Federal Register Vol. 83, No.236,

FCIC amends the Common Crop Insurance Regulations (7 CFR part 457) by revising 7 CFR 457.151 Forage Seeding Crop Insurance Provisions (“Crop Provisions”), to be effective for the 2020 and succeeding crop years. The intended effect of this action is to update existing policy provisions and definitions to better reflect current agricultural practices and allow for variations in insurance provisions based on regional agronomic conditions and potential future expansions.

The changes are as follows:

1. FCIC is removing the paragraph immediately preceding section 1, which refers to the order of priority if a conflict exists among the policy provisions. This same provision is contained in the Common Crop Insurance Policy, Basic Provisions (“Basic Provisions”). Therefore, the appearance here is duplicative and should be removed from the Crop Provisions.

2. Section 1—FCIC is adding the definition of “adequate stand.” The new definition will allow RMA to revise loss adjustment procedures to rely upon the number of live alfalfa stems rather than the number of live plants (normal stand) for making loss determinations for forage containing more than 60 percent alfalfa. Plants can have more than one stem. Extension research across major forage growing areas has demonstrated that the number of live alfalfa stems is more closely correlated with future yield than the number of live plants when alfalfa is the dominant component of the forage mixture. Loss determinations for forage types that contain less than 60 percent alfalfa or no alfalfa at all, such as red clover, will have no change to existing loss adjustment procedures and, as stated below, will be based upon the normal planting density because there is no demonstrable correlation between future yield and the number of live alfalfa stems when the forage type does not contain at least 60 percent alfalfa.

FCIC is adding the definition of “amount of insurance.” The term “amount of insurance” refers to the dollar amount of insurance per acre obtained by multiplying the reference maximum dollar amount shown in the actuarial documents by the coverage level percentage elected by the insured. FCIC adds this definition to provide clarity because the term is used multiple times in the Crop Provisions but is not defined.

FCIC is removing the definition of “nurse crop (companion crop)” and adding the definition of “companion crop”. FCIC also replaces the definition “nurse crop (companion crop)” with the term “companion crop” throughout the Crop Provisions. FCIC replaces this definition to reduce ambiguity and increase clarity by using one term instead of referring to “nurse crop” and “companion crop” interchangeably.

FCIC is revising the definition of “fall planted” by adding the phrase “except when specified in the Special Provisions,” following the phrase “A forage crop seeded after June 30” to allow FCIC to provide area-specific dates that have distinctions outside of this range. For example, Maine is currently recognized as having a single growing season with planting dates that begin before June 30 but extend beyond June 30, which is inconsistent with existing definitions for “spring planted” and “fall planted.” This change also allows FCIC to be responsive to new or evolving regional conditions as needed in the future.

FCIC is revising the definition of “good farming practices.” The revised definition adds the phrase “in lieu of the definition in the Basic Provisions” to clarify that the “good farming practices” definition in the Crop Provisions will replace the definition contained in the Basic Provisions. The definition in the Basic Provisions is not appropriate for forage seeding because it includes references to the insured's approved yield, but these Crop Provisions provide coverage for a failed forage seeding, not for yield losses below an insured's approved yield. The revised definition also replaces the phrase “normal stand” with “adequate stand,” because the adequate stand will be used to determine if the forage seeding was successful. The revised definition also replaces the phrase “and are those recognized by the Cooperative State Research, Education, and Extension Service as compatible with agronomic and weather conditions in the county” with “which are those generally recognized by agricultural experts or organic agricultural experts, as compatible with agronomic and weather conditions for the area” to be more consistent with the definition of “good farming practices” contained in the Basic Provisions because, even though the definition in the Basic Provisions is no longer applicable, some of the same principles apply. These changes are intended to ensure that the definition is consistent with the practices applicable to forage seeding crops.

FCIC is revising the definition of “harvest” to remove the word “only” before “grazed” to clarify that the acreage does not have to be exclusively grazed to not be considered harvested. If the acreage is grazed at any time regardless of whether the crop is removed from the field, it is not considered harvested.

FCIC is removing the definition of “normal stand” and replacing it with the definition of “normal planting density.” The new definition of “normal planting density” simplifies the previous definition of “normal stand” by replacing the phrase “a population of live plants per square foot that meets the minimum required number of plants” with the more concise phrase “the minimum number of live plants per square foot.” The normal planting density will be used to determine if the stand qualifies for replanting payments. The normal planting density will result in more accurate replanting payments than basing replant determinations on an adequate stand because not all stems may have emerged when replanting determinations are made.

FCIC is revising the definition of “planted acreage” by removing the reference to “provisions in section 1” and replacing it with the more specific phrase “definition in”. This is not a substantive change but it makes it consistent with other definitions that refer to the definitions in the Basic Provisions.

FCIC is revising the definition of “replanting” by removing the duplicative language that is already contained in the Basic Provisions. FCIC is revising the remaining sentence of the current definition by adding the phrase “in addition to the definition in the Basic Provisions” to clarify that the “replanting” definition in the Crop Provisions will add to the definition contained in the Basic Provisions, replacing the phrase “replacing” with the word “placing” as it is a more accurate term for seeding an existing stand, and replacing the phrase “which results in” with the word “using” to convey that using a reduced seeding rate to replace seed into an existing damaged stand will not be considered replanting.

FCIC is revising the definition of “sales closing date.” The revised definition replaces the term “fall seeded” with “fall planted.” The terms “fall seeded” and “fall planted” had been used interchangeably. This change will add clarity and reduce confusion because “fall planted” is defined within the policy, but “fall seeded” is not.

FCIC proposes to revise the definition of “spring planted.” The revised definition adds the phrase “except when specified in the Special Provisions,” following the phrase “A forage crop seeded before July 1,” to allow FCIC to provide area specific dates that have distinctions outside of this range. For example, Maine is currently recognized as having a single growing season with planting dates that begin before June 30 but extend beyond June 30, which is inconsistent with existing definitions for “spring planted” and “fall planted”. This change also allows FCIC to be responsive to new or evolving regional conditions as needed in the future. FCIC proposes this change to reduce ambiguity and increase clarity because the definition of “crop year” references the calendar year of the planted acreage.

3. Section 5—FCIC is replacing the cancellation and termination date table with a new date table. The new dates allow for expansion of the fall-planted practice and align forage seeding cancellation and termination dates with the dates for other fall-planted crops in each state. Maine's cancellation and termination dates will remain unchanged at March 15th to allow time after premium billing for a termination decision to be made. In all other states, the cancellation date will be July 31st and termination date will be September 30th to allow time after premium billing for a termination decision to be made.

4. Section 6—FCIC is replacing the term “acreage report date” with the term “acreage reporting date.” FCIC is making this change because the term “acreage reporting date” is defined in the Basic Provisions and also appears in the Special Provisions.

5. Section 7—FCIC is replacing “a normal stand” with “an adequate stand” and “nurse crops” with “companion crops” to incorporate the references to the new terms stated above.

6. Section 8—FCIC is revising section 8(a) to simplify this section by removing references to states and counties and applying the same replanting requirements to all insurable areas. FCIC is removing section 8(b) which requires some California counties to replant if damage occurred anytime within the crop year, compared to all other areas, where replanting is only required for damage that occurred before the final planting date. This change was done concurrently with revisions to section 11, which outlines when replanting payments are allowed based on region and spring or fall planting. FCIC is also replacing the phrase “a normal stand” with “the normal planting density,” consistent with the changes above regarding the definition change.

7. Section 9—FCIC is revising section 9(c) to make it be grammatically correct.

FCIC also is removing all state and county specific end of insurance dates and instead referring to the end of insurance period date shown in the actuarial documents. This change will simplify the provision and allow FCIC to provide area specific dates, allow for future program expansion, and allow FCIC to continue to be responsive to new or evolving regional conditions as needed in the future.

8. Section 10—FCIC is replacing the phrase “a stand of forage that occur” with the phrase “an adequate stand that occurs.” This change reduces ambiguity and clarifies the provisions because “adequate stand” is a defined term but “stand of forage” is not, which could lead to different results when determining losses.

9. Section 11—In section 11(a), FCIC is moving the phrase “unless specified otherwise in the Special Provisions,” from subparagraph (a)(1) (addressing California only) to the main paragraph (addressing all areas) to allow FCIC greater flexibility in determining regional specific distinctions for replanting payments and to protect program integrity and insured interests by allowing FCIC, with assistance from forage subject matter experts and regional offices, to address regional specific production practices.

FCIC is moving the phrase “It is practical to replant;” from subparagraph (a)(2)(iii) (addressing Lassen, Modoc, Mono, Shasta, Siskiyou Counties, California and all other states) to the subparagraph 11(a)(1) (addressing all areas). FCIC is moving this phrase to consistently apply the requirement that it be practical to replant in order to receive a replanting payment across all counties and states.

In section 11(a)(2), FCIC is moving the phrase “We give written consent to replant;” from subparagraph (a)(2)(iv) (addressing Lassen, Modoc, Mono, Shasta, Siskiyou Counties, California and all other states) to the subparagraph 11(a)(2) (addressing all areas). FCIC is moving this phrase to require written consent by approved insurance providers as a requirement of replanting payments across all counties and states. FCIC is renumbering subsequent paragraphs.

In the newly designated section 11(a)(3) FCIC is replacing the phrase “within the insurance period” with the phrase “before the spring final planting date in the actuarial documents.” FCIC is replacing this phrase so that allowable replanting payments correlate with replanting requirements. Specifically, this change corresponds with the removal of section 8(b), which removed the replanting requirement in California counties for damage occurring after the spring final planting date. Therefore, the spring final planting date is a more appropriate timeframe for defining when replanting payments are available. FCIC is replacing “a normal stand” with “the normal planting density” consistent with the changes made above.

FCIC is revising the newly designated section 11(a)(4) to remove the list of specific California counties. This list is not needed because the Special Provisions will include any county differences in replanting payment provisions.

FCIC is removing section 11(a)(4)(i), renumbering subsequent paragraphs, and adding the phrase “spring or ” before “fall planted” in the newly designated section 11(a)(4)(i) to extend replanting payment eligibility to include both fall and spring planted practices, as opposed to the current provisions that allowed replanting only for a failed fall seeding in counties that designated both fall and spring final planting dates. FCIC is adding this language in order to allow replanting payments for producers engaged in the spring planted practice. A producer that plants a forage crop in the spring suffers the same financial consequences as a producer of a fall planted crop, if that crop fails to emerge or suffers damage and needs to be replanted. Therefore, FCIC is expanding coverage to allow replanting payments for spring planted forage as well as fall planted forage. Additionally, as the plan requires replanting to maintain the insurance, this will provide some compensation to cover replanting costs. Additionally, FCIC is replacing the phrase “a normal stand” with the phrase “the normal planting density,” consistent with definition change.

In the newly designated section 11(a)(2)(ii), FCIC is revising the paragraph to clarify the provision only pertains to the fall planted practice, because a separate provision is added below to address the spring planted practice. FCIC is also adding the word “final” before “planting date” to eliminate ambiguity between spring planting dates. FCIC is also correcting the grammar.

FCIC is revising the newly designated section 11(a)(2)(iii) to state “If spring planted, the original planting took place after the earliest planting date shown in the Special Provisions, and the acreage is replanted by the spring final planting date shown in the Special Provisions.” FCIC is adding this language in order to allow replanting payments for producers engaged in the spring planted practice. A producer that plants a forage crop in the spring suffers the same financial consequences as a producer of a fall planted crop, if that crop fails to emerge or suffers damage and needs to be replanted. Therefore, FCIC is expanding coverage to allow replanting payments for spring planted forage as well as fall planted forage. Additionally, as the plan requires replanting to maintain the insurance, this will provide some compensation to cover replanting costs.

In section 11(b), FCIC is adding “(a)” directly after “section 13” to more specifically reference section 13(a). This addition clarifies which specific part of section 13 this provision is referencing.

10. Section 12—In section 12(b), FCIC removes the phrase, “(Duties in the Event of Damage or Loss)” as the parenthetical section name is unnecessary and removing these titles will prevent FCIC from having to revise the Crop Provisions should these section titles change in the Basic Provisions.

In section 12(b), FCIC is also adding the adjective “damaged” before “fall planted acreage” and removing the phrase “that is damaged” after the phrase “fall planted acreage” to simplify the language and clarify the provisions.

11. Section 13—FCIC is removing the sub-section designation of “(a)” as it is not needed in the introductory paragraph. FCIC is also adding paragraph designation “(a)” and the statement “Each type and practice:” directly following the introductory paragraph in order to clarify and simplify the section, because the steps for settling a claim should be followed first for each type and practice and then summed to any applicable unit.

FCIC is revising section 13(a)(1) to change the phrase “Multiplying the insured acreage of each type and practice by the amount of insurance for the applicable type and practice;” to “Determining the value of all insured acreage by multiplying the number of insured acres by the dollar amount of insurance;”. This change is intended to clarify that this is the outcome of the calculation in this step and to remove reference to type and practices because type and practice instructions are already stated in 13(a).

FCIC is removing 13(a)(2), because the step for totaling results by type and practice from 13(a) is moved to the newly designated 13(b).

FCIC is revising section 13(a)(3) to change the phrase “multiplying the total acres with an established stand for the insured acreage of each type and practice in the unit by the amount of insurance for the applicable type and practice;” to “determining the value of the acreage with no insurable losses, by multiplying the dollar amount of insurance by the insured acreage that: [.]” This change is intended to simplify the policy language by removing the term “established stand,” which was referenced within the settlement steps of section 13(b); clarifying the outcome of the calculation in this step by adding the phrase “value of the acreage with no insurable losses”; and removing the phrase “for each type and practice” because this instruction is already stated in 13(a). In addition, FCIC designates 13(a)(3) as 13(a)(2).

FCIC is moving the settlement steps in section 13(b), previously referred to as an “established stand” to section 13(a)(2)(i)-(iv). In moving these settlement steps, FCIC is also revising the sub-sections 13(a)(2)(i)-(iv) to each start with a verb to provide more cohesive language and reduce redundancy between the leading text and sub-paragraphs.

FCIC is adding a new section 13(a)(3) to state, “Determining the value of the acreage with partial insurable losses, by multiplying the dollar amount of insurance by the number of insured acres that have a stand less than 75 percent but more than 55 percent of an adequate stand, by 50 percent (0.5);”. This step was previously captured in section 13(c), which stated, “The amount of indemnity on any spring planted acreage determined in accordance with section 13(a) will be reduced 50 percent if the stand is less than 75 percent but more than 55 percent of a normal stand.” FCIC is moving this step to section 13(a)(3) so that all steps for settling a claim throughout section 13 are presented in sequential order. FCIC is updating the language of this step to clarify that the outcome of the calculation in this step is determining the value of acreage with partial insurable losses by adding the phrase “determining the value of the acreage with partial insurable losses”. FCIC is also removing reference to spring planted acreage because the steps for settling a claim are first done by any applicable unit, which is already defined to allow basic units by spring planted and fall planted acreage. FCIC is replacing the term “a normal stand” with the term “an adequate stand,” consistent with the new definition. FCIC is removing section 13(c) because it is incorporated into section 13(a)(3), and it is no longer needed.

FCIC is revising section 13(a)(4), to state “Adding the results in section 13(a)(2) and section 13(a)(3);”. This revision calculates the total value of the acreage with no insurable loss by adding together the value of acreage with no insurable loss plus the value of acreage with partial insurable loss. FCIC removes the previous language because the step for totaling results by type and practice from 13(a) is moved to the newly designated 13(b).

FCIC is updating section 13(a)(5) reference of section 13(a)(2) to section 13(a)(1) and change the words “result” to “results”. This step will function as subtracting the total value of the acreage with no insurable loss from the total value of all insured acreage to determine the total value of acreage with insurable losses. This calculation will be for each type and practice. FCIC is also removing the word “and” at the end of the section as it is not needed for this step.

FCIC is revising 13(a)(6) to update the section reference from section 13(a)(5) to 13(a)(3). FCIC is also adding the word “and” at the end of the section 13(a)(6) to provide a cohesive transition to the final step for settlement of a claim in 13(b).

FCIC is adding section 13(b) to state “totaling the results in section 13(a).” Totaling results for each type and practice to any applicable unit was previously included twice in the steps for settling a claim. With this revision, totaling results for each type and practice is only performed once.

FCIC is revising the indemnity calculation example to portray the revised steps for settlement of a claim in section 13. The revised example demonstrates the difference in calculations when a portion of the acreage has a stand between 55 and 75 percent of an adequate stand versus a stand with less than 55 percent of an adequate stand. Additional revisions to the indemnity calculation example include replacing each instance of “remaining stand of 75 percent or greater” with “remaining stand of 75 percent of an adequate stand or greater” and to replace “75% stand or greater” with “75% of an adequate stand or greater” to reduce ambiguity and clarify that loss determinations are to be determined relative to adequate stand. In the indemnity calculation, FCIC also is replacing “$100.00” with “$100” and “$90.00” with “90.” This change simplifies the example calculations.

The FCIC is issuing this final rule without opportunity for prior notice and comment. The Administrative Procedure Act (APA) exempts rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts” from the statutory requirement for prior notice and opportunity for public comment (5 U.S.C. 553(a)(2)). A Federal crop insurance policy is a contract and is thus exempt from APA notice-and-comment procedures. Previously, changes made to the Federal crop insurance policies codified in the Code of Federal Regulations were required to be implemented through the notice-and-comment rulemaking process. Such action was not required by the APA, which exempts contracts. Rather, the requirement originated with a notice USDA published in the Federal Register on July 24, 1971 (36 FR 13804), stating that the Department of Agriculture would, to the maximum extent practicable, use the notice-and-comment rulemaking process when making program changes, including those involving contracts. FCIC complied with this notice over the subsequent years. On October 28, 2013, USDA published a notice in the Federal Register (78 FR 64194) rescinding the prior notice, thereby making contracts again exempt from the notice-and-comment rulemaking process. This exemption applies to the 30-day notice prior to implementation of a rule. Therefore, the policy changes made by this final rule are effective April 30, 2019 in the Federal Register.

However, FCIC is providing a 30-day comment period and invites interested persons to participate in this rulemaking by submitting written comments. To assist in analyzing the comments, FCIC requests that commenters include the number and heading corresponding to their comment, along with any applicable supporting data or references. FCIC will consider the comments received and may conduct additional rulemaking based on the comments.

The changes will be effective for the 2020 and succeeding crop years.

Executive Order 12866, “Regulatory Planning and Review,” and Executive Order 13563, “Improving Regulation and Regulatory Review,” direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasized the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” established a federal policy to alleviate unnecessary regulatory burdens on the American people. The Office of Management and Budget (OMB) designated this rule as not significant under Executive Order 12866, “Regulatory Planning and Review,” and therefore, OMB has not reviewed this rule. The rule is not subject to Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs.”

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35, subchapter I), the collections of information in this rule have been approved by OMB under control number 0563-0053.

FCIC is committed to complying with the E-Government Act of 2002, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or 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 rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that 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 Federal Crop Insurance Corporation has assessed the impact of this rule on Indian tribes and determined that this rule does not, to our knowledge, have tribal implications that require tribal consultation under E.O. 13175. If a Tribe requests consultation, the Federal Crop Insurance Corporation will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the indemnity amount for an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. To ensure crop insurance is available to small entities, the Federal Crop Insurance Act (FCIA) authorizes FCIC to waive collection of administrative fees from limited resource farmers. FCIC believes this waiver helps to ensure that small entities are given the same opportunities as large entities to manage their risks through the use of crop insurance. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have a significant impact on a substantial number of small entities, and, therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. See 2 CFR part 415, subpart C.

This rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any direct action taken by FCIC or action by FCIC directing the insurance provider to take specific action under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action against FCIC for judicial review may be brought.

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation amends 7 CFR part 457 effective for the 2020 and succeeding crop years as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus SAS Model A350-941 airplanes. The NPRM published in the Federal Register on September 4, 2018 (83 FR 44844). The NPRM was prompted by reports that, for multimaterial (hybrid) joints of the passenger door frame fittings, the interfay sealant was not applied between all surfaces of the joint parts. The NPRM proposed to require modification of the hybrid joints of the passenger doors by applying additional corrosion protection to the hybrid joints of the passenger door frame fittings.

We are issuing this AD to address water ingress in the hybrid joints and subsequent galvanic corrosion of the aluminum holes. This condition, if not corrected, could lead to failure of the door, resulting in reduced evacuation capacity from the airplane during an emergency and consequent injury to occupants.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0108, dated May 15, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus SAS Model A350-941 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0761.

We gave the public the opportunity to participate in developing this final rule. The following presents the comments received on the NPRM and the FAA's response to each comment.

The Air Line Pilots Association, International (ALPA), Delta Air Lines (DAL), and JM, a private citizen, indicated their support for the NPRM.

DAL requested the addition of a paragraph in the final rule that would allow operators to use certain Airbus Model A350 Airplane Maintenance Manual (AMM) tasks, identified in the comment, to accomplish the actions that would be required by the final rule. The commenter noted that the Airbus Model A350 AMM includes tasks related to maintenance of the passenger door frame fittings, including installation of the fittings with sealant applied between the fitting and the door, similar to what is described in the Accomplishment Instructions of Airbus Service Bulletin A350-52-P012, dated September 7, 2017.

The commenter also pointed out that the Airbus Model A350 AMM tasks do not include application of a top coat spray or corrosion prevention compound after installation of passenger door frame fittings, or include application of top coat sealant and application of primer over the fasteners, which are included in the Accomplishment Instructions of Airbus Service Bulletin A350-52-P012, dated September 7, 2017. The commenter observed that replacement of passenger door frame fittings in-service is customary, and that if an operator uses the Airbus Model A350 AMM tasks in-service to rework the passenger door frame fittings, the operator could be out of compliance with the requirements of the final rule because of the differences in the procedures between the Airbus Model A350 AMM tasks and the Accomplishment Instructions of Airbus Service Bulletin A350-52-P012, dated September 7, 2017.

The commenter also indicated that some operators may perceive using the fay surface sealant as described in the Airbus Model A350 AMM tasks to be a more robust solution than the spray-on corrosion inhibitor compounds or top coating of fasteners described in the Accomplishment Instructions of Airbus Service Bulletin A350-52-P012, dated September 7, 2017. The commenter observed that some operators may prefer to remove the passenger door frame fittings, apply the fay surface sealant, and re-install the passenger door frame fittings.

The commenter clarified that the language in the suggested paragraph would not mandate the use of the Airbus Model A350 AMM tasks, but would state that operators would have to apply for an alternative method of compliance (AMOC) in order to use the Airbus Model A350 AMM tasks instead of the procedures in the Accomplishment Instructions of Airbus Service Bulletin A350-52-P012, dated September 7, 2017.

We disagree with the commenter's request. The Airbus Model A350 AMM task numbers provided by the commenter do not match the Airbus Model A350 AMM task numbers specified in Airbus Service Bulletin A350-52-P012, dated September 7, 2017. Also, the commenter did not provide sufficient documentation to show that, in regard to the unsafe condition identified in this AD, the Airbus Model A350 AMM tasks provide an equivalent level of safety as the procedures described in Airbus Service Bulletin A350-52-P012, dated September 7, 2017. Under the provisions of paragraph (h)(1) of this AD, operators may apply for an AMOC to use other Airbus Model A350 AMM tasks instead of the procedures in the Accomplishment Instructions of Airbus Service Bulletin A350-52-P012, dated September 7, 2017. We have not changed this AD in regard to this issue.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

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

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

Airbus SAS has issued Service Bulletin A350-52-P012, dated September 7, 2017. This service information describes procedures for modification of the hybrid joints of the left-hand and right-hand sides of the passenger door frame fittings at doors 1, 2, 3 and 4, by applying additional corrosion protection. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 1 airplane of U.S. registry. We estimate the following costs to comply with this AD:

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

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

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

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 transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Fokker Services B.V. Model F28 Mark 0070 and 0100 airplanes. The NPRM published in the Federal Register on September 7, 2018 (83 FR 45362). The NPRM was prompted by reports that debris from the PBSOV could create a partial blockage of the restrictor check valve in the hydraulic return line of the PBSOV. The NPRM proposed to require replacing the restrictor check valve with an improved valve that has a filter screen.

We are issuing this AD to address debris from the PBSOV that could create a partial blockage of the restrictor check valve in the hydraulic return line of the PBSOV, which, if not corrected, may prevent complete main landing gear extension, possibly resulting in damage to the airplane during landing, and consequent injury to occupants.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2018-0077 dated April 6, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for Fokker Services B.V. Model F28 Mark 0070 and 0100 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0767.

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

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

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

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

Fokker Services B.V. has issued Service Bulletin SBF100-32-163, Revision 1, dated February 21, 2018. This service information describes procedures for removing the restrictor check valve in the hydraulic return line of the PBSOV and installing an improved restrictor check valve that has a filter screen. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 4 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

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 transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

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

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

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

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2018-11-07, Amendment 39-19295 (83 FR 24399, May 29, 2018) (“AD 2018-11-07”). AD 2018-11-07 applied to all Saab AB, Saab Aeronautics Model SAAB 2000 airplanes. The NPRM published in the Federal Register on September 19, 2018 (83 FR 47321). The NPRM was prompted by a determination that further rulemaking is necessary to include the requirement to replace all affected support brackets. The NPRM proposed to continue to require one-time inspection of the affected lug attaching the aileron bellcrank support bracket to the rear spar of the wing and the adjacent area of the installed aileron bellcrank support brackets, a thickness measurement of the affected lug attaching the support bracket to the rear spar of the wing, repetitive inspections of the affected aileron bellcrank support brackets, and corrective actions if necessary. The NPRM also proposed to require the replacement of all affected support brackets. We are issuing this AD to address the defect of the aileron bellcrank support bracket, which, in the event of an aileron jam, could lead to failure of the support bracket and result in reduced controllability of the airplane.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2018-0103, dated April 30, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Saab AB, Saab Aeronautics Model SAAB 2000 airplanes. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0797.

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

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

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

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

Saab AB, Saab Aeronautics has issued Saab Service Bulletin 2000-27-056, dated April 18, 2018. This service information was incorporated by reference in AD 2018-11-07 on June 13, 2018 (83 FR 24399, May 29, 2018). This service information describes procedures for a detailed visual inspection for cracks, corrosion, and damage (including missing paint) of the affected lug and the adjacent area of the installed aileron bellcrank support brackets on the left-hand and right-hand wings; a thickness measurement of the affected lug attaching the support bracket to the rear spar of the wing; and replacement of aileron bellcrank support brackets. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 8 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

We have received no definitive data for the on-condition costs specified in this AD.

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 transport category airplanes and associated appliances to the Director of the System Oversight 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 that 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.

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain C Series Aircraft Limited Partnership (CSALP) Model BD-500-1A10 and BD-500-1A11 airplanes. The NPRM published in the Federal Register on September 19, 2018 (83 FR 47315). The NPRM was prompted by reports of dislodged cargo compartment blowout panels. The NPRM proposed to require repetitive inspections for any dislodged blow-out panel in the forward and aft cargo compartments, reporting of the inspection findings, and reinstallation if necessary.

We are issuing this AD to address dislodged cargo compartment blow-out panels, which could result in openings in the forward and aft cargo compartments. In the event of a cargo compartment fire, these unintended openings in the forward and aft cargo compartments would provide a path for smoke, fire, and Halon to enter the adjacent equipment bays, flight deck, and passenger cabin, which could delay smoke detection in the forward and aft cargo compartments and result in the forward and aft cargo compartments not being able to maintain the Halon concentration required for fire suppression. The cargo compartment fire may become uncontrollable if this condition is not addressed, which could result in the loss of controllability of the airplane.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian AD CF-2018-15, dated June 6, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain C Series Aircraft Limited Partnership (CSALP) Model BD-500-1A10 and BD-500-1A11 airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA 2018 0799.

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

The type certificate holder for Model BD-500-1A10 and BD-500-1A11 airplanes has changed from “Bombardier, Inc.,” to “C Series Aircraft Limited Partnership (CSALP).” We have revised this AD accordingly.

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule with the change described previously and minor editorial changes. We have determined that these minor changes:

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

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

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this final rule.

Bombardier has issued C Series Data Module BD500-A-J50-10-01-01AAA-310B-A, “Forward and aft cargo compartment blow-out panels—Visual check,” Issue 002, dated May 16, 2018. This service information describes procedures for an inspection for any dislodged blow-out panel in the forward and aft cargo compartments.

Bombardier has issued C Series Data Module BD500-A-J50-10-01-00AAA-521A-A, “Decompression panels dislodging—Return to basic configuration,” Issue 002, dated May 16, 2018. This service information describes procedures for re-installation of dislodged forward and aft cargo compartment blow-out panels.

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

We estimate that this affects 21 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary on-condition action that would be required based on the results of any required actions. We have no way of determining the number of aircraft that might need this on-condition action:

We estimate that it would take about 1 work-hour per product to comply with the on-condition reporting requirement in this AD. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of reporting the inspection results on U.S. operators to be $85 per product.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW, Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

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 transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

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

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

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

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

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus SAS Model A330-223F and Model A330-243F airplanes. The NPRM published in the Federal Register on September 21, 2018 (83 FR 47850). The NPRM was prompted by a report of cracking at fastener holes located at a certain frame on the lower shell panel junction. The NPRM proposed to require repetitive special detailed inspections (rototest) of certain fastener holes located at the lower shell junction of a certain frame on both LH and RH sides, and applicable related investigative and corrective actions.

We are issuing this AD to address cracking at FR40 on the lower shell panel junction; such cracking could lead to reduced structural integrity of the fuselage.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2018-0146, dated July 12, 2018 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus SAS Model A330-223F and Model A330- 243F airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0800.

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

We reviewed the relevant data and determined that air safety and the public interest require adopting this final rule as proposed, except for minor editorial changes. We have determined that these minor changes:

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

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

Airbus has issued Service Bulletin A330-53-3215, Revision 03, dated January 22, 2018. This service information describes procedures for repetitive rototest inspections of certain fastener holes, and related investigative and corrective actions if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

We estimate that this AD affects 5 airplanes of U.S. registry. We estimate the following costs to comply with this AD:

We estimate the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. We have no way of determining the number of aircraft that might need these on-condition actions:

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

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 transport category airplanes and associated appliances to the Director of the System Oversight Division.

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

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

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

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

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

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

Accordingly, under the authority delegated to me by the Administrator, the FAA 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 D airspace at Coleman A. Young Memorial Airport, Detroit, MI.

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 47580; September 20, 2018) for Docket No. FAA-2018-0685 to amend Class D airspace at Coleman A. Young Memorial Airport, Detroit, MI. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Subsequent to publication, the FAA discovered that the longitudinal geographic coordinate for the airport was published incorrectly. That error is corrected in this final rule.

Class D airspace designations are published in paragraph 5000 of FAA Order 7400.11C, dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR 71.1. The Class D airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C 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 modifies the Class D airspace by updating for the location in the header of the airspace legal description to Detroit, MI (previously Detroit City Airport, MI), at Coleman A. Young Municipal Airport (formerly Detroit City Airport), Detroit, MI, to comply with FAA Order 7400.2L, Procedures for Handling Airspace Matters. The name and geographic coordinates of the airport are also updated to coincide with the FAA's aeronautical database.

The longitudinal geographic coordinate for the airport is corrected to “83°00′37″ W” Except for this change, this rule is the same as published in the NPRM.

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, is non-controversial and unlikely to result in adverse or negative comments. 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 5-6.5.a. 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 at Oakland County International Airport, Pontiac, MI, to support IFR operations at this airport.

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 47578; September 20, 2018) for Docket No. FAA-2018-0698 to amend Class D airspace at Oakland County International Airport, Pontiac, MI. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Subsequent to publication, the FAA discovered that the extension from the Oakland County Intl: RWY 09R-LOC was contained within the radius of the airport and is thus not required in the airspace legal description. That extension and the Oakland County Intl: RWY 09R-LOC are removed from the airspace legal description in this rule.

Class D airspace designations are published in paragraph 5000 of FAA Order 7400.11C, dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR 71.1. The Class D airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C 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 modifies the Class D airspace at Oakland County International Airport, Pontiac, MI, by adding an extension 1 mile each side of the 274° bearing from the airport extending from the 4.2-mile radius to 4.4 miles west of the airport.

This action also makes an editorial change to the airspace legal description replacing “Airport/Facility Directory” with “Chart Supplement”.

The extension from the Oakland County Intl: RWY 09R-LOC and the Oakland County Intl: RWY 09R-LOC are removed from the airspace legal description. Except for this change, this rule is the same as published in the NPRM.

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, is non-controversial and unlikely to result in adverse or negative comments. 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 5-6.5.a. 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:

Authority for This Rulemaking

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 at Louisville International Airport, Louisville, KY, to support IFR operations at the airport.

The FAA published a final rule in the Federal Register (83 FR 45820, September 11, 2018) for Doc. No. FAA-2018-0825, amending Class D airspace and Class E surface airspace at Bowman Field Airport, Louisville, KY, that contained a clerical error in the airspace legal description. ‘E-104' was incorrectly placed after the geographic coordinates of Louisville International Airport, KY under the Class E surface airspace.

Class E airspace designation are published in paragraph 6002, of FAA Order 7400.11C dated August 13, 2018, and effective September 15, 2018, 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 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C 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 correcting a clerical error in the regulatory text of Class E airspace extending upward from the surface at Louisville International Airport, Louisville, KY. The text is corrected to read, ‘(Lat. 38°10′27″ N, long. 85°44′11″ W).'

Section 553(b)(3)(B) of the Administrative Procedures Act (5 U.S.C.) authorizes agencies to dispense with notice and comment procedure when the agency for “good cause” finds that these procedures are “impracticable, or contrary to the public interest.” Accordingly, action is taken herein to remove ‘E-104' from the geographic coordinates for Louisville International Airport. Therefore, in the interest of flight safety, I find that notice and public procedure under 5 U.S.C. 553(b) are impracticable and contrary to the public interest. Section 553(d) of the Administrative Procedures Act (5 U.S.C.) authorizes agencies to determine an effective date of less than 30 days after publication for good cause found and published with the rule. In consideration of the need to correct the airspace description for Louisville International Airport and to avoid confusion on the part of pilots flying in the vicinity of airport, the FAA finds good cause for making this amendment effective in less than 30 days in order to promote the safe and efficient handling of air traffic in the area.

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:

Authority for This Rulemaking

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 modifies Class D airspace and Class E airspace designated as a surface area, and removes Class E airspace designated as an extension to a Class D and Class E airspace at Drake Field, Fayetteville, AR, to support IFR operations at this airport.

The FAA published a notice of proposed rulemaking (NPRM) in the Federal Register (83 FR 47585; September 20, 2018) for Docket No. FAA-2018-0699 to amend Class D airspace and Class E airspace designated as a surface area, and remove Class E airspace designated as an extension to a Class D and Class E airspace at Drake Field, Fayetteville, AR. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

Subsequent to publication, the FAA found a typographic error in the airspace legal description for the Class D airspace and Class E airspace designated as a surface area in the extension from the Drake Field: RWY 34-LOC. “Sided” should have been “side”. This typographical error is corrected in this rule.

Class D and E airspace designations are published in paragraphs 5000, 6002, and 6004, respectively, of FAA Order 7400.11C, dated August 13, 2018, and effective September 15, 2018, 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.

This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This rule amends Title 14 Code of Federal Regulations (14 CFR) part 71 by: Amending the Class D airspace at Drake Field, Fayetteville, AR, to within a 4-mile radius (decreased from a 4.1-mile radius); and adding an extension 1.1 miles each side of the 181° bearing from the airport from the 4-mile radius to 5.9 miles north of the airport, and adding an extension 1 mile each side of the 172° bearing from the Drake Field: RWY 34-LOC from the 4-mile radius to 4.9 miles south of the Drake Field: RWY 34-LOC; and adding an extension 1 mile each side of the 347° bearing from the airport from the 4-mile radius to 4.9 miles north the airport. The city associated with the airport is removed from the airspace legal description to comply with a change to FAA Order 7400.2L, Procedures for Handling Airspace Matters, and the outdated term “Airport/Facility Directory” is updated to “Chart Supplement.” Additionally, the geographic coordinates of the airport are updated to coincide with the FAA's aeronautical database.

Amending the Class E airspace designated as a surface area at Drake Field to within a 4-mile radius (decreased from a 4.1-mile radius); and extending the airspace up to and including 3,800 feet MSL; and adding an extension 1.1 miles each side of the 181° bearing from the airport from the 4-mile radius to 5.9 miles south of the airport, and adding an extension 1 mile each side of the 172° bearing from the Drake Field: RWY 34-LOC from the 4-mile radius to 4.9 miles south of the Drake Field: RWY 34-LOC; and adding an extension 1 mile each side of the 347° bearing from the airport from the 4-mile radius to 4.9 miles north of the airport. The city associated with the airport is removed from the airspace legal description to comply with a change to FAA Order 7400.2L, and the outdated term “Airport/Facility Directory” is updated to “Chart Supplement.” Additionally, the geographic coordinates of the airport are updated to coincide with the FAA's aeronautical database.

And removing the Class E airspace designated as an extension to Class D and Class E at Drake Field as it is no longer required.

The typographical error in the airspace legal description for the Class D airspace and Class E airspace designated as a surface area in the extension from the Drake Field: RWY 34-LOC changing “sided” to “side” is corrected in this rule. Except for this change, this rule is the same as published in the NPRM.

This action as the result of an airspace review caused by the decommissioning of the Drake VOR, which provided navigation information for the instrument procedures at this airport, as part of the VOR MON Program.

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, is non-controversial and unlikely to result in adverse or negative comments. 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 5-6.5.a. 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:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would amend controlled airspace in Class E airspace, at Lac Qui Parle County Airport, Madison, MN, to support instrument flight rules (IFR) operations at the airport.

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 44248; August 30, 2018) for Docket No. FAA-2018-0194 to amend Class E airspace extending upward from 700 feet above the surface at Lac Qui Parle County Airport, Madison, MN. 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 7400.11C, dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C 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 modifies Class E airspace extending upward from 700 feet above the surface within a 6.4-mile radius (increased from a 6.3-mile radius) at Lac Qui Parle County Airport, Madison, MN. The segment 7.4 miles southeast of the airport will be removed due to the decommissioning of the Madison NDB and cancellation of the associated approach. This action enhances the safety and management of the standard instrument approach procedures for IFR operations at the airport.

Also, an editorial change has been made removing the city from the airport name. The airport name is updated from Madison-Lac Qui Parle Airport, to Lac Qui Parle County Airport, Madison, MN.

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, is non-controversial and unlikely to result in adverse or negative comments. 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 5-6.5.a. 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 E airspace extending upward from 700 feet above the surface at Cabool Memorial Airport, Cabool, MO, to support instrument flight rules operations at this airport.

The FAA published a notice of proposed rulemaking in the Federal Register (83 FR 47583; September 20, 2018) for Docket No. FAA-2018-0682 to amend Class E airspace extending upward from 700 feet above the surface at Cabool Memorial Airport, Cabool, MO. 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 7400.11C, dated August 13, 2018, and effective September 15, 2018, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This document amends FAA Order 7400.11C, Airspace Designations and Reporting Points, dated August 13, 2018, and effective September 15, 2018. FAA Order 7400.11C is publicly available as listed in the ADDRESSES section of this document. FAA Order 7400.11C 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 modifies the Class E airspace extending upward from 700 feet above the surface at Cabool Memorial Airport, Cabool, MO, by removing the Maples VORTAC and associated extension northeast of the airport. This action also updates the geographic coordinates of the airport to coincide with the FAA's aeronautical database.

This action is necessary due to an airspace review caused by the decommissioning of the Maples VOR, which provided navigation information to the instrument procedures at this airport, as part of the VOR MON Program.

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, is non-controversial and unlikely to result in adverse or negative comments. 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 5-6.5.a. 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:

I. Executive Summary

This action extends the prohibition against flight operations in the Damascus FIR (OSTT) in SFAR No. 114 by all U.S. air carriers; U.S. commercial operators; persons exercising the privileges of an airman certificate issued by the FAA, except when such persons are operating U.S.-registered aircraft for a foreign air carrier; and operators of U.S.-registered civil aircraft, except where the operator of such aircraft is a foreign air carrier, from December 30, 2018, until December 30, 2020. This action also includes minor editorial changes to SFAR No. 114, title 14 Code of Federal Regulations (CFR) 91.1609, consistent with other recently published flight prohibition SFARs.

The FAA is responsible for the safety of flight in the U.S. and for the safety of U.S. civil operators, U.S.-registered civil aircraft, and U.S.-certificated airmen throughout the world. The FAA Administrator's authority to issue rules on aviation safety is found in title 49, United States Code (U.S. Code), Subtitle I, sections 106(f) and (g). Subtitle VII of title 49, Aviation Programs, describes in more detail the scope of the agency's authority. Section 40101(d)(1) provides that the Administrator shall consider in the public interest, among other matters, assigning, maintaining, and enhancing safety and security as the highest priorities in air commerce. Section 40105(b)(1)(A) requires the Administrator to exercise his authority consistently with the obligations of the U.S. Government under international agreements.

This rulemaking is promulgated under the authority described in title 49, U.S. Code, Subtitle VII, Part A, subpart III, section 44701, General requirements. Under that section, the FAA is charged broadly with promoting safe flight of civil aircraft in air commerce by prescribing, among other things, regulations and minimum standards for practices, methods, and procedures that the Administrator finds necessary for safety in air commerce and national security.

This regulation is within the scope of FAA's authority, because it continues to prohibit the persons described in paragraph (a) of SFAR No. 114, 14 CFR 91.1609, from conducting flight operations in the Damascus FIR (OSTT) due to the continued hazards to the safety of U.S. civil flight operations, as described in the preamble to this final rule. The FAA also finds that this action is fully consistent with the obligations under 49 U.S.C. 40105(b)(1)(A) to ensure that the FAA exercises its duties consistently with the obligations of the United States under international agreements.

Section 553(b)(3)(B) of title 5, U.S. Code, authorizes agencies to dispense with notice and comment procedures for rules when the agency for “good cause” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Section 553(d) also authorizes agencies to forgo the delay in the effective date of the final rule for good cause found and published with the rule. In this instance, the FAA finds good cause to forgo notice and comment because notice and comment would be impracticable and contrary to the public interest. In addition, it is contrary to the public interest to delay the effective date of this SFAR.

The FAA has identified an ongoing need to maintain the flight prohibition in place in the Damascus FIR (OSTT) due to the combined threat to civil aviation from the multifaceted conflict and extremist threat, and militant activity. These hazards are further described in the preamble to this rule. To the extent that the rule is based upon classified information, such information is not permitted to be shared with the general public. Also, threats to U.S. civil aviation and intelligence regarding these threats can be fluid. As a result, the agency's original proposal could become unsuitable for minimizing the hazards to U.S. civil aviation in the affected airspace during or after the notice and comment process. For these reasons, the FAA finds good cause to forgo notice and comment and any delay in the effective date for this rule.

On August 29, 2017, the FAA reissued SFAR No. 114, § 91.1609, prohibiting certain flight operations in the Damascus FIR (OSTT) by all U.S. air carriers; U.S. commercial operators; persons exercising the privileges of an airman certificate issued by the FAA, except such persons operating a U.S.-registered aircraft for a foreign air carrier; and operators of U.S.-registered civil aircraft, except where the operator is a foreign air carrier.1 The FAA determined that the significant threat to U.S. civil aviation operating in the Damascus FIR (OSTT), identified when the FAA first published SFAR No. 114, § 91.1609, on December 30, 2014,2 was ongoing due to the presence of anti-aircraft weapons controlled by non-state actors, threats made by extremist groups, de-confliction concerns, and ongoing military fighting. Flight safety risks associated with de-confliction between various military forces conducting operations in Syria and civil aviation, which were identified as a concern in the original prohibition and reissuance in 2017, have continued.

The FAA continues to assess the situation in the Damascus FIR (OSTT) as being hazardous for U.S. civil aviation. The Syrian conflict between pro-regime forces and various opposition groups (which include extremist elements) is extremely complex, exacerbated by the presence of third parties conducting military operations against one or more elements. Syrian allies Russia and Iran are also conducting military operations and have deployed significant air defense and electronic warfare capabilities, to include GPS interference, in the conflict zone, presenting an inadvertent risk to civil aviation operations within the Damascus FIR (OSTT). Additionally, violent extremist groups including Islamic State of Iraq and ash Sham (ISIS) and al Qaida-aligned entities possess, or have access to, a wide array of anti-aircraft weapons that pose a risk to civil aviation operations within the Damascus FIR (OSTT). Anti-regime forces, extremists, and militants have successfully shot down multiple military aircraft using man portable air defense systems (MANPADS) during the conflict. Additionally, various elements have successfully targeted military aircraft using advanced anti-tank guided missiles (ATGM). ATGMs primarily pose a risk to civil aircraft operating near, or parked at, an airport. Various groups employ unmanned aircraft systems (UAS) to surveil and attack Syrian and allied fielded forces and airfields. The multifaceted conflict in Syria poses significant risk to civil aviation operations within the Damascus FIR (OSTT).

Therefore, as a result of the significant continuing risk to the safety of U.S. civil aviation in the Damascus FIR (OSTT), the FAA extends the expiration date of SFAR No. 114, § 91.1609, from December 30, 2018, to December 30, 2020, to maintain the prohibition on flight operations in the Damascus FIR (OSTT) by all U.S. air carriers; U.S. commercial operators; persons exercising the privileges of an airman certificate issued by the FAA, except when such persons are operating U.S.-registered aircraft for a foreign air carrier; and operators of U.S.-registered civil aircraft, except where the operator is a foreign air carrier. While the FAA's flight prohibition does not apply to foreign air carriers, DOT codeshare authorizations prohibit foreign air carriers from carrying a U.S. codeshare partner's code on a flight segment that operates in airspace for which the FAA has issued a flight prohibition.

The FAA will continue to actively monitor the situation and evaluate the extent to which U.S. civil operators and airmen may be able to operate safely in the Damascus FIR (OSTT). Amendments to SFAR No. 114, § 91.1609, may be appropriate if the risk to aviation safety and security changes. The FAA may amend or rescind SFAR No. 114, § 91.1609, as necessary, prior to its expiration date.

The FAA is also incorporating minor editorial changes for clarifying purposes in § 91.1609, including revising the title of the FIR, and clarifying the procedure for considering approval and exemption requests. These changes are consistent with other recently published SFARs. The FAA is also republishing the details concerning the approval and exemption processes in Sections V and VI of this preamble so that interested persons will be able to refer to this final rule for all relevant information regarding SFAR No. 114.

In some instances, U.S. government departments, agencies, or instrumentalities may need to engage U.S. civil aviation to support their activities in the Damascus FIR (OSTT). The FAA is clarifying the approval process for SFAR No. 114, § 91.1609(c), consistent with other recently published flight prohibition SFARs, as previously indicated. If a department, agency, or instrumentality of the U.S. Government determines that it has a critical need to engage any person described in SFAR No. 114, § 91.1609(a), including a U.S. air carrier or commercial operator, to conduct a charter to transport civilian or military passengers or cargo, or other operations, in the Damascus FIR (OSTT), that department, agency, or instrumentality may request the FAA to approve persons described in SFAR No. 114, § 91.1609(a), to conduct such operations.

An approval request must be made directly by the requesting department, agency, or instrumentality of the U.S. Government to the FAA's Associate Administrator for Aviation Safety in a letter signed by an appropriate senior official of the requesting department, agency, or instrumentality. The FAA will not accept or consider requests for approval by anyone other than the requesting department, agency, or instrumentality. In addition, the senior official signing the letter requesting FAA approval on behalf of the requesting department, agency, or instrumentality must be sufficiently positioned within the organization to demonstrate that the senior leadership of the requesting department, agency, or instrumentality supports the request for approval and is committed to taking all necessary steps to minimize operational risks to the proposed flights. The senior official must also be in a position to: (1) Attest to the accuracy of all representations made to the FAA in the request for approval and (2) ensure that any support from the requesting U.S. Government department, agency, or instrumentality described in the request for approval is in fact brought to bear and is maintained over time. Unless justified by exigent circumstances, requests for approval must be submitted to the FAA no less than 30 calendar days before the date on which the requesting department, agency, or instrumentality intends to commence the proposed operations.

The letter must be sent to the Associate Administrator for Aviation Safety, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591. Electronic submissions are acceptable, and the requesting entity may request that the FAA notify it electronically as to whether the approval request is granted. If a requestor wishes to make an electronic submission to the FAA, the requestor should contact the Air Transportation Division, Flight Standards Service, at (202) 267-8166, to obtain the appropriate email address. A single letter may request approval from the FAA for multiple persons covered under SFAR No. 114, § 91.1609, and/or for multiple flight operations. To the extent known, the letter must identify the person(s) expected to be covered under the SFAR on whose behalf the U.S. Government department, agency, or instrumentality is seeking FAA approval, and it must describe—

• The proposed operation(s), including the nature of the mission being supported;

• The service to be provided by the person(s) covered by the SFAR;

• To the extent known, the specific locations in the Damascus FIR (OSTT) where the proposed operation(s) will be conducted, including, but not limited to, the flight path and altitude of the aircraft while it is operating in the Damascus FIR (OSTT) and the airports, airfields and/or landing zones at which the aircraft will take-off and land; and

• The method by which the department, agency, or instrumentality will provide, or how the operator will otherwise obtain, current threat information and an explanation of how the operator will integrate this information into all phases of the proposed operations (i.e., pre-mission planning and briefing, in-flight, and post-flight phases).

The request for approval must also include a list of operators with whom the U.S. Government department, agency, or instrumentality requesting FAA approval has a current contract(s), grant(s), or cooperative agreement(s) (or its prime contractor has a subcontract(s)) for specific flight operations in the Damascus FIR (OSTT). Additional operators may be identified to the FAA at any time after the FAA approval is issued. However, all additional operators must be identified to, and obtain an Operations Specification (OpSpec) or Letter of Authorization (LOA), as appropriate, from the FAA for operations in the Damascus FIR (OSTT), before such operators commence such operations. The approval conditions discussed below apply to any such additional operators. Updated lists should be sent to the email address to be obtained from the Air Transportation Division, by calling (202) 267-8166.

If an approval request includes classified information, requestors may contact Aviation Safety Inspector Michael Filippell for instructions on submitting it to the FAA. His contact information is listed in the For Further Information Contact section of this final rule.

FAA approval of an operation under SFAR No. 114, § 91.1609, does not relieve persons subject to this SFAR of their responsibility to comply with all applicable FAA rules and regulations. Operators of civil aircraft must comply with the conditions of their certificate, OpSpecs, and LOAs, as applicable. Operators must further comply with all rules and regulations of other U.S. Government departments or agencies that may apply to the proposed operation(s), including, but not limited to, regulations issued by the Transportation Security Administration.

If the FAA approves the request, the FAA's Aviation Safety Organization will send an approval letter to the requesting department, agency, or instrumentality informing it that the FAA's approval is subject to all of the following conditions:

(1) The approval will stipulate those procedures and conditions that limit, to the greatest degree possible, the risk to the operator, while still allowing the operator to achieve its operational objectives.

(2) Before any approval takes effect, the operator must submit to the FAA:

(a) A written release of the U.S. Government from all damages, claims, and liabilities, including without limitation legal fees and expenses, relating to any event arising out of or related to the approved operations in the Damascus FIR (OSTT); and

(b) The operator's written agreement to indemnify the U.S. Government with respect to any and all third-party damages, claims, and liabilities, including without limitation legal fees and expenses, relating to any event arising from or related to the approved operations in the Damascus FIR (OSTT).

(3) Other conditions that the FAA may specify, including those that may be imposed in OpSpecs or LOAs, as applicable.

The release and agreement to indemnify do not preclude an operator from raising a claim under an applicable non-premium war risk insurance policy issued by the FAA under chapter 443 of title 49, U.S. Code.

If the FAA approves the proposed operation(s), the FAA will issue an OpSpec or LOA, as applicable, to the operator(s) identified in the original request authorizing them to conduct the approved operation(s), and will notify the department, agency, or instrumentality that requested the FAA's approval of any additional conditions beyond those contained in the approval letter.

Any operations not conducted under an approval issued by the FAA through the approval process set forth previously must be conducted under an exemption from SFAR No. 114, § 91.1609. A petition for exemption must comply with 14 CFR part 11 and requires exceptional circumstances beyond those contemplated by the approval process set forth previously. In addition to the information required by 14 CFR 11.81, at a minimum, the requestor must describe in its submission to the FAA—

• The proposed operation(s), including the nature of the operation;

• The service to be provided by the person(s) covered by the SFAR;

• The specific locations in the Damascus FIR (OSTT) where the proposed operation(s) will be conducted, including, but not limited to, the flight path and altitude of the aircraft while it is operating in the Damascus FIR (OSTT) and the airports, airfields and/or landing zones at which the aircraft will take-off and land;

• The method by which the operator will obtain current threat information, and an explanation of how the operator will integrate this information into all phases of its proposed operations (i.e., the pre-mission planning and briefing, in-flight, and post-flight phases); and

• The plans and procedures that the operator will use to minimize the risks, identified in this preamble, to the proposed operations, so that granting the exemption would not adversely affect safety or would provide a level of safety at least equal to that provided by this SFAR. The FAA has found comprehensive, organized plans and procedures of this nature to be helpful in facilitating the agency's safety evaluation of petitions for exemption from flight prohibition SFARs.

Additionally, the release and agreement to indemnify, as referred to previously, are required as a condition of any exemption that may be issued under SFAR No. 114, § 91.1609.

The FAA recognizes that operations that may be affected by SFAR No. 114, § 91.1609, may be planned for the governments of other countries with the support of the U.S. Government. While these operations will not be permitted through the approval process, the FAA will consider exemption requests for such operations on an expedited basis and prior to any private exemption requests.

Changes to Federal regulations must undergo several economic analyses. First, Executive Orders 12866 and 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354), as codified in 5 U.S.C. 603 et seq., requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39), as amended, 19 U.S.C. Chapter 13, prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Agreements Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), as codified in 2 U.S.C. Chapter 25, requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule.

In conducting these analyses, the FAA has determined that this final rule has benefits that justify its costs. This rule is a significant regulatory action, as defined in section 3(f) of Executive Order 12866, as it raises novel policy issues contemplated under that Executive Order. As notice and comment under 5 U.S.C. 553 are not required for this final rule, the regulatory flexibility analyses described in 5 U.S.C. 603 and 604 regarding impacts on small entities are not required. This rule will not create unnecessary obstacles to the foreign commerce of the United States and will not impose an unfunded mandate on State, local, or tribal governments, or on the private sector, by exceeding the threshold identified previously.

This rule prohibits U.S. civil flights in the entire Damascus FIR (OSTT). At the time of initial issuance of SFAR No. 114, 14 CFR 91.1609, on December 30, 2014, the FAA determined that incremental costs were minimal for U.S. operators of large transport category airplanes, because those U.S. operators conducting overflights in the Damascus FIR (parts 121 and 125 operators) had voluntarily ceased operating in the Damascus FIR beginning in 2011 due to the onset of hostilities in Syria, prior to the FAA's action prohibiting U.S. civil operations in the Damascus FIR. The FAA also determined that the incremental costs of SFAR No. 114 were minimal for “on-demand” large carriers (parts 121 and 121/135) and small “on-demand” operators (parts 135, 125, and 91K). The FAA believed that few, if any, of these “on-demand” operators were still operating in the Damascus FIR (OSTT) immediately before the FAA issued FDC NOTAM 4/4936 due to preexisting hostilities in Syria dating back to 2011.

As previously discussed, the FAA continues to assess the situation in the Damascus FIR (OSTT) as being hazardous for U.S. civil aviation due to continued military operations. The FAA believes there are very few, if any, U.S. operators who would seek to operate in the Damascus FIR (OSTT) at this time due to the hazards described in the Background section of this final rule. Therefore, the FAA finds that the incremental costs of extending SFAR No. 114, 14 CFR 91.1609 will be minimal and are exceeded by the benefits of avoided risks of deaths, injuries, and property damage that could result from a U.S. operator's aircraft being shot down (or otherwise damaged).

The Regulatory Flexibility Act (RFA), in 5 U.S.C. 603, requires an agency to prepare an initial regulatory flexibility analysis describing impacts on small entities whenever an agency is required by 5 U.S.C. 553, or any other law, to publish a general notice of proposed rulemaking for any proposed rule. Similarly, 5 U.S.C. 604 requires an agency to prepare a final regulatory flexibility analysis when an agency issues a final rule under 5 U.S.C. 553, after being required by that section or any other law to publish a general notice of proposed rulemaking. The FAA found good cause to forgo notice and comment and any delay in the effective date for this rule. As notice and comment under 5 U.S.C. 553 are not required in this situation, the regulatory flexibility analyses described in 5 U.S.C. 603 and 604 are not required.

The Trade Agreements Act of 1979 (Pub. L. 96-39) prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to this Act, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.

The FAA has assessed the potential effect of this final rule and determined that its purpose is to protect the safety of U.S. civil aviation from hazards to their operations in the Damascus FIR (OSTT), a location outside the U.S. Therefore, the rule is in compliance with the Trade Agreements Act of 1979.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $155.0 million in lieu of $100 million.

This final rule does not contain such a mandate. Therefore, the requirements of Title II of the Act do not apply.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. The FAA has determined that there is no new requirement for information collection associated with this final rule.

In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA's policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has determined that there are no ICAO Standards and Recommended Practices that correspond to this regulation.

The FAA has analyzed this action under Executive Order 12114, Environmental Effects Abroad of Major Federal Actions (44 FR 1957, January 4, 1979), and DOT Order 5610.1C, Paragraph 16. Executive Order 12114 requires the FAA to be informed of environmental considerations and take those considerations into account when making decisions on major Federal actions that could have environmental impacts anywhere beyond the borders of the United States. The FAA has determined that this action is exempt pursuant to Section 2-5(a)(i) of Executive Order 12114 because it does not have the potential for a significant effect on the environment outside the United States.

In accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 8-6(c), FAA has prepared a memorandum for the record stating the reason(s) for this determination; this memorandum has been placed in the docket for this rulemaking.

The FAA has analyzed this rule under the principles and criteria of Executive Order 13132, Federalism. The agency has determined that this action would not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, would not have Federalism implications.

The FAA analyzed this rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it would not be a “significant energy action” under the executive order and would not be likely to have a significant adverse effect on the supply, distribution, or use of energy.

Executive Order 13609, Promoting International Regulatory Cooperation, (77 FR 26413, May 4, 2012) promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The FAA has analyzed this action under the policies and agency responsibilities of Executive Order 13609, and has determined that this action would have no effect on international regulatory cooperation.

This rule is not subject to the requirements of E.O. 13771 (82 FR 9339, Feb. 3, 2017) because it is issued with respect to a national security function of the United States.

An electronic copy of a rulemaking document may be obtained from the internet by—

• Searching the Federal Document Management System (FDMS) Portal (http://www.regulations.gov);

• Visiting the FAA's Regulations and Policies web page at http://www.faa.gov/regulations_policies; or

• Accessing the Government Publishing Office's web page at http://www.fdsys.gov.

Copies may also be obtained by sending a request (identified by amendment or docket number of this rulemaking) to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW, Washington, DC 20591, or by calling (202) 267-9677.

Except for classified material, all documents the FAA considered in developing this rule, including economic analyses and technical reports, may be accessed from the internet through the Federal Document Management System Portal referenced previously.

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121) (set forth as a note to 5 U.S.C. 601) requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document may contact its local FAA official, or the persons listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. To find out more about SBREFA on the internet, visit http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

In consideration of the foregoing, the Federal Aviation Administration amends chapter I of title 14, Code of Federal Regulations, as follows:

Background

On June 14, 2018, we published a Notice of Proposed Rulemaking (NPRM) 1 in the Federal Register in which we proposed to add SSAvers to the list of SSA systems that are exempt from specific provisions of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2). As part of our Workplace and Domestic Violence policy and program, SSAvers houses information regarding alleged incidents of workplace and domestic violence filed by SSA employees and contractors. It also provides a centralized means for us to review and respond to the reported allegations.

This final rule adds SSAvers to the list of SSA systems that are exempt from specific provisions of the Privacy Act due to the investigatory nature of information that is maintained in this system.

In the NPRM, we provided a 30-day comment period, which ended on July 16, 2018. We received four comments.2 We opted not to post one of these comments because it was submitted by a former SSA employee and it contained sensitive information. The remaining comments were submitted by members of the public.

The first commenter indicated that he or she did not understand the comment and review. While we regret that this commenter did not understand the proposal, we did not consider this comment further when determining to adopt this as a final rule.

The second commenter agreed with the new system of records and said it is imperative to have a system, like SSAvers, which will help review and investigate allegations of workplace or domestic violence. She said it would be convenient to make a reporting system that is easy to access and that removes the burden of the long process of reporting an occurrence.

The third commenter objected to our proposal, because, in the commenter's opinion, the proposal is against public policy and defeats the purpose of the Privacy Act and the Freedom of Information Act (FOIA). The commenter said that by making results of investigations inaccessible, it is impossible to know whether the perpetrators of workplace and domestic violence are held accountable. The commenter wrote that by denying everyone access to the information obtained from these investigations, SSA places the cost and burden of conducting the same investigation on others, especially the victims who have a special interest in knowing that the perpetrators of the violence are held accountable.

We carefully considered this comment and the objections presented. In response, we want to emphasize that SSAvers contains information we collect about not just alleged victims of workplace violence, but any employees, contractors, and members of the public who are witnesses of, involved in responding to, or allegedly involved in workplace and domestic violence affecting our employees and contractors. This highly sensitive information may include the name and contact information of individuals involved; personal information related to alleged behaviors of concern and assessing the risk of violence; and our response and recommendations to mitigate risks of violence. Due to the investigatory and sensitive nature of the content contained in this system, we continue to believe that exempting this system of records from certain provisions of the Privacy Act based on 5 U.S.C. 552a(k)(2) is appropriate.

Further, we want to clarify that, under the Privacy Act, an individual may request notification of or access to a record in this system, even though SSAvers is listed as an exempt system. We may still grant notification of and access to information contained in a record in an exempt system when the privacy of third parties would not be compromised by such action. In addition, an individual may still request these records under the FOIA, and SSA would release the records as required by law.

After carefully considering the public comments, we are adopting this final rule.

We consulted with the Office of Management and Budget (OMB) and determined that this final rule does not meet the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563. Therefore, OMB did not review it.

We also determined that this final rule meets the plain language requirement of Executive Order 12866.

We analyzed this rule in accordance with the principles and criteria established by Executive Order 13132, and we determined that the rule will not have sufficient Federalism implications to warrant the preparation of a Federalism assessment. We also determined that this rule will not preempt any State law or State regulation or affect the States' abilities to discharge traditional State governmental functions.

The regulations effectuating Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this rule.

We certify that this rule will not have a significant economic impact on a substantial number of small entities because it affects individuals only. Therefore, the Regulatory Flexibility Act, as amended, does not require us to prepare a regulatory flexibility analysis.

This rule is not subject to the requirements of Executive Order 13771 because it is administrative in nature and results in no more than de minimis costs.

These rules do not create any new or affect any existing collections and, therefore, do not require OMB approval under the Paperwork Reduction Act.

For the reasons stated in the preamble, we amend part 401 of title 20 of the Code of Federal Regulations as set forth below:

I. Table of Abbreviations APA Administrative Procedure Act COTP U.S. Coast Guard Captain of the Port DHS Department of Homeland Security FR Federal Register COTP Captain of the Port NOAA National Oceanic and Atmospheric Administration NPRM Notice of Proposed Rulemaking PATCOM U.S. Coast Guard Patrol Commander U.S.C. United States Code II. Background Information and Regulatory History

The Coast Guard is issuing this temporary final 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. Since the Coast Guard received notice of this event on November 7, 2018, notice and comment procedures would be impracticable in this instance.

For similar reasons as those stated above, 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.

The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The Captain of the Port (COTP) San Francisco has determined that potential hazards associated with the Winter on the Waterfront Fireworks Display on December 8, 2018, will be a safety concern for anyone within a 100 foot radius of the fireworks barge and anyone within a 140 foot radius of the fireworks firing site. This rule is needed to protect spectators, vessels, and other property from hazards associated with pyrotechnics.

This rule establishes a temporary safety zone during the loading, staging, and transit of the fireworks barge, until after completion of the fireworks display. During the loading and staging of the pyrotechnics onto the fireworks barge, scheduled to take place from 3:00 p.m. to 4:00 p.m. on December 8, 2018, at Berkeley Marina Ferry Dock in Berkeley, CA, the safety zone will encompass the navigable waters around and under the fireworks barge within a radius of 100 feet.

The fireworks barge will remain at Berkeley Marina Ferry Dock until the start of its transit to the display location. Towing of the barge from Berkeley Marina Ferry Dock to the display location is scheduled to take place from 4:30 p.m. to 5:00 p.m. on December 8, 2018, where it will remain until the conclusion of the fireworks display.

At 5:00 p.m. on December 8, 2018, 30 minutes prior to the commencement of the two 3-minute fireworks displays, scheduled to start at 5:30 p.m. and 6:15 p.m., the safety zone will increase in size and encompass the navigable waters around and under the fireworks barge within a radius of 140 feet in approximate position 37°51′58″ N, 122°19′11″ W (NAD 83) for the Berkeley Winter on the Waterfront Fireworks Display. The safety zone shall terminate at 6:45 p.m. on December 8, 2018.

The effect of the temporary safety zone is to restrict navigation in the vicinity of the fireworks loading, staging, transit, and firing site. Except for persons or vessels authorized by the COTP or the COTP's designated representative, no person or vessel may enter or remain in the restricted areas. These regulations are needed to keep spectators and vessels away from the immediate vicinity of the fireworks firing sites to ensure the safety of participants, spectators, and transiting vessels.

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 limited duration and narrowly tailored geographic area of the safety zone. Although this rule restricts access to the waters encompassed by the safety zone, the effect of this rule will not be significant because the local waterway users will be notified via public Notice to Mariners to ensure the safety zone will result in minimum impact. The entities most likely to be affected are waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities.

The Regulatory Flexibility Act of 1980 (RFA), 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.

This rule may affect the following entities, some of which may be small entities: Owners and operators of waterfront facilities, commercial vessels, and pleasure craft engaged in recreational activities and sightseeing, if these facilities or vessels are in the vicinity of the safety zone at times when this zone is being enforced. This rule will not have a significant economic impact on a substantial number of small entities for the following reasons: (i) This rule will encompass only a small portion of the waterway for a limited period of time, and (ii) the maritime public will be advised in advance of these safety zones via Notice to Mariners.

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 expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management 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 safety zone of limited size and duration. It is categorically excluded from further review under Categorical Exclusion 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 preamble and the regulatory language appearing on page 61125 in the Federal Register of Wednesday, November 28, 2018, reflected an error in calculating the COLA for the rate for noncommercial webcasters, and therefore the Judges make the following corrections to the preamble and the final rule:

In FR Doc. 2018-25908 appearing on page 61125 in the Federal Register of Wednesday, November 28, 2018, make the following corrections:

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 elects not to do so. For the 2018 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 risk adjustment 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 (see 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 risk adjustment methodology related to community rating states. In the October 30, 2013 Federal Register (78 FR 65046), we finalized this proposed modification 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 federally certified risk adjustment methodology for the 2019 benefit year. In that proposed rule, 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 July 27, 2018, consistent with § 153.320(b)(1)(i), we updated the 2019 benefit year final risk adjustment model coefficients to reflect an additional recalibration related to an update to the 2016 enrollee-level EDGE dataset.1

In the July 30, 2018 Federal Register (83 FR 36456), we published a final rule that adopted the 2017 benefit year HHS-operated risk adjustment methodology set forth in the March 23, 2012 Federal Register (77 FR 17220 through 17252) and in the March 8, 2016 Federal Register (81 FR 12204 through 12352). The final rule provided an additional explanation of the rationale for use of statewide average premium in the HHS-operated risk adjustment state payment transfer formula for the 2017 benefit year, including why the program is operated in a budget-neutral manner. That final rule permitted HHS to resume 2017 benefit year program operations, including collection of risk adjustment charges and distribution of risk adjustment payments. HHS also provided guidance as to the operation of the HHS-operated risk adjustment program for the 2017 benefit year in light of publication of the final rule.2

In the August 10, 2018 Federal Register (83 FR 39644), we published the proposed rule concerning the adoption of the 2018 benefit year HHS-operated risk adjustment methodology set forth in the March 23, 2012 Federal Register (77 FR 17220 through 17252) and in the December 22, 2016 Federal Register (81 FR 94058 through 94183).

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 statewide average premium as the cost-scaling factor to ensure that the amount collected from issuers equals the amount of payments made to issuers for the applicable benefit year, that is, a methodology that maintains the budget neutrality of the HHS-operated risk adjustment program for the applicable benefit year.3 The district court otherwise rejected New Mexico Health Connections' arguments.

The risk adjustment program provides payments to health insurance plans that enroll populations with higher-than-average risk and collects charges from plans that enroll populations with lower-than-average risk. The program is intended to reduce incentives for issuers to structure their plan benefit designs or marketing strategies to avoid higher-risk enrollees and lessen the potential influence of risk selection on the premiums that plans 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, small group and merged 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 a risk adjustment program is based on the premise that premiums for that state market should reflect the differences in plan benefits and efficiency—not the health status of the enrolled population.5 HHS developed the risk adjustment state 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 the 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 state payment 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 state market 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 mitigates incentives for issuers to operate less efficiently, set higher prices, or 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 state payment transfer formula, instead of statewide average premium.

In the August 10, 2018 Federal Register (83 FR 39644), we published a proposed rule that proposed to adopt the HHS-operated risk adjustment methodology as previously established in the March 23, 2012 Federal Register (77 FR 17220 through 17252) and the December 22, 2016 Federal Register (81 FR 94058 through 94183) for the 2018 benefit year, with an additional explanation regarding the use of statewide average premium and the budget-neutral nature of the HHS-operated risk adjustment program. We did not propose to make any changes to the previously published HHS-operated risk adjustment methodology for the 2018 benefit year.

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 grounds 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, a methodology that ensured that amounts collected from issuers would equal payments made to issuers for the applicable benefit year. Accordingly, HHS provided the additional explanation in the proposed rule.

As explained in the proposed rule, Congress designed the risk adjustment program to be implemented and operated by states if they chose 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 funds on their programs if they voluntarily chose to do so, HHS could not have required such additional funding.

We also explained that while the PPACA did not include an explicit requirement that the risk adjustment program be operated in a budget-neutral manner, HHS was constrained by appropriations law to devise a risk adjustment methodology that could be implemented in a budget-neutral fashion. 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, and did not authorize HHS to obligate itself for risk adjustment payments in excess of charges collected.7 Indeed, unlike the Medicare Part D statute, which expressly authorized the appropriation of funds and provided budget authority in advance of appropriations to make Part D risk-adjusted payments, the PPACA's risk adjustment statute made no reference to additional appropriations.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, we explained that HHS could not—absent another source of appropriations—have designed the program in a way that required payments in excess of collections consistent with binding appropriations law. Thus, Congress did not give HHS discretion to implement a risk adjustment program that was not budget neutral.

Furthermore, the proposed rule explained that if HHS elected to adopt a risk adjustment methodology that was contingent on appropriations from Congress through the annual appropriations process, that would have created uncertainty for issuers regarding the amount of risk adjustment payments they could expect for a given benefit year. That uncertainty would have undermined one of the central objectives of the risk adjustment program, which is to stabilize premiums by assuring issuers in advance that they will receive risk adjustment payments if, for the applicable benefit year, they enroll a higher-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, the proposed rule noted that relying on 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. The proposed rule also explained that any later-authorized program management appropriations made to CMS were not intended to be used for supplementing risk adjustment payments, and were allocated by the agency for other, primarily administrative, purposes. Specifically, it has been suggested that the annual lump sum appropriation to CMS for program management (CMS Program Management account) was potentially available for risk adjustment payments. The lump sum appropriation for each year was not enacted until after the applicable rule announcing the HHS-operated methodology for the applicable benefit year, and therefore could not have been relied upon in promulgating that rule. Additionally, as the underlying budget requests reflect, the CMS Program Management account was intended for program management expenses, such as administrative costs for various CMS programs such as Medicaid, Medicare, the Children's Health Insurance Program, and the PPACA's insurance market reforms—not for the program payments under those programs. CMS would have elected to use the CMS Program Management account for these important program management expenses, rather than program payments for risk adjustment, even if CMS had discretion to use all or part of the lump sum for such program payments. Without the adoption of a budget-neutral framework, we explained that 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 the overall goals of the risk adjustment program—to stabilize premiums and to reduce incentives for issuers to avoid enrolling individuals with higher-than-average actuarial risk.

In light of the budget-neutral framework discussed above, the proposed rule explained that we also chose not to use a different parameter for the state 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,9 use of the plan's own premium or a 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. Using a plan's own premium would have frustrated the risk adjustment program's goals, as discussed above, of encouraging issuers to rate for the average risk in the applicable state market risk pool, and avoiding the creation of incentives for issuers to operate less efficiently, set higher prices, or develop benefit designs or create marketing strategies to avoid high-risk enrollees. Use of an after-the-fact balancing adjustment is also less predictable for issuers than a methodology that is established before the benefit year. We explained that 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, the proposed rule noted that using a plan's own premium to scale transfers may provide additional incentives for plans with high-risk enrollees to increase premiums in order to receive higher risk adjustment payments. As noted by commenters to the 2014 Payment Notice proposed rule, transfers also 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. In the 2014 Payment Notice final rule, we noted that we received a number of comments in support of our proposal to use statewide average premium as the basis for risk adjustment transfers, while some commenters expressed a desire for HHS to use a plan's own premium.10 HHS addressed those comments by reiterating that we had considered the use of a plan's own premium, but chose to use statewide average premium, as this approach supports the overall goals 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 employ risk-avoidance techniques.11

The proposed rule also explained that although HHS has not yet calculated risk adjustment payments and charges for the 2018 benefit year, immediate administrative action was imperative to maintain stability and predictability in the individual, small group and merged insurance markets. Without administrative action, the uncertainty related to the HHS-operated risk adjustment methodology for the 2018 benefit year could add uncertainty to the individual, small group and merged markets, as issuers determine the extent of their market participation and the rates and benefit designs for plans they will offer in future benefit years. Without certainty regarding the 2018 benefit year HHS-operated risk adjustment methodology, there was a serious risk that issuers would substantially increase future premiums to account for the potential of uncompensated risk associated with high-risk enrollees. Consumers enrolled in certain plans with benefit and network structures that appeal to higher risk enrollees could see a significant premium increase, which could make coverage in those plans particularly unaffordable for unsubsidized enrollees. In states with limited Exchange options, a qualified health plan issuer exit would restrict consumer choice, and could put additional upward pressure on 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 involuntary coverage losses in certain state market risk pools.

Additionally, the proposed rule explained that HHS's failure to make timely risk adjustment payments could impact the solvency of issuers providing coverage to sicker (and costlier) than average enrollees that require the influx of risk adjustment payments to continue operations. When state regulators evaluate issuer solvency, any uncertainty surrounding risk adjustment transfers hampers their ability to make decisions that protect consumers and support the long-term health of insurance markets.

In response to the district court's February 2018 decision that vacated the use of statewide average premium in the risk adjustment methodology on the grounds that HHS did not adequately explain its decision to adopt that aspect of the methodology, we offered the additional explanation outlined above in the proposed rule, and proposed to maintain the use of statewide average premium in the applicable state market risk pool for the state payment transfer formula under the HHS-operated risk adjustment methodology for the 2018 benefit year. HHS proposed to adopt the methodology previously established for the 2018 benefit year in the Federal Register publications cited above that apply to the calculation, collection, and payment of risk adjustment transfers under the HHS-operated methodology for the 2018 benefit year. This included the adjustment to the statewide average premium, reducing it by 14 percent, to account for an estimated proportion of administrative costs that do not vary with claims.12 We sought comment on the proposal to use statewide average premium. However, in order to protect the settled expectations of issuers that structured their pricing, offering, and market participation decisions in reliance on the previously issued 2018 benefit year methodology, all other aspects of the risk adjustment methodology were outside of the scope of the proposed rule, and HHS did not seek comment on those finalized aspects.

We summarize and respond to the comments received to the proposed rule below. Given the volume of exhibits, court filings, white papers (including all corresponding exhibits), and comments on other rulemakings incorporated by reference in one commenter's letter, we are not able to separately address each of those documents. Instead, we summarize and respond to the significant comments and issues raised by the commenter that are within the scope of this rulemaking.

Comment: One commenter expressed general concerns about policymaking and implementation of the PPACA related to enrollment activity changes, cost-sharing reductions, and short-term, limited-duration plans.

Response: The use of statewide average premium in the HHS-operated risk adjustment methodology, including the operation of the program in a budget-neutral manner, which was the limited subject of the proposed rulemaking, was not addressed by this commenter. In fact, the commenter did not specifically address the risk adjustment program at all. Therefore, the concerns raised by this commenter are outside the scope of the proposed rule, and are not addressed in this final rule.

Comment: Commenters were overwhelmingly in favor of HHS finalizing the rule as proposed, and many encouraged HHS to do so as soon as possible. Many commenters stated that by finalizing this rule as proposed, HHS is providing an additional explanation regarding the operation of the program in a budget-neutral manner and the use of statewide average premium for the 2018 benefit year consistent with the decision of the district court, and is reducing the risk of substantial instability to the Exchanges and individual and small group and merged market risk pools. Many commenters stated that no changes should be made to the risk adjustment methodology for the 2018 benefit year because issuers' rates for the 2018 benefit year were set based on the previously finalized methodology.

Response: We agree that a prompt finalization of this rule is important to ensure the ongoing stability of the individual and small group and merged markets, and the ability of HHS to continue operations of the risk adjustment program normally for the 2018 benefit year. We also agree that finalizing the rule as proposed would maintain stability and ensure predictability of pricing in a budget-neutral framework because issuers relied on the 2018 HHS-operated risk adjustment methodology that used statewide average premium during rate setting and when deciding in calendar year 2017 whether to participate in the market(s) during the 2018 benefit year.

Comment: Several commenters agreed with HHS's interpretation of the statute as requiring the operation of the risk adjustment program in a budget-neutral manner; several cited the absence of additional funding which would cover any possible shortfall between risk adjustment transfers as supporting the operation of the program in a budget-neutral manner. One commenter highlighted that appropriations can vary from year to year, adding uncertainty and instability to the market(s) if the program relied on additional funding to cover potential shortfalls and was not operated in a budget-neutral manner, which in turn would affect issuer pricing decisions. These commenters noted that any uncertainty about whether Congress would fund risk adjustment payments would deprive issuers of the ability to make pricing and market participation decisions based on a legitimate expectation that risk adjustment transfers would occur as required in HHS regulations. Other commenters noted that without certainty of risk adjustment transfers, issuers would likely seek rate increases to account for this further uncertainty and the risk of enrolling a greater share of high-cost individuals. Alternatively, issuers seeking to avoid significant premium increases would be compelled to develop alternative coverage arrangements that fail to provide adequate coverage to people with chronic conditions or high health care costs (for example, narrow networks or formulary design changes). Another commenter pointed to the fact that risk adjustment was envisioned by Congress as being run by the states, and that if HHS were to require those states that run their own program to cover any shortfall between what they collect and what they must pay out, HHS would effectively be imposing an unfunded mandate on states. The commenter noted there is no indication that Congress intended risk adjustment to impose such an unfunded mandate. Another commenter expressed that a budget-neutral framework was the most natural reading of the PPACA, with a different commenter stating this framework is implied in the statute.

However, one commenter stated that risk adjustment does not need to operate as budget neutral, as section 1343 of the PPACA does not require that the program be budget neutral, and funds are available to HHS for the risk adjustment program from the CMS Program Management account to offset any potential shortfalls. The commenter also stated that the rationale for using statewide average premium to achieve budget neutrality is incorrect, and that even if budget neutrality is required, any risk adjustment payment shortfalls that may result from using a plan's own premium in the risk adjustment transfer formula could be addressed through pro rata adjustments to risk adjustment transfers. This commenter also stated that the use of statewide average premium is not predictable for issuers trying to set rates, especially for small issuers which do not have a large market share, as they do not have information about other issuers' rates at the time of rate setting. Conversely, many commenters noted that, absent an appropriation for risk adjustment payments, the prorated payments that would result from the use of a plan's own premium in the risk adjustment methodology would add an unnecessary layer of complexity for issuers when pricing and would reduce predictability, resulting in uncertainty and instability in the market(s).

Response: We acknowledged in the proposed rule that the PPACA did not include a provision that explicitly required the risk adjustment program be operated in a budget-neutral manner; however, HHS was constrained by appropriations law to devise a risk adjustment methodology that could be implemented in a budget-neutral fashion. In fact, Congress did not authorize or appropriate additional funding for risk adjustment beyond the amount of charges paid in, and did not authorize HHS to obligate itself for risk adjustment payments in excess of charges collected. In the absence of additional, independent funding or the creation of budget authority in advance of an appropriation, HHS could not make payments in excess of charges collected consistent with binding appropriations law. Furthermore, we agree with commenters that the creation of a methodology that was contingent on Congress agreeing to appropriate supplemental funding of unknown amounts through the annual appropriations process would create uncertainty. It would also delay the process for setting the parameters for any potential risk adjustment proration until well after rates were set and the plans were in effect for the applicable benefit year. In addition to proration of risk adjustment payments to balance risk adjustment transfer amounts, we considered the impact of assessing additional charges or otherwise collecting additional funds from issuers of risk adjustment covered plans as alternatives to the establishment of a budget-neutral framework. All of these after-the-fact balancing adjustments were ultimately rejected because they are less predictable for issuers than a budget-neutral methodology which does not require after-the-fact balancing adjustments, a conclusion supported by the vast majority of comments received. As detailed in the proposed rule, HHS determined it would not be appropriate to rely on the CMS Program Management account because those amounts are designated for administration and operational expenses, not program payments, nor would the CMS Program Management account be sufficient to fund both the payments under the risk adjustment program and those administrative and operational expenses. Furthermore, use of such funds would create the same uncertainty and other challenges described above, as it would require reliance on the annual appropriations process and would require after-the-fact balancing adjustments to address shortfalls. After extensive analysis and evaluation of alternatives, we determined that the best method consistent with legal requirements is to operate the risk adjustment program in a budget-neutral manner, using statewide average premium as the cost scaling factor and normalizing the risk adjustment payment transfer formula to reflect state average factors.

We agree with the commenters that calculating transfers based on a plan's own premium without an additional funding source to ensure full payment of risk adjustment payment amounts would create premium instability. If HHS implemented an approach based on a plan's own premium without an additional funding source, after-the-fact payment adjustments would be required. As explained above, the amount of these payment adjustments would vary from year to year, would delay the publication of final risk adjustment amounts, and would compel issuers with risk that is higher than the state average to speculate on the premium increase that would be necessary to cover an unknown risk adjustment payment shortfall amount. We considered and ultimately declined to adopt a methodology that required an after-the-fact balancing adjustment because such an approach is less predictable for issuers than a budget-neutral methodology that can be calculated in advance of a benefit year. This included consideration of a non-budget neutral HHS-operated risk adjustment methodology that used a plan's own premiums as the cost-scaling factor, which we discuss in detail later in this preamble. Modifying the 2018 benefit year risk adjustment methodology to use a plan's own premium would reduce the predictability of risk adjustment payments and charges significantly. As commenters stated, the use of a plan's own premium would add an extra layer of complexity in estimating risk adjustment transfers because payments and charges would need to be prorated retrospectively based on the outcome of risk adjustment transfer calculations, but would need to be anticipated in advance of the applicable benefit year for use in issuers' pricing calculations. We do not agree with the commenter that statewide average premium is less predictable than a plan's own premium, as the use of statewide average premium under a budget-neutral framework makes risk adjustment transfers self-balancing, and provides payment certainty for issuers with higher-than-average risk.

After considering the comments submitted, we are finalizing a methodology that operates risk adjustment in a budget-neutral manner using statewide average premium as the cost scaling factor and normalizing the risk adjustment payment transfer formula to reflect state average factors for the 2018 benefit year.

Comment: The majority of the comments supported the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2018 benefit year. Some commenters stated that the risk adjustment program is working as intended, by compensating issuers based on their enrollees' health status, that is, transferring funds from issuers with predominately low-risk enrollees to those with a higher-than-average share of high-risk enrollees. One commenter stated that the program has been highly effective at reducing loss-ratios and ensuring that issuers can operate efficiently, without concern for significant swings in risk from year to year. Although some commenters requested refinements to ensure that the methodology does not unintentionally harm smaller, newer, or innovative issuers, a different commenter noted that the results for all prior benefit years of the risk adjustment program do not support the assertion that the risk adjustment methodology undermines small health plans. This commenter noted that the July 9, 2018 “Summary Report on Permanent Risk Adjustment Transfers for the 2017 Benefit Year” found a very strong correlation between the amount of paid claims and the direction and scale of risk adjustment transfers.13 It also pointed to the American Academy of Actuaries' analysis of 2014 benefit year risk adjustment results, in which 103 of 163 small health plans (those with less than 10 percent of market share) received risk adjustment payments and the average payment was 27 percent of premium.14 This commenter cited these points as evidence that risk adjustment is working as intended for small issuers. This commenter also cited an Oliver Wyman study that analyzed risk adjustment receipts by health plan member months (that is, issuer size) and found no systematic bias in the 2014 risk adjustment model.15

A few commenters stated that use of statewide average premium to scale risk adjustment transfers tends to penalize issuers with efficient care management and lower premiums and rewards issuers for raising rates. One of the commenters also stated that the HHS-operated risk adjustment methodology does not reflect relative actuarial risk, that statewide average premium harms issuers that price below the statewide average, and that the program does not differentiate between an issuer that has lower premiums because of medical cost savings from better care coordination and an issuer that has lower premiums because of healthier-than-average enrollees. The commenter suggested that HHS add a Care Management Effectiveness index into the risk adjustment formula. This commenter also stated that use of a plan's own premium rather than statewide average premium could improve the risk adjustment formula, stating that issuers would not be able to inflate their premiums to “game” the risk adjustment system due to other PPACA requirements such as medical loss ratio, rate review, and essential health benefits, as well as state insurance regulations, including oversight of marketing practices intended to avoid sicker enrollees.

However, other commenters opposed the use of a plan's own premium in the risk adjustment formula based on a concern that it would undermine the risk adjustment program and create incentives for issuers to avoid enrolling high-cost individuals. Some commenters noted the difficulty of determining whether an issuer's low premium was the result of efficiency, mispricing, or a strategy to gain market share, and that the advantages of using statewide average premium outweigh the possibility that use of a plan's own premium could result in better reflection of cost management. One commenter noted that encouraging issuers to set premiums based on market averages in a state (that is, using statewide average premium) promotes market competition based on value, quality of care provided, and effective care management, not on the basis of risk selection. Other commenters strongly opposed the use of a plan's own premium, as doing so would introduce incentives for issuers to attract lower-risk enrollees because they would no longer have to pay their fair share, or because issuers that traditionally attract high-risk enrollees would be incentivized to increase premiums in order to receive larger risk adjustment payments. Others stated that the use of a plan's own premium would add an extra layer of complexity in estimating risk adjustment transfers, and therefore in premium rate setting, because payments and charges would need to be prorated retrospectively based on the outcome of risk adjustment transfer calculations, but would need to be anticipated prospectively as part of issuers' pricing calculations.

One commenter expressed concern that the risk adjustment payment transfer formula exaggerates plan differences in risk because it does not address plan coding differences.

Response: We agree with the majority of commenters that use of statewide average premium will maintain the integrity of the risk adjustment program by discouraging the creation of benefit designs and marketing strategies to avoid high-risk enrollees and promoting market stability and predictability. The benefits of using statewide average premium as the cost scaling factor in the risk adjustment state payment transfer formula extend beyond its role in maintaining the budget neutrality of the program. Consistent with the statute, under the HHS-operated risk adjustment program, each plan in the risk pool receives a risk adjustment payment or charge designed to take into account the plan's risk compared to a plan with average risk. The statewide average premium reflects the statewide average cost and efficiency level and acts as the cost scaling factor in the state payment transfer formula under the HHS-operated risk adjustment methodology. HHS chose to use statewide average premium to encourage issuers to rate for the average risk, to automatically achieve equality between risk adjustment payments and charges in each benefit year, and to avoid the creation of incentives for issuers to operate less efficiently, set higher prices, or develop benefits designs or create marketing strategies to avoid high-risk enrollees.

HHS considered and again declined in the 2018 Payment Notice to adopt the use of each plan's own premium in the state payment transfer formula.16 As we noted in the 2018 Payment Notice, use of a plan's own premium would likely lead to substantial volatility in transfer results and could result in even higher transfer charges for low-risk, low-premium plans because of the program's budget neutrality. Under such an approach, high-risk, high-premium plans would require even greater transfer payments. If HHS applied a balancing adjustment in favor of these plans to maintain the budget-neutral nature of the program after transfers have been calculated using a plan's own premium, low-risk, low-premium plans would be required to pay in an even higher percentage of their plan-specific premiums in risk adjustment transfer charges due to the need to maintain budget neutrality. Furthermore, payments to high-risk, low-premium plans that are presumably more efficient than high-risk, high-premium plans would be reduced, incentivizing such plans to inflate premiums. In other words, the use of a plan's own premium in this scenario would neither reduce risk adjustment charges for low-cost and low-risk issuers, nor would it incentivize issuers to operate at the average efficiency. Alternatively, application of a balancing adjustment in favor of low-risk, low-premium plans could have the effect of under-compensating high-risk plans, increasing the likelihood that such plans would raise premiums. In addition, if the application of a balancing adjustment was split equally between high-risk and low-risk plans, such an after-the-fact adjustment, would create uncertainty and instability in the market(s), and would incentivize issuers to increase premiums to receive additional risk adjustment payments or to employ risk-avoidance techniques. As such, we agree with the commenters that challenges associated with pricing for transfers based on a plan's own premium would create pricing instability in the market, and introduce incentives for issuers to attract lower-risk enrollees to avoid paying their fair share. We also agree that it is very difficult to determine the reason an issuer has lower premiums than the average, since an issuer's low premium could be the result of efficiency, mispricing, or a strategy to gain market share. In all, the advantages of using statewide average premium outweigh the possibility that the use of a plan's own premium could result in better reflection of care or cost management, given the overall disadvantages, outlined above, of using a plan's own premium. HHS does not agree that use of statewide average premium penalizes efficient issuers or that it rewards issuers for raising rates.

Consistent with the 2018 Payment Notice,17 beginning with the 2018 benefit year, this final rule adopts the 14 percent reduction to the statewide average premium to account for administrative costs that are unrelated to the claims risk of the enrollee population. While low cost plans are not necessarily efficient plans,18 we believe this adjustment differentiates between premiums that reflect savings resulting from administrative efficiency from premiums that reflect healthier-than-average enrollees. As detailed in the 2018 Payment Notice,19 to derive this parameter, we analyzed administrative and other non-claims expenses in the Medical Loss Ratio (MLR) Annual Reporting Form and estimated, by category, the extent to which the expenses varied with claims. We compared those expenses to the total costs that issuers finance through premiums, including claims, administrative expenses, and taxes, and determined that the mean administrative cost percentage in the individual, small group and merged markets is approximately 14 percent. We believe this amount represents a reasonable percentage of administrative costs on which risk adjustment should not be calculated.

We disagree that the HHS-operated risk adjustment methodology does not reflect relative actuarial risk or that the use of statewide average premium indicates otherwise. In fact, the risk adjustment models estimate a plan's relative actuarial risk across actuarial value metal levels, also referred to as “simulated plan liability,” by estimating the total costs a plan is expected to be liable for based on its enrollees' age, sex, hierarchical condition categories (HCCs), actuarial value, and cost-sharing structure. Therefore, this “simulated plan liability” reflects the actuarial risk relative to the average that can be assigned to each enrollee. We then use an enrollee's plan selection and diagnoses during the benefit year to assign a risk score. Although the HHS risk adjustment models are calibrated on national data, and average costs can vary between geographic areas, relative actuarial risk differences are generally similar nationally. The solved coefficients from the risk adjustment models are then used to evaluate actuarial risk differences between plans. The risk adjustment state payment transfer formula then further evaluates the plan's actuarial risk based on enrollees' health risk, after accounting for factors a plan could have rated for, including metal level, the prevailing level of expenditures in the geographic areas in which the enrollees live, the effect of coverage on utilization (induced demand), and the age and family structure of the subscribers. This relative plan actuarial risk difference compared to the state market risk pool average is then scaled to the statewide average premium. The use of statewide average premium as a cost-scaling factor requires plans to assess actuarial risk, and therefore scales transfers to actuarial differences between plans in state market risk pool(s), rather than differences in premium.

We have been continuously evaluating whether improvements are needed to the risk adjustment methodology, and will continue to do so as additional years' data become available. We decline to amend the risk adjustment methodology to include the Care Management Effectiveness index or a similar adjustment at this time. Doing so would be beyond the scope of this rulemaking, which addresses the use of statewide average premium and the operation of the risk adjustment program in a budget-neutral manner. A change of this magnitude would require significant study and evaluation. Although this type of change is not feasible at present, we will examine the feasibility, specificity, and sensitivity of measuring care management effectiveness through enrollee-level EDGE data for the individual, small group and merged markets, and the benefits of incorporating such measures in the risk adjustment methodology in future benefit years, either through rulemaking or other opportunities in which the public can submit comments. We believe that a robust risk adjustment program encourages issuers to adopt incentives to improve care management effectiveness, as doing so would reduce plans' medical costs. As we stated above, use of statewide average premium in the risk adjustment state payment transfer formula incentivizes plans to apply effective care management techniques to reduce losses, whereas use of a plan's own premium could be inflationary as it benefits plans with higher-than-average costs and higher-than-average premiums.

We are sympathetic to commenters' concerns about plan coding differences, and recognize that there is substantial variation in provider coding practices. We are continuing to strengthen the risk adjustment data validation program to ensure that conditions reported for risk adjustment are accurately coded and supported by medical records, and will adjust risk scores (and subsequently, risk adjustment transfers) beginning with 2017 benefit year data validation results to encourage issuers to continue to improve the accuracy of data used to compile risk scores and preserve confidence in the HHS-operated risk adjustment program.

Comment: Some commenters provided suggestions to improve the risk adjustment methodology, such as different weights for metal tiers, multiple mandatory data submission deadlines, reducing the magnitude of risk scores across the board, and fully removing administrative expenses from the statewide average premium. One commenter stated that, while it did not conceptually take issue with the use of statewide average premium, the payment transfer formula under the HHS-operated risk adjustment methodology creates market distortions and causes overstatement of relative risk differences among issuers. This commenter cited concerns with the use of the Truven MarketScan® data to calculate plan risk scores under the HHS risk adjustment models, and suggested incorporating an adjustment to the calculation of plan risk scores until the MarketScan® data is no longer used.

A few commenters stressed the importance of making changes thoughtfully and over time, and one encouraged HHS to actively seek improvements to avoid unnecessary litigation. Several commenters, while supportive of the proposed rule and its use for the 2018 benefit year, generally stated that the risk adjustment methodology should continue to be improved prospectively. Another commenter stated that the proposed rule did not do enough to improve the risk adjustment program, and encouraged HHS to review and consider suggestions to improve the risk adjustment methodology in order to promote stability and address the concerns raised in lawsuits other than the New Mexico case. One commenter further requested that HHS reopen rulemaking proceedings, reconsider, and revise the Payment Notices for the 2017 and 2019 benefit years under section 553(e) of the Administrative Procedure Act.

Response: We appreciate the feedback on potential improvements to the risk adjustment program, and will continue to consider the suggestions, analysis, and comments received from commenters for potential changes to future benefit years. This rulemaking is intended to provide additional explanation regarding the operation of the program in a budget-neutral manner and the use of statewide average premium for the 2018 benefit year, consistent with the February 2018 decision of the district court. It also requires an expedited timeframe to maintain stability in the health insurance markets following the district court's vacatur of the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2018 benefit year. We intend to continue to evaluate approaches to improve the risk adjustment models' calibration to reflect the individual, small group and merged markets actuarial risk and review additional years' data as they become available to evaluate all aspects of the HHS-operated risk adjustment methodology. We also continue to encourage issuers to submit EDGE server data earlier and more completely for future benefit years. However, the scope of the proposed rule was limited to the use of statewide average premium and the budget-neutral nature of the risk adjustment program for the 2018 benefit year, and consequently, we decline to adopt the various suggestions offered by commenters regarding potential improvements to the 2018 benefit year HHS-operated risk adjustment methodology as to other issues because they are outside the scope of this rule.

We reiterate that HHS is always considering possible ways to improve the risk adjustment methodology for future benefit years. For example, in the 2018 Payment Notice, based on comments received for the 2017 Payment Notice and the March 31, 2016, HHS-Operated Risk Adjustment Methodology Meeting Discussion Paper,20 HHS made multiple adjustments to the risk adjustment models and state payment transfer formula, including reducing the statewide average premium by 14 percent to account for the proportion of administrative costs that do not vary with claims, beginning with the 2018 benefit year.21 HHS also modified the risk adjustment methodology by incorporating a high-cost risk pool calculation to mitigate residual incentive for risk selection to avoid high-cost enrollees, to better account for the average risk associated with the factors used in the HHS risk adjustment models, and to ensure that the actuarial risk of a plan with high-cost enrollees is better reflected in risk adjustment transfers to issuers with high actuarial risk.22 Other recent changes made to the HHS-operated risk adjustment methodology include the incorporation of a partial year adjustment factor and prescription drug utilization factors.23 Furthermore, as outlined above, HHS stated in the 2019 Payment Notice that it would recalibrate the risk adjustment model using 2016 enrollee-level EDGE data to better reflect individual, small group and merged market populations.24 We also consistently seek methods to support states' authority and provide states with flexible options, while ensuring the success of the risk adjustment program.25 We respond to comments regarding options available to states with respect to the risk adjustment program below. We appreciate the commenters' input and will continue to examine options for potential changes to the HHS-operated risk adjustment methodology in future notice with comment rulemaking.

The requests related to the 2017 and 2019 benefit year rulemakings are outside the scope of the proposed rule and this final rule, which is limited to the 2018 benefit year.

Comment: One commenter suggested that states should have broad authority to cap and limit risk adjustment transfers and charges as necessary, stating that the requirements associated with the flexibility HHS granted to states to request a reduction to risk adjustment transfers beginning in 2020 are too onerous and unclear. The commenter noted that state regulators know their markets best and should have the discretion and authority to implement their own remedial measures without seeking HHS's permission. Conversely, one commenter specifically supported the state flexibility policy set forth in § 153.320(d). A few commenters requested that states be allowed to establish alternatives to statewide average premium, with one suggesting that this change begin with the 2020 benefit year, and providing as an example the idea that HHS could permit states to aggregate the average premiums of two or more distinct geographic markets within a state.

Response: HHS continually seeks to provide states with flexibility to determine what is best for their state markets. Section 1343 of the PPACA provides states authority to operate their own state risk adjustment programs. Under this authority, a state remains free to elect to operate the risk adjustment program and tailor it to its markets, which could include establishing alternatives to the statewide average premium methodology or aggregating the average premiums of two or more distinct geographic markets within a state. If a state does not elect to operate the risk adjustment program, HHS is required to do so.26 No state elected to operate the risk adjustment program for the 2018 benefit year; therefore, HHS is responsible for operating the program in all 50 states and the District of Columbia.

In the 2019 Payment Notice, HHS adopted § 153.320(d) to provide states the flexibility, when HHS is operating the risk adjustment program, to request a reduction to the otherwise applicable risk adjustment transfers in the individual, small group, or merged markets by up to 50 percent.27 This flexibility was established to provide states the opportunity to seek state-specific adjustments to the HHS-operated risk adjustment methodology without the necessity of operating their own risk adjustment programs. It is offered beginning with the 2020 benefit year risk adjustment transfers and, since it involves an adjustment to the transfers calculated by HHS, it will require review and approval by HHS. States requesting such reductions must substantiate the transfer reduction requested and demonstrate that the actuarial risk differences in plans in the applicable state market risk pool are attributable to factors other than systematic risk selection.28 The process will give HHS the necessary information to evaluate the flexibility requests. We appreciate the comments offered on this flexibility, but note that they are outside the scope of the proposed rule, which was limited to the 2018 benefit year and did not propose any changes to the process established in § 153.320(d). However, we will continue to consider commenter feedback on the process, along with any lessons learned from 2020 benefit year requests.

HHS has consistently acknowledged the role of states as primary regulators 29 of their insurance markets, and we continue to encourage states to examine local approaches under state legal authority as they deem appropriate.

Comment: One commenter detailed the impact of the HHS-operated risk adjustment methodology on the commenter, the CO-OP program's general struggles, and the challenges faced by some non-CO-OP issuers, stating that this is evidence that the HHS-operated risk adjustment methodology is flawed. The commenter urged HHS to make changes discussed above to the methodology to address what it maintains are unintended financial impacts on small issuers that are required to pay large risk adjustment charges, and also challenged the assertion that the current risk adjustment methodology is predictable.

Response: HHS previously recognized and acknowledged that certain issuers, including a limited number of newer, rapidly growing, or smaller issuers, owed substantial risk adjustment charges that they did not anticipate in the initial years of the program. HHS has regularly discussed with issuers and state regulators ways to encourage new participation in the health insurance markets and to mitigate the effects of substantial risk adjustment charges. Program results discussed earlier have shown that the risk adjustment methodology has worked as intended, that risk adjustment transfers correlate with the amount of paid claims rather than issuer size, and that no systemic bias is found when risk adjustment receipts are analyzed by health plan member months. We created an interim risk adjustment reporting process, beginning with the 2015 benefit year, to provide issuers and states with preliminary information about the applicable benefit year's geographic cost factor, billable member months, and state averages such as monthly premiums, plan liability risk score, allowable rating factor, actuarial value, and induced demand factors by market. States may pursue local approaches under state legal authority to address concerns related to insolvencies and competition, including in instances where certain state laws or regulations differentially affect smaller or newer issuers. In addition, as detailed above, beginning with the 2020 benefit year, states may request a reduction in the transfer amounts calculated under the HHS-operated methodology to address state-specific rules or market dynamics to more precisely account for the expected cost of relative risk differences in the state's market risk pool(s).

Finally, HHS has consistently sought to increase the predictability and certainty of transfer amounts in order to promote the premium stabilization goal of the risk adjustment program. Statewide average premium provides greater predictability of an issuer's final risk adjustment receivables than use of a plan's own premium, and we disagree with comments stating that the use of a plan's own premium in the risk adjustment transfer formula would result in greater predictability in pricing. As discussed previously, if a plan's own premium is used as a scaling factor, risk adjustment transfers would not be budget neutral. After-the-fact adjustments would be necessary in order for issuers to receive the full amount of calculated payments, creating uncertainty and lack of predictability.

After consideration of the comments received, this final rule adopts the HHS-operated risk adjustment methodology for the 2018 benefit year which utilizes statewide average premium and operates the program in a budget-neutral manner, as established in the final rules published in the March 23, 2012 and the December 22, 2016 editions of the Federal Register.

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.).

The proposed rule and this final rule were published in light of the February 2018 district court decision described above that vacated the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2014-2018 benefit years. This final rule adopts the HHS-operated risk adjustment methodology for the 2018 benefit year, maintaining the use of statewide average premium as the cost-scaling factor in the HHS-operated risk adjustment methodology and the continued operation of the program in a budget-neutral manner, to protect consumers from the effects of adverse selection and premium increases that would result from issuer uncertainty. The Premium Stabilization Rule, previous Payment Notices, and other rulemakings noted above provided detail on the implementation of the risk adjustment program, including the specific parameters applicable for the 2018 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 final rule is a major rule under the Congressional Review Act.

This final rule offers further explanation of budget neutrality and the use of statewide average premium in the risk adjustment state payment transfer formula when HHS is operating the permanent risk adjustment program established by section 1343 of the PPACA on behalf of a state for the 2018 benefit year. We note that we previously estimated transfers associated with the risk adjustment program in the Premium Stabilization Rule and the 2018 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 estimated risk adjustment transfers for the 2018 benefit year are $4.8 billion. As such, we also incorporate into this final rule the RIA in the 2018 Payment Notice proposed and final rules.30 This final rule is not subject to the requirements of Executive Order 13771 (82 FR 9339, February 3, 2017) because it is expected to result in no more than de minimis costs.

In a final rule published on October 23, 2018, NMFS specified a 2018 limit of 2,000 t of longline-caught bigeye tuna for the U.S. Pacific Island territories of American Samoa, Guam, and the CNMI (83 FR 53399). NMFS allows each territory to allocate up to 1,000 t of the 2,000 t limit to U.S. longline fishing vessels identified in a valid specified fishing agreement.

On November 19, 2018, NMFS received from the Council a specified fishing agreement between the government of American Samoa and Quota Management, Inc. (QMI). The Council's Executive Director advised that the specified fishing agreement was consistent with the criteria set forth in 50 CFR 665.819(c)(1). NMFS reviewed the agreement and determined that it is consistent with the Pelagic FEP, the Magnuson-Stevens Fishery Conservation and Management Act, implementing regulations, and other applicable laws.

In accordance with 50 CFR 300.224(d) and 50 CFR 665.819(c)(9), vessels identified in the agreement may retain and land bigeye tuna in the western and central Pacific Ocean under the American Samoa limit. NMFS will begin attributing bigeye tuna caught by vessels identified in the agreement to American Samoa starting on December 10, 2018. This is seven days before December 17, 2018, which is the date NMFS forecasted the fishery would reach the CNMI bigeye tuna allocation limit. If NMFS determines that the fishery will reach the American Samoa 1,000-t attribution, we would restrict the retention of bigeye tuna caught by vessels identified in the agreement, unless the vessels are included in a subsequent specified fishing agreement with another U.S. territory, and we would publish a notice to that effect in the Federal Register.