Tap any paragraph to write a margin note. Your notes collect in the Desk below the text and file under cases with @. The side-by-side margin rail opens on a larger screen.

§
Marginalia
Code · REGISTER · 2006-05-24 · Animal and Plant Health Inspection Service, USDA · Proposed Rules

Proposed Rules. Proposed rule; availability of risk assessment and request for comments

23,671 words·~108 min read·/register/2006/05/24/06-4792

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 3510-22-S 71 100 Wednesday, May 24, 2006 Proposed Rules DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 319 [Docket No. 00-014-2] Phytosanitary Certificates for Fruits and Vegetables Imported in Passenger Baggage; Availability of a Risk Assessment AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule; availability of risk assessment and request for comments. SUMMARY: We are advising the public that the Animal and Plant Health Inspection Service has prepared a risk assessment relative to a previously published proposal to require imported fruits and vegetables to be accompanied by a phytosanitary certificate.
The risk assessment considers the plant pest risks associated with fruits and vegetables imported in passenger baggage and the probable impact of phytosanitary certification requirements. We are considering adopting only the proposed requirements that pertain to fruits and vegetables imported in air passenger baggage. We are making the risk assessment available to the public for review and comment. DATES: We will consider all comments that we receive on or before July 24, 2006.
ADDRESSES: You may submit comments by either of the following methods: • Federal eRulemaking Portal: Go to *http://www.regulations.gov* and, in the “Search for Open Regulations” box, select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click on “Submit.” In the Docket ID column, select APHIS-2006-0092 to submit or view public comments and to view supporting and related materials available electronically. After the close of the comment period, the docket can be viewed using the “Advanced Search” function in Regulations.gov. • Postal Mail/Commercial Delivery:
Please send four copies of your comment (an original and three copies) to Docket No. 00-014-2, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. 00-014-2. *Reading Room:* You may read any comments that we receive on the risk assessment in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC.
Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Mr. Robert L. Griffin, Director, Plant Epidemiology and Risk Analysis Laboratory, Center for Plant Health Science and Technology, PPQ, APHIS, 1017 Main Campus Drive Suite 1550, Raleigh, NC 27606-5202;
(919)513-1590. SUPPLEMENTARY INFORMATION: Background The Plant Protection Act (7 U.S.C. 7701-7772 and 7781-7786) authorizes the Secretary of Agriculture to prohibit or restrict the importation and entry into the United States of any plants and plant products, including fruits and vegetables, to prevent the introduction of plant pests or noxious weeds into the United States. Under this authority, the Animal and Plant Health Inspection Service (APHIS) of the United States Department of Agriculture
(USDA)administers regulations in “Subpart-Fruits and Vegetables” (7 CFR 319.56 through 319.56-8) that prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests. The regulations require some fruits and vegetables to be accompanied by a phytosanitary certificate
(PC)to ensure freedom from certain plant pests. PCs are in wide use in international trade. APHIS issues hundreds of thousands of PCs each year to facilitate the export of U.S. agricultural products to countries that require certificates to accompany such products. On August 4, 1995, we published an advance notice of proposed rulemaking in the **Federal Register** (60 FR 39888-39889, Docket No. 95-046-1). The 1995 advance notice of proposed rulemaking sought comments on whether all fruits and vegetables imported into the United States should be accompanied by a PC. This included commercial shipments of fruits and vegetables as well as produce brought into the United States by individuals for personal use. On August 29, 2001, we published in the **Federal Register** (66 FR 45637-45648, Docket No. 00-014-1) a proposal to amend the regulations to require that a PC accompany all fruits and vegetables imported into the United States, with certain exceptions. We proposed to require a PC for commercial shipments of produce imported into the United States, as well as for fruits and vegetables brought in by most travelers. We proposed to exempt fruits and vegetables that are dried, cured, frozen, or processed, as well as fruits and vegetables that individuals bring into the United States for personal use through land border ports located along the Canadian and Mexican borders. We solicited comments concerning our proposal for 60 days ending October 29, 2001. We received a total of 47 comments by that date from domestic growers, importers, and other shippers of fruits and vegetables; farm bureaus, marketing associations, and trade associations; State departments of agriculture; foreign governments; and others. A majority of the comments received generally opposed the proposed rule. A smaller number of comments supported the concept of requiring PCs, but took exception with certain provisions in the proposal. Several commenters who opposed the proposed rule stated that they did not believe that the risk-reduction benefits of requiring PCs were justified by the potential costs to commercial fruit and vegetable producers, importers, and others of complying with the requirements. Commenters also claimed that requiring phytosanitary certificates without a risk analysis that considers that broad use would be inconsistent with international trade agreements. In response to these comments, at this time, we are considering adopting only the proposed requirements that pertain to fruits and vegetables imported in air passenger baggage and have prepared a risk assessment that provides the basis for that approach. The risk assessment that we prepared pertains to the plant pest risk posed by fruits and vegetables imported in air passenger baggage. We are making the risk assessment, titled “Qualitative Assessment of Plant Pest Risk Associated with Fruits and Vegetables in Passenger Baggage and the Probable Impact of Phytosanitary Certification Requirements,” available to the public for review and comment. We will consider all comments that we receive on or before the date listed under the heading DATES at the beginning of this notice. After reviewing the comments, if it still appears to be an appropriate course of action, we anticipate issuing a final rule to PCs for fruits and vegetables imported for personal use by air passengers. We may at some future time, reconsider some of the other provisions discussed in the original proposed rule, such as requiring PCs for certain commercial shipments. The risk assessment may be viewed on the Internet on the Regulations.gov Web site (see ADDRESSES above for instructions for accessing Regulations.gov). You may also request paper copies of the risk assessment by calling or writing to the person listed under FOR FURTHER INFORMATION CONTACT . Please refer to the title of the risk assessment when requesting copies. The risk assessment is also available for review in our reading room (information on the location and hours of the reading room is provided under the heading ADDRESSES at the beginning of this notice). Authority: 7 U.S.C. 450, 7701-7772, and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. Done in Washington, DC, this 18th day of May 2006. W. Ron DeHaven, Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-7923 Filed 5-23-06; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [REG-139059-02] RIN 1545-BB86 Expenses for Household and Dependent Care Services Necessary for Gainful Employment AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: This document contains proposed regulations regarding the credit for expenses for household and dependent care services necessary for gainful employment. The proposed regulations reflect statutory amendments under the Deficit Reduction Act of 1984, the Omnibus Budget Reconciliation Act of 1987, the Family Support Act of 1988, the Small Business Job Protection Act of 1996, the Economic Growth and Tax Relief Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002, and the Working Families Tax Relief Act of 2004. The proposed regulations affect taxpayers who claim the credit for household and dependent care services and dependent care providers. DATES: Written or electronic comments must be received by August 22, 2006. ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-139059-02), room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-139059-02), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. Alternatively, taxpayers may submit electronic comments directly to the IRS Internet site at *http://www.irs.gov/regs* or via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS and REG-139059-02). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Sara Shepherd
(202)622-4960: Concerning submissions of comments or a request for a public hearing, Richard Hurst, *richard.a.hurst@irscounsel.treas.gov,* or
(202)622-7180 (not toll free numbers). SUPPLEMENTARY INFORMATION: Background This document contains proposed amendments to the Income Tax Regulations, 26 CFR part 1, relating to the credit for household and dependent care services necessary for gainful employment (the credit) under section 21 of the Internal Revenue Code (Code). The credit was originally enacted as section 44A. Final regulations under section 44A were published as ”1.44A-1 through 1.44-4 on August 27, 1979 (section 44A regulations). Section 44A was amended and renumbered section 21 by sections 423 and 471, respectively, of the Deficit Reduction Act of 1984 (Pub. L. 98-369, 98 Stat. 494). Section 21 was amended by section 10101 of the Omnibus Budget Reconciliation Act of 1987 (Pub. L. 100-203, 101 Stat. 1330), section 703 of the Family Support Act of 1988 (Pub. L. 100-485, 102 Stat. 2343), section 1615 of the Small Business Job Protection Act of 1996 (Pub. L. 104-188, 110 Stat. 1755), section 204 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (Pub. L. 107-16, 115 Stat. 38), section 418 of the Job Creation and Worker Assistance Act of 2002 (Pub. L. 107-147, 116 Stat. 21), and sections 203 and 207 of the Working Families Tax Relief Act of 2004 (Pub. L. 108-311, 118 Stat. 1166), as well as other legislation that enacted clerical and conforming changes. Section 21 allows a nonrefundable credit for a percentage of expenses for household and dependent care services necessary for gainful employment. For taxable years beginning after December 31, 2004, the credit is available to a taxpayer if there are one or more qualifying individuals with respect to that taxpayer. For those years, a *qualifying individual* is defined in section 21(b)(1) as the taxpayer's dependent (as defined in section 152(a)(1)) who has not attained age 13, the taxpayer's dependent who is physically or mentally incapable of self-care and who has the same principal place of abode as the taxpayer for more than one-half of the taxable year, or the taxpayer's spouse who is physically or mentally incapable of self-care and who has the same principal place of abode as the taxpayer for more than one-half of the taxable year. For taxable years beginning before January 1, 2005, the credit is available to taxpayers who maintained households that include one or more qualifying individuals. For those years, a *qualifying individual* is defined in section 21(b)(1) as the taxpayer's dependent (as defined in section 151(c) as then in effect) under age 13, the taxpayer's dependent who is physically or mentally incapable of self-care, or the taxpayer's spouse who is physically or mentally incapable of self-care. Under section 21(a), the amount of the credit is equal to the applicable percentage of employment-related expenses paid by the taxpayer during the taxable year. The applicable percentage ranges from 20 percent to 35 percent depending on the taxpayer's adjusted gross income. Section 21(c) limits the amount of employment-related expenses that may be taken into account in determining the credit in any taxable year to $2,400 if there is one qualifying individual and $4,800 if there are two or more qualifying individuals. These amounts are increased, respectively, to $3,000 and $6,000 in taxable years beginning after December 31, 2002, and before January 1, 2011. Section 21(d) further limits the amount of employment-related expenses that may be taken into account in determining the credit to the lesser of the earned income of the taxpayer or the taxpayer's spouse (if any). The earned income for each month in which a taxpayer's spouse is a full-time student or incapable of self-care is deemed to be $200 (for one qualifying individual) or $400 (for two or more qualifying individuals), increased to $250 and $500 for taxable years beginning after December 31, 2002, and before January 1, 2011. Section 21(b)(2) defines employment-related expenses as amounts paid for household services and expenses for the care of a qualifying individual that enable the taxpayer to be gainfully employed for any period for which there are one or more qualifying individuals with respect to the taxpayer. Explanation of Provisions 1. Overview The proposed regulations incorporate many of the rules in the section 44A regulations, but are renumbered, restructured, and revised to improve clarity. The proposed regulations reflect statutory amendments enacted since publication of the section 44A regulations. Accordingly, the proposed regulations include a change in the definition of a qualifying individual, a reduction in the maximum age of a qualifying child from under 15 to under 13, and an increase in the maximum amount of creditable expenses and the monthly amount of deemed earned income of a spouse who is a full-time student or incapable of self-care for taxable years beginning after December 31, 2002, and before January 1, 2011. The proposed regulations provide additional rules that address significant issues that have arisen administratively since publication of the section 44A regulations and expand the number of examples. The substantive revisions, additions, and significant clarifications to the section 44A regulations are described below. 2. Taxable Year of Credit Section 21 refers interchangeably to expenses “paid” by the taxpayer and expenses “incurred” by the taxpayer. Section 1.44A-1(a)(3) reconciles this use of various tax accounting terms by providing that, regardless of the taxpayer's method of accounting, the credit is allowable only for expenses both “paid” during the taxable year and “incurred” during the taxable year or an earlier taxable year. The proposed regulations restate this rule in plain language and provide that the credit is allowable only in the taxable year in which the services are provided or the taxable year in which the expenses are paid, whichever is later, regardless of the taxpayer's method of accounting. 3. Special Rule for Children of Separated or Divorced Parents Section 21(e)(5) provides that, in the case of a child of divorced or separated parents, only the custodial parent may claim the credit, regardless of whether the noncustodial parent may claim the dependency exemption under section 152(e). The proposed regulations define custodial parent consistently with section 152(e)(3)(A) as the parent with whom the child shares the same principal place of abode for the greater portion of the calendar year. 4. Employment-Related Expenses Under section 21(b)(2)(A), expenses are employment-related only if
(1)the expenses are primarily for household services or for the care of a qualifying individual, and
(2)the taxpayer's purpose in obtaining the services is to enable the taxpayer to be gainfully employed. a. Nature of the Services Provided
(1)Expenses for Nursery School and Kindergarten The section 44A regulations provide that expenses are primarily for the care of a qualifying individual if the primary nature of the services is to ensure the qualifying individual's well-being and protection. Amounts paid for food, lodging, clothing, or education are not for the care of a qualifying individual. However, if these services are incidental to and inseparably a part of the care of a qualifying individual, the entire amount of the expense is deemed to be for care. Section 1.44A-1(c)(3)(i). Section 1.44A-1(c)(3)(i) provides an example that concludes that the full amount paid to a nursery school is for the care of a qualifying child even though the school furnishes lunch and educational services. Although intended to illustrate the incidental services rule, the example assumes that expenses for nursery school are for care. Section 1.44A-1(c)(3)(i) also provides that expenses for education in the first or higher grade are not for the care of a qualifying individual. The section 44A regulations do not address expenses for kindergarten. The proposed regulations provide the rule that the expenses of pre-school or similar programs below the kindergarten level are for care and may be employment-related expenses, if otherwise qualified, although education may be a significant part of these programs. The proposed regulations clarify the existing rule that expenses for programs at the level of kindergarten and above, however, are primarily for education and, therefore, are not employment-related expenses.
(2)Specialty Day Camps Section 21(b)(2)(A) provides that expenses for overnight camps are not employment-related expenses. Expenses for day camps may be employment-related expenses, if otherwise qualified. The IRS has received many inquiries about whether the cost of a day camp that specializes in a particular activity, such as soccer or computers, may be an employment-related expense. To provide certainty for taxpayers and enhance administrability, the proposed regulations provide that the full amount paid for a day camp or similar program may be for the care of a qualifying individual although the camp specializes in a particular activity.
(3)Transportation Expenses Section 1.44A-1(c)(3)(i) provides that expenses for transportation of a qualifying individual between the taxpayer's household and a place outside the taxpayer's household where care is provided are not for care. The proposed regulations provide that the cost of transportation (such as transportation to a day camp or to an after-school program not on school premises) furnished by a dependent care provider may be an employment-related expense if all other applicable requirements are satisfied.
(4)Other Expenses For Care Section 1.44A-1(c)(1)(i) provides that employment taxes that a taxpayer pays are employment-related expenses if the related wages are employment-related expenses. Rev. Rul. 76-288 (1976-2 C.B. 83) holds that additional costs for a care provider's room and board are employment-related expenses. The proposed regulations incorporate these rules. Additionally, the proposed regulations clarify that indirect expenses such as application and agency fees may be employment-related expenses if the taxpayer is required to pay the expenses to obtain the care. b. Expenses To Enable the Taxpayer To Be Gainfully Employed Under section 21(b)(2)(A), an expense may be an employment-related expense only if its purpose is to enable the taxpayer to be gainfully employed. Section 1.44A-1(c)(1)(i) provides that an expense must be incurred while the taxpayer is gainfully employed or is in active search of gainful employment. An expense is not employment-related, however, merely because the services are provided while the taxpayer is employed. Rather, the purpose of the expense must be to enable the taxpayer to be gainfully employed. Rev. Rul. 76-278 (1976-2 C.B. 84) holds that expenses for dependent care services during a taxpayer's 6-month absence from work due to illness do not qualify as employment-related expenses although the taxpayer was gainfully employed during that period. The expenses were not for the purpose of enabling the taxpayer to be gainfully employed because the expenses did not contribute to the taxpayer's ability to be gainfully employed during the absence. Section 1.44A-1(c)(1)(ii) provides that a taxpayer must allocate on a daily basis expenses that relate to a period during only part of which the taxpayer is gainfully employed or in search of gainful employment. The proposed regulations clarify how this rule applies to temporary absences from work and part-time employment. The proposed regulations provide that, in general, dependent care expenses for a period in which the taxpayer is absent from work (whether paid or unpaid) are not employment-related expenses. However, for administrative convenience, short, temporary absences from work, such as for minor illness or vacation, are disregarded for taxpayers who must pay for dependent care expenses on a weekly or longer basis. Whether an absence is short and temporary depends on the facts and circumstances. The IRS and the Treasury Department request comments on appropriate periods to constitute temporary absence safe harbors. The proposed regulations provide that, in general, taxpayers who work part-time must allocate expenses between days worked and days not worked. However, taxpayers who work part-time but are required to pay for dependent care expenses on a weekly or longer basis are not required to allocate expenses between days worked and days not worked. 5. Limitations on Amount Creditable a. Application of Dollar Limitation to Two or More Qualifying Individuals Under section 21(c), the amount of employment-related expenses that a taxpayer may take into account in any taxable year is $2,400 for one qualifying individual and $4,800 for more than one qualifying individual (increased to $3,000 and $6,000 for taxable years beginning after December 31, 2002, and before January 1, 2011). The proposed regulations clarify that a taxpayer may apply the limitation for two or more qualifying individuals in unequal proportions. Thus, if in taxable year 2004 a taxpayer pays $4,000 of employment-related expenses for the care of one child and $2,000 for another child, the taxpayer may take into account the full $6,000. b. Earned Income Limitation Section 21(d) provides that the amount of employment-related expenses that may be taken into account during any taxable year cannot exceed the taxpayer's earned income or, if married, the earned income of the taxpayer's spouse (whichever is less). A spouse who is a full-time student or is incapable of self-care is deemed to have earned income for each month of not less than $200 if there is one qualifying individual or $400 if there are two or more qualifying individuals with respect to the taxpayer for the taxable year. These amounts are increased, respectively, to $250 and $500 for taxable years beginning after December 31, 2002, and before January 1, 2011. Section 1.44A-2(b)(2) provides a definition of *earned income* that is similar to the definition under section 32 (relating to the earned income credit) and the regulations thereunder. Since this regulation was issued, the section 32 definition has changed several times. For ease of administration, the proposed regulations simplify the definition of earned income by cross-referencing the definition under section 32. Section 1.44A-2(b)(3)(ii) defines a *full-time student* as a student pursuing a full-time course of study, which cannot be exclusively at night. The proposed regulations delete the night school restriction. 6. Cost of Maintaining a Household For taxable years beginning before January 1, 2005, section 21(a)(1) provides that the credit is available to a taxpayer who maintains a household that includes one or more qualifying individuals. For those years, section 21(e)(1) provides that a taxpayer is treated as maintaining a household for any period only if over half the cost of maintaining the household is furnished by the taxpayer or by the taxpayer and spouse (if any). Section 1.44A-1(d)(3) defines *cost of maintaining a household* substantially identically to the definition in § 1.2-2(d) (relating to the head of household filing status). For simplicity, the proposed regulations cross-reference to the definition of *cost of maintaining a household* in § 1.2-2(d) without regard to the last sentence of that paragraph. In lieu of that sentence, the proposed regulations provide that, for purposes of section 21, the cost of maintaining a household does not include the value of services performed in the household by the taxpayer or a qualifying individual, or expenses paid or reimbursed by another person. 7. Principal Place of Abode For taxable years beginning after December 31, 2004, the principal place of abode test statutorily replaces the maintaining a household test. Under section 21(b)(1), a qualifying individual must have the same principal place of abode as the taxpayer for more than one-half of the taxable year. For simplicity, the proposed regulations provide that *principal place of abode* has the same meaning as in section 152 and the regulations thereunder. 8. Definition of Marital Status Under section 21(e)(2), the credit is allowed to married taxpayers only if they file a joint return. Section 21(e)(3) provides that taxpayers who are legally separated under a decree of divorce or separate maintenance are not married. The proposed regulations, in general, adopt the rules of section 7703 and the regulations thereunder to determine whether taxpayers are married for purposes of section 21. However, to maintain continued consistency with section 21(e)(3), the proposed regulations provide, in addition, that taxpayers who are legally separated under a decree of divorce or separate maintenance are not married. 9. Payments to Related Individuals Section 21(e)(6) provides that payments to a taxpayer's dependent or child under age 19 do not qualify for the credit. Payments to a relative may qualify for the credit if the relative is not a dependent. The proposed regulations clarify that payments to either the taxpayer's spouse or to a parent of the taxpayer's child who is not the taxpayer's spouse do not qualify for the credit. This rule is consistent with the requirement that a married couple must file a joint return to qualify for the credit, and with the principle that the tax treatment of a payment with respect to a child may be affected by an individual's underlying legal obligation to the child. See section 21(e)(2); compare section 677(b). 10. Proposed Effective Date The regulations are proposed to apply to taxable years ending after the date the regulations are published as final regulations in the **Federal Register** . However, taxpayers may apply the proposed regulations in taxable years for which the period of limitation on credit or refund under section 6511 has not expired as of May 24, 2006. 11. Effect on Other Documents When finalized, the regulations would obsolete Rev. Rul. 76-278 (1976-2 C.B. 84) and Rev. Rul. 76-288 (1976-2 C.B. 83). Special Analyses This notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. Section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and 8 copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the **Federal Register** . Drafting Information The principal author of these proposed regulations is Warren Joseph of the Office of Associate Chief Counsel (Income Tax and Accounting). However, other personnel from the IRS and Treasury Department participated in their development. List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 602 Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR parts 1 and 602 are proposed to be amended as follows: PART I—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * Section 1.21-1 also issued under 26 U.S.C. 21(f). Section 1.21-2 also issued under 26 U.S.C. 21(f). Section 1.21-3 also issued under 26 U.S.C. 21(f). Section 1.21-4 also issued under 26 U.S.C. 21(f) * * * § 1.21-1 [Redesignated] **Par. 2.** Section 1.21-1 is redesignated 1.15-1. **Par. 3.** Sections 1.21-1, 1.21-2, 1.21-3, and 1.21-4 are added to read as follows: § 1.21-1 Expenses for household and dependent care services necessary for gainful employment.
(a)*In general.*
(1)Section 21 allows a credit to a taxpayer against the tax imposed by chapter 1 for employment-related expenses for household services and care (as defined in paragraph
(d)of this section) of a qualifying individual (as defined in paragraph
(b)of this section). The purpose of the expenses must be to enable the taxpayer to be gainfully employed (as defined in paragraph
(c)of this section). For taxable years beginning after December 31, 2004, a qualifying individual must have the same principal place of abode (as defined in paragraph
(g)of this section) as the taxpayer for more than one-half of the taxable year. For taxable years beginning before January 1, 2005, the taxpayer must maintain a household (as defined in paragraph
(h)of this section) that includes one or more qualifying individuals.
(2)The amount of the credit is equal to the applicable percentage of the employment-related expenses that may be taken into account by the taxpayer during the taxable year (but subject to the limits prescribed in § 1.21-2). *Applicable percentage* means 35 percent reduced by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $15,000, but not less than 20 percent. For example, if a taxpayer's adjusted gross income is $31,850, the applicable percentage is 26 percent.
(3)Expenses may be taken into account, regardless of the taxpayer's method of accounting, only in the taxable year the services are provided or the taxable year the expenses are paid, whichever is later.
(4)The requirements of section 21 and §§ 1.21-1 through 1.21-4 are applied at the time the services are provided, regardless of when the expenses are paid.
(b)*Qualifying individual* —(1) *In general* . For taxable years beginning after December 31, 2004, a qualifying individual is—
(i)The taxpayer's dependent (who is a qualifying child within the meaning of section 152) who has not attained age 13;
(ii)The taxpayer's dependent who is physically or mentally incapable of self-care and who has the same principal place of abode as the taxpayer for more than one-half of the taxable year; or
(iii)The taxpayer's spouse who is physically or mentally incapable of self-care and who has the same principal abode as the taxpayer for more than one-half of the taxable year.
(2)*Taxable years beginning before January 1, 2005* . For taxable years beginning before January 1, 2005, a qualifying individual is—
(i)The taxpayer's dependent for whom the taxpayer is entitled to a deduction for a personal exemption under section 151(c) and who is under age 13;
(ii)The taxpayer's dependent who is physically or mentally incapable of self-care; or
(iii)The taxpayer's spouse who is physically or mentally incapable of self-care.
(3)*Qualification on a daily basis* . The status of an individual as a qualifying individual is determined on a daily basis. An individual is not a qualifying individual on the day the status terminates.
(4)*Physical or mental incapacity* . An individual is physically or mentally incapable of self-care if, as a result of a physical or mental defect, the individual is incapable of caring for the individual's hygiene or nutritional needs, or requires full-time attention of another person for the individual's own safety or the safety of others. The inability of an individual to engage in any substantial gainful activity or to perform the normal household functions of a homemaker or care for minor children by reason of a physical or mental condition does not of itself establish that the individual is physically or mentally incapable of self-care.
(5)*Special test for divorced or separated parents* —(i) *Scope* . This paragraph (b)(5) applies to a child (as defined in section 152(f)(1) for taxable years beginning after December 31, 2004, and in section 151(c)(3) for taxable years beginning before January 1, 2005) who—
(A)Is under age 13 or is physically or mentally incapable of self-care;
(B)Receives over one-half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance or who are separated under a written separation agreement; and
(C)Is in the custody of one or both parents for more than one-half of the calendar year.
(ii)*Custodial parent allowed the credit* . A child to whom this paragraph (b)(5) applies is the qualifying individual of only one parent in any taxable year and is the qualifying child of the custodial parent even if the noncustodial parent may claim the dependency exemption for that child for that taxable year. See section 152(e). The custodial parent is the parent with whom a child shared the same principal place of abode for the greater portion of the calendar year. See section 152(e)(3)(A).
(c)*Gainful employment* —(1) *In general* . Expenses are employment-related expenses only if they are for the purpose of enabling the taxpayer to be gainfully employed. The expenses must be for the care of a qualifying individual or household services provided during periods in which the taxpayer is gainfully employed or is in active search of gainful employment. Employment may consist of service within or outside the taxpayer's home and includes self-employment. An expense is not employment-related merely because it is paid or incurred while the taxpayer is gainfully employed. The purpose of the expense must be to enable the taxpayer to be gainfully employed. Whether the purpose of an expense is to enable the taxpayer to be gainfully employed depends on the facts and circumstances of the particular case. Work as a volunteer or for a nominal consideration is not gainful employment.
(2)*Determination of period of employment on a daily basis* —(i) *In general* . Expenses paid for a period during only part of which the taxpayer is gainfully employed or in active search of gainful employment must be allocated on a daily basis.
(ii)*Exception for short temporary absences* . A taxpayer who is gainfully employed and who pays for dependent care expenses on a weekly, monthly, or annual basis is not required to allocate expenses during short, temporary absences from work, such as for vacation or minor illness. Whether an absence is a short, temporary absence is determined based on all the facts and circumstances.
(iii)*Part-time employment* . A taxpayer who is employed part-time generally must allocate expenses for dependent care between days worked and days not worked. However, if a taxpayer employed part time is required to pay for dependent care on a periodic basis (such as weekly or monthly) that includes both days worked and days not worked, the taxpayer is not required to allocate the expenses. A day on which the taxpayer works at least 1 hour is a day of work.
(3)*Examples* . The provisions of this paragraph
(c)are illustrated by the following examples: Example 1. B, the custodial parent of two qualifying children, hires a housekeeper for a monthly salary to care for the children while B is gainfully employed. B becomes ill and as a result is absent from work for 4 months. B continues to pay the housekeeper to care for the children while B is absent from work. During this 4-month period, B performs no employment services, but receives payments under her employer's wage continuation plan. Although B may be considered to be gainfully employed during her absence from work, the absence is not a short, temporary absence within the meaning of paragraph (c)(2)(ii) of this section, and her payments for household and dependent care services during the period of illness are not for the purpose of enabling her to be gainfully employed. B's expenses are not employment-related expenses, and she may not take the expenses into account under section 21. Example 2. C works 5 days per week and his child attends a dependent care center (that complies with all state and local requirements) to enable C to be gainfully employed. The dependent care center requires payment for periods of no less than 1 week. C takes 2 days off from work as vacation days. Under paragraph (c)(2)(ii) of this section, C is absent from work on a short, temporary basis, and is not required to allocate expenses between days working and days not working. The entire fee for that week may be an employment-related expense under section 21. Example 3. D works 3 days per week and her child attends a dependent care center (that complies with all state and local requirements) to enable her to be gainfully employed. The dependent care center allows payment for any 3 days per week for $150 or 5 days per week for $250. D enrolls her child for 5 days per week. Under paragraph (c)(2)(iii) of this section, D must allocate her expenses for dependent care between days worked and days not worked. Three-fifths of the $250, or $150 per week, may be an employment-related expense under section 21. Example 4. The facts are the same as in *Example 3,* except that the dependent care center does not offer a 3-day option. The entire $250 weekly fee may be an employment-related expense under section 21.
(d)*Care of qualifying individual and household services* —(1) *In general* . To qualify for the dependent care credit, expenses must be for the care of a qualifying individual. Expenses are for the care of a qualifying individual if the primary function is to assure the individual's well-being and protection. Not all expenses relating to a qualifying individual are provided for the individual's care. Amounts paid for food, lodging, clothing, or education are not for the care of a qualifying individual. If, however, the care is provided in such a manner that the expenses cover other goods or services that are incidental to and inseparably a part of the care, the full amount is for care.
(2)*Allocation of expenses* . If an expense is partly for household services or for the care of a qualifying individual and partly for other goods or services, a reasonable allocation must be made. Only so much of the expense that is allocable to the household services or care of a qualifying individual is an employment-related expense. An allocation must be made if a housekeeper or other domestic employee performs household duties and cares for the qualifying children of the taxpayer and also performs other services for the taxpayer. No allocation is required, however, if the expense for the other purpose is minimal or insignificant or if an expense is partly attributable to the care of a qualifying individual and partly to household services.
(3)*Household services* . Expenses for household services may be employment-related expenses if the services are provided in connection with the care of a qualifying individual. The household services must be the performance in and about the taxpayer's home of ordinary and usual services necessary to the maintenance of the household and attributable to the care of the qualifying individual. Services of a housekeeper are household services within the meaning of this paragraph (d)(3) if part of those services is provided to the qualifying individual. Such services as are provided by chauffeurs, bartenders, or gardeners are not household services.
(4)*Manner of providing care* . The manner of providing the care need not be the least expensive alternative available to the taxpayer. The cost of a paid caregiver may be an expense for the care of a qualifying individual even if another caregiver is available at no cost.
(5)*School or similar program* . Expenses for a child in nursery school, pre-school, or similar programs for children below the level of kindergarten are for the care of a qualifying individual and may be employment-related expenses. Expenses for a child in kindergarten or a higher grade are not for the care of a qualifying individual. However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be for the care of a qualifying individual.
(6)*Overnight camps* . Expenses for overnight camps are not employment-related expenses.
(7)*Day camps* . The cost of a day camp or similar program may be for the care of a qualifying individual and an employment-related expense, without allocation under paragraph (d)(2) of this section, even if the day camp specializes in a particular activity.
(8)*Transportation* . The cost of transportation by a dependent care provider of a qualifying individual to or from a place where care of that qualifying individual is provided may be for the care of the qualifying individual. The cost of transportation not provided by a dependent care provider is not for the care of the qualifying individual.
(9)*Employment taxes* . Taxes under section 3111 (relating to the Federal Insurance Contributions Act) and 3301 (relating to the Federal Unemployment Tax Act) and similar state payroll taxes are employment-related expenses if paid in respect of wages that are employment-related expenses.
(10)*Room and board* . The additional cost of providing room and board for a caregiver over usual household expenditures may be an employment-related expense.
(11)*Indirect expenses* . Expenses that relate to but are not directly for the care of a qualifying individual, such as application fees, agency fees, and deposits, may be for the care of a qualifying individual and may be employment-related expenses if the taxpayer is required to pay the expenses to obtain the related care. However, forfeited deposits and other payments are not for the care of a qualifying individual if care is not provided.
(12)*Examples* . The provisions of this paragraph
(d)are illustrated by the following examples: Example 1. To be gainfully employed, E sends his 3-year old child to a pre-school. The pre-school provides lunch and snacks. Under paragraph (d)(1) of this section, E is not required to allocate expenses between care and the lunch and snacks because the lunch and snacks are incidental to and inseparably a part of the care. Therefore, E may treat the full amount paid to the pre-school as for the care of his child. Example 2. F, a member of the armed forces, is ordered to a combat zone. To be able to comply with the orders, F places her 10-year old child in boarding school. The school provides education, meals, and housing to F's child in addition to care. Under paragraph (d)(2) of this section, F must allocate the cost of the boarding school between expenses for care and expenses for education and other services not constituting care. Only the part of the cost of the boarding school that is for the care of F's child is an employment-related expense under section 21. Example 3. To be gainfully employed, G employs a full-time housekeeper to care for G's two children, aged 9 and 13 years. The housekeeper regularly performs household services of cleaning and cooking and drives G to and from G's place of employment, a trip of 15 minutes each way. Under paragraph (d)(3) of this section, the chauffeur services are not household services. G is not required to allocate a portion of the expense of the housekeeper to the chauffeur services, however, because the chauffeur services are minimal and insignificant. Further, no allocation under paragraph (d)(2) of this section is required to determine the portion of the expenses attributable to the care of the 13-year old child (not a qualifying individual) because the household expenses are in part attributable to the care of the 9-year old child. Accordingly, the entire expense of employing the housekeeper is an employment-related expense. The amount that G may take into account as an employment-related expense under section 21, however, is limited to the amount allowable for one qualifying individual. Example 4. To be gainfully employed, H sends her 9-year old child to a summer day camp that specializes in computer instruction and activities. Under paragraph (d)(7) of this section, the full cost of the summer day camp may be for care although it specializes in a particular activity, computers. Example 5. In 2004, J pays a fee to an agency to obtain the services of an au pair to care for J's qualifying children to enable J to be gainfully employed. The au pair begins caring for J's children in 2005. Under paragraph (d)(11) of this section, the fee paid in 2004 may be an employment-related expense. However, under paragraph (a)(3) of this section, J may not take the expense into account under section 21 until 2005, when the au pair first provides the care. Example 6. K places a deposit with a pre-school to reserve a place for her child. K sends the child to another pre-school and forfeits the deposit. Under paragraph (d)(11) of this section, the forfeited deposit is not an employment-related expense.
(e)*Services outside the taxpayer's household* —(1) *In general* . The credit is allowable for expenses for services performed outside the taxpayer's household only if the care is for one or more qualifying individuals who are described in this section at—
(i)Paragraph (b)(1)(i) or (b)(2)(i); or
(ii)Paragraph (b)(2)(ii) or (b)(2)(iii) and regularly spend at least 8 hours each day in the taxpayer's household.
(2)*Dependent care centers* —(i) *In general* . The credit is allowable for services provided by a dependent care center only if—
(A)The center complies with all applicable laws and regulations, if any, of a state or local government, such as state or local licensing requirements and building and fire code regulations; and
(B)The requirements provided in this paragraph
(e)are met.
(ii)*Definition* . The term *dependent care center* means any facility that provides full-time or part-time care for more than six individuals (other than individuals who reside at the facility) on a regular basis during the taxpayer's taxable year, and receives a fee, payment, or grant for providing services for the individuals (regardless of whether the facility is operated for profit). For purposes of the preceding sentence, a facility is presumed to provide full-time or part-time care for six or fewer individuals on a regular basis during the taxpayer's taxable year if the facility has six or fewer individuals (including the taxpayer's qualifying individual) enrolled for full-time or part-time care on the day the qualifying individual is enrolled in the facility (or on the first day of the taxable year the qualifying individual attends the facility if the qualifying individual was enrolled in the facility in the preceding taxable year) unless the Internal Revenue Service demonstrates that the facility provides full-time or part-time care for more than six individuals on a regular basis during the taxpayer's taxable year.
(f)*Reimbursed expenses* . Employment-related expenses for which the taxpayer is reimbursed (for example, under a dependent care assistance program) may not be taken into account for purposes of the credit.
(g)*Principal place of abode* . For purposes of this section, the term principal place of abode has the same meaning as in section 152 and the regulations thereunder.
(h)*Maintenance of a household* —(1) *In general* . For taxable years beginning before January 1, 2005, the credit is available only to taxpayers who maintain households that include one or more qualifying individuals. A taxpayer maintains a household for the taxable year (or lesser period) only if the taxpayer (and spouse, if applicable) occupies the household and furnishes over one-half of the cost for the taxable year (or lesser period) of maintaining the household. The household must be the principal place of abode (within the meaning of section 152 and the regulations thereunder) for the taxable year of the taxpayer and the qualifying individual or individuals described in paragraph
(b)of this section.
(2)*Cost of maintaining a household* .
(i)Except as provided in paragraph (h)(2)(ii) of this section, for purposes of this section, the term cost of maintaining a household has the same meaning as in § 1.2-2(d) without regard to the last sentence thereof.
(ii)The cost of maintaining a household does not include the value of services performed in the household by the taxpayer or by a qualifying individual described in paragraph
(b)of this section or any expense paid or reimbursed by another person.
(3)*Monthly proration of annual costs* . In determining the cost of maintaining a household for a period of less than a taxable year, the cost for the entire taxable year must be prorated on the basis of the number of calendar months within that period. A period of less than a calendar month is treated as a full calendar month.
(4)*Two or more families* . If two or more families occupy living quarters in common, each of the families is treated as maintaining a separate household. A taxpayer is maintaining a household if the taxpayer provides more than one-half of the cost of maintaining the separate household. For example, if two unrelated taxpayers with their respective children occupy living quarters in common and each taxpayer pays more than one-half of the household costs for each respective family, each taxpayer is treated as maintaining a household.
(i)Reserved.
(j)*Expenses qualifying as medical expenses* —(1) *In general* . A taxpayer may not take an amount into account as both an employment-related expense under section 21 and an expense for medical care under section 213.
(2)*Examples.* The provisions of this paragraph
(j)are illustrated by the following examples: Example 1. During 2004, L has $6,500 of employment-related expenses for the care of his child who is physically incapable of self-care. The expenses are for services performed in L's household that also qualify as expenses for medical care under section 213. Of the total expenses, L may take into account $3,000 under section 21. L may deduct the balance of the expenses, or $3,500, as expenses for medical care under section 213 to the extent the expenses exceed 7.5 percent of L's adjusted gross income. Example 2. The facts are the same as in *Example 1* , however, L first takes into account the $6,500 of expenses under section 213. L deducts $500 as an expense for medical care, which is the amount by which the expenses exceed 7.5 percent of his adjusted gross income. L may not take into account the $6,000 balance as employment-related expenses under section 21 because he has taken the full amount of the expenses into account in computing the amount deductible under section 213.
(k)*Substantiation.* A taxpayer claiming a credit for employment-related expenses must maintain adequate records or other sufficient evidence to substantiate the expenses in accordance with section 6001 and the regulations thereunder.
(l)*Effective date.* This section and §§ 1.21-2 through 1.21-4 apply to taxable years ending after the date these regulations are published as final regulations in the **Federal Register** . However, taxpayers may apply this section and §§ 1.21-2 through 1.21-4 in taxable years for which the period of limitation on credit or refund under section 6511 has not expired as of May 24, 2006. § 1.21-2 Limitations on amount creditable.
(a)*Annual dollar limitation.*
(1)The amount of employment-related expenses that may be taken into account under § 1.21-1(a) for any taxable year cannot exceed—
(i)$2,400 ($3,000 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there is one qualifying individual with respect to the taxpayer at any time during the taxable year; or
(ii)$4,800 ($6,000 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there are two or more qualifying individuals with respect to the taxpayer at any time during the taxable year.
(2)The amount determined under paragraph (a)(1) of this section is reduced by the aggregate amount excludable from gross income under section 129 for the taxable year.
(3)A taxpayer may take into account the total amount of employment-related expenses that do not exceed the annual dollar limitation although the amount of employment-related expenses attributable to one qualifying individual exceeds 50 percent of the limitation. For example, a taxpayer with expenses in 2004 of $4,000 for one qualifying individual and $1,500 for a second qualifying individual may take into account the full $5,500.
(4)A taxpayer is not required to prorate the annual dollar limitation if a qualifying individual ceases to qualify (for example, by turning age 13) during the taxable year. However, the taxpayer may take into account only expenses that qualify under § 1.21-1(a)(3) before the disqualifying event.
(b)*Earned income limitation* —(1) *In general.* The amount of employment-related expenses that may be taken into account under section 21 for any taxable year cannot exceed—
(i)For a taxpayer who is not married at the close of the taxable year, the taxpayer's earned income for the taxable year; or
(ii)For a taxpayer who is married at the close of the taxable year, the lesser of the taxpayer's earned income or the earned income of the taxpayer's spouse for the taxable year.
(2)*Determination of spouse.* For purposes of this paragraph (b), a taxpayer must take into account only the earned income of a spouse to whom the taxpayer is married at the close of the taxable year. The spouse's earned income for the entire taxable year is taken into account, however, even though the taxpayer and the spouse were married for only part of the taxable year. The taxpayer is not required to take into account the earned income of a spouse who died or was divorced or separated from the taxpayer during the taxable year. See § 1.21-3(b) for rules providing that certain married taxpayers legally separated or living apart are treated as not married.
(3)*Definition of earned income.* For purposes of this section, the term *earned income* has the same meaning as in section 32(c)(2) and the regulations thereunder.
(4)*Attribution of earned income to student or incapacitated spouse.*
(i)For purposes of this section, a spouse is deemed, for each month during which the spouse is a full-time student or is a qualifying individual described in § 1.21-1(b)(1)(iii) or § .21-1(b)(2)(iii), to be gainfully employed and to have earned income of not less than—
(A)$200 ($250 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there is one qualifying individual with respect to the taxpayer at any time during the taxable year; or
(B)$400 ($500 for taxable years beginning after December 31, 2002, and before January 1, 2011) if there are two or more qualifying individuals with respect to the taxpayer at any time during the taxable year.
(ii)For purposes of this paragraph (b)(4), a full-time student is an individual who is enrolled at and attends an educational institution during each of 5 calendar months of the taxpayer's taxable year for the number of course hours considered to be a full-time course of study. The enrollment for 5 calendar months need not be consecutive. See section 152(f)(2) (for taxable years beginning after December 31, 2004), or section 151(c)(4) (for taxable years beginning before January 1, 2005), and the regulations thereunder.
(iii)Earned income may be attributed under this paragraph (b)(4), in the case of any husband and wife, to only one spouse in any month.
(c)*Examples.* The provisions of this section are illustrated by the following examples: Example 1. In 2004, M, who is married, pays employment-related expenses of $5,000 for the care of one qualifying individual. M's earned income for the taxable year is $40,000 and her husband's earned income is $2,000. M did not exclude any dependent care assistance under section 129. Under paragraph (b)(1) of this section, M may take into account under section 21 only the amount of employment-related expenses that does not exceed the lesser of her earned income or the earned income of her husband, or $2,000. Example 2. The facts are the same as in *Example 1* except that M's husband is a full-time student for 9 months of the taxable year and has no earned income. Under paragraph (b)(4) of this section, M's husband is deemed to have earned income of $2,250. M may take into account $2,250 of employment-related expenses under section 21. Example 3. For all of 2004, N is a full-time student and O, N's husband, is an individual who is incapable of self-care (as defined in § 1.21-1(b)(1)(iii)). N and O have no earned income and pay expenses of $5,000 for O's care. Under paragraph (b)(4) of this section, either N or O may be deemed to have $3,000 of earned income. However, earned income may be attributed to only one spouse under paragraph (b)(4)(iii) of this section. Under the limitation in paragraph (b)(1)(ii) of this section, the lesser of N's or O's earned income is zero. N and O may not take the expenses into account under section 21.
(d)*Cross-reference.* For an additional limitation on the credit under section 21, see section 26. § 1.21-3 Special rules applicable to married taxpayers.
(a)*Joint return requirement.* No credit is allowed under section 21 for taxpayers who are married (within the meaning of section 7703 and the regulations thereunder) at the close of the taxable year unless the taxpayer and spouse file a joint return for the taxable year. See section 6013 and the regulations thereunder relating to joint returns of income tax by husband and wife.
(b)*Taxpayers treated as not married.* The requirements of paragraph
(a)of this section do not apply to a taxpayer who is legally separated under a decree of divorce or separate maintenance or who is treated as not married under section 7703(b) and the regulations thereunder (relating to certain married taxpayers living apart). A taxpayer who is treated as not married under this paragraph
(b)is not required to take into account the earned income of the taxpayer(s) spouse for purposes of applying the earned income limitation on the amount of employment-related expenses under § 1.21-2(b).
(c)*Death of married taxpayer.* If a married taxpayer dies during the taxable year and the survivor may make a joint return with respect to the deceased spouse under section 6013(a)(3), the credit is allowed for the year only if a joint return is made. If, however, the surviving spouse remarries before the end of the taxable year in which the deceased spouse dies, a credit may be allowed on the decedent spouse(s separate return. § 1.21-4 Payments to certain related individuals.
(a)*In general.* A credit is not allowed under section 21 for any amount paid by the taxpayer to an individual—
(1)For whom a deduction under section 151(c) (relating to deductions for personal exemptions for dependents) is allowable either to the taxpayer or the taxpayer's spouse for the taxable year;
(2)Who is a child of the taxpayer (within the meaning of section 152(f)(1) for taxable years beginning after December 31, 2004, and section 151(c)(3) for taxable years beginning before January 1, 2005) and is under age 19 at the close of the taxable year;
(3)Who is the spouse of the taxpayer at any time during the taxable year; or
(4)Who is the parent of the taxpayer's child who is a qualifying individual described in § 1.21-1(b)(1)(i) or § 1.21-1(b)(2)(i).
(b)*Payments to partnerships or other entities.* In general, paragraph
(a)of this section does not apply to services performed by partnerships or other entities. If, however, the partnership or other entity is established or maintained primarily to avoid the application of paragraph
(a)of this section to permit the taxpayer to claim the credit, for purposes of section 21, the payments of employment-related expenses are treated as made directly to each partner or owner in proportion to that partner's or owner's ownership interest. Whether a partnership or other entity is established or maintained to avoid the application of paragraph
(a)of this section is determined based on the facts and circumstances, including whether the partnership or other entity is established for the primary purpose of caring for the taxpayer's qualifying individual or providing household services to the taxpayer.
(c)*Examples.* The provisions of this section are illustrated by the following examples: Example 1. P pays $5,000 to her mother for the care of P's 5-year old child during 2004. The expenses otherwise qualify as employment-related expenses. P's mother is not her dependent. P may take into account under section 21 the amounts paid to her mother for the care of P's child. Example 2. Q, who is divorced and has custody of his 5-year old child, pays $6,000 during 2004 to R, who is his ex-wife and the child's mother, for the care of the child. The expenses otherwise qualify as employment-related expenses. Under paragraph (a)(4) of this section, Q may not take into account under section 21 the amounts paid to R because R is the child's mother. Example 3. The facts are the same as in Example 2, except that R is not the mother of Q's child. Q may take into account under section 21 the amounts paid to R. §§ 1.44A-1 through 1.44A-4 [Removed] **Par. 4.** Sections 1.44A-1, 1.44A-2, 1.44A-3, and 1.44A-4 are removed. § 1.214-1 [Removed] **Par. 5.** Section 1.214-1 is removed. §§ 1.214A-1 through 1.214A-5 [Removed] **Par. 6.** Sections 1.214A-1, 1.214A-2, 1.214A-3, 1.214A-4, and 1.214A-5 are removed. PART 602-OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT **Par. 7.** The authority citation for part 602 continues to read as follows: Authority: 26 U.S.C. 7805. § 602.101 [Amended] **Par. 8.** In § 602.101, paragraph
(b)is amended by removing the entries for §§ 1.44A-1 and 1.44A-3. Mark E. Matthews, Deputy Commissioner for Services and Enforcement. [FR Doc. E6-7390 Filed 5-23-06; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration 23 CFR Part 1350 [Docket No. NHTSA-2006-23700] RIN 2127-AJ86 Motorcyclist Safety Grant Program AGENCY: National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: This NPRM proposes implementing regulations for the Motorcyclist Safety grant program authorized under section 2010 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) for fiscal years 2006 through 2009. Eligibility for the section 2010 grants is based on 6 statutorily specified grant criteria. To be eligible to receive an initial section 2010 grant, a State must demonstrate compliance with at least 1 of the 6 grant criteria. To be eligible to receive a grant in subsequent fiscal years, a State must demonstrate compliance with at least 2 of the 6 grant criteria. This NPRM proposes minimum requirements a State must meet and procedures a State must follow to receive a section 2010 motorcyclist safety grant. DATES: Written comments may be submitted to this agency and must be received by June 23, 2006. ADDRESSES: Comments should refer to the docket number and be submitted (preferably in two copies) to: Docket Management, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590. Alternatively, you may submit your comments electronically by logging onto the Docket Management System
(DMS)Web site at *http://dms.dot.gov.* Click on “Help” to view instructions for filing your comments electronically. Regardless of how you submit your comments, you should identify the Docket number of this document. You may call the docket at
(202)366-9324. Docket hours are 9:30 a.m. to 4 p.m., Monday through Friday. FOR FURTHER INFORMATION CONTACT: *For program issues:* Marti Miller, Office of Injury Control Operations and Resources, National Highway Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC 20590; Telephone:
(202)366-2121. *For legal issues:* Allison Rusnak, Office of the Chief Counsel, National Highway Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC 20590; Telephone:
(202)366-1834. SUPPLEMENTARY INFORMATION: Table of Contents I. Background II. Summary of SAFETEA-LU Requirements III. Proposed Qualification Requirements A. Motorcycle Rider Training Courses B. Motorcyclists Awareness Program C. Reduction of Fatalities and Crashes Involving Motorcycles D. Impaired Driving Program E. Reduction of Fatalities and Accidents Involving Impaired Motorcyclists F. Use of Fees Collected From Motorcyclists for Motorcycle Programs IV. Administrative Issues A. Application Requirements B. Awards C. Post-Award Requirements D. Uses of Grant Funds V. Comments VI. Statutory Basis for This Action VII. Regulatory Analyses and Notices A. Executive Order 12866 and DOT Regulatory Policies and Procedures B. Regulatory Flexibility Act C. Executive Order 13132 (Federalism) D. Executive Order 12988 (Civil Justice Reform) E. Paperwork Reduction Act F. Unfunded Mandates Reform Act G. National Environmental Policy Act H. Executive Order 13175 (Consultation and Coordination With Indian Tribes) I. Regulatory Identifier Number
(RIN)J. Privacy Act I. Background An estimated 128,000 motorcyclists have died in traffic crashes since the enactment of the Highway Safety Act of 1966. There are nearly 6 million motorcycles 1 registered in the United States. Motorcycles made up more than 2 percent of all registered vehicles in the United States in 2004 and accounted for an estimated 0.3 percent of all vehicle miles traveled. Per vehicle mile traveled in 2004, motorcyclists were about 34 times more likely to die and 8 times more likely to be injured in a motor vehicle traffic crash than passenger car occupants. Motorcycle rider fatalities reached a high of 5,144 in 1980. After dropping to a low of 2,116 in 1997, motorcycle rider fatalities have increased for 7 consecutive years, reaching a total of 4,008 in 2004, the last full year for which data are available—an increase of 89 percent. 1 For the purposes of the section 2010 grants, NHTSA proposes that the term “motorcycle” will have the same meaning as in 49 CFR 571.3, “a motor vehicle with motive power having a seat or saddle for the use of the rider and designed to travel on not more than three wheels in contact with the ground.” Impaired motorcycle operation contributes considerably to motorcycle fatalities and injuries. In fatal crashes in 2004, a higher percentage of motorcycle operators than any other type of motor vehicle operator had blood alcohol concentration
(BAC)levels of .08 grams per deciliter (g/dL) or higher. The percentages for vehicle operators involved in fatal crashes were 27 percent for motorcycles, as compared to 22 percent for passenger cars, 21 percent for light trucks, and 1 percent for large trucks. NHTSA traditionally promotes motorcycle safety through highway safety grants and technical assistance to States, data collection and analysis, research, and safety standards designed to contribute to the safe operation of a motorcycle. NHTSA has allocated resources to support these broad initiatives since the agency's inception in the late 1960s and has collected and analyzed data on motorcycle safety since 1975. II. Summary of SAFETEA-LU Requirements On August 10, 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) was enacted into law (Pub. L. 109-59). Section 2010 of SAFETEA-LU authorizes the Secretary of Transportation to “make grants to States that adopt and implement effective programs to reduce the number of single- and multi-vehicle crashes involving motorcyclists.” Specifically, SAFETEA-LU authorizes the Secretary to make motorcyclist safety grants available to States that meet certain criteria. Eligibility for the section 2010 grants is based on 6 grant criteria:
(1)Motorcycle Rider Training Courses;
(2)Motorcyclists Awareness Program;
(3)Reduction of Fatalities and Crashes Involving Motorcycles;
(4)Impaired Driving Program;
(5)Reduction of Fatalities and Accidents Involving Impaired Motorcyclists; and
(6)Use of Fees Collected from Motorcyclists for Motorcycle Programs. SAFETEA-LU specifies that to qualify initially for a section 2010 grant, a State must demonstrate compliance with at least 1 of the 6 grant criteria. To qualify for a grant in subsequent fiscal years, a State must demonstrate compliance with at least 2 of the 6 grant criteria. Under this new four-year grant program, which covers fiscal years 2006 through 2009, a State may use grant funds for a variety of motorcyclist safety training and motorcyclist awareness programs or it may suballocate funds to a nonprofit organization incorporated in the State to carry out grant activities. The term “State” has the same meaning as in section 101(a) of title 23, United States Code, and includes any of the fifty States, the District of Columbia and Puerto Rico. NHTSA is optimistic that the new section 2010 grant program will lead to improvements in motorcycle rider training and motorcyclist awareness and a reduction in impaired motorcycle operation as well as a decrease in fatalities and injuries resulting from crashes involving motorcycles. The statutory criteria are set forth more fully below, followed by the agency's proposed requirements to implement each of these criteria. III. Proposed Qualification Requirements A. Motorcycle Rider Training Courses To qualify for a grant based on this criterion, SAFETEA-LU requires a State to have “an effective motorcycle rider training course that is offered throughout the State, provides a formal program of instruction in accident avoidance and other safety-oriented operational skills to motorcyclists and that may include innovative training opportunities to meet unique regional needs.” Agency's Proposal (23 CFR 1350.4(a)) To implement this criterion, the agency proposes that a State, at a minimum:
(1)Use a training curriculum that is approved by the designated State authority having jurisdiction over motorcyclist safety issues, that includes a formal program of instruction in crash avoidance and other safety-oriented operational skills for both in-class and on-the-motorcycle training to motorcyclists, and that may include innovative training opportunities to meet unique regional needs; (2)(a) Offer at least one motorcycle rider training course in a majority of the State's counties or political subdivisions, or
(b)Offer at least one motorcycle rider training course in counties or political subdivisions that account for a majority of the State's registered motorcycles;
(3)To teach the curriculum, use motorcycle rider training instructors who are certified by the designated State authority having jurisdiction over motorcyclist safety issues or by a nationally recognized motorcycle safety organization with certification capability; and
(4)Use quality control procedures to assess motorcycle rider training courses and instructor training courses conducted in the State. Basis for Proposal In developing the proposed requirements for this criterion, the agency was guided by the specific language of SAFETEA-LU as well as by established motorcycle safety program guidance contained in the agency's highway safety guideline on motorcycle safety. Section 402 of title 23 of the United States Code requires the Secretary of Transportation to promulgate uniform guidelines for State highway safety programs. The motorcycle safety guideline reflects the sound science and the experience of States in motorcycle safety programs and offers direction to States in formulating their highway safety plans supported with section 402 grant funds. The guideline provides a framework for developing a balanced highway safety program and for assessing the effectiveness of motorcycle safety efforts. In order to provide the formal program of instruction in crash avoidance and other safety-oriented operational skills required by section 2010, NHTSA proposes that the State must use a curriculum approved by the designated State authority having jurisdiction over motorcyclist safety issues. Although SAFETEA-LU uses the term “motorcycle rider training” for this criterion, section 2010(f)(1) of SAFETEA-LU defines the term “motorcyclist safety training” as a “formal program of instruction * * * approved for use in a State by the designated State authority having jurisdiction over motorcyclist safety issues, which may include the State motorcycle safety administrator or motorcycle advisory council appointed by the Governor of the State.” Because of the similarity of the terms “motorcycle rider training” and “motorcyclist safety training” and the common use of the words “formal program of instruction” in both sections 2010(d)(2)(A) and (f)(1), NHTSA believes Congress intended the terms to apply synonymously, and that Congress defined “motorcyclist safety training” in order to give additional meaning to the motorcycle rider training courses criterion. Additionally, because State motorcycle rider training courses typically include both in-class and on-the-motorcycle training and NHTSA believes both are critical to the effectiveness of a motorcycle rider training course, the agency proposes that the curriculum must include both types of training. To effectuate the SAFETEA-LU requirement that a State offer its effective motorcycle rider training course throughout the State, NHTSA proposes that a State must offer at least one motorcycle rider training course in a majority of the State's counties or political subdivisions or offer at least one motorcycle rider training course in counties or political subdivisions that account for a majority of the State's registered motorcycles. For the purposes of this criterion, majority would mean greater than 50 percent. NHTSA recognizes that locations for motorcycle rider training courses may vary widely from State to State. Accordingly, the agency believes this proposal would provide flexibility to States seeking to qualify under this criterion. The agency notes that because we read the statutory language (“an effective motorcycle rider training course that is *offered* throughout the State”) (emphasis added) to contemplate that a State already offer motorcycle rider training courses when applying for these grants, the proposal would require States to submit information regarding the motorcycle rider training courses offered in the 12 months preceding the due date of the grant application. Because about half of all motorcycle-related fatalities occur in rural areas, NHTSA believes it is important that training reach motorcyclists in rural areas. Accordingly, in selecting counties or political subdivisions in which to conduct training, NHTSA encourages States to establish training courses and course locations that are accessible to both rural and urban residents. A State may offer motorcycle rider training courses throughout the State at established training centers, using mobile training units, or any other method defined as effective by the designated State authority having jurisdiction over motorcyclist safety issues. Next, NHTSA proposes that motorcycle rider training instructors be certified by either the designated State authority having jurisdiction over motorcyclist safety issues or by a nationally recognized motorcycle safety organization with certification capability. Requiring instructors to attain certification in order to teach a motorcycle rider training course would contribute to the course's effectiveness by ensuring that instructors have obtained an appropriate level of expertise qualifying them to teach a course. Finally, NHTSA proposes that to qualify for a grant under this criterion, a State must carry out quality control procedures to assess motorcycle rider training courses and instructor training courses conducted in the State. NHTSA believes quality control procedures promote course effectiveness by encouraging improvements to courses when needed. The agency's proposal does not specify the quality control procedures a State must use. Instead, the proposal would require the State to describe what quality control procedures it uses and the changes the State made to improve courses. At minimum, a State should gather evaluative information on an ongoing basis ( *e.g.* , by conducting site visits or gathering student feedback) and take actions to improve courses based on the information collected. Demonstrating Compliance (23 CFR 1350.4(a)(2), (3)) To demonstrate compliance with this criterion for the first fiscal year it seeks to qualify, a State would submit:
(1)A copy of the official State document identifying the designated State authority having jurisdiction over motorcyclist safety issues;
(2)Document(s) demonstrating that the training curriculum is approved by the designated State authority having jurisdiction over motorcyclist safety issues and includes a formal program of instruction in crash avoidance and other safety-oriented operational skills for both in-class and on-the-motorcycle training to motorcyclists; (3)(a) If the State seeks to qualify under this criterion by showing that it offers at least one motorcycle rider training course in a majority of counties or political subdivisions in the State—A list of the counties or political subdivisions in the State, noting in which counties or political subdivisions and when motorcycle rider training courses were offered in the 12 months preceding the due date of the grant application, or
(b)If the State seeks to qualify under this criterion by showing that it offers at least one motorcycle rider training course in counties or political subdivisions that account for a majority of the State's registered motorcycles—A list of the counties or political subdivisions in the State, noting in which counties or political subdivisions and when motorcycle rider training courses were offered in the 12 months preceding the due date of the grant application and the corresponding number of registered motorcycles in each county or political subdivision according to official State motor vehicle records;
(4)Document(s) demonstrating that the State uses motorcycle rider training instructors to teach the curriculum who are certified by the designated State authority having jurisdiction over motorcyclist safety issues or by a nationally recognized motorcycle safety organization with certification capability; and
(5)A brief description of the quality control procedures to assess motorcycle rider training courses and instructor training courses conducted in the State ( *e.g.* , conducting site visits, gathering student feedback) and the actions taken to improve the courses based on the information collected. To demonstrate compliance with this criterion for the second and subsequent fiscal years it seeks to qualify, a State would submit only information documenting any changes to materials previously submitted to and approved by NHTSA under this criterion, or if there have been no changes to those materials, a statement certifying that there have been no changes and that the State continues to offer the motorcycle rider training course in the same manner. B. Motorcyclists Awareness Program To qualify for a grant based on this criterion, SAFETEA-LU requires a State to have “an effective statewide program to enhance motorist awareness of the presence of motorcyclists on or near roadways and safe driving practices that avoid injuries to motorcyclists.” “Motorcyclist Awareness” is defined in section 2010(f)(2) of SAFETEA-LU as “individual or collective awareness of—(A) the presence of motorcycles on or near roadways; and
(B)safe driving practices that avoid injury to motorcyclists.” “Motorcyclist Awareness Program” is defined in section 2010(f)(3) of SAFETEA-LU as “an informational or public awareness program designed to enhance motorcyclist awareness that is developed by or in coordination with the designated State authority having jurisdiction over motorcyclist safety issues, which may include the State motorcycle safety administrator or a motorcycle advisory council appointed by the Governor of the State.” Agency's Proposal (23 CFR 1350.4(b)) To implement this criterion, the agency proposes that a State have a motorcyclist awareness program that, at a minimum:
(1)Is developed by, or in coordination with, the designated State authority having jurisdiction over motorcyclist safety issues;
(2)Uses State data to identify and prioritize the State's motorcycle safety problem areas;
(3)Encourages collaboration among agencies and organizations responsible for, or impacted by, motorcycle safety issues; and
(4)Incorporates a strategic communications plan that supports the overall policy and program, is designed to educate motorists in those jurisdictions where the incidence of motorcycle crashes is highest, includes marketing and educational efforts to enhance motorcyclist awareness, and uses a mix of communication mechanisms to draw attention to the problem. Basis for Proposal As with the Motorcycle Rider Training Course criterion, in developing the proposed requirements for this Motorcyclists Awareness Program criterion, the agency was guided by the specific language of SAFETEA-LU as well as by the highway safety guideline on motorcycle safety. First, the definition of “motorcyclist awareness program” in SAFETEA-LU specifies that a program under this criterion be developed by or in coordination with the designated State authority having jurisdiction over motorcyclist safety issues. Before a problem can be effectively addressed, the agency believes that problem identification and prioritization must be performed. Therefore, NHTSA proposes to include as an element under this criterion problem identification and prioritization through the use of State data. Next, in order to add to the effectiveness of a motorcyclist awareness program, NHTSA proposes that a State's motorcyclist awareness program encourage collaboration among agencies and organizations responsible for, or impacted by, motorcycle safety issues. Additionally, NHTSA proposes that because this criterion contemplates an informational or public awareness program to enhance motorist awareness of the presence of motorcyclists and because awareness efforts rely heavily on communication strategies and implementation, a State's motorcyclist awareness program should incorporate a strategic communications plan to support the overall policy and program. To ensure that the program is conducted statewide, the agency proposes that the communications plan be designed to educate motorists in those jurisdictions where the incidence of motorcycle crashes is highest ( *i.e.* , the majority of counties or political subdivisions in the State with the highest numbers of motorcycle crashes). For the purposes of this criterion, majority would mean greater than 50 percent. Finally, based on NHTSA's experience with dispersing traffic safety messages, the agency proposes that a communications plan should include marketing and educational efforts and should use a variety of communication mechanisms to increase awareness of a problem. Demonstrating Compliance (23 CFR 1350.4(b)(2), (3)) To demonstrate compliance with this criterion for the first fiscal year it seeks to qualify, a State would submit:
(1)A copy of the State document identifying the designated State authority having jurisdiction over motorcyclist safety issues;
(2)A letter from the Governor's Highway Safety Representative stating that the State's motorcyclist awareness program was developed by or in coordination with the designated State authority having jurisdiction over motorcyclist safety issues;
(3)Data used to identify and prioritize the State's motorcycle safety problem areas, including a list of counties or political subdivisions in the State ranked in order of the highest to lowest number of motorcycle crashes per county or political subdivision (such data would be from the calendar year occurring immediately before the fiscal year of the grant application ( *e.g.* , for fiscal year 2006, a State would provide data from calendar year 2005));
(4)A brief description of how the State has achieved collaboration among agencies and organizations responsible for, or impacted by, motorcycle safety issues; and
(5)A copy of the strategic communications plan showing that it supports the overall policy and program, is designed to educate motorists in those jurisdictions where the incidence of motorcycle crashes is highest ( *i.e.* , the majority of counties or political subdivisions in the State with the highest numbers of motorcycle crashes), includes marketing and educational efforts to enhance motorcyclist awareness, and uses a mix of communication mechanisms to draw attention to the problem ( *e.g.* , newspapers, billboard advertisements, e-mail, posters, flyers, mini-planners, computer-led and instructor-led training sessions). To demonstrate compliance with this criterion for the second and subsequent fiscal years it seeks to qualify, a State would submit only information documenting any changes to materials previously submitted to and approved by NHTSA under this criterion, or if there have been no changes to those materials, a statement certifying that there have been no changes and that the State continues to implement the motorcyclists awareness program in the same manner. C. Reduction of Fatalities and Crashes Involving Motorcycles To qualify for a grant based on this criterion, SAFETEA-LU requires a State to experience “a reduction for the preceding calendar year in the number of motorcycle fatalities and the rate of motor vehicle crashes involving motorcycles in the State (expressed as a function of 10,000 motorcycle registrations).” Agency's Proposal (23 CFR 1350.4(c)) The agency proposes that to satisfy this criterion in any fiscal year, a State must:
(1)Based on *final* Fatality Analysis Reporting System
(FARS)data, experience at least a reduction of one in the number of motorcycle fatalities for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year; *and*
(2)Based on State crash data expressed as a function of 10,000 motorcycle registrations (using FHWA motorcycle registration data), experience at least a whole number reduction ( *i.e.* , at least a 1.0 reduction) in the rate of motor vehicle crashes involving motorcycles for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year. Using the following data sources, NHTSA would perform the computations to determine a State's compliance with this criterion: • The agency proposes that “preceding calendar year” would mean the calendar year that precedes the beginning of the fiscal year of the grant by one year. The term appears in the agency's proposal to identify the source year of data to be used for determining a State's compliance with this criterion. For example, for grant applications in fiscal year 2006, which began in October 2005, the preceding calendar year would be the 2004 calendar year and final FARS data, State crash data and FHWA motorcycle registration data from the “preceding calendar year” and the “calendar year immediately prior to the preceding calendar year” would, therefore, be such data from calendar years 2004 and 2003. • NHTSA proposes to use Federal Highway Administration
(FHWA)motorcycle registration data to determine motorcycle registrations under this criterion. • The agency proposes to use State crash data provided by the State to determine the number of motor vehicle crashes involving motorcycles. Basis for Proposal NHTSA believes that using the *final* FARS data will ensure that the most accurate fatality numbers are used to determine each State's compliance with this criterion. The FARS contains data derived from a census of fatal traffic crashes within the 50 States, the District of Columbia, and Puerto Rico. All FARS data on fatal motor vehicle crashes are gathered from the States' own documents and coded into FARS formats with common standards. Final FARS data provide the most comprehensive and quality-controlled fatality data. The agency's proposed definition of “preceding calendar year” would ensure that the latest available *final* FARS data are used when a State applies for a grant under this criterion. For consistency in determining whether a State meets both statutory prongs of this criterion by experiencing both a reduction in the number of motorcycle fatalities *and* a reduction in the rate of motor vehicle crashes involving motorcycles, the proposed definition of “preceding calendar year” would apply to the rate calculation portion of this criterion as well. For fiscal year 2006 grants, NHTSA would compare 2003 final FARS data, State crash data and FHWA motorcycle registration data with 2004 data under the proposed rule. NHTSA proposes to use FHWA motorcycle registration data because it contains reliable motorcycle registration data compiled in a single source for all 50 States, the District of Columbia, and Puerto Rico. The FHWA reports and releases motorcycle registration data annually. Requiring a whole number reduction ( *i.e.* , at least a 1.0 reduction) is consistent with SAFETEA-LU's requirement that there be a reduction in the number of fatalities and the rate of motor vehicle crashes involving motorcycles in the State. The agency believes that such a reduction remains meaningful when viewed in light of the steady increase in motorcycle use and registrations in recent years. Finally, NHTSA data systems for all 50 States, the District of Columbia and Puerto Rico cover only fatal crashes. No national data system currently exists for all crashes that covers both crashes resulting in injuries and crashes involving property damage. Accordingly, NHTSA proposes to rely on crash data provided by each State for the crash-related portion of this criterion. Demonstrating Compliance (23 CFR 1350.4(c)(2)) To be considered for compliance under this criterion in any fiscal year it seeks to qualify, a State would submit:
(1)State data showing the total number of motor vehicle crashes involving motorcycles in the State for the preceding calendar year and for the year immediately prior to the preceding calendar year; and
(2)A description of the State's methods for collecting and analyzing data showing the number of motor vehicle crashes involving motorcycles in the State for the preceding calendar year and for the calendar year immediately prior to the preceding calendar year, including a description of the State's efforts to make reporting of motor vehicle crashes involving motorcycles as complete as possible. The methods used by the State for collecting this data would be required to be the same in both years or improved in subsequent years. NHTSA would perform the necessary computations using the State-submitted data, final FARS data, and FHWA registration data to determine if the State meets the requirements of this criterion. D. Impaired Driving Program To qualify for a grant based on this criterion, SAFETEA-LU requires that a State must “implement a statewide program to reduce impaired driving, including specific measures to reduce impaired motorcycle operation.” Agency's Proposal (23 CFR 1350.4(d)) To satisfy this criterion, the agency proposes that a State must have an impaired driving program that, at a minimum:
(1)Uses State data to identify and prioritize the State's impaired driving and impaired motorcycle operation problem areas; and
(2)Includes specific countermeasures to reduce impaired motorcycle operation with strategies designed to reach motorists in those jurisdictions where the incidence of impaired motorcycle crashes is highest. NHTSA proposes that for the purposes of this criterion, “impaired” would refer to alcohol-or drug-impaired as defined by State law, provided that the State's legal impairment level does not exceed .08 BAC. Basis for Proposal NHTSA recognizes that definitions of impairment differ from State to State, but that all States' definitions of alcohol-impaired driving currently include at most a .08 BAC limit. The agency proposes that each State may use its definition of impairment for the purposes of this criterion, provided that the State maintains at most a .08 BAC limit. In order to implement a program to reduce impaired driving, a State would use its own data to perform problem identification and prioritization to reduce impaired driving and impaired motorcycle operation in problem areas in the State. NHTSA proposes that if a State's program includes specific countermeasures to reduce impaired motorcycle operation with strategies designed to reach motorists in those jurisdictions where the incidence of impaired motorcycle crashes is highest ( *i.e.* , the majority of counties or political subdivisions in the State with the highest numbers of impaired motorcycle crashes), it will be consistent with the SAFETEA-LU requirement that the impaired driving program under this criterion be implemented statewide. For the purposes of this criterion, majority would mean greater than 50 percent. Finally, as identified in SAFETEA-LU, a State's impaired driving program should include specific countermeasure strategies to reduce impaired motorcycle operation. Demonstrating Compliance (23 CFR 1350.4(d)(2), (3)) To demonstrate compliance with this criterion for the first fiscal year it seeks to qualify, a State would submit:
(1)State data used to identify and prioritize the State's impaired driving and impaired motorcycle operation problem areas, including a list of counties or political subdivisions in the State ranked in order of the highest to lowest number of impaired motorcycle crashes per county or political subdivision (such data would be from the calendar year occurring immediately before the fiscal year of the grant application ( *e.g.* , for fiscal year 2006, a State would provide data from calendar year 2005));
(2)A description of the State's impaired driving program as implemented, including a description of its specific countermeasures used to reduce impaired motorcycle operation with strategies designed to reach motorists in those jurisdictions where the incidence of impaired motorcycle crashes is highest ( *i.e.* , the majority of counties or political subdivisions in the State with the highest numbers of impaired motorcycle crashes); and
(3)A copy of the State's law or regulation defining impairment. To demonstrate compliance with this criterion for the second and subsequent years it seeks to qualify, a State would submit information concerning any changes to materials previously submitted to and approved by NHTSA under this criterion, or if there have been no changes to those materials, a statement certifying that there have been no changes and that the State continues to implement the impaired driving program in the same manner. E. Reduction of Fatalities and Accidents Involving Impaired Motorcyclists To qualify for a grant based on this criterion, SAFETEA-LU requires that a State must experience “a reduction for the preceding calendar year in the number of fatalities and the rate of reported crashes involving alcohol-or drug-impaired motorcycle operators (expressed as a function of 10,000 motorcycle registrations).” Agency's Proposal (23 CFR 1350.4(e)) The agency proposes that to satisfy this criterion in any fiscal year, a State must:
(1)Based on *final* FARS data, experience at least a reduction of one in the number of fatalities involving alcohol- and drug-impaired motorcycle operators for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year; *and*
(2)Based on State crash data expressed as a function of 10,000 motorcycle registrations (using FHWA motorcycle registration data), experience at least a whole number reduction ( *i.e.* , at least a 1.0 reduction) in the rate of reported crashes involving alcohol- and drug-impaired motorcycle operators for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year. Using the following data sources, NHTSA would perform the computations to determine a State's compliance with this criterion: • As with criterion number 3 above, under this criterion, the agency proposes that “preceding calendar year” would mean the calendar year that precedes the beginning of the fiscal year of the grant by one year. • The agency also proposes to use FHWA motorcycle registration data to determine motorcycle registrations under this criterion. • The agency proposes to use State crash data provided by the State to determine the number of reported crashes involving alcohol- and drug-impaired motorcycle operators. The agency proposes that for the purposes of this criterion, “impaired” would refer to alcohol-or drug-impaired as defined by State law, provided that the State's legal alcohol impairment level does not exceed .08 BAC. Basis for Proposal The proposed use of FARS data, FHWA motorcycle registration data, State crash data and the proposed definition of preceding calendar year under this criterion mirror the proposed use of these terms under criterion number 3, as described above, and the rationale is the same. Additionally, the use of FARS data for this criterion will be particularly helpful because one of the limitations of the State crash data files is unknown alcohol use. In order to calculate alcohol-related crash involvement for a State, NHTSA uses a statistical model based on crash characteristics to impute alcohol involvement in fatal crashes where alcohol use was unknown or not reported. Because NHTSA recognizes that definitions of impairment differ from State to State, but that all States' definitions of alcohol-impaired driving currently include at most a .08 BAC limit, the agency proposes that each State may use its definition of alcohol- and drug-impairment for the purposes of this criterion, provided that the State maintains at most a .08 BAC limit. Demonstrating Compliance (23 CFR 1350.4(e)(2)) To be considered for compliance under this criterion in any fiscal year it seeks to qualify, a State would submit:
(1)Data showing the total number of reported crashes involving alcohol- and drug-impaired motorcycle operators in the State for the preceding calendar year and for the year immediately prior to the preceding calendar year;
(2)A description of the State's methods for collecting and analyzing data showing the number of reported crashes involving alcohol- and drug-impaired motorcycle operators in the State for the preceding calendar year and for the calendar year immediately prior to the preceding calendar year, including a description of the State's efforts to make reporting of crashes involving alcohol- and drug-impaired motorcycle operators as complete as possible (the methods used by the State for collecting this data would be the same in both years or improved in subsequent years); and
(3)A copy of the State's law or regulation defining alcohol- and drug-impairment. NHTSA would perform the necessary computations using the State-submitted data, final FARS data, and FHWA registration data to determine if the State meets the requirements of this criterion. F. Use of Fees Collected From Motorcyclists for Motorcycle Programs To qualify for a grant based on this criterion, SAFETEA-LU requires that “all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs will be used for motorcycle training and safety programs.” Agency's Proposal (23 CFR 1350.4(f)) The agency proposes that a State may qualify for a grant under this criterion as a “Law State” or a “Data State.” For the purposes of this criterion, NHTSA proposes that a Law State would mean a State that has a law or regulation requiring that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs. For the purposes of this criterion, NHTSA proposes that a Data State would mean a State that does not have such a law or regulation. To qualify for a grant under this criterion as a Law State, NHTSA proposes that a State must have in place the law or regulation described above. To qualify for a grant under this criterion as a Data State, NHTSA proposes that a State must demonstrate that revenues collected for the purposes of funding motorcycle training and safety programs are placed into a distinct account and expended only for motorcycle training and safety programs. Basis for Proposal NHTSA's proposal to permit a State to qualify under this criterion as either a Law State or a Data State provides flexibility to States and is consistent with the SAFETEA-LU language requiring that all fees collected by a State from motorcyclists for the purposes of funding motorcycle training and safety programs be used for motorcycle training and safety programs. Demonstrating Compliance (23 CFR 1350.4(f)(2), (3)) To demonstrate compliance as a Law State under this criterion for the first fiscal year it seeks to qualify, a State would submit a copy of the law or regulation requiring that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs. To demonstrate compliance as a Law State in the second and subsequent years it seeks to qualify, a State would submit a copy of the law or regulation if it has changed since the State submitted its last grant application, or a certification that its law or regulation has not changed since the State submitted its last grant application and received approval. To demonstrate compliance as a Data State under this criterion, for any fiscal year it seeks to qualify, a State would submit data and/or documentation from official records from the previous State fiscal year showing that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs were, in fact, used for motorcycle training and safety programs. Such data and/or documentation would show that revenues collected for the purposes of funding motorcycle training and safety programs were placed into a distinct account and expended only for motorcycle training and safety programs. IV. Administrative Issues A. Application Requirements (23 CFR 1350.5) The proposed rule outlines certain procedural steps to be followed when States wish to apply for a grant under this program. A State would submit, through its State Highway Safety Agency, an application to the appropriate NHTSA Regional Administrator satisfying the minimum qualification requirements under § 1350.4 and identifying the grant criteria under which it seeks to qualify. Application through a State Highway Safety Agency is consistent with other grant programs administered by NHTSA. To ensure that States have adequate notice and time to prepare and submit their applications for fiscal year 2006, applications for this grant program in fiscal year 2006 would be due no later than August 15. For the remaining fiscal years in which States apply for grant funds under this program, applications would be due no later than August 1. The Application would include the applicable criteria-specific certifications specified in § 1350.4 and located in Appendix A. Additionally, the State would provide the following general certifications located in Appendix B:
(1)It will use the motorcyclist safety grant funds awarded exclusively to implement programs in accordance with the requirements of section 2010(e) of SAFETEA-LU, Public Law 109-59;
(2)It will administer the motorcyclist safety grant funds in accordance with 49 CFR part 18 and OMB Circular A-87; and
(3)It will maintain its aggregate expenditures from all other sources for motorcyclist safety training programs and motorcyclist awareness programs at or above the average level of such expenditures in fiscal years 2003 and 2004 (a SAFETEA-LU requirement). A State would submit an original and two copies of its application to the appropriate NHTSA Regional Administrator. To ensure a manageable volume of materials for the agency's review of applications, the proposal provides that States should not submit media samples unless specifically requested. B. Awards (23 CFR 1350.6) NHTSA will review each State's application for compliance with the requirements of the implementing regulations and will notify qualifying States in writing of grant awards. Upon initial review of the application, the proposed procedures would allow NHTSA to request additional information from the State prior to making a determination of award, in order to clarify compliance with the statutory criteria and grant application procedures. SAFETEA-LU specifies that the amount of a grant made to a State for a fiscal year under this grant program may not be less than $100,000 and may not exceed 25 percent of the amount apportioned to the State for fiscal year 2003 under section 402 of title 23, United States Code. However, the release of the full grant amounts under section 2010 is subject to the availability of funding for each fiscal year. If there are expected to be insufficient funds to award full grant amount to all eligible States in any fiscal year, NHTSA may release less than the full grant amounts upon initial approval of a State's application, and release the remainder, up to the State's proportionate share of available funds, before the end of that fiscal year. If insufficient funds are appropriated to distribute the minimum amount ($100,000) to all qualifying States, all States would receive the same reduced amount. Project approval, and the contractual obligation of the Federal Government to provide grant funds, would be limited to the amount of funds released. C. Post-Award Requirements (23 CFR 1350.7) Consistent with current procedures in other highway safety grant programs administered by NHTSA, the agency's proposal provides that within 30 days after notification of award but in no event later than September 12, a State would be required to submit electronically to the agency a Program Cost Summary (HS Form 217) obligating funds to the Motorcyclist Safety Grant Program. In addition, a State would be required to include documentation in the Highway Safety Plan (or in an amendment to that plan) prepared under 23 U.S.C. 402 indicating how it intends to use the motorcyclist safety grant funds. The State would also be required to detail program accomplishments in the Annual Performance Report required to be submitted under the regulation implementing the section 402 program. These documenting requirements would continue each fiscal year until all section 2010 grant funds have been expended. D. Uses of Grant Funds (23 CFR 1350.8) As specified in SAFETEA-LU, a State may use section 2010 grant funds only for motorcyclist safety training and motorcyclist awareness programs, including:
(1)Improvements to motorcyclist safety training curricula;
(2)Improvements in program delivery of motorcycle training to both urban and rural areas (including procurement or repair of practice motorcycles; instructional materials; mobile training units; and leasing or purchasing facilities for closed-course motorcycle skill training); 2
(3)Measures designed to increase the recruitment or retention of motorcyclist safety training instructors; and
(4)Public awareness, public service announcements, and other outreach programs to enhance driver awareness of motorcyclists, such as the “share-the-road” safety messages developed using Share-the-Road model language required under section 2010(g) of SAFETEA-LU. As specified in SAFETEA-LU, a State that receives a section 2010 grant may suballocate funds from the grant to a nonprofit organization incorporated in that State to carry out grant activities under section 2010. 2 In connection with the leasing or purchasing of facilities, grantees should note that the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act, 2006 (Pub. L. 109-115) places limits on the use of section 2010 funds. Specifically, the Act provides that none of the section 2010 funds “shall be used for construction, rehabilitation, or remodeling costs, or for office furnishings and fixtures for State, local or private buildings or structures.” SAFETEA-LU places an additional limitation on the use of grant funds. Specifically, a State that receives a section 2010 grant must maintain its aggregate expenditures from all other sources for motorcyclist safety training programs and motorcyclist awareness programs at or above the average level of such expenditures in fiscal years 2003 and 2004. (A State may use either Federal or State fiscal years.) However, because section 2010 of SAFETEA-LU does not include a matching requirement, the Federal share of programs funded under section 2010 will be 100 percent. V. Comments The agency finds good cause to limit the period for comment on this notice to 30 days. In order to publish a final rule in time to accommodate the application period for States and a subsequent review period for the agency, this comment period is deemed necessary. The shortened comment period will assist the agency in ensuring that grant funds under section 2010 are made available to States during the fiscal year. Interested persons are invited to comment on this notice of proposed rulemaking. It is requested, but not required, that two copies be submitted. All comments must be limited to 15 pages in length. Necessary attachments may be appended to those submissions without regard to the 15-page limit. (See 49 CFR 553.21.) This limitation is intended to encourage commenters to detail their primary arguments in a concise fashion. You may submit your comments by one of the following methods:
(1)By mail to: Docket Management Facility, Docket No. NHTSA-2006-23700, DOT, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590;
(2)By hand delivery to: Room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday;
(3)By fax to the Docket Management Facility at
(202)493-2251; or
(4)By electronic submission: log onto the DMS Web site at *http://dms.dot.gov* and click on “Help” to obtain instructions. All comments received before the close of business on the comment closing date will be considered and will be available for examination in the docket at the above address before and after that date. To the extent possible, comments filed after the closing date will also be considered. However, the rulemaking action may proceed at any time after that date. The agency will continue to file relevant material in the docket as it becomes available after the closing date, and it is recommended that interested persons continue to examine the docket for new material. You may review submitted comments in person at the Docket Management Facility located at Room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday. You may also review submitted comments on the Internet by taking the following steps:
(1)Go to the DMS Web page at *http://dms.dot.gov.*
(2)On that page, click on “Simple Search”.
(3)On the next page ( *http://dms.dot.gov/search/searchFormSimple.cfm* ) type in the five-digit docket number shown at the beginning of this document. Example: If the docket number were “NHTSA-2001-12345,” you would type “12345.” After typing the docket number, click on “search.”
(4)On the next page, which contains docket summary information for the docket you selected, click on the desired comments. You may also download the comments. Although the comments are imaged documents, instead of word processing documents, the “pdf” versions of the documents are word searchable. Those persons who wish to be notified upon receipt of their comments in the docket should enclose, in the envelope with their comments, a self-addressed stamped postcard. Upon receiving the comments, the docket supervisor will return the postcard by mail. VI. Statutory Basis for This Action The agency's proposal would implement the grant program created by section 2010 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59). VII. Regulatory Analyses and Notices A. Executive Order 12866 and DOT Regulatory Policies and Procedures Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), provides for making determinations whether a regulatory action is “significant” and therefore subject to OMB review and to the requirements of the Executive Order. The Order defines a “significant regulatory action” as one that is likely to result in a rule that may:
(1)Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
(2)Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3)Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4)Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. This rulemaking document was not reviewed by the Office of Management and Budget under Executive Order 12866. The rulemaking action is not considered to be significant within the meaning of E.O. 12866 or the Department of Transportation's Regulatory Policies and Procedures (44 FR 11034 (February 26, 1979)). The agency's proposal does not affect amounts over the significance threshold of $100 million each year. The proposal sets forth application procedures and showings to be made to be eligible for a grant. The funds to be distributed under the application procedures developed in the proposal would be well below the annual threshold of $100 million, with authorized amounts of $6 million in each of FYs 2006-2008 and $7 million in FY 2009. The agency's proposal would not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. The agency's proposal would not create an inconsistency or interfere with any actions taken or planned by other agencies. The agency's proposal would not materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof. Finally, the agency's proposal does not raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. In consideration of the foregoing, the agency has determined that if it is made final, this rulemaking action would not be economically significant. The impacts of the rule would be so minimal that a full regulatory evaluation is not required. B. Regulatory Flexibility Act Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* , as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency publishes a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities ( *i.e.* , small businesses, small organizations, and small governmental jurisdictions). The Small Business Administration's regulations at 13 CFR part 121 define a small business, in part, as a business entity “which operates primarily within the United States.” (13 CFR 121.105(a).) No regulatory flexibility analysis is required if the head of an agency certifies the rulemaking action would not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that an action would not have a significant economic impact on a substantial number of small entities. NHTSA has considered the effects of this proposal under the Regulatory Flexibility Act. States are the recipients of funds awarded under the section 2010 program and they are not considered to be small entities under the Regulatory Flexibility Act. Therefore, I certify that this notice of proposed rulemaking would not have a significant economic impact on a substantial number of small entities. C. Executive Order 13132 (Federalism) Executive Order 13132, “Federalism” (64 FR 43255, August 10, 1999), requires NHTSA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute unless the Federal Government provides the funds necessary to pay the direct compliance costs incurred by State and local governments or the agency consults with State and local governments in the process of developing the proposed regulation. The agency also may not issue a regulation with federalism implications that preempts a State law without consulting with State and local officials. The agency has analyzed this rulemaking action in accordance with the principles and criteria set forth in Executive Order 13132 and has determined that this proposed rule would not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. Moreover, the proposed rule would not preempt any State law or regulation or affect the ability of States to discharge traditional State government functions. D. Executive Order 12988 (Civil Justice Reform) Pursuant to Executive Order 12988, “Civil Justice Reform” (61 FR 4729, February 7, 1996), the agency has considered whether this rulemaking would have any retroactive effect. This rulemaking action would not have any retroactive effect. This action meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. E. Paperwork Reduction Act Under the Paperwork Reduction Act of 1995, a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid Office of Management and Budget
(OMB)control number. This NPRM, if made final, would result in a new collection of information that would require OMB clearance pursuant to 5 CFR part 1320. In a **Federal Register** document of March 2, 2006 (71 FR 10753), NHTSA sought public comment on the proposed collection of information for the motorcyclist safety grant program. The proposed collection would affect the fifty states, the District of Columbia and Puerto Rico. NHTSA estimates the total annual collection of information burden to be 1560 hours. NHTSA accepted public comment on this proposed collection until May 1, 2006. F. Unfunded Mandates Reform Act Section 202 of the Unfunded Mandates Reform Act of 1995
(UMRA)requires Federal agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with a base year of 1995 (about $118 million in 2004 dollars)). This proposed rule does not meet the definition of a Federal mandate because the resulting annual State expenditures would not exceed the $100 million threshold. The program is voluntary and States that choose to apply and qualify would receive grant funds. G. National Environmental Policy Act NHTSA has reviewed this rulemaking action for the purposes of the National Environmental Policy Act. The agency has determined that this proposal would not have a significant impact on the quality of the human environment. H. Executive Order 13175 (Consultation and Coordination With Indian Tribes) The agency has analyzed this proposed rule under Executive Order 13175, and has determined that the proposed action would not have a substantial direct effect on one or more Indian tribes, would not impose substantial direct compliance costs on Indian tribal governments, and would not preempt tribal law. Therefore, a tribal summary impact statement is not required. I. Regulatory Identifier Number
(RIN)The Department of Transportation assigns a regulation identifier number
(RIN)to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda. J. Privacy Act Please note that anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78), or you may visit *http://dms.dot.gov.* List of Subjects in 23 CFR Part 1350 Grant programs-transportation, Highway safety, Motor vehicles-motorcycles. In consideration of the foregoing, the agency proposes to amend chapter III of title 23 of the Code of Federal Regulations by adding part 1350 to read as follows: PART 1350—INCENTIVE GRANT CRITERIA FOR MOTORCYCLIST SAFETY PROGRAM Sec. 1350.1 Scope. 1350.2 Purpose. 1350.3 Definitions. 1350.4 Qualification requirements. 1350.5 Application requirements. 1350.6 Awards. 1350.7 Post-award requirements. 1350.8 Use of grant funds. Appendix A to Part 1350—Certifications Specific to Grant Criteria for Second and Subsequent Fiscal Years Appendix B to Part 1350—General Certifications Authority: Sec. 2010, Public Law 109-59, 119 Stat. 1535; delegation of authority at 49 CFR 1.50. § 1350.1 Scope. This part establishes criteria, in accordance with section 2010 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), for awarding incentive grants to States that adopt and implement effective programs to reduce the number of single- and multi-vehicle crashes involving motorcyclists. § 1350.2 Purpose. The purpose of this part is to implement the provisions of section 2010 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), and to encourage States to adopt effective motorcyclist safety programs. § 1350.3 Definitions. As used in this part— *FARS* means NHTSA's Fatality Analysis Reporting System. *Impaired* means alcohol- or drug-impaired as defined by State law, provided that the State's legal alcohol-impairment level does not exceed .08 BAC. *Majority* means greater than 50 percent. *Motorcycle* means a motor vehicle with motive power having a seat or saddle for the use of the rider and designed to travel on not more than three wheels in contact with the ground. *Motorcyclist awareness* means an individual or collective awareness of—
(1)The presence of motorcycles on or near roadways; and
(2)Safe driving practices that avoid injury to motorcyclists. *Motorcyclist awareness program* means an informational or public awareness program designed to enhance motorcyclist awareness that is developed by or in coordination with the designated State authority having jurisdiction over motorcyclist safety issues, which may include the State motorcycle safety administrator or a motorcycle advisory council appointed by the Governor of the State. *Motorcyclist safety training* or *Motorcycle rider training* means a formal program of instruction that is approved for use in a State by the designated State authority having jurisdiction over motorcyclist safety issues, which may include the State motorcycle safety administrator or a motorcycle advisory council appointed by the Governor of the State. *Preceding calendar year* means the calendar year that precedes the beginning of the fiscal year of the grant by one year. (For example, for grant applications in fiscal year 2006, which began in October 2005, the preceding calendar year is the 2004 calendar year and final FARS data, State crash data and FHWA motorcycle registration data from the “preceding calendar year” would, therefore, be such data from calendar year 2004.) *State* means any of the fifty States, the District of Columbia, and Puerto Rico. § 1350.4 Qualification requirements. To qualify for a grant under this part, a State must meet, in the first fiscal year it receives a grant, at least one, and in the second and subsequent fiscal years it receives a grant, at least two, of the following grant criteria:
(a)*Motorcycle rider training course.* To satisfy this criterion, a State must have an effective motorcycle rider training course that is offered throughout the State, provides a formal program of instruction in accident avoidance and other safety-oriented operational skills to motorcyclists and that may include innovative training opportunities to meet unique regional needs, subject to the following requirements:
(1)The State must, at a minimum:
(i)Use a training curriculum that:
(A)Is approved by the designated State authority having jurisdiction over motorcyclist safety issues;
(B)Includes a formal program of instruction in crash avoidance and other safety-oriented operational skills for both in-class and on-the-motorcycle training to motorcyclists; and
(C)May include innovative training opportunities to meet unique regional needs;
(ii)Offer at least one motorcycle rider training course either—
(A)In a majority of the State's counties or political subdivisions; or
(B)In counties or political subdivisions that account for a majority of the State's registered motorcycles;
(iii)Use motorcycle rider training instructors to teach the curriculum who are certified by the designated State authority having jurisdiction over motorcyclist safety issues or by a nationally recognized motorcycle safety organization with certification capability; and
(iv)Use quality control procedures to assess motorcycle rider training courses and instructor training courses conducted in the State.
(2)To demonstrate compliance with this criterion in the first fiscal year it seeks to qualify, a State must submit:
(i)A copy of the official State document ( *e.g.* , law, regulation, binding policy directive, letter from the Governor) identifying the designated State authority over motorcyclist safety issues;
(ii)Document(s) demonstrating that the training curriculum is approved by the designated State authority having jurisdiction over motorcyclist safety issues and includes a formal program of instruction in crash avoidance and other safety-oriented operational skills for both in-class and on-the-motorcycle training to motorcyclists; (iii)(A) If the State seeks to qualify under this criterion by showing that it offers at least one motorcycle rider training course in a majority of counties or political subdivisions in the State—A list of the counties or political subdivisions in the State, noting in which counties or political subdivisions and when motorcycle rider training courses were offered in the 12 months preceding the due date of the grant application; or
(B)If the State seeks to qualify under this criterion by showing that it offers at least one motorcycle rider training course in counties or political subdivisions that account for a majority of the State's registered motorcycles—A list of the counties or political subdivisions in the State, noting in which counties or political subdivisions and when motorcycle rider training courses were offered in the 12 months preceding the due date of the grant application and the corresponding number of registered motorcycles in each county or political subdivision according to official State motor vehicle records;
(iv)Document(s) demonstrating that the State uses motorcycle rider training instructors to teach the curriculum who are certified by the designated State authority having jurisdiction over motorcyclist safety issues or by a nationally recognized motorcycle safety organization with certification capability; and
(v)A brief description of the quality control procedures to assess motorcycle rider training courses and instructor training courses used in the State ( *e.g.* , conducting site visits, gathering student feedback) and the actions taken to improve the courses based on the information collected.
(3)To demonstrate compliance with this criterion in the second and subsequent fiscal years it seeks to qualify, a State must submit:
(i)If there have been changes to materials previously submitted to and approved by NHTSA under this criterion, information documenting any changes; or
(ii)If there have been no changes to materials previously submitted to and approved by NHTSA under this criterion, a statement certifying that there have been no changes and that the State continues to offer the motorcycle rider training course in the same manner.
(b)*Motorcyclists awareness program.* To satisfy this criterion, a State must have an effective statewide program to enhance motorist awareness of the presence of motorcyclists on or near roadways and safe driving practices that avoid injuries to motorcyclists, subject to the following requirements:
(1)The motorcyclists awareness program must, at a minimum:
(i)Be developed by, or in coordination with, the designated State authority having jurisdiction over motorcyclist safety issues;
(ii)Use State data to identify and to prioritize the State's motorcyclist awareness problem areas;
(iii)Encourage collaboration among agencies and organizations responsible for, or impacted by, motorcycle safety issues; and
(iv)Incorporate a strategic communications plan that—
(A)Supports the overall policy and program;
(B)Is designed to educate motorists in those jurisdictions where the incidence of motorcycle crashes is highest;
(C)Includes marketing and educational efforts to enhance motorcyclist awareness; and
(D)Uses a mix of communication mechanisms to draw attention to the problem.
(2)To demonstrate compliance with this criterion in the first fiscal year it seeks to qualify, a State must submit:
(i)A copy of the State document identifying the designated State authority having jurisdiction over motorcyclist safety issues;
(ii)A letter from the Governor's Highway Safety Representative stating that the State's motorcyclist awareness program was developed by or in coordination with the designated State authority having jurisdiction over motorcyclist safety issues;
(iii)Data used to identify and prioritize the State's motorcycle safety problem areas, including a list of counties or political subdivisions in the State ranked in order of the highest to lowest number of motorcycle crashes per county or political subdivision (such data must be from the calendar year occurring immediately before the fiscal year of the grant application ( *e.g.* , for fiscal year 2006, a State must provide data from calendar year 2005));
(iv)A brief description of how the State has achieved collaboration among agencies and organizations responsible for, or impacted by, motorcycle safety issues; and
(v)A copy of the strategic communications plan showing that it:
(A)Supports the overall policy and program;
(B)Is designed to educate motorists in those jurisdictions where the incidence of motorcycle crashes is highest ( *i.e.* , the majority of counties or political subdivisions in the State with the highest numbers of motorcycle crashes);
(C)Includes marketing and educational efforts to enhance motorcyclist awareness; and
(D)Uses a mix of communication mechanisms to draw attention to the problem ( *e.g.* , newspapers, billboard advertisements, e-mail, posters, flyers, mini-planners, promotional items, or computer-led and instructor-led training sessions).
(3)To demonstrate compliance with this criterion in the second and subsequent fiscal years it seeks to qualify, a State must submit:
(i)If there have been changes to materials previously submitted to and approved by NHTSA under this criterion, information documenting any changes; or
(ii)If there have been no changes to materials previously submitted to and approved by NHTSA under this criterion, a statement certifying that there have been no changes and that the State continues to implement its motorcyclists awareness program in the same manner.
(c)*Reduction of fatalities and crashes involving motorcycles.* To satisfy this criterion, a State must experience a reduction for the preceding calendar year in the number of motorcycle fatalities and the rate of motor vehicle crashes involving motorcycles in the State (expressed as a function of 10,000 registered motorcycle registrations), subject to the following requirements:
(1)As computed by NHTSA, a State must:
(i)Based on *final* FARS data, experience at least a reduction of one in the number of motorcycle fatalities for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year; *and*
(ii)Based on State crash data expressed as a function of 10,000 motorcycle registrations (using FHWA motorcycle registration data), experience at least a whole number reduction ( *i.e.* , at least a 1.0 reduction) in the rate of motor vehicle crashes involving motorcycles for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year.
(2)To be considered for compliance under this criterion in any fiscal year it seeks to qualify, a State must submit:
(i)State data showing the total number of motor vehicle crashes involving motorcycles in the State for the preceding calendar year and for the year immediately prior to the preceding calendar year; and
(ii)A description of the State's methods for collecting and analyzing data showing the number of motor vehicle crashes involving motorcycles in the State for the preceding calendar year and for the calendar year immediately prior to the preceding calendar year, including a description of the State's efforts to make reporting of motor vehicle crashes involving motorcycles as complete as possible (the methods used by the State for collecting this data must be the same in both years or improved in subsequent years);
(d)*Impaired driving program.* To satisfy this criterion, a State must implement a statewide program to reduce impaired driving, including specific measures to reduce impaired motorcycle operation, subject to the following requirements:
(1)The impaired driving program must, at a minimum:
(i)Use State data to identify and prioritize the State's impaired driving and impaired motorcycle operation problem areas; and
(ii)Include specific countermeasures to reduce impaired motorcycle operation with strategies designed to reach motorists in those jurisdictions where the incidence of impaired motorcycle crashes is highest.
(2)To demonstrate compliance with this criterion in the first fiscal year it seeks to qualify, a State must submit:
(i)State data used to identify and prioritize the State's impaired driving and impaired motorcycle operation problem areas, including a list of counties or political subdivisions in the State ranked in order of the highest to lowest number of impaired motorcycle crashes per county or political subdivision (such data must be from the calendar year occurring immediately before the fiscal year of the grant application ( *e.g.* , for fiscal year 2006, a State must provide data from calendar year 2005));
(ii)A description of the State's impaired driving program as implemented, including a description of its specific countermeasures used to reduce impaired motorcycle operation with strategies designed to reach motorists in those jurisdictions where the incidence of impaired motorcycle crashes is highest ( *i.e.* , the majority of counties or political subdivisions in the State with the highest numbers of impaired motorcycle crashes); and
(iii)A copy of the State's law or regulation defining impairment.
(3)To demonstrate compliance with this criterion in the second and subsequent years it seeks to qualify, a State must submit:
(i)If there have been changes to materials previously submitted to and approved by NHTSA under this criterion, information documenting any changes; or
(ii)If there have been no changes to materials previously submitted to and approved by NHTSA under this criterion, a statement certifying that there have been no changes and that the State continues to implement its impaired driving program in the same manner.
(e)*Reduction of fatalities and accidents involving impaired motorcyclists.* To satisfy this criterion, a State must experience a reduction for the preceding calendar year in the number of fatalities and the rate of reported crashes involving alcohol- or drug-impaired motorcycle operators (expressed as a function of 10,000 motorcycle registrations), subject to the following requirements:
(1)As computed by NHTSA, a State must:
(i)Based on *final* FARS data, experience at least a reduction of one in the number of fatalities involving alcohol- and drug-impaired motorcycle operators for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year; *and*
(ii)Based on State crash data expressed as a function of 10,000 motorcycle registrations (using FHWA motorcycle registration data), experience at least a whole number reduction ( *i.e.* , at least a 1.0 reduction) in the rate of reported crashes involving alcohol- and drug-impaired motorcycle operators for the preceding calendar year as compared to the calendar year immediately prior to the preceding calendar year.
(2)To be considered for compliance under this criterion in any fiscal year it seeks to qualify, a State must submit:
(i)Data showing the total number of reported crashes involving alcohol- and drug-impaired motorcycle operators in the State for the preceding calendar year and for the year immediately prior to the preceding calendar year;
(ii)A description of the State's methods for collecting and analyzing data showing the number of reported crashes involving alcohol- and drug-impaired motorcycle operators in the State for the preceding calendar year and for the calendar year immediately prior to the preceding calendar year, including a description of the State's efforts to make reporting of crashes involving alcohol- and drug-impaired motorcycle operators as complete as possible (the methods used by the State for collecting this data must be the same in both years or improved in subsequent years); and
(iii)A copy of the State's law or regulation defining alcohol- and drug-impairment
(f)*Use of fees collected from motorcyclists for motorcycle programs.* To satisfy this criterion, a State must have a process under which all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs, subject to the following requirements:
(1)A State may qualify under this criterion as either a Law State or a Data State.
(2)To demonstrate compliance as a Law State, the State must submit:
(i)In the first fiscal year it seeks to qualify, a copy of the law or regulation requiring that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs.
(ii)In the second and subsequent years it seeks to qualify:
(A)If there have been changes to materials previously submitted to and approved by NHTSA under this criterion, a copy of the law or regulation requiring that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs; or
(B)If there have been no changes to materials previously submitted to and approved by NHTSA under this criterion, a certification by the State that its law or regulation has not changed since the State submitted its last grant application and received approval.
(3)To demonstrate compliance as a Data State, in any fiscal year it seeks to qualify, a State must submit data and/or documentation from official records from the previous State fiscal year showing that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs were, in fact, used for motorcycle training and safety programs. Such data and/or documentation must show that revenues collected for the purposes of funding motorcycle training and safety programs were placed into a distinct account and expended only for motorcycle training and safety programs.
(4)*Definitions.* As used in this section—
(i)A *Law State* is a State that has a law or regulation requiring that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs.
(ii)A *Data State* is a State that does not have a law or regulation requiring that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs. § 1350.5 Application requirements.
(a)No later than August 15 in fiscal year 2006 and no later than August 1 of the remaining fiscal years for which the State is seeking a grant under this part, the State must submit, through its State Highway Safety Agency, an application to the appropriate NHTSA Regional Administrator. The State's application must:
(1)Identify the criteria that it meets and satisfy the minimum requirements for those criteria under § 1350.4;
(2)Include the applicable criteria-specific certifications in Appendix A to this part, as specified in § 1350.4; and
(3)Include the general certifications in Appendix B to this part.
(b)A State must submit an original and two copies of its application to the appropriate NHTSA Regional Administrator.
(c)To ensure a manageable volume of materials for the agency's review of applications, a State should not submit media samples unless specifically requested by the agency. § 1350.6 Awards.
(a)NHTSA will review each State's application for compliance with the requirements of this part and will notify qualifying States in writing of grant awards. In each Federal fiscal year, grants will be made to eligible States upon submission and approval of the information required by this part.
(b)NHTSA may request additional information from a State prior to making a determination of award.
(c)Except as provided in paragraph
(d)of this section, the amount of a grant made to a State for a fiscal year under this program may not be less than $100,000 and may not exceed 25 percent of the amount apportioned to the State for fiscal year 2003 under section 402 of title 23, United States Code.
(d)The release of grant funds under this part is subject to the availability of funds for each fiscal year. If there are expected to be insufficient funds to award full grant amounts to all eligible States in any fiscal year, NHTSA may release less than the full grant amount upon initial approval of a State's application and release the remainder, up to the State's proportionate share of available funds, before the end of that fiscal year. If insufficient funds are available to distribute the minimum amount ($100,000) to all qualifying States, all States would receive the same reduced amount. Project approval and the contractual obligation of the Federal Government to provide grant funds, is limited to the amount of funds released. § 1350.7 Post-award requirements.
(a)Within 30 days after notification of award but in no event later than September 12 of each year, a State must submit electronically to the agency a Program Cost Summary (HS Form 217) obligating funds to the Motorcyclist Safety Grant Program.
(b)Each fiscal year until all grant funds have been expended, a State must:
(1)Document how it intends to use the motorcyclist safety grant funds in the Highway Safety Plan (or in an amendment to that plan), required to be submitted by September 1 each year under 23 U.S.C. 402; and
(2)Detail program accomplishments in the Annual Performance Report required to be submitted under the regulation implementing 23 U.S.C. 402. § 1350.8 Use of grant funds.
(a)*Eligible uses of grant funds.* A State may use grant funds only for motorcyclist safety training and motorcyclist awareness programs, including—
(1)Improvements to motorcyclist safety training curricula;
(2)Improvements in program delivery of motorcycle training to both urban and rural areas, including—
(i)Procurement or repair of practice motorcycles;
(ii)Instructional materials;
(iii)Mobile training units; and
(iv)Leasing or purchasing facilities for closed-course motorcycle skill training;
(3)Measures designed to increase the recruitment or retention of motorcyclist safety training instructors; and
(4)Public awareness, public service announcements, and other outreach programs to enhance driver awareness of motorcyclists, such as the “share-the-road” safety messages developed using Share-the-Road model language required under section 2010(g) of SAFETEA-LU, Public Law 109-59.
(b)*Suballocation of funds.* A State that receives a grant may suballocate funds from the grant to a nonprofit organization incorporated in that State to carry out grant activities under this part.
(c)*Matching requirement.* The Federal share of programs funded under this part shall be 100 percent. Appendix A to Part 1350—Certifications Specific to Grant Criteria for Second and Subsequent Fiscal Years State: Fiscal Year: (CHECK ALL THAT APPLY) I hereby certify that the State (or Commonwealth) of ________ : • Motorcycle Rider Training Courses criterion—second and subsequent Fiscal Years ☐ has made no changes to the materials previously submitted to and approved by NHTSA under this criterion and the State or Commonwealth continues to offer its motorcycle rider training courses in the same manner. • Motorcyclists Awareness Program criterion—second and subsequent Fiscal Years ☐ has made no changes to the materials previously submitted to and approved by NHTSA under this criterion and the State or Commonwealth continues to implement its motorcyclists awareness program in the same manner. • Impaired Driving Program criterion—second and subsequent Fiscal Years ☐ has made no changes to the materials previously submitted to and approved by NHTSA under this criterion and the State or Commonwealth continues to implement its impaired driving program in the same manner. • Use of Fees Collected from Motorcyclists for Motorcycle Programs criterion (Law State)—second and subsequent Fiscal Years ☐ has made no changes to the law or regulation previously submitted to and approved by NHTSA under this criterion requiring that all fees collected by the State from motorcyclists for the purposes of funding motorcycle training and safety programs are to be used for motorcycle training and safety programs. Governor's Highway Safety Representative Date: Appendix B to Part 1350—General Certifications State: Fiscal Year: (APPLIES TO ALL GRANT CRITERIA) I hereby certify that the State (or Commonwealth) of ________ : • Will use the motorcyclist safety grant funds only for motorcyclist safety training and motorcyclist awareness programs, in accordance with the requirements of section 2010(e) of SAFETEA-LU, Public Law 109-59; • Will administer the motorcyclist safety grant funds in accordance with 49 CFR part 18 and OMB Circular A-87; and • Will maintain its aggregate expenditures from all other sources for motorcyclist safety training programs and motorcyclist awareness programs at or above the average level of such expenditures in fiscal years
(FY)2003 and 2004. (A State may use either Federal or State fiscal years). Governor's Highway Safety Representative Date: Issued on: May 18, 2006. Jacqueline Glassman, Deputy Administrator. [FR Doc. 06-4792 Filed 5-23-06; 8:45 am]
Connectionstraces to 13
46 references not yet in our index
  • 7 CFR 319
  • 7 USC 7701-7772
  • 7 CFR 319.56
  • 7 CFR 2.22
  • 26 CFR 1
  • Pub. L. 98-369
  • 98 Stat. 494
  • Pub. L. 100-203
  • 101 Stat. 1330
  • Pub. L. 100-485
  • Pub. L. 104-188
  • 110 Stat. 1755
  • Pub. L. 107-16
  • 115 Stat. 38
  • Pub. L. 107-147
  • Pub. L. 108-311
  • 118 Stat. 1166
  • Rev. Rul. 76-288
  • Rev. Rul. 76-278
  • 26 CFR 602
  • 23 CFR 1350
  • 49 CFR 571.3
  • Pub. L. 109-59
  • 23 CFR 1350.4(a)
  • 23 CFR 1350.4(a)(2)
  • 23 CFR 1350.4(b)
  • 23 CFR 1350.4(b)(2)
  • 23 CFR 1350.4(c)
  • 23 CFR 1350.4(c)(2)
  • 23 CFR 1350.4(d)
  • 23 CFR 1350.4(d)(2)
  • 23 CFR 1350.4(e)
  • 23 CFR 1350.4(e)(2)
  • 23 CFR 1350.4(f)
  • 23 CFR 1350.4(f)(2)
  • 23 CFR 1350.5
  • 49 CFR 18
  • 23 CFR 1350.6
  • 23 CFR 1350.7
  • 23 CFR 1350.8
+ 6 more
Citation graph
cites case law
Proposed Rules
Proposed rule; availability of risk assessment and request for comments
U.S.C.§ 450
U.S.C.§ 136
Stat.Public Law 100–484
Stat.Public Law 107–146
Fed. Reg.Notices
U.S.C.§ 7805
U.S.C.§ 21
Fed. Reg.Proposed Rules
Fed. Reg.Notices
Cite7 CFR 319
Cite7 USC 7701-7772
Cite7 CFR 319.56
Cites 59 · showing 12Cited by 0 across 0 sources
★   the supreme law of the land   ★
Don't Tread on Me
E Pluribus Unum — out of many, one

"If you don't know your rights, you don't have any."

Marginalia · a citizen's law index
A research desk, not legal advice. Always read the cited source before relying on a summary.
Questions or an issue? support@self-law.org
disclaimerMarginalia is a research index, not a law firm. Nothing on this site is legal, tax, or financial advice and no attorney–client relationship is formed by using it. Statutes, regulations, and case law change; summaries, search results, AI output, and member posts may be incomplete, out of date, or wrong. Any interpretation drawn from material on this site should be validated by a licensed attorney in your jurisdiction before you act on it.