NOPR RM19-20 (published)

Federal Register / Vol. 85, No. 211 / Friday, October 30, 2020 / Proposed Rules
amendment. Both expected benefits and
costs of the proposed amendment are
likely to be small. The likely effect on
testing costs would be minor.
Least burdensome requirement. No
other alternative would allow the
Standard’s level of safety and
effectiveness to continue. Thus, the
proposed amendment imposes the least
burdensome requirement that would
adequately address the risk of injury.

DEPARTMENT OF ENERGY

J. Conclusion
For the reasons discussed above, the
Commission preliminarily finds that
amending the mattress flammability
standard (16 CFR part 1632) to specify
SRM 1196a cigarettes as the ignition
source is needed to adequately protect
the public against the unreasonable risk
of the occurrence of fire leading to
death, injury, and significant property
damage. The Commission also
preliminarily finds that the amendment
to the Standard is reasonable,
technologically practicable, and
appropriate. The Commission further
finds that the amendment is limited to
the fabrics, related materials, and
products that present such unreasonable
risks.

AGENCY:

List of Subjects in 16 CFR Part 1632
Consumer protection, Flammable
materials, Labeling, Mattresses and
mattress pads, Records, Textiles,
Warranties.
For the reasons given above, the
Commission proposes to amend 16 CFR
part 1632 as follows:

2020.

PART 1632—STANDARD FOR THE
FLAMMABILITY OF MATTRESSES
AND MATTRESS PADS (FF 4–72,
AMENDED)
1. The authority citation for part 1632
continues to read as follows:

■

Authority: 15 U.S.C. 1193, 1194; 15 U.S.C.
2079(b).

2. Revise § 1632.4(a)(2) to read as
follows:

■

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§ 1632.4

Mattress test procedure.

(a) * * *
(2) Ignition source. The ignition
source shall be a Standard Reference
Material cigarette (SRM 1196a),
available for purchase from the National
Institute of Standards and Technology,
100 Bureau Drive, Gaithersburg, MD
20899.
*
*
*
*
*
Alberta E. Mills,
Secretary, Consumer Product Safety
Commission.
[FR Doc. 2020–22747 Filed 10–29–20; 8:45 am]
BILLING CODE 6355–01–P

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SUPPLEMENTARY INFORMATION:

Federal Energy Regulatory
Commission
18 CFR Part 40
[Docket No. RM19–20–000]

WECC Regional Reliability Standard
BAL–002–WECC–3 (Contingency
Reserve)
Federal Energy Regulatory
Commission, Department of Energy.
ACTION: Notice of proposed rulemaking.
The Federal Energy
Regulatory Commission (Commission)
proposes to approve regional Reliability
Standard BAL–002–WECC–3
(Contingency Reserve) submitted jointly
by the North American Electric
Reliability Corporation (NERC), the
Commission-certified Electric
Reliability Organization, and the
Western Electricity Coordinating
Council (WECC). In addition, the
Commission proposes to direct NERC
and WECC to submit an informational
filing.

SUMMARY:

DATES:

Comments are due December 29,

Comments, identified by
docket number RM19–20, may be filed
in the following ways:
• Electronic Filing through http://
www.ferc.gov. Documents created
electronically using word processing
software should be filed in native
applications or print-to-PDF format and
not in a scanned format.
• Mail/Hand Delivery: Those unable
to file electronically may mail or handdeliver comments via United States
Postal Service (USPS) to: Federal Energy
Regulatory Commission, Secretary of the
Commission, 888 First Street NE,
Washington, DC 20426.
Instructions: For detailed instructions
on submitting comments and additional
information on the rulemaking process,
see the Comment Procedures Section of
this document.
FOR FURTHER INFORMATION CONTACT:
Susan Morris (Technical Information),
Office of Electric Reliability, Division
of Operations and Planning
Standards, Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, Telephone:
(202) 502–6803, Susan.Morris@
ferc.gov.
Mark Bennett (Legal Information), Office
of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street NE, Washington, DC
20426, Telephone: (202) 502–8524,
Mark.Bennett@ferc.gov.
ADDRESSES:

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68809

1. Pursuant to section 215(d)(2) of the
Federal Power Act (FPA), the
Commission proposes to approve
regional Reliability Standard BAL–002–
WECC–3 (Contingency Reserve). The
North American Electric Reliability
Corporation (NERC), the Commissioncertified Electric Reliability
Organization (ERO), and Western
Electricity Coordinating Council
(WECC) jointly submitted the proposed
regional Reliability Standard to the
Commission for approval.
2. Proposed regional Reliability
Standard BAL–002–WECC–3 applies to
balancing authorities and reserve
sharing groups in the WECC Region, and
it specifies the quantity and types of
contingency reserve required to ensure
reliability under normal and abnormal
conditions.1 The principal difference
between the currently-effective regional
Reliability Standard BAL–002–WECC–
2a and the proposed version is the
elimination of Requirement R2 from the
currently-effective version. As discussed
in the joint petition, Requirement R2 is
redundant in the light of the
implementation of the continent-wide
Reliability Standard BAL–003–1.1
(Frequency Response and Frequency
Bias Setting). Given the requirements of
the continent-wide Reliability Standard
BAL–003–1.1 and the results of field
tests conducted by NERC and WECC
assessing the potential impacts of the
retirement of Reliability Standard BAL–
002–WECC–2a Requirement R2 on
contingency reserves in the Western
Interconnection, the Commission
proposes to approve regional Reliability
Standard BAL–002–WECC–3 and retire
the currently-effective version of the
regional Reliability Standard.
3. In addition, although the
Commission proposes to approve
regional Reliability Standard BAL–002–
WECC–3, the Commission believes it
appropriate in this case to monitor the
potential impacts of retiring
Requirement R2 on the adequacy of
contingency reserves in the Western
Interconnection. Therefore, the
Commission proposes to direct NERC
and WECC to submit an informational
filing 27 months following
implementation of regional Reliability
Standard BAL–002–WECC–3 that
addresses the adequacy of contingency
reserves in the Western Interconnection.
1 Reserve sharing group is defined in the Glossary
of Terms Used in NERC Reliability Standards
(NERC Glossary) as, ‘‘[a] group whose members
consist of two or more Balancing Authorities that
collectively maintain, allocate, and supply
operating reserves required for each Balancing
Authority’s use in recovering from contingencies
within the group. . . .’’

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Federal Register / Vol. 85, No. 211 / Friday, October 30, 2020 / Proposed Rules

I. Background
A. Section 215 and Regional Reliability
Standards
4. Section 215 of the FPA requires a
Commission-certified ERO to develop
mandatory and enforceable Reliability
Standards that are subject to
Commission review and approval.2
Once approved, the Reliability
Standards may be enforced by NERC,
subject to Commission oversight, or by
the Commission independently.3
5. A Regional Entity may develop a
regional Reliability Standard for
Commission approval to be effective in
that region only.4 In Order No. 672, the
Commission stated that:
As a general matter, we will accept the
following two types of regional differences,
provided they are otherwise just, reasonable,
not unduly discriminatory or preferential and
in the public interest, as required under the
statute: (1) A regional difference that is more
stringent than the continent-wide Reliability
Standard, including a regional difference that
addresses matters that the continent-wide
Reliability Standard does not; and (2) a
regional Reliability Standard that is
necessitated by a physical difference in the
Bulk-Power System.5

While a Regional Entity may propose
regional Reliability Standards that
address specific, unique regional
conditions and circumstances, such
regional Reliability Standards can be
retired if those justifications are no
longer relevant. Accordingly, the
Commission may approve retirement of
a more stringent regional requirement
‘‘if the Regional Entity demonstrates
that the continent-wide Reliability
Standard is sufficient to ensure the
reliability of that region.’’ 6
B. Regional Reliability Standard BAL–
002–WECC–2
6. On November 21, 2013, the
Commission approved regional
Reliability Standard BAL–002–WECC–2
specifying the quantity and types of
contingency reserve required to ensure
2 16

U.S.C. 824o.
U.S.C. 824o(e).
4 16 U.S.C. 824o(e)(4). A Regional Entity is an
entity that has been approved by the Commission
to enforce Reliability Standards under delegated
authority from the ERO. See 16 U.S.C. 824o(a)(7)
and (e)(4). On April 19, 2007, the Commission
accepted delegation agreements between NERC and
eight Regional Entities, including WECC. North
American Electric Reliability Council., 119 FERC
¶ 61,060, order on reh’g, 120 FERC ¶ 61,260 (2007).
5 Rules Concerning Certification of the Electric
Reliability Organization; and Procedures for the
Establishment, Approval and Enforcement of
Electric Reliability Standards, Order No. 672, 114
FERC ¶ 61,104, at P 291, order on reh’g, Order No.
672–A, 114 FERC ¶ 61,328 (2006).
6 Version One Regional Reliability Standard for
Resource and Demand Balancing, Order No. 740,
133 FERC ¶ 61,063, at P 30 (2010).

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reliability under normal and abnormal
conditions.7 Regional Reliability
Standard BAL–002–WECC–2 was more
stringent than the continent-wide
Reliability Standard BAL–002–1
because the regional Reliability
Standard required applicable entities to
restore contingency reserve within 60
minutes following the Disturbance
Recovery Period while the continentwide Reliability Standard only required
restoration of contingency reserve
within 90 minutes.8 Requirement R2 of
the regional Reliability Standard
provides that balancing authorities and
reserve sharing groups in the WECC
Region ‘‘shall maintain at least half of
its minimum amount of Contingency
Reserve identified in Requirement R1,
as Operating Reserve—Spinning.’’ In
addition, the method for calculating
minimum contingency reserve in the
regional Reliability Standard was more
stringent than Requirement R3.1 in
Reliability Standard BAL–002–1
because it required minimum
contingency reserve levels that will be
at least equal to the Reliability Standard
minimum (i.e., equal to the most severe
single contingency) and more often will
be greater.9
C. NERC Reliability Standard BAL–003–
1
7. On January 16, 2014, the
Commission approved continent-wide
Reliability Standard BAL–003–1
(Frequency Response and Frequency
Bias Setting).10 The Commission
explained that Reliability Standard
BAL–003–1 defines the amount of
frequency response needed from
balancing authorities to maintain
Interconnection frequency within
predefined bounds and includes
requirements for the measurement and
provision of frequency response. In
particular, Order No. 794 determined
that Reliability Standard BAL–003–1
‘‘establishes a minimum Frequency
Response Obligation for each balancing
7 Regional Reliability Standard BAL–002–WECC–
2—Contingency Reserve, Order No. 789, 145 FERC
¶ 61,141 (2013). On January 24, 2017, by delegated
letter order, the Commission approved regional
Reliability Standard BAL–002–WECC–2a, which
added an interpretation to Requirement R2. North
American Electric Reliability Corporation, Docket.
No. RD17–3–000 (Jan. 24, 2017) (delegated order).
8 Reliability Standard BAL–002–3, approved on
September 25, 2018, is the current version of the
continent-wide Reliability Standard.
9 Order No. 789, 145 FERC ¶ 61,141 at P 26.
10 Frequency Response and Frequency Bias
Setting Reliability Standard, Order No. 794, 146
FERC ¶ 61,024 (2014). Reliability Standard BAL–
003–1.1 was subsequently approved by delegated
letter order on November 13, 2015 and contained
non-substantive changes over the prior version,
Reliability Standard BAL–003–1. North American
Electric Reliability Corp., Docket No. RD15–6–000
(Nov. 13, 2015) (delegated order).

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authority; provides a uniform
calculation of frequency response;
establishes Frequency Bias Settings that
are closer to actual balancing authority
frequency response; and encourages
coordinated automatic generation
control operation.’’ 11
D. NERC and WECC Joint Petition
8. On September 6, 2019, NERC and
WECC submitted a joint petition seeking
approval of proposed regional
Reliability Standard BAL–002–WECC–3,
the associated violation risk factors and
violation severity levels, effective date,
and implementation plan. The joint
petition also requests retirement of the
currently-effective WECC regional
Reliability Standard BAL–002–WECC–
2a.
9. In the joint petition, NERC and
WECC explain that principal
modification in the proposed regional
Reliability Standard is the retirement of
Requirement R2 in currently-effective
regional Reliability Standard BAL–002–
WECC–2a. NERC and WECC maintain
that the regional 50% minimum
operating reserve—spinning
requirement in Requirement R2 was
carried forward from the Reliability
Management System of WECC’s
predecessor, the Western Systems
Coordinating Council.
10. NERC and WECC contend that
continent-wide Reliability Standard
BAL–003–1.1 ‘‘helps ensure that
sufficient Frequency Response is
provided to maintain Interconnection
frequency in support of the reliable
operation of the Interconnection,’’ and
therefore renders regional Reliability
Standard BAL–002–WECC–2a,
Requirement R2 ‘‘redundant and no
longer needed for reliability in the
Western Interconnection.’’ 12 NERC and
WECC assert that Reliability Standard
BAL–003–1.1 ‘‘addresses the same
frequency response components covered
in currently effective Regional
Reliability Standard BAL–002–WECC–
2a Requirement R2 but in a resultsbased manner.’’ 13
11. In particular, NERC and WECC
state that Reliability Standard BAL–
003–1.1, Requirement R1 requires that
balancing authorities (or groups of
balancing authorities known as
frequency response sharing groups)
‘‘achieve an annual Frequency Response
Measure that is equal to or more
negative than its Frequency Response
Obligation to ensure that it is providing
sufficient Frequency Response.’’ 14
11 Order

No. 794, 146 FERC ¶ 61,024 at P 22.
Petition at 4.
13 Id. at 13.
14 Id. at 4.
12 Joint

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Moreover, NERC and WECC explain that
retention of the regional 50% minimum
operating reserve—spinning
requirement, alongside the continentwide frequency response requirement,
could lead to confusion and the
procurement of more spinning reserves
than necessary for entities to meet their
frequency response obligation, thereby
increasing costs without providing
additional reliability benefits.15
12. NERC and WECC also state that to
evaluate the potential reliability impacts
of retiring Requirement R2, WECC
conducted a field test from May 1, 2017
through April 30, 2018, obtaining data
from each balancing authority and each
reserve sharing group.16 NERC and
WECC explain that the field test
measured the effect of retiring
Requirement R2 using two metrics:
Disturbance control standard (DCS)
performance and frequency response in
the Western Interconnection.17 The first
metric measured, for each reportable
DCS event,18 whether an entity was
unable to meet the DCS recovery period.
The second metric monitored system
performance for any loss of resources
greater than 700 MW and for any
adverse effects on frequency response.19
13. NERC and WECC assert that
‘‘analysis of the data demonstrates that
all 66 DCS events occurring during the
field test period had a 100% pass rate,
showing no degradation to DCS
performance. Entities carried and
deployed enough reserves for post
disturbance Area Control Area
recovery.’’ 20 NERC and WECC also note
15 Id.

at 12–13.
at 13. A report containing the results of the
field test is appended to the joint petition as Exhibit
C. Joint Petition, Exhibit C (Field Test Results,
WECC–0115 BAL–002–WECC–2a Request to Retire
Requirement R2).
17 Disturbance control standard is defined in the
NERC Glossary as, ‘‘[t]he reliability standard that
sets the time limit following a Disturbance within
which a Balancing Authority must return its Area
Control Error to within a specified range.’’ See also
Joint Petition, Exhibit C at 5.
18 We understand the reference to ‘‘reportable
DCS event’’ in the petition corresponds to the NERC
Glossary term ‘‘reportable balancing contingency
event’’ that appears in Reliability Standard BAL–
002–3. The NERC Glossary defines reportable
balancing contingency event as: ‘‘[a]ny Balancing
Contingency Event occurring within a one-minute
interval of an initial sudden decline in ACE based
on EMS scan rate data that results in a loss of MW
output less than or equal to the Most Severe Single
Contingency, and greater than or equal to the lesser
amount of: (i) 80% of the Most Severe Single
Contingency, or (ii) the amount listed below for the
applicable Interconnection. Prior to any given
calendar quarter, the 80% threshold may be
reduced by the responsible entity upon written
notification to the Regional Entity. (Eastern
Interconnection—900 MW, Western
Interconnection—500 MW, ERCOT—800 MW, and
Quebec—500 MW).’’
19 Joint Petition at 13–14.
20 Id. at 14.

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that the 2018 NERC State of Reliability
Report indicates that frequency
response performance ‘‘did not degrade
in the Western Interconnection during
the field test period.’’ 21
14. Aside from eliminating
Requirement R2, NERC and WECC
assert that proposed regional Reliability
Standard BAL–002–WECC–3 retains the
other existing requirements because
they are needed to maintain reliability
and ‘‘continue[ ] to represent a more
stringent set of requirements for entities
in the Western Interconnection than
those found in the continent-wide
disturbance control standard, Reliability
Standard BAL–002–3.’’ 22
E. Data Request and Response
15. On February 18, 2020, the Director
of the Office of Electric Reliability
issued a data request to NERC and
WECC seeking: (1) Data for the
remainder of the field test term not
provided in the joint petition (i.e., from
May 1, 2018 to September 30, 2019);
and (2) supporting data for NERC
frequency response metric (Metric M–4)
as it pertains to the Western
Interconnection during the field test
period (i.e., from May 1, 2017 to
September 30, 2019).
16. On May 18, 2020, NERC and
WECC submitted data in response to the
February 18 data request.
II. Discussion
17. Pursuant to FPA section 215(d)(2),
the Commission proposes to approve
WECC regional Reliability Standard
BAL–002–WECC–3 as just, reasonable,
not unduly discriminatory or
preferential, and in the public interest.
For applicable entities in the WECC
Region, proposed regional Reliability
Standard BAL–002–WECC–3 eliminates
the requirement in the currentlyeffective version that at least half of the
minimum amount of contingency
reserve shall be Operating Reserve—
Spinning that meets certain reserve
characteristics. The justification set
forth in the joint petition taken together
with the field test results support NERC
and WECC’s position that the continentwide Reliability Standard BAL–003–1.1
renders the existing 50% Operating
Reserve—Spinning obligation
redundant. Additionally, proposed
regional Reliability Standard BAL–002–
WECC–3, even without Requirement R2,
will continue to provide protections
beyond those contained in the
continent-wide disturbance control
Reliability Standard BAL–002–3.
21 Id.
22 Id.

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18. While we propose to approve
WECC regional Reliability Standard
BAL–002–WECC–3, unique aspects of
contingency reserves in the Western
Interconnection raise concerns about
deliverability of contingency reserves
within reserve sharing groups. Thirtyfour balancing authorities are registered
with WECC of which 32 are members of
one of the two reserve sharing groups
within WECC. The Southwest Reserve
Sharing Group (SRSG) geographic area
covers the southwest United States
including Arizona, New Mexico,
southern Nevada, parts of southern
California including the Imperial Valley,
and El Paso, Texas. The Northwest
Power Pool (NWPP) reserve sharing
group geographic area covers two
Canadian provinces and all the states in
the Western Interconnection except
Arizona, New Mexico southern Nevada,
and part of California. Each reserve
sharing group includes member
balancing authorities that have
hydroelectric resources. These
hydroelectric resources represent a
significant share of the reserve sharing
group contingency reserves. These
resources may or may not be deliverable
to all member balancing authorities due
to transmission constraints or limits on
the hydro system.23
19. We believe it is important to
monitor the reliability impacts that the
retirement of Requirement R2 may have
on contingency reserves in the Western
Interconnection. Therefore, as detailed
below, the Commission proposes to
direct that NERC and WECC submit an
informational filing 27 months
following implementation of regional
Reliability Standard BAL–002–WECC–3.
We further propose to direct that NERC
and WECC make the Commission
immediately aware of any adverse
impacts resulting from the retirement of
Requirement R2, if they become
apparent prior to the end of the
reporting period, and any corrective
actions taken or being considered.
20. We propose to direct that NERC
and WECC submit an informational
filing 27 months following
implementation of regional Reliability
Standard BAL–002–WECC–3 that
addresses the adequacy of contingency
23 The WECC operating committee raised similar
issues in a report regarding the Northwest price
spike event that occurred the week of March 1–4,
2019. See also, https://www.wecc.org/Reliability/
PricingEvent_Paper_Final.pdf at 13: ‘‘Reserves are
calculated based on unit capacity and do not
necessarily consider fuel availability. Limits on the
hydro system and wind availability . . . could
reduce actual reserve levels below the calculated
and reported levels. Fuel-limited resources may be
overcounted toward reserves as the full capacity of
the unit may be counted without regard to the
availability of fuel.’’

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reserves in the Western Interconnection.
Specifically, the report should provide,
for an additional 24 month period after
implementation of the standard, the
following categories of data (similar to
the data categories identified in the
February 18, 2020 data request): (1) For
any reportable DCS event, the date, time
and required amount of contingency
reserves at the time of the event, the
actual amount of Operating Reserves—
Spinning at the time of the event, and
the actual DCS performance; (2) for
events involving a loss of 700 MW or
greater, whether it is a reportable DCS
event or not, the date and time of the
event, the name of the resource(s), and
the total MW; (3) the amount of
spinning reserve above or below 50%
during non-event times on an hourly
basis for 24 months following
implementation; and (4) supporting data
for NERC’s frequency response metric
(Metric M–4) as it pertains to the
Western Interconnection.24
21. In addition to the data categories
identified in the February 18 data
request, we propose to direct that NERC
and WECC provide: (1) The DCS
performance—as described in request
(1) in the paragraph above—on a
balancing authority basis; and (2) the
hourly amount of contingency reserve
and the fraction of that contingency
reserve that is classified as spinning for
each hour by balancing authority (not
reserve sharing group). We believe that
this data is necessary to assess the
amount of contingency reserves held by
each balancing authority within a
reserve sharing group since the
contingency reserve data provided for a
reserve sharing group are the aggregated
sum of the contingency reserves of the
participating balancing authorities.

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III. Information Collection Statement
22. The FERC–725E information
collection requirements contained in
this Notice of Proposed Rulemaking are
subject to review by the Office of
Management and Budget (OMB) under
section 3507(d) of the Paperwork
Reduction Act of 1995 (PRA).25 OMB’s
regulations require approval of certain
information collection requirements
imposed by agency rules.26 Upon
approval of a collection(s) of
information, OMB will assign an OMB
control number and an expiration date.
Respondents subject to the filing
requirements of a rule will not be
penalized for failing to respond to these
24 The informational filing report can be drafted
in a similar manner as the field test report provided
in the petition including all of the requested data.
25 44 U.S.C. 3507(d).
26 5 CFR 1320.11.

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collections of information unless the
collections of information display a
valid OMB control number.
23. We solicit comments on the
Commission’s need for this information,
whether the information will have
practical utility, the accuracy of the
burden estimates, ways to enhance the
quality, utility, and clarity of the
information to be collected or retained,
and any suggested methods for
minimizing respondents’ burden,
including the use of automated
information techniques. Specifically,
the Commission asks that any revised
burden or cost estimates submitted by
commenters be supported by sufficient
detail to understand how the estimates
are generated.
24. Public Reporting Burden: The
burden and cost estimates below are
based on the need for applicable entities
to revise documentation, already
required by the current WECC regional
Reliability Standard BAL–002–WECC–
2a,27 to reflect the retirement of
Requirement R2 in the proposed WECC
regional Reliability Standard BAL–002–
WECC–3. Our estimates are based on the
NERC Compliance Registry as of
September 3, 2020, which indicates that
34 balancing authorities, 2 reserve
sharing groups, 2 reliability
coordinators, 265 generator owners, 256
generator operators, 78 transmission
owners and 47 transmission operators
are registered within WECC.
25. In addition to the changes
identified in this Notice of Proposed
Rulemaking, the Commission is
adjusting burden estimates for the other
WECC regional Reliability Standards in
the FERC–725E information collection.
These adjustments are warranted based
on updates to the number of applicable
registered entities that have changed
due to normal industry fluctuations
(e.g., companies merging or splitting,
going into or leaving the industry, or
filling more or fewer roles in the NERC
Compliance Registry).
26. There are several regional
Reliability Standards in the WECC
region. These regional Reliability
Standards generally require entities to
document compliance with substantive
27 BAL–002–WECC–2 is included in the OMBapproved inventory for FERC–725E. On November
9, 2016, NERC and WECC submitted a joint petition
for approval of an interpretation of BAL–002–
WECC–2, to be designated BAL–002–WECC–2a.
BAL–002–WECC–2a was approved by order in
Docket No. RD17–3–000 on January 24, 2017. The
Order determined: ‘‘The proposed interpretation
provides clarification regarding the types of
resources that may be used to satisfy Contingency
Reserve requirements in regional Reliability
Standard BAL–002–WECC–2.’’ BAL–002–WECC–2a
did not trigger the Paperwork Reduction Act and
did not affect the burden estimate.

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requirements, retain documentation,
and submit reports to WECC. The
following standards will be continuing
without change.
• BAL–004–WECC–3 (Automatic
Time Error Correction) requires
balancing authorities to document that
time error corrections and primary
inadvertent interchange payback were
conducted according to the
requirements in the standard.
• FAC–501–WECC–2 (Transmission
Maintenance) requires transmission
owners with certain transmission paths
to have a transmission maintenance and
inspection plan and to document
maintenance and inspection activities
according to the plan.
• VAR–501–WECC–3.1 (Power
System Stabilizer [PSS]) 28 requires
generator owners and operators to
ensure the Western Interconnection is
operated in a coordinated manner by
establishing the performance criteria for
WECC power system stabilizers.
27. The associated reporting and
recordkeeping requirements included in
the regional standards above are not
being revised, and the Commission will
be submitting a request to OMB to
extend these requirements for three
years. The Commission’s request to
OMB will also reflect the following:
• Implement the regional Reliability
Standard BAL–002–WECC–3 (addressed
in this Notice of Proposed Rulemaking,
Docket No. RM19–20). and
• Adjustments to the burden
estimates due to changes in the NERC
Compliance Registry for regional
Reliability Standards BAL–002–WECC–
3 (Contingency Reserve) and IRO–006–
WECC–3 (Qualified Path Unscheduled
Flow (USF) Relief).29
28 VAR–501–WECC–3.1 was approved by order in
Docket No. RD17–7–000 on September 26, 2017.
The August 18, 2017 petition requested
Commission approval of errata to mandatory and
enforceable regional Reliability VAR–501–WECC–3
(Power System Stabilizer). Because the reporting
burden for VAR–501–WECC–3.1 did not increase
for entities that operate within the Western
Interconnection, FERC submitted the order to OMB
for information only. The burden related to VAR–
501–WECC–3.1 does not differ from the burden of
VAR–501–WECC–3, which is included in the OMBapproved inventory. VAR–501–WECC–3.1 is being
included in this document and the Commission’s
submittal to OMB as part of FERC–725E.
29 IRO–006–WECC–3 was approved by order in
Docket No. RD19–4–000 on May 10, 2019. The
March 6, 2019 petition states that WECC revised the
regional Reliability Standard to clarify the purpose
statement, replace certain defined terms, account
for multiple reliability coordinators in the Western
Interconnection, and conform the regional
Reliability Standard to the current drafting
conventions and template. Because the reporting
burden for IRO–006–WECC–3 did not increase for
entities that operate within the Western
Interconnection, FERC submitted the order to OMB
for information only. The burden related to IRO–
006–WECC–3 does not differ from the burden of

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Federal Register / Vol. 85, No. 211 / Friday, October 30, 2020 / Proposed Rules
28. Changes Due to Docket No. RM19–
20. The Commission estimates the

reduction in the annual public reporting
burden for the FERC–725E (due to the

retirement of BAL–002–WECC–2a,
Requirement R2) as follows:

FERC—725E—MANDATORY RELIABILITY STANDARDS FOR THE WESTERN ELECTRIC COORDINATING COUNCIL,
REDUCTIONS DUE TO DOCKET NO. RM19–20
Information collection
requirements and entity

Balancing Authorities Years 1
and 2 31.
Balancing Authorities Year 3
and Ongoing.
Sub-Total, Reduction (Due
to Docket No. RM19–20)
in Year 3 and Ongoing.

Number of
respondents

Annual
number of
responses per
respondent

Total number
of responses

Average burden hours
& cost 30 per response

Total annual burden hours
& total annual cost

(1)

(2)

(1) * (2) = (3)

(4)

(3) * (4) = (5)

0 (no change)

0 (no change)

0 (no change)

0 hrs.; $0 (no change) ...

0 hrs.; $0 (no change).

34 ...................

1 .....................

34 ...................

1 hr.; $83.67 (reduction)

34 hrs.; $2,844.78 (reduction).

........................

........................

........................

........................................

34 hrs.; $2,844.78 (reduction).

29. Adjustments Due to normal
industry fluctuations. The Commission

estimates the changes in the annual
public reporting burden for the FERC–

725E (due to the number of applicable
registered entities) as follows: 32

FERC—725E—MANDATORY RELIABILITY STANDARDS FOR THE WESTERN ELECTRIC COORDINATING COUNCIL,
ADJUSTMENTS DUE TO NORMAL INDUSTRY FLUCTUATIONS

jbell on DSKJLSW7X2PROD with PROPOSALS

Information collection
requirements and entity

Number of
respondents

Annual
number of
responses per
respondent

Total number
of responses

Average burden hours
& cost 30 per response

Total annual burden hours
& total annual cost

(1)

(2)

(1) * (2) = (3)

(4)

(3) * (4) = (5)

Reliability Coordinators (IRO–
006–WECC–3) Reporting Requirement.

1 (increase) ....

1

1

1 hr.; $83.67 (increase) ......

1 hr.; $83.67 (increase).

Reliability Coordinators (IRO–
006–WECC–3) Record Keeping Requirement.
Reserve Sharing Groups (BAL–
002–WECC–3) Reporting Requirement.

1 (increase) ....

1

1

1 hr.; $34.79 (increase) ......

1 hr.; $34.79 (increase).

1 (reduction) ..

1

1

1 hr.; $83.67 (reduction) .....

1 hr.; $83.67 (reduction).

Sub-Total, (Net Due to Adjustments).

........................

........................

........................

.............................................

1 hr.; $34.79 (net change).

30. Estimate of Continuing Annual
Burden for Renewal: 33 The Commission
estimates the annual public reporting
burden and cost as follows for FERC–
725E. (This information will be
submitted to OMB for approval.) These
estimates reflect:

• Reliability Standards in FERC–725E
which continue and remain unchanged
(BAL–004–WECC–3, FAC–501–WECC–
2, and VAR–002–WECC–3.1);
• Implement the regional Reliability
Standard BAL–002–WECC–3 (addressed
in this Notice of Proposed Rulemaking,
Docket No. RM19–20–000); and

• Adjustments to the burden
estimates for regional Reliability
Standards BAL–002–WECC–3
(Contingency Reserve) and IRO–006–
WECC–3 (Qualified Path Unscheduled
Flow (USF) Relief).

IRO–006–WECC–2, which is included in the OMBapproved inventory. IRO–006–WECC–3 is being
included in this document and the Commission’s
submittal to OMB as part of FERC–725E.
30 The hourly cost (for salary plus benefits) uses
the figures from the Bureau of Labor Statistics (BLS)
for three positions involved in the reporting and
recordkeeping requirements. These figures include
salary (based on BLS data for May 2019, http://
bls.gov/oes/current/naics2_22.htm) and benefits
(based on BLS data for December 2019; issued
March 19, 2020, http://www.bls.gov/news.release/

ecec.nr0.htm) and are Manager (Code 11–0000
$97.15/hour), Electrical Engineer (Code 17–2071
$70.19/hour), and File Clerk (Code 43–4071 $34.79/
hour). The hourly cost for the reporting
requirements ($83.67) is an average of the cost of
a manager and engineer. The hourly cost for
recordkeeping requirements uses the cost of a file
clerk.
31 The reduction in burden is zero for the first two
years due to the directive in this document of
Proposed Rulemaking to continue to report hourly
contingency reserve data for 24 months.

32 The number of applicable entities is based on
the NERC Compliance Registry as of September 3,
2020.
33 The Commission is also removing 1746 onetime burden hours associated with the requirements
in Docket No. RD17–5 for regional Reliability
Standard VAR–501–WECC–3 (Power System
Stabilizer [PSS]). The one-time burden has been
completed and will now be administratively
removed on submittal to OMB. Those hours are not
included in the table.

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Federal Register / Vol. 85, No. 211 / Friday, October 30, 2020 / Proposed Rules

FERC—725E—MANDATORY RELIABILITY STANDARDS FOR THE WESTERN ELECTRIC COORDINATING COUNCIL
[New and continuing information collection requirements]

Entity

Number of
respondents 34

Annual
number of
responses per
respondent

Annual
number of
responses

Average burden
hrs. & cost 30
per response
($)

Total annual
burden
hours & total
annual cost
($)

Cost per
respondent
($)

(1)

(2)

(1) * (2) = (3)

(4)

(3) * (4) = (5)

(5) ÷ (1) = (6)

Reporting Requirements
Balancing Authorities Years
1 and 2 (BAL–002–
WECC–3; BAL–004–
WECC–3; IRO–006–
WECC–3).
Balancing Authorities Year 3
and Ongoing (BAL–002–
WECC–3; BAL–004–
WECC–3; IRO–006–
WECC–3).
Reserve Sharing Groups
(BAL–002–WECC–3).
Reliability Coordinators
(IRO–006–WECC–3).
Transmission Owners that
operate qualified transfer
paths (FAC–501–WECC–
2).
Generator Owners and/or
Operators (VAR–501–
WECC–3.1).
Sub-Total for Reporting
Requirements in
Years 1 and 2.
Sub-Total for Reporting
Requirements in Year
3 & Ongoing.

34

1

34

21 hrs.; $1,757.07

714 hrs.; $59,740.38

$1,757.07

34

1

34

20 hrs.; $1,673.40 ..

680 hrs.; $56,895.60

$1,673.40

2

1

2

1 hr.; $83.67 ..........

2 hrs.; $167.34 ..........

$83.67

2

1

2

1 hr.; $83.67 ..........

2 hrs.; $167.34 ..........

$83.67

5

1

5

40 hrs.; $3,346.80 ..

200 hrs.; $16,734.00

$3,346.80

291

2

582

1 hr.; $83.67 ..........

582 hrs.; $48,695.94

$167.34

........................

........................

625

................................

1,500 hrs.;
$125,505.00.

........................

........................

........................

625

................................

1,466 hrs.;
$122,660.22.

........................

Recordkeeping Requirements
Balancing
Authorities
(BAL–002–WECC–3;
BAL–004–WECC–3;
IRO–006–WECC–3)
Reliability Coordinator (IRO–
006–WECC–3).
Transmission Owner that
operate qualified transfer
paths (FAC–501–WECC–
2).
Generator Owners and/or
Operators (VAR–501–
WECC–3.1).
Sub-Total for Recordkeeping Requirements.

jbell on DSKJLSW7X2PROD with PROPOSALS

Total for FERC–
725E, in Yr. 1
and Yr. 2.
Total for FERC–
725E, in Yr. 3 &
Ongoing.

34

1

34

3.1 hrs.; $107.85 ...

105.4 hrs.; $3,666.87

$107.85

2

1

2

1 hr.; $34.79 ..........

2 hrs.; $69.58 ............

$34.79

5

1

5

6 hrs.; $208.74 ......

30 hrs.; $1043.70 ......

$208.74

291

2

582

0.5 hrs.; $17.40 ......

291 hrs.; $10,123.89

........................

........................

623

................................

428.4 hrs.;
$14,904.04.

........................

........................

........................

1248

................................

1,928.4 hrs.;
$140,409.04.

........................

........................

........................

1248

................................

1,894.4 hrs.;
$137,564.26.

........................

31. Interested persons may obtain
information on the reporting
requirements by contacting Ellen
Brown, Office of the Executive Director,
Federal Energy Regulatory Commission,

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$34.79

20426, via email (DataClearance@
ferc.gov) or telephone ((202) 502–8663).
34 The number of respondents is derived from the
NERC Compliance Registry as of September 3, 2020.

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Federal Register / Vol. 85, No. 211 / Friday, October 30, 2020 / Proposed Rules
32. The Commission solicits
comments on the Commission’s need for
this information, whether the
information will have practical utility,
the accuracy of the burden estimates,
ways to enhance the quality, utility, and
clarity of the information to be collected
or retained, and any suggested methods
for minimizing respondents’ burden,
including the use of automated
information techniques.
33. Please send comments concerning
the collection of information and the
associated burden estimates to: Office of
Information and Regulatory Affairs,
Office of Management and Budget, 725
17th Street NW, Washington, DC 20503
[Attention: Desk Officer for the Federal
Energy Regulatory Commission]. Due to
security concerns, comments should be
sent electronically to the following
email address: oira_submission@
omb.eop.gov. Comments submitted to
OMB should refer to OMB Control Nos.
1902–0246.
34. Please submit a copy of your
comments on the information
collections to the Commission via the
eFiling link on the Commission’s
website at http://www.ferc.gov. If you
are not able to file comments
electronically, please send a copy of
your comments to: Federal Energy
Regulatory Commission, Secretary of the
Commission, 888 First Street NE,
Washington, DC 20426. Comments on
the information collection that are sent
to FERC should refer to RM19–20–000.
Title: FERC–725E, Mandatory
Reliability Standards-WECC (Western
Electric Coordinating Council).
Action: Three-year approval of the
FERC–725E information collection
requirements, as modified by Docket
No. RM19–20–000 and due to normal
industry fluctuations.
OMB Control No: 1902–0246 (FERC–
725E).
Respondents: Business or other forprofit, and not-for-profit institutions.
Frequency of Responses: One-time.
Necessity of the Information: The
proposed regional Reliability Standard
BAL–002–WECC–3, if adopted, would
implement the Congressional mandate
of the Energy Policy Act of 2005 to
develop mandatory and enforceable
Reliability Standards to better ensure
the reliability of the nation’s BulkPower System. Specifically, the
proposal ensures that balancing
authorities and reserve sharing groups
in the WECC Region have the quantity
and types of contingency reserve
required to ensure reliability under
normal and abnormal conditions.
Internal review: The Commission has
reviewed the proposed regional
Reliability Standard BAL–002–WECC–3

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and made a determination that its action
is necessary to implement section 215 of
the FPA. The Commission has assured
itself, by means of its internal review,
that there is specific, objective support
for the burden estimates associated with
the information requirements.
IV. Environmental Analysis
35. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
for any action that may have a
significant adverse effect on the human
environment.35 The Commission has
categorically excluded certain actions
from this requirement as not having a
significant effect on the human
environment. Included in the exclusion
are rules that are clarifying, corrective,
or procedural or that do not
substantially change the effect of the
regulations being amended.36 The
actions proposed here fall within this
categorical exclusion in the
Commission’s regulations.
V. Regulatory Flexibility Act
36. The Regulatory Flexibility Act of
1980 (RFA) 37 generally requires a
description and analysis of proposed
rules that will have significant
economic impact on a substantial
number of small entities. The Small
Business Administration’s (SBA) Office
of Size Standards develops the
numerical definition of a small entity.38
These standards are provided in the
SBA regulations at 13 CFR 121.201.39
37. Under SBA’s size standards,40
balancing authorities, reserve sharing
groups, generator operators, generator
owners, transmission owners, and
transmission operators all fall under the
category of (NAICS code 221111Hydroelectric Power Generation (500)
and NAICS code 221118-Other Electric
Power Generation (250)), with a total
size threshold of 750 employees
(including the entity and its
associates).41
38. This proposed rule, if adopted,
would apply to registered balancing
35 Regulations Implementing the National
Environmental Policy Act of 1969, Order No. 486,
52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs.
¶ 30,783 (1987) (cross-referenced at 41 FERC
¶ 61,284).
36 18 CFR 380.4(a)(2)(ii).
37 5 U.S.C. 601–612.
38 13 CFR 121.101.
39 13 CFR 121.201. See also U.S. Small Business
Administration, Table of Small Business Size
Standards Matched to North American Industry
Classification System Codes (effective Feb. 26,
2016), https://www.sba.gov/sites/default/files/files/
Size_Standards_Table.pdf.
40 13 CFR 121.201
41 The threshold for the number of employees
indicates the maximum allowed for a concern and
its affiliates to be considered small.

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68815

authorities and reserved sharing groups
in the NERC Compliance Registry with
data submitted to the Energy
Information Administration on Form
EIA–861 indicating that, of the 36
entities, 34 are registered balancing
authorities and two are reserve sharing
groups, two may qualify as small
entities.42
39. Using the list from the NERC
Compliance Registry (dated September
3, 2020), we estimate that approximately
22% of those entities are small entities.
40. The Commission estimates that,
on average, each of the two affected
small entities will have no further
ongoing costs after year three. These
figures are based on information
collection costs plus additional costs for
compliance.
41. The Commission does not
consider this to be a significant
economic impact for small entities
because it should not represent a
significant percentage of the operating
budget. Accordingly, the Commission
certifies that this proposed rulemaking
will not have a significant economic
impact on a substantial number of small
entities. The Commission seeks
comment on this certification.
VI. Comment Procedures
42. The Commission invites interested
persons to submit comments on the
matters and issues proposed in this
document to be adopted, including any
related matters or alternative proposals
that commenters may wish to discuss.
Comments are due December 29, 2020.
Comments must refer to Docket No.
RM19–20–000, and must include the
commenter’s name, the organization
they represent, if applicable, and their
address in their comments.
43. The Commission encourages
comments to be filed electronically via
the eFiling link on the Commission’s
website at http://www.ferc.gov. The
Commission accepts most standard
word processing formats. Documents
created electronically using word
processing software should be filed in
native applications or print-to-PDF
format and not in a scanned format.
Commenters filing electronically do not
need to make a paper filing.
44. Commenters that are not able to
file comments electronically must send
42 The RFA definition of ‘‘small entity’’ refers to
the definition provided in the Small Business Act
(SBA), which defines a ‘‘small business concern’’ as
a business that is independently owned and
operated and that is not dominant in its field of
operation. See 15 U.S.C. 632. According to the
Small Business Administration, an electric utility is
defined as ‘‘small’’ if, including its affiliates, the
number of employees indicates the maximum
allowed for a concern and its affiliates to be
considered small.

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Federal Register / Vol. 85, No. 211 / Friday, October 30, 2020 / Proposed Rules

an original of their comments to:
Federal Energy Regulatory Commission,
Secretary of the Commission, 888 First
Street NE, Washington, DC 20426.
45. All comments will be placed in
the Commission’s public files and may
be viewed, printed, or downloaded
remotely as described in the Document
Availability section below. Commenters
on this proposal are not required to
serve copies of their comments on other
commenters.
VII. Document Availability
46. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
document via the internet through the
Commission’s Home Page (http://
www.ferc.gov) and in the Commission’s
Public Reference Room during normal
business hours (8:30 a.m. to 5:00 p.m.
Eastern time) at 888 First Street NE,
Room 2A, Washington DC 20426.
47. From the Commission’s Home
Page on the internet, this information is
available on eLibrary. The full text of
this document is available on eLibrary
in PDF and Microsoft Word format for
viewing, printing, and/or downloading.
To access this document in eLibrary,
type the docket number excluding the
last three digits of this document in the
docket number field.
48. User assistance is available for
eLibrary and the Commission’s website
during normal business hours from the
Commission’s Online Support at 202–
502–6652 (toll free at 1–866–208–3676)
or email at ferconlinesupport@ferc.gov,
or the Public Reference Room at (202)
502–8371, TTY (202) 502–8659. Email
the Public Reference Room at
public.referenceroom@ferc.gov.
By direction of the Commission.
Issued: October 15, 2020.
Kimberly D. Bose,
Secretary.
BILLING CODE 6717–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
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[REG–119890–18]
RIN 1545–BO92

Section 42, Low-Income Housing
Credit Average Income Test
Regulations
Internal Revenue Service (IRS),
Treasury.

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Notice of proposed rulemaking.

This document contains
proposed regulations setting forth
guidance on the average income test
under section 42(g)(1)(C) of the Internal
Revenue Code (Code) for purposes of
the low-income housing credit. These
proposed regulations affect owners of
low-income housing projects, tenants in
those projects, and State or local
housing credit agencies that administer
the low-income housing credit.
DATES: Written (including electronic)
comments must be received by
December 29, 2020.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic
submissions via the Federal
eRulemaking Portal at
www.regulations.gov (indicate IRS and
REG–104591–18) by following the
online instructions for submitting
comments. Once submitted to the
Federal eRulemaking Portal, comments
cannot be edited or withdrawn. The IRS
expects to have limited personnel
available to process public comments
that are submitted on paper through the
mail. Until further notice, any
comments submitted on paper will be
considered to the extent practicable.
The Department of the Treasury
(Treasury Department) and the IRS will
publish for public availability any
comment submitted electronically, and
to the extent practicable on paper, to its
public docket.
FOR FURTHER INFORMATION CONTACT:
Concerning these proposed regulations,
Dillon Taylor or Michael J. Torruella
Costa at (202) 317–4137; concerning
submissions of comments, Regina L.
Johnson at (202) 317–6901 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
SUMMARY:

Background

[FR Doc. 2020–23297 Filed 10–29–20; 8:45 am]

AGENCY:

ACTION:

This document contains proposed
amendments to the Income Tax
Regulations (26 CFR part 1) under
section 42 of the Code.
The Tax Reform Act of 1986, Public
Law 99–514, 100 Stat. 2085 (1986 Act)
created the low-income housing credit
under section 42 of the Code. Section
42(a) provides that the amount of the
low-income housing credit for any
taxable year in the credit period is an
amount equal to the applicable
percentage of the qualified basis of each
qualified low-income building.
Section 42(c)(1)(A) provides that the
qualified basis of any qualified lowincome building for any taxable year is
an amount equal to (i) the applicable
fraction (determined as of the close of

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the taxable year) of (ii) the eligible basis
of the building (determined under
section 42(d)). Sections 42(c) and 42(d)
define applicable fraction and eligible
basis. Section 42(d)(1) and (2) define the
eligible basis of a new building or an
existing building, respectively.
Section 42(c)(2) defines a qualified
low-income building as any building
which is part of a qualified low-income
housing project at all times during the
compliance period (that is, the period of
15 taxable years beginning with the first
taxable year of the credit period) and to
which the amendments made by section
201(a) of the 1986 Act apply (generally
property placed in service after
December 31, 1986, in taxable years
ending after that date). To qualify as a
low-income housing project, one of the
section 42(g) minimum set-aside tests,
as elected by the taxpayer, must be
satisfied.
Prior to the enactment of the
Consolidated Appropriations Act of
2018, Public Law 115–141, 132 Stat. 348
(2018 Act), section 42(g) set forth two
minimum set-aside tests that a taxpayer
may elect with respect to a low-income
housing project, known as the 20–50
test and the 40–60 test. Under the 20–
50 test, at least 20 percent of the
residential units in the project must be
both rent-restricted and occupied by
tenants whose gross income is 50
percent or less of the area median gross
income (AMGI). Section 42(g)(1)(A).
Under the 40–60 test, at least 40 percent
of the residential units in the project
must be both rent-restricted and
occupied by tenants whose gross
income is 60 percent or less of AMGI.
Section 42(g)(1)(B).
Section 103(a) of Division T of the
2018 Act added section 42(g)(1)(C) to
the Code to provide a third minimum
set-aside test that a taxpayer may elect
with respect to a low-income housing
project: The average income test.
Section 42(g)(1)(C)(i) provides that, a
project meets the minimum
requirements of the average income test
if 40 percent or more (25 percent or
more in the case of a project described
in section 142(d)(6)) of the residential
units in the project are both rentrestricted and occupied by tenants
whose income does not exceed the
imputed income limitation designated
by the taxpayer with respect to the
respective unit. Section 42(g)(1)(C)(ii)(I)
and (III) provides that the taxpayer must
designate the imputed income
limitation for each unit and the
designated imputed income limitation
of any unit must be 20, 30, 40, 50, 60,
70, or 80 percent of AMGI. Section
42(g)(1)(C)(ii)(II) provides that the
average of the imputed income

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