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Code · REGISTER · 2006-11-17 · PROPOSED RULES · Agricultural Agricultural Marketing Service RULES Cherries (tart) grown in Michigan et al., 66833-66835 E6-19460 Potatoes (Irish) grown in Colorado, 66835-66837 E6-19464 Prunes (dried) produced in Cal · Unknown

Unknown. Interim rule with request for comments

69,397 words·~315 min read·/register/2006/11/17/06-9230·

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-2006-11-17.xml --- 71 222 Friday, November 17, 2006 Contents Agricultural Agricultural Marketing Service RULES Cherries
(tart)grown in Michigan et al., 66833-66835 E6-19460 Potatoes (Irish) grown in Colorado, 66835-66837 E6-19464 Prunes (dried) produced in California, 66837-66839 E6-19463 Agriculture Agriculture Department See Agricultural Marketing Service See Animal and Plant Health Inspection Service See Forest Service See Natural Resources Conservation Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 66907 E6-19453 Animal Animal and Plant Health Inspection Service RULES Plant-related quarantine, domestic: Gypsy moth, 66829-66830 E6-19450 Oriental fruit fly, 66831-66833 E6-19451 PROPOSED RULES Plant-related quarantine, foreign: Mangoes from India, 66881-66888 E6-19452 Arts Arts and Humanities, National Foundation See National Foundation on the Arts and the Humanities 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 Meetings: National Center for Environmental Health/Agency for Toxic Substances and Disease Registry— Scientific Counselors Board, 66953-66954 06-9272 Centers Centers for Medicare & Medicaid Services NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-19133 66954-66956 E6-19428 E6-19430 E6-19431 Civil Civil Rights Commission NOTICES Meetings; State advisory committees: Utah, 66909 E6-19435 Coast Guard Coast Guard RULES Drawbridge operations: Iowa, Kansas, and Missouri, 66872-66874 E6-19455 Wisconsin, 66874-66876 E6-19456 PROPOSED RULES Drawbridge operations: Florida, 66895-66897 E6-19457 NOTICES Reports and guidance documents; availability, etc.: Tank level or pressure monitoring devices, 66960 E6-19459 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration NOTICES Reports and guidance documents; availability, etc.: Federal antidiscrimination, whistleblower protection, and retaliation laws; No FEAR Act notice, 66909-66910 E6-19490 Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement list; additions and deletions, 66908-66909 E6-19466 Commodity Commodity Futures Trading Commission NOTICES Meetings; Sunshine Act, 06-9284 06-9285 06-9286 06-9287 66919 06-9288 Defense Defense Department RULES Civilian health and medical program of the uniformed services (CHAMPUS): TRICARE program— Dental Program; National Defense Authorization Act changes, 66871-66872 E6-19437 NOTICES Reports and guidance documents; availability, etc.: Federal antidiscrimination, whistleblower protection, and retaliation laws; No FEAR Act notice, 66919-66920 E6-19438 Travel per diem rates, civilian personnel; changes, 66920-66926 06-9240 Drug Drug Enforcement Administration NOTICES Registration revocations, restrictions, denials, reinstatements: Koller, Daniel, D.V.M., 66975-66983 E6-19400 *Applications, hearings, determinations, etc.:* Kenco VPI, 66974-66975 E6-19446 Education Education Department NOTICES Grants and cooperative agreements; availability, etc.: Special education and rehabilitative services— Disability and Rehabilitation Research Projects and Centers Program, 66931-66935 E6-19493 National Institute on Disability and Rehabilitation Research Program, 66935-66938 E6-19494 Personnel Development to Improve Services and Results for Children with Disabilities Program, 66939-66943 E6-19498 Small Business Innovative Research Program, 66926-66930 E6-19491 Energy Energy Department NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-19476 66943-66944 E6-19482 EPA Environmental Protection Agency NOTICES Environmental statements; availability, etc.: Agency comment availability, 66944-66945 E6-19472 Agency weekly receipts, 66945 E6-19474 Superfund; response and remedial actions, proposed settlements, etc.: Industrial Metal Alloy Site, NC, 66945-66946 E6-19470 Water supply: Public water system supervision program— Minnesota, E6-19469 Executive Executive Office of the President See Presidential Documents See Trade Representative, Office of United States FAA Federal Aviation Administration RULES Air carrier certification and operations: Child restraint systems; additional types that may be furnished and used on aircraft Comments disposition, 66840 E6-19412 PROPOSED RULES Airworthiness directives: EADS SOCATA, 66889-66893 E6-19440 E6-19443 Airworthiness standards: Special conditions— General Electric Co. GEnx turbofan engine models, 66888-66889 06-9230 Class D airspace, 66893-66894 06-9248 Class E airspace, 66894-66895 06-9246 NOTICES Agency information collection activities; proposals, submissions, and approvals, 67006-67007 06-9247 Airport noise compatibility program: Noise exposure maps— Burlington International Airport, VT, 67007 06-9249 Reports and guidance documents; availability, etc.: Aircraft records recording; acceptance of transfer statements filed under Uniform Commercial Code, 67007-67009 06-9250 FCC Federal Communications Commission RULES Radio frequency devices: Unlicensed operation in TV broadcast bands, 66876-66878 E6-18907 PROPOSED RULES Radio frequency devices: Unlicensed operation in TV broadcast bands, 66897-66905 E6-18910 NOTICES Reports and guidance documents; availability, etc.: Video programming delivery; market competition status; annual assessment, 66946-66953 E6-19473 Federal Motor Federal Motor Carrier Safety Administration NOTICES Reports and guidance documents; availability, etc.: Household goods consumer protection; State enforcement, 67009-67010 E6-19411 Federal Railroad Federal Railroad Administration NOTICES Emergency relief docket (2006 CY); establishment and procedures for handling petitions for emergency waivers of safety regulations, 67010-67011 E6-19447 Exemption petitions, etc.: Union Pacific Railroad Co., 67011 E6-19448 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies: Formations, acquisitions, and mergers, 66953 E6-19449 Financial Financial Management Service See Fiscal Service Fiscal Fiscal Service NOTICES Surety companies acceptable on Federal bonds: Beazley Insurance Co., Inc., 67017 06-9241 Fish Fish and Wildlife Service NOTICES Endangered and threatened species: Incidental take permits— Lake County, FL; sand skink, 66970-66971 E6-19442 Food Food and Drug Administration NOTICES Meetings: Medical Devices Advisory Committee, 66956-66957 E6-19492 Forest Forest Service NOTICES Meetings: Willamette Province Advisory Committee, 66907 06-9242 Health Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See Food and Drug Administration See National Institutes of Health Homeland Homeland Security Department See Coast Guard Housing Housing and Urban Development Department NOTICES Grant and cooperative agreement awards: Section 811 Supportive Housing for Persons With Disablilities Program (FY 2005), 66960-66964 E6-19399 Grants and cooperative agreements; availability, etc.: Homeless assistance; excess and surplus Federal properties, 66964-66969 E6-19300 Interior Interior Department See Fish and Wildlife Service See Minerals Management Service See National Park Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 66969-66970 E6-19508 IRS Internal Revenue Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 67017-67021 E6-19414 E6-19416 E6-19417 E6-19420 E6-19421 E6-19423 International International Trade Administration NOTICES Antidumping: Preserved mushrooms from— China, 66910-66912 E6-19471 International International Trade Commission NOTICES Import investigations: Incremental dental positioning adjustment appliances and methods of producing same, 66973-66974 E6-19489 Steel concrete reinforcing bar from— Various countries, 66974 E6-19475 Justice Justice Department See Drug Enforcement Administration Labor Labor Department NOTICES Secretary's orders; delegations, cancellations, etc., 67024-67025 06-9239 Legal Legal Services Corporation NOTICES Meetings; Sunshine Act, 66983 06-9283 Maritime Maritime Administration NOTICES Meetings: Marine Transportation System National Advisory Council, 67012 E6-19445 Millennium Millennium Challenge Corporation NOTICES Reports and guidance documents; availability, etc.: Millenium Challenge Account assistance; eligible countries; list, 66983-66985 E6-19488 Minerals Minerals Management Service NOTICES Environmental statements; availability, etc.: Gulf of Mexic OCS— Oil and gas lease sales, 66971-66972 E6-19486 National Foundation National Foundation on the Arts and the Humanities NOTICES Meetings: Arts Advisory Panel, 66985-66986 E6-19410 NIH National Institutes of Health NOTICES Meetings: National Institute of Child Health and Human Development, 66957 06-9254 06-9255 66958 06-9259 National Institute of General Medical Sciences, 66958 06-9256 06-9258 Scientific Review Center, 66958-66959 06-9257 Reports and guidance documents; availability, etc.: National Toxicology Program— Validation of Alternative Methods Interagency Coordinating Committee; biennial progress report, 66959-66960 E6-19487 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management: Caribbean, Gulf, and South Atlantic fisheries— Gulf of Mexico gag, red grouper, and black grouper, 66878-66880 E6-19481 PROPOSED RULES Fishery conservation and management: Alaska; fisheries of Exclusive Economic Zone— Rockfish Pilot Program; workshop, 66905-66906 E6-19479 NOTICES Environmental statements; notice of intent: Chukchi and Beaufort Seas, AK; U.S. oil and gas industry offshore geophysical seismic surveys; impact on marine mammals, 66912-66915 E6-19485 Exempted fishing permit applications, determinations, etc., 66915-66916 E6-19427 Marine mammal permit applications, determinations, etc.; correction, 66916 E6-19483 Meetings: South Atlantic Fishery Management Council, 66917-66918 E6-19478 National Park National Park Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 66972-66973 06-9243 National Register of Historic Places; pending nominations, 66973 E6-19495 NRCS Natural Resources Conservation Service NOTICES Environmental statements; record of decision: Little Wood River Irrigation District Gravity Pressurized Delivery System; ID, 66907-66908 E6-19480 Nuclear Nuclear Regulatory Commission NOTICES Decommissioning plans; sites: Shieldalloy Metallurgical Corp., Newfield, NJ, 66986-66987 E6-19433 Occupational Occupational Safety and Health Review Commission NOTICES Reports and guidance documents; availability, etc.: Federal antidiscrimination, whistleblower protection, and retaliation laws; No FEAR Act notice, 66987-66989 06-9273 Office of U.S. Trade Office of United States Trade Representative See Trade Representative, Office of United States Pension Pension Benefit Guaranty Corporation RULES Premium payments: Penalties; assessment and relief, 66867-66871 E6-19436 Personnel Personnel Management Office RULES Health benefits, Federal employees: Health insurance premiums— Pretax allotments, 66827-66828 E6-19273 Peace Corps volunteers; enrollment suspension, 66828-66829 E6-19269 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Hazardous materials: Special permit applications; list, 06-9234 67013-67015 06-9235 Special permit applications delayed; list, 67012-67013 06-9233 Meetings: Hazardous materials— Railroad tank car transportation safety, 67015-67016 E6-19413 Presidential Presidential Documents PROCLAMATIONS *Special observances:* America Recycles Day (Proc. 8083), 66825-66826 06-9282 ADMINISTRATIVE ORDERS Government agencies and employees: Intelligence Reform and Terrorism Prevention Act of 2004, assignment of reporting function (Memorandum of November 14, 2006), 67027-67029 06-9304 Public Public Debt Bureau See Fiscal Service Railroad Railroad Retirement Board NOTICES Agency information collection activities; proposals, submissions, and approvals, 66991-66992 E6-19426 Saint Lawrence Saint Lawrence Seaway Development Corporation NOTICES Meetings: Advisory Board, 67016-67017 06-9238 SEC Securities and Exchange Commission NOTICES Investment Company Act of 1940: Allegiant Funds et al., 66992-66993 E6-19441 Meetings; Sunshine Act, 66993 06-9269 Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC, 66993-66998 E6-19415 NASDAQ Stock Market LLC, 66998-66999 E6-19424 NYSE Arca, Inc., 66999-67004 E6-19418 Options Clearing Corp., 67004-67005 E6-19419 Stock Clearing Corp. of Philadelphia, 67005-67006 E6-19422 Social Social Security Administration RULES Social security benefits and supplemental security income: Federal old age, survivors, and disability insurance; and aged, blind, and disabled— Work activity exemption; basis for continuing disability review, 66840-66860 E6-19255 Work report receipts, benefit payments for trial work period service months after fraud conviction, student earned income exclusion, etc., 66860-66867 E6-19232 Surface Surface Transportation Board NOTICES Railroad operation, acquisition, construction, etc.: Union Pacific Railroad Co., 67017 E6-19407 Trade Trade Representative, Office of United States NOTICES North American Free Trade Agreement (NAFTA): Binational panel inclusion, Chapter 19 roster; applications, 66989-66990 E6-19461 Transportation Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration See Federal Railroad Administration See Maritime Administration See Pipeline and Hazardous Materials Safety Administration See Saint Lawrence Seaway Development Corporation See Surface Transportation Board Treasury Treasury Department See Fiscal Service See Internal Revenue Service Separate Parts In This Issue Part II Labor Department, 67024-67025 06-9239 Part III Executive Office of the President, Presidential Documents, 67027-67029 06-9304 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. 71 222 Friday, November 17, 2006 Rules and Regulations OFFICE OF PERSONNEL MANAGEMENT 5 CFR Parts 550 and 892 RIN 3206-AJ88 Allotments From Federal Employees AGENCY: Office of Personnel Management. ACTION: Interim rule with request for comments. SUMMARY: The Office of Personnel Management
(OPM)is issuing interim regulations dealing with the use of OPM's allotment authority to allow for pretax salary reductions as part of OPM's flexible benefits plan. Using an allotment from an employee's pay to the employing agency allows certain payments ( *e.g.* , employee health insurance premiums, contributions to a flexible spending arrangement, and contributions to a health savings account) to be paid with pretax dollars, as provided under section 125 of the Internal Revenue Code. In addition, these regulations include certain policy clarifications and changes to make the regulations more readable. DATES: *Effective Date:* The interim regulations are effective on December 18, 2006. *Comment Date:* Comments must be received on or before January 16, 2007. ADDRESSES: Send or deliver written comments to Jerome D. Mikowicz, Acting Deputy Associate Director for Pay and Performance Policy, Office of Personnel Management, Room 7H31, 1900 E Street, NW., Washington, DC 20415-8200, by FAX at
(202)606-0824; or by e-mail at *pay-performance-policy@opm.gov.* FOR FURTHER INFORMATION CONTACT: Gene Holson by telephone at
(202)606-2858; by fax at
(202)606-0824; or by e-mail at *pay-performance-policy@opm.gov.* SUPPLEMENTARY INFORMATION: Definitions In § 550.301, we are revising the definition of *employee* to clarify that it covers only those who meet the definition of employee in 5 U.S.C. 2105. Allotments to Financial Organizations We are removing § 550.361, which covers allotments for savings, because these provisions cite the Department of the Treasury's regulations in 31 CFR part 209. As we explained in the supplementary information accompanying a final rule published on September 26, 2001 (66 FR 49085), the Department of the Treasury removed 31 CFR part 209 effective on January 27, 1997. (See 61 FR 68155, December 27, 1996.) In that final rule, we removed the reference to part 209 in § 550.311(a)(5). However, we neglected to remove the related rules in § 550.361, which we are doing now. We are also removing the language in current § 550.311(a)(6), which deals with an allotment for savings for an employee assigned to a post of duty outside the continental United States and references obsolete § 550.361. Finally, we are revising § 550.311(a)(5) to remove an obsolete limitation restricting mandatory allotments to “savings accounts.” The revised language is broadly stated to encompass any allotments to “an employee's personal account(s) at a financial organization” ( *e.g.* , a checking account or savings account). Pretax Salary Reductions as Part of OPM's Flexible Benefits Plan On September 26, 2001, the Office of Personnel Management
(OPM)published final regulations (66 FR 49085) allowing an employee to pay his or her Federal Employees Health Benefits
(FEHB)premiums through an allotment from the employee's pay to the employing agency. Use of this allotment mechanism allows FEHB premiums to be paid with a pretax salary reduction as part of a “cafeteria plan” (i.e., flexible benefits plan) established under section 125 of the Internal Revenue Code. Because pretax salary reductions lower an employee's taxable income, they reduce his or her tax burden. Most employees in the executive branch of the Federal Government are covered by OPM's cafeteria plan, the Federal Flexible Benefits Plan (FedFlex). (Certain executive branch agencies with independent compensation authority have established their own flexible benefits plans.) Also, employees of Federal agencies outside the executive branch or whose pay is not issued by an executive branch agency, and who are otherwise qualified, can participate in FedFlex if their employer agrees to adopt FedFlex. The initial FedFlex benefit, FEHB premium conversion, was implemented in October 2000. In 2003, OPM expanded FedFlex by offering flexible spending arrangements (FSAs). In late 2006, enrollment will begin for FedFlex dental and vision benefits. In 2007, employees enrolled in high deductible health plans with health savings accounts will be able to make allotments for pretax contributions to their health savings accounts through FedFlex. To ensure that all current and future allotments necessary for participation in FedFlex programs are eligible for pretax treatment, OPM is amending its allotment regulations at 5 CFR part 550, subpart C. Interim § 550.311(a)(7) broadens the current language at § 550.311(a)(8) addressing FEHB premiums to include any allotment effecting a salary reduction as part of FedFlex. We are making conforming changes to § 550.312(f) and § 892.301. Order of Precedence for Deductions We are removing § 550.313, which deals with the order of precedence for deductions from pay when there is insufficient pay to cover all deductions. The introduction of new pretax benefits under FedFlex creates additional complexities for agencies in determining the proper order of precedence for allotments when there is insufficient pay to cover all deductions. As part of its leadership role for the e-Payroll initiative, OPM has begun issuing payroll policy guidance to agencies to ensure timely, accurate, and uniform payroll practices across Government. In the near future, OPM will issue payroll policy guidance regarding the order of precedence for deductions when there is insufficient pay to cover all deductions. We believe OPM's payroll policy guidance under the e-Payroll initiative, rather than regulations, provides the flexibility needed to respond to the introduction of new types of allotments such as those for FedFlex benefits. Waiver of Notice of Proposed Rule Making Pursuant to section 553(b)(3)(B) of title 5 of the United States Code, I find that good cause exists for waiving the general notice of proposed rule making. An opportunity for public comment prior to issuing this rule is impracticable and contrary to the public interest. These regulations are needed to ensure that agencies treat employee premiums for dental and vision benefits offered beginning in December 2006 as pretax salary reductions under Federal tax law. OPM's allotment regulations are the vehicle for converting these premiums into salary reductions that qualify for pretax treatment as part of a flexible benefits plan under section 125 of title 26, United States Code. In enacting the Federal Employee Dental and Vision Benefits Enhancement Act of 2004 (Pub. L. 108-496, December 23, 2004), Congress anticipated that these dental and vision premiums would be paid on a pretax basis and described this pretax treatment as a major advantage of the new benefits. (See Senate Report 108-393.) Regulatory Flexibility Act I certify that these regulations will not have a significant economic impact on a substantial number of small entities because they will apply only to Federal agencies and employees. E.O. 12866, Regulatory Review The Office of Management and Budget has reviewed this rule in accordance with E.O. 12866. List of Subjects in 5 CFR Parts 550 and 892 Administrative practice and procedure, Claims, Government employees, Wages, Health insurance, and Taxes. Office of Personnel Management. Linda M. Springer, Director. Accordingly, OPM is amending 5 CFR parts 550 and 892 as follows: PART 550—PAY ADMINISTRATION (GENERAL) Subpart C—Allotments From Federal Employees 1. The authority citation for subpart C of part 550 continues to read as follows: Authority: 5 U.S.C. 5527; E.O. 10982, 3 CFR 1959-1963 Comp., p. 502. 2. In § 550.301, the definition of *employee* is revised to read as follows: § 550.301 Definitions. *Employee* means an employee of an agency who satisfies the definition of that term in 5 U.S.C. 2105. 3. In § 550.311, paragraph (a)(8) is removed, and the introductory text of paragraph (a), as well as paragraphs (a)(5)-(7) and
(b)are revised to read as follows: § 550.311 Authority of agency.
(a)*Mandatory allotments.* An agency must permit an employee to make—
(5)Two or more allotments to an employee's personal account(s) at a financial organization;
(6)An allotment for child support and/or alimony payments under § 550.361; and
(7)Any allotment effecting a salary reduction as part of a flexible benefits plan established by the Office of Personnel Management in conformance with section 125 of title 26, United States Code.
(b)*Discretionary allotments.* In addition to those allotments provided for in paragraph
(a)of this section, an agency may permit an employee to make an allotment for any legal purpose deemed appropriate by the head of the agency (or designee). This paragraph does not constitute an independent authority for an agency to permit pretax allotments in addition to those authorized by the Office of Personnel Management as described in paragraph (a)(7) of this section. 4. In § 550.312, paragraph
(f)is revised to read as follows: § 550.312 General limitations.
(f)Notwithstanding the requirements in paragraphs
(a)and
(c)of this section, an agency may make an allotment for an employee's share of Federal Employees Health Benefits premiums under § 550.311(a)(7) and part 892 of this chapter without specific authorization from the employee, unless the employee specifically waives such allotment. Agency procedures for processing employee waivers must be consistent with procedures established by the Office of Personnel Management. (See part 892 of this chapter.) § 550.313 [Removed] 5. Section 550.313 is removed. § 550.361 [Removed] 6. Section 550.361 is removed. §§ 550.371 and 550.381 [Redesignated as §§ 550.361 and 550.371] 7. Sections 550.371 and 550.381 are redesignated as 550.361 and 550.371, respectively. PART 892—FEDERAL FLEXIBLE BENEFITS PLAN: PRE-TAX PAYMENT OF HEALTH BENEFITS PREMIUMS Subpart C—Contributions and Withholdings 8. The authority citation for part 892 continues to read as follows: Authority: 5 U.S.C. 8913; 5 U.S.C. 1103(a)(7); 26 U.S.C. 125. § 892.301 [Amended] 9. Section 892.301 is amended by removing the reference “550.311(a)(8)” and adding the reference “550.311(a)(7)” in its place. [FR Doc. E6-19273 Filed 11-16-06; 8:45 am] BILLING CODE 6325-39-P OFFICE OF PERSONNEL MANAGEMENT 5 CFR Part 890 RIN 3206-AK90 Suspension of Enrollment in the Federal Employees Health Benefits
(FEHB)Program for Peace Corps Volunteers AGENCY: Office of Personnel Management. ACTION: Final rule. SUMMARY: The Office of Personnel Management is issuing a final regulation to allow Peace Corps volunteers who are FEHB Program enrolled annuitants, survivors, and former spouses to suspend their FEHB enrollments and then return to the FEHB Program during the Open Season, or return to FEHB coverage immediately, if they involuntarily lose health benefits coverage under the Peace Corps. The intent of this final rule is to allow these beneficiaries to avoid the expense of continuing to pay FEHB Program premiums while they have other health coverage as Peace Corps volunteers, without endangering their ability to return to the FEHB Program in the future. DATES: *Effective Date:* Effective December 18, 2006. FOR FURTHER INFORMATION CONTACT: Michael W. Kaszynski, Policy Analyst, Insurance Policy, OPM, Room 3425, 1900 E Street, NW., Washington, DC 20415-0001. Phone number: 202-606-0004. E-mail: *mwkaszy@opm.gov.* SUPPLEMENTARY INFORMATION: The Office of Personnel Management
(OPM)allows certain Medicare, Medicaid, CHAMPVA or TRICARE or TRICARE-for-Life eligible FEHB Program annuitants, survivors, and former spouses to suspend their FEHB enrollments and then return to the FEHB Program during the Open Season; or return to FEHB coverage immediately, if they involuntarily lose coverage. This has allowed these beneficiaries to avoid the expense of continuing to pay FEHB Program premiums while they are using certain Medicare, Medicaid, TRICARE or TRICARE-for-Life or CHAMPVA coverage without endangering their ability to return to the FEHB Program in the future. We have determined that individuals eligible for coverage under the Peace Corps should be allowed the same right to suspend FEHB coverage and reenroll in the FEHB Program as we afford these other groups. On November 30, 2005, OPM published an interim rule in the **Federal Register** at 70 FR 71749. We received no comments on the interim regulation. Regulatory Flexibility Act I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the regulation affects only health insurance carriers under the Federal Employees Health Benefits Program. Executive Order 12866, Regulatory Review This regulation has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866. List of Subjects in 5 CFR Part 890 Administrative practice and procedure, Government employees, Health facilities, Health insurance, Health professionals, Hostages, Iraq, Kuwait, Lebanon, Military Personnel, Reporting and recordkeeping requirements, Retirement. Office of Personnel Management. Linda M. Springer, Director. Accordingly, the interim rule amending 5 CFR part 890 which was published in the **Federal Register** at 70 FR 71749, November 30, 2005, is adopted as a final rule without change. [FR Doc. E6-19269 Filed 11-16-06; 8:45 am] BILLING CODE 6325-39-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No. APHIS-2006-0171] Gypsy Moth Generally Infested Areas; Addition of Areas in Virginia AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Interim rule and request for comments. SUMMARY: We are amending the gypsy moth regulations by adding the Cities of Roanoke and Salem and the Counties of Craig, Giles, and Roanoke in Virginia to the list of generally infested areas based on the detection of infestations of gypsy moth in those areas. As a result of this action, the interstate movement of regulated articles from those areas will be restricted. This action is necessary to prevent the artificial spread of the gypsy moth to noninfested areas of the United States. DATES: This interim rule is effective November 17, 2006. We will consider all comments that we receive on or before January 16, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* , select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2006-0171 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0171, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0171. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are from 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Dr. Weyman Fussell, Program Manager, Pest Detection and Management Programs, PPQ, APHIS, 4700 River Road Unit 134, Riverdale, MD 20737-1231;
(301)734-5705. SUPPLEMENTARY INFORMATION: Background The gypsy moth, *Lymantria dispar* (Linnaeus), is a destructive pest of forest and shade trees. The gypsy moth regulations (contained in 7 CFR 301.45 through 301.45-12 and referred to below as the regulations) restrict the interstate movement of regulated articles from generally infested areas to prevent the human-assisted spread of the gypsy moth. In accordance with § 301.45-2 of the regulations, generally infested areas are, with certain exceptions, those States or portions of States in which a gypsy moth general infestation has been found by an inspector, or each portion of a State that the Administrator deems necessary to regulate because of its proximity to infestation or its inseparability for quarantine enforcement purposes from infested localities. Less than an entire State will be designated as a generally infested area only if:
(1)The State has adopted and is enforcing a quarantine or regulation that imposes restrictions on the intrastate movement of regulated articles that are substantially the same as those that are imposed with respect to the interstate movement of such articles; and
(2)the designation of less than the entire State as a generally infested area will be adequate to prevent the artificial interstate spread of infestations of the gypsy moth. Designation of Areas as Generally Infested Areas Section 301.45-3 of the regulations lists generally infested areas. In this rule, we are amending § 301.45-3(a) by adding two cities and three counties in Virginia to the list of generally infested areas. As a result of this rule, the interstate movement of regulated articles from these areas will be restricted. We are taking this action because, in cooperation with the State of Virginia, the United States Department of Agriculture conducted surveys that detected multiple life stages of the gypsy moth in the Cities of Roanoke and Salem and the Counties of Craig, Giles, and Roanoke, VA. Based on these surveys, we determined that reproducing populations exist at significant levels in these areas. Eradication of these populations is not considered feasible because these areas are immediately adjacent to areas currently recognized as generally infested and are, therefore, subject to reinfestation. Emergency Action This rulemaking is necessary on an emergency basis because of the possibility that the gypsy moth could be artificially spread to noninfested areas of the United States, where it could cause economic losses due to the defoliation of susceptible forest and shade trees. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the **Federal Register** . We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the **Federal Register** . The document will include a discussion of any comments we receive and any amendments we are making to the rule. Executive Order 12866 and Regulatory Flexibility Act This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866. We are amending the gypsy moth regulations by adding the Cities of Roanoke and Salem and the Counties of Craig, Giles, and Roanoke in Virginia to the list of generally infested areas based on the detection of infestations of gypsy moth in those areas. As a result of this action, the interstate movement of regulated articles from those areas will be restricted. This action is necessary to prevent the artificial spread of the gypsy moth to noninfested areas of the United States. The following analysis addresses the economic effects of the interim rule on small entities, as required by the Regulatory Flexibility Act. The interim rule will affect the interstate movement of regulated articles, including forest products (logs, pulpwood, wood chips) and Christmas trees, nursery stock, and mobile homes and outdoor household articles from and through the newly regulated areas. The value of sales of Christmas trees and nursery in the affected areas was $1.7 million, representing much less than 1 percent of the total value of such sales in Virginia. Treatment costs for growing areas range between $10 and $20 per acre. Fumigation costs, if infestation is found in a shipment, will range between $100 and $150 per truck load. There are at least 27 establishments in the newly regulated cities and counties that produce and ship the regulated articles. Of those, 2 are Christmas tree growers, 10 are nurseries, 10 are loggers/sawmills, and 5 are movers of outdoor household articles. Nearly all of the establishments are considered to be small businesses. The regulatory requirements resulting from this rule are expected to cause a slight increase in the costs of business for some of the affected entities, but those additional costs are small when compared to the potential for harm to related industry and the U.S. economy as a whole that would result from the spread of the pest. Since the total value of regulated articles moved from regulated areas to non-regulated areas is a small fraction of the State total, the regulatory effect on State and national prices is expected to be very small. Additionally, since the regulations restrict, but do not prohibit, the movement of regulated articles, articles that meet the requirements of the regulations would continue to enter the market. The overall impact upon price and competitiveness is expected to be minor. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities. Executive Order 12372 This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.) Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule:
(1)Preempts all State and local laws and regulations that are inconsistent with this rule;
(2)has no retroactive effect; and
(3)does not require administrative proceedings before parties may file suit in court challenging this rule. Paperwork Reduction Act This interim rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects in 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. Accordingly, we are amending 7 CFR part 301 as follows: PART 301—DOMESTIC QUARANTINE NOTICES 1. The authority citation for part 301 continues to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3. Section 301.75-15 issued under Sec. 204, Title II, Public Law 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 issued under Sec. 203, Title II, Public Law 106-224, 114 Stat. 400 (7 U.S.C. 1421 note). 2. In § 301.45-3, paragraph (a), the entry for Virginia is amended by adding new areas in alphabetical order to read as follows: § 301.45-3 Generally infested areas.
(a)* * * Virginia *City of Roanoke.* The entire city. *City of Salem.* The entire city. *Craig County.* The entire county. *Giles County.* The entire county. *Roanoke County.* The entire county. Done in Washington, DC, this 14th day of November 2006. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-19450 Filed 11-16-06; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No. APHIS-2006-0151] Oriental Fruit Fly; Add a Portion of San Bernardino County, CA, to the List of Quarantined Areas AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Interim rule and request for comments. SUMMARY: We are amending the Oriental fruit fly regulations by adding a portion of San Bernardino County, CA, to the list of quarantined areas and restricting the interstate movement of regulated articles from that area. We are also amending the definitions of the terms *core area* and *day degrees* and adding jujube ( *Ziziphus* spp.) to the list of articles regulated for Oriental fruit fly. These actions are necessary to prevent the artificial spread of Oriental fruit fly to noninfested areas of the United States and to update the regulations to reflect current science and practices. DATES: This interim rule is effective November 17, 2006. We will consider all comments that we receive on or before January 16, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2006-0151 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0151, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0151. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Mr. Wayne D. Burnett, National Coordinator, Fruit Fly Exclusion and Detection Programs, APHIS, 4700 River Road Unit 137, Riverdale, MD 20737-1234;
(301)734-6553. SUPPLEMENTARY INFORMATION: Background The Oriental fruit fly, *Bactrocera dorsalis* (Hendel), is a destructive pest of citrus and other types of fruit, nuts, vegetables, and berries. The short life cycle of the Oriental fruit fly allows rapid development of serious outbreaks, which can cause severe economic losses. Heavy infestations can cause complete loss of crops. The Oriental fruit fly regulations, contained in 7 CFR 301.93 through 301.93-10 (referred to below as the regulations), were established to prevent the spread of the Oriental fruit fly into noninfested areas of the United States. Section 301.93-3(a) provides that the Administrator will list as a quarantined area each State, or each portion of a State, in which the Oriental fruit fly has been found by an inspector, in which the Administrator has reason to believe that the Oriental fruit fly is present, or that the Administrator considers necessary to regulate because of its proximity to the Oriental fruit fly or its inseparability for quarantine enforcement purposes from localities in which the Oriental fruit fly has been found. The regulations impose restrictions on the interstate movement of regulated articles from the quarantined areas. Quarantined areas are listed in § 301.93-3(c). Less than an entire State will be designated as a quarantined area only if the Administrator determines that:
(1)The State has adopted and is enforcing restrictions on the intrastate movement of the regulated articles that are substantially the same as those imposed on the interstate movement of regulated articles and
(2)the designation of less than the entire State as a quarantined area will prevent the interstate spread of the Oriental fruit fly. Recent trapping surveys by inspectors of California State and county agencies reveal that a portion of San Bernardino County, CA, is infested with the Oriental fruit fly. State agencies in California have begun an intensive Oriental fruit fly eradication program in the quarantined area in San Bernardino County. Also, California has taken action to restrict the intrastate movement of regulated articles from the quarantined area. Accordingly, to prevent the spread of the Oriental fruit fly into noninfested areas of the United States, we are amending the regulations in § 301.93-3 by designating a portion of San Bernardino County, CA, as a quarantined area for the Oriental fruit fly. The quarantined area is described in the regulatory text at the end of this document. Section 301.93-1 of the regulations currently defines the term *core area* as the “1 square mile area surrounding each property where Oriental fruit fly has been detected.” We have determined that it is necessary to amend the definition of *core area* because the use of GPS technology allows us to more accurately measure the distance from a positive detection site of Oriental fruit fly. Therefore, we are revising the definition of the term *core area* to read “the area within a circle surrounding each detection using a 1/2 -mile radius with the detection as a center point.” The regulations currently define the term *day degrees* as a mathematical construct combining average temperature over time that is used to calculate the length of an Oriental fruit fly life cycle. Day degrees are the product of the following formula, with all temperatures measured in °F.: [(Minimum Daily Temp + Maximum Daily Temp)/2]−54°=Day Degrees. We have determined that it is necessary to amend the definition of *day degrees* because the use of weather service data entered into a computer model enables us to more accurately measure day degree accumulation based upon the latest biological information than was previously possible. Therefore, we are revising the definition of *day degrees* to read “a unit of measurement used to measure the amount of heat required to further the development of fruit flies through their life cycle. Day-degree life cycle requirements are calculated through a modeling process specific for each fruit fly species.” We are also adding jujube ( *Ziziphus* spp.) to the regulated articles list in § 301.93-2 because jujube was recorded as a host of the Oriental fruit fly as documented in a peer reviewed international journal. Emergency Action This rulemaking is necessary on an emergency basis to prevent the Oriental fruit fly from spreading to noninfested areas of the United States. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the **Federal Register** . We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the **Federal Register** . The document will include a discussion of any comments we receive and any amendments we are making to the rule. Executive Order 12866 and Regulatory Flexibility Act This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866. This rule amends the Oriental fruit fly regulations by adding a portion of San Bernardino County, CA, to the list of quarantined areas. The regulations restrict the interstate movement of regulated articles from a quarantined area. County records indicate there are approximately 18 nurseries, 96 yard maintenance companies, 2 growers (including 1 jujube grower), 1 mobile vendors, 5 food banks, and 34 fruit sellers within the quarantined area that may be affected by this rule. We expect that any small entities located within the quarantined area that sell regulated articles do so primarily for local intrastate, not interstate, movement, so the effect, if any, of this rule on these entities appears to be minimal. The effect on any small entities that may move regulated articles interstate will be minimized by the availability of various treatments that, in most cases, will allow these small entities to move regulated articles interstate with very little additional cost. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities. Executive Order 12372 This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.) Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule:
(1)Preempts all State and local laws and regulations that are inconsistent with this rule;
(2)has no retroactive effect; and
(3)does not require administrative proceedings before parties may file suit in court challenging this rule. National Environmental Policy Act An environmental assessment and finding of no significant impact have been prepared for this interim rule. The site-specific environmental assessment provides a basis for the conclusion that the implementation of integrated pest management to eradicate the Oriental fruit fly will not have a significant impact on human health and the natural environment. Based on the finding of no significant impact, the Administrator of the Animal and Plant Health Inspection Service has determined that an environmental impact statement need not be prepared. The environmental assessment and finding of no significant impact were prepared in accordance with:
(1)The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 *et seq.* ),
(2)regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508),
(3)USDA regulations implementing NEPA (7 CFR part 1b), and
(4)APHIS' NEPA Implementing Procedures (7 CFR part 372). The environmental assessment and finding of no significant impact may be viewed on the Regulations.gov Web site or in our reading room. (Instructions for accessing Regulations.gov and information on the location and hours of the reading room are provided under the heading ADDRESSES at the beginning of this interim rule.) In addition, copies may be obtained by writing to the individual listed under FOR FURTHER INFORMATION CONTACT . Paperwork Reduction Act This rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects in 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. Accordingly, 7 CFR part 301 is amended as follows: PART 301—DOMESTIC QUARANTINE NOTICES 1. The authority citation for part 301 continues to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3. Section 301.75-15 issued under Sec. 204, Title II, Public Law 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 issued under Sec. 203, Title II, Public Law 106-224, 114 Stat. 400 (7 U.S.C. 1421 note). 2. Section 301.93-1 is amended by revising the definitions of *core area* and *day degrees* to read as follows: § 301.93-1 Definitions. *Core area.* The area within a circle surrounding each detection using a 1/2-mile radius with the detection as a center point. *Day degrees.* A unit of measurement used to measure the amount of heat required to further the development of fruit flies through their life cycle. Day-degree life cycle requirements are calculated through a modeling process specific for each fruit fly species. § 301.93-2 [Amended] 3. In § 301.93-2, paragraph
(a)is amended by adding, in alphabetical order, an entry for “Jujube ( *Ziziphus* spp.)”. 4. In § 301.93-3, paragraph
(c)is revised to read as follows: § 301.93-3 Quarantined areas.
(c)The areas described below are designated as quarantined areas: California *San Bernardino County* . That portion of San Bernardino County in the Rialto area bounded by a line as follows: Beginning at the intersection of State Highway 201 and East Avenue; then north on East Avenue to Banyan Street; then east, northeast, north, and northeast on Banyan Street to Wardman Bullock Road; then north and northwest on Wardman Bullock Road to Colonbero Road; then north along an imaginary line from the intersection of Wardman Bullock Road and Colobero Road to its intersection with the southern boundary line of the San Bernardino National Forest; then east, northeast, northwest, southeast, east, southeast, northeast, north, northeast, and east along the southern boundary line of the San Bernardino National Forest to its intersection with U.S. Interstate 15; then northeast on U.S. Interstate 15 to its next intersection with the San Bernardino National Forest boundary line; then northwest, north, northeast, southeast, east, northeast, southeast, and east along the San Bernardino National Forest boundary line to its intersection with Palm Avenue; then southwest on Palm Avenue to U.S. Interstate 215; then southeast on U.S. Interstate 215 to University Parkway; then southwest on University Parkway to N. State Street; then south on N. State Street to State Highway 210; then west on State Highway 210 to the Southern Pacific railroad track; then south, southwest, south, and southeast along the Southern Pacific railroad track to its intersection with W. Base Line Street; then west on W. Base Line Street to N. Pepper Avenue; then south on N. Pepper Avenue to State Highway 66; then west on State Highway 66 to N. Cactus Avenue; then south on N. Cactus Avenue to W. Rialto Avenue; then west on W. Rialto Avenue to W. Arrow Boulevard; then west on W. Arrow Boulevard to Arrow Boulevard; then west on Arrow Boulevard to Cherry Avenue; then north on Cherry Avenue to State Highway 66; then west on State Highway 66 to East Avenue; then north on East Avenue to the point of beginning. Done in Washington, DC, this 14th day of November 2006. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-19451 Filed 11-16-06; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 930 [Docket No. FV06-930-2 FR] Tart Cherries Grown in the States of Michigan, et al.; Increased Assessment Rate AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This rule increases the assessment rate established for the Cherry Industry Administrative Board (Board) for the 2006-2007 fiscal year and subsequent fiscal years from $0.0021 to $0.0066 per pound to fund the Board's administrative expenses and its new research and promotion program. Authorization to assess tart cherry handlers enables the Board to incur expenses that are reasonable and necessary to administer the program. The Board locally administers the marketing order which regulates the handling of tart cherries grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin. The fiscal year began July 1, 2006, and ends June 30, 2007. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated. DATES: *Effective Date:* This final rule becomes effective November 20, 2006. FOR FURTHER INFORMATION CONTACT: Dawana J. Clark or Kenneth G. Johnson, DC Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Unit 155, 4700 River Road, Riverdale, Maryland 20737; telephone:
(301)734-5243, Fax:
(301)734-5275, or e-mail: *Dawana.Clark@usda.gov* or *Kenneth.Johnson@usda.gov.* Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; telephone:
(202)720-2491, Fax:
(202)720-8938, or e-mail: *Jay.Guerber@usda.gov.* SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing Agreement and Order No. 930, as amended (7 CFR part 930), regulating the handling of tart cherries produced in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Department of Agriculture
(USDA)is issuing this rule in conformance with Executive Order 12866. This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, tart cherries are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable tart cherries beginning July 1, 2006, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. This final rule increases the assessment rate established for the Board for the 2006-2007 and subsequent fiscal years for tart cherries from $0.0021 to $0.0066 per pound of tart cherries to fund the Board's administrative expenses and its new research and promotion program. The tart cherry marketing order provides authority for the Board, with approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Board are producers and handlers of tart cherries. They are familiar with the Board's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input. Authority to fix the rate of assessment to be paid by each handler and to collect such assessment appears in § 930.41 of the order. In addition, § 930.48 of the order provides that the Board, with the approval of USDA, may establish or provide for the establishment of production research, marketing research, and market development projects designed to assist, improve, or promote the marketing, distribution, consumption, or efficient production of cherries. The expense of such projects is paid from funds collected pursuant to § 930.41 (Assessments), or from such other funds as approved by the USDA. For the 2003-2004 fiscal year, the Board recommended, and USDA approved, an assessment rate of $0.0021 per pound of tart cherries handled that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Board or other information available to USDA. The Board met on March 16, 2006, and recommended 2006-2007 expenditures of $1,523,000 and an assessment rate of $0.0066 per pound of tart cherries. Eighteen of the nineteen Board members voted in support of the assessment rate increase. One Board seat is vacant. In comparison, last year's budgeted expenses were $488,000. The assessment rate of $0.0066 is $0.0045 higher than the rate currently in effect. The Board recommended that the assessment rate be increased to cover its administrative expenses and fund a new research and promotion program which will commence in Fall 2006. The $0.0066 assessment rate will cover the costs of the research and promotion program which will be assessed at $0.005 per pound (or $10 per ton) of cherries for processing and $0.0016 per pound for administrative expenses. The $0.0016 per pound for administrative expenses will be a reduction from the 2005-2006 assessment rate of $0.0021 per pound. The Board believes that its new research and promotion program is the best way for the industry to develop both stronger demand for tart cherries and tart cherry products and increase sales opportunities. According to a recent Board survey, both growers and handlers believe a research and promotion program will benefit the industry. This program will be directed primarily at consumers and retail nutrition advisors, and employ promotional strategies, such as print advertising. All tart cherry handlers regulated under the marketing order will pay the proposed assessment rate to fund the new research and promotion program. However, certain organic handlers may be exempt from paying assessments for market promotion activities pursuant to 7 CFR 900.700. The major expenditures recommended by the Board for the 2006-2007 fiscal year include $1,150,000 for promotion, $169,000 for personnel, $82,000 for meetings, $77,000 for office expenses, $20,000 for compliance, and $5,000 for industry educational efforts. Budgeted expenses for major items in 2005-2006 were $159,000 for personnel, $150,000 for compliance, $81,000 for meetings, $93,000 for office expenses, and $5,000 for industry educational efforts. The Board recommended an increased assessment rate to generate larger revenue to meet its expenses and keep its reserves at an acceptable level. In deriving the recommended assessment rate, the Board determined assessable tart cherry production for the fiscal period at 230 million pounds. Therefore, total assessment income for 2006-2007 is estimated at $1,518,000 (230 million pounds × $0.0066). This amount plus adequate funds in the reserve and interest income will be adequate to cover budgeted expenses. Funds in the reserve (approximately $411,000) will be kept within the approximately six months' operating expenses as recommended by the Board consistent with § 930.42(a). The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and other information submitted by the Board or other available information. Although the assessment rate will be effective for an indefinite period, the Board will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Board meetings are available from the Board or the USDA. Board meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Board recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Board's 2006-2007 budget and those for subsequent fiscal periods will be reviewed and, as appropriate, approved by USDA. Final Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service
(AMS)has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility. There are approximately 40 handlers of tart cherries who are subject to regulation under the tart cherry marketing order and approximately 900 producers of tart cherries in the regulated area. Small agricultural service firms, which includes handlers, are defined by the Small Business Administration
(SBA)(13 CFR 121.201) as those having annual receipts of less than $6,500,000, and small agricultural producers are defined as those having annual receipts of less than $750,000. The majority of producers and handlers of tart cherries under the order are considered small entities under SBA's standards. The principal demand for tart cherries is in the form of processed products. Tart cherries are dried, frozen, canned, juiced, and pureed. During the period 2001-2002 through 2005-2006, approximately 93.8 percent of the U.S. tart cherry crop, or 214.3 million pounds, was processed annually. Of the 214.3 million pounds of tart cherries processed, 62 percent was frozen, 26 percent was canned, and 12 percent was utilized for juice and other products. Based on National Agricultural Statistics Service data, acreage in the United States devoted to tart cherry production has been trending downward. Bearing acreage has declined from a high of 50,050 acres in 1987-88 to 37,100 acres in 2005-2006. This represents a 26 percent decrease in total bearing acres. Michigan leads the nation in tart cherry acreage with 74 percent of the total and produces about 72 percent of the U.S. tart cherry crop each year. This rule increases the assessment rate established for the Board and collected from handlers for the 2006-2007 and subsequent fiscal periods from $0.0021 to $0.0066 per pound of tart cherries. The Board discussed continuing the existing assessment rate, but concluded that it needed the additional funds to devote to its research and promotion program which will be funded through assessments. This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to producers. However, these costs will be offset by the benefits derived by the operation of the marketing order. In addition, the Board's meeting was widely publicized throughout the tart cherry industry and all interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses. This rule will impose no additional reporting or recordkeeping requirements on either small or large tart cherry handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. The AMS is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to government information and services and for other purposes. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. A proposed rule was published in the **Federal Register** on June 21, 2006 (71 FR 35562). Copies of the proposed rule were mailed or sent via facsimile to all Board members and cherry handlers. Finally, the proposed rule was made available through the Internet USDA and the Office of the Federal Register. A 20-day comment period ending July 11, 2006, was provided to allow interested persons to respond to the proposal. One comment was received. The commenter opposed the proposal on the basis that the increased assessment rate is indefinite and that Congress should vote on it. The commenter also stated that the recommended assessment rate represents a large increase and that we are, in essence, raising taxes on people who have no representation that is directly accountable to those people. Finally, the commenter was of the view that federalism issues and Executive Order 13132 applies. In response to the commenter, and as previously stated in this action, the tart cherry marketing order, as issued in accordance with the Agriculture Marketing Act of 1937, provides the authority for the Board, with USDA approval, to formulate a budget and collect assessments from handlers to administer the program. The members of the Board are producers and handlers who are nominated and elected by their peers to represent their respective production areas/districts to address issues that come before the Board. The assessment rate is formulated and discussed in a public meeting. All directly affected persons have an opportunity to participate and provide input. Finally, this rule does not have sufficient Federalism implications to warrant an assessment under Executive Order 13132. Accordingly, no changes will be made to this rule based on the comment received. A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: *http://www.ams.usda.gov/fv/moab.html.* Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section. After consideration of all relevant material presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act. Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the **Federal Register** because the 2006-2007 fiscal period began on July 1, 2006, and the marketing order requires that the rate of assessment for each fiscal period apply to all assessable tart cherries handled during such fiscal period. Further, handlers are aware of this action which was unanimously recommended by the Board at a public meeting. Also, a 20-day comment period was provided for in the proposed rule. List of Subjects in 7 CFR Part 930 Marketing agreements, Reporting and recordkeeping requirements, Tart cherries. For the reasons set forth in the preamble, 7 CFR part 930 is amended as follows: PART 930—TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK, PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN 1. The authority citation for 7 CFR part 930 continues to read as follows: Authority: 7 U.S.C. 601-674. 2. Section 930.200 is revised to read as follows: § 930.200 Assessment rate. On and after July 1, 2006, the assessment rate imposed on handlers shall be $0.0066 per pound of tart cherries grown in the production area and utilized in the production of tart cherry products. Included in this rate is $0.005 per pound of cherries to cover the costs of the new research and promotion program and $0.0016 per pound of cherries to cover administrative expenses. Dated: November 14, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E6-19460 Filed 11-16-06; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 948 [Docket No. FV06-948-1 FIR] Irish Potatoes Grown in Colorado; Suspension of Continuing Assessment Rate AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: The Department of Agriculture
(USDA)is adopting, as a final rule, without change, an interim final rule which suspended the continuing assessment rate established for the Area No. 3 Colorado Potato Administrative Committee (Committee) for the 2006-2007 and subsequent fiscal periods. The Committee, which locally administers the marketing order regulating the handling of potatoes grown in Northern Colorado, made this recommendation for the purpose of lowering the monetary reserve to a level consistent with program requirements. The fiscal period begins July 1 and ends June 30. The assessment rate will remain suspended until an appropriate rate is reinstated. DATES: *Effective Date:* December 18, 2006. FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson or Gary D. Olson, Northwest Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; telephone:
(503)326-2724; Fax:
(503)326-7440 or E-mail: *Teresa.Hutchinson@usda.gov* or *GaryD.Olson@usda.gov.* Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; telephone:
(202)720-2491, Fax:
(202)720-8938, or E-mail: *Jay.Guerber@usda.gov.* SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Agreement No. 97 and Marketing Order No. 948, both as amended (7 CFR part 948), regulating the handling of potatoes grown in Colorado, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” USDA is issuing this rule in conformance with Executive Order 12866. This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the order now in effect, Colorado potato handlers are subject to assessments. Funds to administer the order are derived from such assessments. For the 2005-2006 fiscal period, an assessment rate of $0.02 per hundredweight of potatoes handled was approved by USDA to continue in effect indefinitely unless modified, suspended, or terminated. This action suspends the assessment rate for the 2006-2007 fiscal period, which began July 1, 2006, and will continue in effect until reinstated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. This rule continues in effect the action that suspended § 948.215 of the order's rules and regulations. Section 948.215 established an assessment rate of $0.02 per hundredweight of Colorado potatoes handled for 2005-2006 and subsequent fiscal periods. Continuous assessment rates remain in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA. This rule continues in effect the action that suspended the $0.02 assessment rate for 2006-2007 and will remain in effect during subsequent fiscal periods until reinstated by USDA upon recommendation of the Committee. The order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. In addition, the order authorizes the use of monetary reserve funds to cover program expenses (§ 948.78). The members of the Committee are producers and handlers of Colorado potatoes. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input. The Committee met on May 11, 2006, and unanimously recommended 2006-2007 expenditures of $20,268 and suspension of the continuing assessment rate. In comparison, last year's budgeted expenditures were $20,368. The suspension of the assessment rate will allow the Committee to draw from the reserve to cover 2006-2007 expenditures. This action should effectively lower the reserve to within the program limit of approximately two fiscal periods' operational expenses (§ 948.78). The major expenditures recommended by the Committee for the 2006-2007 fiscal period include $8,610 for salary, $3,000 for office rent, $1,750 for office expenses, and $1,000 for utilities. These budgeted expenses are the same as those approved for the 2005-2006 fiscal period. As of July 1, 2005, the Committee had $49,237 in its reserve fund. With the 2006-2007 budget set at $20,268, the current maximum reserve permitted by the order is approximately $40,536 (approximately two fiscal periods' expenses (§ 948.78)). To meet 2006-2007 expenses the Committee plans on drawing approximately $15,814 from its reserve, and may additionally earn approximately $4,454 from interest and other income. Thus, with a suspended assessment rate, the Committee's reserve at the end of the 2006-2007 fiscal period could be reduced to approximately $33,423. This amount would be consistent with the order's requirements. The assessment rate suspension will continue in effect indefinitely until reinstated by USDA upon recommendation and information submitted by the Committee or other available information. Although this suspension of the continuing assessment rate is effective for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for reinstatement of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information such as the level of the budget and the monetary reserve to determine whether assessment rate reinstatement is needed and at what level. Further rulemaking will be undertaken as necessary. The Committee's 2006-2007 budget and those for subsequent fiscal periods will be reviewed and, as appropriate, approved by USDA. Final Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service
(AMS)has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility. Based on Committee data, there are 8 producers and 8 handlers in the production area subject to regulation under the order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $6,500,000. Based on the total number of Colorado Area No. 3 potato producers (8), 2004 fresh potato production of 557,826 hundredweight (Committee records), and the average 2004 producer price of $6.30 per hundredweight as reported by National Agricultural Statistics Service (NASS), average annual revenue per producer from the sale of potatoes can be estimated at approximately $439,288. In addition, based on Committee records and an estimated average 2004 f.o.b. price of $8.40 per hundredweight ($6.30 per hundredweight NASS producer price plus Committee estimated packing and handling costs of $2.10 per hundredweight), all of the Colorado Area No. 3 potato handlers ship under $6,500,000 worth of potatoes. In view of the foregoing, it can be concluded that the majority of the Colorado Area No. 3 potato producers and handlers may be classified as small entities. This rule continues in effect the action that suspended the continuing assessment rate established for the Committee and collected from handlers for the 2006-2007 and subsequent fiscal periods. Funds from the Committee's authorized reserve, along with interest and other income, will be adequate to cover budgeted expenses. As of July 1, 2005, the Committee had $49,237 in its reserve fund. With the 2006-2007 budget set at $20,268, the current maximum reserve permitted by the order is approximately $40,536 (approximately two fiscal periods' expenses (§ 948.78)). To meet 2006-2007 expenses the Committee plans on drawing approximately $15,814 from its reserve, and may additionally earn approximately $4,454 from interest and other income. Thus, with a suspended assessment rate, the Committee's reserve at the end of the 2006-2007 fiscal period could be reduced to approximately $33,423. This amount would be consistent with the order's requirements. The major expenditures recommended by the Committee for the 2006-2007 fiscal period include $8,610 for salary, $3,000 for office rent, $1,750 for office expenses, and $1,000 for utilities. These budgeted expenses are the same as those approved for the 2005-2006 fiscal period. For the 2005-2006 fiscal period, the Committee recommended a decrease in the assessment rate. However, the decreased assessment rate did not reduce the Committee's reserve as anticipated. Therefore, the Committee recommended suspending the continuing assessment rate to enable an increased draw on the reserve, thus maintaining the level of the reserve within program limits of approximately two fiscal periods' operational expenses. The Committee discussed alternatives to this rule, including alternative expenditure levels, but determined that the recommended expenses were reasonable and necessary to adequately cover program operations. Other assessment rates were considered, but not recommended because they would not reduce the reserve as quickly as suspension of the continuing assessment rate. This action continues in effect the action that suspended the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, suspending the assessment rate reduces the burden on handlers, and may reduce the burden on producers. In addition, the Committee's meeting was widely publicized throughout the Colorado potato industry and all interested persons were invited to attend and participate in the Committee's deliberations on all issues. Like all Committee meetings, the May 11, 2006, meeting was a public meeting and all entities, both large and small, were able to express views on the issues. This action imposes no additional reporting or recordkeeping requirements on either small or large Colorado potato handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. An interim final rule concerning this action was published in the **Federal Register** on July 18, 2006 (71 FR 40639). Copies of that rule were also mailed or sent via facsimile to all Area No. 3 Colorado potato handlers. Finally, the interim final rule was made available through the Internet by USDA and the Office of the Federal Register. A 60-day comment period was provided for interested persons to respond to the interim final rule. The comment period ended on September 18, 2006, and no comments were received. A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: *http://www.ama.usda.gov/fv/moab.html.* Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section. After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act. List of Subjects in 7 CFR Part 948 Marketing agreements, Potatoes, Reporting and recordkeeping requirements. PART 948—IRISH POTATOES GROWN IN COLORADO Accordingly, the interim final rule amending 7 CFR part 948 which was published at 71 FR 40639 on July 18, 2006, is adopted as a final rule without change. Dated: November 14, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E6-19464 Filed 11-16-06; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 993 [Docket No. FV06-993-1 FR] Dried Prunes Produced in California; Decreased Assessment Rate AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This rule decreases the assessment rate established for the Prune Marketing Committee (committee) under Marketing Order No. 993 for the 2006-07 and subsequent crop years from $0.65 to $0.40 per ton of salable dried prunes. The committee locally administers the marketing order which regulates the handling of dried prunes produced in California. Assessments upon dried prune handlers are used by the committee to fund reasonable and necessary expenses of the program. The crop year begins August 1 and ends July 31. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated. DATES: *Effective Date:* November 20, 2006. FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, Terry Vawter, Marketing Specialist, or Kurt Kimmel, Regional Manager, California Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA; Telephone:
(559)487-5901; Fax
(559)487-5906, or E-mail: *Toni.Sasselli@usda.gov, Terry.Vawter@usda.gov,* or *Kurt.Kimmel@usda.gov.* Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone:
(202)720-2491, Fax:
(202)720-8938, or E-mail: *Jay.Guerber@usda.gov.* SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Agreement No. 110 and Marketing Order No. 993, both as amended (7 CFR part 993), regulating the handling of dried prunes grown in California, hereinafter referred to as the “order.” The marketing agreement and order are effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Department of Agriculture
(USDA)is issuing this rule in conformance with Executive Order 12866. This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, California dried prune handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable dried prunes beginning August 1, 2006, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. This rule decreases the assessment rate established for the committee for the 2006-07 and subsequent crop years from $0.65 to $0.40 per ton of salable dried prunes handled. The California dried prune marketing order provides authority for the committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the committee are producers and handlers of California dried prunes. They are familiar with the committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in at least one public meeting. Thus, all directly affected persons have an opportunity to participate and provide input. For the 2005-06 and subsequent crop years, the committee recommended, and USDA approved, an assessment rate that would continue in effect from crop year to crop year unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committee or other information available to USDA. The committee met on June 29, 2006, and unanimously recommended a decreased assessment rate of $0.40 per ton of salable dried prunes and expenditures totaling $77,215 for the 2006-07 crop year. In comparison, last year's approved expenditures were $89,090. The $0.40 per ton assessment rate is $0.25 lower than the 2005-06 rate. The committee recommended a lower assessment rate based on an estimated production of 145,000 tons of salable dried prunes. At the decreased assessment rate, the assessment income for the 2006-07 crop year should be $58,000. The committee has $19,215 of excess assessment income available and those funds plus assessment income should be adequate to cover its estimated expenses of $77,215. The major expenditures recommended by the committee for the 2006-07 crop year include $48,405 for personnel salaries, $15,645 for operating expenses, and $13,165 for contingencies. For the 2005-06 crop year, the committee's budgeted expenses for these items were $45,945, $16,755, and $26,390, respectively. The assessment rate recommended by the committee was derived by dividing the handler assessment revenue needed to meet expenses by the estimated salable tons of California dried prunes. Dried prune production for the year is estimated to be 145,000 salable tons, which should provide $58,000 in assessment income. Income derived from handler assessments plus excess funds from the 2005-06 crop year should be adequate to cover budgeted expenses. The committee is authorized under § 993.81(c) of the order to use excess assessment funds from the 2005-06 crop year (estimated at $19,215) for up to 5 months beyond the end of the crop year to meet 2006-07 crop year expenses. At the end of the 5 months, the committee must either refund or credit excess funds to handlers. The assessment rate will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committee or other available information. Although this assessment rate will be in effect for an indefinite period, the committee will continue to meet prior to or during each crop year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of committee meetings are available from the committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The committee's 2006-07 budget and those for subsequent crop years will be reviewed and, as appropriate, approved by USDA. Final Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service
(AMS)has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility. There are approximately 1,100 producers of dried prunes in the production area and approximately 22 handlers subject to regulation under the marketing order. The Small Business Administration (13 CFR 121.201) defines small agricultural producers as those having annual receipts less than $750,000, and small agricultural service firms as those whose annual receipts are less than $6,500,000. An estimated 1,068 of the 1,100 producers (97.1 percent) have incomes of less than $750,000 and would be considered small producers. Fourteen of the 22 handlers (63.6 percent) have incomes from handling prunes of less than $6,500,000 and could be considered small handlers. Therefore, the majority of handlers and producers of California dried prunes may be classified as small entities. This rule decreases the assessment rate established for the committee and collected from handlers for the 2006-07 and subsequent crop years from $0.65 to $0.40 per ton of salable dried prunes. The committee met on June 29, 2006, and unanimously recommended a 2006-07 total budget of $77,215 and a decreased assessment rate of $0.40 per ton of salable dried prunes. The recommended budget of $77,215 for the 2006-07 crop year is smaller than the budgets in previous crop years. The $0.40 per ton assessment rate is $0.25 lower than the 2005-06 rate. The quantity of salable dried prunes for the 2006-07 crop year is estimated at 145,000 tons, compared to 94,402 tons for the 2005-06 crop year. Prior to arriving at its budget of $77,215, the committee considered information from various sources, including the committee's Executive Subcommittee. Alternative assessment rates, including the rate currently in effect, and different expenditure levels were discussed by the subcommittee and the committee. An alternative to this action would be to continue with the $0.65 per ton assessment rate. However, an assessment rate of $0.40 per ton of salable dried prunes and excess funds from the 2005-06 crop year will provide enough income to fund the committee's operations. Therefore, the committee agreed that $0.40 per ton of salable dried prunes is an acceptable assessment rate. Section 993.81(c) of the order provides the committee the authority to use excess assessment funds from the 2005-06 crop year (estimated at $19,215) for up to 5 months beyond the end of the crop year to meet 2005-06 crop year expenses. At the end of the 5 months, the committee must either refund or credit excess funds to handlers. A review of historical information and preliminary data pertaining to the 2006-07 crop year indicates that the producer price for the 2006-07 crop year is expected to average between $1,500 and $1,600 per ton of salable dried prunes. Based on an estimated 145,000 salable tons of dried prunes, assessment revenue as a percentage of producer revenue during the 2006-07 crop year is expected to be between .025 and .027 percent. This action decreases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the assessment rate reduces the burden on handlers, and may reduce the burden on producers. In addition, the committee's meeting was widely publicized throughout the California dried prune industry and all interested persons were invited to attend the meeting and participate in committee deliberations on all issues. Like all committee meetings, the June 29, 2006, meeting was public and all entities, both large and small, were encouraged to express views on this issue. This rule imposes no additional reporting or recordkeeping requirements on either small or large California dried prune handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. The AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. A proposed rule concerning this action was published in the **Federal Register** on September 22, 2006. Copies of the proposed rule were also mailed or sent via facsimile to all dried prune handlers. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 30-day comment period ending October 23, 2006, was provided for interested persons to respond to the proposal. One comment was received. The commenter was of the view that the rule was confusing. We disagree. This action is similar to previous actions published in the **Federal Register** concerning assessments on handlers under marketing order programs. Accordingly, no changes will be made to the proposed rule based on the comment received. A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: *http://www.ams.usda.gov/fv/moab/html.* Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section. After consideration of all relevant material presented, including the information and recommendation submitted by the committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act. Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the **Federal Register** because the crop year began on August 1, 2006, and handlers are already receiving 2006-07 crop dried prunes from growers. The decreased assessment rate applies to all dried prunes received during the 2006-07 year and subsequent seasons, and this action reduces the assessment rate. Further, handlers are aware of this rule which was unanimously recommended at a public meeting. Also, a 30-day comment period was provided for in the proposed rule. List of Subjects in 7 CFR Part 993 Marketing agreements, Plums, Prunes, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, 7 CFR part 993 is amended as follows: PART 993—DRIED PRUNES PRODUCED IN CALIFORNIA 1. The authority citation for 7 CFR part 993 continues to read as follows: Authority: 7 U.S.C. 601-674. 2. Section 993.347 is revised to read as follows: § 993.347 Assessment rate. On and after August 1, 2006, an assessment rate of $0.40 per ton of salable dried prunes is established for California dried prunes. Dated: November 14, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E6-19463 Filed 11-16-06; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Parts 91, 121, 125, and 135 [Docket No. FAA-2006-25334; Amendment Nos. 91-292; 121-326; 125-51; and 135-106] RIN 2120-AI76 Additional Types of Child Restraint Systems That May Be Furnished and Used on Aircraft AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Disposition of comments on final rule. SUMMARY: On July 14, 2006, the Federal Aviation Administration
(FAA)amended certain operating regulations to allow passengers or aircraft operators to furnish and use more types of Child Restraint Systems
(CRS)on aircraft. The rule allowed the use of CRSs that the FAA approves under the aviation standards of Technical Standard Order C-100b, Child Restraint Systems. In addition, the rule allowed the use of CRSs approved by the FAA under its certification regulations regarding the approval of materials, parts, processes, and appliances. The intended effect of the rule was to increase the number of CRS options that are available for use on aircraft, while maintaining safe standards for certification and approval. This action is a summary and disposition of comments received on the July 14, 2006 final rule. ADDRESSES: The complete docket for the final rule on Additional Types of Child Restraint Systems that May be Furnished and Used on Aircraft may be examined at the Dockets Office on the plaza level of the NASSIF Building at the U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. You may review the public docket containing comments to these regulations in person in the Dockets Office between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. Also, you may review public dockets on the Internet at *http://dms.dot.gov* . FOR FURTHER INFORMATION CONTACT: Nancy Lauck Claussen, Federal Aviation Administration, Flight Standards Service, Air Transportation Division (AFS-200), 800 Independence Avenue, SW., Washington, DC 20591; Telephone 202-267-8166, E-mail *nancy.l.claussen@faa.gov* . SUPPLEMENTARY INFORMATION: Background August 26, 2005 Final Rule On August 26, 2005, the FAA published a final rule that amended its operating regulations to allow the use of CRSs that are approved by the FAA through Type Certificate (TC), Supplemental Type Certificate (STC), or Technical Standard Order
(TSO)(70 FR 50902). The August 26, 2005 final rule allowed an operator to provide these CRSs. It did not allow passengers to furnish and use a CRS approved through TC, STC, or TSO. This is in contrast to CRSs that meet Federal Motor Vehicle Safety Standard (FMVSS) No. 213 or the standards of the United Nations, or are approved by a foreign government, which passengers may furnish and use on aircraft. The FAA received 16 comments on the August 26, 2005, final rule. The overwhelming majority of commenters requested that the FAA amend the August 26, 2005 Final Rule to allow passengers, in addition to aircraft operators, to furnish and use CRSs approved by the FAA. July 14, 2006 Final Rule After reviewing the comments to the August 26, 2005 final rule, the FAA decided to amend its operating rules to allow both passengers and aircraft operators to furnish and use CRSs that the FAA has approved under 14 CFR 21.305(d) and TSO C-100b. We published another final rule on July 14, 2006 (71 FR 40003). The July 14, 2006 final rule amendments were similar to provisions in the current rules that allow passengers and aircraft operators to furnish and use CRSs that meet FMVSS No. 213 or the standards of the United Nations, or are approved by a foreign government. Discussion of Comments The FAA received 16 comments on the July 14, 2006 final rule. Fifteen comments were from individuals and one was from the Air Transport Association (ATA)/United Airlines. All of the comments were positive. Many of the commenters noted and appreciated the FAA's attempt to be responsive to comments previously submitted on the August 26, 2005 final rule. Many of the commenters also noted positively that the final rule would allow passengers to furnish and use the AMSAFE CAReS CRS, which the FAA referenced in the July 14, 2006 final rule as an example of one CRS that the FAA may approve through the § 21.305(d) approval process. Some commenters also noted that the final rule would serve to encourage innovative technology in the area of child restraint and was in the best interests of safety, economy, children, parents, the traveling public, and air carriers. In addition, ATA noted it would “be beneficial for the carriers and the passengers to be able to see the list and images of the TSO C-100b approved CRS.” The FAA maintains a list of all authorized TSO Holders on its public Web site ( *http://www.airweb.faa.gov/Regulatory_and_Guidance_Library/rgTSO.nsf/MainFrame?OpenFrameSet* ). Information regarding any TSO holders will be posted on our Web site. Conclusion After consideration of the comments submitted in response to the final rule, the FAA has determined that no further rulemaking action is necessary. Amendment Nos. 91-292, 121-326, 125-51, and 135-106 remain in effect as adopted. Issued in Washington, DC, on November 7, 2006. James J. Ballough, Director, Flight Standards Service. [FR Doc. E6-19412 Filed 11-16-06; 8:45 am] BILLING CODE 4910-13-P SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404 and 416 [Docket No. SSA-2006-0101] RIN 0960-AE93 Exemption of Work Activity as a Basis for a Continuing Disability Review AGENCY: Social Security Administration (SSA). ACTION: Final rules. SUMMARY: We are publishing these final rules to amend our regulations to carry out section 221(m) of the Social Security Act (the Act). Section 221(m) affects our rules for when we will conduct a continuing disability review if you work and receive benefits under title II of the Act based on disability. (We interpret this section to include you if you receive both title II disability benefits and title XVI (Supplemental Security Income (SSI)) payments based on disability.) It also affects our rules on how we evaluate work activity when we decide if you have engaged in substantial gainful activity for purposes of determining whether your disability has ended. In addition, section 221(m) of the Act affects certain other standards we use when we determine whether your disability continues or ends. We are also amending our regulations concerning how we determine whether your disability continues or ends. These revisions will codify our existing operating instructions for how we consider certain work at the last two steps of our continuing disability review process. We are also revising our disability regulations to incorporate some rules which are contained in another part of our regulations and which apply if you are using a ticket under the Ticket to Work and Self-Sufficiency program (the Ticket to Work program). In addition, we are amending our regulations to eliminate the secondary substantial gainful activity amount that we currently use to evaluate work you did as an employee before January 2001. DATES: These rules are effective December 18, 2006. FOR FURTHER INFORMATION CONTACT: Kristine Erwin-Tribbitt, Policy Analyst, Office of Program Development and Research, Social Security Administration, 6401 Security Boulevard, Baltimore, Maryland 21235-6401. Call
(410)965-3353 or TTY
(410)966-5609 for information about these final rules. For information on eligibility or filing for benefits, call our national toll-free number 1-(800) 772-1213 or TTY 1-(800) 325-0778. You may also contact Social Security Online at *http://www.socialsecurity.gov/* . SUPPLEMENTARY INFORMATION: Electronic Version Access 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.* What is the purpose of these final rules? We are revising our disability regulations to carry out section 221(m) of the Act. The changes will apply to you if you are a working beneficiary who is entitled to Social Security disability benefits under title II of the Act and you have received such benefits for at least 24 months. If you are a person who meets these requirements, we are revising our rules on when we will start a continuing disability review (specifically, a medical continuing disability review or a “medical review”) to decide whether you are still disabled. In addition, we are amending our rules to provide that, under the medical improvement review standard sequential evaluation process, we will not consider the activities you perform in your work if they support a finding that you are no longer disabled. We are revising our regulations to provide that we will not use the activities you perform in work to support a finding that you are no longer disabled when deciding if the work you do shows that you are able to perform substantial gainful activity. Specifically we will not compare your work activity to that of unimpaired persons in your community who are doing the same or similar work as their means of livelihood. Also, if your earnings are less than the substantial gainful activity limit, we will not make a determination that your work is worth more than the substantial gainful activity amount. We are also making certain changes to our regulations that may apply to you even if you are not affected by section 221(m) of the Act. We are clarifying how we consider work activity at the last two steps of the medical improvement review standard sequential evaluation process when we determine if you are still disabled. The rules will codify the interpretations of our standards for determining whether disability continues under title II and title XVI that we have been using in operating instructions for some time. These rules also provide that these interpretations apply when we determine whether you are entitled to expedited reinstatement of benefits under section 223(i) of the Act or eligible for expedited reinstatement of benefits under section 1631(p) of the Act. The changes affect you if you are entitled to Social Security benefits based on disability under title II or you are an adult who is eligible for SSI payments based on disability under title XVI and you work during your current period of entitlement or eligibility based on disability. Also, the rules affect you if you request reinstatement of benefits. We are also incorporating into our disability regulations some rules which are contained in another part of our regulations and which apply to you if you are using a ticket under the Ticket to Work program. In addition, we are revising our rules for evaluating work activity you performed as an employee prior to January 2001 to eliminate the use of the secondary substantial gainful activity amount. We are also making some minor clarifications and corrections of other rules. Ticket to Work and Work Incentives Advisory Panel During the preparation of these rules, we consulted with the Ticket to Work and Work Incentives Advisory Panel. What do we mean by “final rules” and “existing rules”? For clarity, we use the term “final rules” in this preamble to refer to the changes we are making to our regulations in this publication. We also use the term “new” or “amended” rules to refer to these changes. We use the term “existing rules” to refer to the rules that will be changed by these final rules. When will we start to use these final rules? We will start to use these final rules on their effective date. We will continue to use our existing rules until the effective date of these final rules. As is our usual practice when we make changes to our regulations, we will apply these final rules in determinations or decisions that we make on or after the effective date of these final rules. When these final rules become effective, we will apply them to cases that are pending in our administrative review process, including cases on remand from a Federal court. What are continuing disability reviews and when do we start them under existing rules? After we find that you are disabled, we are required by the Act and our regulations to periodically reevaluate whether you continue to meet the disability requirements of the Act. (See sections 221(i), 1631(d)(1) and 1633 of the Act, and §§ 404.1589 and 416.989 of our regulations.) We call this evaluation a continuing disability review. There are two main types of continuing disability review:
(1)Work continuing disability reviews (sometimes referred to as a “work reviews”) in which we mainly examine your earnings, and
(2)medical continuing disability reviews (sometimes referred to as “medical reviews”) in which we examine your medical improvement and ability to function. In §§ 404.1590 and 416.990 of our regulations, we explain that, if you are entitled to or eligible for disability benefits, you must undergo regularly scheduled continuing disability reviews. We also explain that in some circumstances, we may start a continuing disability review before the time of your regularly scheduled continuing disability review. In §§ 404.1590(b) and 416.990(b) of our regulations, we list circumstances in which we will start a continuing disability review. In most cases, we start a continuing disability review because, under the Act and our regulations, we must evaluate your impairment(s) from time to time to determine if you are still entitled to Social Security disability benefits or eligible for SSI payments based on disability or blindness. If you are entitled to or eligible for such benefits, you are subject to regularly scheduled continuing disability reviews at intervals ranging from 6 months to 7 years depending on whether, and the degree to which, we expect your impairment(s) to improve. We may also start a continuing disability review because you returned to work, and at other times when we receive information that raises questions about whether you are still under a disability, such as when you complete vocational rehabilitation services. For more information about how we decide the frequency of continuing disability reviews and when we may start a continuing disability review at other than scheduled times, see §§ 404.1590 and 416.990 of our existing regulations. Under existing rules, how do we determine whether your disability continues or ends? When we do a continuing disability review to determine whether your disability continues or ends, we use the rules in § 404.1594 if you are a Social Security disability beneficiary and the rules in § 416.994 if you are an adult who is eligible for SSI payments based on disability. In general, these rules provide that we must determine if there has been any medical improvement in your impairment(s) and, if so, whether this medical improvement is related to your ability to work. The rules in these sections also provide some exceptions to this medical improvement review standard. In § 404.1594(f), we provide an eight-step sequential evaluation process that we use when we determine whether you are still disabled under title II of the Act. We generally follow the steps in order. However, we may also find that your disability has ended because of one of several exceptions to the medical improvement review standard described in §§ 404.1594(d) and (e). (Since the exceptions are in the statute and are not affected by section 221(m) or the provisions of these final rules, we do not summarize them below.) The eight steps are as follows: 1. Are you engaging in substantial gainful activity? If you are (and any applicable trial work period has been completed), we will find that your disability ended. 2. If you are not, do you have an impairment or combination of impairments that meets or equals the severity of an impairment in our Listing of Impairments? If you do, we will generally find that your disability continues. 3. If you do not, has there been medical improvement? If there has been medical improvement as shown by a decrease in the medical severity of your impairment(s), we go on to step 4. If there is no medical improvement in your impairment(s), we skip to step 5. 4. If there has been medical improvement, we must determine whether it is related to your ability to do work. If medical improvement is not related to your ability to do work, we go on to step 5. If medical improvement is related to your ability to do work, we skip to step 6. 5. If we found at step 3 that there has been no medical improvement, or if we found at step 4 that the medical improvement is not related to your ability to work, we consider whether one of the exceptions to medical improvement applies in your case. If none of the exceptions to medical improvement applies, we find that your disability continues. However, if one of the exceptions applies, we will find either that your disability has ended or that we need to go on to step 6, depending on the exception that applies in your case. 6. If medical improvement is related to your ability to do work, or if any one of certain exceptions to medical improvement applies, we will determine whether all of your current impairments in combination are “severe” (see § 404.1521 of our regulations). If you do not have a “severe” impairment(s), we will find that your disability has ended. 7. If your impairment(s) is “severe,” we will assess your residual functional capacity based on all your current impairments and consider whether you can still do work you have done in the past. If you can do such work, we will find that your disability has ended. 8. If you are not able to do work you have done in the past, we will consider one final step. Given the residual functional capacity assessment and considering your age, education, and past work experience, can you do other work? If you can, disability will be found to have ended. If you cannot, disability will be found to continue. We also use this medical improvement review standard to review your continuing eligibility if you are an adult who receives SSI payments based on disability. The sequential evaluation process is in § 416.994(b)(5) of our regulations, but it has only seven steps instead of eight. The seven steps are the same as the second through eighth steps of § 404.1594(f). We do not have a step for you if you are engaging in substantial gainful activity because of an SSI work incentive provision in section 1619 of the Act. What is substantial gainful activity? The term “substantial gainful activity” means work activity that involves significant physical or mental activities and that is done for pay or profit. Work activity is gainful if it is the kind of work usually performed for pay or profit, whether or not a profit is realized. Under existing rules, how do we evaluate your work as an employee to determine if you are engaging in substantial gainful activity? If you work as an employee, we generally use earnings guidelines to evaluate your work activity to decide whether the work you do is substantial gainful activity. If your average monthly earnings are more than the primary substantial gainful activity amount ( *i.e.* , $860 per month for non-blind individuals in 2006), we ordinarily consider that you have engaged in substantial gainful activity. If your average monthly earnings from your work activity are equal to or less than the primary substantial gainful activity amount for the year(s) in which you work, the way we evaluate your work activity under our existing rules generally depends on whether the work occurred in or after January 2001 or before January 2001. For work occurring between January 1, 1990 and January 1, 2001, if your average monthly earnings from your work activity were less than $300, we generally consider that your earnings show that you have not engaged in substantial gainful activity. With certain exceptions, we generally do not consider other information beyond your earnings. We refer to this $300 earnings guideline as the secondary substantial gainful activity amount to distinguish it from the primary substantial gainful activity amount. If your earnings were between the primary ($700 per month for work occurring between July 1, 1999 and January 1, 2001) and secondary substantial gainful activity levels, our rules provide that such earnings are neither high nor low enough to show whether you have engaged in substantial gainful activity. In these circumstances, we use separate criteria to evaluate your work as an employee to determine if you engaged in substantial gainful activity. If you worked in a sheltered workshop or comparable facility before January 1, 2001, earnings not greater than the primary substantial gainful activity amount ordinarily establish that the work was not substantial gainful activity. Beginning with January 2001, if your average monthly earnings are equal to or less than the primary substantial gainful activity amount, we generally consider that your earnings show that you have not engaged in substantial gainful activity. Except in certain circumstances, we generally do not consider other information in addition to your earnings. *Example:* You worked from July 2000 through June 2001, with earnings of $600 per month. We use different criteria for evaluating your work activity from January 2001 through June 2001 and from July 2000 through December 2000 to determine if you engaged in substantial gainful activity. For work activity from January 2001 through June 2001, your average monthly earnings are less than the primary substantial gainful activity amount ($740 per month for work occurring between January 1, 2001 and January 1, 2002). We will generally consider that your earnings show that you have not engaged in substantial gainful activity. For work activity from July 2000 through December 2000, your earnings are between the primary ($700 per month for work occurring between July 1, 1999 and January 1, 2001) and secondary ($300 per month for work occurring between January 1, 1990 and January 1, 2001) substantial gainful activity levels. We consider that your earnings are neither high nor low enough to show whether you have engaged in substantial gainful activity. We will use separate criteria, such as the work you did, the hours you worked, and the amount of assistance you received, to evaluate your work to determine if you engaged in substantial gainful activity. Under existing rules, are earnings guidelines the only factor used to determine if your work as an employee is substantial gainful activity? As we have indicated above, in some instances, earnings guidelines are not the only factor we used to determine if the work you are performing is substantial gainful activity. In some cases we will consider other information if there is evidence which shows that you may have engaged in substantial gainful activity. In these instances, we evaluate your work activity under the criteria described below to determine if you have engaged in substantial gainful activity. We may determine that you have engaged in substantial gainful activity if your work activity satisfies either of the following set of criteria: • Your work is comparable to that of unimpaired people in your community who are doing the same or similar occupations as their means of livelihood, taking into account the time, energy, skill, and responsibility involved in the work; or • Your work, although significantly less than that done by unimpaired people, is clearly worth more than the substantial gainful activity amount, according to pay scales in your community. Under existing rules, what factors are used to determine if your work as a self-employed person is substantial gainful activity? We consider your activities and their value to your business to decide whether you have engaged in substantial gainful activity. To determine whether you have engaged in substantial gainful activity, we apply three tests. If you have not engaged in substantial gainful activity under test one, then we will consider tests two and three. The tests are as follows:
(1)*Test One:* You have engaged in substantial gainful activity if you render services that are significant to the operation of the business and receive a substantial income from the business. (See § 404.1575(b) and
(c)for an explanation of what we mean by significant services and substantial income for purposes of this test.)
(2)*Test Two:* You have engaged in substantial gainful activity if your work activity, in terms of factors such as hours, skills, energy output, efficiency, duties, and responsibilities, is comparable to that of unimpaired individuals in your community who are in the same or similar businesses as their means of livelihood.
(3)*Test Three:* You have engaged in substantial gainful activity if your work activity, although not comparable to that of unimpaired individuals, is clearly worth more than the substantial gainful activity amount when considered in terms of its value to the business, or when compared to the salary that an owner would pay to an employee to do the work you are doing. Under existing rules, when will your performance of substantial gainful activity affect whether you continue to be disabled? If you are entitled to Social Security benefits based on disability and you are working, the work you do may show that you are able to do substantial gainful activity and are, therefore, no longer disabled. If you are engaging in substantial gainful activity, before we determine whether you are no longer disabled because of your work activity, we will consider whether you are entitled to a trial work period under § 404.1592. We will find that your disability has ceased in the month in which you demonstrated your ability to engage in substantial gainful activity following completion of any applicable trial work period. See § 404.1594(d)(5) and (f)(1) of our regulations. Our determination that your disability has ceased because you demonstrated the ability to engage in substantial gainful activity is not a determination of whether you continue to have a disabling impairment (see § 404.1511) for purposes of eligibility for a reentitlement period (see § 404.1592a) following completion of a trial work period. If you work during your reentitlement period and we determine that your disability has ceased because your work is substantial gainful activity, we will stop your benefits. If you later stop engaging in substantial gainful activity and you are still within your reentitlement period, we will start paying your benefits again. In determining whether you do substantial gainful activity in a month for purposes of stopping or starting benefits during the reentitlement period, we will consider your work in, or earnings for, that month (see § 404.1592a(a)(2)(i)). If you are receiving SSI benefits based on disability, your performance of substantial gainful activity does not affect your disability status for purposes of eligibility for SSI benefits. This is because of an SSI work incentive provision in section 1619 of the Act. What does section 221(m) of the Act provide? Above, we described what typically happens during a continuing disability review. However, section 221(m) of the Act provides for special exceptions for specified individuals under specific circumstances. Section 221(m) contains two paragraphs. Paragraph
(1)provides that, if you are entitled to disability insurance benefits under section 223 of the Act or to other monthly insurance benefits based on disability under section 202 of the Act, 1 and you have received such benefits for at least 24 months: 1 The other monthly insurance benefits based on disability under section 202 of the Act are: • Child's insurance benefits based on disability under section 202(d); • Widow's insurance benefits based on disblity under section 202(c); and • Widower's insurance benefits based on disability under section 202(f). • We may not schedule a continuing disability review for you solely as a result of your work activity (section 221(m)(1)(A)); • We may not use your work activity as evidence that you are no longer disabled (section 221(m)(1)(B)); and • If you stop working, we may not presume that you are unable to work just because you stopped working (section 221(m)(1)(C)). Paragraph
(2)explains that, if you are an individual described in paragraph (1): • You are still subject to regularly scheduled continuing disability reviews that are not triggered by work (section 221(m)(2)(A)); and • We may still terminate your benefits if you have earnings that exceed the level of earnings that represent substantial gainful activity (section 221(m)(2)(B)). What revisions are we making, and why? As a result of section 221(m) of the Act, we are revising several of our rules in subparts J and P of part 404 and subparts I and N of part 416 of our regulations: • To explain that we will not start a continuing disability review based solely on your work activity if you are covered by section 221(m) of the Act; • To explain how we consider activities from work in continuing disability reviews if you are covered by section 221(m); and • To explain how we evaluate your work when we decide whether you have engaged in substantial gainful activity for purposes of determining whether your disability has ceased, if you are covered by section 221(m). In addition, we are also revising several of our rules in subparts J and P of part 404 and subparts I and N of part 416 of our regulations: • To incorporate rules about not starting a continuing disability review that are contained in another part of our regulations and apply to you if you are using a ticket under the Ticket to Work program; • To clarify how we determine continuing disability at the last two steps of the medical improvement review standard sequential evaluation process; • To explain that our action to start or to discontinue a continuing disability review is not an initial determination; and • To eliminate the use of the secondary substantial gainful activity amount for evaluating work done by an employee before January 2001. Although section 221(m) applies only if you receive disability benefits under title II of the Act, we are making changes to our title XVI regulations that will apply to you if: • You are entitled to Social Security disability benefits under title II of the Act; • You are subject to the provisions of section 221(m) because you have received the Social Security disability benefits for at least 24 months; and • You are also eligible for SSI benefits based on disability or blindness under title XVI of the Act. If you meet these criteria, we will use the same rules for starting continuing disability reviews under title XVI as we will use under title II. Also, when we do conduct a continuing disability review, we will use the same rules on how we consider the activities from your work in a continuing disability review under title XVI as we will use in a continuing disability review under title II. If we did not make these changes to the title XVI regulations, we would have rules under which we could start a continuing disability review based solely on your work activity to determine whether your disability continues or ends under title XVI even though we could not start a continuing disability review on that basis to determine whether your disability continues or ends under title II. Also, when we do conduct continuing disability reviews for both title II and title XVI purposes, we would have different rules on how we consider the activities from your work for title II and title XVI purposes. As a result, we could determine that your disability continues under title II but that your disability has ended under title XVI. For these reasons, we are making the aforementioned changes to the title XVI regulations that will apply to you if you are a recipient of SSI benefits based on disability or blindness and also are a Social Security disability beneficiary who is covered by section 221(m) of the Act. We concluded that this is a reasonable interpretation of the statute and the most logical, equitable, and administratively efficient way to implement section 221(m) if you receive both types of benefits. We do not interpret section 221(m) of the Act to apply to you if you are a recipient of SSI benefits only. Section 221(m) provides that, for you to be covered by that section, you must be entitled to and have received Social Security disability benefits under title II. Therefore, these final rules do not extend the provisions of section 221(m) to you if you receive only SSI disability or blindness payments. We are also revising our disability regulations to include rules that are already in subpart C of part 411 of our regulations and that apply to you if you are in the Ticket to Work program and using your ticket. These rules provide that we will not start a continuing disability review for you during the period in which you are using a ticket. However, they also explain that we can still do a review to determine if your disability has ended under title II because you have demonstrated your ability to engage in substantial gainful activity, as defined in §§ 404.1571-404.1576 of our regulations. We are also clarifying in these final rules that if you are entitled to Social Security disability benefits under title II or eligible for SSI disability payments under title XVI, we will not consider the work that you are doing or have done during your current period of entitlement or eligibility based on disability to be past relevant work or past work experience at the last two steps of the applicable medical improvement review standard sequential evaluation process. We are also amending our rules to provide a comparable rule if you are requesting expedited reinstatement of benefits under section 223(i) or 1631(p) of the Act. The rule will apply at the last two steps to work you do during or after your previous period of entitlement or eligibility which terminated and which is the basis for your request for expedited reinstatement. The following is an explanation of the specific changes we are making and our reasons for making these changes. Sections 404.903 and 416.1403 Administrative Actions That Are Not Initial Determinations We are adding a new paragraph
(x)to § 404.903 and a new paragraph (a)(22) to § 416.1403 to explain that the action of starting or discontinuing a continuing disability review is not an initial determination. As explained in existing §§ 404.903 and 416.1403(a), administrative actions that are not initial determinations may be reviewed by us, but they are not subject to the administrative review process provided by subpart J of part 404 or subpart N of part 416 of our regulations, and they are not subject to judicial review. If we start a continuing disability review based solely on your work activity, we will provide an opportunity for you to request that we review that action if you believe that you are protected by the section 221(m)(1)(A) provision and that the medical review should not have been started. We will inform you of this opportunity when we send you a letter telling you that we are starting a medical continuing disability review. If we review the action and conclude that the initiation of the continuing disability review was in error because section 221(m)(1)(A) of the Act applies, we will discontinue processing the continuing disability review. In addition, as we explain later in this preamble, if we process the continuing disability review to completion and make a medical cessation determination, we are amending our rules in §§ 404.1590 and 416.990 to provide a procedure under which we will vacate the medical cessation determination if, within a prescribed time period, we receive evidence from you that establishes that the start of your continuing disability review was in error because of section 221(m)(1)(A) of the Act. Sections 404.1574 and 416.974 Evaluation Guides if You Are an Employee We are revising §§ 404.1574(b) and 416.974(b) to remove the rules relating to the use of the secondary substantial gainful activity amount for evaluating work activity you performed as an employee prior to January 2001. This change will eliminate the difference that exists between the way we evaluate work you performed as an employee before January 2001 and the way we evaluate work you performed as an employee in months beginning with January 2001 in cases in which your average monthly earnings from your work are equal to or less than the applicable primary substantial gainful activity amount. On December 29, 2000, we published final rules in the **Federal Register** (65 FR 82905) to discontinue the use of a secondary substantial gainful activity amount effective for work activity in months beginning with January 2001. We made this change because, as we explained in the preamble to those final rules, “our experience suggests that the secondary substantial gainful activity amount has not been as useful a tool as we would have liked” (65 FR 82906). We indicated that our experience suggests that few applicants and beneficiaries would be affected by the change because few employees have been found to have performed substantial gainful activity on the basis of the secondary rules except in those circumstances that would otherwise warrant development of other information beyond earnings. We also explained that “[d]iscontinuing these complex secondary guidelines will help simplify our rules and facilitate public understanding of the Social Security disability program as well as improve our work efficiency” (65 FR 82906). For these same reasons, and to provide consistent rules for considering earnings from your work as an employee, without regard to whether the work was performed before January 2001 or in or after January 2001, we are discontinuing the use of the secondary guidelines altogether. Under this change, if your average monthly earnings from work you performed as an employee before January 2001 are equal to or less than the applicable primary substantial gainful activity amount, we will consider your earnings in the same way we consider earnings from work performed by an employee in or after January 2001 that do not average more than the applicable primary substantial gainful activity amount. That is, we will generally consider that your earnings from your work will show that you have not engaged in substantial gainful activity without considering other information beyond your earnings. We will perform additional development beyond looking at earnings only when circumstances indicate that you may have been engaging in substantial gainful activity or might have been in a position to control when earnings are paid to you or the amount of wages paid to you (for example, if you work for a small corporation run by a relative). Using the facts from the “Example” set out earlier, the following illustrates how we will evaluate your work activity under these final rules, which eliminate the use of the secondary substantial gainful activity guidelines altogether. As in the “Example” above, you worked from July 2000 through June 2001, with earnings of $600 per month. For the entire period you worked, your average monthly earnings are less than the applicable primary substantial gainful activity amounts ($740 per month for work occurring between January 1, 2001 and January 1, 2002 and $700 per month for work occurring between July 1, 1999 and January 1, 2001). Therefore, we will generally consider that your earnings show that you have not engaged in substantial gainful activity. To make this change, we are eliminating the rules in existing §§ 404.1574(b) and 416.974(b) relating to the use of the secondary substantial gainful activity amount and the distinction between work performed before January 2001 and work performed in or after January 2001. We are replacing existing paragraphs (b)(3) through (b)(6) of §§ 404.1574 and 416.974 with a new paragraph (b)(3), Earnings that will ordinarily show that you have not engaged in substantial gainful activity. In new paragraph (b)(3), we are consolidating our existing rules that apply in cases in which average monthly earnings from work performed by an employee (including work performed in a sheltered workshop or comparable facility) in or after January 2001 are equal to or less than the applicable primary substantial gainful activity amount, and are extending the scope of these rules to cover work performed before January 2001 as well as work performed in or after January 2001. In a new paragraph (b)(3)(i), General, we state the general rule. We explain that if your average monthly earnings are equal to or less than the amount(s) determined under paragraph (b)(2) of § 404.1574 or § 416.974 for the year(s) in which you work, we will generally consider that the earnings from your work activity as an employee (including earnings from work in a sheltered workshop or comparable facility) will show that you have not engaged in substantial gainful activity. We explain that we will generally not consider other information in addition to your earnings except in the circumstances described in new paragraph (b)(3)(ii) of §§ 404.1574 and 416.974. In new paragraph (b)(3)(ii), When we will consider other information in addition to your earnings, we describe those circumstances in which we will ordinarily consider other information beyond your earnings. We explain that we will generally consider other information in addition to your earnings if there is evidence indicating that you may be engaging in substantial gainful activity or that you are in a position to control when earnings are paid to you or the amount of wages paid to you (for example, if you are working for a small corporation owned by a relative). We also include provisions in new paragraph (b)(3)(ii) that provide examples of other information we may consider. These latter provisions incorporate the provisions of existing paragraph (b)(6)(iii) of §§ 404.1574 and 416.974. In new paragraphs (b)(3)(ii)(A) and (B), we explain that other information we may consider includes, for example, whether
(A)Your work is comparable to that of unimpaired people in your community who are doing the same or similar occupations as their means of livelihood, taking into account the time, energy, skill, and responsibility involved in the work; and
(B)your work, although significantly less than that done by unimpaired people, is clearly worth the amounts shown in paragraph (b)(2) of § 404.1574 or § 416.974, according to pay scales in your community. The provisions of new §§ 404.1574(b)(3)(i) and
(ii)and 416.974(b)(3)(i) and
(ii)are based on the rules that are stated in the first sentence of existing paragraph (b)(3), the last sentence of existing paragraph (b)(4), existing paragraph (b)(5), and existing paragraphs (b)(6)(ii) and
(iii)of §§ 404.1574 and 416.974. In new § 404.1574(b)(3)(iii), we explain that, even if the circumstances described in new § 404.1574(b)(3)(ii) are present, we will not consider other information in addition to your earnings in evaluating the work you are doing or have done if:
(A)At the time you do the work, you are entitled to Social Security disability benefits and you have received such benefits for at least 24 months; and
(B)we are evaluating that work to consider whether you have engaged in substantial gainful activity or demonstrated the ability to engage in substantial gainful activity for the purpose of determining whether your disability has ceased because of your work activity. We include cross-references to the sections of our regulations that concern making substantial gainful activity determinations for purposes of determining whether your disability has ceased. Since new paragraphs (b)(3)(ii)(A) and
(B)require us to consider your work activities, we decided that we could no longer use (b)(3)(ii)(A) and (B)—based on section 221(m)(1)(B) of the Act—to decide that the work you do after you have received Social Security disability benefits for at least 24 months shows that you are able to engage in substantial gainful activity and are, therefore, no longer disabled. Therefore, in § 404.1574(b)(3), we have included a paragraph (b)(3)(iii), Special rule for considering earnings alone when evaluating the work you do after you have received social security disability benefits for at least 24 months, which provides an exception to the rule in § 404.1574(b)(3)(ii), discussed above. The exception will apply when we are evaluating the work that you perform while you are entitled to Social Security disability benefits and after you have received such benefits for at least 24 months and will apply to you only if you are covered by section 221(m) of the Act. The exception would apply only if we are evaluating that work to decide whether the work shows that you are able to engage in substantial gainful activity for the purpose of determining whether your disability has ceased because of your work activity. In this case, even if the circumstances described in new § 404.1574(b)(3)(ii) are present, we will not consider other information in addition to your earnings. Instead, we will apply the general rule described in new § 404.1574(b)(3)(i). That is, in the case described above, if your average monthly earnings from that work are equal to or less than the amount(s) determined under § 404.1574(b)(2) for the year(s) in which that work occurs, we will find that your earnings from that work will show that you have not engaged in substantial gainful activity. If you are entitled to Social Security disability benefits and you perform work as an employee after you have received such benefits for at least 24 months, section 221(m)(1)(B) of the Act provides that we may not consider information about the activities you perform in that work (such as the information described in new § 404.1574(b)(3)(ii)(A) and (B)) to determine that the work shows that you are able to engage in substantial gainful activity and are, therefore, no longer disabled, *i.e.* , that your disability has ceased. We may still consider your earnings from that work under the earnings guidelines to decide whether your earnings show that you have engaged in substantial gainful activity for the purpose of determining whether your disability has ceased. Also, we may still consider other information in addition to your earnings in the circumstances described in new § 404.1574(b)(3)(ii) to decide whether that work is substantial gainful activity for purposes other than the purpose of determining whether your disability has ceased. Therefore, after we have determined that your disability has ceased during the reentitlement period because you performed substantial gainful activity, we will continue to make substantial gainful activity determinations to decide whether benefits should be started or stopped for a subsequent month(s) during the reentitlement period and to decide when your entitlement to benefits terminates (see § 404.1592a(a)(2) and (3)). We may use the tests in § 404.1574(b)(3)(ii) that involve looking at your work activities in making these substantial gainful activity determinations because these determinations do not involve deciding that you are no longer disabled. Also, in new § 404.1574(b)(3), we include a paragraph (b)(3)(iv), When we consider you to have received social security disability benefits for at least 24 months. The provisions of paragraph (b)(3)(iv) apply for purposes of new paragraph (b)(3)(iii) of § 404.1574. In new § 404.1574(b)(3)(iv), we provide a definition of Social Security disability benefits and explain when we will consider you to have received such benefits for at least 24 months. In response to public comments we received on the proposed rules, we have modified the criteria relating to the 24-month requirement in these final rules. We have modified the criteria in § 404.1574(b)(3)(iv) of the final rules to provide that, if you are otherwise due a social security disability benefit for a month, but we withhold your benefit for that month to recover an overpayment, we will count that month toward the 24-month requirement. We provide that, in this situation, we will consider you to have constructively received a social security disability benefit for the month for purposes of the 24-month requirement. We are making similar changes in final §§ 404.1575(e)(2), 404.1590(i)(2)(i), and 416.990(i)(2)(i), which are described later in this preamble. In final § 404.1574(b)(3)(iv), we explain that we consider you to have received social security disability benefits for at least 24 months beginning with the first day of the first month following the 24th month for which you actually received Social Security disability benefits that you were due or constructively received such benefits. We state that the 24 months do not have to be consecutive. We explain that we do not count months for which you were entitled to benefits but for which you did not actually or constructively receive benefit payments. In addition, we explain that if you also receive SSI payments, months for which you received only SSI payments will not count for the 24-month requirement. We are including new paragraphs (b)(3)(iii) and
(iv)only in our revision of § 404.1574(b). We are not including similar provisions in our revision of § 416.974(b) because the performance of substantial gainful activity is not a basis for determining that disability has ceased under the SSI program. As we explain above, new paragraph (b)(3) of §§ 404.1574 and 416.974 will replace existing paragraphs (b)(3) through (b)(6) of these sections. As a consequence, we have made certain conforming changes to existing paragraphs (b)(1) and
(2)of §§ 404.1574 and 416.974. We are amending existing paragraph (b)(1) of §§ 404.1574 and 416.974 to remove references to paragraphs (b)(4), (5), and (6). We are revising the parenthetical phrase in the introductory text of existing paragraph (b)(2) of §§ 404.1574 and 416.974 to read, “(including earnings from work in a sheltered workshop or a comparable facility especially set up for severely impaired persons),” to incorporate the description of sheltered work contained in existing paragraph (b)(4) of these sections. Section 404.1575 Evaluation Guides if You Are Self-Employed If you are covered by section 221(m) of the Act and you are self-employed, we are revising our rules in existing § 404.1575 to explain how we will evaluate your work activity when deciding whether you have engaged in substantial gainful activity following the completion of a trial work period for purposes of determining if your disability has ceased. (We are not amending our rules in § 416.975 because your performance of substantial gainful activity does not affect your disability status for purposes of your continuing eligibility for SSI payments.) As we explained earlier, if you are self-employed, we consider three tests to determine if you have engaged in substantial gainful activity. Since the three tests require us to consider your activities at work and their value to your business, we decided that we could not use these tests to decide that the work you do after you have received Social Security disability benefits for at least 24 months shows that you are able to engage in substantial gainful activity and are, therefore, no longer disabled. Based on section 221(m)(1)(B) of the Act, we concluded that we needed to provide a different test for considering whether that work is substantial gainful activity for purposes of determining whether your disability has ceased. Therefore, we will use a new evaluation test for that purpose. We refer to this new test as the countable income test. To explain this new evaluation test and when we will apply it, we are revising existing paragraphs
(a)and
(c)of § 404.1575 and adding a new paragraph (e). We are retaining all of the provisions of existing paragraph (a). However, we are restructuring the paragraph. We made the first two sentences of existing paragraph
(a)the introductory text of paragraph
(a)of final § 404.1575. (We revised the first sentence of the paragraph to include a reference to new paragraph (e).) We included the remaining provisions of existing paragraph
(a)in a new paragraph (a)(2), General rules for evaluating your work activity if you are self-employed. Because of this change, we redesignated existing paragraphs (a)(1), (2), and
(3)of § 404.1575 as paragraphs (a)(2)(i), (ii), and (iii), respectively, of final § 404.1575. Following the first two sentences (the introductory text) of paragraph
(a)of final § 404.1575, we added a new paragraph (a)(1), How we evaluate the work you do after you have become entitled to disability benefits. In new § 404.1575(a)(1), we explain which rules we will use to evaluate your work activity if you are self-employed and you perform the work activity while you are entitled to Social Security disability benefits. (We explain that Social Security disability benefits means disability insurance benefits for a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability.) We explain that the way we will evaluate your work activity will depend on whether the work occurs before or after you have received Social Security disability benefits for at least 24 months and on the purpose of the evaluation. We explain in new § 404.1575(a)(1) that we will use the guides in new paragraph (e), which provide for the use of the countable income test, to evaluate the work activity you do after you have received such benefits for at least 24 months to determine whether you have engaged in substantial gainful activity for the purpose of determining whether your disability has ceased. In all other cases in which we evaluate your work activity as a self-employed person to make a substantial gainful activity determination, we will apply the guides in § 404.1575(a)(2) of these final rules. Section 404.1575(a)(2) of the final rules sets out the three tests we currently use to evaluate the work of a self-employed person. We explain in new § 404.1575(a)(1) that we will use the three tests described in § 404.1575(a)(2) to evaluate the work activity you do before you have received Social Security disability benefits for 24 months to determine if you have engaged in substantial gainful activity, regardless of the purpose of the evaluation. We also explain that, after we have determined that your disability has ceased during the reentitlement period because you performed substantial gainful activity, we will use the three tests to determine whether you are doing substantial gainful activity in subsequent months in or after your reentitlement period, whether your work activity occurs before or after you have received Social Security disability benefits for at least 24 months. After we have determined that your disability has ceased due to the performance of substantial gainful activity during the reentitlement period, we make substantial gainful activity determinations to decide whether benefits should be started or stopped for a subsequent month(s) during the reentitlement period and to decide when your entitlement to benefits terminates (see § 404.1592a(a)(2) and (3)). We may use the three tests that involve looking at work activity in making these substantial gainful activity determinations because these determinations do not involve deciding that you are no longer disabled. We are revising existing § 404.1575(c). In amended § 404.1575(c)(1), Determining countable income, we explain what deductions are applied to your net income to decide the amount of your income we use to determine if you have done substantial gainful activity. We explain that we refer to this amount as your countable income. In amended § 404.1575(c)(2), we explain when we consider your countable income to be substantial. In new § 404.1575(e), Special rules for evaluating the work you do after you have received social security disability benefits for at least 24 months, we explain the countable income test and when it applies. We explain that we will apply this test to evaluate the work you are doing or have done if, at the time you perform the work, you are entitled to Social Security disability benefits and you have received such benefits for at least 24 months. We explain that we will apply the test only when we are evaluating that work to consider whether you have engaged in substantial gainful activity or demonstrated the ability to engage in substantial gainful activity for the purpose of determining whether your disability has ceased because of your work activity. We explain that, under the countable income test, we will not consider the services you perform in that work to determine that the work you are doing shows that you are able to engage in substantial gainful activity and are, therefore, no longer disabled. However, we may consider the services you perform to determine that you are not doing substantial gainful activity. In new paragraph (e)(2), The 24-month requirement, we explain that we consider you to have received Social Security disability benefits for at least 24 months beginning with the first day of the first month following the 24th month for which you actually received Social Security disability benefits that you were due or constructively received such benefits. We explain that we will consider you to have constructively received a benefit for a month for purposes of the 24-month requirement if you were otherwise due a social security disability benefit for that month and your monthly benefit was withheld to recover an overpayment. We explain the new evaluation test in new paragraph (e)(3), The countable income test. Under the countable income test, we will compare your countable income to the substantial gainful activity earnings guidelines in § 404.1574(b)(2) to determine if you have engaged in substantial gainful activity. We will consider that you have engaged in substantial gainful activity if your monthly countable income averages more than the amounts in § 404.1574(b)(2) unless the evidence shows that you did not render significant services in the month(s). If your average monthly countable income is equal to or less than the amounts in § 404.1574(b)(2), or if the evidence shows that you did not render significant services, we will consider that your work as a self-employed person shows that you have not engaged in substantial gainful activity. Sections 404.1590 and 416.990 When and How Often We Will Conduct a Continuing Disability Review We added two new paragraphs to existing §§ 404.1590 and 416.990 to explain when we will and will not start continuing disability reviews if you are in the Ticket to Work program and your ticket is in use (new paragraph (h)), and if you are covered by the provisions of section 221(m) of the Act (new paragraph (i)). In new §§ 404.1590(h) and 416.990(h), If you are participating in the Ticket to Work program, we restate our rules already set out in §§ 411.160 and 411.165 that we will not start a continuing disability review for you during the period in which you are using a ticket under the Ticket to Work program. This amendment to existing §§ 404.1590 and 416.990 is not a change in policy, but incorporates rules already set out in §§ 411.160 and 411.165. In addition, we provide in new § 404.1590(h) that this provision does not apply to the reviews we do under title II using the rules in §§ 404.1571-404.1576 to determine whether the work you have done shows that you are able to do substantial gainful activity (see § 411.160(b)). (As we have already noted, your performance of substantial gainful activity does not affect your SSI eligibility because of the work incentive provisions of section 1619 of the Act.) In new §§ 404.1590(i) and 416.990(i), If you are working and have received social security disability benefits for at least 24 months, we provide rules for you if you are covered by section 221(m) of the Act. In new paragraph (i)(1), General, we explain that we will not start a continuing disability review based solely on your work activity if you are currently entitled to benefits based on disability under title II of the Act and you have received such benefits for at least 24 months. We also list the types of title II disability benefits that qualify. Although section 221(m)(1)(A) says that a continuing disability review may not be “scheduled” based solely on your work activity, we use the word “start” in this provision and the remainder of new paragraph
(i)of §§ 404.1590 and 416.990 to avoid any confusion about what we will do, and to use consistent language throughout these sections of our rules. Existing provisions in §§ 404.1590 and 416.990 use both words. We use the word “start” in the opening sentence of existing §§ 404.1590(b) and 416.990(b) to explain when we will do a continuing disability review. We then use the word “scheduled” in existing paragraphs (b)(1), (b)(2) and (b)(10) to explain when we will start a continuing disability review that we have scheduled in advance; that is, based on a diary for “medical improvement expected,” “medical improvement possible,” or “medical improvement not expected,” or on a “vocational reexamination diary.” In existing paragraph (b)(11) of § 416.990, we specify a timeframe within which we must review the cases of certain children (i.e., by the first birthday of the child) unless certain conditions are met. In existing paragraph (b)(11)(ii) of § 416.990, which discusses one of the conditions, we use the word “schedule” to describe a situation in which we set a time in advance for conducting a continuing disability review. The remaining provisions in existing paragraphs (b)(3)-(b)(9) of §§ 404.1590 and 416.990 describe situations in which we do not schedule continuing disability reviews in advance but may start them sooner than the regularly scheduled reviews. In new §§ 404.1590(i)(2) and 416.990(i)(2), The 24-month requirement, we provide rules for determining whether the 24-month requirement in new §§ 404.1590(i)(1) and 416.990(i)(1) is met. In new paragraph (i)(2)(i), we explain that months for which you have actually received Social Security disability benefits under title II that you were due, or for which you have constructively received such benefits, will be counted for the 24-month requirement. The 24 months do not have to be consecutive. We explain that we will consider you to have constructively received a benefit for a month for purposes of the 24-month requirement if you were otherwise due a social security disability benefit for that month and your monthly benefit was withheld to recover an overpayment. We also explain that we do not count months for which you were technically “entitled” but did not actually or constructively receive benefit payments. In addition, we clarify that months for which you received only SSI payments and months for which you received continued benefits pending the appeal of a medical cessation determination, do not count toward the 24-month requirement. In new §§ 404.1590(i)(2)(ii) and 416.990(i)(2)(ii), we explain that you will not meet the 24-month requirement for purposes of new § 404.1590(i)(1) or § 416.990(i)(1) if you have not received Social Security disability benefits for at least 24 months as of the date on which we start a continuing disability review. We explain that the date on which we start a continuing disability review is the date on the notice we send you that tells you that we are beginning the review. In new §§ 404.1590(i)(3) and 416.990(i)(3), When we may start a continuing disability review even if you have received social security disability benefits for at least 24 months, we include a reminder that, even if you meet the requirements of new paragraph (i)(1) of § 404.1590 or § 416.990, we may still start a continuing disability review if we have another reason to do so; that is, when the fact that you are working is not the sole reason for the continuing disability review. We include two examples, including a reminder that we must still schedule you for regularly scheduled continuing disability reviews, as provided under section 221(m)(2)(A) of the Act. In § 404.1590, we include a new paragraph (i)(4), Reviews to determine whether the work you have done shows that you are able to do substantial gainful activity, to clarify that the exemption from continuing disability reviews in new paragraph (i)(1) of that section does not apply to certain reviews we conduct under title II of the Act. We explain that paragraph (i)(1) does not apply to the reviews we conduct using the rules in §§ 404.1571-404.1576 to determine whether the work you have done shows that you are able to do substantial gainful activity and are, therefore, no longer disabled. In other words, if section 221(m) of the Act applies to you, we may not be able to start a medical continuing disability review, but we can still start a work continuing disability review to determine if you are doing substantial gainful activity. We do not conduct similar reviews under title XVI because of the work incentive provisions in section 1619 of the Act. Therefore, we do not include a similar provision in the amendments to § 416.990. As we explain earlier in this preamble, if we start a continuing disability review based on your work activity, we will provide an opportunity for you to request that we review that action if you believe that you are protected by section 221(m)(1)(A) of the Act and that the action of starting the continuing disability review was in error. If we review the action and conclude that the initiation of the medical continuing disability review was in error, we will discontinue the processing of the continuing disability review. If the continuing disability review proceeds to completion and we make a medical cessation determination, we provide a procedure in new §§ 404.1590(i)(5) and 416.990(i)(4) under which we will vacate the medical cessation determination if the action of starting the continuing disability review is shown to have been in error because you were protected by section 221(m)(1)(A). You must provide evidence to us that establishes that you met the requirements of new § 404.1590(i)(1) or § 416.990(i)(1) as of the date of the start of your continuing disability review and that the start of the review was erroneous. In addition, we must receive the evidence within 12 months of the date of the notice of the initial determination of medical cessation. We also amended existing paragraph
(a)of §§ 404.1590 and 416.990 to include references to new paragraphs
(h)and
(i)of these sections. Section 404.1592a The Reentitlement Period We amended existing paragraph
(a)of § 404.1592a to explain when the special rules in amended §§ 404.1574(b)(3)(iii) and 404.1575(e) may apply, and when they will not apply, in making substantial gainful activity determinations. We also revised existing paragraph (a)(3) of § 404.1592a to separate the provisions into two lower level paragraphs. We designated the second, third, and fourth sentences of existing paragraph (a)(3) as new paragraph (a)(3)(i). We designated the fifth, sixth, and seventh sentences of existing paragraph (a)(3) as new paragraph (a)(3)(ii). We amended existing paragraph (a)(1) of § 404.1592a to include a reference to the special rules for evaluating the work you do after you have received Social Security disability benefits for at least 24 months. We are including this reference in the list of examples of the relevant rules we will apply when deciding whether the work you do following completion of a trial work period is substantial gainful activity for purposes of determining whether your disability has ceased. We are also making a similar change in newly designated paragraph (a)(3)(ii). We revised the last sentence of existing paragraph (a)(2)(i), and added in newly designated paragraph (a)(3)(i), of this section to clarify that, if we have decided that your disability ceased because you performed substantial gainful activity, we will not apply the special rules in amended §§ 404.1574(b)(3)(iii) and 404.1575(e) in making substantial gainful activity determinations for purposes of determining whether benefits should be paid for any subsequent months of the reentitlement period or whether your entitlement to benefits has terminated. The special rules in amended §§ 404.1574(b)(3)(iii) and 404.1575(e) do not apply in making these substantial gainful activity determinations because these determinations do not involve deciding whether your disability has ceased. Section 404.1594 How We Will Determine Whether Your Disability Continues or Ends Section 416.994 How We Will Determine Whether Your Disability Continues or Ends, Disabled Adults We are adding new § 404.1594(i), If you work during your current period of entitlement based on disability or during certain other periods, and new § 416.994(b)(8), If you work during your current period of eligibility based on disability or during certain other periods, to: • Incorporate a longstanding instruction that interprets our regulations on how we consider your work at the last two steps of the medical improvement review standard sequential evaluation process when determining whether your disability continues or ends; • Provide a comparable rule on how we consider your work at the last two steps of the process when determining whether you are entitled to expedited reinstatement of benefits under section 221(i) or eligible for expedited reinstatement of benefits under section 1631(p) of the Act; • Explain how we will consider the activities you do in your work when determining whether your disability continues or ends if you are covered by section 221(m) of the Act; and • Explain how we will consider the activities you do in your work when determining whether your disability continues or ends if you are not covered by section 221(m) of the Act. In new §§ 404.1594(i)(1) and 416.994(b)(8)(i), we clarify our rules about the last two steps of the medical improvement review standard sequential evaluation process for determining whether disability continues or ends to reflect an interpretation contained in an operating instruction we have been using for a number of years. The provisions clarify that we will not consider work you are doing now, or work that you did, during your current period of entitlement based on disability under title II (new § 404.1594(i)(1)), or during your current period of eligibility based on disability under title XVI (new § 416.994(b)(8)(i)), to be past relevant work for purposes of the second to last step of the sequential evaluation processes described in §§ 404.1594(f) and 416.994(b)(5). The provisions also explain that we will not consider such work to be “past work experience” when we decide whether you can do other work at the last step of those processes. In these provisions of the final rules, we also provide that we will not consider certain work to be past relevant work or past work experience for purposes of the last two steps of the medical improvement review standard sequential evaluation process when we decide whether you qualify for expedited reinstatement of benefits under section 223(i) or 1631(p) of the Act. For purposes of deciding whether you qualify for expedited reinstatement of benefits, the rules would apply to work you are doing or have done during or after your previous period of entitlement or eligibility which terminated and which is the basis for your request for expedited reinstatement. In new §§ 404.1594(i)(2) and 416.994(b)(8)(ii), we provide rules for you if you are covered by section 221(m) of the Act. Section 221(m)(1)(B) of the Act explains that if you are covered by this section, “no work activity engaged in by the individual may be used as evidence that the individual is no longer disabled.” Based on this statutory language, we provide in these final rules that we will not consider the activities you do in your work if they support a finding that you are no longer disabled. We may still find that you are no longer disabled, but only if that finding is based on other evidence. We also provide that we may consider the activities you do in your work if they provide evidence that you are still disabled or if they do not conflict with a finding that you are still disabled. Your functioning on the job may help us to establish that you are still disabled. We concluded that we are required to include this provision because the language of section 221(m)(1)(B) speaks only about the use of work activity as evidence that an individual is “no longer disabled.” We also include in new §§ 404.1594(i)(2) and 416.994(b)(8)(ii) a statement that we will not presume that you are still disabled if you stop working. This would incorporate the statutory requirement of section 221(m)(1)(C) into our regulations. In new §§ 404.1594(i)(3) and 416.994(b)(8)(iii), we explain how we consider activities from work in all other continuing disability reviews, that is, if you receive disability benefits under title II but are not covered by section 221(m) or if you are eligible only for SSI benefits. The rules would only incorporate into our regulations an interpretation we already use. Even though we may not consider the work that you do during your current period of entitlement or eligibility based on disability to be past relevant work or past work experience, we do consider the physical and mental activities you do in your work when we need to assess your functioning (for example, when we assess your residual functional capacity) in deciding whether your disability continues or ends. We consider the activities regardless of whether they support a finding that your disability continues or support a finding that your disability has ended. (It is only when you are covered by section 221(m) that we would not consider the activities if they support a finding that your disability has ended, as explained in §§ 404.1594(i)(2) and 416.994(b)(8)(ii), discussed above.) In new §§ 404.1594(i)(3) and 416.994(b)(8)(iii), therefore, we are only codifying in our regulations our current practice when you are not covered by section 221(m). We concluded that we are required to do this in these cases, because of the general requirements of the Act and our regulations that we consider all of the relevant evidence in your case record whenever we make a determination about your disability. Section 221(m) provides an explicit exception to this rule, but only for people who are covered by that section. We are aware that the provisions in final §§ 404.1594(i)(2) and 416.994(b)(8)(ii) may create a more complex process because we may, in some cases, be required to disregard information about your work that would otherwise be evidence about your physical and mental abilities. We may also be required to undertake additional development to obtain alternative evidence about your abilities, or to clarify evidence (such as medical opinion evidence) that may have been based on information about your activities at work. However, we concluded that there is no other permissible interpretation of the language of section 221(m)(1)(B). We are also adding cross-references in several places in existing §§ 404.1594 and 416.994 as a reminder to consider the provisions in new §§ 404.1594(i) and 416.994(b)(8) whenever appropriate. Other Changes We are making a few minor editorial corrections and revisions to existing provisions. These changes are not substantive and we do not intend to change the meaning of existing rules in any way by them. For example, we provide paragraph designations for some of the clauses within §§ 404.1590(b) and 416.990(b) to make them easier to refer to. We are also deleting the reference to completion of a trial work period from existing § 416.990(b)(4). There are no trial work periods under title XVI because of other work incentive provisions in the Act. When we last revised our regulations to remove references to the trial work period from the SSI regulations, we inadvertently overlooked this provision. See 65 FR 42772, 42775 (July 11, 2000). In addition, we are replacing the word “decide” with the word “determine” in the heading of § 416.994 to conform to the language used in the headings of §§ 404.1594 and 416.994a. Public Comments on the Notice of Proposed Rulemaking
(NPRM)When we published the NPRM in the **Federal Register** on October 11, 2005 (70 FR 58999), we provided interested parties 60 days to submit comments. We received comments from 13 commenters, including national, State and community based agencies and private organizations serving people with disabilities, beneficiaries, and other individuals. We carefully considered the comments we received on the proposed rules in publishing these final regulations. The comments we received and our responses to the comments are set forth below. Although we condensed, summarized, or paraphrased the comments, we believe that we have expressed the views accurately and have responded to all of the significant issues raised. In addition, a few of the comments were about subjects that were outside the scope of this rulemaking. We have not summarized and responded to these comments below. Comments and Responses *Comment:* One commenter wanted us to clarify how the evaluation of subsidies and special conditions will be performed if work activity cannot be evaluated when making a substantial gainful activity determination for the purpose of determining whether disability has ceased. *Response:* Generally, in evaluating the work activity of an employee for purposes of determining whether the work is substantial gainful activity, our primary consideration will be the earnings the individual derives from the work activity. When we evaluate earnings under the earnings guidelines for determining substantial gainful activity, we use the actual amount of earnings paid to the individual (subject to the deduction of impairment-related work expenses) unless we have information indicating that not all of the earnings are directly related to the individual's productivity ( *i.e.* , the earnings are subsidized or the work is performed under special conditions). When the amount of earnings paid to an individual exceed the reasonable value of the work he or she performs, we consider only that part of the individual's pay which he or she actually earns. See § 404.1574(a)(2) of our regulations. When we have evidence indicating that an individual with a serious medical impairment may not be earning all that he or she is paid, we will continue to evaluate the work activity performed by the individual to determine whether, and to what extent, the individual's earnings exceed the reasonable value of the services performed by the individual. We will evaluate the work activity to determine the reasonable value of the actual services the individual performs in order to determine the amount of earnings we will use when applying the earnings guidelines. If we did not do this before applying the earnings guidelines, we could find that an individual with a serious medical impairment has demonstrated the ability to engage in substantial gainful activity and, therefore, is no longer disabled, on the basis of earnings that are in excess of the reasonable value of the actual services he or she performs. Therefore, we will continue to evaluate the work activity of an individual in these instances for the purpose of determining the amount of earnings we will use when applying the earnings guidelines, even if the individual is covered by section 221(m) of the Act. We believe this is a reasonable interpretation of sections 221(m)(1)(B) and (2)(B) of the Act. The changes which we proposed to make to § 404.1574(b), and which we are adopting in these final rules, do not affect this aspect of our existing rules in § 404.1574(a)(2) for evaluating whether the work performed by an employee is substantial gainful activity. Therefore, we do not believe that there is a need to make changes to clarify this aspect of our existing rules. *Comment:* One commenter was concerned that individuals who are participating in the Ticket to Work program do not understand that the continuing disability review protection for individuals who are using a ticket does not apply to the reviews we conduct using the rules in §§ 404.1571 through 404.1576. *Response:* When we refer to the reviews we conduct using the rules in §§ 404.1571 through 404.1576, we are discussing the substantial gainful activity determinations we make under §§ 404.1592a(a)(1) and 404.1594(d)(5) and (f)(1) (see also § 404.1592a(a)(3)(ii) of these final rules). The latter sections require us to evaluate the work activity of a title II disability beneficiary to determine whether the work shows that the individual is able to engage in substantial gainful activity and, therefore, is no longer disabled. Our public information materials have clearly explained that even though a title II disability beneficiary is using a ticket under the Ticket to Work program, we will still evaluate his or her work activity to determine whether the work is substantial gainful activity. We explain in these materials that if the work shows that the individual is able to do substantial gainful activity, we will determine that the individual is no longer disabled (after applying any applicable trial work period). Also, § 411.160(b) of our regulations for the Ticket to Work program clearly explains that even though an individual who is using a ticket is protected from a medical continuing disability review, the individual will still be subject to a review to determine whether his or her disability has ended under § 404.1594(d)(5) because he or she has demonstrated the ability to engage in substantial gainful activity. *Comment:* A number of commenters recommended that we allow the start of a continuing disability review to be an initial determination with appeal rights and/or eliminate the prescribed 12-month period within which an individual must submit evidence to show that the start of a continuing disability review was in error because it was precluded under section 221(m)(1)(A) of the Act. *Response:* We did not adopt the recommendations. Because the action of starting or discontinuing a continuing disability review is not an adjudication of whether the individual's disability continues or ends, we do not consider that action to be an initial determination that is subject to the administrative review process under subpart J of part 404 or subpart N of part 416 of our regulations or to judicial review. We recognize that beneficiaries may not always know whether they qualify for the protection against the start of a continuing disability review based solely on work activity as provided under section 221(m)(1)(A) of the Act. Therefore, we have developed a screening tool to identify beneficiaries covered by section 221(m) to help prevent the starting of a continuing disability review based solely on their work activity. We recognize that the screening tool may not capture every case and that it is possible that we may start a continuing disability review solely as a result of a beneficiary's work activity even though the beneficiary may be protected by the section 221(m)(1)(A) provision. Should this happen, we will provide an opportunity for the beneficiary to request that we review the action of starting the continuing disability review. As we explain earlier in this preamble, we will inform the individual of this opportunity in the notice we send the individual which tells him or her that we are starting a medical continuing disability review. If we review the action and conclude that the initiation of the continuing disability review was in error because section 221(m)(1)(A) applies, we will discontinue processing the continuing disability review. In the event the continuing disability review is processed to completion and results in a medical cessation determination, we explain in §§ 404.1590(i)(5) and 416.990(i)(4) of these final rules that we will provide the beneficiary 12 months within which to submit evidence to show that the action of starting the medical continuing disability review was in error because the beneficiary was protected by section 221(m)(1)(A) of the Act. If we receive evidence within the prescribed time period that establishes that the start of the continuing disability review was in error because of section 221(m)(1)(A), we will vacate the medical cessation determination and reinstate the individual. This procedure will be available in addition to any appeal requests on the medical cessation determination. We believe that the 12-month period is adequate time to submit evidence that the medical continuing disability review should not have been started, considering the beneficiary will only have 60 days to appeal the medical cessation determination. Also, we believe that the situation in which a beneficiary may need to use this procedure will be rare with the use of the screening tool and the availability of the aforementioned protest procedure that will be explained in the notice that we send to the beneficiary telling the beneficiary that we are starting a continuing disability review. *Comment:* Several of the commenters suggested that we make changes to the criteria relating to the requirement that a title II disability beneficiary must have received social security disability benefits for at least 24 months to receive the protections under section 221(m) of the Act. Specifically, the commenters requested that we allow months for which a beneficiary does not receive payment of social security disability benefits due to overpayment recovery or because of worker's compensation offset, as well as months for which a beneficiary receives only SSI payments, to be counted for the 24-month requirement. *Response:* We agree with the commenters that our rules should allow months for which a beneficiary is otherwise due a social security disability benefit to count for the 24-month requirement if the monthly benefit is withheld to satisfy the beneficiary's obligation to reimburse us for an overpayment. Because the monthly benefit which is otherwise due the beneficiary is applied to reduce the beneficiary's overpayment debt, we believe that a beneficiary in this situation may be treated as having received a social security disability benefit for purposes of applying the 24-month requirement. This will allow a social security disability beneficiary whose monthly benefit is withheld to recover an overpayment to receive the same consideration for purposes of the 24-month requirement as a beneficiary who repays an overpayment by refunding the overpayment amount to us or whose monthly benefit is subject to partial withholding to recover an overpayment. We have modified §§ 404.1574(b)(3)(iv), 404.1575(e)(2), 404.1590(i)(2)(i), and 416.990(i)(2)(i) of the final rules to provide that, if a beneficiary is otherwise due a social security disability benefit for a month and the monthly benefit is withheld to recover an overpayment, we will consider the beneficiary to have constructively received a benefit for that month for purposes of the 24-month requirement. We also have made changes to these sections of the final rules to provide that months for which a beneficiary has actually received social security disability benefits that he or she was due, or for which the beneficiary has constructively received such benefits (as described above), will be counted for the 24-month requirement. We cannot adopt the suggestion to allow months for which a beneficiary does not receive a benefit payment because of worker's compensation offset to count for the 24-month requirement. Because the Act requires a reduction in title II benefits on account of receipt of worker's compensation or similar payments, we cannot regard a beneficiary as having received a benefit for purposes of the 24-month requirement if the application of the worker's compensation offset results in no monthly benefit being due the beneficiary. This is not like the situation where the monthly benefit which is otherwise due a beneficiary is withheld to reduce the beneficiary's overpayment debt and where the beneficiary would have actually received a benefit payment had he or she refunded the overpayment amount to us. In addition, we cannot adopt the suggestion that months for which the individual receives only SSI payments be counted for the 24-month requirement. The statute specifically requires receipt of title II disability benefits for at least 24 months. Therefore, if an individual is both entitled to title II disability benefits and eligible for SSI payments based on disability or blindness, we cannot count the months for which the individual received only SSI payments for the purpose of determining whether the 24-month requirement is met. *Comment:* A few commenters requested that we reconsider our stance on the interpretation of section 221(m)(1)(c). The commenters were concerned that our interpretation creates a barrier or disincentive for a beneficiary to attempt working. *Response:* We did not make any changes in the final rules as a result of the commenters' recommendation. We believe that the language of section 221(m)(1)(C) of the Act is clear and not susceptible of another interpretation. Moreover, we do not believe that this interpretation will create a disincentive for beneficiaries to return to work. Section 221(m)(1)(c) of the Act states that “no cessation of work activity by the individual may give rise to a presumption that the individual is unable to engage in work.” In other words, we will not presume that a beneficiary is still disabled simply because he or she stops working. When an individual has a medical continuing disability review, we apply the medical improvement review standard to determine whether the individual's disability continues or ends. Section 221(m)(1)(c) clarifies that, when determining whether disability continues or ends under the medical improvement review standard, we may not presume that the individual continues to be disabled just because he or she stopped working. The facts associated with why the individual stopped work will still be evaluated under the medical improvement review standard if they support a determination that the individual is still disabled. *Comment:* Several commenters believe the rules associated with the medical improvement review standard are complex and need to be simplified for beneficiaries to understand, especially with the addition of the new rules associated with section 221(m)(1)(B). *Response:* We wrote the new rules in §§ 404.1594(i) and 416.994(b)(8) relating to the medical improvement review standard in plain language to make the rules as easy to read and understand as possible. With the addition of these new rules, we will revise our public information materials to make sure beneficiaries understand that activities they perform in work cannot be used to show they are no longer disabled if they meet the requirements of section 221(m)(1). Additionally, when we make a determination that an individual is no longer disabled, we are required to explain the determination in writing and in plain language. The notice of determination will also have to explain what evidence was used and, in an appropriate case, clarify that work activity was not used because the beneficiary was protected by section 221(m)(1)(B) of the Act. *Comment:* A few commenters suggested that we clarify that if a medical cessation is overturned on appeal, the months for which social security disability benefits were continued pending the appeal will count, thereafter, toward the 24-month requirement. *Response:* If we conduct a continuing disability review and determine that the disability of a social security disability beneficiary has medically ceased, the individual may request benefit continuation while the medical cessation is being appealed. Because the individual is being paid under a special provision, we clarify in §§ 404.1590(i)(2)(i) and 416.990(i)(2)(i) of these final rules that the months for which an individual is receiving benefit continuation pending reconsideration and/or a hearing before an administrative law judge on a medical cessation determination will not count toward the 24-month requirement for section 221(m)(1) purposes. If the medical cessation is overturned on appeal and our final decision is that the individual's disability continues, we reinstate the individual's entitlement to social security disability benefits for the months in the period during which the medical cessation was being appealed. Thereafter, these months would be months for which the individual was entitled to social security disability benefits for purposes of any future continuing disability reviews. We provide in final §§ 404.1590(i) and 416.990(i) that months for which the individual was entitled to social security disability benefits and received such benefits that he or she was due will count for the 24-month requirement. We believe these provisions of the final rules adequately address the situation that was of concern to the commenters. Because the final rules cover the situation, we do not believe further clarification is necessary. Changes From the Proposed Rules In these final rules, we are making certain changes from the proposed rules. We are making these changes to provide consistency in wording in parallel provisions of the part 404 and part 416 rules, to clarify certain provisions contained in the proposed rules, and to correct certain inappropriate cross-references contained in the proposed rules. In § 404.1574(b)(3)(ii) of the final rules, we are revising the first sentence of this section of the NPRM to parallel the language used in § 416.974(b)(3)(ii). In § 404.1574(b)(3)(ii) of the NPRM, we had stated, in part, that we would generally consider other information in addition to earnings if there was evidence indicating that the individual is in a position to defer or suppress earnings. However, our intent was to include in this section the same language we used in proposed § 416.974(b)(3)(ii). The latter section explained that we will generally consider other information in addition to earnings if there is evidence indicating that the individual may be engaging in substantial gainful activity or that the individual is in a position to control when earnings are paid or the amount of wages paid. In the final rules, we include this language in both §§ 404.1574(b)(3)(ii) and 416.974(b)(3)(ii). In §§ 404.1590(i)(2)(i) and 416.990(i)(2)(i) of the final rules, we are switching the order of the last two sentences contained in these sections of the proposed rules. We are also revising what was the last sentence of these sections of the proposed rules (and is now the next-to-last sentence of these sections of the final rules) to clarify that months for which an individual has social security disability benefits continued under § 404.1597a pending reconsideration and/or a hearing before an administrative law judge on a medical cessation determination will not count toward the 24-month requirement. In making this revision in final § 416.990(i)(2)(i), we changed the cross-reference to § 416.996 (relating to SSI benefit continuation pending appeal of a medical cessation) that was contained in proposed § 416.990(i)(2)(i). In final § 416.990(i)(2)(i), we substituted a reference to § 404.1597a, which is the appropriate section of our regulations that concerns an individual's election of continuation of social security disability benefits pending an appeal of a medical cessation determination. In §§ 404.1594(i) and 416.994(b)(8) of these final rules, we have revised certain cross-references that were contained in these sections of the proposed rules. For example, in final § 416.994(b)(8)(iii), we have substituted a reference to “paragraph (b)(5) of this section” for the reference to “paragraph
(f)of this section” that was contained in proposed § 416.994(b)(8)(iii). The evaluation steps for the medical improvement review standard for SSI adult disability cases are contained in paragraph (b)(5) of § 416.994. Also, in these final rules, we have made a few, minor, nonsubstantive changes in punctuation and wording from the proposed rules to improve the clarity of these final regulations. 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 a significant regulatory action under Executive Order 12866, as amended by Executive Order 13258. Thus, they were subject to OMB review. Regulatory Flexibility Act We certify that these final regulations will not have a significant economic impact on a substantial number of small entities because they affect only individuals. Thus, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required. Paperwork Reduction Act These final regulations impose no reporting or recordkeeping requirements that require OMB clearance. (Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; 96.006, Supplemental Security Income) List of Subjects 20 CFR Part 404 Administrative practice and procedure, Blind, Disability benefits, Old-Age, Survivors and Disability Insurance, Reporting and recordkeeping requirements, Social Security, Vocational rehabilitation. 20 CFR Part 416 Administrative practice and procedure, Aged, Blind, Disability benefits, Public assistance programs, Reporting and recordkeeping requirements, Supplemental Security Income (SSI), Vocational rehabilitation. Dated: August 3, 2006. Jo Anne B. Barnhart, Commissioner of Social Security. For the reasons set out in the preamble, we are amending subparts J and P of part 404 and subparts I and N of part 416 of chapter III of title 20 of the Code of Federal Regulations as set forth below. PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-) Subpart J—Determinations, Administrative Review Process, and Reopening of Determinations and Decisions [Amended] 1. The authority citation for subpart J continues to read as follows: Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 221, 223(i), 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 404(f), 405(a), (b), (d)-(h), and (j), 421, 423(i), 425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 421 note). 2. Section 404.903 is amended by removing the word “and” at the end of paragraph (x), replacing the period at the end of paragraph
(y)with “;”, and adding a new paragraph
(z)to read as follows: § 404.903 Administrative actions that are not initial determinations.
(z)Starting or discontinuing a continuing disability review; and Subpart P—Determining Disability and Blindness [Amended] 3. The authority citation for subpart P is revised to read as follows: Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a), (i), and (m), 222(c), 223, 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a), (i), and (m), 422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 Stat. 2105, 2189. 4. Section 404.1574 is amended by revising paragraph
(b)to read as follows: § 404.1574 Evaluation guides if you are an employee.
(b)*Earnings guidelines.*
(1)*General.* If you are an employee, we first consider the criteria in paragraph
(a)of this section and § 404.1576, and then the guides in paragraphs (b)(2) and
(3)of this section. When we review your earnings to determine if you have been performing substantial gainful activity, we will subtract the value of any subsidized earnings (see paragraph (a)(2) of this section) and the reasonable cost of any impairment-related work expenses from your gross earnings (see § 404.1576). The resulting amount is the amount we use to determine if you have done substantial gainful activity. We will generally average your earnings for comparison with the earnings guidelines in paragraphs (b)(2) and
(3)of this section. See § 404.1574a for our rules on averaging earnings.
(2)*Earnings that will ordinarily show that you have engaged in substantial gainful activity.* We will consider that your earnings from your work activity as an employee (including earnings from work in a sheltered workshop or a comparable facility especially set up for severely impaired persons) show that you engaged in substantial gainful activity if:
(i)*Before January 1, 2001,* they averaged more than the amount(s) in Table 1 of this section for the time(s) in which you worked.
(ii)*Beginning January 1,* 2001, and each year thereafter, they average more than the larger of:
(A)The amount for the previous year, or
(B)An amount adjusted for national wage growth, calculated by multiplying $700 by the ratio of the national average wage index for the year 2 calendar years before the year for which the amount is being calculated to the national average wage index for the year 1998. We will then round the resulting amount to the next higher multiple of $10 where such amount is a multiple of $5 but not of $10 and to the nearest multiple of $10 in any other case. Table 1 For months: Your monthly earnings averaged more than: In calendar years before 1976 $200 In calendar year 1976 230 In calendar year 1977 240 In calendar year 1978 260 In calendar year 1979 280 In calendar years 1980-1989 300 January 1990-June 1999 500 July 1999-December 2000 700
(3)*Earnings that will ordinarily show that you have not engaged in substantial gainful activity.*
(i)*General.* If your average monthly earnings are equal to or less than the amount(s) determined under paragraph (b)(2) of this section for the year(s) in which you work, we will generally consider that the earnings from your work as an employee (including earnings from work in a sheltered workshop or comparable facility) will show that you have not engaged in substantial gainful activity. We will generally not consider other information in addition to your earnings except in the circumstances described in paragraph (b)(3)(ii) of this section.
(ii)*When we will consider other information in addition to your earnings.* We will generally consider other information in addition to your earnings if there is evidence indicating that you may be engaging in substantial gainful activity or that you are in a position to control when earnings are paid to you or the amount of wages paid to you (for example, if you are working for a small corporation owned by a relative). (See paragraph (b)(3)(iii) of this section for when we do not apply this rule.) Examples of other information we may consider include, whether—
(A)Your work is comparable to that of unimpaired people in your community who are doing the same or similar occupations as their means of livelihood, taking into account the time, energy, skill, and responsibility involved in the work; and
(B)Your work, although significantly less than that done by unimpaired people, is clearly worth the amounts shown in paragraph (b)(2) of this section, according to pay scales in your community.
(iii)*Special rule for considering earnings alone when evaluating the work you do after you have received social security disability benefits for at least 24 months.* Notwithstanding paragraph (b)(3)(ii) of this section, we will not consider other information in addition to your earnings to evaluate the work you are doing or have done if—
(A)At the time you do the work, you are entitled to social security disability benefits and you have received such benefits for at least 24 months (see paragraph (b)(3)(iv) of this section); and
(B)We are evaluating that work to consider whether you have engaged in substantial gainful activity or demonstrated the ability to engage in substantial gainful activity for the purpose of determining whether your disability has ceased because of your work activity (see §§ 404.1592a(a)(1) and (3)(ii) and 404.1594(d)(5) and (f)(1)).
(iv)*When we consider you to have received social security disability benefits for at least 24 months.* For purposes of paragraph (b)(3)(iii) of this section, social security disability benefits means disability insurance benefits for a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability. We consider you to have received such benefits for at least 24 months beginning with the first day of the first month following the 24th month for which you actually received social security disability benefits that you were due or constructively received such benefits. The 24 months do not have to be consecutive. We will consider you to have constructively received a benefit for a month for purposes of the 24-month requirement if you were otherwise due a social security disability benefit for that month and your monthly benefit was withheld to recover an overpayment. Any months for which you were entitled to benefits but for which you did not actually or constructively receive a benefit payment will not be counted for the 24-month requirement. If you also receive supplemental security income payments based on disability or blindness under title XVI of the Social Security Act, months for which you received only supplemental security income payments will not be counted for the 24-month requirement. 5. Section 404.1575 is amended by revising paragraphs
(a)and
(c)and adding new paragraph
(e)to read as follows: § 404.1575 Evaluation guides if you are self-employed.
(a)*If you are a self-employed person.* If you are working or have worked as a self-employed person, we will use the provisions in paragraphs
(a)through
(e)of this section that are relevant to your work activity. We will use these provisions whenever they are appropriate, whether in connection with your application for disability benefits (when we make an initial determination on your application and throughout any appeals you may request), after you have become entitled to a period of disability or to disability benefits, or both.
(1)*How we evaluate the work you do after you have become entitled to disability benefits.* If you are entitled to social security disability benefits and you work as a self-employed person, the way we will evaluate your work activity will depend on whether the work activity occurs before or after you have received such benefits for at least 24 months and on the purpose of the evaluation. For purposes of paragraphs
(a)and
(e)of this section, social security disability benefits means disability insurance benefits for a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability. We will use the rules in paragraph (e)(2) of this section to determine if you have received such benefits for at least 24 months.
(i)We will use the guides in paragraph (a)(2) of this section to evaluate any work activity you do before you have received social security disability benefits for at least 24 months to determine whether you have engaged in substantial gainful activity, regardless of the purpose of the evaluation.
(ii)We will use the guides in paragraph
(e)of this section to evaluate any work activity you do after you have received social security disability benefits for at least 24 months to determine whether you have engaged in substantial gainful activity for the purpose of determining whether your disability has ceased because of your work activity.
(iii)If we have determined under § 404.1592a(a)(1) that your disability ceased in a month during the reentitlement period because you performed substantial gainful activity, and we need to decide under § 404.1592a(a)(2)(i) or (a)(3)(i) whether you are doing substantial gainful activity in a subsequent month in or after your reentitlement period, we will use the guides in paragraph (a)(2) of this section (subject to the limitations described in § 404.1592a(a)(2)(i) and (a)(3)(i)) to determine whether your work activity in that month is substantial gainful activity. We will use the guides in paragraph (a)(2) of this section for these purposes, regardless of whether your work activity in that month occurs before or after you have received social security disability benefits for at least 24 months.
(2)*General rules for evaluating your work activity if you are self-employed.* We will consider your activities and their value to your business to decide whether you have engaged in substantial gainful activity if you are self-employed. We will not consider your income alone because the amount of income you actually receive may depend on a number of different factors, such as capital investment and profit-sharing agreements. We will generally consider work that you were forced to stop or reduce to below substantial gainful activity after 6 months or less because of your impairment as an unsuccessful work attempt. See paragraph
(d)of this section. We will evaluate your work activity based on the value of your services to the business regardless of whether you receive an immediate income for your services. We determine whether you have engaged in substantial gainful activity by applying three tests. If you have not engaged in substantial gainful activity under test one, then we will consider tests two and three. The tests are as follows:
(i)*Test one:* You have engaged in substantial gainful activity if you render services that are significant to the operation of the business and receive a substantial income from the business. Paragraphs
(b)and
(c)of this section explain what we mean by significant services and substantial income for purposes of this test.
(ii)*Test Two:* You have engaged in substantial gainful activity if your work activity, in terms of factors such as hours, skills, energy output, efficiency, duties, and responsibilities, is comparable to that of unimpaired individuals in your community who are in the same or similar businesses as their means of livelihood.
(iii)*Test Three:* You have engaged in substantial gainful activity if your work activity, although not comparable to that of unimpaired individuals, is clearly worth the amount shown in § 404.1574(b)(2) when considered in terms of its value to the business, or when compared to the salary that an owner would pay to an employee to do the work you are doing.
(c)*What we mean by substantial income.*
(1)*Determining countable income.* We deduct your normal business expenses from your gross income to determine net income. Once we determine your net income, we deduct the reasonable value of any significant amount of unpaid help furnished by your spouse, children, or others. Miscellaneous duties that ordinarily would not have commercial value would not be considered significant. We deduct impairment-related work expenses that have not already been deducted in determining your net income. Impairment-related work expenses are explained in § 404.1576. We deduct unincurred business expenses paid for you by another individual or agency. An unincurred business expense occurs when a sponsoring agency or another person incurs responsibility for the payment of certain business expenses, e.g., rent, utilities, or purchases and repair of equipment, or provides you with equipment, stock, or other material for the operation of your business. We deduct soil bank payments if they were included as farm income. That part of your income remaining after we have made all applicable deductions represents the actual value of work performed. The resulting amount is the amount we use to determine if you have done substantial gainful activity. For purposes of this section, we refer to this amount as your countable income. We will generally average your countable income for comparison with the earnings guidelines in § 404.1574(b)(2). See § 404.1574a for our rules on averaging of earnings.
(2)*When countable income is considered substantial.* We will consider your countable income to be substantial if—
(i)It averages more than the amounts described in § 404.1574(b)(2); or
(ii)It averages less than the amounts described in § 404.1574(b)(2) but it is either comparable to what it was before you became seriously impaired if we had not considered your earnings or is comparable to that of unimpaired self-employed persons in your community who are in the same or a similar business as their means of livelihood.
(e)*Special rules for evaluating the work you do after you have received social security disability benefits for at least 24 months.*
(1)*General.* We will apply the provisions of this paragraph to evaluate the work you are doing or have done if, at the time you do the work, you are entitled to social security disability benefits and you have received such benefits for at least 24 months. We will apply the provisions of this paragraph only when we are evaluating that work to consider whether you have engaged in substantial gainful activity or demonstrated the ability to engage in substantial gainful activity for the purpose of determining whether your disability has ceased because of your work activity (see §§ 404.1592a(a)(1) and (3)(ii) and 404.1594(d)(5) and (f)(1)). We will use the countable income test described in paragraph (e)(3) of this section to determine whether the work you do after you have received such benefits for at least 24 months is substantial gainful activity or demonstrates the ability to do substantial gainful activity. We will not consider the services you perform in that work to determine that the work you are doing shows that you are able to engage in substantial gainful activity and are, therefore, no longer disabled. However, we may consider the services you perform to determine that you are not doing substantial gainful activity. We will generally consider work that you were forced to stop or reduce below substantial gainful activity after 6 months or less because of your impairment as an unsuccessful work attempt. See paragraph
(d)of this section.
(2)*The 24-month requirement.* For purposes of paragraphs (a)(1) and
(e)of this section, we consider you to have received social security disability benefits for at least 24 months beginning with the first day of the first month following the 24th month for which you actually received social security disability benefits that you were due or constructively received such benefits. The 24 months do not have to be consecutive. We will consider you to have constructively received a benefit for a month for purposes of the 24-month requirement if you were otherwise due a social security disability benefit for that month and your monthly benefit was withheld to recover an overpayment. Any months for which you were entitled to benefits but for which you did not actually or constructively receive a benefit payment will not be counted for the 24-month requirement. If you also receive supplemental security income payments based on disability or blindness under title XVI of the Social Security Act, months for which you received only supplemental security income payments will not be counted for the 24-month requirement.
(3)*Countable income test.* We will compare your countable income to the earnings guidelines in § 404.1574(b)(2) to determine if you have engaged in substantial gainful activity. See paragraph (c)(1) of this section for an explanation of countable income. We will consider that you have engaged in substantial gainful activity if your monthly countable income averages more than the amounts described in § 404.1574(b)(2) for the month(s) in which you work, unless the evidence shows that you did not render significant services in the month(s). See paragraph
(b)of this section for what we mean by significant services. If your average monthly countable income is equal to or less than the amounts in § 404.1574(b)(2) for the month(s) in which you work, or if the evidence shows that you did not render significant services in the month(s), we will consider that your work as a self-employed person shows that you have not engaged in substantial gainful activity. 6. Section 404.1590 is amended by adding three new sentences to the end of paragraph (a), revising paragraph
(b)introductory text and paragraphs (b)(6), (b)(7)(i), and (b)(8), and adding new paragraphs
(h)and
(i)to read as follows: § 404.1590 When and how often we will conduct a continuing disability review.
(a)*General.* * * * In paragraphs
(b)through
(g)of this section, we explain when and how often we conduct continuing disability reviews for most individuals. In paragraph
(h)of this section, we explain special rules for some individuals who are participating in the Ticket to Work program. In paragraph
(i)of this section, we explain special rules for some individuals who work.
(b)*When we will conduct a continuing disability review.* Except as provided in paragraphs
(h)and
(i)of this section, we will start a continuing disability review if—
(6)You tell us that—
(i)You have recovered from your disability; or
(ii)You have returned to work;
(7)* * *
(i)The services have been completed; or
(8)Someone in a position to know of your physical or mental condition tells us any of the following, and it appears that the report could be substantially correct:
(i)You are not disabled; or
(ii)You are not following prescribed treatment; or
(iii)You have returned to work; or
(iv)You are failing to follow the provisions of the Social Security Act or these regulations;
(h)*If you are participating in the Ticket to Work program.* If you are participating in the Ticket to Work program, we will not start a continuing disability review during the period in which you are using a ticket. However, this provision does not apply to reviews we conduct using the rules in §§ 404.1571-404.1576 to determine whether the work you have done shows that you are able to do substantial gainful activity and are, therefore, no longer disabled. See subpart C of part 411 of this chapter.
(i)*If you are working and have received social security disability benefits for at least 24 months.*
(1)*General.* Notwithstanding the provisions in paragraphs (b)(4), (b)(5), (b)(6)(ii), (b)(7)(ii), and (b)(8)(iii) of this section, we will not start a continuing disability review based solely on your work activity if—
(i)You are currently entitled to disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability; and
(ii)You have received such benefits for at least 24 months (see paragraph (i)(2) of this section).
(2)*The 24-month requirement.*
(i)The months for which you have actually received disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability that you were due, or for which you have constructively received such benefits, will count for the 24-month requirement under paragraph (i)(1)(ii) of this section, regardless of whether the months were consecutive. We will consider you to have constructively received a benefit for a month for purposes of the 24-month requirement if you were otherwise due a social security disability benefit for that month and your monthly benefit was withheld to recover an overpayment. Any month for which you were entitled to benefits but for which you did not actually or constructively receive a benefit payment will not be counted for the 24-month requirement. Months for which your social security disability benefits are continued under § 404.1597a pending reconsideration and/or a hearing before an administrative law judge on a medical cessation determination will not be counted for the 24-month requirement. If you also receive supplemental security income payments based on disability or blindness under title XVI of the Social Security Act, months for which you received only supplemental security income payments will not be counted for the 24-month requirement.
(ii)In determining whether paragraph (i)(1) of this section applies, we consider whether you have received disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability for at least 24 months as of the date on which we start a continuing disability review. For purposes of this provision, the date on which we start a continuing disability review is the date on the notice we send you that tells you that we are beginning to review your disability case.
(3)*When we may start a continuing disability review even if you have received social security disability benefits for at least 24 months.* Even if you meet the requirements of paragraph (i)(1) of this section, we may still start a continuing disability review for a reason(s) other than your work activity. We may start a continuing disability review if we have scheduled you for a periodic review of your continuing disability, we need a current medical or other report to see if your disability continues, we receive evidence which raises a question as to whether your disability continues, or you fail to follow the provisions of the Social Security Act or these regulations. For example, we will start a continuing disability review when you have been scheduled for a medical improvement expected diary review, and we may start a continuing disability review if you failed to report your work to us.
(4)*Reviews to determine whether the work you have done shows that you are able to do substantial gainful activity.* Paragraph (i)(1) of this section does not apply to reviews we conduct using the rules in §§ 404.1571-404.1576 to determine whether the work you have done shows that you are able to do substantial gainful activity and are, therefore, no longer disabled.
(5)*Erroneous start of the continuing disability review.* If we start a continuing disability review based solely on your work activity that results in a medical cessation determination, we will vacate the medical cessation determination if—
(i)You provide us evidence that establishes that you met the requirements of paragraph (i)(1) of this section as of the date of the start of your continuing disability review and that the start of the review was erroneous; and
(ii)We receive the evidence within 12 months of the date of the notice of the initial determination of medical cessation. 7. Section 404.1592a is amended by revising the second sentence of paragraph (a)(1), the sixth sentence of paragraph (a)(2)(i), and paragraph (a)(3) to read as follows: § 404.1592a The reentitlement period.
(a)* * *
(1)* * * When we decide whether this work is substantial gainful activity, we will apply all of the relevant provisions of §§ 404.1571-404.1576 including, but not limited to, the provisions for averaging earnings, unsuccessful work attempts, and deducting impairment-related work expenses, as well as the special rules for evaluating the work you do after you have received disability benefits for at least 24 months. * * * (2)(i) * * * Once we have determined that your disability has ceased during the reentitlement period because of the performance of substantial gainful activity as explained in paragraph (a)(1) of this section, we will not apply the provisions of §§ 404.1574(c) and 404.1575(d) regarding unsuccessful work attempts, the provisions of § 404.1574a regarding averaging of earnings, or the special rules in §§ 404.1574(b)(3)(iii) and 404.1575(e) for evaluating the work you do after you have received disability benefits for at least 24 months, to determine whether benefits should be paid for any particular month in the reentitlement period that occurs after the month your disability ceased.
(3)The way we will consider your work activity after your reentitlement period ends (see paragraph (b)(2) of this section) will depend on whether you worked during the reentitlement period and if you did substantial gainful activity.
(i)If you worked during the reentitlement period and we decided that your disability ceased during the reentitlement period because of your work under paragraph (a)(1) of this section, we will find that your entitlement to disability benefits terminates in the first month in which you engaged in substantial gainful activity after the end of the reentitlement period (see § 404.325). (See § 404.321 for when entitlement to a period of disability ends.) When we make this determination, we will consider only your work in, or earnings for, that month; we will not apply the provisions of §§ 404.1574(c) and 404.1575(d) regarding unsuccessful work attempts, the provisions of § 404.1574a regarding averaging of earnings, or the special rules in §§ 404.1574(b)(3)(iii) and 404.1575(e) for evaluating the work you do after you have received disability benefits for at least 24 months.
(ii)If we did not find that your disability ceased because of work activity during the reentitlement period, we will apply all of the relevant provisions of §§ 404.1571-404.1576 including, but not limited to, the provisions for averaging earnings, unsuccessful work attempts, and deducting impairment-related work expenses, as well as the special rules for evaluating the work you do after you have received disability benefits for at least 24 months, to determine whether your disability ceased because you performed substantial gainful activity after the reentitlement period. If we find that your disability ceased because you performed substantial gainful activity in a month after your reentitlement period ended, you will be paid benefits for the month in which your disability ceased and the two succeeding months. After those three months, your entitlement to a period of disability or to disability benefits terminates (see §§ 404.321 and 404.325). 8. Section 404.1594 is amended by adding a new sentence to the end of paragraph
(b)introductory text, adding a sentence to paragraph
(c)introductory text immediately following the first sentence, revising the third sentence of paragraph
(f)introductory text and adding a new fourth sentence, and adding a new paragraph
(i)to read as follows: § 404.1594 How we will determine whether your disability continues or ends.
(b)*Terms and definitions.* * * * In addition, see paragraph
(i)of this section if you work during your current period of entitlement based on disability or during certain other periods.
(c)*Determining medical improvement and its relationship to your abilities to do work.* * * * (In addition, see paragraph
(i)of this section if you work during your current period of entitlement based on disability or during certain other periods.) * * *
(f)*Evaluation steps.* * * * The steps are as follows. (See paragraph
(i)of this section if you work during your current period of entitlement based on disability or during certain other periods.)
(i)*If you work during your current period of entitlement based on disability or during certain other periods.*
(1)We will not consider the work you are doing or have done during your current period of entitlement based on disability (or, when determining whether you are entitled to expedited reinstatement of benefits under section 223(i) of the Act, the work you are doing or have done during or after the previously terminated period of entitlement referred to in section 223(i)(1)(B) of the Act) to be past relevant work under paragraph (f)(7) of this section or past work experience under paragraph (f)(8) of this section. In addition, if you are currently entitled to disability benefits under title II of the Social Security Act, we may or may not consider the physical and mental activities that you perform in the work you are doing or have done during your current period of entitlement based on disability, as explained in paragraphs (i)(2) and
(3)of this section.
(2)If you are currently entitled to disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability under title II of the Social Security Act, and at the time we are making a determination on your case you have received such benefits for at least 24 months, we will not consider the activities you perform in the work you are doing or have done during your current period of entitlement based on disability if they support a finding that your disability has ended. (We will use the rules in § 404.1590(i)(2) to determine whether the 24-month requirement is met.) However, we will consider the activities you do in that work if they support a finding that your disability continues or they do not conflict with a finding that your disability continues. We will not presume that you are still disabled if you stop working.
(3)If you are not a person described in paragraph (i)(2) of this section, we will consider the activities you perform in your work at any of the evaluation steps in paragraph
(f)of this section at which we need to assess your ability to function. PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED Subpart I—Determining Disability and Blindness [Amended] 9. The authority citation for subpart I of part 416 is revised to read as follows: Authority: Secs. 221(m), 702(a)(5), 1611, 1614, 1619, 1631(a), (c), (d)(1), and (p), and 1633 of the Social Security Act (42 U.S.C. 421(m), 902(a)(5), 1382, 1382c, 1382h, 1383(a), (c), (d)(1), and (p), and 1383(b); secs. 4(c) and 5, 6(c)-(e), 14(a), and 15, Pub. L. 98-460, 98 Stat. 1794, 1801, 1802, and 1808 (42 U.S.C. 421 note, 423 note, 1382h note). 10. Section 416.974 is amended by revising paragraph
(b)to read as follows: § 416.974 Evaluation guides if you are an employee.
(b)*Earnings guidelines.*
(1)*General.* If you are an employee, we first consider the criteria in paragraph
(a)of this section and § 416.976, and then the guides in paragraphs (b)(2) and
(3)of this section. When we review your earnings to determine if you have been performing substantial gainful activity, we will subtract the value of any subsidized earnings (see paragraph (a)(2) of this section) and the reasonable cost of any impairment-related work expenses from your gross earnings (see § 416.976). The resulting amount is the amount we use to determine if you have done substantial gainful activity. We will generally average your earnings for comparison with the earnings guidelines in paragraphs (b)(2) and
(3)of this section. See § 416.974a for our rules on averaging earnings.
(2)*Earnings that will ordinarily show that you have engaged in substantial gainful activity.* We will consider that your earnings from your work activity as an employee (including earnings from work in a sheltered workshop or a comparable facility especially set up for severely impaired persons) show that you have engaged in substantial gainful activity if:
(i)*Before January 1, 2001,* they averaged more than the amount(s) in Table 1 of this section for the time(s) in which you worked.
(ii)*Beginning January 1, 2001,* and each year thereafter, they average more than the larger of:
(A)The amount for the previous year, or
(B)An amount adjusted for national wage growth, calculated by multiplying $700 by the ratio of the national average wage index for the year 2 calendar years before the year for which the amount is being calculated to the national average wage index for the year 1998. We will then round the resulting amount to the next higher multiple of $10 where such amount is a multiple of $5 but not of $10 and to the nearest multiple of $10 in any other case. Table 1 For months: Your monthly earnings averaged more than: In calendar years before 1976 $200 In calendar year 1976 230 In calendar year 1977 240 In calendar year 1978 260 In calendar year 1979 280 In calendar years 1980-1989 300 January 1990-June 1999 500 July 1999-December 2000 700
(3)*Earnings that will ordinarily show that you have not engaged in substantial gainful activity.*
(i)*General.* If your average monthly earnings are equal to or less than the amount(s) determined under paragraph (b)(2) of this section for the year(s) in which you work, we will generally consider that the earnings from your work as an employee (including earnings from work in a sheltered workshop or comparable facility) will show that you have not engaged in substantial gainful activity. We will generally not consider other information in addition to your earnings except in the circumstances described in paragraph (b)(3)(ii) of this section.
(ii)*When we will consider other information in addition to your earnings.* Unless you meet the criteria set forth in section 416.990
(h)and (i), we will generally consider other information in addition to your earnings if there is evidence indicating that you may be engaging in substantial gainful activity or that you are in a position to control when earnings are paid to you or the amount of wages paid to you (for example, if you are working for a small corporation owned by a relative). Examples of other information we may consider include, whether—
(A)Your work is comparable to that of unimpaired people in your community who are doing the same or similar occupations as their means of livelihood, taking into account the time, energy, skill, and responsibility involved in the work; and
(B)Your work, although significantly less than that done by unimpaired people, is clearly worth the amounts shown in paragraph (b)(2) of this section, according to pay scales in your community. 11. Section 416.990 is amended by adding three new sentences to the end of paragraph (a), revising paragraph
(b)introductory text and paragraphs (b)(4), (b)(6), and (b)(8), and adding new paragraphs
(h)and
(i)to read as follows: § 416.990 When and how often we will conduct a continuing disability review.
(a)*General.* * * * In paragraphs
(b)through
(g)of this section, we explain when and how often we conduct continuing disability reviews for most individuals. In paragraph
(h)of this section, we explain special rules for some individuals who are participating in the Ticket to Work program. In paragraph
(i)of this section, we explain special rules for some individuals who work and have received social security benefits as well as supplemental security income payments.
(b)*When we will conduct a continuing disability review.* Except as provided in paragraphs
(h)and
(i)of this section, we will start a continuing disability review if—
(4)You return to work;
(6)You tell us that—
(i)You have recovered from your disability; or
(ii)You have returned to work;
(8)Someone in a position to know of your physical or mental condition tells us any of the following, and it appears that the report could be substantially correct:
(i)You are not disabled or blind; or
(ii)You are not following prescribed treatment; or
(iii)You have returned to work; or
(iv)You are failing to follow the provisions of the Social Security Act or these regulations;
(h)*If you are participating in the Ticket to Work program.* If you are participating in the Ticket to Work program, we will not start a continuing disability review during the period in which you are using a ticket. See subpart C of part 411 of this chapter.
(i)*If you are working and have received social security disability benefits for at least 24 months.*
(1)*General.* Notwithstanding the provisions in paragraphs (b)(4), (b)(5), (b)(6)(ii), (b)(7)(ii), and (b)(8)(iii) of this section, we will not start a continuing disability review based solely on your work activity if—
(i)You are currently entitled to disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability under title II of the Social Security Act (see subpart D of part 404 of this chapter); and
(ii)You have received such benefits for at least 24 months (see paragraph (i)(2) of this section).
(2)*The 24-month requirement.*
(i)The months for which you have actually received disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability that you were due under title II of the Social Security Act, or for which you have constructively received such benefits, will count for the 24-month requirement under paragraph (i)(1)(ii) of this section, regardless of whether the months were consecutive. We will consider you to have constructively received a benefit for a month for purposes of the 24-month requirement if you were otherwise due a social security disability benefit for that month and your monthly benefit was withheld to recover an overpayment. Any month for which you were entitled to social security disability benefits but for which you did not actually or constructively receive a benefit payment will not be counted for the 24-month requirement. Months for which your social security disability benefits are continued under § 404.1597a pending reconsideration and/or a hearing before an administrative law judge on a medical cessation determination will not be counted for the 24-month requirement. Months for which you received only supplemental security income payments will not be counted for the 24-month requirement.
(ii)In determining whether paragraph (i)(1) of this section applies, we consider whether you have received disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability under title II of the Social Security Act for at least 24 months as of the date on which we start a continuing disability review. For purposes of this provision, the date on which we start a continuing disability review is the date on the notice we send you that tells you that we are beginning to review your disability case.
(3)*When we may start a continuing disability review even if you have received social security disability benefits for at least 24 months.* Even if you meet the requirements of paragraph (i)(1) of this section, we may still start a continuing disability review for a reason(s) other than your work activity. We may start a continuing disability review if we have scheduled you for a periodic review of your continuing disability, we need a current medical or other report to see if your disability continues, we receive evidence which raises a question as to whether your disability or blindness continues, or you fail to follow the provisions of the Social Security Act or these regulations. For example, we will start a continuing disability review when you have been scheduled for a medical improvement expected diary review, and we may start a continuing disability review if you failed to report your work to us.
(4)*Erroneous start of the continuing disability review.* If we start a continuing disability review based solely on your work activity that results in a medical cessation determination, we will vacate the medical cessation determination if—
(i)You provide us evidence that establishes that you met the requirements of paragraph (i)(1) of this section as of the date of the start of your continuing disability review and that the start of the review was erroneous; and
(ii)We receive the evidence within 12 months of the date of the notice of the initial determination of medical cessation. 12. Section 416.994 is amended by revising the section heading, adding a new sentence to the end of paragraph (b)(1) introductory text, adding a sentence to paragraph (b)(2) introductory text immediately following the first sentence, revising the third sentence of paragraph (b)(5) introductory text and adding a new sentence to the end of the paragraph, and adding a new paragraph (b)(8) to read as follows: § 416.994 How we will determine whether your disability continues or ends, disabled adults.
(b)*Disabled persons age 18 or over (adults).* * * *
(1)*Terms and definitions.* * * * In addition, see paragraph (b)(8) of this section if you work during your current period of eligibility based on disability or during certain other periods.
(2)*Determining medical improvement and its relationship to your abilities to do work.* * * * (In addition, see paragraph (b)(8) of this section if you work during your current period of eligibility based on disability or during certain other periods.) * * *
(5)*Evaluation steps.* * * * The steps are as follows. (See paragraph (b)(8) of this section if you work during your current period of eligibility based on disability or during certain other periods.)
(8)*If you work during your current period of eligibility based on disability or during certain other periods.*
(i)We will not consider the work you are doing or have done during your current period of eligibility based on disability (or, when determining whether you are eligible for expedited reinstatement of benefits under section 1631(p) of the Act, the work you are doing or have done during or after the previously terminated period of eligibility referred to in section 1631(p)(1)(B) of the Act) to be past relevant work under paragraph (b)(5)(vi) of this section or past work experience under paragraph (b)(5)(vii) of this section. In addition, if you are currently entitled to disability benefits under title II of the Social Security Act, we may or may not consider the physical and mental activities that you perform in the work you are doing or have done during your current period of entitlement based on disability, as explained in paragraphs (b)(8)(ii) and
(iii)of this section.
(ii)If you are currently entitled to disability insurance benefits as a disabled worker, child's insurance benefits based on disability, or widow's or widower's insurance benefits based on disability under title II of the Social Security Act, and at the time we are making a determination on your case you have received such benefits for at least 24 months, we will not consider the activities you perform in the work you are doing or have done during your current period of entitlement based on disability if they support a finding that your disability has ended. (We will use the rules in § 416.990(i)(2) to determine whether the 24-month requirement is met.) However, we will consider the activities you do in that work if they support a finding that your disability continues or they do not conflict with a finding that your disability continues. We will not presume that you are still disabled if you stop working.
(iii)If you are not a person described in paragraph (b)(8)(ii) of this section, we will consider the activities you perform in your work at any of the evaluation steps in paragraph (b)(5) of this section at which we need to assess your ability to function. However, we will not consider the work you are doing or have done during your current period of eligibility based on disability (or, when determining whether you are eligible for expedited reinstatement of benefits under section 1631(p) of the Act, the work you are doing or have done during or after the previously terminated period of eligibility referred to in section 1631(p)(1)(B) of the Act) to be past relevant work under paragraph (b)(5)(vi) of this section or past work experience under paragraph (b)(5)(vii) of this section. Subpart N—Determinations, Administrative Review Process, and Reopening of Determinations and Decisions [Amended] 13. The authority citation for subpart N continues to read as follows: Authority: Secs. 702(a)(5), 1631, and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b). 14. Section 416.1403 is amended by removing the word “and” at the end of paragraph (a)(22), replacing the period at the end of paragraph (a)(23) with “; and”, and adding new paragraph (a)(24) to read as follows: § 416.1403 Administrative actions that are not initial determinations.
(a)* * *
(24)Starting or discontinuing a continuing disability review; and [FR Doc. E6-19255 Filed 11-16-06; 8:45 am] BILLING CODE 4191-02-P SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404 and 416 [Docket No. SSA-2006-0099] RIN 0960-AG10 Rules for the Issuance of Work Report Receipts, Payment of Benefits for Trial Work Period Service Months After a Fraud Conviction, Changes to the Student Earned Income Exclusion, and Expansion of the Reentitlement Period for Childhood Disability Benefits AGENCY: Social Security Administration. ACTION: Final rules. SUMMARY: We are revising our rules to reflect and implement sections 202, 208, 420A, and 432 of the Social Security Protection Act of 2004 (the SSPA). Section 202 of the SSPA requires us to issue a receipt each time you or your representative report a change in your work activity or give us documentation of a change in your earnings if you receive benefits based on disability under title II or title XVI of the Social Security Act (the Act). Section 208 changes the way we pay benefits during the trial work period if you are convicted by a Federal court of fraudulently concealing your work activity. Section 420A changed the law to allow you to become reentitled to childhood disability benefits under title II at any time if your previous entitlement to childhood disability benefits was terminated because of the performance of substantial gainful activity. Section 432 changes the way we decide if you are eligible for the student earned income exclusion. We will also apply the student earned income exclusion when determining the countable income of an ineligible spouse or ineligible parent. We are also changing the SSI student policy to include home schooling as a form of regular school attendance. DATES: These final rules are effective December 18, 2006. FOR FURTHER INFORMATION CONTACT: Cindy Duzan, Policy Analyst, Social Security Administration, 6401 Security Boulevard, Baltimore, Maryland 21235-6401,
(410)965-4203, or TTY
(410)966-5609 for information about these final rules. For information on eligibility or filing for benefits, call our national toll-free number 1
(800)772-1213 or TTY 1
(800)325-0778. You may also contact 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.* We are amending our rules to reflect and implement sections 202, 208, 420A, and 432 of the SSPA. These changes apply to you if you engage in work activity while entitled to or eligible for benefits based on disability under title II or title XVI of the Act. We are also changing the SSI student policy to include home schooling as a form of regular school attendance. This may allow more individuals to benefit from the student earned income exclusion. This change, which is separate from the changes being made to reflect and implement the SSPA, will make the title II and title XVI programs uniform with respect to home schooling. The title II program recognizes home schooling as a form of school attendance. We will also apply the student earned income exclusion when determining the countable income of an ineligible spouse or ineligible parent. When Will We Start To Use These Rules? The effective date of the provisions of the SSPA that are the subject of these final rules are set forth below and take effect on the dates mandated by statute. The changes regarding home schooling and the extension of the student earned income exclusion to ineligible individuals will take effect 30 days after publication of these rules in the **Federal Register** . What Is the Purpose of Section 202? Section 202 of the SSPA requires us to issue a receipt to you or your representative each time you or your representative report a change in your work activity or give us evidence of a change in your earnings, such as your pay stubs, if you receive benefits based on disability under title II or title XVI of the Act. The law provides that we are to issue a receipt each time you or your representative report to us until we establish a centralized computer file that will electronically record the information about the change in your work activity and the date that you make your report. After the centralized computer file is implemented, we will continue to issue receipts to you or your representative automatically for a trial period of at least 6 months during which we will assess the effectiveness of our centralized computer file. Once we determine that the automatic issuance of work receipts is no longer necessary, we will continue to issue receipts to you or your representative upon request. Adequate notice will be provided when this procedural change is put in place. In the past, the reports you gave to us about your work activity may not have been processed timely, resulting in processing delays. This might have caused us to pay benefits to you incorrectly, without considering the effect your work and earnings may have had on your benefits, causing you to become overpaid. We are implementing a new centralized computer system which will create an electronic record of the work information that you report to us. This will help us ensure that we fulfill our responsibility to process your earnings reports and pay benefits to you correctly. We currently expect this centralized computer system to be operational in the summer of 2006. Issuing a receipt to you when you report your work or earnings will provide you with proof that you properly fulfilled your responsibility to report your earnings to us. Why Must You Report Your Work Activity? If you receive benefits based on disability under title II of the Act or are eligible for benefits under title XVI, you are required to report changes in your work activity and earnings to us. (See §§ 404.1588 and 416.708.) Your earnings can affect your eligibility for benefits or the amount of your benefits. You can report your work to us: • By phone to our toll free number; • In person or by phone to your local office; or • By mailing your pay stubs to your local office. We are also making efforts to expand the ways you can report information to us. What Is the Effective Date of Section 202? The statutory change that requires us to issue receipts every time you or your representative report a change in your work activity or give us documentation of a change in your earnings is effective as soon as possible, but no later than March 2, 2005. We are currently issuing receipts to you or your representative and will continue to do so at least until we establish a centralized computer file to record the information that you give us and the date that you make your report. Once the centralized computer file is in place, we will continue to issue receipts to you or your representative if you request us to do so. What Is the Purpose of Section 208? Section 208 of the SSPA provides that if you are convicted by a Federal court of fraudulently concealing your work activity during the trial work period, no benefits are payable for any trial work period service month (generally a month of work activity, see § 404.1592) that occurred in or after March 2004 and before the date of your conviction. Section 208 of the SSPA will help to deter fraud within the Social Security program by prohibiting payment for trial work period service months to disabled individuals who are convicted of fraudulently concealing work activity. What Is the Trial Work Period? The trial work period allows a title II beneficiary to test his or her ability to work for at least 9 months and still be considered disabled. During your trial work period, you continue to be entitled to receive your Social Security disability insurance benefits regardless of how high your earnings might be so long as you continue to have a disabling impairment. The trial work period continues until you accumulate 9 months (not necessarily consecutive) in which you performed “services” (i.e., work activity) within a rolling 60-consecutive-month period. We use this “services” rule to count trial work period months. Under section 222(c)(2) of the Act and § 404.1592(b) of the regulations, services means any activity (whether legal or illegal), which is done in employment or self-employment for pay or profit, or is the kind normally done for pay or profit. We generally use earnings guidelines to evaluate whether the work activity you are performing as an employee or self-employed person is services for the trial work period. We consider your work in a particular month to be services if you earn more than $620 in that month for the year 2006, or work more than 80 self-employed hours in that month. The dollar amount is adjusted each year based on the national average wage. What Is the Effective Date of Section 208? The statutory change provides that an individual is not entitled to receive title II disability benefits for trial work period service months that occur in or after March 2004 and before the date of conviction by a Federal court of fraudulently concealing work activity during that trial work period. What Is the Purpose of Section 420A? Section 420A of the SSPA applies to you if you are a disabled adult, your disability began before the age of 22, and you became eligible for “childhood disability benefits” (i.e., benefits for disabled adult children) under title II of the Act once you reached your 18th birthday. Section 420A of the SSPA provides that if your previous entitlement to childhood disability benefits under title II of the Act ended due to the performance of substantial gainful activity, you may become reentitled to childhood disability benefits at any time if you become disabled again and you meet other requirements for reentitlement as described in § 404.351. Prior to the effective date of section 420A, if childhood disability benefits were terminated because disability ceased, you could become reentitled to benefits only if you became disabled again within 7 years of the most recent termination. Section 420A removed a significant disincentive to work for childhood disability beneficiaries by removing the 7-year restriction on reentitlement for individuals whose entitlement to childhood disability benefits was terminated due to the performance of substantial gainful activity. The 7-year restriction continues to apply to beneficiaries whose previous entitlement to childhood disability benefits terminated because of medical improvement. What Is the Effective Date of Section 420A? The statutory change that removed the 7-year restriction on reentitlement to childhood disability benefits under title II of the Act, if the previous entitlement terminated due to the performance of substantial gainful activity, became effective with respect to benefits payable for months beginning October 2004. What Is the Purpose of Section 432? Section 432 of the SSPA changes who is eligible for the student earned income exclusion under title XVI of the Act. The law increases the number of persons eligible for the exclusion by eliminating the requirement that you must meet the definition of a child under our SSI rules to be eligible for this exclusion. Specifically, section 432 of the SSPA removes the restriction that you must be unmarried and not head of your own household to qualify. You no longer need to be considered a “child” to get the student earned income exclusion, you only must be under the age of 22, and, as before, regularly attending a school, college, or university, or a course of vocational or technical training to prepare for gainful employment. What Is the Student Earned Income Exclusion? The student earned income exclusion is a provision that allows us to exclude a greater amount of your earned income if you are a student than we do under our usual income counting rules. If you meet the definition of child for SSI and you are regularly attending school, we exclude a greater amount of your earned income when determining your eligibility for, and the amount of, benefits. For the year 2006, we do not count up to $1,460 of earned income per month, up to a maximum yearly exclusion of $5,910. These dollar amounts are adjusted each year by the cost-of-living adjustment
(COLA)that is used to adjust the SSI Federal Benefit Rate. Section 432 eliminated the requirement that you meet the definition of a child to be eligible for the student earned income exclusion. Who Can Use the Student Earned Income Exclusion for the Period Before April 1, 2005? Before April 1, 2005, (that is, before the changes made by section 432 of the SSPA), you could qualify for the student earned income exclusion if you were: • Under age 22; • Unmarried; • Not the head of your own household; and • Regularly attending school, college or university, or a course of vocational or technical training designed to prepare you for gainful employment. Section 416.1861 provides that you are a student if you are regularly attending school or college, or training that is designed to prepare you for a paying job, if you are enrolled for one or more courses of study and attend class
(1)in a college or university for at least 8 hours a week under a semester or quarter system,
(2)in grades 7-12 for at least 12 hours a week, or
(3)in a course of training to prepare for a paying job, and attending that training for at least 15 hours a week if the training involves shop practice or 12 hours a week if it does not involve shop practice. Prior to this final rulemaking, § 416.1861 did not specifically address home schooling as a form of regular school attendance. However, § 404.367 recognizes, as full-time school attendance students, those who are instructed at home in accordance with a home school law of the State or other jurisdiction in which they reside. How Do Section 432 and the Revision Regarding Home Schooling Change the Student Earned Income Exclusion? Section 432 of the SSPA eliminates the requirement that you must be a child to qualify for the student earned income exclusion. Specifically, it removes the requirement that you must be unmarried and not the head of your own household. These final rules regarding home schooling allow you to be considered a student regularly attending school if you are instructed at home in grades 7-12 in accordance with a home school law of the State or other jurisdiction in which you live and for at least 12 hours a week. Allowing home schooling as a form of regular school attendance will make the title II and title XVI programs uniform with respect to home schooling. We hope that our rule change to consider home schooling, and the statute's removal of the child requirement, will increase the number of persons who can benefit from the student earned income exclusion. Will the Student Earned Income Exclusion Apply to Deemors? Yes. Section 1614(f) of the Act requires that when we determine an individual's eligibility for SSI benefits, we must consider the income and resources of an ineligible spouse living in the same household, or, in the case of a child under the age of 18, the income and resources of an ineligible parent living in the same household. We use the term “deeming” to describe this process of considering part of an ineligible spouse's or parent's income and resources to be the individual's own income and resources. Deeming an ineligible parent's income and resources to a child eligible for SSI benefits is only done if the child is under age 18 and is subject to parental control. Section 1614(f) also grants the Commissioner the discretion to not deem the income and resources of an ineligible spouse or parent to an eligible individual when the Commissioner determines that deeming would be inequitable under the circumstances. In addition to adding to our regulations the change in how we determine an eligible individual's income required by section 432 of the SSPA, we will apply this earned income exclusion when determining the countable income of an ineligible spouse or ineligible parent who is a student, that is, someone who is under age 22 and who regularly attends school or college or training designed to prepare them for a paying job. When more than one individual in a household qualifies for the student earned income exclusion—for example, in instances where a deemor and a deemor's disabled child are both eligible for the student earned income exclusion—our operating procedures contain instructions to apply the entire student earned income exclusion amount to the single household. Extending this student earned income exclusion to the deeming process, as authorized by section 1614(f) of the Act, is consistent with the SSI program's longstanding treatment of income and resources of spouses and parents comparably to the way that income and resources of an eligible individual would be treated. It also provides incentives to encourage work and education to ineligible individuals living with beneficiaries. What Is the Effective Date of Section 432 and the Revision Regarding Home Schooling? The statutory changes that allow those who are married and the head of a household to also qualify for the student earned income exclusion are effective with benefits payable April 1, 2005. The changes to allow home schooling as a form of regular school attendance and the extension of the student earned income exclusion to ineligible individuals will be effective 30 days after publication of these final rules. Explanation of Changes We are revising several of our rules in subparts D, E, J, and P of part 404 and subparts G, K, N, and R of part 416 to: • Reflect the statutory change that requires us to issue receipts to you or your representative when you or your representative report changes in your work activity or earnings or give us documentation of those changes until we establish a centralized computer file to record the information you report to us and the date you report it; • Explain that disability benefits are not payable for trial work period service months if you are convicted by a Federal court of fraudulently concealing your work activity during that trial work period; • Reflect the statutory change that expands the number of persons who can use the student earned income exclusion by removing the requirement that you must be a child, unmarried, and not the head of your own household; • Expand the number of persons who can use the student earned income exclusion by allowing home schooling as a form of regular school attendance; • Extend application of the student earned income exclusion to the income of an ineligible spouse and ineligible parent for deeming purposes; and • Reflect the statutory change that eliminates the 7-year time limit on reentitlement to childhood disability benefits when the prior entitlement terminated due to the performance of substantial gainful activity. The following is an explanation of the specific changes we are making and the reasons for these changes. Section 404.351 Who May Be Reentitled to Child's Benefits We are adding a new paragraph
(d)to explain that, effective with respect to benefits payable for months beginning October 2004, you can be reentitled to childhood disability benefits at any time if your prior entitlement terminated because you ceased to be under a disability due to the performance of substantial gainful activity. The regulatory language in this final rule has been changed from the language that appeared in the notice of proposed rulemaking. This was done in response to a public comment that the regulatory language in the proposed rules was difficult to decipher and should be rewritten for clarity. Section 404.401a When We Do Not Pay Benefits Because of a Disability Beneficiary's Work Activity We are revising the last sentence in § 404.401a to clarify that earnings from work activity during a trial work period will not stop benefits except as provided in § 404.471. Section 404.471 Nonpayment of Disability Benefits for Trial Work Period Service Months Upon a Conviction of Fraudulently Concealing Work Activity We are adding a new § 404.471 to explain that disability benefits will not be payable for trial work period service months if you are convicted by a Federal court of fraudulently concealing your work activity during the trial work period. As explained in § 404.1592, the trial work period is a period during which you may test your ability to work and still continue to receive disability benefits if you still have a disabling impairment, no matter how much you are earning. Under this change, which reflects section 208 of the SSPA of 2004, if you are convicted in Federal court of fraudulently concealing your work activity during your trial work period, disability benefits are not payable for any trial work period service months beginning March 2004 that occur prior to that conviction. Benefits already received that are determined not payable because of the Federal court decision are considered an overpayment on the record. Consistent with section 208, we explain in § 404.471(b) what is meant by fraudulently concealing work activity. You can be found to be fraudulently concealing work activity if you provide false information concerning the amount of your earnings, engage in work activity under another identity while receiving disability benefits, or take actions to conceal your work activity with the intent of obtaining benefits in excess of amounts due. Section 404.903 Administrative Actions That Are Not Initial Determinations We are adding a new paragraph
(x)to § 404.903 to explain that the receipt we give you or your representative as a result of a report of a change in your work activity or earnings is not an initial determination. As explained in existing § 404.903, administrative actions that are not initial determinations may be reviewed by us, but they are not subject to the administrative review process provided by subpart J of part 404, and they are not subject to judicial review. The receipt will summarize the information that you give us, and we will ask you to review the information contained in the receipt for accuracy and to tell us if the information is wrong. If our information is wrong, we will correct our records based on the new information that you give us. In addition, we will give you advance notice if we determine that you are not now disabled based on what you told us about your work activity, as explained in § 404.1595. Section 404.1588 Your Responsibility to Tell Us of Events That May Change Your Disability Status We are designating the undesignated current paragraph as paragraph
(a)and adding a title: *Your responsibility to report changes to us* , and redesignating paragraphs (a), (b), (c), and
(d)as (1), (2), (3), and (4). We are also adding a new paragraph (b), Our *responsibility when you report your work to us* , that clarifies how we will respond when you or your representative report a change in your work activity to us. Section 404.1588(a) explains that if you receive benefits based on disability, you must report to us when there is a change in your work activity; for example, you return to work, or there is an increase in your earnings or the amount of work you are doing. New paragraph
(b)explains that we will issue a receipt to you or your representative when you or your representative report a change in your work activity or earnings, at least until a centralized computer file that records the information that you give us and the date that you make your report is in place. Once the centralized computer file is in place, we will continue to issue receipts to you or your representative if you request us to do so. Section 404.1592 The Trial Work Period In § 404.1592 we are adding a new paragraph (f), *Nonpayment of benefits for trial work period service months* , to clarify that benefits will not be payable for trial work period service months if you have been convicted by a Federal court of fraudulently concealing your work activity. We are also adding a cross-reference to the new § 404.471. Section 416.708 What You Must Report We are amending the last paragraph of paragraph
(c)by adding two new sentences to explain how we will respond when you report a change in your earned income. Section 416.708(c) explains that if you receive SSI benefits, you must report to us when there is a change in your income. The new sentences added to paragraph
(c)explain that if you receive SSI benefits based on disability, we will issue a receipt to you or your representative when you or your representative report a change in your work activity or your earned income until we establish a centralized computer file to record the information that you give us and the date that you make your report. Once the centralized computer file is in place, we will continue to issue receipts to you or your representative if you request us to do so. Section 416.1112 Earned Income We Do Not Count We are amending paragraph (c)(3) to reflect the statutory change eliminating the requirement that you must be a child to qualify for the student earned income exclusion. Section 416.1161 Income of an Ineligible Spouse, Ineligible Parent, and Essential Person for Deeming Purposes We are amending § 416.1161 by adding a new paragraph (a)(27) to exclude certain earned income of a student as provided by section 432 from the income of an ineligible spouse and ineligible parent for deeming purposes. Section 416.1403 Administrative Actions That Are Not Initial Determinations We are adding a new paragraph (a)(22) to § 416.1403 to explain that the receipt we give you or your representative as a result of your report of work activity or earnings is not an initial determination. As explained in § 416.1403(a), administrative actions that are not initial determinations may be reviewed by us, but they are not subject to the administrative review process provided by subpart N, and they are not subject to judicial review. The receipt will summarize the information that you or your representative give us and we will ask you to review the information contained in the receipt for accuracy and tell us if the information is wrong. If our information is wrong, we will correct our records based on the new information that you give us. In addition, we will give you advance notice if we suspend or reduce your benefit amount based on what you told us about your earnings as explained in § 416.1336. Section 416.1861 Deciding Whether You Are a Child: Are You a Student? We are adding a new paragraph
(b)to § 416.1861 to add home schooling conducted in accordance with a home school law of the State or other jurisdiction in which you live as a form of regular school attendance for purposes of title XVI. We are redesignating paragraphs (b), (c), (d), (e), and
(f)as paragraphs (c), (d), (e), (f), and (g). We are also amending current paragraph
(e)to remove references to earnings because we discuss student earnings in a new section. We are adding a new undesignated centered heading after § 416.1866 to read, Who is Considered a Student for Purposes of the Student Earned Income Exclusion. Section 416.1870 Effect of Being Considered a Student We are adding a new § 416.1870 to explain that if we consider you to be a student, we will not count all of your earned income when we determine your SSI eligibility and benefit amount. Section 416.1872 Who Is Considered a Student We are adding a new § 416.1872 to explain that we consider you to be a student if you are under 22 years old and you are regularly attending school or college or training that is designed to prepare you for a paying job. Section 416.1874 When We Need Evidence That You Are a Student We are adding a new § 416.1874 to explain what evidence we need if you are a student and you expect to earn over $65 in any month. Public Comments On October 18, 2005, we published a Notice of Proposed Rulemaking
(NPRM)in the **Federal Register** at 70 FR 60463 and provided a 60-day comment period. We received comments from two organizations and one individual. We carefully considered the comments received on the proposed rules in publishing these final rules. The comments we received and our responses to the comments are set forth below. Although we condensed, summarized, or paraphrased the comments, we believe we have expressed the views accurately and have responded to all the relevant issues raised. *Comment:* One commenter suggested that the requirement to issue receipts should stay intact even after the establishment of a centralized computer file which records the date of submission of the work information. The receipt provides proof to the beneficiary that he or she has met their reporting requirements. *Response:* We considered this comment but decided not to include this requirement in the final rules. The regulatory language as written accurately reflects the requirements of the legislation. The statute provides that we must issue a receipt to you until we implement a centralized computer file which records the date you (or your representative) reported to us regarding a change in your work activity, and we are in the process of implementing such a centralized computer file. The final regulations provide that we will give you a paper receipt if you ask us to, but the statute does not require us to issue such receipts after the centralized computer file is in place. *Comment:* One commenter suggested that the language in section 404.1588(b) is unclear about whether beneficiaries must request a receipt each time a report of a change in work activity is made, or if one blanket request will be logged into the centralized computer file to generate a receipt each time a report is made. The commenter recommends SSA should adopt the latter policy. *Response:* We considered this comment but decided not to include language within the rules detailing how a request for a receipt is to be made after the centralized computer file is implemented. Instructions for how to request receipts will be provided prior to the implementation of a centralized computer file and will be made readily available to those beneficiaries and their representatives who are interested in receiving receipts when they report work activity changes. *Comment:* One commenter urged SSA to include language from the preamble in the text of the regulations regarding the content of the receipt. The preamble states that the receipt will include details about the work activity or earnings information reported by the beneficiary, that we will ask the beneficiary to review the information and tell us if we are wrong, and correct our records based on the new information. The commenter further recommended that we specifically state in the regulations that SSA will tell beneficiaries that they may request a receipt, as the inclusion of this information will help beneficiaries know exactly what to expect and what is expected of them. *Response:* We considered this comment but decided not to include language within the rules which prescribes in detail what will be contained within the receipt. Such information will be available to beneficiaries and their representatives elsewhere. The receipts currently contain a summary of the work activity or earnings information reported as well as contact information for the local Social Security office. Also, we do not believe it is necessary to include language within the regulation requiring SSA to tell beneficiaries of the option to request a receipt. We are currently issuing a receipt each time work activity is reported whether or not one is requested. After the centralized computer file is in place, we will inform beneficiaries and their representatives through our disability publications that they may, upon request, receive a receipt whenever they report work activity to us. *Comment:* One commenter stated that overpayments resulting from SSA's failure to take timely action on work reports remain a major barrier to beneficiaries' ability to utilize work incentive programs. The commenter urged SSA to establish a reliable, efficient method of collecting and recording, in a timely manner, information about earnings, and take timely action to adjust benefits when necessary. The commenter also recommended that Congress require SSA to forgive overpayments if the beneficiary is not notified of the overpayment within a reasonable period of time. *Response:* We completed the implementation of an electronic system which issues receipts in response to work reports if you receive benefits based on disability under title II or title XVI. In addition, this system records work report information and automates the control of title II work issue continuing disability reviews. A similar system for automation of title XVI earned income inputs is currently in development. We expect that these systems will help us to better control work reports and help us to ensure that we take timely action on those work reports. The recommendation that SSA forgive overpayments is beyond the scope of these rules. *Comment:* One commenter suggested that the provisions of section 208 of the SSPA are flawed because beneficiaries do not know they are in a trial work period. Reporting requirements are not clear and more needs to be done to train SSA personnel on ensuring beneficiaries know about their responsibility to report work activity. *Response:* We considered this comment but decided that changes to the language of section 404.471 are not necessary or appropriate. The nonpayment for trial work period service months is applicable only if a beneficiary is convicted by a Federal court of fraudulently concealing work activity. Section 404.471 further specifies that a beneficiary may be found to be fraudulently concealing work activity if he or she provides false information to SSA, works under another identity, or takes action to conceal work activity with the intent of fraudulently receiving benefits. The provisions for nonpayment of trial work period service months do not apply simply because a beneficiary fails to understand his or her reporting responsibilities. The language in section 404.471 makes that sufficiently clear without further addition. *Comment:* One commenter suggested that the language of section 404.351(d) is unclear and should be rewritten for clarity to include the explanatory language of the preamble. The commenter further suggested that it would be helpful if all of section 404.351 was rewritten in clear language, as section 404.351(c) is also difficult to decipher. Such a rewrite would give beneficiaries concrete information as to what will happen to their childhood disability benefits under different circumstances. *Response:* We agree that the language of Section 404.351(d) is unclear and we have rewritten the paragraph to include the explanatory language contained in the preamble. However, we have not rewritten the entire section. We believe that the new paragraph
(d)provides a clear explanation of the effect of the Social Security Protection Act legislation. 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 a significant regulatory action under Executive Order 12866, as amended by Executive Order 13258. Thus, they were reviewed by OMB. Regulatory Flexibility Act We certify that these final rules will not have a significant economic impact on a substantial number of small entities because they affect only individuals. Thus, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required. Paperwork Reduction Act This final rule contains information collection requirements that require Office of Management and Budget clearance under the Paperwork Reduction Act of 1995 (PRA). As required by the PRA, SSA has submitted a clearance request to OMB for approval. SSA will publish the OMB number and expiration date upon approval. SSA published a notice of proposed rulemaking on October 18 at 70 FR 60463 and 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. We did not receive comments on the issues described above. Note: Please note that a new section containing public reporting requirements, § 416.1874, has been added since the publication of the Notice of Proposed Rulemaking (burden information for this section follows). Therefore, we are soliciting public comments about this section only on 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. Burden information for section 1874: Annual number of responses Frequency of response Average burden per response (minutes) Estimated annual burden (hours) 15,000 1 10 2,500 *Comments:* on this section should be submitted/and or faxed to the Office of Management and Budget and the Social Security Administration at the following addresses/numbers: Office of Management and Budget, Attn: Desk Officer for SSA, New Executive Office Building, Room 10230, 725 17th St., NW., Washington, DC 20530, Fax Number: 202-395-6974. Social Security Administration, Attn: SSA Reports Clearance Officer, Rm. 1338 Annex building, 6401 Security Blvd., Baltimore, MD 21235-6401, Fax Number: 410-965-6400. Comments can be received between 30 and 60 days after publication of this notice and will be most useful if received by SSA within 30 days of publication. To receive a copy of the OMB clearance package, you may call the SSA Reports Clearance Officer on 410-965-0454. (Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; 96.006, Supplemental Security Income) List of Subjects 20 CFR Part 404 Administrative practice and procedure, Blind, Disability benefits, Old-Age, Survivors and Disability Insurance, Reporting and recordkeeping requirements, Social Security. 20 CFR Part 416 Administrative practice and procedure, Aged, Blind, Disability benefits, Public assistance programs, Reporting and recordkeeping requirements, Supplemental Security Income (SSI). Jo Anne B. Barnhart, Commissioner of Social Security. For the reasons set out in the preamble, we are amending subparts D, E, J, and P of part 404 and subparts G, K, N, and R of part 416 of chapter III of title 20 of the Code of Federal Regulations as set forth below: PART 404—FEDERAL OLD-AGE SURVIVORS AND DISABILITY INSURANCE (1950- ) Subpart D—[Amended] 1. The authority citation for subpart D continues to read as follows: Authority: Secs. 202, 203(a) and (b), 205(a), 216, 223, 225, 228(a)-(e), and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 403
(a)and (b), 405(a), 416, 423, 425, 428(a)-(e), and 902(a)(5)). 2. Section 404.351 is amended by removing “; or” at the end of paragraph
(b)and replacing it with a period; removing the period at the end of paragraph
(c)and replacing it with “; or”, and adding a new paragraph
(d)to read as follows: § 404.351 Who may be reentitled to child's benefits.
(d)With respect to benefits payable for months beginning October 2004, you can be reentitled to childhood disability benefits at anytime if your prior entitlement terminated because you ceased to be under a disability due to the performance of substantial gainful activity and you meet the other requirements for reentitlement. The 84-month time limit in paragraph
(c)in this section continues to apply if your previous entitlement to childhood disability benefits terminated because of medical improvement. Subpart E—[Amended] 3. The authority citation for subpart E is revised to read as follows: Authority: Secs. 202, 203, 204(a) and (e), 205(a) and (c), 216(l), 222(c), 223(e), 224, 225, 702(a)(5), and 1129A of the Social Security Act (42 U.S.C. 402, 403, 404(a) and (e), 405(a) and (c), 416(l), 422(c), 423(e), 424a, 425, 902(a)(5), and 1320a-8a and 48 U.S.C. 1801. 4. Section 404.401a is amended by revising the last sentence to read as follows: § 404.401a When we do not pay benefits because of a disability beneficiary's work activity. * * * Except as provided in § 404.471, earnings from work activity during a trial work period will not stop your benefits. 5. Add a new § 404.471 to read as follows: § 404.471 Nonpayment of disability benefits for trial work period service months upon a conviction of fraudulently concealing work activity.
(a)*Nonpayment of benefits during the trial work period.* Beginning with work activity performed in March 2004 and thereafter, if you are convicted by a Federal court of fraudulently concealing your work activity and the concealment of the work activity occurred while you were in a trial work period, monthly disability benefits under title II of the Social Security Act are not payable for months in which you performed services during that trial work period prior to the conviction (see § 404.1592 for a definition of a trial work period and services). Benefits already received for months of work activity in the trial work period prior to the conviction and in the same period of disability during which the fraudulently concealed work activity occurred, will be considered an overpayment on the record.
(b)*Concealment of work activity.* You can be found to be fraudulently concealing work activity if—
(1)You provide false information to us concerning the amount of earnings you received or are receiving for a particular period;
(2)You received or are receiving disability benefits while engaging in work activity under another identity (this would include working under another social security number or a forged social security number); or
(3)You take other actions to conceal work activity with the intent of fraudulently obtaining benefits in excess of amounts that are due. Subpart J—[Amended] 6. The authority citation for subpart J is revised to read as follows: Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 221, 223(i), 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 404(f), 405(a), (b), (d)-(h), and (j), 421, 423(i), 425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 421 note); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note). 7. Section 404.903 is amended by adding a new paragraph
(aa)to read as follows: § 404.903 Administrative actions that are not initial determinations.
(aa)Issuing a receipt in response to your report of a change in your work activity. Subpart P—[Amended] 8. The authority citation for subpart P is revised to read as follows: Authority: Secs. 202, 205(a), (b), and (d)-(h), 216(i), 221(a) and (i), 222(c), 223, 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 405(a), (b), and (d)-(h), 416(i), 421(a) and (i), 422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 Stat. 2105, 2189; sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note). 9. Section 404.1588 is revised to read as follows: § 404.1588 Your responsibility to tell us of events that may change your disability status.
(a)*Your responsibility to report changes to us.* If you are entitled to cash benefits or to a period of disability because you are disabled, you should promptly tell us if—
(1)Your condition improves;
(2)You return to work;
(3)You increase the amount of your work; or
(4)Your earnings increase.
(b)*Our responsibility when you report your work to us.* When you or your representative report changes in your work activity to us under paragraphs (a)(2), (a)(3), and (a)(4) of this section, we will issue a receipt to you or your representative at least until a centralized computer file that records the information that you give us and the date that you make your report is in place. Once the centralized computer file is in place, we will continue to issue receipts to you or your representative if you request us to do so. 10. Section 404.1592 is amended by adding a new paragraph
(f)to read as follows: § 404.1592 The trial work period.
(f)*Nonpayment of benefits for trial work period service months.* See § 404.471 for an explanation of when benefits for trial work period service months are not payable if you are convicted by a Federal court of fraudulently concealing your work activity. PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED Subpart G—[Amended] 11. The authority citation for subpart G is revised to read as follows: Authority: Secs. 702(a)(5), 1611, 1612, 1613, 1614, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 1382, 1382a, 1382b, 1382c, and 1383); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note). 12. Section 416.708 is amended by revising the undesignated paragraph following paragraph (c)(4)to read as follows: § 416.708 What you must report.
(c)* * *
(4)* * * However, you need not report an increase in your Social Security benefits if the increase is only a cost-of-living adjustment. (For a complete discussion of what we consider income, see subpart K. See subpart M, § 416.1323 regarding suspension because of excess income.) If you receive benefits based on disability, when you or your representative report changes in your earned income, we will issue a receipt to you or your representative until we establish a centralized computer file to record the information that you give us and the date that you make your report. Once the centralized computer file is in place, we will continue to issue receipts to you or your representative if you request us to do so. Subpart K—[Amended] 13. The authority citation for subpart K continues to read as follows: Authority: Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 1621, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j, and 1383); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note). 14. Section 416.1112 is amended by revising paragraph (c)(3) introductory text to read as follows: § 416.1112 Earned income we do not count.
(c)* * *
(3)If you are under age 22 and a student who is regularly attending school as described in § 416.1861: 15. Section 416.1161 is amended by adding a new paragraph (a)(27) to read as follows: § 416.1161 Income of an ineligible spouse, ineligible parent, and essential person for deeming purposes.
(a)* * *
(27)Earned income of a student as described in § 416.1112(c)(3). Subpart N—[Amended] 16. The authority citation for subpart N is revised to read as follows: Authority: Secs. 702(a)(5), 1631, and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note). 17. Section 416.1403 is amended by adding new paragraph (a)(25) to read as follows: § 416.1403 Administrative actions that are not initial determinations.
(a)* * *
(25)Issuing a receipt in response to your report of a change in your earned income. Subpart R—[Amended] 18. The authority citation for subpart R is revised to read as follows: Authority: Secs. 702(a)(5), 1612(b), 1614(b), (c), and (d), and 1631(d)(1) and
(e)of the Social Security Act (42 U.S.C. 902(a)(5), 1382a(b), 1382c(b), (c), and
(d)and 1383(d)(1) and (e)). 19. Section 416.1861 is amended by redesignating paragraphs (b), (c), (d),
(e)and
(f)as (c), (d), (e),
(f)and (g), adding new paragraph (b), and revising newly redesignated paragraph
(f)to read as follows: § 416.1861 Deciding whether you are a child: Are you a student?
(b)*If you are instructed at home.* You may be a student regularly attending school if you are instructed at home in grades 7-12 in accordance with a home school law of the State or other jurisdiction in which you reside and for at least 12 hours a week.
(f)*When we need evidence that you are a student.* We need evidence that you are a student if you are 18 years old or older but under age 22, because we will not consider you to be a child unless we consider you to be a student. 20-21. Add a new § 416.1870 and undesignated center heading to read as follows: Who Is Considered a Student for Purposes of the Student Earned Income Exclusion § 416.1870 Effect of being considered a student. If we consider you to be a student, we will not count all of your earned income when we determine your SSI eligibility and benefit amount. If you are an ineligible spouse or ineligible parent for deeming purposes and we consider you to be a student, we will not count all of your income when we determine how much of your income to deem. Section 416.1110 explains what we mean by earned income. Section 416.1112(c)(3) explains how much of your earned income we will not count. Section 416.1161(a)(27) explains how the student earned income exclusion applies to deemors. 22. Add a new § 416.1872 to read as follows: § 416.1872 Who is considered a student. We consider you to be a student if you are under 22 years old and you regularly attend school or college or training that is designed to prepare you for a paying job as described in § 416.1861(a) through (e). 23. Add a new § 416.1874 to read as follows: § 416.1874 When we need evidence that you are a student. We need evidence that you are a student if you are under age 22 and you expect to earn over $65 in any month. Section 416.1861(g) explains what evidence we need. [FR Doc. E6-19232 Filed 11-16-06; 8:45 am] BILLING CODE 4191-02-P PENSION BENEFIT GUARANTY CORPORATION 29 CFR Part 4007 RIN 1212-AA95 Payment of Premiums; Assessment of and Relief From Penalties AGENCY: Pension Benefit Guaranty Corporation. ACTION: Final rule. SUMMARY: This final rule adopts policy guidance on premium penalty waivers, including guidance on the meaning of “reasonable cause” for premium penalty waivers. For the convenience of the public, this guidance is being codified as an appendix to PBGC's premium payment regulation. DATES: *Effective date:* December 18, 2006. The amendments made by this rule apply to PBGC actions taken on or after December 18, 2006. FOR FURTHER INFORMATION CONTACT: John H. Hanley, Director, Legislative & Regulatory Department, or Deborah C. Murphy, Attorney, Legislative & Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026; 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.) SUPPLEMENTARY INFORMATION: Background Pension Benefit Guaranty Corporation
(PBGC)administers the pension plan termination insurance program under Title IV of the Employee Retirement Income Security Act of 1974 (ERISA). When a single-employer plan terminates without sufficient assets to provide all benefits, PBGC steps in to ensure that participants and beneficiaries receive their plan benefits, subject to certain legal limits. PBGC also provides financial assistance to multiemployer plans that become unable to pay benefits. ERISA and PBGC's regulations require that premiums be paid to PBGC. To promote the effective operation of the insurance program under Title IV, ERISA section 4007 authorizes PBGC to assess penalties for not paying premiums in full and on time (“premium penalties”). See PBGC's regulation on Payment of Premiums (29 CFR Part 4007). A premium penalty is owed by any person that was liable for the premium—generally the plan administrator and, in the case of a single-employer plan, the contributing sponsor(s) and any controlled group members. (Under ERISA section 4006(a)(7)(D)(i)(II), as added by section 8101 of the Deficit Reduction Act of 2005, Pub. L. 109-171, February 8, 2006, the plan administrator is not liable for the $1,250 per-participant premium that applies to certain distress and involuntary plan terminations under that section.) Thus, a premium penalty (other than a penalty for failure to timely pay the $1,250 per-participant premium under ERISA section 4006(a)(7)), may generally be paid out of plan assets; see PBGC Opinion Letter 94-6 and the legislative history cited in that letter. PBGC's premium payment regulation includes provisions for determining the amount of premium penalties and provides for the waiver of those penalties upon demonstration of reasonable cause and in other specified circumstances. Reconsideration of premium penalty assessments is covered by PBGC's regulation on Rules for Administrative Review of Agency Decisions (29 CFR Part 4003). However, neither the premium payment regulation nor the administrative review regulation currently provides a thorough and detailed treatment of reasonable cause and other bases for premium penalty waivers. On January 12, 2001, PBGC published in the **Federal Register** , at 66 FR 2856, a proposed rule to expand and codify its previously published penalty policies. The 2001 proposed rule dealt both with premium penalties under ERISA section 4007 and with penalties for failures to provide certain information in a timely manner under ERISA section 4071. In particular, the proposed rule set forth detailed guidance on determining whether there is “reasonable cause” that would justify a waiver of premium penalties. The PBGC received no comments on the 2001 proposed rule. Provisions of This Rule This final rule provides policy guidance on premium penalty waivers, including guidance on the meaning of “reasonable cause” for premium penalty waivers. As discussed below, guidance is not being issued at this time on the determination of the amount of premium penalties nor on procedures for the assessment and review of premium penalties. Otherwise, the provisions in this final rule are generally the same as the premium penalty provisions in the 2001 proposed rule with only minor changes. As in the 2001 proposed rule, the premium penalty policy guidance in this final rule takes the form of an appendix to PBGC's regulation on Payment of Premiums (29 CFR part 4007). This rule does not affect the use of any other remedies available to PBGC and does not address the settlement of legal disputes involving penalties, either alone or in the context of other legal issues. This rule does not address penalties under ERISA section 4302, which applies to certain failures to provide multiemployer plan notices required under subtitle E of title IV of ERISA and implementing regulations, or under ERISA section 4071, which applies to failures to provide information on time. Premium Penalty Assessment The 2001 proposed rule summarized the rules on determining the amount of premium penalties in the premium payment regulation. That summary provided no new guidance and is not being included in the premium penalty policy appendix at this time. Premium Penalty Waivers As described in the premium penalty policy appendix, a premium penalty may be waived, in whole or in part, for a number of reasons, based on the facts and circumstances. The most common reason for waiving a penalty is “reasonable cause.” Reasonable cause is generally found if— • *Circumstances beyond control.* The violation arises from circumstances beyond the control of the person whose action or inaction may be the basis for a penalty assessment, and • *Ordinary business care and prudence.* The failure could not be avoided by exercising ordinary business care and prudence. The size of the organization and of the premium involved may affect the ordinary business care and prudence that is expected in order to find reasonable cause. The premium penalty policy appendix includes examples of situations where reasonable cause might be found, such as the sudden and unexpected absence or inability to act of an individual with responsibility to act, the destruction of relevant records or inability to comply resulting from a fire or other casualty or natural disaster, and reasonable reliance on erroneous oral or written communication by a PBGC employee. The appendix also describes other types of waivers: • *Statutory or regulatory requirement.* The appendix notes for completeness that a penalty is waived if a statute or regulation so requires. • *Legal error.* The appendix provides that a penalty may be waived if the violation arises from reliance on an erroneous interpretation of law—with different standards depending on whether the interpretation is or is not disclosed to PBGC—or, in appropriate circumstances, from a recent change in the law. • *Pendency of PBGC procedures.* The appendix provides for waiver in some cases of all or a part of a premium penalty that is attributable to the pendency of PBGC review or other procedures. • *Other circumstances.* The appendix also notes that, in other narrow circumstances, we may waive a penalty where appropriate. This part of the appendix has been reorganized to group the material differently (placing all the provisions about legal errors under one heading), eliminate an example about an insignificant math error, and add an example of PBGC procedures (other than review procedures) whose pendency could be the basis for a waiver. The explanation of the “other circumstances” waiver category has also been revised. In the 2001 proposed rule, this provision was said to be aimed primarily at cases where a premium penalty assessment would be “inconsistent with the purposes of title IV.” That language conveys a standard more restrictive than PBGC now considers appropriate and has been eliminated. In exercising premium penalty waiver authority and determining whether reasonable cause exists, the premium penalty policy appendix provides that an organization's outside advisors, such as lawyers or actuaries, are treated as if they were part of the organization. Thus, organizations with in-house advisors are treated the same in this respect as those that choose to retain outside advisors. Exercising care in selecting and monitoring advisors is not a basis for a reasonable cause waiver when the advisors are in-house; similarly, it is not considered a basis for a reasonable cause waiver where outside advisors are involved. Because it is so common for premium payers to use advisors in determining premiums, the payment of premiums could not adequately be enforced if premium penalties were waived in such circumstances. Nothing in this final rule is intended to limit any recourse that an organization may have against its outside advisors. Premium Penalty Procedures The 2001 proposed rule set forth procedures for assessing and reviewing premium penalties. The procedural provisions are not included in the premium penalty policy appendix at this time. Procedural implications of the new $1,250 per-participant premium may affect further premium penalty procedural guidance. Miscellaneous Changes There are a number of organizational and editorial changes from the 2001 proposed rule. Principal among these is the placement of provisions on assessment and waiver toward the beginning of the appendix, with a place reserved for procedural provisions at the end of the appendix. In addition, a new § 4 has been added to the appendix, briefly summarizing the information in the appendix and indicating where it is located. Compliance With Rulemaking Guidelines The PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866. This rule is not subject to notice and comment rulemaking requirements under section 553 of the Administrative Procedure Act because it deals only with general statements of PBGC policy. The PBGC nonetheless invited comment on the 2001 proposed rule. Because no general notice of proposed rulemaking is required, the Regulatory Flexibility Act does not apply. See 5 U.S.C. 601(2), 603, 604. List of Subjects in 29 CFR Part 4007 Employee benefit plans, Penalties, Pension insurance, Reporting and recordkeeping requirements. For the reasons given above, 29 CFR part 4007 is amended as follows. PART 4007—PAYMENT OF PREMIUMS 1. The authority citation for part 4007 continues to read as follows: Authority: 29 U.S.C. 1302(b)(3), 1303(a), 1306, 1307. 2. In § 4007.8, the introductory text of paragraph
(a)is amended by removing the words “The charge will be based on” and adding in their place the words “The amount determined under this paragraph
(a)will be based on”; and paragraphs
(c)and
(d)are revised to read as follows: § 4007.8 Late payment penalty charges.
(c)Reasonable cause waivers. PBGC will waive all or part of a late payment penalty charge if PBGC determines that there is reasonable cause for the late payment. Policy guidelines for applying the “reasonable cause” standard are in §§ 22 through 25 of the Appendix to this part.
(d)*Other waivers* . PBGC may waive all or part of a late payment penalty charge in other circumstances without regard to whether there is reasonable cause. Policy guidelines for waivers without reasonable cause are in § 21(b)(1), (b)(3), (b)(4), and (b)(5) of the Appendix to this part. 3. An appendix is added to part 4007 to read as follows: APPENDIX TO PART 4007—POLICY GUIDELINES ON PREMIUM PENALTIES Sec. General Provisions 1 What is the purpose of this Appendix? 2 What defined terms are used in this Appendix? 3 What is the purpose of a premium penalty? 4 What information is in this Appendix and how is it organized? Premium Penalty Assessment [Reserved.] Waiver Standards 21 What are the standards for waiving a premium penalty? 22 What is “reasonable cause”? 23 What kinds of facts does PBGC consider in determining whether there is reasonable cause for a failure to pay a premium? 24 What are some situations that might justify a “reasonable cause” waiver? 25 What are some situations that might justify a partial “reasonable cause” waiver? Procedures [Reserved.] General Provisions § 1 What is the purpose of this Appendix? This appendix sets forth principles and guidelines that we intend to follow in assessing, reviewing, and waiving premium penalties. However, this is only general policy guidance. Our action in each case is guided by the facts and circumstances of the case. § 2 What defined terms are used in this Appendix? The following terms are defined in part 4001 of this chapter: contributing sponsor, ERISA, PBGC, person, plan, and plan administrator. In addition, in this appendix:
(a)*Premium penalty* means a penalty under ERISA section 4007 and under this part for failing to pay a premium in full and on time.
(b)*Waiver* means reduction or elimination of a premium penalty that is being or has been assessed.
(c)*We* means PBGC.
(d)*You* means, according to the context,—
(1)A plan administrator, contributing sponsor, or other person, if—
(i)The person's action or inaction may be the basis for a premium penalty assessment,
(ii)The person may be required to pay the premium penalty, or
(iii)The person is requesting review of the premium penalty; or
(2)An employee or agent of, or advisor to, any of these persons. § 3 What is the purpose of a premium penalty? The basic purpose of a premium penalty is to encourage you to pay premiums in full and on time and to voluntarily self-correct any failure to do so. § 4 What information is in this Appendix and how is it organized? This Appendix has four divisions:
(a)*General provisions* . The General Provisions division (§§ 1-4) tells you the purpose and organization of the Appendix, the purpose of a premium penalty, and the definitions of terms used in the Appendix.
(b)*Premium penalty assessment* . The Premium Penalty Assessment division is reserved.
(c)*Waiver standards* . The Waiver Standards division (§§ 21-25) explains the principles that PBGC follows in waiving premium penalties.
(1)*Reasonable cause* . We waive premium penalties for reasonable cause, as explained in §§ 22-25.
(2)*Other waivers* . We also waive premium penalties in some other circumstances, such as mistake of law, as explained in § 21.
(d)*Procedures* . The Procedures division is reserved. Premium Penalty Assessment [Reserved.] Waiver Standards § 21 What are the standards for waiving a premium penalty?
(a)*Facts and circumstances* . In deciding whether to waive a premium penalty in whole or in part under paragraph (b), we consider the facts and circumstances of each case.
(b)*Waivers* .
(1)*Provisions of law* . We waive all or part of a premium penalty if a statute or regulation requires that we do so. For example, ERISA section 4007(b) and § 4007.8 of this part provide for a waiver in certain circumstances involving business hardship, and § 4007.8 of this part also provides for waivers if certain “safe harbor” tests are met, and for a waiver of a premium penalty that accrues after the date of a bill for a premium underpayment if you pay the premium owed within 30 days after the date of the bill.
(2)*Reasonable cause* . We waive a premium penalty if you show reasonable cause for a failure to pay a premium in full and on time. See §§ 22 through 25 for guidelines on “reasonable cause” waivers. If there is reasonable cause for only part of a failure to pay a premium, we waive the premium penalty only for that part.
(3)*Legal errors* . We may waive all or part of a premium penalty if the failure to pay a premium in full and on time that gives rise to the premium penalty results from certain kinds of legal errors.
(i)*Erroneous legal interpretation—disclosed* . If a failure to pay a premium in full and on time results from your reliance on an erroneous interpretation of the law, we waive a premium penalty that arises from the failure if you promptly and adequately call our attention to the interpretation and the relevant facts, and the erroneous interpretation is not frivolous. If the interpretation affects a filing that you make with us, you should call our attention to the interpretation in writing with the filing. If you rely on the interpretation to justify not making a filing with us, you should call our attention to the interpretation in writing by the time prescribed for the filing not made.
(ii)*Erroneous legal interpretation—undisclosed* . If a failure to pay a premium in full and on time results from your reliance on an erroneous interpretation of the law, and you do not promptly and adequately call our attention to the interpretation and the relevant facts, we may nevertheless waive a premium penalty if the weight of authority supporting the interpretation is substantial in relation to the weight of opposing authority and it is reasonable for you to rely on the interpretation.
(iii)*Recent change in the law* . We may waive all or part of a premium penalty if the law changes shortly before the date a premium payment is due and the premium payment that you make by the due date would have been correct under the law as in effect before the change. In determining whether and to what extent to grant a waiver in a case of this kind, we consider such factors as the length of time between the change in the law and the premium due date, the nature and timing of any publicity given to the change in the law, the complexity of the legal issues, and your general familiarity with those issues.
(4)*Pendency of PBGC procedures* . We may waive all or a part of a premium penalty that is attributable to the pendency of PBGC review or other procedures. For example:
(i)If you request review of a premium penalty, and you make a non-frivolous argument in your request for review that you were not required to pay the premium or that you were, and still are, unable to obtain the information needed to determine the premium, we may waive the portion of the premium penalty that accrues during the review process. If you make such a non-frivolous argument with respect to a portion of the premium, we may apply this principle to that portion.
(ii)We may waive all or a part of a premium penalty if we believe that the pendency of PBGC procedures for identifying a premium delinquency and notifying you of the delinquency contributed to your failure to correct the delinquency more promptly.
(5)*Other circumstances* . We may waive all or part of a premium penalty in other circumstances if we determine that it is appropriate to do so. We intend to exercise this waiver authority only in narrow circumstances.
(c)*Action or inaction of outside parties* . In some cases an accountant, actuary, lawyer, pension consultant, or other individual or firm that is not part of your organization may assist you in complying with PBGC requirements. If the outside individual's or firm's action, inaction, or advice causes or contributes to a failure to pay a premium in full and on time, we apply our waiver authority as if the outside individual or firm were part of your organization. In the case of an outside individual who is part of a firm, we generally consider both the individual and the firm to be part of your organization. § 22 What is “reasonable cause”?
(a)*General rule* . In general, there is “reasonable cause” for a failure to pay a premium in full and on time to the extent that—
(1)The failure arises from circumstances beyond your control, and
(2)You could not avoid the failure by the exercise of ordinary business care and prudence.
(b)*Overlooking legal requirements* . Overlooking legal requirements does not constitute reasonable cause.
(c)*Action or inaction of outside parties* . If an accountant, actuary, lawyer, pension consultant, or other individual or firm that is not part of your organization assists you in complying with PBGC requirements, there is generally no reasonable cause for a failure to pay a premium in full and on time that arises from circumstances within the control of the outside individual or firm, or could be avoided by the exercise of ordinary business care and prudence by the outside individual or firm. The fact that you exercised care and prudence in selecting and monitoring the outside individual or firm is not a basis for a reasonable cause waiver.
(d)*Size of organization* . If an organization or one or more of its employees is responsible for taking action, the size of the organization may affect what ordinary business care and prudence would require. For example, ordinary business care and prudence would typically require a larger organization to establish more comprehensive backup procedures than a smaller organization for dealing with situations such as computer failure, the loss of important records, and the inability of an individual to carry out assigned responsibilities. Thus, there may be reasonable cause for a small organization's failure to pay a premium in full and on time even though, if the organization were larger, the exercise of ordinary business care and prudence would have avoided the failure.
(e)*Size of premium underpayment* . In general, the larger a premium, the more care and prudence you should use to make sure that you pay it in full and on time. Thus, there may be reasonable cause for a small underpayment even though, under the same circumstances, we would conclude that a larger underpayment could have been avoided by the exercise of ordinary business care and prudence.
(f)*Collection and enforcement* . In determining whether reasonable cause exists, we do not consider either—
(i)The likelihood or cost of collecting the premium penalty, or
(ii)The costs and risks of enforcing the premium penalty by litigation. § 23 What kinds of facts does PBGC consider in determining whether there is reasonable cause for a failure to pay a premium? In determining the extent to which a failure to pay a premium in full and on time arose from circumstances beyond your control and the extent to which you could have avoided the failure by the exercise of ordinary business care and prudence—and thus the extent to which waiver of a premium penalty for reasonable cause is appropriate—we consider facts such as the following:
(a)What event or circumstance caused the underpayment and when the event happened or the circumstance arose. The dates you give should clearly correspond with the underpayment upon which the premium penalty is based.
(b)How that event or circumstance kept you from paying the premium in full and on time. The explanation you give should relate directly to the failure to pay a premium that is the subject of the premium penalty.
(c)Whether you could have anticipated the event or circumstance.
(d)How you responded to the event or circumstance, including what steps you took, and how quickly you took them, to pay the premium and how you conducted other business affairs. Knowing how you responded to the event or circumstance may help us determine what degree of business care and prudence you were capable of exercising during that period and thus whether the failure to pay the premium could or could not have been avoided by the exercise of ordinary business care and prudence. § 24 What are some situations that might justify a “reasonable cause” waiver? The following examples illustrate some of the reasons often given for failures to pay premiums for which we may assess penalties. The situation described in each example may constitute reasonable cause, and each example lists factors we consider in determining whether to grant a premium penalty waiver for reasonable cause in a case of that kind.
(a)*An individual with responsibility for taking action was suddenly and unexpectedly absent or unable to act.* We consider such factors as the following: The nature of the event that caused the individual's absence or inability to act, for example, the resignation of the individual or the death or serious illness of the individual or a member of the individual's immediate family; the size of the organization and what kind of backup procedures it had to cope with such events; how close the event was to the deadline that was missed; how abrupt and unanticipated the event was; how the individual's absence or inability to act prevented compliance; how expensive it would have been to comply without the absent individual; whether and how other business operations and obligations were affected; how quickly and prudently a replacement for the absent individual was selected or other arrangements for compliance were made; and how quickly a replacement for the absent individual took appropriate action.
(b)*A fire or other casualty or natural disaster destroyed relevant records or prevented compliance in some other way.* We consider such factors as the following: The nature of the event; how close the event was to the deadline that was missed; how the event caused the failure to pay the premium; whether other efforts were made to get needed information; how expensive it would have been to comply; and how you responded to the event.
(c)*You reasonably relied on erroneous oral or written advice given by a PBGC employee.* We consider such factors as the following: Whether there was a clear relationship between your situation and the advice sought; whether you provided the PBGC employee with adequate and accurate information; and whether the surrounding circumstances should have led you to question the correctness of the advice or information provided.
(d)*You were unable to obtain information, including records and calculations, needed to comply.* We consider such factors as the following: What information was needed; why the information was unavailable; when and how you discovered that the information was not available; what attempts you made to get the information or reconstruct it through other means; and how much it would have cost to comply. § 25 What are some situations that might justify a partial “reasonable cause” waiver?
(a)Assume that a fire destroyed the records needed to compute a premium payment. If in the exercise of ordinary business care and prudence it should take you one month to reconstruct the records and pay the premium, but the payment was made two months late, it might be appropriate to waive that part of the premium penalty attributable to the first month the payment was late, but not the part attributable to the second month.
(b)Assume that a plan administrator underpaid the plan's flat-rate premium because of reasonable reliance on erroneous advice from a PBGC employee, and also underpaid the plan's variable-rate premium because the plan actuary used the wrong interest rate. A PBGC audit revealed both errors. PBGC billed the plan for a premium penalty of $5,000—$1,000 for underpayment of the flat-rate premium and $4,000 for underpayment of the variable-rate premium. The plan administrator requested a waiver of the premium penalty. While the erroneous PBGC advice constituted reasonable cause for underpaying the flat-rate premium, there was no showing of reasonable cause for the error in the variable-rate premium. Therefore, we would waive only the part of the premium penalty based on underpayment of the flat-rate portion of the premium ($1,000). Procedures [Reserved.] Issued in Washington, DC, this 13th day of November, 2006. Elaine L. Chao, Chairman, Board of Directors, Pension Benefit Guaranty Corporation. Issued on the date set forth above pursuant to a resolution of the Board of Directors authorizing its Chairman to issue this interim final rule. Judith R. Starr, Secretary, Board of Directors, Pension Benefit Guaranty Corporation. [FR Doc. E6-19436 Filed 11-16-06; 8:45 am] BILLING CODE 7709-01-P DEPARTMENT OF DEFENSE Office of the Secretary 32 CFR Part 199 [DoD-2006-OS-0209] RIN 0720-AB02 TRICARE; Changes Included in the National Defense Authorization Act for Fiscal Year 2006; TRICARE Dental Program AGENCY: Office of the Secretary, DoD. ACTION: Interim final rule. SUMMARY: The Department is publishing this interim final rule to implement section 713 of the National Defense Authorization Act for Fiscal Year 2006 (NDAA for FY06), Public Law 109-163. Specifically, that legislation expands the eligibility for survivor benefits under the TRICARE Dental Program
(TDP)to include the active duty spouse of a member who dies while on active duty for a period of more than 30 days. The rule is being published as an interim final rule with comment period in order to comply with statutory effective dates. Public comments are invited and will be considered for possible revisions to the final rule. DATES: This rule is effective November 17, 2006. *Comments:* Written comments received at the address indicated below by January 16, 2007 will be accepted. ADDRESSES: You may submit comments, identified by docket number and or RIN number and title, by any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. • Mail: Federal Docket Management System Office, 1160 Defense Pentagon, Washington, DC 20301-1160. *Instructions:* All submissions received must include the agency name and docket number or Regulatory Information Number
(RIN)for this **Federal Register** document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the Internet at *http://regulations.gov* as they are received without change, including any personal identifiers or contact information. FOR FURTHER INFORMATION CONTACT: Col. Gary C. Martin, Office of the Assistant Secretary of Defense (Health Affairs), TRICARE Management Activity, telephone
(703)681-0039. SUPPLEMENTARY INFORMATION: I. Background Currently, a surviving spouse who is a member of the armed forces on active duty for a period of more than 30 days at the time the other active duty military member spouse dies and subsequently separates from active duty, is ineligible for the TDP survivor benefit. The surviving active duty spouse is ineligible because he or she was not enrolled in the program at the time of the spouse's death. Active duty members are not eligible for enrollment in the TDP. There are many dual military couples in the armed forces and the authority provided by section 713 of the NDAA for FY06 will permit the Department to expand the eligibility for survivor benefits under the TDP to include the active duty spouse of a member who dies while on active duty for a period of more than 30 days who subsequently separates from active duty during the three-year survivor period. II. Regulatory Procedures Executive Order
(EO)12866 Executive Order 12866 requires that a comprehensive regulatory impact analysis be performed on any economically significant regulatory action, defined as one that would result in an annual effect of $100 million or more on the national economy or which would have other substantial impacts. The Regulatory Flexibility Act
(RFA)requires that each Federal agency prepare, and make available for public comment, a regulatory flexibility analysis when the agency issues a regulation which would have a significant impact on a substantial number of small entities. This rule is not an economically significant regulatory action and will not have a significant impact on a substantial number of small entities for purposes of the RFA, thus this interim final rule is not subject to any of these requirements. This rule, although not economically significant under Executive Order 12866, is a significant rule under Executive Order 12866 and has been reviewed by the Office of Management and Budget. This rule is being issued as an interim final rule, with comment period, as an exception to our standard practice of soliciting public comments prior to issuance. This is because the effective date of the changes to the TDP contained in section 713 of the NDAA for FY06 was January 6, 2006. This interim rule would amend the CFR to allow the TDP to conform to the new statutory authority. Based on these statutory requirements, the Assistant Secretary of Defense (Health Affairs) has determined that following the standard practice in this case would be unnecessary, impractical and contrary to the public interest. Public comments are invited. All comments will be carefully considered. A discussion of the major issues received by public comments will be included with the issuance of the final rule. Paperwork Reduction Act This rule will not impose additional information collection requirements on the public under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3511). We have examined the impact(s) of the interim final rule under Executive Order 13132 and it does not have policies that have federalism implications that would have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, therefore, consultation with State and local officials is not required. List of Subjects in 32 CFR Part 199 Dental program, Dental health, Health care, Health insurance, Military personnel. For the reasons set out in the preamble, the Department of Defense amends 32 CFR part 199 as follows: PART 199—[AMENDED] 1. The authority citation for part 199 continues to read as follows: Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55. 2. Section 199.13 is amended by revising paragraphs (c)(3)(ii)(E)( *2* ), to read as follows: § 199.13 TRICARE dental program.
(c)* * *
(3)* * *
(ii)* * *
(E)* * * ( *2* ) *Continuation of eligibility.* Eligible dependents of active duty members while on active duty for a period of more than 30 days and eligible dependents of members of the Ready Reserve ( *i.e.* , Selected Reserve or Individual Ready Reserve, as specified in 10 U.S.C. 10143 and 10144(b) respectively), shall be eligible for continued enrollment in the TDP for up to three
(3)years from the date of the member's death, if, on the date of the death of the member, the dependent is enrolled in the TDP, or is not enrolled by reason of discontinuance of a former enrollment under paragraphs (c)(3)(ii)(E)( *4* )( *ii* ) and (c)(3)(ii)(E)( *4* )( *iii* ) of this section, or is not enrolled because the dependent was under the minimum age for enrollment at the time of the member's death, or is not qualified for enrollment because the dependent is a spouse who is a member of the armed forces on active duty for a period of more than 30 days but subsequently separates or is discharged from active duty. This continued enrollment is not contingent on the Selected Reserve or Individual Ready Reserve member's own enrollment in the TDP. During the three-year period of continuous enrollment, the government will pay both the Government and the beneficiary's portion of the premium share. Dated: November 13, 2006. L.M. Bynum, OSD Federal Register Liaison Officer, Department of Defense. [FR Doc. E6-19437 Filed 11-16-06; 8:45 am] BILLING CODE 5001-06-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [CGD08-06-002] RIN 1625-AA09 Drawbridge Operation Regulation; Missouri River, Iowa, Kansas, Missouri AGENCY: Coast Guard, DHS. ACTION: Final rule. SUMMARY: The Coast Guard is revising the Missouri River drawbridge regulations covering Iowa, Kansas, and Missouri. The revisions will have the bridges open on signal except during the winter season which will require 24 hours advanced notice. These revisions to the regulations will reduce delays of the vessels transiting through these States on the Missouri River. DATES: This rule is effective on December 18, 2006. ADDRESSES: Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket CGD8-06-002 and are available for inspection or copying at room 2.107f, in the Robert A. Young Federal Building, Eighth Coast Guard District, 1222 Spruce Street, St. Louis, Missouri 63103-2832, between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Commander (dwb), Eighth Coast Guard District, Bridge Branch maintains the public docket for this rulemaking. FOR FURTHER INFORMATION CONTACT: Mr. Roger K. Wiebusch, Bridge Administrator,
(314)269-2378. SUPPLEMENTARY INFORMATION: Regulatory History On May 25, 2006, we published a notice of proposed rulemaking
(NPRM)entitled Drawbridge Operation Regulations; Missouri River, Iowa, Kansas, Missouri in the **Federal Register** (71 FR 30106). We received no letters commenting on the proposed rule. No public meeting was requested, and none was held. Background and Purpose The Coast Guard is revising these regulations so vessels may pass the bridge without delay. The Coast Guard reviewed the history of civil penalty actions for failure of the Missouri River drawbridges to open for navigation. Meetings were held with the bridge owner and vessel operators to determine the cause for not opening the bridge draw on signal. A procedure was incorporated in the regulations to help reduce the number of vessel delays caused by failure to open the bridge on signal. Experience has shown the procedure was never implemented and vessel delays were not reduced. Therefore, §§ 117.411(b) and 117.687(b), which describe the procedure for operation of the A-S-B Highway and Railroad Bridge at Mile 365.6, are to be eliminated. This drawbridge was never operated in the manner described. It will open on signal as described in §§ 117.411 and 117.687. In addition, the Coast Guard determined that changes were needed to correct inaccuracies in State-related drawbridge operation regulations for § 117.407 (Iowa), § 117.411 (Kansas), and § 117.687 (Missouri). Discussion of Comments and Changes There were no comments to the proposed regulatory text. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security. The Coast Guard expects that these changes will have a minimal economic impact on commercial traffic operating on the Missouri River. The procedure is already in practice at the bridges, and the change to the CFR documents the procedure. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities. This rule is neutral to all business entities since it affects only how the vessel operators request bridge openings. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding this rule so that they could better evaluate its effects on them and participate in the rulemaking. Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector, of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969
(NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore this rule is categorically excluded under figure 2-1, paragraph 32(e) of the Instruction from further environmental documentation. Paragraph 32(e) excludes the promulgation of operating regulations or procedures for drawbridges from the environmental documentation requirements of the National Environmental Policy Act (NEPA). Since this regulation would alter the normal operating conditions of the drawbridge, it falls within this exclusion. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES . List of Subjects in 33 CFR Part 117 Bridges. Regulations For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows: PART 117—DRAWBRIDGE OPERATION REGULATIONS 1. The authority citation for part 117 continues to read as follows: Authority: 33 U.S.C. 499; Department of Homeland Security Delegation No. 0170.1; 33 CFR 1.05-1(g); section 117.255 also issued under the authority of Pub. L. 102-587, 106 Stat. 5039. 2. Revise § 117.407 to read as follows: § 117.407 Missouri River. See § 117.691, Missouri River listed under Nebraska. 3. Revise § 117.411 to read as follows: § 117.411 Missouri River. The draws of the bridges across the Missouri River shall open on signal; except during the winter season between the date of closure and the date of opening of the commercial navigation season as published by the Army Corps of Engineers, the draws need not open unless at least 24 hours advance notice is given. 4. Revise § 117.687 to read as follows: § 117.687 Missouri River. The draws of the bridges across the Missouri River shall open on signal; except during the winter season between the date of closure and date of opening of the commercial navigation season as published by the Army Corps of Engineers, the draws need not open unless at least 24 hours advance notice is given. Dated: October 25, 2006. J.R. Whitehead, Rear Admiral, U.S. Coast Guard Commander, Eighth Coast Guard District. [FR Doc. E6-19455 Filed 11-16-06; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [CGD08-06-021] RIN 1625-AA09 Drawbridge Operation Regulation; St. Croix River, Prescott, WI AGENCY: Coast Guard, DHS. ACTION: Temporary final rule. SUMMARY: The Coast Guard is changing the regulation governing the Prescott Highway Bridge, across the St. Croix River at Mile 0.3, at Prescott, Wisconsin. Under the rule, the drawbridge need not open for river traffic and may remain in the closed-to-navigation position from November 1, 2006 to April 1, 2007. This rule allows the bridge owners to make necessary repairs to the bridge. DATES: The rule is effective November 1, 2006 to April 1, 2007. ADDRESSES: Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket [CGD08-06-021] and are available for inspection or copying at room 2.107f in the Robert A. Young Federal Building at Eighth Coast Guard District, between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Commander (dwb), Eighth Coast Guard District, Bridge Branch maintains the public docket for this rulemaking. FOR FURTHER INFORMATION CONTACT: Mr. Roger K. Wiebusch, Bridge Administrator,
(314)269-2378. SUPPLEMENTARY INFORMATION: Regulatory Information On August 21, 2006, we published a notice of proposed rulemaking
(NPRM)entitled Drawbridge Operation Regulation; St. Croix River, Prescott, WI in the **Federal Register** (71 FR 48498). We received no comment letters on the proposed rule. No public hearing was requested, and none was held. Background and Purpose On March 26, 2005, the Wisconsin Department of Transportation requested a temporary change to the operation of the Prescott Highway Bridge across the St. Croix River, Mile 0.3, at Prescott, Wisconsin, to allow the drawbridge to remain in the closed-to-navigation position for a 5-month period while the electrical and hydraulic systems are overhauled. Navigation on the waterway consists of both commercial (excursion boat) and recreational watercraft, which may be minimally impacted by the closure period. Currently, the draw opens on signal for the passage of river traffic from April 1 to October 31, 8 a.m. to midnight, except that from midnight to 8 a.m. the draw shall open on signal if notification is made prior to 11 p.m. From November 1 through March 31, the draw shall open on signal if at least 24 hours notice is given. The Wisconsin Department of Transportation requested the drawbridge be permitted to remain closed to navigation from November 1, 2006 to April 1, 2007. Discussion of Comments and Changes The Coast Guard received no comment letters. No changes were made to this final rule. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS). The Coast Guard expects this temporary change to the operation of the Prescott Highway Bridge to have minimal economic impact on commercial traffic operating on the St. Croix River such that a full regulatory evaluation under the regulatory policies and procedures of DHS is unnecessary. This temporary change will cause minimal interruption of the drawbridge's regular operation, since the change is only in effect during the winter months while the river is frozen. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities. The rule would be in effect for 5 months during the early winter months when the river is frozen over and navigation is practically at a standstill. The Coast Guard expects the impact of this action to be minimal. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding this rule so that they could better evaluate its effects on them and participate in the rulemaking. Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-800-REG-FAIR (1-800-734-3247). Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969
(NEPA)(14 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore this rule is categorically excluded under figure 2-1, paragraph 32(e) of the Instruction from further environmental documentation. Paragraph 32(e) excludes the promulgation of operating regulations or procedures for drawbridges from the environmental documentation requirements of the National Environmental Policy Act (NEPA). Since this regulation would alter the normal operating conditions of the drawbridge, it falls within this exclusion. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES . List of Subjects in 33 CFR Part 117 Bridges. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows: PART 117—DRAWBRIDGE OPERATION REGULATIONS 1. The authority citation for part 117 continues to read as follows: Authority: 33 U.S.C. 499; Department of Homeland Security Delegation No. 0170.1; 33 CFR 1.05-1(g); section 117.255 also issued under the authority of Pub. L. 102-587, 106 Stat. 5039. 2. From November 1, 2006, to April 1, 2007, in § 117.667, suspend paragraph
(a)and add paragraphs
(d)and
(e)to read as follows: § 117.667 St. Croix River.
(d)The draws of the Burlington Northern Santa Fe Railroad Bridge, Mile 0.2, and the Hudson Railroad Bridge, Mile 17.3, shall operate as follows:
(1)From April 1 to October 31:
(i)8 a.m. to midnight, the draws shall open on signal;
(ii)Midnight to 8 a.m., the draws shall open on signal if notification is made prior to 11 p.m.,
(2)From November 1 through March 31, the draw shall open on signal if at least 24 hours notice is given.
(e)The draw of the Prescott Highway Bridge, Mile 0.3, need not open for river traffic and may be maintained in the closed-to-navigation position from November 1, 2006 to April 1, 2007. Dated: October 23, 2006. J.R. Whitehead, Rear Admiral, U.S. Coast Guard Commander, Eighth Coast Guard District. [FR Doc. E6-19456 Filed 11-16-06; 8:45 am] BILLING CODE 4910-15-P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 15 [ET Docket No. 04-186 and 02-380; FCC 06-156] Unlicensed Operation in the TV Broadcast Bands AGENCY: Federal Communications Commission. ACTION: Final rule. SUMMARY: This document allows low power devices to operate on unused television channels in locations where such operations will not result in harmful interference to TV and other authorized services. The Commission believes that this plan will provide for more efficient and effective use of the TV spectrum and will significantly benefit the public by allowing the development of new and innovative types of devices and services for businesses and consumers, without disrupting television and other authorized services using the TV bands. DATES: Effective December 18, 2006. FOR FURTHER INFORMATION CONTACT: Hugh Van Tuyl, Office of Engineering and Technology,
(202)418-7506, e-mail *Hugh.VanTuyl@fcc.gov* . or Alan Stillwell, Office of Engineering and Technology
(202)418-2925, e-mail *Alan.Stillwell@fcc.gov* , TTY
(202)418-2989. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's *First Report and Order,* ET Docket No. 04-186 and ET Docket No. 02-380, FCC 06-156, adopted October 12, 2006, and released October 18, 2006. The full text of this document is available on the Commission's Internet site at *http://www.fcc.gov* . It is also available for inspection and copying during regular business hours in the FCC Reference Center (Room CY-A257), 445 12th Street, SW., Washington, DC 20554. The full text of this document also may be purchased from the Commission's duplication contractor, Best Copy and Printing Inc., Portals II, 445 12th St., SW., Room CY-B402, Washington, DC 20554; telephone
(202)488-5300; fax
(202)488-5563; e-mail *fcc@bcpiweb.com* . Summary of the Report and Order 1. On May 13, 2004, the Commission adopted a *Notice of Proposed Rule Making* (NPRM), 69 FR 34103, June 18, 2004, in this proceeding in which it proposed to allow unlicensed operation in the TV bands at locations where frequencies are not in use by licensed services. To ensure that no harmful interference to TV stations and other authorized users of the spectrum will occur, the Commission proposed to define when a TV channel is unused and to require unlicensed devices to incorporate “smart radio” features to identify the unused TV channels in the area where they are located. For the purpose of establishing a plan for minimizing interference, the Commission proposed to classify unlicensed broadband devices to be used in the TV bands into two general functional categories. The first category would consist of lower power “personal/portable” unlicensed devices, such as Wi-Fi like cards in laptop computers or wireless in-home local area networks (LANs). The second category would consist of higher power “fixed/access” unlicensed devices that are generally operated from a fixed location and may be used to provide a commercial service such as wireless broadband Internet access. The Commission proposed that fixed/access devices incorporate a geo-location method such as a Global Positioning System
(GPS)receiver or be professionally installed, and that they must access a database to identify vacant channels at their location. It proposed to require that personal/portable devices operate only when they receive a control signal from a source such as an FM or TV station that identifies the vacant TV channels in that particular area. The Commission also sought comment on the use of spectrum sensing to identify vacant TV channels, but did not propose any specific technical criteria for spectrum sensing. 2. In the *First Report and Order* , the Commission takes a number of important first steps towards allowing the introduction of new low power devices in the broadcast television spectrum (TV bands) on channels/frequencies that are not being used for authorized services (hereinafter referred to as “TV band devices”). The goal in this proceeding is to allow such devices to operate on unused television channels in locations where such operations will not result in harmful interference to TV and other authorized services. The Commission believes that this plan will provide for more efficient and effective use of the TV spectrum and will significantly benefit the public by allowing the development of new and innovative types of devices and services for businesses and consumers, without disrupting television and other authorized services using the TV bands. Because transmissions in the TV band are subject to less propagation attenuation than transmissions in other bands where lower power operations are permitted (such as unlicensed operations in the 2.4 GHz band), operations in the TV bands can benefit a wide range of service providers and consumers by improving the service range of wireless operations, thereby allowing operators to reach new customers. While there will be significant benefits to the public from its actions, the Commission recognizes that it must balance these benefits with the need to protect authorized services in the TV bands from harmful interference. 3. The Commission also recognizes the importance of conducting tests to ensure that whatever standards are ultimately adopted for TV band devices will protect incumbent radio services from harmful interference. Given the complex and novel sharing issues presented here, it intends to conduct several types of testing, and also encourages interested parties to conduct tests and submit their results into the record of this proceeding. Interested parties that conduct their own tests for the record should provide a test plan that explains in detail the assumptions used and the reasons supporting them. 4. In order to provide sufficient time for the Commission and industry to develop appropriate technical standards for TV band products as well as lead time for industry to design and produce new products, it intends to adopt a Second Report and Order specifying final requirements for devices in the TV bands in the fall of 2007. This will allow the Commission's Laboratory to begin accepting applications for certification of these devices in the TV bands by late 2007. Certification will be granted if the application, upon review, is found to comply with the new technical rules and will allow the manufacture and shipment of products to distribution points. These devices will not be available for sale at retail until after the DTV transition ends on February 17, 2009. 5. The Commission is convinced based on the record in this proceeding that it can adopt rules to allow fixed low power operation on unused spectrum in the TV bands without causing harmful interference to authorized services. There are several factors supporting this conclusion. First, upon completion of the DTV transition, there will be significant unused TV spectrum available in many areas in the country, either because of the separations required between authorized stations to avoid interference or because available TV channels have not been assigned and other services are not using vacant channels. Also, based on the Commission's experience in developing rules for U-NII devices, it believes that it is reasonable to expect that existing technology, such as that used for spectrum sensing, can be adapted to allow devices to identify unused spectrum in a given geographic area and thus allow sharing of the TV bands. Further, the Commission notes that the IEEE 802.22 working group with broad based support is in the process of developing a standard to enable fixed devices to successfully share spectrum with authorized services in the TV bands. Finally, these devices will operate at relatively low power levels and, it is easier to protect incumbent operations in the TV bands, including wireless microphones, when devices are limited to fixed operation. 6. The Commission will exclude low power devices from operating on TV channels 37 and 52-69 to prevent interference to radio astronomy operations and the WMTS on channel 37. Also, channels 52-69 have been reallocated for services other than broadcast television and will no longer be part of the TV bands after the transition. The Commission will also exclude personal/portable TV band devices from operating on channels 14-20 in all areas of the country to prevent possible interference to public safety and other operations in the PLMRS/CMRS. Because personal/portable devices are easily transported and used anywhere, the Commission believes that the most prudent approach to protecting public safety and other PLMRS/CMRS operations on channels 14-20 is to prohibit personal/portable low power TV band devices from operating on those channels in all areas of the country. 7. *Implementation Date.* The Commission will allow low power TV band devices to be marketed immediately after the end of the DTV transition on February 17, 2009, but not before. The Commission believes that this schedule is appropriate for several reasons. First, there are fewer vacant channels available during the DTV transition because most TV stations are currently broadcasting both an analog and a digital signal. There are thus about twice as many TV channels in use now as there will be after the end of the transition when full service analog broadcasting ceases. Also, the TV band is in a state of flux as the Commission develops the final DTV table of allotments and some TV stations still must change channels. In this regard, there will be adjustments in DTV channels that affect the availability of channels in individual markets throughout the remainder of the transition. The Commission also notes the concerns of a number of parties about possible disruption to the DTV transition if unlicensed devices are permitted to operate in the TV bands prior to the end of the DTV transition. The Commission believes that the risk of creating uncertainty that would impede the DTV transition outweighs the benefit of allowing operation of low power devices at a slightly earlier date, especially given that some proponents of low power devices have indicated they would need up to 21 months after the adoption of final technical rules to bring such devices to market. For these reasons, the Commission will allow TV band devices on the market only after the end of DTV transition. Final Regulatory Flexibility Certification 8. The Regulatory Flexibility Act of 1980, as amended
(RFA)1 requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not have a significant economic impact on a substantial number of small entities.” 2 The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 3 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 4 A small business concern is one which:
(1)Is independently owned and operated;
(2)is not dominant in its field of operation; and
(3)satisfies any additional criteria established by the Small Business Administration (SBA). 5 1 *See* 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). 2 5 U.S.C. 605(b). 3 5 U.S.C. 601(6). 4 5 U.S.C. 601(3) (incorporating by reference the definition of “small business concern” in Small Business Act, 15 U.S.C. S 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the **Federal Register** .” 5 Small Business Act, 15 U.S.C. S 632. 9. In the *First Report and Order* , the Commission decides to allow low power fixed devices to operate on unused spectrum on TV channels 5-13, and 21-51, excluding channel 37. Operation will not be permitted prior to further action by the Commission to develop technical rules that allow devices to operate on those channels without causing interference. Because the Report and Order does not adopt any rules or other compliance requirements, the Commission certifies that the actions in the *First Report and Order* will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of the *First Report and Order* including a copy of this final certification, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, *see* 5 U.S.C. 801(a)(1)(A). In addition, the *First Report and Order* and this certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the **Federal Register** . *See* 5 U.S.C. 605(b). Ordering Clauses 10. Pursuant to sections 4(i), 302, 303(e), 303(f), 303(r) and 307 of the Communications Act of 1934, as amended, 47 U.S.C. Sections 154(i), 302, 303(e), 303(f), 303(r) and 307, this First Report and Order and Further Notice of Proposed Rule Making *is hereby adopted* . 11. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this *First Report and Order and Further Notice of Proposed Rule Making,* including the Initial Regulatory Flexibility Analysis and Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration. Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. E6-18907 Filed 11-16-06; 8:45 am] BILLING CODE 6712-01-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 622 [Docket No. 060322083-6288-03; I.D. 032006C] RIN 0648-AU04 Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Gulf of Mexico Recreational Grouper Fishery Management Measures AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS issues this final rule to implement the seasonal closure provisions of a regulatory amendment to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico
(FMP)prepared by the Gulf of Mexico Fishery Management Council (Council). This final rule establishes a seasonal closure of the recreational fishery for gag, red grouper, and black grouper in or from the Gulf exclusive economic zone (EEZ). The intended effect of this final rule is to help maintain recreational landings at levels consistent with the red grouper rebuilding plan while minimizing potential shift of fishing effort to associated grouper species. DATES: This final rule is effective December 18, 2006. ADDRESSES: Copies of the Final Regulatory Flexibility Analysis (FRFA), are available from Andy Strelcheck, NMFS, Southeast Regional Office, 263 13 th Avenue South, St. Petersburg, FL 33701; telephone 727-824-5305; fax 727-824-5308; e-mail *Andy.Strelcheck@noaa.gov* . FOR FURTHER INFORMATION CONTACT: Andy Strelcheck, telephone 727-824-5305; fax 727-824-5308; e-mail *Andy.Strelcheck@noaa.gov* . SUPPLEMENTARY INFORMATION: The reef fish fishery of the Gulf of Mexico is managed under the FMP. The FMP was prepared by the Council and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622. In accordance with the FMP's framework procedure, the Council recommended and NMFS published a proposed rule to implement a regulatory amendment that included a recreational bag limit for Gulf red grouper of one fish per person per day, a zero grouper bag limit for captain and crew of a vessel operating as a charter or headboat, and a February 15 to March 15 seasonal closure of the recreational fishery for gag, red grouper, and black grouper. NMFS requested public comment on the proposed rule through May 1, 2006 (71 FR 16275, March 31, 2006). However, in response to public comment expressing concern about the proposed seasonal closure and because a pertinent, new gag assessment was pending, NMFS separated the proposed management measures into two final rules--one addressing the bag limit provisions, and one addressing the seasonal closure. The bag limit provisions were published in a final rule (71 FR 34534, June 15, 2006) which became effective July 17, 2006. Implementation of the final rule containing the seasonal closure was deferred pending the results of the new gag assessment. This final rule establishes a February 15 to March 15 seasonal closure of the recreational fishery for gag, red grouper, and black grouper. The seasonal closure will help restrict recreational red grouper landings to levels specified in the rebuilding plan and will prevent or minimize increases in fishing mortality on gag and black grouper that could result from a shift in fishing effort due to the more restrictive red grouper bag limit. A new stock assessment for gag completed in July 2006 indicates the Gulf of Mexico gag stock is undergoing overfishing. Thus, this seasonal closure also contributes to necessary reductions in fishing mortality for gag. The closure is consistent with the existing seasonal closure of the commercial fishery for gag, red grouper, and black grouper and would make the closure more equitable for both user groups and should help improve compliance and enforceability. In addition, the closure will provide further protection for these species because it occurs during important spawning periods for all three species. Black grouper are included in the seasonal closure, in part, because they are similar in appearance to gag and, therefore, difficult for fisherman to distinguish from gag. If black grouper were not included in the closure, compliance with the closure, and therefore the closure's effectiveness would be compromised. For all of these reasons, NMFS believes the seasonal recreational closure for gag, red grouper, and black grouper is warranted. Additional rationale for the measures in the regulatory amendment is provided in the preamble to the proposed rule and is not repeated here. A summary of public comments and NMFS' responses on the bag limit provisions of the proposed rule are provided in the final rule published June 15, 2006 (71 FR 34534). A summary of public comments received by NMFS on the seasonal closure provisions of the proposed rule and NMFS' responses are provided below. Comments and NMFS' responses to those comments regarding the economic impacts of the closed season are provided under the Classification section of this document. Comments and Responses *Comment 1:* Eight commenters opposed the February 15 to March 15 recreational seasonal closure and believed the closure period would severely impact the livelihood of charter boat captains, crew, and their families. *Response:* A 34- to 45-percent reduction is needed to return recreational red grouper landings to levels specified in the rebuilding plan. The February 15 to March 15 closure, when combined with bag limit provisions published in a final rule (71 FR 34534) on June 15, 2006, is estimated to reduce red grouper landings by 34 percent and gag and black grouper landings by 7 percent. The closure includes important spawning seasons for all three species and would overlap the 1-month commercial fishery grouper closure. Prohibiting harvest of all three species will prevent effort shifting from occurring and reduce fishing mortality. Relative to the other closure alternatives considered by the Council, this alternative would result in the fewest cancelled trips and forgone revenues of the closure alternatives considered by the Council. *Comment 2:* One commenter suggested creating a closed season of September 15 to October 15 instead of February 15 to March 15. *Response:* The seasonal closure was proposed for February 15 to March 15 because the commercial seasonal closure occurs at this time and includes important spawning seasons for gag, red grouper, and black grouper. The Council also considered seasonal closures during April-May and August and was presented with analyses for seasonal closures in September and October. A September 15 to October 15 seasonal closure would result in similar, although slightly greater, reductions in harvest than the preferred February 15 to March 15 seasonal closure. However, a closure during fall would not provide the added benefits of protecting gag, red grouper, and black grouper during spawning seasons or closing the recreational fishery at the same time as the commercial fishery. Classification The Administrator, Southeast Region, NMFS, determined the regulatory amendment is necessary for the conservation and management of the Gulf reef fish fishery and is consistent with the Magnuson-Stevens Act and other applicable laws. This final rule has been determined to be not significant for purposes of Executive Order 12866. A FRFA was prepared. The FRFA incorporates the initial regulatory flexibility analysis (IRFA), a summary of the significant issues raised by public comments in response to the IRFA, and NMFS responses to those comments, and a summary of the analyses completed to support the action. As discussed in the proposed rule (71 FR 16275, March 31, 2006), NMFS separated the management measures into two final rules -one addressing the bag limit provisions which published June 15, 2006 (71 FR 34534), and this final rule which addresses the recreational seasonal closures. The IRFA addressed all of the proposed management measures. The FRFA for the June 15, 2006 final rule included discussion of all alternatives for the bag limit provisions and the seasonal closure but focused primarily on the impacts of the bag limit provisions. The following FRFA summary for this final rule restates the discussion of all alternatives but focuses primarily on the analysis of the seasonal closure contained in this final rule. This final rule will establish a February 15 to March 15 recreational seasonal closure for red grouper, gag, and black grouper. The purpose of this regulatory amendment is to implement management measures for the Gulf of Mexico grouper fishery that will restrict recreational red grouper landings to levels specified in the red grouper rebuilding plan. The Magnuson-Stevens Act provides the statutory basis for this final rule. Eight comments were received from the public on the economic impacts of the closed season component of the proposed rule. As previously discussed, although consideration of the seasonal closure was deferred, no changes were made in the final rule as a result of these comments. The comments stated that the closure would severely impact the livelihood of charter boat captains, crew, and their families. NMFS agrees that the closure will likely result in reduced bookings and trip receipts. Estimates of the expected impacts have been provided in the assessment and are summarized below. The low red grouper bag limit and bycatch problems associated with adjusting the minimum size limit, however, necessitate closure to achieve the harvest reduction goals. Single species closure raises additional bycatch problems. The seasonal closure specified by the final rule is expected to result in the fewest cancelled trips and forgone revenues of the closure alternatives considered by the Council while providing the added unquantifiable benefits of spawning season protection for the three species. No duplicative, overlapping, or conflicting Federal rules have been identified. In June 2003, a moratorium was placed on the issuance of new charter vessel/headboat (for-hire) permits for reef fish. The moratorium was replaced by a limited access system which became effective on June 15, 2006. Currently, approximately 1,625 unique vessels are permitted to operate in this fishery. The for-hire fishery is comprised of charter vessels, which charge fees on a per-vessel basis, and headboats, which charge fees on an individual angler basis. The average charter vessel is estimated to generate $76,960 in annual revenue and $36,758 in annual “profit” (computed as gross revenue minus costs; costs exclude depreciation, fixed costs, and returns to owner/operators). The comparable figures for an average headboat are $404,172 in annual gross revenue and $338,209 in annual profits. Some vessels in the for-hire fleet also participate in the commercial fisheries. However, information on the average revenues generated from operation as a commercial vessel and the impacts of these revenues on the overall economic performance of the business operation are unknown. Although the rule will not directly affect support industries, potential reductions in fishing effort and associated expenditures may have indirect impacts on hotels, restaurants, gear and bait shops, and other associated businesses. Sufficient data are not available to enumerate or characterize these businesses. The rule will not change current reporting, recordkeeping and other compliance requirements under the FMP. These requirements include permit qualification criteria and participation in data collection programs if selected by NMFS. All of the information elements required for these processes are standard elements essential to the successful operation of a fishing business and should, therefore, already be collected and maintained as standard operating practice by the business. The requirements do not require professional skills or take excessive time, and, therefore, are deemed not to be onerous. The Small Business Administration defines a small business in the for-hire fishery sector as a firm that is independently owned and operated, is not dominant in its field of operation, and has annual receipts up to $6.5 million. Given the economic profile of the for-hire fleet presented above, NMFS determined that all for-hire fishing entities that could be affected by this final rule are small business entities. Because all of these entities could be affected, NMFS determined that the final rule will affect a substantial number of small entities. The determination of “significant economic impact” can be ascertained by examining two issues: disproportionality and profitability. The disproportionality question is whether the regulations place a substantial number of small entities at a significant competitive disadvantage to large entities. All for-hire entities affected by the rule are considered small entities, so the issue of disproportionality does not arise in the present case. The profitability question is whether the regulations significantly reduce profit for a substantial number of small entities. For-hire operations, specifically charter boats, will bear the primary burden of the rule, although spill-over impacts are expected in associated industries such as hotels, marinas, and bait and tackle shops. For-hire operations may experience a reduction in bookings, resulting in reduced receipts from for-hire fees, tips, gear rental, food or beverages, and fish-cleaning. The seasonal closure contained in this final rule is estimated to result in a reduction of for-hire fees of up to $2.52 million (approximately $1,550 per vessel) due to cancellation of trips during the closed season, or approximately 2 percent of average gross revenues and 4 percent of average net revenues per vessel. Sufficient data are not available to determine the precise impact of this final rule on associated industries, but it can be expected that some decline in revenues would occur. As mentioned in the introduction to this FRFA summary, the following discussion of alternatives includes discussion of the bag limit provisions implemented via the June 15, 2006 final rule (71 FR 34534) and the seasonal closure implemented by this final rule. Six alternatives, including the status quo, were considered to the proposed red grouper bag limit and seasonal closure. The status quo would have allowed continued landing overages in the recreational sector and would, therefore, not meet the Council's objectives because continued overages would not allow the fishery to meet rebuilding goals. The second alternative would have reduced the red grouper daily bag limit to one fish per angler or three fish per vessel, whichever is less. This alternative is more restrictive than the bag limit in the final rule and, therefore, would result in greater adverse economic impacts due to greater loss of consumer surplus and greater likelihood of trip cancellation. The third alternative would have increased the red grouper recreational minimum size limit to 22 inches (55.9 cm). An increase in the minimum size limit, however, would be expected to increase bycatch and discard mortality, which is inconsistent with the Council's objective of minimizing bycatch and discard mortality. Thus, this alternative would not meet the Council's objectives. The fourth alternative would have reduced the red grouper recreational bag limit within the aggregate grouper limit to one per person per day and closed the season for all grouper during August. This alternative would have resulted in greater reductions in consumer surplus and potential foregone expenditures, therefore increasing the adverse economic impacts relative to the final rule. The fifth alternative would have reduced the red grouper recreational bag limit within the aggregate limit to one per person per day and closed the season for all grouper during April through May. This alternative would also have resulted in greater reductions in consumer surplus and potential foregone expenditures than the final rule. The sixth alternative would have reduced the red grouper bag limit within the aggregate limit to one per person per day and increased the minimum recreational size limit to 21 inches (53.3 cm). Similar to an increase of the minimum size limit to 22 inches (55.9 cm), excessive bycatch mortality was expected to accrue to this alternative. The final alternative to the red grouper bag limit would have reduced the red grouper bag limit within the aggregate grouper limit to one fish per angler or three fish per vessel per day, whichever is less, except for reef fish-permitted for-hire vessels with a U.S. Coast Guard Certificate of Inspection. For these vessels, the resultant vessel limit would be one red grouper per two paying passengers. This alternative is more restrictive than the rule and would result in greater adverse economic impacts than the rule. One alternative, the status quo, was considered for the 0-fish captain and crew grouper bag limit. The status quo, which would allow captain and crew a bag limit equal to that of the recreational angler, in combination with the other actions, would not achieve the necessary red grouper harvest reductions and would not, therefore, meet the Council's objectives. The 0-fish captain and crew bag limit constrains the potential harvest capacity aboard for-hire vessels, limits allowable bag limits to paying clients who are fishing recreationally, and contributes additional reduction in fishing mortality. Copies of the FRFA are available from NMFS (see ADDRESSES ). List of Subjects in 50 CFR Part 622 Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping requirements, Virgin Islands. Dated: November 13, 2006. Samuel D. Rauch III Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 622 is amended as follows: PART 622—FISHERIES OF THE CARIBBEAN, GULF, AND SOUTH ATLANTIC 1. The authority citation for part 622 continues to read as follows: Authority: 16 U.S.C. 1801 *et seq.* 2. In § 622.34, paragraph
(o)is revised and paragraph
(u)is added to read as follows: § 622.34 Gulf EEZ seasonal and/or area closures.
(o)*Seasonal closure of the commercial fishery for gag, red grouper, and black grouper.* From February 15 to March 15, each year, no person aboard a vessel for which a valid Federal commercial permit for Gulf reef fish has been issued may possess gag, red grouper, or black grouper in the Gulf, regardless of where harvested. From February 15 until March 15, each year, the sale or purchase of gag, red grouper, or black grouper is prohibited as specified in § 622.45(c)(4).
(u)*Seasonal closure of the recreational fishery for gag, red grouper, and black grouper.* The recreational fishery for gag, red grouper, and black grouper in or from the Gulf EEZ is closed from February 15 to March 15, each year. During the closure, the bag and possession limit for gag, red grouper, and black grouper in or from the Gulf EEZ is zero. [FR Doc. E6-19481 Filed 11-16-06; 8:45 am] BILLING CODE 3510-22-S 71 222 Friday, November 17, 2006 Proposed Rules DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Parts 305 and 319 [Docket No. APHIS-2006-0121] RIN 0579-AC19 Importation of Mangoes From India AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule. SUMMARY: We are proposing to amend the fruits and vegetables regulations to allow the importation into the continental United States of mangoes from India under certain conditions. As a condition of entry, the mangoes would have to undergo irradiation treatment and be accompanied by a phytosanitary certificate with additional declarations providing specific information regarding the treatment and inspection of the mangoes and the orchards in which they were grown. In addition, the mangoes would be subject to inspection at the port of first arrival. This action would allow for the importation of mangoes from India into the continental United States while continuing to provide protection against the introduction of quarantine pests. DATES: We will consider all comments that we receive on or before January 16, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2006-0121 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0121, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0121. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Ms. Donna L. West, Senior Import Specialist, Commodity Import Analysis and Operations, PPQ, APHIS, 4700 River Road Unit 133, Riverdale, MD 20737-1231;
(301)734-8758. SUPPLEMENTARY INFORMATION: Background The regulations in “Subpart—Fruits and Vegetables” (7 CFR 319.56 through 319.56-8, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests that are new to or not widely distributed within the United States. The national plant protection organization
(NPPO)of India has requested that the Animal and Plant Health Inspection Service (APHIS) amend the regulations to allow mangoes from India to be imported into the continental United States (the lower 48 States and Alaska). As part of our evaluation of India's request, we prepared a pest risk assessment
(PRA)and a risk management document. Copies of the PRA and risk management document may be obtained from the person listed under FOR FURTHER INFORMATION CONTACT or viewed on the Regulations.gov Web site (see ADDRESSES above for instruction for accessing Regulations.gov). The PRA, titled “Importation of Fresh Mango Fruit ( *Mangifera indica* L.) From India into the Continental United States; A Qualitative, Pathway-Initiated Pest Risk Assessment” (June 2006), evaluates the risks associated with the importation of mangoes into the continental United States from India. The PRA and supporting documents identified 20 pests of quarantine significance present in India that could be introduced into the continental United States via mangoes: • The fruit flies *Bactrocera caryeae* (Kapoor), *Bactrocera correcta (Bezzi), Bactrocera cucurbitae* (Coquillett), *Bactrocera diversa* (Coquillett), *Bactrocera dorsalis* (Hendel), *Bactrocera tau* (Walker), and *Bactrocera zonata* (Saunders); • The scale insects *Aulacaspis tubercularis* (Newstead), *Ceroplastes rubens* (Maskell), *Coccus viridis* (Green), *Parlatoria crypta* (Mckenzie), and *Pseudaonidia trilobitiformis* (Green); • The mango flesh weevil *Sternochetus frigidus* (F.) and the mango seed weevil *Sternochetus mangiferae* (F.); • The fungi *Actinodochium jenkinsii* Uppal, Patel & Kamat, *Cytosphaera mangiferae* Died., *Hendersonia creberrima* Syd., Syd. & Butler, *Macrophoma mangiferae* Hing. & Sharma, and *Phomopsis mangiferae* S. Ahmad; and • The bacterium *Xanthomonas campestris* pv. *mangiferaeindicae* (Patel *et al.* ) Robbs *et al.* APHIS has determined that measures beyond standard port of entry inspection are required to mitigate the risk posed by these plant pests. The proposed phytosanitary measures include a requirement that the mangoes be treated with a minimum absorbed irradiation dose of 400 gray in accordance with § 305.31 of the phytosanitary treatments regulations in 7 CFR part 305. This is the established generic dose for all insect pests except pupae and adults of the order Lepidoptera. There are no pests of the order Lepidoptera associated with mangoes from India, therefore this treatment would successfully mitigate the risk of all 14 insect pests associated with mangoes from India. Each shipment of fruit would have to be accompanied by a phytosanitary certificate issued by the NPPO of India certifying that the fruit received the required irradiation treatment. In addition, this irradiation treatment would have to be administered outside of the United States in an APHIS-certified facility and would have to be monitored by APHIS inspectors. At this time India has an irradiation facility, but it is not APHIS-certified. However, the facility is such that it could be upgraded, retrofitted, and certified should India apply for certification. In accordance with § 305.31, APHIS and the Indian NPPO would have to jointly develop a preclearance work plan that details the activities APHIS and the NPPO will carry out in connection with each irradiation facility to verify the facility's compliance with 7 CFR part 305. Typical activities to be described in the work plan may include frequency of visits to the facility by APHIS and Indian inspectors, methods for reviewing facility records, and methods for verifying that facilities are in compliance with the requirements for separation of articles, packaging, and labeling. This facility preclearance work plan would have to be reviewed and renewed by APHIS and the NPPO of India on an annual basis. In addition, the NPPO of India would have to enter into a trust fund agreement with APHIS to provide for all expenses incurred by APHIS while performing preclearance activities, such as inspections for pests not targeted by the irradiation treatment, and treatment monitoring services. Those costs include administrative expenses and all salaries, travel expenses, and other incidental expenses incurred by APHIS in performing these services. The trust fund agreement would also describe the general nature and scope of APHIS services provided at irradiation facilities covered by the agreement, such as whether APHIS inspectors will monitor operations continuously or intermittently, and would generally describe the extent of inspections APHIS will perform on articles prior to and after irradiation. The required irradiation treatment would not mitigate the risks posed by the fungi *Actinodochium jenkinsii, Cytosphaera mangiferae, Hendersonia creberrima, Macrophoma mangiferae,* or *Phomopsis mangiferae* or the bacterium *Xanthomonas campestris* pv. *mangiferaeindicae.* However we consider *Actinodochium jenkinsii, Hendersonia creberrima,* and *Phomopsis mangiferae* to be of low risk of introduction and dissemination within the continental United States. This is because these fungi occur only in tropical areas that roughly correspond to USDA Plant Hardiness Zone 11. In addition, the host range for these fungi appears to be limited to mango. Because the proposed distribution of mangoes from India would be limited to the continental United States, and the mango-producing areas of Florida and California correspond to USDA Plant Hardiness Zone 10b, survival of these pathogens is unlikely. In order to mitigate the risks posed by *Cytosphaera mangiferae* and *Macrophoma mangiferae,* which we consider to be of medium risk of introduction and dissemination within the continental United States, we are proposing three options:
(1)The mangoes be treated with a broad-spectrum post-harvest fungicidal dip,
(2)the orchard of origin be inspected at a time prior to the beginning of harvest as determined by the mutual agreement between APHIS and the NPPO of India and be found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae,* or
(3)the orchard of origin be treated with a broad-spectrum fungicidal application during the growing season, be inspected at a time prior to the beginning of harvest as determined by the mutual agreement between APHIS and the NPPO of India, and the fruit found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae.* Symptoms of both fungal pathogens can be easily seen and detected in the field on mango leaves and fruit during pre-harvest inspection. Post-harvest diseases do not occur without the presence of fungal symptoms on leaves in the field. In addition, standard phytosanitary procedures in place in India already require the application of fungicidal sprays twice during the mango growing season, once at bloom and again between bloom and harvest. Orchard application of broad spectrum fungicide sprays protects fruit from infection by aerial spores produced on leaves or stems. In order to mitigate the risks posed by *Xanthomonas campestris* pv. *mangiferaeindicae* , which we also consider to be of medium risk of introduction and dissemination within the continental United States, we are proposing that the shipment be inspected during preclearance activities and found free of *Xanthomonas campestris* pv. *mangiferaeindicae.* Symptoms of *Xanthomonas campestris* pv. *mangiferaeindicae* are also easily discernible with the naked eye and would most likely be detected during visual inspection of the fruit at the packinghouse. The bacterium is not generally considered a post-harvest disease. Infection occurs most often through wounds which would cause the fruit to be culled during harvest or processing. We further propose that each shipment of fruit be inspected jointly by APHIS and NPPO of India inspectors and that the accompanying phytosanitary certificate issued by the NPPO of India certifying that the fruit received the required irradiation treatment include two additional declarations. The first additional declaration would depend on which of the three options described above was chosen, *i.e.* , “the fruit in this shipment was subjected to a post-harvest broad spectrum fungicidal dip,” or “the orchard where the fruit in this shipment was grown was inspected prior to harvest and found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae* ,” or “the orchard where the fruit in this shipment was grown was treated with a broad spectrum fungicide during the growing season, was inspected prior to harvest, and the fruit was found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae* .” The second additional declaration would have to state: “The fruit in this shipment was inspected during pre-clearance activities and found free of *Cytosphaera mangiferae* , *Macrophoma mangiferae* , and *Xanthomonas campestris* pv. *mangiferaeindicae* .” Specifically listing the pests on the additional declaration would also serve to alert APHIS inspectors at the point of entry to the specific pests of concern. The commodity imports would be restricted to commercial shipments only. Produce grown commercially is less likely to be infested with plant pests than noncommercial shipments. Noncommercial shipments are more prone to infestations because the commodity is often ripe to overripe, could be of a variety with unknown susceptibility to pests, and is often grown with little or no pest control. Commercial shipments, as defined in § 319.56-1, are shipments of fruits and vegetables that an inspector identifies as having been produced for sale and distribution in mass markets. Identification of a particular shipment as commercial is based on a variety of indicators, including, but not limited to, the quantity of produce, the type of packaging, identification of a grower or packinghouse on the packaging, and documents consigning the shipment to a wholesaler or retailer. Commercially produced fruit in India are already subjected to standard commercial cultural and post-harvest practices that reduce the risk associated with plant pests. While not specifically required by this proposal, standard cultural practices other than the twice yearly application of broad spectrum fungicides ( *e.g.* , the regular use of sanitation measures, irrigation, fertilization, and pest control) help to further ensure that the pests of concern do not follow the pathway. All export orchards are registered production sites with traceback capability. Harvested fruit is moved to the packinghouses in a manner that would preclude reinfestation by pests. Culling of blemished and damaged fruit occurs in the field and during the post-harvest commercial processing of the fruit. The regulations in § 319.56-6 provide that all imported fruits and vegetables shall be inspected, and shall be subject to such disinfection at the port of first arrival as may be required by an inspector. The pre-export inspection conducted by APHIS personnel as part of preclearance activities in the country of export typically serves to satisfy the inspection requirement. Section 319.56-6 also provides that any shipment of fruits and vegetables may be refused entry if the shipment is so infested with plant pests that an inspector determines that it cannot be cleaned or treated. We believe that the proposed conditions described above, as well as all other applicable requirements in § 319.56-6, would be adequate to prevent the introduction of plant pests into the continental United States with mangoes imported from India. The proposed conditions described above for the importation of mangoes from India into the continental United States would be added to the fruits and vegetables regulations as a new § 319.56-2tt. In addition, we would also amend the table in § 305.2(h)(2)(i) of the phytosanitary treatments regulations by amending the entry for India to include mangoes and designate irradiation
(IR)as an approved treatment for the specific pests named in this document. Executive Order 12866 and Regulatory Flexibility Act This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. In accordance with 5 U.S.C. 603, we have performed an initial regulatory flexibility analysis, which is set out below, regarding the effects of this proposed rule on small entities. We do not currently have all the data necessary for a comprehensive analysis of the effects of this proposed rule on small entities. Therefore, we are inviting comments concerning potential effects. Production of mangoes in the United States is limited to three States: Florida, California, and Hawaii. Due to climatic conditions and expanding urbanization in areas of production, mango-producing acreage is small and production minimal. We rely heavily on imports of fresh mangoes in order to meet consumer demand. The majority of mangoes produced in Florida, California, and Hawaii are destined for local markets, with very limited larger-scale commercial production. Below we examine recent production in the three mango-producing States, followed by a discussion of foreign supply. Florida Over 80 percent of mango acreage in Florida is located in Miami-Dade County, and the remaining acreage is located in surrounding areas. Mango cultivars commonly grown in Florida, which also make up the majority of varieties currently exported to the United States, are ‘Tommy Atkins,’ ‘Keitt,’ ‘Haden,’ and ‘Kent.’ The 2002 Census of Agriculture states that Florida had 400 mango-producing farms with 1,373 acres. 1 By 2003, the most recent year for which statistics are available, the number of acres had dropped to 1,300, a 24 percent decline in 3 years. Recent estimates indicate that the acreage has decreased still further, to a modest 1,000 acres in 2005. 2 Only two acres of mangoes have been planted in Florida since 2000. In a 1997 production report, the last year these statistics were gathered, a mango crop of 100,000 bushels (5.5 million pounds) was harvested, with a price of $14.50 per bushel, yielding a total value of $1.45 million. 3 Due to declining acreage, and consequently reduced harvest yield, production and value statistics are no longer maintained. The majority of mangoes produced in Florida are destined for local farmers' and specialty markets, or sold as green fruit for processing. We are unaware of any larger-scale commercial shipments of fresh mangoes by Florida producers. 1 USDA-NASS. 2002 Census of Agriculture, Table 31. Fruits and Nuts: 2002 and 1997. Washington, DC: National Agricultural Statistics Service, 2002. 2 Richard J. Campbell, PhD, Senior Curator of Tropical Fruit, “International Mango Festival 2005 Curator's Choice Cultivars.” Coral Gables, FL: Fairchild Tropical Botanic Garden, page updated May 31, 2005. ( *http://www.fairchildgarden.org/horticulture/mangocurators.html.* ) 3 USDA-NASS-FL. Tropical Fruit Acres and Trees. Orlando, FL: Florida Agricultural Statistics Service, December 11, 2002 and May 12, 2003. California According to the 2002 Census of Agriculture, there were 11 mango-producing farms in California, with an unknown amount of acreage. 4 Until recently, mangoes produced in California were thought to be sold only in local markets. However, recent news reports indicate that there are two commercial mango operations in the Coachella Valley of California that sell their fruit through the Corona College Heights Orange & Lemon Association in Corona, CA. 5 According to the article, the two operations have a combined total of 210 bearing acres, yielding about 275,000 cartons of mangoes (approximately 3.8 million pounds), with a little less than half being certified organic. 6 In addition, one of the growers expects to have an additional 48 acres bearing fruit by 2007. Commercial mango production in California is a relatively new venture, and is expected to grow only gradually. As the article points out, the availability of suitable land for mangoes is limited due to the fruits' susceptibility to frost. For those areas that are not prone to frost, producers are reluctant to switch to mango production from profitable crops such as grapes and citrus because of the heavy initial investments and the long period between first investment and return. The time period between first planting and first production is 5 years for mango trees, so it is not surprising that producers are reluctant to enter into this industry. 4 The production acreage was withheld to avoid disclosing confidential business information for individual farms. 5 “Organic Mangos Now Coming Out of California” by Tim Linden. Web site: *http://theproducenews.com/storydetail.cfm?ID=6216* , August 18, 2006. 6 *Note:* According to a source describing the harvesting and packing of Florida mangoes, a carton can hold 8 to 20 mangoes depending on the size of the fruit, and have a capacity of 14 lbs (6.35 kg) of fruit ( *http://www.hort.purdue.edu/newcrop/morton/mango_ars.html* ). Hawaii In 2002, the Census of Agriculture recorded 212 mango-producing farms in Hawaii, but withheld production acreage to avoid disclosing information for individual operations. In 2004, the Hawaiian field office of the National Agricultural Statistics Service
(NASS)reported there were 140 farms, with a total of 275 acres of crops, of which 200 acres yielded utilized production of 380,000 pounds, with a sales value of $350,000. Preliminary reports for 2005 indicate a decrease of 28.5 percent in the number of mango farms to 100, but an increase in total crop acreage to 295. The amount of harvested acres in 2005 was 190, which represents a slight decrease. However, there was a 39.4 percent increase in utilized production, which, combined with a higher farm price per pound, yielded a 40.2 percent increase in total sales value to $586,000. 7 The amount of commercial production of mangoes in Hawaii is unknown at this time; however, we believe the majority of production is funneled into local markets. We welcome public comment regarding the amount of commercial production of mangoes in Hawaii other than for local markets. 7 USDA-NASS-HI. Hawaii Tropical Specialty Fruits. Honolulu, HI: National Agricultural Statistics Service USDA, Hawaii Field Office, 2004 and 2005 edition. *Note:* Utilized production may include fresh and processed utilization. As is evident, U.S. mango production is limited, with most of the fruit sold locally. In fact, official supply and utilization data maintained by USDA's Economic Research Service
(ERS)have not recorded domestic production figures since 1998. U.S. consumers are almost entirely dependent on imports to meet domestic demand. Table 1 presents ERS data on the supply and utilization of fresh mangoes, 2002-2004. 8 8 USDA-ERS. Table F-6, Fresh Mangoes: Supply and Utilization, 1980 to date. Washington, DC: Economic Research Service, December 21, 2005. Table 1.—Fresh Mangoes Supply and Utilization Year Utilization Imports Total supply Exports Consumption Total Per capita Million pounds Pounds 2002 580.6 580.6 11.8 568.8 1.97 2003 613.8 613.8 14.5 599.4 2.06 2004 609.2 609.2 17.1 592.1 2.01 Preliminary estimates for 2005 indicate annual consumption was 1.9 pounds per person, down slightly from a historic high of a little over 2 pounds per person reached in 2003. Industry experts correlate this decline with lower imports, and believe the downward trend in consumption will be reversed should imports continue higher throughout the rest of 2006. 9 In 2005, 575.1 million pounds of fresh mangoes were imported into the United States, which was a decline from the previous year when imports totaled 609.2 million pounds. Table 2 highlights the volume of fresh mango imports for the calendar year 2005 from the top five countries. 9 USDA-ERS. Fruit and Tree Nuts Outlook. May 25, 2006. Table 2.—Fresh Mango Imports, Volume and Value, January-December 2005 Country Imports 9/1-5/31 Imports 6/1-8/31 Total yearly imports Value 9/1-5/31 Value 6/1-8/31 Total yearly value Million pounds 1,000 dollars Mexico 169.7 180.7 350.4 $51,707 $51,603 $103,310 Peru 65.8 65.8 21,522 21,522 Brazil 56.0 1.6 57.6 17,638 585 18,223 Ecuador 53.1 53.1 13,476 13,476 Haiti 11.4 9.2 20.7 3,886 3,457 7,343 World total 382.9 192.1 575.0 113,309 55,808 169,117 Data Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics. Note: HS Codes used were 0804504040 (mangoes fresh, entered 9/1-5/31) and 0804506040 (mangoes fresh, entered 6/1-8/31). The 2005 trade statistics indicate fresh mangoes were imported from 13 countries, with the overwhelming majority originating from countries in Central and South America. Although the United States imports mangoes from many countries, Mexico is the major supplier, with a market share of more than 60 percent of the annual import volume, and therefore, essentially 60 percent of the U.S. supply of mangoes. Interestingly, though, Mexico is only the fourth leading producer of mangoes, trailing behind India, China, and Thailand. Its proximity to the United States and participation in the North American Free Trade Agreement (NAFTA) provide advantages over other exporting countries of lower transport costs and reduced or no tariffs. 10 10 USDA-ERS. Fruit and Tree Nuts Briefing Room. Updated: October 8, 2004. Although the proposed rule would allow imports of all mango varieties, India is currently interested in exporting three varieties of mangoes to the United States—‘Kesar,’ ‘Alfonse,’ 11 and ‘Banganpalli’—from four States: Andhra Pradesh, Gujarat, Maharashtra, and Uttar Pradesh. Based on a site visit conducted by APHIS officials, we believe the majority of exports would originate from Gujarat and Maharashtra, where there are two and six production areas, respectively, producing ‘Kesar’ and ‘Alfonse’ varieties. The harvest season in India starts in late spring, usually April or May, and lasts about 2 \1/2\ months. According to the request from the Government of India, the quantity of mangoes exported to the United States would be about 100 sea containers per year. 12 With India being the world leader in mango production, and a typical export packinghouse having a shipping capacity of 40-50 metric tons (over 88,000 lbs.) per day for 45-50 days of the harvest season, the amount imported into the United States would likely only be limited by U.S. market forces. Entry of Indian mangoes into the domestic market would provide increased variety and greater selection for consumers in the continental United States. 11 This mango variety is also known as ‘Alfonso’. 12 Source: A Qualitative, Pathway-Initiated Pest Risk Assessment, prepared June 2006 (APHIS). *Note:* The average container used to ship mangoes from South America is a 44-foot container, having an average capacity of 22 pallets. Each pallet holds an average of 200 boxes. The average weight of each box is 5.0 kilograms (kg). Thus, the total weight of each container is 200 boxes × 5.0 kg × 22 pallet = 22,000 kg (48,501.70 lbs.). Source: Adly Ibrahim (APHIS). The overwhelming majority of mangoes produced domestically are sold in local markets. Even though the proposed rule could result in an overall increase in fresh mango imports, and thus, an increase in domestic supply, we do not anticipate the price impacts on domestic mango producers to be large. Indian mangoes would primarily compete for market share against other imported mangoes. Based on the higher transportation costs alone, we would expect the price of Indian mangoes to be higher than mangoes coming from countries currently exporting to the United States. Statistics show that in 2004, the export price of Indian mangoes ($595.95/metric tonne) was 16 percent higher than the export price of mangoes from Mexico ($511.96/metric tonne), our primary supplier. 13 13 FAOSTAT-TradeSTAT. Food and Agriculture Organization of the United Nations Trade Databases. ( *http://faostat.fao.org* ). In order to compete with other countries importing mangoes into the United States, India expects to first target niche and gourmet markets by promoting the mangoes as premium quality fruit. Producers indicated to the APHIS site visit team that initially, the mangoes are expected to be sold through premium catalog sales and/or in specialty and ethnic grocers, after which the mangoes would then be sold in the regular retail sector. Additionally, we expect that India would initially target those geographic areas and markets with high concentrations of Asian and South-Asian persons. According to the United States Census in 2000, 11.9 million people, or 4.2 percent of the population, identified themselves as Asian. The 10 states with the largest Asian demographic in 2000 were California, New York, Hawaii, Texas, New Jersey, Illinois, Washington, Florida, Virginia, and Massachusetts, which combined represent 75 percent of the Asian population in the United States. Regionally, the West and the Northeast have the largest concentrations of Asians. Asian Indians represented the third largest specified Asian group, with a total of 1.9 million people who reported Asian Indian alone or in combination with at least one other race or Asian group. 14 Usually, economic theory dictates that an overall increase in supply of a particular commodity would trigger downward pressure on price and result in reduced market share for domestic producers of that commodity. However, we believe the effects on domestic producers of the proposed rule would be minimal, in light of the predominance of imports and the specialty markets that India is expected to target. Based on the information we have at this time, we expect the benefits of opening the market to Indian mangoes would outweigh any expected costs to domestic producers. However, we welcome public comment on possible impacts on domestic entities as a result of the proposed regulation. 14 The Asian Population: 2000, Census 2000 Brief. Washington, DC: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, Issued February 2002. The proposed rule would only allow the importation of commercial shipments of fresh mangoes from India provided they have undergone specific phytosanitary requirements. The requirements outlined in the proposed rule include treatment in India of mango fruit with irradiation using a minimum absorbed dose of 400 gray, and preclearance inspection for those pests not targeted by the irradiation treatment. The NPPO of India would enter into a trust fund agreement with APHIS to provide for all expenses incurred by APHIS while performing preclearance activities, including salaries and administrative, travel, and other incidental expenses. Costs, if any, not covered by the trust fund would be minimal. In addition to irradiation and other preclearance activities, current regulations set out a course of action if, on inspection at the port of arrival, any actionable pest or pathogen is identified. We believe these risk-mitigating phytosanitary measures are sufficient to protect against the introduction of quarantine plant pests into the continental United States associated with the importation of mangoes from India. The proposed rule may affect domestic producers of mangoes, as well as firms that import mangoes, which are likely to be classified as small entities according to U.S. Small Business Administration's
(SBA)guidelines. As described above, there is very little larger-scale commercial production of mangoes within the United States. The overwhelming majority of domestically produced mangoes are sold in local markets. In fact, official supply and utilization data maintained by USDA's Economic Research Service
(ERS)have not recorded domestic production figures since 1998. The SBA's size standard for mango farming is $750,000 or less in annual receipts. 15 According to the 2002 Census of Agriculture, there were a total of 623 farms (400 in Florida, 11 in California, and 212 in Hawaii) engaged in mango production. Census data did not include annual sale valuation statistics for mango-producing farms. The exact number of mango farms that would be considered small by SBA standards is unknown. However, based on the small bearing acreage, production principally for local markets, and our dependence on imports to meet domestic demand for mangoes, we would expect the majority of these operations to be classified as small. 15 Table of Size Standards based on NAICS 2002 [Other Noncitrus Fruit Farming: NAICS code 111339]. Washington, D.C.: U.S. Small Business Administration, effective July 31, 2006. Other industries that may be affected by the proposed rule, as categorized in the North American Industry Classification System (NAICS), are Fresh Fruit and Vegetable Merchant Wholesalers (NAICS 424480), Fruit and Vegetable Markets (NAICS 445230), and Mail-Order Houses (NAICS 454113). 16 All of these industries are primarily comprised of small entities. There were 4,644 fruit and vegetable merchant establishments that operated for the entire year, with 4,436 of them, or 95.5 percent, operating with fewer than 100 employees. Of the 2,257 fruit and vegetable market establishments that operated for the entire year, only 84 of them had sales of over $5 million, leaving over 96 percent of these establishments with sales less than $5 million. Lastly, there were 8,224 establishments classified under the NAICS code for mail-order houses, of which 7,319 of them, or about 89 percent, had annual sales of less than $10 million. 17 All of the above industries may benefit from the proposed rule by having access to Indian mangoes, which could bolster sales volume and annual revenue. 16 SBA size standards are as follows: NAICS code 424480: 100 employees or less; NAICS code 445230: $6.5 million or less in annual receipts; NAICS code 454113 (note: includes those operations that engage in direct catalog sales): $23 million or less in annual receipts. 17 Establishment and Firm Size based on 2002 Economic Census. Washington, D.C.: U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau, Issued December 2005 (wholesale trade) and November 2005 (retail trade). There are no significant alternatives to the proposed rule that would accomplish the stated objectives. The only alternative to the proposed rule would be to continue to prohibit imports from this region, thereby ignoring evidence that the pest risks associated with mango importation are minimal if we follow specified phytosanitary protocols. This alternative is not a viable option, as it would be inconsistent with international agreements to which the United States is a party that state that regulatory restrictions should be based on scientific evidence and applied only to the extent necessary to protect plant, human, and animal health. This proposed rule contains various recordkeeping and reporting requirements. These requirements are described in this document under the heading “Paperwork Reduction Act.” Executive Order 12988 This proposed rule would allow mangoes to be imported into the United States from India. If this proposed rule is adopted, State and local laws and regulations regarding mangoes imported under this rule would be preempted while the fruit is in foreign commerce. Fresh fruits are generally imported for immediate distribution and sale to the consuming public and would remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by-case basis. If this proposed rule is adopted, no retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule. National Environmental Policy Act To provide the public with documentation of APHIS' review and analysis of any potential environmental impacts associated with the proposed importation of mangoes from India into the continental United States, we have prepared an environmental assessment. The environmental assessment was prepared in accordance with:
(1)The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 *et seq.* ),
(2)regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508),
(3)USDA regulations implementing NEPA (7 CFR part 1b), and
(4)APHIS' NEPA Implementing Procedures (7 CFR part 372). The environmental assessment may be viewed on the Regulations.gov Web site or in our reading room. (Instructions for accessing Regulations.gov and information on the location and hours of the reading room are provided under the heading ADDRESSES at the beginning of this proposed rule.) In addition, copies may be obtained by calling or writing to the individual listed under FOR FURTHER INFORMATION CONTACT . Paperwork Reduction Act In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comments refer to Docket No. APHIS-2006-0121. Please send a copy of your comments to:
(1)Docket No. APHIS-2006-0121, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and
(2)Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue, SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule. APHIS is proposing to amend the fruits and vegetables regulations to allow the importation into the continental United States of mangoes from India under certain conditions. As a condition of entry, the mangoes would have to undergo irradiation treatment and be accompanied by a phytosanitary certificate with additional declaration providing specific information regarding the treatment and inspection of the mangoes and the orchards in which they are grown. In addition, the mangoes would be subject to inspection at the port of first arrival. This action would allow for the importation of mangoes from India, into the continental United States while continuing to provide protection against the introduction of quarantine pests. This proposed rule will require the use of phytosanitary certificates (foreign), additional declarations, compliance agreements (foreign), preclearance workplans, trust fund agreements, and recordkeeping. We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us:
(1)Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;
(2)Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; *e.g.* , permitting electronic submission of responses). *Estimate of burden:* Public reporting burden for this collection of information is estimated to average 0.5260 hours per response. *Respondents:* NPPOs and importers of mangoes. *Estimated annual number of respondents:* 154. *Estimated annual number of responses per respondent:* 33.1428. *Estimated annual number of responses:* 5,104. *Estimated total annual burden on respondents:* 2,685 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. E-Government Act Compliance The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this proposed rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. List of Subjects 7 CFR Part 305 Irradiation, Phytosanitary treatment, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements. 7 CFR Part 319 Coffee, Cotton, Fruits, Imports, Logs, Nursery stock, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Rice, Vegetables. Accordingly, we propose to amend 7 CFR parts 305 and 319 as follows: PART 305—PHYTOSANITARY TREATMENTS 1. The authority citation for part 305 would continue to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. 2. In § 305.2, the table in paragraph (h)(2)(i) would be amended by adding, under India, an entry for mango to read as follows: § 305.2 Approved treatments.
(h)* * *
(2)* * *
(i)* * * Location Commodity Pest Treatment schedule * * * * * * * India * * * * * * * Mango Plant pests of the class Insecta except pupae and adults of the order Lepidoptera IR * * * * * * * PART 319—FOREIGN QUARANTINE NOTICES 3. The authority citation for part 319 would continue to read as follows: Authority: 7 U.S.C. 450, 7701-7772, and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. 4. A new § 319.56-2tt would be added to read as follows: § 319.56-2tt Conditions governing the entry of mangoes from India. Mangoes ( *Mangifera indica* ) may be imported into the continental United States from India only under the following conditions:
(a)The mangoes must be treated in India with irradiation by receiving a minimum absorbed dose of 400 Gy in accordance with § 305.31 of this chapter.
(b)The risks presented by *Cytosphaera mangiferae* and *Macrophoma mangiferae* must be addressed in one of the following ways:
(1)The mangoes are treated with a broad-spectrum post-harvest fungicidal dip; or
(2)The orchard of origin is inspected prior to the beginning of harvest as determined by the mutual agreement between APHIS and the national plant protection organization (NPPO ) of India and the orchard is found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae;* or
(3)The orchard of origin is treated with a broad-spectrum fungicide during the growing season and is inspected prior to the beginning of harvest as determined by the mutual agreement between APHIS and the NPPO of India and the fruit found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae.*
(c)Each shipment of mangoes must be inspected jointly by APHIS and the NPPO of India as part of the required preclearance inspection activities at a time and in a manner determined by mutual agreement between APHIS and the NPPO of India.
(d)The risks presented by *Cytosphaera mangiferae, Macrophoma mangiferae,* and *Xanthomonas campestris* pv. *mangiferaeindicae* must be addressed by inspection during preclearance activities.
(e)Each shipment of fruit must be inspected jointly by APHIS and the NPPO of India and accompanied by a phytosanitary certificate issued by the NPPO of India certifying that the fruit received the required irradiation treatment. The phytosanitary certificate must also bear the following two additional declarations:
(1)A declaration identifying which of the mitigations provided under paragraph
(b)of this section was used, *i.e.:*
(i)“The fruit in this shipment was subjected to a post-harvest broad spectrum fungicidal dip,” or
(ii)“The orchard where the fruit in this shipment was grown was inspected prior to harvest and the orchard was found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae,* ” or
(iii)“The orchard where the fruit in this shipment was grown was treated with a broad spectrum fungicide during the growing season, was inspected prior to harvest, and the fruit was found free of *Cytosphaera mangiferae* and *Macrophoma mangiferae* .”
(2)A declaration stating: “The fruit in this shipment was inspected during preclearance activities and found free of *Cytosphaera mangiferae, Macrophoma mangiferae,* and *Xanthomonas campestris* pv. *mangiferaeindicae* .”
(f)The mangoes may be imported in commercial shipments only. Done in Washington, DC, this 14th day of November 2006. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E6-19452 Filed 11-16-06; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 33 [Docket No. NE127; Notice No. 33-06-01-SC] Special Conditions: General Electric Company GEnx Model Turbofan Engines AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed special conditions. SUMMARY: This action proposes special conditions for General Electric Company
(GE)GEnx turbofan engine models. These engines will have a novel or unusual design feature associated with the fan blades. The Administrator has determined that the applicable part 33 airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These proposed special conditions contain the added safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the airworthiness regulations. EFFECTIVE DATES: We must receive your comments by December 18, 2006. ADDRESSES: You may mail two copies of your comments to: Federal Aviation Administration, Engine and Propeller Directorate, Attn: Robert McCabe, Rules Docket (ANE-111), Docket No. NE127, 12 New England Executive Park, Burlington, Massachusetts 01803-5299. You may deliver two copies to the Engine and Propeller Directorate at the above address. You must mark your comments: Docket No. NE127. You may send comments via email to *robert.mccabe@faa.gov* . You must use the subject “Docket No. NE127”. You can inspect comments in the Rules Docket weekdays, except Federal holidays, between 7:30 a.m. and 4 p.m. FOR FURTHER INFORMATION CONTACT: Robert McCabe, ANE-111, Rulemaking and Policy Branch, Engine and Propeller Directorate, Aircraft Certification Service, 12 New England Executive Park, Burlington, Massachusetts 01803-5299; telephone
(781)237-7138; facsimile
(781)238-7199; email *robert.mccabe@faa.gov* . SUPPLEMENTARY INFORMATION: Comments Invited We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments. We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel about these special conditions. You can inspect the docket before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. We will consider all comments we receive by the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive. If you want us to let you know we received your comments on this proposal, send us a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you. Background On December 13, 2004, the General Electric Company
(GE)applied to the FAA for a new type certificate for the GEnx series engine models. On May 24, 2005, GE submitted a revised application for a type certificate that added models and changed the model designation nomenclature. The turbofan engine models to be certified are GEnx-1B54, GEnx-1B58, GEnx-1B64, GEnx-1B67, GEnx-1B70, GEnx-1B70/72, GEnx-1B70/75, GEnx-1B72, and GEnx-1B75. For these GEnx engine models, GE plans to use carbon graphite composite fan blades incorporating metal leading and trailing edges that use geometry, composite structural materials, and manufacturing methods very similar to those used for the previously certified GE90-series engine fan blades designs. In lieu of direct compliance to § 33.94(a)(1) for the GEnx fan blades, the FAA has proposed that GE comply with new special conditions that retain the requirements of the original SC-33-ANE-08 created for the GE90-76B, -77B, -85B, -90B, -94B model certification program, and then successfully applied to the GE90-110B1, -113B, and -115B model certification program. These GE90 series engine model fan blades are manufactured using carbon graphite composite material that also incorporates metal leading and trailing edges. These unusual and novel design features result in the fan blades having significant differences in material property characteristics when compared to conventionally designed fan blades using non-composite metallic materials. GE submitted data and analysis during the GE90-76B, -77B, -85B, -90B, -94B model certification program showing the likelihood that a composite fan blade with fail below the inner annulus flow path line is highly improbable. GE, therefore, questioned the appropriateness of the requirement contained in § 33.94(a)(1) to show blade containment after a failure of the blade at the outermost retention feature. The FAA determined that the requirements of § 33.94(a)(1) are based on metallic blade characteristics and service history, and were not appropriate for the unusual design features of the composite fan blade design planned for the GE90-76B, -77B, -85B, -90B, -94B model turbofan engines. The FAA determined that a more realistic blade retention test would be achieved with a fan blade failure at the inner annulus flow path line (the complete airfoil only) instead of the outermost blade retention feature as currently required by § 33.94(a)(1). The FAA, therefore, issued special conditions SC-33-ANE-88 on February 1, 1995 for the GE90-76B, -77B, -85B, -90B, -94B engine models. These special conditions defined additional safety standards for the carbon graphite composite fan blades that were appropriate for the unusual design features of those fan blades and that were determined to be necessary to establish a level of safety equivalent to that established by the airworthiness standards of § 33.94(a)(1). The FAA later determined that these special conditions continued to be appropriate for the amended type certificate applied to the GE90-110B1, -113B, and -115B engine models. The FAA also determined that the composite fan blade design and construction presents factors other than the expected location of a blade failure that must be considered. Tests and analyses must account for the effects of in-service deterioration of, manufacturing and materials variations in, and environmental effects on, the composite material. Tests and analyses must also show that a lightning strike on a composite fan blade will not result in a hazardous condition to the aircraft and that the engine will continue to meet the requirements of § 33.75. Therefore, due to the close similarity of the GEnx model series fan blade design to the previously certified GE90 model series fan blade design, the FAA is proposing to issue similar special conditions as part of the type certification basis for the GEnx engine models in lieu of direct compliance to § 33.94(a)(1). These special conditions define the additional requirements that the Administrator considers necessary to establish a level of safety equivalent to that which would be established by direct compliance to the airworthiness standards of § 33.94(a)(1). Type Certification Basis Under 14 CFR 21.17, GE must show that the GEnx series turbofan engine models meet the requirements of the applicable provisions of § 21.21 and part 33. The FAA has determined that the applicable airworthiness regulations in part 33 do not contain adequate or appropriate safety standards for the GEnx series turbofan engine models because of its novel and unusual fan blade design features. Therefore, these special conditions are prescribed under the provisions of 14 CFR 11.19 and § 21.16, and will become part of the type certification basis of the GEnx engine in accordance with 14 CFR 21.17(a)(2). As discussed above, these special conditions apply only to the GEnx series turbofan engine models. If the type certificate for those models is amended later to include any other models that incorporate the same novel or unusual design features, these special conditions would also apply to the other models under the provisions of 14 CFR 21.101(a)(1). Novel or Unusual Design Features The GEnx-1B54, -1B58, -1B64, -1B67, -70B, -1B70/72, -1B70/75, -72B and -75B engine models will incorporate the following novel or unusual design features: fan blades to be manufactured using carbon graphite composite material that incorporates metal leading and training edges. Applicability As discussed above, these special conditions apply only to the GEnx-1B54, -1B58, -1B64, -1B67, -70B, -1B70/72, -1B70/75, -72B and -75B turbofan engine models. If GE applies later for a change to the type certificate to include another model incorporating the same novel or unusual fan blade design features, these special conditions would apply to that model as well. Conclusion This action affects only the carbon fiber composite fan blade design features on the GEnx series turbofan engine models. It is not a rule of general applicability, and it affects only the General Electric Company which has applied to the FAA for certification of these fan blade design features. List of Subjects in 14 CFR Part 33 Air transportation, Aircraft, Aviation safety, Safety. The authority citation for these special conditions continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701-44702, 44704. The Proposed Special Conditions Accordingly, the Federal Aviation Administration
(FAA)proposes the following special conditions as part of the type certification basis for the GEnx series turbofan engines. 1. In lieu of the fan blade containment test with the fan blade failing at the outermost retention groove as specified in § 33.94(a)(1), complete the following requirements:
(a)Conduct an engine fan blade containment test with the fan blade failing at the inner annulus flow path line.
(b)Substantiate by test and analyses, or other methods acceptable to the Administrator, that a minimum material properties fan disk and fan blade retention system can withstand without failure a centrifugal load equal to two times the maximum load which the retention system could experience within approved engine operating limitations. The fan blade retention system includes the portion of the fan blade from the inner annulus flow path line inward to the blade dovetail, the blade retention components, and the fan disk and fan blade attachment features.
(c)Using a procedure approved by the Administrator, establish an operating limitation that specifies the maximum allowable number of start-stop stress cycles for the fan blade retention systems. The life evaluation shall include the combined effects of high cycle and low cycle fatigue. If the operating limitation is less than 100,000 cycles, that limitation must be specified in Chapter 5 of the Engine Manual Airworthiness Limitation Section.
(d)Substantiate that, during the service life of the engine, the total probability of the occurrence of a hazardous engine effect defined in § 33.75 due to an individual blade retention system failure resulting from all possible causes will be extremely improbable, with a cumulative calculated probability of failure of less than 10 −9 per engine flight hour.
(e)Substantiate by test or analysis that not only will the engine continue to meet the requirements of § 33.75 following a lightning strike on the composite fan blade structure, but that the lightning strike will also not cause damage to the fan blades that would prevent continued safe operation of the affected engine.
(f)Account for the effects of in-service deterioration, manufacturing variations, minimum material properties, and environmental effects during the tests and analyses required by paragraphs (a), (b), (c), (d), and
(e)of these special conditions.
(g)Propose fleet leader monitoring and field sampling programs for the GEnx engine fan blades that will monitor the effects of usage on fan blade and retention system integrity. The sampling program should use the experience gained on current GE90 engine model monitoring programs, and must be approved by the FAA prior to certification of the GEnx engine models. Issued in Burlington, Massachusetts on November 7, 2006. Francis A. Favara, Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. 06-9230 Filed 11-16-06; 8:45 am]
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  • 31 CFR 209
  • 5 CFR 550
  • Pub. L. 108-496
  • 3 CFR 1959
  • 5 CFR 890
  • 7 CFR 301
  • 7 CFR 301.45
  • 7 CFR 3015
  • 7 USC 7701-7772
  • 7 CFR 2.22
  • Pub. L. 106-113
  • Pub. L. 106-224
  • 114 Stat. 400
  • 7 CFR 301.93
  • 7 CFR 1
  • 7 CFR 372
  • 7 CFR 930
  • 7 USC 601-674
  • 7 CFR 900.700
  • 7 CFR 948
  • 7 CFR 993
  • 20 CFR 404
  • 20 CFR 416
  • Pub. L. 97-455
  • 96 Stat. 2500
  • Pub. L. 98-460
  • 98 Stat. 1802
  • Pub. L. 104-193
  • 98 Stat. 1794
  • Pub. L. 108-203
  • 118 Stat. 509
  • Pub. L. 93-66
  • 87 Stat. 154
  • 29 CFR 4007
  • Pub. L. 109-171
  • 29 CFR 4003
  • 32 CFR 199
  • Pub. L. 109-163
  • 44 USC 3501-3511
  • 33 CFR 117
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