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

§
Marginalia
Code · REGISTER · 2006-10-27 · PROPOSED RULES · Agricultural Agricultural Marketing Service NOTICES Committees; establishment, renewal, termination, etc.: Peanut Standards Board, E6-18041 Grants and cooperative agreements; availability, etc.: Feder · Unknown

Unknown. Interim final rule with request for comments

71,037 words·~323 min read·/register/2006/10/27/06-8908

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-2006-10-27.xml --- 71 208 Friday, October 27, 2006 Contents Agricultural Agricultural Marketing Service NOTICES Committees; establishment, renewal, termination, etc.: Peanut Standards Board, E6-18041 Grants and cooperative agreements; availability, etc.: Federal-State Marketing Improvement Program, E6-18040 Agriculture Agriculture Department See Agricultural Marketing Service See Animal and Plant Health Inspection Service See Forest Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18043 Animal Animal and Plant Health Inspection Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18042 Antitrust Antitrust Division NOTICES National cooperative research notifications:
DVD Copy Control Association, 06-8912 Radio Work Order Collaboration, 06-8911 Southwest Research Institute, 06-8913 SwRI Biodiesel Fuel/Water Separation Cooperative R&D Program, 06-8914 Antitrust Antitrust Modernization Commission NOTICES Meetings, E6-18000 Army Army Department See Engineers Corps NOTICES Patent licenses; non-exclusive, exclusive, or partially exclusive: ChemImage Corp.; biological materials license, 06-8937 Senior Executive Service Performance Review Board; membership, 06-8935 Blind Blind or Severely Disabled, Committee for Purchase From People Who Are See Committee for Purchase From People Who Are Blind or Severely Disabled Centers Centers for Disease Control and Prevention NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18011, E6-18012, E6-18013, E6-18014 Meetings:
Disease, Disability, and Injury Prevention and Control Special Emphasis Panel, E6-18005 National Center for Environmental Health/Agency for Toxic Substances and Disease Registry— Scientific Counselors Board, E6-18006 Centers Centers for Medicare & Medicaid Services PROPOSED RULES Medicare and Medicaid: Long term care facilities; fire safety requirements; automatic sprinkler systems, E6-17911 NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-17909, E6-17910 Medicare and Medicaid:
Medicare Advantage Program; deeming authority applications, determinations, etc.— Accreditation Association for Ambulatory Health Care, Inc., health maintenance organizations, and local preferred provider organizations, E6-18044 Meetings: Medicare Coverage Advisory Committee, E6-18058 Practicing Physicians Advisory Council, E6-17386 Children Children and Families Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 06-8941, 06-8942, 06-8943, 06-8944 Coast Guard Coast Guard PROPOSED RULES Drawbridge operations:
Oregon, E6-17971 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18003, E6-18004 Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement list; additions and deletions, E6-18028, E6-18029 CITA Committee for the Implementation of Textile Agreements NOTICES Cotton, wool, and man-made textiles:
China, E6-18053 Customs Customs and Border Protection Bureau RULES Automated Commercial Environment Truck Manifest System; advance electronic truck cargo information requirement; compliance sequence, E6-17998 Defense Defense Department See Army Department See Engineers Corps RULES Freedom of Information Act Program: For official use only; CFR subpart removed, 06-8908 NOTICES Committees; establishment, renewal, termination, etc.: Defense Health Board et al., 06-8910 Meetings: Military Personnel Testing Advisory Committee, 06-8907 Uniformed Services University of Health Sciences Board of Regents, 06-8909 Employment Employment and Training Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18030 Energy Energy Department See Federal Energy Regulatory Commission Engineers Engineers Corps NOTICES Environmental statements; availability, etc.:
Beaufort County, NC; phosphate mine operation continuation; correction, C6-8812 Logan County, WV; Mingo Logan's Spruce No. 1 Mine; construction and operation, 06-8938 Environmental statements; notice of intent: Lake Sidney Lanier/Buford Dam, GA; interim water storage contracts Public scoping meetings, 06-8936 Portland, OR; Lower Willamette River Dredged Material Management Plan, 06-8934 EPA Environmental Protection Agency NOTICES Environmental statements; availability, etc.: Agency comment availability, E6-18019 Agency weekly receipts, E6-18018 Meetings:
FIFRA Scientific Advisory Panel, E6-18036 Pesticide, food, and feed additive petitions: Interregional Research Project (No.4), E6-18033 Pesticide registration, cancellation, etc.: Organic arsenical herbicides, E6-18035 Superfund; response and remedial actions, proposed settlements, etc.: Terrero Mine Site, NM, E6-18020 Executive Executive Office of the President See Trade Representative, Office of United States FAA Federal Aviation Administration RULES Airworthiness directives:
Airbus, E6-17657, E6-17661, E6-17747 Air Tractor, Inc., E6-17828 Boeing, E6-17656, E6-17941 EADS SOCATA, E6-17930 Hartzell Propeller Inc., E6-17925 Schempp-Hirth GmbH & Co., E6-17870 Various Aircraft Equipped With Honeywell Primus II integrated navigation units, E6-17658 PROPOSED RULES Class E airspace, 06-8891 Federal Energy Federal Energy Regulatory Commission RULES Natural gas companies (Natural Gas Act): Energy Policy Act of 2005; implementation— Natural gas project applications; coordination of Federal authorization processing and complete consolidated records maintenance, E6-18025 Federal Housing Federal Housing Enterprise Oversight Office RULES Safety and soundness:
Record retention requirements, E6-18034 Federal Railroad Federal Railroad Administration RULES Occupational noise exposure for railroad operating employees, 06-8612 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies: Change in bank control, E6-18016 Formations, acquisitions, and mergers, E6-18015 Fish Fish and Wildlife Service RULES Endangered and threatened species: Critical habitat designations— Perdido Key beach mouse, etc.; correction, C6-8481 Forest Forest Service NOTICES Environmental statements; notice of intent:
Black Hills National Forest, SD, 06-8898 Recreation fee areas: Ocala National Forest, FL; designated off-highway vehicle trail system permits, 06-8929 Health Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See Children and Families Administration See National Institutes of Health Homeland Homeland Security Department See Coast Guard See Customs and Border Protection Bureau Housing Housing and Urban Development Department See Federal Housing Enterprise Oversight Office NOTICES Grants and cooperative agreements; availability, etc.:
Homeless assistance; excess and surplus Federal properties, E6-17817 Interior Interior Department See Fish and Wildlife Service See Land Management Bureau See National Park Service IRS Internal Revenue Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-17986 International International Trade Administration NOTICES Antidumping: Canned pineapple fruit from— Thailand, E6-18055 Glycine from— China, E6-18049 *Applications, hearings, determinations, etc.:* California Institute of Technology, et al., E6-18048 International International Trade Commission NOTICES Meetings;
Sunshine Act, 06-8957 Justice Justice Department See Antitrust Division See Prisons Bureau Labor Labor Department See Employment and Training Administration See Occupational Safety and Health Administration Land Land Management Bureau NOTICES Coal leases, exploration licenses, etc.: Wyoming, E6-18064 Environmental statements; availability, etc.: Coeur d’Alene Field Office-administered public lands, ID; resource management plan, 06-8862 Meetings: Resource Advisory Councils— Dakotas, E6-18010 Realty actions; sales, leases, etc.:
Idaho, E6-18008 Merit Merit Systems Protection Board NOTICES Senior Executive Service Performance Review Board; membership, E6-18037 NASA National Aeronautics and Space Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18054 Patent licenses; non-exclusive, exclusive, or partially exclusive: Kolon Industries, Inc., E6-18056 National Credit National Credit Union Administration RULES Credit unions: Organization and operations— General lending maturity limit and other financial services, E6-17835 Suspicious activity reports; filing requirements, E6-17838 NIH National Institutes of Health NOTICES Meetings:
National Heart, Lung, and Blood Institute, 06-8924, 06-8925, 06-8926 National Institute of Arthritis and Musculoskeletal and Skin Diseases, 06-8922 National Institute of Dental and Craniofacial Research, 06-8918 National Institute of Environmental Health Sciences, 06-8919, 06-8920 National Institute of General Medical Sciences, 06-8916 National Institute of Mental Health, 06-8921 National Institute of Neurological Disorders and Stroke, 06-8917 Scientific Review Center, 06-8923 NOAA National Oceanic and Atmospheric Administration PROPOSED RULES Fishery conservation and management:
Northeastern United States fisheries— Summer flounder, scup, and black sea bass, 06-8932 NOTICES Meetings: New England Fishery Management Council, E6-18026 Pacific Fishery Management Council, E6-18031 National Park National Park Service NOTICES Meetings: Route 66 Corridor Preservation Program Advisory Council, 06-8960 Nuclear Nuclear Regulatory Commission PROPOSED RULES Production and utilization facilities; domestic licensing: American Society of Mechanical Engineers Boiler and Pressure Vessel Code Cases; incorporation by reference, E6-18023, E6-18024 NOTICES Nuclear equipment and material; export and import:
High-enriched uranium; export license application, E6-18021 Plants and materials; physical protection: Licensees authorized to use sealed sources in panoramic and underwater irradiators; fingerprinting and criminal history records check requirements, E6-18052 Radioactive material quantities of concern; licensees authorized to manufacture or distribute Items; fingerprinting and criminal history check requirements, E6-18066 Reports and guidance documents; availability, etc.: LCO 3.10.1, inservice leak and hydrostatic testing operation using consolidated line item improvement process; model safety evaluation, E6-18076 *Applications, hearings, determinations, etc.:* Pacific Gas & Electric Co., E6-18022 Occupational Occupational Safety and Health Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 06-8931 Office Office of Federal Housing Enterprise Oversight See Federal Housing Enterprise Oversight Office Office of U.S.
Trade Office of United States Trade Representative See Trade Representative, Office of United States Personnel Personnel Management Office PROPOSED RULES Allowances and differentials: Cost-of-living allowances (nonforeign areas)— Alaska, Puerto Rico, and Virgin Islands; rate changes, E6-17950 NOTICES Reports and guidance documents; availability, etc.: Cost-of-living allowances (nonforeign areas) survey report— Alaska and Pacific areas, E6-17952 Caribbean and Washington, DC areas, E6-17951 Prisons Prisons Bureau NOTICES Environmental statements; record of decision:
Berlin, NH; Federal correctional institution development, E6-18039 SEC Securities and Exchange Commission NOTICES Investment Company Act of 1940: Investment Technology Group, Inc., E6-17997 Meetings; Sunshine Act, 06-8963 Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC, E6-17995 Chicago Board Options Exchange, Inc., E6-17994 NYSE Arca, Inc., E6-17992, E6-17996 SBA Small Business Administration RULES Small business size standards: Inflation adjustment; correction, C5-23435 Social Social Security Administration RULES Medicare subsidies:
Medicare Part B income-related monthly adjustment amount, E6-17690 State State Department NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18032 State State Justice Institute NOTICES Reports and guidance documents; availability, etc.: Grants, cooperative agreements, and contracts, guidelines, 06-8837 Surface Surface Transportation Board NOTICES Rail carriers: Waybill data; release for use, E6-18007 Textile Textile Agreements Implementation Committee See Committee for the Implementation of Textile Agreements Trade Trade Representative, Office of United States NOTICES World Trade Organization:
Dispute settlement panel proceedings— European Communities; zeroing and antidumping duty orders on certain products, E6-17988 Transportation Transportation Department See Federal Aviation Administration See Federal Railroad Administration See Surface Transportation Board Treasury Treasury Department See Internal Revenue Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-18046 Veterans Veterans Affairs Department NOTICES Reports and guidance documents; availability, etc.:
VA Directive and Handbook 5021, Employee/Management Relations— Secretary's authority to issue regulations; citation, E6-18060 Separate Parts In This Issue Part II Transportation Department, Federal Railroad Administration, 06-8612 Part III State Justice Institute, 06-8837 Part IV Personnel Management Office, E6-17950, E6-17951, E6-17952 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. 71 208 Friday, October 27, 2006 Rules and Regulations NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 701 RIN 3133-AD30 General Lending Maturity Limit and Other Financial Services AGENCY: National Credit Union Administration (NCUA).
ACTION: Interim final rule with request for comments. SUMMARY: NCUA is amending its rules to implement amendments to the Federal Credit Union Act (FCU Act) made by the Financial Services Regulatory Relief Act of 2006 (Reg Relief Act). The interim final rule revises the maturity limit in the general lending rule and permits Federal credit unions to provide certain, limited financial services to nonmembers within their fields of membership. DATES: This interim final rule is effective October 27, 2006.
Comments must be received by NCUA on or before December 26, 2006. ADDRESSES: You may submit comments by any of the following methods (Please send comments by one method only): • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. • *NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs.html.* Follow the instructions for submitting comments. • *E-mail:* Address to *regcomments@ncua.gov.* Include “[Your name] Comments on Interim Final Rule—Part 701” in the e-mail subject line. • *Fax:*
(703)518-6319. Use the subject line described above for e-mail. • *Mail:* Address to Mary Rupp, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. • *Hand Delivery/Courier:* Same as mail address. FOR FURTHER INFORMATION CONTACT: Moisette Green, Staff Attorney, Office of General Counsel, at the above address or telephone:
(703)518-6540. SUPPLEMENTARY INFORMATION: A. General Lending Maturity Limit The Financial Services Regulatory Relief Act of 2006, Public Law 109-351, amended the general lending maturity limit in section 107(5) of the FCU Act from 12 years to 15 years. 12 U.S.C. 1757(5). This interim final rule amends the provision in NCUA's general lending regulation, 12 CFR 701.21(c)(4), which addresses the loan maturity limit. The Board is revising the lending rule to reflect the statutory change in the maturity limit. Residential real estate loans and mobile home loans are subject to separate maturity limits. 12 U.S.C. 1757(5)(A)(i), (ii); 12 CFR 701.21(f), (g). NCUA recognizes the prompt corrective action rule has references to the 12-year loan term in the alternative risk-based net worth calculation. 12 CFR 702.107. NCUA staff will evaluate if this calculation will change as a result of the statutory amendments to the general maturity limit and address necessary changes in a future rulemaking. B. Financial Services to Persons Within the Field of Membership The Reg Relief Act also relieved a longstanding limitation on FCUs regarding financial services to nonmembers. In 1959, Congress established section 107(12) of the FCU Act, which authorized FCUs to cash checks and money orders for FCU members. Sec. 8, Public Law 86-354, 73 Stat. 631 (1959). The Garn-St. Germain Depository Institutions Act of 1982 further amended section 107(12) of the FCU Act to authorize FCUs to sell negotiable checks, money orders, and other similar money transfer instruments to FCU members. Sec. 518, Public Law 97-320, 96 Stat. 1530 (1982). At that time, Congress recognized the law did not permit an FCU to offer wire transfer services or other substitutions for money orders to its members, and the changes in FCU authority were limited to members. S. Rpt. 97-536, p. 68. Therefore, the NCUA Office of General Counsel
(OGC)strictly interpreted that FCUs could not cash checks, sell money orders or other negotiable instruments, or provide wire transfers to nonmembers, even if they were within an FCU's field of membership, except in narrow circumstances where providing these services was incidental to providing an authorized service. *See* , OGC Legal Opinion 02-0250 (February 22, 2002). Section 503 of the Reg Relief Act amended the FCU Act to permit FCUs to provide certain financial services to persons within their fields of membership. Congress intended to allow FCUs “to sell negotiable checks, money orders, and other similar transfer instruments, including international and domestic electronic fund transfers, to anyone eligible for membership, regardless of their membership status.” S. Rpt. 109-256, p. 5; H. Rpt. 109-356 Part 1, p. 63. To implement this authority, this interim final rule creates a new regulatory section to clarify NCUA's position regarding financial services to persons within an FCU's field of membership. Accordingly, the Board is issuing a new § 701.30 to implement section 503 of the Reg Relief Act. When providing financial services to nonmembers, FCUs should be mindful that they will have to meet some of the same compliance obligations with these transactions as they currently have for similar member transactions. FCUs should ensure compliance with the Bank Secrecy Act, Public Law 91-508, the Customer Identification Program regulation, 31 CFR 103.121, NCUA security rules, 12 CFR part 748, and other anti-money laundering requirements when servicing persons who may not provide information that would be provided if they applied for membership. Additionally, pursuant to the Financial Right to Privacy Act, 15 U.S.C. 6801 *et seq.* and NCUA privacy rules, 12 CFR part 716, FCUs must safeguard the private financial information of and provide the required privacy notices to nonmembers who purchase or receive financial services. C. Interim Final Rule The NCUA Board is issuing this rulemaking as an interim final rule because there is a strong public interest in having advantageous and consumer-oriented rules that enhance credit union services for members and consumers. Specifically, permitting FCUs to grant loans with the longer maturity will reduce the amount of periodic loan payments for members. The rule also allows FCUs to provide limited but necessary financial services to persons within their fields of membership who may not otherwise be able to obtain these services. Additionally, this interim final rule is consistent with statutory amendments in the Reg Relief Act. NCUA also finds these reasons are good cause to dispense with the 30-day delayed effective date requirement under section 553(d)(3) of the Administrative Procedure Act (APA). Accordingly, the Board finds that, pursuant to 5 U.S.C. 553(b)(3), notice and public procedures are unnecessary and contrary to the public interest; and, pursuant to 5 U.S.C. 553(d)(3), the rule will be effective upon publication in the **Federal Register** . Although the rule is being issued as an interim final rule and is effective upon publication, the Board encourages interested parties to submit comments. Regulatory Procedures Regulatory Flexibility Act The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small credit unions, defined as those under ten million dollars in assets. This rule only clarifies and improves the available services FCUs may provide to their members and persons within their fields of membership, without imposing any regulatory burden. The interim final amendments would not have a significant economic impact on a substantial number of small credit unions, and, therefore, a regulatory flexibility analysis is not required. Paperwork Reduction Act NCUA has determined that the interim final rule would not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget. 44 U.S.C. 3501 *et seq.* ; 5 CFR part 1320. Executive Order 13132 Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The interim final rule would not have substantial direct effects on the states, on the connection between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order. The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families The NCUA has determined that this interim final rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998). Small Business Regulatory Enforcement Fairness Act The Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121 (SBREFA), provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the APA. 5 U.S.C. 551. NCUA has requested a SBREFA determination from the Office of Management and Budget, which is pending. As required by SBREFA, NCUA will file the appropriate reports with Congress and the General Accounting Office so that the interim rule may be reviewed. List of Subjects in 12 CFR Part 701 Check, Check cashing, Credit, Credit unions, Electronic fund transfer, Money order, Money transfer. By the National Credit Union Administration Board on October 19, 2006. Mary F. Rupp, Secretary of the Board. Accordingly, NCUA amends 12 CFR part 701 as follows: PART 701—ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS 1. The authority citation for part 701 is revised to read as follows: Authority: 12 U.S.C. 1752(5), 1757, 1765, 1766, 1781, 1782, 1787, 1789; Title V, Pub. L. 109-351; 120 Stat. 1966. § 701.21 [Amended] 2. Section 701.21 is amended by: a. Removing “may not exceed 12 years” in the first sentence and adding in its place “may not exceed 15 years” in paragraph (c)(4). b. Removing the phrase “12-year” and adding, in its place, the phrase “15-year” in paragraph (f). 3. Section 701.30 is added to read as follows: § 701.30 Services for nonmembers within the field of membership. Federal credit unions may provide the following services to persons within their fields of membership, regardless of membership status:
(a)Selling negotiable checks including travelers checks, money orders, and other similar money transfer instruments (including international and domestic electronic fund transfers); and
(b)Cashing checks and money orders and receiving international and domestic electronic fund transfers for a fee. [FR Doc. E6-17835 Filed 10-26-06; 8:45 am] BILLING CODE 7535-01-P NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 748 RIN 3133-AD23 Filing Requirements for Suspicious Activity Reports AGENCY: National Credit Union Administration (NCUA). ACTION: Final rule. SUMMARY: NCUA is issuing a final rule to describe in greater detail the requirements for reporting and filing a Suspicious Activity Report
(SAR)and to address prompt notification of the board of directors of SAR filings, the confidentiality of reports, and liability protection. NCUA also is changing the heading for this part so it more accurately describes its scope. NCUA seeks to enhance credit union compliance with SAR reporting requirements by providing greater detail in its rule on the thresholds and procedures for filing a SAR. DATES: This rule is effective November 27, 2006. FOR FURTHER INFORMATION CONTACT: Linda K. Dent, Staff Attorney, Office of General Counsel, at
(703)518-6540. SUPPLEMENTARY INFORMATION: Background On June 28, 2006, the NCUA Board requested comments on a proposed rule to amend part 748 to more clearly describe the reportable activity covered by the Suspicious Activity Report
(SAR)filing requirements, identify important filing procedures, and highlight record retention requirements. The proposed rule addressed several other key aspects of the SAR process including the confidentiality of the reports, safe harbor information, and notification of the credit union's board of directors of its SAR reporting activity. Discussion NCUA periodically reviews a third of its existing regulations to update, clarify, and simplify these regulations where necessary and to eliminate redundant and unnecessary provisions. Interpretative Ruling and Policy Statement
(IRPS)87-2, Developing and Reviewing Government Regulations. The proposed changes resulted from such a review and were intended to provide basic information addressing mandatory reporting requirements and other important provisions in a single location. The changes also were intended to establish a regulation consistent with the suspicious activity report
(SAR)regulations of the other Federal Financial Institutions Examination Counsel (FFIEC) regulators and Treasury's regulation at 31 CFR 103.18. The proposed changes were not intended to eliminate the need for credit unions to review more specific information when considering potentially suspicious activity or completing a SAR. Resources such as § 103.18, the SAR form instructions, guidance provided in the FFIEC Bank Secrecy Act/Anti-Money Laundering Examination Manual, NCUA's Web site, and the Financial Crimes Enforcement Network's (FinCEN) Web site, among others, continue to be useful tools in the SAR process. Summary of Comments The NCUA Board (Board) received twenty-four comment letters regarding the proposed rule: Thirteen from natural person credit unions, two from corporate credit unions, eight from credit union trade associations, and one from an individual. The comments almost exclusively concern the proposal to require prompt notice to the credit union's board or its designated committee of any SAR filed. Twenty of the twenty-four commenters addressed this requirement. Approximately a third of the commenters believed the requirement unnecessary for a variety of reasons, among these its being a regulatory burden and not statutorily required. NCUA believes notifying a credit union's board, or its designated committee, of the credit union's SAR activity is important to ensure a board receives sufficient information to properly discharge its responsibilities. For example, awareness of suspicious activity can identify vulnerabilities and strengths in a credit union's operations and inform its board with respect to decisions regarding funding priorities and requirements for systems and training. Several commenters wanted a description of the type of information to include in the notice. The Board determined the final rule should not require a particular format for notice to a board of directors to allow credit unions and their boards the flexibility necessary to tailor the format to their particular needs and circumstances. The FFIEC Bank Secrecy Act/Anti-Money Laundering Examination Manual lists several formats but credit unions are not limited to these. A majority of commenters on this section also felt the Board should define the term prompt. Commenters provided several suggestions ranging from annual notification, to specific time frames from the date reportable activity occurs, to allowing the credit union to decide which SARs to report and when. The Board recognizes the need for some flexibility in interpreting “prompt” given differences among credit unions regarding the nature and frequency of SAR activity. The Board believes prompt means a board of directors should receive notice of the credit union's SAR activity at least monthly, for example at the monthly board meeting, if there is activity to report unless the seriousness of an activity merits immediate reporting. NCUA also received various comments seeking additional guidance for identifying suspicious activity, direction for specific products and services, instruction on fact-specific scenarios, and recommendations of useful reference materials. While the rule provides general statements of the filing requirements and other key provisions for the SAR process, it cannot cover every possible activity or situation without becoming unwieldy and ineffective. Consequently, the rule references NCUA's and FinCEN's Web sites where information such as Frequently Asked Questions, the SAR form and accompanying instructions, the FFIEC Bank Secrecy Act/Anti-Money Laundering Examination Manual, and other materials are housed. NCUA's effort to provide credit unions with useful guidance is ongoing. One commenter asked the Board to include language in the rule permitting SAR processing within shared branch networks. The commenter stated shared branches currently prepare the report and send it to the member's credit union for processing. The Board appreciates the issue the commenter has raised but believes more information and input are necessary before any regulatory changes are in order. There are a few changes in the final rule from the proposed rule. The final rule includes technical corrections for consistency for references to the FFIEC Bank Secrecy Act/Money-Laundering Examination Manual The final rule revises the first sentence under § 748.1(c) to clarify that reporting is also required where the credit union has reason to suspect a crime or suspicious transaction has occurred. The Board added a sentence to the end of § 748.1(c)(2)(ii) providing information on the location of useful SAR guidance. The phrase “but must notify all directors who are not suspects” was revised in Section 748.1(c)(4)(ii) to read “but must notify all directors, or a committee designated by the board of directors to receive such notice, who are not suspects.” The change expands a credit union's notification options in this circumstance by also allowing the board to designate a committee for this purpose. Lastly, the Board added a sentence to § 748.1(c)(5) to clarify a credit union's obligation to make the filed report and supporting documentation available to appropriate law enforcement and its regulatory supervisory authority when requested. Regulatory Procedures Regulatory Flexibility Act The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a proposed rule may have on a substantial number of small credit unions (those under $10 million in assets). This proposed rule modifies the language of a preexisting requirement for federally-insured credit unions to file reports of suspected crimes and suspicious activity. The proposed rule, therefore, will not have a significant economic impact on a substantial number of small credit unions and a regulatory flexibility analysis is not required. Paperwork Reduction Act The Office of Management and Budget assigned 3133-0094 as the control number for NCUA's Form 2362. NCUA has determined that the proposed amendments will not increase paperwork requirements and a paperwork reduction analysis is not required. Executive Order 13132 Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The proposed rule would not have substantial direct effects on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this proposed rule does not constitute a policy that has federalism implications for purposes of the executive order. The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families NCUA has determined that this proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998). List of Subjects in 12 CFR Part 748 Credit unions, Suspicious Activity Report. By the National Credit Union Administration Board on October 19, 2006. Mary Rupp, Secretary of the Board. For the reasons stated in the preamble, the National Credit Union Administration amends 12 CFR part 748 as set forth below: PART 748—SECURITY PROGRAM, REPORT OF SUSPECTED CRIMES, SUSPICIOUS TRANSACTIONS, CATASTROPHIC ACTS AND BANK SECRECY ACT COMPLIANCE 1. The authority citation for part 748 continues to read as follows: Authority: 12 U.S.C. 1766(a) and 1786(q); 31 U.S.C. 5311. 2. The heading of part 748 is revised to read as set forth above. 3. Section 748.1(c) is revised to read as follows: § 748.1 Filing of reports.
(c)*Suspicious Activity Report.* A credit union must file a report if it knows, suspects, or has reason to suspect that any crime or any suspicious transaction related to money laundering activity or a violation of the Bank Secrecy Act has occurred. For the purposes of this paragraph
(c)*credit union* means a federally-insured credit union and *official* means any member of the board of directors or a volunteer committee.
(1)*Reportable activity. Transaction* for purposes of this paragraph means a deposit, withdrawal, transfer between accounts, exchange of currency, loan, extension of credit, purchase or sale of any stock, bond, share certificate, or other monetary instrument or investment security, or any other payment, transfer, or delivery by, through, or to a financial institution, by whatever means effected. A credit union must report any known or suspected crime or any suspicious transaction related to money laundering or other illegal activity, for example, terrorism financing, loan fraud, or embezzlement, or a violation of the Bank Secrecy Act by sending a completed suspicious activity report
(SAR)to the Financial Crimes Enforcement Network (FinCEN) in the following circumstances:
(i)*Insider abuse involving any amount.* Whenever the credit union detects any known or suspected Federal criminal violations, or pattern of criminal violations, committed or attempted against the credit union or involving a transaction or transactions conducted through the credit union, where the credit union believes it was either an actual or potential victim of a criminal violation, or series of criminal violations, or that the credit union was used to facilitate a criminal transaction, and the credit union has a substantial basis for identifying one of the credit union's officials, employees, or agents as having committed or aided in the commission of the criminal violation, regardless of the amount involved in the violation;
(ii)*Transactions aggregating $5,000 or more where a suspect can be identified.* Whenever the credit union detects any known or suspected Federal criminal violation, or pattern of criminal violations, committed or attempted against the credit union or involving a transaction or transactions conducted through the credit union, and involving or aggregating $5,000 or more in funds or other assets, where the credit union believes it was either an actual or potential victim of a criminal violation, or series of criminal violations, or that the credit union was used to facilitate a criminal transaction, and the credit union has a substantial basis for identifying a possible suspect or group of suspects. If it is determined before filing this report that the identified suspect or group of suspects has used an alias, then information regarding the true identity of the suspect or group of suspects, as well as alias identifiers, such as drivers' licenses or social security numbers, addresses and telephone numbers, must be reported;
(iii)*Transactions aggregating $25,000 or more regardless of potential suspects.* Whenever the credit union detects any known or suspected Federal criminal violation, or pattern of criminal violations, committed or attempted against the credit union or involving a transaction or transactions conducted through the credit union, involving or aggregating $25,000 or more in funds or other assets, where the credit union believes it was either an actual or potential victim of a criminal violation, or series of criminal violations, or that the credit union was used to facilitate a criminal transaction, even though the credit union has no substantial basis for identifying a possible suspect or group of suspects; or
(iv)*Transactions aggregating $5,000 or more that involve potential money laundering or violations of the Bank Secrecy Act.* Any transaction conducted or attempted by, at or through the credit union and involving or aggregating $5,000 or more in funds or other assets, if the credit union knows, suspects, or has reason to suspect:
(A)The transaction involves funds derived from illegal activities or is intended or conducted in order to hide or disguise funds or assets derived from illegal activities (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any Federal law or regulation or to avoid any transaction reporting requirement under Federal law;
(B)The transaction is designed to evade any regulations promulgated under the Bank Secrecy Act; or
(C)The transaction has no business or apparent lawful purpose or is not the sort of transaction in which the particular member would normally be expected to engage, and the credit union knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.
(v)*Exceptions.* A credit union is not required to file a SAR for a robbery or burglary committed or attempted that is reported to appropriate law enforcement authorities, or for lost, missing, counterfeit, or stolen securities and the credit union files a report pursuant to the reporting requirements of 17 CFR 240.17f-1.
(2)*Filing Procedures.*
(i)*Timing.* A credit union must file a SAR with FinCEN no later than 30 calendar days from the date the suspicious activity is initially detected, unless there is no identified suspect on the date of detection. If no suspect is identified on the date of detection, a credit union may use an additional 30 calendar days to identify a suspect before filing a SAR. In no case may a credit union take more than 60 days from the date it initially detects a reportable transaction to file a SAR. In situations involving violations requiring immediate attention, such as ongoing money laundering schemes, a credit union must immediately notify, by telephone, an appropriate law enforcement authority and its supervisory authority, in addition to filing a SAR.
(ii)*Content.* A credit union must complete, fully and accurately, SAR form TDF 90-22.47, Suspicious Activity Report (also known as NCUA Form 2362) in accordance with the form's instructions and 31 CFR Part 103.18. A copy of the SAR form may be obtained from the credit union resources section of NCUA's Web site, *http://www.ncua.gov,* or the regulatory section of FinCEN's Web site, *http://www.fincen.gov.* These sites include other useful guidance on SARs, for example, forms and filing instructions, Frequently Asked Questions, and the FFIEC Bank Secrecy Act/Anti-Money Laundering Examination Manual.
(iii)*Compliance.* Failure to file a SAR as required by the form's instructions and 31 CFR Part 103.18 may subject the credit union, its officials, employees, and agents to the assessment of civil money penalties or other administrative actions.
(3)*Retention of Records.* A credit union must maintain a copy of any SAR that it files and the original or business record equivalent of all supporting documentation to the report for a period of five years from the date of the report. Supporting documentation must be identified and maintained by the credit union as such. Supporting documentation is considered a part of the filed report even though it should not be actually filed with the submitted report. A credit union must make all supporting documentation available to appropriate law enforcement authorities and its regulatory supervisory authority upon request.
(4)*Notification to board of directors.*
(i)*Generally.* The management of the credit union must promptly notify its board of directors, or a committee designated by the board of directors to receive such notice, of any SAR filed.
(ii)*Suspect is a director or committee member.* If a credit union files a SAR and the suspect is a director or member of a committee designated by the board of directors to receive notice of SAR filings, the credit union may not notify the suspect, pursuant to 31 U.S.C. 5318(g)(2), but must notify the remaining directors, or designated committee members, who are not suspects.
(5)*Confidentiality of reports.* SARs are confidential. Any credit union, including its officials, employees, and agents, subpoenaed or otherwise requested to disclose a SAR or the information in a SAR must decline to produce the SAR or to provide any information that would disclose that a SAR was prepared or filed, citing this part, applicable law, for example, 31 U.S.C. 5318(g), or both, and notify NCUA of the request. A credit union must make the filed report and all supporting documentation available to appropriate law enforcement authorities and its regulatory supervisory authority upon request.
(6)*Safe Harbor.* Any credit union, including its officials, employees, and agents, that makes a report of suspected or known criminal violations and suspicious activities to law enforcement and financial institution supervisory authorities, including supporting documentation, are protected from liability for any disclosure in the report, or for failure to disclose the existence of the report, or both, to the full extent provided by 31 U.S.C. 5318(g)(3). This protection applies if the report is filed pursuant to this part or is filed on a voluntary basis. [FR Doc. E6-17838 Filed 10-26-06; 8:45 am] BILLING CODE 7535-01-P DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Office of Federal Housing Enterprise Oversight 12 CFR Part 1732 RIN 2550-AA34 Record Retention AGENCY: Office of Federal Housing Enterprise Oversight, HUD. ACTION: Final regulation. SUMMARY: The Office of Federal Housing Enterprise Oversight (OFHEO) is issuing a final regulation that sets forth record retention requirements with respect to the record management programs of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation consistent with the safety and soundness responsibilities of OFHEO under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. DATES: The effective date of this regulation is October 27, 2006. FOR FURTHER INFORMATION CONTACT: Tina Dion, Associate General Counsel, telephone
(202)414-3838 (not a toll-free number); Office of Federal Housing Enterprise Oversight, Fourth Floor, 1700 G Street, NW., Washington, DC 20552. The telephone number for the Telecommunications Device for the Deaf is
(800)877-8339. SUPPLEMENTARY INFORMATION: I. Background A. Introduction Title XIII of the Housing and Community Development Act of 1992, Public Law 102-550, titled the “Federal Housing Enterprises Financial Safety and Soundness Act of 1992”
(Act)(12 U.S.C. 4501 *et seq.* ), established OFHEO as an independent office within the Department of Housing and Urban Development. OFHEO is statutorily mandated to ensure that the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises) are capitalized adequately and operate in a safe and sound manner and in compliance with applicable laws, rules, and regulations. The Act provides that the Director of OFHEO (the Director) is authorized to make such determinations, take such actions, and perform such functions as the Director determines are necessary regarding his supervisory authorities, which include examinations of the Enterprises. 1 Under the Act, the Director is authorized to conduct on-site examinations of the Enterprises each year, and any other examinations that the Director determines are necessary to ensure their safety and soundness. 2 1 12 U.S.C. 4513(b)(2). 2 12 U.S.C. 4517(a) and (b). B. Record Retention and Safe and Sound Operations OFHEO recognizes that the effectiveness of the examination process is dependent upon the prompt production of complete and accurate records. OFHEO, through the supervisory process, must have access to the records of an Enterprise that are necessary to determine the financial condition of the Enterprise or the details or the purpose of any transaction that may have a material effect on the financial condition of the Enterprise. 3 3 12 U.S.C. 4632(c). Retention of such records not only facilitates the examination process, but also allows an Enterprise to manage more effectively its business and detect improper behavior that might cause financial damage to the corporation. Additionally, such records serve as documentation for an Enterprise in any controversy over its business activities or transactions. The importance of sound record retention policies and procedures by regulated institutions also has been recognized by Congress and other federal regulators. Adequate record retention by the institutions has been determined to have a high degree of usefulness in criminal, tax, and regulatory investigations or proceedings, and has been identified as a requisite component of an institution's operation and management on a safety and soundness basis. 4 4 *See* , *e.g.* , 12 U.S.C. 1829b, and the *Guidelines and Interagency Standards for Safety and Soundness* at 12 CFR part 30, Appendix A, II, B. In addition to facilitating the oversight and enforcement of federal banking laws, adequate record retention has been recognized by Congress as being essential to the oversight and enforcement of the federal securities laws. For example, as mandated by section 802 of the Sarbanes-Oxley Act, 5 the U.S. Securities and Exchange Commission adopted rules requiring accounting firms to retain for seven years certain records relevant to their audits and reviews of issuers' financial statements. Records to be retained include an accounting firm's workpapers and certain other documents that contain conclusions, opinions, analyses, or financial data related to the audit or review. 6 5 Pub. L. 107-204, 116 Stat. 745 (2002). 6 17 CFR part 210. *See* Release Nos. 33-8180; 34-47241; IC-2591; FR-66; File No. S7-46-02. Record Retention Regulation On June 1, 2006, OFHEO published for comment a proposed regulation, at 71 FR 31121, which sets forth proposed safety and soundness requirements with respect to the Enterprises' record retention programs. The 60-day comment period ended on July 31, 2006. All comments received have been made available to the public in the OFHEO Public Reading Room and have been posted on the OFHEO Web site at *http://www.OFHEO.gov* . II. Comments Received Comments were received from Freddie Mac and Fannie Mae. Both Enterprises commented in support of the general approach under the proposed regulation. Each Enterprise also provided comments, many of which were technical in nature, on specific provisions of the proposal. All comments were taken into consideration. A discussion of the comments as they related to the proposed sections of the regulation follows. A. § 1732.1 Purpose and Scope Proposed § 1732.1 states that the purpose of the regulation is to set forth minimum requirements in connection with the record retention program of each Enterprise, and that the requirements are intended to ensure that complete and accurate records of an Enterprise are readily accessible by OFHEO for examination and other supervisory purposes. Both Enterprises made technical comments regarding § 1732.1 with respect to the requirement to provide OFHEO with ready access to records. The Enterprises noted the dynamic nature of records management and the evolving nature of information technology. Freddie Mac commented that the methods of accessing hard copies of documents in off-site storage, electronic documents resident on a Local Area Network, and information in legacy databases, active databases, e-mail, and voicemail are quite different. Freddie Mac also noted that the level of management controls and ready access to records is not the same for records created and maintained years ago as that of records created and maintained today. Moreover, Freddie Mac commented that many of the records are subject to specific legal rights of the Enterprise or of individuals that cannot be disregarded. For these reasons, both Enterprises requested clarification that access to their records under the regulation is intended to mean “reasonable” access. OFHEO understands that all records are not equally accessible. For purposes of clarification, OFHEO has added language to § 1732.1, as well as §§ 1732.6(a)(2)(iii) and 1732.7(d), which clarifies that the sections' accessibility requirements are intended to be by reasonable means, consistent with the nature and availability of the records and existing information technology. B. § 1732.2 Definitions Active Record As proposed, the term “active record” would be defined under § 1732.2(b) to mean a document that is necessary to conduct the current business of an office or business unit of an Enterprise and, therefore, is readily available for consultation and reference. The Enterprises made technical comments on this definition, as well as the definitions for the terms “inactive record” and “vital records,” requesting that the terms be amended by substituting the word “record” or “records” for “document” or documents,” as appropriate. Each Enterprise stated that such amendments would more fully incorporate what is intended by the proposal, *i.e.* , its definition of “record,” and would be consistent with best practices. 7 7 In their comments on best practices in the field of records management, both Enterprises referred to the guidelines and standards of the following organizations: The Sedona Conference (2005), the American National Standards Institute/Association of Records Managers and Administrators, and the International Organization for Standardization. OFHEO agrees with the recommended technical changes and has revised the definitions in § 1732.2(b), (h), and
(m)accordingly in the final regulation. Employee As proposed, the definition of the term “employee” would be defined in § 1732.2(e) to mean any officer or employee of an Enterprise, any conservator appointed by OFHEO, or any agent or independent contractor acting on behalf of an Enterprise. Both Enterprises commented that including independent contractors and agents in the definition was significant because such individuals would be subject to several provisions of the proposed regulations, *i.e.* , the training requirements under § 1732.6(b); the record hold notifications under § 1732.7(b); the reporting requirements of potential investigations under § 1732.7(b)(3), and the definition of “record” under § 1732.2(j)(3). Fannie Mae stated that extending the regulation's general reach in this way would create obligations with regard to parties and documents beyond an Enterprise's control, would generate considerable burden and expense for the Enterprise without yielding commensurate gains with respect to improved operations or supervision, and would increase litigation risk by exposing the Enterprise to potential liability for the actions (or non-actions) of third parties or individuals outside the Enterprise's control. Both Enterprises requested that OFHEO not include agents and independent contractors within the general definition of the term “employee.” Rather, they recommended that, to the extent that any section of the regulation is intended to apply to agents or independent contractors, OFHEO amend the section to include specific language making it apply to agents or independent contractors, tailored to what would be appropriate under the circumstances. In response to the comments, OFHEO has deleted the phrase “or any agent or independent contractor acting on behalf of an Enterprise” from § 1732.2(e), and has added specific language for coverage of agents or independent contractors as appropriate in other sections of the final regulation, as noted below. Inactive Record As proposed, the term “inactive record” would be defined in § 1732.2(h) to mean a document that is seldom used but must be retained by an Enterprise for legislative, fiscal, legal, archival, historical, or vital records purposes. In its technical comment, Fannie Mae requested that the words “legislative” and “archival” be deleted from the definition. Fannie Mae stated that the words do not appear to add anything substantive to the other qualifying terms, and that the proposal provides no elaboration as to what these words are intended to capture that is not otherwise covered. Fannie Mae noted that, as an industry practice, records generally are defined for record retention purposes as having operational, vital record, legal or regulatory, fiscal, and historical value. OFHEO concurs with Fannie Mae's technical comment and has revised the definition of “inactive record” accordingly in the final regulation. Also, as noted above, the word “record” has been substituted for the word “document.” Record As proposed, the definition of the term “record” in § 1732.2(j) would mean: Any document whether generated internally or received from outside sources by an Enterprise or employee in connection with Enterprise business, regardless of the following:
(1)Form or format, including hard copy documents ( *e.g.,* files, logs, and reports) and electronic documents ( *e.g.,* e-mail, databases, spreadsheets, PowerPoint presentations, electronic reporting systems, electronic tapes and back-up tapes, optical discs, CD-ROMS, and DVDs), and voicemail records;
(2)where the document is stored or located, including network servers, desktop or laptop computers and handheld computers, other wireless devices with text messaging capabilities, and on-site or off-site at a storage facility;
(3)whether the document is maintained or used on Enterprise-owned equipment, or personal or home computer systems of an employee; or
(4)whether the document is active or inactive. Fannie Mae recommended that the proposed regulation use the definition of the term “record” provided in Internal Organization for Standards, ISO 15849-1 § 3.15. That standard provides that a record “is information created, received, and maintained as evidence and information by an organization or person, in the pursuance of legal obligations or in the transaction of business.” Freddie Mac, also referencing industry standards, requested that the word “information” be used in the definition, rather than “document.” Freddie Mac requested another technical change that would modify the definition by inserting the term “maintained” between the word “employee” and the phrase “in connection with.” Both Enterprises explained that the recommended revisions better reflect the corporate practices and supervisory concerns. OFHEO agrees with the technical changes recommended by Freddie Mac and has revised the definition of the term “record” in § 1732.2(j) to read “any information whether generated internally or received from outside sources or employee maintained in connection with Enterprise business * * *” Conforming changes have also been made to subsections (2), (3), and
(4)accordingly. OFHEO does not agree to make use of the entire ISO definition for the definition of the term “records,” as recommended by Fannie Mae, because other elements of the ISO definition are encompassed in § 1732.2 under the definition of the terms “active record” and “vital records.” In addition, the language of the definition in § 1732.2(j), namely “whether generated internally or received from outside sources” is necessary to ensure that records are appropriately retained even if they have not been generated or created by the Enterprise. Record Retention Schedule As proposed, the definition of the term “record retention schedule” would be defined in § 1732.2(k) to mean “a form that details the categories of records an Enterprise is required to store and their corresponding record retention periods. The record retention schedule includes reproductions, as well as all media, including microfilm and machine-readable computer records, for each record category.” Fannie Mae commented that the inclusion of the term “reproductions” in the definition would be inconsistent with the standard industry approach, which does not require retention of copies because of the burden and expense of such retention. OFHEO understands that retention of all reproductions or copies of records would be burdensome and expensive. Reproductions would be listed in a record retention schedule only if the original of the official record is not available. Accordingly, OFHEO has revised the second sentence of the proposed definition to read: “The record retention schedule includes all media, such as microfilm and machine-readable computer records, for each record category. Reproductions are also included for each record category if the original of the official record is not available.” Fannie Mae also commented that the record retention schedule is envisioned as a “form.” Fannie Mae also requested a technical change to the definition, *i.e.,* substitution of the word “schedule” for the term “form,” to be consistent with the standard industry approach. OFHEO agrees and has changed the term “form” to “schedule” in the definition of the term “record retention schedule” in the final regulation. Record Period As proposed, the definition of the term “Retention period” would be defined in § 1732.2(l) to mean the length of time that records must be kept before they are destroyed. Records not authorized for destruction would have a retention period of “permanent.” Fannie Mae made a technical comment that the definition is ambiguous, and requested that the definition be changed to state that: “Records not provided with a `retention period' must be retained, unless scheduled for destruction.” OFHEO has determined that the definition, as proposed, is clear and, therefore, has not made the technical change. Vital Records As proposed, the term “vital records” would be defined in § 1732.2(m) to mean documents that are needed to meet operational responsibilities of an Enterprise under emergency or disaster conditions (emergency operating records) or to protect the legal and financial rights of an Enterprise and those affected by Enterprise activities. Emergency operating records would be defined to mean the type of vital records essential to the continued functioning or reconstitution of an Enterprise during and after an emergency. Moreover, a vital record would be further defined to include a record that could be both an emergency operating record and a legal and financial rights record. Fannie Mae commented that the definition includes documents “needed * * * to protect the legal and financial rights of * * * those affected by Enterprise activities.” Fannie Mae stated that the company is very concerned about the possible impact of this language, as it arguably could be read to create new, unpredictable obligations to third parties, and thus potential legal risk. To allay such concerns and to be consistent with industry best practices, Fannie Mae requested that the words “those affected by Enterprise activities” be substituted with the phrase “its employees, creditors, customers and holders of its securities.” In response to the comment, OFHEO has determined to delete the words “those affected by Enterprise activities” from the definition of the term “vital records” in the final regulation. Also, as noted above, the word “records” has been substituted for the word “documents.” C. Section 1732.5 Establishment and Evaluation of Record Retention Program Section 1732.5(a) of the proposed regulation would require each Enterprise to establish and maintain a written record retention program and provide a copy of such program to the Examiner-in-Charge
(EIC)of the Enterprise within 120 days of the regulation's effective date, and annually thereafter, and whenever a significant revision to the program has been made. Fannie Mae advised in its comments that the company will be prepared to submit a written plan within 120 days of the effective date on the understanding that the EIC will advise if the planned program is acceptable before investments are made in order to avoid costly changes and unnecessary delays. For the build-out process, Fannie Mae further advised that the company anticipates using one or more pilots to test and improve its proposed policy, approach and technology. Freddie Mac stated that the company expects to include in its initial report to OFHEO a snapshot of its current records retention program, including any additional enhancements that are implemented by the date of that report, together with a description of planned enhancements (both short-term and long-term) to that program. That first report will reflect that Freddie Mac has a records management program in place that encompasses records retention, but that the company is continuing to develop and strengthen its program. Freddie Mac noted that with OFHEO feedback on both its record retention program, and on planned enhancements, the corporation can align the records retention program with the expectations of OFHEO under the final regulation. OFHEO understands that both Enterprises are in the process of developing and upgrading their records management systems to comport with changing technology and the requirements of the final regulation. To that end, OFHEO encourages an Enterprise to submit relevant materials to and confer with its EIC as needed to ensure that its record retention program is compliant. D. Section 1732.6 Minimum Requirements of Record Retention Program Requirements Section 1732.6(a)(2)(iii) of the proposed regulation would require that the record retention program established and maintained by an Enterprise be reasonably designed to assure that the format of retained records and the retention period permit ready access by the Enterprise, and, upon request, by the examination and other staff of OFHEO. As noted above, in response to technical comments received on § 1732.1, OFHEO has revised subsection (a)(2)(iii) of § 1732.6 in the final regulation to clarify the accessibility requirement to mean access by reasonable means, consistent with the nature and availability of the records and existing information technology. Additionally, Freddie Mac made a technical comment requesting that OFHEO revise this subsection (and § 1732.7(d), which addresses access to and retrieval of records during a record hold) to include at the end the phrase “subject to applicable legal rights.” OFHEO has determined that it is not necessary to add the requested phrase to either subsection because the record retention requirements of the regulation are imposed for purposes of supervisory access by OFHEO to Enterprise records and do not result in a waiver of existing rights. Section 1732.6(a)(5) of the proposed regulation would require that the record retention program established and maintained by an Enterprise include an accurate, current, and comprehensive record retention schedule that lists records by major categories, subcategories, record type, and retention period, which retention period is appropriate to the specific record and consistent with applicable legal, regulatory, fiscal, and administrative requirements. Fannie Mae commented that the term “administrative” is ambiguous. Fannie Mae stated that, if the term is intended to reference administrative requirements of OFHEO, the term “regulatory” already captures these requirements, so the term “administrative” should be deleted. If, however, what is intended to be captured are the Enterprises' business needs, the term “operational” or “business” should be substituted for the term “administrative.” OFHEO notes that the term “administrative” refers to requirements that are internal to a company, *i.e.* , the Enterprise. Therefore, the term is not duplicative of the term “regulatory.” However, for purposes of clarification, OFHEO has determined to revise § 1732.6(a)(5) in the final regulation by substituting the terms “operational and business” for the term “administrative.” Training Section 1732.6(b) of the proposed regulation would require that an Enterprise's record retention program provide for training of and notice to all employees on a periodic basis on their record retention responsibilities, including instruction regarding penalties provided by law for the unlawful removal or destruction of records. The Enterprises commented that this provision should be modified to include specific language tailored to requirements appropriate for independent contractors and agents. In its technical comment, Freddie Mac requested that OFHEO modify the proposal to provide that the training provision applies only to actual employees of an Enterprise, and that the Enterprise also takes reasonable steps to ensure that agents or independent contractors who are involved with creating or maintaining Enterprise records receive notice and/or training regarding record retention responsibilities in a manner appropriate to their engagement. Fannie Mae requested amending the proposed section to include specific language making training for agents or independent contractors consistent with their roles and responsibilities. As noted above in response to comments on § 1732.2(e), OFHEO has added specific language for coverage of agents or independent contractors to several sections of the final regulation. With respect to § 1732.6, a second sentence has been added to subsection
(b)that reads as follows: “The record retention program also shall provide for training for the agents or independent contractors of an Enterprise, as appropriate, consistent with their respective roles and responsibilities to the Enterprise.” E. Section 1732.7 Record Hold Definition Section 1732.7(a) of the proposed regulation would define the term “record hold” to mean a requirement, an order, or a directive from an Enterprise or OFHEO that the Enterprise is to retain records relating to a particular issue in connection with an actual or a potential OFHEO examination, investigation, enforcement proceeding, or litigation. Both Enterprises expressed concern that criteria for a record hold is stated in terms of a “potential” investigation, enforcement proceeding or litigation. Fannie Mae commented that virtually everything that an Enterprise does raises some “potential” for litigation, and virtually every question that OFHEO asks raises some “potential” for an OFHEO investigation. Fannie Mae stated that the overly broad and ambiguous standard would needlessly create an onerous burden both on the Enterprises and OFHEO. Fannie Mae requested that the word “likely” be substituted for the word “potential.” Freddie Mac made the technical comment that the term “potential” requires or suggests that an Enterprise or employee is obligated and accountable to accurately guess when a matter could possibly give rise to an OFHEO examination, investigation, enforcement proceeding or litigation, resulting in an impossible standard with which to comply in practice. Freddie Mac requested that subsection
(a)of § 1732.7 be modified to require that an Enterprise receive notice from OFHEO. To address these comments, OFHEO has amended subsection
(a)of § 1732.7 in the final regulation to clarify that the record retention requirements of a record hold result upon receipt by the Enterprise of notice from OFHEO. As amended, subsection
(a)reads as follows: “For purposes of this part, the term ‘record hold' means a requirement, an order, or a directive from an Enterprise or OFHEO that the Enterprise is to retain records relating to a particular issue in connection with an actual or a potential OFHEO examination, investigation, enforcement proceeding, or litigation of which the Enterprise has received notice from OFHEO.” As a result of the amendment, OFHEO has determined that it is not necessary to substitute the word “likely” for the word “potential.” Notification by an Enterprise Section 1732.7(b)(1) of the proposed regulation would require that the record retention program of an Enterprise “[a]ddress how all employees will receive prompt notification of a record hold; * * *.” Fannie Mae stated that it understands that this provision requires only that the program provide the mechanism by which all relevant employees will be notified of a record hold, and does not require that all employees in fact be made aware of each and every record hold issued. Otherwise, Fannie Mae stated the result would be a great deal of cost, confusion and unnecessary effort, as the vast majority of Enterprise employees would have nothing germane to a particular hold. Moreover, Fannie Mae stated that industry best practice is not to notify each employee at a company of every records hold, but rather to notify only those employees who are likely to have records covered by the records hold. To that end, Fannie Mae requested that the subsection be modified by deleting the words “all employees” and substituting the phrase “the Enterprise will determine which employees, agents and independent contractors need to and.” OFHEO understands that not all employees of an Enterprise may fall within the scope of the notification requirements of § 1732.7(b)(1) in light of the nature of their responsibilities and activities. To clarify that understanding, OFHEO has deleted the word “all” before the word “employees” in the final regulation. Additionally, as noted above, because agents or independent contractors of the Enterprise have been deleted from the definition of the term “employees,” specific language has been added to the subsection to cover agents or independent contractors, as appropriate. As amended, § 1732.7(b)(1) reads as follows in the final regulation: “The record retention program of an Enterprise shall:
(1)Address how employees and, as appropriate, how agents or independent contractors consistent with their respective roles and responsibilities to the Enterprise, will receive prompt notification of a record hold;”. Section 1732.7(b)(3) of the proposed regulation would require that the record retention program of an Enterprise “[p]rovide that any employee who is aware of a potential investigation, enforcement proceeding, or litigation by OFHEO involving the Enterprise or an employee shall notify immediately the legal department of the Enterprise and shall retain any records that may be relevant in any way to such investigation, enforcement proceeding, or litigation.” Similar to comments made on other sections, both Enterprises expressed concerns regarding the scope of coverage for the notification requirements of § 1732.7(b)(3) and criteria for determining a “potential” investigation, enforcement proceeding, or litigation by OFHEO involving the Enterprise or an employee. The concerns expressed have been addressed by OFHEO. As noted above in its response to comments received on § 1732.2(e), OFHEO has deleted coverage of agents or independent contractors acting on behalf of an Enterprise from the definition of the term “employee,” and their coverage is limited to certain sections of the final regulation as appropriate. OFHEO also amended subsection
(a)of § 1732.7 in the final regulation to clarify that the record retention requirements of a record hold result upon receipt by an Enterprise of notice from OFHEO. To further allay any concerns, OFHEO has amended § 1732.7(b)(3) by replacing the words “aware of” with “has received notice of” and also by inserting the phrase “ , or otherwise has actual knowledge that an issue is subject to such an enforcement proceeding or litigation,” before the words “shall notify.” Thus, OFHEO would provide written notice to an Enterprise of its intent to conduct an investigation some time in the future, thereby providing notice of a “potential investigation.” Also, consistent with other sections discussed above, language has been added to the subsection to require that agents and independent contractors receive notice of a record hold to the extent appropriate in light of the nature of their engagement. Specifically, § 1732.7(b)(3) of the final regulation provides that the record retention program of an Enterprise shall “provide that any employee and, as appropriate, any agent or independent contractor consistent with his or her respective role and responsibility to the Enterprise, who has received notice of a potential investigation, enforcement proceeding, or litigation by OFHEO involving the Enterprise or an employee, or otherwise has actual knowledge that an issue is subject to such an investigation, enforcement proceeding or litigation, shall notify immediately the legal department of the Enterprise and shall retain any records that may be relevant in any way to such investigation, enforcement proceeding, or litigation.” It is noted that OFHEO also has revised subsection (b)(1) of § 1732.7, which requires prompt notification of a record hold, to include, as appropriate, coverage of agents and independent contractors consistent with their roles and responsibilities. F. Section 1732.10 Supervisory Action Section 1732.10(a) of the proposed regulation would provide that failure by an Enterprise to comply with this part may subject the Enterprise or the board members, officers, or employees thereof to supervisory action by OFHEO under the Act, including but not limited to cease-and-desist proceedings, temporary cease-and-desist proceedings, and civil money penalties. Both Enterprises commented on compliance with the proposed section. Fannie Mae noted the necessary complexities of developing a comprehensive record retention scheme and suggested that, consistent with the approach of federal banking regulators, OFHEO establish a specific system for the submission of Enterprise remediation plans (over perhaps a thirty-day period) with regard to any deficiencies regarding compliance with § 1732.10(a). Fannie Mae stated that such a system would provide a routine, efficient framework for the resolution of issues that do not merit formal enforcement action, without foreclosing the ability to take more formal action, as OFHEO deemed appropriate. Freddie Mac commented that in light of the lack of bright lines as to precisely what is required for full compliance with the regulation, the rapidly changing best practices in the records management field, and the time required to develop and implement enhancements to records management programs, it would be appropriate for OFHEO to first consider using feedback, followed by a request for a remediation plan, prior to considering formal enforcement actions, in instances where OFHEO believes an Enterprise acting in good faith is not in full compliance with the regulation. Thus, Freddie Mac requested that § 1732.10(a) be revised to require appropriate supervisory notification before noncompliance would subject the Enterprise to a supervisory action by OFHEO. OFHEO understands that both Enterprises are in the process of developing and upgrading their records management systems to comport with changing technology. To that end, both during the 120-day implementation period and afterwards, OFHEO encourages each Enterprise to submit relevant materials to and confer with its EIC as needed to ensure that its record retention program is compliant. III. Final Regulation Except with respect to the technical and clarifying revisions of the proposed language as described above, OFHEO has determined to issue the regulation as proposed. Regulatory Impact Executive Order 12866, Regulatory Planning and Review This regulation does not result in an annual effect on the economy of $100 million or more or a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or foreign markets. Accordingly, no regulatory impact assessment is required. Nevertheless, this regulation was submitted to the Office of Management and Budget for review under other provisions of Executive Order 12866 as a significant regulatory action. Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) requires that a regulation that has a significant economic impact on a substantial number of small entities, small businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities (5 U.S.C. 605(b)). OFHEO has considered the impact of the regulation under the Regulatory Flexibility Act. The General Counsel of OFHEO certifies that the regulation, as herein adopted, is not likely to have a significant economic impact on a substantial number of small business entities because the regulation is applicable only to the Enterprises which are not small entities for purposes of the Regulatory Flexibility Act. Executive Order 13132, Federalism Executive Order 13132 requires that Executive departments and agencies identify regulatory actions that have significant federalism implications. A regulation has federalism implications if it has substantial direct effects on the States, on the relationship or distribution of power between the Federal Government and the States, or on the distribution of power and responsibilities among various levels of Government. The Enterprises are federally chartered corporations supervised by OFHEO. This regulation sets forth minimum record retention requirements with which the Enterprises must comply for Federal supervisory purposes and address the safety and soundness authorities of the agency. This regulation does not affect in any manner the powers and authorities of any State with respect to the Enterprises or alter the distribution of power and responsibilities between State and Federal levels of government. Therefore, OFHEO has determined that this final regulation has no federalism implications that warrant the preparation of a Federalism Assessment in accordance with Executive Order 13132. List of Subjects in 12 CFR Part 1732 Government-Sponsored Enterprises, Reporting and recordkeeping requirements, Records. Accordingly, for the reasons stated in the preamble, OFHEO adds part 1732 to subchapter C of 12 CFR chapter XVII to read as follows: Subchapter C—Safety and Soundness PART 1732—RECORD RETENTION Subpart A—General Sec. 1732.1 Purpose and scope. 1732.2 Definitions. 1732.3-4 [Reserved] Subpart B—Record Retention Program 1732.5 Establishment and evaluation of record retention program. 1732.6 Minimum requirements of record retention program. 1732.7 Record hold. 1732.8-1732.9 [Reserved] Subpart C—Supervisory Action 1732.10 Supervisory action. Authority: 12 U.S.C. 4513(a), 4513(b)(1), 4513(b)(5), 4514, 4631, 4632, and 4632. Subpart A—General § 1732.1 Purpose and scope. In furtherance of the safety and soundness authorities of OFHEO, this part sets forth minimum requirements in connection with the record retention program of each Enterprise. The requirements are intended to ensure that complete and accurate records of an Enterprise are readily accessible by OFHEO for examination and other supervisory purposes. Such access shall be by reasonable means, consistent with the nature and availability of the records and existing information technology. § 1732.2 Definitions. For purposes of this part, the term:
(a)*Act* means the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, Title XIII of the Housing and Community Development Act of 1992, Public Law 102-550, section 1301, Oct. 28, 1992, 106 Stat. 3672, 3941 through 4012
(1993)(12 U.S.C. 4501 *et seq.* ).
(b)*Active record* means a record that is necessary to conduct the current business of an office or business unit of an Enterprise and, therefore, is readily available for consultation and reference.
(c)*Director* means the Director of OFHEO, or his or her designee.
(d)*Electronic record* means a record created, generated, communicated, or stored by electronic means.
(e)*Employee* means any officer or employee of an Enterprise or any conservator appointed by OFHEO.
(f)*Enterprise* means the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; and the term “Enterprises” means, collectively, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(g)*E-mail* means electronic mail, which is a method of communication in which:
(1)Usually, text is transmitted (but sometimes also graphics and/or audio information);
(2)Operations include sending, storing, processing, and receiving information;
(3)Users are allowed to communicate under specified conditions; and
(4)Messages are held in storage until called for by the addressee, including any attachment of separate electronic files.
(h)*Inactive record* means a record that is seldom used but must be retained by an Enterprise for fiscal, legal, historical, or vital records purposes.
(i)*OFHEO* means the Office of Federal Housing Enterprise Oversight.
(j)*Record* means any information whether generated internally or received from outside sources by an Enterprise or employee maintained in connection with Enterprise business, regardless of the following:
(1)Form or format, including hard copy documents ( *e.g.* , files, logs, and reports) and electronic documents ( *e.g.* , e-mail, databases, spreadsheets, PowerPoint presentations, electronic reporting systems, electronic tapes and back-up tapes, optical discs, CD-ROMS, and DVDs), and voicemail records;
(2)Where the information is stored or located, including network servers, desktop or laptop computers and handheld computers, other wireless devices with text messaging capabilities, and on-site or off-site at a storage facility;
(3)Whether the information is maintained or used on Enterprise-owned equipment, or personal or home computer systems of an employee; or
(4)Whether the information is active or inactive.
(k)*Record retention schedule* means a schedule that details the categories of records an Enterprise is required to retain and the corresponding retention periods. The record retention schedule includes all media, such as microfilm and machine-readable computer records, for each record category. Reproductions are also included for each record category if the original of the official record is not available.
(l)*Retention period* means the length of time that records must be kept before they are destroyed. Records not authorized for destruction have a retention period of “permanent.”
(m)*Vital records* means records that are needed to meet operational responsibilities of an Enterprise under emergency or disaster conditions (emergency operating records) or to protect the legal and financial rights of an Enterprise. Emergency operating records are the type of vital records essential to the continued functioning or reconstitution of an Enterprise during and after an emergency. A vital record may be both an emergency operating record and a legal and financial rights record. §§ 1732.3-1732.4 [Reserved] Subpart B—Record Retention Program § 1732.5 Establishment and evaluation of record retention program.
(a)*Establishment.* An Enterprise shall establish and maintain a written record retention program and provide a copy of such program to the OFHEO Examiner-in-Charge of the Enterprise within 120 days of the effective date of this part, and annually thereafter, and whenever a significant revision to the program has been made.
(b)*Evaluation.* Management of the Enterprise shall evaluate in writing the adequacy and effectiveness of the record retention program at least every three years and provide a copy of the evaluation to the board of directors and the OFHEO Examiner-in-Charge of the Enterprise. § 1732.6 Minimum requirements of record retention program.
(a)*Requirements.* The record retention program established and maintained by an Enterprise under § 1732.5 shall:
(1)Be reasonably designed to assure that retained records are complete and accurate;
(2)Be reasonably designed to assure that the format of retained records and the retention period—
(i)Are adequate to support litigation and the administrative, business, external and internal audit functions of the Enterprise;
(ii)Comply with requirements of applicable laws and regulations; and
(iii)Permit ready access by the Enterprise and, upon request, by the examination and other staff of OFHEO by reasonable means, consistent with the nature and availability of the records and existing information technology;
(3)Assign in writing the authorities and responsibilities for record retention activities;
(4)Include policies and procedures concerning record holds, consistent with § 1732.7;
(5)Include an accurate, current, and comprehensive record retention schedule that lists records by major categories, subcategories, record type, and retention period, which retention period is appropriate to the specific record and consistent with applicable legal, regulatory, fiscal, and operational and business requirements;
(6)Include adequate security and internal controls to protect records from unauthorized access and data alteration; and
(7)Provide for adequate back-up and recovery of electronic records.
(b)*Training.* The record retention program shall provide for training of and notice to all employees on a periodic basis on their record retention responsibilities, including instruction regarding penalties provided by law for the unlawful removal or destruction of records. The record retention program also shall provide for training for the agents or independent contractors of an Enterprise, as appropriate, consistent with their respective roles and responsibilities to the Enterprise. § 1732.7 Record hold.
(a)*Definition.* For purposes of this part, the term “record hold” means a requirement, an order, or a directive from an Enterprise or OFHEO that the Enterprise is to retain records relating to a particular issue in connection with an actual or a potential OFHEO examination, investigation, enforcement proceeding, or litigation of which the Enterprise has received notice from OFHEO.
(b)*Notification by Enterprise.* The record retention program of an Enterprise shall:
(1)Address how employees and, as appropriate, how agents or independent contractors consistent with their respective roles and responsibilities to the Enterprise, will receive prompt notification of a record hold;
(2)Designate an individual to communicate specific requirements and instructions, including, when necessary, the instruction to cease immediately any otherwise permissible destruction of records; and,
(3)Provide that any employee and, as appropriate, any agent or independent contractor consistent with his or her respective role and responsibility to the Enterprise, who has received notice of a potential investigation, enforcement proceeding, or litigation by OFHEO involving the Enterprise or an employee, or otherwise has actual knowledge that an issue is subject to such an investigation, enforcement proceeding or litigation, shall notify immediately the legal department of the Enterprise and shall retain any records that may be relevant in any way to such investigation, enforcement proceeding, or litigation.
(c)*Method of record retention.* The record retention program of an Enterprise shall address the method by which the Enterprise will retain records during a record hold. Specifically, the program shall describe the method for the continued preservation of electronic records, including e-mails, and the conversion of records from paper to electronic format as well as any alternative storage method.
(d)*Access to and retrieval of records.* The record retention program of an Enterprise shall ensure access to and retrieval of records by the Enterprise and access, upon request, by OFHEO, during a record hold. Such access shall be by reasonable means, consistent with the nature and availability of the records and existing information technology. §§ 1732.8-1732.9 [Reserved] Subpart C—Supervisory Action § 1732.10 Supervisory action.
(a)*Supervisory action.* Failure by an Enterprise to comply with this part may subject the Enterprise or the board members, officers, or employees thereof to supervisory action by OFHEO under the Act, including but not limited to cease-and-desist proceedings, temporary cease-and-desist proceedings, and civil money penalties.
(b)*No limitation of authority.* This part does not limit or restrict the authority of OFHEO to act under its safety and soundness mandate, in accordance with the Act. Such authority includes, but is not limited to, conducting examinations, requiring reports and disclosures, and enforcing compliance with applicable laws, rules, and regulations. Dated: October 23, 2006. James B. Lockhart, III, Director, Office of Federal Housing Enterprise Oversight. [FR Doc. E6-18034 Filed 10-26-06; 8:45 am] BILLING CODE 4220-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2005-21968; Directorate Identifier 2005-NM-077-AD; Amendment 39-14798; AD 2006-22-01] RIN 2120-AA64 Airworthiness Directives; Boeing Model 757-200, -200CB, and -300 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, -200CB, and -300 series airplanes. This AD requires repetitive detailed inspections for proper functioning of the girt bar leaf springs for the escape slides to ensure the leaf springs retain the sliders and the required 0.37-inch minimum engagement between the sliders and floor fittings is achieved at passenger doors 1, 2, and 4, and corrective actions if necessary. This AD results from a report that the escape slides failed to deploy correctly during an operator's tests of the escape slides. We are issuing this AD to prevent escape slides from disengaging from the airplane during deployment or in use, which could result in injuries to passengers or flightcrew. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of December 1, 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 service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Patrick Gillespie, Aerospace Engineer, Cabin Safety and Environmental Systems Branch, ANM-150S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)917-6429; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the 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 supplemental notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to certain Boeing Model 757-200, -200CB, and -300 series airplanes. That supplemental NPRM was published in the **Federal Register** on May 19, 2006 (71 FR 29092). That supplemental NPRM proposed to require repetitive detailed inspections for proper functioning of the girt bar leaf springs for the escape slides to ensure the leaf springs retain the sliders and the required 0.37-inch minimum engagement between the sliders and floor fittings is achieved at passenger doors 1, 2, and 4, and corrective actions if necessary. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Support for the Supplemental NPRM Boeing supports the contents of the supplemental NPRM. Request To Clarify Prohibition for Bending Girt Bar One commenter, a private citizen, states that it is unclear what to do if the subject girt bar retention leaf springs are bent before the effective date of the AD. The commenter states that it is virtually impossible to determine if such springs were bent before. Therefore, the commenter requests that we clarify paragraphs
(f)and
(g)of the supplemental NPRM if the intent is to prohibit bending of the spring in the future. The commenter suggests that we revise the final rule to add the following words to paragraphs
(f)and (g): “* * * this AD does not allow that procedure from the effective date of this AD.” We disagree that it is necessary to change paragraphs
(f)and
(g)of the final rule to add the suggested wording. Both paragraphs prohibit bending the girt bar during the actions accomplished in accordance with this AD, which are required within 24 months after the effective date of this AD. Therefore, the paragraphs already prohibit bending the girt bars as of the effective date of the actions in the AD. We have not changed the AD in this regard. Explanation of Change to Paragraph
(g)Paragraph
(g)of the NPRM referred to the paragraph titled “Part 2—‘Inspection’ ” in Boeing Special Attention Service Bulletin 757-52-0085, dated March 24, 2005; and Boeing Special Attention Service Bulletin 757-52-0086, dated March 24, 2005. However that paragraph title is not included in Boeing Special Attention Service Bulletin 757-52-0085. Therefore, we have changed paragraph
(g)of the AD to remove the reference to the paragraph titled “Part 2—‘Inspection’ ” in the service bulletins. The requirement to do an “approved equivalent procedure” in accordance with the applicable chapter/section of the Boeing 757 AMM or Boeing 757 CMM specified in the applicable service bulletin remains. Conclusion We have carefully reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD with the change described previously. We have determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance There are about 944 airplanes of the affected design in the worldwide fleet. This AD affects about 632 airplanes of U.S. registry. The inspection takes about 2 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the AD for U.S. operators is $101,120, or $160 per airplane, per inspection cycle. Interim Action We consider this AD interim action. If final action is later identified, we may consider further rulemaking then. 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): **2006-22-01 Boeing:** Amendment 39-14798. Docket No. FAA-2005-21968; Directorate Identifier 2005-NM-077-AD. Effective Date
(a)This AD becomes effective December 1, 2006. Affected ADs
(b)None. Applicability
(c)This AD applies to Boeing Model 757-200 and -200CB series airplanes, certificated in any category, as identified in Boeing Special Attention Service Bulletin 757-52-0085, dated March 24, 2005; and Boeing Model 757-300 series airplanes, certificated in any category, as identified in Boeing Special Attention Service Bulletin 757-52-0086, dated March 24, 2005. Unsafe Condition
(d)This AD results from a report that the escape slides failed to deploy correctly during an operator's tests of the escape slides. We are issuing this AD to prevent escape slides from disengaging from the airplane during deployment or in use, which could result in injuries to passengers or flightcrew. 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. Detailed Inspection and Corrective Actions
(f)Within 24 months after the effective date of this AD: Do a detailed inspection for inadequate spring retention force and inadequate girt bar slider dimensions of the girt bar leaf springs for the escape slides at passenger doors 1, 2, and 4; and do any applicable corrective actions before further flight. Do all the actions in accordance with the Accomplishment Instructions of the applicable service bulletin in paragraph (f)(1) or (f)(2) of this AD, except as provided by paragraph
(g)of this AD. Where the airplane maintenance manuals
(AMMs)and component maintenance manuals
(CMMs)referenced by the applicable service bulletin include procedures that allow bending the girt bar retention spring, this AD does not allow that procedure. Repeat the inspection thereafter at intervals not to exceed 24 months, or after each maintenance task where removal of and installation of the girt bar is necessary, whichever occurs earlier.
(1)For Boeing Model 757-200 and -200CB series airplanes: Boeing Special Attention Service Bulletin 757-52-0085, dated March 24, 2005.
(2)For Boeing Model 757-300 series airplanes: Boeing Special Attention Service Bulletin 757-52-0086, dated March 24, 2005. Equivalent Procedures
(g)Where the applicable service bulletin specified in paragraph (f)(1) or (f)(2) of this AD specifies that actions may be accomplished in accordance with an “approved equivalent procedure”: The corrective actions must be accomplished in accordance with the applicable chapter/section of the Boeing 757 AMM or Boeing 757 CMM specified in the applicable service bulletin. Where the AMMs and CMMs include procedures that allow bending the girt bar retention spring, this AD does not allow that procedure. Alternative Methods of Compliance (AMOCs) (h)(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. Material Incorporated by Reference
(i)You must use Boeing Special Attention Service Bulletin 757-52-0085, dated March 24, 2005; or Boeing Special Attention Service Bulletin 757-52-0086, dated March 24, 2005; as applicable; 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 these documents 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 October 11, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17656 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-25088; Directorate Identifier 2006-NM-085-AD; Amendment 39-14799; AD 2006-22-02] RIN 2120-AA64 Airworthiness Directives; Airbus Model A300 B4-600, B4-600R, and F4-600R Series Airplanes, and Model A300 C4-605R Variant F Airplanes (Collectively Called A300-600 Series 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 certain Airbus Model A300-600 series airplanes. That AD currently requires an inspection for evidence of chafing between the hydraulic flexible hose and the ram air turbine
(RAT)hub, and related investigative and corrective actions if necessary. This new AD extends the applicability to include all Model A300-600 series airplanes that are equipped with a certain RAT. This AD results from reports of holes in the RAT hub cover. We are issuing this AD to prevent a hole in the RAT hub cover. A hole in the RAT hub cover could allow water to enter the RAT governing mechanism, freeze during flight, and jam the governing mechanism. In addition, the metal particles that result from chafing between the hydraulic flexible hose and the RAT could mix with the lubricant grease and degrade the governing mechanism. In an emergency, a jammed or degraded RAT could result in its failure to deploy, loss of hydraulic pressure or electrical power to the airplane, and consequent reduced controllability of the airplane. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of December 1, 2006. On August 26, 2005 (70 FR 42267, July 22, 2005), the Director of the Federal Register approved the incorporation by reference of Airbus Service Bulletin A300-29-6054, Revision 01, excluding Appendix 01, dated November 4, 2004. 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 Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Dan Rodina, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-2125; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(AD)docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that supersedes AD 2005-15-05, amendment 39-14194 (70 FR 42267, July 22, 2005). The existing AD applies to certain Airbus Model A300-600 series airplanes. That NPRM was published in the **Federal Register** on June 21, 2006 (71 FR 35575). That NPRM proposed to require an inspection for evidence of chafing between the hydraulic flexible hose and the ram air turbine
(RAT)hub, and related investigative and corrective actions if necessary. 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 Provide Chafe Limits in the AD Air Transport Association
(ATA)of America, on behalf of its member, FedEx, requests that we provide the chafe limits for the RAT hub cover in the AD to ensure clarity for compliance purposes. FedEx points out that Airbus Service Bulletin A300-29-6054, Revision 02, dated January 12, 2006 (the appropriate source of service information for accomplishing the required actions), specifies evaluating any damage to the hub cover in accordance with Hamilton Sundstrand Component Maintenance Manual
(CMM)29-21-21. FedEx reviewed CMM 29-21-21 and did not find any discussion of chafing damage. FedEx points out that the CMM addresses only dent limits and scratches. FedEx also points out that, for scratches, the CMM gives repair instructions for those under 0.005 inch in depth or requires replacement, but the CMM gives no serviceable limit. FedEx would like to know if it can assume, since chafing is not specifically addressed in the CMM, that the RAT must be removed immediately and replaced, or if the scratch damage criteria apply. FedEx queried both Hamilton Sundstrand and Airbus for clarification, but states that no publications have yet been revised to provide a reasonable amount of clarity. Since we issued the NPRM, Hamilton Sundstrand incorporated into CMM 29-21-21, dated March 6, 2006, values that clarify the damage limits for the RAT hub cover, as follows: • Check criteria, page 505 (check number 35); and • Repair, page 601 (repair number 16). CMM 29-21-21 and Airbus Service Bulletin A300-29-6054, Revision 02, state that all external scores, smooth dents, and abrasions that do not include cracks, and that meet the requirement of Flag 1 and Flag 2 of CMM 29-21-21, Figure 818, are acceptable and do not require further action. If damage exceeds the limits provided in Figure 818 of the CMM, the CMM specifies that the cover should be repaired in accordance with CMM 29-21-21, repair number 13. Otherwise, the CMM specifies that the RAT be replaced. Both the CMM and paragraph
(f)of the NPRM specify that repair and replacement must be done before further flight. However, operators may request approval of an alternative method of compliance
(AMOC)by following the procedures in paragraph
(h)of this AD. Since the CMM is secondary reference material, no change to the final rule is needed. Request To Change Compliance Time ATA, on behalf of its member, FedEx, requests that the time allotted for operators to accomplish the inspections be increased from 2,500 flight hours to 3,500 flight hours after the effective date of this AD. FedEx states that its A300 maintenance program currently requires heavy maintenance (C-check) to be performed at the earlier of every 3,500 flight hours or 30 months. FedEx states that, since this RAT inspection has the potential for component replacement that cannot be performed at most line maintenance stations because of test equipment requirements, the longer compliance time would help FedEx to align the work with currently scheduled heavy maintenance checks. This longer compliance time would allow FedEx an additional 200 days (according to its utilization rate) to do the inspection in a heavy maintenance environment. FedEx notes that it began doing the inspections specified in the NPRM in June 2006, but has yet to experience any chafing problems. We do not agree with the commenter's request to change the compliance time. In developing an appropriate compliance time for this action, we considered the urgency associated with the subject unsafe condition, the availability of required parts, and the practical aspect of accomplishing the required modification within a period of time that corresponds to the normal scheduled maintenance for most affected operators. However, operators may request approval of an alternative method of compliance
(AMOC)by following the procedures in paragraph
(h)of this AD to request a different compliance time if the request includes data that prove that the new compliance time would provide an acceptable level of safety. We have not changed the final rule in this regard. Conclusion We have carefully reviewed the available data, including the comments that have been submitted, and determined that air safety and the public interest require adopting the AD as proposed. 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 Cost per airplane Number of U.S.-registered airplanes Fleet cost Inspection 1 $80 $80 120 $9,600 Rework binding 1 80 80 120 9,600 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 removing amendment 39-14194 (70 FR 42267, July 22, 2005) and by adding the following new airworthiness directive (AD): **2006-22-02 Airbus:** Amendment 39-14799. Docket No. FAA-2006-25088; Directorate Identifier 2006-NM-085-AD. Effective Date
(a)This AD becomes effective December 1, 2006. Affected ADs
(b)This AD supersedes AD 2005-15-05. Applicability
(c)This AD applies to Airbus Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-622R, and C4-605R Variant F airplanes; certificated in any category; equipped with a Hamilton Sundstrand Ram Air Turbine (RAT). Unsafe Condition
(d)This AD results from reports of holes in the ram air turbine
(RAT)hub cover. We are issuing this AD to prevent a hole in the RAT hub cover. A hole in the RAT hub cover could allow water to enter the RAT governing mechanism, freeze during flight, and jam the governing mechanism. In addition, the metal particles that result from chafing between the hydraulic flexible hose and the RAT could mix with the lubricant grease and degrade the governing mechanism. In an emergency, a jammed or degraded RAT could result in its failure to deploy, loss of hydraulic pressure or electrical power to the airplane, and consequent 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 the Requirements of AD 2005-15-05 With Compliance Times for New Airplanes Inspection and Related Investigative/Corrective Actions
(f)At the applicable time specified in paragraph (f)(1) or (f)(2) of this AD: Do a one-time detailed inspection for evidence of chafing between the hydraulic flexible hose and the RAT hub, and any applicable related investigative and corrective actions, by accomplishing all of the applicable actions specified in the Accomplishment Instructions of Airbus Service Bulletin A300-29-6054, Revision 01, excluding Appendix 01, dated November 4, 2004; or Revision 02, excluding Appendix 01, dated January 12, 2006. After the effective date of this AD, only Revision 02 of the service bulletin may be used. Any applicable corrective actions must be accomplished before further flight. Where the service bulletins specify to submit certain information to the manufacturer, and to submit damaged RATs to the vendor or a repair station, this AD does not include those requirements.
(1)For airplanes having serial numbers (S/Ns) 0812, 0813, 0815 through 0818 inclusive, 0821 through 0828 inclusive, and 0836 through 0838 inclusive: Within 2,500 flight hours after August 26, 2005 (the effective date of AD 2005-15-05).
(2)For airplanes not identified in paragraph (f)(1) of this AD: Within 2,500 flight hours after the effective date of this AD. 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.” Actions Accomplished Previously
(g)Actions accomplished before the effective date of this AD, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A300-29-6054, excluding Appendix 01, dated June 8, 2004, are acceptable for compliance with the corresponding actions specified in this AD. Alternative Methods of Compliance (AMOCs) (h)(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.
(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)AMOCs approved previously in accordance with AD 2005-15-05 are approved as AMOCs for the corresponding provisions of this AD. Related Information
(i)French airworthiness directive F-2006-035, dated February 1, 2006, also addresses the subject of this AD. Material Incorporated by Reference
(j)You must use Airbus Service Bulletin A300-29-6054, Revision 01, excluding Appendix 01, dated November 4, 2004; or Airbus Service Bulletin A300-29-6054, Revision 02, excluding Appendix 01, dated January 12, 2006; to perform the actions that are required by this AD, unless the AD specifies otherwise.
(1)The Director of the Federal Register approved the incorporation by reference of Airbus Service Bulletin A300-29-6054, Revision 02, excluding Appendix 01, dated January 12, 2006, in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
(2)On August 26, 2005 (70 FR 42267, July 22, 2005), the Director of the Federal Register approved the incorporation by reference of Airbus Service Bulletin A300-29-6054, Revision 01, excluding Appendix 01, dated November 4, 2004.
(3)Contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, 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 October 11, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17657 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2005-21343; Directorate Identifier 2004-NM-117-AD; Amendment 39-14800; AD 2006-22-03] RIN 2120-AA64 Airworthiness Directives; Airbus Model A300 B4-600, B4-600R, and F4-600R Series Airplanes, and Model C4-605R Variant F Airplanes (Collectively Called A300-600 Series Airplanes); and Model A310 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 Airbus models, as specified above. This AD requires modifying the aft pressure bulkhead for improved corrosion protection and drainage, and related concurrent actions. This AD results from severe corrosion found in the lower rim area of the aft pressure bulkhead during routine maintenance of an airplane. We are issuing this AD to prevent corrosion on the inner rim angle and cleat profile splice of the aft pressure bulkhead, which could result in the loss of airplane structural integrity. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of December 1, 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 Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Tom Stafford, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-1622; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(AD)docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to certain Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model C4-605R Variant F airplanes (collectively called A300-600 series airplanes); and Model A310 series airplanes. That NPRM was published in the **Federal Register** on June 3, 2005 (70 FR 32547). That NPRM proposed to require modifying the aft pressure bulkhead for improved corrosion protection and drainage, and related concurrent actions. Actions Since NPRM Was Issued Since we issued the NPRM, Airbus has released Service Bulletin A310-53-2025, Revision 06, dated August 3, 2006. In the NPRM, we referred to Airbus Service Bulletin A310-53-2025, Revision 5, dated March 24, 1989, as the appropriate source of service information for modifying the aft pressure bulkhead to improve the fatigue life of the attachment angles at frame (FR)80/82 on Model A310 series airplanes. The procedures in Revision 06 are essentially the same as those in Revision 5. Therefore, we have revised Table 1 of this AD to refer to Revision 06 as the appropriate source of service information for accomplishing the modification on Model A310 series airplanes. We have also added a new paragraph
(k)to this AD, which gives credit for actions accomplished before the effective date of this AD in accordance with Revision 5. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Request To Use Alternative Sealant FedEx requests that we revise the NPRM to identify an alternative to sealant PR-2752 (consumable material list
(CML)09-035), since it is not available from any worldwide source. FedEx states that Airbus has identified an alternative sealant for use on FedEx's airplanes. However, that sealant has an 1,800-flight-cycle life limit, which creates an undue burden on FedEx's operational planning of airplane downtime and resources. FedEx also states that the FAA issued alternative method of compliance
(AMOC)letter ANM-116-04-175, dated May 27, 2004, allowing use of that same alternative sealant, which requires repetitively resealing the applicable areas within intervals of 1,800 flight cycles. FedEx asserts that sealant PR-2752, due to its brittleness and low elongation properties, tends to separate from the structure, creating a moisture trap that leads to corrosion. FedEx proposes substituting sealant PR-2752 with an epoxy adhesive like 3M Scotch-Weld EC-2216 to maintain an adequate level of safety and meet design parameters. We partially agree. Since we issued the NPRM, Airbus has identified another alternative to sealant PR-2752. Sealant MC-650B (CML 09-056), from Chemetall, should be available in December of 2006. Airbus Service Bulletin A310-53-2025, Revision 06, which we described previously, already specifies using MC-650B. Although Airbus Service Bulletin A300-53-6006, Revision 3, dated March 24, 1989, specifies using sealant PR-2752, Airbus does not intend to revise this service bulletin because all affected Model A300-600 series airplanes have been modified already. Airbus has advised us that it does intend to revise Airbus Service Bulletins A300-53-6017 and A310-53-2036, both Revision 02, both dated February 25, 2004, to specify using sealant MC-650B. We have revised paragraph
(g)of this AD to allow use of sealant MC-650B as an alternative to sealant PR-2752. Request To Withdraw NPRM FedEx requests that we withdraw the NPRM. As justification, FedEx states that, due to the complex structural configuration of the aft pressure bulkhead between FR80 and FR82 and the use of several different compounds for modification of the drain hole, the referenced service bulletins in the NPRM need to identify additional work instructions and substitute materials. In addition, FedEx asserts that removal of sealants, especially sealant PR-2752, could cause more surface protection damage because of the complexity of the joint. FedEx further requests that we coordinate with the Direction Generale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, to ask Airbus to develop a better solution for the application of corrosion-inhibiting compounds and sealants in the discrepant area. We do not agree to withdraw the NPRM. As stated previously, Airbus has either revised or intends to revise the referenced service bulletins to identify an alternative sealant. Also, the revised service bulletins use specific indicators and criteria to avoid removing the sealant if it is not necessary. These changes should alleviate the complexity of the service bulletins. We have not changed this AD in this regard. Request To Harmonize Various Service Bulletins and ADs FedEx requests that we harmonize the modification and inspection programs of several service bulletins and ADs that address corrosion in the aft pressure bulkhead. For Model A300-600 series airplanes, FedEx cites Airbus Service Bulletins A300-53-6006, Revision 3, dated March 24, 1989; A300-53-6017, Revision 02, dated February 25, 2004; and A300-53-6136, dated October 27, 2004. For Model A310 series airplanes, FedEx cites Airbus Service Bulletins A310-53-2025, Revision 5, dated March 24, 1989; A310-53-2036, Revision 02, dated February 25, 2004; and A310-53-2114, dated October 27, 2004. FedEx also cites AD 88-06-03, amendment 39-5871 (53 FR 7730, March 10, 1988), and AD 98-19-22, amendment 39-10763 (63 FR 49656, September 17, 1998). We disagree and have not revised this AD in this regard. Although the various service bulletins and ADs involve work in the area of the aft pressure bulkhead, they address unsafe conditions related to either corrosion or fatigue. Also, the affected airplanes in the various service bulletins and ADs are different. This AD and AD 88-06-03 both refer to Airbus Service Bulletin A310-53-2025 as the appropriate source of service information for modifying the attachment of the rear pressure bulkhead to FR80/82. This AD requires Revision 06 of that service bulletin, while AD 88-06-03 requires the original issue, dated April 21, 1986, or Revision 3, dated April 7, 1987. However, we specified in the NPRM that paragraph
(i)of this AD provides credit for accomplishment of paragraph A.2. of AD 88-06-03. AD 88-06-03 also refers to Airbus Service Bulletin A310-53-2024, Revision 1, dated June 20, 1986; or Revision 3, dated February 17, 1987; as appropriate sources of service information for accomplishing repetitive inspections of the rear pressure bulkhead for cracks. We issued AD 88-06-03 to improve the fatigue life of the attachment angles at FR80/82 on certain Model A310 series airplanes. AD 98-19-22 refers to Airbus Service Bulletins A300-53-6066 and A310-53-2092, both dated October 16, 1996; and Revision 01, both dated March 11, 1998; as appropriate sources of service information for accomplishing repetitive inspections to detect corrosion of the lower rim area of the aft pressure bulkhead. After we issued AD 98-19-22, severe corrosion was found on certain airplanes that were inspected previously in accordance with that AD. Based on those findings, we determined that the inspection methods in AD 98-19-22 were obsolete and inadequate, and that a new inspection program was necessary. Subsequently, we issued AD 2005-26-16, amendment 39-14437 (70 FR 77307, December 30, 2005), to supersede AD 98-19-22. The inspections required by AD 98-19-22, which refers to Airbus Service Bulletins A300-53-6066 and A310-53-2092, were not retained in AD 2005-26-16. AD 2005-26-16 instead refers to Airbus Service Bulletins A300-53-6136, Revision 01, dated July 18, 2005; and A310-53-2114, Revision 01, dated September 1, 2005; as the appropriate sources of service information for accomplishing the actions in that AD. Further, Airbus has informed us that it issued Airbus Service Bulletins A300-53-6136 and A310-53-2114 to supersede Airbus Service Bulletins A300-53-6066 and A310-53-2092. The table below provides an overview of the ADs we have issued. AD— Refers to airbus service bulletin— Requiring— Addressing— 88-06-03 A310-53-2024, Revision 1 and Revision 3 Repetitive inspections Fatigue. A310-53-2025, original issue and Revision 3 Modification Fatigue. 98-19-22 (superseded by AD 2005-26-16) A300-53-6066, original issue and Revision 01 Repetitive inspections Corrosion. A310-53-2092, original issue and Revision 01 Repetitive inspections Corrosion. 2005-26-16 A300-53-6136, Revision 01 Repetitive inspections with reduced intervals Corrosion. A310-53-2114, Revision 01 Repetitive inspections with reduced intervals Corrosion. This AD A300-53-6017, Revision 02 A310-53-2036, Revision 02 A300-53-6006, Revision 3 A310-53-2025, Revision 06 Modification Modification Modification Modification Corrosion. Corrosion. Fatigue. Fatigue. Request for Credit for Airbus Service Bulletins A300-53-6066 and A310-53-2092 FedEx requests that we give credit for accomplishment of Airbus Service Bulletins A300-53-6066 and A310-53-2092. FedEx states that these service bulletins are referenced in AD 98-19-22 and also involve the lower rim area of the pressure bulkhead. We disagree. As discussed previously, the repetitive inspections specified in Airbus Service Bulletins A300-53-6066 and A310-53-2092 are obsolete and inadequate for addressing corrosion at the lower rim area of the rear pressure bulkhead. Further, the referenced service bulletins in this AD are intended to not only improve the corrosion protection at the lower rim area of the aft pressure bulkhead, but to also improve the fatigue life of the attachment angles at FR80/82. We have not changed this AD in this regard. Request To Refer to Airbus Service Bulletins A300-53-6136 and A310-53-2114 FedEx requests that we revise Table 1 of the NPRM to refer to Airbus Service Bulletins A300-53-6136 and A310-53-2114, both dated October 27, 2004, instead of Airbus Service Bulletins A300-53-6006, Revision 3, dated March 24, 1989 (for Model A300-600 series airplanes); and A310-53-2025, Revision 5, dated March 24, 1989 (for Model A310 series airplanes). (In the NPRM, we referred to Airbus Service Bulletins A300-53-6006, Revision 3; and A310-53-2025, Revision 5; as appropriate sources of service information for accomplishing certain related concurrent actions.) As justification, FedEx states that Airbus Service Bulletins A300-53-6136 and A310-53-2114 were issued to address incomplete adhesion of sealant and damage caused to surface protection during cleaning of the drain hole, or during accomplishment of Airbus Service Bulletins A300-53-6006 and A310-53-2025. FedEx states that Airbus Service Bulletins A300-53-6136 and A310-53-2114 also involve inspections for corrosion in the lower rim angle area of the rear pressure bulkhead. FedEx further requests that we coordinate with Airbus and the DGAC to address the apparent discrepancy between Airbus Service Bulletins A300-53-6136 and A300-53-6006 and between Airbus Service Bulletins and A310-53-2025 and A310-53-2114. We do not agree to refer to Airbus Service Bulletins A300-53-6136 and A310-53-2114 in this AD. As stated previously, AD 2005-26-16 mandates accomplishment of Revision 01 of Airbus Service Bulletins A300-53-6136 and A310-53-2114, as applicable. Airbus has informed us that Airbus Service Bulletins A300-53-6136 and A310-53-2114 were issued to address corrosion prevention, while Airbus Service Bulletins A300-53-6006 and A310-53-2025 were issued to address an unsafe condition caused by fatigue. Airbus has also informed us that Airbus Service Bulletins A300-53-6136 and A310-53-2114 mention accomplishment of 6767yttyyAirbus Service Bulletins A300-53-6006 and A310-53-2025 only as possible sources for corrosion if surface protection is damaged. Airbus states that the service bulletins must be accomplished independently of each other. Therefore, we have not changed this AD in this regard. Request for Credit for Airbus Service Bulletin A300-53-0218 The Air Transport Association (ATA), on behalf of its member ASTAR Air Cargo (ASTAR), questions the basis of the NPRM since Airbus has issued Service Bulletin A300-53-0218, Revision 02, dated May 10, 2005. ASTAR states that it has accomplished Revision 02 of the service bulletin and intends to use it to show compliance with the proposed requirements of the NPRM. We infer that ASTAR would like us to revise this AD to allow Airbus Service Bulletin A300-53-0218, Revision 02, as an acceptable method of compliance. We do not agree that Revision 02 of Airbus Service Bulletin A300-53-0218 is acceptable for complying with the requirements of this AD. For Model A300-600 series airplanes, this AD requires accomplishment of Airbus Service Bulletins A300-53-6017, Revision 02; and A300-53-6006, Revision 3. Airbus Service Bulletin A300-53-6017 describes procedures for improving the corrosion protection at the aft pressure bulkhead and enlarging the drainholes for improved drainage. Airbus Service Bulletin A300-53-6006 describes procedures for modifying the aft pressure bulkhead to improve the fatigue life of the attachment angles at FR80/82. Airbus Service Bulletin A300-53-0218 describes procedures for inspecting for corrosion and cracks in the upper rim area of the rear pressure bulkhead aft face, between stringer
(STGR)26 left-hand
(LH)and right-hand
(RH)and all service apertures, and removing corrosion and repairing as necessary. The service bulletins address different issues; therefore, we have not changed this AD in this regard. We point out that Airbus Service Bulletin A300-53-218, Revision 1, July 28, 1989, is mandated by AD 90-03-08, amendment 39-6481 (55 FR 1799, January 19, 1990). That AD applies to all Model A300 airplanes. That AD requires repetitive inspections for cracking and corrosion in the lower rim area of the rear pressure bulkhead and adjacent areas, repetitive inspections for cracking or corrosion in the service apertures and the upper rim area of the rear pressure bulkhead, and corrective actions if necessary. We issued AD 90-03-08 to prevent reduced structural capability of the fuselage and subsequent decompression of the airplane. Since we issued AD 90-03-08, we have issued an NPRM to supersede that AD. That NPRM was published in the **Federal Register** on August 1, 2006 (71 FR 43386). That NPRM refers to Revision 02 of Airbus Service Bulletin A300-53-0218 as the appropriate source of service information for accomplishing certain actions. The procedures in Revision 02 are essentially the same as those in Revision 1, except that Revision 02 reduces the repetitive intervals for the eddy current inspections of the auxiliary power unit
(APU)bleed-air line, removes certain airplanes from the inspection of the area between STGR 25 LH and RH, and removes certain airplanes from the inspection of the area between STGR 26 LH and RH. Clarification of AMOC Paragraph We have revised this action to clarify the appropriate procedure for notifying the principal inspector before using any approved AMOC on any airplane to which the AMOC applies. 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 The following table provides the estimated costs (at an average labor rate of $65 per hour) for U.S. operators to comply with this AD. Estimated Costs Models Action Work hours 1 Parts 1 Cost per airplane 1 Number of U.S.- registered airplanes Fleet cost 1 A300-600 series airplanes Modification Concurrent Actions 1 34 Between 590 and 660 $1,200 Between $2,442 and $9,884 $3,410 Between $40,792 and $52,784 0 0 $0. A310 series airplanes Modification Concurrent Actions 1 34 Between 590 and 660 $1,200 Between $2,442 and $9,884 $3,410 Between $40,792 and $52,784 52 52 $177,320. Between $2,121,184 and $2,744,768. 1 The number of work hours and estimated costs for concurrent actions depend on airplane configuration. 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): **2006-22-03 Airbus:** Amendment 39-14800. Docket No. FAA-2005-21343; Directorate Identifier 2004-NM-117-AD. Effective Date
(a)This AD becomes effective December 1, 2006. Affected ADs
(b)None. Applicability
(c)This AD applies to Airbus Model A300 B4-600, B4-600R, and F4-600R series airplanes, and Model C4-605R Variant F airplanes (collectively called A300-600 series airplanes); and Model A310 series airplanes; certificated in any category; except those modified in production by Airbus Modification 6788. Unsafe Condition
(d)This AD results from severe corrosion found in the lower rim area of the aft pressure bulkhead during routine maintenance of an airplane. We are issuing this AD to prevent corrosion on the inner rim angle and cleat profile splice of the aft pressure bulkhead, which could result in the loss of airplane structural integrity. 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. Service Bulletin References
(f)The term “service bulletin,” as used in this AD, means the Accomplishment Instructions of the following service bulletins listed in Table 1 of this AD, as applicable: Table 1.—Service Bulletin References Models Requirement Airbus service bulletin A300-600 series airplanes Paragraph
(g)of this AD Paragraph
(h)of this AD A300-53-6017, Revision 02, dated February 25, 2004. A300-53-6006, Revision 3, dated March 24, 1989. A310 series airplanes Paragraph
(g)of this AD Paragraph
(h)of this AD A310-53-2036, Revision 02, dated February 25, 2004. A310-53-2025, Revision 06, dated August 3, 2006. Modification To Improve Corrosion Protection and Drainage
(g)Within 60 months after the effective date of this AD, modify the aft pressure bulkhead for improved corrosion protection and drainage by doing all of the actions specified in the Accomplishment Instructions of the applicable service bulletin. Where the service bulletin specifies to use sealant PR-2752 (consumable material list
(CML)09-035), sealant MC-650B (CML 09-056) may be used. Concurrent Modification To Improve Attachment Angles
(h)Before or concurrently with accomplishing the modification required by paragraph
(g)of this AD, modify the aft pressure bulkhead to improve the fatigue life of the attachment angles at frame
(FR)80/82 by doing all of the actions specified in the Accomplishment Instructions of the applicable service bulletin. Where the service bulletin specifies doing a visual inspection around the entire circumference between FR80/82 and the aft pressure bulkhead for damaged filler, do a general visual inspection. Note 1: 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.” Credit for Concurrent Actions
(i)For Model A310 series airplanes, accomplishment of the actions specified in paragraph A.2. of AD 88-06-03, amendment 39-5871 (53 FR 7730, March 10, 1988), is considered acceptable for compliance with the requirements of paragraph
(h)of this AD. Credit for Previous Service Bulletins
(j)Actions done before the effective date of this AD in accordance with Airbus Service Bulletin A310-53-2036, Revision 01, dated October 9, 2003 (for Model A310 series airplanes), are acceptable for compliance with the requirements of paragraph
(g)of this AD.
(k)Actions done before the effective date of this AD in accordance with Airbus Service Bulletin A310-53-2025, Revision 5, dated March 24, 1989 (for Model A310 series airplanes), are acceptable for compliance with the requirements of paragraph
(h)of this AD. Alternative Methods of Compliance (AMOCs) (l)(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.
(2)Before using any AMOC approved in accordance with 14 CFR 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. Related Information
(m)French airworthiness directive F-2004-004, dated January 7, 2004, also addresses the subject of this AD. Material Incorporated by Reference
(n)You must use the applicable service information identified in Table 2 of this AD to perform the actions that are required by this AD, unless the AD specifies otherwise. Table 2.—Material Incorporated by Reference Service bulletin Revision level Date Airbus Service Bulletin, A300-53-6006 3 March 24, 1989. Airbus Service Bulletin, A300-53-6017 02 February 25, 2004. Airbus Service Bulletin, A310-53-2025 06 August 3, 2006. Airbus Service Bulletin, A310-53-2036 02 February 25, 2004. Airbus Service Bulletin, A300-53-6006, Revision 3, dated March 24, 1989, contains the following effective pages: Page Nos. Revision level shown on page Date shown on page 1, 29, 47, 48 3 March 24, 1989. 2-28, 30-46, 49-52 2 August 11, 1988. The Director of the Federal Register approved the incorporation by reference of these documents in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, 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 October 11, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17661 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. 2006-25221; Directorate Identifier 2006-NM-122-AD; Amendment 39-14804; AD 2006-22-07] RIN 2120-AA64 Airworthiness Directives; Airbus Model A300 and A310 Airplanes; and Airbus Model A300 B4-600, B4-600R, and F4-600R Series Airplanes, and Model C4-605R Variant F Airplanes (Collectively Called A300-600 Series Airplanes) AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for all Airbus Model A300 and A310 airplanes and A300-600 series airplanes. This AD requires inspecting for discrepancies of all electrical bundles located in the leading and trailing edges of the wings, and performing corrective actions if necessary. This AD results from fuel system reviews conducted by the manufacturer. We are issuing this AD to prevent an ignition source, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of December 1, 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 Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Tom Stafford, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-1622; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(AD)docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to all Airbus Model A300 and A310 airplanes and A300-600 series airplanes. That NPRM was published in the **Federal Register** on June 30, 2006 (71 FR 37512). That NPRM proposed to require inspecting for discrepancies of all electrical bundles located in the leading and trailing edges of the wings, and performing corrective actions if necessary. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comment received. Request To Change Incorporation of Certain Information The Modification and Replacement Parts Association (MARPA) states that, typically, airworthiness directives are based on service information originating with the type certificate holder or its suppliers. MARPA adds that manufacturer service documents are privately authored instruments generally having copyright protection against duplication and distribution. MARPA notes that when a service document is incorporated by reference into a public document, such as an airworthiness directive, it loses its private, protected status and becomes a public document. MARPA adds that if a service document is used as a mandatory element of compliance, it should not simply be referenced, but should be incorporated into the regulatory document; by definition, public laws must be public, which means they cannot rely upon private writings. MARPA adds that incorporated-by-reference service documents should be made available to the public by publication in the Document Management System (DMS), keyed to the action that incorporates them. MARPA notes that the stated purpose of the incorporated-by-reference method is brevity, to keep from expanding the **Federal Register** needlessly by publishing documents already in the hands of the affected individuals; traditionally, “affected individuals” means aircraft owners and operators, who are generally provided service information by the manufacturer. MARPA adds that a new class of affected individuals has emerged, since the majority of aircraft maintenance is now performed by specialty shops instead of aircraft owners and operators. MARPA notes that this new class includes maintenance and repair organizations, component servicing and repair shops, parts purveyors and distributors, and organizations manufacturing or servicing alternatively certified parts under part 21 of the Federal Aviation Regulations (14 CFR part 21), § 21.303 (parts manufacturer approval). MARPA adds that the concept of brevity is now nearly archaic as documents exist more frequently in electronic format than on paper. Therefore, MARPA asks that the service documents deemed essential to the accomplishment of the NPRM be incorporated by reference into the regulatory instrument, and published in the DMS. We do not agree that documents should be incorporated by reference during the NPRM phase of rulemaking. The Office of the Federal Register
(OFR)requires that documents that are necessary to accomplish the requirements of the AD be incorporated by reference during the final rule phase of rulemaking. This final rule incorporates by reference the documents necessary for the accomplishment of the requirements mandated by this AD. Further, we point out that while documents that are incorporated by reference do become public information, they do not lose their copyright protection. For that reason, we advise the public to contact the manufacturer to obtain copies of the referenced service information. Additionally, we do not publish service documents in DMS. We are currently reviewing our practice of publishing proprietary service information. Once we have thoroughly examined all aspects of this issue, and have made a final determination, we will consider whether our current practice needs to be revised. However, we consider that to delay this AD action for that reason would be inappropriate, since we have determined that an unsafe condition exists and that the requirements in this AD must be accomplished to ensure continued safety. Therefore, we have not changed the AD in this regard. Conclusion We have carefully reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD as proposed. Costs of Compliance This AD affects about 227 airplanes of U.S. registry. The actions take about 10 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the AD for U.S. operators is $181,600, or $800 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **2006-22-07 Airbus** : Amendment 39-14804. Docket No. FAA-2006-25221; Directorate Identifier 2006-NM-122-AD. Effective Date
(a)This AD becomes effective December 1, 2006. Affected ADs
(b)None. Applicability
(c)This AD applies to all Airbus Model A300 and A310 airplanes; and all Airbus Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, and F4-622R airplanes, and A300 C4-605R Variant F airplanes; certificated in any category. Unsafe Condition
(d)This AD results from fuel system reviews conducted by the manufacturer. We are issuing this AD to prevent an ignition source, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss 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. Service Bulletin References
(f)The term “service bulletin,” as used in this AD, means the Accomplishment Instructions of the following service bulletins, as applicable:
(1)For Model A300 airplanes: Airbus Service Bulletin A300-24-0102, including Appendix 01, dated December 15, 2005;
(2)For Model A310 airplanes: Airbus Service Bulletin A310-24-2095, including Appendix 01, dated December 15, 2005; and
(3)For Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, and F4-622R airplanes, and A300 C4-605R Variant F airplanes: Airbus Service Bulletin A300-24-6092, including Appendix 01, dated December 15, 2005. Inspections and Corrective Actions
(g)Within 44 months after the effective date of this AD, perform detailed inspections for discrepancies of all electrical bundles located in the leading and trailing edges of the wings, and all applicable corrective actions, by doing all of the actions in the service bulletin, except as provided by paragraph
(h)of this AD. All corrective actions must be done before further flight. 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.” Exception to Corrective Action Instructions
(h)If inadequate clearance is found between any electrical wire harness and adjacent components or structure: Before further flight, correct the inadequate clearance using a method approved by either the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency
(EASA)(or its delegated agent). Reporting
(i)Within 30 days after doing the inspections required by this AD, or within 30 days after the effective date of the AD, whichever is later: Submit a report of the findings (both positive and negative) of the inspections required by paragraph
(g)of this AD to Airbus Engineering, c/o SE-E54, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France. The report must include the airplane serial number or registration number, the number of flight cycles and flight hours on the airplane, the date of the inspection, the location of the defect, the conditions found, and the type of repair. Submitting Appendix 01 of the service bulletin to Airbus is acceptable for compliance with this requirement. Under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ), the Office of Management and Budget
(OMB)has approved the information collection requirements contained in this AD and has assigned OMB Control Number 2120-0056. Alternative Methods of Compliance (AMOCs) (j)(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.
(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. Related Information
(k)EASA airworthiness directive 2006-0076, dated April 3, 2006, also addresses the subject of this AD. Material Incorporated by Reference
(l)You must use Airbus Service Bulletin A300-24-0102, including Appendix 01, dated December 15, 2005; Airbus Service Bulletin A310-24-2095, including Appendix 01, dated December 15, 2005; or Airbus Service Bulletin A300-24-6092, including Appendix 01, dated December 15, 2005; as applicable; 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 these documents in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, 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 October 17, 2006. Jeffrey E. Duven, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17747 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-25171; Directorate Identifier 2006-CE-35-AD; Amendment 39-14807; AD 2006-22-10] RIN 2120-AA64 Airworthiness Directives; Schempp-Hirth GmbH & Co. KG Models Mini-Nimbus B and Mini-Nimbus HS-7 Sailplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive
(AD)for the products listed above. This AD results from mandatory continuing airworthiness information
(MCAI)issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as a failure in the flap actuating circuit. An investigation showed that the lever at the torsional drive in the fuselage failed at the weld. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of December 1, 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. FOR FURTHER INFORMATION CONTACT: Gregory Davison, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4130; facsimile:
(816)329-4090. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. The streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Discussion We issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on August 10, 2006 (71 FR 45744). That NPRM proposed to require reinforcing the flap drive. Comments We gave the public the opportunity to participate in developing this AD. We considered the comments received. Jack Buster with the Modification and Replacement Parts Association (MARPA) provides comments to the MCAI AD process pertaining to how the FAA addresses publishing manufacturer service information as part of a proposed AD action. The commenter states that the rule, as proposed, attempts to require compliance with a public law by reference to a private writing (as referenced in paragraph
(e)of the proposed AD). The commenter would like the FAA to incorporate by reference
(IBR)the Schempp-Hirth Flugzeugbau GmbH. Technical Note. We agree with Mr. Buster. However, we do not IBR any document in a proposed AD action, instead we IBR the document in the final rule. Since we are issuing the proposal as a final rule AD action, Schempp-Hirth Flugzeugbau GmbH. Technical Note No. 286-35/No. 328-13, EASA approved on: July 1, 2005, is incorporated by reference. Mr. Buster requests IBR documents be made available to the public by publication in the **Federal Register** or in the Docket Management System (DMS). We are currently reviewing issues surrounding the posting of service bulletins in the Department of Transportation's DMS as part of the AD docket. Once we have thoroughly examined all aspects of this issue and have made a final determination, we will consider whether our current practice needs to be revised. Conclusion We reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD as proposed. Differences Between this AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable in a U.S. court of law. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are described in a separate paragraph of the AD. These requirements, if any, take precedence over the actions copied from the MCAI. Costs of Compliance We estimate that this AD will affect 13 products of U.S. registry. We also estimate that it will take about 6 work-hours per product to comply with this AD. The average labor rate is $80 per work-hour. Required parts will cost about $13 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $6,409, or $493 per product. 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 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 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. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone
(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. 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 FAA amends § 39.13 by adding the following new AD: **2006-22-10 Schempp-Hirth Gmbh & Co. KG:** Amendment 39-14807; Docket No. FAA-2006-25171; Directorate Identifier 2006-CE-35-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective December 1, 2006. Affected ADs
(b)None. Applicability
(c)This AD applies to Models Mini-Nimbus B and Mini-Nimbus HS-7 sailplanes, all serial numbers, that are certificated in any U.S. category. Reason
(d)The mandatory continuing airworthiness information
(MCAI)states that the aircraft manufacturer has identified, during the daily check after assembling a Mini Nimbus C, a failure in the flap actuating circuit. An investigation showed that the lever at the torsional drive in the fuselage failed at the weld. If not corrected, this condition could lead to a failure in the flap actuating circuit, which could result in reduced controllability of the sailplane. Actions and Compliance
(e)Unless already done, do the following except as stated in paragraph
(f)below.
(1)Within the next 90 days after December 1, 2006 (the effective date of this AD), reinforce the flap drive.
(2)Do the reinforcement following Schempp-Hirth Flugzeugbau GmbH. Technical Note No. 286-35/No. 328-13, EASA approved on: July 1, 2005. FAA AD Differences
(f)None. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Staff, FAA, Small Airplane Directorate, ATTN: Gregory Davison, Aerospace Engineer, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4130; fax:
(816)329-4090, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.
(2)*Return to Airworthiness:* When complying with this AD, perform FAA-approved corrective actions before returning the product to an airworthy condition.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information
(h)This AD is related to German AD D-2005-239, Effective Date: July 22, 2005, which references Schempp-Hirth Flugzeugbau GmbH. Technical Note No. 286-35/No. 328-13, EASA approved on: July 1, 2005. Material Incorporated by Reference
(i)You must use Schempp-Hirth Flugzeugbau GmbH. Technical Note No. 286-35/No. 328-13, EASA approved on: July 1, 2005, to do the actions required by this AD, unless the AD specifies otherwise.
(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.
(2)For service information identified in this AD, contact Schempp-Hirth, Flugzeugbau GmbH, Postfach 14 43, D-73222 Kirchheim/Teck, Germany; telephone: ++ 49 7021 7298-0; fax: ++ 49 7021 7298-199; Web site: *http://www.schempp-hirth.com* , e-mail: *info@schempp-hirth.com* .
(3)You may review copies at the FAA, Central Region, Office of the Regional Counsel, 901 Locust, Room 506, Kansas City, Missouri 64106; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Issued in Kansas City, Missouri, on October 19, 2006. James E. Jackson, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17870 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-25841; Directorate Identifier 86-ANE-7; Amendment 39-14809; AD 2006-22-12] RIN 2120-AA64 Airworthiness Directives; Hartzell Propeller Inc. Model HC-B5MP-3( )/M10282A( )+6 and HC-B5MP-3( )/M10876( )( )( )( ) Five-Bladed Propellers. AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: The FAA is superseding an existing airworthiness directive
(AD)for Hartzell Propeller Inc. model HC-B5MP-3( )/M10282A( )+6 five-bladed propellers. That AD currently requires initial and repetitive torque check inspections on the mounting bolts on certain model Hartzell Propeller Inc. HC-B5MP-3( )/M10282A( )+6 five-bladed propellers, replacement of mounting bolts if necessary, and inspection and resurfacing of the engine and propeller mounting flanges if necessary. This AD requires the same actions but requires more detailed overhaul inspections and maintenance than the previous AD, AD 2004-21-01. This AD also adds Hartzell Propeller Inc. HC-B5MP-3( )/M10876( )( )( )( ) five-bladed propellers to the applicability. This AD results from reports of fretting wear still occurring between the engine and propeller mounting flanges. The fretting wear results in loss of mounting bolt preload, causing failure of the mounting bolts. We are issuing this AD to prevent propeller separation from the airplane. DATES: Effective November 13, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of November 13, 2006. We must receive any comments on this AD by December 26, 2006. ADDRESSES: Use one of the following addresses to comment on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Hartzell Propeller Inc. Technical Publications Department, One Propeller Place, Piqua, OH 45356; telephone
(937)778-4200; fax
(937)778-4391, for the service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Tim Smyth, Aerospace Engineer, Chicago Aircraft Certification Office, FAA, Small Airplane Directorate, 2300 East Devon Avenue, Des Plaines, IL 60018; *telephone:*
(847)294-7132; *fax:*
(847)294-7834. SUPPLEMENTARY INFORMATION: On October 4, 2004, the FAA issued AD 2004-21-01, Amendment 39-13822 (69 FR 62179, October 25, 2004). That AD requires initial and repetitive torque check inspections on the mounting bolts on certain model Hartzell Propeller Inc. model HC-B5MP-3( )/M10282A( )+6 five-bladed propellers, and replacement of mounting bolts if necessary. That AD also reduces compliance time from the previous AD, for the initial inspection on certain Short Brothers Ltd. Model SD3-30 airplanes to before further flight and within 100 hours time-in-service for propellers installed on certain Aerospatiale
(Nord)Model 262A airplanes. That AD also requires repetitive torque check inspections of mounting bolts at reduced intervals from the previous AD, on Model SD3-30 airplanes, and requires additional visual inspections of mounting flanges, threads in hub bolt holes, and replacement of mounting bolts and hubs, if necessary. That AD resulted from four reports in the previous 12 months of eleven cracked or failed propeller mounting bolts on Short Brothers Model SD3-30 airplanes. That condition, if not corrected, could result in propeller separation from the airplane. Actions Since AD 2004-21-01 Was Issued Since AD 2004-21-01 was issued, Hartzell Propeller Inc. reviewed the propeller mounting flange loads for all similar installations, including airplanes listed in Hartzell Propeller Inc. Alert Service Bulletin
(SB)No. A203A, which is incorporated by reference in the previous AD, AD 2004-21-01. Hartzell Propeller Inc. has now addressed all of the propeller models on affected airplanes in a later service bulletin, including those airplanes that generate higher propeller loads during normal flight operations. Relevant Service Information We have reviewed and approved the technical contents of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005. That SB describes procedures for performing initial and repetitive torque inspections of propeller mounting bolts, initial and repetitive inspections of the propeller mounting flange and engine mounting flange, and resurfacing of the flanges if necessary. FAA's Determination and Requirements of This AD The unsafe condition described previously is likely to exist or develop on other Hartzell Propeller Inc. model HC-B5MP-3( )/M10282A( )+6 and HC-B5MP-3( )/M10876( )( )( )( ) five-bladed propellers of the same type design. We are issuing this AD to prevent propeller separation from the airplane. This AD requires more detailed overhaul inspections and maintenance than the previous AD, AD 2004-21-01, for the airplane installations listed under paragraph
(c)of this AD. This AD requires initial and repetitive torque inspections of propeller mounting bolts, and initial and repetitive inspections of the propeller mounting flange and engine mounting flange, and resurfacing the flanges if necessary. You must use the service information described previously to perform the actions required by this AD. FAA's Determination of the Effective Date Since an unsafe condition exists that requires the immediate adoption of this AD, we have found that notice and opportunity for public comment before issuing this AD are impracticable, and that good cause exists for making this amendment effective in less than 30 days. Comments Invited This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to send us any written relevant data, views, or arguments regarding this AD. Send your comments to an address listed under ADDRESSES . Include “AD Docket No. FAA-2006-25841; Directorate Identifier 86-ANE-7” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify it. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this AD. Using the search function of the DMS Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78) or you may visit *http://dms.dot.gov* . Docket Number Change We are transferring the docket for this AD to the Docket Management System as part of our on going docket management consolidation efforts. The new Docket No. is FAA-2006-25841. The old Docket No. became the Directorate Identifier, which is 86-ANE-7. This final rule might get logged into the DMS docket, ahead of the previously collected documents from the old docket file, as we are in the process of sending those items to the DMS. Examining the AD Docket You may examine the docket that contains the AD, any comments received, and any final disposition in person at the Docket Management Facility Docket Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone
(800)647-5227) is located on the plaza level of the Department of Transportation Nassif Building at the street address stated in ADDRESSES . Comments will be available in the AD docket shortly after the DMS receives them. 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 the regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES . List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Under the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by removing Amendment 39-13822 (69 FR 62179, October 25, 2004), and by adding a new airworthiness directive, Amendment 39-14809, to read as follows: **2006-22-12 Hartzell Propeller Inc. (formerly Hartzell Propeller Products Division):** Amendment 39-14809. Docket No. FAA-2006-25841; Directorate Identifier 86-ANE-7. Effective Date
(a)This airworthiness directive
(AD)becomes effective November 13, 2006. Affected ADs
(b)This AD supersedes AD 2004-21-01. Applicability
(c)This AD applies to Hartzell Propeller Inc. model HC-B5MP-3( )/M10282A( )+6 and HC-B5MP-3( )/M10876( )( )( )( ) five-bladed propellers. These propellers are installed on the following: Airplane manufacturer Model Propeller/blade Supplemental type certificate Nord 262(A) Frakes (Mohawk) HC-B5MP-3(A)/M10282A(B)+6 SA2369SW Short Brothers SD3-30 (Sherpa) HC-B5MP-3A/M10282AB+6 Short Brothers SD3-60 HC-B5MP-3C/M10876ASK Short Brothers SD3-60-200 (Sherpa) HC-B5MP-3C/M10876ANSK PZL Mielec PZL-M18( ) (Dromader) HC-B5MP-3C/M10876(A)( ) SA1014GL
(d)The parentheses appearing in the propeller model number indicates the presence or absence of an additional letter(s) that varies the basic propeller model. This AD still applies regardless of whether these letters are present or absent in the propeller model designation. Unsafe Condition
(e)This AD results from reports of fretting wear still occurring between the engine and propeller mounting flanges. The fretting wear results in loss of mounting bolt preload, causing failure of the mounting bolts. The actions specified in this AD are intended to prevent propeller separation from the airplane. Compliance
(f)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done. Bolt Torque Inspections on Mounting Flanges Not Resurfaced
(g)If on the effective date of this AD, either the propeller mounting flange or the engine mounting flange has not been resurfaced using either Hartzell Propeller Inc. Alert Service Bulletin
(SB)No. A203A, dated January 5, 1995, or SB No. HC-SB-61-275, dated June 2, 2005; and either flange:
(1)Has 3,000 or more operating hours time-since-new (TSN), then:
(i)Perform a torque inspection of the propeller mounting bolts before further flight, if the bolt torque inspection has never been done.
(ii)For bolts last inspected using AD 2004-21-01, perform a torque inspection of the propeller mounting bolts within 120 operating hours from the last inspection, or from the effective date of this AD, whichever occurs first, unless already done.
(2)Has fewer than 3,000 operating hours TSN, then perform a torque inspection of the propeller mounting bolts upon reaching 3,000 operating hours TSN.
(h)Thereafter, repeat the torque inspections within every 120 operating hours.
(i)Use paragraphs 3.A. through 3.A.(4) of the Accomplishment Instructions of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005 to do the inspections.
(j)If the torque of any one bolt is found to be less than 90 ft-lbs, remove and inspect the propeller, and resurface the flanges as necessary.
(k)Use paragraphs 3.B. through 3.B.(5) of the Accomplishment Instructions of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005, to do the inspection and resurfacing. Replace all mounting bolts with new mounting bolts. Bolt Torque Inspections on Mounting Flanges Resurfaced
(l)If the propeller and engine mounting flanges have been resurfaced using either Hartzell Propeller Inc. Alert SB No. A203A, dated January 5, 1995, or SB No. HC-SB-61-275, dated June 2, 2005, and a fretting disk was not installed, then:
(1)Within 120 operating hours after reaching 1,500 operating hours from the time the flanges were last resurfaced, perform a torque inspection of the propeller mounting bolts.
(2)Thereafter, repeat the torque inspection within every 120 operating hours.
(3)Use paragraphs 3.A. through 3.A.(4) of the Accomplishment Instructions of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005 to do the inspections.
(m)If the torque of any one bolt is found to be less than 90 ft-lbs, remove and inspect the propeller, and resurface the flanges as necessary.
(n)Use paragraphs 3.B. through 3.B.(5) of the Accomplishment Instructions of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005 to do the inspection and resurfacing. Replace all mounting bolts with new mounting bolts. Inspection of Propeller and Engine Mounting Flanges
(o)If the propeller and engine mounting flanges have been resurfaced, using either Hartzell Propeller Inc. Alert SB No. A203A, dated January 5, 1995, or SB No. HC-SB-61-275, dated June 2, 2005, and a fretting disk was installed, then:
(1)Within 120 operating hours after reaching 1,500 operating hours from the time the flanges were last resurfaced, remove the propeller, and inspect the propeller and engine mounting flanges. Resurface the flanges if necessary and replace the fretting disk.
(2)Thereafter, remove the propeller and repeat the flange inspections within every 1,500 operating hours and replace the fretting disk.
(3)Use paragraphs 3.B. through 3.B.(5) of the Accomplishment Instructions of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005 to do the inspection and resurfacing. Replace all mounting bolts with new mounting bolts.
(p)Whenever the propeller is removed from the engine:
(1)Inspect the propeller and engine mounting flanges and resurface the flanges if necessary.
(2)Use paragraphs 3.B. through 3.B.(5) of the Accomplishment Instructions of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005 to do the inspection and resurfacing. Replace all mounting bolts with new mounting bolts.
(q)Whenever a propeller is removed from an engine to be installed on an airplane model not listed in this AD:
(1)Inspect the propeller and engine mounting flanges before installation and resurface the flanges if necessary.
(2)Use paragraphs 3.B. through 3.B.(5) of the Accomplishment Instructions of Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005 to do the inspection and resurfacing. Replace all mounting bolts with new mounting bolts. Alternative Methods of Compliance
(r)The Manager, Chicago Aircraft Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Material Incorporated by Reference
(s)You must use Hartzell Propeller Inc. SB No. HC-SB-61-275, dated June 2, 2005 to perform the actions required by this AD. The Director of the Federal Register approved the incorporation by reference of this service bulletin in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Hartzell Propeller Inc. Technical Publications Department, One Propeller Place, Piqua, OH 45356; telephone
(937)778-4200; fax
(937)778-4391, for a copy of this service information. You may review copies at the FAA, New England Region, Office of the Regional Counsel, 12 New England Executive Park, Burlington, MA; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Burlington, Massachusetts, on October 20, 2006. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E6-17925 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-25332; Directorate Identifier 2006-CE-40-AD; Amendment 39-14808; AD 2006-22-11] RIN 2120-AA64 Airworthiness Directives; EADS SOCATA Model TBM 700 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive
(AD)for the products listed above. This AD results from mandatory continuing airworthiness information
(MCAI)issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as unsatisfactory initial elevator trim actuator greasing, which may lead to the icing of the elevator trim and generate an untrimmed nose-up attitude after an autopilot disconnection. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of December 1, 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. FOR FURTHER INFORMATION CONTACT: Gunnar Berg, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4141; facsimile:
(816)329-4090. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. The streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Discussion We issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on June 19, 2006 (71 FR 35223). That NPRM proposed to require you to lubricate the elevator trim tab actuator rods without removal. Comments We gave the public the opportunity to participate in developing this AD. We considered the comments received. The Modification and Replacement Parts Association (MARPA) provides comments to the MCAI AD process pertaining to how the FAA addresses publishing manufacturer service information as part of a proposed AD action. The commenter states that the rule, as proposed, attempts to require compliance with a public law by reference to a private writing (as referenced in paragraph
(e)of the proposed AD). The commenter would like the FAA to incorporate by reference
(IBR)the EADS SOCATA service bulletin. We agree with the commenter. However, we do not IBR any document in a proposed AD action, instead we IBR the document in the final rule. Since we are issuing the proposal as a final rule AD action, EADS SOCATA TBM Aircraft Mandatory Service Bulletin SB70-124, Amendment 1, ATA No. 27, dated January 2005, is incorporated by reference. MARPA requests IBR documents be made available to the public by publication in the **Federal Register** or in the Docket Management System (DMS). We are currently reviewing issues surrounding the posting of service bulletins in the Department of Transportation's DMS as part of the AD docket. Once we have thoroughly examined all aspects of this issue and have made a final determination, we will consider whether our current practice needs to be revised. Celine Rouge, an Airworthiness Engineer at EADS SOCATA, states the language used in paragraph (e)(2) of the proposed AD may be confusing. Paragraph (e)(2) specifies doing the action required in paragraph (e)(1) of the AD following EADS SOCATA TBM Aircraft Mandatory Service Bulletin SB70-124, Amendment 1, ATA No. 27, dated January 2005. Celine Rouge states that in France, using the word “following” may lead people to believe they have to lubricate the elevator trim tab actuator rods without removal, which is the action required in paragraph (e)(1) of this AD, once more after they do the actions required in the service bulletin. Celine Rouge requests we change the word “following” to “in accordance with.” We use the word “following” and the phrase “in accordance with” interchangeably. We will change the final rule AD action to incorporate this wording. Conclusion We reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We determined that these changes will not increase the economic burden on any operator or increase the scope of the AD. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable in a U.S. court of law. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are described in a separate paragraph of the AD. These requirements, if any, take precedence over the actions copied from the MCAI. Costs of Compliance We estimate that this AD will affect 256 products of U.S. registry. We also estimate that it will take about 1 work-hour per product to comply with this AD. The average labor rate is $80 per work-hour. Required parts will cost about $8 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these parts. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $22,528, or $88 per product. 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 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 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. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone
(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. 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 FAA amends § 39.13 by adding the following new AD: **2006-22-11 EADS SOCATA:** Amendment 39-14808; Docket No. FAA-2006-25332; Directorate Identifier 2006-CE-40-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective December 1, 2006. Affected ADs
(b)None. Applicability
(c)This AD applies to the following Model TBM 700 airplanes that are certificated in any U.S. category: Serial numbers 1 through 32, 34, 36 through 69, 71 through 76, 79, 81 through 92, 96 through 98, 101, 102, 107 through 109, 112 through 114, 116, 118 through 124, 126 through 130, 132 through 135, 137, 138, 140 through 145, 148 through 155, 157, 158, 161 through 268, and 270 through 304. Reason
(d)The mandatory continuing airworthiness information
(MCAI)states that the aircraft manufacturer has determined that unsatisfactory initial elevator trim actuator greasing may lead to the icing of the elevator trim and generate an untrimmed nose-up attitude after an autopilot disconnection. If not corrected, this condition could result in pitch-up, out-of-trim condition when the autopilot is disconnected. Actions and Compliance
(e)Unless already done, do the following except as stated in paragraph
(f)below.
(1)Within the next 25 hours time-in-service after December 1, 2006 (the effective date of this AD), lubricate the elevator trim tab actuator rods without removal.
(2)Do the action required in paragraph (e)(1) of the AD in accordance with EADS SOCATA TBM Aircraft Mandatory Service Bulletin SB70-124, Amendment 1, ATA No. 27, dated January 2005. FAA AD Differences
(f)None. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Staff, FAA, Small Airplane Directorate, ATTN: Gunnar Berg, Aerospace Engineer, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:
(816)329-4141; fax:
(816)329-4090, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.
(2)*Return to Airworthiness:* When complying with this AD, perform FAA-approved corrective actions before returning the product to an airworthy condition.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information
(h)This AD is related to French AD No. F-2005-034, Issue date: February 16, 2005, which references EADS SOCATA TBM Aircraft Mandatory Service Bulletin SB70-124, Amendment 1, ATA No. 27, dated January 2005. Material Incorporated by Reference
(i)You must use EADS SOCATA TBM Aircraft Mandatory Service Bulletin SB70-124, Amendment 1, ATA No. 27, dated January 2005, to do the actions required by this AD, unless the AD specifies otherwise.
(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.
(2)For service information identified in this AD, contact EADS SOCATA, Direction des Services, 65921 Tarbes Cedex 9, France; telephone: 33 (0)5 62.41.73.00; fax: 33 (0)5 62.41.76.54; or SOCATA Aircraft, INC., North Perry Airport, 7501 Airport Road, Pembroke Pines, Florida 33023; *telephone:*
(954)893-1400; fax:
(954)964-4141.
(3)You may review copies at the FAA, Central Region, Office of the Regional Counsel, 901 Locust, Room 506, Kansas City, Missouri 64106; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Kansas City, Missouri, on October 19, 2006. James E. Jackson, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17930 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-24119; Directorate Identifier 2005-NM-100-AD; Amendment 39-14806; AD 2006-22-09] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747 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 747 airplanes. This AD requires repetitive mid- and low-frequency eddy current inspections for cracks in the overlapped skin panels in the fuselage skin lap joints in sections 41, 42, 44, and 46, and corrective actions if necessary. This AD results from a report indicating that an operator found multiple small cracks in the overlapped skin panels in the fuselage skin lap joints. We are issuing this AD to detect and correct cracks in the overlapped skin panels, which could join together and result in reduced structural capability in the skin and consequent rapid decompression of the airplane. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of December 1, 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 service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)917-6437; 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 747 airplanes. That NPRM was published in the **Federal Register** on March 14, 2006 (71 FR 13055). That NPRM proposed to require repetitive mid- and low-frequency eddy current inspections for cracks in the overlapped skin panels in the fuselage skin lap joints in sections 41, 42, 44, and 46, and corrective actions if necessary. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Support for the NPRM Boeing supports the NPRM as proposed. Request To Delay Final Rule Pending New Service Information Japan Airlines
(JAL)states that Boeing Alert Service Bulletin 747-53A2501, dated March 24, 2005, which was referenced as the appropriate source of service information for accomplishing the actions proposed in the NPRM, contains various errors and omissions. For example, the alert service bulletin does not have inspection procedures for certain internal structural details that cover the lap, and there is no inspection procedure specific to the Boeing Model 747-400 converted freighter. JAL would like us to delay issuing the final rule until Boeing has revised the alert service bulletin. We partially agree with JAL. We agree that there are details and configurations that could be changed in future revisions of the alert service bulletin. The issues JAL mentions would require an alternative method of compliance
(AMOC)to the inspection instructions as given in the original issue of the alert service bulletin. Operators may request an AMOC in accordance with the procedures in paragraph
(j)of the final rule. We disagree that we should delay the final rule until Boeing revises the alert service bulletin. We have identified an unsafe condition, and delaying issuance of the final rule until Boeing revises its service information would result in an unwarranted delay of the inspections that are intended to address that unsafe condition. We have not changed the final rule in this regard. Request To Revise Inspection Threshold Air Transport Association (ATA), on behalf of its member Northwest Airlines (NWA), requests that we allow the initial inspection to occur within 3,000 flight cycles after the most recent Supplemental Structural Inspection Document
(SSID)inspection for items F-25K, F-25L, and F-25M in Boeing SSID D6-35022. We disagree with the commenters. The SSID program is an exploratory inspection program. The inspection intervals in the SSID were derived from required damage tolerance ratings
(DTRs)that were based on “fleet crack” criteria. This means that at the time the DTRs were developed, there was no known cracking in the area; therefore, the required DTRs could remain at a lower level until cracking was discovered. However, operators subsequently found cracking in certain lap joint lower skins, and Boeing issued Alert Service Bulletin 747-53A2501 to detect and correct this cracking. The required DTRs that drive the thresholds and intervals were developed using “first crack” criteria, which is higher than “fleet crack” criteria. “First crack” criteria must detect cracking that is known to have occurred on other airplanes and, therefore, cannot rely on a worldwide fleet of airplanes as a statistical sample group. The inspection specified in Boeing Alert Service Bulletin 747-53A2501 is an internal medium frequency eddy current
(MFEC)inspection, which is able to detect a crack size smaller than that detectable by the external low frequency eddy current
(LFEC)inspection required by the SSID program. Both inspection techniques are used to detect cracks on the outer surface of the lower skin panel at the lower row of fasteners of the lap splice. However, the LFEC inspection looks through the upper skin panel; the MFEC technique uses a probe that is in direct contact with the lower skin panel on the inner surface. Therefore, a 3,000-flight-cycle repetitive interval using an LFEC method does not provide the same level of certainty as a 3,000-flight-cycle repetitive inspection using the MFEC method. We have not changed the final rule in this regard. Request To Change Costs of Compliance ATA, on behalf of NWA, also requests that we change the costs of compliance. NWA states that it has determined that approximately 120 work hours would be required to accomplish the non-destructive test procedures specified in Boeing Alert Service Bulletin 747-53A2501. The NPRM gives a cost estimate of 68 hours to do this task. NWA states that it is worth noting that if the inspection has to be performed independent of other major fuselage internal inspections, then over 1,000 additional hours of access and restoration labor will be required. NWA states that this scenario is likely if the initial inspection is required independent of the SSID or fuselage fatigue inspection programs. The 1,000-flight-cycle initial inspection threshold could prompt such a scenario. We disagree with the request to change the costs of compliance. The 68 work-hour estimate represents the time necessary to perform only the action actually required by the AD. The action in the NPRM reflects only the direct costs of the specific required action (inspection) based on the best available data from the manufacturer. The cost analysis in AD rulemaking actions typically does not include incidental costs such as the time required to gain access and close up, time necessary for planning, or time necessary for other administrative tasks. Those incidental costs, which may vary significantly among operators, are almost impossible to calculate. We have not changed the final rule in this regard. Request To Revise Compliance Time ATA also recommends that we align the compliance period for the non-destructive test procedures specified in Boeing Alert Service Bulletin 747-53A2501, with scheduled maintenance intervals in order to avoid the order-of-magnitude increase in the effect of the proposed actions if they must be accomplished on an unscheduled basis. We disagree with the request to revise the compliance time. We acknowledge that for certain airplanes the inspections may have to be performed independent of the SSID or fuselage fatigue inspection programs. In developing an appropriate compliance time for this action, including the 1,000-flight-cycle initial inspection threshold, we considered the urgency associated with the subject unsafe condition, the manufacturer's recommendations, and the practical aspect of accomplishing the required inspections within a period of time that corresponds to the normal scheduled maintenance for most affected operators. We have not changed the final rule in this regard. However, according to the provisions of paragraph
(j)of the final rule, we may approve requests to adjust the compliance time if the request includes data that prove that the new compliance time would provide an acceptable level of safety. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD as proposed. Costs of Compliance There are about 1,081 airplanes of the affected design in the worldwide fleet. 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 Cost per airplane Number of U.S.-registered airplanes Fleet cost Inspection for Model 747SP series airplanes 48 $80 $3,840, per inspection cycle 10 $38,400, per inspection cycle. Inspection for all other Model 747 series airplanes 68 80 $5,440, per inspection cycle 196 $1,066,240, per inspection cycle. 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): **2006-22-09 Boeing:** Amendment 39-14806. Docket No. FAA-2006-24119; Directorate Identifier 2005-NM-100-AD. Effective Date
(a)This AD becomes effective December 1, 2006. Affected ADs
(b)2004-13-02. Applicability
(c)This AD applies to Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, 747SR, and 747SP series airplanes, certificated in any category; as identified in Boeing Alert Service Bulletin 747-53A2501, dated March 24, 2005. Unsafe Condition
(d)This AD results from a report indicating that an operator found multiple small cracks in the overlapped skin panels in the fuselage skin lap joints. We are issuing this AD to detect and correct cracks in the overlapped skin panels, which could join together and result in reduced structural capability in the skin 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. Inspections and Corrective Actions: For Airplanes With Line Numbers 1 Through 200 Inclusive
(f)For airplanes with line numbers 1 through 200 inclusive, at the applicable time in paragraph (f)(1) or (f)(2) of this AD: Do the applicable eddy current inspection or inspections for cracks in the overlapped skin panels in the fuselage skin lap joints in sections 41, 42, 44, and 46; and do all applicable corrective actions before further flight. Except as provided by paragraph (f)(1)(ii) of this AD, repeat the applicable inspection or inspections thereafter at intervals not to exceed 3,000 flight cycles. Except as provided by paragraph
(h)of this AD, do all actions in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2501, dated March 24, 2005.
(1)Except as provided by paragraph (f)(2) of this AD, do the applicable action in paragraph (f)(1)(i) or (f)(1)(ii) of this AD.
(i)For airplanes that have accumulated fewer than 29,000 total flight cycles as of the effective date of this AD: Before the accumulation of 25,000 total flight cycles, or within 1,000 flight cycles after the effective date of this AD, whichever occurs later, do a mid-frequency eddy current inspection for cracks of the internal surface at the overlapped skin around the bottom row of fasteners in the lap joint.
(ii)For airplanes that have accumulated 29,000 or more total flight cycles, do the inspections in accordance with the requirements of AD 2004-13-02, amendment 39-13682, at the applicable threshold and intervals in that AD. Doing the repeat inspections in accordance with AD 2004-13-02, terminates the repetitive inspection requirements of this AD only for airplanes with line numbers 1 through 200 inclusive.
(2)For airplanes that have had overlapped skin panels replaced: Do the eddy current inspections of the replaced overlapped panel prior to the accumulation of 25,000 total flight cycles since panel replacement, or within 1,000 flight cycles after the effective date of this AD, whichever occurs later. Skin panel replacement, along with ongoing inspections in accordance with paragraph
(f)of this AD, terminates the requirements of paragraphs
(a)and
(d)of AD 2004-13-02, only for the skin lap sections where the overlapped panel has been replaced. Inspections and Corrective Actions: For Airplanes With Line Numbers 201 and Subsequent
(g)For airplanes with line numbers 201 and subsequent: Before the accumulation of 25,000 total flight cycles, within 1,000 flight cycles after the effective date of this AD, or within 25,000 flight cycles after the time when the overlapped skin was replaced, whichever occurs later, do the applicable inspection in paragraphs (g)(1) and (g)(2) of this AD for cracks in the overlapped skin panels in the fuselage skin lap joints in sections 41, 42, 44, and 46; and do all applicable corrective actions before further flight. Repeat the applicable inspection thereafter at intervals not to exceed 3,000 flight cycles. Except as provided by paragraph
(h)of this AD, do all actions in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2501, dated March 24, 2005.
(1)Do a mid-frequency eddy current inspection for cracks of the internal surface at the overlapped skin around the bottom row of fasteners in the lap joint.
(2)Do a low-frequency eddy current inspection for cracks of the overlapped skin around the bottom row of fasteners at the section 41 lap joints with four rows of fasteners. Repair Instructions
(h)If any crack is found during any inspection required by this AD, and Boeing Alert Service Bulletin 747-53A2501, dated March 24, 2005, specifies to contact Boeing for appropriate action: Before further flight, repair the crack using a method approved in accordance with the procedures specified in paragraph
(j)of this AD. No Reporting Required
(i)Although Boeing Alert Service Bulletin 747-53A2501, dated March 24, 2005, specifies to submit certain information to the manufacturer, this AD does not include that requirement. Alternative Methods of Compliance (AMOCs) (j)(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)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, and the approval must specifically refer to this AD.
(3)Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. Material Incorporated by Reference
(k)You must use Boeing Alert Service Bulletin 747-53A2501, dated March 24, 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 October 18, 2006. Jeffrey E. Duven, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17941 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2005-20080; Directorate Identifier 2003-NM-193-AD; Amendment 39-14802; AD 2006-22-05] RIN 2120-AA64 Airworthiness Directives; Various Aircraft Equipped With Honeywell Primus II RNZ-850( )/-851( ) Integrated Navigation Units 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 various aircraft equipped with certain Honeywell Primus II RNZ-850( )/-851( ) integrated navigation units (INUs). That AD, as one alternative for compliance, provides for a one-time inspection to determine whether a certain modification has been installed on the Honeywell Primus II NV-850 navigation receiver module (NRM), which is part of the INU. In lieu of accomplishing this inspection, and for aircraft found to have an affected NRM, the existing AD provides for revising the aircraft flight manual to include new limitations for instrument landing system approaches. This new AD requires inspecting to determine whether certain modifications have been done on the NRM; and doing related investigative, corrective, and other specified actions, as applicable; as well as further modifications to address additional anomalies. This AD results from reports indicating that erroneous glideslope indications have occurred on certain aircraft equipped with the subject INUs. We are issuing this AD to ensure that the flightcrew has an accurate glideslope deviation indication. An erroneous glideslope deviation indication could lead to the aircraft making an approach off the glideslope, which could result in impact with an obstacle or terrain. DATES: This AD becomes effective December 1, 2006. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of December 1, 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. Go to *https://pubs.cas.honeywell.com* or contact Honeywell International, Inc., Commercial Electronic Systems, 21111 North 19th Avenue, Phoenix, Arizona 85027-2708, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: J. Kirk Baker, Aerospace Engineer, Systems and Equipment Branch, ANM-130L, FAA, Los Angeles Aircraft Certification Office, 3960 Paramount Boulevard, Lakewood, California 90712-4137; telephone
(562)627-5345; fax
(562)627-5210. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(AD)docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the street address stated in the ADDRESSES section. Discussion The FAA issued a supplemental notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that supersedes AD 2003-04-06, amendment 39-13054 (68 FR 8539, February 24, 2003). The existing AD applies to various aircraft equipped with certain Honeywell Primus II RNZ-850/-851 integrated navigation units (INUs). That supplemental NPRM was published in the **Federal Register** on May 18, 2006 (71 FR 28827). That supplemental NPRM proposed to continue to require inspecting to determine whether certain modifications have been done on the NRM; and doing related investigative, corrective, and other specified actions, as applicable; as well as further modifications to address additional anomalies. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received from the single commenter. Request To Clarify Reply to Comment to Original NPRM The commenter, Air Wisconsin, has requested an explanation of our reply to its comment to the original NPRM. The original comment requested clarification of the proposed requirements for inspecting to determine the modification level of the NRM and proposed that paragraph
(k)of the original NPRM be revised to state that paragraph
(j)of the AD need not be performed under certain conditions. The commenter asserts that our reply to that original comment was contradictory and confusing because we stated that we had made no change to paragraph
(k)of the original NPRM when, in fact, paragraph
(k)of the supplemental NPRM had been changed. We acknowledge the commenter's concern. As stated in our original reply, we determined that paragraph
(j)of the AD is required regardless of compliance time or the findings of paragraph (f); this is because paragraph
(j)requires inspecting for Mod N, P, R, or T, as well as Mod L. Therefore, we did not change paragraph
(k)of the original NPRM as the commenter suggested. However, we determined that paragraph
(k)was incorrect in that it stated that paragraph
(f)did not need to be done if paragraph
(j)was accomplished within the compliance time specified by paragraph (f). Paragraph
(f)of the AD deals with compliance times and has no findings, while paragraph
(g)of the AD requires an inspection and has findings. Therefore, it was our intent to revise paragraph
(k)to read as it appears in the supplemental NPRM; that is, if paragraph
(j)is accomplished within the compliance time specified by paragraph (f), paragraph
(g)does not need to be done. We have made no further changes to paragraph
(k)of the AD in this regard. Explanation of Change To Applicability We have revised the applicability of the AD to identify model designations as published in the most recent type certificate data sheet for the affected models. Clarification of INU References The applicability of the supplemental NPRM specifies that the AD applies to aircraft “equipped with a Honeywell Primus II RNZ-850/-851 INU having a part number identified in Table 1 of this AD.” However, the Honeywell service bulletins identified in the following table variously refer to “-850/-851,” “-850/A/B/C,” “-851/A/B/C,” and “-850(X)/-851(X)” INUs, indicating that the RNZ-850/-851 part number might or might not contain a suffix letter. Although the service bulletins identified in the following table make it clear that the INU part numbers, as identified in Table 1 of the AD, are the primary identifiers of all affected INUs, we have determined that these various suffix references could cause confusion. Therefore, to address all references to suffix letters in the service bulletins, we have revised the AD to read “-850( )/-851( )” where applicable. Honeywell Service Information Honeywell Revision level Date Alert Service Bulletin 7510100-34-A0034 Original February 28, 2003. Alert Service Bulletin 7510100-34-A0035 Original July 11, 2003. Alert Service Bulletin 7510134-34-A0016 001 March 4, 2003. Service Bulletin 7510134-34-0018 Original July 8, 2004. Service Bulletin 7510100-34-0037 Original July 8, 2004. 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 For the purposes of this AD, we estimate that there are 3,063 aircraft worldwide that may be equipped with a part that is subject to this AD, including about 1,500 aircraft of U.S. registry. The inspection to determine whether Mod L has been done, which is currently required by AD 2003-04-06 and retained in this AD, will take about 1 work hour per aircraft, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the currently required actions is $80 per aircraft. 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 FAA amends § 39.13 by removing amendment 39-13054 (68 FR 8539, February 24, 2003) and adding the following new airworthiness directive (AD): **2006-22-05 Various Aircraft:** Amendment 39-14802. Docket No. FAA-2005-20080; Directorate Identifier 2003-NM-193-AD. Effective Date
(a)This AD becomes effective December 1, 2006. Affected ADs
(b)This AD supersedes AD 2003-04-06. Applicability
(c)This AD applies to aircraft, certificated in any category, equipped with a Honeywell Primus II RNZ-850( )/-851( ) integrated navigation unit
(INU)having a part number identified in Table 1 of this AD; including, but not limited to, BAE Systems (Operations) Limited (Jetstream) Model 4101 airplanes; Bombardier Model BD-700-1A10 series airplanes; Model Bombardier CL-215-6B11 (CL-415 variant) series airplanes; Cessna Model 560, 560XL, and 650 airplanes; Dassault Model Mystere-Falcon 50 series airplanes; AvCraft Dornier Model 328-100 and -300 series airplanes; Empresa Brasileira de Aeronautica S.A. (EMBRAER) Model EMB-135 airplanes and Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP airplanes; Learjet Model 45 airplanes; Raytheon Model Hawker 800XP and Hawker 1000 airplanes; and Sikorsky Model S-76A, S-76B, and S-76C aircraft. Table 1.—INU Part Numbers Part Nos. 7510100-811 through 7510100-814 inclusive. 7510100-831 through 7510100-834 inclusive. 7510100-901 through 7510100-904 inclusive. 7510100-911 through 7510100-914 inclusive. 7510100-921 through 7510100-924 inclusive. 7510100-931 through 7510100-934 inclusive. Note 1: This AD applies to Honeywell Primus II RNZ-850( )/-851( ) INUs installed on any aircraft, regardless of whether the aircraft has been otherwise modified, altered, or repaired in the area subject to the requirements of this AD. For aircraft that have been modified, altered, or repaired so that the performance of the requirements of this AD is affected, the owner/operator must request approval for an alternative method of compliance in accordance with paragraph
(m)of this AD. The request should include an assessment of the effect of the modification, alteration, or repair on the unsafe condition addressed by this AD; and, if the unsafe condition has not been eliminated, the request should include specific proposed actions to address it. Unsafe Condition
(d)This AD results from reports indicating that erroneous glideslope indications have occurred on certain aircraft equipped with the subject INUs. We are issuing this AD to ensure that the flightcrew has an accurate glideslope deviation indication. An erroneous glideslope deviation indication could lead to the aircraft making an approach off the glideslope, which could result in impact with an obstacle or terrain. 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. Requirements of AD 2003-04-06 Compliance Time For Action
(f)Within 5 days after March 11, 2003 (the effective date of AD 2003-04-06), accomplish the requirements of either paragraph
(g)or
(h)of this AD. After the effective date of this AD, only accomplishing the requirements of paragraph
(g)of this AD is acceptable for compliance with this paragraph. Inspection To Determine Part Number
(g)Perform a one-time general visual inspection of the modification plate for the Honeywell Primus II NV-850 Navigation Receiver Module (NRM); part number 7510134-811, -831, -901, or -931; which is part of the Honeywell Primus II RNZ-850( )/-851( ) INU; to determine if Mod L has been installed. The modification plate is located on the bottom of the Honeywell Primus II RNZ-850( )/-851( ) INU, is labeled NV-850, and contains the part number and serial number for the Honeywell Primus II NV-850 NRM. If Mod L is installed, the letter L will be blacked out. Honeywell Alert Service Bulletin 7510100-34-A0035, dated July 11, 2003, is an acceptable source of service information for the inspection required by this paragraph.
(1)If Mod L is installed, before further flight, do paragraph
(h)or
(j)of this AD. After the effective date of this AD, only accomplishment of paragraph
(j)is acceptable for compliance with this paragraph.
(2)If Mod L is not installed, no further action is required by this paragraph. Note 2: For the purposes of this AD, a general visual inspection is defined as: “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 enhance visual access to all exposed 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.” Note 3: For more information on the inspection specified in paragraph
(g)of this AD, refer to Honeywell Technical Newsletter A23-3850-001, Revision 1, dated January 21, 2003. Aircraft Flight Manual
(AFM)Revision
(h)Revise the Limitations section of the AFM to include the following statements (which may be accomplished by inserting a copy of the AD into the AFM): “Flight Limitations When crossing the Outer Marker on glideslope, the altitude must be verified with the value on the published procedure. For aircraft with a single operating glideslope receiver, the approach may be flown using normal procedures no lower than Localizer Only Minimum Descent Altitude (MDA). For aircraft with two operating glideslope receivers, the aircraft may be flown to the published minimums for the approach using normal procedures if both glideslope receivers are tuned to the approach and both crew members are monitoring the approach using independent data and displays.” Parts Installation
(i)As of March 11, 2003, no person may install a Honeywell Primus II NV-850 NRM on which Mod L has been installed, on the Honeywell Primus II RNZ-850( )/-851( ) INU of any aircraft, unless paragraph
(h)or
(k)of this AD is accomplished. As of the effective date of this AD, only accomplishment of paragraph
(k)is acceptable for compliance with this paragraph. New Requirements of This AD Inspection To Determine Modification Level of NRM
(j)For aircraft on which Mod L was found to be installed during the inspection required by paragraph
(g)of this AD, or for aircraft on which paragraph
(h)of this AD was accomplished: Within 24 months after the effective date of this AD, do an inspection of the modification plate on the Honeywell Primus II NV-850 NRM; part number 7510134-811, -831, -901, or -931; which is part of the Honeywell Primus II RNZ-850( )/-851( ) INU; to determine if Mod L, N, P, R or T is installed. The modification plate located on the bottom of the Honeywell Primus II RNZ-850( )/-851( ) INU is labeled NV-850, and contains the part number and serial number for the Honeywell Primus II NV-850 NRM. If Mod L, N, P, R or T is installed, the corresponding letter on the modification plate will be blacked out. Honeywell Alert Service Bulletin 7510100-34-A0035, dated July 11, 2003, is an acceptable source of service information for this inspection. If Mod T is installed, no further action is required by this paragraph. If Mod L, N, P, or R is installed, before further flight, do all applicable related investigative, corrective, and other specified actions, in accordance with the Accomplishment Instructions of Honeywell Alert Service Bulletin 7510100-34-A0035, dated July 11, 2003; and Honeywell Service Bulletin 7510100-34-0037, dated July 8, 2004; to ensure that the NRM is at the Mod T configuration. Once the actions in this paragraph are completed, the AFM revision required by paragraph
(h)of this AD may be removed from the AFM. Note 4: Honeywell Alert Service Bulletin 7510100-34-A0035, dated July 11, 2003, refers to Honeywell Alert Service Bulletin 7510100-34-A0034, dated February 28, 2003, as an additional source of service information for inspecting to determine the NRM part number, marking the modification plates of the NRM and INU accordingly, testing the INU for discrepant signals, and replacing the unit with a new or modified INU, as applicable. Honeywell Alert Service Bulletin 7510100-34-A0034 refers to Honeywell Alert Service Bulletin 7510134-34-A0016, currently at Revision 001, dated March 4, 2003, as an additional source of service information for marking the modification plates of the NRM and INU. Note 5: Honeywell Service Bulletin 7510100-34-0037, dated July 8, 2004, refers to Honeywell Service Bulletin 7510134-34-0018, dated July 8, 2004, as an additional source of service information for modifying the NRM to the Mod T configuration.
(k)If the inspection specified in paragraph
(j)of this AD is done within the compliance time specified in paragraph
(f)of this AD, paragraph
(g)of this AD does not need to be done. No Reporting Requirement
(l)Where Honeywell Alert Service Bulletin 7510100-34-A0035, dated July 11, 2003 (or any of the related service information referenced therein), specifies to submit certain information to the manufacturer, this AD does not include that requirement. Alternative Methods of Compliance (AMOCs) (m)(1) The Manager, Los Angeles Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)Before using any AMOC approved in accordance with 14 CFR 39.19 on any airplane to which the AMOC applies, notify the appropriate principal inspector in the FAA Flight Standards Certificate Holding District Office. Material Incorporated by Reference
(n)You must use Honeywell Alert Service Bulletin 7510100-34-A0035, dated July 11, 2003; and Honeywell Service Bulletin 7510100-34-0037, dated July 8, 2004, 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 these documents in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Go to *https://pubs.cas.honeywell.com* or contact Honeywell International, Inc., Commercial Electronic Systems, 21111 North 19th Avenue, Phoenix, Arizona 85027-2708, 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 October 13, 2006. Kalene C. Yanamura, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17658 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-24228; Directorate Identifier 2006-CE-22-AD; Amendment 39-14805; AD 2006-22-08] RIN 2120-AA64 Airworthiness Directives; Air Tractor, Inc. Models AT-602, AT-802, and AT-802A Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: The FAA adopts a new airworthiness directive
(AD)for all Air Tractor, Inc. Models AT-602, AT-802, and AT-802A airplanes. This AD requires you to repetitively inspect the engine mount for any cracks, repair or replace any cracked engine mount, and report any cracks found to the FAA. This AD results from reports of cracked engine mounts. We are issuing this AD to detect and correct cracks in the engine mount, which could result in failure of the engine mount. Such failure could lead to separation of the engine from the airplane. DATES: This AD becomes effective on December 1, 2006. As of December 1, 2006, the Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulation. ADDRESSES: To get the service information identified in this AD, contact Air Tractor, Inc., P.O. Box 485, Olney, Texas 76374; telephone:
(940)564-5616; facsimile:
(940)564-5612. To view the AD docket, go to the Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-001 or on the Internet at *http://dms.dot.gov.* The docket number is FAA-2006-24228; Directorate Identifier 2006-CE-22-AD. FOR FURTHER INFORMATION CONTACT: Andrew McAnaul, Aerospace Engineer, ASW-150 (c/o MIDO-43), 10100 Reunion Place, Suite 650, San Antonio, Texas 78216; telephone:
(210)308-3365; facsimile:
(210)308-3370. SUPPLEMENTARY INFORMATION: Discussion On April 26, 2006, we issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to all Air Tractor, Inc. Models AT-602, AT-802, and AT-802A airplanes. This proposal was published in the **Federal Register** as a notice of proposed rulemaking
(NPRM)on May 2, 2006 (71 FR 25793). The NPRM proposed to require you to repetitively inspect the engine mount for any cracks, repair or replace any cracked engine mount, and report any cracks found to the FAA. Comments We provided the public the opportunity to participate in developing this AD. The following presents the comment received on the proposal and FAA's response to the comment: Comment Issue: Flight Test and Analysis Ronald G. Bush suggests that proper flight testing of a correctly instrumented engine mount and structure, combined with analysis of the data collected, may provide for a more efficient solution to the cracking problem than the repetitive inspections currently provide. He notes that the cost of each inspection is estimated at $120, and a properly substantiated terminating action may prove less costly over time. We partially agree that a properly executed flight test and analysis is a method to provide substantiating data that can be used to validate an alternate method for addressing the engine mount fatigue cracking. The FAA has not received any data at this time that proposes and substantiates a terminating action for the required inspections. If and when such information is received, we will consider mandating it through AD action. We are not changing the AD as a result of this comment. Conclusion We have carefully reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial corrections. We have determined that these minor corrections: • Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and • Do not add any additional burden upon the public than was already proposed in the NPRM. Costs of Compliance We estimate that this AD affects 368 airplanes in the U.S. registry. We estimate the following costs to do each required inspection: Labor cost Parts cost Total cost per airplane per inspection Total cost on U.S. operators for initial inspection 1.5 work-hours × $80 per hour = $120 Not Applicable $120 368 × $120 = $44,160. We have no way of determining the number of airplanes that may need replacement of the engine mount. We estimate the following costs to do the replacement: Labor cost Parts cost Total cost per airplane per inspection Total cost on U.S. operators for initial inspection 81 work-hours × $80 per hour = $6,480 $3,982 $10,462 368 × $10,462 = $3,850,016. Any required “upon-condition” repairs would vary depending upon the damage found during each inspection. Based on this, we have no way of determining the potential repair costs for each 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 AD. 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 the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a summary of the costs to comply with this AD (and other information as included in the Regulatory Evaluation) and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES . Include “Docket No. FAA-2006-24228; Directorate Identifier 2006-CE-22-AD” in your request. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (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. FAA amends § 39.13 by adding a new AD to read as follows: **2006-22-08 Air Tractor, Inc.:** Amendment 39-14805; Docket No. FAA-2006-24228; Directorate Identifier 2006-CE-22-AD. Effective Date
(a)This AD becomes effective on December 1, 2006. Affected ADs
(b)None. Applicability
(c)This AD affects all Models AT-602, AT-802, and AT-802A airplanes, all serial numbers, that are certificated in any category. Unsafe Condition
(d)This AD results from reports of cracked engine mounts. We are issuing this AD to detect and correct cracks in the engine mount, which could result in failure of the engine mount. Such failure could lead to separation of the engine from the airplane. Compliance
(e)To address this problem, you must do the following: Actions Compliance Procedures
(1)Visually inspect the engine mount for any cracks Initially inspect upon accumulating 4,000 hours time-in-service
(TIS)or within the next 100 hours TIS after December 1, 2006 (the effective date of this AD), whichever occurs later, unless already done. Thereafter, repetitively inspect every 300 hours TIS Follow Snow Engineering Co. Service Letter #253, dated December 12, 2005.
(2)If you find any crack damage, do one of the following:
(i)Obtain an FAA-approved repair scheme and incorporate this repair scheme; or
(ii)Replace the engine mount with a new engine mount. Before further flight after any inspection required by paragraph (e)(1) of this AD where crack damage is found. If you repair the cracked engine mount, then continue to reinspect at intervals not to exceed 300 hours TIS, unless the repair scheme states differently. If you replace the engine mount, then initially inspect upon accumulating 4,000 hours TIS and repetitively at intervals not to exceed 300 hours TIS thereafter *For obtaining a repair scheme:* Follow Snow Engineering Co. Service Letter #253, dated December 12, 2005. *For the replacement:* The maintenance manual includes instructions for the replacement.
(3)Report any cracks that you find to the FAA at the address specified in paragraph
(f)of this AD. Include in your report:
(i)Airplane serial number;
(ii)Airplane and engine mount hours TIS;
(iii)Crack location(s) and size(s);
(iv)Corrective action taken; and
(v)Point of contact name and telephone number. Within the next 10 days after you find the cracks or within the next 10 days after December 1, 2006 (the effective date of this AD), whichever occurs later The Office of Management and Budget
(OMB)approved the information collection requirements contained in this regulation under the provisions of the Paperwork Reduction Act and assigned OMB Control Number 2120-0056. Alternative Methods of Compliance (AMOCs)
(f)The Manager, Fort Worth Airplane Certification Office, FAA, Attn: Andrew McAnaul, Aerospace Engineer, ASW-150 (c/o MIDO-43), 10100 Reunion Place, Suite 650, San Antonio, Texas 78216; telephone:
(210)308-3365; facsimile:
(210)308-3370, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Material Incorporated by Reference
(g)You must do the actions required by this AD following the instructions in Snow Engineering Co. Service Letter #253, dated December 12, 2005. The Director of the Federal Register approved the incorporation by reference of this service bulletin in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. To get a copy of this service information, contact Air Tractor, Inc., P.O. Box 485, Olney, Texas 76374; telephone:
(940)564-5616; facsimile:
(940)564-5612. To review copies of this service information, go to the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* or call
(202)741-6030. To view the AD docket, go to the Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-001 or on the Internet at *http://dms.dot.gov.* The docket number is FAA-2006-24228; Directorate Identifier 2006-CE-22-AD. Issued in Kansas City, Missouri, on October 13, 2006. James E. Jackson, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E6-17828 Filed 10-26-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Parts 153, 157, 375, and 385 [Docket No. RM06-1-000; Order No. 687] Regulations Implementing the Energy Policy Act of 2005; Coordinating the Processing of Federal Authorizations for Applications Under Sections 3 and 7 of the Natural Gas Act and Maintaining a Complete Consolidated Record October 19, 2006. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Final rule. SUMMARY: Section 313 of the Energy Policy Act of 2005 (EPAct 2005) 1 amends section 15 of the Natural Gas Act
(NGA)2 to provide the Federal Energy Regulatory Commission (Commission) with additional authority to coordinate the processing of authorizations required under Federal law for proposed natural gas projects subject to NGA sections 3 and 7 and to maintain a complete consolidated record of decisions with respect to such Federal authorizations. This Final Rule promulgates regulations governing its exercise of this authority whereby the Commission will establish a schedule for the completion of reviews of requests for authorizations necessary for a proposed project and compile a consolidated record to be used in the event of review of actions by the Commission and other agencies in responding to requests for authorizations necessary for a proposed project. 1 Pub. L. 109-58, 119 Stat. 594 (2005). 2 15 U.S.C. 717n (2005). DATES: *Effective Date:* The rule will become effective December 26, 2006. FOR FURTHER INFORMATION CONTACT: Gordon Wagner, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426; *gordon.wagner@ferc.gov* ;
(202)502-8947. Lonnie Lister, Office of Energy Projects, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426; *lonnie.lister@ferc.gov* ;
(202)502-8587. William O. Blome, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC. 20426;
(202)502-8462. SUPPLEMENTARY INFORMATION: Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff 1. On May 18, 2006, the Commission issued a Notice of Proposed Rulemaking
(NOPR)in Docket No. RM06-1-000, 3 requesting comments on proposed regulations to implement section 313 of the Energy Policy Act of 2005 (EPAct 2005). 4 EPAct 2005 section 313 amends the Natural Gas Act
(NGA)to provide the Commission with the authority
(1)to set a schedule for Federal agencies, and state agencies acting under federally delegated authority, to reach a final decision on requests for Federal authorizations necessary for proposed NGA section 3 or 7 gas projects and
(2)to maintain a complete consolidated record of all decisions and actions by the Commission and other agencies with respect to such authorizations. In this Final Rule, the Commission considers comments submitted in response to the NOPR, and as a result, makes certain modifications to the proposed regulatory revisions. 3 71 FR 30632 (May 30 2006); FERC Stats. & Regs. ¶ 32,601 (2006); 115 FERC ¶ 61,203 (2006). 4 Pub. L. 109-58, 119 Stat. 594 (2005). Background 2. The Commission authorizes the construction and operation of proposed natural gas projects under NGA sections 3 and 7. 5 However, the Commission does not have jurisdiction over every aspect of each natural gas project. Hence, for a natural gas project to go forward, in addition to Commission approval, several different agencies must typically reach favorable findings regarding other aspects of the project. To better coordinate the activities of separate agencies with varying responsibilities over proposed natural gas projects, EPAct 2005 modified the Commission's role. Section 313 of EPAct 2005 directs the Commission
(1)to establish a schedule for agencies to review requests for Federal authorizations required for a project 6 and
(2)to compile a record of each agency's decision, together with the record of the Commission's decision, to serve as a consolidated record for the purpose of appeal, including judicial review. 5 Under NGA section 7, the Commission has jurisdiction over the transportation or sale of natural gas in interstate commerce and the construction, acquisition, operation, and abandonment of facilities to transport natural gas in interstate commerce. Under NGA section 3(e), the Commission has exclusive authority to approve or deny an application for the siting, construction, expansion, or operation of a liquefied natural gas
(LNG)terminal. The Secretary of the Department of Energy
(DOE)has delegated to the Commission the authority under NGA section 3 to approve or disapprove applications for the siting, construction, and operation of facilities to import or export natural gas. The most recent delegation is in Delegation Order No. 00-004-00A, effective May 16, 2006. 6 EPAct 2005 section 313 describes “Federal authorizations” as decisions or actions by a Federal agency or official, “or State administrative agency or officer acting under delegated Federal authority,” granting or denying requests for permits, certificates, opinions, approvals, and other authorizations. The United States Environmental Protection Agency
(EPA)asks what types of state actions would qualify as being under delegated Federal authority. The Commission finds that a state action qualifies as an action under delegated Federal authority if it is an action that
(1)a State entity is permitted, approved, or directed to take under Federal law and
(2)provides the basis for a reasoned decision on a request for a Federal authorization. The United States Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service
(NMFS)asks whether a Federal authorization would include recommendations or biological opinions issued subsequent to consultations under the Magnuson-Stevens Fishery Conservation and Management Act and Endangered Species Act (ESA). To the extent recommendations and opinions are necessary for a Federal agency, or state agency acting under federally delegated authority, to reach a decision on a request for a Federal authorization that is needed for a proposed NGA section 3 or 7 project to go forward, the Commission interprets EPAct 2005's mandate as encompassing such recommendations and opinions as “Federal authorizations.” 3. On November 17, 2005, the Commission issued an order initially implementing the authority conferred by EPAct 2005 7 and delegating to the Director of OEP the authority to set schedules for agencies to act on requests for Federal authorizations necessary for natural gas projects to ensure such requests are processed expeditiously. In that order, the Commission stated a subsequent rulemaking would codify the pertinent provisions of EPAct 2005. To that end, the May 2006 NOPR set forth proposed regulatory revisions. 7 *Coordinated Processing of NGA Section 3 and 7 Proceedings* , 113 FERC ¶ 61,170 (2005). This Final Rule codifies this delegation of authority by revising § 375.308, Delegations to the Director of the Office of Energy Projects (OEP), to add a new § 375.308(bb), which delegates authority to the Director of OEP to establish schedules, consistent with Federal law, for agencies to complete their analysis and decision making processes and issue decisions on requests for Federal authorizations necessary for natural gas projects. In this Final Rule, the Commission responds to comments concerning the NOPR, and adopts further regulatory revisions to implement its new responsibilities under EPAct 2005. Notice and Comment 4. Notice of the NOPR was published in the **Federal Register** on May 30, 2006. 8 Comments on the NOPR were filed by Baker Botts, L.L.P. (Baker Botts); Cheniere Energy, Inc. (Cheniere); City of Fall River, Massachusetts; Coastal States Organization; Conservation Law Foundation; Delaware Department of Natural Resources and Environmental Control, Division of Soil & Water Conservation (Delaware DNR); U. S. Department of the Army Corps of Engineers (Army COE); Dominion Transmission, Inc., Dominion Cove Point LNG, LP, and Dominion South Pipeline Company, LP (Dominion); Duke Energy Transmission, LLC (Duke); United States Environmental Protection Agency (EPA); Interstate Natural Gas Association of America (INGAA); United States Department of the Interior (Interior); Islander East Pipeline Company, L.L.C. (Islander East); Mr. Mark Mendelson; Massachusetts Office of the Attorney General; Massachusetts Executive Office of Environmental Affairs (Massachusetts EOEA); New Jersey Department of Environmental Protection (New Jersey DEP); Columbia Gas Transmission Corporation, Columbia Gulf Transmission Company, Crossroads Pipeline Company, Granite State Gas Transmission, Inc., and Central Kentucky Transmission Company (collectively NiSource); Oregon Coastal Management Program; United States Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service (NMFS); and Williston Basin Interstate Pipeline Company (Williston). 8 71 FR 30632 (May 30, 2006). Discussion 5. The comments raise objections to various aspects of the proposed regulatory revisions. In response, various aspects of the NOPR's proposed revisions are modified, as discussed below. Electronic Submission of Information 6. There are several different events that trigger the obligation on the part of other agencies and officials to submit information to the Commission. In the NOPR, the Commission proposed all such information be submitted electronically, but requested that affected agencies and officials comment on whether electronic submission could prove impractical. Several agencies stated that they are not yet prepared to transmit information by electronic means. Consequently, to avoid any undue hardship, while stressing its preference to receive information via electronic means, the Commission removes the requirement to submit information by electronic means. Coordinating Federal Authorizations When to Submit Requests for Federal Authorizations 7. Proposed §§ 153.8 and 157.14 specify that an application filed with the Commission for a natural gas project under NGA section 3 or 7 must include: A statement identifying each Federal authorization that the proposal will require; the Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, which will issue each authorization; the date each request for authorization was submitted; and the date by which final action on each Federal authorization has been requested or is expected. The NOPR observed that if an application does not include this proposed new information statement, the Commission may deem the application incomplete. 8. Several commenters explain that it is impractical, if not impossible, to submit applications for all Federal authorizations before or contemporaneously with the project application filed with the Commission. These commenters propose instead that a project sponsor be permitted to file an application with the Commission first; list the authorizations necessary for the new project; identify those authorizations for which applications have already been submitted and the dates upon which they were submitted; and then state the dates by which any outstanding authorization requests will be submitted. 9. The Commission observes that most applications to construct major new gas projects are filed with the Commission after the project sponsor has participated in the Commission's prefiling process. This prefiling period affords a project sponsor, Commission staff, and staff from other agencies the opportunity to identify which Federal authorizations will be needed for a project, and ample time for the project sponsor to prepare requests for related Federal authorizations in advance of filing an application with the Commission. 9 Thus, the prefiling process can establish coordination among the agencies responsible for reviewing a project proposal and diminish the chance that the Commission might find an application to be incomplete. 9 The NOPR noted that project sponsors that have made use of the prefiling period and process to prepare and submit requests for Federal authorizations to agencies before an NGA application is filed with the Commission have been able to compress the time needed to obtain Commission authorization. In large part, this is because completion of the Commission's assessment of an application often rests on other agencies reaching favorable determinations on separate authorization requests. Dominion and Duke are concerned that the new filing requirement might force a project sponsor to devote undue resources to preparing to submit requests for related Federal authorizations at the same time as an NGA application. The Commission believes the prefiling process can minimize the resources needed by a project sponsor by spacing out its submission of authorization requests over a period of several months. 10. The Commission nevertheless acknowledges that there may be circumstances that preclude a project sponsor from presenting all requests for necessary Federal authorizations by the time it files an application with the Commission. 10 Therefore, §§ 153.8 and 157.14 of the Commission's regulations will be modified to provide for a sponsor to explain why requests for Federal authorizations remain outstanding and state anticipated dates for submitting such requests. A project sponsor will now be required to state “the date each request for authorization was submitted; why any request has not been submitted and the date submission is expected; and the date by which final action on each Federal authorization has been requested or is expected.” For requests that remain outstanding at the time an application is filed, the Commission will review the reasons given, the projected dates of submission, and an applicant's interactions with the agencies. The Commission may then accept the application for consideration, and based on the state of documents and studies needed to support prospective authorization requests, accept the projected submission dates as a basis for establishing a schedule. 10 Cheniere, for example, posits that an agency may refuse to accept a request for a Federal authorization “through no fault of the applicant.” Were this to occur, the project sponsor should inform the Commission, which can then inquire as to the circumstances. NMFS points out that with respect to certain Federal authorizations, such as an affirmation of compliance with the Endangered Species Act or the National Historic Preservation Act, the project sponsor is not in a position to submit an authorization request, since a request to initiate consultation with the responsible agency must be submitted by the Commission. The Commission notes this does not relieve the project sponsor of its obligation, as described in Part 380 of the existing regulations, to develop and submit all necessary technical information. Baker Botts and INGAA call attention to difficulties that may be presented by compelling a project sponsor to file a permit under the Clean Air Act contemporaneously with an NGA section 3 or 7 application. Such difficulties should be alleviated by the modifications that this Final Rule makes to the filing requirements as proposed in the NOPR. Provided a project sponsor presents good cause for not submitting a particular authorization request by the time an application is submitted, the Commission stands ready to accept the application. Determining a Schedule for Federal Authorizations 11. Initially, upon receiving an application, the Commission issues a notice “within 10 days of filing,” in accordance with § 157.9 of its regulations, 11 or rejects the application in accordance with § 157.8 of its regulations. In issuing a notice of an application, the Commission, or the Director of OEP acting pursuant to delegated authority, may also declare a schedule for final decisions on outstanding requests for Federal authorizations. When a schedule is established, it will comply with agencies' applicable schedules established by Federal law. 12 The NOPR stated that in the event the Commission or the Director of OEP does not set a schedule for a particular project in the notice or at a later date, the default deadline for decisions by those agencies without applicable schedules established by Federal law will be no later than 90 days after the issuance of the Commission's final environmental document on the proposed project, or if no environmental document is issued, then no later than 90 days after issuance of a final order. 11 Section 157.9 is revised by this Final Rule to state that in calculating this deadline, only days during which the Commission is open for business are counted. 12 In response to a query by NMFS, the Commission states it interprets the reference in EPAct 2005 section 313(c)(1)(B) to “Federal law” to consist of schedules specified either in the United States Code or in the Code of Federal Regulations. 12. Commenters point out that if no schedule is included in the notice of an application, agencies are left to wonder whether a project-specific schedule will be issued at some later date, or whether silence indicates the default deadline applies. The Commission acknowledges the desirability of informing agencies in a timely manner of the schedule that will apply in each case. Accordingly, the Commission will adopt a different procedural approach, as described below. 13. The NOPR proposed requiring that agency action on authorization requests be completed within 90 days of the issuance of the Commission's final environmental document in a proceeding, or if an environmental document were not prepared, then within 90 days of the issuance of a final Commission order. Previously, the Commission has not always issued its environmental assessment
(EA)at the time of its completion. Going forward, the Commission commits to issue its final environmental document in every proceeding by placing it in the public record. In addition, going forward, the Commission commits to issuing a notice within 90 days of the notice of an application describing the schedule that will apply to the environmental review process conducted by the Commission to ensure compliance with the National Environmental Policy Act of 1969 (NEPA). 13 This notice of the schedule for the environmental review will state, among other milestones, the anticipated date for the Commission's completion of its EA or final environmental impact statement (EIS). 14 This NEPA notice will thus serve to inform agencies without a schedule established by Federal law of the projected date by which they are to reach a decision on requested authorizations, *i.e.* , within 90 days after the anticipated issuance of the Commission's EA or final EIS. Section 157.9 is revised accordingly. 13 42 U.S.C. 4321-4347 (2005). 14 It has been the Commission's experience that in processing applications for certain minor and routine projects, the Commission's assessment, including its NEPA review, can often be completed within 90 days. For such projects, the Commission will either include a notice of the environmental schedule in conjunction with the notice of the application ( *i.e.* , the initial notice issued within 10 days of an application's being filed with the Commission), or will issue a separate notice of the environmental schedule shortly thereafter. 14. Under this approach, there is no longer any distinction—as was discussed in the NOPR—between a “default” and a “project-specific” schedule. For agencies without a schedule established by Federal law, the deadline for a final decision will follow from the date the Commission issues its final environmental document by placing it in the public record, with the anticipated issuance date stated in the NEPA notice. However, this anticipated issuance date is subject to change. As explained in the NOPR, during the course of considering an application or a request for a Federal authorization, unanticipated issues and circumstances can arise and affect the time needed to complete the review. The Commission will monitor such changed circumstances, and may find it appropriate to revise the milestones set out in its initial schedule for its environmental review. 15 If the Commission does so, it will issue a notice updating the milestones associated with its environmental review process. Any revision that alters the date that the Commission anticipates issuing its EA or final EIS will correspondingly shift the projected 90-day deadline for agencies without a schedule established by Federal law to reach a final decision. 15 This flexibility should alleviate the concern of commenters such as the City of Fall River, Massachusetts, regarding situations where apparently straightforward issues are discovered during the course of analysis to be more complex and time-consuming than originally anticipated. 15. As described above, the Commission will now issue a notice describing the schedule for its environmental review as a part of, or within 90 days of, its initial notice of an application. Therefore, agencies will know, relatively early in the processing of all applications, where they stand with respect to due dates for their final decisions on requests for Federal authorizations. 16 16 The New Jersey DEP recommends that each State agency reviewing a request for a Federal authorization be provided with formal notice of the date the Commission issues a final environmental document, arguing that “[w]ithout formal notice . . . a State agency will not know that the 90-day review period for a decision has begun.” New Jersey DEP's Comments at 1 (July 28, 2006). In view of the Commission's commitment to issue a formal notice of the schedule for the environmental review, agencies should have adequate notice of the anticipated start date of the last 90 days of the review period applicable to those agencies without a schedule set by Federal law. State and Federal agencies and officers are urged to make use of the Commission's eSubscription service as a means to monitor documents submitted in a proceeding, updates, and the date of issuance of the Commission's EA or final EIS. 16. Commenters expressed the concern that the Commission could reach a decision on a schedule for agency action without first considering agency comments on authorization requests. As discussed below, agencies' reports on authorization requests will still be due within 30 days of the receipt of such requests. In addition, it is expected that project sponsors will submit as many requests for necessary Federal authorizations as possible by the time an application is filed with the Commission. Therefore, in most cases the Commission will have approximately 60 days to consider agency comments in advance of issuing the notice of its schedule for the environmental review, enabling the Commission to review agencies' input in setting the milestones for the completion of the Commission's environmental review. 17 17 As noted above, in minor and routine cases where issues that might complicate agencies' reviews are unlikely to arise, the Commission may issue notice of its environmental schedule in its initial notice of the filing of an application or shortly thereafter. However, if concerns regarding authorization requests are subsequently raised in agency reports to the Commission, the Commission would then reconsider the given time frames. In determining whether a proposal qualifies as minor and routine, and thereby suitable for processing on an accelerated schedule, EPA recommends the Commission first consult with the other agencies that will be involved. The Commission expects such projects to be readily identifiable or identified in the course of a prefiling consultation. The Commission will not identify a proposal as a candidate for accelerated processing unless it is confident of consensus among agencies that it merits such treatment. An agency may object to any schedule set by the Commission, and the Commission will reassess the grounds for its determination. 17. The Conservation Law Foundation requests doubling the 90 days following the issuance of the Commission's final environmental document to 180 days, whereas INGAA and interstate pipelines promote reducing the time to 30 days. The Conservation Law Foundation points out that a final decision on a request for a necessary Federal authorization may not be reached within 90 days of the issuance of the EA or EIS. The Commission acknowledges that although infrequent, this can occur. However, the Commission expects that project sponsors' increasing use of the Commission's prefiling consultation process, in conjunction with the regulatory revisions instituted herein, will eliminate such delayed authorization decisions. 18 Further, the Commission believes that providing the 180 days requested would be incompatible with the EPAct 2005 mandate to “ensure expeditious completion” of NGA section 3 and 7 proceedings. 19 On the other hand, the Commission finds no reason to adopt a 30-day requirement. Comments in favor advocate harmonizing the amount of time provided for agencies to act with the 30 days from issuance of a Commission order currently provided for filing a request for rehearing or accepting a certificate. The Commission sees no need to do so, as there is no evidence that project sponsors are currently hindered in reaching decisions on whether to seek rehearing of the Commission's orders or accept a certificate when other agencies take more than 30 days after an order to complete action on authorization requests. The Commission believes that the 90 days provided strikes an appropriate balance between providing adequate time for agencies' deliberation and avoiding delay to project sponsors. 18 The Commission notes that for the most part, instances in which final decisions on requests for necessary Federal authorizations have not been reached within the 90-day time frame designated herein, have involved authorizations for which a schedule for agency action is established by Federal law, *e.g.* , a Coastal Zone Management Act
(CZMA)consistency determination or a water quality certification under section 401 of the Clean Water Act (CWA). Nothing in this Final Rule will alter schedules set by Federal law. 19 EPAct 2005 section 313(c)(1)(A) (2005). 18. The NOPR observed that: In some cases—for example, when there is a demonstrated need to have a new natural gas project in service by a certain date—the Commission may set deadlines that are shorter than the maximum times permitted under Federal law. In such cases, the Commission recognizes that compliance with its specified deadlines would be voluntary for agencies with deadlines determined by Federal law. 20 20 71 FR 30632 at 30635 (May 30, 2006); FERC Stats. & Regs. ¶ 32,601 at 32,558 (2006); 115 FERC ¶ 61,203 at P 17 (2006). 19. Several commenters contend this observation conflicts with Federal law. In setting a schedule for agencies to conclude their reviews of requests for Federal authorization, the Commission has no ability to contract or expand a schedule established by Federal law. Consequently, there can be no conflict between a schedule set by the Commission and a schedule set by Federal law. 21 The Commission's observation in the NOPR was no more than an acknowledgment of current practice. Agencies frequently complete their review of certain project proposals—most often for modest and uncontroversial facilities—well in advance of deadlines allotted by Federal law. The NOPR stated the aspiration that agencies might continue to do so, recognizing that in exercising its new authority to set schedules, the Commission can only encourage agencies to act in advance of deadlines set by Federal law, it cannot compel them to do so. 21 Baker Botts raises a related issue in requesting clarification that an agency presented with an authorization request must not be permitted to await the outcome of another agency's action prior to commencing its own review. While such an approach might be viewed as contrary to EPAct 2005's expressed intent to expedite the review process for proposed gas projects, provided the agency in waiting is able to meet its deadline to reach a final decision—be it established by Federal law or by the Commission—there would not necessarily be cause to seek to compel the recalcitrant agency to commence its review sooner. 20. The Army COE states that the deadlines established by the Commission for final agency action will be “voluntary and non-binding.” 22 This would be the case if, as discussed above, the schedule set by the Commission calling for a shorter time frame did not meet the EPAct 2005 requirement that it “comply with applicable schedules established by Federal law.” 23 However, if an agency without a schedule established by Federal law fails to meet a deadline set by the Commission, this “failure of the agency to take action * * * in accordance with the Commission schedule established pursuant to section 15(c) shall be considered inconsistent with Federal Law,” and as a result, can be brought to the attention of the United States Court of Appeals, which can “remand the proceeding to the agency to take appropriate action consistent with the order of the Court” by the “schedule and deadline for the agency to act on remand” that will be set by the court. 24 22 Army COE's Comments at 3 (July 31, 2006). 23 EPAct 2005 section 313(c)(1)(B) (2005). 24 EPAct 2005 section 313(d)(2) and (3). Note this described civil action for the review of an agency's alleged failure to act on a requested authorization does not apply to CZMA determinations, since the Department of Commerce, not a Federal court, is the body to review a failure to act on, or the outcome of, a CZMA request. This section of EPAct 2005 was recently discussed and applied in *Islander East Pipeline Co. LLC* v. *Connecticut Department of Environmental Protection,* Docket No. 05-4139-ag (2d Cir. Oct. 5, 2006); the court found a State agency acting under delegated Federal authority had not conducted a complete and reasoned review of a request for a Federal authorization, and required the state agency to either do so within 75 days or abdicate its delegated Federal authority. Informing the Commission Upon Receipt of an Authorization Request 21. New § 385.2013 specifies that within 30 days of receiving an authorization request, an agency must inform the Commission of:
(1)Whether the agency deems the application to be ready for processing and, if not, what additional information or materials will be necessary to assess the merits of the request;
(2)the time the agency will allot the applicant to provide the necessary additional information or materials;
(3)what, if any, studies will be necessary in order to evaluate the request;
(4)the anticipated effective date of the agency's decision; and
(5)if applicable, the schedule set forth by Federal law for the agency to act. Further, if an agency asks for additional information, the agency is to provide the Commission with a copy of its data request. 25 25 This establishes the minimum information required of an agency. EPA, Duke, and Islander East suggest a more collaborative approach to establish a schedule. To this end, the Commission invites agencies to go beyond the requisite minimum and provide additional information, which the Commission will consider in exercising its scheduling responsibilities. Further, in determining a schedule appropriate to a particular application, Commission takes into account not only agencies' input but also the project sponsor's proposed construction schedule and in-service date. 22. Commenters claim that 30 days is an unreasonably short time to be able to render a meaningful assessment of an authorization request. The Commission recognizes that 30 days will often be insufficient for agencies to reach definitive conclusions on each of the stipulated aspects of an authorization request. But that is not the intent. Instead, the information submission is intended to give the Commission an overview to enable it to determine a realistic timetable for the environmental review process. The Commission recognizes that agencies' reports will necessarily be provisional and subject to change, and will take this into account both when first determining a schedule for its NEPA review, and thereafter, to take into account agencies' progress in processing authorization requests. 23. For the purpose of measuring the time for an agency to act on an authorization request, in the NOPR the Commission explained the clock begins to run on the day a request is submitted to the agency. Interior questions whether this would be the day a request is sent or the day it is received; the Commission clarifies that the day the agency receives a request is the first day counted. This is unlikely to be the day an agency takes official notice that a complete application has been received and is ready for processing; rather, this will be the first day an agency is in receipt of a formal written request by a project sponsor for an authorization needed for a prospective NGA section 3 or 7 project. 24. Commenters are concerned with the prospect that an agency might receive a cursory authorization request that could not be evaluated absent additional information. The NOPR stated that if an agency deems a request to be incomplete, and the project sponsor fails to provide the necessary information in time for the agency to reach a decision by the Commission's scheduled deadline, then the agency may deny the request. 26 In turn, the Commission may deny the application before it, or authorization to commence construction, due to the project sponsor's failure to obtain a necessary Federal authorization. The Commission reiterates that whether an agency finds a request complete has no bearing on the agency's allotted response time. That said, the Commission does not expect to have to frequently reject NGA applications due to imperfections in requests for related Federal authorizations in view of the decision to revise the procedural schedule, as described above, to tie agencies' deadlines to issuance of the EA or final EIS. This approach to scheduling should give agencies and applicants adequate advance notice of when decisions on requests for Federal authorizations will be due, and motivate project sponsors to make all necessary information available in order for agencies to reach timely decisions on the merits. 26 This presumably would be the outcome with respect to an authorization required for a project if, as the Oregon Coastal Management Program and Coastal States Organization speculate, the agency is unable to obtain all the information needed to make an appropriate assessment of the proposal in time to meet the scheduled deadline for a final decision. Dominion requests that if an agency informs the Commission that a project sponsor has not adequately supported its request, then “the Commission will give the applicant an opportunity to respond and cure the alleged deficiencies.” Dominion's Comments at 11 (July 31, 2006). In the event of a disagreement regarding the adequacy of the contents of a request for a Federal authorization, the Commission may find reason to revise an agency's deadline for a final decision. However, although the Commission implores project sponsors and agencies to work cooperatively, it cannot compel them to do so. An agency retains the discretion to reject a request on the grounds that information necessary to reach a decision is lacking. 25. The Army COE asks if submitting an electronic copy to the Commission of the agency's response to a project sponsor's authorization request would satisfy the § 385.2013 reporting requirement. It would, provided the submission contains the specified information; moreover, as discussed herein, submission to the Commission need not be by electronic means. Regardless of whether an agency's submission is made electronically or by paper copy, it should be filed in the PF or CP docket number, if available, assigned to the project sponsor's application to the Commission. Procedural Clarifications 26. Once an application is filed with the Commission and a schedule is established, if a project sponsor seeks to make a modification to its proposal that is material to one or more of its requested Federal authorizations, the project sponsor should file a description of the modification with the Commission—regardless of whether the Commission has approved the application or whether the modification would require amendment of the proposal before the Commission. NiSource requests the Commission clarify that a material modification would include a modification to an aspect of the proposal that would substantially change the overall environmental impacts. The Commission accepts this characterization. Following a project sponsor's notice to the Commission of a material modification, it will be within the discretion of the Director of OEP to determine whether the modification will make it impossible for an agency to reach a final decision on a request for a Federal authorization within 90 days of the issuance of the Commission's final environmental document. 27 If so, pursuant to § 375.308, the Director of OEP may establish a revised, separate deadline for a final decision by that agency. Finally, a material modification to a project pending approval by the Commission may merit revising and re-noticing the schedule for the environmental review. The schedule for agencies to complete their reviews would then be adjusted in accordance with the revised schedule for completing the NEPA process. 27 As one such instance, the Army COE describes circumstances where a project sponsor made a material modification that impacted the authorization request under consideration by the Army COE after the Commission's final EIS was completed. Army COE Comments at 3 (July 31, 2006). In such a case, the project sponsor should inform the Commission, and where appropriate, a revised, separate deadline will be established for the affected agency. 27. The New Jersey DEP suggests that in submitting a request for a necessary Federal authorization for an NGA section 3 or 7 project, the project sponsor identify the request as such. The Commission endorses this suggestion, and urges project sponsors to include the Commission's applicable PF or CP docket number, if available, in its authorization request. Identifying the proposed project in this manner, and informing the agency that the request is being submitted in conjunction with an application to the Commission, will alert the agency of the need to inform the Commission of its receipt of the request, pursuant to new § 385.2013. Agencies, in turn, in submitting a report to the Commission on the status of a requested Federal authorization, should identify the party submitting the request, identify the proposed project, and include, if available, the applicable PF or CP docket number. 28. The New Jersey DEP and Delaware DNR propose making the project sponsor, rather than the agency receiving a request for a Federal authorization, responsible for submitting to the Commission the agency's initial 30-day status report and any data requests. The Commission sees disadvantages in having the project sponsor assume this responsibility. In part, the aim of the 30-day report is to open, or extend, the dialogue between the agency and the Commission, since the Commission expects to confer with the responsible agencies over the course of the NEPA review process. Initial contact would not necessarily be established early were the project sponsor to act as an intermediary between agencies and the Commission. The burden on agencies to copy the Commission on a data request sent to a project sponsor is minimal; thus, the Commission finds that rather than having project sponsors receiving an agency's data request forward it on, it is better, in terms of timing and simplicity, to have the agency that generates the data request submit it directly to the Commission. 29. NMFS suggests the Commission serve as a central point of contact linking project sponsors to agencies. The Commission sees no benefit to placing itself between the company seeking to develop a new project and the agencies responsible for examining aspects of the proposal. As is, Commission staff maintains communication with the project sponsor and agencies from the receipt of a request to make use of the prefiling process through issuance of the final decision. 30. The Commission declares, in response to questions raised by INGAA and Islander East, that the procedures described herein do not apply to activities that do not involve “an application for authorization under section 3 or a certificate of public convenience and necessity under section 7.” 28 For example, auxiliary installations and the replacement of facilities under § 2.55, and activities authorized under the blanket certificate provisions of Part 157, subpart F, of the Commission's regulations, and certain activities undertaken in response to a gas emergency, do not require authorization under NGA section 3 or issuance of a certificate under NGA section 7. 28 EPAct 2005 section 313(a)(3) (2005). 31. When a request to authorize a proposed project under the blanket certificate provisions is protested, and the protest is not either dismissed or resolved and withdrawn, the “request filed by the certificate holder shall be treated as an application for section 7 authorization for the particular activity.” 29 However, although a protested blanket project proposal is treated as an application for a case-specific certificate, once the merits of the issues raised in the protest are addressed, and provided the proposal is not denied, the project is authorized under the project sponsor's existing blanket certificate. 30 A project sponsor that makes a prior notice filing for a proposed project to be constructed under blanket certificate authority is acting under the authority of its existing blanket certificate issued pursuant to NGA section 7(c). Consequently, to undertake projects that comply with the blanket certificates provisions, the project sponsor does not need to obtain an additional, separate NGA section 7(c) certificate. Therefore, the new regulatory requirements promulgated herein pursuant to EPAct 2005 will not apply to projects authorized pursuant to the blanket certificate program. 29 18 CFR 157.205(f) (2006). 30 *See, e.g., Texas Eastern Transmission Corp.,* 76 FERC ¶ 61,178 (1996). 32. The City of Fall River, Massachusetts, the Massachusetts EOEA, and the Massachusetts Attorney General seek clarification on how the Federal NEPA review and the environmental review undertaken by a State or the District of Columbia may interact. The different environmental reviews proceed on separate jurisdictional tracks, each on its own schedule and each arriving at its own independent findings. However, as a practical matter, if Federal and State agencies are able to work in tandem, the result can be greater efficiencies for all concerned. Accordingly, where possible, the Commission coordinates its efforts with State agencies when assessing the environmental impacts of a proposed project and intends to continue to do so going forward. 33. Islander East seeks clarification on how the revised regulations will apply to pending projects. The Commission, as a general matter, will not apply the §§ 153.8 and 157.14 filing requirements for project sponsors, or the § 385.2013 reporting requirements for agencies, to applications filed prior to the effective date of this rule. That said, as noted above, the Director of OEP currently has delegated authority to establish schedules in pending proceedings, 31 and if there is cause to do so, the Director of OEP may establish a schedule applicable to an ongoing proceeding. 31 *See* note 7. 34. Mr. Mark Mendelson is concerned that the Commission is creating a “standardized” schedule that will not allow for an adequate assessment of safety risks and long-term project impacts of proposed gas projects on individuals and communities. Mr. Mendelson expresses general dissatisfaction regarding the content, timing, and availability of information concerning proposed projects. He contends that affected individuals do not always receive adequate notice of proposed projects and suggests all potential stakeholders be notified by mail via the United States Postal Service of potential hazards or risks in their general locale posed by a proposed project. 35. The Commission's new reporting requirements and commitment to issue a notice of the environmental review schedule should serve to inform potentially interested persons of a pending project proposal. The Commission expects that its authority to establish schedules will lead to tailoring milestones appropriate to the particularities of proposed projects, and not to a one-size-fits-all standard. Mr. Mendelson's proposal to review and revise the existing public notice requirements is beyond the scope of and is not germane to the matters being addressed in this rulemaking proceeding. However, any affected landowner that does not receive notice of a proposed project in a docketed proceeding as specified in the Commission's regulations, or any individual that suspects the public notice provided is procedurally insufficient or substantively incomplete, can bring such concerns to the Commission's attention and the specific circumstances will be investigated. Consolidated Record 36. Section 313 of EPAct 2005 directs the Commission to “maintain a complete consolidated record of all decisions made or actions taken by the Commission or by a Federal administrative agency or officer (or State administrative agency or officer acting under delegated Federal authority) with respect to any Federal authorization.” 37. The NOPR proposed to require agencies and officers issuing decisions or approvals necessary for proposed projects under NGA sections 3 and 7 to provide the Commission with a copy of the final decision reached or action taken, or a summary thereof, within three days of issuance of a final decision or action. The Commission proposed requiring agencies and officers to file an index of the record, identifying all documents and materials—including pleadings, comments, evidence, exhibits, transcripts of testimony, project alternatives (including alternative routings), studies, and maps—relevant to the decision, within three days of issuance of a final decision or action. 38. Commenters object to the proposed requirement that a copy of the decision and an index to the record be filed within three days of the decision and suggest that the Commission allow 30 days for the filing of the decision and record index. In addition to promoting a 30-day interval, the Conservation Law Foundation recommends the Commission reimburse agencies for reasonable costs incurred in providing the index. 39. The Commission accepts the claim that three days may not provide every agency with adequate time to organize and send the requested information—although, if an agency maintains and updates its index throughout the course of its proceeding, all it need do when a decision is issued is add the decision, or a summary thereof, to the index and submit it to the Commission. The Commission anticipated agencies' submission of the requested information would be merely ministerial, i.e., that the information would be available and electronically transmittable—or at least, easily duplicated and then sent—on the same day a final decision was reached. Commenters persuasively argue that this is not the case. In any event, the Commission does not believe that it is necessary to receive an agency's information within three days of a final decision in order to satisfy the EPAct 2005 mandate to maintain a complete consolidated record. Accordingly, the Final Rule revises the reporting requirement to provide agencies and officers 30 days, not three, to submit a final decision, or summary thereof, and index to the Commission. Further, while the Commission encourages electronic submissions, the proposed regulations are modified to provide the option to make paper filings with the Commission. 32 In view of this modification to the means of filing, the Commission will modify the time provided for agencies to file a copy of data requests with the Commission, extending it from three days to 10 business days. 32 As is currently the case, agencies will be expected to conform their filings to the requirements of 18 CFR 385.2003, to the extent that they are able. 40. The Commission finds no cause to adopt the Conservation Law Foundation's request to provide reimbursement to agencies for expenses related to compliance with the provisions of this rule. Compliance is mandatory pursuant to the authority provided to the Commission by EPAct 2005. Further, in view of the revision above regarding the time permitted and means of submission, and the clarification below regarding the contents of the index, the Commission expects the additional cost incurred by agencies to meet these new reporting requirements will not be unduly burdensome. 41. Commenters' objections to submitting an index appear to stem in part from an overly broad interpretation of what this index must include. The Commission clarifies that the index need not summarize the contents of each item in the agency's record; rather, the index can be any method of notation capable of identifying each item in the record sufficiently to allow a reviewing body to select items of relevance to an issue on appeal. The Oregon Coastal Management Program observes that it typically relies on and references the outcome of multiple state and local actions, but does not include in its record the underlying documents that make up the record in those other actions. There is no need for agencies that follow such an approach to make any adjustment. Any methodology and recordkeeping that an agency now employs that is sufficient to serve as the basis for appeals or reviews is an acceptable “index” for the purposes of the consolidated record. Note that in filing an index, agencies should title the submission “Consolidated Record” and include a prominent reference on the first page to the docket number applied to the Commission proceeding which gave rise to the request for agency authorization. 42. Baker Botts requests the Commission require that agencies provide the Commission with their full record, and not just an index thereto. The Commission finds no cause to require agencies to reproduce and transmit the contents of their entire record to the Commission. Only in the event of appeal will there be any call to view the original or duplicate materials, and even then it is unlikely anything other than a limited subset of the record will be relevant. Therefore, provided an index is prepared, and original materials are retained and available for a minimum of three years, or until an appeal or review is concluded, there should be no delay in producing the portion of an agency's record requested by a reviewing entity. 43. The Army COE points out that when it issues a requested permit, the permit with terms and conditions is sent to the applicant, which has 60 days to appeal the terms and conditions if it chooses to do so; if the permit is denied, the applicant may appeal the denial. The Army COE asks that the date of final agency action for purposes of providing the record to the Commission be “at the end of any appeals process.” 44. The Commission expects that individual agencies' own regulations will determine when their actions are considered “final” and thereby start the 30-day clock for filing their decisions and indices with the Commission. However, the Commission will consider a decision or action on a request for a Federal authorization to be “final,” and consequently subject to the 30-day deadline for filing with the Commission, if the project sponsor submitting the request can rely on an affirmative determination as sufficient authority to proceed. In other words, the agency's deliberation must go beyond verification that a request is complete, or a preliminary determination, or an agency decision that approves a project sponsor's application but makes its right to proceed contingent on the outcome of certain agency review or appeal processes; *i.e.* , the outcome of the agency's final decision or action must grant, condition, or deny the applicant's requested authorization. At this point, the 30-day period begins for an agency to provide the Commission with a copy of its decision, or a summary, and an index to its record in the proceeding. The 30-day period should permit the Commission to receive agencies' decisions and indices in time to compile a complete consolidated record for the purposes of judicial review (or in the case of a CZMA determination, review by the Department of Commerce). 33 33 The Commission notes that when it issues an order granting a project sponsor a section 7 certificate or section 3 authorization under the NGA to construct gas facilities, clearance to commence construction generally is withheld until the project sponsor has obtained other necessary authorizations from other agencies. However, once such authorizations have been obtained by the project sponsor, the project sponsor generally is granted clearance to commence construction, notwithstanding any pending requests for rehearing. 45. The Army COE asserts the Commission should forward Freedom of Information Act
(FOIA)requests to agencies, instead of preparing a response using the consolidated record. The Commission clarifies that FOIA requests should be submitted directly to the agency responsible for generating the information in question. While an agency's index filed with the Commission may be useful in identifying records relevant to a FOIA request, the Commission will not be capable of effectively responding to FOIA requests, or other types of requests, that concern the substantive matters of another agency's proceeding. Further, the Commission's responsibilities under EPAct 2005 do not include compiling documents to respond to FOIA requests. The Commission does not expect to receive or respond to FOIA requests, unless the information sought is part of the Commission's own record of its deliberations in a particular proceeding. Information Collection Statement 46. The Office of Management and Budget
(OMB)regulations require that OMB approve certain reporting, record keeping, and public disclosure (collections of information) requirements imposed by agency rules. 34 Pursuant to OMB regulations, the Commission is submitting these reporting requirements to OMB for its review and approval under section 3507(d) of the Paperwork Reduction Act of 1995 (PRA). 35 Upon approval of a collection of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of this rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number. The information collection requirements in this Final Rule are: FERC-539, FERC-537, FERC-606, and FERC-607. These are mandatory reporting requirements. 34 5 CFR 1320.11 (2006). 35 44 U.S.C. 3507(d) (2005). Public Reporting Burden 47. The Commission did not receive specific comments concerning its burden estimates and uses the same estimates here in the Final Rule. Several commenters expressed concern with the burden that would be imposed if information was required to be submitted under the initially proposed time frame. However, as discussed herein, the Commission has taken these comments into consideration and extended the time frame for submitting information. Data collection Number of respondents Number of responses Hours per response Total hours FERC-537 76 815 0.5 408 FERC-539 12 12 0.5 6 FERC-606 48 1702 4.4 7,489 FERC-607 48 1654 6.3 10,423 Totals 18,326 *Total Annual Hours for Collection:* 18,326. *Information Collection Costs:* Because of the regional differences and the various staffing levels that will be involved in preparing the documentation (legal, technical, and support), the Commission is using an hourly rate of $150 to estimate the costs for filing and other administrative processes (reviewing instructions, searching data sources, completing and transmitting the collection of information). The estimated cost is $2,748,900. *Title:* FERC-539 “Gas Pipeline Certificates: Import/Export Related;” FERC-537 “Gas Pipeline Certificates: Construction, Acquisition and Abandonment;” FERC-606 “Gas Pipeline Certificates: Notification of Request for Federal Authorization;” and FERC-607 “Report on Decision or Action on Request for Federal Authorization.” *Action:* Data Collection. *OMB Control No.:* FERC-539 (1902-0062); FERC-537 (1902-0060); FERC-606 and FERC-607 (To be determined). *Respondents:* Natural gas pipeline companies and state agencies and officers. *Frequency of Responses:* On occasion. *Necessity of Information:* EPAct 2005 section 313 directs the Commission to
(1)establish schedules for State and Federal agencies and officers to act on requests for Federal authorizations required for natural gas projects under sections 3 and 7 of the NGA and
(2)maintain a complete consolidated record of all decisions or actions taken by the Commission and other agencies and officers with respect to such authorizations. The Commission considers the regulatory provisions adopted herein to be the minimum necessary for the Commission to implement the new authority provided by EPAct 2005. 48. For information regarding the requirements of the collections of information and the associated burden estimates, including suggestions for reducing this burden, please send comments to the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 (Attention: Michael Miller, Office of the Executive Director), or send e-mail to *michael.miller@ferc.gov* ), or to the Office of Management and Budget (Attention: Desk Officer for the Federal Energy Regulatory Commission), by fax to
(202)395-7285, or by e-mail to *oira_submission@omb.eop.gov.* Environmental Analysis 49. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. 36 No environmental consideration is raised by promulgation of a rule that is procedural in nature or that does not substantially change the effect of legislation or regulations being amended. 37 The regulations adopted herein require authorizing agencies to provide the Commission with copies or summaries of decisions and indices to the records of those decisions in cases arising under the Commissions jurisdiction under the Natural Gas Act. These are minor procedural changes to the Commission's existing regulations and do not substantially change the effect of any legislation or regulations. Nor do they substantially change any regulatory requirements to which pipeline companies or authorizing agencies are currently subject. Accordingly, the preparation of an environmental document is not required. 36 Order No. 486, Regulations Implementing the National Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Preambles 1986-1990 ¶ 30,783 (1987). 37 18 CFR 380.4(a)(2)(ii) (2006). Regulatory Flexibility Act Certification 50. The Regulatory Flexibility Act of 1980
(RFA)38 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. The Commission is not required to make such an analysis if proposed regulations would not have such an effect. 38 5 U.S.C. 601-612 (2005). 51. Although it appears that agencies affected by the rule promulgated today do not fall within the RFA's definition of “small governmental jurisdiction” 39 or its definition of “small entities,” 40 the Commission is nevertheless mindful of costs and burdens to be imposed upon agencies required to provide copies of decisions and indexes to the record in Federal authorization proceedings. In response to commenters that observe certain agencies may lack the resources needed to comply with the proposed three-day deadline for filing and the proposed requirement for electronic filing, the Commission is adopting alternative requirements to take into account the resources available to the agencies to accommodate the limited resources of small entities. 41 The three-day deadline is extended to 30 days, and electronic filing, while still the preferred option, is no longer required. 39 5 U.S.C. 601(5)
(2005)provides that “the term ‘small governmental jurisdiction’ means governments of cities, counties, towns, townships, villages, school districts, or special districts, with a populations of less than fifty thousand.” 40 5 U.S.C. 601(6)
(2005)provides that “the term ‘small entity’ shall have the same meaning as the terms ‘small business,’ ‘small organization,’ and ‘small governmental jurisdiction.’ ” 41 5 U.S.C. 603(c)(1) and
(2)(2005). 52. Most of the natural gas companies regulated by the Commission do notfall within the RFA's definition of a small entity. 42 Approximately 114 natural gas companies are potential respondents subject to the requirements adopted by this rule. For the year 2004 (the most recent year for which information is available), 32 companies had annual revenues of less than $6.5 million. The procedural modifications enacted herein should have no significant economic impact on those entities—be they large or small—subject to the Commission's NGA jurisdiction. In view of these considerations, the Commission certifies that this Final Rule's amendments to the regulations will not have a significant impact on a substantial number of small entities. 42 *See* 5 U.S.C. 601(3) (2005), citing section 3 of the Small Business Act, 15 U.S.C. 623 (2005). Section 3 of the SBA defines a “small business concern” as a business which is independently owned and operated and which is not dominant in its field of operation. The Small Business Size Standards component of the North American Industry Classification System defines a small natural gas pipeline company as one that transports natural gas and whose annual receipts (total income plus cost of goods sold) did not exceed $6.5 million for the previous year. Document Availability 53. In addition to publishing the full text of this document in the **Federal Register** , the Commission provides all interested persons an opportunity to view and print the contents of this document via the Internet through FERC's Home Page ( *http://www.ferc.gov* ) and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. eastern time) at 888 First Street, NE., Room 2A, Washington DC 20426. From FERC's Home Page on the Internet, this information is available in the Commission's document management system, eLibrary. The full text of this document is available in eLibrary in PDF and Microsoft Word format for viewing, printing, and downloading. To access this document in eLibrary, type RM06-1 in the docket number field. 54. User assistance is available for eLibrary and the Commission's Web site during normal business hours at
(202)502-8222 or the Public Reference Room at
(202)502-8371 Press 0, TTY
(202)502-8659. E-Mail the Public Reference Room at *public.referenceroom@ferc.gov.* Effective Date and Congressional Notification 55. These regulations are effective December 26, 2006. 56. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” as defined in Section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996. 43 43 5 U.S.C. 804(2) (2005). List of Subjects 18 CFR Part 153 Exports, Imports, Natural gas, Reporting and recordkeeping requirements. 18 CFR Part 157 Administrative practice and procedure, Natural gas, Reporting and recordkeeping requirements. 18 CFR Part 375 Authority delegations (Government agencies), Seals and insignia, Sunshine Act. 18 CFR Part 385 Administrative practice and procedure, Electric power, Penalties, Pipelines, Reporting and recordkeeping requirements. By the Commission. Magalie R. Salas, Secretary. In consideration of the foregoing, the Commission amends parts 153, 157, 375, and 385, Chapter I, Title 18, *Code of Federal Regulations, as follows:* PART 153—APPLICATIONS FOR AUTHORIZATION TO CONSTRUCT, OPERATE, OR MODIFY FACILITIES USED FOR THE EXPORT OR IMPORT OF NATURAL GAS 1. The authority citation for part 153 continues to read as follows: Authority: 15 U.S.C. 717b, 717o; E.O. 10485, 3 CFR, 1949-1953 Comp., p. 970, as amended by E.O. 12038, 3 CFR, 1978 Comp., p. 136, DOE Delegation Order No. 0204-112, 49 FR 6684 (February 22, 1984). 2. In subpart B, § 153.4 is added to read as follows: § 153.4 General requirements. The procedures in §§ 157.5, 157.6, 157.8, 157.9, 157.10, 157.11, and 157.12 of this chapter are applicable to the applications described in this subpart. 3. In § 153.8: a. The word “and” is removed from the end of paragraph (a)(7); b. The period is removed from the end of paragraph (a)(8), and “; and” is added in its place; and c. Paragraph (a)(9) is added to read as follows: § 153.8 Required exhibits.
(a)* * *
(9)*Exhibit H.* A statement identifying each Federal authorization that the proposal will require; the Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, that will issue each required authorization; the date each request for authorization was submitted; why any request was not submitted and the date submission is expected; and the date by which final action on each Federal authorization has been requested or is expected. PART 157—APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY AND FOR ORDERS PERMITTING AND APPROVING ABANDONMENT UNDER SECTION 7 OF THE NATURAL GAS ACT 4. The authority citation for part 157 continues to read as follows: Authority: 15 U.S.C. 717-717w. 5. In § 157.9: a. The section heading is revised; b. The existing text is designated as paragraph
(a)and the word “business” is added immediately before the phrase “days of filing”; and c. A new paragraph
(b)is added, to read as follows: § 157.9 Notice of application and notice of schedule for environmental review.
(b)For each application that will require an environmental assessment or an environmental impact statement, notice of a schedule for the environmental review will be issued within 90 days of the notice of the application, and subsequently will be published in the **Federal Register.** 6. In § 157.14, paragraph (a)(12) is added to read as follows: § 157.14 Exhibits.
(a)* * *
(12)*Exhibit J—Federal authorizations.* A statement identifying each Federal authorization that the proposal will require; the Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, that will issue each required authorization; the date each request for authorization was submitted; why any request was not submitted and the date submission is expected; and the date by which final action on each Federal authorization has been requested or is expected. 7. In subpart A, § 157.22 is added to read as follows: § 157.22 Schedule for final decisions on a request for a Federal authorization For an application under section 3 or 7 of the Natural Gas Act that requires a Federal authorization— *i.e.* , a permit, special use authorization, certification, opinion, or other approval—from a Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, a final decision on a request for a Federal authorization is due no later than 90 days after the Commission issues its final environmental document, unless a schedule is otherwise established by Federal law. PART 375—THE COMMISSION 8. The authority citation for part 375 continues to read as follows: Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352. 9. In § 375.308, paragraph
(bb)is added to read as follows: § 375.308 Delegations to the Director of the Office of Energy Projects.
(bb)Establish a schedule for each Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, to issue or deny Federal authorizations required for natural gas projects subject to section 3 or 7 of the Natural Gas Act. PART 385—RULES OF PRACTICE AND PROCEDURE 10. The authority citation for part 385 continues to read as follows: Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16 U.S.C. 791a-825r, 2601-2645; 28 U.S.C. 2461; 31 U.S.C. 3701, 9701; 42 U.S.C. 7101-7352; 49 U.S.C. 60502; 49 App. U.S.C. 1-85 (1988). 11. Section 385.2013 is redesignated as § 385.2015 and the heading of newly designated § 385.2015 is revised to read as follows: § 385.2015 Videotapes (Rule 2015). 12. New §§ 385.2013 and 385.2014 are added to read as follows: § 385.2013 Notification of requests for Federal authorizations and requests for further information (Rule 2013).
(a)For each Federal authorization— *i.e.* , permit, special use authorization, certification, concurrence, opinion, or other approval—required under Federal law with respect to a natural gas project for which an application has been filed under section 3 of the Natural Gas Act for a certificate of public convenience and necessity under section 7 of the Natural Gas Act, each Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, responsible for a Federal authorization must file with the Commission within 30 days of the date of receipt of a request for a Federal authorization, notice of the following:
(1)Whether the application is ready for processing, and if not, what additional information or materials will be necessary to assess the merits of the request;
(2)The time the agency or official will allot the applicant to provide the necessary additional information or materials;
(3)What, if any, studies will be necessary in order to evaluate the request;
(4)The anticipated effective date of the agency's or official's decision; and
(5)If applicable, the schedule set by Federal law for the agency or official to act.
(b)A Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, considering a request for a Federal authorization that submits a data request to an applicant must file a copy of the data request with the Commission within 10 business days. § 385.2014 Petitions for appeal or review of Federal authorizations (Rule 2014).
(a)For each Federal authorization— *i.e.* , permit, special use authorization, certification, concurrence, opinion, or other approval—required under Federal law with respect to a natural gas project for which an application has been filed for authorization under section 3 of the Natural Gas Act for a certificate of public convenience and necessity under section 7 of the Natural Gas Act, the Federal agency or officer, or State agency or officer acting pursuant to delegated Federal authority, responsible for each Federal authorization must file with the Commission within 30 days of the effective date of a final decision or action on a request for a Federal authorization or the expiration of the time provided by the Commission or by Federal law for a final decision or action, the following:
(1)A copy of any final decision or action;
(2)An index identifying all documents and materials—including pleadings, comments, evidence, exhibits, testimony, project alternatives, studies, and maps—relied upon by the agency or official in reaching a decision or action; and
(3)The designation “Consolidated Record” and the docket number for the Commission proceeding applicable to the requested Federal authorization.
(b)The agencies' and officers' decisions, actions, and indices, and the Commission's record in each proceeding, constitute the complete consolidated record. The original documents and materials that make up the complete consolidated record must be retained by agencies, officers, and the Commission for at least three years from the effective date of a decision or action or until an appeal or review is concluded.
(c)Upon appeal or review of a Federal authorization, agencies, officers, and the Commission will transmit to the reviewing authority, as requested, documents and materials that constitute the complete consolidated record. [FR Doc. E6-18025 Filed 10-26-06; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF HOMELAND SECURITY Bureau of Customs and Border Protection 19 CFR Part 123 Required Advance Electronic Presentation of Cargo Information for Truck Carriers: ACE Truck Manifest AGENCY: Customs and Border Protection, Department of Homeland Security. ACTION: Notice. SUMMARY: Pursuant to section 343(a) of the Trade Act of 2002 and implementing regulations published in December, 2003, truck carriers and other eligible parties were directed to transmit advance electronic truck cargo information to the Bureau of Customs and Border Protection
(CBP)through a CBP-approved electronic data interchange (EDI). This notice announces that CBP is designating the Automated Commercial Environment
(ACE)Truck Manifest System as the approved EDI for the transmission of the required data and that the requirement that advance electronic truck cargo information be transmitted through ACE will be phased in by groups of ports of entry identified in this document. DATES: Trucks entering the United States through all ports of entry in the states of Washington and Arizona and through the ports of Pembina, Neche, Walhalla, Maida, Hannah, Sarles and Hansboro in North Dakota will be required to transmit the advance information through the ACE Truck Manifest system effective January 25, 2007. ACE will be phased in as the mandatory transmission system for the other ports identified in this notice in the sequential order that they are listed, following publication of 90 days notice in the **Federal Register** for each group of ports. FOR FURTHER INFORMATION CONTACT: James Swanson, Field Operations,
(202)344-2576. SUPPLEMENTARY INFORMATION: Background Section 343(a) of the Trade Act of 2002, as amended (the Act; 19 U.S.C. 2071 note), required that CBP promulgate regulations providing for the mandatory transmission of electronic cargo information by way of a CBP-approved electronic data interchange
(EDI)system before the cargo is brought into or departs the United States by any mode of commercial transportation (sea, air, rail or truck). The cargo information required is that which is reasonably necessary to enable high-risk shipments to be identified for purposes of ensuring cargo safety and security and preventing smuggling pursuant to the laws enforced and administered by CBP. On December 5, 2003, CBP published in the **Federal Register** (68 FR 68140) a final rule to effectuate the provisions of the Act. In particular, a new § 123.92 (19 CFR 123.92) was added to the regulations to implement the inbound truck cargo provisions. Section 123.92 describes the general requirement that, in the case of any inbound truck required to report its arrival under § 123.1(b), if the truck will have commercial cargo aboard, CBP must electronically receive certain information regarding that cargo through a CBP-approved EDI system no later than 1 hour prior to the carrier's reaching the first port of arrival in the United States. For truck carriers arriving with shipments qualified for clearance under the FAST (Free and Secure Trade) program, § 123.92 provides that CBP must electronically receive such cargo information through the CBP-approved EDI system no later than 30 minutes prior to the carrier's reaching the first port of arrival in the United States. ACE Truck Manifest Test On September 13, 2004, CBP published a general notice in the **Federal Register** (69 FR 55167) announcing a test allowing participating Truck Carrier Accounts to transmit electronic manifest data for inbound cargo through ACE, with any such transmissions automatically complying with advance cargo information requirements as provided in section 343(a) of the Trade Act of 2002. Truck Carrier Accounts participating in the test have the ability to electronically transmit the truck manifest data and obtain release of their cargo, crew, conveyances, and equipment via the ACE Portal or electronic data interchange messaging. A series of notices have announced additional deployments of the test, with deployment sites being phased in as clusters. Clusters were announced in subsequent notices published in the **Federal Register** including: 70 FR 30964, published on May 31, 2005; 70 FR 43892, published on July 29, 2005; 70 FR 60096, published on October 14, 2005; 71 FR 3875, published on January 24, 2006; and 71 FR 23941, published on April 25, 2006. The use of ACE to transmit advance electronic truck cargo information will not be required in any port in which CBP has not first conducted the test. ACE will be phased in as the required transmission system at some ports even while it is still being tested at other ports. CBP will continue, as necessary, to announce in subsequent notices in the **Federal Register** the deployment of the ACE truck manifest system test at additional ports. Designation of ACE Truck Manifest System as the Approved Data Interchange System Throughout the deployment process, CBP and system users from the trade have expended considerable resources in a collaborative effort to test the ACE Truck Manifest System. This collaboration has helped correct operational difficulties, improve processing times, and develop system enhancements not present in the original configuration. Full implementation of the enhancements will occur over the next few months. Accordingly, CBP has determined that the ACE Truck Manifest System should be mandated for all and is the approved EDI system for transmission of the advance information required pursuant to section 343(a) of the Trade Act of 2002 and the implementing regulations. Section 123.92(e) of the regulations (19 CFR 123.92(e)) requires CBP, 90 days prior to mandating advance electronic information at a port of entry, to publish notice in the **Federal Register** informing affected carriers that the EDI system is in place and fully operational. Effective 90 days from the date of publication of this notice, truck carriers entering the United States through all ports of entry in the states of Washington and Arizona and through the ports of Pembina, Neche, Walhalla, Maida, Hannah, Sarles and Hansboro in North Dakota, will be required to present advance electronic cargo information regarding truck cargo through the ACE Truck Manifest. CBP will be publishing notice in the **Federal Register** as it phases in the requirement that truck carriers utilize the ACE system to present advance electronic truck cargo information at other ports. Although other systems that have been deemed acceptable by CBP for transmitting advance truck manifest data will continue to operate and may still be used in the normal course of business for purposes other than transmitting advance truck manifest data, use of systems other than ACE will no longer satisfy advance electronic cargo information requirements at a particular port of entry once the 90-day notice for that port has been published and the 90-day period has elapsed. Compliance Sequence At all ports of entry in the states of Washington and Arizona, and the ports of Pembina, Neche, Walhalla, Maida, Hannah, Sarles, and Hansboro in North Dakota, ACE will be the mandatory truck cargo information transmission system as of January 25, 2007. Subsequently, ACE will continue to be phased in as the mandatory EDI system, at the ports identified below in the sequential order of the group in which they are listed. As mandatory ACE is phased in at these remaining ports, CBP will provide 90 days' notice through publication in the **Federal Register** prior to requiring the use of ACE for the transmission of advance electronic truck cargo information at a particular group of ports. The remaining ports at which the mandatory use of ACE will continue to be phased in are divided into 5 groups, listed in sequential order, as follows: 1. All ports of entry in the states of Michigan, Texas, California, New Mexico, and New York. 2. All ports of entry in the states of Vermont and Alaska. 3. All ports in the states of Maine, Idaho, and Montana. 4. All remaining ports in the state of North Dakota (those not identified as having a specific compliance date). 5. All ports in the state of Minnesota. Dated: October 23, 2006. Deborah J. Spero, Acting Commissioner, Customs and Border Protection. [FR Doc. E6-17998 Filed 10-26-06; 8:45 am] BILLING CODE 9111-14-P SOCIAL SECURITY ADMINISTRATION 20 CFR Part 418 RIN 0960-AG11 Medicare Part B Income-Related Monthly Adjustment Amount AGENCY: Social Security Administration (SSA). ACTION: Final rules. SUMMARY: We are adding to our regulations a new subpart, Medicare Part B Income-Related Monthly Adjustment Amount, to contain the rules we will follow for Medicare Part B income-related monthly adjustment amount determinations. The monthly adjustment amount represents the amount of decrease in the Medicare Part B premium subsidy, i.e. the amount of the Federal Government's contribution to the Federal Supplementary Medical Insurance
(SMI)Trust Fund. This new subpart implements section 811 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the Medicare Modernization Act or MMA) and contains the rules for determining when, based on income, a monthly adjustment amount will be added to a Medicare Part B beneficiary's standard monthly premium. These final rules describe: What the new subpart is about; what information we will use to determine whether you will pay an income-related monthly adjustment amount and the amount of the adjustment when applicable; when we will consider a major life-changing event that results in a significant reduction in your modified adjusted gross income; and how you can appeal our determination about your income-related monthly adjustment amount. DATES: These final rules are effective December 26, 2006. FOR FURTHER INFORMATION CONTACT: Craig Streett, Team Leader, Office of Income Security Programs, Social Security Administration, 252 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, 410-965-9793 or TTY 1-800-966-5609, for information about this **Federal Register** document. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at *http://www.socialsecurity.gov.* SUPPLEMENTARY INFORMATION: Electronic Version The electronic file of this document is available on the date of publication in the **Federal Register** at *http://www.gpoaccess.gov/fr/index.html.* Statutory Provisions Section 811 of the MMA (Pub. L. 108-173), which was enacted into law on December 8, 2003, added subsection
(i)to section 1839 of the Social Security Act (the Act), and established a Medicare Part B premium subsidy reduction (referred to in these final rules as “the income-related monthly adjustment amount”) effective January 1, 2007, which will be added to the standard monthly Medicare Part B premium amount for certain beneficiaries. Section 1839(i) of the Act was subsequently amended by section 5111 of the Deficit Reduction Act of 2005, Public Law 109-171. The Centers for Medicare & Medicaid Services (CMS), in the Department of Health and Human Services (HHS), has overall responsibility for determining the annual Medicare Part B standard monthly premium amounts and premium increases for late enrollment or reenrollment. CMS regulations at 42 CFR part 408 describe the rules that CMS uses to determine those amounts. As explained in these final rules, we are responsible only for making initial determinations and reconsidered determinations about income-related monthly adjustment amounts. Any subsequent levels of appeal will be provided by HHS under its regulations at 42 CFR part 405. Section 702(a)(5) of the Act allows us to make the rules and regulations necessary or appropriate to carry out the functions of SSA. Other provisions in section 811 of the MMA provide us with additional specific authorization to make rules and regulations to determine the income-related monthly adjustment amount. For example, sections 1839(i)(4)(B) and (i)(4)(C)(ii)(II) of the Act authorize us to promulgate regulations necessary for our determinations about income-related monthly adjustment amounts. Section 1839 of the Act requires the Secretary of HHS to determine annually the Medicare Part B standard monthly premium amount. Section 1839 of the Act also authorizes the Secretary of HHS to establish a premium increase for late enrollment and for reenrollment under certain circumstances and provides for a limitation on increases in the Medicare Part B standard monthly premium for some beneficiaries. The new section 1839(i) requires us to determine the income-related monthly adjustment amount for Medicare beneficiaries with modified adjusted gross income above an established threshold. The income-related monthly adjustment amount is added to the Medicare Part B standard monthly premium and any applicable premium increase for late enrollment or reenrollment. The MMA provides that in 2007 the modified adjusted gross income threshold is $80,000 for individuals who file their Federal income taxes with a filing status of single, married filing separately, head of household, or qualifying widow(er) with dependent child and $160,000 for married individuals who file a joint tax return. Section 811(c)(1) of the MMA enacted a new section 6103(1)(20) of the Internal Revenue Code authorizing the Internal Revenue Service
(IRS)to provide certain income information to us to use in determining the income-related monthly adjustment amount. The MMA requires that the threshold amount be adjusted yearly based on the Consumer Price Index. Section 811(b)(1)(C) of the MMA also amended section 1839(f) of the Act, so that the limitation on increases in the Medicare Part B standard monthly premium for some beneficiaries will not apply to beneficiaries who are responsible for an income-related monthly adjustment amount. Background Medicare Part B is a voluntary program which provides medical insurance coverage for medical and health services such as physician services, diagnostic services, and medical supplies. Medicare Part B beneficiaries are responsible for deductibles, co-insurance and monthly premiums towards the cost of covered services. CMS promulgates rules and regulations concerning the Medicare program. The Medicare Part B standard monthly premium is set by CMS so that it covers approximately 25 percent of the Medicare Part B program costs. Certain beneficiaries may also pay an increased premium for late enrollment in Medicare Part B or for reenrollment after a period without coverage. Approximately 75 percent of the full cost of Medicare Part B is subsidized by the Federal Government by contributions to the Federal Supplementary Medical Insurance Trust Fund. In addition, for certain beneficiaries whose premiums are deducted from other payable Social Security (or railroad retirement) benefit amounts that they receive, the yearly adjustment to the premium amount cannot be raised more than the amount of the cost-of-living adjustment for those other benefits. Starting in January 2007, the Medicare Part B premium subsidy will be reduced for an estimated 4 to 5 percent of the approximately 40 million Medicare Part B beneficiaries. Beneficiaries who had modified adjusted gross income above the threshold level set in the MMA in the tax year 2 years prior to the year for which we make a determination about whether they must pay an income-related monthly adjustment amount (the effective year) will receive a reduced Federal subsidy of their Medicare Part B premium. The reduction of the Federal premium subsidy will result in beneficiaries with modified adjusted gross income above the threshold paying more of the cost of their Medicare Part B benefits through an income-related monthly adjustment amount that will be added to the Medicare Part B standard monthly premium plus any applicable premium increase for late enrollment or reenrollment. How This Will Affect You Your modified adjusted gross income is your adjusted gross income, as defined at 26 U.S.C. 62 and in related regulations, plus certain other forms of income that may be excluded from adjusted gross income for the purpose of determining the amount of Federal income tax that you must pay. The MMA as amended by the Deficit Reduction Act provides that the payment of the full amount of the income-related monthly adjustment amount will be phased in starting in 2007 and will be completed in 2009. If you must pay an income-related monthly adjustment amount, you will not be eligible for the limitation on Medicare Part B standard monthly premium increase beyond the amount of your Social Security (or tier 1 railroad retirement) cost-of-living adjustments, as described in 42 CFR 408.20. If you are a Medicare beneficiary prior to January 1, 2007 and you will be required to pay an income-related monthly adjustment amount in 2007, we will notify you by sending you a letter at the end of 2006 about the additional amount of your premium and any related changes in the amount of your Social Security monthly benefits or other payments (railroad retirement or Civil Service annuity payments) from which your premiums will be withheld. If you enroll in Medicare Part B after January 1, 2007, your initial Medicare Part B premium may not include an income-related monthly adjustment amount. If we subsequently determine that you must pay an income-related monthly adjustment amount for your Medicare Part B coverage, you will be notified shortly after you enroll in Medicare Part B, and you will be responsible for your income-related monthly adjustment amount for all months after December 2006 for which you were enrolled in and entitled to Medicare Part B. If you are a Medicare beneficiary during 2007 or after, we will notify you prior to the start of each year if you must pay an income-related monthly adjustment amount in that year. How We Determine Your Income-Related Monthly Adjustment Amount The amount of your modified adjusted gross income will determine if you are to pay an income-related monthly adjustment. Section 1839(i)(2) of the Act establishes the threshold for modified adjusted gross income used to determine if you are to pay an income-related monthly adjustment amount. In 2007, the modified adjusted gross income threshold amount is $80,000 for individuals who file their Federal income tax return with a filing status of single, married filing separately, head of household, or qualifying widow(er) with dependent child, and $160,000 for individuals who file a joint income tax return with their spouse. Section 1839(i)(4) of the Act requires us to request information about your modified adjusted gross income from IRS in the Department of the Treasury and to use this information to determine if you must pay an income-related monthly adjustment amount. We will specify the tax year involved in our information request. We will request that IRS send us Federal income tax return information about your modified adjusted gross income for the tax year which is 2 years before the effective year. If modified adjusted gross income information is not available from IRS for the tax year 2 years before the effective year of our determination, IRS will send us your modified adjusted gross income information for the tax year 3 years before the effective year if it exceeds the threshold. We will use information for the tax year 3 years prior to determine whether you must pay an income-related monthly adjustment amount only until we obtain information for the tax year 2 years prior. When we use such information to make a determination, we will make retroactive corrections that will apply to all months that you paid an incorrect income-related monthly adjustment amount. If we use information from IRS for the tax year 3 years before the effective year of our determination, you may request that we use information that you provide for the tax year 2 years before that year. In some cases, you may pay a higher premium based on your 2-year information. However, providing that information to us rather than having us receive information from IRS at a later date will help you avoid an extensive retroactive correction. In order for us to make an initial determination based on such a request, you must provide your retained copy of your Federal income tax return for that year, a copy that you request from IRS, or an IRS transcript of your return. If you provide your retained copy, we will also verify this information with IRS. If we receive information from IRS about your modified adjusted gross income for a tax year for which you did not file a tax return that shows that you had income that year that exceeded the established threshold, we will make a determination about your income-related monthly adjustment amount for that year. We will apply the highest applicable percentage adjustment based on that information, as required by statute. If IRS provides information to us that indicates a change in your modified adjusted gross income for a prior tax year, we will use this information to establish corrections for the appropriate effective years regardless of when we receive such information. We are consulting with IRS to develop processes for the transmission of modified adjusted gross income information for situations involving those who do not file income tax returns and for changes in information that IRS provides. The Sliding Scale Formula and How It Applies to You Section 1839(i)(3) prescribes a sliding scale formula that CMS will use to establish annually four income-related monthly adjustment amounts beginning in 2007. The calculation of the income-related monthly adjustment amount reduces a beneficiary's Medicare Part B premium subsidy using specified percentages. The amount of this premium subsidy reduction is the income-related monthly adjustment amount. To determine each income-related monthly adjustment amount, CMS will use the unsubsidized Medicare Part B premium (approximately four times the Medicare Part B standard monthly premium) and multiply it by a specified percentage. The percentage used in the calculation changes as the amount of modified adjusted gross income increases the income-related monthly adjustment amount. We will use your modified adjusted gross income and your Federal income tax filing status (e.g., single, married filing jointly, married filing separately) to determine whether you must pay an income-related monthly adjustment amount, and if so, what your income-related monthly adjustment amount will be. Section 1839(i)(3)(C) provides the modified adjusted gross income ranges. The range amounts for individuals who are married filing jointly are double the range amounts for single income tax filers. IRS recognizes three additional filing statuses: head of household, qualifying widow(er) and married filing separately. If you file as a head of household or as a qualifying widow(er), we will apply the modified adjusted gross income range applicable to individuals who file their Federal income tax return with a filing status of single. Section 1839(i)(3)(C)(iii) provides a different rule for determining the income-related monthly adjustment amount for individuals who file their Federal income tax return with a filing status of married filing separately and who lived with their spouse at any time during the year. For these individuals, we subtract the threshold amount as described in section 1839(i)(2)(A) established for single income tax filers for that calendar year from the modified adjusted gross income ranges for individuals with a tax filing status of single. For 2007, this results in the following two ranges for married filing separately:
(1)$80,000 to less than or equal to $120,000 and
(2)More than $120,000. Individuals affected by section 1839(i)(3)(C)(iii) will pay either the third or fourth range of income-related monthly adjustment amount as described in section 1839(i)(3)(C)(i) as modified by 1839(i)(3)(B). Starting in 2007 for calendar year 2008, and annually thereafter for each following calendar year, CMS will publish the annual modified adjusted gross income ranges and income-related monthly adjustment amounts that are associated with each range. We will use this published information to determine which amount applies to you based on your tax filing status in the tax year we are using to determine your income-related monthly adjustment amount. If you filed an amended tax return for the tax year we used to make a determination of your income-related monthly adjustment amount, you may request that we use your amended tax return for that year. You must provide us with proof that you filed an amended tax return with IRS, including your retained copy of the amended tax return and a letter from IRS verifying receipt of the return or an IRS transcript of your amended tax return. If you believe that IRS provided incorrect modified adjusted gross income information and we used that information to determine your income-related monthly adjustment amount, you may request that we make a new income-related monthly adjustment amount determination. You must provide proof of the error in the IRS data and evidence of your actual modified adjusted gross income, such as a copy of the return that you obtain from IRS. When we use information from your amended or corrected Federal income tax return to make a determination, we will make retroactive adjustments that will apply to all months that you paid an incorrect income-related monthly adjustment amount. Phase-In and Inflation Adjustment of the Income-Related Monthly Adjustment Amount Section 1839(i)(3)(B) requires the amount of the full income-related monthly adjustment to be phased in over a 3-year period beginning in 2007. The effect is that from 2007 through 2009 the amount of the income-related monthly adjustment amount will increase, because the subsidy will decrease. The percentage will change each year so that the income-related monthly adjustment amount will gradually increase, until the full amount is phased in starting in 2009. In 2007, you will pay 33 percent of the income-related monthly adjustment amount, and in 2008, you will pay 67 percent of the income-related monthly adjustment amount. In 2009, you will pay the full income-related monthly adjustment amount for your tax filing status and modified adjusted gross income. Beginning in 2008, section 1839(i)(5) of the Act requires an annual inflation adjustment for the threshold amount and the amounts used in the modified adjusted gross income ranges. The adjustment will be based on the percentage increase in the Consumer Price Index for all urban consumers and rounding the result to the nearest $1,000. CMS will calculate and publish these amounts annually. Changes in Your Modified Adjusted Gross Income Section 1839(i)(4)(C) of the Act requires us to establish procedures in consultation with the Secretary of the Treasury for determining your modified adjusted gross income for a tax year more recent than the information ordinarily provided by IRS. The statute states that we will grant your request to use a more recent tax year to determine your income-related monthly adjustment amount only when: • You experience a major life-changing event; • That major life-changing event results in a significant reduction in your modified adjusted gross income; • You request that we use a more recent tax year's modified adjusted gross income; and • You provide evidence of the event and the reduction in your modified adjusted gross income. These final rules describe the standards that you must meet in order for us to use a more recent tax year's modified adjusted gross income to determine whether you must pay an income-related monthly adjustment amount and what your income-related monthly adjustment amount will be. In these final rules we define qualifying major life-changing events and what is a significant reduction in your modified adjusted gross income. We also specify the evidence we will require of major life-changing events and the resulting reduction in your modified adjusted gross income. Section 1839(i)(4)(C)(ii)(II) specifies that major life-changing events include marriage, divorce, and death of a spouse. Under that section, we have discretion to include in regulations additional major life-changing events that would allow us to grant your request that we use information from a more recent tax year to determine your income-related monthly adjustment amount. In these rules we establish the following categories of qualifying major life-changing events: • Death of a spouse; • Marriage; • Marriage ended by divorce or annulment; • Partial or full work stoppage; • Loss of income from income-producing property when the loss is not at your direction, for example, loss of income from real property due to a natural disaster in a Presidentially or Gubernatorially-declared disaster area, or due to arson, or destruction of livestock or crops; and • Reduction or loss of income from an insured pension plan due to termination or reorganization of the pension plan, or a scheduled cessation of your pension benefits. We have included these additional categories of major life-changing events because we recognize that these events may cause a significant reduction in your modified adjusted gross income. We will include losses in pension income from an insured pension plan that occur due to events outside of your control, such as underfunding that results in a termination of the plan, but not due to your choices about funding an employee-directed pension plan. The statute authorizes us to define as major life-changing events circumstances that affect your income, not circumstances that affect only your expenses. We define a significant reduction in your modified adjusted gross income as any change that results in a reduction or elimination of your income-related monthly adjustment amount. Therefore, a significant reduction in your modified adjusted gross income is any change that lowers your income below the threshold amount or lowers the modified adjusted gross income range in which your income falls. Section 1839(i)(4)(C)(ii) provides that we may grant your request to use a more recent tax year's modified adjusted gross income to determine your income-related monthly adjustment amount only if you provide us with a copy of a filed Federal income tax return or equivalent document. These final rules define the evidence that we will consider to be equivalent to a copy of a filed Federal income tax return. When we make an income-related monthly adjustment amount determination based on your request due to a qualifying major life-changing event, the determination will generally be effective on January 1 of the calendar year for which we make the determination. If you enrolled in Medicare Part B after January 1 of the year for which we make an income-related monthly adjustment amount determination based on your request due to a major life-changing event, the determination will be effective the month of your Medicare Part B enrollment. When we make an income-related monthly adjustment amount determination following a major life-changing event using your more recent tax year's modified adjusted gross income, we will continue trying to get IRS data for that tax year. When we receive modified adjusted gross income information from IRS for that tax year, we will use the information from IRS to determine the correct income-related monthly adjustment amount for the year or years for which we used information that you provided, and we will make retroactive adjustments, if necessary. Retroactive adjustments will apply to all months for which you paid an incorrect income-related monthly adjustment amount. If You Disagree With Our Determination of Your Income-Related Monthly Adjustment Amount We will decide whether you must pay an income-related monthly adjustment, and the amount of any adjustment, based on information we receive from IRS or you. We will send you a notice of our initial determination of your income-related monthly adjustment amount and the basis for our determination. The notice will explain that, if you disagree with our determination, you may request that we reconsider it within 60 days after the date you receive notice of our initial determination. The notice will also explain that you may request a new initial determination, rather than a reconsideration, if you believe the information we used in our initial determination was correct, but you want us to use different information about your modified adjusted gross income. For purposes of this subpart, in making initial determinations and reconsiderations, we will use the rules for the administrative review process that we use for determinations of your rights regarding nonmedical issues under title II of the Act. However, in order to expedite the processing of requests for reconsideration under these final rules, we have also provided in these rules that we may accept requests for reconsideration that are filed by electronic or other means that we determine to be appropriate, other than a request in writing, as our title II regulations provide. If you are dissatisfied with our reconsidered determination, you may request further review, including a hearing before an administrative law judge
(ALJ)from the Office of Medicare Hearings and Appeals
(OMHA)at HHS, review by the Medicare Appeals Council (MAC), and judicial review, consistent with the CMS regulations at 42 CFR part 405. As part of your request for an ALJ hearing or MAC review, you will be required to provide your consent for us to release your relevant tax return information to OMHA or the MAC for the purposes of adjudicating any appeal of the amount of an income-related adjustment to the Part B premium subsidy and for any judicial review of that appeal. We are establishing a new procedure, a request for a new initial determination, that you may use when you do not dispute the accuracy of the determination we made based on the modified adjusted gross income information provided by IRS, but you want us to use different information. You may provide evidence of your modified adjusted gross income for a more recent tax year than the information provided by IRS when you have had a major life-changing event that significantly reduces your income or when IRS has provided modified adjusted gross income information from 3 years prior to the premium effective year and you supply your retained copy of your Federal income tax return for the tax year 2 years prior. You may also request that we make a new initial determination when you have amended your Federal income tax return or when you can furnish proof that IRS has provided incorrect information about your modified adjusted gross income for the year that we used to determine your income-related monthly adjustment amount. We are establishing this alternative procedure in view of the nature of the information that we are required by the MMA to use in making determinations regarding the income-related monthly adjustment amount. We anticipate that the use of this new procedure will allow us to make timely adjustments when you have updated information about your modified adjusted gross income, or when you can prove the IRS information we used is incorrect. This process does not affect your right to appeal an initial determination that we make about your income-related monthly adjustment amount, but allows you to choose an alternative of requesting that we use other information to make a new initial determination. Explanation of Subpart B We are adding a new subpart B, Medicare Part B Income-Related Monthly Adjustment Amount, to part 418 of chapter III of title 20 of the Code of Federal Regulations. Subpart B contains the rules that we will use to determine when you will be required to pay an income-related monthly adjustment amount in addition to your Medicare Part B standard monthly premium plus any applicable premium increase for late enrollment or reenrollment. Following is a description of each section for subpart B. Introduction, General Provisions, and Definitions • Section 418.1001 describes what subpart B is about, lists the groups of sections in the subpart, and the subject of each group. • Section 418.1005 explains that the purpose of the income-related monthly adjustment amount is to reduce the premium subsidy of the Medicare Part B program, i.e., the amount of the Federal Government's contribution to the Federal Supplementary Medical Insurance Trust Fund for certain beneficiaries. It also explains how the income-related monthly adjustment amount will be administered. • Section 418.1010 contains definitions of terms used throughout this subpart. Determination of the Income-Related Monthly Adjustment Amount • Section 418.1101 explains what the income-related monthly adjustment amount is and when it is applied. • Section 418.1105 defines the modified adjusted gross income threshold and what the modified adjusted gross income threshold amounts will be in the year 2007. It also describes how threshold amounts will change in later years. • Section 418.1110 describes the effective date of our initial determination about the income-related monthly adjustment amount. • Section 418.1115 defines modified adjusted gross income ranges and explains how we will use them and your tax filing status to determine the amount of your income-related monthly adjustment amount when applicable, and what effect Federal income tax filing status has on the ranges. • Section 418.1120 explains how we will determine your income-related monthly adjustment amount. • Section 418.1125 explains how the income-related monthly adjustment amount will affect your total Medicare Part B premium. • Section 418.1130 explains how we will phase in the full applicable income-related monthly adjustment amounts. • Section 418.1135 describes what modified adjusted gross income information we will use to determine your income-related monthly adjustment amount. • Section 418.1140 describes what will happen if the modified adjusted gross income that we later receive from IRS is different from the information that we previously used to make a determination of your income-related monthly adjustment amount. • Section 418.1145 describes how we will determine the income-related monthly adjustment amount if IRS does not provide your modified adjusted gross income information. • Section 418.1150 describes when we will use a copy of your amended Federal income tax return filed with IRS to determine the income-related monthly adjustment amount and what proof is necessary to show that you filed a tax return with IRS. Determinations Using a More Recent Tax Year's Modified Adjusted Gross Income • Section 418.1201 explains when we will use modified adjusted gross income information for a more recent tax year to determine your income-related monthly adjustment amount. • Section 418.1205 describes what is considered a major life-changing event that would justify using information from a more recent tax year. • Section 418.1210 explains what is not considered a major life-changing event that would justify using information from a more recent tax year. • Section 418.1215 explains what is a significant reduction in your income for the purpose of these rules. • Section 418.1220 explains what is not a significant reduction in your income for the purpose of these rules. • Section 418.1225 explains which more recent tax years we may use to determine whether you must pay an income-related monthly adjustment amount and the amount of that adjustment. • Section 418.1230 explains the effective date of our income-related monthly adjustment amount determination based on your request to use a more recent tax year. • Section 418.1235 explains when we will stop using your modified adjusted gross income from a more recent tax year for income-related monthly adjustment amount determinations. • Section 418.1240 explains what you should do if your modified adjusted gross income for the more recent tax year changes. • Section 418.1245 explains what will happen if you notify us of a change in your modified adjusted gross income for the more recent tax year. • Section 418.1250 explains what evidence you will need to support your request for us to use a more recent tax year to determine your income-related monthly adjustment amount. • Section 418.1255 describes what evidence of a major life-changing event you will need to provide to support your request to use a more recent tax year. • Section 418.1260 describes the types of evidence of a major life-changing event that we will not accept. • Section 418.1265 describes what evidence of a significant reduction in your modified adjusted gross income you will need to provide to support your request to use a more recent tax year. • Section 418.1270 explains what evidence we will not accept of a significant reduction in your modified adjusted gross income. Determinations and the Administrative Review Process • Section 418.1301 explains what is an initial determination regarding your income-related monthly adjustment, and provides examples of determinations that are initial determinations for purposes of these rules. • Section 418.1305 explains that administrative actions that are not initial determinations are not subject to the administrative review process. • Section 418.1310 explains when you may request that we make a new initial determination. • Section 418.1315 explains how we will notify you when we make an initial determination, and what information the notice will contain. • Section 418.1320 explains the effect of the initial determination. • Section 418.1325 explains when you may request a reconsideration. • Section 418.1330 explains what will happen if you request a reconsideration because you believe that IRS information we used to make an initial determination about your income-related monthly adjustment amount is incorrect. • Section 418.1335 explains what to do if you believe our initial determination is based on incorrect modified adjusted gross income information. • Section 418.1340 tells you the rules for the administrative review process. • Section 418.1345 tells you the rules we will use to decide if reopening a prior initial or reconsidered determination made by us is appropriate. • Section 418.1350 explains that the HHS rules will apply for review of a reconsidered determination or ALJ decision. • Section 418.1355 explains that the rules for reopening a prior decision made by an ALJ of the OMHA or by the MAC will follow the HHS rules governing reopening. Public Comments On March 3, 2006, we published proposed rules in the **Federal Register** at 71 FR 10926 and provided a 60-day period for interested persons to comment. We received comments from three organizations and four individuals. We have condensed, summarized or paraphrased the comments in the following discussion to facilitate comprehension of the issues. We have tried to present all views accurately and address carefully all of the issues raised by the commenters that are within the scope of the proposed rules. In our proposed rules, we invited but received no comments on the issue of individuals for whom the IRS cannot supply income tax return information. The statute requires that we issue regulations that “provide for the treatment of the premium adjustment with respect to such individual[s]” when we have information that such individuals have income that exceeds the threshold. Consistent with the requirements of § 1839(i)(4)(B)(iii) of the Act, we have added § 418.1135(f) to these rules to clarify that if, after a premium effective year, we receive information from IRS that such an individual had modified adjusted gross income above the applicable threshold, we will apply the highest income-related adjustment percentage to such individual as required by the statute. When we receive such information, we will retroactively correct Medicare premiums for any affected effective year(s), as required by statute. Introduction, General Provisions and Definitions *Comment:* Four commenters expressed concerns over the concept that some higher income Medicare beneficiaries should receive a reduction in the Federal subsidy of their Medicare Part B premiums. *Response:* The provision to reduce the amount of the subsidy based on your income levels was specifically legislated by Congress. Our responsibility is to implement section 811 of the MMA through these regulations in a manner consistent with the requirements of this law. *Comment:* One commenter found the proposed rules confusing. *Response:* We have reorganized the rules and changed some of the captions and wording of the regulation text in order to improve the clarity of the regulation. We changed the order of §§ 418.1110 through 418.1120 by moving the section about the effective date of our initial determination so that it precedes the section that describes how we make our initial determination of your income-related monthly adjustment amount. This change provides a more logical progression of concepts related to income-related monthly adjustment amount determinations. We renumbered the sections related to a determination using a more recent tax year's modified adjusted gross income because we created two new sections (§§ 418.1215 and 418.1220) to clarify what is a significant reduction in modified adjusted gross income. In the proposed regulation, the definition of a significant reduction in modified adjusted gross income was in § 418.1201(b). We have left that definition intact, but added further clarification in the new sections. *Comment:* Several commenters raised concerns about confusion that may arise regarding the administrative review process. *Response:* We agree with the comments and have added §§ 418.1340 and 418.1345 which clarify that we will apply our rules for administrative review by SSA and reopening of our determinations. Sections 418.1350 and 418.1355 clarify that HHS will apply its rules for administrative review and reopenings by ALJs from OMHA and by the MAC. *Comment:* One commenter suggested that we define what we mean by “significant reduction” in income resulting from a major life-changing event. It was also requested that we add more information to the final rules about what evidence of life-changing events we will require, and how we will establish a causal link between the major life-changing event and the significant reduction in income. *Response:* We agree with this suggestion and have added new sections to the regulations that explain what does and does not constitute a significant reduction in income resulting from a major life-changing event. Section 418.1215 defines a significant reduction in modified adjusted gross income, and § 418.1220 explains that we will not consider a reduction in income to be significant if it does not affect the amount of income-related monthly adjustment you must pay. Section 418.1250 states that we will ask for evidence of the major life-changing event and how that event significantly reduced your modified adjusted gross income. We have also added explanations of what major life-changing event evidence we will not accept and what modified adjusted gross income information we will not accept. Section 418.1260 describes the types of evidence of major life-changing events that we will not accept, and § 418.1270 describes the types of modified adjusted gross income evidence we will not accept. In § 418.1265(b) we expanded our description of the evidence that we will accept of reductions in your modified adjusted gross income. The revision clarifies that we will accept a copy of your filed Federal income tax return for a more recent taxable year. If you have amended your tax return for the more recent taxable year, you should provide a copy of the amended tax return. Finally, if you filed a tax return for the more recent taxable year, but have proof from IRS of a correction of your tax return information, you should provide evidence of the correction. *Comment:* One commenter expressed concerns about privacy issues surrounding the modified adjusted gross income data that we will obtain from IRS. *Response:* Section 811 of the MMA created a new provision of the Internal Revenue Code that authorizes IRS to disclose modified adjusted gross income information to us for the specific purpose of determining income-related monthly adjustments to Medicare Part B premiums. We have worked with the IRS under existing protocols and within the specifications of section 811 and other legislation to limit the information that IRS discloses to us and the information that we will supply to IRS for this purpose. The data exchange will be conducted in accordance with the provisions of section 1106 of the Act (42 U.S.C. 1306), the Privacy Act (5 U.S.C. 552a), and section 6103 of the Internal Revenue Code (26 U.S.C. 6103) to ensure safeguarding of any personally identifiable information that is exchanged. We added a statement in § 418.1350 to clarify that we will not disclose information that we have about your tax information for the purpose of a hearing with an ALJ, MAC review, or judicial review unless you authorize us to do so, and the IRS confirms that the authorization meets all legal requirements. *Comment:* One commenter said that the regulations should address beneficiary education activities to inform the public about their appeal rights and how the different agencies involved will coordinate those activities. *Response:* After careful consideration, we decided that including education plans in the final regulations would not be appropriate. We are working on the best methods to provide initial and continuing information to the public that explains their appeal rights and other information that the public may need and are coordinating our efforts with CMS. We will include information in notifications that we will send to affected beneficiaries and through other vehicles, such as Fact Sheets and Web page information published by both agencies. *Comment:* One commenter addressed concerns about the timing of notifications to beneficiaries about income-related monthly adjustments to Medicare Part B premiums, suggesting that such notices be issued by October 31. The commenter also encouraged us to provide detailed information in those notifications. *Response:* As we explained earlier in this preamble, generally we will use 2-year old modified adjusted gross income information from IRS to determine whether you are required to pay an income-related monthly adjustment amount. Section 811 of the MMA gives IRS until October 15 to provide us with 2-year old tax data to use in determining your adjustment amount for the next year. If we do not receive the information by October 15, the law allows us to use 3-year old data. Because we must wait until after October 15 to obtain the required information, it is not possible for us to process the data from IRS and issue notices by the suggested date. We will send notices that will explain the basis of our decision and what you should do if you disagree with our decision or have better information than we do (such as a copy of a filed 2-year old tax return when we used 3-year old information to set a premium adjustment). The notices will provide information about which year's income tax return information we used to make our determination, and what information IRS gave us about your tax filing status and modified adjusted gross income for that year. The notices will also explain what you may do if there has been a major life-changing event(s) resulting in a significant reduction in income since the year we used to set your Medicare Part B premium. *Comment:* One commenter urged us to publish the annual, updated modified adjusted gross income ranges at the same time as the Medicare Part B premium changes and for CMS to include projected amounts for a 5- to 10-year period in its Annual Trustees Report. *Response:* We do not determine the annual modified adjusted gross income ranges, nor do we determine the standard Medicare Part B premium. CMS will determine the ranges annually as it does the standard Medicare Part B premium. We will include this information on our Web site *http://www.socialsecurity.gov* as it becomes available to us. We have shared with CMS the suggestion to include projected modified adjusted gross income ranges in CMS's Annual Trustees Report. Determination of the Income-Related Monthly Adjustment Amount *Comment:* Two commenters expressed concern about using information from IRS for a past period. One of those comments focused on the use of IRS information from more than 2 years before the year for which the Medicare Part B premiums will be effective. That commenter expressed hope that IRS would be able to provide appropriate electronic information about beneficiaries' modified adjusted gross income from the tax year 2 years before the premium year well in advance of October 15 each year. The other comment expressed a generalized concern about the coordination of data transfers between Federal agencies. *Response:* Based on our discussions with IRS, we expect that the overwhelming majority of income tax returns from the tax year 2 years before the premium year will be processed and in electronic format by October 15 of each year. Although many taxpayers request filing extensions, almost all file a tax return by October 15. The language of the statute dictates the October 15 date and provides an exception for the temporary use of 3-year old data when 2-year old information is not available. We are working with IRS to minimize the temporary use of older data, and to ensure accurate data exchanges. Determinations Using a More Recent Tax Year's Modified Adjusted Gross Income *Comment:* Two commenters addressed the possibility of job loss or retirement affecting income in the past year while we use 2- or 3-year-old information from IRS. *Response:* Reduction of work or work stoppage can be a major life-changing event for purposes of determining the income-related monthly adjustment amount. If you experience a significant reduction of income because of work reduction or stoppage, the final rules provide that you may request that we use information that you provide about your income for a more recent tax year to determine your income-related monthly adjustment amount. If you report a major life-changing event that significantly reduces your income, we will use that information to determine if an income-related monthly adjustment amount is applicable. When we determine that you have paid too much for your Medicare Part B premium, we will follow current processing procedures to refund excess amounts of Medicare Part B premiums that have been paid. If a Medicare beneficiary pays premiums through another Federal agency, we will convey the information that the agency needs to refund excess Medicare Part B premiums that have been paid. *Comment:* One commenter thought that the impairment-related work expenses deduction from income for the disabled in other Social Security programs should be extended to the income-related monthly adjustments to Medicare Part B premiums. *Response:* We have not adopted the comment. The statute clearly defines the method for determining whether an income-related monthly adjustment is applicable and the amount of such adjustment. The MMA requires us to use only the modified adjusted gross income as defined in section 1839(i)(4) of the Act and does not provide any authority for us to consider an individual's expenses or net income. *Comment:* One commenter suggested that the list of significant life-changing events should be flexible. Another commenter suggested that the list of significant life-changing events should be expanded to include decreases in dividend income and requested clarification on whether interest income from financial securities (such as stocks and bonds) is considered the same as dividend income. The latter commenter also expressed concerns about the burden of documenting life-changing events, such as divorce that occurred several years earlier. *Response:* We have given careful consideration to these comments but decided not to expand the list of significant life-changing events to include decreases in dividend income and loss of income from financial securities. The current list of significant life-changing events includes major events that have a direct and potentially permanent effect on an individual's income. Reductions in income that are unrelated to major life-changing events are not contemplated in the statute. Decreases in dividend income and loss of income from financial securities are not “events” but rather fluctuations in the financial markets and should not be considered as part of the list of events with a potentially permanent effect on income. Similarly, making the list more flexible would run counter to the statutory requirement that major life-changing events be “specified in regulations.” When you have experienced a significant life-changing event, we will provide assistance to you when documentation is needed as we routinely do for Social Security claimants and beneficiaries. To the extent possible, when you need a document such as a divorce decree and do not know how to obtain it, we will provide the appropriate address and associated information so that you can secure it. Further, it is unlikely that a divorce that occurred several years ago will have caused a significant reduction in income in a more recent tax year. Determinations and the Administrative Review Process *Comment:* One commenter expressed concern about the process that we will use to make corrections of amounts of Part B premiums charged after we have decided that use of a more recent taxable year is appropriate when there has been a significant reduction in income because of a major life-changing event. *Response:* The commenter asked about the process for making premium adjustments. When a beneficiary reports a major life-changing event and new information about his income in a more recent tax year that we use to make a new initial determination of the income-related monthly adjustment amount, we will follow current processing procedures to refund excess Medicare Part B premiums that have been paid. If a Medicare beneficiary pays premiums through another Federal agency, we will convey the information that agency needs to process an appropriate correction for the beneficiary. *Comment:* One commenter asked for clarification of what is not subject to appeal, and when our rules and HHS rules will apply. The commenter also expressed concerns about the complexity of the administrative review process which spans two Federal agencies. *Response:* We are responsible for reconsiderations of initial determinations made by us. Reconsiderations are the first step in the appeal process, and our rules are used for reconsiderations. When an individual is dissatisfied with our reconsideration determination, he may request a hearing before an ALJ. Section 931 of the MMA transferred responsibility for the functions of the ALJs responsible for hearing cases under title XVIII of the Act to HHS. HHS established regulations for Medicare appeals in 42 CFR part 405. Hearings related to income-related monthly adjustment amounts are hearings under title XVIII and are the responsibility of HHS. We have clarified this information in the regulations. Our regulations also explain what is and is not an initial determination for purposes of administrative review. We agree with the concern that the commenter expressed about the complexity of the administrative review process for these cases. We have simplified our process for requesting a reconsidered determination of our decision about an income-related monthly adjustment amount. If you want us to reconsider our determination about your income-related monthly Medicare Part B premium adjustment, you will be able to request a reconsideration without requesting it in writing. *Comment:* A commenter suggested that we should give beneficiaries more than 60 days after receipt of the notice of our initial determination to seek a reconsideration or a new determination because of likely confusion in the initial year or two of implementation. *Response:* Our experience in administering the title II program has been that a 60-day period to file an appeal is reasonable. If you request your reconsideration later, we will follow our current rules in 20 CFR 404.911 to evaluate whether you have a good reason for us to extend the 60-day period, such as illness or a death in your immediate family. A request for a new initial determination is not an appeal and is not tied to the 60-day period to file an appeal. A major life-changing event such as death of a spouse or divorce can happen any time during a year and may result in a significant reduction in income for that year or a subsequent year. If you have experienced a significant reduction in income because of a major life-changing event, you may request a new determination at any time during the year that the significant reduction in income has occurred. Further, if that reduction follows a major life-changing event in the last 3 months of the year, you may report the event and request a new initial determination within the first 3 months of the next year and we will determine if premiums should be adjusted for the preceding year. In the proposed rule, we established a 60-day time limit for requesting a new initial determination based on a beneficiary correction of IRS information that we used to make an initial determination about the income-related monthly adjustment amount. After considering this comment, we eliminated the requirement that a beneficiary make a request for a new initial determination within 60 days following receipt of our notice of an income-related monthly adjustment amount when he believes that the IRS information we used is incorrect. Section 418.1310(a)(3) of the final rule states that an individual who believes that the IRS information we used in making an initial determination of the income-related monthly adjustment amount is incorrect may request a new initial determination at any time after he receives a notice from us about the determination. Other Changes In response to these comments and our further review of the structure and format of the proposed rule, we have restructured these regulations slightly. In this final rule, we have moved some sections and added new sections. We provide explanations below of the changes that were not explained under the “Public Comments” section of the preamble. These changes are consistent with the policies outlined in the proposed regulations and are intended to clarify and further explain the procedures that we will apply to compute the amount of any income-related monthly adjustment to the Medicare Part B premium. In § 418.1010(a), we have added definitions for the Medicare Appeals Council (MAC), the Office of Medicare Hearings and Appeals (OMHA), and the Department of Health and Human Services (HHS). We added a definition of the term “Tax Year” to § 418.1010(b). In § 418.1205(c), we clarified that a marriage may end either through divorce or annulment. We also added sections clarifying that we will apply our rules for the reconsideration of initial determinations that we have made, and HHS rules will apply for administrative review by the OMHA and the MAC. We have added language clarifying the process we will follow when a beneficiary who filed a Federal income tax return as Married Filing Separately informs us that the spouses lived apart throughout the year. In a new paragraph
(e)in § 418.1140, we explain that if you request that we review your income-related premium adjustment for this reason, we will require you to attest that you lived apart from your spouse throughout the tax year we are using to set your premium, and to provide address information for your spouse and yourself for that year. Regulatory Procedures Executive Order 12866 We have consulted with the Office of Management and Budget
(OMB)and determined that these final rules meet the criteria for an “economically significant” regulatory action under Executive Order 12866, as amended by Executive Order 13258. Thus, they were reviewed by OMB. We have also determined that these final rules meet the plain language requirement of Executive Order 12866, as amended by Executive Order 13258. In addition, these are major rules under the Congressional Review Act in 5 U.S.C. 801-808. These final rules provide the implementing rules for the income-related premium calculation enacted as part of MMA. The legislative provision is expected to result in an overall savings to the Medicare Part B account in the SMI Trust Fund of roughly $7.7 billion over the period of fiscal years 2007-2011. The changes in this final rule from the notice of proposed rulemaking
(NPRM)are not expected to affect the cost/savings projections for this rule. The following chart shows the estimated total savings in millions for each program year. Fiscal year Total savings 2007 $490 2008 1,180 2009 1,860 2010 2,060 2011 2,150 Total 2007-2011 7,740 In addition, the process of determining the additional premiums will result in an increase in administrative expenses incurred by us in the amount of $200 million over that same 5-year period. Accounting Statement As required by OMB Circular A-4 (available at *http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf* ), in the following table (Table 1) we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of these final rules. This table provides our best estimate of the increase in premium payments as a result of the changes to the Part B program presented in these final rules. All expenditures are classified as transfers to the SMI Trust Fund. Table 1.—Accounting Statement: Classification of Estimated Savings [In millions] Category Transfers Annualized Monetized Transfers $1,370. From Whom to Whom? Certain High-Income Medicare Part B Beneficiaries to the Medicare SMI Trust Fund. Regulatory Flexibility Act We certify that these final rules will not have a significant economic impact on a substantial number of small entities as they affect individuals only. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required for these final rules. Paperwork Reduction Act These final rules contain information collection requirements that require Office of Management and Budget clearance under the Paperwork Reduction Act of 1995 (PRA). As per PRA stipulations, we have submitted a clearance request to OMB for approval. Upon approval from OMB, we will publish a **Federal Register** notice indicating the OMB number and expiration date. We published an NPRM on March 3, 2006 at 71 FR 10926. In the NPRM, we solicited comments under the PRA on the burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and on ways to minimize the burden on respondents, including the use of automated collection techniques or other forms of information technology. Of the multiple comments the public submitted on these rules, only one pertained to the issues listed above. Specifically, one commenter expressed concerns about the burden of documenting life-changing events. However, the MMA states that when beneficiaries request that we use their income information about a more recent tax year, the reduction in modified adjusted gross income must be caused by a verifiable life-changing event. Therefore, we must ask Medicare beneficiaries to provide proof of the event. One section containing a public reporting requirement, § 418.1140(e), is included in these final rules but was not included in the NPRM. This section states that spouses who have been living in separate homes for the past year must provide written certification, or attestation, that they have been living separately. This requirement was included here and not in the NPRM because at the time we published the NPRM, we were still investigating ways that we could confirm this living arrangement from agency data. However, this section will not impact the public burden reported in the NPRM, since the only additional requirement for respondents is to certify that their address is separate from their spouse's, and certifications are not generally covered by the PRA as per OMB rules in 5 CFR 1320.3(h)(1). (Catalog of Federal Domestic Assistance Program Nos. 93.773, Medicare—Hospital Insurance and 93.774, Medicare—Supplementary Medical Insurance Program) List of Subjects in 20 CFR Part 418 Administrative practice and procedure, Aged, Blind, Disability benefits, Public assistance programs, Reporting and recordkeeping requirements, Supplemental Security Income (SSI), Medicare subsidies. Dated: October 13, 2006. Jo Anne B. Barnhart, Commissioner of Social Security. For the reasons set out in the preamble, we are adding a new subpart B to part 418 of chapter III of title 20 of the Code of Federal Regulations as follows: PART 418—[AMENDED] Subpart B—Medicare Part B Income-Related Monthly Adjustment Amount Introduction, General Provisions, and Definitions Sec. 418.1001 What is this subpart about? 418.1005 Purpose and administration. 418.1010 Definitions. Determination of the Income-Related Monthly Adjustment Amount 418.1101 What is the income-related monthly adjustment amount? 418.1105 What is the threshold? 418.1110 What is the effective date of our initial determination about your income-related monthly adjustment amount? 418.1115 What are the modified adjusted gross income ranges? 418.1120 How do we determine your income-related monthly adjustment amount? 418.1125 How will the income-related monthly adjustment amount affect your total Medicare Part B premium? 418.1130 How will we phase in the income-related monthly adjustment amount? 418.1135 What modified adjusted gross income information will we use to determine your income-related monthly adjustment amount? 418.1140 What will happen if the modified adjusted gross income information from IRS is different from the modified adjusted gross income information we used to determine your income-related monthly adjustment amount? 418.1145 How do we determine your income-related monthly adjustment amount if IRS does not provide information about your modified adjusted gross income? 418.1150 When will we use your amended tax return filed with IRS? Determinations Using a More Recent Tax Year's Modified Adjusted Gross Income 418.1201 When will we determine your income-related monthly adjustment amount based on the modified adjusted gross income information that you provide for a more recent tax year? 418.1205 What is a major life-changing event? 418.1210 What is not a major life-changing event? 418.1215 What is a significant reduction in your income? 418.1220 What is not a significant reduction in your income? 418.1225 Which more recent tax year will we use? 418.1230 What is the effective date of an income-related monthly adjustment amount initial determination that is based on a more recent tax year? 418.1235 When will we stop using your more recent tax year's modified adjusted gross income to determine your income-related monthly adjustment amount? 418.1240 Should you notify us if the information you gave us about your modified adjusted gross income for the more recent tax year changes? 418.1245 What will happen if you notify us that your modified adjusted gross income for the more recent tax year changes? 418.1250 What evidence will you need to support your request that we use a more recent tax year? 418.1255 What kind of major life-changing event evidence will you need to support your request for us to use a more recent tax year? 418.1260 What major life-changing event evidence will we not accept? 418.1265 What kind of significant modified adjusted gross income reduction evidence will you need to support your request? 418.1270 What modified adjusted gross income evidence will we not accept? Determinations and the Administrative Review Process 418.1301 What is an initial determination regarding your income-related monthly adjustment amount? 418.1305 What is not an initial determination regarding your income-related monthly adjustment amount? 418.1310 When may you request that we make a new initial determination? 418.1315 How will we notify you and what information will we provide about our initial determination? 418.1320 What is the effect of an initial determination? 418.1325 When may you request a reconsideration? 418.1330 Can you request a reconsideration when you believe the IRS information we used is incorrect? 418.1335 What should you do if our initial determination is based on modified adjusted gross income information you believe to be incorrect? 418.1340 What are the rules for our administrative review process? 418.1345 Is reopening of an initial or reconsidered determination made by us ever appropriate? 418.1350 What are the rules for review of a reconsidered determination or administrative law judge decision? 418.1355 What are the rules for reopening a decision by an administrative law judge of the Office of Medicare Hearings and Appeals
(OMHA)or by the Medicare Appeals Council (MAC)? Subpart B—Medicare Part B Income-Related Monthly Adjustment Amount Authority: Secs. 702(a)(5) and 1839(i) of the Social Security Act (42 U.S.C. 902(a)(5) and 1395r(i)). Introduction, General Provisions, and Definitions § 418.1001 What is this subpart about? This subpart relates to section 1839(i) of the Social Security Act (the Act), as added by section 811 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173). Section 1839(i) establishes an income-related monthly adjustment to the Medicare Part B premium. Beneficiaries enrolled in Medicare Part B who have modified adjusted gross income over a threshold amount established in the statute will pay an income-related monthly adjustment amount in addition to the Medicare Part B standard monthly premium and any applicable premium increases as described in 42 CFR 408.20. The regulations in this subpart explain how we decide whether you are required to pay an income-related monthly adjustment amount, and if you are, the amount of your adjustment. The rules are divided into the following groups of sections:
(a)Sections 418.1001 through 418.1010 contain the introduction, a statement of the general purpose of the income-related monthly adjustment amount, general provisions that apply to the income-related monthly adjustment amount, and definitions of terms that we use in this subpart.
(b)Sections 418.1101 through 418.1150 describe what information about your modified adjusted gross income we will use to determine if you are required to pay an income-related monthly adjustment amount. In these sections, we also describe how the income-related monthly adjustment amount will affect your total Medicare Part B premium. These sections also explain how the income-related monthly adjustment amount will be phased in from calendar year 2007 through calendar year 2009.
(c)Sections 418.1201 through 418.1270 contain an explanation of the standards that you must meet for us to grant your request to use modified adjusted gross income information that you provide for a more recent tax year rather than the information described in paragraph
(b)of this section. These sections explain when we may consider such a request, and the evidence that you will be required to provide. These sections also explain when income-related monthly adjustment amount determinations based on information you provide will be effective, and how long they will remain in effect. Additionally, these sections describe how retroactive adjustments of the income-related monthly adjustment amount will be made based on information you provide, updated information you provide, and information we later receive from the Internal Revenue Service (IRS).
(d)Sections 418.1301 through 418.1355 contain the rules that we will apply when you disagree with our determination regarding your income-related monthly adjustment amount. These sections explain your appeal rights and the circumstances under which you may request that we make a new initial determination of your income-related monthly adjustment amount. § 418.1005 Purpose and administration.
(a)The purpose of the income-related monthly adjustment amount is to reduce the Federal subsidy of the Medicare Part B program for beneficiaries with modified adjusted gross income above an established threshold. These beneficiaries will pay a greater share of actual program costs. Medicare Part B premiums paid by beneficiaries cover approximately 25 percent of total Medicare Part B program costs and the remaining 75 percent of program costs are subsidized by the Federal Government's contributions to the Federal Supplementary Medical Insurance Trust Fund. The reduction in the Medicare Part B premium subsidy results in an increase in the total amount that affected beneficiaries pay for Medicare Part B coverage. A beneficiary with modified adjusted gross income above the threshold amount will pay:
(1)The Medicare Part B standard monthly premium; plus
(2)Any applicable increase in the standard monthly premium for late enrollment or reenrollment; plus
(3)An income-related monthly adjustment amount.
(b)The Centers for Medicare & Medicaid Services
(CMS)in the Department of Health and Human Services
(HHS)publishes the Medicare Part B standard monthly premium each year. CMS also establishes rules for entitlement to a nonstandard premium, as well as premium penalties for late enrollment or reenrollment (42 CFR 408.20 through 408.27).
(c)We use information that we get from IRS to determine if beneficiaries who are enrolled in Medicare Part B are required to pay an income-related monthly adjustment amount. We also change income-related monthly adjustment amount determinations using information provided by a beneficiary under certain circumstances. In addition, we notify beneficiaries when the social security benefit amounts they receive will change based on our income-related monthly adjustment amount determination. § 418.1010 Definitions.
(a)*Terms relating to the Act and regulations* . For the purposes of this subpart:
(1)*Administrator* means the Administrator of the Centers for Medicare & Medicaid Services
(CMS)in HHS.
(2)*CMS* means the Centers for Medicare & Medicaid Services in HHS.
(3)*Commissioner* means the Commissioner of Social Security.
(4)*HHS* means the Department of Health and Human Services which oversees the Centers for Medicare & Medicaid Services, the Office of Medicare Hearings and Appeals
(OMHA)and the Medicare Appeals Council (MAC).
(5)*IRS* means the Internal Revenue Service in the Department of the Treasury.
(6)*MAC* means the Medicare Appeals Council in HHS.
(7)*OMHA* means the Office of Medicare Hearings and Appeals in HHS.
(8)*Section* means a section of the regulations in this part unless the context indicates otherwise.
(9)*The Act* means the Social Security Act, as amended.
(10)*Title* means a title of the Act.
(11)*We, our,* or *us* means the Social Security Administration (SSA).
(b)*Miscellaneous.* For the purposes of this subpart:
(1)*Amended tax return* means a Federal income tax return for which an amended tax return using the required IRS form(s) has been filed by an individual or couple and accepted by IRS.
(2)*Effective year* means the calendar year for which we make an income-related monthly adjustment amount determination.
(3)*Federal premium subsidy* is the portion of the full cost of providing Medicare Part B coverage that is paid by the Federal Government through transfers into the Federal Supplementary Medical Insurance Trust Fund.
(4)*Income-related monthly adjustment amount* is an additional amount of premium that you will pay for Medicare Part B coverage if you have income above the threshold. The amount of your income-related monthly adjustment amount is based on your modified adjusted gross income.
(5)*Medicare Part B standard monthly premium* means the monthly Medicare Part B premium amount which is set annually by CMS, according to regulations in 42 CFR 408.20 through 408.27.
(6)*Modified adjusted gross income* is your adjusted gross income as defined by the Internal Revenue Code, plus the following forms of tax-exempt income:
(i)Tax-exempt interest income;
(ii)Income from United States savings bonds used to pay higher education tuition and fees;
(iii)Foreign earned income;
(iv)Income derived from sources within Guam, American Samoa, or the Northern Mariana Islands; and
(v)Income from sources within Puerto Rico.
(7)*Modified adjusted gross income ranges* are the groupings of modified adjusted gross income above the threshold. There are four ranges for most individuals, based on their tax filing status. There are two ranges for those with a tax filing status of married, filing separately, who also lived with their spouse for part of the year. The dollar amounts of the modified adjusted gross income ranges are specified in § 418.1115.
(8)*Non-standard premium* means a Medicare Part B premium that some beneficiaries pay for Medicare Part B, rather than the standard premium. The rules for applying a non-standard premium are in 42 CFR 408.20(e). The non-standard premium does not apply to beneficiaries who must pay an income-related monthly adjustment amount.
(9)*Premium* is a payment that an enrolled beneficiary pays for Medicare Part B coverage. The rules that CMS uses to annually establish the premium amount are found in 42 CFR 408.20 through 408.27.
(10)*Representative* means, for the purposes of the initial determination and reconsidered determination, an individual as defined in § 404.1703 of this chapter, and for purposes of an ALJ hearing or review by the MAC, an individual as defined in 42 CFR 405.910.
(11)*Tax filing status* means the filing status shown on your individual income tax return. It may be single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with dependent child.
(12)*Tax year* means the year for which your Federal income tax return has been filed or will be filed with the IRS.
(13)*Threshold* means a modified adjusted gross income amount above which the beneficiary will have to pay an income-related monthly adjustment amount described in paragraph (b)(4) of this section. The dollar amount of the threshold is specified in § 418.1105.
(14)*You* or *your* means the person or representative of the person who is subject to the income-related monthly adjustment amount. Determination of the Income-Related Monthly Adjustment Amount § 418.1101 What is the income-related monthly adjustment amount?
(a)The income-related monthly adjustment amount is an amount that you will pay in addition to the Medicare Part B standard monthly premium plus any applicable increase in that premium as described in 42 CFR 408.22 for your Medicare Part B coverage when your modified adjusted gross income is above the threshold described in § 418.1105.
(b)Your income-related monthly adjustment amount is based on your applicable modified adjusted gross income as described in § 418.1115 and your tax filing status.
(c)We will determine your income-related monthly adjustment amount using the method described in §§ 418.1120 and 418.1130. § 418.1105 What is the threshold?
(a)The threshold is a level of modified adjusted gross income above which the beneficiary will have to pay the income-related monthly adjustment amount.
(b)In 2007, the modified adjusted gross income threshold is $80,000 for individuals with a Federal income tax filing status of single, married filing separately, head of household, and qualifying widow(er) with dependent child. The threshold is $160,000 for individuals with a Federal income tax filing status of married filing jointly.
(c)Starting at the end of calendar year 2007 and each year thereafter, the threshold amounts for the following year will be set by CMS by increasing the preceding year's threshold amount by the percentage increase in the Consumer Price Index rounded to the nearest $1,000. CMS will publish the threshold amounts annually in September in the **Federal Register** . Published threshold amounts will be effective January 1 of the next calendar year, for the full calendar year. § 418.1110 What is the effective date of our initial determination about your income-related monthly adjustment amount?
(a)Generally, an income-related monthly adjustment amount will be effective for all months that you are enrolled in Medicare Part B during the year for which we determine you must pay an income-related monthly adjustment amount. We will follow the rules in 42 CFR part 408, subpart C, regarding premium collections to withhold your income-related monthly adjustment amount from a benefit payment or to determine if you will be billed directly.
(b)When we have used modified adjusted gross income information from IRS for the tax year 3 years prior to the effective year to determine your income-related monthly adjustment amount and modified adjusted gross income information for the tax year 2 years prior later becomes available from IRS, we will review the new information to determine if we should revise our initial determination. If we revise our initial determination, the effective date of the new initial determination will be January 1 of the effective year, or the first month you were enrolled or re-enrolled in Medicare Part B if later than January.
(c)When we use your amended tax return, as described in § 418.1150, the effective date will be January 1 of the year(s) that is affected, or the first month in that year that you were enrolled or reenrolled in Medicare Part B if later than January. Example: You are enrolled in Medicare Part B throughout 2011. We use your 2009 modified adjusted gross income as reported to us by IRS to determine your 2011 income-related monthly adjustment amount. In 2012 you submit to us a copy of your 2009 amended tax return that you filed with IRS. The modified adjusted gross income reported on your 2009 amended tax return is significantly less than originally reported to IRS. We use the modified adjusted gross income that was reported on your 2009 amended tax return to determine your income-related monthly adjustment amount. That income-related monthly adjustment amount is effective January 1, 2011. We will retroactively adjust for any differences between the amount paid in 2011 and the amount that should have been paid based on the amended tax return.
(d)When we use evidence that you provide which proves that the IRS modified adjusted gross income information we used is incorrect, as described in § 418.1335, the effective date will be January of the year(s) that is affected or the first month in that year that you were enrolled or reenrolled in Medicare Part B if later than January.
(e)When we use information from a more recent tax year that you provide due to a major life-changing event, as described in § 418.1201, the effective date is described in § 418.1230. § 418.1115 What are the modified adjusted gross income ranges?
(a)The 2007 modified adjusted gross income ranges for each Federal tax filing category are listed in paragraphs (b),
(c)and
(d)of this section. We will use your modified adjusted gross income amount together with your tax filing status to determine the amount of your income-related monthly adjustment.
(b)In 2007, the modified adjusted gross income ranges for individuals with a Federal tax filing status of single, head of household, qualifying widow(er) with dependent child, and married filing separately when the individual has lived apart from his/her spouse for the entire tax year for the year we use to make our income-related monthly adjustment amount determination are as follows:
(1)Greater than $80,000 and less than or equal to $100,000;
(2)Greater than $100,000 and less than or equal to $150,000;
(3)Greater than $150,000 and less than or equal to $200,000; and
(4)Greater than $200,000.
(c)In 2007, the modified adjusted gross income ranges for individuals who are married and filed a joint tax return for the tax year we use to make the income-related monthly adjustment amount determination are as follows: .
(1)Greater than $160,000 and less than or equal to $200,000;
(2)Greater than $200,000 and less than or equal to $300,000;
(3)Greater than $300,000 and less than or equal to $400,000; and
(4)Greater than $400,000.
(d)In 2007, the modified adjusted gross income ranges for married individuals who file a separate return and have lived with their spouse at any time during the tax year we use to make the income-related monthly adjustment amount determination are as follows:
(1)Greater than $80,000 and less than or equal to $120,000; and
(2)Greater than $120,000.
(e)CMS will annually revise the modified adjusted gross income ranges and publish them in the **Federal Register** starting in September of 2007 for 2008. Each year thereafter, all modified adjusted gross income range amounts will be set by CMS by increasing the preceding year's modified adjusted gross income range amounts by any percentage increase in the Consumer Price Index rounded to the nearest $1,000, and CMS will publish the amounts for the following year in September of each year. § 418.1120 How do we determine your income-related monthly adjustment amount?
(a)We will determine your income-related monthly adjustment amount using your tax filing status and modified adjusted gross income.
(b)*Tables of applicable percentage.* The tables in paragraphs (b)(1) through (b)(3) of this section contain the modified adjusted gross income ranges for 2007 in the column on the left in each table. The middle column in each table shows the percentage of the unsubsidized Medicare Part B premium that will be paid by individuals with modified adjusted gross income that falls within each of the ranges. The column on the right in each table shows the percentage of the Medicare Part B premium that will be subsidized by contributions from the Federal Government. Based on your tax filing status for the tax year we use to make a determination about your income-related monthly adjustment amount, we will determine which table is applicable to you. We will use your modified adjusted gross income to determine which income-related monthly adjustment amount to apply to you. The dollar amount of income-related monthly adjustment for each range will be set annually as described in paragraph
(c)of this section. The modified adjusted gross income ranges will be adjusted annually as described in § 418.1115(e).
(1)*General table of applicable percentages.* If your filing status for your Federal income taxes for the tax year we use is single; head of household; qualifying widow(er) with dependent child; or married filing separately and you lived apart from your spouse for the entire tax year, we will use the general table of applicable percentages. When your modified adjusted gross income for the year we use is in the range listed in the left column in the following table, then the Federal Government's Part B premium subsidy of 75 percent is reduced to the percentage listed in the right column. You will pay an amount based on the percentage listed in the center column. Modified adjusted gross income effective in 2007 Beneficiary premium (percent) Federal premium subsidy (percent) More than $80,000 but less than or equal to $100,000 35 65 More than $100,000 but less than or equal to $150,000 50 50 More than $150,000 but less than or equal to $200,000 65 35 More than $200,000 80 20
(2)*Table of applicable percentages for joint returns.* If your Federal tax filing status is married filing jointly for the tax year we use and your modified adjusted gross income for that tax year is in the range listed in the left column in the following table, then the Federal Government's Part B premium subsidy of 75 percent is reduced to the percentage listed in the right column. You will pay an amount based on the percentage listed in the center column. Modified adjusted gross income effective in 2007 Beneficiary premium (percent) Federal premium subsidy (percent) More than $160,000 but less than or equal to $200,000 35 65 More than $200,000 but less than or equal to $300,000 50 50 More than $300,000 but less than or equal to $400,000 65 35 More than $400,000 80 20
(3)*Table of applicable percentages for married individuals filing separate returns.* If your Federal tax filing status for the tax year we use is married filing separately and you lived with your spouse at some time during that tax year, and your modified adjusted gross income is in the range listed in the left column in the following table, then the Federal Government's Part B premium subsidy of 75 percent is reduced to the percentage listed in the right column. You will pay an amount based on the percentage listed in the center column. Modified adjusted gross income effective in 2007 Beneficiary premium (percent) Federal premium subsidy (percent) More than $80,000 but less than or equal to $120,000 65 35 More than $120,000 80 20
(c)CMS will annually publish in the **Federal Register** the dollar amounts for the income-related monthly adjustment amount described in paragraph
(b)of this section. § 418.1125 How will the income-related monthly adjustment amount affect your total Medicare Part B premium?
(a)If you must pay an income-related monthly adjustment amount, your total Medicare Part B premium will be the sum of:
(1)The Medicare Part B standard monthly premium, determined using the rules in 42 CFR 408.20; plus
(2)Any applicable increase in the Medicare Part B standard monthly premium as described in 42 CFR 408.22; plus
(3)Your income-related monthly adjustment amount.
(b)In 2007 and 2008, your income-related monthly adjustment amount you must pay will be adjusted as described in § 418.1130.
(c)The nonstandard Medicare Part B premium amount described in 42 CFR 408.20 does not apply to individuals who must pay an income-related monthly adjustment amount. Such individuals must pay the full Medicare Part B standard monthly premium plus any applicable penalties for late enrollment or reenrollment plus the income-related adjustment. § 418.1130 How will we phase in the income-related monthly adjustment amount?
(a)In 2007 and 2008, we will phase in the full amount of the income-related monthly adjustment amount. For the year in the left column you will pay the percentage of the income-related monthly adjustment amount specified in the right column. Year Percentage of the income-related monthly adjustment amount that you will pay 2007 33 2008 67
(b)Phase-in of the subsidy reduction will be complete in 2009. § 418.1135 What modified adjusted gross income information will we use to determine your income-related monthly adjustment amount?
(a)In general, we will use your modified adjusted gross income provided by IRS for the tax year 2 years prior to the effective year of the income-related monthly adjustment amount determination. Modified adjusted gross income is based on information you provide to IRS when you file your Federal income tax return.
(b)We will use your modified adjusted gross income for the tax year 3 years prior to the effective year of the income-related monthly adjustment amount determination when IRS does not provide the information specified in paragraph
(a)of this section. If IRS can provide modified adjusted gross income for the tax year 3 years prior to the income-related monthly adjustment amount effective year, we will temporarily use that information to determine your income-related monthly adjustment amount and make adjustments as described in § 418.1110(b) to all affected income-related monthly adjustment amounts when information for the year specified in paragraph
(a)of this section is provided by IRS.
(c)When we have used the information in paragraph
(b)of this section, you may provide us with evidence of your modified adjusted gross income for the year in paragraph
(a)of this section. You must provide a retained copy of your signed Federal income tax return for that year, if available. If you filed a return for that year, but did not retain a copy, you must request a transcript or a copy of your return from IRS and provide it to us. When we use this evidence, we will later confirm this information with IRS records.
(d)When you meet the conditions specified in § 418.1150 because you have amended your Federal income tax return, or when you believe we have used information provided by IRS which is incorrect, as described in § 418.1335, we will use information that you provide directly to us regarding your modified adjusted gross income.
(e)We may use information that you give us about your modified adjusted gross income for a more recent tax year than those discussed in paragraphs
(a)or
(b)of this section as described in §§ 418.1201 through 418.1270.
(f)If you fail to file an income tax return for any year after 2004 and IRS informs us that you had modified adjusted gross income above the threshold applicable 2 years after the tax year when you failed to file an income tax return, we will impose the highest income-related adjustment percentage applicable to your income filing status for the effective year. If we later determine that the amount of the income-related monthly adjustment amount imposed was inconsistent with your modified adjusted gross income, we will correct it. The rules in 42 CFR 408.40 through 408.92 will apply to the collection of any retroactive premiums due. § 418.1140 What will happen if the modified adjusted gross income information from IRS is different from the modified adjusted gross income information we used to determine your income-related monthly adjustment amount? In general, we will use modified adjusted gross income information from IRS to determine your income-related monthly adjustment. We will make retroactive adjustments to your income-related monthly adjustment amount as described in paragraphs (a), (b), and
(d)of this section.
(a)When we have used modified adjusted gross income from the tax year 3 years prior to the effective year as described in § 418.1135(b), and IRS provides modified adjusted gross income information from the tax year 2 years prior to the effective year, we will use the new information to make an initial determination for the effective year. We will make retroactive adjustments back to January 1 of the effective year, or the first month you were enrolled or reenrolled in Medicare Part B if later than January.
(b)When we have used the modified adjusted gross income information that you provided for the tax year 2 years prior to the effective year and the modified adjusted gross income information we receive from IRS for that same year is different from the information you provided, we will use the modified adjusted gross income information provided to us by IRS to make a new initial determination. We will make retroactive adjustments back to January 1 of the effective year, or the first month you were enrolled or reenrolled in Medicare Part B if later than January.
(c)When we have used information from your amended Federal tax return that you provide, as explained in § 418.1150, or you provide proof that the information IRS provided to us is incorrect as described in § 418.1335, we will not make any adjustments to your income-related monthly adjustment amount for the effective year or years based on IRS information we receive later from IRS.
(d)When we use modified adjusted gross income information that you provided due to a qualifying life-changing event and we receive different information from IRS, we will use the IRS information to make retroactive corrections to all months in the effective year(s) during which you were enrolled in Medicare Part B, except when paragraph
(c)of this section applies.
(e)When we used the table in § 418.1120(b)(3) to determine your income-related monthly adjustment amount, and you lived apart from your spouse throughout that year, we will ask you for a signed statement or attestation that you lived apart from your spouse throughout that year. We will also ask you to provide information about the addresses of you and your spouse during that year. If you provide a signed statement or attestation that you lived apart from your spouse throughout that year, and information about your respective addresses that year, we will use the table in § 418.1120(b)(1) to determine your income-related monthly adjustment amount. § 418.1145 How do we determine your income-related monthly adjustment amount if IRS does not provide information about your modified adjusted gross income? In general, if we do not receive any information for you from IRS showing that you had modified adjusted gross income above the threshold in the tax year we request, we will not make an income-related monthly adjustment amount determination. § 418.1150 When will we use your amended tax return filed with IRS? You may provide your amended tax return for a tax year we used within 3 calendar years following the close of the tax year for which you filed the amended tax return. You must provide us with your retained copy of your amended U.S. Individual Income Tax Return on the required IRS form and a copy of the IRS letter confirming the amended tax return was filed or a transcript from IRS if they did not send a letter. If you cannot provide your retained copy of the amended tax return, you must obtain a copy of the return from IRS. We will then make any necessary retroactive corrections as defined in § 418.1110(c) to your income-related monthly adjustment amount. Determinations Using a More Recent Tax Year's Modified Adjusted Gross Income § 418.1201 When will we determine your income-related monthly adjustment amount based on the modified adjusted gross income information that you provide for a more recent tax year? We will use a more recent tax year than the years described in § 418.1135(a) or
(b)to reduce or eliminate your income-related monthly adjustment amount when all of the following occur:
(a)You experience a major life-changing event as defined in § 418.1205; and
(b)That major life-changing event results in a significant reduction in your modified adjusted gross income for the year which you request we use and the next year, if applicable. For purposes of this section, a significant reduction in your modified adjusted gross income is one that results in the decrease or elimination of your income-related monthly adjustment amount; and
(c)You request that we use a more recent tax year's modified adjusted gross income; and
(d)You provide evidence as described in §§ 418.1255 and 418.1265. § 418.1205 What is a major life-changing event? For the purposes of this subpart, we will consider the following to be major life-changing events:
(a)Your spouse dies;
(b)You marry;
(c)Your marriage ends through divorce or annulment;
(d)You or your spouse stop working or reduce the hours you work;
(e)You or your spouse experience a reduction in your income due to a loss of income-producing property, provided that the loss is not at your direction (e.g., due to the sale or transfer of the property). Examples of the type of property loss include, but are not limited to, loss of income from real property within a Presidentially or Gubernatorially-declared disaster area, destruction of livestock or crops by natural disaster or disease, or loss of income from real property due to arson;
(f)You or your spouse experience a reduction in or loss of income from an insured pension plan due to termination or reorganization of the pension plan or a scheduled cessation of pension. § 418.1210 What is not a major life-changing event? We will not consider events other than those described in § 418.1205 to be major life-changing events. Certain types of events are not considered major life-changing events for the purposes of this subpart, such as:
(a)Events that affect your expenses, but not your income; or
(b)Events that result in the loss of dividend income. § 418.1215 What is a significant reduction in your income? For purposes of this subpart, we will consider a reduction in your income to be significant if your modified adjusted gross income decreases; and
(a)The decrease reduces the percentage of the income-related monthly adjustment amount you must pay according to the Table of Applicable Percentages in § 418.1120; or
(b)The decrease reduces your modified adjusted gross income to an amount below the threshold described in § 418.1105 and eliminates any income-related monthly adjustment amount you must pay. § 418.1220 What is not a significant reduction in your income? For purposes of this subpart, we will not consider a reduction in your income to be significant unless the reduction affects the amount of income-related monthly adjustment you must pay. § 418.1225 Which more recent tax year will we use? We will consider evidence of your modified adjusted gross income that you provide for a tax year that is more recent than the year described in § 418.1135
(a)or
(b)when you meet all of the requirements described in § 418.1201. We will always ask you for your retained copy of your filed Federal income tax return for the more recent year you request that we use and will use that information to make an initial determination. If you have not filed your Federal income tax return for the more recent year you request that we use, you must provide us with evidence that is equivalent to a copy of a filed Federal income tax return. Evidence that is equivalent to a copy of a filed Federal income tax return is defined in § 418.1265(c). § 418.1230 What is the effective date of an income-related monthly adjustment amount initial determination that is based on a more recent tax year?
(a)When you make your request prior to January 1, 2007, our initial determination is effective on January 1, 2007.
(b)Subject to paragraph
(c)of this section, when you make your request during or after 2007 and your modified adjusted gross income for the more recent tax year is significantly reduced as a result of a major life-changing event, our initial determination is generally effective on January 1 of the year in which you make your request. If your first month of enrollment or reenrollment in Medicare Part B is after January of the year for which you make your request, our initial determination is effective on the first day of your Medicare Part B enrollment or reenrollment.
(c)We will make a determination about your income-related monthly adjustment amount for the year preceding the year that you make your request in the limited circumstances explained in § 418.1310(a)(4). When we make a determination for the preceding year, our initial determination is generally effective on January 1 of that year. If your first month of enrollment or reenrollment in Medicare Part B is after January of that year, our initial determination is effective on the first day of your Medicare Part B enrollment or reenrollment.
(d)When you make your request during or after 2007 and your modified adjusted gross income is significantly reduced beginning in the year following the year in which you make your request as a result of one or more of the events described in § 418.1205(a) through (f), our initial determination is effective on January 1 of the next year. § 418.1235 When will we stop using your more recent tax year's modified adjusted gross income to determine your income-related monthly adjustment amount? We will use your more recent tax year's modified adjusted gross income to determine your income-related monthly adjustment amount effective with the month and year described in § 418.1230 and for each year thereafter until one of the following occurs:
(a)We receive your modified adjusted gross income from IRS for the more recent tax year we used or a later tax year;
(b)Your more recent tax year modified adjusted gross income that we used is for a tax year more than 3 years prior to the income-related monthly adjustment amount effective year;
(c)You request we use a more recent tax year based on another major life-changing event as described in § 418.1201; or
(d)You notify us of a change in your modified adjusted gross income for the more recent tax year we used as described in § 418.1240. § 418.1240 Should you notify us if the information you gave us about your modified adjusted gross income for the more recent tax year changes? If you know that the information you provided to us about the more recent tax year that we used has changed, you should tell us so that we can determine if your income-related monthly adjustment amount should be eliminated or adjusted. We will accept new modified adjusted gross income information at any time after your request until the end of the calendar year following the more recent tax year(s) that we used. For us to make a new initial determination using your new modified adjusted gross income information, you must provide evidence as described in § 418.1265 to support the reduction or increase in your modified adjusted gross income. If you amend your Federal income tax return for the more recent tax year we used, we will use the rules in § 418.1150. § 418.1245 What will happen if you notify us that your modified adjusted gross income for the more recent tax year changes?
(a)If you notify us that your modified adjusted gross income for the more recent tax year has changed from what is in our records, we may make a new initial determination for each effective year involved. To make a new initial determination(s) we will take into account:
(1)The new modified adjusted gross income information for the more recent tax year you provide; and
(2)Any modified adjusted gross income information from IRS, as described in § 418.1135, that we have available for each effective year; and
(3)Any modified adjusted gross income information from you, as described in § 418.1135, that we have available for each effective year.
(b)For each new initial determination that results in a change in your income-related monthly adjustment amount, we will make retroactive adjustments that will apply to all enrolled months of the effective year.
(c)We will continue to use a new initial determination described in paragraph
(a)of this section to determine additional yearly income-related monthly adjustment amount(s) until an event described in § 418.1235 occurs.
(d)We will make a new determination about your income-related monthly adjustment amount when we receive modified adjusted gross income for the effective year from IRS, as described in § 418.1140(d). § 418.1250 What evidence will you need to support your request that we use a more recent tax year? When you request that we use a more recent tax year to determine your income-related monthly adjustment amount, we will ask for evidence of the major life-changing event and how the event significantly reduced your modified adjusted gross income as described in §§ 418.1255 and 418.1265. Unless we have information in our records that raises a doubt about the evidence, additional evidence documenting the major life-changing event(s) will not be needed. § 418.1255 What kind of major life-changing event evidence will you need to support your request for us to use a more recent tax year?
(a)If your spouse died and we do not have evidence of the death in our records, we will require proof of death as described in § 404.720(b) or
(c)or § 404.721 of this chapter.
(b)If you marry and we do not have evidence of the marriage in our records, we will require proof of marriage as described in §§ 404.725 through 404.727 of this chapter.
(c)If your marriage ends and we do not have evidence that the marriage has ended in our records, we will require proof that the marriage has ended as described in § 404.728(b) or
(c)of this chapter.
(d)If you or your spouse stop working or reduce your work hours, we will require evidence documenting the change in work activity. Examples of acceptable documentation include, but are not limited to, documents we can corroborate such as a signed statement from your employer, proof of the transfer of your business, or your signed statement under penalty of perjury, describing your work separation or a reduction in hours.
(e)If you or your spouse experience a loss of income from income-producing property we will require evidence documenting the loss. Examples of the type of evidence include, but are not limited to, insurance claims or an insurance adjuster's statement.
(f)If you or your spouse experience a reduction in or loss of pension income, we will require evidence documenting the reduction or loss. Examples include, but are not limited to, a statement from the Pension Benefit Guaranty Corporation or your pension fund administrator that explains the reduction or termination of your benefits. § 418.1260 What major life-changing event evidence will we not accept?
(a)We will not accept evidence of death that fails to meet the requirements in §§ 404.720 through 404.721 of this chapter.
(b)We will not accept evidence of marriage that fails to meet the requirements in §§ 404.725 through 404.727 of this chapter.
(c)We will not accept evidence that your marriage has ended if the evidence fails to meet the requirements in § 404.728 of this chapter.
(d)We will not accept documents supporting loss of income from income-producing property, or failure of or loss from a defined benefit pension plan unless the documents are original documents or copies from the original source.
(e)We will not accept evidence of work reduction or work stoppage that cannot be substantiated. § 418.1265 What kind of significant modified adjusted gross income reduction evidence will you need to support your request?
(a)You must provide evidence that one or more of the major life-changing events described in § 418.1205 resulted in a significant reduction in your modified adjusted gross income for the tax year you request we use.
(b)The preferred evidence is your retained copy of your filed Federal income tax return, your retained copy of your amended tax return with an IRS letter of receipt of the amended tax return, your copy of proof of a correction of the IRS information we used or a copy of your return or amended or proof of a correction of tax return information that you obtain from IRS for the more recent tax year you request we use.
(c)When a copy of your filed Federal income tax return is not available for the more recent tax year in which your modified adjusted gross income was significantly reduced, we will accept equivalent evidence. Equivalent evidence is the appropriate proof(s) in paragraphs (c)(1),
(2)and
(3)of this section, plus your signed statement under penalty of perjury that the information you provide is true and correct. When the major life-changing event changes your tax filing status, or the income-related monthly adjustment amount determination could be affected by your tax filing status, you will also be required to sign a statement regarding your intended income tax filing status for the tax year you request we use.
(1)If you experience one or more of the events described in § 418.1205(a), (b), or (c), you must provide evidence as to how the event(s) significantly reduced your modified adjusted gross income. Examples of the type of evidence include, but are not limited to, evidence of your spouse's modified adjusted gross income and/or your modified adjusted gross income for the tax year we use.
(2)If you experienced one or more of the events described in § 418.1205(d),
(e)or (f), you must provide evidence of how the event(s) significantly reduced your modified adjusted gross income, such as a statement explaining any modified adjusted gross income changes for the tax year we used, and a copy of your filed Federal income tax return (if you have filed one).
(3)If your spouse experiences one or more of the events described in § 418.1205(d), (e), or (f), you must provide evidence of the resulting significant reduction in your modified adjusted gross income. The evidence requirements are described in paragraph (c)(2) of this section.
(d)When we use information described in paragraph
(c)of this section, we will request that you provide your retained copy of your Federal income tax return for the year we used when you file your taxes. We will use that information to make timely adjustments to your Medicare premium, if necessary. We will later verify the information you provide when we receive information about that tax year from IRS, as described in § 418.1140(d). § 418.1270 What modified adjusted gross income evidence will we not accept? We will not accept a correction or amendment of your income tax return without a letter from IRS acknowledging the change. We will also not accept illegible or unsigned copies of income tax returns or attestations or other statements of income unless they are provided under penalty of perjury. Determinations and the Administrative Review Process § 418.1301 What is an initial determination regarding your income-related monthly adjustment amount? An initial determination is the determination we make about your income-related monthly adjustment amount that is subject to administrative review. For the purposes of administering the income-related monthly adjustment amount, initial determinations include but are not limited to determinations about:
(a)The amount of your income-related monthly adjustment amount based on information provided by IRS; and
(b)Any change in your income-related monthly adjustment amount based on one of the circumstances listed in § 418.1310(a)(1) through (a)(4). § 418.1305 What is not an initial determination regarding your income-related monthly adjustment amount? Administrative actions that are not initial determinations may be reviewed by us, but they are not subject to the administrative review process as provided by §§ 418.1320 through 418.1325 and §§ 418.1340 through 418.1355, and they are not subject to judicial review. These actions include, but are not limited to, our dismissal of a request for reconsideration as described in § 418.1330 and our dismissal of a request for a new initial determination as described in § 418.1310(d). § 418.1310 When may you request that we make a new initial determination?
(a)You may request that we make a new initial determination in the following circumstances:
(1)You provide a copy of your filed Federal income tax return for the tax year 2 years prior to the effective year when IRS has provided information for the tax year 3 years prior to the effective year. You may request a new initial determination beginning with the date you receive a notice from us regarding your income-related monthly adjustment amount until the end of the effective year, with one exception. If you receive the notice during the last 3 months of a calendar year, you may request a new initial determination beginning with the date you receive the notice until March 31 of the following year. We will follow the rules and procedures in §§ 418.1110(b) and 418.1140(b) to make a new initial determination and any necessary retroactive adjustments back to January 1 of the effective year, or the first month you were enrolled in Medicare Part B in the effective year if later than January.
(2)You provide a copy of an amended tax return filed with IRS, as defined in § 418.1010(b)(1). We will use your amended tax return for the same tax year as the year used to determine your income-related monthly adjustment amount. You must request the new initial determination within the timeframe described in § 418.1150.
(3)You provide proof that the tax return information about your modified adjusted gross income or tax filing status IRS gave us is incorrect. We will use proof that you obtain from IRS of a correction of your tax return information for the same tax year instead of the information that was provided to us by IRS, as explained in § 418.1335(a). You may request a new initial determination at any time after you receive a notice from us regarding your income-related monthly adjustment amount if you have such proof. We will use the rules and procedures in § 418.1335.
(4)You have a major life-changing event. You may request a new initial determination based on a major life-changing event when you meet all the requirements described in § 418.1201. You may make such a request at any time during the calendar year in which you experience a significant reduction in your modified adjusted gross income caused by a major life-changing event. When you have a major life-changing event that occurs in the last 3 months of a calendar year and your modified adjusted gross income for that year is significantly reduced as a result of the event, you may request that we make a new initial determination based on your major life-changing event from the date of the event until March 31 of the next year. We will follow the rules in § 418.1230 when we make a new initial determination based on your major life-changing event.
(b)If a request for a new initial determination based on any of the circumstances in paragraph
(a)of this section is made after the time frame provided for each type of listed circumstance, we will review the request under the rules in § 404.911 of this chapter to determine if there is good cause for a late request.
(c)We will notify you of the new initial determination as described in § 418.1315.
(d)We will dismiss your request to make a new initial determination if it does not meet one of the circumstances specified in paragraphs (a)(1) through (a)(4) of this section. Our dismissal of your request for a new initial determination is not an initial determination subject to further administrative or judicial review. § 418.1315 How will we notify you and what information will we provide about our initial determination?
(a)We will mail a written notice of all initial determinations to you. The notice of the initial determination will state the important facts and give the reasons for our conclusions. Generally, we will not send a notice if your income-related monthly adjustment amount stops because of your death.
(b)The written notice that we send will tell you:
(1)What our initial determination is;
(2)What modified adjusted gross income information we used to make our determination;
(3)The reason for our determination;
(4)The effect of the initial determination; and
(5)Your right to a reconsideration or a new initial determination. § 418.1320 What is the effect of an initial determination? An initial determination is binding unless you request a reconsideration within the time period described in §§ 404.909 and 404.911 of this chapter or we revise the initial determination or issue a new initial determination. § 418.1325 When may you request a reconsideration? If you are dissatisfied with our initial determination about your income-related monthly adjustment amount, you may request that we reconsider it. In addition, a person who shows that his or her rights may be adversely affected by the initial determination may request a reconsideration. We may accept requests for reconsideration that are filed by electronic or other means that we determine to be appropriate. Subject to the provisions of this section and § 418.1330, when you request a reconsideration, we will use the rules in §§ 404.907 through 404.922 of this chapter. § 418.1330 Can you request a reconsideration when you believe that the IRS information we used is incorrect? If you request a reconsideration solely because you believe that the information that IRS gave us is incorrect, we will dismiss your request for a reconsideration and notify you to obtain proof of a correction from IRS and request a new initial determination (§ 418.1335). Our dismissal of your request for reconsideration is not an initial determination subject to further administrative or judicial review. § 418.1335 What should you do if our initial determination is based on modified adjusted gross income information you believe to be incorrect? If you believe that IRS or you provided incorrect modified adjusted gross income information to us that we used to determine your income-related monthly adjustment amount, you can request information from us on how to contact IRS regarding the information we used.
(a)If IRS determines that the information it provided is not correct, IRS will provide you with documentation of the error, such as a copy of your Federal income tax return. If you would like us to use the revised or corrected information to determine your income-related monthly adjustment amount, you will need to request that we use that information and provide us with the IRS documentation confirming the error. We will make any necessary retroactive corrections as described in § 418.1110(d) to your income-related monthly adjustment amount.
(b)If you provided information to us about your modified adjusted gross income that we used to determine your income-related monthly adjustment amount, and that information is not correct, you may provide revised or corrected information. We will use the revised or corrected information if it reduces or eliminates your income-related monthly adjustment amount. We will make any necessary retroactive corrections as described in § 418.1110 to your income-related monthly adjustment amount. If you are providing corrected information about a more recent tax year's modified adjusted gross income that we used due to your major life-changing event, as described in § 418.1240, we will use the rules in § 418.1245 to determine how it will affect your income-related monthly adjustment amount. § 418.1340 What are the rules for our administrative review process? To the extent that they are not inconsistent with the rules in this subpart for making initial determinations and reconsidered determinations, we will use the same rules for the administrative review process that we use for determinations and decisions about your rights regarding non-medical issues under title II of the Act, as described in subpart J of part 404 of this chapter. We will accept oral requests as well as the written requests required in subpart J of part 404 of this chapter for requesting administrative review of our determination. If you are dissatisfied with our reconsidered determination, you may request review in accordance with § 418.1350 for this subpart. A request for a new initial determination, described in § 418.1310, is not the same as a request for reconsideration or further administrative review. § 418.1345 Is reopening of an initial or reconsidered determination made by us ever appropriate? We may reopen an initial or reconsidered determination made by us when the conditions for reopening are met as described in § 404.988 of this chapter. We will use the rules in §§ 404.987 through 404.991a of this chapter when we reopen determinations made by us. § 418.1350 What are the rules for review of a reconsidered determination or an administrative law judge decision? You may request a hearing before an OMHA administrative law judge consistent with HHS' regulations at 42 CFR part 405. You may seek further review of the administrative law judge's decision by requesting MAC review and judicial review in accordance with HHS' regulations. For the purpose of your request for an administrative law judge hearing or MAC review, you will be required to provide your consent for us to release your relevant tax return information to OMHA or the MAC for the purposes of adjudicating any appeal of the amount of an income-related adjustment to the Part B premium subsidy and for any judicial review of that appeal. § 418.1355 What are the rules for reopening a decision by an administrative law judge of the Office of Medicare Hearings and Appeals
(OMHA)or by the Medicare Appeals Council (MAC)? The rules in 42 CFR 405.980 through 405.986 govern reopenings of decisions by an administrative law judge of the OMHA and decisions by the MAC. A decision by an administrative law judge of the OMHA may be reopened by the administrative law judge or by the MAC. A decision by the MAC may be reopened only by the MAC. [FR Doc. E6-17690 Filed 10-26-06; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF DEFENSE Office of the Secretary [DOD-2006-OS-0106] 32 CFR Part 286 DoD Freedom of Information Act Program Regulation AGENCY: Department of Defense. ACTION: Final rule. SUMMARY: This documents removes Subpart D, “For Official Use Only”
(FOUO)from 32 CFR part 286, “DoD Freedom of Information Act Program Regulations” and reserves that subpart for future use. Removing this from 32 CFR part 286 will eliminate confusion of the authoritative FOUO guidance and who is the authority on FOUO. This removal will alleviate any further uncertainty, avoid duplication of FOUO guidance, and is considered an administrative action. DATES: *Effective Date:* November 27, 2006. FOR FURTHER INFORMATION CONTACT: Mr. Stephen Fisher, 703-696-4697. SUPPLEMENTARY INFORMATION: The Under Secretary of Defense (Intelligence) (USD(I)) is responsible for FOUO guidance. This guidance
(FOUO)is included in Appendix 3 of DoD 5200.1-R 1 which is the current FOUO guidance for the Department of Defense. 1 Copies may be obtained at *http://www.dtic.mil/whs/directives/corres/pdf/52001r_0197/p52001r.pdf.* List of Subjects in 32 CFR Part 286 Freedom of information. PART 286—DOD FREEDOM OF INFORMATION ACT PROGRAM REGULATIONS Accordingly, by the authority of 10 U.S.C. 301, 32 CFR part 286 is amended as follows: 1. The authority citation for 32 CFR part 286 continues to read as follows: Authority: 5 U.S.C. 552. 2. 32 CFR part 286 is amended by removing and reserving subpart D. Dated: October 23, 2006. L.M. Bynum, OSD Federal Register Liaison Officer, DoD. [FR Doc. 06-8908 Filed 10-26-06; 8:45 am]
Connectionstraces to 47
Traces to 47 documents
U.S. Code
56 references not yet in our index
  • 12 CFR 701
  • Pub. L. 109-351
  • Pub. L. 86-354
  • 73 Stat. 631
  • Pub. L. 97-320
  • 96 Stat. 1530
  • Pub. L. 91-508
  • 31 CFR 103.121
  • 12 CFR 748
  • 12 CFR 716
  • 5 CFR 1320
  • Pub. L. 105-277
  • Pub. L. 104-121
  • 120 Stat. 1966
  • 31 CFR 103.18
  • 17 CFR 240.17
  • 12 CFR 1732
  • Pub. L. 102-550
  • 12 CFR 30
  • Pub. L. 107-204
  • 17 CFR 210
  • 106 Stat. 3672
  • 14 CFR 39
  • 1 CFR 51
  • 14 CFR 21
  • Pub. L. 109-58
  • 119 Stat. 594
  • 42 USC 4321-4347
  • 5 CFR 1320.11
  • 5 USC 601-612
  • 15 USC 623
  • 18 CFR 153
  • 18 CFR 157
  • 18 CFR 375
  • 18 CFR 385
  • 15 USC 717-717w
  • 5 USC 551-557
  • 16 USC 791-825r
  • 42 USC 7101-7352
  • 15 USC 717-717z
+ 16 more
Citation graph
cites case law
Unknown
Interim final rule with request for comments
U.S.C.§ 1757
C.F.R.§ 701.21
C.F.R.§ 702.107
U.S.C.§ 6801
U.S.C.§ 553
U.S.C.§ 3501
Fed. Reg.Proposed Rules
U.S.C.§ 3502
Pub. L.Public Law 118-137
Cite12 CFR 701
Pub. L.Pub. L. 109-351
Pub. L.Pub. L. 86-354
Cites 103 · showing 12Cited by 0 across 0 sources
★   the supreme law of the land   ★
Don't Tread on Me
E Pluribus Unum — out of many, one

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

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