Rules and Regulations. Final regulations
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BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 301 [TD 9284] RIN 1545-BC72 Collection After Assessment AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. SUMMARY: This document contains final regulations relating to the collection of tax liabilities after assessment. The regulations reflect changes to the law made by the Internal Revenue Service Restructuring and Reform Act of 1998. These regulations affect persons determining how long the Internal Revenue Service has to collect taxes that have been properly assessed.
DATES: *Effective Date:* These regulations are September 6, 2006. FOR FURTHER INFORMATION CONTACT: Debra A. Kohn,
(202)622-7985 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background This document contains amendments to the Procedure and Administration Regulations (26 CFR part 301) under section 6502 of the Internal Revenue Code (Code). The regulations reflect the amendment of the Code by section 3461 of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998), Public Law 105-206 (112 Stat. 685, 764). On March 4, 2005, a notice of proposed rulemaking (REG-148701-03) relating to collection after assessment was published in the **Federal Register** (70 FR 10572). No public hearing was requested or held. Written and electronic comments responding to the notice of proposed rulemaking were received. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision. The revisions are discussed in this preamble. Collection of Tax Liabilities After Assessment Under Section 6502 Pursuant to section 6502 of the Code, the IRS generally has 10 years from the date of assessment to collect a timely assessed tax liability. Prior to January 1, 2000, the effective date of section 3461 of RRA 1998, section 6502 permitted the IRS to enter into agreements with the taxpayer to extend the period of limitations on collection at any time prior to the expiration of the period provided in section 6502. Prior to the enactment of RRA 1998, the IRS used these collection extension agreements, or waivers, in various circumstances to protect its ability to collect a tax liability beyond the original 10-year period of limitations on collection. For example, the IRS historically conditioned consideration of an offer in compromise upon the execution of a collection extension agreement or waiver. In addition, the Code contains several provisions that operate to toll the period of limitations on collection upon the occurrence of certain events. For example, section 6331(k) operates in part to suspend the period of limitations on collection for the period of time during which an offer in compromise is pending, for 30 days after rejection, and while a timely filed appeal is pending. Similarly, section 6503(h) operates to suspend the period of limitations on collection for the period of time during which the IRS is prohibited from collecting a tax due to a bankruptcy proceeding, and for 6 months thereafter. These statutory suspension provisions toll the period of limitations on collection even if the period of limitations on collection previously has been extended pursuant to an executed collection extension agreement. See *Klingshirn* v. *United States (In re Klingshirn* ), 147 F.3d 526 (6th Cir. 1998). Section 3461 of RRA 1998 amended section 6502 of the Code to limit the ability of the IRS to enter into agreements extending the period of limitations on collection. Section 3461 of RRA 1998 also included an off-Code provision governing the continued effect of collection extension agreements executed on or before December 31, 1999. Summary of Comments and Explanation of Provisions The final regulations incorporate the amendments made by section 3461 of RRA 1998. The regulations provide that the IRS may enter into an agreement to extend the period of limitations on collection if an extension agreement is executed:
(1)At the time an installment agreement is entered into; or
(2)prior to release of a levy pursuant to section 6343, if the release occurs after the expiration of the original period of limitations on collection. One set of comments received in response to the notice of proposed rulemaking recommended that the final regulations:
(1)Deem void all waivers signed prior to January 1, 2000, in conjunction with installment agreements that did not provide for payment in full of the underlying tax liability by the extended collection statute expiration date; and
(2)provide that all taxpayers who have made payments since December 31, 2002, on such installment agreements are entitled to a refund of such payments. Because such provisions are beyond the scope of the underlying statute, they are not included in the final regulations. Another set of comments received in response to the notice of proposed rulemaking concerned an inconsistency between the language of section 3461(c)(2) and a proposed alternative date of expiration for extension agreements made on or before December 31, 1999. The notice of proposed rulemaking provided that extension agreements executed on or before December 31, 1999, other than those executed in connection with installment agreements, expire on the later of:
(1)December 31, 2002, or if earlier, the date on which the extension agreement expired by its terms; or
(2)the end of the original 10-year statutory period. The comments reflect that the language of the proposed regulations is inconsistent with the language of the statute. Few cases exist in which waivers executed on or before December 31, 1999, are still open under the statutory framework. Thus, there is no longer a need to address this provision in final regulations. To the extent that the notice of proposed rulemaking differs from the final regulations, it is withdrawn as of the effective date of the final regulations. 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 these 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 notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Drafting Information The principal author of these regulations is Debra A. Kohn of the Office of the Associate Chief Counsel (Procedure and Administration), Collection, Bankruptcy & Summonses Division. List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 301 is amended as follows: PART 301—PROCEDURE AND ADMINISTRATION **Paragraph 1.** The authority citation for part 301 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 301.6502-1 is revised to read as follows: § 301.6502-1 Collection after assessment.
(a)*General rule.* In any case in which a tax has been assessed within the applicable statutory period of limitations on assessment, a proceeding in court to collect the tax may be commenced, or a levy to collect the tax may be made, within 10 years after the date of assessment.
(b)*Agreement to extend the period of limitations on collection.* The Secretary may enter into an agreement with a taxpayer to extend the period of limitations on collection in the following circumstances:
(1)*Extension agreement entered into in connection with an installment agreement.* If the Secretary and the taxpayer enter into an installment agreement for the tax liability prior to the expiration of the period of limitations on collection, the Secretary and the taxpayer, at the time the installment agreement is entered into, may enter into a written agreement to extend the period of limitations on collection to a date certain. A written extension agreement entered into under this paragraph shall extend the period of limitations on collection until the 89th day after the date agreed upon in the written agreement.
(2)*Extension agreement entered into in connection with the release of a levy under section 6343.* If the Secretary has levied on any part of the taxpayer's property prior to the expiration of the period of limitations on collection and the levy is subsequently released pursuant to section 6343 after the expiration of the period of limitations on collection, the Secretary and the taxpayer, prior to the release of the levy, may enter into a written agreement to extend the period of limitations on collection to a date certain. A written extension agreement entered into under this paragraph shall extend the period of limitations on collection until the date agreed upon in the extension agreement.
(c)*Proceeding in court for the collection of the tax.* If a proceeding in court for the collection of a tax is begun within the period provided in paragraph
(a)of this section (or within any extended period as provided in paragraph
(b)of this section), the period during which the tax may be collected by levy is extended until the liability for the tax or a judgment against the taxpayer arising from the liability is satisfied or becomes unenforceable.
(d)*Effect of statutory suspensions of the period of limitations on collection if executed collection extension agreement is in effect.*
(1)Any statutory suspension of the period of limitations on collection tolls the running of the period of limitations on collection, as extended pursuant to an executed extension agreement under paragraph
(b)of this section, for the amount of time set forth in the relevant statute.
(2)The following example illustrates the principle set forth in this paragraph (d): Example. In June of 2003, the Internal Revenue Service
(IRS)enters into an installment agreement with the taxpayer to provide for periodic payments of the taxpayer's timely assessed tax liabilities. At the time the installment agreement is entered into, the taxpayer and the IRS execute a written agreement to extend the period of limitations on collection. The extension agreement executed in connection with the installment agreement operates to extend the period of limitations on collection to the date agreed upon in the extension agreement, plus 89 days. Subsequently, and prior to the expiration of the extended period of limitations on collection, the taxpayer files a bankruptcy petition under chapter 7 of the Bankruptcy Code and receives a discharge from bankruptcy a few months later. Assuming the tax is not discharged in the bankruptcy, section 6503(h) of the Internal Revenue Code operates to suspend the running of the previously extended period of limitations on collection for the period of time the IRS is prohibited from collecting due to the bankruptcy proceeding, and for 6 months thereafter. The new expiration date for the IRS to collect the tax is the date agreed upon in the previously executed extension agreement, plus 89 days, plus the period during which the IRS is prohibited from collecting due to the bankruptcy proceeding, plus 6 months.
(e)*Date when levy is considered made.* The date on which a levy on property or rights to property is considered made is the date on which the notice of seizure required under section 6335(a) is given.
(f)*Effective date.* This section is applicable on September 6, 2006. Mark E. Matthews, Deputy Commissioner for Services and Enforcement. Approved: August 22, 2006. Eric Solomon, Acting Deputy Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E6-14610 Filed 9-5-06; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF JUSTICE Office of Justice Programs 28 CFR Part 94 [Docket No.: OJP (OJP)—1368] RIN 1121-AA63 International Terrorism Victim Expense Reimbursement Program AGENCY: Office of Justice Programs, Justice. ACTION: Final rule. SUMMARY: The Office of Justice Programs (“OJP”) is finalizing the following regulation with minor modifications as a result of comments concerning the original notice of proposed rulemaking published at 70 FR 49518-49525, on August 24, 2005. This regulation implements provisions of the Victims of Crime Act of 1984 (the “VOCA”) (42 U.S.C. 10601 *et seq.* ), which authorize the Director of the Office for Victims of Crime (“OVC”), a component of OJP, to establish an International Terrorism Victim Expense Reimbursement Program (hereinafter referred to as the “ITVERP”) to reimburse eligible “direct” victims of acts of international terrorism that occur outside the United States for “expenses associated with that victimization.” DATES: This final rule is effective October 6, 2006. FOR FURTHER INFORMATION CONTACT: Barbara Walker, Senior Policy Analyst, Office for Victims of Crime, Office of Justice Programs, U.S. Department of Justice, 810 Seventh Street, NW., Washington, DC 20531; by telephone, at: 1-800-363-0441; or by e-mail, at: *ITVERP@usdoj.gov.* SUPPLEMENTARY INFORMATION: As authorized by the VOCA, OVC generally provides Federal financial assistance to states for the purpose of compensating and assisting victims of crime, provides funds for training and technical assistance services for victims of Federal crime, and provides funding and services for victims of terrorism and mass violence. This program is funded by fines, fees, penalty assessments, and bond forfeitures paid by federal offenders, as well as gifts from private individuals, deposited into the Crime Victims Fund in the U.S. Treasury. On August 24, 2005, at 70 FR 49518, OJP published a proposed rule to implement the provisions of the (ITVERP). All comments concerning this rule were to be received by October 22, 2005. As a result of that publication, OVC received sixteen public comments. Eight of the comments came from individuals who had been victims of acts of international terrorism that occurred abroad. Two came from national victim assistance organizations, one of which represents the VOCA-funded victim assistance organizations in the fifty-six relevant jurisdictions. Three comments were from individual state victim compensation boards, one was from a Federal agency, one was from a professional trade organization, and one was from an interested individual. Other than a few syntactical or grammatical changes of a technical, non-substantive nature, after careful review of all comments, OVC has made only two minor modifications, clarifying the definition of “victim” in § 94.12(u)(2) (reworded to clarify which persons may be considered victims) and expanding the definition of “collateral source” in 94.12(c)(2). OVC offers the following issue analysis to provide additional details on the purpose and operation of the ITVERP. Twelve individuals or representatives of groups submitted comments regarding the scope of coverage of the program. These comments generally asked for the coverage of the program to be expanded in various ways. As detailed below, OVC thoughtfully considered each of these comments. As noted in the Notice of Proposed Rulemaking, OVC recognizes that little or no support may be given by other countries to American nationals who are victims of acts of international terrorism events that occur abroad and that state programs differ in how they treat residents who are victimized abroad. Moreover, victims of acts of international terrorism that occur outside the United States face unique obstacles in securing assistance and support. Against this background of variation in compensation levels, the authorizing statute indicates that the major purpose of the ITVERP is to reimburse “victims of acts of international terrorism that occur outside the United States for *expenses* associated with that victimization” (42 U.S.C. 10603c(b) (emphasis added)). Thus, the program—by statute—is intended to ensure a basic level of support for immediate and out-of-pocket expenses associated with such victimization. OVC also wishes to note that the ITVERP will cover a broader range of expenses than the types of emergency expenses that have been provided to date through the existing discretionary program operated by the FBI in conjunction with the Department of State and OVC. Some emergency claims that were previously denied may thus fall within the ITVERP's scope. Therefore, victims who have received prior emergency assistance may wish to review their prior payments in relation to the limits established by this program, and submit such additional claims to the ITVERP, if warranted. Additional Categories and Increased Limits Eight of the comments requested an expansion of the categories of reimbursable expenses, and one requested an increase of the limits of the existing categories. Requests for specific types of expenses are discussed below, but, as noted above, the goal of the program—by statute—is to provide a basic level of support for American nationals who are victims of acts of international terrorism that occur outside the United States. OVC encourages victims to avail themselves of additional sources of compensation, which may include reimbursements either from other sources above the ITVERP limitations or for categories of expenses not covered by the ITVERP. Closely adhering to the statutory mandate of reimbursement for expenses provides greater stability to the program. By keeping the ITVERP focused on direct, out-of-pocket expenses, consistent with the statutory authorization, OVC can ensure that funding will be available for all victims in the dreadful event that another act of international terrorism should occur overseas involving a large number of eligible victims. Lost Wages and Loss of Support Seven comments requested that the program be expanded to include lost wages among the reimbursable expenses. This request was often coupled with a request that the program cover loss of support. Three of these comments came from state victim compensation boards, two came from national victim assistance organizations, one came from a Federal agency, and one came from an injured victim. Three of the comments noted that although states (which cover lost wages and loss of support) are not required to compensate victims of international terrorism, many continue to do so. Thus, they conclude, such victims will need to apply to both State and Federal programs to receive compensation in those categories. The commenters point out, however, that not all state programs provide the same level of compensation. As designed by OVC, the ITVERP sets a standard level of expense reimbursement assistance, but allows a victim to seek assistance from several sources, which necessarily means filing a claim or application for each source. Inasmuch as the program—by statute—is not intended to be comprehensive, of necessity it does not foreclose access to other sources of support or compensation. Although states are no longer required by the VOCA to provide assistance to victims of acts of international terrorism that occur outside the United States, they certainly may do so. In particular, states may offer compensation beyond the limits set by the ITVERP, or they may choose to fund categories of expenses not considered reimbursable under the ITVERP, such as lost wages and loss of support. As with noneconomic losses (such as pain and suffering or attorney's fees), lost wages and loss of support are not immediate and out-of-pocket expenses, and thus, by statute, are not covered under the ITVERP. Family Members Four comments (two by state victim compensation boards, one by a national victim assistance group, and one by a federal agency) either asked for clarification of the intended coverage for family members or suggested that the ITVERP's scope be expanded to define additional family members as victims. Although state compensation statutes tend to define a wider range of family members as victims, the ITVERP's authorizing statute clearly limits reimbursement to victims who “suffered direct physical or emotional injury or death” (42 U.S.C. 10603c(a)(3)(A)(i)). These “direct victims” may be reimbursed for expenses in any category up to the allowable cap. In limited circumstances, as noted in the statute (42 U.S.C. 10603c(a)(3)(B)), and clarified in the regulation's definitions (§ 94.12(u)(2)), the following family members of persons who “suffered direct physical or emotional injury or death” may be considered victims in their own right:
(1)Spouse;
(2)children;
(3)parents;
(4)siblings; and
(5)other persons at the discretion of the Director, provided such persons have established sufficient ties to the direct victim. (An example of an “other person” might be a grandparent who had been rearing a child who was killed in an act of international terrorism.) This expansion of the definition of victim occurs only in the following three circumstances:
(1)When the direct victim dies as a result of the act of terrorism;
(2)when the direct victim is under 18 years of age (or is incompetent or incapacitated) at the time of the act of terrorism; or
(3)when the direct victim is rendered incompetent or incapacitated at the time or as a result of the act of terrorism. Because of the expense-based nature of the program, these additional victims would directly qualify only for mental health care, within the ITVERP limits. Nevertheless, a family member who is considered a victim in his own right, and thus able to file a claim for mental health counseling, may also file a claim on behalf of the direct victim if he is also the victim's representative ( *i.e.* , a family member or legal guardian authorized to file the claim). Aside from close family members who may be considered victims in their own right (see 42 U.S.C. 10603c(a)(3)(B)), family members or others may be reimbursed for expenses paid on behalf of the direct victim. Although the direct victim or one family member (or legal guardian) will be authorized to file the actual claim and receive the reimbursement, the funds may then be distributed among others who have paid for reimbursable expenses on behalf of the direct victim. Thus, for example, one family member may pay the victim's medical expenses, another may pay travel expenses for the victim, and a third may file the claim as the victim's representative. The family member filing the claim would receive the reimbursement under the ITVERP and would then act as a fiduciary to distribute the money to the appropriate family members who had actually paid the expenses. A brief example may help to further illustrate. Suppose an individual were injured in a qualifying act of international terrorism. If the victim were not younger than 18 years of age, incompetent, incapacitated, or deceased, a single claim for reimbursable expenses could be filed by either the victim or the victim's representative. This claim could include reimbursable expenses actually paid by one or more other individuals, such as medical expenses or the travel expenses of up to two family members to assist the victim in the country where the act of terrorism took place. Although such expenses were initially paid by others, the claim for reimbursement would be based on the injury suffered by the person who is the direct victim. Other family members, such as the spouse, children, or parents of the victim, would not be eligible to file a claim on their own behalf for mental health counseling or other assistance. If the direct victim were younger than 18 years of age, incompetent, incapacitated, or deceased, then a single claim would still be made on behalf of the direct victim. This claim would still include any expenses paid by others on behalf of the victim, such as funeral expenses or the emergency travel of up to two family members. In addition, family members such as the spouse, children, parents, and siblings of the direct victim, would also be able to file individual claims for mental health counseling on their own behalf. Such additional victims would not be eligible for other expense reimbursement as part of their individual claim. They would, however, still be able to receive reimbursement for expenses paid under the claim of the direct victim. Tuition, Childcare, and Travel Expenses Five comments (three by victims, one from a state victim compensation board, and one from a federal agency) involved suggestions for reimbursement in categories that are already covered by the ITVERP under certain circumstances. For example, tuition payments are considered a reimbursable expense for the direct victim if the schooling is related to retraining required as a direct result of the injury. This may include, for example, training for using TDD equipment, prosthetic limbs, Braille, and other vision and physical aids. Similarly, expenses for rehabilitation training to assist victims in adjusting to a new work environment would be reimbursed under the ITVERP. (See the table in the Appendix to Subpart A for examples.) One commenter suggested expanding this existing education coverage to include tuition for a surviving spouse to return to school. Another suggestion was for future tuition for the children of a deceased victim. Because the ITVERP is restricted by statute to direct reimbursement to victims for actual out-of-pocket expenses resulting from the act of international terrorism, such expenses related to normal educational needs of the victim or surviving family members cannot be covered. Along similar lines, immediate childcare costs may be considered reimbursable miscellaneous expenses when they are necessary for the children of the direct victim, or for the children of a deceased victim's family members who travel to the country where the act of international terrorism occurred to care for the victim or recover the victim's remains. Long-term childcare expenses, however, are more akin to personal expenses than immediate direct expenses attributable to the act of terrorism, and for that reason they cannot be covered by the ITVERP. Emergency travel for up to two family members is a reimbursable miscellaneous expense in a variety of circumstances. This includes traveling to care for the direct victim or to recover the deceased victim's remains. Travel expenses will be covered to the country where the incident occurred, in most instances, but it may be to other locations depending on the circumstances (e.g., travel to a hospital in another country to which the victim has been evacuated). Funeral and Burial Expenses A family member of a deceased victim inquired as to the specific items allowable as funeral expenses. Reimbursable expenses include a variety of costs associated with the return and disposition of the victim's remains, including markers, flowers, and costs related to memorial services, up to the cap on costs. Activities of a religious nature that are reasonably related to funeral and burial expenses are reimbursable. Other than the category cap, the primary limitation in this category is that the expense be for a “reasonably related activity.” One comment by a professional trade group suggested that the definition of “burial costs” be expanded to be more consistent with the FTC regulatory provision on funerals (16 CFR 453 (1999)). The commenter wanted to ensure that the ITVERP regulation would not limit burial options for a family, such as the choice between an “earth burial” or cremation. As noted above, the coverage of burial costs is intended to be as inclusive as possible of all customs, cultures, and religious faiths. As an integral part of the grieving process, no family should be constrained by this program in observing appropriate burial customs in a manner and method decided by the family. To this end, and upon review of the language in the FTC rule, OVC does not believe that limiting reimbursement to the current language adopted by the FTC would be appropriate. Rather, OVC continues to read the existing language expansively, as a method to provide for wide coverage of burial expenses, consistent with the specific needs of each family. As noted previously, the ITVERP does not limit those options, other than to impose a reasonable spending cap of $25,000 for merchandise or activities reasonably related to funeral and burial costs, which can be directed according to the wishes of the family. Interim Emergency Payments One commenter, a victim of international terrorism, requested that the program make interim emergency payments. The ITVERP already allows for interim emergency payments when the Director of OVC determines such payment is necessary to avoid or mitigate substantial hardship. Once the ITVERP becomes operational, such interim emergency payments will be possible for victims of future acts of international terrorism. Insurance One comment by a victim pointed out that insurance carriers exclude costs associated with acts of international terrorism, or may cancel policies following a terrorist event. Changes to insurance industry practices would need to be effected by other legislative action and are beyond the purview of these regulations. Taxes One victim suggested that under the ITVERP any final taxes owed by a deceased victim should be forgiven by the Internal Revenue Service, as they were for victims of the 9/11 attacks and the Oklahoma City bombing. Although the Victims of Terrorism Tax Relief Act of 2001 currently forgives final taxes for deceased victims of specified terrorist attacks, coverage with respect to other acts of international terrorism outside the United States would require an amendment to the Act or new legislation. Individuals receiving reimbursements under the ITVERP should consult the Internal Revenue Service (and state taxing authorities, as appropriate) to determine the tax status of such reimbursements. The IRS has in the past limited tax exposure in situations of state compensation payments. It is anticipated that once OJP adopts final regulations for the ITVERP program, OVC will request that the IRS independently determine the appropriate tax status for expense reimbursements under the ITVERP. Category Caps Five comments (three from victims, one from a Federal agency, and one from an interested individual) suggested that some or all of the category caps were too low, particularly for the mental health category. The purpose of the ITVERP is to help victims mitigate certain economic losses occasioned by the terrorist event. Placing caps on reimbursement categories helps to ensure that funds will be available for future victims of international terrorism abroad. By statute, the program is not designed to insure against all losses. For example, reimbursement for property loss is intended to help victims replace items that are necessary for immediate daily living. The expectation is that families living abroad or on extended travel would avail themselves of the opportunity to purchase additional medical or travel insurance and insure items of substantial value (e.g., home, household goods, automobile). Similarly, funding for mental health counseling is intended to provide immediate counseling intervention, not long-term therapy. As with lost wages, which are not reimbursable under the ITVERP, programs funded under the Victims of Crime Act of 1984
(VOCA)may provide compensation in additional categories or in amounts above the ITVERP caps, and victims are encouraged to apply to such state programs. Collateral Sources Seven of the comments (three from state victim compensation boards, one from a national victim advocacy group, one from a federal agency, and two from victims) were related to collateral sources as defined in § 94.12(c) and described in § 94.25. Four of the comments requested clarification of the relationship between the ITVERP and state compensation programs. Two comments concerned payments received from a foreign government. The seventh comment concerned prior payments made under another Federal statute. The Uniting and Strengthening America by Providing Appropriate Tools Required To Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), Public Law 107-56, eliminated the requirement for state crime victim compensation programs to pay compensation to victims in cases of international terrorism abroad. Accordingly, the ITVERP is the primary federally-funded reimbursement source for these victims. State crime victim compensation programs may elect to continue to provide compensation to victims of international terrorism abroad in categories not covered under the ITVERP, or in amounts beyond the ITVERP's category caps. If a state chooses to compensate residents who are victims of international terrorism outside the United States, it does so as a payer of last resort. Although the state may consider federal ITVERP payments as collateral source payments that diminish its payment obligations, state supplemental compensation payments will not reduce Federal payment obligations. In other words, if the state chooses to provide additional payments to victims who have received specific payments under the ITVERP, those payments will be considered supplemental support and not collateral sources for purposes of the Federal program. If the ITVERP and the state program provide reimbursement for identical expenses, the ITVERP is considered the initial payer. Moreover, international terrorism victims are not required to apply to state compensation programs before filing an application for reimbursement under the ITVERP. This policy is in line with the current practice and permits state compensation programs to retain their status as the payers of last resort. For example, suppose that after an international terrorist event a victim were to apply for and receive full reimbursement under an ITVERP category, but outstanding expenses remain. A state compensation program is not required by VOCA to make additional payments under that category. The state may, however, elect to make supplemental payments (under that category) to the victim. Additionally, for expenses under categories that are not covered under the ITVERP, the state compensation programs may continue to reimburse the victim within the state's approved limit. Furthermore, any such supplemental or additional payments may be counted in a state's certified payout of victim compensation expenses, and therefore eligible for inclusion in the calculation of future state compensation awards under VOCA. Two comments (both from victims) asked for clarification of the extent to which payments from a foreign government would affect ITVERP payments to victims. One commenter suggested that the regulations would cause hardship to victims if foreign payments are counted as collateral sources. Section 94.25 of the regulation specifically provides that any payment from the United States or a foreign government in the form of general compensation (e.g., a lump sum or structured payment) will be considered a collateral source. As such, an award under the ITVERP would be reduced by the amount of payment(s) by the foreign government (or the claimant would subrogate the United States to the extent of the ITVERP award if it is paid first). If, however, the payment from the United States or a foreign government is for reimbursement of a specific category of expenses that is not covered under the ITVERP or is a supplemental reimbursement beyond the ITVERP category cap, the reimbursement will not be considered a collateral source, and will not reduce the reimbursement the claimant receives from the ITVERP. Although unsatisfied judgments against foreign governments may be collateral sources under the final rule, in principle the ITVERP award is not intended to limit victims' options in seeking collateral source payments from other sources to cover otherwise non-compensated expenses. The intent is to ensure that funds are available to reimburse the basic expenses of victims, by not allowing the receipt of money from more than one source to cover the same expense. This may result in a slight reduction in reimbursements for some victims. In any event, further to the foregoing discussion (and comments from the Department of State), some clarifying changes have been made to the definition of *collateral sources* in the final rule. ITVERP is an expense reimbursement program. As such, ITVERP funds are available to reimburse the victim for specific expenses (as opposed to a general compensation program). To ensure fiscal integrity, the program is designed to prevent duplication of payments. Thus, reimbursements by collateral sources for specific expenses below the cap are not exempted as there can only be one reimbursement for each specific expense. Nevertheless, the intent is that under no circumstances should total reimbursements under ITVERP exceed actual expenses. Where expenses are less than the ITVERP reimbursement plus any collateral sources, the claimant would be required to return the excess ITVERP payment. In the event that expenses are covered by another source, the claimant cannot be reimbursed for the same expense under ITVERP. A comment from a Federal agency expressed concern about whether victims might receive a compensatory damage award from another Federal government source, such as the U.S. Treasury, and still be eligible for reimbursement under the ITVERP. As noted above, a victim would not be eligible under § 94.25 to receive reimbursement from the ITVERP for an expense for which he has already received reimbursement. Compensatory damage awards, by definition, typically make payment based on specific losses incurred. In cases where there are such awards, the ITVERP would not reimburse a victim for those expenses already covered by the award. If, however, a Federal government payment constituted supplemental reimbursement for a specific expense beyond the maximum amount reimbursed for that expense covered by the ITVERP, such payment would not be considered a collateral source, and would not diminish the amount to which a victim would otherwise be entitled under the ITVERP. Victims Covered One comment by a victim indicated concern that the ITVERP would be uniformly applied to United States citizens as well as eligible noncitizens. The ITVERP statute specifically defines “victim” to include someone who is “a national of the United States or an officer or employee of the United States Government,” 42 U.S.C. 10603c(a)(3)(A)(ii), which expressly includes certain non-citizens. In addition, as previously noted in the section on *Family Members* , if the direct victim was younger than 18 years of age, incompetent, incapacitated, or deceased, additional family members would be considered victims for purposes of obtaining mental health counseling (42 U.S.C. 10603c(a)(3)(B)). Such family members need not be United States citizens or officers or employees of the United States to be eligible. The commenter also questioned whether reimbursement should be available only to innocent victims. The statute addresses this issue by creating an express statutory exception that “in no event shall an individual who is criminally culpable for the terrorist act or mass violence receive any compensation under this section, either directly or on behalf of a victim” (42 U.S.C. 10603c(a)(3)(C)). Application Requirements Three comments (one from a national victim assistance group, one from a federal agency, and the third from a victim) related to application procedures. The national organization expressed its support for the statutory provision allowing retroactive filing of claims back to December 1988, and for the provision allowing for extensions (at the discretion of the Director) of the three-year deadline for filing applications (see § 94.32). The national organization and the victim suggested that it was difficult for claimants who may be operating in a state of shock to remember to retain original receipts, especially after a substantial amount of time has elapsed. Although the regulation requires original receipts for the expenses to be reimbursed, § 94.31 takes into account situations where original receipts may not be available. In such cases (at the discretion of the Director of OVC), the claimant may submit an itemized list of expenses along with a certification that the original receipts are unavailable and a statement attesting that the items and amounts submitted in the application are true and correct to the best of the claimant's knowledge. Confidentiality One of the state victim compensation boards submitted a comment expressing concern about the confidentiality of the information submitted by the claimants. Specifically, the commenter was concerned that the initial ITVERP application, any supporting documents, and the appeal material would become a public record. The organization was concerned that measures should be taken to safeguard the privacy of the victim and the victim's family. Application materials and other supporting documents received from claimants will be maintained in accordance with the U.S. Department of Justice's applicable Privacy Act System of Records notice. The Freedom of Information Act contains an exemption that protects the privacy rights of individuals by prohibiting the disclosure of information that would constitute a clearly unwarranted invasion of privacy. In addition, 42 U.S.C. 10604(d) specifically prevents release of such information, except pursuant to Federal law. Emergency Responders Two comments (one from a national victim assistance organization and one from an interested individual) requested additional clarification of the term “emergency responder.” Section 94.41(u)(1) indicates that “victim” has the meaning given in 42 U.S.C. 10603c(a)(3)(A). Because of the statutory requirement of “direct physical or emotional injury as a result of international terrorism,” the term “victim” is understood to include three basic groups of individuals (all of whom are required by the Statute to be either United States nationals, or officers or employees of the United States Government):
(1)Those who were present during the act of terrorism (i.e., those who might be thought of as traditional victims);
(2)individuals who were present during the immediate aftermath of the act which would include those who immediately assist at the site (e.g., “good Samaritans”); and
(3)emergency responders who assisted in efforts to search for and recover other victims. The common definition of “emergency responders” includes those who are mission-essential personnel involved in the search and rescue or recovery of other victims. Traditionally, this includes police officers, firefighters, and medical personnel engaged in these activities. Others may also be included depending on the circumstances of the act of terrorism; for example, if the act resulted in a collapsed building, structural engineers and construction workers would likely be directly involved in the rescue and recovery efforts. Claim Filing One comment by a state victim compensation board requested clarification regarding whether multiple claims may be opened in the name of one victim, and if not, how the ITVERP would select the qualified claimant for each victim. As an expense reimbursement program, the ITVERP is designed to ensure that those who pay for certain expenses on behalf of a victim are reimbursed. There must be some limitation, however, to reduce the administrative burden in implementing this program, while at the same time ensuring that the appropriate individuals are reimbursed. The regulation establishes an effective system for achieving those goals by requiring, except in extraordinary circumstances, that a single claim be filed by each individual victim (or his representative if the victim is younger than 18 years of age, incompetent, incapacitated, or deceased). For that reason, there shall ordinarily be only one claimant with respect to each victim. A claimant submitting a claim for reimbursement as the victim's representative must certify that he is a family member or legal guardian authorized to submit the claim. When multiple sources have contributed toward payment of the victim's expenses, limiting reimbursement to a single claimant entrusts the victim (or the victim's representative) with the fiduciary obligation to distribute reimbursements, as appropriate, within the funding caps of the regulation. The only exception to the principle of a single claimant or previously-authorized representative relates to interim emergency payments. Section 94.41 of the regulation allows for the possibility that in emergency situations there may be a need for others, such as a family member or consular officer, to submit a claim on behalf of the victim, to facilitate immediate treatment or travel. In such emergency situations, the claimant is considered a representative of the victim for that limited emergency purpose only. After the emergency has passed, the victim (or his representative, if the victim is younger than 18 years of age, incompetent, incapacitated, or deceased) would be substituted as the claimant and would submit all subsequent or supplemental claims. As previously noted in the *Family Members* section, if the direct victim is younger than 18 years of age, incompetent, incapacitated, or deceased, § 94.12(u)(2) specifies those family members who may also be considered victims. In such cases, these additional victims are eligible for reimbursement for mental health counseling and could file individual claims in their own right. State Department Handling of Funds One comment by a state victim compensation board requested clarification regarding how a U.S. Embassy would handle the collection and distribution of funds on behalf of a victim in the limited circumstance when a consular officer is authorized to file a claim on behalf of a victim. The commenter specifically wondered if the funds would be put in trust for the victim. Section 94.12(t) specifies that a U.S. consular officer or U.S. embassy official may receive money on behalf of a victim only if “no family member or legal guardian is available to file a claim for an interim emergency payment on behalf of a victim under § 94.41.” A review of instances in which a U.S. consular officer would need to file for such emergency expenses confirms that all such transfers are expected to occur according to currently established U.S. Department of State rules, which require strict accountability through use of a trust. Because the Department of State has already established strict accountability rules to govern the disbursement of funds on behalf of American citizens abroad, the Department of Justice will honor those rules in implementing the ITVERP. In the rare circumstance in which the amount of funds in an emergency disbursement exceeds the actual amount necessary (e.g., medical evacuation costs were less than expected), excess funds would be transferred back to the Antiterrorism Emergency Reserve of the Crime Victims Fund. Those funds would again be available for supplemental claims, provided the expenses were under the cap for that category. Travel Warnings One comment from an interested individual expressed concern that the eligibility restriction found in § 94.21(c)(3)(iii) would exclude all victims of an act of international terrorism if the act occurred in a country for which the Department of State has issued a travel warning. Although § 94.21(c)(3)(iii) indicates a restriction of eligibility based on travel warnings, the restriction depends on two pre-conditions. First, § 94.21(c)(3) requires that the victim “(As a non-U.S. Government employee), [was] acting as an advisor, consultant, employee, or contractor, in a military or political capacity.” Thus, U.S. Government employees would not be excluded by the restriction of § 94.21(c)(3); in addition, a non-U.S. Government employee would be eligible unless that individual were working in a military or political capacity. Second, the § 94.21(c)(3)(iii) restriction applies only to countries where the travel warning was issued in relation to “armed conflict.” The Department of State maintains a list of countries for which it has issued travel warnings, some of which relate to armed conflict and others of which do not; these warnings may be accessed via the Internet at *http://www.travel.state.gov/travel* . (Please note that under § 94.21(c)(4) eligibility is predicated on the fact that a victim has not engaged in grossly reckless conduct which contributed materially to his death or injury.) For example, the Department of State issued a travel warning for Nigeria on December 1, 2005, based on “increasing crime in Lagos, as well as unrest in the Delta”; in contrast, the travel warning issued on November 22, 2005, for Haiti was based on concern over “violent confrontations between armed groups”: If an incident were declared an act of international terrorism, the warning for Nigeria would not trigger a restriction in eligibility under the ITVERP, but the warning for Haiti could trigger a restriction on eligibility if the non-U.S. employee was acting as an advisor, consultant, employee, or contractor, in a military or political capacity. Regulatory Certifications Executive Order 12866—Regulatory Planning and Review This regulation has been drafted and reviewed in accordance with Exec. Order No. 12866, section 1(b), 58 FR 51, 735 (Sept. 30, 1993), Principles of Regulation. OJP has determined that this regulation is a “significant regulatory action” under Executive Order No. 12866, and accordingly, this regulation has been reviewed by the Office of Management and Budget. Executive Order 13132—Federalism This regulation will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Exec. Order No. 13132, 64 FR 43, 255 (Aug. 4, 1999), it is determined that this regulation does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Cost/Benefit Assessment This regulation has no cost to state, local, or tribal governments, or to the private sector. The ITVERP is funded by fines, fees, penalty assessments, and forfeitures paid by federal offenders, as well as gifts from private individuals, deposited into the Crime Victims Fund in the U.S. Treasury, and set aside in the Antiterrorism Emergency Reserve Fund, whose funds may not be obligated in an amount above $50 million in any given year. The cost to the Federal Government consists both of administrative expenses and amounts reimbursed to victims. Both types of costs depend on the number of claimants, prospective as well as retroactive. Although spending is anticipated to be higher in the initial years as a result of the number of potential retroactive claimants (approximately 900), the program will not spend more than the statutory maximum of $50 million each year. Regulatory Flexibility Act This regulation will not have a significant economic impact on a substantial number of small entities. This regulation has no cost to State, local, or tribal governments, or to the private sector. The ITVERP is funded by fines, fees, penalty assessments, and bond forfeitures paid by Federal offenders, as well as gifts from private individuals, deposited into the Crime Victims Fund in the U.S. Treasury. Therefore, an analysis of the impact of this regulation on such entities is not required under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Paperwork Reduction Act of 1995 The collection of information requirements contained in this regulation has been submitted to the Office of Management and Budget, pursuant to the Paperwork Reduction Act (44 U.S.C. 3506). Applicants seeking reimbursement from this program will be required to submit an official application form (the International Terrorism Victim Expense Reimbursement Program Application), that has been created by OVC. This application is a new information collection instrument that will be used to collect necessary information from and about the victims and claimants regarding expenses incurred by them, to be used by OVC in making a reimbursement determination. The total number of initial respondents (including both direct victims and family members) for this collection is estimated to be 2,000. This represents the estimated number of claimants who are currently eligible to request reimbursement under the ITVERP. The total initial public burden associated with this initial information collection is estimated to be approximately 1,500 hours. The amount of time for an average respondent to respond/reply is estimated to be approximately 45 minutes. Unfunded Mandates Reform Act of 1995 This regulation will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. List of Subjects in 28 CFR Part 94 Administrative practice and procedures, International terrorism, Victim compensation. Accordingly, for the reasons set forth in the preamble, Title 28 of the Code of Federal Regulations is amended to add a new part 94, to read as follows: PART 94—CRIME VICTIM SERVICES Subpart A—International Terrorism Victim Expense Reimbursement Program Introduction Sec. 94.11 Purpose; construction and severability. 94.12 Definitions. 94.13 Terms. Coverage 94.21 Eligibility. 94.22 Categories of expenses. 94.23 Amount of reimbursement. 94.24 Determination of award. 94.25 Collateral sources. Program Administration 94.31 Application procedures. 94.32 Application deadline. 94.33 Investigation and analysis of claims. Payment of Claims 94.41 Interim emergency payment. 94.42 Repayment and waiver of repayment. Appeal Procedures 94.51 Request for reconsideration. 94.52 Final agency decision. Appendix to Subpart A—International Terrorism Victim Expense Reimbursement Program (ITVERP) Chart of Expense Categories and Limits Subpart B—[Reserved] Subpart C—[Reserved] Subpart D—[Reserved] Authority: Victims of Crime Act (VOCA), Title II, Secs. 1404C and 1407 (42 U.S.C. 10603c, 10604). Subpart A—International Terrorism Victim Expense Reimbursement Program Introduction § 94.11 Purpose; construction and severability.
(a)The purpose of this subpart is to implement the provisions of VOCA, Title II, Sec. 1404C (42 U.S.C. 10603c), which authorize the Director (Director), Office for Victims of Crime (OVC), a component of the Office of Justice Programs (OJP), to establish a program to reimburse eligible victims of acts of international terrorism that occur outside the United States, for expenses associated with that victimization.
(b)Any provision of this part held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, shall be construed so as to give it the maximum effect permitted by law, unless such holding shall be one of utter invalidity or unenforceability, in which event such provision shall be deemed severable from this part and shall not affect the remainder thereof or the application of such provision to other persons not similarly situated or to other, dissimilar circumstances. § 94.12 Definitions. The following definitions shall apply to this subpart:
(a)*Child* means any biological or legally-adopted child, or any stepchild, of a deceased victim, who, at the time of the victim's death, is—
(1)Younger than 18 years of age; or
(2)Over 18 years of age and a student, as defined in 5 U.S.C. 8101.
(b)*Claimant* means a victim, or his representative, who is authorized to sign and submit an application, and receive payment for reimbursement, if appropriate.
(c)*Collateral sources* means sources that provide reimbursement for specific expenses compensated under this subpart, including property, health, disability, or other insurance for specific expenses; Medicare or Medicaid; workers' compensation programs; military or veterans' benefits of a compensatory nature; vocational rehabilitation benefits; restitution; and other state, Federal, foreign, and international compensation programs: except that any reimbursement received under this subpart shall be reduced by the amount of any lump sum payment whatsoever, received from, or in respect of the United States or a foreign government, unless the claimant can show that such payment was for a category of expenses not covered under this subpart. To the extent that a claimant has an unsatisfied judgment against a foreign government based on the same act of terrorism, the value of that unsatisfied judgment shall be counted as a lump sum payment for expenses covered under this subpart, unless the claimant agrees to waive his right to sue the United States government for satisfaction of that judgment.
(d)*Deceased means* individuals who are dead, or are missing and presumed dead.
(e)*Dependent* has the meaning given in 26 U.S.C. 152. If the victim was not required by law to file a U.S. Federal income tax return for the year prior to the act of international terrorism, an individual shall be deemed to be a victim's dependent if he was reliant on the income of the victim for over half of his support in that year.
(f)*Employee of the United States Government* means any person who—
(1)Is an employee of the United States government under Federal law; or
(2)Receives a salary or compensation of any kind from the United States Government for personal services directly rendered to the United States, similar to those of an individual in the United States Civil Service, or is a contractor of the United States Government (or an employee of such contractor) rendering such personal services.
(g)*Funeral and burial* means those activities involved in the disposition of the remains of a deceased victim, including preparation of the body and body tissue, refrigeration, transportation, cremation, procurement of a final resting place, urns, markers, flowers and ornamentation, costs related to memorial services, and other reasonably-associated activities, including travel for not more than two family members.
(h)*Incapacitated* means substantially impaired by mental illness or deficiency, or by physical illness or disability, to the extent that personal decision-making is impossible.
(i)*Incompetent* means unable to care for oneself because of mental illness or disability, mental retardation, or dementia.
(j)*International terrorism* has the meaning given in 18 U.S.C. 2331. As of the date of these regulations, the statute defines the term to mean “activities that—
(1)Involve violent acts or acts dangerous to human life that are a violation of the criminal laws of the United States or of any State, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State;
(2)Appear to be intended—
(i)To intimidate or coerce a civilian population;
(ii)To influence the policy of a government by intimidation or coercion; or
(iii)To affect the conduct of a government by mass destruction, assassination, or kidnaping; and
(3)Occur primarily outside the territorial jurisdiction of the United States, or transcend national boundaries in terms of the means by which they are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek asylum.”
(k)*Legal guardian* means legal guardian, as the term is defined under the laws of the jurisdiction of which the ward is or was a legal resident, except that if the ward is or was a national of the United States, the legal guardianship must be pursuant to an order of a court of competent jurisdiction of or within the United States.
(l)*Medical expenses* means costs associated with the treatment, cure, or mitigation of a disease, injury, or mental or emotional condition that is the result of an act of international terrorism. Allowable medical expenses include reimbursement for eyeglasses or other corrective lenses, dental services, rehabilitation costs, prosthetic or other medical devices, prescription medication, and other services rendered in accordance with a method of healing recognized by the jurisdiction in which the medical care is administered.
(m)*Mental health* care means mental health care provided by an individual who meets professional standards to provide these services in the jurisdiction in which the care is administered.
(n)*National of the United States* has the meaning given in section 101(a) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(22)). As of the date of these regulations, the statute defines the term to mean “(A) a citizen of the United States, or
(B)a person who, though not a citizen of the United States, owes permanent allegiance to the United States.”
(o)*Officer of the United States government* has the meaning given in 5 U.S.C. 2104.
(p)*Outside the United States* means outside any state of the United States, the District of Columbia, the U.S. Virgin Islands, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any other possession or territory of the United States.
(q)*Parent* means a biological or legally-adoptive parent, or a step-parent, unless his parental rights have been terminated in the jurisdiction where the child is or was a legal resident, except that if the child or either parent is a national of the United States, the termination must be pursuant to an order of a court of competent jurisdiction of or within the United States.
(r)*Property loss* refers to items of personal property (other than medical devices, which are included in the category of “medical expenses”) that are lost, destroyed, or held as evidence.
(s)*Rehabilitation costs* includes reasonable costs for the following: physiotherapy; occupational therapy; counseling, and workplace, vehicle, and home modifications.
(t)*Representative* means a family member or legal guardian authorized to file a claim on behalf of a victim who is younger than 18 years of age, incompetent, incapacitated, or deceased, except that no individual who was criminally culpable for the act of international terrorism shall be considered a representative. In the event that no family member or legal guardian is available to file a claim for an interim emergency payment on behalf of a victim, under § 94.41, a U.S. consular officer or U.S. embassy official within the country may act as a representative, consistent with any limitation on his authority contained in 22 CFR 92.81(b).
(u)*Victim* has the meaning given in 42 U.S.C. 10603c(a)(3)(A), it being understood that the term “person” in that section means the following:
(i)An individual who was present during the act of terrorism;
(ii)An individual who was present during the immediate aftermath of the act of terrorism; or
(iii)An emergency responder who assisted in efforts to search for and recover other victims; and
(2)The spouse, children, parents, and siblings of a victim described in paragraph (u)(1) of this Section, and other persons, at the discretion of the Director, shall be considered “victims”, when the person described in such paragraph—
(i)Dies as a result of the act of terrorism;
(ii)Is younger than 18 years of age (or is incompetent or incapacitated) at the time of the act of terrorism, or;
(iii)Is rendered incompetent or incapacitated as a result of the act of terrorism. § 94.13 Terms. The first three provisions of 1 U.S.C. 1 (rules of construction) shall apply to this subpart. Coverage § 94.21 Eligibility.
(a)Except as provided in paragraphs
(b)and
(c)of this section, reimbursement of qualified expenses under this subpart is available to a victim of international terrorism or his representative, pursuant to 42 U.S.C. 10603c(a)(3)(A). For purposes of eligibility for this program only, the Attorney General shall determine whether there is a reasonable indication that an act was one of international terrorism, within the meaning of that section.
(b)Reimbursement shall be denied to any claimant if the Director, in consultation with appropriate Department of Justice
(DOJ)officials, determines that there is a reasonable indication that either the victim with respect to whom the claim is made, or the claimant, was criminally culpable for the act of international terrorism.
(c)Reimbursement may be reduced or denied to a claimant if the Director, in consultation with appropriate DOJ officials, determines that the victim with respect to whom the claim is made contributed materially to his own death or injury by—
(1)Engaging in conduct that violates U.S. law or the law of the jurisdiction in which the act of international terrorism occurred;
(2)Acting as a mercenary or “soldier of fortune”;
(3)(As a non-U.S. Government employee), acting as an advisor, consultant, employee, or contractor, in a military or political capacity—
(i)For a rebel or paramilitary organization;
(ii)For a government not recognized by the United States; or
(iii)In a country in which an official travel warning issued by the U.S. Department of State related to armed conflict was in effect at the time of the act of international terrorism; or
(4)Engaging in grossly reckless conduct. § 94.22 Categories of expenses. The following categories of expenses, generally, may be reimbursed, with some limitations, as noted in § 94.23: medical care; mental health care; property loss; funeral and burial; and miscellaneous expenses (including temporary lodging, emergency travel, and transportation). Under this subpart, the Director shall not reimburse for attorneys' fees, lost wages, or non-economic losses (such as pain and suffering, loss of enjoyment of life, loss of consortium, etc.). § 94.23 Amount of reimbursement. Different categories of expenses are capped, as set forth in the chart below. Those caps may be adjusted, from time to time, by rulemaking. The cap in effect within a particular expense category, at the time that the application is received, shall apply to the award. § 94.24 Determination of award. After review of each application, the Director shall determine the eligibility of the victim or representative and the amount, if any, eligible for reimbursement, specifying the reasons for such determination and the findings of fact and conclusions of law supporting it. A copy of the determination shall be mailed to the claimant at his last known address. § 94.25 Collateral sources.
(a)The amount of expenses reimbursed to a claimant under this subpart shall be reduced by any amount that the claimant receives from a collateral source in connection with the same act of international terrorism. In cases in which a claimant receives reimbursement under this subpart for expenses that also will or may be reimbursed from another source, the claimant shall subrogate the United States to the claim for payment from the collateral source up to the amount for which the claimant was reimbursed under this subpart.
(b)Notwithstanding paragraph
(a)of this section, when a collateral source provides supplemental reimbursement for a specific expense, beyond the maximum amount reimbursed for that expense under this subpart, the claimant's award under this subpart shall not be reduced by the amount paid by the collateral source, nor shall the claimant be required to subrogate the United States to the claim for payment from the collateral source, except that in no event shall the combined reimbursement under this subpart and any collateral source exceed the actual expense. Program Administration § 94.31 Application procedures.
(a)To receive reimbursement, a claimant must submit a completed application under this program requesting payment based on an itemized list of expenses, and must submit original receipts.
(b)Notwithstanding paragraph
(a)of this Section, in cases involving incidents of terrorism preceding the establishment of this program where claimants may not have original receipts, and in cases in which the claimant certifies that the receipts have been destroyed or lost, the Director may, in his discretion, accept an itemized list of expenses. In each such case, the claimant must certify that original receipts are unavailable and attest that the items and amounts submitted in the list are true and correct to the best of his knowledge. In the event that it is later determined that a fraudulent certification was made, the United States may take action to recover any payment made under this section, and pursue criminal prosecution, as appropriate. § 94.32 Application deadline. The deadline for an application is three years from the date of the act of international terrorism. At the discretion of the Director, the deadline for filing a claim may be extended to a date not later than three years from the date of the determination that there is a reasonable indication that an act of international terrorism has occurred, under § 94.21(a). For claims related to acts of international terrorism that occurred after December 21, 1988, but before the establishment of this program, the application deadline is three years from the effective date of these regulations. § 94.33 Investigation and analysis of claims. The Director may seek an expert examination of claims submitted if he believes there is a reasonable basis for requesting additional evaluation. The claimant, in submitting an application for reimbursement, authorizes the Director to release information regarding claims or expenses listed in the application to an appropriate body for review. If the Director initiates an expert review, no identifying information for the victim or representative shall be released. Payment of Claims § 94.41 Interim emergency payment. Claimants may apply for an interim emergency payment, prior to a determination under § 94.21(a). If the Director determines that such payment is necessary to avoid or mitigate substantial hardship that may result from delaying reimbursement until complete and final consideration of an application, such payment may be made to cover immediate expenses such as those of medical care, funeral and burial, short-term lodging, and emergency transportation. The amount of an interim emergency payment shall be determined on a case-by-case basis, and shall be deducted from the final award amount. § 94.42 Repayment and waiver of repayment. A victim or representative shall reimburse the program upon a determination by the Director that an interim emergency award or final award was: Made to an ineligible victim or claimant; based on fraudulent information; or an overpayment. Except in the case of ineligibility pursuant to a determination by the Director, in consultation with appropriate DOJ officials, under § 94.21(b), the Director may waive such repayment requirement in whole or in part, for good cause, upon request. Appeal Procedures § 94.51 Request for reconsideration. A victim or representative may, within thirty
(30)days after receipt of the determination under § 94.24, appeal the same to the Assistant Attorney General for the Office of Justice Programs, by submitting a written request for review. The Assistant Attorney General may conduct a review and make a determination based on the material submitted with the initial application, or may request additional documentation in order to conduct a more thorough review. In special circumstances, the Assistant Attorney General may determine that an oral hearing is warranted; in such cases, the hearing shall be held at a reasonable time and place. § 94.52 Final agency decision. In cases that are not appealed under § 94.51, the Director's determination pursuant to § 94.24 shall be the final agency decision. In all cases that are appealed, the Assistant Attorney General shall issue a notice of final determination, which shall be the final agency decision, setting forth the findings of fact and conclusions of law supporting his determination. Appendix to Subpart A—International Terrorism Victim Expense Reimbursement Program (ITVERP); Chart of Expense Categories and Limits There are five major categories of expenses for which claimants may seek reimbursement under the ITVERP:
(1)Medical expenses, including dental and rehabilitation costs;
(2)Mental health care;
(3)Property loss, repair, and replacement;
(4)Funeral and burial costs; and
(5)Miscellaneous expenses. Expense categories Subcategories and conditions Expense limits Medical expenses, including dental and rehabilitation costs Victim's medical care, including, without limitation, treatment, cure, and mitigation of disease or injury; replacement of medical devices, including, without limitation, eyeglasses or other corrective lenses, dental services, prosthetic devices, and prescription medication; and other services rendered in accordance with a method of healing recognized by the jurisdiction in which the medical care is administered. Victim's cost for physiotherapy; occupational therapy; counseling; workplace, vehicle, and home modifications. For example, if a victim were to sustain a physical injury, such as blindness or paralysis, which would affect his ability to perform current professional duties, physical rehabilitation to address work skills would be appropriate Up to $50,000. Mental health care Victim's (and, when victim is a minor, incompetent, incapacitated, or deceased, certain family members') mental health counseling costs Up to 12 months, but not to exceed $5,000. Property loss, repair, and replacement Includes crime scene cleanup, and replacement of personal property (not including medical devices) that is lost, destroyed, or held as evidence Up to $10,000 to cover repair or replacement, whichever is less. Funeral and burial costs Includes, without limitation, the cost of disposition of remains, preparation of the body and body tissue, refrigeration, transportation of remains, cremation, procurement of a final resting place, urns, markers, flowers and ornamentation, costs related to memorial services, and other reasonably associated activities Up to $25,000. Miscellaneous expenses Includes, without limitation, temporary lodging up to 30 days, local transportation, telephone costs, etc.; with respect to emergency travel, two family members' transportation costs to country where incident occurred (or other location, as appropriate) to recover remains, care for victim, care for victim's dependents, accompany victim to receive medical care abroad, accompany victim back to U.S., and attend to victim's affairs in host country Up to $15,000. Subpart B—[Reserved] Subpart C—[Reserved] Subpart D—[Reserved] Dated: August 28, 2006. Regina B. Schofield, Assistant Attorney General, Office of Justice Programs. [FR Doc. E6-14678 Filed 9-5-06; 8:45 am] BILLING CODE 4410-18-P DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 3 RIN 2900-AM15 New and Material Evidence AGENCY: Department of Veterans Affairs. ACTION: Final rule. SUMMARY: This document amends the Department of Veterans Affairs
(VA)rules regarding the reconsideration of decisions on claims for benefits based on newly discovered service records received after the initial decision on a claim. The revision will provide consistency in adjudication of certain types of claims. DATES: *Effective Date:* This amendment is effective October 6, 2006. FOR FURTHER INFORMATION CONTACT: Maya Ferrandino, Consultant, Regulations Staff (211D), Compensation and Pension Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Ave., NW., Washington DC 20420,
(202)273-7211. SUPPLEMENTARY INFORMATION: On June 20, 2005, VA published in the **Federal Register** (70 FR 35388) a proposal to revise VA's rules regarding the reconsideration of decisions on claims for benefits based on newly discovered service records received after the initial decision on a claim. Interested persons were invited to submit written comments on or before August 19, 2005. We received comments from the National Organization of Veterans' Advocates and three members of the public. We are making two changes to 38 CFR 3.156(c)(2) based on internal agency reconsideration. First, we are revising the title of the Joint Services Records Research Center (JSRRC). In the proposed rulemaking, we stated the title as Center for Research of Unit Records (CRUR), which is incorrect. Instead, we will state the correct title in the regulation, which is Joint Services Records Research Center. Second, we are inserting the word “because” after “, or” in the first sentence of § 3.156(c)(2) to improve readability. We are not altering the substantive content of the paragraph by making these changes. One commenter stated that she supported this rulemaking and that clarification of the rules currently in § 3.156 is needed. We appreciate this comment and believe that this rulemaking will improve the clarity of that regulation. One commenter stated that in the proposed rule, we use the phrase “whichever is later” in numerous places. The commenter stated that if we are clarifying retroactive effective dates, the term should be “former”, as it would mean “before the date VA uses to base the effective date.” At § 3.156(c)(3), the proposed regulation states: An award made based all or in part on the records identified by paragraph (c)(1) of this section is effective on the date entitlement arose or the date VA received the previously decided claim, whichever is later, or such other date as may be authorized by the provisions of this part applicable to the previously decided claim. As stated in the proposed rulemaking, proposed § 3.156(c)(2) is derived from current 38 CFR 3.400(q), regarding effective dates for awards based on new and material evidence. Section 3.400, VA's regulation regarding effective dates, uses the terminology “date of receipt of the claim or the date entitlement arose, whichever is the later.” This language is derived from 38 U.S.C. 5110, the authorizing statute for effective dates, which states that “the effective date of an award * * * shall be fixed in accordance with the facts found, but shall not be earlier than the date of receipt of application therefor.” The statute and the current regulation thus require that the effective date of the award be the later of the date of entitlement or the date VA received the application for the benefit. As such, the use of the term “later” in the proposed regulation is consistent with the statute and VA's long-standing terminology regarding effective dates. We believe the phrase “whichever is later” is well understood by claimants, their representatives, and VA staff. We therefore make no change based on this comment. One commenter stated that VA should clearly define the phrases “effective on the date entitlement arose or the date VA received the previously denied claim, whichever is later,” “or such other date”, and “except as it may be affected by the filing date of the initial claim.” These phrases, from proposed § 3.156(c)(3) and (4), all are based on language from VA's regulation regarding effective dates, § 3.400. In the proposed regulation, we are conforming the effective date provision to VA's existing regulations regarding effective dates. We believe these terms are well understood by claimants, their representatives, and VA staff. The meaning of the phrase “effective on the date entitlement arose or the date VA received the previously denied claim, whichever is later,” is discussed above and we do not believe further clarification is needed as to that phrase. As to the second phrase referenced by the commenter, proposed § 3.156(c)(3) would state that the effective date of an award based on newly discovered service department records is the date entitlement arose or the date VA received the previously decided claim, whichever is later, or “such other date as may be authorized by the provisions of this part applicable to the previously decided claim.” Certain VA regulations authorize effective dates other than the date entitlement arose or the date VA received the claim. For example, if a claim for disability compensation was received within one year of separation from service, the effective date under 38 CFR 3.400(b)(2)(i) may be the day following separation from service. The reference to “such other date” merely indicates that VA will apply such effective-date provisions when they are controlling with respect to the previously decided claim. As to the third phrase, proposed § 3.156(c)(4) states that, when an award is made based on new service department records, the disability rating assigned by VA for any past period will accord with the medical evidence of record “except insofar as [the rating] may be affected by the date of the initial claim.” This limitation merely reflects the rule, discussed above, that the effective date of any award or rating may be affected by the date of the initial claim for benefits. Because we believe these three phrases are sufficiently clear, we make no change based on this comment. This commenter additionally expressed concern with proposed paragraph (c)(2), which states that VA cannot reconsider a claim under paragraph (c)(1) based on records that “did not exist when VA decided the claim.” The commenter asks how it is possible that records of a veteran could not exist, and seems to ask how it is possible that relevant records could be created after a claim has been denied. In proposed paragraph (c)(2), we are referring to records such as modified discharges and corrected military records. The effective date of an award based on such evidence is controlled by 38 U.S.C. 5110(i) and is beyond the scope of this rule. Hence, proposed paragraph (c)(2) expressly states that the proposed regulation does not apply in such cases. Therefore, we make no change based on this comment. One commenter addressed the provision in the proposed rule at § 3.156(c)(2), which states that the provisions of subsection (c)(1) will not apply when the claimant fails to provide sufficient information for VA to identify and obtain the records. The commenter stated that this language is contrary to VA's duty to assist under 38 U.S.C. 5103A(c)(1). The commenter asserted that this statute limits VA's duty to obtain some records unless the claimant has furnished information sufficient to locate the records, but contains no limitation on the duty of VA to obtain service medical records. As an initial matter, we note that this rule does not purport to define the scope of VA's duty to assist claimants under section 5103A. Rather, the purpose of this rule is to clarify long-standing VA rules, issued pursuant to the Secretary's general authority under 38 U.S.C. 501(a), which authorize VA to award benefits retroactive to the date of a previously decided claim when newly discovered service department records are received. The scope of this rule is not intended to be coextensive with the scope of VA's duty to assist claimants. Section 5103A, as enacted in 2000 by the Veterans Claims Assistance Act of 2000 (VCAA), Public Law No. 106-475, requires VA to assist claimants in obtaining evidence to substantiate their claims, including service medical records. If VA fails to provide such assistance in any claim to which that law applies, a claimant may seek direct administrative or judicial review to ensure VA's compliance with section 5103A. This rule will not affect any individual's rights under section 5103A. The provisions of section 3.156(c), which predate by decades the enactment of the VCAA, do not prescribe rights or duties concerning VA assistance in developing evidence but, rather, prescribe standards for reopening previously denied claims and establishing the effective dates of awards in such reopened claims. Because this rule does not affect any claimant's rights under 38 U.S.C. 5103A, it does not conflict with section 5103A. Further, we believe that newly discovered service medical records ordinarily would provide a basis for retroactive benefits in disability compensation claims under this rule as proposed, if the provisions of the rule are otherwise met. Proposed § 3.156(c)(2) refers to circumstances in which the claimant failed to provide information sufficient for VA to identify and obtain the records at issue. When a claim for disability benefits is filed, VA seeks to obtain a complete copy of the veteran's service medical records from the service department. Accordingly, with respect to service medical records, a completed application form that sufficiently identifies the veteran's branch and dates of service will ordinarily be sufficient to enable VA to obtain the veteran's service medical records. If a newly discovered service department record is one that VA should have received at the time it obtained the veteran's service medical records, we believe it ordinarily would be within the scope of proposed § 3.156(c)(1). However, some types of service records would not commonly be associated with a veteran's service medical records even though they may reflect or otherwise relate to treatment or hospitalization during service. With respect to such records, we believe a determination must be made on a case-by-case basis as to whether the claimant provided VA with sufficient information to identify and obtain the record at the time of the prior claim. Therefore, we make no change based on this comment. A commenter discussed that when a claimant is denied benefits for a disability, and then files a new claim based on a post-service change in diagnosis, and that claim is granted, the effective date should be the date of the original claim. This comment is outside the scope of the proposed regulation. The proposed regulation addresses new service medical records, while the comment addresses a new diagnosis in post-service records. Therefore, we make no change based on this comment. VA appreciates the comments submitted in response to the proposed rule. Based on the rationale stated in the proposed rule and in this document, the proposed rule is adopted with the changes noted. Paperwork Reduction Act This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). Regulatory Flexibility Act The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The reason for this certification is that this amendment would not directly affect any small entities. Only VA beneficiaries could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Executive Order 12866 Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Order classifies a rule as a significant regulatory action requiring review by the Office of Management and Budget if it meets any one of a number of specified conditions, including: having an annual effect on the economy of $100 million or more, creating a serious inconsistency or interfering with an action of another agency, materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues. VA has examined the economic, legal, and policy implications of this final rule and has concluded that it is a significant regulatory action under Executive Order 12866. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any year. This final rule would have no such effect on State, local, and tribal governments, or on the private sector. Catalog of Federal Domestic Assistance Numbers and Titles The Catalog of Federal Domestic Assistance program numbers and titles for this proposal are 64.100, Automobiles and Adaptive Equipment for Certain Disabled Veterans and Members of the Armed Forces; 64.101, Burial Expenses Allowance for Veterans; 64.102, Compensation for Service-Connected Deaths for Veterans' Dependents; 64.104, Pension for Non-Service-Connected Disability for Veterans; 64.105, Pension to Veterans Surviving Spouses, and Children; 64.106, Specially Adapted Housing for Disabled Veterans; 64.109, Veterans Compensation for Service-Connected Disability; and 64.110, Veterans Dependency and Indemnity Compensation for Service-Connected Death. List of Subjects in 38 CFR Part 3 Administrative practice and procedure, Claims, Disability benefits, Health care, Pensions, Radioactive materials, Veterans, Vietnam. Approved: May 26, 2006. Gordon H. Mansfield, Deputy Secretary of Veterans Affairs. For the reasons set out in the preamble, 38 CFR part 3 is amended as set forth below: PART 3—ADJUDICATION Subpart A—Pension, Compensation, and Dependency and Indemnity Compensation 1. The authority citation for part 3, subpart A continues to read as follows: Authority: 38 U.S.C. 501(a), unless otherwise noted. 2. Section 3.156 is amended by: a. Adding a paragraph heading to paragraph (a). b. Adding a paragraph heading to paragraph (b). c. Revising paragraph (c). The additions and revision read as follows: § 3.156 New and material evidence.
(a)*General.* * * *
(b)*Pending claim.* * * *
(c)*Service department records.*
(1)Notwithstanding any other section in this part, at any time after VA issues a decision on a claim, if VA receives or associates with the claims file relevant official service department records that existed and had not been associated with the claims file when VA first decided the claim, VA will reconsider the claim, notwithstanding paragraph
(a)of this section. Such records include, but are not limited to:
(i)Service records that are related to a claimed in-service event, injury, or disease, regardless of whether such records mention the veteran by name, as long as the other requirements of paragraph
(c)of this section are met;
(ii)Additional service records forwarded by the Department of Defense or the service department to VA any time after VA's original request for service records; and
(iii)Declassified records that could not have been obtained because the records were classified when VA decided the claim.
(2)Paragraph (c)(1) of this section does not apply to records that VA could not have obtained when it decided the claim because the records did not exist when VA decided the claim, or because the claimant failed to provide sufficient information for VA to identify and obtain the records from the respective service department, the Joint Services Records Research Center, or from any other official source.
(3)An award made based all or in part on the records identified by paragraph (c)(1) of this section is effective on the date entitlement arose or the date VA received the previously decided claim, whichever is later, or such other date as may be authorized by the provisions of this part applicable to the previously decided claim.
(4)A retroactive evaluation of disability resulting from disease or injury subsequently service connected on the basis of the new evidence from the service department must be supported adequately by medical evidence. Where such records clearly support the assignment of a specific rating over a part or the entire period of time involved, a retroactive evaluation will be assigned accordingly, except as it may be affected by the filing date of the original claim. (Authority: 38 U.S.C. 501(a)) 3. Section 3.400 is amended by: a. Revising the heading of paragraph (q). b. Removing paragraph (q)(1) heading. c. Redesignating paragraph (q)(1)(i) as new paragraph (q)(1). d. Removing paragraph (q)(2). e. Redesignating paragraph (q)(1)(ii) as new paragraph (q)(2). The revision reads as follows: § 3.400 General.
(q)New and material evidence (§ 3.156) other than service department records. * * * [FR Doc. E6-14746 Filed 9-5-06; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 4 RIN 2900-AL26 Schedule for Rating Disabilities; Guidelines for Application of Evaluation Criteria for Certain Respiratory and Cardiovascular Conditions; Evaluation of Hypertension With Heart Disease AGENCY: Department of Veterans Affairs. ACTION: Final rule. SUMMARY: This document amends the Department of Veterans Affairs
(VA)Schedule for Rating Disabilities by adding guidelines for the evaluation of certain respiratory and cardiovascular conditions and by explaining that hypertension will be evaluated separately from hypertensive and other types of heart diseases. DATES: *Effective Date:* This amendment is effective October 6, 2006. *Applicability Date:* The provisions of this final rule shall apply to all applications for benefits received by VA on or after the effective date of this final rule. FOR FURTHER INFORMATION CONTACT: Maya Ferrandino, Consultant, Regulations Staff (211D), Compensation and Pension Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420,
(202)273-7211. SUPPLEMENTARY INFORMATION: On August 22, 2002, VA published in the **Federal Register** (67 FR 54394) a proposal to amend those portions of the Schedule for Rating Disabilities that address cardiovascular and respiratory conditions by providing guidelines for the evaluation of these conditions and by explaining that hypertension will be evaluated separately from hypertensive and other types of heart diseases. Interested persons were invited to submit written comments on or before October 21, 2002. We received a combined comment from the American College of Chest Physicians, the American Thoracic Society, and the National Association for Medical Direction of Respiratory Care. VA currently uses the ratio of FEV-1 (Forced Expiratory Volume in one second) to FVC (Forced Vital Capacity), or FEV-1/FVC ratio, to evaluate certain respiratory conditions. Proposed 38 CFR 4.96(d)(7) would direct raters to consider a decreased FEV-1/FVC ratio to be normal if the FEV-1 is greater than 100 percent. The rationale was that in that case the FVC would also be high (better than normal), so a decreased ratio would not indicate pathology. The commenter suggested that we not use the ratio but, rather, use 100 percent of predicted value. Because a decreased ratio could indicate pathology, but not disability, the commenter suggested we delete the statement in the preamble to the proposed rule that a decreased ratio is not indicative of pathology. Because the statement noted by the commenter was not part of the proposed regulatory language, but was made in the preamble to the proposed rule, it would have had no regulatory effect. Nevertheless, we agree with the rationale of this suggestion. Therefore, we will address the commenter's suggestion by changing the regulatory language in § 4.96(d)(7) to the following: “If the FEV-1 and the FVC are both greater than 100 percent, do not assign a compensable evaluation based on a decreased FEV-1/FVC ratio.” Chronic bronchitis (diagnostic code 6600), pulmonary emphysema (diagnostic code 6603), chronic obstructive pulmonary disease (diagnostic code 6604), interstitial lung disease (diagnostic codes 6825-6833), and restrictive lung disease (diagnostic codes 6840-6845) are evaluated primarily on the basis of pulmonary function tests (PFT's). However, these conditions may also be evaluated based on alternative evaluation criteria, which may include measures of the maximum exercise capacity; the presence of pulmonary hypertension (documented by echocardiogram or cardiac catheterization), cor pulmonale, or right ventricular hypertrophy; episode(s) of respiratory failure; and a requirement for outpatient oxygen therapy. For example, a 100-percent evaluation for these conditions may be based on a maximum exercise capacity test result of less than 15 ml/kg/min oxygen consumption (with cardiac or respiratory limitation), and a 60-percent evaluation may be based on a maximum exercise capacity test result of 15 to 20 ml/kg/min oxygen consumption (with cardiac or respiratory limitation). We proposed that PFT's be required to evaluate this group of respiratory conditions except, among other exceptions, when the results of a maximum exercise capacity test are of record and are 20 ml/kg/min or less. We also proposed that if a maximum exercise capacity test is not of record, the veteran's disability evaluation would be based on alternative criteria. The commenter stated that since most of the patients with these respiratory conditions have a low exercise tolerance, using the results of only effort-dependent tests would make it easy for some marginal patients to qualify for compensation for their respiratory condition. The commenter stated that exercise tests should be considered maximal and should be performed after PFT results do not fully explain symptomatology. The vast majority of veterans with respiratory diseases are evaluated on the basis of PFT results. Since the disability due to respiratory disease in veterans ranges from minimal to very severe, and veterans of all ages and all degrees of physical conditioning undergo examinations for respiratory disability, it would be speculative to say that most have a low exercise tolerance. The regulations do not require that a maximum exercise capacity test be conducted in any case, and it is not routinely conducted. If there is already a maximum exercise capacity test of record, and the results are 20 ml/kg/min or less, evaluation (at a 60- or 100-percent level, depending on the exact results) may be based on these results. If no maximum exercise capacity test is of record, as would be true in most cases, this regulation directs that evaluation be based on the alternative criteria. In any given case, the examiner may request, based on clinical judgment, that a maximum exercise capacity test be conducted, such as in cases where the PFT's do not fully explain symptomatology. However, the maximum exercise capacity test is not available in some medical facilities, and evaluation will properly be based in some cases on the clinician's assessment of severity based on history, physical findings, and available laboratory tests. We therefore make no change based on this comment. The commenter stated that the diagnostic codes in the VA rating schedule for the listed conditions in the proposed rule were confusing and suggested that VA use the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) diagnostic coding system that is used throughout the United States in the health care delivery system. For several reasons, we believe that using ICD-9-CM codes is not a reasonable option. First, ICD-9-CM and the VA rating schedule serve very different purposes. The ICD-9-CM is used by medical professionals in diagnosing medical conditions. The rating schedule is used by VA personnel in assigning evaluations to conditions that have been diagnosed by medical professionals for VA compensation purposes. The rating schedule is not simply a listing of conditions and symptoms. It includes evaluation criteria for each of the more than 700 disabilities listed. VA also rates disabilities not listed in the rating schedule to the most analogous disability that is listed there. Also, despite its length, the ICD-9-CM does not include certain conditions that VA must commonly evaluate, such as specific muscle injuries. For example, the criteria under diagnostic code 5301 in the rating schedule govern the evaluation of injuries to muscle group I (trapezius, levator scapulae, and serratus magnus). There are 23 muscle groups listed in the VA rating schedule that govern the evaluation of injuries to those muscle groups, and each of the 23 muscle groups has its own set of evaluation criteria based on the severity of the injuries affecting specific muscle functions. Six of them refer to various muscle injuries of the shoulder and upper arm. In contrast, ICD-9-CM code 959.2 covers injuries to the axilla and scapular region of the “Shoulder and upper arm,” which is as specific as ICD-9-CM gets for these injuries. Over 350,000 veterans are currently evaluated under VA's muscle injury criteria, which are commonly used for evaluating residuals of combat injuries, such as gunshot and shell fragment wounds. Such VA diagnostic codes are therefore of great importance to VA in evaluating veterans with combat wounds, and also provide useful information for statistical purposes. Other problems would arise from replacing VA's diagnostic codes with the ICD-9-CM codes. ICD-9-CM's high level of specificity for some conditions would make use by raters difficult, since in some cases a specific code would apply, while in others only the general code would be required for rating purposes. Another issue is that VA has special codes for certain combined disabilities—loss or loss of use of an arm and loss or loss of use of a leg, for example—which have special significance for VA rating purposes, but which have no equivalent in ICD-9-CM. For these reasons, VA does not believe that using ICD-9-CM codes to indicate veterans' disabilities for purposes of compensation would be feasible or useful. We therefore make no change based on this comment. VA appreciates the comment submitted in response to the proposed rule. Based on the rationale stated in the proposed rule and in this document, the proposed rule is adopted with the changes noted. Paperwork Reduction Act This document contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). Regulatory Flexibility Act The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The reason for this certification is that this amendment would not directly affect any small entities. Only VA beneficiaries could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604. Executive Order 12866 Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Order classifies a rule as a significant regulatory action requiring review by the Office of Management and Budget if it meets any one of a number of specified conditions, including: Having an annual effect on the economy of $100 million or more, creating a serious inconsistency or interfering with an action of another agency, materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues. This document has been reviewed by the Office of Management and Budget under Executive Order 12866. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any year. This final rule would have no such effect on State, local, and tribal governments, or on the private sector. Catalog of Federal Domestic Assistance Numbers The Catalog of Federal Domestic Assistance program numbers and titles for this proposal are 64.104, Pension for Non-Service-Connected Disability for Veterans, and 64.109, Veterans Compensation for Service-Connected Disability. List of Subjects in 38 CFR Part 4 Disability benefits, Pensions, Veterans. Approved: May 26, 2006. Gordon H. Mansfield, Deputy Secretary of Veterans Affairs. For the reasons set out in the preamble, 38 CFR part 4, subpart B, is amended as set forth below: PART 4—SCHEDULE FOR RATING DISABILITIES Subpart B—Disability Ratings 1. The authority citation for part 4 continues to read as follows: Authority: 38 U.S.C. 1155, unless otherwise noted. 2. Section 4.96 is amended by adding paragraph
(d)to read as follows: § 4.96 Special provisions regarding evaluation of respiratory conditions.
(d)*Special provisions for the application of evaluation criteria for diagnostic codes 6600, 6603, 6604, 6825-6833, and 6840-6845. *
(1)Pulmonary function tests (PFT's) are required to evaluate these conditions except:
(i)When the results of a maximum exercise capacity test are of record and are 20 ml/kg/min or less. If a maximum exercise capacity test is not of record, evaluate based on alternative criteria.
(ii)When pulmonary hypertension (documented by an echocardiogram or cardiac catheterization), cor pulmonale, or right ventricular hypertrophy has been diagnosed.
(iii)When there have been one or more episodes of acute respiratory failure.
(iv)When outpatient oxygen therapy is required.
(2)If the DLCO
(SB)(Diffusion Capacity of the Lung for Carbon Monoxide by the Single Breath Method) test is not of record, evaluate based on alternative criteria as long as the examiner states why the test would not be useful or valid in a particular case.
(3)When the PFT's are not consistent with clinical findings, evaluate based on the PFT's unless the examiner states why they are not a valid indication of respiratory functional impairment in a particular case.
(4)Post-bronchodilator studies are required when PFT's are done for disability evaluation purposes except when the results of pre-bronchodilator pulmonary function tests are normal or when the examiner determines that post-bronchodilator studies should not be done and states why.
(5)When evaluating based on PFT's, use post-bronchodilator results in applying the evaluation criteria in the rating schedule unless the post-bronchodilator results were poorer than the pre-bronchodilator results. In those cases, use the pre-bronchodilator values for rating purposes.
(6)When there is a disparity between the results of different PFT's (FEV-1 (Forced Expiratory Volume in one second), FVC (Forced Vital Capacity), etc.), so that the level of evaluation would differ depending on which test result is used, use the test result that the examiner states most accurately reflects the level of disability.
(7)If the FEV-1 and the FVC are both greater than 100 percent, do not assign a compensable evaluation based on a decreased FEV-1/FVC ratio. 3. Section 4.100 is added to read as follows: § 4.100 Application of the evaluation criteria for diagnostic codes 7000-7007, 7011, and 7015-7020.
(a)Whether or not cardiac hypertrophy or dilatation (documented by electrocardiogram, echocardiogram, or X-ray) is present and whether or not there is a need for continuous medication must be ascertained in all cases.
(b)Even if the requirement for a 10% (based on the need for continuous medication) or 30% (based on the presence of cardiac hypertrophy or dilatation) evaluation is met, METs testing is required in all cases except:
(1)When there is a medical contraindication.
(2)When the left ventricular ejection fraction has been measured and is 50% or less.
(3)When chronic congestive heart failure is present or there has been more than one episode of congestive heart failure within the past year.
(4)When a 100% evaluation can be assigned on another basis.
(c)If left ventricular ejection fraction
(LVEF)testing is not of record, evaluate based on the alternative criteria unless the examiner states that the LVEF test is needed in a particular case because the available medical information does not sufficiently reflect the severity of the veteran's cardiovascular disability. 4. Section 4.104, diagnostic code 7101 is amended by adding a Note
(3)to read as follows: § 4.104 Schedule of ratings—cardiovascular system. 7101 * * * Note (3): Evaluate hypertension separately from hypertensive heart disease and other types of heart disease. [FR Doc. E6-14732 Filed 9-5-06; 8:45 am] BILLING CODE 8320-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2006-0337-200613(f); FRL-8216-7] Approval and Promulgation of Implementation Plans for Kentucky: Air Permit Regulations AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is now taking final action to approve two of four requested revisions to the State Implementation Plan
(SIP)for the Commonwealth of Kentucky submitted to EPA on March 15, 2001. The two revisions being approved today regard two main changes to Kentucky's rules. The first change involves the removal and separation of rule 401 Kentucky Administrative Regulations
(KAR)50:035 (“Permits”) into three separate rules under a new Chapter 52 (Permits, Registrations, and Prohibitory Rules). Specifically, these rules are 52:001 (Definitions for 401 KAR Chapter 52), 52:030 (Federally-enforceable permits for non-major sources), and 52:100 (“Public, affected state, and U.S. EPA review”). The second change involves corrections to grammatical errors in rule 50:032 (“Prohibitory Rule for Hot Mix Asphalt Plants”) and the removal of rule 50:032 from Chapter 50 and adding it to Chapter 52, under 52:090 (“Prohibitory Rule for Hot Mix Asphalt Plants”). This final action also responds to adverse comments submitted in response to EPA's proposed rule published on December 30, 2002. This final action does not address the removal of 401 KAR 50:030 (“Registration of Sources”) or changes made to 401 KAR 52:080 (“Regulatory limit on potential to emit”), that was part of the March 15, 2001, submittal, but which will be addressed in a separate action. DATES: *Effective Date:* This rule will be effective October 6, 2006. ADDRESSES: EPA has established a docket for this action under Docket Identification No. EPA-R04-OAR-2006-0337. All documents in the docket are listed on the *www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding Federal holidays. FOR FURTHER INFORMATION CONTACT: James Hou, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is
(404)562-8965. Mr. Hou can also be reached via electronic mail at *Hou.James@epa.gov.* SUPPLEMENTARY INFORMATION: I. Today's Action II. Background III. Comment and Response IV. Final Action V. Statutory and Executive Order Reviews I. Today's Action EPA is now taking final action to approve two of four requested revisions to the
(SIP)for the Commonwealth of Kentucky submitted to EPA on March 15, 2001, and clarified in a letter dated July 18, 2001. The SIP submittal and the letter-clarification were submitted by the Kentucky Department for Environmental Protection, Division of Air Quality. The two revisions being approved today regard two main changes to Kentucky's rules. The first change involves the removal and separation of rule 401 Kentucky Administrative Regulations
(KAR)50:035 (“Permits”) into three separate rules under a new Chapter 52 (Permits, Registrations, and Prohibitory Rules). Specifically, these rules are 52:001 (Definitions for 401 KAR Chapter 52), 52:030 (“Federally-enforceable permits for non-major sources”), and 52:100 (“Public, affected state, and U.S. EPA review”). The second change involves corrections to grammatical errors in rule 50:032 (“Prohibitory Rule for Hot Mix Asphalt Plants”) and the removal of rule 50:032 from Chapter 50 and adding it to Chapter 52, under 52:090 (“Prohibitory Rule for Hot Mix Asphalt Plants”). Today's final action also responds to one set of adverse comments submitted in response to EPA's proposed rule published on December 30, 2002 (67 FR 79543). Today's final action does not address the removal of 401 KAR 50:030 (“Registration of Sources”) or changes made to 401 KAR 52:080 (“Regulatory limit on potential to emit”), which will be addressed in a separate action. Therefore, today's final action approves a total of four rules into the Kentucky SIP; 401 KAR 52:001, 401 KAR 52:030, 401 KAR 52:090, and 401 KAR 52:100 and the removal of rules 401 KAR 50:032 and 401 KAR 50:035. This final action is consistent with section 110 of the Clean Air Act. II. Background On December 30, 2002, EPA simultaneously published a proposed rule (67 FR 79543, December 30, 2002) and a direct final rule (67 FR 79523, December 30, 2002) to approve the above described revisions to the Kentucky SIP, submitted by Kentucky on March 15, 2001. Because EPA received one set of adverse comments during the public comment period, EPA withdrew the direct final rule on February 10, 2003 (68 FR 6629). Today, EPA is taking final action on the Kentucky SIP revisions proposed for approval on December 30, 2002, as well as responding to the set of adverse comments received on that proposed action, with the exception of the portions of the March 15, 2001, submittal noted above. III. Response to Comments EPA received comments from one commenter who opposed the proposed revision to the Kentucky SIP published on December 30, 2002 (67 FR 79543). A summary of the adverse comments received on the proposed rule and EPA's response to the comments, is presented below. *Comment:* The commenter requests that EPA:
(1)Reject approval of 401 KAR 52:001 and 401 KAR 52:100 and reject incorporation of these provisions into 40 Code of Federal Regulations
(CFR)Part 52, Subpart S;
(2)provide an additional comment period if EPA proposes to approve any non-emergency amendment of 40 CFR part 52, subpart S;
(3)command that all prevention of significant deterioration
(PSD)portions of 40 CFR part 124 apply to PSD permitting actions by Kentucky; and
(4)cancel all authority that EPA gave to Kentucky to issue PSD permits. *Response:* The following response will address each of the issues raised in the above comment in turn. First, the provisions contained in 401 KAR 52:001 (“Definitions for 401 KAR Chapter 52”) and 401 KAR 52:100 (“Public, affected state, and U.S. EPA review”) are required to be a part of the Kentucky SIP. Both the definitions and the public review provisions are consistent with federal requirements for the programs to which they apply. Therefore, the proposed rules are approvable into the Kentucky SIP. As a point of clarification, 401 KAR 52:001 and 52:100 relate specifically to Kentucky's Clean Air Act
(CAA)title V permit program and Kentucky's Federally Enforceable State Operating Permit (FESOP) program. Kentucky's PSD permit rules, found in 401 KAR Chapter 51, refer to the public review provisions of 401 KAR 52:100, but only to the extent that such provisions are more stringent than the public review provisions found in the federal rule, 40 CFR 51.166(q). Second, the Kentucky SIP, like many other SIPs, is regularly amended. Most recently, EPA proposed revisions to the Kentucky SIP on February 10, 2006 (71 FR 6988). This revision dealt specifically with Kentucky's PSD regulations. No public comments were received. The commenter failed to state any reason why the comment period for the present proposal (67 FR 79543) should be reopened. Third, the commenter's request to expand the applicability of 40 CFR part 124 is not relevant to the present action which does not propose any changes to 40 CFR part 124. 40 CFR part 124 governs EPA procedures for certain permit actions (e.g., issuance, termination), but it does not apply to PSD permits issued by approved state agencies (40 CFR 124.1(e)). Rather, the public review procedures of PSD permits issued by an approved state are governed by 40 CFR 51.166(q). Kentucky's PSD regulations (401 KAR 51:017) require that Kentucky follow the public review procedures in 40 CFR 51.166(q), and any more stringent requirements existing in 401 KAR 52:100. Fourth, the present action does not relate to Kentucky's authority to issue PSD permits, and therefore, EPA cannot “cancel” Kentucky's authority to issue PSD permits at this time. *Comment:* EPA must act to provide a “swift and certain remedy,”
(1)where KAR is different from 40 CFR 52.21(b) through (w); or
(2)where KAR provides less effective technical environmental protection, less effective opportunity for public participation in the permitting process, or less effective legal forums and processes for review of questioned decisions. *Response:* The proposed SIP revision at issue (67 FR 79543) relates only to specific portions of the KAR and it does not relate to Kentucky's PSD regulations. Therefore, the comment is not relevant to the proposed action. Nonetheless, as a point of clarification, 40 CFR 52.21 contains the Federal PSD program (i.e., if EPA were administering the PSD program). States may meet the requirements of the federal regulations with different but equivalent rules. As noted earlier, Kentucky recently revised its PSD program. That revision was noticed in the **Federal Register** and no public comments were received. It is not clear from the comment what “swift and certain remedy” the commenter requests EPA to take, but the comment is not relevant to the proposed action at issue at this time. *Comment:* 401 KAR 52:100 is patently and callously contemptuous of the intent of the Federal Clean Air Act. *Response:* The commenter fails to provide information demonstrating how 401 KAR 52:100 is “contemptuous” of the Clean Air Act (CAA). 401 KAR 52:100 is consistent with federal regulations promulgated pursuant to EPA's authority under the Clean Air Act. *Comment:* There appears to be no parallel in the CAA or the CFR to 401 KAR 52:100, Section 2(3)(c), which grants the applicant ten
(10)days of exclusive lawful speech. The commenter believes that this provision is not consistent with the CAA and 40 CFR 124.13. The commenter also believes that if the applicant cannot comment within the same timeframe as the public, then the PSD permit should not be issued to the applicant. *Response:* As noted earlier, the provisions included in 40 CFR part 124 do not apply to the issuance of PSD permits by approved states. With regard to the comment about 401 KAR 52:100, Section 2(3)(c), a state may satisfy the Federal regulations with different but equivalent regulations, and a state may include additional procedures not included in the Federal regulations so long as the rule is not less stringent. This provision is not less stringent and does not impact the public's ability to comment on the proposed action. 401 KAR 52:100 is equivalent to the Federal regulations for the programs to which it applies and it is approvable into the Kentucky SIP. As a point of clarification, this additional comment period is not an opportunity for the applicant to comment on the proposed permit, but rather, an opportunity for the applicant to respond to public comments received during the public comment period. This response to comments by the applicant is discretionary (i.e., the applicant may or may not actually provide such comments). Further, the response by the applicant is useful for both the reviewing agency and the public because it establishes a forum in which the applicant is responding to the public's concerns. The response to comments document is made part of the public record. Many state permitting programs include this provision to allow for a forum in which the applicant can respond to public comments and assist in public understanding of the issues in the application. *Comment:* There appears to be no effective provision in 401 KAR 52:100 for extension of comment time. The commenter references 40 CFR 124.13, which allows for a comment period longer than 30 days to give reasonable opportunity to reply if such a need for time is demonstrated. *Response:* As a general matter, the provisions of 40 CFR part 124 apply only to EPA and not to approved states. For state approved programs, such as CAA title V or PSD permit programs, the applicable public participation regulations are found in the federal regulations applicable to that specific state approved program. For example, for title V purposes, state programs must comply with the public participation provisions described in 40 CFR part 70; for PSD purposes, state programs must comply with the public participation provisions described in 40 CFR 51.166(q). 401 KAR 52:100 is consistent with the federal regulations for the programs to which it applies. *Comment:* The commenter expresses that Section 3 of 401 KAR 52:100 is written as if a public hearing is optional. The commenter refers to the CAA and suggests that a hearing is obligated for many PSD matters. *Response:* Kentucky's PSD regulations (401 KAR 51:017) require that the permitting authority follow the applicable procedures of 40 CFR 51.166(q) and 401 KAR 52:100. *Comment:* The commenter states that citizens, in an area where a new major source is to be located or where an existing source is requesting a major modification, should be entitled and informed of the public participation process including five elements. These elements obligate a hearing if there is a request; affords time, such as at least 30 calendar days prior to the hearing during which citizens may familiarize themselves with the draft, the technical support of the draft, and the application; grant to anyone who makes some cogent timely comment, the legal standing right to appeal any issue raised by anyone's cogent timely comment; obligate that if a cogent technical comment is made orally at the hearing, that it has the full force of law and that it need not be submitted by the speaker in writing in order to be an item preserved for review (although encouraging written submissions for accuracy and courtesy to the permitting agency is proper), and; afford time, such as at least 12 calendar days following the hearing, during which citizens may timely file written comment on the draft after having had the opportunity to have heard the matters expressed in the hearing. The commenter further requests that EPA initiate rulemaking for various regulatory permit programs to “codify” certain public participation elements. *Response:* With regard to the actions at issue at this time, Kentucky's provisions are equivalent to applicable federal regulations. Therefore, Kentucky's rules proposed for inclusion into the SIP are approvable by EPA. *Comment:* The commenter expresses that Section 5 of 401 KAR 52:100 does not contain “identical, synonymous, or superior text as a notice requirement.” The commenter points to a January 2002 legal notice published by the Kentucky Division for Air Quality
(KDAQ)as an example of a deficient public notice. *Response:* In accordance with Kentucky's rules, public notice and participation on PSD permits is governed by 40 CFR 51.166(q). It is unclear whether the commenter believes that the KDAQ January 2002 legal notice fails to comply with the provisions in the Kentucky rules which apply to such notices. Nonetheless, the SIP action proposed by EPA on December 30, 2002, does not relate to the January 2002 public notice on a PSD permit discussed by the commenter. Comments regarding specific PSD permits and corresponding public notices should be raised during the public comment period on that permit and addressed to the agency responsible for issuing that permit. This comment is not relevant to the action at issue at this time. *Comment:* The commenter asserts that the requirements of 40 CFR 51.166 are “terse to the point of near meaninglessness” and do not comply with Congressional intent for public participation. The commenter makes a similar statement regarding portions of 40 CFR part 124. The commenter gives specific examples of what a public notice could include. *Response:* Neither of the provisions cited by the commenter are at issue in this final action regarding Kentucky's SIP. Both provisions are final federal rules that have been in effect for years. Comments regarding federal rules should have been provided within the timeframes for challenging such rules (i.e., when EPA proposes changes to federal rules, comments must be submitted within the stated timeframes in order to be considered by EPA for that rulemaking). The present action will have no impact on 40 CFR 51.166 or 40 CFR part 124. *Comment:* The commenter notes that Section 2(4) of 401 KAR 52:100 will make public comments available upon request and believes the comments may be abridged, which does not meet the requirements set forth in 40 CFR 51.166. *Response:* The commenter appears confused about the application of 401 KAR 52:100 to different air permit programs. As noted earlier, Kentucky's PSD permitting regulations require that the permitting authority follow the provisions described in 40 CFR 51.166 for public participation. 401 KAR 52:100 applies specifically to CAA title V operating permits (401 KAR 52:020) and Federally Enforceable State Operating Permits (FESOPs) (401 KAR 52:030). The language included in 401 KAR 52:100 is equivalent to federal regulations regarding public participation for the programs to which it applies. Therefore, the regulations proposed by Kentucky for inclusion in the Kentucky SIP are approvable. *Comment:* The commenter states that much of 401 KAR 52:001 does not meet requirements established in 40 CFR 51.166(a). The commenter identifies several examples where the commenter believes that definitions in 401 KAR 52:001 are less stringent than the federal definitions, or otherwise problematic. As examples, the commenter cites to the definition of “electric utility steam generating unit,” “commence,” and “major modification.” *Response:* Kentucky's PSD permitting definitions are found in 401 KAR 51:001, not 52:001. Kentucky's rules, including 401 KAR 52:001, are equivalent to the applicable federal regulations, and are approvable into the Kentucky SIP. Notably, the definitions included in Kentucky's PSD permit program (401 KAR Chapter 51) were recently revised by Kentucky to include new regulations promulgated by EPA in December, 2002. EPA published a notice regarding Kentucky's PSD program in the **Federal Register** on February 10, 2006 (71 FR 9688); no public comments were received on that proposed action. EPA took final action to approve those changes on July 11, 2006 (71 FR 38990). *Comment:* With regard to a statement in 67 FR 79524 (the direct final rule that was withdrawn), the commenter states that “[t]he people are reasonably entitled to review EPA's work again prior to EPA granting any additional misplaced authority to a rogue state.” *Response:* The procedure followed by EPA in the present action included the simultaneous publication of both a direct final rule (67 FR 79524, December 30, 2002) and a proposed rule (67 FR 79543, December 30, 2002). As noted in the direct final action, when EPA receives adverse comments on direct final rules, EPA withdraws the direct final rule and issues a final rule based on the simultaneously published proposed rule. EPA withdrew the direct final rule on February 10, 2003 (68 FR 6629). EPA's review of the proposed SIP revision by Kentucky was comprehensive. EPA is now taking final action based on the proposal, and addressing the one set of adverse comments received on the proposed action. *Comment:* The commenter states that 67 FR 79523 and 79543 are devoid of explanation for the proposed addition of 401 KAR 52:001 and 401 KAR 52:100. The commenter further notes that 40 CFR part 52, subpart S is defective. *Response:* EPA disagrees with the commenter's statement. The two **Federal Register** notices cited by the commenter include specific information regarding what actions are being taken by EPA. The Kentucky SIP contains rules that are equivalent to the applicable Federal rules. The commenter fails to provide any reason why 40 CFR part 52, subpart S is defective. *Comment:* The commenter states that Kentucky should be sanctioned for having acted in contempt of the CAA. *Response:* The commenter has not provided any information demonstrating how Kentucky has acted in “contempt” of the CAA. This comment does not appear relevant to the action proposed by EPA regarding the Kentucky SIP. EPA disagrees with the commenter's conclusion regarding sanctions. *Comment:* The commenter states that there can be no doubt that Kentucky knowingly and intentionally submitted to EPA rules that provide less effective technical environmental protection; less effective opportunity for informed public participation in the permitting process; and less effective legal forums and processes for review of questioned decisions than that given to those where 40 CFR 52.21 and 40 CFR part 124 are fully applicable to PSD permits. *Response:* EPA has no information or evidence suggesting that Kentucky has knowingly and intentionally violated any provision of the CAA or its implementing regulations. As noted earlier, 40 CFR part 124 does not apply to PSD permits issued by state permitting authorities and likewise, the provisions in 40 CFR 52.21 govern only EPA issuance of PSD permits. *Comment:* The commenter appears to state concern regarding the time that EPA took to review the Kentucky SIP revision at issue. *Response:* In reviewing the Kentucky SIP revision at issue, EPA followed its SIP processing guidance, its regulations at 40 CFR part 51, Appendix V, and the requirements of Section 110 of the Clean Air Act. IV. Final Action EPA is now taking final action to approve two of four requested revisions to the SIP for the Commonwealth of Kentucky submitted to EPA on March 15, 2001. The first revision being approved regards the removal and separation of rule 401 Kentucky Administrative Regulations
(KAR)50:035 (“Permits”) into three separate rules under a new Chapter 52 (Permits, Registrations, and Prohibitory Rules). Specifically, these rules are 52:001 (Definitions for 401 KAR Chapter 52), 52:030 (Federally-enforceable permits for non-major sources), and 52:100 (“Public, affected state, and U.S. EPA review”). The second change involves corrections to grammatical errors in rule 50:032 (“Prohibitory Rule for Hot Mix Asphalt Plants”) and the removal of rule 50:032 from Chapter 50 and adding it to Chapter 52, under 52:090 (“Prohibitory Rule for Hot Mix Asphalt Plants”). V. Statutory and Executive Order Reviews 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. For this reason, 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). 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.* ). 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). 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 (65 FR 67249, November 9, 2000). 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. 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. 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 Commonwealth 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. 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.* ). 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 November 6, 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 Clean Air Act section 307(b)(2). List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. Dated: August 25, 2006. A. Stanley Meiburg, Acting Regional Administrator, Region 4. 40 CFR part 52 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 S—Kentucky 2. Section 52.920(c) Table 1 is amended: a. In paragraph
(c)by removing entries for 401 KAR 50:035 titled “Permits” and 401 KAR 50:032 titled “Prohibitory rule for hot mix asphalt plants”, b. In paragraph
(c)adding in numerical order a new chapter heading “Chapter 52 Permits, Registrations, and Prohibitory Rules” and entries for 401 KAR 52:001 titled “Definitions for 401 KAR Chapter 52”, 401 KAR 52:030 titled “Federally enforceable permits for non-major sources”, 401 KAR 52:090 titled “Prohibitory rule for hot mix asphalt plants” and 401 KAR 52:100 titled “Public, affected state, and U.S. EPA review” to read as follows: § 52.920 Identification of plan.
(c)* * * Table 1.—EPA-Approved Kentucky Regulations State citation Title/subject State effective date EPA approval date Explanation * * * * * * * Chapter 52 Permits, Registrations, and Prohibitory Rules 401 KAR 52:001 Definitions for 401 KAR Chapter 52 01/15/01 09/06/06 [Insert citation of publication] 401 KAR 52:030 Federally enforceable permits for non-major sources 01/15/01 09/06/06 [Insert citation of publication] 401 KAR 52:090 Prohibitory rule for hot mix asphalt plants 01/15/01 09/06/06 [Insert citation of publication] 401 KAR 52:100 Public, affected state, and U.S. EPA review 01/15/01 09/06/06 [Insert citation of publication] * * * * * * * [FR Doc. 06-7415 Filed 9-5-06; 8:45 am]
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register
U.S. Code
- Rules and regulations§ 7805
- Transferred§ 10601
- Transferred§ 10603c
- Transferred§ 10604
- Definitions§ 601
- Federal agency responsibilities§ 3506
- Definitions§ 8101
- Dependent defined§ 152
- Definitions§ 2331
- Definitions§ 1101
- Officer§ 2104
- Words denoting number, gender, and so forth§ 1
- Effective dates of awards§ 5110
- Rules and regulations§ 501
- Avoidance of duplicative or unnecessary analyses§ 605
- Statements to accompany significant regulatory actions§ 1532
- Authority for schedule for rating disabilities§ 1155
- Establishment, functions, and activities§ 272
- Purposes§ 3501
- SHORT TITLE.§ 801
- EXPEDITED PROCESSING OF REQUESTS FOR JAPANESE IMPERIAL GOVERNMENT RECORDS.§ 804
- Congressional findings and declaration of purpose§ 7401
21 references not yet in our index
- 26 CFR 301
- T.D. 9284
- Pub. L. 105-206
- 147 F.3d 526
- 28 CFR 94
- 16 CFR 453
- Pub. L. 107-56
- 38 CFR 3
- 38 USC 5103A(c)(1)
- Pub. L. 106-475
- 38 USC 5103A
- 44 USC 3501-3521
- 5 USC 601-612
- 38 CFR 4
- 40 CFR 52
- 40 CFR 124
- 40 CFR 124.1(e)
- 40 CFR 124.13
- 40 CFR 70
- 40 CFR 51
- Pub. L. 104-4
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cites case law
Rules and Regulations
Final regulations
F. App'x147 F.3d 526
Cite26 CFR 301
Treas. Dec.T.D. 9284
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