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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations
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With respect to the provisions being repromulgated without change: These provisions of the final rule have been operational since the publication of the 2016 rule. As a result, as noted in the proposed rule, recipients, including small entities, will not need to make any changes to their current practice in response to this final rule. Accordingly, there should be no economic impact associated with the repromulgation of these provisions.
In light of the foregoing, the Department anticipates that this final rule will have no impact beyond providing information to the public. The Department anticipates that this information will allow affected entities to better deploy resources in line with established requirements for its recipients, while reducing administrative burdens related to litigation and waiver requests. Thus, grantees will be able to better prioritize resources towards providing services consistent with their mission and grant.
As a result, the Department has determined, and the Secretary certifies, that this final rule will not have a significant impact on the operations of a substantial number of small entities.
The Department asked for comments on the impact of the proposed rule on small entities under the Regulatory Flexibility Act, as well as the comparative effects and impacts of the situation if the Department were to fully enforce the provisions of the 2016 rule as compared to the situation if the Department were to fully exercise its enforcement discretion with respect to the 2016 rule. The Department received a number of comments on the RFA
analysis.39
Comments: Several commenters opposing the proposed rule contended that the Department had failed to conduct the required cost-benefit analysis necessary to sustain the proposed rule. Some commenters contended that the Department did not properly conduct a cost benefit and risk analysis of potential affected entities.
Several commenters asserted that such a cost-benefit analysis would have to consider the health and financial costs from the proposed rule. One commenter alleged the proposed rule lacked a holistic analysis of risks and benefits of the proposed rule to small business or the foster care system.
39 Many commenters disagreed with the Departments decision to exercise enforcement discretion with respect to the provisions of the 2016
rule, pending repromulgation, as a result of its concerns about the rules compliance with the Regulatory Flexibility Act. As such comments are beyond the scope of the proposed rule, the Department does not respond to them.

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Response: The Department respectfully disagrees with commenters.
With respect to the RFA, the Department did fully consider whether the proposed rules changes would have a significant impact on a substantial number of small entities. It reviewed the evidence and concluded that it would notand provided a statement in the proposed rule with the factual bases for its conclusion. Very few commenters addressed the effect of the proposed rule on small entities, with most arguing that the Department should have considered the impact on individuals and entities other than the Departments recipients.
However, the RFA requires the Department to consider the impact only on small entities directly regulated by the rule; it does not require consideration of the rule on all small entities potentially indirectly affected by it. See National Women, Infants, and Children Grocers Assn, 416 F. Supp. 2d at 108110 rule only applied to state agencies, not to small businesses, such as WIC-only vendors, so federal agency properly certified that rule would not have a significant impact on a substantial number of small entities.
Nor does the RFA require consideration of the impact on individuals since individuals do not constitute small entities as such term is defined in the RFA.
Unfunded Mandates Reform Act Section 202 of the Unfunded Mandates Reform Act of 1995
Unfunded Mandates Act, 2 U.S.C.
1532, requires that covered agencies prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. Currently, that threshold is approximately $154 million. If a budgetary impact statement is required, section 205 also requires covered agencies to identify and consider a reasonable number of regulatory alternatives before promulgating a rule.
The Department has determined that this final rule will not result in expenditures by State, local, and tribal governments, or by the private sector, of $154 million or more in any one year.
Accordingly, the Department has not prepared a budgetary impact statement or specifically addressed the regulatory alternatives considered.
Executive Order 13132, Federalism Executive Order 13132 establishes certain requirements that an agency must meet when it issues a rule that
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imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Executive Order 13132, 64 FR 43255 Aug. 4, 1999. The Department does not believe that this final rule would 1 impose substantial direct requirements costs on State or local governments; 2 preempt State law; or 3 otherwise have Federalism implications.
Executive Order 12866 directs that significant regulatory actions avoid undue interference with State, local, or tribal governments, in the exercise of their governmental functions. Executive Order 12866 at 6a3B. Executive Order 13175 further directs that Agencies respect Indian tribal selfgovernment and sovereignty, honor tribal treaty and other rights, and strive to meet the responsibilities that arise from the unique legal relationship between the Federal Government and Indian tribal governments. Executive Order 13175 at 2a. The Department does not believe that the final rule would implicate the requirements of Executive Orders 12866 and 13175 with respect to tribal sovereignty.
The final rule maintains the full force of statutory civil rights laws protections against discrimination, but does not attempt to impose a ceiling on how those protections may be observed by States. Consistent with their other constitutional and legal obligations, State and local jurisdictions will continue to have the flexibility to impose additional civil rights protections. Therefore, the Department has determined that this final rule does not have sufficient Federalism implications to warrant the preparation of a Federalism summary impact statement under Executive Order 13132, and that the rule would not implicate the requirements of Executive Orders 12866 and 13175 with respect to tribes.
The Department received several comments on its Executive Order 13132
analysis.
Comments: One commenter argued that the Department had not complied with Executive Order 13132. Other commenters claimed that the proposed rule creates conflicts between federal, state, and local law.
Response: The Department respectfully disagrees. The proposed rule, and this final rule, do not impose any substantial direct requirements on State and local governments that do not already exist, nor does it preempt or conflict with State or local laws. A
conflict arises when an entity cannot comply with two different laws. The Departments action here merely removes certain regulatory requirements
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