Rules and Regulations. Interim final rule; request for public comment
49,775 words·~226 min read·
/register/2006/08/30/06-7248A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 6210-01-P FEDERAL RESERVE SYSTEM 12 CFR Part 205 [Regulation E; Docket No. R-1265] Electronic Fund Transfers AGENCY: Board of Governors of the Federal Reserve System. ACTION: Interim final rule; request for public comment. SUMMARY: The Board is amending Regulation E, which implements the Electronic Fund Transfer Act, and the official staff commentary to the regulation, which interprets the requirements of Regulation E. The amendments clarify that the requirement to obtain a consumer's authorization to collect a service fee for insufficient or uncollected funds through an electronic debit to the consumer's account applies to *any* person that intends to collect the fee in that manner.
The amendments also clarify notice requirements for electronic check conversion transactions and for collecting insufficient funds fees electronically. This interim final rule, for which the Board is seeking comment, will supersede the corresponding provisions of the January 2006 final rule that addressed these topics. DATES: This interim final rule is effective January 1, 2007. Comments must be received on or before September 29, 2006. ADDRESSES: You may submit comments, identified by Docket No.
R-1265, by any of the following methods: • Agency Web site: *http://www.federalreserve.gov.* Follow the instructions for submitting comments at *http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.* • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. • *E-mail: regs.comments@federalreserve.gov.* Include the docket number in the subject line of the message. • *Fax:*
(202)452-3819 or
(202)452-3102. • *Mail:* Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551. All public comments are available from the Board's Web site at *http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm* as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room MP-500 of the Board's Martin Building (20th and C Streets, NW.) between 9 a.m. and 5 p.m. on weekdays. FOR FURTHER INFORMATION CONTACT: Ky Tran-Trong, Senior Attorney, Vivian W. Wong, Attorney, or David A. Stein, Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551, at
(202)452-2412 or
(202)452-3667. For users of Telecommunications Device for the Deaf
(TDD)only, contact
(202)263-4869. SUPPLEMENTARY INFORMATION: I. Statutory Background The Electronic Fund Transfer Act (15 U.S.C. 1693 *et seq.* ) (EFTA or Act), enacted in 1978, provides a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer
(EFT)systems. The EFTA is implemented by the Board's Regulation E (12 CFR part 205). Examples of types of transfers covered by the Act and regulation include transfers initiated through an automated teller machine (ATM), point-of-sale
(POS)terminal, automated clearinghouse (ACH), telephone bill-payment plan, or remote banking service. The Act and regulation provide for disclosure of terms and conditions of an EFT service, documentation of EFTs by means of terminal receipts and periodic account activity statements, limitations on consumer liability for unauthorized transfers, procedures for error resolution, and certain rights related to preauthorized EFTs. Further, the Act and regulation also restrict the unsolicited issuance of ATM cards and other access devices. The official staff commentary (12 CFR part 205 (Supp. I)) is designed to facilitate compliance and provide protection from liability under Sections 915 and 916 of the EFTA for financial institutions and other persons subject to the Act. 15 U.S.C. 1693m(d)(1). The commentary is updated periodically to address significant questions that arise. II. Background and Summary of Interim Final Rule On January 10, 2006, the Board published a notice of final rulemaking in the **Federal Register** (71 FR 1,638) (January 2006 final rule) that was primarily intended to provide guidance regarding the rights, liabilities, and responsibilities of parties engaged in electronic check conversion transactions (ECK transactions). 1 In addition to the provisions addressing authorization and notice requirements for ECK transactions, the final rule provided that before a fee for insufficient or uncollected funds may be debited via an EFT from a consumer's account, the consumer must authorize the debit. Authorization is obtained when notice is provided to the consumer stating that the fee will be collected by means of an EFT and the consumer goes forward with the underlying transaction. The notice must also disclose the specific amount of the fee. *See* 71 FR at 1,645-46, 1,659. 1 In an ECK transaction, a merchant or other payee takes information from a consumer's check to initiate a one-time EFT from the consumer's account. Although the Board intended to apply the requirement to provide notice to the consumer for the electronic collection of insufficient funds fees to all persons seeking to collect such fees electronically, the Board inadvertently omitted a reference that would have specifically applied the requirement to all persons that intend to collect insufficient funds fees electronically. The interim final rule corrects this omission and also clarifies that the requirement to provide notice and obtain the consumer's authorization to collect a fee for insufficient or uncollected funds electronically does not apply to the consumer's account-holding financial institution. The interim final rule further specifies how to disclose the amount of the fee when the dollar amount of the fee may vary based on the transaction amount or due to other factors. The interim final rule clarifies that payees that intend to collect fees for insufficient or uncollected funds electronically at POS need not provide consumers an exact copy of the posted notice stating the payees' intent to collect such fees electronically, but instead may provide a notice that is substantially similar to the posted notice. Similar flexibility is provided for payees engaged in ECK transactions at POS with respect to the requirement to provide the consumer a notice stating the payee's intent to convert checks provided by a consumer to EFTs. The effective date of this interim final rule is January 1, 2007. However, the rule provides that payees at POS will not have to disclose either the dollar amount of the insufficient funds fee or an explanation of how that fee will be determined on the version of the notice given to consumers at the time of the transaction until January 1, 2008. Because the substantive requirements of this rule are largely unchanged from the corresponding provisions of the January 2006 final rule, the Board is issuing this rule in interim final form, rather than as a new proposal. The interim final rule also provides interested parties an opportunity to comment on all aspects of the revised requirement and clarifications. III. Section-by-Section Analysis Section 205.3 Coverage 3(a) General Section 205.3(a) is revised to incorporate a revision that was inadvertently omitted from the January 2006 final rule addressing electronic check conversion transactions, ATM disclosures and other matters. *See* 71 FR 1,638 (January 10, 2006). Specifically, § 205.3(a) is revised pursuant to the Board's authority under Sections 904(c) and 904(d)(1) of the EFTA to provide that the requirement in § 205.3(b)(3) to obtain a consumer's authorization to collect a fee for insufficient or uncollected funds via an EFT to the consumer's account applies to any person. *See* 71 FR at 1,645-46. As further discussed under § 205.3(b)(3), this amendment would enable the Board to clarify that the requirement to obtain the consumer's authorization applies to the merchant or other payee seeking to collect an insufficient funds fee electronically and not to the consumer's account-holding institution. 3(b) Electronic Fund Transfer Electronic Check Conversion Under the January 2006 final rule, merchants and other payees in ECK transactions are required to obtain the consumer's authorization for the one-time transfer. Generally, authorization is obtained when the payee provides a notice to the consumer that a check received as payment will be converted to an EFT, and the consumer goes forward with the transaction. At POS, the notice must be posted in a prominent and conspicuous location, and a copy of the notice must be provided to the consumer at the time of the transaction, such as on a receipt. *See* § 205.3(b)(2); 71 FR at 1,640-41. Model language was provided in the January 2006 final rule to facilitate compliance. *See* Model Clause A-6. This interim final rule clarifies that the notice given to the consumer at the time of the transaction must be substantially similar to the notice posted at POS, but need not be an exact copy of the posted notice. Since publication of the January 2006 final rule, the Board has received inquiries regarding whether the requirement to provide a copy of the notice posted at POS affords payees flexibility to modify the language in the notice given to consumers, or whether the rule requires the copy to contain the same language as the posted notice. For example, a payee might seek to modify the text of the notice given to the consumer ( *e.g.* , by changing the text from “You authorize us to use information from your check * * *” to “I authorize you to use information from my check * * *”) to make the notice more meaningful to the consumer. The Board did not intend that the text of the copy given to the consumer necessarily be identical to the text on the posted sign. As stated in the SUPPLEMENTARY INFORMATION to the January 2006 final rule, the requirement to provide a copy is intended to give consumers a document explaining that their checks might be converted that they may take home to refer to later, if necessary. *See* 71 FR at 1,642. Accordingly, § 205.3(b)(2) is revised to clarify that payees may provide to the consumer either a copy of the text of the notice posted at POS or alternatively, a substantially similar notice. Payees modifying the text of the posted notice in the notice given to the consumer must ensure that consumers are sufficiently informed that, by providing a check as payment, the consumer has authorized the conversion of the check to an EFT from the consumer's account. Collection of Service Fees Through an Electronic Fund Transfer Section 205.3(b)(3) was added in the January 2006 final rule to clarify that an EFT from a consumer's account to collect a fee due to insufficient or uncollected funds is covered by Regulation E and must be authorized by the consumer. Under the January 2006 final rule, a consumer authorizes the electronic collection of a fee for a check or EFT returned due to insufficient funds when the consumer receives notice of the intent to collect the fee from the consumer's account by EFT, along with a disclosure of the amount of the fee, and goes forward with the underlying transaction. *See* 71 FR at 1,645-46. The interim final rule redesignates § 205.3(b)(3) as § 205.3(b)(3)(i) and also clarifies that the obligation to provide notice to obtain the consumer's authorization to electronically collect a fee for insufficient or uncollected funds applies to the person seeking to collect the fee. The interim final rule also provides that if the amount of the fee may vary due to the amount of the underlying transaction or due to other factors, the person collecting the fee may, in many cases, provide an explanation of how the fee is determined, rather than provide a specific dollar amount. In addition, § 205.3(b)(3) is revised to state that at POS, the notice given to the consumer may be substantially similar to the posted notice, so long as the consumer is sufficiently informed of the payee's intent to electronically collect an insufficient funds fee and the amount of the fee. Persons Subject to the Requirement While § 205.3(b)(3) as adopted in the January 2006 final rule was intended to apply the notice and authorization requirement to the person electronically collecting a fee for any items returned to that person due to insufficient or uncollected funds in the consumer's account, the rule did not specifically indicate the party that was required to provide the notice. Section 205.3(b)(3) thus arguably could create some confusion as to whether the obligation of providing the notice lies with the payee seeking to collect the insufficient funds fee electronically or with the consumer's account-holding financial institution. The interim final rule therefore clarifies that the obligation to provide the notice to obtain the consumer's authorization for the electronic collection of insufficient funds fees rests with the party seeking to collect the fee, which typically would be a merchant or other payee. Accordingly, if a payee fails to obtain a consumer's authorization for it to collect a fee for insufficient or uncollected funds by means of an EFT from the consumer's account, the payee collecting that fee, and not the consumer's account-holding financial institution, has violated the regulation. Section 205.3(b)(3) is redesignated as § 205.3(b)(3)(i). Revised comment 3(b)(3)-1 clarifies that the requirement in § 205.3(b)(3) is not intended to apply to the consumer's account-holding financial institution when it assesses a fee against the consumer's account for returning a check or EFT unpaid or for paying an overdraft, regardless of where the underlying transaction has taken place (for example, at a POS, at an ATM, or for a check that a consumer has sent in as payment). Notice Requirements—General As provided in the January 2006 final rule and in this interim final rule, payees must provide notice of their intent to electronically collect a fee for insufficient or uncollected funds. The notice must also state the amount of the fee. At POS, the notice must be posted in a prominent and conspicuous location and a copy of the notice must be provided to the consumer at the time of the transaction, such as on the sales receipt. Payees in accounts receivable conversion (ARC), or lockbox, transactions will typically provide written notice on a billing statement or invoice. *See* § 205.3(b)(3); 71 FR at 1,646. A separate notice to obtain the consumer's authorization to electronically collect a fee for items returned not paid due to insufficient funds in the consumer's account must be provided by the payee each time the payee seeks to collect the fee. Thus, the inclusion of authorization language in a contract or initial terms and conditions, for example, in an insurance contract or a utility agreement, would not satisfy a payee's obligation to provide notice each time it may seek to electronically collect an insufficient funds fee from the consumer's account. *See* comment 3(b)(2)-3. The interim final rule in § 205.3(b)(3)(i) clarifies that the disclosure of the fee must be expressed in a dollar amount. This requirement is intended to inform consumers of how much they may be charged in the event they have insufficient funds in their account to clear the underlying transaction. *See* 71 FR at 1,646. State laws addressing the maximum fee that payees may collect for returned items due to insufficient or uncollected funds are not uniform, however. While in many states, the maximum fee that may be charged for items returned for insufficient funds is expressed as a flat fee regardless of the amount of the transaction, in others the fee may vary based on the transaction amount or on additional factors. For example, in some states, the maximum fee that may be collected may be a series of flat fees based on the amount of the transaction ( *e.g.* , $25 for transactions up to $50, $30 for transactions between $50.01 and $300.00, and the greater of $40, or 5% of the face amount of the check, for transactions above $300), and in other states the maximum fee is a fixed percentage of the transaction amount ( *e.g.* , 5% of the transaction amount). Moreover, in at least one state, the maximum fee might vary based on the number of days that a payment continues to be owed ( *e.g.* , the maximum fee that may be collected in most cases is $25, but the fee may increase to $35 if the obligation remains outstanding after 15 days' notice). Thus, where the actual fee charged to the consumer may vary based on the amount of the underlying transaction or upon other factors beyond the payee's control, a requirement to disclose a specific dollar amount might impose considerable programming costs in some cases or be impossible to comply with in others. Accordingly, the interim final rule provides that where a fee for insufficient or uncollected funds may vary based on the amount of the transaction or other factors, such as the amount of time the obligation is left outstanding, a payee seeking to collect the fee electronically may, in many cases, instead provide an explanation of how the fee will be determined. ( *But see* § 205.3(b)(3)(ii), requiring payees at POS to state the dollar amount of the fee on the notice given to the consumer where the fee can be calculated at the time of the transaction.) Comment 3(b)(3)-2 provides an example of how the rule would apply when a person seeks to electronically collect an insufficient funds fees in connection with an ARC transaction. To facilitate compliance, the January 2006 final rule provided model language that payees may use to disclose their intent to collect a fee for insufficient or uncollected funds electronically as well as the amount of the fee. Specifically, payees could disclose: “You authorize us to collect a fee of $__ through an electronic fund transfer from your account if your payment is returned unpaid.” *See also* Model Clauses A-6(a) and
(b)in the January 2006 final rule. In the interim final rule, this clause has been moved to a new section A-8 of Appendix A because the requirement to disclose the payee's intent to collect electronically a fee for insufficient or uncollected funds is not limited to electronic check conversion transactions, but could apply more broadly ( *e.g.,* when the underlying transaction is processed as a check transaction). The model clause has been revised for consistency with the interim final rule, and to improve its readability. Notice Requirements—POS Transactions As noted previously, under the January 2006 final rule, payees at POS must post notice of their intent to collect an insufficient funds fee electronically (along with the amount of the fee) in a prominent and conspicuous location, and a copy of the notice must be provided to the consumer at the time of the transaction, such as on the sales receipt. The interim final rule in § 205.3(b)(3)(ii) permits payees to provide on the posted notice a description of how the fee is determined if it may vary based on the transaction amount or upon other factors beyond the payee's control. However, if the dollar amount of the fee can be calculated at the time of the transaction, the interim final rule provides that the copy of the notice provided to the consumer at POS must state that dollar amount, rather than an explanation of how that fee is determined. For example, in a state where the fee may vary based solely on the amount of the underlying transaction, the payee may provide an explanation of how the fee may be determined on the posted notice, but would be required to provide the actual dollar amount of the fee on the notice provided to the consumer. Conversely, in a state where the amount of the service fee cannot be calculated at the time of the transaction ( *e.g.,* where the amount of the fee will depend on the number of days a debt continues to be owed), the payee may provide a description of how the fee will be determined on both the posted notice as well as on the copy provided to the consumer. *See* comment 3(b)(3)-3. Comment is requested on this approach, and specifically on the feasibility and the costs associated with providing the specific dollar amount of the insufficient funds fee that may be collected on the copy of the notice provided to the consumer at POS, if the maximum amount of the fee that may be collected is determined solely based on the amount of the transaction. Comment is also solicited regarding whether insufficient funds fees may be electronically collected by payees in circumstances other than in connection with a POS transaction or an ARC transaction when a consumer sends in a payment for a recurring bill or invoice ( *e.g.,* to pay a credit card or a utility bill). Consistent with the prior discussion regarding disclosures for ECK transactions, the notice given to the consumer at the time of the transaction regarding a person's intent to electronically collect an insufficient funds fee may be a copy of the posted notice, or may be a substantially similar notice. *See* § 205.3(b)(3)(ii). Thus, payees at POS may modify the text of the notice given to consumers as long as the notice sufficiently conveys to the consumer the payee's intent to electronically collect a fee if an item is returned to the payee due to insufficient or uncollected funds in the consumer's account, and the amount of the fee (or an explanation of how that fee is determined). Delayed Compliance Date for Terminals at POS Since publication of the January 2006 final rule, the Board has had discussions with vendors of check processing services and understands that achieving full compliance with the requirement to disclose the amount of the service fee on the receipt given to the consumer at POS will require considerable time and expense in order to reprogram existing terminals to provide the necessary information. In light of the fact that the notice posted at POS will inform consumers of the payee's intent to electronically collect fees for insufficient funds and at a minimum describe how those fees may be determined, the Board believes that the costs of reprogramming terminals used to generate receipts provided to the consumer by the January 1, 2007, compliance date would outweigh the additional benefit of providing the specific dollar amount of the fee to the consumer. Accordingly, § 205.3(b)(3)(iii) of the interim final rule provides a one-year delay in the compliance date with respect to the requirement to disclose the amount of the insufficient funds fee (or an explanation of the fee when the specific amount cannot be determined at the time of the transaction) on the copy of the notice, or substantially similar notice, given to the consumer at the time of the transaction. This delayed compliance provision is limited solely to the disclosure on the version of the notice given to the consumer regarding the amount of the insufficient funds fee that may be collected and does not apply to the requirement to disclose on that notice, the payee's intent to electronically collect the fee. The delayed compliance date also does not apply to the requirement to provide the amount of the fee, or an explanation of how the fee is determined, on the posted notice. This interim final rule supersedes the corresponding provisions of §§ 205.3(a) and 205.3(b)(3) and associated commentary that was contained in the January 2006 final rule. The Board seeks comment on all aspects of the interim final rule. IV. Final Regulatory Flexibility Analysis The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )
(RFA)generally requires an agency to perform an assessment of the impact a rule is expected to have on small entities. However, under section 605(b) of the RFA, 5 U.S.C. 605(b), the regulatory flexibility analysis otherwise required under section 604 of the RFA is not required if an agency certifies, along with a statement providing the factual basis for such certification, that the rule will not have a significant economic impact on a substantial number of small entities. Based on its analysis and for the reasons stated below, the Board certifies that this interim final rule will not have a significant economic impact on a substantial number of small entities. 1. *Statement of the need for, and objectives of, the interim final rule* . The Board is revising Regulation E to clarify that a person that intends to collect a fee for insufficient or uncollected funds via an EFT from a consumer's account must obtain the consumer's authorization. Authorization would be obtained by the person, typically a merchant or other payee, if the person provides a written notice of its intent to collect the fee electronically, along with a disclosure of the dollar amount of the fee, and the consumer goes forward with the underlying transaction after receiving that notice. This requirement would allow consumers to receive prior notice of a payee's intent to electronically collect a fee for insufficient or uncollected funds and enable the Board to promote consistency in the notice provided to consumers by merchants and other payees. In response to industry requests for flexibility with respect to the requirement to provide consumers with a copy of the notice posted at POS informing them of the payee's intent to electronically collect a fee for insufficient or uncollected funds, the interim final rule states that payees may provide a substantially similar notice. A similar revision is made with respect to the electronic check conversion requirements at POS. Accordingly, payees may provide consumers with a notice that is substantially similar to the notice posted at POS informing consumers that the payee may convert checks received as payment to EFTs. In addition, to address state laws that, for example, permit payees to charge a fee for items returned due to insufficient funds in a consumer's account based on a percentage of the underlying transaction (rather than a flat fee regardless of the transaction amount), the interim final rule permits payees to disclose a description of how the fee will be determined in lieu of an actual dollar amount. However, if the dollar amount can be calculated at the time of the transaction, payees must state the dollar amount of the fee on the version of the notice provided to the consumer. The EFTA was enacted to provide a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer systems. The primary objective of the EFTA is the provision of individual consumer rights. 15 U.S.C. 1693. The EFTA authorizes the Board to prescribe regulations to carry out the purpose and provisions of the statute. 15 U.S.C. 1693b(a). The Act expressly states that the Board's regulations may contain “such classifications, differentiations, or other provisions, * * * as, in the judgment of the Board, are necessary or proper to effectuate the purposes of [the Act], to prevent circumvention or evasion [of the Act], or to facilitate compliance [with the Act].” 15 U.S.C. 1693b(c). The Act also states that “[i]f electronic fund transfer services are made available to consumers by a person other than a financial institution holding a consumer's account, the Board shall by regulation assure that the disclosures, protections, responsibilities, and remedies created by [the act] are made applicable to such persons and services.” 15 U.S.C. 1693b(d). The Board believes that the revisions to Regulation E discussed above are within Congress's broad grant of authority to the Board to adopt provisions that carry out the purposes of the statute. 2. *Issues raised by comments in response to the initial regulatory flexibility analysis* . In accordance with section 603(a) of the RFA, the Board conducted an initial regulatory flexibility analysis in connection with the September 2004 proposal (69 FR 55,996 (September 17, 2004)). In accordance with section 604(a) of the RFA, the Board also conducted a final regulatory flexibility analysis in connection with its January 2006 final rule (71 FR 1,638 (January 10, 2006)). The Board did not receive any comments on either of these regulatory flexibility analyses specifically with respect to the disclosure of a person's intent to electronically collect a fee for insufficient or uncollected funds. However, one commenter, a major provider of check processing services, in response to the September 2004 proposal, noted that in general any changes to the authorization language provided to consumers in electronic check conversion transactions at POS locations would entail re-programming of the terminals typically used to provide notices and obtain the consumer's authorization. 3. *Small entities affected by the interim final rule* . Merchants or other payees that initiate one-time EFTs from a consumer's account to electronically collect a fee for items returned due to insufficient or uncollected funds in the consumer's account will be required under the regulation to obtain the consumer's authorization for the transfer. Payees must provide written notice of their intent to collect the fees electronically, and disclose the dollar amount of the fee. For ARC transactions, notice will likely be provided on a billing statement or invoice. At POS, notice must be provided by posted signage, and a copy of the notice, or a substantially similar notice, must be given to the consumer. The Board believes many small merchants and other payees that electronically collect fees for returned items due to insufficient or uncollected funds in a consumer's account are currently providing written notices to collect such fees debited, either on posted signage or on a transaction receipt at POS, and possibly both. Similarly, the Board believes that payees are providing written notices in ARC transactions because payment system rules currently require written notices. Therefore, small entities affected by this interim final rule are unlikely to have to craft entirely new notices as a result of this rule. Although they will have to review, and likely revise, their existing notices, including reprogramming the terminals used to generate these notices, the Board does not expect that the burden associated with these tasks will be significant. To further facilitate compliance, the Board provided model language regarding the notice requirement as part of the January 2006 final rule, and has provided revised model language in this interim final rule. In addition, the interim final rule would extend for one year, the compliance date for the requirement to disclose the dollar amount of the fees for insufficient or uncollected funds on the notice provided to the consumer to allow additional time for any necessary programming changes. 4. *Other federal rules* . The Board has not identified any federal rules that duplicate, overlap, or conflict with the interim final revisions to Regulation E. 5. *Significant alternatives to the proposed revisions* . The Board solicits comment about potential ways to reduce regulatory burden associated with this interim final rule. V. Paperwork Reduction Act In accordance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the rule under the authority delegated to the Board by the Office of Management and Budget (OMB). The interim final rule contains requirements subject to the PRA. The collection of information that is required by this rule is found in 12 CFR 205.3(b)(3). The Federal Reserve may not conduct or sponsor, and an organization is not required to respond to, this information collection unless the information collection displays a currently valid OMB control number. The OMB control number is 7100-0200. This information is required to provide benefits for consumers and is mandatory (15 U.S.C. 1693 *et seq.* ). The respondents/recordkeepers are for-profit financial institutions, including small businesses. Institutions are required to retain records for 24 months. All persons, such as merchants and other payees, that may collect a fee for insufficient or uncollected funds via an EFT from the consumer's account potentially are affected by this collection of information, because these merchants and payees will be required to obtain a consumer's authorization for the electronic transfer under § 205.3(b)(3). Burden with respect to the requirement to provide notice to the consumer for the purpose of obtaining the consumer's authorization for the electronic collection of fees for insufficient or uncollected funds was previously estimated in the January 2006 final rule (Docket No. R-1210 and R-1234), and reported in accordance with those estimates in documents filed with OMB. Under the Board's prior analysis, the total burden under Regulation E for all financial institutions, including but not limited to the burden of obtaining a consumer's authorization to collect a fee for insufficient or uncollected funds electronically as a result of the January 2006 final rule as further amended by this interim final rule, is 1,250,959 hours. This burden estimate does not, however, include the burden associated with the new disclosure requirements in connection with payroll card accounts as announced in a separate final rule (Docket No. R-1247). Because the records would be maintained by the institutions and the notices are not provided to the Federal Reserve, no issue of confidentiality arises under the Freedom of Information Act. Text of Interim Final Revisions Comments are numbered to comply with **Federal Register** publication rules. List of Subjects in 12 CFR Part 205 Consumer protection, Electronic fund transfers, Federal Reserve System, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Board amends 12 CFR part 205 and the Official Staff Commentary, as follows: PART 205—ELECTRONIC FUND TRANSFERS (REGULATION E) 1. The authority citation for part 205 continues to read as follows: Authority: 15 U.S.C. 1603b. 2. Section 205.3 is amended by revising paragraphs (a), (b)(2)(ii) and (b)(3) as follows: § 205.3 Coverage.
(a)*General* . This part applies to any electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account. Generally, this part applies to financial institutions. For purposes of §§ 205.3(b)(2) and (b)(3), 205.10(b), (d), and
(e)and 205.13, this part applies to any person.
(b)*Electronic fund transfer* . * * *
(2)*Electronic fund transfer using information from a check* . * * *
(ii)The person initiating an electronic fund transfer using the consumer's check as a source of information for the transfer must provide a notice that the transaction will or may be processed as an EFT, and obtain a consumer's authorization for each transfer. A consumer authorizes a one-time electronic fund transfer (in providing a check to a merchant or other payee for the MICR encoding, that is, the routing number of the financial institution, the consumer's account number and the serial number) when the consumer receives notice and goes forward with the underlying transaction. For point-of-sale transfers, the notice must be posted in a prominent and conspicuous location, and a copy thereof, or a substantially similar notice, must be provided to the consumer at the time of the transaction.
(3)*Collection of insufficient funds fees via electronic fund transfer* .
(i)*General* . The person initiating an electronic fund transfer to collect a fee for the return to that person of an electronic fund transfer or a check due to insufficient or uncollected funds in the consumer's account must obtain the consumer's authorization for each transfer. A consumer authorizes a one-time electronic fund transfer from his or her account to pay the fee for insufficient or uncollected funds if the person collecting the fee provides notice to the consumer stating that the person may electronically collect the fee, and the consumer goes forward with the transaction. The notice must state that the fee will be collected by means of an electronic fund transfer from the consumer's account if the payment is returned due to insufficient or uncollected funds and must disclose the dollar amount of the fee. If the fee may vary due to the amount of the transaction or due to other factors, then, except as otherwise provided in paragraph (b)(3)(ii), the person collecting the fee may disclose, in place of the dollar amount of the fee, an explanation of how the fee will be determined.
(ii)*Point-of-sale transactions* . If a fee for insufficient or uncollected funds may be collected electronically in connection with a point-of-sale transaction, the person collecting the fee must post the notice described in paragraph (b)(3)(i) of this section in a prominent and conspicuous location, and also provide the consumer a copy of the posted notice, or a substantially similar notice, at the time of the transaction. If the amount of the fee may vary due to the amount of the transaction or due to other factors, the posted notice may explain how the fee will be determined, but in such cases, the notice provided to each consumer must state the dollar amount of the fee if the amount can be calculated at the time of the transaction.
(iii)*Delayed compliance date for fee disclosure* . Through December 31, 2007, the copy of the notice given to consumers at point-of-sale under paragraph (b)(3)(ii) of this section need not include either the dollar amount of any fee collected electronically for insufficient or uncollected funds or an explanation of how the fee will be determined. 3. In Appendix A to part 205, a. Section A-6 Model Clauses for Authorizing One-Time Electronic Fund Transfer Using Information From a Check (§ 205.3(b)(2)), paragraphs
(a)and
(b)are revised; and b. Section A-8 Model Clause for Electronic Collection of Insufficient Funds Fees (§ 205.3(b)(3)) is added. Appendix A to Part 205—Model Disclosure Clauses and Forms A-6 Model Clauses for Authorizing One-Time Electronic Fund Transfers Using Information From a Check (§ 205.3(b)(2)) (a)—Notice About Electronic Check Conversion When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction. (b)—Alternative Notice About Electronic Check Conversion (Optional) When you provide a check as payment, you authorize us to use information from your check to make a one-time electronic fund transfer from your account. In certain circumstances, such as for technical or processing reasons, we may process your payment as a check transaction. *[Specify other circumstances (at payee's option).]* A-8 Model Clause for Electronic Collection of Insufficient Funds Fees (§ 205.3(b)(3)) If your payment is returned due to insufficient funds in your account, you authorize us to make a one-time electronic fund transfer from your account to collect a fee of $__ . [If your payment is returned due to insufficient funds in your account, you authorize us to make a one-time electronic fund transfer from your account to collect a fee. The fee will be determined [by]/[as follows]: ____.] 4. In Supplement I to Part 205, under *Section 205.3—Coverage* , the heading “Paragraph 3(b)(3)—Collection of Service Fees via Electronic Fund Transfer” is revised as “Paragraph 3(b)(3)—Collection of Insufficient Funds Fees via Electronic Fund Transfer”, paragraph 1. is revised, and paragraphs 2. and 3. are added. Supplement I to Part 205—Official Staff Interpretations Section 205.3—Coverage *3(b) Electronic Fund Transfer* Paragraph 3(b)(3)—Collection of Insufficient Funds Fees via Electronic Fund Transfer 1. *Fees imposed by account-holding institution.* The requirement to obtain a consumer's authorization to collect a fee via EFT for the return of an EFT or check unpaid due to insufficient or uncollected funds in the consumer's account applies only to the person to whom the EFT or check was returned and that intends to collect the service fee by means of an EFT from the consumer's account. The authorization requirement does not apply to any fees assessed by the consumer's account-holding financial institution when it returns the unpaid underlying EFT or check or pays the amount of the overdraft. 2. *Accounts receivable transactions.* In an accounts receivable
(ARC)transaction where a consumer sends in a payment for amounts owed, a person seeking to electronically collect a fee for returned items due to insufficient or uncollected funds in a consumer's account must obtain the consumer's authorization to collect the fee. A consumer authorizes a person to electronically collect an insufficient funds fee when the consumer receives notice, typically on an invoice or statement, that the person may collect the fee through an EFT to the consumer's account, and the consumer goes forward with the underlying transaction by sending payment. The notice must also state the dollar amount of the fee. However, an explanation of how that fee will be determined may be provided in place of the dollar amount of the fee if the fee may vary due to the amount of the transaction or due to other factors. For example, if a state law permits a maximum fee of $30 or 10% of the underlying transaction, whichever is greater, a payee may explain how the fee is determined, rather than state a specific dollar amount for the fee. 3. *Disclosure of dollar amount of fee at POS.* The notice provided to the consumer at POS under § 205.3(b)(3)(ii) must state the amount of the fee for insufficient or uncollected funds if the dollar amount of the fee can be calculated at the time of the transaction. For example, if a state sets a maximum fee that may be collected due to insufficient or uncollected funds in a consumer's account based on the amount of the underlying transaction (such as where the amount of the fee is expressed as a percentage of the underlying transaction), the person collecting the fee must provide the actual dollar amount of the fee on the notice provided to the consumer. Alternatively, in a state where the amount of the insufficient funds fee a person may collect cannot be calculated at the time of the transaction (for example, where the amount of the fee will depend on the number of days a debt continues to be owed), the person collecting the fee may provide a description of how the fee will be determined on both the posted notice as well as on the notice provided to the consumer. By order of the Board of Governors of the Federal Reserve System. Dated: August 24, 2006. Jennifer J. Johnson, Secretary of the Board. [FR Doc. E6-14342 Filed 8-29-06; 8:45 am] BILLING CODE 6210-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 23 [Docket No. CE257, Special Condition 23-197-SC] Special Conditions: West Pacific Air LLC; Raytheon Beech Model B-36TC; Protection of Electronic Flight Instrument Systems From the Effects of High Intensity Radiated Fields
(HIRF)AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final special conditions; request for comments. SUMMARY: These special conditions are issued to West Pacific Air LLC, 6427 E. Rutter Road, Spokane, WA 99212, for a Supplemental Type Certificate for the Raytheon Beech Model B-36TC airplane. This airplane will have novel and unusual design features when compared to the state of technology envisaged in the applicable airworthiness standards. These novel and unusual design features include the installation of electronic flight instrument system
(EFIS)displays Model ICDS-10 manufactured by SAGEM Avionics, Inc. for which the applicable regulations do not contain adequate or appropriate airworthiness standards for the protection of these systems from the effects of high intensity radiated fields (HIRF). These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to the airworthiness standards applicable to these airplanes. DATES: The effective date of these special conditions is August 23, 2006. Comments must be received on or before September 29, 2006. ADDRESSES: Comments may be mailed in duplicate to: Federal Aviation Administration, Regional Counsel, ACE-7, Attention: Rules Docket Clerk, Docket No. CE257, Room 506, 901 Locust, Kansas City, Missouri 64106. All comments must be marked: Docket No. CE257. Comments may be inspected in the Rules Docket weekdays, except Federal holidays, between 7:30 a.m. and 4 p.m. FOR FURTHER INFORMATION CONTACT: Mr. Ervin Dvorak, Aerospace Engineer, Standards Office (ACE-110), Small Airplane Directorate, Aircraft Certification Service, Federal Aviation Administration, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone
(816)329-4123. SUPPLEMENTARY INFORMATION: The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA, therefore, finds that good cause exists for making these special conditions effective upon issuance. Comments Invited Interested persons are invited to submit such written data, views, or arguments as they may desire. Communications should identify the regulatory docket or notice number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered by the Administrator. The special conditions may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. CE257.” The postcard will be date stamped and returned to the commenter. Background On May 25, 2005, West Pacific Air LLC, 6427 E. Rutter Road, Spokane, WA 99212, applied for a new Supplemental Type Certificate for the Raytheon Beech Model B-36TC airplane. The Raytheon Beech Model B-36TC is currently approved under TC No. 3A15 and modified to TurbineAir configuration under STC SA01156SE. The proposed modification incorporates a novel or unusual design feature, such as digital avionics consisting of an EFIS that is vulnerable to HIRF external to the airplane. Type Certification Basis Under the provisions of 14 CFR part 21.101, West Pacific Air LLC must show that the Raytheon Beech Model B-36TC aircraft, as changed, continues to meet the following provisions, or the applicable regulations in effect on the date of application for the change to the Raytheon Beech Model B-36TC. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in TC No. 3A15 are as follows: CAR 3 effective May 15, 1956, through Amendment 3-8, effective December 18, 1962; Federal Aviation Regulations (14 CFR, part 23) § 23.1301, Amendment 23-20; § 23.1309, Amendment 23-49; § 23.1311, Amendment 23-49; § 23.1321, Amendment 23-49; § 23.1322, Amendment 23-43; § 23.1331, Amendment 23-43; and the special conditions adopted by this rulemaking action. Discussion If the Administrator finds that the applicable airworthiness standards do not contain adequate or appropriate safety standards for an airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16. Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38 after public notice, and become part of the type certification basis in accordance with § 21.101. Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model already included on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101. Novel or Unusual Design Features West Pacific Air LLC plans to incorporate certain novel and unusual design features into the Raytheon Beech Model B-36TC airplane for which the airworthiness standards do not contain adequate or appropriate safety standards for protection from the effects of HIRF. These features include EFIS, which are susceptible to the HIRF environment, that were not envisaged by the existing regulations for this type of airplane. *Protection of Systems from High Intensity Radiated Fields (HIRF):* Recent advances in technology have given rise to the application in aircraft designs of advanced electrical and electronic systems that perform functions required for continued safe flight and landing. Due to the use of sensitive solid state advanced components in analog and digital electronics circuits, these advanced systems are readily responsive to the transient effects of induced electrical current and voltage caused by the HIRF. The HIRF can degrade electronic systems performance by damaging components or upsetting system functions. Furthermore, the HIRF environment has undergone a transformation that was not foreseen when the current requirements were developed. Higher energy levels are radiated from transmitters that are used for radar, radio, and television. Also, the number of transmitters has increased significantly. There is also uncertainty concerning the effectiveness of airframe shielding for HIRF. Furthermore, coupling to cockpit-installed equipment through the cockpit window apertures is undefined. The combined effect of the technological advances in airplane design and the changing environment has resulted in an increased level of vulnerability of electrical and electronic systems required for the continued safe flight and landing of the airplane. Effective measures against the effects of exposure to HIRF must be provided by the design and installation of these systems. The accepted maximum energy levels in which civilian airplane system installations must be capable of operating safely are based on surveys and analysis of existing radio frequency emitters. These special conditions require that the airplane be evaluated under these energy levels for the protection of the electronic system and its associated wiring harness. These external threat levels, which are lower than previous required values, are believed to represent the worst case to which an airplane would be exposed in the operating environment. These special conditions require qualification of systems that perform critical functions, as installed in aircraft, to the defined HIRF environment in paragraph 1 or, as an option to a fixed value using laboratory tests, in paragraph 2, as follows:
(1)The applicant may demonstrate that the operation and operational capability of the installed electrical and electronic systems that perform critical functions are not adversely affected when the aircraft is exposed to the HIRF environment defined below: Frequency Field strength (volts per meter) Peak Average 10 kHz-100 kHz 50 50 100 kHz-500 kHz 50 50 500 kHz-2 MHz 50 50 2 MHz-30 MHz 100 100 30 MHz-70 MHz 50 50 70 MHz-100 MHz 50 50 100 MHz-200 MHz 100 100 200 MHz-400 MHz 100 100 400 MHz-700 MHz 700 50 700 MHz-1 GHz 700 100 1 GHz-2 GHz 2000 200 2 GHz-4 GHz 3000 200 4 GHz-6 GHz 3000 200 6 GHz-8 GHz 1000 200 8 GHz-12 GHz 3000 300 12 GHz-18 GHz 2000 200 18 GHz-40 GHz 600 200 The field strengths are expressed in terms of peak root-mean-square
(rms)values. or,
(2)The applicant may demonstrate by a system test and analysis that the electrical and electronic systems that perform critical functions can withstand a minimum threat of 100 volts per meter, electrical field strength, from 10 kHz to 18 GHz. When using this test to show compliance with the HIRF requirements, no credit is given for signal attenuation due to installation. A preliminary hazard analysis must be performed by the applicant, for approval by the FAA, to identify either electrical or electronic systems that perform critical functions. The term “critical” means those functions whose failure would contribute to, or cause, a failure condition that would prevent the continued safe flight and landing of the airplane. The systems identified by the hazard analysis that perform critical functions are candidates for the application of HIRF requirements. A system may perform both critical and non-critical functions. Primary electronic flight display systems, and their associated components, perform critical functions such as attitude, altitude, and airspeed indication. The HIRF requirements apply only to critical functions. Compliance with HIRF requirements may be demonstrated by tests, analysis, models, similarity with existing systems, or any combination of these. Service experience alone is not acceptable since normal flight operations may not include an exposure to the HIRF environment. Reliance on a system with similar design features for redundancy as a means of protection against the effects of external HIRF is generally insufficient since all elements of a redundant system are likely to be exposed to the fields concurrently. Applicability As discussed above, these special conditions are applicable to Raytheon Beech Model B-36TC airplane. Should West Pacific Air LLC apply at a later date for a supplemental type certificate to modify any other model on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101. Conclusion This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane. The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason, and because a delay would significantly affect the certification of the airplane, which is imminent, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above. List of Subjects in 14 CFR Part 23 Aircraft, Aviation safety, Signs and symbols. Citation The authority citation for these special conditions is as follows: Authority: 49 U.S.C. 106(g), 40113 and 44701; 14 CFR 21.16 and 21.101; and 14 CFR 11.38 and 11.19. The Special Conditions Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for the Raytheon Beech Model B-36TC airplane modified by West Pacific Air LLC to add an EFIS. 1. *Protection of Electrical and Electronic Systems from High Intensity Radiated Fields (HIRF).* Each system that performs critical functions must be designed and installed to ensure that the operations, and operational capabilities of these systems to perform critical functions, are not adversely affected when the airplane is exposed to high intensity radiated electromagnetic fields external to the airplane. 2. *For the purpose of these special conditions, the following definition applies: Critical Functions:* Functions whose failure would contribute to, or cause, a failure condition that would prevent the continued safe flight and landing of the airplane. Issued in Kansas City, Missouri, on August 23, 2006. David R. Showers, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-14457 Filed 8-29-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. 2001-NE-30-AD; Amendment 39-14728; AD 2006-17-07] RIN 2120-AA64 Airworthiness Directives; Pratt & Whitney JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17A, -17R, -17AR, -209, -217, -217A, -217C, and -219 Turbofan Engines AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive
(AD)for Pratt & Whitney
(PW)JT8D-209, -217, -217A, -217C, and -219 turbofan engines. That AD currently requires initial and repetitive visual inspections for fretting and fluorescent magnetic particle inspections
(FMPI)for cracking in the area of the tierod holes on 8th stage high pressure compressor
(HPC)front hubs (from here on, referred to as HPC front hubs) that have operated at any time with PWA 110-21 coating. This AD requires either replacing HPC front hubs and HPC disks that have operated at any time with PWA 110-21 coating and that operated in certain engine models, or, visually inspecting and FMPI for cracking of those parts and re-plating them if they pass inspection. This AD also requires adding JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17A, -17R, and -17AR engines to the applicability. This AD results from an investigation by PW, which concluded that any HPC front hub or HPC disk coated with PWA 110-21 that ever operated on JT8D-15, -15A, -17, -17A, -17R, -17AR, -209, -217, -217A, -217C, and -219 turbofan engines, could crack before reaching their published life limit. We are issuing this AD to prevent a rupture of an HPC front hub or an HPC disk that could result in an uncontained engine failure and damage to the airplane. DATES: This AD becomes effective October 4, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of October 4, 2006. ADDRESSES: You can get the service information identified in this AD from Pratt & Whitney, 400 Main St., East Hartford, CT 06108, telephone
(860)565-7700; fax
(860)565-1605. You may examine the AD docket at the FAA, New England Region, Office of the Regional Counsel, 12 New England Executive Park, Burlington, MA. You may examine the service information, at the FAA, New England Region, Office of the Regional Counsel, 12 New England Executive Park, Burlington, MA. FOR FURTHER INFORMATION CONTACT: Keith Lardie, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone
(781)238-7189; fax
(781)238-7199. SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR Part 39 with a proposed AD. The proposed AD applies to PW JT8D-209, -217, -217A, -217C, and -219 turbofan engines. We published the proposed AD in the **Federal Register** on December 30, 2005 (70 FR 77342). That action proposed to require either replacing HPC front hubs and HPC disks that have operated at any time with PWA 110-21 coating and that operated in certain engine models, or, visually inspecting and FMPI for cracking of those parts and re-plating them if they pass inspection. That action also proposed to require adding JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17A, -17R, and -17AR engines to the applicability. Examining the AD Docket You may examine the AD Docket (including any comments and service information), by appointment, between 8 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays. See ADDRESSES for the location. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Question the Need To Inspect Every Stage of the Disks Two commenters question the need to inspect disks from additional HPC stages. The commenters ask how many instances of cracking, to what severity, in what types of coating, which operators, and how many cycles were accumulated. We do not agree. Our data shows that cracking was found in several HPC front hubs, as well as in other stages, if any mating surface between the HPC front hub and the 8-9 spacer is coated with PWA 110-21. Disks in other HPC stages have different initiation rates and, therefore, a lower risk of failing. But each stage has the same cause of cracking and carries a risk of failure that exceeds our risk criteria, if allowed to go until overhaul. We have no data that indicates the risk is operations dependent. We did not change the AD. Request Clarification As To What Previous Actions Exempt an Engine From This AD Three commenters request clarification as to what previous actions exempt an engine from the requirements of this AD. They suggest that credit should be given to engines with HPC front hubs that have previously been inspected per PW Alert Service Bulletin
(ASB)JT8D A6430 and associated AD 2002-23-14. They note that the proposed AD does not give this credit. They also suggest that the previous inspection under AD 2002-23-14 should be acceptable, even though the 7th stage HPC disks and 9th stage-through-12th stage HPC disks were not inspected. As currently written, the proposed AD would require operators to start the 8th stage HPC front hub inspection program over because all of the proposed actions required may not have been performed previously. Industry would be required to remove previously inspected engines from service, reinspect the 8th stage HPC front hub, and inspect and “overhaul” the entire HPC stack at tremendous expense and operational impact. We agree. All previous inspections before the effective date of this superseding AD are acceptable. The inspection schedule for all affected disks is based only on the HPC front hub inspection schedule. We will give credit for all engines that previously complied with AD 2003-23-14. However, from the time of the effective date of this AD, all HPC disks and hubs stages 7-through-12 must be inspected for disk fretting when the front hub is inspected. We added the following statement to compliance paragraph
(e)of this AD: “Any engine with an HPC front hub that has been inspected using AD 2002-23-14, AD 2003-12-07, or AD 2003-16-05, is considered in compliance with this AD.” Inspection Schedule Seems Too Short an Interval Three commenters state that the inspection schedule for where the front hub is coated with Nickel-Cadmium and the 8-9 spacer is coated with PWA 110-21 seems too short an interval. Also, Rows
(1)and
(2)of Table 1 of the proposed AD seem inconsistent with the referenced PW ASBs. The commenters ask if this was the FAA's intent. For example, ASB JT8D A6430 is a less severe condition and allows the inspection to be postponed until next shop visit. Further, the ASBs force hub inspections (per the drawdown table) for hubs that operated with PWA 110-21 coating. But for hubs that only operated plated with Nickel-Cadmium (regardless of spacer coating type), the inspections are performed when the hub is accessible. We partially agree. The risk for front hubs plated with Nickel-Cadmium is less severe than if the HPC front hub is coated with PWA 110-21, so it is not accurate to maintain the same inspection limits. Our analysis does not agree with PW's that the risk is low enough to wait until next shop visit. We added Table 5 to maintain the inspection limits from AD 2002-23-14 in response to the comment. Request To Clarify Inspection One commenter requests that we clarify that the inspection listed in PW ASB JT8D A6430, is valid for HPC front hubs coated with Nickel-Cadmium. Paragraphs 1. through 1.A, and 2. through 2.C of that ASB only refer to HPC front hubs that are coated with PWA 110-21. We agree. We clarified the wording in this AD to indicate the correct inspection procedure. Limit in Table 2 and Table 4 Should Be Changed Three commenters state that the limit in rows
(iii)and
(iv)of Table 2 and Table 4 of the proposed AD should be changed to match PW ASB JT8D A6430, Revision 2, dated December 23, 2004 and ASB JT8D A6468, dated December 23, 2004. It appears that the intent was to mirror the compliance as specified in the ASBs, but as-written, the compliance in rows
(iii)and
(iv)do not agree with the ASBs. Specifically, any disk with fewer than 5,000 cycles-in-service has conflicting requirements in rows
(iii)and (iv). We agree and made that change in the AD. Request To Change “Hub Accessibility” to “Shop Visit” One commenter requests that we change the phrase “hub accessibility” to “shop visit” for determining the compliance schedule. The commenter points out that we defined “shop visit” in the proposed AD but did not use it in the compliance. We partially agree. Since “shop visit” is not being used in the AD, we omitted all definitions and clarifications of “shop visit”. We also included a definition of “accessible” in the AD, to parallel the ASB. Request To Remove the Word “Terminating” One commenter requests that we remove the word “terminating” as described for the required inspections. The commenter states that their understanding is that the inspection is a onetime inspection and is not repetitive. We agree. Only those HPC front hubs that are accessible and inspected before 5,000 cycles-in-service require re-inspection. We removed the word “terminating” from the AD. Request To Change Table Titles One commenter requests that we change the titles of Table 2 and Table 4 of the proposed AD from “HPC Disk Inspection Schedule” to “HPC Front Hub Inspection Schedule”, for clarification. We agree and made the changes in the AD. Request To Add Additional Entries to Table 1 One commenter requests that we add additional entries to Table 1 of the proposed AD to clarify AD applicability for Nickel-Cadmium coated HPC front hubs installed on JT8D-STD engines. We agree and have added a fourth column to Table 1 in the AD. Request To Clarify the Intent To Inspect 8th Stage Hubs That Are in JT8D-1A, -1B, -7, -7A, -7B, -9, -9A, and -11 Engines One commenter requests that we clarify the intent to inspect 8th stage hubs that are in JT8D-1A, -1B, -7, -7A, -7B, -9, -9A, and -11 engines. The commenter states that Table 1 of the proposed AD appears to be in conflict with paragraph (f)(1) of the proposed AD. We partially agree. Paragraph (f)(1) is not in conflict with Table 1, but we changed the AD to clarify that paragraph (f)(1) is for engines as applicable in Table 1. Suggestion To Use Flowchart One commenter suggests that we replace Table 1 of the proposed AD with a yes/no flowchart, which would be much easier to use since the decision logic is clearly conveyed. The commenter states that the FAA requires operators to have simple and concise manuals to ensure technicians understand tasks to be performed at the appropriate intervals. Table 2 “HPC Disk Inspection Schedule” in the proposed AD is complex, with numerous back and forth reading to determine the correct inspection interval. We partially agree. Our table format is adequate. Therefore, we did not change the table format in the AD. But we also interpret the commenter's suggestion as a request for additional clarity in the table's wording, similar to other comments we received. As noted in response to other comments, we made several changes to the AD for clarification as a result of earlier comments. No further clarification is needed. Request To List Engine Manual Inspection and Associated Limits One commenter requests that we revise the proposed AD language that mandates use of inspection criteria from the service bulletins, to list the Engine Manual inspection and associated limits. The commenter states that the proposed AD language requires a strict adherence to the exact PW procedures. Operators have other Certificate Management Organization-approved maintenance programs that use alternate materials or processes. As written, operators would have to request Alternative Means of Compliance (AMOCs) to use their equivalent processes. We do not agree. As the standard practices of PW change, we will reevaluate them. Operators should submit an AMOC if they want to use other methods than those in this AD. We did not change the AD. Request To Only Allow Use of Electroless Nickel One commenter requests that we change the proposed AD to only allow the use of Electroless Nickel. The proposed AD allows operators to restore the coating with Nickel-Cadmium. The PW Engine Manual allows the electrical contact area used on the spacers during Nickel-Cadmium restoration to be covered with PWA 595 (Aluminide paint) placing the same coating in the same critical areas of concern. ASB JT8D A6468 leaves the electrical contact areas bare after the Nickel-Cadmium is applied. The bare electrical contact areas are open to oxidation. Using Electroless Nickel would eliminate the potential for corrosion in bare electrical contact areas resulting from the Nickel-Cadmium process. We do not agree that Electroless Nickel should be the only coating used. That would mean that Nickel-Cadmium coating must also be eliminated. Electroless Nickel may only be used on the spacers; not the disks. The data we have shows that corrosion on spacers is not an issue in the field. However, eliminating Electroless Nickel would leave several disks without protection against corrosion. We did not change the AD. Request To Add Requirement That No PWA 110-21 Coated Units Be Re-Installed One commenter requests that we standardize the coatings applied to all the steel disks and spacers, with a requirement that after the effective date of the AD, no PWA 110-21 coated units are to be installed in engines and or modules. PW ASB JT8D A6468 implies that the PWA 110-21 coating is no longer to be used. The detail in the accomplishment section of the ASB allows PWA 110-21 and Nickel-Cadmium to be applied to the disks and or hubs. Spacers can use one of three coatings, which are Nickel-Cadmium, PWA 110-21, or Electroless Nickel. Accomplishment of ASB JT8D A6468 is not proof that the units have eliminated PWA 110-21 coating from disks, hubs, and spacers. The current JT8D Engine Manual, P/N 481672, allows for any coating to be applied to the units under the proposed AD. We agree. 7th stage HPC disks, HPC front hubs, and stage 8-9 spacers coated with PWA 110-21 are not serviceable. Removing the option to use PWA 110-21 coating from the engine manual prevents recoating and installing them. We changed the AD to prevent installation of those PWA 110-21 coated parts. Request To Continue This Inspection Program on All Units One commenter requests that we continue the inspection program even when operators install units that are not coated with PWA 110-21. The commenter states that the FAA is proposing to terminate the inspection program when the operators install units that have never used PWA 110-21 or come in contact with PWA 110-21. This proposed AD could lead to noncompliance with the proposed AD, by the simple introduction of one unit that has been coated with PWA 110-21, as the FAA has not forced elimination of PWA 110-21 coating. We do not agree. This AD does not terminate the previous inspection program. The other disks are still subject to an inspection at the next shop visit per other ADs, mitigating the risk of cracking due to fretting. We did not change the AD. Claim That Estimated Costs of Proposed AD Understated One commenter claims the estimated total cost to U.S. operators of the proposed AD is understated. The commenter estimates the labor hours to reassemble the areas accessed and make each engine serviceable, to be 172 hours. Further, the number of engines in service exceeds 1,573 since all engines will be affected by the proposed AD, unless the inspection program for the hubs is synchronized with AD 2003-12-07. We do not agree. The commenter provided no data that indicates our estimate of affected U.S. engines is wrong, or that every engine will require 172 hours of work. Our analysis indicates this AD will result in only some engines being removed from service early. Further, we allow credit for previous inspections per AD 2002-23-14, as well as AD 2003-12-07 and AD 2003-16-05. We did not change the AD. Complete Visual Inspection Labor Hours Should Be Included One commenter states that the labor hours for the complete visual inspection should be included in the cost of the proposed AD. The proposed AD implies that the inspection for corrosion as the result of fretting is a simple visual inspection. The inspection for corrosion requires a complete removal of the corrosion preventative coating and close visual examination with precision equipment or recognized standard to accurately determine the extent and depth of the corrosion in areas outside the spacer contact area We do not agree. The commenter provided no data to show that the AD will take longer than our estimate. We are only addressing costs related to the visual inspection for disk fretting. This AD is not about corrosion, and the inspection does not require specialized equipment. We did not change the AD. Claim That Costs of Records Research Not Included Two commenters claim the proposed AD does not include the cost of records research. They suggest that operators will have to do extensive research of the engine and HPC module records. The only reliable records are the hub hours and cycles accumulated, indicating hub utilization in the engines. One of the commenters estimates that each engine search will require 8 labor hours. We do not agree. The cost to research records is not a valid cost for including in an estimate of cost of compliance for proposed ADs. We did not change the AD. Additional Conditional Inspection Adds to the Cost One commenter states that the proposed AD includes a conditional requirement to inspect the remaining steel HPC disks and or hubs whenever the 8th stage hub is inspected. Unless it is synchronized with AD 2003-12-07, this additional conditional inspection adds to the cost of compliance to the proposed AD. Airworthiness Directive 2003-12-07 currently requires inspection of the disks every four to eight calendar years, depending on the disk configuration or at two to four years, at shop exposure. We do not agree. Our costs estimate considers inspections that occur before a scheduled shop visit as a result of this AD. We do not consider the costs to comply with other ADs or requirements to be costs directly associated with this AD. We did not change the AD. Claim That Including JT8D-1 Through -17AR Series Engines Is Unnecessary Two commenters claim that including the JT8D-1 through -17AR series engines into (the AD superseding) AD 2002-23-14 (JT8D-200 series) is unnecessary, based on the similarity of current requirements of AD 2003-12-07 and AD 2003-16-05. AD 2003-12-07 has a more restrictive inspection interval than the inspections of the proposed AD. Discontinuing PWA 110-21 coating at the next disk spacer overhaul and only allowing Nickel-Cadmium recoating would be a more effective method to enhancing safety than the proposed AD. In addition, the HPC 7-12 stage disk “Corrosion ADs” drive the inspection of HPC 7-through-12 stage disks per the engine manual Inspection 01 and Inspection 02 for the applicable disks. Inspection 01 specifies the accomplishment of Inspection 03
(FMPI)and Inspection 04 (Fretting Inspection). During the accomplishment of AD 2003-16-05, the disks are stripped, visually and FMPI inspected, re-identified, and replated with Nickel-Cadmium. These procedures are identical to the procedures listed in this proposed AD. We do not agree. AD 2002-23-14 is only more restrictive for low- and medium-utilization carriers. For high-utilization carriers and older engines, this AD is more restrictive, which is why we proposed this AD. The inspections in AD 2003-12-07 and AD 2003-16-05, are similar, but not identical, nor are their compliance times the same as this AD. We did not change the AD. Clarification of Definition In preparing the responses to the commenters requesting clarity, we found that our proposed definition of accessible in paragraph
(o)could be clearer, and should coincide with how the term is used in Tables 2 and 4. We did not change the meaning of the definition, but changed it from “(o) For the purposes of this AD accessibility of the HPC front hub is removing the hub from the engine and deblading that hub” to read “(q) For the purpose of this AD, “accessible” is defined as when the HPC front hub is removed from the engine and the hub is debladed.” It is now paragraph
(q)because we added prohibition paragraphs
(o)and
(p)to this AD. Conclusion We carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance About 1,573 JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17A, -17R, and -17AR turbofan engines, and 1,280 JT8D-200 series turbofan engines, installed on airplanes of U.S. registry will be affected by this AD. We estimate it will take about 12 work-hours per engine to perform the proposed actions, and the average labor rate is $65 per work-hour. We also estimate 175 of those engines will be removed before reaching scheduled maintenance, and will require an additional 60 work-hours to disassemble and reassemble each engine. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $2,907,840. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES . Include “AD Docket No. 2001-NE-30-AD” in your request. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by removing 39-12958 (67 FR 70686, November 26, 2002) and by adding a new airworthiness directive, Amendment 39-14728, to read as follows: **2006-17-07 Pratt & Whitney:** Amendment 39-14728. Docket No. 2001-NE-30-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective October 4, 2006. Affected ADs
(b)This AD supersedes AD 2002-23-14, Amendment 39-12958. Applicability
(c)This AD applies to the following Pratt & Whitney
(PW)JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17A, -17R, -17AR, -209, -217, -217A, -217C, and -219 turbofan engines, with 8th stage high pressure compressor
(HPC)front hubs: Table 1.—AD Applicability If the HPC front hub is coated with: And if the stage 8-9 spacer is coated with: And the HPC front hub: Then this AD is:
(1)PWA 110-21 at any time Any Operated in a JT8D-15, 15A, -17, -17R, or -17AR engine Applicable. See paragraph
(f)and Table 2 of this AD.
(2)PWA 110-21 at any time Any Operated in a JT8D-209, -217, -217A, -217C, or -219 engine Applicable. See paragraph
(h)and Table 4 of this AD.
(3)Nickel-Cadmium PWA 110-21 at any time Operated in a JT8D-209, -217, -217A, -217C, or -219 engine Applicable. See paragraph
(i)and Table 5 of this AD.
(4)Nickel-Cadmium PWA 110-21 at any time Operated in a JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17R, or -17AR engine Not applicable.
(5)PWA 110-21 at any time Any Operated in a JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, or -11, but never operated in a JT8D-15, -15A, -17, -17A, -17R, -17AR, -209, -217, -217A, -217C, or -219 engine Not applicable.
(6)Nickel-Cadmium Any type but PWA 110-21 Not applicable. These engines are installed on, but not limited to, Boeing DC-9, MD-80 series, 727 series, and 737 series airplanes. Unsafe Condition
(d)This AD results from an investigation by PW which concluded that any HPC front hub or HPC disk coated with PWA 110-21 that ever operated on JT8D-15, -15A, -17, -17A, -17R, -17AR, -209, -217, -217A, -217C, and -219 turbofan engines, could crack before reaching their published life limit. We are issuing this AD to prevent a rupture of an HPC front hub or an HPC disk that could result in an uncontained engine failure and damage to the airplane. Compliance
(e)You must accomplish the actions required by this AD within the compliance times specified, unless the actions have already been done. Any engine with an HPC front hub that has been inspected using AD 2002-23-14, AD 2003-12-07, or AD 2003-16-05, is considered in compliance with this AD. JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17A, -17R, and -17AR Turbofan Engines—Inspect or Replace HPC Front Hubs, HPC Disks, and Stage 8-9 Spacers
(f)For applicable JT8D-1, -1A, -1B, -7, -7A, -7B, -9, -9A, -11, -15, -15A, -17, -17A, -17R, and -17AR turbofan engines specified in Table 1 of this AD, do the following:
(1)Using the inspection schedule in Table 2 of this AD, strip the protective coating, visually inspect for fretting wear, fluorescent magnetic particle inspect
(FMPI)for cracks, reidentify, replate HPC front hubs and stage 8-9 spacers, and replace if necessary.
(2)Use paragraphs 1. through 3.B.(7)(b) under “For Rear Compressor Front Hubs that Have Operated With PWA 110-21 coating AT ANY TIME During Their Service Life in JT8D-15, -15A, -17, -17A, -17R, -17AR Engine Models.” of PW Alert Service Bulletin
(ASB)JT8D A6468, dated December 23, 2004. Table 2.—HPC Front Hub Inspection Schedule HPC front hub cycles-Since-New
(CSN)on the effective date of this AD Inspect before additional cycles-in-service
(CIS)or CSN, whichever occurs first Also inspect 7th stage HPC disks and 9th stage-through-12th stage HPC disks using:
(i)19,000 or more 500 CIS or 20,000 CSN Paragraph (f)(3) of this AD.
(ii)15,500 or more, but fewer than 19,000 1,000 CIS or 19,500 CSN Paragraph (f)(3) of this AD.
(iii)5,000 or more, but fewer than 15,500 16,500 CSN Paragraph (f)(3) of this AD.
(iv)Fewer than 5,000 that are accessible If the parts have been inspected and are acceptable, parts may be reinstalled. Inspect again using the criteria in
(iii)of this Table Paragraph (f)(3) of this AD.
(3)When the HPC front hub is inspected, visually inspect for fretting wear and FMPI for cracks on 7th stage HPC disks and 9th stage-through-12th stage HPC disks. Inspection information can be found in the applicable sections of JT8D Engine Manual Part Number (P/N) 481672, listed in the following Table 3: Table 3.—Seventh Stage HPC Disks and 9th Stage-Through-12th Stage HPC Disks Inspection Information Stage Chapter/section Visual inspection Fretting inspection FMPI 7 72-36-41 Inspection-01 Inspection-04 Inspection-03. 9 72-36-43 Inspection-01 Inspection-04 Inspection-03. 10 72-36-44 Inspection-01 Inspection-04 Inspection-03. 11 72-36-45 Inspection-01 Inspection-04 Inspection-03. 12 72-36-46 Inspection-01 Inspection-04 Inspection-03. JT8D-15, -15A, -17, -17A, -17R, and -17AR Turbofan Engines—Cycle Adjustment for HPC Front Hubs That Entered Service With Nickel-Cadmium Plating and PWA 110-21 Coating
(g)For JT8D-15, -15A, -17, -17A, -17R, and -17AR turbofan engines with front hubs that entered service with Nickel-Cadmium plating and PWA 110-21 coating, but have also operated during the life of the hub with PWA 110-21 coating:
(1)You are allowed to make a cycle adjustment if the hub was never operated with a PWA 110-21-coated stage 8-9 spacer.
(2)Use the information under “Compliance” of PW ASB JT8D A6468, dated December 23, 2004, to determine the adjustment. JT8D-209, -217, -217A, -217C, and -219 Turbofan Engines—Inspect or Replace HPC Front Hubs and Stage 8-9 Spacers
(h)For applicable JT8D-209, -217, -217A, -217C, and -219 turbofan engines specified in Table 1, Row
(1)of this AD, do the following:
(1)Using the inspection schedule in Table 4 of this AD, strip the protective coating, visually inspect for fretting wear, FMPI for cracking, reidentify, replate HPC front hubs and the stage 8-9 spacers, and replace if necessary.
(2)Use paragraphs 1. through 1.A. and paragraphs 2. through 2.C.(2)(g)2 of Accomplishment Instructions of PW ASB JT8D A6430, Revision 2, dated December 23, 2004. Table 4.—HPC Front Hub Inspection Schedule—Hubs Coated With PWA 110-21 HPC front hub CSN on the effective date of this AD Inspect before additional CIS or CSN, whichever occurs first Also inspect 7th stage HPC disks and 9th stage-through-12th stage HPC disks using:
(i)19,000 or more 500 CIS or 20,000 CSN Paragraph (h)(3) of this AD.
(ii)15,500 or more, but fewer than 19,000 1,000 CIS or 19,500 CSN Paragraph (h)(3) of this AD.
(iii)5,000 or more, but fewer than 15,500 16,500 CSN Paragraph (h)(3) of this AD.
(iv)Fewer than 5,000 that are accessible If the parts have been inspected and are acceptable, parts may be reinstalled. Inspect again using the criteria in
(iii)of this Table Paragraph (h)(3) of this AD.
(i)For applicable JT8D-209, -217, -217A, -217C, and -219 turbofan engines specified in Table 1, Row
(2)of this AD, do the following:
(1)Using the inspection schedule in Table 5 of this AD, strip the protective coating, visually inspect for fretting wear, FMPI for cracking, reidentify, replate HPC front hubs and the stage 8-9 spacers, and replace if necessary.
(2)Use paragraphs 1., 1.C, and 4. through 4.C.(2)(g)2 of Accomplishment Instructions of PW ASB JT8D A6430, Revision 2, dated December 23, 2004, for all applicable hubs with any type of coating. Table 5.—HPC Front Hub Inspection Schedule—Hubs Coated With Nickel-Cadmium HPC front hub CSN on the effective date of this AD Inspect before additional CIS or CSN, whichever occurs first Also inspect 7th stage HPC disks and 9th stage-through-12th stage HPC disks using:
(i)19,000 or more 500 CIS or 20,000 CSN Paragraph (h)(3) of this AD.
(ii)17,000 or more, but fewer than 19,000 1,000 CIS or 19,500 CSN Paragraph (h)(3) of this AD.
(iii)9,000 or more, but fewer than 17,000, that have not been inspected 18,000 CSN Paragraph (h)(3) of this AD.
(iv)9,000 or more, but fewer than 17,000, that were inspected before accumulating 9,000 CSN 15,500 CSN Paragraph (h)(3) of this AD.
(j)When the HPC front hub is inspected, visually inspect for fretting wear and FMPI for cracks on 7th stage HPC disks and 9th stage-through-12th stage HPC disks. Inspection information can be found in the applicable sections of JT8D-200 Engine Manual P/N 773128, listed in Table 3 of this AD. JT8D-209, -217, -217A, -217C, and -219 Turbofan Engines—Cycle Adjustment for HPC Front Hubs That Entered Service With Nickel-Cadmium Plating and PWA 110-21 Coating
(k)For JT8D-209, -217, -217A, -217C, and -219 turbofan engines with HPC front hubs that entered service with Nickel-Cadmium plating, but have also operated during the life of the hub with PWA 110-21 coating:
(1)You are allowed to make a cycle adjustment.
(2)Use the information under “CONDITION A” of PW ASB JT8D A6430, Revision 2, dated December 23, 2004, to determine the adjustment. Replacement of HPC Front Hubs and Stage 8-9 Spacers That Have Operated With PWA 110-21 Coating, As Optional Action—All Engines
(l)For all applicable engines, as an optional action for the visual inspections in this AD, replace HPC front hubs and stage 8-9 spacers that have operated with PWA 110-21 coating in the interface between the hub and the stage 8-9 spacer and HPC disks currently coated with PWA 110-21, as follows:
(1)Install a Nickel-Cadmium plated HPC front hub that has never operated with PWA 110-21 coating in the interface between the HPC front hub and the stage 8-9 spacer.
(2)Install a Nickel-Cadmium plated or Electroless Nickel-plated stage 8-9 spacer.
(3)Install HPC disks that have never operated with PWA 110-21 coating. Prohibition Against Recoating the HPC Front Hub, Stage 7 HPC Disk, and Stage 8-9 Spacer With PWA 110-21—All Engines
(m)Do not recoat the HPC front hub with PWA 110-21 (Repair-23 of Chapter/Section 72-36-42 of JT8D-200 Engine Manual, P/N 773128, and Repair-27 and Repair-28 of Chapter/Section 72-36-42 of JT8D Engine Manual, P/N 481672).
(n)Do not recoat the 7th stage disk with PWA 110-21 (Repair-15 of Chapter/Section 72-36-41 of JT8D-200 Engine Manual, P/N 773128, and Repair-15 of Chapter/Section 72-36-41 of JT8D Engine Manual, P/N 481672).
(o)Do not recoat the stage 8-9 spacer with PWA 110-21 (Repair-03, Task 72-36-12-30-003-002, of Chapter/Section 72-36-12 of JT8D-200 Engine Manual, P/N 773128, and Repair-01, Task 72-36-12-30-001-002, of Chapter/Section 72-36-12 of JT8D Engine Manual, P/N 481672). Prohibition Against Reinstalling HPC Front Hubs and Stage 8-9 Spacers Coated With PWA 110-21
(p)After the effective date of this AD, do not reinstall HPC front hubs and stage 8-9 spacers coated with PWA 110-21. Definition
(q)For the purpose of this AD, “accessible” is defined as when the HPC front hub is removed from the engine and the hub is debladed. Alternative Methods of Compliance
(r)The Manager, Engine Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Related Information
(s)None. Material Incorporated by Reference
(t)You must use the service information specified in Table 6 of this AD to perform the actions required by this AD. The Director of the Federal Register approved the incorporation by reference of the documents listed in Table 6 of this AD in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Pratt & Whitney, 400 Main St., East Hartford, CT 06108, telephone
(860)565-7700; fax
(860)565-1605 for a copy of this service information. You may review copies at the FAA, New England Region, Office of the Regional Counsel, 12 New England Executive Park, Burlington, MA; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Table 6.—Incorporation by Reference Pratt & Whitney Alert Service Bulletin No. Page Revision Date JT8D A6430, Total Pages: 35 ALL 2 December 23, 2004. JT8D A6468, Total Pages: 20 ALL Original December 23, 2004. Issued in Burlington, Massachusetts, on August 21, 2006. Francis A. Favara, Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E6-14238 Filed 8-29-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-24439; Directorate Identifier 2006-NM-039-AD; Amendment 39-14741; AD 2006-18-03] RIN 2120-AA64 Airworthiness Directives; Empresa Brasileira de Aeronautica S.A. (EMBRAER) Model EMB-145XR Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for certain EMBRAER Model EMB-145XR airplanes. This AD requires modification of the flap system interface wiring. This AD results from a finding that the aural and visual warnings, which should be activated when the flaps are set to 22 degrees during takeoff, were not enabled during the manufacture of certain Model EMB-145XR airplanes. We are issuing this AD to prevent overrunning the runway during takeoff. DATES: This AD becomes effective October 4, 2006. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of October 4, 2006. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street SW., Nassif Building, Room PL-401, Washington, DC. Contact Empresa Brasileira de Aeronautica S.A. (EMBRAER), P.O. Box 343—CEP 12.225, Sao Jose dos Campos—SP, Brazil, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Dan Rodina, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-2125; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(AD)docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to certain EMBRAER Model EMB-145XR airplanes. That NPRM was published in the **Federal Registe** r on April 13, 2006 (71 FR 19138). That NPRM proposed to require modification of the flap system interface wiring. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Support for NPRM The Air Line Pilots Association supports the NPRM. Request To Withdraw NPRM EMBRAER requests that we withdraw the NPRM. EMBRAER states that, according to section 39.5 of the Federal Aviation Regulations (14 CFR 39.5), an AD is issued when an unsafe condition exists in a product and is likely to exist or develop in other products of the same type design. However, EMBRAER asserts that the missing aural and visual takeoff warnings for flaps selected to 22 degrees do not cause an unsafe condition. EMBRAER states that its analysis has shown that erroneously selecting the flaps to 22 degrees would not affect the controllability, stall, or maneuver margins of Model EMB-145XR airplanes. Also, EMBRAER states that the approved airplane flight manual prohibits takeoff with flaps selected to 22 degrees. Its analysis has also shown that airplane performance would be an issue during climb only when associated with an engine shutdown. EMBRAER maintains that this combined failure is remote or extremely improbable and would lead to a catastrophic event only if limited by the climb gradient or an obstacle. EMBRAER states that the effect of this failure is similar to the inability to retract flaps. We do not agree to withdraw the NPRM, since we have determined that an unsafe condition does exist. An erroneous flap selection (set to 22 degrees instead of 18) in combination with engine failure during takeoff could result in an overrun of the runway. In its comment, EMBRAER considers only a combined failure (wrong flap configuration plus an engine failure). Such consideration is unacceptable since the human failure rate for a given operation depends on a large number of factors. No adequate models exist that will enable the failure rate of a given human, carrying out a given operation, to be accurately predicted. Furthermore, the Departamento de Aviação Civil (DAC), which is the airworthiness authority for Brazil, issued Brazilian airworthiness directive 2006-02-01, effective February 24, 2006, to address this same unsafe condition and ensure the continued airworthiness of these airplanes in Brazil. We have not revised this AD in this regard. Request To Require Additional Action ExpressJet Airlines and a private citizen both request that EMBRAER provide an engine indication and crew alerting system (EICAS) message, in addition to the aural and visual takeoff warnings proposed in the NPRM. To accomplish this request, ExpressJet Airlines proposes that EMBRAER revise Service Bulletin 145-31-0049 to provide procedures for updating the IC-600 configuration files. The commenter states that this change would allow the EICAS visual warning, “No Takeoff Config,” to be displayed. As justification, the commenter states that this change would provide indications consistent with other takeoff related warnings such as pitch trim settings. The private citizen specifically requests that the manufacturer provide an EICAS configuration file with the “FLAPS 22 AVAIL” parameter set to “UNAVAILABLE.” As justification, the commenter states if the modification is accomplished as proposed in the NPRM, the warnings associated with an attempted takeoff in a prohibited condition will be inconsistent. The commenter points out that if takeoff is attempted with the flaps set to 0 degrees or to 45 degrees, the flightcrew will receive an aural warning, a master warning light, and an EICAS message. The commenter asserts that the manufacturer cannot justify omission of the EICAS message, and that including an EICAS message would add less than 1 work hour to the proposed modification. We do not agree. We have determined that the addition of the aural and visual takeoff warnings is adequate for addressing the unsafe condition of this AD. We have not revised this AD in this regard. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD as proposed. Costs of Compliance This AD affects about 97 airplanes of U.S. registry. The actions required by this AD take about 5 work hours per airplane, at an average labor rate of $80 per work hour. Required parts cost about $60 per airplane. Based on these figures, the estimated cost of the AD for U.S. operators is $44,620, or $460 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **2006-18-03 Empresa Brasileira de Aeronautica S.A. (EMBRAER):** Amendment 39-14741. Docket No. FAA-2006-24439; Directorate Identifier 2006-NM-039-AD. Effective Date
(a)This AD becomes effective October 4, 2006. Affected ADs
(b)None. Applicability
(c)This AD applies to EMBRAER Model EMB-145XR airplanes, certificated in any category; as identified in EMBRAER Service Bulletin 145-27-0113, dated December 6, 2005. Unsafe Condition
(d)This AD results from a finding that the aural and visual warnings, which should be activated when the flaps are set to 22 degrees during takeoff, were not enabled during the manufacture of certain Model EMB-145XR airplanes. We are issuing this AD to prevent overrunning the runway during takeoff. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Modification
(f)Within 2,500 flight hours after the effective date of this AD, modify the flap system interface wiring, by accomplishing all of the actions specified in the Accomplishment Instructions of EMBRAER Service Bulletin 145-27-0113, dated December 6, 2005. Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, International Branch, ANM-116, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. Material Incorporated by Reference
(h)You must use EMBRAER Service Bulletin 145-27-0113, dated December 6, 2005, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the **Federal Register** approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Empresa Brasileira de Aeronautica S.A. (EMBRAER), P.O. Box 343—CEP 12.225, Sao Jose dos Campos—SP, Brazil, for a copy of this service information. You may review copies at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street SW., Room PL-401, Nassif Building, Washington, DC; on the Internet at *http://dms.dot.gov;* or at the National Archives and Records Administration (NARA). For information on the availability of this material at the NARA, call
(202)741-6030, or go to *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.* Issued in Renton, Washington, on August 17, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-14288 Filed 8-29-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-24368; Directorate Identifier 2005-NM-230-AD; Amendment 39-14740; AD 2006-18-02] RIN 2120-AA64 Airworthiness Directives; McDonnell Douglas Model DC-9-10, -20, -30, -40, and -50 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for all McDonnell Douglas Model DC-9-10, -20, -30, -40, and -50 series airplanes. This AD requires replacing the clamp bases for the fuel vent pipe with improved clamp bases. This AD results from reports that the foil wrapping on existing plastic clamp bases has migrated out of position, which compromises the bonding of the fuel vent lines to the airplane structure. We are issuing this AD to ensure that the fuel vent lines are properly bonded to the airplane structure. Improper bonding could prevent electrical energy from a lightning strike from dissipating to the airplane structure, and create an ignition source, which could result in a fuel tank explosion. DATES: This AD becomes effective October 4, 2006. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of October 4, 2006. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC. Contact Boeing Commercial Airplanes, Long Beach Division, 3855 Lakewood Boulevard, Long Beach, California 90846, Attention: Data and Service Management, Dept. C1-L5A (D800-0024), for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Serj Harutunian, Aerospace Engineer, Propulsion Branch, ANM-140L, FAA, Los Angeles Aircraft Certification Office, 3960 Paramount Boulevard, Lakewood, California 90712-4137; telephone
(562)627-5254; fax
(562)627-5210. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(AD)docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to all McDonnell Douglas Model DC-9-10, -20, -30, -40, and -50 series airplanes. That NPRM was published in the **Federal Register** on April 11, 2006 (71 FR 18249). That NPRM proposed to require replacing the clamp bases for the fuel vent pipe with improved clamp bases. New Relevant Service Information Since we issued the NPRM, Boeing has issued Service Bulletin DC9-28-211, Revision 1, dated June 21, 2006. (The NPRM referred to the original issue of that service bulletin, dated February 23, 2005, as the appropriate source of service information for the replacement of the clamp bases.) The instructions in Revision 1 are essentially the same as those in the original issue of the service bulletin. Among other things, Revision 1 of the service bulletin reduces the recommended compliance time from 10 years to 5 years, and revises the cost of parts. The NPRM specified a compliance time of 60 months, so no change to the compliance time in this AD is needed. We have, however, revised the Costs of Compliance section of this AD to reflect the increased parts cost. We have also added a new paragraph
(g)to give credit for actions accomplished before the effective date of this AD in accordance with the original issue of the service bulletin, and re-identified subsequent paragraphs accordingly. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Request To Extend Compliance Time The Air Transport Association, on behalf of its member Northwest Airlines (NWA), agrees with the intent of the NPRM. However, NWA notes that the proposed 60-month compliance time is significantly less than the 10-year compliance time recommended in the original issue of Boeing Service Bulletin DC9-28-211. NWA states that its current maintenance program necessitates gaining access to the outboard fuel tanks every 9 years. NWA notes that the 60-month compliance time would necessitate additional work hours and more out-of-service time. We infer that NWA is requesting that we extend the compliance time to agree with the original issue of the Boeing service bulletin. We do not agree that any change is necessary. In developing an appropriate compliance time for this AD, we considered not only the manufacturer's recommendation, but also the degree of urgency associated with the subject unsafe condition and the average utilization of the affected fleet. In light of all of these factors, we have determined that a 60-month compliance time represents an appropriate interval of time for affected airplanes to continue to operate without compromising safety. Further, we note that the 60-month compliance time is consistent with the recommended 5-year compliance time specified in Revision 1 of Boeing Service Bulletin DC9-28-211. We have not changed the AD in this regard. Request To Revise Costs of Compliance Boeing comments that the service bulletin estimates that it will take 8 work hours to do the actions therein, but the NPRM estimates 4 work hours are needed to do the proposed actions. We infer that Boeing is requesting that we revise the Costs of Compliance section to reflect the 8-work-hour estimate in the service bulletin. We do not agree. The cost information below describes only the direct costs of the specific actions required by this AD. The estimate of 4 work hours represents the time necessary to perform only the actions actually required by this AD. The cost analysis in AD rulemaking actions typically does not include incidental costs such as the time required to gain access and close up, time necessary for planning, or time necessitated by other administrative actions. We recognize that, in doing the actions required by an AD, operators may incur incidental costs in addition to the direct costs. Those incidental costs, which may vary significantly among operators, are almost impossible to calculate. We have not changed the AD in this regard. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance There are about 640 airplanes of the affected design in the worldwide fleet. This AD affects about 413 airplanes of U.S. registry. The required actions will take up to 4 work hours per airplane, at an average labor rate of $80 per work hour. Required parts will cost between $1,034 and $2,068 per airplane. Based on these figures, the estimated cost of this AD for U.S. operators is between $559,202 and $986,244, or $1,354 and $2,388 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **2006-18-02 McDonnell Douglas:** Amendment 39-14740. Docket No. FAA-2006-24368; Directorate Identifier 2005-NM-230-AD. Effective Date
(a)This AD becomes effective October 4, 2006. Affected ADs
(b)None. Applicability
(c)This AD applies to all McDonnell Douglas Model DC-9-11, DC-9-12, DC-9-13, DC-9-14, DC-9-15, DC-9-15F, DC-9-21, DC-9-31, DC-9-32, DC-9-32 (VC-9C), DC- 9-32F, DC-9-32F (C-9A, C-9B), DC-9-33F, DC-9-34, DC-9-34F, DC-9-41, and DC-9-51 airplanes, certificated in any category. Unsafe Condition
(d)This AD results from reports that the foil wrapping on existing plastic clamp bases has migrated out of position, which compromises the bonding of the fuel vent lines to the airplane structure. We are issuing this AD to ensure that the fuel vent lines are properly bonded to the airplane structure. Improper bonding could prevent electrical energy from a lightning strike from dissipating to the airplane structure, and create an ignition source, which could result in a fuel tank explosion. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Clamp Base Replacement
(f)Within 60 months after the effective date of this AD, replace the existing clamp bases for the fuel vent line with improved metal clamp bases, by doing all of the applicable actions in accordance with the Accomplishment Instructions of Boeing Service Bulletin DC9-28-211, Revision 1, dated June 21, 2006. Any corrective action that is required following the conductivity verification, which is included in the replacement procedures, must be done before further flight. Replacement Accomplished in Accordance With Previous Issue of Service Bulletin
(g)Replacement of clamp bases accomplished before the effective date of this AD in accordance with Boeing Service Bulletin DC9-28-211, dated February 23, 2005, is acceptable for compliance with the corresponding action required by paragraph
(f)of this AD. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, Los Angeles Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. Material Incorporated by Reference
(i)You must use Boeing Service Bulletin DC9-28-211, Revision 1, dated June 21, 2006, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Boeing Commercial Airplanes, Long Beach Division, 3855 Lakewood Boulevard, Long Beach, California 90846, Attention: Data and Service Management, Dept. C1-L5A (D800-0024), for a copy of this service information. You may review copies at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street SW., Room PL-401, Nassif Building, Washington, DC; on the Internet at *http://dms.dot.gov* ; or at the National Archives and Records Administration (NARA). For information on the availability of this material at the NARA, call
(202)741-6030, or go to *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* . Issued in Renton, Washington, on August 18, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-14289 Filed 8-29-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 95 [Docket No. 30510; Amdt. No. 463] IFR Altitudes; Miscellaneous Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This amendment adopts miscellaneous amendments to the required IFR (instrument flight rules) altitudes and changeover points for certain Federal airways, jet routes, or direct routes for which a minimum or maximum en route authorized IFR altitude is prescribed. This regulatory action is needed because of changes occurring in the National Airspace System. These changes are designed to provide for the safe and efficient use of the navigable airspace under instrument conditions in the affected areas. EFFECTIVE DATE: 0901 UTC, September 28, 2006. FOR FURTHER INFORMATION CONTACT: Donald P. Pate, Flight Procedure Standards Branch (AMCAFS-420), Flight Technologies and Programs Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125) telephone:
(405)954-4164. SUPPLEMENTARY INFORMATION: This amendment to part 95 of the Federal Aviation Regulations (14 CFR part 95) amends, suspends, or revokes IFR altitudes governing the operation of all aircraft in flight over a specified route or any portion of that route, as well as the changeover points
(COPs)for Federal airways, jet routes, or direct routes as prescribed in part 95. The Rule The specified IFR altitudes, when used in conjunction with the prescribed changeover points for those routes, ensure navigation aid coverage that is adequate for safe flight operations and free of frequency interference. The reasons and circumstances that create the need for this amendment involve matters of flight safety and operational efficiency in the National Airspace System, are related to published aeronautical charts that are essential to the user, and provide for the safe and efficient use of the navigable airspace. In addition, those various reasons or circumstances require making this amendment effective before the next scheduled charting and publication date of the flight information to assure its timely availability to the user. The effective date of this amendment reflects those considerations. In view of the close and immediate relationship between these regulatory changes and safety in air commerce, I find that notice and public procedure before adopting this amendment are impracticable and contrary to the public interest and that good cause exists for making the amendment effective in less than 30 days. Conclusion The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. List of Subjects in 14 CFR Part 95 Airspace, Navigation (air). Issued in Washington, DC on August 23, 2006. James J. Ballough, Director, Flight Standards Service. Adoption of the Amendment Accordingly, pursuant to the authority delegated to me by the Administrator, part 95 of the Federal Aviation Regulations (14 CFR part 95) is amended as follows effective at 0901 UTC, September 28, 2006. 1. The authority citation for part 95 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44719, 44721. 2. Part 95 is amended to read as follows: Revisions to IFR Altitudes and Changeover Points [Amendment 463 effective date, September 28, 2006] From To MEA MAA § 95.1001 Direct Routes—U.S. Atlantic Routes—AR3 Is amended to read in part: Carps, FL FIX Perie, OA FIX 2500 45000 Oldey, SC FIX Panal, OA FIX 2500 45000 Panal, OA FIX Carolina Beach, NC NDB 2500 45000 Atlantic Routes—AR4 Is amended to read in part: Ashly, SC NDB Metta, SC FIX 9000 § 95.6001 Victor Routes—U.S. § 95.6027 VOR Federal Airway V27 Is amended to read in part: *EUGEN, CA FIX **TAILS, CA FIX ***6000 *7000-MRA **7000-MRA ***3000-MOCA § 95.6452 VOR Federal Airway V452 Is amended to read in part: Bachs, CA FIX Halle, NV FIX *14000 *10200-MOCA Halle, NV FIX Mustang, NV VORTAC *11000 *9500-MOCA § 95.6593 Alaska VOR Federal Airway V431 Is amended to delete: Sisters Island, AK VORTAC *Lyric, AK FIX **8000 *8000-MRA **5800-MOCA **5800-GPS MEA *Lyric, AK FIX Biorka Island, AK VORTAC 5000 *8000-MRA § 95.6593 Alaska VOR Federal Airway V593 Is added to read: Sisters Island, AK VORTAC *Lyric, AK FIX **8000 *8000-MRA **5800-MOCA **5800-GPS MEA *Lyric, AK FIX Biorka Island, AK VORTAC 5000 *8000-MRA [FR Doc. E6-14446 Filed 8-29-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9282] RIN 1545-BE74 Dividends Paid Deduction for Stock Held in Employee Stock Ownership Plan AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. SUMMARY: This document contains final regulations under sections 162(k) and 404(k) of the Internal Revenue Code
(Code)providing that a payment in redemption of employer securities held by an employee stock ownership plan
(ESOP)is not deductible. These regulations generally affect administrators of, employers maintaining, participants in, and beneficiaries of ESOPs. In addition, they will affect corporations that make distributions in redemption of stock held in an ESOP. DATES: *Effective Date:* These regulations are effective on August 30, 2006. *Applicability Dates:* These regulations apply with respect to payments to reacquire stock that are made on or after and amounts paid or incurred on or after August 30, 2006. See §§ 1.162(k)-1(c) and 1.404(k)-3, Q&A-2. FOR FURTHER INFORMATION CONTACT: John T. Ricotta at
(202)622-6060 with respect to section 404(k) or Jennifer D. Sledge at
(202)622-7750 with respect to section 162(k) (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background This document contains final regulations (26 CFR part 1) under sections 162(k) and 404(k) of the Code. Section 162(k)(1) generally provides that no deduction otherwise allowable under chapter 1 of the Code is allowed for any amount paid or incurred by a corporation in connection with the reacquisition of its stock or the stock of any related person (as defined in section 465(b)(3)(C)). The legislative history of section 162(k) states that the phrase “in connection with” is “intended to be construed broadly.” H.R. Conf. Rep. No. 99-841, at 168 (1986). Section 404(k)(1) provides a deduction for an applicable dividend paid in cash by a C corporation with respect to applicable employer securities held by an ESOP, as defined in section 4975(e)(7). Section 404(k)(2) generally provides that the term *applicable dividend* means any dividend which, in accordance with the plan provisions, is either paid in cash to plan participants or beneficiaries or paid to the plan and distributed in cash to participants or beneficiaries not later than 90 days after the close of the plan year in which paid. An applicable dividend also includes a dividend which, at the election of participants or their beneficiaries, is payable as provided in the preceding sentence or paid to the plan and reinvested in qualifying employer securities. Finally, an applicable dividend also includes a dividend that is used to make payments on a loan described in section 404(a)(9), the proceeds of which were used to acquire the employer securities (whether or not allocated to participants) with respect to which the dividend is paid. Under section 404(k)(4), the deduction is allowable in the taxable year of the corporation in which the dividend is paid or distributed to the participant or beneficiary. Prior to 2002, section 404(k)(5)(A) provided that the Secretary may disallow the deduction under section 404(k) for any dividend if the Secretary determines that such dividend constitutes, in substance, an evasion of taxation. Section 662(b) of the Economic Growth and Tax Relief Reconciliation Act of 2001 (115 Stat. 38, 2001) amended section 404(k)(5)(A) to provide that the Secretary may disallow a deduction under section 404(k) for any dividend the Secretary determines constitutes, in substance, an avoidance or evasion of taxation. Rev. Rul. 2001-6 (2001-1 CB 491) (see § 601.601(d)(2) of this chapter), states that distributions to participants of amounts paid by an employer to reacquire shares of its stock from the employer's ESOP (redemption proceeds) are made in connection with the reacquisition of the employer's stock and that section 162(k)(1) therefore bars the deduction under these circumstances regardless of whether the distributions to participants would otherwise be deductible under section 404(k). The revenue ruling also states that the treatment of redemption proceeds as “applicable dividends” under section 404(k) would produce such anomalous results that the section cannot reasonably be construed as encompassing such payments. The revenue ruling states that the application of section 404(k) to redemption proceeds not only would allow employers to claim deductions for payments that do not represent true economic costs, but also, as further explained below, would vitiate important rights and protections for recipients of ESOP distributions. Finally, the ruling states that a deduction would be disallowed under section 404(k)(5)(A) because a deduction under these circumstances would constitute, in substance, an evasion of taxation. These positions were reiterated in Notice 2002-2, Q&A-11 (2002-2 CB 285) (See § 601.601(d)(2) of this chapter), which states that, in accordance with Rev. Rul. 2001-6, payments in redemption of stock held by an ESOP that are used to make distributions to terminating ESOP participants constitute an evasion of taxation under section 404(k)(5)(A) and are not applicable dividends under section 404(k)(1). Moreover, the notice states that any deduction for such payments in redemption of stock is barred under section 162(k). Notice 2002-2 (Q&A-7) also discusses the tax treatment of section 404(k) dividend distributions, stating that dividends paid in cash to a participant (rather than reinvested at the option of the participant under section 404(k)(2)(A)(iii)) are taxable without regard to the return of basis provisions under section 72, and are not subject to the consent requirements of section 411(a)(11) or the distribution restrictions of section 401(k)(2)(B). In addition, the Notice provides that dividends paid to participants under section 404(k) are not eligible rollover distributions under section 402(c), even if the dividends are distributed at the same time as amounts that do constitute an eligible rollover distribution (or are reported on Form 1099-R (Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.) in accordance with Announcement 85-168). 1 See also § 1.402(c)-2, Q&A-4(e), under which dividends paid on employer securities under section 404(k) are not eligible rollover distributions under section 402(c). 1 Announcement 85-168 (1985-48 IRB 40) states that section 404(k) distributions are reportable as dividends on a recipient's tax return and that such distributions are fully taxable without regard to return of basis. In *Boise Cascade Corporation* v. *United States* , 329 F.3d 751 (9th Cir. 2003), the Court of Appeals for the Ninth Circuit held that payments made by the issuer of stock to redeem its stock held by its ESOP were deductible as dividends paid under section 404(k), and that the deduction was not precluded by section 162(k). The IRS issued Chief Counsel Notice 2004-038 (October 1, 2004) (available at *http://www.irs.gov/foia* through the *electronic reading room* ) to indicate that it disagreed with the Court's interpretation and would continue to assert in any matter in controversy outside the Ninth Circuit that sections 162(k) and 404(k) disallow a deduction for payments to reacquire employer securities held by an ESOP. For any matter in controversy within the Ninth Circuit, agents or district counsel attorneys are to consult the National Office. A notice of proposed rulemaking containing proposed regulations under sections 162(k) and 404(k) was issued on August 25, 2005 (70 FR 49897) to address two issues:
(1)Which corporation is entitled to the deduction for applicable dividends under section 404(k) where the payor and employer are different entities; and
(2)whether a payment in redemption of employer securities held by an ESOP is deductible. The issue in the proposed regulations concerning which corporation is entitled to the deduction for applicable dividends under section 404(k) is expected to be addressed in future regulations. The notice of proposed rulemaking included proposed regulations under section 404(k) that would provide that payments made to reacquire stock held by an ESOP are not deductible under section 404(k) because such payments would not constitute applicable dividends under section 404(k)(2) and a deduction for such payments would constitute, in substance, an avoidance or evasion of taxation within the meaning of section 404(k)(5) because it would allow a corporation to claim two deductions for the same economic cost. It also included proposed regulations under section 162(k) providing that section 162(k), subject to certain exceptions, would disallow any deduction for amounts paid or incurred by a corporation in connection with the reacquisition of its stock or the stock of any related person (as defined in section 465(b)(3)(C)). Finally, the proposed regulations provided that amounts paid or incurred in connection with the reacquisition of stock include amounts paid by a corporation to reacquire its stock from an ESOP that are then distributed by the ESOP to its participants (or their beneficiaries) or otherwise used in a manner described in section 404(k)(2)(A). A public hearing on the proposed regulations was held on January 18, 2006. After consideration of the comments received, these final regulations adopt without material change the provisions of the proposed regulations concerning payments in redemption of employer securities held by an ESOP. Explanation of Provisions With respect to the treatment of payments in redemption of employer securities, these final regulations adopt the rule of the proposed regulations under which payments made to reacquire stock held by an ESOP are not deductible under section 404(k) because such payments do not constitute applicable dividends under section 404(k)(2) and a deduction for such payments would constitute, in substance, an avoidance or evasion of taxation within the meaning of section 404(k)(5). These final regulations also adopt the rule of the proposed regulations that explicitly provides that section 162(k) disallows any deduction, including any deduction under section 404(k), for amounts paid or incurred by a corporation in connection with the reacquisition of its stock or the stock of any related person (as defined in section 465(b)(3)(C)). In addition, these final regulations adopt the rule of the proposed regulations providing that amounts paid or incurred in connection with the reacquisition of stock include amounts paid by a corporation to reacquire its stock from an ESOP that are then distributed by the ESOP to its participants (or their beneficiaries) or otherwise used in a manner described in section 404(k)(2)(A). These provisions aroused little opposition and only two comments were received regarding the treatment of payments made to reacquire stock. A trade association representing companies that sponsor ESOPs supported the position of the proposed regulations that a repurchase of shares of ESOP stock from ESOP participants in a stock redemption does not qualify as a deductible dividend under section 404(k). The other commentator disagreed with the position in the proposed regulations, arguing that redemptions of stock held by an ESOP that are recharacterized as dividends under section 302 nevertheless are proper dividends that should be treated the same as ordinary dividends paid with respect to stock held by an ESOP. The commentator argued that, by enacting section 404(k), Congress intended to allow a double deduction for contributions to purchase employer stock because the value of stock purchased with employer contributions includes the present value of expected future dividends. Thus, the commentator argued, a deduction for redemptive proceeds should not be characterized as an avoidance or evasion of taxation within the meaning of section 404(k)(5). Finally, the commentator argued that, because the legislative history to section 162(k) does not specifically refer to section 404(k) dividends and section 162 was enacted only two years after section 404(k), section 162(k) does not preclude a deduction for a redemptive dividend under section 404(k). These arguments are unpersuasive. Although the present value of expected future dividends is an element of the value of shares of stock at any point in time, and Congress did authorize a current deduction for the value of stock contributions to qualified plans, as well as a later deduction for certain dividends paid on those shares under section 404(k), these deductions are carefully limited to dividends actually paid in certain specified ways while the stock is held by the ESOP. There is no evidence that Congress intended to authorize yet another deduction for the full value of the shares upon their redemption. To allow a deduction for redemption proceeds would be to allow a second deduction that includes the present value of dividends that are paid out after the date of distribution from the ESOP, contrary to the intent of the statute. Moreover, the amount of the deduction with respect to a redemption could be many times the amount that would be deducted for that year for a conventional dividend. (In fact, permitting a second deduction for the full value of the shares would allow a corporation to claim one deduction for a share of stock contributed to an ESOP and allocated to an employee early in a tax year and another deduction if the share is redeemed to make a distribution to the employee later in the same tax year.) There is a no indication that such a result was intended and there is no obvious purpose that would be served by such a result. Congress recognized that an arrangement that might be argued to come within the literal language of section 404(k) might nevertheless be inconsistent with its purpose. Congress therefore granted authority to the Secretary, in section 404(k)(5)(A), to disallow a deduction for any dividend that the Secretary finds to be, in substance, an evasion of taxation. The statute was clarified, for years beginning in 2002, to explicitly broaden that authority to permit the Service to disallow any deduction that is an avoidance or evasion of taxation. A deduction for redemption proceeds is both excessive in amount and inconsistent with the purpose of section 404(k), so that this is clearly an appropriate case for the authority under section 404(k)(5)(A) to be exercised. 2 2 Given the special rules of section 409(h) which generally entitle participants to receive cash for employer securities that are not publicly traded, if Congress had so intended, it would likely have identified the interaction of these provisions in light of the potentially large additional deductions such a rule would permit. Cf., *Charles Ilfeld Co.* v. *Hernandez* , 292 U.S. 62 (1934). The IRS and Treasury Department also continue to believe, as provided in Rev. Rul. 2001-6, that a deduction for redemption of benefit distributions is appropriately disallowed under section 404(k)(5)(A) because a deduction under these circumstances would constitute, in substance, an evasion of taxation. As stated in Rev. Rul. 2001-6, the treatment of redemption proceeds as “applicable dividends” under section 404(k) would produce such anomalous results that the section cannot reasonably be construed as encompassing such payments. As one example, if a redemption of a benefit distribution were an applicable dividend under section 404(k), there would be no reason why such a redemption could only occur once with respect to a participant, so that multiple redemptions (or theoretically even an unlimited number of redemptions) 3 might be possible, a result that is clearly not consistent with the intent of section 404(k). 3 For example, a plan participant might elect to have his or her account balance redeemed to the extent invested in employer securities, and then promptly have the cash reinvested in employer securities, and then could immediately repeat this redemption/reinvestment process with no theoretical limit. Further, as described in Rev. Rul. 2001-6, the application of section 404(k) to redemption amounts also would vitiate important rights and protections for recipients of ESOP distributions. These important rights and protections include the right to apply the return of basis provisions under section 72 (whereas an applicable dividend under section 404(k) is includible in gross income without regard to return of basis under section 72), and the protection against involuntary cash-outs (section 411(a)(11)). See section 72(e)(5)(D), and Q&A-7 of Notice 2002-2, 2002-1 CB 285. Similarly, if redemption amounts distributed as a normal benefit distribution were treated as an applicable dividend under section 404(k), then a participant would not have the right to elect a direct or indirect rollover with respect to redemption proceeds that are distributed from the ESOP, and any notice provided to the employee as required by section 402(f) would have to identify the loss of this valuable right to the participant. See § 1.402(c)-2, Q&A-4(e). Congress also provided for other special treatment for applicable dividends under section 404(k) that would be inconsistent with redemption of a normal benefit distribution being treated as an applicable dividend under section 404(k). Section 72(t)(2)(A)(vi) provides for an exception to the 10 percent additional income tax for early distributions for dividends paid with respect to stock of a corporation which are described in section 404(k). Further, section 404(k)(5)(B) provides that a plan will not violate the requirements of sections 401, 409, or 4975(e)(7) or be engaging in a prohibited transaction merely by reason of distributing an applicable dividend under section 404(k). Thus, for example, a distribution of an applicable dividend under section 404(k) is not subject to the prohibition against in-service distributions of amounts attributable to elective deferrals under section 401(k)(2). Clearly, these broad exceptions under section 72(t)(2)(A)(vi) and 404(k)(5)(B) were not intended to apply to normal benefit distributions from ESOPs, essentially at the election of the employer or distributee. Finally, even if the IRS declined to exercise its authority under section 404(k)(5)(A), the plain language of section 162(k) precludes the deduction for payments by a corporation to redeem its stock including deductions otherwise allowed under section 404(k). As described under the *Background* section of this preamble, section 162(k) provides that “no deduction otherwise allowable shall be allowed *under this chapter* for any amount paid or incurred by a corporation in connection with the reacquisition of its stock” (emphasis added) and section 404(k) is in the same chapter as section 162(k). The commentator's attempt to avoid the effect of the plain language of the statute by reference to a supposed negative inference in the legislative history is unavailing. Accordingly, these regulations adopt the rule in the proposed regulations without material change. Effective Date Section 1.162(k)-1 applies with respect to amounts paid or incurred on or after August 30, 2006. Section 1.404(k)-3 applies with respect to payments to reacquire stock that are made on or after August 30, 2006. Rev. Rul. 2001-6 remains in effect for all periods, including periods before the effective date of this regulation. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and 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, the proposed regulations preceding these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Drafting Information The principal authors of these regulations are John T. Ricotta, Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities) and Jennifer D. Sledge, Office of Associate Chief Counsel (Corporate). However, other personnel from the IRS and the Treasury Department participated in the development of these regulations. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 is amended by adding entries in numerical order to read as follows: Authority: 26 U.S.C. 7805 * * * Section 1.162(k)-1 is also issued under section 26 U.S.C. 162(k). * * * Section 1.404(k)-3 is also issued under sections 26 U.S.C. 162(k) and 404(k)(5)(A). * * * **Par. 2.** Section 1.162(k)-1 is added to read as follows: § 1.162(k)-1 Disallowance of deduction for reacquisition payments.
(a)*In general.* Except as provided in paragraph
(b)of this section, no deduction otherwise allowable is allowed under Chapter 1 of the Internal Revenue Code for any amount paid or incurred by a corporation in connection with the reacquisition of its stock or the stock of any related person (as defined in section 465(b)(3)(C)). Amounts paid or incurred in connection with the reacquisition of stock include amounts paid by a corporation to reacquire its stock from an ESOP that are used in a manner described in section 404(k)(2)(A). See § 1.404(k)-3.
(b)*Exceptions.* Paragraph
(a)of this section does not apply to any—
(1)Deduction allowable under section 163 (relating to interest);
(2)Deduction for amounts that are properly allocable to indebtedness and amortized over the term of such indebtedness;
(3)Deduction for dividends paid (within the meaning of section 561); or
(4)Amount paid or incurred in connection with the redemption of any stock in a regulated investment company that issues only stock which is redeemable upon the demand of the shareholder.
(c)*Effective date.* This section applies with respect to amounts paid or incurred on or after August 30, 2006. **Par. 3.** Section 1.404(k)-3 is added to read as follows: § 1.404(k)-3 Disallowance of deduction for reacquisition payments. Q-1: Are payments to reacquire stock held by an ESOP applicable dividends that are deductible under section 404(k)(1)? A-1:
(a)Payments to reacquire stock held by an ESOP, including reacquisition payments that are used to make benefit distributions to participants or beneficiaries, are not deductible under section 404(k) because—
(1)Those payments do not constitute applicable dividends under section 404(k)(2); and
(2)The treatment of those payments as applicable dividends would constitute, in substance, an avoidance or evasion of taxation within the meaning of section 404(k)(5).
(b)See also § 1.162(k)-1 concerning the disallowance of deductions for amounts paid or incurred by a corporation in connection with the reacquisition of its stock from an ESOP. Q-2: What is the effective date of this section? A-2: This section applies with respect to payments to reacquire stock that are made on or after August 30, 2006. Approved: August 22, 2006. Mark E. Matthews, Deputy Commissioner for Services and Enforcement. Eric Solomon, Acting Deputy Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E6-14420 Filed 8-29-06; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF DEFENSE Office of the Secretary 32 CFR Part 154 [DoD-2006-OS-0038] Department of Defense Personnel Security Program Regulation AGENCY: Office of the Secretary, DoD. ACTION: Interim final rule. SUMMARY: This rule is published to streamline personnel security clearance procedures and make the process more efficient within the Department of Defense. This will simplify security processing and allow the deserving public to obtain a security clearance in a more efficient manner. DATES: This rule is effective September 1, 2006. Written comments received at the address indicated below by October 30, 2006 will be accepted. ADDRESSES: You may submit comments, identified by docket number and or RIN number and title, by any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the instructions for submitting comments. • Mail: Federal Docket Management System Office, 1160 Defense Pentagon, Washington, DC 20301-1160. *Instructions:* All submissions received must include the agency name and docket number or Regulatory Information Number
(RIN)for this **Federal Register** document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the Internet at *http://regulations.gov* as they are received without change, including any personal identifiers or contact information. FOR FURTHER INFORMATION CONTACT: Charleen Wright, 703-697-3039. SUPPLEMENTARY INFORMATION: This rule is published as an interim rule because it takes effect on September 1 under the authority of National Security Adviser directing immediate implementation. Executive Order 12866, “Regulatory Planning and Review” It has been determined that 32 CFR part 154 is not a significant regulatory action. The rule does not:
(1)Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy; a section 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 this Executive Order. Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4) It has been certified that this rule does not contain a Federal mandate that may result in the expenditure by State, local and tribal governments, in aggregate, or by the private sector, of $100 million or more in any one year. Public Law 96-354, “Regulatory Flexibility Act” (5 U.S.C. 601) It has been certified that this rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, have a significant economic impact on a substantial number of small entities. This part will streamline personnel security clearance procedures and make the process more efficient. Public Law 96-511, “Paperwork Reduction Act” (44 U.S.C. Chapter 35) It has been certified that this rule does impose reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995. The reporting and recordkeeping requirements have been submitted to OMB for review. Executive Order 13132, “Federalism” It has been certified that this rule does not have federalism implications, as set forth in Executive Order 13132. This rule does not have substantial direct effects on:
(1)The States;
(2)The relationship between the National Government and the States; or
(3)The distribution of power and responsibilities among the various levels of Government. List of Subjects in 32 CFR Part 154 Classified information; Government employees; Investigations; Security measures. Accordingly, 32 CFR part 154 is amended as follows: PART 154—DEPARTMENT OF DEFENSE PERSONNEL SECURITY PROGRAM REGULATION 1. The authority citation for 32 CFR part 154 continues to read as follows: Authority: E.O. 10450, 18 FR 2489, 3 CFR, 1949-1953 Comp., p. 936; E.O. 12356, 47 FR 14874 and 15557, 3 CFR, 1982 Comp., p. 166; E.O. 10865, 25 FR 1583, 3 CFR, 1959-1963 Comp., p. 398; E.O. 12333, 46 FR 59941, 3 CFR, 1981 Comp., p. 200 2. Appendix H to part 154 is revised to read as follows: Appendix H to Part 154—Adjudicative Guidelines for Determining Eligibility for Access to Classified Information 1. *Introduction.* The following adjudicative guidelines are established for all U.S. Government civilian and military personnel, consultants, contractors, employees of contractors, licensees, certificate holders or grantees and their employees, and other individuals who require access to classified information. They apply to persons being considered for initial or continued eligibility for access to classified information, to include sensitive compartmented information and special access programs, and are to be used by government departments and agencies in all final clearance determinations. Government departments and agencies may also choose to apply these guidelines to analogous situations regarding persons being considered for access to other types of protected information. Decisions regarding eligibility for access to classified information take into account factors that could cause a conflict of interest and place a person in the position of having to choose between his or her commitments to the United States, including the commitment to protect classified information, and any other compelling loyalty. Accesses decisions also take into account a person's reliability, trustworthiness and ability to protect classified information. No coercive policing could replace the self-discipline and integrity of the person entrusted with the nation's secrets as the most effective means of protecting them. When a person's life history shows evidence of unreliability or untrustworthiness, questions arise whether the person can be relied on and trusted to exercise the responsibility necessary for working in a secure environment where protecting classified information is paramount. 2. *The adjudicative process.*
(a)The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicated upon the individual meeting these personnel security guidelines. The adjudication process is the careful weighing of a number of variables known as the whole-person concept. Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination. In evaluating the relevance of an individual's conduct, the adjudicator should consider the following factors:
(1)The nature, extent, and seriousness of the conduct;
(2)The circumstances surrounding the conduct, to include knowledgeable participation;
(3)The frequency and recency of the conduct;
(4)The individual's age and maturity at the time of the conduct;
(5)The extent to which participation is voluntary;
(6)The presence or absence of rehabilitation and other permanent behavioral changes;
(7)The motivation for the conduct;
(8)The potential for pressure, coercion, exploitation, or duress; and
(9)The likelihood of continuation or recurrence;
(b)Each case must be judged on its own merits, and final determination remains the responsibility of the specific department or agency. Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.
(c)The ability to develop specific thresholds for action under these guidelines is limited by the nature and complexity of human behavior. The ultimate determination of whether the granting or continuing of eligibility for a security clearance is clearly consistent with the interests of national security must be an overall common sense judgment based upon careful consideration of the following guidelines, each of which is to be evaluated in the context of the whole person.
(1)GUIDELINE A: Allegiance to the United States;
(2)GUIDELINE B: Foreign Influence;
(3)GUIDELINE C: Foreign Preference;
(4)GUIDELINE D: Sexual Behavior;
(5)GUIDELINE E: Personal Conduct;
(6)GUIDELINE F: Financial Considerations;
(7)GUIDELINE G: Alcohol Consumption;
(8)GUIDELINE H: Drug Involvement;
(9)GUIDELINE I: Psychological Conditions;
(10)GUIDELINE J: Criminal Conduct;
(11)GUIDELINE K: Handling Protected Information;
(12)GUIDELINE L: Outside Activities;
(13)GUIDELINE M: Use of Information Technology Systems
(d)Although adverse information concerning a single criterion may not be sufficient for an unfavorable determination, the individual may be disqualified if available information reflects a recent or recurring pattern of questionable judgment, irresponsibility, or emotionally unstable behavior. Notwithstanding the whole-person concept, pursuit of further investigation may be terminated by an appropriate adjudicative agency in the face of reliable, significant, disqualifying, adverse information.
(e)When information of security concern becomes known about an individual who is currently eligible for access to classified information, the adjudicator should consider whether the person:
(1)Voluntarily reported the information;
(2)Was truthful and complete in responding to questions;
(3)Sought assistance and followed professional guidance, where appropriate;
(4)Resolved or appears likely to favorably resolve the security concern;
(5)Has demonstrated positive changes in behavior and employment;
(6)Should have his or her access temporarily suspended pending final adjudication of the information.
(f)If after evaluating information of security concern, the adjudicator decides that the information is not serious enough to warrant a recommendation of disapproval or revocation of the security clearance, it may be appropriate to recommend approval with a warning that future incidents of a similar nature may result in revocation of access. Guideline A: Allegiance To The United States 3. *The concern.* An individual must be of unquestioned allegiance to the United States. The willingness to safeguard classified information is in doubt if there is any reason to suspect an individual's allegiance to the United States. 4. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Involvement in, support of, training to commit, or advocacy of any act of sabotage, espionage, treason, terrorism, or sedition against the United States of America;
(b)Association or sympathy with persons who are attempting to commit, or who are committing, any of the above acts;
(c)Association or sympathy with persons or organizations that advocate, threaten, or use force or violence, or use any other illegal or unconstitutional means, in an effort to:
(1)Overthrow or influence the government of the United States or any state or local government;
(2)Prevent Federal, state, or local government personnel from performing their official duties;
(3)Gain retribution for perceived wrongs caused by the Federal, state, or local government;
(4)Prevent others from exercising their rights under the Constitution or laws of the United States or of any state. 5. *Conditions that could mitigate security concerns include:*
(a)The individual was unaware of the unlawful aims of the individual or organization and severed ties upon learning of these;
(b)The individual's involvement was only with the lawful or humanitarian aspects of such an organization;
(c)Involvement in the above activities occurred for only a short period of time and was attributable to curiosity or academic interest;
(d)The involvement or association with such activities occurred under such unusual circumstances, or so much time has elapsed, that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or loyalty. Guideline B: Foreign Influence 6. *The concern.* Foreign contacts and interests may be a security concern if the individual has divided loyalties or foreign financial interests, may be manipulated or induced to help a foreign person, group, organization, or government in a way that is not in U.S. interests, or is vulnerable to pressure or coercion by any foreign interest. Adjudication under this Guideline can and should consider the identity of the foreign country in which the foreign contact or financial interest is located, including, but not limited to, such considerations as whether the foreign country is known to target United States citizens to obtain protected information and/or is associated with a risk of terrorism. 7. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Contact with a foreign family member, business or professional associate, friend, or other person who is a citizen of or resident in a foreign country if that contact creates a heightened risk of foreign exploitation, inducement, manipulation, pressure, or coercion;
(b)Connections to a foreign person, group, government, or country that create a potential conflict of interest between the individual's obligation to protect sensitive information or technology and the individual's desire to help a foreign person, group, or country by providing that information;
(c)Counterintelligence information, that may be classified, indicates that the individual's access to protected information may involve unacceptable risk to national security;
(d)Sharing living quarters with a person or persons, regardless of citizenship status, if that relationship creates a heightened risk of foreign inducement, manipulation, pressure, or coercion;
(e)A substantial business, financial, or property interest in a foreign country, or in any foreign-owned or foreign-operated business, which could subject the individual to heightened risk of foreign influence or exploitation;
(f)Failure to report, when required, association with a foreign national;
(g)Unauthorized association with a suspected or known agent, associate, or employee of a foreign intelligence service;
(h)Indications that representatives or nationals from a foreign country are acting to increase the vulnerability of the individual to possible future exploitation, inducement, manipulation, pressure, or coercion;
(i)Conduct, especially while traveling outside the U.S., which may make the individual vulnerable to exploitation, pressure, or coercion by a foreign person, group, government, or country. 8. *Conditions that could mitigate security concerns include:*
(a)The nature of the relationships with foreign persons, the country in which these persons are located, or the positions or activities of those persons in that country are such that it is unlikely the individual will be placed in a position of having to choose between the interests of a foreign individual, group, organization, or government and the interests of the U.S.;
(b)There is no conflict of interest, either because the individual's sense of loyalty or obligation to the foreign person, group, government, or country is so minimal, or the individual has such deep and longstanding relationships and loyalties in the U.S., that the individual can be expected to resolve any conflict of interest in favor of the U.S. interest;
(c)Contact or communication with foreign citizens is so casual and infrequent that there is little likelihood that it could create a risk for foreign influence or exploitation;
(d)The foreign contacts and activities are on U.S. Government business or are approved by the cognizant security authority;
(e)The individual has promptly complied with existing agency requirements regarding the reporting of contacts, requests, or threats from persons, groups, or organizations from a foreign country;
(f)The value or routine nature of the foreign business, financial, or property interests is such that they are unlikely to result in a conflict and could not be used effectively to influence, manipulate, or pressure the individual. Guideline C: Foreign Preference 9. *The concern.* When an individual acts in such a way as to indicate a preference for a foreign country over the United States, then he or she may be prone to provide information or make decisions that are harmful to the interests of the United States. 10. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Exercise of any right, privilege or obligation of foreign citizenship after becoming a U.S. citizen or through the foreign citizenship of a family member. This includes but is not limited to:
(1)Possession of a current foreign passport;
(2)Military service or a willingness to bear arms for a foreign country;
(3)Accepting educational, medical, retirement, social welfare, or other such benefits from a foreign country;
(4)Residence in a foreign country to meet citizenship requirements;
(5)Using foreign citizenship to protect financial or business interests in another country;
(6)Seeking or holding political office in a foreign country;
(7)Voting in a foreign election;
(b)Action to acquire or obtain recognition of a foreign citizenship by an American citizen;
(c)Performing or attempting to perform duties, or otherwise acting, so as to serve the interests of a foreign person, group, organization, or government in conflict with the national security interest;
(d)Any statement or action that shows allegiance to a country other than the United States: for example, declaration of intent to renounce United States citizenship; renunciation of United States citizenship. 11. *Conditions that could mitigate security concerns include:*
(a)Dual citizenship is based solely on parents' citizenship or birth in a foreign country;
(b)The individual has expressed a willingness to renounce dual citizenship;
(c)Exercise of the rights, privileges, or obligations of foreign citizenship occurred before the individual became a U.S. citizen or when the individual was a minor;
(d)Use of a foreign passport is approved by the cognizant security authority.
(e)The passport has been destroyed, surrendered to the cognizant security authority, or otherwise invalidated;
(f)The vote in a foreign election was encouraged by the United States Government. Guideline D: Sexual Behavior 12. *The concern.* Sexual behavior that involves a criminal offense indicates a personality or emotional disorder, reflects lack of judgment or discretion, or which may subject the individual to undue influence or coercion, exploitation, or duress can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. No adverse inference concerning the standards in this Guideline may be raised solely on the basis of the sexual orientation of the individual. 13. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Sexual behavior of a criminal nature, whether or not the individual has been prosecuted;
(b)A pattern of compulsive, self-destructive, or high risk sexual behavior that the person is unable to stop or that may be symptomatic of a personality disorder;
(c)Sexual behavior that causes an individual to be vulnerable to coercion, exploitation, or duress;
(d)Sexual behavior of a public nature and/or that reflects lack of discretion or judgment. 14. *Conditions that could mitigate security concerns include:*
(a)The behavior occurred prior to or during adolescence and there is no evidence of subsequent conduct of a similar nature;
(b)The sexual behavior happened so long ago, so infrequently, or under such unusual circumstances, that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;
(c)The behavior no longer serves as a basis for coercion, exploitation, or duress.
(d)The sexual behavior is strictly private, consensual, and discreet. Guideline E: Personal Conduct 15. *The concern.* Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process. The following will normally result in an unfavorable clearance action or administrative termination of further processing for clearance eligibility:
(a)Refusal, or failure without reasonable cause, to undergo or cooperate with security processing, including but not limited to meeting with a security investigator for subject interview, completing security forms or releases, and cooperation with medical or psychological evaluation;
(b)Refusal to provide full, frank and truthful answers to lawful questions of investigators, security officials, or other official representatives in connection with a personnel security or trustworthiness determination. 16. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities;
(b)Deliberately providing false or misleading information concerning relevant facts to an employer, investigator, security official, competent medical authority, or other official government representative;
(c)Credible adverse information in several adjudicative issue areas that is not sufficient for an adverse determination under any other single guideline, but which, when considered as a whole, supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information;
(d)Credible adverse information that is not explicitly covered under any other guideline and may not be sufficient by itself for an adverse determination, but which, when combined with all available information supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information. This includes but is not limited to consideration of:
(1)Untrustworthy or unreliable behavior to include breach of client confidentiality, release of proprietary information, unauthorized release of sensitive corporate or other government protected information:
(2)Disruptive, violent, or other inappropriate behavior in the workplace;
(3)A pattern of dishonesty or rule violations;
(4)Evidence of significant misuse of Government or other employer's time or resources;
(e)Personal conduct or concealment of information about one's conduct that creates a vulnerability to exploitation, manipulation, or duress, such as:
(1)Engaging in activities which, if known, may affect the person's personal, professional, or community standing, or
(2)While in another country, engaging in any activity that is illegal in that country or that is legal in that country but illegal in the United States and may serve as a basis for exploitation or pressure by the foreign security or intelligence service or other group;
(f)violation of a written or recorded commitment made by the individual to the employer as a condition of employment;
(g)association with persons involved in criminal activity. 17. *Conditions that could mitigate security concerns include:*
(a)The individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts;
(b)The refusal or failure to cooperate, omission, or concealment was caused or significantly contributed to by improper or inadequate advice of authorized personnel or legal counsel advising or instructing the individual specifically concerning the security clearance process. Upon being made aware of the requirement to cooperate or provide the information, the individual cooperated fully and truthfully.
(c)The offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment;
(d)The individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate the stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such behavior is unlikely to recur;
(e)The individual has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation, or duress;
(f)The information was unsubstantiated or from a source of questionable reliability;
(g)Association with persons involved in criminal activity has ceased or occurs under circumstances that do not cast doubt upon the individual's reliability, trustworthiness, judgment, or willingness to comply with rules and regulations. Guideline F: Financial Considerations 18. *The concern.* Failure or inability to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts. 19. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Inability or unwillingness to satisfy debts;
(b)Indebtedness caused by frivolous or irresponsible spending and the absence of any evidence of willingness or intent to pay the debt or establish a realistic plan to pay the debt.
(c)A history of not meeting financial obligations;
(d)Deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust;
(e)Consistent spending beyond one's means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to-income ratio, and/or other financial analysis;
(f)Financial problems that are linked to drug abuse, alcoholism, gambling problems, or other issues of security concern;
(g)Failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same;
(h)Unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that cannot be explained by subject's known legal sources of income;
(i)Compulsive or addictive gambling as indicated by an unsuccessful attempt to stop gambling, “chasing losses” (i.e. increasing the bets or returning another day in an effort to get even), concealment of gambling losses, borrowing money to fund gambling or pay gambling debts, family conflict or other problems caused by gambling. 20. *Conditions that could mitigate security concerns include:*
(a)The behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;
(b)The conditions that resulted in the financial problem were largely beyond the person's control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances;
(c)The person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control;
(d)The individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;
(e)The individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue;
(f)The affluence resulted from a legal source of income. Guideline G: Alcohol Consumption 21. *The concern.* Excessive alcohol consumption often leads to the exercise of questionable judgment or the failure to control impulses, and can raise questions about an individual's reliability and trustworthiness. 22. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Alcohol-related incidents away from work, such as driving while under the influence, fighting, child or spouse abuse, disturbing the peace, or other incidents of concern, regardless of whether the individual is diagnosed as an alcohol abuser or alcohol dependent;
(b)Alcohol-related incidents at work, such as reporting for work or duty in an intoxicated or impaired condition, or drinking on the job, regardless of whether the individual is diagnosed as an alcohol abuser or alcohol dependent;
(c)Habitual or binge consumption of alcohol to the point of impaired judgment, regardless of whether the individual is diagnosed as an alcohol abuser or alcohol dependent;
(d)Diagnosis by a duly qualified medical professional (e.g., physician, clinical psychologist, or psychiatrist) of alcohol abuse or alcohol dependence;
(e)Evaluation of alcohol abuse or alcohol dependence by a licensed clinical social worker who is a staff member of a recognized alcohol treatment program;
(f)Relapse after diagnosis of alcohol abuse or dependence and completion of an alcohol rehabilitation program;
(g)Failure to follow any court order regarding alcohol education, evaluation, treatment, or abstinence. 23. *Conditions that could mitigate security concerns include:*
(a)So much time has passed, or the behavior was so infrequent, or it happened under such unusual circumstances that it is unlikely to recur or does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;
(b)The individual acknowledges his or her alcoholism or issues of alcohol abuse, provides evidence of actions taken to overcome this problem, and has established a pattern of abstinence (if alcohol dependent) or responsible use (if an alcohol abuser);
(c)The individual is a current employee who is participating in a counseling or treatment program, has no history of previous treatment and relapse, and is making satisfactory progress;
(d)The individual has successfully completed inpatient or outpatient counseling or rehabilitation along with any required aftercare, has demonstrated a clear and established pattern of modified consumption or abstinence in accordance with treatment recommendations, such as participation in meetings of Alcoholics Anonymous or a similar organization and has received a favorable prognosis by a duly qualified medical professional or a licensed clinical social worker who is a staff member of a recognized alcohol treatment program. Guideline H: Drug Involvement 24. *The concern.* Use of an illegal drug or misuse of a prescription drug can raise questions about an individual's reliability and trustworthiness, both because it may impair judgment and because it raises questions about a person's ability or willingness to comply with laws, rules, and regulations.
(a)Drugs are defined as mood and behavior altering substances, and include:
(1)Drugs, materials, and other chemical compounds identified and listed in the Controlled Substances Act of 1970, as amended (e.g., marijuana or cannabis, depressants, narcotics, stimulants, and hallucinogens), and
(2)Inhalants and other similar substances;
(b)Drug abuse is the illegal use of a drug or use of a legal drug in a manner that deviates from approved medical direction. 25. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Any drug abuse (see above definition); 1 1 Under the provisions of 10 U.S.C. 986 any person who is an unlawful user of, or is addicted to, a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802), may not be granted or have renewed their access to classified information.
(b)Testing positive for illegal drug use;
(c)Illegal drug possession, including cultivation, processing, manufacture, purchase, sale, or distribution; or possession of drug paraphernalia;
(d)Diagnosis by a duly qualified medical professional (e.g., physician, clinical psychologist, or psychiatrist) of drug abuse or drug dependence;
(e)Evaluation of drug abuse or drug dependence by a licensed clinical social worker who is a staff member of a recognized drug treatment program;
(f)Failure to successfully complete a drug treatment program prescribed by a duly qualified medical professional;
(g)Any illegal drug use after being granted a security clearance;
(h)Expressed intent to continue illegal drug use, or failure to clearly and convincingly commit to discontinue drug use. 26. *Conditions that could mitigate security concerns include:*
(a)The behavior happened so long ago, was so infrequent, or happened under such circumstances that it is unlikely to recur or does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;
(b)A demonstrated intent not to abuse any drugs in the future, such as:
(1)Disassociation from drug-using associates and contacts;
(2)Changing or avoiding the environment where drugs were used;
(3)An appropriate period of abstinence;
(4)A signed statement of intent with automatic revocation of clearance for any violation;
(c)Abuse of prescription drugs was after a severe or prolonged illness during which these drugs were prescribed, and abuse has since ended;
(d)Satisfactory completion of a prescribed drug treatment program, including but not limited to rehabilitation and aftercare requirements, without recurrence of abuse, and a favorable prognosis by a duly qualified medical professional. Guideline I: Psychological Conditions 27. *The concern.* Certain emotional, mental, and personality conditions can impair judgment, reliability, or trustworthiness. A formal diagnosis of a disorder is not required for there to be a concern under this guideline. A duly qualified mental health professional (e.g., clinical psychologist or psychiatrist) employed by, or acceptable to and approved by the U.S. Government, should be consulted when evaluating potentially disqualifying and mitigating information under this guideline. No negative inference concerning the standards in this Guideline may be raised solely on the basis of seeking mental health counseling. 28. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Behavior that casts doubt on an individual's judgment, reliability, or trustworthiness that is not covered under any other guideline, including but not limited to emotionally unstable, irresponsible, dysfunctional, violent, paranoid, or bizarre behavior;
(b)An opinion by a duly qualified mental health professional that the individual has a condition not covered under any other guideline that may impair judgment, reliability, or trustworthiness; 2 2 Under the provisions of 10 U.S.C. 986, any person who is mentally incompetent, as determined by a credentialed mental health professional approved by the Department of Defense, may not be granted or have renewed their access to classified information.
(c)The individual has failed to follow treatment advice related to a diagnosed emotional, mental, or personality condition, e.g., failure to take prescribed medication. 29. *Conditions that could mitigate security concerns include:*
(a)The identified condition is readily controllable with treatment, and the individual has demonstrated ongoing and consistent compliance with the treatment plan;
(b)The individual has voluntarily entered a counseling or treatment program for a condition that is amenable to treatment, and the individual is currently receiving counseling or treatment with a favorable prognosis by a duly qualified mental health professional;
(c)Recent opinion by a duly qualified mental health professional employed by, or acceptable to and approved by the U.S. Government that an individual's previous condition is under control or in remission, and has a low probability of recurrence or exacerbation;
(d)The past emotional instability was a temporary condition (e.g., one caused by death, illness, or marital breakup), the situation has been resolved, and the individual no longer shows indications of emotional instability;
(e)There is no indication of a current problem. Guideline J: Criminal Conduct 30. *The concern.* Criminal activity creates doubt about a person's judgment, reliability, and trustworthiness. By its very nature, it calls into question a person's ability or willingness to comply with laws, rules and regulations. 31. *Conditions that could raise a security concern and may be disqualifying include:*
(a)A single serious crime or multiple lesser offenses;
(b)Discharge or dismissal from the Armed Forces under dishonorable conditions; 3 3 Under the provisions of 10 U.S.C. 986, a person who has received a dishonorable discharge or has been dismissed from the Armed Forces may not be granted or have renewed access to classified information. In a meritorious case, the Secretaries of the Military Departments or designee; or the Directors of WHS, DIA, NSA, DOHA or designee may authorize a waiver of this prohibition.
(c)Allegation or admission of criminal conduct, regardless of whether the person was formally charged, formally prosecuted or convicted;
(d)Individual is currently on parole or probation;
(e)Violation of parole or probation, or failure to complete a court-mandated rehabilitation program;
(f)Conviction in a Federal or State court, including a court-martial of a crime, sentenced to imprisonment for a term exceeding one year and incarcerated as a result of that sentence for not less than a year. 4 4 Under the above mentioned statute, a person who has been convicted in a Federal or State court, including courts martial, sentenced to imprisonment for a term exceeding one year and incarcerated for not less than one year, may not be granted or have renewed access to classified information. The same waiver provision also applies. 32. *Conditions that could mitigate security concerns include:*
(a)So much time has elapsed since the criminal behavior happened, or it happened under such unusual circumstances that it is unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment;
(b)The person was pressured or coerced into committing the act and those pressures are no longer present in the person's life;
(c)Evidence that the person did not commit the offense;
(d)There is evidence of successful rehabilitation; including but not limited to the passage of time without recurrence of criminal activity, remorse or restitution, job training or higher education, good employment record, or constructive community involvement;
(e)Potentially disqualifying conditions 31.
(b)and
(f)may not be mitigated unless, where meritorious circumstances exist, the Secretaries of the Military Departments or designee; or the Directors of Washington Headquarters Services (WHS), Defense Intelligence Agency (DIA), National Security Agency (NSA), Defense Office of Hearings and Appeals
(DOHA)or designee has granted a waiver. Guideline K: Handling Protected Information 33. *The concern.* Deliberate or negligent failure to comply with rules and regulations for protecting classified or other sensitive information raises doubt about an individual's trustworthiness, judgment, reliability, or willingness and ability to safeguard such information, and is a serious security concern. 34. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Deliberate or negligent disclosure of classified or other protected information to unauthorized persons, including but not limited to personal or business contacts, to the media, or to persons present at seminars, meetings, or conferences;
(b)Collecting or storing classified or other protected information at home or in any other unauthorized location;
(c)Loading, drafting, editing, modifying, storing, transmitting, or otherwise handling classified reports, data, or other information on any unapproved equipment including but not limited to any typewriter, word processor, or computer hardware, software, drive, system, gameboard, handheld, “palm” or pocket device or other adjunct equipment;
(d)Inappropriate efforts to obtain or view classified or other protected information outside one's need to know;
(e)Copying classified or other protected information in a manner designed to conceal or remove classification or other document control markings;
(f)Viewing or downloading information from a secure system when the information is beyond the individual's need-to-know;
(g)Any failure to comply with rules for the protection of classified or other sensitive information;
(h)Negligence or lax security habits that persist despite counseling by management.
(i)Failure to comply with rules or regulations that results in damage to the National Security, regardless of whether it was deliberate or negligent. 35. *Conditions that could mitigate security concerns include:*
(a)So much time has elapsed since the behavior, or it has happened so infrequently or under such unusual circumstances, that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;
(b)The individual responded favorably to counseling or remedial security training and now demonstrates a positive attitude toward the discharge of security responsibilities;
(c)The security violations were due to improper or inadequate training. Guideline L: Outside Activities 36. *The concern.* Involvement in certain types of outside employment or activities is of security concern if it poses a conflict of interest with an individual's security responsibilities and could create an increased risk of unauthorized disclosure of classified information. 37. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Any employment or service, whether compensated or volunteer, with:
(1)The government of a foreign country;
(2)Any foreign national, organization, or other entity;
(3)A representative of any foreign interest;
(4)Any foreign, domestic, or international organization or person engaged in analysis, discussion, or publication of material on intelligence, defense, foreign affairs, or protected technology;
(b)Failure to report or fully disclose an outside activity when this is required. 38. *Conditions that could mitigate security concerns include:*
(a)Evaluation of the outside employment or activity by the appropriate security or counterintelligence office indicates that it does not pose a conflict with an individual's security responsibilities or with the national security interests of the United States;
(b)The individual terminated the employment or discontinued the activity upon being notified that it was in conflict with his or her security responsibilities. Guideline M: Use of Information Technology Systems 39. *The concern.* Noncompliance with rules, procedures, guidelines or regulations pertaining to information technology systems may raise security concerns about an individual's reliability and trustworthiness, calling into question the willingness or ability to properly protect sensitive systems, networks, and information. Information Technology Systems include all related computer hardware, software, firmware, and data used for the communication, transmission, processing, manipulation, storage, or protection of information. 40. *Conditions that could raise a security concern and may be disqualifying include:*
(a)Illegal or unauthorized entry into any information technology system or component thereof;
(b)Illegal or unauthorized modification, destruction, manipulation or denial of access to information, software, firmware, or hardware in an information technology system;
(c)Use of any information technology system to gain unauthorized access to another system or to a compartmented area within the same system;
(d)Downloading, storing, or transmitting classified information on or to any unauthorized software, hardware, or information technology system;
(e)Unauthorized use of a government or other information technology system;
(f)Introduction, removal, or duplication of hardware, firmware, software, or media to or from any information technology system without authorization, when prohibited by rules, procedures, guidelines or regulations;
(g)Negligence or lax security habits in handling information technology that persist despite counseling by management;
(h)Any misuse of information technology, whether deliberate or negligent, that results in damage to the national security. 41. *Conditions that could mitigate security concerns include:*
(a)So much time has elapsed since the behavior happened, or it happened under such unusual circumstances, that it is unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment;
(b)The misuse was minor and done only in the interest of organizational efficiency and effectiveness, such as letting another person use one's password or computer when no other timely alternative was readily available;
(c)The conduct was unintentional or inadvertent and was followed by a prompt, good-faith effort to correct the situation and by notification of supervisor. Dated: August 23, 2006. L.M. Bynum, OSD Federal Register Liaison Officer, DoD. [FR Doc. E6-14361 Filed 8-29-06; 8:45 am] BILLING CODE 5001-06-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [CGD05-06-083] RIN 1625-AA09 Drawbridge Operation Regulations; Potomac River, Between Maryland and Virginia AGENCY: Coast Guard, DHS. ACTION: Final rule. SUMMARY: This rule makes non-substantive changes in the regulations that govern the operation of the new Woodrow Wilson Memorial (I-95) Bridge, mile 103.8, across the Potomac River between Alexandria, Virginia and Oxon Hill, Maryland. This rule advises that the telephone number for the Woodrow Wilson Bridge Operator's Tower has changed from
(202)727-5522 to
(703)836-2396. The rule will have no substantive effect on the regulated public. DATES: This rule is effective August 30, 2006. ADDRESSES: Documents, indicated in this preamble as being available in the docket, are part of docket CGD05-06-083 and are available for inspection or copying at Commander (dpb), Fifth Coast Guard District, Federal Building, 1st Floor, 431 Crawford Street, Portsmouth, VA 23704-5004 between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The Fifth Coast Guard District maintains the public docket for this rulemaking. FOR FURTHER INFORMATION CONTACT: Waverly W. Gregory, Jr., Bridge Administrator, Fifth Coast Guard District, at
(757)398-6222. SUPPLEMENTARY INFORMATION: Regulatory History We did not publish a notice of proposed rulemaking
(NPRM)for this regulation. Under both 5 U.S.C. 553(b)(A) and (b)(B), the Coast Guard finds that that this rule is exempt from notice and comment rulemaking requirements. Good cause exists for not publishing an NPRM for the revision in this rule because this rule advises that the telephone number for the Woodrow Wilson Bridge Operator's Tower has changed from
(202)727-5522 to
(703)836-2396. This change will have no substantive effect on the public; therefore, it is unnecessary to publish a NPRM. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that, for the same reasons, good cause exists for making this rule effective less than 30 days after publication in the **Federal Register** . Background and Purpose On July 27, 2006, the original telephone number was changed from
(202)727-5522 to
(703)836-2396 at the Operator's Tower for the Woodrow Wilson Memorial (I-95) Bridge, mile 103.8, across the Potomac River between Alexandria, Virginia and Oxon Hill, Maryland. Any vessels calling the original number will receive the following message: “The Woodrow Wilson Bridge Operator's Tower phone number has been changed. The new number is
(703)836-2396.” This voice message will be in effect for one full year. This rule to change the telephone number to the Woodrow Wilson Bridge Operator's Tower becomes effective August 30, 2006. This rule does not create any substantive requirements. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS). We expect the economic impact of this final rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. As this rule involves non-substantive changes, it will not impose any costs on the public. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. This rule does not require a general NPRM and, therefore, is exempt from the requirements of the Regulatory Flexibility Act. Although this rule is exempt, we have reviewed it for potential economic impact on small entities. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking process. No assistance was requested from any small entity. Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule would not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminates ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( *e.g.* , specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.lD, and Department of Homeland Security Management Directive 5100.1, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (32)(e) of the Instruction, from further environmental documentation. Under figure 2-1, paragraph (32)(e), of the Instruction, an “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are not required for this rule. List of Subjects in 33 CFR Part 117 Bridges. For the reasons discussed in the preamble, the Coast Guard is amending 33 CFR part 117 as follows: PART 117—DRAWBRIDGE OPERATION REGULATIONS 1. The authority citation for part 117 continues to read as follows: Authority: 33 U.S.C. 499; Department of Homeland Security Delegation No. 0170.1; 33 CFR 1.05-1(g); section 117.255 also issued under the authority of Pub. L. 102-587, 106 Stat. 5039. § 117.255 [Amended] 2. In § 117.255, in paragraphs (a)(3)(i) and (a)(5)(i) remove “(202) 727-5522”, and add, in its place, “(703) 836-2396”. Dated: August 21, 2006. L.L. Hereth, Rear Admiral, U. S. Coast Guard, Commander, Fifth Coast Guard District. [FR Doc. E6-14439 Filed 8-29-06; 8:45 am] BILLING CODE 4910-15-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 9 and 86 [EPA-HQ-OAR-2005-0474; FRL-8214-9] RIN 2060-AN70 Amendments to Regulations for Heavy-Duty Diesel Engines AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final rule. SUMMARY: In a rule published January 18, 2001, EPA promulgated several new standards for heavy-duty highway diesel engines and vehicles beginning in model year 2007. In this rulemaking we are making some technical amendments to the regulations to correct typographical errors, revise references, remove old provisions, and to revise some provisions regarding deterioration factors to be identical to those for nonroad diesel engines certified under the Tier 4 rule, published June 29, 2004. DATES: This direct final rule is effective on October 30, 2006 without further notice, unless we receive adverse comments by September 29, 2006 or receive a request for a public hearing by September 14, 2006. If we receive any adverse comments on this direct final rule, or on one or more amendments in this direct final rule, or receive a request for a hearing within the time frame described above, we will publish a timely withdrawal in the **Federal Register** informing the public that this rule, or the provisions of this rule that are the subject of adverse comment, will not take effect. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2005-0474, by one of the following methods: • *www.regulations.gov:* Follow the on-line instructions for submitting comments. • E-mail: *a-and-r-docket@epa.gov.* • Fax:
(202)566-1741. • Mail: U.S. Environmental Protection Agency, EPA West Building, 1200 Pennsylvania Ave., NW., Room: B108 Mail Code: 6102T, Washington, DC 20460. Deliveries are only accepted during the Docket's normal hours of operation from 8:30 a.m. to 4:30 p.m., Monday through Friday, except on government holidays. If your Docket requires the submission of multiple copies, please insert the following here: ▸ Please include a total of copies. ▸ If the NPRM involves an ICR that will be submitted to OMB for review and approval under 5 CFR 1320.11, then you must also include the following language pursuant to 1320.11(a): “In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 20503.” • Hand Delivery: EPA Docket Center (Air Docket), U.S. Environmental Protection Agency, EPA West Building, 1301 Constitution Avenue, NW., Room: B108, Mail Code: 6102T, Washington, DC. Such deliveries are only accepted during the Docket's normal hours of operation from 8:30 a.m. to 4:30 p.m., Monday through Friday, except on government holidays, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-HQ-OAR-2005-0474. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *www.regulations.gov,* including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *www.regulations.gov* or e-mail. The *www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *www.regulations.gov* your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm.* *Docket:* All documents in the docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in *www.regulations.gov* or in hard copy at the EPA Docket Center (EPA/DC), Air Docket, Public Reading Room, Room B108, EPA West Building, 1301 Constitution Avenue, NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, except on government holidays. You can reach the Air Docket by telephone at
(202)566-1742 and by facsimile at
(202)566-1741. You may be charged a reasonable fee for photocopying docket materials, as provided in 40 CFR part 2. FOR FURTHER INFORMATION CONTACT: Zuimdie Guerra, Assessment and Standards Division, e-mail *guerra.zuimdie@epa.gov* , voice-mail
(734)214-4387. SUPPLEMENTARY INFORMATION: I. General Information EPA is publishing this rule without a prior proposal because we view this action as noncontroversial and anticipate no adverse comment. However, in the “Proposed Rules” section of today's **Federal Register** publication, we are publishing a separate document that will serve as the proposal to adopt the provisions in this Direct Final Rule if adverse comments are filed. This rule will be effective on October 30, 2006 without further notice unless we receive adverse comment by September 29, 2006 or a request for a public hearing by September 14, 2006. If we receive adverse comment on one more distinct provisions of this rule, we will publish a timely withdrawal in the **Federal Register** indicating which provisions are being withdrawn due to adverse comment. We may address all adverse comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Any distinct provisions of today's rulemkaing for which we do not receive adverse comment will become effective on the date set out above, notwithstanding any adverse comment on any other distinct provisions of today's rule. A. Regulated Entities This action will affect companies that manufacture and certify heavy-duty highway diesel engines in the United States. Category NAICS Code a Examples of potentially affected entities Industry 336112 Engine and Truck Manufacturers. Industry 33612 Heavy-duty Engine and Truck Manufacturers. a North American Industry Classification System (NAICS). To determine whether particular activities may be affected by this action, you should carefully examine the regulations. You may direct questions regarding the applicability of this action as noted in FOR FURTHER INFORMATION CONTACT . B. How Can I Get Copies of This Document? 1. *Docket.* EPA has established an official public docket for this action under Air Docket Number EPA-HQ-OAR-2005-0474. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Air Docket in the EPA Docket Center (EPA/DC), EPA West Building, Room B108, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is
(202)566-1744, and the telephone number for the Air Docket is
(202)566-1742. 2. *Electronic Access.* This direct final rule is available electronically from the EPA Internet Web site. This service is free of charge, except for any cost incurred for internet connectivity. The electronic version of this final rule is made available on the date of publication on the primary Web site listed below. The EPA Office of Transportation and Air Quality also publishes **Federal Register** notices and related documents on the secondary Web site listed below. 1. *http://www.epa.gov/docs/fedrgstr/EPA-AIR* (either select desired date or use Search features). 2. *http://www.epa.gov/otaq* (look in What's New or under the specific rulemaking topic). Please note that due to differences between the software used to develop the documents and the software into which the document may be downloaded, format changes may occur. C. How and To Whom Do I Submit Comments? You may summit comments on this direct final rule as described in this section. You should note that we are also publishing a notice of proposed rulemaking in the “Proposed Rules” section of today's **Federal Register,** which matches the substance of this direct final rule. Your comments on this direct final rule will be considered to also be applicable to that notice of proposed rulemaking. If we receive any adverse comments on this direct final rule or receive a request for a hearing within the time frame described above, we will publish a timely withdrawal in the **Federal Register** informing the public that this rule, or the provisions of this rule receiving adverse comment, will not take effect. We may then take final action in a final rule based on the accompanying proposal. We will not institute a second comment period. You may submit comments electronically, by mail, by facsimile, or through hand delivery/courier. To ensure proper receipt by EPA, identify the appropriate docket identification number in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments. 1. *Electronically.* If you submit an electronic comment as prescribed below, EPA recommends that you include your name, mailing address, and an e-mail address or other contact information in the body of your comment. Also include this contact information on the outside of any disk or CD ROM you submit, and in any cover letter accompanying the disk or CD ROM. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. EPA's policy is that EPA will not edit your comment, and any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket, and made available in EPA's electronic public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. i. *EPA dockets* . Your use of EPA's electronic public docket to submit comments to EPA electronically is EPA's preferred method for receiving comments directly to EPA Dockets at *www.regulations.gov* and follow the online instructions for submitting comments. Once in the system, select “search,” and then key in Docket ID No. EPA-HQ-OAR-2005-0474. The system is an “anonymous access” system, which means EPA will not know your identity, e-mail address, or other contact information unless you provide it in the body of your comment. ii. *E-mail* . Comments may be sent by electronic mail (e-mail) to *a-and-r-docket@epa.gov* Attention Air Docket ID No. EPA-HQ-OAR-2005-0474. In contrast to EPA's electronic public docket, EPA's e-mail system is not an “anonymous access” system. If you send an e-mail comment directly to the Docket without going through EPA's electronic public docket, EPA's e-mail system automatically captures your e-mail address. E-mail addresses that are automatically captured by EPA's e-mail system are included as part of the comment that is placed in the official public docket, and made available in EPA's electronic public docket. iii. *Disk or CD ROM* . You may submit comments on a disk or CD ROM that you mail to the mailing address identified in ADDRESSES above. These electronic submissions will be accepted in WordPerfect or ASCII file format. Avoid the use of special characters and any form of encryption. 2. *By Mail* . Send two copies of your comments to: U.S. Environmental Protection Agency, EPA West Building, 1200 Pennsylvania Ave., NW., Room: B108 Mail Code: 6102T, Washington, DC 20460, Attention Docket ID No. EPA-HQ-OAR-2005-0474. 3. * By Hand Delivery or Courier* . Deliver your comments to: EPA Docket Center (Air Docket), U.S. Environmental Protection Agency, EPA West Building, 1301 Constitution Avenue, NW., Room: B108 Mail Code: 6102T, Washington, DC, Attention Air Docket ID No. EPA-HQ-OAR-2005-0474. Such deliveries are only accepted during the Docket's normal hours of operation as identified in Unit I. 4. * By Facsimile* . Fax your comments to:
(202)566-1741, Attention Docket ID No. EPA-HQ-OAR-2005-0474. II. Summary of Rule EPA is making the following minor amendments to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions: • Removing several sections that describe regulatory requirements for model years before 1996, and before 2001 for Selective Enforcement Auditing. Discontinuing publication of these sections does not affect the manufacturers' responsibility to continue meeting standards for any vehicles or engines that may still be operating within the regulatory useful life. • Revising the provisions for certification fees in part 86 subpart J and referring to part 85 subpart Y, since they have been completely replaced in part 85 starting with the 2004 model year. • Adding a provision to part 86 to require manufacturers of all types of engines, vehicles, and motorcycles to name an agent for service of process in the United States. This provision does not place additional burden on engine, vehicle, and motorcycle manufacturers because they already need to do this to comply with our certification requirements. This simply formalizes an existing policy to allow us to ensure that we will have a person in the United States who is able to speak for the company and receive communication regarding any aspect of our effort to certify engines and oversee compliance of certified products. This applies to § 86.007-21, § 86.416-80, § 86.437-78, and § 86.1844-01. • Re-publishing § 86.004-28(c)(4)(iii)(B) to establish deterioration factor provisions applicable to a highway heavy-duty engine identical to the options available to nonroad certified heavy-duty diesel engines certified under 40 CFR 1039.240. The new provisions establish additive deterioration factors as the default but require the use of multiplicative deterioration factors if, based on good engineering judgment, they are more appropriate for a particular engine family. • Re-publishing § 86.007-11(a)(2)(v) to correct a typographical error in the equation. • Adding paragraph
(j)to § 86.007-35 to ensure that the recently added provision that allows labeling flexibility to heavy-duty engines extends to 2007 and later model years. EPA inadvertently forgot to add this provision to the 2007 model year regulations. • Revising § 86.1213-94 to reference the fuel specifications in part 86, subpart N. This avoids a duplication of regulatory text and does not change the applicable test procedures in any way. • Republishing § 86.1360(c), which was removed in the migration of test procedures to 40 CFR part 1065. This paragraph needs to be added back because there is a reference to it in § 86.1370-2007 and in § 86.1380-2004. • Revising § 86.1806-01 to properly cite the incorporation by reference of several technical standards related to on-board diagnostics. These documents are formally incorporated by reference in § 86.1, so the text in § 86.1806-01 is revised to describe how the standards apply, with a straightforward reference to § 86.1 for the full description of the standards with instructions for readers to obtain the documents. • Revising the language in CFR § 86.1806-04(j) and § 86.1806-05(j) to correctly refer to LDVs, LDTs and heavy-duty vehicles weighing 14,000 pounds GVWR or less. Inadvertently we referenced “heavy-duty engines weighing 14,000 pounds GVWR or less” instead of LDVs, LDTs and heavy-duty vehicles weighing 14,000 pounds GVWR or less. • Correcting a mistake made in the 2004 Heavy-Duty rule that revised § 86.1840-01. This rule revision included only paragraphs
(a)and
(b)and therefore paragraphs
(c)and
(d)were omitted from § 86.1840-01. EPA had no intention of removing paragraphs
(c)and (d). This rule is adding these two paragraphs back. EPA does not expect that these minor revisions will have any adverse cost impact to the manufacturers. There are no testing costs associated with the revisions. There is no environmental impact associated with this regulatory action because this rulemaking does not change the heavy-duty highway diesel engine emission standards that manufacturers have to meet; it simply makes some minor amendments to the regulations. III. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review This action is not a “significant regulatory action” under the terms of Executive Order
(EO)12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO. This direct final rule is not a significant regulatory action as it merely makes a slight revision to the regulations to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions for highway heavy-duty diesel engines. There are no new costs associated with this rule. B. Paperwork Reduction Act This proposed rule does not include any new collection requirements, as it merely makes a slight revision to the regulations to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions for highway heavy-duty diesel engines. There are no new paperwork requirements associated with this rule. The information collection requirements
(ICR)for the original heavy-duty diesel engines and vehicles rulemaking were approved by the Office of Management and Budget
(OMB)under the Paperwork Reduction Act, 44 U.S.C. 3501 *et seq.* and assigned OMB control number 2060-0104, EPA ICR number 0783.47. A copy of the OMB approved Information Collection Request
(ICR)may be obtained from Susan Auby, Collection Strategies Division; U.S. Environmental Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling
(202)566-1672. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this direct final rule. For purposes of assessing the impacts of this final rule on small entities, a small entity is defined as:
(1)A small business that meet the definition for business based on SBA size standards at 13 CFR 121.201;
(2)a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and
(3)a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of today's final rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may conclude that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. This direct final rule merely makes a slight revision to the regulations to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions for highway heavy-duty diesel engines. We have therefore concluded that today's final rule will relieve regulatory burden for all small entities. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “federal mandates” that may result in expenditures to state, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation of why such an alternative was adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. This rule contains no federal mandates for state, local, or tribal governments as defined by the provisions of Title II of the UMRA. The rule imposes no enforceable duties on any of these governmental entities. Nothing in the rule would significantly or uniquely affect small governments. EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. This direct final rule merely makes a slight revision to the regulations to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions for highway heavy-duty diesel engines. Thus, today's rule is not subject to the requirements of sections 202 and 205 of the UMRA. E. Executive Order 13132: Federalism Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA 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 Section 6 of Executive Order 13132, EPA may not issue a regulation that has 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 EPA consults with State and local officials early in the process of developing the regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the regulation. Section 4 of the Executive Order contains additional requirements for rules that preempt State or local law, even if those rules do not have federalism implications ( *i.e.,* the rules will not 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). Those requirements include providing all affected State and local officials notice and an opportunity for appropriate participation in the development of the regulation. If the preemption is not based on express or implied statutory authority, EPA also must consult, to the extent practicable, with appropriate State and local officials regarding the conflict between State law and Federally protected interests within the agency's area of regulatory responsibility. This rule does not have federalism implications. It will not 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, as specified in Executive Order 13132. This direct final rule merely makes a slight revision to the regulations to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions for highway heavy-duty diesel engines. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (59 FR 22951, November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.” This rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. This rule does not uniquely affect the communities of Indian Tribal Governments. Further, no circumstances specific to such communities exist that would cause an impact on these communities beyond those discussed in the other sections of this rule. This direct final rule merely makes a slight revision to the regulations to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions for highway heavy-duty diesel engines. Thus, Executive Order 13175 does not apply to this rule. G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that
(1)is determined to be “economically significant” as defined under Executive Order 12866, and
(2)concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, Section 5-501 of the Order directs the Agency to evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. This rule is not subject to the Executive Order because it is not economically significant, and does not involve decisions on environmental health or safety risks that may disproportionately affect children. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)) because it is not a significant regulatory action under Executive Order 12866. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (such as materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This direct final rule does not involve technical standards. This direct final rule merely makes a slight revision to the regulations to correct typographical errors, revise references, restore sections, conciliate provisions with our nonroad engine regulations and remove old provisions for highway heavy-duty diesel engines. Thus, we have determined that the requirements of the NTTAA do not apply. J. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.,* as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to Congress and the Comptroller General of the United States. We will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States before publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This direct final rule is effective on October 30, 2006. K. Statutory Authority The statutory authority for this action comes from section 202 of the Clean Air Act as amended (42 U.S.C. 7521). This action is a rulemaking subject to the provisions of Clean Air Act section 307(d). See 42 U.S.C. 7607(d). List of Subjects 40 CFR Part 9 Reporting and recordkeeping requirements. 40 CFR Part 86 Environmental protection, Administrative practice and procedure, Air pollution control, Motor vehicle pollution, Reporting and recordkeeping requirements. Dated: August 24, 2006. Stephen L. Johnson, Administrator. For the reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as set forth below. PART 9—OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT 1. The authority citation for part 9 continues to read as follows: Authority: 7 U.S.C. 135 *et seq.* , 136-136y; 15 U.S.C. 2001, 2003, 2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 U.S.C. 1251 *et seq.* , 1311, 1313d, 1314, 1318, 1321, 1326, 1330, 1342, 1344, 1345(d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 300j-4, 300j-9, 1857 *et seq.* , 6901-6992k, 7401-7671q, 7542, 9601-9657, 11023, 11048. 2. Section 9.1 is amended by removing from the table the following entries: 86.085-13 86.091-21 86.092-15 86.090-14 86.091-23 86.092-23 86.090-21 86.091-28 86.092-24 86.090-25 86.091-30 86.092-26 86.090-26 86.092-14 86.092-35 86.091-15 86.094-7—86.094-9 86.094-24(a)(3)(iii) 86.608-96 86.1313-84 86.094-35 86.609-84 86.1313-87 86.095-24 86.609-96 86.1313-90 86.113-82 86.612-84 86.1313-91 86.113-87 86.908-01 86.1314-84 86.113-90 86.909-93 86.1316-84 86.113-91 86.1003-97 86.1316-90 86.135-82 86.1008-90 86.1319-84 86.135-90 86.1008-96 86.1321-84 86.135-94 86.1009-84 86.1321-90 86.144-90 86.1009-96 86.1327-84 86.608.88 86.1213-85 86.1327-88 86.608.90 86.1213-87 86.1327-90 PART 86—CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES AND ENGINES 3. The authority citation for part 86 continues to read as follows: Authority: 42 U.S.C. 7401-7671q. Subpart A—[Amended] 4. Subpart A is amended by removing the following sections: 86.084-40 86.091-11 86.092-35 86.085-1 86.091-15 86.093-11 86.085-13 86.091-21 86.093-35 86.088-10 86.091-23 86.094-8 86.090-1 86.091-28 86.094-11 86.090-9 86.091-30 86.094-24 86.090-14 86.091-35 86.094-35 86.090-21 86.092-1 86.094-38 86.090-22 86.092-14 86.095-24 86.090-24 86.092-15 86.090-25 86.092-23 86.090-26 86.092-24 86.091-9 86.092-26 5. Section 86.004-28 is amended by redesignating the paragraph (c)(4)(iii)(B)(iv) as (c)(4)(iii)(B)(4) and revising paragraphs (c)(4)(iii)(B)(1) and (c)(4)(iii)(B)(2) to read as follows: § 86.004-28 Compliance with emission standards.
(c)* * *
(4)* * *
(iii)* * *
(B)* * * ( *1* ) Additive deterioration factor for exhaust emissions. Except as specified in paragraph (c)(4)(iii)(B)(2) of this section, use an additive deterioration factor for exhaust emissions. An additive deterioration factor for a pollutant is the difference between exhaust emissions at the end of the useful life and exhaust emissions at the low-hour test point. In these cases, adjust the official emission results for each tested engine at the selected test point by adding the factor to the measured emissions. If the factor is less than zero, use zero. Additive deterioration factors must be specified to one more decimal place than the applicable standard. ( *2* ) Multiplicative deterioration factor for exhaust emissions. Use a multiplicative deterioration factor if good engineering judgment calls for the deterioration factor for a pollutant to be the ratio of exhaust emissions at the end of the useful life to exhaust emissions at the low-hour test point. For example, if you use aftertreatment technology that controls emissions of a pollutant proportionally to engine-out emissions, it is often appropriate to use a multiplicative deterioration factor. Adjust the official emission results for each tested engine at the selected test point by multiplying the measured emissions by the deterioration factor. If the factor is less than one, use one. A multiplicative deterioration factor may not be appropriate in cases where testing variability is significantly greater than engine-to-engine variability. Multiplicative deterioration factors must be specified to one more significant figure than the applicable standard. 6. Section 86.007-11 is amended by revising paragraph (a)(2)(v) to read as follows: § 86.007-11 Emission standards and supplemental requirements for 2007 and later model year heavy-duty engines and vehicles.
(a)* * *
(2)* * *
(v)Determine your engine's brake-specific emissions using the following calculation, which weights the emissions from the cold-start and hot-start test intervals: ER30AU06.001 7. Section 86.007-21 is amended by adding paragraph
(q)to read as follows: § 86.007-21 Application for certification.
(q)The manufacturer must name an agent for service of process located in the United States. Service on this agent constitutes service on you or any of your officers or employees for any action by EPA or otherwise by the United States related to the requirements of this part. 8. Section 86.007-35 is amended by adding paragraph
(j)to read as follows: § 86.007-35 Labeling.
(j)The Administrator may approve in advance other label content and formats provided the alternative label contains information consistent with this section. Subpart B—[Amended] 9. Subpart B is amended by removing the following sections: 86.106-90 86.106-94 86.107-90 86.109-90 86.113-91 86.114-79 86.116-90 86.117-90 86.120-82 86.121-82 86.127-90 86.127-94 86.130-78 86.131-90 86.132-90 86.133-90 86.138-90 86.140-82 86.140-90 86.143-90 86.144-90 Subpart E—[Amended] 10. Subpart E is amended by removing the following sections: 86.401-90 86.410-80 11. Section 86.416-80 is amended by adding paragraph (a)(2)(ix) to read as follows: § 86.416-80 Application for certification.
(a)* * *
(2)* * *
(ix)The name of an agent for service of process located in the United States. Service on this agent constitutes service on you or any of your officers or employees for any action by EPA or otherwise by the United States related to the requirements of this part. 12. Section 86.437-78 is amended by adding paragraph (b)(1)(iii) to read as follows: § 86.437-78 Certification.
(b)* * *
(1)* * *
(iii)The name of an agent for service of process located in the United States. Service on this agent constitutes service on you or any of your officers or employees for any action by EPA or otherwise by the United States related to the requirements of this part. Subpart F—[Amended] 13. Subpart F is amended by removing the following sections: 86.513-87 86.513-90 86.519-78 86.529-78 Subpart G—[Amended] 14. Subpart G is amended by removing the following sections: 86.602-97 86.603-97 86.608-88 86.608-90 86.608-96 86.608-97 86.609-84 86.609-96 86.609-97 86.610-96 86.612-84 Subpart J—[Amended] 15. Subpart J is revised to read as follows: Subpart J—Fees for the Motor Vehicle and Engine Compliance Program § 86.901 Assessment of fees. See 40 CFR part 85, subpart Y, for the applicable fees associated with certifying engines and vehicles under this part. Subpart K—[Amended] 16. Subpart K is amended by removing the following sections: 86.1002-84 86.1002-97 86.1003-97 86.1008-90 86.1008-96 86.1008-97 86.1009-84 86.1009-96 86.1009-97 86.1010-96 86.1012-84 Subpart M—[Amended] 17. Subpart M is amended by removing the following sections: 86.1206-90 86.1207-90 86.1213-04 86.1213-90 86.1217-90 86.1227-90 86.1230-85 86.1232-90 86.1233-90 86.1235-85 86.1238-90 86.1243-90 18. Section 86.1213-94 is revised to read as follows: § 86.1213-94 Fuel specifications. Use the fuels specified in subpart N of this part for evaporative emission testing. Subpart N—[Amended] 19. Subpart N is amended by removing the following sections: 86.1306-90 86.1311-90 86.1313-91 86.1314-84 86.1316-90 86.1319-84 86.1321-90 86.1327-90 86.1327-94 86.1330-84 86.1337-90 86.1344-90 20. Section 86.1360-2007 is amended by adding paragraph
(c)to read as follows: § 86.1360-2007 Supplemental emission test; test cycle and procedures.
(c)*Determining engine speeds.*
(1)The engine speeds A, B and C, referenced in the table in paragraph (b)(1) of this section, and speeds D and E, referenced in § 86.1380, must be determined as follows: Speed A = n <sup>lo</sup> + 0.25 × (n <sup>hi</sup> −n <sup>lo</sup> ) Speed B = n <sup>lo</sup> + 0.50 × (n <sup>hi</sup> −n <sup>lo</sup> ) Speed C = n <sup>lo</sup> + 0.75 × (n <sup>hi</sup> −n <sup>lo</sup> ) Speed D = n <sup>hi</sup> Speed E = n <sup>lo</sup> + 0.15 × (n <sup>hi</sup> −n <sup>lo</sup> ) Where: n <sup>hi</sup> = High speed as determined by calculating 70% of the maximum power. The highest engine speed where this power value occurs on the power curve is defined as n <sup>hi</sup> . n <sup>lo</sup> = Low speed as determined by calculating 50% of the maximum power. The lowest engine speed where this power value occurs on the power curve is defined as n <sup>lo</sup> . Maximum power = the maximum observed power calculated according to the engine mapping procedures defined in § 86.1332. Subpart P—[Amended] 21. Subpart P is amended by removing the following sections: 86.1501-90 86.1504-90 86.1505-84 86.1505-90 86.1506-90 86.1513-90 Subpart S—[Amended] 22. Section 86.1806-01 is amended by revising paragraphs
(e)introductory text, (f)(2), (f)(3), and
(h)to read as follows: § 86.1806-01 On-board diagnostics.
(e)*Storing of computer codes.* The emission control diagnostic system shall record and store in computer memory diagnostic trouble codes and diagnostic readiness codes indicating the status of the emission control system. These codes shall be available through the standardized data link connector per SAE J1979 specifications as described in paragraph
(h)of this section.
(f)* * *
(2)The following data in addition to the required freeze frame information shall be made available on demand through the serial port on the standardized data link connector, if the information is available to the on-board computer or can be determined using information available to the on-board computer: Diagnostic trouble codes, engine coolant temperature, fuel control system status (closed loop, open loop, other), fuel trim, ignition timing advance, intake air temperature, manifold air pressure, air flow rate, engine RPM, throttle position sensor output value, secondary air status (upstream, downstream, or atmosphere), calculated load value, vehicle speed, and fuel pressure. The signals shall be provided in standard units based on SAE specifications described in paragraph
(h)of this section. Actual signals shall be clearly identified separately from default value or limp home signals.
(3)For all emission control systems for which specific on-board evaluation tests are conducted (catalyst, oxygen sensor, etc.), the results of the most recent test performed by the vehicle, and the limits to which the system is compared shall be available through the standardized data link connector per SAE J1979 specifications as described in paragraph
(h)of this section.
(h)*Reference materials.* The emission control diagnostic system shall provide for standardized access and conform with the following standards that we incorporate by reference in § 86.1:
(1)Except as specified in paragraph (h)(2) of this section, SAE J1850 “Class B Data Communication Network Interface,” (July 1995) shall be used as the on-board to off-board communications protocol. All emission related messages sent to the scan tool over a J1850 data link shall use the Cyclic Redundancy Check and the three byte header, and shall not use inter-byte separation or checksums.
(2)ISO 9141-2 February 1994 “Road vehicles—Diagnostic systems—Part 2: CARB requirements for interchange of digital information,” may be used as an alternative to SAE J1850 as the on-board to off-board communications protocol.
(3)Basic diagnostic data (as specified in §§ 86.094-17(e) and (f)) shall be provided in the format and units in SAE J1979 July 1996 E/E Diagnostic Test Modes.”
(4)Diagnostic trouble codes shall be consistent with SAE J2012 July 1996 “Recommended Practices for Diagnostic Trouble Code Definitions.”
(5)The connection interface between the OBD system and test equipment and diagnostic tools shall meet the functional requirements of SAE J1962 January 1995 “Diagnostic Connector.” 23. Section 86.1806-04 is amended by revising paragraph
(j)to read as follows: § 86.1806-04 On-board diagnostics.
(j)California OBDII compliance option. For light-duty vehicles, light-duty trucks, and heavy-duty vehicles weighing 14,000 pounds GVWR or less, demonstration of compliance with California OBD II requirements (Title 13 California Code of Regulations § 1968.2 (13 CCR 1968.2)), as modified, approved and filed on April 21, 2003, shall satisfy the requirements of this section, except that compliance with 13 CCR 1968.2(e)(4.2.2)(C), pertaining to 0.02 inch evaporative leak detection, and 13 CCR 1968.2(d)(1.4), pertaining to tampering protection, are not required to satisfy the requirements of this section. Also, the deficiency provisions of 13 CCR 1968.2(i) do not apply. The deficiency provisions of paragraph
(i)of this section and the evaporative leak detection requirement of paragraph (b)(4) of this section apply to manufacturers selecting this paragraph for demonstrating compliance. In addition, demonstration of compliance with 13 CCR 1968.2(e)(16.2.1)(C), to the extent it applies to the verification of proper alignment between the camshaft and crankshaft, applies only to vehicles equipped with variable valve timing. 24. Section 86.1806-05 is amended by revising paragraph
(j)to read as follows: § 86.1806-05 On-board diagnostics.
(j)California OBDII compliance option. For light-duty vehicles, light-duty trucks, and heavy-duty vehicles weighing 14,000 pounds GVWR or less, demonstration of compliance with California OBDII requirements (Title 13 California Code of Regulations § 1968.2 (13 CCR 1968.2)), as modified, approved and filed on April 21, 2003, shall satisfy the requirements of this section, except that compliance with 13 CCR 1968.2(e)(4.2.2)(C), pertaining to 0.02 inch evaporative leak detection, and 13 CCR 1968.2(d)(1.4), pertaining to tampering protection, are not required to satisfy the requirements of this section. Also, the deficiency provisions of 13 CCR 1968.2(i) do not apply. The deficiency provisions of paragraph
(i)of this section and the evaporative leak detection requirement of paragraph (b)(4) of this section apply to manufacturers selecting this paragraph for demonstrating compliance. In addition, demonstration of compliance with 13 CCR 1968.2(e)(16.2.1)(C), to the extent it applies to the verification of proper alignment between the camshaft and crankshaft, applies only to vehicles equipped with variable valve timing. 25. Section 86.1840-01 is amended by adding paragraphs
(c)and
(d)to read as follows: § 86.1840-01 Special test procedures.
(c)Manufacturers of vehicles equipped with periodically regenerating trap oxidizer systems must propose a procedure for testing and certifying such vehicles including SFTP testing for the review and approval of the Administrator. The manufacturer must submit its proposal before it begins any service accumulation or emission testing. The manufacturer must provide with its submittal, sufficient documentation and data for the Administrator to fully evaluate the operation of the trap oxidizer system and the proposed certification and testing procedure.
(d)The provisions of paragraph
(a)and
(b)of this section also apply to MDPVs. 26. Section 86.1844-01 is amended by adding paragraph (d)(17) to read as follows: § 86.1844-01 Information requirements: Application for certification and submittal of information upon request.
(d)* * *
(17)The name of an agent for service of process located in the United States. Service on this agent constitutes service on you or any of your officers or employees for any action by EPA or otherwise by the United States related to the requirements of this part. [FR Doc. E6-14429 Filed 8-29-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R05-OAR-2006-0399; FRL-8214-5] Determination of Attainment, Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes; Indiana; Redesignation of Allen County 8-hour Ozone Nonattainment Area to Attainment for Ozone AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final rule. SUMMARY: On May 30, 2006, the State of Indiana, through the Indiana Department of Environmental Management (IDEM), submitted, in final: A request to redesignate the 8-hour ozone National Ambient Air Quality Standard (NAAQS) nonattainment area of Allen County, Indiana, to attainment for the 8-hour ozone NAAQS; and a request for EPA approval of an Indiana State Implementation Plan
(SIP)revision containing a 14-year maintenance plan for Allen County. Today, EPA is making a determination that the Allen County, Indiana ozone nonattainment area has attained the 8-hour ozone NAAQS. This determination is based on three years of complete, quality-assured ambient air quality monitoring data for the 2003-2005 ozone seasons that demonstrate that the 8-hour ozone NAAQS has been attained in the area. EPA is also approving the request to redesignate the area to attainment for the 8-hour ozone standard and the State's maintenance plan. EPA's approval of the 8-hour ozone redesignation request is based on its determination that Allen County, Indiana has met the criteria for redesignation to attainment specified in the Clean Air Act (CAA). EPA is also approving, for purposes of transportation conformity, the motor vehicle emission budgets (MVEBs) for the year 2020 that are contained in the 14-year 8-hour ozone maintenance plan for Allen County. DATES: This rule is effective on October 30, 2006, unless EPA receives adverse written comments by September 29, 2006. If EPA receives adverse comments, EPA will publish a timely withdrawal of the rule in the **Federal Register** and inform the public that the rule will not take effect. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-OAR-2006-0399, by one of the following methods: • *www.regulations.gov:* Follow the on-line instructions for submitting comments. • E-mail: *mooney.john@epa.gov.* • Fax:
(312)886-5824. • Mail: John M. Mooney, Chief, Criteria Pollutant Section, (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. • Hand Delivery: John M. Mooney, Chief, Criteria Pollutant Section, (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Such deliveries are only accepted during the Regional Office normal hours of operation, and special arrangements should be made for deliveries of boxed information. The Regional Office official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m. excluding Federal holidays. *Instructions:* Direct your comments to Docket ID No. EPA-R05-OAR-2006-0399. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *www.regulations.gov,* including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *www.regulations.gov* or e-mail. The *www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *www.regulations.gov* your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional instructions on submitting comments, go to Section I of the SUPPLEMENTARY INFORMATION section of this document. *Docket:* All documents in the docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in *www.regulations.gov* or in hard copy at the Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. This Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. We recommend that you telephone Steven Rosenthal, Environmental Engineer, at
(312)886-6052 before visiting the Region 5 office. FOR FURTHER INFORMATION CONTACT: Steven Rosenthal, Environmental Engineer, Criteria Pollutant Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604,
(312)886-6052, *Rosenthal.steven@epa.gov.* SUPPLEMENTARY INFORMATION: Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows: I. What Should I Consider as I Prepare My Comments for EPA? II. What Actions Are EPA Taking? III. What Is the Background for These Actions? IV. What Are the Criteria for Redesignation? V. Why Is EPA Taking These Actions? VI. What Is EPA's Analysis of the Request? VII. Has Indiana Adopted Acceptable Motor Vehicle Emissions Budgets for the End of the 14-Year Maintenance Plan Which Can Be Used To Support Conformity Determinations? VIII. What Is the Effect of EPA's Actions? IX. Statutory and Executive Order Reviews. I. What Should I Consider as I Prepare My Comments for EPA? A. *Submitting CBI.* Do not submit this information to EPA through *www.regulations.gov* or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI). In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. B. *Tips for Preparing Your Comments.* When submitting comments, remember to: 1. Identify the rulemaking by docket number and other identifying information (subject heading, **Federal Register** date and page number). 2. Follow directions—The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations
(CFR)part or section number. 3. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. 4. Describe any assumptions and provide any technical information and/or data that you used. 5. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. 6. Provide specific examples to illustrate your concerns, and suggest alternatives. 7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats. 8. Make sure to submit your comments by the comment period deadline identified. II. What Actions Are EPA Taking? EPA is taking several related actions. EPA is making a determination that the Allen County nonattainment area has attained the 8-hour ozone standard. EPA is also approving the State's request to change the legal designation of the Allen County area from nonattainment to attainment for the 8-hour ozone NAAQS. EPA is also approving Indiana's maintenance plan SIP revision for Allen County (such approval being one of the CAA criteria for redesignation to attainment status). The maintenance plan is designed to keep Allen County in attainment for ozone for the next 14 years, through 2020. In addition, and supported by and consistent with the ozone maintenance plan, EPA is approving the 2020 VOC and NO <sup>X</sup> MVEBs for Allen County for transportation conformity purposes. These actions pertain to the designation of Allen County for the 8-hour ozone standard and to the emission controls in this area related to attainment and maintenance of the 8-hour ozone NAAQS. The emissions of concern are VOC and NO <sup>X</sup> . If you own or operate a VOC or NO <sup>X</sup> emission source in Allen County or live in this area, this rule may apply to you. It may also apply to you if you are involved in transportation planning or implementation of emission controls in this area. III. What Is the Background for These Actions? Ground-level ozone is not emitted directly by sources. Rather, emissions of nitrogen oxides (NO <sup>X</sup> ) and volatile organic compounds
(VOC)react in the presence of sunlight to form ground-level ozone. NO <sup>X</sup> and VOC are referred to as precursors of ozone. The CAA required EPA to designate as nonattainment any area that was violating the 8-hour ozone NAAQS based on the three most recent years (2001-2003) of air quality data. The **Federal Register** notice making these designations was signed on April 15, 2004, and published on April 30, 2004, (69 FR 23857). The CAA contains two sets of provisions—subpart 1 and subpart 2— that address planning and control requirements for nonattainment areas. (Both are found in title I, part D.) Subpart 1 (which EPA refers to as “basic” nonattainment) contains general, less prescriptive, requirements for nonattainment areas for any pollutant—including ozone—governed by a NAAQS. Subpart 2 (which EPA refers to as “classified” nonattainment) provides more specific requirements for ozone nonattainment areas. Some areas are subject only to the provisions of subpart 1. Other areas are also subject to the provisions of subpart 2. Under EPA's 8-hour ozone implementation rule, signed on April 15, 2004, an area was classified under subpart 2 based on its 8-hour ozone design value ( *i.e.* , the 3-year average annual fourth-highest daily maximum 8-hour average ozone concentration), if it had a 1-hour design value at or above 0.121 ppm (the lowest 1-hour design value in Table 1 of subpart 2). All other areas are covered under subpart 1, based upon their 8-hour design values. Allen County was originally designated as an 8-hour ozone nonattainment area by EPA on April 30, 2004, (69 FR 23857). The 2004 classification for Allen County as a subpart 1 8-hour ozone nonattainment area was based on air quality monitoring data from 2001-2003. Control requirements are linked to each classification. Areas with more serious ozone pollution are subject to more prescribed requirements. The requirements are designed to bring areas into attainment by their specified attainment dates. The control requirements and dates by which attainment needs to be achieved vary with the area's classification. For example, marginal areas are subject to the fewest mandated control requirements and have the earliest attainment date. Under EPA regulations at 40 CFR part 50, the 8-hour ozone standard is attained when the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations (i.e., 0.084 ppm) is less than or equal to 0.08 ppm. (See 69 FR 23857 (April 30, 2004) for further information). The data completeness requirement is met when the average percent of days with valid ambient monitoring data is greater than 90 percent, and no single year has less than 75 percent data completeness as determined in Appendix I of part 50. On May 30, 2006, Indiana submitted a request for redesignation to attainment for the 8-hour ozone standard for Allen County. The redesignation request included three years of complete, quality-assured data for the period of 2003 through 2005, indicating the 8-hour NAAQS for ozone had been achieved for the Allen County. The data satisfy the CAA requirements when the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentration is less than or equal to 0.08 ppm. Under the CAA, nonattainment areas may be redesignated to attainment if sufficient complete, quality-assured data are available for the Administrator to determine that the area has attained the standard and the area meets the other CAA redesignation requirements in section 107(d)(3)(E). IV. What Are the Criteria for Redesignation? The CAA provides the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) allows for redesignation providing that:
(1)The Administrator determines that the area has attained the applicable NAAQS;
(2)the Administrator has fully approved the applicable implementation plan for the area under section 110(k);
(3)the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP and applicable Federal air pollutant control regulations and other permanent and enforceable reductions;
(4)the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A; and,
(5)the state containing such area has met all requirements applicable to the area under section 110 and part D. EPA provided guidance on redesignation in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990, on April 16, 1992 (57 FR 13498), and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents: State Implementation Plans; “Ozone and Carbon Monoxide Design Value Calculations”, Memorandum from Bill Laxton, June 18, 1990; “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992; “Contingency Measures for Ozone and Carbon Monoxide
(CO)Redesignations,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992; “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992; “State Implementation Plan
(SIP)Actions Submitted in Response to Clean Air Act
(ACT)Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992; “Technical Support Documents (TSD's) for Redesignation Ozone and Carbon Monoxide
(CO)Nonattainment Areas,” Memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993; “State Implementation Plan
(SIP)Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide
(CO)National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993; Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, to Air Division Directors, Regions 1-10, “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” dated November 30, 1993. “Part D New Source Review (part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995. V. Why Is EPA Taking These Actions? On May 30, 2006, the State submitted in final, after an April 18, 2006, public hearing, a request to redesignate the area to attainment for the 8-hour ozone standard. EPA believes that Allen County has attained the standard and has met the requirements for redesignation set forth in section 107(d)(3)(E). VI. WhatI Is EPA's Analysis of the Request? EPA is making a determination that the Allen County nonattainment area has attained the 8-hour ozone standard and that all other redesignation criteria have been met. The basis for EPA's determination is as follows: 1. *Allen County has attained the 8-hour ozone NAAQS:* EPA is making a determination that Allen County has attained the 8-hour ozone NAAQS. For ozone, an area may be considered to be attaining the 8-hour ozone NAAQS if there are no violations, as determined in accordance with 40 CFR 50.10 and Appendix I, based on three complete, consecutive calendar years of quality-assured air quality monitoring data. To attain this standard, the 3-year average of the fourth-highest daily maximum 8-hour average ozone concentrations measured at each monitor within an area over each year must not exceed 0.08 ppm. Based on the rounding convention described in 40 CFR part 50, Appendix I, the standard is attained if the design value is 0.084 ppm or below. The data must be collected and quality-assured in accordance with 40 CFR part 58, and recorded in Aerometric Information Retrieval System (AIRS). The monitors generally should have remained at the same location for the duration of the monitoring period required for demonstrating attainment. Indiana submitted ozone monitoring data for the April through September ozone seasons from 2003 to 2005. This data has been quality assured and is recorded in AIRS. In its May 30, 2006, redesignation request, Indiana certified that the Allen County 2003-2005 data is accurate. The 4th high averages are summarized in Table 1, in which the values are in ppm ozone. Table 1.—4th High Values in PPM Ozone Monitor County 2003-2005 2003 2004 2005 Leo Allen 0.083 0.090 0.073 0.086 Ft. Wayne Allen 0.076 0.084 0.069 0.076 In addition, as discussed below with respect to the maintenance plan, Indiana has committed to continue monitoring in these areas in accordance with 40 CFR part 58. In summary, EPA believes that the data submitted by Indiana provide an adequate demonstration that Allen County has attained the 8-hour ozone NAAQS. 2. *Allen County has met all applicable requirements under section 110 and part D of the CAA and the Area has a fully approved SIP under section 110(k) for Purposes of Redesignation.* EPA has determined that Indiana has met all applicable SIP requirements for Allen County for purposes of redesignation under section 110 of the CAA (general SIP requirements). EPA has also determined that the Indiana SIP meets applicable SIP requirements under Part D of Title I of the Clean Air Act (requirements specific to Subpart 1 nonattainment areas). Section 107(d)(3)(E)(v). In addition, EPA has determined that the SIP is fully approved with respect to all applicable requirements for purposes of redesignation. Section 107(d)(3)(E)(ii). In making these determinations, EPA ascertained what requirements are applicable to the area and that they are fully approved under section 110(k). SIPs must be fully approved only with respect to applicable requirements. a. *Allen County has met all applicable requirements for purposes of redesignation under Section 110 and Part D of the CAA.* The September 4, 1992 Calcagni memorandum (see “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992) describes EPA's interpretation of section 107(d)(3)(E). Under this interpretation, to qualify for redesignation states requesting redesignation to attainment must meet the relevant CAA requirements that come due prior to the submittal of a complete redesignation request. See also Michael Shapiro memorandum, September 17, 1993 and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor, MI). Applicable requirements of the CAA that come due subsequent to the area's submittal of a complete redesignation request remain applicable until a redesignation is approved, but are not required as a prerequisite to redesignation. Section 175A
(c)of the CAA. *Sierra Club* v. *EPA,* 375 F.3d 537 (7th Cir. 2004). See also 68 FR 25424, 25427 (May 12, 2003 (St. Louis NFR) *General SIP requirements:* Section 110(a)(2) of Title I of the CAA delineates the general requirements for a SIP, which include enforceable emission limitations and other control measures, means, or techniques, provisions for the establishment and operation of appropriate devices necessary to collect data on ambient air quality, and programs to enforce the limitations. General SIP elements and requirements are delineated in section 110(a)(2) of Title I, part A of the CAA. These requirements include, but are not limited to, the following: Submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; implementation of a source permit program; provisions for the implementation of part C requirements (Prevention of Significant Deterioration
(PSD)and part D requirements (New Source Review
(NSR)for major new sources or major source modifications; provisions for air pollution modeling; and provisions for public and local agency participation in planning and emission control rule development. Section 110(a)(2)(D) requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address transport of air pollutants (NO <sup>X</sup> SIP Call, Clean Air Interstate Rule). EPA has also found, generally, that states have not submitted SIPs under section 110(a)(1) to meet the interstate transport requirements of section 110(a)(2)(D)(i). However, the section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. EPA believes that the requirements linked with a particular nonattainment area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, we do not believe that these requirements should be construed to be applicable requirements for purposes of redesignation. In addition, EPA believes that the other section 110 elements not connected with nonattainment plan submissions and not linked with an area's attainment status are not applicable requirements for purposes of redesignation. The State will still be subject to these requirements after the area is redesignated. The section 110 and part D requirements, which are linked with a particular area's designation and classification, are the relevant measures to evaluate in reviewing a redesignation request. This policy is consistent with EPA's existing conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See Reading, Pennsylvania, proposed and final rulemakings (61 FR 53174-53176, October 10, 1996), (62 FR 24826, May 7, 1997); Cleveland-Akron-Lorain, Ohio, final rulemaking (61 FR 20458, May 7, 1996); and Tampa, Florida, final rulemaking at (60 FR 62748, December 7, 1995). See also the discussion on this issue in the Cincinnati redesignation (65 FR 37890, June 19, 2000), and in the Pittsburgh redesignation (66 FR 50399, October 19, 2001) EPA believes that section 110 elements not linked to the area's nonattainment status are not applicable for purposes of redesignation. Any section 110 requirements that are linked to the Part D requirements for 8-hour ozone nonattainment areas are not yet due, since, as explained below, no Part D requirements applicable for purposes of redesignation under the 8-hour standard are expected to be due prior to submission of the redesignation request. Therefore EPA believes that the State has satisfied the criterion of section 107(d)(3)(E) regarding section 110 of the Act. *Part D requirements:* EPA has also determined that the Indiana SIP meets applicable SIP requirements under part D of the CAA since no such requirements are expected to become due for the 8-hour ozone standard prior to submission of the area's redesignation request. Under part D, an area's classification (marginal, moderate, serious, severe, and extreme) indicates the requirements to which it will be subject. Subpart 1 of part D, found in sections 172-176 of the CAA, sets forth the basic nonattainment requirements applicable to all nonattainment areas. Because Allen County is a subpart 1 8-hour ozone nonattainment area and is not classified under subpart 2 of part D of the CAA for the 8-hour ozone standard, subpart 2 of part D of the CAA does not apply to this area. *Part D, Subpart 1 applicable requirements.* For purposes of evaluating this redesignation request, the applicable part D, subpart 1 requirements for all nonattainment areas are contained in section 172(c)(1)-(9). A thorough discussion of the requirements contained in section 172 can be found in the General Preamble for Implementation of Title I (57 FR 13498). [See also 68 FR 4852-3 in St. Louis NPR for discussion of section 172 requirements.] It is not anticipated that any requirements under part D will become due prior to submission of the complete redesignation request, and, therefore, none is expected to be applicable to the area for purposes of redesignation. For example, the requirement for an ozone attainment demonstration to meet the requirement of section 172(c)(1) is not yet applicable, nor are the requirements for Reasonably available Control Measures
(RACM)and Reasonably Available Control technology
(RACT)(section 172(c)(1)), Reasonable Further progress
(RFP)(section 172(c)(2)), and contingency measures section 172(c)(9)). Since it is expected that Indiana will submit a complete ozone redesignation request for Allen County prior to the deadline for any submissions, we are determining that the part D requirements do not apply to Allen County for purposes of redesignation. In addition to the fact that certain Part D requirements applicable for purposes of redesignation are not expected to be due prior to submission of the redesignation request, EPA believes it is reasonable to interpret the conformity and New Source Review requirements as not requiring approval prior to redesignation. Section 176 Conformity Requirements Section 176(c) of the CAA requires states to establish criteria and procedures to ensure the Federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects developed, funded or approved under Title 23 U.S.C. and the Federal Transit Act (“transportation conformity”) as well as to all other Federally supported or funded projects (“general conformity”). State conformity revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that the CAA required the EPA to promulgate. EPA believes it is reasonable to interpret the conformity requirements as not applying for purposes of evaluating the redesignation request under section 107(d) because state conformity rules are still required after redesignation and federal confomity rules apply where state rules have not been approved. See *Wall* v. *EPA,* 265 F.3d 426 (6th Cir. 2001), upholding this interpretation. See also 60 FR 62748 (December 7, 1995) (Tampa, FL) EPA has determined that areas being redesignated need not comply with the requirement that a New Source Review program be approved prior to redesignation, provided that the area demonstrates maintenance of the standard without part D NSR in effect. The rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” The State has demonstrated that the area will be able to maintain the standard without Part D NSR in effect, and therefore, the State need not have a fully approved Part D NSR program prior to approval of the redesignation request. The State's Prevention of Significant Deterioration
(PSD)program will become effective in the area upon redesignation to attainment. Detroit, MI (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, OH (61 FR 20458-20469-70, May 7, 1996); Louisville, KY (66 FR 53665, 53669, October 23, 2001); Grand Rapids, MI (61 FR 31831, 31836-31827, June 21, 1996). Thus, EPA finds that the area has satisfied all 8-hour ozone standard requirements applicable for purposes of section 107(d)(3)(E) under Part D of the CAA. b. *The area has a fully approved applicable SIP for purposes of redesignation under section 110(k) of the CAA.* EPA has fully approved the applicable Indiana SIP for purposes of redesignation for Allen County under section 110(k) of the Clean Air Act. EPA may rely on prior SIP approvals in approving a redesignation request. Calcagni Memo, p. 3 *Southwestern Pennsylvania Growth Alliance* v. *Browner,* 144 F.3d 984, 989-90 (6th Cir. 1998), *Wall* v. *EPA,* 265 F.3d 426 (6th Cir. 2001), plus any additional measures it may approve in conjunction with a redesignation action. See 68 FR 25426 (May 12, 2003) and citations therein. Following passage of the CAA of 1970, Indiana has adopted and submitted and EPA has fully approved at various times provisions addressing the various SIP elements applicable in the Allen County area under the one-hour ozone standard. As indicated above, EPA believes that the section 110 elements not connected with nonattainment plan submissions and not linked to the area's nonattainment status are not applicable requirements for purposes of redesignation. EPA also believes that no 8-hour Part D requirements applicable for purposes of redesignation have yet come due, and therefore they need not be approved into the SIP prior to redesignation. 3. *The air quality improvement in Allen County is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP and applicable Federal air pollution control regulations and other permanent and enforceable reductions.* EPA believes that the State of Indiana has demonstrated that the observed air quality improvement in Allen County is due to permanent and enforceable emission reductions resulting from implementation of the SIP, Federal measures, and other state-adopted measures. In making this demonstration, the State has documented the changes in VOC and NO <sup>X</sup> emissions from all anthropogenic (man-made or man-based) sources in Allen County between 1999 and 2004 and the changes in NO <sup>X</sup> emissions from Electric Generating Units
(EGUs)in Indiana between 1999 and 2005. Allen County was monitored in violation of the 8-hour ozone NAAQS in 1999 and in attainment with the NAAQS during the period of 2003 through 2005. The VOC and NO <sup>X</sup> emissions for Allen County are given in Table 2. Table 2.—VOC and NO <sup>X</sup> Emission Trends in Allen County for Anthropogenic Sources—Emissions in Tons/Summer Day Pollutant 1999 2002 2004 Percent reduction 2002 to 2004 VOC 68.65 57.16 52.28 8.5 NO <sup>X</sup> 48.87 48.75 44.94 7.8 The NO <sup>X</sup> emissions trends for EGUs for the 1999-2005 period in Indiana statewide are given in Table 3. The NO <sup>X</sup> emissions for Allen County and the statewide EGU NO <sup>X</sup> emissions have shown significant downward trends from 1999, an 8-hour standard violation year, to 2004 and 2005, attainment years. IDEM notes that the NO <sup>X</sup> emissions statewide have declined significantly as a result of the implementation of the Indiana NO <sup>X</sup> SIP and acid rain control regulations, both of which lead to permanent, enforceable emission reductions. Table 3.—NO <sup>X</sup> Emission Trends for Electric Generating Units in Indiana Statewide—Emissions in Thousands of Tons Per Ozone Season (April-October) Year 1999 2000 2001 2002 2003 2004 2005 Statewide 149.8 133.9 136.1 114.0 99.3 66.6 55.5 As noted in Table 2, the VOC emissions in Allen County have also declined between 1999 and 2004. VOC emission control measures have been implemented in Allen County. State-wide RACT rules have applied to all new sources locating in Indiana since the mid-1990s and include the following VOC control rules: 326 Indiana Administrative Code
(IAC)8-1-6 (Best Available Control Technology
(BACT)for non-specific sources); 326 IAC 8-2 (surface coating emission limitations); 326 IAC 8-3 (organic solvent degreasing operations); 326 IAC 8-4 (petroleum sources, including storage, transport, and marketing sources and petroleum refining); 326 IAC 8-5 (miscellaneous sources); and 326 IAC 8-6 (organic solvent emission limitations). Compliance with these rules has controlled point source VOC emissions in Allen County, offsetting some source growth, as well as controlling VOC emissions in the remainder of Indiana. The VOC emission reductions resulting from the implementation of the VOC emission control rules are permanent and enforceable. Since Allen County was not previously designated as a 1-hour ozone nonattainment area, no ozone precursor emission controls were specifically targeted at this County. Therefore, statewide and Federal emission control requirements have provided the majority of the VOC and NO <sup>X</sup> emission reductions in Allen County. Besides the statewide VOC RACT rules and NO <sup>X</sup> emission control requirements, other Federal emission reduction requirements have resulted in decreased ozone precursor emissions in Allen County and will produce future emission reductions that will lead to maintenance of the ozone standard in Allen County (see a more detailed discussion on maintenance of the 8-hour ozone standard in Allen County below). These emission reduction requirements include the following: *Tier 2 Emission Standards for Vehicles and Gasoline Sulfur Standards.* These emission control requirements result in lower emissions from new cars and light duty trucks, including sport utility vehicles. The Federal rules are being phased in between 2004 and 2009. The EPA has estimated that, by the end of the phase-in period, the following vehicle NO <sup>X</sup> emission reductions will occur: Passenger cars (light duty vehicles) (77 percent); light duty trucks, minivans, and sports utility vehicles (86 percent; and larger sports utility vehicles, vans, and heavier trucks (69 to 95 percent). VOC emission reductions are also expected to range from 12 to 18 percent, depending on vehicle class, over the same period. Although some of these emission reductions have already occurred by the 2004 attainment year, most of these emission reductions will occur during the maintenance period for Allen County. *Heavy-Duty Diesel Engines.* In July 2000, EPA issued a final rule to control the emissions from highway heavy duty diesel engines, including low-sulfur diesel fuel standards. These emission reductions are being phased in between 2004 and 2007. This rule is expected to result in a 40 percent decrease in NO <sup>X</sup> emissions from heavy duty diesel vehicles. *Non-Road Diesel Rule.* This rule generally applies to new stationary diesel engines used in certain industries, including construction, agriculture, and mining. In addition to affecting engine design, this rule includes requirements for cleaner fuels. This rule is expected to reduce NO <sup>X</sup> emissions from these engines by up to 90 percent, and to significantly reduce particulate matter and sulfur emissions from these engines in addition to the NO <sup>X</sup> emission reduction. This rule did not affect 2004 emissions from these sources, but will limit emissions from new engines beginning in 2008. Indiana commits to maintain all existing emission control measures that affect Allen County after this area is designated to attainment. All changes in existing rules affecting Allen County and new rules subsequently needed for continued maintenance of the 8-hour ozone NAAQS in Allen County will be submitted to the EPA for approval as SIP revisions. Based on the information summarized above, Indiana has adequately demonstrated that the improvement in air quality is due to permanent and enforceable emission reductions. 4. *The area has a fully approved maintenance plan pursuant to section 175A of the CAA.* In conjunction with its request to redesignate Allen County to attainment status, Indiana submitted a SIP revision to provide for the maintenance of the 8-hour ozone NAAQS in Allen County for 14 years after redesignation. a. What Is Required in a Maintenance Plan? Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least ten years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the State must submit a revised maintenance plan which demonstrates that attainment will continue to be maintained for the ten years following the initial ten-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain such contingency measures, with a schedule for implementation as EPA deems necessary to assure prompt correction of any future 8-hour ozone violations. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. The Calcagni memorandum dated September 4, 1992, provides additional guidance on the content of a maintenance plan. An ozone maintenance plan should address the following provisions: The attainment emissions inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. b. Attainment Emissions Inventory IDEM prepared comprehensive VOC and NO <sup>X</sup> emission inventories for Allen County, including point (significant stationary sources), area (smaller and widely-distributed stationary sources), mobile on-road, and mobile non-road sources for 2004 (the base year/attainment year). To develop the attainment year emission inventories, IDEM used the following approaches and sources of data: *Area Sources* —Area source VOC and NO <sup>X</sup> emissions were grown from Indiana's 2002 periodic emissions inventory, which was previously submitted to the EPA. *Mobile On-Road Sources* —Mobile source emissions were calculated using the MOBILE6 emission factor model and traffic data (vehicle miles traveled, vehicle speeds, and vehicle type and age distributions) extracted from the region's travel-demand model. *Point Source Emissions* —2004 point source emissions were compiled using IDEM's 2004 annual emissions statement database and the 2005 EPA Air Markets acid rain emissions inventory database. *Mobile Non-Road Emissions* —Non-road mobile source emissions were generated by the EPA and documented in the 2002 National Emissions Inventory (NEI). IDEM used these emissions estimates along with growth factors to grow the non-road mobile source emissions to 2004. To address concerns about the accuracy of some of the emissions for various source categories in EPA's non-road emissions model, the Lake Michigan Air Directors Consortium (LADCO) contracted with several companies to review the base data used by the EPA and to make recommendations for corrections to the model. Emissions were estimated for commercial marine vessels and railroads. Recreational motorboat population and spatial surrogates (used to assign emissions to each county) were updated. The populations for the construction equipment category were reviewed and updated based on surveys completed in the Midwest, and the temporal allocation for agricultural sources was also updated. The EPA provided a revised non-road estimation model for the 2002 analysis. The 2004 attainment year VOC and NO <sup>X</sup> emissions for Allen County are summarized along with the 2010 and 2020 projected emissions for this County in Tables 4 and 5 below, which provide a demonstration of maintanance of this area. It is our conclusion that the State has acceptably derived and documented the attainment year VOC and NO <sup>X</sup> emissions for Allen County. c. Demonstration of Maintenance As part of its May 30, 2006 redesignation request, IDEM included a requested revision to the SIP to incorporate a 14-year ozone maintenance plan, as required under section 175A of the CAA. Included in the maintenance plan is a maintenance demonstration. This demonstration shows maintenance of the 8-hour ozone NAAQS by documenting current and projected VOC and NO <sup>X</sup> and showing that future emissions of VOC and NO <sup>X</sup> remain at or below the attainment year emission levels. 1 Note that a maintenance demonstration need not be based on modeling. See *Wall* v. *EPA,* 265 F.3d 426 (6th Cir. 2001), *Sierra Club* v. *EPA,* 375 F.3d 537 (7th Cir. 2004). See also 66 FR 53094, 53099-53100 (October 19, 2001) and 68 FR 25430-25432 (May 12, 2003). 1 The attainment year can be any of the three consecutive years in which the area has clean (below violation level) air quality data (2003, 2004, or 2005 for Allen County). Table 4 specifies the VOC emissions in Allen County for 2004, 2010, and 2020. IDEM chose 2020 as a projection year to meet the 10-year maintenance projection requirement, allowing additional time for the State to complete its adoption of the ozone redesignation request and ozone maintenance plan and for the EPA to approve the redesignation request and maintenance plan. IDEM also chose 2010 as an interim year to demonstrate that VOC and NO <sup>X</sup> emissions will remain below the attainment levels throughout the 14-year maintenance period. Table 5, similar to Table 4, specifies the NO <sup>X</sup> emissions in Allen County for 2004, 2010, and 2020. Together, Tables 4 and 5, in terms of projected emissions, demonstrate that Allen County should remain in attainment of the 8-hour ozone NAAQS between 2004 and 2020, for more than 10 years after EPA is expected to approve the redesignation of Allen County to attainment of the 8-hour ozone NAAQS. Table 4.—Attainment Year
(2004)and Projected VOC Emissions in Allen County (Tons per Summer Day) Source sector Year 2004 2010 2020 Point 9.33 7.91 9.74 Area 18.99 20.00 22.17 On-Road Mobile 13.86 9.14 5.57 Off-Road Mobile 10.10 7.02 6.57 Total 52.28 44.07 44.05 Table 5.—Attainment Year and Projected NO <sup>X</sup> Emissions in Allen County (Tons per Summer Day) Source sector Year 2004 2010 2020 Point 4.88 4.69 4.78 Area 3.89 4.09 4.33 On-Road Mobile 23.17 14.57 6.19 Off-Road Mobile 13.01 9.84 6.98 Total 44.95 33.19 22.28 IDEM also notes that Indiana's and 21 other states' EGU NO <sup>X</sup> emission control rules stemming from EPA's NO <sup>X</sup> SIP call and CAIR, to be implemented beginning in 2006, will further lower NO <sup>X</sup> emissions in upwind areas, resulting in decreased ozone and ozone precursor transport into Allen County (the State did not project emission decreases resulting from CAIR and did not document future NO <sup>X</sup> emissions in upwind counties). This will also support maintenance of the ozone standard in Allen County. The emission projections for Allen County coupled with the expected impacts of the State's EGU NO <sup>X</sup> rules and CAIR lead to the conclusion that Allen County should maintain the 8-hour ozone standard throughout the 14-year maintenance period. The decrease in local VOC and local and regional NO <sup>X</sup> emissions indicate that peak ozone levels in Allen County may actually further decline during the 14-year ozone maintenance period. IDEM has documented some of the procedures used to project emissions. On-road mobile sources were projected using the MOBILE6 emission factor model and projected traffic data obtained from the Northwest Indiana Regional Planning Commission (NIRPC), who maintains a travel demand forecast model that is capable of projecting changes in total daily Vehicle Miles Traveled (VMT). Emissions for the other major source sectors were determined using source activity/growth data provided by the Lake Michigan Air Director's Consortium, as well as major source emissions data obtained periodically for all major sources statewide. Emissions projections for Allen County are consistent with the planning analyses being conducted to attain the 8-hour ozone and fine particle (PM <sup>2.5</sup> ) standards throughout Indiana and throughout the Lake Michigan area. Based on the comparison of the projected emissions and the attainment year emissions, we conclude that IDEM has successfully demonstrated that the 8-hour ozone standard should be maintained in Allen County. We believe that this is especially likely given the expected impacts of the NO <sup>X</sup> SIP call and CAIR. As noted by IDEM, this conclusion is further supported by the fact that other states in the eastern portion of the United States are expected to further reduce regional NO <sup>X</sup> emissions through implementation of their own NO <sup>X</sup> emission control rules for EGUs and other NO <sup>X</sup> sources and through implementation of CAIR. d. Monitoring Network IDEM commits to continue operating and maintaining an approved ozone monitoring network in Allen County, in accordance with 40 CFR part 58, throughout the 14-year maintenance period. This will allow the confirmation of the maintenance of the 8-hour ozone standard in this area. e. Verification of Continued Attainment Continued attainment of the 8-hour ozone NAAQS in Allen County depends, in part, on the State's efforts toward tracking applicable indicators during the maintenance period. The State's plan for verifying continued attainment of the 8-hour ozone standard in Allen County consists of plans to continue ambient ozone monitoring in accordance with the requirements of 40 CFR part 58. In addition, IDEM will periodically revise and review the VOC and NO <sup>X</sup> emissions inventories for Allen County to assure that emissions growth is not threatening the continued attainment of the 8-hour ozone standard in this area. Revised emission inventories for this area will be prepared for 2005, 2008, and 2011 as necessary to comply with the emission inventory reporting requirements established in the CAA. The revised emissions will be compared with the 2004 attainment emissions and the 2020 projected maintenance year emissions to assure continued maintenance of the ozone standard. f. Contingency Plan The contingency plan provisions of the CAA are designed to result in prompt correction or prevention of violations of the NAAQS that might occur after redesignation of an area to attainment of the NAAQS. Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to assure that the State will promptly correct a violation of the NAAQS that might occur after redesignation. The maintenance plan must identify the contingency measures to be considered for possible adoption, a schedule and procedure for adoption and implementation of the selected contingency measures, and a time limit for action by the State. The State should also identify specific indicators to be used to determine when the contingency measures need to adopted and implemented. The maintenance plan must include a requirement that the State will implement all measures with respect to control of the pollutant(s) that were controlled in the SIP before the redesignation of the area to attainment. See section 175A(d) of the CAA. As required by section 175A of the CAA, Indiana has adopted a contingency plan to address a possible future ozone air quality problem. The contingency plan that Indiana has adopted has two levels of actions/responses depending on whether a violation of the 8-hour ozone standard is only threatened (Warning Level Response) or has actually occurred (Action Level Response). A Warning Level Response will be prompted whenever an annual (1-year) fourth-high monitored daily peak 8-hour ozone concentration of 89 ppb (or greater) occurs at any monitor in Allen County, or a 2-year averaged annual fourth-high daily peak 8-hour ozone concentration of 85 ppb or greater occurs at any monitor in Allen County. A Warning Level Response will consist of a study to determine whether the monitored ozone level indicates a trend toward higher ozone levels or whether emissions are increasing, threatening a future violation of the ozone NAAQS. The study will evaluate whether the trend, if any, is likely to continue, and, if so, the emission control measures necessary to reverse the trend, taking into consideration the ease and timing of implementation, as well as economic and social considerations, will be selected, adopted, and implemented. Implementation of necessary controls will take place as expeditiously as possible, but in no event later than 12 months from the conclusion of the most recent ozone season. If new emission controls are needed to reverse the adverse ozone trend, the procedures for emission control selection under the Action Level Response will be followed. An Action Level Response will occur (be triggered) when a violation of the 8-hour ozone standard is monitored at any of the monitors in Allen County (when a 3-year average annual fourth-high monitored daily peak 8-hour ozone concentration of 85 ppb is recorded at any monitor in Allen County). In this situation, IDEM will determine the additional emission control measures needed to assure future attainment of the 8-hour ozone NAAQS. IDEM will focus on emission control measures that can be implemented within 18 months from the close of the ozone season in which the ozone standard violation is monitored. Adoption of any additional emission control measures prompted by either of the two response levels will be subject to the necessary administrative and legal process dictated by State law. This process will include publication of public notices, providing the opportunity for a public hearing, and other measures required by Indiana law for rulemaking by State environmental boards. If a new State emission control measure is already promulgated and scheduled for implementation at the Federal or State level, and that emission control is determined to be sufficient to address the air quality problem or adverse trend, additional local emission control measures may be determined to be unnecessary. IDEM will submit to the EPA an analysis to demonstrate that the proposed emission control measures are adequate to provide for future attainment of the 8-hour ozone NAAQS in Allen County. Contingency measures contained in the maintenance plan are those emission controls or other measures that the State may choose to adopt and implement to correct existing or possible air quality problems in Allen County. These include, but are not limited to, the following: i. Lower Reid vapor pressure gasoline requirements; ii. Broader geographic applicability of existing emission control measures; iii. Tightened RACT requirements on existing sources covered by EPA Control Technique Guidelines
(CTGs)issued in response to the 1999 CAA amendments; iv. Application of RACT to smaller existing sources; v. Vehicle Inspection and Maintenance (I/M); vi. One or more Transportation Control Measure
(TCM)sufficient to achieve at least a 0.5 percent reduction in actual area-wide VOC emissions, to be selected from the following: A. Trip reduction programs, including, but not limited to, employer-based transportation management plans, area-wide rideshare programs, work schedule programs, and telecommuting; B. Transit improvement; C. Traffic flow improvements; and D. Other new or innovative transportation measures not yet in widespread use that affect State and local governments as deemed appropriate; vii. Alternative fuel and diesel retrofit programs for fleet vehicle operations; viii. Controls on consumer products consistent with those adopted elsewhere in the United States; ix. VOC or NO <sup>X</sup> emission offsets for new or modified major sources; x. VOC or NO <sup>X</sup> emission offsets for new or modified minor sources; xi. Increased ratio of emission offset required for new sources; and xii. VOC or NO <sup>X</sup> emission controls on new minor sources (with VOC or NO <sup>X</sup> emissions less than 100 tons per year). g. Provisions for a Future Update of the Ozone Maintenance Plan As required by section 175A(b) of the CAA, the State commits to submit to the EPA an update of the ozone maintenance plan eight years after redesignation of Allen County to attainment of the 8-hour ozone NAAQS. The updated maintenance plan would provide for maintenance of the 8-hour ozone standard in Allen County for an additional 10 years beyond the period covered by the initial ozone maintenance plan. EPA has concluded that the maintenance plan adequately addresses the five basic components of a maintenance plan: attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. The maintenance plan submitted by Indiana meets the requirements of section 175A of the CAA. VII. Has Indiana Adopted Acceptable Motor Vehicle Emissions Budgets for the End of the 14-Year Maintenance Plan Which Can Be Used To Support Conformity Determinations? A. How Are the Motor Vehicle Emission Budgets Developed and What Are the Motor Vehicle Emission Budgets for Allen County? Under the CAA, states are required to submit, at various times, SIP revisions and ozone maintenance plans for applicable areas (for ozone nonattainment areas and for areas seeking redesignations to attainment of the ozone standard or revising existing ozone maintenance plans). These emission control SIP revisions (e.g., reasonable further progress and attainment demonstration SIP revisions), including ozone maintenance plans, must create MVEBs based on on-road mobile source emissions that are allocated to highway and transit vehicle use that, together with emissions from other sources in the area, will provide for attainment or maintenance of the ozone NAAQS. Under 40 CFR part 93, MVEBs for an area seeking a redesignation to attainment of the NAAQS are established for the last year of the maintenance plan. The MVEBs serve as ceilings on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993 transportation conformity rule (58 FR 62188). The preamble also describes how to establish the MVEBs in the SIP and how to revise the MVEBs if needed. Under section 176(c) of the CAA, new transportation projects, such as the construction of new highways, must “conform” to (i.e., be consistent with) the part of the SIP that addresses emissions from cars and trucks. Conformity to the SIP means that transportation activities will not cause new air quality standard violations, or delay timely attainment of the NAAQS. If a transportation plan does not conform, most new transportation projects that would expand the capacity of roadways cannot go forward. Regulations at 40 CFR part 93 set forth EPA's policy, criteria, and procedures for demonstrating and assuring conformity of transportation activities to a SIP. When reviewing SIP revisions containing MVEBs, including attainment strategies, rate-of-progress plans, and maintenance plans, EPA must affirmatively find that the MVEBs are “adequate” for use in determining transportation conformity. Once EPA affirmatively finds the submitted MVEBs to be adequate for transportation conformity purposes, the MVEBs are used by state and Federal agencies in determining whether proposed transportation projects conform to the SIPs as required by section 176(c) of the CAA. EPA's substantive criteria for determining the adequacy of MVEBs are specified in 40 CFR 93.118(e)(4). EPA's process for determining adequacy of MVEBs consists of three basic steps:
(1)Providing public notification of a SIP submission;
(2)providing the public the opportunity to comment on the MVEBs during a public comment period; and
(3)EPA's finding of adequacy. The process of determining the adequacy of submitted SIP MVEBs was initially outlined in EPA's May 14, 1999 guidance, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision.” This guidance was finalized in the Transportation Conformity Rule Amendments for the “New 8-Hour Ozone and PM2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas: Transportation Conformity Rule Amendments—Response to Court Decision and Additional Rule Change” published on July 1, 2004 (69 FR 40004). EPA follows this guidance and rulemaking in making its adequacy determination. The Transportation Conformity rule in section 93.118(f) provides for adequacy findings through two mechanisms. Section 93.118(f)(1) provides for posting a notice to the EPA conformity Web site at: * http://www.epa.gov/otaq/stateresources/ transconf/adequacy.htm * and providing a 30 day public comment period. The second mechanism is described in section 93.118(f)(2) which provides that EPA can review the adequacy of an implementation plan submission simultaneously with EPA's approval or disapproval of the implementation plan. In this notice, EPA is simultaneously reviewing the adequacy of the motor vehicle emission budgets as part of this review and proposal on the overall maintenance plan. Indiana has requested parallel processing and the expediency of the process is best suited to following section 93.118(f)(2). The Allen County 14-year maintenance plan contains VOC and NO <sup>X</sup> MVEBs for 2020. EPA has reviewed the submittal and the VOC and NO <sup>X</sup> MVEBs for Allen County and finds that the budgets meet the adequacy criteria in the Transportation Conformity rule. The 30-day comment period for adequacy will be the same as the comment period for approval of the budgets and maintenance plan. Any and all comments on the adequacy or approvability of the budgets should be submitted during the comment period stated in the DATES section of this notice. EPA, through this rulemaking is approving the MVEBs for use to determine transportation conformity in Allen County because EPA has determined that the budgets are consistent with the control measures in the SIP and that Allen County can maintain attainment of the 8-hour ozone NAAQS for the relevant required 14-year period with mobile source emissions at the levels of the MVEBs. IDEM has determined the 2020 MVEBs for Allen County to be 6.5 tons per day for VOC and 7.0 tons per day for NO <sup>X</sup> . It should be noted that these MVEBs exceed the on-road mobile source VOC and NO <sup>X</sup> emissions projected by IDEM for 2020, as summarized in Tables 4 and 5 above (“On-Road Mobile” source sector). Through discussions with all organizations involved in transportation planning for Allen County, IDEM decided to include safety margins of 0.93 tons per day for VOC and 0.81 tons per day for NO <sup>X</sup> in the MVEBs to provide for mobile source growth not anticipated in the projected 2020 emissions. Indiana has demonstrated that Allen County can maintain the 8-hour ozone NAAQS with mobile source emissions of 5.57 tons per day of VOC and 6.19 tons per day of NO <sup>X</sup> in 2020 since total source emissions will remain under the attainment year levels. B. What Is a Safety Margin? A “safety margin” is the difference between the attainment level of emissions (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. As noted in Tables 4 and 5, Allen County VOC and NO <sup>X</sup> emissions are projected to have safety margins of 8.23 tons per day for VOC and 22.66 tons per day for NO <sup>X</sup> in 2020 (the difference between the 2004, attainment year, and 2020 VOC and NO <sup>X</sup> emissions for all sources in Allen County). The MVEBs requested by IDEM contain safety margins (selected by the State) significantly smaller than the safety margins reflected in the total emissions for Allen County. The State is not requesting allocation of the entire available safety margins actually reflected in the demonstration of maintenance (in Tables 4 and 5). Therefore, even though the State is requesting MVEBs that exceed the on-road mobile source emissions for 2020 contained in the demonstration of maintenance, the increase in on-road mobile source emissions that can be considered for transportation conformity purposes is well within the safety margins of the ozone maintenance demonstration. C. Are the MVEBs Approvable? The VOC and NO <sup>X</sup> MVEBs for Allen County are approvable because they maintain the total emissions for Allen County at or below the attainment year emission inventory levels, as required by the transportation conformity regulations. VIII. What Is the Effect of EPA's Actions? EPA is making a determination that Allen County has attained the 8-hour ozone NAAQS, and EPA is approving the redesignation of Allen County from nonattainment to attainment for the 8-hour ozone NAAQS. After evaluating Indiana's redesignation request, EPA is making a determination that it meets the redesignation criteria set forth in section 107(d)(3)(E) of the CAA. Final approval of this redesignation request would change the official designation for Allen County from nonattainment to attainment for the 8-hour ozone standard. EPA is also approving the maintenance plan SIP revision for Allen County. The approval of the maintenance plan is based on Indiana's demonstration that the plan meets the requirements of section 175A of the CAA, as described more fully above. Additionally, EPA is finding adequate and approving the 2020 MVEBs submitted by Indiana in conjunction with the redesignation request. IX. Statutory and Executive Order Reviews Executive Order 12866; Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). Regulatory Flexibility Act This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Unfunded Mandates Reform Act Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Order 13175 Consultation and Coordination With Indian Tribal Governments This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (59 FR 22951, November 9, 2000). Executive Order 13132 Federalism This action also does not have Federalism implications because it does not 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, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Executive Order 13045 Protection of Children From Environmental Health and Safety Risks This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. National Technology Transfer Advancement Act In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. Paperwork Reduction Act This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 30, 2006. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Intergovernmental relations, Nitrogen dioxide, Ozone, Volatile organic compounds. Dated: August 16, 2006. Bharat Mathur, Acting Regional Administrator, Region 5. Parts 52 and 81, chapter I, title 40 of the Code of Federal Regulations is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart P—Indiana 2. Section 52.777 is amended by adding paragraph
(ff)to read as follows: § 52.777 Control strategy: photochemical oxidants (hydrocarbons).
(ff)Approval—On May 30, 2006, Indiana submitted a request to redesignate Allen County to attainment of the 8-hour ozone National Ambient Air Quality Standard. As part of the redesignation request, the State submitted a maintenance plan as required by section 175A of the Clean Air Act. Elements of the section 175 maintenance plan include a contingency plan and an obligation to submit a subsequent maintenance plan revision in 8 years as required by the Clean Air Act. Also included were motor vehicle emission budgets for use to determine transportation conformity in Allen County. The 2020 motor vehicle emission budgets are 6.5 tons per day for VOC and 7.0 tons per day for NO <sup>X</sup> . PART 81—[AMENDED] 1. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 et seq. 2. Section 81.315 is amended by revising the entry for Fort Wayne, IN: Allen County in the table entitled “Indiana Ozone (8-Hour Standard)” to read as follows: § 81.315 Indiana. Indiana Ozone (8-Hour Standard) Designated area Designation a Date 1 Type Classification Date 1 Type * * * * * * * Fort Wayne, IN: Allen County September 29, 2006 Attainment * * * * * * * a Includes Indian Country located in each county or area, except as otherwise specified. 1 This date is June 15, 2004, unless otherwise noted. [FR Doc. 06-7248 Filed 8-29-06; 8:45 am]
Connectionstraces to 39
Traces to 39 documents
U.S. Code
- Congressional findings and declaration of purpose§ 1693
- Civil liability§ 1693m
- Definitions§ 601
- Avoidance of duplicative or unnecessary analyses§ 605
- Regulations§ 1693b
- Federal agency responsibilities§ 3506
- Federal Aviation Administration§ 106
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Rules and regulations§ 7805
- Trade or business expenses§ 162
- Policy regarding identification of gender or personal pronouns in official correspondence§ 986
- Definitions§ 802
- Rule making§ 553
- Establishment, functions, and activities§ 272
- Regulations for drawbridges§ 499
- Purposes§ 3501
- Initial regulatory flexibility analysis§ 603
- SHORT TITLE.§ 801
- EXPEDITED PROCESSING OF REQUESTS FOR JAPANESE IMPERIAL GOVERNMENT RECORDS.§ 804
- Emission standards for new motor vehicles or new motor vehicle engines§ 7521
- Administrative proceedings and judicial review§ 7607
- SHORT TITLE.§ 9701
- Congressional declaration of goals and policy§ 1251
- Research and investigations generally§ 241
- Congressional findings and declaration of purpose§ 7401
CFR
- Coverage.§ 205.3
- Designation of applicable regulations.§ 21.101
- Special conditions.§ 21.16
- What public comment procedures does the FAA follow for Special Conditions?§ 11.38
- May I address the unsafe condition in a way other than that set out in the airworthiness directive?§ 39.19
- When does FAA issue airworthiness directives?§ 39.5
- Delegation of rulemaking authority.§ 1.05-1
- What size standards has SBA identified by North American Industry Classification System codes?§ 121.201
- National 8-hour primary and secondary ambient air quality standards for ozone.§ 50.10
45 references not yet in our index
- 12 CFR 205
- 5 CFR 1320
- 15 USC 1603b
- 14 CFR 23
- 14 CFR 39
- 1 CFR 51
- 14 CFR 95
- 26 CFR 1
- T.D. 9282
- 115 Stat. 38
- Rev. Rul. 2001-6
- 329 F.3d 751
- 292 U.S. 62
- 32 CFR 154
- Pub. L. 104-4
- Pub. L. 96-354
- Pub. L. 96-511
- 33 CFR 117
- 5 USC 601-612
- Pub. L. 104-121
- 44 USC 3501-3520
- 2 USC 1531-1538
- 42 USC 4321-4370f
- Pub. L. 102-587
- 106 Stat. 5039
- 5 CFR 1320.11
- 40 CFR 2
- 40 CFR 1039.240
- 40 CFR 1065
- 40 CFR 9
- Pub. L. 104-113
- 40 CFR 86
- 7 USC 135
- 15 USC 2001
- 21 USC 331j
- 42 USC 7401-7671q
- 40 CFR 85
- 40 CFR 50
- 40 CFR 58
- 375 F.3d 537
+ 5 more
Citation graph
cites case law
Rules and Regulations
Interim final rule; request for public comment
F. App'x329 F.3d 751
SCOTUS292 U.S. 62
F. App'x375 F.3d 537
Cites 84 · showing 12Cited by 0 across 0 sources