who is determined not to be eligible for relief from the understatement or deficiency stemming from an erroneous item cannot be separately relieved from a penalty, such as the accuracy-related penalty, related to the item under section 6015. If a requesting spouse is entitled to partial relief (such as relief from two of three erroneous items giving rise to the understatement or deficiency), then the requesting spouse will be entitled to relief from the accuracy-related penalty applicable to those two items.

These regulations propose to move the discussion in current § 1.6015-1(h)(4) to proposed § 1.6015-1(m). Proposed § 1.6015-1(m) additionally clarifies, consistent with the statutory interpretation in current § 1.6015-1(h)(4), that penalties and interest on an underpayment also are not separate items from which a requesting spouse may obtain relief under § 1.6015-4. Rather, relief from penalties and interest on the underpayment will be determined based on the amount of relief from the underpayment to which the requesting spouse is entitled. If a requesting spouse remains liable for a portion of the underpayment after application of § 1.6015-4, the requesting spouse is not eligible for relief under section 6015 for the penalties and interest related to that portion of the underpayment. Cf. Weiler v. Commissioner, T.C. Memo. 2003-255 (a requesting spouse is not relieved from liabilities for penalties and interest resulting from items attributable to the requesting spouse). This position is consistent with how the IRS currently treats relief from penalties and interest after determining the relief from the underlying tax. See IRM 25.15.3.4.1.1(2) (Revised 03/08/2013).

If an assessed deficiency is paid in full, or the unpaid tax reported on the joint return is later paid in full, but penalties and interest remain unpaid, under the proposed rule, a requesting spouse may be considered for relief from the penalties and interest under section 6015. The determination of relief from the penalties and interest is made by considering whether the requesting spouse would be entitled to relief from the underlying tax and not considering the penalties and interest as if they were separate items. A requesting spouse may be relieved from the penalties and interest even if relief in the form of a refund of the payments made on the underlying tax is barred (for example, § 1.6015-1(k)(2) (no refunds allowed under § 1.6015-3) or § 1.6015-1(k)(4) (refund barred by the limitations of sections 6511 or 6512(b)).

Proposed § 1.6015-1(n) provides attribution rules for a portion of an understatement or deficiency relating to the disallowance of certain items. Specifically, § 1.6015-1(n) addresses items that are otherwise not erroneous items, but are disallowed solely due to the increase of adjusted gross income (or modified adjusted gross income) over a phase-out threshold as a result of an erroneous item attributable to the nonrequesting spouse. One common example of this is when the nonrequesting spouse's omitted income increases adjusted gross income so that the Earned Income Tax Credit (EITC) is phased out and the understatement or deficiency partially represents the recapture of the refunded EITC.

Under proposed § 1.6015-1(n), the understatement or deficiency related to the item disallowed due to the increase to adjusted gross income will be attributable to the spouse whose erroneous item caused the increase to adjusted gross income, unless the evidence shows that a different result is appropriate. If the increase to adjusted gross income is the result of erroneous items of both spouses, the item disallowed due to the increase to adjusted gross income will be attributable to the requesting spouse in the same ratio as the amount of the item or items attributable to the requesting spouse over the total amount of the items that resulted in the increase to adjusted gross income. Corresponding rules are proposed to be added to §§ 1.6015-2(b) and 1.6015-3(c)(2)(i) to provide that a requesting spouse knows or has reason to know of the item disallowed due to the increase in adjusted gross income if the requesting spouse knows or has reason to know of the erroneous item or items that resulted in the increase to adjusted gross income. Likewise, for purposes of proposed § 1.6015-4 and Rev. Proc. 2013-34, a requesting spouse knows or has reason to know of the portion of an understatement or deficiency related to an item attributable to the nonrequesting spouse under § 1.6015-1(n) if the requesting spouse knows or has reason to know of the nonrequesting spouse's erroneous item or items that resulted in the increase to adjusted gross income.

Examples are provided to illustrate how this rule applies in situations involving the EITC, the phase-out of itemized deductions, and the application of the alternative minimum tax. This rule, however, can be implicated in other situations. It should be noted that this proposed rule would not apply if there is another reason for disallowing the item, such as no qualifying child for the EITC, no substantiation for a claimed deduction, or the lack of any basis in law or fact for the deduction. In this situation, the normal attribution rules applicable to §§ 1.6015-2, 1.6015-3, and 1.6015-4 apply.

Proposed § 1.6015-1(o) provides a definition of abuse for purposes of proposed §§ 1.6015-2(b) and 1.6015-3(c)(vi). The definition of abuse is taken directly from Rev. Proc. 2013-34, section 4.03(2)(c)(iv).

Only minor substantive changes are proposed to current § 1.6015-2. The proposed amendments reorganize the section, update references, and provide clarification where needed. Proposed § 1.6015-2(a) changes the language in the existing regulations, “the requesting spouse elects the application of this section,” to “the requesting spouse requests relief” consistent with the discussion earlier in this preamble. The definition of “understatement” in current § 1.6015-2(b) is removed as the definition will now be located in proposed § 1.6015-1(h)(7). Current § 1.6015-2(c) is redesignated as proposed § 1.6015-2(b), adds additional facts and circumstances from Rev. Proc. 2013-34 to consider in determining whether a requesting spouse had reason to know, adds a knowledge rule to correspond to proposed § 1.6015-1(n) as discussed earlier in this preamble, and clarifies, consistent with the changes made in Rev. Proc. 2013-34, that abuse or financial control by the nonrequesting spouse will result in the requesting spouse being treated as not having knowledge or reason to know of the items giving rise to the understatement. Current § 1.6015-2(d) is redesignated as proposed § 1.6015-2(c) and provides an updated cross-reference to the most recent revenue procedure providing the criteria to be used in determining equitable relief, Rev. Proc. 2013-34. Current § 1.6015-2(e)(1) is redesignated as proposed § 1.6015-2(d)(1) and the word “only” is removed to clarify the rule. Current § 1.6015-2(e)(2) is redesignated as proposed § 1.6015-2(d)(2) and the example is updated to use more current years and dates, but otherwise no substantive changes were made.

Among other clarifying changes, these regulations propose to clarify the difference between full and partial relief under section 6015(c) and to reflect case law regarding the tax benefit rule of section 6015(d)(3)(B), including new examples.

Proposed § 1.6015-3(a) provides a revised heading and a cross-reference to the definition of deficiency in proposed § 1.6015-1(h)(8).

Section 6015(g)(3) provides that no credit or refund is allowed as a result of an allocation of a deficiency under section 6015(c). Proposed § 1.6015-3(c)(1) clarifies the existing regulations and provides that whether relief is available to a requesting spouse under section 6015(c) is not dependent on the availability of credit or refund. Thus, if a requesting spouse is eligible to allocate the entire deficiency to the nonrequesting spouse, the requesting spouse has received full relief even if the requesting spouse made payments on the deficiency and is not entitled to a refund of those payments because of section 6015(g)(3). Further, the requesting spouse is not eligible to be considered for relief (and a refund) under section 6015(f) for the amount of any paid liability because a prerequisite to relief under section 6015(f) is the unavailability of relief under section 6015(b) or (c) and the spouse received full relief under section 6015(c). A requesting spouse may still be considered for relief (and a refund) under section 6015(b) for the amount of any paid liability. If a requesting spouse only receives partial relief (for example, some part of the deficiency is still allocated to the requesting spouse), then the requesting spouse may be considered for relief under section 6015(f) for the portion of the deficiency allocable to the requesting spouse. A new sentence is added to § 1.6015-3(c)(2)(i) to add a knowledge rule to correspond to proposed § 1.6015-1(n), which, as discussed earlier in this preamble, provides an attribution rule for the portion of a deficiency relating to the disallowance or reduction of an otherwise valid item solely due to the increase in AGI as a result of the disallowance of an erroneous item.

Proposed § 1.6015-3(d)(2)(i) illustrates that, under the tax benefit rule of section 6015(d)(3)(B), the amount of an erroneous item allocated to a requesting spouse may increase or decrease depending upon the tax benefit to the requesting and nonrequesting spouses. Thus, these proposed regulations adopt the holding of Hopkins v. Commissioner, 121 T.C. 73 (2003) (a requesting spouse was entitled to relief from her own item under the tax benefit rule of section 6015(d)(3)(B) because the nonrequesting spouse was the only person who reported income on the returns, and therefore, the only one who received any tax benefit from the item). In addition, five new examples have been added to § 1.6015-3(d)(5) to provide additional guidance on the application of the tax benefit rule of § 1.6015-3(d)(2)(i). Example 7 demonstrates the application of § 1.6015-3(d)(2)(i)(B), which provides that each spouse's hypothetical separate taxable income may need to be determined to properly apply the tax benefit rule. Example 8 demonstrates the holding in Hopkins by showing that a requesting spouse's allocated portion of a deficiency will be decreased when the nonrequesting spouse receives a tax benefit from the item. Example 9 demonstrates the allocation of a liability when the erroneous item is a loss from a jointly-owned investment. Example 10 demonstrates how the tax benefit rule works when the erroneous item is a loss from a jointly-owned investment. In addition, Example 11 is added to demonstrate how the rule in § 1.6015-3(d)(2)(ii) regarding fraud works.

Section 1.6015-3(c)(2)(iv) currently provides that the requesting spouse's joint ownership (with the nonrequesting spouse) of the property that resulted in the erroneous item is a factor that may be relied upon in demonstrating that the requesting spouse had actual knowledge of the item. Under the tax benefit rule of § 1.6015-3(d)(2)(i), as stated earlier in this preamble, a requesting spouse can be relieved of liability for the requesting spouse's own erroneous item if the item is otherwise allocable in full or in part to the nonrequesting spouse under section 6015(d). Therefore, proposed § 1.6015-3(c)(2)(iv) revises the current regulations to clarify that the requesting spouse's separate ownership of the erroneous item is also a factor that may be relied upon in demonstrating that the requesting spouse had actual knowledge of the item. Current § 1.6015-3(c)(2)(v) is redesignated as proposed § 1.6015-3(c)(2)(vi) and the discussion of community property in current § 1.6015-3(c)(iv) is removed and is now located in proposed § 1.6015-3(c)(2)(v). Proposed § 1.6015-3(c)(vi) is revised to clarify, consistent with the changes made in Rev. Proc. 2013-34, that abuse or financial control by the nonrequesting spouse will result in the requesting spouse being treated as not having actual knowledge of the items giving rise to the understatement.

No substantive changes are proposed to current § 1.6015-4. The proposed amendments update references and provide a clarifying change consistent with proposed § 1.6015-3(c)(1), which provides the rule that refunds are not allowed under section 6015(c).

Proposed § 1.6015-4(a) was revised to provide a cross-reference to the definitions of unpaid tax, understatement, and deficiency in proposed §§ 1.6015-1(h)(6), (h)(7), and (h)(8).

Proposed § 1.6015-4(b) was revised to provide a cross-reference to proposed § 1.6015-1(k)(3). The paragraph also clarifies that if only partial relief is available under § 1.6015-3, then relief may be considered under § 1.6015-4 for the portion of the deficiency for which the requesting spouse remains liable.

Proposed § 1.6015-4(c) replaces the citation to Rev. Proc. 2000-15 (2000-1 CB 447) with Rev. Proc. 2013-34, which revised the factors used in determining if the requesting spouse is eligible for equitable relief under section 6015(f).

A notice of proposed rulemaking (REG-132251-11) was published in the Federal Register (78 FR 49242) on August 13, 2013. Those regulations proposed changes to § 1.6015-5 to remove the two-year deadline for taxpayers to file requests for equitable relief under section 6015(f), and other changes related to the time and manner for requesting relief. These proposed regulations revise the notice of proposed rulemaking published on August 13, 2013 to add an effective date provision.

The changes in proposed § 1.6015-6 are intended to update the current regulations to reflect existing practice and guidance. Proposed § 1.6015-6(a)(1) replaces the term “election” under § 1.6015-2 or § 1.6015-3 with “request for relief.” Proposed § 1.6015-6(a)(2) includes a reference to Rev. Proc. 2003-19 (2003-1 CB 371), which provides guidance on a nonrequesting spouse's right to appeal a preliminary determination to IRS Appeals.

Section 1.6015-7 was revised to reflect the amendments to section 6015(e) in the 2006 Act that, as noted earlier in this preamble, conferred jurisdiction on the United States Tax Court to review the IRS's denial of relief in cases in which taxpayers requested equitable relief under section 6015(f), without regard to whether the IRS has determined a deficiency. Prior to these amendments, the United States Tax Court lacked jurisdiction to review section 6015(f) determinations if no deficiency had been determined. The amendments apply to any liability for tax that arose on or after December 20, 2006, and any liability for tax that arose before December 20, 2006, but remained unpaid as of that date. Proposed § 1.6015-7(c) revises the current regulations to reflect the changes to the restrictions on collection and corresponding tolling of the collection statute under section 6502. On versions of the Form 8857 dated before June 2007 a requesting spouse could request relief under just one subsection of section 6015. For claims for relief that were made under sections 6015(b) and (c) (and the corresponding §§ 1.6015-2 and 1.6015-3), the IRS is prohibited from collecting against the requesting spouse (and the collection statute is tolled) beginning on the date the claim is filed. For requests for relief made solely under section 6015(f) (and the corresponding § 1.6015-4), the IRS is prohibited from collecting against the requesting spouse (and the collection statute is tolled) only for liabilities arising on or after December 20, 2006, or liabilities arising before December 20, 2006, but remaining unpaid as of that date. For requests for relief made solely under § 1.6015-4, the restrictions on collection and tolling of the collection statute do not start until December 20, 2006, for any requests filed before that date, assuming the tax remained unpaid as of that date. The restrictions on collection and tolling of the collection statute start as of the date the request is filed for requests filed on or after December 20, 2006.

The only changes to the existing regulations under section 66 are non-substantive changes. Proposed § 1.66-4(a)(3) and (b) replace the citation to Rev. Proc. 2000-15 with Rev. Proc. 2013-34, which revised the factors used in determining whether a requesting spouse is eligible for equitable relief under section 66(c).

Additionally, the effective and applicability date sections in the regulations under section 66 and section 6015 are reorganized to move the effective and applicability date sections within the specific regulation to which the dates apply. The separate effective date sections under §§ 1.66-5 and 1.6015-9 are removed.

Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. In addition, because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Accordingly, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act (5 U.S.C. chapter 6). Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in the preamble under the “Addresses” heading. Treasury and the IRS request comments on all aspects of the proposed regulations. All comments will be available at www.regulations.gov or upon request. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the Federal Register.

The principal author of these regulations is Nancy Rose of the Office of the Associate Chief Counsel (Procedure and Administration).

Accordingly, 26 CFR part 1 is proposed to be amended as follows: