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Code · REGISTER · 2007-07-03 · Federal Aviation Administration (FAA), DOT · Rules and Regulations

Rules and Regulations. Final rule

55,709 words·~253 min read·/register/2007/07/03/07-3227

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

BILLING CODE 4910-13-M DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2007-28477; Airspace Docket No. 07-ASW-4] RIN 2120-AA66 Revision of Area Navigation Route Q-22; South Central United States AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This action revises area navigation
(RNAV)route Q-22 over the South Central United States by changing a waypoint name to eliminate confusion with similar sounding waypoints in close proximity to each other. The FAA is taking this action to enhance safety and to improve the efficient use of the navigable airspace. DATES: *Effective Date:* 0901 UTC, August 30, 2007. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Steve Rohring, Airspace and Rules Group, Office of System Operations Airspace and AIM, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone:
(202)267-8783. SUPPLEMENTARY INFORMATION: Background On December 15, 2005, the FAA published in the **Federal Register** a final rule to establish three RNAV routes (Q-20, Q-22, and Q-24) over the Southwestern and South Central United States in support of the High Altitude Redesign program (70 FR 74197). Subsequent to the establishment of Q-22, it was determined that the waypoint, RUBAE, sounded similar to another existing waypoint in the area. To eliminate confusion that may result from similar sounding waypoints, the FAA is taking action by changing the waypoint name “RUBAE” to “ACMES.” High Altitude RNAV routes are published in paragraph 2006 of FAA Order 7400.9P, dated September 1, 2006 and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The high altitude RNAV routes listed in this document will be published subsequently in the Order. The Rule This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by revising RNAV route Q-22 over the South Central United States within the airspace assigned to the Fort Worth Air Route Traffic Control Center (ARTCC). The FAA believes that this action will enhance safety for en route instrument flight rules operations within the Fort Worth ARTCC's areas of responsibility. This action merely changes a waypoint name in the legal description and makes no geographical changes to Q-22. Therefore, notice and public procedure under 5 U.S.C. 553(b) are unnecessary. 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. Therefore, this regulation:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under Department of Transportation
(DOT)Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. Environmental Review The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with Paragraphs 311(a) and 311(g) of FAA Order 1050.1E, Environmental Impacts: Policies and Procedures. This airspace action is not expected to cause any potentially significant impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.9P, Airspace Designations and Reporting Points, dated September 1, 2006 and effective September 15, 2006, is amended as follows: Paragraph 2006 Area Navigation Routes. **Q-22 GUSTI to CATLN [Revised]** GUSTI FIX (Lat. 29°58′15″ N., long. 092°54′35″ W.) OYSTY FIX (Lat. 30°28′15″ N., long. 090°11′49″ W.) ACMES WP (Lat. 30°55′27″ N., long. 088°22′11″ W.) CATLN FIX (Lat. 31°18′26″ N., long. 087°34′48″ W.) Issued in Washington, DC, on June 21, 2007. Edith V. Parish, Manager, Airspace and Rules Group. [FR Doc. E7-12683 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF COMMERCE National Institute of Standards and Technology 15 CFR Part 285 [Docket No: 070517136-7137-01] RIN 0693-AB58 National Voluntary Laboratory Accreditation Program; Operating Procedures AGENCY: National Institute of Standards and Technology, Commerce. ACTION: Final Rule. SUMMARY: The Director of the National Institute of Standards and Technology (NIST), United States Department of Commerce, is amending the regulations found at 15 CFR Part 285 pertaining to the operation of the National Voluntary Laboratory Accreditation Program (NVLAP) to reflect changes in the information for obtaining and inspecting applicable ISO/IEC documents. This action is editorial in nature and is intended to improve the accuracy of the agency's regulations and communication with its stakeholders. DATES: This final rule is effective on July 3, 2007. FOR FURTHER INFORMATION CONTACT: Sally S. Bruce, Chief, National Voluntary Laboratory Accreditation Program, National Institute of Standards and Technology, 100 Bureau Drive, Stop 2140, Gaithersburg, MD 20899-2140, telephone number
(301)975-4016, e-mail address *sally.bruce@nist.gov.* SUPPLEMENTARY INFORMATION: Description and Explanation of Proposed Changes This final rule amends NIST's regulations to reflect the address change of the NVLAP office and the change in ordering information for the American National Standards Institute by replacing the outdated addresses in § 285.15(b) (15 CFR 285.15(b)) with the new information. Copies of all ISO/IEC documents are available for purchase from the American National Standards Institute's eStandards Store at *http://webstore.ansi.org.* You may inspect copies of all applicable ISO/IEC documents at the National Voluntary Laboratory Accreditation Program, National Institute of Standards and Technology, 100 Bureau Drive, Room B115, Gaithersburg, MD. For access to the NIST campus, please contact NVLAP by phone at 301-975-4016 or by e-mail at *NVLAP@nist.gov* to obtain instructions for visitor registration. Executive Order 12866 This rule of agency organization and management is not subject to Executive Order 12866. Executive Order 12612 This rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under Executive Order 12612. Administrative Procedure Act Prior notice and an opportunity for public comment are not required for this rule of agency organization, procedure, or practice. 5 U.S.C. 553(b)(A). This rule revises the regulations to identify the address where applicable ISO/IEC documents may be inspected. In addition, this rule is not a substantive rule as it merely revises the regulations to identify a new address. Therefore, this rule is not subject to the 30-day delay in effectiveness. 5 U.S.C. 553(d). Regulatory Flexibility Act Because notice and comment are not required under 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) are inapplicable. As such, a regulatory flexibility analysis is not required. Paperwork Reduction Act This rule does not involve a new collection of information subject to the Paperwork Reduction Act (PRA). The collection of information for NVLAP has been approved by the Office of Management and Budget
(OMB)under control number 0693-0003. Notwithstanding any other provision of the law, no person is required to comply, nor shall any person be subject to penalty for failure to comply with, a collection of information, subject to the requirements of the Paperwork Reduction Act, unless that collection of information displays a currently valid OMB Control Number. National Environmental Policy Act This rule will not significantly affect the quality of the human environment. Therefore, an environmental assessment or Environmental Impact Statement is not required to be prepared under the National Environmental Policy Act of 1969. List of Subjects in 15 CFR Part 285 Accreditation, Business and industry, Calibration, Commerce, Conformity assessment, Laboratories, Measurement standards, Testing. For the reasons set forth in the preamble, title 15 of the Code of Federal Regulations is amended as follows: PART 285—NATIONAL VOLUNTARY LABORATORY ACCREDITATION PROGRAM 1. The authority citation for 15 CFR Part 285 continues to read as follows: Authority: 15 U.S.C. 272 *et seq.* 2. Section 285.15 is amended by revising paragraph
(b)to read as follows: § 285.15 Obtaining documents.
(b)Copies of all ISO/IEC documents are available for purchase from the American National Standards Institute's eStandards Store at *http://webstore.ansi.org.* You may inspect copies of all applicable ISO/IEC documents at the National Voluntary Laboratory Accreditation Program, National Institute of Standards and Technology, 100 Bureau Drive, Room B115, Gaithersburg, MD. For access to the NIST campus, please contact NVLAP by phone at 301-975-4016 or by e-mail at *NVLAP@nist.gov* to obtain instructions for visitor registration. Dated: June 27, 2007. James M. Turner, Deputy Director. [FR Doc. E7-12853 Filed 7-2-07; 8:45 am] BILLING CODE 3510-13-P SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 240 and 242 [Release No. 34-55970; File No. S7-21-06] RIN 3235-AJ76 Regulation SHO and Rule 10a-1 AGENCY: Securities and Exchange Commission. ACTION: Final rule. SUMMARY: The Securities and Exchange Commission (“Commission”) is amending the short sale price test under the Securities Exchange Act of 1934 (“Exchange Act”). The amendments are intended to provide a more consistent regulatory environment for short selling by removing restrictions on the execution prices of short sales (“price tests” or “price test restrictions”), as well as prohibiting any self-regulatory organization (“SRO”) from having a price test. In addition, the Commission is amending Regulation SHO to remove the requirement that a broker-dealer mark a sell order of an equity security as “short exempt,” if the seller is relying on an exception from a price test. DATES: *Effective Date:* July 3, 2007. *Compliance Date:* July 6, 2007. FOR FURTHER INFORMATION CONTACT: James A. Brigagliano, Associate Director, Josephine J. Tao, Assistant Director, Lillian Hagen, Special Counsel, Victoria L. Crane, Special Counsel, Office of Trading Practices and Processing, Division of Market Regulation, at
(202)551-5720, at the Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-6628. SUPPLEMENTARY INFORMATION: The Commission is removing Rule 10a-1 [17 CFR 240.10a-1], amending Rule 200 of Regulation SHO [17 CFR 242.200], and adding Rule 201 of Regulation SHO [17 CFR 242.201] under the Exchange Act. I. Introduction A. Executive Summary In December 2006, the Commission proposed amendments to remove the price test of Rule 10a-1 and add Rule 201 of Regulation SHO to provide that no price test, including any price test of any SRO, shall apply to short sales in any security. 1 In addition, we proposed to prohibit any SRO from having a price test. 2 We also proposed to amend Rule 200(g) of Regulation SHO to remove the requirement that a broker-dealer mark a sell order of an equity security as “short exempt” if the seller is relying on an exception from a price test. 3 1 *See* Exchange Act Release No. 54891 (Dec. 7, 2006), 71 FR 75068 (Dec. 13, 2006) (“Proposing Release”). 2 *See id.* 3 *See id.* The proposed amendments were designed to modernize and simplify short sale regulation and, at the same time, provide greater regulatory consistency by removing restrictions where they no longer appear effective or necessary. We received twenty-seven comment letters in response to the proposed amendments. Commenters included individual investors, attorneys, an academic, individual traders, brokerage firms, the New York Stock Exchange LLC (“NYSE”), the International Association of Small Broker-Dealers and Advisors (“IASBDA”), the Securities Traders Association (“STA”), the Managed Funds Association (“MFA”), the Securities Industry and Financial Markets Association (“SIFMA”) and the American Stock Exchange LLC (“Amex”). While most commenters supported the Commission's proposals, some expressed concerns regarding particular provisions. 4 We discuss specific comments below in connection with the discussion of the amendments. 4 A number of comment letters received in response to the proposed amendments discussed issues unrelated to the Proposing Release. We have included a summary of these comment letters in Section IV. Other Comments, below. After carefully considering the comments, we are adopting the amendments as proposed. In particular, we are removing Rule 10a-1 and adding Rule 201 of Regulation SHO to provide that no price test, including any price test by any SRO, shall apply to short selling in any security. In addition, Rule 201, as adopted, will prohibit any SRO from having a price test. Because we are adopting our proposal to remove all current price test restrictions, as well as prohibit any SRO from having its own price test, we are also amending Rule 200(g) of Regulation SHO 5 to remove the requirement that a broker-dealer mark a sell order of an equity security as “short exempt” if the seller is relying on an exception from the price test of Rule 10a-1, or any price test of any exchange or national securities association. 6 5 17 CFR 242.200(g). 6 These amendments affect price tests and related marking requirements only. They do not relate to other provisions of Regulation SHO. We note, however, that on June 13, 2007, at an Open Commission Meeting, we approved amendments to eliminate the “grandfather” provision of Regulation SHO, and proposed amendments to eliminate the options market maker exception of Regulation SHO. These amendments do not alter the amendments to eliminate the grandfather provision, or the proposal to eliminate the options market maker exception. B. Background The Commission originally adopted Rule 10a-1 in 1938 to restrict short selling in a declining market. 7 Paragraph
(a)of Rule 10a-1 covers short sales in securities registered on, or admitted to unlisted trading privileges (“UTP”) on, a national securities exchange (“listed securities”), if trades of the security are reported pursuant to an “effective transaction reporting plan” and information regarding such trades is made available in accordance with such plan on a real-time basis to vendors of market transaction information. 8 7 *See* Exchange Act Release No. 1548 (Jan. 24, 1938), 3 FR 213 (Jan. 26, 1938). 8 Rule 10a-1 uses the term “effective transaction reporting plan” as defined in Rule 600 of Regulation NMS (17 CFR 242.600) under the Exchange Act. *See* 17 CFR 240.10a-1(a)(1)(i). Rule 10a-1(a)(1) provides that, subject to certain exceptions, a listed security may be sold short
(A)at a price above the price at which the immediately preceding sale was effected (plus tick), or
(B)at the last sale price if it is higher than the last different price (zero-plus tick). 9 Short sales are not permitted on minus ticks or zero-minus ticks, subject to narrow exceptions. The operation of these provisions is commonly described as the “tick test.” 9 The last sale price is the price reported pursuant to an effective transaction reporting plan, *i.e.* , the consolidated tape, or to the last sale price reported in a particular marketplace. Under Rule 10a-1, the Commission gives market centers the choice of measuring the tick of the last trade based on executions solely on their own exchange rather than those reported to the consolidated tape. *See* 17 CFR 240.10a-1(a)(2). The core provisions of Rule 10a-1 have remained virtually unchanged since its adoption almost 70 years ago. Over the years, however, in response to changes in the securities markets, including changes in trading strategies and systems used in the marketplace, the Commission has added exceptions to Rule 10a-1 and granted numerous written requests for relief from the rule's restrictions. 10 These requests for exemptive relief have increased dramatically in recent years in response to significant developments in the securities markets, such as the increased use of matching systems that execute trades at independently derived prices during random times within specific time intervals and the spread of fully automated markets. Also, decimal pricing increments have substantially reduced the difficulty of short selling on an uptick. In addition, under current price test regulation, different price tests apply to different securities trading in different markets and apply generally only to large or more actively-traded securities. 11 10 *See* Proposing Release, 71 FR at 75071-75072 (discussing exceptions to Rule 10a-1 added by the Commission and relief granted by the Commission from the rule's restrictions in recent years). 11 Rule 10a-1's tick test is based on the last reported sale and applies to securities listed on a national securities exchange. The NASD's and Nasdaq's bid tests are based on the last bid rather than the last reported sale and apply only to short sales in Nasdaq Global Market securities. *See* NASD Rule 5100, *available at http://nasd.complinet.com/nasd/display/display.html?rbid=1189&record_id=1159007939&element_id=1159006014&highlight=5100#r1159007939; Nasdaq Rule 3350, available at http://nasdaq.complinet.com/nasdaq/display/display.html?rbid=1705&element_id=16* . Thus, under the current market structure, Nasdaq Global Market securities traded on Nasdaq or the over-the-counter (“OTC”) market and reported to an NASD facility are subject to Nasdaq's or the NASD's bid tests; other listed securities traded on an exchange, or otherwise, are subject to Rule 10a-1's tick test. Nasdaq-listed securities traded on exchanges other than Nasdaq are not subject to any short sale price test restrictions. In addition, smaller and more thinly-traded securities, such as Nasdaq Capital Market securities and securities quoted on the OTC bulletin board (“OTCBB”) and pink sheets, are not subject to any price test restrictions wherever traded. In 2004, we adopted Rule 202T of Regulation SHO, 12 which established procedures for the Commission to temporarily suspend price tests so that the Commission could study the effectiveness of these tests. 13 Pursuant to the process established in Rule 202T of Regulation SHO, we issued an order (“First Pilot Order”) creating a one year pilot (“Pilot”) temporarily suspending the provisions of Rule 10a-1(a) and any price test of any exchange or national securities association for short sales of certain securities. 14 12 17 CFR 242.202T. 13 *See id.; see also* Exchange Act Release No. 50103 (July 28, 2004), 69 FR 48008, 48012-48013 (Aug. 6, 2004) (“Regulation SHO Adopting Release”). 14 Exchange Act Release No. 50104 (July 28, 2004), 69 FR 48032 (Aug. 6, 2004). Specifically, the First Pilot Order suspended price tests for:
(1)Short sales in the securities identified in Appendix A to the First Pilot Order;
(2)short sales in the securities included in the Russell 1000 index effected between 4:15 p.m. EST and the open of the consolidated tape on the following day; and
(3)short sales in any security not included in paragraphs
(1)and
(2)effected in the period between the close of the consolidated tape and the open of the consolidated tape on the following day. In addition, the First Pilot Order provided that the Pilot would commence on January 3, 2005 and terminate on December 31, 2005, and that the Commission might issue further orders affecting the operation of the First Pilot Order. *Id.* at 48033. On November 29, 2004, we issued an order resetting the Pilot to commence on May 2, 2005 and end on April 28, 2006 to give market participants additional time to make systems changes necessary to comply with the Pilot. Exchange Act Release No. 50747 (Nov. 29, 2004), 69 FR 70480 (Dec. 6, 2004). On April 20, 2006, we issued an order (“Third Pilot Order”) extending the termination date of the Pilot to August 6, 2007, the date on which temporary Rule 202T of Regulation SHO expires. Exchange Act Release No. 53684 (April 20, 2006), 71 FR 24765 (April 26, 2006). The purpose of the Third Pilot Order was to maintain the status quo with regard to price tests for Pilot securities while the staff completed its analysis of the Pilot data and the Commission conducted any additional short sale rulemaking. The Pilot was designed to assist the Commission in assessing whether changes to current short sale regulation are necessary in light of current market practices and the purposes underlying short sale regulation. 15 The Commission stated in the Regulation SHO Adopting Release that conducting a pilot pursuant to Rule 202T would “allow us to obtain data on the impact of short selling in the absence of a price test to assist in determining, among other things, the extent to which a price test is necessary to further the objectives of short sale regulation, to study the effects of relatively unrestricted short selling on market volatility, price efficiency, and liquidity, and to obtain empirical data to help assess whether a price test should be removed, in part or in whole, for some or all securities, or if retained, should be applied to additional securities.” 16 As noted in the Regulation SHO Adopting Release, the empirical data from the Pilot was to be obtained and analyzed “as part of [the Commission's] assessment as to whether the price test should be removed or modified, in part or whole, for actively-traded securities or other securities.” 17 15 69 FR at 48032. 16 Regulation SHO Adopting Release, 69 FR at 48009. 17 *Id.* at 69 FR at 48013. In the Regulation SHO Adopting Release we noted that “the purpose of the [P]ilot is to assist the Commission in considering alternatives, such as:
(1)Eliminating a Commission-mandated price test for an appropriate group of securities, which may be all securities;
(2)adopting a uniform bid test, and any exceptions, with the possibility of extending a uniform bid test to securities for which there is currently no price test; or
(3)leaving in place the current price tests.” *Id.* at 69 FR at 48010. Thus, the Commission's Office of Economic Analysis (“OEA”) gathered the data made public during the Pilot, analyzed this data and provided the Commission with a summary report on the Pilot. 18 The OEA Staff's Summary Pilot Report examined several aspects of market quality including the overall effect of price tests on short selling, liquidity, volatility and price efficiency. The Pilot data was also designed to allow the Commission and members of the public to examine whether the effects of price tests are similar across stocks. 19 18 *See* Office of Economic Analysis U.S. Securities and Exchange Commission, *Economic Analysis of the Short Sale Price Restrictions Under the Regulation SHO Pilot* (Feb. 6, 2007) (the “OEA Staff's Summary Pilot Report”), available at *https://www.sec.gov/news/studies/2007/regshopilot020607.pdf. See also* Office of Economic Analysis U.S. Securities and Exchange Commission, *Economic Analysis of the Short Sale Price Restrictions Under the Regulation SHO Pilot* (Sept. 14, 2006) (the “OEA Staff's Draft Summary Pilot Report”), available at *http://www.sec.gov/about/economic/shopilot091506/draft_reg_sho_pilot_report.pdf.* Prior to the publication of the Proposing Release, OEA made available on the Commission's Internet Web site, the OEA Staff's Draft Summary Pilot Report. The conclusions reached in the OEA Staff's Summary Pilot Report do not differ from those in the OEA Staff's Draft Summary Pilot Report. 19 In the Regulation SHO Adopting Release, the Commission stated its expectation that data on trading during the Pilot would be made available to the public to encourage independent researchers to study the Pilot. *See* Regulation SHO Adopting Release, 69 FR at 48009, n.9. Accordingly, nine SROs began publicly releasing transactional short selling data on January 3, 2005. The nine SROs were the AMEX, ARCA, BSE, CHX, NASD, Nasdaq, National Stock Exchange, NYSE and Phlx. The SROs agreed to collect and make publicly available trading data on each executed short sale involving equity securities reported by the SRO to a securities information processor. The SROs publish the information on a monthly basis on their Internet Web sites. In addition, the Commission encouraged outside researchers to examine the Pilot. In response to this request, the Commission received four completed studies (the “Academic Studies”) from outside researchers that specifically examine the Pilot data. 20 The Commission also held a public roundtable (the “Regulation SHO Roundtable”) that focused on the empirical evidence learned from the Pilot data (the OEA Staff's Draft Summary Pilot Report, Academic Studies, and Regulation SHO Roundtable are referred to collectively herein as, the “Pilot Results”). 21 The Pilot Results contained a variety of observations, which we considered in determining whether or not to propose removal of current price test restrictions and whether to adopt the amendments today. Generally, the Pilot Results supported removal of current price test restrictions. 22 20 *See* Karl Diether, Kuan Hui Lee and Ingrid M. Werner, *It's SHO Time! Short-Sale Price-Tests and Market Quality,* June 20, 2006; Gordon J. Alexander and Mark A. Peterson, *The Effect of Price Tests on Trader Behavior and Market Quality: An Analysis of Reg. SHO* (forthcoming in *Journal of Financial Markets* ); J. Julie Wu, *Uptick Rule, short selling and price efficiency,* August 14, 2006; Lynn Bai, *The Uptick Rule of Short Sale Regulation—Can it Alleviate Downward Price Pressure from Negative Earnings Shocks?* 2006 (“Bai”). 21 A transcript from the roundtable (“Roundtable Transcript”) is available at *http://www.sec.gov/about/economic/shopilottrans091506.pdf.* 22 *See* Proposing Release, 71 FR at 75072-75075 (discussing the Pilot Results). Based on our review of the Pilot Results and of the status of current price test restrictions, we proposed to remove Rule 10a-1 and add Rule 201 of Regulation SHO to provide that no price test, including any price test of any SRO, shall apply to short sales in any security. Rule 201 would also prohibit any SRO from having a price test. In addition, because we proposed to remove all current price test restrictions, and prohibit any price test by any SRO, we proposed to amend Rule 200(g) of Regulation SHO to remove the requirement that a broker-dealer mark a sell order of an equity security as “short exempt” if the seller is relying on an exception from the price test of Rule 10a-1, or any price test of any exchange or national securities association. II. Removal of Price Test Restrictions We proposed to remove Rule 10a-1 and add Rule 201 of Regulation SHO to provide that no price test, including any price test of any SRO, shall apply to short sales in any security. In addition, we proposed to prohibit any SRO from having a price test. We are adopting the amendments, as proposed. A. Comments Summary The comments on the proposed amendments varied. Most commenters (including individual traders, academics, broker-dealers, MFA, STA, NYSE, and SIFMA) advocated removing all price test restrictions. 23 These commenters believe that price test restrictions are no longer necessary in today's markets, which are more transparent and where there is real-time regulatory surveillance that can easily monitor for and detect any short sale manipulation. 24 In addition, these commenters noted that market developments, such as technological innovations and decimalization, have transformed the trading landscape since Rule 10a-1 was first adopted and has changed the impact of price test restrictions. 25 23 *See,* *e.g.* , letter from Howard Teitelman, CSO, Trillium Trading (Feb. 6, 2007) (“Teitelman Letter”); letter from S. Kevin An, Deputy General Counsel, E*TRADE (Feb. 9, 2007) (“E*TRADE Letter”); letter from Carl Giannone (Feb. 11, 2007) (“Giannone Letter”); letter from David Schwarz (Feb. 12, 2007) (“Schwarz Letter”); letter from John G. Gaine, President, MFA (Feb. 12, 2007) (“MFA Letter”); letter from Lisa M. Utasi, Chairman of the Board and John C. Giesea, President and CEO, STA (Feb. 12, 2007) (“STA Letter”); letter from Gerard S. Citera, Executive Director, U.S. Equities, UBS (Feb. 14, 2007) (“UBS Letter”); letter from Mary Yeager, Assistant Secretary, NYSE (Feb. 14, 2007) (“NYSE Letter”); letter from James J. Angel, PhD, CFA, Associate Professor of Finance, McDonough School of Business, Georgetown University (Feb. 14, 2007) (“Angel Letter”); letter from Ira D. Hammerman, SIFMA Managing Director and General Counsel (Feb. 16, 2007) (“SIFMA Letter”). 24 *See, e.g.* , Giannone Letter, *supra* note 23; E*TRADE Let ter, *supra* note 23; STA Letter, *supra* note 23; UBS Letter, *supra* note 23. 25 *See,* *e.g.* , MFA Letter, *supra* note 23. In supporting the proposal, one commenter expressed its view that “short selling enhances market liquidity and contributes to stock pricing efficiency, and thus is an important part of our securities markets, and that the existing restrictions on the execution prices of short sales * * * inhibit the free-market price discovery mechanism of an efficient market.” 26 In addition, this commenter noted the significant financial, technology and human resources it expends on ensuring compliance with price test restrictions. 27 This commenter believes that the compliance costs and loss of market benefits created by short sales (such as, added liquidity and price efficiency) outweigh any potential or theoretical regulatory benefits of price tests. 28 26 E*TRADE Letter, *supra* note 23. *See also,* MFA Letter, *supra* note 23 (stating that the MFA regards short selling as an essential method by which investors, including fiduciaries managing others' assets, can manage risk, hedge their portfolios, and reflect their view that the current market price of a security is higher than it should be). 27 *See* E*TRADE Letter, *supra* note 23. 28 *See id.* *See also,* UBS Letter, *supra* note 23 (noting that there are substantial programming, implementation, and ongoing compliance costs associated with maintaining price test restrictions). In expressing its support for prohibiting SROs from having their own price tests, SIFMA noted that without this prohibition SROs “could feel pressured to maintain a price test as a marketing tool for attracting issuer listings. This would lead to an environment, as exists today, where there would be disparate price tests, or even no price test, depending on the market on which a security trades. Such a result imposes unnecessary compliance costs upon broker-dealers (without also providing real benefits to investors) and leads to regulatory arbitrage.” 29 29 SIFMA Letter, *supra* note 23. *See also,* E*TRADE Letter, *supra* note 23 (commenting that allowing SROs to have their own price tests would increase compliance and systems change costs to market participants, including broker-dealers executing customer short sales). In addition, in its letter, SIFMA commented that allowing SROs to have their own price tests could raise best execution concerns for broker-dealers determining how best to route short sale orders, *i.e.* , in that a broker-dealer would need to consider whether to route short sale orders received to a market that has a price test, as opposed to a market which does not and which could thus perhaps provide a faster execution. *See* SIFMA Letter, *supra* note 23. Similarly, the STA commented that eliminating price test restrictions and prohibiting SROs from implementing the same would eliminate regulatory arbitrage in short sale regulation and would allow marketplaces to compete with each other on the basis of execution quality, rather than on regulatory disparities, which it believes, would increase public investor confidence in the markets. 30 The NYSE stated its belief that all equity markets should be regulated equally, noting that “[i]t is inappropriate that the federal securities laws, through the application of Rule 10a-1, requires trading of NYSE-listed securities to be held to a different standard than those listed on other markets.” 31 The NYSE further noted that it believes the “practical effect of the proposed amendments will be to level the playing field in the area of short sales and establish a more consistent and uniform regulatory regime across all markets.” 32 30 *See* STA Letter, *supra* note 23. 31 NYSE Letter, *supra* note 23. 32 *Id.* Two commenters (both individual investors) opposed the proposed amendments noting the need for price tests to prevent “bear raids.” 33 Other commenters (including individual traders and E*Trade), however, noted that sharp market declines, such as those induced by “bear raids,” are highly unlikely to occur in today's markets which are characterized by much smaller spreads, higher liquidity, and greater transparency than when the rule was adopted almost 70 years ago. 34 33 *See,* *e.g.* , letter from Jim Ferguson (Dec. 19, 2006); letters from David Patch (Jan. 1, 2007; Jan. 12, 2007) (“Patch Letters”). A “bear raid” involves the active selling of a security short to drive down the security's price in the hopes of convincing less informed investors of a negative material perception of the security, triggering sell orders. Falling prices could trigger margin calls and possibly forced liquidations of the security, depressing the price further. This unrestricted short selling could exacerbate a declining market in a security by eliminating bids, and causing a further reduction in the price of a security by creating an appearance that the security's price is falling for fundamental reasons. At the time, many people blamed “bear raids” for the 1929 stock market crash and the market's prolonged inability to recover from the crash. *See* 8 Louis Loss & Joel Seligman, *Securities Regulations,* section 8-B-3 (3d ed. 2006). 34 *See,* *e.g.* , E*Trade Letter, *supra* note 23; Giannone Letter, *supra* note 23; Schwarz Letter, *supra* note 23. In addition, we note that panelists at the Regulation SHO Roundtable stated the belief that price test restrictions do not provide protection from bear raids. *See* Roundtable Transcript. One commenter, although generally in support of removing all price test restrictions, believes that at some level unrestricted short selling should be collared. 35 This commenter supported having a 10% circuit breaker to prevent panic in the event there is a major market collapse. 36 The NYSE also noted its concern about unrestricted short selling during periods of unusually rapid and large market declines. This commenter stated that the effects of an unusually rapid and large market decline could not be measured or analyzed during the Pilot because such decline did not occur during the period studied. Accordingly, the NYSE commented that it believes SROs should be permitted to propose rules to be applied in such situations should they deem it appropriate. 37 35 *See* Giannone Letter, *supra* note 23. 36 *See id.* 37 *See* NYSE Letter, *supra* note 23. The NYSE also noted that it believes that SROs should be permitted to maintain existing rules consistent with this concept, such as NYSE Rule 80(A)(a) (requiring the entry of any index arbitrage order to sell any component stock of the S&P 500 Stock Price Index SM with the instruction “sell plus” on any trading day when the NYSE Composite Index® declines below its closing value on the prior trading day by at least the “two-percent” value, as calculated according to the methodology found in NYSE Rule 80A.10). *See id.* As an alternative to removing all price test restrictions, one commenter suggested extending the Pilot to include more securities to better evaluate the benefits of completely eliminating current price test restrictions. 38 Another commenter, the IASBDA, noted that while it believes that the staff makes a compelling case for the removal of price test restrictions for the Russell 3000 securities, it fails to address whether the issuers of other securities should have some choice in whether they want their stock subject to a price test. 39 IASBDA commented that “[b]y insisting that it must be all or none the staff may unnecessarily force small issuers to accept an environment which is most unkind to their securities.” 40 Furthermore, IASBDA criticized the Pilot for not including OTCBB stocks and other small stocks. 41 This commenter noted that “[t]he Russell 3000 is a broad based index in terms of capitalization but there are roughly 9000 stocks in the publicly reporting universe. The Russell 3000 Index offers investors access to the broad U.S. equity universe representing approximately 98% of the U.S. market, but roughly 33% of individual stocks. The SEC's Advisory Committee Report on Small Public Companies Final report concluded there were 9,428 companies listed including the OTCBB. Report at p.5.” 42 Thus, IASBDA stated that there may be an argument for phasing in the elimination by starting with the larger stocks and concluding with the OTCBB and smaller segments of the market. IASBDA suggested that this methodology might allow the Commission to learn something from its observance of the large stocks without a tick test. 43 38 *See* Teitelman Letter, *supra* note 23. 39 *See* letter from Peter Chepucavage, General Counsel, Plexus Consulting, on behalf of International Association of Small Broker-Dealers and Advisors (Dec. 19, 2006) (“IASBDA Letter”). 40 *Id.* 41 *Id.* 42 *Id.* 43 *See id.* Similarly, Amex believes that it is premature to remove price tests from smaller securities pending further analysis. 44 In its comment letter, Amex stated that it has “noted numerous statements in the Proposing Release, the OEA Staff's Draft Summary Pilot Report, and the Roundtable Transcript that suggest that the impact of eliminating short sale price tests may differ between large capitalization and small capitalization securities. Such a differential impact would obviously be of great concern to the Amex, which has a large concentration of small capitalization issuers.” 45 Thus, Amex commented that while it is not suggesting that price test restrictions be extended to additional securities, nor is it adamantly opposing the ultimate removal of price test restrictions from small capitalization securities to which price tests currently apply, it is advocating additional study before such action is taken in connection with small capitalization securities. 46 44 *See* letter from Claire P. McGrath, Senior Vice President and General Counsel, Amex (Feb. 16, 2007) (“Amex Letter”). 45 *Id.* 46 *See id.* We noted in the Proposing Release that in connection with the Pilot, nine reporting markets have been making public information about short selling transactions, 47 and we requested comment regarding whether it would be in the public interest to request that markets continue to release this information. 48 In response, the NYSE expressed its objection to the Commission continuing to require the markets to collect and make this information publicly available, noting that collecting and producing such information has proven to be costly and time-consuming. 49 The MFA commented that it believes such information should only be made available to law enforcement authorities. 50 Another commenter, however, urged the Commission to work with the SROs to ensure that data similar to that made publicly available during the Pilot, continues to be available to researchers after the Pilot. 51 47 *See* Proposing Release, 71 FR at 75069; *see also, supra* note 19. 48 *See* Proposing Release, 71 FR at 75077. Specifically, we sought comment regarding whether requesting the markets to continue to release such information would improve transparency of short selling. In addition, we asked whether it would help the Commission monitor the markets for potential abuses if the Commission were to approve the removal of price tests. We also asked for comment regarding how costly it would be for the markets to continue to produce the data and whether there are any less costly alternatives to the current information being released by the markets. 49 *See* NYSE Letter, *supra* note 23. 50 *See* MFA Letter, *supra* note 23. The MFA commented that it is “concerned that public transactional short selling data may fuel frivolous issuer lawsuits against market participants with a legitimate but different view of the value of an issuer's securities.” *Id.* 51 *See* Angel Letter, *supra* note 23. In its letter, the NYSE stated that it believes that “the stated purpose for publicly releasing such data during the pilot— *i.e.* , encouraging independent researchers to study the pilot's effects—has already been successfully accomplished, as evidenced by the academic studies published and public roundtable held concerning the results of the pilot data.” 52 The NYSE also did not believe that we should request that the SROs submit periodic reports regarding the effects of the removal of price test restrictions at regular intervals, such as on a semi-annual or annual basis, stating that such a requirement, in addition to collecting and making publicly available data on short sale transactions, would “greatly exacerbate costs.” 53 52 NYSE Letter, *supra* note 23. 53 *See id.* B. Response to Comments We have carefully considered all the comments we received regarding the proposed amendments. In particular, we note the comments regarding the need for price test restrictions to prevent the use of short selling to drive down the market in “bear raids.” One of the Commission's stated objectives when it adopted Rule 10a-1 in 1938 was to prevent short sellers from accelerating a declining market by exhausting all remaining bids at one price level, causing successively lower prices to be established by long sellers. 54 In addition, in the Proposing Release, we noted that although short selling serves useful market purposes, such as increasing market liquidity and price efficiency, it also may be used to illegally manipulate stock prices. 55 Because of the Commission's stated objective when it adopted Rule 10a-1 and our concerns about the potential use of short sales to manipulate stock prices, OEA examined the Pilot data for any indication that there is an association between extreme price movements and price test restrictions. OEA, however, did not find any such association. 56 We also note that although we are removing current price test restrictions, today's markets are characterized by high levels of transparency and regulatory surveillance. These characteristics greatly reduce the risk of undetected manipulation and permit regulators to monitor for the types of activities that current price test restrictions are designed to prevent. In addition, we note that the general anti-fraud and anti-manipulation provisions of the federal securities laws continue to prohibit activity designed to improperly influence the price of a security. 57 54 *See* Exchange Act Release No. 13091 (Dec. 21, 1976), 41 FR 56530 (Dec. 28, 1976). 55 *See* Proposing Release, 71 FR at 75070. 56 *See* OEA Staff's Summary Pilot Report at 56, *supra* note 18. 57 *See,* *e.g.* , Securities Act of 1933 Section 17(a), Exchange Act Section 9(a), 10(b), and 15(c), and Rule 10b-5 thereunder. In addition, with respect to comments regarding the Commission allowing SROs to adopt price test restrictions in the event of unusually rapid and large market declines, we have determined not to take such action at this time. 58 We believe that allowing SROs to adopt price test restrictions under such circumstances could undermine a primary objective of the proposed amendments of achieving regulatory uniformity and simplicity. 59 For the same reasons, we do not believe that we should implement a circuit breaker for short sales at this time. 58 *See* NYSE Letter, *supra* note 23. 59 We note, however, that Section 12(k)(2) of the Exchange Act provides that the Commission, “in an emergency, may by order summarily take such action to alter, supplement, suspend, or impose requirements or restrictions with respect to any matter or action subject to regulation by the Commission or a self-regulatory organization under the securities laws, as the Commission determines is necessary in the public interest and for the protection of investors
(i)to maintain or restore fair and orderly securities markets (other than markets in exempted securities);
(ii)to ensure prompt, accurate, and safe clearance and settlement of transactions in securities (other than exempted securities); or
(iii)to reduce, eliminate, or prevent the substantial disruption by the emergency of
(I)securities markets (other than markets in exempted securities), investment companies, or any other significant portion or segment of such markets, or
(II)the transmission or processing of securities transactions (other than transactions in exempted securities).” In addition, SROs may also continue to have rules consistent with the concept of circuit breakers. We note, however, that pursuant to Section 36 of the Exchange Act, in the future the Commission could determine that circumstances have arisen that justify the issuance of an exemption from the provisions of Rule 201. 60 Should an SRO request the Commission issue such an exemption in conjunction with the filing of an SRO proposed rule change to establish a price test restriction, when considering any such request, the Commission would consider, among other things, whether the proposed rule change is consistent with the objectives of today's amendments of providing regulatory simplicity and consistency. In addition, to issue an exemption pursuant to Section 36, the Commission would have to find that such an exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors. 61 60 *See* 15 U.S.C. 78mm. 61 *See id.* In response to IASBDA's comment regarding allowing issuers to have a choice as to whether or not they want their stock to be subject to a price test, we have determined not to take such action at this time. A primary goal of the amendments is to bring uniformity to, and simplify, short sale regulation. To allow issuers to have a choice as to whether or not their stock is subject to a price test would undermine this primary objective. In addition, we note that in the Proposing Release we specifically requested comment from issuers regarding their views of the impact of the proposed amendments on their securities. 62 We did not, however, receive any comments from issuers. 63 62 *See* Proposing Release, 71 FR at 75076. 63 We note that the IASBDA is an advocacy group for small broker-dealers and advisers (including lawyers and hedge funds). In addition, with respect to IASBDA's comment regarding the universe of securities subject to the Pilot and, in particular, that the Pilot did not include securities quoted on the OTCBB, we note that the Pilot did not include this class of securities because securities quoted on the OTCBB are not currently subject to any price test restrictions. Both the IASBDA and Amex suggested removing price tests from larger securities first to allow time to study the impact of the permanent removal of price test restrictions before such action is taken for smaller securities. We do not believe that such an approach would provide new results relevant to smaller securities. 64 As we noted in the Proposing Release, while there is some evidence supporting the application of price test restrictions to smaller securities, the evidence is not strong enough to warrant the continuation of current price test restrictions to any subset of securities. 65 Such continuation would also undermine a primary goal of these amendments of providing greater uniformity and simplicity to short sale regulation. 64 *See* IASBDA Letter, *supra* note 39; Amex Letter, *supra* note 44. We note that many smaller or thinly-traded securities, such as Nasdaq Capital Market securities and securities quoted on the OTCBB and pink sheets, are not currently subject to any price test restrictions. 65 *See* Proposing Release, 71 FR at 75076. In addition, we note that academics have previously examined short selling in a matched sample of Nasdaq National Market stocks, which were subject to price test restrictions, and Nasdaq SmallCap stocks, which were not, during a period of high volatility and rapidly declining stock prices (September 2000 to August 2001). In this study's sample of 2,275 observations, the study found no significant differences in the overall level of short selling, or the frequency of days with abnormally negative returns and abnormally high short selling. *See* Michael G. Ferri, Stephen E. Christophe, and James J. Angel, *A short look at bear raids: Testing the bid test,* 2004. In connection with whether we should request that SROs continue to make public information regarding short sale transactions similar to that obtained during the Pilot, we note that the SROs have provided such information during the Pilot at our request so that researchers could provide the Commission with their own empirical analyses of the Pilot. 66 We have determined at this time not to propose to require the SROs to make information similar to that obtained during the Pilot publicly available on a regular basis. 66 *See* Regulation SHO Adopting Release, 69 FR at 48009. With respect to whether the SROs should submit periodic reports regarding the effects of the removal of price tests, and in response to commenters concerns that traders may have been on “good behavior” during the Pilot, 67 we note that while we believe that current price test restrictions are no longer effective or necessary, we intend to closely monitor for potentially abusive trading activities. We expect that the markets will similarly continue to surveil for trading abuses. To the extent we obtain evidence of possible violations of the federal securities laws, we will pursue investigations and law enforcement actions as warranted. 67 For example, in its letter, Amex noted a comment by OEA in the OEA Staff's Draft Summary Pilot Report that it is possible that traders might behave differently if a rule were permanently and completely removed than if it is only temporarily and incompletely removed, and that traders with manipulative intentions might be on good behavior if they believe that heightened scrutiny during the Pilot increases their chances of getting caught. *See* Amex Letter, *supra* note 44. We have carefully considered the comments and continue to believe that the amendments are appropriate in light of market developments that have occurred in the securities industry since the Commission adopted Rule 10a-1 in 1938, such as decimalization, the increased use of matching systems that execute trades at independently derived prices during random times within specific time intervals, and, most recently, the spread of fully automated markets. We believe the amendments will bring increased uniformity to short sale regulation, level the playing field for market participants, and remove an opportunity for regulatory arbitrage. In addition, we note that only one commenter questioned the economic evidence supporting the amendments, but we believe that the critique is inapplicable. 68 The Pilot was designed to assist the Commission in assessing whether changes to current short sale regulation are necessary in light of current market practices and the purposes underlying price test regulation. 69 During the comment period, we received one additional study examining the results of the Pilot. 70 This study found results that are consistent with other Pilot studies previously submitted to, and discussed by, the Commission, which generally found that current price test restrictions do not enhance market quality. 71 68 One commenter expressed concern about the methodologies used in the Pilot studies. *See* Patch Letters, *supra* note 33 (stating that “the methods in which the OEA conducted their analysis (specifically the duration of time) is flawed. Bear raids do not last for months but over days or weeks and such analysis by the OEA, looking over large windows of time without looking at micro trading, is a flawed approach”). *But see,* OEA Staff's Summary Pilot Report at 9, *supra* note 18 (stating that OEA focused its investigation on price patterns that might indicate manipulative behavior at a daily or intraday frequency). In addition, we note that panelists from the Regulation SHO Roundtable were asked to critique the studies and all panelists generally agreed with the results. *See* Roundtable Transcript at 49-57, 72-80, *supra* note 21. 69 69 FR at 48032. *See also,* Proposing Release, 71 FR at 75068-75069, 75072-75073 (discussing the Pilot and the Pilot Results). 70 *See* Bai, *supra* note 20. *See also,* OEA Staff's Summary Pilot Report at 85, *supra* note 18. 71 Bai found that the Pilot had no effect on stock price reactions to negative earnings shocks. *See* Bai, *supra* note 20. *See also,* Proposing Release, 71 FR at 75072-75075 (discussing the Pilot Results). Thus, after carefully considering the comments received, we are adopting the amendments, as proposed. III. Removal of “Short Exempt” Marking Requirement Because we proposed to remove Rule 10a-1 and prohibit any SRO from having a price test, we also proposed to amend Rule 200(g) of Regulation SHO 72 to remove the requirement that a broker-dealer mark a sell order of an equity security as “short exempt” if the seller is relying on an exception from the tick test of Rule 10a-1, or any price test of any exchange or national securities association. 73 We are adopting the amendment as proposed. 72 17 CFR 242.200(g). 73 Broker-dealers would, however, continue to be required to mark sell orders as either “long” or “short” in compliance with Rule 200(g). Rule 200(g) of Regulation SHO provides that a broker-dealer must mark all sell orders of any security as “long,” “short,” or “short exempt.” 74 Further, Rule 200(g)(2) of Regulation SHO provides that a short sale order must be marked “short exempt” if the seller is “relying on an exception from the tick test of 17 CFR 240.10a-1, or any short sale price test of any exchange or national securities association.” 75 The “short exempt” marking requirement provides a record that short sellers are availing themselves of the various exceptions to, or exemptions from, the application of the restrictions of Rule 10a-1 or of any price test of any exchange or national securities association. 74 *See* 17 CFR 242.200(g). 75 *See id.* at 242.200(g)(2). A. Comments Summary We received five comment letters, from the MFA, STA, UBS, NYSE, and SIFMA in response to the proposed amendment. 76 Generally, the commenters supported the Commission's proposal to remove the ‘short exempt’ marking requirement. 77 76 *See* MFA Letter, *supra* note 23; STA Letter, *supra* note 23; UBS Letter, *supra* note 23; NYSE Letter, *supra* note 23; SIFMA Letter, *supra* note 23. 77 *See* MFA Letter, *supra* note 23; STA Letter, *supra* note 23; UBS Letter, *supra* note 23. In its letter, the MFA noted that it believes broker-dealers are in the best position to raise compliance issues related to their systems and the “short exempt” marking requirement. Thus, the MFA urged the Commission to carefully consider any compliance concerns raised by broker-dealers in considering this proposal. *See* MFA Letter, *supra* note 23. Although the STA stated that it supports the proposal to remove the “short exempt” marking requirement in Regulation SHO, the STA commented that it believes that securities currently marked “short exempt” pursuant to Rule 203(b)(2)(ii) of Regulation SHO 78 should be marked “long” rather than “short” because marking such orders “short” “does not accurately describe the customer's ownership of the same and could cause confusion and anger from public investors when they receive confirmation of the sale of a security they understood they owned.” 79 Similarly, SIFMA commented that its member firms would encourage the Commission to amend the definition of a “long” sale to include these types of sales “to avoid unintended consequences and mistaken perceptions by issuers and others as to the nature of the sale.” 80 78 17 CFR 242.203(b)(2)(ii). Rule 203(b)(2)(ii) of Regulation SHO excepts from the locate requirement of Regulation SHO any sale of a security that a person is deemed to own pursuant to Rule 200 of Regulation SHO, provided that the broker-dealer has been reasonably informed that the person intends to deliver such security as soon as all restrictions on delivery have been removed. If the person has not delivered such security within 35 days after the trade date, the broker-dealer that effected the sale must borrow securities or close out the short position by purchasing securities of like kind and quantity. Such circumstances could include the situation where a convertible security, option, or warrant has been tendered for conversion or exchange, but the underlying security is not reasonably expected to be received by settlement date. Another situation could be where a customer owns stock that was formerly restricted, but pursuant to Rule 144 under the Securities Act of 1933, the security may be sold without restriction. In connection with the sale of such security, the security may not be capable of being delivered on settlement date due to processing to remove the restricted legend. 79 STA Letter, *supra* note 23. 80 SIFMA Letter, *supra* note 23. In addition, SIFMA commented that rather than removing the “short exempt” marking requirement, SIFMA firms generally would prefer that the Commission preserve the “short exempt” marking requirement, specifically amending Regulation SHO to indicate that a sale should be marked “short exempt” if effected in reliance on an exception from the “locate” requirement, pursuant to Rule 203(b)(2) of Regulation SHO. 81 According to SIFMA, firms “generally are of the view that preserving “short exempt” marking for such situations should assist their compliance efforts by identifying short sales for which a locate is not required to be obtained.” 82 81 *Id.* Rule 203(b)(2) provides an exception from the locate requirement of Rule 203(b)(1) for: “(i) A broker or dealer that has accepted a short sale order from another registered broker or dealer that is required to comply with paragraph (b)(1) of this section, unless the broker or dealer relying on this exception contractually undertook responsibility for compliance with paragraph (b)(1) of this section;
(ii)Any sale of a security that a person is deemed to own pursuant to § 242.200, provided that the broker or dealer has been reasonably informed that the person intends to deliver such security as soon as all restrictions on delivery have been removed. If the person has not delivered such security within 35 days after the trade date, the broker-dealer that effected the sale must borrow securities or close out the short position by purchasing securities of like kind and quantity;
(iii)Short sales effected by a market maker in connection with bona-fide market making activities in the security for which this exception is claimed; and
(iv)Transactions in security futures.” 82 SIFMA Letter, *supra* note 23. SIFMA noted in its letter that, if the Commission decides not to amend the definition of a “long” sale in Rule 200(g) as suggested by SIFMA, it would strongly urge the Commission to continue to allow firms to mark sales “short exempt,” in reliance on the exception from the Regulation SHO “locate” requirement in Rule 203(b)(2)(ii) of Regulation SHO. *Id.* UBS also commented that we should retain the “short exempt” marking requirement to “identify certain short sale transactions as exempt from the affirmative determination requirements for regulatory and compliance requirements.” UBS Letter, *supra* note 23. The MFA and NYSE responded to our request for comment in the Proposing Release regarding whether, in the absence of price test restrictions, the marking of sell orders would continue to need to be transparent to market makers and specialists. 83 Currently, to facilitate the application of price test restrictions, market makers and specialists receive information allowing them to distinguish short sales from other sales. 83 *See* Proposing Release, 71 FR at 75078. Specifically, in the Proposing Release we stated that: “To facilitate the application of Rule 10a-1, NASD Rule 5100, and Nasdaq Rule 3350, market makers and specialists receive information allowing them to distinguish short sales from other sales. In other words, the information on whether an order is marked “long,” “short,” or “short exempt” is made transparent to market makers and specialists but not to other market participants or the public. In the absence of price test restrictions, would the marking of sell orders need to be transparent to market makers and specialists? Would there be any systems or market quality costs/benefits associated with not revealing this information to specialists and market makers?” In its comment letter, the MFA stated that “[i]n protecting the confidentiality of customer orders and maintaining a level playing field for all market participants, MFA supports the idea of availing order marking information only to brokers preparing order tickets.” 84 The MFA believes that the “best safeguard for maintaining the integrity of order information is by limiting order marking information to those necessary in carrying out compliance functions.” 85 84 MFA Letter, *supra* note 23. 85 *Id.* NYSE, on the other hand, expressed its belief that it is “necessary that the overall short interest in a security, as well as information on whether a particular sell order introduced to the Exchange is long or short, continue to be transparent intra-day to specialists in the securities in which they are registered.” 86 NYSE noted that “[f]or a specialist, making the correct determination regarding the necessity of a dealer transaction at any given moment includes an understanding of the general market conditions in a particular security, including the actual or reasonably anticipated needs of the market. The intra-day short interest position in a security as well as whether particular orders are long or short are critical pieces of information in the overall mix of factors that combine to form the “market” in that security.” 87 The NYSE believes that the absence of such information would result in poorer overall market quality. 88 86 NYSE Letter, *supra* note 23. 87 *Id.* 88 *See id.* B. Response to Comments We have carefully considered all the comments we received. In response to the STA's and SIFMA's comments regarding revising the definition of when an order should be marked “long” to include sales of securities excepted from the locate requirement pursuant to Rule 203(b)(2)(ii) of Regulation SHO, we have determined not to take such action at this time. Although these are sales of securities that a person is “deemed to own” pursuant to Rule 200 of Regulation SHO, 89 the securities will not be delivered in time for settlement of the transaction and, therefore, we believe that such sales are more appropriately marked as “short” rather than “long” sales. 90 89 17 CFR 242.200(a)-(f). 90 Regulation SHO provides that an order can only be marked “long” if the seller is deemed to own the security being sold pursuant to paragraphs
(a)through
(f)of Rule 200 of Regulation SHO and either:
(i)The security to be delivered is in the physical possession or control of the broker or dealer; or
(ii)It is reasonably expected that the security will be in the physical possession or control of the broker or dealer no later than settlement of the transaction. *See* 17 CFR 242.200(g). Thus, Regulation SHO contemplates that only those sell orders that will be available for delivery on settlement date can be marked “long.” In addition, in response to STA's comment that the marking of these orders as “short” does not accurately describe the customer's ownership of the same and could cause confusion and anger from public investors when they receive confirmation of the sale of a security they understood they owned, we note that the order marking requirements are to facilitate the surveillance and monitoring of compliance with other provisions of Regulation SHO, such as the borrowing and delivery requirements for long sales under Rule 203(a), 91 and the locate requirements for short sales under Rule 203(b). 92 Regulation SHO does not require that a broker-dealer reveal an order marking to its customer. Nor do we believe at this time that it is necessary for a customer to receive such information. 91 17 CFR 242.203(a). 92 17 CFR 242.203(b). In addition, we have determined not to retain the “short exempt” marking requirement or revise the definition of when an order should be marked “short exempt” to include those circumstances in which a short sale is excepted from the locate requirements of Rule 203(b)(2) of Regulation SHO. 93 The “short exempt” marking requirement has only ever applied if the seller is relying on an exception from a price test. It has never applied to sales that do not have to comply with the locate requirement of Regulation SHO. 94 Today's amendment to remove the “short exempt” marking requirement is necessitated by the fact that we are removing current price test restrictions and prohibiting any SRO from having a price test. Thus, we do not believe that it is appropriate at this time to re-define the order marking requirements of Regulation SHO as suggested by commenters. We will, however, consider separately whether further action in this area is necessary or warranted. 93 17 CFR 242.203(b)(2). 94 *See id.* With respect to the MFA's and NYSE's comments regarding the transparency of order markings to market participants other than those broker-dealers with responsibility for compliance with the marking requirements of Regulation SHO, we have determined at this time to not take any action to limit the transparency of order markings in this way. 95 We will continue, however, to review whether further action by the Commission on this matter is necessary or warranted. 95 Currently, which market participants are able to see the marking for a sell order is established by SRO rule and varies among the SROs. After carefully considering the comments received, we are adopting the proposed amendment without modification. IV. Other Comments We received eight comment letters from individual investors discussing other provisions of Regulation SHO, 96 most notably the grandfather provision of that rule. 97 In addition, these commenters expressed concerns about naked short selling. This release discusses amendments that will affect price tests and related marking requirements only. They do not relate to other provisions of Regulation SHO or naked short selling, which are the subject of other Commission rulemaking. 98 96 *See* 17 CFR 242.200 *et seq.* 97 *See* letter from Joan Oleary (Jan. 22, 2007); letter from Candice Grant (Jan. 21, 2007); letter from Roland L. Pitts (Dec. 28, 2006); letter from Charles P. Bennett, M.D. (Jan. 18, 2007); letter from Carlos Molina (Jan. 17, 2007); letter from Lars D. Roose (Feb. 11, 2007); letter from Hillary Thomas (Feb. 11, 2007); letter from H. Glenn Bagwell, Jr. (Feb. 12, 2007). These comment letters relate to File No. S7-12-06 regarding proposed amendments to Regulation SHO and were considered in connection with that rulemaking. 98 *See* Regulation SHO Amendments Proposing Release, 71 FR 41710; *see also,* supra n.[6]. V. Paperwork Reduction Act The adopted amendments to Regulation SHO impose a “collection of information” within the meaning of the Paperwork Reduction Act of 1995; 99 however, the collection of information is covered by the approved collection for Exchange Act Rule 19b-4. 100 Rule 201(a) of Regulation SHO provides that no price test, including any price test of any SRO, shall apply to short sales in any security. In addition, Rule 201(b) of Regulation SHO prohibits any SRO from having a price test. Thus, to the extent that any SRO currently has a price test, that SRO is required to amend its rules to comply with these amendments to Regulation SHO. Any such amendments will need to be filed with the Commission as proposed rule changes, pursuant to Section 19(b) of the Exchange Act 101 and Rule 19b-4 thereunder. This collection of information, however, will be collected pursuant to Exchange Act Rule 19b-4 and, therefore, will not be a new collection of information for purposes of the amendments. 99 44 U.S.C. 3501 *et seq.* 100 17 CFR 240.19b-4. 101 15 U.S.C. 78s(b). VI. Consideration of Costs and Benefits of Proposed Amendments to Rule 10a-1 and Regulation SHO The Commission is sensitive to the costs and benefits that result from our rules. Thus, in the Proposing Release, we solicited comments related to the costs and benefits associated with the proposed amendments. 102 We explicitly requested that commenters provide supporting empirical data for any positions advanced. In addition, we specifically requested comment regarding the costs and benefits of unrestricted short selling activity and any costs associated with complying with the proposed amendments, if the Commission were to adopt the proposed amendments. We also requested comment regarding any costs relating to the removal of price test restrictions adopted by the SROs. In addition, we requested comment on the potential costs for any modification to both computer systems and surveillance mechanisms and for information gathering, management, and recordkeeping systems or procedures, as well as any potential benefits resulting from the proposals for registrants, issuers, investors, brokers or dealers, other securities industry professionals, regulators, and other market participants. Four commenters, the STA, UBS, SIFMA, and Amex provided comments related to the costs and benefits of the proposed rule amendments. 103 We discuss these comment letters below. 102 *See* Proposing Release, 71 FR at 75078-75079. 103 *See* STA Letter, *supra* note 23; UBS Letter, *supra* note 23; SIFMA Letter, *supra* note 23; Amex Letter, *supra* note 44. A. Removal of Price Test Restrictions 1. Benefits In the Proposing Release, we solicited comment on any benefits that could be realized if the Commission adopts the proposed amendments, including both short-term and long-term benefits. In addition, we solicited comment regarding benefits to market efficiency, pricing efficiency, market stability, market integrity, and investor protection. Only the STA submitted comments noting benefits of the proposed amendments. 104 In its comment letter, the STA noted that it does not believe that the proposed amendments would result in higher trading costs or wider spreads. 105 In addition, the STA stated that it believes the proposed amendments would lead to a reduction in surveillance and compliance costs. 106 104 *See* STA Letter, *supra* note 23. 105 *See id.* 106 *See id.* We believe that this is an appropriate time to remove existing price test restrictions because current price test regulation is inconsistent across markets, potentially creates an unlevel playing field, allows for regulatory arbitrage and has not kept pace with the types of trading systems and strategies currently used in the marketplace. In addition, today's markets are characterized by high levels of transparency and regulatory surveillance. These characteristics greatly reduce the risk of undetected manipulation and permit regulators to monitor for the types of activities that Rule 10a-1 and other price tests are designed to prevent. We believe that the removal of current price test restrictions will benefit market participants by providing market participants with the ability to execute short sales in all securities in all market centers without regard to price test restrictions. In addition, market centers will be competing for executions on a level playing field because they will not be affected by the existence or non-existence of price test restrictions. We also believe that removing all current price test restrictions is preferable to applying different tests in different markets, which can require market participants to apply different rules to different securities depending on which market the trade is executed. Thus, we believe that the amendments will reduce confusion and compliance difficulties for market participants. We also believe that the amendments will benefit exchanges and other market centers because market participants will no longer be able to select a market on which to execute a short sale based on the applicability of price test restrictions. The amendments will remove a competitive disadvantage purportedly experienced by some market centers because market participants will no longer route orders to avoid application of a market center's price test. Nor will market centers that do not have a price test be able to use that factor to attract order flow away from market centers that have a price test. In addition, the amendments will result in benefits associated with systems and surveillance mechanisms because these systems and mechanisms will no longer need to be programmed to account for price test restrictions based on last sale and last bid information. We also note that in the absence of price test restrictions, new staff (compliance personnel, associated persons, etc.) will no longer need to be trained regarding rules relating to price tests. Over the long run, we believe this will likely lead to decreased training and compliance costs for market participants. We also believe that the amendments will lead to a reduction in costs because market participants and their lawyers, both in-house and outside counsel, will no longer need to make either informal (phone calls) or formal (letters) requests for exemptions from Rule 10a-1. In addition, we anticipate that the removal of price test restrictions may result in increased price efficiency because prices will be determined by buy and sell interest, without any artificial restraints on short selling. 2. Costs We recognize that the amendments may result in some costs to market participants. As an aid to evaluating the costs of the proposed amendments, we solicited comment in the Proposing Release. In particular, we sought comment regarding the costs of the proposed amendments to market participants, including broker-dealers and SROs, related to systems changes to computer hardware and software, reprogramming costs, and surveillance and compliance costs, including whether these costs would be incurred on a one-time or ongoing basis. 107 Four commenters, the STA, UBS, SIFMA and Amex submitted comments regarding costs associated with the proposed amendments. 108 107 *See* Proposing Release, 71 FR at 75079-75080. 108 *See* STA Letter, *supra* note 23; UBS Letter, *supra* note 23; SIFMA Letter, *supra* note 23; Amex Letter, *supra* note 44. In their comment letters, the STA, UBS and SIFMA noted potential reprogramming costs that market participants may incur if the Commission does not act on the proposed amendments prior to market participants reprogramming their systems in response to the new regulatory framework created by Regulation NMS 109 and the desire of investors and other market participants for more automated and efficient trading services. 110 On January 24, 2007, we extended the date for all automated trading centers (both SRO trading facilities and Alternative Display Facility participants) to have fully operational Regulation NMS-compliant trading systems to July 9, 2007 (the “Regulation NMS Compliance Date”). 111 In meeting the Regulation NMS Compliance Date, market participants have been developing new systems or modifying existing systems to be Regulation NMS-compliant. 109 *See* Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005). 110 *See* STA Letter, *supra* note 23; UBS Letter, *supra* note 23; SIFMA Letter, *supra* note 23. 111 *See* Exchange Act Release No. 55160 (Jan. 24, 2007), 72 FR 4202 (Jan. 30, 2007). In their comment letters, STA, UBS, and SIFMA urged the Commission to act on the proposed amendments prior to the Regulation NMS Compliance Date. 112 In its letter, STA noted that “[i]f the SEC's proposal is implemented subsequent to the operation of Regulation NMS to certain securities, it will require industry-wide reprogramming of Regulation NMS compliance systems during the infancy of the Rules implementation, a most sensitive time period. As a result, the immediate success of Regulation NMS could be compromised.” 113 As discussed in Section IX below, these amendments will be effective immediately upon publication in the **Federal Register** . Thus, market participants will have notice and time prior to the Regulation NMS Compliance Date to reprogram their systems without regard to current price test restrictions. 112 *See* STA Letter, *supra* note 23; UBS Letter, *supra* note 23; SIFMA Letter, *supra* note 23. 113 STA Letter, *supra* note 23. In addition, in its comment letter, SIFMA urged the Commission to take steps to eliminate price test restrictions prior to the Regulation NMS Compliance Date to alleviate the necessity for firms to, in the course of instituting programming changes to meet the new requirements of Regulation NMS, program systems to comply with price test restrictions, only to be required to reverse such programming costs shortly thereafter. SIFMA stated that cost estimates for firms to program for such changes varied, from as low as approximately $200,000 for some firms to as high as $2 million for others. *See* SIFMA Letter, *supra* note 23. In its comment letter, Amex stated that “[w]hile it is difficult to predict future trading activities and the resultant need for new or different regulatory programs, [its] best estimate is that there would probably be no material impact on [its] regulatory costs.” 114 Amex noted that although staff time and technology resources would no longer be required to monitor compliance with price tests, surveillance by Amex staff of order marking violations would still be required. In addition, Amex commented that “the absence of a tick test to discourage potential “bear raids” and other manipulative activities could result in the need to devote additional resources to such regulatory programs than is currently the case.” 115 114 Amex Letter, *supra* note 44. 115 *Id.* We believe that costs associated with the amendments will be minimal because the infrastructure necessary to comply with the amendments are, for the most part, already be in place. Market participants have needed to establish or modify their systems and surveillance mechanisms to exempt those securities included in the Pilot from all price test restrictions. 116 In addition, any further changes to systems and surveillance mechanisms or procedures will be relatively minor because the amendments will remove all price test restrictions rather than, for example, impose a modified price test. We also believe that market participants will not need to incur costs to purchase new systems, or increase staffing based solely on the implementation of the amendments. 116 The Pilot exempts a select group of securities from price test restrictions during regular trading hours. Between the close of the consolidated tape and the open of the consolidated tape on the following day, however, all equity securities are exempted from price test restrictions. *See* 69 FR at 48033. Although we recognize that market participants may incur costs to modify, establish or implement existing or new supervisory and compliance procedures due to the amendments, these costs will be minimal because market participants already have in place supervisory or compliance procedures to monitor for trading activity that current price test restrictions are designed to deter. We recognize that SROs that have adopted price tests will incur costs associated with removing such price tests. For example, the NASD and Nasdaq have their own bid tests that, under the amendments, will no longer be applicable. 117 In addition, some exchanges have adopted rules in conformity with the provisions of Rule 10a-1, which will no longer be applicable. SROs may incur costs associated with the processes to remove such rules, including filing rule changes with the Commission, as well as reprogramming systems designed to enforce these rules. Although we requested comment regarding these costs, including costs relating to preparing and filing any necessary rule changes with the Commission, 118 we did not receive any comments. 117 *See* NASD Rule 5100, *available at* *http://nasd.complinet.com/nasd/display/display.html?rbid=1189&record_id=1159007939&element_id=1159006014&highlight=5100#r1159007939* ; Nasdaq Rule 3350, available at *http://nasdaq.complinet.com/nasdaq/display/display.html?rbid=1705&element_id=16* . 118 *See* Proposing Release, 71 FR at 75079-75080. We also recognize that the amendments may increase transaction costs, decrease quoted depth, and increase intraday price volatility, particularly in small stocks. The Pilot results suggest, however, that these changes are small in magnitude and would not significantly increase costs or reduce liquidity. 119 119 *See id.* at 75072-75075 (discussing the results of the Pilot). B. Removal of “Short Exempt” Marking Requirement 1. Benefits We are amending Rule 200(g) of Regulation SHO to remove the “short exempt” marking requirement. 120 Rule 200(g)(2) of Regulation SHO provides that a short sale order must be marked “short exempt” if the seller is “relying on an exception from the tick test of 17 CFR 240.10a-1, or any short sale price test of any exchange or national securities association.” 121 Thus, because we are removing all current price test restrictions, as well as prohibiting any SRO from having a price test, the “short exempt” marking requirement will no longer be applicable. In addition, we note that removing the “short exempt” marking requirement will promote regulatory simplification because the marking requirement will no longer be applicable. 120 17 CFR 242.200(g). 121 *See id.* at § 242.200(g)(2). 2. Costs Although we sought public comment on costs, we did not receive any such comments relating to this proposed amendment. We recognize, however, that there may be some costs associated with removing the “short exempt” marking requirement. Some market participants, including broker-dealers and SROs, may have to reprogram systems and update supervisory procedures due to the removal of the “short exempt” marking requirement. Sales of securities previously marked “short exempt,” however, will continue to be marked either “long” or “short.” Thus, we believe that such costs will be minor. VII. Consideration of Burden on Competition and Promotion of Efficiency, Competition, and Capital Formation Section 3(f) of the Exchange Act requires the Commission, whenever it engages in rulemaking and whenever it is required to consider or determine if an action is necessary or appropriate in the public interest, to consider whether the action would promote efficiency, competition, and capital formation. 122 In addition, Section 23(a)(2) of the Exchange Act requires the Commission, when making rules under the Exchange Act, to consider the impact such rules would have on competition. 123 Exchange Act Section 23(a)(2) prohibits the Commission from adopting any rule that would impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act. 122 15 U.S.C. 78c(f). 123 15 U.S.C. 78w(a)(2). In the Proposing Release, we solicited comment on the proposed amendments' effects on efficiency, competition, and capital formation. In addition, we requested, but did not receive, comments regarding the impact of the proposed amendments on the economy generally pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. 124 124 Pub. L. 104-121, tit. II, 110 Stat. 857 (1996). We have considered the proposed amendments to Rule 10a-1 and Regulation SHO in light of the standards of Section 23(a)(2) of the Exchange Act and believe the adopted amendments will not impose any burden on competition not necessary or appropriate in furtherance of the Exchange Act. The amendments will remove the price test restrictions of Rule 10a-1 125 and provide that no price test, including any price test of any SRO, shall apply to short sales in any security. The amendments will also prohibit any SRO from having a price test. In addition, the amendments will remove the “short exempt” marking requirement of Rule 200(g) of Regulation SHO because this marking requirement applies only if the seller is relying on an exception from the tick test of Rule 10a-1 or any short sale price test of any exchange or national securities association. 125 17 CFR 242.10a-1. Current short sale regulation is inconsistent. For example, Rule 10a-1 applies only to short sale transactions in listed securities. The NASD's and Nasdaq's bid tests apply only to Nasdaq Global Market securities. No price tests apply to short sales in Nasdaq Capital Market securities or securities quoted on the OTCBB or pink sheets. In addition, no price test applies to short sales of Nasdaq Global Market securities executed on exchanges trading Nasdaq securities on a UTP basis, unless the market on which the securities are being traded has adopted its own price test. Moreover, the current exceptions to, and exemptions from, the price tests for a wide range of short selling activities have limited the applicability of the restrictions contained in these rules. The end result is inconsistent short sale regulation of securities, depending on the market where the securities are trading, and the type of short selling activity. Thus, the amendments are intended to promote regulatory simplification and uniformity by no longer permitting the current price test restrictions on short selling. We believe that the amendments will not harm efficiency because the empirical evidence from the Pilot Results shows that the Pilot did not adversely impact price efficiency. Further, market participants will no longer have to apply different price tests to securities trading in different markets. In addition, we believe that the amendments will not have an adverse impact on capital formation because the empirical evidence from the Pilot Results shows that the price tests have very little impact on overall market quality and, particularly in large securities, may be harmful to overall market quality. We believe that the amendments will promote competition among exchanges and other market centers because market participants will no longer be able to select a market on which to execute a short sale based on the applicability of price test restrictions. The amendments will remove a purported competitive disadvantage experienced by some market centers because market participants will no longer route orders to avoid application of a market center's price test. Nor will market centers that do not have a price test be able to use that factor to attract order flow away from market centers that have a price test. Moreover, the amendments will level the playing field for all market participants by requiring that no price test shall apply to any short sale in any security in any market. 126 126 Although we recognize there could conceivably be a need in the future for SROs to propose new price test restrictions, in considering whether to approve any such proposals, the Commission would, among other things, determine whether or not such proposals are consistent with the objectives of today's amendments. Additionally, in order for an SRO to adopt new price test restrictions pursuant to Section 19(b) of the Exchange Act, an exemption from the provisions of Rule 201 pursuant to Section 36 of the Exchange Act would be necessary. VIII. Final Regulatory Flexibility Analysis The Commission has prepared the Final Regulatory Flexibility Analysis (“FRFA”), in accordance with the provisions of the Regulatory Flexibility Act (“RFA”), 127 regarding the proposed amendments to Rule 10a-1 and Regulation SHO, Rules 200 and 201, under the Exchange Act. 127 5 U.S.C. 604. A. Need for the Amendments Based on the Pilot Results as well as our review of the status of short sale regulation in the context of the current application of Rule 10a-1 and other price tests, including the exceptions to the current rules and grants of relief from Rule 10a-1 by the Commission for a wide range of short selling activities, we believe it is necessary to remove Rule 10a-1 and to amend Regulation SHO to provide that no price test, including any price test by any SRO, shall apply to short selling in any security. In addition, the amendments will prohibit any SRO from having a price test. These amendments are designed to modernize and simplify short sale regulation in light of current short selling systems and strategies used in the marketplace, while providing greater regulatory consistency to short selling. We are also removing the “short exempt” marking requirement of Regulation SHO because this requirement only applies if a seller is relying on an exception to a price test. B. Significant Issues Raised by Public Comment The Initial Regulatory Flexibility Analysis (“IRFA”) appeared in the Proposing Release. 128 We requested comment in the IRFA on the impact the proposed amendments would have on small entities and how to quantify the impact. We received two comment letters generally discussing the impact of the proposed amendments to remove price test restrictions on small issuers, 129 which we discuss below. 128 *See* Proposing Release, 71 FR at 75081-75082. 129 *See* IASBDA Letter, *supra* note 39; Amex Letter, *supra* note 44. IASBDA expressed concern that the proposed amendments might “unnecessarily force small issuers to accept an environment which is most unkind to their securities.” *See* IASBDA Letter, *supra* note 39. In its letter, Amex advocated for additional study of the effects of price test restrictions on small capitalization securities before the Commission removes such restrictions on these securities. *See* Amex Letter, *supra* note 44. C. Small Entities Subject to the Rule The entities covered by the amendment will include small broker-dealers, small businesses, and any investor who effects a short sale that qualifies as a small entity. Although it is impossible to quantify every type of small entity that may be able to effect a short sale in a security, Paragraph (c)(1) of Rule 0-10 under the Exchange Act 130 states that the term “small business” or “small organization,” when referring to a broker-dealer, means a broker or dealer that had total capital (net worth plus subordinated liabilities) of less than $500,000 on the date in the prior fiscal year as of which its audited financial statements were prepared pursuant to § 240.17a-5(d); and is not affiliated with any person (other than a natural person) that is not a small business or small organization. In the IRFA in the Proposing Release, we estimated that as of 2005, there were approximately 910 broker-dealers that qualified as small entities as defined above. 131 Presently, we estimate that as of 2006 there are approximately 894 broker-dealers that qualify as small entities, as defined above. 132 130 17 CFR 240.0-10(c)(1). 131 These numbers are based on OEA's review of 2005 FOCUS Report filings reflecting registered broker-dealers. This number does not include broker-dealers that are delinquent on FOCUS Report filings. 132 These numbers are based on OEA's review of 2006 FOCUS Report filings reflecting registered broker-dealers. This number does not include broker-dealers that are delinquent in their FOCUS Report filings. Paragraph
(e)of Rule 0-10 under the Exchange Act 133 states that the term “small business” or “small organization,” when referring to an exchange, means any exchange that:
(1)Has been exempted from the reporting requirements of Rule 11Aa3-1 under the Exchange Act; and
(2)is not affiliated with any person (other than a natural person) that is not a small business or small organization, as defined by Rule 0-10. No national securities exchanges are small entities because none meets these criteria. There is one national securities association
(NASD)that is subject to these amendments. NASD is not a small entity as defined by 13 CFR 121.201. 133 17 CFR 240.0-10(e). Any business, however, regardless of industry, will be subject to the amendments if it effects a short sale. The Commission believes that, except for the broker-dealers discussed above, an estimate of the number of small entities that fall under the amendments is not feasible. D. Reporting, Recordkeeping, and Other Compliance Requirements We recognize that the amendments may impose some new or additional reporting, recordkeeping, or compliance costs on any affected party, including broker-dealers, that are small entities. As discussed above, three commenters noted potential reprogramming costs that market participants may incur if the Commission does not act on the proposed amendments prior to the Regulation NMS Compliance Date. In meeting the Regulation NMS Compliance Date, market participants have been developing new systems or modifying existing systems to be Regulation NMS-compliant. In their comment letters, STA, UBS, and SIFMA urged the Commission to act on the proposed amendments prior to the Regulation NMS Compliance Date. 134 In its letter, STA noted that “[i]f the SEC's proposal is implemented subsequent to the operation of Regulation NMS to certain securities, it will require industry-wide re-programming of Regulation NMS compliance systems during the infancy of the Rules implementation, a most sensitive time period. As a result, the immediate success of Regulation NMS could be compromised.” 135 As discussed in Section IX below, these amendments will be effective immediately upon publication in the **Federal Register** . Thus, market participants will have notice and time prior to the Regulation NMS Compliance Date to reprogram their systems without regard to current price test restrictions. 134 *See* STA Letter, *supra* note 23; UBS Letter, *supra* note 23; SIFMA Letter, *supra* note 23. 135 STA Letter, *supra* note 23. In order to comply with the Pilot when it became effective on May 2, 2005, small entities needed to modify their systems and surveillance mechanisms to exempt those securities included in the Pilot from current price test restrictions. Thus, the systems and surveillance mechanisms required to comply with the amendments are already in place. We believe that any necessary additional systems and surveillance changes will be small because, due to the Pilot, systems are currently programmed to exempt many securities from price test restrictions prior to the close of the consolidated tape and exempt all securities from price test restrictions between the close of the consolidated tape and the open of the consolidated tape on the following day. We believe that any reprogramming costs or updating of surveillance mechanisms associated with the removal of the “short exempt” marking requirement will be minimal because sales of securities will continue to be required to be marked either “long” or “short.” The amendments will merely remove an alternative marking requirement. E. Agency Action To Minimize the Effect on Small Entities The RFA directs the Commission to consider significant alternatives that will accomplish the stated objective, while minimizing any significant adverse impact on small entities. Pursuant to Section 3(a) of the RFA, 136 the Commission considered the following types of alternatives in connection with the amendments:
(a)The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities;
(b)the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for small entities;
(c)the use of performance rather than design standards; and
(d)an exemption from coverage of the rule, or any part thereof, for small entities. 136 5 U.S.C. 603(c). The amendments are intended to modernize and simplify price test regulation by removing restrictions on the execution prices of short sales contained in current price tests, such as Rule 10a-1. As such, we believe that imposing different compliance requirements, and possibly a different timetable for implementing compliance requirements, for small entities would undermine the goal of the amendments. In particular, the request by IASBDA and Amex for a gradual phase-in of the amendments to permit price test restrictions to continue for small securities pending further study, would cause considerable uncertainty, such as how to treat securities that episodically move between the definition of small and large capitalization. Moreover, we do not believe that such an approach would provide new results relevant to smaller securities. As we noted in the Proposing Release, while there is some evidence supporting the application of price test restrictions to smaller securities, the evidence is not strong enough to warrant its continuation in any subset of securities. 137 In addition, we note that many smaller or thinly-traded securities, such as Nasdaq Capital Market securities, and securities quoted on the OTCBB and pink sheets, are not currently subject to any price test restrictions. 137 *See* Proposing Release, 71 FR at 75076. *See also, supra,* note 65 (discussing a prior study by academics of price test restrictions on smaller securities). Thus, we have concluded that it would be inconsistent with the goal of the amendments to phase-in small capitalization securities or to further clarify, consolidate, or simplify the amendments for small entities. Finally, the amendments will impose performance standards rather than design standards. IX. Administrative Procedure Act Section 553(d) of the Administrative Procedure Act (“APA”) generally provides that a substantive rule may not be made effective less than 30 days after notice is published in the **Federal Register** . 138 Two exceptions to the 30-day requirement, among others, are
(i)for a substantive rule that relieves a restriction, and
(ii)an agency's finding of good cause for providing a shorter effective date. 139 138 5 U.S.C. 553(d). 139 *See id.* at 553(d)(1), 553(d)(3). The amendments will remove all current restrictions on the price at which a security can be sold short. Because the amendments relieve a restriction on short selling, these amendments may be made effective less than 30 days after notice is published in the **Federal Register** . In addition, we note that a number of commenters to the proposed amendments discussed potential reprogramming costs that market participants may incur if the proposed amendments are not effective prior to the Regulation NMS Compliance Date. 140 In meeting the Regulation NMS Compliance Date, market participants have been developing new systems or modifying existing systems to be Regulation NMS-compliant. Immediate effectiveness of these amendments is necessary to provide market participants with sufficient notice and time prior to the Regulation NMS Compliance Date to reprogram their systems without regard to current price test restrictions. 140 *See, e.g.,* STA Letter, *supra* note 23; UBS Letter, *supra* note 23; SIFMA Letter, *supra* note 23. Specifically, immediate effectiveness of the amendments is expected to alleviate any necessity for market participants to, in the course of instituting programming changes to meet the requirements of Regulation NMS, program systems to comply with price test restrictions, only to be required to reverse such programming shortly thereafter. Absent immediate effectiveness, market participants may expend unnecessary time and resources programming systems to comply with price test restrictions that are being removed. Thus, the Commission finds that there is good cause for making the amendments effective immediately upon publication in the **Federal Register** . X. Statutory Authority and Text of the Amendments Pursuant to the Exchange Act and, particularly, Sections 2, 3(b), 6, 9(a), 10(a), 11A, 15, 15A, 17, 17A, 23(a) thereof, 15 U.S.C. 78b, 78c(b), 78f, 78i(a), 78j(a), 78k-1, 78o, 78o-3, 78q, 78q-1, 78w(a), the Commission is removing Rule 10a-1, § 240.10a-1, and amending Regulation SHO, §§ 242.200 and 201. Text of the Amendments to Rule 10a-1 and Regulation SHO List of Subjects in 17 CFR Parts 240 and 242 Brokers, Fraud, Reporting and recordkeeping requirements, Securities. For the reasons set out in the preamble, Title 17, Chapter II, of the Code of Federal Regulations is amended as follows. PART 240—GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934 1. The authority citation for part 240 continues to read in part as follows: Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78k, 78k-1, 78 *l* , 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78 *ll* , 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 *et. seq.* ; and 18 U.S.C. 1350, unless otherwise noted. § 240.10a [Removed] 2. Section 240.10a-1 is removed and reserved and the undesignated heading preceding the section is removed. PART 242—REGULATIONS M, SHO, ATS, AC AND NMS, AND CUSTOMER MARGIN REQUIREMENTS FOR SECURITY FUTURES 3. The authority citation for part 242 continues to read as follows: Authority: 15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78g(c)(2), 78i(a), 78j, 78k-1(c), 78 *l* , 78m, 78n, 78o(b), 78o(c), 78o(g), 78q(a), 78q(b), 78q(h), 78w(a), 78dd-1, 78mm, 80a-23, 80a-29, and 80a-37. 4. Section 242.200 is amended by revising the introductory text of paragraph
(g)and removing and reserving paragraph (g)(2) to read as follows: § 242.200 Definition of “short sale” and marking requirements.
(g)A broker or dealer must mark all sell orders of any equity security as “long” or “short.” 5. Section 242.201 is added to read as follows: § 242.201 Price test.
(a)No short sale price test, including any short sale price test of any self-regulatory organization, shall apply to short sales in any security.
(b)No self-regulatory organization shall have any rule that is not in conformity with, or conflicts with, paragraph
(a)of this section. Dated: June 28, 2007. By the Commission. J. Lynn Taylor, Assistant Secretary. [FR Doc. E7-12868 Filed 7-2-07; 8:45 am] BILLING CODE 8010-01-P SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 402 [Regulation No. 2; Docket No.—SSA-2007-0020] RIN 0960-AG46 Technical Amendments To Correct Cross-References; Correction AGENCY: Social Security Administration. ACTION: Correcting amendments. SUMMARY: This document contains corrections to the final regulations published in the **Federal Register** of Thursday, March 29, 2007 (72 FR 14669). The regulations were intended to correct incorrect cross-references in the CFR. DATES: *Effective Date:* Effective on July 3, 2007. FOR FURTHER INFORMATION CONTACT: Rosemarie A. Greenwald, Social Insurance Specialist, Office of Regulations, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401. Call
(410)966-7813 or TTY 1-800-325-0778 for information about these correcting amendments. For information on eligibility or filing for benefits, call our national toll-free numbers 1-(800)-772-1213 or TTY 1-(800)-325-0778. You may also contact Social Security online at *http://www.socialsecurity.gov/* . SUPPLEMENTARY INFORMATION: Background The final regulations published March 29, 2007, changed cross-references in 20 CFR 402.35(b)(2) from §§ 404.984(b), 410.610c(b) and 416.1484(b) to §§ 404.985(c), 410.670c(b) and 416.1485(c), respectively. However, two of the new cross-references, §§ 404.985(c) and 416.1485(c) should have been §§ 404.985(b) and 416.1485(b). In addition, we omitted another set of corrections in the same CFR section. The next-to-last sentence incorrectly cites 20 CFR 404.984, 410.610, and 416.1484, which should correctly read as 20 CFR 404.985(c), 410.670c, and 416.1485(c), respectively. Need for Correction As published, the final regulations contained errors at 20 CFR 402.35(b)(2). Therefore, we are changing the last two sentences of that section to reflect correct CFR citations and cross-references. (Catalog of Federal Domestic Assistance Programs Nos. 96.001 Social Security—Disability Insurance; 96.002 Social Security—Retirement Insurance; 96.004 Social Security—Survivors Insurance and 96.006 Supplemental Security Income.) List of Subjects in 20 CFR Part 402 Administrative practice and procedure; Freedom of information. Dated: June 27, 2007. Paul Kryglik, Acting SSA Regulations Officer. Accordingly, part 402 of chapter III of title 20 of the Code of Federal Regulations is corrected by making the following correcting amendments: PART 402—AVAILABILITY OF INFORMATION AND RECORDS TO THE PUBLIC 1. The authority citation for part 402 continues to read as follows: Authority: Secs. 205, 702(a)(5), and 1106 of the Social Security Act; (42 U.S.C. 405, 902(a)(5), and 1306); 5 U.S.C. 552 and 552a; 8 U.S.C. 1360; 18 U.S.C. 1905; 26 U.S.C. 6103; 30 U.S.C. 923(b); 31 U.S.C. 9701; E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p. 235. 2. Section 402.35 is being corrected by revising the second and third sentences of paragraph (b)(2) to read as follows: § 402.35 Publication.
(b)* * *
(2)* * * They are binding on all components of the Social Security Administration, except with respect to claims subject to the relitigation procedures established in 20 CFR 404.985(c), 410.670c, and 416.1485(c). For a description of Social Security Acquiescence Rulings, see 20 CFR 404.985(b), 410.670c(b), and 416.1485(b) of this title. [FR Doc. E7-12828 Filed 7-2-07; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 880 [Docket No. 2007N-0198 ] Medical Devices; General Hospital and Personal Use Devices; Classification of the Filtering Facepiece Respirator for Use by the General Public in Public Health Medical Emergencies AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration
(FDA)is classifying the filtering facepiece respirator for use by the general public in public health medical emergencies into class II (special controls). The agency is classifying these devices into class II (special controls) in order to provide a reasonable assurance of the safety and effectiveness of these devices and is specifying what those special controls are. Elsewhere in this issue of the **Federal Register** , FDA is announcing the availability of a guidance document entitled, “Guidance for Industry and Food and Drug Administration Staff; Class II Special Controls Guidance Document: Filtering Facepiece Respirator for Use by the General Public in Public Health Medical Emergencies.” This guidance document will serve as one of the special controls, along with certification of the respirator by the National Institute for Occupational Safety and Health (NIOSH) in accordance with its regulations for non-powered air-purifying particulate respirators, found in 42 CFR part 84, as specified in the classification regulation. DATES: This rule is effective August 2, 2007. The classification was effective May 8, 2007. FOR FURTHER INFORMATION CONTACT: Sheila A. Murphey, Center for Devices and Radiological Health (HFZ-480), Food and Drug Administration, 9200 Corporate Blvd., Rockville, MD 20850, 240-276-3700. SUPPLEMENTARY INFORMATION: I. What is the Background of this Rulemaking? In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the Medical Device Amendments of 1976 (the amendments), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless the device is classified or reclassified into class I or class II, or FDA issues an order finding the device to be substantially equivalent, in accordance with 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 predicate 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 FDA's regulations. Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1) of the act, request FDA to classify the device under the criteria set forth in section 513(a)(1) of the act. FDA shall, within 60 days of receiving such a request, classify the device by written order. This classification shall be the initial classification of the device type. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the **Federal Register** announcing such classification (section 513(f)(2) of the act). In accordance with section 513(f)(1) of the act, FDA issued an order on August 30, 2006, classifying the two 3M filtering facepiece respirators intended for use by the general public in public health medical emergencies (designated at that time as the 3M TM N95 Home Respirator with Fluid Resistance and 3M TM N95 Home Respirator) in class III, because each device was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device that was subsequently reclassified into class I or class II. On October 3, 2006, 3M Inc. submitted a petition requesting initial classification of these devices under section 513(f)
(2)of the act. The manufacturer recommended that the devices be classified into class II (Ref. 1). In response to FDA requests for additional information, 3M supplemented its petition on March 22, 2007. In accordance with section 513(f)
(2)of the act, FDA reviewed the petition in order to classify the devices under the criteria for classification set forth in 513(a)(1) of the act. Devices are to be classified into class II if general controls, by themselves, are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the petition and its supplements, FDA determined that the 3M TM filtering facepiece respirator devices, now known as the 3M TM 8612F Respirator for Use by the General Public in Public Health Medical Emergencies and 3M TM 8670F Respirator for Use by the General Public in Public Health Medical Emergencies can be classified into class II with the establishment of special controls. FDA believes that special controls, in addition to general controls, are adequate to provide reasonable assurance of the safety and effectiveness of the device and that there is sufficient information to establish special controls to provide such assurance. The device is assigned the generic name “Filtering Facepiece Respirator for use by the General Public in Public Health Medical Emergencies” and is identified as a device that is a disposable half-facepiece non-powered air-purifying particulate respirator intended for use to cover the nose and mouth of the wearer to help reduce wearer exposure to pathogenic biological airborne particulates during a public health medical emergency. The device is made of polymeric materials and is intended to fit closely to the face and to function by filtering particulate material. FDA believes that special controls are needed to help address the following issues affecting the safety and effectiveness of the filtering facepiece respirator for use by the general public in public health medical emergencies. A. Assuring Filtration and Breathability For this type of respirator to reduce wearer exposure to pathogenic biological airborne particulates, it must be made of filter material that is highly efficient in filtering such particles. At the same time, because this type of device depends on the wearer's normal respiration to draw ambient air through the respirator materials and into the lungs, the respirator material must also permit adequate respiration. B. Assuring Proper Fit The device must fit closely to the wearer's face without any gaps that would allow air to reach the wearer's respiratory tract without passing through the filter material. Otherwise, improper fit of the respirator could result in inhalation of pathogenic biological airborne particulates carried in air that passes around the sides of the device. C. Avoiding Adverse Skin Reaction Reducing wearer exposure to pathogenic biological airborne particulates requires that the device be properly fitted to the face. If the respirator material in contact with the skin is not biocompatible, it may cause adverse reactions such as redness, pruritus, and skin irritation. D. Assuring Proper Use While a filtering facepiece respirator for use by the general public in public health medical emergencies can help to reduce wearer exposure to pathogenic biological airborne particulates in a public health medical emergency where there is a serious risk from such exposure, these devices do not provide complete protection against infection. Even when used correctly and consistently, a filtering facepiece respirator does not eliminate all respiratory exposure, and for many pathogens that may be transmitted through airborne particulates, transmission via other routes is also possible. (Because filtering facepiece respirators for use by the general public in public health medical emergencies have not been tested against specific microorganisms, the extent of protection to be expected against specific pathogens is not known and would vary with particular conditions in any event.) The respirator should always be used in conjunction with other infection control and respiratory protection measures. In addition, because the outside of the respirator may be contaminated with infectious materials during normal use, proper handling and disposal is important to avoid the respirator itself becoming a vector of transmission of infectious agents. Further, failure of the user to assure proper fit of the respirator could result in exposure to pathogenic biological airborne particles. Certain populations such as children will be unlikely to achieve a proper fit because respirators are designed and sized for adults. For users with certain underlying cardiac, pulmonary or related medical conditions, achieving the fit necessary to help reduce their exposure to pathogenic biological airborne particulates may exacerbate their underlying medical conditions raising a concern about their safe use for these populations. Finally, these respirators have not been established to be safe or effective if reused, and use of a single respirator by multiple users may result in the respirator itself becoming a vector of transmission. To address these issues, the class II special controls guidance document provides recommendations for labeling and for information to be provided to meet premarket notification (510(k)) submission requirements for the device, including recommendations for fit testing and biocompatibility testing. In addition, this classification regulation specifies another special control, certification of the respirator by NIOSH as a non-powered air-purifying particulate respirator with a minimum filtration efficiency classification of N95, in accordance with 42 CFR part 84. The respirators that were the subject of the initial classification order described in this document and that are the initial legal predicate devices for this new device classification were certified by NIOSH under these requirements, as revised as of October 1, 2006. FDA's determination that NIOSH certification is an appropriate special control to help assure the safety and effectiveness of the respirator for its intended use under this classification rests on the assurance of filtration efficiency and breathability provided by NIOSH certification under these requirements, as effective on May 8, 2007, the date of FDA's classification order. Should NIOSH revise the requirements for certification in the future, FDA will evaluate whether certification under such revised NIOSH regulations is an appropriate special control for devices within this classification and may revise FDA's regulation using appropriate procedures. FDA believes that these special controls, designated in this rule, in addition to general controls, address the issues identified previously and provide reasonable assurance of the safety and effectiveness of the device type. Thus, on May 8, 2007, FDA issued an order to the petitioner classifying the device type into class II. FDA is codifying this classification at 21 CFR 880.6260. Following the effective date of the final classification rule, manufacturers will need to demonstrate NIOSH certification of any filtering facepiece respirator for use by the general public in public health medical emergencies, as set forth in 21 CFR 880.6260(b)(1), and address the issues covered in the special controls guidance. With respect to the issues addressed only in the special control guidance, however, the manufacturer need only show that its device meets the recommendations of the guidance or in some other way provides equivalent assurance of safety and effectiveness. Section 510(m) of the act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the act, if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For filtering facepiece respirators for use by the general public in public health medical emergencies, however, FDA has determined that premarket review of fit performance data, labeling, and other requirements as outlined in 21 CFR 807.87, is necessary to provide reasonable assurance that acceptable levels of performance for both safety and effectiveness will be addressed before marketing clearance. Thus, persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device type. II. What is the Environmental Impact of This Rule? The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Thus, neither an environmental assessment nor an environmental impact statement is required. III. What is the Economic Impact of This Rule? FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), 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 as defined by 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. Because classification of this device into class II will relieve manufacturers of the cost of complying with the premarket approval requirements of section 515 of the act (21 U.S.C. 360e), and may permit small potential competitors to enter the marketplace by lowering their costs, 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 any 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. IV. Does This Final Rule Have Federalism Implications? 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 Executive order and, consequently, a federalism summary impact statement is not required. V. How Does This Rule Comply with the Paperwork Reduction Act of 1995? This final rule contains no new information collection provisions but refers to NIOSH regulations in 42 CFR part 84 that contain information collection provisions that have been reviewed and approved by the Office of Management and Budget
(OMB)under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), under OMB Control No. 0920-0109. Based on information from NIOSH regarding submissions for respirator certification received in the past 3 years, FDA concludes that specification of NIOSH certification as a special control will not result in the collection of any additional information by NIOSH not already covered by NIOSH's burden estimates. This final rule also designates a guidance document as a special control. Elsewhere in this issue of the **Federal Register** , FDA is publishing a notice announcing the availability of that guidance document, “Class II Special Controls Guidance Document: Filtering Facepiece Respirators for Use by the General Public in Public Health Medical Emergencies,” which contains a Paperwork Reduction Act analysis for that guidance. VI. What References are on Display? The following references have been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. 1. Petition from 3M. 2. 42 CFR part 84, as revised as of October 1, 2006. List of Subjects in 21 CFR part 880 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 880 is amended as follows: PART 880—GENERAL HOSPITAL AND PERSONAL USE DEVICES 1. The authority citation for 21 CFR part 880 continues to read as follows: Authority: 21 U.S.C. 351, 360, 360c, 360e, 360j, 371. 2. Section 880.6260 is added to subpart G to read as follows: § 880.6260 Filtering facepiece respirator for use by the general public in public health medical emergencies.
(a)*Identification* . A filtering facepiece respirator for use by the general public in public health medical emergencies is a device that is a disposable half-facepiece non-powered air-purifying particulate respirator intended for use to cover the nose and mouth of the wearer to help reduce wearer exposure to pathogenic biological airborne particulates during a public health medical emergency. The device is made of polymeric materials and is intended to fit closely to the face and to function by filtering particulate material.
(b)*Classification* . Class II (special controls). The special controls are:
(1)Certification by the National Institute for Occupational Safety and Health (NIOSH) as a non-powered air- purifying particulate respirator with a minimum filtration efficiency classification of N95, in accordance with 42 CFR part 84.
(2)The FDA guidance document entitled: “Guidance for Industry and Food and Drug Administration Staff; Class II Special Controls Guidance Document: Filtering Facepiece Respirator for use by the General Public in Public Health Medical Emergencies.” See § 880.1(e) for information on obtaining a copy of this guidance document. Dated: June 22, 2007. Linda S. Kahan, Deputy Director, Center for Devices and Radiological Health. [FR Doc. E7-12789 Filed 7-2-07; 8:45 am] BILLING CODE 4160-01-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 63 [EPA-HQ-OAR-2006-0510; FRL-8334-4] RIN 2060-AO46 Amendments to National Emission Standards for Hazardous Air Pollutants for Primary Copper Smelting and Secondary Copper Smelting Area Sources AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final rule. SUMMARY: EPA is taking direct final action to amend the national emission standards for primary copper smelting area sources and secondary copper smelting area sources published on January 23, 2007. The amendments to the national emission standards for primary copper smelting area sources clarify when plants must exhaust gases to a control device and what control devices may be used for this requirement; numbering errors are also corrected. The amendments to the national emission standards for secondary copper smelting area sources clarify the date which defines a new copper smelter and correct a cross-referencing error. DATES: This direct final rule is effective on October 1, 2007 without further notice, unless EPA receives adverse comment by August 2, 2007. If the effective date is delayed, timely notice will be published in the **Federal Register** . 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 by Docket ID No. EPA-HQ-OAR-2006-0510 by one of the following methods: • *http://www.regulations.gov:* Follow the on-line instructions for submitting comments. • *E-mail: a-and-r-docket@epa.gov.* • *Fax:*
(202)566-1741. • *Mail:* National Emission Standards for Hazardous Air Pollutants for Four Area Source Categories Docket, Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. Please include a total of two copies. • *Hand Delivery:* EPA Docket Center, Public Reading Room, EPA West, Room 3334, 1301 Constitution Ave., NW, Washington, DC 20460. 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-2006-0510. 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* Web site 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 form. Publicly available docket materials are available either electronically in *www.regulations.gov* or in hard copy at the National Emission Standards for Hazardous Air Pollutants for Four Area Source Categories Docket, EPA/DC, EPA West, Room 3334, 1301 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: Ms. Sharon Nizich, Sector Policies and Programs Division, Office of Air Quality Planning and Standards (D243-02), Environmental Protection Agency, Research Triangle Park, North Carolina 27711, telephone number:
(919)541-2825; fax number:
(919)541-3207; e-mail address: *nizich.sharon@epa.gov.* SUPPLEMENTARY INFORMATION: The information presented in this preamble is organized as follows: I. Why is EPA using a direct final rule? II. Does this action apply to me? III. Where can I get a copy of this document? IV. What should I consider as I prepare my comments to EPA? V. What are the changes to the NESHAP for primary copper smelting and secondary copper smelting area source? A. NEHSAP for Primary Copper Smelting Area Sources B. NESHAP for Secondary Copper Smelting Area Sources VI. 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 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations K. Congressional Review Act I. Why is EPA using a direct final rule? EPA is publishing the rule without a prior proposed rule because we view this as a noncontroversial action and anticipate no adverse comment. The amendments to the national emission standards for primary copper smelting area sources (40 CFR part 63, subpart EEEEEE) and secondary copper smelting area sources (40 CFR part 63, subpart FFFFFF) consist of technical and editorial corrections that do not make material changes to the rule requirements. 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 these amendments if adverse comments are received on this direct final rule. 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 the rule, see the ADDRESSES section of this document. If EPA receives adverse comment, we will publish a timely withdrawal in the **Federal Register** informing the public that this direct final rule will not take effect. We would address all comments in any subsequent final rule based on the proposed rule. II. Does this action apply to me? The regulated categories and entities potentially affected by the final rule include: Category NAICS code 1 Examples of regulated entities Industry 331411 Primary copper smelting area source facilities that produce copper from copper sulfide ore concentrates using pyrometallurgical techniques. 331423 Area source facilities that process copper scrap in a blast furnace and converter or use another pyrometallurgical purification process to produce anode copper from copper scrap, including low-grade copper scrap. 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 affected by this action. To determine whether your facility is regulated by this action, you should examine the applicability criteria in 40 CFR 63.11146 of subpart EEEEEE (National Emission Standards for Hazardous Air Pollutants (NESHAP) for Primary Copper Smelting Area Sources) or 40 CFR 63.11153 of subpart FFFFFF (NESHAP for Secondary Copper Smelting Area Sources). If you have any questions regarding the applicability of this action to a particular entity, consult either the air permit authority for the entity or your EPA regional representative as listed in 40 CFR 63.13 of subpart A (General Provisions). III. Where can I get a copy of this document? In addition to being available in the docket, an electronic copy of this final action will also be available on the Worldwide Web
(WWW)through the Technology Transfer Network (TTN). Following signature, a copy of this final action will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules at the following address: *http://www.epa.gov/ttn/oarpg/.* The TTN provides information and technology exchange in various areas of air pollution control. IV. What should I consider as I prepare my comments to EPA? Do not submit information containing CBI to EPA through *www.regulations.gov* or e-mail. Send or deliver information identified as CBI only to the following address: Roberto Morales, OAQPS Document Control Officer (C404-02), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, North Carolina 27711, Attention Docket ID No. EPA-HQ-OAR-2006-0510. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. V. What are the changes to the NESHAP for primary copper smelting and secondary copper smelting area source? A. NESHAP for Primary Copper Smelting Area Sources On January 23, 2007 (72 FR 2944), we issued the NESHAP for Primary Copper Smelting Area Sources (40 CFR part 63, subpart EEEEEE). The final rule establishes air emission control requirements for new and existing primary copper smelters that use continuous or batch smelting technologies. The final rule makes two technical clarifications to this NESHAP in paragraph (a)(2)(ii) of 40 CFR 63.11148 (What are the standards and compliance requirements for existing sources using batch copper converters?). The existing provision states that “during periods when no copper ore concentrate feed is charged to or molten material tapped from the smelting vessel but the smelting vessel remains in operation to temporarily hold molten material in the vessel before resuming copper production, you must exhaust the process off gas from the smelting vessel to an electrostatic precipitator or baghouse prior to discharge to the atmosphere.” As stated, this provision contains conflicting language because molten materials cannot be tapped from and held in a smelting vessel at the same time. Accordingly, we are removing the phrase “or molten materials tapped from” to clarify that the operating conditions when the owner or operator must exhaust the process off gas from a smelting vessel to an appropriate particulate matter
(PM)control device is when no copper ore concentrate feed is charged to the smelting vessel but the smelting vessel remains in operation to temporarily hold molten material in the vessel before resuming copper production. In addition, we are adding to this same provision in paragraph (a)(2)(ii) of 40 CFR 63.11148 “wet scrubber” as one of the types of PM control devices listed. Wet scrubbers are PM control devices that are used at some primary copper smelters for controlling PM emissions from smelting vessels during temporary holding operations. As we mentioned in the preamble to this NESHAP (72 FR 2932, 2938), we developed the standards for existing primary copper area source smelters that use batch technology based on operations at batch converting facilities that we had determined to be effectively controlling their hazardous air pollutant emissions. One of these facilities uses a wet scrubber to control PM emissions from smelting vessels during the temporary holding operations described above. Having established the generally available control technology based on the use of a wet scrubber, we clearly did not intend to then exclude wet scrubbers from the types of PM control devices that affected owners and operators can use to comply with the rule requirement, nor would we have a basis for such exclusion. Accordingly, we are correcting 40 CFR 63.11148(a)(2)(ii) to include wet scrubbers as one of the types of control devices that can be used to meet the requirement in that provision. We are also correcting numbering errors in paragraph
(c)of 40 CFR 63.11150 (What general provisions apply to this subpart?). Currently paragraph
(c)contains two paragraphs numbered as (c)(3), and the introductory text to paragraph
(c)makes a reference to four instead of five paragraphs. Accordingly, in the paragraph
(c)introductory text, the reference to paragraphs (c)(1) through
(4)is corrected to (c)(1) through (5), and the numbering for paragraphs (c)(3), (4),
(5)is corrected. B. NESHAP for Secondary Copper Smelting Area Sources On January 23, 2007 (72 FR 2952), we issued the NESHAP for Secondary Copper Smelting Area Sources (40 CFR part 63, subpart FFFFFF). The final rule corrects the date in § 63.11153(b), which defines a new affected source under this NESHAP. Both section 112(a)(4) of the Clean Air Act and the part 63 General Provisions at 40 CFR 63.2 define a “new” affected source as one for which construction or reconstruction commenced on or after the date EPA first proposes a relevant emission standard under section 112. In § 63.11153(b), we inadvertently defined a new source as being constructed or reconstructed before the date of proposal of this NESHAP (October 6, 2006). Therefore, we are amending § 63.11153(b) to correctly state that a new affected source is one that is constructed or reconstructed on or after October 6, 2006. We are also correcting a cross reference in 40 CFR 63.11157(b)(5). Paragraph (b)(5) of this section is corrected to refer to the work practice standard in § 63.11155(g) instead of § 63.11157(g), which is not only an incorrect reference but is also nonexistent. VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Order. B. Paperwork Reduction Act This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 *et seq.* EPA is taking this action to make certain technical and editorial corrections in the NESHAP for primary and secondary copper smelting area sources. These corrections do not include any information collection requirement. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, disclose, or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. 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 part 63 are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act 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 would not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For the purposes of assessing the impacts of the area source NESHAP on small entities, small entity is defined as:
(1)A small business that meets the Small Business Administration size standards for small businesses at 13 CFR 121.201 (less than 1,000 employees for primary copper smelting and less than 750 employees for secondary copper smelting);
(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 the final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. We have determined that small businesses in these area source categories will not incur any adverse impacts because EPA is taking this action to make certain technical and editorial corrections in the NESHAP for primary and secondary copper smelting area sources, and these corrections do not create any new requirements or burdens. No costs are associated with these amendments to the two NESHAP. 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 by State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 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. EPA has determined that this action 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. EPA is taking this action to make certain technical and editorial corrections to the NESHAP for primary and secondary copper smelting area sources. No costs are associated with these corrections. Thus, this action is not subject to the requirements of sections 202 and 205 of the UMRA. In addition, EPA has determined that this action contains no regulatory requirements that might significantly or uniquely affect small governments. The technical and editorial corrections made through this action contain no requirements that apply to such governments, impose no obligations upon them, and will not result in any expenditures by them or any disproportionate impacts on them. Therefore, the final rule is not subject to 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” are 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.” The final rule does not have federalism implications. The final rule makes certain technical and editorial corrections to the NESHAP for primary and secondary smelting area sources. These final corrections do not impose requirements on State and local governments. They have no direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Thus, Executive Order 13132 does not apply to the final rule. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175 (65 FR 67249, November 6, 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.” The final rule does not have tribal implications, as specified in Executive Order 13175. The final rule makes certain technical and editorial corrections to the NESHAP for primary and secondary copper smelting area sources. These final corrections do not impose requirements on tribal governments. They also have no direct effects on tribal governments, 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. Thus, Executive Order 13175 does not apply to the final rule. G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that:
(1)Is determined to be “economically significant,” as defined under Executive Order 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, EPA 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 EPA. EPA interprets Executive Order 13045 as applying to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. The final rule is not subject to Executive Order 13045 because it makes technical and editorial corrections to NESHAP that are based on technology performance and not on health or safety risks. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use The final rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. I. National Technology Transfer Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) of 1995 (Pub. L. 104-113, section 12(d), 15 U.S.C. 272 note) directs EPA to use voluntary consensus standards
(VCS)in its regulatory activities, unless to do so would be inconsistent with applicable law or otherwise impractical. The VCS are technical standards ( *e.g.* , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by VCS bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency does not use available and applicable VCS. The final rule does not involve technical standards. Therefore, EPA did not consider the use of any VCS. J. 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 the 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 technical and editorial corrections in the final rule do not change the level of control required by the NESHAP. 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 these final rule amendments 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 final rule amendments 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). This final rule will be effective on October 1, 2007. List of Subjects in 40 CFR Part 63 Environmental protection, Air pollution control, Hazardous substances, Reporting and Recordkeeping requirements. Dated: June 27, 2007. Stephen L. Johnson, Administrator. For the reasons stated in the preamble, title 40, chapter I, part 63 of the Code of Federal Regulations is amended as follows: PART 63—[AMENDED] 1. The authority citation for part 63 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart EEEEEE—[Amended] 2. Section 63.11148 is amended by revising paragraph (a)(2)(ii) to read as follows: § 63.11148 What are the standards and compliance requirements for existing sources using batch copper converters?
(a)* * *
(2)* * *
(ii)During periods when no copper ore concentrate feed is charged to the smelting vessel but the smelting vessel remains in operation to temporarily hold molten material in the vessel before resuming copper production, you must exhaust the process off gas from the smelting vessel to an electrostatic precipitator, wet scrubber, or baghouse prior to discharge to the atmosphere. 3. Section 63.11150 is amended as follows: a. By revising paragraph
(c)introductory text. b. By redesignating paragraph (c)(4) as paragraph (c)(5). c. By redesignating the second paragraph (c)(3) as paragraph (c)(4). § 63.11150 What General Provisions apply to this subpart?
(c)If you own or operate an existing affected source subject to § 63.11148, your notification of compliance status required by § 63.9(h) must include the information specified in paragraphs (c)(1) through
(5)of this section. Subpart FFFFFF—[Amended] 4. Section 63.11153 is amended by revising the last sentence in paragraph
(b)to read as follows: § 63.11153 Am I subject to this subpart?
(b)* * * Your secondary copper smelter is a new affected source if you commenced constructed or reconstruction of the affected source on or after October 6, 2006. 5. Section 63.11157 is amended by revising paragraph (b)(5) to read as follows: § 63.11157 What General Provisions apply to this subpart?
(b)* * *
(5)This certification of compliance, signed by a responsible official, for the work practice standard in § 63.11155(g): “This facility has an approved monitoring plan in accordance with § 63.11155(g).” [FR Doc. E7-12847 Filed 7-2-07; 8:45 am] BILLING CODE 6560-50-P OFFICE OF MANAGEMENT AND BUDGET Office of Federal Procurement Policy 48 CFR Part 9903 Cost Accounting Standards Board; Time and Material and Labor Hour (T&M/LH) Contracts for Commercial Items AGENCY: Cost Accounting Standards Board, Office of Federal Procurement Policy, OMB. ACTION: Final rule. SUMMARY: The Office of Federal Procurement Policy, Cost Accounting Standards
(CAS)Board, has adopted, without change, a final rule to provide an exemption for T&M/LH contracts for commercial items. This rulemaking is authorized pursuant to Section 26 of the Office of Federal Procurement Policy Act. DATES: *Effective Date:* July 3, 2007. FOR FURTHER INFORMATION CONTACT: Laura Auletta, Manager, Cost Accounting Standards Board, 725 17th Street, NW., Room 9013, Washington, DC 20503 (telephone: 202-395-3256). SUPPLEMENTARY INFORMATION: A. Background On January 4, 2006, the Cost Accounting Standards Board published a proposed rule with request for comment (71 FR 313) for the purpose of providing an exemption for T&M/LH contracts for commercial items. The final rule adopts the proposed rule without change, thereby exempting T&M/LH contracts from CAS coverage. The Board's action is consistent with its previous actions to exempt those types of contracts permitted by Congress for the acquisition of commercial items. For example, on June 6, 1997, 1996, the Board issued a final rule implementing the Federal Acquisition Reform Act
(FARA)by providing an exemption from CAS for contracts for the acquisition of commercial items that are firm fixed price and fixed price with economic price adjustment (except when the adjustment is made on the basis of actual costs). At the time the CAS Board implemented this exemption, FAR limited the permissible contract types for the acquisition of commercial items to firm fixed price and fixed price with economic price adjustment. Effective February 12, 2007, FAR was amended to add T&M/LH contracts as an acceptable contract type for acquiring commercial items. This final rule is consistent with that FAR amendment. B. Public Comments The Board received six sets of public comments in response to the Proposed Rule. 1. Support Issuance of the Proposed Rule *Comment:* Three commenters supported the issuance of the final rule. *Response:* The Board thanks the commenters for their comments. *2. The Proposed Exemption Is Not Required by SARA* *Comment:* One commenter opined that the proposed exemption is not required by SARA and that the CAS Board made an “erroneous leap of logic to state that a CAS exemption exists when the statute provides that CAS is not mandatory.” *Response:* The Board believes an exemption is appropriate at this time in light of the recently promulgated final FAR rule that implements Section 1432 of the National Defense Authorization Act for Fiscal Year 2004
(SARA)(Pub. L. 108-136), which expressly authorized the use of time-and-materials (T&M) and labor-hour
(LH)contracts for the acquisition of certain categories of commercial services. Based on the provisions in the final FAR rule, the Board believes there is no significant benefit to the application of CAS to T&M/LH contracts for commercial items. The Board's specific rationale is discussed below. Under the FAR provisions, a T&M contract is composed of a “time” element and a “materials” element, while a LH contract is only composed of a “time” element. The time element in a T&M/LH contract is a fixed hourly rate by labor category. Under the FAR provisions for T&M/LH contracts for commercial items, these fixed hourly rates are determined based on adequate price competition without the submission of cost or pricing data. These fixed rates apply to both prime and subcontractor labor (except subcontracts for incidental services). These fixed hourly rates are akin to a firm fixed price contract awarded on the basis of adequate competition without submission of cost or pricing data. Such contracts are currently exempt from CAS requirements because there is no discernible benefit from applying CAS. The Board believes the same logic applies to these fixed hourly rates, and thus there is no benefit to applying CAS to the “time” element of a T&M/LH contract for commercial items. In regards to the materials element, the FAR provisions for T&M contracts for commercial items define materials as including indirect costs, direct materials, and other direct costs. Under these FAR provisions, indirect costs are reimbursed at a fixed amount established at the time of contract award, *i.e.* , there is no adjustment for indirect costs based on actual costs occurred. Thus, consistent with the prior discussion regarding the fixed hourly rate, there is no benefit to applying CAS to these fixed amounts. Conversely, the FAR provisions provide for reimbursement of direct materials and other direct costs based on actual costs. However, the FAR also includes some limitations on such reimbursement. For example, the FAR provides for reimbursement of the actual cost of these materials (less any rebates, refunds, or discounts received by the contractor that are identifiable to the contract) provided the contractor has made payments for the materials in accordance with the terms and conditions of the agreement or invoice, or makes these payments within 30 days of the submission of the Contractor's payment request to the Government. The FAR also requires the contractor to obtain the materials at the most advantageous prices available (with due regard to securing prompt delivery of satisfactory materials) and to give credit to the Government for cash and trade discounts, rebates, scrap, commissions, and other amounts that are identifiable to the contract. Furthermore, the FAR provision limits reimbursement of other direct costs to those cost elements specifically listed in the contract. Based on the above discussion, the Board believes the existing FAR provisions provide adequate coverage regarding the reimbursement of direct materials and other direct costs. As noted earlier, the remainder of the contract price/cost is based on fixed hourly rates and/or amounts established at the time of award based on adequate competition without the submission of cost or pricing data. Thus, the Board has concluded that it is appropriate to exempt T&M/LH contracts for commercial items from CAS coverage. The Board notes that this position is consistent with the Board's May 1992 Statement of Objectives, Policies and Concepts (“the cost of an accounting application should not exceed its benefit”). 3. T&M/LH Contracts Should Be Considered Cost-Reimbursement Type Contracts *Comment:* One commenter asserted that T&M/LH contracts should be considered cost-reimbursement type contracts because the premise that labor rates are fixed under a T&M/LH contract is faulty, and T&M/LH contracts “can never be subject to adequate price competition” because there is no price established at the time the contract is awarded. The commenter also opined that the proposed CAS exemption removes the protection against a contractor's double-counting of costs, the inclusion of unallowable costs and the inconsistent application of the accounting period under fixed T&M/LH contacts. *Response:* As noted in those comments, there are some elements of a T&M contract for commercial items that are fixed ( *e.g.* , fixed hourly rates and fixed indirect costs) and others that are based on actual cost ( *e.g.* direct materials and other direct costs). As such, it is necessary to analyze each aspect of the T&M/LH contract to determine if an exemption is appropriate, rather than trying to classify T&M contracts as “cost reimbursement” or “fixed price.” The Board's rationale in response to Comment 2 provides this necessary analysis. 4. CAS Applicability to Large Dollar Sole Source T&M/LH Contracts *Comment:* One commenter opined that the proposed rule should not exempt “very large dollar value T&M/LH task and delivery orders to be awarded on what is effectively a sole source basis without the protections afforded by CAS.” *Response:* The commenter asserts that this exemption may be used to exempt from CAS indefinite delivery/indefinite quantity contracts under which very large dollar value T&M/LH task or delivery orders are awarded on “effectively a sole source basis.” The statute and the FAR provisions both require that awards be made on the basis of adequate competition without the submission of cost or pricing data. As such, the Board does not believe the contract could be awarded on a sole source basis and still comply with the statutory and regulatory requirements. 5. T&M/LH Contract Exceeding CAS Applicability Thresholds Should Be Subject to Some Existing Standards *Comment:* One commenter suggests that the Board analyze which of its standards should be made applicable to T&M/LH contracts for the acquisition of commercial items or services, and take the necessary steps to ensure that these contracts comply with the selected standards. The commenter suggests that such contracts should be subject, at a minimum, to the provisions of CAS 401, 402, 405, 406, 407 and 411. *Response:* The Board disagrees with the commenter since the application of CAS to T&M/LH contracts for commercial items and services would serve no purpose, regardless of the dollar value of a particular contract. As discussed in the response to Comment 2 above, the “time” element of T&M/LH contracts is fixed price, not cost reimbursable, and the contracts are awarded based on adequate price competition. In addition, the FAR provides limitations on the reimbursement of direct materials and other direct costs that the Board believes adequately protect the Government's interest. The application of CAS to these T&M/LH contracts would be of no benefit to the Government since it would not affect the contract price (but, see last sentence of response to comment 6). 6. The Board Is Required To Issue Guidance *Comment:* One commenter asserted that the Board failed to implement the requirements of the Conference Report on Section 4205 of FARA because it did not issue guidance for the allocation of costs to commercial item contracts when other than firm fixed-price and fixed price economic price adjustment contracts are authorized. *Response:* The CAS Board recognizes the discussion in the Conference Report. However, the Board does not believe that guidance is needed at this time in light of the restrictions on the use of T&M and labor-hour contracts in the FAR. First, the Board believes that it was envisioned that reimbursable actual direct material and other direct costs will be incidental to the overall contract price. Second, the restrictions in the FAR provide the appropriate protections at this time. However, should the FAR requirements be revised or should direct material/other direct costs become more than incidental, the CAS Board will re-examine this issue. 7. CAS Applicability to Hybrid Contracts *Comment:* One commenter opined that “CAS should not be applicable to portions of a contract whose price is not based on certified cost or pricing data or whose payment is not based on actual costs incurred” and urged the Board to place hybrid contracts on their near-term agenda. The commenter also recommended granting contracting officers the authority to determine CAS applicability to selected portions of a contract. *Response:* Since the Board has determined that it is appropriate to exempt all T&M/LH contracts for commercial items from CAS coverage, the issue of whether a portion of the contract should be exempt is moot. The Board will consider commenter's recommendation when it formulates its future agenda actions. 8. Other Contract Types for Commercial Items *Comment:* Three commenters, while supporting the proposed revision, noted the difference between the permissible contract types specified at FAR 12.207 and the proposed CAS exemption. The commenters recommended that the Board adopt their interpretation of the exemption language contained at Section 4204 of the Clinger-Cohen Act (Pub. L. 104-106)—“contracts or subcontracts for the acquisition of commercial items.” *Response:* The Board did not deliberate this recommendation because it was outside the scope of the proposed rule to provide an exemption for T&M/LH contracts. The Board will consider this recommendation when it formulates future agenda items. C. Paperwork Reduction Act The Paperwork Reduction Act, Public Law 96-511, does not apply to this rulemaking, because this rule imposes no paperwork burden on offerors, affected contractors and subcontractors, or members of the public which requires the approval of OMB under 44 U.S.C. 3501, *et seq.* D. Executive Order 12866 and the Regulatory Flexibility Act The Board certifies that this rule will not have a significant effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because small businesses are exempt from the application of the Cost Accounting Standards. List of Subjects in 48 CFR Part 9903 Accounting, Government procurement. Paul A. Denett, Administrator, Office of Federal Procurement Policy. For the reasons set forth in this preamble, chapter 99 of title 48 of the Code of Federal Regulations is amended as set forth below: PART 9903—CONTRACT COVERAGE 1. The authority citation for part 9903 continues to read as follows: Authority: Pub. L. 100-679, 102 Stat. 4056, 41 U.S.C. 422. Subpart 9903.2—CAS Program Requirements 2. Section 9903.201-1(b)(6) is revised to read as follows: 9903.201-1 CAS Applicability.
(b)* * *
(6)Firm fixed-priced, fixed-priced with economic price adjustment (provided that price adjustment is not based on actual costs incurred), time-and-materials, and labor-hour contracts and subcontracts for the acquisition of commercial items. [FR Doc. E7-12888 Filed 7-2-07; 8:45 am] BILLING CODE 3110-01-P 72 127 Tuesday, July 3, 2007 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28381; Directorate Identifier 2006-NM-164-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 707 Airplanes, and Model 720 and 720B Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for all Boeing Model 707 Airplanes, and Model 720 and 720B series airplanes. This proposed AD would require revising the FAA-approved maintenance program by incorporating new airworthiness limitations
(AWLs)for fuel tank systems to satisfy Special Federal Aviation Regulation No. 88 requirements. This proposed AD would also require the initial performance of certain repetitive AWL inspections to phase in those inspection, and repair if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by August 17, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)917-6505; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28381; Directorate Identifier 2006-NM-164-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (66 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design ( *i.e.* , type certificate
(TC)and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: Single failures, single failures in combination with a latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this AD are necessary to reduce the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Relevant Service Information We have reviewed the following sections of Boeing 707/720 Airworthiness Limitations
(AWL)Document D6-7552-AWL, Original Release March 2006 (referred to hereafter as “D6-7552-AWL March 2006” or “document D6-7552-AWL,” depending upon the associated text): • Section B, “FUEL SYSTEMS AIRWORTHINESS LIMITATIONS” • Section C, “SYSTEM AWL PAGE FORMAT” • Section D, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS” Those sections of D6-7552-AWL March 2006 describe new airworthiness limitations
(AWLs)for fuel tank systems. The new AWLs include: • An AWL inspection, which is a periodic inspection of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCL), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require revising the FAA-approved maintenance program by incorporating the information in the service information described previously. The proposed AD also would require initial accomplishment of the repetitive inspection specified in the AWLs to phase in that repetitive inspection, and repair if necessary. Explanation of Compliance Time In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended by Boeing. Rework Required When Implementing AWLs Into an Existing Fleet The maintenance program revision for the fuel tank systems specified in paragraph
(g)of this proposed AD, which involves incorporating the information specified in D6-7552-AWL March 2006, would affect how operators maintain their airplanes. After doing the maintenance program revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before doing the maintenance program revision specified in paragraph
(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual
(CMM)applies to fuel pumps repaired after the AWLs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date the maintenance program revision specified in paragraph
(g)is done, except as provided by paragraph
(h)of this proposed AD. This proposed AD would require only the maintenance program revision specified in paragraph (g), and initial inspection specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph
(g)of this proposed AD would require revising the maintenance program by incorporating certain information specified in D6-7552-AWL March 2006. Paragraph
(g)also allows accomplishing the maintenance program revision in accordance with later revisions of D6-7552-AWL March 2006 as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. In addition, D6-7552-AWL March 2006 specifies that any deviations from the published AWL instructions, including AWL intervals, in document D6-7552-AWL must be approved by the Manager, Seattle ACO. Therefore, after doing the maintenance program revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector
(PMI)or Principal Avionics Inspector
(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions D6-7552-AWL March 2006 has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in D6-7552-AWL March 2006. without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in D6-7552-AWL March 2006, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised their applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions that are tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix A of D6-7552-AWL March 2006 contains a list of Air Transport Association
(ATA)sections for the revised maintenance manuals. Operators may wish to use the appendix as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. One AWL cited in D6-7552-AWL March 2006 is an inspection for which the applicable sections of the operating rules apply. The other AWLs are CDCCLs, which are tied to on-condition maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in D6-7552-AWL March 2006 refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referencing the CMMs by revision level in the applicable AWL for certain components rather than including information directly in document D6-7552-AWL because of the volume of that information. As a result, the Manager, Seattle ACO must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval
(PMA)approved parts), methods, techniques, and practices not contained in the CMMs need to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, operators that have developed pump repair/overhaul manuals must get them approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in D6-7552-AWL March 2006, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks can be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 213 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 76 airplanes of U.S. registry. The proposed actions would take about 8 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $48,640, or $640 per airplane. Authority for this Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28381; Directorate Identifier 2006-NM-164-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by August 17, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to all Boeing Model 707-100 long body, -200, -100B long body, and -100B short body series airplanes; Model 707-300, -300B, -300C, and -400 series airplanes; and Model 720 and 720B series airplanes; certificated in any category. Note 1: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations
(AWLs)in the Boeing 707/720 Airworthiness Limitations
(AWL)Document D6-7552-AWL, Original Release March 2006, as specified in paragraph
(g)or
(i)of this AD, as applicable. Unsafe Condition
(d)This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information
(f)The term “D6-7552-AWL March 2006,” as used in this AD, means Boeing 707/720 Airworthiness Limitations Document D6-7552-AWL, Original Release March 2006. Revision of AWLs Section
(g)Before December 16, 2008, revise the FAA-approved maintenance program by incorporating the information in the sections specified in paragraphs (g)(1) through (g)(3) of this AD, except that the initial inspection specified in paragraph
(h)of this AD must be done at the time specified in paragraph (h). Accomplishing the revision in accordance with a later revision of Boeing 707/720 Airworthiness Limitations Document D6-7552-AWL is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA.
(1)Section B., “FUEL SYSTEMS AIRWORTHINESS LIMITATIONS,” of D6-7552-AWL March 2006.
(2)Section C., “SYSTEM AWL PAGE FORMAT,” of D6-7552-AWL March 2006.
(3)Section D., “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS,” of D6-7552-AWL March 2006. Initial Inspection and Repair if Necessary
(h)At the later of the times specified in paragraphs (h)(1) and (h)(2) of this AD: Do a detailed inspection of external wires over the center fuel tank for damaged or loose clamps, wire chafing, and wire bundles in contact with the surface of the center fuel tank, in accordance with Section D, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS,” AWL number 28-AWL-01, of D6-7552-AWL March 2006. If any discrepancy is found during this inspection, repair the discrepancy before further flight in accordance with D6-7552-AWL March 2006. Accomplishing the actions required by this paragraph in accordance with a later revision of D6-7552-AWL March 2006 is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO.
(1)Before the accumulation of 36,000 total flight cycles, or within 120 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first.
(2)Within 72 months after the effective date of this AD. Note 2: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.” Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-12818 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28389; Directorate Identifier 2006-NM-171-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 777-200, -200LR, -300, and -300ER Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for certain Boeing Model 777-200, -200LR, -300, and -300ER series airplanes. This proposed AD would require revising the Airworthiness Limitations
(AWLs)section of the Instructions for Continued Airworthiness by incorporating new limitations for fuel tank systems to satisfy Special Federal Aviation Regulation No. 88 requirements. This proposed AD also would require the initial performance of certain repetitive inspections specified in the AWLs to phase in those inspections, and repair if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by August 17, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)917-6505; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28389; Directorate Identifier 2006-NM-171-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (66 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design (i.e., type certificate
(TC)and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: Single failures, Single failures in combination with a latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this AD are necessary to reduce the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Relevant Service Information We have reviewed the following sections of Boeing 777 Maintenance Planning Data
(MPD)Document D622W001-9, Section 9, Revision March 2006 (hereafter referred to as “Revision March 2006 of the MPD”): • Section D., “AIRWORTHINESS LIMITATIONS—SYSTEMS, FUEL SYSTEMS AIRWORTHINESS LIMITATIONS”; and • Section E., “PAGE FORMAT: SYSTEMS AIRWORTHINESS LIMITATIONS.” Those sections of Revision March 2006 of the MPD describe new airworthiness limitations
(AWLs)for fuel tank systems. The new AWLs include: • AWL inspections, which are periodic inspections of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCL), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration changes that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require revising the AWL section of the Instructions for Continued Airworthiness by incorporating the information in the service information described previously. The proposed AD also would require the initial performance of certain repetitive inspections specified in the AWLs to phase in those inspections, and repair if necessary. Explanation of Compliance Time In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended by Boeing. Rework Required When Implementing AWLs Into an Existing Fleet The AWL revision for the fuel tank systems specified in paragraph
(g)of this proposed AD, which involves incorporating the information specified in Revision March 2006 of the MPD, would affect how operators maintain their airplanes. After doing that AWL revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before the AWL revision specified in paragraph
(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual
(CMM)applies to fuel pumps repaired after the AWLs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date the AWL revision specified in paragraph
(g)is done, except as provided by paragraph
(h)of this proposed AD. This proposed AD would require only the AWL revision specified in paragraph (g), and initial inspections specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph
(g)of this proposed AD would require revising the AWL section of the Instructions for Continued Airworthiness by incorporating certain information specified in Revision March 2006 of the MPD into the MPD. Paragraph
(g)allows accomplishing the AWL revision in accordance with later revisions of the MPD as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. In addition, Section E. of Revision March 2006 of the MPD specifies that any deviations from the published AWL instructions, including AWL intervals, in that MPD must be approved by the Manager, Seattle ACO. Therefore, after the AWL revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector
(PMI)or Principal Avionics Inspector
(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions Section D. of Revision March 2006 of the MPD has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in Section D. without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in Revision March 2006 of the MPD, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix 1 of this proposed AD contains a list of Air Transport Association
(ATA)sections for the revised maintenance manuals. Operators might wish to use the appendix as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. Some of the AWLs contained in Section E of Revision March 2006 of the MPD are inspections for which the applicable sections of the operating rules apply. Other AWLs are CDCCLs, which are tied to conditional maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in Section E of Revision March 2006 of the MPD refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referring to the CMMs by revision level in the applicable AWL for certain components rather than including information directly in the MPD because of the volume of that information. As a result, the Manager, Seattle ACO, must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval
(PMA)approved parts), methods, techniques, and practices not contained in the CMMs needs to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, pump repair/overhaul manuals must be approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in Section E of Revision March 2006 of the MPD, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks may be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 564 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 125 airplanes of U.S. registry. The following table provides the estimated costs for U.S. operators to comply with this proposed AD at an average labor rate of $80 per work hour. Estimated Costs Actions Work hours Cost per airplane Fleet cost Maintenance program revision 8 $640 $80,000 Inspections 8 640 80,000 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28389; Directorate Identifier 2006-NM-171-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by August 17, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Boeing Model 777-200, -200LR, -300, and -300ER series airplanes; certificated in any category; with an original standard airworthiness certificate or original export certificate of airworthiness issued before June 1, 2006. Note 1: Airplanes with an original standard airworthiness certificate or original export certificate of airworthiness issued on or after June 1, 2006, must be already in compliance with the airworthiness limitations specified in this AD because those limitations were applicable as part of the airworthiness certification of those airplanes. Note 2: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations
(AWLs)in the Boeing 777 Maintenance Planning Data
(MPD)Document D622W001-9 according to paragraph
(g)or (i), as applicable, of this AD. Unsafe Condition
(d)This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information
(f)The term “Revision March 2006 of the MPD” as used in this AD, means Section 9 of Boeing 777 MPD Document D622W001-9, Revision March 2006. Revision of AWLs Section
(g)Before December 16, 2008, revise the AWLs section of the Instructions for Continued Airworthiness by incorporating the information in the sections specified in paragraphs (g)(1) and (g)(2) of this AD into the MPD, except that the initial inspections specified in paragraph
(h)of this AD must be done at the compliance times specified in paragraph
(h)of this AD. Accomplishing the revision in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA.
(1)Section D., “AIRWORTHINESS LIMITATIONS—SYSTEMS, FUEL SYSTEMS AIRWORTHINESS LIMITATIONS,” of Revision March 2006 of the MPD.
(2)Section E., “PAGE FORMAT: SYSTEMS AIRWORTHINESS LIMITATIONS,” of Revision March 2006 of the MPD. Initial Inspections and Repair
(h)Do the inspections described in paragraphs (h)(1) and (h)(2) of this AD at the compliance times specified in paragraphs (h)(1) and (h)(2); in accordance with the AWLs described in Section E., “PAGE FORMAT: SYSTEMS AIRWORTHINESS LIMITATIONS,” of Revision March 2006 of the MPD. If any discrepancy is found during this inspection, repair the discrepancy before further flight in accordance with Revision March 2006 of the MPD. Accomplishing the actions in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO.
(1)At the later of the times specified in paragraphs (h)(1)(i) and (h)(1)(ii) of this AD, do a detailed inspection of external wires over the center fuel tank for damaged clamps, wire chafing, and wire bundles in contact with the surface of the center fuel tank, and repair any discrepancy; in accordance with 28-AWL-01.
(i)Before the accumulation of 36,000 total flight cycles, or within 120 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first.
(ii)Within 72 months after the effective date of this AD. Note 3: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.”
(2)At the later of the times specified in paragraphs (h)(2)(i) and (h)(2)(ii) of this AD, do a special detailed inspection (resistance test) of the lightning shield-to-ground termination of the out tank wiring of the fuel quantity indicating system
(FQIS)and, as applicable, repair (restore) the bond to ensure the shield-to-ground termination meets specified resistance values; in accordance with 28-AWL-03.
(i)Before the accumulation of 36,000 total flight cycles, or within 120 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first.
(ii)Within 24 months after the effective date of this AD. Note 4: For the purposes of this AD, a special detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. The examination is likely to make extensive use of specialized inspection techniques and/or equipment. Intricate cleaning and substantial access or disassembly procedure may be required.” Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Appendix 1.—Fuel Tank System Airworthiness Limitations—Applicable Maintenance Manuals AWL No. ALI/CDCCL ATA Section or CMM document 1 Task title Task 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Center Tank—Inspection 28-11-00-210-801. 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-03 ALI AMM 05-55-54/601 Fuel Quantity Indicator System (FQIS)—Inspection/Check 05-55-54-200-801. 28-AWL-04 CDCCL SWPM 20-10-15 Assemble Shield Ground Wires. 28-AWL-05 CDCCL AMM 28-22-15/401 Install Fuel Line, Fitting and Coupling 28-22-15-400-802-002. 28-AWL-06 CDCCL AMM 29-11-60/401 Install Heat Exchanger 29-11-60-000-801. Bonding Resistances of the Hydraulic Tubes for the Heat Exchanger 29-11-60-765-801. 28-AWL-07 CDCCL CMM 28-20-42, revision 7; CMM 28-20-45, revision 3; CMM 28-20-47, revision 2; or subsequent revisions. 28-AWL-08 CDCCL AMM 28-11-06/401 Install Sump Drain Valve 28-11-06-400-801. 28-AWL-09 CDCCL. 28-AWL-10 CDCCL AMM 28-22-06/401 Install Override/Jettison Pump Motor-Impeller 28-22-06-400-801. Install Override/Jettison Pump Housing 28-22-06-400-802. AMM 28-22-05/401 Install Boost Pump Motor-Impeller 28-22-05-400-801. Install Boost Pump Housing 28-22-05-400-802. 28-AWL-11 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-12 CDCCL AMM 28-21-02/401 Install Refuel Valve 28-21-02-400-801. 28-AWL-13 CDCCL CMM 28-47-69, revision 1; CMM 28-47-65, revision 3; or subsequent revisions. 28-AWL-14 CDCCL CMM 28-47-58, revision 4; CMM 28-47-59, revision 1; CMM 28-47-60, revision 4; CMM 28-48-03, revision 2; or subsequent revisions. 28-AWL-15 CDCCL SWPM 20-14-12 Repair FQIS Wire Harness. AMM 28-41-05/401 Install FQIS In-Tank Wire Harness 28-41-05-404-801. 28-AWL-16 CDCCL AMM 28-11-01/401 Install Main Tank Access Door 28-11-01-400-801. AMM 28-11-02/401 Install Center Tank Access Door 28-11-02-400-801. AMM 28-11-07/401 Replace Rubber Door Seal 28-11-07-900-801. AMM 28-11-03/401 Install Surge Tank Access Door 28-11-03-400-801. AMM 28-13-05/401 Install Surge Tank Vent Flame Arrestor 28-13-05-420-801. 28-AWL-17 CDCCL FIM 28-22-00/201. 28-AWL-18 28-AWL-19 CDCCL AMM 28-22-02/401 Install Engine Fuel Spar Valve Actuator 28-22-02-400-802. AMM 28-22-01/401 Install Engine Fuel Spar Valve Adapter/Shaft 28-22-01-400-803. AMM 28-22-03/401 Install Engine Fuel Crossfeed Valve Adapter/Shaft 28-22-03-400-803. AMM 28-22-04/401 Install FWD/AFT Fuel Crossfeed Valve Actuator 28-22-04-400-802. AMM 28-26-01/401 Install Defuel Valve Adapter/Shaft 28-26-01-400-803. AMM 28-26-02/401 Install Defuel Valve Actuator 28-26-02-400-802. AMM 28-31-02/401 Install Fuel Jettison Nozzle Valve Adapter/Shaft 28-31-02-400-801. AMM 28-31-03/401 Install Fuel Nozzle Valve Actuator 28-31-03-400-801. AMM 28-31-04/401 Install Fuel Jettison Isolation Valve Adapter/Shaft 28-31-04-400-803. AMM 28-31-05/401 Install Fuel Jettison Isolation Valve Actuator 28-31-05-400-802. 28-AWL-20 CDCCL CMM 28-20-21. 1 CMMs per applicable manufacturer. Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-12835 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28380; Directorate Identifier 2007-NM-088-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-400, 747-400D, and 747-400F Series Airplanes; Model 757-200 Series Airplanes; and Model 767-200, 767-300, and 767-300F Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for certain Boeing Model 747-400, 747-400D, 747-400F, 757-200, 767-200, 767-300, and 767-300F series airplanes. This proposed AD would require inspecting to determine the date code of the time delay relay for the cargo fire suppression system, and replacing the relay if necessary. This proposed AD results from a report indicating that failure of a time delay relay on an ELMS (electrical load management system) panel led to testing of other time delay relays at Boeing and at the supplier. Similar relays are used in the cargo fire suppression system. The time delay relay controls when the fire bottles discharge. We are proposing this AD to ensure there is sufficient fire suppressant to control a cargo fire if the airplane is more than the relay delay time from a suitable airport, which could result in an uncontrollable fire in the cargo compartment. DATES: We must receive comments on this proposed AD by August 17, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, room PL-401, Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Binh V. Tran, Aerospace Engineer, Systems and Equipment Branch, ANM-130S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)917-6485; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28380; Directorate Identifier 2007-NM-088-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov* . Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* , or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone
(800)647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion We have received a report indicating that failure of a time delay relay on a Boeing Model 777 ELMS (electrical load management system) panel led to testing of other time delay relays at Boeing and at the supplier. Similar relays are used in the cargo fire suppression system. Although there have been no reported in-service failures of the cargo fire suppression time delay relays, the testing showed that, at elevated temperatures, thermal expansion can cause pre-existing cracks in the timing module substrates to widen and cause an electrical open circuit that prevents power from reaching the relay coil. The relay operates normally at reduced temperatures. The time delay relays of the fire suppression system in Boeing Model 747-400, 747-400D, 747-400F, 757-200, 767-200, 767-300, and 767-300F series airplanes can have the same condition. There are two Halon bottles in the cargo fire suppression system on these airplanes. The first bottle discharges immediately after the cargo fire discharge switch is pressed. The second bottle of fire suppressant discharges after a period of time controlled by the time delay relay. If there is a cargo fire and the time delay relay has failed, the second bottle will not discharge. Although the first bottle discharges, the available Halon may not be enough to control a cargo fire. This condition, if not corrected, could result in insufficient fire suppressant to control a cargo fire if the airplane is more than the relay delay time from a suitable airport, which could result in an uncontrollable fire in the cargo compartment. Relevant Service Information We have reviewed the Boeing service bulletins listed in the following table. Boeing Service Bulletins Boeing Special Attention Service Bulletin— For Boeing Model— 747-26-2281, dated July 24, 2006 747-400, 747-400D, and 747-400F series airplanes. 757-26-0051, dated July 28, 2006 757-200 series airplanes. 767-26-0131, dated July 24, 2006 767-200, 767-300, and 767-300F series airplanes. The service bulletins describe procedures for inspecting the time delay relay in the Main Equipment Center to determine if it was manufactured during a certain date range, and replacing any relay within that date range with a relay not manufactured during that date range, or with a relay that has been tested by the supplier and found to be unaffected by the thermal expansion. The service bulletins permit flight for 30 days after finding a relay that was manufactured within the suspect date range. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Operators should note that, consistent with the Boeing service information, this proposed AD allows operators to continue flight for 30 days after finding a relay that was manufactured within the suspect date range. In making this determination, we consider that, in the case of this AD, long-term continued operational safety is adequately assured by replacing a suspect relay within the specified time limit. Costs of Compliance There are about 1,871 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 702 airplanes of U.S. registry. The proposed inspection would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $56,160, or $80 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28380; Directorate Identifier 2007-NM-088-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by August 17, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to the Boeing airplane models, certificated in any category, identified in the service bulletins specified Table 1 of this AD. Table 1.—Applicability of This AD Boeing model— As identified in Boeing Special Attention Service Bulletin— 747-400, 747-400D, and 747-400F series airplanes 747-26-2281, dated July 24, 2006. 757-200 series airplanes 757-26-0051, dated July 28, 2006. 767-200, -300, and -300F series airplanes 767-26-0131, dated July 24, 2006. Unsafe Condition
(d)This AD results from a report indicating that failure of a time delay relay on a Boeing Model 777 ELMS (electrical load management system) panel led to testing of other time delay relays at Boeing and at the supplier. Similar relays are used in the cargo fire suppression system. We are issuing this AD to ensure there is sufficient fire suppressant to control a cargo fire if the airplane is more than the relay delay time from a suitable airport, which could result in uncontrollable fire in the cargo compartment. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Bulletin Reference
(f)The term “service bulletin,” as used in this AD, means the Accomplishment Instructions of the following service bulletins, as applicable:
(1)For Model 747-400, 747-400D, and 747-400F series airplanes: Boeing Special Attention Service Bulletin 747-26-2281, dated July 24, 2006;
(2)For Model 757-200 series airplanes: Boeing Special Attention Service Bulletin 757-26-0051, dated July 28, 2006; and
(3)For Model 767-200, -300, and -300F series airplanes: Boeing Special Attention Service Bulletin 767-26-0131, dated July 24, 2006. Inspection
(g)Within 24 months after the effective date of this AD: Do a general visual inspection of the part number (P/N) TDH6103-1204, -1804, and -6003 time delay relay, as applicable, in the Main Equipment Center to determine if the relay was manufactured during a certain date range, in accordance with the applicable service bulletin. Replacement
(h)Within 30 days after finding a relay manufactured during the date range specified in the service bulletin, as required by paragraph
(g)of this AD: Replace the relay with a relay that was not manufactured during the specified date range, or with a relay that has been tested by the supplier and found to be unaffected by thermal expansion, in accordance with the applicable service bulletin. Parts Installation
(i)As of the effective date of this AD, no person may install a time delay relay, P/N TDH6103-1204, -1804, or -6003, on any airplane if the relay has a date code between 0000 and 0343 and does not have an additional date code with the letter “T.” Alternative Methods of Compliance (AMOCs) (j)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-12836 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28385; Directorate Identifier 2006-NM-181-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747SR, and 747SP Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747SR, and 747SP series airplanes. This proposed AD would require revising the FAA-approved maintenance program by incorporating new airworthiness limitations
(AWLs)for fuel tank systems to satisfy Special Federal Aviation Regulation No. 88 requirements. This proposed AD would also require the initial inspection of certain repetitive AWL inspections to phase in those inspections, and repair if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by August 17, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Ave, SW., Renton, Washington 98057-3356; telephone
(425)917-6505; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28385; Directorate Identifier 2006-NM-181-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* , or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (67 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design (i.e., type certificate
(TC)and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with another latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this proposed AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Relevant Service Information We have reviewed Boeing 747-100/200/300/SP Airworthiness Limitations
(AWLs)and Certification Maintenance Requirements (CMRs), D6-13747-CMR, Revision March 2006 (hereafter referred to as “Revision March 2006 of Document D6-13747-CMR”). (For the purposes of Revision March 2006 of Document D6-13747-CMR, the Model 747SR series airplane is basically a Model 747-100 series airplane with certain modifications to improve fatigue life.) Section D of Revision March 2006 of Document D6-13747-CMR describes new AWLs for fuel tank systems. The new AWLs include: • AWL inspections, which are periodic inspections of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCLs), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require revising the FAA-approved maintenance program by incorporating the information in Section D of Revision March 2006 of Document D6-13747-CMR. This proposed AD would also require the initial inspection of certain repetitive AWL inspections to phase in those inspections, and repair if necessary. Explanation of Compliance Time In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended by Boeing. Rework Required When Implementing AWLs Into an Existing Fleet The maintenance program revision for the fuel tank systems specified in paragraph
(g)of this proposed AD, which involves incorporating the information specified in Revision March 2006 of Document D6-13747-CMR, would affect how operators maintain their airplanes. After doing that maintenance program revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before the maintenance program revision specified in paragraph
(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual
(CMM)applies to fuel pumps repaired after the maintenance programs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date the maintenance program revision specified in paragraph
(g)is done, except as provided by paragraph
(h)of this proposed AD. This proposed AD would require only the maintenance program revision specified in paragraph (g), and initial inspections specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph
(g)of this proposed AD would require revising the FAA-approved maintenance program by incorporating certain information specified in Section D of Revision March 2006 of Document D6-13747-CMR. Paragraph
(g)allows accomplishing the maintenance program revision in accordance with later revisions of Document D6-13747-CMR as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Paragraph
(h)allows accomplishing the initial inspections and repair in accordance with later revisions of Document D6-13747-CMR as an acceptable method of compliance if they are approved by the Manager, Seattle ACO. In addition, Section D specifies that any deviations from the published AWL instructions, including AWL intervals, must be approved by the Manager, Seattle ACO. Therefore, after the maintenance program revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector
(PMI)or Principal Avionics Inspector
(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions Section D of Revision March 2006 of Document D6-13747-CMR has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in Section D without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in Revision March 2006 of Document D6-13747-CMR, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix 1 of this proposed AD contains a list of Air Transport Association
(ATA)sections for the revised maintenance manuals. Operators might wish to use the appendix as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. Some of the AWLs contained in Section D of Revision March 2006 of Document D6-13747-CMR are inspections for which the applicable sections of the operating rules apply. Other AWLs are CDCCLs, which are tied to conditional maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in Section D of Revision March 2006 of Document D6-13747-CMR refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referring to the CMMs by revision level in the applicable AWL for certain components rather than including information directly in Document D6-13747-CMR because of the volume of that information. As a result, the Manager, Seattle ACO, must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval
(PMA)approved parts), methods, techniques, and practices not contained in the CMMs need to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, pump repair/overhaul manuals must be approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in Section D of Revision March 2006 of Document D6-13747-CMR, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks may be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 308 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Parts Cost per airplane Number of U.S.- registered airplanes Fleet cost Maintenance program revision 8 None $640 93 $59,520 Inspections 8 None 640 93 59,520 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28385; Directorate Identifier 2006-NM-181-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by August 17, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747SR, and 747SP series airplanes, certificated in any category. Note 1: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations in the Boeing 747-100/200/300/SP Airworthiness Limitations
(AWLs)and Certification Maintenance Requirements (CMRs), D6-13747-CMR, according to paragraph
(g)or
(i)of this AD, as applicable. Unsafe Condition
(d)This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information Reference
(f)The term “Revision March 2006 of Document D6-13747-CMR” as used in this AD, means Boeing 747-100/200/300/SP AWLs and CMRs, D6-13747-CMR, Revision March 2006. (For the purposes of Revision March 2006 of Document D6-13747-CMR, the Model 747SR series airplane is basically a Model 747-100 series airplane with certain modifications to improve fatigue life.) Maintenance Program Revision
(g)Before December 16, 2008, revise the FAA-approved maintenance program to incorporate the information in Section D of Revision March 2006 of Document D6-13747-CMR; except that the initial inspections required by paragraph
(h)of this AD must be done at the applicable compliance time specified in that paragraph. Accomplishing the revision in accordance with a later revision of Document D6-13747-CMR is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Initial Inspections and Repair if Necessary
(h)Do the inspections specified in Table 1 of this AD and repair any discrepancy, in accordance with Section D, “AIRWORTHINESS LIMITATIONS—SYSTEMS,” of Revision March 2006 of Document D6-13747-CMR. The repair must be done before further flight. Accomplishing the actions required by this paragraph in accordance with a later revision of Document D6-13747-CMR is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO. Note 2: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.” Note 3: For the purposes of this AD, a special detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. The examination is likely to make extensive use of specialized inspection techniques and/or equipment. Intricate cleaning and substantial access or disassembly procedure may be required.” Table 1.—Initial Inspections AWL No. Description Compliance time (whichever occurs later) Threshold Grace period 28-AWL-01 A detailed inspection of external wires over the center fuel tank for damaged clamps, wire chafing, and wire bundles in contact with the surface of the center fuel tank Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 72 months after the effective date of this AD. 28-AWL-03 A special detailed inspection of the lightning shield to ground termination on the out-of-tank fuel quantity indicating system to verify functional integrity Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 24 months after the effective date of this AD. 28-AWL-13 A special detailed inspection of the fault current bond of the fueling shutoff valve actuator of the center wing tank to verify electrical bond Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 60 months after the effective date of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Appendix 1.—Implementing Fuel Tank System Airworthiness Limitations on Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747SR, and 747SP Series Airplanes AWL No. ALI/CDCCL ATA section or CMM document Task title 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Center Tank Inspection. 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-03 ALI AMM 05-55-54/601. 28-AWL-04 CDCCL SWPM 20-10-15 Assembly of Shield Ground Wires. 28-AWL-05 CDCCL AMM 28-22-07/401 Install the Bulkhead Fitting for the Engine Fuel Feed Tube. 28-AWL-06 CDCCL AMM 29-11-22/401 Install the Heat Exchanger. 28-AWL-07 CDCCL CMM 28-22-07, Revision 1; CMM 28-31-03, Revision 3; CMM 28-22-06, Revision 6; CMM 28-31-05, Revision 1; CMM 28-20-02, Revision 4 or Revision 9; or subsequent revisions 28-AWL-08 CDCCL AMM 28-22-03/401 Install Boost Pump Housing. AMM 28-31-01/401 Jettison Pump Motor/Impeller Unit Installation. 28-AWL-09 ALI AMM 28-31-00/501 Operational Test—Fault Current Detector. 28-AWL-10 CDCCL. 28-AWL-11 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-12 CDCCL AMM 28-21-02/401 Install the Refuel Valve Control Unit. AMM 28-21-13/401 Install Center Wing Tank Refuel Valve Unit. 28-AWL-13 ALI AMM 28-21-13/601 Center Wing Tank Refuel Valve—Fault Current Bond Inspection. 28-AWL-14 CDCCL AMM 28-11-02/401 Install the Reserve and Main Tank Access Door. AMM 28-11-03/401 Install the Surge Tank Access Door. 28-AWL-15 CDCCL CMM 28-40-10, Revision 13; CMM 28-40-12, Revision 9; CMM 28-40-16, Revision 1; CMM 28-40-14, Revision 8; CMM 28-40-15, Revision 0; or subsequent revisions 28-AWL-16 CDCCL SWPM 20-14-12 Repair of Fuel Quantity Indicator System
(FQIS)Wire Harness. AMM 28-41-09/401 Replace the Fuel Tank Wire Bundle. 28-AWL-17 CDCCL CMM 28-31-22, Revision 4; or subsequent revisions 28-AWL-18 CDCCL AMM 28-22-00/101 Engine Fuel Feed System—Trouble Shooting. 28-AWL-19 CDCCL. Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-12815 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28386; Directorate Identifier 2006-NM-162-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-400, -400D, and -400F Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for certain Boeing Model 747-400, -400D, and -400F series airplanes. This proposed AD would require revising the FAA-approved maintenance program by incorporating new airworthiness limitations
(AWLs)for fuel tank systems to satisfy Special Federal Aviation Regulation No. 88 requirements. This proposed AD would also require the initial inspection of certain repetitive AWL inspections to phase in those inspections, and repair if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by August 17, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Ave, SW., Renton, Washington 98057-3356; telephone
(425)917-6505; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28386; Directorate Identifier 2006-NM-162-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* , or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (67 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design (i.e., type certificate
(TC)and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: single failures, single failures in combination with another latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this proposed AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Relevant Service Information We have reviewed the following subsections of Boeing 747-400 Maintenance Planning Data
(MPD)Document, D621U400-9, Section 9, Revision 23, dated March 2006 (hereafter referred to as “Revision March 2006 of the MPD”): • Subsection B, “AIRWORTHINESS LIMITATIONS (AWLs)—SYSTEMS” • Subsection C, “PAGE FORMAT: AIRWORTHINESS LIMITATIONS” • Subsection D, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS” Those subsections of Revision March 2006 of the MPD describe new AWLs for fuel tank systems. The new AWLs include: • AWL inspections, which are periodic inspections of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCLs), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require revising the FAA-approved maintenance program by incorporating the information in Subsections B, C, and D of Revision March 2006 of the MPD. This proposed AD would also require the initial inspection of certain repetitive AWL inspections to phase in those inspections, and repair if necessary. Explanation of Compliance Time In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended by Boeing. Rework Required When Implementing AWLs Into an Existing Fleet The maintenance program revision for the fuel tank systems specified in paragraph
(g)of this proposed AD, which involves incorporating the information specified in Revision March 2006 of the MPD, would affect how operators maintain their airplanes. After doing that maintenance program revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before the maintenance program revision specified in paragraph
(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual
(CMM)applies to fuel pumps repaired after the maintenance programs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date the maintenance program revision specified in paragraph
(g)is done, except as provided by paragraph
(h)of this proposed AD. This proposed AD would require only the maintenance program revision specified in paragraph (g), and initial inspections specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph
(g)of this proposed AD would require revising the FAA-approved maintenance program by incorporating certain information specified in Revision March 2006 of the MPD. Paragraph
(g)allows accomplishing the maintenance program revision in accordance with later revisions of the MPD as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Paragraph
(h)allows accomplishing the initial inspections and repair in accordance with later revisions of the MPD as an acceptable method of compliance if they are approved by the Manager, Seattle ACO. In addition, Subsection B of Revision March 2006 of the MPD specifies that any deviations from the published AWL instructions, including AWL intervals, in that MPD must be approved by the Manager, Seattle ACO. Therefore, after the maintenance program revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector
(PMI)or Principal Avionics Inspector
(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions Subsection B of Revision March 2006 of the MPD has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in Subsection B without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in Revision March 2006 of the MPD, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix 1 of this proposed AD contains a list of Air Transport Association
(ATA)sections for the revised maintenance manuals. Operators might wish to use the appendix as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. Some of the AWLs contained in Subsection D of Revision March 2006 of the MPD are inspections for which the applicable sections of the operating rules apply. Other AWLs are CDCCLs, which are tied to conditional maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in Subsection D of Revision March 2006 of the MPD refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referring to the CMMs by revision level in the applicable AWL for certain components rather than including information directly in the MPD because of the volume of that information. As a result, the Manager, Seattle ACO, must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval
(PMA)approved parts), methods, techniques, and practices not contained in the CMMs need to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, certain pump repair/overhaul manuals must be approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in Subsection D of Revision March 2006 of the MPD, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks may be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 596 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Parts Cost per airplane Number of U.S.- registered airplanes Fleet cost Maintenance program revision 8 None $640 57 $36,480 Inspections 8 None 640 57 36,480 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28386; Directorate Identifier 2006-NM-162-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by August 17, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Boeing Model 747-400, -400D, and -400F series airplanes, certificated in any category; with an original standard airworthiness certificate or original export certificate of airworthiness issued before April 12, 2006. Note 1: Airplanes with an original standard airworthiness certificate or original export certificate of airworthiness issued on or after April 12, 2006, must be already in compliance with the airworthiness limitations specified in this AD because those limitations were applicable as part of the airworthiness certification of those airplanes. Note 2: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations
(AWLs)in the Boeing 747-400 Maintenance Planning Data
(MPD)Document, D621U400-9, according to paragraph
(g)or
(i)of this AD, as applicable. Unsafe Condition
(d)This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information Reference
(f)The term “Revision March 2006 of the MPD” as used in this AD, means Boeing 747-400 Maintenance Planning Data
(MPD)Document, D621U400-9, Section 9, Revision 23, dated March 2006. Maintenance Program Revision
(g)Before December 16, 2008, revise the FAA-approved maintenance program by incorporating the information in the subsections specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD; except that the initial inspections specified in Table 1 of this AD must be done at the compliance times specified in Table 1. Accomplishing the revision in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA.
(1)Subsection B, “AIRWORTHINESS LIMITATIONS (AWLs)—SYSTEMS,” of Revision March 2006 of the MPD.
(2)Subsection C, “PAGE FORMAT: AIRWORTHINESS LIMITATIONS,” of Revision March 2006 of the MPD.
(3)Subsection D, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS,” of Revision March 2006 of the MPD. Initial Inspections and Repair if Necessary
(h)Do the inspections specified in Table 1 of this AD and repair any discrepancy, in accordance with Subsection D, “AIRWORTHINESS LIMITATIONS—FUEL SYSTEMS,” of Revision March 2006 of the MPD. The repair must be done before further flight. Accomplishing the actions required by this paragraph in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO. Note 3: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.” Note 4: For the purposes of this AD, a special detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. The examination is likely to make extensive use of specialized inspection techniques and/or equipment. Intricate cleaning and substantial access or disassembly procedure may be required.” Table 1.—Initial Inspections AWL No. Description Compliance time (whichever occurs later) Threshold Grace period 28-AWL-01 A detailed inspection of external wires over the center fuel tank for damaged or loose clamps, wire chafing, and wire bundles in contact with the surface of the center fuel tank Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 72 months after the effective date of this AD. 28-AWL-03 A special detailed inspection of the lightning shield to ground termination on the out-of-tank fuel quantity indicating system to verify functional integrity Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 24 months after the effective date of this AD. 28-AWL-10 A special detailed inspection of the fault current bond of the fueling shutoff valve actuator of the center wing tank to verify electrical bond Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 60 months after the effective date of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Appendix 1.—Implementing Fuel Tank System Airworthiness Limitations on Model 747-400, -400D, and -400F Series Airplanes AWL No. ALI/CDCCL ATA section or CMM document Task title Task No. 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Center Fuel Tank—Inspection 28-11-00-210-801. 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-03 ALI AMM 05-55-54/601 FQIS Wiring and Bonding—Inspection 05-55-54-200-801. 28-AWL-04 CDCCL SWPM 20-10-15 Assembly of Shield Ground Wires. 28-AWL-05 CDCCL AMM 29-11-22/401 Heat Exchanger Installation 29-11-22-404-014. 28-AWL-06 CDCCL CMM 28-22-07, Revision 1; CMM 28-31-03, Revision 3; CMM 28-26-12, Revision 0; CMM 28-26-14, Revision 0; CMM 28-20-02, Revision 9; or subsequent revisions. 28-AWL-07 CDCCL. 28-AWL-08 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration. 28-AWL-09 CDCCL AMM 28-21-02/401 Refuel Valve Control Unit—Installation 28-21-02-401-011. AMM 28-21-13/401 Refuel Valve Control Unit—Installation 28-21-13-404-087. 28-AWL-10 ALI AMM 28-21-13/601 Center Wing Tank Refuel Valve—Fault Current Bond Inspection 28-21-13-765-801. 28-AWL-11 CDCCL CMM 28-41-62, Revision 4 or subsequent revisions. 28-AWL-12 CDCCL CMM 28-21-02, Revision 2 or subsequent revisions. 28-AWL-13 CDCCL CMM 28-41-63, Revision 4 or subsequent revisions. 28-AWL-14 CDCCL CMM 28-40-55, Revision 6; CMM 28-40-56, Revision 4; CMM 28-40-59, Revision 5; or subsequent revisions. 28-AWL-15 CDCCL SWPM 20-14-12 Repair of Fuel Quantity Indicator System
(FQIS)Wire Harness. AMM 28-41-09/401 FQIS Wire Bundle in the Main or Reserve Tank—Installation 28-41-09-404-019. FQIS Wire Bundle in the Center Wing Tank Installation 28-41-09-404-157. FQIS Wire Bundle in the Horizontal Stabilizer Tank Installation 28-41-09-404-176. 28-AWL-16 CDCCL AMM 28-11-02/401 Reserve and Main Tank Access Door Installation 28-11-02-404-011. AMM 28-11-03/401 Access Door for the Wing Surge Tank Installation 28-11-03-404-007. 28-AWL-17 ALI AMM 28-31-14/501 Fault Current Detector Operational Test 28-31-14-715-001. AMM 28-17-14/501 Fault Current Detector—Operational Test 28-17-14-715-001. 28-AWL-18 CDCCL CMM 28-31-22, Revision 4 or subsequent revisions. 28-AWL-19 CDCCL FIM 28-22-00/201 CMCS Message LEFT HORIZONTAL STABILIZER PUMP SYSTEM FAIL—Fault Isolation 28-21 Task 806. CMCS Message RIGHT HORIZONTAL STABILIZER PUMP SYSTEM FAIL—Fault Isolation 28-21 Task 807. CMCS Message MAIN TANK 1 FWD BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 860. CMCS Message MAIN TANK 1 AFT BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 861. CMCS Message MAIN TANK 2 FWD BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 862. CMCS Message MAIN TANK 2 AFT BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 863. CMCS Message MAIN TANK 3 FWD BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 864. CMCS Message MAIN TANK 3 AFT BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 865. CMCS Message MAIN TANK 4 FWD BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 866. CMCS Message MAIN TANK 4 AFT BOOST PUMP SYSTEM FAIL—Fault Isolation 28-22 Task 867. CMCS Message LEFT CENTER TANK OVERRIDE/JETTISON PUMP SYSTEM FAIL—Fault Isolation 28-31 Task 826. CMCS Message RIGHT CENTER TANK OVERRIDE/JETTISON PUMP SYSTEM FAIL—Fault Isolation 28-31 Task 827. CMCS Message MAIN TK 2 AFT OVERRIDE/JETTISON PUMP SYSTEM FAIL—Fault Isolation 28-31 Task 828. CMCS Message MAIN TK 2 FWD OVERRIDE/JETTISON PUMP SYSTEM FAIL—Fault Isolation 28-31 Task 829. CMCS Message MAIN TK 3 AFT OVERRIDE/JETTISON PUMP SYSTEM FAIL—Fault Isolation 28-31 Task 830. CMCS Message MAIN TK 3 FWD OVERRIDE/JETTISON PUMP SYSTEM FAIL—Fault Isolation 28-31 Task 831. 28-AWL-20 CDCCL AMM 28-22-07/401 Front Spar Bulkhead Fitting—Installation 28-22-07-400-805-001. 28-22-07-400-806-002. 28-22-07-400-807-003. 28-22-07-400-808-004. 28-AWL-21 ALI AMM 28-22-00/501. AMM 28-17-00/501. 28-AWL-22 CDCCL AMM 28-22-03/401 Main Tank Boost Pump Motor/Impeller Unit Installation 28-22-03-404-019-001. 28-22-03-404-026-002. 28-AWL-23 CDCCL AMM 28-41-24/401. 47-AWL-01 CDCCL AMM 47-21-06/401 Flame Arrestor Installation 47-21-06-400-801. 47-AWL-02 CDCCL. 47-AWL-03 ALI AMM 47-00-01/501 Functional Test of the Nitrogen Generation System 47-00-01-720-801. 47-AWL-04 ALI AMM 47-43-02/501 Thermal Switch Functional Test 47-43-02-700-801. Thermal Switch Operational Test 47-43-02-700-802. 47-AWL-05 ALI AMM 47. 47-AWL-06 ALI AMM 47. Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-12816 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28388; Directorate Identifier 2006-NM-163-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 767-200, -300, -300F, and -400ER Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for certain Boeing Model 767-200, -300, -300F, and -400ER series airplanes. This proposed AD would require revising the FAA-approved maintenance program to incorporate new airworthiness limitations
(AWLs)for fuel tank systems to satisfy Special Federal Aviation Regulation No. 88 requirements. This proposed AD would also require the initial inspection of certain repetitive AWL inspections to phase in those inspections, and repair if necessary. This proposed AD results from a design review of the fuel tank systems. We are proposing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. DATES: We must receive comments on this proposed AD by August 17, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Ave SW., Renton, Washington 98057-3356; telephone
(425)917-6505; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28388; Directorate Identifier 2006-NM-163-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (67 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design (i.e., type certificate
(TC)and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective action. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: Single failures, single failures in combination with another latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. We have determined that the actions identified in this proposed AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Relevant Service Information We have reviewed Subsection D, “AIRWORTHINESS LIMITATIONS—SYSTEMS,” of Boeing 767 Maintenance Planning Data
(MPD)Document, D622T001-9, Section 9, Revision March 2006 (hereafter referred to as “Revision March 2006 of the MPD”). Subsection D of Revision March 2006 of the MPD describes new airworthiness limitations
(AWLs)for fuel tank systems. The new AWLs include: • AWL inspections, which are periodic inspections of certain features for latent failures that could contribute to an ignition source; and • Critical design configuration control limitations (CDCCLs), which are limitation requirements to preserve a critical ignition source prevention feature of the fuel tank system design that is necessary to prevent the occurrence of an unsafe condition. The purpose of a CDCCL is to provide instruction to retain the critical ignition source prevention feature during configuration change that may be caused by alterations, repairs, or maintenance actions. A CDCCL is not a periodic inspection. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require revising the FAA-approved maintenance program to incorporate the information in Subsection D of Revision March 2006 of the MPD. This proposed AD would also require the initial inspection of certain repetitive AWL inspections to phase in those inspections, and repair if necessary. Explanation of Compliance Time In most ADs, we adopt a compliance time allowing a specified amount of time after the AD's effective date. In this case, however, the FAA has already issued regulations that require operators to revise their maintenance/inspection programs to address fuel tank safety issues. The compliance date for these regulations is December 16, 2008. To provide for efficient and coordinated implementation of these regulations and this proposed AD, we are using this same compliance date in this proposed AD, instead of the 18-month compliance time recommended by Boeing. Rework Required When Implementing AWLs Into an Existing Fleet The maintenance program revision for the fuel tank systems specified in paragraph
(g)of this proposed AD, which involves incorporating the information specified in Revision March 2006 of the MPD, would affect how operators maintain their airplanes. After doing that maintenance program revision, operators would need to do any maintenance on the fuel tank system as specified in the CDCCLs. Maintenance done before the maintenance program revision specified in paragraph
(g)would not need to be redone in order to comply with paragraph (g). For example, the AWL that requires fuel pumps to be repaired and overhauled per an FAA-approved component maintenance manual
(CMM)applies to fuel pumps repaired after the maintenance programs are revised; spare or on-wing fuel pumps do not need to be reworked. For AWLs that require repetitive inspections, the initial inspection interval (threshold) starts from the date the maintenance program revision specified in paragraph
(g)is done, except as provided by paragraph
(h)of this proposed AD. This proposed AD would require only the maintenance program revision specified in paragraph (g), and initial inspections specified in paragraph (h). No other fleet-wide inspections need to be done. Changes to Fuel Tank System AWLs Paragraph
(g)of this proposed AD would require revising the FAA-approved maintenance program by incorporating certain information specified in Revision March 2006 of the MPD. Paragraph
(g)allows accomplishing the maintenance program revision in accordance with later revisions of the MPD as an acceptable method of compliance if they are approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Paragraph
(h)allows accomplishing the initial inspections and repair in accordance with later revisions of the MPD as an acceptable method of compliance if they are approved by the Manager, Seattle ACO. In addition, Subsection D of Revision March 2006 of the MPD specifies that any deviations from the published AWL instructions, including AWL intervals, in that MPD must be approved by the Manager, Seattle ACO. Therefore, after the maintenance program revision, any further revision to an AWL or AWL interval should be done as an AWL change, not as an alternative method of compliance (AMOC). For U.S.-registered airplanes, operators must make requests through an appropriate FAA Principal Maintenance Inspector
(PMI)or Principal Avionics Inspector
(PAI)for approval by the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. Exceptional Short-Term Extensions Subsection D of Revision March 2006 of the MPD has provisions for an exceptional short-term extension of 30 days. An exceptional short-term extension is an increase in an AWL interval that may be needed to cover an uncontrollable or unexpected situation. For U.S.-registered airplanes, the FAA PMI or PAI must concur with any exceptional short-term extension before it is used, unless the operator has identified another appropriate procedure with the local regulatory authority. The FAA PMI or PAI may grant the exceptional short-term extensions described in Subsection D without consultation with the Manager, Seattle ACO. A non-U.S. operator should coordinate changes with its governing regulatory agency. As explained in Revision March 2006 of the MPD, exceptional short-term extensions must not be used for fleet AWL extensions. An exceptional short-term extension should not be confused with an operator's short-term escalation authorization approved in accordance with the Operations Specifications or the operator's reliability program. Ensuring Compliance With Fuel Tank System AWLs Boeing has revised applicable maintenance manuals and task cards to address AWLs and to include notes about CDCCLs. Operators that do not use Boeing's revision service should revise their maintenance manuals and task cards to highlight actions tied to CDCCLs to ensure that maintenance personnel are complying with the CDCCLs. Appendix 1 of this proposed AD contains a list of Air Transport Association
(ATA)sections for the revised maintenance manuals. Operators might wish to use the appendix as an aid to implement the AWLs. Recording Compliance With Fuel Tank System AWLs The applicable operating rules of the Federal Aviation Regulations (14 CFR parts 91, 121, 125, and 129) require operators to maintain records with the identification of the current inspection status of an airplane. Some of the AWLs contained in Subsection D of Revision March 2006 of the MPD are inspections for which the applicable sections of the operating rules apply. Other AWLs are CDCCLs, which are tied to conditional maintenance actions. An entry into an operator's existing maintenance record system for corrective action is sufficient for recording compliance with CDCCLs, as long as the applicable maintenance manual and task cards identify actions that are CDCCLs. Changes to CMMs Cited in Fuel Tank System AWLs Some of the AWLs in Subsection D of Revision March 2006 of the MPD refer to specific revision levels of the CMMs as additional sources of service information for doing the AWLs. Boeing is referring to the CMMs by revision level in the applicable AWL for certain components rather than including information directly in the MPD because of the volume of that information. As a result, the Manager, Seattle ACO, must approve the CMMs. Any later revision of those CMMs will be handled like a change to the AWL itself. Any use of parts (including the use of parts manufacturer approval
(PMA)approved parts), methods, techniques, and practices not contained in the CMMs need to be approved by the Manager, Seattle ACO, or governing regulatory authority. For example, certain pump repair/overhaul manuals must be approved by the Manager, Seattle ACO. Changes to AMMs Referenced in Fuel Tank System AWLs In other AWLs in Subsection D of Revision March 2006 of the MPD, the AWLs contain all the necessary data. The applicable section of the maintenance manual is usually included in the AWLs. Boeing intended this information to assist operators in maintaining the maintenance manuals. A maintenance manual change to these tasks may be made without approval by the Manager, Seattle ACO, through an appropriate FAA PMI or PAI, by the governing regulatory authority, or by using the operator's standard process for revising maintenance manuals. An acceptable change would have to maintain the information specified in the AWL such as the pass/fail criteria or special test equipment. Costs of Compliance There are about 824 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Parts Cost per airplane Number of U.S.-registered airplanes Fleet cost Maintenance program revision 8 None $640 332 $212,480 Inspections 8 None 640 332 212,480 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28388; Directorate Identifier 2006-NM-163-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by August 17, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Boeing Model 767-200, -300, -300F, and -400ER series airplanes, certificated in any category; with an original standard airworthiness certificate or original export certificate of airworthiness issued before April 22, 2006. Note 1: Airplanes with an original standard airworthiness certificate or original export certificate of airworthiness issued on or after April 22, 2006, must already be in compliance with the airworthiness limitations specified in this AD because those limitations were applicable as part of the airworthiness certification of those airplanes. Note 2: This AD requires revisions to certain operator maintenance documents to include new inspections and maintenance actions. Compliance with these limitations is required by 14 CFR 43.16 and 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these limitations, the operator may not be able to accomplish the actions described in the revisions. In this situation, to comply with 14 CFR 43.16 and 91.403(c), the operator must request approval for revision to the airworthiness limitations
(AWLs)in the Boeing 767 Maintenance Planning Data
(MPD)Document, D622T001-9, according to paragraph
(g)or
(i)of this AD, as applicable. Unsafe Condition
(d)This AD results from a design review of the fuel tank systems. We are issuing this AD to prevent the potential for ignition sources inside fuel tanks caused by latent failures, alterations, repairs, or maintenance actions, which, in combination with flammable fuel vapors, could result in a fuel tank explosion and consequent loss of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information Reference
(f)The term “Revision March 2006 of the MPD” as used in this AD, means Boeing 767 Maintenance Planning Data
(MPD)Document, D622T001-9, Section 9, Revision March 2006. Maintenance Program Revision
(g)Before December 16, 2008, revise the FAA-approved maintenance program by incorporating the information in Subsection D, “AIRWORTHINESS LIMITATIONS—SYSTEMS,” of Revision March 2006 of the MPD; except that the initial inspections specified in Table 1 of this AD must be done at the compliance times specified in Table 1. Accomplishing the revision in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. Initial Inspections and Repair if Necessary
(h)Do the inspections specified in Table 1 of this AD and repair any discrepancy, in accordance with Subsection D, “AIRWORTHINESS LIMITATIONS—SYSTEMS,” of Revision March 2006 of the MPD. The repair must be done before further flight. Accomplishing the actions required by this paragraph in accordance with a later revision of the MPD is an acceptable method of compliance if the revision is approved by the Manager, Seattle ACO. Note 3: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.” Note 4: For the purposes of this AD, a special detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. The examination is likely to make extensive use of specialized inspection techniques and/or equipment. Intricate cleaning and substantial access or disassembly procedure may be required.” Table 1.—Initial Inspections AWL No. Description Compliance time (whichever occurs later) Threshold Grace period 28-AWL-01 A detailed inspection of external wires over the center fuel tank for damaged clamps, wire chafing, and wire bundles in contact with the surface of the center fuel tank Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 72 months after the effective date of this AD. 8-AWL-05 A special detailed inspection of the bulkhead fitting bond for the hydraulic line tank penetration Before the accumulation of 25,000 total flight cycles, or within 72 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 60 months after the effective date of this AD. 8-AWL-18 A special detailed inspection of the lightning shield to ground termination on the out-of-tank fuel quantity indicating system to verify functional integrity Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 24 months after the effective date of this AD. 8-AWL-26 A special detailed inspection of the lightning shield to ground termination on the out-of-tank surge tank fuel level sensor to verify functional integrity Before the accumulation of 36,000 total flight cycles, or within 144 months since the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness, whichever occurs first Within 24 months after the effective date of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle ACO, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Appendix 1.—Implementing Fuel Tank System Airworthiness Limitations on Model 767-200, -300, -300F, and -400ER Series Airplanes AWL No. ALI/CDCCL ATA section or CMM document Task title Task No. 28-AWL-01 ALI AMM 28-11-00/601 External Wires Over the Center Tank Inspection 28-11-00-206-258. 28-AWL-02 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration 28-AWL-03 CDCCL AMM 28-22-07/401 Install the Fuel Lines and Fittings Varies with configuration. 28-AWL-04 CDCCL AMM 29-11-27/401 Install the Heat Exchanger 29-11-27-424-015. 28-AWL-05 ALI AMM 29-11-27/601 Bonding Resistance Check of the Heat Exchanger Lines 29-11-27-026-001. 28-AWL-06 CDCCL CMM 28-22-01, Revision 12; CMM 28-22-12, Revision 16; CMM 28-22-21, Revision 7; or subsequent revisions. 28-AWL-07 CDCCL AMM 28-22-03/401 Install the Housing of the Fuel Boost Pump 28-22-03-404-027. AMM 28-22-05/401 Install the Housing of the Override (or Override/jettison) Pump Varies with configuration. 28-AWL-08 CDCCL. 28-AWL-09 CDCCL SWPM 20-10-11 Wiring Assembly and Installation Configuration 28-AWL-10 CDCCL AMM 28-21-02/401 Install the Fueling Shutoff Valve 28-21-02-404-021. AMM 28-21-12/401 Install the Control Unit of the Fueling Shutoff Valve 28-21-12-404-021. 28-AWL-11 CDCCL CMM 28-41-68, Revision 4 or subsequent revisions 28-AWL-12 CDCCL CMM 28-40-56, Revision 4; CMM 28-40-59, Revision 4; CMM 28-40-62, Revision 3; CMM 28-41-68, Revision 4; CMM 28-41-01, Revision 5; CMM 28-41-07, Revision 4; CMM 28-41-09, Revision 6; CMM 28-41-30, Revision 1; CMM 28-41-33, Revision 2; CMM 28-41-34, Revision 1; CMM 28-41-35, Revision 1; CMM 28-41-36, Revision 7; CMM 28-41-39, Revision 7; CMM 28-41-41, Revision 5; CMM 28-41-42, Revision 0; or subsequent revisions. 28-AWL-13 CDCCL SWPM 20-14-12 Repair of Fuel Quantity Indicator System
(FQIS)Wire Harness AMM 28-41-09/401 Install the Tank Wiring Harness Varies with configuration. 28-AWL-14 CDCCL AMM 28-11-01/401 Install the Main Tank Access Door 28-11-01-404-005. AMM 28-11-02/401 Install the Auxiliary Tank Access Door 28-11-02-404-013. AMM 28-11-03/401 Install the Surge Tank Access Door 28-11-03-404-011. 28-AWL-15 CDCCL CMM 28-21-01, Revision 1 or subsequent revisions 28-AWL-16 CDCCL SWPM 20-14-12 Repair of Fuel Quantity Indicator System
(FQIS)Wire Harness AMM 28-21-11/401 Surge Tank Sensor Harness Installation 28-21-11-424-032. 28-AWL-17 CDCCL FIM 28-22-00/101. 28-AWL-18 ALI AMM 20-55-54/601 FQIS Wiring and Bonding Inspection/Check 20-55-54-206-002. 28-AWL-19 CDCCL SWPM 20-10-15 Assembly of Shield Ground Wires 28-AWL-20 ALI AMM 28-22-00/501 Override Pump Auto Shutoff Functional Test 28-22-00-725-529. 28-AWL-21 28-AWL-22 CDCCL AMM 28-41-24/401 Densitometer Hot Short Protector Installation 28-41-24-404-017. 28-AWL-23 CDCCL AMM 28-22-01/401 Install the Adapter Shaft of the Engine Fuel Shutoff Valve 28-22-01-404-030. AMM 28-22-02/401 Install the Adapter Shaft of the Engine Crossfeed Valve 28-22-02-404-023. AMM 28-22-11/401 Install the Actuator of the Engine Fuel Shutoff Valve 28-22-11-404-008. AMM 28-22-12/401 Install the Actuator of the Engine Fuel Crossfeed Valve 28-22-12-404-010. AMM 28-26-01/401 Install the Adapter Shaft of the Defueling Valve 28-26-01-404-059. AMM 28-26-02/401 Install the Defueling Valve Actuator 28-26-11-404-020. 28-AWL-24 CDCCL CMM 28-20-21. 28-AWL-25 CDCCL SWPM 20-10-15 Assembly of Shield Ground Wires 28-AWL-26 ALI AMM 20-55-54/601 Issued in Renton, Washington, on June 22, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-12817 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2007-28235; Airspace Docket No. 07-ANM-9] Proposed Establishment of Class E Airspace; Hulett, WY AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking. SUMMARY: This action proposes to establish Class E airspace at Hulett, WY. Additional controlled airspace is necessary to accommodate aircraft using a new Area Navigation
(RNAV)Global Positioning System
(GPS)Instrument Approach Procedure
(IAP)at Hulett Municipal Airport. The FAA is proposing this action to enhance the safety and management of aircraft operations at Hulett Municipal Airport, Hulett, WY. DATES: Comments must be received on or before August 17, 2007. ADDRESSES: Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room @12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. Telephone
(202)366-9826. You must identify FAA Docket No. FAA-2007-28235; Airspace Docket No. 07-ANM-9, at the beginning of your comments. You may also submit comments through the Internet at *http://dms.dot.gov.* FOR FURTHER INFORMATION CONTACT: Ed Haeseker, Federal Aviation Administration, Western Service Area Office, System Support Group, 1601 Lind Avenue, SW., Renton, WA 98057; telephone
(425)917-6714. SUPPLEMENTARY INFORMATION: Comments Invited Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA Docket No. FAA-2007-28235 and Airspace Docket No. 07-ANM-9) and be submitted in triplicate to Docket Operations (see “ ADDRESSES ” section for address and phone number). You may also submit comments through the Internet at *http://dms.dot.gov.* Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2007-28235 and Airspace Docket No. 07-ANM-9”. The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket. Availability of NPRM's An electronic copy of this document may be downloaded through the Internet at *http://dms.dot.gov.* Recently published rulemaking documents can also be accessed through the FAA's web page at *http://www.faa.gov* or the **Federal Register** 's web page at *http://www.gpoaccess.gov/fr/index.html.* You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the “ ADDRESSES ” section for the address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Area, System Support Group, 1601 Lind Avenue, SW., Renton, WA 98057. Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking,
(202)267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure. The Proposal The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) part 71 by establishing Class E airspace at Hulett, WY. Controlled airspace is necessary to accommodate aircraft using the new RNAV
(GPS)IAP at Hulett Municipal Airport. This action would enhance the safety and management of aircraft operations at Hulett Municipal Airport, Hulett, WY. Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9P, dated September 1, 2006, and effective September 15, 2006, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in this Order. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, would 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 71 Airspace, Incorporation by reference, Navigation (air). The Proposed Amendment Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of the FAA Order 7400.9P, Airspace Designations and Reporting Points, dated September 1, 2006, and effective September 15, 2006 is amended as follows: *Paragraph 6005* *Class E airspace areas extending upward from 700 feet or more above the surface of the earth.* ANM WY, E5 Hulett, WY [New] Hulett Municipal Airport, WY (Lat. 44°39′46″ N., long. 104°34′04″ W.) That airspace extending upward from 700 feet above the surface within an 8.0-mile radius of Hulett Municipal Airport; that airspace extending upward from 1,200 feet above the surface beginning at lat. 44°50′00″ N., long. 105°00′00″ W.; thence to lat. 44°50′00″ N., long. 104°00′00″ W.; thence south along long. 104°00′00″ W., to V-536; thence west along V-536 to Newcastle VOR; thence west on V-536 to lat. 44°09′00″ N., long. 105°00′00″ W.; thence to point of beginning. Issued in Seattle, Washington, on June 13, 2007. Clark Desing, Manager, System Support Group, Western Service Area. [FR Doc. E7-12793 Filed 7-2-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 878 [Docket No. 2006P-0071] General and Plastic Surgery Devices; Reclassification of the Tissue Adhesive for Topical Approximation of Skin Device AGENCY: Food and Drug Administration, HHS. ACTION: Proposed rule. SUMMARY: The Food and Drug Administration
(FDA)is proposing to reclassify the device, tissue adhesive for the topical approximation of skin, from class III (premarket approval) into class II (special controls). Tissue adhesives for non-topical uses would remain in class III and continue to require premarket approval applications (PMAs). FDA is proposing this reclassification in accordance with the Federal Food, Drug, and Cosmetic Act (the act). Elsewhere in this issue of the **Federal Register** , FDA is announcing the availability of a draft guidance document that would serve as the special control if FDA reclassifies this device. DATES: Submit written comments by September 4, 2007. See section IX of this document for the proposed effective date of a final rule based on this proposed rule. ADDRESSES: You may submit comments, identified by Docket No. 2006P-0071, by any of the following methods: *Electronic Submissions* Submit electronic comments in the following ways: • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the instructions for submitting comments. • Agency Web site: *http://www.fda.gov/dockets/ecomments* . Follow the instructions for submitting comments on the agency Web site. *Written Submissions* Submit written submissions in the following ways: • FAX: 301-827-6870. • Mail/Hand delivery/Courier [For paper, disk, or CD-ROM submissions]: Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. To ensure more timely processing of comments, FDA is no longer accepting comments submitted to the agency by e-mail. FDA encourages you to continue to submit electronic comments by using the Federal eRulemaking Portal or the agency Web site, as described in the Electronic Submissions portion of this paragraph. *Instructions* : All submissions received must include the agency name and Docket No. for this rulemaking. All comments received may be posted without change to *http://www.fda.gov/ohrms/dockets/default.htm* , including any personal information provided. For additional information on submitting comments, see the “Comments” heading of the SUPPLEMENTARY INFORMATION section of this document. *Docket* : For access to the docket to read background documents or comments received, go to *http://www.fda.gov/ohrms/dockets/default.htm* and insert the docket number(s), found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. FOR FURTHER INFORMATION CONTACT: George J. Mattamal, Center for Devices and Radiological Health (HFZ-410), Food and Drug Administration, 9200 Corporate Blvd., Rockville, MD 20850, 240-276-3619. SUPPLEMENTARY INFORMATION: I. Regulatory Authorities The act, as amended by the Medical Device Amendments of 1976 (the 1976 amendments) (Public Law 94-295), the Safe Medical Devices Act of 1990
(SMDA)(Public Law 101-629), and the Food and Drug Administration Modernization Act of 1997 (FDAMA) (Public Law 105-115), among other amendments, 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). The 1976 amendments broadened the definition of “device” in section 201(h) of the act (21 U.S.C. 321(h)) to include certain articles that were once regulated as drugs. Under the 1976 amendments, Congress classified all transitional devices, i.e., those devices previously regulated as new drugs, into class III. SMDA amended section 520(l) of the act (21 U.S.C. 360j(l)) to direct FDA to collect certain safety and effectiveness information from the manufacturers of transitional devices still remaining in class III to determine whether the devices should be reclassified into class II (special controls) or class I (general controls). The legislative history of the SMDA reflects congressional concern that many transitional devices were being overregulated in class III (H. Rept. 808, 101st Cong., 2d sess. 26-27 (1990); S. Rept. 513, 101st Cong., 2d sess. 27 (1990)). Accordingly, in the **Federal Register** of November 14, 1991 (56 FR 57960), FDA issued an order under section 520(l)(5)(A) of the act, requiring manufacturers of transitional devices, which included tissue adhesives for use in general surgery (47 FR 2810, January 19, 1982), to submit to FDA a summary of and a citation to any information known or otherwise available to them respecting the devices, including adverse safety or effectiveness information, that had not been submitted under section 519 of the act (21 U.S.C. 360i). Manufacturers were to submit the summaries and citations to FDA by January 13, 1992. However, because of misunderstandings and uncertainties regarding the information required by the order, and regarding whether the order applied to certain manufacturers' devices, many transitional class III device manufacturers failed to comply with the reporting requirement by January 13, 1992. Consequently, in the **Federal Register** of March 10, 1992 (57 FR 8462), FDA extended the reporting period to March 31, 1992. Section 520(l)(5)(B) of the act provides that, after the issuance of an order requiring manufacturers to submit any information known or otherwise available respecting the devices, but before December 1, 1992, FDA was to publish regulations either leaving transitional class III devices in class III or reclassifying them into class I or II. Subsequently, as permitted by section 520(l)(5)(C) of the act, in the **Federal Register** of November 30, 1992 (57 FR 56586), the agency published a notice extending the period for issuing such regulations until December 1, 1993. Due to limited resources, FDA was unable to publish the regulations before the December 1, 1993, deadline. II. Regulatory Background of the Device Transitional devices, those devices formerly regulated as drugs, were classified into class III by the statute and premarket approval was immediately required (section 520(l) of the act). The **Federal Register** of December 16, 1977 (42 FR 63472), listed transitional devices and stated the following: “The lists contained in this notice may not be an exhaustive inventory of products subject to section 520(l) of the act.” This notice did not specifically list “Tissue Adhesives.” The investigational new drug
(IND)and new drug applications
(NDAs)for products classified as transitional devices were shortly thereafter transferred to FDA's Center for Devices and Radiological Health (formerly the Bureau of Medical Devices). Applications for tissue adhesives were included in this list of products transferred. (FDA did list “injectable silicone” as a transitional device in the **Federal Register** of December 16, 1977. In the January 19, 1982, **Federal Register** notice (47 FR 2810) “tissue adhesive for use in general surgery,” was included as a transitional device under “injectable silicone.” This was a typographical error as “tissue adhesives” are not a subcategory of “injectable silicone.”) Since enactment of the 1976 amendments, FDA has approved several premarket approval
(PMA)applications and PMA supplements authorizing the commercial distribution of tissue adhesives in the United States. III. Description of the Device FDA has referred to this device, under review for reclassification, in previous notices as “tissue adhesive for use in general surgery;” however, FDA is proposing in this notice to revise the name and identification to more accurately identify the device. Under the proposal, the device proposed for reclassification into class II, would be: Tissue adhesives for the topical approximation of skin. Tissue adhesives for the topical approximation of skin devices, which may contain cyanoacrylate as the active ingredient, are intended for topical closure of surgical incisions, including laparoscopic incisions, and simple traumatic lacerations that have easily approximated skin edges. Tissue adhesives for the topical approximation of skin may be used in conjunction with, but not in place of, deep dermal stitches. FDA is also proposing the following identification for the devices that will remain in class III: A tissue adhesive for non-topical use, including adhesives intended for use in the embolization of brain arteriovenous malformation or ophthalmic surgery, is a device used for adhesion of internal tissues and vessels. IV. Recommendation of the Panel On February 9, 2006, Regulatory & Clinical Research Institute, Inc. (RCRI), Minneapolis MN, submitted a petition (Docket No. 2006P-0071) to FDA to reclassify tissue adhesive for soft tissue approximation from “Class III to Class II (special controls)” (Ref. 1). On May 15, 2006, the petitioner amended its petition to include several references from the scientific literature cited in the original petition (Ref. 2). On July 18, 2006, the petitioner again amended its petition to clarify that the use it was proposing for reclassification was only the topical approximation of skin (Ref. 3). In response to the petition, FDA consulted with the FDA's General and Plastic Surgery Devices Panel (the Panel), regarding reclassification of this device. The Panel discussed the device at an August 25, 2006, public meeting and unanimously recommended that the tissue adhesive for the topical approximation of skin be reclassified from class III into class II. The Panel also recommended that a class II guidance document, which the Panel thought should include several voluntary consensus standards, be the special control for the device. The Panel based the recommendations on the information provided by FDA; the presentations to the panel by the petitioner, other manufacturers, and FDA; the Panel's deliberations at the meeting; and the Panel's personal experience with the use of devices for the topical approximation of skin. The Panel did not consider the reclassification of any other use of tissue adhesives. V. Risks to Health After considering the information in the petition, the information presented at the Panel meeting, the Panel's recommendation, and Medical Device Reports, FDA has evaluated the risks to health associated with use of the tissue adhesive for the topical approximation of skin and determined that the following risks to health are associated with its use. A. Unintentional Bonding or Product Leaks Into Eyes Without adequate protection of the patient's eye, the adhesive may inadvertently leak onto the eyelids when tissue adhesive is used on the skin near the patient's eye, for example on the brow or forehead. If this occurs, this can lead to sealing the eyelids shut and can require surgical intervention to remove the adhesive and any bound skin. B. Wound Dehiscence Wound dehiscence, the subsequent separation of the edges of the wound, i.e., incision or laceration, during recovery is a risk of all surgical procedures and treatments of traumatic wounds. Complications can arise as a result of wound dehiscence, which include re-sealing the wound and surgical revision of the wound with adhesive or sutures. These complications have the potential to delay the patient's recovery. C. Adverse Tissue Reaction and Chemical Burns Tissue adhesive may be associated with adverse tissue reactions, including allergy, inflammation, foreign body reactions, erythema (redness), granuloma, and the exacerbation of asthma. In addition, fumes given off by the adhesive before or during polymerization can cause chemical burns. D. Infection Infection of the skin or soft tissue is a risk to health associated with all surgical procedures and wound treatment. If the tissue adhesive is not properly sterilized, it may contribute to an increased risk of infection. E. Applicator Malfunction Inadequate packaging of the device or user error when opening the packaging can result in damage to the applicator and subsequent malfunction. If an applicator malfunctions, surgery may be extended, resulting in additional time under anesthesia, or treatment may be delayed. In addition, if the adhesive is packaged in a glass container, lacerations to the user or the patient may result if the glass breaks. F. Delayed Polymerization Polymerization of the adhesive may be delayed, resulting in compromise of the wound, additional time under anesthesia, or delayed treatment. VI. Summary of the Reasons for the Reclassification FDA believes that the tissue adhesive for the topical approximation of skin device should be reclassified into class II because special controls, in addition to general controls, would provide reasonable assurance of the safety and effectiveness of the device. FDA believes there is sufficient information to establish special controls to provide such assurance. In addition to the potential risks to health associated with use of the tissue adhesive for the topical skin approximation device described in section V of this document, there is reasonable knowledge of the benefits of the device. Specifically, the tissue adhesive for the topical approximation of skin may prevent extended bleeding in the repair of surgical incisions and traumatic lacerations, promote healing of approximated wound edges, and reduce pain and recovery time. VII. Special Controls In addition to general controls, FDA believes that the draft guidance document entitled “Class II Special Controls Guidance Document: Tissue Adhesive for the Topical Approximation of Skin” (the class II special controls guidance document) is a special control adequate to address the risks to health associated with the use of the device described in section V of this document. FDA believes that the class II special controls guidance document, which incorporates voluntary consensus standards and describes labeling recommendations, in addition to general controls, provides reasonable assurance of the safety and effectiveness of the device. Elsewhere in this issue of the **Federal Register** , FDA is publishing a notice of availability of the draft class II special controls guidance document that the agency would use as the special control for this device. The draft class II special controls guidance document sets forth the information FDA believes should be included in premarket notification submissions (510(k)s) for the tissue adhesive for the topical approximation of skin. FDA has identified the risks to health associated with the use of the device in the first column of table 1 of this document and the recommended mitigation measures identified in the class II special controls guidance document in the second column of table 1. FDA believes that addressing these risks to health in a 510(k) in the manner identified in the class II special controls guidance document, or in an acceptable alternative manner, is necessary to provide reasonable assurance of the safety and effectiveness of the device. **Table 1.** Identified risk Recommended mitigation measures Unintentional Bonding or Product Leaks into Eyes Bench Testing Labeling Wound Dehiscence Bench Testing Shelf-Life Testing Animal Testing Labeling Adverse Tissue Reaction and Chemical Burns Biocompatibility Animal Testing Infection Bench Testing Sterility Applicator Malfunction Bench Testing Delayed Polymerization Bench Testing Animal Testing VIII. FDA's Findings As discussed previously in this document, FDA believes the tissue adhesive for the topical approximation of skin should be reclassified into class II because special controls, in addition to general controls, provide reasonable assurance of the safety and effectiveness of the device and because there is sufficient information to establish special controls to provide such assurance. FDA, therefore, is proposing to reclassify the device into class II and establish the draft class II special controls guidance document as a special control for the device. Tissue adhesives for non-topical use will remain in class III and continue to require PMAs. Section 510(m) of the act (21 U.S.C. 360) 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 provide reasonable assurance of the safety and effectiveness of the device. For this device, FDA believes that premarket notification is necessary to provide reasonable assurance of safety and effectiveness and, therefore, does not intend to exempt the device from the premarket notification requirements. IX. Effective Date FDA proposes that any final regulation based on this proposal become effective 30 days after its date of publication in the **Federal Register** . X. Environmental Impact The agency has determined under 21 CFR 25.34(b) that this proposed 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. XI. Analysis of Impacts FDA has examined the impacts of the proposed rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-602), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4)). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this proposed rule is not a significant regulatory action as defined by 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 when it is used for the topical approximation of skin, from class III to class II, will relieve manufacturers of the device of the cost of complying with the premarket approval requirements in section 515 of the act (21 U.S.C. 360e). Because reclassification will reduce regulatory costs with respect to this device, the agency certifies that the proposed 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 any 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 proposed rule to result in any 1-year expenditure that would meet or exceed this amount. XII. Federalism FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the proposed rule, if finalized, would not contain policies that would have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the agency tentatively concludes that the proposed rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement has not been prepared. XIII. Paperwork Reduction Act of 1995 FDA tentatively concludes that this proposed rule contains no new collections of information. Therefore, clearance by the Office of Management and Budget
(OMB)under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520) is not required. This proposed rule designates a guidance document as a special control. FDA also tentatively concludes that the draft special control guidance document does not contain new information collection provisions that are subject to review and clearance by OMB under the PRA. Elsewhere in this issue of the **Federal Register** , FDA is publishing a notice announcing the availability of that draft guidance document entitled “Class II Special Controls Guidance Document: Tissue Adhesive for the Topical Approximation of Skin,” which contains an analysis of the paperwork burden for the draft guidance. XIV. Comments Interested persons may submit to the Division of Dockets Management (see ADDRESSES ) written or electronic comments regarding this document. Submit a single copy of electronic comments or two paper copies of any mailed comments, except that individuals may submit one paper copy. Comments are to be identified with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday. XV. References The following references have 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. Regulatory & Clinical Research Institute, Inc. (RCRI), reclassification petition, Docket No. 2006P-0071, Minneapolis MN, February 9, 2006. 2. Regulatory & Clinical Research Institute, Inc., reclassification petition, Docket No. 2006P-0071, Minneapolis MN, May 15, 2006. 3. Regulatory & Clinical Research Institute, Inc., reclassification petition, Docket No. 2006P-0071, Minneapolis MN, July 18, 2006. 4. General and Plastic Surgery Devices Panel, Transcript, pp. 199 to 207, August 25, 2006. List of Subjects in 21 CFR Part 878 Medical devices. Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 878 be amended as follows: PART 878—GENERAL AND PLASTIC SURGERY DEVICES 1. The authority citation for 21 CFR part 878 continues to read as follows: Authority: 21 U.S.C. 351, 360, 360c, 360e, 360j, 371. 2. Section 878.4010 is added to subpart E to read as follows: § 878.4010 Tissue adhesive.
(a)*Tissue adhesives for the topical approximation of skin* —(1) *Identification* . Tissue adhesives for the topical approximation of skin are intended for topical closure of surgical incisions, including laparoscopic incisions, and simple traumatic lacerations that have easily approximated skin edges. Tissue adhesives for the topical approximation of skin may be used in conjunction with, but not in place of, deep dermal stitches.
(2)*Classification* . Class II (special controls). The special control for this device isEFDA's “Class II Special Controls Guidance Document: “Tissue Adhesive for the Topical Approximation of Skin.” See § 878.1(e) for the availability of this guidance document.
(b)*Tissue adhesives for non-topical use* —(1) *Identification* . A tissue adhesive for non-topical use, including adhesives intended for use in the embolization of brain arteriovenous malformation or for use in ophthalmic surgery, is a device used for adhesion of internal tissues and vessels.
(2)*Classification* . Class III (premarket approval). As of May 28, 1976, an approval under section 515 of the act is required before this device may be commercially distributed. See § 878.3. Dated: June 22, 2007. Linda S. Kahan, Deputy Director, Center for Devices and Radiological Health. [FR Doc. E7-12797 Filed 7-2-07; 8:45 am] BILLING CODE 4160-01-S ARCHITECTURAL AND TRANSPORTATION BARRIERS COMPLIANCE BOARD 36 CFR Parts 1193 and 1194 Telecommunications Act Accessibility Guidelines; Electronic and Information Technology Accessibility Standards AGENCY: Architectural and Transportation Barriers Compliance Board. ACTION: Notice of meeting. SUMMARY: The Architectural and Transportation Barriers Compliance Board (Access Board) has established a Telecommunications and Electronic and Information Technology Advisory Committee (Committee) to assist it in revising and updating accessibility guidelines for telecommunications products and accessibility standards for electronic and information technology. This notice announces the dates, time, and location of the next committee meeting. DATES: The meeting is scheduled for July 16-18, 2007 (beginning at 9 a.m. and ending at 5 p.m. each day). ADDRESSES: The meeting will be held at the National Science Foundation. Report to the National Science Foundation, 4201 Wilson Boulevard, Arlington, VA 22230, to pick up security passes and then report to 4121 Wilson Boulevard, Stafford Place II, Room 555, Arlington, VA 22230 for the meeting. FOR FURTHER INFORMATION CONTACT: Timothy Creagan, Office of Technical and Information Services, Architectural and Transportation Barriers Compliance Board, 1331 F Street, NW., suite 1000, Washington, DC 20004-1111. Telephone number: 202-272-0016 (Voice); 202-272-0082 (TTY). Electronic mail address: *creagan@access-board.gov.* SUPPLEMENTARY INFORMATION: The Architectural and Transportation Barriers Compliance Board (Access Board) established the Telecommunications and Electronic and Information Technology Advisory Committee (Committee) to assist it in revising and updating accessibility guidelines for telecommunications products and accessibility standards for electronic and information technology. The next committee meeting will take place on July 16-18, 2007. The meeting will focus on reports and discussion of recommendations from the following subcommittees: • Software, Web, and Content • General Interface Requirements and Functional Performance Criteria • Computer Hardware • Subpart A • Documentation and Technical Support • Telecommunications • Audio/Visual • Self Contained, Closed Products • Editorial Working Group The meeting will also discuss the status of the committee's work to date and when a final report may be ready for presentation to the Access Board. The full agenda for the July 16-18, 2007 meeting is available at *http://www.access-board.gov/sec508/refresh/agenda.htm.* Notices of future meetings will be published in the **Federal Register** . Information about the committee, including future meeting dates is available at *http://www.access-board.gov/sec508/update-index.htm* or at a special Web site created for the committee's work ( *http://teitac.org* ). The site includes a calendar for subcommittee meetings, e-mail distribution lists, and a “Wiki” ( *http://teitac.org/wiki/TEITAC_Wiki* ) which provides interactive online work space. Committee meetings are open to the public and interested persons can attend the meetings and communicate their views. Members of the public will have opportunities to address the committee on issues of interest to them and the committee during public comment periods scheduled on each day of the meeting. Members of groups or individuals who are not members of the committee are invited to participate on subcommittees; participation of this kind is very valuable to the advisory committee process. The meeting site is accessible to individuals with disabilities. Sign language interpreters, an assistive listening system, and real-time captioning will be provided. For the comfort of other participants, persons attending committee meetings are requested to refrain from using perfume, cologne, and other fragrances. Due to security measures at the National Science Foundation, all attendees must notify the Access Board's receptionist at 202-272-0007 or *receptionist@access-board.gov* by July 11, 2007 of their intent to attend the meeting. This notification is required for expeditious entry into the facility and will enable the Access Board to provide additional information as needed. Lawrence W. Roffee, Executive Director. [FR Doc. E7-12811 Filed 7-2-07; 8:45 am] BILLING CODE 8150-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R03-OAR-2007-0451; FRL-8333-5] Approval and Promulgation of Air Quality Implementation Plans; Delaware; Control of VOC Emissions from Crude Oil Lightering Operations AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: EPA is proposing to approve a State Implementation Plan
(SIP)revision submitted by the State of Delaware. This SIP revision pertains to the control of volatile organic compound
(VOC)emissions from crude oil lightering operations. This action is being taken under the Clean Air Act (CAA). DATES: Written comments must be received on or before August 2, 2007. ADDRESSES: Submit your comments, identified by Docket ID Number EPA-R03-OAR-2007-0451 by one of the following methods: A. *http://www.regulations.gov.* Follow the on-line instructions for submitting comments. B. *E-mail: cripps.christopher@epa.gov.* C. *Mail* : EPA-R03-OAR-2007-0451, Christopher Cripps, Acting Chief, Air Quality Planning Branch, Mailcode 3AP21, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. D. *Hand Delivery* : At the previously-listed EPA Region III address. 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-R03-OAR-2007-0451. 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* Web site 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 electronic docket are listed in the *www.regulations.gov* index. Although listed in the index, some information is not publicly available *i.e.* , 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 in *www.regulations.gov* or in hard copy during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal are available at the Delaware Department of Natural Resources & Environmental Control, 89 Kings Highway, P.O. Box 1401, Dover, Delaware 19901. FOR FURTHER INFORMATION CONTACT: Rose Quinto,
(215)814-2182, or by e-mail at *quinto.rose@epa.gov* . SUPPLEMENTARY INFORMATION: I. Background On May 2, 2007, the Delaware Department of Natural Resources and Environmental Control (DNREC) submitted a revision to its SIP for Regulation No. 1124, Section 46—Control of VOC Emissions from Crude Oil Lightering Operations. Lightering is the transfer at anchorage for some of the contents of a larger oil tanker to a smaller service vessel in order to allow the larger ship to navigate in shallower waters along the Delaware Bay. The VOC emissions released during crude oil lightering are a major source of VOC released in Delaware. II. Summary of SIP Revision Delaware's Regulation No. 1124, Section 46, applies to the owner or operator of a lightering service that carries out crude oil lightering operations in the waters of Delaware which includes the Counties of New Castle, Kent and Sussex. This regulation includes standards when carrying out a lightering operation by vapor balancing. Vapor balancing is the collection and transfer of vapors displaced by the incoming crude oil from the cargo tank of a service vessel into a cargo tank of the ship to be lightered. A compliance schedule is also included in the regulation that includes compliance standards; maximum allowable uncontrolled lightering volume; calculation of the total of uncontrolled lightering for any given lightering operation; VOC emission reductions achieved by the lightering services to below the maximum allowable uncontrolled lightering volume; annual audits of lightering service records to identify the frequency and duration of VOC ventings from the ships to be lightered; and ozone action day limitations. In addition, a compliance plan will be developed and implemented that describes how initial and ongoing compliance will be demonstrated. Another requirement of the regulation is that owner or operator of an existing lightering service is to keep records specified in the regulation for at least five years in a readily accessible location, which is the service vessel. The regulation also includes reporting requirements. Implementation of the provisions of this regulation will result in the reduction of VOCs released during crude oil lightering operations. The regulation requires the increased use of vapor balancing equipment over a reasonable time period that the industry has indicated to allow the changes to be made to the vessels or acquire newer vessels. The first regulatory deadline will be an 80 percent limit to uncontrolled lightering out of all crude oil lightering volumes by May 1, 2008. This level will reduce to 61 percent by May 1, 2010, and again be reduced to 43 percent by May 1, 2012. III. Proposed Action EPA is proposing to approve the Delaware SIP revision for Regulation No. 1124, Section 46-Control of VOC Emissions from Crude Oil Lightering Operations submitted on May 2, 2007. This regulation will reduce VOC emissions released during crude oil lightering operations in the State of Delaware. These reductions will aide in attaining and maintaining the Federal health-based air quality standard for the 8-hour ozone. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action. IV. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, 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)). This action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed 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.* ). Because this rule proposes to approve 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). This proposed rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between 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), nor will it 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), because it merely proposes to approve a state rule implementing a Federal requirement, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard. 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. 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. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This proposed rule, pertaining to Delaware's control of VOC emissions from crude oil lightering operations, does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. Authority: 42 U.S.C. 7401 *et seq.* Dated: June 22, 2007. Donald S. Welsh, Regional Administrator, Region III. [FR Doc. 07-3227 Filed 7-2-07; 8:45 am]
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  • 14 CFR 71
  • 1 CFR 51
  • 15 CFR 285
  • 17 CFR 240.10
  • 17 CFR 242.202
  • 17 CFR 240.19
  • Pub. L. 104-121
  • 110 Stat. 857
  • 17 CFR 242.10
  • 20 CFR 402
  • 21 CFR 880
  • 42 CFR 84
  • 21 CFR 807
  • 5 USC 601-612
  • Pub. L. 104-4
  • 44 USC 3501-3520
  • 40 CFR 63
  • 40 CFR 63.11146
  • 40 CFR 63.11153
  • 40 CFR 2
  • 40 CFR 63.11148
  • 40 CFR 63.11148(a)(2)(ii)
  • 40 CFR 63.11150
  • 40 CFR 63.11157(b)(5)
  • 40 CFR 9
  • Pub. L. 104-113
  • 48 CFR 9903
  • Pub. L. 108-136
  • Pub. L. 104-106
  • Pub. L. 96-511
  • Pub. L. 100-679
  • 102 Stat. 4056
  • 41 USC 422
  • 14 CFR 39
  • 21 CFR 878
  • Pub. L. 94-295
  • Pub. L. 101-629
  • Pub. L. 105-115
  • 5 USC 601-602
  • 40 CFR 52
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