Rules and Regulations. Final rule; request for comments

30,598 words·~139 min read·/register/2006/12/19/06-9761

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BILLING CODE 3410-XY-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-26502; Directorate Identifier 2006-NE-37-AD; Amendment 39-14859; AD 2006-26-01] RIN 2120-AA64 Airworthiness Directives; CFM International, S.A. CFM56 Series Turbofan Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: The FAA is adopting a new airworthiness directive

(AD)for certain CFM International CFM56 Series turbofan engines. This AD requires replacing certain fuel filters manufactured under parts manufacturer approvals (PMA). This AD results from 12 reports of failed fuel filters. We are issuing this AD to prevent the loss of engine thrust that could result in loss of control during takeoff or landing. DATES: This AD becomes effective January 3, 2007. We must receive any comments on this AD by February 20, 2007. ADDRESSES: Use one of the following addresses to comment on this AD: • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *Fax:*

(202)493-2251. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Samuel Lee, Aerospace Engineer, Los Angeles Aircraft Certification Office, FAA, Transport Airplane Directorate, 3960 Paramount Blvd., Lakewood, CA 90712-4137; telephone

(562)627-5262; fax

(562)627-5210. SUPPLEMENTARY INFORMATION: We have received reports of 12 PMA fuel filters, fuel filters part numbers WF337661 and WF337017, manufactured by Western Filter, and part numbers 7595983-101 and 7588133, manufactured by PTI Technologies, that have failed in service on CFM56-7B engines since March 2006. These filters use a deeper pleat and are more susceptible to collapse or deterioration of the filter media than the original equipment manufacturer filters. A collapsed or deteriorated fuel filter can allow unfiltered fuel contamination in fuel components, including fuel nozzles, with no indication of fuel filter bypass to the flight crew. This condition, if not corrected, could result in the loss of engine thrust that could result in loss of control during takeoff or landing. FAA's Determination and Requirements of This AD The unsafe condition described previously is likely to exist or develop on other CFM International CFM56 series engines of the same type design. For that reason, we are issuing this AD to prevent the potential loss of thrust that could result in loss of control during takeoff or landing. FAA's Determination of the Effective Date Since an unsafe condition exists that requires the immediate adoption of this AD, we have found that notice and opportunity for public comment before issuing this AD are impracticable, and that good cause exists for making this amendment effective in less than 30 days. Comments Invited This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to send us any written relevant data, views, or arguments regarding this AD. Send your comments to an address listed under ADDRESSES . Include “AD Docket No. FAA-2006-26502; Directorate Identifier 2006-NE-37-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify it. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this AD. Using the search function of the DMS Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78) or you may visit *http://dms.dot.gov.* Examining the AD Docket You may examine the docket that contains the AD, any comments received, and any final disposition in person at the Docket Management Facility Docket Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone

(800)647-5227) is located on the plaza level of the Department of Transportation Nassif Building at the street address stated in ADDRESSES . Comments will be available in the AD docket shortly after the DMS receives them. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary at the address listed under ADDRESSES . List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. Adoption of the Amendment Under the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new airworthiness directive: **2006-26-01 CFM International, S.A.:** Amendment 39-14859. Docket No. FAA-2006-26502; Directorate Identifier 2006-NE-37-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective January 3, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to CFM International CFM56-2 series, -3 series, -5 series, and -7B series engines with fuel filters, Western Filter part numbers (P/Ns) WF337661 and WF337017 and PTI Technologies P/Ns 7595983-101 and 7588133, installed. These engines are installed on, but not limited to, Airbus A320 and A340 series airplanes, Boeing DC8-71 series, -72 series, and -73 series airplanes, and Boeing 737 series airplanes. Unsafe Condition

(d)This AD results from 12 reports of failed fuel filters. We are issuing this AD to prevent the loss of engine thrust that could result in loss of control during takeoff or landing. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done. Replacing the Fuel Filters on CFM56-7B Engines

(f)For CFM56-7B engines, within 600 flight hours or 60 days after the effective date of this AD, whichever occurs first, replace fuel filter, Western Filter P/Ns WF337661 or WF337017 and PTI Technologies P/Ns 7595983-101 or 7588133, with a filter that has a P/N not listed in this AD. Replacing the Fuel Filters on CFM56-2, -3, and -5 Series Engines

(g)For CFM56-2 series, -3 series, and -5 series engines, at the next filter change or 4,000 flight hours, whichever occurs first, after the effective date of this AD, replace fuel filter, Western Filter P/Ns WF337661 or WF337017 and PTI Technologies P/Ns 7595983-101 or 7588133, with a filter that has a P/N not listed in this AD. Prohibition Against Installing Fuel Filters with Certain P/Ns

(h)After the effective date of this AD, do not install any fuel filter, Western Filter P/Ns WF337661 or WF337017 or PTI Technologies P/Ns 7595983-101 or 7588133. Alternative Methods of Compliance

(i)The Manager, Engine Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Related Information

(j)None. Material Incorporated by Reference

(k)None. Issued in Burlington, Massachusetts, on December 12, 2006. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E6-21485 Filed 12-18-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-26193; Directorate Identifier 2001-NE-01-AD; Amendment 39-14853; AD 2006-25-12] RIN 2120-AA64 Airworthiness Directives; Rolls-Royce Corporation 501-D Series Turboprop Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive

(AD)for Rolls-Royce Corporation

(RRC)501-D series turboprop engines. That AD requires removal from service of certain turbine rotor components at reduced life limits. This AD requires the same actions but adds two new life limits. This AD results from RRC reevaluating and revising component life limits for 501-D22 series turboprop engines. We are issuing this AD to prevent uncontained turbine rotor failure resulting in an in-flight engine shutdown and possible damage to the airplane. DATES: This AD becomes effective January 23, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of January 23, 2007. ADDRESSES: You can get the service information identified in this AD from Rolls-Royce Corporation, P.O. Box 420, 2001 South Tibbs Avenue, Indianapolis, IN 46206-0420; telephone

(317)230-2000; fax

(317)230-4020 for the service information identified in this AD. You may examine the AD docket on the Internet at *http://dms.dot.gov* or in Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Michael Downs, Aerospace Engineer, Chicago Aircraft Certification Office, FAA, 2300 East Devon Avenue, Des Plaines, IL 60018; telephone

(847)294-7870; fax

(847)294-7834. SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39 with a proposed AD. The proposed AD applies to RRC 501-D series turboprop engines. We published the proposed AD in the **Federal Register** on February 22, 2006 (71 FR 9048). That action proposed to require removal from service of certain turbine rotor components at reduced life limits, the same as AD 2003-07-02, but would add two new life limits. Examining the AD Docket You may examine the docket that contains the AD, any comments received, and any final disposition in person at the Docket Management Facility Docket Offices between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone

(800)647-5227) is located on the plaza level of the Department of Transportation Nassif Building at the street address stated in ADDRESSES . Comments will be available in the AD docket shortly after the DMS receives them. Comments We provided the public the opportunity to participate in the development of this AD. We received no comments on the proposal or on the determination of the cost to the public. Incorrect Supplemental Type Certificate

(STC)Number Since we issued the proposed AD, we became aware that the STC number SE1161EA, referenced in paragraph (c), is incorrect. We corrected the number to STC SA4-1100 in the AD. Conclusion We have carefully reviewed the available data and determined that air safety and the public interest require adopting the AD with the change described previously. Costs of Compliance We estimate that this AD will affect 684 engines installed on aircraft of U.S. registry. The action does not impose any additional labor costs if performed at the time of scheduled engine overhaul. Required parts will cost about $45,000 per engine. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $30,780,000. Special Flight Permits Paragraph Removed Paragraph

(f)of the current AD, AD 2003-07-02, contains a paragraph pertaining to special flight permits. Even though this AD does not contain a similar paragraph, we have made no changes with regard to the use of special flight permits to operate the airplane to a repair facility to do the work required by this AD. In July 2002, we published a new Part 39 that contains a general authority regarding special flight permits and airworthiness directives; see Docket No. FAA 2004-8460, Amendment 39-9474 (69 FR 47998, July 22, 2002). Thus, when we now supersede ADs we will not include a specific paragraph on special flight permits unless we want to limit the use of that general authority granted in section 39.23. Docket Number Change We are transferring the docket for this AD to the Docket Management System as part of our on-going docket management consolidation efforts. The new Docket No. is FAA-2006-26193. The old Docket No. became the Directorate Identifier, which is 2001-NE-01-AD. This AD might get logged into the DMS docket, ahead of the previously collected documents from the old docket file, as we are in the process of sending those items to the DMS. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:

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

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

(3)Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary at the address listed under ADDRESSES . List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by removing Amendment 39-13098 (68 FR 15937, April 2, 2003), and by adding a new airworthiness directive, Amendment 39-14853, to read as follows: **2006-25-12 Rolls-Royce Corporation (formerly Allison Engine Company):** Amendment 39-14853. Docket No. FAA-2006-26193; Directorate Identifier 2001-NE-01-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective January 23, 2007. Affected ADs

(b)This AD supersedes AD 2003-07-02, Amendment 39-13098. Applicability

(c)This AD applies to Rolls-Royce Corporation (formerly Allison Engine Company)

(RRC)501-D series turboprop engines. These engines are installed on, but not limited to, Lockheed 188 series and 382 series turboprop airplanes, Airbus 377SG5-F (Super Guppy) airplanes, and Convair Models 340 and 440 airplanes which have RRC 501-D series turboprop engines installed under Supplemental Type Certificate No. SA4-1100. These latter models are commonly referred to as Convair 580/580A or 5800 models.

(d)This AD results from RRC reevaluating and revising component life limits for 501-D22 series turboprop engines. We are issuing this AD to prevent uncontained turbine rotor failure resulting in an in-flight engine shutdown and possible damage to the airplane. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified unless the actions have already been done. 501-D13 Series Engines

(f)For 501-D13 series engines, remove turbine wheels and spacers from service as specified in the following Table 1: Table 1.—501-D13 Series Life Limits Part name Part No. Life limit for wheels that have complied with commercial overhaul information letter

(COIL)401, dated May 1978 Life limit for wheels that have not complied with COIL 401, dated May 1978

(1)Second-stage turbine wheel assembly 6847142 and 6876892 Remove from service before or upon accumulating 16,000 cycles-in-service

(CIS)Remove from service before or upon accumulating 12,000 CIS.

(2)Third-stage turbine wheel assembly 6845883 and 6849743 Remove from service before or upon accumulating 13,000 CIS Remove from service before or upon accumulating 10,000 CIS.

(3)Fourth-stage turbine wheel assembly 6876468 Remove from service before or upon accumulating 24,000 CIS Remove from service before or upon accumulating 18,000 CIS. 501-D22 Series Engines

(g)For 501-D22 series engines, remove turbine wheels and spacers from service as specified in the following Table 2: Table 2.—501-D22 Series Life Limits Part name Part No. Remove from service

(1)Third-stage turbine wheel assembly 6855083 Before or upon accumulating 10,000 cycles-in-service (CIS).

(2)1st-2nd-stage spacer assembly 6844632, 23033463, 23064854, and 23064858 Before or upon accumulating 4,700 CIS.

(3)1st-2nd-stage spacer assembly 23056966

(i)Before or upon accumulating 8,000 CIS.

(ii)If the 1st-2nd-stage spacer assembly passes the hardness criteria in RRC Commercial Engine Bulletin No. CEB-A-72-1135, Revision 2, dated July 11, 2003, then before or upon accumulating 10,000 CIS.

(4)2nd-3rd-stage spacer assembly 23033456 Before or upon accumulating 4,200 CIS.

(5)2nd-3rd-stage spacer assembly 23033464 and 6842683 Before or upon accumulating 5,200 CIS.

(6)3rd-4th-stage spacer assembly 6844794 prior to revision letter “R” Before or upon accumulating 5,100 CIS. Alternative Methods of Compliance

(h)The Manager, Chicago Aircraft Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Related Information

(i)Information on 501-D13 series engine turbine life limits can be found in RRC Commercial Service Letter

(CSL)No. CSL-120, Revision No. 52, dated July 22, 2002.

(j)Information on 501-D22 series engine turbine life limits can be found in RRC CSL No. CSL-1001, Revision No. 20, dated April 5, 2005. Material Incorporated by Reference

(k)You must use Rolls-Royce Corporation Commercial Engine Bulletin No. CEB-A-72-1135, Revision 2, dated July 11, 2003, to check if 1st-2nd stage spacer assemblies pass the hardness criteria required by Table 2 of this AD. The Director of the Federal Register approved the incorporation by reference of this service bulletin in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Rolls-Royce Corporation, P.O. Box 420, 2001 South Tibbs Avenue, Indianapolis, IN 46206-0420; telephone

(317)230-2000; fax

(317)230-4020 for a copy of this service information. You may review copies at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Burlington, Massachusetts, on December 11, 2006. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E6-21352 Filed 12-18-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-25762; Airspace Docket No. 06-AAL-25] Revision of Class E Airspace; Homer, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This action revises Class E airspace at Homer, AK to provide adequate controlled airspace to contain aircraft executing four new Standard Instrument Approach Procedures (SIAPs). This rule results in the revision of Class E airspace upward from the surface, from 700 feet (ft.), and from 1,200 ft. above the surface at Homer, AK. DATES: *Effective Date:* 0901 UTC, March 15, 2007. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Rolf, AAL-538G, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(1)Area Navigation (Global Positioning System) (RNAV (GPS)) Z Runway

(RWY)03, Original

(2)RNAV

(GPS)Z RWY 21, Original

(3)RNAV

(GPS)Y RWY 03, Original and

(4)RNAV

(GPS)Y RWY 21, Original. Class E controlled airspace extending upward from the surface, from 700 ft., and from 1,200 ft. above the surface in the Homer Airport area is revised by this action. The Notice of Proposed Rulemaking did not mention in the Proposal section the fact that some of the airspace affected by this action is from the surface. However, the proposed rule included the actual text entry. The actual change to the existing surface area is administrative in nature and has negligible effect, if any, on the actual airspace footprint. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed. The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The class E airspace areas designated as surface areas are published in paragraph 6002 of FAA Order 7400.9P, *Airspace Designations and Reporting Points,* dated September 1, 2006, and effective September 15, 2006, which is incorported by reference in 14 CFR 71.1. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9P, *Airspace Designations and Reporting Points,* dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order. The Rule This amendment to 14 CFR part 71 revises Class E airspace at the Homer Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing four new SIAPs, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at the Homer Airport, Homer, Alaska. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866;

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

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing instrument procedures for the Homer Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9P, *Airspace Designations and Reporting Points,* dated September 1, 2006, and effective September 15, 2006, is amended as follows: Paragraph 6002 Class E Airspace Designated As Surface Areas AAL AK E2 Homer, AK [Revised] Homer Airport, AK (Lat. 59°38″44′ N., long. 151°28″36′ W.) Kachemak NDB (Lat. 59°38″29′ N., long. 151°30″01′ W.) Within a 4.2-mile radius of the Homer Airport, AK, and within 1.9 miles either side of the 055° bearing from the Homer Airport, AK, to 7.2-miles northeast of the Homer Airport, AK, and within 2.4-miles north and 4.2-miles south of the Kachemak NDB 235° radial extending from the Kachemak NDB to 8.3-miles southwest of the Kachemak NDB. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Supplement Alaska (Airport/Facility Directory). Paragraph 6005 Class E Airspace Extending Upward From 700 Feet or More Above the Surface of the Earth AAL AK E5 Homer, AK [Revised] Homer Airport, AK (Lat. 59°38″44′ N., long. 151°28″36′ W.) Kachemak NDB (Lat. 59°38″29′ N., long. 151°30″01′ W.) That airspace extending upward from 700 feet above the surface within a 6.7-mile radius of the Homer Airport, AK, and within 4 miles either side of the 055° bearing from the Homer Airport, AK, to 12-miles northeast of the Homer Airport, AK, and within 8-miles north and 4.2-miles south of the Kachemak NDB 235° bearing extending from the Kachemak NDB to 16 miles southwest of the Kachemak NDB; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the Homer Airport, AK. Issued in Anchorage, AK, on December 8, 2006. Anthony M. Wylie, Manager, Alaska Flight Service Information Office. [FR Doc. E6-21534 Filed 12-18-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-25763; Airspace Docket No. 06-AAL-26] Revision of Class E Airspace; Kodiak, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This action revises Class E airspace at Kodiak, AK to provide adequate controlled airspace to contain aircraft executing Standard Instrument Approach Procedures (SIAPs). The FAA Instrument Flight Procedures Production and Maintenance Branch had noticed that a section of airspace north of Kodiak, AK, needed to be converted to controlled airspace. This rule addresses this issue and results in the revision of Class E airspace upward from 3,500 feet (ft.) above the surface at Kodiak, AK. DATES: *Effective Date:* 0901 UTC, March 15, 2007. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Rolf, AAL-538G, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(907)271-2850; e-mail: *gary.ctr.rolf@faa.gov.* Internet address: *http://www.alaska.faa.gov/at.* SUPPLEMENTARY INFORMATION: History On Thursday, October 5, 2006, the FAA proposed to amend part 71 of the Federal Aviation Regulations (14 CFR part 71) to revise Class E airspace upward from 3,500 ft. above the surface at Kodiak, AK (71 FR 58761). The action was proposed in order to create Class E airspace sufficient in size to contain aircraft while executing SIAPs for the Kodiak Airport. While conducting a review of Kodiak's instrument procedures, the FAA discovered that a small section (about 10 square miles) of uncontrolled airspace north of Kodiak, AK needed to be converted to controlled airspace. Class E controlled airspace extending upward from 3,500 ft. above the surface in the Kodiak Airport area is revised by this action. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed. The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9P, *Airspace Designations and Reporting Points,* dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order. The Rule This amendment to 14 CFR part 71 revises Class E airspace at the Kodiak Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing SIAPs, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at the Kodiak Airport, Kodiak, Alaska. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866;

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

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing instrument procedures for the Kodiak Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9P, *Airspace Designations and Reporting Points,* dated September 1, 2006, and effective September 15, 2006, is amended as follows: Paragraph 6005 Class E Airspace Extending Upward From 700 Feet or More Above the Surface of the Earth AAL AK E5 Kodiak, AK [Revised] Kodiak Airport, AK (Lat. 57°45′00″ N., long. 152°29′38″ W.) Kodiak VORTAC (Lat. 57°46′30″ N., long. 152°20′23″ W.) Kodiak Localizer (Lat. 57°45′08″ N., long. 152°31′15″ W.) That airspace extending upward from 700 feet above the surface within a 6.8-mile radius of the Kodiak Airport, AK, and within 5 miles south and 9 miles north of the 070° radial of the Kodiak VORTAC extending from the 6.8-mile radius to 17 miles northeast of the Kodiak VORTAC, and within 8 miles north and 4 miles south of the Kodiak Localizer front course extending from 6.8-mile radius to 20.3 miles east of the Kodiak Airport, AK, and within 14 miles of the Kodiak VORTAC extending from the 358° radial clockwise to the 107° radial; and that airspace extending upward from 1,200 feet above the surface within lat. 57°57′06″ N., long. 152°45′ 00″ W. to lat. 57°55′00″ N., long. 152°28′00″ W. to lat. 57°53′00″ N., long. 152°27′06″ W. to point of beginning and within 27 miles of the Kodiak VORTAC extending from the 023° radial clockwise to the 088° radial and within 8 miles north and 5 miles south of the Kodiak Localizer front course extending from the Kodiak Airport, AK, to 32 miles east of the Kodiak Airport; AK; and that airspace extending upward from 3,500 feet above the surface within 4 miles either side of the 012° radial of the Kodiak VORTAC to 40 miles north of the Kodiak VORTAC. Issued in Anchorage, AK, on December 8, 2006. Anthony M. Wylie, Manager, Alaska Flight Service Information Office. [FR Doc. E6-21535 Filed 12-18-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-25825; Airspace Docket No. 06-AAL-27] Revision of Class E Airspace; St. Michael, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This action revises Class E airspace at St. Michael, AK to provide adequate controlled airspace to contain aircraft executing one amended Standard Instrument Approach Procedure (SIAP). This rule results in the revision of Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at St. Michael, AK. DATES: *Effective Date:* 0901 UTC, March 15, 2007. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Rolf, AAL-538G, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(RWY)20, Amendment 1. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the St. Michael Airport area is revised by this action. Some of the necessary controlled airspace lies over an area more than 12 miles offshore, and is designated as Offshore Airspace Area, Norton Sound Low. That Offshore Airspace action will be addressed in a separate pending rulemaking case. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed. The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9P, *Airspace Designations and Reporting Points* , dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order. The Rule This amendment to 14 CFR part 71 revises Class E airspace at the St. Michael Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing an amended SIAP, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at the St. Michael Airport, St. Michael, Alaska. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866;

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

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing instrument procedures for the St. Michael Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9P, Airspace Designations and Reporting Points, dated September 1, 2006, and effective September 15, 2006, is amended as follows: Paragraph 6005 Class E Airspace Extending Upward From 700 Feet or More Above the Surface of the Earth AAL AK E5 St. Michael, AK [Revised] St. Michael Airport, AK (Lat. 63°29′24″ N., long. 162°06′37″ W.) That airspace extending upward from 700 feet above the surface within an 8.4-mile radius of the St. Michael Airport; and that airspace extending upward from 1,200 feet above the surface within a 73-mile radius of the St. Michael Airport. Issued in Anchorage, AK, on December 8, 2006. Anthony M. Wylie, Manager, Alaska Flight Service Information Office. [FR Doc. E6-21537 Filed 12-18-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-25826; Airspace Docket No. 06-AAL-28] Revision of Class E Airspace; Tok Junction, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This action revises Class E airspace at Tok Junction, AK to provide adequate controlled airspace to contain aircraft executing a new Standard Instrument Approach Procedure (SIAP). This rule results in the revision of Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at Tok Junction, AK. DATES: *Effective Date:* 0901 UTC, March 15, 2007. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Rolf, AAL-538G, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(907)271-2850; e-mail: *gary.ctr.rolf@faa.gov* . Internet address: *http://www.alaska.faa.gov/at* . SUPPLEMENTARY INFORMATION: History On Thursday, October 5, 2006, the FAA proposed to amend part 71 of the Federal Aviation Regulations (14 CFR part 71) to revise Class E airspace upward from 700 ft. and 1,200 ft. above the surface at Tok Junction, AK (71 FR 58760). The action was proposed in order to create Class E airspace sufficient in size to contain aircraft while executing a new SIAP for the Tok Junction Airport. The new approach is the Area Navigation (Global Positioning System) (RNAV (GPS)) A, Original. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Tok Junction Airport area is revised by this action. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed. The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9P, *Airspace Designations and Reporting Points,* dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order. The Rule This amendment to 14 CFR part 71 revises Class E airspace at the Tok Junction Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing a new SIAP, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at the Tok Junction Airport, Tok, Alaska. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866;

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

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing instrument procedures for the Tok Junction Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9P, *Airspace Designations and Reporting Points* , dated September 1, 2006, and effective September 15, 2006, is amended as follows: Paragraph 6005 Class E Airspace Extending Upward From 700 Feet or More Above the Surface of the Earth AAL AK E5 Tok Junction, AK [Revised] Tok Junction Airport, AK (Lat. 63°19′46″ N., long. 142°57′13″ W.) That airspace extending upward from 700 feet above the surface within a 6.9-mile radius of the Tok Junction Airport, AK; and that airspace extending upward from 1,200 feet above the surface within a 64.8-mile radius of the Tok Junction Airport, AK; excluding that airspace east of 141°00′00″ W longitude. Issued in Anchorage, AK, on December 8, 2006. Anthony M. Wylie, Manager, Alaska Flight Service Information Office. [FR Doc. E6-21516 Filed 12-18-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-24675; Airspace Docket No. 06-AAL-14] Revision of Class E Airspace; Hooper Bay, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final Rule. SUMMARY: This action revises Class E airspace at Hooper Bay, AK to provide adequate controlled airspace to contain aircraft executing two new Standard Instrument Approach Procedures (SIAPs). This rule results in the revision of Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at Hooper Bay, AK. DATES: *Effective Date:* 0901 UTC, March 15, 2007. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Rolf, AAL-538G, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(1)Area Navigation (Global Positioning System) (RNAV (GPS)) Runway

(RWY)05, Original and

(2)RNAV

(GPS)RWY 23, Original. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Hooper Bay Airport area is revised by this action. Some of the necessary controlled airspace lies over an area more than 12 miles offshore, and is designated as Offshore Airspace Area, Norton Sound Low. That Offshore Airspace action will be addressed in a separate pending rulemaking case. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed. The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9P, *Airspace Designations and Reporting Points,* dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order. The Rule This amendment to 14 CFR part 71 revises Class E airspace at the Hooper Bay Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing two new SIAPs, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at the Hooper Bay Airport, Hooper Bay, Alaska. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866;

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

(SIAP)and a new Stardard Instrument Departure procedure (SID). This rule results in the revision of Class E airspace upward from 700 feet (ft.) and 1,200 ft. above the surface at Perryville, AK. DATES: *Effective Date:* 0901 UTC, March 15, 2007. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Gary Rolf, AAL-538G, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(RWY)02, Original. The SID is the CILAC TWO departure. Class E controlled airspace extending upward from 700 ft. and 1,200 ft. above the surface in the Perryville Airport area is revised by this action. There is an issue with charting domestic controlled airspace near Perryville, Alaska. Any airspace to the West of 160° West Longitude must be defined in the Offshore Airspace Area named Control 1234L, even if the airspace is within 12 miles of the shoreline. The Notice of Proposed Rulemaking mentioned this issue, but did not explain that this is a charting issue and does not impact controlled airspace. Any of the controlled airspace necessary for service at Perryville Airport which lies to the west of 160° W. Longitude must be described in the Offshore definition for Control 1234L. Domestic airspace east of 160° W. Longitude extends to 12 miles from the shoreline. The airspace definition delineation between Offshore and domestic controlled airspace is not necessary because the 12-mile limit line is shown on aeronautical charts. To address the delineation in the controlled airspace description would be redundant. The Offshore Airspace action associated with this rule is taking place concurrently in a separate airspace rule. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed. The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1,200 ft. transition areas are published in paragraph 6005 of FAA Order 7400.9P, *Airspace Designations and Reporting Points* , dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order. The Rule This amendment to 14 CFR part 71 revises Class E airspace at the Perryville Airport, Alaska. This Class E airspace is revised to accommodate aircraft executing one new SIAP and one new SID, and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at the Perryville Airport, Perryville, Alaska. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866;

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

(NOAA)published a document (Final Rule) in the **Federal Register** on January 5, 2006, effective on February 6, 2006, revising the federal consistency regulations under the Coastal Zone Management Act of 1972 (CZMA). That document referenced an incorrect cross-reference in § 930.125(b) and unnecessarily required the submission of multiple copies of some documents in §§ 930.127(d)(1) and 930.127(i)(2). This document amends the final regulations by revising these sections. DATES: Effective December 19, 2006. FOR FURTHER INFORMATION CONTACT: David W. Kaiser, Senior Policy Analyst, Office of Ocean and Coastal Resource Management/NOAA, Phone: 603-862-2719, Fax: 603-862-3957. ADDRESSES: Office of Ocean and Coastal Resource Management/NOAA, c/o Coastal Response Research Center, University of New Hampshire, 35 Colovos Road, 246 Gregg Hall, Durham, NH 03824-3534. *Headquarter and Official Mailing/Filing Address:* Coastal Programs Division, Office of Ocean and Coastal Resource Management/NOAA, 1305 East-West Hwy., 11th Floor (N/ORM3), Silver Spring, MD 20910, Fax: 301-713-4367. Additional information on federal consistency can be located at OCRM's federal consistency web page: *http://coastalmanagement.noaa.gov/consistency/welcome.html.* SUPPLEMENTARY INFORMATION: Background The CZMA was enacted in 1972 to encourage States to be proactive in managing natural resources for their benefit and the benefit of the Nation. The CZMA recognizes a national interest in the resources of the coastal zone and in the importance of balancing the competing uses of those resources. The CZMA is a voluntary program for States. If a State elects to participate it must develop and implement a CMP pursuant to federal requirements. *See* CZMA section 306(d); 15 CFR part 923. State CMPs are comprehensive management plans that describe the uses subject to the management program, the authorities and enforceable policies of the management program, the boundaries of the State's coastal zone, the organization of the management program, and related State coastal management concerns. The State CMPs are developed with the participation of Federal agencies, industry, other interested groups and the public. Thirty-five coastal States are eligible to participate in the federal coastal management program. Thirty-four of the eligible States have federally approved CMPs. Illinois is not currently in program development. The CZMA federal consistency provision is a cornerstone of the CZMA program and a primary incentive for States' participation. Federal agency activities that have coastal effects must be consistent to the maximum extent practicable with the federally approved enforceable policies of the State's CMP. In addition, non-federal applicants for federal authorizations and funding must be fully consistent with the enforceable policies of State CMPs. States either concur with or object to a federal agency's consistency determination, under 15 CFR part 930, subpart C, or an applicant's consistency certification, under 15 CFR part 930, subparts D, E or F. For non-federal applicants for federal authorizations under 15 CFR part 930, subparts D, E or F, the applicant may appeal a State's CZMA objection to the Secretary of Commerce pursuant to CZMA sections 307(c)(3) and (d). The Secretary overrides the State's objection if the Secretary finds that the activity is consistent with the objectives or purposes of the CZMA or is necessary in the interest of national security. If the Secretary overrides the State(s objection, then the Federal agency may issue its authorization. NOAA's Federal consistency regulations were first promulgated in 1979. On January 5, 2006, NOAA published a final rule amending the Agency's regulations implementing the CZMA, including procedural requirements governing the processing of consistency appeals filed under section 307 of the CZMA. These changes sought to effectuate necessary changes identified since the regulations were last amended in 2000, and respond to amendments to the CZMA enacted by Congress in the Energy Policy Act of 2005 (Pub. L. 109-58; 119 Stat. 594 (2005)) (Energy Policy Act). Explanation of Changes to the Federal Consistency Regulations *Rule Change 1:* § 930.125(b). The January 2006 amendments in part added new requirements concerning the content of a notice of appeal filed with the Secretary of Commerce. Section 930.125(b) now requires that a notice of appeal include a statement explaining the bases for appealing the State agency's objection. As noted in the Final Rule, this new requirement was promulgated to help the Secretary decide appeals within new time constraints established under the Energy Policy Act, by requiring that appellants clarify from the outset each separate basis for appeal. *See* 71 FR 788, 799 (Jan. 5, 2006). If identified in the notice of appeal, these bases can be argued in greater detail within an appellant's subsequent brief. Section 930.125(b) includes an inadvertent error that necessitates technical correction. This section requires a statement explaining the bases for appeal under “§ 923.121,” a cross reference that has no relevance to consistency appeals. The correct cross reference is §§ 930.121 and 122. Sections 930.121 and 122 are the two grounds available on which to base an appeal. With this technical correction, § 930.125(b) requires the notice of appeal to:

(1)Explain why the project is consistent with the objectives or purposes of the CZMA (§ 930.121), and/or is otherwise necessary in the interest of national security (§ 930.122), outlining appellant's arguments for each element contained within §§ 930.121 and/or 930.122 (with the understanding that appellant will amplify upon these arguments in briefs); and

(2)identify any procedural arguments pursuant to § 930.129(b). *Rule Change 2:* § 930.127(d)(1) and § 930.127(i)(2). Both of these sections require the appellant to submit four copies of briefs, supporting materials and, in the case of appeals of energy projects under § 930.127(i)(2), the consolidated record maintained by the lead Federal permitting agency. NOAA has determined that one hard copy and one electronic copy are sufficient to process appeals to the Secretary. This technical change will also reduce paperwork burdens on appellants. Miscellaneous Rulemaking Requirements Executive Order 12372: Intergovernmental Review This program is subject to Executive Order 12372. Executive Order 12866: Regulatory Planning and Review This final rule has been determined to be not significant for the purposes of Executive Order 12866. Executive Order 13211 Executive Order 13211 requires that agencies prepare and submit a “Statement of Energy Effects” to the Office of Management and Budget for certain actions. This action will not result in any adverse effect upon the supply, distribution, or use of energy. Rather, this rule makes technical corrections and changes that will clarify existing requirements and will reduce paperwork burdens on appellants. Administrative Procedure Act Pursuant to 5 U.S.C. 553(b)(B), the Assistant Administrator for Ocean Services, NOAA finds good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment are unnecessary. This Final Rule makes only minor technical amendments that will correct mistakes and provide clarification to the public. The first change will correct an internal cross-reference in order to provide correct information regarding the processing of appeals. The second change will reduce unnecessary paperwork submissions by states and appellants. Neither change affects the substance of the Secretarial appeal process. For this same reason, NOAA finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). Regulatory Flexibility Act Because prior notice and opportunity for public comment are not required for this rule by 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 *et seq.* , are not applicable. Paperwork Reduction Act This rule contains no additional collection-of-information requirements subject to review and approval by OMB under the Paperwork Reduction Act (PRA). National Environmental Policy Act NOAA has concluded that this regulatory action does not have the potential to pose significant impacts on the quality of the human environment. Further, NOAA has concluded that this rule will not result in any changes to the human environment. As defined in sections 5.05 and 6.03c3(i) of NAO 216-6, this action is of limited scope, of a technical and procedural nature and any environmental effects are too speculative or conjectural to lend themselves to meaningful analysis. Thus, this rule is categorically excluded from further review pursuant to NEPA. List of Subjects in 15 CFR Part 930 Administrative practice and procedure, Coastal zone, Reporting and recordkeeping requirements. Accordingly, 15 CFR part 930 is amended by making the following technical corrections: PART 930—FEDERAL CONSISTENCY WITH APPROVED COASTAL MANAGEMENT PROGRAMS 1. The authority citation continues to read as follows: Authority: 16 U.S.C. 1451 *et seq.* § 930.125 [Corrected] 2. Section 930.125 is corrected in the first sentence of paragraph

(b)by removing the term “§ 923.121” and adding in its place the phrase “§§ 930.121 and/or 930.122.” § 930.127 [Corrected] 3. Section 930.127 is corrected in the first sentence of paragraph (d)(1) and in the first sentence of paragraph (i)(2) by removing the word “four” and adding in its place the word “two.” Dated: December 14, 2006. William Corso, Deputy Assistant Administrator for Ocean Services and Coastal Zone Management. [FR Doc. E6-21615 Filed 12-18-06; 8:45 am] BILLING CODE 3510-08-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 800 [Docket No. 2003N-0056 (formerly 03N-0056)] Medical Devices; Patient Examination and Surgeons' Gloves; Test Procedures and Acceptance Criteria AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration

(FDA)is issuing a final rule to improve the barrier quality of medical gloves marketed in the United States. The rule will accomplish this by reducing the current acceptable quality levels

(AQLs)for leaks and visual defects observed during FDA testing of medical gloves. By reducing the AQLs for medical gloves, FDA will also harmonize its AQLs with consensus standards developed by the International Organization for Standardization

(ISO)and ASTM International (ASTM). DATES: This rule is effective December 19, 2008. FOR FURTHER INFORMATION CONTACT: Casper E. Uldriks, Office of Compliance, Center for Devices and Radiological Health (HFZ-300), Food and Drug Administration, 2094 Gaither Rd., Rockville, MD 20850, 240-276-0100. SUPPLEMENTARY INFORMATION: I. Background Since 1990, FDA has tested patient examination and surgeons' gloves for barrier integrity in accordance with the sampling plans, test method, and AQLs contained in § 800.20 (21 CFR 800.20). The FDA test method was adopted by the consensus standards organizations, ISO and ASTM, who incorporated this method in ISO 10282, ISO 11193, ASTM D3577, and ASTM D 3578. Subsequently, ISO and ASTM lowered the AQLs in their consensus standards to be more stringent than the criteria in the FDA test method. In the **Federal Register** dated March 31, 2003 (68 FR 15404), FDA published a proposed rule to amend the FDA test method and harmonize the acceptance criteria with those in the consensus standards. We provided a period of 90 days for comments from interested parties. We received comments from several parties, which we summarize and discuss below, and we have revised the final rule in response to the comments as appropriate. (Comment 1) FDA received several comments expressing concern that the proposal to lower the AQLs in the FDA rule to match those in the ASTM standard does not truly harmonize with ASTM because ASTM applies the AQLs only to pinhole defects, whereas FDA applies the AQLs to both pinhole and visual defects. Historically, FDA has always considered visual defects that affect barrier integrity as failures during glove testing. The visual analysis of gloves while conducting water leak testing was specifically included in the original FDA test method published in December 1990 and codified at § 800.20. Our experience with laboratory analyses of medical gloves indicates that visual defects are relatively rare. However, due to public health concerns, FDA cannot ignore visual defects when they are observed. FDA will continue to consider visual defects affecting barrier integrity as failures. FDA does not agree that including these defects in the analysis will affect harmonization with currently recognized consensus standards for the vast majority of samples. FDA has, however, included language in the rule clarifying that only visual defects that are likely to affect the barrier integrity should be counted as failures and has described the main types of visual defects that are likely to affect barrier integrity. FDA understands the concerns of manufacturers that the lower AQLs could result in more sample failures, especially if FDA analysts count visual defects that do not affect barrier integrity. Therefore, FDA intends to provide guidance to analysts on how to identify visual defects that affect barrier integrity. (Comment 2) One comment disagreed with the FDA statement “Because the standards organization updated their standards to reflect the improvement in manufacturing technology, the consensus standards currently have lower AQLs for medical gloves than FDA's regulations” on the grounds that the consensus standards' AQLs do not count visual defects. The commenter proposed that FDA reword this statement. Until now, the AQLs in the consensus standards have been tighter than those in the FDA test method, even when visual defects are considered. As noted previously, visual defects are rarely observed. Even when they are found, they may not increase the total number of failures in an analysis because the tears and holes detected by means of a visual examination would most likely leak if subjected to water leak testing and count as failures. Other visually defective gloves, such as adhering gloves, which often tear when pulled apart, might also leak if subjected to water leak testing. (Comment 3) FDA received a number of comments expressing concern that the phrase “other defects visible upon initial examination that may affect the barrier integrity” is subject to interpretation. Some comments recommended a list of specific criteria for identifying visually defective gloves. Other comments suggested adding the word “obvious” before “defects.” FDA understands these concerns and has revised the rule to include more examples of specific visual defects that should be considered as failures. However, FDA realizes that it cannot predict all possible defects that may be encountered. Therefore, the phrase immediately following the list of specifically identified visual defects has been revised to read, “or other visual defects that are likely to affect the barrier integrity.” FDA disagrees that adding “obvious” before “defects” would clarify the type of defects that should be counted or reduce the risk of subjective interpretation. (Comment 4) FDA received several comments requesting us to revise the test procedure and acceptance criteria to have two sets of samples per lot, one set for testing for pinhole defects and the second set for testing or determining visual defects. The comments suggested that visual defects should have less stringent AQLs than pinhole defects. Also, one comment stated that the test certificates glove manufacturers routinely issue generally categorize pinholes and visual defects separately. FDA disagrees with these comments. FDA is aware that glove manufacturers routinely inspect their gloves for visual cosmetic defects that may affect the acceptability of the gloves to buyers. Since these defects are related to the cosmetic appearance of gloves rather than safety, they are visually inspected at a lower AQL than pinhole defects. In contrast, FDA analysis of medical gloves is intended to ensure that gloves are safe and effective for their intended use, barrier protection. The FDA test method includes only those visual defects, such as tears, embedded foreign objects, etc., that are likely to affect the barrier integrity of the glove. As previously stated, FDA has historically considered visual defects that affect the barrier integrity as failures during glove testing and has always included them in the total count of defective gloves. Sampling and counting visual defects that affect barrier integrity separately from gloves that leak during the water leak test would change established FDA sampling procedures and could allow more total defects in glove lots than were allowed under the previous AQLs. This would not be consistent with the purpose of this rulemaking to improve the quality of gloves on the U.S. market. Also, because visual defects that affect barrier integrity are much less common than cosmetic visual defects, they would probably not be present in the majority of samples. Routinely taking two sets of samples when one sample is expected to have no defects would be an inefficient use of resources for the FDA. The increased time required for two analyses could also result in delaying entry of imported products. (Comment 5) Three comments noted that the ASTM standards for patient examination and surgeons' gloves specify the use of single normal sampling plans rather than the multiple normal sampling plans used by FDA. FDA understands that ASTM uses single normal sampling. However, the same ISO document that ASTM references for its single sampling plans (ISO 2859, “Sampling Procedures for Inspection by Attributes”) also provides multiple sampling plans that establish the acceptability or non-acceptability of the lot with equivalent statistical confidence, but generally using a much smaller total sample size. In view of the volume of gloves that FDA must test each year, we cannot justify the additional expense that would accompany the use of the single sampling plans. Since the sampling plans are statistically very similar, we consider the revised test method and acceptance criteria to be harmonized with the ASTM standard. (Comment 6) Another comment stated that it was unlikely that manufacturers could supply medical gloves that meet the new AQLs without any price increase. The comment further stated that tightening the AQLs would cause manufacturers to test to even tighter in-house specifications, which could lead to significant “downgrading” of some lots of gloves. It is FDA's understanding, based on representations made in 510(k) submissions and interactions with glove manufacturers, that the glove industry is already manufacturing gloves that meet the 1.5 and 2.5 AQLs for surgeons' and patient examination gloves, respectively. FDA recognizes that some manufacturers may decide to withhold from the market or “downgrade” some glove lots in order to reduce the risk of failing the FDA test. However, our analysis, described in section III.E of this document, indicates that the actual number of lots that would have to be withheld in order to maintain the current failure risk level is a small percentage of the total number of gloves manufactured and, consequently, will have a minimal impact on the industry. (Comment 7) We received several comments that pointed out that an AQL value should not reference a percentage because it is technically a number without a unit. The comments suggested that we remove the reference to percent. FDA agrees with this comment. The AQL values in the final rule do not refer to percent. (Comment 8) One comment requested that the effective date of this rule be delayed until the year 2010. FDA disagrees with this comment. ASTM lowered its AQLs for surgeons' and patient examination gloves in 1998. FDA believes that manufacturers have had sufficient time to adapt their manufacturing process to conform to these standards and that, in fact, the vast majority of currently manufactured gloves already meet the new AQLs. (Comment 9) One comment suggested the use of normal sampling plans in ISO 2859 for reconditioned lots instead of the tightened sampling plans proposed by FDA. This comment maintained that the normal inspection plans were the optimal plans for glove lots and that these same sampling plans should also be used for reconditioned lots for both technical and economic reasons. FDA disagrees with this comment. When testing reconditioned lots, FDA needs greater assurance that the gloves are safe and effective because there has already been an initial failure and an appearance of adulteration. It is important, therefore, that the tightened sampling plans be used to test reconditioned lots. (Comment 10) One comment advised that the sampling plan for Surgeons' Gloves at 1.5 AQL Normal Sampling and a lot size of 1,201 to 3,200 does not provide for lot acceptance for the first 32 gloves sampled. FDA agrees and has revised the chart. (Comment 11) One comment asked why the tables for both the Surgeons' and Patients Examination Gloves were changed from the original rule to list increasing quantities of gloves from top to bottom rather than from bottom to top. This change was made to harmonize with the tables in the ISO-2859 sampling plans. (Comment 12) One comment noted that the leak test materials and set up described in § 800.20 are an example of what might be used in small scale testing environments, but that the use of these materials and set up in high volume test environments is not realistic. Another comment pointed out that many manufacturers use opaque cylinders rather than clear plastic cylinders, as described in paragraph § 800.20(b)(2)(i). A suggestion was made to note that the materials and set up described in § 800.20(b)(2) and (b)(3)(ii) are only examples. FDA agrees that the materials and set up described in the referenced section are only examples and may not be realistic for high volume test settings and, therefore, has changed the wording in § 800.20(b)(2) *Leak test materials* , to “FDA considers the following to be the minimal materials required for this test.” FDA will continue to use clear cylinders to remain harmonized with the ASTM consensus standard D5151 for detection of holes in medical gloves. (Comment 13) One comment recommended that FDA define the elongation and tensile strength required for medical grade gloves. This comment is beyond the scope of this rule. This rule describes a barrier test method applicable to gloves of all materials and not a physical properties test method that will necessarily vary for differing materials. (Comment 14) A suggestion was made to increase the water leak test duration to 3 minutes from the current 2 minutes because there are some gloves that begin to leak shortly after the 2 minute mark, usually at 2 minutes and 30 seconds. Changes to this rule are intended to harmonize with the current consensus standards. Harmonization would not be accomplished if FDA were to increase its water leak test duration to 3 minutes. Moreover, there are no reliable data justifying the increase. (Comment 15) One comment suggested that § 800.20(b)(2)(iv) should be moved to the preamble because it is a guidance. It is important that FDA's test method for analyzing gloves be presented in a coherent manner that thoroughly describes the method in a way that is understandable. FDA believes that deleting § 800.20(b)(2)(iv) from the codified language would make the test method more difficult to understand and, therefore, disagrees that it should be moved to the preamble. (Comment 16) A suggestion was made to move “Record the number of defective gloves” from (b)(3)(iii)(B) to a new paragraph (b)(3)(iii)(C). The rationale for this suggestion was that the data are generated in both (b)(3)(iii)(A) and (b)(3)(iii)(B), and not in just (b)(3)(iii)(B). Therefore, it appeared that the recording requirement should be in a separate paragraph. FDA agrees and has removed “Record the number of defective gloves” from section (b)(3) (iii)(B) and added a new section “(b)(3)(iii)(C), Record the number of defective gloves.” (Comment 17) Another comment stated that the preamble should discuss the relationship between Import Alert 80-04 and § 800.20. This rule describes FDA's analytical test method for determining whether individual gloves are defective and acceptance criteria for determining whether lots of medical gloves are adulterated. It applies equally to medical gloves offered for import and medical gloves already in domestic distribution. While the results of analysis could cause a firm to be placed on Import Alert 80-04, this rule is not intended to describe or modify FDA's current guidance to FDA field personnel regarding “Surveillance and Detention Without Physical Examination of Surgeon's and or Patient Examination Gloves,” which is contained in Import Alert 80-04. (Comment 18) One comment suggested that we add the following or equivalent language to (d)(2)(ii) “ *Adulteration levels and acceptance criteria for reconditioned gloves* ”: “FDA considers the reconditioned lot of medical gloves tested by an independent laboratory under tightened sampling to meet the AQLs which will provide additional assurance to the consumers. If the retest result has been determined to be acceptable, the initial analysis of the failed lot before reconditioning shall be nullified.” FDA disagrees with this comment. When a collection of gloves that has been seized or refused entry based on a violative sample is “reconditioned,” some of the problematic sizes or lots of the gloves may have been removed (segregated) from the reconditioned sample. When this occurs, and the reconditioned sample passes the test under the tightened sampling plan, FDA will consider the remaining/reconditioned lots in the collection of gloves to be acceptable, as described in § 800.20. However, FDA believes that, in the situation described previously, FDA cannot ignore the initial failure which is part of the firm's historical record. (Comment 19) Several comments mentioned that the rule would result in increased costs to consumers of gloves. These comments asserted that manufacturing and production changes at manufacturing sites would entail significant costs that would ultimately be passed on to consumers in the form of price increases. FDA disagrees with these comments. As stated in section III of this document, most lots of imported gloves already meet the lower AQLs. This implies that significant changes in the manufacturing processes will not be necessary. In addition, there is no universal economic presumption that costs are passed on to consumers in order to maintain a constant profit margin to manufacturers. Market conditions will dictate the specific degree to which regulatory costs are borne by various economic sectors, i.e., manufacturers, distributors, purchasers, payers, or consumers. Because of the competitive nature of this industry and the relatively small proportion of gloves affected by this rule, FDA believes that these costs are not likely to be directly passed on in the form of price increases. II. Environmental Impact The agency has determined under 21 CFR 25.30(i) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required. III. Analysis of Impacts A. Introduction FDA has examined the final rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-602), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). FDA has determined that this final rule is not a significant regulatory action under the Executive order. If a rule has a significant economic impact on a substantial number of small entities, the Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize the impact of the rule on small entities. Because this final rule will not result in economic impacts on domestic small entities, the agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Section 202(a) of the Unfunded Mandates Reform Act requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before issuing a final rule that includes any Federal mandate that may result in the expenditure of State, local and tribal governments, in the aggregate, or the private sector of $100 million or more (adjusted annually for inflation) in any one year. The current threshold after adjustment for inflation is $118 million, using the most current

(2004)implicit price deflator for the Gross National Product. The agency does not expect this final rule to result in a 1-year expenditure that would meet or exceed this amount. The information in the following sections sets forth the bases for the above conclusions. We show the expected annual costs and benefits of this final rule next in Table 1. The average annualized costs of the final rule are estimated to be $6.6 million using either a 3 percent or 7 percent discount rate. Average annualized benefits are expected to be between $14.8 million and $15.1 million, depending on the discount rate. Average annualized net benefits are between $8.2 million and $8.5 million. **Table 1.—Average Annualized Costs and Benefits (in millions)** 1 Annual Discount Rate Costs Benefits Net Benefits 3 Percent $6.6 $14.8 $8.2 7 Percent $6.6 $15.1 $8.5 1 Annualized over a 10-year evaluation period. B. Objective of the Final Rule The objective of the final rule is to reduce the risk of transmission of blood-borne pathogens (particularly human immunodeficiency virus (HIV), hepatitis B (HBV), and hepatitis C

(HCV)infections). The rule accomplishes this objective by ensuring that medical gloves (surgeons' and patient examination gloves) maintain a high level of quality with respect to the level of noted defects. FDA is also harmonizing its level for acceptable defects with consensus quality standards developed by ISO and ASTM. C. Current Risks of Blood-Borne Illness Unnecessary exposures to blood-borne pathogens are of great importance to the health care community because contact with contaminated human blood or tissue products has led to increased cases of HIV, HBV, and HCV infections. Available data cannot precisely quantify the number of new HIV cases that this final rule will prevent. This analysis, however, attempts to derive a conservative estimate. For the year 2000, the Centers for Disease Control

(CDC)reported a cumulative total of approximately 900,000 persons in the United States who had contracted HIV, of which 775,000 cases had progressed to Acquired Immunodeficiency Syndrome

(AIDS)(Ref. 1). Of those patients whose conditions had progressed to AIDS, almost 450,000 (58 percent) had died as of December 2000. For the year 2000, the CDC identified 21,704 new cases of HIV infection. Approximately 5 percent of the reported HIV/AIDS cases were among health care personnel (Ref. 2). However, in an indepth analysis of occupational risk, the CDC reported that between 1992 and 2002 there had been 56 identified incidents of occupational transmission of the HIV pathogen and all but 7 of these cases (12.5 percent) were due to percutaneous cuts or needlesticks. In addition, there were 138 other cases of HIV infection or AIDS among health care workers with occupational exposures to blood who had not reported other risk factors for HIV infection (Ref. 2). Assuming the same 12.5 percent rate for these workers implies that 17 additional cases of HIV transmission to health care workers during this period might have been caused by cutaneous contact in an occupational setting. Consequently, a total of 24 incidents of occupational transmission of HIV to health care personnel may have occurred over the 10-year period (or 2.4 per year) due to problems with the barrier protection properties of gloves used in health care settings. The CDC also reports approximately 80,000 new cases of HBV for the latest available reporting period

(1999)(Ref. 3). There are approximately 1.25 million people in the United States chronically infected with HBV. While only 6 percent of those who contract hepatitis B after the age of 5 will develop chronic conditions, 15 to 25 percent of those that do will die prematurely. Health care personnel are at some risk from this pathogen, but the availability of a vaccine has reduced the risk of negative outcomes due to exposure. FDA has no direct data for estimating the rate of new HBV infections in health care personnel. While the CDC has reported the risk to health care workers as “low,” there is no definition of that term (Refs. 3 and 4). FDA estimates that as many as 4,000, or 5 percent, of all new incidents of HBV occur in health care personnel. Because occupational transmissions for HBV may be approximately 5 times more likely than that for HIV, FDA imputes approximately 140 annual cases of occupational transmission of HBV to health care personnel (HIV rate of 7.3/1,085 x 5 x 4,000.) CDC analyses have stated that “most” of the occupational transmissions are due to percutaneous injuries (Ref. 4). Because 2.4 of the 7.3 annual HIV cutaneous contact transmissions (33 percent) were believed to be attributable to glove defects, FDA similarly expects about one-third of the 140 annual occupational transmissions of HBV infections (approximately 40 cases) may potentially be associated with the current quality level of medical gloves. If only 6 percent of these cases develop chronic conditions, then an average of 2.4 annual cases of chronic HBV are associated with defective medical gloves. HCV currently infects 3.9 million persons in the United States (Ref. 3). Over 2.7 million patients have reported chronic conditions. More than 40,000 new cases were reported in 1999. The risk of exposure to health care workers, however, appears to be extremely low. In fact, according to the CDC, other than from needle stick punctures, there has been no documented transmission of HCV to health care personnel from intact or non-intact skin exposures to blood or other fluids or tissues (Ref. 4). Thus, there is little evidence that glove defects are associated with HCV exposures. As a result, FDA estimates the overall annual transmission of blood-borne pathogens due to defects in glove barrier protection in health care settings to include 2.4 cases of HIV infection and 2.4 cases of HBV infection. Increasing the AQL of gloves by lowering the rate of acceptable defects should reduce the transmission rates of these pathogens. D. Baseline Conditions The previous AQL (being replaced by this rule) for medical gloves allowed a defect rate of 4.0 percent for patient examination gloves and 2.5 percent for surgeons' gloves. The AQL represents the proportion of sampled gloves from a given lot that may include defects such as leaks or foreign material and still be accepted for entry into the marketplace. Currently, if more than 4 percent of the sampled patient examination gloves exhibit defects in accordance with the sampling criteria, the entire lot of gloves is considered adulterated. Surgeons' gloves are sampled to a higher quality level (lower AQL requires a higher proportion of non-defective gloves in order to pass inspection), because these products have a higher likelihood of contact with bodily fluids. Of course, medical glove lots that fail to meet the AQL may be marketed as household or other products. If a sample of gloves fails to meet the AQL, the marketer may request resampling of the lot. The required sampling plan for a lot originally found to be out of compliance is more intensive than the original sampling plan for a randomly selected lot. Lots initially found to be out of compliance are either resampled and subsequently offered as medical devices after meeting the current AQL, offered as nonmedical gloves, or sold in foreign markets. Approximately 39.2 billion medical gloves were imported into the United States during 2004 (Ref. 6). According to FDA records, there are over 400 manufacturers of medical gloves. Malaysian manufacturers supply almost 40 percent of the medical gloves in the United States while Chinese manufacturers supply approximately 30 percent (Ref. 7). Surgeons' gloves accounted for only about 15 percent of all imported medical gloves during 2004, and the impact of the final rule on this sector is negligibly different from overall patient examination gloves. Therefore, this analysis focuses exclusively on patient examination gloves. FDA expects the demand for medical gloves to increase by the same rate as employment in the medical services industry. The Bureau of Labor Statistics has projected annual employment growth of 2.6 percent for this industry (North American Industry Classification System 6200) (Ref. 8), which implies an annual volume of over 50 billion medical gloves in 10 years. (A 2.6 annual growth rate results in an expected increase of 29.3 percent in 10 years.) Medical glove lot sizes may vary from as few as 25 gloves to as many as 500,000. According to discussions with manufacturers (Eastern Research Group, Inc.

(ERG)2001), a typical production or import lot from a foreign manufacturer contains an average of 325,000 gloves (either patient examination or surgeons'). This implies that the U. S. medical glove market currently imports over 120,600 lots of gloves per year. FDA currently samples only about 1.5 percent of all glove lots, or 1,800 lots per year. Within 10 years, FDA expects the number of lots offered for import to increase to 156,000. If the compliance sampling rate remains constant, FDA would sample about 2,300 lots during that year. FDA's Winchester Engineering and Analysis Center

(WEAC)analyzed results from samples collected from 2000 and 2001. These samples represent approximately one-third of FDA's total sampling effort for the period. A total of 98,067 gloves were tested from 942 separate lots. Of these gloves, 2,354 were defective, which implies that 2.4 percent of marketed gloves are likely to be defective. If so, then approximately 940 million defective medical gloves are currently marketed (39.2 billion gloves x 0.024). At the current AQL of 4.0, 28 lots (2.97 percent) failed. Consequently, approximately 53 annually sampled lots are defective (1,800 sampled lots x 0.0297). By the 10th year, in the absence of the final regulation, 1.21 billion defective gloves would be marketed and 68 of the sampled lots would fail to meet the AQL. FDA allows glove lots that fail to meet the AQL to be resampled. Sponsors usually attempt to resample the glove lot rather than divert the entire lot to alternative markets. According to discussions with industry sources and testing laboratories, the cost of glove lot resampling and retesting for leakage and tensile strength is approximately $1,400. The current annual industry cost of resampling glove lot failures with the current AQL is approximately $74,000 (53 lots times $1,400 per lot). This resampling and retesting cost would equal $95,000 within 10 years. E. Costs of the Final Rule FDA expects that the final rule will result in changed shipping practices by medical glove manufacturers. Currently, manufacturers use the target AQLs as a guide for releasing production lots of gloves for export to the United States because the release criteria are lower in the United States than in other markets. Manufacturers attempt to avoid having three failures within a 24-month period, because this may result in refusal of future imports under Level 3 detention described in FDA's current policy, “Surveillance and Detention Without Physical Examination of Surgeon's and/or Patient Examination Gloves.” Thus, to maintain an uninterrupted supply of gloves to customers, and to guard brand loyalty while avoiding Level 3 detention, manufacturers would be expected to raise their level of quality control to at least maintain the current average lot rejection rate of 2.97 percent. FDA also expects the rule to increase the costs of sampling by requiring larger and more detailed sampling plans to assure the lower AQL is met for each inspected glove lot. FDA does not envision increased regulatory oversight costs because the rate of inspections is not expected to change. Costs have been analyzed and discounted using the methodology suggested by OMB's Circular A-4 (September 2003). 1. Costs of Quality Control Manufacturers currently conduct quality control tests on glove lots prior to release. These tests include water-tight leak and tensile strength assays. According to interviews with glove manufacturers, the current cost of conducting these tests at the manufacturing site is approximately $310 per lot, while the more stringent quality control testing required by this rule may cost an additional $45 per lot. The additional cost is for increased inventory and larger sample sizes to ensure more precise measurements at the lower AQL. Because approximately 120,600 lots are currently imported per year, the expected costs are $5.4 million (120,600 lots x $45 per lot). The expected increase in the demand for medical gloves by the 10th evaluation year will result in a compliance cost of meeting this increased quality level of $7.0 million. Over the 10-year period, the average annualized cost of this increased level of testing, at a 3 percent annual discount rate, is $6.2 million and, at a 7 percent annual discount rate, is $6.2 million. 2. Increased Sampling Costs A lower AQL will result in increased sampling costs for imported glove lots. The increased sampling costs will result from the need to test greater quantities of gloves in order to ensure sufficient statistical power. Based on reported costs from U.S. testing laboratories, ERG, an independent economic contractor, estimated that increased testing would add approximately $200 to the current costs of $1,400 per sample. (The difference between this increased cost and the $45 increased quality control cost is attributable to lower costs in foreign countries that produce medical gloves.) FDA currently samples about 1.5 percent of the 120,600 lots imported annually, or 1,800 samples. Thus, the increased sampling costs due to this final rule are $0.4 million (120,600 lots x 0.015 x $200). Within 10 years, this increased cost will equal $0.5 million (due to expected increases in the number of inspected glove lots). The average annualized sampling cost increase at a 3 percent annual discount rate is $0.4 million, and at a 7 percent annual discount rate is $0.4 million. 3. Withheld Lots The lower AQL in this final rule is also likely to result in an increase in the number of lots of medical gloves that are not released for shipment to the U.S. medical market. For example, manufacturers may attempt to maintain a target compliance level in order to avoid FDA's Level 3 detention under “Surveillance and Detentions Without Physical Examination of Surgeon's and or Patient Examination Gloves.” FDA's WEAC laboratory sampled 942 lots and discovered that 28 failed using the current AQL while 79 lots failed using the lower AQL in this final rule. To maintain the original 0.0297 (28/942) lot failure rate, the 53 lots with the highest defect rate would have to be held back by the affected manufacturers (.056) 1 . 1 The current lot failure rate (28/942 = 0.0297) is reached by removing 53 defective lots from the sample. If only the 51 additional failing lots are removed, the overall failure rate is 0.0314 (28/891). The expected future failure rate is 0.0292 (26/889). FDA expects the withheld lots to include those with the highest defect rates. Therefore, FDA anticipates that under the lower AQL in the final rule, approximately 6,900 lots will be held back by manufactures. In order to meet the expected demand in 10 years, FDA expects that 9,000 lots will be held back. FDA believes that glove lots that fail to meet the lower AQL in this final rule for medical quality standards will most likely be sold as nonmedical gloves. FDA believes that, although manufacturers and distributors may experience some loss of revenue from this shift (because of the price premium commanded by medical gloves), the loss will be inconsequential. 4. Costs of FDA Inspections FDA does not envision increased inspection costs due to the final rule. The rate of sampled glove lots is not expected to differ and FDA resources are not expected to increase over the evaluation period. 5. Total Costs In sum, FDA estimates that the final rule will have an average annualized cost of about $6.6 million using either a 3 percent or 7 percent annual discount rate. Table 2 presents the costs for each year of the evaluation period. **Table 2.—Costs per Year of the Final Rule (in millions)** Year Costs for Quality Control Costs for Sampling Total Costs Current $5.4 $0.4 $5.8 1 $5.6 $0.4 $6.0 2 $5.7 $0.4 $6.1 3 $5.9 $0.4 $6.3 4 $6.0 $0.4 $6.4 5 $6.2 $0.4 $6.6 6 $6.3 $0.4 $6.7 7 $6.5 $0.4 $6.9 8 $6.7 $0.4 $7.1 9 $6.8 $0.5 $7.3 10 $7.0 $0.5 $7.5 Present Values 3%-$53.2 7%-$43.4 3%-$3.6 7%-$2.9 3%-$56.8 7%-$46.3 F. Benefits of the Rule The final rule will result in public health gains by reducing the frequency of blood-borne pathogen transmissions due to defects in the barrier protection provided by medical gloves. Based on an implied societal willingness to pay (WTP), FDA expects that an annualized monetary benefit of $14.8 million (using a 3 percent discount rate) or $15.1 million (using a 7 percent discount rate) will be realized due to fewer pathogen transmissions and unnecessary blood screens. Fewer glove defects will reduce the cost and anxiety associated with unnecessary blood screens (i.e., those that would yield negative results for health care personnel). Benefits have been analyzed and discounted using the methodology suggested by OMB's Circular A-4 (September 2003). 1. Reductions in the Number of Marketed Defective Gloves As noted in the previous paragraphs, FDA has determined that approximately 940 million defective gloves are marketed each year in the United States, or 2.4 percent of all medical gloves. In the absence of this rule, FDA expects that the number of defective medical gloves marketed in the United States would increase to 1.21 billion per year within 10 years. The final rule will substantially reduce this figure. WEAC's analysis of 98,067 medical gloves from 942 sampled lots collected in 2000 and 2001 resulted in approximately 3 percent lot failures with an AQL of 4.0 (28 lots would fail). This lot failure rate was associated with 2,356 defective gloves, or 2.4 percent of the total number of sampled gloves. Under the lower AQL of 2.5 in the rule, the WEAC analysis concluded that 51 additional lots would fail (a total of 79 failed lots), increasing the lot failure rate from 2.91 percent to 8.39 percent. As previously mentioned, FDA provides a Level 3 detention status in its guidance, “Surveillance and Detentions Without Physical Examination of Surgeon's and or Patient Examination Gloves.” Manufacturers on Level 3 detention are not allowed to import medical gloves because they have repeatedly failed analysis. To avoid the denial of entry, manufacturers may be expected to hold a sufficient number of defective lots from shipment in order to maintain the same target lot failure rate (approximately 3 percent) with a new AQL. If so, removing the 53 most defective lots in the testing sample would result in 26 lot failures from 880 total lots, thereby maintaining the original 2.92 percent lot failure rate. This scenario leaves 85,172 total gloves in the sample, of which 1,512 were defective, resulting in a glove defect rate of 1.78 percent. The final rule, therefore, could reduce the proportion of marketed defective medical gloves from 2.4 percent of all marketed gloves to 1.78 percent of all marketed gloves. The implications of this expected reduction in defective gloves are significant. The current AQL is associated with 940 million glove defects during the present year (based on 2004) and within 10 years would result in 1.21 billion marketed defective medical gloves. When the lower AQL is in place, the current number of defective gloves will approximate 700 million and within 10 years will result in 900 million defective marketed gloves. The number of defective gloves, therefore, should be reduced by more than 25 percent due to the new AQL. 2. Reductions in Blood-Borne Pathogens FDA has estimated that there are potentially 4.8 annual transmissions of blood-borne pathogens associated with medical glove defects (section IV.C of this document). These transmissions include 2.4 cases of HIV and 2.4 cases of chronic HBV. Because there are currently no documented cases of cutaneous transmission of HCV that would be affected by improving glove quality levels, this analysis does not consider potential HCV transmission. a. *Reductions in HIV transmission* . While the direct relationship between defective medical gloves and the transmission of HIV is unknown, FDA believes it is reasonable to apply the proportional reduction in the number of defective gloves due to the final rule (about 25 percent) to the annual transmission rate of the HIV pathogen to health care personnel. In the absence of this rule, the current expectation of 2.4 annual cases of HIV transmission to health care personnel would likely increase to 3.1 annual cases within 10 years due to the expected growth of employment in the health services industry. However, with the new AQL in place, FDA forecasts the expected annual transmission of HIV to health care personnel to equal 1.8 cases in current conditions and 2.3 cases by the 10th evaluation year (based on the expected proportionate decrease in marketed defective gloves). Over the entire 10-year evaluation period, these assumptions suggest that the rule should prevent approximately seven cases of HIV transmission to health care personnel. b. *Reductions in HBV transmissions* . Hepatitis B transmissions to health care personnel are more common than cutaneous HIV transmissions. However, little specific data are available to identify affected patient populations and routes of transmission. FDA has estimated that as many as 2.4 cutaneous transmissions of chronic HBV may be due to defective medical gloves each year. In the absence of this rule, this number would be expected to increase to 3.1 annual transmissions within 10 years, based on the expected employment growth in the health services industry. Implementation of the final rule should decrease these transmissions by about 25 percent. FDA expects 1.8 HBV transmissions under current conditions, a reduction of 0.6 transmissions from baseline conditions. By the 10th evaluation year, FDA expects that there will be 2.3 chronic HBV transmissions with the lower AQL, or a total of 0.8 fewer cases. Overall, about seven transmissions of chronic HBV will be avoided due to the final rule over a 10-year evaluation period. 3. Reductions in the Number of Blood Screening Tests As the number of defective gloves marketed in the United States decreases due to this rule, corresponding reductions would be expected in the number of unnecessary blood screens. FDA contacted several research hospitals to ascertain how frequently health care personnel identify glove failure as a reason for initiating blood screens. Respondents stated that about 5 percent of all glove failures are noticed by the user and about 1 percent of these identified failures are reported to the facility for additional screening (Ref. 9 and 10). Respondents noted that the glove failure could occur prior to patient contact. Therefore, the additional screening may apply to the affected health care personnel or the patient. The great majority of these screens result in negative findings. As shown in the previous paragraphs, when the final rule is in effect, FDA expects the number of defective gloves marketed to decrease from 940 million to 700 million, a reduction of 240 million defective gloves. By the 10th year, the number of defective gloves is expected to decrease from 1.21 billion to 900 million, a reduction of 310 million defective gloves. At the rates of potential identification (5 percent) and reports of contact with pathogens (1 percent) obtained from the research hospital sector, the final rule should result in 120,000 fewer unnecessary blood screens under current conditions (240 million fewer defects x 0.05 x 0.01). By the 10th year, 155,000 fewer annual blood screens are expected. Over the entire evaluation period, the rule could result in over 1.4 million fewer unnecessary blood screens. 4. Cost-Effectiveness of the Final Rule We analyzed the cost-effectiveness of the final rule using both the cost per transmission of blood-borne pathogen avoided and the cost per unnecessary blood screen avoided. The annual numbers of future avoided transmissions and tests were compared to the present values of the costs for the evaluation period and shown in Table 3. Table 3 shows the expected annual reductions in blood-borne pathogens and unnecessary blood screens due to the final rule. **Table 3.—Expected Annual Reductions in Blood-Borne Pathogen Transmissions and Unnecessary Blood Screens** Year Reduction in Blood-Borne Pathogen Transmission Reduction in Unnecessary Blood Screens Current 1.2 120,000 1 1.2 120,000 2 1.2 125,000 3 1.4 135,000 4 1.4 135,000 5 1.4 140,000 6 1.4 145,000 7 1.6 150,000 8 1.4 145,000 9 1.6 155,000 10 1.6 155,000 Although these reductions should continue beyond the evaluation period, we have analyzed only through the 10th year. Each year's expected number of reduced blood-borne pathogen transmissions and unnecessary blood screens are discounted (using both a 3 percent annual discount rate and a 7 percent annual discount rate) to arrive at an equivalent number of reductions if valued during the first evaluation year. The present values of the regulatory costs (shown in Table 4) are divided by the present values of the expected reductions to arrive at the cost per avoided event. This is shown in Table 4. **Table 4.—Regulatory Cost-Effectiveness per Incidence of Blood-Borne Pathogen Transmission Avoided and Unnecessary Blood Screen Avoided** Annual Discount Rate Present Value of Costs (in millions) Present Value of Blood-Borne Pathogens Avoided Cost per Blood-Borne Pathogen Avoided (in millions) Present Value of Blood Screens Avoided Cost per Blood Screen Avoided 3 percent $56.8 12.2 $4.7 1,191,000 $48 7 percent $46.3 9.8 $4.7 971,000 $48 The cost-effectiveness of the final rule is $4.7 million per transmission of blood-borne pathogen avoided, or $48 per unnecessary blood screen avoided for both discount rates. We note that both reductions should occur and the allocation of costs to each outcome would reduce the costs per avoided event for both. 5. Value of Avoiding Blood-borne Pathogens a. *Quality adjusted life-years* . The economic literature includes many attempts to quantify societal values of health. A widely cited methodology assesses wage differentials necessary to attract labor to riskier occupations. This research indicates that society appears to be WTP approximately $5 million to avoid the probability of a statistical death (Refs. 11, 12, and 13). That is, social values appear to show that people are WTP a significant amount to reduce even a small risk of death; or similarly, to demand significant payments to accept marginally higher risks. Because this estimate is predominantly based on blue-collar occupations that mainly attract males between the ages of 30 and 40, FDA adjusted the life-expectancy of a 35-year-old male to account for future bed and non-bed disability (Refs. 14, 15, and 16), and amortized the $5 million (at both 3 percent and 7 percent discount rates) over the resulting quality-adjusted life span. The results were estimates of $213,000 per quality adjusted life-year

(QALY)using a 3 percent discount rate and $373,000 per QALY using a 7 percent discount rate, which implies that society is WTP between $213,000 and $373,000 for the statistical probability of a year of perfect health, depending on the discount rate. b. *Value of morbidity losses* . In theory, loss of health reduces the willingness to pay for additional longevity. Many studies have attempted to estimate the relative loss of health for many different conditions of morbidity. One method utilizes the Kaplan-Bush Index of Well-Being. This index assigns relative weights to functional states, and then adjusts the resulting weighted value by the problem/symptom complex that contributed to loss of function (Refs. 16 and 17). Functional state is measured in three areas: Mobility, social activity, and physical activity. For example, with most treatment, chronic HBV is unlikely to have a major impact on any of these functions; a patient could drive a car, walk without a physical problem, and conduct work, school, housework and other activities. However, because a patient with HBV has an ongoing problem/symptom complex the relative weight of this functional state is 0.7433 2 . 2 The implication is that an ideal health state is valued as 1.0000 and mortality at 0.0000. Each functional state between these extremes is a proportionate value of “perfect” health. This methodology then adjusts the weighted value of the functional state by the most severe problem/symptom complex contributing to that state. In the case of chronic HBV, the most common symptom is general tiredness, weakness, or weight loss. This complex has a derived relative weight of +0.0027, which when added to the weighted functional state value results in a relative weight of 0.7460. The loss of relative health due to HBV, therefore, is expected to equal 1.0000 minus 0.7460, or 0.2540 of perfect health. When this relative health loss is applied to the derived value of a QALY, it implies that society would be WTP between $54,000 (3 percent) and $93,000 (7 percent) per year to avoid a case of HBV (QALY value x 0.2540). This value includes the potential costs of treatment and additional prevention, as well as any perceived pain and suffering. FDA compared this methodology to a variety of published estimates of preference ratings of morbidity prepared by the Harvard Center for Risk Analysis

(HCRA)(Ref. 17a). The published ratings of 14 studies of chronic HBV ranged from 0.75 to 1.00 (no impact). While the estimate used in this analysis (0.746) is in the low end of collected published studies, FDA notes that most of the expressed preferences that were derived from time trade-off and standard gamble methodologies, as compared to author judgment, were closer to the FDA estimate. A health care worker who may contract HBV may typically have a life expectancy of approximately 40 years (as of 2000, a 40-year-old female had a future life expectancy of 41.1 years (Ref. 14)). The present value

(PV)of $54,000 (3 percent) and $93,000 (7 percent) for 40 years implies that society is WTP $1.25 million (3 percent) or $1.24 million (7 percent) to avoid the statistical likelihood of a case of chronic HBV in health care personnel. Deriving society's implied WTP to avoid HIV is more complicated. The CDC has published data indicating that approximately 80 percent of all HIV infections progress to AIDS within 5 years. Of the cases of AIDS, over half (approximately 60 percent) result in mortality within an additional 5 years. Thus, for a 10-year period, FDA tracked 3 potential outcomes: Patients who contract HIV but do not progress to AIDS (20 percent), patients who contract HIV and progress to AIDS in 5 years and survive (32 percent), and patients who contract HIV, progress to AIDS within 5 years and then die within an additional 5 years (48 percent). HIV infection is not expected to affect either mobility or social activity. However, such an infection is likely to somewhat inhibit physical activity. HIV patients are expected to be able to walk, but with some physical limitations. This functional state has a relative weight of 0.6769. The main problem/symptom complex of HIV is general tiredness (as for HBV), so the selected functional weight is adjusted by +0.0027 to result in relative well-being of 0.6796. As a result, the relative societal willingness to pay to avoid the statistical probability of a case of HIV in health care personnel is approximately $68,000 (3 percent) or $120,000 (7 percent) per year (QALY value x [1.0000 minus 0.6796]). According to the collected preference scores (ref. 17a) in the HCRA's Catalog of Preference Scores, the average estimated published preference rating for HIV infection was 0.7 (range 0.3 to 1.00). If HIV progresses to AIDS, a patient's functional state is likely to be more restricted. An AIDS patient requires some assistance with transportation, is limited in physical activity, and is limited in work, school, or household activity. The relative weight for this functional state is 0.5402. The main problem/symptom of AIDS remains general tiredness and loss of weight (as with HIV and HBV), so the adjusted health state is 0.5429. This results in a derived societal willingness to pay to avoid the statistical probability of a case of AIDS of about $97,000 (3 percent) or $170,000 (7 percent) per year (QALY value x (1.0000 minus 0.5429)). The HCRA's Catalog of Preference Scores (ref. 17a) reports average preference ratings of 0.375 for cases of AIDS with ranges from 0.0 to 0.5. As discussed earlier, the derived societal willingness to pay to avoid a statistical mortality has been estimated to equal approximately $5 million. Using these estimates, the WTP to avoid the statistical probability of an HIV transmission in health care personnel is calculated as the sum of: • 20 percent of the PV (at 3 percent and 7 percent discount rates) of avoiding 40 years of HIV infection. • 32 percent of the sum of the PV of avoiding 5 years of a HIV infection plus the PV of avoiding 35 years of AIDS infection occurring 5 years in the future. • 48 percent of the sum of the PV of avoiding 5 years of HIV infection plus the PV of avoiding 5 years of AIDS infection occurring 5 years in the future plus the discounted WTP of avoiding a statistical mortality occurring 10 years in the future. The PV of avoiding 40 years of health loss valued at $68,000 per year (3 percent) is approximately $1.6 million and if valued at $120,000 per year (7 percent) is also approximately $1.6 million. Twenty percent of this figure equals $320,000. The PV of avoiding 5 years of health loss to due HIV infection is equal to $311,000 (3 percent) or $492,000 (7 percent). The PV of avoiding the health loss expected from 35 years of AIDS infection (valued at $97,000 (3 percent) and $170,000 (7 percent) per year) is equivalent to $2.1 million (3 percent) and $2.2 million (7 percent). The present values of these amounts occurring 5 years in the future are $1.8 million (3 percent) and $1.6 million (7 percent). When added to the PV of avoiding the health loss associated with 5 years of HIV infection ($311,000 (3 percent) and $492,000 (7 percent)), the total estimated PV of the societal willingness to pay to avoid a statistical case of this outcome is about $2.1 million (for both 3 percent and 7 percent discount rates). Thirty-two percent of this figure equals $660,000. The PV of avoiding the health loss associated with 5 years of AIDS infection ($445,000 (3 percent) and $700,000 (7 percent)) occurring 5 years in the future is equivalent to $384,000 (3 percent) and $497,000 (7 percent). The PV of the societal value of avoiding a statistical mortality ($5 million) 10 years in the future is $3.72 million (at 3 percent) and $2.54 million (at 7 percent). The total societal WTP to avoid a case of HIV with mortality as an outcome, therefore, is $4.4 million using a 3 percent discount rate ($311,000 plus $384,000 plus $3.72 million) and $3.5 million using a 7 percent discount rate ($493,000 plus $497,000 plus $2.54 million). Forty-eight percent of these figures equals approximately $2.1 million (3 percent) and $1.7 million (7 percent). Summing the weighted amounts of the three expected outcomes for a case of HIV infection equals an estimated societal willingness to pay of $3.08 million using a 3 percent discount rate ($320,000 plus $660,000 plus $2.1 million) and $2.68 million using a 7 percent discount rate ($320,000 plus $660,000 plus $1,700,000). In sum, the estimated societal values of avoiding morbidity and mortality due to transmission of blood-borne pathogens are estimated to be equivalent to $1.25 million per transmission of chronic HBV and $3.08 million per transmission of HIV using a 3 percent discount rate and $1.24 million per transmission of HBV and $2.68 million per transmission of HIV using a 7 percent discount rate. FDA notes that other cost-effectiveness research (Ref. 18) has determined cost-effectiveness estimates (excluding pain and suffering) of $2.1 million per avoided case of HIV. FDA believes the methodology used to estimate the value of avoided HBV and HIV infection is reasonable and supportable. However, comparative methodologies that demonstrate both higher and lower values on avoidance have been reported. FDA acknowledged these differences in the proposed rule and solicited comment on other appropriate measures for estimating the societal value of avoiding blood-borne pathogens. FDA received no responses. c. *Benefit of morbidity avoidance* . The rule is expected to reduce both HBV and HIV transmissions by reducing the prevalence of defective medical gloves used as barrier protection. During the first evaluation year, the rule is expected to result in 0.6 fewer chronic HBV transmissions to health care personnel. Applying the assumed societal WTPs of $1.25 million (3 percent) and $1.24 million (7 percent) to avoid the probability of an HBV infection, the expected benefit of avoiding these transmissions is $0.8 million (3 percent) and $0.7 million (7 percent). By the 10th evaluation year, 0.8 annual transmissions are expected to be avoided at a value of $1.0 for either discount rate. The PV of avoiding approximately 7 chronic HBV transmissions over a 10-year period equals $7.6 million (at 3 percent discount rate) and $6.1 million (at 7 percent discount rate). This is equal to an average annualized value of $0.9 million for the entire 10-year evaluation period at either discount rate. Also, in the first evaluation year, FDA expects that the final rule will result in the probability of 0.6 fewer transmissions of HIV caused by defective gloves. Assuming that society is WTP $3.08 million (at 3 percent discount rate) and $2.68 million (at 7 percent discount rate) to avoid the probability of a single HIV transmission, the benefit of avoiding these transmissions equals $1.8 million (3 percent) and $1.6 million (7 percent). By the 10th evaluation year, FDA expects the final rule to result in 0.8 fewer HIV transmissions, which are valued at $2.5 million (3 percent) and $2.1 million (7 percent). The societal PV of avoiding seven transmissions of HIV over the 10-year evaluation period is $18.8 million (at 3 percent discount rate) and $13.1 million (at 7 percent discount rate). These values are equivalent to average annualized benefits of $2.2 million (at 3 percent discount rate) and $1.9 million (at 7 percent discount rate). In sum, FDA estimates that the reduction in blood-borne pathogen transmissions due to this final rule should produce health benefits valued at $3.1 million (at 3 percent discount rate) and $2.8 million (at 7 percent discount rate) per year. Most of this benefit (over 67 percent) is attributable to reducing the incidence of HIV. 6. Value of Avoiding Unnecessary Blood Screens The expected decline in the number of defective medical gloves should lead to fewer unnecessary blood screens and thereby provide two potential benefits. First, the direct cost of conducting screens to determine whether the pathogen was transmitted to health care personnel should decrease. Second, the psychological anxiety and stress that accompanies the possibility that a pathogen was transmitted to an individual should also decrease. a. *Cost of conducting blood screens* . FDA has collected data from the American Red Cross (Ref. 5) on the costs of conducting blood screening tests in order to ensure the safety of the blood supply. These estimates include the costs of collection (including personnel, needles, bags, and other supplies) at $47.66 per sample; sample testing at $25.16 per sample; and overhead at $3.26 per sample. The estimated direct testing cost per blood sample is the sum of these amounts, or $76 per test. b. *Anxiety and stress associated with potential transmission of pathogens* . The psychological literature has noted that levels of anxiety and stress impact participation in public health screening programs and thereby affect physiological health (Refs. 19, 20, and 21). Also, patients with high levels of uncertainty about whether they have contracted serious, threatening diseases experience heightened levels of stress and anxiety until they learn the results of any testing screens are negative (Ref. 20). According to one measurement scale of well-being, reduced mental lucidity, depression, crying, lack of concentration, or other signs of adverse psychological sequelae may detract as much as 8 percent from overall feelings of well-being (Ref. 16) and have outcomes similar to physiological morbidity. Scaling of the relative stress caused by events shows that concerns about personal health, by themselves, are likely, on average, to contribute approximately one-sixth of the total weighting required to trigger a major stressful episode (Refs. 20, 21, and 22). Thus, FDA approximates that increased stress and anxiety concerning possible exposure to pathogens may reduce overall sense of well-being and result in health loss of approximately 1.3 percent (0.013). As described earlier, FDA has calculated an assumed WTP of $213,000 (at 3 percent) and $373,000 (at 7 percent) for a statistical QALY. These figures imply that the probability of each day of quality adjusted life has a social value of about $585 (at 3 percent discount rate; $213,000 divided by 365) and $1,020 (at 7 percent discount rate; $373,000 divided by 365). If blood test results are usually obtained within 24 hours, the resultant loss of societal well-being for each test subject is valued at approximately $8 (at 3 percent discount rate; $585 x 0.013) and $13 (at 7 percent discount rate, $1,020 x 0.013). c. *Benefit of test avoidance* . By combining avoided direct costs of tests and the value of avoided anxiety and stress, FDA estimates that the societal benefit of avoiding an unnecessary blood test is $84 per sample (at 3 percent discount rate) and $89 per sample (at 7 percent discount rate). During the first evaluation year, FDA expects that there will be 120,000 fewer unnecessary blood screens because of the expected reduction in defective medical gloves due to the final rule. The implied societal WTP to avoid these unnecessary screens is $10.1 million (3 percent) and $10.7 million (7 percent). During the 10th evaluation year, approximately 155,000 fewer unnecessary blood screens are expected with a resultant benefit of $13.0 million (3 percent) and $14.0 million (7 percent). The PV of each year's reduced cost of testing and anxiety totals $100.0 million (at 3 percent discount rate) and $86.4 million (at 7 percent discount rate). The average annualized equivalent amounts are $11.7 million (3 percent) and $12.3 million (7 percent). Between 85 percent and 90 percent of the average annualized amounts represent reductions in the direct testing costs rather than the reduced anxiety associated with possible infection by a contagious agent. 7. Total Benefits FDA estimates that the final rule will reduce the availability of defective medical gloves by over 25 percent, resulting in over 2.8 billion fewer defective gloves over a 10-year period. During this time, FDA expects that the reduction in defective gloves will result in approximately 7 fewer cases of chronic HBV, 7 fewer cases of HIV, and 1.4 million fewer unnecessary blood screens. Based on an implied societal WTP, the average annualized benefits of the fewer pathogen transmissions and unnecessary blood screens should equal $14.8 million (at 3 percent annual discount rate) and $15.1 million (at 7 percent discount rate). G. Conclusion As noted in the introduction to the analysis of impacts section, FDA is certifying that the final rule will not have a significant impact on a substantial number of small entities. We provided the above information to explain the costs and benefits of the rule. There are currently over 400 manufacturers of medical gloves, a vast majority of which are foreign and not covered by the Regulatory Flexibility Act. There will be little to no impact on domestic entities. Moreover, FDA does not expect any increased manufacturer costs to be directly passed on to end users because the cost increases will affect only a minority of global manufacturers and, therefore, competition will likely force these manufacturers to absorb these costs. The estimated annualized costs equal $6.6 million using either a 3 percent annual discount rate or a 7 percent annual discount rate. Benefits of avoiding transmissions of blood-borne pathogens and unnecessary blood screens have been estimated to equal $14.8 million (using a 3 percent discount rate) or $15.1 million (using a 7 percent discount rate). The final rule is estimated to result in average annualized net benefits of $8.2 million (using a 3 percent discount rate) or $8.5 million (using a 7 percent discount rate). IV. Paperwork Reduction Act of 1995 This final rule contains no collections of information that are subject to review by OMB under the Paperwork Reduction Act of 1995

(PRA)(44 U.S.C. 3501-3520). The information collection described in this rule regarding testing to establish the reconditioning of adulterated gloves is exempted from the requirements of the PRA under 5 CFR 1320.4(a)(2) and (c): The rule describes testing to be conducted on specific lots of adulterated gloves “during the conduct of an administrative action, investigation, or audit involving the agency against specific individuals” (1320.4(a)(2)) and “after a case file or equivalent is opened with respect to a particular party” (1320.4(c)). V. References The following references have been placed on display in the Division of Dockets Management and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. FDA has verified the Web site addresses, but is not responsible for subsequent changes to the Web site after this document publishes in the **Federal Register** . 1. U.S. Centers for Disease Prevention and Control, “HIV/AIDS Fact Sheet,” *www.cdc.gov* , 2002. 2. U.S. Centers for Disease Prevention and Control, “Surveillance of Health Care Workers with HIV/AIDS,” *www.cdc.gov* , 2001. 3. U.S. Centers for Disease Prevention and Control, “Hepatitis Fact Sheet,” *www.cdc.gov* , 2002. 4. U.S. Centers for Disease Prevention and Control, “Updated U.S. Public Health Service Guidelines for the Management of Occupational Exposures to HBV, HCV, and HIV and Recommendations for Postexposure Prophylaxis,” *Morbidity and Mortality Weekly Report* , July 17, 2002. 5. American Red Cross, Washington Post, June 12, 2001. 6. U.S. International Trade Commission, “Import Statistics,” *www.itc.gov* , 2001. 7. Eastern Research Group, “Labeling and Related Testing Costs for Medical Glove Manufacturers,” April 17, 2002. 8. U.S. Bureau of Labor Statistics, “Industrial Outlooks,” *www.bls.gov* , 2002. 9. Bonel, L., Johns Hopkins University, correspondence with John Farnham, July 12, 2002. 10. Budnick, L., Michigan State University, correspondence with John Farnham, July 19, 2002. 11. Viscusi, K., “Fatal Tradeoffs: Public and Private Responsibilities for Risk,” Oxford University Press, 1992. 12. Fisher, A., L. Chestnut, et al., “The Value of Reducing Risks of Death: A Note on New Evidence,” *Journal of Policy, Analysis, and Management* , 8(1):88-100, 1989. 13. Mudarri D., EPA, “The Costs and Benefits of Smoking Restrictions: An Assessment of the Smoke-Free Environment Act of 1993,” (HR 3434), 1994. 14. U.S. National Center for Health Statistics, “Vital Statistics of the United States,” 2002. 15. Chen M., J. Bush, et al., “Social Indicators for Health Planning and Policy Analysis,” *Policy Sciences* , 6:71-89, 1975. 16. Kaplan R., J. Bush, et al., “Health Status: Types of Validity and the Index of Well-Being,” *Health Services Research* , winter, 478-507, 1976. 17. Kaplan R., J. Bush, “Health Related Quality of Life Measurement for Evaluation Research and Policy Analysis,” *Health Psychology* , 1(1):61-80, 1982. 17a. Harvard Center for Risk Analysis, 2002, “CUA Database: Catalog of Preference Scores,” Harvard School of Public Health, *www.hcra.harvard.edu/pdf/preferencescores/pdf* , accessed October 26, 2002. 18. Marin M., J. Van Lieu, et al., “Cost-Effectiveness of a Post-Exposure HIV Chemoprophylaxis Program for Blood Exposures in Health Care Workers,” *Journal of Occupational and Environmental Medicine* , 41:9, 754-60, 1999. 19. Radloff L., “The CES-D Scale: A Self-Report Depression Scale for Research in the General Population,” *Applied Psychological Measurement* , 1(3):385-401, 1977. 20. Shrout, P., “The Scaling of Stressful Life Events,”

(in)Stressful Life Events and Their Contents, B.S. Dohrenwend and B.P. Dohrenwend (eds), Rutgers University Press, 1984. 21. Holmes, T. and R. Rahe, “The Social Readjustment Rating Scale,” *Journal of Psychosomatic Research* , 11:213-218, 1967. 22. Davis M., E. Eshelman, et al., “The Relaxation and Stress Reduction Workbook,” MJF Books, 1995. List of Subjects in 21 CFR Part 800 Administrative practice and procedure, Medical devices, Opthalmic goods and services, Packaging and containers, Reporting and recordkeeping requirements. Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 800 is amended as follows: PART 800—GENERAL 1. The authority citation for 21 CFR part 800 continues to read as follows: Authority: 21 U.S.C. 321, 334, 351, 352, 355, 360e, 360i, 360k, 361, 362, 371. 2. Section 800.20 is amended by revising paragraphs (b), (c), and

(d)to read as follows: § 800.20 Patient examination gloves and surgeons' gloves; sample plans and test method for leakage defects; adulteration. (b)(1) *General test method* . For the purposes of this part, FDA's analysis of gloves for leaks and visual defects will be conducted by a visual examination and by a water leak test method, using 1,000 milliliters

(ml)of water.

(i)*Units examined* . Each medical glove will be analyzed independently. When packaged as pairs, each glove is considered separately, and both gloves will be analyzed.

(ii)*Identification of defects* . For this test, defects include leaks detected when tested in accordance with paragraph (b)(3) of this section. A leak is defined as the appearance of water on the outside of the glove. This emergence of water from the glove constitutes a watertight barrier failure. Other defects include tears, embedded foreign objects, extrusions of glove material on the exterior or interior surface of the glove, gloves that are fused together so that individual glove separation is impossible, gloves that adhere to each other and tear when separated, or other visual defects that are likely to affect the barrier integrity.

(iii)*Factors for counting defects* . One defect in one glove is counted as one defect. A defect in both gloves in a pair of gloves is counted as two defects. If multiple defects, as defined in paragraph (b)(1)(ii) of this section, are found in one glove, they are counted as one defect. Visual defects and leaks that are observed in the top 40 millimeters

(mm)of a glove will not be counted as a defect for the purposes of this part.

(2)*Leak test materials* . FDA considers the following to be the minimum materials required for this test :

(i)A 60 mm by 380 mm (clear) plastic cylinder with a hook on one end and a mark scored 40 mm from the other end (a cylinder of another size may be used if it accommodates both cuff diameter and any water above the glove capacity);

(ii)Elastic strapping with velcro or other fastening material;

(iii)Automatic water-dispensing apparatus or manual device capable of delivering 1,000 ml of water;

(iv)Stand with horizontal rod for hanging the hook end of the plastic tube. The horizontal support rod must be capable of holding the weight of the total number of gloves that will be suspended at any one time, e.g., five gloves suspended will weigh about 5 kilograms (kg);

(v)Timer capable of measuring two minute intervals.

(3)*Visual defects and leak test procedures* . Examine the sample and identify code/lot number, size, and brand as appropriate. Continue the visual examination using the following procedures:

(i)*Visual defects examination* . Inspect the gloves for visual defects by carefully removing the glove from the wrapper, box, or package. Visually examine each glove for defects. As noted in paragraph (b)(1)(iii) of this section, a visual defect observed in the top 40 mm of a glove will not be counted as a defect for the purpose of this part. Visually defective gloves do not require further testing, although they must be included in the total number of defective gloves counted for the sample.

(ii)*Leak test set-up* .

(A)During this procedure, ensure that the exterior of the glove remains dry. Attach the glove to the plastic fill tube by bringing the cuff end to the 40 mm mark and fastening with elastic strapping to make a watertight seal.

(B)Add 1,000 ml of room temperature water (i.e., 20 (deg)C to 30 (deg)C) into the open end of the fill tube. The water should pass freely into the glove. (With some larger sizes of long-cuffed surgeons' gloves, the water level may reach only the base of the thumb. With some smaller gloves, the water level may extend several inches up the fill tube.)

(iii)*Leak test examination* . Immediately after adding the water, examine the glove for water leaks. Do not squeeze the glove; use only minimum manipulation to spread the fingers to check for leaks. Water drops may be blotted to confirm leaking.

(A)If the glove does not leak immediately, keep the glove/filling tube assembly upright and hang the assembly vertically from the horizontal rod, using the wire hook on the open end of the fill tube (do not support the filled glove while transferring).

(B)Make a second observation for leaks 2 minutes after the water is added to the glove. Use only minimum manipulation of the fingers to check for leaks.

(C)Record the number of defective gloves.

(c)*Sampling, inspection, acceptance, and adulteration* . In performing the test for leaks and other visual defects described in paragraph

(b)of this section, FDA will collect and inspect samples of medical gloves, and determine when the gloves are acceptable as set out in paragraphs (c)(1) through (c)(3) of this section.

(1)*Sample plans* . FDA will collect samples from lots of medical gloves in accordance with agency sampling plans. These plans are based on sample sizes, levels of sample inspection, and acceptable quality levels

(AQLs)found in the International Standard Organization's standard ISO 2859, “Sampling Procedures For Inspection By Attributes.”

(2)*Sample sizes, inspection levels, and minimum AQLs* . FDA will use single normal sampling for lots of 1,200 gloves or less and multiple normal sampling for all larger lots. FDA will use general inspection level II in determining the sample size for any lot size. As shown in the tables following paragraph (c)(3) of this section, FDA considers a 1.5 AQL to be the minimum level of quality acceptable for surgeons' gloves and a 2.5 AQL to be the minimum level of quality acceptable for patient examination gloves.

(3)*Adulteration levels and accept/reject criteria* . FDA considers a lot of medical gloves to be adulterated when the number of defective gloves found in the tested sample meets or exceeds the applicable rejection number at the 1.5 AQL for surgeons' gloves or the 2.5 AQL for patient examination gloves. These acceptance and rejection numbers are identified in the tables following paragraph (c)(3) of this section as follows: **Accept/Reject Criteria at 1.5 AQL for Surgeons' Gloves** Lot Size Sample Sample Size Number Examined Number Defective Accept Reject 8 to 90 Single sample 8 0 1 91 to 280 Single sample 32 1 2 281 to 500 Single sample 50 2 3 501 to 1,200 Single sample 80 3 4 1,201 to 3,200 First 32 32 — 4 Second 32 64 1 5 Third 32 96 2 6 Fourth 32 128 3 7 Fifth 32 160 5 8 Sixth 32 192 7 9 Seventh 32 224 9 10 3,201 to 10,000 First 50 50 0 4 Second 50 100 1 6 Third 50 150 3 8 Fourth 50 200 5 10 Fifth 50 250 7 11 Sixth 50 300 10 12 Seventh 50 350 13 14 10,001 to 35,000 First 80 80 0 5 Second 80 160 3 8 Third 80 240 6 10 Fourth 80 320 8 13 Fifth 80 400 11 15 Sixth 80 480 14 17 Seventh 80 560 18 19 35,000 First 125 125 1 7 Second 125 250 4 10 Third 125 375 8 13 Fourth 125 500 12 17 Fifth 125 625 17 20 Sixth 125 750 21 23 Seventh 125 875 25 26 **Accept/Reject Criteria at 2.5 AQL for Patient Examination Gloves** Lot Size Sample Sample Size Number Examined Number Defective Accept Reject 5 to 50 Single sample 5 0 1 51 to 150 Single sample 20 1 2 151 to 280 Single sample 32 2 3 281 to 500 Single sample 50 3 4 501 to 1,200 Single sample 80 5 6 1,201 to 3,200 First 32 32 0 4 Second 32 64 1 6 Third 32 96 3 8 Fourth 32 128 5 10 Fifth 32 160 7 11 Sixth 32 192 10 12 Seventh 32 224 13 14 3,201 to 10,000 First 50 50 0 5 Second 50 100 3 8 Third 50 150 6 10 Fourth 50 200 8 13 Fifth 50 250 11 15 Sixth 50 300 14 17 Seventh 50 350 18 19 10,001 to 35,000 First 80 80 1 7 Second 80 160 4 10 Third 80 240 8 13 Fourth 80 320 12 17 Fifth 80 400 17 20 Sixth 80 480 21 23 Seventh 80 560 25 26 35,000 and above First 125 125 2 9 Second 125 250 7 14 Third 125 375 13 19 Fourth 125 500 19 25 Fifth 125 625 25 29 Sixth 125 750 31 33 Seventh 125 875 37 38

(d)*Compliance* . Lots of gloves that are sampled, tested, and rejected using procedures in paragraphs

(b)and

(c)of this section, are considered adulterated within the meaning of section 501(c) of the act.

(1)*Detention and seizure* . Lots of gloves that are adulterated under section 501(c) of the act are subject to administrative and judicial action, such as detention of imported products and seizure of domestic products.

(2)*Reconditioning* . FDA may authorize the owner of the product, or the owner's representative, to attempt to recondition, i.e., bring into compliance with the act, a lot or part of a lot of foreign gloves detained at importation, or a lot or part of a lot of seized domestic gloves.

(i)*Modified sampling, inspection, and acceptance* . If FDA authorizes reconditioning of a lot or portion of a lot of adulterated gloves, testing to confirm that the reconditioned gloves meet AQLs must be performed by an independent testing facility. The following tightened sampling plan must be followed, as described in ISO 2859 ``Sampling Procedures for Inspection by Attributes:”

(A)General inspection level II,

(B)Single sampling plans for tightened inspection,

(D)2.5 AQL for patient examination gloves.

(ii)*Adulteration levels and acceptance criteria for reconditioned gloves* .

(A)FDA considers a lot or part of a lot of adulterated gloves, that is reconditioned in accordance with paragraph (d)(2)(i) of this section, to be acceptable when the number of defective gloves found in the tested sample does not exceed the acceptance number in the appropriate tables in paragraph (d)(2)(ii)(B) of this section for reconditioned surgeons' gloves or patient examination gloves.

(B)FDA considers a reconditioned lot of medical gloves to be adulterated within the meaning of section 501(c) of the act when the number of defective gloves found in the tested sample meets or exceeds the applicable rejection number in the tables following paragraph (d)(2)(ii)(B) of this section: **Accept/Reject Criteria at 1.5 AQL for Reconditioned Surgeons' Gloves** Lot Size Sample Sample Size Number Defective Accept Reject 13 to 90 Single sample 13 0 1 91 to 500 Single sample 50 1 2 501 to 1,200 Single sample 80 2 3 1,201 to 3,200 Single sample 125 3 4 3,201 to 10,000 Single sample 200 5 6 10,001 to 35,000 Single sample 315 8 9 35,000 and above Single sample 500 12 13 **Accept/Reject Criteria at 2.5 AQL for Reconditioned Patient Examination Gloves** Lot Size Sample Sample Size Number Defective Accept Reject 8 to 50 Single sample 8 0 1 51 to 280 Single sample 32 1 2 281 to 500 Single sample 50 2 3 501 to 1,200 Single sample 80 3 4 1,201 to 3,200 Single sample 125 5 6 3,201 to 10,000 Single sample 200 8 9 10,001 to 35,000 Single sample 315 12 13 35,000 and above Single sample 500 18 19 Dated: December 12, 2006. Jeffrey Shuren, Assistant Commissioner for Policy. [FR Doc. E6-21591 Filed 12-18-06; 8:45 am] BILLING CODE 4160-01-S DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9303] RIN 1545-BF84 Corporate Reorganizations; Distributions Under Sections 368(a)(1)(D) and 354(b)(1)(B) AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final and temporary regulations. SUMMARY: This document contains temporary regulations under section 368 of the Internal Revenue Code of 1986 (Code). The temporary regulations provide guidance regarding the qualification of certain transactions as reorganizations described in section 368(a)(1)(D) where no stock and/or securities of the acquiring corporation is issued and distributed in the transaction. These regulations affect corporations engaging in such transactions and their shareholders. The text of the temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the **Federal Register** . DATES: *Effective Date:* These regulations are effective on December 19, 2006. *Applicability Date:* For dates of applicability, see § 1.368-2T(l)(4)(i). FOR FURTHER INFORMATION CONTACT: Bruce A. Decker at

(202)622-7550 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The IRS and Treasury Department have received requests for immediate guidance regarding whether certain acquisitive transactions can qualify as reorganizations described in section 368(a)(1)(D) where no stock of the transferee corporation is issued and distributed in the transaction. Currently, the IRS and Treasury Department are undertaking a broad study of issues related to acquisitive section 368(a)(1)(D) reorganizations. In the interest of efficient tax administration, the IRS and Treasury Department are issuing these temporary regulations to provide the requested certainty for taxpayers regarding these acquisitive transactions pending the broader study of issues. Although these rules also are being proposed in the Proposed Rules section in this issue of the **Federal Register** , the IRS and Treasury Department contemplate that the proposed rules may change upon completion of this broader study and the comments received. The Code provides general nonrecognition treatment for reorganizations specifically described in section 368(a). Section 368(a)(1)(D) describes as a reorganization a transfer by a corporation (transferor corporation) of all or a part of its assets to another corporation (transferee corporation) if, immediately after the transfer, the transferor corporation or one or more of its shareholders (including persons who were shareholders immediately before the transfer), or any combination thereof, is in control of the transferee corporation; but only if stock or securities of the controlled corporation are distributed in pursuance of a plan of reorganization in a transaction that qualifies under section 354, 355, or 356. Section 354(a)(1) provides that no gain or loss shall be recognized if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan of reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization. Section 354(b)(1)(B) provides that section 354(a)(1) shall not apply to an exchange in pursuance of a plan of reorganization described in section 368(a)(1)(D) unless the transferee corporation acquires substantially all of the assets of the transferor corporation, and the stock, securities, and other properties received by such transferor corporation, as well as the other properties of such transferor corporation, are distributed in pursuance of the plan of reorganization. Further, section 356 provides that if section 354 or 355 would apply to an exchange but for the fact that the property received in the exchange consists not only of property permitted by section 354 or 355 without the recognition of gain or loss but also of other property or money, then the gain, if any, to the recipient shall be recognized, but not in excess of the amount of money and fair market value of such other property. Accordingly, in the case of an acquisitive transaction, there can only be a distribution to which section 354 or 356 applies where the target shareholder(s) receive at least some property permitted to be received by section 354. Notwithstanding the requirement in section 368(a)(1)(D) that “stock or securities of the corporation to which the assets are transferred are distributed in a transaction which qualifies under section 354, 355, or 356”, the IRS and the courts have not required the actual issuance and distribution of stock and/or securities of the transferee corporation in circumstances where the same person or persons own all the stock of the transferor corporation and the transferee corporation. In such circumstances, the IRS and the courts have viewed an issuance of stock to be a “meaningless gesture” not mandated by sections 368(a)(1)(D) and 354(b). In Revenue Ruling 70-240, 1970-1 CB 81 (see § 601.601(d)(2) of this chapter), B owned all of the stock of both corporation X and corporation Y. X sold its operating assets to Y for $34x dollars, which represented the fair market value of X's assets. X had $33x of other assets, consisting generally of cash, accounts receivables, and investments in stocks and bonds, so that the assets sold by X to Y constituted approximately 51% of X's total assets. Following the sale to Y, X paid its debts, which amounted to $38x, and then liquidated, distributing $29x to B, while Y continued to conduct the business formerly operated by X. The IRS concluded that “although no actual shares of the stock of Y were distributed to B as a result of the transaction, B is treated as having received Y stock since he already owned all the stock of Y.” Accordingly, the IRS held that the sale of the operating assets by X to Y, followed by the liquidation and distribution of X's assets to B, resulted in a reorganization under section 368(a)(1)(D) and a distribution under section 356(a), despite the absence of an actual issuance and distribution of Y stock. When considering a similar transaction between two corporations owned in identical proportions by a husband and wife, the Tax Court concluded that there was in substance an exchange of stock which meets the requirements of section 354 and 356, and stated, “[t]he issuance of further stock would have been a meaningless gesture, and we cannot conclude that the statute requires such a vain act.” *James Armour, Inc.* v. *Commissioner* , 43 T.C. 295, 307 (1964). See also *Wilson* v. *Commissioner* , 46 T.C. 334 (1966). The IRS has also applied this meaningless gesture doctrine to circumstances where the transferor corporation and the transferee corporation are wholly owned by a single party directly or indirectly through subsidiaries, or as a result of family attribution pursuant to section 318(a)(1). However, the application of this meaningless gesture doctrine has generally been limited to situations in which there is identical shareholder identity and proportionality of interest in the transferor corporation and the transferee corporation. For example, in *Warsaw Photographic Associates, Inc.* v. *Commissioner* , 84 T.C. 21 (1985), there was no issuance of stock by the transferee corporation to the transferor corporation, and the stock ownership in the two corporations was not identical. On the basis of these facts, the Tax Court concluded that the distribution of stock would not be a mere formality and refused to apply the meaningless gesture doctrine. Accordingly, the transaction failed to qualify as a section 368(a)(1)(D) reorganization because there was no distribution of stock of the transferee corporation under sections 368(a)(1)(D) and 354(b)(1)(B). Explanation of Provisions These temporary regulations provide guidance regarding the circumstances in which the distribution requirement under sections 368(a)(1)(D) and 354(b)(1)(B) is deemed satisfied despite the fact that no stock and/or securities are actually issued in a transaction otherwise described in section 368(a)(1)(D). In cases where the same person or persons own, directly or indirectly, all of the stock of the transferor and transferee corporations in identical proportions, these temporary regulations provide that the distribution requirement under sections 368(a)(1)(D) and 354(b)(1)(B) will be treated as satisfied even though no stock is actually issued in the transaction. For purposes of determining whether the same person or persons own all of the stock of the transferor and transferee corporations in identical proportions, these temporary regulations provide that an individual and all members of his family that have a relationship described in section 318(a)(1) will be treated as one individual. The temporary regulations also provide that the distribution requirement under sections 368(a)(1)(D) and 354(b)(1)(B) will be treated as satisfied in the absence of any issuance of stock and/or securities where there is a *de minimis* variation in shareholder identity or proportionality of ownership in the transferor and transferee corporations. Further, stock described in section 1504(a)(4) is disregarded for purposes of determining whether the same person or persons own all of the stock of the transferor and transferee corporations in identical proportions. Under these temporary regulations, in each case where it is determined that the same person or persons own all of the stock of the transferor and transferee corporations in identical proportions, a nominal share of stock of the transferee corporation will be deemed issued in addition to the actual consideration exchanged in the transaction. The nominal share of stock in the transferee corporation will then be deemed distributed by the transferor corporation to its shareholders and, in appropriate circumstances, further transferred to the extent necessary to reflect the actual ownership of the transferor and transferee corporations. These temporary regulations are being issued in response to requests for immediate guidance regarding whether transactions otherwise described in section 368(a)(1)(D) qualify as reorganizations where no stock and/or securities of the transferee corporation are actually issued in the transaction. The IRS and Treasury Department currently are undertaking a broad study of issues related to acquisitive reorganizations, including issues addressed by these temporary regulations. The IRS and Treasury Department are issuing these temporary regulations in order to provide certainty for taxpayers while these issues are under study. The IRS and Treasury Department believe that these temporary regulations are a reasonable interpretation of section 368(a)(1)(D) and section 354(b)(1)(B) given the history of those provisions and the manner in which they have previously been interpreted by the courts and the IRS. However, no inference should be drawn from these temporary regulations regarding the law prior to the effective date of these temporary regulations. In the Proposed Rules section in this issue of the **Federal Register** , the IRS and Treasury Department are requesting comments on several issues relating to acquisitive reorganizations described in section 368(a)(1)(D). In addition, the IRS and Treasury Department note that these temporary regulations do not expressly implement Prop. Reg. § 1.368-1(f)(4) (FR 70, 11903-11912), which provides that there must be an exchange of net value except in the case of a transaction that would otherwise qualify as a reorganization described in section 368(a)(1)(D), provided that the fair market value of the property transferred to the acquiring corporation by the target corporation exceeds the amount of liabilities of the target corporation immediately before the exchange (including any liabilities cancelled, extinguished, or assumed in connection with the exchange), and the fair market value of the assets of the acquiring corporation equals or exceeds the amount of its liabilities immediately after the exchange. The solvency requirement remains the IRS's and Treasury Department's proposal but the IRS and Treasury Department continue to consider whether this solvency requirement should be applied to the transactions described in these temporary regulations. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. For the applicability of the Regulatory Flexibility Act, please refer to the cross-reference notice of proposed rulemaking published elsewhere in this **Federal Register** . Pursuant to section 7805(f) of the Internal Revenue Code, these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. Drafting Information The principal author of these regulations is Bruce A. Decker of the Office of the Associate Chief Counsel (Corporate). List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.368-2 is amended by adding paragraph

(l)to read as follows: § 1.368-2 Definition of terms.

(l)[Reserved]. For further guidance, see § 1.368-2T(l). **Par. 3.** Section 1.368-2T is added to read as follows: § 1.368-2T Definition of terms (temporary).

(a)through

(k)[Reserved]. For further guidance, see § 1.368-2(a) through (k).

(l)*Certain transactions treated as reorganizations described in section 368(a)(1)(D)* —(1) *General rule.* In order to qualify as a reorganization under section 368(a)(1)(D), a corporation (transferor corporation) must transfer all or part of its assets to another corporation (transferee corporation) and immediately after the transfer the transferor corporation, or one or more of its shareholders (including persons who were shareholders immediately before the transfer), or any combination thereof, must be in control of the transferee corporation; but only if, in pursuance of the plan, stock or securities of the transferee are distributed in a transaction which qualifies under section 354, 355, or 356.

(2)*Distribution requirement* —(i) *In general.* For purposes of paragraph (l)(1) of this section, a transaction otherwise described in section 368(a)(1)(D) will be treated as satisfying the requirements of sections 368(a)(1)(D) and 354(b)(1)(B) notwithstanding that there is no actual issuance of stock and/or securities of the transferee corporation if the same person or persons own, directly or indirectly, all of the stock of the transferor and transferee corporations in identical proportions. In such cases, the transferee corporation will be deemed to issue a nominal share of stock to the transferor corporation in addition to the actual consideration exchanged for the transferor corporation's assets. The nominal share of stock in the transferee corporation will then be deemed distributed by the transferor corporation to its shareholders and, where appropriate, further transferred through chains of ownership to the extent necessary to reflect the actual ownership of the transferor and transferee corporations.

(ii)*Attribution.* For purposes of paragraph (l)(2)(i) of this section, ownership of stock will be determined by applying the principles of section 318(a)(2) without regard to the 50 percent limitation in section 318(a)(2)(C). In addition, an individual and all members of his family described in section 318(a)(1) shall be treated as one individual.

(iii)*De minimis variations in ownership and certain stock not taken into account.* For purposes of paragraph (l)(2)(i) of this section, the same person or persons will be treated as owning, directly or indirectly, all of the stock of the transferor and transferee corporations in identical proportions notwithstanding the fact that there is a *de minimis* variation in shareholder identity or proportionality of ownership. Additionally, for purposes of paragraph (l)(2)(i) of this section, stock described in section 1504(a)(4) is not taken into account.

(3)*Examples.* The following examples illustrate the principles of paragraph

(l)of this section. For purposes of these examples, each of A, B, C, and D is an individual, T is the acquired corporation, S is the acquiring corporation, P is the parent corporation, and each of S1, S2, S3, and S4 is a direct or indirect subsidiary of P. Further, all of the requirements of section 368(a)(1)(D) other than the requirement that stock or securities be distributed in a transaction to which section 354 or 356 applies are satisfied. The examples are as follows: *Example 1.* A owns all the stock of T and S. The T stock has a fair market value of $100x. T sells all of its assets to S in exchange for $100x of cash and immediately liquidates. Because there is complete shareholder identity and proportionality of ownership in T and S, under paragraph (l)(2)(i) of this section, the requirements of sections 368(a)(1)(D) and 354(b)(1)(B) are treated as satisfied notwithstanding the fact that no S stock is issued. Pursuant to paragraph (l)(2)(i) of this section, S will be deemed to issue a nominal share of S stock to T in addition to the $100x of cash actually exchanged for the T assets, and T will be deemed to distribute all such consideration to A. The transaction qualifies as a reorganization described in section 368(a)(1)(D). *Example 2.* The facts are the same as in *Example 1* except that C, A's son, owns all of the stock of S. Under paragraph (l)(2)(ii) of this section, A and C are treated as one individual. Accordingly, there is complete shareholder identity and proportionality of ownership in T and S. Therefore, under paragraph (l)(2)(i) of this section, the requirements of sections 368(a)(1)(D) and 354(b)(1)(B) are treated as satisfied notwithstanding the fact that no S stock is issued. Pursuant to paragraph (l)(2)(i) of this section, S will be deemed to issue a nominal share of S stock to T in addition to the $100x of cash actually exchanged for the T assets, and T will be deemed to distribute all such consideration to A. A will be deemed to transfer the nominal share of S stock to C. The transaction qualifies as a reorganization described in section 368(a)(1)(D). *Example 3.* P owns all of the stock of S1 and S2. S1 owns all of the stock of S3, which owns all of the stock of T. S2 owns all of the stock of S4, which owns all of the stock of S. The T stock has a fair market value of $70x. T sells all of its assets to S in exchange for $70x of cash and immediately liquidates. Under paragraph (l)(2)(ii) of this section, there is indirect, complete shareholder identity and proportionality of ownership in T and S. Accordingly, the requirements of sections 368(a)(1)(D) and 354(b)(1)(B) are treated as satisfied notwithstanding the fact that no S stock is issued. Pursuant to paragraph (l)(2)(i) of this section, S will be deemed to issue a nominal share of S stock to T in addition to the $70x of cash actually exchanged for the T assets, and T will be deemed to distribute all such consideration to S3. S3 will be deemed to distribute the nominal share of S stock to S1, which, in turn, will be deemed to distribute the nominal share of S stock to P. P will be deemed to transfer the nominal share of S stock to S2, which, in turn, will be deemed to transfer such share of S stock to S4. The transaction qualifies as a reorganization described in section 368(a)(1)(D). *Example 4.* A, B, and C own 34%, 33%, and 33%, respectively, of the stock of T. The T stock has a fair market value of $100x. A, B, and C each own 33% of the stock of S. D owns the remaining 1% of the stock of S. T sells all of its assets to S in exchange for $100x of cash and immediately liquidates. For purposes of determining whether the distribution requirement of sections 368(a)(1)(D) and 354(b)(1)(B) is met, under paragraph (l)(2)(iii) of this section, D's ownership of a *de minimis* amount of stock of S is disregarded and the transaction is treated as if there is complete shareholder identity and proportionality of ownership in T and S. Because there is complete shareholder identity and proportionality of ownership in T and S, under paragraph (l)(2)(i) of this section, the requirements of sections 368(a)(1)(D) and 354(b)(1)(B) are treated as satisfied notwithstanding the fact that no S stock is issued. Pursuant to paragraph (l)(2)(i) of this section, S will be deemed to issue a nominal share of S stock to T in addition to the $100x of cash actually exchanged for the T assets, T will be deemed to distribute all such consideration to A, B, and C, and the nominal S stock will be deemed transferred among the S shareholders to the extent necessary to reflect their actual ownership of S. The transaction qualifies as a reorganization described in section 368(a)(1)(D). *Example 5.* The facts are the same as in *Example 4* except that A, B, and C own 34%, 33%, and 33%, respectively, of the common stock of T and S. D owns preferred stock in S described in section 1504(a)(4). For purposes of determining whether the distribution requirement of sections 368(a)(1)(D) and 354(b)(1)(B) is met, under paragraph (l)(2)(iii) of this section, D's ownership of S stock described in section 1504(a)(4) is ignored and the transaction is treated as if there is complete shareholder identity and proportionality of ownership in T and S. Because there is complete shareholder identity and proportionality of ownership in T and S, under paragraph (l)(2)(i) of this section, the requirements of sections 368(a)(1)(D) and 354(b)(1)(B) are treated as satisfied notwithstanding the fact that no S stock is issued. Pursuant to paragraph (l)(2)(i) of this section, S will be deemed to issue a nominal share of S stock to T in addition to the $100x of cash actually exchanged for the T assets, and T will be deemed to distribute all such consideration to A, B, and C. The transaction qualifies as a reorganization described in section 368(a)(1)(D). *Example 6.* A and B each own 50% of the stock of T. The T stock has a fair market value of $100x. B and C own 90% and 10%, respectively, of the stock of S. T sells all of its assets to S in exchange for $100x of cash and immediately liquidates. Because complete shareholder identity and proportionality of ownership in T and S does not exist, paragraph (l)(2)(i) of this section does not apply. The requirements of sections 368(a)(1)(D) and 354(b)(1)(B) are not satisfied, and the transaction does not qualify as a reorganization described in section 368(a)(1)(D).

(4)*Effective date* —(i) *In general.* This section applies to transactions occurring on or after March 19, 2007, except that they do not apply to any transaction occurring pursuant to a written agreement which is binding before December 19, 2006, and at all times thereafter. A taxpayer may apply the provisions of these temporary regulations to transactions occurring before March 19, 2007. However, the transferor corporation, the transferee corporation, any direct or indirect transferee of transferred basis property from either of the foregoing, and any shareholder of the transferor or transferee corporation may not apply the provisions of these temporary regulations unless all such taxpayers apply the provisions of the temporary regulations.

(ii)*Expiration.* This section expires on or before December 18, 2009. Mark E. Matthews, Deputy Commissioner for Services and Enforcement. Approved: December 6, 2006. Eric Solomon, Acting Deputy Assistant Secretary of the Treasury, (Tax Policy). [FR Doc. E6-21565 Filed 12-18-06; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9297] RIN 1545-BG02 Residence Rules Involving U.S. Possessions; Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correction to final regulations. SUMMARY: This document contains corrections to final regulations that were published in the **Federal Register** on Tuesday, November 14, 2006 (71 FR 66232) relating to rules for determining bona fide residency in the following U.S. territories: American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the United States Virgin Islands. DATES: These corrections are effective November 14, 2006. FOR FURTHER INFORMATION CONTACT: David Varley,

(202)435-5262 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The final regulations (TD 9297) that are the subject of these corrections are under section 937 of the Internal Revenue Code. Need for Correction As published, the final regulations (TD 9297) contain errors that may be misleading and are in need of clarification. Correction of Publication Accordingly, the final regulations (TD 9297) that were the subject of FR Doc. E6-19135 are corrected as follows: 1. On page 66232, column 2, in the preamble, under the “Title Headings”, the language [TD[9297]]” is corrected to read “[TD 9297].” 2. On page 66232, column 2, in the preamble, under the paragraph heading, “Background”, first paragraph of the column, lines 1 through 5 from the bottom of the paragraph, the language “section 937(a) dealing with determining residency in a territory, adopting with amendments the proposed regulations (specifically, § 1.937-1 and 1.881-5T(f)(4))” is corrected to read “section 937(a) concerning the determination of residency in a territory and adopting with amendments the proposed regulations (specifically, §§ 1.937-1 and 1.881-5(f)(4)).” 3. On page 66232, column 3, in the preamble, under the paragraph heading, “Background”, second paragraph of the column, line 8 from the bottom of the paragraph, the language “relevant territory for the purposes of the” is corrected to read “relevant territory for purposes of the”. 4. On page 66232, column 3, in the preamble, under the paragraph heading, “Background”, third paragraph of the column, line 10 from the bottom of the paragraph, the language “presence test of section 7701(b) on the” is corrected to read “presence test of section 7701(b) to determine bona fide residency in a territory on the”. 5. On page 66233, column 1, in the preamble, under the paragraph heading, “Explanation of Provisions”, first paragraph of the column, lines 12 and 13, the language, “for business pursuits, have concluded nonetheless that such a rule would be” is corrected to read “for business pursuits but have concluded that such a rule would be”. 6. On page 66233, column 1, in the preamble, under the paragraph heading, “Explanation of Provisions”, first paragraph, line 4 from the bottom of the paragraph, the language “the final regulations, provide sufficient” is corrected to read “these final regulations, provide sufficient”. 7. On page 66233, column 1, in the preamble, under the paragraph heading, “Explanation of Provisions”, second paragraph, lines 15 through 19 from the bottom of the paragraph, the language “States, even though the individual is not present in the United States, and will treat such days as days of presence in the relevant territory. In addition, the regulations provide for relief in case” is corrected to read “States, even if the individual is physically present in the United States, and will treat such days as days of presence in the relevant territory. In addition, the regulations provide for similar relief in case”. 8. On page 66233, column 2, in the preamble, under the paragraph heading, “Explanation of Provisions”, third paragraph of the column, lines 8 and 9, the language “accommodate the realities of business cycles and life in the territories. The IRS” is corrected to read “accommodate the reality that business cycles and life in the territories may require more time away from the territories in some years than in others. The IRS”. La Nita VanDyke, Chief, Publications and Regulations Branch, Legal Processing Division, Office of Associate Chief Counsel (Procedure and Administration). [FR Doc. E6-21566 Filed 12-18-06; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF AGRICULTURE Forest Service 36 CFR Part 242 DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 100 Subsistence Management Regulations for Public Lands in Alaska, Subpart D; Seasonal Adjustments—Tustumena Lake AGENCIES: Forest Service, USDA; Fish and Wildlife Service, Interior. ACTION: Seasonal adjustment. SUMMARY: This provides notice of the Federal Subsistence Board's action to provide winter subsistence harvest opportunities for lake trout, Dolly Varden, and rainbow trout in Tustumena Lake. The fishing opportunity in Tustumena Lake provides an exception to the Subsistence Management Regulations for Public Lands in Alaska, published in the **Federal Register** on March 29, 2006. Those regulations established seasons, harvest limits, methods, and means relating to the taking of fish and shellfish for subsistence uses during the 2006 regulatory year. DATES: This Board action is effective November 17, 2006, through March 31, 2007. FOR FURTHER INFORMATION CONTACT: Peter J. Probasco, Office of Subsistence Management, U.S. Fish and Wildlife Service, telephone

(907)786-3888. For questions specific to National Forest System lands, contact Steve Kessler, Subsistence Program Manager, USDA—Forest Service, Alaska Region, telephone

(907)786-3592. SUPPLEMENTARY INFORMATION: Background Title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126) requires that the Secretary of the Interior and the Secretary of Agriculture (Secretaries) implement a joint program to grant a preference for subsistence uses of fish and wildlife resources on public lands in Alaska, unless the State of Alaska enacts and implements laws of general applicability that are consistent with ANILCA and that provide for the subsistence definition, preference, and participation specified in Sections 803, 804, and 805 of ANILCA. In December 1989, the Alaska Supreme Court ruled that the rural preference in the State subsistence statute violated the Alaska Constitution and, therefore, negated State compliance with ANILCA. The Department of the Interior and the Department of Agriculture (Departments) assumed, on July 1, 1990, responsibility for implementation of title VIII of ANILCA on public lands. The Departments administer title VIII through regulations at title 50, part 100 and title 36, part 242 of the Code of Federal Regulations (CFR). Consistent with subparts A, B, and C of these regulations, as revised January 8, 1999 (64 FR 1276), the Departments established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board's composition includes a Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture; the Alaska Regional Director, U.S. Fish and Wildlife Service; the Alaska Regional Director, National Park Service; the Alaska State Director, Bureau of Land Management; the Alaska Regional Director, Bureau of Indian Affairs; and the Alaska Regional Forester, USDA Forest Service. Through the Board, these agencies participate in the development of regulations for subparts A, B, and C, which establish the program structure and determine which Alaska residents are eligible to take specific species for subsistence uses, and the annual subpart D regulations, which establish seasons, harvest limits, and methods and means for subsistence take of species in specific areas. Subpart D regulations for the 2006 fishing seasons, harvest limits, and methods and means were published on March 29, 2006 (71 FR 15569). Because this action relates to public lands managed by an agency or agencies in both the Departments of Agriculture and the Interior, identical closures and adjustments would apply to 36 CFR part 242 and 50 CFR part 100. The Alaska Department of Fish and Game (ADF&G), under the direction of the Alaska Board of Fisheries (BOF), manages sport, commercial, personal use, and State subsistence harvest on all lands and waters throughout Alaska. However, on Federal lands and waters, the Federal Subsistence Board implements a subsistence priority for rural residents as provided by title VIII of ANILCA. In providing this priority, the Board may, when necessary, preempt State harvest regulations for fish or wildlife on Federal lands and waters. Current Management Actions These actions are authorized and in accordance with 50 CFR 100.19(d-e) and 36 CFR 242.19(d-e). Tustumena Lake The Ninilchik Traditional Council requested a special winter subsistence fishery through the ice in Tustumena Lake. The Southcentral Alaska Regional Advisory Council recommended adopting this seasonal adjustment with minor modifications during their fall 2006 meeting. The Board met in public work session on November 16-17, 2006, during which it took up and approved this request with modifications. The resulting seasonal adjustment will expire March 31, 2007. The season adjustment provides for the take of fish in Tustumena Lake using a single gillnet not to exceed 10 fathoms fished under the ice or jigging gear used through the ice, under authority of a Federal subsistence fishing permit. The total annual harvest quota for this fishery is 200 lake trout, 200 rainbow trout, and 500 Dolly Varden. Gillnets are not allowed within 1/4 mile of any tributary or outlet stream of Tustumena Lake. All harvests must be reported to the Federal fisheries manager within 72 hours upon leaving the fishing location. Gill nets must be checked at least once in every 48-hour period. Incidentally caught fish may be retained and must be recorded on the permit. When a harvest quota for any of the three species is reached, the gillnet fishery will be closed. This fishery, along with ongoing existing fisheries, is within recommended sustainable harvest guidelines based upon currently available information. Conformance With Statutory and Regulatory Authorities Administrative Procedure Act The Board finds that additional public notice and comment requirements under the Administrative Procedure Act

(APA)for this adjustment is impracticable, unnecessary, and contrary to the public interest. Lack of appropriate and immediate measures could adversely impact subsistence opportunities for rural Alaskans and would generally fail to serve the overall public interest. Therefore, the Board finds good cause pursuant to 5 U.S.C. 553(b)(3)(B) to waive additional public notice and comment procedures prior to implementation of this action and pursuant to 5 U.S.C. 553(d)(3) to make this rule effective as indicated in the DATES section. National Environmental Policy Act Compliance A Final Environmental Impact Statement

(FEIS)was published on February 28, 1992, and a Record of Decision on Subsistence Management for Federal Public Lands in Alaska

(ROD)was signed April 6, 1992. The final rule for Subsistence Management Regulations for Public Lands in Alaska, subparts A, B, and C (57 FR 22940, published May 29, 1992), implemented the Federal Subsistence Management Program and included a framework for an annual cycle for subsistence hunting and fishing regulations. An environmental assessment related to expansion of jurisdiction for fisheries was prepared in November 1998. A final rule that redefined the jurisdiction of the Federal Subsistence Management Program to include waters subject to the subsistence priority was published on January 8, 1999 (64 FR 1276). Section 810 of ANILCA The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. A section 810 analysis was completed as part of the FEIS process. The final section 810 analysis determination appeared in the April 6, 1992, ROD, which concluded that the Federal Subsistence Management Program, under Alternative IV with an annual process for setting hunting and fishing regulations, may have some local impacts on subsistence uses, but the program is not likely to significantly restrict subsistence uses. Paperwork Reduction Act The information collection requirements contained in this seasonal adjustment have been approved by the Office of Management and Budget

(OMB)under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ) and assigned OMB control number 1018-0075, which expires October 31, 2009. Federal Agencies may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Other Requirements This seasonal adjustment has been exempted from OMB review under Executive Order 12866. The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 *et seq.* ) requires preparation of flexibility analyses for rules that will have a significant effect on a substantial number of small entities, which include small businesses, organizations, or governmental jurisdictions. The exact number of businesses and the amount of trade that will result from this Federal land-related activity is unknown. The aggregate effect is an insignificant economic effect (both positive and negative) on a small number of small entities supporting subsistence activities, such as boat, fishing gear, and gasoline dealers. The number of small entities affected is unknown; however, the effects will be seasonally and geographically limited in nature and will likely not be significant. The Departments certify that the adjustment will not have a significant economic effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. Under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 *et seq.* ), this rule is not a major rule. It does not have an effect on the economy of $100 million or more, will not cause a major increase in costs or prices for consumers, and does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. Title VIII of ANILCA requires the Secretaries to administer a subsistence preference on public lands. The scope of this program is limited by definition to certain public lands. Likewise, the adjustment has no potential takings of private property implications as defined by Executive Order 12630. The Service has determined and certifies under the Unfunded Mandates Reform Act, 2 U.S.C. 1502 *et seq.* , that the adjustment will not impose a cost of $100 million or more in any given year on local or State governments or private entities. The implementation is by Federal agencies, and no cost is involved to any State or local entities or Tribal governments. The Service has determined that the adjustment meets the applicable standards provided in Sections 3(a) and 3(b)(2) of Executive Order 12988, regarding civil justice reform. In accordance with Executive Order 13132, the adjustment does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Title VIII of ANILCA precludes the State from exercising subsistence management authority over fish and wildlife resources on Federal lands. Cooperative salmon run assessment efforts with ADF&G will continue. In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), Executive Order 13175, and 512 DM 2, we have evaluated possible effects on Federally recognized Indian tribes and have determined that there are no significant direct effects. The Bureau of Indian Affairs is a participating agency in this rulemaking. On May 18, 2001, the President issued Executive Order 13211 on regulations that significantly affect energy supply, distribution, or use. This Executive Order requires agencies to prepare Statements of Energy Effects when undertaking certain actions. As this action is not expected to significantly affect energy supply, distribution, or use, it is not a significant energy action and no Statement of Energy Effects is required. Drafting Information Bill Knauer drafted this document under the guidance of Peter J. Probasco, of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Chuck Ardizzone, Alaska State Office, Bureau of Land Management; Jerry Berg, Alaska Regional Office, U.S. Fish and Wildlife Service; Nancy Swanton, Alaska Regional Office, National Park Service; Dr. Glenn Chen, Alaska Regional Office, Bureau of Indian Affairs; and Steve Kessler, USDA-Forest Service, provided additional guidance. Authority: 16 U.S.C. 3, 472, 551, 668dd, 3101-3126; 18 U.S.C. 3551-3586; 43 U.S.C. 1733. Dated: December 1, 2006. Peter J. Probasco, Acting Chair, Federal Subsistence Board. Dated: December 1, 2006. Steve Kessler, Subsistence Program Leader, USDA-Forest Service. [FR Doc. 06-9761 Filed 12-18-06; 8:45 am]

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