Unknown. Final rule

76,583 words·~348 min read·/register/2006/10/04/06-8250

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

--- schema: federal-register doc_type: fedreg source_file: FR-2006-10-04.xml --- 71 192 Wednesday, October 4, 2006 Contents AID Agency for International Development NOTICES Meetings: International Food and Agricultural Development Board, 58576 E6-16333 Agriculture Agriculture Department See Farm Service Agency See Forest Service See Rural Housing Service Army Army Department See Engineers Corps NOTICES Meetings: Army Educational Advisory Committee, 58590-58591 06-8475 Centers Centers for Medicare & Medicaid Services NOTICES Privacy Act; systems of records, 58621-58626 E6-16329 Children Children and Families Administration RULES Head Start Program:

Transportation requirements; waivers, 58533-58536 E6-16488 NOTICES Grant and cooperative agreement awards: Fairbanks Counseling and Adoption, 58626 E6-16360 FRIENDS National Resource Center for Community-Based Child Abuse Prevention, 58626 E6-16361 Louisiana State University, Human Development Center, 58626-58627 E6-16356 Mississippi Institute for Disability Studies, University of Southern Mississippi, 58627 E6-16358 Presbyterian Hospitality House, 58627-58628 E6-16369 Texas Center for Disability Studies, University of Texas, Austin, 58628 E6-16355 Commerce Commerce Department See Economic Analysis Bureau See International Trade Administration See National Oceanic and Atmospheric Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 58577-58578 E6-16326 E6-16328 Community Community Development Financial Institutions Fund NOTICES Grants and cooperative agreements; availability, etc.:

Native American CDFI Assistance Program, 58661-58670 E6-16388 Comptroller Comptroller of the Currency NOTICES Reports and guidance documents; availability, etc.: Nontraditional mortgage products— Consumer information; proposed illustrations, 58672-58678 06-8479 Risks; interagency guidance, 58609-58618 06-8480 Defense Defense Acquisition Regulations System RULES Acquisition regulations: Acquisition of major weapon systems as commercial items, 58537-58538 E6-16398 Architect-engineer services/military family housing contracts; congressional notification, 58540-58541 E6-16419 Berry amendment notification requirement, 58536-58537 E6-16402 Buy American Act exemption for commercial information technology, 58539-58540 E6-16401 Free trade agreements— Guatemala and Bahrain, 58541-58544 E6-16418 Technical amendments, 58537 E6-16400 NOTICES Agency information collection activities; proposals, submissions, and approvals, 58591-58592 E6-16420 Defense Defense Department See Army Department See Defense Acquisition Regulations System See Engineers Corps Drug Drug Enforcement Administration PROPOSED RULES Controlled substances; importation and exportation:

Narcotic raw materials; authorized sources, 58569-58571 E6-16325 Economic Economic Analysis Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 58578-58579 E6-16327 Education Education Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 58593-58594 E6-16362 Employee Employee Benefits Security Administration NOTICES Meetings: Employee Welfare and Pension Benefit Plans Advisory Council, 58631-58632 E6-16381 Employment Employment and Training Administration NOTICES Adjustment assistance; applications, determinations, etc.:

Ademco, 58632 E6-16353 Saint Gobain Crystals, 58632 E6-16350 Saint-Gobain Performance Plastics Corp., 58632 E6-16349 Schott North America, Inc., 58633 E6-16352 Stanley-Bostitch, Inc., 58633 E6-16351 Energy Energy Department See Federal Energy Regulatory Commission Engineers Engineers Corps NOTICES Environmental statements; notice of intent: Miami-Dade County, FL; wetlands rock mining, 58592-58593 06-8476 EPA Environmental Protection Agency RULES Air pollutants, hazardous; national emission standards:

Miscellaneous coating manufacturing, 58499-58504 E6-16407 Air programs: Ambient air quality standards, national— 8-hour ozone standard, Phase 2, etc.; implementation; correction, 58498 E6-16377 Stratospheric ozone protection— Essential use allowances allocation, 58504-58514 E6-16372 Pesticides; tolerances in food, animal feeds, and raw agricultural commodities: Acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone, 58518-58521 E6-16184 Flumetsulam, 58514-58518 E6-16271 Solid wastes:

State underground storage tank program approvals— New Hampshire, 58521-58525 E6-16375 Superfund program: Emergency planning and community right-to-know— Air releases of NOx (NO and NO2); administrative reporting exemption, 58525-58533 E6-16379 PROPOSED RULES Solid wastes: State underground storage tank program approvals— New Hampshire, 58571-58572 E6-16376 NOTICES Coastal nonpoint pollution control programs: New York; approval decision, 58589-58590 06-8468 Committees; establishment, renewal, termination, etc.:

National Drinking Water Advisory Council, 58600-58601 E6-16380 Meetings: Nanoscale materials; risk management practices, 58601-58603 E6-16385 Pesticide registration, cancellation, etc.: Dow AgroSciences LLC et al., 58603-58604 E6-16108 Organic arsenical herbicides, 58604-58605 E6-16382 Executive Executive Office of the President See Presidential Documents See Trade Representative, Office of United States Export Export-Import Bank NOTICES Agency information collection activities; proposals, submissions, and approvals, 58605-58606 06-8472 Farm Farm Service Agency NOTICES United States Warehouse Act:

Warehouse operators; temporary storage for rice and soybeans, 58576-58577 06-8490 FAA Federal Aviation Administration RULES Aircraft: Major repairs and alterations; FAA Form 337 submissions; location change, 58495 E6-16405 Air traffic operating and flight rules, etc.: Chicago O’Hare International Airport, IL; congestion and delay reduction, 58495 E6-16406 Airworthiness directives: Boeing, 58485-58487 E6-16197 Empressa Brasileira de Aeronautica S.A., 58487-58493 E6-15861 McDonnell Douglas, 58493-58495 E6-16199 NOTICES Exemption petitions; summary and disposition, 58659-58660 E6-16389 FCC Federal Communications Commission NOTICES Agency information collection activities; proposals, submissions, and approvals, 58606-58607 E6-16218 E6-16220 *Applications, hearings, determinations, etc.:* Hammond, Terry Keith, 58607-58609 E6-16217 FDIC Federal Deposit Insurance Corporation NOTICES Reports and guidance documents; availability, etc.:

Nontraditional mortgage products— Consumer information; proposed illustrations, 58672-58678 06-8479 Risks; interagency guidance, 58609-58618 06-8480 Federal Emergency Federal Emergency Management Agency NOTICES Disaster and emergency areas: Virginia, 58629 E6-16335 Federal Energy Federal Energy Regulatory Commission NOTICES Electric rate and corporate regulation combined filings, 58595-58597 E6-16341 E6-16342 Hydroelectric applications, 58597-58600 E6-16344 E6-16345 E6-16348 *Applications, hearings, determinations, etc.:* Egan Hub Storage, LLC, 58594 E6-16346 El Paso Natural Gas Co., 58594 E6-16343 Rockies Express Pipeline LLC, 58594-58595 E6-16347 FMC Federal Maritime Commission NOTICES Ocean transportation intermediary licenses:

A A Pacific, Inc., et al., 58619-58620 E6-16397 International Equipment Logistics, Inc., et al., 58620 E6-16396 Omega Shipping Inc., et al., 58620 E6-16394 Federal Motor Federal Motor Carrier Safety Administration NOTICES Meetings; Sunshine Act, 58660 06-8514 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies: Formations, acquisitions, and mergers, 58620-58621 E6-16368 Meetings; Sunshine Act, 58621 06-8498 Reports and guidance documents; availability, etc.:

Nontraditional mortgage products— Consumer information; proposed illustrations, 58672-58678 06-8479 Risks; interagency guidance, 58609-58618 06-8480 FTC Federal Trade Commission PROPOSED RULES Telemarketing sales rules: Prerecorded telemarketing calls, etc.; seller and telemarketer compliance, 58716-58734 06-8524 Fish Fish and Wildlife Service PROPOSED RULES Endangered and threatened species: Critical habitat designations— Spikedace and loach minnow, 58574-58575 E6-16423 Foreign Foreign Assets Control Office NOTICES Sanctions; blocked persons, specially designated nationals, terrorists, and narcotics traffickers, and foreign terrorist organizations:

Foreign Narcotics Kingpin Designation Act; additional designations; list, 58670-58672 E6-16424 Forest Forest Service NOTICES Committees; establishment, renewal, termination, etc.: Roadless Area Conservation National Advisory Committee, 58577 E6-16378 Meetings: Roadless Area Conservation National Advisory Committee, 58577 E6-16374 Health Health and Human Services Department See Centers for Medicare & Medicaid Services See Children and Families Administration See Health Resources and Services Administration Health Health Resources and Services Administration NOTICES Meetings:

Childhood Vaccines Advisory Commission, 58628-58629 E6-16371 Homeland Homeland Security Department See Federal Emergency Management Agency Indian Indian Affairs Bureau NOTICES Environmental statements; record of decision: Skull Valley Band of Goshute Indians Reservation, UT; independent spent fuel storage installation, 58629-58630 06-8484 Interior Interior Department See Fish and Wildlife Service See Indian Affairs Bureau See Land Management Bureau International International Trade Administration NOTICES Antidumping:

Honey from— China, 58579-58581 06-8486 Polyester staple fiber from— Korea, 58581-58583 E6-16391 Sebacic acid from— China, 58583-58584 E6-16395 Countervailing duties: Corrosion-resistant carbon steel flat products from— France, 58584-58585 06-8485 Cut-to-length carbon steel plate from— Belgium, 58585-58587 E6-16390 Sweden, 58587 E6-16392 United Kingdom, 58587-58589 E6-16393 International International Trade Commission NOTICES Import Investigations: Ferrovanadium and nitrided vanadium from— Russia, 58630 E6-16384 Fresh garlic from— China, 58630-58631 E6-16383 Justice Justice Department See Drug Enforcement Administration NOTICES Pollution control; consent judgments:

Nacelle Land & Management Corp., et al., 58631 06-8483 Labor Labor Department See Employee Benefits Security Administration See Employment and Training Administration Land Land Management Bureau NOTICES Closure of public lands: California, 58630 E6-16336 National Credit National Credit Union Administration NOTICES Reports and guidance documents; availability, etc.: Nontraditional mortgage products— Consumer information; proposed illustrations, 58672-58678 06-8479 Risks; interagency guidance, 58609-58618 06-8480 National Highway National Highway Traffic Safety Administration PROPOSED RULES Motor vehicle safety standards:

Small business entities; economic impact, 58572-58574 E6-16422 NOTICES Motor vehicle safety standards; exemption petitions, etc.: American Honda Motor Co., Inc., 58660-58661 E6-16404 NOAA National Oceanic and Atmospheric Administration NOTICES Coastal zone management programs and estuarine sanctuaries: State programs— New York, 58589-58590 06-8468 Committees; establishment, renewal, termination, etc.: Channel Islands National Marine Sanctuary Advisory Council, 58590 06-8469 Nuclear Nuclear Regulatory Commission NOTICES *Applications, hearings, determinations, etc.:* Florida Power & Light Co., 58634-58638 E6-16357 Florida Power & Light Co. et al., 58633-58634 E6-16359 Office of U.S.

Trade Office of United States Trade Representative See Trade Representative, Office of United States Personnel Personnel Management Office NOTICES Excepted service; positions placed or revoked, 58680-58713 06-8426 Personnel management demonstration projects: Defense Department; Civilian Acquisition Workforce Personnel Demonstration Project, 58638-58639 E6-16261 Presidential Presidential Documents PROCLAMATIONS *Special observances:* Child Health Day (Proc. 8057), 58481-58482 06-8510 National Domestic Violence Awareness Month (Proc. 8058), 58483-58484 06-8522 Rural Rural Housing Service PROPOSED RULES Guaranteed Rural Rental Housing Program:

Annual guarantee fee; due date change, 58545-58546 E6-16399 SEC Securities and Exchange Commission NOTICES Agency information collection activities; proposals, submissions, and approvals, 58639-58640 E6-16330 Investment Company Act of 1940: RiverSource Diversified Income Series, Inc., et al., 58640-58644 E6-16365 Meetings: Small business capital formation; government-business forum, 58644-58645 E6-16331 Securities Exchange Act: New York Stock Exchange LLC, 58645-58646 E6-16367 Self-regulatory organizations; proposed rule changes:

Chicago Board Options Exchange, Inc., 58646-58649 E6-16364 International Securities Exchange, Inc, 58649-58650 E6-16363 International Securities Exchange, LLC, 58650-58656 E6-16366 Options Clearing Corp., 58656-58658 E6-16332 SBA Small Business Administration NOTICES Loan programs: New Markets Tax Credit Pilot Loan Program, 58658-58659 06-8497 State State Department RULES International Traffic in Arms regulations: Haiti; partial lifting of arms embargo, 58496-58498 E6-16386 Passports:

Passport procedures; restriction amended, 58496 E6-16387 Thrift Thrift Supervision Office NOTICES Reports and guidance documents; availability, etc.: Nontraditional mortgage products— Consumer information; proposed illustrations, 58672-58678 06-8479 Risks; interagency guidance, 58609-58618 06-8480 Trade Trade Representative, Office of United States NOTICES Andean Trade Preference Act: 2004 and 2005 annual reviews, 58638 E6-16421 Transportation Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration See National Highway Traffic Safety Administration PROPOSED RULES Procedural regulations:

General aviation operators and service providers in Washington, DC, area; reimbursement procedures, 58546-58569 06-8250 Treasury Treasury Department See Community Development Financial Institutions Fund See Comptroller of the Currency See Foreign Assets Control Office See Thrift Supervision Office Separate Parts In This Issue Part II Personnel Management Office, 58680-58713 06-8426 Part III Federal Trade Commission, 58716-58734 06-8524 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 71 192 Wednesday, October 4, 2006 Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-24697; Directorate Identifier 2006-NM-045-AD; Amendment 39-14781; AD 2006-20-11] RIN 2120-AA64 Airworthiness Directives;

Boeing Model 757-200, -200PF, and -200CB Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive

(AD)for certain Boeing Model 757-200, -200PF, and -200CB series airplanes. This AD requires doing initial and repetitive detailed or high frequency eddy current inspections for cracks around the rivets at the upper fastener row of the skin lap splice of the fuselage, and repairing any crack found. This AD results from a report indicating that certain rivets were incorrectly installed in some areas of the skin lap splices during production because they were drilled with a countersink that was too deep. We are issuing this AD to detect and correct premature fatigue cracking at certain skin lap splice locations of the fuselage, and consequent rapid decompression of the airplane. DATES: This AD becomes effective November 8, 2006. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of November 8, 2006. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Dennis Stremick, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6450; fax

(425)917-6590. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive

(AD)docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone

(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that would apply to certain Boeing Model 757-200, -200PF, and -200CB series airplanes. That NPRM was published in the **Federal Register** on May 9, 2006 (71 FR 26875). That NPRM proposed to require doing initial and repetitive detailed or high frequency eddy current

(HFEC)inspections for cracks around the rivets at the upper fastener row of the skin lap splice of the fuselage, and repairing any crack found. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Support for NPRM American Airlines agrees with the NPRM and has no further comment at this time. NPRM Not Applicable Continental Airlines states that, based on the effectivity, the NPRM is not applicable to its 757 fleet. Request To Add Credit for Alternate Inspections Northwest Airlines

(NWA)and Air Transport Association (ATA), on behalf of member airlines, ask that, to avoid unnecessary processing of an alternative method of compliance (AMOC), credit be allowed in this AD for accomplishing the lap splice inspections specified in Boeing Special Attention Service Bulletin 757-53-0090, dated June 2, 2005 (referenced in the NPRM as the source of service information for accomplishing the required actions). NWA states that paragraph 1.F. of the referenced service bulletin specifies that the lap splice inspections are approved as an AMOC to AD 2001-20-12, amendment 39-12460 (66 FR 52492, October 16, 2001) for the significant structural item

(SSI)inspections. NWA adds that AD 2006-11-11, amendment 39-14615 (71 FR 30278, May 26, 2006) supersedes AD 2001-20-12. We agree with the commenters. Accomplishing the requirements in paragraph

(f)of AD 2006-11-11 terminates the requirements in paragraph

(f)of this AD. We have added a new paragraph (i)(4) to this AD to specify that the inspections in the referenced service bulletin were approved as an AMOC to AD 2006-11-11. Request To Revise Service Information US Airways and ATA, on behalf of member airlines, recommend that, prior to release of a final rule, published repair information be provided in a subsequent revision to the referenced service bulletin or the Boeing 757-200 Structural Repair Manual (SRM). U.S. Airways states that published FAA-approved repair data as a means of compliance to the proposed rule will reduce the administrative burden of processing AMOCs between the operator and the Boeing Commercial Airplanes Delegation Option Authorization Organization. U.S. Airways adds that providing repair data in advance of the release of the final rule will result in expedited repairs and return airplanes to revenue service in a timely manner. We partially agree with the commenters. Having all repair procedures in one place can be simpler for operators, but there is no repair method defined as yet, and we do not know if or when Boeing will revise its service bulletin or SRM. Waiting to include a revised service bulletin or SRM in this action would delay addressing an unsafe condition. Therefore, we have made no change to the AD in this regard. Clarify Description of Production Rivets Boeing asks that we clarify the description of the production rivets installed in the skin lap splices by deleting “modified” when describing the rivets. Boeing states that the production rivets are commonly referred to as “Briles” rivets, and are manufactured with a 120-degree, modified shear head. Boeing notes that the current wording implies that the rivets were modified before installation on the aircraft. We acknowledge Boeing's request for clarification. We have changed the description in the Summary section and in paragraph

(d)of this AD as follows: “This AD results from a report indicating that certain rivets were incorrectly installed in some areas of the skin lap splices during production because they were drilled with a countersink that was too deep.” The Discussion section of the NPRM preamble does not reappear in the final rule. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. These changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance There are about 294 airplanes of the affected design in the worldwide fleet. This AD affects about 160 airplanes of U.S. registry. The following tables provide the estimated costs for U.S. operators to comply with either the detailed or HFEC inspections in this AD. Airplane group Work hours Average hourly labor rate Cost per airplane Estimated Costs for Detailed Inspection, per Inspection Cycle Group 1 7 $80 $560 Group 2 6 80 480 Group 3 12 80 960 Group 4 10 80 800 Estimated Costs for HFEC Inspection, per Inspection Cycle Group 1 12 80 960 Group 2 11 80 880 Group 3 20 80 1,600 Group 4 15 80 1,200 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

(1)Is not a “significant regulatory action” under Executive Order 12866;

(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **2006-20-11 Boeing:** Amendment 39-14781. Docket No. FAA-2006-24697; Directorate Identifier 2006-NM-045-AD. Effective Date

(a)This AD becomes effective November 8, 2006. Affected ADs

(b)None. Applicability

(c)This AD applies to Boeing Model 757-200, -200PF, and -200CB series airplanes, certificated in any category; as identified in Boeing Special Attention Service Bulletin 757-53-0090, dated June 2, 2005. Unsafe Condition

(d)This AD results from a report indicating that certain rivets were incorrectly installed in some areas of the skin lap splices during production because they were drilled with a countersink that was too deep. We are issuing this AD to detect and correct premature fatigue cracking at certain skin lap splice locations of the fuselage and consequent rapid decompression of the airplane. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Initial and Repetitive Inspections

(f)Do initial and repetitive detailed or high frequency eddy current inspections for cracking around the rivets at the upper fastener row of the skin lap splice of the fuselage by doing all the actions in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 757-53-0090, dated June 2, 2005, except as provided by paragraphs

(g)and

(h)of this AD. Do the inspections at the applicable times specified in Paragraph 1.E., “Compliance,” of the service bulletin; except where the service bulletin specifies a compliance time after the original release date of the service bulletin, this AD requires compliance after the effective date of this AD. Repair

(g)If any crack is found during any inspection required by this AD: Before further flight, repair the crack using a method approved in accordance with the procedures specified in paragraph

(i)of this AD. No Reporting Required

(h)Although Boeing Special Attention Service Bulletin 757-53-0090, dated June 2, 2005, recommends that inspection results be reported to the manufacturer, this AD does not include that requirement. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(2)Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office.

(3)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane.

(4)The inspections specified in paragraph

(f)of this AD are approved as an AMOC to paragraph

(h)of AD 2006-11-11, amendment 39-14615 for the inspections of Significant Structural Item

(SSI)53-30-07 and 53-60-07 (fuselage lap splices, left and right upper fastener row) listed in the May 2003 or June 2005 revision of the Boeing 757 Maintenance Planning Data

(MPD)Document D622N001-9. This AMOC applies only to the common areas inspected in accordance with Boeing Special Attention Service Bulletin 757-53-0090, dated June 2, 2005. All provisions of AD 2006-11-11 that are not specifically referenced in the above statements remain fully applicable and must be complied with as required by this AD. Operators may revise their FAA-approved maintenance or inspection program with these alternative inspections for common areas. Material Incorporated by Reference

(j)You must use Boeing Special Attention Service Bulletin 757-53-0090, dated June 2, 2005, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Room PL-401, Nassif Building, Washington, DC; on the Internet at *http://dms.dot.gov;* or at the National Archives and Records Administration (NARA). For information on the availability of this material at the NARA, call

(202)741-6030, or go to *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.* Issued in Renton, Washington, on September 22, 2006. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-16197 Filed 10-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2005-23145; Directorate Identifier 2000-NM-215-AD; Amendment 39-14777; AD 2006-20-08] RIN 2120-AA64 Airworthiness Directives; Empresa Brasileira de Aeronautica S.A. (EMBRAER) Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive (AD), which applies to all EMBRAER Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP airplanes. That AD currently requires repetitive inspections to detect cracking or failure of the rod ends of the aileron power control actuator (PCA), and corrective actions if necessary. This new AD requires the same repetitive inspections of additional parts at new inspection intervals for certain airplanes; provides new corrective actions; and provides an optional terminating action for the requirements of this AD. This AD results from the issuance of mandatory continuing airworthiness information by the Brazilian airworthiness authority. We are issuing this AD to detect and correct cracking or breaking of the rod ends and connecting fittings of the aileron PCA, which could result in reduced controllability of the airplane. DATES: This AD becomes effective November 8, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of November 8, 2006. The Director of the Federal Register approved the incorporation by reference of EMBRAER Alert Service Bulletin 145-27-A054, Change 01, dated February 17, 1999, on March 29, 1999 (64 FR 13892, March 23, 1999). ADDRESSES: You may examine the AD docket on the Internet at http://dms.dot.gov or in person at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC. Contact Empresa Brasileira de Aeronautica S.A. (EMBRAER), P.O. Box 343—CEP 12.225, Sao Jose dos Campos—SP, Brazil, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Todd Thompson, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-1175; fax

(425)227-1149. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive

(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that supersedes AD 99-05-04, amendment 39-11087 (64 FR 13892, March 23, 1999). The existing AD applies to all EMBRAER Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP airplanes. That NPRM was published in the **Federal Register** on December 7, 2005 (70 FR 72726). That NPRM proposed to continue to require repetitive inspections to detect cracking or failure of the rod ends of the aileron power control actuator (PCA), and corrective actions if necessary. That NPRM also proposed to require the same repetitive inspections of additional parts at new inspection intervals for certain airplanes to detect cracking or failure of the rod ends of the aileron power control actuator (PCA); provide new corrective actions; and provide an optional terminating action for the proposed requirements. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments that have been received on the NPRM. Request To Add Airplane Models to the Applicability ExpressJet requests that we include EMBRAER Model EMB-135 airplanes in the applicability of the NPRM. ExpressJet states that its Model EMB-135ER and -135LR airplanes that are currently subject to an 800-flight hour inspection interval, if subject to the AD, would be subject to a 1,000-flight hour inspection interval. ExpressJet asserts that these airplanes should be subject to the AD because they have the same subject parts. We do not agree. EMBRAER Model EMB-135 airplanes should not be subject to this AD because they already have the required structural modifications and reinforced aileron PCA-factory incorporated since the first production Model EMB-135 airplane. Regarding the difference in inspection intervals, we have confirmed with EMBRAER that there is no technical reason for the different inspection interval for Model EMB-135 airplanes from that of the airplanes subject to this AD. The different inspection intervals for these airplanes are a result of different maintenance program updating processes (Maintenance Review Board Report updating process versus a design change approval process) used for the different airplane models. EMBRAER has notified us that it is currently in the process of issuing a temporary revision to the EMBRAER EMB-135 Certification Maintenance Requirements that will change the inspection interval for those airplanes from 800 flight hours to 1000 flight hours-the same inspection interval specified in this AD for the subject airplanes. No change to the AD is necessary in this regard. Request To Reference Parts Manufacturer Approval

(PMA)Parts Modification and Replacement Parts Association (MARPA) requests that the language in the NPRM be changed to identify the new, reinforced parts by part number (P/N). MARPA states that the “new and improved” parts are not identified by P/N in the NPRM and asserts that, if they are identified by P/N in the service bulletin, the mandated installation of a certain P/N in the NPRM “could constitute a conflict with 14 CFR Section 21.303.” MARPA also requests that a qualifying statement, “or other FAA-approved part,” be appended. MARPA states that this qualification would remove the possible “conflict” by explicitly stating that other qualified PMA parts are permitted. We infer that MARPA would like the AD to permit installation of any equivalent PMA parts so that it is not necessary for an operator to request approval of an alternative method of compliance

(AMOC)in order to install an “equivalent” PMA part. Whether an alternative part is “equivalent” in adequately resolving the unsafe condition can only be determined on a case-by-case basis based on a complete understanding of the unsafe condition. Our policy is that, in order for operators to replace a part with one that is not specified in the AD, they must request an AMOC. This is necessary so that we can make a specific determination that an alternative part is or is not susceptible to the same unsafe condition. Therefore, we do not agree with MARPA's requests and have made no change to the AD in this regard. The AD provides a means of compliance for operators to ensure that the identified unsafe condition is addressed appropriately. For an unsafe condition attributable to a part, the AD normally identifies the replacement parts necessary to obtain that compliance. As stated in section 39.7 of the Federal Aviation Regulations (14 CFR 39.7), “Anyone who operates a product that does not meet the requirements of an applicable airworthiness directive is in violation of this section.” Unless an operator obtains approval for an AMOC, replacing a part with one not specified by the AD would make the operator subject to an enforcement action and result in a civil penalty. We acknowledge that there may be other ways of addressing this issue. Once we have thoroughly examined all aspects of this issue, including input from industry, and have made a final determination, we will consider whether our policy regarding PMA parts in ADs needs to be revised. However, we consider that to delay this AD action would be inappropriate, since we have determined that an unsafe condition exists and that replacement of certain parts must be accomplished to ensure continued safety. Therefore, no change to the AD is necessary in this regard. In response to MARPA's statement regarding a “conflict with FAR 21.303,” under which the FAA issues PMAs, this statement appears to reflect a misunderstanding of the relationship between ADs and the certification procedural regulations of part 21 of the Federal Aviation Regulations (14 CFR part 21). Those regulations, including section 21.303 of the Federal Aviation Regulations (14 CFR 21.203), are intended to ensure that aeronautical products comply with the applicable airworthiness standards. But ADs are issued when, notwithstanding those procedures, we become aware of unsafe conditions in these products or parts. Therefore, an AD takes precedence over design approvals when we identify an unsafe condition, and mandating installation of a certain P/N in an AD is not at variance with section § 21.303. Request To Address Defective PMA Parts MARPA notes that the P/Ns cited in the NPRM reflect both original equipment manufacturer

(OEM)and PMA parts “approved by identicality under license to Parker Hannifin Company.” The commenter believes that the requirements of the AD should apply equally to the OEM and PMA parts. We do not agree that it is necessary to specify whether an identified part is made by the OEM or by the holder of a PMA. The P/Ns of the affected parts are the information that is necessary to comply with the requirements of this AD and those P/Ns are clearly identified in the AD. Therefore, no change has been made to the final rule in this regard. Request To Use Serviceable Parts ExpressJet also asks that we revise the NPRM to allow use of serviceable parts in lieu of new parts for replacement/installation of an aileron PCA. ExpressJet states that it completed the requirements of this AD some time ago and that they used parts that were serviceable, but may not have been new. We agree. It is our policy to allow operators to use serviceable parts in lieu of new parts if a serviceable part exists and that part is not subject to the unsafe condition addressed by the AD and will adequately ensure long-term continued operational safety by its use. Therefore, we have changed this final rule to allow use of serviceable parts for the replacement/installation of an aileron PCA. Request To Add Service Information ExpressJet asks that we add the service information identified in the table below as acceptable methods of compliance for the requirements of the paragraphs also specified in the table below. ExpressJet notes that the technical content of these service bulletins is the same as in the later revisions already cited in the NPRM as the appropriate sources of service information for the requirements of those paragraphs. Service Information Requested for Inclusion in AD Add this service bulletin as an acceptable method of compliance— For the requirements of paragraph(s)— Approved as an AMOC to— EMBRAER Service Bulletin 145-27-0062, Change 02, dated September 12, 2000 Paragraph

(j)None. EMBRAER Service Bulletin 145-57-0019, Change 01, dated March 30, 2000 Paragraphs (k), (l), and (n)(2) AD 99-05-04. EMBRAER Service Bulletin 145-27-0061, dated October 19, 1999 Paragraphs

(k)and (n)(2) None. EMBRAER Service Bulletin 145-27-0061, Change 01, dated October 29, 1999 Paragraphs

(k)and (n)(2) AD 99-05-04. We agree with ExpressJet's request. We have reviewed these service bulletins and have determined that the technical content of each is essentially the same as those already referenced in the NPRM for the applicable actions. Therefore, we have added these service bulletins to the applicable paragraphs as acceptable methods of compliance for the applicable requirements of this final rule. Conclusion We have carefully reviewed the available data, including the comments that have been received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance The following table provides the estimated costs for U.S. operators to comply with this AD. Estimated Costs Action Work hours Average labor rate per hour Parts Cost per airplane Number of U.S.-registered airplanes Fleet cost Inspections (required by AD 99-05-04) 1 $65 None $65, per inspection cycle 661 $42,965, per inspection cycle. Inspections (new action for airplanes subject to EMBRAER Service Bulletin 145-27-0054) 1 65 None $65, per inspection cycle 661 $42,965, per inspection cycle. Replacing the PCA connecting fittings (new action) 24 65 $19,817 $21,377 661 $14,130,197. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

(1)Is not a “significant regulatory action” under Executive Order 12866;

(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

(FAA)amends § 39.13 by removing amendment 39-11087 (64 FR 13892, March 23, 1999) and by adding the following new airworthiness directive (AD): **2006-20-08 Empresa Brasileira de Aeronautica S.A. (EMBRAER):** Amendment 39-14777. Docket No. FAA-2005-23145; Directorate Identifier 2000-NM-215-AD. Effective Date

(a)This AD becomes effective November 8, 2006. Affected ADs

(b)This AD supersedes AD 99-05-04. Applicability

(c)This AD applies to all EMBRAER Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP airplanes, certificated in any category. Unsafe Condition

(d)This AD results from the issuance of mandatory continuing airworthiness information by the Brazilian airworthiness authority. We are issuing this AD to detect and correct cracking or breaking of the rod ends and connecting fittings of the aileron power control actuator (PCA), which could result in reduced controllability of the airplane. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Restatement of Certain Requirements of AD 99-05-04 Initial and Repetitive Inspections

(f)Within 24 hours (1 day) after March 29, 1999 (the effective date of AD 99-05-04), perform a detailed inspection to detect cracking or failure of the rod ends of the PCA at the aileron and wing connection points, in accordance with EMBRAER Alert Service Bulletin 145-27-A054, Change 01, dated February 17, 1999; or EMBRAER Service Bulletin 145-27-0054, Change 03, dated March 30, 2000, or Change 04, dated February 14, 2005. Repeat the inspection in accordance with the service bulletin thereafter at intervals not to exceed 3 days or 25 flight hours, whichever occurs later, until the initial inspection required by paragraph

(h)of this AD is done. Note 1: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, *etc.* , may be necessary. Surface cleaning and elaborate procedures may be required.” Corrective Actions

(g)If any cracked or failed rod end is detected during any inspection performed in accordance with paragraph

(f)of this AD, prior to further flight, replace the aileron PCA with a new or serviceable part having the same part number, in accordance with EMBRAER Alert Service Bulletin 145-27-A054, Change 01, dated February 17, 1999; or EMBRAER Service Bulletin 145-27-0062, Revision 03, dated December 11, 2002, or Revision 04, dated March 8, 2004. After the effective date of this AD, replace the aileron PCA only with a new or serviceable part that is listed in the “New P/N” column in section 2. “Material—Cost and Availability” of EMBRAER Service Bulletin 145-27-0062, Revision 03, dated December 11, 2002, or Revision 04, dated March 8, 2004. Do the replacement in accordance with the Accomplishment Instructions of the service bulletin. Where the service bulletin specifies to send parts to the parts manufacturer, that action is not required by this AD. New Requirements of This AD Repetitive Inspections

(h)At the applicable “Initial Inspection” compliance time in Table 1 of this AD: Do a general visual inspection to detect cracking or failure of the rod ends and connecting fittings in the left- and right-hand PCAs at the aileron and wing structure connection points, in accordance with Part I of the Accomplishment Instructions of EMBRAER Service Bulletin 145-27-0054, Change 03, dated March 30, 2000, or Change 04, dated February 14, 2005. Repeat the inspection at the applicable “Repeat” interval in Table 1 of this AD. Doing the initial inspection in accordance with paragraph

(h)of this AD terminates the repetitive inspections in paragraph

(f)of this AD. Table 1.—Initial and Repetitive Inspection Intervals For airplanes that have PCAs with part number (P/N)— Do the initial inspection— Repeat the inspection— 394900-1003 or 394900-1005 Within 3 days after the effective date of this AD At intervals not to exceed 25 flight hours or 3 days, whichever occurs later. 394900-1007 Within 14 days after the effective date of this AD At intervals not to exceed 100 flight hours or 14 days, whichever occurs later. 418800-1001, 418800-1003, 418800-9003, 418800-1005, 418800-9005, 418800-1007, or 418800-9007; and that have new reinforced PCA fittings installed in accordance with paragraph

(k)or

(l)of this AD Within 500 flight hours after the effective date of this AD At intervals not to exceed 500 flight hours. Note 2: For the purposes of this AD, a general visual inspection is “A visual examination of an interior or exterior area, installation, or assembly to detect obvious damage, failure, or irregularity. This level of inspection is made from within touching distance unless otherwise specified. A mirror may be necessary to ensure visual access to all surfaces in the inspection area. This level of inspection is made under normally available lighting conditions such as daylight, hangar lighting, flashlight, or droplight and may require removal or opening of access panels or doors. Stands, ladders, or platforms may be required to gain proximity to the area being checked.” No Cracked or Failed PCA Rod Ends or Connecting Fittings

(i)If no cracked or failed PCA rod end or connecting fitting is found during any inspection required by paragraph

(h)of this AD: Repeat the inspection required by paragraph

(h)of this AD at the applicable time specified in Table 1 of this AD. Corrective Actions for Cracked or Failed Rod Ends

(j)If any cracked or failed rod end is found during any inspection required by paragraph

(h)of this AD: Before further flight, replace the aileron PCA with a new or serviceable part as listed in the “New P/N” column in section 2. “Material—Cost and Availability” of EMBRAER Service Bulletin 145-27-0062, Change 02, dated September 12, 2000; Revision 03, dated December 11, 2002; or Revision 04, dated March 8, 2004. Do the replacement in accordance with the Accomplishment Instructions of the service bulletin. Where the service bulletin specifies to send parts to the parts manufacturer, that action is not required by this AD. Corrective Actions for Cracked or Failed PCA Connecting Fittings

(k)If any cracked or failed PCA connecting fitting at the wing or aileron side is found during any inspection required by paragraph

(h)of this AD: Before further flight, replace the PCA connecting fitting with a new, reinforced fitting, in accordance with Part I of the Accomplishment Instructions of EMBRAER Service Bulletin 145-57-0019, Change 01, dated March 30, 2000, Change 02, dated May 3, 2001, or Change 03, dated February 11, 2004; and EMBRAER Service Bulletin 145-27-0061, dated October 19, 1999, Change 01, dated October 29, 1999, Change 02, dated September 12, 2000, Change 03, dated March 14, 2001, or Revision 04, dated August 11, 2004. PCA Connecting Fitting Replacement

(l)For airplanes with aileron PCAs with P/N 394900-1003, 394900-1005, 394900-1007, 418800-1001, 418800-1003, 418800-9003, 418800-1005, 418800-9005, 418800-1007, or 418800-9007: Except as required by paragraph

(k)of this AD, at the applicable time in paragraphs (l)(1) and (l)(2) of this AD, replace the aileron PCA connecting fittings with new, reinforced fittings, in accordance with Part I of the Accomplishment Instructions of EMBRAER Service Bulletin 145-57-0019, Change 01, dated March 30, 2000, Change 02, dated May 3, 2001, or Change 03, dated February 11, 2004; and Part I of the Accomplishment Instructions of EMBRAER Service Bulletin 145-27-0061, Change 02, dated September 12, 2000, Change 03, dated March 14, 2001, or Revision 04, dated August 11, 2004.

(1)For airplanes with PCAs with P/N 394900-1003, 394900-1005, or 394900-1007: At the later of the times in paragraphs (l)(1)(i) and (l)(1)(ii) of this AD.

(i)Before the airplane accumulates 6,000 total flight hours.

(ii)Within 3 days or 25 flight hours after the effective date of this AD, whichever occurs later.

(2)For airplanes with PCAs with P/N 418800-1001, 418800-1003, 418800-9003, 418800-1005, 418800-9005, 418800-1007, or 418800-9007: Before the airplane accumulates 6,000 total flight hours, or within 600 flight hours after the effective date of this AD, whichever occurs later.

(m)For airplanes with PCAs with P/N 418800-1001, 418800-1003, 418800-9003, 418800-1005, 418800-9005, 418800-1007, or 418800-9007: At the applicable time specified in Table 1 of this AD following the replacement specified in paragraph

(l)of this AD, do a general visual inspection of the replaced part using a method approved by either the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the Departmento de Aviacao Civil (or its delegated agent). Doing the inspections in accordance with EMBRAER EMB-145 Aircraft Maintenance Manual Task 27-12-01-212-002-A00, “Inspect (Visual Inspection) Aileron PCA Rod Ends/Fitting Lugs for Integrity and General Condition,” is one approved method. Thereafter, repeat the inspection at the applicable time specified in Table 1 of this AD. Optional Terminating Action

(n)Airplanes that meet all conditions in paragraphs (n)(1), (n)(2), (n)(3), and (n)(4) of this AD are not subject to the requirements of paragraphs (f), (h), (i), (j), (k), (l), and

(m)of this AD.

(1)The airplane is equipped with new aileron PCAs with P/N 418800-1001, 418800-1003, 418800-9003, 418800-1005, 418800-9005, 418800-1007, or 418800-9007.

(2)The airplane is equipped with new, reinforced PCA fittings installed in production or in accordance with the Accomplishment Instructions of EMBRAER Service Bulletin 145-57-0019, Change 01, dated March 30, 2000, Change 02, dated May 3, 2001, or Change 03, dated February 11, 2004; and EMBRAER Service Bulletin 145-27-0061, dated October 19, 1999, Change 01, dated October 29, 1999, Change 02, dated September 12, 2000, Change 03, dated March 14, 2001, or Revision 04, dated August 11, 2004; as applicable.

(3)The airplane is equipped with an aileron damper with P/N 41012130-103 or 41012130-104 that was installed in production or in accordance with the Accomplishment Instructions of any service bulletin listed in Table 2 of this AD. Table 2.—Aileron Damper Installation Service Bulletins EMBRAER service bulletin Revision level Date 145-27-0063 Original March 30, 2000. 145-27-0063 Change 01 October 2, 2000. 145-27-0063 Change 02 March 22, 2002. 145-27-0063 Change 03 May 27, 2004. 145-27-0063 Revision 04 October 13, 2004. 145-27-0063 Revision 05 March 16, 2005.

(4)The general visual inspections for structural integrity of the aileron PCA and the aileron damper terminals and fittings at the wing and aileron sides at intervals not exceeding 1,000 flight hours, established in the EMBRAER Model EMB-145 Maintenance Review Board document, are implemented. Alternative Methods of Compliance (AMOCs) (o)(1) The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(3)Alternative methods of compliance approved previously in accordance with AD 99-05-04 are approved as alternative methods of compliance with this AD. Related Information

(p)Brazilian airworthiness directive 1999-02-01R6, dated June 21, 2004, also addresses the subject of this AD. Incorporation by Reference

(q)You must use the EMBRAER service bulletins identified in Table 3 of this AD, as applicable, to perform the actions that are required by this AD, unless the AD specifies otherwise. If accomplished, you must use the EMBRAER service bulletins identified in Table 4 of this AD, to perform the aileron damper installation provided in paragraph (n)(3) of this AD, unless the AD specifies otherwise. Table 3.—Required Service Bulletins Incorporated by Reference Service bulletin Revision/change level Date EMBRAER Alert Service Bulletin 145-27-A054 Change 01 February 17, 1999. EMBRAER Service Bulletin 145-27-0054 Change 03 March 30, 2000. EMBRAER Service Bulletin 145-27-0054 Change 04 February 14, 2005. EMBRAER Service Bulletin 145-27-0061 Original October 19, 1999. EMBRAER Service Bulletin 145-27-0061 Change 01 October 29, 1999. EMBRAER Service Bulletin 145-27-0061 Change 02 September 12, 2000. EMBRAER Service Bulletin 145-27-0061 Change 03 March 14, 2001. EMBRAER Service Bulletin 145-27-0061 Revision 04 August 11, 2004. EMBRAER Service Bulletin 145-27-0062 Change 02 September 12, 2000. EMBRAER Service Bulletin 145-27-0062 Revision 03 December 11, 2002. EMBRAER Service Bulletin 145-27-0062 Revision 04 March 8, 2004. EMBRAER Service Bulletin 145-57-0019 Change 01 March 30, 2000. EMBRAER Service Bulletin 145-57-0019 Change 02 May 3, 2001. EMBRAER Service Bulletin 145-57-0019 Change 03 February 11, 2004. Table 4.—Aileron Damper Installation Service Bulletins Incorporated by Reference EMBRAER Service Bulletin Revision level Date 145-27-0063 Original March 30, 2000. 145-27-0063 Change 01 October 2, 2000. 145-27-0063 Change 02 March 22, 2002. 145-27-0063 Change 03 May 27, 2004. 145-27-0063 Revision 04 October 13, 2004. 145-27-0063 Revision 05 March 16, 2005. EMBRAER Service Bulletin 145-57-0019, Change 03, dated February 11, 2004, contains the following effective pages: Page No. Change level shown on page Date shown on page 1-4 03 February 11, 2004. 5-71 02 May 3, 2001. EMBRAER Service Bulletin 145-27-0063, Change 01, dated October 2, 2000, contains the following effective pages: Page No. Change level shown on page Date shown on page 1-4 01 October 2, 2000. 5-24 00 March 20, 2000.

(1)The Director of the Federal Register approved the incorporation by reference of the documents identified in Table 5 of this AD in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Table 5.—New Material Incorporated by Reference EMBRAER Service Bulletin Revision/change level Date 145-27-0054 Change 03 March 30, 2000. 145-27-0054 Change 04 February 14, 2005. 145-27-0061 Original October 19, 1999. 145-27-0061 Change 01 October 29, 1999. 145-27-0061 Change 02 September 12, 2000. 145-27-0061 Change 03 March 14, 2001. 145-27-0061 Revision 04 August 11, 2004. 145-27-0062 Change 02 September 12, 2000. 145-27-0062 Revision 03 December 11, 2002. 145-27-0062 Revision 04 March 8, 2004. 145-27-0063 Original March 30, 2000. 145-27-0063 Change 01 October 2, 2000. 145-27-0063 Change 02 March 22, 2002. 145-27-0063 Change 03 May 27, 2004. 145-27-0063 Revision 04 October 13, 2004. 145-27-0063 Revision 05 March 16, 2005. 145-57-0019 Change 01 March 30, 2000. 145-57-0019 Change 02 May 3, 2001. 145-57-0019 Change 03 February 11, 2004.

(2)The Director of the Federal Register approved the incorporation by reference of EMBRAER Alert Service Bulletin 145-27-A054, Change 01, dated February 17, 1999, on March 29, 1999 (64 FR 13892, March 23, 1999).

(3)Contact Empresa Brasileira de Aeronautica S.A. (EMBRAER), P.O. Box 343—CEP 12.225, Sao Jose dos Campos—SP, Brazil, for a copy of this service information. You may review copies at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street SW., Room PL-401, Nassif Building, Washington, DC; on the Internet at *http://dms.dot.gov* ; or at the National Archives and Records Administration (NARA). For information on the availability of this material at the NARA, call

(202)741-6030, or go to *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* . Issued in Renton, Washington, on September 15, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. FR Doc. E6-15861 Filed 10-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-24256; Directorate Identifier 2006-NM-010-AD; Amendment 39-14782; AD 2006-20-12] RIN 2120-AA64 Airworthiness Directives; McDonnell Douglas Model 717-200 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive

(AD)for certain McDonnell Douglas Model 717-200 airplanes. This AD requires replacing the lightning critical clamp bases of the fuel tank vent system with improved clamp bases; and checking the electrical bond of the modified self-bonding mounting clamps and corrective action if necessary. This AD results from an investigation that revealed the aluminum foil strip on the nylon base of the ground clamps can fracture or separate from the base. We are issuing this AD to ensure that the fuel pipes are properly bonded to the airplane structure. Improper bonding could prevent electrical energy from a lightning strike from dissipating to the airplane structure, which could result in a fuel tank explosion. DATES: This AD becomes effective November 8, 2006. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of November 8, 2006. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street SW., Nassif Building, Room PL-401, Washington, DC. Contact Boeing Commercial Airplanes, Long Beach Division, 3855 Lakewood Boulevard, Long Beach, California 90846, Attention: Data and Service Management, Dept. C1-L5A (D800-0024), for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Serj Harutunian, Aerospace Engineer, Propulsion Branch, ANM-140L, FAA, Los Angeles Aircraft Certification Office, 3960 Paramount Boulevard, Lakewood, California 90712-4137; telephone

(562)627-5254; fax

(562)627-5210. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive

(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that would apply to certain McDonnell Douglas Model 717-200 airplanes. That NPRM was published in the **Federal Register** on March 28, 2006 (71 FR 15351). That NPRM proposed to require replacing the lightning critical clamp bases of the fuel tank vent system with improved clamp bases; and checking the electrical bond of the modified self-bonding mounting clamps. Actions Since NPRM Was Issued Since we issued the NPRM, Boeing has released Service Bulletin 717-28-0004, Revision 3, dated June 21, 2006. In the NPRM, we referenced Revision 2 of the service bulletin, dated March 11, 2005, as the appropriate source of service information. The procedures in Revision 3 are essentially the same as those in Revision 2. Revision 3 also provides detailed instructions for checking the electrical bond of the modified self-bonding mounting clamps and accomplishing corrective actions if necessary. If the electrical conductivity of the surface is greater than 2.5 milliohms, the corrective actions include surface prepping and applying a chemical conversion coat to the surface of the structural bracket and vent pipe. (The NPRM proposed to repair the electrical bond of the mounting clamp according to a method approved by the Manager, Los Angeles Aircraft Certification Office (ACO), FAA, if any electrical bond fails the check. The NPRM specified that Chapter 28-00-00 of the Boeing 717 Aircraft Maintenance Manual and Chapter 20-50-01 of the Boeing 717 Standard Wiring Practices Manual

(SWPM)are one approved method.) We have revised paragraph

(f)of this AD to reference Revision 3 as the appropriate source of service information for replacing the lightning critical clamp bases of the fuel tank vent system with improved clamp bases; and checking the electrical bond of the modified self-bonding mounting clamps. We have also revised paragraph

(f)to allow operators to either repair any electrical bond in accordance with Revision 3 of the service bulletin, or according to a method approved by the Manager, Los Angeles ACO. In addition, we have added a new paragraph

(g)to this AD, giving credit for actions done before the effective date of this AD in accordance with Revision 2. We have also revised the applicability of paragraph

(c)of this AD to reference Revision 3. Revision 2 and Revision 3 both apply to Model 717-200 airplanes having fuselage numbers 5002 through 5121 inclusive; therefore, the applicability of this AD has not changed. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comment received. Support for the NPRM Boeing and AirTran Airways support the NPRM. Request for Clarification AirTran Airways states that Boeing Service Bulletin 717-28-0004 refers to Chapter 20-50-01 of the Boeing DC, MD, and 717 SWPM, Class “L,” for instructions on accomplishing a check of the electrical bonds. AirTran Airways points out that Class “L” is not identified in Chapter 20-50-01 of the SWPM; instead, that chapter provides the maximum direct current

(DC)resistance and path for lightning protection. Therefore, AirTran requests clarification of Class “L.” As stated previously, since the NPRM was issued, Boeing has issued Revision 3 of the service bulletin and that revision is cited in this final rule. Revision 3 deletes the reference to Class “L.” Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance There are about 120 airplanes of the affected design in the worldwide fleet. This AD affects about 92 airplanes of U.S. registry. The required actions take about 16 work hours per airplane, at an average labor rate of $80 per work hour. Required parts cost about $239 per airplane. Based on these figures, the estimated cost of the AD for U.S. operators is $139,748, or $1,519 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

(1)Is not a “significant regulatory action” under Executive Order 12866;

(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **2006-20-12 McDonnell Douglas:** Amendment 39-14782. Docket No. FAA-2006-24256; Directorate Identifier 2006-NM-010-AD. Effective Date

(a)This AD becomes effective November 8, 2006. Affected ADs

(b)None. Applicability

(c)This AD applies to McDonnell Douglas Model 717-200 airplanes, certificated in any category; as identified in Boeing Service Bulletin 717-28-0004, Revision 3, dated June 21, 2006. Unsafe Condition

(d)This AD results from an investigation that revealed the aluminum foil strip on the nylon base of the ground clamps can fracture or separate from the base. We are issuing this AD to ensure that the fuel pipes are properly bonded to the airplane structure. Improper bonding could prevent electrical energy from a lightning strike from dissipating to the airplane structure, which could result in a fuel tank explosion. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Replace the Grounded Clamp Bases

(f)Within 78 months after the effective date of this AD, replace the lightning critical clamp bases of the fuel tank vent system with improved clamp bases, in accordance with Table 1 of Figure 1 of the Accomplishment Instructions of Boeing Service Bulletin 717-28-0004, Revision 3, dated June 21, 2006. Before further flight after the replacement, check the electrical bond of the modified self-bonding mounting clamps in accordance with the Accomplishment Instructions of the service bulletin. If any electrical bond fails the check, before further flight, repair the electrical bond of the mounting clamp in accordance with the service bulletin; or according to a method approved by the Manager, Los Angeles Aircraft Certification Office (ACO), FAA. Chapter 28-00-00 of the Boeing 717 Aircraft Maintenance Manual and Chapter 20-50-01 of the Boeing DC, MD, and 717 Standard Wiring Practices Manual are one approved method. Credit for Previous Service Bulletin

(g)Actions done before the effective date of this AD in accordance with Boeing Service Bulletin 717-28-0004, Revision 2, dated March 11, 2005, are acceptable for compliance with the requirements of paragraph

(f)of this AD. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, Los Angeles ACO, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(i)You must use Boeing Service Bulletin 717-28-0004, Revision 3, dated June 21, 2006, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Boeing Commercial Airplanes, Long Beach Division, 3855 Lakewood Boulevard, Long Beach, California 90846, Attention: Data and Service Management, Dept. C1-L5A (D800-0024), for a copy of this service information. You may review copies at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street SW., Room PL-401, Nassif Building, Washington, DC; on the Internet at *http://dms.dot.gov;* or at the National Archives and Records Administration (NARA). For information on the availability of this material at the NARA, call

(202)741-6030, or go to *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.* Issued in Renton, Washington, on September 25, 2006. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-16199 Filed 10-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 43 Recording of Major Repairs and Major Alterations AGENCY: Federal Aviation Administration, DOT. ACTION: Final rule; technical amendment. SUMMARY: The Federal Aviation Administration

(FAA)is making a minor technical change to aviation repair stations' instructions in Part 43 on how to send required repair and alteration data to the FAA. We are making this change to take advantage of newer and more efficient methods of collecting aviation maintenance data. EFFECTIVE DATES: Effective on November 3, 2006. FOR FURTHER INFORMATION CONTACT: Robert Stockslager, AFS-340, Aircraft Maintenance Division, General Aviation and Repair Station Branch, AFS-340, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone

(717)774-8271, extension 258; facsimile

(717)774-8327, e-mail *bob.stockslager@faa.gov.* SUPPLEMENTARY INFORMATION: The FAA is amending Part 43 to change the location used to submit FAA Form 337, Major Repair and Alteration. We are changing the location from “local Flight Standards District Office” to the FAA's Mike Monroney Aeronautical Center in Oklahoma City, Oklahoma. The purpose of this change is to centralize the processing of the Form 337 documents and facilitate FAA acceptance of electronic submissions of Form 337 documents in the future. The change does not affect any other requirements of Part 43. Technical Amendment The technical amendment will change the location for submitting Form 337 documents. List of Subjects in 14 CFR Part 43 Aircraft, Aviation safety, Reporting and recordkeeping requirements. Title 14 of the Code of Federal Regulations

(CFR)Part 43 is amended as follows: PART 43—MAINTENANCE, PREVENTIVE MAINTENANCE, REBUILDING, AND ALTERATION 1. The authority citation for Part 43 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701, 44703, 44705, 44707, 44711, 44713, 44717, 44725. 2. Revise Part 43, Appendix B, paragraph (a)(3) to read as follows: Appendix B

(a)* * *

(1)* * *

(2)* * *

(3)Forward a copy of that form to the FAA Aircraft Registration Branch in Oklahoma City, Oklahoma, within 48 hours after the aircraft, airframe, aircraft engine, propeller, or appliance is approved for return to service. Issued in Washington, DC on September 15, 2006. Ida M. Klepper, Acting Director, Office of Rulemaking. [FR Doc. E6-16405 Filed 10-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 93 [Docket No. FAA-2005-20704; Amendment No. 93-85] Congestion and Delay Reduction at Chicago O'Hare International Airport AGENCY: Federal Aviation Administration, DOT. ACTION: Final rule; notice of office of management and budget approval for information collection. SUMMARY: This document announces the Office of Management and Budget's

(OMB)approval of the information collection requirement in the final rule published on August 29, 2006 (FR 71 51382). The sections of the final rule pending approval of this information collection will become effective on the date included in the published final rule; October 29, 2006. DATES: *Effective Date:* October 29, 2006. Congestion and Delay Reduction at Chicago O'Hare International Airport published in the **Federal Register** on August 29, 2006. FAA received OMB approval for the information collection requirement on August 29, 2006. FOR FURTHER INFORMATION CONTACT: Dr. Jeffrey Wharff, Office of Policy and Plans, APO-200, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone

(202)267-3274. SUPPLEMENTARY INFORMATION: Background On August 29, 2006, the FAA published the final rule, “Congestion and Delay Reduction at Chicago O'Hare International Airport.” In the final rule, the FAA adopts regulations to address persistent delays from overscheduling at O'Hare International Airport. In the DATES section of the final rule, we noted that affected parties did not need to comply with the information collection requirements in certain sections of the rule until the Office of Management and Budget

(OMB)approved the FAA's request. In accordance with the Paperwork Reduction Act, OMB approved the FAA's request for new information collection on August 29, 2006, and assigned the information collection OMB Control Number 2120-0716. The control number, granted on the day the final rule was published, was not available in time to include in that publication. The request was approved by OMB without change and expires on August 31, 2009. 49 U.S.C. 106(g), 40113, 40119, 41706, 44101, 44701-44702, 44705, 44709-44711, 44713, 44716-44717, 44722, 46105, grants authority to the Administrator to publish this notice. The final rule (FR 71 51382) and all sections previously pending OMB information collection approval will be effective October 29, 2006. Issued in Washington, DC, on September 26, 2006. Brenda D. Courtney, Acting Director, Office of Rulemaking. [FR Doc. E6-16406 Filed 10-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF STATE 22 CFR Part 51 [Public Notice: 5571] RIN: 1400-AC27 Passport Procedures—Amendment to Restriction of Passports Regulation AGENCY: State Department. ACTION: Final rule. SUMMARY: This final rule amends part 51 at Title 22 of the Code of Federal Regulations to change a ground of denying, revoking or canceling a passport. The final rule amends the existing regulation at section 51.70(a) in Title 22 of the Code of Federal Regulations which requires the Secretary of State to deny a passport to a person who has been certified by the Secretary of Health and Human Services to be in arrears of child support by an amount exceeding $5000 by changing it to $2500 in accordance with Section 7303 of Public Law 109-171, the Deficit Reduction Act of 2005. EFFECTIVE DATE: October 1, 2006. FOR FURTHER INFORMATION CONTACT: Consuelo Pachon, Office of Passport Policy, Planning and Advisory Services, Bureau of Consular Affairs, 2100 Pennsylvania, Avenue, NW., Suite 3000, Washington, DC, telephone number 202-663-2662. SUPPLEMENTARY INFORMATION: Section 452(k) of the Social Security Act, 42 U.S.C. 652 (the “Act”) required that the Secretary of Health and Human Services transmit to the Secretary of State a certification by a State agency in accordance with the requirements of Section 42 U.S.C. 654(31) of the Act of a determination that an individual owes arrearages of child support in an amount exceeding $5000 and requires that the Secretary of State shall upon receipt of such certification by the Secretary of Health and Human Services, refuse to issue a passport to such individual. The Act also authorizes the Secretary to revoke, restrict, or limit a passport previously issued to such an individual. Section 51.70(a) of the passport regulations in Title 22 of the Code of Federal Regulations provides the grounds for denial of passports for other than non-citizenship. Section 51.70(a)(8) to Title 22 of the Code of Federal Regulations requires that the Secretary of State refuse to issue a passport, except one limited for direct return to the United States, to a person who has been certified by the Secretary of Health and Human Services to be in arrears of child support by an amount exceeding $5000. Section 7303 of the Deficit Reduction Act of 2005, Public Law 109-171, amended Section 452(k)(1) (42 U.S.C. 652(k)(1)) by decreasing the amount of child support arrearage triggering passport denial from $5,000 to $2,500. Regulatory Findings Administrative Procedure Act No notice of proposed rulemaking is required under the Administrative Procedure Act

(APA)because this regulation falls under the exception for good cause of 5 U.S.C. 553(b)(3)(B) in that notice to the public is unnecessary. The requirements of Public Law 109-171 are clear, do not allow for agency discretion, and permit no alternative interpretation. Regulatory Flexibility Act The DOS, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities. Unfunded Mandates Act of 1995 This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any 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. Small Business Regulatory Enforcement Fairness Act of 1996 This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign based companies in domestic and import markets. Executive Order 12866 The Department of State does not consider this rule to be a “significant regulatory action” under Executive Order 12866, section 3(f). In addition, the Department is exempt from Executive Order 12866 except to the extent that it is promulgating regulations in conjunction with a domestic agency that are significant regulatory actions. The Department has nevertheless reviewed the regulation to ensure its consistency with the regulatory philosophy and principles set forth in that Executive Order. Executive Order 13132 This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. Paperwork Reduction Act This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35. List of Subjects in 22 CFR Part 51 Administrative practice and procedure, Passports and visas. Accordingly, for the reasons set forth in the preamble, the part 51 to Title 22 is amended as follows: 22 CFR PART 51—PASSPORTS 1. The authority citation for part 51 is revised to read as follows: Authority: 22 U.S.C. 211a, 213, 2651a, 2671(d)(3), 2714, and 3926; 31 U.S.C. 9701; E.O. 11295, 3 CFR, 1966-1970 Comp. p. 570; Sec. 236 Pub. L. 106-113, 113 stat. 1501A-430; 18 U.S.C. 1621(a)(2); 42 U.S.C. 652, as amended by Sec. 370 Pub. L. 104-193 and Sec. 7303 Pub. L. 109-171. 2. Section 51.70(a)(8) is amended by removing the phrase “$5,000.00” and adding in its place “$2,500.00”. Dated: September 20, 2006. Maura Harty, Assistant Secretary for Consular Affairs, Department of State. [FR Doc. E6-16387 Filed 10-3-06; 8:45 am] BILLING CODE 4710-06-P DEPARTMENT OF STATE 22 CFR Part 126 [Public Notice: 5570] Amendment to the International Traffic in Arms Regulations: Partial Lifting of Arms Embargo Against Haiti AGENCY: Department of State. ACTION: Final rule. SUMMARY: The Department of State is amending the International Traffic in Arms Regulations to reflect modifications to the U.S. arms embargo against Haiti. The embargo is revised to permit exports of defense articles and services that are destined for security units under the command of the Government of Haiti, or under the command of the United Nations

(UN)and UN-authorized missions, and to allow exports of personal protective clothing, including flak jackets and helmets, for use by personnel from the United Nations and other international organizations, representatives of the media, and development workers and associated personnel. EFFECTIVE DATE: October 4, 2006. ADDRESSES: Interested parties may submit comments at any time by any of the following methods: • *E-mail: DDTCResponseTeam@state.gov* with an appropriate subject line. • *Mail:* Department of State, Directorate of Defense Trade Controls, Office of Defense Trade Controls Policy, ATTN: Regulatory Change, 12th Floor, SA-1, Washington, DC 20522-0112. • *Fax:* 202-261-8199. • *Hand Delivery or Courier (regular work hours only):* Department of State, Directorate of Defense Trade Controls, Office of Defense Trade Controls Policy, ATTENTION: Regulatory Change, SA-1, 12th Floor, 2401 E Street, NW., Washington, DC 20037. Persons with access to the Internet may also view this notice by going to the regulations.gov Web site at: *http://www.regulations.gov/index.cfm.* Comments will be accepted at any time. FOR FURTHER INFORMATION CONTACT: Ann Ganzer, Office of Defense Trade Controls Policy, Department of State, 12th Floor, SA-1, Washington DC 20522-0112; Telephone 202-663-2792 or FAX 202-261-8199; e-mail: *DDTCResponseTeam@state.gov.* ATTN: Regulatory Change. SUPPLEMENTARY INFORMATION: On October 9, 1991 the United States suspended all previously issued license and approvals authorizing the export of or other transfers of defense articles and services to Haiti, and instituted a policy of denial for future applications for licenses and other approvals to export or otherwise transfer defense articles and services to Haiti. This step was taken after the overthrow by the Haitian military of the democratically elected government of Haiti. In 1993 the United Nations Security Council imposed an arms embargo against Haiti, and on April 4, 1994 Section 126.1(a) of the International Traffic in Arms Regulations was amended to list Haiti as a country subject to United States embargo. The United Nations lifted its embargo in 1994 but the United States embargo was maintained for foreign policy reasons. In view of developments in Haiti, to include the inauguration of a democratically elected president, the U.S. embargo is being revised to permit exports of defense articles and services that are destined for security units under the command of the Government of Haiti, or under the command of the United Nations

(UN)and UN-authorized missions, as well as exports of personal protective clothing, including flak jackets and helmets, for use by personnel from the United Nations and other international organizations, representatives of the media, and development workers and associated personnel. The Department of State is amending the International Traffic in Arms Regulations by removing Haiti from the list of countries identified as subject to a United States arms embargo at 22 CFR 126.1(a) and by adding paragraph

(j)to 22 CFR 126.1 to clarify the modifications to the policy regarding Haiti. Regulatory Analysis and Notices Administrative Procedure Act This amendment involves a foreign affairs function of the United States and, therefore, is not subject to the procedures required by 5 U.S.C. 553 and 554. Regulatory Flexibility Act This rule does not require analysis under the Regulatory Flexibility Act. Unfunded Mandates Act of 1995 This rule does not require analysis under the Unfunded Mandates Reform Act. Small Business Regulatory Enforcement Fairness Act of 1996 This amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996. It will not have substantial direct effects on the States, the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Executive Orders 12372 and 13132 It is determined that this rule does not have sufficient federalism implications to warrant application of the consultation provisions of Executive Orders 12372 and 13132. Executive Order 12866 This amendment is exempt from review under Executive Order 12866, but has been reviewed internally by the Department of State to ensure consistency with the purposes thereof. Paperwork Reduction Act This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35. List of Subjects in 22 CFR Part 126 Arms and munitions, Exports. Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, part 126 is amended as follows: PART 126—GENERAL POLICIES AND PROVISIONS 1. The authority citation for part 126 continues to read as follows: Authority: Secs. 2, 38, 40, 42, and 71, Pub. L. 90-629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 11958, 2791, and 2797); 22 U.S.C. 2778; E.O. 11958, 42 FR 4311; 3 CFR, 1977 Comp., p. 79; 22 U.S.C. 2651a; 22 U.S.C. 287c; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; Sec.1225, Pub. L. 108-375. 2. Section 126.1 is amended by revising paragraph

(a)to read as follows and adding paragraph (j): § 126.1 Prohibited exports and sales to certain countries.

(a)*General.* It is the policy of the United States to deny licenses and other approvals for exports and imports of defense articles and defense services, destined for or originating in certain countries. This policy applies to Belarus, Cuba, Iran, Libya, North Korea, Syria and Vietnam. This policy also applies to countries with respect to which the United States maintains an arms embargo ( *e.g.* , Burma, China, Liberia, Somalia, and Sudan) or whenever an export would not otherwise be in furtherance of world peace and the security and foreign policy of the United States. Information regarding certain other embargoes appears elsewhere in this section. Comprehensive arms embargoes are normally the subject of a State Department notice published in the **Federal Register** . The exemptions provided in the regulations in this subchapter, except § 123.17 of this subchapter, do not apply with respect to articles originating in or for export to any proscribed countries, areas, or persons in this § 126.1.

(j)*Haiti.* It is the policy of the United States to deny licenses, other approvals, exports or imports of defense articles and defense services, destined for or originating in Haiti. A denial policy will remain for exports or imports of defense articles and defense services destined for or originating in Haiti except, on a case-by-case basis, for supplies of arms and related materials or technical training and assistance intended solely for the support of or use by security units that operate under the command of the Government of Haiti, supplies of arms and related materials for technical training and assistance intended solely for the support of or use by the United Nations or a United Nations-authorized mission, and personal protective clothing, including flak jackets and helmets, for use by personnel from the United Nations and other international organizations, representatives of the media, and development workers and associated personnel. All shipments of arms and related materials consistent with such exemptions shall only be made to Haitian security units as designated by the Government of Haiti, in coordination with the U.S. Government. Dated: August 31, 2006. Robert G. Joseph, Under Secretary for Arms Control and International Security, Department of State. [FR Doc. E6-16386 Filed 10-3-06; 8:45 am] BILLING CODE 4710-25-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 51, 52, and 80 [OAR 2003-0079; FRL-8227-6] RIN 2060-AJ99 Final Rule To Implement the 8-Hour Ozone National Ambient Air Quality Standard—Phase 2; Final Rule To Implement Certain Aspects of the 1990 Amendments Relating to New Source Review and Prevention of Significant Deterioration as They Apply in Carbon Monoxide, Particulate Matter and Ozone NAAQS; Final Rule for Reformulated Gasoline; Correction AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule; correction. SUMMARY: The EPA issued a final rule on November 29, 2005, which took action on elements of the program to implement the 8-hour ozone national ambient air quality standard (NAAQS or standard)—Phase 2. The preamble contains a discussion of the Clean Air Act's (CAA's) reasonable further progress

(RFP)requirements, and this document clarifies the correct citation in the CAA that should have been referenced. Finally, this document is modifying several incorrect citations in Appendix A of the preamble which addresses calculation of RFP targets. This action is needed so States will have the correct version of the Phase 2 rule. The intended effect is to correct the errors in the Phase 2 rule. EFFECTIVE DATE: This document is effective on October 4, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Denise Gerth, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Mail Code C539-01, Research Triangle Park, NC 27711, phone number

(919)541-5550, fax number

(919)541-0824 or by e-mail at *gerth.denise@epa.gov.* or Mr. John Silvasi, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Mail Code C539-01, Research Triangle Park, NC 27711, phone number

(919)541-5666, fax number

(919)541-0824 or by e-mail at *silvasi.john@epa.gov.* SUPPLEMENTARY INFORMATION: The EPA issued the Phase 2 Rule to Implement the 8-Hour Ozone NAAQS on November 29, 2005 (70 FR 71612). The purpose of this document is to correct four technical errors in the final rule. Section E.1.b. of the preamble (70 FR 71633; first column) provides information on the RFP requirements for areas classified under subpart 2 as serious and above that had met the 15-percent VOC emission reduction requirement for the 1-hour standard. The preamble stated that such areas would be subject to the RFP requirements of section 172(e) of the CAA. The reference to section 172(e) was inaccurate so we are issuing this correction notice to clarify that such areas would be subject to the RFP requirements of section 172(c) of the CAA. The regulatory text promulgated at 40 CFR 51.910(a)(1)(ii)(A) (70 FR 71700) correctly references section 172(c)(2). The final set of corrections are being made to language in Method 2, Method 3 and Method 4 of Appendix A (70 FR 71696-71697) which addresses calculation of RFP targets. The reference in Method 2 to areas covered under 40 CFR 51.910(a)(1)(ii)(C) is incorrect and the correct citation is 40 CFR 51.910(a)(1)(ii)(B). The following is the corrected language: “For areas covered under 40 CFR 51.910(a)(1)(ii)(B) and that meet an 18-percent VOC emission reduction requirement by 2008 with NO X substitution allowed, following EPA's NO X Substitution Guidance:”. The references in Method 3 in paragraphs E and F (71697, column 1) to Steps C, D and E are incorrect. The following is the corrected language:

(E)The target level of VOC and NO X emissions in 2011 needed to meet the 2011 ROP requirement is any combination of VOC and NO X reductions from the adjusted inventories calculated in Step **D** that total nine percent. For example, the target level of VOC emissions in 2011 could be a four-percent reduction from the adjusted VOC inventory in Step **D** and a five-percent reduction from the adjusted NO X inventory in Step **D** * * * [Emphasis Added].

(F)For subsequent * * *. This value is subtracted from the 2011 target level of NO X emissions calculated in Step **E** to get the adjusted NO X inventory to be used as the basis for calculating the target level of NO X emissions in 2014. [Emphasis Added]. The reference Method 4 in paragraph D (71697, second column) to Step **E** is incorrect. The following is the corrected language:

(D)The target level of VOC and NO X emissions in 2011 needed to meet the 2011 ROP requirement is any combination of VOC and NO X reductions from the adjusted inventories calculated in Step **C** that total nine percent * * * [Emphasis Added]. In addition, for all of Appendix A, the term “ROP” should read “RFP.” This is consistent with the definition of RFP in the Phase 1 rule (69 FR 23974, footnote 32). List of Subjects 40 CFR Part 51 Environmental protection, Air pollution control, Carbon monoxide, Intergovernmental relations, Ozone, Particulate matter, Transportation, Volatile organic compounds. 40 CFR Part 52 Air pollution control, Carbon monoxide, Intergovernmental relations, Ozone, Particulate matter. 40 CFR Part 80 Fuel additives, Gasoline, Motor vehicle pollution, Ozone. Authority: 42 U.S.C. 7408; 47 U.S.C. 7410; 42 U.S.C. 7501-7511; 42 U.S.C. 7601(a)(1); 42 U.S.C. 7401. Dated: September 28, 2006. Stephen L. Johnson, Administrator. [FR Doc. E6-16377 Filed 10-3-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 63 [EPA-HQ-OAR-2003-0178; FRL-8227-5] RIN 2060-AM72 National Emission Standards for Hazardous Air Pollutants: Miscellaneous Coating Manufacturing AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This action promulgates amendments to the national emission standards for hazardous air pollutants for miscellaneous coating manufacturing. The amendments clarify that coating manufacturing means the production of coatings using operations such as mixing and blending, not reaction or separation processes used in chemical manufacturing. The amendments extend the compliance date for certain coating manufacturing equipment that is also part of a chemical manufacturing process unit. The amendments also clarify that operations by end users that modify a purchased coating prior to application at the purchasing facility are exempt. These changes clarify applicability of the rule and minimize the compliance burden. EFFECTIVE DATE: October 4, 2006. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2003-0178. All documents in the docket are listed on the *http://www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, *e.g.* , confidential business information 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 *http://www.regulations.gov* or in hard copy at the Air and Radiation Docket, Docket ID No. EPA-HQ-OAR-2003-0178, EPA/DC, EPA West Building, Room B-102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is

(202)566-1744, and the telephone number for the Air and Radiation Docket is

(202)566-1742. Note: The EPA Docket Center suffered damage due to flooding during the last week of June 2006. The Docket Center is continuing to operate. However, during the cleanup, there will be temporary changes to Docket Center telephone numbers, addresses, and hours of operation for people who wish to visit the Public Reading Room to view documents. Consult EPA's **Federal Register** notice at 71 FR 38147 (July 5, 2006) or the EPA Web site at *http://www.epa.gov/epahome/dockets.htm* for current information on docket status, locations, and telephone numbers. FOR FURTHER INFORMATION CONTACT: Mr. Randy McDonald, Office of Air Quality Planning and Standards, Sector Policies and Programs Division, Coatings and Chemicals Group (E143-01), U.S. EPA, Research Triangle Park, NC 27711; telephone number:

(919)541-5402; fax number:

(919)541-0246; e-mail address: *mcdonald.randy@epa.gov.* SUPPLEMENTARY INFORMATION: *Regulated Entities.* The regulated category and entities affected by this action include: Category NAICS Code* Examples of regulated entities Industry 3255, 3259 Manufacturers of paints, coatings, adhesives, or inks. *North American Industry Classification System This table is not intended to be exhaustive, but rather provides a guide for readers likely to be interested in the revisions to the rule affected by this action. To determine whether your facility, company, business, organization, etc., is regulated by this action, you should carefully examine all of the applicability criteria in 40 CFR 63.7985 of subpart HHHHH (national emission standards for hazardous air pollutants (NESHAP) for miscellaneous coating manufacturing), as well as in today's amendment to the definitions section. If you have questions regarding the applicability of the amendments to a particular entity, consult either the air permit authority for the entity or your EPA regional representative as listed in 40 CFR 63.13 of subpart A (General Provisions). *World Wide Web (WWW).* In addition to being available in the docket, an electronic copy of the final action will also be available on the WWW through the Technology Transfer Network (TTN). Following signature, a copy of the final action will be posted on the TTN policy and guidance page for newly proposed or promulgated rules at *www.epa.gov/ttn/oarpg.* The TTN provides information and technology exchange in various areas of air pollution control. *Judicial Review.* Under section 307(b)(1) of the Clean Air Act (CAA), judicial review of the final amendments is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit by December 4, 2006. Under section 307(d)(7)(B) of the CAA, only an objection to the final amendments that was raised with reasonable specificity during the period for public comment may be raised during judicial review. Moreover, under section 307(b)(2) of the CAA, the requirements established by the final amendments may not be challenged separately in any civil or criminal proceedings brought by EPA to enforce these requirements. Section 307(d)(7)(B) of the CAA further provides that “[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review.” This section also provides a mechanism for us to convene a proceeding for reconsideration, “[i]f the person raising an objection can demonstrate to the EPA that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule.” Any person seeking to make such a demonstration to us should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460, with a copy to both the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT section, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave., NW., Washington, DC 20004. *Organization of this Document.* The information presented in this preamble is organized as follows: I. Background II. Response to Comments A. Compliance Date B. Affiliated Operations III. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Congressional Review Act I. Background On December 11, 2003, we promulgated NESHAP for miscellaneous coating manufacturing as subpart HHHHH of 40 CFR part 63 (68 FR 69164). Subpart HHHHH applies to the facilitywide collection of equipment used to manufacture coatings. On May 17, 2006 (71 FR 28639), we proposed amendments to the:

(1)Definition of the term “coating,”

(2)compliance date for shared equipment that is part of a process unit group

(PUG)developed under the miscellaneous organic chemical manufacturing NESHAP

(MON)(40 CFR part 63, subpart FFFF), and

(3)exemptions for operations by end users that are related to the application of a pre-manufactured coating. All equipment that is used to manufacture coatings is subject to 40 CFR part 63, subpart HHHHH. Because the definition of coating at 40 CFR 63.8105 in subpart HHHHH does not specify that coatings are produced only by blending, mixing, diluting, and related formulation operations without chemical synthesis or separation, some products of synthetic organic chemical manufacturing could be considered coatings. This overly broad definition of “coating” expands the applicability of 40 CFR part 63, subpart HHHHH to equipment intended to by covered by 40 CFR part 63, subpart FFFF. The proposed amendments to the definition of coating clarify that products of reaction and separation, such as polymers, resins, and synthetic organic chemicals are not coatings and are not covered by the final rule. In addition, the proposed amendments to the definition of coating clarify that 40 CFR part 63, subpart HHHHH also does not apply to the production of formulation components by chemical synthesis or separation activity if those components are not stored prior to formulation. We proposed these revisions so that the applicability of the final rule accurately and appropriately reflects the coating manufacturing industry and the basis for the maximum achievable control technology

(MACT)floor. The recent extension of the compliance date for 40 CFR part 63, subpart FFFF (see 71 FR 10439, March 1, 2006) raises a timing issue with respect to 40 CFR part 63, subpart FFFF and 40 CFR part 63, subpart HHHHH overlap. The extension for the compliance date for 40 CFR part 63, subpart FFFF results in the compliance date for 40 CFR part 63, subpart HHHHH occurring before the MON compliance date, thus creating a problem for plants with equipment subject to both subparts FFFF and HHHHH of 40 CFR part 63 who opt to develop a PUG. Because we have extended the compliance date for 40 CFR part 63, subpart FFFF, a source that primarily manufactures organic chemicals, but also produces a coating product in the same equipment, would not be able to comply with subparts FFFF and HHHHH of 40 CFR part 63 as EPA intended during the period between the compliance date for 40 CFR part 63, subpart HHHHH (December 11, 2006) and 40 CFR part 63, subpart FFFF (May 10, 2008). Due to the significant amendments to 40 CFR part 63, subpart FFFF, it is unlikely that sources will be able to comply with the revised 40 CFR part 63, subpart FFFF by the compliance date for 40 CFR part 63, subpart HHHHH. Alternatively, if the source was planning to comply with subpart HHHHH by referencing 40 CFR 63.2535(l)(3)(i), it is also unlikely the source would have enough time to design and install interim controls for the coating operations so as to comply with 40 CFR part 63, subpart HHHHH between December 11, 2006 and May 10, 2008. Thus, relying on the presumption that equipment should be regulated according to the standard that effectively applies for a majority of products produced, we proposed amending the final rule to reference 40 CFR part 63, subpart FFFF requirements for a PUG which produces primarily 40 CFR part 63, subpart FFFF products. The proposed amendments also clarify that if the source so chooses, equipment that is part of a PUG in which a MON product is the primary product must comply with the MON by the MON compliance date, not 40 CFR part 63, subpart HHHHH by the subpart HHHHH compliance date. In section IV.A of the preamble to the final rule, we stated “the final rule does not apply to activities conducted by end users of coating products in preparation for application” (68 FR 69164, December 11, 2003). Although the final rule exempts “affiliated operations” at sources that are subject to surface coating rules, it does not specifically exempt operations at sources that are not subject to another subpart of 40 CFR part 63. Therefore, we proposed adding an exemption in 40 CFR 63.7985(d)(5) for operations by end users who modify a purchased coating prior to application at the same facility. This exemption applies only if the purchased product is already a coating that an end user could apply as purchased, and the modified coating must be applied at the same facility where the modification is conducted. Two trade associations and three coatings manufacturing companies provided comments on the proposed amendments to the rule. In general, the commenters supported the proposed changes. One commenter also requested changes to the compliance date and the exemption for affiliated operations at sources that are subject to surface coating MACT rules. After consideration of the comments, we are promulgating the amendments as proposed. II. Response to Comments A. Compliance Date *Comment:* One commenter supported the amendment to clarify the definition of “coating” but also expressed concern that this change could have unanticipated impacts that would make it difficult to achieve compliance by December 11, 2006. According to the commenter, the change is a major modification of the rule because it could affect applicability determinations for some facilities. For example, the commenter suggested the possibility that some facilities currently thinking they are subject to the MON may realize that they have to comply with the Miscellaneous Coating Manufacturing NESHAP. To ensure that facilities have time to review the amendments and make appropriate changes to their compliance plans, the commenter requested that the compliance date for all existing sources under 40 CFR part 63, subpart HHHHH be extended to May 10, 2008. *Response:* As noted in the preamble to the proposed amendments, concerns with the definition of “coating” in the final rule were that it was too expansive. It included all materials that are intended to be applied to a substrate, regardless of the production process. The amended definition narrows the scope of the definition, which may reduce the number of operations that are subject to the MON. Any operations that are excluded from the amended Miscellaneous Coating Manufacturing NESHAP will be subject to the MON. Facilities with such operations will have until May 10, 2008, to comply with the Miscellaneous Organic Chemical Manufacturing NESHAP. We are unaware of any materials that are coatings under the amended definition that would not have been coatings under the definition in the final rule. Thus, we have determined that there is no need to extend the compliance date for existing sources that are subject to the Miscellaneous Coating Manufacturing NESHAP, except for operations that are part of a PUG under the MON as discussed in section I of this preamble. B. Affiliated Operations *Comment:* One commenter supports our position, as stated in the preamble to the proposed amendments, that 40 CFR part 63, subpart HHHHH does not apply to activities conducted by end users of coating products in preparation for application. According to the commenter, these activities cannot be regulated under 40 CFR part 63, subpart HHHHH because they are not coating manufacturing operations and were not part of the MACT analysis for 40 CFR part 63, subpart HHHHH. For the rule to be consistent with this position, the commenter believes 40 CFR 63.7985(d)(2) should exempt “affiliated operations” at all surface coating facilities, not just those at sources that are subject to the surface coating rules in subparts GG, KK, JJJJ, MMMM, and SSSS of 40 CFR part 63. The commenter suggested listing each surface coating category in 40 CFR 63.7985(d)(2). *Response:* We decided not to adopt the changes suggested by the commenter. Listing all surface coating categories in 40 CFR 63.7985(d)(2) is unnecessary and impractical. There are three categories of end users to consider: Sources that are subject to 40 CFR part 63 surface coating rules that do not include “affiliated operations” in the affected source, sources that are subject to 40 CFR part 63 surface coating rules that do include “affiliated operations” in the affected source, and sources that are not subject to a 40 CFR part 63 surface coating rule. Operations at end user facilities in two categories are exempted by existing provisions in the rule, and operations at end user facilities in the third category are exempted by the proposed amendments. First, as the commenter noted, explicit exemptions for affiliated operations, as defined in 40 CFR 63.7985(d)(2), apply to affiliated operations that are located at affected sources under subparts GG, KK, JJJJ, MMMM, and SSSS of 40 CFR part 63. All of these rules lack requirements for affiliated operations, but affiliated operations were considered during development of the rules. Therefore, an exemption was needed in the Miscellaneous Coating Manufacturing NESHAP to avoid a conflict between the decisions made in the development of the five surface coating rules and the applicability of 40 CFR part 63, subpart HHHHH. Facilities in the second group of end users are also subject to surface coating rules, but the affiliated operations at these facilities are part of the affected sources under the applicable surface coating rule. These affiliated operations are exempt from 40 CFR part 63, subpart HHHHH by 40 CFR 63.7985(a)(4), which specifies that operations are miscellaneous coating manufacturing operations and subject to 40 CFR part 63, subpart HHHHH only if they are not part of an affected source under another subpart of 40 CFR part 63. Therefore, exempting these source categories by listing them in 40 CFR 63.7985(d)(2) would be redundant. The third group of end users includes all facilities that are not part of a source category that is subject to a surface coating NESHAP. Listing all of these surface coating categories in 40 CFR 63.7985(d)(2) would be impractical because there is no way of knowing all possible categories. Therefore, the proposed exemption in new paragraph (d)(5) of 40 CFR 63.7985 provides a general exemption for all facilities in this group. This new provision exempts operations that modify a purchased coating prior to application at the purchasing facility. Therefore, we have decided to promulgate this proposed amendment without changes. III. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Order. B. Paperwork Reduction Act The final rule amendments impose no new information collection requirements on the industry. The final rule amendments clarify applicability of the final rule and extend the compliance date for owners and operators of certain coating manufacturing equipment. These changes have the potential to result in minor reductions in the information collection burden. Therefore, the Information Collection Request

(ICR)has not been revised. The Office of Management and Budget

(OMB)has previously approved the information collection requirements contained in the existing regulations (40 CFR part 63, subpart HHHHH) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501, *et seq.* , and has assigned OMB control number 2060-0535 (EPA ICR number 2115.01). A copy of the OMB approved ICR may be obtained from Susan Auby, by mail at the Office of Environmental Information, Collection Strategies Division; U.S. EPA (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 20460, by e-mail at *auby.susan@epa.gov* , or by calling

(202)566-1672. A copy may also be downloaded off the Internet at *http://www.epa.gov/icr.* Include the ICR or OMB number in any correspondence. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9. C. Regulatory Flexibility Act EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with the final rule amendments. For purposes of assessing the impacts of the final rule amendments on small entities, small entity is defined as:

(1)A small business as defined by the Small Business Administrations' regulations at 13 CFR 121.201;

(2)a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; or

(3)a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field. For sources subject to the final rule amendments, the relevant NAICS and associated employee sizes are listed below: NAICS 32551—Paint and Coatings Manufacturing—500 employees or fewer. NAICS 32552—Adhesives and Sealants Manufacturing—500 employees or fewer. NAICS 32591—Printing Ink Manufacturing—500 employees or fewer. After considering the economic impacts of the final rule amendments on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may conclude that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. The final rule amendments clarify applicability of the final rule and extend the compliance date for owners and operators of certain coating manufacturing equipment. These changes have the potential to result in minor burden reductions for small entities. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act

(UMRA)of 1995, Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. The EPA has determined that the final rule amendments do not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any 1 year. Therefore, the final rule amendments are not subject to the requirements of sections 202 and 205 of the UMRA. In addition, the final rule amendments contain no regulatory requirements that might significantly or uniquely affect small governments because they contain no requirements that apply to such governments or impose obligations upon them. Therefore, the final rule amendments are not subject to the requirements of section 203 of the UMRA. E. Executive Order 13132: Federalism Executive Order 13132 (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” The final rule amendments do not have federalism implications. They will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. None of the affected facilities are owned or operated by State or local governments. Thus, Executive Order 13132 does not apply to the final rule amendments. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175 (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” The final rule amendments do not have tribal implications, as specified in Executive Order 13175. The final rule amendments clarify applicability of the rule and extend the compliance date for owners and operators of certain coating manufacturing equipment. Therefore, the final rule amendments will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Thus, Executive Order 13175 does not apply to the final rule amendments. G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that:

(1)Is determined to be “economically significant” as defined under Executive Order 12866, and

(2)concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, EPA must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. The final rule amendments are not subject to the Executive Order because they are based on technology performance and not on health or safety risks. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use The final rule amendments do not constitute a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001) because they are not likely to have a significant adverse effect on the supply, distribution, or use of energy. The final rule amendments clarify applicability of the rule and extend the compliance date for owners and operators of certain coating manufacturing equipment. Further, we have concluded that the final rule amendments are not likely to have any adverse energy effects. I. National Technology Transfer and Advancement Act As noted in the proposed rule, section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) of 1995, Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards

(VCS)in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. VCS are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by VCS bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable VCS. During the rulemaking, the EPA conducted searches to identify VCS in addition to EPA test methods referenced by the final rule. The search and review results have been documented and placed in the docket for the NESHAP (Docket ID No. EPA-HQ-OAR-2003-0178). The final rule amendments do not require the use of any additional technical standards beyond those cited in the final rule. Therefore, EPA is not considering the use of any additional VCS for the final rule amendments. J. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801, *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing the final rule amendments and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the United States prior to publication of the final rule amendments 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). The final rule amendments are effective on October 4, 2006. List of Subjects in 40 CFR Part 63 Environmental protection, Administrative practice and procedure, Air pollution control, Hazardous substances, Intergovernmental relations, Reporting and recordkeeping requirements. Dated: September 28, 2006. Stephen L. Johnson, Administrator. For the reasons stated in the preamble, title 40, chapter I, part 63 of the Code of the Federal Regulations is amended as follows: PART 63—[AMENDED] 1. The authority citation for part 63 continues to read as follows: Authority: 42 U.S.C. 7401, *et seq.* Subpart HHHHH—[Amended] 2. Section 63.7985 is amended by revising paragraph

(d)introductory text and adding paragraph (d)(5) to read as follows: § 63.7985 Am I subject to the requirements of this subpart?

(d)The requirements for miscellaneous coating manufacturing sources in this subpart do not apply to operations described in paragraphs (d)(1) through

(5)of this section.

(5)Modifying a purchased coating in preparation for application at the purchasing facility. 3. Section 63.7995 is amended by adding introductory text to read as follows: § 63.7995 When do I have to comply with this subpart? Except as specified in § 63.8090, you must comply with this subpart according to the requirements of this section. 4. Section 63.8090 is amended by adding paragraph

(c)to read as follows: § 63.8090 What compliance options do I have if part of my plant is subject to both this subpart and another subpart?

(c)*Compliance with 40 CFR part 63, subpart FFFF.* After the compliance dates specified in § 63.7995, an affected source under this subpart HHHHH that includes equipment that is also part of an affected source under 40 CFR part 63, subpart FFFF is deemed in compliance with this subpart HHHHH if all of the conditions specified in paragraphs (c)(1) through

(5)of this section are met.

(1)Equipment used for both miscellaneous coating manufacturing operations and as part of a miscellaneous organic chemical manufacturing process unit (MCPU), as defined in § 63.2435, must be part of a process unit group developed in accordance with the provisions in § 63.2535(l).

(2)For the purposes of complying with § 63.2535(l), a miscellaneous coating manufacturing “process unit” consists of all coating manufacturing equipment that is also part of an MCPU in the process unit group. All miscellaneous coating manufacturing operations that are not part of a process unit group must comply with the requirements of this subpart HHHHH.

(3)The primary product for a process unit group that includes miscellaneous coating manufacturing equipment must be organic chemicals as described in § 63.2435(b)(1).

(4)The process unit group must be in compliance with the requirements in 40 CFR part 63, subpart FFFF as specified in § 63.2535(l)(3)(i) no later than the applicable compliance dates specified in § 63.2445.

(5)You must include in the notification of compliance status report required in § 63.8070(d) the records as specified in § 63.2535(l)(1) through (3). 5. Section 63.8105 is amended by revising the definition of the term “coating” in paragraph

(g)to read as follows: § 63.8105 What definitions apply to this subpart?

(g)* * * *Coating* means a material such as paint, ink, or adhesive that is intended to be applied to a substrate and consists of a mixture of resins, pigments, solvents, and/or other additives, where the material is produced by a manufacturing operation where materials are blended, mixed, diluted, or otherwise formulated. Coating does not include materials made in processes where a formulation component is synthesized by chemical reaction or separation activity and then transferred to another vessel where it is formulated to produce a material used as a coating, where the synthesized or separated component is not stored prior to formulation. Typically, coatings include products described by the following North American Industry Classification System (NAICS) codes, code 325510, Paint and Coating Manufacturing, code 325520, Adhesive and Sealant Manufacturing, and code 325910, Ink Manufacturing. [FR Doc. E6-16407 Filed 10-3-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 82 [EPA-HQ-OAR-2006-0158; FRL-8227-4] RIN 2060-AN29 Protection of Stratospheric Ozone: Allocation of Essential Use Allowances for Calendar Year 2006 AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: With this action, EPA is allocating essential use allowances for import and production of class I stratospheric ozone depleting substances

(ODSs)for calendar year 2006. Essential use allowances enable a person to obtain controlled class I ODSs as part of an exemption from the regulatory ban on the production and import of these chemicals that became effective as of January 1, 1996. EPA allocates essential use allowances for exempted production or import of a specific quantity of class I ODSs solely for the designated essential purpose. The allocations in this action total 1,002.40 metric tons

(MT)of chlorofluorocarbons

(CFCs)for use in metered dose inhalers for 2006. DATES: *Effective Date:* This final rule is effective October 4, 2006. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2006-0158. 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, *e.g.* , confidential business information 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 Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. This Docket facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is

(202)566-1744, and the telephone number for the Air Docket is

(202)566-1742. FOR FURTHER INFORMATION CONTACT: Kirsten Cappel of the Office of Air and Radiation, Stratospheric Protection Division by regular mail at the Environmental Protection Agency, 1200 Pennsylvania Avenue NW., (6205J) Washington DC 20460; telephone number: 202-343-9556; fax number: 202-343-2338; e-mail address: *cappel.kirsten@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. Basis for Allocating Essential Use Allowances A. What are essential use allowances? B. Under what authority does EPA allocate essential use allowances? C. What is the process for allocating essential use allowances? II. Response to Comments A. EPA Should Not Allocate Essential Use Allowances B. The Proposed Level of Allocations Is Incorrect C. Consideration of Stocks of CFCs in the Allocation of Essential Use Allowances D. Comments on the Rulemaking Process and Timing E. EPA May Not Allocate Allowances to Companies That Fail To Demonstrate Research and Development of Alternatives F. Transition to Non-CFC Metered Dose Inhalers III. Allocation of Essential Use Allowances for Calendar Year 2006 IV. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Congressional Review Act V. Judicial Review VI. Effective Date of this Final Rule I. Basis for Allocating Essential Use Allowances A. What are essential use allowances? Essential use allowances are allowances to produce or import certain ozone-depleting substances

(ODSs)in the U.S. for purposes that have been deemed “essential” by the U.S. Government and by the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol). The Montreal Protocol is an international agreement aimed at reducing and eliminating the production and consumption 1 of ODSs. The elimination of production and consumption of class I ODSs is accomplished through adherence to phaseout schedules for specific class I ODSs, 2 which include chlorofluorocarbons (CFCs), halons, carbon tetrachloride, and methyl chloroform. As of January 1, 1996, production and import of most class I ODSs were phased out in developed countries, including the United States. 1 “Consumption” is defined as the amount of a substance produced in the United States, plus the amount imported into the United States, minus the amount exported to Parties to the Montreal Protocol (see section 601(6) of the Clean Air Act). 2 Class I ozone depleting substances are listed at 40 CFR part 82 subpart A, appendix A. However, the Montreal Protocol and the Clean Air Act provide exemptions that allow for the continued import and/or production of class I ODSs for specific uses. Under the Montreal Protocol, exemptions may be granted for uses that are determined by the Parties to be “essential.” Decision IV/25, taken by the Parties to the Protocol in 1992, established criteria for determining whether a specific use should be approved as essential, and set forth the international process for making determinations of essentiality. The criteria for an essential use, as set forth in paragraph 1 of Decision IV/25, are the following: “(a) That a use of a controlled substance should qualify as ‘essential' only if:

(i)It is necessary for the health, safety or is critical for the functioning of society (encompassing cultural and intellectual aspects); and

(ii)There are no available technically and economically feasible alternatives or substitutes that are acceptable from the standpoint of environment and health;

(b)That production and consumption, if any, of a controlled substance for essential uses should be permitted only if:

(i)All economically feasible steps have been taken to minimize the essential use and any associated emission of the controlled substance; and

(ii)The controlled substance is not available in sufficient quantity and quality from existing stocks of banked or recycled controlled substances, also bearing in mind the developing countries' need for controlled substances.” B. Under what authority does EPA allocate essential use allowances? Title VI of the Clean Air Act implements the Montreal Protocol for the United States. Section 604(d) of the Act authorizes EPA to allow the production of limited quantities of class I ODSs after the phaseout date for the following essential uses:

(1)Methyl chloroform, “solely for use in essential applications (such as nondestructive testing for metal fatigue and corrosion of existing airplane engines and airplane parts susceptible to metal fatigue) for which no safe and effective substitute is available.” Under the Act, this exemption was available only until January 1, 2005. Prior to that date, EPA issued methyl chloroform allowances to the U.S. Space Shuttle and Titan Rocket programs.

(2)Medical devices (as defined in section 601(8) of the Act), “if such authorization is determined by the Commissioner [of the Food and Drug Administration], in consultation with the Administrator [of EPA] to be necessary for use in medical devices.” EPA issues allowances to manufacturers of metered dose inhalers (MDIs), which use CFCs as propellant for the treatment of asthma and chronic obstructive pulmonary disease.

(3)Aviation safety, for which limited quantities of halon-1211, halon-1301, and halon-2402 may be produced “if the Administrator of the Federal Aviation Administration, in consultation with the Administrator [of EPA] determines that no safe and effective substitute has been developed and that such authorization is necessary for aviation safety purposes.” Neither EPA nor the Parties have ever granted a request for essential use allowances for halon, because in most cases alternatives are available and because existing quantities of this substance are large enough to provide for any needs for which alternatives have not yet been developed. The Parties to the Protocol, under Decision XV/8, additionally allow a general exemption for laboratory and analytical uses through December 31, 2007. This exemption is reflected in EPA's regulations at 40 CFR part 82, subpart A. While the Act does not specifically provide for this exemption, EPA has determined that an allowance for essential laboratory and analytical uses is allowable under the Act as a *de minimis* exemption. The *de minimis* exemption is addressed in EPA's final rule of March 13, 2001 (66 FR 14760-14770). The Parties to the Protocol subsequently agreed (Decision XI/15) that the general exemption does not apply to the following uses: Testing of oil and grease, and total petroleum hydrocarbons in water; testing of tar in road-paving materials; and forensic finger-printing. EPA incorporated this exemption at Appendix G to Subpart A of 40 CFR part 82 on February 11, 2002 (67 FR 6352). C. What is the process for allocating essential use allowances? The procedure set out by Decision IV/25 calls for individual Parties to nominate essential uses and the total amount of ODSs needed for those essential uses on an annual basis. The Protocol's Technology and Economic Assessment Panel

(TEAP)evaluates the nominated essential uses and makes recommendations to the Protocol Parties. The Parties make the final decisions on whether to approve a Party's essential use nomination at their annual meeting. This nomination cycle occurs approximately two years before the year in which the allowances would be in effect. The allowances allocated through this final rule were first nominated by the United States in January 2004. For MDIs, EPA requests information from manufacturers about the number and type of MDIs they plan to produce, as well as the amount of CFCs necessary for production. EPA then forwards the information to the Food and Drug Administration (FDA), which determines the amount of CFCs necessary for MDIs in the coming calendar year. Based on FDA's determination, EPA proposes allocations to each eligible entity. Under the Act and the Protocol, EPA may allocate essential use allowances in quantities that together are below or equal to the total amount approved by the Parties. EPA will not allocate essential use allowances in amounts higher than the total approved by the Parties. For 2006, the Parties authorized the United States to allocate up to 1,100 metric tons

(MT)of CFCs for essential uses. In a notice of proposed rulemaking published in the **Federal Register** on April 11, 2006 (71 FR 18262), EPA proposed to allocate 1,002.40 MT. II. Response to Comments EPA received comments from ten entities on the proposed rule. Two commenters, both members of the general public, did not support an exemption as a general matter, one commenter indicated that his company received too few allowances to adequately protect patient safety, four commenters believed that EPA allocated more allowances than were necessary given the presence of stocks of CFCs in the United States, one commenter indicated that the Agency should not increase one company's allocations at the expense of a second company and should instead increase the total levels of allocations to accommodate any shortfalls. Lastly, one commenter believed that there is no downside to allocating the maximum number of allowances possible because companies only expend those allowances that they need. The comments are addressed in more detail below. A. EPA Should Not Allocate Essential Use Allowances One commenter wrote that non-CFC MDIs should be developed. This commenter also expressed a belief that a particular pharmaceutical company, Schering-Plough, should not be permitted to produce CFC MDIs since CFCs are banned. Additionally, this commenter feels that asthma would not be as serious a problem if the U.S. Government stopped burning national forests, parks, and wildlife areas. Another commenter expressed the opinion that the 1,002.40 MT of CFCs are not necessary for the manufacture of MDIs for the treatment of asthma and COPD. According to this commenter, skin cancer is not a suitable alternative to the lack of innovation by the companies that want to use CFCs. Another commenter also did not believe that Schering-Plough should receive an essential use allocation. The commenter stated that the cornerstone of the temporary essential use process is that production of CFCs for MDIs should be allowed only until companies are able to develop and bring to market adequate non-CFC alternatives for patients. The commenter noted that TEAP has expressed a strong concern that “companies continue to request essential use quantities for CFCs when they also manufacture HFA MDI alternatives for salbutamol,” and that Schering Plough has had an approved non-CFC Albuterol MDI, Proventil(r), on the market for a decade. Therefore, the commenter believes that no legal basis exists for allocating essential use CFCs to Schering-Plough. FDA, in consultation with EPA, has determined that 1,002.40 MT of CFCs are necessary to meet the demand for 2006 MDI manufacturing. As alternatives become available, FDA will be in a position to propose delisting of essential uses in a manner that is protective of patient safety. EPA appreciates the commenter's interest in the causes of asthma and reiterates that FDA's determination is made in accordance with protecting public health. Delisting of CFC MDIs will proceed in accordance with the 2002 FDA rule establishing a mechanism for removing essential uses from the list in 21 CFR 2.125(e), published in the **Federal Register** on July 24, 2002 (67 FR 48370) (corrected at 67 FR 49396 and 67 FR 58678). Delisting of albuterol CFC MDIs is addressed specifically in the FDA rule published in the **Federal Register** on April 4, 2006 (70 FR 17168). Under this rule, CFC albuterol MDIs will no longer be essential as of the end of 2008. In addition, FDA is in the process of examining the remaining essential use products to determine if and when they might no longer require an essential use designation. The U.S. is making substantial progress in the phasedown of exempted CFC production. For example, in 2005 the Agency allocated about 1,750 MT of CFCs while in this action for 2006 the Agency is only allocating 1,002.40 MT of CFCs. Schering-Plough manufactures a product which, as of 2006, is still essential to the U.S. supply of albuterol MDIs for treatment of asthma and COPD. With regard to the comment regarding the TEAP 2005 Progress Report, while the TEAP did express concerns “that companies continue to request essential use quantities for CFCs when they also manufacture [HFA] MDI alternatives for [albuterol],” it nevertheless recommended an essential use exemption for the United States that included CFCs intended for Schering-Plough, and this exemption was approved by the Parties. B. The Proposed Level of Allocations is Incorrect One commenter stated that unless EPA increases the essential use allocation for CFC propellants for Armstrong Pharmaceuticals, the only company with idle CFC albuterol production capacity, there will be a shortage of albuterol MDIs as early as June or July of 2006 because a European firm, IVAX, is no longer providing some 12 million units of albuterol inhalers to the U.S. market. Therefore, the commenter requested that the 2006 essential use allowances granted to Armstrong be increased from the proposed 147.50 MT to 347.50 MT. The commenter noted that Medical Technical Options Committee

(MTOC)recommended that 180 MT be added to the U.S. allocations for 2006 if CFC MDIs were not imported from Europe in 2006. A second commenter noted that EPA proposed to allocate 1,002.40 MT of CFCs for MDIs whereas the Parties to the Montreal Protocol authorized 1,100 MT and suggested that the 2006 allocations could be raised to the upper limit established in the Decision due to the IVAX situation. This commenter indicated that because in the past MDI producers have only utilized the rights that they felt were critical to meet evolving supply/demand, there is limited risk associated with the full allocation of available rights and notes that because excess CFCs will need to be destroyed, essential use inventories will actually become a financial liability and producers will avoid overproduction of CFC MDIs and excessive purchase of CFC propellant. One commenter believes that the Agency does not fully understand the restrictions on the availability of stocks of CFCs and that EPA's inaccurate understanding of the matter led to proposed allocations that are too low. They believe that misleading information in the May 2005 TEAP Progress Report on the availability for the sale of GlaxoSmithKline (GSK)'s excess pre-1996 CFC propellant has led FDA and EPA to assume that 605 MT of pre-1996 CFCs held by GSK would be available to all potential users even though GSK will only sell these CFCs to four companies that do not have a need for the material. The commenter also believes that in determining the size of Armstrong's allocation, the Agency assumed that Armstrong could obtain additional CFCs from Schering-Plough. Two commenters are of the opinion that Armstrong Pharmaceuticals' request for an additional 180 MT of CFCs should be denied and recommended that Armstrong not be granted any CFC allocations, including the 147.50 MT granted in the proposed rulemaking. Based on figures provided by Armstrong Pharmaceuticals, the commenter claims that Armstrong Pharmaceuticals has more than enough CFCs to serve its market share without receiving any allocation for 2006. To support this claim, the commenter stated that Armstrong Pharmaceuticals may manufacture as many as 6.4 million MDIs in 2006, requiring 147 MT of CFCs, which can be met by their stockpile of at least 195 MT of CFCs (based on the difference between the CFCs needed to manufacture 3.29 million MDIs in 2005, and the amount of CFCs purchased by Armstrong in 2005). One commenter indicated it believed Armstrong Pharmaceuticals made several inaccurate and misleading statements during the April 21, 2006 public hearing. These include the company's assertion, to support its request for an increased 2006 allocation, that the European Community did not allocate any CFCs for the use in the production of albuterol MDIs, and therefore that 21.4 million imported albuterol MDIs were lost to the U.S. market. According to the commenter, IVAX never supplied more than 14 million CFC MDIs to U.S. markets. In addition, the commenter also stated that in late 2005, the European Commission allocated 180 MT of CFCs to IVAX for production of albuterol MDIs to be exported to the U.S. The commenter wished to correct Armstrong Pharmaceuticals' claim that the 605 MT of GSK's pre-1996 CFCs is only available to four companies that no longer require CFCs for MDIs. This commenter states that these companies require CFCs for the production of essential MDIs. A second commenter indicated that GSK did not provide any misleading information concerning the sale of its pre-1996 CFC supply. A third commenter indicated that her company did have a need for, and purchased, CFCs from the GSK pre-1996 stockpile. EPA believes that the underlying premise of the essential use exemption program is to provide for the continued production and consumption of CFCs needed to ensure patient safety. EPA concurs with the comment that historically, companies have only used the allowances they needed and that production of CFCs in excess of the amount needed by a company would create a liability in that such material would have to be destroyed or used by another essential use. However, allocations are based on determinations of medical necessity. Since the October 2005 determination by FDA, fewer albuterol CFC MDIs have entered the market because IVAX stopped production. The market has also experienced an increase in the number of HFA MDIs. In making its determination on the amount of CFCs that are medically necessary, FDA looks at factors such as the number of medical device units required to meet patient demand and the amount of CFCs already owned by MDI manufacturers. FDA informs us that they have been closely monitoring the albuterol supply in response to spot shortages, particularly of albuterol CFC MDIs, in late winter and spring of 2006. Based on up-to-date information, there is an adequate supply of albuterol MDIs to meet patient needs in the U.S., as the production capacity for the albuterol HFA MDIs has increased substantially in the first half of 2006 and is expected to continue to increase. While albuterol HFA MDI capacity is expected to continue to increase throughout 2006 and beyond, FDA has not determined a reduction from the proposed allocations for albuterol MDIs because the projections FDA has heard indicate that there will be a continuing need for albuterol CFC MDIs through all of 2006. FDA is also concerned that some of the projections are not sufficiently reliable to provide a basis for a determination that could result in shortages of this necessary drug, if expectations are not met. Therefore, EPA is not altering the proposed allocation of allowances in this final rule to either increase allocations or decrease them. EPA was fully aware of the terms regarding the resale of the 605 MT of CFCs previously owned by GSK and was provided with a copy of the contract. EPA shared the terms of the contract with FDA. Further, as EPA has stated previously, both agencies only consider amounts of stocks owned by a given MDI manufacturer in determining the appropriate level of essential use allocation. Therefore, stocks not owned by an MDI manufacturer and future potential commercial arrangements for the sale of such stocks did not affect the allocations. In regard to concerns about the increased cost, see section II.F of this preamble document on the transition to CFC alternatives. One commenter argued that EPA should raise the total level of allocations and pointed to the terms of sale of 605 MT of GSK's pre-1996 CFC inventory as a reason to support such an action. This commenter argues that the terms of sale have made it difficult to determine both the level and distribution of CFC allocations, which could cause concern about how fluid the market may be at responding to patients' needs. The commenter further points to the potential that some producers involved in the CFC-to-HFA propellant transition may choose to redirect their production away from CFC-based products, while not releasing unutilized allocation rights to other producers for competitive reasons, thus causing further restrictions on availability of CFCs. As described above, EPA was fully aware of the restrictions on the resale of the 605 MT formerly owned by GSK. In light of the fact that none of that material may be resold to the essential use companies that manufacture singly moiety albuterol MDIs, the concerns of the commenter regarding the difficulty of determining “both the level and distribution of CFC allocations” and “how fluid the market may be at responding to patients’ needs” would not apply to those companies that are receiving exemptions to manufacture single moiety albuterol MDIs because these companies are not permitted to purchase any of the 605 MT to which the commenter is referring. Further, the Agency looks at holdings of CFCs stocks on a manufacturer-by-manufacturer basis. Only those quantities owned by an MDI manufacturer are assessed in determining their overall allocation needs. Thus, if the terms of resale on the GSK material contributed to some difficulties in the fluidity of the CFC propellant market, it should have no bearing on meeting patient demand for MDIs since these materials are excluded from the Agency's assessment until they are owned by an essential use company. The commenter's second concern that companies that are transitioning to an HFA-based alternative will not be inclined to sell or otherwise make their allowances available to a company that is still producing a product in a CFC format is immaterial. If a company is increasing production of its HFA product and decreasing its CFC product at the same rate, there is no need for a second company to increase its production of CFC product since the total number of units on the market remains the same and is sufficient to protect patient safety. One commenter stated that EPA must fully consider how the CFC allocations will affect moieties for which there are no alternatives—i.e., that a too-generous allocation for CFC albuterol MDIs that are being phased out could result in a backlash against the remaining essential use products, some of which do not yet have alternatives. The commenter noted that the 2006 allocation is significantly reduced from what EPA or the U.S. Government requested from the international community, yet albuterol comprises the majority of the allocation. To that end, the commenter encourages EPA to consider whether the allocation in the proposed rule takes into account the rapidly changing market for albuterol, noting that the allocation could be based on 6-to-12-month-old information, and asks the Agency to ensure that the moieties that really need CFCs will have CFCs until they approach the reformulation stage. A second commenter concurred with this sentiment and expressed the opinion that it is in the best interests of patients and the environment if the availability of essential use CFCs is preserved for the production of essential MDIs for which alternatives are not yet available but are under development. This second commenter stated that recent albuterol shortages illustrate the potential disruption to patient care if medication is unavailable and further stated that this risk would be significantly exacerbated in a situation where non-CFC alternatives were not available. Therefore, the commenter recommends that, rather than allocate any volumes for Schering-Plough and Armstrong Pharmaceuticals, EPA hold those volumes for a possible emergency allocation later in the year for those companies not manufacturing single-moiety albuterol MDIs. EPA and FDA carefully consider the requirements for all essential uses of CFCs, including those non-albuterol MDIs that may continue to be essential uses beyond 2008. The domestic and international consideration of the essentiality of a product is technically based. Most of the 2006 allocation is for albuterol MDIs, consistent with both domestic and international technical reviews. At the time of proposal of the 2006 essential use rule, EPA and FDA were not aware of any current market conditions that would alter the CFC requirements for 2006 essential uses. Further, as described earlier in this document, more recent information has not indicated that there is a significant change in requirements for 2006. With the coming December 2008 ban on the sale of single moiety albuterol CFC MDIs, EPA and FDA anticipate that there may be a rapidly changing market that would affect the 2007 essential use allocation. The Agencies will monitor the situation and make any adjustments that are necessary in the 2007 proposed and final rules. EPA considered and rejected the commenter's suggestion that EPA hold allowances proposed for Schering-Plough and Armstrong Pharmaceuticals as an emergency reserve for non-albuterol products. EPA received a determination from FDA as to the volume of CFCs required for non-albuterol products and FDA has informed us that that those volumes, along with stocks held by the manufacturers, are sufficient to protect public health. Additional allowances are not medically necessary. Since allowances expire on December 31, 2006, any recommended “emergency” allowances would have to be expended by that date. As previously stated, there is no anticipated shortage of 2006 CFCs for non-albuterol uses. Lastly, comments submitted by companies that have non-albuterol products also indicate that the levels proposed by EPA are sufficient for their 2006 needs. Therefore, EPA does not believe it is necessary to create an emergency reserve for non-albuterol uses with 2006 allowances. One commenter indicated that in granting allowances, EPA should not increase one company's allocation at the expense of a second company's, but instead any additional allocations should come from the difference between the amount authorized by the Parties, 1,100 MT, and the amount allocated by the Agency, 1,002.40 MT. This commenter also stated that it is satisfied with its proposed 2006 allocation and that it represents the minimum amount required to meet the market demand for the commenter's product. A second commenter indicated satisfaction with its proposed allocation. In this action, EPA is not changing the 2006 allocations to individual companies, or in total, from the amounts proposed. C. Consideration of Stocks of CFCs in the Allocation of Essential Use Allowances One commenter urged EPA to clarify that “operational supply” encompasses not only the amount of CFCs needed to meet MDI demand for a particular year, but also a “safety stock.” This commenter believes a stock of up to 12 months of forward demand is prudent, given that there is now a single supplier in the U.S. and a long lead time associated with revalidating an interrupted plant, and that this is consistent with the view of the Aerosols and Miscellaneous Uses Technical Options Committee

(ATOC)expert panel. 3 The commenter states that this view has also been adopted by the TEAP, which recommended to the Parties that companies be permitted to maintain a one-year safety stock of CFCs. 4 3 See “1998 Report of the Aerosols, Sterilants, Miscellaneous Uses, and Carbon Tetrachloride Technical Options Committee,” pp. 58-59. 4 See “UNEP Technology and Economic Assessment Panel April 1998 Report” at p. 16, sec. 1.2.4. In addition, this commenter suggests that EPA take into account blend requirements and only count stock blended in the needed proportion when calculating the safety stock limit. The commenter notes that the pre-1996 stockpile recently made available by GlaxoSmithKline comprises only CFC-11 and CFC-12, but to the extent that the commenter's company sources its needs from that stock, it will be unusable if it is not supplemented by CFC-114. This commenter also believes that EPA should take into account a company's need to maintain a safety stock for each of its foreign affiliates, as no excess supply is maintained at European production sites or certain other affiliates. The commenter explained that the European Commission takes into account a company's global supply when determining allocations, forcing companies to maintain an operational supply for their European facilities as well as their U.S. facilities. This situation also results in the expenditure of two allowances for each metric ton of CFCs transferred from U.S. to European facilities. This commenter notes that the conversion of safety stock to “just in time” supply will be made as the end date for the company's transition becomes clearer. Given the cost of destruction and the “point of sale” ban that will render the company's stockpiles of no use when its CFC products are deemed non-essential, this commenter states that it has every incentive to avoid excess stockpiles. In assessing the amount of new CFC production required to satisfy 2006 essential uses, EPA and FDA applied the terms of Decision XVII/5 including provisions on stocks of CFCs that indicate Parties should allocate such that manufacturers of MDIs maintain no more than a one-year operational supply. FDA's current practice is to first calculate the quantity of CFCs that a manufacturer needs for MDIs in the year in question and then subtract from that quantity any CFC stocks owned by that MDI manufacturer exceeding a one-year operational supply. The remainder, if a positive number, is the quantity of newly produced or imported CFCs needed by that manufacturer. Consistent with the language of Decision XVII/5, FDA has informed EPA that it considers the quantity of CFCs owned by each manufacturer, rather than the total supplies owned by all entities. EPA does not read Decision XVII/5 as endorsing a safety stock in excess of the one-year operational supply specifically mentioned in the Decision. EPA's proposed allocation did not take the blend of CFCs into account in determining the size of a manufacturer's stocks and the ensuing amount of new CFCs required. EPA does not currently collect data on the specific CFCs that comprise the stocks owned by the MDI manufacturer. EPA agrees that it would be reasonable to take into account the type of CFC needed for MDI production if EPA had such data. Two commenters indicated that in determining a company's pre-allocation “operational supply,” EPA and FDA should count all stocks owned or controlled by a company, including stocks at its production facility, in transit, on order, or stored off-site. FDA evaluated stocks owned by an MDI manufacturer, regardless of the physical location of the material, in making its determination. Two commenters stated that in order to effectively implement Decision XVII/5, FDA and EPA should evaluate the level of stockpiles held by companies as of the end of 2005, or as of January 2006. In determining how much a company needs to maintain a “one-year operational supply,” EPA and FDA should consider how much a company needs to serve markets during the year and maintain a reasonable safety reserve. The starting point for determining this amount could be the amount of CFCs a company used in the previous year, which could be modified based on the company's circumstances. They further state that EPA should only allocate CFCs to a company if the company's one-year operational supply need is greater than its pre-allocation operational supply. The commenter defines “operational supply need” as the amount the company needs to “serve its markets during the current year” plus a reasonable safety reserve, not to exceed 12 months. The commenter defines “pre-allocation operational supply” as all stocks owned or controlled by a company. Additionally, with regard to the safety net, a 12-month level would be excessive for products with an established phaseout date and where the market is transitioning to non-CFC products. According to one of the commenters, the *U.S. Reporting Accounting Framework* reported that 1,911 MT of CFCs were “on hand” at the end of 2005. With the addition of 1,000 MT of pre-phase out CFCs (398.6 MT reported by the U.S. Accounting Framework and 605 MT made available by GSK), the commenter asserts that almost three times more than the 1,171 MT of CFCs used in 2005 were available for use in MDIs as of the end of 2005. A third commenter indicated that allowable operational supply should be determined based on the average carried over the course of a year, as opposed to year-end supply, which may appear excessive given the fact that the production of CFCs-11 and -12 occur only during August and this commenter receives a full year's supply at that time. With regard to the first two commenters' concern on the timing for EPA's determination, the Agency refers readers to section II.D of this preamble on the essential use process. EPA and FDA do not concur with the commenter that a safety net of 12 months is excessive for those products where the market is transitioning. EPA notes that the product in question (albuterol CFC MDI) is not set to be phased out until December 31, 2008. Given that the final transition date is more than a year away, it still makes sense to factor in a “one-year operational supply” at this time. EPA believes this comment may be more pertinent to 2007 and 2008, the last years of the transition. As stated above, FDA first calculates the quantity of CFCs that a manufacturer needs for MDIs in the year in question and then subtracts from that quantity any CFC stocks owned by that manufacturer in excess of a one-year operational supply. FDA evaluates data provided to EPA before and during the rulemaking process which may include stocks data collected midyear, as was the case for the 2006 rulemaking. Those stocks include all materials owned by a manufacturer. Consistent with the language of Decision XVII/5, FDA has informed EPA that it considers the quantity of CFCs owned by each MDI manufacturer, rather than the total supplies owned by all entities. EPA notes that some the stocks one of the commenters points to in the U.S. Accounting Framework are not owned by MDI manufacturers. EPA reminds commenters that the U.S. Accounting Framework captures data at the aggregate level but that allowance allocation determinations are company-specific. In determining what authorization of new production is “necessary for use in medical devices” under section 604(d)(2) of the CAA, FDA calculates the quantity of CFCs needed to produce an adequate supply of medical devices for use by patients, or other end users, in the relevant year. FDA does not consider the increase of a manufacturer's year-end stock of CFCs to be “necessary” for purposes of section 604(d)(2). FDA has informed EPA that, in accordance with this reading of section 604(d)(2) of the CAA, FDA will not make a determination that any newly produced CFCs are needed, if the resulting allocation would reasonably be expected to result in the MDI manufacturer having a larger stock of CFCs at the end of a relevant year than it had at the beginning of that year. FDA has provided the following examples of its current method of arriving at a determination of the quantities of CFCs needed for a given year: • Manufacturer A will have 100 MT of CFCs in stocks at the beginning of a year. 50 MT are required to produce the MDIs needed in that year. FDA would determine that no additional CFCs are needed because Manufacturer A will have a one-year supply of CFCs in stock at the end of the year. • Manufacturer B will have 100 MT of CFCs in stocks at the beginning of a year. 150 MT are required to produce the MDIs needed in that year. FDA would determine that Manufacturer B's allocation should only be 150 MT, as determinations made by FDA are not intended to increase stocks of CFCs through the allocation process. Both examples assume that the necessary quantities of CFC-containing MDIs remain constant. FDA has informed EPA that as the manufacture, and capacity for manufacture, of non-ODS alternatives, including albuterol HFA MDIs, increases, it takes those increases into consideration in making its determination under section 604(d)(2) of the CAA, and will continue to do so. EPA agrees that FDA's approach to determining the necessary quantity of newly produced or imported CFCs for the manufacture of essential MDIs is reasonable, appropriate, and consistent with relevant provisions of the Parties' Decisions, the Montreal Protocol, and the CAA. D. Comments on the Rulemaking Process and Timing Three commenters expressed the opinion that EPA has not adequately supported its proposed essential use allocations for 2006 because EPA could not have adequately taken into account Decision XVII/5 given the timing of the proposed rule. Since Decision XVII/5 was adopted on December 16, 2005 at the 17th MOP, FDA's October 12, 2005 recommendations to EPA could not have taken this Decision into account. While two draft decisions were forwarded to the 17th MOP, neither decision was adopted in full by the MOP, and there is no way FDA could have known which decision would be adopted. Therefore, when FDA made its recommended allocation to EPA, it could not have taken Decision XVII/5 into account. One of the commenters stated that, under this Decision, EPA and FDA are required to factor in any final shipments of CFCs from the now-closed Weert CFC manufacturing plant. EPA and FDA were aware of Decision XVII/5 at the time of publication of the proposal, and nothing in that decision required a change to the October 2005 FDA determination. Decision XVII/5(2) says: “That Parties * * * shall take into account pre- and post-1996 stocks of controlled substances as described in paragraph 1(b) of decision IV/25, such that no more than a one-year operational supply is maintained by that manufacturer.” This language is not in conflict with language in Decision XVI/12 from the previous year which states that Parties “should give due consideration to existing stocks * * * of banked or recycled controlled substances as described in paragraph 1(b) of decision IV/25, with the objective of maintaining no more than one year's operational supply.” FDA's determination did pre-date Decision XVII/5, however, it is consistent with Decision XVII/5 as well as Decision XVI/12. Decision XVII/5 contains two details that Decision XVI/12 did not: It refers to stocks at the MDI manufacturing level and clarifies that both pre- and post-1996 stocks should be taken into account. FDA has informed EPA that in making their determination they took both pre-1996 and post-1996 stocks at the MDI manufacturing level into account. Even at the time Decision XVI/12 was taken, the U.S. Government articulated to Parties that the U.S. believed the terms on stocks in the Decision would be applied at the individual company level. The more recent Decision indicated other Parties' concurrence with this approach by specifically including the phrase “by that manufacturer.” Thus, the decision taken in December 2005 did not have a substantive impact on FDA's determination made in October 2005. Four commenters expressed the opinion that EPA did not adequately support its proposed essential use allocations for 2006 because EPA based the proposed 2006 allocations on outdated information. The commenters stated that FDA provided its determination to EPA on October 12, 2005, prior to several significant developments. Two of these commenters believe that EPA and FDA should take into account increases in HFA manufacturing, as well as the uptake of HFA products that began in January 2006 and that has increased from 3 percent to 10 percent of the overall albuterol market. One commenter stated that EPA and FDA should also consider the albuterol shortages that occurred in early 2006. We understand concerns raised by the commenters that given the 2008 ban on the sale of albuterol CFC MDIs, the market may be rapidly shifting and a snapshot of data six to twelve months prior to an allocation may not represent actual essential needs. In response, EPA notes that the purpose of a comment period is to bring new information and opinions to the Agency's attention and that EPA does look at data that comes to us during the comment period. While the Agency makes every reasonable effort to use best available data, it is also reasonable to create a process for data gathering and establish a cut off for new information. For example, it would be impossible for EPA to review and consider new data that comes to us the day a rule is signed. Although there is an established process for gathering information, the Agency does make every reasonable effort to use newer data when feasible. For example, EPA does evaluate new information that comes to the Agency during the comment period. In the April 11, 2006, proposed rule, the Agency stated “[t]he amounts listed in this proposal are subject to additional review by EPA and FDA if new information demonstrates that the proposed allocations are either too high or too low.” On the specific matter of revising the allocations in this rule based on more recent stock data, the Agency has data on stock holdings as of the end of 2005 and mid-2006 which is more recent data than was available at the time of publication of the proposed rule. However, these data do not indicate that the October 2005 FDA determination should be revised. Information on individual stock holdings is in the confidential portion of the docket for this rulemaking. One commenter stated that EPA based its proposed 2006 CFC essential use allocations on information on the number of MDI units produced during 2004 and anticipated to be produced during 2005, which was obtained from CFC MDI manufacturers via CAA section 114 letters. The commenter notes that actual 2005 information is now available both from companies themselves via section 114 requests and from public sources such as IMS data. The commenter also believes that FDA's recommendations to EPA regarding the 2006 essential use allocations were based on outdated and insufficient information. The commenter notes that since FDA's recommended allocation levels were sent to EPA in a letter dated October 12, 2005, FDA did not have complete 2005 production data at hand on which to base its conclusions. Further, any data that FDA used regarding stockpiles prior to the end of the calendar year would have been incomplete, since manufacturers replenished their CFC stockpiles from October through December 2005. The commenter stated that EPA's reliance on outdated data is not in line with the well-established administrative law principle that “an agency must examine relevant data” in making its determinations and that failure to do this “either is arbitrary decision making or at least prevents a court from finding it non-arbitrary.” With respect to EPA's proposed 2006 allocations, according to the commenter, the most pertinent data are from 2005, and the use of 2004 data cannot be justified. Thus, based on administrative law standards, the commenter believes that EPA will have acted in an arbitrary and capricious fashion by not using more recent and relevant data. The commenter recommends, therefore, that EPA send new Section 114 letters to manufacturers requesting current information and that FDA use this information to prepare a new determination of recommended allocations for 2006. EPA uses a well-established rulemaking process which includes a timeline for collection of data, development of a proposed rule, consideration of comments, and issuance of a final rule. As stated above, EPA agrees that the Agency should use best available data but notes that a reasonable cut off for new information is required in any process. Therefore, best available data in this circumstance may be the information available as of the development of the proposal, as supplemented by public comments and information generated by regulatory reporting requirements in time for consideration during the development of the final rule. For the past ten years of the essential use program, the Agency has based proposed allocations largely on data obtained during the year prior to the allocation. EPA does evaluate new information that comes to the Agency during the comment period and through periodic reports from regulated entities. New information on stock holdings and HFA MDI market penetration has been made available to EPA and FDA and the October 2005 FDA determination is still appropriate given this new information. The Agency further notes that it placed the 2005 accounting framework (which includes actual use data for 2005) in the public docket for this proposed rulemaking and relied on it in developing the rule. In the October 2005 letter to EPA, FDA stated that its determination of the amount of CFCs necessary for production of essential MDIs is lower than the total amount requested by manufacturers, and in reaching this estimate, FDA took into account the manufacturers' production of MDIs that used CFCs as a propellant in 2004, the manufacturers' estimated production in 2005 and 2006, the manufacturers' current stockpile levels, and the presence on the market of two albuterol MDIs that do not use CFCs. The letter also informed EPA that FDA based its determination for 2006 on an estimate of the quantity of MDIs using CFCs as a propellant that would be necessary for manufacturers to maintain a 12-month stockpile, consistent with paragraph 3 of Decision XVI/12. In making allocations, government experts examine projected MDI manufacturing demand for the year in question. One important element in arriving at an estimate of projected demand is to examine information on past demand and production. If EPA or FDA were to see use data in 2005 that was a significant departure from use in the preceding years, such data would be of interest to the agencies and could lead to a different conclusion. There was no 2005 data provided to the EPA that indicate a rapid change in the marketplace beyond the amounts offset by the IVAX production shortfall and therefore no need for FDA to revise its October 2005 determination. One commenter noted that EPA proposed the amount recommended by FDA without revisions. This commenter urged EPA to revise FDA's recommended allocations to take into account more recent stocks data in determining the 2006 allocations. In a similar context, the commenter also states that EPA and FDA did not apply the terms of Decision XVII/5 at the time of allocation. The commenter notes that Protocol decisions are part of Protocol law and are also U.S. law for purposes of essential use allocations. The commenter's paraphrase of CAA section 604(d)(2) reverses the EPA and FDA roles. The statute says that EPA “shall authorize,” to the extent consistent with the Montreal Protocol, if FDA, in consultation with EPA, determines such authorization to be necessary. Thus, FDA plays the primary role in the determination, although consultation must (and does) occur. Pursuant to the statutory language, EPA does evaluate whether the essential use allowances are consistent with the Montreal Protocol prior to issuing a proposed or final rule. The allowances contained in this final rule are fully consistent with the Protocol and Decisions of the Parties. In addition, as explained above, EPA concurs with FDA's interpretation and application of the phrase “one-year operational supply” as used in Decision XVII/5. In regard to the legal status of decisions of the Parties, EPA refers readers to the recent DC Circuit opinion in *NRDC* v. *EPA* , D.C. Cir. No. 04-1438 (August 29, 2006), as well as to the discussion of the matter in EPA's “Supplemental Brief for the Respondent,” filed in that same case. These documents are available in the docket for this action. One commenter noted that neither FDA nor EPA has explained how they propose to define and implement the key terms in Decision XVII/5. According to the commenter, the lack of definitions in the proposed rulemaking is not only counter to EPA's obligation to provide notice and opportunity for the public to comment, but also means that each company will apply its own definition. The commenter asserted that EPA's failure to define terms in the proposed rule is not in line with well-established requirements for notice and comment under the Administrative Procedures Act. The commenter also stated that there is no record in the docket to support EPA's claim in the proposed rule that it has “confirmed with FDA that this determination is consistent with Decision XVII/5 * * *” and that neither agency has provided any information on the methodology used to determine that the allocations were in conformity with the Decision. In reaching its determination, FDA used the plain meaning of the phrase “one-year operational supply.” A company's “one-year operational supply” is the amount needed to supply that company's manufacturing operations for one year. One commenter provided a helpful refinement of this concept by pointing out that its operations require a blend of CFCs -11, -12, and -114, and that the presence of only one or two of these compounds does not constitute an operational supply. This comment suggests that the use of the phrase in the proposed rule was sufficiently clear to put commenters on notice of FDA's interpretation. Because the Agency used the plain meaning of the words “one-year operational supply” there was no need to propose a definition for public comment. One commenter urged EPA to consider making essential use allowance allocations earlier in the year in order to minimize the logistical challenges posed in manufacturing essential MDIs. Since CFC-114 is produced throughout the year, this commenter could make use of its allowances if they were awarded sooner. A second commenter noted that the domestic ruling on essential use allowances for 2006 has been delayed due to extended consideration in the Montreal Protocol negotiation. As a result, the commenter stated the opinion that it is essential that domestic implementation occur at the earliest date to allow for production planning and execution to meet this year's CFC MDI producer needs. EPA makes every effort to allocate allowances in a timely manner but is affected by factors beyond its control, including the timing of Decisions and the length of the regulatory process itself. A final decision for 2006 allocations was only taken in December 2005. E. EPA May Not Allocate Allowances to Companies That Fail To Demonstrate Research and Development of Alternatives One commenter stated that EPA should not allocate essential use CFCs to companies that have not fully complied with Decision VIII/10 by clearly establishing that they are undertaking efforts to develop non-CFC alternatives. The commenter does not believe that Armstrong Pharmaceuticals' research and development program is adequate to achieve results by the December 31, 2008 phaseout deadline. To that end, the commenter recommends that EPA use its section 114 authority to investigate the resource commitment and level of effort of any research and development effort by Armstrong Pharmaceuticals. Unless EPA and FDA conclude that Armstrong's research and development program has a realistic chance of success by December 31, 2008, this commenter believes that Armstrong should be denied an essential use exemption in 2006 on this basis. The Agency agrees that companies should undertake research efforts to demonstrate a commitment to eliminate the need for an exemption, but disagrees with the premise that such efforts must be completed by December 31, 2008. Finally, EPA refers readers to the extensive discussion on this matter in the 2005 final allocation rule (70 FR 49838-9) and to a 2002 **Federal Register** notice that addresses this topic (67 FR 6355). F. Transition to Non-CFC Metered Dose Inhalers Two commenters expressed concern that the allocations may have negative effects on the transition to non-CFC MDIs. One of these commenters recommended that EPA and FDA consider how CFC allocations at this end stage might affect transition at the patient level. According to this commenter, the proposed allocations for 2006 could result in a transition period as long as 30 months in which both CFC and HFA albuterol have a substantial market share. Both commenters stated that a mixed market of CFC and HFA MDIs could have negative health effects on patients. For example, physicians might not know which product their patients are using and patients also may be confused, which could result in adverse health outcomes ( *e.g.* , since HFA inhalers may feel different than the CFC one, patients may overuse the HFA device). Both commenters also believe that mixed signals from EPA and FDA about albuterol and new HFA technology could cause confusion and uncertainty. As a result, one of the commenters believes there could be a backlash against the MDI transition, if not about ozone layer protection in general. In light of these factors, one commenter expressed the opinion that the 2006 allocations should send a message consistent with what has been occurring in the market place. Therefore, the commenter urged EPA and FDA to reevaluate the proposed allocation of 700 MT for CFC albuterol MDIs (including 147.7 MT allocated to one company, which according to the commenter is more than twice that company's one-year operational supply) so that those allocations do not impede the transition to non-CFC MDIs. Another commenter stated that a near-term, achievable transition date in 2005 or early 2006 would have sent a strong message to manufacturers, the medical community, and patients, providing a catalyst for the planning needed to transition to non-CFC MDIs. In addition, given the albuterol shortages reported in early 2006, this commenter stated that the continued and expanded availability of HFA MDIs is critical to ensuring that additional shortages do not occur and that the transition is as seamless as possible for patients. Both commenters urged EPA and FDA to use the allocation tool to promote a smooth transition during the end stage of the albuterol transition, in which HFA manufacturers are completing the scale-up of their production capacity. One commenter expressed the opinion that facilitating an orderly and transparent transition is consistent with EPA's authority and affirmative legal responsibility under the Clean Air Act to implement the Montreal Protocol. The commenters state that by limiting CFCs to only those uses that are necessary, EPA and FDA would enhance the likelihood of a smooth transition in several ways, which include sending a signal that the U.S. is serious about facilitating a transition away from CFC MDIs; reinforcing the idea that the transition offers positive opportunities for patients and physicians to improve medical outcomes; introducing further certainty about when HFA MDI supplies will be adequate; and preventing the market from sliding back into CFC albuterol, as this would engender confusion and risks to patient health. FDA previously conducted an extensive regulatory process to determine when albuterol MDIs would no longer be considered essential uses, evaluating the factors raised by the commenters above. FDA concluded in that rulemaking that albuterol CFC MDIs would no longer be essential at the end of 2008. As of 2006, however, CFC albuterol MDIs continue to appear on FDA's list of essential MDIs and FDA has determined that limited production of new CFCs is necessary to protect patient safety in 2006. Despite the continued need for CFC albuterol MDIs, EPA would note that the transition to CFC-free albuterol MDIs is well underway and the number of HFA MDIs on the market today is evidence of that fact. III. Allocation of Essential Use Allowances for Calendar Year 2006 With this action, EPA is allocating essential use allowances for calendar year 2006 to the entities listed in Table 1. These allowances are for the production or import of the specified quantity of class I controlled substances solely for the specified essential use. Table 1.—Essential Use Allowances for Calendar Year 2006 Company Chemical 2006 Quantity (metric tons)

(OMB)for review under Executive Order 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action. EPA prepared an analysis of the potential costs and benefits related to this action. This analysis is contained in the Agency's Regulatory Impact Analysis

(RIA)for the entire Title VI phaseout program (U.S. Environmental Protection Agency, “Regulatory Impact Analysis: Compliance with Section 604 of the Clean Air Act for the Phaseout of Ozone Depleting Chemicals,” July 1992). A copy of the analysis is available in the docket for this action and the analysis is briefly summarized here. The RIA examined the projected economic costs of a complete phaseout of consumption of ozone-depleting substances, as well as the projected benefits of phased reductions in total emissions of CFCs and other ozone-depleting substances, including essential use CFCs used for metered dose inhalers. B. Paperwork Reduction Act This action does not impose any new information collection burden. The recordkeeping and reporting requirements included in this action are already included in an existing information collection burden and this action does not make any changes that would affect the burden. However, the Office of Management and Budget

(OMB)has previously approved the information collection requirements contained in the existing regulations at 40 CFR 82.8(a) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 *et seq.* and has assigned OMB control number 2060-0170, EPA ICR number 1432.25. A copy of the OMB approved Information Collection Request

(ICR)may be obtained from Susan Auby, Collection Strategies Division; U.S. Environmental Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling

(202)566-1672. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with today's final rule. EPA has also determined that this rule will not have a significant economic impact on a substantial number of small entities. For purposes of assessing the impact of today's final rule on small entities, small entities are defined as:

(1)Pharmaceutical preparations manufacturing businesses (NAICS code 325412) that have less than 750 employees;

(2)a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and

(3)a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field. After considering the economic impacts of today's final rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant *adverse* economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. Sections 603 and 604. Thus, an agency may conclude that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. This rule provides an otherwise unavailable benefit to those companies that are receiving essential use allowances. We have therefore concluded that this final rule will relieve regulatory burden for all small entities. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative, if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed a small government agency plan under section 203 of the UMRA. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. Today's rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, or tribal governments or the private sector, since it merely provides exemptions from the 1996 phaseout of class I ODSs. Similarly, EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments, because this rule merely allocates essential use exemptions to entities as an exemption to the ban on production and import of class I ODSs. E. Executive Order 13132: Federalism Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Thus, Executive Order 13132 does not apply to this rule. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This final rule does not have tribal implications, as specified in Executive Order 13175. Today's rule affects only the companies that requested essential use allowances. Thus, Executive Order 13175 does not apply to this rule. G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks Executive Order 13045, “Protection of Children from Environmental Health risks and Safety Risks” (62 FR 19885, April 23, 1997), applies to any rule that

(1)is determined to be “economically significant” as defined under Executive Order 12866, and

(2)concerns an environmental health and safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045 because it implements the phaseout schedule and exemptions established by Congress in Title VI of the Clean Air Act. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The rule affects only the pharmaceutical companies that requested essential use allowances. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in this regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( *e.g.* , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This final rule does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards. J. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Therefore, 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** . This rule is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective October 4, 2006. V. Judicial Review Under section 307(b)(1) of the Act, EPA finds that these regulations are of national applicability. Accordingly, judicial review of the action is available only by the filing of a petition for review in the United States Court of Appeals for the District of Columbia Circuit within sixty days of publication of the action in the **Federal Register** . Under section 307(b)(2), the requirements of this rule may not be challenged later in judicial proceedings brought to enforce those requirements. VI. Effective Date of This Final Rule Section 553(d) of the Administrative Procedures Act

(APA)generally provides that rules may not take effect earlier than 30 days after they are published in the **Federal Register** . Today's final rule is issued under section 307(d) of the CAA, which states, “The provisions of section 553 through 557 * * * of Title 5 shall not, except as expressly provided in this subsection, apply to actions to which this subsection applies.” Thus, section 553(d) of the APA does not apply to this rule. EPA nevertheless is acting consistently with the policies underlying APA section 553(d) in making this rule effective October 4, 2006. APA section 553(d) provides an exception for any action that grants or recognizes an exemption or relieves a restriction. Because today's action grants an exemption to the phaseout of production and consumption of CFCs, EPA is making this action effective immediately to ensure continued availability of CFCs for medical devices. List of Subjects in 40 CFR Part 82 Environmental protection, Administrative practice and procedure, Air pollution control, Chemicals, Exports, Imports, Reporting and recordkeeping requirements. Dated: September 27, 2006. Stephen L. Johnson, Administrator. 40 CFR part 82 is amended as follows: PART 82—PROTECTION OF STRATOSPHERIC OZONE 1. The authority citation for part 82 continues to read as follows: Authority: 42 U.S.C. 7414, 7601,7671-7671q. Subpart A—Production and Consumption Controls 2. Section 82.8 is amended by revising the table in paragraph

(a)to read as follows: § 82.8 Grants of essential use allowances and critical use allowances.

(a)* * * Table I.—Essential Use Allowances for Calendar Year 2006 Company Chemical 2006 Quantity (metric tons)

(i)Metered Dose Inhalers (for oral inhalation) for Treatment of Asthma and Chronic Obstructive Pulmonary Disease Armstrong Pharmaceuticals CFC-11 or CFC-12 or CFC-114 147.50 Boehringer Ingelheim Pharmaceuticals CFC-11 or CFC-12 or CFC-114 116.50 Inyx (Aventis) CFC-11 or CFC-12 or CFC-114 106.4 Schering-Plough Corporation CFC-11 or CFC-12 or CFC-114 556.00 3M Pharmaceuticals CFC-11 or CFC-12 or CFC-114 0.0 Wyeth CFC-11 or CFC-12 or CFC-114 76.0 [FR Doc. E6-16372 Filed 10-3-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2006-0670; FRL-8092-7] Flumetsulam; Pesticide Tolerance AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This regulation establishes a tolerance for residues of flumetsulam in or on beans (dry). Dow AgroSciences LLC requested this tolerance under the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act of 1996 (FQPA). DATES: This regulation is effective October 4, 2006. Objections and requests for hearings must be received on or before December 4, 2006, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION) . ADDRESSES: EPA has established a docket for this action under docket identification

(ID)number EPA-HQ-OPP-2006-0670. All documents in the docket are listed in the index for the docket. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information

(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 in the electronic docket at *http://www.regulations.gov* , or, if only available in hard copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac Yard (South Building), 2777 S. Crystal Drive, Arlington, VA. The Docket Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The Docket telephone number is

(703)305-5805. FOR FURTHER INFORMATION CONTACT: Phil Errico, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:

(703)305-6663; e-mail address: *errico.philip@epa.gov* . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to: • Crop production (NAICS 111), e.g., agricultural workers; greenhouse, nursery, and floriculture workers; farmers. • Animal production (NAICS 112), e.g., cattle ranchers and farmers, dairy cattle farmers, livestock farmers. • Food manufacturing (NAICS 311), e.g., agricultural workers; farmers; greenhouse, nursery, and floriculture workers; ranchers; pesticide applicators. • Pesticide manufacturing (NAICS 32532), e.g., agricultural workers; commercial applicators; farmers; greenhouse, nursery, and floriculture workers; residential users. This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT . B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this **Federal Register** document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at *http://www.gpoaccess.gov/ecfr* . To access the OPPTS Harmonized Guidelines referenced in this document, go directly to the guidelines at *http://www.epa.gpo/opptsfrs/home/guidelin.htm* C. Can I File an Objection or Hearing Request? Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2006-0670 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before December 4, 2006. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2006-0670, by one of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* : Office of Pesticide Programs

(OPP)Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. • *Delivery* : OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Building), 2777 S. Crystal Drive, Arlington, VA. Deliveries are only accepted during the Docket's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket telephone number is

(703)305-5805. II. Background and Statutory Findings In the **Federal Register** of August 25, 2006 (71 FR 50412) (FRL-8084-8), EPA issued a notice pursuant to section 408(d)(3) of FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 7F4851) by Dow AgroSciences LLC, 9330 Zionville Road, Indianapolis, IN 46268-1054. The petition requested that 40 CFR 180.468 be amended by establishing a tolerance for residues of the herbicide flumetsulam, N-(2,6-difluorophenyl)-5-methyl-(1,2,4)-triazolo-[1,5-a]-pyrimidine-2-sulfonamide, in or on beans

(dry)at 0.05 parts per million (ppm). That notice included a summary of the petition prepared by the registrant. There were no comments received in response to the notice of filing. Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of section 408 of FFDCA and a complete description of the risk assessment process, see *http://www.epa.gov/fedrgstr/EPA-PEST/1997/November/Day-26/p30948.htm* . III. Aggregate Risk Assessment and Determination of Safety Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards and to make a determination on aggregate exposure, consistent with section 408(b)(2) of FFDCA, for a tolerance for residues of flumetsulam on beans

(dry)at 0.05 ppm ppm. EPA's assessment of exposures and risks associated with establishing the tolerance follows. A. Toxicological Profile EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the toxic effects caused by flumetsulam as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at *http://www.regulations.gov* , Docket OPP-2004-0317. B. Toxicological Endpoints For hazards that have a threshold below which there is no appreciable risk, the dose at which no adverse effects are observed (the NOAEL) from the toxicology study identified as appropriate for use in risk assessment is used to estimate the toxicological level of concern (LOC). However, the lowest dose at which adverse effects of concern are identified (the LOAEL) is sometimes used for risk assessment if no NOAEL was achieved in the toxicology study selected. An uncertainty factor

(UF)is applied to reflect uncertainties inherent in the extrapolation from laboratory animal data to humans and in the variations in sensitivity among members of the human population as well as other unknowns. The linear default risk methodology (Q*) is the primary method currently used by the Agency to quantify non-threshold hazards such as cancer. The Q* approach assumes that any amount of exposure will lead to some degree of cancer risk, estimates risk in terms of the probability of occurrence of additional cancer cases. More information can be found on the general principles EPA uses in risk characterization at *http://www.epa.gov/fedrgstr/EPA-PEST/1997/November/Day-26/p30948.htm* . A summary of the toxicological endpoints for flumetsulam used for human risk assessment is discussed in the docket OPP-2004-0317, for the Notice published in the **Federal Register** of September 24, 2004 (69 FR 57281-57284) (FRL-7680-7). C. Exposure Assessment 1. *Dietary exposure from food and feed uses* . Tolerances have been established (40 CFR 180.468) for the residues of flumetsulam, in or on a variety of raw agricultural commodities, including field corn grain, fodder, and forage, and soybean. Risk assessments were conducted by EPA to assess dietary exposures from flumetsulam in food as follows: i. *Acute exposure* . Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. No such effects were identified in the toxicological studies for flumetsulam; therefore, a quantitative acute dietary exposure assessment is unnecessary. ii. *Chronic exposure* . In conducting the chronic dietary exposure assessment EPA used the Dietary Exposure Evaluation Model software with the Food Commodity Intake Database (DEEM-FCID TM ), which incorporates food consumption data as reported by respondents in the USDA 1994-1996 and 1998 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII), and accumulated exposure to the chemical for each commodity. The following assumptions were made for the chronic exposure assessments: Tolerance level residue values, 100% crop treated, and the highest estimated chronic drinking water concentration were used. iii. *Cancer* . Flumetsulam is classified as a “Group E” pesticide (evidence of non-carcinogenicity to humans). 2. *Dietary exposure from drinking water* . The Agency lacks sufficient monitoring exposure data to complete a comprehensive dietary exposure analysis and risk assessment for flumetsulam in drinking water. Because the Agency does not have comprehensive monitoring data, drinking water concentration estimates are made by reliance on simulation or modeling taking into account data on the physical characteristics of flumetsulam. Based on the Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS) and Screening Concentrations in Groundwater (SCI-GROW) models, the estimated environmental concentrations

(EECs)of flumetsulam for chronic exposures are estimated to be 0.59 parts per billion

(ppb)for surface water and 0.823 ppb for ground water. 3. *From non-dietary exposure* . The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Flumetsulam is not registered for use on any sites that would result in residential exposure. 4. *Cumulative effects from substances with a common mechanism of toxicity* . Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.” Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to flumetsulam and any other substances and flumetsulam does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that flumetsulam has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements released by EPA's Office of Pesticide Programs concerning common mechanism determinations and procedures for cumulating effects from substances found to have a common mechanism on EPA's website at *http://www.epa.gov/pesticides/cumulative* . D. Safety Factor for Infants and Children 1. *In general* . Section 408 of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the data base on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. Margins of safety are incorporated into EPA risk assessments either directly through use of a MOE analysis or through using uncertainty (safety) factors in calculating a dose level that poses no appreciable risk to humans. In applying this provision, EPA either retains the default value of 10X when reliable data do not support the choice of a different factor, or, if reliable data are available, EPA uses a different additional safety factor value based on the use of traditional uncertainty factors and/or FQPA safety factors, as appropriate. 2. *Prenatal and postnatal sensitivity* . Neither acceptable Developmental Toxicity Studies in rats or rabbits revealed increased susceptibility of the fetus to flumetsulam after *in utero* exposure. Similarly, the results of the Two Generation Reproduction Study did not indicate an increased susceptibility to flumetsulam *in utero* or during postnatal exposure. 3. *Conclusion* . There is a complete toxicity data base for Flumetsulam and exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. EPA determined that the 10X SF to protect infants and children may be reduce to 1X. The FQPA factor is reduced to 1X because: i. There is a complete toxicity data base for flumetsulam; ii. Toxicity studies with flumetsulam showed no evidence of increased sensitivity in the young; and iii. Exposure data are complete or are estimated based on data that reasonably accounts for potential exposures. The exposure assessment was found to reasonably account for potential exposures because the dietary food exposure assessment utilizes proposed tolerance level residues and 100% crop treatment information for all commodities and the dietary drinking water assessment utilizes values generated by model and associated modeling parameters which are designed to provide health protective, high-end estimates of water concentrations. E. Aggregate Risks and Determination of Safety 1. *Acute dietary risk* . No acute hazards were identified following a single oral exposure

(dose)of flumetsulam. No effects in the developmental toxicity studies in the rabbit or rat were attributed to a single oral exposure during gestation. Therefore, Flumetsulam is not expected to pose an acute risk. 2. *Chronic dietary risk* . Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that exposure to flumetsulam from food will utilize <1% of the cPAD for the U.S. population, all infant and children population subgroups, and women of childbearing age (females 13 - 49 years old). In addition, there is potential for chronic dietary exposure to Flumetsulam in drinking water. After quantitatively incorporating the modeled Estimated Drinking Water Concentrations

(EDWC)for surface water (0.59 ppb) and ground water (0.82 ppb), the chronic aggregated dietary exposure does not exceed 1% of the cPAD, and is well below the Agency's Level of Concern. 3. *Short-term risk* . Short-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Flumetsulam is not registered for use on any sites that would result in residential exposure. Therefore, calculation of short-term aggregate risk is not appropriate. 4. *Intermediate-term risk* . Intermediate-term aggregate exposure takes into account residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Flumetsulam is not registered for use on any sites that would result in residential exposure. Therefore, calculation of intermediate-term aggregate risk is not appropriate. 5. *Aggregate cancer risk for U.S. population* . Flumetsulam is classified as a “Group E”, i.e., there is evidence of non-carcinogenicity for humans. Consequently, the conduct of a cancer risk assessment is not appropriate. 6. *Determination of safety* . Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, and to infants and children from aggregate exposure to Flumetsulam residues. IV. Other Considerations A. Analytical Enforcement Methodology The available analytical enforcement method (GC/MS method) is considered adequate for tolerance enforcement of Flumetsulam in plant commodities. The method is available, and has been submitted for inclusion in the Pesticide Analytical Manual. In the mean time, the method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number:

(410)305-2905; e-mail address: *residuemethods@epa.gov* . B. International Residue Limits There are no Codex, Canadian, or Mexican maximum residue limits

(MRLs)for Flumetsulam; therefore, no questions of compatibility with U.S. tolerances exist. V. Conclusion Therefore, the tolerance is established for residues of flumetsulam, N-(2,6-difluorophenyl)-5-methyl-(1,2,4)-triazolo-[1,5-a]-pyrimidine-2-sulfonamide, in or on beans

(dry)at 0.05 ppm. VI. Statutory and Executive Order Reviews This final rule establishes a tolerance under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget

(OMB)has exempted these types of actions from review under Executive Order 12866, entitled *Regulatory Planning and Review* (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, *Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use* (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 *et seq.* , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995

(UMRA)(Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled *Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations* (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled *Protection of Children from Environmental Health Risks and Safety Risks* (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act

(RFA)(5 U.S.C. 601 *et seq.* ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, entitled *Federalism* (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled *Consultation and Coordination with Indian Tribal Governments* (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. VII. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the **Federal Register** . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 180 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: September 25, 2006. Lois Rossi, Director, Registration Division, Office Pesticide Programs. Therefore, 40 CFR chapter I is amended as follows: PART 180—AMENDED 1. The authority citation for part 180 continues to read as follows: Authority: 21 U.S.C. 321(q), 346a and 371. 2. Section 180.468 is amended by alphabetically adding the commodity to the table in the undesignated text to read as follows: §180.468 Flumetsulam: tolerances for residues. Commodity Parts per million Beans

(dry)0.05 * * * * * [FR Doc. E6-16271 Filed 10-3-06; 8:45 am] BILLING CODE 6560-50-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2006-0368; FRL-8092-5] Acetic Acid Ethenyl Ester, Polymer with 1-Ethenyl-2-Pyrrolidinone; Tolerance Exemption AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This regulation establishes an exemption from the requirement of a tolerance for residues of acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone; when used as an inert ingredient in a pesticide chemical formulation. BASF Corporation submitted a petition to EPA under the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act of 1996

(FQPA)requesting an exemption from the requirement of a tolerance. This regulation eliminates the need to establish a maximum permissible level for residues of acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone. DATES: This regulation is effective October 4, 2006. Objections and requests for hearings must be received on or before December 4, 2006, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION ). ADDRESSES: EPA has established a docket for this action under docket identification

(ID)number EPA-HQ-OPP-2006-0368. All documents in the docket are listed in the index for the docket. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information

(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 in the electronic docket at *http://www.regulations.gov* , or, if only available in hard copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. The Docket Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The Docket Facility telephone number is

(703)305-5805. FOR FURTHER INFORMATION CONTACT: Bipin Gandhi, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:

(703)308-8380; e-mail address: *gandhi.bipin@epa.gov* . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to: • Crop production (NAICS code 111). • Animal production (NAICS code 112). • Food manufacturing (NAICS code 311). • Pesticide manufacturing (NAICS code 32532). This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT . B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this “ **Federal Register** ” document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's pilot e-CFR site at *http://www.gpoaccess.gov/ecfr* . C. Can I File an Objection or Hearing Request? Under section 408(g) of FFDCA, as amended by FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2006-0368 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before December 4, 2006. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2006-0368, by one of the following methods. • *Federal eRulemaking Portal* : *http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* : Office of Pesticide Programs

(OPP)Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. • *Delivery* : OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only accepted during the Docket's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket Facility telephone number is

(703)305-5805. II. Background and Statutory Findings In the **Federal Register** of June 28, 2006 (71 FR 36792) (FRL-8073-3), EPA issued a notice pursuant to section 408 of FFDCA, 21 U.S.C. 346a, as amended by FQPA (Public Law 104-170), announcing the filing of a pesticide petition (PP 6E7063) by BASF Corporation, 100 Campus Dr., Florham Park, NJ 07932. The petition requested that 40 CFR 180.960 be amended by establishing an exemption from the requirement of a tolerance for residues of acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone (CAS No. 25086-89-9). That notice included a summary of the petition prepared by the petitioner. There were no comments in response to the notice of filing. Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing an exemption from the requirement of a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue...” and specifies factors EPA is to consider in establishing an exemption. III. Inert Ingredient Definition Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply non-toxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients. IV. Risk Assessment and Statutory Findings EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be shown that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established. Consistent with section 408(b)(2)(D) of FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. In the case of certain chemical substances that are defined as polymers, the Agency has established a set of criteria to identify categories of polymers that should present minimal or no risk. The definition of a polymer is given in 40 CFR 723.250(b). The following exclusion criteria for identifying these low-risk polymers are described in 40 CFR 723.250(d). 1. The polymer, acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone, is not a cationic polymer nor is it reasonably anticipated to become a cationic polymer in a natural aquatic environment. 2. The polymer does contain as an integral part of its composition the atomic elements carbon, hydrogen, nitrogen and oxygen. 3. The polymer does not contain as an integral part of its composition, except as impurities, any element other than those listed in 40 CFR 723.250(d)(2)(ii). 4. The polymer is neither designed nor can it be reasonably anticipated to substantially degrade, decompose, or depolymerize. 5. The polymer is manufactured or imported from monomers and/or reactants that are already included on the TSCA Chemical Substance Inventory or manufactured under an applicable TSCA section 5 exemption. 6. The polymer is not a water absorbing polymer with a number average molecular weight

(MW)greater than or equal to 10,000 daltons. Additionally, the polymer, acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone, also meets as required the following exemption criteria specified in 40 CFR 723.250(e). 7. The polymer's number average MW of 35,000 is greater than 10,000 daltons. The polymer contains less than 2% oligomeric material below MW 500 and less than 5% oligomeric material below MW 1,000. Thus, acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone meets all the criteria for a polymer to be considered low risk under 40 CFR 723.250. Based on its conformance to the criteria in this unit, no mammalian toxicity is anticipated from dietary, inhalation, or dermal exposure to acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone. V. Aggregate Exposures For the purposes of assessing potential exposure under this exemption, EPA considered that acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone could be present in all raw and processed agricultural commodities and drinking water, and that non-occupational, non-dietary exposure was possible. The number average MW of acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone is 35,000 daltons. Generally, a polymer of this size would be poorly absorbed through the intact gastrointestinal tract or through intact human skin. Since acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone conforms to the criteria that identifies a low-risk polymer, there are no concerns for risks associated with any potential exposure scenarios that are reasonably foreseeable. The Agency has determined that a tolerance is not necessary to protect the public health. VI. Cumulative Effects Section 408 (b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance or tolerance exemption, the Agency consider “available information” concerning the cumulative effects of a particular chemical's residues and “other substances that have a common mechanism of toxicity.” EPA does not have, at this time, available data to determine whether acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone has a common mechanism of toxicity with other substances. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone and any other substances and acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone does not appear to produce a toxic metabolite as produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements released by EPA's Office of Pesticide Programs concerning common mechanism determinations and procedures for cumulating effects from substances found to have a common mechanism on EPA's website at *http://www.epa.gov/pesticides/cumulative* . VII. Additional Safety Factor for the Protection of Infants and Children Section 408 of FFDCA provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database unless EPA concludes that a different margin of safety will be safe for infants and children. Due to the expected low toxicity of acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone, EPA has not used a safety factor analysis to assess the risk. For the same reasons the additional tenfold safety factor is unnecessary. VIII. Determination of Safety Based on the conformance to the criteria used to identify a low-risk polymer, EPA concludes that there is a reasonable certainty of no harm to the U.S. population, including infants and children, from aggregate exposure to residues of acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone. IX. Other Considerations A. Endocrine Disruptors There is no available evidence that acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone is an endocrine disruptor. B. Analytical Enforcement Methodology An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation. C. International Tolerances The Agency is not aware of any country requiring a tolerance for acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone nor have any CODEX Maximum Residue Levels

(MRLs)been established for any food crops at this time. X. Conclusion Accordingly, EPA finds that exempting residues of acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone from the requirement of a tolerance will be safe. XI. Statutory and Executive Order Reviews This final rule establishes an exemption from the tolerance requirement under section 408(d) of FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget

(UMRA)(Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled *Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations* (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled *Protection of Children from Environmental Health Risks and Safety Risks* (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of FFDCA, such as the exemption in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act

(RFA)(5 U.S.C. 601 *et seq* .) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, entitled *Federalism* (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule directly regulates growers, food processors, food handlers, and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled *Consultation and Coordination with Indian Tribal Governments* (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. XII. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq* ., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this rule in the **Federal Register** . This rule is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 180 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: September 25, 2006. Lois Rossi, Director, Registration Division, Office of Pesticide Programs. Therefore, 40 CFR chapter I is amended as follows: PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority: 21 U.S.C. 321(q), 346a and 371. 2. In § 180.960, the table is amended by adding the following entry in alphabetically order to read as follows: § 180.960 Polymers; exemptions from the requirement of a tolerance. Polymer CAS No. * * * * * Acetic acid ethenyl ester, polymer with 1-ethenyl-2-pyrrolidinone 25086-89-9 * * * * * [FR Doc. E6-16184 Filed 10-3-06; 8:45 am] BILLING CODE 6560-50-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 281 [EPA-R01-UST-2006-0622; FRL-8226-5] New Hampshire: Final Approval of Underground Storage Tank Program Revisions AGENCY: Environmental Protection Agency (EPA). ACTION: Immediate final rule. SUMMARY: The State of New Hampshire has amended the regulations previously approved by EPA under Subtitle I of the Resource Conservation and Recovery Act (RCRA). EPA has determined that these amendments satisfy all requirements needed for program approval and is approving the State's changes through this immediate final action. EPA is publishing this rule to approve the changes without a prior tentative determination because we believe this action is not controversial and do not expect comments that oppose it. Unless we get written comments which oppose this approval during the comment period, the decision to approve New Hampshire's amendments to its underground storage tank

(UST)program will take effect as provided below. If we receive comments that oppose this action, we will publish a document in the **Federal Register** withdrawing this rule before it takes effect, and the separate document in the proposed rules section of this **Federal Register** will serve as the proposal to approve the amendments. DATES: This approval will become effective on December 4, 2006, unless EPA receives adverse written comment by November 3, 2006. If EPA receives such comment, it will publish a timely withdrawal of this immediate final rule in the **Federal Register** and inform the public that this approval will not take immediate effect. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R01-UST-2006-0622, by one of the following methods: • *www.regulations.gov:* Follow the on-line instructions for submitting comments. • *E-mail:* *hanamoto.susan@epa.gov. * • *Mail:* Susan Hanamoto, Office of Underground Storage Tanks, EPA Region I, One Congress Street, Suite 1100 (Mail Code: HBO), Boston, MA 02114-2023. • *Hand Delivery:* Susan Hanamoto, Office of Underground Storage Tanks, EPA Region I, One Congress Street, Suite 1100 (Mail Code: HBO), Boston, MA 02114-2023. Such deliveries are only accepted during the EPA's normal hours of operation, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-R01-UST-2006-0622. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *www.regulations.gov* or e-mail. The *www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *www.regulations.gov* , your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. *Docket:* EPA has established a docket for this action under Docket ID No. EPA-R01-UST-2006-0622. All documents in the docket are listed on the *www.regulations.gov* Web site. Although listed in the index, some information may not be publicly available, e.g., 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 EPA Region I Library, One Congress Street, 11th Floor, Boston, MA 02114-2023; business hours Tuesday through Thursday 10 a.m. to 3 p.m., telephone:

(617)918-1990; or the New Hampshire Department of Environmental Services, Public Information Center, 29 Hazen Drive, Concord, NH 03302-0095; Phone Number:

(603)271-2919 or

(603)271-2975; Business hours: 8 a.m. to 4 p.m., Monday-Friday. Records in these dockets are available for inspection and copying during normal business hours. FOR FURTHER INFORMATION CONTACT: Susan Hanamoto, Office of Underground Storage Tanks, EPA Region I, One Congress Street, Suite 1100 (Mail Code: HBO), Boston, MA 02114-2023, telephone:

(617)918-1219, e-mail: *hanamoto.susan@epa.gov.* SUPPLEMENTARY INFORMATION: A. Why Are Revisions to State Programs Necessary? States that have received final approval of their UST program under Section 9004 of RCRA, 42 U.S.C. 6991c, must maintain a UST program that is “no less stringent” than the Federal program with respect to the seven requirements set forth at RCRA section 9004(a)(1) through (7), 42 U.S.C. 6991c(a)(1) through (7), that meets the notification requirements of RCRA section 9004(a)(8), and that also provides for adequate enforcement of compliance with UST standards in accordance with RCRA section 9004(a), 42 U.S.C. 6991c(a). Either EPA or the approved state may initiate program revision. Program revision may be necessary when the controlling Federal or state statutory or regulatory authority is changed or when responsibility for the state program is shifted to a new agency or agencies. B. What Decisions Have We Made in This Rule? We conclude that New Hampshire's application to revise its approved program meets all of the statutory and regulatory requirements established by RCRA. Therefore, we grant New Hampshire approval to operate its UST program with the revisions described in the program approval application. C. What Is the Effect of Today's Approval Decision? This action does not impose additional requirements on the regulated community because the regulations for which New Hampshire is being approved by today's action are already effective, and they are not changed by today's action. D. Why Wasn't There a Proposed Rule Before Today's Rule? EPA did not publish a proposal before today's rule because we view this as a non-controversial program change and do not expect comments that oppose this approval. We are providing an opportunity for public comment now. E. What Happens if EPA Receives Comments That Oppose This Action? If EPA receives comments that oppose this approval, we will withdraw this rule by publishing a document in the **Federal Register** before the rule becomes effective. EPA will base any further decision on the approval of the state program changes on the proposal mentioned in the previous paragraph. We will then address all public comments in a later final rule. You may not have another opportunity to comment. If you want to comment on this approval, you must do so at this time. If we receive comments that oppose only the approval of a particular change to the State UST program, we will withdraw that part of this rule but the approval of the program changes that the comments do not oppose will become effective on the date specified above. The **Federal Register** withdrawal document will specify which part of the approval will become effective, and which part is being withdrawn. F. What Has New Hampshire Previously Been Approved for? New Hampshire received final approval on June 19, 1991, effective July 19, 1991 (56 FR 28089) to administer the UST program in lieu of the Federal program. On November 2, 1993, effective January 3, 1994 (58 FR 58624), EPA codified the approved New Hampshire program, incorporating by reference the state statutes and regulations that are thereby subject to EPA's inspection and enforcement authorities under RCRA sections 9005 and 9006, 42 U.S.C. 6991d and 6991e, and other applicable statutory and regulatory provisions. G. What Changes Are We Approving With Today's Action? On February 23, 2006, in accordance with 40 CFR 281.52(b), New Hampshire submitted a final complete program revision application seeking approval for its UST program revisions adopted as of February 1, 2005. We now make an immediate final decision, subject to receipt of written comments that oppose this action, that New Hampshire's UST program revision satisfies all of the requirements necessary to qualify for final approval. Therefore, we grant New Hampshire final approval for the following program additions and changes: Description of required federal element Implementing state authority 42 U.S.C. 6991c(a)(1) Requirements for maintaining leak detection system, inventory control with tank testing, or other system to identify releases Env-Wm 1401.11. Env-Wm 1401.13(e). Env-Wm 1401.16(c-d). Env-Wm 1401.29. Env-Wm 1401.30 (j-m),

(r)and(u). Env-Wm 1401.31(b) and (j). Env-Wm 1401.37(a), (c-e), and (g-i). 42 U.S.C. 6991c(a)(2) Requirements for maintaining records of monitoring or leak detection, inventory control or tank testing systems Env-Wm 1401.11. Env-Wm 1401.13(f), (h). Env-Wm 1401.14(b). Env-Wm 1401.25(f). Env-Wm 1401.28(g) and (n). Env-Wm 1401.29(h). Env-Wm 1401.30(g-I), (n-q), and (v). Env-Wm 1401.31(c-f). Env-Wm 1401.32(c-j). Env-Wm 1401.33(f-k). Env-Wm 1401.36(f-h). Env-Wm 1401.37(f). Env-Wm 1401.38(c-d). 42 U.S.C. 6991c(a)(5) Requirements for closure of tanks to prevent future releases Env-Wm 1401.15(d-g). Env-Wm 1401.17. Env-Wm 1401.18. Env-Wm 1401.28(q). Env-Wm 1401.34(i). Env-Wm 1401.37(b). Env-Wm 1401.38(a). 42 U.S.C. 6991c(a)(7) Standards of performance for new USTs Env-Wm 1401.21(a-c),(e-h), and (j-k). Env-Wm 1401.22(a-d), (f-g), and (i-j). Env-Wm 1401.23(a). Env-Wm 1401.24. Env-Wm 1401.25(b-n). Env-Wm 1401.26(c) and (d). Env-Wm 1401.27(b). Env-Wm 1401.28. Env-Wm 1401.33(a), (c-e). Env-Wm 1401.36(a-e), and (i). Env-Wm 1401.38(b). H. Where Are the Revised Rules Different From the Federal Rules? We consider the following State requirements to be more stringent than the Federal requirements and they are part of New Hampshire's approved program and are Federally enforceable. • New Hampshire requires the operator of an UST facility to conduct inventory monitoring of each UST and to maintain separate records for each tank and interconnected system, unless the secondary containment of the UST is continuously monitored for both regulated substance and water. Inventory records for single-wall USTs must be recorded on a form obtained from the Department of Environmental Services or another representative motor fuel and bulk storage fuel oil inventory form, which process all of the required data using an automatic tank gauge monitor and computer software. When the Department has determined that inventory monitoring has not been conducted, the owner must perform a tightness test on the UST system within 30 days of the determination. • New Hampshire requires all regulated metal UST systems, except vent piping, without corrosion protection and all hazardous substance UST systems without secondary containment and leak monitoring to be permanently closed. Any part of an existing single wall UST system that routinely contains a regulated substance without secondary containment and leak monitoring, except for vent piping, must be permanently closed by December 22, 2015. • New Hampshire requires dispenser sumps installed beneath each dispenser to be provided with continuous leak detection monitoring by the piping sump sensor or equipped with a sump sensor. All piping and dispenser sumps must be maintained free of liquid and debris, be liquid-tight, have liquid-tight penetration fittings for all sump entries, and be able to respond to small accumulations of liquids within the sumps. • New Hampshire requires spill containment equipment installed with drain valves on UST systems that store gasoline to have the valve replaced annually or be permanently sealed. • New Hampshire [1401.25(i)] requires all new and replacement overfill protection devices be installed to allow access for inspection of proper operation. By February 1, 2006, [1401.25(j)] all existing UST systems with suction piping and an air eliminator must be equipped with a high level visual and audible alarm or with a device that will automatically and completely shut off flow into the tank when the tank is no more than 95% full and [1401.25(l) and (m)] when product is pumped to a new UST system or any new UST system receives a delivery without a tight fill connection, the new UST systems must only be equipped with a high level visual and audible overfill alarm. [1401.25(k)] All new high level alarms must have both visual and audible alarms, be clearly labeled as a tank overfill alarm, and be clearly visible and audible to the transfer operator. • New Hampshire requires the certified tank installer to perform a piping pressure test on the vent piping after installation and prior to backfill and to test all installed sumps for tightness. The test results must be provided to the Department and owner at the time of the backfill inspection of the system. • New Hampshire requires a concrete pad having positive limiting barriers to be constructed and maintained so as to contain a volume of at least five gallons for each dispenser. • New Hampshire requires new spill containment equipment to be tested for tightness and the results to be submitted to the Department at the time of inspection and to the owner within 30 days of the test. • New Hampshire no longer allows groundwater or soil gas vapor monitoring to be installed as a release detection mechanism. • New Hampshire requires all new metal vent piping to be protected from corrosion. • New Hampshire requires all new sumps to be tested for tightness within 30 days from installation and the results to be submitted to the Department no later than 30 days after the date of the test. • New Hampshire requires single wall UST systems, with the exception of vent piping, that discharge, leak, spill, or release a regulated substance to the environment to be permanently closed. New Hampshire's regulations contain requirements that are broader in scope than the Federal program which are not part of the program being approved by today's action. EPA cannot enforce these broader in scope requirements. Although compliance with these provisions is required under New Hampshire law, they are not Federal RCRA requirements. Such provisions include, but are not limited to, the following: • New Hampshire's regulations reference compliance with stage I and stage II requirements in Env-Wm 1404, “Volatile Organic Compounds (VOCs): Gasoline Dispensing Facilities, Bulk Gasoline Plants, and Cargo Trucks,” when applying for a permit to operate, when transferring gasoline, and when placing back into service temporarily closed UST systems. The Federal RCRA program does not cover stage I and stage II requirements; therefore, in this regard, the New Hampshire program is broader in scope than the Federal Program. • New Hampshire requires all new UST sites to be located no closer than 500 feet from a public water system well for all gasoline UST systems; at least 400 feet from a public water supply well for all regulated substances except gasoline; at least 250 feet from a non-pubic water supply well for all gasoline UST systems; and at least 75 feet from a non-public water supply well for all regulated substances except gasoline. The Federal RCRA program does not cover the siting of UST systems; therefore, in this regard, the New Hampshire program is broader in scope than the Federal Program. • New Hampshire does not allow storm water runoff from UST facilities to be discharged to the subsurface, and storm water must not be directed to flow over any tank pad or dispensing pad. The Federal RCRA program does not cover storm water runoff from UST facilities; therefore, in this regard, the New Hampshire program is broader in scope than the Federal Program. I. Administrative Requirements This action will only approve state underground storage tank program requirements pursuant to RCRA section 9004 and imposes no requirements other than those imposed by state law (see SUPPLEMENTARY INFORMATION ). Therefore, this action complies with applicable executive orders and statutory provisions as follows: 1. Executive Order

(EO)12866: Regulatory Planning Review: The Office of Management and Budget has exempted this action from the requirements of Executive Order 12866 (58 FR 51735, October 4, 1993), and therefore this action is not subject to review by OMB. 2. Paperwork Reduction Act: This action does not impose an information collection burden under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). 3. Regulatory Flexibility Act: After considering the economic impacts of today's action on small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ), I certify that this action will not have a significant economic impact on a substantial number of small entities. 4. Unfunded Mandates Reform Act: Because this action 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 (Public Law 104-4). 5. For the same reason, this action also does not significantly or uniquely affect the communities of Tribal governments, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). 6. Executive Order 13132: Federalism: This action will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999) because it merely approves state requirements as part of the State UST program without altering the relationship or the distribution of power and responsibilities established by RCRA. 7. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments: This action is not subject to EO 13175 (65 FR 67249, November 9, 2000) because it will not have tribal implications ( *i.e.* , substantial direct effects 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). 8. Executive Order 13045: Protection of Children from Environmental Health & Safety Risks: This action is not subject to EO 13045 (62 FR 19885, April 23, 1997) because it is not economically significant and it is not based on health or safety risks. 9. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use: This action is not subject to EO 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action as defined in EO 12866. 10. National Technology Transfer and Advancement Act: EPA approves State programs as long as they meet criteria required by RCRA, so it would be inconsistent with applicable law for EPA, in its review of a State program, to require the use of any particular voluntary consensus standard in place of another standard that otherwise meets the requirements of RCRA. Thus, the requirements of Section 12(d) of the National Technology Transfer and Advancement Act (15 U.S.C. 272 note) does not apply to this action. 11. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. 12. EPA has complied with Executive Order 12630 (53 FR 8859, March 18, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. Congressional Review Act: EPA will submit a report containing this rule and other information required by the Congressional Review Act (5 U.S.C. 801 *et seq.* ) to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication 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). Nevertheless, to allow time for public comment, this action will be effective on December 4, 2006. List of Subjects in 40 CFR Part 281 Environmental protection, Administrative practice and procedures, Hazardous substances, Intergovernmental relations, Reporting and recordkeeping requirements. Authority: This document is issued under the authority of section 9004 of the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6991c. Dated: September 20, 2006. Robert W. Varney, Regional Administrator, EPA Region I. [FR Doc. E6-16375 Filed 10-3-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 302 and 355 [EPA-HQ-SFUND-2003-0022; FRL-8227-7] RIN 2050-AF02 Administrative Reporting Exemption for Certain Air Releases of NO X (NO and NO 2 ) AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: The Environmental Protection Agency is issuing a final rule that will reduce reporting burdens under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and the Emergency Planning and Community Right-to-Know Act, also known as Title III of the Superfund Amendments and Reauthorization Act. In this rule, EPA broadens the existing reporting exemptions for releases that are the result of combustion of less than 1,000 pounds of nitrogen oxide and less than 1,000 pounds of nitrogen dioxide to the air in 24 hours. These may also include emissions from detonation or processes that include both combustion and non-combustion operations, such as nitric acid production. This administrative reporting exemption is protective of human health and the environment and consistent with the Agency's goal to reduce unnecessary reports given that the levels for which the Clean Air Act regulates nitrogen oxides are considerably higher than 10 pounds. In addition, the Agency believes that the information gained through submission of the reports for those exempted releases would not contribute significantly to the data that are already available through the permitting process to the government and the public. DATES: This final rule is effective on November 3, 2006. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-HQ-SFUND-2003-0022. 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, *e.g.* , 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 Superfund Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is

(202)566-1744, and the telephone number for the Superfund Docket is

(202)566-0276. Note: The EPA Docket Center suffered damage due to flooding during the last week of June 2006. The Docket Center is continuing to operate. However, during the cleanup, there will be temporary changes to Docket Center telephone numbers, addresses, and hours of operation for people who wish to visit the Public Reading Room to view documents. Consult EPA's **Federal Register** notice at 71 FR 38147 (July 5, 2006) or the EPA Web site at *www.epa.gov/epahome/dockets.htm* for current information on docket status, locations and telephone numbers. FOR FURTHER INFORMATION CONTACT: Lynn Beasley, Regulation and Policy Development Division, Office of Emergency Management, Office of Solid Waste and Emergency Response (5104A), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone number:

(202)564-1965; fax number:

(202)564-2625; e-mail address: *beasley.lynn@epa.gov.* SUPPLEMENTARY INFORMATION: A. Does This Action Apply to Me? Type of entity Examples of affected entities Industry Application of this rule should result in a reduction to your reporting burden—persons in charge of vessels or facilities that may release nitrogen oxide

(NO)or nitrogen dioxide (NO 2 ) or both (NO X ) to the air that is the result of combustion and combustion-related activities. State, Local, or Tribal Governments State and Tribal Emergency Response Commissions, and Local Emergency Planning Committees. Federal Government National Response Center and any Federal agency that may release NO X . This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your facility is regulated by this action, you should carefully examine the criteria in section I.C of this final rule preamble and the applicability criteria in § 302.6 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section. B. Outline of This Preamble The contents of this preamble are listed in the following outline: I. Introduction A. What is the Statutory Authority for this Rulemaking? B. What is the Background For this Rulemaking? C. Which NO and NO 2 Releases Are Administratively Exempt From the Reporting Requirements? D. What Are the Changes From the Proposed Rule? II. Response to Comments A. Support for Proposed Reporting Exemptions B. Support for Expanding Continuous Release Reporting in Addition to Proposed Exemption 1. Simplify Continuous Release Initial Release Notification 2. Clarify Continuous Release Reporting Requirements C. Support to Increase Level of the Exemption 1. Support a Number Larger than 1,000 Pounds 2. Increase RQ for Combustion-Related Exemption to 5,000 Pounds 3. Raise or Eliminate the 1,000 Pound Reporting Threshold for all Combustion-Related Releases D. Request That the Administrative Reporting Exemption Not Include the Qualifier “Accidents and Malfunctions” 1. Accidents and Malfunctions 2. Also Include in Exemptions—Start-ups, Shut-downs, and Up-sets 3. Clarify that Flares are Control Devices—Not Considered Accidents and Malfunctions E. Requests That the Administrative Reporting Exemption Include Combustion and Non-Combustion Processes F. Interpretation of CERCLA Provisions 1. Proposed Exemption only Applies to Emissions Not Considered Federally Permitted 2. Clarify that NO X Represents NO and NO 2 Interchangeably G. Issues Related to Rulemaking Procedure III. Regulatory Analysis A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Risks and Safety Risks H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution or Use I. National Technology Transfer and Advancement Act of 1995 J. Congressional Review Act I. Introduction A. What Is the Statutory Authority for This Rulemaking? The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. 9601 *et seq.* , as amended by the Superfund Amendments and Reauthorization Act of 1986, gives the Federal government broad authority to respond to releases or threats of releases of hazardous substances from vessels and facilities. The term “hazardous substance” is defined in section 101(14) of CERCLA primarily by reference to other Federal environmental statutes. 1 Section 102 of CERCLA gives the U.S. Environmental Protection Agency

(EPA)authority to designate additional hazardous substances. Currently there are 764 CERCLA hazardous substances, 2 exclusive of Radionuclides, F-, K-, and Unlisted Characteristic Hazardous Wastes. 1 Other Federal environmental statutes include: Federal Water Pollution Control Act (sections 1321(b)(2)(A), 1317(a)), Solid Waste Disposal Act (section 6921), Clean Air Act (section 7412), and Toxic Substances Control Act (section 2606). 2 This total includes the P- and U-listed wastes under Subtitle C of the hazardous waste regulations. Under CERCLA section 103(a), the person in charge of a vessel or facility from which a CERCLA hazardous substance has been released in a quantity that equals or exceeds its reportable quantity

(RQ)must immediately notify the National Response Center

(NRC)of the release. A release is reportable if an RQ or more is released within a 24-hour period (see 40 CFR 302.6). This reporting requirement, among other things, serves as a trigger for informing the Federal government of a release so that Federal personnel can evaluate the need for a Federal removal or remedial action and undertake any necessary action in a timely fashion. On March 19, 1998, the Agency issued a final rule (see 63 FR 13459) that broadened the existing reporting exemptions for releases of naturally occurring radionuclides. The Agency relied on CERCLA sections 102(a), 103, and 115 (the general rulemaking authority under CERCLA) as authority to issue regulations governing section 103 reporting requirements, as well as administrative reporting exemptions. These exemptions were granted for releases of hazardous substances that pose little or no risk or to which a Federal response is infeasible or inappropriate (see 63 FR 13461). In addition to the reporting requirements established pursuant to CERCLA section 103, section 304 of the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA), 42 U.S.C. 11001 *et seq.* , requires the owner or operator of certain facilities to immediately report releases of CERCLA hazardous substances or any extremely hazardous substances 3 to State and local authorities (see 40 CFR 355.40). 3 Extremely hazardous substances are those listed in Appendix A and B of 40 CFR part 355. EPCRA section 11002(a)(2) required the Agency to publish a list of extremely hazardous substances that is the same list as the list of substances published in November 1985 by EPA in Appendix A of the “Chemical Emergency Preparedness Program Interim Guidance.” This rule that applies to CERCLA section 103 notification requirements also applies to EPCRA section 304 notification requirements. In part, EPCRA's reporting requirement is designed to effectuate a statutory purpose of informing communities and the public generally about releases from nearby facilities. Notification is to be given to the community emergency coordinator for each Local Emergency Planning Committee

(LEPC)for any area likely to be affected by the release, and the State Emergency Response Commission

(SERC)of any State likely to be affected by the release. Through this notification, State and local officials can assess whether a response to the release is appropriate, regardless of whether the Federal government intends to respond. EPCRA section 304 notification requirements apply only to releases that have the potential for off-site exposure and that are from facilities that produce, use, or store a “hazardous chemical,” as defined by regulations promulgated under the Occupational Safety and Health Act of 1970 (29 CFR 1910.1200(c)) and by section 311 of EPCRA. B. What Is the Background for This Rulemaking? On December 21, 1999, EPA published interim guidance on the Federally permitted release exemption to section 103 of CERCLA and section 304 of EPCRA ( *see* 64 FR 71614). The interim guidance discussed EPA's interpretation of the Federally permitted release exemption as it applies to some air emissions and solicited public comment. The public comment period closed, after several extensions, on April 10, 2000. The Agency received many comments on the interim guidance, including specific questions regarding EPA's interpretation of the Federally permitted release exemption as it applies to NO X releases. NO X releases to air are somewhat unique in that, in most cases, Federally enforceable permits (including State issued through delegated programs) are not issued to facilities that release NO X below a certain threshold. NO X emissions from these sources are minimal and may not pose a hazard to health or the environment. In its final Guidance on the CERCLA Section 101(10)(H) Federally Permitted Release Definition for Certain Air Emissions (67 FR 18899, April 17, 2002), EPA responded to the concern that many small facilities do not have Federally enforceable permits by stating in that **Federal Register** notice that it recognized, “that certain uncontrolled air emissions of nitrogen oxide

(NO)and nitrogen dioxide (NO 2 ) equal to or greater than the ten pound RQ may rarely require a government response.” ( *See* 67 FR 18904.) When the Agency published that final Guidance, it also extended and expanded an on-going enforcement discretion (Appendix B to that Notice) policy 4 with regard to owners, operators or persons in charge of facilities or vessels for failure to report air releases of NO and NO 2 that would otherwise trigger a reporting obligation under CERCLA section 103 and EPCRA section 304, unless such releases are the result of an accident or malfunction. ( *See* 67 FR 18904.) 4 The enforcement discretion policy was initially announced in a memorandum to EPA Regional Counsels and Division Directors for EPCRA section 304/CERCLA section 103 from Steven A. Herman, Assistant Administrator, Office of Enforcement and Compliance Assurance, dated February 15, 2000. Since the publication of the Guidance, there has been significant interest and inquiry by industry for the Agency to address the reporting obligations for NO X releases to air under CERCLA and EPCRA. Most recently, the Office of Management and Budget

(OMB)asked the public for their suggested reforms to rules, guidance documents, or paperwork requirements that would reduce unnecessary costs, increase effectiveness, reduce uncertainty, and increase flexibility. In OMB's report to Congress on the costs and benefits to Federal regulation (the “Thompson Report”), one of the nominated reforms meriting priority consideration by EPA was to grant some form of reporting relief for certain releases of NO X to air. As a result, on October 4, 2005, EPA published a proposed rule ( *see* 70 FR 57813) that provided notice of, and requested comments, including any relevant data, on a proposed new administrative reporting exemption from certain notification requirements under CERCLA and EPCRA. The Agency also sought public comment on human health risk assessment data or other relevant data that related to the proposal. The proposed administrative reporting exemption pertained to releases of less than 1,000 pounds of nitrogen oxide and nitrogen dioxide (or collectively referred to as “NO X ” for the proposed rule) to the air in 24 hours that is the result of combustion activities, unless such release is the result of an accident or malfunction. The proposed rule included a requirement that notifications must still be made for accidents or malfunctions that result in the releases of NO X at the final RQ of 10 pounds or more per 24 hours. The Agency also sought comment on two other options to address the high frequency of release notifications. Those options involved more efficient use of Continuous Release reporting and a complete exemption from the notification requirements under CERCLA and EPCRA. Twenty-seven comment letters, totaling more than 150 pages, were received on the proposed rule. Of the 27 comment letters, 14 were received from trade organizations, five from power corporations, five from chemical companies, two from organizations representing chemical companies, and one from a not-for-profit organization. This final rule was developed following careful consideration of all issues and concerns raised in public comments. Upon the effective date of this final rule, the Agency is withdrawing the existing enforcement discretion policy, described above, for failure to report air releases of NO and NO 2 that would otherwise trigger a reporting obligation under CERCLA section 103 and EPCRA section 304. C. Which NO and NO 2 Releases Are Administratively Exempt From the Reporting Requirements? In this final rule, releases of NO to the air that are the result of combustion and combustion-related activities that are less than 1,000 pounds per 24 hours, and releases of NO 2 to the air that are the result of combustion and combustion-related activities that are less than 1,000 pounds per 24 hours, are administratively exempt from the reporting requirements of CERCLA and EPCRA, established in 40 CFR 302.6 and 40 CFR 355.40, respectively. Some examples of combustion-related activities that are intended to be included in this exemption are emissions from blasting or detonation at construction or mining sites and those NO X emissions from nitric acid plants. The existing RQ for both NO and NO 2 is 10 pounds in any 24 hour period. This RQ is easily met by those facilities that release NO X 5 to the air. This is especially true when the facility processes include combustion and combustion-related activities. For example, an 80 million BTU/hr natural gas boiler will exceed the RQ for NO X after 2.5 hours of operation. A 120 million BTU/hr coal boiler will exceed the RQ for NO 2 in less than 3 hours of operation and the RQ for NO in less than 2 hours of operation. Small engines also trigger the 10 pound threshold—an 18 horsepower engine running 24 hours will exceed the RQ for NO X and a 100 horsepower engine will exceed the RQ for NO X in five hours. Even turning on bakery ovens could trigger the RQ for NO X when turned on for daily operations. 6 5 For shorthand purposes only, we use the convention NO X to refer to both NO and NO 2 either collectively or as individual hazardous substances. However, where regulatory clarity is needed, we will specifically refer to each hazardous substance. 6 These examples were submitted to the Agency during the comment period for the *Guidance on the CERCLA Section 101(10)(H) Federally Permitted Release Definition for Certain Air Emissions* ( *see* 67 FR 18899, April 17, 2002) discussed further in the Background section of this preamble. A sample of the letters received related to NO X and its 10 pound RQ are provided in the Docket for today's final rule (SFUND-2003-0022). All of the letters received pursuant to the Guidance can be found in that Docket (GE-G-1999-029). The exemptions apply only to CERCLA section 103 and EPCRA section 304 reporting requirements and do not apply to the related response and liability provisions. EPA is promulgating the administrative reporting exemption at 1,000 pounds for 24-hours, based on our review of the comments, for three principal reasons. First, the 1,000 pound level represents a 100-fold increase from the regulatory RQ of 10-pounds. This level was one of three (100, 1000, and 5000 pounds) levels suggested by two organizations representing regulated industries 7 as a level for the Agency to raise the RQ for NO and NO 2 . Second, the Agency sought public comment on human health risk assessment data or other relevant data that related to its proposed rule, including an alternative for a complete exemption from the notification requirements under CERCLA and EPCRA. Although the Agency received considerable comment, including two specific examples generated from a USEPA screening model that support the desire to

(1)raise the administrative exemption to 5,000 pounds or higher or

(2)completely exempt NO and NO 2 from CERCLA and EPCRA reporting requirements, the Agency did not receive risk assessment data that would support a different level for the administrative reporting exemption. The Agency also did not receive any human health risk assessment data that would oppose the administrative reporting exemption at the proposed level. Third, EPA believes that a CERCLA response to the release otherwise reportable would be very unlikely and possibly infeasible or inappropriate, because

(1)the releases are generally at levels below those that are regulated under the Clean Air Act (CAA), and

(2)the Agency has generally not responded to such releases. As a result, the administrative reporting exemptions are intended to allow EPA to focus its resources on the more serious releases and to protect public health and welfare and the environment more effectively and efficiently. At the same time, the exemptions will significantly eliminate unnecessary reporting burdens on persons-in-charge of facilities and vessels that release NO X during combustion and combustion-related activities. 7 The organizations were the National Association of Manufacturers

(NAM)and the American Chemistry Council (ACC). The ACC also provided comment to the proposed rule. D. What Are the Changes From the Proposed Rule? In response to comments, EPA has made one change and clarified a few of the provisions included in the October 4, 2005, proposed rule. Specifically, EPA decided to remove the qualifier to the exemption for releases that are the “result of accidents and malfunctions.” As discussed in more detail in Sections II. D.1-3 of this preamble, information submitted by public commenters and assembled by the Agency in response to comments are sufficient to support a finding that the qualifier adds unnecessary confusion that may lead to additional burden and unnecessary reporting. This final rule includes a better explanation as to what is covered under combustion, and clarifies that combustion-related activities (where they cannot be realistically separated) are included within the administrative reporting exemption and that NO X represents NO and NO 2 interchangeably. See Section II.E. and Section II.F.2, respectively. II. Response to Comments EPA's full response to public comments related to this rule are contained in “Responses to Comments on the October 4, 2005 Notice of Proposed Rulemaking on Administrative Reporting Exemptions for Certain Air Releases of NO X (NO and NO 2 )” (Responses to Comments), which is available for inspection at the location described in ADDRESSES , above. The following sections provide a summary of the major public comments and EPA's responses. A. Support for Proposed Reporting Exemptions All of the 27 comment letters submitted on the October 4, 2005 proposed rule supported to some extent the Agency's effort to reduce reporting burden for releases of NO and NO 2 (NO X ). Of those, 10 specifically supported the proposed administrative reporting exemption at 1,000 pounds. B. Support for Expanding Continuous Release Reporting in Addition to Proposed Exemption Seven commenters supported this alternative that would expand continuous release reporting to require that NO X release notifications be covered under the continuous release reporting scheme. However, those who supported this alternative generally believed that it should be in addition to rather than instead of the administrative reporting exemption. On the other hand, four commenters opposed this alternative primarily because it would be in lieu of the proposed exemption, and would not afford practicable relief. 1. Simplify Continuous Release Initial Release Notification While commenters both supported and opposed the use of the continuous release reporting mechanism, they all expressed the same concern—that is, the Agency would promulgate the continuous release reporting mechanism in place of the administrative reporting exemption. In this final rule, both the administrative reporting exemption and the continuous release reporting mechanism, as discussed below, can be used to reduce burden. For those commenters who expressed support for simplifying the continuous release initial release notifications, they argued that EPA must broaden its concepts of “continuous” and “stable in quantity and rate” so as to encompass startup and shutdown operations. EPA believes that in certain instances startup and shutdown operations may meet the definitions of *continuous and stable in quantity and rate* . The definition of *continuous* under 40 CFR 302.8 says that, “a continuous release is a release that occurs without interruption or abatement or that is routine, anticipated, and intermittent and incidental to normal operations or treatment processes.” The definition of *stable in quantity and rate* under 40 CFR 302.8 says that, “a release that is stable in quantity and rate is a release that is predictable and regular in amount and rate of emission.” The regulation puts the burden on the person in charge of a facility or vessel to establish a sound basis for qualifying the release for continuous release reporting (see 40 CFR 302.8(d)) and allows that establishment to be made using release data, engineering estimates, knowledge of operating procedures, best professional judgment, or reporting to the NRC for a period sufficient to establish the continuity and stability of the release. Therefore, we believe that the existing rules already provide, in certain instances, for the use of continuous release reporting. To the extent that EPA believes it appropriate to broaden the definition of “continuous” and “stable in quantity and rate,” we believe such revision should apply more broadly to all hazardous substances and extremely hazardous substances and would require further rulemaking. 2. Clarify Continuous Release Reporting Requirements One of the commenters requested that EPA clarify that the exemption also applies to continuous release reporting requirements. The Agency agrees that the administrative reporting exemption for releases of NO and NO 2 would also apply to continuous releases. C. Support To Increase Level of the Exemption Eighteen commenters supported this alternative to increase the level of the exemption. In general, five of those commenters supported some number larger than 1,000 pounds, ten commenters supported increasing the combustion-related exemption to 5,000 pounds, and three commenters supported eliminating the 1,000 pound reporting threshold altogether for all combustion-related releases. 1. Support a Number Larger than 1,000 Pounds Some of the commenters who supported a number larger than 1,000 pounds also proposed another level. One commenter suggested increasing the exemption to a 1,500 pound level arguing that those releases would also be below the 250 tons per year

(TPY)that EPA cites in the NPRM. EPA has adopted the RQ levels of 1, 10, 100, 1000, and 5000 pounds originally established pursuant to CWA section 311 (see 40 CFR Part 117). The Agency adopted the CWA five-level system primarily because

(1)it has been successfully used pursuant to the CWA,

(2)the regulated community is already familiar with these five levels, and

(3)it provides a relatively high degree of discrimination among the potential hazards posed by different CERCLA hazardous substances. ( See 50 FR 13456, 13465, April 4, 1985.) Therefore, the Agency has decided not to promulgate an administrative reporting exemption level that is inconsistent with its long-established RQ levels. One commenter suggested that EPA identify additional sources of NO X emissions to further reduce the notification burden. At this time, EPA is not considering extending the administrative reporting exemption to specific sources. However, EPA wishes to clarify that the release of NO X during the activity of explosive detonation associated with blasting of hard rock in quarries is, for the purposes of this final rule, a release of NO X that is the result of combustion and thus, eligible for the administrative reporting exemption promulgated today. 2. Increase RQ for Combustion-Related Exemption to 5,000 Pounds One of the commenters who supported increasing the combustion-related exemption to 5,000 pounds also believes that EPA should change the basic reportable quantity from 10 pounds. EPA disagrees. Changing the basic reportable quantity

(RQ)from 10 pounds to a “reasonable” figure, which the commenter considers to be 5,000 pounds, would be contrary to EPA's long established principle of maintaining one RQ that applies to all media. The RQ for NO and NO 2 was adjusted in the final rule published April 4, 1985. (See 50 FR 13456.) The RQ for both hazardous substances was adjusted from their statutory RQ to the current 10 pound RQ for each. 3. Raise or Eliminate the 1,000 Pound Reporting Threshold for all Combustion-Related Releases Three commenters expressly supported eliminating the 1,000 pound reporting threshold for all combustion-related releases. While the Agency acknowledges the commenters' position, we did not receive adequate information (for example, human health and ecological risk assessment) to support extending the administrative reporting exemption beyond the proposed 1,000 pound level. One commenter 8 used a USEPA air dispersion model to illustrate the impact of an incremental 5,000 pounds of emissions from actual boiler and gas turbine operations to support the position that the administrative reporting exemption should be raised to 5,000 pounds. The commenter provided two examples of NO 2 emissions (NO quickly reacts to NO 2 after release from a combustion stack) and the resulting hourly concentrations (micrograms/meter 3 ) that illustrate concentration levels that are much less than the California acute reference exposure level

(REL)for NO 2 . 9 EPA does not consider the risk information addressing these two examples to be sufficient for the requested human health and ecological risk assessments because,

(1)commenters were informed in the proposed rule where to obtain guidance on conducting human health and ecological risk assessments, 10 including addressing all current complete site-specific exposure pathways for all affected media, future land use potential, potential exposure pathways, and toxicity information and

(2)the example emission scenarios are too narrow given the broader potential release scenarios that this administrative reporting exemption is seeking to include. In addition, releases of NO X to the environment cause a wide variety of health and environmental impacts that is not addressed by the California REL. For example, ground-level ozone is formed when NO X and volatile organic compounds

(VOCs)react in the presence of sunlight; acid rain is formed when NO X and sulfur dioxide react with other substances in the air to form acids; and NO X reacts readily with common organic compounds to form a wide variety of toxic products. Therefore, the Agency believes that the information provided, while informative, is not sufficient to further increase the administrative reporting exemption. 8 This commenter's position was endorsed and supported by reference in several other comment letters. 9 The NO 2 REL of 470 micrograms per cubic meter is a one-hour risk-based number based on respiratory/asthma problems. 10 *See* , 70 FR 57819, October 4, 2005. Guidance can be found at: *http://www.epa.gov/oswer/riskassessment/superfund_toxicity.htm.* D. Request That the Administrative Reporting Exemption Not Include the Qualifier “Accidents and Malfunctions” Twenty-five commenters requested that the administrative reporting exemption not include the qualifier for “accidents and malfunctions.” Of those 25 commenters, 16 commented specifically on accidents and malfunctions, three commenters requested that EPA also include start-ups, shut-downs, and up-sets, and five sought clarification that flares are control devices and therefore not considered the result of accidents and malfunctions. 1. Accidents and Malfunctions The Agency received considerable support for either extending the administrative reporting exemption to releases resulting from accidents and malfunctions or limiting the scope of the administrative reporting exemption to combustion devices (eliminating the need to identify accidents and malfunctions), or both. Several commenters were correct in pointing out that no NO X releases from combustion devices—including many related to accidents and malfunctions-has required any Federal response. In fact, the NO X release notifications that have required response actions have only been in the category of releases not related to combustion devices, such as in situations where NO X was released incidental to the actual reason for the response ( *i.e.* , fires and explosions). Some commenters argued that the “accidents and malfunctions” qualifier would result in minimal burden reduction, if not an increase in burden. The historical data that the Agency used to predict future releases is populated with release information that was not covered by the enforcement discretion in place since February 15, 2000, essentially releases that were due to “accidents and malfunctions.” If the administrative reporting exemption retains the “accident and malfunction” qualifier, then the Agency could receive notification of releases at 1,000 pounds and above that were not reported due to the enforcement discretion in addition to the notifications anticipated based on the historical notification data. This would be inconsistent with the intent of the rulemaking to offer burden reduction. CERCLA section 103 and EPCRA section 304 notification requirements require the person in charge of the facility or vessel that released the hazardous substance to make the notification to Federal, State, and local authorities. Neither statute nor their implementing regulations differentiate the cause of the release (i.e., whether the release was the result of an accident or malfunction). EPA agrees with the commenters that to require a separate assessment as to whether the release was the result of an accident or malfunction, particularly with respect to releases that result from combustion, may be overly burdensome and not consistent with the intention of either statute, nor the Agency's goal of reducing burden. If a response is not necessary for a release of NO X from a facility due to normal operations, that assessment should apply even if an accident or malfunction somehow generated the release. EPA also agrees that, particularly with respect to certain combustion activities, it may be a challenge, if not impossible, to determine whether the combustion activities were caused by an accident or malfunction. Thus, protective, over-reporting could result. A few of the commenters pointed out that EPA has not defined the terms, “accident” and “malfunction” and insist that EPA will need to ensure that any interpretation of what is considered within an “accident” or “malfunction” event is consistent with interpretations in other EPA programs (e.g., air permitting). EPA agrees that inconsistency with other EPA programs has the potential to create unnecessary confusion. Therefore, the definition and interpretation of those terms should remain within the EPA programs where they have a direct regulatory application. The Agency is also not providing a definition of “excess emissions” because it is no longer necessary without the “accident and malfunction” qualifier. Therefore, EPA will not include the qualifier, “unless such release is the result of an accident or malfunction” to the administrative reporting exemption for releases of NO or NO 2 , or both, to air that are the result of combustion or combustion-related activities. 2. Also Include in Exemptions—Start-ups, Shut-downs, and Up-sets Three commenters requested that the Agency expand the exemption to include additional emissions from combustion sources, such as start-ups, shut-downs, and upsets. For the reasons described in Section II.D.1 above, EPA will not include the qualifier, “unless such release is the result of an accident or malfunction” to the administrative reporting exemption for releases of NO or NO 2 , or both, to air that are the result of combustion or combustion-related activities. To the extent that start-up, shut-down, and up-sets are part of a combustion or combustion-related activity, they are eligible for the administrative reporting exemption, provided such releases are below the 1,000 pound level per 24-hours. 3. Clarify That Flares Are Control Devices—Not Considered Accidents and Malfunctions Five commenters requested that the Agency clarify that flares are control devices and not considered the result of an accident or malfunction. For the reasons described in Section II.D.1 above, EPA will not include the qualifier, “unless such release is the result of an accident or malfunction” to the administrative reporting exemption for releases of NO or NO 2 , or both, to air that are the result of combustion or combustion-related activities. To the extent that flaring is combustion or a combustion-related activity, it is considered within this administrative reporting exemption, provided such releases are below the 1,000 pound level per 24-hours. E. Requests That the Administrative Reporting Exemption Include Combustion and Non-Combustion Processes The Agency received three requests to expand the exemption to include combustion processes that also include non-combustion activities and non-combustion processes. One of those comments specifically identified NO X emissions from nitric acid plants during the production of fertilizer. The commenter described the process of NO X emissions from nitric acid plants. The process begins with mixing ammonia with air that is combusted across a platinum/rhodium catalyst creating a hot NO X gas, primarily NO. The hot NO X gas is cooled through a series of heat exchangers and most of the NO reacts with the excess oxygen to form NO 2 . The NO X gas is then introduced into an absorber, where it interacts with a weak nitric acid solution and fresh water, resulting in a series of over 38 chemical reactions. Generally, NO 2 is absorbed into the aqueous phase and nitric acid is formed. As a result, however, NO and a much smaller fraction of the NO 2 are released back into the gas phase. Since NO is produced in each reaction that makes nitric acid, extra air is introduced into the absorber to convert the NO back to NO 2 . The NO 2 is reabsorbed and the cycle repeats itself. Since NO does not appreciably absorb into the aqueous phase, some NO ultimately exits the top of the column. A smaller fraction of NO 2 also exits the column due to the kinetics and equilibrium of the reactions. The gas exiting the absorption column is called tail gas. At this point, most of the gas is again NO. The tail gas is heated and directed through an air pollution control device to control NO X emissions to the atmosphere. The hot, pressurized tail gas is then sent through an expander to generate power for the air compressor, and finally exits out the stack. The NO and NO 2 , or NO X released from nitric acid plants is *originally* *formed as a product of NH* 3 *combustion.* However, nitric acid plants also produce NO X from N 2 O 4 in an aqueous reaction. Because it is impossible to determine which NO X emissions result from combustion as opposed to non-combustion processes, all NO X emissions from nitric acid plants qualify for this NO and NO 2 administrative reporting exemption because all NO and NO 2 released from nitric acid plants originates from combustion activities. Similarly, where nitric acid is used in the Adipic Acid manufacturing process, there may be releases of NO X from control devices in an upstream process. To the extent that those control devices are functioning properly and operate as combustion devices, the resulting NO and NO 2 emissions would be covered under this administrative reporting exemption. Releases of NO and NO 2 from storage tanks are not intended to be administratively exempt from CERCLA and EPCRA notification requirements because there is a higher likelihood that there would be a response to such a release scenario. F. Interpretation of CERCLA Provisions Nine commenters provided comment on the interpretation of certain CERCLA provisions. 1. Proposed Exemption Only Applies to Emissions Not Considered Federally Permitted One commenter requested that EPA clarify that Federally permitted releases are already exempt from reporting under CERCLA section 101(10)(H) and that the 1,000 pound limit applies only to emissions that are not considered Federally permitted releases. We agree with the commenter that the administrative reporting exemption described in this rule applies to those releases that are not otherwise covered by CERCLA or EPCRA exemptions, including those covered by Federal permits defined under CERCLA section 101(10)(H). 2. Clarify that NO X Represents NO and NO 2 Interchangeably One commenter recommended that EPA clarify in the rule that the terms NO and NO 2 are interchangeable with the term NO X . Nitrogen oxide

(NO)is a CERCLA hazardous substance with an RQ of 10 pounds per 24 hours. Nitrogen dioxide (NO 2 ) is also a CERCLA hazardous substance with an RQ of 10 pounds per 24 hours. During combustion and combustion-related activities, NO will quickly form NO 2 . The term NO X was used in the proposed rule and this final rule as short-hand for NO and NO 2 . For the purpose of reporting, and the administrative reporting exemption, NO and NO 2 are and continue to be treated as individual hazardous substances. This final rule clarifies that point. G. Issues Related to Rulemaking Procedure One commenter requested that EPA conform the preamble to the rules actually proposed to make clear that the administrative reporting exemption affords a 1,000 pound exemption to nitrogen oxide and another 1,000 pound exemption to nitrogen dioxide. The commenter is correct that the administrative reporting exemption affords a 1,000 pound exemption to nitrogen oxide and another 1,000 pound exemption to nitrogen dioxide. The preamble to this final rule has clarified this point. III. Regulatory Analysis A. Executive Order 12866: Regulatory Planning and Review Under Executive Order

(EO)12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory action.” It has been determined that this rule is a “significant regulatory action” because it raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Accordingly, EPA submitted this action to the Office of Management and Budget

(OMB)for review under EPA 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action. OMB had no comments on this action. B. Paperwork Reduction Act This action does not impose any new information collection burden. This rule represents a reduction in the burden for both industry and the government by administratively exempting the notification requirements for releases of less than 1,000 pounds of NO to the air in 24-hours and less than 1,000 pounds of NO 2 to the air in 24-hours that are the result of combustion and combustion-related activities. However, the Office of Management and Budget

(OMB)has previously approved the information collection requirements contained in the existing regulations 40 CFR 302 and 40 CFR 355 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2050-0046, EPA ICR number 1049.10 and OMB control number 2050-0086, EPA ICR number 1445.06. A copy of the OMB approved Information Collection Requests

(ICRs)may be obtained from Susan Auby, Collection Strategies Division; U.S. Environmental Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling

(202)566-1672. The proposed rule estimated that the annual reporting and recordkeeping burdens associated with the information collected for the episodic release of oil and all hazardous substances (1049.10) to be reduced by approximately 5,449 hours. This represented a reduction in the likely number of respondents from 24,082 to 22,753 a reduction of 1,329 reportable releases. For the purpose of this burden analysis, each reportable episodic release equals one respondent. With respect to the information collected for the continuous release reporting regulation (1445.06) for all hazardous substances, the Agency estimated a reduction of 869 hours, a reduction in the likely number of respondents from 3,145 to 3,009, a reduction of 136 respondents. These estimates remain the same for this final rule. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations is in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act

(RFA)generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedures Act or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as:

(1)A small business as defined by the Small Business Administration's

(SBA)regulations at 13 CFR 121.201;

(2)a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and

(3)a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field. After considering the economic impacts of this final rule on small entities, I hereby certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on small entities subject to the rule. This rulemaking will relieve regulatory burden because we propose to eliminate the reporting requirement for certain releases of NO X to the air. We expect the net reporting and recordkeeping burden associated with reporting releases of NO X under CERCLA section 103 and EPCRA section 304 to decrease. This reduction in burden will be realized mostly by small businesses because larger businesses usually operate under Federal permits and therefore qualify for the “Federally permitted release” exemption for reporting under CERCLA. 40 CFR 302.6. We have therefore concluded that this final rule will relieve regulatory burden for all affected small entities. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, or tribal governments or the private sector. The rule imposes no enforceable duty on any State, local or tribal governments or the private sector; promulgation of this rule will result in a burden reduction in the receipt of notifications of the release of NO X . EPA has determined that this rule does not include a Federal mandate that may result in expenditures of $100 million or more for State, local, or tribal governments, in the aggregate, or the private sector in any one year. This is because this final rule imposes no enforceable duty on any State, local, or tribal governments. EPA also has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. In addition, as discussed above, the private sector is not expected to incur costs exceeding $100 million. Thus, this final rule is not subject to the requirements of Sections 202 and 205 of UMRA. E. Executive Order 13132: Federalism Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications.” “Policies that have Federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule does not have Federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. There are no State and local government bodies that incur direct compliance costs by this rulemaking. Thus, Executive Order 13132 does not apply to this rule. In the spirit of Executive Order 13132 and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicited comment on the proposed rule from State and local officials. No States or local governments commented on the proposed rule. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This final rule does not have tribal implications, as specified in Executive Order 13175. This rule does not significantly or uniquely affect the communities of Indian tribal governments, nor would it impose substantial direct compliance costs on them. Thus, Executive Order 13175 does not apply to this rule. G. Executive Order 13045: Protection of Children From Environmental Risks and Safety Risks The Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997) applies to any rule that:

(1)Is determined “economically significant” as defined under Executive Order 12866, and

(2)concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA has determined that the final rule is not subject to Executive Order 13045 because it is not an “economically significant” rule as defined by Executive Order 12866. EPA also expects the rule does not have a disproportionate effect on children's health. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution or Use This final rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)) because it is not a significant regulatory action under Executive Order 12866. I. National Technology Transfer and Advancement Act of 1995 Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( *e.g.* , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This final rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards J. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, that 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). This rule will be effective 30 days after it is published in the **Federal Register** . List of Subjects 40 CFR Part 302 Environmental protection, Air pollution control, Chemicals, Hazardous substances, Hazardous wastes, Intergovernmental relations, Natural resources, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply. 40 CFR Part 355 Air pollution control, Chemicals, Disaster assistance, Hazardous substances, Hazardous waste, Intergovernmental relations, Natural resources, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply. Dated: September 28, 2006. Stephen L. Johnson, Administrator. For the reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is amended as follows: PART 302—DESIGNATION, REPORTABLE QUANTITIES, AND NOTIFICATION 1. The authority citation for part 302 continues to read as follows: Authority: 42 U.S.C. 9602, 9603, 9604; 33 U.S.C. 1321 and 1361. 2. Section 302.6 is amended by adding paragraph

(e)to read as follows: § 302.6 Notification requirements.

(e)The following releases are exempt from the notification requirements of this section:

(1)Releases in amounts less than 1,000 pounds per 24 hours of nitrogen oxide to the air which are the result of combustion and combustion-related activities.

(2)Releases in amounts less than 1,000 pounds per 24 hours of nitrogen dioxide to the air which are the result of combustion and combustion-related activities. PART 355—EMERGENCY PLANNING AND NOTIFICATION 3. The authority citation for part 355 continues to read as follows: Authority: 42 U.S.C. 11002, 11004, and 11048. 4. Section 355.40 is amended by adding paragraph (a)(2)(vii) to read as follows: § 355.40 Emergency release notification.

(a)* * *

(1)* * *

(2)* * *

(vii)Any release in amounts less than 1,000 pounds per 24 hours of:

(A)Nitrogen oxide

(NO)to the air that is the result of combustion and combustion-related activities.

(B)Nitrogen dioxide (NO 2 ) to the air that is the result of combustion and combustion-related activities. [FR Doc. E6-16379 Filed 10-3-06; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Administration for Children and Families 45 CFR Part 1310 RIN 0970-AC26 Head Start Program AGENCY: Administration for Children and Families (ACF), DHHS. ACTION: Final rule. SUMMARY: This rule finalizes the provisions of the proposed rule published on May 30, 2006 and responds to public comments received as a result of the proposed rule. This final rule authorizes approval of annual waivers, under certain circumstances, from two provisions in the current Head Start transportation regulation (45 CFR part 1310): the requirement that each child be seated in a child restraint system while the vehicle is in motion, and the requirement that each bus have at least one bus monitor on board at all times. Waivers would be granted when the Head Start or Early Head Start grantee demonstrates that compliance with the requirement(s) for which the waiver is being sought will result in a significant disruption to the Head Start program or the Early Head Start program and that waiving the requirement(s) is in the best interest of the children involved. The rule also revises the definition of child restraint system in the regulation to remove the reference to weight which now conflicts with Federal Motor Vehicle Safety Standards. The regulation also reflects new effective dates for Sec. 1310.12(a) and 1310.22(a) on the required use of school buses or allowable alternate vehicles and the required availability of such vehicles adapted for use of children with disabilities, as the result of enactment of Section 224 of Public Law 109-149 and Section 7012 of Public Law 109-234. DATES: These rules are effective November 3, 2006, except sections 1310.12(a) and 1310.22(a) will become effective on December 30, 2006. FOR FURTHER INFORMATION CONTACT: Office of Head Start,

(202)205-8572. Deaf and hearing impaired individuals may call the Federal Dual Party Relay Service at 1-800-877-8339 between 8 a.m. and 7 p.m. eastern time. SUPPLEMENTARY INFORMATION: On December 30, 2005, the President signed Public Law 109-149 that included in Section 223 a provision that authorizes the Secretary of Health and Human Services to waive the requirements of regulations promulgated under the Head Start Act (42 U.S.C. 9831 *et seq.* ) pertaining to child restraint systems or vehicle monitors if the Head Start or Early Head Start agency can demonstrate that compliance with such requirements will result in a significant disruption to the program and that waiving the requirement is in the best interest of the children involved. This waiver authority extends until September 30, 2006, or the date of the enactment of a statute that authorizes appropriations for fiscal year 2006 to carry out the Head Start Act, whichever date is earlier. These rules extend that limited waiver authority indefinitely. The rules also provide a definition of child restraint system in the Head Start regulations and codify in Head Start regulations the requirement for use of child restraint systems to reflect current National Highway Traffic Safety Administration (NHTSA) regulations with flexibility to address any future changes in the weight range covered by the NHTSA regulation. NHTSA is the agency responsible for issuing Federal Motor Vehicle Safety Standards. Finally, this rule removes provisions added to section 1310.11(b) and 1310.15(c) that are no longer necessary. Summary Description of Regulatory Provisions and Response to Comments Section 1310.2—Waiver Authority and Effective Dates The regulation provides that effective November 1, 2006, “good cause” for a waiver would exist when adherence to a requirement of the Head Start transportation regulation would create a safety hazard in the circumstances faced by the agency, or when compliance with requirements related to child restraint systems (Secs. 1310.11 and 1310.15(a)) or the use of bus monitors (Sec. 1310.15(c) would result in a significant disruption to the program and the grantee can demonstrate that waiving such requirements would be in the best interest of the children involved. We are using the November 1, 2006 effective date in recognition that the rule will not be effective until 30 days from the date of publication. In concert with this change, we also have added language under this section to ensure there is no gap in waivers between October 1, 2006 and November 1, 2006. That language provides that the responsible HHS official has authority to grant waivers related to child restraint systems or bus monitors that are retroactive to October 1, 2006, during the period from November 1, 2006 to October 30, 2007. The regulation also provides that the effective date of Sec. 1310.12(a) and 1310.22(a) is December 30, 2006, reflecting enactment of section 224 of Public Law 109-149, which provides Sec. 1310.12(a) of title 45 of the Code of Federal Regulations (October 1, 2004) shall not be effective until June 30, 2006, or 60 days after the date of the enactment of a statute that authorizes appropriations for fiscal year 2006 to carry out the Head Start Act, whichever date is earlier and subsequent enactment of Section 7021 of Public Law 109-234 extending this date to December 30, 2006. In the event that legislation authorizing appropriations for fiscal year 2006 to carry out the Head Start Act is enacted before November 1, 2006, a notice informing the public of the new effective date of Sections 1310.2(b)(1), 1310.12(a) and 1310.22(a) will be issued. Comment The majority of comments received support the proposed change to the waiver authority in the regulation. Concern over the potential loss of partnerships with school districts and loss of transportation services for Head Start children were cited. Over half expressed support for both bus monitor and child restraint system exceptions. Some letters also described circumstances related to one or the other of the two requirements. Two commenters suggested waivers be approved for a period exceeding one year. In addition, two Head Start agencies perceived the notice of proposed rulemaking as an opportunity to submit waiver requests. Three respondents indicated opposition to this change and instead suggested eliminating the requirements altogether so waivers would not be needed. One commenter opposed the change based on concern that Head Start will lose ground in providing safe transportation services for young children. A child restraint manufacturer described the availability of child restraint systems designed specifically for use in school buses and allowable alternate vehicles that have come on the market in recent years. One commenter expressed opposition based on concerns for safety, and another said that enough time had passed since the regulation was published that all Head Start programs should now achieve full compliance. Response The Administration for Children and Families

(ACF)agrees with the need to provide a mechanism to address the circumstances faced by individual agencies related to these issues. We maintain the view that the opportunity for annual authority is necessary in order to keep pace with changes in the industry and communities. Agencies should continuously seek opportunities to come into full compliance with support from the Head Start Technical Assistance system. In response to the concern that more agencies will request waivers, agencies will be required to justify their requests and to describe efforts toward achieving the goal of full compliance. ACF will publish guidance related to the circumstances under which requests will be approved. Except in extreme circumstances, those agencies who have previously achieved compliance will not receive waivers. Definition and Requirements for Use of Child Restraint Systems This rule also updates and modifies the definition and requirements for use of child restraint systems. Under Sec. 1310.3, child restraint systems were defined as any device designed to restrain, seat, or position children who weigh 50 pounds or less which meets the requirements of Federal Motor Vehicle Safety Standard No. 213, Child Restraint Systems, 49 CFR 571.213. NHTSA raised the weight threshold required for approved restraint systems and is considering raising it yet again. In addition, discussions with NHTSA indicate it would be advisable to include a formal reference to the exclusion of Type I lap belts for small children. Therefore, we have updated the definition by removing the weight requirement in order to stay current with FMVSS 49 CFR 571.213, and to exclude Type I lap belts as defined at 49 CFR 571.209. Comment One commenter expressed appreciation for the Agency's proposal to update the definition of child restraint system, but notes the improved definition will have no meaningful effect if the restraint requirements are waived. One Head Start grantee expressed dismay that funding is not available to purchase more child restraint systems for those children who will require these systems under the revised definition. Response We believe the improved definition will impact Head Start transportation services and therefore children positively. Agencies that may request and receive waiver approvals are the exception. With regard to funding, we wish to note that since publication of the NPRM a considerable amount of money has been made available to grantees to achieve compliance with the child restraint system and bus monitor requirements. Section 1310.15—Operation of Vehicles Section 1310.15(a) of the regulation provided that each agency providing transportation services must ensure that, “On a vehicle equipped for use of such devices, any child weighing 50 pounds or less is seated in a child restraint system appropriate to the height and weight of the child while the vehicle is in motion.” As discussed earlier, the definition of the child restraint system is being updated to reflect FMVSS standards. We have removed the poundage reference to include those few Head Start and Early Head Start children who are over 50 pounds in the requirement for the use of child restraint systems to coincide with the change in the definition. We also revised the language to clarify that the regulation applies only to Head Start and Early Head Start enrolled children. In coordinated transportation arrangements, questions have been raised regarding the applicability of this requirement to other children on the bus. Under the regulation, the language requires that any child enrolled in a Head Start or Early Head Start program is seated in a child restraint system appropriate to the child's height and weight while the vehicle is in motion. Comments related to the definition of child restraint systems are included above. No comments were received related to applicability of this requirement to other children on the bus. Paperwork Reduction Act This rulemaking contains information collection requirements in Sec. 1310.2. This summary includes the estimated costs and assumptions for the paperwork requirements related to this rule. These paperwork requirements have been approved by the Office of Management and Budget under number 0970-0260 as required by 44 U.S.C. 3507(a)(1)(c) of the Paperwork Reduction Act of 1995, as amended. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number. The Office of Head Start estimates that the rule would create 275 burden hours annually. Table 1 summarizes burden hours by grantee. We estimate 1 hour of paperwork burden for each Head Start grantee requesting a transportation waiver. The waiver request would include basic information to identify the grantee, the nature of the transportation services provided and the children affected and a justification for the waiver. We estimate receiving no more than 275 requests resulting in a total burden of 275 hours. Table 1.—Total Burden Hours of Rule [Summary of All Burden Hours, by Provision, for Grantees] Provision Annualized burden hours 1310.2 275 Total 275 Regulatory Flexibility Analysis The Secretary certifies, under 5 U.S.C. 605(b), and enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not result in a significant impact on a substantial number of small entities. The regulation provides flexibility and clarity in meeting the Head Start transportation requirements while ensuring child safety. Regulatory Impact Analysis Executive Order 12866 requires that regulations be revised to ensure that they are consistent with the priorities and principles set forth in the Executive Order. The Department has determined that this rule is consistent with these priorities and principles. Unfunded Mandates Reform Act Section 202 of the Unfunded Mandates Reform Act requires that a covered agency prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate 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 in any one year. The Department has determined that this rule would not impose a mandate that will result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of more than $100 million in any one year. Assessment of Federal Regulations and Policies on Families Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal agencies to determine whether a policy or regulation may affect family well being. If the agency's determination is affirmative, then the agency must prepare an impact assessment addressing seven criteria specified in the law. These regulations will not have an impact on family well being as defined in the legislation. Executive Order 13132 Executive Order 13132 on Federalism applies to policies that have Federalism implications, defined as “regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on the States, or on the distribution of powers and responsibilities among the various levels of government.” This rule does not have Federalism implications for State or local governments as defined in the Executive Order. List of Subjects in 45 CFR Part 1310 Head Start, Reporting and recordkeeping requirements, Transportation. (Catalog of Federal Domestic Assistance Program Number 93.600, Head Start) Wade F. Horn, Assistant Secretary for Children and Families. Michael O. Leavitt, Secretary of Health and Human Services. For the reasons discussed, title 45 CFR chapter XIII is amended as follows: PART 1310—HEAD START TRANSPORTATION 1. The authority citation for part 1310 continues to read as follows: Authority: 42 U.S.C. 9801 et seq. 2. Revise paragraphs

(b)and

(c)of § 1310.2 to read as follows: § 1310.2 Applicability. (b)(1) Sections 1310.12(a) and 1310.22(a) of this part are effective December 20, 2006.

(2)This paragraph and paragraph

(c)of this section, the definition of child restraint systems in Sec. 1310.3 of this part, and Sec. 1310.15(a) are effective November 1, 2006. Sections 1310.11 and 1310.15(c) of this part are effective June 21, 2004. Section 1310.12(b) of this part is effective February 20, 2001. All other provisions of this part are effective January 18, 2002.

(c)Effective November 1, 2006, an agency may request a waiver of specific requirements of this part, except for the requirements of this paragraph. Requests for waivers must be made in writing to the responsible Health and Human Services

(HHS)official, as part of an agency's annual application for financial assistance or amendment thereto, based on good cause. “Good cause” for a waiver will exist when adherence to a requirement of this part would itself create a safety hazard in the circumstances faced by the agency, or when compliance with requirements related to child restraint systems (Secs. 1310.11, 1310.15(a)) or bus monitors (Sec. 1310.15(c)) will result in a significant disruption to the program and the agency demonstrates that waiving such requirements is in the best interest of the children involved. In addition, the responsible HHS official shall have the authority to grant waivers of the requirements related to child restraint systems (Sec. 1310.11, 1310.15(a)) or bus monitors (Sec. 1310.15(c)) that are retroactive to October 1, 2006 during the period from November 1, 2006 to October 30, 2007. The responsible HHS official is not authorized to waive any requirements of the Federal Motor Vehicle Safety Standards (FMVSS) made applicable to any class of vehicle under 49 CFR part 571. The responsible HHS official shall have the right to require such documentation as the official deems necessary in support of a request for a waiver. Approvals of waiver requests must be in writing, be signed by the responsible HHS official, and be based on good cause. 2. Revise the definition of Child Restraint System in § 1310.3 to read as follows: § 310.3 Definitions. *Child Restraint System* means any device designed to restrain, seat, or position children that meets the current requirements of Federal Motor Vehicle Safety Standard No. 213, Child Restraint Systems, 49 CFR 571.213, for children in the weight category established under the regulation, or any device designed to restrain, seat, or position children, other than a Type I seat belt as defined at 49 CFR 571.209, for children not in the weight category currently established by 49 CFR 571.213. § 1310.11 [Amended] 3. In § 1310.11, remove and reserve paragraph (b). § 1310.12 [Amended] 4. In § 1310.12, amend paragraph

(a)by removing “January 18, 2006” and adding “December 30, 2006” in its place. 5. Revise § 1310.15(a) and

(c)to read as follows: § 1310.15 Operation of vehicles.

(a)Effective October 1, 2006, on a vehicle equipped for use of such devices, any child enrolled in a Head Start or Early Head Start program is seated in a child restraint system appropriate to the child's height and weight while the vehicle is in motion.

(b)* * *

(c)Effective June 21, 2004, there is at least one bus monitor on board at all times, with additional bus monitors provided as necessary, such as when needed to accommodate the needs of children with disabilities. As provided in 45 CFR 1310.2(a), this paragraph does not apply to transportation services to children served under the home-based option for Head Start and Early Head Start. § 1310.22 [Amended] 6. In § 1310.22, amend paragraph

(a)by removing “January 18, 2006” and adding “December 30, 2006” in its place. [FR Doc. E6-16488 Filed 10-3-06; 8:45 am] BILLING CODE 4184-01-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 205 and 225 RIN 0750-AF33 Defense Federal Acquisition Regulation Supplement; Berry Amendment Notification Requirement (DFARS Case 2006-D006) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 833(a) of the National Defense Authorization Act for Fiscal Year 2006. Section 833(a) requires the posting of a notice on the FedBizOps Internet site, when certain exceptions to domestic source requirements apply to an acquisition. DATES: *Effective Date:* October 4, 2006. *Comment date:* Comments on the interim rule should be submitted in writing to the address shown below on or before December 4, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D006, using any of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. • *E-mail: dfars@osd.mil.* Include DFARS Case 2006-D006 in the subject line of the message. • *Fax:*

(703)602-0350. • *Mail:* Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • *Hand Delivery/Courier:* Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov* , including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams,

(703)602-0328. SUPPLEMENTARY INFORMATION: A. Background This interim rule adds DFARS policy to implement Section 833(a) of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163). Section 833(a) amended 10 U.S.C. 2533a to add a requirement for the posting of a notice on the FedBizOps Internet site, within 7 days after award of a contract exceeding the simplified acquisition threshold, for the acquisition of

(1)certain clothing, fiber, yarn, or fabric items, when DoD has determined that adequate domestic items are not available; or

(2)chemical warfare protective clothing, when an exception to domestic source requirements applies because the acquisition furthers an agreement with a qualifying country. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule relates to a notification requirement that is performed by the Government. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D006. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* D. Determination to Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 833(a) of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163). Section 833(a) requires DoD to post a notice on the FedBizOps Internet site, within 7 days after award of a contract exceeding the simplified acquisition threshold, when DoD has applied one of certain exceptions to domestic source requirements with respect to the contract. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Parts 205 and 225 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR parts 205 and 225 are amended as follows: 1. The authority citation for 48 CFR parts 205 and 225 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 205—PUBLICIZING CONTRACT ACTIONS 2. Section 205.301 is added to read as follows: 205.301 General. (a)(S-70) *Synopsis of exceptions to domestic source requirements.*

(i)In accordance with 10 U.S.C. 2533a(k), contracting officers also must synopsize through the GPE, awards exceeding the simplified acquisition threshold that are for the acquisition of any clothing, fiber, yarn, or fabric items described in 225.7002-1(a)(2) through (10), if—

(A)The Secretary concerned has determined that domestic items are not available, in accordance with 225.7002-2(b); or

(B)The acquisition is for chemical warfare protective clothing, and the contracting officer has determined that an exception to domestic source requirements applies because the acquisition furthers an agreement with a qualifying country, in accordance with 225.7002-2(p).

(ii)The synopsis must be submitted in sufficient time to permit its publication not later than 7 days after contract award.

(iii)In addition to the information otherwise required in a synopsis of contract award, the synopsis must include one of the following statements as applicable:

(A)“The exception at DFARS 225.7002-2(b) applies to this acquisition, because the Secretary concerned has determined that items grown, reprocessed, reused, or produced in the United States cannot be acquired as and when needed in satisfactory quality and sufficient quantity at U.S. market prices.”

(B)“The exception at DFARS 225.7002-2(p) applies to this acquisition, because the contracting officer has determined that this acquisition of chemical warfare protective clothing furthers an agreement with a qualifying country identified in DFARS 225.872.” PART 225—FOREIGN ACQUISITION 3. Section 225.7002-1 is amended in the introductory text by revising the first sentence to read as follows: 225.7002-1 Restrictions. The following restrictions implement 10 U.S.C. 2533a (the “Berry Amendment”). * * * 4. Section 225.7002-2 is amended by revising paragraphs

(b)and

(n)and by adding paragraph

(p)to read as follows: 225.7002-2 Exceptions.

(b)Acquisitions of any of the items in 225.7002-1(a) or (b), if the Secretary concerned determines that items grown, reprocessed, reused, or produced in the United States cannot be acquired as and when needed in a satisfactory quality and sufficient quantity at U.S. market prices. (See the requirement in 205.301 for synopsis within 7 days after contract award when using this exception.)

(n)Acquisitions of specialty metals when the acquisition furthers an agreement with a qualifying country (see 225.872).

(p)Acquisitions of chemical warfare protective clothing when the acquisition furthers an agreement with a qualifying country. (See 225.872 and the requirement in 205.301 for synopsis within 7 days after contract award when using this exception.) [FR Doc. E6-16402 Filed 10-3-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 207, 216, and 225 Defense Federal Acquisition Regulation Supplement; Technical Amendments AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD is making technical amendments to the Defense Federal Acquisition Regulation Supplement (DFARS) to update reference numbers and correct typographical errors. DATES: *Effective Date:* October 4, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Michele Peterson, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone

(703)602-0311; facsimile

(703)602-0350. SUPPLEMENTARY INFORMATION: This final rule amends DFARS text as follows: • *Section 207.103.* Corrects typographical errors. • *Section 216.603-4.* Updates a cross-reference. • *Section 225.7013.* Updates a statutory reference. List of Subjects in 48 CFR Parts 207, 216, and 225 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR parts 207, 216, and 225 are amended as follows: 1. The authority citation for 48 CFR parts 207, 216, and 225 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 207—ACQUISITION PLANNING 207.103 [Amended] 2. Section 207.103 is amended as follows: a. In paragraph

(h)introductory text by removing “SCMA” and adding in its place “SMCA”; and b. In paragraph (h)(ii), in the second sentence, by removing “SCMA” and adding in its place “SMCA”. PART 216—TYPES OF CONTRACTS 216.603-4 [Amended] 3. Section 216.603-4 is amended in paragraph (b)(2) by removing “217.7406” and adding in its place “217.7405”. PART 225—FOREIGN ACQUISITION 4. Section 225.7013 is amended by revising the introductory text to read as follows: 225.7013 Restrictions on construction or repair of vessels in foreign shipyards. In accordance with 10 U.S.C. 7309 and 7310— [FR Doc. E6-16400 Filed 10-3-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212 and 234 RIN 0750-AF38 Defense Federal Acquisition Regulation Supplement; Acquisition of Major Weapon Systems as Commercial Items (DFARS Case 2006-D012) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 803 of the National Defense Authorization Act for Fiscal Year 2006. Section 803 places limitations on the acquisition of a major weapon system as a commercial item. DATES: *Effective date* : October 4, 2006. *Comment date:* Comments on the interim rule should be submitted in writing to the address shown below on or before December 4, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D012, using any of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the instructions for submitting comments. • *E-mail: dfars@osd.mil.* Include DFARS Case 2006-D012 in the subject line of the message. • *Fax:*

(703)602-0350. • *Mail:* Defense Acquisition Regulations System, Attn: Mr. Bill Sain, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • *Hand Delivery/Courier:* Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov* , including any personal information provided. FOR FURTHER INFORMATION CONTACT: Mr. Bill Sain,

(703)602-0293. SUPPLEMENTARY INFORMATION: A. Background This interim rule adds DFARS policy to implement Section 803 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163). Section 803 permits the treatment or acquisition of a major weapon system as a commercial item only if

(1)the Secretary of Defense determines that the major weapon system meets the definition of commercial item at 41 U.S.C. 403(12) and such treatment is necessary to meet national security objectives; and

(2)the congressional defense committees are notified at least 30 days before such treatment or acquisition occurs. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule relates to internal DoD considerations regarding the acquisition of major weapons systems. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D012. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. D. Determination To Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 803 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163), which requires that, before DoD may treat or acquire a major weapon system as a commercial item

(1)the Secretary of Defense must determine that the major weapon system meets the definition of commercial item at 41 U.S.C. 403(12) and that such treatment is necessary to meet national security objectives; and

(2)the congressional defense committees must be notified at least 30 days in advance. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Parts 212 and 234 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Parts 212 and 234 are amended as follows: 1. The authority citation for 48 CFR Parts 212 and 234 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 212—ACQUISITION OF COMMERCIAL ITEMS 2. Section 212.270 is added to read as follows: § 212.270 Major weapon systems as commercial items. The DoD policy for acquiring major weapon systems as commercial items is in Subpart 234.70. PART 234—MAJOR SYSTEM ACQUISITION 3. Subpart 234.70 is added to read as follows: Subpart 234.70—Acquisition of Major Weapon Systems as Commercial Items Sec. 234.7000 Scope of subpart. 234.7001 Definition. 234.7002 Policy. Subpart 234.70—Acquisition of Major Weapon Systems as Commercial Items § 234.7000 Scope of subpart. This subpart—

(a)Implements 10 U.S.C. 2379; and

(b)Requires a determination by the Secretary of Defense and a notification to Congress before acquiring a major weapon system as a commercial item. § 234.7001 Definition. *Major weapon system* , as used in this subpart, means a weapon system acquired pursuant to a major defense acquisition program, as defined in 10 U.S.C. 2430 to be a program that—

(1)Is not a highly sensitive classified program, as determined by the Secretary of Defense; and (2)(i) Is designated by the Secretary of Defense as a major defense acquisition program; or

(ii)Is estimated by the Secretary of Defense to require an eventual total expenditure for research, development, test, and evaluation of more than $300,000,000 (based on fiscal year 1990 constant dollars) or an eventual total expenditures for procurement of more than $1,800,000,000 (based on fiscal year 1990 constant dollars). § 234.7002 Policy.

(a)A DoD major weapon system may be treated as a commercial item, or acquired under procedures established for the acquisition of commercial items, only if—

(1)The Secretary of Defense determines that—

(i)The major weapon system is a commercial item as defined in FAR 2.101; and

(ii)Such treatment is necessary to meet national security objectives; and

(2)The congressional defense committees are notified at least 30 days before such treatment or acquisition occurs. Follow the procedures at PGI 234.7002.

(b)A subsystem or component of a major weapon system that meets the definition of a commercial item—

(1)Shall be acquired under the procedures established for the acquisition of commercial items (see FAR Part 12); and

(2)Is not subject to the requirements of paragraph

(a)of this section.

(c)The authority of the Secretary of Defense to make a determination under paragraph (a)(1) of this section may not be delegated below the level of Deputy Secretary of Defense. [FR Doc. E6-16398 Filed 10-3-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 225 RIN 0750-AF23 Defense Federal Acquisition Regulation Supplement; Buy American Act Exemption for Commercial Information Technology (DFARS Case 2005-D011) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement provisions of annual appropriations acts that authorize an exemption from the Buy American Act for the acquisition of commercial information technology. Dates: *Effective Date:* October 4, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone

(703)602-0328; facsimile

(703)602-0350. Please cite DFARS Case 2005-D011. SUPPLEMENTARY INFORMATION: A. Background Section 535 of Division F of the Consolidated Appropriations Act, 2004 (Pub. L. 108-199); Section 517 of Division H of the Consolidated Appropriations Act, 2005 (Pub. L. 108-447); and Section 717 of the Consolidated Appropriations Act, 2006 (Pub. L. 109-115) provide an exemption from the Buy American Act for the acquisition of information technology that is a commercial item. This final rule amends the acquisition procedures in DFARS Part 225 to reflect the exemption, which previously had been implemented through the issuance of annual DoD-wide class deviations. DoD published a proposed rule at 71 FR 18694 on April 12, 2006. Five sources submitted comments on the proposed rule. Three of the respondents supported the rule. A discussion of the other comments is provided below. 1. *Comment.* One respondent recommended that application of the Buy American Act restrictions to non-sensitive electrical and electronic products be reevaluated in the context of both the increasingly global economy and potential savings to the Government. *DoD Response.* Revision of the application of the Buy American Act to electrical/electronic products would require statutory change and, therefore, is outside the scope of this DFARS case. 2. *Comment.* One respondent requested that the rule clearly apply as an exemption to the Berry Amendment requirements of the clause at DFARS 252.225-7014, Preference for Domestic Specialty Metals, for commercial information technology. *DoD Response.* The appropriations act provisions contain authority only for an exemption from the Buy American Act (41 U.S.C. 10a-d). Therefore, DoD is unable to adopt this recommendation for an exemption from the Berry Amendment (10 U.S.C. 2533a). 3. *Comment.* One respondent disagreed with the rule, due to the security risk associated with foreign entities potentially gaining access to DoD information systems. *DoD Response.* The policy in the rule is required by statute. The appropriations act provisions state that the restrictions of the Buy American Act “shall not apply” to the acquisition of information technology that is a commercial item. This policy has been in effect since May 2004, through the issuance of annual DoD-wide class deviations. Security of information technology is addressed in DFARS Subpart 239.71, which requires agencies to ensure that information assurance is provided for information technology in accordance with current policies, procedures, and statutes, to include—

(1)The National Security Act;

(2)The Clinger-Cohen Act;

(3)National Security Telecommunications and Information Systems Security Policy No. 11;

(4)Federal Information Processing Standards;

(5)DoD Directive 8500.1, Information Assurance; and

(6)DoD Instruction 8500.2, Information Assurance Implementation. Therefore, DoD has adopted the proposed rule as a final rule without change. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD has prepared a final regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows: This final rule amends the DFARS to implement provisions of annual appropriations acts that authorize an exemption from the Buy American Act for the acquisition of information technology that is a commercial item. The objective of the rule is to promote Government access to commercial information technology, by eliminating the application of domestic source requirements to the acquisition of such information technology. The rule applies to

(1)All offerors responding to DoD solicitations for commercial information technology where the Buy American Act previously applied (generally, acquisitions between the micropurchase threshold of $2,500 and the World Trade Organization Government Procurement Agreement (WTO GPA) threshold of $193,000); and

(2)manufacturers of components of commercial information technology products. Based on DD Form 350, Individual Contracting Action Report, data for Product Service Codes 7010 through 7050, which include ADP Equipment Software, Supplies, and Support Equipment, DoD awarded approximately 8,170 contracts to small business concerns for the acquisition of commercial information technology during fiscal year 2005. Of those contracts, 7,850 were under $175,000, which was the WTO GPA threshold in 2005. The potential negative impact of increased competition from offerors of foreign products is expected to have minimal impact in the range of $2,500 to $100,000, because these awards are generally set aside for small business concerns. Furthermore, there will be a positive impact due to a reduction in administrative burden, since offerors and contractors will no longer need to track the origin of components to determine if an information technology product complies with Buy American Act requirements. The DD Form 350 system does not provide data at the subcontract level. However, manufacturers of domestic components of information technology products may face increased competition from manufacturers of foreign components as a result of this rule. There are no practical alternatives that would accomplish the objectives of the statutory requirements. C. Paperwork Reduction Act This rule will reduce the information collection requirements that have been approved by the Office of Management and Budget, under Control Number 0704-0229, for use through May 31, 2007. Under this clearance, 36,175 annual burden hours have been approved for the provision at DFARS 252.225-7000, Buy American Act—Balance of Payments Program Certificate; and 1,000 annual burden hours have been approved for the provision at DFARS 252.225-7035, Buy American Act—Free Trade Agreements—Balance of Payments Program Certificate. DoD estimates that the rule will result in a 5 percent reduction in the burden hours for the provision at DFARS 252.225-7000 (1,800 hours) and a 50 percent reduction in the burden hours for the provision at DFARS 252.225-7035 (500 hours). List of Subjects in 48 CFR Part 225 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Part 225 is amended as follows: PART 225—FOREIGN ACQUISITION 1. The authority citation for 48 CFR Part 225 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 225.1101 is amended by revising paragraph (2)(iii), paragraph (10)(i) introductory text, and paragraph (10)(ii) to read as follows: § 225.1101 Acquisition of supplies.

(2)* * *

(iii)An exception to the Buy American Act or Balance of Payments Program applies (see FAR 25.103, 225.103, and 225.7501); or (10)(i) Except as provided in paragraph (10)(ii) of this section, use the clause at 252.225-7036, Buy American Act—Free Trade Agreements—Balance of Payments Program, instead of the clause at FAR 52.225-3, Buy American Act—Free Trade Agreements—Israeli Trade Act, in solicitations and contracts for the items listed at 225.401-70, when the estimated value equals or exceeds $25,000, but is less than $193,000, and a Free Trade Agreement applies to the acquisition.

(ii)Do not use the clause if—

(A)Purchase from foreign sources is restricted (see 225.401(a)(2)), unless the contracting officer anticipates a waiver of the restriction; or

(B)Acquiring information technology that is a commercial item, using fiscal year 2004 or subsequent funds (Section 535 of Division F of the Consolidated Appropriations Act, 2004 (Pub. L. 108-199), and the same provision in subsequent appropriations acts). 3. Section 225.7501 is amended by revising paragraphs (a)(2)(iv) and

(v)and adding paragraph (a)(2)(vi) to read as follows: § 225.7501 Policy.

(a)* * *

(2)* * *

(iv)An industrial gas;

(v)A brand drug specified by the Defense Medical Materiel Board; or

(vi)Information technology that is a commercial item, using fiscal year 2004 or subsequent funds (Section 535 of Division F of the Consolidated Appropriations Act, 2004 (Pub. L. 108-199), and the same provision in subsequent appropriations acts); [FR Doc. E6-16401 Filed 10-3-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 236 RIN 0750-AF41 Defense Federal Acquisition Regulation Supplement; Congressional Notification of Architect-Engineer Services/Military Family Housing Contracts (DFARS Case 2006-D015) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 1031(a)(37) of the National Defense Authorization Act for Fiscal Year 2004. Section 1031(a)(37) amended the requirements for submission of a notification to Congress before the award of a contract for architectural and engineering services or construction design in connection with military construction, military family housing, or restoration or replacement of damaged or destroyed facilities. DATES: *Effective date:* October 4, 2006. *Comment date:* Comments on the interim rule should be submitted in writing to the address shown below on or before December 4, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D015, using any of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov* . Follow the instructions for submitting comments. • *E-mail: dfars@osd.mil.* Include DFARS Case 2006-D015 in the subject line of the message. • *Fax:*

(703)602-0350. • *Mail:* Defense Acquisition Regulations System, Attn: Ms. Debra Overstreet, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • *Hand Delivery/Courier:* Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov* , including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Debra Overstreet,

(703)602-0310. SUPPLEMENTARY INFORMATION: A. Background This interim rule revises DFARS 236.601 to implement Section 1031(a)(37) of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136). Section 1031(a)(37) amended the requirements at 10 U.S.C. 2807, for submission of a notification to Congress before the award of a contract for architectural and engineering services or construction design in connection with military construction, military family housing, or restoration or replacement of damaged or destroyed facilities. The amendments increased the contract dollar threshold for submission from $500,000 to $1,000,000; and reduced the time period for submission, from 21 to 14 days before obligation of funds, when the notification is provided in electronic medium. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule relates to reporting requirements that are internal to the Government. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D015. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* D. Determination to Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 1031(a)(37) of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136). Section 1031(a)(37) amended the statutory requirements for submission of a notification to Congress before the award of a contract for architectural and engineering services or construction design in connection with military construction, military family housing, or restoration or replacement of damaged or destroyed facilities. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Part 236 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Part 236 is amended as follows: PART 236—CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS 1. The authority citation for 48 CFR Part 236 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 236.601 is revised to read as follows: § 236.601 Policy

(1)Written notification to the congressional defense committees is required if the total estimated contract price for architect-engineer services or construction design, in connection with military construction, military family housing, or restoration or replacement of damaged or destroyed facilities, exceeds $1,000,000. In accordance with 10 U.S.C. 480, unclassified notifications must be provided by electronic medium.

(i)For military construction or military family housing (10 U.S.C. 2807(b)), the notification—

(A)Must include the scope of the project and the estimated contract price; and

(B)*(1)* If provided by electronic medium, must be provided at least 14 days before the initial obligation of funds; or *(2)* If provided by other than electronic medium, must be received by the congressional defense committees at least 21 days before the initial obligation of funds.

(ii)For restoration or replacement of damaged or destroyed facilities (10 U.S.C. 2854(b)), the notification—

(A)Must include the justification for the project, the estimated contract price, and the source of the funds for the project; and

(B)*(1)* If provided by electronic medium, must be provided at least 7 days before the initial obligation of funds; or *(2)* If provided by other than electronic medium, must be received by the congressional defense committees at least 21 days before the initial obligation of funds.

(2)During the applicable notice period, synopsis of the proposed contract action and administrative actions leading to the award may be started. [FR Doc. E6-16419 Filed 10-3-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 252 RIN 0750-AF49 Defense Federal Acquisition Regulation Supplement; Free Trade Agreements—Guatemala and Bahrain (DFARS Case 2006-D028) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the United States-Bahrain Free Trade Agreement and the Dominican Republic-Central America-United States Free Trade Agreement with respect to Guatemala. The Free Trade Agreements waive the applicability of the Buy American Act for some foreign supplies and construction materials and specify procurement procedures designed to ensure fairness. DATES: *Effective date:* October 4, 2006. *Comment date:* Comments on the interim rule should be submitted in writing to the address shown below on or before December 4, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D028, using any of the following methods: ○ *Federal eRulemaking Portal:* *http://www.regulations.gov.* Follow the instructions for submitting comments. ○ *E-mail: dfars@osd.mil.* Include DFARS Case 2006-D028 in the subject line of the message. ○ *Fax:*

(703)602-0350. ○ *Mail:* Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. ○ *Hand Delivery/Courier:* Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov* , including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams,

(703)602-0328. SUPPLEMENTARY INFORMATION: A. Background This interim rule amends DFARS provisions and clauses to implement the Dominican Republic-Central America-United States Free Trade Agreement, with respect to Guatemala, and the United States-Bahrain Free Trade Agreement. Congress approved these trade agreements in the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (Public Law 109-53) and the United States-Bahrain Free Trade Agreement Implementation Act (Public Law 109-169). The rule adds Bahrain and Guatemala to the definition of “Free Trade Agreement country.” In addition, the rule removes Guatemala from the definition of “Caribbean Basin country” because, in accordance with Section 201(a)(3) of Public Law 109-53, when the Dominican Republic-Central America-United States Free Trade Agreement enters into force with respect to a country, that country is no longer designated as a beneficiary country for purposes of the Caribbean Basin Economic Recovery Act. The dollar thresholds for applicability of the Dominican Republic-Central America-United States Free Trade Agreement to Guatemala are the same as those for the other countries subject to the agreement. The dollar thresholds for applicability of the Bahrain Free Trade Agreement are $193,000 for supply and service contracts, and $8,422,165 for construction contracts. Like the Morocco Free Trade Agreement, the Bahrain Free Trade Agreement threshold for supplies and services is higher than the thresholds for the other Free Trade Agreements. Therefore, Bahrainian end products are not covered by the Buy American Act-Free Trade Agreements-Balance of Payments Program provision and clause at DFARS 252.225-7035 and 252.225-7036, respectively. Like the North American Free Trade Agreement, the Bahrain Free Trade Agreement threshold for construction is higher than the thresholds of the other Free Trade Agreements. Therefore, Bahrainian construction material is excluded from coverage under the Balance of Payments Program—Construction Materials Under Trade Agreements clause at DFARS 252.225-7045 for acquisitions less than $8,422,165. In addition, this interim rule makes the following editorial changes: ○ Removal of the word “instrumentality” from the definitions of “Caribbean Basin country end product,” “Free Trade Agreement country end product,” “least developed country end product,” “Moroccan end product,” and “Canadian end product,” for consistency with the FAR definitions of “end product.” The term “instrumentality,” as used in trade agreements, applies to the European Union. The FAR and DFARS have separately listed each member country of the European Union, so it is unnecessary to continue to refer to instrumentalities in the end product definitions. ○ Amendment of the Trade Agreements clause at DFARS 252.225-7021 to add a definition of “WTO GPA country end product” and to update the Internet address for location of the Harmonized Tariff Schedule of the United States. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* Although the rule opens up DoD procurement to the products of Guatemala and Bahrain, DoD does not believe there will be a significant economic impact on U.S. small businesses. DoD applies the trade agreements to only those non-defense items listed at DFARS 225.401-70, and procurements that are set aside for small businesses are exempt from application of the trade agreements. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D028. C. Paperwork Reduction Act This interim rule affects the certification and information collection requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, currently approved under Office of Management and Budget Control Number 0704-0229 for use through May 31, 2007. The impact, however, is negligible. D. Determination To Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements the Dominican Republic-Central America-United States Free Trade Agreement with respect to Guatemala, and the United States-Bahrain Free Trade Agreement, as approved by Congress in Public Laws 109-53 and 109-169. The agreement with Guatemala took effect on July 1, 2006, and the agreement with Bahrain took effect on August 1, 2006. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Part 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Part 252 is amended as follows: PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 1. The authority citation for 48 CFR Part 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. § 252.212-7001 [Amended] 2. Section 252.212-7001 is amended as follows: a. By revising the clause date to read “(Oct 2006)”; b. In paragraphs (b)(9) and (b)(12)(i) by removing “(Jun 2006)” and adding in its place “(Oct 2006)”; and c. In paragraph (b)(12)(ii) by removing “(Jan 2005)” and adding in its place “(Oct 2006)”. 3. Section 252.225-7013 is amended by revising the clause date and paragraph (a)(2)(ii) to read as follows: § 252.225-7013 Duty-Free Entry Duty-Free Entry (Oct 2006)

(a)* * *

(2)* * *

(ii)*Free Trade Agreement country end product* , other than a *Bahrainian end product* or a *Moroccan end product* , as defined in the Buy American Act-Free Trade Agreements-Balance of Payments Program clause of this contract; or 4. Section 252.225-7021 is amended as follows: a. By revising the clause date; b. In paragraph (a)(1)(i)(B), in the first sentence, by removing “or instrumentality”; c. By revising paragraph (a)(3)(ii); d. In paragraph (a)(3)(iv) by removing “Guatemala,”; e. In paragraph (a)(6)(ii) in the first sentence, and in paragraph (a)(7)(ii) in the first sentence, by removing “or instrumentality”; f. By adding paragraph (a)(13); and g. In paragraph

(e)introductory text by revising the first sentence. The revised and added text reads as follows: § 252.225-7021 Trade Agreements Trade Agreements (Oct 2006)

(a)* * *

(3)* * *

(ii)A Free Trade Agreement country (Australia, Bahrain, Canada, Chile, El Salvador, Guatemala, Honduras, Mexico, Morocco, Nicaragua, or Singapore);

(13)*WTO GPA country end product* means an article that—

(i)Is wholly the growth, product, or manufacture of a WTO GPA country; or

(ii)In the case of an article that consists in whole or in part of materials from another country, has been substantially transformed in a WTO GPA country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.

(e)The HTSUS is available on the Internet at *http://www.usitc.gov/tata/hts/bychapter/index.htm.* * * * 5. Section 252.225-7035 is amended by revising the clause date and paragraphs (a), (b)(2), (c)(2)(ii), and Alternate I to read as follows: § 252.225-7035 Buy American Act—Free Trade Agreements—Balance of Payments Program Certificate Buy American Act—Free Trade Agreements—Balance of Payments Program Certificate (Oct 2006)

(a)*Definitions.* *Bahrainian end product, domestic end product, Free Trade Agreement country, Free Trade Agreement country end product, foreign end product, Moroccan end product, qualifying country end product,* and *United States* have the meanings given in the Buy American Act—Free Trade Agreements—Balance of Payments Program clause of this solicitation.

(b)* * *

(2)For line items subject to Free Trade Agreements, will evaluate offers of qualifying country end products or Free Trade Agreement country end products other than Bahrainian end products or Moroccan end products without regard to the restrictions of the Buy American Act or the Balance of Payments Program.

(c)* * *

(2)* * *

(ii)The offeror certifies that the following supplies are Free Trade Agreement country end products other than Bahrainian end products or Moroccan end products: (Line Item Number) (Country of Origin) Alternate I (Oct 2006) As prescribed in 225.1101(9), substitute the phrase *Canadian end product* for the phrases *Bahrainian end product, Free Trade Agreement country, Free Trade Agreement country end product, and Moroccan end product* in paragraph

(a)of the basic provision; and substitute the phrase *Canadian end products* for the phrase *Free Trade Agreement country end products other than Bahrainian end products or Moroccan end products* in paragraphs

(b)and (c)(2)(ii) of the basic provision. 6. Section 252.225-7036 is amended as follows: a. By revising the clause date; b. By redesignating paragraphs (a)(1) through

(11)as paragraphs (a)(2) through

(12)respectively; c. By adding a new paragraph (a)(1); d. By revising newly designated paragraph (a)(6); e. In newly designated paragraphs (a)(7)(ii) and (a)(8)(ii), in the first sentence of each, by removing “or instrumentality”; f. By revising paragraph (c); g. In Alternate I by revising the date to read “(OCT 2006)”; and h. In Alternate I, in paragraph (a)(4)(ii), in the first sentence, by removing “or instrumentality”. The revised and added text reads as follows: § 252.225-7036 Buy American Act—Free Trade Agreements—Balance of Payments Program Buy American Act—Free Trade Agreements—Balance of Payments Program (Oct 2006)

(a)* * *

(1)*Bahrainian end product* means an article that—

(i)Is wholly the growth, product, or manufacture of Bahrain; or

(ii)In the case of an article that consists in whole or in part of materials from another country, has been substantially transformed in Bahrain into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.

(6)*Free Trade Agreement country* means Australia, Bahrain, Canada, Chile, El Salvador, Guatemala, Honduras, Mexico, Morocco, Nicaragua, or Singapore;

(c)The Contractor shall deliver under this contract only domestic end products unless, in its offer, it specified delivery of qualifying country end products, Free Trade Agreement country end products other than Bahrainian end products or Moroccan end products, or other foreign end products in the Buy American Act—Free Trade Agreements—Balance of Payments Program Certificate provision of the solicitation. If the Contractor certified in its offer that it will deliver a qualifying country end product or a Free Trade Agreement country end product other than a Bahrainian end product or a Moroccan end product, the Contractor shall deliver a qualifying country end product, a Free Trade Agreement country end product other than a Bahrainian end product or a Moroccan end product, or, at the Contractor's option, a domestic end product. 7. Section 252.225-7045 is amended as follows: a. By revising the clause date; b. In paragraph (a), in the definition of “Designated country”, by revising the parenthetical in paragraph

(2)to read “(Australia, Bahrain, Canada, Chile, El Salvador, Guatemala, Honduras, Mexico, Morocco, Nicaragua, or Singapore)”; c. In paragraph (a), in the definition of “Designated country”, by removing “Guatemala,” from paragraph (4); and d. By revising Alternate I to read as follows: § 252.225-7045 Balance of Payments Program—Construction Material Under Trade Agreements Balance of Payments Program—Construction Material under Trade Agreements (Oct 2006) Alternate I (Oct 2006) As prescribed in 225.7503(b), add the following definition of *Bahrainian or Mexican construction material* to paragraph

(a)of the basic clause, and substitute the following paragraphs

(b)and

(c)for paragraphs

(b)and

(c)of the basic clause: *Bahrainian or Mexican construction material* means a construction material that—

(1)Is wholly the growth, product, or manufacture of Bahrain or Mexico; or

(2)In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in Bahrain or Mexico into a new and different construction material distinct from the materials from which it was transformed.

(b)This clause implements the Balance of Payments Program by providing a preference for domestic construction material. In addition, the Contracting Officer has determined that the WTO GPA and all Free Trade Agreements except NAFTA apply to this acquisition. Therefore, the Balance of Payments Program restrictions are waived for designated country construction material other than Bahrainian or Mexican construction material.

(c)The Contractor shall use only domestic or designated country construction material other than Bahrainian or Mexican construction material in performing this contract, except for—

(1)Construction material valued at or below the simplified acquisition threshold in Part 2 of the Federal Acquisition Regulation; or

(2)The construction material or components listed by the Government as follows: [Contracting Officer to list applicable excepted materials or indicate “none”]. [FR Doc. E6-16418 Filed 10-3-06; 8:45 am] BILLING CODE 5001-08-P 71 192 Wednesday, October 4, 2006 Proposed Rules DEPARTMENT OF AGRICULTURE Rural Housing Service 7 CFR Part 3565 RIN 0575-AC62 Annual Guarantee Fee Due Date AGENCY: Rural Housing Service, USDA. ACTION: Proposed rule. SUMMARY: The Rural Housing Service, an Agency under USDA Rural Development, is proposing to amend its regulations to change the due date of the annual guarantee fee. The annual fee is a non-refundable amount that the lender must pay each year that the loan guarantee remains in effect. Currently, the Finance Office in St. Louis calculates annual fees manually since the borrower submissions of December 31 year-end financial information are not loaded into their automated systems by January 1, when annual fees are due. The Finance Office has requested that the annual fee due date be changed from January 1 to February 28 to allow their automated systems to be uploaded with December 31 year-end information thus enabling them to automate the annual fee calculation process. DATES: Written or e-mail comments must be received on or before December 4, 2006. ADDRESSES: You may submit comments to this proposed rule by any of the following methods: *Federal eRulemaking Portal:* *http://www.regulations.gov.* Follow the instructions for submitting comments. *Mail:* Submit written comments via the U.S. Postal Service to the Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, STOP 0742, 1400 Independence Avenue SW., Washington, DC 20250-0782. *Hand Delivery/Courier:* Submit written comments via mail courier service requiring a street address to the Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, 300 7th Street, SW., 7th Floor, Suite 701, Washington, DC 20024. All written comments will be available for public inspection during regular work hours at the 300 7th Street, SW., address listed above. FOR FURTHER INFORMATION CONTACT: C.B. Alonso, Guaranteed Rural Rental Housing Program, Multi Family Housing Processing Division, Rural Housing Service, U.S. Department of Agriculture, STOP 0781, 1400 Independence Avenue SW., Washington, DC 20250-0781; Telephone: 202-720-1624; Fax: 202-205-5066; E-mail: *cb.alonso@wdc.usda.gov.* SUPPLEMENTARY INFORMATION: Classification This has been reviewed under Executive Order 12866. The rule has been determined not to be significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB). Regulatory Flexibility Act The Agency Administrator has determined that this proposed rule will not have a significant economic impact on a substantial number of small entities as defined in the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). New provisions included in this proposed rule will not impact a substantial number of small entities to a greater extent than large entities. Therefore, a regulatory flexibility analysis was not performed. Paperwork Reduction Act There are no new reporting or recordkeeping requirements associated with this proposed rule. Unfunded Mandates Reform Act This proposed rule contains no Federal mandates (under the regulatory provisions of title II of the Unfunded Mandates Reform Act of 1995) for State, local, and tribal governments or the private sector. Thus, this proposed rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act of 1995. Environmental Impact Statement This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “ Environmental Program.” The Agency has determined that this action does not constitute a major Federal action affecting significantly the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, Public Law 91-190, an Environmental Impact Statement is not required. Programs Affected The program affected is listed in the Catalog of Federal Domestic Assistance under Number 10.438—Rural Rental Housing Guaranteed Loans. Intergovernmental Consultation For the reasons contained in the Final Rule related Notice to 7 CFR part 3015, subpart V, this program, 10.438—Rural Rental Housing Guaranteed Loans, is subject to Executive Order 12372 which requires intergovernmental consultation with State and local officials. The Agency has conducted intergovernmental consultation in the manner delineated in RD Instruction 1940-J. Executive Order 13132, Federalism The policies contained in this proposed rule do not have any substantial direct effect on States, the relationship between the National Government and the States, or the distribution of power and responsibilities among the various levels of government. Nor does this proposed rule impose substantial direct compliance costs on State and local Governments. Therefore, consultation with the States is not required. Discussion Rural Development administers the Section 538 Guaranteed Rural Rental Housing Program (GRRHP) under the authority of the Housing Act of 1949. Under the GRRHP, Rural Development guarantees loans for the development of housing and related facilities for low or moderate-income families in rural areas. Rural Development is amending 7 CFR 3565.53(b) to change the due date of the annual guarantee fee. The annual fee is a non-refundable amount that the lender must pay each year that the loan guarantee remains in effect. Currently, the Finance Office in St. Louis calculates annual fees manually since the borrower submissions of December 31 year-end financial information are not loaded into the Finance Office's automated systems by January 1, when annual fees are due. The Finance Office has requested that the annual fee due date be changed from January 1 to February 28 to allow their automated systems to be uploaded with December 31 year-end information. The revision of 7 CFR 3565.53(b) will facilitate the automation of the annual fee calculation process. List of Subjects in 7 CFR Part 3565 Guaranteed loans, Low and moderate income housing, Surety bonds. For the reasons set forth in the preamble, Title 7, Chapter XXXV of the Code of Federal Regulations is proposed to be amended as follows: PART 3565—GUARANTEED RURAL RENTAL HOUSING PROGRAM 1. The authority citation for part 3565 continues to read as follows: Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480. Subpart B—Guarantee Requirements 2. Section 3565.53(b) is revised to read as follows: § 3565.53 Guarantee fees.

(b)*Annual guarantee fee.* An annual guarantee fee of at least 50 basis points (one-half percent) of the outstanding principal amount of the loan will be charged each year or portion of a year that the guarantee is in effect. This fee will be collected on February 28, of each calendar year. Dated: September 15, 2006. Russell T. Davis, Administrator, Rural Housing Service. [FR Doc. E6-16399 Filed 10-3-06; 8:45 am] BILLING CODE 3410-XV-P DEPARTMENT OF TRANSPORTATION Office of the Secretary 14 CFR Part 331 [Docket OST-2006-25906] RIN 2105-AD61 Procedures for Reimbursement of General Aviation Operators and Service Providers in the Washington, DC Area AGENCY: Office of the Secretary, DOT. ACTION: Notice of proposed rulemaking. SUMMARY: On November 30, 2005, President Bush signed into law the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriation Act, 2006 (Pub.L. 109-115, 119 Stat. 2396, hereafter the Act, or the 2006 Appropriation Act). Section 185 of the Act authorized the Department of Transportation to provide reimbursement to fixed-based general aviation operators and providers of general aviation ground support services at five metropolitan Washington, DC area airports, for the direct and incremental financial losses they incurred while the airports were closed due to Federal Government actions taken after the terrorist attacks on September 11, 2001. The airports are: Ronald Reagan Washington National Airport; College Park Airport in College Park, Maryland; Potomac Airfield in Fort Washington, Maryland; Washington Executive/Hyde Field in Clinton, Maryland; and Washington South Capitol Street Heliport in Washington, DC. A total of up to $17,000,000 was appropriated for this purpose. This proposed rule would establish the eligibility requirements and application procedures for those who may qualify for assistance under this statute. DATES: Comments should be received by November 3, 2006. ADDRESSES: Interested persons should send comments to Docket Clerk, Docket OST-2006-25906, Department of Transportation, 400 7th Street, SW., Room PL-401, Washington, DC 20590. We request that, in order to minimize burdens on the dockets staff, commenters send three copies of their comments to the docket. Commenters wishing to have their submissions acknowledged should include a stamped, self-addressed postcard with their comments. The Docket Clerk will date stamp the postcard and return it to the commenter. Comments will be available for inspection at the above address from 10 a.m. to 5 p.m., Monday through Friday. Comments also may be sent electronically to the Dockets Management System

(DMS)at the following internet address: *http://dms.dot.gov/.* Commenters who wish to file comments electronically should follow the instructions on the DMS Web site. Interested persons can also review comments through this same Web site. FOR FURTHER INFORMATION CONTACT: James R. Dann, U.S. Department of Transportation, Office of General Counsel, 400 7th Street, SW., Room 10102, Washington, DC 20590. Telephone 202-366-9154. Data sources to assist applicants in preparing portions of their applications are available at the Department of Transportation, Office of the Secretary's Web site at *http://ostpxweb.dot.gov/aviation/index.html,* under “Programs.” SUPPLEMENTARY INFORMATION: Following the terrorist attacks on the United States on September 11, 2001, general aviation activity in the Washington, DC metropolitan area was suspended. Five airports were most affected: Ronald Reagan Washington National Airport (DCA); College Park Airport in College Park, Maryland; Potomac Airfield in Fort Washington, Maryland; Washington Executive/Hyde Field in Clinton, Maryland; and Washington South Capitol Street Heliport in Washington, DC. General aviation operations remain limited at DCA and the three Maryland airports, and the South Capitol Street Heliport is now used exclusively by the Washington DC Metropolitan Police. Because of the reduction in general aviation activity at these locations, the fixed-based operators and service providers that supported general aviation were also affected. In addition, some such entities have had to incur additional costs associated with new security regulations in order to keep their businesses functioning. Soon after the terrorist attacks, Congress enacted the Air Transportation Safety and System Stabilization Act, Public Law 107-42 (Sept. 22, 2001) (the Stabilization Act). The Stabilization Act directed that compensation be provided to “air carriers” for the direct losses they incurred as a result of the Government's orders halting air traffic, and the incremental losses they incurred between September 11 and December 31, 2001, as a direct result of the terrorist attacks. Under this authority, approximately $4.6 billion has been distributed to qualifying carriers, providing them assistance as they sought to avoid bankruptcy and recover financially in the aftermath of September 11. Such carriers were also made eligible for loan guarantees under a different title of the Act. However, as noted, relief was limited in the statute to “air carriers,” a term defined at 49 U.S.C. 40102. Because the fixed-based operators and service providers at issue here did not fall within that definition, they were not eligible for either compensation or loan guarantees under the Stabilization Act. In 2003, the United States House of Representatives Committee on Appropriations requested that the Department of Transportation prepare a report detailing the documented financial losses by holders of real property leases at the five affected airports that were attributable to the Federal actions since September 11, 2001. (House Report 108-243, July 30, 2003, p. 8.) The Committee stated that such a report would assist the Congress in considering “potential federal reimbursement for a portion of these unusual financial losses.” In October, 2005, the Secretary of Transportation submitted to the Committee the requested report, which was entitled: *Estimated Financial Losses to Selected General Aviation Entities in the Washington, DC Area Final Report* (October 2005 DOT study). A copy of this Report has been placed into Docket 2006-25906. The October 2005 DOT study identified sixteen general aviation leaseholders at the five airports, and estimated the financial losses that each incurred during its study period (which ran from September 11, 2001 to January 23, 2004) due to the Federal actions taken after the terrorist attacks. The estimates reflected the difference in net income between what the companies projected for the study period and the actual net income for that period, and included both losses in net income and one-time costs attributable directly to compliance with new restrictions or regulations resulting from the terrorist attacks. In formulating its estimates, the Department's consultant relied primarily on voluntary information provided by each entity, and while interviews were conducted to confirm the general reasonableness and consistency of the numbers provided, no independent analysis, audit or certification was conducted. Therefore, the October 2005 DOT study advised that these estimates were merely preliminary and meant solely to inform Congress in determining whether and in what amount to appropriate funds to reimburse these general aviation entities. The October 2005 DOT study also indicated that, if compensation were to be made available, “the financial data establishing the basis for any payment, especially forecast revenue, cost and net income, should * * * be subject to a more rigorous verification regime.” ( *Estimated Financial Losses to Selected General Aviation Entities in the Washington, DC Area Final Report, at fn. 3.* ) The total estimated financial losses for the period reviewed were $10,443,936, with more than half of that amount being reported for one firm, Signature Flight Support. The estimates were in current dollars and reflected no consideration for the time value of money. On November 30, 2005, the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriation Act, 2006, became law. Section 185 of the Act provides for the reimbursement of “fixed-based general aviation operators and the providers of general aviation ground support services” at the five cited airports for the “direct and incremental financial losses incurred while such airports were closed to general aviation operations, or as of the date of enactment of this provision in the case of airports that have not reopened to such operations, by these operators and service providers solely due to actions of the Federal Government following the terrorist attacks on the United States that occurred on September 11, 2001.” The Act provides up to $17 million to reimburse these general aviation entities; however, it states that, of the $17 million provided, an amount not to exceed $5 million, if necessary, is to be available on a pro rata basis to fixed-based general aviation operators and the providers of general aviation ground support services located at the three Maryland airports: College Park Airport in College Park, Maryland; Potomac Airfield in Fort Washington, Maryland; and Washington Executive/Hyde Field in Clinton, Maryland. Section 185 further states that the appropriated funds included the cost of “an independent verification regime;” that no funds shall be obligated or distributed to such general aviation entities until an independent audit is completed; that losses incurred as the result of violations of law, or through fault or negligence of such entities or of third parties (including airports) are not eligible for reimbursement; and that the obligation and expenditure of funds are conditional upon full release of the United States Government for all claims for financial losses resulting from such actions. Section-by-Section Analysis Section 331.1 What is the purpose of this Part? This section states the proposed purpose of part 331, which is to carry out the statutory provisions of the Act with respect to compensating fixed-based general aviation operators and providers of general aviation ground support services at five metropolitan Washington, DC area airports. Section 331.3 What do the terms used in this part mean? This definitions section proposes to incorporate terms from the Act or other existing sources. This section also proposes to define additional terms necessary to implement the procedures to provide reimbursement under the Act. Entities that meet the definition of a “fixed-based general aviation operator” or a “provider of general aviation ground support services” with operations at one or more of the five named airports on September 11, 2001 would be eligible under the plain statutory language to apply for reimbursement of eligible losses under the 2006 Appropriation Act. The Department understands that a “fixed based general aviation operator,” (FBO), customarily refers to an entity based at a particular airport that provides services and support to general aviation, which may include fuel and oil, aircraft storage and tie-down, airframe and engine maintenance, avionics repair, baggage handling, deicing, and the provision of air charter services. We expect that most, if not all, eligible FBOs will have been leaseholders identified in the October 2005 DOT study. The Department would tentatively further define a “provider of general aviation ground support services” as a non-FBO operating at an airport that supplies such or similar services exclusively or predominantly to support general aviation activities, extending as well to flight schools, security services, aircraft and avionics maintenance, etc. The reference to “services” in the statute would seem to preclude non-FBO entities from qualifying that provided only products to general aviation, *e.g.,* a parts supplier. The Department notes that the October 2005 DOT study performed under House Report 108-243 was limited to “holders of real property leases” at the airports. Because the 2006 Appropriation Act used different language to describe the entities that were to be eligible for reimbursement, the Department believes that reimbursement for losses is not necessarily limited to only those sixteen entities that were identified in the October 2005 DOT study. As the Department expects that case-by-case determinations may be necessary, we propose that any entity that applies for reimbursement under the Program describe itself, the services it provides or provided, the airport or airports at which it provided those services, and certify that it meets the regulatory definitions, in order to facilitate an eligibility determination by the Department. We also propose common usage definitions for “losses” and “incurred,” as we did in the regulations implementing the Stabilization Act. *See* 67 FR 54062 (August 20, 2002). Thus, “losses” refer to something that is gone and cannot be recovered, and “incurred” means to become liable or subject to (as to incur debt). Applying these definitions, for example, a temporary loss that is recovered later, or is expected to be recovered later, would not be eligible for reimbursement. The Department proposes to define the statutory phrase “direct and incremental losses” to mean those losses that resulted from the Federal Government's closure of the five Washington area airports to general aviation operations. “Direct and incremental losses” would include losses incurred on September 11, 2001 through the end of the eligibility reimbursement period for each airport. The Department proposes to read “direct and incremental losses” as a single category because of the difficulty in apportioning losses between direct losses and incremental losses while an airport was closed. As discussed in more detail in Section 331.13, the eligibility period is different for each of the five Washington area airports. For the reasons set forth in Section 331.13, the Department is proposing that the term “closed” or “closure” be defined so as to carry out the intent of Congress in establishing the eligible period for reimbursement for each airport. For Washington National Airport, “closed” or “closure” would mean the time between September 11, 2001 and the date that general aviation operations were generally permitted to resume. For the Washington South Capitol Street Heliport, which was closed at the date that Section 185 of the Act was enacted, “closed” or “closure” would mean the time between September 11, 2001 and November 30, 2005. For the three Maryland airports, because general aviation operations resumed more gradually, “closed” or “closure” would mean the time between September 11, 2001 and the date that transient traffic was generally permitted to return. Finally, the Department proposes that, for purposes of determining eligibility under the Act, “forecast” should be defined as an objective and reliable projection of the revenue that would have been earned and the expenses that would have been incurred during the eligible reimbursement period had the attacks of September 11, 2001 not occurred. The Department believes that applicants either prepared such forecasts before September 11, 2001, or have the ability to prepare or reconstruct such reasonable forecasts based on financial records generated and maintained in the ordinary course of business. Section 331.5 Who may apply for reimbursement under this part? This part specifies the applicants eligible for reimbursement under the Act. The Department proposes that applicants submitting claims under the Act for losses incurred at two or more airports complete separate applications. For example, if an applicant provided fixed-based general aviation or general aviation ground support at Ronald Reagan Washington National Airport and College Park Airport in College Park, Maryland, then the applicant would complete two applications. Section 331.7 What losses will be reimbursed? Under subsection

(a)the Department proposes the method that would be applied to determine reimbursement. The Department proposes that losses should be measured under the same general approach utilized in the October 2005 DOT study, *i.e.,* the difference in net income between what an eligible applicant forecast (or would have reasonably expected) for the applicable reimbursement period, and the actual net income it earned for that period. The Department deemed this “lost profits” approach to be the most reasonable one for purposes of its October 2005 study, and it was the same approach that was utilized in providing compensation to air carriers under the Air Transportation Safety and System Stabilization Act. Thus, the Department has had considerable experience in analyzing and approving compensation claims under such a regime. Moreover, since Congress likely relied on the analysis and estimates made by the Department and the Department's consultant in the October 2005 DOT study when it enacted the 2006 Appropriation Act, this approach would seem most consistent with Congress' expectations regarding the cost to be incurred for the program. Under subsection

(b)the Department proposes that if applicants make a claim for extraordinary, non-recurring, or unusual adjustments, they would also be requested to demonstrate that such losses were fully attributable to the Federal Government's actions, that the claim be made in conformity with Generally Accepted Accounting Principles (GAAP), that the expenses of the loss were fully borne within the applicable statutory reimbursement period, that the charge was not discretionary in nature, and that reimbursement would not be duplicative of other relief. The Department notes that it appears that Congress intended one-time costs that were necessarily incurred in order to comply with Federal Government security requirements to be reimbursable, and we propose that they be. However, under the Air Transportation Safety and System Stabilization Act compensation program, a number of applicants sought reimbursement for various types of extraordinary, non-recurring, or unusual charges, which DOT generally found not to be eligible. For example, the Department typically rejected claims for impairment of long-lived assets, relying in part on guidelines published by the Financial Accounting Standards Board

(FASB)recognizing that “impairment of long-lived assets as a result of the September 11 events would in many cases be impossible to measure separately from impairment due to the general economic slowdown that was generally acknowledged to be under way.” (Emerging Issues Task Force Meeting Minutes, at 4.) Therefore the Department is proposing that extraordinary, non-recurring, or unusual adjustments be separately explained by each applicant in order to determine eligibility. Each such claim would prompt a case-by-case review to determine whether it should be reimbursed under the Act, using the same type of analysis that was employed in the Air Transportation Safety and System Stabilization Act cases. Subsection

(c)proposes that temporary losses recovered after the terrorist attacks of September 11, 2001, or that applicants expect to recover, should not be eligible for reimbursement. The Department proposes in subsection

(d)that if an applicant engaged in any aviation or non-aviation income-producing activities after September 11, 2001, such income should mitigate its losses and so reduce reimbursement. If, for example, an applicant after September 11, 2001 contracted out its services for some of its maintenance and avionics repair work to other carriers or at other airports, that income would serve to reduce its reimbursement under this Act. Similarly, the Department proposes in subsection

(e)that so-called “cost savings” cannot be claimed and manipulated into a basis for additional reimbursement. Such “cost savings” arise from instances in which an applicant achieves after September 11 a reduction in actual expenses as compared to its forecast expenses in expense categories it claims were not affected by the Federal Government's closure of airports. We assume that potentially eligible general aviation entities would, like most businesses, try to maintain strict controls on expenditures, especially in cases in which revenue shortfalls are being anticipated (such as after the terrorist attacks). We perceive this as simply good business practice, so that these savings should reduce reimbursement needs. *See* 67 FR 18473 (Apr. 16, 2002); *Federal Express Corp.* v. *Mineta,* 434 F.3d 597 (DC Cir., 2006). The Department proposes in subsection

(f)that applicants not be reimbursed for the lost time value of money. As noted above, the October 2005 DOT study questioned whether reimbursement pursuant to Section 185 should account for the time value of money, through payment of interest on lost profits for the period of time the funds were not available for use. The Department has tentatively determined that, as a legal matter, it is precluded from payment of interest under the circumstances present here. *See,* *e.g.,* *United States* v. *Alcea Bank of Tillamooks,* 341 U.S. 48, 49

(1951)(noting that, “[i]t is the `traditional rule' that interest on claims against the United States cannot be recovered in the absence of an express provision to the contrary in the relevant statute or contract”). We are aware of no exceptions that would apply here so as to make such payment here allowable. The Department also proposes to exclude lobbying fees and attorneys' fees in subsection (g). The October 2005 DOT study did not address the compensability of reasonable lobbying and attorney's fees. However, a question has arisen as to whether the program should provide reimbursement for those professional service fees, such as those incurred in seeking and obtaining the legislative relief ultimately embodied in Section 185. The Department proposes that such fees not be eligible for reimbursement. We note initially that a Federal statute (31 U.S.C 1352) prohibits using appropriated funds to compensate lobbying costs for specific activities. To implement this provision, the Department adopted regulations as generally prescribed by the Office of Management and Budget (OMB), that broadly limit the expenditure of appropriated funds by recipients of “a Federal contract, grant, loan, or cooperative agreement” for lobbying costs. *See* 49 CFR 20.100. While “reimbursement” is not included among the covered Federal actions, the Department believes that it should be here, in order to achieve consistency with the spirit and intent of these provisions, and therefore would not reimburse with appropriated funds expenditures for such specified activities. Accordingly, such costs would need to be broken out and excluded from an applicant's claim. In order to assist the Department evaluate the reasonableness of claims it receives from applicants, it proposes in subsection

(h)that the applicants' calculations of revenues, expenses and income be based on financial documents customarily maintained by the applicants in the course of conducting business. Section 331.9 What funds will the Department distribute under this part? The Department proposes to disburse up to the full amount of reimbursement it determines is payable to applicants under section 185 of the Act. Section 335.11 What are the limits on reimbursement to operators or providers? Congress has limited reimbursements to losses incurred as a direct result of actions by the Federal Government and to losses incurred within a finite period of time. As discussed above, even if losses may be properly reported under generally accepted accounting principles

(GAAP)within that period, if they are actually experienced over a longer or different period of time, and/or if they are not fully attributable to the Federal Government's actions to close airports, they may not be properly reimbursable under the Act. The Department proposes in subsection

(a)to reimburse applicants subject to the subpart C set-aside for eligible operators or providers at College Park Airport in College Park, Maryland; Potomac Airfield in Fort Washington, Maryland; and Washington Executive/Hyde Field in Clinton, Maryland. The Department further proposes that the amount available to each applicant be subject to the Department's cost of independently verifying claims for reimbursement, as explained in Section 331.17. In subsection (b), the Department proposes that, if an overpayment is made to an applicant for any reason, the Federal Government would collect the overpayment amount in accordance with the Federal Claims Collection Act of 1996 (31 U.S.C. 3701 *et seq.* ). Section 185 requires that, as a condition for payment, parties provide a full release to the United States from all claims for financial losses resulting from actions of the Federal Government following the terrorist attacks of September 11, 2001. The Department proposes in subsection

(c)to utilize a standard release form. Section 331.13 What is the eligible reimbursement period under this part? Section 185 provides funds to reimburse GA entities for eligible losses “incurred while such airports were closed to general aviation operations, or, if an airport has not reopened to such operations, as of the date of enactment of Public Law 109-115” ( *i.e.* , November 30, 2005). Because four of the five the airports in question were subject to differing levels of restriction in general aviation activity over time, the language “while such airports were closed to general aviation operations” requires the Department to interpret whether the eligible period is that during which the airports were closed to *all* general aviation operations, or to *some* or *any* general aviation operations. 1 1 The Department's GRA Study considered as “direct losses” those losses incurred during the period of “full” closure—through March, 2002—and as “incremental losses” those losses incurred after the reopening of the airports that were nonetheless attributable to the Federal actions taken as a result of the September 11 terrorist attacks. The language of section 185 limits reimbursement to the direct and incremental losses incurred while the airports were “closed” to GA operations, leaving unsettled whether Congress was altering the time periods for which calculations of loss would be made from the approach taken in the Study. As background, the period of closure for all five airports began on September 11, 2001, when immediately after the terrorist attacks, the Federal Aviation Administration

(FAA)prohibited all aircraft operations within the territorial airspace of the U.S. Exceptions were made only for certain military, law enforcement, and emergency-related aircraft operations. This general prohibition was lifted in part on September 13, 2001. Due to continuing security concerns in Washington, DC airspace, restrictions remained in place on aircraft operations in the DC metropolitan area. On October 4, 2001, limited air carrier operations were permitted to resume at Ronald Reagan Washington National Airport (“DCA”), but general aviation activity there and elsewhere in the metropolitan area was limited to repositioning of aircraft and operations under limited waivers. Under Notice to Airmen (NOTAM) 1/3354 of December 19, 2001, the FAA continued with minor exceptions the total prohibition on all Part 91 flight operations within 15-miles of the Washington Monument. At DCA, official State and Federal government operations, and other flights operating under limited waivers, generated about 20 general aviation flights per month through 2004. These flights required special security arrangements, including pilot and passenger background checks and the presence of law enforcement personnel on board. Because of these restrictions, much DCA general aviation activity migrated to Washington Dulles Airport, Baltimore—Washington International Airport, or other facilities. On May 25, 2005, the Department of Homeland Security proposed a broader reopening of DCA to various GA operations, including corporate aircraft and charter flights. Up to 48 GA flights per day would be allowed, although only for operations from authorized originating “gateway” airports. Operations were subject to stringent security measures, including: Advanced registration and qualification of operators and crews; Transportation Security Administration (“TSA”) inspection of crews and passengers; submission of manifests 24 hours in advance of the flight; enhanced background checks; and the presence of a law enforcement officer on board each flight. On October 18, 2005, flights under the new rules resumed at DCA. The FAA's Special Federal Aviation Regulation

(SFAR)94, issued as a Final Rule on February 19, 2002 (67 FR 7537), set out procedures under which College Park Airport, Potomac Airfield, and Washington Executive/Hyde Field (the “three Maryland airports” ) could be partially reopened to general aviation traffic. SFAR 94 permitted the three Maryland airports to develop security procedures that, if approved by the FAA Administrator, would allow pilots that had been based there to resume some operations. These procedures encompassed such matters as identification of an airport security coordinator, maintenance of a record of all individuals and aircrafts authorized to operate from the airport, implementation of robust security monitoring and security awareness procedures, etc. Although SFAR 94 allowed the resumption of some operations under tightly controlled security requirements, based pilots were still unable to conduct pattern operations or flights to another affected airport. In addition, transient aircraft operations continued to be prohibited. Based on SFAR 94, and the FAA's NOTAM 2/1257 that was published on February 14, 2002, College Park and Potomac airports were able to reopen to limited resident GA operations on February 23, 2002. Washington Executive/Hyde Field followed on March 2, 2002. SFAR 94 was reissued on February 14, 2003 for an additional two years, and, on February 10, 2005, new rules were issued that authorized the resumption of transient operations on a restricted basis. 70 FR 7150. Under these restrictions, pilots were required to: Submit background information on themselves, including fingerprints; to undergo a terrorist threat assessment, criminal records check, and check of his or her FAA record for certain violations; and be briefed on procedures for operating at the airport. Further, pilots who wished to operate aircraft from or to any of the three Maryland airports were required to file a flight plan in advance, obtain air traffic control clearances and a discrete transponder code, and follow the arrival and departure procedures that were required by the FAA. See 49 CFR Part 1562. The flights into the three Maryland airports under these restricted procedures began after these rules became effective on February 13, 2005. The restrictions on general aviation operations in Washington airspace have obviously translated into a significantly lower volume of operations than had been in place prior to the terrorist attacks. At DCA, in the year 2000, there had been 60,225 GA operations. In contrast, the Department of Homeland Security stated that, between January of 2003 and March of 2004, there had been a total of 146. The October 2005 DOT study found that local operations at College Park Airport fell from 19,657 in 2001 to 2,500 in 2002 and 2,000 in 2003. Itinerant operations were reported as dropping from 4,800 in 2001 to zero in both 2002 and 2003. At Potomac Airfield, the October 2005 DOT study reported local and itinerant operations as staying constant for the three years, but considered that such data “may not be totally accurate because they show exactly the same number of operations each year.” *Estimated Financial Losses to Selected General Aviation Entities in the Washington, DC Area Final Report,* at fn. 11. At Washington Executive/Hyde Field, the October 2005 DOT study found that local operations were constant at 34,580 in 2001 and 2002 (which conclusion may suffer from the same inaccuracy in reporting as affected Potomac Airfield) but fell to 6,970 in 2003. As to itinerant operations, the October 2005 DOT study reported a fall from 1,900 in 2001 to 30 in 2002 and 10 in 2003. The Washington South Capitol Street Heliport is now closed to GA operations. According to the Department's consultant, the Washington Metropolitan Police Department helicopter operation unit is now the exclusive user of the heliport. The reduction in traffic volumes has translated into financial losses for the fixed-based general aviation operators and providers of general aviation ground support services at the airports. The October 2005 DOT study reported financial losses for the general aviation leaseholders at the airports as being most severe in 2002, cumulating at almost $5.3 million. However, the losses extended as well into 2003, cumulating at over $3.4 million and into the early part of 2004. In construing the language of section 185 as to the period each of the five airports was “closed to general aviation operations,” one approach would be for the Department to consider the period of closure to run until the first general aviation operations were permitted (on other than the special waiver, highly restricted basis in effect immediately after September 11, 2001). For DCA, that would be until October 18, 2005; for College Park and Potomac airports it would be until February 23, 2002; and for Washington Executive/Hyde Field, it would be until March 2, 2002. (For Washington South Capitol Street Heliport, it seems clear that the period of reimbursement eligibility would run for the full period from September 11, 2001 to November 30, 2005.) Another option would be to consider the three Maryland airports “closed” until the airports were more broadly reopened to include transient traffic, if even on a restricted basis, *i.e.* February 13, 2005. A final alternative would be to interpret the language to extend the time to the full September 11, 2001 to November 30, 2005 period, on the basis that some of the pre-September 11 general aviation traffic had not returned due to the restrictions, and so the airports might be thought of as not being “fully open” even to the present day. The Department has tentatively determined that the respective periods of eligibility should be from September 11, 2001 until October 18, 2005 for DCA; until February 13, 2005 for the three Maryland airports, although limited for Washington Executive/Hyde Field as discussed below; and until November 30, 2005 for the Washington South Capitol Street Heliport. Comments on these proposed timeframes are welcomed. The following chart sets forth the proposed periods of eligibility for reimbursement: Airport Period of eligibility for reimbursement Begin date End date Ronald Reagan Washington National Airport September 11, 2001 October 18, 2005. College Park Airport in College Park, Maryland September 11, 2001 February 13, 2005. Potomac Airfield in Fort Washington, Maryland September 11, 2001 February 13, 2005. Washington Executive/Hyde Field in Clinton, Maryland September 11, 2001 September 29, 2002 May 16, 2002. February 13, 2005. Washington South Capitol St. Heliport in Washington, D.C. September 11, 2001 November 30, 2005. In so proposing, we considered that Congress must not, at the time it enacted section 185, considered all five of the airports to still be “closed.” If it did, it would simply have provided that the period for reimbursement would extend through the date the statute was enacted. To give meaning to the phrase “while closed to general aviation operations” in the Act, at least one of the airports must have been thought of as having reopened prior to the date of enactment. Of the remaining two approaches, we have tentatively decided to use the February 13, 2005 date for the three Maryland airports, rather than the alternative dates in 2002. The GA entities potentially eligible for reimbursement at the three Maryland airports continued to sustain serious financial losses well past the dates that the airports were reopened for some resident based operations, and it seems inconsistent with the clear remedial purpose of section 185 to restrict reimbursement only for losses incurred by these entities through February or March of 2002. Moreover, given these continuing financial impacts, it seemed inequitable to permit reimbursements at DCA over a four year period, but restrict such reimbursements at the three Maryland airports for less than six months. And, although restrictions continue at the three Maryland airports, they do as well at DCA, and similar treatment among them would seem to be best achieved by using the February 13, 2005 and October 18, 2005 dates. The Department notes that section 185 also provides that losses incurred as a result of violations of law, or through fault or negligence, of such operators and service providers or of third parties (including airports) are not eligible for reimbursement. In this connection, the Department understands that Washington Executive Airport/Hyde Field was reclosed on May 17, 2002, because of a security violation, and not reopened again until September 28, 2002. *See* 70 FR 45256 (Aug. 4, 2005). The Department therefore tentatively believes that that period must be excluded from the reimbursement calculus, only for Washington Executive Airport/Hyde Field. The Department also believes that Potomac Airfield was closed from November 1 to December 16, 2005 for a violation of its security program. However, because that period would be outside the tentative reimbursement period of September 11, 2001 to February 13, 2005, reimbursements under this program would not be affected. The Department would welcome comments on this issue, particularly as to whether these exclusions should extend to other periods or situations. Section 331.15 How will other grants, subsidies, or incentives be treated by the Department? The Department understands that Potomac Airfield, College Park Airport, and Washington Executive Airport/Hyde Field, at least, received Federal grants under the Airport Improvement Program to reimburse them for the cost of operations and capital improvements associated with implementing security programs. State and local authorities may have provided grants as well. The Department is proposing that any applicants who received, directly or indirectly, post-September 11 grants report them as revenues, because such grants should have the effect of reducing reimbursable losses. The Department is also proposing to add a question on receipt of any such grants in the Background and Eligibility Form to ensure proper focus on this issue. Section 331.17 How will the Department verify and audit claims under this part? This part proposes the method by which the Department would handle verification and auditing of claims. It is clear that Congress intended that these appropriated funds be used carefully and responsibly to reimburse only eligible entities for their eligible losses. To that end, section 185 would provide funds for an “independent verification regime,” and would require that an independent audit be completed before funds were distributed to eligible general aviation entities. Accordingly, the Department's Office of the Inspector General

(OIG)was consulted as to how to most efficiently and effectively implement this mandate. In part because there may be a wide range in the dollar amount of claims, we are proposing, with OIG concurrence, a flexible approach to achieve Congress's objectives. First, all applicants would be required to certify the accuracy and completeness of their claims, under penalty of law. The Department has considerable experience with such certification requirements, can refer suspected violations to the Department of Justice, and itself has an enforcement program under authority of the Program Fraud and Civil Penalties Act (31 U.S.C. 3801 note, Pub. L. 99-509; 49 CFR Part 31). For verification purposes, applicants would also be required to retain all financial records for the period covered by their claim, as well as all data used in support of their claim (including actual monthly result data from 1999 forward). Department staff including attorneys, accountants, and analysts, who have extensive experience in reviewing the financial data of aviation firms, would initially review each claim in detail, contacting the individual applicants and consulting with OIG as questions arise in order to verify the accuracy of the information provided. Larger claims, and any questioned claims, would be subject to individual audits. The Department proposes that this auditing process should be flexible. Where an audit is warranted, the Department would forward the claim to either the OIG or an independent auditor. Claims believed to be fraudulent would be referred to the Department of Justice for possible criminal or civil enforcement actions The Department believes that this process, relying on the audit capabilities of the OIG and/or independent auditors, and the enforcement capabilities of both DOT and the Department of Justice, would meet Congress' intent that only meritorious claims be reimbursed. Under section 185, expenses necessitated by independent verification and auditing activities may be paid with funds appropriated in the Act. While the Department does not anticipate that the verification activities performed by its analysts would necessitate payment from the appropriated funds, the Department recognizes that the costs of an audit, particularly for larger claims, could be considerable. Therefore, the Department is proposing to retain the flexibility to recover the costs of audits from the amount of reimbursement that eligible applicants would have received if their claims did not necessitate audits in the first place. For example, if the cost to audit a questioned claim of $100,000 is $5,000, then the applicant would receive $95,000 in reimbursement once the Department determined that the payment was appropriate. Section 331.19 Who will approve reimbursement once an application has been received and a claim has been verified and/or audited? This part proposes to give the Assistant Secretary for Aviation and International Affairs authority to determine eligibility and authorize reimbursement under the Act. Expertise on aviation policy resides with the Assistant Secretary for Aviation and International Affairs. This official has administered similar programs and is supported by a professional staff of aviation analysts and economists who are knowledgeable on such matters. Subpart B—Application Procedures Section 331.21 What information must operators or providers submit in their applications for reimbursement? In order to calculate and support a reimbursement claim, the Department proposes that an applicant complete the form which is found in Appendix A and submit the information it requires, including eligibility information and a summary calculation of the financial data supporting an applicant's claim for reimbursement, as shown in the following table (which is incorporated into Appendix A): Financial Data Column A Pre 9-11-01 Forecast or after-the-fact estimate for the eligible period* Column B Actual results for the eligible period* Column C Column A minus Column B Line 1—Total Operating Revenues Line 2—Total Operating Expenses Line 3—Total Operating Income or

(Loss)Line 4—Non-operating Revenue Line 5—Non-operating Expenses Line 6—Non-operating income(loss) Total—Line 3 plus line 6 The Department proposes in the Background and Eligibility Form to require the submission of an applicant's profit and loss statements, or such financial records generated as a routine matter for the use of management, for the years 1999 through 2005. Similarly, the Department proposes to require the submission of actual forecasts that applicants prepared for both these baseline periods and for any part of the reimbursement periods. The Department further proposes that, where appropriate, after-the-fact forecasts should be allowed. After-the-fact forecasts are discussed in more detail under subsection

(f)of this section. All financial records submitted in support on an application would be subject to the same certification requirement as the other information that is submitted through the Background and Eligibility Form. These data would enable the Department to establish baseline business trends and forecast experience for applicants prior to the September 11, 2001 terrorist attacks, which would be used as benchmarks to test the reasonableness of the applicants' reimbursement claims. The Department would use the applicant's actual and forecast results for the appropriate reimbursement period, together with such sources as macroeconomic data, individualized applicant business trend information, and the applicant's explanations, to make its determinations on the payment of claims. In calculating their revenues and expenses, the Department proposes that applicants utilize already existing financial data, supplemented as necessary by footnotes or explanations pertinent to the reimbursement application. Financial schedules, such as income statements, statements of operations, forecasts of operating results, budget documents or other similar information, may be used as the reference sources for completing the table in Appendix A. The Department suggests that these documents be a starting point under the assumption that most businesses maintain financial statements as a routine part of doing business, or for other reasons such as income tax preparation, loan applications, or contract negotiations. The Department believes that use of these documents, rather than requiring the completion of that detailed new forms, would facilitate the reimbursement process, especially for the smaller companies typically engaged in fewer activities. As the eligibility periods, for the most part, begin and end on days other than the first or last days of the month, quarter or year, the Department proposes in subsection

(b)that data from already existing financial statements would be adjusted, on a pro-rata basis, to comply with the eligibility periods. The Department anticipates that some applicants may have prepared multiple forecasts for the same time period of time. Therefore, the Department proposes in subsection

(c)that, if multiple forecasts were prepared, applicants utilize the one most recently approved, prior to September 11, 2001, so long as it was otherwise objective and reliable. In subsection (d), the Department proposes that information provided by applicants for use in the October 2005 DOT study should not be merely recited for purposes of the application. While the October 2005 DOT study noted that the losses it reported were likely to “reasonably approximate” the general aviation leaseholder's total losses (at least through January 23, 2004), it also advised that the financial data establishing the basis for a payment should “be subject to a more rigorous verification regime.” The Department proposes that applicants not simply rely on the estimates as then reported; if they do, the Department would have the right to reject their claim or forward it for full verification follow-up, including audit. Applicants who reiterate the losses reported in the October 2005 DOT study should make fully transparent the bases for those estimates, and provide a basis for testing the reasonableness of the estimates by supplying supporting data. In subsection

(e)the Department proposes that failure to complete the required information constitutes grounds for a rejection. This subsection would adhere to Congress's desire that the appropriated funds be expended prudently. The proposed language in subsection

(e)leaves the Department discretion in determining whether or not the missing information warrants a rejection. Subsection

(e)also seeks to clarify that the burden to substantiate claims should rest with applicants and not the Department. Subsection

(f)proposes to allow the use of “after-the-fact” forecasts. If pre-September 11, 2001 forecasts were not prepared at all, or prepared for less than the full reimbursement period, the rule would require applicants to make a good faith effort to quantify their expected operating results for the part of the reimbursement period not covered by its actual forecasts. The Department expects that not all of the fixed-based general aviation operators and providers of general aviation ground support services routinely forecasted projected revenues and expenses, (and, for those that did, they may have done so only in a rough or summary “year-end” fashion that would not permit ready calculations of losses due to September 11-related events). Further, the losses eligible for reimbursement here can extend over several years, for which reliable forecasts may not be available, and even when firms utilize advanced forecasting methods, there is necessarily a range of reasonableness in any such exercise that makes precise determinations of loss impossible. However, the Department believes that Congress readily understood that precise calculations of losses cannot be practically obtained, and that good-faith, carefully considered estimates would need to be used in determining losses, with those estimates subject to independent verification and audit to prevent overreaching and fraud. In subsection (g), the Department proposes that the Background and Eligibility Form, along with supporting financial documents, be certified as having been prepared under the supervision of the applicant's President, Chief Executive Officer, or Chief Operating Officer, and as being true and accurate to the best of his or her knowledge. Subsection

(g)further proposes that applicants acknowledge in their certifications that the submission of false or deceptive data is punishable under law by fine and/or imprisonment. To assist the Department with verification of claims, and to facilitate any necessary audits, the Department proposes in subsection

(h)that applicants retain all materials that they relied upon to establish their claim for reimbursable losses. The Department proposes under subsection

(i)to seek information on other specific types of expenses, including mitigating expenses, lobbying expenses, and special expenses. In subsection (j), the Department proposes that if an applicant believes the release by the Department to the public of information provided by the applicant would cause substantial harm to the applicant's competitive position, the applicant may request that the Department hold such submissions confidential. In preference to “blanket” requests, confidentiality requests should be specific to particular data submitted, as it is very unlikely that all submitted data could cause competitive harm if released to the public. Section 331.23 In what format must applications be submitted? The Department proposes in subsection

(a)that the Background and Eligibility Form found at Appendix A be submitted in hardcopy format and, if possible, electronic format. The Department also proposes to make the Background and Eligibility Form available in electronic format. In order to facilitate the review and manipulation of financial data for verification purposes within the Department, subsection

(b)proposes that supporting financial records be submitted in electronic format. Under subsection (c), the Department proposes that faxes and e-mails not be accepted because of the difficulties they create in handling large volumes of documents. Section 331.25 To what address must operators or providers send their applications? In order to expedite the timely receipt and review of applications, the Department is proposing in subsection

(b)that applications be submitted via an express package service ( *e.g.* , Federal Express, DHL, UPS). Alternatively, applicants may wish to hand deliver applications to the Department. The Department would make arrangements to receive such packages in a method that would be consistent with current Departmental office security procedures. The Department proposes that the address stated in the rule be mandatory. Accordingly, the Department proposes in subsection

(c)to not accept applications sent elsewhere. Section 331.27 When are applications due under this part? Reimbursement is expected to provide potential applicants, particularly small entities, with significant relief. The Department expects that most, if not all, potential applicants are aware of the reimbursement available under this rule, and that they are in a position to quickly comply with its requirements in order to expedite their reimbursement payments. The Department would take steps to post all relevant information on its Web site and coordinate with the management at the five airports to ensure that all potential applicants are promptly advised of the issuance of the final rule. For the foregoing reasons, the Department proposes to expedite the time requirement for submitting applications. We believe that a period of 30 calendar days from the date of publication of the final rule provides sufficient time to complete and submit an application. The Department welcomes comment from potential applicants on the sufficiency of this proposed period. Subpart C—Set-Aside for Operators or Providers at Certain Airports Section 331.31 What funds are available to applicants under this subpart? The 2006 Appropriation Act provides that, from the full $17 million appropriated, an amount not to exceed $5 million shall be available on a pro-rata basis, if necessary, to fixed-based general aviation operators and providers of general aviation ground support services at the three Maryland airports—College Park, Potomac Airfield, and Washington Executive/Hyde Field. The Department tentatively construes this language as necessitating a separate totaling of the eligible losses incurred at these three airports. Section 331.33 Which operators and providers are eligible for the set-aside under this subpart? The Department reads the plain language of the Act to restrict eligibility under this subpart to fixed-based general aviation operators and providers of general aviation ground support services at the three Maryland airports—College Park, Potomac Airfield, and Washington Executive/Hyde Field. Section 331.35 What is the basis upon which operators and providers will be reimbursed through the set-aside under this subpart? For the $5 million set-aside for the three Maryland airports, the Department proposes to apply the same procedures set forth in subpart B of this part. The Department reads section 185 of the Act to require an additional procedure if total eligible losses at the three Maryland airports exceed $5 million. In the event that eligible losses at the three Maryland airports total more than $5 million, the Department proposes that a proportionate amount should be paid to each eligible entity. For the reasons set forth in Section 331.17, the Department proposes to deduct from an applicant's reimbursement amount the cost of any independent audit associated with a questioned claim, before distributing funds to the applicant. Regulatory Analyses and Notices This NPRM is nonsignificant for purposes of Executive Order 12866 and the Department of Transportation's Regulatory Policies and Procedures. The NPRM proposes procedures to provide reimbursement to eligible applicants from funds appropriated by Congress. The Department administers a number of programs entailing similar procedures. This NPRM therefore does not represent a significant departure from existing regulations and policy. Furthermore, once implemented, this rule would have only minimal cost impacts on regulated parties. Federalism This rule does not directly affect States, the relationship between the national government and the States, or the distribution of power among the national government and the States, such that consultation with States and local governments is required under Executive Order 13132. Regulatory Flexibility Act The Department certifies that this rule would not have significant economic effects on a substantial number of small entities. In the aggregate, the cost among all applicants for gathering information and submitting an application should range from $2,501 to $5,003. Paperwork Reduction Act This rule contains information collection requirements subject to the Paperwork Reduction Act of 1995, specifically the application documents that fixed-based general aviation operators and providers of general aviation ground support services must submit to the Department to obtain compensation. The title, description, and respondent description of the information collections are shown below as well as an estimate of the annual recordkeeping and periodic reporting burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. *Title:* Procedures (and Form) for Reimbursement of General Aviation Operators and Service Providers in Washington, DC Area. *Need for Information:* The information is required to administer the requirements of the Act. *Use of Information:* The Department of Transportation would use the data submitted by the fixed-based general aviation operators and providers of general aviation ground support services to determine their reimbursement for direct and incremental financial losses incurred while the airports were closed due to Federal Government actions taken after the terrorist attacks on September 11, 2001. *Frequency:* For this final rule, the Department would collect the information once from fix-based general aviation operators and providers of general aviation ground support services. *Respondents:* The respondents include an estimated 24 fixed-based general aviation operators and providers of general aviation ground support service. This estimate is based on the number of fixed-based general aviation operators and providers of general aviation ground support services identified in the October 2005 DOT study. *Burden Estimate:* Total applicant burden of between $2,501 and $5,003 based on a burden of between three

(3)and six

(6)hours per applicant and a weighted average cost per hour of $34.74. *Form(s):* The data would be collected on the Form entitled, “Background and Eligibility Information for Applicants Filing for Reimbursement Under Section 185 of Public Law 109-115,” and included at Appendix A to this part. *Average Burden Hours per Respondent:* A weighted average of four

(4)hours per application. The Department has requested approval from the Office of Management and Budget for this information collection. Other Statutes and Executive Orders There are a number of other statutes and Executive Orders that apply to the rulemaking process that the Department must consider in all rulemakings, but which the Department has determined are not sufficiently implicated by this NPRM to require further action. Specifically, this NPRM does not impact the human environment under the National Environmental Policy Act, does not concern constitutionally protected property rights such that Executive Order 12630 is implicated, does not involve policies with tribal implications such the Executive Order 13175 is invoked, does not concern civil justice reform under Executive Order 12988, does not involve the protection of children from environmental risks under Executive Order 13045, and will not result in expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Comment Period This rule concerns a small group of potential applicants and others who might be interested, and the Department believes that most, if not all, are aware of the provisions of the statute. The Department therefore concludes that 30 days is sufficient time for the receipt of comments from the public. List of Subjects in 14 CFR Part 331 Air transportation, Airports, Airspace, Claims, Grant programs, Reporting and recordkeeping requirements. Issued this 19th day of September, 2006, at Washington, DC. Maria Cino, Acting Secretary of Transportation. For the reasons set forth in the preamble, the Department proposes to add 14 CFR part 331 to read as follows: PART 331—PROCEDURES FOR REIMBURSEMENT OF GENERAL AVIATION OPERATORS AND SERVICE PROVIDERS IN THE WASHINGTON, DC AREA Subpart A—General Provisions 331.1 What is the purpose of this part? 331.3 What do the terms used in this part mean? 331.5 Who may apply for reimbursement under this part? 331.7 What losses will be reimbursed? 331.9 What funds will the Department distribute under this part? 331.11 What are the limits on reimbursement to operators or providers? 331.13 What is the eligible reimbursement period under this part? 331.15 How will other grants, subsidies, or incentives be treated by the Department? 331.17 How will the Department verify and audit claims under this part? 331.19 Who will approve reimbursement once an application has been received and a claim has been verified and/or audited? Subpart B—Application Procedures 331.21 What information must operators or providers submit in their applications for reimbursement? 331.23 In what format must applications be submitted? 331.25 To what address must operators or providers send their applications? 331.27 When are applications due under this part? Subpart C—Set-Aside for Operators and Providers at Certain Airports 331.31 What funds are available to applicants under this subpart? 331.33 Which operators and providers are eligible for the set-aside under this subpart? 331.35 What is the basis upon which operators and providers will be reimbursed through the set-aside under this subpart? Appendix A to Part 331—Background and Eligibility Information for Applicants Filing for Reimbursement under Section 185 of Public Law 109-115 Subpart A—General Provisions § 331.1 What is the purpose of this part? The purpose of this part is to establish procedures to implement section 185 of the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriation Act, 2006 (“the Act” or “the 2006 Appropriation Act”), Public Law 109-115, 119 Stat. 2396. Section 185 is intended to reimburse certain fixed-based general aviation operators or providers of general aviation ground support services at five airports in the Washington, DC metropolitan area for direct and incremental losses due to the actions of the Federal Government to close airports to general aviation operations following the terrorist attacks of September 11, 2001. § 331.3 What do the terms used in this part mean? The following terms apply to this part: *Airport* means Ronald Reagan Washington National Airport; College Park Airport in College Park, Maryland; Potomac Airfield in Fort Washington, Maryland; Washington Executive/Hyde Field in Clinton, Maryland; or Washington South Capitol Street Heliport in Washington, DC. *Closed* or *closure* means the period of time until the first general aviation operations were generally permitted at Ronald Reagan Washington National Airport; until November 30, 2005 at Washington South Capitol Street Heliport; or the earliest that transient traffic was generally permitted to return to the three Maryland airports. *Department* means the U.S. Department of Transportation and all its components, including the Office of the Secretary

(OST)and the Federal Aviation Administration (FAA). *Direct and incremental losses* means losses incurred by a fixed-based general aviation operator or a provider of general aviation ground support services as a result of the Federal Government's closure of an airport following the terrorist attacks against the United States on September 11, 2001. These losses do not include any losses that would have been incurred had the terrorist attacks on the United States of September 11, 2001 not occurred. *Fixed-based general aviation operator* means an entity based at a particular airport that provides services to and support for general aviation activities, including the provision of fuel and oil, aircraft storage and tie-down, airframe and engine maintenance, avionics repair, baggage handling, deicing, and the provision of air charter services. The term does not include an entity that exclusively provides products for general aviation activities ( *e.g.* a parts supplier). *Forecast or forecast data* means a projection of revenue and expenses during the eligible reimbursement period had the attacks of September 11, 2001 not occurred. *Incurred means* to become liable or subject to (as in “to incur a debt”). *Loss* means something that is gone and cannot be recovered. *Provider of general aviation ground support services* means an entity that does not qualify as a fixed-based general aviation operator but operates at a particular airport and supplies services, either exclusively or predominantly, to support general aviation activities, including flight schools or security services. The term does not include an entity that exclusively provides products for general aviation activities ( *e.g.* a parts or equipment supplier). *You* means fixed-based general aviation operators or providers of general aviation ground support services. § 331.5 Who may apply for reimbursement under this part? If you are an eligible fixed-based general aviation operator or provider of general aviation ground support services (collectively “operators or providers”) at an eligible airport or airports in the Washington, DC area, you may apply for reimbursement for direct and incremental losses under this part. If you are applying for reimbursement based on losses at more than one airport, then you must submit separate applications for each airport. For example, if you are a provider of general aviation ground support services at Ronald Reagan Washington National Airport and Potomac Airfield in Fort Washington, Maryland, you must submit two separate applications. § 331.7 What losses will be reimbursed?

(a)You may be reimbursed for the difference between the net income you actually or reasonably forecast for the eligible reimbursement period and the actual net income you earned during the eligible reimbursement period. If you did not forecast net income for the eligible reimbursement period or any part of the eligible reimbursement period, you may be reimbursed for the difference between what you can show you would have reasonably expected to earn as net income during that period had the airport at which you are or were an operator or provider not closed, and the actual net income you earned during the eligible reimbursement period.

(b)If you make a claim for extraordinary, non-recurring, or unusual adjustments, you must demonstrate that such adjustments were fully attributable to the Federal Government's closure of the five Washington-area airports, are in conformity with Generally Accepted Accounting Principles, were fully borne within the statutory reimbursement period, that the loss was not discretionary in nature, and that reimbursement would not be duplicative of other relief.

(c)A temporary loss that you recovered after the attacks of September 11, 2001, or that you expect to recover, is not eligible for reimbursement under this part. You will not be reimbursed for those losses incurred through your own fault, negligence, or violation of law, or because of the actions of a third party ( *e.g.* an airport).

(d)If you engaged in any non-aviation income-producing activities after September 11, 2001, such income must be reported under question number 5 on the Background and Eligibility Form.

(e)So called “cost savings” claims ( *i.e.* increasing the claimed amount of reimbursement by reducing actual expenses to “adjust” for savings in expense categories asserted not to have been affected by the terrorist attacks) are not eligible for reimbursement.

(f)You cannot claim reimbursement for the lost time value of money ( *i.e.* interest on lost profits for the period of time the funds were not available for your use).

(g)Lobbying fees and attorneys' fees are not eligible for reimbursement.

(h)Your calculation of revenues, expenses and income must be based on financial documents maintained in the ordinary course of business that were prepared for the eligible reimbursement period, such as income statements, statements of operations, profit-and-loss statements, operating forecasts, budget documents or other similar documents. § 331.9 What funds will the Department distribute under this part? The Department will distribute the full amount of reimbursement it determines is payable to you under section 185 of the Act. § 331.11 What are the limits on reimbursement to operators or providers?

(a)You are eligible to receive reimbursement subject to the subpart C set-aside for eligible operators or providers at College Park Airport in College Park, Maryland; Potomac Airfield in Fort Washington, Maryland; and Washington Executive/Hyde Field in Clinton, Maryland. The amount available to you as reimbursement may be reduced to cover the cost of independent verification and auditing, as set forth in Section 331.17.

(b)If you receive more reimbursement than the amount to which you are entitled under section 185 of the Act or the subpart C set-aside, the Department will notify you of the basis for the determination and the amount that you must repay to the Department. The Department will follow collection procedures under the Federal Claims Collection Act of 1966 (31 U.S.C. 3701 *et seq.* ) to the extent required by law, in recovering such overpayments.

(c)Payment will not be made to you until you have agreed to release the United States Government for all claims for financial losses resulting from the closure of the five airports in the Washington, DC area. The Department will provide a release form to applicants that must be completed before any payment is made under Section 185. § 331.13 What is the eligible reimbursement period under this part? The eligible reimbursement period for direct and incremental losses differs by airport:

(a)For Ronald Reagan Washington National Airport the eligibility period for reimbursement is from September 11, 2001 until October 18, 2005.

(b)For College Park Airport in College Park, Maryland, the eligibility period for reimbursement is from September 11, 2001 until February 13, 2005.

(c)For Potomac Airfield in Fort Washington, Maryland, the eligibility period for reimbursement is from September 11, 2001 until February 13, 2005.

(d)For the Washington South Capitol Street Heliport in Washington, DC, the eligibility period for reimbursement is from September 11, 2001 to November 30, 2005.

(e)For Washington Executive/Hyde Field in Clinton, Maryland, there are two eligibility periods for reimbursement. The first period is from September 11, 2001 until May 16, 2002. The second period is from September 29, 2002 until February 13, 2005. § 331.15 How will other grants, subsidies, or incentives be treated by the Department? Grants, subsidies, or incentives that you have received during the eligible reimbursement period, either directly or indirectly, from Federal, State, and local entities, to reimburse you for the cost of operations and capital improvements associated with implementing security programs, or maintaining or providing general aviation services and facilities, will be considered revenues and should be reported as such on your application. § 331.17 How will the Department verify and audit claims under this part? Departmental staff will initially review each claim in detail, and contact you should questions arise. If they are unable to satisfactorily resolve the matter following consultation with you, your claim will be forwarded to the Office of the Inspector General, or another independent auditor, for verification and, if necessary, an audit. In addition, the Department may consult with, or make referrals to, other government agencies, including the Department of Justice. § 331.19 Who will approve reimbursement once an application has been received and a claim has been verified and/or audited? The Assistant Secretary of Aviation and International Affairs will make a final determination of your eligibility and authorize reimbursement to you. Subpart B—Application Procedures § 331.21 What information must operators or providers submit in their applications for reimbursement?

(a)You must submit the form entitled *Background and Eligibility Information for Applicants Filing for Compensation Under Section 185 of Public Law 109-115* (“Background and Eligibility Form”), which is found in Appendix A to this part, along with the profit and loss statements, forecasts, or other financial documents (collectively “supporting financial documents”) generated as a routine matter for the purposes of managing your business, and relied upon in completing your application.

(b)To the extent that your calculation of revenues, expenses and incomes are based on monthly records, you must adjust your calculation, on a pro-rata basis, to conform to the eligibility period. For example, if you utilize a monthly financial record to prepare a calculation of your September 2001 revenues, you should apportion your results for the period between September 11 and September 30, 2001.

(c)If multiple forecasts were prepared for the same period, you must utilize the one most recently approved, prior to September 11, 2001, so long as it is otherwise objective and reliable.

(d)If you provided information to the Department as part of its study entitled *Estimated Financial Losses to Selected General Aviation Entities in the Washington, DC Area (Oct. 2005)* (“2005 General Aviation Study”), you should not simply reiterate the same data provided to the Department at that time; you must provide the most current information that is available to you. If you do reiterate that same data provided to the Department for the 2005 General Aviation Study, the basis for your estimates must be verifiable from the supporting financial documents that you submit with your application.

(e)Failure to include all required information will delay consideration of your application by the Department and may result in a rejection. You have the burden to document and substantiate your claim; the Department will provide reimbursement only if it is satisfied that payment is fully supported.

(f)If, prior to September 11, 2001, you did not prepare a forecast covering the entire eligible reimbursement period, or if the forecast you completed is not relevant to the information required by this part, you may submit an “after-the-fact” estimate of the amount that you would have reasonably expected to accrue as net income had the airport at which you are or were an operator or provider not closed. “After-the-fact” estimates must consider items particular to your business, including labor agreements and the terms of contracts in place at the time of the eligible reimbursement period, short-term or long-term budget documents, documents submitted in support of applications for loans or lines-of-credit, and other similar documents. You must explain the methodology that you used when preparing your reconstructed forecast.

(g)You must certify that the information on the Background and Eligibility Form and all of the supporting financial documents that you are submitting is true and accurate under penalty of law and that you acknowledge that falsification of information may result in prosecution and the imposition of a fine and/or imprisonment.

(h)You must retain all materials you relied upon to establish your claim for losses.

(i)You must provide mitigating expenses, lobbying expenses, and special expenses, as well as extraordinary adjustments, as instructed on the Background and Eligibility Form.

(j)If you believe that the release of financial information provided to the Department in support of your application would cause you substantial harm if released by the Department to the public upon an appropriately made request, you may request that the Department hold portions of your application as confidential. Your request must specify the portions of your application that should be held by the Department as confidential, and you must provide an explanation as to how the release of such information would cause you substantial harm. § 331.23 In what format must applications be submitted?

(a)Appendix A of this part must be submitted in hardcopy format and, if possible, in electronic format. The Department has made available an electronic version of this form at the following Web site: *http://ostpxweb.dot.gov/aviation/index.html.* (Click on “Programs.”)

(b)All supporting financial documents must be submitted in electronic format utilizing a 3.5″ inch floppy disk, compact disk, or flash memory stick.

(c)Faxed and e-mailed applications are not acceptable and will not be considered. § 331.25 To what address must operators or providers send their applications?

(a)You must submit your application and all required supporting information, to the following address: U.S. Department of Transportation, Aviation Relief Desk (X-50), 400 7th Street, SW., Washington, DC 20590.

(b)Your application must be submitted via courier or an express package service, such as Federal Express, UPS, or DHL.

(c)If complete applications are not submitted to the address in paragraph

(a)of this section, they will not be accepted by the Department. § 331.27 When are applications due under this part? You must submit your application within 30 calendar days from the effective date of the final rule. Subpart C—Set-Aside for Operators and Providers at Certain Airports § 331.31 What funds are available to applicants under this subpart? The Department is setting aside a sum of $5 million to reimburse eligible operators or providers, as set forth in section 185 of the Act. § 331.33 Which operators and providers are eligible for the set-aside under this subpart? Operators or providers at the following three airports during the eligible reimbursement periods are eligible for the set-aside:

(a)College Park Airport in College Park, Maryland;

(b)Potomac Airfield in Fort Washington, Maryland; and

(c)Washington Executive/Hyde Field in Clinton, Maryland. § 331.35 What is the basis upon which operators or providers will be reimbursed through the set-aside under this subpart? Operators or providers eligible under this subpart will be reimbursed pursuant to the same procedures set forth in subpart B of this part. If total losses for all eligible claims at the three airports set forth in § 331.31 of this part are less than $5 million, then such claims will be paid in full. If the total losses for all eligible claims at the three airports set forth in § 331.31 of this part exceed $5 million, then the total losses will be divided on a pro rata basis, and a proportionate amount for each claim will be distributed to applicants. BILLING CODE 4910-9X-P EP04OC06.000 EP04OC06.001 EP04OC06.002 EP04OC06.003 EP04OC06.004 EP04OC06.005 EP04OC06.006 EP04OC06.007 EP04OC06.008 EP04OC06.009 Instructions for Completing Background and Eligibility Information for Applicants Filing for Reimbursement Under Section 185 of Public Law 109-115 1. Applicant name This is the person or legal entity who undertakes to act as a fixed-based general aviation operator or who provides general aviation ground support services, directly or by a lease or any other arrangement. 2. Applicant address The applicant address is that location within the local tax authority jurisdiction that is held out to the public as the business or airport address. 3. Airport of operation on September 11, 2001 This question asks the applicant to identify those airports in the Washington, DC area where it provided either fixed-based general aviation services or general aviation ground support services on September 11, 2001. Check as many airports as you served on September 11, 2001. 4. Briefly describe the nature of the applicant's operations as a fixed-based general aviation operator or a provider of general aviation ground support services at each airport during the eligible period for reimbursement. You should describe the specific fixed-based general aviation services or general aviation ground support services that you provided at each of the airports. 5. Did the applicant or any part of it conduct non-fixed-based general aviation activities or provide non-aviation ground support services during the 2001 through 2005 period? Check “Yes” if you conducted any non-fixed-based general aviation activities or provided non-aviation ground support services during the 2001 through 2005 period. Describe the activities that you undertook during this period that did not directly support general aviation at the airport. 6. Briefly describe how the events of September 11, 2001 affected the applicant's operations as a fixed-based general aviation operator or a provider of general aviation ground support services. You should describe how the level and conduct of your operations as a fixed-based general aviation operator or your operations as a provider of general aviation ground support services were changed as a result of September 11, 2001 and the ensuing security restrictions that were imposed by the Federal Government. 7. Did the applicant undertake any actions to lessen or offset the impact of the Federal Government's closure of airports in the Washington, DC area following the attacks of September 11, 2001? Check “Yes” if you attempted to minimize the impact that the terrorist attacks of September 11, 2001, had on your business. Briefly describe your actions and the effect that they had on you. Include any activities or services undertaken after September 11, 2001 that did not provide support for general aviation but that did provide revenues to sustain your business. 8. Has the applicant filed income taxes for any period between 1999 and 2005? Check “Yes” if you filed income taxes during this period, and indicate the filing status under which you filed your income tax returns. 9. Baseline Financial Data and Forecasts. Attach to this Appendix copies of your profit and loss statements, or such financial records as you generated as a routine matter for the use of management, for the periods 1999 through 2005, that show your actual financial results. Similarly, attach copies of any actual forecasts that you prepared for both these baseline periods and for any part of the reimbursement periods that were prepared prior to September 11, 2001. This question directs applicants to provide the Department with certain financial documents in order to verify and substantiate their claims. Documents that you have already prepared should be sufficient. When necessary, you should supplement these documents with footnotes or explanations that are pertinent to your reimbursement claim. The financial data may include such documents as income statements, statements of operations, forecasts of operating results, income projections, pro forma budget projections, budget documents, tax preparation support material, information presented in investment perspectives and registrations, or other similar information that in whole or in part cover the period from 1999 through 2005. 10. By regulation, the requested amount of reimbursement claimed below must be based on a comparison of actual operating results (revenues, expenses and profits or losses) with a company forecast of operating results that existed prior to September 11, 2001 if such a forecast was actually prepared. If the applicant did not prepare any such pre-September 11 forecasts, or prepared them for less than the full reimbursement period, an after-the-fact estimate of what the applicant can document it reasonably expected to earn during the remaining eligible period may be submitted. If such an after-the-fact estimate is used, describe below the period for which it applies and the methodology that was used to determine it. Indicate here whether an “after-the-fact” forecast was prepared, and briefly describe the methodology used in preparing the forecast. Your methodology must take into account items relevant to your businesses, such as the terms of existing contracts, short-term or long-term budget documents, documents submitted in support of applications for loans or lines-of-credit, existing labor agreements and leasing agreements, and other similar types of documents. In preparing your “after-the-fact” forecast, you may wish to consult a July 2001 report prepared for the FAA, entitled *Forecasting Aviation Activity by Airport.* This report was prepared by GRA, Incorporated (GRA), for the FAA's Office of Aviation Policy Plans Statistical and Forecast Branch (APO-110). While the Department recognizes that fixed based general aviation operators and providers of general aviation ground support services are different entities from airports, the Department believes that this document offers relevant guidance to applicants who do not prepare forecasts as part of regular business operations. This July 2001 report may be accessed at: *http://www.faa.gov/data_statistics/aviation_data_statistics/forecasting/media/AF1.doc.* The July 2001 report explains the basic steps usually utilized in preparing forecasts, including: Identifying parameters and measures to forecast; collecting forecast information of expected revenues or expenses, including budgets; gathering and evaluating data; selecting a forecast method (such as regression and trend analysis, share analysis, or exponential smoothing); applying methods and evaluating results; and summarizing and documenting the results. Additionally, data sources to assist you in making adjustments to your forecast are available from the Department's Web site at *http://ostpxweb.dot.gov/aviation/index.html* (Click on “Programs”). The Department notes that, while it can answer questions for applicants that might arise while applicants develop forecasts, the Department is not in a position to propose or develop projections for applicants. 11. Reimbursement Claim For purposes of completing the information in the reimbursement claim table, total operating revenues (line 1) include the inflow of funds to the applicant resulting from the sale of goods and services related to the activities of a fixed-based operator or a provider of general aviation services. Examples include, but are not limited to monetary amounts or value received for providing: Aircraft fuel or oil; delivery of aircraft fuel or oil; transient and long-term storing, tie down parking and sheltering of aircraft; maintenance, inspection, checking, upgrading of aircraft and aircraft related equipment and for polishing and cleaning property and equipment; for providing flight instruction services and materials; and miscellaneous items for purchase such as maps, books, flight clothing, sectional charts, devices and parts for aircraft, food services, hospitality services, auto rentals, aircraft custodial and sanitation services. Total operating expenses (line 2) include the cost to the applicant of providing the goods and services related to the activities of a fixed-based operator or a provider of general aviation services. Examples include, but are not limited to: Labor costs for all categories of employees (including compensation, vacation and sick leave pay, medical benefits, workmen's compensation contributions, accruals or annuity payments to pension funds, training reimbursements, professional fees, licensing fees, educational or recreational activities for the benefit of the employee, stock incentives, etc.); the cost of fuel and oil including nonrefundable aircraft fuel and oil taxes; insurance; flight and ground equipment parts; general services purchased for flight or ground equipment maintenance; depreciation of flight and ground equipment; amortization of capitalized leases for flight and ground equipment; provisions for obsolescence and deterioration of spare parts; and rental expenses of flight and ground equipment. Advertising, promotion and publicity expenses, landing fees, clearance, customs and duties, utilities, bookkeeping, accounting, recordkeeping and legal services are also part of the total operating expenses. For reasons set forth elsewhere in section 331.7 of this Part, you may not include lobbying expenses. Total operating income or loss is calculated by subtracting the total operating expenses from the total operating revenues. If the total operating revenues exceed the total operating expenses, the calculation results in a total operating income. If the total operating expenses exceed the total operating revenues, the calculation results in a total operating loss. Non-operating revenue and expenses include: Income and loss incident to commercial ventures not inherently related to the direct provision of fixed-based operator services or general aviation ground support services; other revenues and expenses attributable to financing or other activities that are extraneous to and not an integral part of general aviation services; and special recurrent items of a nonperiod nature. Examples of non-operating income include, but are not limited to: interest income; foreign exchange gains; equity income of an investor controlled company; intercompany transactions; dividend income; net unrealized gains on marketable equity securities; and capital gains. Examples of non-operating expenses include, but are not limited to: interest on long-term debt and capital leases; interest on short-term debt; imputed interest capitalized; amortization of discount and expense on debt; foreign exchange losses; fines or penalties imposed by governmental authorities; costs related to property held for future use; donations to charities, social and community welfare purposes; losses on reacquired and retired or resold debt securities; and losses on uncollectible non-operating receivables. Non-operating income is the result of subtracting the non-operating expenses from the non-operating revenues. Total income in the sum of the total operating income or (loss)(line 3) plus line 6 non-operating income. The difference between column A and B is the basis for column C. This constitutes the total amount of your claim for reimbursement. As the eligibility periods, for the most part, begin and end on days other than the first or last days of the month, quarter or year, data from already existing financial statements must be adjusted, on a pro-rata basis, to reflect the eligibility periods. For example, the period of eligibility for all applicants begins on September 11, 2001 and therefore, the only time period during the month of September that is eligible for reimbursement is September 11 through September 30, a period of 20 days. Applicants should be prepared to show both how they apportioned such financial data into the reimbursement periods, and why they chose the apportionment approach used. Applicants can then use these estimates for the specified periods at the beginning and end of the eligible period to add to the financial amounts for 2002, 2003, and 2004 to calculate the total amounts sought in Appendix A. 12. Has the applicant or any of its subsidiaries or affiliates received grants, subsidies, incentives or similar payments from local, state, or Federal governmental entities in support of the security, maintenance and provision of general aviation services and facilities furnished in response to the events of September 11, 2001? (This includes payments under the Aviation and Transportation Security Act of 2001 (Public Law 107-38) and the Airport Improvement Program under the Airport and Airway Improvement Act of 1982 (Public Law 97-248).) This question requires that you disclose all grants, subsidies, or incentives that you received during the eligible reimbursement period, either directly or indirectly, from Federal, State, and local entities, to reimburse you for the cost of operations and capital improvements associated with implementing security programs, or maintaining or providing general aviation services and facilities. 13. Has the applicant or any of its subsidiaries or affiliates incurred lobbying expenses, mitigating expenses, or special expenses (as described in the section captioned “What information must operators or providers submit in their applications for reimbursement?”), or extraordinary adjustments. Check “Yes” if you incurred any such expenses or experienced any such adjustments. You must briefly describe the nature of such expenses and adjustments, including the amounts. Additionally, you must indicate whether or not such expenses or adjustments have been included in or excluded from the totals in the table at item number 11. Lobbying includes any amount paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress. Mitigating expenses include the utilization of property, the provision of services and the sale of goods that were undertaken to mitigate losses arising from the Federal Government's closure of airports attendant to the September 11, 2001 attack. These could include expenses incurred for the provision of services and sale of goods moved from restricted airports to unrestricted airports or compensation for non-aviation oriented goods and services provided at restricted airports. Mitigating expenses may also include expenses for aviation-related fixed assets or capital utilized outside of the restricted airport. Special expenses include, but are not limited to, moving expenses, additional security equipment and facilities, and loss on sale of assets that arose from the direct imposition of restrictions during the period September 11, 2001 through the applicable eligible date. Any item reported as Special Expenses shall not also be expensed in other expense categories that are reflected in the calculation of the reimbursement claim. Details regarding special expenses should be noted in footnotes. Extraordinary adjustments are events or transactions that are material to your business and unusual in nature and infrequent in occurrence. 14. Certification You must certify that all information contained on the Background and Eligibility Form *and* the documents submitted in support of your application ( *e.g.* profit and loss statements, actual forecasts, after-the-fact forecasts, etc.) are accurate. This certification is made under penalty of law. Falsification may be grounds for monetary and/or criminal sanctions. This certification must be made by a company CEO, COO, or CFO. [FR Doc. 06-8250 Filed 10-3-06; 8:45 am]

Connectionstraces to 66

Traces to 66 documents