250 Federal Register / Vol. 86, No. 2 / Tuesday, January 5, 2021 / Rules and Regulations 

requirements. Comments in response to the 

proposed rule noted the difficulties that 

would be associated with creating numerous 

separately managed accounts solely to evade 

the comparatively low $50,000 MTA for 

separately managed accounts. The MTA 

Final Rule also defines separately managed 

account so that the swaps of such account are 

not subject to a netting of initial or variation 

margin obligations. This potentially provides 

further disincentive to create separately 

managed accounts solely for the purpose of 

evading the $50,000 MTA level for such 

accounts. 

IV. Conclusion 

Mitigating systemic risk to the U.S. 

financial system was a primary objective of 

the Dodd-Frank Act in 2010, and of 

subsequent Commission rulemakings to 

implement Dodd-Frank, including the 

Margin Rule adopted in 2016. The 

Commission must remain committed to the 

Margin Rule and vigilant for any large pool 

of uncollateralized, uncleared swaps 

exposure. Today’s targeted final rules, which 

codify existing practices, include embedded 

backstops, and provide tailored operational 

enhancements to the Margin Rule, are 

unlikely to present systemic risks. 

I thank staff of the Market Participants 

Division for their work on these final rules. 

[FR Doc. 2020–27736 Filed 1–4–21; 8:45 am] 

BILLING CODE 6351–01–P 

AGENCY FOR INTERNATIONAL 

DEVELOPMENT 

22 CFR Part 212 

RIN 0412–AB00 

Procedures for the Review and 

Clearance of USAID’s Guidance 

Documents 

AGENCY: U.S. Agency for International 

Development (USAID). 

ACTION: Final rule. 

SUMMARY: This final rule amends 

USAID’s regulations to implement 

Executive Order (E.O.) 13891, 

Promoting the Rule of Law Through 

Improved Agency Guidance Documents. 

This rule sets forth processes and 

procedures for USAID to issue guidance 

documents as defined in the E.O. in a 

manner consistent with the 

requirements of Federal law applicable 

to all employees involved in inherently 

governmental deliberative decisionmaking on policy and employees 

involved in related administrative 

processes. 

DATES: This final rule is effective 

January 5, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Tyrone K. Brown, Guidance Mailbox, 

(202) 355–7450, tybrown@usaid.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

On October 9, 2019 (84 FR 55235), 

President Trump issued Executive 

Order (E.O.) 13891, Promoting the Rule 

of Law Through Improved Agency 

Guidance Documents. The E.O. asserts 

that, except as mandated by applicable 

law or incorporated into a binding 

contract or agreement, Federal 

Departments and Agencies should treat 

guidance documents as non-binding on 

outside entities both in law and 

practice. To further the principle that 

Federal guidance should be transparent 

and made readily available to the 

public, Section 3 of the E.O. requires 

that Departments and Agencies make 

guidance documents available on a 

single, searchable, indexed public 

website. Section 3 also requires that 

Departments and Agencies review their 

guidance documents and, consistent 

with applicable law, rescind those that 

should no longer be in effect. Lastly, 

Section 4 requires that each Department 

and Agency put in place processes and 

procedures for issuing guidance 

documents as defined by the E.O. 

In accordance with that direction, to 

codify our processes and procedures for 

guidance documents, the U.S. Agency 

for International Development (USAID) 

is amending our Automated Directives 

System (ADS) to update ADS Chapter 

501, which governs the clearance 

process for reviewing and issuing 

Agency policy documents, to include 

guidance documents as defined by the 

E.O. USAID’s formal clearance process 

ensures that all guidance documents 

receive legal review and, when 

appropriate, review and approval from 

USAID’s Regulatory Reform Officer, 

who is the Agency’s Deputy 

Administrator. 

Before the Agency issues guidance 

documents as defined by E.O. 13891, we 

must review them to ensure they are 

written in plain language and do not 

impose any substantive legal 

requirements above and beyond statute 

or regulation. If a guidance document 

purports to describe, approve, or 

recommend specific conduct not 

required by existing laws, statutes, and 

regulations, then it must include a clear 

and prominent statement that the 

contents of the guidance document do 

not have the force and effect of law and 

are not meant to bind the public in any 

way, and that the guidance document is 

intended only to provide clarity to the 

public regarding existing requirements 

under the law or internal Agency 

policies and procedures applicable to 

our staff. 

According to E.O. 13891, guidance 

documents shall also be subject to 

notice-and-comment procedures. The 

E.O. mandates that Departments and 

Agencies shall publish a notice in the 

Federal Register to announce that a 

draft of the proposed guidance 

document is publicly available; shall 

post the draft guidance document on the 

guidance portal of the Department or 

Agency; shall invite public comment on 

the draft document for a minimum of 30 

days; and shall prepare and post a 

public response to major concerns 

raised in the comments, as appropriate, 

on its guidance portal, when the 

Department or Agency finalizes and 

issues the guidance document. 

Consistent with E.O. 13891, USAID 

proposes procedures to allow the public 

to petition for the modification or 

withdrawal of an active guidance 

document posted on the Agency’s 

guidance portal. USAID’s guidance 

portal will provide clear and specific 

instructions on how to request the 

modification or withdrawal of an active 

guidance document. 

The Office of the General Counsel 

(GC) at USAID has determined that the 

Agency has no ‘‘guidance documents’’ 

as defined under E.O. 13891. USAID’s 

internal guidance materials do not 

qualify as ‘‘guidance documents’’ under 

the E.O., nor do grant and contract 

solicitations and awards; Country and 

Regional Development Cooperation 

Strategies; Agency programmatic 

Policies and Strategies; and purely 

internal Agency policies not intended to 

have substantial effect on the behavior 

of regulated parties, such as Chapters of 

our ADS. The procedures contained in 

this final rule apply to all guidance 

documents, which USAID defines as 

any statement of Agency policy or 

interpretation that concerns a statute, 

regulation, or technical matter within 

the jurisdiction of the Agency that is 

intended to have general applicability 

and future effect on the behavior of 

regulated parties, but which is not 

intended to have the force or effect of 

law in its own right and is not otherwise 

required by statute to satisfy the 

rulemaking procedures of the 

Administrative Procedure Act. 

Notice and Comment Not Required 

This rule relates to internal Agency 

management. Therefore, pursuant to 

Section 553(a)(2) of Title 5 of the United 

States Code (U.S.C.), notice of proposed 

rulemaking and opportunity to 

comment are not required. 

Procedural Requirements 

The Office of Management and Budget 

(OMB) has determined that this 

regulatory action does not meet the 

criteria for significant regulatory action 


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Federal Register / Vol. 86, No. 2 / Tuesday, January 5, 2021 / Rules and Regulations 251 

pursuant to E.O. 12866, Regulatory 

Planning and Review. Additionally, 

because this rule does not meet the 

definition of a significant regulatory 

action, it does not trigger the 

requirements contained in E.O. 13771. 

The regulations added by this rule are 

intended to improve the internal 

management of USAID. As such, it is for 

the use of USAID personnel only and is 

not intended to, and does not, create 

any right or benefit, substantive or 

procedural, enforceable at law or in 

equity by any party against the United 

States, its Departments and Agencies or 

other entities, its officers or employees, 

or any other person. Accordingly, we 

expect the economic impact of this rule, 

if any, to be minimal. 

Regulatory Flexibility Act 

Because notice-and-comment 

rulemaking is not necessary for this 

rule, the provisions of the Regulatory 

Flexibility Act, Section 604 of Title 5 of 

the U.S.C. do not apply. 

Paperwork Reduction Act 

This final rule imposes no new 

reporting or recordkeeping requirements 

that necessitate clearance by OMB. 

List of Subjects in 22 CFR Part 212 

Administrative practice, Freedom of 

Information Act (FOIA), Procedures. 

In consideration of the foregoing, and 

under the authority of E.O. 13891, the 

U.S. Agency for International 

Development (USAID) amends 22 CFR 

part 212 as follows: 

■ 1. The authority citation for part 22 

continues to read as follows: 

Authority: Pub. L. 114–185, 130 Stat. 538 

■ 2. Add subparts N and O, consisting 

of § 212.25 through 212.40, to read as 

follows: 

Sec. 

Subpart N—Rulemaking 

212.25. Responsibilities. 

Subpart O—Procedures for Guidance 

Documents 

212.26. General. 

212.27. Review and clearance by the Office 

of the Bureau for Management. 

212.28. Requirements for clearance. 

212.29. Public access to effective guidance 

documents. 

212.30. Good-faith cost estimates. 

212.31. Approved procedures for guidance 

documents identified as ‘‘significant’’ or 

‘‘otherwise of importance to the 

Agency’s interests.’’ 

212.32. Definitions of ‘‘significant guidance 

document’’ and guidance documents that 

are ‘‘otherwise of importance to the 

Agency’s interests.’’ 

212.33. Designation procedures. 

212.34. Notice-and-comment procedures. 

212.35. Petitions for guidance. 

212.36. Rescinded guidance. 

212.37. Exigent circumstances. 

212.38. Reports to Congress and the 

Government Accountability Office. 

212.39. No judicial review or enforceable 

rights. 

212.40. Use of guidance documents. 

Subpart N—Rulemaking 

§ 212.25 Responsibilities. 

(a) The Deputy Administrator serves 

as USAID’s Regulatory Reform Officer 

(RRO). The RRO oversees 

implementation of regulatory-reform 

initiatives and policies to ensure USAID 

effectively manages regulatory burdens, 

consistent with applicable law. 

(b) The Assistant Administrator for 

Management serves as USAID’s 

Regulatory Policy Officer (RPO) and 

provides oversight for the Agency’s 

internal rulemaking process. The RPO 

must be involved in each stage of the 

regulatory process to foster the 

development of effective, innovative, 

and least-burdensome regulations. 

(c) The Office of Management Policy, 

Budget, and Performance in the Bureau 

for Management (M) coordinates the 

rulemaking process and ensures the 

Agency’s rulemaking activities comply 

with all statutory and regulatory 

requirements. 

(d) The Initiating Program Office (IPO) 

at USAID is the Bureau or Independent 

Office (B/IO) that provides subjectmatter expertise on regulatory matters 

that affect the IPO’s programs. 

(e) The Office of the General Counsel 

at USAID provides guidance on legal 

and procedural requirements during the 

Agency’s rulemaking process. 

Subpart O—Guidance Procedures 

§ 212.26 General. 

(a) This subpart governs all employees 

of the United States Agency for 

International Development (USAID) 

involved in any phase of issuing Agency 

guidance documents as defined by 

under E.O. 13891. 

(b) This subpart applies to all 

guidance documents issued by all 

components of the Agency after January 

5, 2021. 

(c) For purposes of this subpart, the 

term ‘‘guidance document’’ includes 

any statement of Agency policy or 

interpretation that concerns a statute, 

regulation, or technical matter within 

the jurisdiction of the Agency that is 

intended to have general applicability 

and future effect, but is not intended to 

have the force or effect of law in its own 

right and is not otherwise required by 

statute to be implemented through the 

rulemaking procedures specified in 5 

U.S.C. 553. The term is not confined to 

formal written documents; guidance 

may come in a variety of forms, 

including (but not limited to) letters, 

memoranda, circulars, bulletins, and 

advisories, and may include video, 

audio, and web-based formats. See OMB 

Bulletin 07–02, Agency Good Guidance 

Practices. 

(d) This subpart does not apply to the 

following: 

(1) Rules exempt from rulemaking 

requirements under 5 U.S.C. 553(a); 

(2) Rules of Agency organization, 

procedure, or practice; 

(3) Decisions of Agency adjudications 

under 5 U.S.C. 554 or similar statutory 

provisions; 

(4) Internal executive management 

legal advice or legal advisory opinions 

addressed to executive officials; 

(5) Agency statements of specific 

applicability, including advisory or 

legal opinions directed to particular 

parties about circumstance-specific 

questions (e.g., case or investigatory 

letters responding to complaints, 

warning letters), notices regarding 

particular locations or facilities (e.g., 

guidance that pertains to the use, 

operation, or control of a U.S. 

Government facility or property), and 

correspondence with individual persons 

or entities (e.g., Congressional 

correspondence), except documents 

ostensibly directed to a particular party 

but designed to guide the conduct of the 

broader regulated public; 

(6) Legal briefs, other court filings, or 

positions taken in litigation or 

enforcement actions; 

(7) Agency statements that do not set 

forth a policy on a statutory, regulatory, 

or technical issue or an interpretation of 

a statute or regulation, including 

speeches and individual presentations, 

editorials, media interviews, press 

materials, or Congressional testimony 

that do not set forth for the first time a 

new regulatory policy; 

(8) Guidance pertaining to military or 

foreign-affairs functions; 

(9) Grant solicitations and awards; 

(10) Contract solicitations and awards; 

or 

(11) Purely internal Agency guidance 

policies, such as Chapters of the ADS 

directed solely to USAID’s employees, 

or to other Federal Departments and 

Agencies not intended to have 

substantial future effect on the behavior 

of regulated parties; USAID’s Country/ 

Regional Development Cooperation 

Strategies; the Agency’s programmatic 

Policies and Strategies; Acquisition and 

Assistance Policy Directives (AAPDs); 

Application Guidelines; COVID–19 

Guidance; Food for Peace Information 

Bulletins (FFPIBs); Guidance and Tools 


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252 Federal Register / Vol. 86, No. 2 / Tuesday, January 5, 2021 / Rules and Regulations 

for Global Food-Security Programs; 

Procurement Executive Bulletins (PEBs); 

Standard Provisions for the Protecting 

Life in Global Health Assistance 

(PLGHA) Policy; and documents in the 

USAID Policy Registry. 

212.40. 

§ 212.27 Review and clearance by the 

Office of Management Policy, Budget, and 

Performance in the Bureau for 

Management. 

All USAID guidance documents, as 

defined by E.O. 13891 and § 212.26, 

require review and clearance in 

accordance with this subpart. The 

Bureau for Management (M Bureau) 

must review and clear any guidance a 

Bureau or Independent Office within 

USAID proposes to issue. 

§ 212.28 Requirements for clearance. 

USAID’s review and clearance of 

guidance documents shall ensure that 

each one that a B/IO within the Agency 

proposes to issue satisfies the following 

requirements: 

(a) The guidance document complies 

with all relevant statutes and 

regulations (including any statutory 

deadlines for the Agency’s action); 

(b) The guidance document identifies 

or includes the following: 

(1) The term ‘‘guidance’’ or its 

functional equivalent; 

(2) The issuing B/IO within the 

Agency; 

(3) A unique identifier, including, at 

a minimum, the date of issuance and 

title of the document and a Regulation 

Identifier Number (RIN), if applicable; 

(4) The activity or entities to which 

the guidance applies; 

(5) Citations to applicable statutes and 

regulations; 

(6) A statement that notes whether the 

guidance is intended to revise or replace 

any previously issued guidance and, if 

so, sufficient information to identify the 

previously issued guidance; and 

(7) A short summary at the top of the 

document of the subject matter covered 

in the guidance document. 

(c) The guidance document avoids 

using mandatory language, such as 

‘‘shall,’’ ‘‘must,’’ ‘‘required,’’ or 

‘‘requirement,’’ unless the language is 

describing an established statutory or 

regulatory requirement, or is addressed 

to USAID’s staff and will not foreclose 

the Agency’s consideration of positions 

advanced by affected private parties; 

and 

(d) The guidance document is written 

in plain and understandable English. 

All guidance documents should include 

a clear and prominent statement to 

declare that the contents of the 

document do not have the force and 

effect of law and are not meant to bind 

the public in any way, and the 

document is intended only to provide 

clarity to the public regarding existing 

requirements under the law or USAID’s 

policies. 

§ 212.29 Public access to effective 

guidance documents. 

Each B/IO within USAID responsible 

for issuing guidance documents shall do 

the following: 

(a) Ensure all effective guidance 

documents, identified by a unique 

identifier that includes, at a minimum, 

the document’s title and date of 

issuance or revision and its RIN, if 

applicable, are on USAID’s guidance 

portal in a single, searchable, indexed 

database and are available to the public 

in accordance with 5 U.S.C. 552(a)(2); 

(b) Note on USAID’s guidance portal 

that guidance documents lack the force 

and effect of law, except as authorized 

by law and are not meant to bind the 

public in anyway; 

(c) Maintain and advertise USAID’s 

guidance portal as a means for the 

public to comment electronically on any 

guidance documents that are subject to 

the notice-and-comment procedures 

described in § 212.34 and to submit 

requests electronically for the issuance, 

reconsideration, modification, or 

rescission of guidance documents in 

accordance with § 212.26; and 

(d) The Bureau for Management is the 

office designated to receive and address 

complaints from the public that USAID 

is not following the requirements of 

OMB’s Good Guidance Bulletin, or is 

improperly treating a guidance 

document as a binding requirement. 

§ 212.30 Good-faith cost estimates. 

Even though not legally binding, some 

Agency guidance could result in a 

substantial economic impact. For 

example, the issuance of Agency 

guidance could induce private parties to 

alter their conduct to conform to 

recommended standards or practices, 

such that they could incur costs beyond 

the costs of complying with existing 

statutes and regulations. While it might 

be difficult to predict with precision the 

economic impact of voluntary guidance, 

to the extent practicable the proposing 

B/IO within USAID shall make a goodfaith effort to estimate the likely 

economic cost impact of the guidance 

document to determine whether it might 

qualify as ‘‘significant.’’ When a B/IO is 

assessing or explaining whether it 

believes a guidance document is 

significant, it should, at a minimum, 

provide the same level of analysis that 

would be required for a determination 

under the Congressional Review Act 

(M–19–14), Guidance on Compliance 

with the Congressional Review Act, that 

the guidance document is major. When 

USAID determines that a guidance 

document will be ‘‘economically 

significant,’’ the proposing B/IO should 

conduct and publish a regulatoryimpact analysis of the sort that would 

accompany an economically significant 

rulemaking, to the extent reasonably 

possible (in conformance with E.O. 

12866). 

§ 212.31 Approval procedures for 

guidance documents identified as 

‘‘significant’’ or ‘‘otherwise of importance to 

the Agency’s interests.’’ 

(a) For guidance a USAID B/IO 

proposes to issue, if there is a 

reasonable possibility a guidance 

document could be as ‘‘significant’’ or 

‘‘otherwise of importance to the 

Agency’s interests’’ within the meaning 

of § 212.31, or if the B/IO is uncertain 

whether the guidance could qualify as 

such, the B/IO should email a copy of 

the proposed guidance document (or a 

summary of it) to the M Bureau for 

review and further direction before 

issuance. 

(b) As with significant regulations, 

after appropriate internal consultation 

and review, the M Bureau will submit 

significant guidance documents that are 

otherwise of importance to the Agency’s 

interests to the Office of Information 

and Regulatory Affairs (OIRA) within 

OMB for review and designation. 

(c) If OMB/OIRA determines a 

guidance document from a USAID B/IO 

not to be either significant or otherwise 

of importance to the Agency’s interests 

within the meaning of § 212.31, the 

Bureau for Management may proceed 

with issuance. For each guidance 

document coordinated through the 

Office of the Administrator, the issuing 

B/IO should include a statement in the 

Action Memorandum to indicate that 

the OMB/OIRA has reviewed and 

cleared the guidance document in 

accordance with this process. 

§ 212.32 Definitions of ‘‘significant 

guidance document’’ and guidance 

documents that are ‘‘otherwise of 

importance to the Agency’s interests.’’ 

(a) The term ‘‘significant guidance 

document’’ means a guidance document 

USAID will disseminate to regulated 

entities or the general public and that 

might reasonably be anticipated: 

(1) To lead to an annual effect on the 

U.S. economy of $100 million or more, 

or adversely affect in a material way the 

U.S. economy, a sector of the U.S. 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, or tribal 

governments or communities; 


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Federal Register / Vol. 86, No. 2 / Tuesday, January 5, 2021 / Rules and Regulations 253 

(2) To create serious inconsistency or 

otherwise interfere with an action taken 

or planned by another Federal 

Department or Agency; 

(3) To alter materially the budgetary 

impact of entitlements, grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or 

(4) To raise novel legal or policy 

issues that arise out of legal mandates, 

the President’s priorities, or the 

principles set forth in E.O. 12866, as 

further amended. 

(b) The term ‘‘significant guidance 

document’’ does not include the 

categories of documents excluded by 

§ 212.26 or any other category of 

guidance documents exempted in 

writing by OMB/OIRA. 

(c) OMB/OIRA must review 

significant and economically significant 

guidance documents under E.O. 12866 

before issuance, and they must 

demonstrate compliance with the 

applicable requirements for regulations 

or rules, including significant regulatory 

actions, set forth in E.O. 12866, E.O. 

13563, E.O. 13609, E.O. 13771, and E.O. 

13777. 

(d) Even if not ‘‘significant,’’ USAID 

will consider a guidance document of 

regulatory impact as ‘‘otherwise of 

importance to the Agency’s interests’’ 

within the meaning of this paragraph if 

it might reasonably be anticipated: 

(1) To relate to a major program, 

policy, or activity of the Agency or a 

high-profile issue that is pending for 

decision before the Agency; 

(2) To involve one of the 

Administrator’s top policy priorities; 

(3) To garner significant press or 

Congressional attention; or 

(4) To raise significant questions or 

concerns from constituencies of 

importance to the Agency, such as 

Committees of Congress, States or 

Indian tribes, the White House or other 

Departments and Agencies of the 

Executive Branch, courts, consumer or 

public-interest groups, or leading 

representatives of industry. 

(e) As noted in paragraphs (a) through 

(d) of this section, ‘‘guidance 

documents’’ for the purposes of this 

rule, including this subpart, do not 

include those documents identified in 

this subpart O. 

§ 212.33 Designation procedures. 

(a) The Bureau for Management may 

request a B/IO within USAID to prepare 

a designation request for certain 

guidance documents. Designation 

requests must include the following 

information: 

(1) A summary of the guidance 

document; and 

(2) The B/IO’s recommended 

designation of ‘‘not significant,’’ 

‘‘significant,’’ or ‘‘economically 

significant,’’ as well as a justification for 

that designation. 

(b) Except as otherwise provided in 

paragraph (c) of this section, the Agency 

will seek significance determinations 

from OMB/OIRA for certain guidance 

documents, as appropriate, in the same 

manner as for rulemakings. Prior to 

publishing these guidance documents, 

after internal consultation and review, 

the Bureau for Management shall submit 

the document to OMB/OIRA for review 

under the provisions in Section 6 of 

E.O. 12866 to determine if it meets the 

definition of ‘‘significant’’ or 

‘‘economically significant.’’ 

(c) All ‘‘guidance documents’’ as with 

rulemakings, receive a significance 

determination from OMB/OIRA, unless 

explicitly exempt from E.O. 12866. Note 

that the only documents that do not 

receive designations are those that fall 

outside the definition of ‘‘guidance’’ or 

within a group categorically considered 

nonsignificant as agreed upon by OMB/ 

OIRA in Memorandum M–20–02). 

§ 212.34 Notice-and-comment procedures. 

(a) Except as provided in paragraph 

(b) of this section, all proposed USAID 

guidance documents determined to be a 

‘‘significant guidance document’’ within 

the meaning of § 212.31 shall be subject 

to the following notice-and-comment 

procedures: 

(1) The issuing B/IO within USAID 

shall publish a notice in the Federal 

Register to announce that a draft of the 

proposed guidance document is 

publicly available; post the draft 

guidance document on the Agency’s 

guidance portal; invite public comment 

on the draft document for a minimum 

of 30 days; and 

(2) Prepare and post a public response 

to major concerns raised in the 

comments, as appropriate, on USAID’s 

guidance portal, when the Agency 

finalizes and issues the guidance 

document. 

(b) The requirements of paragraph (a) 

of this section will not apply to any 

significant guidance document or 

categories of significant guidance 

documents for which the Bureau for 

Management finds, in consultation with 

GC, the proposing B/IO, and USAID’s 

RRO, good cause that notice and public 

procedure thereon are impracticable, 

unnecessary, or contrary to the public 

interest (and incorporates the finding of 

good cause and a brief statement of 

reasons therefore in the guidance 

issued). 

(c) Where appropriate, the Bureau for 

Management and the proposing B/IO 

may recommend to the RRO that a 

particular guidance document that is 

otherwise of importance to the Agency’s 

interests shall also be subject to the 

notice-and-comment procedures 

described in paragraph (a) of this 

section. 

§ 212.35 Petitions for guidance. 

Any person may petition the Agency 

to withdraw or modify a particular 

guidance document by using the 

procedures found in § 212.26(c). USAID 

should respond to all requests in a 

timely manner, but no later than 90 days 

after receipt of the request. 

§ 212.36 Rescinded guidance. 

No B/IO within USAID may cite, use, 

or rely on guidance documents that are 

rescinded, except to establish historical 

facts. 

§ 212.37 Exigent circumstances. 

In emergency situations, or when a 

statutory deadline or court order 

requires the issuing B/IO within USAID 

to act more quickly than normal review 

procedures allow, the issuing B/IO shall 

coordinate with the Bureau for 

Management to notify OMB/OIRA as 

soon as possible and, to the extent 

practicable, shall comply with the 

requirements of this subpart at the 

earliest opportunity. Wherever 

practicable, the issuing B/IO should 

schedule its proceedings to permit 

sufficient time to comply with the 

procedures set forth in this subpart. 

§ 212.38 Reports to Congress and the 

Government Accountability Office. 

Unless otherwise determined in 

writing, it is the policy of USAID that 

upon issuing a guidance document 

determined to be ‘‘significant’’ within 

the meaning of § 212.31 the issuing B/ 

IO shall submit a report to Congress and 

the Government Accountability Office 

in accordance with the procedures 

described in 5 U.S.C. 801 (the 

Congressional Review Act [CRA]). 

Under the CRA, USAID must coordinate 

with OMB/OIRA regarding a major 

determination for all guidance 

documents, irrespective of whether the 

Agency otherwise would submit a rule 

for regulatory review (Memorandum19–14). 

§ 212.39 No judicial review or enforceable 

rights. 

This subpart is intended to improve 

the internal management of USAID. As 

such, it is for USAID personnel only and 

is not intended to, and does not, create 

any right or benefit, substantive or 

procedural, enforceable at law or in 

equity by any party against the United 

States, its Departments and Agencies or 

other entities, its officers or employees, 

or any other person. 


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254 Federal Register / Vol. 86, No. 2 / Tuesday, January 5, 2021 / Rules and Regulations 

§ 212.40 Use of guidance documents. 

Guidance documents cannot create 

binding requirements that do not 

already exist by statute or regulation. 

Accordingly, non-compliance with 

guidance documents cannot be used as 

a basis for proving violations of 

applicable law. Guidance documents 

can do no more, with respect to 

prohibition of conduct, than articulate 

USAID’s understanding of how a statute 

or regulation applies to particular 

circumstances. 

Ruth Buckley, 

Acting Performance Improvement Officer/ 

Acting Office Director, Bureau for 

Management Office of Management Policy, 

Budget and Operational Performance. 

[FR Doc. 2020–26352 Filed 1–4–21; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9942] 

RIN 1545–BP53 

Small Business Taxpayer Exceptions 

Under Sections 263A, 448, 460 and 471 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 

SUMMARY: This document contains final 

regulations to implement legislative 

changes to sections 263A, 448, 460, and 

471 of the Internal Revenue Code (Code) 

that simplify the application of those tax 

accounting provisions for certain 

businesses having average annual gross 

receipts that do not exceed $25,000,000, 

adjusted for inflation. This document 

also contains final regulations regarding 

certain special accounting rules for 

long-term contracts under section 460 to 

implement legislative changes 

applicable to corporate taxpayers. The 

final regulations generally affect 

taxpayers with average annual gross 

receipts of not more than $25 million, 

as adjusted for inflation. 

DATES: 

Effective date: The regulations are 

effective on January 5, 2021. 

Applicability dates: For dates of 

applicability, see §§ 1.263A–1(a)(2)(i), 

1.263A–1(m)(6), 1.263A–2(g)(4), 

1.263A–3(f)(2), 1.263A–4(g)(2), 1.263A– 

7(a)(4)(ii), 1.381(c)(5)–1(f), 1.446–1(c)(3), 

1.448–2(h), 1.448–3(h), 1.460–1(h)(3), 

1.460–3(d), 1.460–4(i), 1.460–6(k), and 

1.471–1(c). 

FOR FURTHER INFORMATION CONTACT: 

Concerning §§ 1.460–1 through 1.460–6, 

Innessa Glazman, (202) 317–7006; 

concerning all other regulations in this 

document, Anna Gleysteen, (202) 317– 

7007. 

SUPPLEMENTARY INFORMATION: 

Background 

This document contains amendments 

to the Income Tax Regulations (26 CFR 

part 1) to implement statutory 

amendments to sections 263A, 448, 460, 

and 471 of the Code made by section 

13102 of Public Law 115–97 (131 Stat. 

2054), commonly referred to as the Tax 

Cuts and Jobs Act (TCJA). These 

statutory amendments generally 

simplify the application of the method 

of accounting rules under those 

provisions to certain businesses (other 

than tax shelters) with average annual 

gross receipts that do not exceed 

$25,000,000, adjusted for inflation. 

The uniform capitalization (UNICAP) 

rules of section 263A provide that, in 

general, the direct costs and the 

properly allocable share of the indirect 

costs of real or tangible personal 

property produced, or real or personal 

property described in section 1221(a)(1) 

acquired for resale, cannot be deducted 

but must either be capitalized into the 

basis of the property or included in 

inventory costs, as applicable. Before 

the enactment of the TCJA, certain types 

of taxpayers and certain types of 

property were exempt from UNICAP, 

but there was no generally applicable 

exemption based on gross receipts. 

Section 448(a) generally prohibits C 

corporations, partnerships with a C 

corporation as a partner, and tax 

shelters from using the cash receipts 

and disbursements method of 

accounting (cash method). However, 

section 448(b)(3) provides that section 

448(a) does not apply to C corporations 

and partnerships with a C corporation 

as a partner that meet the gross receipts 

test of section 448(c). Prior to the TCJA’s 

enactment, a taxpayer met the gross 

receipts test of section 448(c) if, for all 

taxable years preceding the current 

taxable year, the average annual gross 

receipts of the taxpayer (or any 

predecessor) for any 3-taxable-year 

period did not exceed $5 million. 

Section 460(a) provides that income 

from a long-term contract must be 

determined using the percentage-ofcompletion method (PCM). A long-term 

contract is defined in section 460(f) as 

generally any contract for the 

manufacture, building, installation, or 

construction of property if such contract 

is not completed within the taxable year 

in which such contract is entered into. 

Subject to special rules in section 

460(b)(3), section 460(b)(1)(A) generally 

provides that the percentage of 

completion of a long-term contract is 

determined by comparing costs 

allocated to the contract under section 

460(c) and incurred before the close of 

the taxable year with the estimated total 

contract costs. Prior to the TCJA, section 

460(e)(1)(B) provided an exemption 

from the PCM for a long-term 

construction contract of a taxpayer who 

estimated that the contract would be 

completed within the 2-year period 

from the commencement of the contract 

(two-year rule), and whose average 

annual gross receipts for the 3-taxableyear period ending with the year 

preceding the year the contract was 

entered into did not exceed $10 million 

(Section 460(e) gross receipts test). 

Section 471(a) requires inventories to 

be taken by a taxpayer when, in the 

opinion of the Secretary of the Treasury 

or his delegate (Secretary), taking an 

inventory is necessary to determine the 

income of the taxpayer. Section 1.471– 

1 requires the taking of an inventory at 

the beginning and end of each taxable 

year in which the production, purchase, 

or sale of merchandise is an incomeproducing factor. Additionally, when an 

inventory is required to be taken, 

§ 1.446–1(c)(1)(iv) and (c)(2) require that 

an accrual method be used for 

purchases and sales. Prior to the 

enactment of the TCJA, there were no 

regulatory exceptions from the 

requirement to take an inventory under 

§ 1.471–1. 

The statutory amendments of the 

TCJA increase the gross receipts test 

amount under section 448(c) to 

$25,000,000, adjusted for inflation, for 

eligibility to use the cash method and 

also exempt taxpayers, other than a tax 

shelter under section 448(a)(3), meeting 

the gross receipts test (Section 448(c) 

Gross Receipts Test) from: (1) The 

UNICAP rules under section 263A; (2) 

the requirement to use the percentageof-completion method under section 

460 provided other requirements of 

section 460(e) are satisfied; and (3) the 

requirement to take inventories under 

section 471(a) if their inventory is 

treated as non-incidental materials and 

supplies, or if the method of accounting 

for their inventory conforms with the 

method reflected on their applicable 

financial statement (AFS), or if they do 

not have an AFS, their books and 

records prepared in accordance with 

their accounting procedures. These 

amendments generally apply to taxable 

years beginning after December 31, 

2017. The amendments to section 460 

apply to contracts entered into after 

December 31, 2017, in taxable years 

ending after December 31, 2017. 

On August 20, 2018, the Department 

of the Treasury (Treasury Department) 


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