Rules and Regulations. Proposed rule

Agency: Animal and Plant Health Inspection Service, USDA
Action: Proposed rule
Citation: 72 FR (No. 107) · FR Doc. 07-2787 · RIN 0579-AC40 · Docket No. APHIS-2007-0061 · 7 CFR 305, 319

Summary

We are proposing to allow the importation into the continental United States of fresh blueberries from South Africa and Uruguay under certain conditions. As a condition of entry, the blueberries would have to undergo cold treatment and would have to be accompanied by a phytosanitary certificate issued by the national plant protection organization of the exporting country. This action would allow for the importation of blueberries from South Africa and Uruguay into the continental United States while continuing to provide protection against the introduction of quarantine pests. In addition, we are proposing to allow the use of cold treatment for blueberries imported into the United States from Argentina. This action would provide an alternative to the methyl bromide treatment that is currently required for blueberries imported from Argentina.

Dates

We will consider all comments regarding this proposed rule that we receive on or before July 20, 2007 and all comments regarding the information collection requirements associated with this proposed rule that we receive on or before August 6, 2007.

Supplementary Information

Background The regulations in “Subpart—Fruits and Vegetables” (7 CFR 319.56 through 319.56-8, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests that are new to or not widely distributed within the United States. The national plant protection organization (NPPO) of South Africa has requested that the Animal and Plant Health Inspection Service (APHIS) amend the regulations to allow fresh blueberries ( Vaccinium spp.) to be imported from South Africa into the continental United States. In addition, the NPPO of Uruguay has requested that APHIS amend the regulations to allow fresh blueberries (the highbush blueberries Vaccinium corymbosum L. and the rabbit-eye blueberries Vaccinium virgatum Aiton) to be imported from Uruguay into the continental United States. As part of our evaluation of South Africa's and Uruguay's requests, we prepared pest risk assessments (PRA) for each country, as well as a risk management document that covers both countries. For these risk assessments, we assumed that any blueberries imported into the United States would undergo minimal post-harvest fruit processing, which includes the commercial processes of culling, packing, and forced-air cooling, but no washing or other treatment. Copies of the PRAs and risk management document may be obtained from the person listed under FOR FURTHER INFORMATION CONTACT or viewed on the Regulations.gov Web site (see ADDRESSES above for instruction for accessing Regulations.gov ). The PRA prepared in response to South Africa's request, titled “Qualitative Pathway-Initiated Risk Assessment of the Importation of Blueberry Fruits ( Vaccinium species) from the Republic of South Africa into the United States” (April 2007), evaluates the risks associated with the importation of fresh blueberries into the continental United States from South Africa. The PRA and supporting documents identified one pest of quarantine significance, the Mediterranean fruit fly or Medfly ( Ceratitis capitata ), present in South Africa that could be introduced into the United States via fresh blueberries. APHIS has determined that measures beyond standard port of entry inspection are required to mitigate the risks posed by this plant pest. Therefore, we propose to require that the blueberries be subjected to cold treatment in accordance with schedule T107-a, which is described in § 305.16 of the phytosanitary treatments regulations in 7 CFR part 305. Treatment schedule Temperature (°F) Exposure period (days) T107-a 34 or below 14 35 or below 16 36 or below 18 This cold treatment schedule has been proven effective in treating the Medfly on imported fruit from South Africa. The PRA prepared in response to Uruguay's request, titled “Importation of fresh highbush and rabbit-eye blueberry ( Vaccinium corymbosum L & V. Virgatum Aiton) fruit into the Continental United States from Uruguay” (April 2007), evaluates the risks associated with the importation of fresh blueberries into the continental United States from Uruguay. The PRA and supporting documents identified two pests of quarantine significance, the Medfly and the South American fruit fly ( Anastrepha fraterculus ), that were selected for further analysis and determined to potentially present a risk of introduction into the United States via blueberries from Uruguay. APHIS has determined that measures beyond standard port of entry inspection are required to mitigate the risks posed by these plant pests. Therefore, we propose to require that the blueberries be subjected to cold treatment in accordance with schedule T107-a-1, which is described in § 305.16 of the phytosanitary treatments regulations in 7 CFR part 305. Treatment schedule Temperature (°F) Exposure period (days) T107-a-1 34 or below 15 35 or below 17 This cold treatment schedule has been proven effective in treating the Medfly, as well as several species of Anastrepha , including the South American fruit fly, on imported fruit from South America. In addition to requiring cold treatment, we would limit the importation of fresh blueberries from South Africa and Uruguay to commercial shipments only and require that each shipment of fruit from South Africa and Uruguay be accompanied by a phytosanitary certificate issued by the NPPO of the importing country. Produce grown commercially is less likely to be infested with plant pests than noncommercial shipments. Noncommercial shipments are more prone to infestations because the commodity is often ripe to overripe and is often grown with little or no pest control. Commercial shipments, as defined in § 319.56-1, are shipments of fruits and vegetables that an inspector identifies as having been produced for sale and distribution in mass markets. Identification of a particular shipment as commercial is based on a variety of indicators, including, but not limited to, the quantity of produce, the type of packaging, identification of a grower or packinghouse on the packaging, and documents consigning the shipment to a wholesaler or retailer. The proposed conditions described above for the importation of fresh blueberries from South Africa and Uruguay into the continental United States would be added to the fruits and vegetables regulations as a new § 319.56-2vv. In addition, we would also amend the table in § 305.2(h)(2)(i) of the phytosanitary treatments regulations to add entries for fresh blueberries from South Africa and Uruguay and to designate cold treatment schedule T107-a for South African blueberries and T107-a-1 for Uruguayan blueberries as approved treatments for the specific pests named in this document. Argentina The regulations currently allow blueberries from Argentina to be imported into the United States only after fumigation with methyl bromide using treatment schedule T101-i-1-1. This is an approved treatment schedule for mitigating the risks associated with the Medfly, which was found to be present in part of Argentina. In addition to the Medfly, the South American fruit fly is also present in Argentina. Previously, we did not have specific information that blueberry is a host of the South American fruit fly, but research has since demonstrated that blueberry is a host of both the Medfly and the South American fruit fly. Because treatment schedule T101-i-1-1 has been proven effective in treating the South American fruit fly as well as the Medfly, the risks associated with South American fruit fly have already been addressed through that treatment schedule. To reflect the identification of the South American fruit fly as a pest of blueberries from Argentina, we would amend the entry for blueberries from Argentina in § 319.56-2x to include the South American fruit fly with the Medfly as a pest of blueberry fruit that requires mitigation unless the fruit is grown in a fruit fly-free area. In May 2006, the NPPO of Argentina requested that APHIS allow the use of cold treatment as an alternative treatment to meet the United States entry requirements for blueberries from Argentina. After receiving this request, we reviewed the data supporting the request and determined that there is no statistical difference in the cold treatment susceptibility of the Medfly and the South American fruit fly when infesting various citrus cultivars. Based on that evaluation, we determined that cold treatment would also mitigate the pest risk associated with these fruit fly species in blueberries and would serve as an effective substitute for the methyl bromide treatment T101-i-1-1. Therefore, we are proposing to amend § 305.2(h) to provide for the use of cold treatment on blueberries from Argentina. This would be a more environmentally favorable option to the currently required methyl bromide fumigation treatment. 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 allow the importation into the continental United States of fresh blueberries from South Africa and Uruguay under certain conditions. As a condition of entry, the blueberries would have to undergo cold treatment and would have to be accompanied by a phytosanitary certificate issued by the NPPO of the importing country. This action would allow for the importation of blueberries from South Africa and Uruguay into the continental United States while continuing to provide protection against the introduction of quarantine pests. In addition, we are proposing to allow the use of cold treatment for blueberries imported into the United States from Argentina. This action would provide an alternative to the currently approved methyl bromide treatment. The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations, and small governmental jurisdictions. Section 603 of the Act requires an agency to prepare and make available for public comment an initial regulatory flexibility analysis (IRFA) describing the expected impact of a proposed rule on small entities, unless the head of the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. APHIS has prepared this IRFA in fulfillment of this requirement. We welcome public comment on expected small-entity effects of the proposed rule. The United States is the largest producer of blueberries, supplying more than half the world's production (55 percent). Canada follows with 28 percent of world supplies and Poland comes third with 10 percent of the world's blueberry fruit production. Michigan, Maine, and New Jersey are the leading States in U.S. blueberry production. Combined, these three States produce more than half of all U.S. blueberries (table 1). Nine States account for 98 percent of U.S. production. Fresh blueberries require harvesting by hand, whereas blueberries destined for processing can be machine-harvested. The cost of farm labor is considerably higher in the United States than in many other countries. Table 1.—U.S. Production and Value of Blueberries for the Fresh Market in 2005 and Farm Acreage in 2002 by Major States State 2005 (metric tons) (million dollars) 2002 number of acres number of farms Michigan 29,937.1 $83.5 17,274 590 Maine 26,988.7 39.0 293 116 New Jersey 20,411.7 55.5 7,468 240 Oregon 15,648.9 33.3 3,887 659 North Carolina 11,793.4 36.7 5,009 267 Georgia 11,793.5 31.8 4,451 408 Washington 8,890.4 19.2 2,569 289 California 4,127.7 40.6 827 97 Florida 2,358.7 32.8 1,646 343 Sum 131,950 (98%) 372.3 (98%) 43,424 (84%) 3,009 (47%) Rest of United States 3,070.9 9.1 8,578 3,419 United States total 135,021.0 381.4 52,002 6,428 Sources: USDA/NASS New England, Oregon, and Washington field offices; North American Blueberry Council; Table 33—Berries Harvested for Sale, 2002 U.S. Census of Agriculture by State, pp. 496-497, USDA/NASS; and Table D-2. Blueberries: Commercial Acreage, Production, and Value, Fruit and Tree Nuts Situation and Outlook Yearbook, October 2006, USDA/ERS. In 2005, the United States produced 135,021 metric tons of highbush blueberries destined for the fresh market, valued at $381 million. In the United States, highbush blueberries are harvested from April to early October with the majority of the blueberries picked from mid-June to mid-August. Between 1995 and 2005, total U.S. blueberry consumption increased by 47 percent, from 13 ounces to 20 ounces per person. Most of the increase has been in the fresh market with a doubling in fresh consumption, from 4.3 ounces per person in 1995 to 8.7 ounces in 2005. Table 2 shows U.S. imports and exports of fresh blueberries for the past 3 years. The United States is a net importer, and our major foreign supplier of fresh blueberries (by value) is Canada. Annual U.S. imports of fresh blueberries averaged 29,469 metric tons between 2004 and 2006. Table 2.—U.S. Imports and Exports of Fresh Blueberries, 2004-2006 Year U.S. imports U.S. exports Net imports (million dollars) 2004 $91.03 $29.40 $61.63 2005 109.82 45.60 64.22 2006 155.14 55.70 99.44 (metric tons) 2004 28,887.30 15,183.80 13,693.50 2005 26,335.70 22,588.90 3,746.80 2006 32,601.50 22,952.30 9,649.20 Source: U.S. Dept. of Commerce, Bureau of Census, as reported by Global Trade Information Services. Note: Based on the Harmonized Schedules 0810400028 and 0810400024. Argentina has supplied about 3 percent of the U.S. imports of fresh blueberries, or 880 metric tons, over the last 3 years. In 2006, Argentina reported 4,000 acres of land devoted to blueberry production, a 35 percent increase since 2003. The Uruguayan Government Statistics office indicates that Uruguay started producing blueberries in 2003, with 65 metric tons harvested that year. In the following 3 years, Uruguay produced 80, 120, and 200 metric tons, respectively. For 2007 through 2009, crop volumes of around 500, 1,200, and 2,000 metric tons are forecast. The Government of Uruguay has indicated its intention to export between 200 and 1,200 metric tons of fresh blueberries annually for the next 3 years starting in 2007, with 200 metric tons shipped annually to the continental United States (an amount that exceeds Uruguay's total exports of fresh blueberries in recent years). 1 Even if this export target were met, imports from Uruguay would represent less than 1 percent of U.S. imports of fresh blueberries in 2006. 1 Uruguay started exporting fresh blueberries in 2003, with an amount of 250 kilograms or 0.4 metric ton. The following 3 years, 2004-2006, Uruguay exported 3.8, 18.7 and 94.2 metric tons, respectively. Source: Uruguayan Government, Ines Ares (personal communication). Uruguay's main export season for fresh blueberries is between November and April. During this season, the supply of fresh blueberries by U.S. producers is limited. Fresh blueberries are generally harvested in the United States by early May through the beginning of September. U.S. domestic shipments of fresh blueberries reach their highest volume between late June and mid-August. APHIS does not have data on South African production of blueberry fruits ( Vaccinium spp.). Foreign Agricultural Service statistics indicate that South Africa exported an annual average of 75 metric tons of Vaccinium spp. between 2000 and 2004. Specifically, in 2000 the Republic of South Africa exported 3 metric tons, then in the following 4 years, 90, 83, 86, and 109 metric tons, respectively. In sum, the quantities of fresh blueberry expected to be imported into the United States from Uruguay and the Republic of South Africa are small, representing less than 1 percent of U.S. imports and less than one-tenth of 1 percent of the United States' domestic supply (production plus imports minus exports). Moreover, blueberry production in these two countries takes place during our winter months; their blueberry shipments to the United States would largely compete with blueberry imports from other countries. We do not expect the changes we are proposing would have a significant economic impact on U.S. entities. U.S. entities that could be affected by the proposed changes are domestic producers of fresh blueberries and wholesalers that import fresh blueberries. Businesses producing fresh blueberries are classified in the North American Industry Classification System (NAICS) within the category of Other Vegetable (except Potato) and Melon Farming (NAICS code 111219). The Small Business Administration's (SBA) small-entity definition for these producers is annual receipts of not more than $750,000. Firms that would import fresh blueberry fruits from Uruguay and the Republic of South Africa are defined as small entities if they have 100 or fewer employees (NAICS code 424480, Fresh Fruit and Vegetable Merchant Wholesalers). 2 2 The wholesale sector comprises two types of wholesalers: Those that sell goods on their own account and those that arrange sales and purchases for others for a commission or fee. Importers are included in both cases. In general, firms engaged in production or importation of agricultural commodities are predominantly small. We believe that most if not all of the businesses affected by the proposed rule would be small. We do not know the exact number of U.S. producers of fresh blueberries. According to the 2002 Census of Agriculture for the States where blueberries are produced, there were at least 6,428 farms growing blueberries in 52,000 acres of land (table 1). The majority of these farms (84 percent) are located in nine States. We do not know the percentage of blueberry farms that produce blueberries for the fresh market. Also, we do not know their size, but in general, such entities are predominantly small. The United States Census does not report sales receipts by farm or any other unit. The average farm size in these nine States is 15 acres, whereas the average farm size in the remainder of States that grow blueberries is 2.5 acres. We welcome information that the fresh blueberry industry or general public may provide on the number and size of entities that could be affected by the proposed rule. Executive Order 12988 This proposed rule would allow blueberries to be imported into the continental United States from South Africa and Uruguay and would provide an alternative treatment for blueberries from Argentina. If this proposed rule is adopted, State and local laws and regulations regarding blueberries imported under this rule would be preempted while the fruit is in foreign commerce. Fresh fruits are generally imported for immediate distribution and sale to the consuming public and would remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by-case basis. If this proposed rule is adopted, no retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule. Paperwork Reduction Act In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comments refer to Docket No. APHIS-2007-0061. Please send a copy of your comments to: (1) Docket No. APHIS-2006-0061, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue, SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule. APHIS is proposing to allow the importation into the continental United States of fresh blueberries from South Africa and Uruguay under certain conditions. As a condition of entry, the blueberries would have to undergo cold treatment and would have to be accompanied by a phytosanitary certificate issued by the national plant protection organization of the exporting country. This action would allow for the importation of blueberries from South Africa and Uruguay into the continental United States while continuing to provide protection against the introduction of quarantine pests. We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us: (1) Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility; (2) Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses). Estimate of burden: Public reporting burden for this collection of information is estimated to average 0.5 hours per response. Respondents: NPPOs, importers of blueberries. Estimated annual number of respondents: 30. Estimated annual number of responses per respondent: 276. Estimated annual number of responses: 8,280. Estimated total annual burden on respondents: 4,140 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477. E-Government Act Compliance The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this proposed rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477. List of Subjects 7 CFR Part 305 Irradiation, Phytosanitary treatment, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements. 7 CFR Part 319 Coffee, Cotton, Fruits, Imports, Logs, Nursery stock, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Rice, Vegetables. Accordingly, we propose to amend 7 CFR parts 305 and 319 as follows: PART 305—PHYTOSANITARY TREATMENTS 1. The authority citation for part 305 would continue to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. 2. In § 305.2, the table in paragraph (h)(2)(i) would be amended as follows: a. Under Argentina, by revising the entry for “Blueberry” to read as set forth below. b. Under South Africa, by removing the entry for “Apple, grape, pear” and adding a new entry for “Apple, blueberry, grape, pear” in its place to read as set forth below. c. In the entry for Uruguay, by adding an entry for “Blueberry” to read as set forth below. § 305.2 Approved treatments. (h) * * * (2) * * * (i) * * * Location Commodity Pest Treatment schedule * * * * * * * Argentina * * * * * * * Blueberry Anastrepha fraterculus, Ceratitis capitata CT T107-a-1 or MB T101-i-1-1. * * * * * * * South Africa Apple, blueberry, grape, pear Ceratitis capitata CT T107-a. * * * * * * * Uruguay * * * * * * * Blueberry Anastrepha fraterculus, Ceratitis capitata CT T107-a-1. * * * * * * * PART 319—FOREIGN QUARANTINE NOTICES 3. The authority citation for part 319 would continue to read as follows: Authority: 7 U.S.C. 450, 7701-7772, and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. 4. In § 319.56-2x, the table in paragraph (a) would be amended by revising, under Argentina, the entry for “Blueberry” to read as follows: § 319.56-2x Administrative instructions; conditions governing the entry of certain fruits and vegetables for which treatment is required. (a) * * * Country locality Common name Botanical name Plant part(s) * * * * * * * Argentina * * * * * * * Blueberry Vaccinium spp Fruit. (Treatment for South American fruit fly and Medfly not required if fruit is grown in a fruit fly-free area (see § 319.56-2(j)). * * * * * * * 5. A new § 319.56-2vv would be added to read as follows: § 319.56-2vv Administrative instructions: conditions governing the importation of blueberries from South Africa and Uruguay. Blueberries from South Africa ( Vaccinium spp.) and Uruguay ( Vaccinium corymbosum L. and Vaccinium virgatum Aiton) may be imported into the continental United States only under the following conditions: (a) Blueberries from South Africa must be cold treated for Ceratitis capitata in accordance with part 305 of this chapter. Blueberries from Uruguay must be cold treated for Ceratitis capitata and Anastrepha fraterculus in accordance with part 305 of this chapter. (b) Each shipment of blueberries must be accompanied by a phytosanitary certificate of inspection issued by the national plant protection organization of the importing country. (c) The blueberries may be imported in commercial shipments only. Done in Washington, DC, this 31st day of May 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-10818 Filed 6-4-07; 8:45 am] BILLING CODE 3410-34-P NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 701 Federal Credit Union Bylaws AGENCY: National Credit Union Administration (NCUA). ACTION: Proposed rule. SUMMARY: NCUA is proposing to reincorporate the Federal Credit Union (FCU) Bylaws into NCUA regulations. This change clarifies NCUA's ability to use a range of enforcement authorities, in appropriate cases, to enforce the FCU Bylaws. In addition, NCUA is adding a bylaw provision on director succession, an issue it has previously addressed in legal opinions, and is revising the introduction to the Bylaws to conform it to these changes. DATES: Comments must be received by August 6, 2007. ADDRESSES: You may submit comments by any of the following methods (Please send comments by one method only): • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. • NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs.html. Follow the instructions for submitting comments. • E-mail: Address to regcomments@ncua.gov. Include “[Your name] Comments on FCU Bylaws” in the e-mail subject line. • Fax: (703) 518-6319. Use the subject line described above for e-mail. • Mail: Address to Mary Rupp, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. • Hand Delivery/Courier: Same as mail address. Public inspection: All public comments are available on the agency's Web site at http://www.ncua.gov/RegulationsOpinionsLaws/comments as submitted, except as may not be possible for technical reasons. Public comments will not be edited to remove any identifying or contact information. Paper copies of comments may be inspected in NCUA's law library, at 1775 Duke Street, Alexandria, Virginia 22314, by appointment weekdays between 9 a.m. and 3 p.m. To make an appointment, call (703) 518-6546 or send an e-mail to OGC Mail @ncua.gov. FOR FURTHER INFORMATION CONTACT: Elizabeth Wirick, Staff Attorney, Office of General Counsel, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6540. SUPPLEMENTARY INFORMATION: A. Background The Federal Credit Union Act (the Act) requires the NCUA Board to prepare bylaws that “shall be used” by FCUs and authorizes NCUA to enforce FCU Bylaws through charter suspension and liquidation. 12 U.S.C. 1758, 1766. Until 1982, the FCU Bylaws were incorporated by reference in NCUA's regulations. NCUA's authority to enforce bylaw violations through less severe administrative remedies then was clear because such violations could be viewed as a violation of NCUA's regulations, thus enabling NCUA to bring a variety of administrative enforcement actions to effect compliance in appropriate cases. In 1982, the Bylaws were removed from the regulations as part of a general deregulatory effort. At that time, three separate sections of NCUA regulations incorporated the FCU Bylaws by reference. 12 CFR 701.2, 701.3, 701.14 (1982). Another section required NCUA approval of any bylaw amendments. 12 CFR 701.4 (1982). NCUA deleted two of the sections incorporating the Bylaws by reference, as well as the regulation requiring NCUA approval of amendments, in two final rules issued in 1982. 47 FR 23685 (June 1, 1982); 47 FR 46249 (Oct. 18, 1982). These rules were one result of a comprehensive review of agency regulations NCUA undertook in the early 1980s in an effort to eliminate redundant or outdated requirements. The goal of this process was to reduce the number and complexity of NCUA regulations and delete guidance found in other publications. 47 FR 46249 (Oct. 18, 1982). The Bylaws were only one of several items deleted from incorporation by reference in the 1982 rules cited above. One of the rules also deleted the NCUA Accounting Manual and Data Processing Guidelines from incorporation by reference. 47 FR 23685 (June 1, 1982). The other also deleted references to chartering procedures contained elsewhere in NCUA guidance. 47 FR 46249 (Oct. 18, 1982). The discussions in the proposed and final rules and at the NCUA Board meetings focus on the other provisions in the rules, with very little information about the Bylaws. Id. ; 47 FR 23750 (June 1, 1982); 47 FR 23686 (June 1, 1982); 46 FR 48940 (Oct. 5, 1981); Recordings of NCUA Board Meetings Sept. 24, 1981; May 20, 1982 and Sept. 23, 1982. The sole comment about the Bylaws available in the administrative record is in the preamble to one of the final rules, and it states: “The commenters also were in agreement with NCUA's deregulation of charter and bylaw provisions and condensation of chartering procedures.” 47 FR at 46249. The Board's 1982 actions resulted in the retention of one section incorporating the Bylaws by reference, § 701.2, which was not deleted until 1999. 12 CFR 701.2 (1982-1999). Although one of the 1982 rules deleted other publications incorporated by reference in § 701.2, while leaving the reference to the Bylaws intact, the proposed and final rules do not explain this action. 47 FR 23685 (June 1, 1982); 46 FR 48490 (Sept. 24, 1981). NCUA deleted § 701.2 as a technical amendment in 1999. 64 FR 57363 (Oct. 25, 1999). After reviewing the entire record, retention of the incorporation of the bylaws in § 701.2 appears to have been an oversight. When the Bylaws were deregulated in 1982, the rule changes did not address the issue of whether the agency would enforce the Bylaws or intervene in disputes concerning the Bylaws. NCUA's policy not to become involved in bylaw disputes unless the bylaw violation threatens the safety and soundness of the credit union or violates a provision of the FCU Act or NCUA regulations evolved in various issuances and procedures after 1982. Numerous legal opinion letters state this policy, as well as NCUA's position that the Bylaws represented a contract between a credit union and its members. NCUA's view was that state corporate law, if consistent with the Act and NCUA regulations, determined disputes regarding the enforcement of bylaw provisions. As a result of the deregulation of the bylaws, NCUA's ability to enforce the Bylaws, absent a safety and soundness reason, has become problematic. NCUA's post-deregulatory policy has sometimes had the effect of requiring FCU members to resort to state court action in order to force their credit union to abide by its bylaws. While this approach worked fairly well for the most part over the years, recently, NCUA has learned of cases where members have been unable to use the judicial system to enforce rights granted by the Bylaws. While NCUA continues to maintain members can enforce the bylaws as a contract, the Board recognizes that, in certain circumstances, this remedy may not be practical or provide adequate relief due to circumstances such as timing and cost. As the administrative record demonstrates, the Board did not foresee the current challenges members can face in seeking to enforce the bylaws when it deregulated the Bylaws in 1982 in an effort to eliminate redundancy and maximize flexibility for FCUs. At this time, the Board finds reincorporating the bylaws into NCUA's regulations is an appropriate step. Reincorporation is the least burdensome way to ensure FCUs and their members are aware of NCUA's authority to issue and enforce the Bylaws under the Act. Congress has provided the Board explicit authority in the Act to suspend or revoke the charter of any FCU, or place the FCU into involuntary liquidation, for a violation of any provision of its bylaws. 12 U.S.C. 1766(b)(1). A charter suspension or liquidation, however, is a very extreme remedy and is unlikely to be an appropriate remedy for any bylaw violation. The resultant loss of credit union service would likely result in far more harm to members than the FCU's failure to follow its bylaws. NCUA believes the better approach is to reincorporate the Bylaws into NCUA's regulations. The Board believes credit unions and their members should be able to resolve bylaw disputes without NCUA taking administrative action. In those rare cases where disputes cannot be resolved, NCUA will have clear authority to use a range of administrative actions. This will result in administrative remedies far less harsh than a charter suspension or liquidation to effect a credit union's compliance with its bylaws. Reincorporating the Bylaws into NCUA's regulations imposes no new regulatory burden, as all FCUs are already required to have NCUA-approved bylaws. NCUA publishes form bylaw language and all FCUs have adopted some version of the form language. The latest version of the Bylaws allows FCUs flexibility wherever possible by providing check-off or fill-in-the-blank options that can be adopted without further NCUA action. NCUA's regional directors must approve all other bylaw amendments. NCUA will approve all proposed bylaw amendments that do not conflict with the Act or NCUA regulation and guidance, present a potential safety and soundness threat, or restrict members' rights. NCUA does not maintain copies of each FCU's bylaws and bylaw amendments. In considering reincorporation, the Board again thought about whether it should continue to prescribe model bylaw language or whether it should, as suggested by several commenters during the 2006 Bylaw revision process, prescribe only general categories and allow FCUs to draft their own bylaws. The Board's concerns with this approach remain the potential for confusion and the adoption of illegal bylaw provisions. While some previous commenters suggested a categories-style rule, others, including credit union employees and credit union legal representatives, have indicated that having form Bylaws is an aid and is not overly burdensome. Credit union staff members and boards of directors know that the Bylaws are a condensation of some requirements in the Act, NCUA regulations, and NCUA guidance. For most, the option to draft bylaws completely on their own is unattractive because of the amount of research required to ensure inclusion of all necessary provisions. Also, presumably, NCUA would have to adopt some oversight mechanism to prevent adoption of bylaw provisions that are inconsistent with statutory and regulatory requirements or present safety and soundness concerns. Because NCUA does not now maintain copies of individual FCU bylaws or review bylaws in examinations as a matter of course, having a category-type regulation would likely result in more regulation, not less. The Board also considered modeling its bylaw regulation on the approach used by the Office of Thrift Supervision (OTS). The OTS has detailed regulations listing required bylaw provisions and also provides model bylaw language separately. 12 CFR 544.5, 552.5; OTS Applications Handbook, Forms 1577, 1508. The model language is mostly a restatement of the regulation. Id . Thrifts are not required to adopt the model language exactly, and, like FCUs, may also adopt certain optional provisions. All amendments, including the model option provisions, must be filed with OTS. 12 CFR 544.5(d), 552.6(c). The result of the OTS approach is similar to NCUA's. Both federal thrifts and FCUs have form bylaw language. Although the regulation permits thrifts to adopt their own language rather than the model, drafting bylaws that comply with the requirements of the regulation results in bylaws nearly indistinguishable from the form bylaws. Both federal thrifts and FCUs are allowed to select certain options without further agency action, but thrifts must file all amendments with OTS. After considering the OTS approach, the Board continues to believe that incorporating the Bylaws by reference into NCUA's regulations is the most expeditious and least burdensome approach. The proposed rule will give NCUA authority to enforce bylaw violations in certain, limited cases through administrative tools in the Act. Incorporating the FCU Bylaws into NCUA's regulations will not mean NCUA will become involved as a matter of course in bylaw disputes. The Board believes credit union officials and members should be able to work together to resolve the vast majority of bylaw and internal governance disputes. This was true before 1982 when the Bylaws were incorporated by reference in NCUA's regulations and, as was the case then, NCUA has no intention of using agency resources to enforce every bylaw violation. Furthermore, under the risk-based examination system in use for FCUs, examiners do not currently, nor will they under this proposed rule, inquire into an FCU's bylaws unless the FCU's management raises the issue. A credit union's management, however, should not be able to ignore the Bylaws unilaterally. Members have a reasonable expectation that their credit union will be operated in accordance with its approved bylaws. NCUA already has the authority to exercise its administrative enforcement authority when a credit union violates the Act or NCUA regulations or a threat to the safety and soundness of the institution exists. NCUA also believes it should have the ability to institute an enforcement action when a bylaw violation poses a threat to fundamental, material credit union member rights. These rights are those that go to the very heart of the cooperative principles that serve as the cornerstone of the credit union system. Specifically, they include the right to: • Maintain a share account; • Maintain credit union membership; • Have access to credit union facilities; • Participate in the director election process; • Attend annual and special meetings; and • Petition for removal of directors and committee members. It continues to be NCUA's intent that credit unions and their members will make every effort to resolve bylaw disputes without NCUA intervention. If a bylaw dispute cannot be resolved, however, credit union officials or members should contact the regional office with jurisdiction for the FCU. Regional offices have substantial experience in reviewing and working with credit unions on bylaw disputes, as well as proposed bylaw amendments. The regional offices have historically assisted credit union officials and members in resolving bylaw and internal governance disputes. However, if a matter involves fundamental, material credit union member rights, NCUA will have clear discretion to take administrative action as warranted. The Board believes this is preferable to requiring credit unions and their members to resort to the state courts, with the attendant expense, time delays and uncertainty regarding bylaw enforceability. B. Specific Changes to the FCU Bylaws NCUA issued an updated and revised version of the FCU Bylaws in 2006. 71 FR 24551 (April 26, 2006). Because the revised Bylaws were issued so recently, NCUA believes another major review is unnecessary at this time. The Board believes, however, this rulemaking presents an appropriate opportunity to address one particular circumstance previously only addressed in legal opinions, namely, the responsibility of the Supervisory Committee to assume the responsibilities of the board of directors temporarily if, for any reason, an entire board of directors is simultaneously removed or unable to serve. See OGC Opinion 06-0446 (April 27, 2006). This proposed rule adds new provisions to the Bylaws clarifying responsibilities and procedures if, for any reason, including removal or other inability to serve, an FCU has no remaining directors. This proposed rule also revises the introduction to the Bylaws to reflect the reincorporation of the Bylaws in the regulations. The proposal adds a new Section to Article IX to clarify the Supervisory Committee's responsibilities if an FCU has no remaining directors. If an entire board of directors resigns, is removed simultaneously, or for whatever circumstance is unable to serve, the Supervisory Committee has the responsibility to act as a temporary board of directors. As has been previously stated in NCUA legal opinions, the FCU Bylaws will now provide that, as the temporary board of directors, the Supervisory Committee must either schedule a special meeting to elect an interim board, or, if the credit union's next annual meeting of members will occur within 45 days after the FCU loses its directors, must serve as the temporary board until the next annual meeting. NCUA believes this provision belongs in Article IX, entitled “Supervisory Committee,” because it addresses responsibilities of the Supervisory Committee when an FCU has no remaining directors. Several other bylaws refer to procedures by which remaining directors can replace directors who have been removed or have resigned, but because this bylaw addresses the situation where no directors remain and the responsibility falls upon the Supervisory Committee, it is placed in Article IX. The proposal also cross references this new language in Article XVI, Section 3, addressing removal of directors by members, and Article VI, Section 4, addressing board of director vacancies. These new provisions do not automatically become part of any FCU's existing bylaws and FCUs are not required to adopt them. In the event a credit union does not adopt the new bylaw provisions, NCUA will continue to follow the guidance expressed in its prior legal opinion, cited above. The NCUA Board has also considered whether to allow more flexibility in the Bylaws regarding the number of members necessary to request a special meeting as well as the timing for when the meeting is held. NCUA's position is that any necessary changes in this area for a particular credit union should be handled through the bylaw amendment process explained in the introduction to the Bylaws. NCUA is also adopting a minor procedural change in an effort to streamline the bylaw amendment process even further. NCUA will continue to post all bylaw amendment opinion letters on its Web site. Bylaw opinion letters issued since the last major revision of the bylaws in April 2006 will now include the language for any amendment approved, or a link to that language. Credit unions seeking to adopt a bylaw amendment using identical language to a previously approved amendment must still file the proposed amendment with their Regional Office, but will receive notice of the Region's action on their request within 15 business days. Review of all bylaw amendment requests ensures that an amendment approved for one FCU is appropriate for another FCU, but NCUA believes this review can be accomplished more quickly when the requested amendment is identical to one approved for another FCU. Finally, the proposal includes a revised introduction to reflect incorporation of the Bylaws in NCUA regulations. The introduction retains language explaining how to adopt and amend the bylaws as well as additional guidance. For bylaw amendments, the introduction now states that FCUs seeking a bylaw amendment identical to a previously approved bylaw amendment can expect an answer from their Regional Office within 15 business days of the receipt of the request. C. Request for Comments NCUA seeks comment on the proposal to incorporate the Bylaws in NCUA regulations. NCUA specifically requests comments on the standards, discussed above, for when it will intervene in bylaw disputes, including any other criteria NCUA should consider in determining when it will institute an enforcement action regarding the bylaws. Also, NCUA specifically requests comment on the “fundamental, material member rights” discussed above and whether any rights should be added to or deleted from this list. Finally, NCUA seeks comments on the addition of the director succession bylaw and the revised introduction. Regulatory Procedures Regulatory Flexibility Act The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small credit unions, defined as those under ten million dollars in assets. This proposed rule incorporates the Bylaws into NCUA's regulations without imposing any regulatory burden, since the FCU Act requires FCUs to adopt NCUA-approved bylaws. The proposed rule will not have a significant economic impact on a substantial number of small credit unions, and, therefore, a regulatory flexibility analysis is not required. Paperwork Reduction Act NCUA has determined that the proposed rule would not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget. 44 U.S.C. 3501 et seq. ; 5 CFR part 1320. Executive Order 13132 Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The proposed rule would not have substantial direct effects on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this proposed rule does not constitute a policy that has federalism implications for purposes of the executive order. The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families The NCUA has determined that the proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998). List of Subjects in 12 CFR Part 701 Federal credit union bylaws. By the National Credit Union Administration Board on May 24, 2007. Mary F. Rupp, Secretary of the Board. Accordingly, NCUA proposes to amend 12 CFR part 701 by adding § 701.2 to read as follows: PART 701—ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS 1. The authority citation for part 701 is amended to read as follows: Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 1782, 1784, 1786, 1787, 1789. Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601-3610. Section 701.35 is also authorized by 42 U.S.C. 4311-4312. 2. Part 701 is amended by adding § 701.2 to read as follows: § 701.2 Federal Credit Union Bylaws. (a) Federal credit unions must operate in accordance with their approved bylaws. The Federal Credit Union Bylaws and any amendments approved for specific Federal Credit Unions are hereby incorporated by reference pursuant to 5 U.S.C. 552(a)(1) and accompanying regulations. Federal credit unions may adopt amendments to their bylaws as provided in the bylaws, with the approval of the Board. (b) Copies of the Federal Credit Union Bylaws may be obtained at http://www.ncua.gov or by request addressed to National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314. (c) The National Credit Union Administration may issue revisions or amendments of the Federal Credit Union Bylaws from time to time. An historic file of amendments or revisions is maintained and made available for inspection at the National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314. (d) Copies of the Federal Credit Union Bylaws are on file with the Director, Office of the Federal Register, National Archives and Records Service, General Services Administration, Washington, DC 20408. NCUA will file the text of any changes in the Federal Credit Union Bylaws with the Director, Office of the Federal Register, and publish notice of changes in the Federal Register . Note: The text of the Federal Credit Union Bylaws does not appear in the Code of Federal Regulations. 3. The Federal Credit Union Bylaws are revised as follows: (a) Add the following paragraph at the end of Section 3 of Article IX: If all director positions become vacant simultaneously, the supervisory committee immediately becomes the temporary board of directors. The temporary board must call and hold a special meeting to elect an interim board at least 7 but no more than 14 days after all director positions become vacant. Candidates for the interim board at the special meeting may be nominated by petition or from the floor. The interim elected board serves until the next annual meeting of members. If the next annual meeting has been scheduled and will occur within 45 days after all director positions become vacant, the temporary board may not call a special meeting to elect an interim board and must serve until the annual meeting. If the next annual meeting has not been scheduled, the temporary board may not call a special meeting to elect interim directors if the month and day of the previous year's meeting plus 7 days falls within 45 days after all director positions become vacant. In this case, the temporary board will call and hold the next annual meeting within 7 days before or after the month and day of the previous annual meeting and the temporary board must serve until the annual meeting. If an interim board is elected and the annual meeting has not been scheduled, the interim board must schedule the annual meeting within 7 days before or after the month and day of the previous annual meeting. The supervisory committee acting as the temporary board may not act on policy matters. An interim board elected under this section has the same powers as a board elected under the credit union's regular election procedures and may act on policy matters. (b) Add the following sentence at the end of Section 3 of Article XVI: If member votes at a special meeting result in the removal of all directors, the supervisory committee immediately becomes the temporary board of directors and must follow the procedures in Article IX, Section 3. (c) Insert the following sentence after the first sentence of Section 4 of Article VI: If all director positions become vacant simultaneously, the supervisory committee immediately becomes the temporary board of directors and must follow the procedures in Article IX, Section 3. (d) Replace the sixth paragraph of the introduction with the following: Federal credit unions considering an amendment may find it useful to review the bylaws section of the agency Web site, which includes Office of General Counsel opinions about proposed bylaw amendments. Opinions issued after April 2006 will include the language of approved amendments. Even if an amendment has been previously approved, the credit union must submit a proposed amendment to NCUA for review under the procedure listed above to ensure the amendment is identical. Credit unions requesting previously approved amendments will receive notice of the regional office's decision within 15 business days of the receipt of the request. (e) Replace the last paragraph of the introduction with the following: NCUA has discretion to take administrative actions when a credit union is not in compliance with its bylaws. If a potential violation is identified, NCUA will carefully consider all of the facts and circumstances in deciding whether to take enforcement action. NCUA will not take action against every minor or technical violation, but emphasizes that it retains discretion to enforce the bylaws in appropriate cases, which may include, but are not limited to, safety and soundness concerns or threats to fundamental, material credit union member rights. (f) Replace the first paragraph of the introduction with the following: Effective date: After consideration of public comment, the National Credit Union Administration (NCUA) Board adopted these Bylaws and incorporated them by reference in section 701.2 of NCUA's regulations on [date of final]. Unless a federal credit union has adopted bylaws before [date of final] it must adopt these revised Bylaws. [FR Doc. E7-10389 Filed 6-4-07; 8:45 am] BILLING CODE 7535-01-P NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 701 Chartering and Field of Membership for Federal Credit Unions AGENCY: National Credit Union Administration (NCUA). ACTION: Proposed rule. SUMMARY: The NCUA Board is proposing amendments to its chartering and field of membership manual to update community chartering policies in response to NCUA's experience with reviewing applications of credit unions seeking community charters. These changes include clarifying the documentation requirements for a local community and adding a public comment procedure for certain types of multiple political jurisdiction community charter applications. DATES: Comments must be postmarked or received by August 6, 2007. ADDRESSES: You may submit comments by any of the following methods (Please send comments by one method only): • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. • NCUA Web Site: http://www.ncua.gov/RegulationsOpinionsLaws/proposedregs/proposedregs.html. Follow the instructions for submitting comments. • E-mail: Address to regcomments@ncua.gov. Include “[Your name] Comments on Proposed Rule IRPS 07-1,” in the e-mail subject line. • Fax: (703) 518-6319. Use the subject line described above for e-mail. • Mail: Address to Mary F. Rupp, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. • Hand Delivery/Courier: Same as mail address. FOR FURTHER INFORMATION CONTACT: Michael J. McKenna, Deputy General Counsel; John K. Ianno, Senior Trial Attorney; Frank Kressman, Staff Attorney, Office of General Counsel, or Robert Leonard, Program Officer, Office of Examination and Insurance, 1775 Duke Street, Alexandria, Virginia 22314 or telephone (703) 518-6540 or (703) 518-6396. SUPPLEMENTARY INFORMATION: A. History NCUA's chartering and field of membership policy is set out in NCUA's Chartering and Field of Membership Manual (Chartering Manual), Interpretive Ruling and Policy Statement (IRPS) 03-1. 68 FR 18333 (Apr. 15, 2003). The policy is set forth in IRPS 03-1 and implements credit union field of membership law under the Federal Credit Union Act. In 2006, NCUA issued amendments to the Chartering Manual chapter on underserved areas. NCUA IRPS 06-1, 71 FR 36667 (Jun. 28, 2006). The Board issued its last comprehensive rulemaking regarding its chartering policy in the spring of 2003. 68 FR 18333 (Apr. 15, 2003). Over the past four years, NCUA's Field of Membership Taskforce has monitored and reviewed the implementation of IRPS 03-1 and its amendments in an effort to improve consistency and provide a basis for further clarifications and modifications, if necessary. In response to this continued oversight, and requests from the NCUA Board, staff has identified issues that need clarification and are the basis for this proposal. B. Proposed Chartering Manual Changes Chapter 2 Field of Membership Requirements for Community Credit Unions: Section V—Community Charter Requirements. Background In 1998 Congress passed the Credit Union Membership Access Act (“CUMAA”) and reiterated its longstanding support for credit unions, noting that they “have the specif[ic] mission of meeting the credit and savings needs of consumers, especially persons of modest means.” Public Law 105-219, section 2, 112 Stat. 913 (August 7, 1998). The Federal Credit Union Act (“FCUA”) grants the NCUA Board broad general rulemaking authority over federal credit unions. 12 U.S.C. 1766(a). In passing CUMAA Congress amended the FCUA and specifically delegated to the Board the authority to define by regulation the meaning of a “well-defined local community” for federal credit union community charters. 12 U.S.C. 1759(g). In developing a working regulatory definition of a local community the Board has been mindful of the statutory language as well as its important responsibility to ensure that it charters safe and sound credit unions that can provide a broad range of financial services to as many people in the community as possible. Since 2000 there has been significant growth in the number of credit unions with community charters. The majority of these have come from conversions of credit unions with single and multiple common bond fields of membership. In 2000 approximately 8.6% of federal credit union charters were community charters. By the end of 2006 approximately 22.5% of federal charters were community charters. The proportion of federal credit union members that belong to federal community charters increased significantly by the end of 2006 to 32.6%, surpassed only by the proportion of members in multiple common bond credit unions which at the end of 2006 was 52.3%. The increasing number of federal community charters has resulted in an increasing amount of assets concentrated in federal community charters. At the end of 2006 approximately 29.5% of all federal credit union assets were in community charters. As time passes and the membership profiles of these credit unions change from associational or occupational based to community based fields of membership, community charters are likely to enhance the delivery of financial services to individuals at all income levels throughout the communities they serve. Community charters are playing an increasingly important role in helping credit unions fulfill the longstanding mission envisioned by Congress in passing the FCUA and restated in 1998 with the passage of CUMAA. Given their increasing significance it is critical that NCUA apply its expertise to approve community charter applications for local communities that are conducive to that mission, that are sized and structured in a way that assures the credit union's financial stability and long term viability, and where the applicant's proposal demonstrates the ability to offer credit union service to as many people as possible. Today community charters are collectively in sound financial condition. As of March 2007, over eighty percent of federal community charters have CAMEL composite ratings of one or two. Federal community charters also generally report strong levels of net worth. As of December 31, 2006, federal community charters had an aggregate net worth ratio of 11.48%. The Board continues to recognize two important characteristics in a local community charter. First, there must be some geographic certainty to the community boundaries, e.g., they must be well-defined; and next, there should be sufficient social and economic activity among enough community members to assure that a viable community exists. Historically, we have expressed this latter requirement as “interaction and/or shared common interests.” Chartering Manual, Chapter 2, V.A.1. This approach is consistent with the longstanding mission of credit unions reiterated by Congress in the findings section of CUMAA, when it noted that, “to promote thrift and credit extension, a meaningful affinity and bond among members manifested by a commonality of routine interaction, shared and related work experiences, interests, or activities * * * is essential to the fulfillment of the public mission of credit unions.” Public Law 105-219, section 2, 112 Stat. 913 (August 7, 1998). The Board has gained broad experience in reviewing what constitutes a well-defined local community through the analysis and approval of numerous community charter conversions and expansions. In this process the Board has exercised its regulatory judgment in determining whether, in a particular case, a well-defined local community exists. This involves the application of its expertise to the question of whether a proposed area has a sufficient level of interaction and/or shared common interests to be considered a well-defined local community in which a credit union can flourish and successfully provide thrift, credit, and other financial services to members of the community. The Board's experience also indicates that there is ample uncertainty among applicants regarding two important issues, particularly in connection with applications involving large multi-jurisdictional areas. First, how does an applicant best demonstrate interaction and/or shared common interests? Second, what amount of evidence is required in a particular case? In an attempt to address these concerns the Board is proposing to modify the definition of what constitutes a well-defined local community to utilize objective measurable standards when appropriate, as well as to revise some of the documentation requirements for other types of local community charters. These proposed changes should make it easier for an applicant to determine and demonstrate whether a proposed area is a well-defined local community while at the same time maintaining the use of many of the most significant indicia of interaction and/or shared interests. The Board believes that this proposal will result in more objective application of the standards, less difficulty for applicants, and more efficient use of agency resources. The Board looks forward to public comments on all aspects of these proposed changes. 1. Presumptive Local Communities a. Single Political Jurisdiction The Federal Credit Union Act provides that a “community credit union” consists of “persons or organizations within a well-defined local community, neighborhood, or rural district.” 12 U.S.C. 1759(b)(3). The Act expressly requires the Board to apply its regulatory expertise and define what constitutes a well-defined local community. 12 U.S.C. 1759(g). It has done so in the Chartering Manual, Chapter 2, Section V, Community Charter Requirements. In 2003, the Board, after issuing notice and seeking comments, issued IRPS 03-1 that stated any county, city, or smaller political jurisdiction, regardless of population size, is by definition a local community. 68 FR 18334, 18337 (Apr. 15, 2003). Under this definition, no documentation demonstrating that the political jurisdiction is a well-defined local community is required. After four years of experience, the Board has reviewed this definition of well-defined local community and still finds it compelling. The Board finds that a single governmental unit below the state level is well-defined and local, consistent with the governmental system in the United States consisting of a local, state, and federal government structure. A single political jurisdiction also has strong indicia of a community, including common interests and interaction among residents. Local governments by their nature generally must provide residents with common services and facilities, such as educational, police, fire, emergency, water, waste, and medical services. Further, a single political jurisdiction frequently has other indicia of a well-defined local community identified in the Chartering Manual as acceptable examples of documentation, such as a major trade area, employment patterns, local organizations and/or a local newspaper. Such examples of commonalities are indicia that single political jurisdictions are well-defined local communities where residents have common interests and/or interact. b. Statistical Areas The Board's experience has been that well-defined local communities can come in various population and geographic sizes. While the statutory language ‘local community’ does imply some limit, Congress has directed NCUA to establish a regulatory definition consistent with the mission of credit unions. While single political jurisdictions below the state level meet the definition of a well-defined local community, nothing precludes a larger area comprised of multiple political jurisdictions from also meeting the regulatory definition. There is no statutory requirement or economic rationale that compels the Board to charter only the smallest well-defined local community in a particular area. The Board's experience has been that applicants have the most difficulty in preparing applications involving larger areas with multiple political jurisdictions. This is because, as the population and area increase and multiple jurisdictions are involved, there is often conflicting evidence both for and against interaction and/or shared common interests. This often causes some confusion to the applicant about what evidence is required and what criteria are considered to be most significant under such circumstances. The current chartering manual provides examples of the types of information an applicant can provide that would normally evidence interaction and/or shared common interests. These include but are not limited to: (1) Defined political jurisdictions; (2) major trade areas; (3) shared common facilities; (4) organizations within the community area; and (5) newspapers or other periodicals about the area. These examples are helpful but the Board's experience is that very often in situations involving multiple jurisdictions, where it has determined that a well-defined local community exists, interaction or common interests are evidenced by a major trade area that is an economic hub, usually a dominant city, county or equivalent, containing a significant portion of the area's employment and population. This central core often acts as a nucleus drawing a sufficiently large critical mass of area residents into the core area for employment and other social activities such as entertainment, shopping, and educational pursuits. By providing jobs to residents from outside the dominant core area it also provides income that then generates further interaction both in the hub and in outlying areas as those individuals spend their earnings for a wide variety of purposes in outlying counties where they live. This commonality through interaction and/or shared common interests in connection with an economic hub is conducive to a credit union's success and supports a finding that such an area is a local community. The Board views evidence that an area is anchored by a dominant trade area or economic hub as a strong indication that there is sufficient interaction and/or common interests to support a finding of a local community capable of sustaining a credit union. This type of geographic model greatly increases the likelihood that the residents of the community manifest a “commonality of routine interaction, shared and related work experiences, interests, or activities * * ” that are essential to support a strong healthy credit union capable of providing financial services to members throughout the area. Public Law 105-219, section 2(3), 112 Stat. 913 (August 7, 1998). The Office of Management and Budget (“OMB”) publishes statistics that identify geographic areas that exhibit these important criteria. The Board is familiar with and has utilized these statistics. In the past four years the agency has approved in excess of 50 community charters involving Metropolitan Statistical Areas, usually involving a community based around a dominant core trade area. The Board believes that when statistics can demonstrate the existence of such relevant characteristics it is appropriate to presume that sufficient interaction and/or common interests exist to support a viable community based credit union. In such situations the area should be entitled to a presumption that it meets the regulatory definition of a local community. Certain areas do not have one dominant economic hub. Other areas may contain two or more dominant hubs. These situations diminish the persuasiveness of the evidence and make it inappropriate to engage in the presumption. In those instances the Board proposes to seek public comment and require additional evidence in order to assure that its critical analysis considers all relevant evidence. On December 27, 2000, OMB published Standards for Defining Metropolitan and Micropolitan Statistical Areas. 65 FR 82228. The following definitions established by OMB are relevant here: Core Based Statistical Area (“CBSA”) —“A statistical geographic entity consisting of the county or counties associated with at least one core (urbanized area or urban cluster) of at least 10,000 population, plus adjacent counties having a high degree of social and economic integration with the core as measured through commuting ties with the counties containing the core. Metropolitan and Micropolitan Statistical Areas are the two categories of Core Based Statistical Areas.” 65 FR 82238 (Dec. 27, 2000). Metropolitan Division —“A county or group of counties within a Core Based Statistical Area that contains a core with a population of at least 2.5 million.” 65 FR 82238 (Dec. 27, 2000). OMB recognizes that Metropolitan Divisions often function as distinct, social, economic, and cultural areas within a larger Metropolitan Statistical Area. See OMB Bulletin No. 07-01, December 18, 2006. Metropolitan Statistical Area (“MSA”) —“A Core Based Statistical Area associated with at least one urbanized area that has a population of at least 50,000. The Metropolitan Statistical Area comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county as measured through commuting.” 65 FR 82238 (Dec. 27, 2000). Micropolitan Statistical Area (“MicroSA”) —“A Core Based Statistical Area associated with at least one urban cluster that has a population of at least 10,000, but less than 50,000. The Micropolitan Statistical Area comprises the central county or counties containing the core, plus adjacent outlying counties having a high degree of social and economic integration with the central county as measured through commuting.” 65 FR 82238 (Dec. 27, 2000). Demonstrated commuting patterns supporting a high degree of social and economic integration are a very significant factor in community chartering, particularly in situations involving large areas with multiple political jurisdictions. In a community based model significant interaction through commuting patterns into one central area or urban core strengthens the membership of a credit union and allows a community based credit union to efficiently serve the needs of the membership throughout the area. Such data demonstrates a high degree of interaction through the major life activity of working and activities associated with employment. Large numbers of residents share common interests in the various economic and social activities contained within the core economic area. Historically, commuting has been an uncomplicated method of demonstrating functional integration. NCUA agrees with OMB's conclusion that “Commuting to work is an easily understood measure that reflects the social and economic integration of geographic areas.” 65 FR 82233 (Dec. 27, 2000). The Board also finds compelling OMB's conclusion that commuting patterns within statistical areas demonstrate a high degree of social and economic integration with the central county. OMB's threshold for qualifying a county as an outlying county eligible for inclusion in either a MSA or MicroSA is a threshold of 25% inter-county commuting. OMB also considers a multiplier effect (a standard method used in economic analysis to determine the impact of new jobs on a local economy) that each commuter would have on the economy of the county in which he or she lives and notes that a multiple of two or three generally is accepted by economic development analysts for most areas. 65 FR 82233 (Dec. 27, 2000). “Applying such a measure in the case of a county with the minimum 25 percent commuting requirement means that the incomes of at least half of the workers residing in the outlying county are connected either directly (through commuting to jobs located in the central county) or indirectly (by providing services to local residents whose jobs are in the central county) to the economy of the central county or counties of the CBSA within which the county at issue qualifies for inclusion.” 65 FR 82233 (Dec. 27, 2000). The Board is proposing the establishment of a standard statistical definition of a well-defined local community. The Board believes that the application of strictly statistical rules for determining whether a CBSA should be presumed a well-defined local community has the advantage of minimizing ambiguity and making the application process less time consuming. While it finds evidence established in this manner to be compelling, the Board believes that the reasonableness of the presumption is further strengthened when additional factors establishing the dominance of the core area are present. These additional factors are also objective and easily measurable. First, as OMB has noted, Metropolitan Divisions often function as distinct social, economic, and cultural areas. In the Board's view this evidence detracts from the cohesiveness of the CBSA. Accordingly, the proposal will not permit a CBSA to meet the automatic definition of a well-defined local community when it contains a Metropolitan Division. Next, the Board acknowledges that not all areas of the country are the same and there may be a CBSA that does not contain a sufficiently dominant core area or contains several significant core areas. Such situations also dilute the cohesiveness of the CBSA. For these reasons the Board proposes to require that the CBSA contain a dominant core city, county, or equivalent that contains the majority of all jobs and 1/3 of the total population contained in the CBSA before the definition would be met. These additional requirements will assure that the core area dominates any other area within the CBSA with respect to jobs and population. Applicants can find information about an area's population and number of local jobs, based upon an analysis of where people who work in an area reside, at the Bureau of the Census' Internet site ( http://www.census.gov ). Information about the current definitions of CBSAs is available at the Office of Management and Budget's Internet site ( http://www.whitehouse.gov/omb ). Applications for part of a CBSA are acceptable provided they include the dominant core city, county, or equivalent. Accordingly, the Board proposes establishing a new statistical definition for a well-defined local community in cases involving multiple political jurisdictions when the following three requirements are met: • The area must be a recognized CBSA or part thereof without a Metropolitan Division; and • The area must contain a dominant city, county or equivalent with a majority of all jobs in the CBSA; and • The dominant city, county or equivalent must contain at least 1/3 of the CBSA's total population. 2. Federal Register Notice and Request for Public Comment Although there is no legal requirement to do so, the Board believes that in situations where the CBSA does not exhibit the standards required to meet the new statistical definition for a well-defined local community, or the area does not qualify under the single political jurisdiction definition, public notice and comment will assist it with its analysis of whether the area in question is a well-defined local community capable of supporting a community credit union while also informing the public about the process. The public notice and comments will assist the Board in its critical analysis of the evidence and provide the public with an opportunity to provide timely comments and relevant information to the NCUA on the proposed local community area the credit union is seeking to serve. Accordingly, for those community charter applications that do not meet the established definitions of a well-defined local community, the Board proposes to publish a notice in the Federal Register . The proposed rule contains a new section entitled “V.A.3 Public Notice and Comment Procedures.” The notice will solicit comments relevant to the proposed community charter, including whether it meets the well-defined local community requirements. The comments will be considered by the agency before a decision on the application is made. The Board is proposing a 30 calendar day comment period. 3. Documentation Requirements for Certain Community Charter Applicants Currently under the Chartering Manual, multiple political jurisdictions with populations of up to 500,000 and Metropolitan Statistical Areas (MSAs) with populations of up to one million may qualify as a local community based on a narrative description of the area. The narrative must describe how the area meets the standards for community interaction and/or common interests. The Board is proposing that applications for areas containing multiple political jurisdictions that do not meet the proposed statistical definition be subject to public notice and comment. In those cases applicants will also be required to supplement the narrative with supporting documentation demonstrating how the regulatory requirements of a well-defined local community have been met. This amendment would assure greater consistency in NCUA's application of chartering requirements for all community charter applicants seeking to serve multiple political jurisdictions. The proposed change would clarify NCUA's expectation and inform applicants that statements in a narrative must be substantiated through documentation. The Board seeks to expand the well-defined local community documentation section to provide more guidance to credit unions on the type of evidence that demonstrates whether the area is a well-defined local community. To accomplish this the Board is proposing to add language providing more descriptive information and examples relevant to establishing the existence of well-defined local communities in order to clarify the degree of documentation required. For example, the Board finds that population density and geographic size can be useful to consider in determining whether the area is a well-defined local community. The Board also seeks to emphasize that community charter applicants can provide NCUA with statistical data, such as on employment patterns, in addition to third-party surveys and authoritative letters from government or corporate officials. This type of documentation can be used to support interaction and/or common interests among residents. 4. Five-Year Limitation Since 2001, the Chartering Manual has exempted a community charter applicant from submitting a narrative summary or documentation supporting a request of a proposed community charter, amendment, or conversion, with the same exact geographic area as one NCUA had previously approved. The Board is proposing a five-year limitation on a community charter applicant's use of this exemption. NCUA believes that five years is an appropriate time period in which to allow applicants to rely upon the narrative and documentation in past submissions. The Board requests comment regarding whether this or another time period is appropriate. In some parts of the United States, economic growth and population change can be dramatic over time. This means that documentation supporting a proposed community for some areas may become outdated more quickly than documentation supporting other areas where indicia of community interaction and/or common interests may still be valid. With this change NCUA seeks to strike a balance between requiring an applicant to repeat the exercise of demonstrating a proposed area is a well-defined local community, when NCUA already has made that exact determination, and retaining an exemption based on a previous narrative and documentation that may no longer be accurate. The Board is also proposing adding a new heading “V.A.5—Previously Approved Communities” to describe this exemption to make this provision more reader-friendly. This limitation would not apply to applications that meet the single political jurisdiction or statistical area definition of local community. 5. Rural District Since the passage of CUMAA, despite the separate statutory language authorizing local community credit unions comprised of a rural district, NCUA has not defined that term. NCUA's experience is that rural areas often lack the normal indicia that NCUA considers in making a determination that a proposed area is a well-defined local community. Unlike the proposed statistical area definition, the Board is proposing a definition that reflects an area that may lack the traditional characteristics of interaction or shared common interests. Therefore, the proposal does not require an applicant to demonstrate interaction or shared common interests. The Board expects a rural district to be less densely populated and frequently lacking any centralized urban core or cluster. Although the proposed rural district may include contiguous counties the Board also believes such a district should have a relatively small, widely disbursed, population. Therefore, NCUA is proposing to define a rural district as an area that is not in an MSA or MicroSA and has a population density that does not exceed 100 people per square mile where the total population of the rural district does not exceed 100,000. This would exclude the majority of the United States population that lives in and around large urban areas yet, based on census data, still include the vast majority of counties in the United States having fewer than 100,000 persons. Population density also varies widely but many counties also have a density of less than 100 persons per square mile. Together these requirements would assure that an area under consideration as a rural district has both a small total population and a relatively light population density. If the Board adopts a definition it will modify the language throughout the Chartering Manual to assure conformity. Because the NCUA Board has less experience with rural districts, it seeks public comment on whether it should adopt its proposed definition, a definition used by one of the agencies discussed below, or some other definition. Comment is also requested regarding whether a rural district that consists of a non-metropolitan or rural area should be subject to different analyses or documentation requirements than metropolitan or suburban areas. The Board welcomes comments on what specific indicia may be appropriate to demonstrate the existence of a rural district consistent with the FCU Act. When developing the proposed definition for rural district, the Board considered the criteria other executive branch agencies use as a framework for defining what is rural in the United States. These agencies are the U.S. Census Bureau, the OMB, and the Economic Research Service (ERS) of the U.S. Department of Agriculture (USDA). The table that follows summarizes each agency's definition of what constitutes a rural area. Agency Definition of rural area U.S. Census Bureau The Census Bureau defines rural area by exclusion by considering areas outside urbanized areas or urban clusters rural. • The Census defines an urbanized area as an area consisting of adjacent, densely settled, census block groups and census blocks that meet minimum population density requirements. The urbanized area definition also includes adjacent densely settled census blocks that collectively have a population of at least 50,000 people. • The Census defines urban clusters as contiguous, densely settled, census block groups and census blocks that meet minimum population density requirements. This definition also includes adjacent densely settled census blocks that collectively have populations ranging from 2,500 to less than 50,000 people. • The Census Bureau relies upon the standards implemented by the OMB, as discussed below, for classifying areas as metropolitan areas. The Census Bureau considers all other areas rural. [Reference: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2002_register&docid=02-6186-filed.pdf ] OMB The OMB defines MSAs, or metropolitan areas, as central (core) counties with one or more urbanized areas, and outlying counties that are economically tied to the core counties as measured by work commuting. OMB uses the MicroSA classification to identify a non-metro county with an urban cluster of at least 10,000 persons or more. Non-core counties are neither micro nor metro. Agencies outside of OMB often designate non-metro counties as rural. [Reference: http://www.whitehouse.gov/omb/bulletins/fy2007/b07-01.pdf ] ERS of the USDA ERS of the USDA considers areas rural if the OMB has not designated any part of the area as an MSA or core county. ERS also consider some areas designated by OMB as MSAs rural based on their assessments of Census data and other agency research. ERS has developed several classifications to measure rurality within individual MSAs. ERS researchers who discuss conditions in rural America refer to non-MSA areas that include both micropolitan and non-core counties as rural areas. When the OMB classifies an area as a MicroSA, the ERS still considers these areas rural according to their definition. Rurality is a term used by the USDA ERS to explain the rural nature of an area. [Reference: http://www.ers.usda.gov/Briefing/Rurality/WhatIsRural/ ] The Census Bureau, the OMB (by virtue of no MSA designation in the area), and the ERS all provide definitions of rurality based on their analysis of 2000 Census data. 6. More Descriptive Information Related to Business Plans The Board is proposing to provide community charter applicants with more consistent guidance regarding NCUA's practices for reviewing the adequacy of business and marketing plans. Under the current Chartering Manual, a credit union converting to or expanding its community charter must provide, “a marketing plan that addresses how the community will be served.” The Board is proposing a clarification to the marketing plan requirement to provide credit unions with additional guidance. The proposal explains that the plan should include the financial products, programs, and services to be provided to the entire community. 7. Community Charter Mergers In general, where both credit unions are community charters, the continuing credit union must meet the criteria for expanding the community boundaries. A community credit union cannot merge into a single occupational/associational, or multiple common bond credit union, except in an emergency merger. However, a single occupational or associational, or multiple common bond credit union can merge into a community charter as long as the merging credit union has a service facility within the community boundaries or a majority of the merging credit union's field of membership would qualify for membership in the community charter. While a community charter may take in an occupational, associational, or multiple common bond credit union in a merger, it will remain a community charter. Groups within the merging credit union's field of membership located outside of the community boundaries may not continue to be served. The merging credit union must notify groups that will be removed from the field of membership as a result of the merger. However, the credit union may continue to serve members of record. NCUA is unaware of any particular problems in this merger context. We are soliciting comments, however, to determine if there are any concerns in this regard and, if so, what adjustments to NCUA's Chartering Manual may be required. Chapter 3 Service To Underserved Communities: Section III.A—General. The FCUA defines an underserved area as a local community, neighborhood, or rural district that is an “investment area” as defined in Section 103(16) of the Community Development Banking and Financial Institutions Act of 1994. Currently Chapter 3 of the Chartering Manual provides that for an underserved area, the well-defined local community, neighborhood, or rural district requirement is met when the area meets the definition of local community set forth in Section III.A. The Board proposes to amend the language in this Section to conform it with the proposed changes to the definition of local community by removing the definitions from Chapter 3 and instead referring the reader to Chapter 2 for the actual text of the definition. This change will avoid confusion and eliminate any need for future changes to this Section should the definitions contained in Chapter 2 change. Regulatory Procedures Regulatory Flexibility Act The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a regulation may have on a substantial number of small credit unions, primarily those under ten million dollars in assets. The proposed amendments will not have a significant economic impact on a substantial number of small credit unions and therefore, a regulatory flexibility analysis is not required. Paperwork Reduction Act In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), NCUA may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OMB control number assigned to § 701.1 is 3133-0015, and to the forms included in Appendix D is 3133-0116. NCUA has determined that the proposed amendments will not increase paperwork requirements and a paperwork reduction analysis is not required. Executive Order 13132 Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The proposed rule would not have substantial direct effects on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that the proposed rule does not constitute a policy that has federalism implications for purposes of the executive order because it only applies to federal credit unions. The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families The NCUA has determined that the proposed rules would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act of 1999, Pub. L. 105-277, 112 Stat. 2681 (1998). List of Subjects in 12 CFR Part 701 Credit, Credit unions, Reporting and recordkeeping requirements. By the National Credit Union Administration Board on May 24, 2007. Mary Rupp, Secretary of the Board. Accordingly, NCUA proposes to amend 12 CFR part 701 as follows: PART 701—ORGANIZATION AND OPERATIONS OF FEDERAL CREDIT UNION 1. The authority citation for part 701 continues to read as follows: Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1759, 1761a, 1761b, 1766, 1767, 1782, 1784, 1787, 1789. Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also authorized by 15 U.S.C. 1601, et seq., 42 U.S.C. 1981 and 3601-3610. Section 701.35 is also authorized by 12 U.S.C. 4311-4312. 2. Section 701.1 is revised to read as follows: § 701.1 Federal credit union chartering, field of membership modifications, and conversions. National Credit Union Administration policies concerning chartering, field of membership modifications, and conversions are set forth in the Chartering and Field of Membership Policy, Interpretive Ruling and Policy Statement (IRPS) 03-1, as amended by IRPS 06-1 and IRPS 07-1. Copies may be obtained by contacting NCUA at the address found in Section 792.2(g)(1) of this chapter. (Approved by the Office of Management and Budget under control numbers 3133-0015 and 3133-0116) Note: The text of the Interpretive Ruling and Policy Statement (IRPS 07-1) does not appear in the Code of Federal Regulations. 3. Section V of Chapter 2 of IRPS 03-1, as amended by IRPS 06-1 and IRPS 07-1, is revised to read as follows: Chapter 2 V.A.1—General Community charters must be based on a single, geographically well-defined local community, neighborhood, or rural district. In a well-defined local community or neighborhood, individuals must have common interests and/or interact. More than one credit union may serve the same community. NCUA recognizes four types of affinity on which a community charter can be based—persons who live in, worship in, attend school in, or work in the community. Businesses and other legal entities within the community boundaries may also qualify for membership. NCUA has established the following requirements for community charters: • The geographic area's boundaries must be clearly defined; • The area is a “well-defined local, community, neighborhood, or rural district;” and • Individuals must have common interests and/or interact. V.A.2—Definition of Well-Defined Local Community In addition to the documentation requirements in Chapter 1 to charter a credit union, a community credit union applicant must provide additional documentation addressing the proposed area to be served and community service policies. An applicant has the burden of demonstrating to NCUA that the proposed community area meets the statutory requirements of being: (1) Well-defined, and (2) a local community, neighborhood, or rural district. • “Well-defined” means the proposed area has specific geographic boundaries. Geographic boundaries may include a city, township, single, multiple, or portions of counties (or their political equivalent), school districts, or a clearly identifiable neighborhood. Although congressional districts and state boundaries are well-defined areas, they do not meet the requirement that the proposed area be a local community. The well-defined local community, neighborhood, or rural district requirement is met if: • Single Political Jurisdiction—The area to be served is in a recognized single political jurisdiction, i.e., a city, county, or their political equivalent, or any contiguous portion thereof. • Statistical Area— • The area is a recognized Core Based Statistical Area (CBSA) or part thereof without a Metropolitan Division; and • The area contains a city, county or equivalent with a majority of all jobs in the CBSA; and • The city, county or equivalent must contain at least 1/3 of the CBSA's total population. • Rural District— • The district has well-defined geographic boundaries; • The district or any part thereof is not contained in an MSA or MicroSA; • The district does not have a population density in excess of 100 people per square mile; and • The total population of the district does not exceed 100,000 people. The OMB definitions of CBSA and Metropolitan Division may be found at 65 FR 82238 (Dec. 27, 2000). They are incorporated herein by reference. Access to these definitions is available through the main page of the Federal Register Web site at http://www.gpoaccess.gov/fr/index.html. If the proposed area does not meet the single political jurisdiction, statistical area or rural district definitions, the application will be subject to the public notice and comment procedures contained in V.A.3 and the applicant must submit a narrative description and supporting documentation proving how the area meets the standards for community interaction and/or common interests. See Section V.A.4—Community Documentation Requirements. V.A.3—Public Notice Procedures If the proposed area does not meet the single political jurisdiction, statistical area, or rural district definitions cited in Section V.A.2 above, NCUA will publish a notice in the Federal Register regarding the community application. The notice will include the name of the credit union and identify the geographic area of the proposed community. The notice will solicit comments in favor of or in opposition to the proposed community charter including whether the proposed area meets the well-defined local community requirements of this manual. The comment period will normally be 30 calendar days but may be extended at NCUA's discretion. Responses to the notice must be sent to the NCUA Board Secretary. V.A.4—Community Documentation Requirements For areas not defined as a well-defined local community or rural district, an applicant has the burden of demonstrating the relevance of the documentation provided in support of an application. This must be provided in a narrative format that explains how the documentation demonstrates that the community is a well-defined area and the residents interact and/or share common interests. For example, simply listing newspapers and organizations in the area is not sufficient to demonstrate that the area is a local community. (a) Well-Defined Area Documentation To establish that the area is well-defined, an application must include: • The geographic boundaries and size (square miles) of the community; and • a local map designating the area to be served and a regional or state map with the proposed community outlined. (b) Local Community Documentation To establish the area is a local community, the applicant needs to provide sufficient, persuasive documentation. Examples of criteria that NCUA considers relevant to documenting an application include but are not limited to the criteria set forth below. NCUA suggests that an applicant address these criteria but not every criteria must be met for NCUA to determine the area is a well-defined local community. NCUA will base its determination on the totality of the evidence provided by the applicant. NCUA will consider the following: Employment • Identify the major employers, as well as their locations, within the community. Provide data showing the extent that these employers draw employees from throughout the community. • Provide data on the percentage of individuals who work within the community. Include information on the percentage of individuals who work within their county of residence, as well as those who commute to other counties both within and outside the community. Major Trade Areas • Identify the major shopping centers. Provide data showing the extent that residents of the community use these facilities. • Identify the major sports and entertainment venues ( e.g. , stadiums, arenas). Provide data showing the extent that residents of the community attend these events. • Identify the traffic flows and commuting patterns within the community. Provide data showing the extent of interaction and/or common interests in the community. Population Concentrations • Identify varying population concentrations ( i.e. , urban vs. rural) within the community. Provide data showing how the population distribution facilitates interaction and/or common interests in the community. Shared/Common Facilities • Healthcare—identify major hospitals, including any special healthcare facilities, such as regional trauma centers. Provide data showing the extent that residents of the community use these facilities. • Public services and facilities—identify community-wide shared government services, such as police, fire protection, public utilities, park districts, and public transportation. Provide data showing the extent that residents of the community use these services and facilities. • Education—Identify major colleges and universities, as well as large local school districts within the community. Include enrollment statistics showing the extent the community residents are enrolled at these institutions. Governmental and Quasi-Governmental Organizations • Identify organizations such as economic development commissions, regional planning boards, and labor or transportation districts that serve the community. • Identify the service areas of these organizations, and how the purpose of these organizations promotes interaction and/or common interests in the community, and the extent to which the residents use the services they provide. Organizations and Clubs Within the Community • Identify groups such as charitable organizations, chambers of commerce, Girl or Boy Scout Councils, and religious dioceses that serve the community. • Include statistics that identify the service areas of these organizations, and the extent to which the residents use the services they provide. Festivals and Community Events • Identify any major festivals or community events. • Provide attendance figures that show the degree and extent of participation by residents of the community. Newspapers, Periodicals, or Other Media • Identify the major newspapers, television, and radio stations, along with their marketing/service areas. Include subscription and viewer/listening statistics. Other Documentation • Include any other documentation that demonstrates that the area is a community where individuals have common interests and/or interact. Documentation can include statistical data, surveys, and/or letters from government or corporate officials such as: • Written statements by officials of a shopping mall, hospital, educational establishment, airport, etc. that the individuals using their facilities are from the community requested; • Surveys completed by an outside firm or the credit union as long as they sufficiently document how the survey was performed and why it is statistically valid. The applicant has the burden of analyzing the documentation provided and explaining how it satisfies the requirements of interaction and/or common interests required by this manual. The level of documentation must be commensurate with the geographic size and population of the proposed local community. V.A.5—Previously Approved Communities An applicant need not submit a narrative summary or documentation to support a proposed community charter, amendment or conversion as a well-defined local community, neighborhood or rural district if the NCUA has previously determined that the same, exact geographic area meets that requirement in connection with consideration of a prior application; provided that the initial application for the area was approved no more than five years before the date of the current application. Applicants may contact the appropriate regional office to find out if the area they are interested in has already been determined to meet the community requirements. If the area is the same as a previously approved area, an applicant need only include a statement to that effect in the application. Applicants may be required to submit their own summary and documentation regarding the community requirements if NCUA, in its discretion, believes it is appropriate to do so, for example, if there has been a significant change in the population of the area since it was previously approved. This requirement does not apply to applications that meet the single political jurisdiction or statistical area definition of local community. V.A.6—Business Plan Requirements for a Community Credit Union A community credit union is frequently more susceptible to competition from other local financial institutions and generally does not have substantial support from any single sponsoring company or association. As a result, a community credit union will often encounter financial and operational factors that differ from an occupational or associational charter. Its diverse membership may require special marketing programs targeted to different segments of the community. For example, the lack of payroll deduction creates special challenges in the development and promotion of savings programs and in the collection of loans. If the local community requested does not meet the requirements of V.A.2 then the documentation requirements in Section V.A.4 of this Chapter must be met before a community charter can be approved. In all cases, in order to support a case for a conversion to community charter, an applicant federal credit union must develop a business plan incorporating the following data: • Pro forma financial statements for a minimum of 24 months after the proposed conversion, including the underlying assumptions and rationale for projected member, share, loan, and asset growth; • Anticipated financial impact on the credit union, including the need for additional employees and fixed assets, and the associated costs; • A description of the current and proposed office/branch structure, including a general description of the location(s); parking availability, public transportation availability, drive-through service, lobby capacity, or any other service feature illustrating community access; • Marketing plan addressing how the community will be served for the 24-month period after the proposed conversion to a community charter, including the projected marketing budget, promotions, and time line; • Details, terms and conditions of the credit union's financial products, programs, and services to be provided to the entire community; and • Maps showing the current and proposed service facilities, ATMs, political boundaries, major roads, and other pertinent information. An existing federal credit union may apply to convert to a community charter. Groups currently in the credit union's field of membership, but outside the new community credit union's boundaries, may not be included in the new community charter. Therefore, the credit union must notify groups that will be removed from the field of membership as a result of the conversion. Members of record can continue to be served. Before approval of an application to convert to a community credit union, NCUA must be satisfied that the credit union will be viable and capable of providing services to its members. Community credit unions will be expected to regularly review and to follow, to the fullest extent economically possible, the marketing and business plans submitted with their applications. V.A.7—Community Boundaries The geographic boundaries of a community federal credit union are the areas defined in its charter. The boundaries can usually be defined using political borders, streets, rivers, railroad tracks, etc. A community that is a recognized legal entity may be stated in the field of membership—for example, “Gus Township, Texas,” “Isabella City, Georgia,” or “Fairfax County, Virginia.” A community that is a recognized MSA must state in the field of membership the political jurisdiction(s) that comprise the MSA. V.A.8—Special Community Charters A community field of membership may include persons who work or attend school in a particular industrial park, shopping mall, office complex, or similar development. The proposed field of membership must have clearly defined geographic boundaries. V.A.9—Sample Community Fields of Membership A community charter does not have to include all four affinities (i.e., live, work, worship, or attend school in a community). Some examples of community fields of membership are: • nPersons who live, work, worship, or attend school in, and businesses located in the area of Johnson City, Tennessee, bounded by Fern Street on the north, Long Street on the east, Fourth Street on the south, and Elm Avenue on the west; • Persons who live or work in Green County, Maine; • Persons who live, worship, or work in and businesses and other legal entities located in Independent School District No. 1, DuPage County, Illinois; • Persons who live, worship, work (or regularly conduct business in), or attend school on the University of Dayton campus, in Dayton, Ohio; • Persons who work for businesses located in Clifton Country Mall, in Clifton Park, New York; or • Persons who live, work, or worship in the Binghamton, New York, MSA, consisting of Broome and Tioga Counties, New York. Some Examples of insufficiently defined local communities, neighborhoods, or rural districts are: • Persons who live or work within and businesses located within a ten-mile radius of Washington, DC (using a radius does not establish a well-defined area); • Persons who live or work in the industrial section of New York, New York. (not a well-defined neighborhood, community, or rural district); or • Persons who live or work in the greater Boston area. (not a well-defined neighborhood, community, or rural district). Some examples of unacceptable local communities, neighborhoods, or rural districts are: • Persons who live or work in the State of California. (does not meet the definition of local community, neighborhood, or rural district). • Persons who live in the first congressional district of Florida. (does not meet the definition of local community, neighborhood, or rural district). 4. Section III.A of Chapter 3 of IRPS 03-1, as amended by IRPS 06-1 and IRPS 07-1, is revised by removing the second and third full paragraphs and the bulleted paragraphs in between them and adding in their place two paragraphs to read as follows: For an underserved area, the well-defined local community, neighborhood, or rural district requirement is met if the area to be served meets the definition of a local community contained in Chapter 2 V.A.2. If the area to be served does not meet the single political jurisdiction or statistical definition contained in Chapter 2 V.A.2, the application must include documentation to support that it is a well-defined local community, neighborhood, or rural district. [FR Doc. E7-10398 Filed 6-4-07; 8:45 am] BILLING CODE 7535-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28348; Directorate Identifier 2007-NM-060-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-600, -700, -700C, -800 and -900 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD) for certain Boeing Model 737-600, -700, -700C, -800 and -900 series airplanes. This proposed AD would require sealing the fasteners on the front and rear spar inside the main fuel tank and on the lower panel of the center fuel tank, inspecting the wire bundle support installation in the equipment cooling system bays to identify the type of clamp installed and determine whether the Teflon sleeve is installed, and doing related corrective actions if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent arcing at certain fuel tank fasteners, in the event of a lightning strike or fault current event, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by July 20, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • DOT Docket Web site: Go to http://dms.dot.gov and follow the instructions for sending your comments electronically. • Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your comments electronically. • Mail: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, room PL-401, Washington, DC 20590. • Fax: (202) 493-2251. • Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone (425) 917-6505; fax (425) 917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28348; Directorate Identifier 2007-NM-060-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light 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 with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov . Examining the Docket You may examine the AD docket on the Internet at http://dms.dot.gov , or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (67 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design ( i.e. , type certificate (TC) and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with another latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Boeing determined during the SFAR 88 review that certain non-conductive fasteners, which penetrate the main and center fuel tanks, could be subject to lightning strikes or fault currents induced by short circuits. During a lightning strike or fault current event, electrical current may be conducted to those non-conductive fasteners, which if unsealed could create arcing inside the fuel tanks. This condition, if not corrected, could result in a fuel tank explosion and consequent loss of the airplane. Relevant Service Information We have reviewed Boeing Alert Service Bulletin 737-57A1279, dated January 24, 2007. The service bulletin describes procedures for the following actions (depending on airplane configuration): • Sealing the fasteners on the front and rear spar inside the main fuel tank and on the lower panel of the center fuel tank; • Inspecting the wire bundle support installation in the equipment cooling system bays to identify the type of clamp installed and determine whether the Teflon sleeve is installed; • Replacing any incorrect clamp with a new correct clamp; and • Installing any missing Teflon sleeving. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance There are about 1,754 airplanes of the affected design in the worldwide fleet; of these, 645 airplanes are U.S. registered. The following table provides the estimated costs for U.S. operators to comply with this proposed AD, at an average hourly labor rate of $80. Estimated Costs Action Group Work hours Average hourly labor rate Cost per airplane Number of U.S.- registered airplanes Fleet cost Sealant application 1 62 $80 $4,960 586 $2,906,560 2 28 80 2,240 44 98,560 3 28 80 2,240 15 33,600 Inspection 1 3 80 240 586 140,640 2 3 80 240 44 10,560 3 2 80 160 15 2,400 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 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 that the 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. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, 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 Federal Aviation Administration (FAA) amends § 39.13 by adding the following new airworthiness directive (AD): Boeing: Docket No. FAA-2007-28348; Directorate Identifier 2007-NM-060-AD. Comments Due Date (a) The FAA must receive comments on this AD action by July 20, 2007. Affected ADs (b) None. Applicability (c) This AD applies to Model 737-600, -700, -700C, -800 and -900 series airplanes, certificated in any category; as identified in Boeing Alert Service Bulletin 737-57A1279, dated January 24, 2007. Unsafe Condition (d) This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent arcing at certain fuel tank fasteners, in the event of a lightning strike or fault current event, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Compliance (e) You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Fastener Sealant (f) Within 60 months after the effective date of this AD: Seal the fasteners on the front and rear spar inside the main fuel tank and on the lower panel of the center fuel tank, as applicable, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 737-57A1279, dated January 24, 2007. Inspection (g) Within 60 months after the effective date of this AD: Perform a general visual inspection of the wire bundle support installation in the equipment cooling system bays to identify the type of clamp installed, and determine whether the Teflon sleeve is installed. Do these actions in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 737-57A1279, dated January 24, 2007. Do all applicable corrective actions within 60 months after the effective date of this AD in accordance with the service bulletin. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19. (2) To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on May 25, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-10755 Filed 6-4-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28349; Directorate Identifier 2007-NM-025-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, and 747SP Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD) for certain Boeing Model 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, and 747SP series airplanes. This proposed AD would require reconfiguring the clamps of certain wire bundles and applying insulating sealant to certain fasteners inside the fuel tanks. This proposed AD results from fuel system reviews conducted by the manufacturer. We are proposing this AD to prevent arcing inside the fuel tanks in the event of a lightning strike or high-powered short circuit, which could result in a fuel tank explosion or fire. DATES: We must receive comments on this proposed AD by July 20, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • DOT Docket Web site: Go to http://dms.dot.gov and follow the instructions for sending your comments electronically. • Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your comments electronically. • Mail: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590. • Fax: (202) 493-2251. • Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Sulmo Mariano, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone (425) 917-6501; fax (425) 917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28349; Directorate Identifier 2007-NM-025-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light 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 with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov. Examining the Docket You may examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (66 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design ( i.e. , type certificate (TC) and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with a latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. We have received a report indicating that a certain type of fastener used in the fuel tank walls of Model 747 airplanes is insufficiently bonded to the airplane structure. Further, these fasteners do not have sufficient electrical insulation applied inside the fuel tanks to prevent arcing in the event of a lightning strike or high-powered short circuit. This condition, if not corrected, could result in a fuel tank explosion or fire. Relevant Service Information We have reviewed Boeing Special Attention Service Bulletin 747-57-2326, dated January 4, 2007, which describes procedures for applying insulating sealant to certain fasteners inside the main fuel tanks. We have reviewed Boeing Special Attention Service Bulletin 747-57-2327, Revision 1, dated July 10, 2006, which describes procedures for reconfiguring the clamps of certain wire bundles by wrapping additional Teflon sleeving around the wire bundles, installing new, larger clamps, and sealing the ends of certain fasteners inside the auxiliary fuel tank, main fuel tanks, and surge tanks. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance There are about 707 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 107 airplanes of U.S. registry. Depending on airplane configuration, the proposed actions would take between 106 and 448 work hours per airplane, at an average labor rate of $80 per work hour. Required parts would cost between $430 and $2,074 per airplane. Based on these figures, the estimated cost of the proposed AD for U.S. operators is between $8,910 and $37,914 per airplane, or up to $4,056,798 for all airplanes. 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 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 that the 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. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, 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 Federal Aviation Administration (FAA) amends § 39.13 by adding the following new airworthiness directive (AD): Boeing: Docket No. FAA-2007-28349; Directorate Identifier 2007-NM-025-AD. Comments Due Date (a) The FAA must receive comments on this AD action by July 20, 2007. Affected ADs (b) None. Applicability (c) This AD applies to Boeing Model 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, and 747SP series airplanes, certificated in any category; as identified in Boeing Special Attention Service Bulletin 747-57-2327, Revision 1, dated July 10, 2006; and Boeing Special Attention Service Bulletin 747-57-2326, dated January 4, 2007. Unsafe Condition (d) This AD results from fuel system reviews conducted by the manufacturer. We are issuing this AD to prevent arcing inside the fuel tanks in the event of a lightning strike or high-powered short circuit, which could result in a fuel tank explosion or fire. 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. Change and Seal (f) Within 60 months after the effective date of this AD, do the actions required by paragraphs (f)(1) and (f)(2) of this AD. (1) Reconfigure the wire bundle clamps and seal the ends of certain fasteners inside the auxiliary fuel tank, main fuel tanks, and surge fuel tanks; in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-57-2327, Revision 1, dated July 10, 2006. (2) Seal the ends of certain fasteners inside the main fuel tanks, in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-57-2326, dated January 4, 2007. Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19. (2) To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on May 25, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-10760 Filed 6-4-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28352; Directorate Identifier 2007-NM-037-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-200B, 747-300, 747-400, 747-400D, and 747-400F Series Airplanes Equipped With General Electric CF6-80C2 Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD) for certain Boeing Model 747-200B, 747-300, 747-400, 747-400D, and 747-400F series airplanes. This proposed AD would require repetitive inspections of the left- and right-hand flipper door assemblies of the engine core cowls for migrated pins and damaged flipper doors, and corrective actions if necessary. Modification of the hinge assemblies terminates the repetitive inspections. This proposed AD results from two reports of missing flipper doors for the engine core cowls. We are proposing this AD to detect and correct migrated hinge pins and damaged flipper doors, which could allow the flipper door to fall off, resulting in the potential for an engine fire to propagate into the flammable leakage zone of the strut and for the amount of fire extinguishing agent reaching the fire to be diluted, and subsequent uncontained fire in the engine strut. DATES: We must receive comments on this proposed AD by July 20, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • DOT Docket Web site: Go to http://dms.dot.gov and follow the instructions for sending your comments electronically. • Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your comments electronically. • Mail: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590. • Fax: (202) 493-2251. • Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Sulmo Mariano, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone (425) 917-6501; fax (425) 917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28352; Directorate Identifier 2007-NM-037-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light 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 with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov. Examining the Docket You may examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion We have received two reports of missing flipper doors for the engine core cowls on Boeing Model 747 series airplanes equipped with General Electric CF6-80C2 engines. Investigation into the cause of the missing flipper doors revealed that hinge pins for the flipper doors were not secured correctly, and the vibration from the engine core cowls caused the hinge pins to migrate, allowing the flipper doors to fall off. When the engine core cowl is opened during normal operation, the flipper door opens to provide clearance for the hinge fittings. When the engine core cowl is closed, the flipper door is clamped underneath the strut seal, forming a continuous strut firewall. If a flipper door is missing, it creates a 1-inch by 5-inch hole in the strut firewall. According to requirements of the master minimum equipment list, an airplane cannot depart with a missing flipper door. This condition, if not corrected, could result in the potential for an engine fire to propagate into the flammable leakage zone of the strut and for the amount of fire extinguishing agent reaching the fire to be diluted, and subsequent uncontained fire in the engine strut. Relevant Service Information We have reviewed Boeing Special Attention Service Bulletin 747-71-2310, dated October 13, 2005. The service bulletin describes procedures for repetitively inspecting the left- and right-hand flipper door assemblies for migrated hinge pins and damaged flipper doors, and corrective actions if necessary. The corrective actions include replacing any damaged flipper door with a new or serviceable flipper door, and modifying the hinge assemblies if necessary. The modification includes shortening the hinge pin and peening (deforming) both ends of the hinge assembly to capture the pin. Modifying the hinge assemblies eliminates the need for the repetitive inspections. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. The Boeing service bulletin refers to Rohr Service Bulletin TBC/80C2-NAC-71-035, dated October 10, 2005, as an additional source of service information for inspecting hinge pins of the flipper doors, inspecting and replacing damaged flipper doors, and modifying the hinge assemblies of the flipper doors. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance There are about 297 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Average labor rate per hour Parts Cost per airplane Number of U.S.- registered airplanes Fleet cost Inspection of flipper door assemblies, per inspection cycle 1 $80 $0 $80, per inspection cycle 42 $3,360, per inspection cycle. Modification of hinge assemblies, if accomplished 1 $80 $0 $80 Up to 42 Up to $3,360. 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 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 that the 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. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, 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 Federal Aviation Administration (FAA) amends § 39.13 by adding the following new airworthiness directive (AD): Boeing: Docket No. FAA-2007-28352; Directorate Identifier 2007-NM-037-AD. Comments Due Date (a) The FAA must receive comments on this AD action by July 20, 2007. Affected ADs (b) None. Applicability (c) This AD applies to Boeing Model 747-200B, 747-300, 747-400, 747-400D, and 747-400F series airplanes, certificated in any category, equipped with General Electric CF6-80C2 engines. Unsafe Condition (d) This AD results from two reports of missing flipper doors for the engine core cowl. We are issuing this AD to detect and correct migrated hinge pins and damaged flipper doors, which could allow the flipper door to fall off, resulting in the potential for an engine fire to propagate into the flammable leakage zone of the strut and for the amount of fire extinguishing agent reaching the fire to be diluted, and subsequent uncontained fire in the engine strut. 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. Inspection of the Flipper Door Assemblies (f) Within 24 months after the effective date of this AD: Do a general visual inspection for migrated hinge pins and damaged flipper doors of the left- and right-hand flipper door assemblies of the engine core cowls, and do all applicable corrective actions, by accomplishing all the actions specified in the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-71-2310, dated October 13, 2005. Do all applicable corrective actions before further flight. Repeat the inspection thereafter at intervals not to exceed 18 months for that flipper door assembly, until doing the modification specified in paragraph (g) of this AD. Note 1: Boeing Special Attention Service Bulletin 747-71-2310, dated October 13, 2005, refers to Rohr Service Bulletin TBC/80C2-NAC-71-035, dated October 10, 2005, as an additional source of service information for accomplishing the actions specified in paragraph (f) of this AD. Terminating Action for Repetitive Inspections (g) Modifying a hinge assembly of a flipper door assembly of the engine core cowls in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 747-71-2310, dated October 13, 2005, terminates the repetitive inspection requirements of this AD for that hinge assembly. Parts Installation (h) As of the effective date of this AD, no person may install, on any airplane, a hinge assembly, part number 224-2335-69, for the flipper door of the engine core cowl unless it has been modified in accordance with the requirements of paragraph (g) of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19. (2) To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on May 25, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-10757 Filed 6-4-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28351; Directorate Identifier 2007-NM-074-AD] RIN 2120-AA64 Airworthiness Directives; McDonnell Douglas Model MD-11, MD-11F, DC-10-30 and DC-10-30F (KC-10A and KDC-10), DC-10-40, DC-10-40F, and MD-10-30F Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD) for certain McDonnell Douglas Model MD-11, MD-11F, DC-10-30 and DC-10-30F (KC-10A and KDC-10), DC-10-40, DC-10-40F, and MD-10-30F airplanes. This proposed AD would require measuring the electrical resistance of the bond between the No. 2 fuel transfer pump adapter surface of the fuel tank and the fuel transfer pump housing flange, and performing corrective and other specified actions as applicable. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent inadequate bonding between the No. 2 fuel transfer pump adapter surface of the fuel tank and the fuel transfer pump housing flange. Inadequate bonding could result in a potential ignition source inside the fuel tank if the fuel transfer pump and structure interface are not submerged in fuel, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by July 20, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • DOT Docket Web site: Go to http://dms.dot.gov and follow the instructions for sending your comments electronically. • Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your comments electronically. • Mail: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, room PL-401, Washington, DC 20590. • Fax: (202) 493-2251. • Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, Long Beach Division, 3855 Lakewood Boulevard, Long Beach, California 90846, Attention: Data and Service Management, Dept. C1-L5A (D800-0024), for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Serj Harutunian, Aerospace Engineer, Propulsion Branch, ANM-140L, FAA, Los Angeles Aircraft Certification Office, 3960 Paramount Boulevard, Lakewood, California 90712-4137; telephone (562) 627-5254; fax (562) 627-5210. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28351; Directorate Identifier 2007-NM-074-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light 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 with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://dms.dot.gov. Examining the Docket You may examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (66 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design (i.e., type certificate (TC) and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: Single failures, single failures in combination with a latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Model DC-10 airplanes have a fuel boost pump and a fuel transfer pump mounted to the fuel tank No. 2 lower skin. The instructions for early DC-10s called out electrical bonding to structure on both fuel transfer pump housings; however, a later drawing change did not call out bonding for the fuel transfer pump housing. The same condition exists on Model MD-11 airplanes. It is unknown whether there is an adequate bond on these airplanes, and operators need to make that determination. Inadequate bonding could result in a potential ignition source inside the fuel tank if the fuel transfer pump and structure interface are not submerged in fuel, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Relevant Service Information We have reviewed Boeing Service Bulletins DC10-28-250 and MD11-28-129, both dated July 26, 2006. The service bulletins describe procedures for measuring the electrical resistance between the No. 2 fuel transfer pump adapter surface of the fuel tank and the fuel transfer pump housing flange, and performing corrective and other specified actions as applicable. The corrective actions include electrically bonding the fuel tank No. 2 fuel transfer pump access door surfaces and fuel pump housing if the resistance measurement is more than 2.5 milliohms. The other specified actions include an electrical resistance bonding test to verify the electrical resistance between the fuel transfer pump housing and the structure is 2.5 milliohms maximum. For airplanes on which the electrical resistance is not achieved, the procedures include reworking the electrical bond until that electrical resistance is achieved. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance There are about 573 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 399 airplanes of U.S. registry. The proposed measurement would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $31,920, or $80 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this 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 that the 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. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, 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 Federal Aviation Administration (FAA) amends § 39.13 by adding the following new airworthiness directive (AD): McDonnell Douglas: Docket No. FAA-2007-28351; Directorate Identifier 2007-NM-074-AD. Comments Due Date (a) The FAA must receive comments on this AD action by July 20, 2007. Affected ADs (b) None. Applicability (c) This AD applies to McDonnell Douglas Model MD-11, MD-11F, DC-10-30 and DC-10-30F (KC-10A and KDC-10), DC-10-40, DC-10-40F, and MD-10-30F airplanes, certificated in any category; as identified in Boeing Service Bulletins DC10-28-250 and MD11-28-129, both dated July 26, 2006. Unsafe Condition (d) This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent inadequate bonding between the No. 2 fuel transfer pump adapter surface of the fuel tank and the fuel transfer pump housing flange. Inadequate bonding could result in a potential ignition source inside the fuel tank if the fuel transfer pump and structure interface are not submerged in fuel, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Compliance (e) You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Measure Electrical Resistance/Corrective & Other Specified Actions (f) Within 60 months after the effective date of this AD: Measure the electrical resistance of the bond between the No. 2 fuel transfer pump adapter surface of the fuel tank and the fuel transfer pump housing flange in accordance with the Accomplishment Instructions of Boeing Service Bulletin DC10-28-250 or MD11-28-129, both dated July 26, 2006, as applicable. (1) If the resistance measurement is 2.5 milliohms or less: No further action is required by this paragraph. (2) If the resistance measurement is more than 2.5 milliohms: Before further flight, electrically bond the fuel tank No. 2 fuel transfer pump housing surfaces in accordance with the service bulletin. (3) Before further flight thereafter, do an electrical resistance bonding test to verify the electrical resistance between the fuel transfer pump housing and the structure is 2.5 milliohms maximum. If that electrical resistance is not achieved, rework the electrical bond until the electrical resistance is achieved. Do the actions in accordance with the service bulletin. Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, Los Angeles Aircraft Certification Office (LAACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19. (2) To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector (PI) in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on May 25, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-10756 Filed 6-4-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF COMMERCE Bureau of Industry and Security 15 CFR Parts 744 and 772 [Docket No. 0612243150-63150-01] RIN 0694-AD82 Authorization To Impose License Requirements for Exports or Reexports to Entities Acting Contrary to the National Security or Foreign Policy Interests of the United States AGENCY: Bureau of Industry and Security, Commerce. ACTION: Proposed rule. SUMMARY: The Entity List (Supplement No. 4 to part 744 of the Export Administration Regulations) provides notice to the public that certain exports and reexports to parties identified on the Entity List require a license from the Bureau of Industry and Security (BIS) and that availability of License Exceptions in such transactions is limited. This proposed rule would expand the scope of reasons for which BIS may add parties to the Entity List. This proposed rule would also amend the Export Administration Regulations (EAR) to state explicitly that a party listed on the Entity List has a right to request that its listing be removed or modified and would set procedures for addressing such requests. DATES: Comments concerning this rule must be received by BIS no later than August 6, 2007. ADDRESSES: Comments on this rule may be submitted to the Federal eRulemaking Portal at http://www.regulations.gov (follow the instructions for submitting comments) by e-mail directly to BIS at publiccomments@bis.doc.gov (refer to regulatory identification number 0694-AD82 in the subject line), by fax at (202) 482-3355, or on paper to Regulatory Policy Division, Office of Exporter Services, Bureau of Industry and Security, Room H2705, U.S. Department of Commerce, 14th Street and Pennsylvania Avenue, NW., Washington, DC 20230. Refer to Regulatory Identification Number (RIN) 0694-AD82 in all comments. FOR FURTHER INFORMATION CONTACT: Mike Rithmire, Office of the Assistant Secretary for Export Administration, Bureau of Industry and Security, e-mail * mrithmir@bis.doc.gov , tel. ( 202) 482-6105. SUPPLEMENTARY INFORMATION: Background The Entity List (Supplement No. 4 to part 744 of the EAR) provides notice to the public of the identity of certain parties whose presence as a recipient of items subject to the Export Administration Regulations (EAR) can impose a license requirement in an export or reexport transaction. The reasons for which BIS may place an entity on the Entity List are stated in §§ 744.2, 744.3, 744.4, 744.6, 744.10 and 744.20 of the EAR. In addition to those reasons, this proposed rule would create a new § 744.11 to authorize BIS to add to the Entity List entities that BIS has reasonable cause to believe, based on specific and articulable facts, have been, are or pose a risk of being involved in activities that are contrary to the national security or foreign policy interests of the United States or those acting on behalf of such entities. This new section would not be used to add to the Entity List entities that are U.S. persons (as defined in § 772.1 of the EAR). This new section also would not be used to add to the Entity List entities for which the EAR already impose a license requirement because those entities are already listed on the List of Specially Designated Nationals and Blocked Persons published by the Treasury Department, Office of Foreign Assets Control. Reason for the Changes Proposed by This Rule BIS is proposing to take this action to focus its export control efforts more closely on problematic potential recipients of items that are subject to the EAR, but who do not meet the criteria currently set forth in §§ 744.2, 744.3, 744.4, 744.6, 744.10 or 744.20. With this rule, the United States government would be able to conduct prior review and make appropriate licensing decisions regarding proposed exports and reexports to such recipients to the degree necessary to protect its interests. BIS would be able to tailor license requirements and availability of license exceptions for exports and reexports to parties who have taken, are taking, or will take actions that are contrary to United States national security or foreign policy interests without imposing additional license requirements that apply broadly to entire destinations or items. BIS believes that such targeted application of license requirements would provide the flexibility to deter use of items that are subject to the EAR in ways that are inimical to the interests of the United States with minimal costs to and disruption of legitimate trade. As export controls continue to focus not just on countries, but also on individual customers or entities, BIS believes it is important to provide more information to the public about entities of concern. Implementation of this rule will provide additional information to the public to enhance the ability to screen potential recipients of items subject to the EAR. In addition, this proposed rule would simplify the EAR by reducing the need to issue general orders to impose license requirements on specific parties. License requirements currently imposed on specific entities through general orders would, under this rule, be imposed by adding such entities to the Entity List. Such an action would reduce the number of EAR provisions that the public would have to review to determine license requirements under the EAR. Summary of the Changes Proposed by This Rule This proposed rule would authorize BIS to impose foreign policy export and reexport license requirements, limit the availability of License Exceptions, and set license application review policy for exports and reexports of items subject to the EAR to entities that BIS has reasonable cause to believe, based on specific and articulable facts, have been, are or pose a risk of being involved in activities that are contrary to the national security or foreign policy interests of the United States or those acting on behalf of such entities. This proposed rule would not require that such activities involve items or activities that are subject to the EAR. This proposed rule lists five types of conduct, in addition to the grounds set forth in §§744.2, 744.3, 744.4, 744.6 or 744.20, that BIS could determine are contrary to U.S. national security or foreign policy interests. They are: (i) Supporting persons engaged in acts of terror; (ii) Actions that could enhance the military capability of, or the ability to support terrorism of governments that have been designated by the Secretary of State as having repeatedly provided support for acts of international terrorism; (iii) Transferring, developing, servicing, repairing, or producing conventional weapons in a manner that is contrary to United States national security or foreign policy interests or enabling such transfer, development, service, repair or production by supplying parts, components, technology, or financing for such activity; (iv) Deliberately failing or refusing to comply with an end use check conducted by or on behalf of BIS or the Department of State, Directorate of Defense Trade Controls by denying access, by refusing to provide information about parties to a transaction, or by providing information about such parties that is false or that cannot be verified or authenticated; and (v) Engaging in conduct that poses a risk of violating the EAR and raises sufficient concern that prior review of exports or reexports involving the party and the possible imposition of license conditions or license denial enhances BIS's ability to prevent violations of the EAR. These criteria are illustrative of conduct that could be contrary to the national security or foreign policy interests of the United States. A party could be added to the Entity List if specific and articulable facts provided reasonable cause to believe that it is involved in, has been involved in, or poses a significant risk of being or becoming involved in one of the five listed illustrative activities or other activities that are contrary to U.S. national security or foreign policy interests. This proposed rule also would authorize BIS to modify the license requirements, license exception availability or license application review policy that applies to any entity placed on the Entity List pursuant to this rule. This proposed rule would not be used to add to the Entity List a party to which exports or reexports require a license pursuant to §§ 744.12, 744.13, 744.14 or 744.18 of the EAR. Those sections impose license requirements because of the presence of certain parties on the List of Specially Designated Nationals and Blocked Persons published by the U.S. Department of the Treasury, Office of Foreign Assets Control. This proposed rule would not authorize placing U.S. persons, as defined in § 772.1 of the EAR, on the Entity List. All impositions of license requirements or statements of license application review policy or any modification thereof made pursuant to this rule would be required to be made by publishing an amendment to the Entity List found at Supplement No. 4 to part 744 of the Export Administration Regulations. Under this proposed rule, license exceptions are not available for any entity added to the Entity List pursuant to this rule unless specifically authorized in the entry for the entity. This proposed rule would explicitly set forth the ability of a party who is listed on the Entity List to request that its listing be removed or modified. Such requests, including reasons therefor, would have to be made in writing, and BIS would be required to provide a written response that would be the final agency decision on the request. Such requests would be reviewed by the Departments of Commerce, State, Defense, and Energy and, if appropriate in a particular case, the Treasury. The interagency decision, as communicated to the requesting entity by BIS, would be the final agency action on such a request. This proposed rule would make a conforming change to the definition of U.S. person in § 772.1 by adding § 744.11 to the list of sections to which that definition applies. The license requirements proposed by this rule would be an expansion of foreign policy export controls that would require a report to Congress in accordance with section 6 of the Export Administration Act. BIS will submit the appropriate report to Congress before implementing any such expanded controls. Request for Comments BIS is seeking public comments on this proposed rule and will consider all comments received on or before August 6, 2007 in developing any final rule. Comments received after that date will be considered if possible, but their consideration cannot be assured. All public comments on this proposed rule must be in writing (including fax or e-mail) and will be a matter of public record, available for public inspection and copying. The Office of Administration, Bureau of Industry and Security, U.S. Department of Commerce, displays these public comments on BIS's Freedom of Information Act (FOIA) Web site at http://www.bis.doc.gov/foia. This office does not maintain a separate public inspection facility. If you have technical difficulties accessing this Web site, please call BIS's Office of Administration at (202) 482-0953 for assistance. Rulemaking Requirements 1. This rule has been determined to be a significant rule pursuant to Executive Order 12866. 2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule involves a collection of information that has been approved by the OMB under control number 0694-0088, “Multi- Purpose Application,” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. Additionally, this rule contains a new collection of information subject to review and approval by OMB under the Paperwork Reduction Act. This collection will be submitted to OMB for approval. This rule proposes a procedure for a listed party to request removal or modification of its listing, as set forth in proposed § 744.16. BIS estimates that this new collection will involve an annual burden of 15 hours. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to David Rostker, OMB Desk Officer, by e-mail at david_rostker@omb.eop.gov or by fax to (202) 395-7285; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, P.O. Box 273, Washington, DC 20044. 3. This rule does not contain policies with Federalism implications as this term is defined in Executive Order 13132. 4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States (see 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. , are not applicable. However, to obtain the benefit of a variety of viewpoints before issuing any final rule, BIS is issuing this rule in proposed form with a request for comments. List of Subjects 15 CFR Part 744 Exports, Reporting and recordkeeping requirements, Terrorism. 15 CFR Part 772 Exports. Accordingly, parts 744 and 772 of the Export Administration Regulations (15 CFR parts 730-774) are amended as follows: PART 744—[AMENDED] 1. The authority citation for part 744 continues to read as follows: Authority: 50 U.S.C. app. 2401 et seq. ; 50 U.S.C. 1701 et seq. ; 22 U.S.C. 3201 et seq. ; 42 U.S.C. 2139a; Sec. 901-911, Pub. L. 106-387; Sec. 221, Pub. L. 107-56; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of August 3, 2006, 71 FR 44551 (August 7, 2006); Notice of October 27, 2006, 71 FR 64109 (October 31, 2006). 2. In § 744.1(a)(1), a new sentence immediately following the current sixth sentence and a new sentence immediately following the current tenth sentence are added, to read as follows: § 744.1 General provisions. (a)(1) * * * Section 744.11 imposes license requirements, to the extent specified in Supplement No. 4 of this part on entities listed in Supplement No. 4 of this part for activities contrary to the national security or foreign policy interests of the United States.* * * Section 744.16 sets forth the right of a party listed in Supplement No. 4 of this part to request that its listing be removed or modified. 3. Section § 744.11 is added to read as follows: § 744.11 License requirements that apply to entities acting contrary to the national security or foreign policy interests of the United States. BIS may impose foreign policy export and reexport license requirements and limitations on availability of license exceptions and may set license application review policy based on the criteria in this section. Such requirements, limitations and policy are in addition to those set forth elsewhere in the EAR. License requirements, limitations on use of license exceptions and license application review policy will be imposed under this section by adding an entity to the Entity List with a reference to this section and by stating on the Entity List the license requirements and license application review policy that apply to that entity. BIS may remove an entity from the Entity List if it is no longer engaged in the activities described in paragraph (b) of this section and is unlikely to engage in such activities in the future. BIS may modify the license exception limitations and license application review policy that applies to a particular entity to implement the policies of this section. Any modification to the Entity List proposed to be made pursuant to this section will be reviewed by the Departments of Commerce, State, and Defense, and Energy and the Treasury as appropriate. (a) License Requirement, Availability of License Exceptions, and License Application Review Policy. A license is required, to the extent specified on the Entity List, to export or reexport any item subject to the EAR to an entity that is listed on the Entity List in an entry that contains a reference to this section. License Exceptions may not be used unless authorized in that entry. Applications for licenses required by this section will be evaluated as stated in that entry in addition to any other applicable review policy stated elsewhere in the EAR. (b) Criteria for revising the Entity List. Entities that BIS has reasonable cause to believe, based on specific and articulable facts, have been, are, or pose a significant risk of being or becoming involved in activities that are contrary to the national security or foreign policy interests of the United States and those acting on behalf of such entities may be added to the Entity List pursuant to this section. This section may not be used to place on the Entity List any party to which exports or reexports require a license pursuant to §§ 744.12, 744.13, 744.14 or 744.18 of this part. This section may not be used to place on the Entity List any party if exports or reexports to that party of items that are subject to the EAR are prohibited by or require a license from another U.S. government agency. This section may not be used to place any U.S. person, as defined in § 772.1, on the Entity List. Examples of activities that could be contrary to the national security or foreign policy interests of the United States include: (1) Supporting persons engaged in acts of terror; (2) Actions that could enhance the military capability of, or the ability to support terrorism of governments that have been designated by the Secretary of State as having repeatedly provided support for acts of international terrorism; (3) Transferring, developing, servicing, repairing or producing conventional weapons in a manner that is contrary to United States national security or foreign policy interests or enabling such transfer, service, repair, development, or production by supplying parts, components, technology, or financing for such activity; (4) Deliberately failing or refusing to comply with an end use check conducted by or on behalf of BIS or the Directorate of Defense Trade Controls of the Department of State, by denying access, by refusing to provide information about parties to a transaction, or by providing information about such parties that is false or that cannot be verified or authenticated; or (5) Engaging in conduct that poses a risk of violating the EAR and raises sufficient concern that BIS believes that prior review of exports or reexports involving the party and the possible imposition of license conditions or license denial enhances BIS's ability to prevent violations of the EAR. 4. Section 744.16 is added to read as follows: § 744.16 Procedure for requesting removal or modification of an Entity List Entity. Any entity listed on the Entity List may request that its listing be removed or modified. (a) All such requests, including reasons therefor, must be in writing and sent to: (Address to be added in final rule). (b) BIS will review such requests in conjunction with the Departments of Defense, State and Energy, and if appropriate in a particular case, the Treasury. (c) The Chair of the End User Review Committee will convey the decision on the request to the requester in writing. That decision will be the final agency action on the request. PART 772—[AMENDED] 5. The authority citation for part 772 continues to read as follows: Authority: 50 U.S.C. app. 2401 et seq. ; 50 U.S.C. 1701 et seq. ; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 3, 2006, 71 FR 44551 (August 7, 2006). 6. In § 772.1 the definition of U.S. person is amended by revising paragraph (a) introductory text to read as follows: § 772.1 Definition of terms as used in the Export Administration Regulations (EAR). * * * U.S. Person. (a) For purposes of §§ 744.6, 744.10, 744.11, 744.12, 744.13, and 744.14 of the EAR, the term U.S. person includes: Dated: May 29, 2007. Christopher A. Padilla, Assistant Secretary for Export Administration. [FR Doc. E7-10788 Filed 6-4-07; 8:45 am] BILLING CODE 3510-33-P DEPARTMENT OF STATE 22 CFR Part 62 RIN 1400-AC35 [Public Notice 5797] Exchange Visitor Program—College and University Students, Student Interns AGENCY: Department of State. ACTION: Proposed rule with request for comments. SUMMARY: The Department is hereby proposing to revise its regulations concerning College and University Students. The proposed Rule, if adopted, will create a new subcategory of the College and University Student category—“Student Interns”. Participation in this new sub-category is open to foreign students enrolled and pursuing full-time studies at a post-secondary educational institution outside the United States. Student interns may participate in a student internship program for up to 12 months at each degree level. DATES: The Department will accept comments on the proposed regulation from the public up to August 6, 2007. ADDRESSES: You may submit comments identified by any of the following methods: • Persons with access to the Internet may also view this notice and provide comments by going to the regulations.gov Web site at: http://www.regulations.gov/index.cfm . • Mail (paper, disk, or CD-ROM submissions): U.S. Department of State, Office of Exchange Coordination and Designation, SA-44, 301 4th Street, SW., Room 734, Washington, DC 20547 • E-mail: jexchanges@state.gov . You must include the RIN (1400-xxxx) in the subject line of your message. FOR FURTHER INFORMATION CONTACT: Stanley S. Colvin, Director, Office of Exchange Coordination and Designation, U.S. Department of State, SA-44, 301 4th Street, SW., Room 734, Washington, DC 20547; or e-mail at jexchanges@state.gov . SUPPLEMENTARY INFORMATION: The Department of State (Department) designates U.S. government, academic and private sector entities to conduct educational and cultural exchange programs pursuant to a broad grant of authority provided by the Mutual Educational and Cultural Exchange Act of 1961, as amended (Fulbright-Hays Act). Under this authority, designated program sponsors facilitate the entry into the United States of more than 300,000 exchange participants each year. The former United States Information Agency (USIA) and, as of October 1, 1999, its successor, the Department, have promulgated regulations governing the Exchange Visitor Program that are set forth at 22 CFR 62. Regulations governing exchange visitor college and university students appear at 22 CFR 62.23. The Department plans to publish an Interim Final Rule relating to exchange visitor trainees and interns (see 22 CFR 62.22). This Interim Final Rule creates a new exchange visitor category—the Intern—for private sector organizations sponsoring individuals who are currently enrolled in and pursuing studies at a degree- or certificate-granting post-secondary academic institution outside the United States or have graduated from such an institution no more than 12 months prior to his/her exchange visitor program begin date, and who enters the United States to participate in a structured and guided work-based internship program in his/her specific academic field. This Proposed Rule is promulgated to make the use of a similar intern category available to American college and university Exchange Visitor Program designated sponsors. Generally speaking, the proposed regulations governing the new student intern category track the internship regulations applicable to training program sponsors. The new student intern sub-category is available to foreign students enrolled in accredited post-secondary educational institutions outside the United States. Student interns may participate in a student internship program for up to 12 months at each degree level. For example, if a student comes to the United States to participate in a student internship program at the equivalent of a baccalaureate program, he/she could remain in the United States for up to 12 months. The same individual would be permitted another student internship program up to 12 months at the next higher degree level, such as a masters degree program, or students changing majors and obtaining a new degree. Selection criteria for the new student intern sub-category must include the following requirements: The student must be accepted to participate in an internship by the post-secondary educational institution listed as the sponsor on his or her Form DS-2019 and is primarily in the United States to engage in a student internship program rather than to engage in employment or provide services to an employer; the student intern must be in good academic standing with the post-secondary educational institution in which he or she is enrolled and currently participating outside the United States; and the student intern will return to the academic program in the home educational institution abroad after completion of the student internship program which is required to fulfill a degree requirement. The new regulations outline provisions for dealing with the sponsor's obligations and any third parties—either domestic or overseas—with whom sponsors contract to assist them in recruiting, selecting, screening, orienting, placing, training, or evaluating foreign nationals who participate in student internship programs. The regulations require sponsors to enter into a written agreement with third parties outlining the full relationship between the parties on all matters involving the Exchange Visitor Program. Third parties must provide a Dun & Bradstreet identification number. At the recommendation of exchange community comments, the Department is also changing its Regulations to require sponsors to screen and vet all third parties. A wide range of U.S. businesses and governmental or non-governmental entities host foreign students in student internship programs on behalf of designated sponsors. These regulations set baseline standards to which sponsors are required to adhere to ensure that such host organizations are legitimate entities, are appropriately registered or licensed to conduct their activities in their jurisdiction, and possess and maintain the ability and resources to provide structured and guided work-based experience according to individualized Training and Internship Placement Plans (T/IPP—Form DS-7002). In some instances, sponsors will also be required to conduct a site visit of the host organization's location. The goal of the sponsor in vetting host organizations is to collect sufficient evidence to support a finding that participants are properly placed with host organizations that meet these standards. In order to participate in the student intern sub-category, designated sponsors must complete and obtain requisite signatures for a T/IPP. The information may be obtained from the intern's dean or academic advisor at the intern's home institution, which sets forth: The goals and objectives of the internship; a description of the student internship program (location; contact information; number of hours per week of work and compensation therefore, if any; a description of the supervision the intern will receive; and the dates of the student internship program); a description of how the student internship program will enhance the student intern's educational program in the home institution; a determination as to whether and to what extent the student intern has previously taken part in a student internship program in the United States; and, finally, a determination whether all the criteria and program requirements of the new regulation are met. In order to ensure the quality of the internship program, program sponsors must evaluate the effectiveness and appropriateness of the internship program in achieving its stated goals and objectives. The Proposed Rule, if adopted, will permit student interns to engage in full-time employment during the student internship program as outlined on their T/IPP, with or without wages or other compensation. Employment is not required for participation in the program. In those cases where the student intern is employed, all employment activities must be approved by the home institution's dean or academic advisor, and the responsible officer. Finally, the regulations prohibit sponsors from placing student interns in unskilled or casual labor positions, in positions that require or involve child care or elder care, positions in the field of aviation, or in any kind of position that involves patient care or contact. Further, sponsors must not place student interns in positions that involve more than 20 per cent clerical work during their programs. Regulatory Analysis Administrative Procedure Act The Department has determined that this Proposed Rule involves a foreign affairs function of the United States and is consequently exempt from the procedures required by 5 U.S.C. 553 pursuant to 5 U.S.C. 553(a)(1). Nonetheless, because of its importance to the public, the Department has elected to solicit comments during a 60-day comment period. Small Business Regulatory Enforcement Fairness Act of 1996 It has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996. It will not have a substantial effect 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. Therefore, it has been determined that the Proposed Rule does not have sufficient federalism implications to warrant application of the consultation provisions of Executive Orders 12372 and 13132. Regulatory Flexibility Act/Executive Order 13272: Small Business Since this rulemaking is exempt from 5 U.S.C 553, and no other law requires the Department to give notice of proposed rulemaking, this rulemaking also is not subject to the Regulatory Flexibility Act (5 U.S.C. 601, et seq. ) and Executive Order 13272, section 3(b). Executive Order 12866, as Amended The Department of State does not consider this Proposed Final Rule to be a “significant regulatory action” under Executive Order 12866, as amended, section 3(f), Regulatory Planning and Review. In addition, the Department is exempt from Executive Order 12866 except to the extent that it is promulgating regulations in conjunction with a domestic agency that are significant regulatory actions. The Department has nevertheless reviewed the Proposed Rule to ensure its consistency with the regulatory philosophy and principles set forth in that Executive Order. Executive Order 12988 The Department has reviewed this Proposed Rule in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden. Unfunded Mandates Reform Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995 (UFMA), Pub. L. 104-4, 109 Stat. 48, 2 U.S.C. 1532, generally requires agencies to prepare a statement before proposing any rule that may result in an annual expenditure of $100 million or more by State, local, or tribal governments, or by the private sector. This rule will not result in any such expenditure, nor will it significantly or uniquely affect small governments. Executive Orders 12372 and 13132 This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this regulation. Paperwork Reduction Act The information collection requirements contained in this rulemaking (Form DS-7002) have been approved by the Office of Management and Budget pursuant to the Paperwork Reduction Act, 44 U.S.C. Chapter 35, under OMB Control Number 1405-0170, expiration date: 07/31/2009. List of Subjects in 22 CFR Part 62 Cultural exchange programs, Reporting and recordkeeping requirements. Accordingly, for the reasons stated in the preamble, the Department of State proposes to amend 22 CFR part 62 as follows: PART 62—EXCHANGE VISITOR PROGRAM 1. The authority citation for part 62 is revised to read as follows: Authority: 8 U.S.C. 1101(a)(15)(J), 1182, 1184, 1258, 1372, 170101775; 22 U.S.C. 1431-1442, 2451-2460, 6501; 5 U.S.C. app. 1-11 Reorganization Plan No. 2 of 1977, 3 CFR, 1977 Comp. p. 200; E.O. 12048 of March 27, 1978; 3 CFR, 1978 Comp. p. 168. 2. Section 62.2 is amended by adding definitions for “Student Intern” and “Student Intership Program” to read as follows: § 62.2 Definitions. Student Intern means a foreign national who is currently enrolled in and pursuing studies at a degree-or certificate-granting post-secondary academic institution outside the United States and who enters the United States to participate in a structured and guided work-based student internship program in his/her specific academic field for academic credit. Student Internship Program means a structured and guided work-based learning program as set forth in an individualized Training/Internship Placement Plan (T/IPP) that fulfills a student's academic degree, recognizes the need for work-based experience, provides on-the-job exposure to American techniques, methodologies, and technology, and enhances the student intern's knowledge of American culture and society. 3. Section 62.4 is amended by revising the introductory text and paragraph (a) to read as follows: § 62.4 Categories of participant eligibility. Sponsors may select foreign nationals to participate in their exchange visitor programs. Participation by foreign nationals in an exchange visitor program is limited to individuals who are engaged in the following activities in the United States: (a) Student . An individual who is: (1) Studying in the United States: (i) Pursuing a full course of study at a secondary accredited educational institution; (ii) Pursuing a full course of study leading to or culminating in the award of a U.S. degree from a post-secondary accredited educational institution; or (iii) Engaged full-time in a non-degree prescribed course of study of up to 24 months duration conducted by: (A) A post-secondary accredited educational institution; or (B) An institute approved by or acceptable to the post-secondary accredited educational institution where the student is to be enrolled upon completion of the non-degree program; (2) Engaged in academic training as permitted in § 62.23(f); or (3) Engaged in English language training at: (i) A post-secondary accredited educational institution, or (ii) An institute approved by or acceptable to the post-secondary accredited educational institution where the college or university student is to be enrolled upon completion of the language training; or (4) Engaged full-time in a student internship program conducted by a post-secondary accredited educational institution. 4. Section 62.23 is revised to read as follows: § 62.23 College and university students. (a) Purpose . Programs under this section provide foreign students the opportunity to participate in a designated exchange visitor program while studying at a degree-granting post-secondary accredited educational institution or participating in a student internship program which fulfills the student's academic study. Exchange visitors sponsored in this category may participate in degree, non-degree, or student internship programs. Such exchanges are intended to promote mutual understanding by fostering the exchange of ideas between foreign students and their American counterparts. (b) Designation . The Department of State may, in its sole discretion, designate bona fide programs which offer foreign nationals the opportunity to study in the United States at post-secondary accredited educational institutions or participate in student internship programs. (c) Selection criteria . Sponsors select the college and university students who participate in their exchange visitor programs. Sponsors must secure sufficient background information on the students to ensure that they have the academic credentials required for their program. Students are eligible for participation in the Exchange Visitor Program if at any time during their educational program in the United States: (1) They or their program are financed directly or indirectly by: (i) The United States Government; (ii) The government of the student's home country; or (iii) An international organization of which the United States is a member by treaty or statute; (2) The programs are carried out pursuant to an agreement between the United States Government and a foreign government; (3) The program is carried out pursuant to written agreement between: (i) American and foreign educational institutions; (ii) An American educational institution and a foreign government; or (iii) A state or local government in the United States and a foreign government; (4) The exchange visitors are supported substantially by funding from any source other than personal or family funds, or (5) The exchange visitor is participating in a student internship program as described in paragraph (i) of this section. (d) Admissions requirement . In addition to satisfying the requirements of § 62.10(a), sponsors must ensure that the exchange visitor student has been admitted to, or accepted for a student internship program offered by, the post-secondary accredited educational institution(s) listed on the Form DS-2019 before issuing the Form. (e) Full course of study requirement. Exchange visitor students, other than student interns described in paragraph (i), must pursue a full course of study at a post-secondary accredited educational institution in the United States as defined in § 62.2, except under the following circumstances: (1) Vacation. During official school breaks and summer vacations if the student is eligible and intends to register for the next term. A student attending a school on a quarter or trimester calendar may be permitted to take the annual vacation during any one of the quarters or trimesters instead of during the summer. (2) Medical illness. If the student is compelled to reduce or interrupt a full course of study due to an illness or medical condition and the student presents to the responsible officer a written statement from a physician requiring or recommending an interruption or reduction in studies. (3) Bona fide academic reason. If the student is compelled to pursue less than a full course of study for a term and the student presents to the responsible officer a written statement from the academic dean or advisor recommending the student to reduce his or her academic load to less than a full course of study due to an academic reason. (4) Non-degree program. If the student is engaged full time in a prescribed course of study in a non-degree program of up to 24 months duration conducted by a post-secondary accredited educational institution. (5) Academic training. If the student is participating in authorized academic training in accordance with paragraph (f) of this section. (6) Final term. If the student needs less than a full course of study to complete the academic requirements in his or her final term. (f) Academic training —(1) Purpose. A student, other than a student intern described in paragraph (i) of this section, may participate in academic training programs during his or her studies, without wages or other remuneration, with the approval of the academic dean or advisor and the responsible officer. (2) Conditions. A student, other than a student intern described in paragraph (i) of this section, may be authorized to participate in academic training programs for wages or other remuneration: (i) During his or her studies; or (ii) Commencing not later than thirty (30) days after completion of his or her studies, if the criteria, time limitations, procedures, and evaluations listed below in paragraphs (f)(3) to (6) are satisfied: (3) Criteria: (i) The student is primarily in the United States to study rather than engage in academic training; (ii) The student is participating in academic training that is directly related to his or her major field of study at the post-secondary accredited educational institution listed on his or her Form DS-2019; (iii) The student is in good academic standing with the post-secondary accredited educational institution; and (iv) The student receives written approval in advance from the responsible officer for the duration and type of academic training. (4) Time limitations. The exchange visitor is authorized to participate in academic training for the length of time necessary to complete the goals and objectives of the training, provided that the amount of time for academic training: (i) Is approved by the academic dean or advisor and approved by the responsible officer; (ii) For undergraduate and pre-doctoral training, does not exceed eighteen (18) months, inclusive of any prior academic training in the United States, or the period of full course of study in the United States, whichever is less; except, additional time for academic training is allowed to the extent necessary for the exchange visitor to satisfy the mandatory requirements of his or her degree program in the United States; (iii) For post-doctoral training, does not exceed a total of thirty-six (36) months, inclusive of any prior academic training in the United States as an exchange visitor, or the period of the full course of study in the United States, whichever is less. (5) Procedures. To obtain authorization to engage in academic training: (i) The exchange visitor must present to the responsible officer a letter of recommendation from the student's academic dean or advisor setting forth: (A) The goals and objectives of the specific academic training program; (B) A description of the academic training program, including its location, the name and address of the training supervisor, number of hours per week, and dates of the training; (C) How the academic training relates to the student's major field of study; and (D) Why it is an integral or critical part of the academic program of the exchange visitor student. (ii) The responsible officer must: (A) Determine if and to what extent the student has previously participated in academic training as an exchange visitor student, in order to ensure the student does not exceed the period permitted in paragraph (f) of this section; (B) Review the letter of recommendation required in paragraph (f)(5)(i) of this section; and (C) Make a written determination of whether the academic training currently being requested is warranted and the criteria and time limitations set forth in paragraph (f)(3) and (4) of this section are satisfied. (6) Evaluation requirements. The sponsor must evaluate the effectiveness and appropriateness of the academic training in achieving the stated goals and objectives in order to ensure the quality of the academic training program. (g) Student employment. Exchange visitor students, other than student interns described in paragraph (i) of this section, may engage in part-time employment when the following criteria and conditions are satisfied. (1) The student employment: (i) Is pursuant to the terms of a scholarship, fellowship, or assistantship; (ii) Occurs on the premises of the post-secondary accredited educational institution the visitor is authorized to attend; or (iii) Occurs off-campus when necessary because of serious, urgent, and unforeseen economic circumstances which have arisen since acquiring exchange visitor status. (2) Exchange visitor students may engage in employment as provided in paragraph (g)(1) of this section if the: (i) Student is in good academic standing at the post-secondary accredited educational institution; (ii) Student continues to engage in a full course of study, except for official school breaks and the student's annual vacation; (iii) Employment totals no more than 20 hours per week, except during official school breaks and the student's annual vacation; and (iv) The responsible officer has approved the specific employment in advance and in writing. Such approval may be valid up to twelve months, but is automatically withdrawn if the student's program is transferred or terminated. (h) Duration of participation —(1) Degree students. Exchange visitor students who are in degree programs may be authorized to participate in the Exchange Visitor Program as long as they are either: (i) Studying at the post-secondary accredited educational institution listed on their Form DS-2019 and are: (A) Pursuing a full course of study as set forth in paragraph (e) of this section, and (B) Maintaining satisfactory advancement towards the completion of their academic program; or (ii) Participating in an authorized academic training program as permitted in paragraph (f) of this section. (2) Non-degree students. Exchange visitor students who are in non-degree programs may be authorized to participate in the Exchange Visitor Program for up to 24 months. Such students must be: (i) Studying at the post-secondary accredited educational institution listed on their Form DS-2019 and are: (A) Participating full-time in a prescribed course of study; and (B) Maintaining satisfactory advancement towards the completion of their academic program; or (ii) Participating in an authorized academic training program as permitted in paragraph (f) of this section; (3) Student Interns. Exchange visitor student interns participating in a student internship program may be authorized to participate in the Exchange Visitor Program for up to 12 months for each degree/major as permitted in paragraph (i) of this section as long as they are: (i) Engaged full-time in a student internship program sponsored by the post-secondary accredited educational institution which issued Form DS-2019; and (ii) Maintains satisfactory advancement towards the completion of their student internship program. (i) Student Interns. The student intern is a foreign national enrolled in an accredited post-secondary educational institution outside the United States and is participating in a student internship program that will fulfill the educational objectives for their current degree program at their home institution, and meets the following requirements: (1) Criteria. (i) In addition to satisfying the general requirements set forth in § 62.10(a), sponsors must ensure that student interns have verifiable English language skills sufficient to function on a day-to-day basis in their training environment. English language proficiency must be verified by a recognized English language test, by signed documentation from an academic institution or English language school, or through an interview conducted by the sponsor or a third party in-person, by videoconference, or by web camera. (ii) The student intern is primarily in the United States to engage in a student internship program rather than to engage in employment or provide services to an employer; (iii) The student intern has been accepted into a student internship program at the post-secondary accredited educational institution listed on his or her Form DS-2019; (iv) The student intern is in good academic standing with the post-secondary educational institution in which he or she is enrolled outside the United States; and (v) The student intern will return to the academic program in the educational institution abroad after completion of the student internship program to fulfill a degree requirement. (2) Program requirements. In addition to the requirements set forth in Subpart A, sponsors must ensure that: (i) They do not issue Forms DS-2019 to potential participants in student internship programs until they secure placements for student interns and complete and secure requisite signatures on Form DS-7002 (T/IPP); (ii) Student interns have sufficient finances to support themselves and their dependents for their entire stay in the United States, including housing and living expenses; and (iii) The student internship program exposes participants to American techniques, methodologies, and technology and expands upon the participants' existing knowledge and skills. Programs must not duplicate the student intern's prior experience received previously. (3) Obligations of Student Internship Program Sponsors. (i) Sponsors designated by the Department to administer student internship programs must: (A) Ensure that the student internship programs are full-time (minimum of 32 hours a week); and (B) Ensure that any host organizations and third parties involved in the recruitment, selection, screening, placement, orientation, evaluation for, or the provision of student internship programs are sufficiently educated on the goals, objectives, and regulations of the Exchange Visitor Program and adhere to all regulations set forth in this Part as well as all additional terms and conditions governing Exchange Visitor Program administration that the Department may from time to time impose. (ii) Sponsors must ensure that they or any host organization acting on the sponsor's behalf: (A) Have sufficient resources, plant, equipment, and trained personnel available to provide the specified student internship program; (B) Do not displace full- or part-time or temporary or permanent American workers or serve to fill a labor need and ensure that the positions that student interns fill exist solely to assist student interns in achieving the objectives of their participation in student internship programs; and (C) Certify that student internship programs in the field of agriculture meet all the requirements of the Fair Labor Standards Act, as amended (29 U.S.C. 201 et seq. ) and the Migrant and Seasonal Agricultural Worker Protection Act, as amended (29 U.S.C. 1801 et seq. ). (iii) Screening and Vetting Host Organizations. Sponsors must adequately screen all potential host organizations at which a student intern will be placed by obtaining the following information: (A) The Dun & Bradstreet identification number (unless the host organization is an academic institution, government entity, or family farm); (B) Employer Identification Number (EIN) used for tax purposes; (C) Verification of telephone number, address, and professional activities via advertising, brochures, Web site, and/or feedback from prior participants; and (D) Verification of Workman's Compensation Insurance Policy; and (iv) Site Visits. Sponsors must conduct site visits of host organizations that have not previously participated successfully in the sponsor's student internship programs and that have fewer than 25 employees or less than three million dollars in annual revenue. Placements at academic institutions or at Federal, State, or local government offices are specifically excluded from this requirement. The purpose of the site visits is for the sponsors to ensure that host organizations possess and maintain the ability and resources to provide structured and guided work-based learning experiences according to the individualized T/IPPs and that host organizations understand and meet their obligations set forth in this part. (4) Use of third parties. Sponsors may engage third parties (including, but not limited to host organizations, partners, local businesses, governmental entities, academic institutions, and other foreign or domestic agents) to assist them in the conduct of their designated student internship programs. Such third parties must have an executed written agreement with the sponsor to act on behalf of the sponsor in the conduct of the sponsor's program. This agreement must outline the full relationship between the sponsor and third party on all matters involving the administration of their exchange visitor program. A sponsor's use of a third party does not relieve the sponsor of its obligations to comply with and to ensure third party compliance with Exchange Visitor Program regulations. Any failure by any third party to comply with the regulations set forth in this Part or with any additional terms and conditions governing Exchange Visitor Program administration that the Department may from time to time impose will be imputed to the sponsor. (5) Evaluation requirements. In order to ensure the quality of student internship programs, sponsors must develop procedures for evaluating all student interns. All required evaluations must be completed prior to the conclusion of a student internship program, and the student interns and their immediate supervisors must sign the evaluation forms. For programs exceeding six months' duration, at a minimum, midpoint and concluding evaluations are required. For programs of six months or less, at a minimum, concluding evaluations are required. Sponsors must retain student intern evaluations (electronic or hard copy) for a period of at least three years following the completion of each student internship program. (6) Employment, wages, or remuneration. A student intern is permitted to engage in full-time employment during the student internship program as outlined on their T/IPP, with or without wages or other compensation. Employment is not required for participation in the program. In those cases where the student intern is employed, all employment activities must be approved by the home institution's dean or academic advisor, and the responsible officer. (7) Training/Internship Placement Plan (Form DS-7002). (i) Sponsors must fully complete and obtain requisite signatures for a Form DS-7002 for each student intern before issuing a Form DS-2019. Sponsors must provide each signatory an executed copy of the Form DS-7002. Upon request, student interns must present their fully executed Form DS-7002 to a Consular Official during their visa interview. (ii) To further distinguish between work-based learning for student interns, which is permitted, and ordinary employment or unskilled labor which are not, all T/IPPs must: (A) State the specific goals and objectives of the student internship program (for each phase or component, if applicable); (B) Detail the knowledge, skills, or techniques to be imparted to the student intern (for each phase or component, if applicable); and (C) Describe the methods of performance evaluation and the frequency of supervision (for each phase or component, if applicable). (8) Program Exclusions. Sponsors designated by the Department to administer student internship programs must not: (i) Place student interns in unskilled or casual labor positions, in positions that require or involve child care or elder care, positions in the field of aviation, or in clinical or any other kind of work that involves patient care or contact, including any work that would require student interns to provide therapy, medication, or other clinical or medical care ( e.g. , sports or physical therapy, psychological counseling, nursing, dentistry, veterinary medicine, social work, speech therapy, or early childhood education); (ii) Place student interns in positions, occupations, or businesses that could bring the Exchange Visitor Program or the Department into notoriety or disrepute; or (iii) Engage or otherwise cooperate or contract with a staffing/employment agency to recruit, screen, orient, place, evaluate, or train student interns, or in any other way involve such agencies in an Exchange Visitor Program student internship program. (iv) Designated sponsors must ensure that the duties of student interns as outlined in the T/IPPs will not involve more than 20 percent clerical work, and that all tasks assigned to student interns are necessary for the completion of student internship program assignments. (v) Sponsors must also ensure that all “Hospitality and Tourism” student internship programs of six months or longer contain at least three departmental or functional rotations. Dated: May 18, 2007. Stanley S. Colvin, Director, Office of Exchange Coordination and Designation, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. E7-10606 Filed 6-4-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration 23 CFR Part 661 [FHWA Docket No. FHWA-2007-27536] RIN 2125-AF20 Indian Reservation Road Bridge Program AGENCY: Federal Highway Administration (FHWA), DOT. ACTION: Notice of proposed rulemaking (NPRM); request for comments. SUMMARY: Section 1119 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59, 119 Stat. 1144) makes changes to the Indian Reservation Road Bridge Program (IRRBP). It amends the existing IRRBP by establishing new policies and provisions. In addition, it authorizes $14 million of IRRBP funds per year for the replacement or rehabilitation of structurally deficient or functionally obsolete Indian Reservation Road (IRR) bridges. In accordance with these changes, the FHWA, with input and recommendations from the Bureau of Indian Affairs (BIA) and the Indian Reservation Roads Coordinating Committee (IRRCC), is proposing funding distribution procedures for BIA owned and non-BIA owned IRR bridge projects. The proposed changes allow funding for preliminary engineering (PE), construction engineering (CE), and construction for the replacement or rehabilitation of structurally deficient or functionally obsolete IRR bridges. DATES: Comments must be received on or before August 6, 2007. Late-filed comments will be considered to the extent practicable. ADDRESSES: Mail or hand deliver comments to the U.S. Department of Transportation, Dockets Management Facility, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590, or submit electronically at http://dms.dot.gov/submit or fax comments to (202) 493-2251. Alternatively, comments may be submitted to the Federal eRulemaking portal at http://www.regulations.gov. All comments should include the docket number that appears in the heading of this document. All comments received will be available for examination and copying at the above address from 9 a.m. to 5 p.m., e.t., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped postcard or you may print the acknowledgment page that appears after submitting comments electronically. Anyone is able to search the electronic form of all comments in any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, or labor union). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70, Pages 19477-78) or you may visit http://dms.dot.gov. FOR FURTHER INFORMATION CONTACT: Mr. Robert Sparrow, Federal Lands Highway, (202) 366-9483; or Ms. Vivian Philbin, Federal Lands Highway Counsel, (720) 963-3445; 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 You may submit or retrieve comments online through the Document Management System (DMS) at: http://dms.dot.gov/submit. It is available 24 hours each day, 365 days each year. Please follow the instructions online for more information and help. 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 and the Government Printing Office's Web page at: http://www.access.gpo.gov/nara. Background The Transportation Equity Act for the 21st Century (TEA-21) (Pub. L. 105-178, 112 Stat. 107), established the IRRBP, codified at 23 U.S.C. 202(d)(4)(B), under which a minimum of $13 million of IRR Program funds was set aside for a nationwide priority program for improving deficient IRR bridges. On May 8, 2003, the FHWA published a final rule for the IRRBP at 68 FR 24642 (23 CFR 661). This present rulemaking is necessary due to recent legislative changes in section 1119 of SAFETEA-LU (Pub. L. 109-59, 119 Stat. 1144). Section 1119 of SAFETEA-LU authorizes $14 million per year for fiscal years 2005 through 2009 from the Highway Trust Fund for the IRRBP to carry out PE, CE, and construction to replace or rehabilitate structurally deficient or functionally obsolete IRR bridges. Pursuant to these new statutory requirements, the FHWA developed proposed amendments to the existing IRRBP regulation. These amendments were distributed to the IRRCC for its review and comment prior to this publication. The IRRCC was established under 25 CFR part 170 by the Secretaries of the Interior and Transportation, to provide input and recommendation to BIA and FHWA in developing IRR Program policies and procedures and to supplement government-to-government consultation by coordinating and obtaining input from Tribes, BIA, and FHWA. The IRRCC consists of a primary and alternate Tribal representative from each of the 12 BIA Regions, along with 2 non-voting Federal representatives (one each from BIA and FHWA). The proposed changes were discussed at several IRRCC meetings and in detail with the IRRCC Funding Workgroup. The following information highlights the major issues in the discussion at several IRRCC meetings: 1. First Come, First Serve Basis —This is the present funding methodology of the IRRBP. The IRRCC's position is that this method only works if there are sufficient funds. The IRRCC recommends using the scoring matrix method similar to the IRR High Priority Project (HPP) program in prioritizing the applications for bridge funding as an alternate method. Although the IRRCC believes this method would provide IRRBP funds to the project that has been rated as having the greatest need, the FHWA believes that its current practice has worked well in equitably addressing bridge rehabilitation and replacement projects in the past. 2. PE and Construction Costs —The IRRCC recommends that the set-aside for PE funds should be up to 15 percent of the annual IRRBP allocation. It further recommends that the cost contribution for BIA owned and non-BIA owned IRR bridges should be up to $150,000 for each project. The FHWA agrees with this recommendation, and proposes to make these changes. For construction, the IRRCC recommends that the funding ceiling for non-BIA owned bridge projects should be retained at $1,500,000 per project to meet the rising cost of construction. After reviewing the regulations and the past history and project size of non-BIA owned bridge projects funded under this program, the FHWA proposes to limit the funding for those construction projects to $1,000,000 in order to maximize the number of bridge projects funded. 3. The use of IRR Construction Funds on IRRBP Projects —The IRRCC requests a clear explanation as to how a Tribe may reimburse its IRR construction funds if said funds are used to finance IRRBP projects in advance of receipt of IRRBP funds. This has been included in the proposed changes to the regulation. 4. Removal of historic bridges —The FHWA proposes to clarify that existing IRR bridges replaced under the IRRBP must be taken completely out of service and removed from the IRR inventory. This is done so that in the future only the new bridge will be eligible for IRRBP fund consideration. However, the IRRCC requests and the FHWA agrees to propose to allow a Tribe the ability to request a special exemption, from BIADOT, regarding the “removal from service” requirement if the bridge is considered historic. Section-by-Section Discussion of the Proposed Amendments Descriptions of the regulatory changes proposed in this part are set forth below. All members of the public who are affected by the amendments to the regulation are encouraged to submit comments in writing. Comments from interested Tribal members are particularly requested. We have made several minor grammatical changes, such as shortening sentences for clarity, which will not change the meaning or intent of the regulation. These minor changes are not addressed in the Section-by-Section discussion. Who must comply with this regulation? (661.3) The requirement for a set of plans, specifications, and estimates from a public authority has been moved to 661.27 for clarification purposes. We propose to include preliminary engineering (PE) as an eligible activity, as established in the section 1119(g) of SAFETEA-LU. What definitions apply to this regulation? (661.5) We propose to add the following definitions in this section: Approach Roadway —the FHWA proposes to add this definition in order to clarify what is eligible in section 661.51. Life Cycle Cost Analysis (LCCA) —the FHWA proposes to add this definition in order to clarify eligibility for rehabilitation in section 661.21. National Bridge Inventory (NBI) —the FHWA proposes to add this definition in order to clarify eligibility requirements in section 661.17. Plans, Specifications, and Estimate (PS&E) —the FHWA proposes to add this definition in order to clarify what is required for a complete application package as set forth in section 661.27. Preliminary Engineering —the FHWA proposes to add this definition because this is now an eligible activity for this program as set forth in section 1119(g) of SAFETEA-LU. Structure Inventory and Appraisal (SI&A) —the FHWA proposes to add definition in order to clarify what is required for a complete application package as set forth in sections 661.25 and 661.27. What is the IRRBP? (661.7) This section has been modified to delete obsolete language about the annual funding of the IRRBP program. Section 1119(g) of SAFETEA-LU changed the annual funding amount provided to this program. However, the FHWA proposes to delete mention of specific funding amounts in this section, and has instead stated the total funding available in section 661.9. What is the total funding available for the IRRBP? (661.9) The FHWA proposes to modify this section to reflect the most recent funding amounts authorized by section 1119(g) of SAFETEA-LU. What are the eligible activities for IRRBP funds? (661.15) The FHWA proposes to consolidate the eligibility activities for IRRBP funds into one section. This section also proposes to add preliminary engineering and the demolition of old bridges as new eligible items. What are the criteria for bridge eligibility? (661.17) The FHWA proposes to modify this section to eliminate physical deterioration as a criteria for eligibility for this program. This term does not appear in section 1119(g) of SAFETEA-LU and as such we are proposing to delete it from the regulation. When is a bridge eligible for replacement? (661.19) The FHWA proposes to clarify in this section that existing IRR bridges replaced under the IRRBP must be taken completely out of service and removed from the IRR inventory. This is done so that in the future, only the new bridge will be eligible for IRRBP fund consideration. However, the IRRCC requests and the FHWA agrees to propose to allow a Tribe the ability to request a special exemption, from BIADOT, regarding the “removal from service” requirement if the bridge is considered historic. When is a bridge eligible for rehabilitation? (661.21) The FHWA proposes to remove the word “would” from the criteria to clarify eligibility for bridge replacement. How will a bridge project be programmed for funding once eligibility has been determined? (661.23) This section explains the priority process for both BIA and non-BIA owned bridges as well as the separate queues for both construction and preliminary engineering within both categories of bridges. What does a complete application package for PE consist of and how does the project receive funding? (661.25) This is a new section that we propose to include in the regulation, which describes the requirements for submitting a complete application package for PE. The complete application packages would be placed in the queues (BIA or non-BIA owned bridges) after receipt by FHWA. Incomplete application packages would be disapproved and returned for revision and resubmission along with a notation providing the reason for disapproval. Funding for the approved eligible projects on the queues will be made available to the Tribes or the Secretary of the Interior upon availability of program funding at FHWA. What does a complete application package for construction consist of and how does the project receive funding? (661.27) We propose to include in this section that all complete application packages would be placed in the queues (BIA or non-BIA owned bridges). All environmental and archeological clearances and complete grants of public rights-of-way must be acquired prior to submittal of the construction application package. Incomplete application packages would be disapproved and returned for revision and resubmission along with a notation providing the reason for disapproval. Funding for the approved eligible projects on the queues will be made available to the Tribes or the Secretary of the Interior upon availability of program funding at FHWA. How does ownership impact project selection? (661.29) The FHWA proposes to maximize the use of IRRBP funds for BIA owned bridges. Up to 80 percent of the available funding made available for PE and construction in any fiscal year will be eligible for use on BIA owned IRR bridges. The remaining 20 percent of IRRBP funding in any fiscal year will be made available for PE and construction for use on non-BIA owned IRR bridges. Each fiscal year the FHWA will review the projects awaiting funding and may shift funds between BIA owned and non-BIA owned bridge projects so as to maximize the number of projects funded and the overall effectiveness of the program. Do IRRBP projects have to be listed on an approved IRR TIP? (661.31) The FHWA proposes to change the language of this section to properly identify which Transportation Improvement Program (TIP) is used for the approved bridge projects. What percentage of IRRBP funding is available for PE and construction? (661.33) FHWA proposes to include this section in order to identify the amount of funding that will be made available for the new eligible item of preliminary engineering. The amount recommended was developed in consultation with the IRRCC and represents the average costs of preliminary engineering on bridge projects. The remaining funding is made available for construction. What percentage of IRRBP funding is available for use on BIA owned IRR bridges and non-BIA owned IRR bridges? (661.35) The FHWA proposes to utilize the same funding distribution, i.e. , up to 80 percent of the available annual funds, for BIA owned bridge projects with the remaining funds utilized for non-BIA owned bridges. After consultation with the IRRCC, FHWA is proposing that the FHWA have the ability to review the queue of projects awaiting funding at various times during the fiscal year, and shift funds between BIA owned and non-BIA owned bridge projects in order to maximize the number of projects funded. What are the funding limitations on individual IRRBP projects? (661.37) The FHWA proposes to reduce the funding ceiling for construction on non-BIA owned bridge projects to $1,000,000. The FHWA reviewed the history of the IRRBP and determined that since 1998, over 100 non-BIA owned bridge projects have been funded with this program. For these non-BIA owned bridge projects, the average project size was less than $600,000 and more than 75 percent were funded at a level below the proposed $1,000,000 threshold. In addition, other sources of funds are available for non-BIA owned bridge projects. Additionally, FHWA proposes to limit the amount of funding available for preliminary engineering to $150,000 per project. This recommendation is based on the historical size of the bridge projects previously funded under this program and assumes a typical PE cost of around 15 to 20 percent of a project's construction cost. The IRRCC recommends, and FHWA is proposing, a revision that allows a Tribe to request additional funds above the referenced thresholds by submitting a written justification for consideration to FHWA. The approval of the requests would be considered on a case-by-case basis. How are project cost overruns funded? (661.39) The FHWA proposes that if a request for additional funding is approved by the FHWA, the request would be placed at the top of the appropriate queue. Because an ongoing construction project would be costly to stop and then remobilize, a request to fund a contract modification will have a higher priority than a request for additional funding for a project award. Additional funds could also be made available from a Tribe's existing IRR Program share. Can other sources of funds be used to finance a queued project in advance of receipt of IRRBP funds? (661.43) The FHWA proposes to change the phrasing of this section for clarification purposes and to identify that if IRR Program construction funds are used for this purpose, the funds must be identified on an FHWA approved IRR TIP prior to their expenditure. What happens when IRRBP funds cannot be obligated by the end of the fiscal year? (661.45) In this new section we propose that IRRBP funds provided to a project and not obligated at the end of the fiscal year must be returned to the FHWA. The funds will be re-allocated to BIA the following fiscal year and would require a justification for the failure to obligate in the previous year. Can IRRBP funds be spent on Interstate, State Highway, and Toll Road IRR bridges? (661.49) The FHWA proposes to add this section in order to clarify that bridges on all types of routes that are included in the IRR Inventory are eligible for funding under this program. Can IRRBP funds be used for the approach roadway to a bridge? (661.51) The FHWA proposes to include the cost associated with the approach roadway work to be eligible for IRRBP funds. The limit of approach roadway work would be limited to a nominal amount of work, sufficient to connect the new facility to the existing roadway or to return the gradeline to an attainable touchdown point in accordance with good design practice. Long approach fills, causeways, connecting roadways, interchanges, ramps, and other extensive structures, when constructed beyond an attainable touchdown point, would not be eligible for IRRBP funds. What standards should be used for bridge design? (661.53) The FHWA proposes to include this new section in order to clarify the design standards that must be met in the design of bridges being funded under this program. How are BIA and Tribal owned bridges inspected? (661.55) The FHWA proposes to include this new section in order to clarify the procedures that must be followed when formal bridge inspections are carried out. What should be done with a deficient BIA owned IRR bridge if the Indian Tribe does not support the project? (661.59) The FHWA proposes to include this new section in order to clarify the actions that should be taken when a deficient bridge is identified and not scheduled for improvement. Distribution Table For ease of reference, distribution and derivation tables are provided for the current sections and the new sections, as follows: Old section New section 661.1 661.1. 661.3 661.3—Revised. 661.5 661.5—Revised. 661.7 661.7—Revised. 661.9 661.23—Redesignated and Revised. 661.11 661.41—Redesignated and Revised. 661.13 Removed. 661.15 661.9—Redesignated. 661.17 661.11—Redesignated. 661.19 Removed. 661.21 661.13—Redesignated. 661.23 661.15—Redesignated and Revised. 661.25 661.17—Redesignated and Revised. 661.27 661.19—Redesignated and Revised. 661.29 661.21—Redesignated and Revised. 661.31 661.29—Redesignated and Revised. 661.33 661.31—Redesignated and Revised. 661.35 661.35—Revised. 661.37 661.37—Revised. 661.39 Removed. 661.41 661.27—Redesignated and Revised. 661.43 Removed. 661.45 661.57—Redesignated. 661.47 661.39—Redesignated and Revised. 661.49 661.43—Redesignated and Revised. 661.51 661.47—Redesignated and Revised. None 661.25—Added. None 661.33—Added. None 661.45—Added. None 661.49—Added. None 661.51—Added. None 661.53—Added. None 661.55—Added. None 661.59—Added. Derivation Table New section Old section 661.1 661.1. 661.3 661.3. 661.5 661.5. 661.7 661.7. 661.9 661.15. 661.11 661.17. 661.13 661.21. 661.15 661.23. 661.17 661.25. 661.19 661.27. 661.21 661.29. 661.23 661.9. 661.25 None. 661.27 661.41. 661.29 661.31. 661.31 661.33. 661.33 None. 661.35 661.35. 661.37 661.37. 661.39 661.47. 661.41 661.11. 661.43 661.49. 661.45 None. 661.47 661.51. 661.49 None. 661.51 None. 661.53 None 661.55 None. 661.57 661.45. 661.59 None. Rulemaking Analyses and Notices All comments received before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, the FHWA will also continue to file relevant information in the docket as it becomes available after the comment period closing date, and interested persons should continue to examine the docket for new material. A final rule may be published at any time after close of the comment period. Executive Order 12866 (Regulatory Planning and Review) and USDOT Regulatory Policies and Procedures The FHWA has determined preliminarily that this action would not be a significant regulatory action within the meaning of Executive Order 12866 and would not be significant within the meaning of U.S. Department of Transportation regulatory policies and procedures. It is anticipated that the economic impact of this rulemaking would be minimal. These proposed changes would not adversely affect, in a material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and would not 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) the FHWA has evaluated the effects of this proposed action on small entities and has determined that the proposed action would not have a significant economic impact on a substantial number of small entities. This proposed action would amend the existing regulations pursuant to section 1119 of SAFETEA-LU and would not fundamentally alter the funding available for the replacement or rehabilitation of structurally deficient or functionally obsolete IRR bridges. For these reasons, 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 proposed rule would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). This proposed 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, tribal governments and the private sector. Executive Order 13132 (Federalism Assessment) This proposed action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, and the FHWA has determined preliminarily that this proposed action would not have sufficient federalism implications to warrant the preparation of a federalism assessment. The FHWA has also determined that this proposed action would not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions. Executive Order 13175 (Tribal Consultation) The FHWA met with the IRRCC at three separate meetings in; Tulsa, Oklahoma, in February 2006; Denver, Colorado, in March 2006; and Hinckley, Minnesota, in August 2006, to jointly review this proposed regulation and provide the IRRCC with the opportunity to ask questions and make recommendations. The IRRCC was established under 25 CFR part 170 by the Secretaries of the Interior and Transportation, to provide input and recommendation to BIA and FHWA in developing IRR Program policies and procedures and to supplement government-to-government consultation by coordinating and obtaining input from Tribes, BIA, and FHWA. The IRRCC consists of a primary and alternate Tribal representative from each of the 12 BIA Regions, along with 2 non-voting Federal representatives (one each from BIA and FHWA). The proposed regulation was first distributed to the IRRCC at the Tulsa meeting referenced above. The IRRCC then met in a special meeting in Denver, Colorado, specifically to review the regulation and develop recommendations for the FHWA rulemaking. The funding workgroup of the IRRCC was assigned the task of carrying forth the recommendations to FHWA. In Hinckley, Minnesota, the FHWA met with the funding workgroup and together they reviewed the comments. This regulation reflects the results of the IRRCC input. All aspects of the regulation were reviewed by the IRRCC and the major items of discussion are listed in the background section of this regulation. 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. 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. Accordingly, the FHWA solicits comments on this issue. 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 proposal does not contain collection of information requirements for the purposes of the PRA. 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 proposed action would not cause any environmental risk to health or safety that might disproportionately affect children. Executive Order 12630 (Taking of Private Property) The FHWA has analyzed this proposed rule under Executive Order 12630, Governmental Actions and Interface with Constitutionally Protected Property Rights. The FHWA does not anticipate that this proposed action would affect a taking of private property or otherwise have taking implications under Executive Order 12630. National Environmental Policy Act The agency has analyzed this proposed action for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has determined that this proposed action would not have any effect on the quality of the environment. 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 661 Indian Reservation Road Bridge Program. Issued on: May 15, 2007. J. Richard Capka, Federal Highway Administrator. In consideration of the foregoing, the FHWA proposes to amend title 23, Code of Federal Regulations, by revising part 661 to read as set forth below: PART 661—INDIAN RESERVATION ROAD BRIDGE PROGRAM Sec. 661.1 What is the purpose of this regulation? 661.3 Who must comply with this regulation? 661.5 What definitions apply to this regulation? 661.7 What is the IRRBP? 661.9 What is the total funding available for the IRRBP? 661.11 When do IRRBP funds become available? 661.13 How long are these funds available? 661.15 What are the eligible activities for IRRBP funds? 661.17 What are the criteria for bridge eligibility? 661.19 When is a bridge eligible for replacement? 661.21 When is a bridge eligible for rehabilitation? 661.23 How will a bridge project be programmed for funding once eligibility has been determined? 661.25 What does a complete application package for PE consist of and how does the project receive funding? 661.27 What does a complete application package for construction consist of and how does the project receive funding? 661.29 How does ownership impact project selection? 661.31 Do IRRBP projects have to be listed on an approved IRR TIP? 661.33 What percentage of IRRBP funding is available for PE and construction? 661.35 What percentage of IRRBP funding is available for use on BIA owned IRR bridges and non-BIA owned IRR bridges? 661.37 What are the funding limitations on individual IRRBP projects? 661.39 How are project cost overruns funded? 661.41 After a bridge project has been completed (either PE or construction) what happens with the excess or surplus funding? 661.43 Can other sources of funds be used to finance a queued project in advance of receipt of IRRBP funds? 661.45 What happens when IRRBP funds cannot be obligated by the end of the fiscal year? 661.47 Can bridge maintenance be performed with IRRBP funds? 661.49 Can IRRBP funds be spent on Interstate, State Highway, and Toll Road IRR bridges? 661.51 Can IRRBP funds be used for the approach roadway to a bridge? 661.53 What standards should be used for bridge design? 661.55 How are BIA and Tribal owned IRR bridges inspected? 661.57 How is a list of deficient bridges to be generated? 661.59 What should be done with a deficient BIA owned IRR bridge if the Indian Tribe does not support the project? Authority: 23 U.S.C. 120(j) and (k), 202, and 315; Section 1119 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59, 119 Stat. 1144); and 49 CFR 1.48. § 661.1 What is the purpose of this regulation? The purpose of this regulation is to prescribe policies for project selection and fund allocation procedures for administering the Indian Reservation Road Bridge Program (IRRBP). § 661.3 Who must comply with this regulation? Public authorities must comply to participate in the IRRBP by applying for preliminary engineering (PE), construction, and construction engineering (CE) activities for the replacement or rehabilitation of structurally deficient and functionally obsolete Indian Reservation Road (IRR) bridges. § 661.5 What definitions apply to this regulation? The following definitions apply to this regulation: Approach roadway means the portion of the highway immediately adjacent to the bridge that affects the geometrics of the bridge, including the horizontal and vertical curves and grades required to connect the existing highway alignment to the new bridge alignment using accepted engineering practices and ensuring that all safety standards are met. Construction engineering (CE) is the supervision, inspection, and other activities required to ensure the project construction meets the project's approved acceptance specifications, including but not limited to: additional survey staking functions considered necessary for effective control of the construction operations; testing materials incorporated into construction; checking shop drawings; and measurements needed for the preparation of pay estimates. Functionally obsolete (FO) is the state in which the deck geometry, load carrying capacity (comparison of the original design load to the State legal load), clearance, or approach roadway alignment no longer meets the usual criteria for the system of which it is an integral part. Indian Reservation Road (IRR) means a public road that is located within or provides access to an Indian reservation or Indian trust land or restricted Indian land that is not subject to fee title alienation without the approval of the Federal government, or Indian and Alaska Native villages, groups, or communities in which Indians and Alaska Natives reside, whom the Secretary of the Interior has determined are eligible for services generally available to Indians under Federal laws specifically applicable to Indians. Indian reservation road bridge means a structure located on an IRR, including supports, erected over a depression or an obstruction, such as water, a highway, or a railway, and having a track or passageway for carrying traffic or other moving loads, and having an opening measured along the center of the roadway of more than 20 feet between undercopings of abutments or spring lines of arches, or extreme ends of the openings for multiple boxes; it may also include multiple pipes, where the clear distance between openings is less than half of the smaller contiguous opening. Life cycle cost analysis (LCCA) means a process for evaluating the total economic worth of a usable project segment by analyzing initial costs and discounted future costs, such as maintenance, user costs, reconstruction, rehabilitation, restoring, and resurfacing costs, over the life of the project segment. National Bridge Inventory (NBI) means the aggregation of structure inventory and appraisal data collected to fulfill the requirements of the National Bridge Inspection Standards (NBIS). Plans, specifications and estimates (PS&E) means construction drawings, compilation of provisions, and construction project cost estimates for the performance of the prescribed scope of work. Preliminary engineering (PE) means planning, survey, design, engineering, and preconstruction activities (including archaeological, environmental, and right-of-way activities) related to a specific bridge project. Public authority means a Federal, State, county, town, or township, Indian tribe, municipal or other local government or instrumentality with authority to finance, build, operate, or maintain toll or toll-free facilities. Public road means any road or street under the jurisdiction of and maintained by a public authority and open to public travel. Structurally deficient (SD) bridge means a bridge that has been restricted to light vehicles only, is closed, or requires immediate rehabilitation to remain open. Structure Inventory and Appraisal (SI&A) Sheet means the graphic representation of the data recorded and stored for each NBI record in accordance with the Recording and Coding Guide for the Structure Inventory and Appraisal of the Nation's Bridges (Report No. FHWA-PD-96-001). Sufficiency rating (SR) means the numerical rating of a bridge based on its structural adequacy and safety, essentiality for public use, and its serviceability and functional obsolescence. § 661.7 What is the IRRBP? The IRRBP, as established under 23 U.S.C. 202(d)(4), is a nationwide priority program for improving structurally deficient and functionally obsolete IRR bridges. § 661.9 What is the total funding available for the IRRBP? The statute authorizes $14 million to be appropriated from the Highway Trust Fund in Fiscal Years 2005 through 2009. § 661.11 When do IRRBP funds become available? IRRBP funds are authorized at the start of each fiscal year but are subject to Office of Management and Budget apportionment before they become available to FHWA for further distribution. § 661.13 How long are these funds available? IRRBP funds for each fiscal year are available for obligation for the year authorized plus three years (a total of four years). § 661.15 What are the eligible activities for IRRBP funds? (a) IRRBP funds can be used to carry out PE, construction, and CE activities of projects to replace, rehabilitate, seismically retrofit, paint, apply calcium magnesium acetate, sodium acetate/formate or other environmentally acceptable, minimally corrosive anti-icing and deicing compositions, or install scour countermeasures for structurally deficient or functionally obsolete IRR bridges, including multiple pipe culverts. (b) If a bridge is replaced under the IRRBP, IRRBP funds can be also used for the demolition of the old bridge. § 661.17 What are the criteria for bridge eligibility? (a) Bridge eligibility requires the following: (1) Have an opening of 20 feet or more; (2) Be located on an Indian Reservation Road that is included in the IRR inventory; (3) Be unsafe because of structural deficiencies or functional obsolescence; and (4) Be recorded in the NBI maintained by the FHWA. (b) Bridges that were constructed, rehabilitated or replaced in the last 10 years, will be eligible only for seismic retrofit or installation of scour countermeasures. § 661.19 When is a bridge eligible for replacement? To be eligible for replacement, the bridge must be considered structurally deficient or functionally obsolete and have a sufficiency rating less than 50. If bridge replacement occurs under this program, it is required that the original bridge be taken completely out of service and removed from the inventory. If the original bridge is considered historic, it must still be removed from the inventory, however the Tribe is allowed to request an exemption from the BIA Division of Transportation (BIADOT) to allow the bridge to remain in place. § 661.21 When is a bridge eligible for rehabilitation? To be eligible for rehabilitation, the bridge must be considered structurally deficient or functionally obsolete and have a sufficiency rating less than or equal to 80 and greater than 50. The work eligible for a bridge rehabilitation project includes the activities required to improve the sufficiency rating to 80 or greater. A bridge eligible for rehabilitation is eligible for replacement if a life cycle cost analysis shows the cost for bridge rehabilitation exceeds the replacement cost. § 661.23 How will a bridge project be programmed for funding once eligibility has been determined? (a) All projects will be programmed for funding after a completed application package is received and accepted by the FHWA. At that time, the project will be acknowledged as either BIA or non-BIA owned and placed in either a PE or construction queue, listed by date received. These queues form the basis for prioritization for funding. After the IRRBP funding for the FY is used up, a queue for the following FY would be established. (b) In those cases where application packages have arrived at the same time, the packages will be ranked and prioritized based on the following criteria: (1) Bridge sufficiency rating (SR); (2) Bridge status with structurally deficient (SD) having precedence over functionally obsolete (FO); (3) Bridges on school bus routes; (4) Detour length; (5) Average daily traffic; and (6) Truck average daily traffic. § 661.25 What does a complete application package for PE consist of and how does the project receive funding? (a) A complete application package for PE consists of the following: The certification checklist, IRRBP transportation improvement program (TIP), project scope of work, detailed cost for PE, and SI&A sheet. (b) For non-BIA IRR bridges, the application package must also include a tribal resolution supporting the project and identification of the required minimum 20 percent local funding match. (c) The IRRBP projects for PE will be placed in queue and determined as eligible for funding after receipt by FHWA of a complete application package. Incomplete application packages will be disapproved and returned for revision and resubmission along with a notation providing the reason for disapproval. (d) Funding for the approved eligible projects on the queues will be made available to the Tribes or the Secretary of the Interior upon availability of program funding at FHWA. § 661.27 What does a complete application package for construction consist of and how does the project receive funding? (a) A complete application package for construction consists of the following: A copy of the approved PS&E, the certification checklist, SI&A sheet, and IRRBP TIP. For non-BIA IRR bridges, the application package must also include a copy of a letter from the bridge's owner approving the project and its PS&E, a tribal resolution supporting the project, and identification of the required minimum 20 percent local funding match. All environmental and archeological clearances and complete grants of public rights-of-way must be acquired prior to submittal of the construction application package. (b) The IRRBP projects for construction will be placed in queue and determined as eligible for funding after receipt by FHWA of a complete application package. Incomplete application packages will be disapproved and returned for revision and resubmission along with a notation providing the reason for disapproval. (c) Funding for the approved eligible projects on the queues will be made available to the tribes or the Secretary of the Interior upon availability of program funding at FHWA. § 661.29 How does ownership impact project selection? Since the Federal government has both a trust responsibility and owns the BIA bridges on Indian reservations, primary consideration will be given to eligible projects on BIA owned IRR bridges. A smaller percentage of available funds will be set aside for non-BIA IRR bridges, since States and counties have access to Federal-aid and other funding to design, replace and rehabilitate their bridges and that 23 U.S.C. 204(c) requires that IRR funds be supplemental to and not in lieu of other funds apportioned to the State. The program policy will be to maximize the number of IRR bridges participating in the IRRBP in a given fiscal year regardless of ownership. § 661.31 Do IRRBP projects have to be listed on an approved IRR TIP? Yes. All IRRBP projects must be listed on an approved IRR TIP. The approved IRR TIP will be forwarded by FHWA to the respective State for inclusion into its State TIP. § 661.33 What percentage of IRRBP funding is available for PE and construction? Up to 15 percent of the funding made available in any fiscal year will be eligible for PE. The remaining funding in any fiscal year will be available for construction. § 661.35 What percentage of IRRBP funding is available for use on BIA owned IRR bridges and non-BIA owned IRR bridges? (a) Up to 80 percent of the available funding made available for PE and construction in any fiscal year will be eligible for use on BIA owned IRR bridges. The remaining 20 percent of funding in any fiscal year will be made available for PE and construction for use on non-BIA owned IRR bridges. (b) At various time during the fiscal year, FHWA will review the projects awaiting funding and may shift funds between BIA owned and non-BIA owned bridge projects so as to maximize the number of projects funded and the overall effectiveness of the program. § 661.37 What are the funding limitations on individual IRRBP projects? The following funding provisions apply in administration of the IRRBP: (a) An IRRBP eligible BIA owned IRR bridge is eligible for 100 percent IRRBP funding, with a $150,000 maximum limit for PE. (b) An IRRBP eligible non-BIA owned IRR bridge is eligible for up to 80 percent IRRBP funding, with a $150,000 maximum limit for PE and $1,000,000 maximum limit for construction. The minimum 20 percent local match will need to be identified in the application package. IRR construction funds received by a tribe may be used as the local match. (c) Requests for additional funds above the referenced thresholds may be submitted along with the proper justification to FHWA for consideration. The requests will be considered on a case-by-case basis. There is no guarantee for the approval of the request for additional funds. § 661.39 How are project cost overruns funded? (a) A request for additional IRRBP funds for cost overruns on a specific bridge project must be submitted to BIADOT and FHWA for approval. The written submission must include a justification, an explanation as to why the overrun occurred, and the amount of additional funding required with supporting cost data. If approved by FHWA, the request will be placed at the top of the appropriate queue (with a contract modification request having a higher priority than a request for additional funds for a project award) and funding may be provided if available. (b) Project cost overruns may also be funded out of the tribe's regular IRR Program construction funding. § 661.41 After a bridge project has been completed (either PE or construction) what happens with the excess or surplus funding? Since the funding is project specific, once a bridge design or construction project has been completed under this program, any excess or surplus funding is returned to FHWA for use on additional approved deficient IRR bridge projects. § 661.43 Can other sources of funds be used to finance a queued project in advance of receipt of IRRBP funds? Yes. A tribe can use other sources of funds on a project that has been approved for funding and placed on a queue and then be reimbursed when IRRBP funds become available. If IRR Program construction funds are used for this purpose, the funds must be identified on an FHWA approved IRR TIP prior to their expenditure. § 661.45 What happens when IRRBP funds cannot be obligated by the end of the fiscal year? IRRBP funds provided to a project that cannot be obligated by the end of the fiscal year are to be returned to FHWA during August Redistribution. The returned funds will be re-allocated to the BIA the following fiscal year after receipt and acceptance at FHWA from BIA of a formal request for the funds, which includes a justification for the amounts requested and the reason for the failure of the prior year obligation. § 661.47 Can bridge maintenance be performed with IRRBP funds? No. Bridge maintenance repairs, e.g. , guard rail repair, deck repairs, repair of traffic control devices, striping, cleaning scuppers, deck sweeping, snow and debris removal, etc., are not eligible uses of IRRBP funding. The Department of the Interior annual allocation for maintenance and IRR Program construction funds are eligible funding sources for bridge maintenance. § 661.49 Can IRRBP funds be spent on Interstate, State Highway, and Toll Road IRR bridges? Yes. Interstate, State Highway, and Toll Road IRR bridges are eligible for funding as described in § 661.37(b). § 661.51 Can IRRBP funds be used for the approach roadway to a bridge? (a) Yes, cost associated with approach roadway work, as defined in § 661.5 are eligible. (b) Long approach fills, causeways, connecting roadways, interchanges, ramps, and other extensive earth structures, when constructed beyond an attainable touchdown point, are not eligible uses of IRRBP funds. § 661.53 What standards should be used for bridge design? (a) Replacement—A replacement structure must meet the current geometric, construction and structural standards required for the types and volumes of projected traffic on the facility over its design life consistent with 25 CFR part 170, Subpart D, Appendix A and 23 CFR part 625. (b) Rehabilitation—Bridges to be rehabilitated, as a minimum, should conform to the standards of 23 CFR 625, Design Standards for Federal-aid Highways, for the class of highway on which the bridge is a part. § 661.55 How are BIA and Tribal owned IRR bridges inspected? BIA and Tribal owned IRR bridges are inspected in accordance with 25 CFR 170.504-507. § 661.57 How is a list of deficient bridges to be generated? (a) In consultation with the BIA, a list of deficient BIA IRR bridges will be developed each fiscal year by the FHWA based on the annual April update of the NBI. The NBI is based on data from the inspection of all bridges. Likewise, a list of non-BIA IRR bridges will be obtained from the NBI. These lists would form the basis for identifying bridges that would be considered potentially eligible for participation in the IRRBP. Two separate master bridge lists (one each for BIA and non-BIA IRR bridges) will be developed and will include, at a minimum, the following: (1) Sufficiency rating (SR); (2) Status (structurally deficient or functionally obsolete); (3) Average daily traffic (NBI item 29); (4) Detour length (NBI item 19); and (5) Truck average daily traffic (NBI item 109). (b) These lists would be provided by the FHWA to the BIADOT for publication and notification of affected BIA regional offices, Indian tribal governments (ITGs), and State and local governments. (c) BIA regional offices in consultation with ITGs, are encouraged to prioritize the design for bridges that are structurally deficient over bridges that are simply functionally obsolete, since the former is more critical structurally than the latter. Bridges that have higher average daily traffic (ADT) should be considered before those that have lower ADT. Detour length should also be a factor in selection and submittal of bridges, with those having a higher detour length being of greater concern. Lastly, bridges with higher truck ADT should take precedence over those which have lower truck ADT. Other items of note should be whether school buses use the bridge and the types of trucks that may cross the bridge and the loads imposed. § 661.59 What should be done with a deficient BIA owned IRR bridge if the Indian tribe does not support the project? The BIA should notify the tribe and encourage the tribe to develop and submit an application package to FHWA for replacement of the bridge. For safety of the motoring public, if the tribe decides not to pursue the replacement of the bridge, the BIA shall work with the tribe to close the bridge, demolish the bridge and remove it from the IRR inventory in accordance with 25 CFR part 170 (170.813). [FR Doc. E7-9869 Filed 6-4-07; 8:45 am] BILLING CODE 4910-22-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-123365-03] RIN 1545-BC94 Guidance Regarding the Active Trade or Business Requirement Under Section 355(b); Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correction to notice of proposed rulemaking. SUMMARY: This document contains corrections to a notice of proposed rulemaking (REG-123365-03) that was published in the Federal Register on Tuesday, May 8, 2007 (72 FR 26012) providing guidance on issues involving the active trade or business requirement under section 355(b), including guidance resulting from the enactment of section 355(b)(3). FOR FURTHER INFORMATION CONTACT: Russell P. Subin, (202) 622-7790 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The correction notice that is the subject of this document is under section 355(b) of the Internal Revenue Code. Need for Correction As published, the notice of proposed rulemaking (REG-123365-03) contains errors that may prove to be misleading and are in need of clarification. Correction of Publication Accordingly, the publication of proposed rulemaking (REG-123365-03), which was the subject of FR Doc. 07-2269, is corrected as follows: 1. On page 26014, column 2, in the preamble, under the paragraph heading “1. SAG Rule Applicable During the Pre-Distribution Period”, second paragraph of the column, fourth line, the language “members are disregarded and all assets” is corrected to read “members is disregarded and all assets”. 2. On page 26014, column 2, in the preamble, under the paragraph heading “1. SAG Rule Applicable During the Pre-Distribution Period”, second paragraph of the column, eleventh line, the language “a five-year active trade or businesses.” is corrected to read “a five-year active trade or business.”. 3. On page 26015, column 1, in the preamble, under the paragraph heading “3. Acquisitions of Stock in Subsidiary SAG Members”, fifth line of the column, the language “in sections B.4 and C.3.a.ii. of this” is corrected to read “in sections B.4. and C.3.a.ii. of this”. 4. On page 26015, column 1, in the preamble, under the paragraph heading “C. Acquisitions of a Trade or Business” , second line of the paragraph, the language “provide that a trade or business” is corrected to read “provides that a trade or business”. 5. On page 26015, column 3, in the preamble, under the paragraph heading “1. Purpose of Section 355(b)(2)(C) and (D)”, second paragraph of the column, fourth line, the language “using it assets—instead of its stock, or” is corrected to read “using its assets—instead of its stock, or”. 6. On page 26016, column 2, in the preamble, under the paragraph heading “i. Certain Acquisitions by the DSAG or CSAG”, last line of the first paragraph, the language “assets to acquire the trade or business” is corrected to read “assets to acquire the trade or business.”. 7. On page 26016, column 3, in the preamble, under the paragraph heading “ii. Certain Acquisitions by a Distributee Corporation”, tenth line of the paragraph, the language “section A.1 of this preamble, section” is corrected to read “section A.1. of this preamble, section”. 8. On page 26017, column 2, in the preamble, under the paragraph heading “i. Acquisitions in Exchange for Assets”, third paragraph of the column, first line, the language “As discussed in section C.1 of this” is corrected to read “As discussed in section C.1. of this”. 9. On page 26018, column 1, in the preamble, under the paragraph heading “i. Acquisitions in Exchange for Assets”, fourth paragraph of the column, sixth line, the language “and (D) are satisfied. Such an” is corrected to read “and (D) is satisfied. Such an”. 10. On page 26019, column 3, in the preamble, under the paragraph heading “c. Application of Section 355(b)(2)(C) and (D) to Predecessors”, second paragraph of the column, third line, the language “singly-entity for purposes of section” is corrected to read “single-entity for purposes of section”. 11. On page 26025, column 1, in the preamble, under the paragraph heading “J. Additional Requests for Comments” , eleventh line of the column, the language “sections D.1.b. and D.2.c of this” is corrected to read “sections D.1.b. and D.2.c. of this”. 12. On page 26025, column 2, in the preamble, under the paragraph heading “J. Additional Requests for Comments” , fourth line from the bottom of second paragraph, the language “example, § 1.355-3(c) Example ( 9 )” is corrected to read “example, § 1.355-3(c) Example 9”. § 1.355-3 [Corrected] 13. On page 26026, column 2, § 1.355-3(b)(1)(i), lines eight and nine of the paragraph, the language “355(b)(1). Sections 355(b)(2)(A) and (b)(3)(A) provide that a corporation is” is corrected to read “355(b)(1). Section 355(b)(2)(A) and (b)(3)(A) provides that a corporation is”. 14. On page 26026, column 2, § 1.355-3(b)(1)(i), seventh line from the bottom of the paragraph, the language “sections solely as a result of” is corrected to read “section solely as a result of”. 15. On page 26028, column 1, § 1.355-3(b)(4)(i)(A), fourth line of the paragraph, the language “Under sections 355(b)(2)(C) and (b)(3), a” is corrected to read “Under section 355(b)(2)(C) and (b)(3), a”. 16. On page 26028, column 1, § 1.355-3(b)(4)(i)(A), last line of the column, the language “by reasons of such transactions” is corrected to read “by reason of such transactions”. 17. On page 26030, column 2, § 1.355-3(d)(1)(iv), third line, the language “within the meeting of section 368(c).” is corrected to read “within the meaning of section 368(c).”. 18. On page 26031, column 3, § 1.355-3(d)(2) Example 9. (iii), fourth line from the bottom of paragraph, the language “is engaged the active conduct of ATB2.” is corrected to read “is engaged in the active conduct of ATB2.”. 19. On page 26033, column 2, § 1.355-3(d)(2) Example 24., lines six through twelve, the language “Partnership, each of X, Y, and Z satisfy the requirements of paragraph (b)(2)(v)(B) of this section. Accordingly, each of X, Y, and Z are attributed the trade or business assets and activities of Partnership, satisfy the requirements of paragraph (b)(2)(i) of this section, and are engaged in the active” is corrected to read “Partnership, each of X, Y, and Z satisfies the requirements of paragraph (b)(2)(v)(B) of this section. Accordingly, each of X, Y, and Z is attributed the trade or business assets and activities of Partnership, satisfies the requirements of paragraph (b)(2)(i) of this section, and is engaged in the active”. 20. On page 26034, column 1, § 1.355-3(d)(2) Example 27., sixth line from the bottom of paragraph, the language “recognized. Accordingly, if the D were to” is corrected to read “recognized. Accordingly, if D were to”. 21. On page 26034, column 1, § 1.355-3(d)(2) Example 29., seventh line, the language “under section 357(c) gain on the transfer of” is corrected to read “under section 357(c) on the transfer of”. 22. On page 26034, column 2, § 1.355-3(d)(2) Example 32., sixth line from the bottom of paragraph, the language “neither ATB1 nor control of C were acquired” is corrected to read “neither ATB1 nor control of C was acquired”. 23. On page 26034, column 3, § 1.355-3(d)(2) Example 35., second line from the bottom of paragraph, the language “distribution, it can rely on ATB1 to satisfy” is corrected to read “distribution, it could rely on ATB1 to satisfy”. 24. On page 26034, column 3, § 1.355-3(d)(2) Example 36., second line, the language “reorganization and distributions. For more” is corrected to read “ reorganization and distribution. For more”. 25. On page 26035, column 2, § 1.355-3(d)(2) Example 39., fifth line from the bottom of paragraph, the language “The result would also be the same if prior to” is corrected to read “The result would be the same if prior to”. 26. On page 26035, column 2, § 1.355-3(d)(2) Example 40., fourth line from the bottom of paragraph, the language “The result would be the same if P acquired” is corrected to read “The results would be the same if P acquired”. 27. On page 26035, column 3, § 1.355-3(d)(2) Example 42., third line of the column, the language “distributes all the C stock, C could not rely” is corrected to read “distributes all the C stock, C cannot rely”. 28. On page 26036, column 3, § 1.355-3(d)(2) Example 50., fifteenth line from the bottom of paragraph, the language “if X, instead if S, merged into D, S would” is corrected to read “if X, instead of S, merged into D, S would”. LaNita Van Dyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration). [FR Doc. E7-10799 Filed 6-4-07; 8:45 am] BILLING CODE 4830-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 745 [EPA-HQ-OPPT-2005-0049; FRL-8132-7] RIN 2070-AC83 Lead; Renovation, Repair, and Painting Program AGENCY: Environmental Protection Agency (EPA). ACTION: Supplemental Notice of Proposed Rulemaking. SUMMARY: On January 10, 2006, EPA proposed new requirements under the authority of section 402(c)(3) of the Toxic Substances Control Act (TSCA) to reduce exposure to lead hazards created by renovation, repair, and painting activities that disturb lead-based paint in target housing. “Target housing” is defined in TSCA section 401 as any housing constructed before 1978, except housing for the elderly or persons with disabilities (unless any child under age 6 resides or is expected to reside in such housing) or any 0-bedroom dwelling. The 2006 proposal would establish requirements for training renovators and dust sampling technicians; for certifying renovators, dust sampling technicians, and renovation firms; for accrediting providers of renovation and dust sampling technician training; for renovation work practices; and for recordkeeping. That proposal would also allow interested States, Territories, and Indian Tribes the opportunity to apply for and receive authorization to administer and enforce all of the elements of the new renovation requirements. This supplemental notice contains EPA's proposal to add child-occupied facilities to the buildings covered by the 2006 proposal. Child-occupied facilities may be located in public or commercial buildings or in target housing. A child-occupied facility would be defined as a building, or a portion of a building, constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided that each day's visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours. DATES: Comments must be received on or before July 5, 2007. ADDRESSES: Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2005-0049, by one of the following methods: • Federal eRulemaking Portal : http://www.regulations.gov . Follow the on-line instructions for submitting comments. • Mail : Document Control Office (7407M), Office of Pollution Prevention and Toxics (OPPT), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. • Hand Delivery : OPPT Document Control Office (DCO), EPA East Bldg., Rm. 6428, 1201 Constitution Ave., NW., Washington, DC. Attention: Docket ID number EPA-HQ-OPPT-2005-0049. The DCO is open from 8 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The telephone number for the DCO is (202) 564-8930. Such deliveries are only accepted during the DCO's normal hours of operation, and special arrangements should be made for deliveries of boxed information. Instructions : Direct your comments to docket ID number EPA-HQ-OPP-2005-0049. EPA's policy is that all comments received will be included in the docket without change and may be made available on-line at http://www.regulations.gov , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through regulations.gov or e-mail. The regulations.gov website is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm. Docket : All documents in the docket are listed in the docket index available in regulations.gov. To access the electronic docket, go to http://www.regulations.gov , select “Advanced Search,” then “Docket Search.” Insert the docket ID number where indicated and select the “Submit” button. Follow the instructions on the regulations.gov web site to view the docket index or access available documents. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available electronically at http://www.regulations.gov , or, if only available in hard copy, at the OPPT Docket. The OPPT Docket is located in the EPA Docket Center (EPA/DC) at Rm. 3334, EPA West Bldg., 1301 Constitution Ave., NW., Washington, DC. The EPA/DC Public Reading Room hours of operation are 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays. The telephone number of the EPA/DC Public Reading Room is (202) 566-1744, and the telephone number for the OPPT Docket is (202) 566-0280. Docket visitors are required to show photographic identification, pass through a metal detector, and sign the EPA visitor log. All visitor bags are processed through an X-ray machine and subject to search. Visitors will be provided an EPA/DC badge that must be visible at all times in the building and returned upon departure. FOR FURTHER INFORMATION CONTACT: For general information contact : Colby Lintner, Regulatory Coordinator, Environmental Assistance Division (7408M), Office of Pollution Prevention and Toxics, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number: (202) 554-1404; e-mail address: TSCA-Hotline@epa.gov . For technical information contact : Mike Wilson, National Program Chemicals Division (7404T), Office of Pollution Prevention and Toxics, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number: (202) 566-0521; e-mail address: wilson.mike@epa.gov . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you perform renovations of child-occupied facilities for compensation or dust sampling in child-occupied facilities. EPA is proposing to define a child-occupied facility as a building, or a portion of a building, constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided that each day's visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours. Examples of child-occupied facilities are day-care centers, preschools, and kindergarten classrooms. Child-occupied facilities may be located in target housing or in public or commercial buildings. Potentially affected entities may include, but are not limited to: • Building construction (NAICS 236), e.g., single family housing construction, multi-family housing construction, residential remodelers, nonresidential construction. • Specialty trade contractors (NAICS 238), e.g., plumbing, heating, and air-conditioning contractors, painting and wall covering contractors, electrical contractors, finish carpentry contractors, drywall and insulation contractors, siding contractors, tile and terrazzo contractors, glass and glazing contractors. • Real estate (NAICS 531), e.g., lessors of residential and nonresidential buildings, property managers. • Child day care services (NAICS 624410). • Elementary and secondary schools (NAICS 611110), e.g., elementary schools with kindergarten classrooms. • Other technical and trade schools (NAICS 611519), e.g., training providers. • Engineering services (NAICS 541330) and building inspection services (NAICS 541350), e.g., dust sampling technicians. This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. To determine whether you or your business may be affected by this action, you should carefully examine the applicability provisions in Units IV.B. and IV.C. If you have any questions regarding the applicability of this action to a particular entity, consult the technical person listed under FOR FURTHER INFORMATION CONTACT . B. What Should I Consider as I Prepare My Comments for EPA? 1. Submitting CBI . Do not submit this information to EPA through regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. 2. Tips for preparing your comments . When submitting comments, remember to: i. Identify the document by docket ID number and other identifying information (subject heading, Federal Register date and page number). ii. Follow directions. The Agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number. iii. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. iv. Describe any assumptions and provide any technical information and/or data that you used. v. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. vi. Provide specific examples to illustrate your concerns and suggest alternatives. vii. Explain your views as clearly as possible, avoiding the use of profanity or personal threats. viii. Make sure to submit your comments by the comment period deadline identified. II. Background A. What Action is the Agency Taking? EPA is proposing to add child-occupied facilities to the universe of buildings covered by a prior proposal. EPA would apply all of the training, certification, accreditation, work practice, and recordkeeping requirements of the January 10, 2006 proposal (“2006 Proposal”, Ref. 1) to child-occupied facilities. A child-occupied facility would be defined as “a building, or a portion of a building, constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided that each day's visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours.” Examples of child-occupied facilities are day-care centers, preschools, and kindergarten classrooms. Child-occupied facilities may be located in target housing or in public or commercial buildings. The purpose of the 2006 Proposal was to establish new requirements to reduce exposure to lead hazards created by renovation, repair, and painting activities that disturb lead-based paint. The proposal contained requirements for training renovators and dust sampling technicians; certifying renovators, dust sampling technicians, and renovation firms; accrediting providers of renovation and dust sampling technician training; for renovation work practices; and for recordkeeping. These requirements would apply in “target housing,” which is defined in TSCA section 401 as “any housing constructed before 1978, except housing for the elderly or persons with disabilities (unless any child under age 6 resides or is expected to reside in such housing) or any 0-bedroom dwelling.” Initially the rule would apply to all renovations for compensation performed in (1) target housing where a child with an increased blood lead level resides; (2) rental target housing built before 1960; and (3) owner-occupied target housing built before 1960, unless, with respect to owner-occupied target housing, the person performing the renovation obtains a statement signed by the owner-occupant that the renovation will occur in the owner's residence and that no child under age 6 resides there. EPA proposed a subsequent phase-in for target housing built in the years 1960 through 1977, with certain exemptions. The training, certification, accreditation, work practice, and recordkeeping requirements of the 2006 Proposal would apply to all persons who do renovation for compensation, including renovation contractors, maintenance workers in multi-family housing, painters and other specialty trades, with certain exceptions. The 2006 Proposal contains exemptions for owner-occupied target housing where no children under age 6 reside, minor repair and maintenance activities that disrupt two square feet or less of painted surfaces per component, or renovations where specified methods have been used to determine that the areas affected by the renovation are free of lead-based paint. In this document, EPA is proposing to apply these same training, certification, accreditation, work practice, and recordkeeping requirements and exemptions to firms and individuals who perform renovations for compensation in child-occupied facilities. EPA welcomes comment on this supplemental proposal by entities, such as day care providers, elementary schools, and public or commercial building owners, who would be affected by the expanded scope of coverage. EPA intends to review the comments received on this supplementary proposal and then promulgate a final rule addressing both the 2006 Proposal and this proposal. B. What is the Agency's Authority for Taking this Action? These training, certification and accreditation requirements and work practice standards are being proposed pursuant to the authority of TSCA section 402(c)(3), 15 U.S.C. 2682(c)(3), as amended by Title X of the Housing and Community Development Act of 1992, Public Law 102-550 (also known as the Residential Lead-Based Paint Hazard Reduction Act of 1992) (“the Act” or “Title X”). The notification and recordkeeping requirements associated with child-occupied facilities are being proposed pursuant to section 407 of TSCA. The Model State Program and amendments to the regulations on the authorization of State and Tribal programs with respect to renovators and dust sampling technicians are being proposed pursuant to section 404 of TSCA, 15 U.S.C. 2684. III. Introduction A. Reason for this Supplemental Notice On January 10, 2006, EPA issued a notice of proposed rulemaking for requirements to reduce exposure to lead hazards created by renovation, repair, and painting activities that disturb lead-based paint in target housing (Ref. 1). EPA received approximately 250 comments from a wide variety of commenters, including State and local governments, industry groups, advocacy groups, renovation contractors, training providers, and individuals. Twenty-nine of those commenters observed that the proposal did not cover buildings where children under age 6 spend a great deal of time, such as day care centers and schools. Commenters noted that the risk posed to children from lead-based paint hazards in schools and day-care centers is likely to be equal to, if not greater than, the risk posed from these hazards at home. These commenters suggested that EPA expand its proposal to include such places. Several suggested that EPA use the definition of “child-occupied facility” in 40 CFR § 745.223 to define the expanded scope of coverage. EPA believes that the suggestions regarding day care centers and schools have merit. EPA is therefore issuing this supplemental proposal to specifically propose expanding the scope of the renovation, repair and painting program to these facilities. EPA believes that the proposed findings underlying the 2006 Proposal also support the expansion of coverage to child-occupied facilities. B. Development of the Final Rule It is EPA's intention to issue a final rule based on the 2006 Proposal and this supplemental proposal. As EPA moves forward with the development of the final rule, the Agency is considering the comments and information received during the public comment periods in 2006, and expects to consider the comments related to child-occupied facilities and any new information received on this supplemental proposal. In addition, as discussed in the 2006 Proposal, EPA intends to prepare further analyses and updated assessments for the final rule that will use the information received, as well as the data generated by the EPA study “Characterization of Dust Lead Levels after Renovation, Repair, and Painting Activities” (“Dust Study”, Ref. 10), and by the National Association of Home Builders' (NAHB) “Lead Safe Work Practices Survey” (“NAHB Survey”, Ref. 11). EPA will also consider the comments received on proposed work practice standards in light of the results of these studies. EPA is also updating the hazard and exposure assessments it used as a basis for estimating the benefits of the rulemaking. This benefits analysis is part of the economic analysis for the rulemaking. The hazard assessment for the final rule will be based on a hazard assessment that has recently undergone peer review by the Clean Air Science Advisory Committee (CASAC) Lead Review Panel. The revised exposure assessment for the final rule, which will use the data generated by EPA's Dust Study, the NAHB Survey, and other available information, will also undergo a peer review by the CASAC Lead Review Panel. The CASAC, which is comprised of seven members appointed by the EPA Administrator, was established under the Clean Air Act as an independent scientific advisory committee. More information on the CASAC consultation process, along with background documents, is available on EPA's website at http://www.epa.gov/lead/pubs/casac.htm . EPA is not yet able to say with any certainty how the economic analyses or proposed requirements might change for the final rule as a result of the additional analyses underway or planned, or EPA's consideration of comments or new information received on this supplemental proposal. The Agency does, however, expect that changes may occur. C. Previous EPA Rulemakings on Lead-based Paint and Lead-based Paint Hazards in Child-Occupied Facilities In 1996, EPA promulgated the final lead-based paint activities regulations under TSCA section 402(a), codifying them at 40 CFR part 745, subpart L. These regulations were designed to protect the public from the hazards of improperly conducted lead-based paint inspections, risk assessments and abatement projects. The regulation includes: • Training and certification requirements to ensure the proficiency of contractors who offer these services. • Accreditation requirements to ensure that training programs provide quality instruction in current and effective work practices. • Work practice standards to ensure that these lead-based paint activities are conducted safely, reliably and effectively. As initially proposed in 1994, requirements for the training and certification of contractors and the accreditation of training programs, as well as specific work practice standards would have applied to lead-based paint activities conducted in target housing and public buildings (Ref. 2). A slightly different set of requirements would have applied to lead-based paint activities conducted in commercial buildings and on bridges and other structures. The 1994 proposal would have defined public buildings to include all buildings generally open to the public or occupied or visited by children, such as stores, museums, airports, offices, restaurants, hospitals, and government buildings, as well as schools and day-care centers. During the comment period, a significant majority of commenters expressed the concern that applying these regulations to activities in all of the buildings that EPA would consider public would result in significant costs without a comparable reduction in lead-based paint exposures for children under age 6, the population most vulnerable to lead exposures. Many of these commenters recommended that EPA focus its attention on buildings that are frequented by children, rather than on buildings that may be briefly visited by children. In response to these comments, EPA established, in the final rule, a subset of the buildings EPA had intended to define as public. This subset, called “child-occupied facilities,” was delineated in terms of the frequency and duration of visits by children (Ref. 3). “Child-occupied facility” is defined in 40 CFR 745.223 as “ a building, or portion of a building, constructed prior to 1978, visited regularly by the same child, 6 years of age or under, on at least two different days within any week (Sunday through Saturday period), provided that each day's visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours. Child-occupied facilities may include, but are not limited to, day care centers, preschools and kindergarten classrooms.” The training, certification, accreditation, and work practice requirements of the final lead-based paint activities regulations, codified at 40 CFR part 745, subpart L, apply only to activities in target housing and child-occupied facilities. Subsequently, in 1998, EPA initiated rulemaking under TSCA section 403 to identify lead-based paint hazards. The final standards, promulgated in 2001 and codified at 40 CFR part 745, subpart D, define paint-lead, dust-lead, and soil-lead hazards (Ref. 4). Under 40 CFR 745.61(b), these standards are applicable to target housing and child-occupied facilities. The definition of paint-lead hazard refers to the presence of damaged or deteriorated lead-based paint, as well as lead-based paint on surfaces where it can be damaged, abraded, or ingested. A dust-lead hazard is defined as surface dust that contains a mass-per-area concentration of lead equal to or exceeding 40 micrograms per square foot (μg/ft 2 ) on floors or 250 μg/ft 2 on interior window sills based on wipe samples. A soil-lead hazard is defined as bare soil that contains total lead equal to or exceeding 400 parts per million (μg/g) in a play area or an average of 1,200 parts per million in the rest of the yard based on soil samples. As discussed in detail in the preamble to the final TSCA section 403 regulations, the dust-lead and soil-lead hazard standards were set with reference to the likelihood that an exposure to such a level would result in a blood lead level above 10 micrograms per deciliter (μg/dL) in a child (Ref. 4 at 1216-1217). This was based on the level that the Centers for Disease Control and Prevention had set as the level of concern for community action. This level is not a threshold for toxicity. IV. Renovation Activities in Child-occupied Facilities A. TSCA Section 402(c)(3) Determination The 2006 Proposal was issued under the authority of TSCA section 402(c), which directs EPA to revise its TSCA section 402(a) lead-based paint activities regulations to apply to renovation activities that create lead-based paint hazards. The revisions proposed in the 2006 Proposal were based on, among other things, a study of renovation activities that EPA conducted as directed by TSCA section 402(c)(2). This study is discussed in greater length in the 2006 Proposal (Ref. 1 at 1591). In this study, EPA found that the following renovation activities, when conducted where lead-based paint is present, generated lead loadings on floors that exceeded 40 μg/ft 2 , the dust-lead hazard standard for floors in 40 CFR 745.65(b): • Paint removal by abrasive sanding. • Window replacement. • HVAC duct work. • Demolition of interior plaster walls. • Drilling into wood. • Sawing into wood. • Sawing into plaster. These results, along with the results of other phases of the study, which evaluated worker exposures and the blood lead levels of children in homes where renovations have taken place, led EPA to propose to conclude that renovation activities that disturb lead-based paint cause lead dust in amounts that will create, or could reasonably be anticipated to create, dust-lead hazards. The dust-lead hazard standards are the same for target housing and child-occupied facilities. EPA believes that the individual activities examined in its renovation study are likely to be part of renovation activities in child-occupied facilities as well as in target housing. EPA is therefore proposing to find that renovation activities that disturb lead-based paint in child-occupied facilities will create, or are reasonably anticipated to create, lead-based paint hazards. EPA requests comment on this proposed finding as well as any available data or studies on the similarities and differences between renovation activities in target housing and renovation activities in child-occupied facilities. B. Buildings Covered 1. Buildings covered by the 2006 Proposal. The requirements of the 2006 Proposal would take effect in two major phases. In the first phase, the proposed requirements would apply to renovations performed for compensation in: • Target housing where the firm performing the renovation obtains information indicating that a child under age 6 resides there, if the child has a blood-lead level greater than or equal to 10 μg/dL or a State or local government level of concern, if lower, or the firm does not provide the owners and occupants with the opportunity to inform the firm that a child under age 6 with such a blood-lead level resides there. • Owner-occupied target housing built before 1960, unless the firm performing the renovation obtains a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides there. • Rental target housing built before 1960. The second phase, which would take effect 1 year after the first phase takes effect, would extend the proposed requirements to: • Owner-occupied target housing built between 1960 and 1978, unless the firm performing the renovation obtains a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides there. • Rental target housing built between 1960 and 1978. EPA proposed the two-phase approach primarily because of the reduced prevalence of lead-based paint in housing constructed between 1960 and 1978. According to the National Survey of Lead and Allergens in Housing, 24% of the housing constructed between 1960 and 1978 contains lead-based paint (Ref. 5). As discussed in the 2006 Proposal, EPA is working toward the development of improved test kits that could be used to determine whether or not lead-based paint is present in an area to be renovated (Ref. 1 at 1599). These kits are expected to be commercially available by the time that the second phase of the proposal would take effect, and thus could be used to accurately exclude the 76% of housing constructed between 1960 and 1978 that does not contain lead-based paint. The 2006 Proposal also discussed several other options for applicability based on the age of the housing, including a single phase regulation covering pre-1960 target housing or pre-1978 target housing. EPA received a great many comments on this aspect of the proposal and the merits of these comments are still being considered. 2. Buildings covered by this proposal —a. Background. This proposal would extend the coverage of the training, certification, accreditation, work practice, and recordkeeping requirements of the 2006 Proposal to buildings that children under age 6 frequent, such as day care centers, preschools, and kindergarten classrooms. To accomplish this, EPA is proposing to incorporate into 40 CFR 745.83 the definition of “child-occupied facility” from 40 CFR 745.223, with two modifications. The proposed definition would refer to visits by children under age 6, rather than to visits by children 6 and under, to make the definition consistent with the other scope provisions of the 2006 Proposal. In addition, the proposed definition would clarify that child-occupied facilities may be located in target housing or public or commercial buildings. The preamble to the 1996 final lead-based paint activities regulations referred to child-occupied facilities as a subset of buildings that EPA had initially proposed to call “public buildings” (Ref. 3 at 45780). The proposed definition of “public building” in the lead-based paint activities rulemaking included buildings that may also be thought of as commercial buildings, such as office buildings. In order to avoid any potential confusion over the scope of buildings covered by this supplemental proposal, EPA is proposing to use the phrase “public or commercial building” to denote buildings generally open to the public or occupied or visited by children. Public or commercial buildings would include stores, museums, airport terminals, convention centers, office buildings, restaurants, hospitals, schools, government buildings, and day care centers. EPA is proposing to use the term “child-occupied facility” in this rulemaking to identify buildings, or portions of buildings, that would be covered by the rule, regardless of whether those buildings are target housing or public or commercial buildings. EPA is proposing to use the term this way to ensure that day care centers located in target housing would be covered. One of the elements of the 2006 Proposal is a provision allowing owners of target housing to opt out of the rule if they occupy the housing to be renovated and there is no child under age 6 in residence. If this provision were retained in the final rule, and the definition of “child-occupied facility” did not apply in target housing, the rule would not cover child care centers in owner-occupied target housing where no children under age 6 reside. To ensure that these types of day care centers are covered, EPA is proposing to add a sentence to the definition of “child-occupied facility” that states: “Child-occupied facilities may be located in target housing or in public or commercial buildings.” b. Child-occupied facilities in target housing. This supplemental proposal would cover owner-occupied target housing that meets the definition of “child-occupied facility” in the same way that EPA would cover owner-occupied target housing where a child under age 6 resides. The 2006 Proposal, in effect, would require a renovation firm to assume that target housing is the residence of a child under age 6 unless the firm obtains a statement signed by the owner that the owner resides in the housing to be renovated and no child under age 6 also resides there. With this proposal, EPA would require a similar assumption on the part of the renovation firm with respect to whether target housing is also a child-occupied facility. A renovation firm would be required to assume that target housing is either the residence of a child under age 6 or a child-occupied facility unless the firm obtains a statement signed by the owner that the owner resides in the housing to be renovated, no child under age 6 also resides there, and the housing is not a child-occupied facility. The 2006 Proposal would cover rental target housing regardless of the presence of a child under age 6, so it is not necessary to require a similar assumption in that case. EPA believes that it is reasonable to require renovators to assume that a child-occupied facility exists in owner-occupied target housing. An alternative approach would merely require the renovation firm to give the owner an opportunity to inform the firm that child care for children under age 6 is provided in the housing. This is the approach that EPA is proposing to use with respect to children under age 6 with increased blood lead levels for the purpose of determining whether target housing or child-occupied facilities built between 1960 and 1978 would be covered in the first phase of the rule. In the 2006 Proposal, EPA did not propose to require a renovation firm to assume that a child under age 6 with an increased blood lead level resides in all target housing. Rather, the renovation firm would only be required to provide the owner and occupant with an opportunity to inform the firm that such a child is in residence. Likewise, EPA is proposing to require a renovation firm to provide the owner and occupant of a child-occupied facility with an opportunity to inform the firm that a child under age 6 with an increased blood lead level uses the facility. If the firm is so informed, the target housing or child-occupied facility would be covered during the first phase of the rule. If not, and the target housing or child-occupied facility was built between 1960 and 1978, it would not be covered until the second phase of the rule. However, EPA is not proposing to allow renovation firms to assume that a child-occupied facility is not present in owner-occupied target housing unless the owner informs the firm that such a facility is present. EPA is concerned that this approach for child care facilities in target housing would result in a large number of these facilities being eliminated from coverage by the proposed rule. As described in Unit VI.A. and in the document entitled “Economic Analysis for the Supplemental Proposed Rule on Child-Occupied Facilities Under the TSCA Lead Renovation, Repair, and Painting Program” (“Supplemental Economic Analysis”, Ref. 6), EPA estimates that approximately 1,559,000 of the child-occupied facilities across the country are located in target housing, of which an estimated 726,000 were covered by the 2006 Proposal (either because they are in rental housing or because they are in owner-occupied housing where a child under age 6 resides). This supplemental proposal will cover an additional 833,000 child-occupied facilities located in target housing ( i.e. , in owner-occupied target housing where no child under age 6 resides). EPA requests comment on the proposed requirement that a renovation firm assume that owner-occupied target housing contains a child-occupied facility, and on other possible ways that a renovation firm could determine whether a child-occupied facility is present in target housing. As discussed in the 2006 Proposal, the Pre-Renovation Education Rule, promulgated under the authority of TSCA section 406(b) and codified at 40 CFR part 745, subpart E, requires owners and occupants of target housing to be informed of the potential risks from renovation projects by providing them with a lead hazard information pamphlet. Persons performing renovations covered by the existing regulations must already either obtain a signed acknowledgment from the owner indicating that the pamphlet has been received, or a certificate of mailing indicating that the pamphlet was mailed at least 7 days before the renovation. EPA has modified the sample acknowledgment form it developed for the 2006 Proposal to add information on child-occupied facilities. This sample could be used to not only record the owner's receipt of the lead hazard information pamphlet, but to obtain additional information on the housing to be renovated, its residents, and whether the housing is a child-occupied facility (Ref. 7). EPA seeks comment on this sample acknowledgment, a copy of which is available in the docket for this proposed rule and on the Agency's Web page at http://www.epa.gov/lead/pubs/pre-renovationform.pdf . c. Child-occupied facilities in public or commercial buildings. This proposal would treat child-occupied facilities that are not in target housing somewhat differently. As discussed in Unit IV.D.2., EPA is proposing to require renovation firms working in child-occupied facilities in public or commercial buildings to distribute lead hazard information to owners and occupants and obtain acknowledgments, like those required under the Pre-Renovation Education Rule for target housing. However, EPA is not proposing to exempt only those projects in public or commercial buildings where the renovation firm has obtained a signed statement by the owner of the building indicating that no child-occupied facility is present in the building. Rather, the firm would be able to determine whether or not a particular renovation in a public or commercial building involves a child-occupied facility. EPA chose this approach for two reasons. First, it should be much easier for the firm to determine whether it is renovating a child-occupied facility in a public or commercial building than it would be for the firm to determine whether the target housing it is to renovate is also a child-occupied facility. A stand-alone day care center is likely to have a name that suggests that it provides day care, and the center's status as a child-occupied facility should be obvious upon entering the center. Day care centers in office buildings are likely to have informational signs posted and the centers are likely to be identified in the building directory. Elementary schools are likely to have kindergarten classrooms. The other reason for not imposing a requirement for firms to obtain a signed owner's statement for each public or commercial building they renovate is the burden of such a requirement. The alternative to allowing the firm to determine that a particular building does not contain a child-occupied facility is to require the firm to obtain signed statements from the owners of all public or commercial buildings renovated. These buildings would include factories, office buildings, department stores, restaurants, and service stations, many of which do not contain child-occupied facilities. Under the proposed approach, the firm would have to take appropriate steps to determine whether or not a building is or contains a child-occupied facility, including asking the building's owner, or the person contracting for the renovation, whether a child-occupied facility is present. For example, if a renovation firm accepts a contract for a project in an elementary school, the firm would have to determine whether a kindergarten classroom was present, which common areas the kindergarten children used, and, for exterior projects, which exterior walls were immediately adjacent to the kindergarten classroom and associated common areas. Libraries and recreational facilities may have after-care programs that would cause these buildings to be considered child-occupied facilities; a renovation firm hired to renovate a building of this type would have to make inquiries about the use of the facility by children under age 6. EPA requests comment on its proposed approach, on the alternative of exempting only those public or commercial buildings for which the firm has obtained a signed statement from the owner indicating that there is no child-occupied facility present, and on any other methods for making the determination that a child-occupied facility is or is not present in a public or commercial building. d. Applicability based on age of building. For the purpose of determining applicability of the proposed rule, it is EPA's intention to treat child-occupied facilities, whether they are in target housing or public or commercial buildings, much the same as covered target housing. For example, if EPA retains the phase-in approach discussed previously, the first phase would cover: • Target housing where a child under age 6 with an increased blood lead level resides. • Rental target housing built before 1960. • Owner-occupied target housing built before 1960 where a child under age 6 resides. • Child-occupied facilities used by a child under age 6 with an increased blood lead level. • Child-occupied facilities built before 1960. The second phase would add: • Rental target housing built between 1960 and 1978. • Owner-occupied target housing built between 1960 and 1978 where a child under age 6 resides. • Child-occupied facilities built between 1960 and 1978. As discussed in the Supplemental Economic Analysis (Ref. 6), EPA has estimated that there are approximately 833,000 child-occupied facilities in target housing that would be covered by this proposal. EPA assumes that the prevalence of lead-based paint in target housing where child care is provided is the same as the prevalence of lead-based paint in target housing as a whole, so there is no reason to treat these child-occupied facilities differently. In addition, the First National Environmental Health Survey of Child Care Centers indicates that 22% of non-home-based child care centers built between 1960 and 1978 contain lead-based paint (Ref. 8). This is slightly less than the 24% of target housing built between 1960 and 1978 that contains lead-based paint, but this difference is not sufficient to justify a difference in regulatory applicability. e. Common areas. The 2006 Proposal would cover renovations in common areas in multi-family rental target housing. EPA requested comment on whether to exempt renovations in common areas in owner-occupied multi-family target housing if the renovation firm has obtained the signature of every owner with access to the common area, stating that the units are owner-occupied and no child under age 6 is in residence. The term “common area” is defined in 40 CFR 745.223 as “a portion of a building that is generally accessible to all occupants. Such an area may include, but is not limited to, hallways, stairways, laundry and recreational rooms, playgrounds, community centers, garages, and boundary fences.” In order to exempt from this supplemental proposal a renovation in a common area in owner-occupied multi-family target housing, EPA is proposing to require the renovation firm to obtain the signature of every owner with access to the common area, stating that, in addition to the units being owner-occupied with no children under age 6 in residence, no child care for children under age 6 is provided in the units. The lead-based paint activities regulations at 40 CFR part 745, subpart L, apply to common areas in multi-family target housing as well as to common areas in child-occupied facilities. With this supplemental proposal, EPA is not proposing to cover all common areas in public or commercial buildings that contain child-occupied facilities. Rather, EPA is most concerned with those common areas that are actually used by children under age 6, such as classrooms, bathrooms, and cafeterias, and not common areas that the children merely pass through. Similarly, EPA is not proposing to cover all exterior renovation projects on public or commercial buildings that contain child-occupied facilities. EPA is primarily concerned about the projects on the exteriors of public or commercial buildings that are most likely to affect the children visiting a child-occupied facility. An exterior renovation project on the opposite side of a large office building from the child-occupied facility within the building is far less likely to affect the children at the facility than an exterior renovation project on the same side of the building as the children's outdoor playground. For this reason, EPA is proposing to cover only those exterior renovation projects that are performed on the same side or sides of the building as the child-occupied facility or common area. This proposal would, therefore, incorporate additional text into the definition of “child-occupied facility” to clarify the scope of projects associated with child-occupied facilities in public or commercial buildings. This text would read: In public or commercial buildings that contain child-occupied facilities, the child-occupied facility encompasses only those common areas that are routinely used by children under age 6, such as restrooms and cafeterias. Common areas that children under age 6 only pass through, such as hallways, stairways, and garages, are not included. In addition, for public or commercial buildings that contain child-occupied facilities, the child-occupied facility encompasses only the exterior sides of the building that are immediately adjacent to the child-occupied facility or the common areas routinely used by children under age 6. EPA requests comment on the likelihood that renovation projects in hallways and stairways, or in rooms not used by children under age 6, will affect the children using a child-occupied facility in a public or commercial building. EPA also requests comment on whether all exterior projects on public or commercial buildings that contain child-occupied facilities should be covered, whether all common areas in such buildings should be covered and whether hallways, stairways, and other areas adjacent to rooms used by children under age 6 should be treated differently than more remote areas of the building. EPA is particularly interested in peer-reviewed studies or data that shed light on the potential exposures and hazards to children under age 6 presented by renovation projects in areas not used by the children. EPA also requests other comments on these limitations, including the extent to which States, Territories, and Tribes with authorized lead-based paint activities programs might apply this term differently. C. Activities Covered by this Proposal The 2006 Proposal would cover activities covered by the Pre-Renovation Education Rule, those activities that meet the definition of “renovation” in 40 CFR 745.83. In general, renovations are activities that modify an existing structure and that result in the disturbance of painted surfaces. In addition, like the Pre-Renovation Education Rule, the 2006 Proposal would cover only renovations performed for compensation. This includes renovations performed by renovation firms and their employees, as well as renovations performed by owners of rental property and their employees. Although the owner of rental property may not be compensated for maintenance and repair work at the time that the work is performed, tenants generally pay rent for the right to occupy a rental unit as well as for maintenance services in that unit. Therefore, EPA considers the payment of rent to be compensation to the owner of rental property for any renovations performed on the property. Likewise, this proposal would only cover activities that fit within the definition of “renovation” in 40 CFR 745.83 and that are performed for compensation in child-occupied facilities. Compensation includes pay for work performed, such as that paid to contractors; wages, such as those paid to employees of contractors, building owners, and child-occupied facility operators; and rent for target housing or public or commercial building space. Thus, renovations performed by renovation contractors and their employees in child-occupied facilities would be covered, as would be renovations by building owners in child-occupied facilities, if the building owner receives rent for the child-occupied facility's space. Renovations in child-occupied facilities that are performed by employees of the building owner or of the child-occupied facility would be covered if the employees receive wages or other compensation for the work performed. EPA does not, however, consider child care payments to be compensation for renovations. EPA believes that an agreement to provide child care in exchange for a payment is not a contract for building maintenance services in the same way that a lease or other agreement between a landlord and a tenant generally is. If EPA were to consider payments for child care as compensation for the purposes of this regulation, this proposal would cover a great many do-it-yourself renovations by the owners of target housing in housing they own and occupy. In 1994, in Unit III.B. of the preamble to the proposed lead-based paint activities regulations, EPA reviewed section 1021 of the Residential Lead-Based Paint Hazard Reduction Act of 1992, the section that added Title IV to TSCA, and determined that the emphasis under section 402 of TSCA ought to be the certification and training of contractors, not homeowners. In the course of that review, EPA stated its belief that TSCA section 402(c)(3), the section under which this supplemental proposal is being issued, shows that “Congress” focus was on the need to regulate contractors doing renovation and remodeling activities, and not homeowners doing renovation and remodeling of their own homes” (Ref. 2). Considering payments for child care to be compensation for renovations for the purpose of this supplemental proposal would make this proposal inconsistent with Congressional intent. This proposal would also cover renovations that are being performed in order to turn a public or commercial building, or part of such a building, into target housing or a child-occupied facility. EPA has always understood the lead-based paint activities regulations in 40 CFR part 745, subpart L, to apply to lead-based paint activities being conducted as part of the conversion of a building into target housing or a child-occupied facility. EPA believes that it is especially important to ensure that renovations done in preparation for use by children under age 6 are done in a lead-safe manner. Therefore, EPA proposes to add the following sentence at the end of the definition of “renovation” in 40 CFR 745.83: A renovation performed for the purpose of converting a building, or part of a building, into target housing or a child-occupied facility is a renovation under this subpart. EPA is proposing to apply the same exemptions proposed for target housing in 2006 to child-occupied facilities. This proposal would exempt renovations in child-occupied facilities that affect components that have been determined to be free of lead-based paint by a certified lead-based paint inspector or risk assessor, or by a certified renovator using an EPA-approved test kit. Likewise, minor maintenance and repair activities in child-occupied facilities would be exempt. The 2006 Proposal would limit minor maintenance and repair activities to those activities that affect 2 square feet or less of painted surface per component, the current limitation in the Pre-Renovation Education Rule. However, comment was requested on whether a different exemption for small projects should be used, such as the small project exception from EPA's lead-based paint activities regulations at 40 CFR 745.65(d) and HUD's Lead-Safe Housing Rule at 24 CFR 35.1350(d), which exempt activities that disturb less than 2 square feet of painted surface per room or 20 square feet of painted exterior surfaces. Finally, under this proposal, EPA would apply the same standard to emergency renovation operations in child-occupied facilities as it would under the 2006 Proposal to target housing. The 2006 Proposal would require emergency renovations to be performed in compliance with the notification, training, certification, and work practice requirements to the extent practicable. EPA is still evaluating the numerous comments it received on this aspect of the 2006 Proposal, but it is EPA's intention to cover emergency renovations in child-occupied facilities in the same manner that such renovations in target housing would be covered. EPA requests comment on whether emergency renovation operations should be treated differently in child-occupied facilities than in target housing. D. Requirements for Renovations in Child-Occupied Facilities 1. Training, certification, accreditation, work practice, and recordkeeping requirements. With this proposal, EPA would extend the training, certification, accreditation, and work practice standard requirements of the 2006 Proposal to renovations for compensation in child-occupied facilities. The 2006 Proposal would require that renovators be trained in the use of lead safe work practices, that renovators and firms be certified, that providers of renovation training be accredited, and that renovators follow renovation work practice standards. The work practices in the 2006 Proposal included the posting of warning signs, isolation of the work area, containment of waste, cleaning, and post-renovation cleaning verification. The 2006 Proposal also would establish a dust sampling technician discipline and would allow certified dust sampling technicians to collect optional dust clearance samples after renovations. Consult the 2006 Proposal for more information on each of these proposed requirements (Ref. 1). The 2006 Proposal described how the proposed training elements for renovators as well as most of the proposed work practice standards were developed with reference to the EPA-HUD model curriculum entitled “Lead Safety for Remodeling, Repair, & Painting” and the technical documents used to develop the curriculum, including the “Guidelines for the Evaluation and Control of Lead-Based Paint Hazards in Housing” (HUD Guidelines) developed by HUD as directed by the Residential Lead-Based Paint Hazard Reduction Act of 1992 (Ref. 1 at 1608). As discussed in the Supplemental Economic Analysis for this proposal (Ref. 6), EPA has determined that approximately 90% of the child-occupied facilities that would be covered by this proposal are located in target housing. (Roughly half of the child-occupied facilities in target housing were covered by the 2006 Proposal either because they are in rental housing or because they are in owner-occupied housing where a child under age 6 resides.) EPA knows of no reason why the requirements for renovations conducted in target housing that is also a child-occupied facility should be different from the requirements in the 2006 Proposal for renovations in rental target housing and target housing where children under age 6 reside. EPA also believes that the training, certification, accreditation, work practice, and recordkeeping requirements of the 2006 Proposal are equally applicable to renovations conducted in child-occupied facilities in public or commercial buildings. The HUD Guidelines were also used to develop the required training elements in 40 CFR 745.225 for certified lead-based paint activities professionals, such as abatement supervisors and workers. These individuals, after completing the required training and being certified by EPA, may perform abatements in child-occupied facilities as well as in target housing. Likewise, EPA specifically referenced the HUD Guidelines in 40 CFR 745.227(a)(3) in describing the methods that certified professionals must follow in performing lead-based paint activities in target housing or in child-occupied facilities. Thus, EPA did not distinguish between target housing and child-occupied facilities in designing the training, certification, and accreditation requirements of the lead-based paint activities regulations. In addition, the only way that EPA distinguished between child-occupied facilities and multi-family target housing in the work practice requirements of 40 CFR 745.227 was in incorporating special instructions at 40 CFR 745.227(d)(7) for dust sampling in child-occupied facilities when performing a risk assessment. In promulgating the lead-based paint activities regulations under TSCA section 402(a), EPA determined that the same training, certification, and accreditation requirements would apply in target housing and child-occupied facilities. In addition, EPA found that the same work practice requirements would be equally reliable, effective and safe in target housing and child-occupied facilities. EPA noted that commenters did not support the development of different sets of work practices for target housing and child-occupied facilities. In late 2006, EPA conducted an additional renovation study, which was designed to characterize dust lead levels at various stages of renovation projects. As part of this study, renovation projects were performed in child-occupied facilities in public or commercial buildings. In a March 16, 2007 Notice of Availability (Ref. 9), EPA described its intention to consider the results of its Dust Study (Ref. 10), along with the NAHB Survey (Ref. 11), in the development of the final rule. In the March 2007 notice, EPA requested comment from the public on the work practice provisions of the 2006 Proposal in light of the results of these studies. TSCA section 402(a)(1) directs EPA to promulgate regulations that, among other things, contain standards for performing lead-based paint activities, taking into account reliability, effectiveness, and safety. In revising those regulations to apply to renovation activities in child-occupied facilities, EPA is proposing to find that the same work practice requirements would be equally reliable, effective, and safe in target housing and child-occupied facilities. EPA therefore is proposing to extend the work practice standards of the 2006 Proposal to firms and individuals performing renovations in child-occupied facilities. This proposal would also impose the training, certification, accreditation, work practice and recordkeeping requirements of the 2006 Proposal on firms and individuals performing renovations in child-occupied facilities, because EPA has determined that the same requirements should apply in child-occupied facilities and target housing. EPA requests comment on these proposed findings. EPA also invites commenters to identify peer-reviewed studies and data, of which EPA may not be aware, that shed light on potential differences between renovations in target housing and renovations in child-occupied facilities. EPA remains concerned about the potential exposures to lead hazards that may be created by untrained homeowners doing work in the presence of lead-based paint. EPA specifically requests comment on whether any aspects of the proposed requirements, such as training, certification, work practices, or recordkeeping, should be modified to make compliance more feasible for target housing owner-occupants who provide child care for compensation and who choose to undertake their own renovations. 2. Information distribution requirements. TSCA section 406(b) directs EPA to promulgate regulations requiring that every person who performs renovations for compensation in target housing provide a lead-hazard information pamphlet to the owner and the occupant of the housing before the renovation commences. The Pre-Renovation Education Rule, which implements this directive, was promulgated in 1998 and codified at 40 CFR part 745, subpart E. Much of the proposed regulatory text in the 2006 Proposal would be codified in that subpart along with the existing information distribution regulations. Under today's proposal, firms and individuals performing renovations for compensation in target housing, whether or not the target housing contains a child-occupied facility, would still be required to provide the lead-hazard information pamphlet as required by TSCA section 406(b) and its implementing regulations. Today's proposal would also require a similar information distribution for renovation projects in child-occupied facilities in public or commercial buildings. EPA has previously used the authority of TSCA section 407 to impose notification requirements for lead-based paint training course providers and for firms performing lead-based paint abatements (Ref. 12). TSCA section 407 authorizes EPA to promulgate recordkeeping or reporting requirements as necessary for the effective implementation of TSCA Title IV. EPA finds that the distribution of lead hazard information, before renovation projects begin, to the owners and occupants of child-occupied facilities as well as the owners of public or commercial buildings that contain child-occupied facilities is necessary to ensure effective implementation of this proposed regulation. Information on lead hazards, and lead safe work practices that minimize the creation of hazards, will stimulate interest on the part of child-occupied facilities and public or commercial building owners in these work practices and increase the demand for their use. In addition, providing information to the parents and guardians of children frequenting child-occupied facilities will enable the parents and guardians to make decisions regarding their children's welfare. Under this proposal, unless they own the building being renovated, firms and individuals performing renovation projects in child-occupied facilities would be required to provide a lead hazard information pamphlet to the owner of the building and either obtain a signed acknowledgment that the owner received the pamphlet or document through a certificate of mailing that the pamphlet was mailed to the owner at least 7 days, but no more than 60 days, before the date that the renovation begins. In addition, if the renovation is not being performed by the entity that operates the child-occupied facility, a lead hazard information pamphlet must be provided to an adult representative of the child-occupied facility and a signed acknowledgment obtained, the reason for the lack of a signed acknowledgment documented, or a certificate of mailing obtained. EPA is also proposing to require that the renovation firm either distribute the pamphlet and general information on the renovation project to the parents or guardians of children using the facility or post, while the project is ongoing, informational signs describing the general nature and locations of the project and the anticipated completion date. These signs must be posted in areas where they can be seen by the parents or guardians of the children frequenting the child-occupied facility. The signs must be accompanied by a posted copy of the lead hazard information pamphlet or information on how interested parents and guardians can review a copy of the pamphlet or obtain a copy from the renovation firm at no cost to the parents or guardians. EPA requests comment on the utility of this kind of information for child-occupied facilities and public or commercial building owners, and on the usefulness of informational signs for parents and guardians of children visiting the child-occupied facility. E. State Renovation Model Program and Authorization Process As described in Unit IV.F. of the 2006 Proposal, EPA would give interested States, Territories, and Indian Tribes the opportunity to apply for, and receive authorization to administer and enforce all of the elements of the revised 40 CFR part 745, subpart E (Ref. 1 at 1616). This would include the existing elements of subpart E, the Pre-Renovation Education Rule, as well as the new training, certification, accreditation, work practice, and recordkeeping requirements of the proposed renovation, repair, and painting program. The 2006 Proposal would allow States, Territories and Tribes to choose to administer and enforce just the existing requirements of subpart E, the pre-renovation education elements, or all of the requirements of the proposed subpart E, as amended. EPA did not propose to allow States, Territories, and Tribes to seek authorization to administer and enforce only the training, certification, accreditation, work practice, and recordkeeping requirements of the 2006 Proposal and not the pre-renovation education provisions of existing subpart E. This supplemental proposal would not fundamentally change the authorization scheme in the 2006 Proposal. Interested States, Territories, and Indian Tribes would still be given the opportunity to apply for, and receive authorization to, administer and enforce just the pre-renovation education provisions of revised 40 CFR part 745, subpart E, or both the pre-renovation education provisions and the training, certification, accreditation, work practice, and recordkeeping provisions of subpart E, as amended. However, this supplemental proposal would mean that States, Territories, and Tribes that wish to administer and enforce the pre-renovation education provisions of subpart E, as amended, would have to include both target housing and child-occupied facilities within the scope of their program. Similarly, States, Territories, and Tribes that are also interested in obtaining authorization to administer and enforce the training, certification, accreditation, work practice, and recordkeeping elements of subpart E, as amended, would have to include both target housing and child-occupied facilities within the scope of their program. States with existing authorized pre-renovation education programs would be required to demonstrate that they have modified their programs to include child-occupied facilities. These States would have to provide this demonstration in the first report that they submit pursuant to 40 CFR 745.324(h) more than one year after the final rule is promulgated. V. References 1. U.S. Environmental Protection Agency (USEPA). Lead; Renovation, Repair, and Painting Program: Proposed Rule. Federal Register (71 FR 1587, January 10, 2006). 2. USEPA. Lead; Requirements for Lead-Based Paint Activities: Proposed Rule. Federal Register (59 FR 45872, September 2, 1994). 3. USEPA. Lead; Requirements for Lead-Based Paint Activities in Target Housing and Child-Occupied Facilities: Final Rule. Federal Register (61 FR 45778, August 29, 1996). 4. USEPA. Lead; Identification of Dangerous Levels of Lead: Final Rule. Federal Register (66 FR 1206, January 5, 2001). 5. U.S. Department of Housing and Urban Development (HUD). National Survey of Lead and Allergens in Housing, Volume I: Analysis of Lead Hazards, Final Report, Revision 7.1. (October 31, 2002). 6. USEPA, Office of Pollution Prevention and Toxics (OPPT). Economic Analysis for the Supplemental Proposed Rule on Child-Occupied Facilities Under the TSCA Lead Renovation, Repair, and Painting Program (January 2007). 7. USEPA, OPPT. Sample acknowledgment form (2007). 8. HUD. First National Environmental Health Survey of Child Care Centers, Volume I: Analysis of Lead Hazards, Final Report. (July 15, 2003). 9. USEPA. Lead; Renovation, Repair, and Painting Program; Notice of Availability. Federal Register (72 FR 12582, March 16, 2007). 10. USEPA, Office of Pollution Prevention and Toxics (OPPT). Characterization of Dust Lead Levels after Renovation, Repair, and Painting Activities; Draft Final Report (January 2007). 11. National Association of Home Builders. Lead Safe Work Practice Survey Project Report (November 2006). 12. USEPA. Lead; Notification Requirements for Lead-Based Paint Abatement Activities and Training: Final Rule. Federal Register (69 FR 18489, April 8, 2004). 13. USEPA, Office of Pollution Prevention and Toxics (OPPT). Economic Analysis for the Renovation, Repair, and Painting Program Proposed Rule (February 2006). 14. USEPA. Second Proposed Rule Related Addendum to Existing EPA ICR entitled: TSCA section 402/404 Training and Certification, Accreditation, and Standards for Lead-Based Paint Activities (January 2007). 15. ASTM International. Standard Practice for Clearance Examinations Following Lead Hazard Reduction Activities in Single-Family Dwellings and Child-Occupied Facilities (E 2271-05). 16. ASTM International. Standard Guide for Evaluation, Management, and Control of Lead Hazards in Facilities (E 2052-99). 17. ASTM International. Standard Practice for Evaluating the Performance Characteristics of Qualitative Chemical Spot Test Kits for Lead in Paint (E 1828-01). VI. Statutory and Executive Order Reviews A. Executive Order 12866 Under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), it has been determined that this supplemental proposed rule is a “significant regulatory action” under section 3(f)(1) of the Executive Order because EPA estimates that, when considered in conjunction with the 2006 proposal, it will have an annual effect on the economy of $100 million or more. Accordingly, this action was submitted to the Office of Management and Budget (OMB) for review under Executive Order 12866 and any changes made based on OMB recommendations have been documented in the public docket for this rulemaking as required by section 6(a)(3)(E) of the Executive Order. In addition, EPA has prepared an analysis of the potential costs and benefits associated with this proposed rulemaking. This analysis is contained in the Supplemental Economic Analysis (Ref. 6), which is available in the docket for this action and is briefly summarized here. 1. Types of facilities. This supplemental proposed rule applies to an estimated 930,000 child-occupied facilities, of which approximately 833,000 are in target housing where child care is provided. The 2006 Proposal covered child-occupied facilities in rental housing and in owner-occupied housing where a child under age 6 resides. This supplemental proposed rule covers additional child-occupied facilities that were not covered by the 2006 Proposal because they are located in target housing where no child under age 6 resides. This supplemental proposal also applies to child-occupied facilities in public or commercial buildings. 2. Options evaluated. EPA considered a variety of options for addressing the risks presented by renovation, repair, and painting actions where lead-based paint is present. The Supplemental Economic Analysis analyzed several different options for the rule. Option A applies to renovation, repair, and painting activities performed for compensation in all child-occupied facilities built before 1978. Option B has 2 phases. The first phase applies to child-occupied facilities built before 1960 as well as child-occupied facilities built between 1960 and 1978 that are used by a child under age 6 with an increased blood lead level. The second phase, which takes effect a year after the first phase, adds the remaining child-occupied facilities built between 1960 and 1978. Option C also has 2 phases. The first phase applies to child-occupied facilities built before 1950, and the second phase, which takes effect a year after the first phase, applies to child-occupied facilities built before 1978. Option D covers the same facilities and phases as Option B, and differs only in the amount of flexibility allowed a certified renovator in selecting appropriate work practices for each individual job. Option D prescribes the practices to be followed, so does not provide flexibility. Option E has the same phases as Option B, but considers child care payments to be compensation for renovations. Thus, for example, this option covers a renovation by a homeowner in owner-occupied target housing if the housing qualifies as a child-occupied facility and the homeowner provides paid child care. The proposed rule is Option B. 3. Number of events and individuals affected. Under the supplemental proposal, in Phase 1 there will be 243,000 events in child-occupied facilities where lead-safe work practices will be used due to the rule. As a result, there will be approximately 633,000 exposures avoided in children under age 6. In Phase 2, lead-safe work practices will be used in about 140,000 events as a result of the supplemental proposed rule. About 916,000 exposures will be avoided in children under age 6 each year as a result. There will also be about 166,000 exposures avoided in adults in Phase 1, and about 224,000 per year in Phase 2. The affected adults are the staff of child-occupied facilities in public or commercial buildings (such as schools and day care centers) and the residents of target housing where child care is provided. 4. Benefits. The Supplemental Economic Analysis describes the estimated benefits of the proposed rulemaking in qualitative and quantitative terms. Benefits result from the prevention of adverse health effects attributable to lead exposure. These health effects include impaired cognitive function in children and several illnesses in children and adults. One of the stated purposes of Title X is to prevent childhood lead poisoning. EPA considered the potential benefits to children separately from adults, because the reduction in the threat of childhood lead poisoning is a focus of Title X, and because of uncertainties about the exposure of adults to lead in dust from renovation, repair, and painting activities in these facilities, and the resulting health effects. The Agency specifically seeks comment on its consideration of potential benefits to both children and adults, as well as comments and information about the potential uncertainties associated with adult exposures and health effects. Quantifying the adverse health effects associated with renovation, repair, and painting projects involves 4 steps: first, estimating the amount of lead contamination due to the renovation project under various assumptions about cleaning; second, estimating the blood-lead levels resulting from this contamination; third, estimating the adverse health effects (such as loss in IQ points) due to increased blood-lead levels using dose-response functions; and fourth, assigning medical costs, reduced income, or another proxy for willingness-to-pay to avoid the adverse health effects. The Supplemental Economic Analysis estimates the benefits of avoided incidence of IQ loss due to reduced lead exposure to children. The analysis was limited to the avoided incidence of IQ loss because there are not sufficient data at this time to develop dose-response functions for other health effects in children. The Supplemental Economic Analysis provides six alternative estimates of children's benefits, depending on which of two models is used to relate exposure to blood-lead levels, which of two age groups the model is applied to, and which of two exposure metrics is used. Furthermore, benefits are estimated using two different scenarios for cleaning assumptions. The range of benefits estimates described below reflects the minimum and maximum of the six alternative blood-lead estimates and the two cleaning scenarios. The benefits of avoided exposure to adults were not quantified due to uncertainties about the estimation of such exposure. Depending on which blood-lead model and exposure assumptions are used, the quantified IQ benefits to children for the supplemental proposed rule range from $64 million to $257 million per year when annualized using a 3% discount rate, and from $68 million to $272 million per year when using a 7% discount rate. The estimated benefits for the other options range from $64 million to $386 million using a 3% discount rate and from $67 million to $408 million using a 7% discount rate. There are additional unquantified benefits, including avoided health effects in adults. 5. Costs. The Supplemental Economic Analysis estimates the potential costs of complying with the training, certification, and work practice requirements in the supplemental proposed rule. Costs may be incurred by child-occupied facilities that use their own staff for renovation, repair, and painting events; landlords that use their own staff for renovation, repair, and painting events in public or commercial buildings that they lease to child-occupied facilities; and contractors that perform renovation, repair, and painting work for compensation in child-occupied facilities. The supplemental proposed rule, if finalized as proposed, is estimated to result in a total potential cost of $53 million in Phase 1. The 50-year annualized costs provide a measure of the steady-state cost. Annualized costs of the supplemental proposed rule are estimated to be $39 million per year using a 3% discount rate and $43 million per year using a 7% discount rate. Annualized costs for the other options range from $39 million to $92 million per year using a 3% discount rate and $42 million to $102 million per year using a 7% discount rate. 6. Net benefits. Net benefits are the difference between benefits and costs. The supplemental proposed rule, if finalized as proposed, is estimated to result in potential net benefits of $1 million to $157 million in Phase 1 based on children's benefits alone. The 50-year annualized net benefits for the proposed rule based on children's benefits are estimated to be $25 million to $218 million per year using a 3% discount rate and $25 million to $229 million per year using a 7% discount rate. The net benefits for the other options range from -$8 million to $293 million per year using a 3% discount rate and -$12 million to $306 million per year using a 7% discount rate. There are additional unquantified benefits, including avoided health effects in adults, that are not included in the net benefits estimates. 7. Request for comment. To improve the analysis for the final rule, the Agency conducted a number of sensitivity analyses in its Supplemental Economic Analysis (Ref. 6). These analyses examined the sensitivity of the overall costs and benefits of the rule to selected parameters which appear to be important and for which relatively few supporting data are available. These include alternative assumptions regarding compliance with this rule, the effectiveness of daily cleaning, areas of schools other than pre-kindergarten and kindergarten classrooms that are routinely used by children under age 6, the number of unscheduled maintenance events in child-occupied facilities in public or commercial buildings, the effectiveness of current work practices in child-occupied facilities in public or commercial buildings, and how lead loadings from renovation events may vary with the age of a building. The Agency is specifically interested in comments on these sensitivity analyses and supporting information, particularly peer-reviewed studies and data, on the following questions related to the Agency's analysis: • How often are unplanned maintenance activities that would be covered by this supplemental proposal performed in child care centers and schools? • How often are classrooms in child-occupied facilities in public or commercial buildings swept and how often are they mopped? Do janitorial staff use single bucket mopping or the two bucket mopping method required by the rule and how frequently do they change the water? What are the efficiencies of the various cleaning methods? • What share of the renovations in schools and child care centers use work practices required by this supplemental proposal, and which particular work practices do they use? • How do renovations performed by contractors and those performed by homeowners differ, particularly with respect to the frequency with which work practices required by this proposal are already being used and the expected compliance rates if homeowner renovations were covered by the regulation? (This supplemental proposal would not cover persons who perform renovations in housing that they own and occupy, but one of the regulatory options evaluated in EPA's Supplemental Economic Analysis covered renovations by homeowners who provide child care for compensation in their homes.) • When estimating the lead loadings from renovations, how should EPA's analysis take into account variations in the amount of lead in paint by component type and building age? B. Paperwork Reduction Act The information collection requirements contained in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 USC 3501 et seq . An Information Collection Request (ICR) document prepared by EPA, an amendment to an existing ICR and referred to as the Second ICR Addendum (EPA ICR No. 1715.08, OMB Control Number 2070-0155) has been placed in the public docket for this proposed rule (Ref. 14). An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations codified in Chapter 40 of the CFR, after appearing in the preamble of the final rule, are listed in 40 CFR part 9, are displayed either by publication in the Federal Register or by other appropriate means, such as on the related collection instrument or form, if applicable. The display of OMB control numbers in certain EPA regulations is consolidated in 40 CFR part 9. The new information collection activities contained in this supplemental proposed rule are designed to assist the Agency in meeting the core objectives of TSCA section 402, including ensuring the integrity of accreditation programs for training providers, providing for the certification of renovators, and determining whether work practice standards are being followed. EPA has carefully tailored the proposed recordkeeping and recordkeeping requirements so they will permit the Agency to achieve statutory objectives without imposing an undue burden on those firms that choose to be involved in renovation, repair, and painting activities. Burden under the PRA means the total time, effort, or financial resources expended by persons to generate, maintain, retain, disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. Under this supplemental proposal, the new information collection requirements may affect training providers and firms that perform renovation, repair, or painting for compensation in child-occupied facilities. Although these firms have the option of choosing to engage in the covered activities, once a firm chooses to do so, the information collection activities contained in this rule become mandatory for that firm. The ICR document provides a detailed presentation of the estimated burden and costs for 3 years of the program. The aggregate burden varies by year due to changes in the number of firms that will seek certification each year. The burden and cost to training providers and firms engaged in renovation, repair, and painting activities is summarized in this section. There are an average of 145 training providers that are estimated to incur burden to notify EPA (or an authorizing State, Tribe, or Territory) before and after training courses. The average burden for training provider notifications as a result of the supplemental proposed rule is estimated at 7 to 18 hours per year, depending on the number of additional training courses provided. Total training provider burden is estimated to average 1,700 hours per year. There are an average of 38,000 firms estimated to become certified to engage in renovation, repair, or painting activities in child-occupied facilities under the supplemental proposed rule. The average certification burden is estimated to be 3.5 hours per firm in the year a firm is initially certified, and 0.5 hours in years that it is re-certified (which occurs every 3 years). Firms must also distribute lead hazard information to the owners and occupants of public or commercial buildings that contain child-occupied facilities. Finally, firms must keep records of the work they perform in child-occupied facilities; this recordkeeping is estimated to typically take approximately 5 hours per year. Total burden for these firms is estimated to average 280,000 hours per year. Total respondent burden as a result of the supplemental proposed rule during the period covered by the ICR is estimated to average approximately 281,000 hours per year. There are also government costs to administer the program. States, Tribes, and Territories are allowed, but are under no obligation, to apply for and receive authorization to administer these proposed requirements. EPA will directly administer programs for States, Tribes, and Territories that do not become authorized. Because the number of States, Tribes, and Territories that will become authorized is not known, administrative costs are estimated assuming that EPA will administer the program everywhere. To the extent that other government entities become authorized, EPA's administrative costs will be lower. Direct your comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, to EPA using the public docket that has been established for this proposed rule (Docket ID No. EPA-HQ-OPPT-2005-0049). In addition, send a copy of your comments about the ICR to OMB at: Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th St., NW., Washington, DC 20503, Attention: Desk Office for EPA. Since OMB is required to complete its review of the ICR between 30 and 60 days after June 5, 2007, please submit your ICR comments for OMB consideration to OMB by July 5, 2007. The Agency will consider and address comments received on the information collection requirements contained in this proposal when it develops the final rule. C. Regulatory Flexibility Act In accordance with the Regulatory Flexibility Act (RFA), 5 U.S.C.601 et seq. , and the Agency's long-standing policy of always considering whether there may be a potential for adverse impacts on small entities, the Agency has evaluated the potential small entity impacts of its 2006 Proposal and this supplemental proposal. The Agency's analysis of the potentially adverse economic impacts of this supplemental proposal is contained in the Supplemental Economic Analysis (Ref. 6). The analysis of the potentially adverse economic impacts of the 2006 Proposal is contained in the document entitled “Economic Analysis for the Renovation, Repair, and Painting Program Proposed Rule” (Ref. 13). Because EPA intends to promulgate a single final rule that encompasses both the 2006 Proposal and this supplemental proposal, EPA has evaluated the small entity impacts for the combined effects of the two proposals. The initial regulatory flexibility analysis was reviewed in the preamble to the 2006 Proposal. This analysis has been revised to include information on this supplemental proposal. The following is an overview of the revised analysis. 1. Legal basis and objectives for the proposed rule. As discussed in Unit IV.A. of this preamble, TSCA section 402(c)(2) directs EPA to study the extent to which persons engaged in renovation, repair, and painting activities are exposed to lead or create lead-based paint hazards regularly or occasionally. After concluding this study, TSCA section 402(c)(3) further directs EPA to revise its lead-based paint activities regulations under TSCA section 402(a) to apply to renovation or remodeling activities that create lead-based paint hazards. Because EPA's study found that activities commonly performed during renovation and remodeling create lead-based paint hazards, EPA is proposing to revise the TSCA section 402(a) regulatory scheme to apply to individuals and firms engaged in renovation, repair, and painting activities. The primary objective of the combined proposals is to prevent the creation of new lead-based paint hazards from renovation, repair, and painting activities in housing where children under age 6 reside and in housing or other buildings frequented by children under age 6. 2. Potentially affected small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this proposed rule on small entities, small entity is defined in accordance with section 601 of the RFA as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The small entities that are potentially directly regulated by this proposed rule include: small businesses (including contractors and non-residential property owners and managers); small non-profits (certain daycare centers and private schools); and small governments (school districts). In determining the number of small businesses affected by the proposed rule, the Agency applied U.S. Economic Census data to the SBA's definition of small business. However, applying the U.S. Economic Census data requires either under or overestimating the number of small businesses affected by the proposed rule. For example, for many construction establishments, the SBA defines small businesses as having revenues of less than $13 million. With respect to those establishments, the U.S. Economic Census data groups all establishments with revenues of $10 million or more into one revenue bracket. On the one hand, using data for the entire industry would overestimate the number of small businesses affected by the proposed rule and would defeat the purpose of estimating impacts on small business. It would also underestimate the proposed rule's impact on small businesses because the impacts would be calculated using the revenues of large businesses in addition to small businesses. On the other hand, applying the closest, albeit lower, revenue bracket would underestimate the number of small businesses affected by the proposed rule while at the same time overestimating the impacts. Similar issues arose in estimating the fraction of non-residential commercial property owners and managers that are small businesses. For other sectors (non-profits operating daycare centers or private schools), EPA assumed that all affected firms are small, which may overestimate the number of small entities affected by the rule. The Agency requests comments and information regarding available data to better estimate the number of small entities affected by the rule. The vast majority of entities in the industries affected by this rule are small. Using EPA's estimates, when the supplemental proposal is combined with the 2006 Proposal, the renovation, repair, and painting program will affect an average of approximately 186,000 small entities. 3. Potential economic impacts on small entities. EPA evaluated two factors in its analysis of the rule's requirements on small entities, the number of firms that would experience the impact, and the size of the impact. Annual compliance costs as a percentage of annual revenues were used to assess the potential impacts of the rule on small businesses and small governments. This ratio is a good measure of entities' ability to afford the costs attributable to a regulatory requirement, because comparing compliance costs to revenues provides a reasonable indication of the magnitude of the regulatory burden relative to a commonly available measure of economic activity. Where regulatory costs represent a small fraction of a typical entity's revenues (for example, less than 1%, and not greater than 3%), the financial impacts of the regulation on such entities may be considered as not significant. For non-profit organizations, impacts were measured by comparing rule costs to the organization's annual expenditures. When expenditure data were not available, however, revenue information was used as a proxy for expenditures. It is appropriate to calculate the impact ratios using annualized costs, because these costs are more representative of the continuing costs entities face to comply with the rule. EPA estimates that there are an average of 186,000 small entities that would be affected by the combined renovation, repair, and painting activities program. Of these, there are an estimated 163,000 small businesses with an average impact of 0.9%, 17,000 small non-profits with an average impact of 0.1%, and 6,000 small governments with an average impact of 0.004%. 4. Relevant Federal rules. The proposed requirements in this rulemaking will fit within an existing framework of other Federal regulations that address lead-based paint. The Pre-Renovation Education Rule, discussed in Unit IV.A.2. of this preamble, requires renovators to distribute a lead hazard information pamphlet to owners and occupants before conducting a renovation in target housing. This proposal has been carefully crafted to harmonize with the existing pre-renovation education requirements. Disposal of waste from renovation projects that would be regulated by this proposal is covered by the Resource Conservation and Recovery Act (RCRA) regulations for solid waste. This proposal does not contain specific requirements for the disposal of waste from renovations. HUD has extensive regulations that address the conduct of interim controls, as well as other lead-based paint activities, in Federally assisted housing. Some of HUD's interim controls would be regulated under this proposal as renovations, depending upon whether the particular interim control measure disturbs more than the threshold amount of paint. In most cases, the HUD regulations are comparable to, or more stringent than this proposal. In general, persons performing HUD-regulated interim controls must have taken a course in lead-safe work practices, which is also a requirement of this proposal. However, this proposal would not require dust clearance testing, a process required by HUD after interim control activities that disturb more than a minimal amount of lead-based paint. Finally, OSHA's Lead Exposure in Construction standard covers potential worker exposures to lead during many construction activities, including renovation, repair, and painting activities. Although this standard may cover many of the same projects as today's proposal, the requirements themselves do not overlap. The OSHA rule addresses the protection of the worker, this EPA proposal addresses the protection of the building occupants, particularly children under age 6. 5. Skills needed for compliance. This proposal would establish requirements for training renovators and dust sampling technicians; certifying renovators, dust sampling technicians, and entities engaged in renovation, repair, and painting activities; accrediting providers of renovation and dust sampling technician training; and for renovation work practices. Renovators and dust sampling technicians would have to take a course to learn the proper techniques for accomplishing the tasks they will perform during renovations. These courses are intended to provide them with the information they would need to comply with the rule based on the skills they already have. Entities would be required to apply for certification to perform renovations; this process does not require any special skills other than the ability to complete the application. They would also need to document the work they have done during renovations. This does not require any special skills. Training providers must be knowledgeable about delivering technical training. Training providers would be required to apply for accreditation to offer renovator and dust sampling technician courses. They would also be required to provide prior notification of such courses and provide information on the students trained after each such course. Completing the accreditation application and providing the required notification information does not require any special skills. 6. Small Business Advocacy Review Panel. Since the earliest stages of planning for this regulation under Section 402(c)(3) of TSCA, EPA has been concerned with potential small entity impacts. EPA conducted outreach to small entities, and, in 1999, convened a Small Business Advocacy Review Panel to obtain advice and recommendations of representatives of the small entities that would potentially be subject to this regulation's requirements. At that time, EPA was planning an initial regulation that would apply to renovations in target housing, with requirements for public and commercial building renovations, including child-occupied facility renovations, to follow at a later date. The small entity representatives (SERs) chosen for consultation reflect that initial emphasis. They included maintenance and renovation contractors, painting and decorating contractors, multi-family housing owners and operators, training providers/consultants, and representatives from several national contractor associations, the National Multi-Housing Council, and the National Association of Home Builders. After considering the existing lead-based paint activities regulations, and taking into account preliminary stakeholder feedback, EPA identified eight key elements of a potential renovation and remodeling regulation for the Panel's consideration. These elements were: • Applicability and scope. • Firm certification. • Individual training and certification. • Accreditation of training courses. • Work practice standards. • Prohibited practices. • Exterior clearance. • Interior clearance. EPA also developed several options for each of these key elements. Although the scope and applicability options specifically presented to the Panel covered only target housing, background information presented to the SERs and to the Panel members shows that EPA was also considering a regulation covering child-occupied facilities. More information on the Panel, its recommendations, and how EPA implemented them in the development of the program, are provided in Unit VIII.C.6 of the preamble to the 2006 Proposal (Ref. 1). EPA invites comments on all aspects of the supplemental proposal and its impacts on small entities. D. Unfunded Mandates Reform Act Under Title II of the Unfunded Mandates Reform Act (UMRA) (Public Law 104-4), EPA has determined that when this supplemental proposed rule is considered by itself, it does not contain a Federal mandate that may result in expenditures that exceed the inflation-adjusted UMRA threshold of $100 million in any 1 year by the private sector or by State, local, and Tribal governments in the aggregate. (When adjusted for inflation, the value of the UMRA threshold is over $118 million.) However, when considered in conjunction with the 2006 Proposal, the combined requirements will result in annual expenditures by the private sector above the UMRA threshold. Accordingly, EPA has prepared a written statement under section 202 of the UMRA which has been placed in the public docket for this rulemaking and is summarized here. 1. Authorizing legislation. This proposal is issued under the authority of TSCA sections 402(c)(3) and 404. 2. Cost-benefit analysis. EPA has prepared an analysis of the costs and benefits associated with this supplemental proposal, a copy of which is available in the docket for this rulemaking (Ref. 6). The Supplemental Economic Analysis presents the costs of the proposal as well as various regulatory options and is summarized in Unit VII.A. of this preamble. EPA has estimated that the total annualized costs of this supplemental proposal when using a 3% discount rate are $39 million per year, and that benefits are $64 million to $257 million per year. Using a 7% discount rate, costs are $43 million per year and benefits are $68 million to $272 million per year. 3. State, local, and Tribal government input. EPA has sought input from State, local and Tribal government representatives throughout the development of the renovation, repair, and painting program. EPA's experience in administering the existing lead-based paint activities program under TSCA section 402(a) suggests that these governments will play a critical role in the successful implementation of a national program to reduce exposures to lead-based paint hazards associated with renovation, repair, and painting activities. Consequently, as discussed in Unit III.C.2. of the preamble to the 2006 Proposal (Ref. 1), the Agency has met with State, local, and Tribal government officials on numerous occasions to discuss renovation issues. 4. Least burdensome option. EPA considered a wide variety of options for addressing the risks presented by renovation activities where lead-based paint is present. The Supplemental Economic Analysis analyzed several different options for the scope of the supplemental rule. As part of the development of the renovation, repair, and painting program, EPA has considered different options for the scope of the rule, various combinations of training and certification requirements for individuals who perform renovations, various combinations of work practice requirements, and various methods for ensuring that no lead-based paint hazards are left behind by persons performing renovations. Additional information on the options considered is available in Unit VIII.C.6. of the preamble for the 2006 Proposal (Ref. 1), and in the Supplemental Economic Analysis (Ref. 6). EPA has determined that the proposed option is the least burdensome option available that achieves the objective of this supplemental rule, which is to prevent the creation of new lead-based paint hazards from renovation, repair, and painting activities in child-occupied facilities. This rule does not contain a significant Federal intergovernmental mandate as described by section 203 of UMRA. Based on the definition of “small government jurisdiction” in RFA section 601, no State governments can be considered small. Small Territorial or Tribal governments could apply for authorization to administer and enforce this program, which would entail costs, but these small jurisdictions are under no obligation to do so. EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. Small governments operate schools that are child-occupied facilities. EPA generally measures a significant impact under UMRA as being expenditures, in the aggregate, of more than 1% of small government revenues in any one year. As explained in Unit VI.C.3., the rule is expected to result in small government impacts well under 1% of revenues. So EPA has determined that the rule does not significantly affect small governments. Nor does the rule uniquely affect small governments, as the rule is not targeted at small governments, does not primarily affect small governments, and does not impose a different burden on small governments than on other entities that operate child-occupied facilities. E. Federalism Pursuant to Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), EPA has determined that this proposed rule does not have “federalism implications,” because it will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Thus, Executive Order 13132 does not apply to this proposed rule. States would be able to apply for, and receive authorization to administer these proposed requirements, but would be under no obligation to do so. In the absence of a State authorization, EPA will administer these requirements. Nevertheless, in the spirit of the objectives of this Executive Order, and consistent with EPA policy to promote communications between the Agency and State and local governments, EPA has consulted with representatives of State and local governments in developing the renovation, repair, and painting program. These consultations are as described in the preamble to the 2006 Proposal (Ref. 1). EPA specifically solicits additional comment on this proposed rule from State and local officials. EPA is particularly interested in information on the number of public housing agencies who own or operate detached or off-site child-occupied facilities and this regulation's potential impacts on those agencies. F. Tribal Implications As required by Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (59 FR 22951, November 6, 2000), EPA has determined that this proposed rule does not have tribal implications because it will not have substantial direct effects on tribal governments, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in the Order. Tribes would be able to apply for, and receive authorization to administer these proposed requirements on Tribal lands, but Tribes would be under no obligation to do so. In the absence of a Tribal authorization, EPA will administer these requirements. While Tribes may operate child-occupied facilities covered by the rule such as kindergartens, pre-kindergartens, and daycare facilities, EPA has determined that this proposal would not have substantial direct effects on the tribal governments that operate these facilities. Thus, Executive Order 13175 does not apply to this rule. Although Executive Order 13175 does not apply to this rule, EPA consulted with Tribal officials and others by discussing potential renovation regulatory options for the renovation, repair, and painting program at several national lead program meetings hosted by EPA and other interested Federal agencies. EPA specifically solicits additional comment on this proposed rule from Tribal officials. G. Children's Health Protection Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to this supplemental rule because, when considered in conjunction with the 2006 Proposal, the combination would be designated as an “economically significant regulatory action” as defined by Executive Order 12866, and because the environmental health or safety risk addressed by this action have a disproportionate effect on children. Accordingly, EPA has evaluated the environmental health or safety effects of renovation, repair, and painting projects on children. Various aspects of this evaluation are discussed in the preamble to the 2006 Proposal (Ref. 1). The primary purpose of this supplemental proposed rule is to prevent the creation of new lead-based paint hazards from renovation, repair, and painting activities in child-occupied facilities. In the absence of this regulation, adequate lead-safe work practices are not likely to be employed during renovation, repair, and painting activities. EPA's analysis indicates that there will be approximately 916,000 exposures avoided per year to children under age 6 as a result of the rule. These children are projected to receive considerable benefits due to this regulation. H. Energy Effects This rule is not a “significant energy action” as defined in Executive Order 13211, entitled “Actions concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not likely to have any adverse effect on the supply, distribution, or use of energy. I. Technology Standards Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note), directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. In the 2006 Proposal, EPA proposed to adopt a number of work practice requirements that could be considered technical standards for performing renovation projects in residences that contain lead-based paint. This supplemental proposal would extend those work practice requirements to child-occupied facilities that contain lead-based paint. As discussed in Unit VIII.I. of the 2006 Proposal, EPA identified two potentially-applicable voluntary consensus standards (Ref. 1 at 1626). ASTM International (formerly the American Society for Testing and Materials) has developed 2 potentially-applicable documents: “Standard Practice for Clearance Examinations Following Lead Hazard Reduction Activities in Single-Family Dwellings and Child-Occupied Facilities” (Ref. 15), and “Standard Guide for Evaluation, Management, and Control of Lead Hazards in Facilities” (Ref. 16). With respect to the first document, EPA did not propose to require traditional clearance examinations, including dust sampling, following renovation projects. However, EPA did propose to require that a visual inspection for dust, debris, and residue be conducted after cleaning and before post-renovation cleaning verification is performed. The first ASTM document does contain information on conducting a visual inspection before collecting dust clearance samples. The second ASTM document is a comprehensive guide to identifying and controlling lead-based paint hazards. Some of the information in this document is relevant to the work practices that EPA proposed to require. Each of these ASTM documents represents state-of-the-art knowledge regarding the performance of these particular aspects of lead-based paint hazard evaluation and control practices and EPA continues to recommend the use of these documents where appropriate. However, because each of these documents is extremely detailed and encompasses many circumstances beyond the scope of this rulemaking, EPA determined that it would not be practical to incorporate these voluntary consensus standards into the 2006 Proposal. In addition, the 2006 Proposal contained a provision for EPA to recognize test kits that could be used by certified renovators to determine whether components to be affected by a renovation contain lead-based paint. Under that proposal, EPA would recognize those kits that meet certain performance standards for limited false positives and negatives. Further, EPA would also recognize only those kits that have been properly validated by a laboratory independent of the kit manufacturer. Although EPA did not propose to establish a particular method to be used for validating kits, for chemical spot test kits, EPA announced its intention to look to the ASTM document entitled “Standard Practice for Evaluating the Performance Characteristics of Qualitative Chemical Spot Test Kits for Lead in Paint” (Ref. 17) to determine whether a particular kit's validation is adequate. The provisions discussed here would apply equally to renovation projects in child-occupied facilities. EPA welcomes comments from entities potentially regulated by this supplemental proposal on this aspect of the proposed rulemaking. EPA specifically invites these entities to identify potentially applicable voluntary consensus standards and to explain why such standards should be used in this regulation. J. Environmental Justice Under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994), the Agency has assessed the potential impact of this proposal on minority and low-income populations. The results of this assessment are presented in the Supplemental Economic Analysis for this proposal, which is available in the public docket for this rulemaking (Ref. 6). The rule will not have disproportionately high and adverse human health or environmental effects on minority populations and low-income populations. List of Subjects in 40 CFR Part 745 Child-occupied facility, Environmental protection, Housing renovation, Lead, Lead-based paint, Renovation, Reporting and recordkeeping requirements. Dated: May 24, 2007. Stephen L. Johnson, Administrator. Therefore, it is proposed that 40 CFR chapter I be amended as follows: PART 745—[AMENDED] 1. The authority citation for part 745 continues to read as follows: Authority: 15 U.S.C. 2605, 2607, 2681-2692 and 42 U.S.C. 4852d. 2. Section 745.80 is revised to read as follows: § 745.80 Purpose. This subpart contains regulations developed under sections 402 and 406 of the Toxic Substances Control Act (15 U.S.C. 2682 and 2686) and applies to all renovations performed for compensation in target housing and child-occupied facilities. The purpose of this subpart is to ensure the following: (a) Owners and occupants of target housing and child-occupied facilities receive information on lead-based paint hazards before these renovations begin; and (b) Persons performing renovations regulated in accordance with § 745.82 are properly trained; renovators, dust sampling technicians, and firms performing these renovations are certified; and lead-safe work practices are followed during these renovations. 3. Section 745.81 is revised to read as follows: § 745.81 Effective dates. (a) Training, certification and accreditation requirements and work practice standards . The training, certification and accreditation requirements and work practice standards in this subpart are applicable as of [insert date 1 year after date of publication of the final rule in the Federal Register ] in any State or Indian Tribal area that does not have a renovation program that is authorized under subpart Q of this part. The training, certification and accreditation requirements and work practice standards in this subpart will become effective as follows: (1) Training programs . Effective [insert date 60 days after date of publication of the final rule in the Federal Register ], no training program may provide, offer, or claim to provide training or refresher training for EPA certification as a renovator or a dust sampling technician without accreditation from EPA under § 745.225. Training programs may apply for accreditation under § 745.225 beginning [insert date 1 year after date of publication of the final rule in the Federal Register ]. (2) Firms . Firms may apply for certification under § 745.89 beginning [insert date 18 months after date of publication of the final rule in the Federal Register ]. (i) No firm may perform, offer, or claim to perform renovations, as defined in this subpart, without certification from EPA under § 745.89 on or after [insert date 2 years after date of publication of the final rule in the Federal Register ]: (A) In any target housing where the firm obtains information indicating that a child under age 6 with a blood lead level greater than or equal to 10 μg/dL or the applicable State or local government level of concern, if lower, resides there, or in any target housing where the firm has not provided the owners and occupants with the opportunity to inform the firm that a child under age 6 with such a blood lead level resides there; (B) In any child-occupied facility where the firm obtains information indicating that the facility is used by a child under age 6 with a blood lead level greater than or equal to 10 μg/dL or the applicable State or local government level of concern, if lower, or in any child-occupied facility where the firm has not provided the owners and occupants with the opportunity to inform the firm that the facility is used by a child under age 6 with such a blood lead level; or (C) In target housing or child-occupied facilities constructed before 1960, unless, in the case of owner-occupied target housing, the firm has obtained a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides or is provided child care there. (ii) No firm may perform, offer, or claim to perform renovations, as defined in this subpart, without certification from EPA under § 745.89 on or after [insert date 3 years after date of publication of the final rule in the Federal Register ] in any target housing or child-occupied facility, unless, in the case of owner-occupied target housing, the firm has obtained a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides or is provided child care there. (3) Individuals . (i) All renovations, as defined in this subpart, must be directed by renovators certified in accordance with § 745.90(a) and performed by certified renovators or individuals trained in accordance with § 745.90(b)(2) on or after [insert date 2 years after date of publication of the final rule in the Federal Register ]: (A) In any target housing where the firm performing the renovation obtains information indicating that a child under age 6 with a blood lead level greater than or equal to 10 μg/dL or the applicable State or local government level of concern, if lower, resides there, or in any target housing where the firm has not provided the owners and occupants with the opportunity to inform the firm that a child under age 6 with such a blood lead level resides there; (B) In any child-occupied facility where the firm obtains information indicating that the facility is used by a child under age 6 with a blood lead level greater than or equal to 10 μg/dL or the applicable State or local government level of concern, if lower, or in any child-occupied facility where the firm has not provided the owners and occupants with the opportunity to inform the firm that the facility is used by a child under age 6 with such a blood lead level; or (C) In target housing or child-occupied facilities constructed before 1960, unless, in the case of owner-occupied target housing, the firm performing the renovation has obtained a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides or is provided child care there. (ii) All renovations, as defined in this subpart, must be directed by renovators certified in accordance with § 745.90(a) and performed by certified renovators or individuals trained in accordance with § 745.90(b)(2) on or after [insert date 3 years after date of publication of the final rule in the Federal Register ] in any target housing or child-occupied facility, unless, in the case of owner-occupied target housing, the firm performing the renovation has obtained a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides or is provided child care there. (4) Work practices . (i) All renovations, as defined in § 745.83, must be performed in accordance with the work practice standards in § 745.85 and the associated recordkeeping requirements in § 745.86(b)(6) and (b)(7) on or after [insert date 2 years after date of publication of the final rule in the Federal Register ]: (A) In any target housing where the firm performing the renovation obtains information indicating that a child under age 6 with a blood lead level greater than or equal to 10 μg/dL or the applicable State or local government level of concern, if lower, resides there, or in any target housing where the firm has not provided the owners and occupants with the opportunity to inform the firm that a child under age 6 with such a blood lead level resides there; (B) In any child-occupied facility where the firm obtains information indicating that the facility is used by a child under age 6 with a blood lead level greater than or equal to 10 μg/dL or the applicable State or local government level of concern, if lower, or in any child-occupied facility where the firm has not provided the owners and occupants with the opportunity to inform the firm that the facility is used by a child under age 6 with such a blood lead level; or (C) In target housing or child-occupied facilities constructed before 1960, unless, in the case of owner-occupied target housing, the firm performing the renovation has obtained a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides or is provided child care there. (ii) All renovations, as defined in this subpart, must be performed in accordance with the work practice standards in § 745.85 and the associated recordkeeping requirements in § 745.86(b)(6) and (b)(7) on or after [insert date 3 years after date of publication of the final rule in the Federal Register ] in any target housing or child-occupied facility, unless, in the case of owner-occupied target housing, the firm performing the renovation has obtained a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides or is provided child care there. (5) The suspension and revocation provisions in § 745.91 are effective [insert date 2 years after date of publication of the final rule in the Federal Register ]. (b) Renovation-specific pamphlet . Before [insert date 8 months after date of publication of the final rule in the Federal Register ], renovators or firms performing renovations in States and Indian Tribal areas without an authorized program may provide owners and occupants with either of the following EPA pamphlets: Protect Your Family From Lead in Your Home or Protect Your Family from Lead During Renovation, Repair & Painting . After that date, Protect Your Family from Lead During Renovation, Repair & Painting must be used exclusively. (c) Pre-Renovation Education Rule . With the exception of the requirement to use the pamphlet titled Protect Your Family from Lead During Renovation, Repair & Painting , the provisions of the Pre-Renovation Education Rule in this subpart have been in effect since June 1999. 4. Section 745.82 is revised to read as follows: § 745.82 Applicability. (a) This subpart applies to all renovations performed for compensation in target housing and child-occupied facilities, except for the following: (1) Minor repair and maintenance activities (including minor electrical work and plumbing) that disrupt 2 square feet or less of painted surface per component. (2) Renovations in target housing or child-occupied facilities in which a written determination has been made by an inspector (certified pursuant to either Federal regulations at § 745.226 or a State or Tribal certification program authorized pursuant to § 745.324) that the components affected by the renovation are free of paint or other surface coatings that contain lead equal to or in excess of 1.0 milligrams/per square centimeter (mg/cm 2 ) or 0.5% by weight, where the firm performing the renovation has obtained a copy of the determination. (3) Renovations in target housing or child-occupied facilities in which a certified renovator, using an acceptable test kit and following the kit manufacturer's instructions, has determined that the components affected by the renovation are free of paint or other surface coatings that contain lead equal to or in excess of 1.0 mg/cm 2 or 0.5% by weight. (b) The information distribution requirements in § 745.84 do not apply to emergency renovation operations, which are renovation activities that were not planned but result from a sudden, unexpected event (such as non-routine failures of equipment) that, if not immediately attended to, presents a safety or public health hazard, or threatens equipment and/or property with significant damage. Interim controls performed in response to an elevated blood lead level in a resident child are also emergency renovation operations. The work practice, training, and certification requirements in §§ 745.85, 745.89, 745.90 and the recordkeeping requirements in § 745.86(b)(6) and (b)(7) apply to emergency renovation operations to the extent practicable. (c) The work practice standards for renovation activities in § 745.85 apply to all renovations covered by this subpart, except for renovations in target housing for which the firm performing the renovation has obtained a statement signed by the owner that the renovation will occur in the owner's residence and no child under age 6 resides or is provided child care there. For the purposes of this section, a child resides in the primary residence of his or her custodial parents, legal guardians, and foster parents. A child also resides in the primary residence of an informal caretaker if the child lives and sleeps most of the time at the caretaker's residence. 5. Section 745.83 is amended as follows: a. Remove the definition of “Emergency renovation operations.” b. Revise the definition of “Pamphlet” and the definition of “Renovator.” c. Add 13 definitions in alphabetic order. § 745.83 Definitions. Acceptable test kit means a commercially available kit recognized by EPA pursuant to section 405 of TSCA as being capable of allowing a user to accurately determine the presence of lead at levels equal to or in excess of 1.0 milligrams per square centimeter, or more than 0.5% lead by weight, in a paint chip, paint powder, or painted surface. Child-occupied facility means a building, or portion of a building, constructed prior to 1978, visited regularly by the same child, under 6 years of age, on at least two different days within any week (Sunday through Saturday period), provided that each day's visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at least 60 hours. Child-occupied facilities may include, but are not limited to, day care centers, preschools and kindergarten classrooms. Child-occupied facilities may be located in target housing or in public or commercial buildings. In public or commercial buildings that contain child-occupied facilities, the child-occupied facility encompasses only those common areas that are routinely used by children under age 6, such as restrooms and cafeterias. Common areas that children under age 6 only pass through, such as hallways, stairways, and garages are not included. In addition, for public or commercial buildings that contain child-occupied facilities, the child-occupied facility encompasses only the exterior sides of the building that are immediately adjacent to the child-occupied facility or the common areas routinely used by children under age 6. Cleaning verification card means a card developed and distributed, or otherwise approved, by EPA for the purpose of determining, through comparison of disposable cleaning cloths with the card, whether post-renovation cleaning has been properly completed. Component or building component means specific design or structural elements or fixtures of a building or residential dwelling that are distinguished from each other by form, function, and location. These include, but are not limited to, interior components such as: Ceilings, crown molding, walls, chair rails, doors, door trim, floors, fireplaces, radiators and other heating units, shelves, shelf supports, stair treads, stair risers, stair stringers, newel posts, railing caps, balustrades, windows and trim (including sashes, window heads, jambs, sills or stools and troughs), built in cabinets, columns, beams, bathroom vanities, counter tops, and air conditioners; and exterior components such as: Painted roofing, chimneys, flashing, gutters and downspouts, ceilings, soffits, fascias, rake boards, cornerboards, bulkheads, doors and door trim, fences, floors, joists, lattice work, railings and railing caps, siding, handrails, stair risers and treads, stair stringers, columns, balustrades, window sills or stools and troughs, casings, sashes and wells, and air conditioners. Dry disposable cleaning cloth means a commercially available dry, electrostatically charged, white disposable cloth designed to be used for cleaning hard surfaces such as uncarpeted floors or counter tops. Firm means a company, partnership, corporation, sole proprietorship or individual doing business, association, or other business entity; a Federal, State, Tribal, or local government agency; or a nonprofit organization. HEPA-equipped vacuum means a vacuum equipped with a high efficiency particulate air filter. Interim controls means a set of measures designed to temporarily reduce human exposure or likely exposure to lead-based paint hazards, including specialized cleaning, repairs, maintenance, painting, temporary containment, ongoing monitoring of lead-based paint hazards or potential hazards, and the establishment and operation of management and resident education programs. Pamphlet means the EPA pamphlet titled Protect Your Family from Lead During Renovation, Repair & Painting developed under section 406(a) of TSCA for use in complying with section 406(b) of TSCA, or any State or Tribal pamphlet approved by EPA pursuant to 40 CFR 745.326 that is developed for the same purpose. This includes reproductions of the pamphlet when copied in full and without revision or deletion of material from the pamphlet (except for the addition or revision of State or local sources of information). Before [insert date 8 months after date of publication of the final rule in the Federal Register ], the term “pamphlet” also means any pamphlet developed by EPA under section 406(a) of TSCA or any State or Tribal pamphlet approved by EPA pursuant to § 745.326. Renovation means the modification of any existing structure, or portion thereof, that results in the disturbance of painted surfaces, unless that activity is performed as part of an abatement as defined by this part (40 CFR 745.223). The term renovation includes (but is not limited to): The removal or modification of painted surfaces or painted components (e.g., modification of painted doors, surface preparation activity (such as sanding, scraping, or other such activities that may generate paint dust)); the removal of large structures (e.g., walls, ceiling, large surface replastering, major re-plumbing); and window replacement. A renovation performed for the purpose of converting a building, or part of a building, into target housing or a child-occupied facility is a renovation under this subpart. Renovator means a person who either performs or directs uncertified workers who perform renovations. A certified renovator is a renovator who has successfully completed a renovator course accredited by EPA or an EPA-authorized State or Tribal program. Training hour means at least 50 minutes of actual learning, including, but not limited to, time devoted to lecture, learning activities, small group activities, demonstrations, evaluations, and hands-on experience. Wet disposable cleaning cloth means a commercially available, pre-moistened white disposable cloth designed to be used for cleaning hard surfaces such as uncarpeted floors or counter tops. Wet mopping system means a device with the following characteristics: A long handle, a mop head designed to be used with disposable absorbent cleaning pads, a reservoir for cleaning solution, and a built-in mechanism for distributing or spraying the cleaning solution onto a floor. Work area means the area that the certified renovator establishes to contain all of the dust and debris generated by a renovation, based on the certified renovator's evaluation of the extent and nature of the activity and the specific work practices that will be used. § 745.84 [Removed] 6. Section 745.84 is removed. § 745.85 [Redesignated] 7. Section 745.85 is redesignated as § 745.84. 8. Newly designated § 745.84 is amended as follows: a. Revise the introductory text of paragraph (a) and revise paragraph (a)(2)(i). b. Revise the introductory text of paragraph (b) and revise paragraphs (b)(2) and (b)(4). c. Redesignate paragraph (c) as paragraph (d). d. Add a new paragraph (c). c. Revise the introductory text of newly designated paragraph (d). § 745.84 Information distribution requirements. (a) Renovations in dwelling units. No more than 60 days before beginning renovation activities in any residential dwelling unit of target housing, the firm performing the renovation must: (1) * * * (2) * * * (i) Obtain, from the adult occupant, a written acknowledgment that the occupant has received the pamphlet; or certify in writing that a pamphlet has been delivered to the dwelling and that the firm performing the renovation has been unsuccessful in obtaining a written acknowledgment from an adult occupant. Such certification must include the address of the unit undergoing renovation, the date and method of delivery of the pamphlet, names of the persons delivering the pamphlet, reason for lack of acknowledgment (e.g., occupant refuses to sign, no adult occupant available), the signature of a representative of the firm performing the renovation, and the date of signature. (b) Renovations in common areas. No more than 60 days before beginning renovation activities in common areas of multi-unit target housing, the firm performing the renovation must: (1) * * * (2) Notify in writing, or ensure written notification of, each affected unit and make the pamphlet available upon request prior to the start of renovation. Such notification shall be accomplished by distributing written notice to each affected unit. The notice shall describe the general nature and locations of the planned renovation activities; the expected starting and ending dates; and a statement of how the occupant can obtain the pamphlet, at no charge, from the firm performing the renovation. (3) * * * (4) If the scope, locations, or expected starting and ending dates of the planned renovation activities change after the initial notification, the firm performing the renovation must provide further written notification to the owners and occupants providing revised information on the ongoing or planned activities. This subsequent notification must be provided before the firm performing the renovation initiates work beyond that which was described in the original notice. (c) Renovations in child-occupied facilities . (1) No more than 60 days before beginning renovation activities in any child-occupied facility, the firm performing the renovation must: (i) Provide the owner of the building with the pamphlet, and comply with one of the following: (A) Obtain, from the owner, a written acknowledgment that the owner has received the pamphlet. (B) Obtain a certificate of mailing at least 7 days prior to the renovation. (ii) If the child-occupied facility is not the owner of the building, provide an adult representative of the child-occupied facility with the pamphlet, and comply with one of the following: (A) Obtain, from the adult representative, a written acknowledgment that the adult representative has received the pamphlet; or certify in writing that a pamphlet has been delivered to the facility and that the firm performing the renovation has been unsuccessful in obtaining a written acknowledgment from an adult representative. Such certification must include the address of the child-occupied facility undergoing renovation, the date and method of delivery of the pamphlet, names of the persons delivering the pamphlet, reason for lack of acknowledgment (e.g., representative refuses to sign), the signature of a representative of the firm performing the renovation, and the date of signature. (B) Obtain a certificate of mailing at least 7 days prior to the renovation. (2) Provide the parents and guardians of children using the child-occupied facility with the pamphlet and information describing the general nature and locations of the renovation and the anticipated completion date by complying with one of the following: (i) Mail or hand-deliver the pamphlet and the renovation information to each parent or guardian of a child using the child-occupied facility. (ii) While the renovation is ongoing, post informational signs describing the general nature and locations of the renovation and the anticipated completion date. These signs must be posted in areas where they can be seen by the parents or guardians of the children frequenting the child-occupied facility. The signs must be accompanied by a posted copy of the pamphlet or information on how interested parents or guardians can review a copy of the pamphlet or obtain a copy from the renovation firm at no cost to the parents or guardians. (d) Written acknowledgment . The written acknowledgments required by paragraphs (a)(1)(i), (a)(2)(i), (b)(1)(i), (c)(1)(i)(A), and (c)(1)(ii)(A) of this section must: 9. Section 745.85 is added to subpart E to read as follows: § 745.85 Work practice standards. (a) Standards for renovation activities . Renovations must be performed by certified firms using certified renovators as directed in § 745.89. (1) Occupant protection. Firms must post signs clearly defining the work area and warning occupants and other persons not involved in renovation activities to remain outside of the work area. These signs must be posted before beginning the renovation and must remain in place and readable until the renovation and the post-renovation cleaning verification have been completed. If warning signs have been posted in accordance with 24 CFR 35.1345(b)(2) or 29 CFR 1926.62(m), additional signs are not required by this section. (2) Containing the work area. Before beginning the renovation, the firm must isolate the work area so that no visible dust or debris leaves the work area while the renovation is being performed. (i) Interior renovations . The firm must: (A) Remove all objects from the work area, including furniture, rugs, and window coverings, or cover them with plastic sheeting or other impermeable material with all seams and edges taped or otherwise sealed. (B) Close and cover all ducts opening in the work area with taped-down plastic sheeting or other impermeable material. (C) Close windows and doors in the work area. Doors must be covered with plastic sheeting or other impermeable material. Doors used as an entrance to the work area must be covered with plastic sheeting or other impermeable material in a manner that allows workers to pass through while confining dust and debris to the work area. (D) Cover the floor surface of the work area with plastic sheeting or other impermeable material with all seams taped and all edges secured at the perimeter of the work area. (E) Ensure that all personnel, tools, and other items including waste are free of dust and debris when leaving the work area. Alternatively, the paths used to reach the exterior of the building must be covered with plastic sheeting or other impermeable material to prevent the spread of lead contaminated dust and debris outside the work area. (ii) Exterior renovations . The firm must: (A) Close all doors and windows within 20 feet of the renovation. On multi-story buildings, close all doors and windows within 20 feet of the renovation on the same floor as the renovation, and close all doors and windows on all floors below that are the same horizontal distance from the renovation. (B) Ensure that doors within the work area that must be used while the job is being performed are covered with plastic sheeting or other impermeable material in a manner that allows workers to pass through while confining dust and debris to the work area. (C) Cover the ground with plastic sheeting or other disposable impermeable material extending out from the edge of the structure a sufficient distance to collect falling paint debris. (3) Waste from renovations . (i) Waste from renovation activities must be contained to prevent releases of dust and debris before the waste is removed from the work area for storage or disposal. If a chute is used to remove waste from the work area, it must be covered. (ii) At the conclusion of each work day and at the conclusion of the renovation, waste that has been collected from renovation activities must be stored under containment, in an enclosure, or behind a barrier that prevents release of dust and debris out of the work area and prevents access to dust and debris. (iii) When the firm transports waste from renovation activities, the firm must contain the waste to prevent identifiable releases of dust and debris. (4) Cleaning the work area. After the renovation has been completed, the firm must clean the work area until no visible dust, debris or residue remains. (i) Interior and exterior renovations. The firm must: (A) Pick up all paint chips and debris. (B) Remove the protective sheeting. Mist the sheeting before folding it, fold the dirty side inward, and either tape shut to seal or seal in heavy-duty bags. Sheeting used to isolate contaminated rooms from non-contaminated rooms must remain in place until after the cleaning and removal of other sheeting. Dispose of the sheeting as waste. (ii) Additional cleaning for interior renovations . The firm must clean all objects and surfaces in and around the work area in the following manner, cleaning from higher to lower: (A) Walls . Clean walls starting at the ceiling and working down to the floor by either vacuuming with a HEPA-equipped vacuum or wiping with a damp cloth. (B) Remaining surfaces. Thoroughly vacuum all remaining surfaces and objects in the work area, including furniture and fixtures, with a HEPA-equipped vacuum. The HEPA-equipped vacuum must be equipped with a beater bar when vacuuming carpets and rugs. Where feasible, floor surfaces underneath a rug or carpeting must also be thoroughly vacuumed with a HEPA-equipped vacuum. (C) Wipe all remaining surfaces and objects in the work area, except for carpeted or upholstered surfaces, with a damp cloth. Mop uncarpeted floors thoroughly, using a 2-bucket mopping method that keeps the wash water separate from the rinse water, or using a wet mopping system. (b) Standards for post-renovation cleaning verification . (1) Interiors . (i) A certified renovator must perform a visual inspection to determine whether visible amounts of dust, debris or residue are still present. If visible amounts of dust, debris or residue are present, these conditions must be eliminated by re-cleaning and another visual inspection must be performed. (ii) After a successful visual inspection, a certified renovator must: (A) Verify that each windowsill in the work area has been adequately cleaned, using the following procedure. ( 1 ) Wipe the windowsill with a wet disposable cleaning cloth that is damp to the touch. If the cloth matches the cleaning verification card, the windowsill has been adequately cleaned. ( 2 ) If the cloth does not match the cleaning verification card, re-clean the windowsill as directed in paragraphs (a)(4)(ii)(B) and (a)(4)(ii)(C) of this section, then either use a new cloth or fold the used cloth in such a way that an unused surface is exposed, and wipe the windowsill again. If the cloth matches the cleaning verification card, that windowsill has been adequately cleaned. ( 3 ) If the cloth does not match the cleaning verification card, clean that windowsill again as directed in paragraphs (a)(4)(ii)(B) and (a)(4)(ii)(C) of this section and wait for 1 hour or until the windowsill has dried completely, whichever is longer. ( 4 ) After waiting for the windowsill to dry, wipe the windowsill with dry disposable cleaning cloths until a cloth, or section of cloth, used to wipe the windowsill matches the cleaning verification card. (B) Wipe uncarpeted floors within the work area with a wet disposable cleaning cloth, using an application device with a long handle and a head to which the cloth is attached. The cloth must remain damp at all times while it is being used to wipe the floor for post-renovation cleaning verification. If the floor surface within the work area is greater than 40 square feet, the floor within the work area must be divided into roughly equal sections that are each less than 40 square feet. Wipe each such section separately with a new wet disposable cleaning cloth. If the cloth used to wipe each section of the floor within the work area matches the cleaning verification card, the floor has been adequately cleaned. ( 1 ) If the cloth used to wipe a particular floor section does not match the cleaning verification card, re-clean that section of the floor as directed in paragraphs (a)(4)(ii)(B) and (a)(4)(ii)(C) of this section, then use a new wet disposable cleaning cloth to wipe that section again. If the cloth matches the cleaning verification card, that section of the floor has been adequately cleaned. ( 2 ) If the cloth used to wipe a particular floor section does not match the cleaning verification card after the floor has been re-cleaned, clean that section of the floor again as directed in paragraphs (a)(4)(ii)(B) and (a)(4)(ii)(C) of this section and wait for 1 hour or until the entire floor within the work area has dried completely, whichever is longer. ( 3 ) After waiting for the entire floor within the work area to dry, wipe those sections of the floor that have not yet achieved post-renovation cleaning verification with dry disposable cleaning cloths until a cloth that has wiped those sections of the floor matches the cleaning verification card. This wiping must also be performed using an application device with a long handle and a head to which the cloths are attached. (iii) Dust clearance sampling may be performed instead of, or in addition to, the procedures identified in paragraph (b)(1)(ii) of this section. If dust clearance sampling is performed, it must be performed in accordance with § 745.227(e)(8) through (e)(9), except that a dust sampling technician certified in accordance with this subpart may collect and report the results of the required samples. (iv) When the work area passes the post-renovation cleaning verification or dust clearance sampling, remove the warning signs. (2) Exteriors . A certified renovator must perform a visual inspection to determine whether visible amounts of dust, debris or residue are still present. If visible amounts of dust, debris or residue are present, these conditions must be eliminated and another visual inspection must be performed. When the area passes the visual inspection, remove the warning signs. (c) Activities conducted after post-renovation cleaning verification . Activities that do not disturb paint, such as applying paint to walls that have already been prepared, are not regulated by this subpart if they are conducted after post-renovation cleaning verification has been performed. 10. Section 745.86 is amended by revising paragraph (a) and adding new paragraphs (b)(6) and (b)(7) to read as follows: § 745.86 Recordkeeping requirements. (a) Firms performing renovations or conducting dust sampling must retain and, if requested, make available to EPA all records necessary to demonstrate compliance with this subpart for a period of 3 years following completion of the renovation or dust sampling activities. This 3-year retention requirement does not supersede longer obligations required by other provisions for retaining the same documentation, including any applicable State or Tribal laws or regulations. (b) * * * (6) Any signed and dated statements received from owner-occupants that no children under age 6 reside or are provided child care in housing being renovated which document that the requirements of § 745.85 do not apply. These statements must include a declaration that the renovation will occur in the owner's residence, a declaration that no children under age 6 reside or are provided child care there, the address of the unit undergoing renovation, the owner's name, the signature of the owner, and the date of signature. These statements must be written in the same language as the text of the renovation contract, if any. This requirement includes any statements received from owners or occupants that a child under age 6 with a blood lead level that equals or exceeds 10 μg/dL, or an applicable State or local government level of concern, if lower, resides or is provided child care there. (7) Documentation of compliance with the requirements of § 745.85, including documentation that a certified renovator was assigned to the project, the certified renovator provided on-the-job training for uncertified workers used on the project, the certified renovator performed or directed uncertified workers who performed all of the tasks described in § 745.85(a), and the certified renovator performed the post-renovation cleaning verification described in § 745.85(b). This documentation must include a copy of the certified renovator's or dust sampling technician's training certificate, and signed and dated descriptions of how activities performed by the certified renovator or dust sampling technician, including worker training activities, sign posting, work area containment, waste handling, cleaning, and post-renovation cleaning verification or clearance were conducted in compliance with this subpart. The descriptions of these activities must include a certification by the record preparer that the descriptions are complete and accurate. 11. Section 745.87 is amended by revising paragraph (e) to read as follows: § 745.87 Enforcement and inspections. (e) Lead-based paint is assumed to be present at renovations covered by this subpart. EPA may conduct inspections and issue subpoenas pursuant to the provisions of TSCA section 11 (15 U.S.C. 2610) to ensure compliance with this subpart. § 745.88 [Removed] 12. Section 745.88 is removed. 13. Section 745.89 is added to subpart E to read as follows: § 745.89 Firm certification. (a) Initial certification . (1) Firms that perform renovations for compensation must apply to EPA for certification to perform renovations or dust sampling. To apply, a firm must submit to EPA a completed “Application for Firms,” signed by an authorized agent of the firm, and pay at least the correct amount of fees. If a firm pays more than the correct amount of fees, EPA will reimburse the firm for the excess amount. (2) After EPA receives a firm's application, EPA will take one of the following actions within 90 days of the date the application is received: (i) EPA will approve a firm's application if EPA determines that it is complete and that the environmental compliance history of the firm, its principals, or its key employees does not show an unwillingness or inability to maintain compliance with environmental statutes or regulations. An application is complete if it contains all of the information requested on the form and includes at least the correct amount of fees. When EPA approves a firm's application, EPA will issue the firm a certificate with an expiration date not more than 3 years from the date the application is approved. EPA certification allows the firm to perform renovations covered by this section in any State or Indian Tribal area that does not have a renovation program that is authorized under subpart Q of this part. (ii) EPA will request a firm to supplement its application if EPA determines that the application is incomplete. If EPA requests a firm to supplement its application, the firm must submit the requested information or pay the additional fees within 30 days of the date of the request. (iii) EPA will not approve a firm's application if the firm does not supplement its application in accordance with paragraph (a)(2)(ii) of this section or if EPA determines that the environmental compliance history of the firm, its principals, or its key employees demonstrates an unwillingness or inability to maintain compliance with environmental statutes or regulations. EPA will send the firm a letter giving the reason for not approving the application. EPA will not refund the application fees. A firm may reapply for certification at any time by filing a new, complete application that includes the correct amount of fees. (b) Re-certification . To maintain its certification, a firm must be re-certified by EPA every 3 years. (1) Timely and complete application. To be re-certified, a firm must submit a complete application for re-certification. A complete application for re-certification includes a completed “Application for Firms” which contains all of the information requested by the form and is signed by an authorized agent of the firm, noting on the form that it is submitted as a re-certification. A complete application must also include at least the correct amount of fees. If a firm pays more than the correct amount of fees, EPA will reimburse the firm for the excess amount. (i) An application for re-certification is timely if it is postmarked 90 days or more before the date the firm's current certification expires. If the firm's application is complete and timely, the firm's current certification will remain in effect until its expiration date or until EPA has made a final decision to approve or disapprove the re-certification application, whichever is later. (ii) If the firm submits a complete re-certification application less than 90 days before its current certification expires, and EPA does not approve the application before the expiration date, the firm's current certification will expire and the firm will not be able to conduct renovations until EPA approves its re-certification application. (iii) If the firm fails to obtain recertification before the firm's current certification expires, the firm must not perform renovations or dust sampling until it is certified anew pursuant to paragraph (a) of this section. (2) EPA action on an application. After EPA receives a firm's application for re-certification, EPA will review the application and take one of the following actions within 90 days of receipt: (i) EPA will approve a firm's application if EPA determines that it is timely and complete and that the environmental compliance history of the firm, its principals, or its key employees does not show an unwillingness or inability to maintain compliance with environmental statutes or regulations. When EPA approves a firm's application for re-certification, EPA will issue the firm a new certificate with an expiration date 3 years from the date that the firm's current certification expires. EPA certification allows the firm to perform renovations or dust sampling covered by this section in any State or Indian Tribal area that does not have a renovation program that is authorized under subpart Q of this part. (ii) EPA will request a firm to supplement its application if EPA determines that the application is incomplete. (iii) EPA will not approve a firm's application if it is not received or is not complete as of the date that the firm's current certification expires, or if EPA determines that the environmental compliance history of the firm, its principals, or its key employees demonstrates an unwillingness or inability to maintain compliance with environmental statutes or regulations. EPA will send the firm a letter giving the reason for not approving the application. EPA will not refund the application fees. A firm may reapply for certification at any time by filing a new application and paying the correct amount of fees. (c) Amendment of certification . A firm must amend its certification within 45 days of the date a change occurs to information included in the firm's most recent application. If the firm fails to amend its certification within 45 days of the date the change occurs, the firm may not perform renovations or dust sampling until its certification is amended. (1) To amend a certification, a firm must submit a completed “Application for Firms,” signed by an authorized agent of the firm, noting on the form that it is submitted as an amendment and indicating the information that has changed. The firm must also pay at least the correct amount of fees. (2) If additional information is needed to process the amendment, or the firm did not pay the correct amount of fees, EPA will request the firm to submit the necessary information or fees. The firm's certification is not amended until the firm complies with the request. (3) Amending a certification does not affect the certification expiration date. (d) Firm responsibilities . Firms performing renovations or dust sampling must ensure that: (1)(i) All persons performing renovation activities on behalf of the firm are either certified renovators or have been trained by a certified renovator in accordance with § 745.90. (ii) All persons performing dust sampling on behalf of the firm are certified as either risk assessors, inspectors, or dust sampling technicians. (2) A certified renovator is assigned to each renovation performed by the firm and discharges all of the certified renovator responsibilities identified in § 745.90; and (3) All renovations performed by the firm are performed in accordance with the work practice standards in § 745.85. 14. Section 745.90 is added to subpart E to read as follows: § 745.90 Renovator and dust sampling technician certification. (a) Renovator and dust sampling technician certification. (1) To become a certified renovator or dust sampling technician, a person must successfully complete the appropriate course accredited by EPA under § 745.225 or by a State or Tribal program that is authorized under subpart Q of this part. The course completion certificate serves as proof of certification. EPA renovator certification allows the certified individual to perform renovations covered by this section in any State or Indian Tribal area that does not have a renovation program that is authorized under subpart Q of this part. EPA dust sampling technician certification allows the certified individual to perform dust sampling covered by this section in any State or Indian Tribal area that does not have a renovation program that is authorized under subpart Q of this part. (2) To maintain renovator or dust sampling technician certification, a person must complete a renovator or dust sampling technician refresher course accredited by EPA under § 745.225 or by a State or Tribal program that is authorized under subpart Q of this part within 3 years of the date the person completed the initial course described in paragraph (a)(1) of this section. If the person does not complete a refresher course within this time, the person must re-take the initial course to become certified again. (3) Persons who have a valid lead-based paint abatement supervisor or worker certification issued by EPA under § 745.226 or by a State or Tribal program authorized under subpart Q of this part are also deemed to be certified renovators. (4) Persons who have a valid lead-based paint inspector or risk assessor certification issued by EPA under § 745.226 or by a State or Tribal program authorized under subpart Q of this part are also deemed to be certified dust sampling technicians. (b) Renovator responsibilities . Certified renovators are responsible for ensuring compliance with § 745.85 at all renovations to which they are assigned. A certified renovator: (1) Must perform all of the tasks described in § 745.85(b) and must either perform or direct uncertified workers who perform all of the tasks described in § 745.85(a). (2) Must provide training to uncertified workers on the lead-safe work practices they will be using in performing their assigned tasks, how to isolate the work area and maintain the integrity of the containment barriers, and how to avoid spreading dust or debris beyond the work area. (3) Must be physically present at the work site when the signs required by § 745.85(a)(1) are posted, while the work area containment required by § 745.85(a)(2) is being established, and while the work area cleaning required by § 745.85(a)(4) is performed. (4) Must direct work being performed by uncertified persons to ensure that lead-safe work practices are being followed, the integrity of the containment barriers is maintained, and dust or debris is not spread beyond the work area. (5) Must be available, either on-site or by telephone, at all times that renovations are being conducted. (6) When requested by the entity contracting for renovation services, must use an acceptable test kit to determine whether components to be affected by the renovation contain lead-based paint. (7) Must have with them at the work site copies of their initial course completion certificate and their most recent refresher course completion certificate. (c) Dust sampling technician responsibilities . A certified dust sampling technician: (1) Must collect dust samples in accordance with § 745.227(e)(8), must send the collected samples to a laboratory recognized by EPA under TSCA section 405(b), and must compare the results to the clearance levels in accordance with § 745.227(e)(8). (2) Must have with them at the work site copies of their initial course completion certificate and their most recent refresher course completion certificate. 15. Section 745.91 is added to subpart E to read as follows: § 745.91 Suspending, revoking, or modifying an individual's or firm's certification. (a)(1) Grounds for suspending, revoking or modifying an individual's certification. EPA may suspend, revoke, or modify an individual's certification if the individual fails to comply with Federal lead-based paint statutes or regulations. EPA may also suspend, revoke, or modify a certified renovator's certification if the renovator fails to ensure that all assigned renovations comply with § 745.85. In addition to an administrative or judicial finding of violation, execution of a consent agreement in settlement of an enforcement action constitutes, for purposes of this section, evidence of a failure to comply with relevant statutes or regulations. (2) Grounds for suspending, revoking or modifying a firm's certification. EPA may suspend, revoke, or modify a firm's certification if the firm: (i) Submits false or misleading information to EPA in its application for certification or re-certification. (ii) Fails to maintain or falsifies records required in § 745.86. (iii) Fails to comply, or an individual performing a renovation on behalf of the firm fails to comply, with Federal lead-based paint statutes or regulations. In addition to an administrative or judicial finding of violation, execution of a consent agreement in settlement of an enforcement action constitutes, for purposes of this section, evidence of a failure to comply with relevant statutes or regulations. (b) Process for suspending, revoking, or modifying certification . (1) Prior to taking action to suspend, revoke, or modify an individual's or firm's certification, EPA will notify the affected entity in writing of the following: (i) The legal and factual basis for the proposed suspension, revocation, or modification. (ii) The anticipated commencement date and duration of the suspension, revocation, or modification. (iii) Actions, if any, which the affected entity may take to avoid suspension, revocation, or modification, or to receive certification in the future. (iv) The opportunity and method for requesting a hearing prior to final suspension, revocation, or modification. (2) If an individual or firm requests a hearing, EPA will: (i) Provide the affected entity an opportunity to offer written statements in response to EPA's assertions of the legal and factual basis for its proposed action. (ii) Appoint an impartial official of EPA as Presiding Officer to conduct the hearing. (3) The Presiding Officer will: (i) Conduct a fair, orderly, and impartial hearing within 90 days of the request for a hearing. (ii) Consider all relevant evidence, explanation, comment, and argument submitted. (iii) Notify the affected entity in writing within 90 days of completion of the hearing of his or her decision and order. Such an order is a final agency action which may be subject to judicial review. (4) If EPA determines that the public health, interest, or welfare warrants immediate action to suspend the certification of any individual or firm prior to the opportunity for a hearing, it will: (i) Notify the affected entity in accordance with paragraph (b)(1)(i) through (b)(1)(iii) of this section, explaining why it is necessary to suspend the entity's certification before an opportunity for a hearing. (ii) Notify the affected entity of its right to request a hearing on the immediate suspension within 15 days of the suspension taking place and the procedures for the conduct of such a hearing. (5) Any notice, decision, or order issued by EPA under this section, any transcript or other verbatim record of oral testimony, and any documents filed by a certified individual or firm in a hearing under this section will be available to the public, except as otherwise provided by section 14 of TSCA or by part 2 of this title. Any such hearing at which oral testimony is presented will be open to the public, except that the Presiding Officer may exclude the public to the extent necessary to allow presentation of information which may be entitled to confidential treatment under section 14 of TSCA or part 2 of this title. (6) EPA will maintain a publicly available list of entities whose certification has been suspended, revoked, modified or reinstated. 16. Section 745.220 is amended by revising paragraph (a) to read as follows: § 745.220 Scope and applicability. (a) This subpart contains procedures and requirements for the accreditation of training programs for lead-based paint activities and renovations, procedures and requirements for the certification of individuals and firms engaged in lead-based paint activities, and work practice standards for performing such activities. This subpart also requires that, except as discussed below, all lead-based paint activities, as defined in this subpart, be performed by certified individuals and firms. 17. Section 745.225 is amended as follows: a. Revise paragraph (a). b. Revise the introductory text of paragraph (b), revise paragraph (b)(1)(ii), and add paragraph (b)(1)(iv)(C). c. Revise the introductory text of paragraph (c), add paragraphs (c)(6)(vi), (c)(6)(vii), and (c)(8)(vi), and revise paragraphs(c)(8)(iv) and (c)(10). d. Amend paragraph (c)(13) by replacing the phrase “lead-based paint activities” with the phrase “renovator, dust sampling technician, or lead-based paint activities” wherever it appears in the paragraph. e. Add paragraphs (d)(6) and (d)(7). f. Revise the introductory text of paragraph (e). g. Amend paragraph (e)(1) by removing the word “activities” wherever it appears in the paragraph. h. Revise paragraph (e)(2). § 745.225 Accreditation of training programs; target housing and child-occupied facilities. (a) Scope . (1) A training program may seek accreditation to offer courses in any of the following disciplines: Inspector, risk assessor, supervisor, project designer, abatement worker, renovator, and dust sampling technician. A training program may also seek accreditation to offer refresher courses for each of the above listed disciplines. (2) Training programs may first apply to EPA for accreditation of their lead-based paint activities courses or refresher courses pursuant to this section on or after August 31, 1998. Training programs may first apply to EPA for accreditation of their renovator or dust sampling technician courses or refresher courses pursuant to this section on or after [insert date 1 year after date of publication of the final rule in the Federal Register ]. (3) A training program must not provide, offer, or claim to provide EPA-accredited lead-based paint activities courses without applying for and receiving accreditation from EPA as required under paragraph (b) of this section on or after March 1, 1999. A training program must not provide, offer, or claim to provide EPA-accredited renovator or dust sampling technician courses without applying for and receiving accreditation from EPA as required under paragraph (b) of this section on or after [insert date 60 days after date of publication of the final rule in the Federal Register ]. (b) Application process . The following are procedures a training program must follow to receive EPA accreditation to offer lead-based paint activities courses, renovator courses, or dust sampling technician courses: (1) * * * (ii) A list of courses for which it is applying for accreditation. For the purposes of this section, courses taught in different languages are considered different courses, and each must independently meet the accreditation requirements. (iv) * * * (C) When applying for accreditation of a course in a language other than English, a signed statement from a qualified, independent translator that they had compared the course to the English language version and found the translation to be accurate. (c) Requirements for the accreditation of training programs . For a training program to obtain accreditation from EPA to offer lead-based paint activities courses, renovator courses, or dust sampling technician courses, the program must meet the following requirements: (6) * * * (vi) The renovator course must last a minimum of 8 training hours, with a minimum of 2 hours devoted to hands-on training activities. The minimum curriculum requirements for the renovator course are contained in paragraph (d)(6) of this section. Hands-on training activities must cover renovation methods that minimize the creation of dust and lead-based paint hazards, interior and exterior containment and cleanup methods, and post-renovation cleaning verification. (vii) The dust sampling technician course must last a minimum of 8 training hours, with a minimum of 2 hours devoted to hands-on training activities. The minimum curriculum requirements for the dust sampling technician course are contained in paragraph (d)(7) of this section. Hands on training activities must cover dust sampling methodologies. (8) * * * (iv) For initial inspector, risk assessor, project designer, supervisor, or abatement worker course completion certificates, the expiration date of interim certification, which is 6 months from the date of course completion. (vi) The language in which the course was taught. (10) Courses offered by the training program must teach the work practice standards contained in § 745.85 or § 745.227, as applicable, in such a manner that trainees are provided with the knowledge needed to perform the renovations or lead-based paint activities they will be responsible for conducting. (d) * * * (6) Renovator . (i) Role and responsibility of a renovator. (ii) Background information on lead and its adverse health effects. (iii) Background information on Federal, State, and local regulations and guidance that pertains to lead-based paint and renovation activities. (iv) Procedures for using acceptable test kits to determine whether paint is lead-based paint. (v) Renovation methods to minimize the creation of dust and lead-based paint hazards. (vi) Interior and exterior containment and cleanup methods. (vii) Methods to ensure that the renovation has been properly completed, including clean-up verification, and clearance testing. (viii) Waste handling and disposal. (7) Dust sampling technician . (i) Role and responsibility of a dust sampling technician. (ii) Background information on lead and its adverse health effects. (iii) Background information on Federal, State, and local regulations and guidance that pertains to lead-based paint and renovation activities. (iv) Dust sampling methodologies. (v) Clearance standards and testing. (vi) Report preparation. (e) Requirements for the accreditation of refresher training programs . A training program may seek accreditation to offer refresher training courses in any of the following disciplines: Inspector, risk assessor, supervisor, project designer, abatement worker, renovator, and dust sampling technician. To obtain EPA accreditation to offer refresher training, a training program must meet the following minimum requirements: (1) * * * (2) Refresher courses for inspector, risk assessor, supervisor, and abatement worker must last a minimum of 8 training hours. Refresher courses for project designer, renovator, and dust sampling technician must last a minimum of 4 training hours. 18. Section 745.320 is amended by revising paragraph (c) to read as follows: § 745.320 Scope and purpose. (c) A State or Indian Tribe may seek authorization to administer and enforce all of the provisions of subpart E of this part or just the pre-renovation education provisions of subpart E of this part. The provisions of §§ 745.324 and 745.326 apply for the purposes of such program authorizations. 19. Section 745.324 is amended as follows: a. Revise paragraph (a)(1). b. Delete the phrase “lead-based paint training accreditation and certification” from the second sentence of paragraph (b)(1)(iii). c. Revise paragraph (b)(2)(ii). d. Revise paragraphs (e)(2)(i) and (e)(4). e. Revise paragraph (f)(2). f. Revise paragraph (i)(8). § 745.324 Authorization of State or Tribal programs. (a) Application content and procedures . (1) Any State or Indian Tribe that seeks authorization from EPA to administer and enforce the provisions of subpart E or subpart L of this part must submit an application to the Administrator in accordance with this paragraph. (b) * * * (2) * * * (i) * * * (ii) An analysis of the State or Tribal program that compares the program to the Federal program in subpart E or subpart L of this part, or both. This analysis must demonstrate how the program is, in the State's or Indian Tribe's assessment, at least as protective as the elements in the Federal program at subpart E or subpart L of this part, or both. EPA will use this analysis to evaluate the protectiveness of the State or Tribal program in making its determination pursuant to paragraph (e)(2)(i) of this section. (e) * * * (2) * * * (i) The State or Tribal program is at least as protective of human health and the environment as the corresponding Federal program under subpart E or subpart L of this part, or both; and (4) If the State or Indian Tribe applies for authorization of State or Tribal programs under both subpart E and subpart L, EPA may, as appropriate, authorize one program and disapprove the other. (f) * * * (2) If a State or Indian Tribe does not have an authorized program to administer and enforce the pre-renovation education requirements of subpart E of this part by August 31, 1998, the Administrator will, by such date, enforce those provisions of subpart E of this part as the Federal program for that State or Indian Country. If a State or Indian Tribe does not have an authorized program to administer and enforce the training, certification and accreditation requirements and work practice standards of subpart E of this part by [insert date 1 year after date of publication of the final rule in the Federal Register ], the Administrator will, by such date, enforce those provisions of subpart E of this part as the Federal program for that State or Indian Country. (i) * * * (8) By the date of such order, the Administrator will establish and enforce the provisions of subpart E or subpart L of this part, or both, as the Federal program for that State or Indian Country. 20. Section 745.326 is revised to read as follows: § 745.326 Renovation: State and Tribal program requirements. (a) Program elements . To receive authorization from EPA, a State or Tribal program must contain the following program elements: (1) For pre-renovation education programs, procedures and requirements for the distribution of lead hazard information to owners and occupants of target housing and child-occupied facilities before renovations for compensation. (2) For renovation training, certification, accreditation, and work practice standards programs: (i) Procedures and requirements for the accreditation of renovation and dust sampling technician training programs. (ii) Procedures and requirements for the certification of renovators and dust sampling technicians. (iii) Procedures and requirements for the certification of individuals and/or firms. (iv) Requirements that all renovations be conducted by appropriately certified individuals and/or firms. (v) Work practice standards for the conduct of renovations. (3) For all renovation programs, development of the appropriate infrastructure or government capacity to effectively carry out a State or Tribal program. (b) Pre-renovation education . To be considered at least as protective as the Federal program, the State or Tribal program must: (1) Establish clear standards for identifying renovation activities that trigger the information distribution requirements. (2) Establish procedures for distributing the lead hazard information to owners and occupants of housing and child-occupied facilities prior to renovation activities. (3) Require that the information to be distributed include either the pamphlet titled Protect Your Family from Lead During Renovation, Repair & Painting, developed by EPA under section 406(a), or an alternate pamphlet or package of lead hazard information that has been submitted by the State or Tribe, reviewed by EPA, and approved by EPA for that State or Tribe. Such information must contain renovation-specific information similar to that in Protect Your Family from Lead During Renovation, Repair & Painting , must meet the content requirements prescribed by section 406(a) of TSCA, and must be in a format that is readable to the diverse audience of housing and child-occupied facility owners and occupants in that State or Tribe. (i) A State or Tribe with a pre-renovation education program approved before [insert date 60 days after date of publication of the final rule in the Federal Register ] must demonstrate that it meets the requirements of this section no later than the first report that it submits pursuant to § 745.324(h) of this subpart on or after [insert date 1 year after date of publication of the final rule in the Federal Register ]. (ii) A State or Tribe with an application for approval of a pre-renovation education program submitted but not approved before [insert date 60 days after date of publication of the final rule in the Federal Register ] must demonstrate that it meets the requirements of this section either by amending its application or in the first report that it submits pursuant to § 745.324(h) of this part on or after [insert date 1 year after date of publication of the final rule in the Federal Register ]. (iii) A State or Indian Tribe submitting its application for approval of a pre-renovation education program on or after [insert date 60 days after date of publication of the final rule in the Federal Register ] must demonstrate in its application that it meets the requirements of this section. (c) Accreditation of training programs . To be considered at least as protective as the Federal program, the State or Tribal program must meet the requirements of either paragraph (c)(1) or (c)(2) of this section: (1) The State or Tribal program must establish accreditation procedures and requirements, including: (i) Procedures and requirements for the accreditation of training programs, including, but not limited to: (A) Training curriculum requirements. (B) Training hour requirements. (C) Hands-on training requirements. (D) Trainee competency and proficiency requirements. (E) Requirements for training program quality control. (ii) Procedures and requirements for the re-accreditation of training programs. (iii) Procedures for the oversight of training programs. (iv) Procedures and standards for the suspension, revocation, or modification of training program accreditations; or (2) The State or Tribal program must establish procedures and requirements for the acceptance of renovation training offered by training providers accredited by EPA or a State or Tribal program authorized by EPA under this subpart. (d) Certification of renovators . To be considered at least as protective as the Federal program, the State or Tribal program must: (1) Establish procedures and requirements for individual certification that ensure that certified renovators are trained by an accredited training program. (2) Establish procedures and requirements for re-certification. (3) Establish procedures for the suspension, revocation, or modification of certifications. (e) Work practice standards for renovations . To be considered at least as protective as the Federal program, the State or Tribal program must establish standards that ensure that renovations are conducted reliably, effectively, and safely. At a minimum, the State or Tribal program must contain the following requirements: (1) Renovations must be conducted only by certified contractors. (2) Renovations are conducted using lead-safe work practices that are at least as protective to occupants as the requirements in § 745.85. (3) Certified contractors must retain appropriate records. 21. Section 745.327 is amended by revising paragraphs (b)(1)(iv) and (b)(2)(ii) to read as follows: § 745.327 State or Indian Tribal lead-based paint compliance and enforcement programs. (b) * * * (1) * * * (iv) Requirements that regulate the conduct of renovation activities as described at § 745.326. (2) * * * (ii) For the purposes of enforcing a renovation program, State or Tribal officials must be able to enter a firm's place of business or work site. 22. Section 745.339 is revised to read as follows: § 745.339 Effective dates. States and Indian Tribes may seek authorization to administer and enforce subpart L of this part pursuant to this subpart at any time. States and Indian Tribes may seek authorization to administer and enforce subpart E of this part pursuant to this subpart effective [ insert date 60 days after date of publication of the final rule in the Federal Register ]. [FR Doc. E7-10797 Filed 6-4-07; 8:45 am] BILLING CODE 6560-50-S DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Part 367 [Docket No. FMCSA-2007-27871] RIN 2126-AB09 Fees for Unified Carrier Registration Plan and Agreement; Correction AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice of proposed rulemaking; correction. SUMMARY: On May 29, 2007, (72 FR 29472), FMCSA published a proposed rule in the Federal Register that would establish annual fees and a fee bracket structure for the Unified Carrier Registration Agreement. This action is required under the Unified Carrier Registration Act of 2005, enacted as Subtitle C of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. This document corrects some errors in that proposed rule. DATES: The comment period has not changed. You must submit comments on the proposed rule on or before June 13, 2007. FOR FURTHER INFORMATION CONTACT: Mr. David Miller, Regulatory Development Division, (202) 366-5370 or by e-mail at: FMCSAregs@DOT.gov . SUPPLEMENTARY INFORMATION: The Federal Motor Carrier Safety Administration (FMCSA) published a proposed rule in the Federal Register of May 29, 2007 (72 FR 29472). That document proposed to establish fees and a fee bracket structure for the Unified Carrier Registration Agreement. Inadvertently, there were a number of errors in the preamble of that document. In proposed rule FR Doc. 07-2652, beginning on page 29472 in the issue of May 29, 2007, make all the following corrections. 1. On page 29472, beginning in the first column, correct the Addresses section to read: ADDRESSES: You may submit comments, identified by DOT DMS Docket Number FMCSA-2007-27871, by any of the following methods: • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. • Agency Web Site: http://dms.dot.gov. Follow the instructions for submitting comments on the DOT electronic docket site. Note: Due to the relocation of the U.S. Department of Transportation, the DOT electronic docket site will not be available between June 13 and June 17, 2007. During this time you may submit comments by one of the alternate methods listed. • Fax: 1-202-493-2251. • Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Ave., SE., Washington, DC 20590. • Hand Delivery: U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Ave., SE., Washington, DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays. Instructions: All submissions must include the agency name and docket number (FMCSA-2007-27871). Note that all comments received will be posted without change to http://dms.dot.gov, including any personal information provided. Please see the Privacy Act heading for further information. Docket: For access to the docket to read background documents or comments received, go to http://dms.dot.gov at any time or to U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Ave., SE, Washington, DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays. Privacy Act: Anyone is able to search the electronic form for all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477) or you may visit http://dms.dot.gov. Comments received after the comment closing date will be included in the docket and we will consider late comments to the extent practicable. FMCSA may, however, issue a final rule at any time after the close of the comment period. Correct the SUPPLEMENTARY INFORMATION section by making all of the following changes. 2. On page 29472, in the third column, add this sentence to the end of the I. Legal Basis for the Rulemaking section, immediately above the II. Statutory Requirements for UCR Fees heading: Because of this very short time period set by the statute to complete the rulemaking, the comment period for this notice of proposed rulemaking will be fifteen days. 3. On page 29472, in the third column, in the first sentence under the II. Statutory Requirements for UCR Fees heading, correct the U.S.C. reference to read: “(see 49 U.S.C. 14504a(d)(7)(A), (f)(1) and (g))''. 4. On page 29478, under the heading E. Carrier Population, in the third column, change three numbers to correct an arithmetical error. On line 14, correct “6,647” to “6,665” wherever it appears. On lines 27 and 32, correct “2,532” to “2,550” wherever it appears. On line 33, correct “2,582” to “2,600.” 5. On page 29480, in the third column, under the heading National Environmental Policy Act, correct the reference on line 4 that reads “(42 D.S.C. 4321 et seq. )” to read “(42 U.S.C. 4321 et seq. )” and the reference on line 20 that reads “(42 D.S.C. 7401 et seq. )” to read “(42 U.S.C. 7401 et seq. )''. 6. On page 29481, in the first column, on line 5 under the heading Executive Order 13211 (Energy Effects), correct “VSE” to read “Use.” Issued on: May 31, 2007. William A. Quade, Acting Associate Administrator for Enforcement and Program Delivery. [FR Doc. 07-2787 Filed 5-31-07; 3:23 pm]*