Federal Register Vol. 83, No.146,

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Costruzioni Aeronautiche Tecnam srl Model P2006T airplane. The NPRM was published in the Federal Register on March 19, 2018 (83 FR 11903). The NPRM proposed to correct an unsafe condition for the specified products and was based on mandatory continuing airworthiness information (MCAI) originated by the European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public.

We changed the incorporation by reference of the service information for adding a life limit to the Airworthiness Limitations section of the maintenance program to only a reference. The service information does not provide any specific procedures or instructions for establishing the life limit.

We also inadvertently omitted information for “Contacting the Manufacturer,” which is a standard paragraph for FAA ADs related to MCAIs. We have added that paragraph in the final rule as paragraph (g)(2).

We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for the changes stated above and other minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

Costruzioni Aeronautiche Tecnam srl has issued Service Bulletin No. SB 285-CS-Ed 1, Revision 2, dated February 2, 2018. The service information describes procedures for correcting the part number of the rudder trim actuator in the Airworthiness Limitations section of the FAA-approved maintenance program (e.g., maintenance manual).

We estimate that this AD will affect 20 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with this requirement to incorporate a correction to the Airworthiness Limitations section of the FAA-approved maintenance program (e.g., maintenance manual). The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of this AD on U.S. operators to be $1,700, or $85 per product.

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.

This AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to small airplanes, gliders, balloons, airships, domestic business jet transport airplanes, and associated appliances to the Director of the Policy and Innovation Division.

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

For the reasons discussed above, I certify this AD:

(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.

You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0204; or in person at Docket Operations between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace extending upward from 700 feet above the surface at Memphis International Airport, Memphis, TN to support IFR operations at the airport.

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 19471, May 3, 2018) Docket No. FAA-2017-0754 to amend Class E airspace extending upward from 700 feet above the surface at Memphis International Airport, Memphis, TN, due to the decommissioning of the Elvis NDB and cancellation of the NDB approach, and removal of Olive Branch Airport, Olive Branch, MS, from the legal description to redesignate it in a separate rulemaking.

Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11B dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends Class E airspace extending upward from 700 feet above the surface within an 8-mile radius of Memphis International Airport, Memphis, TN. The segment extending from the 8-mile radius of the airport to 16 miles west of the Elvis NDB is removed due to the decommissioning of the Elvis NDB and cancellation of the NDB approach, and for continued safety and management of IFR operations at the airport.

Also, this action removes the language that excludes the Millington, TN, airspace area to comply with FAA Order 7400.2L, Procedures for Handling Airspace Matters.

Additionally, the airspace listed in the legal description for Olive Branch Airport, Olive Branch, MS, is removed and redesignated in a separate rulemaking.

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class D airspace, removes Class E airspace, and establishes Class E airspace at Olive Branch Airport, Olive Branch, MS, to support IFR operations at the airport.

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 19472, May 3, 2018) for Docket No. FAA-2017-0866 to amend Class D airspace, remove Class E airspace, and establish Class E airspace at Olive Branch Airport, Olive Branch, MS.

Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Class D and E airspace designations are published in paragraphs 5000, 6004, and 6005, respectively, of FAA Order 7400.11B dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR part 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11B, Airspace Designations and Reporting Points, dated August 3, 2017, and effective September 15, 2017. FAA Order 7400.11B is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11B lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by amending Class D airspace to a 4.1-mile radius, (from a 4-mile radius) at Olive Branch Airport, Olive Branch, MS, and removes Class E airspace designated as an extension to Class D, due to the decommissioning of the Olive Branch NDB and cancellation of the NDB approach. Also, this action establishes Class E airspace extending upward from 700 feet or more above the surface at Olive Branch Airport, Olive Branch, MS, (this airspace was removed the from Memphis, TN, airspace in a separate rulemaking).

Additionally, this action makes an editorial change to the Class D airspace legal description replacing Airport/Facility Directory with the term Chart Supplement.

Class D and Class E airspace designations are published in Paragraph 5000, 6004, and 6005, respectively, of FAA Order 7400.11B, dated August 3, 2017, and effective September 15, 2017, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

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

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

Availability and Summary of Material Incorporated by Reference The material incorporated by reference is publicly available as listed in the ADDRESSES section.

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

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

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

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

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

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

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

This amendment provides the affected CFR sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their applicable effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

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

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

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

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

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

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

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

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

Preamble Table of Contents I. Background II. Summary of Public Comments Received on the Interim Final Rule III. Section-by-Section Discussion of the Final Rule IV. Regulatory Flexibility Analysis, Executive Order 13272, Small Business Regulatory Enforcement Fairness Act V. Other Regulatory Considerations I. Background

The SCSEP, authorized by title V of the OAA, is the only federally sponsored employment and training program targeted specifically to low-income, older individuals who want to enter or re-enter the workforce. Participants must be 55 years of age or older, with incomes no more than 125 percent of the Federal poverty level. The program offers participants training at community service assignments in public and non-profit organizations and agencies so that they can gain on-the-job experience. The dual goals of the program are to promote useful opportunities in community service activities and also to move SCSEP participants into unsubsidized employment, where appropriate, so that they can achieve economic self-sufficiency.

The 2016 OAA, Public Law 114-144 (Apr. 19, 2016), amended the statutory provisions authorizing SCSEP and requires the Department to implement the amendments to the SCSEP performance measures by December 31, 2017. See OAA sec. 513(d)(4) (42 U.S.C. 3056k(d)(4), as amended by 2016 OAA sec. 6(d)(4) 1 ). The Department met this statutory deadline when it published the IFR on December 1, 2017 (82 FR 56869). This final rule responds to public comments received and finalizes the IFR.

The IFR included both the definitions of the measures (as required by OAA sec. 513(b)(2)) and the processes used to implement these measures in the conduct of the SCSEP grants. These processes include how the Department and grantees initially determine and then adjust expected levels of performance for the grants, and how the Department determines whether a grantee fails, meets, or exceeds the levels of performance.

The Administrative Procedure Act (APA) authorizes agencies to issue a rule without notice and comment upon a showing of good cause. 5 U.S.C. 553(b)(B). The APA's good cause exception to public participation applies upon a finding that those procedures are “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B). According to the legislative history of the APA, “unnecessary” means “unnecessary so far as the public is concerned, as would be the case if a minor or merely technical amendment in which the public is not particularly interested were involved.” Senate Report No. 752 at p. 200, 79th Cong. 1st Sess. (1945). As explained by the U.S. Court of Appeals for the D.C. Circuit, “when regulations merely restate the statute they implement, notice-and-comment procedures are unnecessary.” Gray Panthers Advocacy Comm. v. Sullivan, 936 F.2d 1284, 1291 (DC Cir. 1991). The Department determined that there was good cause to find that a pre-publication comment period was unnecessary for the IFR. The revisions set forth in the IFR to the previous regulations at 20 CFR part 641 codified statutory changes requiring little to no agency discretion or were technical amendments updating terminology or outdated references to WIA, which WIOA superseded. Therefore, the Department's issuance of the IFR, with provision for post-promulgation public comment, was in accordance with sec. 553(b) of the APA.

The 2016 OAA requires the Department to establish and implement the new SCSEP performance measures after consultation with stakeholders. OAA sec. 513(b)(2). The Department satisfied these statutory requirements when it solicited public input on the definitions and implementation of the statutory performance measures in April and May of 2017. On May 8, 2017, the Department sent an email to 4,529 stakeholders, inviting them to register for the consultation. The Department also informed stakeholders that they could submit written comments after the consultation.

Of the 394 registered participants, 273 attended the consultation on May 16, 2017. The IFR discussed at length the comments received during and after the consultation and, in response to some of those comments, made the following clarifications:

• The changes in the IFR to the SCSEP performance measurement system reflect in large part an alignment of the SCSEP performance measures with the three employment outcome indicators mandated for WIOA core programs under WIOA sec. 116(b)(2)(A)(i)(I) through (III). In addition to these three WIOA employment outcome indicators of performance, SCSEP has three measures related to participation in the program: service level, hours of community service employment, and service to the most-in-need. These three measures are unique to SCSEP and the 2016 OAA amendments retained them unchanged. Although WIOA has several similar measures, these SCSEP measures are not directly applicable to WIOA. In addition, the WIOA primary indicators of performance include effectiveness in serving employers; the corresponding measure for SCSEP under the OAA, as discussed below at § 641.720, is not directly parallel because it includes participants and host agencies, as well as employers.

• All the SCSEP measures will be incorporated into the Participant Individual Record Layout (PIRL, the WIOA performance reporting system), along with other aspects of SCSEP performance.

• Although the 2016 OAA amendments require SCSEP to adopt several of WIOA's primary indicators of performance, SCSEP is independent of WIOA, and SCSEP performance is not included in the WIOA State program or indicator scores.

• While the Department is exploring a new case management system that may replace the SCSEP Performance and Results Quarterly Progress Report (SPARQ) system in whole or in part, grantees must continue using SPARQ until the Department informs them that a new system is available.

• Like the current measures, the new performance measures apply to all grantees, including both State and national grantees.

See Section I of the IFR for a more detailed discussion of the comments received during stakeholder consultation process.

The 2016 OAA changes to the SCSEP performance measurement system reflect in large part an alignment of the SCSEP performance measures with those mandated for WIOA core programs under WIOA sec. 116(b)(2)(A)(i). The WIOA performance measures were implemented in a joint final rule issued by the Departments of Labor and Education on August 19, 2016 (81 FR 55792) (Joint WIOA final rule), after notice-and-comment rulemaking, and are codified in 20 CFR part 677. The IFR, which this final rule finalizes, revised the SCSEP regulations at 20 CFR part 641, subpart G (Performance Accountability) to codify the revised SCSEP performance measures in 2016 OAA sec. 513, which in large part aligns the SCSEP performance measures with the WIOA performance measures. In addition, the IFR made (and this final rule carries forward) technical amendments to other subparts of part 641 to reflect 2016 OAA amendments that aligned the SCSEP program statutory language with WIOA, such as updating outdated terminology and outdated references to WIA, which WIOA superseded.

Coordination between the SCSEP and the WIOA programs continues to be an important objective of the OAA. SCSEP is a required partner in the workforce development system (per WIOA sec. 121(b)(1)(B)(v)), and SCSEP is required to coordinate with the WIOA One-Stop delivery system (OAA sec. 511, 42 U.S.C. 3056i), such as by accepting each other's assessments and Individual Employment Plans (IEPs) (OAA sec. 502(b)(3), 42 U.S.C. 3056(b)(3)). The underlying notion of the One-Stop delivery system is the coordination of programs, services, and governance structures, to ensure customer access to a seamless system of workforce development services. Although there are many similarities to the system established under WIA, there are also significant changes under WIOA that are intended to make substantial improvements to the public workforce delivery system. The Joint WIOA final rule requires partners to collaborate to support a seamless customer-focused service delivery network; requiring that programs and providers co-locate, coordinate, and integrate activities and information, so that the system as a whole is cohesive and accessible for individuals and employers alike.

The Department remains committed to a system-wide continuous improvement approach grounded upon proven quality principles and practices. Although many of the SCSEP regulations remain unchanged from the 2010 SCSEP final rule (75 FR 53786; Sept. 1, 2010), the IFR codified the 2016 OAA revisions to the program that align senior employment services with the workforce development system under WIOA. In particular, the IFR aligned the SCSEP performance measures related to employment and earnings with the performance measures established by WIOA to enhance consistency and coordination between the programs and ensure effective services for older Americans. Section III discusses in more detail the changes implemented by the IFR and finalized by this final rule.

The Department received comments from seven organizations and individuals. Four organizations (three national grantees and an association representing State grantees) submitted substantive comments that addressed issues within the scope of the IFR: Associates for Training and Development (A4TD), Vantage Aging (previously known as Mature Services), Senior Service America (SSAI), and the National Association of States United for Aging and Disabilities (NASUAD); the three individuals submitted non-substantive comments.

The Department considered all substantive comments received as it developed this final rule. In Section III below, “Section-by-Section Discussion of the Final Rule,” the Department summarizes and discusses the input received from A4TD, Vantage Aging, and NASUAD. SSAI resubmitted the same comments it submitted on June 6, 2017, in response to the May 16, 2017 stakeholder webinar, prior to the publication of the IFR. Because the Department fully responded to the SSAI comments in the preamble to the IFR, the Department will not respond further in this preamble except to clarify some of its prior responses.

Three comments from individuals described general dissatisfaction with the SCSEP program and its grantees based on either negative personal experiences or unfavorable anecdotal evidence. The preamble does not address these comments, as they were not in the scope of the rulemaking.

The Department has made no changes to the regulatory text issued in the IFR.

In addition to the changes made to part 641, subpart G (Performance Accountability) codifying the 2016 OAA statutory revisions as described more fully below, the IFR made non-substantive, technical amendments throughout all of part 641 to reflect the 2016 OAA amendments and to align the SCSEP program language with WIOA, such as updating outdated terminology and outdated references to WIA, which WIOA superseded. The Department did not receive any comments on these technical amendments and the final rule adopts them as issued in the IFR.

The remainder of this section-by-section discussion describes in detail only the substantive subpart G revisions.

Throughout this subpart, the Department has revised the term “core indicator(s)” to “core measure(s)” to align the regulation with the 2016 OAA, specifically sec. 513(a), 42 U.S.C. 3056k(a). The amended statute also refers to “indicators.” However, because the statute uses the terms interchangeably, for consistency and to reduce the possibility of confusion, the Department uses only the term “measures” throughout this subpart. Other changes made to the sections of subpart G are described below.

The Department did not receive any comments on this section. The final rule adopts the provision as originally issued in the IFR.

This section of the rule provides definitions of the core measures. The IFR revised the core indicator (now “core measure”) definitions contained in this section to align with the revised core measures set forth in § 641.700 of the IFR. As discussed below and in the IFR, the Department deleted the entirety of former paragraph (b) to remove the definitions for the former “additional indicators,” which the 2016 OAA removed. Thus, as an initial change, the IFR renumbered paragraphs (a)(1) through (6) to (a) through (g) (to include the definition for an added core measure, as discussed below).

The IFR did not revise paragraph (a), renumbered from former paragraph (a)(1), which contains the definition for the first core measure for hours of community service employment as currently implemented.

In paragraph (b), renumbered from former paragraph (a)(2), the IFR included a definition for the second performance measure, “percentage of project participants who are in unsubsidized employment during the second quarter after exit from the project.” The IFR defined this performance measure by the following formula: The number of participants who exited during the reporting period who are employed in unsubsidized employment during the second quarter after the exit quarter, divided by the number of participants who exited during the reporting period, multiplied by 100 so as to be reported as a percentage. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in Training and Employment Guidance Letter (TEGL) 10-16, Performance Accountability Guidance for Workforce Innovation and Opportunity Act (WIOA) Title I, Title II, Title III and Title IV Core Programs, published December 19, 2016.

In paragraph (c), renumbered from former paragraph (a)(3), the IFR included a definition for the third performance measure, “percentage of project participants who are in unsubsidized employment during the fourth quarter after exit from the project.” This performance measure is defined by the following formula: The number of participants who exited during the reporting period who are employed in unsubsidized employment during the fourth quarter after the exit quarter, divided by the number of participants who exited during the reporting period, multiplied by 100 so as to be reported as a percentage. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in TEGL 10-16.

In response to the IFR, the Department received one public comment relating to the employment measures set forth in this section. Specifically, with regard to the fourth quarter unsubsidized employment measure at paragraph (c), the commenter expressed concern that the new fourth quarter unsubsidized employment measure, while simplifying the current measure for employment retention, will require grantees to follow participants for at least an entire year even if the participants did not leave the program for unsubsidized employment. The commenter contended that this core performance measure will place a significant burden on grantees while producing little increase in performance data.

The commenter is correct that the new measure is no longer conditioned on a participant's having been employed in the first quarter after the exit quarter (as the current core measure for employment retention and the additional measure for retention at 1 year require) and, therefore, includes in the pool every participant who exits from SCSEP unless the participant has one of the exclusions from exit. The Department, however, declines to revise the definition for this core measure. Once wage records are available to all grantees, nearly all data for this measure will be gathered without the need for follow-up, and there will be little additional burden on the grantees. See discussion of the use of wage records at § 641.720. Until that time, grantees should first focus their follow-up efforts on those participants who leave the program for unsubsidized employment or who are employed in the second quarter after the exit quarter. Grantees should then follow participants who did not have employment at exit or in the second quarter after exit but who grantees have reason to believe might become employed thereafter. The Department will provide technical assistance and guidance on the new timing and reporting requirements for § 641.710(b) through (d), which are hereinafter called the “three new employment outcome measures”.

In paragraph (d), renumbered from former paragraph (a)(4), the IFR included a definition for the fourth performance measure, “median earnings of project participants who are in unsubsidized employment during the second quarter after exit from the project.” This performance measure is defined by the following formula: For all participants who exited and are in unsubsidized employment during the second quarter after the exit quarter, the wage that is at the midpoint (of all the wages) between the highest and lowest wage earned in the second quarter after the exit quarter. This definition aligns with the definition of the corresponding WIOA performance measure, as explained in TEGL 10-16.

The Department did not receive any comments relating to paragraph (d). The final rule adopts the provision as originally issued in the IFR.

The IFR added a definition in paragraph (e) for the fifth performance measure, “effectiveness in serving employers, host agencies, and project participants.” While this definition is similar to the definition used for this indicator under the 2006 OAA, when it was an additional indicator, the 2016 OAA revised the definition so that it focuses more specifically on effectiveness rather than satisfaction in general. The Department received no comments in response to this definition. The final rule adopts the provision as originally issued in the IFR.

Although the new SCSEP measure of effectiveness parallels the language of the WIOA measure, it differs because it also measures the effectiveness in serving participants and host agencies, as well as employers. The WIOA approach to the measure, which is being piloted until 2019, does not have obvious application to SCSEP's other two customer groups. As a result, for the SCSEP measure, the Department has decided to continue surveying all three customer groups to assess the effectiveness of the services received as an interim measure at least until the WIOA pilot is complete and a WIOA measure is defined in final form. By using the same definition as that of the current customer satisfaction measure during this period, the Department will not require SCSEP customers to change their current practices or take on any additional burden.

To conform to the changes outlined above, the IFR renumbered former paragraph (a)(5) to (f). The IFR also renumbered former paragraph (a)(6)(i) through (xiii) to (g)(1) through (13). Renumbered paragraphs (f) and (g) correspond to the sixth and seventh SCSEP performance measures, the definitions of which were unchanged by the IFR. The Department received no comments in response to these technical changes and they are incorporated into this final rule without change.

The 2016 OAA removed the additional indicators of performance previously established in sec. 513(b)(2) of the 2006 OAA. Therefore, the IFR deleted former paragraphs (b)(1) through (3) that contained definitions for the additional indicators. The Department received no comments in response to these deletions.

In addition to the regulatory text changes discussed above, the IFR made various non-substantive changes to the regulations for purposes of correcting typographical errors and improving clarity.

The Department received several comments related to this provision. The comments are addressed below in the “Employment Outcome Measure” heading.

The IFR made substantial revisions to this section to align with the 2016 OAA, which in large part mirrors the process for establishing the expected performance levels required by WIOA for the title I core programs, as implemented in 20 CFR 677.170.

The IFR revised paragraph (a), which requires agreement between the grantee and the Department for expected levels of performance for the first 2 program years of the grant, to mirror the statutory language in 2016 OAA sec. 513(a)(2)(B) and (C)(i) and align with WIOA sec. 116(b)(3)(A)(iv)(I). Specifically, paragraph (a) of the IFR stated that each grantee must reach agreement with the Department on levels of performance for each measure listed in § 641.700 for each of the first 2 program years covered by the grant agreement. In reaching the agreement, the grantee and the Department must take into account the expected levels of performance proposed by the grantee and the factors described in paragraph (c) of this section. This paragraph also stated that the levels agreed to will be considered to be the expected levels of performance for the grantee for such program years, and the Department may not award funds under the grant until such agreement is reached. Lastly, this paragraph stated that, at the conclusion of negotiations concerning the performance levels with all grantees, the Department would make available for public review the final negotiated expected levels of performance for each grantee, including any comments submitted by the grantee regarding the grantee's satisfaction with the negotiated levels.

The IFR explained that the Department considers PY 2016 and PY 2017 to be the first 2 program years under the current SCSEP grants (i.e., the four-year grant cycle that began in PY 2016). For national grantees, these were the first 2 program years following the last (PY 2016) grant competition. For State grantees, these were the first 2 program years of the current (PY 2016) SCSEP State Plans.

The IFR also revised paragraph (b), which required agreement for expected levels of performance for the third and fourth program years of the grant, to mirror the statutory language provided in 2016 OAA sec. 513(a)(2)(B) and (C)(ii) and to align with WIOA sec. 116(b)(3)(A)(iv)(II). The IFR explained, in keeping with paragraph (a) above, that the Department considers PY 2018 and PY 2019 to be the third and fourth program years of the current (PY 2016) SCSEP grant agreements. Specifically, paragraph (b) stated that each grantee must reach agreement with the Department, prior to the third program year covered by the grant agreement, on levels of performance for each measure listed in § 641.700, for each of the third and fourth program years of the grant. This paragraph stated that, in reaching the agreement, the grantee and the Department must take into account the expected levels proposed by the grantee and the factors described in paragraph (c) of this section. This paragraph also stated that the levels agreed to will be considered to be the expected levels of performance for the grantee for those program years. Lastly, like the requirement in paragraph (a), this paragraph stated that, at the conclusion of negotiations concerning the performance levels with all grantees, the Department would make available for public review the final negotiated expected levels of performance for each grantee, including any comments submitted by the grantee regarding the grantee's satisfaction with the negotiated levels.

The IFR added a new paragraph (c), “Factors,” to require that the negotiated levels of performance must be based on the three factors listed in paragraphs (c)(1) through (3), as required by OAA sec. 513(a)(2)(D) and to align with WIOA sec. 116(b)(3)(A)(v). Paragraph (c)(1) of the IFR stated that the negotiated levels must take into account how a grantee's levels of performance compare with the expected levels of performance established for other grantees. See OAA sec. 513(a)(2)(D)(i) and WIOA sec. 116(b)(3)(A)(v)(I). Paragraph (c)(2) stated that the negotiated levels must be adjusted using an objective statistical model based on the model established by the Department of Labor with the Department of Education in accordance with WIOA sec. 116(b)(3)(A)(viii) and implemented in § 677.170(c). See 29 U.S.C. 3141(b)(3)(A)(viii), OAA sec. 513(a)(2)(D)(ii), and WIOA sec. 116(b)(3)(A)(v)(II). The IFR explained that the objective statistical adjustment model is to account for actual economic conditions and characteristics of participants, including the factors required by WIOA sec. 116(b)(3)(A)(v)(II). Paragraph (c)(3) stated that the negotiated levels must take into account the extent to which the levels involved promote continuous improvement in performance accountability on the core measures and ensure optimal return on the investment of Federal funds. See OAA sec. 513(a)(2)(D)(iii) and WIOA sec. 116(b)(3)(A)(v)(III). The Department stated it would provide the model to grantees prior to the first negotiations under the new performance measures. The initial revision to the adjustment model was in fact presented to the grantees in a webinar held in May 2018, prior to the start of the negotiation period for PY 2018 and PY 2019.

In paragraph (d), the IFR revised the adjustment requirements contained in former paragraph (b). The IFR replaced the adjustment factors specified in former (b)(1) through (3) with the requirement that the Department will, in accordance with the objective statistical model developed pursuant to paragraph (c)(2), adjust the expected levels of performance for a program year for grantees to reflect the actual economic conditions and characteristics of participants in the corresponding projects during such program year. The Department made these revisions in the IFR to align the pertinent regulations with OAA sec. 513(a)(2)(E).

For consistency with the 2016 OAA, the IFR removed the language in paragraphs (a)(1) through (3) of § 641.720 that describes the negotiation process in detail. However, as explained in the IFR, the negotiation process that the Department intends to use under these new performance measures is similar to the process that was used prior to the IFR, and includes similar opportunities for input from the grantees:

• In the spring of 2018, the Department analyzed grantees' baseline performance and issued proposed targets and goals for the next 2 program years, PY 2018 and PY 2019, based on the new adjustment factors.

• If a grantee disagreed with those targets and goals, it was allowed to propose its own goals and request to negotiate. No grantee chose to negotiate revisions to the proposed targets and goals.

• Prior to the negotiation, the grantee was required to provide the Department with the data on which the grantee based its proposed goals.

• The grantee and the Department must reach agreement before funds for PY 2018 and PY 2019 can be approved; the agreed-upon goals will be the expected levels of performance upon which the annual evaluation of grantee performance will be based. If the grantee and the Department fail to reach agreement, no funds may be released.

• At the conclusion of the negotiation, the grantee may submit comments regarding the grantee's satisfaction with the negotiated levels of performance, which the Department will publish, along with the expected levels of performance.

• At the time of the annual evaluation of grantee performance, the expected levels of performance will be adjusted a second time using the latest available adjustment data. The Department will base this evaluation on the newly adjusted levels of performance. See preamble discussion of § 641.740.

• The same process will be followed for subsequent 2-year periods.

In addition to the regulatory text changes discussed above, the IFR made various non-substantive changes for purposes of correcting typographical errors and improving clarity. Those changes have been retained in this final rule.

The new measures implemented by the IFR became effective on January 2, 2018, and the new measures were used during the second half of PY 2017, to negotiate the targets and goals for PYs 2018 and 2019. Performance under the PY 2018 targets and goals will begin to be reported starting July 1, 2018. The SCSEP QPR for PY 2017 will be based on the measures that were in place prior to the IFR, and the QPRs for PY 2018, will be based on the measures established in the IFR (and adopted without change in this final rule).

SCSEP participants who exit during PY 2017 when goals based on the prior measures were still in effect will have their performance reported under the old measures for PY 2017. For this same cohort of exiters, reporting for the core employment outcome measures would also take place throughout PY 2018, under the new measures set forth in the IFR and adopted without change in this final rule, and would be reflected in the grantees' PY 2018 QPRs. For example, a participant who exits in Quarter 3 of PY 2017 will be included in the previous entered employment measure for Quarter 4 of PY 2017; the grantee will also report this participant in the final rule's new measure of employment in the second quarter after exit in Quarter 1 of PY 2018. Since the underlying data required for the new measures that will be reported in PY 2018 are the same data required for the prior measures, grantees will have to follow different timing rules for the collection of data in PY 2018, but they will not be required to collect any new or additional data beyond the data they would have reported under the old measures. The Department will provide technical assistance and guidance on the new timing and reporting requirements. As with the core measures in use prior to the IFR, the grantees will collect data for the additional measures not carried forward in the IFR and now this final rule throughout PY 2017, and the final QPR for PY 2017 will be the last report of the additional measures.

The Department received several comments relating to § 641.720, which are summarized below. The Department considered all of these comments as it finalized the IFR; our responses to each comment are set forth below. This final rule, however, adopts this provision as it was issued in the IFR for reasons discussed below.

A commenter asked for clarification of the calculation of two of the measures: Whether exclusions from exit will still be applied and whether the year-to-date measure for median earnings will be based on cumulative data or an average of the quarterly results.

As the Department stated in the IFR, as part of its adoption of the WIA common measures in PY 2007, SCSEP has been following the WIA exclusions. With the 2016 OAA's adoption of the measures consistent with the WIOA primary indicators of performance, SCSEP will examine the revised WIOA exclusions and will issue revised guidance as appropriate. The calculation of the year-to-date performance will continue to be based on cumulative data, as it has always been. The Department will issue guidance on the calculations and timing rules for all the new measures.

One commenter expressed concern that while achieving unsubsidized employment is a key goal of the SCSEP program, in many States and localities there remains a significant gap between the unsubsidized income needed to make ends meet and the possible reduction of public benefits due to achieving employment; that pursuit of improved performance under the new employment outcome measures could result in worsening the quality of life of SCSEP participants rather than improving it; and that the Department should work with States to identify mechanisms to ensure that every participant's life is improved by participation in the SCSEP program. The commenter recommended that the Department allow States to use additional economic factors such as housing availability and other issues related to affordability and cost of living as a part of their outcome measures. The commenter also recommended that the Department work with partners in the Federal Government to evaluate options for a gradual reduction in benefits for individuals as they leave SCSEP instead of the current benefits cliff.

The Department agrees that SCSEP is designed to improve participants' quality of life, including self-sufficiency. In fact, data from the participant customer satisfaction surveys consistently confirm that the program does effectively improve participants' physical, emotional, and financial quality of life, and that participants who exit from the program are satisfied with SCSEP, even if they do not achieve unsubsidized employment. Section 641.535(a)(3)(iii) of the SCSEP regulations (a section not affected by the IFR or this final rule) recognizes that unsubsidized employment may not be an appropriate goal for all participants and that if it becomes apparent that unsubsidized employment is not feasible, the grantee must modify the participant's IEP and assist the participant with other approaches to self-sufficiency, including transition to other services and programs.

The Department notes also that the goals for the employment outcomes have always been set at a level that recognizes that not all participants will obtain unsubsidized employment and that because seniors generally work part-time hours at lower pay levels, the goals for earnings have also been set at realistic levels. However, the Department disagrees that SCSEP participants in general cannot improve their financial condition through unsubsidized employment. If grantees do their best to help participants find jobs at their highest wage and skill level, many participants can and do achieve economic self-sufficiency.

Finally, the Department has no authority to revise the employment outcome measures required by the 2016 OAA and implemented by the IFR and this final rule. The Department will work with other Federal agencies to explore whether Federal benefits can be reduced gradually when SCSEP participants exit the program for unsubsidized employment. The Department will also consider adding additional economic factors to the statistical adjustment model as suggested by this commenter and other commenters. See discussion of the statistical adjustment model below.

Citing the additional burden the new measures place on grantees to conduct follow-ups and the incompleteness and inaccuracy of case management follow-up, all four commenters urged the Department to allow the use of unemployment insurance wage records to obtain employment outcome data. One commenter also urged the Department to phase out case management follow-up once access to wage records is available.

As the commenters recognized and as stated in the IFR, the Department is investigating access to wage records and hopes to implement aggregate wage record matching for all grantees. However, since wage matching does not provide data on all participants in unsubsidized employment, some supplemental use of case management follow-up would still be required. In addition, the SCSEP program model requires that grantees remain in touch with participants and employers during the four quarters after exit in order to help resolve any problems that may arise and to provide supportive services needed to help participants obtain and retain unsubsidized employment.

The Department will inform the grantees as soon as it ascertains when wage matching will be available to SCSEP and will consult with the grantees about the extent to which follow-up will still be required for both performance reporting and case management. In the meantime, as stated in the IFR, until the access to wage records occurs, all grantees must continue using case management follow-up. Using different methods of data collection would compromise the consistency of the performance measures and would potentially provide an unfair advantage to those grantees with access to wage records. In the meantime, the Department will review the standards for case management follow-up as set forth in various guidance materials, will confer with grantees about the changes in procedures desired, and will issue revised guidance if appropriate.

One commenter provided several comments relating to the negotiation process, including several concerns about the current process. The commenter described challenges that States have reported facing in negotiations on performance levels, including lack of interest from Federal partners, inconsistency regarding negotiations on a regional basis, delay resulting from confusion about what data to provide, and time pressures. The commenter requested that the Department issue guidance to States regarding the types of data the Department would take into account when negotiating performance levels. This commenter also requested that the Department work with other Federal agencies, including the Department of Health and Human Services and the Department of Agriculture, to provide guidance regarding data-sharing between programs such as SNAP, TANF, Unemployment Insurance, and the SCSEP program. Lastly, this commenter recommended that the Department allow for adjustments in the timeline for negotiations and allow for a certain percentage of funds to be released prior to agreement on the goals and/or to provide funds on an interim contingency basis while negotiations are ongoing.

Although the OAA provides that grantees may comment on the negotiation process and that the Department will publish such comments, very few grantees have commented at all since PY 2007, and no grantees have expressed the concerns raised by the commenter. The Department notes that it has been providing annual teleconferences and webinars on the negotiation process each year since PY 2007, and that, during the negotiations themselves, the Department and its subject matter experts make every effort to identify and help grantees locate data that may be useful to them in their negotiations. The Department thus welcomes the commenter's suggestions for improving the negotiation process and will take them under consideration to the extent it has the authority to do so. The Department agrees that all Federal regions should be engaged in the process and that grantees should be given the support they require to participate meaningfully. The Department will work with the Federal Project Officers to ensure that all grantees are aware of their right to negotiate their goals and have a full opportunity to do so. The Department will also ensure that grantees have information about relevant data sources.

As the commenter recognized, however, the requirement to reach agreement on negotiated levels of performance before the Department may release grant funds is contained in the OAA. The Department has no authority to waive or modify that requirement. The Department recognizes that the time period for negotiation is condensed and that negotiations occur during the same time that grantees are preparing their annual grant applications. The need to obtain the most recent baseline data and economic information to use in the goal setting and adjustment process necessitates this timing. The Department shares the commenter's desire to allow for a more relaxed schedule and will explore the possibility of using a more flexible baseline once the new performance measures have been in place long enough for a new baseline to emerge.

One commenter who addressed the new measure of effectiveness in serving SCSEP's three customer groups pointed out that “effectiveness” is more difficult to measure than “satisfaction”, which for this commenter is a more concrete measure. The commenter expressed uncertainty about how well the WIOA pilot project to explore measures of effectiveness will translate to SCSEP. This commenter expressed appreciation for the Department's continuing to utilize the current customer satisfaction measure until a more detailed and rigorous effectiveness measure can be tested and developed. The commenter recommended that the Department create a stakeholder workgroup to collaborate on evaluating the applicability of the WIOA pilot measures to SCSEP, as well as on the modification or development of new measures of effectiveness. A different commenter made a similar recommendation about involving grantees in the exploration and adoption of pilot measures of effectiveness in serving employers.

Another commenter asked whether there would be any changes in the administration, substance, or timeline for the customer satisfaction surveys during the interim period while the WIOA measure of effectiveness is not yet final.

The Department welcomes the suggestions for grantee involvement and reiterates that it will continue to use the current customer satisfaction surveys at least until the WIOA pilot is complete and the new WIOA effectiveness measure is finalized. During this interim period, the Department will explore with grantees, and with its three customer groups, options for best measuring the effectiveness of SCSEP's services, including the suggestions made by the commenters. The Department will also explore ways to improve the efficiency of the current customer surveys (including the use of online surveys and changes to the administration of the employer survey) and will examine what, if any, new or revised questions would support an index of effectiveness as an alternative to the current index of satisfaction. Until the Office of Management and Budget (OMB) approves any proposed changes to the content or methods of administration of the surveys, the currently approved surveys will continue to be administered as approved.

One commenter had several comments that relate to the statistical adjustment model, suggesting that the Department recognize differences between employment prospects for an individual residing in a metro or urban area versus one in a rural or frontier area, which would include allowing for different regional measures within the same State; the Department should consider other factors that influence performance, such as access to affordable housing, transportation, and the interplay of various public benefits programs with one another; and whenever possible, the Department should use data on older workers in its calculations. This includes when determining local and regional employment and unemployment figures, among others.

As the Department stated it would do in the preamble to the IFR, the Department is re-examining its current adjustment model to determine if additional aspects of the WIOA model should be incorporated into the SCSEP model or if other changes are appropriate. This consideration includes accounting for the percentage of participants who reside in rural areas, as well as examining an adjustment for the percentage of participants who are ex-offenders (as suggested by a comment made by SSAI). The Department will also explore whether it can obtain current economic data on the senior population as opposed to the general population. The adjustment model applied to the PY 2018 and PY 2019 proposed targets and goals included five new participant characteristics (including residing in a rural area) and one new economic factor (average weekly wages).

The Department notes that to the greatest extent possible, it uses county-level data in its adjustment model, thereby permitting the adjustment factors to be tailored to the specific service area of each grantee. This approach accounts for regional differences within each grantee's service area, as requested by the commenter. In applying the revised adjustment model, the Department used economic data for the new service areas in which the grantees were located at the time of the goal setting for PY 2018 and PY 2019. See also discussion of baseline in § 641.730.

Although the Department received a few public comments relating to this provision, which are discussed below, the final rule adopts this provision as it was issued in the IFR.

The IFR made several changes in this section to update the Department's transition assistance plans to correspond with the 2016 OAA. As a non-substantive change, the IFR deleted the designation of paragraph (a) and its title “General transition provision,” because the IFR deleted paragraph (b), as discussed below. This section was, thus, left with only two sentences.

The first sentence as revised by the IFR stated that, as soon as practicable after January 2, 2018, the Department would determine whether a SCSEP grantee's performance under the measures in effect prior to January 2, 2018, would have met the expected levels of performance for PY 2018. The second sentence as revised by the IFR stated that if the Department determines that a grantee would have failed to meet those expected levels of performance, then the Department would provide technical assistance to help the grantee to eventually meet the expected levels of performance under the measures in § 641.700, as those measures were revised by the IFR.

The IFR explained that the Department would only make the above determination for the three new employment outcome measures, defined in § 641.710(b) through (d) of the IFR, since no transition is required for the remaining four core measures (three are unchanged, and for the fourth, the “indicators of effectiveness in serving employers, host agencies, and participants,” the IFR stated that the Department would use the same customer satisfaction measure that was used prior to the IFR). In making the determination, the IFR indicated that the Department intended to examine all relevant data, as feasible, in order to provide a crosswalk between the existing measures and the measures implemented in the IFR and to develop a new baseline from which to begin the development of goals for PY 2018 and PY 2019. The IFR promised to provide the analysis to all grantees when it was completed. As set forth above, the Department completed the analysis and cross-walk and provided it to the grantees prior to the development of proposed targets and goals for PY 2018 and PY 2019.

As noted above, the IFR removed paragraph (b) from § 641.730, which provided that PY 2007 would be treated as a baseline year for the most-in-need indicator so that grantees and the Department may collect sufficient data to set a meaningful goal for the measure for PY 2008. The IFR explained that since this provision included dates that have already passed, and given that the Department has documented information on this measure, this provision is no longer required. Therefore, the IFR deleted it from this section.

Some comments from some of the organizations that responded to the IFR, like comments received from the stakeholder webinar, expressed concern that the new employment outcome measures are substantially different from the current SCSEP outcome measures and that there is no baseline upon which goals for the new measures can be set. For this reason, some comments suggested that the Department establish a pilot period for the new employment measures during which there would not be any expected levels of performance.

One commenter noted that, as a result of the 2016 national grantee competition, many national grantees operate in service areas different from their prior service areas and that the economic conditions in the new area are different as well. This commenter urged the Department to use a valid baseline rather than old data in establishing goals for the new measures.

The Department recognizes that all three of the new outcome measures use different calculations from the measures that were in place prior to the IFR, and that it will take time to establish a reliable baseline to use in setting goals for these measures. As stated in the preamble to the IFR, to help determine how performance under the prior measures relates to performance under the new measures, the Department reanalyzed prior grantee performance data reported under the prior measures using the calculations required for the new measures and created a crosswalk between the two sets of measures. Because the recalculation proved to be an inadequate basis for setting the PY 2018 and PY 2019 grantee-expected levels of performance, the Department decided to treat PYs 2018 and 2019 as baseline years for which targets, rather than expected levels of performance, are assigned, and has reserved the right to renegotiate the PY 2019 targets based on actual performance in PY 2018. Moreover, in developing the proposed goals, the Department used the grantees' most recent, reliable baseline performance. Where the recent baseline data were not reliable, the Department used a longer, historical baseline.

One commenter requested that the Department offer training on using the PIRL system and raised several questions related to the transition from SPARQ to PIRL, including whether SPARQ data will migrate to PIRL and whether grantees should anticipate a period of dual entry into both systems. The comment further asked that the Department align its technical documentation with the PIRL data field specifications so that grantees may adjust their internal systems to support the new information codes and that the Department provide advanced notice of the new requirements and training on the new system.

The Department has announced that it is developing a new case management system that is designed to replace SPARQ in whole or in part. The Department anticipates that SPARQ data will be migrated to the new system and that grantees will continue to use SPARQ for exited case records until the conclusion of the reporting of the PY 2017 performance data on or around September 30, 2018. Since grantees will report the new performance measures beginning July 1, 2018, SPARQ is being reconfigured to support the new measures; grantees will continue using SPARQ for at least the first quarter of PY 2018. The Department anticipates that grantees will begin using the new system for active cases in the second or third quarter of PY 2018. The Department has aligned SPARQ data collection for the case management system with the PIRL. The Department will provide details of the new case management system and the transition requirements to the grantees as soon as possible and does anticipate providing training to grantees.

The Department did not receive any comments on this section. The final rule adopts the provision as it was issued in the IFR.

The Department did not receive any comments on this section. The final rule adopts the provision as it was issued in the IFR.

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., requires the Department to evaluate the economic impact of this rule with regard to small entities. The RFA defines small entities to include small businesses, small organizations including not-for-profit organizations, and small governmental jurisdictions. The Department must determine whether the rule imposes a significant economic impact on a substantial number of such small entities.

There are 75 SCSEP grantees; 50 of these are States and are not small entities as defined by the RFA. Six grantees are governmental jurisdictions other than States (four grantees are territories such as Guam; one grantee is Washington, DC; and another grantee is Puerto Rico). Governmental jurisdictions must have a population of less than 50,000 to qualify as a small entity for RFA purposes and the population of these 6 SCSEP grantees each exceeds 50,000. The remaining 19 grantees are non-profit organizations, which includes some large, national non-profit organizations.

The Department has determined that this final rule will impose no additional burden on small entities affected. Since the alignment with WIOA involved only definitions, the grantees are not required to collect any additional information that may cause a burden increase. In addition, the SCSEP program funds provided to grantees cover all such costs.

The Departments certifies that this final rule does not impose a significant economic impact on a substantial number of small entities.

Under Executive Order (E.O.) 12866, OMB's Office of Information and Regulatory Affairs determines whether a regulatory action is significant and, therefore, subject to the requirements of the Executive Order and review by OMB. 58 FR 51735 (Oct. 4, 1993). Section 3(f) of E.O. 12866 defines a “significant regulatory action” as an action that is likely to result in a rule that: (1) Has an annual effect on the economy of $100 million or more, or adversely affects in a material way a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as economically significant); (2) creates serious inconsistency or otherwise interferes with an action taken or planned by another agency; (3) materially alters the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Id. OMB has determined that this final rule is not a “significant regulatory action” under sec. 3(f) of E.O. 12866.

This rule is not an E.O. 13771 regulatory action because this rule is not significant under E.O. 12866.

E.O. 13563 directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; it is tailored to impose the least burden on society, consistent with achieving the regulatory objectives; and in choosing among alternative regulatory approaches, the agency has selected those approaches that maximize net benefits. E.O. 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.

OMB declined review of this final rule because it is not a significant regulatory action.

The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., include minimizing the paperwork burden on affected entities.

A Federal agency may not conduct or sponsor a collection of information unless OMB approves it under the PRA and it displays a currently valid OMB control number. The public is also not required to respond to a collection of information unless it displays a currently valid OMB control number. In addition, notwithstanding any other provisions of law, no person will be subject to penalty for failing to comply with a collection of information if the collection of information does not display a currently valid OMB control number (44 U.S.C. 3512). OMB has approved the information collections contained in this final rule. See ICR Reference Number 201802-1205-003. The information collection is summarized as follows.

Agency: DOL-ETA.

Title of Collection: DOL-Only Performance Accountability, Information, and Reporting System.

Type of Review: Revision.

OMB Control Number: 1205-0521.

Affected Public: State, Local, and Tribal Governments; Individuals or Households; and Private Sector—businesses or other for-profits and not-for-profit institutions.

Obligation to Respond: Required to Obtain or Retain Benefits.

Estimated Total Annual Respondents: 17,532,542.

Estimated Total Annual Responses: 35,064,970.

Estimated Total Annual Burden Hours: 8,938,029.

Estimated Total Annual Other Burden Costs: $6,791,395.

Regulations sections: § 684.420, § 684.610, § 684.700, § 684.800, § 685.210, § 685.400, § 688.420, § 688.610. § 641.700, § 641.710, § 641.720, § 641.730, § 641.740, § 641.750.

For purposes of the Unfunded Mandates Reform Act of 1995, this rule does not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments in the aggregate of more than $100 million, or increased expenditures by the private sector of more than $100 million.

The Department has reviewed this rule in accordance with E.O. 13132 regarding federalism and has determined that it does not have “federalism implications.” The rule does not “have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule defines and implements performance measures for the SCSEP and while States are SCSEP grantees, this rule merely makes changes to data collection processes that are ongoing. Requiring State grantees to implement these changes does not constitute a “substantial direct effect” on the States, nor will it alter the relationship or responsibilities between the Federal and State governments.

E.O. 13045 concerns the protection of children from environmental health risks and safety risks. This rule defines and details the performance measures used by the SCSEP, a program for older Americans, and has no impact on safety or health risks to children.

E.O. 13175 addresses the unique relationship between the Federal Government and Indian tribal governments. The order requires Federal agencies to take certain actions when regulations have “tribal implications.” Required actions include consulting with Tribal Governments prior to promulgating a regulation with tribal implications and preparing a tribal impact statement. The order defines regulations as having “tribal implications” when they have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Department has reviewed this final rule and concludes that it does not have tribal implications. While some tribes may be recipients of national SCSEP grantees, this rule will not have a substantial direct effect on those tribes because, as outlined in the RFA section of the preamble above, there are only small cost increases associated with implementing this regulation. This regulation does not affect the relationship between the Federal Government and the tribes, nor does it affect the distribution of power and responsibilities between the Federal Government and Tribal Governments. Accordingly, we conclude that this rule does not have tribal implications for the purposes of E.O. 13175.

The Department has reviewed this rule in accordance with the requirements of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), the regulations of the Council on Environmental Quality (40 CFR part 1500), and the Department's NEPA procedures (29 CFR part 11). The rule will not have a significant impact on the quality of the human environment and, thus, the Department has not prepared an environmental assessment or an environmental impact statement.

Section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681), requires the Department to assess the impact of this rule on family well-being. A rule that is determined to have a negative effect on families must be supported with an adequate rationale.

The Department has assessed this rule and determines that it will not have a negative effect on families. Indeed, the SCSEP strengthens families by providing job training and support services to low-income older Americans so that they can obtain fruitful employment and enjoy increased economic self-sufficiency.

The Privacy Act of 1974, 5 U.S.C. 552a, provides safeguards to individuals concerning their personal information that the Government collects. The Act requires certain actions by an agency that collects information on individuals when that information contains personally identifiable information such as Social Security Numbers (SSNs) or names. Because SCSEP participant records are maintained by SSN, the Act applies here.

A key concern is for the protection of participant SSNs. Grantees must collect the SSN in order to pay participants properly for their community service work in host agencies. When grantees send participant files to the Department for aggregation, the transmittal is protected by secure encryption. When participant files are retrieved within the internet-based SCSEP data management system of SPARQ, only the last four digits of the SSN are displayed. Any information that is shared or made public is aggregated by grantee and does not reveal personal information on specific individuals.

The Department works diligently to ensure the highest level of security whenever personally identifiable information is stored or transmitted. All contractors that have access to individually identifying information are required to provide assurances that they will respect and protect the confidentiality of the data. ETA's Office of Performance and Technology has been an active participant in the development and approval of data security measures—especially as they apply to SPARQ.

In addition to the above, the Department provides a Privacy Act Statement to grantees for distribution to all participants. The Department advised grantees of the requirement in ETA's Older Worker Bulletin OWB-04-06. Participants receive this information when they meet with a caseworker or intake counselor. When the Department monitors the programs, implementation of this term is included in the review.

This rule is not subject to E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights, because it does not involve implementation of a policy with takings implications.

This regulation has been drafted and reviewed in accordance with E.O. 12988, Civil Justice Reform, and will not unduly burden the Federal court system. The Department has written the regulation so as to minimize litigation and provide a clear legal standard for affected conduct, and the Department has reviewed the regulation carefully to eliminate drafting errors and ambiguities.

This rule is not subject to E.O. 13211, because it will not have a significant adverse effect on the supply, distribution, or use of energy.

The Department drafted this IFR in plain language.

Paperwork Reduction Act

The collections of information contained in these final regulations have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-1953.

The collections of information in these final regulations are in §§ 1.170A-15(a) and (d)(1); 1.170A-16(a), (b), (c), (d), (e), and (f); and 1.170A-18(a)(2) and (b). These collections of information are required to obtain a benefit and will enable the IRS to determine if a taxpayer is entitled to a claimed deduction for a charitable contribution.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

This document contains amendments to the Income Tax Regulations, 26 CFR parts 1 and 602, relating to substantiating and reporting deductions for charitable contributions under section 170 of the Internal Revenue Code. These final regulations reflect amendments to section 170 made by section 883 of the American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418, 1631) (Jobs Act), and sections 1216, 1217, and 1219 of the Pension Protection Act of 2006, Public Law 109-280 (120 Stat. 780, 1079-83) (PPA), which added new rules for substantiating charitable contributions. The final regulations also update cross-references to the section 170 regulations in other regulations.

Section 170(f)(8), which has been in the Code since 1993, provides that no deduction shall be allowed for any contribution of $250 or more, cash or noncash, unless the taxpayer substantiates the contribution with a contemporaneous written acknowledgment of the contribution by the donee organization. The contemporaneous written acknowledgment must include: (1) The amount of cash and a description (but not value) of any property other than cash contributed; (2) a statement of whether the donee organization provided any goods or services in consideration, in whole or in part, for any such cash or property; and (3) a description and good faith estimate of the value of any such goods or services or, if such goods or services consist solely of intangible religious benefits, a statement to that effect.

Section 170(f)(11), as added by section 883 of the Jobs Act, restates, in part, section 155(a) of the Deficit Reduction Act of 1984 and contains reporting and substantiation requirements relating to the allowance of deductions for noncash charitable contributions. Under section 170(f)(11)(C), taxpayers are required to obtain a qualified appraisal for donated property for which a deduction of more than $5,000 is claimed.

Under section 170(f)(11)(D), a qualified appraisal must be attached to any tax return claiming a deduction of more than $500,000. Section 170(h)(4)(B), as added by section 1213 of the PPA, adds the requirement that a qualified appraisal must be included with the taxpayer's return for the taxable year of the contribution for any contribution of a qualified real property interest that is a restriction as to the exterior of a building described in section 170(h)(4)(C)(ii).

Section 170(f)(11)(E), as amended by section 1219 of the PPA, provides statutory definitions of qualified appraisal and qualified appraiser for appraisals prepared with respect to returns filed after August 17, 2006.

Section 170(f)(11)(E)(i) provides that the term qualified appraisal means an appraisal that is (1) treated as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and (2) conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed by the Secretary.

Section 170(f)(11)(E)(ii) provides that the term qualified appraiser means an individual who (1) has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary, (2) regularly performs appraisals for which the individual receives compensation, and (3) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance. Section 170(f)(11)(E)(iii) provides that an individual will not be treated as a qualified appraiser with respect to any specific appraisal unless that individual (1) demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and (2) has not been prohibited from practicing before the IRS by the Secretary under section 330(c) of Title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.

On October 19, 2006, the Treasury Department and the IRS released Notice 2006-96, 2006-2 CB 902 (see § 601.601(d)(2)(ii)(b)), which provides transitional guidance on the definitions of qualified appraisal and qualified appraiser that apply on and after the effective date of the PPA definitions.

Section 170(f)(16) as added by section 1216 of the PPA generally provides that no deduction is allowed for a contribution of clothing or a household item unless the clothing or household item is in good used condition or better.

Section 170(f)(17) as added by section 1217 of the PPA imposes a recordkeeping requirement for all cash contributions, regardless of amount. Specifically, section 170(f)(17) requires a donor to maintain as a record of any cash, check, or other monetary gift (1) a bank record, or (2) a written communication from the donee. The record must show the name of the donee organization, the date of the contribution, and the amount of the contribution.

On December 2, 2006, the Treasury Department and the IRS released Notice 2006-110, 2006-2 CB 1127 (see § 601.601(d)(2)(ii)(b)), which provides rules under section 170(f)(17) for substantiating charitable contributions made by payroll deduction.

On January 8, 2008, the Treasury Department and the IRS released Notice 2008-16, 2008-1 CB 315 (see § 601.601(d)(2)(ii)(b)), which provides rules under section 170(f)(17) for substantiating a one-time, lump-sum charitable contribution of a cash, check, or other monetary gift made through the Combined Federal Campaign (CFC) or a similar program. Taxpayers may rely on Notice 2006-96, Notice 2006-110, and Notice 2008-16 prior to the effective date of these final regulations.

On August 7, 2008, the Treasury Department and the IRS provided guidance on complying with section 170 as amended by the Jobs Act and the PPA in a notice of proposed rulemaking (REG-140029-07) in the Federal Register (73 FR 45908). The Treasury Department and the IRS received comments responding to the notice of proposed rulemaking, and a public hearing was held on January 23, 2009. Copies of the comments received are available for public inspection at www.regulations.gov or upon request. After consideration of the comments received, the Treasury Department and the IRS adopt the proposed regulations as revised by this Treasury decision. The revisions are discussed in this preamble.

The final regulations implement changes made by the Jobs Act and PPA to the substantiation and reporting rules for charitable contributions under section 170. The final regulations set forth the substantiation requirements for contributions of more than $500 under section 170(f)(11)(B) through (D) (added by the Jobs Act); the new definitions of qualified appraisal and qualified appraiser applicable to noncash contributions under section 170(f)(11)(E) (added by the PPA); substantiation requirements for contributions of clothing and household items under section 170(f)(16) (added by the PPA); and recordkeeping requirements for all cash contributions under section 170(f)(17) (added by the PPA).

In addition, these final regulations amend the heading of § 1.170A-13 to alert readers to the updated regulations. The final regulations also update cross-references to the section 170 regulations in other regulations.

Section 1.170A-15 implements the requirements of section 170(f)(17) for cash, check, or other monetary gift contributions, as added by the PPA, and clarifies that these rules supplement the substantiation rules in section 170(f)(8).

A donor may make a charitable contribution of cash, check, or other monetary gift to an organization that collects contributions and distributes them to ultimate recipient organizations (pursuant to the donor's instructions or otherwise). The final regulations adopt the general rule of the proposed regulations that treats as a donee for purposes of sections 170(f)(8) and 170(f)(17) an organization described in section 170(c) or a Principal Combined Fund Organization (PCFO) for purposes of the Combined Federal Campaign (CFC) and acting in that capacity. The CFC is a workplace giving campaign established by Executive Order 10728, as amended by Executive Orders 10927, 12353, and 12404, and administered by the United States Office of Personnel Management (OPM). A PCFO administers the local campaign and acts as a fiscal agent for the CFC.

Some commenters asked whether a blank pledge card provided by a donee organization but filled out by the donor constitutes adequate substantiation for a contribution of cash to a distributing organization. Section 170(f)(17) requires a taxpayer to maintain as a record of a contribution of a cash, check, or other monetary gift either a bank record or a written communication from the donee that shows the name of the donee organization, the date of the contribution, and the amount of the contribution. The proposed and final regulations at § 1.170A-15(b)(2) provide that a bank record includes a statement from a financial institution, an electronic fund transfer receipt, a canceled check, a scanned image of both sides of a canceled check obtained from a bank website, or a credit card statement. In addition, the proposed and final regulations provide that a written communication includes an email. Because a blank pledge card provided by the donee organization to a donor does not show the information required under section 170(f)(17), it is not sufficient substantiation for a cash, check, or other monetary gift.

One commenter noted that because the CFC generally does not include the name of the donee organization on its pledge cards, and a PCFO for purposes of the CFC often is a potential ultimate recipient of a contribution to the CFC, including the name of the PCFO on the pledge card could unduly influence donors to contribute to the PCFO rather than to other eligible donees. The commenter asked that the name of the local CFC campaign be treated as the name of the donee organization. The Treasury Department and the IRS agree with this comment. Accordingly, § 1.170A-15(d)(2)(ii) provides that the name of the local CFC may be used instead of the name of the PCFO and may be treated as the donee organization for purposes of sections 170(f)(8) and 170(f)(17) and § 1.170A-15(d)(1)(ii).

Some commenters asked if a single written acknowledgment can be used to satisfy the substantiation rules under sections 170(f)(8) and 170(f)(17). Section 170(f)(8) does not require that a contemporaneous written acknowledgment by the donee organization include the date of the contribution. In addition, section 170(f)(17) does not require that a written communication from the donee include a statement of whether any goods or services were provided in exchange for the contribution. Although there are different requirements under sections 170(f)(8) and 170(f)(17), § 1.170A-15(a)(3) of the final regulations provides that a single written acknowledgment that satisfies all substantiation requirements under both sections 170(f)(8) and 170(f)(17) is adequate substantiation for contributions of a cash, check, or other monetary gift.

Section 1.170A-16 implements the requirements of section 170(f)(11) for noncash contributions, as added by the Jobs Act, and clarifies that these rules are in addition to the requirements in section 170(f)(8).

Proposed and final § 1.170A-16 provide that a donor who claims a deduction for a noncash contribution of less than $250 is required only to obtain a receipt from the donee or keep reliable records. A donor who claims a noncash contribution of at least $250 but not more than $500 is required only to obtain a contemporaneous written acknowledgment, as provided under section 170(f)(8) and § 1.170A-13(f). For claimed noncash contributions of more than $500 but not more than $5,000, the donor must obtain a contemporaneous written acknowledgment and must also file a completed Form 8283 (Section A), “Noncash Charitable Contributions,” with the return on which the deduction is claimed. For claimed noncash contributions of more than $5,000, in addition to a contemporaneous written acknowledgment, the donor generally must obtain a qualified appraisal and must also complete and file either Section A or Section B of Form 8283 (depending on the type of property contributed) with the return on which the deduction is claimed. For claimed noncash contributions of more than $500,000, the donor must also attach a copy of the qualified appraisal to the return for the taxable year in which the contribution is made.

Section 170(f)(11)(F) provides that for purposes of the $500, $5,000, and $500,000 thresholds in section 170(f)(11), similar items contributed during the taxable year are treated as one property. In determining whether a contribution meets the $250 threshold, § 1.170A-13(f)(1) provides that separate contributions made during the tax year, regardless of whether the sum of those contributions equal or exceed $250, are not combined. The proposed and final regulations also provide that the requirements for substantiation that must be submitted with a return also apply to the return for any carryover year under section 170(d).

In light of recent case law (see Crimi v. Commissioner, T.C. Memo. 2013-51), the paragraph relating to the reasonable cause exception set forth in proposed regulation § 1.170A-16(f)(6) has been deleted from the final regulations because it is inconsistent with the Tax Court's position. In Crimi, the IRS argued that there was no qualified appraisal. The Tax Court discussed the doctrine of substantial compliance with respect to the qualified appraisal regulation, but stated that it was unnecessary to decide whether it was applicable to the petitioners' case because they established that the failure was due to reasonable cause. Specifically, the court stated that a reasonable cause inquiry is “inherently a fact-intensive one, and facts and circumstances must be judged on a case-by-case basis.” Id. at *99. The court found that petitioners reasonably and in good faith relied on their long-time certified public accountant's advice that their appraisal met all the legal requirements to claim the deduction. Thus, the final regulations do not contain a standard for the reasonable cause exception.

A number of commenters expressed concern over appraisers' privacy if the appraiser's social security number is required on qualified appraisals and Forms 8283 (Section B). This concern was addressed by the proposed regulations. Both the proposed and final regulations require an appraiser to use a taxpayer identification number on an appraisal, but that number does not need to be the appraiser's social security number. An appraiser may use an employer identification number, which may be obtained by: (1) Applying on the IRS website (www.regulationsgov); or (2) filing a completed Form SS-4, Application for Employer Identification Number, by mail or by fax. The IRS has modified the instructions to Form 8283 to make clear that an appraiser may use either a social security number or an employer identification number.

One commenter asked whether a Form 8283 can satisfy the requirement for a contemporaneous written acknowledgment under section 170(f)(8). Although no format is prescribed for a contemporaneous written acknowledgment (for example, an email may qualify), a contemporaneous written acknowledgment of a contribution by the donee organization must contain all of the information required by section 170(f)(8)(B). Moreover, section 170(f)(8)(A) states that the acknowledgment is made “by the donee organization.” Only Section B, part IV of Form 8283, completed for property valued at over $5,000, is a donee acknowledgment, and this acknowledgment only contains some of the information required by section 170(f)(8)(B). Accordingly, even a fully-completed Form 8283 does not satisfy the requirements of section 170(f)(8).

Another commenter suggested that the Form 8283 (Section B) should be required to be fully completed, including the appraiser information and the appraised or claimed value of the property, before the donor obtains the donee's signature. Section 1.170A-16(d)(5)(iii) of the proposed regulations provides that specific portions of the Form 8283 (Section B) must be completed before it is signed by the donee, but that the Form 8283 (Section B) does not need to contain certain other information, such as the appraiser information and the appraised or claimed value of the property, before the donee signs the form. Regardless of any benefits that may result from additional information sharing, the public should have the opportunity to comment on any proposed requirement to share additional information with the donee. Accordingly, the final regulations adopt the proposed regulation language without adoption of this suggestion.

One commenter suggested deleting the requirement in the regulations to attach an appraisal to the tax returns for carryover years. Because the need for the IRS to have the appraisal attached to each return reflecting a contribution in excess of $500,000 outweighs the burden on taxpayers to supply it, the final regulations retain this requirement. Accordingly, if the appraisal is required to be attached to the return for the contribution year, it must also be attached to the returns for the carryover years.

As prescribed in section 170(f)(11)(E), as amended by the PPA, § 1.170A-17 of the proposed and final regulations provides definitions for qualified appraisal and qualified appraiser.

One commenter suggested that a transitional rule be included for § 1.170A-17 because additional time may be needed to meet the education and experience requirements in § 1.170A-17 for qualified appraisers. In order to provide appraisers with a reasonable amount of time to meet the new education and experience requirements, the final rules under § 1.170A-17 apply only to contributions made on or after January 1, 2019.

Section 170(f)(11)(E)(i)(II) provides that the term qualified appraisal means an appraisal that is conducted by a qualified appraiser in accordance with generally accepted appraisal standards. Generally accepted appraisal standards are defined in the proposed regulations at § 1.170A-17(a)(2) as the “substance and principles of the Uniform Standards of Professional Appraisal Practice [USPAP], as developed by the Appraisal Standards Board of the Appraisal Foundation.” Several commenters recommended that the final regulations require appraisal documents to be prepared “in accordance with USPAP” and not merely in accordance with the “substance and principles of USPAP.” Other commenters indicated that strict compliance with USPAP would eliminate use of all other appraisal standards, including some that are generally accepted in the appraisal industry. The Treasury Department and the IRS agree that it is beneficial to provide some flexibility by requiring conformity with appraisal standards that are consistent with the substance and principles of USPAP rather than requiring that all appraisals be prepared strictly in accordance with USPAP. Accordingly, the final regulations do not adopt the recommendation to require strict compliance with USPAP and retain the requirement of consistency with the substance and principles of USPAP.

Section 170(f)(11)(E)(ii)(I) and (iii)(I) and § 1.170A-17(b) of the proposed regulations provide that a qualified appraiser is an individual with verifiable education and experience in valuing the type of property for which the appraisal is performed. Some commenters reiterated suggestions made in response to Notice 2006-96 that the final regulations interpret the requirement in section 170(f)(11)(E) that a qualified appraiser have verifiable “education and experience” as requiring verifiable “education or experience.” The Treasury Department and the IRS did not adopt this suggestion in the proposed regulations, and do not do so in the final regulations, because it would be contrary to the clear language of the statute.

Section 1.170A-17(b)(4) of the proposed regulations requires an appraiser to specify in the appraisal the appraiser's education and experience in valuing the type of property and to make a declaration in the appraisal that, because of the appraiser's education and experience, the appraiser is qualified to make appraisals of the type of property being valued. A commenter suggested that, to meet the “verifiable” requirement in § 1.170A-17(b), the appraiser should be required to specify in the appraisal only that the appraiser is a qualified appraiser under § 1.170A-17(b) and that the appraisal was prepared in accordance with the substance and principles of USPAP. The general statement of qualification suggested by the commenter does not demonstrate, as required under section 170(f)(11)(E)(iii)(I), that the appraiser has verifiable education and experience that qualifies the appraiser to prepare the appraisal for that type of property. Accordingly, the final regulations do not adopt this suggestion.

Section 1.170A-17(b)(2)(i) of the proposed regulations provides that an individual is treated as having education and experience in valuing the type of property if, as of the date the individual signs the appraisal, the individual has satisfied the following requirements: (A) Successfully completed professional or college-level coursework in valuing the type of property and has two or more years of experience in valuing the type of property; or (B) earned a recognized appraiser designation for the type of property. One commenter suggested that it is much more difficult to earn a designation from a generally recognized professional appraiser organization under § 1.170A-17(b)(2)(i)(B) than to satisfy the education and experience requirements under § 1.170A-17(b)(2)(i)(A). The commenter suggested that the education and experience requirements be made more stringent. In enacting section 170(f)(11)(E), Congress intended to improve the accuracy of deductions claimed for noncash contributions by requiring qualified appraisers to meet more stringent qualification standards, including by requiring that both education and experience requirements be met. See H.R. Rep. No. 108-548, pt. 1, at 356 (2004). The requirements for education and experience in the proposed regulations are sufficiently stringent as intended by Congress. Accordingly, the final regulations do not adopt this suggestion and retain without modification the requirements for education and experience in the proposed regulations.

Section 170(f)(11)(E)(iii)(I) requires verifiable education and experience in valuing the type of property subject to the appraisal. Section 1.170A-17(b)(2)(i)(A) of the proposed regulations provides that an individual is treated as having education and experience in valuing the type of property if, as of the date the individual signs the appraisal, the individual has successfully completed (for example, received a passing grade on a final examination) professional or college-level coursework in valuing the type of property, and has two or more years of experience in valuing the type of property. One commenter asked whether attendance at a training event that does not include a final examination meets the requirement of successful completion of coursework. The reference to a passing grade on a final examination in § 1.170A-17(b)(2)(i)(A) is merely an example of what is considered successful completion of professional or college-level coursework, and other evidence of successful completion may be sufficient. However, mere attendance at a training event is not sufficient, and evidence of successful completion of coursework is necessary under the final regulations.

Two commenters pointed out that, in addition to generally recognized professional appraiser organizations, a generally recognized professional trade organization may provide coursework that satisfies the requirement for verifiable education in valuing the type of property under § 1.170A-17(b)(2)(i)(A) and (ii)(B). The Treasury Department and the IRS agree with this comment, and the final regulations provide that an appraiser also can satisfy § 1.170A-17(b)(2)(i)(A) and (ii)(B) by successfully completing coursework in valuing the type of property from a generally recognized professional trade organization.

Some commenters objected to the references in the proposed regulations to designations conferred by one particular organization as examples of recognized appraiser designations. The Treasury Department and the IRS do not require or prefer the designation of any particular appraiser organization, and, therefore, the final regulations do not contain examples of any designations.

A number of commenters requested that the Treasury Department and the IRS provide that the final regulations apply to charitable contributions for all federal tax purposes, including estate and gift tax. These regulations are promulgated under Jobs Act and PPA provisions that apply only to income tax deductions for charitable contributions under section 170. No substantive changes were made to the proposed regulations in response to these comments because these comments were beyond the scope of the proposed regulations.

Some commenters suggested that appraisers be allowed to use certain IRS valuation tables, such as those for charitable remainder trusts, other remainder interests in property, and life insurance policies, instead of a qualified appraisal. These tables may be used to value property in certain other contexts, but they do not necessarily provide a fair market value of the property contributed. Therefore, these tables are not acceptable substitutes for a qualified appraisal to substantiate deductions for charitable contributions under section 170.

Another commenter suggested that taxpayers should not be required to substantiate their charitable contribution deduction with a qualified appraisal when they purchase medical equipment, such as a Magnetic Resonance Imaging (MRI) machine, and donate the equipment to a qualified organization. The purchase price of the medical equipment may differ from its fair market value. A qualified appraisal prepared by a qualified appraiser is required to determine the fair market value at the time of contribution. Therefore, no changes were made to the proposed regulations in response to this comment.

Notice 2006-96 provides transitional guidance on the definitions of qualified appraisal and qualified appraiser under section 170(f)(11). Notice 2006-110 provides transitional guidance under section 170(f)(17) for substantiating charitable contributions made by payroll deduction. Notice 2008-16 provides transitional guidance under section 170(f)(17) for substantiating a one-time, lump-sum charitable contribution of a cash, check, or other monetary gift made through the CFC or a similar program. All three notices provide that taxpayers may rely on the notices until final regulations are effective. Accordingly, Notice 2006-110 and Notice 2008-16 are obsolete as of July 30, 2018 and Notice 2006-96 is obsolete as of January 1, 2019.

In general, §§ 1.170A-15, 1.170A-16, and 1.170A-18 apply to contributions made after July 30, 2018. Section 1.170A-17 applies to contributions made on or after January 1, 2019. Taxpayers are reminded that the effective dates of the Jobs Act and the PPA relating to substantiating and reporting charitable contributions precede the effective date of these final regulations, and the Jobs Act and the PPA apply in accordance with their applicability dates. See Notice 2006-96.

This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Department of the Treasury and the Office of Management and Budget regarding review of tax regulations. Further it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. Accordingly, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Although this rule could affect a substantial number of small entities, any economic impact is expected to be minimal. The final rule provides clarifications and simplifications to the existing substantiation and reporting requirements for charitable contributions and are designed to reduce the burden on taxpayers. Further, any substantiation and reporting rules contained in these final regulations that are in addition to the rules in current regulations reflect statutory substantiation and reporting requirements. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business, and no comments were received.

The principal author of these regulations is Charles Gorham of the Office of Associate Chief Counsel (Income Tax and Accounting). Other personnel from the Treasury Department and the IRS participated in their development.

Accordingly, 26 CFR parts 1 and 602 are amended as follows:

Florida Department of Transportation (FDOT) via Quinn Construction Inc, has requested a temporary deviation from the operation that govern the Corey Causeway Bridge across the Gulf Intracoastal Waterway, mile 117.7. This deviation is necessary to facilitate mechanical and electrical repairs, painting, roadway and sidewalk grating replacement which includes concrete removal, spall repair and tender house replacement. The bridge is a double-leaf bascule bridge and has a vertical clearance in the closed to navigation position of 23 feet at mean high water.

The current operating schedule is set out in 33 CFR 117.287(f). Under this temporary deviation, the bridge will operate per the listed schedule but single leaf only and with a 6 hour notice for double leaf openings. This section of the Gulf Intracoastal Waterway is predominantly used by a variety of vessels including U.S. government vessels, small commercial vessels and recreational vessels. The Coast Guard has carefully considered the restrictions with waterway users in publishing this temporary deviation.

Vessels able to pass through the bridge in the closed position may do so at any time. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessel operators can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

I. Table of Abbreviations CFR Code of Federal Regulations COTP Captain of the Port Detroit DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking § Section U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The Coast Guard did not receive the final details of this fireworks display in time to publish an NPRM. As such, it is impracticable to publish an NPRM because we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would inhibit the Coast Guard's ability to protect participants, mariners and vessels from the hazards associated with this event.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Detroit (COTP) has determined that potential hazard associated with fireworks from 9:30 p.m. through 10 p.m. on August 17, 2018 will be a safety concern to anyone within a 350-foot radius of the launch site. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the fireworks are being displayed.

This rule establishes a safety zone from 9:30 p.m. through 10 p.m. on August 17, 2018. The safety zone will encompass all U.S. navigable waters of the Detroit River, Detroit, MI, within a 350-foot radius of position 42°19.529′ N 083°02.436′ W (NAD 83). No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will impact a small designated area of the Detroit River from 9:30 p.m. through 10 p.m. on August 17, 2018. Moreover, the Coast Guard will issue Broadcast Notice to Mariners (BNM) via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a 30 minute safety zone that will prohibit entry into a designated area. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

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

The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The Coast Guard did not receive the final details of this fireworks display in time to publish an NPRM. As such, it is impracticable to publish an NPRM because we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date of this rule would inhibit the Coast Guard's ability to protect participants, mariners and vessels from the hazards associated with this event.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port Detroit (COTP) has determined that potential hazard associated with fireworks from 9:30 p.m. through 10 p.m. on August 14, 2018 will be a safety concern to anyone within a 350-foot radius of the launch site. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone while the fireworks are being displayed.

This rule establishes a safety zone from 9:30 p.m. through 10 p.m. on August 14, 2018. The safety zone will encompass all U.S. navigable waters of the Detroit River, Detroit, MI, within a 350-foot radius of position 42°19.529′ N 083°02.436′ W (NAD 83). No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.

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

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13771 directs agencies to control regulatory costs through a budgeting process. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB), and pursuant to OMB guidance it is exempt from the requirements of Executive Order 13771.

This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will impact a small designated area of the Detroit River from 9:30 p.m. through 10 p.m. on August 14, 2018. Moreover, the Coast Guard will issue Broadcast Notice to Mariners (BNM) via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

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

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

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section above.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Directive 023-01 and Commandant Instruction M16475.1D, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a 30 minute safety zone that will prohibit entry into a designated area. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental Consideration supporting this determination is available in the docket where indicated under ADDRESSES.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

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

The Coast Guard will enforce the Safety Zones; Annual Events in the Captain of the Port Buffalo Zone listed in 33 CFR 165.939 for the following events:

(1) Thunder on the Niagara Hydroplane Boat Races, North Tonawanda, NY; The safety zone listed in 33 CFR 165.939(c)(4) will be enforced from 9 a.m. to 6 p.m. on August 4, 2018, until August 5, 2018.

(2) D-Day Conneaut, Conneaut, OH; The safety zone listed in 33 CFR 165.939(c)(2) will be enforced from 9 a.m. to 5 p.m. on August 17, 2018, until August 18, 2018.

(3) Madison Township Light up the Park, Madison, OH; The safety zone listed in 33 CFR 165.939(d)(1) will be enforced from 9:15 p.m. to 10:15 p.m. on September 2, 2018.

(4) Cleveland National Air Show, Cleveland, OH; The safety zone listed in 33 CFR 165.939(d)(2) will be enforced daily from 9 a.m. to 6 p.m. August 30—September 3, 2018.

(5) Head of the Cuyahoga, Cleveland, OH; The safety zone listed in 33 CFR 165.939(d)(3) will be enforced from 6:45 a.m. to 4:15 p.m. on September 15, 2018.

Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within the safety zone during an enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or his designated representative. Those seeking permission to enter the safety zone may request permission from the Captain of Port Buffalo via channel 16, VHF-FM. Vessels and persons granted permission to enter the safety zone shall obey the directions of the Captain of the Port Buffalo or his designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice of enforcement is issued under authority of 33 CFR 165.939 and 5 U.S.C. 552(a). In addition to this notice of enforcement in the Federal Register, the Coast Guard will provide the maritime community with advance notification of this enforcement period via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Buffalo determines that the safety zone need not be enforced for the full duration stated in this notice he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

I. Why is the EPA taking this action?

On August 25, 2017, the EPA received a letter from the Idaho Department of Water Resources (IDWR), formally requesting that the EPA transfer and directly implement the Class II UIC program in Idaho, pursuant to the Code of Federal Regulations (CFR) at 40 CFR 145.34(a). Class II injection wells inject fluids (1) that are brought to the surface in connection with natural gas storage, or oil or natural gas production; or (2) for the purpose of enhanced oil or natural gas recovery; or (3) for the storage of hydrocarbons, which are liquid at standard temperature and pressure. Idaho received primary implementation and enforcement authority (primacy) for Class I, II, III, IV, and V injection wells under the Safe Drinking Water Act, section 1422, on July 22, 1985. Idaho has since maintained primacy for these injection well classes.

The voluntary transfer of authority for the UIC Class II program to the EPA will allow the EPA to issue Class II permits in Idaho. The EPA will be responsible for the direct implementation of the Class II underground injection control program in Idaho, including permitting, compliance, and enforcement responsibilities, pursuant to the SDWA and federal UIC regulations.

On November 27, 2017, the EPA published a Federal Register proposed rule (82 FR 55968), providing notice of the transfer of Idaho's UIC program for Class II injection wells from Idaho to the EPA and concurrently issuing a proposed rule to amend EPA's UIC regulations to reflect such transfer. The EPA stated that if requested, a public hearing would be held. After receiving multiple hearing requests, the EPA held the public hearing on January 8, 2018, in the city of Boise, Idaho, as detailed in the proposed rule. At the public hearing, and during the 45-day comment period, which ended on January 11, 2018, the EPA received 414 comments from 387 individual commenters. The EPA has reviewed all public testimony and comments on the proposed rule and has determined that the revisions to 40 CFR part 147 will be finalized in this rule as originally proposed.

A state with an approved primacy program may voluntarily transfer UIC program responsibilities to the EPA, pursuant to 40 CFR 145.34(a). The regulations require that the EPA provide notice of such transfer in the Federal Register at least 30 days before the transfer is to occur. 40 CFR 145.34(a)(3). The EPA published a Federal Register proposed rule (82 FR 55968) on November 27, 2017, containing that notice. The regulations do not provide for opportunity to comment on whether to transfer, and accordingly, the EPA did not take comment on such transfer.

EPA's regulations at 40 CFR part 147 set forth the applicable UIC programs for each of the states. This rule makes ministerial revisions to these regulations to reflect the transfer. Specifically, the rule revises 40 CFR part 147, subpart N, to indicate that the Class II UIC program for Idaho is to be directly implemented by the EPA and consists of the UIC program requirements of 40 CFR parts 124, 144, 146, and 148. The EPA took comment only on these revisions.

Section 553(d) of the Administrative Procedure Act, 5. U.S.C. 553(d), provides that the effective date of a substantive rule must be at least 30 days after publication of the rule in the Federal Register, except “as otherwise provided by the agency for good cause.” The EPA has determined that there is good cause for making this final rule effective immediately upon publication because the transfer of primacy back to the EPA simply returns direct implementation and enforcement authority of the UIC Program for Class II wells in Idaho to the EPA. There are currently no Class II permits in effect in Idaho and, therefore, there is no need to transfer or reissue any existing state-issued Class II UIC permits as federal Class II UIC permits. The EPA finds that this constitutes good cause under 5 U.S.C. 553(d).

On November 27, 2017, the EPA issued a proposed rule (82 FR 55968) and requested public comment. The public comment period was open for 45 days and ended on January 11, 2018. The EPA received 414 comments from 387 individual commenters, including comments given at the January 8, 2018, public hearing as well as one comment submitted after the close of the public comment period. Of these comments, only a minority were identified as containing material that was determined to be within the scope of the proposed rule revision. The comments the EPA received and EPA's responses are available in EPA's Docket No. EPA-HQ-OW-2017-0584.

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This action is not an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.

This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2040-0042.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to the rule. This rule does not impose any requirements on small entities; this action withdraws a state program and therein transfers direct implementation of the Class II UIC program to the EPA. We have therefore concluded that this action will have no net regulatory burden for any directly regulated small entities.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This rule does not impose any mandates on small entities; this action withdraws a state program and therein transfers direct implementation of the Class II UIC program to the EPA.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. This action contains no federal mandates for state and local governments and does not impose any enforceable duties on state and local governments. This action merely withdraws a state program (at the voluntary request from Idaho) and therein transfers implementation of the Class II UIC program to the EPA.

This action does not have tribal implications as specified in Executive Order 13175. This action contains no federal mandates for tribal governments and does not impose any enforceable duties on tribal governments. Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it transfers a state program.

This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.

This rulemaking does not involve technical standards.

The EPA has determined that this action is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not establish an environmental health or safety standard. This rule does not impose any health or safety standards; this action transfers a state program and therein transfers direct implementation of the Class II UIC program to the EPA.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. The CRA allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding. The EPA has made a good cause finding for making this final rule effective immediately upon publication, per section 553(d)(3) of the Administrative Procedure Act, 5. U.S.C. 553(d)(3), as discussed in section II, including the basis for that finding.

For the reasons set out in the preamble, the Environmental Protection Agency amends 40 CFR part 147 as follows:

EPA is finalizing certain revisions to the 2015 regulations for the disposal of CCR in landfills and surface impoundments to: (1) Provide States with approved CCR permit programs under the Water Infrastructure Improvements for the Nation (WIIN) Act or EPA where EPA is the permitting authority the ability to use alternate performance standards; (2) revise the GWPS for four constituents in Appendix IV to part 257 1 for which maximum contaminant levels (MCLs) under the Safe Drinking Water Act have not been established; and (3) provide facilities which are triggered into closure by the regulations additional time to cease receiving waste and initiate closure. This additional time will, among other things, better align the CCR rule compliance dates with the upcoming Effluent Limitations Guidelines and Standards Rule for the Steam Electric Power Generating Point Source Category (ELG rule). The ELG rule is currently scheduled to be proposed in December 2018 and finalized in December 2019.

EPA is finalizing certain revisions to the regulations at 40 CFR part 257, subpart D. In the March 2018 proposal, the Agency proposed six alternative performance standards which participating states (i.e., those which have an EPA-approved CCR permit program under the WIIN Act) may adopt and sought comment on additional alternatives. This action finalizes two of the proposed alternative performance standards. These final revisions will allow a Participating State Director or EPA where EPA is the permitting authority to: (1) Suspend groundwater monitoring requirements if there is evidence that there is no potential for migration of hazardous constituents to the uppermost aquifer during the active life of the unit and post-closure care; and (2) issue technical certifications in lieu of the current requirement to have professional engineers issue certifications. The Agency is also finalizing a revision of the GWPSs for the four constituents in Appendix IV to part 257 without MCLs, in place of background levels under § 257.95(h)(2).

In the March 2018 proposal, the Agency also took comment on revisions to several provisions of the 2015 CCR rule. Of those proposed changes, the Agency is now revising the deadline by which two categories of CCR units closing for cause must initiate closure: (1) Where the facility has detected a statistically significant increase from an unlined surface impoundment above a GWPS; and (2) where the unit is unable to comply with the aquifer location restriction.

Of particular note, in the March 2018 action, the Agency proposed four changes from the 2015 CCR rule associated with the settlement agreement entered on April 18, 2016, which resolved four claims brought by two sets of plaintiffs against the final CCR rule. See USWAG et al v EPA, No. 15-1219 (DC Cir. 2015). In this action, Agency will not be taking final action on any of the proposed amendments. As explained previously, provisions from the proposed rule that are not addressed in this action will be addressed in a subsequent rule-making action.

EPA intends that the provisions of this rule be severable. In the event any individual provision or part of this rule is invalidated, EPA intends that this would not render the entire rule invalid, and that any provision that can continue to operate will be left in place.

This rule applies to all CCR generated by electric utilities and independent power producers that fall within the North American Industry Classification System (NAICS) code 221112 and may affect the following entities: Electric utility facilities and independent power producers that fall under the NAICS code 221112. This discussion is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This discussion lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not described here could also be regulated. To determine whether your entity is regulated by this action, you should carefully examine the applicability criteria found in § 257.50 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.

EPA is finalizing the following: (1) A provision that authorizes the Participating State Director to issue certifications in lieu of a professional engineer (PE); (2) a provision that authorizes the Participating State Director to approve the suspension of groundwater monitoring if a “no migration” demonstration can be made; and (3) a revision of the GWPSs for the four constituents in Appendix IV to part 257 without MCLs, in place of background levels under § 257.95(h)(2). In addition, the Agency is finalizing an extension to the deadline by which facilities must cease the placement of waste in CCR units closing for cause in two situations: (1) Where the facility has detected a statistically significant increase over the groundwater protection standard from an unlined surface impoundment; and (2) where the unit is unable to comply with the aquifer location restriction. Provisions from the proposed rule that are not addressed in this rule will be addressed in a subsequent rulemaking action.

These regulations are established under the authority of sections 1006(b)(1), 1008(a), 2002(a), 4004, and 4005(a) and (d) of the Solid Waste Disposal Act of 1970, as amended by the Resource Conservation and Recovery Act of 1976 (RCRA), as amended by the Hazardous and Solid Waste Amendments of 1984 (HSWA) and the Water Infrastructure Improvements for the Nation (WIIN) Act of 2016, 42 U.S.C. 6905(b)(1), 6907(a), 6912(a), 6944, and 6945(a) and (d). These authorities are discussed in more detail in Section III.C of this preamble.

This action is expected to result in net cost savings amounting to between $27.8 million and $31.4 million per year when discounting at 7 percent and annualized over 100 years. It is expected to result in net cost savings of between $15.5 million and $19.1 million per year when discounting at 3 percent and annualized over 100 years. Further information on the economic effects of this action can be found in Section V of this preamble.

On April 17, 2015, EPA finalized national minimum criteria for the disposal of CCR as solid waste under Subtitle D of the Resource Conservation and Recovery Act (RCRA) titled, “Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities,” (80 FR 21302) (CCR rule). The CCR rule regulated existing and new CCR landfills and existing and new CCR surface impoundments and all lateral expansions of CCR units. It is codified in subpart D of part 257 of Title 40 of the Code of Federal Regulations. The criteria consist of location restrictions, design and operating criteria, groundwater monitoring and corrective action requirements, closure and post-closure care requirements, and record keeping, notification and internet posting requirements. These criteria were designed to be self-implementing. The rule also required any existing unlined CCR surface impoundment that is contaminating groundwater above a regulated constituent's groundwater protection standard to stop receiving wastes and either retrofit or close, except in certain circumstances.

The rule was challenged by several parties, including a coalition of regulated entities and a coalition of environmental organizations. See, USWAG et al. v. EPA, No. 15-1219 (D.C. Cir. 2015). Four of the claims, a subset of the provisions challenged by the industry and environmental Petitioners, were settled. The rest were briefed and are currently pending before the U.S. Court of Appeals for the D.C. Circuit, awaiting resolution. On November 7, 2017, EPA sought remand without vacatur of five additional subsections of the rule on the grounds that EPA intended to reconsider those provisions. That request is also pending before the court.

The WIIN Act, which amends Section 4005 of the Resource Conservation and Recovery Act (RCRA), was enacted in 2016 to provide EPA additional authorities including the authority to review and approve state CCR permit programs. It also requires EPA to establish and carry out a permit program for CCR units in Indian Country, and for units in nonparticipating States, to achieve compliance with the current CCR rule or successor regulations. The WIIN Act provided that EPA may use its information gathering and enforcement authorities under RCRA sections 3007 and 3008 to enforce the CCR rule or permit provisions.

On September 13, 2017, EPA granted petitions from the Utility Solid Waste Activities Group (USWAG) and AES Puerto Rico LLP, requesting the Agency initiate rulemaking to reconsider provisions of the 2015 final rule.2 EPA determined that it was appropriate and in the public interest to reconsider provisions of the final rule addressed in the petitions, in light of the issues raised in the petitions as well as the new authorities in the WIIN Act.

In October 2017, the D.C. Circuit Court of Appeals directed EPA to file a status report with the court indicating its schedule for addressing issues contained in the petitions for reconsideration. In the status report filed in November 2017, EPA stated that it anticipated it would complete its reconsideration of all provisions in two phases. The first phase would be proposed in March 2018 and finalized no later than June 2019 and the second phase would be proposed no later than September 30, 2018 and finalized no later than December 2019. EPA indicated that in the first phase, the March 2018 proposal, EPA would continue its process with respect to those provisions which were remanded back to EPA in June 2016. These are: (1) Requirements for use of vegetation as slope protection; (2) provisions to clarify the type and magnitude of non-groundwater releases that would require a facility to comply with some or all of the corrective action procedures set out in §§ 257.96 through 257.98; and (3) the addition of Boron to the list of constituents in Appendix IV of part 257, the detection of which triggers assessment monitoring and corrective action requirements. EPA's March 2018 action contained proposals covering these remanded provisions.

In March 2018, EPA also proposed certain provisions that would allow the approval of alternative performance standards by Participating State Directors. These proposed alternative performance standards would allow a state with an approved permit program or EPA to: (1) Use an alternative risk-based GWPS for Appendix IV constituents where no MCL exists; (2) modify the corrective action remedy in certain cases; (3) suspend groundwater monitoring requirements if a “no migration” demonstration can be made; (4) establish an alternate period of time to demonstrate compliance with the corrective action remedy; (5) modify the post-closure care period; and (6) allow Participating State Directors to issue technical certifications in lieu of the current requirement to have professional engineers issue certifications. For Tribal lands and in non-participating states where Congress has specifically provided appropriations for EPA, the proposal defined “State Director” to mean the “EPA Administrator or their designee”. EPA also requested comment on potential revisions to several other provisions of the CCR rule and on other issues.

One topic EPA took comment on in the March 2018 proposed rule was on the groundwater monitoring compliance dates and if 90-days was a sufficient amount of time. While the Agency is not taking any final action on this topic in this action, EPA wishes to ensure that all parties understand the current rule and the relevant implementation deadlines. The Agency responded to a letter from the Utility Solid Waste Activities Group clarifying the deadlines and timeframes related to detection monitoring and the necessary statistical analysis for the groundwater monitoring.3 EPA clarified that the alternate source demonstration in detection monitoring (§ 257.94(e)(2)) does not run concurrently with the 90-day time frame in § 257.94(e)(1) or § 257.95(b). EPA also clarified that, assuming a facility elected to take advantage of the 90-day option in § 257.94(e)(2) [to demonstrate that a source other than the CCR unit is the source of contamination], January 14, 2019 as the deadline for facilities to make their initial determination of whether there has been the detection of a statistically significant increase of an Appendix IV constituent above the relevant groundwater protection standard in the downgradient wells. EPA noted that conducting the statistical analysis on two sets of sampling occurs only in this first round of assessment monitoring. All other statistical analyses on subsequent rounds of on-going semi-annual or annual sampling under assessment monitoring must be conducted following the single set of samples obtained during that sampling event.

EPA is taking final action on certain provisions in this rulemaking: (1) Allowing a Participating State Director to issue certifications in lieu of a professional engineer (PE); (2) allowing a Participating State Director to approve the suspension of groundwater monitoring if a demonstration of “no migration” can be made; and (3) establishing alternative GWPSs for four Appendix IV constituents without MCLs in place of the background levels required under § 257.95(h)(2). In addition, the Agency is extending the deadline by which facilities must cease the placement of waste in CCR units closing for cause in two situations: (1) Where the facility has detected a statistically significant increase over the GWPS from an unlined surface impoundment; and (2) where the unit is unable to comply with the aquifer location restriction. Provisions in the proposed rule that are not addressed in this rulemaking will be addressed in a subsequent rulemaking.

The agency received over 160,000 comments on the proposed rule. The majority of commenters focused on the four provisions remanded back to the Agency in 2016, as well as the six provisions proposed in response to passage of the WIIN Act. A number of commenters argued that no revisions were necessary to the April 2015 final CCR rule.

The areas on which EPA received the most substantial industry and state comments were: Support for the establishment of risk-based alternative GWPSs for constituents that do not have an MCL, support for the extension of compliance deadlines, support for modification of the alternative closure provisions, and allowing certifications by a Participating State Director in lieu of a PE. Most of the environmental organizations and individual citizens commented that the proposals would decrease protection of human health and the environment, especially if the facilities allow CCR units to leak contaminants into groundwater. Other comments related to topics that will be discussed in future rulemaking actions. Discussions of the specific comments germane to this rulemaking are provided in the relevant sections of this rule.

EPA conducted a public hearing on April 24, 2018, in Arlington, VA. There were 79 speakers and a total of 120 registered attendees. Testimony at the public hearing focused generally on the proposed amendments of allowing the use of alternative performance standards. Several speakers commented on: Allowing alternate performance standards for the groundwater protection standards where no MCL is established, allowing Participating State Directors to issue certifications in lieu of a PE, and the overall risks, especially health risks, related to CCR. In addition to the testimonies that were entered into the rulemaking record, over 25 additional documents were submitted in hard copy and entered into the docket (see EPA-HQ-OLEM-2017-0286).

RCRA section 1006(b)(1) directs EPA to integrate the provisions of RCRA for purposes of administration and enforcement and to avoid duplication, to the maximum extent practicable, with the appropriate provisions of other EPA statutes. Section 1006(b) conditions EPA's authority to reduce or eliminate RCRA requirements on the Agency's ability to demonstrate that the integration can be done in a manner consistent with the goals and policies expressed in the chapter and in the other acts referred to in this subsection. 42 U.S.C. 6005(b)(1). See Chemical Waste Management v. EPA, 976 F.2d 2, 23, 25 (D.C. Cir. 1992).

RCRA section 1008(a) authorizes EPA to publish “suggested guidelines for solid waste management.” 42 U.S.C. 6907(a). RCRA defines solid waste management as “the systematic administration of activities which provide for the collection, source separation, storage, transportation, transfer, processing, treatment, and disposal of solid waste.” 42 U.S.C. 6903(28).

Pursuant to section 1008(a)(3), the guidelines are to include the minimum criteria to be used by the states to define the solid waste management practices that constitute the open dumping of solid waste or hazardous waste and are prohibited as “open dumping” under section 4005. Only those requirements promulgated under the authority of section 1008(a)(3) are enforceable under section 7002 of RCRA.

RCRA section 4004(a) generally requires EPA to promulgate regulations containing criteria for determining which facilities shall be classified as sanitary landfills (and therefore not “open dumps”). The statute directs that, “at a minimum, the criteria are to ensure that units are classified as sanitary landfills only if there is no reasonable probability of adverse effects on health or the environment from disposal of solid wastes at such facility.” 42 U.S.C. 6944(a).

RCRA section 4005(a), entitled “Closing or upgrading of existing open dumps” generally establishes the key implementation and enforcement provisions applicable to EPA regulations issued under sections 1008(a) and 4004(a). Specifically, this section prohibits any solid waste management practices or disposal of solid waste that does not comply with EPA regulations issued under RCRA section 1008(a) and 4004(a). 42 U.S.C. 6944(a). See also 42 U.S.C. 6903(14) (definition of “open dump”). As a general matter, this means that facilities must be in compliance with any EPA rules issued under section 4004(a) or be subject to suit for “open dumping” 42 U.S.C. 6945. RCRA section 4005 also directs that open dumps, i.e., facilities out of compliance with EPA's criteria, must be “closed or upgraded”.

RCRA section 4005(d) provides that States may submit a program to EPA for approval, and permits issued pursuant to the approved state permit program operate in lieu of the Federal requirements 42 U.S.C. 6945(d)(1)(A). To be approved, a State program must require each CCR unit to achieve compliance with the part 257 regulations (or successor regulations) or alternative State criteria that EPA has determined are “at least as protective as” the part 257 regulations (or successor regulations). State permitting programs may be approved in whole or in part [42 U.S.C. 6945(d)(1)(B)]. States with approved CCR permitting programs are considered “participating states”.

In states without an approved program, EPA is to issue permits, subject to the availability of appropriations specifically provided to carry out this requirement 42 U.S.C. 6945(d)(2)(B). The FY 2018 Omnibus Appropriations Act provided $6 million to EPA for the purpose of developing and implementing a Federal permit program for the regulation of CCR in nonparticipating states. Public Law 115-141. In addition, EPA is the permitting authority for CCR units in Indian Country. The statute expressly provides that facilities are to continue to comply with the CCR rule or successor regulations until a permit (issued either by an approved state or by EPA) is in effect for that unit 42 U.S.C. 6945(d)(3), (6).

During the rulemaking process for the 2015 CCR rule, EPA received numerous comments requesting that EPA authorize state permit programs and adopt alternative performance standards that would allow state regulators or facilities to “tailor” the requirements to particular site-specific conditions. Many requested EPA adopt particular alternative performance standards found in EPA's municipal solid waste landfill (MSWLF) regulations in 40 CFR part 258. 4 Although the CCR rule was largely modeled on the MSWLF regulations, as explained in both the 2010 proposed and 2015 final rules, under the statutory provisions relevant to the CCR rule, EPA lacked the authority to establish a program analogous to part 258, which relies on approved states to implement the federal criteria through a permitting program. See, e.g., 80 FR 21332-21334. In the absence of a state oversight mechanism to ensure that alternative standards would be appropriate, EPA concluded at that time it could not adopt many of the “more flexible” performance standards in part 258 that commenters requested. Id at 21333.

However, in 2016, Congress, with the passage of the WIIN Act, amended RCRA to establish a permitting scheme, analogous to that established for MSWLFs. Under these new provisions, States may now apply to EPA for approval to operate a permit program to implement the CCR rule. As part of that process, a State program may also include alternative State standards, provided EPA has determined they are “at least as protective as” the CCR regulations in 40 CFR part 257. 42 U.S.C. 6945(d)(1)(B), 6945(d)(1)(C).

In light of the WIIN Act, EPA examined the existing 40 CFR part 258 regulations to evaluate the performance standards that rely on a state permitting authority, to determine whether any of them could now be incorporated into the part 257 CCR regulations. To develop the proposed rule, EPA evaluated whether there was sufficient evidence in the record for those regulations to support incorporating either the part 258 MSWLF provision or an analogue into the part 257 CCR regulations.

Based on the results of this evaluation, EPA proposed to adopt six alternative performance standards modeled after part 258, which would allow a Participating State Director to: (1) Establish alternative risk-based GWPS for constituents where no MCL exists; (2) Modify the corrective action remedy in certain cases; (3) Suspend groundwater monitoring requirements if a “no migration” demonstration can be made; (4) Establish an alternate period of time to demonstrate compliance with the corrective action remedy; (5) Modify the post-closure care period; and (6) Issue technical certifications in lieu of a professional engineers. Under the proposal, EPA would have the same authority to establish alternative performance standards in non-participating states, subject to appropriations, and in Tribal Country, as a Participating State Director would. EPA explained that these alternative performance standards were modeled after part 258 provisions in the MSWLF regulations that appeared to have been adopted based solely on a finding that they would protect human health and the environment; EPA believed that the facts supporting those original determinations would also support a finding that the provisions met the standard under RCRA section 4004(a).

EPA received a number of comments on this overall approach. Several commenters agreed that the record supporting any of the current provisions under the part 258 regulations would support revisions to the part 257 regulations. EPA also received comments stating that the proposed alternative protection standards failed to satisfy the requirements of RCRA section 4004(a). These commenters claimed that the record on which the proposals had relied was inadequate. Specifically, the commenters argued that EPA had in fact considered facilities' “practicable capability in developing every provision of the rule, and so none were based exclusively on addressing the risks to health and the environment. These commenters also criticized the risk assessment conducted to support the part 258 regulations, claiming that it failed to consider the risks to sensitive subpopulations, that the only impact it evaluated was the risk to human health from drinking MSWLF-contaminated groundwater, and only if drinking water wells were within one mile of the MSWLF, and that in any event the characteristics of (and therefore the risks posed by) MSWLF and CCR units are very different. These commenters also argued that EPA could not rely on the 2014 risk assessment conducted for the CCR rule to support the proposals without first evaluating whether the assumptions in that assessment are consistent with the results of the recently conducted groundwater monitoring, which they claim shows that the groundwater at almost all facilities is contaminated by at least one of the constituents in Appendix IV.

EPA is continuing to evaluate a number of technical issues raised in the comments. At the same time, the Agency recognizes the need to begin to implement the WIIN Act and to facilitate the transition to regulation of CCR through permit programs in a timely manner in order to address the urgent concerns presented by facilities that are faced with criteria that may be subject to change through this and other rulemaking actions and quickly approaching compliance deadlines that may require substantial investments and impact operational decision-making. EPA is also mindful that States are in the process of considering whether to seek approval or their regulatory programs, and in some cases, are in the process of developing those programs; greater certainty regarding the kinds of provisions that EPA currently has the record to approve would consequently be highly desirable in order to effectuate the purpose behind the WIIN Act. Accordingly, while EPA continues to evaluate the concerns raised regarding the 1991 and 2014 risk assessments, the Agency is finalizing at this time a select number of provisions that either do not rely on those materials for support to meet the standard in RCRA section 4004(a) or rely on portions that are not implicated by the technical issues under consideration.

EPA is adopting two of the proposals modeled after the existing provisions in 40 CFR part 258: (1) The Participating State Director may suspend groundwater monitoring requirements if there is evidence that there is no potential for migration of hazardous constituents to the uppermost aquifer during the active life of the unit and the post-closure care period; and (2) The Participating State Director may decide to certify that certain regulatory criteria have been met in lieu of the exclusive reliance on a qualified PE. EPA is also adopting revised GWPS for constituents without a MCL under § 257.95(h)(2). After consideration of comments received, EPA has set risk-based values using the methodology discussed in the proposal. In addition, the Agency is finalizing an extension to the deadline by which facilities must cease the placement of waste in CCR units closing for cause in two situations: (1) Where the facility has detected a statistically significant increase over the groundwater protection standard from an unlined surface impoundment; and (2) where the unit is unable to comply with the aquifer location restriction. Further discussion of these comments received on these provisions and the bases on which EPA is adopting them is in their respective sections of this preamble.

For any of the proposed performance standards, EPA requested comment on whether the facility or owner operator should be required to post the specific details of the modification of the performance standard to the facility's publicly accessible website or require any other recordkeeping options. Based on comments received, and to maintain transparency facilities with a site-specific performance standard, such as suspending groundwater monitoring in the event a no migration demonstration can be made, EPA is requiring posting of specific details of the modification to a publicly accessible website. This is discussed further below.

The CCR rule requires existing CCR surface impoundments and landfills to cease receiving waste and initiate closure under certain circumstances. For existing CCR surface impoundments, these situations include unlined CCR surface impoundments whose groundwater monitoring shows an exceedance of a GWPS (§ 257.101(a)(1)); CCR surface impoundments that do not comply with the location criteria (§ 257.101(b)(1)); and CCR surface impoundments that are not designed and operated to achieve minimum safety factors (§ 257.101(b)(2)). The current CCR regulations also require existing CCR landfills that do not comply with the location criteria for unstable areas to close (§ 257.101(d)(1)). In all of these situations, also referred to as “closure for cause” in the preamble to 2015 CCR final rule, the current CCR regulations specify that the owner or operator of the unit must cease placing any waste into the CCR unit and initiate closure activities within six months of making the relevant determination that the CCR unit must close.

After considering comments received in response to the March 15, 2018 proposed rule, as well as information in the rulemaking petitions submitted by USWAG and AES Puerto Rico,5 the agency finds it appropriate to finalize an extension to the deadline by when owners or operators must cease the placement of waste in existing CCR surface impoundments closing for cause in two situations. The two situations include the deadlines applicable to: (1) Existing CCR surface impoundments that are unable to comply with the location restriction regarding placement above the uppermost aquifer; and (2) Existing unlined CCR surface impoundments whose groundwater monitoring shows an exceedance of a groundwater protection standard. The agency is not at this time making any revisions to the other deadlines that apply to existing CCR surface impoundments or to any of the deadline requirements that apply to new and existing CCR landfills and new CCR surface impoundments. The two subunits below explain the approach and rationale for the amendments to certain deadlines for these two situations.

In the March 15, 2018 proposed rule, EPA solicited public comment on whether the deadlines to comply with the location restrictions at §§ 257.60 through 257.64 are appropriate in light of the WIIN Act (83 FR 11598). The Agency sought comment on whether an alternative deadline, either through a permit program established under the WIIN Act or one that applies directly to the facility itself during an interim period, would be more appropriate to facilitate implementation of the WIIN Act. Owners and operators of existing CCR surface impoundments must complete the required demonstrations for five location restrictions 6 no later than October 17, 2018.7 An owner or operator that fails to complete any one of the demonstrations by the deadline would trigger the closure requirements of § 257.101(b)(1), which requires the owner or operator of the unit to cease placing CCR and non-CCR wastestreams into the impoundment and close the impoundment in accordance with the closure provisions of the regulations.

EPA received numerous comments regarding the current deadlines associated with the location restrictions. Many commenters stated their support for extending the current deadlines to complete the required demonstrations for the location restrictions and, in particular, the location restriction for placement above the uppermost aquifer. These commenters stated that deadline extensions would allow time for both the proper implementation of the WIIN Act and the finalization of other substantive CCR rule revisions contemplated in the March 15, 2018 proposal, and would be consistent with the standard in RCRA section 4004(a), while limiting facilities' expenditure of significant resources and avoiding the initiation of irreversible operational changes, including the forced closure of impoundments (and potentially the power plants themselves) under the current compliance deadlines. Commenters also stated that extensions of the location restriction deadlines is necessary to ensure alignment of key implementation and operational decisions under the CCR rule with EPA's schedule for issuing revisions to the effluent limitations guidelines (ELGs) and pretreatment standards for the Steam Electric Power Generating Point Source Category.8 Some commenters recommended that the deadline for determining whether existing impoundments meet the aquifer separation location restriction should be keyed to a specific time following EPA's issuance of a final rule allowing for an alternative risk-based option for meeting this location restriction. Other commenters supported extending deadlines until after EPA finalizes the amendments contemplated in the March 15, 2018 proposal and states have time to adopt the rule revisions into their state regulations. Some commenters suggested that deadlines be extended a specific amount of time following the effective date of a final rule or to specific dates. These commenters recommended extensions ranging from 120 days to 12 months from the final rule's effective date and, while other commenters suggested deadlines be extended until November 2020. At a minimum, these commenters stated that EPA should extend the timeline related to the obligation to enter into forced closure under § 257.101. Finally, commenters stated that it is common practice for an agency to extend regulatory deadlines in circumstances where a regulation is under reconsideration.

Other commenters opposed any extension of the compliance deadlines associated with the location restrictions. These commenters stated that an extension is unwarranted due to the long history of delays in setting federal standards and the adverse impacts to human health and the environment from improperly sited CCR units. Commenters stated that facilities have had several years to prepare for meeting the location restrictions and that an extension of the deadline is unnecessary because the facilities should already have sufficient information to determine whether their CCR units comply with the location restrictions. Finally, these commenters point out that several utilities have already sought approval from state regulators to close CCR units that are not in compliance with the location restrictions. A compliance extension would thus penalize companies that have made good-faith efforts to comply with the current rule, while rewarding companies that have not prepared properly to comply.

EPA first considered whether to extend the deadlines by which owners or operators of CCR surface impoundments must complete the location restrictions demonstrations in §§ 257.60 through 257.64. Such a rule revision would have the effect of delaying the date that facilities would need to determine whether its CCR units are in compliance with the location restrictions. Most of the commenters raised concern about the current deadlines based on the assumption that the technical performance standards would subsequently be revised, either because EPA was reconsidering those criteria or because States would revise them as part of their permit programs. The commenters provided no data or other information to suggest that compliance with the existing location restriction demonstration deadlines presents technical difficulties or is otherwise infeasible. Rather the primary technical concern raised by the comments was the need for more time to develop or find alternative capacity to replace any units that cannot comply with the location criteria. As one commenter explained. in a typical state, the process to modify a major wastewater discharge permit as required to reroute non-CCR waste water streams can take more than a year to complete. This commenter also provided concrete examples to support their contention that it may take 18-36 months to find alternate capacity for their non-CCR wastes streams.

For a simple project—which the commenter described as a site that (1) does not provide base load generation, and thus there would be minimal impact to project timing due to planned unit outages to install the piping re-routes and associated mechanical and electrical connections; (2) has fewer streams to re-route, operates intermittently, and (3) has straightforward low volume waste steams (i.e., technically definable in terms of quantity and quality)—the overall duration (18 months) is three times the 6-month duration provided for by the existing regulations.

By contrast, a more complex site the overall duration is approximately 36 months—nearly six times longer in duration than currently provided for in the existing CCR rule. For a more complex site, the current water balance may indicate there are over 50 non-CCR individual waste streams which go to the CCR impoundment. Additionally, each unit utilizes an FGD that produces a waste stream, which also goes to the CCR impoundment. The FGD waste water stream has the most complex water chemistry and variability of any water stream in the plant. Complex project in terms of the number of streams to re-route, its more consistent operation (and scheduled outages), and its complex water chemistry associated with several of the non-CCR wastestreams. Additionally, the large number of streams to deal with, some of which only flow intermittently, further complicates the process design of what treatment system is needed. The water treatment process equipment alone requires a schedule of 13 months to procure, fabricate, and deliver to the plant site (excluding construction). When these efforts are properly stacked and staggered consistent with accepted engineering and project management practice, the overall duration is approximately 36 months.

In both examples discussed previously, the commenter explained that the current regulation also provides inadequate time for proper start-up and commissioning. Reports from industry indicate that it can take several months to properly tune and commission a large water treatment plant. The commenter stated that the six months in the existing rule is, at best, barely adequate to properly tune a complex wastewater treatment plant to steady state operation accounting for quantity and quality variations in the non-CCR water streams.

After considering all of the comments, EPA considers that the potential for revisions to the technical criteria themselves is too speculative at this stage to form the basis for a regulatory revision. EPA received no concrete proposals or suggestions for possible modifications to the technical criteria themselves. Nor does EPA currently have any potential options under consideration. And none of the States that have submitted applications (or with whom EPA has had discussions) for program authorization included any alternative location criteria. Accordingly, EPA has determined not to revise the deadlines to complete the requisite demonstrations.9

However, EPA acknowledges that legitimate concerns have been raised about the feasibility of complying with the current closure timeframes. EPA considers that the issues discussed above are not unique to the commenter, but are shared by facilities across the industry. And these concerns are equally relevant in this context, as units that do not comply with the location requirements must close pursuant to § 257.101(b)(1).

EPA also takes very seriously the concern that facilities not be prematurely compelled to make potentially irreversible operational changes or otherwise be forced to invest in compliance measures that may subsequently need to be modified. This was part of the reason that EPA originally chose to align key implementation and operational decisions under the CCR rule with EPA's schedule for issuing the effluent limitations guidelines and pretreatment standards (ELGs) for the Steam Electric Power Generating Point Source Category to be appropriate. The ELG requirements will be highly relevant to facility's decisions regarding the development of alternative capacity to manage non-CCR wastestreams. EPA is currently in the process of rulemaking to consider revising certain standards for existing ELGs sources; that rulemaking is projected to be completed by December 2019. EPA recently changed the earliest ELG compliance date for FGD and bottom ash wastewater to October 2020 to account for these potential revisions. See 82 FR 43494. EPA's original concern thus continues to be highly relevant.

To address these concerns, EPA therefore considered whether an extension of the deadline in the closure for cause provisions in § 257.101(b)(1) that would better coordinate the compliance and implementation deadlines between the CCR and ELGs rules, as suggested by many of the commenters, was warranted. Such a rule revision would still require facilities to make the requisite location restriction demonstrations by the deadlines specified earlier (i.e., October 17, 2018), but would extend the timeframe during which the facility could continue to use the unit, and thereby provide the facility with more time to adjust its operations. This approach would allow facilities to better coordinate their engineering, financial and permitting activities under the two rules, and would account for EPA's on-going ELG rulemaking. Therefore, EPA is extending the closure for cause trigger from the six-month period currently specified in the rule until October 31, 2020, which increases that time period by approximately 18 months. The agency selected the date to coordinate with the revised compliance date for the ELG requirements. The agency anticipates completing the ELGs rulemaking by December 2019 and providing nine months from the rule's likely publication in January 2020 would be sufficient for facilities to make informed decisions to meet the requirements of both rules. That 18-month period also corresponds with the lower end amount of time estimated to be needed to find alternative capacity for non-CCR watestreams.

Finally, EPA considered whether to apply a time extension to all location restrictions, or a subset of them. Commenters consistently identified the placement above the uppermost aquifer location restriction as the critical standard, and so EPA has limited its revision to address this specific concern. This time extension does not affect other deadlines in the regulations, and facilities therefore are required to comply with all requirements of an operating facility (e.g., inspections), which are designed to ensure that the facility operations will meet the statutory standard during this extension period.

The agency solicited comment in the March 15, 2018, proposed rule on appropriate time frames for the assessment monitoring requirements (83 FR 11599). The 2015 regulation establishes a groundwater monitoring program consisting of detection monitoring, assessment monitoring and corrective action. Because the current assessment monitoring program includes a series of 90-day time periods in which an owner or operator is to perform the required analysis and demonstrations, EPA sought comment on whether 90 days is an appropriate time period for the assessment monitoring requirements in light of the WIIN Act. The agency specifically requested comment on whether alternative time periods are necessary to perform the required analysis and demonstrations and whether such alternative time periods would be more appropriate to facilitate implementation of the WIIN Act and any amendments to the CCR regulations as a result of the March 15, 2018 proposed rule.

The groundwater monitoring program requires an owner or operator of a CCR unit to install a system of monitoring wells and specify procedures for sampling these wells, in addition to methods for analyzing the groundwater data collected, to detect the presence of specified constituents and other monitoring parameters released from the units. Among other requirements, the 2015 regulations required facilities to have installed the groundwater monitoring system and initiated detection monitoring no later than October 17, 2017.10 Some CCR units are currently operating under the assessment monitoring provisions of the regulations. Facilities monitoring groundwater under the assessment monitoring program are required to close or retrofit an unlined CCR surface impoundment if the monitoring results show that the concentrations of one or more of the constituents listed in Appendix IV to part 257 are detected at statistically significant levels above any GWPS. § 257.101(b)(1).

EPA received numerous comments on this issue. The general theme of those comments supportive of an extension was similar to that summarized in the previous subsection addressing location restrictions. Many commenters emphasized that an extension is needed to properly implement the objectives of the WIIN Act. Commenters stated that without an extension of the assessment monitoring deadlines, there would be little to no practical effect from the proposed revisions because facilities will have to make irreversible decisions and investments based on the 2015 rule. Many of these commenters identified two proposals of greatest concern: (1) The ability of facilities to establish risk-based GWPSs for Appendix IV constituents without MCLs; and (2) the incorporation of risk-based flexibility into the corrective action program. These commenters stated that the current schedule of the assessment monitoring program does not provide time for these provisions to take effect before some facilities will be compelled to initiate corrective action and/or forced to close could qualify for the new alternative closure provision. Some commenters also argued that the existing deadline associated with implementing the GWPS, in particular those associated with assessment monitoring are too short to adequately identify the source and extent of an exceedance. Commenters urged the Agency to extend these deadlines or, at a minimum, to defer the obligation to establish groundwater protection standards until after EPA adopts these two proposals.

Commenters also stated that an extension is necessary to align key implementation and operational decisions under the CCR rule with EPA's schedule for revising the ELGs for the Steam Electric Power Generating Point Source Category. Other commenters suggested that deadlines be extended a specific amount of time following the effective date of a final rule. These commenters recommended extensions ranging from 120 days to 12 months from the final rule's effective date.

Other commenters opposed any extension of the deadlines associated with the assessment monitoring program. These commenters stated that an extension is unwarranted due to the long history of delays in setting federal standards and the adverse impacts to human health and the environment from improperly sited CCR units. Commenters stated their opposition to revising the regulations that would allow facilities to continue to CCR units that are unlined and already contaminating groundwater.

EPA first considered the request to extend the assessment monitoring deadlines to allow States the opportunity to establish alternate risk-based GWPS under § 257.95(h). Most of the commenters raised concern about the current deadlines based on the assumption that the GWPS would subsequently be revised as part of a State-approved permit program. But the requested extension would have delayed the initiation of closure under § 257.101(a)(1) and corrective action provisions of §§ 257.96 through 257.98 for all constituents, not merely for the four without MCLs that commenters believed were likely to be revised.

As discussed Unit IV.B of this preamble, EPA is establishing health-based GWPSs for all four of the constituents in Appendix IV without established MCLs. These revised standards, because they are health-based standards, are not expected to be affected by State programs, which alleviate the concern that facilities will be forced to take action in response to standards that are likely to be revised. EPA therefore has no basis to revise the assessment monitoring deadlines.

Nevertheless, as noted previously, numerous commenters raised concern that compliance with the current closure requirements is not technically feasible. These concerns, and the considerations motivating EPA to revise the deadlines for the aquifer location criterion, are equally relevant in this context, as unlined surface impoundments units that are leaking must close, in accordance with § 257.101(a)(1). EPA therefore considered whether an extension of the deadline in § 257.101(a)(1) to initiate the closure of unlined surface impoundments, similar to the extension of the deadlines for the location restrictions, would address the commenters' concerns. Such a provision would require facilities to follow the assessment monitoring procedures and determine whether any contaminants have been detected at statistically significant levels above the GWPS established under § 257.95(h). A facility that makes such a determination would still be required to initiate corrective action to clean up the contamination in the aquifer, but could continue to use the unit for an extended period, which would provide the facility with more time to adjust their operations. This approach would allow facilities to better coordinate their engineering, financial and permitting activities under the two rules, and would align with EPA's recent and on-going ELG rulemakings. Therefore, EPA has extended the closure for cause trigger by the same 18-month period granted for the location restrictions. The agency selected the date October 31, 2020, to coordinate with the revised earliest compliance date for the ELG requirements. The Agency anticipates completing the ELG rulemaking by December 2019 and providing nine months from the rule's likely publication in January 2020, for facilities to make appropriate decisions knowing the requirements of both rules.

This time extension does not affect other deadlines or any other requirement in the regulations, and facilities therefore remain obligated to comply with all requirements of an operating facility (e.g., inspections), which are designed to ensure that the facility operations will meet the statutory standard during this extension period.

The 2015 CCR rule required the CCR unit owner or operator to set the GWPS at the MCL or to background for all constituents in Appendix IV to part 257 that are detected at a statistically significant level above background. MCLs are levels of constituent concentrations promulgated under section 1412 of the Safe Drinking Water Act. If no MCL exists for a detected constituent, then the GWPS needed to be set at background. In cases where the background level is higher than the promulgated MCL for a constituent, the GWPS was to be set at the background level.

In March 2018, EPA proposed to amend the 2015 CCR rule to incorporate certain requirements from 40 CFR part 258 that would allow Participating State Directors, and EPA where it is the permitting authority, flexibility to approve an alternative GWPS, which was required to be derived in a manner consistent with Agency guidelines. Some of the risk guidelines used to support establishment of the part 258 regulations had since been replaced or supplemented, so the proposal referenced the updated versions. Specifically, EPA cited to the Supplementary Guidance for Conducting Health Risk Assessment of Chemical Mixtures, 11 which supplements 51 FR 34014 (September 24, 1986); the Guidelines for Developmental Toxicity Risk Assessment, 12 which amends 51 FR 34028 (September 24, 1986); and the Guidelines for Carcinogen Risk Assessment, 13 which amends 51 FR 33992 (September 24, 1986). Also, EPA proposed to add guidance on deriving a reference dose, Reference Dose (RfD): Description and Use in Health Risk Assessments. 14

EPA also proposed to incorporate the part 258 requirement that the alternative GWPS be based on scientifically valid studies conducted in accordance with the Toxic Substances Control Act Good Laboratory Practice Standards (40 CFR part 792) or the equivalent. For non-carcinogens, EPA proposed to require that States use a reference dose with a hazard quotient (HQ) of 1 as the upper bound on risk, to establish the alternative GWPS. This methodology was the same as that used to establish the technical criteria in the 2015 CCR regulation. EPA's proposal explained that reliance on this methodology was reasonable as it would ensure that this provision (and any alternative GWPS eventually established under this provision) would meet the requisite statutory standard. Examples of groundwater values consistent with the proposed requirements were provided, including Action Levels promulgated under the Safe Drinking Water Act and the Regional Screening Levels for Chemical Contaminants at Superfund Sites.15 EPA solicited comment on the revised approach to establishing an alternative GWPS.

Significant comments were received in support of the proposal to allow States to approve an alternative GWPS. Commenters stated that States have robust regulatory frameworks to regulate groundwater protection, that allowing this flexibility is consistent with how requirements for MSWLFs are implemented under Subtitle D, and that the oversight and enforcement authorities provided in the WIIN Act allow EPA to ensure States will set protective standards. Commenters also stated that risk-based alternative GWPS would be more appropriate than the current requirement to use background levels where no MCL has been established for an Appendix IV constituent.

Comments were also received opposing the proposal to allow Participating State Directors to approve an alternative GWPS. Concerns raised included lack of resources or technical expertise at state agencies, and the failure to require any alternative GWPS to be protective of sensitive subgroups, which is included in the MSWLF regulations at 40 CFR 258.55(i). Commenters opposed to this proposal raised concerns that it would: Establish vague, unenforceable guidelines; fail to address ecological risk or cancer risk; ignore health-based exposure concentrations that are already developed; and would ultimately allow states to increase risks to human health and the environment above the statutory standard. Commenters also called attention to that allowing Participating State Directors to set alternative standards could result in variability in regulatory standards for chemicals that present the same health risks, regardless of geography. Commenters also raised concerns about protectiveness of the proposed approach and EPA's ability to use the part 258 record to support providing discretion to Participating State Directors. One group of commenters maintained that it is arbitrary and insufficiently protective to let states establish GWPS where EPA has already established risk-based levels for Appendix IV constituents with no established MCL, also citing the Superfund program's “Regional Screening Levels” (RSLs).

Some comments requesting that EPA consider established, available health-protective benchmarks for Appendix IV constituents, such as RSLs, and well-established assessment methodology for developing more site-specific GWPS. One industry commenter maintained that “Of particular relevance to the CCR Rule are the risk-based policies and resources for the protection and remediation of impacted groundwater that U.S. EPA has developed. Specifically, U.S. EPA has established Regional Screening Levels (RSLs) to assess potential human health risks from chemicals in soil, water, and air. . . . These values assist risk assessors in determining whether levels of constituents at a site may warrant further investigation or cleanup, or whether no further investigation is required.” The commenter goes on to explain that RSLs, while protective, are significantly higher than background concentrations of cobalt, lithium, and molybdenum collected by USGS. Using the RSLs instead of background would avoid corrective action costs of cleaning up to background levels without providing any health benefit. See EPA-HQ-OLEM-2017-0286-1314, Attachment 2, pp. 2. An environmental commenter, concerned about the potential for states to set their own standards, said, “In the case of EPA's coal ash regulations, not only is EPA in a better position to establish health-protective levels for each non-MCL constituent, but the Agency has already done so.” The commenter goes on to say that “If EPA chooses to allow groundwater protection standards other than background, those standards must be no less stringent than the EPA RSLs or health advisories.” See EPA-HQ-OLEM-2017-0286-2136 pp. 134-139.

In the proposal, EPA also solicited comment on whether an alternative risk-based GWPS could be established by an independent technical expert or experts where there is no approved permitting authority. Numerous commenters opposed this suggestion, for reasons including: (1) EPA previously rejected that approach in the 40 CFR part 258 regulations, which restricted this provision to Participating State Directors; (2) EPA does not provide an adequate record to support such a proposal; (3) Such a regulation, if finalized, would fail to satisfy the protectiveness standard in RCRA section 4004(a). Commenters in support of this primarily cited the pending compliance dates in the CCR rule as a reason to allow an alternative GWPS to be established under the self-implementing program. Commenters expressed concern that by the time States receive approval of permitting programs and EPA establishes its own permitting program, groundwater monitoring deadlines would have passed and it would be too late to establish alternative GWPSs. To illustrate this point, one industry commenter stated that half of its CCR units could be forced to initiate alternate source demonstrations or corrective action assessment based solely on having detected Appendix IV constituents with no MCLs above background levels. Commenters stated that the oversight and enforcement authorities provided to EPA by the WIIN Act would ensure that site-specific alternative GWPS established by independent experts are protective.

EPA agrees with commenters that State programs are unlikely to be developed and approved prior to the critical deadlines in the CCR rule. EPA continues to evaluate technical issues, and the various concerns raised by the commenters, but the Agency has developed the alternative adopted today that does not rely on the part 258 record for support, and also balances commenters' concerns. EPA has developed a specific GWPS for each of the four constituents in Appendix IV without an MCL, to be used in place of the default background concentrations currently required under § 257.95(h)(2). Adopting national criteria will provide health-based standards available to facilities now to use to compare against monitored groundwater concentrations and develop cleanup goals. Note that a State Director may always seek approval for alternative State criteria as part of the process under the WIIN Act; this could, for example, include the establishment of alternative GWPS for the constituents listed in Appendix IV. See 42 U.S.C. 6945(d)(1)(B)(ii), (C), requiring the Administrator to approve a State permit program that allows a State to include technical standards for individual permits or conditions of approval that differ from the criteria under part 257 of title 40, Code of Federal Regulations if, based on site-specific conditions, the Administrator determines that the technical standards established pursuant to a State permit program are at least as protective as the criteria under that part.

Specifically, the Agency is adopting the following health-based levels as the GWPSs for the four Appendix IV constituents without a designated MCL: 6 micrograms per liter (µg/L) for cobalt; 40 µg/L for lithium, and 100 µg/L for molybdenum. EPA is adopting the alternative GWPS for lead at 15 µg/L. These levels were derived using the same methodology that EPA proposed to require States to use to establish alternative GWPS (See, 83 FR 11598-11599, 11613). The methodology follows Agency guidelines for assessment of human health risks of an environmental pollutant. This means that these GWPSs are expected to be concentrations to which the human population could be exposed to on a daily basis without an appreciable risk of deleterious effects during a lifetime.

Specifically, EPA used the equations in the Risk Assessment Guidance for Superfund (RAGS) Part B to calculate these revised GWPS.16 RAGS Part B provides guidance on using drinking water ingestion rates and toxicity values to derive risk-based remediation goals. The use of these methods, consistent with EPA risk assessment guidelines addresses commenters' concerns about protecting sensitive populations. EPA relied upon relevant exposure information from the 2008 Child-Specific Exposure Factors Handbook, 17 the Exposure Factors Handbook: 2011 Edition 18 and the 2014 Human Health Evaluation Manual, Supplemental Guidance: Update of Standard. 19 Values based on residential receptors were used to capture the range of current and future potential receptors. EPA identified toxicity values according to the hierarchy established in the 2003 Office of Solid Waste and Emergency Response Directive 9285.7-53,20 which encourages prioritization of values from sources that are current, transparent and publicly available, and that have been peer reviewed. Finally, EPA used the same toxicity values (reference doses) that were used in the risk assessment supporting the 2015 CCR Rule. Cancer slope factors (CSF) were not identified for any of the relevant constituents. The finalized GWPS for cobalt, lithium, and molybdenum were set using a target based on a HQ = 1 for Participating State Directors to follow.

Commenters noted that a reference dose (RfD) has not been established for lead because of the difficulty in identifying a “threshold” level, below which adverse effects are not known or anticipated to occur. EPA acknowledges the commenters' concern and has set the GWPS for lead at the Action Level established under section 1412 of the Safe Drinking Water Act, which addresses comments received supporting the use of existing EPA risk-based standards. Because transport through ground water is the primary risk pathway identified in the 2014 Risk Assessment, this revised GWPS is anticipated to be protective of human health at these sites.

The current regulations at § 257.90 require all CCR units, without exception, to comply with the groundwater monitoring and corrective action requirements of §§ 257.90 through 257.98. The final CCR rule at § 257.91(a)(2) requires the installation of groundwater monitoring wells at the waste boundary of the CCR unit.

EPA is adopting a final provision that incorporates only minimal revisions from the proposal. The Agency recognizes that certain hydrogeologic settings may preclude the migration of hazardous constituents from CCR disposal units to groundwater resources. Requiring groundwater monitoring in these settings would provide little or no additional protection to human health and the environment. EPA considers that the final criteria are sufficiently precise and determinate that they will ensure that waivers are granted only in those rare situations, and therefore, EPA is incorporating the revised provision into the part 257 regulations.

As proposed, the Participating State Director would be allowed to suspend the groundwater monitoring requirements under §§ 257.90 through 257.95 if the owner or operator can demonstrate that there is no potential for migration of any CCR constituents from that CCR unit to the uppermost aquifer during the active life of the unit, closure, and the post-closure care period. The demonstration must be certified by a PE or approved by a Participating State Director or approved EPA where EPA is the permitting authority, and must be based upon:

(1) Site-specific field collected measurements, sampling, and analysis of physical, chemical, and biological processes affecting contaminant fate and transport, and

(2) Contaminant fate and transport predictions that maximize contaminant migration and consider impacts on human health and environment.

The proposal acknowledged the difficulties of meeting the “no potential for migration” standard (83 FR 11602). The suspension of monitoring requirements is intended only for those CCR units located in hydrogeologic settings in which the Appendix III and IV constituents will not migrate to groundwater during the active life of the unit, as well as closure and post-closure periods. The proposal also stressed that a “no migration” waiver from certain RCRA requirements has been a component of both the part 258 and the RCRA subtitle C groundwater monitoring programs for many years, and, based on its experience under these programs, the Agency expects that cases where the “no migration” criteria are met will be rare.

There were many general comments supporting the suspension of groundwater monitoring requirements if it can be demonstrated that there is no potential for migration of hazardous constituents from the CCR unit to the uppermost aquifer. These commenters supported this provision because it allows for more site-specific flexibility and prevents burdensome monitoring requirements that are unnecessary for protection of human health and the environment. A commenter also stated that it is unnecessary to incur ongoing monitoring costs if a unit has no impact to groundwater.

Supporters of the “no migration” waiver also stated that it should not be limited to facilities operating under a state or EPA CCR permit program, and should be broadened so that a qualified technical expert can make the no migration determination under the self-implementing CCR program. Commenters stated that the potential for abuse no longer exists due to the public notification requirements and EPA's inspection and enforcement authority provided by the WIIN Act.

Groundwater monitoring is one of the key provisions under the regulations that protect health and the environment, as it ensures that contamination is detected and remediated. If the unit does leak and contaminants migrate into the aquifer, without monitoring there is no guarantee that those contaminants will be detected quickly, or necessarily at all. The potential consequences of this provision are therefore significant. Moreover, the determinations required to support the waiver are highly technical, and thus not readily evaluated during an inspection, by an inspector who may be able to document that the supporting analyses exist but is unlikely to have the time or expertise necessary to evaluate their scientific adequacy. Consequently, this provision requires the additional layer of protection associated with having review by a regulatory authority, which would have the necessary technical expertise on staff, evaluate the request prior to its adoption.

Some commenters did not support the “no migration” proposal. One commenter explained that groundwater monitoring for CCR units had just barely taken effect and the first round of groundwater monitoring data was first published on March 2, 2018. This commenter also stated that all CCR facilities should be required to do groundwater monitoring to establish a baseline. Another commenter stated that due to the nature of sedimentary geological formations, fractures and fissures may exist throughout a coal-mined site, mined areas may settle and surface impoundments may leak. Therefore, suspension of groundwater monitoring should not be allowed.

EPA has determined that if a facility meets the criteria to demonstrate that there is no potential for migration at the unit, then the groundwater monitoring requirements of §§ 257.90 through 257.96 would not be necessary. However, the regulation requires that demonstrations of no potential for migration must be supported by both predictions that maximize contaminant migration and actual field data collected at the site. Field sampling is necessary to establish the site's hydrogeological characteristics and must include an evaluation of unsaturated and saturated zone characteristics to ascertain the flow rate and pathways by which contaminants may migrate to groundwater. Thus, facilities would be expected to collect site-specific data relating to conditions, geology, water levels, etc. as well as contaminant concentrations in the aquifer.

The proposal included four conditions that would be required for a facility to receive a waiver from groundwater monitoring. The first condition is that the suspension of groundwater monitoring requirements in §§ 257.91 through 257.95 is available only for owners and operators of CCR units located in participating states. As discussed previously the Agency has limited the availability of the waiver because of the need to review a no-migration demonstration prior to granting a waiver from groundwater monitoring. However, in this final action, the Agency is expanding this provision to allow EPA the ability to review a no-migration demonstration to grant a waiver from groundwater monitoring where EPA is the permitting authority.

The second condition is that the rule requires demonstrations of no potential for migration to be supported by both predictions that maximize contaminant migration and actual field data collected at the site. The proposal explained in great detail how the different properties should be measured, building on guidance developed for part 258 (83 FR 11602). EPA explained in the proposal that the site-specific information called for under the proposed regulation to make the demonstration must include, at a minimum, the following information to evaluate or interpret the effects of the following properties or processes on contaminant fate and transport:

(1) Aquifer Characteristics, including hydraulic conductivity, hydraulic gradient, effective porosity, aquifer thickness, degree of saturation, stratigraphy, degree of fracturing and secondary porosity of soils and bedrock, aquifer heterogeneity, groundwater discharge, and groundwater recharge areas;

(2) Waste Characteristics, including quantity, type, and origin;

(3) Climatic Conditions, including annual precipitation, leachate generation estimates, and effects on leachate quality;

(4) Leachate Characteristics, including leachate composition, solubility, density, the presence of immiscible constituents, Eh, and pH;

(5) Engineered Controls, including liners, cover systems, and aquifer controls (e.g., lowering the water table). These should be evaluated under design and failure conditions to estimate their long-term residual performance;

(6) Attenuation of contaminants in the subsurface, including adsorption/desorption reactions, ion exchange organic content of soil, soil water pH, and consideration of possible reactions causing chemical transformation or chelation; and

(7) Microbiological Degradation, which may attenuate target compounds or cause transformations of compounds, potentially forming more toxic chemical species.

No migration petitions will vary considerably. The petition content will be strongly influenced by the type of unit for which a variance is sought and the methods chosen to demonstrate that there is no potential for migration. EPA believes the categories listed above and other site-specific information as required by the Participating State Director or EPA where EPA is the permitting authority will provide the necessary information, data, and analyses to determine the physical, chemical, and biological processes affecting the migration of CCR constituents. As discussed below, these criteria have largely been included in the final rule, with modifications to account for the differences between the Part 258 constituents, which include organics, and Appendix IV CCR constituents, which are metals.

The third condition is that demonstrations be certified by a qualified PE and approved by the Participating State Director or EPA where EPA is the permitting authority to ensure that there is a high degree of confidence that no contamination will reach the uppermost aquifer.

The fourth condition requires the owner or operator of the CCR unit to remake the demonstration every 10 years or sooner, if there is evidence migration has occurred, as determined by the Participating State Director or EPA where EPA is the permitting authority. This new demonstration is required to be submitted to the Participating State Director or EPA where EPA is the permitting authority one year before the existing groundwater monitoring suspension is due to expire. If the suspension expires for any reason, the unit must begin groundwater monitoring according to § 257.90(a) within 90 days.

EPA received several public comments both supporting and opposing this 10-year demonstration clause. A commenter stated that the provisions for the suspension of groundwater monitoring depart from the part 258 provisions on which they were modeled, by limiting any such suspension to a maximum 10-year term and requiring a re-demonstration for subsequent suspension approvals.

One commenter stated that if any breakthrough occurs in the CCR unit, 10 years is too long and would allow contamination to move toward adjacent discharge points, including pumping wells at nearby homes, farms and businesses, as well as streams, potentially endangering human health and the environment.

As discussed in more detail below, any site-specific demonstration to satisfy the “no migration” threshold involves several distinct criteria relating to site conditions. Because, as the commenter notes, engineered controls do fail facilities will be required to demonstrate that site conditions will collectively work to ensure there is no potential for migration. For example, the regulation also requires the evaluation of Climatic Conditions such as annual precipitation and leachate generation estimates. All of the regulatory factors together work to ensure that, when considering a “no migration” determination, in the event of a leak from a CCR unit, the constituents will not migrate to the uppermost aquifer during the lifetime of the unit and post-closure care.

Another comment received on the 10-year interval is that if the existing monitoring wells remain in place during the 10-year interval, those wells may be neglected and not usable for sampling at the end of the 10-year interval. If the existing monitoring wells are filled and sealed and new monitoring wells are installed, the ability to effectively compare data at the same location over time may be lost. The commenter stated that EPA should consider either removing the 10-year recurring demonstration requirement or add some minimum monitoring requirements at shorter intervals (e.g., groundwater elevations) to ensure maintenance of the monitoring wells.

EPA does not agree that monitoring wells will necessarily be unused during the 10-year interval. The proposal discussed how the “no migration” demonstration involves complying with rigorous requirements. Modeling may be useful for assessing and verifying the potential for migration of hazardous constituents. Models used should be based on actual field collected data to adequately predict potential groundwater contamination. When owners or operators prepare to re-certify a no migration demonstration, they must verify that the unit continues to meet the standard—i.e., that there is still no potential for migration of contaminants from the unit to the uppermost aquifer. To support this demonstration some type of field data, such as groundwater elevation measurements, would normally be collected during the 10-year period. The 10-year requirement to renew a waiver ensures that no dramatic changes have occurred that may cause contamination.

One commenter stated that EPA should adopt separate standards for the suspension of groundwater monitoring for CCR landfills and CCR surface impoundments. The commenter stated that CCR landfills should not be required to conduct a new demonstration once every 10 years to show that suspension of groundwater monitoring continues to be appropriate. EPA disagrees with this comment as the “no migration” waiver is dependent upon site-specific hydrogeology, which can potentially change overtime, and the criteria for the waiver are not specific to either landfills or surface impoundments.

EPA considered the comments and is adopting the proposal with minor revisions to ensure that the regulatory language accurately reflects the principles reflected in the proposal. EPA discussed in the proposal why periodic renewals of “no migration” demonstrations were not required for MSW landfills. In part this is because the part 258 regulations apply only to landfills, while the CCR regulations apply to both landfills and surface impoundments. Surface impoundments by their very nature pose a potential for releases to groundwater that is different than landfills (e.g., presence of a hydraulic head). The risk assessment for the CCR rule found that, even when key variables are controlled (e.g., liner type, waste type) for the long-term risks from surface impoundments are greater than from landfills. Based on these factors, EPA is requiring an owner or operator to conduct a new demonstration once every 10 years to show that the suspension of groundwater monitoring continues to be appropriate. See § 257.90(g). This new demonstration must be submitted to the Participating State Director or EPA where EPA is the permitting authority one year before the existing groundwater monitoring suspension is due to expire. If the suspension expires for any reason, the unit must begin groundwater monitoring in accordance with § 257.90(a) within 90 days.

To address concerns that the proposed language was insufficiently prescriptive EPA has added the phrase, “based on the characteristics of the site in which the CCR unit is located,” to the regulatory text. This is intended to clarify that the site characteristics are the key component of any determination that a waiver can be granted, rather than unit characteristics, such as the type of liner, which can (and do) fail. This is consistent with both the proposal and the original part 258 regulation. See 83 FR 11602; 56 FR 51061. EPA provided examples of locations that might be able to demonstrate no potential for migration in the preamble to the final MSWLF rule, such as extremely dry areas with little rainfall and great depths to groundwater, but acknowledged that these would be extremely rare. 56 FR 51061. EPA expects this to be the case with respect to CCR units as well.

For the same reason, EPA included in the regulation four of the seven categories of properties or processes on contaminant fate and transport that were discussed in the preamble to the proposed rule at 83 FR 11602. EPA omitted two categories from this original list to account for the differences between the Part 258 constituents and the Appendix IV CCR constituents. The part 258 constituents include organic compounds, and so factors, such as natural attenuation, are relevant to evaluating the potential for migration at the site. But the CCR constituents are metals or metalloid compounds, which will remain in the environment if released. The remaining factors have been a component of the MSWLF program since the regulations were first adopted in 1991. 56 FR 51061. See OSWER Solid Waste Disposal Facility Criteria Technical Manual for MSWLFs (EPA530-R-93-017, 1993).21

The regulation does not include any consideration relating to current groundwater quality or potential future use of the aquifer EPA notes that, as with MSWLFs, this is not an appropriate factor for consideration under this provision. Further guidance for conducting these evaluations can be found in the OSWER Solid Waste Disposal Facility Criteria Technical Manual for MSWLFs (EPA530-R-93-017, 1993), the Ground-Water Monitoring Guidance Document for Owners and Operators of Interim Status Facilities (1983),22 and OSWER Preparing No-Migration Demonstration for Municipal Solid Waste Disposal Facilities: A Screening Tool (EPA530-R-99-008 1999).23

To ensure that the RCRA subtitle D requirements would achieve the statutory standard of “no reasonable probability of adverse effects on health and the environment” in the absence of regulatory oversight, the current CCR regulations require facilities to obtain third party certifications and to provide enhanced state and public notifications of actions taken to comply with the regulatory requirements. Specifically, in the final CCR rule EPA required numerous technical demonstrations made by the owner or operator be certified by a qualified professional engineer (PE) in order to provide verification of the facility's technical judgments and to otherwise ensure that the provisions of the rule were properly applied. While EPA acknowledged that relying upon a third-party certification was not the same as relying upon a state or federal regulatory authority and was not expected to provide the same level of independence as a state permit program, the availability of meaningful third-party verification provided critical support that the rule would achieve the statutory standard, as it would provide a degree of control over a facility's discretion in implementing the rule.

However, the situation has changed with the passage of the WIIN Act, which offers the opportunity for State oversight under an approved permit program. To reflect that, EPA proposed that the regulations allow a “State Director,” the Director of a state with an approved CCR permit program (i.e., a “participating state”), to certify that the regulatory criteria have been met in lieu of the exclusive reliance on a qualified PE. EPA expects that states will generally rely on the expertise of their own engineers to evaluate whether the technical criteria have been met. Alternatively, States might choose to retain the required certification by a qualified PE and use its own expertise to evaluate that certification. Finally, EPA noted that under the existing regulations, a facility may already rely on a certification provided by a qualified PE in a State agency, who reviews the facility actions as part of a purely State-law mandated process. Thus, EPA is confident that revising the regulation to authorize an approval from a Participating State Director will be at least as protective as the status quo under the existing regulations. To be clear an approved state may choose to provide certifications in lieu of a PE or may review and approve in addition to a PE. A participating state could also decide to solely rely on a certification by a facility's PE which would be the status quo based on the current regulations.

As a component of this proposal, EPA also proposed definitions of “State Director” and of a “participating state” in § 257.53. The definition made clear that these provisions were restricted to State Directors (or their delegates) with an approved CCR permit program. The definition also included EPA where EPA is the permitting authority (tribal lands and non-participating states). There are several changes to the proposed term of “State Director.” First, we are finalizing the term as “Participating State Director.” Currently there is a definition for State Director in 40 CFR 257.53 and EPA did not intend for our proposed definition to replace or amend the current definition. Therefore, we are finalizing the term “Participating State Director.” This language is used throughout the preamble and regulatory text accordingly.

Furthermore, EPA received numerous comments on state directors issuing certifications. The majority of comments supported granting a State Director this authority. One comment received from ASTSWMO suggested removing EPA from the definition of State Director. ASTSWMO felt it was not appropriate to include EPA in the definition because intermingling the State and EPA would lead to confusion on their implementation roles in CCR permit programs, and EPA agrees. EPA has therefore removed the sentence about EPA from the definition of Participating State Director and generally added “or approval from EPA where EPA is the permitting authority” after Participating State Director throughout the regulations.

The definition of Participating State Director has also been modified to reflect the statutory term of a “participating state” rather than the proposed term of “an approved state.” EPA has also adopted the proposed definition of a participating state, without modification. The final rule also incorporates the statutory definition of a non-participating state.

Finally, the regulatory text has been amended in 39 places to incorporate this change. These changes can be seen in the amended regulation text. Except for the regulations relating to structural stability, which continue to require the certification of a PE in all circumstances, the regulations have been modified to add the approval of Participating State Director or the approval from EPA where EPA is the permitting authority as an acceptable alternative. The structural stability evaluations, such as the periodic factors of safety assessment, require the specific expertise of a PE. As previously noted, EPA expects that a state will generally rely on the expertise of its own engineers to evaluate whether the technical criteria have been met, but to avoid any confusion, these regulations will continue to require certification by a PE. A state may, of course, require the facility to also obtain its approval as part of its own permit program.

The effective date of this rule is 30 days after publication in the Federal Register. The Administrative Procedure Act (APA) provides that publication of a substantive rule shall be made not less than 30 days before its effective date and that this provision applies in the absence of a specific statutory provision establishing an effective date. See 5 U.S.C. 553(d) and 559. EPA has determined there is no specific provision of RCRA addressing the effective date of regulations that would apply here, and thus the APA's 30-day effective date applies.

EPA has previously interpreted section 4004(c) of RCRA to generally establish a six-month effective date for rules issued under subtitle D. See 80 FR 37988, 37990. After further consideration, EPA interprets section 4004(c) to establish an effective date solely for the regulations that were required to be promulgated under subsection (a). Section 4004(c) is silent as to subsequent revisions to those regulations; EPA therefore believes section 4004(c) is ambiguous.

Section 4004(c) states that the prohibition in subsection (b) shall take effect six months after promulgation of regulations under subsection (a). Subsection (a), in turn provides that “[n]ot later than one year after October 21, 1976 . . . [EPA] shall promulgate regulations containing criteria for determining which facilities shall be classified as sanitary landfills and which shall be classified as open dumps within the meaning of this chapter.” As noted, section 4004(c) is silent as to revisions to those regulations.

In response to Congress's mandate in section 4004(a), EPA promulgated regulations on September 13, 1979. 44 FR 53438. EPA interprets section 4004(c) to establish an effective date applicable only to that action, and not to future regulations the Agency might issue under this section. In the absence of a specific statutory provision establishing an effective date for this rule, APA section 553(d) applies.

EPA considers that its interpretation is reasonable because there is no indication in RCRA or its legislative history that Congress intended for the agency to have less discretion under RCRA subtitle D than it would have under the APA to establish a suitable effective date for subsequent rules issued under section 4004(c). Consistent with EPA's interpretation of the express language of section 4004, EPA interprets statements in the legislative history explaining that section 4004(c) provides that the effective date is to be 6 months after the date of promulgate of regulations, as referring to the initial set of regulations required by Congress to be promulgated not later than 1 year after October 21, 1976, and does not mandate a 6 month effective date for every regulatory action that EPA takes under this section. This rule contains specific, targeted revisions to the 2015 rule and the legislative history regarding section 4004 speaks only to these initial 1976 mandated regulations.

This reading allows the agency to establish an effective date appropriate for the nature of the regulation promulgated, which is what EPA believes Congress intended. EPA further considers that the minimum 30-day effective date under the APA is reasonable in this circumstance where none of the provisions being finalized require an extended period of time for regulated entities to comply.

EPA estimated the costs and benefits of this action in a Regulatory Impact Analysis (RIA) which is available in the docket for this action. The RIA estimates costs and cost savings attributable to the provisions of this action against the baseline costs and cost savings of the 2015 CCR final rule. The RIA estimates that the net annualized impact of these five provisions over a 100-year period of analysis will be cost savings of between $27.8 million and $31.4 million when discounting at 7 percent and cost savings between $15.5 million and $19.1 million when discounting at 3 percent. This action is not considered an economically significant action under Executive Order 12866.

The universe of affected entities for this rule consists of the same entities affected by EPA's 2015 CCR final rule. These entities are coal-fired electricity generating plants operated by the electric utility industry. They can be identified by their North American Industry Classification System (NAICS) designation 221112 “Fossil Fuel Electric Power Generation”. The RIA estimates that there are 414 coal-fired electricity generating plants operating 922 CCR management units (landfills, disposal impoundments, and storage impoundments) that will be affected by this rule.

The baseline costs for this rule are the costs of compliance with EPA's 2015 CCR final rule, as the provisions of this rule modify the provisions of the 2015 CCR final rule or modify the implementation of the 2015 CCR rule by WIIN Act participating states. The RIA for the 2015 CCR final rule estimated these costs at an annualized $509 million when discounting at 7 percent and an annualized $735 million when discounting at 3 percent.

The RIA estimates costs and costs savings for two proposals concerning the compliance deadlines for certain aspects of the 2015 CCR rule, as well as the two alternative performance standards that will apply in participating states under the WIIN Act, and the revision of the GWPSs for the four constituents in Appendix IV to part 257 without MCLs. The RIA estimates that the net annualized impact of these five provisions over a 100-year period of analysis will be an annualized cost savings of between $27.8 million and $31.4 million when discounting at 7 percent, and an annualized cost savings of between $15.5 million and $19.1 million when discounting at 3 percent. The majority of cost savings attributable to the rule come from the provisions extending the date by which facilities must cease placing waste in CCR units. These provisions delay the large capital costs associated with ceasing to place waste in a unit. These capital costs include the cost of closure capping, post-closure monitoring, and converting to dry handling of CCR from wet handling.

The RIA also presents the adjustments to the baseline costs of the CCR final rule due to plant closures that occurred after the rule was published but before the effective date of the rule. The RIA accompanying the 2015 CCR final rule assigned compliance costs to these plants, which they are exempt from because they closed before the final rule's effective date. In all, 23 plants closed before the effective date of the final rule that were not accounted for in 2015 final rule RIA. The annualized compliance costs avoided for these plants equals between $21.4 million and $27.6 million per year when discounting at 7 percent and between $21.7 million and $32.4 million when discounting at 3 percent. This cost adjustment is detailed in the RIA that accompanies this rulemaking, however it is not factored into the baseline or the benefit estimates for this rule to keep comparisons with the 2015 CCR final rule straight forward. Also, the compliance costs not incurred by these plants would not be cost savings attributable to this rulemaking.

This action is a significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review. Any changes made in response to OMB recommendations have been documented in the docket. The EPA prepared an analysis of the potential costs and benefits associated with this action. This Regulatory Impact Analysis (RIA), entitled Regulatory Impact Analysis; EPA's 2018 RCRA Final Rule; Disposal of Coal Combustion Residuals from Electric Utilities; Amendments to the National Minimum Criteria (Phase One), is summarized in Unit V of this preamble and the RIA is available in the docket for this final rule.

This action is considered an Executive Order 13771 deregulatory action. Details on the estimated cost savings of this final rule can be found in EPA's analysis of the potential costs and benefits associated with this action.

The information collection activities in this rule have been submitted for approval to the Office of Management and Budget (OMB) under the PRA. The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number 1189.28, OMB control number 2050-0053. This is an amendment to the ICR approved by OMB for the Final Rule: Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities published April 17, 2015 in the Federal Register at 80 FR 21302. You can find a copy of the ICR in the docket for this action, and it is briefly summarized here.

Respondents/affected entities: Coal-fired electric utility plants that will be affected by the rule.

Respondent's obligation to respond: The recordkeeping, notification, and posting are mandatory as part of the minimum national criteria being promulgated under sections 1008, 4004, and 4005(a) of RCRA.

Estimated number of respondents: 414.

Frequency of response: The frequency of response varies.

Total estimated burden: EPA estimates the total annual burden to respondents to be a reduction in burden of approximately 16,690 hours from the currently approved burden. Burden is defined at 5 CFR 1320.3(b).

Total estimated cost: The total estimated annual cost of this rule is a cost savings of approximately $4,752,588. This cost savings is composed of approximately $1,045,091 in annualized avoided labor costs and $3,707,497 in avoided capital or operation and maintenance costs.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to the rule. This action is expected to result in net cost savings amounting to approximately $27.8 million per year to $31.4 million per year when discounting at 7 percent and annualized over 100 years. It is expected to result in net cost savings of between $15.5 million and $19.1 million when discounting at 3 percent and annualized over 100 years. Savings will accrue to all regulated entities, including small entities. Further information on the economic effects of this action can be found in Unit V of this preamble and in the Regulatory Impact Analysis, which is available in the docket for this action. We have therefore concluded that this action will relieve regulatory burden for all directly regulated small entities.

This action does not contain any unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. This action imposes no enforceable duty on any state, local or tribal governments or the private sector. The costs involved in this action are imposed only by participation in a voluntary federal program. UMRA generally excludes from the definition of “federal intergovernmental mandate” duties that arise from participation in a voluntary federal program.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. For the “Final Rule: Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities” published April 17, 2015 in the Federal Register at 80 FR 21302, EPA identified three of the 414 coal-fired electric utility plants (in operation as of 2012) which are located on tribal lands; however, they are not owned by tribal governments. These are: (1) Navajo Generating Station in Coconino County, Arizona, owned by the Arizona Salt River Project; (2) Bonanza Power Plant in Uintah County, Utah, owned by the Deseret Generation and Transmission Cooperative; and (3) Four Corners Power Plant in San Juan County, New Mexico owned by the Arizona Public Service Company. The Navajo Generating Station and the Four Corners Power Plant are on lands belonging to the Navajo Nation, while the Bonanza Power Plant is located on the Uintah and Ouray Reservation of the Ute Indian Tribe. Under the WIIN Act, EPA is the permitting authority for CCR unites located in Indian Country. Moreover, since this action is expected to result in net cost savings to affected entities amounting to approximately $27.8 million per year to $31.4 million per year when discounting at 7 percent and annualized over 100 years, or in net cost savings of between $15.5 million per year and $19.1 million per year when discounting at 3 percent and annualized over 100 years, it will not have substantial direct effects on one or more Indian tribes. Thus, Executive Order 13175 does not apply to this action.

This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action's health and risk assessments are contained in the document titled “Human and Ecological Risk Assessment of Coal Combustion Residuals” which is available in the docket for the final rule as docket item EPA-HQ-RCRA-2009-0640-11993.

As ordered by E.O. 13045 Section 1-101(a), for the “Final Rule: Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities” published April 17, 2015 in the Federal Register at 80 FR 21302, EPA identified and assessed environmental health risks and safety risks that may disproportionately affect children in the revised risk assessment. The results of the screening assessment found that risks fell below the criteria when wetting and run-on/runoff controls required by the rule are considered. Under the full probabilistic analysis, composite liners required by the rule for new waste management units showed the ability to reduce the 90th percentile child cancer and non-cancer risks for the groundwater to drinking water pathway to well below EPA's criteria. Additionally, the groundwater monitoring and corrective action required by the rule reduced risks from current waste management units.

This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. For the 2015 CCR rule, EPA analyzed the potential impact on electricity prices relative to the “in excess of one percent” threshold. Using the Integrated Planning Model (IPM), EPA concluded that the 2015 CCR Rule may increase the weighted average nationwide wholesale price of electricity between 0.18 percent and 0.19 percent in the years 2020 and 2030, respectively. As the final rule represents a cost savings rule relative to the 2015 CCR rule, this analysis concludes that any potential impact on wholesale electricity prices will be lower than the potential impact estimated of the 2015 CCR rule; therefore, this final rule is not expected to meet the criteria of a “significant adverse effect” on the electricity markets as defined by Executive Order 13211.

This rulemaking does not involve technical standards.

The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994).

The documentation for this decision is contained in EPA's Regulatory Impact Analysis (RIA) for the CCR rule which is available in the docket for the 2015 CCR final rule as docket item EPA-HQ-RCRA-2009-0640-12034.

EPA's risk assessment did not separately evaluate either minority or low-income populations. However, to evaluate the demographic characteristics of communities that may be affected by the CCR rule, the RIA compares the demographic characteristics of populations surrounding coal-fired electric utility plants with broader population data for two geographic areas: (1) One-mile radius from CCR management units (i.e., landfills and impoundments) likely to be affected by groundwater releases from both landfills and impoundments; and (2) watershed catchment areas downstream of surface impoundments that receive surface water run-off and releases from CCR impoundments and are at risk of being contaminated from CCR impoundment discharges (e.g., unintentional overflows, structural failures, and intentional periodic discharges).

For the population as a whole 24.8 percent belong to a minority group and 11.3 percent falls below the Federal Poverty Level. For the population living within one mile of plants with surface impoundments 16.1 percent belong to a minority group and 13.2 percent live below the Federal Poverty Level. These minority and low-income populations are not disproportionately high compared to the general population. The percentage of minority residents of the entire population living within the catchment areas downstream of surface impoundments is disproportionately high relative to the general population, i.e., 28.7 percent, versus 24.8 percent for the national population. Also, the percentage of the population within the catchment areas of surface impoundments that is below the Federal Poverty Level is disproportionately high compared with the general population, i.e., 18.6 percent versus 11.3 percent nationally.

Comparing the population percentages of minority and low income residents within one mile of landfills to those percentages in the general population, EPA found that minority and low-income residents make up a smaller percentage of the populations near landfills than they do in the general population, i.e., minorities comprised 16.6 percent of the population near landfills versus 24.8 percent nationwide and low-income residents comprised 8.6 percent of the population near landfills versus 11.3 percent nationwide. In summary, although populations within the catchment areas of plants with surface impoundments appear to have disproportionately high percentages of minority and low-income residents relative to the nationwide average, populations surrounding plants with landfills do not. Because landfills are less likely than impoundments to experience surface water run-off and releases, catchment areas were not considered for landfills.

The CCR rule is risk-reducing with reductions in risk occurring largely within the surface water catchment zones around, and groundwater beneath, coal-fired electric utility plants. Since the CCR rule is risk-reducing and this action does not add to risks, this action will not result in new disproportionate risks to minority or low-income populations.

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

For the reasons set out in the preamble, title 40, chapter I, of the Code of Federal Regulations is amended as follows:

I. Background A. Legislative and Regulatory Overview

The Patient Protection and Affordable Care Act (Pub. L. 111-148), was enacted on March 23, 2010; the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) was enacted on March 30, 2010. These statutes are collectively referred to as “PPACA” in this final rule. Section 1343 of the PPACA established an annual permanent risk adjustment program under which payments are collected from health insurance issuers that enroll relatively low-risk populations, and payments are made to health insurance issuers that enroll relatively higher-risk populations. Consistent with section 1321(c)(1) of the PPACA, the Secretary is responsible for operating the risk adjustment program on behalf of any state that elected not to do so. For the 2017 benefit year, HHS is responsible for operation of the risk adjustment program in all 50 states and the District of Columbia.

HHS sets the risk adjustment methodology that it uses in states that elect not to operate the program in advance of each benefit year through a notice-and-comment rulemaking process with the intention that issuers will be able to rely on the methodology to price their plans appropriately (45 CFR 153.320; 76 FR 41930, 41932 through 41933; 81 FR 94058, 94702 (explaining the importance of setting rules ahead of time and describing comments supporting that practice)).

In the July 15, 2011 Federal Register (76 FR 41929), we published a proposed rule outlining the framework for the risk adjustment program. We implemented the risk adjustment program in a final rule, published in the March 23, 2012 Federal Register (77 FR 17219) (Premium Stabilization Rule). In the December 7, 2012 Federal Register (77 FR 73117), we published a proposed rule outlining the proposed Federally certified risk adjustment methodologies for the 2014 benefit year and other parameters related to the risk adjustment program (proposed 2014 Payment Notice). We published the 2014 Payment Notice final rule in the March 11, 2013 Federal Register (78 FR 15409). In the June 19, 2013 Federal Register (78 FR 37032), we proposed a modification to the HHS-operated methodology related to community rating states. In the October 30, 2013, Federal Register (78 FR 65046), we finalized the proposed modification to the HHS-operated methodology related to community rating states. We published a correcting amendment to the 2014 Payment Notice final rule in the November 6, 2013 Federal Register (78 FR 66653) to address how an enrollee's age for the risk score calculation would be determined under the HHS-operated risk adjustment methodology.

In the December 2, 2013 Federal Register (78 FR 72321), we published a proposed rule outlining the Federally certified risk adjustment methodologies for the 2015 benefit year and other parameters related to the risk adjustment program (proposed 2015 Payment Notice). We published the 2015 Payment Notice final rule in the March 11, 2014 Federal Register (79 FR 13743). In the May 27, 2014 Federal Register (79 FR 30240), the 2015 fiscal year sequestration rate for the risk adjustment program was announced.

In the November 26, 2014 Federal Register (79 FR 70673), we published a proposed rule outlining the proposed Federally certified risk adjustment methodologies for the 2016 benefit year and other parameters related to the risk adjustment program (proposed 2016 Payment Notice). We published the 2016 Payment Notice final rule in the February 27, 2015 Federal Register (80 FR 10749).

In the December 2, 2015 Federal Register (80 FR 75487), we published a proposed rule outlining the Federally certified risk adjustment methodology for the 2017 benefit year and other parameters related to the risk adjustment program (proposed 2017 Payment Notice). We published the 2017 Payment Notice final rule in the March 8, 2016 Federal Register (81 FR 12204).

In the September 6, 2016 Federal Register (81 FR 61455), we published a proposed rule outlining the Federally certified risk adjustment methodology for the 2018 benefit year and other parameters related to the risk adjustment program (proposed 2018 Payment Notice). We published the 2018 Payment Notice final rule in the December 22, 2016 Federal Register (81 FR 94058).

In the November 2, 2017 Federal Register (82 FR 51042), we published a proposed rule outlining the benefit and payment parameters for the 2019 benefit year, and to further promote stable premiums in the individual and small group markets. We proposed updates to the risk adjustment methodology and amendments to the risk adjustment data validation process (proposed 2019 Payment Notice). We published the 2019 Payment Notice final rule in the April 17, 2018 Federal Register (83 FR 16930). We published a correction to the 2019 risk adjustment coefficients in the 2019 Payment Notice final rule in the May 11, 2018 Federal Register (83 FR 21925).

On February 28, 2018, in a suit brought by the health insurance issuer New Mexico Health Connections, the United States District Court for the District of New Mexico (the district court) vacated the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2014, 2015, 2016, 2017, and 2018 benefit years. The district court reasoned that HHS had not adequately explained its decision to adopt a methodology that used the statewide average premium as the cost-scaling factor to ensure that amounts collected from issuers equal payments made to issuers for the applicable benefit year, that is, a methodology that maintains the budget neutrality of the program for the applicable benefit year.1 The district court otherwise rejected New Mexico Health Connections' arguments. HHS's reconsideration motion remains pending with the district court.

HHS recently announced the collection and payment amounts for the 2017 benefit year as calculated under the HHS-operated risk adjustment methodology that uses the statewide average premium.2 However, without this administrative action (that is, issuing this final rule), HHS would be unable to make those collections or distribute the payments for the 2017 benefit year, which total billions of dollars.3 Uncertainty and delay in the distribution of those payments, which issuers anticipated when they set premiums for the 2017 benefit year, could add uncertainty to the market, as issuers are now in the process of determining the extent of their market participation and the rates and terms of plans they will offer for the 2019 benefit year.

This final rule adopts the HHS-operated risk adjustment methodology previously published at 81 FR 12204 for the 2017 benefit year with an additional explanation regarding the use of statewide average premium and the budget neutral nature of the program. This rule does not make any changes to the previously published HHS-operated risk adjustment methodology for the 2017 benefit year.

The risk adjustment program provides payments to health insurance issuers that enroll higher risk populations, such as those with chronic conditions, thereby reducing incentives for issuers to structure their plan benefit designs or marketing strategies in order to avoid these enrollees and lessening the potential influence of risk selection on the premiums that issuers charge. Instead, issuers are expected to set rates based on average risk and compete based on plan features rather than selection of healthier enrollees. The program applies to any health insurance issuer offering plans in the individual or small group markets, with the exception of grandfathered health plans, group health insurance coverage described in 45 CFR 146.145(c), individual health insurance coverage described in 45 CFR 148.220, and any plan determined not to be a risk adjustment covered plan in the applicable Federally certified risk adjustment methodology.4 In 45 CFR part 153, subparts A, B, D, G, and H, HHS established standards for the administration of the permanent risk adjustment program. In accordance with § 153.320, any risk adjustment methodology used by a state, or by HHS on behalf of the state, must be a Federally certified risk adjustment methodology.

As stated in the 2014 Payment Notice final rule, the Federally certified risk adjustment methodology developed and used by HHS in states that elect not to operate the program is based on the premise that premiums for this market should reflect the differences in plan benefits, quality, and efficiency—not the health status of the enrolled population.5 HHS developed the risk adjustment payment transfer formula that calculates the difference between the revenues required by a plan based on the projected health risk of the plan's enrollees and the revenues that a plan can generate for those enrollees. These differences are then compared across plans in the state market risk pool and converted to a dollar amount based on the statewide average premium. HHS chose to use statewide average premium and normalize the risk adjustment transfer formula to reflect state average factors so that each plan's enrollment characteristics are compared to the state average and the total calculated payment amounts equal total calculated charges in each state market risk pool. Thus, each plan in the risk pool receives a risk adjustment payment or charge designed to compensate for risk for a plan with average risk in a budget neutral manner. This approach supports the overall goal of the risk adjustment program to encourage issuers to rate for the average risk in the applicable state market risk pool, and avoids the creation of incentives for issuers to operate less efficiently, set higher prices, develop benefit designs or create marketing strategies to avoid high risk enrollees. Such incentives could arise if HHS used each issuer's plan's own premium in the risk adjustment payment transfer formula, instead of statewide average premium.

As explained above, the district court vacated the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2014 through 2018 benefit years on the ground that HHS did not adequately explain its decision to adopt that aspect of the risk adjustment methodology. The district court recognized that use of statewide average premium maintained the budget neutrality of the program, but concluded that HHS had not adequately explained the underlying decision to adopt a methodology that kept the program budget neutral, that is, that ensured that amounts collected from issuers would equal payments made to issuers for the applicable benefit year. Accordingly, HHS is providing additional explanation herein.

First, Congress designed the risk adjustment program to be implemented and operated by states if they choose to do so. Nothing in section 1343 of the PPACA requires a state to spend its own funds on risk adjustment payments or allows HHS to impose such a requirement. Thus, while section 1343 may have provided leeway for states to spend additional funding on the program if they voluntarily chose to do so, HHS could not have required additional funding within the HHS-operated risk adjustment methodology.

Second, while the PPACA did not include an explicit requirement that the risk adjustment program be operated in a budget-neutral manner, it also does not proscribe designing the program in a budget-neutral manner. In fact, although the statutory provisions for many other PPACA programs appropriated or authorized amounts to be appropriated from the U.S. Treasury, or provided budget authority in advance of appropriations,6 the PPACA neither authorized nor appropriated additional funding for risk adjustment payments beyond the amount of charges paid in, nor authorized HHS to obligate itself for risk adjustment payments in excess of charges collected.7 Indeed, unlike the Medicare Part D statute, which expressly authorizes the appropriation of funds and provides budget authority in advance of appropriations to make Part D risk-adjusted payments, the PPACA's risk adjustment statute makes no reference to additional appropriations whatsoever.8 Because Congress omitted from the PPACA any provision appropriating independent funding or creating budget authority in advance of an appropriation for the risk adjustment program, HHS could not—absent another source of appropriations—have designed the risk adjustment program in a way that required payments in excess of collections consistent with binding appropriations law. Thus, as a practical matter, Congress did not give HHS discretion to implement a program that was not budget neutral.

Furthermore, if HHS had elected to adopt a HHS-operated risk adjustment methodology that was contingent on appropriations from Congress in the annual appropriations process that would have created uncertainty for issuers in the amount of risk adjustment payments they could expect. That uncertainty would undermine one of the central objectives of the risk adjustment program, which is to assure issuers in advance that they will receive risk adjustment payments if, for the applicable benefit year, they enroll a high risk population compared to other issuers in the state market risk pool. The budget-neutral framework spreads the costs of covering higher-risk enrollees across issuers throughout a given state market risk pool, thereby reducing incentives for issuers to engage in risk-avoidance techniques such as designing or marketing their plans in ways that tend to attract healthier individuals, who cost less to insure. Moreover, relying on the possibility in each year's budget process for appropriation of additional funds to HHS that could be used to supplement risk adjustment transfers would have required HHS to delay setting the parameters for any risk adjustment payment proration rates until well after the plans were in effect for the applicable benefit year.9 Without the adoption of a budget-neutral framework, HHS would have needed to assess a charge or otherwise collect additional funds, or prorate risk adjustment payments to balance the calculated risk adjustment transfer amounts. The resulting uncertainty would have conflicted with one of the overall goals of the risk adjustment program—to reduce incentives for issuers to avoid enrolling individuals with higher than average actuarial risk.

In light of the budget-neutral framework discussed above, HHS also chose not to use a different parameter for the payment transfer formula under the HHS-operated methodology, such as each plan's own premium, that would not have automatically achieved equality between risk adjustment payments and charges in each benefit year. As set forth in prior discussions,10 use of the plan's own premium or some similar parameter would have required the application of a balancing adjustment in light of the program's budget neutrality—either reducing payments to issuers owed a payment, increasing charges on issuers due a charge, or splitting the difference in some fashion between issuers owed payments and issuers assessed charges. Such adjustments would have impaired the risk adjustment program's goals, discussed above, of encouraging issuers to rate for the average risk in the applicable risk pool and avoiding the creation of incentives for issuers to operate less efficiently, set higher prices, develop benefit designs or create marketing strategies to avoid higher-risk enrollees. Use of an after-the-fact balancing adjustment is also less predictable for issuers than a methodology that can be calculated in advance of a benefit year. Such predictability is important to serving the risk adjustment program's goals of premium stabilization and reducing issuer incentives to avoid enrolling higher-risk populations. Additionally, using a plan's own premium to scale transfers may provide additional incentive for plans with high-risk enrollees to increase premiums in order to receive additional risk adjustment payments. As noted by commenters to the 2014 Payment Notice proposed rule, transfers may be more volatile from year to year and sensitive to anomalous premiums if they were scaled to a plan's own premium instead of the statewide average premium. Scaling the risk adjustment transfers by the statewide average premium promotes premium stabilization by encouraging pricing to average risk in a risk pool, and results in a calculation of equal payments and charges.

In the risk adjustment methodologies applicable to the 2018 and 2019 benefit years, HHS has adjusted statewide average premium by reducing it by 14 percent to account for an estimated proportion of administrative costs that do not vary with claims. HHS is not applying this adjustment retroactively to the 2017 benefit year, but is instead maintaining the definition of statewide average premium previously established for the 2017 benefit year. As discussed above, HHS has repeatedly stressed the importance of providing a risk adjustment methodology in advance of the benefit year to which it applies to provide issuers the opportunity to price their plans accordingly.11 To protect the settled expectations of issuers that have structured their pricing and offering decisions in reliance on the previously promulgated 2017 benefit year methodology, this rule maintains for the 2017 benefit year the description of statewide average premium set forth in the 2017 Payment Notice.

Therefore, for the 2017 benefit year, we are issuing this final rule that adopts the HHS-operated risk adjustment methodology previously established for the 2017 benefit year in the Federal Register publications cited above, including use of statewide average premium. As set forth in reports previously issued, HHS has completed final risk adjustment calculations for the 2017 benefit year, but has not yet collected or paid risk adjustment amounts to issuers of risk adjustment covered plans. The provisions of this final rule adopt the methodology that applies to collection and payment of risk adjustment amounts for the 2017 benefit year. Because this final rule does not alter any previously announced risk adjustment methodology, the amounts previously calculated by HHS have not changed by virtue of this rule's issuance.

HHS will begin collection of the 2017 benefit year risk adjustment charge amounts announced in the Summary Report on Permanent Risk Adjustment Transfers for the 2017 Benefit Year 12 through netting pursuant to 45 CFR 156.1215(b) and subsequently issuing invoices if an amount remains outstanding in the September 2018 monthly payment cycle. HHS will begin making the 2017 benefit year risk adjustment payments outlined in the Summary Report on Permanent Risk Adjustment Transfers for the 2017 Benefit Year as part of the October 2018 monthly payment cycle, continuing on a monthly basis as collections are received. Under this timeline, issuers would receive invoices on or about September 11-13, 2018 and payments would begin to be made around October 22, 2018.

This rule adopts the final rules set out in the publication in the March 23, 2012 Federal Register (77 FR 17220 through 17252) and publication in the March 8, 2016 Federal Register (81 FR 12204 through 12352). For the 2017 benefit year, in states where HHS is operating the risk adjustment program under section 1343 of the PPACA, HHS will use the criteria and methods as specified in the publication in the March 23, 2012 Federal Register (77 FR 17220 through 17252) and publication in the March 8, 2016 Federal Register (81 FR 12204 through 12352).

Under the Administrative Procedure Act (APA) (5 U.S.C. 553), a notice of proposed rulemaking and an opportunity for public comment are generally required before issuing a regulation. We also ordinarily provide a 30-day delay in the effective date of the provisions of a rule in accordance with the APA (5 U.S.C. 553(d)), unless the rule is a major rule and subject to the 60-day delayed effective date required by the Congressional Review Act (5 U.S.C. 801(a)(3)). However, these procedures can be waived if the agency, for good cause, finds that notice and public comment and delay in effective date are impracticable, unnecessary, or contrary to public interest and incorporates a statement of the finding and its reasons in the rule issued. See 5 U.S.C. 553(d)(3); 5 U.S.C. 808(2).

HHS has determined that issuing this rule in proposed form, such that it would not become effective until after public comments are submitted, considered, and responded to in a final rule, would be impracticable, unnecessary, and contrary to the public interest. As discussed above, immediate administrative action is imperative to maintain the stability and predictability in the individual and small group insurance markets. It is also consistent with settled expectations in that this rule adopts the risk adjustment methodology previously established for the 2017 benefit year.13 Under normal operations, risk adjustment invoices for the 2017 benefit year would be issued beginning in August 2018 and risk adjustment payments for the 2017 benefit year would be made beginning in the September 2018 monthly payment cycle. Accordingly, it is now less than 2 months until risk adjustment payments for the 2017 benefit year, expected to total $5.2 billion, are due to begin. Immediate action is also necessary to maintain issuer confidence in the HHS-operated risk adjustment program. Issuers have already accounted for expected risk adjustment transfers in their rates for the 2017 benefit year and uncompensated payments for the 2017 benefit year could lead to higher premiums in future benefit years as issuers incorporate a risk premium into their rates. Issuers file rates for the 2019 benefit year in the summer of 2018, and if a projected $5.2 billion in risk adjustment payments is unavailable or there is uncertainty as to whether payments for the 2018 benefit year will be made, there is a serious risk issuers will substantially increase 2019 premiums to account for the uncompensated risk associated with high-risk enrollees. Consumers enrolled in certain plans could see a significant premium increase, which could make coverage in those plans particularly unaffordable for unsubsidized enrollees. Furthermore, issuers are currently making decisions on whether to offer qualified health plans (QHPs) through the Exchanges for the 2019 benefit year, and, for the Federally-facilitated Exchange (FFE), this decision must be made before the August 2018 deadline to finalize QHP agreements. In states with limited Exchange options, a QHP issuer exit would restrict consumer choice, and put additional upward pressure on Exchange premiums, thereby increasing the cost of coverage for unsubsidized individuals and federal spending for premium tax credits. The combination of these effects could lead to significant, involuntary coverage losses in certain state market risk pools.

Additionally, HHS's failure to make timely risk adjustment payments could impact the solvency of plans providing coverage to sicker (and costlier) than average enrollees that require the influx of risk adjustment payments to continue operations. When state regulators determine issuer solvency, any uncertainty surrounding risk adjustment transfers jeopardizes regulators' ability to make decisions that protect consumers and support the long-term health of insurance markets. Therefore, HHS has determined that delaying the effective date of the use of statewide average premium in the payment transfer calculation under the HHS-operated risk adjustment methodology for the 2017 benefit year to allow for proposed rulemaking and comment is impracticable and contrary to the public interest because consumers would be negatively impacted by premium changes should risk adjustment payments be interrupted or confidence in the program undermined.

There is also good cause to proceed without notice and comment for the additional reason that such procedures are unnecessary here. HHS has received and considered comments in issuing the 2014 through 2017 Payment Notices. In each of these rulemaking processes, parties had the opportunity to comment on HHS's use of statewide average premium in the payment transfer formula under the HHS-operated risk adjustment methodology. Because this final rule adopts the same HHS-operated risk adjustment methodology issued in the 2017 Payment Notice final rule, the comments received in those rulemakings are sufficiently current to indicate a lack of necessity to engage in further notice and comment. In the 2014 Payment Notice final rule, we received a number of comments in support of our proposal to use the statewide average premium as the basis for risk adjustment transfers. In subsequent benefit year rulemakings, some commenters expressed a desire for HHS to use a plan's own premium. HHS addressed those comments by reiterating that we had considered the use of a plan's own premium instead of the statewide average premium and chose to use statewide average premium. As this approach supports the overall goal of the risk adjustment program to encourage issuers to rate for the average risk in the applicable state market risk pool, and avoids the creation of incentives for issuers to operate less efficiently, set higher prices, develop benefit designs or create marketing strategies to avoid high risk enrollees.

This document does not impose information collection requirements, that is, reporting, recordkeeping, or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).

This final rule adopts the HHS-operated risk adjustment methodology for the 2017 benefit year set forth in the 2017 Payment Notice final rule to ensure that the risk adjustment program works as intended to protect consumers from the effects of adverse selection and premium increases due to issuer uncertainty. The Premium Stabilization Rule and previous Payment Notices noted above provided detail on the implementation of the risk adjustment program, including the specific parameters applicable for the 2017 benefit year.

We have examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96- 354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2), and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs. 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). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any one year).

OMB has determined that this final rule is “economically significant” within the meaning of section 3(f)(1) of Executive Order 12866, because it is likely to have an annual effect of $100 million in any 1 year. In addition, for the reasons noted above, OMB has determined that this is a major rule under the Congressional Review Act.

This final rule offers a further explanation on budget neutrality and the use of statewide average premium in the risk adjustment payment transfer formula when HHS is operating the permanent risk adjustment program established in section 1343 of the PPACA on behalf of a state for the 2017 benefit year. We note that we previously estimated transfers associated with the risk adjustment program in the Premium Stabilization Rule and the 2017 Payment Notice, and that the provisions of this final rule do not change the risk adjustment transfers previously estimated under the HHS-operated risk adjustment methodology established in those final rules. The approximate risk adjustment transfers for the 2017 benefit year are $5.179 billion. As such, we also adopt the RIA in the 2017 Payment Notice proposed and final rules.

This is a summary of the Commission's FY 2018 Report and Order (FY 2018 Report and Order), FCC 18-65, MD Docket No. 18-175 adopted on May 21, 2018 and released on May 22, 2018. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW, Room CY-A257, Portals II, Washington, DC 20554, and may also be purchased from the Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street SW, Room CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via their website, http://www.bcpi.com, or call 1-800-378-3160. This document is available in alternative formats (computer diskette, large print, audio record, and braille). Persons with disabilities who need documents in these formats may contact the FCC by email: [email protected] or phone: 202-418-0530 or TTY: 202-418-0432.

1. As required by the Regulatory Flexibility Act of 1980 (RFA),1 the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) relating to this Report and Order. The FRFA is located towards the end of this document.

2. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

3. The Commission will send a copy of this Report & Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

In this Report and Order, we address several regulatory fee issues raised in the Further Notice of Proposed Rulemaking that published after the Commission's FY 2017 Report and Order.2 More specifically, in this Report and Order, we (1) adopt new tiers for calculating regulatory fees for submarine cable systems; (2) decline to adopt a new regulatory fee for international section 214 authorizations; and (3) retain the optional bulk rate calculation for determining the number of subscribers in multiple dwelling units used in the calculation of cable television regulatory fees.

1. In 2009, the Commission adopted a new methodology for calculating submarine cable regulatory fees, based on a proposal from the submarine cable industry.3 The methodology adopted was a tiered per-cable system, with higher fees for larger systems and lower fees for smaller systems. The Commission concluded that the methodology was in the public interest and competitively neutral because it included both common carriers and non-common carriers; all entities with cable landing licensees would be required to pay this regulatory fee.4 At that time, the Commission adopted a five-tier system for the submarine cable industry, but since that date the subsequent growth in the industry has moved all but two systems into the highest tier.5 In the 2017 FNPRM, we sought comment on revising the regulatory fee tiers for submarine cable systems.6 One commenter, the Submarine Cable Coalition, generally agrees with our proposal to revise the existing tiers.7

2. We adjust the tiers proposed in the 2017 FNPRM to reflect capacity growth since 2009 when the submarine cable tiers were first established. Specifically, the regulatory fee tiers for submarine cable systems we adopt below add higher thresholds to reflect capacity growth in the industry. Based on this increase in capacity, we believe the tiers better capture varying types of submarine cable operators.

• Systems with capacity equal to or greater than 4,000 Gbps will now pay 16 payment units.

• Systems with capacity equal to or greater than 1,000 Gbps but less than 4,000 Gbps will now pay 8 payment units.

• Systems with capacity equal to or greater than 250 Gbps but less than 1,000 Gbps will now pay 4 payment units.

• Systems with capacity equal to or greater than 50 Gbps but less than 250 Gbps, will pay 2 payment units.

• Systems with capacity less than 50 Gbps will pay 1 payment unit.

3. Under the revised regulatory fee tiers we adopt today, we estimate that approximately half of the submarine cable systems will be in the bottom or middle tiers, while the remaining systems will be in the new highest tier. The FCC will provide proposed rates for submarine cable systems for FY 2018 in future rulemaking.

4. Finally, while the Submarine Cable Coalition contends that non-common carrier submarine cable systems should pay lower fees than common carriers, we note that the Commission adopted a competitively neutral methodology that included both common carriers and non-common carriers in the Submarine Cable Order, based on a consensus proposal from a group of operators, including at least one member of the Coalition, GU Holdings, Inc., an indirect, wholly-owned subsidiary of Google, Inc.8 The Coalition has not provided any evidence to support its claim that we should depart from this competitively neutral methodology and treat non-common carrier submarine cable systems differently from common carrier systems at this time.

5. In the 2017 FNPRM, the Commission sought comment on a proposal raised by the Submarine Cable Coalition, that in lieu of regulatory fees for international bearer circuits (IBCs), we should assess a regulatory fee, based on International Bureau FTEs, on every holder of an international section 214 authorization.9 SIA supports replacing the satellite IBC fee with a fee on each international section 214 authorization and contends that such a fee for all entities with international section 214 authorizations would be appropriate because the holders of international section 214 authority are “directly involved in international common carrier services and benefit from associated Commission regulation. . . .” 10 The Submarine Cable Coalition contends that adopting a flat fee for all holders of international section 214 authorizations would be an efficient and equitable methodology for assessing regulatory fees.11

6. Other commenters oppose this approach. CTIA argues that assessing a fee based on international section 214 authorizations would change the basis for the IBC fees, which is ownership and use of international circuits, because many international 214 authorization holders only provide resold service and do not have international facilities.12 AT&T agrees with CTIA and notes that this approach would impose a new IBC regulatory fee on hundreds of entities that do not currently pay IBC fees.13 These commenters also explain that because only common carriers hold international section 214 authorizations, this approach would essentially reverse our decision in the FY 2017 Report and Order to include non-common carrier terrestrial IBCs in the IBC regulatory fee methodology.14 For example, AT&T states that replacing all or part of the IBC fee with a flat fee on international section 214 authorizations would “effectively reverse the Commission's decisions to provide a competitively neutral IBC fee structure.” 15 CenturyLink argues that entities holding an international 214 authorization but that do not have active international circuits do not receive the benefits of Commission international activities, and therefore should not be subject to regulatory fees.16 CTIA also states that international section 214 applicants already pay a $1,155 filing fee with each application and there is no evidence of other International Bureau costs associated with international section 214 authorizations.17 Commenters also note that such an approach would present administrative difficulties since many carriers have multiple international 214 authorizations and can surrender them if the Commission adopted a per-international section 214 authorization regulatory fee.18

7. We decline to impose regulatory fees on international section 214 authorizations in lieu of our existing IBC regulatory fees for terrestrial and satellite IBCs and submarine cable systems. The record does not demonstrate that this approach is advantageous over the existing scheme established in section 9(g) of the Act to charge the IBC regulatory fee based on active international bearer circuits.19 The Submarine Cable Coalition's proposal is also problematic because it would exclude non-common carriers from paying the fee. However, the Commission concluded in the FY 2017 Report and Order that regulatory fees should be paid for non-common carrier satellite and terrestrial circuits, as well as submarine cable systems.20 Further, the Submarine Cable Coalition has not shown how a CMRS provider or an ITSP with an international section 214 authorization is subject to regulation or oversight by the International Bureau that would justify an additional annual regulatory fee based on International Bureau FTEs. We recognize that oversight or regulation by the International Bureau is not limited to the processing of international section 214 authorizations.21 We are, however, unconvinced at this time that such costs justify requiring hundreds of carriers regulated by other bureaus to pay additional regulatory fees 22 based on International Bureau FTEs. For these reasons, we decline to adopt a new regulatory fee category for international section 214 authorizations to replace IBC regulatory fees at this time.

8. In the FY 2008 FNPRM, the Commission sought comment on the optional bulk rate calculation for determining the number of subscribers in a multiple dwelling unit or MDU.23 The methodology for calculating the number of cable subscribers has been the following:

9. In the 2017 FNPRM, we sought comment on whether we should keep the bulk rate calculation or if, due to the passage of time, we should modify the methodology to more accurately calculate the number of subscribers in a MDU.25 Commenters addressing this issue unanimously support retaining the current optional bulk rate calculation.26 In particular, commenters state that our methodology continues to be “a reasonable and feasible approach to determining the number of MDU subscribers for regulatory fee purposes, and should be retained.” 27 And, there is no evidence in the record to support revising or eliminating this optional bulk rate calculation. For these reasons, we retain the bulk rate calculation.

1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),28 an Initial Regulatory Flexibility Analysis (IRFA) was included in the 2017 FNPRM. 29 The Commission sought written public comment on these proposals including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the IRFA.30

2. This Report and Order adopts a revision to the existing tiers for submarine cable regulatory fees.

3. None.

4. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted.31 The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 32 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.33 A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.34 Nationwide, there are a total of approximately 27.9 million small businesses, according to the SBA.35

5. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as “establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.” 36 The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees.37 Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.38 Thus, under this size standard, most firms in this industry can be considered small.

6. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. The closest applicable NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.39 According to Commission data, census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.40 The Commission therefore estimates that most providers of local exchange carrier service are small entities that may be affected by the rules adopted.

7. Incumbent LECs. Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The closest applicable NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees.41 According to Commission data, 3,117 firms operated in that year. Of this total, 3,083 operated with fewer than 1,000 employees.42 Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by the rules and policies adopted. Three hundred and seven (307) Incumbent Local Exchange Carriers reported that they were incumbent local exchange service providers.43 Of this total, an estimated 1,006 have 1,500 or fewer employees.44

8. Competitive Local Exchange Carriers (Competitive LECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. The appropriate NAICS code category is Wired Telecommunications Carriers, as defined in paragraph 6 of this FRFA. Under that size standard, such a business is small if it has 1,500 or fewer employees.45 U.S. Census data for 2012 indicate that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees.46 Based on this data, the Commission concludes that most Competitive LECS, CAPs, Shared-Tenant Service Providers, and Other Local Service Providers, are small entities. According to Commission data, 1,442 carriers reported that they were engaged in the provision of either competitive local exchange services or competitive access provider services.47 Of these 1,442 carriers, an estimated 1,256 have 1,500 or fewer employees.48 In addition, 17 carriers have reported that they are Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 or fewer employees.49 Also, 72 carriers have reported that they are Other Local Service Providers.50 Of this total, 70 have 1,500 or fewer employees.51 Consequently, based on internally researched FCC data, the Commission estimates that most providers of competitive local exchange service, competitive access providers, Shared-Tenant Service Providers, and Other Local Service Providers are small entities.

9. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a definition for Interexchange Carriers. The closest NAICS code category is Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. The applicable size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees.52 U.S. Census data for 2012 indicates that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees.53 According to internally developed Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services.54 Of this total, an estimated 317 have 1,500 or fewer employees.55 Consequently, the Commission estimates that most interexchange service providers are small entities that may be affected by the rules adopted.

10. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business definition specifically for prepaid calling card providers. The most appropriate NAICS code-based category for defining prepaid calling card providers is Telecommunications Resellers. This industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual networks operators (MVNOs) are included in this industry.56 Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.57 U.S. Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.58 Thus, under this category and the associated small business size standard, the majority of these prepaid calling card providers can be considered small entities. According to Commission data, 193 carriers have reported that they are engaged in the provision of prepaid calling cards.59 All 193 carriers have 1,500 or fewer employees.60 Consequently, the Commission estimates that the majority of prepaid calling card providers are small entities that may be affected by the rules adopted.

11. Local Resellers. Neither the Commission nor the SBA has developed a small business size standard specifically for Local Resellers. The SBA has developed a small business size standard for the category of Telecommunications Resellers. Under that size standard, such a business is small if it has 1,500 or fewer employees.61 Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.62 Under this category and the associated small business size standard, the majority of these local resellers can be considered small entities. According to Commission data, 213 carriers have reported that they are engaged in the provision of local resale services.63 Of this total, an estimated 211 have 1,500 or fewer employees.64 Consequently, the Commission estimates that the majority of local resellers are small entities that may be affected by the rules adopted.

12. Toll Resellers. The Commission has not developed a definition for Toll Resellers. The closest NAICS code Category is Telecommunications Resellers, and the SBA has developed a small business size standard for the category of Telecommunications Resellers.65 Under that size standard, such a business is small if it has 1,500 or fewer employees.66 Census data for 2012 show that 1,341 firms provided resale services during that year. Of that number, 1,341 operated with fewer than 1,000 employees.67 Thus, under this category and the associated small business size standard, the majority of these resellers can be considered small entities. According to Commission data, 881 carriers have reported that they are engaged in the provision of toll resale services.68 Of this total, an estimated 857 have 1,500 or fewer employees.69 Consequently, the Commission estimates that the majority of toll resellers are small entities.

13.Other Toll Carriers. Neither the Commission nor the SBA has developed a definition for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable NAICS code category is for Wired Telecommunications Carriers as defined in paragraph 6 of this FRFA. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees.70 Census data for 2012 shows that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees.71 Thus, under this category and the associated small business size standard, most Other Toll Carriers can be considered small. According to internally developed Commission data, 284 companies reported that their primary telecommunications service activity was the provision of other toll carriage.72 Of these, an estimated 279 have 1,500 or fewer employees.73 Consequently, the Commission estimates that most Other Toll Carriers are small entities.

14. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services.74 The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, Census data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had fewer than 1,000 employees. Thus, under this category and the associated size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities. Similarly, according to internally developed Commission data, 413 carriers reported that they were engaged in the provision of wireless telephony, including cellular service, Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) services.75 Of this total, an estimated 261 have 1,500 or fewer employees.76 Thus, using available data, we estimate that the majority of wireless firms can be considered small.

15. Television Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.” 77 These establishments also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the public on a predetermined schedule. Programming may originate in their own studio, from an affiliated network, or from external sources. The SBA has created the following small business size standard for Television Broadcasting firms: those having $38.5 million or less in annual receipts.78 The 2012 Economic Census reports that 751 television broadcasting firms operated during that year. Of that number, 656 had annual receipts of less than $25 million per year. Based on that Census data we conclude that most firms that operate television stations are small. The Commission has estimated the number of licensed commercial television stations to be 1,383.79 In addition, according to Commission staff review of the BIA Advisory Services, LLC's Media Access Pro Television Database, on March 28, 2012, about 950 of an estimated 1,300 commercial television stations (or approximately 73 percent) had revenues of $14 million or less.80 We therefore estimate that the majority of commercial television broadcasters are small entities.

16. In assessing whether a business concern qualifies as small under the above definition, business (control) affiliations 81 must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply does not exclude any television station from the definition of a small business on this basis and is therefore possibly over-inclusive to that extent.

17. In addition, the Commission has estimated the number of licensed noncommercial educational television stations to be 394.82 These stations are non-profit, and therefore considered to be small entities.83 There are also 2,382 low power television stations, including Class A stations.84 Given the nature of these services, we will presume that all LPTV licensees qualify as small entities under the above SBA small business size standard.

18. Radio Broadcasting.

This Economic Census category “comprises establishments primarily engaged in broadcasting aural programs by radio to the public. Programming may originate in their own studio, from an affiliated network, or from external sources.” 85 The SBA has established a small business size standard for this category, which is: such firms having $38.5 million or less in annual receipts.86 Census data for 2012 show that 2,849 radio station firms operated during that year. Of that number, 2,806 operated with annual receipts of less than $25 million per year.87 According to Commission staff review of BIA Advisory Services, LLC's Media Access Pro Radio Database, on March 28, 2012, about 10,759 (97 percent) of 11,102 commercial radio stations had revenues of $38.5 million or less. Therefore, most such entities are small entities.

19. In assessing whether a business concern qualifies as small under the above size standard, business affiliations must be included.88 In addition, to be determined to be a “small business,” the entity may not be dominant in its field of operation.89 We note that it is difficult at times to assess these criteria in the context of media entities, and our estimate of small businesses may therefore be over-inclusive.

20. Cable Television and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature (e.g., limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers.90 The SBA has established a size standard for this industry of $38.5 million or less. Census data for 2012 shows that there were 367 firms that operated that year. Of this total, 319 operated with annual receipts of less than $25 million.91 Thus under this size standard, most firms offering cable and other program distribution services can be considered small and may be affected by rules adopted.

21. Cable Companies and Systems. The Commission has developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide.92 Industry data indicate that there are currently 4,413 active cable systems in the United States.93 Of this total, all but ten cable operators nationwide are small under the 400,000-subscriber size standard.94 In addition, under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer subscribers.95 Current Commission records show 4,413 cable systems nationwide.96 Of this total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 systems have 15,000 or more subscribers, based on the same records.97 Thus, under this standard as well, we estimate that most cable systems are small entities.

22. Cable System Operators (Telecom Act Standard). The Communications Act also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” 98 There are approximately 53 million cable video subscribers in the United States today.99 Accordingly, an operator serving fewer than 524,037 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate.100 Based on available data, we find that all but nine incumbent cable operators are small entities under this size standard.101 We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million.102 Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

23. Direct Broadcast Satellite (DBS) Service. DBS Service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic dish antenna at the subscriber's location. DBS is now included in SBA's economic census category “Wired Telecommunications Carriers.” The Wired Telecommunications Carriers industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution; and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.103 The SBA determines that a wireline business is small if it has fewer than 1500 employees.104 Census data for 2012 indicate that 3,117 wireline companies were operational during that year. Of that number, 3,083 operated with fewer than 1,000 employees.105 Based on that data, we conclude that most wireline firms are small under the applicable standard. However, currently only two entities provide DBS service, AT&T and DISH Network. AT&T and DISH Network each report annual revenues that are in excess of the threshold for a small business. Accordingly, we conclude that DBS service is provided only by large firms.

24. All Other Telecommunications. “All Other Telecommunications” is defined as follows: This U.S. industry is comprised of establishments that are primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Establishments providing internet services or voice over internet protocol (VoIP) services via client-supplied telecommunications connections are also included in this industry.106 The SBA has developed a small business size standard for “All Other Telecommunications,” which consists of all such firms with gross annual receipts of $32.5 million or less.107 For this category, census data for 2012 show that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million.108 Thus, most “All Other Telecommunications” firms potentially affected by the rules adopted can be considered small.

25. RespOrgs. RespOrgs, i.e., Responsible Organizations, are entities chosen by toll-free subscribers to manage and administer the appropriate records in the toll-free Service Management System for the toll-free subscriber.109 Although RespOrgs are often wireline carriers, they can also include non-carrier entities. Therefore, in the definition herein of RespOrgs, two categories are presented, i.e., Carrier RespOrgs and Non-Carrier RespOrgs.

26. Carrier RespOrgs. Neither the Commission, the U.S. Census, nor the SBA have developed a definition for Carrier RespOrgs. Accordingly, the Commission believes that the closest NAICS code-based definitional categories for Carrier RespOrgs are Wired Telecommunications Carriers110 and Wireless Telecommunications Carriers (except satellite).111

27. The U.S. Census Bureau defines Wired Telecommunications Carriers as establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.112 The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees.113 Census data for 2012 show that there were 3,117 Wired Telecommunications Carrier firms that operated for that entire year. Of that number, 3,083 operated with less than 1,000 employees.114 Based on that data, we conclude that most Carrier RespOrgs that operated with wireline-based technology are small.

28. The U.S. Census Bureau defines Wireless Telecommunications Carriers (except satellite) as establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves, such as cellular services, paging services, wireless internet access, and wireless video services.115 The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees.116 Census data for 2012 show that 967 Wireless Telecommunications Carriers operated in that year. Of that number, 955 operated with less than 1,000 employees.117 Based on that data, we conclude that most Carrier RespOrgs that operated with wireless-based technology are small.

29. Non-Carrier RespOrgs. Neither the Commission, the Census, nor the SBA have developed a definition of Non-Carrier RespOrgs. Accordingly, the Commission believes that the closest NAICS code-based definitional categories for Non-Carrier RespOrgs are “Other Services Related To Advertising” 118 and “Other Management Consulting Services.” 119

30. The U.S. Census defines Other Services Related to Advertising as comprising establishments primarily engaged in providing advertising services (except advertising agency services, public relations agency services, media buying agency services, media representative services, display advertising services, direct mail advertising services, advertising material distribution services, and marketing consulting services.120 The SBA has established a size standard for this industry as annual receipts of $15 million dollars or less.121 Census data for 2012 show that 5,804 firms operated in this industry for the entire year. Of that number, 5,249 operated with annual receipts of less than $10 million.122 Based on that data we conclude that most Non-Carrier RespOrgs who provide TFN-related advertising services are small.

31. The U.S. Census defines Other Management Consulting Services as establishments primarily engaged in providing management consulting services (except administrative and general management consulting; human resources consulting; marketing consulting; or process, physical distribution, and logistics consulting). Establishments providing telecommunications or utilities management consulting services are included in this industry.123 The SBA has established a size standard for this industry of $15 million dollars or less.124 Census data for 2012 show that 3,683 firms operated in this industry for that entire year. Of that number, 3,632 operated with less than $10 million in annual receipts.125 Based on this data, we conclude that most non-carrier RespOrgs who provide TFN-related management consulting services are small.126

32. In addition to the data contained in the four (see above) U.S. Census NAICS code categories that provide definitions of what services and functions the Carrier and Non-Carrier RespOrgs provide, Somos, the trade association that monitors RespOrg activities, compiled data showing that as of July 1, 2016, there were 23 RespOrgs operational in Canada and 436 RespOrgs operational in the United States, for a total of 459 RespOrgs currently registered with Somos.127

33. This Report and Order does not adopt any new reporting, recordkeeping, or other compliance requirements.

34. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its approach, which may include the following four alternatives, among others: (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.128

35. This Report and Order adopts new tiers in assessing regulatory fees for submarine cable systems. There should not be a significant impact on small entities because the fee is based on the number of systems and would therefore reflect the size of the entity. In keeping with the requirements of the Regulatory Flexibility Act, we have considered certain alternative means of mitigating the effects of fee increases to a particular industry segment. For example, the Commission has increased the de minimis threshold to $1,000, which will impact many small entities that pay regulatory fees. This increase in the de minimis threshold to $1,000 will relieve regulatees both financially and administratively. Regulatees may also seek waivers or other relief on the basis of financial hardship. See 47 CFR 1.1166.

None.

36. Accordingly, it is ordered that, pursuant to Section 9(a), (b), (e), (f), and (g) of the Communications Act of 1934, as amended, 47 U.S.C. 159(a), (b), (e), (f), and (g), this Report and Order is hereby adopted.

This document announces that, on July 2, 2018, OMB approved, for a period of three years, the information collection requirements relating to certain discontinuance rules contained in the Commission's Technology Transitions et al. Declaratory Ruling, Second Report and Order, and Order on Reconsideration, FCC 16-90, published at 81 FR 62632, September 12, 2016, as specified above.

The OMB Control Number is 3060-0149. The Commission publishes this document as an announcement of the effective date of the rules. If you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Nicole Ongele, Federal Communications Commission, Room 1-A620, 445 12th Street SW, Washington, DC 20554. Please include the OMB Control Number, 3060-0149, in your correspondence. The Commission will also accept your comments via email at [email protected].

To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received final OMB approval on July 2, 2018, for the information collection requirements contained in the modifications to the Commission's rules in 47 CFR part 63. Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.

No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-0149.

The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.

The total annual reporting burdens and costs for the respondents are as follows:

OMB Control Number: 3060-0149.

OMB Approval Date: July 2, 2018.

OMB Expiration Date: July 31, 2021.

Title: Part 63, Application and Supplemental Information Requirement, Technology Transitions, GN Docket No. 13-5, et al.

Form Number: N/A.

Respondents: Business or other for-profit entities.

Number of Respondents and Responses: 63 respondents; 83 responses.

Estimated Time per Response: 5.3 hours.

Frequency of Response: One-time reporting requirement and third-party disclosure requirements.

Obligation to Respond: Required to obtain or retain benefits. Statutory authority for this collection of information is contained in 47 U.S.C. 214 and 402 of the Communications Act of 1934, as amended.

Total Annual Burden: 1,923 hours.

Total Annual Cost: $27,900.

Privacy Act Impact Assessment: No impact(s).

Nature and Extent of Confidentiality: The Commission is not requesting that the respondents submit confidential information to the FCC. Respondents may, however, request confidential treatment for information they believe to be confidential under 47 CFR 0.459 of the Commission's rules.

Needs and Uses: The Commission is seeking Office of Management and Budget (OMB) approval for a revision of a currently approved collection. The Commission will submit this information collection after this 60-day comment period. Section 214 of the Communications Act of 1934, as amended, requires that a carrier must first obtain FCC authorization either to (1) construct, operate, or engage in transmission over a line of communications; or (2) discontinue, reduce or impair service over a line of communications. Part 63 of Title 47 of the Code of Federal Regulations (CFR) implements Section 214. Part 63 also implements provisions of the Cable Communications Policy Act of 1984 pertaining to video which was approved under this OMB Control Number 3060-0149. In 2009, the Commission modified Part 63 to extend to providers of interconnected Voice of internet Protocol (VoIP) service the discontinuance obligations that apply to domestic non-dominant telecommunications carriers under Section 214 of the Communications Act of 1934, as amended. In 2014, the Commission adopted improved administrative filing procedures for domestic transfers of control, domestic discontinuances and notices of network changes, and among other adjustments, modified Part 63 to require electronic filing for applications for authorization to discontinue, reduce, or impair service under section 214(a) of the Act. In July 2016, the Commission concluded that applicants seeking to discontinue a legacy time division multiplexing (TDM)-based voice service as part of a transition to a new technology, whether internet Protocol (IP), wireless, or another type (technology transition discontinuance application) must demonstrate that an adequate replacement for the legacy service exists in order to be eligible for streamlined treatment and revised part 63 accordingly. For any other domestic service for which a discontinuance application is filed, the existing framework governs automatic grant procedures. Unlike traditional applicants, technology transition discontinuance applicants seeking streamlined treatment will be required to submit with their application either a certification or a showing as to whether an “adequate replacement” exists in the service area. Voice technology transition discontinuance applicants that decline to pursue this path are not eligible for streamlined treatment and will have their applications evaluated on a non-streamlined basis under the traditional five factor test. The Commission concluded that an applicant for a technology transition discontinuance may demonstrate that a service is an adequate replacement for a legacy voice service by certifying or showing that one or more replacement service(s) offers all of the following: (i) Substantially similar levels of network infrastructure and service quality as the applicant service; (ii) compliance with existing federal and/or industry standards required to ensure that critical applications such as 911, network security, and applications for individuals with disabilities remain available; and (iii) interoperability and compatibility with an enumerated list of applications and functionalities determined to be key to consumers and competitors. One replacement service must satisfy all the criteria to retain eligibility for automatic grant. The Commission also determined that information about the price of the legacy service and the proposed replacement service should be provided as part of the application. To reduce burdens on carriers, the Commission (1) adopted a more streamlined approach for legacy voice discontinuances involving services that are substantially similar to those for which a Section 214 discontinuance meeting the adequate replacement criteria has previously been approved, and (2) now allows Section 214 discontinuance applications to be eligible for automatic grant if the applicant seeks to discontinue a legacy voice service operating at speeds lower than 1.544 Mbps that either has zero customers in the relevant service area and no requests for service in the last 30 days, or if the applicant plans to grandfather existing customers of the service while ceasing to accept new customers. The Commission estimates that there will be five respondents submitting 25 applications/responses related to these revisions. The Commission also estimates that these revisions will result in a total of 1,575 annual burden hours and a total annual cost of $27,900. The Commission estimates that the total annual burden and annual cost of the entire collection, as revised, is 1,923 and $27,900, respectively.

The ESA-CMP (81 FR 95316, December 27, 2016) was developed to ensure consistency with existing directives in effect at the time of issuance, including former President Obama's Memorandum on Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment (November 3, 2015). Under the memorandum, all Federal mitigation policies were directed to clearly set a net-benefit goal or, at minimum, a no-net-loss goal for natural resources, wherever doing so is allowed by existing statutory authority and is consistent with agency mission and established natural resource objectives. The Presidential Memorandum was subsequently rescinded by Executive Order 13783, “Promoting Energy Independence and Economic Growth” (March 28, 2017).

The ESA-CMP also described its consistency with the Secretary of the Interior's Order 3330 on Improving Mitigation Policies and Practices of the Department of the Interior (October 31, 2013), which established a Department-wide mitigation strategy to ensure consistency and efficiency in the review and permitting of infrastructure-development projects and in conserving natural and cultural resources. The Secretary's Order was subsequently revoked by Secretary of the Interior's Order 3349 on American Energy Independence (March 29, 2017). It directed Department of the Interior bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families.

In light of the revocation of the 2015 Presidential Memorandum and Secretary's Order 3330, on November 6, 2017, the Service requested comment on the ESA-CMP, along with the Service-Wide Mitigation Policy (81 FR 83440, November 21, 2016), specifically “regarding whether to retain or remove net conservation gain as a mitigation planning goal within our mitigation policies.” Mitigation Policies of the U.S. Fish and Wildlife Service; Request for Comment (82 FR 51382, 51383, November 6, 2017). The comment period for this request ended on January 5, 2018.

Under Supreme Court precedent, the Takings Clause of the Fifth Amendment of the United States Constitution limits the ability of government to require monetary exactions as a condition of permitting private activities, particularly private activities on private property. In Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), the Supreme Court held that a proposal to fund offsite mitigation proposed by the State of Florida as a condition of granting a land-use permit must satisfy the test established in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). Specifically, “a unit of government may not condition the approval of a land-use permit on the owner's relinquishment of a portion of his property unless there is a `nexus' and `rough proportionality' between the government's demand and the effects of the proposed land use.” Id. at 599. Compensatory mitigation raises serious questions of whether there is a sufficient nexus between the potential harm and the proposed remedy to satisfy constitutional muster.

Further, because by definition compensatory mitigation does not directly avoid or minimize the anticipated harm, its application is particularly ripe for abuse. At times the nexus between a proposed undertaking and compensatory mitigation requirements is far from clear. These concerns are particularly acute when coupled with a net conservation gain goal, which necessarily seeks to go beyond mitigating actual or anticipated harm to forcing participants to pay to address harms they, by definition, did not cause.

In light of the change in national policy reflected in Executive Order 13783 and Secretary's Order 3349, the comments received by the Service, and concerns regarding the legal and policy implications of a net conservation gain goal, the Service has concluded that it is no longer appropriate to retain a net conservation gain standard in the Service's overall mitigation planning goal within the ESA-CMP. Because the net conservation gain standard is so prevalent throughout the ESA-CMP, the Service is implementing this conclusion by withdrawing it.

Executive Order 13783—“Promoting Energy Independence and Economic Growth” (March 28, 2017)—rescinded the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment. The Secretary of the Interior subsequently issued Secretarial Order 3349 on American Energy Independence (March 29, 2017), which directed Department of the Interior (DOI) bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families. Pursuant to Secretarial Order 3349, we published a notice on November 6, 2017 (82 FR 51382) requesting additional public comments specifically addressing the advisability of retaining or removing references to net conservation gain as a mitigation planning goal within our mitigation policies. In addition, in carrying out Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” DOI published a document with the title “Regulatory Reform” in the Federal Register of June 22, 2017 (82 FR 28429). The document requested public comment on how DOI can improve implementation of regulatory reform initiatives and policies and identify regulations for repeal, replacement, or modification. This notice addresses comments that DOI has received in response to the regulatory reform docket that relates to the Service's use of mitigation.

During the combined comment periods, for the ESA-CMP we received approximately 335 public comment letters, including comments from Federal, State, and local government entities; industry; trade associations; conservation organizations; nongovernmental organizations; private citizens; and others. The range of comments varied from those that provided general statements of support or opposition to the draft and final 2016 ESA-CMP, to those that provided extensive comments and information supporting or opposing the draft and final 2016 ESA-CMP.

We considered all of the comments we received in the comment period beginning November 6, 2017 (82 FR 51382), and following the DOI's “Regulatory Reform” Federal Register announcement (June 22, 2017, 82 FR 28429); we respond to the substantive comments below.

Comment (1): One commenter stated there were constitutional limits on requiring mitigation, referencing the Koontz v. St. Johns River Water Management District case decided by the U.S. Supreme Court, 570 U.S. 595 (2013). This commenter noted that any compensatory mitigation measures must have an essential nexus with the proposed impacts and be roughly proportional, or have a reasonable relationship between the permit conditions required and the impacts of the proposed development being addressed by those permit conditions.

Response: The Service agrees that the Koontz case, as well as predecessor cases including, but not limited to, Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), raise serious constitutional concerns about the viability of some elements of compensatory-mitigation programs. These concerns are particularly acute for offsite compensatory-mitigation programs and programs that seek a net conservation gain. Offsite compensatory-mitigation programs raise concerns regarding an appropriate nexus between the anticipated impact and the mitigation requirement. As mitigation moves further away from the direct impacts of a project, the risk that the connection between required compensation and the initial project becomes more attenuated increases. Further, by seeking to err on the side of mitigating above and beyond the impacts of the specific project at issue, the net conservation gain standard raises inherent concerns about proportionality, as well as the appropriate nexus between project impacts and mitigation methods, particularly where mitigation is in essence being used to rectify past, unrelated harms. We, like all agencies, must implement our authorities consistent with any applicable case law as appropriate. Consideration of the Constitutional standard set forth in Koontz is one reason, though not the only reason, that the Service is withdrawing its previous Mitigation Policy and ESA-CMP. In light of the Koontz case and any other relevant court decisions, the Service, in using its previous guidance (e.g., 2003 guidance on the establishment, use, and operation of conservation banks (68 FR 24753, May 8, 2003) and 2008 recovery crediting guidance (73 FR 44761, July 31, 2008)), will make sure that any statutorily authorized mitigation measures will have a clear connection (i.e., have an essential nexus) and be commensurate (i.e., have rough proportionality) to the impact of the project or action under consideration.

Comment (2): Many commenters addressed the mitigation planning goal of improving (i.e., a net gain) or, at minimum, maintaining (i.e., no net loss) the current status of affected resources. A number of commenters supported the goal while a number of commenters opposed the inclusion of a net conservation gain. Of commenters opposed to net conservation gain, their specific reasons included:

(a) The Service lacks the statutory authority to implement the net conservation gain goal for mitigation planning;

(b) the net conservation gain goal imposes a new standard for mitigation and that mitigation requirements should be commensurate with the level of impacts;

(c) concern about the costs associated with achieving net conservation gain;

(d) questions about the ability to achieve net conservation gain and how it would be measured;

(e) the ESA-CMP does not provide the methodology to assess or measure the net conservation gain; and

(f) net conservation gain is incompatible with the standards of ESA sections 7 and 10.

Also, several commenters asserted that a mitigation planning goal of no net loss is inconsistent with the ESA and exceeds our authorities under the ESA.

Response: The ESA requires neither “net conservation benefit” nor “no net loss,” and the Service has not previous required a “net benefit” nor “no net loss” while implementing the ESA. Under the ESA, the standard for section 7 is that a “Federal agency shall, in consultation with and with the assistance of the Secretary, insure that any action . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat.” (§ 7(a)(2)); under section 10 the requirement is “to the maximum extent practicable, minimize and mitigate the impacts of such taking” (§ 10(a)(2)(B)(ii)). As one court has noted, “[t]he words `maximum extent practicable' signify that the applicant may do something less than fully minimize and mitigate the impacts of the take where to do more would not be practicable. Moreover, the statutory language does not suggest that an applicant must ever do more than mitigate the effect of its take of species.” National Wildlife Federation v. Norton, 306 F. Supp. 2d 920, 928 (E.D. Cal. 2004); see also Union Neighbors United, Inc. v. Jewell, 831 F.3d 564 (D.C. Cir. 2016) (holding that the obligation to minimize and mitigate to the maximum extent practicable was satisfied by a plan that the Service found to fully offset the impact of the proposed taking). Since what is “practicable” may not fully offset proposed take, the “maximum extent practicable” standard is inconsistent with both a general net conservation gain and no-net-loss mitigation objective. Nothing in the ESA requires that the Service apply a net conservation gain or no net loss standard.

Those commenters supporting the goal generally asserted, among other points, that the Service has the authority to require compensatory mitigation, found the measures to be clear, and thought the policy encouraged consistent implementation. While we appreciate these comments, for the reasons described above, we are not persuaded.

As noted above, because the concepts of “net conservation gain” and “no net loss” were central to and embedded throughout the policies, modifying the policies would likely have caused significant confusion. This fact, together with the more recently issued Executive and Secretarial Orders that questioned “net gain,” lead to our decision here to withdraw the ESA-CMP.

Comment (3): Several commenters described their concerns with the implications of the ESA-CMP's landscape-scale approach including:

(a) There is no statutory authority for taking a landscape-scale approach;

(b) Including a landscape-scale approach would lead to the Service seeking mitigation for impacts beyond a project under review, including impacts that happened in the past or in unrelated locations;

(c) A general concern that a landscape-scale approach would mean Federal overreach, including disregard for the plans, processes, and resource interests of States, Tribes, and local governments.

Response: We agree with commenters that proponents' and action agencies' responsibilities include the provisions of relevant authorities and that those responsibilities do not extend to impacts unrelated to their action. Requiring mitigation to impacts unrelated to a proponent's action would likely conflict with the “essential nexus” required under Koontz for property development (see Comment 1 above). Accordingly, any effort to apply a landscape-scale approach to mitigation must ensure that there is an essential nexus between the proposed activity and the contemplated mitigation and that mitigation is not being imposed to correct for past impacts by other actors.

Comment (4): Several commenters stated that the Service has no statutory authority under the ESA to include candidate or at-risk species in compensatory-mitigation mechanisms.

Response: The commenter is correct that the Service cannot require the inclusion of compensatory mitigation for impacts to at-risk and candidate species. Including candidate or other at-risk species in mitigation would be voluntary on the part of the Federal agency or applicant, which may, if the species is listed, streamline future reinitiation of consultation or amendments to habitat conservation plans (HCPs). Under section 10 of the ESA, although the applicant voluntarily develops its HCPs in consultation with the Service, the applicant ultimately decides which candidate or non-listed at-risk species it desires to include in its HCP. Many applicants voluntarily include at-risk species in their HCPs to receive “no surprises” assurances and preclude the need to amend the associated incidental take permit, should the species become listed in the future. This is consistent with ESA goals of recovering listed species and, ideally, avoiding the need to list species because threats to them have been addressed. Furthermore, applicants may include candidate or other at-risk species to address State or other local requirements (e.g., California's Natural Community Conservation Planning Act). But in all cases, considerations of non-ESA-listed species are voluntary on the part of the Federal agency or applicant.

We have analyzed the withdrawal of this policy in accordance with the criteria of the National Environmental Policy Act, as amended (NEPA) (42 U.S.C. 4332(c)), the Council on Environmental Quality's Regulations for Implementing the Procedural Provisions of NEPA (40 CFR parts 1500-1508), and the Department of the Interior's NEPA procedures (516 DM 2 and 8; 43 CFR part 46). Issuance of policies, directives, regulations, and guidelines that are of an administrative, financial, legal, technical, or procedural nature, or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case may be categorically excluded under NEPA (43 CFR 46.210(i)). We have determined that a categorical exclusion applies to withdrawing this policy.

This policy withdrawal does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). OMB has reviewed and approved the information collection requirements for applications for incidental take permits, annual reports, and notifications of incidental take for native endangered and threatened species for safe harbor agreements, candidate conservation agreements with assurances, and habitat conservation plans under OMB Control Number 1018-0094, which expires on March 31, 2019. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175 “Consultation and Coordination with Indian Tribal Governments,” and the Department of the Interior Manual at 512 DM 2, we have considered possible effects on federally recognized Indian tribes and have determined that there are no potential adverse effects of withdrawing this policy. Our intent with withdrawing these policies is to reduce confusion of mitigation programs, projects, and measures, including those taken on Tribal lands. We will work with Tribes as applicants proposing mitigation as part of proposed actions and with Tribes as mitigation sponsors.

The multiple authorities for this action include the: Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.); Fish and Wildlife Coordination Act, as amended, (16 U.S.C. 661-667(e)); and National Environmental Policy Act (42 U.S.C. 4371 et seq.).

The Mitigation Policy (81 FR 83440, November 21, 2016) was developed to ensure consistency with directives in effect at the time of issuance, including former President Obama's Memorandum on Mitigating Impacts on Natural Resources From Development and Encouraging Related Private Investment (November 3, 2015). Under the memorandum, all Federal mitigation policies were directed to clearly set a net-benefit goal or, at minimum, a no-net-loss goal for natural resources, wherever doing so is allowed by existing statutory authority and is consistent with agency mission and established natural resource objectives. The Presidential Memorandum was subsequently rescinded by Executive Order 13783, “Promoting Energy Independence and Economic Growth” (March 28, 2017).

The Mitigation Policy also described its consistency with the Secretary of the Interior's Order 3330 on Improving Mitigation Policies and Practices of the Department of the Interior (October 31, 2013), which established a Department-wide mitigation strategy to ensure consistency and efficiency in the review and permitting of infrastructure-development projects and in conserving natural and cultural resources. The Secretary's Order was subsequently revoked by Secretary of the Interior's Order 3349 on American Energy Independence (March 29, 2017). It directed Department of the Interior bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families.

In light of the revocation of the 2015 Presidential Memorandum and Secretary's Order 3330, on November 6, 2017, the Service requested comment on the Mitigation Policy, as well as the Endangered Species Act—Compensatory Mitigation Policy (81 FR 95316, December 27, 2016), specifically “regarding whether to retain or remove net conservation gain as a mitigation planning goal within our mitigation policies.” Mitigation Policies of the U.S. Fish and Wildlife Service; Request for Comment (82 FR 51382, 51383, November 6, 2017). The comment period for this request ended on January 5, 2018.

Under Supreme Court precedent, the Takings Clause of the Fifth Amendment of the United States Constitution limits the ability of government to require monetary exactions as a condition of permitting private activities, particularly private activities on private property. In Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), the Supreme Court held that a proposal to fund offsite mitigation proposed by the State of Florida as a condition of granting a land-use permit must satisfy the test established in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994). Specifically, “a unit of government may not condition the approval of a land-use permit on the owner's relinquishment of a portion of his property unless there is a `nexus' and `rough proportionality' between the government's demand and the effects of the proposed land use.” Id. at 599.

Compensatory mitigation requirements in particular raise serious questions of whether there is a sufficient nexus between the potential harm and the proposed remedy to satisfy constitutional muster. Further, because by definition compensatory mitigation does not directly avoid or minimize the anticipated harm, its application is particularly ripe for abuse. These concerns are particularly acute when coupled with a net conservation gain standard, which necessarily goes beyond mitigating actual or anticipated harm to forcing participants to pay to address harms they, by definition, did not cause.

In light of the change in national policy reflected in Executive Order 13783 and Secretary's Order 3349, the comments received by the Service, and concerns regarding the legal and policy implications of compensatory mitigation, particularly compensatory mitigation with a net conservation gain policy, the Service has concluded that it is no longer appropriate to retain references to or mandate a net conservation gain standard in the Service's overall mitigation planning goal within each document. Because the net conservation gain standard is so prevalent throughout the Mitigation Policy, the Service is implementing this conclusion by withdrawing the Mitigation Policy.

Executive Order 13783—“Promoting Energy Independence and Economic Growth” (March 28, 2017)—rescinded the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment. The Secretary of the Interior subsequently issued Secretarial Order 3349 on American Energy Independence (March 29, 2017), which directed Department of the Interior (DOI) bureaus to reexamine mitigation policies and practices to better balance conservation strategies and policies with job creation for American families. Pursuant to Secretarial Order 3349, we published a notice on November 6, 2017 (82 FR 51382), requesting additional public comments specifically addressing the advisability of retaining or removing references to net conservation gain as a mitigation planning goal within our mitigation policies. In addition, in carrying out Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” DOI published a document with the title “Regulatory Reform” in the Federal Register of June 22, 2017 (82 FR 28429). The document requested public comment on how DOI can improve implementation of regulatory reform initiatives and policies and identify regulations for repeal, replacement, or modification. This notice addresses comments that DOI has received in response to the regulatory reform docket that relates to the Service's use of mitigation.

During the combined comment periods, for the Service-wide Mitigation Policy we received approximately 427 comments from Federal, State, and local government entities, industry, trade associations, conservation organizations, nongovernmental organizations, private citizens, and others. Two of those submissions transmitted the discrete comments from an additional 1,756 citizens expressing support for the Service's mitigation policy approach. The range of comments otherwise varied from those that provided general statements of support or opposition to the draft or final Policy, to those that provided extensive comments and information supporting or opposing the draft or final Policy, or specific aspects thereof. The majority of comments submitted included detailed suggestions for revisions addressing major concepts as well as editorial suggestions for specific wording or line edits.

We considered all of the comments we received in the comment period beginning November 6, 2017 (82 FR 51382), and following the DOI's “Regulatory Reform” Federal Register announcement (June 22, 2017, 82 FR 28429); we respond to the substantive comments below.

Comment (1): One commenter stated there were constitutional limits on requiring mitigation, referencing the Koontz v. St. Johns River Water Management District case decided by the U.S. Supreme Court, 570 U.S. 595 (2013). This commenter noted that any compensatory mitigation measures must have an essential nexus with the proposed impacts and be roughly proportional, or have a reasonable relationship between the permit conditions required and the impacts of the proposed development being addressed by those permit conditions.

Response: The Service agrees that the Koontz case, as well as predecessor cases including, but not limited to, Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), raise serious constitutional concerns about the viability of some elements of the Service's mitigation programs. These concerns are particularly acute for offsite compensatory-mitigation programs and programs that seek a net conservation gain. Offsite compensatory-mitigation programs raise concerns regarding an appropriate nexus between the anticipated impact and the mitigation requirement. As mitigation moves further away from the direct impacts of a project, the risk that the connection between required compensation and the initial project becomes more attenuated increases. Further, by seeking to err on the side of mitigating above and beyond the impacts of the specific project at issue, a net conservation gain standard raises inherent concerns about proportionality, as well as the appropriate nexus between project impacts and mitigation methods, particularly where mitigation is in essence being used to rectify past, unrelated harms. We, like all agencies, must implement our authorities consistent with any applicable case law as appropriate. Consideration of the Constitutional standard set forth in Koontz is one reason, though not the only reason, that the Service is withdrawing its previous Mitigation Policy. In light of the Koontz case and any other relevant court decisions, the Service, in using its previous policies (e.g., 1981 Policy), will make sure that any statutorily authorized mitigation measures will have a clear connection (i.e., have an essential nexus) and be commensurate (i.e., have rough proportionality) to the impact of the project or action under consideration.

Comment (2): Several commenters addressed aspects of the Service's authority under the Bald and Golden Eagle Protection Act (Eagle Act). One commenter supported the acknowledgement that compensatory mitigation for bald and golden eagles may include preservation of those species' habitats and enhancing their prey base. The commenter noted that existing regulations establishing a permit program for the non-purposeful take of bald and golden eagles recognize these options but that these options have not been used. One commenter stated the Service was incorrect in stating in the proposed Policy: “the statute and implementing regulations allow the Service to require habitat preservation and/or enhancement as compensatory mitigation for eagle take.” The commenter said that Congress has not exercised jurisdiction over the habitats of eagles, meaning the Service lacks authority to require mitigation for impacts to eagle habitats. One commenter suggested the Policy should articulate whether compensatory mitigation would be in addition to current requirements of a 1-for-1 take offset.

Response: We agree that the authority of the Eagle Act is limited, and the Service has outlined its authority in its regulations (50 CFR part 22). Nothing in the Eagle Act directly addresses eagle habitat, or requires that the Service apply a net conservation gain standard. Accordingly, the withdrawal of the 2016 Mitigation Policy and reinstatement of the 1981 Mitigation Policy will not change our authority under the Eagle Act.

Comment (3): Several commenters addressed the Service's authority under the Migratory Bird Treaty Act (MBTA). One commenter said the Service was incorrect in describing implied authority to permit incidental take of migratory birds under the MBTA and noted that the Service has no authority to require compensatory mitigation for incidental take of migratory birds. Several commenters said that mitigation for migratory birds exceeds MBTA authority and that the Policy should exclude potential incidental impacts to migratory birds under the MBTA until the Service establishes statutory or regulatory authority to require landowners to obtain incidental take authorization prior to undertaking otherwise lawful activities. They added that the MBTA does not directly address mitigation or habitat impacts.

One commenter said the Service was incorrect in writing that the Fish and Wildlife Conservation Act implicitly provided for mitigation of impacts to migratory birds. The commenter said that the language does not authorize the Service to engage in any management activities associated with migratory birds, particularly over private parties, only directing the Service to monitor and assess population trends and species status of migratory nongame birds.

Response: DOI's Office of the Solicitor issued M-Opinion 37050, The Migratory Bird Treaty Act Does Not Prohibit Incidental Take (M-Opinion), on December 22, 2017, which concludes that the take of birds resulting from an activity is not prohibited by the MBTA when the underlying purpose of that activity is not to take birds. In addition, the Service does not have specific statutory authority pursuant to the MBTA to require Federal action agencies and/or their permittees to provide compensatory mitigation for unavoidable impacts to (loss of) migratory bird habitat resulting from federally conducted or approved, authorized, or funded projects or activities. Like the Eagle Act, the MBTA does not directly protect habitat. When the Service authorizes otherwise prohibited intentional take, however, it can make that authorization subject to appropriate conditions, including non-compensatory mitigation, such as measures to avoid, minimize, reduce, or rectify anticipated harm. In addition, Executive Order (E.O.) 13186 directs Federal agencies “taking actions that have, or are likely to have, a measurable negative effect on migratory bird populations” to sign a Memorandum of Understanding with the Service “that shall promote the conservation of migratory bird populations.”

Comment (4): One commenter specifically questioned the treatment of Natural Resource Damage Assessment actions conducted under the Comprehensive Environmental Response, Compensation, and Liability Act, Oil Pollution Act, and the Clean Water Act, stating that the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment, dated November 3, 2015, requires that separate guidance be developed for when restoration banking or advance restoration would be appropriate.

Response: The Presidential Memorandum on Mitigation was rescinded by Executive Order 13783, Promoting Energy Independence and Economic Growth (March 28, 2017). Furthermore, when a release of hazardous substance or oil injures natural resources subject to the natural resource damage assessment and restoration trusteeship of States, Tribes, or the Federal Government, appropriate restoration is determined by the scope and scale of the injury and the nexus of the restoration action to that specific injury.

Comment (5): Many commenters addressed the Policy's mitigation planning goal of improving (i.e., a net gain) or, at minimum, maintaining (i.e., no net loss) the current status of affected resources. A number of commenters supported the goal while a number of commenters opposed the inclusion of a net conservation gain. Of commenters opposed to net conservation gain, their specific reasons included:

(a) The Service lacks the statutory authority to implement the net conservation gain goal for mitigation planning.

(b) The net conservation gain goal imposes a new standard for mitigation and that mitigation requirements should be commensurate with the level of impacts.

(c) Concern about the costs associated with achieving net conservation gain.

(d) Questions about the ability to achieve net conservation gain and how it would be measured.

(e) The Policy does not provide the methodology to assess or measure the net conservation gain.

(f) Net conservation gain is incompatible with the standards of the ESA sections 7 and 10. One commenter asked that we clarify that the net conservation gain goal does not modify or expand proponents' obligations under ESA sections 7 or 10 permitting programs. One commenter stated that the Policy's goal would have limited relevance to section 10 decisions other than serving as an aspiration or goal for negotiating conservation measures. One commenter asked that we specify how the Policy's goal will be applied to processing incidental take permit applications under section 10(a)(2)(B)(ii), especially for projects predicted to directly kill listed species. This commenter added that neither no net loss nor net gain is an appropriate goal under section 10 if the goal implies that impacts at the individual level will not be minimized to the maximum extent practicable.

Response: We agree with concerns expressed by commenters that the Service generally lacks the statutory authority to implement “net conservation gain” for mitigation planning. No statute within the Service's purview mandates that the Service directly apply a net conservation gain standard. For example, under the Endangered Species Act (ESA), the standard for section 7 is that a “Federal agency shall, in consultation with and with the assistance of the Secretary, insure that any action . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat” (§ 7(a)(2)); under section 10, the requirement is “to the maximum extent practicable, minimize and mitigate the impacts of such taking” (§ 10(a)(2)(B)(ii)). As one court has noted, “[t]he words `maximum extent practicable' signify that the applicant may do something less than fully minimize and mitigate the impacts of the take where to do more would not be practicable. Moreover, the statutory language does not suggest that an applicant must ever do more than mitigate the effect of its take of species.” National Wildlife Federation v. Norton, 306 F. Supp. 2d 920, 928 (E.D. Cal. 2004); see also Union Neighbors United, Inc. v. Jewell, 831 F.3d 564 (D.C. Cir. 2016) (holding that the obligation to minimize and mitigate to the maximum extent practicable was satisfied by a plan that the Service found to fully offset the impact of the proposed taking). Since what is “practicable” may not fully offset proposed take, the “maximum extent practicable” standard is inconsistent with both a general net conservation gain and a no-net-loss mitigation objective. Nothing in the ESA requires that the Service apply a net conservation gain or no-net-loss standard.

Those commenters supporting the goal generally asserted, among other points, that the Service has the authority to require compensatory mitigation, found the measures to be clear, and thought the policy encouraged consistent implementation. While we appreciate these comments, for the reasons described above, we are not persuaded.

As “net conservation gain” was central to and integrated throughout the policies, in addition to the more recently issued 2017 Executive and Secretarial Orders, modifying these policies would likely have caused even more confusion. Thus, we are withdrawing the 2016 Mitigation Policy, and restoring the policies and guidance that were superseded by the 2016 policies.

Comment (6): Several commenters described their concerns with the implications of the Policy's inclusion of a landscape-scale approach:

(a) There is no statutory authority for taking a landscape-scale approach.

(b) Including a landscape-scale approach would lead to the Service seeking mitigation for impacts beyond a project under review, including impacts that happened in the past or in unrelated locations. They said that meeting the standards of an applicable authority within the narrow geographic scope of their project is the proponent's only responsibility.

(c) General concern that a landscape-scale approach would mean Federal overreach, including disregard for the plans, processes, and resource interests of States, tribes, and local governments.

Response: We agree with commenters that proponents' and action agencies' responsibilities include the provisions of relevant authorities and that those responsibilities do not extend to impacts unrelated to their action. Requiring mitigation to impacts unrelated to a proponent's action would likely conflict with the “essential nexus” required under Koontz for property development (see Comment 1 above). Accordingly, any effort to apply a landscape-scale approach to mitigation must ensure that there is an essential nexus between the proposed activity and the contemplated mitigation and that mitigation is not being imposed to correct for past impacts by other actors.

Section 5 of the Mitigation Policy, “Mitigation Framework,” calls for both consideration of a landscape-scale approach in addition to “net conservation gain.” Because net conservation gain is integral to the policies, even though considerations of landscape-scale approaches may be useful in some cases, withdrawing these policies will reduce confusion over the net conservation gain goal. This notice does not affect the Service authorities that already allow the flexibility to consider landscape-scale approach. In some cases, taking the broader ecological context of both impacts and mitigation opportunities into account by applying a landscape-scale approach is an effective means of implementing the Service's mission in a way that also benefits proponents.

We have analyzed the withdrawals of this policy in accordance with the criteria of the National Environmental Policy Act, as amended (NEPA) (42 U.S.C. 4332(c)), the Council on Environmental Quality's Regulations for Implementing the Procedural Provisions of NEPA (40 CFR parts 1500-1508), and the Department of the Interior's NEPA procedures (516 DM 2 and 8; 43 CFR part 46). Issuance of policies, directives, regulations, and guidelines that are of an administrative, financial, legal, technical, or procedural nature, or whose environmental effects are too broad, speculative, or conjectural to lend themselves to meaningful analysis and will later be subject to the NEPA process, either collectively or case-by-case may be categorically excluded under NEPA (43 CFR 46.210(i)). We have determined that a categorical exclusion applies to withdrawing this policy.

This policy withdrawal does not contain any new collections of information that require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). OMB has reviewed and approved the information collection requirements for applications for incidental take permits, annual reports, and notifications of incidental take for native endangered and threatened species for safe harbor agreements, candidate conservation agreements with assurances, and habitat conservation plans under OMB Control Number 1018-0094, which expires on March 31, 2019. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175 “Consultation and Coordination with Indian Tribal Governments,” and the Department of the Interior Manual at 512 DM 2, we have considered possible effects on federally recognized Indian tribes and have determined that there are no potential adverse effects of withdrawing this policy. Our intent with withdrawing these policies is to reduce confusion of mitigation programs, projects, and measures, including those taken on Tribal lands. We will work with Tribes as applicants proposing mitigation as part of proposed actions and with Tribes as mitigation sponsors.

The multiple authorities for this action include the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.); Fish and Wildlife Coordination Act, as amended, (16 U.S.C. 661-667(e)); and National Environmental Policy Act (42 U.S.C. 4371 et seq.).