Unknown. Affirmation of interim rule as final rule

44,849 words·~204 min read·/register/2007/06/12/07-2201

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2007-06-12.xml --- 72 112 Tuesday, June 12, 2007 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Forest Service Alcohol Alcohol, Tobacco, Firearms, and Explosives Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-11302 32311-32314 E7-11304 E7-11306 E7-11307 E7-11308 Animal Animal and Plant Health Inspection Service RULES Plant-related quarantine, domestic:

Black stem rust; berberis rust-resistant varieties, 32165-32167 E7-11275 Pine shoot beetle, 32165 E7-11276 PROPOSED RULES User fees: Plants and plant products; export certification, 32223-32230 E7-11278 Antitrust Antitrust Division NOTICES Competitive impact statements and proposed consent judgments: Cemex, S.A.B. de C.V., 32314-32331 07-2856 Centers Centers for Disease Control and Prevention NOTICES Agency information collection activities; proposals, submissions, and approvals, 32297-32298 E7-11279 E7-11285 Meetings:

Disease, Disability, and Injury Prevention and Control Special Emphasis Panels, E7-11277 32298-32299 E7-11280 E7-11288 National Institute for Occupational Safety and Health— Safety and Occupational Health Study Section, 32299 E7-11281 Coast Guard Coast Guard RULES Ports and waterways safety; regulated navigation areas, safety zones, security zones, etc.: Lake Michigan Captain of Port Zone, WI, 32181-32188 E7-11262 PROPOSED RULES Pollution: Oil spill liability— Landowner defenses; standards and practices for all appropriate inquiries, 32232-32246 E7-11110 NOTICES Grants and cooperative agreements; availability, etc.:

Command Center Decision Support Tools and Concept of Operations; maritime security, 32300-32302 E7-11257 Commerce Commerce Department See Foreign-Trade Zones Board See Industry and Security Bureau See International Trade Administration See National Institute of Standards and Technology See National Oceanic and Atmospheric Administration Education Education Department PROPOSED RULES Postsecondary education: Federal Perkins Loan, Federal Family Education Loan, and William D. Ford Federal Direct Loan Programs, 32410-32447 E7-10826 NOTICES Agency information collection activities; proposals, submissions, and approvals, 32287-32289 E7-11255 E7-11256 E7-11258 EPA Environmental Protection Agency RULES Air programs:

Ambient air quality standards, national— Particulate matter; correction, 32193-32212 07-2201 Stratospheric ozone protection— Class I ozone-depleting substances; essential use allowances allocation (2007 CY), 32212-32222 E7-11319 Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas: Ohio, 32190-32193 E7-11229 PROPOSED RULES Air programs: Ambient air quality standards, national— Particulate matter; correction, 32266-32269 07-2237 Stratospheric ozone protection— Class I ozone-depleting substances; essential use allowances allocation (2008 CY), 32269-32275 E7-11299 Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas:

Ohio, 32246-32266 E7-11294 E7-11305 NOTICES Agency information collection activities; proposals, submissions, and approvals, 32289-32295 E7-11303 E7-11310 E7-11323 Air programs: State implementation plans; adequacy status for transportation conformity purposes— Arizona, 32295 E7-11331 Meetings: Children's Health Protection Advisory Committee, 32295 E7-11298 Export Export-Import Bank NOTICES Economic impact policy; finance applications: Russia; hot briquetted iron plant; correction, 32408 Z7-9803 FAA Federal Aviation Administration RULES IFR altitudes, 32167-32168 E7-11143 Standard instrument approach procedures, 32168-32170 E7-11147 PROPOSED RULES Airworthiness directives:

Hawker Beechcraft Corp., 32230-32232 E7-11244 NOTICES Aviation Rulmaking Advisory Committee; task assignments, 32390-32392 E7-11260 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies: Change in bank control, 32296 E7-11296 Formations, acquisitions, and mergers, 32296 E7-11190 E7-11297 Permissible nonbanking activities, 32296-32297 E7-11191 Federal Retirement Federal Retirement Thrift Investment Board NOTICES Meetings; Sunshine Act, 32297 07-2913 Fish Fish and Wildlife Service PROPOSED RULES Endangered and threatened species:

Critical habitat designations— Northern spotted owl, 32450-32516 07-2805 NOTICES Agency information collection activities; proposals, submissions, and approvals, 32304-32305 E7-11286 Comprehensive conservation plans; availability, etc.: Trempealeau National Wildlife Refuge, WI, 32306-32307 E7-11315 Endangered and threatened species: Incidental take permits— San Bernardino County, CA; Delhi Sands flower-loving fly, 32305-32306 E7-11314 Food Food and Drug Administration RULES Medical devices:

Orthopedic devices— Intervertebral body fusion device; reclassification, 32170-32172 E7-11240 NOTICES Reports and guidance documents; availability, etc.: Intervertebral body fusion device; Class II special controls, 32299-32300 E7-11235 MISSING FOR: Foreign-Trade Zones Board Foreign-Trade Zones Board NOTICES *Applications, hearings, determinations, etc.:* Florida Eastern Shipbuilding Group, Inc.; shipbuilding facilities, 32278-32279 E7-11320 Forest Forest Service NOTICES Reports and guidance documents; availability, etc.:

Continental Divide National Scenic Trail; policy directive, 32276-32278 07-2840 Health Health and Human Services Department See Centers for Disease Control and Prevention See Food and Drug Administration Homeland Homeland Security Department See Coast Guard See U.S. Citizenship and Immigration Services Industry Industry and Security Bureau NOTICES Export privileges, actions affecting: Cirrus Electronics LLC et al., 32279-32281 07-2899 Interior Interior Department See Fish and Wildlife Service See Land Management Bureau See National Park Service IRS Internal Revenue Service RULES Income taxes:

Securities and commodities dealers; safe harbor for valuation, 32172-32181 E7-11146 International International Trade Administration NOTICES Antidumping: Wooden bedroom furniture from— China, 32281 E7-11318 Justice Justice Department See Alcohol, Tobacco, Firearms, and Explosives Bureau See Antitrust Division Land Land Management Bureau NOTICES Alaska Native claims selection: St. Mary's Native Corp., 32307-32308 E7-11283 Oil and gas leases: Colorado, 32308 E7-11282 Survey plat filings:

New Mexico, 32308-32309 07-2896 National Archives National Archives and Records Administration NOTICES Meetings: Records of Congress Advisory Committee, 32331 E7-11284 National Highway National Highway Traffic Safety Administration NOTICES Motor vehicle safety standards; exemption petitions, etc.: Mosler Automotive, 32392-32395 E7-11259 National Institute National Institute of Standards and Technology NOTICES Information processing standards, Federal: Keyed-Hash Message Authentication Code, 32281-32282 E7-11309 Secure Hash Standard, 32282 E7-11326 NOAA National Oceanic and Atmospheric Administration NOTICES Committees; establishment, renewal, termination, etc.:

Monterey Bay National Marine Sanctuary Advisory Council, 32283 07-2888 Marine mammals: Incidental taking; authorization letters, etc.— Bay Marina Management Inc..; Pier 39 Marina , San Francisco, CA; California sea lions and Pacific harbor seals, 32283-32287 E7-11313 Reports and guidance documents; availability, etc.: North American Datum of 1983 State Plane Coordinates in feet— Minnesota, 32287 07-2887 National Park National Park Service RULES Concession contracts: Authentic native handicrafts; sales, 32188-32190 E7-11274 NOTICES Environmental statements; availability, etc.:

Golden Gate National Recreation Area, CA, 32309-32310 07-2880 Great Sand Dunes National Park and Preserve, CO, 32310-32311 07-2895 Nuclear Nuclear Regulatory Commission NOTICES Agency information collection activities; proposals, submissions, and approvals, 32331 E7-11301 Meetings; Sunshine Act, 32334-32335 07-2926 Plants and materials; physical protection: Radioactive materials of concern, security; safeguards information protection, and fingerprinting and criminal history record check requirements, 32335-32338 07-2879 *Applications, hearings, determinations, etc.:* Cornell University, 32332 E7-11333 STP Nuclear Operating Co., 32332-32334 E7-11300 Postal Postal Service NOTICES Meetings;

Sunshine Act, 32338 07-2914 SEC Securities and Exchange Commission NOTICES Investment Company Act of 1940: Barclays Global Fund Advisors, 32338-32340 E7-11295 Public Company Accounting Oversight Board: Audit of financial statements; audit of internal control over financial reporting; independence rule and conforming amendments, 32340-32368 E7-11311 Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC, 32368-32372 E7-11265 Chicago Board Options Exchange, Inc., 32372-32378 E7-11273 International Securities Exchange, LLC, 32378-32379 E7-11268 NASDAQ Stock Market LLC, 32380-32386 E7-11181 E7-11189 E7-11267 New York Stock Exchange LLC, 32386-32389 E7-11188 NYSE Arca, Inc., et al., 32389-32390 E7-11266 Transportation Transportation Department See Federal Aviation Administration See National Highway Traffic Safety Administration Treasury Treasury Department See Internal Revenue Service MISSING FOR:

U.S. Citizenship and Immigration Services U.S. Citizenship and Immigration Services NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-11269 E7-11270 32303-32304 E7-11271 E7-11272 Veterans Veterans Affairs Department NOTICES Diseases not associated with exposure to herbicide agents during Vietnam Era; list, 32395-32407 E7-11247 Meetings: OIF/OEF Veterans and Families Advisory Committee, 32407 07-2889 Separate Parts In This Issue Part II Education Department, 32410-32447 E7-10826 Part III Interior Department, Fish and Wildlife Service, 32450-32516 07-2805 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 72 112 Tuesday, June 12, 2007 Rules and Regulations DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No. APHIS-2006-0169] Pine Shoot Beetle; Additions to Quarantined Areas AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Affirmation of interim rule as final rule. SUMMARY: We are adopting as a final rule, without change, an interim rule that amended the pine shoot beetle regulations by adding the entire State of Iowa and two counties in New Jersey, Morris and Somerset, to the list of quarantined areas. We took that action following the detection of pine shoot beetle in these areas. The interim rule was necessary to prevent the spread of pine shoot beetle, a pest of pine trees, into noninfested areas of the United States.

DATES: Effective on June 12, 2007, we are adopting as a final rule the interim rule that was published at 72 FR 6433-6435 on February 12, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Weyman Fussell, Pine Shoot Beetle Program Manager, Emergency and Domestic Programs, PPQ, APHIS, 4700 River Road Unit 134, Riverdale, MD 20737-1231;

(301)734-5705. SUPPLEMENTARY INFORMATION: Background The regulations in 7 CFR 301.50 through 301.50-10 (referred to below as the regulations) restrict the interstate movement of certain regulated articles from quarantined areas in order to prevent the spread of pine shoot beetle into noninfested areas of the United States. In an interim rule 1 effective and published in the **Federal Register** on February 12, 2007 (72 FR 6433-6435, Docket No. APHIS-2006-0169), we amended the pine shoot beetle regulations in § 301.50-3(c) by adding the entire State of Iowa and two counties, Morris and Somerset, in New Jersey to the list of quarantined areas. 1 To view the interim rule, go to *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2006-0169.* Comments on the interim rule were required to be received on or before April 13, 2007. We did not receive any comments. Therefore, for the reasons given in the interim rule, we are adopting the interim rule as a final rule. This action also affirms the information contained in the interim rule concerning Executive Order 12866 and the Regulatory Flexibility Act, Executive Orders 12372 and 12988, and the Paperwork Reduction Act. Further, for this action, the Office of Management and Budget has waived its review under Executive Order 12866. List of Subjects in 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. PART 301—DOMESTIC QUARANTINE NOTICES Accordingly, we are adopting as a final rule, without change, the interim rule that amended 7 CFR part 301 and that was published at 72 FR 6433-6435 on February 12, 2007. Done in Washington, DC, this 6th day of June 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-11276 Filed 6-11-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 301 [Docket No. APHIS-2007-0072] Black Stem Rust; Addition of Rust-Resistant Varieties AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Direct final rule. SUMMARY: We are amending the black stem rust quarantine and regulations by adding four varieties to the list of rust-resistant *Berberis* species or cultivars in the regulations. This action will allow for the interstate movement of these newly developed varieties without unnecessary restrictions. DATES: This rule will be effective on August 13, 2007, unless we receive written adverse comments or written notice of intent to submit adverse comments on or before July 12, 2007. If we receive written adverse comments or written notice of intent to submit adverse comments, we will publish a document in the **Federal Register** withdrawing this rule before the effective date. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov* , select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2007-0072 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2007-0072, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2007-0072. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call

(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov* . FOR FURTHER INFORMATION CONTACT: Dr. Vedpal Malik, Agriculturalist, Invasive Species and Pest Management, PPQ, APHIS, 4700 River Road Unit 134, Riverdale, MD 20737-1236;

(301)734-6774. SUPPLEMENTARY INFORMATION: Background Black stem rust is one of the most destructive plant diseases of small grains that is known to exist in the United States. The disease is caused by a fungus that reduces the quality and yield of infected wheat, oat, barley, and rye crops by robbing host plants of food and water. In addition to infecting small grains, the fungus lives on a variety of alternate host plants that are species of the genera *Berberis, Mahoberberis,* and *Mahonia* . The fungus is spread from host to host by windborne spores. The black stem rust quarantine and regulations, which are contained in 7 CFR 301.38 through 301.38-8 (referred to below as the regulations), quarantine the conterminous 48 States and the District of Columbia and govern the interstate movement of certain plants of the genera *Berberis, Mahoberberis,* and *Mahonia* , known as barberry plants. The species of these plants are categorized as either rust-resistant or rust-susceptible. Rust-resistant plants do not pose a risk of spreading black stem rust or of contributing to the development of new races of the rust; rust-susceptible plants do pose such risks. Section 301.38-2 of the regulations includes a listing of regulated articles and indicates those species and varieties of the genera *Berberis, Mahoberberis,* and *Mahonia* that are known to be rust-resistant. Although rust-resistant species are included as regulated articles, they may be moved into or through protected areas if accompanied by a certificate. In accordance with the procedures described below under “Effective Date,” this direct final rule will add *Berberis thunbergii atropurpurea* ‘Moretti Select', *B. thunbergii* ‘Fireball', *B. thunbergii* ‘Orange Rocket', and *B. thunbergii* ‘Sparkler' to the list of rust-resistant *Berberis* species in § 301.38-2(a)(1). The addition of the species listed above to the list of rust-resistant *Berberis* species is based on recent testing to determine rust resistance conducted by the Agricultural Research Service

(ARS)of the United States Department of Agriculture

(USDA)at its Cereal Rust Laboratory in St. Paul, MN. The testing is performed in the following manner: In a greenhouse, the suspect plant or test subject is placed under a screen with a control plant—a known rust-susceptible species of *Berberis, Mahoberberis,* or *Mahonia* . Infected wheat stems, a primary host of black stem rust, are placed on top of the screen. The plants are moistened and maintained in 100 percent humidity. This causes the spores to swell and fall on the plants lying under the screen. The plants are then observed for 7 days at 20-80 percent relative humidity. If the rust-susceptible plant shows signs of infection after 7 days and the test plants do not, the test results indicate that the test plants are rust-resistant. This test must be performed 12 times, and all 12 tests must yield the same result before USDA can make a determination as to whether the test plants are rust-resistant. The test may be conducted on 12 individual plants, or it may be performed multiple times on fewer plants ( *e.g.* , six plants tested twice or three plants tested four times). The tests must be performed on new growth, just as the leaves are unfolding. Therefore, the tests are usually conducted in the spring or fall, during the growing season. All 12 tests generally cannot be conducted on the same day because of the plants' different growth stages. Based on over 30 years of experience with this test, we believe that 12 is the reliable test sample size on which USDA can make its determination. We do not know of any plant that was subsequently discovered to be rust-susceptible after undergoing the test procedure 12 times and being determined by USDA to be rust-resistant. Dates We are publishing this rule without a prior proposal because we view this action as noncontroversial and anticipate no adverse public comment. This rule will be effective, as published in this document, on August 13, 2007, unless we receive written adverse comments or written notice of intent to submit adverse comments on or before July 12, 2007. Adverse comments are comments that suggest the rule should not be adopted or that suggest the rule should be changed. If we receive written adverse comments or written notice of intent to submit adverse comments, we will publish a document in the **Federal Register** withdrawing this rule before the effective date. We will then publish a proposed rule for public comment. As discussed above, if we receive no written adverse comments or written notice of intent to submit adverse comments within 30 days of publication of this direct final rule, this direct final rule will become effective 60 days following its publication. We will publish a document in the **Federal Register** , before the effective date of this direct final rule, confirming that it is effective on the date indicated in this document. Executive Order 12866 and Regulatory Flexibility Act This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866. We are amending the black stem rust quarantine and regulations by adding *B. thunbergii atropurpurea* ‘Moretti Select', *B. thunbergii* ‘Fireball', *B. thunbergii* ‘Orange Rocket', and *B. thunbergii* ‘Sparkler' to the list of rust-resistant species or cultivars in the regulations. This action will provide for the interstate movement of these newly developed rust-resistant *Berberis* varieties without unnecessary restrictions. Following the Small Business Administration

(SBA)guidelines, the potentially affected entities are classified within the following industries: Nursery and Tree Production (North American Industry Classification System [NAICS] 111421), and Floriculture Production (NAICS 111422). For these two categories, entities are considered small by SBA standards if their annual sales are $750,000 or less. According to the 2002 Census of Agriculture, there were 64,366 farms in both NAICS categories and this total represents 3 percent of the total farms in the United States. Over 92 percent of the farms have annual sales of less than $500,000 and by SBA standards are considered small. Barberry plants are not one of the crops tracked by the Census and therefore data on production and number of producers are not available. However, because we are removing restrictions on the movement of additional rust-resistant varieties of barberry, it is not anticipated that any of the nurseries producing barberry plant species and cultivars will experience a negative economic impact as a result of this rulemaking. Consumers will benefit from having a greater selection of barberry plants, and nurseries will benefit from being to able to market their product more quickly. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities. Executive Order 12372 This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.) Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule:

(1)Preempts all State and local laws and regulations that are inconsistent with this rule;

(2)has no retroactive effect; and

(3)does not require administrative proceedings before parties may file suit in court challenging this rule. Paperwork Reduction Act This rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects in 7 CFR Part 301 Agricultural commodities, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Transportation. Accordingly, 7 CFR part 301 is amended as follows: PART 301—DOMESTIC QUARANTINE NOTICES 1. The authority citation for part 301 continues to read as follows: Authority: 7 U.S.C. 7701-7772 and 7781-7786; 7 CFR 2.22, 2.80, and 371.3. Section 301.75-15 issued under Sec. 204, Title II, Public Law 106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 issued under Sec. 203, Title II, Public Law 106-224, 114 Stat. 400 (7 U.S.C. 1421 note). 2. In § 301.38-2, paragraph

(b)is amended by adding, in alphabetical order, the following rust-resistant Berberis species: § 310.38-2 Regulated articles.

(a)* * *

(1)* * * *B. thunbergii atropurpurea* ‘Moretti Select' *B. thunbergii* ‘Fireball' *B. thunbergii* ‘Orange Rocket' *B. thunbergii* ‘Sparkler' Done in Washington, DC, this 6th day of June 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-11275 Filed 6-11-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 95 [Docket No. 30555; Amdt. No. 468] IFR Altitudes; Miscellaneous Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule SUMMARY: This amendment adopts miscellaneous amendments to the required IFR (instrument flight rules) altitudes and changeover points for certain Federal airways, jet routes, or direct routes for which a minimum or maximum en route authorized IFR altitude is prescribed. This regulatory action is needed because of changes occurring in the National Airspace System. These changes are designed to provide for the safe and efficient use of the navigable airspace under instrument conditions in the affected areas. DATES: *Effective Date:* 0901 UTC, July 5, 2007. FOR FURTHER INFORMATION CONTACT: Donald P. Pate, Flight Procedure Standards Branch (AMCAFS-420), Flight Technologies and Programs Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd. Oklahoma City, OK. 73169 (Mail Address: P.O. Box 25082 Oklahoma City, OK. 73125) telephone:

(405)954-4164. SUPPLEMENTARY INFORMATION: This amendment to part 95 of the Federal Aviation Regulations (14 CFR part 95) amends, suspends, or revokes IFR altitudes governing the operation of all aircraft in flight over a specified route or any portion of that route, as well as the changeover points

(COPs)for Federal airways, jet routes, or direct routes as prescribed in part 95. The Rule The specified IFR altitudes, when used in conjunction with the prescribed changeover points for those routes, ensure navigation aid coverage that is adequate for safe flight operations and free of frequency interference. The reasons and circumstances that create the need for this amendment involve matters of flight safety and operational efficiency in the National Airspace System, are related to published aeronautical charts that are essential to the user, and provide for the safe and efficient use of the navigable airspace. In addition, those various reasons or circumstances require making this amendment effective before the next scheduled charting and publication date of the flight information to assure its timely availability to the user. The effective date of this amendment reflects those considerations. In view of the close and immediate relationship between these regulatory changes and safety in air commerce, I find that notice and public procedure before adopting this amendment are impracticable and contrary to the public interest and that good cause exists for making the amendment effective in less than 30 days. Conclusion The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866;

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

(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. List of Subjects in 14 CFR Part 95 Airspace, Navigation (air). Issued in Washington, DC, on June 5, 2007. James J. Ballough, Director, Flight Standards Service. Adoption of the Amendment Accordingly, pursuant to the authority delegated to me by the Administrator, part 95 of the Federal Aviation Regulations (14 CFR part 95) is amended as follows effective at 0901 UTC, July 5, 2007. 1. The authority citation for part 95 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44719, 44721. 2. Part 95 is amended to read as follows: Revisions to IFR Altitudes & Changeover Points [Amendment 468 effective date July 05, 2007] From To MEA § 95.6001 VICTOR ROUTES—U.S. § 95.6044 VOR Federal Airway V44 is Amended to Read in Part Baltimore, MD VORTAC Paleo, MD FIX *2200 *1700-MOCA § 95.6082 VOR Federal Airway V82 is Amended to Read in Part Gopher, MN VORTAC Farmington, MN VORTAC *3500 *2700-MOCA § 95.6093 VOR Federal Airway V93 is Amended to Read in Part Patuxent, MD VORTAC *Graco, MD FIX **2500 *10000-MRA **1700-MOCA *Graco, MD FIX Paleo, MD FIX **10000 *10000-MRA **1600-MOCA Paleo, MD FIX Baltimore, MD VORTAC *2200 *1700-MOCA § 95.6161 VOR Federal Airway V161 is Amended to Read in Part Farmington, MN VORTAC Gopher, MN VORTAC *3500 *2700-MOCA § 95.6369 VOR Federal Airway V369 is Amended to Read in Part Navasota, TX VORTAC *1800-MOCA Groesbeck, TX VOR/DME *2300 MAA-17500 Groesbeck, TX VOR/DME Maverick, TX VOR/DME 3600 MAA-17500 § 95.6379 VOR FEDERAL AIRWAY V379 is Amended to Read in Part Nottingham, MD VORTAC Jetta, MD FIX 1900 MAA-17500 Jetta, MD FIX *10000-MRA *Graco, MD FIX **3000 **1600-MOCA MAA-17500 Graco, MD FIX Smyrna, DE VORTAC 1800 MAA-17500 § 95.6422 VOR FEDERAL AIRWAY V422 is Amended to Read in Part Wolf Lake, IN VOR Twerp, OH FIX 2700 [FR Doc. E7-11143 Filed 6-11-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 97 [Docket No. 30553 Amdt. No. 3221] Standard Instrument Approach Procedures, Weather Takeoff Minimums; Miscellaneous Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This amendment establishes, amends, suspends, or revokes Standard Instrument Approach Procedures (SIAPs) and/or Weather Takeoff Minimums for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, addition of new obstacles, or changes in air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports. DATES: This rule is effective June 12, 2007. The compliance date for each SIAP and/or Weather Takeoff Minimums is specified in the amendatory provisions. The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of June 12, 2007. ADDRESSES: Availability of matters incorporated by reference in the amendment is as follows: *For Examination* — 1. FAA Rules Docket, FAA Headquarters Building, 800 Independence Avenue, SW., Washington, DC 20591; 2. The FAA Regional Office of the region in which the affected airport is located; 3. The National Flight Procedures Office, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or, 4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* . *For Purchase* —Individual SIAP and Weather Takeoff Minimums copies may be obtained from: 1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building, 800 Independence Avenue, SW., Washington, DC 20591; or 2. The FAA Regional Office of the region in which the affected airport is located. *By Subscription* —Copies of all SIAPs and Weather Takeoff Minimums mailed once every 2 weeks, are for sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. FOR FURTHER INFORMATION CONTACT: Donald P. Pate, Flight Procedure Standards Branch (AFS-420), Flight Technologies and Programs Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd. Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125) telephone:

(405)954-4164. SUPPLEMENTARY INFORMATION: This amendment to Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), establishes, amends, suspends, or revokes SIAPs and/or Weather Takeoff Minimums. The complete regulatory description of each SIAP and/or Weather Takeoff Minimums is contained in official FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are identified as FAA Forms 8260-3, 8260-4, 8260-5 and 8260-15A. Materials incorporated by reference are available for examination or purchase as stated above. The large number of SIAPs and/or Weather Takeoff Minimums, their complex nature, and the need for a special format make their verbatim publication in the **Federal Register** expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs and/or Weather Takeoff Minimums but refer to their depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP and/or Weather Takeoff Minimums contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR sections, with the types and effective dates of the SIAPs and/or Weather Takeoff Minimums. This amendment also identifies the airport, its location, the procedure identification and the amendment number. The Rule This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and/or Weather Takeoff Minimums as contained in the transmittal. Some SIAP and/or Weather Takeoff Minimums amendments may have been previously issued by the FAA in a Flight Data Center

(FDC)Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP, and/or Weather Takeoff Minimums amendments may require making them effective in less than 30 days. For the remaining SIAPs and/or Weather Takeoff Minimums, an effective date at least 30 days after publication is provided. Further, the SIAPs and/or Weather Takeoff Minimums contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and/or Weather Takeoff Minimums, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs and/or Weather Takeoff Minimums and safety in air commerce, I find that notice and public procedure before adopting these SIAPs and/or Weather Takeoff Minimums are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs and/or Weather Takeoff Minimums effective in less than 30 days. Conclusion The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866;

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

(GPS)RWY 36, Orig Milton, FL, Peter Prince Fld, GPS RWY 36, Amdt 1, CANCELLED Panama City, FL, Panama City—Bay Co Intl, Takeoff Minimums and Obstacle DP, Amdt 1 Bemidji, MN, Bemidji Regional, Takeoff Minimums and Textual DP, Amdt 3 Mocksville, NC, Twin Lakes, Takeoff Minimums and Obstacle DP, Orig Williamston, NC, Martin County, Takeoff Minimums and Obstacle DP, Orig Barnwell, SC, Barnwell Rgnl, Takeoff Minimums and Obstacle DP, Amdt 2 Darlington, SC, Darlington County Jetport, RNAV

(GPS)RWY 5, Orig Darlington, SC, Darlington County Jetport, GPS RWY 5, Orig, CANCELLED Lancaster, SC, Lancaster County—Mc Whirter Field, VOR/DME-A, Orig Portland, TN, Portland Muni, Takeoff Minimums and Textual DP, Orig Effective 30 Aug 2007 Lake Providence, LA, Byerley, NDB RWY 17, Amdt 2, CANCELLED Weatherford, OK, Thomas P. Stafford, NDB RWY 17, Amdt 3, CANCELLED Middleton, WI, Middleton Muni—Mory Field, RNAV

(GPS)RWY 28, Amdt 1 Sheboygan, WI, Sheboygan County Memorial, RNAV

(GPS)RWY 3, Amdt 1 Sheboygan, WI, Sheboygan County Memorial, RNAV

(GPS)RWY 21, Amdt 1 Note: The FAA published the following Amendment in Docket No. 30551 Amdt No. 3219 to Part 97 of the Federal Aviation Regulations (Vol. 72, FR No. 104, page 30256, dated, May 31, 2007) Under Section 97.15 effective July 5, 2007, which is hereby corrected to be effective for August 30, 2007. Newport News, VA, Williamsburg Intl, Takeoff Minimums and Obstacle DP, Orig [FR Doc. E7-11147 Filed 6-11-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 888 [Docket No. 2006N-0019] Orthopedic Devices; Reclassification of the Intervertebral Body Fusion Device AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration

(FDA)is reclassifying intervertebral body fusion devices that contain bone grafting material, from class III (premarket approval) into class II (special controls), and retain those that contain any therapeutic biologic (e.g., bone morphogenic protein) in class III. Elsewhere in this issue of the **Federal Register** , FDA is announcing the availability of a guidance document that will serve as the special control for this device. This reclassification is based upon on the recommendation of the Orthopaedic and Rehabilitation Devices Panel (the Panel). EFFECTIVE DATE: July 12, 2007. FOR FURTHER INFORMATION CONTACT: Jodi N. Anderson, Center for Devices and Radiological Health (HFZ-410), Food and Drug Administration, 9200 Corporate Boulevard, Rockville, MD 20850, 240-276-3680. SUPPLEMENTARY INFORMATION: I. Background The Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 301 *et seq.* ), as amended by the Medical Device Amendments of 1976 (1976 amendments) (Public Law 94-295), the Safe Medical Devices Act of 1990 (Public Law 101-629), the Food and Drug Administration Modernization Act of 1997 (Public Law 105-115), and the Medical Device User Fee and Modernization Act of 2002 (Public Law 107-250), established a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the act (21 U.S.C. 360c) established three categories (classes) of devices, depending on the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval). Under section 513 of the act, devices that were in commercial distribution before May 28, 1976 (the date of enactment of the 1976 amendments), generally referred to as preamendments devices, are classified after FDA has done the following:

(1)Received a recommendation from a device classification panel (an FDA advisory committee);

(2)published the panel's recommendation for comment, along with a proposed regulation classifying the device; and

(3)published a final regulation classifying the device. FDA has classified most preamendments devices under these procedures. Devices that were not in commercial distribution before May 28, 1976, generally referred to as postamendments devices, are classified automatically by statute (section 513(f) of the act) into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval, unless and until the device is reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, under section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously offered devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of the regulations. A preamendments device that has been classified into class III may be marketed, by means of notification procedures, without submission of a premarket approval application

(PMA)until FDA issues a final regulation under section 515(b) of the act (21 U.S.C. 360e(b)) requiring premarket approval. Section 513(e) of the act (21 U.S.C. 360c(e)) governs reclassification of classified preamendments devices. This section provides that FDA may, by rulemaking, reclassify a device (in a proceeding that parallels the initial classification proceeding) based upon “new information.” FDA can initiate a reclassification under section 513(e) of the act or an interested person may petition FDA to reclassify a preamendments device. The term “new information,” as used in section 513(e) of the act, includes information developed as a result of a reevaluation of the data before the agency when the device was originally classified, as well as information not presented, not available, or not developed at that time. (See, e.g., *Holland Rantos* v. *United States Department of Health, Education, and Welfare* , 587 F.2d 1173, 1174 n.1 (D.C. Cir. 1978); *Upjohn* v. *Finch* , 422 F.2d 944 (6th Cir. 1970); *Bell* v. *Goddard* , 366 F.2d 177 (7th Cir. 1966).) Reevaluation of the data previously before the agency is an appropriate basis for subsequent regulatory action where the reevaluation is made in light of newly available regulatory authority (see *Bell* v. *Goddard* , supra, 366 F.2d at 181; *Ethicon, Inc.* v. *FDA* , 762 F.Supp. 382, 389-91 (D.D.C. 1991)), or in light of changes in “medical science.” (See *Upjohn* v. *Finch* , supra, 422 F.2d at 951.) Whether data before the agency are past or new data, the “new information” to support reclassification under section 513(e) must be “valid scientific evidence,” as defined in section 513(a)(3) of the act and 21 CFR 860.7(c)(2). (See, e.g., *General Medical Co.* v. *FDA* , 770 F.2d 214 (D.C. Cir. 1985); *Contact Lens Assoc.* v. *FDA* , 766 F.2d 592 (D.C. Cir.), cert. denied, 474 U.S. 1062 (1985)). FDA relies upon “valid scientific evidence” in the classification process to determine the level of regulation for devices. To be considered in the reclassification process, the valid scientific evidence upon which the agency relies must be publicly available. Publicly available information excludes trade secret and/or confidential commercial information, e.g., the contents of a pending PMA. (See section 520(c) of the act (21 U.S.C. 360j(c).) Section 520(h)(4) of the act, added by FDAMA, provides that FDA may use, for reclassification of a device, certain information in a PMA 6 years after the application has been approved. This includes information from clinical and preclinical tests or studies that demonstrate the safety or effectiveness of the device but does not include descriptions of methods of manufacture or product composition and other trade secrets. FDAMA added a new section 510(m) to the act. New section 510(m) of the act provides that a class II device may be exempted from the premarket notification requirements under section 510(k) of the act, if the agency determines that premarket notification is not necessary to assure the safety and effectiveness of the device. FDA believes that this device should not be exempt from premarket notification under section 510(m) of the act. FDA believes that it needs to review information in a premarket notification submission that addresses the risks identified in the guidance document in order to assure that a new device is at least as safe and effective as legally marketed devices of this type. II. Regulatory History of the Device In the **Federal Register** of February 9, 2006 (71 FR 6710), FDA published a proposed rule to reclassify the intervertebral body fusion devices that contain bone grafting material, from class III (premarket approval) into class II (special controls), and retain those that contain any therapeutic biologic (e.g., bone morphogenic protein) in class III. FDA received 12 comments on the proposed rule and draft guidance. In the same issue of the **Federal Register** of February 9, 2006 (71 FR 6778), FDA announced the availability of the draft guidance document entitled “Class II Special Controls Guidance Document: Class II Special Controls Guidance Document: Intervertebral Body Fusion Device” that FDA intended to serve as the special control for this device type, if FDA reclassified this device type. Interested persons were invited to comment on the proposed rule and special controls draft guidance document by May 10, 2006. III. Summary of Final Rule Therefore, under sections 513 and 520(l) of the act, FDA is adopting the summary of reasons for the panel's recommendation, the summary of data upon which the panel's recommendations are based (Ref. 1), and the assessment of the risks to public health stated in the proposed rule published on February 9, 2006. Furthermore, FDA is issuing this final rule (21 CFR 888.3080), that reclassifies intervertebral body fusion devices that contain bone grafting material, from class III (premarket approval) into class II (special controls), and retain those that contain any therapeutic biologic (e.g., bone morphogenic protein) in class III. IV. Analysis of Comments and FDA's Response FDA received six comments stating the comment's full support for the reclassification as proposed and offering no additional input. Two comments suggested adding thoracic use to the classification identification. FDA disagrees with this comment because there are no legally marketed intervertebral body fusion devices indicated for thoracic use, and thus there is no experience with thoracic use of the intervertebral body fusion device. Two comments suggested that FDA classify all intervertebral body fusion devices into class II regardless of the grafting material the devices contain and regardless of whether grafting materials composed of therapeutic biologics remain class III. FDA disagrees with this comment. The intervertebral body fusion device and the grafting material it contains do not act independently in the body, thus the mitigation measures described in the special controls guidance are insufficient to provide reasonable assurance of safety and effectiveness for an intervertebral body fusion device when it contains a therapeutic biologic grafting material. The two remaining comments pertained to scientific recommendations in the draft guidance. FDA's consideration of these two comments is discussed in the notice of the availability of the guidance, published elsewhere in this issue of the **Federal Register** . V. Environmental Impact The agency has determined under 21 CFR 25.34(b) that this reclassification action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required. VI. Analysis of Impacts FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-602), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety and other advantages; distributive impacts and equity). The agency believes that this final rule is not a significant regulatory action under the Executive order. The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Reclassification of this device from class III to class II will relieve all manufacturers of the device of the costs of complying with the premarket approval requirements in section 515 of the act. Because reclassification will reduce regulatory costs with respect to this device, the agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes an Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $122 million, using the most current

(2005)Implicit Price deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount. VII. Federalism FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that 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. Accordingly, the agency has concluded that the rule does not contain policies that have federalism implications as defined in the order and, consequently, a federalism summary impact statement is not required. VIII. Paperwork Reduction Act of 1995 This final rule contains no collections of information. Therefore, clearance by the Office of Management and Budget

(OMB)under the Paperwork Reduction Act of 1995

(PRA)is not required. Elsewhere in this issue of the **Federal Register** , FDA is publishing a notice of availability of the guidance document entitled “Class II Special Controls Guidance Document: Intervertebral Body Fusion Devices.” The notice contains the PRA analysis for the guidance. IX. References The following reference has been placed on display in the division of Dockets Management (see ADDRESSES ) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. 1. Orthopedic and Rehabilitation Devices Panel Meeting Transcript, pp. 1-141, December 11, 2003. List of Subjects in 21 CFR Part 888 Medical devices. Therefore, under the Federal Food, Drug, and Cosmetic Act, and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 888 is amended as follows: PART 888—ORTHOPEDIC DEVICES 1. The authority citation for 21 CFR part 888 continues to read as follows: Authority: 21 U.S.C. 351, 360, 360c, 360e, 360j, 371. 2. Section 888.3080 is added to subpart D to read as follows: § 888.3080 Intervertebral body fusion device.

(a)*Identification* . An intervertebral body fusion device is an implanted single or multiple component spinal device made from a variety of materials, including titanium and polymers. The device is inserted into the intervertebral body space of the cervical or lumbosacral spine, and is intended for intervertebral body fusion.

(b)*Classification* .

(1)Class II (special controls) for intervertebral body fusion devices that contain bone grafting material. The special control is the FDA guidance document entitled “Class II Special Controls Guidance Document: Intervertebral Body Fusion Device.” See § 888.1(e) for the availability of this guidance document.

(2)Class III (premarket approval) for intervertebral body fusion devices that include any therapeutic biologic (e.g., bone morphogenic protein). Intervertebral body fusion devices that contain any therapeutic biologic require premarket approval.

(c)*Date premarket approval application

(PMA)or notice of product development protocol

(PDP)is required.* Devices described in paragraph (b)(2) of this section shall have an approved PMA or a declared completed PDP in effect before being placed in commercial distribution. Dated: May 31, 2007. Linda S. Kahan, Deputy Director, Center for Devices and Radiological Health. [FR Doc. E7-11240 Filed 6-11-07; 8:45 am] BILLING CODE 4160-01-S DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [TD 9328] RIN 1545-BB90 Safe Harbor for Valuation Under Section 475. AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. SUMMARY: This document sets forth an elective safe harbor that permits dealers in securities and dealers in commodities to elect to use the values of positions reported on certain financial statements as the fair market values of those positions for purposes of section 475 of the Internal Revenue Code (Code). This safe harbor is intended to reduce the compliance burden on taxpayers and to improve the administrability of the valuation requirement of section 475 for the IRS. DATES: *Effective Date:* These regulations are effective on June 12, 2007. *Applicability Dates:* Section 1.475(a)-4, concerning a safe harbor to use applicable financial statement values for purposes of section 475, applies to taxable years ending on or after June 12, 2007. FOR FURTHER INFORMATION CONTACT: Marsha A. Sabin or John W. Rogers III

(202)622-3950 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-1945. Comments on the accuracy of the estimated burden and suggestions for reducing the burden should be sent to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. The collection of information in these regulations is in § 1.475(a)-4(f)(1) and § 1.475(a)-4(k). This information is required by the IRS to avoid any uncertainty about whether a taxpayer has made an election and to verify compliance with section 475 and the safe harbor method of accounting described in § 1.475(a)-4(d). This information will be used to facilitate examination of returns and to determine whether the amount of tax has been calculated correctly. The collection of the information is required to properly determine the amount of income or deduction to be taken into account. The taxpayers providing this information are sophisticated dealers in securities or commodities. *Estimated total annual recordkeeping burden:* 49,232 hours. *Estimated average annual burden per recordkeeper:* 4-6 hours. *Estimated number of recordkeepers:* 12,308. *Estimated frequency of recordkeeping:* Annually. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number. Books and records relating to the collection of information must be retained as long as their contents might become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Background This document contains amendments to 26 CFR Part 1 under section 475 of the Internal Revenue Code (Code). Section 475 was added to the Code by section 13223(a) of the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66, 107 Stat. 312). Section 475(a) generally provides that the securities held by dealers in securities must be valued as of the last business day of the year at fair market value. Section 475(e) allows dealers in commodities to elect similar treatment for their commodities. Under section 475(f), if a person is engaged in a trade or business as a trader in securities or a trader in commodities, the person may elect for the section 475 mark-to-market regime to apply to their trade or business. Section 475(g) directs the Secretary to prescribe regulations that may be necessary or appropriate to carry out the purposes of section 475. The legislative history of section 475 indicates that, under this authority, the Secretary may issue regulations to permit the use of valuation methodologies that reduce the administrative burden of compliance on the taxpayer but clearly reflect income for Federal income tax purposes. On May 5, 2003, the Treasury Department and the IRS published in the **Federal Register** an advance notice of proposed rulemaking (Safe Harbor for Satisfying Certain Statutory Requirements for Valuation under Section 475 for Certain Securities and Commodities) (REG-100420-03) [68 FR 23632] (the ANPRM); Announcement 2003-35, 2003-1 CB 956 (see § 601.601(d)(2)). The ANPRM solicited comments on whether a safe harbor approach using values reported on an applicable financial statement for certain securities may be used for purposes of section 475. On May 24, 2005, the Treasury Department and the IRS published in the **Federal Register** a notice of proposed rulemaking (Safe Harbor for Valuation under Section 475) (REG-100420-03) [70 FR 29663] (the NPRM). The NPRM set forth a possible safe harbor for valuing these securities and asked for comments on various aspects of the safe harbor. A public hearing was held on September 15, 2005. The IRS received written and electronic comments responding to the NPRM. After consideration of all comments, the proposed regulations are adopted as amended by this Treasury decision. The amendments are discussed in this preamble. Explanation of Provisions and Summary of Contents Overview Section 475(a) requires dealers in securities to mark their securities to market. Section 475(e) allows dealers in commodities to elect similar treatment for their commodities. If the security or commodity is inventory, it must be included in inventory at its fair market value. If it is not inventory and is held at the end of the taxable year, gain or loss is recognized as if the security or commodity had been sold for its fair market value on the last business day of the taxable year. Although the term “fair market value” has a long-standing and well-established meaning within the tax law, it is sometimes difficult to determine the fair market value of certain securities and commodities. This has impeded the efficient administration of the mark-to-market system under section 475. Consequently, with a view to improving the administrability of the valuation requirements of section 475, the Treasury Department and the IRS issued the NPRM, which set forth a safe harbor for valuing securities and commodities under section 475. These final regulations adopt the approach of the NPRM with the modifications discussed in this preamble. Underlying Principles of the Safe Harbor The safe harbor generally permits eligible taxpayers to elect to have the values that are reported for eligible positions on certain financial statements treated as the fair market values of those eligible positions for purposes of section 475, if certain conditions are met. The safe harbor is based upon the principle that if the mark-to-market method used for financial reporting is sufficiently consistent with the mark-to-market method required by section 475, then the values used for financial reporting should be acceptable values for purposes of section 475. To ensure minimal divergence from fair market value under tax principles, these regulations impose certain restrictions on the financial accounting methods and financial statements that are eligible for the safe harbor and also require certain adjustments to the values of the eligible positions on those financial statements that may be used under the safe harbor. The safe harbor and its various requirements and limitations are based upon the business model for derivatives dealers that was described in comments received in response to the ANPRM and the NPRM. According to these comments, dealers seek to capture and profit from bid-ask spreads in the marketplace by entering into balanced portfolios for their derivatives, that is, positions that offset each other, either individually or in the aggregate. Although dealers may have some open positions, they seek to have balanced portfolios with a majority of positions offsetting each other. Those offsetting positions generally remain on dealers' books over the terms of the positions. The spread between bid and ask values contains the dealer's profit, which compensates the dealer for all risks and expenses. The creation of a balanced portfolio may be seen as giving rise to a synthetic annuity, with a value that is largely immune from market-related changes in the values of the component positions. At the time the dealer has entered into the offsetting positions and created the synthetic annuity, all steps required to earn the income from the synthetic annuity have been completed. Recognizing the present value of the income attributable to the bid-ask spread is appropriate in the taxable year the synthetic annuity is created. For a matched book of eligible positions, such as a dealer's portfolio of interest rate swap contracts, use of bid or ask values approximates realization accounting and fails to recognize in income the present value of the synthetic annuity in the taxable year that the synthetic annuity is created. The final regulations are to be applied in a manner consistent with the premise that the present value of the synthetic annuity should be recognized in income not later than the taxable year in which the synthetic annuity is created. Commentators described a different business model for securities that are not derivatives, commonly known as physicals. Under this model, dealers plan on rapid turnover of the physicals that are traded on qualified boards or exchanges or on liquid over-the-counter markets. Except for those acquired at the end of the taxable year, the acquisition and disposition of a physical occurs within a single taxable year, so that the effect of capturing a bid-ask spread also occurs entirely within that year. Consequently, for securities traded on a qualified board or exchange, as defined under section 1256(g)(7), there is little difference between the results of realization and mark-to-market accounting, and little opportunity for manipulation. Eligible Taxpayers The NPRM provided that traders could elect to use the safe harbor. In both the ANPRM and the NPRM, the Treasury Department and IRS asked for comments addressing whether traders in securities and commodities should be able to elect the safe harbor and whether the business model for traders differs from the business model for dealers. The commentators that recommended that the safe harbor apply to traders did so without providing information about the business model for traders and without suggesting how the limitations set forth in the NPRM would apply to traders. Without a full understanding of the business model for traders, the Treasury Department and the IRS have determined that it would be unwise to include traders in the safe harbor at this time. Accordingly, the final regulations provide that the safe harbor is available only to taxpayers who are dealers in securities under section 475(a) or who are dealers in commodities and are subject to the election described in section 475(e)(1). Eligible Positions Because financial markets and products evolve rapidly, listing the securities and commodities in the regulations would make the regulations less flexible and dynamic in the future. To ensure that the safe harbor will be adaptable and administrable in a changing environment, the Commissioner will issue concurrently with these final regulations a revenue procedure that will list the types of securities and commodities that are subject to the safe harbor. This revenue procedure may be updated as necessary. It is important to note, however, that the valuation methodology under the safe harbor applies only for positions that, taking into account any elections and identifications that are in effect, are required to be marked to market under section 475. That is, the safe harbor only addresses valuation and does not expand or contract the scope or application of section 475. For example, if a security is not marked to market under section 475 because it has been properly identified as held for investment, then it may not be marked to market for Federal income tax purposes even though the safe harbor election is in effect and the security is properly marked to market on the financial statement in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP). Similarly, if a security is not marked to market on the applicable financial statement because, for example, it is a hedge for financial statement purposes but section 475(a) applies because the security is not a hedging transaction for tax purposes, then the security must nevertheless be marked to market under section 475. Eligible Method The NPRM set forth four core requirements that a financial accounting method must satisfy in order to be eligible for the safe harbor. First, the method must mark eligible positions to market through valuations made as of the last business day of each taxable year. Second, it must recognize into income on the income statement any gain or loss from marking eligible positions to market. Third, it must recognize into income on the income statement any gain or loss on disposition of an eligible position as if a year-end mark occurred immediately before the disposition. Fourth, it must arrive at fair value in accordance with U.S. GAAP. In addition to these core requirements, the NPRM imposed certain limitations to ensure minimal divergence from fair market value. Under the first limitation, the financial accounting method must not result in values at or near the bid or ask values, even if the use of bid or ask values is permissible under U.S. GAAP. This limitation applies to all eligible positions except those that are traded on a qualified board or exchange, as defined in section 1256(g)(7). This limitation ensures that a sufficient portion of the synthetic annuity captured by a dealer is reported in the correct accounting period of that dealer. Under the second limitation in the NPRM, if a method of valuation is based on the present value of projected cash flows from an eligible position or positions, that method must not take into account any income or expense attributable to a period or time on or before the valuation date. This limitation ensures that items of income or expense will not be accounted for twice, first through current recognition and then again in the mark. Under the third limitation in the NPRM, no cost or risk may be accounted for more than once, either directly or indirectly. For example, a financial accounting method may allow a special adjustment for credit risk. If, however, a method computes the present value of projected cash flows using a discount rate that takes credit risk into account and the method employs a special adjustment that takes some or all of the credit risk into account, then the method does not satisfy this limitation. This limitation ensures that items of income or expense will not be accounted for twice. Most of the comments received on the NPRM focused on the core requirements and limitations for eligible methods. As explained in this preamble, the final regulations address those comments, rejecting some suggestions and modifying the regulations in response to others. The majority of the comments focused on

(1)requiring changes in value to be reported on the income statement,

(2)limiting the use of bid and ask values, and

(3)excepting certain types of physical securities from the bid-ask limitation. Income Statement Requirement—§ 1.475(a)-4(d)(2)(ii) Some commentators suggested that eligible taxpayers be allowed to report changes in value on either the balance sheet or the income statement, because both are rigorously reviewed. They also expressed concern that, because certain items of other comprehensive income generally appear on the balance sheet and not on the income statement, the methodology used by many taxpayers for financial reporting would fail to be an eligible method and, therefore, would not satisfy the safe harbor. When changes in value appear on the income statement, they also appear in retained earnings and in earnings-per-share. This creates a tension between the benefits of higher earnings for financial reporting and the benefit of lower income for tax reporting. This tension helps to ensure the reliability of values for tax purposes, a fundamental concept underlying the safe harbor. Balance sheet items, such as other comprehensive income, do not have the same tension. Therefore, the final regulations retain the income statement requirement of the NPRM. Bid-Ask Limitation Some commentators suggested that the bid-ask limitation be eliminated to make it easier for taxpayers to qualify for the safe harbor. These commentators indicated that dealers generally do not retain records of individual positions' bid-ask spreads for any meaningful period of time, and it would be burdensome to monitor the spreads of those positions for which records do exist. The safe harbor set forth in the NPRM does not add to taxpayers' existing recordkeeping burden. Without the safe harbor, other sections of the Code would require taxpayers to keep records to prove the values of individual positions or to keep records of spreads if taxpayers account for their income and loss based on those spreads. The safe harbor simply allows taxpayers to use those same records to prepare both the applicable financial statement and their tax return. Accordingly, the bid-ask limitation has been retained in the final regulations. Additionally, according to some commentators, the requirement in the NPRM that values should be nearer to the mid-market value than to the bid or ask value could be interpreted in two ways. First, it could be a requirement that, if not met for a particular position, would disqualify an entire financial accounting method as an eligible method. Second, it could be a safe harbor that, if not met for a particular position, would not disqualify the method but would require the taxpayer to prove that the method consistently produces values nearer to mid-market than to bid or ask. The final regulations make it clear that this provision is a safe harbor and that a method that may occasionally produce a value that is not nearer to mid-market than to bid or ask will not preclude use of the safe harbor. The Treasury Department and the IRS also received suggestions from commentators seeking expansion of the exceptions to the bid-ask limitations. Some commentators noted that the exception for exchange-traded positions in the NPRM was too narrow because it did not cover those equities and debt securities, such as Treasury obligations, that are traded in very liquid, over-the-counter markets and have easily determinable values. These commentators suggested that, rather than limit the exception to positions on qualified boards or exchanges as defined in section 1256(g)(7), the regulations should include within the exception all positions for which there is an established financial market within the meaning of § 1.1092(d)-1(b). The exception for positions that are traded on a qualified board or exchange described in section 1256(g)(7) was included in the NPRM to except those positions with spreads so small that applying the bid-ask limitation would have little effect on the determination of fair market value. Because section 1092 is an anti-abuse provision that Congress intended to be broad in scope, the definition of established financial market in § 1.1092(d)-1(b) reflects a corresponding breadth. Thus, expansion of the exception for exchange-traded positions by reference to § 1.1092(d)-1(b) might inappropriately except too many positions from the general bid-ask limitation. For example, many derivative contracts for which dealers lock in spreads are positions for which there is an established financial market. See § 1.1092(d)-1(b), (c). Consequently, the reference to section 1256(g)(7) has been retained. Some of the comments about the bid-ask exception were prompted by the view that debt instruments should be excepted from the bid-ask limitation for some of the same reasons as positions traded on a 1256(g)(7) board or exchange. The Treasury Department and the IRS, however, decline at this time to adopt the suggestion that debt instruments be generally excepted from the bid-ask limitation. The Treasury Department and the IRS recognize that dealers' business model for debt instruments generally is to turn over debt securities very rapidly and that dealers have a strong economic incentive to do so because holding debt securities consumes balance sheet resources and poses risk management issues. Nevertheless, based on comments received, the Treasury Department and the IRS do not possess sufficient information to conclude that spreads in the over-the-counter debt markets are *de minimis* . Additionally, debt instruments may be used to lock in spreads with respect to open positions in other instruments, such as derivatives. Therefore, excepting over-the-counter debt instruments from the bid-ask limitation may be contrary to the tenets of the dealer business model for derivatives. Moreover, excepting debt instruments from the bid-ask limitation might introduce a tax-motivated distortion into the marketplace, as taxpayers may decide to lock in spreads with tax-advantaged instruments rather than with instruments that are selected on the basis of their non-tax economic attributes. The Commissioner may, however, designate additional positions as being exempt from the bid-ask limitation. Understanding the need for a limitation on the use of bid and ask values, one commentator suggested an open position exception to the bid-ask limitation. Under this alternative, offsetting positions in the balanced portion of a portfolio would not be valued at or near the bid or ask values. Open positions, however, would not be subject to this limitation. Instead, they could be valued at any value between and including the bid and ask values. According to this commentator, the bid-ask limitation ensures that the present value of the income attributable to the bid-ask spread is recognized in the taxable year the synthetic annuity is created. Open positions, it was noted, do not create a synthetic annuity so the bid-ask limitation need not apply to them. The Treasury Department and the IRS decline to adopt the rule suggested by this commentator. Under a mark-to-market system, when a dealer enters into an open position with a customer, that dealer has captured the spread inherent in that customer position, even if the customer position is not offset by another position. Although it can be argued that a dealer may be forced to pay a spread to obtain a position offsetting the open customer position, to assume a dealer would do so across the board would be to ascribe customer status (which is paying spreads) to the dealer, a result inconsistent with the dealer business model (which is charging spreads). Additionally, in the event a dealer actually pays a spread to offset the open customer position, the disadvantageous terms of the offsetting position will be reflected in the mark-to-market valuation of that position. Administrability is also a concern. Before accepting the suggestion that a dealer should recognize no mark-to-market income from any open position until the position is offset by one or more other positions, the Treasury Department and the IRS would need more information regarding the manner in which to verify the process for determining the proper amounts of adjustments taxpayers will use to achieve this result. Eligible Methods, Eligible Positions and the Safe Harbor Election The final regulations modify the NPRM by providing that the election to use the safe harbor is made by filing a statement with the taxpayer's return declaring that the taxpayer makes the safe harbor election for all eligible positions for which it has an eligible method. An example elaborating on this concept has been added to the final regulations. Applicable Financial Statements Not all financial statements qualify under the safe harbor. Consequently, these regulations set forth a system that enables a taxpayer to determine which one of its financial statements, if any, may be used when applying the safe harbor. The final regulations adopt the provisions of the NPRM on applicable financial statements. Some commentators expressed concern that U.S. branches of foreign banks would not be eligible to use the safe harbor because they do not prepare financial statements in accordance with U.S. GAAP. The comments suggested that many of these branches prepare their financial statements in accordance with rules that are substantially similar to U.S. GAAP and, therefore, should be permitted to use those non-U.S. GAAP financial statements for purposes of the safe harbor. The commentators also suggested that call reports submitted to U.S. bank regulators by foreign banks have sufficient indicia of reliability to merit use in the safe harbor, even though changes over time in the values in those reports may not be directly reflected in income statements prepared according to U.S. GAAP. As noted in this preamble, the safe harbor is based on the concept that, with appropriate limitations, mark-to-market values used on certain financial statements can be sufficiently consistent with fair market values under section 475. The IRS and Treasury Department have concluded that the requirements and limitations of the safe harbor ensure sufficient consistency when applied to financial statements prepared according to U.S. GAAP. This conclusion is less clear when the requirements and limitations are applied to financial statements prepared under other accounting regimes. Consequently, the final regulations retain the requirement that applicable financial statements be prepared in accordance with U.S. GAAP. The final regulations retain the requirement in the NPRM that, to be an eligible method, a financial statement method of accounting must cause changes in value to be recognized into income on the income statement. Nevertheless, making it practical for foreign banks to use the safe harbor for their U.S. branches could be valuable not only to the foreign banks but also to the IRS in its administration and application of section 475. Therefore, the IRS and Treasury Department are interested in expanding the scope of these regulations so that they may apply in the future to foreign banks. Answers to the following questions would facilitate efforts to achieve that expansion. First, should the safe harbor require that the values reported in the call report of the foreign bank be the same values that are reported in the income statement filed in the foreign bank's home country? If so, should the foreign bank, together with its certified independent registered public accountant, file with the U.S. tax return, subject to penalties of perjury, a statement to that effect? Second, should the valuation standards used in the foreign bank's home country be identical to the valuation standards under U.S. GAAP, and if not identical, in what ways may they differ? If so, should the foreign bank, together with its certified independent registered public accountant, file a statement with the U.S. tax return, subject to penalties of perjury, describing the differences, if any, between the foreign country valuation standards and those under U.S. GAAP? Further, should the foreign valuation standards be fully consistent with, and should the foreign country have formally adopted, International Financial Reporting Standards as published by the International Accounting Standards Board? Third, should the income statement filed by the foreign bank be filed with the foreign bank's home country bank regulator (as distinct from a market regulator like the SEC)? Fourth, for purposes of these questions, should the term “home country” mean the country in which the foreign bank is chartered or incorporated? Record Retention and Production The safe harbor will be administrable only if the IRS can readily verify that the financial statements at issue are taxpayers' applicable financial statements, that the accounting methods used are eligible methods, and that the values used on the applicable financial statements are also used on the Federal income tax return. Consequently, recordkeeping and record production are critical to the effective administration of the safe harbor. These final regulations retain the provisions of the NPRM regarding record retention and production. They provide specific requirements for the types of records that must be maintained and provided, to enable ready verification. In general, electing taxpayers must clearly show:

(1)That the same value used for financial reporting was used on the Federal income tax return;

(2)that no eligible position subject to section 475 is excluded from the application of the safe harbor; and

(3)that only eligible positions subject to section 475 are carried over to the Federal income tax return under the safe harbor. Commentators expressed concern that the language of the NPRM requiring all schedules, exhibits, computer programs, and other information used to produce values was too broad, making it difficult to know what materials must be retained and produced. They also expressed concern that a requirement to keep computer programs and information used in producing values not only would require taxpayers to keep information about models that are changed frequently but also would encourage IRS employees to examine valuation models not just for compliance with the definition of “eligible method” but also for examining the accuracy of the underlying valuations. The final regulations retain the record retention and production requirements set forth in the NPRM. Other sections of the Code already require taxpayers to maintain records sufficient to support the accuracy of items reported on their Federal tax returns. Except for a possible increase in the retention period in some instances, therefore, the final regulations create no additional burden. To avoid confusion or undue burden, the final regulations permit a taxpayer to enter into an agreement with the IRS specifying which records must be maintained, how they must be maintained, and for how long they must be maintained. These agreements may include terms covering the maintenance of computer programs and information used in producing values. The maintenance and production requirements of the regulations preclude undue delay in producing records. One commentator suggested that the 30-day deadline provided too little time to produce records. During the development of these regulations, the IRS conducted a test program to determine not only whether values could be traced from financial statements to the tax return but also how long it would take for taxpayers to produce the necessary records. This test program demonstrated that 30 days was generally a sufficient period of time. For specific cases, the Commissioner may excuse failures to provide records within 30 days if the taxpayer shows reasonable cause for the failure and has made a good faith effort to comply. As noted above, the taxpayer may also enter into an agreement with the Commissioner that sets forth a different time period. Accordingly, the final regulations retain the general 30-day requirement. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based upon the expectation that the safe harbor will be used primarily by dealers in securities that are financial institutions with a sophisticated understanding of the capital markets. Because section 475 is elective for dealers in commodities, some small businesses could qualify for the safe harbor if they make two voluntary elections:

(1)An election to mark to market commodities under section 475 and

(2)an election to apply the safe harbor. Because both elections are voluntary, it is unlikely any small business taxpayer who thinks the reporting and recordkeeping requirements are too burdensome will make these elections. Furthermore, the total average estimated burden per taxpayer is small, as reported earlier in the preamble. This is because most of the recordkeeping requirements do not require taxpayers to generate new records, but instead require records used for financial reporting purposes to be kept for tax reporting purposes. For all of these reasons, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, the notice of rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. Drafting Information The principal authors of these regulations are Marsha A. Sabin and John W. Rogers III, Office of the Associate Chief Counsel (Financial Institutions and Products). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 602 Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR parts 1 and 602 are amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 is amended by adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 1.475(a)-4 also issued under 26 U.S.C. 475(g). * * * **Par. 2.** Section 1.475-0 is amended by: 1. Revising the introductory text. 2. Adding entries to the table for § 1.475(a)-4. 3. Redesignating the entry for § 1.475(e)-1 as § 1.475(g)-1. The revision and addition reads as follows: § 1.475-0 Table of contents. This section lists the major captions in §§ 1.475(a)-3, 1.475(a)-4, 1.475(b)-1, 1.475(b)-2, 1.475(b)-4, 1.475(c)-1, 1.475(c)-2, 1.475(d)-1 and 1.475(g)-1. § 1.475(a)-4 Safe Harbor for Valuation Under Section 475.

(a)Overview.

(1)Purpose.

(2)Dealer business model.

(3)Summary of paragraphs.

(b)Safe harbor.

(1)General rule.

(2)Example. Use of eligible and non-eligible methods.

(3)Scope of the safe harbor.

(c)Eligible taxpayer.

(d)Eligible method.

(1)Sufficient consistency.

(2)General requirements.

(i)Frequency.

(ii)Recognition at the mark.

(iii)Recognition on disposition.

(iv)Fair value standard.

(3)Limitations.

(i)Bid-ask method.

(A)General Rule.

(B)Safe harbor.

(ii)Valuations based on present values of projected cash flows.

(iii)Accounting for costs and risks.

(4)Examples.

(e)Compliance with other rules.

(f)Election.

(1)Making the election.

(2)Duration of the election.

(3)Revocation.

(i)By the taxpayer.

(ii)By the Commissioner.

(4)Re-election.

(g)Eligible positions.

(h)Applicable financial statement.

(1)Definition.

(2)Primary financial statement.

(i)Statement required to be filed with Securities and Exchange Commission (SEC).

(ii)Statement filed with a Federal agency other than the IRS.

(iii)Certified audited financial statement.

(3)Example. Primary financial statement.

(4)Financial statements of equal priority.

(5)Consolidated groups.

(6)Supplement or amendment to a financial statement.

(7)Certified audited financial statement.

(i)[Reserved.]

(j)Significant business use.

(1)In general.

(2)Financial statement value.

(3)Management of a business as a dealer.

(4)Significant use.

(k)Retention and production of records.

(1)In general.

(2)Specific requirements.

(i)Reconciliation.

(A)In general.

(B)Values on books and records with supporting schedules.

(C)Consolidation schedules.

(ii)Instructions provided by the Commissioner.

(3)Time for producing records.

(4)Retention period for records.

(5)Agreements with the Commissioner.

(l)[Reserved.]

(m)Use of different values. § 1.475(g)-1 Effective dates. **Par. 3.** Section 1.475(a)-4 is added to read as follows: § 1.475(a)-4 Valuation safe harbor.

(a)*Overview* —(1) *Purpose.* This section sets forth a safe harbor that, under certain circumstances, permits taxpayers to elect to use the values of positions reported on certain financial statements as the fair market values of those positions for purposes of section 475. This safe harbor is based on the principle that, if a mark-to-market method used for financial reporting is sufficiently consistent with the requirements of section 475 and if the financial statement employing that method has certain indicia of reliability, then the values used on that financial statement may be used for purposes of section 475. If other provisions of the Internal Revenue Code or regulations require adjustments to fair market value, use of the safe harbor does not eliminate the need for those adjustments. See paragraph

(e)of this section.

(2)*Dealer business model.* The safe harbor is based on the business model for a derivatives dealer. Under this model, the dealer seeks to capture and profit from bid-ask spreads in the marketplace by entering into substantially offsetting positions with customers that will remain on the derivatives dealer's books over their terms. Because the positions in the aggregate tend to offset each other, the dealer has achieved a predictable net cash flow (for example, a synthetic annuity) that reflects the captured bid-ask spread. This net cash flow is generally impervious to market fluctuations in the values on which the component derivatives are based. Section 475 requires current recognition of the present value of the net cash flow attributable to the capture of these spreads.

(3)*Summary of paragraphs.* Paragraph

(b)of this section sets forth the safe harbor. To determine who may use the safe harbor, paragraph

(c)of this section defines the term “eligible taxpayer.” Paragraph

(d)of this section sets forth the basic requirements for determining whether the method used for financial reporting is sufficiently consistent with the requirements of section 475. Paragraph

(e)of this section describes adjustments to the financial statement values that may be required for purposes of applying this safe harbor. Paragraph

(f)of this section describes the procedure for making the safe harbor election and the conditions under which the election may be revoked. Paragraph

(g)of this section provides that the Commissioner will issue a revenue procedure that lists the types of securities and commodities that are eligible positions for purposes of the safe harbor. Using rules for determining priorities among financial statements, paragraph

(h)of this section defines the term “applicable financial statement” and so describes the financial statement, if any, whose values may be used in the safe harbor. In some cases, as required by paragraph

(j)of this section, the safe harbor is available only if the taxpayer's operations make significant business use of financial statement values. Paragraph

(k)of this section sets forth requirements for record retention and record production. Paragraph

(m)of this section provides that the Commissioner may use fair market values that clearly reflect income, but which differ from values used on the applicable financial statement, if an electing taxpayer fails to comply with the recordkeeping and record production requirements of paragraph

(k)of this section.

(b)*Safe harbor* —(1) *General rule.* Subject to any adjustment required by paragraph

(e)of this section, if an eligible taxpayer uses an eligible method for the valuation of an eligible position on its applicable financial statement and the eligible taxpayer is subject to the election described in paragraph

(f)of this section, the value that the eligible taxpayer assigns to that eligible position on its applicable financial statement is the fair market value of the eligible position for purposes of section 475 and must be used for purposes of section 475, even if that value is not the fair market value of the position for any other purpose of the internal revenue laws. Notwithstanding the rule set forth in this paragraph, the Commissioner may, in certain circumstances, use fair market values that clearly reflect income but differ from the values used on the applicable financial statement. See paragraph

(m)of this section.

(2)Example. *Use of eligible and non-eligible methods.* X uses eligible methods on its applicable financial statement for some, but not all, securities and commodities that are eligible positions. When X elects into the safe harbor, the election applies to all eligible positions for which X has an eligible method. Therefore, once the election is in effect, the financial statement values for eligible positions for which X has an eligible method are the fair market values of those eligible positions for purposes of section 475. Since X, however, does not have an eligible method for all eligible positions, those eligible positions for which X does not have an eligible method remain subject to the fair market value requirements of section 475 as set out in case law and otherwise.

(3)*Scope of the safe harbor.* The safe harbor may be used only to determine values for eligible positions that are properly marked to market under section 475. It does not determine whether any positions may or may not be subject to mark-to-market accounting under section 475.

(c)*Eligible taxpayer* . An eligible taxpayer is—

(1)A dealer in securities, as defined in section 475(c)(1); or

(2)A dealer in commodities, as defined in section 475(e), that is subject to an election under section 475(e).

(d)*Eligible method* —(1) *Sufficient consistency.* An eligible method is a mark-to-market method that is sufficiently consistent with the requirements of a mark-to-market method under section 475. To be sufficiently consistent with the requirements of a mark-to-market method under section 475, the eligible method must satisfy all of the requirements of paragraph (d)(2) and paragraph (d)(3) of this section.

(2)*General requirements.* The method—

(i)*Frequency.* Must require a valuation of the eligible position no less frequently than annually, including a valuation as of the last business day of the taxable year;

(ii)*Recognition at the mark.* Must recognize into income on the income statement for each taxable year mark-to-market gain or loss based upon the valuation or valuations described in paragraph (d)(2)(i) of this section;

(iii)*Recognition on disposition.* Must require, on disposition of the eligible position, recognition into income (on the income statement for the taxable year of disposition) as if a year-end mark occurred immediately before such disposition; and

(iv)*Fair value standard.* Must require use of a valuation standard that arrives at fair value in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP).

(3)*Limitations* —(i) *Bid-ask method* —(A) *General rule.* Except for eligible positions that are traded on a qualified board or exchange, as defined in section 1256(g)(7), or eligible positions that the Commissioner designates in a revenue procedure or other published guidance, the valuation standard used must not, other than on a *de minimis* portion of a taxpayer's positions, permit values at or near the bid or ask value. Consequently, the valuation method described in § 1.471-4(a)(1) fails to satisfy this paragraph (d)(3)(i)(A).

(B)*Safe harbor.* The restriction in paragraph (d)(3)(i)(A) of this section is satisfied if the method consistently produces values that are closer to the mid-market values than they are to the bid or ask values.

(ii)*Valuations based on present values of projected cash flows.* If the method of valuation consists of projecting cash flows from an eligible position or positions and determining the present value of those cash flows, the method must not take into account any cash flows attributable to a period or time on or before the valuation date. In addition, adjustment of the gain or loss recognized on the mark may be required with respect to payments that will be made after the valuation date to the extent that portions of the payments have been recognized for tax purposes before the valuation and appropriate adjustment has not been made for purposes of determining financial statement value.

(iii)*Accounting for costs and risks.* Valuations may account for appropriate costs and risks, but no cost or risk may be accounted for more than once, either directly or indirectly. Further, no valuation adjustment for any cost or risk may be made for purposes of this safe harbor if that valuation adjustment is not also permitted by, and taken for, U.S. GAAP purposes on the taxpayer's applicable financial statement. If appropriate, the costs and risks that may be accounted for include, but are not limited to, credit risk (appropriately adjusted for any credit enhancement), future administrative costs, and model risk. An adjustment for credit risk is implicit in computing the present value of cash flows using a discount rate greater than a risk-free rate. Accordingly, a determination of whether any further downward adjustment to value for credit risk is warranted, or whether an upward adjustment is required, must take that implicit adjustment into consideration.

(4)*Examples.* The following examples illustrate this paragraph (d): Example 1.

(i)X, a calendar year taxpayer, is a dealer in securities within the meaning of section 475(c)(1). X generally maintains a balanced portfolio of interest rate swaps and other interest rate derivatives, capturing bid-ask spreads and keeping its market exposure within desired limits (using, if necessary, additional derivatives for this purpose). X uses a mark-to-market method on a statement that it is required to file with the United States Securities and Exchange Commission

(SEC)and that satisfies paragraph (d)(2) of this section with respect to both the contracts with customers and the additional derivatives. When determining the amount of any gain or loss realized on a sale, exchange, or termination of a position, X makes a proper adjustment for amounts taken into account respecting payments or receipts. All of X's counterparties on the derivatives have credit ratings of AA/aa, according to standard credit ratings obtained from private credit rating agencies.

(ii)Under X's valuation method, as of each valuation date, X determines a mid-market probability distribution of future cash flows under the derivatives and computes the present values of these cash flows. In computing these present values, X uses an industry standard yield curve that is appropriate for obligations by persons with credit ratings of AA/aa. In addition, based on information that includes its own knowledge about the counterparties, X adjusts some of these present values either upward or downward to reflect X's reasonable judgment about the extent to which the true credit status of each counterparty's obligation, taking credit enhancements into account, differs from AA/aa.

(iii)X's methodology does not violate the requirement in paragraph (d)(3)(iii) of this section that the same cost or risk not be taken into account, directly or indirectly, more than once. Example 2.

(i)The facts are the same as in *Example 1,* except that X uses a AAA/aaa rate to discount the payments to be received under the derivatives. Based on information that includes its own knowledge about the counterparties, X adjusts these present values to reflect X's reasonable judgment about the extent to which the true credit status of each counterparty's obligation, taking credit enhancements into account, differs from a AAA/aaa obligation.

(ii)X's methodology does not violate the requirement in paragraph (d)(3)(iii) of this section that the same cost or risk not be taken into account, directly or indirectly, more than once. Example 3.

(i)The facts are the same as in *Example 1,* except that, after computing present values using the discount rates that are appropriate for obligors with credit ratings of AA/aa, and based on information that includes X's own knowledge about the counterparties, X adjusts some of these present values either upward or downward to reflect X's reasonable judgment about the extent to which the true credit status of each counterparty's obligation, taking credit enhancements into account, differs from AAA/aaa.

(ii)X's methodology violates the requirement in paragraph (d)(3)(iii) of this section that the same cost or risk not be taken into account, directly or indirectly, more than once. By using a AA/aa discount rate, X's method takes into account the difference between risk-free obligations and AA/aa obligations. This difference includes the difference between a rating of AAA/aaa and one of AA/aa. By adjusting values for the difference between a rating of AAA/aaa and one of AA/aa, X takes into account risks that it had already accounted for through the discount rates that it used. The same result would occur if X judged some of its counterparties' obligations to be of AAA/aaa quality but X failed to adjust the values of those obligations to reflect the difference between a rating of AAA/aaa and one of AA/aa. Example 4.

(i)The facts are the same as in *Example 1,* except that X determines the mid-market value for each derivative and then subtracts the corresponding part of the bid-ask spread.

(ii)X's methodology violates the rule in paragraph (d)(3)(i) of this section that forbids valuing positions at or near the bid or ask value. Example 5.

(i)The facts are the same as in *Example 1,* and, in addition, X's adjustments for all risks and costs, including credit risk, future administrative costs and model risk, may occasionally cause the adjusted value of an eligible position to be at or near the bid value or ask value.

(ii)X's methodology does not violate the rule in paragraph (d)(3)(i)(A) of this section that forbids valuing eligible positions at or near the bid or ask value.

(e)*Compliance with other rules.* Notwithstanding any other provisions of this section, the fair market values for purposes of the safe harbor must be consistent with section 482, or rules that adopt section 482 principles, when applicable. For example, if a notional principal contract is subject to section 482 or section 482 principles, the values of future cash flows taken into account in determining the value of the contract for purposes of section 475 must be consistent with section 482.

(f)*Election* —(1) *Making the election.* Unless the Commissioner prescribes otherwise, an eligible taxpayer elects under this section by filing with the Commissioner a statement declaring that the taxpayer makes the safe harbor election in this section for all eligible positions for which it has an eligible method. In addition to any other information that the Commissioner may require, the statement must describe the taxpayer's applicable financial statement for the first taxable year for which the election is effective and must state that the taxpayer agrees to provide upon the request of the Commissioner all information, records, and schedules in the manner required by paragraph

(k)of this section. The statement must be attached to a timely filed Federal income tax return (including extensions) for the taxable year for which the election is first effective.

(2)*Duration of the election.* Once made, the election continues in effect for all subsequent taxable years unless revoked.

(3)*Revocation* —(i) *By the taxpayer.* An eligible taxpayer that is subject to an election under this section may revoke the election only with the consent of the Commissioner.

(ii)*By the Commissioner.* The Commissioner, after consideration of the relevant facts and circumstances, may revoke an election under this section, effective beginning with the first open year for which the election is effective or with any subsequent year, if—

(A)The taxpayer fails to comply with paragraph

(k)of this section (concerning record retention and production) and the taxpayer does not show reasonable cause for this failure;

(B)The taxpayer ceases to have an applicable financial statement or ceases to use an eligible method; or

(C)For any other reason, no more than a de minimis number of eligible positions, or no more than a de minimis fraction of the taxpayer's eligible positions, are covered by the safe harbor in paragraph

(b)of this section.

(4)*Re-election.* If an election is revoked, either by the Commissioner or by the taxpayer, the taxpayer (or any successor in interest of the taxpayer) may not make the election without the consent of the Commissioner for any taxable year that begins before the date that is six years after the first day of the earliest taxable year affected by the revocation.

(g)*Eligible positions.* For any taxpayer, an eligible position is any security or commodity that the Commissioner in a revenue procedure or other published guidance designates as an eligible position with respect to that taxpayer for purposes of this safe harbor.

(h)*Applicable financial statement* —(1) *Definition.* An eligible taxpayer's applicable financial statement for a taxable year is the taxpayer's primary financial statement for that year if that primary financial statement is described in paragraph (h)(2)(i) of this section (concerning statements required to be filed with the SEC) or if that primary financial statement both meets the requirements of paragraph

(j)of this section (concerning significant business use) and is described in either paragraph (h)(2)(ii) or

(iii)of this section. Otherwise, or if the taxpayer does not have a primary financial statement for the taxable year, the taxpayer does not have an applicable financial statement for the taxable year.

(2)*Primary financial statement.* For any taxable year, an eligible taxpayer's primary financial statement is the financial statement, if any, described in one or more of paragraphs (h)(2)(i), (ii), and

(iii)of this section. If more than one financial statement of the taxpayer for the year is so described, the primary financial statement is the one first described in paragraphs (h)(2)(i), (ii), and

(iii)of this section. A taxpayer has only one primary financial statement for any taxable year.

(i)*Statement required to be filed with the Securities and Exchange Commission (SEC)* . A financial statement that is prepared in accordance with U.S. GAAP and that is required to be filed with the SEC, such as the 10--K or the Annual Statement to Shareholders.

(ii)*Statement filed with a Federal agency other than the Internal Revenue Service.* A financial statement that is prepared in accordance with U.S. GAAP and that is required to be provided to the Federal government or any of its agencies other than the Internal Revenue Service (IRS).

(iii)Certified audited financial statement. A certified audited financial statement that is prepared in accordance with U.S. GAAP; that is given to creditors for purposes of making lending decisions, given to equity holders for purposes of evaluating their investment in the eligible taxpayer, or provided for other substantial non-tax purposes; and that the taxpayer reasonably anticipates will be directly relied on for the purposes for which it was given or provided.

(3)Example. *Primary financial statement.* X prepares financial statement FS1, which is required to be filed with a Federal government agency other than the SEC or the IRS. FS1 is thus described in paragraph (h)(2)(ii) of this section. X also prepares financial statement FS2, which is a certified audited financial statement that is given to creditors and that X reasonably anticipates will be relied on for purposes of making lending decisions. FS2 is thus described in paragraph (h)(2)(iii) of this section. Because FS1, which is described in paragraph (h)(2)(ii) of this section, is described before FS2, which is described in paragraph (h)(2)(iii) of this section, FS1 is X's primary financial statement.

(4)*Financial statements of equal priority.* If the rules of paragraph (h)(2) of this section cause two or more financial statements to be of equal priority, then the statement that results in the highest aggregate valuation of eligible positions being marked to market under section 475 is the primary financial statement.

(5)*Consolidated groups.* If the taxpayer is a member of an affiliated group that files a consolidated return, the primary financial statement of the taxpayer is the primary financial statement, if any, of the common parent (within the meaning of section 1504(a)(1)) of the consolidated group.

(6)*Supplement or amendment to a financial statement.* A financial statement includes any supplement or amendment to the financial statement.

(7)*Certified audited financial statement.* For purposes of this paragraph (h), a financial statement is a certified audited financial statement if it is certified by an independent certified public accountant from a Registered Public Accounting firm, as defined in section 2(a)(12) of the Sarbanes-Oxley Act of 2002, Public Law 107-204, 116 Stat. 746 (July 30, 2002), 15 U.S.C. § 7201(a)(12), and rules promulgated under that Act, and is—

(i)Certified to be fairly presented (a “clean” opinion);

(ii)Certified to be fairly presented subject to a concern about a contingency, other than a contingency relating to the value of eligible positions (a qualified “subject to” opinion); or

(iii)Certified to be fairly presented except for a method of accounting with which the Certified Public Accountant disagrees and which is not a method used to determine the value of an eligible position held by the eligible taxpayer (a qualified “except for” opinion).

(i)[Reserved].

(j)*Significant business use* —(1) *In general.* A financial statement is described in this paragraph

(j)if—

(i)The financial statement contains values for eligible positions;

(ii)The eligible taxpayer makes significant use of financial statement values in most of the significant management functions of its business; and

(iii)That use is related to the management of all or substantially all of the eligible taxpayer's business.

(2)*Financial statement value.* For purposes of this paragraph (j), the term *financial statement value* means—

(i)A value that is taken from the financial statement; or

(ii)A value that is produced by a process that is in all respects identical to the process that produces the values that appear on the financial statement but that is not taken from the statement because either—

(A)The value was determined as of a date for which the financial statement does not value eligible positions; or

(B)The value is used in the management of the business before the financial statement has been prepared.

(3)*Management functions of a business* . For purposes of this paragraph (j), the term *management functions of a business* refers to the financial and commercial oversight of the business. Oversight includes, but is not limited to, senior management review of business-unit profitability, market risk measurement or management, credit risk measurement or management, internal allocation of capital, and compensation of personnel. Management functions of a business do not include either tax accounting or reporting the results of operations to persons other than directors or employees.

(4)*Significant use* . If an eligible taxpayer uses financial statement values for some significant management functions and uses values that are not financial statement values for other significant management functions, then the determination of whether the taxpayer has made significant use of the financial statement values is made on the basis of all the facts and circumstances. This determination must particularly take into account whether the taxpayer's reliance on the financial statement values exposes the taxpayer to material adverse economic consequences if the values are incorrect.

(k)*Retention and production of records* —(1) *In general* . In addition to all records that section 6001 otherwise requires to be retained, an eligible taxpayer subject to the election provided by this section must keep, and timely provide to the Commissioner upon request, records and books of account that are sufficient to establish that the financial statement to which the income tax return conforms is the taxpayer's applicable financial statement, that the method used on that statement is an eligible method, and that the values used for eligible positions for purposes of section 475 are the values used in the applicable financial statement. This obligation extends to all records and books that are required to be maintained for any period for financial or regulatory reporting purposes, even if these records or books may not otherwise be specifically covered by section 6001. All records and books described in this paragraph

(k)must be maintained for the period described in paragraph (k)(4) of this section, even if a lesser period of retention applies for financial statement or regulatory purposes.

(2)*Specific requirements* —(i) *Verification and reconciliation.* Unless the Commissioner otherwise provides—

(A)*In general.* An eligible taxpayer must provide books and records to verify the appropriate use of the safe harbor and reconciliation schedules between the applicable financial statement for the taxable year and the Federal income tax return for that year. The required verification materials and reconciliation schedules include all supporting schedules, exhibits, computer programs, and any other information used in producing the values and schedules, including the documentation of rules and procedures governing determination of the values. The required reconciliation schedules must also include a detailed explanation of any adjustments necessitated by the imperfect overlap between the eligible positions that the taxpayer marks to market under section 475 and the eligible positions for which the applicable financial statement uses an eligible method. In the time and manner provided by the Commissioner, a corporate taxpayer subject to this paragraph

(k)must reconcile the net income amount reported on its applicable financial statement to the amount reported on the applicable forms and schedules on its Federal income tax return (such as the Schedule M-1, “Net Income(Loss) Reconciliation for Corporations With Total Assets of $10 Million or More”; Schedule M-3, “Net Income(Loss) Reconciliation for Corporations With Total Assets of $10 Million or More”; and Form 1120F, “U.S. Income Tax Return of a Foreign Corporation”). Eligible taxpayers that are not otherwise required to file a Schedule M-1 or Schedule M-3 must reconcile net income using substitute schedules similar to Schedule M-1 and Schedule M-3, and these substitute schedules must be attached to the return.

(B)*Values on books and records with supporting schedules.* The books and records must state the value used for each eligible position separately from the value used for any other eligible position. However, an eligible taxpayer may make adjustments to values on a pooled basis, if the taxpayer demonstrates that it can compute gain or loss attributable to the sale or other disposition of an individual eligible position.

(C)*Consolidation schedules.* An eligible taxpayer must provide a schedule showing the consolidation and de-consolidation that is used in preparing the applicable financial statement, along with exhibits and subordinate schedules. This schedule must provide information that addresses the differences for consolidation and de-consolidation between the applicable financial statement and the Federal income tax return.

(ii)*Instructions provided by the Commissioner.* The Commissioner may provide an alternative time or manner in which an eligible taxpayer subject to this paragraph

(k)must establish that the same values used for eligible positions on the applicable financial statement are also the values used for purposes of section 475 on the Federal income tax return.

(3)*Time for producing records.* All documents described in this paragraph

(k)must be produced within 30 days of a request by the Commissioner, unless the Commissioner grants a written extension. Generally, the Commissioner will exercise his discretion to excuse a minor or inadvertent failure to provide requested documents if the taxpayer shows reasonable cause for the failure, has made a good faith effort to comply with the requirement to produce records, and promptly remedies the failure. For failures to maintain, or timely produce, records, see paragraph (f)(3)(ii) of this section (allowing the Commissioner to revoke the election), and see paragraph

(m)of this section (allowing the Commissioner, but not the taxpayer, to use for eligible positions that otherwise might be subject to the safe harbor fair market values that clearly reflect income but that are different from the values used on the applicable financial statement).

(4)*Retention period for records.* All materials required by this paragraph

(k)and section 6001 must be retained as long as their contents may become material in the administration of any internal revenue law.

(5)*Agreements with the Commissioner.* The Commissioner and an eligible taxpayer may enter into a written agreement that establishes, for purposes of this paragraph (k), which records must be maintained, how they must be maintained, and for how long they must be maintained.

(l)[Reserved].

(m)*Use of different values* . If, with respect to the records that relate to certain eligible positions for a taxable year, the taxpayer fails to satisfy paragraph

(k)of this section (concerning record retention and record production), then, for those eligible positions for that year, the Commissioner may use values that the Commissioner determines to be fair market values that are appropriate to clearly reflect income, even if the values so determined are different from the values reported for those positions on the applicable financial statement. See also paragraph (f)(3)(ii) of this section (concerning revocation of the election by the Commissioner when a taxpayer does not produce required records and fails to demonstrate reasonable cause for the failure). § 1.475(e)-1 [Redesignated as § 1.475(g)-1] **Par. 4.** Section 1.475(e)-1 is redesignated as § 1.475(g)-1. **Par. 5.** Newly designated § 1.475(g)-1 is amended by redesignating paragraphs

(d)through

(j)as paragraphs

(e)through (k), respectively, and adding a new paragraph

(d)to read as follows: § 1.475(g)-1 Effective dates.

(d)Section 1.475(a)-4 (concerning a safe harbor to use applicable financial statement values for purposes of section 475) applies to taxable years ending on or after June 12, 2007. PART 602—OMB CONTROL NUMBERS UNDER PAPERWORK REDUCTION ACT **Par. 6.** The authority citation for part 602 continues to read as follows: Authority: 26 U.S.C. 7805. **Par. 7.** In § 602.101, paragraph

(b)is amended by adding the entry for 1.475(a)-4 to the table to read as follows: § 602.101 OMB Control numbers.

(b)* * * CFR part or section where identified and described Current OMB control no. * * * * * 1.475(a)-4 1545-1945 * * * * * Kevin M. Brown, Deputy Commissioner for Services and Enforcement. Approved: May 30, 2007. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E7-11146 Filed 6-11-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [CGD09-07-005] RIN 1625-AA00 Safety Zones; Annual Events Requiring Safety Zones in the Captain of the Port Lake Michigan Zone AGENCY: Coast Guard, DHS. ACTION: Final rule. SUMMARY: The Coast Guard has established permanent safety zones for annual events in the Captain of the Port Lake Michigan zone. This rule will restrict vessels from portions of water and shore areas during events that pose a hazard to public safety. The safety zones established by this final rule are necessary to protect spectators, participants, and vessels from the hazards associated with fireworks displays, air shows, and other events. DATES: This rule is effective June 27, 2007. ADDRESSES: Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket [CGD09-07-005] and are available for inspection or copying at Coast Guard Sector Lake Michigan (spw), 2420 South Lincoln Memorial Drive, Milwaukee, WI 53207 between 8 a.m. and 3 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: CWO Brad Hinken, Prevention Department, Coast Guard Sector Lake Michigan, Milwaukee, WI at

(414)747-7154. SUPPLEMENTARY INFORMATION: Regulatory Information On May 4, 2007, we published a notice of proposed rulemaking

(NPRM)entitled “Safety Zones; Annual events requiring safety zones in the Captain of the Port Lake Michigan zone” in the **Federal Register** (72 FR 25219). We received no letters commenting on the proposed rule. No public meeting was requested, and none was held. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the **Federal Register** . Any delay encountered in the regulation's effective date would be contrary to the public interest since the safety zone is needed to protect the maritime public from any potential hazards associated with fireworks displays, air shows, or other events. Background and Purpose In 2005 the Coast Guard consolidated the Captain of the Port Milwaukee Zone and the Captain of the Port Chicago Zone and realigned the boundaries of the Captain of the Port Sault Ste. Marie Zone to create the Captain of the Port Lake Michigan Zone. This rule consolidates the regulations found in 33 CFR part 165.909, Safety Zones; Annual fireworks events in the Captain of the Port Milwaukee Zone and 33 CFR 165.918, Safety Zones; Annual fireworks events in the Captain of the Port Chicago Zone into one rule that includes all safety zones for annual events in the Captain of the Port Lake Michigan Zone. This rule also adds several annual events not previously listed in 33 CFR part 165 and removes several events that no longer occur annually or do not require a safety zone. These safety zones are necessary to protect vessels and people from the hazards associated with fireworks displays, air shows, or other events. Such hazards include obstructions to the waterway that may cause marine casualties and the explosive danger of fireworks and debris falling into the water that may cause death or serious bodily harm. Discussion of Comments and Changes No comments were received concerning this final rule. No changes have been made. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. We have determined the economic impact of this rule to be so minimal that a full Regulatory Evaluation is unnecessary. The Coast Guard's use of these safety zones will be periodic in nature, of short duration, and designed to minimize the impact on navigable waters. These safety zones will only be enforced immediately before and during the time the events are occurring. Furthermore, these safety zones have been designed to allow vessels to transit unrestricted to portions of the waterways not affected by the safety zones. The Coast Guard expects insignificant adverse impact to mariners from the activation of these safety zones. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard. Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments The Coast Guard recognizes the treaty rights of Native American tribes. Moreover, the Coast Guard is committed to working with Tribal Governments to implement local policies and to mitigate tribal concerns. We have determined that this safety zone and fishing rights protection need not be incompatible. We have also determined that this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Nevertheless, Indian Tribes that have questions concerning the provisions of this rule or options for compliance are encouraged to contact the point of contact listed under FOR FURTHER INFORMATION CONTACT . Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969

(NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES . List of Subjects in 33 CFR Part 165 Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for Part 165 continues to read as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1. 2. Add § 165.929 to read as follows: § 165.929 Safety Zones; Annual events requiring safety zones in the Captain of the Port Lake Michigan zone.

(a)*Safety Zones* . The following areas are designated safety zones:

(1)*St. Patrick's Day Fireworks; Manitowoc, WI* .

(i)*Location* . All waters of the Manitowoc River and Manitowoc Harbor, near the mouth of the Manitowoc River on the south shore, within the arc of a circle with a 100-foot radius from the fireworks launch site located in position 44°05′30″ N, 087°39′12″ W (NAD 83).

(ii)*Enforcement date and time* . The third Saturday of March; 5:30 p.m. to 7 p.m.

(2)*Michigan Aerospace Challenge Sport Rocket Launch; Muskegon, MI* .

(i)*Location* . All waters of Muskegon Lake, near the West Michigan Dock and Market Corp facility, within the arc of a circle with a 1500-yard radius from the rocket launch site located in position 43°14′21″ N, 086°15′35″ W (NAD 83).

(ii)*Enforcement date and time* . The last Saturday of April; 8 a.m. to 4 p.m.

(3)*Tulip Time Festival Fireworks; Holland, MI* .

(i)*Location* . All waters of Lake Macatawa, near Kollen Park, within the arc of a circle with a 1000-foot radius from the fireworks launch site in position 42°47′23″ N, 086°07′22″ W (NAD 83).

(ii)*Enforcement date and time* . The first Friday of May; 7 p.m. to 11 p.m. If the Friday fireworks are cancelled due to inclement weather, then this section will be enforced on the first Saturday of May; 7 p.m. to 11 p.m.

(4)*Rockets for Schools Rocket Launch; Sheboygan, WI* .

(i)*Location* . All waters of Lake Michigan and Sheboygan Harbor, near the Sheboygan South Pier, within the arc of a circle with a 1500-yard radius from the rocket launch site located with its center in position 43°44′55″ N, 087°41′52″ W (NAD 83).

(ii)*Enforcement date and time* . The first Saturday of May; 8 a.m. to 5 p.m.

(5)*Celebrate De Pere; De Pere, WI* .

(i)*Location* . All waters of the Fox River, near Voyageur Park, within the arc of a circle with a 500-foot radius from the fireworks launch site located in position 44°27′10″ N, 088°03′50″ W (NAD 83).

(ii)*Enforcement date and time* . The Sunday before Memorial Day; 8:30 p.m. to 10 p.m.

(6)[Reserved]

(7)*River Splash; Milwaukee, WI* .

(i)*Location* . All waters of the Milwaukee River, near Pere Marquette Park, within the arc of a circle with a 300-foot radius from the fireworks launch site located on a barge in position 43°02′32″ N, 087°54′45″ W (NAD 83).

(ii)*Enforcement date and time* . The first Friday and Saturday of June; 9 p.m. to 11 p.m. each day.

(8)*International Bayfest; Green Bay, WI* .

(i)*Location* . All waters of the Fox River, near the Western Lime Company 1.13 miles above the head of the Fox River, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°31′24″ N, 088°00′42″ W (NAD 83).

(ii)*Enforcement date and time* . The second Friday of June; 9 p.m. to 11 p.m.

(9)*Harborfest Music and Family Festival; Racine, WI* .

(i)*Location* . All waters of Lake Michigan and Racine Harbor, near the Racine Launch Basin Entrance Light, within the arc of a circle with a 200-foot radius from the fireworks launch site located in position 42°43′43″ N, 087°46′40″ W (NAD 83).

(ii)*Enforcement date and time* . Friday and Saturday of the third complete weekend of June; 9 p.m. to 11 p.m. each day.

(10)*Jordan Valley Freedom Festival Fireworks; East Jordan, MI* .

(i)*Location* . All waters of Lake Charlevoix, near the City of East Jordan, within the arc of a circle with a 1000-foot radius from the fireworks launch site in position 45°09′18″ N, 085°07′48″ W (NAD 83).

(ii)*Enforcement date and time* . Saturday of the third weekend of June; 9 p.m. to 11 p.m.

(11)*Spring Lake Heritage Festival Fireworks; Spring Lake, MI* .

(i)*Location* . All waters of the Grand River, near buoy 14A, within the arc of a circle with a 500-foot radius from the fireworks launch site located on a barge in position 43°04′24″ N, 086°12′42″ W (NAD 83).

(ii)*Enforcement date and time* . The third Saturday of June; 9 p.m. to 11 p.m.

(12)*Elberta Solstice Festival Fireworks; Elberta, MI* .

(i)*Location* . All waters of Betsie Bay, near Waterfront Park, within the arc of a circle with a 500-foot radius from the fireworks launch site located in position 44°37′43″ N, 086°14′27″ W (NAD 83).

(ii)*Enforcement date and time* . The last Saturday of June; 9 p.m. to 11 p.m.

(13)[Reserved]

(14)*Pentwater July Third Fireworks; Pentwater, MI* .

(i)*Location* . All waters of Lake Michigan and the Pentwater Channel within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 43°46′57″ N, 086°26′38″ W (NAD 83).

(ii)*Enforcement date and time* . July 3; 9 p.m. to 11 p.m. If the July 3 fireworks are cancelled due to inclement weather, then this section will be enforced July 4; 9 p.m. to 11 p.m.

(15)*Taste of Chicago Fireworks; Chicago, IL* .

(i)*Location* . All waters of Monroe Harbor and Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 41°52′41″ N, 087°36′37″ W (NAD 83).

(ii)*Enforcement date and time* . July 3; 9 p.m. to 11 p.m. If the July 3 fireworks are cancelled due to inclement weather, then this section will be enforced July 4; 9 p.m. to 11 p.m.

(16)*U.S. Bank Fireworks; Milwaukee, WI* .

(i)*Location* . All waters of Milwaukee Harbor, in the vicinity of Veterans Park, within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 43°02′27″ N, 087°53′45″ W (NAD 83).

(ii)*Enforcement date and time* . July 3; 9 p.m. to 11 p.m. If the July 3 fireworks are cancelled due to inclement weather, then this section will be enforced July 4; 9 p.m. to 11 p.m.

(17)*National Cherry Festival Fourth of July Celebration Fireworks; Traverse City, MI* .

(i)*Location* . All waters of the West Arm of Grand Traverse Bay within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 44°46′12″ N, 085°37′06″ W (NAD 83).

(ii)*Enforcement date and time* . July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(18)*Harbor Springs Fourth of July Celebration Fireworks; Harbor Springs, MI* .

(i)*Location* . All waters of Lake Michigan and Harbor Springs Harbor within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 45°25′30″ N, 084°59′06″ W (NAD 83).

(ii)*Enforcement date and time* . July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(19)*Bay Harbor Yacht Club Fourth of July Celebration Fireworks; Petoskey, MI* .

(i)*Location* . All waters of Lake Michigan and Bay Harbor Lake within the arc of a circle with a 500-foot radius from the fireworks launch site located on a barge in position 45°21′50″ N, 085°01′37″ W (NAD 83).

(ii)*Enforcement date and time* . July 3; 9 p.m. to 11 p.m. If the July 3 fireworks are cancelled due to inclement weather, then this section will be enforced July 4; 9 p.m. to 11 p.m.

(20)*Petoskey Fourth of July Celebration Fireworks; Petoskey, MI* .

(i)*Location* . All waters of Lake Michigan and Petoskey Harbor, in the vicinity of Bay Front Park, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 45°22′40″ N, 084°57′30″ W (NAD 83).

(ii)*Enforcement date and time* . July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(21)*Boyne City Fourth of July Celebration Fireworks; Boyne City, MI* .

(i)*Location* . All waters of Lake Charlevoix, in the vicinity of Veterans Park, within the arc of a circle with a 1400-foot radius from the fireworks launch site located in position 45°13′30″ N, 085°01′40″ W (NAD 83).

(ii)*Enforcement date and time* . July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(22)*Independence Day Fireworks; Manistee, MI* .

(i)*Location* . All waters of Lake Michigan, in the vicinity of the First Street Beach, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°14′51″ N, 086°20′46″ W (NAD 83)

(ii)*Enforcement date and time* . July 3; 9 p.m. to 11 p.m. If the July 3 fireworks are cancelled due to inclement weather, then this section will be enforced July 4; 9 p.m. to 11 p.m.

(23)*Frankfort Independence Day Fireworks; Frankfort, MI* .

(i)*Location* . All waters of Lake Michigan and Frankfort Harbor, in the vicinity of the north breakwater, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°38′00″ N, 086°14′50″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(24)*Freedom Festival Fireworks; Ludington, MI.*

(i)*Location.* All waters of Lake Michigan and Ludington Harbor, in the vicinity of the Loomis Street Boat Ramp, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 43°57′16″ N, 086°27′42″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(25)*White Lake Independence Day Fireworks; Montague, MI.*

(i)*Location.* All waters of White Lake, in the vicinity of the Montague boat launch, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 43°24′33″ N, 086°21′28″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(26)*Muskegon Summer Celebration July Fourth Fireworks; Muskegon, MI.*

(i)*Location.* All waters of Muskegon Lake, in the vicinity of Heritage Landing, within the arc of a circle with a 1000-foot radius from a fireworks launch site located on a barge in position 43°14′00″ N, 086°15′50″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(iii)*Impact on Special Anchorage Area regulations:* Regulations for that portion of the Muskegon Lake East Special Anchorage Area, as described in 33 CFR 110.81(b), which are overlapped by this regulation, are suspended during this event. The remaining area of the Muskegon Lake East Special Anchorage Area not impacted by this regulation remains available for anchoring during this event.

(27)*Grand Haven Jaycees Annual Fourth of July Fireworks; Grand Haven, MI.*

(i)*Location.* All waters of The Grand River between longitude 087°14′00″ W, near The Sag, then west to longitude 087°15′00″ W, near the west end of the south pier (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(28)*Celebration Freedom Fireworks; Holland, MI.*

(i)*Location.* All waters of Lake Macatawa, in the vicinity of Kollen Park, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°47′23″ N, 086°07′22″ W (NAD 83).

(ii)*Enforcement date and time.* July 4, 2007; 9 p.m. to 11 p.m. Thereafter this section will be enforced the Saturday prior to July 4; 9 p.m. to 11 p.m. If the fireworks are cancelled due to inclement weather, then this section will be enforced the Sunday prior to July 4; 9 p.m. to 11 p.m.

(29)*Van Andel Fireworks Show, Holland, MI.*

(i)*Location.* All waters of Lake Michigan and the Holland Channel within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°46′21″ N, 086°12′48″ W (NAD 83).

(ii)*Enforcement date and time.* July 3; 9 p.m. to 11 p.m. If the July 3 fireworks are cancelled due to inclement weather, then this section will be enforced July 4; 9 p.m. to 11 p.m.

(30)*Independence Day Fireworks; Saugatuck, MI.*

(i)*Location.* All waters of Kalamazoo Lake within the arc of a circle with a 1000-foot radius from the fireworks launch site in position 42°38′52″ N, 086°12′18″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(31)*South Haven Fourth of July Fireworks; South Haven, MI.*

(i)*Location.* All waters of Lake Michigan and the Black River within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°24′08″ N, 086°17′03″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(32)*St. Joseph Fourth of July Fireworks; St. Joseph, MI.*

(i)*Location.* All waters of Lake Michigan and the St. Joseph River within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°06′48″ N, 086°29′5″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(33)*Town of Dune Acres Independence Day Fireworks; Dune Acres, IN.*

(i)*Location.* All waters of Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 41°39′23″ N, 087°04′59″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(34)*Gary Fourth of July Fireworks; Gary, IN.*

(i)*Location.* All waters of Lake Michigan, approximately 2.5 miles east of Gary Harbor, within the arc of a circle with a 500-foot radius from the fireworks launch site located in position 41°37′19″ N, 087°14′31″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(35)*Joliet Independence Day Celebration Fireworks; Joliet, IL.*

(i)*Location.* All waters of the Des Plains River, at mile 288, within the arc of a circle with a 500-foot radius from the fireworks launch site located in position 41°31′31″ N, 088°05′15″ W (NAD 83).

(ii)*Enforcement date and time.* July 3; 9 p.m. to 11 p.m. If the July 3 fireworks are cancelled due to inclement weather, then this section will be enforced July 4; 9 p.m. to 11 p.m.

(36)*Glencoe Fourth of July Celebration Fireworks; Glencoe, IL.*

(i)*Location.* All waters of Lake Michigan, in the vicinity of Lake Front Park, within the arc of a circle with a 500-foot radius from the fireworks launch site located in position 42°08′17″ N, 087°44′55″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(37)*Lakeshore Country Club Independence Day Fireworks; Glencoe, IL.*

(i)*Location.* All waters of Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°08′27″ N, 087°44′57″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(38)*Shore Acres Country Club Independence Day Fireworks; Lake Bluff, IL.*

(i)*Location.* All waters of Lake Michigan, approximately one mile north of Lake Bluff, IL, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°17′59″ N, 087°50′03″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(39)*Kenosha Independence Day Fireworks; Kenosha, WI.*

(i)*Location.* All waters of Lake Michigan and Kenosha Harbor within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°35′17″ N, 087°48′27″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(40)*Fourthfest of Greater Racine Fireworks; Racine, WI.*

(i)*Location.* All waters of Lake Michigan and Racine Harbor, in the vicinity of North Beach, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°44′17″ N, 087°46′42″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(41)*Sheboygan Fourth of July Celebration Fireworks; Sheboygan, WI.*

(i)*Location.* All waters of Lake Michigan and Sheboygan Harbor, in the vicinity of the south pier, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 43°44′55″ N, 087°41′51″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(42)*Manitowoc Independence Day Fireworks; Manitowoc, WI.*

(i)*Location.* All waters of Lake Michigan and Manitowoc Harbor, in the vicinity of south breakwater, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°05′24″ N, 087°38′45″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(43)*Sturgeon Bay Independence Day Fireworks; Sturgeon Bay, WI.*

(i)*Location.* All waters of Sturgeon Bay, in the vicinity of Sunset Park, within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 44°50′37″ N, 087°23′18″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(44)*Fish Creek Independence Day Fireworks; Fish Creek, WI.*

(i)*Location.* All waters of Green Bay, in the vicinity of Fish Creek Harbor, within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 45°07′52″ N, 087°14′37″ W (NAD 83).

(ii)*Enforcement date and time.* The first Saturday after July 4; 9 p.m. to 11 p.m.

(45)*Celebrate Americafest Fireworks; Green Bay, WI.*

(i)*Location.* All waters of the Fox River between the railroad bridge located 1.03 miles above the mouth of the Fox River and the Main Street Bridge located 1.58 miles above the mouth of the Fox River, including all waters of the turning basin east to the mouth of the East River.

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(46)*Marinette Fourth of July Celebration Fireworks; Marinette, WI.*

(i)*Location.* All waters of the Menominee River, in the vicinity of Stephenson Island, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 45°06′09″ N, 087°37′39″ W and all waters located between the Highway U.S. 41 bridge and the Hattie Street Dam (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(47)*Evanston Fourth of July Fireworks; Evanston, IL.*

(i)*Location.* All waters of Lake Michigan, in the vicinity of Centennial Park Beach, within the arc of a circle with a 500-foot radius from the fireworks launch site located in position 42°02′56″ N, 087°40′21″ W (NAD 83).

(ii)*Enforcement date and time.* July 4; 9 p.m. to 11 p.m. If the July 4 fireworks are cancelled due to inclement weather, then this section will be enforced July 5; 9 p.m. to 11 p.m.

(48)[Reserved]

(49)*Muskegon Summer Celebration Fireworks; Muskegon, MI.*

(i)*Location.* All waters of Muskegon Lake, in the vicinity of Heritage Landing, within the arc of a circle with a 1000-foot radius from a fireworks barge located in position 43°14′00″ N, 086°15′50″ W (NAD 83).

(ii)*Enforcement date and time.* The Sunday following July 4; 9 p.m. to 11 p.m.

(iii)*Impact on Special Anchorage Area regulations:* Regulations for that portion of the Muskegon Lake East Special Anchorage Area, as described in 33 CFR 110.81(b), which are overlapped by this regulation, are suspended during this event. The remaining area of the Muskegon Lake East Special Anchorage Area is not impacted by this regulation and remains available for anchoring during this event.

(50)*National Cherry Festival Air Show; Traverse City, MI.*

(i)*Location.* All waters of the West Arm of Grand Traverse Bay bounded by a line drawn from 44°46′48″ N, 085°38′18″ W, then southeast to 44°46′30″ N, 085°35′30″ W, then southwest to 44°46′00″ N, 085°35′48″ W, then northwest to 44°46′30″ N, 085°38′30″ W, then back to the point of origin (NAD 83).

(ii)*Enforcement date and time.* Friday, Saturday, and Sunday of the first complete weekend of July; 12 noon to 4 p.m. each day.

(51)*National Cherry Festival Finale Fireworks; Traverse City, MI.*

(i)*Location.* All waters and adjacent shoreline of the West Arm of Grand Traverse Bay within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 44°46′12″ N, 085°37′06″ W (NAD 83).

(ii)*Enforcement date and time.* The second Saturday of July; 9 p.m. to 11 p.m.

(52)*Gary Air and Water Show; Gary, IN.*

(i)*Location.* All waters of Lake Michigan within the arc of a circle with a 5.75 statute mile radius with its center point in position 41°37′25″ N, 087°15′42″ W (NAD 83).

(ii)*Enforcement date and time.* Friday, Saturday, and Sunday of the second weekend of July; from 8 a.m. to 6 p.m. each day.

(53)*Milwaukee Air Expo, Milwaukee, WI.*

(i)*Location.* All waters Lake Michigan and Milwaukee Harbor located within a 4000-yard by 1000-yard rectangle with its major axis bearing approximately 030°T located in the northern half of Milwaukee Harbor and along the north shore of Milwaukee bounded by the points beginning at 43°01′36″ N, 087°53′02″ W; then northeast to 43°03′20″ N, 087°51′40″ W; then northwest to 43°03′35″ N, 087°52′16″ W; then southwest to 43°01′51″ N, 087°53′38″ W; the back to the point of origin (NAD 83).

(ii)*Enforcement date and time.* Friday, Saturday, and Sunday of the second weekend of July; from 1 p.m. to 5 p.m. each day.

(54)*Annual Trout Festival Fireworks; Kewaunee, WI.*

(i)*Location.* All waters of Kewaunee Harbor and Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°27′29″ N, 087°29′45″ W (NAD 83).

(ii)*Enforcement date and time.* Friday of the second complete weekend of July; 9 p.m. to 11 p.m.

(55)*Michigan City Summerfest Fireworks; Michigan City, IN.*

(i)*Location.* All waters of Michigan City Harbor and Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 41°43′42″ N, 086°54′37″ W (NAD 83).

(ii)*Enforcement date and time.* July 15, 2007, and thereafter the Sunday of the first complete weekend of July; 9 p.m. to 11 p.m.

(56)*Port Washington Fish Day Fireworks; Port Washington, WI.*

(i)*Location.* All waters of Port Washington Harbor and Lake Michigan, in the vicinity of the WE Energies coal dock, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 43°23′07″ N, 087°51′54″ W (NAD 83).

(ii)*Enforcement date and time.* The third Saturday of July; 9 p.m. to 11 p.m.

(57)*Bay View Lions Club South Shore Frolics Fireworks; Milwaukee, WI.*

(i)*Location.* All waters of Milwaukee Harbor and Lake Michigan, in the vicinity of South Shore Park, within the arc of a circle with a 500-foot radius from the fireworks launch site in position 42°59′42″ N, 087°52′52″ W (NAD 83).

(ii)*Enforcement date and time.* Friday, Saturday, and Sunday of the second or third weekend of July; 9 p.m. to 11 p.m. each day.

(58)*Venetian Festival Fireworks; St. Joseph, MI.*

(i)*Location.* All waters of Lake Michigan and the St. Joseph River, near the east end of the south pier, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°06′48″ N, 086°29′15″ W (NAD 83).

(ii)*Enforcement date and time.* Saturday of the third complete weekend of July; 9 p.m. to 11 p.m.

(59)*Joliet Waterway Daze Fireworks; Joliet, IL.*

(i)*Location.* All waters of the Des Plaines River, at mile 287.5, within the arc of a circle with a 300-foot radius from the fireworks launch site located in position 41°31′15″ N, 088°05′17″ W (NAD 83).

(ii)*Enforcement date and time.* Friday and Saturday of the third complete weekend of July; 9 p.m. to 11 p.m. each day.

(60)*Charlevoix Venetian Festival Friday Night Fireworks; Charlevoix, MI.*

(i)*Location.* All waters of Lake Charlevoix, in the vicinity of Depot Beach, within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 45°19′08″ N, 085°14′18″ W (NAD 83).

(ii)*Enforcement date and time.* Friday of the fourth weekend of July; 9 p.m. to 11 p.m.

(61)*EAA Airventure; Oshkosh, WI.*

(i)*Location.* All waters of Lake Winnebago bounded by a line drawn from 43°57′30″ N, 088°30′00″ W; then south to 43°56′56″ N, 088°29′53″ W, then east to 43°56′40″ N, 088°28′40″ W; then north to 43°57′30″ N, 088°28′40″ W; then west returning to the point of origin (NAD 83).

(ii)*Enforcement date and time.* The last complete week of July, beginning Monday and ending Sunday; from 8 a.m. to 8 p.m. each day.

(62)*Charlevoix Venetian Festival Saturday Night Fireworks; Charlevoix, MI.*

(i)*Location.* All waters of Round Lake within the arc of a circle with a 300-foot radius from the fireworks launch site located on a barge in position 45°19′03″ N, 085°15′18″ W (NAD 83).

(ii)*Enforcement date and time.* Saturday of the fourth weekend of July; 9 p.m. to 11 p.m.

(63)*Venetian Night Fireworks; Saugatuck, MI.*

(i)*Location.* All waters of Kalamazoo Lake within the arc of a circle with a 500-foot radius from the fireworks launch site located on a barge in position 42°38′52″ N, 086°12′18″ W (NAD 83)

(ii)*Enforcement date and time.* The last Saturday of July; 9 p.m. to 11 p.m.

(64)*Roma Lodge Italian Festival Fireworks; Racine, WI.*

(i)*Location.* All waters of Lake Michigan and Racine Harbor within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°44′04″ N, 087°46′20″ W (NAD 83).

(ii)*Enforcement date and time.* Friday and Saturday of the last complete weekend of July; 9 p.m. to 11 p.m.

(65)*Venetian Night Fireworks; Chicago, IL.*

(i)*Location.* All waters of Monroe Harbor and Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located on a barge in position 41°52′41″ N, 087°36′37″ W (NAD 83).

(ii)*Enforcement date and time.* Saturday of the last weekend of July; 9 p.m. to 11 p.m.

(66)*Port Washington Maritime Heritage Festival Fireworks; Port Washington, WI.*

(ii)*Enforcement date and time.* Saturday of the last complete weekend of July or the second weekend of August; 9 p.m. to 11 p.m.

(67)[Reserved]

(68)*Grand Haven Coast Guard Festival Fireworks; Grand Haven, MI.*

(i)*Location.* All waters of the Grand River between longitude 087°14′00″ W, near The Sag, then west to longitude 087°15′00″ W, near the west end of the south pier (NAD 83).

(ii)*Enforcement date and time.* First weekend of August; 9 p.m. to 11 p.m.

(69)*Sturgeon Bay Yacht Club Evening on the Bay Fireworks; Sturgeon Bay, WI.*

(i)*Location.* All waters of Sturgeon Bay, in the vicinity of the Sturgeon Bay Yacht Club, within the arc of a circle with a 500-foot radius from the fireworks launch site located on a barge in position 44°49′33″ N, 087°22′26″ W (NAD 83).

(ii)*Enforcement date and time.* The first Saturday of August; 9 p.m. to 11 p.m.

(70)*Elk Rapids Harbor Days Fireworks; Elk Rapids, MI.*

(i)*Location.* All waters of Grand Traverse Bay, in the vicinity of Edward G. Grace Memorial Park, within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°53′58″ N, 085°25′04″ W (NAD 83).

(ii)*Enforcement date and time.* The first Saturday of August; 9 p.m. to 11 p.m.

(71)*Hammond Marina Venetian Night Fireworks; Hammond, IN.*

(i)*Location.* All waters of Hammond Marina and Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 41°41′53″ N, 087°30′43″ W (NAD 83).

(ii)*Enforcement date and time.* The first Saturday of August; 9 p.m. to 11 p.m.

(72)*North Point Marina Venetian Festival Fireworks; Winthrop Harbor, IL.*

(i)*Location.* All waters of Lake Michigan within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 42°28′55″ N, 087°47′56″ W (NAD 83).

(ii)*Enforcement date and time.* The second Saturday of August; 9 p.m. to 11 p.m.

(73)*Waterfront Festival Fireworks; Menominee MI.*

(i)*Location.* All waters of Green Bay, in the vicinity of Menominee Marina, within the arc of a circle with a 1000-foot radius from a fireworks barge in position 45°06′17″ N, 087°35′48″ W (NAD 83).

(ii)*Enforcement date and time.* Saturday following first Thursday in August; 9 p.m. to 11 p.m.

(74)*Ottawa Riverfest Fireworks; Ottawa, IL.*

(i)*Location.* All waters of the Illinois River, at mile 239.7, within the arc of a circle with a 300-foot radius from the fireworks launch site located in position 41°20′29″ N, 088°51′20″ W (NAD 83).

(ii)*Enforcement date and time.* The first Sunday of August; 9 p.m. to 11 p.m.

(75)*Algoma Shanty Days Fireworks; Algoma WI.*

(i)*Location.* All waters of Lake Michigan and Algoma Harbor within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 44°36′24″ N, 087°25′54″ W (NAD 83).

(ii)*Enforcement date and time.* Sunday of the second complete weekend of August; 9 p.m. to 11 p.m.

(76)*New Buffalo Ship and Shore Festival Fireworks; New Buffalo, MI.*

(i)*Location.* All waters of Lake Michigan and New Buffalo Harbor within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 41°48′09″ N, 086°44′49″ W (NAD 83).

(ii)*Enforcement date and time.* The second Sunday of August; 9 p.m. to 11 p.m.

(77)*Pentwater Homecoming Fireworks; Pentwater, MI.*

(i)*Location.* All waters of Lake Michigan and the Pentwater Channel within the arc of a circle with a 1000-foot radius from the fireworks launch site located in position 43°46′56.5″ N, 086°26′38″ W (NAD 83).

(ii)*Enforcement date and time.* Saturday following the second Thursday of August; 9 p.m. to 11 p.m.

(78)*Chicago Air and Water Show; Chicago, IL.*

(i)*Location.* All waters and adjacent shoreline of Lake Michigan and Chicago Harbor bounded by a line drawn from 41°55′54″ N at the shoreline, then east to 41°55′54″ N, 087°37′12″ W, then southeast to 41°54′00″ N, 087°36′00″ W (NAD 83), then southwestward to the northeast corner of the Jardine Water Filtration Plant, then due west to the shore.

(ii)*Enforcement date and time.* The third Thursday, Friday, Saturday, and Sunday of August; from 9 a.m. to 6 p.m. each day.

(79)[Reserved]

(80)*Downtown Milwaukee BID 21 Fireworks; Milwaukee, WI.*

(i)*Location.* All waters of the Milwaukee River between the Kilbourn Avenue Bridge at 1.7 miles above the Milwaukee Pierhead Light to the State Street Bridge at 1.79 miles above the Milwaukee Pierhead Light.

(ii)*Enforcement date and time.* The third Thursday of November; 6 p.m. to 8 p.m.

(81)*New Years Eve Fireworks; Chicago, IL.*

(ii)*Enforcement date and time.* December 31; 11 p.m. to January 1; 1 a.m.

(b)*Definitions.* The following definitions apply to this section:

(1)Designated representative means any Coast Guard commissioned, warrant, or petty officer designated by the Captain of the Port Lake Michigan to monitor this safety zone, permit entry into this zone, give legally enforceable orders to persons or vessels within this zones and take other actions authorized by the Captain of the Port.

(2)Public vessel means vessels owned, chartered, or operated by the United States, or by a State or political subdivision thereof.

(c)*Regulations.*

(1)The general regulations in 33 CFR 165.23 apply.

(2)All persons and vessels must comply with the instructions of the Coast Guard Captain of the Port or a designated representative. Upon being hailed by the U.S. Coast Guard by siren, radio, flashing light or other means, the operator of a vessel shall proceed as directed.

(3)All vessels must obtain permission from the Captain of the Port or a designated representative to enter, move within or exit the safety zone established in this section when this safety zone is enforced. Vessels and persons granted permission to enter the safety zone shall obey all lawful orders or directions of the Captain of the Port or a designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

(d)*Suspension of Enforcement.* If the event concludes earlier than scheduled, the Captain of the Port or a designated representative will issue a Broadcast Notice to Mariners notifying the public when enforcement of the safety zone established by this section is suspended.

(e)*Exemption.* Public vessels as defined in paragraph

(b)of this section are exempt from the requirements in this section.

(f)*Wavier.* For any vessel, the Captain of the Port Lake Michigan or a designated representative may waive any of the requirements of this section, upon finding that operational conditions or other circumstances are such that application of this section is unnecessary or impractical for the purposes of safety or environmental safety. § 165.909 [Removed] 3. Remove and reserve § 165.909. § 165.918 [Removed] 4. Remove and reserve § 165.918. Dated: June 5, 2007. Bruce C. Jones, Captain, U.S. Coast Guard, Captain of the Port Lake Michigan. [FR Doc. E7-11262 Filed 6-11-07; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF THE INTERIOR National Park Service 36 CFR Part 51 RIN 1024-AD20 Authentic Native Handicrafts AGENCY: National Park Service, Interior. ACTION: Final rule. SUMMARY: The National Parks Omnibus Management Act of 1998 encourages the sale of authentic United States Indian, Alaska Native, Native Samoan and Native Hawaiian handicrafts relating to the cultural, historical, and geographic characteristics of units of the national park system. This final rule implements the requirements of the act. DATES: *Effective Date:* This rule is effective on July 12, 2007. FOR FURTHER INFORMATION CONTACT: Jo Pendry, Concessions Program Manager, National Park Service, 1201 I Street NW., Washington, DC 20005. (202-513-7156). SUPPLEMENTARY INFORMATION: Background For many years it has been the policy of the National Park Service

(NPS)to encourage its concessioners to sell native handicrafts to park area visitors. The Congress, through Section 416 of the National Parks Omnibus Management Act of 1998 (1998 Act), embodied this policy into law, stating that: Promoting the sale of authentic United States Indian, Alaska Native, Native Samoan, and Native Hawaiian handicrafts relating to the cultural, historical, and geographic characteristics of units of the National Park System is encouraged, and the Secretary shall ensure that there is a continuing effort to enhance the handicraft trade where it exists and establish the trade in appropriate areas where the trade currently does not exist. In furtherance of this objective, Section 416(b) of the 1998 Act exempts the revenue derived by NPS concessioners from the sale of United States Indian, Alaska Native, Native Samoan and Native Hawaiian handicrafts from concession contract franchise fees. This final regulation collectively refers to these handicrafts as “authentic native handicrafts.” Also, Section 417 of the 1998 Act requires the Secretary of the Interior (Secretary) to promulgate a regulation that further defines United States Indian, Alaska Native and Native Hawaiian handicrafts. Section 409 of the 1998 Act (16 U.S.C. 5958) requires the National Park Service Concessions Management Advisory Board (Advisory Board) to make recommendations to the Secretary regarding the nature and scope of products that qualify as authentic native handicrafts within the meaning of the 1998 Act. This regulation has been developed in consideration of the recommendations of the Advisory Board. This regulation will give guidance to the NPS and NPS concessioners to determine what products meet the definition of authentic native handicrafts for purposes of franchise fee exemptions and other elements of the NPS concessions management program. In developing the regulation, NPS, upon the recommendation of the Advisory Board, incorporated to the extent appropriate the relevant definitions established by the Indian Arts and Crafts Board of the Department of the Interior

(IACB)in 25 CFR part 309 in recognition of the native handicraft expertise of the IACB. Please note that Section 417 of the 1998 Act requires the Secretary to further define “United States Indian, Alaska Native, and Native Hawaiian handicraft.” However, section 416 of the 1998 Act additionally refers to Native Samoan handicraft. Accordingly, although the term “Native Samoan handicraft” is not defined in the regulation, the regulation specifies that the sale of Native Samoan handicrafts is encouraged and exempt from NPS concession contract franchise fees. An administrative definition of “Native Samoan handicraft” will be developed by NPS in consultation with appropriate Samoans and Samoan organizations. The source for the definition of “Alaska Native” found in this regulation is from the Alaska Native Claims Settlement Act (43 U.S.C. 1602 (b)). The source of the term “arts and crafts objects” is 25 CFR part 309 (the regulations of the IACB) as adapted for purposes of this regulation. The source of the definition of “authentic native handicrafts” contained in the regulation is 25 CFR part 309 as adapted for the purposes of this regulation. The source of the term “Native Hawaiian” is Section 3001(10) of the Native American Graves Protection and Repatriation Act (25 U.S.C. 3001(10)) and Section 16(11) of the National Museum of the American Indian Act (20 U.S.C. 80q-14(11)). The source of the term “United States Indian” is the applicable portion of the term “Indian” as defined in 25 CFR part 309. The term “label” means a separate tag, paper, sign, sticker, or signed document attesting to the authenticity of the item as “authentic native handicraft.” Notice of Proposed Rulemaking On March 25, 2004, the National Park Service published a Notice of Proposed Rulemaking

(NPRM)for Authentic Native Handicrafts (69 FR 15286). The comment period was open for 60 days. No public comments were received. During the review process two comments were received from within the Department. One comment from the Office of the Assistant Secretary for Policy, Management, and Budget requested that we consider requiring concessioners to mark sales items that are authentic native handicrafts marked with a label to attest to the item's authenticity, in order to be eligible for franchise fee exemption. This requirement is in addition to the standard concession contract requirement that concessioners provide receipts from the sale of handicrafts that have been approved for sales by the Director as constituting authentic American Indian, Alaska Native, Native Samoan, or Native Hawaiian handicrafts. The regulation was changed to incorporate these recommendations. The second comment, from the Department's Office of the Solicitor, Division of Indian Affairs, asked that we use the term Alaska Native instead of Alaskan Native or Native Alaskan. It was felt that Native Alaskan was a broader term that included more than those intended to benefit by this rule. The term Native Alaskan would include all people born in Alaska. Compliance With Other Laws Regulatory Planning and Review (Executive Order 12866) In accordance with the criteria in Executive Order 12866, the Office of Management and Budget makes the final determination as to the significance of this regulatory action and it has determined that this document is not a significant rule and is not subject to review as:

(1)This rule will not have an effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

(2)This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency.

(3)This rule does not alter the budgetary effects or entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients.

(4)This rule does not raise novel legal or policy issues. Regulatory Flexibility Act The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). If there is an effect it will be a positive effect by exempting revenue derived by the sales of Native American Handicraft from concession contract franchise fees. Small Business Regulatory Enforcement Fairness Act (SBREFA) This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule does not have an annual effect on the economy of $100 million or more; will not cause a major increase in costs or prices for consumers, individual entities, Federal, State, or local government agencies, or geographic regions; and does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. The effect of the rule is to establish definitions for the sale of native handicrafts in areas of the national park system. Unfunded Mandates Reform Act This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local or tribal governments or the private sector. Takings (Executive Order 12630) In accordance with Executive Order 12360, this rule does not have significant takings implications. A takings assessment is not required. Federalism (Executive Order 13132) In accordance with Executive Order 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism assessment. The rule imposes no requirements on any governmental entity other than NPS. Civil Justice Reform (Executive Order 12998) In accordance with Executive Order 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and does not meet the requirements of sections 3(a) and 3(b)(2) of the Order. Paperwork Reduction Act This rule does not require an information collection from 10 or more parties. Accordingly, a submission under the Paperwork Reduction Act is not required. An OMB form 83-I is not required. National Environmental Policy Act This rule does not constitute a major Federal action affecting the quality of the human environment. A detailed statement under the National Environment Policy Act is not required. The rule will not increase public use of park areas, introduce non-compatible uses into park areas, conflict with adjacent land ownerships or land uses, or cause a nuisance to property owners or occupants adjacent to park areas. Accordingly, this rule is categorically excluded from procedural requirements of the National Environmental Policy Act by 516 DM 12.5(A)(10). 7.4A(10). Government-to-Government Relationship With Tribes In accordance with Executive Order 13175 “Consultation and Coordination With Indian Tribal Governments” (65 FR 67249), the President's memorandum of April 29, 1994, “Government-to-Government Relations With Native American Tribal Governments” (59 FR 22951) and 512 DM 2, we have evaluated potential effects on federally recognized Indian tribes and have determined that there are no potential effects on the tribes. Clarity of Rule Executive Order 12866 requires each agency to write regulations that are easy to understand. We invite your comments on how to make this rule easier to understand, including answers to questions such as the following:

(1)Are the requirements in the rule clearly stated?

(2)Does the rule contain technical language or jargon that interferes with its clarity?

(3)Does the format of the rule (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce its clarity?

(4)Would the rule be easier to read if it were divided into more (but shorter) sections? (A “section” appears in bold type and is preceded by the symbol “§ ” and a numbered heading; for example § 7.XX .........)

(5)Is the description of the rule in the “Supplementary Information” section of the preamble helpful in understanding the proposed rule? What else could we do to make the rule easier to understand? Send a copy of any comments that concern how we could make this rule easier to understand to: Office of Regulatory Affairs, Department of the Interior, Room 7229, 1849 C Street, NW., Washington, DC 20240. You may also e-mail the comments to this address: *Exsec@ios.doi.gov.* *Drafting Information:* The principal contributors to this final rule were: Jo Pendry, Chief Concession Program, WASO; Judy Bassett, Concession Policy Analyst, WASO; Meridith Stanton, Director, and Jill Moran, Program Specialist, IACB, and Jerry Case, Regulations Program Manager, WASO. List of Subjects in 36 CFR Part 51 Concessions, Government contracts, National parks, Reporting and recordkeeping requirements. For the reasons stated in the preamble, the National Park Service amends 36 CFR Part 51 as follows: PART 51—CONCESSION CONTRACTS 1. The authority for part 51 continues to read as follows: Authority: The Act of August 25, 1916, as amended and supplemented, 16 U.S.C. 1 *et seq.* , particularly, 16 U.S.C. 3 and Title IV of the National Parks Omnibus Management Act of 1998 (Pub. L. 105-391). 2. Section 51.83 is added to read as follows: § 51.83 Sale of Native Handicrafts.

(a)Where authorized by an applicable concession contract, concessioners are encouraged to sell authentic native handicrafts appropriately labeled or denoted as authentic that reflect the cultural, historical, and geographic characteristics of the related park area. To further this objective, concession contracts will contain a provision that exempts the revenue of a concessioner derived from the sale of appropriately labeled or denoted authentic native handicrafts from the concession contract's franchise fee.

(b)The sale of products as authentic native handicrafts is further regulated under the Indian Arts and Crafts Act, Public Law 101-644, as amended.

(c)*Definitions.*

(1)*Alaska Native* means any citizen of the United States who is a person of one-fourth degree or more Alaskan Indian (including Tsimshian Indians not enrolled in the Metalakatla Indian Community), Eskimo, or Aleut blood, or combination thereof. The term includes any person so defined either or both of whose adoptive parents are not Alaska Natives. It also includes, in the absence of a minimum blood quantum, any citizen of the United States who is regarded as an Alaska Native by the Alaska native village or native groups of which he or she claims to be a member and whose father or mother is (or, if deceased, was) regarded as an Alaska Native by any village or group.

(2)*Arts and crafts objects* means art works and crafts that are in a traditional or non-traditional style or medium.

(3)*Authentic native handicrafts* means arts and crafts objects created by a United States Indian, Alaska Native, Native Samoan or Native Hawaiian that are made with the help of only such devices as allow the manual skill of the maker to condition the shape and design of each individual object.

(4)*Native Hawaiian* means any individual who is a descendant of the aboriginal people that, prior to 1778, occupied and exercised sovereignty in the area that now constitutes the State of Hawaii.

(5)*United States Indian* means any individual that is a member of an Indian tribe as defined in 18 U.S.C. 1159(c)(3). Dated: May 22, 2007. David M. Verhey, Acting Assistant Secretary for Fish and Wildlife and Parks. [FR Doc. E7-11274 Filed 6-11-07; 8:45 am] BILLING CODE 4312-53-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R05-OAR-2006-1022; FRL-8324-9] Determination of Attainment, Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes; Ohio; Redesignation of Youngstown, OH to Attainment of the 8-Hour Ozone Standard AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: On February 15, 2007, the Ohio Environmental Protection Agency (Ohio EPA), submitted a request to redesignate its portion of the Youngstown area (Mahoning, Trumbull and Columbiana Counties) to attainment of the 8-hour ozone National Ambient Air Quality Standard (NAAQS), and a request for EPA approval of an ozone maintenance plan. EPA is making a determination that the Youngstown, Ohio ozone nonattainment area has attained the 8-hour ozone NAAQS. This determination is based on three years of complete, quality assured ambient air quality monitoring data for the 2004-2006 ozone seasons that demonstrate that the 8-hour ozone NAAQS has been attained in the area. EPA is approving, as a State Implementation Plan

(SIP)revision, the State's maintenance plan for the Ohio portion of the area. As a result, Ohio has satisfied the criteria for redesignation of Mahoning, Trumbull and Columbiana Counties to attainment and EPA is approving the requested redesignation. Further, EPA is approving, for purposes of transportation conformity, the motor vehicle emission budgets (MVEBs) for the years 2009 and 2018 that are contained in the 8-hour ozone maintenance plan for the area. DATES: This final rule is effective on June 12, 2007. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-R05-OAR-2006-1022. All documents in the docket are listed on the *www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy at the Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays. We recommend that you telephone Patricia Morris, Environmental Scientist, at

(312)353-8656 before visiting the Region 5 office. FOR FURTHER INFORMATION CONTACT: Patricia Morris, Environmental Scientist, Criteria Pollutant Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604,

(312)353-8656, *morris.patricia@epa.gov* . SUPPLEMENTARY INFORMATION: In the following, whenever “we,” “us,” or “our” are used, we mean the United States Environmental Protection Agency. Table of Contents I. What Is the Background for This Rule? II. What Comments Did We Receive on the Proposed Action? III. What Are Our Final Actions? IV. Statutory and Executive Order Review I. What Is the Background for This Rule? The Clean Air Act

(CAA)requires EPA to designate as nonattainment any area that is violating the 8-hour ozone NAAQS based on three consecutive years of air quality monitoring data. EPA designated Youngstown, Ohio as a nonattainment area in a **Federal Register** notice published on April 30, 2004, (69 FR 23857). At the same time EPA classified the area as a subpart 1 8-hour ozone nonattainment area, based on air quality monitoring data from 2001-2003. On February 15, 2007, the Ohio EPA submitted a request to redesignate its portion of the Youngstown area to attainment for the 8-hour ozone standard. The redesignation request included three years of complete, quality-assured data for the period of 2004 through 2006, indicating the 8-hour NAAQS for ozone had been achieved. The data satisfy the CAA requirements for attainment when the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentration is less than or equal to 0.08 ppm. Under the CAA, nonattainment areas may be redesignated to attainment if sufficient complete, quality-assured data are available for the Administrator to determine that the areas have attained the standard and the areas meet the other CAA redesignation requirements in section 107(d)(3)(E). The April 18, 2007, proposed rule (72 FR 19435) provides a discussion of how the State of Ohio met these requirements for the Youngstown, Ohio area. II. What Comments Did We Receive on the Proposed Action? EPA provided a 30-day review and comment period on the April 18, 2007, proposed rule. EPA received no comments. The United States Court of Appeals for the District of Columbia Circuit recently vacated EPA's April 30, 2004 “Final Rule to Implement the 8-Hour Ozone National Ambient Standard” (the Phase 1 implementation rule). *South Coast Air Quality Management District* v. *EPA* , No. 04-1200., 472 F.3d 882 (D.C. Cir. 2007). This court decision and EPA's interpretation of the decision was discussed in the proposed rule. No comments were received. III. What Are Our Final Actions? EPA is taking several related actions. EPA is making a determination that the Youngstown, Ohio nonattainment area has attained the 8-hour ozone standard. EPA is approving Ohio's maintenance plan SIP revision for Mahoning, Trumbull and Columbiana counties (such approval being one of the CAA criteria for redesignation to attainment status). The Ohio maintenance plan, in conjunction with the Pennsylvania SIP, is designed to keep the area in attainment for ozone through 2018. Because Ohio has met these and other prerequisites for redesignation, EPA is approving the State's request to change the legal designation of the counties from nonattainment to attainment for the 8-hour ozone NAAQS. In addition, and supported by and consistent with the ozone maintenance plan, EPA is approving the 2009 and 2018 volatile organic compounds

(VOC)and oxides of nitrogen (NO X ) MVEBs for the Ohio counties for transportation conformity purposes. The 2009 motor vehicle emission budgets are 19.58 tons per day for VOCs and 33.71 tons per day for NO X . For 2018 the budgets are 10.36 tons per day for VOC and 13.29 tons per day for NO X . EPA finds that there is good cause for these actions to become effective immediately upon publication because a delayed effective date is unnecessary due to the nature of a redesignation to attainment, which relieves the area from certain CAA requirements that would otherwise apply to it. The immediate effective date for this action is authorized under both 5 U.S.C. 553(d)(1), which provides that rulemaking actions may become effective less than 30 days after publication if the rule “grants or recognizes an exemption or relieves a restriction” and section 553(d)(3) which allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” The purpose of the 30-day waiting period prescribed in 553(d) is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. Today's rule, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, today's rule relieves the State of planning requirements for these 8-hour ozone nonattainment areas. For these reasons, EPA finds good cause under 5 U.S.C. 553(d)(3) for these actions to become effective on the date of publication of these actions. IV. Statutory and Executive Order Review Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and, therefore, is not subject to review by the Office of Management and Budget. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). Regulatory Flexibility Act This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Redesignation of an area to attainment under section 107(d)(3)(E) of the Clean Air Act does not impose any new requirements on small entities. Redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on sources. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Unfunded Mandates Reform Act Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). Executive Order 13132: Federalism This action also does not have Federalism implications because it does 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 (64 FR 43255, August 10, 1999). Redesignation is an action that merely affects the status of a geographical area, and does not impose any new requirements on sources, or allows a state to avoid adopting or implementing additional requirements, and does not alter the relationship or distribution of power and responsibilities established in the Clean Air Act. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal Standard. National Technology Transfer Advancement Act In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Redesignation is an action that affects the status of a geographical area but does not impose any new requirements on sources. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. Paperwork Reduction Act This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under Section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 13, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review, nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to force its requirements. (See Section 307(b)(2).) List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Volatile organic compounds. 40 CFR Part 81 Air pollution control, Environmental protection, National parks, Wilderness areas. Dated: June 1, 2007. Walter Kovalick, Jr., Acting Regional Administrator, Region 5. Parts 52 and 81, chapter I, title 40 of the Code of Federal Regulations are amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart KK—Ohio 2. Section 52.1885 is amended by adding paragraph (ff)(5) to read as follows: § 52.1885 Control strategy: Ozone.

(ff)* * *

(5)Mahoning, Trumbull and Columbiana Counties, as submitted on February 15, 2007. The maintenance plan establishes 2009 and 2018 motor vehicle emission budgets for Mahoning, Trumbull and Columbiana Counties. The 2009 motor vehicle emission budgets are 19.58 tons per day for volatile organic compounds

(VOC)and 33.71 tons per day for oxides of nitrogen (NO X ). For 2018 the budgets are 10.36 tons per day for VOC and 13.29 tons per day for NO X . PART 81—[AMENDED] 1. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* 2. Section 81.336 is amended by revising the entries for Youngstown-Warren-Sharon, PA-OH: Columbiana, Mahoning, and Trumbull Counties in the table entitled “Ohio-Ozone (8-Hour Standard)” to read as follows: § 81.336 Ohio. Ohio—Ozone [8-Hour Standard] Designated area Designation \a\ Date 1 Type Classification Date 1 Type * * * * * * * Youngstown-Warren-Sharon, PA-OH: June 12, 2007 Columbiana County Attainment Mahoning County Attainment Trumbull County Attainment * * * * * * * a Includes Indian Country located in each county or area, except as otherwise specified. 1 This date is June 15, 2004, unless otherwise noted. [FR Doc. E7-11229 Filed 6-11-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 53 and 58 [EPA-HQ-OAR-2004-0018; FRL-8308-7] RIN 2060-AO06 Ambient Air Monitoring Regulations: Correcting and Other Amendments AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final rule. SUMMARY: The EPA is taking direct final action on “Ambient Air Monitoring Regulations: Correcting and Other Amendments” to correct and clarify parts of a recent final rule published on October 17, 2006, that amended the ambient air monitoring requirements for criteria pollutants. These errors included several instances where the wording in the preamble and regulatory text were not completely consistent, several regulatory text passages that contained some imprecise language, two instances of regulatory text omission, an outdated address reference, and numerous publication errors in tables and equations. EPA is also amending the monitoring rule to allow EPA Regional Administrators to approve departures from the minimum number of PM 10 monitors otherwise specified in the rule. The October 17, 2006, final rule revised requirements for reference and equivalent method determinations, modified requirements for general monitoring network design, and modified other requirements pertaining to quality assurance, annual network plans and assessments, data reporting, monitoring methodology, and probe and monitor siting criteria. All other preamble and regulatory text printed in the October 17, 2006, final rule is correct. DATES: This rule is effective on September 10, 2007, without further notice, unless EPA receives adverse comment by July 12, 2007. If we receive adverse comment, we will publish a timely withdrawal in the **Federal Register** informing the public that some or all of the amendments in this rule will not take effect. ADDRESSES: Submit your comments, identified under Docket ID No. EPA-HQ-OAR-2004-0018 by one of the following methods: • *www.regulations.gov* . Follow the on-line instructions for submitting comments. • *E-mail: a-and-r-docket@epa.gov* . • *Fax:*

(202)566-1741. • *Mail:* Ambient Air Monitoring Regulations: Correcting and Other Amendments, Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Avenue, NW., Washington, DC 20460. Please include a total of 2 copies. • *Hand Delivery:* EPA Docket Center, 1301 Constitution Avenue, NW., Room 3334, Washington, DC. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-HQ-OAR-2004-0018. The EPA's policy is that all comments received will be included in the public docket without change and may be made available online at: *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 *www.regulations.gov* or e-mail. The *www.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 *www.regulations.gov,* your e-mail address will be automatically captured and included as part of the comment that is placed in the public 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. *Docket:* All documents in the docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available, *e.g.* , 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 either electronically in *www.regulations.gov* or in hard copy at the Revisions to the Ambient Air Monitoring Regulations Docket, EPA/DC, EPA West, Room 3334, Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is

(202)566-1744, and the telephone number for the Air Docket is

(202)566-1742. FOR FURTHER INFORMATION CONTACT: Mr. Lewis Weinstock, Air Quality Assessment Division (C304-06), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number:

(919)541-3661; fax number:

(919)541-1903; e-mail address: *weinstock.lewis@epa.gov* . SUPPLEMENTARY INFORMATION: Table of Contents I. Why Is EPA Using a Direct Final Rule? II. Does This Action Apply to Me? III. Judicial Review IV. Authority V. Overview of the October 17, 2006 Rule Changes VI. This Action A. Correction to Special Purpose Monitors B. Clarification to Requirement for Collocating Required Continuous Fine Particle (PM 2.5 ) Monitors C. Clarification to Operating Schedule Requirements for Filter-Based Manual PM 2.5 Samplers D. Standard versus Daylight Savings Time Reference E. Corrections to Regulatory Text on Particulate Matter (PM 10 ) Network Design Criteria F. Additional Regional Administrator Flexibility in Applying PM 10 Minimum Monitoring Requirements G. Correction to Division Name and Address Reference H. Clarification to Conditions for Waiving Regional Administrator Comment Period on Submitted Annual Monitoring Network Plans I. Typographical Corrections VII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks H. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations I. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use J. National Technology Transfer Advancement Act K. Congressional Review Act I. Why Is EPA Using a Direct Final Rule? The EPA is publishing this rule without a prior proposed rule because we view this as a non-controversial action and anticipate no adverse comment. None of the proposed changes creates additional regulatory requirements on affected entities compared to those that were promulgated in the final rule that was published in the **Federal Register** on October 17, 2006. However, in the “Proposed Rules” section of this **Federal Register** , we are publishing a separate document that will serve as the proposed rule to make corrections to the Ambient Air Monitoring Regulations if relevant adverse comments are received on one or more of the amendments in this direct final rule as described in sections VI.A. through VI.I of this preamble. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. For further information about commenting on this rule, see the ADDRESSES section of this document. If EPA receives relevant adverse comment on one or more of the amendments included in this rulemaking, we will publish a timely withdrawal in the **Federal Register** indicating which amendment or amendments we are withdrawing. The provisions that are not withdrawn will become effective on the date set out above, notwithstanding any relevant adverse comment on any other provision. II. Does This Action Apply to Me? Categories and entities potentially regulated by this action include: Category NAICS code 1 Examples of regulated entities Industry 334513 541380 Manufacturer, supplier, distributor, or vendor of ambient air monitoring instruments; analytical laboratories or other monitoring organizations that elect to submit an application for a reference or equivalent method determination under 40 CFR part 53. Federal Government 924110 Federal agencies (that conduct ambient air monitoring similar to that conducted by States under 40 CFR part 58 and that wish EPA to use their monitoring data in the same manner as State data) or that elect to submit an application for a reference or equivalent method determination under 40 CFR part 53. State/territorial/local/tribal government 924110 State, territorial, and local air quality management programs that are responsible for ambient air monitoring under 40 CFR part 58 or that elect to submit an application for a reference or equivalent method determination under 40 CFR part 53 or for an approved regional method approved under 40 CFR part 58 appendix C. The proposal also may affect Tribes that conduct ambient air monitoring similar to that conducted by States and that wish EPA to use their monitoring data in the same manner as State monitoring data. 1 North American Industry Classification System. This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your facility or Federal, State, local, tribal, or territorial agency is regulated by this action, you should carefully examine the requirements for reference or equivalent method determinations in 40 CFR part 53, subpart A (General Provisions) and the applicability criteria in 40 CFR 51.1 of EPA's requirements for State Implementation Plans (SIPs). If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section. III. Judicial Review Under section 307(b)(1) of the Clean Air Act (CAA), judicial review of the direct final rule amendments is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia by August 13, 2007. Under section 307(d)(7)(B) of the CAA, only an objection to the direct final rule amendments that was raised with reasonable specificity during the period for public comment can be raised during judicial review. Moreover, under section 307(b)(2) of the CAA, the requirements established by the direct final rule amendments may not be challenged separately in any civil or criminal proceedings brought by EPA to enforce these requirements. IV. Authority The EPA rules for ambient air monitoring are authorized under sections 110, 301(a), and 319 of the CAA. Section 110(a)(2)(B) of the CAA requires that each SIP provide for the establishment and operation of devices, methods, systems, and procedures needed to monitor, compile, and analyze data on ambient air quality and for the reporting of air quality data to EPA. Section 103 authorizes, among others, research and investigations relating to the causes, effects, extent, prevention and control of air pollution. Section 301(a) of the CAA authorizes EPA to develop regulations needed to carry out EPA's mission and establishes rulemaking requirements. Uniform criteria to be followed when measuring air quality and provisions for daily air pollution index reporting are required by CAA section 319. V. Overview of the October 17, 2006 Rule Changes On October 17, 2006 (71 FR 61236), EPA amended the rules for ambient air monitoring of criteria pollutants. The rule amendments established limited ambient air monitoring requirements for particles between 2.5 and 10 micrometers (μm) in diameter (PM 10- 2.5 ) to support continued research into these particles' distribution, sources, and health effects. The rule amendments required each State to operate one to three “NCore” monitoring stations that will take an integrated, multipollutant approach to ambient air monitoring. In addition, the rule amendments modified the general monitoring network design requirements for minimum numbers of ambient air monitors to focus on populated areas with air quality problems and to reduce significantly the requirements for criteria pollutant monitors that have measured ambient air concentrations well below the applicable National Ambient Air Quality Standards. The rule amendments also revised certain provisions regarding monitoring network descriptions and periodic assessments, quality assurance, and data certifications. A number of the amendments related specifically to monitoring of fine particles (referring to particles less than or equal to 2.5 μm in diameter, PM 2.5 ), revising the requirements for reference and equivalent method determinations (including specifications and test procedures) for fine particle monitors. VI. This Action *EPA is taking the following actions:* • Correcting a statement in the regulatory text pertaining to the potential comparability of data collected from Special Purpose Monitors

(SPM)with approved alternative quality assurance plans to the National Ambient Air Quality Standards (NAAQS). • Correcting a statement in the preamble with regard to the requirement for collocating required continuous PM 2.5 monitors and clarifying associated regulatory text. • Clarifying several ambiguous regulatory text passages pertaining to operating schedules for manual PM 2.5 samplers. • Correcting a reference regarding standard versus daylight savings time. • Restoring two instances of regulatory text that were inadvertently omitted from the network design for monitoring particles less than or equal to 10 μm in diameter (PM 10 ). • Adding authority for the Regional Administrator, consistent with the authority that already exists for PM 2.5 and ozone, to allow monitoring agencies to deviate from PM 10 monitoring requirements. • Updating an organizational address reference within regulatory text pertaining to quality assurance requirements. • Clarifying the conditions when the EPA Regional Administrator is not required to offer a public comment opportunity prior to approving a State's annual monitoring network plan. • Correcting numerous typographical errors in tables and equations. A. Correction to Special Purpose Monitors The intent of 40 CFR 58.20(c) (published at 71 FR 61302) was to describe the conditions when data from an SPM using a Federal reference method (FRM), Federal equivalent method (FEM), or Approved Regional Method

(ARM)which has operated for more than 24 months is eligible for comparison to the relevant NAAQS. The rule text states that all data from an SPM is eligible for comparison to the relevant NAAQS unless the data from the particular monitor came from a period when the requirements of appendix A to part 58 (Quality Assurance Requirements for SLAMS, SPMs, and PSD Air Monitoring) or an approved alternative, appendix C to part 58 (Ambient Air Quality Monitoring Methodology), or appendix E to part 58 (Probe and Monitoring Path Siting Criteria for Ambient Air Monitoring) were not met in practice. This text does not reflect EPA's actual intention. Instead, as discussed in the preamble (71 FR 61253), the intention of the October 17, 2006, final rule was that if the Regional Administrator approved an alternative quality assurance plan in place of the requirements of appendix A to part 58, the data from the affected SPM would not be eligible for comparison to the relevant NAAQS. The unintentional inclusion in the rule text of the phrase “or an approved alternative” implied that data from SPMs operating during a period when approved alternative quality assurance requirements were in effect, rather than appendix A requirements, would still be eligible for comparison to the relevant NAAQS. The EPA provided the Regional Administrator with the authority to approve an alternative to the requirements of appendix A to part 58 with respect to SPM sites when meeting those requirements would be physically and/or financially impractical due to physical conditions at the monitoring site and the requirements were not essential to achieving the intended data objectives of the SPM site. Therefore, EPA is clarifying the regulatory text by deleting the aforementioned words referencing alternative quality assurance plans. The corrected rule text 40 CFR 58.20(c) reads: “All data from an SPM using an FRM, FEM, or ARM which has operated for more than 24 months is eligible for comparison to the relevant NAAQS, subject to the conditions of § 58.30, unless the air monitoring agency demonstrates that the data came from a particular period during which the requirements of appendix A, appendix C, or appendix E to this part were not met in practice.” B. Clarification to Requirement for Collocating Required Continuous Fine Particle (PM 2.5 ) Monitors The regulatory text in 40 CFR part 58, appendix D (Network Design Criteria for Ambient Air Quality Monitoring), section 4.7.2 (71 FR 61322) describes the minimum requirements for operating continuous PM 2.5 analyzers. 1 The text requires States to operate a minimum number of continuous PM 2.5 analyzers equal to at least one-half (round up) the minimum required FRM/FEM/ARM PM 2.5 sites listed in Table D-5 of appendix D to part 58. At least one required FRM/FEM/ARM PM 2.5 monitor in each MSA must be collocated with a continuous analyzer. For example, if a MSA had three required FRM/FEM/ARM PM 2.5 monitors, then two continuous monitors are required, and at least one of those continuous monitors must be collocated (placed at the same site) with one of the FRM/FEM/ARM PM 2.5 monitors. The second required continuous monitor could be collocated with one of the remaining two required FRM/FEM/ARM PM 2.5 monitors at another site, or be located at a separate site based on monitoring objectives. The EPA did not intend that the continuous analyzers required under section 4.7.2 be required to be collocated with each other. 1 In 40 CFR part 58 and in this preamble, the terms monitor, analyzer, and sampler are sometimes used interchangeably. Monitor is the more general term. Most often, analyzer means a self-contained monitor which can produce concentration data on-site. Sampler means a device that collects a sample (e.g., a filter) which must be further processed at an outside laboratory to obtain the concentration value. The October 17, 2006, rule text matches our intended meaning. However, when referencing this rule requirement in the preamble (71 FR 61263), EPA incorrectly stated that the collocation requirement was adopted to address concerns about whether required continuous monitors needed to be collocated with a matching second continuous monitor, and that the final rule only required one of all the required PM 2.5 continuous monitors in each MSA to have “such a collocated match.” This unintentional statement could be construed as a requirement for collocating two continuous monitors with each other, in addition to the requirement for collocation with at least one required FRM/FEM/ARM monitor, leading to the conclusion that EPA was requiring three PM 2.5 monitors (two continuous, one filter-based) at the first required site, subject to the requirements of section 4.7.2. Moreover, it was not our intention to require a second continuous monitor be sited with an FEM or ARM that itself provides continuous data. Therefore, EPA is clarifying the regulatory text to make clear the intentions described above. The EPA is also clarifying that an associated reference to quality assurance/quality control procedures refers to the continuous monitoring requirement by adding the words “for these required continuous analyzers.” The corrected provision of 40 CFR part 58, appendix D, section 4.7.2 now reads: “Requirement for Continuous PM 2.5 Monitoring. The State, or where appropriate, local agencies must operate continuous PM 2.5 analyzers equal to at least one-half (round up) the minimum required sites listed in Table D-5 of this appendix. At least one required continuous analyzer in each MSA must be collocated with one of the required FRM/FEM/ARM monitors, unless at least one of the required FRM/FEM/ARM monitors is itself a continuous FEM or ARM monitor, in which case no collocation requirement applies. State and local air monitoring agencies must use methodologies and quality assurance/quality control (QA/QC) procedures approved by the EPA Regional Administrator for these required continuous analyzers.” C. Clarification to Operating Schedule Requirements for Filter-Based Manual PM 2.5 Samplers The regulatory text in 40 CFR 58.12(d) (71 FR 61299) describes the required sampling frequency for manual filter-based PM 2.5 samplers. Manual PM 2.5 samplers at SLAMS stations must operate on at least a 1-in-3 day schedule at sites which do not also have a collocated continuously operating PM 2.5 monitor. For SLAMS PM 2.5 sites with both manual and continuous PM 2.5 monitors operating, other than NCore stations, monitoring agencies may request approval from the EPA Regional Administrator for a reduction to 1-in-6 day PM 2.5 sampling or for seasonal sampling. The EPA Regional Administrator may grant sampling frequency reductions after consideration of factors including, but not limited to, the historical PM 2.5 data quality assessments, the location of current PM 2.5 design value sites, and the regulatory data needs of States and EPA. The regulatory text provides specific criteria under which a manual PM 2.5 sampler at a SLAMS station cannot be exempted by the Regional Administrator from at least 1-in-3 day sampling, and also includes a separate provision describing when a daily sampling schedule is required. The textual length of 40 CFR 58.12(d)(1) as well as the specific wording of certain statements could create difficulty in understanding the intended operating schedule requirements for manual PM 2.5 samplers. Therefore, EPA is clarifying 40 CFR 58.12(d)(1) as described below. The first sentence of 40 CFR 58.12(d)(1) stated that: “Manual PM 2.5 samplers at SLAMS stations other than NCore stations must operate on at least a 1-in-3 day schedule at sites without a collocated continuously operating PM 2.5 monitor.” This statement could be construed as meaning that manual PM 2.5 samplers at NCore stations were not required to maintain at least a 1-in-3 day schedule. The rule in fact does require manual PM 2.5 samplers at NCore stations to maintain at least a 1-in-3 day sampling schedule, as later noted in 40 CFR 58.12(d)(2), and these samplers are not eligible for sampling frequency relief. Therefore, EPA is clarifying the rule text by deleting the phrase “other than NCore stations” from first sentence of 40 CFR 58.12(d)(1). Another potential ambiguity regarding the 1-in-3 day sampling frequency provision of 40 CFR 58.12(d)(1) is its geographic applicability. Since the regulatory language did not specify that the 1-in-3 day sampling frequency requirement be applied only in areas in which PM 2.5 monitoring is required, this requirement could be interpreted as applying to any manual PM 2.5 sampler within a State that recorded the highest design value “in an area” whether or not any PM 2.5 monitors were even required in that area according to 40 CFR part 58, appendix D. The EPA is concerned that such an interpretation would create a disincentive to monitoring by potentially requiring States that operated discretionary SLAMS monitors to sample on a 1-in-3 day frequency even though the monitor was in excess of minimum monitoring requirements. Therefore, the first sentence of 40 CFR 58.12(d)(1)(i) is amended to read: “Manual PM 2.5 samplers at required SLAMS stations without a collocated continuously operating PM 2.5 monitor must operate on at least a 1-in-3 day schedule.” In this rule text, “required SLAMS stations” refers to minimum monitoring requirements as specified in 40 CFR part 58, appendix D, section 4.7. It does not include SPMs; therefore SPMs are not required to sample on a 1-in-3 day schedule. After stating the 1-in-3 day sampling requirement, the rule text at 40 CFR 58.12(d)(1)(ii) goes on to allow the Regional Administrator to grant a reduction of this schedule to 1-in-6 day for SLAMS PM 2.5 sites with both manual and continuous PM 2.5 monitors operating. In this context, the rule text contains a duplicated reference to SLAMS PM 2.5 sites; the second reference, “at SLAMS stations,” is removed in the corrected rule language since the opening part of the sentence already states the applicability of the provision to SLAMS PM 2.5 sites. The text goes on to describe two situations in which a manual PM 2.5 sampler at a required SLAMS station could not be granted sampling frequency relief by the Regional Administrator from the minimum 1-in-3 day sampling schedule. In the first situation, the phrase: “Sites that have design values that are within plus or minus 10 percent of the NAAQS” could be construed as applying to all sites within a particular area that have design values that are within plus or minus 10 percent of the NAAQS, when the intention was to apply the provision only to the site with the highest value in a particular area calculated in accordance with 40 CFR part 50, appendix N (Interpretation of the National Ambient Air Quality Standards for PM 2.5 ). 2 In the second situation, the phrase: “and sites where the 24-hour values exceed the NAAQS for a period of 3 years are required to maintain at least a 1-in-3 day sampling frequency” created ambiguity about whether the provision was applicable in situations where a single 24-hour value exceeded the NAAQS at a particular site during only 1 or 2 years of a 3-year period. The EPA's intention was that at least one 24-hour value had to exceed the NAAQS in each of the years comprising the 3-year period situation for the provision to apply. 2 EPA notes that the term “design value” as defined in the final rule (40 CFR part 58.1, 71 FR 61296) is the calculated concentration of a pollutant according to the applicable appendix of part 50 for the highest monitoring site in an attainment or nonattainment area, and that EPA's usage of “design value” in the rule text was consistent with this definition. Also, the regulatory text could be construed as requiring 1-in-3 day manual PM 2.5 sampling at all sites within a particular area that have design values within the plus or minus 10 percent criteria, regardless of whether the site is required and regardless of the potential availability of continuous PM 2.5 FEM or ARM monitors which inherently would provide every-day data eligible for comparison to the NAAQS. The EPA anticipates the increasing availability of approved FEM and ARM methods over the next few years, and expects that many such approved continuous monitors will be deployed at sites formerly dedicated to manual filter-based FRM or FEM PM 2.5 samplers, including design value sites subject to the plus or minus 10 percent criteria when compared with the 24-hour PM 2.5 NAAQS. The EPA supports the deployment of approved FEM or ARM continuous PM 2.5 methods to meet appropriate monitoring objectives as such monitors become available, and thus we did not intend to require 1-in-3 day sampling utilizing manual PM 2.5 methods at design value sites, or any other sites, where monitoring agencies have deployed an approved continuous FEM or ARM. The clarified language of the restriction related to being within plus or minus 10 percent of the NAAQS now reads: “Required SLAMS stations whose measurements determine the design value for their area and that are within plus or minus 10 percent of the NAAQS, and all required sites where one or more 24-hour values have exceeded the NAAQS each year for a consecutive period of at least 3 years, are required to maintain at least a 1-in-3 day sampling frequency. A continuously operating FEM or ARM PM 2.5 monitor satisfies this requirement.” At the end of 40 CFR 58.12(d)(1), EPA specified that manual PM 2.5 samplers at sites that have a design value within plus or minus 5 percent of the daily PM 2.5 NAAQS must have an FRM or FEM operate on a daily schedule. As with the previously discussed phrasing in the context of the 1-in-3 day sampling requirement, this text could be construed as applying to all sites within a particular area that have design values that are within plus or minus 5 percent of the NAAQS, when the intention was to apply the provision only to the required SLAMS site with the highest value in a particular area. Also, the above described concern regarding the acceptability of continuous PM 2.5 analyzers applies in the case of this plus or minus 5 percent criterion, and a similar clarification to the rule text is appropriate. Therefore, EPA is clarifying 40 CFR 58.12(d)(1) and for purposes of clarity is adding subparagraph (iii). It will read: “Required SLAMS sites whose measurements determine the design value for their area and that are within plus or minus 5 percent of the daily PM 2.5 NAAQS must have an FRM or FEM operate on a daily schedule. A continuously operating FEM or ARM PM 2.5 monitor satisfies this requirement.” The EPA notes that only population-oriented monitors are subject to the previously described percent-dependent sampling frequency requirements. In 40 CFR 58.30 (Special Considerations for Data Comparisons to the NAAQS), sites must be population-oriented to be comparable to either the annual or daily PM 2.5 NAAQS. By implication, design value sites must be NAAQS comparable, therefore non-population oriented sites would not be affected by the plus or minus 10 percent or plus or minus 5 percent provisions. As previously mentioned, EPA is aware that the length of 40 CFR 58.12(d)(1) creates the potential for ambiguity in the applicability of individual provisions related to sampling frequency requirements. To clarify the applicability of such provisions, EPA has restructured 40 CFR 58.12(d)(1) to create distinct paragraphs encompassing the previously described amended language applicable to SLAMS sites without continuously operating PM 2.5 monitors (now numbered 40 CFR 58.12(d)(1)(i)), SLAMS sites with both manual and continuous PM 2.5 monitors (now numbered 40 CFR 58.12(d)(1)(ii)), and design value sites within plus or minus 5 percent of the daily PM 2.5 NAAQS (now numbered 40 CFR 58.12(d)(1)(iii)). In 40 CFR 58.12(d)(3), manual PM 2.5 speciation samplers at required Speciation Trends Network

(STN)stations are required to operate on a1-in-3 day sampling frequency. The EPA intended the 1-in-3 day sampling frequency to be a minimum sampling frequency and not to imply a prohibition against a more frequent sampling frequency, such as a daily sampling frequency, if such a frequency is appropriate for specific monitoring objectives. Consistent with the phraseology of sampling frequency requirements elsewhere in the regulatory text, EPA is correcting the aforementioned phrase to read: “Manual PM 2.5 speciation samplers at STN stations must operate on at least a1-in-3 day sampling frequency.” D. Standard versus Daylight Savings Time Reference 40 CFR 58.12(e) requires that the operating schedule for PM 10 samplers must be a 24-hour sampling period taken from midnight to midnight (local time) to ensure national consistency. In a 1999 EPA memorandum, 3 the use of standard time versus daylight savings time is discussed in the context of sample collection for particulate matter monitors, concluding with the recommendation that monitoring agencies operate their particulate matter sampler clocks on standard time to avoid the semi-annual time-shift issues associated with conversion between standard time and daylight savings time. Monitoring agencies have generally adopted the practice of keeping their particulate matter sampler clocks on standard time since the issuance of the 1999 memorandum. It was EPA's intention to codify the practice of keeping particulate matter clocks on standard time in the October 17, 2006, Revisions to the Ambient Monitoring Regulations; however, the codifying rule text was inadvertently omitted for PM 10 . 4 If the aforementioned 40 CFR 58.12(e) reference to PM 10 operating schedule is left uncorrected, this could create inconsistent interpretation of the standard versus daylight savings time issue among monitoring agencies causing unnecessary confusion in the interpretation of the air quality data. 3 “Use of PM Reference Methods and Daylight Savings Time,” J. David Mobley; Office of Air Quality Planning and Standards, June 11, 1999. *http://www.epa.gov/ttn/amtic/files/ambient/pm25/stdtime.pdf* . 4 The intention to base sampling on local standard time was correctly reflected in rule text applicable to PM 2.5 . 40 CFR part 50, appendix N (Interpretation of the National Ambient Air Quality Standards for PM 2.5 ) reads: “Daily values for PM 2.5 refers to the 24-hour average concentrations of PM 2.5 calculated (averaged from hourly measurements) or measured from midnight to midnight (local standard time) that are used in NAAQS computations.” Therefore, EPA is correcting the reference to PM 10 operating schedules in 40 CFR 58.12(e) to read as follows: “For PM 10 samplers, a 24-hour sample must be taken from midnight to midnight (local standard time) to ensure national consistency.” E. Corrections to Regulatory Text on Particulate Matter (PM 10 ) Network Design Criteria In the preamble to the final monitoring rule (71 FR 61240), EPA stated an intention to retain the pre-existing minimum monitoring network design requirements for PM 10 , which are based on the population of an MSA and its historical PM 10 air quality. The EPA's intention in finalizing the regulatory text in section 4.6, Particulate Matter (PM 10 ) Design Criteria, of 40 CFR part 58, appendix D (Network Design Criteria for Ambient Air Quality Monitoring) (71 FR 61320) was to retain all PM 10 -relevant portions of the pre-existing regulatory text beginning with section 3.7, Particulate Matter Design Criteria for NAMS (see 62 FR 38820, July 18, 1997), with only minor changes necessary to maintain consistency of monitor type terminology (e.g., to eliminate obsolete references to National Air Monitoring Stations (NAMS)). The EPA inadvertently omitted several passages from the pre-existing regulatory text in section 3.7 referencing PM 10 network design criteria. If left uncorrected, these omissions could lead to misinterpretation of PM 10 monitoring network design requirements. Three specific textual corrections are detailed below. First, in Table D-4, PM 10 Minimum Monitoring Requirements (Number of Stations per MSA), the word “Approximate” which had appeared in the title of the pre-existing Table 4 was omitted. Therefore, in order to retain the earlier language EPA is revising the title of Table D-4 to read: “PM 10 Minimum Monitoring Requirements (Approximate Number of Stations Per MSA).” Second, the first footnote contains some words (“within the ranges shown in this table”) that were not part of the corresponding footnote to the pre-existing Table 4. Therefore, the first footnote is revised to read: “Selection of urban areas and actual numbers of stations per area will be jointly determined by EPA and the State Agency.” Third, in paragraph

(a)of section 4.6, the regulatory text notes that State, and where applicable local, agencies must operate the minimum number of required PM 10 SLAMS sites listed in Table D-4 of appendix D. In the October 17, 2006, rulemaking, EPA intended to retain all of the pre-existing regulatory text in the pre-existing paragraph 3.7.1 (as last promulgated on July 18, 1997, at 62 FR 38850) in new paragraph

(a)of new section 4.6, to explain in words the flexibility in minimum PM 10 monitoring requirements as provided in the pre-existing Table 4 which had listed ranges of required numbers (rather than a single number) of monitors for each of the categories of MSA population and historical PM 10 range. This regulatory text was inadvertently omitted. Therefore, EPA is restoring the omitted text and correcting paragraph

(a)of section 4.6 to read: “Table D-4 indicates the approximate number of permanent stations required in MSAs to characterize national and regional PM 10 air quality trends and geographical patterns. The number of PM 10 stations in areas where MSA populations exceed 1,000,000 must be in the range from 2 to 10 stations, while in low population urban areas, no more than 2 stations are required. A range of monitoring stations is specified in Table D-4 because sources of pollutants and local control efforts can vary from one part of the country to another and, therefore, some flexibility is allowed in selecting the actual number of stations in any one locale.” F. Additional Regional Administrator Flexibility in Applying PM 10 Minimum Monitoring Requirements We are amending the monitoring rule to allow EPA Regional Administrators to approve departures from the minimum number of PM 10 monitors otherwise specified in the rule. In the January 17, 2006, proposed monitoring rule (71 FR 2802), EPA proposed minimum network design monitoring requirements for PM 10-2.5 . In paragraph

(b)of section 4.8.1 of 40 CFR part 58, appendix D, (Network Design Criteria for Ambient Air Quality Monitoring), EPA proposed that modifications from the PM 10-2.5 monitoring requirements must be approved by the Regional Administrator. The proposed regulatory language providing the Regional Administrator flexibility to modify the PM 10-2.5 monitoring requirements was consistent with similar language proposed for PM 2.5 that read: “Deviations from these PM 2.5 monitoring requirements must be approved by the EPA Regional Administrator” (71 FR 2801, paragraph

(b)of section 4.7.1). Similar regulatory language was proposed for ozone monitoring requirements (71 FR 2798, paragraph

(b)of section 4.1): “Deviations from the above O 3 requirements are allowed if approved by the EPA Regional Administrator.” The EPA finalized the Regional Administrator authority to modify the PM 2.5 and ozone monitoring requirements in the October 17, 2006, rule following a public comment period in which no adverse comments were received about the specific provisions concerning Regional Administrator flexibility in applying these regulations. The EPA did not adopt the proposed PM 10-2.5 minimum monitoring network design including the Regional Administrator flexibility language. The EPA notes, however, that no adverse comments were received specifically addressing the proposed Regional Administrator authority to modify PM 10-2.5 monitoring network requirements although voluminous comment was received on other proposed provisions of the PM 10-2.5 monitoring network design and accompanying suitability test. The EPA also proposed and adopted requirements for “NCore” multipollutant monitoring sites, including a provision allowing the Administrator to approve modifications from these requirements. Again, no adverse comment was received on this modification provision. Finally, specific requirements in the rule for photochemical assessment monitoring stations

(PAMS)have always been modifiable by the Administrator. Thus, EPA notes that under the current 40 CFR part 58, appendix D network design requirements, PM 10 is the only pollutant with minimum monitoring requirements not subject to modification based on either Administrator or Regional Administrator evaluation and approval. Such flexibility, already finalized for ozone and PM 2.5 , can prove useful in particular cases where a State demonstrates that meeting the minimum monitoring requirements, for an individual MSA for example, may be impractical or contrary to the optimum use of monitoring resources. The EPA believes it is appropriate to allow the Regional Administrator to modify PM 10 monitoring requirements, for the same reasons such authority was finalized for PM 2.5 and ozone monitoring requirements. Such authority allows for specific local factors and information can be considered in order to make the PM 10 monitoring network more economical while still meeting program data needs. In light of the absence of any comments of concern regarding very similar Administrator or Regional Administrator authority for other pollutants, we do not expect any adverse comment on this action. Therefore, EPA is amending paragraph

(a)of section 4.6 quoted in the section above and adding the following sentence so it now reads: “Modifications from these PM 10 monitoring requirements must be approved by the Regional Administrator.” See also section VI.E of this preamble for a clarifying amendment which also affects section 4.6 of appendix D to part 58 by restoring inadvertently omitted text. G. Correction to Division Name and Address Reference The October 17, 2006, final rule provided an address reference in paragraph 2.4 of 40 CFR part 58 appendix A, to assist with communications regarding the National Performance Evaluation Programs. Monitoring agencies were advised to contact either the appropriate EPA Regional Quality Assurance

(QA)Coordinator at the appropriate EPA Regional Office location, or the NPAP Coordinator, Emissions Monitoring and Analysis Division (D205-02), U.S. Environmental Protection Agency, Research Triangle Park, NC 27711. Due to a reorganization within the Office of Air Quality Planning and Standards and subsequent physical relocation within the North Carolina facility, the provided address mail code (D205-02) is no longer correct for quality assurance related communications. Additionally, the Emissions Monitoring and Analysis Division has been renamed to the Air Quality Assessment Division, as part of the same reorganization. Due to the possibility of future address changes, EPA believes a more general reference to quality assurance contact information is appropriate for inclusion in regulatory language. Updated contact information for all air monitoring program leads is maintained on the Ambient Monitoring Technology Information Center (AMTIC) Web site *http://www.epa.gov/ttn/amtic/contacts.html.* This website is well publicized and frequently accessed by all monitoring agencies; therefore, specific address entries in the rule are unnecessary and potentially misleading. Accordingly, EPA is amending the regulatory text in paragraph 2.4 to read: “For clarification and to participate, monitoring organizations should contact either the appropriate EPA Regional Quality Assurance

(QA)Coordinator at the appropriate EPA Regional Office location, or the NPAP Coordinator at the Air Quality Assessment Division, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency in Research Triangle Park, North Carolina.” H. Clarification to Conditions for Waiving Regional Administrator Comment Period on Submitted Annual Monitoring Network Plans The regulatory text in 40 CFR 58.10(a)(2) (71 FR 61298) describes the approval process for State-submitted annual monitoring network plans that propose SLAMS network modifications. Such plans are subject to the approval of the Regional Administrator, including a new requirement for the Regional Administrator to provide opportunity for public comment during the 120-day period allowed for approval or disapproval. The rule permits the Regional Administrator to waive the separate public comment opportunity if the State or local agency has already provided a public comment opportunity on its plan and has made no changes to the plan subsequent to that comment opportunity. Implied but not explicitly stated in the regulatory language is that the Regional Administrator may forgo public comment only if the State or local agency submitted the full text of public comments received on its annual monitoring network plan to the Regional Administrator, because only the availability of such detailed comments would make a separate comment period by the Regional Administrator redundant. The EPA believes that the aforementioned regulatory language should be clarified to avoid ambiguity about what situations would require the Regional Administrator to provide a public comment opportunity on submitted annual monitoring network plans that contain SLAMS network modifications. The EPA notes that the clarification does not modify the minimum requirements for State and local agencies to make their plans available for public inspection for at least 30 days prior to submission to EPA. Accordingly, the clarified regulatory text in the second sentence of 40 CFR 58.10(a)(2) reads: “If the State or local agency has already provided a public comment opportunity on its plan and has made no changes subsequent to that comment opportunity, and has submitted the received comments together with the plan, the Regional Administrator is not required to provide a separate opportunity for comment.” Such comments could be transmitted to the Regional Administrator in hard-copy or electronic format, and at a minimum, would include all relevant information supplied to the State or local agency by the commenters. Monitoring agencies would not be expected to provide comment summaries or comment responses, although those submissions could optionally be provided to the Regional Administrator in addition to the actual text of the received comments. I. Typographical Corrections The **Federal Register** printing of the October 17, 2006, final rule contained typographical errors in equations, tables, and figures. These errors, as explained below and listed by **Federal Register** page reference and CFR section number, are corrected in this rulemaking. • 71 FR 61284. Subpart C of Part 53—§ 53.35(d)(4), Calculation of mean concentrations. Equation 12: The “n” over the summation symbol is replaced with “m.” • 71 FR 61284. Subpart C of Part 53—§ 53.35(e) and § 53.35(f), Tests for reference method and candidate method precision. Equations 13 and 15: 100% is moved to be outside the square root symbol. • 71 FR 61284. Subpart C of Part 53—§ 53.35(g), Test for additive and multiplicative bias (comparative slope and intercept). Equation 17: Left part of equation is changed to be * R * not * R * j . • 71 FR 61284. Subpart C of Part 53—§ 53.35(h), Tests for comparison correlation. Equation 21: Radical sign in the denominator is extended to cover both summation signs. • 71 FR 61285. Table C-1 to Subpart C of Part 53, Test Concentration Ranges, Number of Measurements Required, and Maximum Discrepancy Specification. The four occurrences of “Total” in the first column are moved to the second column. • 71 FR 61285. Table C-1 to Subpart C of Part 53, Test Concentration Ranges, Number of Measurements Required, and Maximum Discrepancy Specification. Two entries of “18” are moved 3 columns left to appear in the “Second Set” column rather than as shown in the right-most column. • 71 FR 61285. Table C-4 to Subpart C of Part 53—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods. An erroneous “R” character in the table title is removed so that the title reads—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods. • 71 FR 61286. Table C-4 to Subpart C of Part 53—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods. In the column header for the last 2 columns, the “PM 10-2.5 ” is corrected to be “PM 10-2.5 ”. • 71 FR 61286. Table C-4 to Subpart C of Part 53—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods. The horizontal line under “R j > 60 μg/m3” in the table is removed. • 71 FR 61286. Table C-4 to Subpart C of Part 53—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods. In the first column, in the “Precision of replicate reference method measurements * * *” entry, the “prime” symbols are removed from “RP Rj ” and “PM 10-2.5 ”. • 71 FR 61286. Table C-4 to Subpart C of Part 53—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods. An unintended period is removed at the end of the entry in the last column, Intercept row, and at the end of the second footnote. • 71 FR 61286. Table C-4 to Subpart C of Part 53—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods. Values for correlation of reference method and candidate method measurements for PM 2.5 Class II and III, and PM 10-2.5 Class II and III are added to all four columns: • ≥0.93 for CCV≤0.4; • ≥0.85 + 0.2×CCV for 0.4≤CCV≤0.5; • ≥0.95 for CCV≥0.5. • 71 FR 61287. Figure C-1 to Subpart C of Part 53—Suggested Format for Reporting Test Results for Methods for SO 2 , CO, O 3 , NO 2 . Title and the first lines of content are repositioned from being section text to being proper parts of Figure C-1. • 71 FR 61287. Figures C-2 and C-3 to Subpart C of Part 53—Illustration of the Slope and Intercept Limits for Class II and Class III PM 2.5 Candidate Equivalent Methods and Illustration of the Slope and Intercept Limits for Class II and Class III PM 10-2.5 Candidate Equivalent Methods. “PM 2.5 ” is changed to “PM 2.5 ,” “PM 10-2.5 ” is changed to “PM 10-2.5 ,” “μg/m3” is changed to “μg/m 3 .” Also, the “Class II” and “Class III” labels are related by arrows to the outline of the hexagons rather than the area inside, to be consistent with the title, which indicates “Acceptance Limits.” • 71 FR 61289. Figure C-4 to Subpart C of Part 53—Illustration of the Minimum Limits for Correlation Coefficient for PM 2.5 and PM 10-2.5 Class II and III methods. In the axes labels, the commas are deleted and the “r” and the “CCV” are placed within parentheses. • 71 FR 61293. Subpart E of Part 53—§ 53.58(g), Operational field precision and blank test. Equation 26: the symbol “C 1,j ” is corrected to “C i,j .” • 71 FR 61294. Table E-1 to Subpart E of Part 53—Summary of Test Requirements for Reference and Class I Equivalent Methods for PM 2.5 and PM 10-2.5 . In the 3rd column, row identified as “§ 53.56* * *,” a comma is added after “16.67 ± 5%” and before “L/min.” • 71 FR 61294. Table E-1 to Subpart E of Part 53—Summary of Test Requirements for Reference and Class I Equivalent Methods for PM 2.5 and PM 10-2.5 . In the 3rd column, row identified as “§ 53.57* * *,” one of the two periods at the end of item 3 is removed. • 71 FR 61294. Table E-1 to Subpart E of Part 53—Summary of Test Requirements for Reference and Class I Equivalent Methods for PM 2.5 and PM 10-2.5 . In the fourth column, row identified as “§ 53.57* * *,” item

(c)is changed to read “Solar flux of 1000 ± 50 W/m 2 ” not “Solar flux of 1000 ? 50 W/m 2 .” • 71 FR 61294. Table E-1 to Subpart E of Part 53—Summary of Test Requirements for Reference and Class I Equivalent Methods for PM 2.5 and PM 10-2.5 . Spurious “?” characters throughout the table are removed. • 71 FR 61294. Table E-1 to Subpart E of Part 53—Summary of Test Requirements for Reference and Class I Equivalent Methods for PM 2.5 and PM 10-2.5 . § 53.56 cell reference, Barometric pressure effect test, Sample flow rate performance specification, value is changed to be 16.67 (versus 16.6). • 71 FR 61296. Table F-1 to Subpart F of Part 53—Performance Specifications for PM 2.5 Class II Equivalent Samplers. In the last column, row identified as “§ 53.64,” “Dp 50 = 2.5 μm ? 0.2 μm” is changed to be “Dp 50 = 2.5 μm ± 0.2 μm.” • 71 FR 61296. Table F-1 to Subpart F of Part 53—Performance Specifications for PM 2.5 Class II Equivalent Samplers. In the last column, last row, a comma is added after “0.15mg” and before “r ≥0.97.” • 71 FR 61296. Table F-1 to Subpart F of Part 53—Performance Specifications for PM 2.5 Class II Equivalent Samplers. Spurious “?” characters throughout the table are removed. • 71 FR 61300. Figure 1 to Subpart B of Part 58—Ratio to Standard for PM 10 Operating Schedule. A missing value (1.4) is added on the X axis. • 71 FR 61309. Appendix A of Part 58—Quality Assurance Requirements for SLAMS, SPMs, and PSD Air Monitoring. Equation 7: A missing “•” character is added so that the equation reads: Lower Probability Limit = m-1.96 • S. • 71 FR 61309. Appendix A of Part 58—Quality Assurance Requirements for SLAMS, SPMs, and PSD Air Monitoring. A missing minus sign is added in caption below Equation 11 so that it reads: a chi-squared distribution with n-1 degrees of freedom. • 71 FR 61310. Appendix A of Part 58—Quality Assurance Requirements for SLAMS, SPMs, and PSD Air Monitoring. Equation 12: missing ellipsis is added in caption so that it reads: where, n j is the number of pairs and d 1 , d 2 , * * * dn j are the biases for each of the pairs to be averaged. • “PM 10C ”, where it appears in Part 53 without a subscripted “C”, is replaced with “PM 10c .” VII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory action” because it may raise novel legal policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Accordingly, EPA submitted this action to the Office of Management and Budget

(OMB)for review under Executive Order 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action. B. Paperwork Reduction Act This action does not impose any new information collection, as it only corrects printing errors, provides clarifications, and provides new flexibility for PM 10 monitoring on a case-by-case basis. However, the OMB has previously approved the information collection requirements contained in the existing regulations for 40 CFR part 53 and 40 CFR part 58 under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 *et seq.* , and has assigned OMB control number 2060-0084, EPA ICR number 0940.20. A copy of the OMB approved Information Collection Request

(ICR)may be obtained from Susan Auby, Collection Strategies Division, U.S. Environmental Protection Agency (2822T), 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling

(202)566-1672. This action does not impose any new information collection burden beyond the already-approved ICR. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or 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. 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 in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act

(RFA)generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as:

(1)A small business 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. After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any requirements on small entities. None of the corrections and clarifications creates additional regulatory requirements on affected entities compared to those that were promulgated in the final rule that was published in the **Federal Register** on October 17, 2006. The rule changes being made only correct printing errors, provide clarifications, and provides new flexibility for PM 10 monitoring on a case-by-case basis. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. The EPA has determined that this final rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any one year, because the changes being made are merely clarifications and corrections. Thus, today's rule is not subject to the requirements of sections 202 and 205 of the UMRA. The EPA has determined that this final rule contains no regulatory requirements that might significantly or uniquely affect small governments. None of the changes creates additional regulatory requirements on affected entities compared to those that were promulgated in the final rule that was published in the **Federal Register** on October 17, 2006. The rule changes being made only correct printing errors, provide clarifications, and provide some new flexibility for PM 10 monitoring on a case-by-case basis. Therefore, this final rule is not subject to the requirements of section 203 of the UMRA. E. Executive Order 13132: Federalism Executive Order 13132 (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that 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.” This final 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. This is because the changes being made only correct printing errors, provide clarifications, and provides some new flexibility for PM 10 monitoring on a case-by-case basis. Thus, Executive Order 13132 does not apply to this final rule. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This final rule does not have tribal implications, as specified in Executive Order 13175. The EPA consulted with tribal officials early in the process of developing the October 17, 2006, rule to permit them to have meaningful and timely input into its development. Although tribal governments may elect to conduct ambient air monitoring, none of the changes in today's rule apply directly to tribal governments. Thus, Executive Order 13175 does not apply to this rule. G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that:

(1)Is determined to be “economically significant” as defined under EO 12866, and

(2)concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA interprets EO 13045 as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. This final rule is not subject to EO 13045 because it does not establish an environmental standard intended to mitigate health or safety risks. H. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The rule merely amends the October 17, 2006, final monitoring rule (71 FR 61236) by correcting printing errors, providing clarifications, and providing some new flexibility for PM 10 monitoring on a case-by-case basis. I. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This rule is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution or Use” (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. No significant change in the use of energy is expected because the total number of monitors for ambient air quality measurements will not increase above present levels. Further, we have concluded that this rule is not likely to have any adverse energy effects. J. National Technology Transfer Advancement Act 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. This action does not involve technical standards, other than to make corrections and clarifications. Therefore, EPA did not consider the use of any voluntary consensus standards. K. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801, *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not “major rule” as defined by 5 U.S.C. 804(2). This final rule will not have an annual effect on the economy of $100 million or more, will not result in a major increase in costs or prices for State or local agencies, and will not affect competition with foreign-based enterprises in domestic and export markets. The final amendments will be effective on September 10, 2007. List of Subjects in 40 CFR Parts 53 and 58 Environmental protection, Administrative practice and procedure, Air pollution control, Intergovernmental relations, Reporting and recordkeeping requirements. Dated: April 30, 2007. Stephen L. Johnson, Administrator. For the reasons stated in the preamble, title 40, chapter I, parts 53 and 58 of the Code of Federal Regulations are amended as follows: PART 53—[AMENDED] 1. The authority citation for part 53 continues to read as follows: Authority: Section 301(a) of the Clean Air Act (42 U.S.C. sec. 1857g(a)), as amended by sec. 15(c)(2) of Pub. L. 91-604, 84 Stat. 1713, unless otherwise noted. Subpart C—[Amended] 2. Section 53.35 is amended by: a. Revising Equation 12 of paragraph (d)(4), b. Revising Equation 13 of paragraph (e)(1), c. Revising Equation 15 of paragraph (f)(1), d. Revising Equation 17 of paragraph (g)(1), and e. Revising Equation 21 of paragraph (h)(1) to read as follows: § 53.35 Test procedure for Class II and Class III methods for PM 2.5 and PM 10-2.5 .

(d)* * *

(4)* * * ER41AD07.000 Where: C j = The mean concentration measured by the candidate method for the measurement set; C i,j = The measurement of the candidate method sampler or analyzer i on test day j; and m = The number of valid candidate method measurements in the measurement set (normally 3).

(e)* * *

(1)* * * ER41AD07.001

(f)* * *

(1)* * * ER41AD07.002

(g)* * *

(1)* * * ER41AD07.003

(h)* * *

(1)* * * ER41AD07.004 3. Table C-1 to subpart C is revised to read as follows: Table C-1 to Subpart C of Part 53—Test Concentration Ranges, Number of Measurements Required, and Maximum Discrepancy Specification Pollutant Concentration range, parts per million Simultaneous measurements required 1-hr First set Second set 24-hr First set Second set Maximum discrepancy specification, parts per million Ozone Low 0.06 to 0.10 5 6 0.02 Med 0.15 to 0.25 5 6 .03 High 0.35 to 0.45 4 6 .04 Total 14 18 Carbon monoxide Low 7 to 11 5 6 1.5 Med 20 to 30 5 6 2.0 High 35 to 45 4 6 3.0 Total 14 18 Sulfur dioxide Low 0.02 to 0.05 3 3 0.02 Med 0.10 to 0.15 2 3 .03 High 0.30 to 0.50 7 8 2 2 .04 Total 7 8 7 8 Nitrogen dioxide Low 0.02 to 0.08 3 3 0.02 Med 0.10 to 0.20 2 3 .03 High 0.25 to 0.35 2 2 .03 Total 7 8 4. Table C-4 to subpart C is revised to read as follows: Table C-4 to Subpart C of Part 53.—Test Specifications for PM 10 , PM 2.5 and PM 10-2.5 Candidate Equivalent Methods Specification PM 10 PM 2.5 Class I Class II Class III PM 10-2.5 Class II Class III Acceptable concentration range (R j ), μg/m 3 15-300 3-200 3-200 3-200 3-200 3-200 Minimum number of test sites 2 1 2 4 2 4 Minimum number of candidate method samplers or analyzers per site 3 3 3 1 3 1 3 1 3 1 Number of reference method samplers per site 3 3 3 1 3 1 3 1 3 1 Minimum number of acceptable sample sets per site for PM 10 methods: R j < 60 μg/m 3 3 R j > 60 μg/m 3 3 Total 10 Minimum number of acceptable sample sets per site for PM 2.5 and PM 10-2.5 candidate equivalent methods: R j < 30 μg/m 3 for 24-hr or R j < 20 μg/m 3 for 48-hr samples 3 R j > 30 μg/m 3 for 24-hr or R j > 20 μg/m 3 for 48-hr samples 3 Each season 10 23 23 23 23 Total, each site 10 23 23 (46 for two-season sites) 23 23 (46 for two-season sites) Precision of replicate reference method measurements, P Rj or RP Rj , respectively; RP for Class II or III PM 2.5 or PM 10-2.5 , maximum 5 μg/m 3 or 7% 2 μg/m 3 or 5% 10% 2 10% 2 10% 2 10% 2 Precision of PM 2.5 or PM 10-2.5 candidate method, CP, each site 10% 2 15% 2 15% 2 15% 2 Slope of regression relationship. 1 ± 0.10 1 ± 0.05 1 ± 0.10 1 ± 0.10 1 ± 0.10 1 ± 0.12 Intercept of regression relationship, μg/m 3 0 ± 5 0 ± 1 Between: 13.55 − (15.05 × slope), but not less than −1.5; and 16.56 − (15.05 × slope), but not more than +1.5 Between: 15.05 − (17.32 × slope), but not less than −2.0; and 15.05 − (13.20 × slope), but not more than +2.0 Between: 62.05 − (70.5 × slope), but not less than −3.5; and 78.95 − (70.5 × slope), but not more than +3.5 Between: 70.50 − (82.93 × slope), but not less than −7.0; and 70.50 − (61.16 × slope), but not more than +7.0 Correlation of reference method and candidate method measurements ≥ 0.97 ≥ 0.97 ≥ 0.93—for CCV ≤ 0.4; ≥ 0.85 + 0.2 × CCV—for 0.4 ≤ CCV ≤ 0.5; ≥ 0.95—for CCV ≥ 0.5 1 Some missing daily measurement values may be permitted; see test procedure. 2 Calculated as the root mean square over all measurement sets. 5. Figures C-1 through C-4 to subpart C are revised to read as follows: Figure C-1 to Subpart C of Part 53—Suggested Format for Reporting Test Results for Methods for SO 2 , CO, O 3 , NO 2 Candidate Method Reference Method Applicant ☐ First Set ☐ Second Set ☐ Type ☐ 1 Hour ☐ 24 Hour Concentration range Date Time Concentration, ppm Candidate Reference Difference Table C-1 spec. Pass or fail Low 1 ____ ppm 2 to ____ ppm 3 4 5 6 Medium 1 ____ ppm 2 to ____ ppm 3 4 5 6 High 1 ____ ppm 2 to ____ ppm 3 4 5 6 7 8 Total Failures: ER41AD07.009 ER41AD07.010 ER41AD07.011 Subpart E—[Amended] 6. Section 53.58 is amended by revising Equation 26 of paragraph (g)(2)(i) to read as follows: § 53.58 Operational field precision and blank test.

(g)* * * (2)(i) * * * ER41AD07.005 7. Table E-1 to subpart E is revised to read as follows: Table E-1 to Subpart E of Part 53.—Summary of Test Requirements for Reference and Class I Equivalent Methods for PM 2.5 and PM 10-2.5 Subpart E procedure Performance test Performance specification Test conditions Part 50, appendix L reference § 53.52 Sample leak check test Sampler leak check facility External leakage: 80 mL/min, max Internal leakage: 80 mL/min, max Controlled leak flow rate of 80 mL/ min Sec. 7.4.6. § 53.53 Base flow rate test Sample flow rate 1. Mean 2. Regulation 3. Meas accuracy 4. CV accuracy 5. Cut-off 1. 16.67 ± 5%, L/ min 2. 2%, max 3. 2%, max 4. 0.3% max 5. Flow rate cut-off if flow rate deviates more than 10% from design flow rate for >60 ± 30 seconds

(a)6-hour normal operational test plus flow rate cut-off test

(b)Normal conditions

(c)Additional 55 mm Hg pressure drop to simulate loaded filter

(d)Variable flow restriction used for cut-off test Sec. 7.4.1. Sec. 7.4.2. Sec. 7.4.3. Sec. 7.4.4. Sec. 7.4.5. § 53.54 Power interruption test Sample flow rate 1. Mean 2. Regulation 3. Meas. accuracy 4. CV accuracy 5. Occurrence time of power interruptions 6. Elapsed sample time 7. Sample volume 1. 16.67 ± 5%, L/ min 2. 2%, max 3. 2%, max 4. 0.3% max 5. ± 2 min if >60 seconds. 6. ± 20 seconds 7. ± 2%, max

(a)6-hour normal operational test

(b)Nominal conditions

(c)Additional 55 mm Hg pressure drop to simulate loaded filter

(d)6 power interruptions of various durations Sec. 7.4.1. Sec. 7.4.2. Sec. 7.4.3. Sec. 7.4.5. Sec. 7.4.12. Sec. 7.4.13. Sec. 7.4.15.4. Sec. 7.4.15.5. § 53.55 Temperature and line voltage test Sample flow rate 1. Mean 2. Regulation 3. Meas. accuracy 4. CV accuracy 5. Temperature meas. accuracy 6. Proper operation. 1. 16.67 ± 5%, L/ min 2. 2%, max 3. 2%, max 4. 0.3% max 5. 2 °C

(a)6-hour normal operational test

(b)Normal conditions

(c)Additional 55 mm Hg pressure drop to simulate loaded filter

(d)Ambient temperature at −20 and +40 °C

(e)Line voltage: 105 Vac to 125 Vac Sec. 7.4.1. Sec. 7.4.2. Sec. 7.4.3. Sec. 7.4.5. Sec. 7.4.8. Sec. 7.4.15.1. § 53.56 Barometric pressure effect test Sample flow rate 1. Mean 2. Regulation 3. Meas. accuracy 4. CV accuracy 5. Pressure meas. accuracy 6. Proper operation. 1. 16.67 ± 5%, L/ min 2. 2%, max 3. 2%, max 4. 0.3% max 5. 10 mm Hg

(a)6-hour normal operational test

(b)Normal conditions

(c)Additional 55 mm Hg pressure drop to simulate loaded filter

(d)Barometric pressure at 600 and 800 mm Hg Sec. 7.4.1. Sec. 7.4.2. Sec. 7.4.3. Sec. 7.4.5. Sec. 7.4.9. § 53.57 Filter temperature control test 1. Filter temp. meas. accuracy 2. Ambient temp. meas. accuracy 3. Filter temp. control accuracy, sampling and non-sampling 1. 2 °C 2. 2 °C 3. Not more than 5 °C above ambient temp. for more than 30 min

(a)4-hour simulated solar radiation, sampling

(b)4-hour simulated solar radiation, non-sampling

(c)Solar flux of 1000 ± 50 W/m 2 Sec. 7.4.8. Sec. 7.4.10. Sec. 7.4.11. § 53.58 Field precision test 1. Measurement precision 2. Storage deposition test for sequential samplers 1. P j < 2 μg/m 3 or RP j < 5% 2. 50 μg max. average weight gain/blank filter

(a)3 collocated samplers at 1 site for at least 10 days

(b)PM 2.5 conc. > 3 μg/m 3

(d)5- or 10-day storage period for inactive stored filters Sec. 5.1. Sec. 7.3.5. Sec. 8. Sec. 9. Sec. 10. The Following Requirement Is Applicable to Class I Candidate Equivalent Methods Only § 53.59 Aerosol transport test Aerosol transport 97%, min. for all channels. Determine aerosol transport through any new or modified components with respect to the reference method sampler before the filter for each channel Subpart F—[Amended] 8. Table F-1 to subpart F is revised to read as follows: Table F-1 to Subpart F of Part 53.—Performance Specifications for PM 2.5 Class II Equivalent Samplers Performance test Specifications Acceptance criteria § 53.62 Full Wind Tunnel Evaluation Solid VOAG produced aerosol at 2 km/hr and 24 km/hr Dp 50 = 2.5 μm ± 0.2 μm Numerical Analysis Results: 95% ≤ R c ≤ 105%. § 53.63 Wind Tunnel Inlet Aspiration Test Liquid VOAG produced aerosol at 2 km/hr and 24 km/hr Relative Aspiration: 95% ≤ A ≤ 105%. § 53.64 Static Fractionator Test Evaluation of the fractionator under static conditions Dp 50 = 2.5 μm ± 0.2 μm Numerical Analysis Results: 95% ≤ R c ≤ 105%. § 53.65 Loading Test Loading of the clean candidate under laboratory conditions Acceptance criteria as specified in the post-loading evaluation test (§ 53.62, § 53.63, or § 53.64). § 53.66 Volatility Test Polydisperse liquid aerosol produced by air nebulization of A.C.S. reagent grade glycerol, 99.5% minimum purity Regression Parameters Slope = 1 ± 0.1, Intercept = 0 ± 0.15 mg, r ≥ 0.97. PART 58—[AMENDED] 9. The authority citation for part 58 continues to read as follows: Authority: 42 U.S.C. 7403, 7410, 7601(a), 7611, and 7619. Subpart B—[Amended] 10. Section 58.10 is amended by revising the second sentence in paragraph (a)(2) to read as follow: § 58.10 Annual monitoring network plan and periodic network assessment. (a)(1) * * *

(2)* * * If the State or local agency has already provided a public comment opportunity on its plan and has made no changes subsequent to that comment opportunity, and has submitted the received comments together with the plan, the Regional Administrator is not required to provide a separate opportunity for comment. 11. Section 58.12 is amended by revising paragraph (d)(1), paragraph (d)(3), and the first sentence of paragraph

(e)to read as follows: § 58.12 Operating schedules.

(d)* * * (1)(i) Manual PM 2.5 samplers at required SLAMS stations without a collocated continuously operating PM 2.5 monitor must operate on at least a 1-in-3 day schedule.

(ii)For SLAMS PM 2.5 sites with both manual and continuous PM 2.5 monitors operating, the monitoring agency may request approval for a reduction to 1-in-6 day PM 2.5 sampling or for seasonal sampling from the EPA Regional Administrator. The EPA Regional Administrator may grant sampling frequency reductions after consideration of factors, including but not limited to the historical PM 2.5 data quality assessments, the location of current PM 2.5 design value sites, and their regulatory data needs. Required SLAMS stations whose measurements determine the design value for their area and that are within plus or minus 10 percent of the NAAQS; and all required sites where one or more 24-hour values have exceeded the NAAQS each year for a consecutive period of at least 3 years are required to maintain at least a 1-in-3 day sampling frequency. A continuously operating FEM or ARM PM 2.5 monitor satisfies this requirement.

(iii)Required SLAMS stations whose measurements determine the design value for their area and that are within plus or minus 5 percent of the daily PM 2.5 NAAQS must have an FRM or FEM operate on a daily schedule. A continuously operating FEM or ARM PM 2.5 monitor satisfies this requirement.

(3)Manual PM 2.5 speciation samplers at STN stations must operate on at least a 1-in-3 day sampling frequency.

(e)For PM 10 samplers, a 24-hour sample must be taken from midnight to midnight (local standard time) to ensure national consistency. * * * § 58.12 [Amended] 12. Figure 1 of paragraph

(e)of § 58.12 is revised to read as follows: Subpart C—[Amended] 13. Section 58.20(c) is revised to read as follows: § 58.20 Special purpose monitors (SPM). ER41AD07.012

(c)All data from an SPM using an FRM, FEM, or ARM which has operated for more than 24 months is eligible for comparison to the relevant NAAQS, subject to the conditions of § 58.30, unless the air monitoring agency demonstrates that the data came from a particular period during which the requirements of appendix A, appendix C, or appendix E to this part were not met in practice. Appendix A to Part 58—[Amended] 14. Appendix A is amended by: a. Revising the third

(last)sentence of section 2.4; b. Revising Equation 7 of section 4.1.4; c. Revising the definition of the symbol “ *n* ” for Equation 11 of section 4.2.1, d. Revising the last sentence in section 4.2.2.2, and e. Revising the definition of the symbol “ *n* j ” for Equation 12 of section 4.3.2.1 to read as follows: 2. General Monitoring Requirements 2.4 * * * For clarification and to participate, monitoring organizations should contact either the appropriate EPA Regional Quality Assurance

(a)Table D-4 indicates the approximate number of permanent stations required in MSAs to characterize national and regional PM 10 air quality trends and geographical patterns. The number of PM 10 stations in areas where MSA populations exceed 1,000,000 must be in the range from 2 to 10 stations, while in low population urban areas, no more than two stations are required. A range of monitoring stations is specified in Table D-4 because sources of pollutants and local control efforts can vary from one part of the country to another and therefore, some flexibility is allowed in selecting the actual number of stations in any one locale. Modifications from these PM 10 monitoring requirements must be approved by the Regional Administrator. Table D-4 of Appendix D to Part 58. PM 10 Minimum Monitoring Requirements (Approximate Number of Stations Per MSA) 1 1 Selection of urban areas and actual numbers of stations per area will be jointly determined by EPA and the State agency. 4.7.2 Requirement for Continuous PM 2.5 Monitoring. The State, or where appropriate, local agencies must operate continuous PM 2.5 analyzers equal to at least one-half (round up) the minimum required sites listed in Table D-5 of this appendix. At least one required continuous analyzer in each MSA must be collocated with one of the required FRM/FEM/ARM monitors, unless at least one of the required FRM/FEM/ARM monitors is itself a continuous FEM or ARM monitor in which case no collocation requirement applies. State and local air monitoring agencies must use methodologies and quality assurance/quality control (QA/QC) procedures approved by the EPA Regional Administrator for these required continuous analyzers. [FR Doc. 07-2201 Filed 6-11-07; 8:45 am]

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