Rules and Regulations. Final rule

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BILLING CODE 3410-05-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-27112; Directorate Identifier 2001-NE-49-AD; Amendment 39-14926; AD 2007-03-15] RIN 2120-AA64 Airworthiness Directives; CFM International CFM56-5 and -5B Series Turbofan Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive

(AD)for CFM International CFM56-5 and -5B series turbofan engines. That AD requires exhaust gas temperature

(EGT)harness replacement or the establishment of an EGT baseline and trend monitoring. That AD also requires replacement, if necessary, of certain EGT harnesses and EGT couplings as soon as a slow and continuous EGT drift downward is noticed after the effective date of that AD. This AD requires the same actions but for an increased population of affected EGT harnesses. This AD results from CFM International adding subsequently certified engine models to the list of engines that could have affected harnesses installed. We are issuing this AD to prevent unexpected deterioration of critical rotating engine parts due to higher than desired engine operating EGTs. DATES: This AD becomes effective March 19, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of March 19, 2007. ADDRESSES: You can get the service information identified in this AD from CFM International, Technical Publications Department, 1 Neumann Way, Cincinnati, OH 45215; telephone

(513)552-2800; fax

(513)552-2816. 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: James Rosa, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone

(781)238-7152; fax

(781)238-7199; e-mail: *james.rosa@faa.gov.* SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39 with a proposed AD. The proposed AD applies to CFM International CFM56-5 and -5B series turbofan engines. We published the proposed AD in the **Federal Register** on June 16, 2006 (71 FR 34852). That action proposed to require, for an increased population of affected EGT harnesses: • EGT harness replacement or the establishment of an EGT baseline and trend monitoring; and • Replacement, if necessary, of certain EGT harnesses and EGT couplings as soon as a slow and continuous EGT drift downward is noticed after the effective date of that AD. 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

(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 39-13020 (68 FR 3171, January 23, 2003) and by adding a new airworthiness directive, Amendment 39-14926, to read as follows: **2007-03-15 CFM International:** Amendment 39-14926; Docket No. FAA-2007-27112; Directorate Identifier 2001-NE-49-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective March 19, 2007. Affected ADs

(b)This AD supersedes AD 2003-02-04, Amendment 39-13020. Applicability

(c)This AD applies to CFM International CFM56-5 and -5B series turbofan engines:

(1)With an exhaust gas temperature

(EGT)upper harness part number (P/N) CA170-00, with a serial number (SN):

(i)Listed in Table 1, Table 4, or Table 5 of CFM56 Service Bulletin

(SB)No. CFM56-5B S/B 77-0008, Revision 3, dated April 4, 2005, or

(ii)Listed in Table 1 or Table 4 of CFM56 SB No. CFM56-5 S/B 77-0020, Revision 3, dated April 4, 2005.

(2)With an EGT lower harness P/N CA171-00, with a SN:

(i)Listed in Table 2, Table 4, or Table 5 of CFM56 SB No. CFM56-5B S/B 77-0008, Revision 3, dated April 4, 2005; or

(ii)Listed in Table 2 or Table 4 of CFM56 SB No. CFM56-5 S/B 77-0020, Revision 3, dated April 4, 2005.

(3)With an EGT coupling P/N CA172-02 with a SN:

(i)Listed in Table 3, Table 4, or Table 5 of CFM56 Service Bulletin

(SB)No. CFM56-5B S/B 77-0008, Revision 3, dated April 4, 2005, or

(ii)Listed in Table 3 or Table 4 of CFM56 SB No. CFM56-5 S/B 77-0020, Revision 3, dated April 4, 2005.

(4)These engines are installed on, but not limited to Airbus Industrie A318, A319, A320, and A321 airplanes. Unsafe Condition

(d)This AD results from CFM International adding subsequently certified engine models, CFM56-5B3/P1, CFM56-5B3/2P1, CFM56-5B4/P1, and CFM56-5B4/2P1, to the list of engines that could have affected harnesses installed, and increasing the population of affected EGT harnesses. We are issuing this AD to prevent unexpected deterioration of critical rotating engine parts due to higher than desired engine operating EGTs. 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.

(f)If an EGT harness or EGT coupling has a serial number that is followed by the letter “W”, no further action is required for that part.

(g)For affected EGT harnesses and EGT couplings identified using paragraph

(c)of this AD, with fewer than 3,000 engine flight hours-since-installation, do the following:

(1)Replace affected EGT harnesses and EGT couplings, not being trend monitored, with serviceable parts within 500 flight hours after the effective date of this AD; or

(2)After the effective date of this AD:

(i)Review the smooth data EGT trend via the System for Analysis of Gas Turbine Engines (SAGE), or equivalent, since the affected components were first installed on the current engine.

(ii)Continue this trend monitoring for the affected EGT harnesses and EGT couplings to ensure that the system does not show a minimum of 30 °C downward (i.e. cooler) indication, or more, without a corresponding change in other associated engine parameters such as N1 (LPT rotor speed), N2 (HPT rotor speed), and fuel flow.

(iii)Provided that there is sufficient, actual EGT margin to do so, replace the EGT harnesses and EGT couplings within 100 flight hours after they have been determined to be defective.

(iv)Continue to monitor the EGT indications for 3,000 engine flight hours since the first installation on the current engine. Terminating Action

(h)Any of the following three conditions is terminating action for the trend monitoring requirements specified in paragraphs (g)(2)(i) through (g)(2)(iv) of this AD:

(1)Replacing an EGT harness and EGT coupling with a serviceable part, or

(2)Replacing an EGT harness and EGT coupling with an EGT harness and EGT coupling that has a letter “W” following the SN, or

(3)Accumulating 3,000 engine flight hours on an EGT harness and EGT coupling. 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)Airworthiness directive No. F-2003-001 R2, dated June 8, 2005, which is from the Direction Generale de L'Aviation Civile airworthiness authority for France, also addresses the subject of this AD.

(k)Contact James Rosa, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone

(781)238-7152; fax

(781)238-7199; e-mail: *james.rosa@faa.gov* for more information about this AD. Material Incorporated by Reference

(l)You must use the CFM56 Service Bulletin Tables specified in the compliance of this AD, to determine applicability to this AD. The following Table 1 lists the Service Bulletins. The Director of the Federal Register approved the incorporation by reference of the documents listed in Table 1 of this AD in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact CFM International, Technical Publications Department, 1 Neumann Way, Cincinnati, OH 45215; telephone

(513)552-2800; fax

(513)552-2816, 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* . Table 1.—Incorporation by Reference CFM56 Service Bulletin No. Page Revision Date CFM56-5B S/B 77-0008 All 3 April 4, 2005. Total Pages: 34 CFM56-5 S/B 77-0020 All 3 April 4, 2005. Total Pages: 16 Issued in Burlington, Massachusetts, on January 31, 2007. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-2068 Filed 2-9-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-26570; Directorate Identifier 2006-NE-39-AD; Amendment 39-14931; AD 2007-03-20] RIN 2120-AA64 Airworthiness Directives; Turbomeca S.A. Makila 1A and 1A1 Turboshaft Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive

(AD)for the products listed above. This AD results from mandatory continuing airworthiness information

(MCAI)issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: The back-up mode can be activated by an electrostatic discharge or by a malfunction of the collective pitch signal. The two engines fitted on the same helicopter can therefore be frozen in this back-up position at 85% N1. Freezing both engines in the back-up mode can lead to an inability to continue safe flight and forced landing. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective March 19, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of March 19, 2007. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC. FOR FURTHER INFORMATION CONTACT: Christopher Spinney, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone

(781)238-7175; fax

(781)238-7199. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. This streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S. certificated products. This AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Discussion We issued a notice of proposed rulemaking

(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on December 19, 2006 (71 FR 75896). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: The control system of the engines covered by this Airworthiness Directive includes an electrical back-up mode at 85% N1 (gas generator speed) activated on the detection of certain occurrences affecting engine control. The activation of the back-up mode is irreversible and freezes the engine at 85% N1. An analysis of reported occurrences in service showed that the back-up mode can be activated by an electrostatic discharge or by a malfunction of the collective pitch signal. The two engines fitted on the same helicopter can therefore be frozen in this back-up position at 85% N1. The present Airworthiness Directive therefore imposes the application of modification TU241 on the LPG board of the Makila 1A and 1A1 ECU, which reduces the aforementioned risk by changing the conditions in which the engines switch to and are maintained in the 85% NG back-up mode. Freezing both engines in the back-up mode can lead to an inability to continue safe flight and forced landing. You may obtain further information by examining the MCAI in the AD docket. Comments We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public. Conclusion We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are described in a separate paragraph of the AD, and take precedence over the actions copied from the MCAI. Differences Between This AD and the Proposed AD In paragraph

(e)of the proposed AD, published December 19, 2006, we state “Unless already done, before January 31, 2007, apply the modification TU 241 by replacing the LPG board of the ECU using Turbomeca Mandatory Service Bulletin No. 298 73 0241, dated April 5, 2006.” Because that compliance date will have past before this AD becomes effective, we have changed paragraph

(e)to read, “Unless already done, within 30 days after the effective date of this AD, apply the modification TU 241 by replacing the LPG board of the ECU using Turbomeca Mandatory Service Bulletin No. 298 73 0241, dated April 5, 2006.” Costs of Compliance Based on the service information, we estimate that this AD will affect about five products of U.S. registry. We also estimate that it will take about 1.0 work-hour per product to comply with this AD. The average labor rate is $80 per work-hour. Required parts will cost about $3,500 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the AD on U.S. operators to be $17,900, or $3,580 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this AD: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under 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 regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone

(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **2007-03-20 Turbomeca S.A.:** Amendment 39-14931. Docket No. FAA-2006-26570; Directorate Identifier 2006-NE-39-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective March 19, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Turbomeca Makila 1A and 1A1 turboshaft engines. These engines are installed on, but not limited to Eurocopter AS 332 Super Puma helicopters. Reason

(d)European Aviation Safety Agency

(EASA)AD No. 2006-0070, dated March 30, 2006, states: The control system of the engines covered by this Airworthiness Directive includes an electrical back-up mode at 85% N1 (gas generator speed) activated on the detection of certain occurrences affecting engine control. The activation of the back-up mode is irreversible and freezes the engine at 85% N1. An analysis of reported occurrences in service showed that the back-up mode can be activated by an electrostatic discharge or by a malfunction of the collective pitch signal. The two engines fitted on the same helicopter can therefore be frozen in this back-up position at 85% N1. The present Airworthiness Directive therefore imposes the application of modification TU241 on the LPG board of the Makila 1A and 1A1 ECU, which reduces the aforementioned risk by changing the conditions in which the engines switch to and are maintained in the 85% NG back-up mode. Freezing both engines in the back-up mode can lead to an inability to continue safe flight and forced landing. Actions and Compliance

(e)Unless already done, within 15 days after the effective date of this AD, apply the modification TU 241 by replacing the LPG board of the ECU using Turbomeca Mandatory Service Bulletin No. 298 73 0241, dated April 5, 2006. FAA AD Differences

(f)None. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)Alternative Methods of Compliance (AMOCs): The Manager, Engine Certification Office, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.

(2)Airworthy Product: For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

(3)Reporting Requirements: For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Contact Christopher Spinney, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone

(781)238-7175; fax

(781)238-7199; e-mail: *christopher.spinney@faa.gov,* for more information about this AD.

(i)Refer to MCAI EASA Airworthiness Directive 2006-0070, dated March 30, 2006, and Turbomeca Mandatory Service Bulletin No. 298 73 0241, dated April 5, 2006, for related information. Material Incorporated by Reference

(j)You must use Turbomeca Mandatory Service Bulletin No. 298 73 0241, dated April 5, 2006, to do the actions required by this AD, unless the AD specifies otherwise.

(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.

(2)For service information identified in this AD, contact Turbomeca, 40220 Tarnos, France; telephone 33 05 59 74 40 00, fax 33 05 59 74 45 15.

(3)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 January 31, 2007. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-2069 Filed 2-9-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-25272; Directorate Identifier 2006-NE-16-AD; Amendment 39-14924; AD 2007-03-13] RIN 2120-AA64 Airworthiness Directives; Rolls-Royce Deutschland Ltd & Co KG (formerly Rolls-Royce plc) Dart 528, 529, 532, 535, 542, and 552 Series Turboprop Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive

(AD)for Rolls-Royce Deutschland Ltd & Co KG (formerly Rolls-Royce plc)

(RRD)Dart 528, 529, 532, 535, 542, and 552 series turboprop engines. This AD would require repetitive inspections of high pressure turbine

(HPT)blade platforms and shrouds, and reworking the engines if the inspections reveal excessive gaps between blade shrouds. This AD results from reports of HPT disk rim failures. We are issuing this AD to prevent HPT disk rim failures resulting in the release of portions of the HPT disk, uncontained engine failure, and damage to the airplane. DATES: This AD becomes effective March 19, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of March 19, 2007. ADDRESSES: You can get the service information identified in this AD from Rolls-Royce Deutschland Ltd & Co KG, Eschenweg 11, D-15827 Dahlewitz, Germany; telephone 49

(0)33-7086-1768; fax 49

(0)33-7086-3356. 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: Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone

(781)238-7747; fax

(781)238-7199. SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39 with a proposed AD. The proposed AD applies to RRD Dart 528, 529, 532, 535, 542, and 552 series turboprop engines. We published the proposed AD in the **Federal Register** on September 12, 2006 (71 FR 53610). That action proposed to require repetitive inspections of HPT blade platforms and shrouds, and reworking the engines if the inspections reveal excessive gaps between blade shrouds. 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 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 have considered the comment received. Incorporate Service Bulletin By Reference The Modification & Replacement Parts Association requests that we incorporate the service bulletin by reference. We agree that the material should be incorporated by reference. We did so in the AD. The commenter also requests that we post service bulletins on the DMS. We are currently reviewing issues surrounding the posting of this material on the DMS as part of an AD docket. Once we have thoroughly examined all aspects of this issue and have made a final determination, we will decide whether our current practice of not posting service bulletins on the DMS should be changed. The final rule remains unchanged. Changes to the AD We have made two changes to the AD. In the proposed AD, we mistakenly referred to the RRD Dart 528, 529, 532, 535, 542, and 552 series turboprop engines as turbofan engines. They are turboprop engines and we corrected the final rule accordingly. Additionally, to clarify paragraph (f)(3), we added the words “rework to DRS 611 standard.” The sentence now reads “Before exceeding 7,400 hours since last HPT blade inspection or rework to DRS 611 standard.” Conclusion We have carefully reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD with the changes described previously. Costs of Compliance We estimate that this AD will affect about 30 RRD Dart 528, 529, 532, 535, 542, and 552 series turboprop engines installed on airplanes of U.S. registry. We also estimate that it will take about 22 work-hours per engine to perform the actions, and that the average labor rate is $80 per work-hour. No parts are required. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $52,800. 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 adding the following new airworthiness directive: **2007-03-13 Rolls-Royce Deutschland Ltd & Co KG (formerly Rolls-Royce plc):** Amendment 39-149824. Docket No. FAA-2006-25272; Directorate Identifier 2006-NE-16-AD. Effective Date

(a)This airworthiness directive

(AD)becomes effective March 19, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Rolls-Royce Deutschland Ltd & Co KG

(RRD)Dart 528, 529, 532, 535, 542, and 552 series turboprop engines. These engines are installed on, but not limited to, Hawker Siddeley, Argosy AW.650, Fairchild Hiller F-27, F-27A, F-27B, F-27F, F-27G, F-27J, FH-227, FH-227B, FH-227C, FH-227D, FH-227E, Fokker F.27 all makes; British Aircraft Corporation Viscount 744, 745D and 810; and Gulfstream G-159 airplanes. Unsafe Condition

(d)This AD results from reports of high pressure turbine

(HPT)disk rim failures. We are issuing this AD to prevent HPT disk rim failures resulting in the release of portions of the HPT disk, uncontained engine failure, and 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.

(f)Using RRD Dart Service Bulletin

(SB)Da72-543, dated July 11, 2003, and the scheme detailed in RRD Repair Instruction, “Restoration of Platform and Shroud gaps by welding, DRS 611,” dated July 15, 2005, inspect and repair HPT blade platforms and shroud abutment faces by weld build-up:

(1)After no more than 1,500 flight hours from the date of issue of this AD, if the engine has not been previously inspected or reworked to the DRS 611 standard;

(2)Each time new blades are installed; and

(3)Before exceeding 7,400 hours since last HPT blade inspection or rework to DRS 611 standard. Alternative Methods of Compliance

(g)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

(h)LBA airworthiness directive 2003-217, dated August 7, 2003, also addresses the subject of this AD.

(i)Contact Jason Yang, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone

(781)238-7747, fax

(781)238-7199; e-mail: *jason.yang@faa.gov* for more information about this AD. Material Incorporated by Reference

(j)You must use Rolls-Royce Deutschland Ltd & Co KG

(RRD)Dart Service Bulletin Da72-543, dated July 11, 2003, and RRD Dart Repair Instruction, “Restoration of Platform and Shroud Gaps by Gaps by Welding, DRS 611,” dated July 15, 2005, to perform the actions required by this AD.

(1)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.

(2)Contact Rolls-Royce Deutschland Ltd & Co KG, Eschenweg 11, D-15827 Dahlewitz, Germany; telephone 49

(0)33-7086-1768; fax 49

(0)33-7086-335 for a copy of this service information.

(3)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 January 26, 2007. Francis A. Favara, Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-1708 Filed 2-9-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-24926; Airspace Docket No. 06-ASW-1] RIN 2120-AA66 Establishment, Modification and Revocation of VOR Federal Airways; East Central United States AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule, correction. SUMMARY: This action corrects a final rule published in the **Federal Register** on January 18, 2007 (72 FR 2182), Airspace Docket No. 06-ASW-1, FAA Docket No. FAA-2006-24926. In that rule, an inadvertent error was made in the legal description for VOR Federal Airway V-75. Specifically, the description did not exclude the portion of the airway that is in Canadian airspace. This action corrects that error. EFFECTIVE DATE: 0901 UTC, March 15, 2007. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Steve Rohring, Airspace and Rules, Office of System Operations Airspace and AIM, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone:

(202)267-8783. SUPPLEMENTARY INFORMATION: History On January 18, 2007, the FAA published in the **Federal Register** a final rule establishing 14 VOR Federal Airways (V-176, V-383, V-396, V-406, V-410, V-416, V-418, V-426, V-467, V-486, V-542, V-584, V-586, and V-609); modifying 12 VOR Federal Airways (V-14, V-26, V-40, V-72, V-75, V-90, V-96, V-103, V-116, V-297, V-435, and V-526); and revoking one VOR Federal Airway (V-42) (72 FR 2182). Subsequent to the issuance of the final rule, an inadvertent error was identified in the legal description for V-75. Specifically, the description did not exclude that portion of the airway that is located within Canadian airspace. VOR Federal Airways are published in paragraph 6010 of FAA Order 7400.9P dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The VOR Federal Airways listed in this document will be published subsequently in the Order. Correction to Final Rule Accordingly, pursuant to the authority delegated to me, the legal description as published in the **Federal Register** on January 18, 2007 (72 FR 2182), Airspace Docket No. 06-ASW-1, FAA Docket No. FAA-2006-24926, and incorporated by reference in 14 CFR 71.1, is corrected as follows: § 71.1 [Amended] Paragraph 6010 VOR Federal Airways. V-75 [Corrected] From Morgantown, WV; Bellaire, OH; Briggs, OH; DRYER, OH; INT DRYER 325° and Waterville, OH, 062° radials. The airspace within Canada is excluded. Issued in Washington, DC, on February 2, 2007. Edith V. Parish, Manager, Airspace and Rules. [FR Doc. E7-2229 Filed 2-9-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 520 Oral Dosage Form New Animal Drugs; Fluoxetine AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration

(FDA)is amending the animal drug regulations to reflect approval of a new animal drug application

(NADA)filed by Elanco Animal Health. The NADA provides for veterinary prescription use of fluoxetine hydrochloride chewable tablets for the treatment of canine separation anxiety. DATES: This rule is effective February 12, 2007. FOR FURTHER INFORMATION CONTACT: Melanie R. Berson, Center for Veterinary Medicine (HFV-110), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 301-827-7540, e-mail: *melanie.berson@fda.hhs.gov* . SUPPLEMENTARY INFORMATION: Elanco Animal Health, A Division of Eli Lilly & Co., Lilly Corporate Center, Indianapolis, IN 46285, filed NADA 141 272 that provides for veterinary prescription use of RECONCILE (fluoxetine hydrochloride) Chewable Tablets for the treatment of canine separation anxiety in conjunction with a behavior modification plan. The NADA is approved as of January 19, 2007, and the regulations in part 520 (21 CFR part 520) are amended by adding new § 520.980 to reflect the approval. The basis of approval is discussed in the freedom of information summary. In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday. Under section 512(c)(2)(F)(i) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360b(c)(2)(F)(i)), this approval qualifies for 5 years of marketing exclusivity beginning January 19, 2007. FDA has determined under 21 CFR 25.33(d)(1) 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. This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808. List of Subjects in 21 CFR Part 520 Animal drugs. Therefore, under the Federal Food, Drug, and Cosmetic Act and under the authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 520 is amended as follows: PART 520—ORAL DOSAGE FORM NEW ANIMAL DRUGS 1. The authority citation for 21 CFR part 520 continues to read as follows: Authority: 21 U.S.C. 360b. 2. Add § 520.980 to read as follows: § 520.980 Fluoxetine.

(a)*Specifications* . Each chewable tablet contains 8, 16, 32, or 64 milligrams

(mg)fluoxetine hydrochloride.

(b)*Sponsor.* See No. 000986 in § 510.600 of this chapter.

(c)*Conditions of use in dogs* —(1) Amount. 1 to 2 mg per kilogram body weight once daily.

(2)*Indications for use* . For the treatment of canine separation anxiety in conjunction with a behavior modification plan.

(3)*Limitations* . Federal law restricts this drug to use by or on the order of a licensed veterinarian. Dated: January 31, 2007. Stephen F. Sundlof, Director, Center for Veterinary Medicine. [FR Doc. E7-2172 Filed 2-9-07; 8:45 am] BILLING CODE 4160-01-S DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 524 Ophthalmic and Topical Dosage Form New Animal Drugs; Ivermectin Topical Solution AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration

(FDA)is amending the animal drug regulations to reflect approval of a supplemental abbreviated new animal drug application (ANADA) filed by Norbrook Laboratories, Ltd. The supplemental ANADA adds claims for persistent effectiveness against various species of external and internal parasites when cattle are treated with a topical solution of ivermectin. DATES: This rule is effective February 12, 2007. FOR FURTHER INFORMATION CONTACT: John K. Harshman, Center for Veterinary Medicine (HFV-104), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 301-827-0169, e-mail: *john.harshman@fda.hhs.gov* . SUPPLEMENTARY INFORMATION: Norbrook Laboratories, Ltd., Station Works, Newry BT35 6JP, Northern Ireland, filed a supplement to ANADA 200-272 for Ivermectin Pour-On for Cattle. The supplemental ANADA adds claims for persistent effectiveness against various species of external and internal parasites that were approved for the pioneer product with 3 years of marketing exclusivity (69 FR 501, January 6, 2004). The supplemental ANADA is approved as of January 19, 2007, and 21 CFR 524.1193 is amended to reflect the approval. In accordance with the freedom of information provisions of 21 CFR part 20 and 21 CFR 514.11(e)(2)(ii), a summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday. FDA has determined under 21 CFR 25.33(a)(1) 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. This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to congressional review requirements in 5 U.S.C. 801-808. List of Subjects in 21 CFR Part 524 Animal drugs. Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 524 is amended as follows: PART 524—OPHTHALMIC AND TOPICAL DOSAGE FORM NEW ANIMAL DRUGS 1. The authority citation for 21 CFR part 524 continues to read as follows: Authority: 21 U.S.C. 360b. 2. In § 524.1193, revise the section heading, and paragraphs

(b)and (e)(2) to read as follows: § 524.1193 Ivermectin topical solution.

(b)*Sponsors* . See Nos. 050604, 051311, 054925, 055529, 058829, 059130, and 066916 in § 510.600(c) of this chapter for use as in paragraph

(e)of this section.

(e)* * *

(2)*Indications for use in cattle* . For the treatment and control of: Gastrointestinal roundworms (adults and fourth-stage larvae) *Ostertagia ostertagi* (including inhibited stage), *Haemonchus placei* , *Trichostrongylus axei* , *T. colubriformis* , *Cooperia oncophora* , *C. punctata* , *C. surnabada* , *Oesophagostomum radiatum* ; (adults) *Strongyloides papillosus* , *Trichuris* spp.; lungworms (adults and fourth-stage larvae) *Dictyocaulus viviparus* ; cattle grubs (parasitic stages) *Hypoderma bovis* , *H. lineatum* ; mites *Sarcoptes scabiei* var. *bovis* ; lice *Linognathus vituli* , *Haematopinus eurysternus* , *Damalinia bovis* , *Solenoptes capillatus* ; and horn flies *Haematobia irritans* . It controls infections and prevents reinfection with *O. radiatum* and *D. viviparus* for 28 days after treatment, *C. punctata* and *T. axei* for 21 days after treatment, *H. placei* , *C. oncophora* , and *C. surnabada* for 14 days after treatment, and *D. bovis* for 56 days after treatment. Dated: February 2, 2007. Steven D. Vaughn, Director, Office of New Animal Drug Evaluation, Center for Veterinary Medicine. [FR Doc. E7-2368 Filed 2-9-07; 8:45 am] BILLING CODE 4160-01-S DEPARTMENT OF TRANSPORTATION Federal Highway Administration 23 CFR Part 773 [FHWA Docket No. FHWA-05-22707] RIN 2125-AF13 Surface Transportation Project Delivery Pilot Program AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Final rule. SUMMARY: Section 6005 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) established a pilot program to allow the Secretary of Transportation to assign, and the State to assume, the Secretary's responsibilities under the National Environmental Policy Act

(NEPA)for one or more highway projects. The Secretary may permit not more than five States (including the States of Alaska, California, Ohio, Oklahoma, and Texas) to participate in the program. Upon assigning NEPA responsibilities, the Secretary may further assign to the State all or part of the Secretary's responsibilities for environmental review, consultation or other action required under any Federal environmental law pertaining to the review of a specific project. In order to be selected for the pilot program a State must submit an application to the Secretary. Section 6005 requires the Secretary to promulgate rules that establish requirements relating to information required to be contained in an application by a State to participate in the pilot program. This final rule establishes these application requirements. DATES: Effective March 14, 2007. FOR FURTHER INFORMATION CONTACT: Ms. Ruth Rentch, Office of Project Development and Environmental Review, HEPE, 202-366-2034 or Mr. Michael Harkins, Office of the Chief Counsel, 202-366-4928, Federal Highway Administration, 400 Seventh Street, SW., Washington, DC 20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: Electronic Access and Filing Internet users may access this document, the notice of proposed rulemaking (NPRM), and all comments received by the U.S. DOT by using the universal resource locator

(URL)*http://dms.dot.gov* . It is available 24 hours each day, 365 days each year. Electronic submission and retrieval help and guidelines are available under the help section of the Web site. An electronic copy of this document may also be downloaded by accessing the Office of the Federal Register's home page at: *http://www.archives.gov* or the Government Printing Office's Web page at *http://www.gpoaccess.gov/nara* . Background Section 6005 of SAFETEA-LU (Pub. L. 109-59, 119 Stat. 1144), codified at 23 U.S.C. 327, established a pilot program that allows the Secretary of Transportation (Secretary) to assign up to five States, including Alaska, California, Oklahoma, Ohio, and Texas, the responsibilities of the Secretary for implementation of the National Environmental Policy Act (NEPA)(42 U.S.C. 4321-4347) for one or more highway projects. Upon assumption of NEPA responsibilities, a State may also be assigned all or part of the Secretary's responsibilities for environmental review, consultation or other action required under any Federal environmental law pertaining to the review or approval of highway projects. Whenever a State assumes the Secretary's responsibilities under this program, the State becomes solely responsible and solely liable for carrying out, in lieu of the Secretary, the responsibilities it has assumed, including coordination and resolution of issues with Federal environmental resource and regulatory agencies and responding to litigation. The Secretary's NEPA and other environmental responsibilities pertaining to the review and approval of highway projects, as well as the administration and implementation of this pilot program, has been delegated to the FHWA pursuant to 49 CFR 1.48. In order to participate in this pilot program, a State must submit an application. Section 327(b)(2) of title 23, United States Code, requires the Secretary to promulgate regulations that establish requirements relating to the information that States must submit as part of their applications to participate in this pilot program. This final rule establishes these requirements. Discussion of Comments Received to the Notice of Proposed Rulemaking

(NPRM)The FHWA published its NPRM on April 5, 2006, at 71 FR 17040. In response to the NPRM, the FHWA received 10 comments. The commenters include two Federal agencies, three State departments of transportation (State DOT), one public interest group, two associations, and a consolidated group of comments from each of the State DOTs designated by the statute as pilot program participants (Designated Pilot States). One State DOT, the Alaska Department of Transportation and Public Facilities (ADOT&PF), submitted two comments. The FHWA considered each of these comments in adopting this final rule. The majority of the comments addressed several common issues. These issues are identified and addressed under the appropriate section below. Section-by-Section Discussion of Changes Section 773.103 Definitions Federal Environmental Law There were several comments on the definition of “Federal environmental law.” First, the Designated Pilot States and the Texas Department of Transportation (TxDOT) commented that the regulation or the preamble should acknowledge that State DOTs already perform much of the work needed to comply with many environmental laws, and that the preamble should make clear that the key change under this pilot program is the transfer of specific decisionmaking and consulting responsibilities. The FHWA acknowledges that, pursuant to 23 CFR 771.109(c)(1), the State DOTs may currently prepare the environmental impact statement

(EIS)and other environmental documents with the FHWA's guidance, participation, and independent evaluation of such documents. The FHWA further acknowledges that this pilot program will involve the transfer of decisionmaking and consulting responsibilities. As provided at 23 U.S.C. 327(e), upon assuming responsibility under this pilot program, the State shall be solely responsible and solely liable for carrying out such responsibilities until the pilot program is terminated. Second, the Designated Pilot States commented that compliance with Executive Orders should be included in the regulation itself and not just in Appendix A. The FHWA agrees with this comment and has revised the definition of “Federal environmental law” to include Executive Orders. It is important to note, however, that Executive Orders are intended only to improve the internal management and administration of the Executive Branch of the Federal Government and do not create any legally enforceable rights. Nothing in this rulemaking is intended to change the legal force and effect of any Federal statute, regulation, or Executive Order cited herein. As provided at 23 U.S.C. 327(a)(2)(C), a State DOT's assumption of any responsibility under this pilot program is subject to the same procedural and substantive requirements that apply to the Secretary. Third, the American Road and Transportation Builders Association (ARTBA) commented that the State DOTs should be delegated the FHWA's responsibility for making transportation conformity determinations. However, 23 U.S.C. 327(a)(2)(B)(ii)(I) expressly prevents the FHWA from delegating these responsibilities. Thus, the FHWA declines to make this change. Lastly, the Environmental Protection Agency

(EPA)commented that the rule should provide clarification on how all environmental regulations will be followed if all of the FHWA's environmental responsibilities are not assumed by a State DOT. The FHWA is aware of the procedural difficulties that may be caused by only a partial assumption of the FHWA's environmental responsibilities. Should a State DOT wish to exclude some of the FHWA's environmental responsibilities under the pilot program, and if satisfactory alternate procedures cannot be developed in the formal Memorandum of Understanding (MOU), then the FHWA may either choose to not assign the responsibilities to the State DOT or withdraw the affected projects from the pilot program. Under any scenario, the FHWA believes that this issue is more appropriate for the formal Memorandum of Understanding

(MOU)between the FHWA and the State DOT rather than this rule. The FHWA is committed to ensuring full compliance with all environmental regulations. Highway Project There were several comments on the definition of “highway project.” First, the Designated Pilot States, TxDOT, ADOT&PF, ARTBA, and EPA all commented on the proposed exclusion of undertakings that are planned as multi-modal. Designated Pilot States, TxDOT, ADOT&PF, and ARTBA each commented that this exclusion is overly broad. Designated Pilot States and TxDOT both commented that the exclusion would prevent the States from assuming highway projects that include common multi-modal elements such as express bus service, pedestrian and bicycle paths, and park-and-ride lots. Designated Pilot States and TxDOT both commented that excluding projects that are funded under chapter 53 of title 49, United States Code, or that require the approval of the Federal Transit Administration

(FTA)is sufficient to prevent the program from applying to projects that do not fit within the common meaning of the term “highway project.” The ADOT&PF wants to ensure that the definition does not exclude projects on the Alaska Marine Highway System, which occasionally involve funds from both FHWA and FTA. The EPA was concerned that the exclusion of multi-modal projects would limit the range of reasonable alternatives that may be considered for a project. The FHWA agrees with each of the comments made by Designated Pilot States, TxDOT, ARTBA, and EPA and has revised the definition of “highway project” to remove the exclusion of multi-modal projects. The intent behind the proposed exclusion of multi-modal projects from the definition of highway project was not to be overly restrictive in the types of projects that States may assume, but rather to ensure that only actual highway projects are assumed. Also, the FHWA included express language at the end of the definition to further clarify that a State may include and consider alternatives that are excluded from this definition in the range of reasonable alternatives for a highway project. However, with respect to the comment from ADOT&PF, the FHWA does not believe that it is appropriate to include projects that are funded under chapter 53 of title 49, United States Code. Projects funded under chapter 53 of title 49, United States Code, are transit projects that are administered and approved by the FTA. While no changes have been made concerning the source of funding under chapter 53 of title 49, United States Code, the FHWA notes that section 1108 of SAFETEA-LU provides flexibility to the States to transfer any funds made available for highway projects under chapter 53 of title 49, United States Code, to title 23, United States Code. Once transferred, these projects would no longer be excluded. Moreover, improvements to ferry boats and terminal facilities are eligible for assistance under title 23, United States Code. Thus, the FHWA believes it is appropriate for improvements to ferry terminal facilities to be considered highway projects under the definition of this rule. Second, the Designated Pilot States, ARTBA, California Department of Transportation (Caltrans), EPA, and Save Our Springs Alliance

(SOS)all commented on the proposed exclusion of projects for which a draft environmental impact statement

(DEIS)has already been issued by FHWA. The EPA and SOS were supportive of this exclusion in order to minimize changes of authority in the middle of project development. The Designated Pilot States, ARTBA, and Caltrans were opposed to this exclusion. Designated Pilot States stated that, given the short term of the pilot program, which is only six years after the date of enactment of SAFETEA-LU (August 10, 2005), it may not be possible for the State DOTs to carry-out many projects requiring an EIS all the way through the NEPA process. After considering these comments, the FHWA has decided to remove this exclusion from the definition of “highway project.” The pilot program is only authorized for six years from the date of enactment of SAFETEA-LU. One year has already elapsed in developing these regulations and more time must still be spent in developing the application, giving public notice, considering the application, consulting with affected Federal agencies, and executing a memorandum of understanding. More time is also needed by States for obtaining legislative authority to consent to exclusive Federal court jurisdiction with respect to the responsibilities to be assumed. The FHWA's concern regarding the public frustration over changing the entity responsible for completing the EIS in the middle of a project will be minimized through the public notice requirement for the State DOTs' applications. To ensure that the public is given adequate notice of all projects for which a DEIS has already been issued, the FHWA has added a requirement at section 773.106(b)(1) to require each State DOT to specifically identify each project for which a DEIS has already been issued in its application. Additionally, the FHWA is also concerned about how to measure the State DOTs' success under the pilot program whenever a substantial amount of FHWA involvement has already occurred. Thus, in order to ensure that this pilot program allows for the greatest flexibility in the delegation of projects, the FHWA has eliminated this exclusion. While the FHWA does not believe that there is any specific threshold that is appropriate for this regulation, the decision about whether any project may be assumed is discretionary and will be made by the FHWA on a case-by-case basis. Third, the Designated Pilot States, Caltrans, and EPA all commented on the proposed exclusion of projects listed on Executive Order (E.O.) 13274. The Designated Pilot States and Caltrans both urged the FHWA not to adopt an across-the-board rule excluding all E.O. 13274 projects, but to use discretion in determining which projects may be assumed on a case-by-case basis. The EPA asked the FHWA to clarify whether this exclusion applies only to E.O. 13274's priority list or to both the priority list and the transition list. After considering these comments, the FHWA has decided not to eliminate this exclusion. The projects designated under E.O. 13274 are high priority projects that have been designated by the Secretary as having national or regional significance. Moreover, the E.O. 13274 process itself involves high-level involvement of DOT and other Federal departments and agencies, which must collaborate and work together to expedite the environmental review of these projects. As a result, these projects require direct DOT involvement to not only ensure that special attention is given to these projects throughout the Federal Government, but also because these interactions require policy-making authority. With respect to EPA's comment concerning the scope of this exclusion, it is the FHWA's intent to exclude projects on both the priority list and the transition list. However, we do not believe that an amendment to the regulations is necessary to clarify this point. Fourth, the Designated Pilot States and ADOT&PF commented on the proposed exclusion of Federal lands highway projects. The Designated Pilot States urge the FHWA to reassess this exclusion in light of ADOT&PF's comments on this issue and state that the exclusion, if any, should only apply to projects funded with funds under the Federal Lands Highway Program. The ADOT&PF states that this exclusion should be modified because it designs and constructs projects across Federal lands funded under the Federal Lands Highway Program. The FHWA agrees with these comments and has modified the exclusion to permit the State DOTs to assume environmental responsibilities for Federal lands projects that are funded under the Federal Lands Highway Program and both designed and constructed by the State. Fifth, the EPA commented on the FHWA's intent to allow States to assume reevaluations. The EPA is concerned about the effects of changes of authority in the mid-course of project development. The FHWA does not believe that the issue of mid-course changes of authority in project development is significant in the context of a reevaluation. Reevaluations are separate and independent determinations concerning whether a specific NEPA determination is still valid. Unlike the issue concerning a DEIS, the State DOT will conduct a reevaluation from the beginning of this process. Additionally, due to the limited duration of this pilot program, the State DOTs' assumption of reevaluations will provide some data on the State DOTs' ability to assume the FHWA's environmental responsibilities. Lastly, the EPA asked the FHWA to clarify whether a State can assume a Tier 2 project for which a Tier 1 determination has already been made. It is the FHWA's intent to allow States to assume Tier 2 projects for which a Tier 1 determination has already been made. However, we do not believe that an amendment to the regulations is necessary for this clarification. Section 773.105 Statements of Interest The American Association of State Highway and Transportation Officials (AASHTO) commented on the importance of ensuring that all five openings in the pilot program be filled. AASHTO suggested including a provision in the regulations that requires each designated pilot State (Alaska, California, Ohio, Oklahoma, and Texas) to submit a statement of interest within 60 days of the issuance of the final rule. The statement of interest would hold the designated pilot State's place in the program while that State develops its application. If the State declines to submit a statement of interest, then other States would have an opportunity to participate in the program. The FHWA agrees with this comment and has inserted a requirement at section 773.105 to require that each designated pilot State submit a statement of interest within 60 days after the effective date of these regulations. The FHWA has also inserted a requirement that each State actively work to develop and submit its application and meet all applicable program criteria, including the enactment of necessary State legal authority after a statement of interest is submitted. The FHWA further notes that, while SAFETEA-LU requires the FHWA to give priority to Alaska, California, Ohio, Oklahoma, and Texas, any State may submit an application to the FHWA at any time to participate in this pilot program. Should any of these five designated States decide not to participate or fail to meet the eligibility criteria, the FHWA will consider another State's application. Section 773.106 Application Requirements for Participation in the Program There were several comments on the proposed application requirements. First, Designated Pilot States and TxDOT commented on the manner in which classes of projects must be identified in the application. Designated Pilot States and TxDOT felt that there was an inconsistency between the proposed regulations and the preamble of the NPRM, which implied that the State DOTs must individually identify each project in its application. In drafting the preamble to the NPRM, the FHWA did not intend to adopt this narrow approach. Rather, the FHWA intended for a flexible approach to identifying the classes of projects. State DOTs applying to this pilot program may choose to either identify individual projects or identify a class of projects by using a qualitative description of the projects. With the exception of specifically identifying each project for which a DEIS has already been issued, as discussed above, there are no limits intended to be placed on how the States identify the projects other than a requirement to identify the projects in sufficient terms so as to enable the FHWA, other agencies, and the public to reasonably know what projects the State DOT is intending to assume. Second, TxDOT, ADOT&PF, Designated Pilot States, and SOS all commented on the requirement for the State DOT to include a philosophical/policy statement of the State DOT's goals and guiding principles in making environmental decisions. TxDOT commented that it is unclear what would constitute an appropriate philosophical/policy statement and how the statement would be evaluated by the FHWA in considering the application. ADOT&PF commented that the purpose of the philosophical/policy statement is unclear and it should be sufficient for the State DOTs to simply follow the policies and procedural requirements applicable to the FHWA. Designated Pilot States commented that the statement itself could be viewed as a regulatory requirement and that the State DOTs should simply be required to comply with the procedural and substantive requirements applicable to the FHWA. SOS commented that the philosophical/policy statement is meaningless unless it is made binding and enforceable. Since there appears to be substantial confusion over the purpose and utility of the philosophical/policy statement, the FHWA has eliminated this requirement. The purpose of the philosophical/policy statement was not to create a binding, enforceable standard against which the State DOTs' environmental decisions would be judged. Rather, the FHWA was looking for a statement of the State DOTs' commitment to good environmental stewardship, legal compliance, public involvement, and cooperation and consultation with Federal agencies, State and local officials, and Indian tribes. Even though this requirement has been eliminated, the FHWA notes that 23 U.S.C. 327(a)(2)(C) provides that the States participating in the pilot program are subject to the same procedural and substantive requirements as the FHWA under this pilot program, which includes the policies contained in 42 U.S.C. 4331 and 23 CFR 771.105. Third, ADOT&PF commented that the purpose behind the requirement to identify existing environmental and managerial expertise is unclear and should be revised to only require the State DOTs to identify the staff, management, and procedures that will be used to administer the responsibilities the State DOT assumes. The FHWA agrees with this comment and has eliminated this requirement. Even without this requirement, the regulations require sufficient information be submitted concerning the State DOT's personnel to be used in administering the FHWA's environmental responsibilities. However, in order to ensure that the State DOT identifies the relevant management, the FHWA amended section 773.106(b)(4)(i) to require the State DOT to describe the management positions in addition to the staff positions. Fourth, ADOT&PF commented on the requirement for the State DOTs to describe how they will identify and address the projects that would normally require FHWA headquarters prior concurrence under 23 CFR 771.125(c). Specifically, ADOT&PF commented that the final rule should waive the applicability of 23 CFR 771.125(c) to the State DOTs participating in this pilot program. The FHWA disagrees with this comment. While this requirement is an internal FHWA processing requirement, the FHWA feels that it is important for the State DOTs to develop processes that would centralize their decisionmaking processes for the types of projects listed at 23 CFR 771.125(c). Fifth, Designated Pilot States, TxDOT, and EPA all commented on the budget requirements that the State DOTs must submit as part of their applications. Designated Pilot States commented that it is virtually impossible to develop a meaningful litigation budget because these costs are highly unpredictable and that the State DOTs should simply be required to demonstrate that funding would be reasonably available. TxDOT commented that it was concerned about providing a budget for things that may or may not happen, such as litigation costs, and that the State DOT should be required only to demonstrate that funding is reasonably available. TxDOT further commented that it considered it to be sufficient to simply state in its application that TxDOT has a $2.6 billion construction letting budget and a total agency disbursements of $7.5 billion. EPA commented that it would be very difficult for a State DOT to show that it has all the financing for a project in place before the project is undertaken. EPA stated that the State DOTs should be given the flexibility to provide satisfactory evidence that financing will be made available. The FHWA agrees with these comments and has revised section 773.106(b)(5) to require the State DOTs to submit a summary of financial resources, as opposed to a budget, showing the anticipated financial resources that will be available to carry out the responsibilities and projects assumed under this pilot program. The FHWA recognizes that some costs may be difficult to ascertain and that the State DOTs' funding is contingent on its appropriations processes. Thus, a summary of financial resources that identifies anticipated financial resources and the expected allocation of those resources, as opposed to a budget, will be sufficient. However, while the FHWA does not intend to require a budget of future financial resource, the FHWA notes that the State DOTs must be able to show that they expect to be able to meet the extra needs identified in sections 773.106(b)(3) and (4). The FHWA does not believe that the broad, general assertion by TxDOT stating that the State DOT has a $2.6 billion construction letting budget and a total agency disbursements of $7.5 billion will be sufficient verification of financial resources. Instead, the State DOT must reasonably show how much financial resources are expected to be allocated to carrying out the environmental responsibilities it has assumed. Sixth, SOS commented on the certification required to be made by the State Attorney General or other State official legally empowered by State law. SOS commented that the certification should be only from the Attorney General and not some other State official because it is unclear who might actually be legally empowered to make these certifications. The FHWA shares this concern. Only a State official that has authority to consent to Federal court jurisdiction and has the ability to make legal conclusions should make this certification. However, since each State has its own unique laws and departmental structures, the FHWA believes that it is appropriate to leave some flexibility in the regulation as to which official would actually make this certification. In most cases, the State's Attorney General would most likely be the appropriate State official. In other cases, the most appropriate State official could be the chief legal official of the State DOT. Whenever an official other than the State's Attorney General makes these required certifications, the State DOT must show the FHWA that the official is legally empowered under State law to make the certification. Seventh, Designated Pilot States and TxDOT commented on the public review and comment requirements. Designated Pilot States and TxDOT were concerned that section 773.106(b)(8) could be construed to require a State DOT to publish the entire application in every newspaper in the State. Designated Pilot States and TxDOT state that the size of the application will make this requirement impracticable and wasteful. In developing the NPRM, the FHWA did not intend to prescribe the manner in which the State DOTs publish their applications for public comment. Rather, the FHWA intended for the publication requirement to be determined in accordance with State law, as provided at 23 U.S.C. 327(b)(3). Moreover, the FHWA believes that the intent of the publication requirement of 23 U.S.C. 327(b)(3) is simply to notify the public that the complete application is reasonably available for public review and inspection. Additionally, the access to the complete application provided to the public must enable them to timely review and comment on the application. Thus, the requirements of 23 U.S.C. 327(b)(3) are met if it is sufficient under State law to provide notice and solicit public comment on a document by publishing a notice of the document's availability. The FHWA has added clarifying language in section 773.106(b)(8) to this effect. Lastly, ACHP and SOS both commented on the public review and comment requirements. ACHP commented that the State DOTs should be required to provide evidence that they have notified and provided an opportunity to comment to Indian tribes and State Historic Preservation Officers (SHPO). The FHWA agrees that the State DOTs should ensure that Indian tribes, SHPOs, and other stakeholders are provided notice and an opportunity to comment on their applications. Moreover, the State DOTs should be mindful that their applications will not only be reviewed by the FHWA, but also other affected Federal agencies, including the ACHP, before their applications are approved. Evidence of adequate public notice and a meaningful opportunity to submit comments will be considered in approving any application. However, the FHWA does not believe that an amendment to the regulations is necessary to ensure that any specific group or stakeholder receives notice and is provided an opportunity to comment. Also, SOS commented that they have little confidence in the requirement to seek public comment solely in accordance with the public notice law of the State, and that the regulations should be amended to require public outreach and education. However, 23 U.S.C. 327(b)(3) provides that the public notice requirement be determined under the appropriate public notice law of the State. Thus, the method of public notice and solicitation of comments is to be determined by the State DOTs following State law. Section 773.108 Application Amendments The ACHP, similar to its comments on the public notice and comment process, commented that the State DOT should be required to notify affected Indian tribes and SHPOs of its intent to amend its application. As stated above in response to the ACHP's comments on the public notice and comment process, the FHWA agrees that the State DOTs should ensure that Indian tribes, SHPOs, and other stakeholders are provided notice and an opportunity to comment on amendments to their applications involving requests for additional projects or responsibilities. However, the FHWA does not believe that an amendment to the regulations is necessary to ensure that any specific group or stakeholder receives notice and is provided an opportunity to comment. Also, the FHWA amended section 773.108 to clarify that the State DOT does not need to provide notice and solicit public comments for amendment not involving requests to assume additional highway projects, classes of highway projects, or more environmental responsibilities. Appendix A There were several comments on Appendix A. First, ADOT&PF, ACHP, Designated Pilot States, and TxDOT commented on the government-to-government tribal consultation responsibilities. ADOT&PF commented that the FHWA should reevaluate its proposal in the NPRM to exclude government-to-government consultations with the Indian tribes. The ACHP commented that it agreed that government-to-government tribal consultation responsibilities should only be administered by the State DOT if the Tribe consents through a formally signed consultation agreement. The Designated Pilot States commented that they were concerned that each State DOT would be required to negotiate agreements with dozens or hundreds of separate Indian tribes simply to permit a State DOT to continue its current practice of handling consultation with tribes except in cases where a tribe requests direct FHWA involvement. TxDOT commented that it is appropriate for FHWA to be involved when a tribe requests FHWA involvement. While the statute does not specifically prohibit the FHWA from assigning its government-to-government consultation responsibilities, the FHWA does not believe that the agency can, or should try to, require a sovereign Indian tribe to consult with the State DOT without a clear Congressional mandate to do so. Additionally, the FHWA is aware that requiring the State DOT to negotiate individual agreements with every Indian tribe could be time consuming and very burdensome administratively. Since the FHWA is not assigning any government-to-government consultation activities, there should be no change in the existing relationships between the State DOTs and the Indian tribes. Thus, the FHWA is deleting this requirement from Appendix A. However, the FHWA notes that some State DOTs currently have executed agreements with the Indian tribes within their borders to coordinate and resolve issues relating to highway projects as part of the FHWA's tribal consultation process. These agreements have generally worked well and the State DOTs are encouraged to follow this practice under this pilot program. Second, Designated Pilot States and TxDOT commented that the regulation should clarify that, with regard to the laws listed in Appendix A, the FHWA would be assigning only those responsibilities that are carried out as part of the NEPA analysis. TxDOT specifically commented that E.O. 13287 and E.O. 11514 should be deleted from Appendix A because they do not require any consideration in the NEPA process. The FHWA has decided to remove E.O.'s 11514, 11593, 13007, 13175, and 13287, and 23 U.S.C. 319 to indicate that the FHWA would retain responsibility for implementation of these laws either because they apply only to properties owned and managed by the Federal Government, involve policy decisions, or do not otherwise appear to require the FHWA to undertake any environmental review, consultation, or other action pertaining to the review or approval of highway projects. Also, the FHWA has modified the reference to the Rivers and Harbors Act of 1899 in Appendix A to include only section 10 because the other sections of the Act do not appear to be inherently environmental. The FHWA notes that the mere inclusion of a law on the list in Appendix A does not mean that the law will be automatically assigned. The laws that are assigned will only be those laws approved by the FHWA and specifically reflected in the MOU between the FHWA and the State DOT. Moreover, the list in Appendix A is not meant to be an exhaustive list, but rather a list of laws the FHWA has predetermined to be inherently environmental. The FHWA further notes that the State DOTs participating in the pilot program must comply with the substantive requirements of all applicable laws regardless of these laws' inclusion or exclusion in an application or MOU. Other The EPA commented that the rulemaking should clarify that the review and coordination responsibilities assumed by the State DOTs will not affect or diminish their obligations to other Federal agencies. The EPA also commented that the States should be required to acknowledge their commitment to cooperate with other Federal agencies. While we do not agree that it is necessary to add a regulation to this effect, we agree with the EPA's comment that the State DOTs must cooperate with other Federal agencies in administering the FHWA's responsibilities under this program. These obligations will be made part of the formal MOUs between the FHWA and the State DOTs. In developing their applications, the State DOTs should be mindful that the FHWA is required to consult with other Federal agencies before approving their applications. Demonstrating their commitment to cooperate with other Federal agencies in their applications may help expedite the approval of their applications. Finally, Designated Pilot States and TxDOT commented that the FHWA should use an acronym other than “STD” whenever referring to a State transportation department. The FHWA used the acronym “STD” since 23 U.S.C. 101(a)(34) uses the words “State transportation department” in referring to the State department charged with the responsibility for highway construction. However, the FHWA agrees that the term “State DOT” in an acceptable replacement for the previously used acronym and accordingly, the FHWA has accepted this comment. Rulemaking Analyses and Notices Executive Order 12866 (Regulatory Planning and Review) and DOT Regulatory Policies and Procedures The FHWA has determined that this action would be a significant rulemaking action within the meaning of Executive Order 12866 and would be significant within the meaning of the U.S. Department of Transportation's regulatory policies and procedures. This rulemaking proposes application requirements for the Surface Transportation Project Delivery Program as mandated in section 6005 of the Safe, Accountable, Flexible, Efficient Transportation Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59; 119 Stat. 1144; 23 U.S.C. 327). This action is considered significant because of the substantial public interest in environmental concerns associated with highway projects. The program to which this proposed application corresponds allows States to assume the Secretary of Transportation's responsibilities under the National Environmental Policy Act of 1969, and for environmental reviews, consultations, and compliance with other Federal environmental laws. This action involves important DOT policy in that it allows participating States to assume limited DOT responsibilities. These changes are not anticipated to adversely affect, in a material way, any sector of the economy. This rulemaking sets forth application requirements for the Surface Transportation Project Delivery Pilot Program, which will result in only minimal costs to program applicants. In addition, these changes do not create a serious inconsistency with any other agency's action or materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. Consequently, a full regulatory evaluation is not required. Regulatory Flexibility Act In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) we have evaluated the effects of this proposed action on small entities and have determined that this action would not have a significant economic impact on a substantial number of small entities. This rule addresses application requirements for States wishing to participate in the Surface Transportation Project Delivery Program. As such, it affects only States and States are not included in the definition of small entity set forth in 5 U.S.C. 601. Therefore, the Regulatory Flexibility Act does not apply, and the FHWA certifies that this action would not have a significant economic impact on a substantial number of small entities. Unfunded Mandates Reform Act of 1995 This rule does not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $128.1 million or more in any one year (2 U.S.C. 1532). Further, in compliance with the Unfunded Mandates Reform Act of 1995, the FHWA will evaluate any regulatory action that might be proposed in subsequent stages of the proceeding to assess the effects on State, local, and tribal governments and the private sector. Additionally, the definition of “Federal Mandate” in the Unfunded Mandates Reform Act excludes financial assistance of the type in which State, local, or tribal governments have authority to adjust their participation in the program in accordance with changes made in the program by the Federal Government. The Federal-aid highway program permits this type of flexibility. Executive Order 13132 (Federalism) This action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, and the FHWA has determined that this action would not have sufficient federalism implications to warrant the preparation of a federalism assessment. The FHWA has also determined that this action would not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions. Executive Order 12372 (Intergovernmental Review) Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program. Paperwork Reduction Act Under the Paperwork Reduction Act of 1995

(PRA)(44 U.S.C. 3501), Federal agencies must obtain approval from the Office of Management and Budget

(OMB)for each collection of information they conduct, sponsor, or require through regulations. The FHWA has determined that this action does not contain collection of information requirements for the purposes of the PRA. The FHWA does not anticipate receiving applications from ten or more States because participation in the Surface Transportation Project Delivery Pilot Program has been limited to five, expressly named States in 23 U.S.C. 327. National Environmental Policy Act The agency has analyzed this action for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has determined that the establishment of the application requirements for participation in the Surface Transportation Project Delivery Pilot Program, as required by Congress in 23 U.S.C. 327(b)(2) and the subsequent delegation of responsibilities, would not have any effect on the quality of the environment. Section 327 expressly provides that a State's assumption of the Secretary's responsibilities under this program shall be “subject to the same procedural and substantive requirements as would apply if that responsibility were carried out by the Secretary.” 23 U.S.C. 327(a)(2)(C). In addition, this State assumption of responsibility does not preempt or interfere “with any power, jurisdiction, responsibility, or authority of an agency, other than the Department of Transportation, under applicable law (including regulations) with respect to a project.” 23 U.S.C. 327(a)(2)(E). Finally, the Secretary is authorized to terminate the participation of any State in this program if the Secretary determines “that the State is not adequately carrying out the responsibilities assigned to the State.” 23 U.S.C. 327(i)(2)(A). Executive Order 12630 (Taking of Private Property) The FHWA has analyzed this rule under Executive Order 12630, Governmental Actions and Interface with Constitutionally Protected Property Rights. The FHWA does not believe that this action would affect a taking of private property or otherwise have taking implications under Executive Order 12630. Executive Order 12988 (Civil Justice Reform) This action meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Executive Order 13045 (Protection of Children) We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. The FHWA certifies that this action would not cause any environmental risk to health or safety that might disproportionately affect children. Executive Order 13175 (Tribal Consultation) The FHWA has analyzed this action under Executive Order 13175, dated November 6, 2000, and believes that this action would not have substantial direct effects on one or more Indian tribes; would not impose substantial direct compliance costs on Indian tribal governments; and would not preempt tribal laws. The proposed rulemaking addresses application requirements for the Surface Transportation Project Delivery Program and would not impose any direct compliance requirements on Indian tribal governments. Therefore, a tribal summary impact statement is not required. Executive Order 13211 (Energy Effects) We have analyzed this action under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use dated May 18, 2001. We have determined that it is not a significant energy action under that order since it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required. Regulation Identification Number A regulation identification number

(RIN)is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross reference this action with the Unified Agenda. List of Subjects in 23 CFR Part 773 Environmental protection, Highway project, Highways and roads. Issued on: February 6, 2007. J. Richard Capka, Federal Highway Administrator. In consideration of the foregoing, the FHWA adds a new part 773 to title 23, Code of Federal Regulations to read as follows: PART 773—SURFACE TRANSPORTATION PROJECT DELIVERY PILOT PROGRAM Sec. 773.101 Purpose. 773.102 Applicability. 773.103 Definitions. 773.104 Eligibility. 773.105 Statements of Interest. 773.106 Application requirements for participation in the program. 773.107 Application approval. 773.108 Application amendments. Appendix A to Part 773: FHWA Environmental Responsibilities that may be Assigned Under Section 6005. Authority: 23 U.S.C. 315 and 327; 49 CFR 1.48. § 773.101 Purpose. The purpose of this part is to establish the requirements, as directed by 23 U.S.C. 327(b)(2), relating to the information which must be contained in an application by a State to participate in the program allowing the Secretary to assign, and a State Department of Transportation (State DOT) to assume, responsibilities for compliance with the National Environmental Policy Act

(NEPA)(42 U.S.C. 4321-4347) and other Federal environmental laws pertaining to the review or approval of a highway project(s). § 773.102 Applicability. This part applies to any State DOT eligible under the provisions of 23 U.S.C. 327 that submits an application for participation in the program. § 773.103 Definitions. Unless otherwise specified in this part, the definitions in 23 U.S.C. 101(a) are applicable to this part. As used in this part: *Classes of highway projects* means either a defined group of highway projects or all highway projects to which Federal environmental laws apply. *Federal environmental law* means any Federal law or Executive Order

(EO)under which the Secretary of the United States Department of Transportation has responsibilities for environmental review, consultation, or other action with respect to the review or approval of highway projects. A list of the Federal environmental laws for which a State DOT may assume the responsibilities of the Secretary under this pilot program include, but are not limited to, the list of laws contained in Appendix A to this Part. But, under 23 U.S.C. 327(a)(2)(B), the Secretary's responsibility for conformity determinations required under section 176 of the Clean Air Act (42 U.S.C. 7506) and the responsibility imposed on the Secretary under 23 U.S.C. 134 and 135 are not included in the program. Also, Federal environmental law includes only laws that are inherently environmental and does not include responsibilities such as Interstate access approvals (23 U.S.C. 111). *Highway project* means any undertaking to construct (including initial construction, reconstruction, replacement, rehabilitation, restoration, or other improvements) a highway, bridge, or tunnel, or any portion thereof, including environmental mitigation activities, which is eligible for assistance under title 23 of the United States Code. A highway project may include an undertaking that involves a series of contracts or phases, such as a corridor, and also may include anything that may be constructed in connection with a highway, bridge, or tunnel. However, the term highway project does not include any of the priority projects designated under Executive Order 13274; does not include any Federal Lands Highway project unless such project is to be designed and constructed by the State DOT; and does not include projects that are funded under chapter 53 of title 49, United States Code. Nothing in this part is intended to limit the consideration of any alternative in conducting an environmental analysis under any Federal environmental law, even if the particular alternative would provide for a project that is excluded under this section and may consider and include that alternative within the range of alternatives for a highway project. *Program* means the “Surface Transportation Project Delivery Program” established under 23 U.S.C. 327, which allows up to five State DOTs to assume all or part of the responsibilities for environmental review, consultation, or other action required under any Federal environmental law pertaining to the review or approval of one or more highway projects. § 773.104 Eligibility.

(a)Only a State DOT of a State is eligible to participate in the program.

(b)The program is limited to a maximum five State DOTs, including the State DOTs of Alaska, California, Ohio, Oklahoma and Texas as the five participant States. Should any of these five State DOTs choose not to apply, have its participation terminated, or withdraw from the pilot program, another State DOT may be selected. § 773.105 Statements of Interest.

(a)The State DOTs of Alaska, California, Ohio, Oklahoma and Texas are given priority for participation in the program.

(b)Within sixty days of March 14, 2007, the State DOTs of Alaska, California, Ohio, Oklahoma and Texas shall submit a statement of interest to participate in the program. The statement of interest shall declare that the State DOT intends to submit an application to participate in the pilot program.

(c)Should any of the State DOTs of Alaska, California, Ohio, Oklahoma and Texas fail to submit a statement of interest by May 14, 2007 or decline participation in the pilot program, such State DOT shall no longer be given priority consideration for selection in the program and its application will be selected in competition with other State DOTs.

(d)Should any of the State DOTs of Alaska, California, Ohio, Oklahoma and Texas submit a statement of interest declaring their intent to participate in the program, the State shall actively work to develop and submit its application and meet all applicable program criteria (including the enactment of necessary State legal authority). § 773.106 Application requirements for participation in the program.

(a)Each State DOT wishing to participate in the program must submit an application to the FHWA.

(b)Each application submitted to the FHWA must contain the following information:

(1)The highway project(s) or classes of highway projects for which the State is requesting to assume FHWA's responsibilities under NEPA. The State DOT must specifically identify, in its application, each project for which a draft environmental impact statement has been issued prior to the submission of its application to the FHWA;

(2)The specific responsibilities for the environmental review, consultation, or other action required under other Federal environmental laws, if any, pertaining to the review or approval of a highway project, or classes of highway projects, that the State DOT wishes to assume under this program. The State DOT must also indicate whether it proposes to phase-in the assumption of these responsibilities;

(3)For each responsibility requested in paragraphs (b)(1) and (b)(2) of this section, the State DOT shall submit a description in the application detailing how it intends to carry out these responsibilities. The description shall include:

(i)A summary of State procedures currently in place to guide the development of documents, analyses and consultations required to fulfill the environmental responsibilities requested. The actual procedures should be submitted with the application, or if available electronically, the Web link must be provided;

(ii)Any changes that have been or will be made in the management of the environmental program to provide the additional staff and training necessary for quality control and assurance, appropriate levels of analysis, adequate expertise in areas where responsibilities have been requested, and expertise in management of the NEPA process;

(iii)A discussion of how the State DOT will verify legal sufficiency for the environmental document it produces; and

(iv)A discussion of how the State DOT will identify and address those projects that would normally require FHWA headquarters prior concurrence of the FEIS under 23 CFR 771.125(c).

(4)A verification of the personnel necessary to carry out the authority that may be granted under the program. The verification shall contain the following information:

(i)A description of the staff positions, including management, that will be dedicated to providing the additional functions needed to accept the delegated responsibilities;

(ii)A description of any changes to the State DOT's organizational structure that are deemed necessary to provide for efficient administration of the responsibilities assumed; and

(iii)A discussion of personnel needs that may be met by the State DOTs use of outside consultants, including legal counsel provided by the State Attorney General or private counsel;

(5)A summary of financial resources showing the anticipated financial resources available to meet the activities and staffing needs identified in (b)(3) and (b)(4) of this part, and a commitment to make adequate financial resources available to meet these needs;

(6)Certification and explanation by State's Attorney General, or other State official legally empowered by State law, that the State DOT can and will assume the responsibilities of the Secretary for the Federal environmental laws and projects requested and that the State DOT will consent to exclusive Federal court jurisdiction with respect to the responsibilities being assumed. Such consent must be broad enough to include future changes in relevant Federal policies and procedures to which FHWA would be subject or such consent would be amended to include such future changes;

(7)Certification by the State's Attorney General, or other State official legally empowered by State law, that the State has laws that are comparable to the Federal Freedom of Information Act (5 U.S.C. 552), including laws that allow for any decision regarding the public availability of a document under those laws to be reviewed by a court of competent jurisdiction; and

(8)Evidence that the required notice and solicitation of public comment by the State DOT relating to participation in the program has taken place. Requirements for notice and solicitation of public comments are as follows:

(i)not later than 30 days prior to submitting its application, a State must give notice that the State intends to participate in the program and solicit public comment by publishing the complete application of the State in accordance with the appropriate public notice law of the State. If allowed under State law, publishing a notice of availability of the application rather than the application itself may satisfy the requirements of this subparagraph so long as the complete application is made reasonably available to the public for inspection and copying, and

(ii)copies of all comments received shall be submitted with the application. The State should summarize the comments received, and note changes, if any, that were made in the application in response to public comments.

(c)The application shall be signed by the Governor or the head of the State agency having primary jurisdiction over highway matters. The application must also identify a point of contact for questions regarding the application. Applications may be submitted in electronic format. § 773.107 Application approval. If a State DOT's application is approved, then the State DOT will be invited to enter into a written Memorandum of Understanding

(MOU)with the FHWA, as provided in 23 U.S.C. 327. None of FHWA's responsibilities under NEPA or other environmental laws may be assumed by the State DOT prior to execution of the MOU. § 773.108 Application amendments.

(a)After a State DOT submits its application to the FHWA, but prior to the execution of a MOU, the State DOT may amend its application at any time to request additional highway projects, classes of highway projects, or more environmental responsibilities. However, prior to making any such amendments, the State DOT must provide notice and solicit public comments with respect to the intended amendments. In submitting the amendment to the FHWA, the State DOT must provide copies of all comments received and note the changes, if any, that were made in response to the comments.

(b)A State DOT may amend its application no earlier than one year after a MOU has been executed to request additional highway projects, classes of highway projects, or more environmental responsibilities. However, prior to making any such amendments, the State DOT must provide notice and solicit public comments with respect to the intended amendments. In submitting the amendment to the FHWA, the State DOT must provide copies of all comments received and note the changes, if any, that were made in response to the comments. Appendix A to Part 773 FHWA Environmental Responsibilities that may be assigned under section 6005 Federal Procedures National Environmental Policy Act (NEPA), 42 U.S.C. 4321-43351. FHWA Environmental Regulations at 23 CFR Part 771, 772 and 777 CEQ Regulations at 40 CFR 1500-1508 Clean Air Act, 42 U.S.C. 7401-7671(q). *Any determinations that do not involve conformity.* Noise Compliance with the noise regulations at 23 CFR part 772 Wildlife Section 7 of the Endangered Species Act of 1973, 16 U.S.C. 1531-1544, and Section 1536 Marine Mammal Protection Act, 16 U.S.C. 1361 Anadromous Fish Conservation Act, 16 U.S.C. 757(a)-757(g) Fish and Wildlife Coordination Act, 16 U.S.C. 661-667(d) Migratory Bird Treaty Act, 16 U.S.C. 703-712 Magnuson-Stevenson Fishery Conservation and Management Act of 1976, as amended, 16 U.S.C. 1801 *et seq.* Historic and Cultural Resources Section 106 of the National Historic Preservation Act of 1966, as amended, 16 U.S.C. 470(f) *et seq.* Archeological Resources Protection Act of 1977, 16 U.S.C. 470(aa)-11 Archeological and Historic Preservation Act, 16 U.S.C. 469-469(c) Native American Grave Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3001-3013 Social and Economic Impacts American Indian Religious Freedom Act, 42 U.S.C. 1996 Farmland Protection Policy Act (FPPA), 7 U.S.C. 4201-4209 Water Resources and Wetlands Clean Water Act, 33 U.S.C. 1251-1377 Section 404 Section 401 Section 319 Coastal Barrier Resources Act, 16 U.S.C. 3501-3510 Coastal Zone Management Act, 16 U.S.C. 1451-1465 Safe Drinking Water Act (SDWA), 42 U.S.C. 300(f)-300(j)(6) Section 10 of the Rivers and Harbors Act of 1899, 33 U.S.C. 403 Wild and Scenic Rivers Act, 16 U.S.C. 1271-1287 Emergency Wetlands Resources Act, 16 U.S.C. 3921, 3931 TEA-21 Wetlands Mitigation, 23 U.S.C. 103(b)(6)(m), 133(b)(11) Flood Disaster Protection Act, 42 U.S.C. 4001-4128 Parklands Section 4(f) of the Department of Transportation Act of 1966, 49 U.S.C. 303 Land and Water Conservation Fund (LWCF), 16 U.S.C. 4601-4604 Hazardous Materials Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601-9675 Superfund Amendments and Reauthorization Act of 1986

(SARA)Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6901-6992(k) Executive Orders Relating to Highway Projects E.O. 11990 Protection of Wetlands E.O. 11988 Floodplain Management E.O. 12898 Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations E.O. 13112 Invasive Species [FR Doc. E7-2375 Filed 2-9-07; 8:45 am] BILLING CODE 4910-22-P DEPARTMENT OF LABOR Employee Benefits Security Administration 29 CFR Part 2550 RIN 1210-AB17 Statutory Exemption for Cross-Trading of Securities AGENCY: Employee Benefits Security Administration, Labor. ACTION: Interim final rule with request for comments. SUMMARY: This document contains an interim final rule that implements the content requirements for the written cross-trading policies and procedures required under section 408(b)(19)(H) of the Employee Retirement Income Security Act of 1974 (ERISA or the Act). Section 611(g) of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780, 972, amended section 408(b) of ERISA by adding a new subsection

(19)that exempts the purchase and sale of a security between a plan and any other account managed by the same investment manager if certain conditions are satisfied. Among other requirements, section 408(b)(19)(H) stipulates that the investment manager must adopt, and effect cross-trades in accordance with, written cross-trading policies and procedures that are fair and equitable to all accounts participating in the cross-trading program. This interim final rule would affect employee benefit plans, investment managers, plan fiduciaries and plan participants and beneficiaries. DATES: *Effective Date:* This interim final rule is effective April 13, 2007. *Comment Date:* Written comments on this interim final rule should be received by the Department of Labor on or before April 13, 2007. ADDRESSES: Written comments (preferably, at least three copies) should be addressed to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, Washington, DC 20210, Attention: Cross-Trading Policies and Procedures Interim Final Rule. Commenters are encouraged to submit responses electronically by e-mail to *e-OED@dol.gov,* or by using the Federal eRulemaking portal at *http://www.regulations.gov.* Persons submitting responses electronically should not submit paper copies. All responses will be available to the public at the Public Disclosure Room, N-1513, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210, and online at *http://www.regulations.gov* and *http://www.dol.gov/ebsa.* FOR FURTHER INFORMATION CONTACT: G. Christopher Cosby or Brian Buyniski, Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, Washington, DC 20210, telephone

(202)693-8540. This is not a toll-free number. SUPPLEMENTARY INFORMATION: A. Background Section 611(g)(1) of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780, 972 (PPA), which was enacted on August 17, 2006, amended ERISA by adding a new section 408(b)(19), which exempts from the prohibitions of sections 406(a)(1)(A) and 406(b)(2) of the Act those transactions involving the purchase and sale of a security between a plan and any other account managed by the same investment manager, provided that certain conditions are satisfied. 1 Among other requirements, an investment manager must adopt, and cross-trades must be effected in accordance with, written cross-trading policies and procedures that are fair and equitable to all accounts participating in the cross-trading program. The policies and procedures must include descriptions of

(i)the investment manager's policies and procedures relating to pricing, and

(ii)the investment manager's policies and procedures for allocating cross-trades in an objective manner among accounts participating in the cross-trading program. 1 Section 611(g)92) of the PPA added a parallel provision under the Internal Revenue Code of 1986 (Code), section 4975(d)(22), which provides relief from the prohibitions described in section 4975(c) of the Code in connection with the cross-trading of securities. Under Reorganization Plan No. 4 of 1978, effective December 31, 1978 (5 U.S.C. App. 214 (2000)), the authority of the Secretary of the Treasury to issue interpretations regarding section 4975 of the Code has been transferred, with certain exceptions not here relevant, to the Secretary of Labor, and the Secretary of the Treasury is bound by the interpretations of the Secretary of Labor pursuant to such authority. The investment manager also must designate an individual (a compliance officer) who is responsible for periodically reviewing purchases and sales of securities made pursuant to the exemption to ensure compliance with the foregoing policies and procedures. Following such review, the compliance officer must provide, on an annual basis, a written report describing the steps performed during the course of the review, the level of compliance with the foregoing policies and procedures, and any specific instances of noncompliance. The report must be provided to the plan fiduciary who authorized the cross-trading no later than 90 days following the period to which it relates. Additionally, the written report must notify the plan fiduciary of the plan's right to terminate participation in the investment manager's cross-trading program at any time and must be signed by the compliance officer under penalty of perjury. Section 611(g)(3) of the PPA provides that the Secretary of Labor, after consultation with the Securities and Exchange Commission (SEC), shall, no later than 180 days after the date of the enactment of the PPA, issue regulations regarding the content of the written policies and procedures required to be adopted by an investment manager in order for such manager to qualify for relief under section 408(b)(19) of the Act. Section 611(h) of the PPA provides that the amendments made by section 611 of the PPA shall apply to transactions occurring after the date of enactment of the PPA. The rule contained in this document is being issued on an interim final basis to provide immediate guidance regarding the contents of the written cross-trading policies and procedures that must be adopted by investment managers in order to comply with the requirements of the statutory exemption. ERISA section 408(b)(19) is effective for transactions occurring after August 17, 2006, and Congress directed the Secretary of Labor to issue regulations by February 13, 2007. Given the current need for regulations and the short period in which the regulations are to be issued, the Department finds for good cause that notice and public procedure before issuance of this regulation is impracticable. Nevertheless, the Department will carefully review the comments received on this regulation and will thereafter issue a final regulation that takes them into consideration. B. Overview of Interim Final Rule The interim final rule amends 29 CFR part 2550 by adding a new section, 2550.408b-19. Paragraph

(a)of the interim final rule states that the standards set forth in this interim final rule apply solely for purposes of determining whether an investment manager's written policies and procedures satisfy the content requirements of section 408(b)(19)(H) of the Act. Accordingly, such standards shall not apply in determining whether, or to what extent, the investment manager satisfies the other requirements for relief under section 408(b)(19) of the Act. Paragraph (b)(2) requires the content of the written cross-trading policies and procedures to be clear, concise, and written in a manner calculated to be understood by the plan fiduciary authorizing a plan's participation in the manager's cross-trading program. Although no specific format is required for the investment manager's written cross-trading policies and procedures, the information contained in the policies and procedures must be sufficiently detailed to facilitate a periodic review by the compliance officer of the cross-trades. As discussed below, paragraph (b)(3) of the interim final rule describes the content requirements of the written cross-trading policies and procedures that must be adopted by the investment manager, and provided to the plan fiduciary, prior to the investment manager engaging in any cross-trades under section 408(b)(19) of the Act. The Department of Labor (Department) expects that, following disclosure of the written policies and procedures adopted by the investment manager and any other disclosures required by the exemption, 2 the plan fiduciary will be able to determine whether it is appropriate to authorize the plan's participation in the investment manager's cross-trading program. The definitions of certain terms used in the interim final rule are contained in paragraph (c). 2 Under section 408(b)(19)(D) of the Act, the authorizing plan fiduciary must receive disclosures regarding the conditions under which cross-trades may take place in a document that is separate from any other agreement or disclosure involving the asset management relationship. Such disclosure must contain a statement that any investment manager participating in a cross-trading program will have a potentially conflicting division of loyalties and responsibilities to the parties involved in any cross-trade transaction. The written cross-trading policies and procedures must explain how the investment manager will mitigate such conflicts. Further, section 408(b)(19)(F) of the Act requires the investment manager to provide the plan fiduciary who authorized cross-trading a quarterly report detailing all the cross-trades executed by the investment manager in which the plan participated during such quarter. C. Content of Written Cross-Trading Policies and Procedures Section 408(b)(19)(H) of the Act requires the investment manager to adopt, and effect cross-trades in accordance with, written cross-trading policies and procedures that are fair and equitable to all accounts participating in the cross-trading program, and that include a description of the manager's pricing policies and procedures, and the manager's policies and procedures for allocating cross-trades in an objective manner among accounts participating in the cross-trading program. Paragraph (b)(3) of the interim final rule sets forth the content requirements for the written cross-trading policies and procedures to be adopted by the investment manager. The Department believes that the policies and procedures must provide sufficient information to enable a plan fiduciary to assess the investment manager's cross-trading program. In this regard, the relief provided by section 408(b)(19) of the Act is subject to satisfaction of a number of conditions by the investment manager, including the designation of a compliance officer to periodically review purchases and sales and prepare an annual report. A number of the content requirements mandated by the interim final rule require the investment manager to describe the method or process that will be employed by the manager to satisfy section 408(b)(19)(H) of the exemption. This information will enable the compliance officer to review securities purchases and sales to ensure compliance with the written policies and procedures. Since the compliance officer's annual report must be issued to plan fiduciaries responsible for authorizing a plan's participation in the investment manager's cross-trading program, it will assist the plan fiduciary in making an informed decision regarding the plan's continued participation in the cross-trading program. The interim final rule requires the compliance officer to determine whether an investment manager's cross-trading program meets the requirements of section 408(b)(19)

(H)of the Act. The Department specifically requests comments from interested persons regarding whether the scope of the compliance officer's responsibilities under the regulation should be expanded to encompass compliance with all of the requirements of the statutory exemption. In this regard, the Department is interested in any information regarding the current practices of compliance officers in determining compliance with applicable statutory or administrative exemptions under ERISA. In order to assure that plan fiduciaries recognize the scope of compliance reviews conducted under these rules, paragraph (b)(3)(vii) requires the policies and procedures to contain a statement describing whether such review is limited to compliance with the policies and procedures required pursuant to 408(b)(19)(H). Section 408(b)(19)(H) of the Act specifies that the written cross-trading policies and procedures adopted by the investment manager must include a description of the manager's policies and procedures for determining the price at which securities are cross-traded. The Department expects that the pricing policies and procedures will be described in sufficient detail to enable the compliance officer to independently determine that the cross-trade transaction was effected at the “independent current market price” of the security (within the meaning of § 270.17a-7(b) of Title 17, Code of Federal Regulations) as required by section 408(b)(19)(B) of the Act. 3 3 The Department notes that the SEC has issued several no-action and interpretive letters under 17 CFR 270.17a-7(b). The Department is of the view that investment managers who comply with 17 CFR 270.17a-7(b) and SEC no-action and interpretative letters thereunder will satisfy the requirements of section 408(b)(19)(B) of the Act. Section 408(b)(19)(H) further specifies that such policies and procedures must include the policies and procedures for allocating cross-trades in an objective manner among accounts participating in the cross-trading program. In this regard, the Department notes that frequently the demand for a particular security among the accounts of an investment manager may exceed the supply available to cross-trade. Section 408(b)(19)(D) of the Act requires that the basis for any objective allocation to be used must be disclosed to each plan fiduciary prior to obtaining the required authorization. It is the Department's understanding that managers have relied on different systems, e.g., a pro rata or queue system, to allocate cross-trade opportunities on an objective basis. The Department recognizes that there may be a number of objective systems that are appropriate for the allocation of securities. Paragraph (b)(3) of the interim final rule specifies that the investment manager's written cross-trading policies and procedures must include: • A statement of policy which describes the criteria that will be applied by the investment manager in determining that execution of a securities transaction as a cross-trade will be beneficial to both parties to the transaction; 4 4 Notwithstanding the relief provided in section 408(b)(19) of the Act, the Department notes that the Act's general standards of fiduciary conduct also would apply to the investment manager's determination to cross-trade securities on behalf of a plan. In this regard, section 404 of the Act requires, among other things, a fiduciary to discharge his duties respecting the plan solely in the interests of the participants and beneficiaries and in a prudent manner. Accordingly, an investment manager must act prudently and solely in the interest of the participants and beneficiaries of the plans on whose behalf they are acting with respect to:

(1)The decision to enter into a cross-trade; and

(2)the terms of such cross-trade. • A description of how the investment manager will determine that cross-trades are effected at the “independent current market price” of the security (within the meaning of section 270.17a-7(b) of Title 17, Code of Federal Regulations and SEC no-action and interpretative letters thereunder) as required by section 408(b)(19)(B) of the Act, including the identity of sources used to establish such price; • A description of the procedures for ensuring compliance with the $100,000,000 minimum asset size requirement of section 408(b)(19); 5 5 A plan or mater trust will satisfy this minimum asset size requirement as to a transaction if it satisfies the requirement upon its initial participation in the cross-trading program and on a quarterly basis thereafter. • A description of how the investment manager will mitigate any potentially conflicting division of loyalties and responsibilities to the parties involved in any cross-trade transaction; • A requirement that the investment manager allocate cross-trades among accounts participating in the cross-trading program in an objective and equitable manner and a description of the allocation method(s) that will be available to and used by the investment manager; • The identity of the compliance officer responsible for reviewing the investment manager's compliance with its written cross-trading policies and procedures, and the compliance officer's qualifications for this position; and • A statement which describes the scope of the review conducted by the compliance officer, specifically noting whether such review is limited to compliance with the policies and procedures required by 408(b)(19)(H), or whether such review extends to any determinations regarding the overall level of compliance with the other requirements of section 408(b)(19) of ERISA. D. Request for Comments The Department invites comments from interested persons on all aspects of the interim final rule. Comments should be addressed to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, Washington, DC 20210, Attention: Cross-Trading Policies and Procedures Interim Final Rule. All responses will be available for public inspection at the Public Disclosure Room, Employee Benefits Security Administration, Room N-1513, U.S. Department of Labor, Washington, DC 20210. Electronic responses should contain “Cross-Trading Policies and Procedures Interim Final Rule” in the subject line and be addressed to *e-OED@dol.gov.* E. Good Cause Finding That Proposed Rulemaking Unnecessary Rulemaking under section 553 of the Administrative Procedure Act

(APA)ordinarily involves publication of a notice of proposed rulemaking in the **Federal Register** and the public is given an opportunity to comment on the proposed rule. The APA authorizes agencies to dispense with proposed rulemaking procedures, however, if they find both good cause that such procedures are impracticable, unnecessary, or contrary to the public interest, and incorporate a statement of the finding with the underlying reasons in the interim final rule issued. In this case, the Department finds that it is impracticable to undertake proposed rulemaking with regard to the content of the cross-trading policies and procedures. The Department believes such rulemaking is impracticable because, prior to the issuance of the Department's regulation, investment managers who engage in cross-trading on behalf of plans do so are at risk that their cross-trading programs will run afoul of the statutory exemption if their policies and procedures do not meet the requirements of the Department's regulation. The Department understands that the lack of guidance has had a “chilling effect” on the willingness of investment managers and plans to take advantage of the statutory exemption. Therefore, the Department made a policy determination to issue the regulation as an interim final regulation to allow plans to take advantage of the cost-savings derived from cross-trades as soon as possible. The Department therefore finds that notice and public procedure is impracticable and is publishing the rule as an interim final rule and is including a request for comment. The Department has limited the comment period to 60 days in order to enable the Department to adopt changes to the interim final rule at the earliest possible date, taking into account Congress' expectation that regulations would be issued not later than 180 days from enactment of the PPA on August 17, 2006. The Department believes that, in light of the limited number of issues presented for consideration by the interim final rule, the provided 60-day comment period affords interested persons an adequate amount of time to analyze the rule and submit comments. F. Regulatory Impact Analysis Executive Order 12866 Statement Under Executive Order 12866 (58 FR 51735), the Department must determine whether a regulatory action is “significant” and therefore subject to review by the Office of Management and Budget (OMB). Section 3(f) of the Executive Order defines a “significant regulatory action” as an action that is likely to result in a rule

(1)having an annual effect on the economy of $100 million or more, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as “economically significant”);

(2)creating serious inconsistency or otherwise interfering with an action taken or planned by another agency;

(3)materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4)raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Although the Department believes that this regulatory action is not economically significant within the meaning of section 3(f)(1) the Executive Order, the action has been determined to be significant within the meaning of section 3(f)(4) of the Executive Order, and the Department accordingly provides the following assessment of its potential costs and benefits. As elaborated below, the Department believes that the benefits of the interim final rule will be substantial and will justify its costs. In assessing the costs and benefits of the interim final rule and associated provisions of the Act, the Department endeavored to consider all of the major activities that will be carried out pursuant to them. For example, investment managers will adopt, and effect cross-trades in accordance with, policies and procedures that clearly describe the criteria governing fair and equitable cross-trading, including the pricing of securities when cross-traded and the methods for allocating cross-trades among accounts. Investment managers will also appoint compliance officers responsible for determining and notifying participating plans' fiduciaries whether the applicable policies and procedures have been followed. These activities will help equip plan fiduciaries to evaluate cross-trading programs, and will help ensure that the cross-trades executed under such programs benefit all parties whose assets are cross-traded, including participating plans. These activities will entail some cost (a part of which is quantified later in this preamble in connection with the Department's information collection request). The Department believes that many of these activities are already common practice among investment managers that operate high-quality, successful cross-trading programs. As such, much of the cost of these activities is not properly classified as a cost of the interim final rule or associated provisions of the Act. The Department also believes that all of these activities are a necessary and efficient means of safeguarding plan assets invested in accounts subject to cross-trading programs. The activities are necessary because plans' investments, and the retirement benefits they will provide for participants and beneficiaries, might otherwise be at avoidable risk. Investment managers operating cross-trading programs owe loyalty to both parties to any cross-trade (as well as to all prospective parties to any cross-trade). Such parties' interests in relation to the cross-trades often conflict. Accordingly, the Department believes that the transparency and protections provided by the interim final rule and associated provisions of the Act are essential to reducing the risks to the security of pension plan investments that are inherent in allowing cross-trading involving plans. The activities are efficient insofar as they exploit investment managers' and compliance officers' comparative advantage at performing certain functions that help fiduciaries protect participants' interests. Investment managers, as the designers and operators of cross-trading programs, are well positioned to evaluate the economic merits of alternative permissible approaches. Compliance officers are well situated to monitor programs' adherence to established policies and procedures. The interim final rule and associated provisions of the Act exploit these efficiencies to protect participants' interests both directly (by creating better conditions for cross-trading) and indirectly (by more efficiently delivering relevant information to participating plans' fiduciaries). By assigning duties of designing, operating, and monitoring cross-trading programs to investment managers and compliance officers, and by ensuring that plan fiduciaries will receive timely and relevant information on adherence to established policies and procedures, the interim final rule will improve the ability of plan fiduciaries to satisfy their fiduciary duties in determining the appropriateness of a plan's investment in an account subject to cross-trading. On this basis of this assessment, the Department concludes that the benefits of the interim final rule justify its cost. The Department invites comments on this assessment and conclusion. The Department is considering whether in the future to pursue additional regulatory action under section 408(b)(19) of the Act. For example, should cross-trading programs' policies and procedures be required to include elements that would ensure the programs' compliance with all of the conditions of the exemption enumerated under section 408(b)(19) of the Act? Should compliance officers be responsible for reviewing and reporting on compliance with all such conditions? Expanding the content requirements might add to the cost of developing, distributing, and adhering to them. Expanding compliance officers' responsibilities might increase their costs to carry out those responsibilities. But, as with the requirements of the interim final rule and associated provisions of the Act, such expanded requirements also might favorably leverage investment managers' and compliance officers' comparative advantage at performing certain functions that help fiduciaries protect participants' interests. The Department invites comment on the desirability of additional regulatory action in this area. Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )

(RFA)imposes certain requirements with respect to federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C 551 *et seq.* ) and that are likely to have a significant economic impact on a substantial number of small entities. Unless an agency certifies that a proposed rule will not have a significant economic impact on a substantial number of small entities, section 603 of the RFA requires that the agency present an initial regulatory flexibility analysis at the time of the publication of the notice of proposed rule-making describing the impact of the rule on small entities and seeking public comment on such impact. Because this rule is being issued as an interim final rule, the RFA does not apply and the Department is not required to either certify that the rule will not have a significant impact on a substantial number of small businesses or conduct an initial regulatory flexibility analysis. Nevertheless, the Department has considered the likely impact of the interim rule on small entities in connection with its assessment under Executive Order 12866, described above, and believes this rule will not have a significant impact on a substantial number of small entities. For purposes of this discussion, the Department deemed a small entity to be an employee benefit plan with fewer than 100 participants. The basis of this definition is found in section 104(a)(2) of ERISA, which permits the Secretary of Labor to prescribe simplified annual reports for pension plans which cover fewer than 100 participants. Paperwork Reduction Act As part of its continuing effort to reduce paperwork and respondent burden, the Department of Labor conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that the public understands the Department's collection instructions, respondents can provide the requested data in the desired format, the reporting burden (time and financial resources) is minimized, and the Department can properly assess the impact of collection requirements on respondents. Currently, the Department is soliciting comments concerning the information collection request

(ICR)included in the Interim Final Regulation on Statutory Exemption for Cross-Trading. A copy of the ICR may be obtained by contacting the person listed in the PRA Addressee section below. The Department has submitted a copy of the interim final regulation to OMB in accordance with 44 U.S.C. 3507(d) for review of its information collections. The Department and OMB are particularly interested in comments that: • Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; • Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used; • Enhance the quality, utility, and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , by permitting electronic submission of responses. Comments should be sent to the Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503; Attention: Desk Officer for the Employee Benefits Security Administration. Although comments may be submitted through April 13, 2007, OMB requests that comments be received within 30 days of publication of the Notice of Interim Final Rulemaking to ensure their consideration. *PRA Addressee:* Address requests for copies of the ICR to Susan G. Lahne, Office of Policy and Research, U.S. Department of Labor, Employee Benefits Security Administration, 200 Constitution Avenue, NW., Room N-5718, Washington, DC 20210. Telephone:

(202)693-8410; Fax:

(202)219-5333. These are not toll-free numbers. This regulation implements the content requirements for the written cross-trading policies and procedures required under section 408(b)(19)(H) of ERISA, as added by section 611(g) of the PPA. As described earlier in this preamble, section 611(g)(1) of the PPA created a new statutory exemption, added to section 408(b) of ERISA as subsection 408(b)(19), that exempts from the prohibitions of sections 406(a)(1)(A) and 406(b)(2) of ERISA cross-trading transactions involving the purchase and sale of a security between an account holding assets of a pension plan and any other account managed by the same investment manager, provided that certain conditions are satisfied. The information collection provisions of the regulation safeguard plan assets by ensuring that important information about an investment manager's cross-trading program is provided to plan fiduciaries prior to their decision whether to begin or continue participation in the cross-trading program. The information collections also assist in ensuring that investment managers relying on the statutory exemption effect cross-trades in accordance with the criteria described in the policies and procedures. Under the interim final regulation, an investment manager would be required to develop written cross-trading policies and procedures that meet the regulation's content requirements and to disclose them to plan fiduciaries prior to their deciding whether to invest plan assets in an account managed under the cross-trading program. The regulation would provide that the policies and procedures for cross-trading under the new statutory exemption must include detailed explanations and descriptions of certain aspects of the investment manager's cross-trading program, as explained earlier in this preamble. These information collections, therefore, constitute third-party disclosures between an investment manager and plan fiduciaries. Annual Hour Burden Based on data derived primarily from the Form 5500 Series filings for the 2001 to 2003 plan years, which is the most recent reliable data available, the Department estimates that approximately 2,100 6 plans would be eligible to, and would likely, participate in cross-trading programs. 7 Further, the Department estimates that approximately 1,600 investment managers would serve as investment managers for the assets of such eligible plans. 8 On average, the Department estimates that each of the 1,600 investment managers will manage assets of nine plans. Assuming that 90 percent of the 1,600 investment managers have cross-trading programs, investment managers would be required to provide about 13,000 initial disclosures of cross-trading policies and procedures to plan fiduciaries (1,600 investment managers × 9 plans each × 90 percent = 13,000 initial disclosures). The Department assumes that each investment manager would require 10 hours of a financial analyst's time to develop written policies and procedures in the first year. 9 For the 90 percent of the 1,600 investment managers that develop cross-trading programs, the Department estimates an initial annual hour burden of a little over 14,000 hours. 6 All numbers in this burden analysis, apart from the hourly wage rates, have been rounded either to the nearest thousand or the nearest hundred, as appropriate. 7 Under the statutory exemption, “each plan participating in a cross-trading transaction must have assets of at least $100,000,000, except that if the assets of a plan are invested in a master trust containing the assets of plans maintained by employers in the same controlled group (as defined in section 407(d)(7)), the master trust has assets of at least $100,000,000.” 8 Because of a plan of this size likely to use the services of more than one investment manager to invest its assets, the Department has assumed that some of the eligible plans will have assets invested under more than one cross-trading program. 9 The Department assumed that investment managers, which are large, sophisticated financial institutions, will use existing in-house resources to prepare the information and disclosures. Each investment manager would be required to provide the cross-trading policies and procedures as an initial disclosure to each plan. The Department assumes that the initial disclosure will be provided in writing to provide a desired formality of compliance. Thus, the Department estimates that investment managers will be required to provide about 13,000 initial plan disclosures to plan fiduciaries (90 percent of 1,600 investment managers, times nine plans) in the first year in which the exemption is effective. The Department assumes that 3 (three) minutes of clerical time per plan disclosure will be needed to gather the required information, collate and package the information for distribution, and ensure that the information is distributed, for a total of 650 hours of clerical time. In years subsequent to the first year of applicability, the Department estimates that new policies and procedures will be written by investment managers whose policies and procedures have changed and by investment managers that inaugurate new cross-trading programs. For purposes of burden analysis, the Department has assumed that the number of investment managers that either change or newly adopt cross-trading policies and procedures in a subsequent year will equal 14 percent of the investment managers that currently have cross-trading policies and procedures, or about 200 managers. These 200 investment managers will each spend 10 hours of a financial analyst's time to develop new written policies and procedures, for a total of about 2,000 hours each year. These investment managers are also estimated to distribute their new written policies and procedures to 1,800 plan fiduciaries. This would require 90 hours of clerical time. In total, the initial disclosure of cross-trading policies and procedures is estimated to require about 15,000 hours in the first year (14,000 hours of financial analysts' time + 650 hours of clerical time = 14,650 hours total) and about 2,100 hours in each subsequent year (2,000 hours of financial analysts' time + 90 hours of clerical time = 2,090 hours total). The equivalent costs of these hours are $779,000 and $109,000, respectively. 10 10 Hourly wage estimates, for purposes of deriving cost equivalents, were based on data from the Bureau of Labor Statistics Occupational Employment Survey (November 30, 2004) and the 2005 Employment Cost Trends. Clerical wage and benefits estimates were based on metropolitan wage rates for Executive Secretaries and Administrative Assistants. Professional wage and benefits estimates were based on metropolitan wage estimates for Financial Analysis. The resulting hourly wage rates were $53, including both wages and benefits, for professional financial analysts and $25, similarly including both wages and benefits, for clerical personnel. Annual Cost Burden The only additional costs arising from this information collection derive from the direct costs of distribution. The Department believes that initial disclosure of the investment manager's written policies and procedures to plan fiduciaries eligible to participate in the investment manager's cross-trading program will be prepared in paper form and distributed by mail delivery service, courier or some other means of distribution that will create a record of delivery. For the initial disclosures to the plan fiduciaries assumed to receive such disclosure, the Department assumes a distribution cost of $4.00 per plan. This includes the actual cost of distribution, plus any overhead costs associated with printing the documentation. Given that about 90% of the approximately 1,600 investment managers are estimated to engage in cross-trading and that each of them manages on average nine plans, investment managers would have to prepare about 13,000 disclosures to plan fiduciaries. The total initial annual cost burden for distributing the required notice amounts to $52,000. In years subsequent to the first year of applicability, policies and procedures will only have to be distributed by investment managers that develop new policies and procedures. For purposes of burden analysis, the Department has assumed that the number of investment managers that will do so in a subsequent year will be equal to 14 percent of existing investment managers with cross-trading programs, or about 200 managers. The distribution of these new written policies and procedures in a subsequent year to plan fiduciaries will require material and postage costs of $4.00 per plan. Assuming that, on average, the assets of about nine plans are managed by each investment manager, this would require a little more than 1,800 disclosures annually and about $7,300 annually in materials and postage costs. In total, the initial disclosure of policies and procedures is estimated to require about $52,000 for materials and postage in the first year and about $7,300 in each subsequent year. These paperwork burden estimates are summarized as follows: *Type of Review:* New collection. *Agency:* Employee Benefits Security Administration, Department of Labor. *Title:* Statutory Exemption for Cross-Trading of Securities. *OMB Number:* 1210-NEW. *Affected Public:* Business or other for-profit; not-for-profit institutions. *Respondents:* 1,440. *Responses:* 13,000. *Frequency of Response:* Occasionally. *Estimated Total Annual Burden Hours:* 15,000 (first year); 2,100 (subsequent years). *Estimated Total Annual Burden Cost:* $52,000 (first year); $7,300 (subsequent years). Congressional Review Act The interim final rule being issued here is subject to the provisions of the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 *et seq.* ) and will be transmitted to Congress and the Comptroller General for review. The interim final rule is not a “major rule” as that term is defined in 5 U.S.C. 804, because it does not result in

(1)an annual effect on the economy of $100 million or more;

(2)a major increase in costs or prices for consumers, individual industries, or Federal, State, or local government agencies, or geographic regions; or

(3)significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Unfunded Mandates Reform Act For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), the interim final rule does not include any Federal mandate that may result in expenditures by State, local, or tribal governments, or impose an annual burden exceeding $100 million on the private sector. Federalism Statement Executive Order 13132 (August 4, 1999) outlines fundamental principles of federalism and requires Federal agencies to adhere to specific criteria in the process of their formulation and implementation of policies that have substantial direct effects on the States, the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. This interim final rule does not have federalism implications because it has no 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. Section 514 of ERISA provides, with certain exceptions specifically enumerated, that the provisions of Titles I and IV of ERISA supersede any and all laws of the States as they relate to any employee benefit plan covered under ERISA. The requirements implemented in the interim rule do not alter the fundamental provisions of the statute with respect to employee benefit plans, and as such would have no implications for the States or the relationship or distribution of power between the national government and the States. List of Subjects in 29 CFR Part 2550 Employee benefit plans, Employee Retirement Income Security Act, Employee stock ownership plans, Exemptions, Fiduciaries, Investments, Investments foreign, Party in interest, Pensions, Pension and Welfare Benefit Programs Office, Prohibited transactions, Real estate, Securities, Surety bonds, Trusts and trustees. Cross-Trading Policies and Procedures Regulation For the reasons set forth in the preamble, subchapter F, part 2550 of title 29 of the Code of Federal Regulations is amended as follows: SUBCHAPTER F—FIDUCIARY RESPONSIBILITY UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 PART 2550—RULES AND REGULATIONS FOR FIDUCIARY RESPONSIBILITY 1. The authority citation for part 2550 is revised to read as follows: Authority: 29 U.S.C. 1135; sec. 657, Pub. L. 107-16, 115 Stat. 38; sec. 611, Pub. L. 109-280, 120 Stat. 780; and Secretary of Labor's Order No. 1-2003, 68 FR 5374 (Feb. 3, 2003). Sec. 2550.401c-1 also issued under 29 U.S.C. 1101. Sec. 2550.404c-1 also issued under 29 U.S.C. 1104. Sec. 2550.407c-3 also issued under 29 U.S.C. 1107. Sec. 2550.408b-1 also issued under 29 U.S.C. 1108(b)(1) and sec. 102, Reorganization Plan No. 4 of 1978, 3 CFR, 1978 Comp., p. 332, effective Dec. 31, 1978, 44 FR 1065 (Jan. 3, 1978), and 3 CFR, 1978 Comp., p. 332. Sec. 2550.408b-19 also issued under sec. 611, Pub. L. 109-280, 120 Stat. 780, 972, and sec. 102, Reorganization Plan No. 4 of 1978, 3 CFR, 1978 Comp., p. 332, effective Dec. 31, 1978, 44 FR 1065 (Jan. 3, 1979), and 3 CFR, 1978 Comp., p. 332. Sec. 2550.412-1 also issued under 29 U.S.C. 1112. 2. Add § 2550.408b-19 to read as follows: § 2550.408b-19 Statutory exemption for cross-trading of securities.

(a)*In General.*

(1)Section 408(b)(19) of the Employee Retirement Income Security Act of 1974 (the Act) exempts from the prohibitions of section 406(a)(1)(A) and 406(b)(2) of the Act any cross-trade of securities if certain conditions are satisfied. Among other conditions, the exemption requires that the investment manager adopt, and effect cross-trades in accordance with, written cross-trading policies and procedures that are fair and equitable to all accounts participating in the cross-trading program, and that include:

(i)A description of the investment manager's pricing policies and procedures, and

(ii)The investment manager's policies and procedures for allocating cross-trades in an objective manner among accounts participating in the cross-trading program.

(2)Section 4975(d)(22) of the Internal Revenue Code of 1986 (the Code) contains parallel provisions to section 408(b)(19) of the Act. Effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 214 (2000 ed.), transferred the authority of the Secretary of the Treasury to promulgate regulations of the type published herein to the Secretary of Labor. Therefore, all references herein to section 408(b)(19) of the Act should be read to include reference to the parallel provisions of section 4975(d)(22) of the Code.

(3)Section 408(b)(19)(D) of the Act requires that a plan fiduciary for each plan participating in the cross-trades receive in advance of any cross-trades disclosure regarding the conditions under which the cross-trades may take place. This disclosure must be in a document that is separate from any other agreement or disclosure involving the asset management relationship. The disclosure must contain a statement that any investment manager participating in a cross-trading program will have a potentially conflicting division of loyalties and responsibilities to the parties involved in any cross-trade transaction.

(4)The standards set forth in this section apply solely for purposes of determining whether an investment manager's written policies and procedures satisfy the content requirements of section 408(b)(19)(H) of the Act. Accordingly, such standards do not determine whether the investment manager satisfies the other requirements for relief under section 408(b)(19) of the Act.

(b)*Policies and Procedures.*

(1)*In General.* This paragraph specifies the content of the written policies and procedures required to be adopted by an investment manager and disclosed to the plan fiduciary prior to authorizing cross-trading in order for transactions to qualify for relief under section 408(b)(19) of the Act.

(2)*Style and Format.* The content of the policies and procedures required by this paragraph must be clear and concise and written in a manner calculated to be understood by the plan fiduciary authorizing cross-trading. Although no specific format is required for the investment manager's written policies and procedures, the information contained in the policies and procedures must be sufficiently detailed to facilitate a periodic review by the compliance officer of the cross-trades and a determination by such compliance officer that the cross-trades comply with the investment manager's written cross-trading policies and procedures.

(3)*Content.*

(i)An investment manager's policies and procedures must be fair and equitable to all accounts participating in its cross-trading program and reasonably designed to ensure compliance with the requirements of section 408(b)(19)(H) of the Act. Such policies and procedures must include:

(A)A statement of policy which describes the criteria that will be applied by the investment manager in determining that execution of a securities transaction as a cross-trade will be beneficial to both parties to the transaction;

(B)A description of how the investment manager will determine that cross-trades are effected at the “independent current market price” of the security (within the meaning of § 270.17a-7(b) of Title 17, Code of Federal Regulations and SEC no-action and interpretative letters thereunder) as required by section 408(b)(19)(B) of the Act, including the identity of sources used to establish such price;

(C)A description of the procedures for ensuring compliance with the $100,000,000 minimum asset size requirement of section 408(b)(19). A plan or master trust will satisfy the minimum asset size requirement as to a transaction if it satisfies the requirement upon its initial participation in the cross-trading program and on a quarterly basis thereafter;

(D)A description of how the investment manager will mitigate any potentially conflicting division of loyalties and responsibilities to the parties involved in any cross-trade transaction;

(E)A requirement that the investment manager allocate cross-trades among accounts in an objective and equitable manner and a description of the allocation method(s) available to and used by the investment manager for assuring an objective allocation among accounts participating in the cross-trading program. If more than one allocation methodology may be used by the investment manager, a description of what circumstances will dictate the use of a particular methodology;

(F)Identification of the compliance officer responsible for periodically reviewing the investment manager's compliance with section 408(b)(19)(H) of the Act and a statement of the compliance officer's qualifications for this position; and

(G)A statement which describes the scope of the review conducted by the compliance officer, specifically noting whether such review is limited to compliance with the policies and procedures required by 408(b)(19)(H), or whether such review extends to any determinations regarding the overall level of compliance with the other requirements of section 408(b)(19) of the Act.

(ii)Nothing herein is intended to preclude an investment manager from including such other policies and procedures not required by this regulation as the investment manager may determine appropriate to comply with the requirements of section 408(b)(19).

(c)*Definitions.* For purposes of this section:

(1)The term “account” includes any single customer or pooled fund or account.

(2)The term “compliance officer” means an individual designated by the investment manager who is responsible for periodically reviewing the cross-trades made for the plan to ensure compliance with the investment manager's written cross-trading policies and procedures and the requirements of section 408(b)(19)(H) of the Act.

(3)The term “plan fiduciary” means a person described in section 3(21)(A) of the Act with respect to a plan (other than the investment manager engaging in the cross-trades or an affiliate) who has the authority to authorize a plan's participation in an investment manager's cross-trading program.

(4)The term “investment manager” means a person described in section 3(38) of the Act.

(5)The term “plan” means any employee benefit plan as described in section 3(3) of the Act to which Title I of the Act applies or any plan defined in section 4975(e)(1) of the Code.

(6)The term “cross-trade” means the purchase and sale of a security between a plan and any other account managed by the same investment manager. Signed at Washington, DC, this 6th day of February, 2007. Bradford P. Campbell, Acting Assistant Secretary, Employee Benefits Security Administration, Department of Labor. [FR Doc. E7-2290 Filed 2-9-07; 8:45 am] BILLING CODE 4510-29-P DEPARTMENT OF THE INTERIOR Bureau of Land Management 43 CFR Part 1820 [WO-850-1820-XZ-24-1A] RIN 1004-AD34 Application Procedures, Execution and Filing of Forms: Correction of State Office Address for Filings and Recordings, Proper Offices for Recording of Mining Claims AGENCY: Bureau of Land Management, Interior. ACTION: Final rule; correcting amendment. SUMMARY: This correcting amendment amends the regulations pertaining to execution and filing of forms in order to correct the post office box number in the address of the Nevada State Office of the Bureau of Land Management

(BLM)in the list of State Office addresses. EFFECTIVE DATE: February 12, 2007. FOR FURTHER INFORMATION CONTACT: Chandra C. Little, Regulatory Affairs Division,

(202)452-5030. Persons who use a telecommunications device for the deaf

(TDD)may call the Federal Information Relay Service

(FIRS)at 1-800-877-8339, 24 hours a day, 7 days a week. ADDRESSES: You may send inquiries or suggestions to U.S. Department of the Interior, Director (630), Bureau of Land Management, Mail Stop 401 LS, 1849 C Street, NW., Washington, DC 20240; *Attention:* RIN-1004-AD34. SUPPLEMENTARY INFORMATION: I. Background This final rule reflects the administrative action of correcting the address of the Nevada State Office of the BLM. The post office box number was incorrectly stated in the final rule published in the **Federal Register** on April 16, 2003 (68 FR 18554). The street address for the personal filing of documents relating to public lands in Nevada remains the same, and this correcting amendment makes no other changes in filing requirements. Need for Correction As published, the final regulations contain an error which may prove to be misleading and needs to be clarified. List of Subjects in 43 CFR Part 1820 Administrative practice and procedure; Archives and records; Public lands. Dated: February 2, 2007. Ted R. Hudson, Acting Division Chief, Regulatory Affairs. For the reasons discussed in the preamble, the Bureau of Land Management amends 43 CFR part 1820 as follows: PART 1820—APPLICATION PROCEDURES 1. The authority citation for part 1820 continues to read as follows: Authority: 5 U.S.C. 552, 43 U.S.C. 2, 1201, 1733, and 1740. Subpart 1821—General Information 2. Correct § 1821.10 by amending paragraph

(a)by revising the address of the Bureau of Land Management, Nevada State Office, in paragraph

(a)to read as follows: § 1821.10 Where are BLM offices located?

(a)* * * State Offices and Areas of Jurisdiction Nevada State Office, 1340 Financial Boulevard, Reno, Nevada 89502-7147, P.O. Box 12000, Reno, Nevada 89520-0006—Nevada. [FR Doc. E7-2108 Filed 2-9-07; 8:45 am] BILLING CODE 4310-84-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 211 and 252 RIN 0750-AF31 Defense Federal Acquisition Regulation Supplement; Radio Frequency Identification (DFARS Case 2006-D002) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has adopted as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to include additional commodities and locations that require package marking with passive radio frequency identification

(RFID)tags. The rule requires contractors to affix passive RFID tags at the case and palletized unit load levels when shipping packaged petroleum, lubricants, oils, preservatives, chemicals, additives, construction and barrier materials, and medical materials to specified DoD locations. EFFECTIVE DATE: February 12, 2007. FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; telephone

(703)602-0326; facsimile

(703)602-0350. Please cite DFARS Case 2006-D002. SUPPLEMENTARY INFORMATION: A. Background DoD published an interim rule at 71 FR 29084 on May 19, 2006, to implement the second year of DoD's three-year roll-out plan for supplier implementation of RFID. The rule added requirements for contractors supplying materiel to DoD to affix passive RFID tags at the case and palletized unit load levels when shipping packaged petroleum, lubricants, oils, preservatives, chemicals, additives, construction and barrier materials, and medical materials to specified locations. Ten respondents submitted comments on the interim rule. A discussion of the comments is provided below. 1. *Comment:* The DoD Suppliers' Passive RFID Information Guide states that the Air Mobility Command Terminals at Charleston, Dover, and Travis Air Force Bases will be added to the locations that require passive RFID tags in 2006. Instead of Dover Air Force Base, the rule adds the Naval Air Station in Norfolk. *DoD Response:* The locations identified in the DFARS rule are correct. DoD is updating the Suppliers' Passive RFID Information Guide to incorporate these changes. 2. *Comment:* The Air Mobility Commands should be excluded until 2007, when all ship-to locations will require RFID tags. For contracts with transshipment points, such as the Air Mobility Commands, vendors do not know whether or not the ship-to location requires RFID tags when they respond to the solicitation. Vendors are required to contact the Transportation Office for shipping instructions at time of shipment. *DoD Response:* DoD has amended the rule to require RFID tags for all high- priority shipments (Transportation Priority 1). Therefore, vendors do not need to know the aerial shipping port. DoD also has amended the rule to exempt shipments to locations other than Defense Distribution Depots when the contract includes the clause at FAR 52.213-1, Fast Payment Procedure, because of limitations in the Wide Area WorkFlow-Receipt and Acceptance electronic system. 3. *Comment:* DoD should extend the ending date for use of Generation 1 tags, from October 1, 2006, to January or May 2007, or should consider an attrition-based alternative to phase out the Generation 1 tags. In the first year of DoD's supplier implementations of RFID, DoD encouraged vendors to buy large quantities of Generation 1 tags to help keep costs down. If the Generation 1 tags are not accepted after October 1, 2006, vendors who followed DoD's advice will have large inventories of the Generation 1 tags that are no longer acceptable. *DoD Response:* DoD has amended the rule to make the Generation 1 tags acceptable under all new contracts until March 1, 2007. DoD's July 30, 2004, policy statement on RFID (available at *http://www.acq.osd.mil/log/rfid/rfid_policy.htm* ) provided that the Generation 1 technology would no longer be accepted 2 years after the ratification of the UHF Generation 2 Standard. The UHF Generation 2 Standard was ratified in December 2004. DoD has extended the date an additional 5 months to ensure that vendors are not left with large, obsolete inventories of the Generation 1 tags. In addition, DoD will continue to accept Class 0 and Class 1 Generation 1 and Class 1 Generation 2 tags for all shipments under contracts awarded prior to the effective date of the interim rule, May 19, 2006. 4. *Comment:* The contract clause should reference the specific version or effective date of the applicable EPC Tag Data Standard instead of “the most recent EPC Tag Data Standards document,” because an open-ended requirement is inappropriate. Also, the clause should reference the specific versions or effective dates for the tag identity type instructions and receiving reports procedures, instead of the instructions and procedures at the cited Web sites. *DoD Response:* DoD has amended the clause to specify that the contractor must use the tag data standards in effect at the time of contract award. Incorporating the version number or effective date of the standard, instructions, and procedures in the DFARS clause would not be practicable, since these requirements may change. 5. *Comment:* The rule should clarify whether RFID tags are required if a shipment contains both medical materials that require RFID tags and other products that do not require RFID tags. *DoD Response:* If an individual case contains an exempted item, or if an individual pallet contains an exempted case, RFID tags are not required. The rule has been amended to clarify that suppliers should limit mixing of exempted and non-exempted materials. 6. *Comment:* DoD should retain the provision of the original clause that required the passive tag to be “readable at the time of shipment in accordance with MIL-STD-129 (Section 4.9.1.1) readability performance requirements,” instead of the current clause provision that only requires the tag to be “readable,” to ensure the requirement is appropriately bounded. *DoD Response:* Suppliers must apply a readable tag before shipping products to DoD. The clause has been amended to allow suppliers more flexibility in meeting this requirement. 7. *Comment:* Contractors are required to ensure that each passive tag is “readable,” but the rule does not define “readable.” We understand “readable” to mean that the contents of the RFID tag can be read by an EPCglobal-compliant passive RFID reader. *DoD Response:* The respondent's understanding is correct. Suppliers must apply a readable tag before shipping products to DoD. 8. *Comment:* DoD should establish a mechanism to address tags that are readable prior to shipment but non-readable at the point of receipt. A number of factors may affect tag readability during the shipping and receiving process (e.g., damage in transit, reader failure). *DoD Response:* Suppliers are required to affix a readable tag before shipment. DoD maintains a collaborative approach to working with its suppliers. If a trend of non-readable tags is noted for a specific supplier, DoD will work with that supplier to develop a mutually agreeable resolution. 9. *Comment:* DoD should allow use of all ISO-approved RFID tag formats, instead of limiting the tag formats to either EPCglobal or the DoD tagging format utilizing the CAGE codes. Current product cases for medical materials utilize industry standard product bar codes. Medical material suppliers utilize two different consensus standards for bar code identification of their product cases, based on either Health Industry Business Council or GS1 (formerly the Uniform Code Council) formats. One format is predominately used to identify drug products (using the National Drug Code) and the other is used for medical devices or supplies. Each format has unique labeler codes assigned to each company. The data contained in the bar codes is currently used to identify the packages and their contents throughout the supply chain. DoD should allow the use of ISO-approved Issuing Agency Codes

(IAC)instead of limiting supplier identification to the EPCglobal or CAGE code. The use of ISO-approved IACs is currently supported by DoD in its unique identification

(UID)requirements. Allowing for this in the RFID would be consistent with other standards supported by DoD. *DoD Response:* The acceptable tag encoding schemes are those identified in the version of the EPCglobal Tag Data Standard in effect at the time of contract award. These tag data standards include the DoD tag identity which utilizes the CAGE code. 10. *Comment:* DoD should allow RFID tag capacity of 128 Bit and higher. High capacity tags are now common, and are more likely to be used by suppliers. Many RFID tags have capacity of several kilobits. *DoD Response:* Under the DFARS rule, DoD will only accept tags encoded according to the tag data standards defined in the EPCglobal Tag Data Standards documents available at *http://www.epcglobalinc.org/standards/* . DoD will review the potential for accepting higher capacity tag data types as the standards for those tags are ratified. 11. *Comment:* The RFID frequency specified in the DoD documents is 915 MHz. Electromagnetic interference can cause medical device failures and malfunctions. 915 MHz is within the frequency band that medical devices are tested and have been shown to function during and after exposure. Medical devices are immune to 915 MHz signals at FCC regulated levels. *DoD Response:* DoD requires passive tags on the packaging of items, not on the item itself. The tags themselves do not emit any electromagnetic signal unless interrogated by an RF reader. 12. *Comment:* DoD should work with the U.S. Food and Drug Administration

(FDA)and compare its Medical Federal Supply Classes to the FDA combination product codes. DoD's RFID program calls for tagging of medical devices but not pharmaceuticals, biological, or in vitro diagnostics. Drug, biologics, and devices can be used in combination to potentially enhance the safety and/or effectiveness of either product used alone. The appropriate classification of these combination products is sometimes unclear. FDA's Office of Combination Products addresses concerns with drug-device, drug-biologic, and device-biologic combination products. FDA is investigating the use of unique device identification to improve patient safety, by reducing medical errors, facilitating device recalls, and improving medical device adverse event reporting. No standard has been developed as of yet. *DoD Response:* DoD is working with the FDA to ensure that the RFID requirements are clearly defined and appropriate. In addition, DoD is sharing lessons learned from its work with uniquely identifying items with the FDA. 13. *Comment:* Adding repairable and consumable items to the supplies that require passive RFID tags will add time and costs to low-dollar items. Small businesses are already burdened with the unique item identification

(UID)requirements for certain items under $5,000. The RFID threshold is even lower. Is there any value added and cost trade-off to keep track of low-dollar DoD inventory on a resistor or relay, etc? *DoD Response:* The benefits of applying RFID outweigh the costs. The dollar value of an item is not an accurate measure of its mission criticality (e.g., an inexpensive part that could keep a plane from flying its mission would be considered mission critical). Repair parts and components, including repairables and consumables, must be tagged for shipments to one of the specified locations. RFID technology is simply a faster, better way to acquire data for logistics and financial systems and will be a benefit for all items DoD manages. 14. *Comment:* The rule should exempt limited volume suppliers from RFID requirements, because implementation and operation of an RFID system can be costly. Also, many suppliers do not currently have RFID capability and do not have requirements for RFID tagging for other customers. The cost to implement an initial system in one shipping location is approximately $100,000. The cost for additional shipping locations is approximately $65,000. Additional implementation costs would be incurred for automatically generated advance shipment notices, or significant operational costs would be incurred for manually inputted advance shipment notices. Measurable benefits of RFID do not exceed the costs for small businesses. With only one contract that requires RFID tags, we are using a contract labeler to make the tags instead of investing significant amounts of money ($12,000 or more) in cutting edge technology. We are hesitant to invest in the technology, because we have no idea of the volume of future requirements. We have to price each tag to recoup our costs. *DoD Response:* Outfitting an entire shipping location with RFID capability could be expensive. However, compliance with DoD's requirement is significantly less complex. The basic requirement is that materiel shipped to DoD must be tagged. A variety of low-cost solutions that enable suppliers to comply with DoD's requirement are available in the marketplace. A supplier can buy an RFID reader that reads and writes the tags for approximately $2,000 and can purchase pre-printed tags for as little as $0.70 per tag. 15. *Comment:* DoD should streamline the contract clause by referencing the locations that require RFID tags in an attachment to the contract instead of listing the locations in the clause, to be consistent with DoD's DFARS transformation initiative and to eliminate the need for additional changes to the clause to add additional ship-to locations. *DoD Response:* In 2007, DoD plans to add the remaining locations that will require RFID tags and will consider a more generic clause that allows the contracting officer to specify the locations that require RFID tags. This change will be vetted through the rulemaking process. 16. *Comment:* DoD should add language to encourage the use of a Single Process Initiative

(SPI)where practicable. *DoD Response:* Suppliers can use an SPI, provided the single process meets contract requirements. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD has prepared a final regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows: DoD has developed a three-year roll-out plan for supplier implementation of RFID. This rule finalizes the interim rule published in the **Federal Register** at 71 FR 29084 on May 19, 2006, to address the second year of the plan. The rule amends the clause at DFARS 252.211-7006, Radio Frequency Identification. The rule contains requirements for DoD contractors supplying materiel to DoD to affix passive RFID tags at the case and palletized unit load levels when shipping packaged petroleum, lubricants, oils, preservatives, chemicals, additives, construction and barrier materials, and medical materials to specified DoD locations. Prior to this rule, DoD contractors were already required to print and affix military shipping labels to every package delivered to DoD. For packaged operational rations, clothing, individual equipment, tools, personal demand items, and weapon system repair parts shipped to the Defense Distribution Depot in Susquehanna, PA, or the Defense Distribution Depot in San Joaquin, CA, DoD contractors also were already required to affix passive RFID tags at the case and palletized unit load levels. To create an automated and sophisticated end-to-end supply chain, DoD is dependent upon initiating the technology at the point of origin, the DoD commercial suppliers. Without the assistance of the DoD supplier base to begin populating the DoD supply chain with passive RFID tags, a fully integrated, highly visible, automated end-to-end supply chain is untenable. As a result of comments received on the interim rule, the final rule extends the date for the acceptability of the EPC Class 0 and Class 1 Generation 1 tags until March 1, 2007, clarifies the shipments that require RFID tags, and exempts shipments to locations other than Defense Distribution Depots when the contract includes the clause at FAR 52.213-1, Fast Payment Procedures. The rule may affect businesses interested in receiving contracts for packaged petroleum, lubricants, oils, preservatives, chemical, additives, construction and barrier materials, and medical materials that will be shipped to specified DoD locations. Options to comply with the requirements of the rule can be as simple as replacing existing military shipping label printers with RFID-enabled printers. This will allow DoD contractors to print military shipping labels with embedded RFID tags. The regulatory flexibility analysis DoD prepared for the three-year roll-out plan for supplier implementation of RFID at *http://www.acq.osd.mil/log/rfid/regflex.htm* details other options and approximate costs to comply. C. Paperwork Reduction Act The rule increases the information collection requirements approved under Office of Management and Budget

(OMB)Control Number 0704-0434. The rule requires contractors to provide an electronic advance shipment notice in accordance with the procedures at *http://www.acq.osd.mil/log/rfid/advance_shipment_ntc.htm,* to associate RFID tag data with the corresponding shipment. OMB has approved the increased information collection requirements for use through December 31, 2009. List of Subjects in 48 CFR Parts 211 and 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Accordingly, the interim rule amending 48 CFR Parts 211 and 252, which was published at 71 FR 29084 on May 19, 2006, is adopted as a final rule with the following changes: 1. The authority citation for 48 CFR Parts 211 and 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 211—DESCRIBING AGENCY NEEDS 2. Section 211.275-2 is revised to read as follows: 211.275-2 Policy.

(a)Except as provided in paragraph

(b)of this subsection, radio frequency identification (RFID), in the form of a passive RFID tag, is required for individual cases and palletized unit loads that—

(1)Contain items in any of the following classes of supply, as defined in DoD 4140.1-R, DoD Supply Chain Materiel Management Regulation, AP1.1.11:

(i)Subclass of Class I—Packaged operational rations.

(ii)Class II—Clothing, individual equipment, tentage, organizational tool kits, hand tools, and administrative and housekeeping supplies and equipment.

(iii)Class IIIP—Packaged petroleum, lubricants, oils, preservatives, chemicals, and additives.

(iv)Class IV—Construction and barrier materials.

(v)Class VI—Personal demand items (non-military sales items).

(vi)Subclass of Class VIII—Medical materials (excluding pharmaceuticals, biologicals, and reagents—suppliers should limit the mixing of excluded and non-excluded materials).

(vii)Class IX—Repair parts and components including kits, assemblies and subassemblies, reparable and consumable items required for maintenance support of all equipment, excluding medical-peculiar repair parts; and

(2)Will be shipped to one of the following locations:

(i)Defense Distribution Depot, Susquehanna, PA: DoDAAC W25G1U or SW3124.

(ii)Defense Distribution Depot, San Joaquin, CA: DoDAAC W62G2T or SW3224.

(iii)Defense Distribution Depot, Albany, GA: DoDAAC SW3121.

(iv)Defense Distribution Depot, Anniston, AL: DoDAAC W31G1Z or SW3120.

(v)Defense Distribution Depot, Barstow, CA: DoDAAC SW3215.

(vi)Defense Distribution Depot, Cherry Point, NC: DoDAAC SW3113.

(vii)Defense Distribution Depot, Columbus, OH: DoDAAC SW0700.

(viii)Defense Distribution Depot, Corpus Christi, TX: DoDAAC W45H08 or SW3222.

(ix)Defense Distribution Depot, Hill, UT: DoDAAC SW3210.

(x)Defense Distribution Depot, Jacksonville, FL: DoDAAC SW3122.

(xi)Defense Distribution Depot, Oklahoma City, OK: DoDAAC SW3211.

(xii)Defense Distribution Depot, Norfolk, VA: DoDAAC SW3117.

(xiii)Defense Distribution Depot, Puget Sound, WA: DoDAAC SW3216.

(xiv)Defense Distribution Depot, Red River, TX: DoDAAC W45G19 or SW3227.

(xv)Defense Distribution Depot, Richmond, VA: DoDAAC SW0400.

(xvi)Defense Distribution Depot, San Diego, CA: DoDAAC SW3218.

(xvii)Defense Distribution Depot, Tobyhanna, PA: DoDAAC W25G1W or SW3114. (xviii) Defense Distribution Depot, Warner Robins, GA: DoDAAC SW3119.

(xix)Air Mobility Command Terminal, Charleston Air Force Base, Charleston, SC: Air Terminal Identifier Code CHS.

(xx)Air Mobility Command Terminal, Naval Air Station, Norfolk, VA: Air Terminal Identifier Code NGU.

(xxi)Air Mobility Command Terminal, Travis Air Force Base, Fairfield, CA: Air Terminal Identifier Code SUU.

(xxii)A location outside the contiguous United States when the shipment has been assigned Transportation Priority 1.

(b)The following are excluded from the requirements of paragraph

(a)of this subsection:

(1)Shipments of bulk commodities.

(2)Shipments to locations other than Defense Distribution Depots when the contract includes the clause at FAR 52.213-1, Fast Payment Procedures. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 3. Section 252.211-7006 is amended as follows: a. By revising the clause date; b. In paragraph

(a)by revising the definition of “Passive RFID tag”; c. By revising paragraph (b)(1)(i)(F); d. By adding paragraph (b)(1)(ii)(V); and e. By revising paragraphs (b)(2) and

(c)and paragraph

(d)introductory text to read as follows: 252.211-7006 Radio Frequency Identification. RADIO FREQUENCY IDENTIFICATION (FEB 2007)

(a)* * * *Passive RFID tag* means a tag that reflects energy from the reader/interrogator or that receives and temporarily stores a small amount of energy from the reader/interrogator signal in order to generate the tag response.

(1)Until February 28, 2007, the acceptable tags are—

(i)EPC Class 0 passive RFID tags that meet the EPCglobal Class 0 specification; and

(ii)EPC Class 1 passive RFID tags that meet the EPCglobal Class 1 specification. This includes both the Generation 1 and Generation 2 Class 1 specifications.

(2)Beginning March 1, 2007, the only acceptable tags are EPC Class 1 passive RFID tags that meet the EPCglobal Class 1 Generation 2 specification. Class 0 and Class 1 Generation 1 tags will no longer be accepted after February 28, 2007. (b)(1) * * *

(i)* * *

(F)Subclass of Class VIII—Medical materials (excluding pharmaceuticals, biologicals, and reagents—suppliers should limit the mixing of excluded and non-excluded materials).

(ii)* * *

(V)A location outside the contiguous United States when the shipment has been assigned Transportation Priority 1.

(2)The following are excluded from the requirements of paragraph (b)(1) of this clause:

(i)Shipments of bulk commodities.

(ii)Shipments to locations other than Defense Distribution Depots when the contract includes the clause at FAR 52.213-1, Fast Payment Procedures.

(c)The Contractor shall—

(1)Ensure that the data encoded on each passive RFID tag are unique (i.e., the binary number is never repeated on any and all contracts) and conforms to the requirements in paragraph

(d)of this clause;

(2)Use passive tags that are readable; and

(3)Ensure that the passive tag is affixed at the appropriate location on the specific level of packaging, in accordance with MIL-STD-129 (Section 4.9.2) tag placement specifications.

(d)*Data syntax and standards.* The Contractor shall encode an approved RFID tag using the instructions provided in the EPC TM Tag Data Standards in effect at the time of contract award. The EPC TM Tag Data Standards are available at *http://www.epcglobalinc.org/standards/.* [FR Doc. E7-2209 Filed 2-9-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 213 RIN 0750-AF42 Defense Federal Acquisition Regulation Supplement; Aviation Into-Plane Reimbursement Card (DFARS Case 2006-D017) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text pertaining to DoD fuel card programs. The rule addresses use of the Aviation Into-plane Reimbursement card for purchases of aviation fuel and oil. EFFECTIVE DATE: February 12, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Gary Delaney, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone

(703)602-8384; facsimile

(703)602-0350. Please cite DFARS Case 2006-D017. SUPPLEMENTARY INFORMATION: A. Background DoD uses the Aviation Into-plane Reimbursement

(AIR)card for purchases of aviation fuel and oil at commercial airport facilities. The AIR card is a centrally-billed, Government commercial purchase card that is an alternative to use of the Standard Form 44, Purchase Order-Invoice-Voucher. This final rule amends DFARS 213.306 to address use of the AIR card. In addition, the rule amends DFARS 213.301 to clarify that DoD has multiple fuel card programs. DoD published a proposed rule at 71 FR 34867 on June 16, 2006. DoD received no comments on the proposed rule and has adopted the proposed rule as a final rule without change. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the Aviation Into-plane Reimbursement card is an alternative to use of the Standard Form 44, Purchase Order-Invoice-Voucher, designed primarily for on-the-spot, over-the-counter purchases while away from the purchasing office or at isolated activities. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 213 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Part 213 is amended as follows: PART 213—SIMPLIFIED ACQUISITION PROCEDURES 1. The authority citation for 48 CFR Part 213 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 213.301 [Amended] 2. Section 213.301 is amended in paragraph (4), in the second sentence, by removing “program” and adding in its place “programs”. 3. Section 213.306 is amended by revising paragraph (a)(1)(A) to read as follows: 213.306 SF 44, Purchase Order-Invoice-Voucher. (a)(1) * * *

(A)Aviation fuel and oil. The Aviation Into-plane Reimbursement

(AIR)card may be used instead of an SF 44 for aviation fuel and oil (see *http://www.desc.dla.mil* ); [FR Doc. E7-2210 Filed 2-9-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 225 RIN 0750-AF32 Defense Federal Acquisition Regulation Supplement; Berry Amendment Exceptions—Acquisition of Perishable Food and Fish, Shellfish, or Seafood (DFARS Case 2006-D005) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has adopted as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 831 of the National Defense Authorization Act for Fiscal Year 2006 and Section 8118 of the Defense Appropriations Act for Fiscal Year 2005. These statutes relate to the acquisition of perishable foods for DoD activities located outside the United States, and the acquisition of domestic fish, shellfish, and seafood. EFFECTIVE DATE: February 12, 2007. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone

(703)602-0328; facsimile

(703)602-0350. Please cite DFARS Case 2006-D005. SUPPLEMENTARY INFORMATION: A. Background DoD published an interim rule at 71 FR 34832 on June 16, 2006, to implement Section 831 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163) and Section 8118 of the Defense Appropriations Act for Fiscal Year 2005 (Pub. L. 108-287). Section 831 of Public Law 109-163 amended 10 U.S.C. 2533a(d)(3) to expand the exception that permits the acquisition of non-domestic perishable foods by activities located outside the United States, to also permit the acquisition of such foods by activities that are making purchases on behalf of activities located outside the United States. Section 8118 of Public Law 108-287 established a permanent requirement for the acquisition of domestic fish, shellfish, and seafood, including fish, shellfish, and seafood contained in foods manufactured or processed in the United States. This requirement previously had been included in Defense Appropriations Acts on an annual basis. DoD received no comments on the interim rule. Therefore, DoD has adopted the interim rule as a final rule without change. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule applies only to:

(1)The acquisition of perishable foods for DoD activities located outside the United States, and

(2)continuation of the existing requirement for the acquisition of domestic fish, shellfish, and seafood. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 225 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Interim Rule Adopted as Final Without Change Accordingly, the interim rule amending 48 CFR Part 225, which was published at 71 FR 34832 on June 16, 2006, is adopted as a final rule without change. [FR Doc. E7-2206 Filed 2-9-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 233 RIN 0750-AE01 Defense Federal Acquisition Regulation Supplement; Protests, Disputes, and Appeals (DFARS Case 2003-D010) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text addressing procedures for processing of contractor claims submitted under DoD contracts. The rule removes obsolete text and relocates text to the DFARS companion resource, Procedures, Guidance, and Information. EFFECTIVE DATE: February 12, 2007. FOR FURTHER INFORMATION CONTACT: Ms. Felisha Hitt, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone

(703)602-0310; facsimile

(703)602-0350. Please cite DFARS Case 2003-D010. SUPPLEMENTARY INFORMATION: A. Background This final rule— • Removes text at DFARS 233.204 regarding research of a contractor's history of filing claims during a contracting officer's review of a current claim. Text on this subject has been relocated to the DFARS companion resource, Procedures, Guidance, and Information

(PGI)at *http://www.acq.osd.mil/dpap/dars/pgi;* and • Revises DFARS 233.210 to remove an obsolete cross-reference and to add a reference to the guidance added to PGI regarding review of a contractor's claim. DoD published a proposed rule at 71 FR 34867 on June 16, 2006. The proposed rule had provided for total elimination of the text at DFARS 233.204 and 233.210. One source submitted comments on the proposed rule, recommending that, instead of total elimination, the text at DFARS 233.204 should be relocated to PGI. DoD has adopted this recommendation and has included the corresponding changes in the final rule. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule makes no significant change to DoD policy regarding consideration of claims submitted by contractors. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 233 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Part 233 is amended as follows: PART 233—PROTESTS, DISPUTES, AND APPEALS 1. The authority citation for 48 CFR Part 233 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 233.204 [Removed] 2. Section 233.204 is removed. 3. Section 233.210 is revised to read as follows: 233.210 Contracting officer's authority. See PGI 233.210 for guidance on reviewing a contractor's claim. [FR Doc. E7-2211 Filed 2-9-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 237 RIN 0750-AF37 Defense Federal Acquisition Regulation Supplement; Security-Guard Services Contracts (DFARS Case 2006-D011) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has adopted as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 344 of the National Defense Authorization Act for Fiscal Year 2006. Section 344 extends, through September 30, 2007, the period during which contractor performance of security-guard functions at military installations or facilities is authorized to fulfill additional requirements resulting from the terrorist attacks on the United States on September 11, 2001. EFFECTIVE DATE: February 12, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Gary Delaney, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone

(703)602-8384; facsimile

(703)602-0350. Please cite DFARS Case 2006-D011. SUPPLEMENTARY INFORMATION: A. Background DoD published an interim rule at 71 FR 34833 on June 16, 2006, to implement Section 344 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163). Section 344 extends, through September 30, 2007, the period during which contractor performance of security-guard functions at military installations or facilities is authorized to fulfill additional requirements resulting from the terrorist attacks on the United States on September 11, 2001. DoD received no comments on the interim rule. Therefore, DoD has adopted the interim rule as a final rule without change. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* Although the rule may provide opportunities for small business concerns to receive contracts for the performance of security-guard functions at military installations or facilities, the economic impact is not expected to be substantial. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 237 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Interim Rule Adopted as Final Without Change Accordingly, the interim rule amending 48 CFR Part 237, which was published at 71 FR 34833 on June 16, 2006, is adopted as a final rule without change. [FR Doc. E7-2208 Filed 2-9-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 252 RIN 0750-AF43 Defense Federal Acquisition Regulation Supplement; Free Trade Agreement—El Salvador, Honduras, and Nicaragua DFARS Case 2006-D019 AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has adopted as final, without change, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the Dominican Republic-Central America-United States Free Trade Agreement with respect to El Salvador, Honduras, and Nicaragua. The Free Trade Agreement waives the applicability of the Buy American Act for some foreign supplies and construction materials and specifies procurement procedures designed to ensure fairness. EFFECTIVE DATE: February 12, 2007. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone

(703)602-0328; facsimile

(703)602-0350. Please cite DFARS Case 2006-D019. SUPPLEMENTARY INFORMATION: A. Background DoD published an interim rule at 71 FR 34834 on June 16, 2006, to implement the Dominican Republic-Central America-United States Free Trade Agreement with respect to El Salvador, Honduras, and Nicaragua. The rule amended the appropriate DFARS provisions and clauses to reflect the addition of El Salvador, Honduras, and Nicaragua as Free Trade Agreement countries. DoD received no comments on the interim rule. Therefore, DoD has adopted the interim rule as a final rule without change. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* Although the rule opens up DoD procurement to the products of El Salvador, Honduras, and Nicaragua, DoD does not believe there will be a significant economic impact on U.S. small businesses. DoD applies the trade agreements to only those non-defense items listed at DFARS 225.401-70, and procurements that are set aside for small businesses are exempt from application of the trade agreements. C. Paperwork Reduction Act This rule affects the certification and information collection requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, currently approved under Office of Management and Budget Control Number 0704-0229. The impact, however, is negligible. List of Subjects in 48 CFR Part 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Interim Rule Adopted as Final Without Change Accordingly, the interim rule amending 48 CFR Part 252, which was published at 71 FR 34834 on June 16, 2006, is adopted as a final rule without change. [FR Doc. E7-2207 Filed 2-9-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 91 [1018-AU94] Revision of Migratory Bird Hunting and Conservation Stamp Contest Regulations AGENCY: Fish and Wildlife Service, Interior. ACTION: Final rule. SUMMARY: We, the Fish and Wildlife Service (Service, or we), revise the regulations governing the annual Migratory Bird Hunting and Conservation Stamp Contest [also known as the Federal Duck Stamp Contest (contest)]. We now provide a special exemption that allows recent winning artists to submit entries for the 2007 contest only. We also clarify in our regulations our longstanding practice to include artwork from the third round of judging in an art tour for 1 year; early return of the artwork to the artist will make the artist ineligible for the next three contests. Finally, we correct minor grammatical errors in the contest procedures. DATES: This rule is effective on March 14, 2007. FOR FURTHER INFORMATION CONTACT: Patricia Fisher, Chief, Federal Duck Stamp Office,

(703)358-2000 (phone), *duckstamps@fws.gov* (e-mail), or

(703)358-2009 (fax). SUPPLEMENTARY INFORMATION: On September 27, 2006, we published in the **Federal Register** (71 FR 56443) a proposed rule to amend the regulations governing the annual Migratory Bird Hunting and Conservation Stamp Contest [also known as the Federal Duck Stamp Contest (contest)]. In brief, this rule adopts those proposed changes in full, as described below. Changes to the Regulations at 50 CFR Part 91 We are making all the changes detailed in our proposed rule (September 27, 2006, 71 FR 56443). The changes affect the regulations governing the contest in the Code of Federal Regulations

(CFR)at 50 CFR 91. Exemption for Winning Artists Section 91.12 contains a 3-year prohibition against winning artists participating in the three successive contests. We put this rule into place as a way to ensure that a variety of artists can compete fairly and to avoid allowing a single individual to repeatedly win the contest. However, we are exempting the 2007 contest from this rule, because the 2007 contest marks an important milestone, since it will choose the 75th Federal Duck Stamp. This significant event is very important for all wildlife artists, and we therefore allow everyone an equal chance to compete. We lift this prohibition for the 2007 contest only. We further clarify that this exemption will not be counted towards the remainder of the waiting period for 2004-06 winning artists. These recent winning artists must complete their 3-year waiting periods in full and will have to serve the remainder of their terms after the 2007 contest. Two examples follow: *(1) Ann wins the 2006 contest. She may enter the special 2007 contest. Regardless of whether she wins 2007 or not, she is ineligible to enter in 2008, 2009, or 2010. She may enter in 2011.* *(2) Bob wins the 2005 contest. He was ineligible to enter the 2006 contest. He may enter the special 2007 contest. Regardless of whether he wins 2007 or not, he is ineligible to enter in 2008 or 2009, but he may enter in 2010.* Contest Procedures Section 91.24 paragraphs

(g)and

(h)have typographical errors. We correct the errors in our presentation of the possible numerical scores that can be awarded by judges. Post-Contest Finalists' Tour Section 91.31 specifies the return of artwork after the contest has concluded. We clarify the portion of the regulations that mentions the possibility of the artwork being sent on a tour to appear at one or more wildlife art exhibitions. Recently artists believed that the 120-day limit was all that had to be honored. We clarify this requirement. The art tour is a chance for the public to see the finalists in the Federal Duck Stamp Contest. These are the entries that made it to the third and final round of judging. The tour travels to various locations across the country and allows the public to see some of the best examples of wildlife art. With the tour, we engage new artists to enter the contest and encourage the general public to purchase more stamps. Unfortunately, some artists have chosen to sell their pieces before or during the art tour and have requested to remove them from the tour. This lessens the quality of the paintings available for the public to view and is against the spirit of the tour. We clarify that the tour lasts for 1 year after the date on which the winner is judged, and entries will be returned after that year. We also codify that artists who remove their artwork before the tour is complete will be ineligible to participate in the next three contests. Background For the history of the Federal Duck Stamp Program and the contest, please see our proposed rule for a previous unrelated change to the duck stamp regulations (April 12, 2006, 71 FR 18697). Comments on and Change From the Proposed Rule We received comments on the proposed rule regarding the section addressing the number of times a Judge may serve. The Federal Duck Stamp Office will reconsider that section and if warranted, include changes in future rules. Required Determinations Regulatory Planning and Review (E.O. 12866) This document is not a significant rule and is not subject to review by the Office of Management and Budget under Executive Order (E.O.) 12866. 1. This rule will not have an annual effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. 2. This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. The rule deals solely with the contest. No other Federal agency has any role in regulating this endeavor. 3. This rule does not alter budgetary effects or entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. There are no entitlements, grants, user fees, or loan programs associated with the regulation of the contest. 4. This rule does not raise novel legal or policy issues. This rule is primarily a reorganization and clarification of existing regulations. New provisions proposed in the rule are in compliance with other laws, policies, and regulations. Regulatory Flexibility Act The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act

(RFA)(5 U.S.C. 601 *et seq.* ). The changes are intended primarily to clarify the requirements for the contest. In addition, these changes do not affect the information collected. These changes will affect individuals, not businesses or other small entities as defined in the RFA. Small Business Regulatory Enforcement Fairness Act (SBREFA) This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: 1. Does not have an annual effect on the economy of $100 million or more. 2. Does not cause a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions. 3. 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. Unfunded Mandates Reform Act This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 *et seq.* ) is not required. Takings (E.O. 12630) In accordance with E.O. 12630, this rule does not have significant takings implications. A takings implication assessment is not required. Federalism (E.O. 13132) In accordance with E.O. 13132, this rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Assessment. A Federalism Assessment is not required. Civil Justice Reform (E.O. 12988) In accordance with E.O. 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of the Order. Paperwork Reduction Act This rule does not contain new or revised information collections for which Office of Management and Budget approval is required under the Paperwork Reduction Act. An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. National Environmental Policy Act This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (42 U.S.C. 4371 *et seq.* ) is therefore not required. Government-to-Government Relationship With Tribes Under the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), and 512 DM 2, we have evaluated possible effects on federally recognized Indian Tribes and have determined that there are no effects. Energy Supply, Distribution, or Use On May 18, 2001, the President issued E.O. 13211 on regulations that significantly affect energy supply, distribution, and use. E.O. 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule revises the current regulations in 50 CFR part 91 that govern the contest. This rule is not expected to significantly affect energy supplies, distribution, and use. Therefore, this action is a not a significant energy action and no Statement of Energy Effects is required. List of Subjects in 50 CFR Part 91 Hunting, Wildlife. Regulation Promulgation Accordingly, we amend part 91, subchapter G of chapter I, title 50 of the Code of Federal Regulations, as follows: PART 91—[AMENDED] 1. The authority citation for part 91 continues to read as follows: Authority: 5 U.S.C. 301; 16 U.S.C. 718j; 31 U.S.C. 9701. 2. Revise § 91.12 to read as follows: § 91.12 Contest eligibility.

(a)U.S. citizens, nationals, or resident aliens are eligible to participate in the contest.

(b)Any person who has won the contest during the preceding 3 years is ineligible to submit an entry in the current year's contest. For the 75th contest

(2007)only, any artist, even those who won the 2004, 2005, and 2006 contests may enter. However, 2004, 2005, and 2006 winners must still fulfill their 3-year ineligibility terms after the 2007 contest. The 2007 contest will not count toward fulfilling ineligibility terms of 2004, 2005, or 2006 winners.

(c)All entrants must be at least 18 years of age by the contest opening date (see § 91.11) to participate in the contest.

(d)Contest judges and their relatives are ineligible to submit an entry.

(e)All entrants must submit a nonrefundable fee of $125.00 by cashier's check, certified check, or money order made payable to U.S. Fish and Wildlife Service. Personal checks will not be accepted.

(f)All entrants must submit a signed Reproduction Rights Agreement and a signed Display and Participation Agreement. 3. In § 91.24, revise paragraphs

(g)and

(h)to read as follows: § 91.24 Contest procedures.

(g)In the second round of judging, each entry selected in the first round, plus the additional entries selected by judges per paragraph

(d)of this section, will be shown one at a time to the judges by the Contest Coordinator or by a contest staff member. Each judge will vote by indicating a numerical score of one (1), two (2), three (3), four (4), or five

(5)for each entry. The scores will be totaled to provide each entry's score. The five entries receiving the five highest scores will be advanced to the third round of judging.

(h)In the third round of judging, the judges will vote on the remaining entries using the same method as in round two, except that they will indicate a numerical score of three (3), four (4), or five

(5)for each entry. The Contest Coordinator will tabulate the final votes and present them to the Director, U.S. Fish and Wildlife Service, who will announce the winning entry as well as the entries that placed second and third. 4. Revise § 91.31 to read as follows: § 91.31 Return of entries after contest.

(a)All entries will be returned by certified mail to the participating artists within 120 days after the contest, unless the artwork is selected to appear at one or more wildlife art expositions. If artwork is returned to the Service because it is undelivered or unclaimed (this may happen if an artist changes address), the Service will not be obligated to trace the location of the artist to return the artwork. Any artist who changes his or her address is responsible for notifying the Service of the change. All unclaimed entries will be destroyed 1 year after the date of the contest.

(b)Artists in the third round of judging will be chosen to appear in a national art tour that will last 1 year. The artwork will be returned to the artists after that period in accordance with the signed participation agreement.

(c)An artist may choose to remove his or her artwork from the tour, but will forfeit contest eligibility for three successive contests. Dated: January 31, 2007. David Verhey, Acting Assistant Secretary for Fish and Wildlife and Parks. [FR Doc. E7-2219 Filed 2-9-07; 8:45 am] BILLING CODE 4310-55-P 72 28 Monday, February 12, 2007 Proposed Rules DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Parts 92, 93, 94, and 98 [Docket No. APHIS-2006-0106] RIN 0579-AC33 Importation of Live Swine, Swine Semen, Pork, and Pork Products From the Czech Republic, Latvia, Lithuania, and Poland AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule. SUMMARY: We are proposing to amend the regulations governing the importation of animals and animal products to add the Czech Republic, Latvia, Lithuania, and Poland to the region of the European Union that we recognize as low risk for classical swine fever (CSF). We are also proposing to add the Czech Republic, Latvia, Lithuania, and Poland to the list of regions we consider free from swine vesicular disease

(SVD)and to add Latvia and Lithuania to the list of regions considered free from foot-and-mouth disease

(FMD)and rinderpest. These proposed actions would relieve some restrictions on the importation into the United States of certain animals and animal products from those regions, while continuing to protect against the introduction of CSF, SVD, and FMD, and rinderpest into the United States. DATES: We will consider all comments that we receive on or before April 13, 2007. ADDRESSES: You may submit comments by either of the following methods: *Federal eRulemaking Portal:* Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2006-0106 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2006-0106, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0106. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call

(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Dr. Kelly Rhodes, Regionalization and Evaluation Services, Import, Sanitary Trade Issues Team, National Center for Import and Export, VS, APHIS, 4700 River Road Unit 38, Riverdale, MD 20737-1231;

(301)734-4356. SUPPLEMENTARY INFORMATION: Background The Animal and Plant Health Inspection Service (APHIS) of the United States Department of Agriculture

(USDA)regulates the importation of animals and animal products into the United States to guard against the introduction of animal diseases not currently present or prevalent in this country. The regulations in 9 CFR part 94 (referred to below as the regulations) prohibit or restrict the importation of specified animals and animal products to prevent the introduction into the United States of various animal diseases, including classical swine fever (CSF), foot-and-mouth disease (FMD), and swine vesicular disease (SVD). These are dangerous and destructive communicable diseases of ruminants and swine. In a final rule published in the **Federal Register** on May 19, 2006 (71 FR 29061-29072, Docket No. 02-046-2), we amended the regulations to recognize a region consisting of the 15 Member States of the European Union

(EU)that comprised the EU as of April 30, 2004 (the EU-15), as a single region of low risk for CSF. The EU-15 consists of those Member States that we had recognized as a single region regarding CSF in a final rule published in the **Federal Register** on April 7, 2003 (68 FR 16922-16941, Docket No. 98-090-5), plus additional Member States. The May 19, 2006, final rule established a uniform set of importation requirements related to CSF for the EU-15. Sections 94.9 and 94.10 of the regulations list regions of the world that are declared free of or low-risk for CSF. The EU-15 is currently the only region considered low-risk for CSF; §§ 94.24 and 98.38 specify restrictions necessary to mitigate the risk of introducing CSF into the United States via pork, pork products, live swine, and swine semen from the EU-15. Section 94.12 of the regulations lists regions that are declared free of SVD. Section 94.13 of the regulations lists regions that have been determined to be free of SVD, but that are subject to certain restrictions because of their proximity to or trading relationships with SVD-affected regions. Section 94.1 of the regulations lists regions of the world that are declared free of rinderpest or free of both rinderpest and FMD. Section 94.11 of the regulations lists regions that have been determined to be free of rinderpest and FMD, but that are subject to certain restrictions because of their proximity to or trading relationships with rinderpest-or FMD-affected regions. On May 1, 2004, the Czech Republic, Latvia, Lithuania, and Poland, along with six other countries, became new Member States of the EU. As part of the accession process, these new EU Member States adopted the legislation of the European Commission

(EC)1 regarding animal health, welfare, and identification, including legislation pertaining to CSF, FMD, and SVD. This legislation became the basis for new standard operating procedures for domestic animal health matters in the Czech Republic, Latvia, Lithuania, and Poland by the time of their accession. The Czech Republic, Latvia, Lithuania, and Poland also adopted the harmonized EC legislation regarding sanitary measures applicable to import and trade in live animals and animal products. 1 The EC is the EU institution responsible for representing the EU as a whole. It proposes legislation, policies, and programs of acton and implements decisions of the EU Parliament and Council. In 2003, the Governments of Lithuania and Poland requested that APHIS evaluate their animal health status with respect to CSF and SVD and provided information in support of these requests in accordance with 9 CFR part 92, “Importation of Animals and Animal Products; Procedures for Requesting Recognition of Regions.” In addition, the Government of Lithuania requested that APHIS evaluate Lithuania's animal health status with respect to FMD. In 2004 and 2005, the Governments of Latvia and the Czech Republic also requested that APHIS evaluate their animal health status with respect to CSF and SVD. In addition, the Government of Latvia requested that APHIS evaluate Latvia's animal health status with respect to FMD. Because rinderpest has not been diagnosed in Latvia since 1921 and has never been reported in Lithuania, we are proposing to recognize these countries as free of rinderpest. As part of our evaluation of their disease status, APHIS identified the smallest administrative units

(AUs)within each of these EU Member States that we would consider “regions” in the event of future animal disease outbreaks. See the discussion of those AUs under the section entitled “Administrative Units.” Our determinations concerning these requests with regard to CSF and SVD in the Czech Republic, Latvia, Lithuania, and Poland, and FMD in Latvia and Lithuania are set forth below. Summary of Proposed Changes In this document, we are proposing to add the Czech Republic, Latvia, Lithuania, and Poland to the region of the EU (currently referred to in the regulations as the EU-15) that we currently recognize as a low-risk region for CSF and from which breeding swine, swine semen, and pork and pork products may be imported into the United States under certain conditions. In order to provide flexibility in the event that additional Member States may be added to this region in the future, we would amend the regulations to refer to this region as the “APHIS-defined EU CSF region.” We are also proposing to add the Czech Republic, Latvia, Lithuania, and Poland to the list of regions recognized as free of SVD, and to the list of SVD-free regions whose exports of pork and pork products to the United States are subject to certain restrictions to prevent the introduction of SVD into this country. Additionally, we are proposing to add Latvia and Lithuania to the list of regions recognized as free of FMD and rinderpest. We are also proposing to add Latvia and Lithuania to the list of FMD and rinderpest-free regions whose exports of ruminant and swine meat and products to the United States are subject to certain restrictions to prevent the introduction of FMD and rinderpest into this country. Risk Analyses APHIS conducted risk analyses to examine the risk of introducing CSF or SVD from the importation of swine and swine products from the Czech Republic, Latvia, Lithuania, and Poland and the risk of introducing FMD from the importation of swine, ruminants, and swine and ruminant products from Latvia and Lithuania. These risk analyses were completed early in 2006 and may be viewed on the Regulations.gov Web site or in our reading room. (Instructions for accessing Regulations.gov and information on the location and hours of the reading room are provided under the heading ADDRESSES at the beginning of this proposed rule.) The risk analyses may also be viewed at *http://www.aphis.usda.gov/vs/ncie/reg-request.html* by following the link for “Information previously submitted by Regions requesting export approval and their supporting documentation.” In the following paragraphs, we summarize our findings for each of the 11 factors set out in our procedures for requesting recognition of regions in 9 CFR 92.2 and summarize our risk considerations of these findings following our discussion of the factors. Authority, Organization, and Veterinary Infrastructure As stated above, the Czech Republic, Latvia, Lithuania, and Poland adopted the legislation of the EC regarding animal health, welfare, and identification, as well as sanitary measures applicable to import and trade in live animals and animal products. At the time of accession, Commission Decisions and Regulations concerning CSF, SVD, and FMD became directly applicable in the new EU Member States, whereas Council Directives were implemented in national legislation. During APHIS site visits, it appeared that official veterinarians of each country were familiar with and able to effectively implement the provisions of pertinent EC and national legislation. APHIS concluded that the official veterinary services of these new EU Member States have sufficient legal authority, personnel, and financial resources to carry out animal health activities quickly and efficiently. Regular training is conducted for official veterinarians. In addition, all offices visited by APHIS site visit teams were generally in good condition, with some undergoing renovations, and were outfitted with computers with both Internet and Intranet connections. The official veterinary services are hierarchically organized and appear to have clear lines of command and reporting, with sufficient autonomy at the local level to carry out the tasks assigned. Internal and external auditing practices are adequate to ensure compliance with the provisions of pertinent animal health legislation. Disease History *CSF:* CSF was last reported in domestic swine in the Czech Republic in 1997, in Latvia in 1996, in Lithuania in 1992, and in Poland in 1994. No CSF outbreaks have occurred in wild boar in recent years in Latvia, Lithuania, or Poland. CSF virus was last detected in wild boar in the Czech Republic in November 1999. Serologic surveillance indicates that the virus is present in segments of the wild boar population in the Czech Republic along its borders with Austria and Slovakia, albeit at very low and decreasing levels. In addition, veterinary officials indicated that most small swine producers keep pigs indoors, which limits potential exposure to CSF in wild boar populations, and that most of the larger farms are confinement operations with restricted access. Biosecurity practices on large swine confinement operations, from which exports to the United States from the Czech Republic would most likely be derived, are sufficient to prevent direct or indirect exposure of domestic swine to wild boar. *SVD:* SVD has never been reported in the Czech Republic, Latvia, or Lithuania. The last reported case of SVD in Poland occurred in 1972 in domestic swine (SVD has never been reported in wild boar in Poland). *FMD:* FMD was last reported in Latvia and Lithuania in 1987 and 1982, respectively. Disease Status of Adjacent Regions *CSF:* Latvia, Lithuania, and Poland all share land borders with non-EU countries that APHIS considers affected with CSF, namely Russia, Belarus, and/or Ukraine. (APHIS considers all countries affected until the disease status of a specific country is evaluated at the request of that foreign country and we determine otherwise. The governments of Russia, Belarus, and Ukraine have not requested such evaluation.) Belarus last reported a CSF outbreak in August 1995 and Ukraine in July 2001; CSF is endemic in parts of Russia and outbreaks continue to occur. The Czech Republic and Poland also border other EU Member States such as Germany, Estonia, and Slovakia. Germany is part of the EU region that APHIS considers low risk for CSF under §§ 94.9 and 94.10, but CSF is endemic in segments of its wild boar population. CSF is also endemic in wild boar in regions of Slovakia that border the Czech Republic. APHIS is currently evaluating the CSF status of Slovakia and Estonia (which borders Latvia). Due to the proximity of affected or potentially affected regions, the risk analyses concluded that the potential exists for introduction of CSF into the Czech Republic, Latvia, Lithuania, or Poland via wild boar, incoming vehicular or human traffic, smuggled swine products, or other routes discussed below. *SVD:* APHIS considers SVD to exist in Russia, Belarus, and Ukraine since we have not evaluated their status with regard to this disease. However, SVD has never been reported in Russia or Belarus, and was last reported in Ukraine in 1977. The Czech Republic, Latvia, and Poland each border either Slovakia or Estonia, which APHIS is currently evaluating for SVD status, but which have never reported an SVD outbreak. The Czech Republic, Latvia, Lithuania, and Poland also share borders with one another, with each bordering at least one of the other three. The risk analyses concluded that the likelihood of introduction of SVD into these four Member States from neighboring regions is low. *FMD:* Latvia and Lithuania border Russia and Belarus, which APHIS does not consider free of FMD. Belarus last reported an FMD outbreak in 1982; sporadic FMD outbreaks continue to occur in Russia. Latvia and Lithuania also border each other. Due to the proximity of affected or potentially affected regions, the risk analyses concluded that the potential exists for introduction of FMD into Latvia or Lithuania via wild animals, incoming vehicular or human traffic, smuggled animal products, or other routes discussed below. Degree of Separation From Adjacent Regions The Czech Republic is entirely surrounded by other EU Member States. In addition, although parts of Latvia, Lithuania, and Poland border the Baltic Sea, they are not separated from regions of higher risk by a uniform physical barrier, therefore few impediments exist to introduction of CSF, SVD, or FMD via natural movement of wild animals or human traffic. The primary wild animals within these four EU Member States and neighboring countries that are susceptible to CSF and SVD are wild boar. In addition, wild boar and ruminants such as deer are also susceptible to FMD. These species are not considered to be migratory in nature, but individual animals are known to travel substantial distances in search of food, during mating season, or in response to hunting or other habitat disruptions. Extent of an Active Disease Control Program None of the four countries have active disease control programs in place for CSF or SVD, and Latvia and Lithuania do not have active disease control programs in place for FMD, since these diseases have not been reported for many years. Surveillance for these diseases is discussed in more detail below. Vaccination The last vaccination against CSF occurred in the Czech Republic in 1992, in Latvia in 1998, in Lithuania in 2000, and in Poland in 1996. Vaccination against CSF is now prohibited in all four countries, although official contingency plans allow for emergency vaccination against CSF. None of these countries has ever vaccinated against SVD and such vaccination is also now prohibited. In addition, vaccination against FMD is prohibited in Latvia and Lithuania, although as with CSF, the official contingency plans for FMD for both countries allow for emergency vaccination if sanctioned by the EC. Movement Control From Higher Risk Regions Some forms of CSF, SVD, and FMD are difficult to detect in live animals or on post-mortem examination without laboratory testing, and in some instances detection may be delayed due to deficiencies in active surveillance or diagnostic testing capabilities. Any such delay in detection of an outbreak could increase the export risk to the United States. Consequently, the risk analyses examined potential pathways for disease introduction into the Czech Republic, Latvia, Lithuania, and Poland such as importation and intra-Community trade in live animals and animal products, vehicular and human traffic, and commodities for personal consumption. *Import controls:* Import of live animals and animal products into the Czech Republic, Latvia, Lithuania, and Poland from non-EU countries occurs at certain road, rail, air, and/or sea ports through a border inspection post

(BIP)that has been approved by the EC. The EC conducts a rigorous inspection of each BIP prior to approval and carries out regular audits to monitor the efficacy of sanitary controls. Each BIP visited by APHIS appeared sufficiently able to keep up with required levels of inspection. Swine, ruminants, and derived products such as meat, meat products, and genetic material are harmonized commodities under EC legislation, which means that the requirements for import from non-EU countries are standardized across all EU Member States. Binding EC legislation lists the non-EU countries, and establishments within those countries, that are approved for export of certain commodities to the EU. Slaughterhouses, cutting plants, semen collection centers, and other exporting establishments are subject to inspection prior to approval. Veterinary certificates required for export to the EU outline comprehensive animal health and testing requirements and must be endorsed by an official veterinarian of the exporting country. APHIS recognizes all of the countries approved for export of live swine and swine semen to the EU as free of SVD (although some are subject to the restrictions specified in § 94.13) and all but Switzerland as free of CSF. APHIS also considers these countries free of FMD, although some are subject to the restrictions in § 94.11. However, although import practices in the Czech Republic, Latvia, Lithuania, and Poland have largely been protective with regard to CSF, SVD, and FMD, EC legislation allows EU Member States to import fresh pork and pork products derived from swine from several regions that APHIS has not evaluated and therefore regards as affected with these diseases. EU Member States may also import bovine embryos and meat and meat products from both domestic and wild ruminants from regions that APHIS considers affected with FMD. Veterinary inspectors at the entry BIP check that the documentation accompanying imported commodities is in order, including appropriate health certificates and other movement control documents, and that the shipment is properly identified and the identification matches the documentation. Veterinary inspectors also physically examine and sample a percentage of incoming shipments as prescribed by EC legislation. The risk analyses concluded EC legislation imposes less stringent restrictions on sourcing of imported ruminants and swine than do APHIS requirements, resulting in some risk of introducing CSF, SVD, or FMD into the Czech Republic, Latvia, Lithuania, Poland, or other EU Member States via imported animals or animal products. However, this risk is substantially mitigated by factors such as veterinary inspection of live animals prior to shipment, approval of establishments for export of animal products, certification of disease status by an official veterinarian, and veterinary inspection at the point of entry into the EU. *Trade controls:* As EU Member States, the Czech Republic, Latvia, Lithuania, and Poland may engage in intra-Community trade with other Member States as governed by EC legislation that was transposed into national legislation prior to accession. Live animals and animal products must be accompanied by an appropriate health certificate signed by an official veterinarian of the country of origin. Intra-Community trade in swine and swine products, including semen and embryos, from CSF or SVD affected regions of EU Member States is prohibited. There are no trade restrictions based on FMD since there are currently no outbreaks reported in the EU. Establishments such as slaughterhouses, cutting plants, milk processing plants, and semen collection centers must be approved by the Member State in which they reside according to criteria similar to those for exporting establishments in non-EU countries. The EC and the official veterinary services of the Member State conduct periodic audits to monitor compliance with approval criteria and certification requirements. The risk analyses concluded that the likelihood of introducing SVD or FMD via intra-Community trade was low and, although the likelihood of introducing CSF was slightly higher, this risk was largely mitigated by the factors described above. *Veterinary control of passenger traffic:* In the Czech Republic, Latvia, Lithuania, and Poland, the majority of border crossings from non-EU countries are controlled by the Customs Service, without official veterinary control. Posters are prominently displayed at border crossings to promote public awareness of prohibited meat, milk, and meat and milk products. However, the EC permits personal consignments of products that could carry live CSF, SVD, and/or FMD virus from countries that APHIS has not evaluated and regards as affected with these diseases. In some instances, there is considerable local passenger and commercial traffic to and from neighboring non-EU countries that APHIS does not consider free of CSF, SVD, and/or FMD. Veterinary officials indicated that individuals attempting to cross the border with agricultural products at a checkpoint without veterinary inspection are redirected to a BIP or the products are confiscated. However, the percentage of incoming traffic that is inspected for prohibited agricultural commodities varies among border crossings. The risk analyses concluded that, although the likelihood of introduction of such commodities by this route is relatively high, existing production and biosecurity measures substantially reduce the associated export risk to the United States. Livestock Demographics As stated above, the Czech Republic, Latvia, Lithuania, and Poland have adopted the EC legislation with regard to animal identification. Each country has in place or is implementing herd registration and animal identification plans for ruminants and swine that include movement tracking through a central computerized database. Health certificates and/or a movement authorization form are required for internal movement of ruminants and swine. Small swine holdings predominate in each of these countries, and there is considerable overlap in distribution with wild boar, although veterinary authorities indicated that the majority of pigs are raised indoors. Production and slaughter systems in each country are such that large confinement operations (up to 30,000 pigs) are the most likely source of swine and swine products for export. APHIS site visit teams noted biosecurity measures on the confinement operations that would effectively prevent direct or indirect contact with wild boar, and limit the likelihood of CSF, SVD, or FMD introduction by other routes. The risk analyses concluded that commercial production and biosecurity practices in these countries serve to mitigate potential export risk to the United States. Cattle are distributed throughout Latvia and Lithuania; agriculture in these two countries has traditionally included dairy-beef husbandry. There are few sheep or goats and these are generally distributed in small numbers on individual farms. Biosecurity measures on ruminant operations are generally not sufficient to prevent direct and/or indirect contact with wildlife or contact with live virus on clothing or vehicles. However, exports to the United States will likely be derived from the larger cattle operations, which are closely monitored by the official veterinary services. Disease Surveillance *CSF:* The Czech Republic, Latvia, Lithuania, and Poland all have national surveillance programs in place for CSF in domestic swine and wild boar. Active surveillance is primarily based on serology for antibodies to the CSF virus, as is common throughout the world. Since antibodies occur late in CSF infection, serological surveillance would likely miss an early infection (e.g., in the first 21 days). In each country, training and national simulation exercises aid in passive surveillance for CSF by developing and maintaining the ability to quickly detect these diseases. Passive surveillance is likely sufficient to detect overt clinical signs of CSF, but detection may be delayed in the case of moderate or low virulence strains. In some instances, lack of incentive for hunters to sample wild boar and underreporting of wild boar found dead may also hinder detection. *SVD:* The Czech Republic, Latvia, Lithuania, and Poland each conduct serological surveillance for SVD in domestic swine at a considerably lower level than for CSF, and rely more on passive surveillance for this disease. Consequently, detection may be delayed in the absence of overt clinical signs, although serological surveillance would eventually detect the historical presence of the disease. *FMD:* Lithuania conducts serological surveillance for FMD in cattle, domestic swine, wild boar, and deer at a relatively low level. Surveillance is not routinely conducted in reservoir populations such as sheep and goats. Latvia conducted serological surveillance for FMD in cattle and domestic swine, although not small ruminants or susceptible wild animals, through 2003; active surveillance is no longer conducted. Both countries rely heavily on passive surveillance for FMD, which may delay detection in the absence of overt clinical signs. Diagnostic Capabilities The Czech Republic, Latvia, Lithuania, and Poland all have established accredited national reference laboratories

(NRL)for animal diseases, including CSF, SVD, and FMD. Overall, the laboratories are well organized and equipped, with experienced scientific and technical staff. Standard operating procedures and quality control measures are in place throughout. Laboratory biosecurity practices are adequate to prevent the escape of live virus. *CSF:* In each country, the NRL provides a full range of diagnostic tests for the diagnosis and confirmation of CSF. Tests have all been validated and include well-regarded commercial test kits used in many countries and tests developed in-house that are performed using standard methodology. An APHIS site visit team expressed concern regarding the sensitivity of the ELISA test used for screening for CSF in Lithuania. Laboratory officials indicated they are addressing this issue by phasing in more sensitive tests for the detection of CSF and are also working to expand the diagnostic capabilities for SVD and FMD. The risk analyses concluded that an index case of CSF would be diagnosed by these laboratories if proper samples were submitted. *SVD and FMD:* The NRL of each country provides a moderate spectrum of diagnostic testing for SVD and, in Latvia and Lithuania, for FMD as well. The risk analyses concluded that each NRL has the competence to make a presumptive diagnosis of SVD or FMD; however, diagnostic capabilities are limited by reliance on serology, and samples would be sent to the reference laboratory in Pirbright, UK, for confirmatory testing, which would result in a slight delay in confirming an outbreak. Emergency Response Capacity The Czech Republic, Latvia, Lithuania, and Poland have contingency plans in place and supporting legislation to control and eradicate CSF, SVD, and/or FMD outbreaks. These contingency plans conform closely to the provisions of EC legislation. The EC has a “stamping out” policy with regard to CSF, SVD, and FMD. Eradication is carried out by compulsory destruction of all animals on the affected premises with burial or incineration of the carcasses. All live animals, animal products, and genetic material moved off of an affected premises during the time between disease introduction and detection of the outbreak must be traced and destroyed. Additionally, protection zones of at least a 3-kilometer radius and surveillance zones of at least a 10-kilometer radius from the affected premises, respectively, are established, and the movement of live animals, animal products, and genetic material is suspended until the restrictions are lifted. Release Assessment Conclusions APHIS considers the potential for introduction of CSF, SVD, and/or FMD into the Czech Republic, Latvia, Lithuania, or Poland to be greater than the potential for the introduction of CSF, SVD, and/or FMD from the Czech Republic, Latvia, Lithuania and Poland into the United States. This is due to the fact that these countries share common land borders with several regions APHIS does not consider to be free of these diseases, because they engage in free trade with other EU Member States that import live animals or animal commodities from such regions, and because, under harmonized EC legislation, they could directly import live swine or swine commodities from such regions. Following our analysis, we have concluded that the risk profiles for the Czech Republic, Latvia, Lithuania, and Poland with regard to CSF are equivalent in CSF risk to the EU-15. The EU-15 is considered a low-risk region for CSF in §§ 94.9 and 94.10 and is subject to the import restrictions specified in § 94.24 for live swine, pork, and pork products, and § 98.38 for swine semen. Therefore, we are proposing to include the Czech Republic, Latvia, Lithuania, and Poland along with the other countries that comprise the low-risk region for CSF currently referred to in our regulations as the EU-15. As noted previously, to reflect the addition of those four countries to that region, and to accommodate possible future additions to that region, we would amend the regulations by replacing references to the “EU-15” with references to the “APHIS-defined EU CSF region” wherever they appear in parts 93, 94, and 98. We are proposing to recognize the Czech Republic, Latvia, Lithuania, and Poland as free of SVD and to recognize Latvia and Lithuania as free of FMD. In addition to proposing to include the Czech Republic, Latvia, Lithuania, and Poland in the list in § 94.12(a) of regions declared free of SVD, and Latvia and Lithuania to the list in § 94.1(a)(2) of regions declared free of both rinderpest and FMD, we are also proposing to add the Czech Republic, Latvia, Lithuania, and Poland to the list in § 94.13 of regions declared free of SVD whose exports of pork and pork products are also subject to restrictions and to add Latvia and Lithuania to the list in § 94.11(a) of regions declared free of rinderpest and FMD whose exports of meat and other animal products to the United States are nevertheless subject to certain restrictions. Administrative Units On October 28, 1997, we published in the **Federal Register** a final rule (62 FR 56000-56026, Docket No. 94-106-9) and a policy statement (62 FR 56027-56033, Docket No. 94-106-8) that established procedures for recognizing regions and levels of risk for the purpose of regulating the importation of animals and animal products. With the establishment of those procedures, APHIS can consider requests to allow importations from regions based on levels of risk, as well as to recognize entire countries free of a disease. In subsequent rules, we identified the smallest administrative jurisdictions in the EU-15 that we would use to regionalize those Member States in the event of future animal disease outbreaks. As discussed in those documents, we believe that each of those jurisdictions is the smallest that can be demonstrated to have effective oversight of normal animal movements into, out of, and within that Member State, and that, in association with national authorities, if necessary, has effective control over animal movements and animal diseases locally. *We have identified the following AUs for each country:* Czech Republic-region, Latvia-district, Lithuania-county, Poland-district. Further information on each AU and why we chose it is available in the risk analysis for each Member State. If we receive no substantive comments regarding our identification of AUs for these Member States and we finalize this proposed rule, following the effective date of the final rule, these AUs will be used to regionalize those Member States in the event of future animal disease outbreaks. Miscellaneous We are also proposing to revise the definition of European Union in § 92.1 to update its list of EU Member States. There are currently 25 Member States of the EU, 10 more than when that definition was added to the regulations. In part 92, the European Union is referred to in § 92.3, which states: “Whenever the European Commission

(EC)establishes a quarantine for a disease in the European Union in a region the Animal and Plant Health Inspection Service recognizes as one in which the disease is not known to exist and the EC imposes prohibitions or other restrictions on the movement of animals or animal products from the quarantined area in the European Union, such animals and animal products are prohibited importation into the United States.” Therefore, it is necessary to update the definition of European Union to ensure that this provision applies to all EU Member States. We are further proposing to remove § 94.1a, “Criteria for determining the separate status of a territory or possession as to rinderpest and foot-and-mouth disease,” from the regulations. Those provisions, which were established in 1974, were rendered unnecessary when we added the current provisions for the recognition of regions in 9 CFR part 92. Finally, in § 98.38(f), we are proposing to remove a reference to the Office International des Epizooties and to refer instead to the World Organization for Animal Health, as this is the current, internationally recognized name for that organization. Executive Order 12866 and Regulatory Flexibility Act This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. We are proposing to amend the regulations governing the importation of animals and animal products to add the Czech Republic, Latvia, Lithuania, and Poland to the region of the European Union that we recognize as low risk for CSF. We are also proposing to add the Czech Republic, Latvia, Lithuania, and Poland to the list of regions we consider free from SVD and to add Latvia and Lithuania to the list of regions considered free from FMD and rinderpest. The U.S. Swine Industry The U.S. swine industry plays an important role in the U.S. economy. Cash receipts from marketing meat animals were about $15 billion in 2005 (the average between 2001 and 2005 was $12.4 billion). 2 Additionally, swine and related product exports generated over $2.1 billion in sales that year. Other agricultural and nonagricultural sectors are dependent on the swine industry for their economic activity. At present, international trade in U.S. livestock proceeds without CSF or SVD related restrictions. Maintaining such favorable conditions depends in part on continued aggressive efforts to prevent transmission of foreign diseases to U.S. swine. 2 USDA/NASS, Meat Animal Production, Disposition, and Income: 2005 Summary, April 2006. As shown in table 1, U.S. pork production increased from 7,764,000 metric tons

(MT)in 1996 to 9,392,000 MT in 2005, an annual growth rate of about 2.1 percent. Similarly, consumption increased from 7,619 MT to 8,671 MT. During the same period, U.S. exports increased from 440,000 MT to 1,207,000 MT, by far outpacing imports. Net exports increased from 159,000 MT to 743,000 MT. Table 1.—U.S. Pork Production, Consumption, Price, Exports, and Imports, 1996-2005 Year Production (1,000 MT) Consumption (1,000 MT) Price per MT Exports (1,000 MT) Imports (1,000 MT) Net exports (1,000 MT) 1996 7,764 7,619 $1,596 440 281 159 1997 7,835 7,631 1,562 473 288 185 1998 8,623 8,305 1,170 558 320 238 1999 8,758 8,594 1,178 582 375 207 2000 8,596 8,455 1,413 584 438 146 2001 8,691 8,389 1,473 707 431 276 2002 8,929 8,685 1,179 731 486 245 2003 9,056 8,816 1,298 779 538 241 2004 9,312 8,817 1,621 989 499 490 2005 9,392 8,671 1,562 1,207 464 743 5-year average (2001-2005) 9,076 8,676 1,427 883 484 399 Sources: USDA/FAS, PS&D Online, 1996-2005, *http://www.fas.usda.gov/psdonline/psdquery.aspx;* prices, reported as $/100 pounds for yearly pork carcass cut-out values, are converted to dollars per metric ton, and are taken from Red Meat Yearbook (94006), *http://usda.manlib.cornell.edu/ers/94006/wholesaleprices.xls;* net exports are calculated as the difference between exports and imports for each year. The Swine Industry in the Czech Republic, Latvia, Lithuania, and Poland The four countries (the Czech Republic, Latvia, Lithuania, and Poland) together produced an average of 2.522 million MT of pig meat between 2001 and 2005. They are net importers of pork, which is the focus of this analysis. They had a 5-year (2001-2005) average level of pork exports of 130,030 MT and an average level of imports of 152,954 MT, yielding an average net export of a negative 22,823 MT. The Czech Republic and Poland accounted for 95 percent of production and export of the above total. Potential Costs of Classical Swine Fever, Swine Vesicular Disease, and Foot and Mouth Disease CSF, also known as hog cholera or swine plague, is a highly contagious and often fatal disease of pigs. Young animals are more severely affected than older animals. Mortality rates may reach up to 90 percent among young pigs. SVD is less severe and does not usually cause death. The overall cost of control and eradication depends on the mitigation methods used to control and eradicate the two diseases. Potential costs include disease control measures such as imposing quarantine measures and movement controls, indemnity payments, vaccination costs, surveillance, and laboratory testing. CSF was eradicated from the United States in 1976 at a cost of about $550 million in 2006 dollars. Several EU countries experienced small-and-large scale CSF outbreaks between 1990 and 1997 and suffered heavy economic losses. One large outbreak cost producers $917.6 million, the national governments $296.9 million, and the EU $1,040.6 million in 2006 dollars. The cost of a small scale outbreak was $14 million and the cost of the medium-scale outbreak was $268.8 million. 3 The above costs are direct costs of disease outbreaks and do not include indirect costs such as losses caused by trade restrictions. Little information exists on the cost of control and eradication of SVD in a previously free region. 3 Saatkamp, H. W., P. B. M. Berentsen *et al.* “Economic aspects of the control of classical swine fever outbreaks in the European Union,” Vet Microbiology 73 (2000): 221-237; Stegeman, A., A. Elbers *et al.* , “The 1997-98 epidemic of classical swine fever in the Netherlands,” Vet Microbiology, 73 (2000): 183-196. FMD is a contagious viral disease that affects cloven-hoofed animals. Cattle, pigs, sheep and goats are highly susceptible to FMD. Although the death rates are low, it has serious lasting negative effects on infected animals that survive the disease. It causes decreased milk production, decreased pregnancy rates, weight loss, and lameness. In addition to these losses, an FMD outbreak can lead to economic sanctions, including the loss of export markets. Any outbreak of FMD in the United States could result in a loss of billions of dollars for agriculture and related industries as indicated by the most recent FMD outbreak in the United Kingdom (UK). According to the World Organization for Animal Health (OIE), over 6 million cattle, sheep, swine, and goats were slaughtered to stop the spread of the disease and the epidemic is estimated to have cost the UK economy about $12.9 billion. 4 4 D. Thompson, P. Muriel, D. Russell, P. Osborne, A. Bromley, M. Rowland, S. Creigh-Tyte, and C. Brown, “Economic losses of foot and mouth disease outbreak in the U.K,” Rev. sci. tech. int. epiz., 21 (2002): 675-687. Impact of Potential Pork Imports In this section, we estimate the impact of pork imports from the Czech Republic, Latvia, Lithuania, and Poland on U.S. production, consumption, and prices using a net trade welfare model. 5 The baseline data used are as shown in the last row of table 1. The demand and supply elasticities used are -0.86 and 1, respectively. 6 5 The data used were obtained from Foreign Agricultural Service (FAS), Production, Supply and Distribution database ( *http://www.fas.usda.gov/psdonline/psdquery.aspx;* ) USDA/ERS, Red Meat Yearbook (94006) ( *http://usda.mannlib.cornell.edu/usda/ers//wholesaleprices.xls* ); The Global Trade Atlas: Global Trade Information Services, Inc., country Edition, June 2006; and UN/FAO, FAO stat data ( *http://faostat.fao.org* ). 6 John Sullivan, John Wainio, Vernon Roningen, A Database for Trade Liberalization Studies, #AGES89-12, March 1989. Based on the four countries' combined average annual global exports of 130,130 MT (2001-2005), we model three potential levels of pork exports to the United States from the Czech Republic, Latvia, Lithuania, and Poland:

(1)An amount proportional to the percentage of the EU-15's pork exports sent to the United States (1.87 percent);

(2)an amount proportional to the percentage of Denmark's 7 pork exports sent to the United States (3.99 percent); and

(3)an amount equal to 10 percent of the global pork exports by the four countries. Amounts of pork shipped to the United States under the three scenarios would be 2,433 MT, 5,192 MT, and 13,013 MT. 7 Exports from Denmark to the United States are used as an upper range estimate of possible exports from these countries. Denmark's pork industry is export oriented, and it is the second largest supplier of pork products to the United States, after Canada. Using the proportion of its global pork exports that are shipped to the United States as an estimate of possible imports from the four countries likely overstates potential shipments to the United States from these countries. Table 2.—The Impact of Pork Imports From the Czech Republic, Latvia, Lithuania, and Poland on the United States Economy Import Scenario 1 Import Scenario 2 Import Scenario 3 Assumed pork imports, MT 1 2,433 2 5,192 3 13,013 Change in U.S. consumption, MT 1,160 2,475 6,202 Change in U.S. production, MT −1,273 −2,717 −6,811 Change in wholesale price of pork, dollars per MT −$0.22 −$0.47 −$1.19 Change in consumer welfare $1,924,230 $4,106,610 $10,294,830 Change in producer welfare −$1,817,020 −$3,877,160 −$9,715,120 Annual net benefit $107,210 $229,450 $579,710 Note: Welfare and benefit are used interchangeably. The baseline data used is a 5-year annual average for production, consumption, price, exports and imports as reported in the last row of table 1. The demand and supply elasticities used are −0.86 and 1, respectively (John Sullivan, John Wainio, Vernon Roningen, A Database for Trade Liberalization Studies, #AGES89-12, March 1989). 1 Calculated by multiplying the total global exports of the Czech Republic, Latvia, Lithuania, and Poland, 130,130 MT, by the proportion (1.87 percent) of EU-15's global export sent to the U.S. EU-15 countries including Denmark exported 50,742 MT to the United States from their global exports of 2,719,698 MT. 2 Calculated by multiplying total global exports of the Czech Republic, Latvia, Lithuania, and Poland by the proportion (3.99 percent) of Denmark exports sent to the United States, 43,037 MT out of 1,077,986 MT. 3 Calculated by multiplying total global exports of the Czech Republic, Latvia, Lithuania, and Poland by 10 percent. Table 2 presents the changes resulting from the assumed U.S. pork imports from the Czech Republic, Latvia, Lithuania, and Poland. These include annual changes in U.S. consumption, production, wholesale price, consumer welfare, producer welfare, and net welfare. Our medium level of pork imports of 5,192 MT (import scenario 2, assuming pork imports proportional to those received from Denmark) would result in a decline of $0.47 per metric ton in the wholesale price of pork and a fall in U.S. production of 2,717 MT. Consumption would increase by 2,475 MT. Producer welfare would decline by $3.9 million and consumer welfare would increase by $4.1 million, yielding an annual net benefit of about $230,000. Import scenario 1 presents impacts assuming a more likely level of pork imports (proportional to those received from the EU-15). In this case, price would decrease by $0.22 per metric ton, production would decline by 1,273 MT, and consumption would increase by 1,160 MT. Consumer welfare would increase by $1.9 million and producer welfare would decline by $1.8 million. The annual net benefit would be about $107,000. Finally, import scenario 3 presents a case of expanded trade, with pork imports by the United States assumed to equal 10 percent of global exports by the four countries. The wholesale price of pork would decline by $1.19 per metric ton, production would decline by 6,811 MT, and consumption would increase by 6,202 MT. Consumer welfare would increase by $10.3 million, while producer welfare would decline by $9.7 million. The annual net benefit would be about $580,000. In all cases consumer welfare gains would outweigh producer welfare losses. The decline in producer welfare, even in the last scenario, would represent less than one-tenth of 1 percent of cash receipts received from the sale of domestic hogs and pork products. 8 Thus, our analysis indicates that U.S. entities are unlikely to be significantly affected by this rule. 8 $9.7 million divided by $12.4 billion equals 0.08 percent. The Small Business Administration

(SBA)has established guidelines for determining which types of firms are to be considered small under the Regulatory Flexibility Act. This rule could affect importers of live animals or animal products and swine operations with sales. Meat processing entities (NAICS 311612) and meat and meat product merchant wholesalers (NAICS 424470) may be affected by this rule. Under SBA standards, meat processing establishments with no more than 500 employees and meat and meat product wholesalers with no more than 100 employees are considered small. In 2002, there were 1,335 companies in the United States that processed and sold meat. More than 97 percent of these establishments are considered to be small entities and had average sales of $15.4 million, while large meat processors had average sales of $188 million. In 2002, there were 2,535 meat and meat product wholesalers in the United States. Of these establishments, 2,456 (97 percent) employed not more than 100 employees and are, thus, considered small by SBA standards. Small wholesalers had average sales of $9.3 million, while large entities had average sales of $131 million. 9 9 U.S. Census Bureau, 2002 Economic Census: Manufacturing—Industries Series, Wholesale Trade—Subject Series and Transportation and Warehousing—Subject Series, issued August 2006; and SBA, Small business Size Standards matched to North American Industry Classification System 2002, effective July 2006. Other entities that could theoretically be affected include refrigerated long-distance trucking firms (NAICS 484230), freight forwarders (NAICS 488510), and deep sea freight transport companies (NAICS 483111). The SBA classifies trucking firms as small if their annual receipts are not more than $23.5 million; freight forwarding firms are small if their annual receipts are not more than $6.5 million, and deep sea freight transport firms are small if they have not more than 500 workers. According to the 2002 Economic Census, there were 3,429 trucking firms, 3,827 freight forwarders, and 195 deep sea freight transport companies. Over 99 percent of trucking firms, 96 percent freight forwarders, and 97 percent of deep sea freight transport firms are considered to be small. Thus, predominant numbers of meat processors, wholesale traders, and transport firms that could be affected by the rule are considered to be small by SBA standards. Average sales of even the smallest packers and wholesalers are large compared to the amount of pork expected to be imported from the four countries. U.S. swine and pork producers (NAICS 112210) might be potentially affected by the proposed rule. According to the 2002 Census of Agriculture, there were 82,028 hog and pig operations with sales of 184,997,686 hogs and pigs valued at $12.4 billion. These facilities are considered to be small if their annual receipts are not more than $750,000. Over 83 percent of these operations (or 68,083) are considered to be small and had sales of fewer than 2,000 hogs and pigs. Small operations had a total inventory of 16,297,158 (8.81 percent) with an average inventory of 237 hogs, while large operations (or 13,945) had sales of 168,700,528 (91.19 percent) with an average inventory of 12,714 hogs. Based on inventory share, small operations had annual sales of $1.3 billion and an average income of about $19,400, while large operations had sales of $11 billion with an average income of about $834,000. As shown in table 3, the impact of potential pork imports on U.S. producers as a result of this rule would be small. The decrease in producer welfare per small entity is less than $133 or about 0.6 percent of average annual sales of small entities when we assume that 10 percent of combined global pork exports by the four countries would be sent to the United States. Table 3.—The Economic Impact of Potential Pork Imports From the Czech Republic, Latvia, Lithuania, and Poland on U.S. Small Entities, Assuming 10 Percent of Combined Global Pork Exports by the Four Countries Are Sent to the United States, 2005 Dollars Total decline in producer welfare 1 $9,715,120 Decrease in welfare incurred by small entities 2 855,902 Average decrease per head of inventory, small entities 3 0.05 Average decrease per small entity 4 124 Average decrease as percentage of average sales, small entities 5 0.6% 1 From table 2. The change in producer welfare is negative indicating a decline. 2 Change in producer welfare multiplied by 8.81 percent from the above text. We assume that the change in producer welfare would be proportional to inventory share. 3 Decrease in producer welfare for small entities divided by 16,297,158 (see text above). 4 Average decrease per head of inventory multiplied by 237 (see text above). 5 Average decrease per small entity divided by $19,400 (see text above). Because quantities of swine, swine semen, ruminants, and ruminant products imported from these countries, if such imports were to occur, are likely to be very small, effects of the rule with respect to these commodities are not included in the analysis. The amounts of pork shipped to the United States under the three scenarios discussed above would be 2,433 MT, 5,192 MT, and 13,013 MT. Even when the largest import quantity is assumed, the welfare effect for U.S. small-entity producers would be equivalent to less than 1 percent of their average revenue. Predominant numbers of producers, meat processors, and wholesale traders are considered to be small entities. Other small entities that could theoretically be affected by the proposed rule include refrigerated long-distance trucking firms, freight forwarders, and deep sea freight transport companies. In all cases, any effects of the proposed rule for these types of businesses are expected to be very minor. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities. Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted:

(1)All State and local laws and regulations that are inconsistent with this rule will be preempted;

(2)no retroactive effect will be given to this rule; and

(3)administrative proceedings will not be required before parties may file suit in court challenging this rule. National Environmental Policy Act To provide the public with documentation of APHIS' review and analysis of any potential environmental impacts associated with the proposed addition of the Czech Republic, Latvia, Lithuania, and Poland to the list of EU countries considered to be low risk for CSF and to the list of regions recognized as free of SVD, but that are subject to certain import restrictions, and the addition of Latvia and Lithuania to the list of regions recognized as free of FMD and rinderpest, but that are subject to certain import restrictions, we have prepared environmental assessments for each country. The environmental assessments were prepared in July or August 2006 and in accordance with:

(1)The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 *et seq.* ),

(2)regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508),

(3)USDA regulations implementing NEPA (7 CFR part 1b), and

(4)APHIS' NEPA Implementing Procedures (7 CFR part 372). The environmental assessments may be viewed on the Regulations.gov Web site or in our reading room. We invite the public to comment on those environmental assessments. Comments on the environmental assessments may be submitted using the same process as comments on the proposed rule. (Instructions for accessing Regulations.gov and for submitting comments, and information on the location and hours of the reading room are provided under the heading ADDRESSES at the beginning of this proposed rule. In addition, copies may be obtained by calling or writing to the individual listed under FOR FURTHER INFORMATION CONTACT . Paperwork Reduction Act This proposed rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects 9 CFR Part 92 Animal diseases, Imports, Livestock, Poultry and poultry products, Region, Reporting and recordkeeping requirements. 9 CFR Part 93 Animal diseases, Imports, Livestock, Poultry and poultry products, Quarantine, Reporting and recordkeeping requirements. 9 CFR Part 94 Animal diseases, Imports, Livestock, Meat and meat products, Milk, Poultry and poultry products, Reporting and recordkeeping requirements. 9 CFR Part 98 Animal diseases, Imports. Accordingly, we propose to amend 9 CFR parts 92, 93, 94, and 98 as follows: PART 92—IMPORTATION OF ANIMALS AND ANIMAL PRODUCTS: PROCEDURES FOR REQUESTING RECOGNITION OF REGIONS 1. The authority citation for part 92 would continue to read as follows: Authority: 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. 2. In § 92.1, the definition of *European Union* would be revised to read as follows: § 92.1 Definitions. *European Union.* The organization of Member States consisting of Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Republic of Ireland, Spain, Sweden, and the United Kingdom (England, Scotland, Wales, the Isle of Man, and Northern Ireland). PART 93—IMPORTATION OF CERTAIN ANIMALS, BIRDS, FISH, AND POULTRY, AND CERTAIN ANIMAL, BIRD, AND POULTRY PRODUCTS; REQUIREMENTS FOR MEANS OF CONVEYANCE AND SHIPPING CONTAINERS 3. The authority citation for part 93 would continue to read as follows: Authority: 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. 4. In § 93.500, the definition of *European Union-15 (EU-15)* would be removed and a definition of *APHIS-defined EU CSF region* would be added, in alphabetical order, to read as follows: § 93.500 Definitions. *APHIS-defined EU CSF region.* The European Union Member States of Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Republic of Ireland, Spain, Sweden, and the United Kingdom (England, Scotland, Wales, the Isle of Man, and Northern Ireland). § 93.505 [Amended] 5. In § 93.505, paragraph (a), the words “region consisting of the EU-15 for the purposes of classical swine fever” would be removed and the words “APHIS-defined EU CSF region” would be added in their place, and the note at the end of the paragraph would be removed. PART 94—RINDERPEST, FOOT-AND-MOUTH DISEASE, FOWL PEST (FOWL PLAGUE), EXOTIC NEWCASTLE DISEASE, AFRICAN SWINE FEVER, CLASSICAL SWINE FEVER, AND BOVINE SPONGIFORM ENCEPHALOPATHY: PROHIBITED AND RESTRICTED IMPORTATIONS 6. The authority citation for part 94 would continue to read as follows: Authority: 7 U.S.C. 450, 7701-7772, 7781-7786, and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. 7. In § 94.0, the definition of *European Union-15 (EU-15)* would be removed and a definition of *APHIS-defined EU CSF region* would be added, in alphabetical order, to read as follows: § 94.0 Definitions. *APHIS-defined EU CSF region.* The European Union Member States of Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Republic of Ireland, Spain, Sweden, and the United Kingdom (England, Scotland, Wales, the Isle of Man, and Northern Ireland). § 94.1 [Amended] 8. In § 94.1, paragraph (a)(2) would be amended by adding the words “Latvia, Lithuania,” immediately after the word “Japan,”. § 94.1a [Removed] 9. Section 94.1a would be removed. § 94.9 [Amended] 10. In § 94.9, paragraphs

(b)and (c), the words “EU-15” would be removed and the words “APHIS-defined EU CSF region” added in their place. § 94.10 [Amended] 11. In § 94.10, paragraphs

(b)and (c), the words “EU-15” would be removed and the words “APHIS-defined EU CSF region” added in their place. § 94.11 [Amended] 12. In § 94.11, paragraph

(a)would be amended by adding the words “Latvia, Lithuania,” immediately after the word “Japan,”. 13. In § 94.12, paragraph

(a)would be revised to read as follows: § 94.12 Pork and pork products from regions where swine vesicular disease exists.

(a)Swine vesicular disease is considered to exist in all regions of the world except Australia, Austria, the Bahamas, Belgium, Bulgaria, Canada, Central American countries, Chile, the Czech Republic, Denmark, Dominican Republic, Fiji, Finland, France, Germany, Greece, Greenland, Haiti, Hungary, Iceland, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Panama, Poland, Portugal, Republic of Ireland, Romania, Spain, Sweden, Switzerland, Trust Territories of the Pacific, the United Kingdom (England, Scotland, Wales, the Isle of Man, and Northern Ireland), Yugoslavia, and the Regions in Italy of Friuli, Liguria, Marche, and Valle d'Aosta. 14. In § 94.13, in the introductory text of the section, the first sentence would be revised to read as follows: § 94.13 Restrictions on importation of pork or pork products from specified regions. Austria, the Bahamas, Belgium, Bulgaria, Chile, the Czech Republic, Denmark, France, Germany, Hungary, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Republic of Ireland, Spain, Switzerland, the United Kingdom (England, Scotland, Wales, the Isle of Man, and Northern Ireland), Yugoslavia, and the Regions in Italy of Friuli, Liguria, Marche, and Valle d'Aosta are declared free of swine vesicular disease in § 94.12(a) of this part. * * * § 94.24 [Amended] 15. Section 94.24 would be amended as follows: a. In the section heading, by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. b. In paragraph (a), introductory text, and paragraph (a)(1)(i), by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. c. In paragraphs (a)(1)(ii) and (a)(1)(iii), by removing the words “the EU-15” and adding the words “the APHIS-defined EU CSF region” in their place and by removing the words “an EU-15” and adding the word “the” in their place. d. In paragraph (a)(5), by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. e. In paragraph (b), introductory text, and paragraph (b)(2)(i), by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. f. In paragraph (b)(2)(ii) and (b)(2)(iii), by removing the words “the EU-15” and adding the words “the APHIS-defined EU CSF region” in their place and by removing the words “an EU-15” and adding the word “the” in their place. g. In paragraph (b)(6), by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. PART 98—IMPORTATION OF CERTAIN ANIMAL EMBRYOS AND ANIMAL SEMEN 16. The authority citation for part 98 would continue to read as follows: Authority: 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. 17. In § 98.30, the definition of *European Union-15 (EU-15)* would be removed and a definition of *APHIS-defined EU CSF region* would be added, in alphabetical order, to read as follows: § 98.30 Definitions. *APHIS-defined EU CSF region.* The European Union Member States of Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Republic of Ireland, Spain, Sweden, and the United Kingdom (England, Scotland, Wales, the Isle of Man, and Northern Ireland). § 98.38 [Amended] 18. Section 98.38 would be amended as follows: a. In the section heading, by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. b. In the introductory text of the section, paragraph (a), and paragraph (b)(1), by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. c. In paragraph (b)(2), by removing the words “the EU-15” and adding the words “the APHIS-defined EU CSF region” in their place and by removing the words “an EU-15” and adding the word “the” in their place. d. In paragraph (b)(3), by removing the words “EU-15 established” and adding the words “APHIS-defined EU CSF region established “ in their place and by removing the words “EU-15” immediately before the word “Member”. e. In paragraph (f), by removing the words “Office International des Epizooties” and the parentheses surrounding the words “World Organization for Animal Health”. f. In paragraph (i), by removing the words “EU-15” and adding the words “APHIS-defined EU CSF region” in their place. Done in Washington, DC, this 6th day of February 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-2327 Filed 2-9-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-27070; Directorate Identifier 2007-CE-003-AD] RIN 2120-AA64 Airworthiness Directives; British Aerospace Regional Aircraft Models HP.137 Jetstream Mk.1, Jetstream Series 200, Jetstream Series 3101, Jetstream Model 3201 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

(AD)for the products listed above. This proposed AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: This Airworthiness Directive * * * is published in order to maintain the structural integrity of the applicable aircraft. The Service Bulletin provides life limits for critical landing gear components. Failure of such items could lead to unsafe conditions. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by March 14, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*

(202)493-2251. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • *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. • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone

(800)647-5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Taylor Martin, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4138; fax:

(816)329-4090. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. This streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This proposed AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The proposed AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-27070; Directorate Identifier 2007-CE-003-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments. 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 we receive about this proposed AD. Discussion The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD No.: 2006-0087 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: This Airworthiness Directive * * * is published in order to maintain the structural integrity of the applicable aircraft. The Service Bulletin provides life limits for critical landing gear components. Failure of such items could lead to unsafe conditions. The MCAI requires: From the effective date of this AD, it is mandatory to comply with the requirements given in Jetstream Series 3100 and 3200 Service Bulletin 32-JA981042 Rev 5. Landing Gear—Main and Nose Landing Gears—To introduce life limitations and provide means of establishing total flight cycles since new for critical components * * * You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information BAE Systems has issued British Aerospace Jetstream Series 3100 and 3200 Service Bulletin 32-JA981042 Rev 5, dated November 1, 2005. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of the Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This Proposed AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 149 products of U.S. registry. We also estimate that it would take about 2 work-hours per product to comply with the requirements of this proposed AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $23,840, or $160 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed 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 regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **British Aerospace (Operations) Limited Trading As British Aerospace Regional Aircraft (Type Certificate No. A21EU) and British Aerospace Regional Aircraft (Type Certificate No. A56EU):** Docket No. FAA-2007-27070; Directorate Identifier 2007-CE-003-AD. Comments Due Date

(a)We must receive comments by March 14, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Models HP.137 Mk.1, Jetstream Series 200, Jetstream Series 3101, and Jetstream Model 3201 airplanes, all serial numbers, certificated in any category. Subject

(d)Air Transport Association of America

(ATA)Code 32: Landing Gear. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: This Airworthiness Directive * * * is published in order to maintain the structural integrity of the applicable aircraft. The Service Bulletin provides life limits for critical landing gear components. Failure of such items could lead to unsafe conditions. Actions and Compliance

(f)Unless already done, within 60 days after the effective date of this AD, comply with the requirements given in BAE Systems British Aerospace Jetstream Series 3100 and 3200 Service Bulletin 32-JA981042 Rev 5, dated November 1, 2005. Note 1: The compliance times of this AD are presented in cycles (landings) since new (CSN). If you do not keep the total CSN, then you may multiply the total number of airplane hours time-in-service by 0.75. FAA AD Differences Note 2: This AD differs from the MCAI and/or service information as follows: We allow a different method for calculating the CSN of a component listed in this AD. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Staff, FAA, ATTN: Taylor Martin, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4138; fax:

(816)329-4090, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19.

(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 *et. seq.* ), the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Refer to MCAI European Aviation Safety Agency

(EASA)AD No.: 2006-0087, dated April 18, 2006, and BAE Systems British Aerospace Jetstream Series 3100 and 3200 Service Bulletin 32-JA981042 Rev 5, dated November 1, 2005, for related information. Issued in Kansas City, Missouri, on February 5, 2007. David R. Showers, Acting Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-2312 Filed 2-9-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2005-23437; Airspace Docket No. 05-AWA-2] RIN 2120-AA66 Proposed Modification of the Phoenix Class B Airspace Area; Arizona AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: This action proposes to modify the Phoenix (PHX), AZ, Class B airspace area. Specifically, this action proposes to lower the ceiling to 9,000 feet mean sea level

(MSL)and expand the arrival extension boundaries to 30 Nautical Miles

(NM)to ensure the containment of the PHX Standard Terminal Arrival Routes

(STAR)at the Phoenix Sky Harbor International Airport, and correct the inefficiencies of several existing areas identified during public meetings, and reviews of the airspace by the Phoenix Airspace Users Work Group (PAUWG) and Phoenix Terminal Radar Approach Control (TRACON P50). The FAA is proposing this action to improve the flow of air traffic, enhance safety, and reduce the potential for midair collision in the PHX Class B airspace area, while accommodating the concerns of airspace users. Further, this effort supports the FAA's national airspace redesign goal of optimizing terminal and en route airspace areas to reduce aircraft delays and improve system capacity. DATES: Comments must be received on or before April 13, 2007. ADDRESSES: Send comments on this proposal to the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. You must identify FAA Docket No. FAA-2004-23437 and Airspace Docket No. 05-AWA-2, at the beginning of your comments. FOR FURTHER INFORMATION CONTACT: Ken McElroy, Airspace and Rules, Office of System Operations Airspace and AIM, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; *telephone:*

(202)267-8783. SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2005-23437 and Airspace Docket No. 05-AWA-2) and be submitted in triplicate to the Docket Management System (see ADDRESSES section for address and phone number). You may also submit comments through the Internet at *http://dms.dot.gov* . Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2005-23437 and Airspace Docket No. 05-AWA-2.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of NPRM's An electronic copy of this document may be downloaded through the Internet at *http://dms.dot.gov* . Recently published rulemaking documents can also be accessed through the FAA's Web page at *http://www.faa.gov* , or the **Federal Register** 's Web page at *http://www.gpoaccess.gov/fr/index.html* . You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Regional Air Traffic Division, Federal Aviation Administration, 15000 Aviation Boulevard, Lawndale, CA 90261. Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking,

(202)267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. Background In 1989, the FAA issued a final rule establishing the Phoenix Terminal Control Area (TCA). This area was later re-classified as a Class B airspace area as a result of the Airspace Reclassification Final Rule (56 FR 65638). Since its establishment, the Phoenix Class B airspace area has undergone several modifications. The existing Class B airspace area was developed in the early 1990s and revised in 1998 (63 FR 58291). Reviews of the airspace were conducted by representatives of P50 and the results presented to the PAUWG at regularly scheduled meetings during the last twelve months. These reviews indicated that the current Class B airspace contained areas of inefficiencies where boundary location/identification can be improved, and identified areas in need of modification to ensure the containment of STARs within Class B airspace. The proposed Class B airspace modifications will address these matters. Public Input As announced in the **Federal Register** (71 FR 5102), informal airspace meetings were held April 25, 2006, at the Glendale Airport Terminal Building, Glendale AZ; April 27, 2006, at Williams Gateway Airport, Mesa, AZ; and May 2, 2006 at the Deer Valley Airport, Phoenix, AZ. These meetings allowed interested airspace users an opportunity to present their views and offer suggestions regarding planned modifications to the PHX Class B airspace area. All comments received during the informal airspace meetings and the subsequent comment period were considered in developing this proposal. The Airline Pilots Association, International

(ALPA)cited the continuing problem of Traffic Alert and Collision Avoidance System

(TCAS)resolution advisories with the current ceiling of 3,000 feet on the final approach course. Pointing out their agreement with lowering the airspace floor on the final from 3,000 to 2,700 feet, they endorsed the proposal. The Aircraft Owners and Pilots Association (AOPA), Deer Valley Pilots Association

(DVPA)and the Arizona Pilots Association

(APA)provided detailed comments and alternatives to consider. These organizations advised their members to comment to the FAA in support of their well-advertised counter proposals. Of 82 written comments received, 24 specifically indicated their concurrence to similar APA or AOPA proposals. An additional 29 comments, in a form letter published on the DVPA website, indicated concurrence with the “ad-hoc committee” alternate proposal. Although the PAUWG ad-hoc committee did not author a proposal as referenced, language in the website indicated concurrence with the AOPA and APA alternate proposals. The remaining commenters responded with similar concerns or concurrence with the FAA proposal. Two glider operators are affected by the lowering of the ceiling. 14 CFR 91.215 exempts gliders from the Mode C requirement within the Mode C Veil up to 10,000 feet or the ceiling of the Class B Airspace, whichever is lower. The 9,000-foot ceiling would thus limit non-Mode C equipped gliders to that altitude. P50 has agreed to enter into a Letter of Agreement

(LOA)with these operators, providing relief from the provisions of 14 CFR 91.215(b)

(3)(ii). Three comments received were in favor of the 9,000-foot ceiling. They cited the increased ability to fly over the airspace at a lower altitude. Seven comments were in opposition of the 9,000-foot ceiling due to the potential impact to the glider community. Four of these stated that the 9,000-foot ceiling would be acceptable if there were a LOA waiving the requirements of 14 CFR 91.215(b)

(3)(ii). The FAA agrees that lowering the ceiling to 9,000 feet will accomplish the goal of having arrival traffic enter the top of Class B airspace. Additionally, the lower ceiling will enable Visual Flight Rules

(VFR)traffic to transit the Phoenix area at a lower altitude above the Class B airspace without contacting ATC. The impact to the glider community will be eliminated with a LOA waiving the requirements of 14 CFR 91.215(b)

(3)(ii). Numerous individual commenters expressed a general criticism of the complex design, including those in agreement with alternative proposals expressing concerns over being able to navigate around Distance Measuring Equipment

(DME)arcs. A frequent statement was made that “without moving map avionics, I will be unable to identify the boundaries”. DVPA objected to the use of DME arcs since the General Aviation

(GA)pilot primarily uses pilotage for navigation. Use of DME would require pilots to spend too much time looking in the cockpit rather than for traffic. The current method for defining airspace boundaries on the final, within 15 NM of PHX, is through north-south road alignments requiring local knowledge. Large turbine-powered aircraft are required to operate at or above the floors of the Class B airspace while arriving and departing the primary airport. Transient pilots, without local area knowledge, have no reliable means to determine their position relative to the next floor of airspace. The current Class B airspace has multiple areas defined along the 15, 20, and 25 DME arcs. The use of DME arcs to define the Class B airspace is consistent with other airports around the country. FAA Order 7400.2E para 15-2-3 b., prescribes the use of Navigational Aid (NAVAIDS) as references where available to describe the airspace. The Phoenix area has abundant geographical features that assist in basic pilotage around the proposed airspace. This is currently the case with the existing 15, 20, and 25 DME arcs. Area A Several commenters and organizations objected to the “Bowtie” design of the surface area and suggested that defining the surface area was difficult north and south of PHX since it is not associated with any Very High Frequency Ommidirectional Range

(VOR)radials or ground reference points. The FAA does not agree. Large turbine-powered aircraft arriving PHX are required to be sequenced to a 5 NM final. Jet aircraft departures may only diverge upon reaching a point 5 NM east or west of the airport due to noise abatement procedures. Large turbine-powered aircraft departures may diverge 30 degrees from runway heading on departure. The result is large areas north and south of the PHX airport that large turbine-powered aircraft never traverse. The published East/West Transition route over PHX is a heavily used transition through the Class B airspace between 3,500-5,000 feet. The current surface area requires TRACON to keep these aircraft on frequency until departing the surface area approximately 5 NM from the airport. The proximity of the Scottsdale Airport

(SDL)and Phoenix Deer Valley Airport

(DVT)Class D airspace to the current Class B airspace offers little time for aircraft to establish contact with these facilities prior to entering their airspace. South of PHX, the transition is bracketed by 3,000-foot areas. These areas force aircraft, using the transition, to descend below the published transition altitudes enroute to Stellar Airpark (P19), Chandler Municipal Airport (CHD), and Williams Gateway Airport (IWA), or points east. The Bowtie configuration and adjacent airspace change proposals will allow these aircraft to change frequencies sooner and fly at higher altitudes below Class B airspace. Aircraft flying the charted transition route will remain well clear of the surface area diagonals. Area B Several commenters suggested retaining the existing road definitions contained in the current Class B airspace description for the surface area. One commentor suggested that if DME arcs were used, they should be made tangential to the inside of the existing 51st and 99th Avenue alignments. This area retains the existing 3,000-foot airspace to the west of PHX. A continuation of the southwest diagonal of the surface area A is used for the southern boundary. The use of DME arcs to define Class B airspace is consistent with FAA policies. The proposed 10 and 15 DME arcs will be tangent to the current 51st and 99th Avenue alignments, affording a convenient reference for non-participating local pilots to navigate. Area C Numerous individual commenters and those in agreement with alternative proposals, expressed concern over the 1,470 foot Mesa Towers and their affect on the VFR Flyway. 14 CFR 91.119, Minimum Safe Altitudes: General, requires 1,000-foot vertical and 2,000-foot horizontal separation. Several commenters stated, if a power unit fails, the 2,700-foot base of the Class B airspace would not allow them to operate at an altitude allowing an emergency landing. AOPA commented that if the floor is lowered 300 feet, then the adjacent sector must remain as large as possible. The FAA does not agree. Moving the VFR flyway east of the PXR 10 DME will encourage aircraft to operate away from an area of intense large turbine-powered aircraft activity. The flyway will pass over FFZ airport at a higher recommended altitude allowing more time for a contingency involving a power failure. Non-participating aircraft can still operate under the 2,700-foot shelf and meet the requirements of FAR 91.119 by maintaining 2,000 feet horizontal clearance from the obstacle (Mesa Towers). The airspace that is lowered no longer includes the areas north of Camelback Road and south of Guadalupe Road. That adjoining airspace will be raised 1,000 feet, with one airspace area, raised 2,000 feet in the area north of Stellar Airpark. This airspace will allow aircraft choosing to circumnavigate the Class B airspace to fly at the recommended 3,500 feet along the flyway east of the PXR 10 DME. Area D AOPA, APA and DVPA endorsed proposals suggesting the 4,000-feet area retain its uniformity across the north and south valleys. The current surface area and 4,000 foot area north of PHX, would be raised to 5,000 feet. This decompresses traffic operating under the Class B airspace near the mountains immediately north of PHX. Aircraft requesting a transition south over PHX, can contact TRACON at a higher altitude approaching the transition in an area of limited radar and radio coverage. Aircraft not receiving Class B clearance are expected to remain outside of the airspace if clearance is not received. The current airspace requires aircraft to remain below 4,000 feet in areas of terrain as high as 2,700 feet, or north of this area at a higher altitude, in the vicinity of the SDL and DVT airports until clearance is received. Raising the airspace to 5,000 feet and increasing its size to the south achieves the goal of enabling more vertical airspace for aircraft to maneuver and to see and avoid traffic. The majority of aircraft requesting the transition operate at speeds less than 150 knots. Two major freeways identifying the airspace boundaries bracket this volume as a ground reference favored by many commenters. They are approximately 12.5 NM apart providing ample room to maneuver. Area E The current surface area and 4,000 foot area south of PHX would be raised to 5,000 feet. This decompresses traffic operating under the Class B airspace near South Mountain. This area raises portions of the Class B airspace currently at 3,000 feet northwest of the CHD airport. At this time, aircraft departing the transition must descend below 3,000 feet before turning east, then must contact CHD tower for transition through the CHD Class D airspace below 3,000 feet. The proposed change would offer the option of flying over CHD Class D airspace. The higher altitude offers the opportunity to fly higher south and west from south valley airports. Additionally, the southern boundary is contracted north approximately 3 NM allowing non-participating aircraft to operate at higher altitudes. Area F One commenter suggested that the existing 6,000 foot shelf be extended north over Luke AFB consistent with the lateral limits proposed by the FAA. The APA and one commenter provided detailed graphics of the potential of raising the Instrument Landing System

(ILS)glide slope to 3.5 degrees. The FAA does not agree. In this area, the airspace is being expanded to contain PHX arrival traffic during periods of sustained arrival demand and for the development of simultaneous independent ILS approach procedures during peak traffic operations. The ability to develop these procedures is critical in enabling PHX TRACON to efficiently and safely manage the arrival rate demand during reduced visibility conditions. ALPA stated they oppose any effort to raise the ILS glide slope above the three degree standard as suggested by the APA. *Area G:* No comments specific to this area received. Area H One commenter stated the advantage of this small block of airspace is offset by the difficulty pilots will have in locating the boundaries. Another emphasized this block of airspace needs to be simplified. AOPA, APA & DVPA proposals are in favor of a rectangular 4,000-foot area containing this area. The FAA does not agree. The Minimum Vectoring Altitude

(MVA)in this area is 5,000 feet. Current Class B airspace and alternative proposals, contain this area in a 4,000-foot area. TRACON cannot operate in this area below the MVA, and though a rectangular area with a floor of 4,000 feet as suggested may aid in simplification, it is overly restrictive to pilots able to navigate around or below it. Aircraft, navigating via the currently published Gila Route without Class B clearance, will be able to avoid the airspace below 5,000 feet. TRACON requires this area to descend aircraft on a base leg to join the ILS at CAGOR intersection (PXR 16 DME) at 5,000 feet. Area I Numerous individual comments and those in agreement with alternative proposals expressed concerns over being able to climb above higher terrain east of PHX. AOPA commented in reference to FAA Advisory Circular AC No: 91-36D, VFR Flight Near Noise Sensitive Areas, referencing the Superstition Mountains. The FAA does not agree. This airspace is expanded to contain PHX arrival traffic during periods of sustained arrival demand, and for the development of simultaneous independent ILS approach procedures during west traffic. The ability to develop these procedures is critical in enabling PHX TRACON to efficiently and safely manage the arrival rate demand during reduced visibility conditions. Non-participating aircraft have the option of adjusting their flight to avoid precipitous terrain or calling TRACON for a Class B clearance in order to climb sooner. AC-91-36D does not apply where it would conflict with regulations, ATC instructions, or where a pilot believes that operating below 2,000 feet is necessary for safety of flight. *Area J:* No comments specific to this area received. *Area K:* No comments specific to this area received. Area L The Class B Airspace southern boundary in this area would be expanded south to contain ARLIN Arrivals on the IWA R-256 radial at 6,000 feet. AOPA and APA recommended in the alternative proposals that a portion of this area be included in the 4,000-foot area rectangle. The 4,000-foot rectangular area, as proposed, would represent a barrier to non-participating aircraft attempting to navigate north of the Estrella mountains. Terrain penetrates the suggested area with a 4,512-foot peak and surrounding terrain. This area would be more restrictive than the current airspace, thus forcing non-participating aircraft closer to the ground. The MVA in this area is 5,500 feet and does not require Class B protection at 4,000 feet. Area M and Q One commenter, and the alternative proposals, suggest that the tab could be narrower if aircraft were not vectored off the published arrival routes until they are within the Mode C Veil. The FAA does not agree. Aircraft arriving on the PXR 336R STAR are vectored off the arrival for sequencing to the base leg during east traffic operations. These aircraft need to be on a base leg at sufficient distance to allow a simultaneous downwind flow from the northeast arrival STAR. Retaining the aircraft on the arrival until closer to the airport would require multiple vectors to position aircraft, creating sector complexity and an inefficient operation. Area N The alternative proposals omit this area in favor of retaining the existing 6,000-foot area. Only large turbine-powered aircraft, departing PHX and forced to level at 7,000 feet to avoid arrival traffic at 8,000 feet, use this area. TRACON does need 6,000 feet in this area for PHX traffic. The current 6,000-foot area forces non-participating traffic to remain below 6,000 until 20 NM when climbing north out of the valley. This causes conflict with numerous high performance aircraft on the SWIRL arrival to the SDL and DVT airports. These aircraft are required to level at 6,000 due to MVA restrictions until approaching 20NM north of PHX before descending. The added 1,000 feet of airspace will offer the opportunity for non-participating aircraft to climb higher and de-conflict with these aircraft. *Area O:* No comments specific to this area received. *Area P:* No comments specific to this area received. *Area Q:* See “Area M”. *Area R:* No comments specific to this area received. *Area S:* No comments specific to this area received. *Area T:* No comments specific to this area received. Area U One GA pilot representative organization suggested that this area is unnecessary for airline approaches that strictly remain on the 3 degree published glide slope. The FAA does not agree. The PXR 10 DME arc used to define part of the 2,700-foot Area C, overlaps the FFZ Class D airspace. FFZ ATCT has operational need to retain this airspace for its traffic within Class D below 3400 feet. As part of this proposal, FFZ has agreed to amend its Class D boundary to the area east of Gilbert Road. This would allow non-participating aircraft operating under the 2,700-foot floor beyond the 6 DME surface area, to retain the same lateral space between the surface area and Class D airspace that currently exists. In order to provide a DME reference to aircraft on final and to protect ILS crossing altitudes, the area above FFZ Class D airspace between Gilbert Road and the PXR 10 DME, is defined as Class B Floor 3,400 feet. This also provides a north-south road reference for locally based pilots to avoid Class B and D airspace. The Proposal The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 to modify the PHX Class B airspace area. Specifically, this action (depicted on the attached chart) proposes to expand the eastern boundary to ensure the containment of the PHX STARs within Class B airspace and reconfigure several existing areas, correcting areas of inefficiencies identified during public meetings hosted by Phoenix TRACON. These proposed modifications would reduce the overall size of the PHX Class B airspace area, improve the containment of turbo-jet aircraft within the airspace, and improve the alignment of lateral boundaries with VOR radials and visual landmarks for improved VFR navigation. The following are the proposed revisions for the PHX Class B airspace: The floor of the airspace east and west of PHX is lowered to contain PHX arrival traffic during periods of sustained arrival demand. Additionally, these proposed changes would facilitate the planned development of simultaneous, independent ILS approach procedures by creating necessary Class B airspace to contain the new procedures. The ability to develop these procedures is critical in enabling PHX to sustain an arrival rate equivalent to demand during reduced visibility conditions. During these periods, the airport arrival rate

(AAR)is reduced by over 30%, from 72 aircraft an hour to 48 aircraft an hour. This creates a nationwide impact to the National Airspace System

(NAS)that in the past has taken the user days to recover. The floor north and south of PHX is raised to create greater access for VFR aircraft in areas that do not require Class B airspace. The results of the proposed Phoenix Class B changes are the proper containment of large turbine-powered aircraft within Class B airspace, more efficient traffic management during periods of reduced visibility, increased arrival rate demand, de-confliction of non-participating aircraft operating in close proximity to ILS crossing altitudes east of the airport, and better alignment of lateral boundaries with prominent and abundant visual landmarks for improved VFR navigation. Regulatory Evaluation Summary Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule. We suggest readers seeking greater detail read the full regulatory evaluation, a copy of which we have placed in the docket for this rulemaking. In conducting these analyses, the FAA has determined that this proposed rule:

(1)Has benefits that justify its costs,

(2)is not an economically “significant regulatory action” as defined in section 3(f) of Executive Order 12866,

(3)is not “significant” as defined in DOT's Regulatory Policies and Procedures;

(4)would not have a significant economic impact on a substantial number of small entities;

(5)would not create unnecessary obstacles to the foreign commerce of the United States; and

(6)would not impose an unfunded mandate on state, local, or tribal governments, or on the private sector by exceeding the threshold identified above. These analyses are summarized below. This NPRM would modify Phoenix, AZ, Class B airspace at Phoenix Sky Harbor International Airport. The proposed rule would lower the altitude ceiling of the airspace and expand the arrival extension boundaries. The NPRM would generate benefits for system users and the FAA in the form of enhanced operational efficiency, simplified navigation in the Phoenix terminal area and may reduce circumnavigation costs. Since Class B airspace is already in place at Phoenix, and since the modifications proposed in this rule are a contraction of the Class B airspace, minimal costs, if any, would result. Thus, the FAA has determined this proposed rule would be cost-beneficial. Initial Regulatory Flexibility Determination The Regulatory Flexibility Act of 1980 (Pub. L. 96-354)

(RFA)establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions. Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA. However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear. This proposed rule should not impose any circumnavigation costs on individuals operating in the Phoenix area and the proposed rule would not impose any costs on small business entities. Operators of GA aircraft are considered individuals, not small business entities, and are not included when performing a regulatory flexibility analysis. Flight schools are considered small business entities. However, the FAA assumes that they provide instruction in aircraft equipped to navigate in Class B airspace given they currently provide instruction in the Phoenix terminal area. Therefore, the FAA certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities. The FAA solicits comments from affected entities with respect to this finding and determination. International Trade Impact Assessment The Trade Agreements Act of 1979 (Public Law 96-39) prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this proposed rule and has determined that it would have only a domestic impact and therefore no affect on international trade. Unfunded Mandates Assessment Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $128.1 million in lieu of $100 million. This proposed rule does not contain such a mandate. Conclusion In view of the *de minimus* possible cost of compliance, potential cost savings of the proposed rule and enhancements to aviation safety and operational efficiency, the FAA has determined the proposed rule would be cost-beneficial. The FAA solicits comments regarding this determination. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). The Proposed Amendment In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for 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 the 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 3000 Subpart B—Class B Airspace AWP AZ B Phoenix, AZ Phoenix Sky Harbor International Airport (Primary Airport) (Lat. 33°26′10″ N., long. 112°00′34″ W.) Phoenix VORTAC (Lat. 33°25′59″ N., long. 111°58′13″ W.) Boundaries *Area A.* That airspace extending upward from the surface to and including 9,000 feet MSL defined by an east/west line along the northern boundary defined by Camelback Road and the PXR 10 DME, thence east to the intersection of Camelback Road and I-17; thence a line direct to the I-10/Squaw Peak Stack following the Loop 202 Freeway from the I-10/Squaw Peak Stack to the Red Mountain Hohokam Stack; thence northeast to the intersection of Camelback Road and Hayden Wash (lat. 33°30′07″ N., long. 111°54′32″ W.); thence east along Camelback Road to the PXR 6 DME arc (lat. 33°30′07″ N., long. 111°53′00″ W.); thence south to the Power Line/Canal (lat. 33°21′25″ N., long. 111°53′33″ W.); thence west to a point at lat. 33°21′25″ N., long. 111°55′12″ W., thence northwest to the intersection of I-10 and SR-143 (lat. 33°24′37″ N., long. 111°58′38″ W.); thence west to SR-51/I-10 extension to lat. 33°24′34″ N., long. 112°02′13″ W., thence southwest to a point at lat. 33°21′45″ N., long. 112°06′20″ W.; thence west along the lat. 33°21′45″ N.; thence north along the PXR 10 DME arc until intersecting Camelback Road. *Area B.* That airspace extending upward from 3,000 feet MSL to and including 9,000 feet MSL defined by an east/west line along the northern boundary defined by the intersection of Camelback Road and the PXR 15 DME arc; thence east along Camelback Road to the intersection of Camelback Road and the PXR 10 DME arc; thence south along the PXR 10 DME arc until the intersection with lat. 33°21′45″ N.; thence east along lat. 33°21′45″ N. to lat. 33°21′45″ N., long. 112°06′20″ W.; thence southwest direct to the intersection of the Gila River and the Chandler Blvd extension (lat. 33°18′18″ N., long. 112°12′03″ W.); thence northwest along the Gila River to the intersection of the river and the PXR 15 DME arc; thence northwest along the PXR 15 DME arc to the intersection of Camelback Road. *Area C.* That airspace extending upward from 2,700 feet MSL to and including 9,000 feet MSL defined by an east/west line along the northern boundary defined by the intersection of Camelback Road and PXR 6 DME arc (lat. 33°30′07″ N., long. 111°53′00″ W.); thence east to the intersection of Gilbert Road and PXR 10 DME arc; thence south along Gilbert Road to the intersection of Gilbert Road and Falcon Field

(FFZ)Class D airspace (lat. 33°24′35″ N., long. 111°47′18″ W.); thence southeast along the FFZ Class D airspace boundary to the intersection with the PXR 10 DME arc; thence southwest along the PXR 10 DME arc to the intersection with lat. 33°21′25″ N.; thence west along lat. 33°21′25″ N. to the intersection of the PXR 6 DME arc; thence north along the PXR 6 DME arc to the intersection of Camelback Road with (lat. 33°30′07″ N., long. 111°53′00″ W.). *Area D.* That airspace extending upward from 5,000 feet MSL to and including 9,000 feet MSL defined by an east/west line along the northern boundary using the Peoria Avenue/Shea Boulevard alignment from the intersection of I-17 (lat. 33°35′00″ N., long. 112°07′00″ W.); thence east along lat. 33°35′00″ N. to the intersection with Pima Road (lat. 33°35′00″ N., long. 111°53′28″ W.); thence south along Pima Road to the intersection of Camelback Road; thence west along Camelback Road to Hayden Wash (lat. 33°30′07″ N., long. 111°54′32″ W.); thence southwest on a line direct to the Red Mountain Hohokam Stack; thence west along the Loop 202 Freeway to the I-10/Squaw Peak Stack; thence northwest to the intersection of Camelback Road and I-17; thence north along I-17 to the intersection of I-17 and Peoria Avenue/Shea Boulevard. *Area E.* That airspace extending upward from 5,000 feet MSL to and including 9,000 feet MSL defined by an eastern boundary starting at the intersection of I-10/SR-143 (lat. 33°24′37″ N., long. 111°58′38″ W.); thence southeast to lat. 33°21′25″ N., long. 111°54′55″ W.; thence southeast to the Chandler Airport (lat. 33°16′00″ N., long. 111°48′40″ W.); thence west along lat. 33°16′00″ N. to the intersection of the Gila River; thence north along the river to the intersection of the Chandler Boulevard extension (lat. 33°18′18″ N., long. 112°12′03″ W.); thence northeast direct to lat. 33°21′45″ N., long. 112°06′20″ W.; thence northeast direct to lat. 33°24′34″ N., long. 112°02′13″ W.; thence east to the intersection of I-10/SR-143. *Area F.* That airspace extending upward from 4,000 feet MSL to and including 9,000 feet MSL defined by an east/west line along the northern boundary at the intersection of Peoria Avenue/Shea Boulevard and PXR 25 DME (lat. 33°35′00″ N., long. 112°26′07″ W.); thence east along lat. 33°35′00″ N. to the intersection of I-17 (lat. 33°35′00″ N., long. 112°07′00″ W.); thence south along I-17 to the intersection of Camelback Road; thence west along Camelback Road to the intersection of the PXR 15 DME arc; thence south along the PXR 15 DME arc to lat. 33°24′00″ N., long. 112°15′59″ W.; thence west along lat. 33°24′00″ N. to the intersection of the PXR 25 DME; thence north along the PXR 25 DME arc north to the intersection of Peoria Avenue/Shea Boulevard (lat. 33°35′00″ N., long. 112°26′07″ W.). *Area G.* That airspace extending upward from 4,000 feet MSL to and including 9,000 feet MSL defined by an east/west line along the northern boundary defined by Peoria Avenue/Shea Boulevard and the intersection of Pima Road (lat. 33°35′00″ N., long. 111°53′28″ W.); thence east along lat. 33°35′00″ N. to the PXR 15 DME arc; thence south along the PXR 15 DME arc to lat. 33°16′00″ N.; thence west along lat. 33°16′00″ N. to Chandler Airport (lat. 33°16′00″ N., long. 111°48′40″ W.); thence direct northwest to lat. 33°21′25″ N., long. 111°55′12″ W.; thence east along the Power Line/Canal (lat. 33°21′25″ N.) to the PXR 10 DME arc; thence north along the PXR 10 DME arc to the intersection of Camelback Road; thence west along Camelback Road to the intersection of Pima Road; thence north along Pima Road to the intersection of Peoria Avenue/Shea Boulevard (lat. 33°35′00″ N., long. 111°53′28″ W.). *Area H.* That airspace extending upward from 5,000 feet MSL to and including 9,000 feet MSL defined by an east/west line from the intersection of Litchfield Road and Southern Avenue (lat. 33°24′00″ N., long. 112°21′30″ W.); thence east along lat. 33°24′00″ N. to the intersection of the PXR 15 DME arc; thence southeast along the PXR 15 DME arc to lat. 33°20′00″ N.; thence west along lat. 33°20′00″ N. to intersect the extension of Litchfield Rd (lat. 33°20′00″ N., long. 112°21′30″ W.); thence north along the Litchfield Road to lat. 33°24′00″ N., long. 112°21′30″ W. *Area I.* That airspace extending upward from 5,000 feet MSL to and including 9,000 feet MSL defined by an east/west line along lat. 33°35′00″ N. from the intersection of Peoria Avenue/Shea Boulevard and the PXR 15 DME arc east to the PXR 25 DME arc (lat. 33°35′00″ N., long. 111°30′18″ W.); thence south along the PXR 25 DME arc to lat. 33°16′00″ N.; thence west along lat. 33°16′00″ N. to the PXR 15 DME arc; thence north along the PXR 15 DME arc to the intersection of Peoria Avenue/Shea Boulevard (lat. 33°35′00″ N.). *Area J.* That airspace extending upward from 6,000 feet MSL to and including 9,000 feet MSL defined by lat. 33°35′00″ N., long. 112°15′40″ W. on the Loop 101 Freeway; thence north along the freeway to a point at lat. 33°40′00″ N., long. 112°13′45″ W.; thence north to lat. 33°41′41″ N., long. 112°13′05″ W. on the PXR 20 DME arc; thence east along the PXR 20 DME arc to the PXR 354°(T)/342°(M) radial; thence south along the PXR 354°(T)/342°(M) radial to the intersection of the Loop 101 Freeway; thence east along the freeway to a point on Loop 101 Freeway at the approach end of Scottsdale Airport Runway 21 (lat. 33°38′39′″ N., long. 111°53′31″ W.); thence northeast to lat. 33°43′38″ N., long. 111°46′54″ W. on the PXR 20 DME arc; thence southeast along the PXR 20 DME arc to intersect lat. 33°35′00″ N.; thence west along lat. 33°35′00″ N. to lat. 33°35′00″ N. long. 112°15′40″ W. *Area K.* That airspace extending upward from 6,000 feet MSL to and including 9,000 feet MSL defined by the intersection of PXR 17 DME arc and lat. 33°16′00″ N.; thence east along lat. 33°16′00″ N. to the PXR 20 DME arc; thence southwest along the PXR 20 DME arc to I-10 (lat. 33°07′02″ N., long. 111°50′26″ W.); thence northwest along I-10 to lat. 33°09′39″ N., long. 111°52′28″ W. on the PXR 17 DME arc; thence clockwise along the PXR 17 DME arc to intersect with lat. 33°16′00″ N. *Area L.* That airspace extending upward from 6,000 feet MSL to and including 9,000 feet MSL defined by the intersection of the PXR 25 DME arc and lat. 33°24′00″ N.; thence east along lat. 33°24′00″ N. to Litchfield Road; thence south along Litchfield Road to lat. 33°20′00″ N., long. 112°21′30″ W.; thence east along lat. 33°20′00″ N. to the PXR 15 DME arc; thence southeast along the PXR 15 DME arc to the Gila River; thence southeast along the Gila River to lat. 33°16′00″ N.; thence west along lat. 33°16′00″ N. to the PXR 25 DME arc; thence north along the PXR 25 DME to lat. 33°24′00″ N. *Area M.* That airspace extending upward from 7,000 feet MSL to and including 9,000 feet MSL defined by lat. 33°48′02″ N., long. 112°12′24″ W.; thence east along the PXR 25 DME arc to the PXR 354°(T)/342°(M) radial; thence south along the PXR 354°(T)/342°(M) radial to the PXR 20 DME arc; thence west along the PXR 20 DME arc to lat. 33°41′41″ N. long. 112°13′05″ W.; thence north to lat. 33°48′02″ N., long. 112°12′24″ W. *Area N.* That airspace extending upward from 7,000 feet MSL to and including 9,000 feet MSL defined from the PXR 354°(T)/342°(M) radial and the PXR 20 DME arc; thence east along the PXR 20 DME arc to lat. 33°43′38″ N., long. 111°46′54″ W.; thence southwest to the approach end of Scottsdale Airport Runway 21 (lat. 33°38′39″ N., long. 111°53′31″ W.); thence northwest along the Loop 101 Freeway to the intersection of the PXR 354°(T)/342°(M) radial; thence north along the PXR 354°(T)/342°(M) radial to the PXR 20 DME arc. *Area O.* That airspace extending upward from 7,000 feet MSL to and including 9,000 feet MSL defined from lat. 33°47′11″ N., long. 111°42′16″ W.; thence southeast along the PXR 25 DME arc to intersect the Peoria Avenue/Shea Boulevard extension (lat. 33°35′00″ N., long. 111°30′18″ W.); thence west along lat. 33°35′00″ N. to the PXR 20 DME arc; thence northwest along the PXR 20 DME arc to lat. 33°43′38″ N., long. 111°46′54″ W., thence northeast to lat. 33°47′11″ N., long. 111°42′16″ W. *Area P.* That airspace extending upward from 7,000 feet MSL to and including 9,000 feet MSL defined by the intersection of the PXR 20 DME arc and lat. 33°16′00″ N., long. 111°37′25″ W.; thence east along lat. 33°16′00″ N. to intersect with the PXR 25 DME arc; thence southwest along the PXR 25 DME arc to intersect with I-10; thence northwest along I-10 to intersect with the PXR 20 DME arc; thence northeast along the PXR 20 DME arc to the intersection of lat. 33°16′00″ N. *Area Q.* That airspace extending upward from 8,000 feet MSL to and including 9,000 feet MSL defined by lat. 33°53′48″ N., long. 112°11′50″ W.; thence east along the PXR 30 DME arc to the PXR 354°(T)/342°(M) radial; thence south along the PXR 354°(T)/342°(M) radial to the PXR 25 DME arc; thence west along the PXR 25 DME arc to lat. 33°48′02″ N., long. 112°12′24″ W.; thence north to lat. 33°53′48″ N., long. 112°11′50″ W. *Area R.* That airspace extending upward from 8,000 feet MSL to and including 9,000 feet MSL defined by lat. 33°50′38″ N., long. 111°37′39″ W. on the PXR 30 DME arc; thence southeast along the PXR 30 DME arc to lat. 33°43′44″ N., long. 111°29′14″ W.; thence south to lat. 33°40′46″ N., long. 111°34′03″ W. on the PXR 25 DME arc; thence northwest along the PXR 25 DME arc to lat. 33°47′11″ N., long. 111°42′16″ W.; thence northeast direct to lat. 33°50′38″ N., long. 111°37′39″ W. *Area S.* That airspace extending upward from 8,000 feet MSL to and including 9,000 feet MSL defined by the intersection of the PXR 25 DME and PXR 127°(T)/115°(M) radial; thence southeast along the PXR 127°(T)/115°(M) radial to the PXR 30 DME arc; thence southwest along the PXR 30 DME arc to intersect with I-10; thence northwest along I-10 to the PXR 25 DME arc; thence northeast along the PXR 25 DME arc to intersect with the PXR 127°(T)/115°(M) radial. *Area T.* That airspace extending upward from 7,000 feet MSL to and including 9,000 feet MSL defined by lat. 33°30′34″ N., long. 112°27′36″ W.; thence west along lat. 33°30′34″ N. to the PXR 30 DME arc; thence south along the PXR 30 DME arc to lat. 33°16′00″ N.; thence east along lat. 33°16′00″ N. to the PXR 25 DME arc; thence north along the PXR 25 DME arc to lat. 33°30′34″ N., long. 112°27′36″ W. *Area U.* That airspace extending upward from 3,400 feet MSL to and including 9,000 feet MSL defined from the intersection of the PXR 10 DME arc and Camelback Road (lat. 33°30′08″ N., long. 111°47′20″ W.); thence south along the PXR 10 DME arc to intersect with the southwest boundary of FFZ Class D airspace (lat. 33°24′02″ N., long. 111°46′30″ W.); thence northwest along FFZ Class D line to Gilbert Road (lat. 33°24′35″ N., long. 111°47′18″ W.); thence north along Gilbert Road to the intersection of Camelback Road and the PXR 10 DME arc (lat. 33°30′08″ N., long. 111°47′20″ W.). Issued in Washington DC, on February 2, 2007. Edith V. Parish, Manager, Airspace and Rules. EP12FE07.004 [FR Doc. 07-599 Filed 2-9-07; 8:45 am]

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