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Code · REGISTER · 2007-07-16 · Federal Aviation Administration (FAA), DOT · Rules and Regulations

Rules and Regulations. Final rule

42,735 words·~194 min read·/register/2007/07/16/07-3455

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

BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P; 6720-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 97 [Docket No. 30558 Amdt. No. 3225] Standard Instrument Approach Procedures, Weather Takeoff Minimums; Miscellaneous Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This amendment establishes, amends, suspends, or revokes Standard Instrument Approach Procedures (SIAPs) and/or Weather Takeoff Minimums for operations at certain airports.
These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, addition of new obstacles, or changes in air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports. DATES: This rule is effective July 16, 2007.
The compliance date for each SIAP and/or Weather Takeoff Minimums is specified in the amendatory provisions. The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of July 16, 2007. ADDRESSES: Availability of matters incorporated by reference in the amendment is as follows: *For Examination* — 1. FAA Rules Docket, FAA Headquarters Building, 800 Independence Avenue, SW., Washington, DC 20591; 2. The FAA Regional Office of the region in which the affected airport is located; 3.
The National Flight Procedures Office, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or, 4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* . *For Purchase* —Individual SIAP and Weather Takeoff Minimums copies may be obtained from: 1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building, 800 Independence Avenue, SW., Washington, DC 20591; or 2.
The FAA Regional Office of the region in which the affected airport is located. *By Subscription* —Copies of all SIAPs and Weather Takeoff Minimums mailed once every 2 weeks, are for sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. FOR FURTHER INFORMATION CONTACT: Donald P. Pate, Flight Procedure Standards Branch (AFS-420), Flight Technologies and Programs Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd.
Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082 Oklahoma City, OK. 73125) telephone:
(405)954-4164. SUPPLEMENTARY INFORMATION: This amendment to Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), establishes, amends, suspends, or revokes SIAPs and/or Weather Takeoff Minimums. The complete regulatory description of each SIAP and/or Weather Takeoff Minimums is contained in official FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are identified as FAA Forms 8260-3, 8260-4, 8260-5 and 8260-15A. Materials incorporated by reference are available for examination or purchase as stated above. The large number of SIAPs and/or Weather Takeoff Minimums, their complex nature, and the need for a special format make their verbatim publication in the **Federal Register** expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs and/or Weather Takeoff Minimums but refer to their depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP and/or Weather Takeoff Minimums contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR sections, with the types and effective dates of the SIAPs and/or Weather Takeoff Minimums. This amendment also identifies the airport, its location, the procedure identification and the amendment number. The Rule This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP and/or Weather Takeoff Minimums as contained in the transmittal. Some SIAP and/or Weather Takeoff Minimums amendments may have been previously issued by the FAA in a Flight Data Center
(FDC)Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP, and/or Weather Takeoff Minimums amendments may require making them effective in less than 30 days. For the remaining SIAPs and/or Weather Takeoff Minimums, an effective date at least 30 days after publication is provided. Further, the SIAPs and/or Weather Takeoff Minimums contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and/or Weather Takeoff Minimums, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs and/or Weather Takeoff Minimums and safety in air commerce, I find that notice and public procedure before adopting these SIAPs and/or Weather Takeoff Minimums are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs and/or Weather Takeoff Minimums effective in less than 30 days. Conclusion The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. List of Subjects in 14 CFR Part 97 Air Traffic Control, Airports, Incorporation by reference, and Navigation (Air). Issued in Washington, DC on June 29, 2007. James J. Ballough, Director, Flight Standards Service. Adoption of the Amendment Accordingly, pursuant to the authority delegated to me, under Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or revoking Standard Instrument Approach Procedures and Weather Takeoff Minimums effective at 0901 UTC on the dates specified, as follows: PART 97—STANDARD INSTRUMENT APPROACH PROCEDURES 1. The authority citation for part 97 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722. 2. Part 97 is amended to read as follows: Effective 30 Aug 2007 Little Rock, AR, Adams Field, LOC RWY 22L, Orig Little Rock, AR, Adams Field, ILS RWY 22L, Amdt 3A, CANCELLED Glendale, AZ, Glendale Muni, RNAV
(GPS)RWY 19, Amdt 1 Glendale, AZ, Glendale Muni, Takeoff Minimums and Obstacle DP, Amdt 2 Tucson, AZ, Tucson Intl, ILS OR LOC RWY 11L, Amdt 14 Tucson, AZ, Tucson Intl, LOC/DME BC RWY 29R, Amdt 8 Bishop, CA, Eastern Sierra Rgnl, RNAV
(RNP)RWY 30, Orig Hanford, CA, Hanford Muni, RNAV
(GPS)RWY 32, Orig-A San Francisco, CA, San Francisco Intl, RNAV
(RNP)Y RWY 10R, Orig Madison, CT, Griswold, VOR OR GPS-A, Amdt 8, CANCELLED Washington, DC, Washington Dulles Intl, RNAV
(RNP)Z RWY 1L, Orig Washington, DC, Washington Dulles Intl, RNAV
(RNP)Z RWY 1R, Orig Washington, DC, Washington Dulles Intl, RNAV
(RNP)Z RWY 19L, Orig Washington, DC, Washington Dulles Intl, RNAV
(RNP)Z RWY 19R, Orig Washington, DC, Washington Dulles Intl, RNAV
(GPS)Y RWY 19L, Amdt 1 Washington, DC, Washington Dulles Intl, RNAV
(GPS)Y RWY 19R, Amdt 2 Gainesville, FL, Gainesville Rgnl, RNAV
(GPS)RWY 7, Amdt 1 Gainesville, FL, Gainesville Rgnl, RNAV
(GPS)RWY 25, Amdt 1 Miami, FL, Miami Intl, ILS OR LOC RWY 8R, Amdt 30 Miami, FL, Miami Intl, ILS OR LOC RWY 9, Amdt 10 Miami, FL, Miami Intl, ILS OR LOC RWY 12, Amdt 5 Miami, FL, Miami Intl, ILS OR LOC RWY 26L, Amdt 15 Miami, FL, Miami Intl, ILS OR LOC RWY 27, Amdt 24 Miami, FL, Miami Intl, ILS OR LOC RWY 30, Amdt 1 Miami, FL, Miami Intl, RNAV
(GPS)Z RWY 8R, Amdt 1 Miami, FL, Miami Intl, RNAV
(GPS)Z RWY 9, Amdt 1 Miami, FL, Miami Intl, RNAV
(GPS)Z RWY 12, Amdt 1 Miami, FL, Miami Intl, RNAV
(GPS)Z RWY 26L, Amdt 1 Miami, FL, Miami Intl, RNAV
(GPS)Z RWY 27, Amdt 1 Miami, FL, Miami Intl, RNAV
(GPS)Z RWY 30, Amdt 1 Miami, FL, Miami Intl, RNAV
(RNP)Y RWY 8R, Orig Miami, FL, Miami Intl, RNAV
(RNP)Y RWY 9, Orig Miami, FL, Miami Intl, RNAV
(RNP)Y RWY 12, Orig Miami, FL, Miami Intl, RNAV
(RNP)Y RWY 26L, Orig Miami, FL, Miami Intl, RNAV
(RNP)Y RWY 27, Orig Miami, FL, Miami Intl, RNAV
(RNP)Y RWY 30, Orig Sarasota (Bradenton), FL, Sarasota/Bradenton Intl, RNAV
(GPS)RWY 14, Amdt 1 Sarasota (Bradenton), FL, Sarasota/Bradenton Intl, RNAV
(GPS)RWY 32, Amdt 1 Albany, GA, Southwest Georgia Regional, VOR OR TACAN RWY 16, Amdt 26 Albany, GA, Southwest Georgia Regional, VOR/DME RNAV OR GPS RWY 34, Amdt 4, CANCELLED Gainesville, GA, Lee Gilmer Memorial, RNAV
(GPS)RWY 4, Orig Gainesville, GA, Lee Gilmer Memorial, RNAV
(GPS)RWY 22, Orig Gainesville, GA, Lee Gilmer Memorial, NDB RWY 4, Amdt 5 Gainesville, GA, Lee Gilmer Memorial, Takeoff Minimums and Obstacle DP, Amdt 1 Jefferson, GA, Jackson County, RNAV
(GPS)RWY 16, Orig Jefferson, GA, Jackson County, RNAV
(GPS)RWY 34, Orig Jefferson, GA, Jackson County, GPS RWY 16, Orig, CANCELLED Jefferson, GA, Jackson County, GPS RWY 34, Orig, CANCELLED Perry, GA, Perry-Houston County, RNAV
(GPS)RWY 18, Orig Perry, GA, Perry-Houston County, RNAV
(GPS)RWY 36, Orig Hyannis, MA, Barnstable Muni-Boardman/Polando Field, VOR RWY 6, Amdt 9 Baltimore, MD, Baltimore/Washington Intl Thurgood Marshal, RNAV
(RNP)Z RWY 33L, Orig Baltimore, MD, Martin State, ILS OR LOC RWY 33, Amdt 7 Easton, MD, Easton/Newnam Field, RNAV
(GPS)RWY 4, Orig Easton, MD, Easton/Newnam Field, ILS OR LOC/DME RWY 4, Amdt 1 Easton, MD, Easton/Newnam Field, Takeoff Minimums and Obstacle DP, Orig Bar Harbor, ME, Hancock County-Bar Harbor, RNAV
(GPS)RWY 22, Orig Bar Harbor, ME, Hancock County-Bar Harbor, ILS OR LOC RWY 22, Amdt 5 Bad Axe, MI, Huron County Memorial, RNAV
(GPS)RWY 17, Orig Bad Axe, MI, Huron County Memorial, RNAV
(GPS)RWY 35, Orig Bad Axe, MI, Huron County Memorial, VOR RWY 35, Amdt 1 Detroit Lakes, MN, Detroit Lakes-Wething Field, RNAV
(GPS)RWY 13, Amdt 1 Detroit Lakes, MN, Detroit Lakes-Wething Field, RNAV
(GPS)RWY 31, Amdt 1 Minneapolis, MN, Minneapolis-St. Paul Intl/Wold Chamb, ILS RWY 4, Amdt 27, CANCELLED Minneapolis, MN, Minneapolis-St. Paul Intl/Wold Chamb, LOC RWY 4, Orig Minneapolis, MN, Minneapolis-St. Paul Intl/Wold Chambe, CONVERGING ILS RWY 35, Amdt 1 Minneapolis, MN, Minneapolis-St. Paul Intl/Wold Chamb, ILS OR LOC RWY 35, Amdt 1, ILS RWY 35 (CAT II), ILS RWY 35 (CATIII) Minneapolis, MN, Minneapolis-St. Paul Intl/Wold Chamb, RNAV
(GPS)Z RWY 35, Amdt 1 Minneapolis, MN, Minneapolis-St. Paul Intl/Wold Chamb, RNAV
(RNP)Y RWY 35, Orig Poplar Bluff, MO, Poplar Bluff Muni, RNAV
(GPS)RWY 18, Orig Poplar Bluff, MO, Poplar Bluff Muni, RNAV
(GPS)RWY 36, Orig Poplar Bluff, MO, Poplar Bluff Muni, GPS RWY 18, Orig-B, CANCELLED Poplar Bluff, MO, Poplar Bluff Muni, GPS RWY 36, Orig-A, CANCELLED Poplar Bluff, MO, Poplar Bluff Muni, Takeoff Minimums and Obstacle DP, Amdt 1 Potosi, MO, Washington County Airport, RNAV
(GPS)RWY 2, Orig-A Potosi, MO, Washington County Airport, RNAV
(GPS)RWY 20, Orig-A St Louis, MO, Lambert-St Louis Intl, LDA/DME RWY 12L, Amdt 5 Pascagoula, MS, Trent Lott Intl, Takeoff Minimums and Obstacle DP, Orig Grand Forks, ND, Grand Forks Intl, RNAV
(GPS)RWY 8, Orig Grand Forks, ND, Grand Forks Intl, RNAV
(GPS)RWY 26, Amdt 1 Reno, NV, Reno/Stead, GPS-B, Orig, CANCELLED Buffalo, NY, Buffalo Niagara Intl, NDB RWY 5, Amdt 11, CANCELLED Buffalo, NY, Buffalo Niagara Intl, Takeoff Minimums and Obstacle DP, Amdt 5 Austin, TX, Austin-Bergstrom Intl, ILS OR LOC RWY 17R, Amdt 3 Austin, TX, Austin-Bergstrom Intl, ILS OR LOC RWY 35L, Amdt 4 Charlottesville, VA, Charlottesville-Albemarle, RNAV
(GPS)RWY 3, Amdt 2 Newport News, VA, Newport News/Williamsburg Intl, VA, LOC/DME RWY 20, Orig Newport News, VA, Newport News/Williamsburg Intl, Takeoff Minimums and Obstacle DP, Orig Richmond/Ashland, VA, Hanover County Muni, RNAV
(GPS)RWY 16, Orig Richmond/Ashland, VA, Hanover County Muni, GPS RWY 16, Amdt 1B, CANCELLED Richmond, VA, Richmond Intl, ILS OR LOC RWY 34, Amdt 13C, ILS RWY 34 (CAT II), ILS RWY 34 (CATIII) Hoquiam, WA, Bowerman, ILS OR LOC/DME RWY 24, Amdt 2 Hoquiam, WA, Bowerman, RNAV
(GPS)RWY 6, Orig Hoquiam, WA, Bowerman, RNAV
(GPS)RWY 24, Orig Hoquiam, WA, Bowerman, VOR/DME RWY 24, Amdt 6 Hoquiam, WA, Bowerman, VOR RWY 6, Amdt 15 Baraboo, WI, Baraboo Wisconsin Dells, RNAV
(GPS)RWY 1, Orig Baraboo, WI, Baraboo Wisconsin Dells, RNAV
(GPS)RWY 19, Orig Baraboo, WI, Baraboo Wisconsin Dells, GPS RWY 1, Orig, CANCELLED Menomonie, WI, Menomonie Municipal-Score Field, VOR/DME RWY 27, Amdt 1 Menomonie, WI, Menomonie Municipal-Score Field, GPS RWY 27, Orig, CANCELLED Cheyenne, WY, Cheyenne Regional/Jerry Olson Field, ILS OR LOC RWY 27, Amdt 34A Cheyenne, WY, Cheyenne Regional/Jerry Olson Field, RNAV
(GPS)RWY 9, Orig-A Cheyenne, WY, Cheyenne Regional/Jerry Olson Field, RNAV
(GPS)RWY 13, Orig-A Cheyenne, WY, Cheyenne Regional/Jerry Olson Field, RNAV
(GPS)RWY 27, Orig-B Cheyenne, WY, Cheyenne Regional/Jerry Olson Field, RNAV
(GPS)RWY 31, Orig-A [FR Doc. E7-13224 Filed 7-13-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Parts 38 and 284 [Docket Nos. RM96-1-027 and RM05-5-001; Order No. 698] Standards for Business Practices for Interstate Natural Gas Pipelines; Standards for Business Practices for Public Utilities Issued June 25, 2007. AGENCY: Federal Energy Regulatory Commission. ACTION: Final rule. SUMMARY: The Federal Energy Regulatory Commission (Commission) is amending its open access regulations governing standards for business practices and electronic communications with interstate natural gas pipelines and public utilities. The Commission is incorporating by reference certain standards promulgated by the Wholesale Gas Quadrant
(WGQ)and the Wholesale Electric Quadrant
(WEQ)of the North American Energy Standards Board (NAESB). Through this rulemaking, the Commission is seeking to improve coordination between the gas and electric industries in order to improve communications about scheduling of gas-fired generators. DATES: *Effective Dates:* This rule will become effective August 15, 2007. Natural gas pipelines and public utilities are required to implement these standards and file a statement demonstrating compliance by November 1, 2007. FOR FURTHER INFORMATION CONTACT: Michael Goldenberg, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 202-502-8685. Kay Morice, Office of Energy Markets and Reliability, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 202-502-6507. SUPPLEMENTARY INFORMATION: Table of Contents Paragraph Nos. I. Background 2 II. Discussion 10 A. Incorporation by Reference of NAESB Standards 10 1. Terminology 17 2. WEQ Standard 011-0.1/WGQ Standard 0.2.1 22 3. WEQ Standard 011-1.2/WGQ Standard 0.3.12 24 4. WEQ Standard 011-1.3/WGQ Standard 0.3.13 28 5. WEQ Standard 011-1.4 and WGQ Standard 0.3.14 35 6. WEQ Standard 011-1.5 37 7. WEQ Standard 011-1.6/WGQ Standard 0.3.15 42 8. Additional Issue 48 B. Additional Issues Raised by NAESB 50 1. Use of Gas Indices for Pricing Capacity Release Transactions 51 2. Pipelines' Ability to Permit Shippers to Choose Alternate Delivery Points 58 3. Changes to the Intraday Nomination Gas Schedule 64 III. Implementation Dates and Procedures 70 IV. Notice of Use of Voluntary Consensus Standards 71 V. Information Collection Statement 72 VI. Environmental Analysis 78 VII. Regulatory Flexibility Act 79 VIII. Document Availability 80 IX. Effective Date and Congressional Notification 82 1. The Federal Energy Regulatory Commission (Commission) is amending parts 38 and 284 of its open access regulations governing standards for business practices and electronic communications with interstate natural gas pipelines and public utilities. The Commission is incorporating by reference certain standards promulgated by the North American Energy Standards Board (NAESB). 1 Incorporation by reference of these standards will establish communication protocols between interstate pipelines and power plant operators and transmission owners and operators. This will help improve coordination between the gas and electric industries in order to improve communications about scheduling of gas-fired generators. Improved communications should enhance reliability in both industries. 1 The standards for the Wholesale Electric Quadrant are: Gas/Electric Coordination Standards WEQ-001-0.1 through WEQ-011-0.3 and WEQ-011-1.1 through WEQ-011-1.6. The standards for the Wholesale Gas Quadrant are: Additional Standards, Definitions 0.2.1 through 0.2.3 and Standards 0.3.11 through 0.3.15. I. Background 2. NAESB is a non-profit, private standards development organization established in January 2002 to develop voluntary standards and model business practices designed to promote more competitive and efficient natural gas and electric service. Since 1995, NAESB and its predecessor, the Gas Industry Standards Board, have been accredited members of the American National Standards Institute (ANSI), complying with ANSI's requirements that its standards reflect a consensus of the affected industries. 3. NAESB's standards include business practices that streamline the transactional processes of the natural gas and electric industries, as well as communication protocols and related standards designed to improve the efficiency of communication within each industry. NAESB supports all four quadrants of the gas and electric industries—wholesale gas, wholesale electricity, retail gas, and retail electricity—and recognizes the ongoing convergence of the gas and electric businesses by ensuring that its standards receive the input of all industry quadrants when appropriate. All participants in the gas and electric industries are eligible to join NAESB, belong to one or more quadrant(s), and participate in standards development. 4. NAESB's Wholesale Gas Quadrant
(WGQ)is composed of five industry segments: Pipelines, producers, local distribution companies, end users, and services (including marketers and computer service companies). NAESB's Wholesale Electric Quadrant
(WEQ)now includes six industry segments: Transmission, generation, marketer/brokers, distribution/load serving entities, end users, and independent grid planners/operators. NAESB's procedures ensure that all industry members can have input into the development of a standard, whether or not they are members of NAESB, and each standard NAESB adopts is supported by a consensus of the relevant industry segments. 5. Since 1996, in Order No. 587 and subsequent orders, the Commission, through its notice-and-comment rulemaking process, adopted relevant gas standards by incorporating these standards by reference into its regulations. 2 On April 25, 2006, the Commission by a similar process incorporated by reference the first set of NAESB electric standards. 3 2 *Standards For Business Practices Of Interstate Natural Gas Pipelines,* Order No. 587, 61 FR 39053 (July 26, 1996), FERC Stats. & Regs., Regulations Preambles July 1996-December 2000 ¶ 31,038 (July 17, 1996). 3 *Standards for Business Practices and Communication Protocols for Public Utilities,* Order No. 676, 71 FR 26199 (May 4, 2006), FERC Stats. & Regs. ¶ 31,216 (Apr. 25, 2006). 6. In January 2004, a cold snap highlighted the need for better coordination and communication between the gas and electric industries as coincident peaks occurred in both industries making the acquisition of gas and transportation by power plant operators more difficult. In response to this need, in early 2004, NAESB established a Gas-Electric Coordination Task Force to examine issues related to the interrelationship of the gas and electric industries and identify potential areas for improved coordination through standardization. Because of the importance of such coordination, the NAESB Board of Directors established a Gas-Electric Interdependency Committee in September 2004 to review coordination issues and identify potential areas for standards development. 7. As a result of these efforts, on June 27, 2005, NAESB filed a status report with the Commission. The report included ten business practice standards jointly developed by the wholesale gas and electric quadrants, 4 the first such collaboration between the two quadrants. The standards, in general, address communication processes between pipelines, power plant operators, and transmission operators. 5 4 Seven of these ten standards apply to both the gas and electric industries. 5 On June 28, 2006, NAESB filed a report advising that the following permanent numbers have been assigned to these standards. The standards for the Wholesale Electric Quadrant are Gas/Electric Coordination Standards WEQ-011-0.1 through WEQ-011-0.3 and WEQ-011-1.1 through WEQ-011-1.6. The standards for the Wholesale Gas Quadrant are: Additional Standards, Definitions 0.2.1 through 0.2.3 and Standards 0.3.11 through 0.3.15. 8. Additionally, the report highlighted 13 issues involving gas and electric interdependency. On February 24, 2006, NAESB filed a final report (Final Report) with the Commission on the efforts of the Gas-Electric Interdependency Committee. Based on the 13 issues, the Final Report identified six potential areas where Commission guidance could assist NAESB in developing new or updated business practices to improve coordination between the gas and electric industries. 9. On October 25, 2006, the Commission issued a Notice of Proposed Rulemaking
(NOPR)6 that proposed to incorporate by reference the WEQ's standards, Gas/Electric Coordination Standards WEQ-011-0.1 through WEQ-011-0.3 and WEQ-011-1.1 through WEQ-011.1.6 and the WGQ's standards, Additional Standards, Definitions 0.2.1 through 0.2.3 and Standards 0.3.11 through 0.3.15. The Commission also provided guidance on the six areas of potential standards development addressed by NAESB. Fifteen comments 7 and one reply comment were filed. 8 6 *Standards for Business Practices for Interstate Natural Gas Pipelines; Standards for Business Practices for Public Utilities,* 71 FR 64,655 (Nov. 3, 2006). 7 Those filing comments are: The ISO/RTO Council (IRC), the Interstate Natural Gas Association of America (INGAA), ISO New England (ISO-NE), NiSource Gas Transmission and Storage (NiSource), FPL Energy, LLC (FPL Energy), Electric Power Supply Association (EPSA), Tennessee Valley Authority (TVA), Florida Cities, El Paso Corporation Pipeline Group (El Paso), Salt River Project Agricultural Improvement and Power District (Salt River), Natural Gas Supply Association (NGSA), Duke Energy Gas Transmission, LLC (Duke), American Gas Association (AGA), the Carolina Gas Transmission Corporation (Carolina Gas), and Dominion Resources, Inc. (Dominion). 8 AGA filed reply comments. II. Discussion A. Incorporation by Reference of NAESB Standards 10. The Commission is amending parts 38 and 284 of its regulations to incorporate by reference the NAESB WEQ and WGQ definitions and business practice standards providing for coordination and communication between natural gas pipelines and the various electric industry operators, including Regional Transmission Organizations (RTOs), Independent System Operators
(ISOs)and gas-fired generators. The Commission also is amending section 38.1 so that it applies to public utilities that own, operate or control facilities used to effectuate wholesale power sales. 11. Pipelines and public utilities are required to implement these standards by November 1, 2007. However, pipelines and public utilities are not required to make tariff filings to include these standards in their tariffs at this time. These standards will be included in tariffs when the pipelines and utilities file to incorporate into their tariffs the next revised version of the NAESB standards. However, for the two standards requiring communication procedures to be established, 9 the Commission is requiring pipelines and public utilities to demonstrate compliance by filing a statement by November 1, 2007, as to whether they have established the required procedures. 9 These standards are WEQ Standard 011-1.2/WGQ Standard 0.3.12; and WEQ Standard 011-1.6/WGQ Standard 0.3.15. 12. The coordination and communication required by these standards will help improve the reliability of both the gas and electric industries by ensuring that all parties have information necessary for the scheduling and dispatch of natural gas-fired generation, and for the scheduling of the natural gas transportation necessary to supply fuel to these generators. The standards, for example, would require gas-fired power plant operators and pipelines to establish procedures to communicate material changes in circumstances that may affect hourly flow rates. These standards ensure that pipelines have relevant planning information that will assist in maintaining the operational integrity and reliability of pipeline service, as well as providing gas-fired power plant operators with information as to whether hourly flow deviations can be honored. 13. The standards further improve communication by requiring electric transmission operators and power plant operators to sign up to receive from connecting pipelines operational flow orders and other critical notices. These standards ensure that operators of the electric grid can stay abreast of developments on gas pipelines that can affect the reliability of electric service. The standards require that, upon request, a gas-fired power plant operator must provide to the appropriate independent electric balancing authority or electric reliability coordinator pertinent information regarding its service levels for gas transportation (firm or interruptible) and for gas supply (firm, fixed or variable quantity, or interruptible). This information should assist reliability coordinators in assessing the relative reliability of various gas-fired generators. 14. A consensus of the industry considered this language in NAESB's balanced process beginning in 2004 and leading up to NAESB's filing on June 27, 2005. All parties were welcome to participate in this process and participation was broad. No party expresses concern or otherwise indicates that NAESB's process was flawed. 15. As the Commission found in Order Nos. 587 and 676, adoption of consensus standards is appropriate because the consensus process helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of all segments of the industry. Moreover, since the industry itself has to conduct business under these standards, the Commission's regulations should reflect those standards that have the widest possible support. In section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTT&AA), Congress affirmatively requires federal agencies to use technical standards developed by voluntary consensus standards organizations, like NAESB, as means to carry out policy objectives or activities. 10 10 Pub L. No. 104-113, § 12(d), 110 Stat. 775 (1996), 15 U.S.C. 272 note (1997). 16. A majority of commenters support the Commission's goal of increased communication between the gas and electric industries, and therefore do not object to incorporation of the standards into the Commission's regulations. 11 Dominion states that the communication requirements are important, and asks that the Commission continue to develop policies that provide for even greater levels of gas-electric coordination. Some participants, while not objecting to the standards, raise concerns and suggest changes to the language. These issues are addressed below. 11 *E.g.,* AGA, Carolina Gas, Dominion, Duke, El Paso, EPSA, Florida Cities, FPL Energy, INGAA, IRC, NiSource, Salt River, and TVA. 1. Terminology Comments 17. IRC comments that NAESB's standards use a number of terms not commonly used in the electric industry (such as “Power Plant Operator”) and suggests that the Commission direct NAESB to adopt the terminology in the North American Electric Reliability Council
(NERC)Functional Model, which contains a detailed set of functional definitions, in order to eliminate any potential for confusion. 12 12 IRC Comments at 2. The “functional definitions” referred to by IRC are available on the Web site of the North American Electric Reliability Council at *http://www.nerc.com/~filez/functionalmodel.html.* 18. IRC also states that as currently drafted, the standards appear to apply terms inconsistently, noting that the standards appear to substitute the term “independent Balancing Authority” for ISOs/RTOs in some instances. IRC argues that the NAESB standards require ISOs/RTOs to bear significant responsibilities, but do not appear to require balancing authorities other than ISOs/RTOs or certain other independent entities to carry out responsibilities under the standards. IRC also notes that the standards include references to other NAESB standards that are not specifically identified, *i.e.* references to other “related” WGQ standards without providing any indication of which standards are “related.” 13 13 *Id.* at 3. 19. ISO-NE suggests additional definitions be added to the WEQ and WGQ standards. It proposes a new Definition D4, which would define “Directly Connected TSP”, and a new Definition D5, which would identify “Communication Standards.” Definition D5 would be used to supplement WEQ Standard 011-1.1/WGQ Standard 0.3.11, and, in ISO-NE's view, these definitions would create greater consistency and clarity among the standards. Commission Determination 20. We do not find a need to revise the terminology used in the standards. Those protesting the terminology do not object to the substance of the standards. All of the relevant parties were, or could have been, involved in the drafting of the standards, and the definitions and terminology used in the standards reflect a consensus of the industry. The language used in the standards is clear, and those parties that think the language could be made even more precise can seek such clarifications and revisions through the NAESB process so that the implications of such changes can be considered by all segments. 14 14 Order No. 676, 71 FR 26199, FERC Stats. & Regs. ¶ 31,216, at P 17. 21. Indeed, since NAESB filed its report, it has added a segment to its WEQ for Independent Grid Operators/Planners, and as of April 5, ten parties have joined this segment, including the California ISO, the Electric Reliability Council of Texas, the Independent Electricity System Operator, ISO-NE, the Midwest Independent Transmission System Operator, the New York Independent System Operator, PJM Interconnection, the Southwest Power Pool, Transerv International, and the Alberta Electric System Operator. We encourage parties with concerns about the standards to bring their suggestions to the WEQ and the WGQ. 2. WEQ Standard 011-0.1/WGQ Standard 0.2.1 22. WEQ Standard 011-0.1/WGQ Standard 0.2.1 defines the term “Power Plant Operator” as the entity(ies) having responsibility for natural gas requirements and coordinating deliveries to meet those requirements at natural gas-fired electric generating facility(ies). ISO-NE comments that the standard presumes that the entity that has direct control over the gas requirements for a gas-fired electric generating facility is always the same entity that is responsible for coordinating natural gas deliveries with the appropriate transportation service provider. ISO-NE notes that, in fact, these two requirements may be handled by different parties and requests that this definition be modified to accommodate such possibilities. 23. We find the standard to be sufficiently clear. Contrary to ISO-NE's assertion that the standard presumes that the same entity that has direct control over the gas requirements for a gas-fired electric generating facility is always the same entity that is responsible for coordinating with the appropriate transportation service provider, the standard clearly uses the plural “entity(ies)” when defining “PPO.” The standard also states that “Because each [power plant operator] is structured differently, specific responsibilities within each [power plant operator] should be determined by the [power plant operator] and the point of contact for the [power plant operator] should be communicated to the [transportation service provider(s)].” 3. WEQ Standard 011-1.2/WGQ Standard 0.3.12 24. WEQ Standard 011-1.2/WGQ Standard 0.3.12 directs the power plant operator and the transportation service provider directly connected to the power plant operator's facility(ies) to establish procedures to communicate material changes in circumstances that may impact hourly flow rates, and the power plant operator to provide projected hourly flow rates accordingly. Comments 25. ISO-NE states that the standard requires power plant operators to provide hourly flow rates but does not specify to whom. ISO-NE suggests that the standard be modified to specify that the directly-connected transportation service provider is the party intended to receive hourly flow rates from the power plant operator. NiSource expresses concern over the requirement that pipelines convey “material changes in circumstance that may impact hourly flow rates.” It asserts that there are many variables that “may” impact hourly flow rates. In addition, NiSource notes that the standard requires the pipeline and the power plant operator to establish communication procedures regarding this information, yet does not provide any guidance as to the type of procedures that should be created. NiSource asks that the Commission clarify that pipelines will be able to raise objections with respect to this language in any future dispute proceedings. 15 15 NiSource Comments at 6-7. Commission Determination 26. We disagree that with ISO-NE that the standard needs further clarification to specify that the directly-connected transportation service provider is the party intended to receive hourly flow rates from the power plant operator. The standard specifically refers to communications procedures between the power plant operator and the directly-connected transportation service provider, so that it is clear that the hourly flow rates need to be communicated to the directly-connected transportation service provider. 27. With respect to NiSource's comment, the pipeline will need to determine which events materially affect hourly flow rates and communicate those events to the power plant operators. Pipelines are already required by NAESB standards to use judgment in issuing system-wide notices that impact pipeline operations, and this requirement is not different. 16 Similarly, the communications procedures should be established between the pipeline and the power plant operator. Pipelines and power plant operators should have the flexibility to establish the procedures they deem most efficient. NiSource will be able to negotiate the details when it works with relevant power plant operators to establish the communication procedures required by this standard. 16 18 CFR 284.12(a)(vi) Capacity Release Related Standards, Standard 5.4.16 (system wide notices). 4. WEQ Standard 011-1.3/WGQ Standard 0.3.13 28. WEQ Standard 011-1.3/WGQ Standard 0.3.13 states that power plant operators should not operate without an approved scheduled quantity pursuant to the NAESB WGQ standard nomination timeline and scheduling processes or as permitted by the transportation service provider's tariff, general terms and conditions, and/or contract provisions. The standard further states that if the power plant operator reasonably determines it has circumstances requiring the need to request gas scheduling changes outside the WGQ nomination and scheduling processes, and the transportation service provider supports the processing of such changes, the power plant operator may request daily flow rates as established by either the communication procedures established in the standards or as specified in the transportation service provider's tariff or general terms and conditions. The standard states that the power plant operator and all affected transportation service providers should work to resolve the power plant operator's request if it can be accommodated
(1)in accordance with the appropriate application of the affected transportation service provider's tariff requirement, contract provisions, business practices, or other similar provisions, and
(2)without adversely impacting other scheduled services, anticipated flows, no-notice services, firm contract requirements and/or general system operations. Comments 29. IRC comments that the standard suggests that transportation service providers may be granting service to power plant operators outside of normal Open Access Same-Time Information Systems (OASIS) posting requirements. IRC submits that, in order to ensure transparency and compliance with the Commission's rules, any communications between the transportation service provider and power plant operator must also adhere to the Commission's OASIS posting requirements and its Standards of Conduct regulations. 30. ISO-NE asserts that the standard states in part that a power plant operator should not operate without an approved schedule, and suggests that, in order to avoid confusion with the electric scheduling process, this standard be modified to specify that it is referring to the “approved gas schedule” and “gas scheduling processes”. ISO-NE also recommends that the directly-connected transportation service provider is the party intended to receive hourly flow rates from the power plant operator. 31. NiSource comments that the type of procedure to be established between a pipeline and a power plant operator to communicate hourly flow rate information is not clear, and that it wishes to preserve its ability to object to any power plant operator requests for unreasonable communications procedures. 17 NiSource also states that the standard does not unambiguously state that a pipeline that does not provide for a special nomination cycle in its tariff does not have to accommodate such a request. 17 NiSource Comments at 9. Commission Determination 32. The purpose of this standard is to provide for greater flexibility in scheduling pipeline transportation in circumstances in which the pipeline is able to accommodate such flexibility. Regarding IRC's concern about compliance with Commission regulations, nothing in this standard grants a waiver from the Commission's standards of conduct or other regulations. The IRC's reference to the OASIS is not clear, since these are gas transactions between the power plant operator and the pipeline, not OASIS scheduling requests. 33. We disagree with ISO-NE's argument that the standard is ambiguous or confusing. The standard's language regarding scheduling clearly concerns scheduled quantities of gas pursuant to the NAESB WGQ standard nomination timeline. 34. With respect to NiSource's concern about communication details, as we explained above, we find it more appropriate for the pipeline and the power plant operator to work out the most efficient method for communicating any such scheduling requests. With respect to NiSource's concern about its obligations, the standard clearly states that, if the pipeline supports the processing of such special requests, it must work to resolve such requests if they can be accommodated in accordance with the appropriate application of the affected pipeline's tariff requirement, contract provisions, business practices, or other similar provisions, and without adversely impacting other scheduled services, anticipated flows, no-notice services, firm contract requirements and/or general system operations. We find that these conditions provide reasonable and appropriate protections for the pipelines. 5. WEQ Standard 011-1.4 and WGQ Standard 0.3.14 35. WEQ Standard 011-1.4 requires RTOs, ISOs, independent transmission operators and/or power plant operators to sign up to receive operational flow orders and other critical notices from the appropriate transportation service provider(s), and WGQ Standard 0.3.14 requires transportation service providers to provide operational flow orders and other critical notices to RTOs, ISOs, independent transmission operators, and power plant operators. ISO-NE argues that the terms RTOs, ISOs and independent transmission operators in these standards should be replaced with “balancing authorities”. ISO-NE states that RTOs/ISOs should not bear a higher burden of responsibility than other balancing authorities in this context. 36. These standards require only that RTOs, ISOs and independent transmission operators need to sign up to receive information from pipelines about operational flow orders that may affect gas-fired generators on their systems. The genesis for the development of these standards was the coordination problems between the gas industry and the scheduling practices of ISOs and RTOs, particularly the problems faced by gas-fired generators in ISO-NE during the 2004 cold snap. These standards along with the other standards will help ensure that, in the event of a recurrence of such circumstances, the RTOs, ISOs, and independent transmission operators will be fully informed of conditions that may affect the reliable performance of generators on their systems. ISO-NE does not explain why RTOs, ISOs, and independent transmission operators should be exempt from the requirement to receive information that may have a crucial impact on the reliability of the operation of their systems. 18 Nor does ISO-NE provide evidence that the same scheduling problems affected balancing authorities that are not RTOs, ISOs, independent transmission operators or power plant operators, such that they too should be required to sign up to receive operational flow orders and other critical notices from transportation service providers. If ISO-NE believes the standard should be expanded to include all balancing authorities, it should seek such changes from NAESB, so that all industry segments can participate in the determination. 18 All RTOs and ISOs, for example, are not necessarily balancing authorities. 6. WEQ Standard 011-1.5 37. The standard requires that, upon request, a power plant operator must provide to the appropriate independent balancing authority and/or reliability coordinator pertinent information concerning the level of gas transportation service (firm or interruptible) and its natural gas supply (firm, fixed or variable quantity, or interruptible). Comments 38. Florida Cities states that due to the commercially sensitive nature of this information operators should only be required to divulge the information needed to ensure the reliable operation of the transmission grid, and no more ( *i.e.* , an electric balancing authority asking for supply and transportation information for the immediate future rather than day-ahead). In addition, Florida Cities asks the Commission to clarify how it will be determined which entity or entities will be authorized to request this information, and with what frequency they may do so. 19 19 Florida Cities Comments at 4. 39. FPL Energy does not support the standard, commenting that it would create a way for electric balancing authorities and reliability coordinators to rank power supplies based on perceived reliability. In FPL Energy's view this would put merchant generators that are unable to contract for long-term firm gas pipeline capacity at a disadvantage in competing for power sales versus utility sales and sales from non-gas power suppliers. 20 FPL Energy requests that the Commission refrain from adopting such a protocol until a mechanism that would compensate merchant generators for holding long-term firm capacity on gas pipelines is established. 20 FPL Energy Comments at 8. Commission Determination 40. We find that the standard is appropriate and does not require improper sharing of commercially sensitive information with competitors. The standard as written only requires power plant operators to provide information regarding its gas transportation and performance obligation to *independent* balancing authorities and/or reliability coordinators. 41. Regarding FPL Energy's concern that independent balancing authorities and/or reliability coordinators might choose to rank generators based on reliability of gas supply, it is not clear that the information will be used for that purpose. Increased communication and information about natural gas deliverability should help system operators understand potential operating problems on their system. Moreover, even if the information were used for ranking, as FPL Energy argues, FPL Energy has not shown why access to firm pipeline transportation should not be used as part of the analysis of the reliability of a gas fired generation. A generator with firm transportation and a firm gas supply generally would be more likely to be able to obtain gas when pipelines are constrained than generators relying solely on interruptible transportation. Moreover, as discussed above, the independence of the balancing authority and reliability coordinator will help ensure that the information is used appropriately. The benefits from enhanced communication about natural gas deliverability outweigh the potential that in a particular circumstance an independent balancing authority or reliability coordinator will use the information inappropriately. If FPL Energy believes an independent balancing authority or reliability coordinator in a particular circumstance has used such information inappropriately, it can file a complaint. 7. WEQ Standard 011-1.6/WGQ Standard 0.3.15 42. This standard requires RTOs, ISOs, independent transmission operators, independent balancing authorities and/or regional reliability coordinators to establish operational communication procedures with the appropriate transportation service provider and/or power plant operator. Comments 43. ISO-NE notes that it is unclear why this standard is applicable only to independent balancing authorities since it would seem that all balancing authorities would benefit from communications with all power plant operators. In addition, ISO-NE suggests that the language “and/or” be replaced with “and” to avoid any confusion. 21 21 ISO-NE Comments at 9. 44. INGAA asks that the Commission clarify that it is the party responsible for managing the operations of each electric facility ( *i.e.* RTO) to initiate the communication procedures required under this standard. INGAA states that allocation of responsibility is appropriate because the pipeline does not have firsthand information as to all the pertinent electric industry operators to which the power plants on the pipeline's system belong. 45. NiSource comments that a pipeline could have power plant operator shippers that are located in the service territories of many different entities ( *i.e.* , RTOs, ISOs). In such a case, WEQ Standard 011-1.6/WGQ Standard 0.3.15 could require that the pipeline develop numerous sets of communications procedures depending on the wishes of the other entities. NiSource states that such a requirement would be overly burdensome and difficult to maintain, and requests that the Commission make clear that a pipeline preserves the ability to argue in a future dispute proceeding that it is not obligated to develop new communication procedures that are not currently supported by the pipeline's existing communication infrastructure. 22 22 NiSource Comments at 10. Commission Determination 46. As we explained above, the consensus of NAESB members sought to limit the communications requirement to independent balancing authorities, which helps to protect against disclosure of confidential information. If ISO-NE believes that this rationale should not apply to WEQ Standard 011-1.6/WGQ Standard 0.3.15, it can seek a change through NAESB which will allow all industry segments to participate in the determination. 47. We agree with INGAA that the RTOs, ISOs, independent transmission operators, independent balancing authorities and/or regional reliability coordinators are the parties responsible for initiating communication procedures, given that these parties should be the most knowledgeable regarding the pipelines used by power plants on their system. With respect to NiSource's comment we expect that the pipelines and RTOs, ISOs, and independent transmission operators will be able to work cooperatively to develop mutually agreeable, and efficient communication procedures. We are requiring in this rule that the parties file with us by November 1, 2007 to indicate that they have established the appropriate communication procedures. Should there be unresolved disputes at that time, the pipelines, RTOs, ISOs and independent transmission operators should advise the Commission what the unresolved issues are so the Commission can establish procedures to resolve those disputes, including the use of our dispute resolution and settlement judge procedures. 23 23 In a similar situation in the past (a requirement that pipelines enter into operational balancing agreements
(OBAs)with interconnecting pipelines), rather than requiring pipelines to file their OBAs, the Commission required the pipelines to file a statement with the Commission certifying that they have complied with the requirement to enter into OBAs. *Standards for Business Practices of Interstate Natural Gas Pipelines* , 85 FERC ¶ 61,371 (1998). The Commission stood ready with Alternative Dispute Resolution and ultimately Commission action to resolve any disputes. *See Standards For Business Practices of Interstate Natural Gas Pipelines* , Order No. 587-G, 63 FR 20072 (Apr. 23, 1998), FERC Statutes and Regulations, Regulations Preambles July 1996- December 2000 ¶ 31,062 (Apr. 16, 1998). 8. Additional Issue 48. AGA states that, while it supports the incorporation of the NAESB standards, the existing operational rights of natural gas pipeline customers should not be changed as a result of efforts to increase communication and coordination between the gas and electric industries. To that end, AGA asks that the Commission ensure that NAESB standards WEQ-011-1.1/WGQ 0.3.11 and WEQ-011-1.3/WGQ 0.3.13 are enforced. 24 24 AGA Comments at 2. 49. We expect pipelines to comply with all the NAESB standards incorporated by reference in our regulations just as we expect them to comply with all of our other regulations that pertain to them. B. Additional Issues Raised by NAESB 50. NAESB identified six issues for which it requested clarification of existing Commission policy or put forward potential areas for standards development that some industry participants believe might assist in resolving coordination problems between the gas and electric industries. The Commission provided clarification and guidance in the NOPR. Parties requested additional clarification on three issues, which we discuss below. 1. Use of Gas Indices for Pricing Capacity Release Transactions 51. In the Final Report filed with the Commission on February 24, 2006, NAESB requested clarification of Commission policy regarding the use of gas indices to price capacity release transactions, so that it could develop standards for such releases. In the NOPR, the Commission clarified that releasing shippers should be free to offer the same type of pricing arrangements that the pipeline offers and, therefore, releasing shippers are free to use gas price indices in pricing released capacity so long as the rate paid by the replacement shipper does not exceed the maximum rate in the pipeline's tariff. Comments 52. INGAA states that the Commission clarified that, where pipelines offer discounts based on gas price indices, the provisions of the pipeline's tariff governing capacity releases should not prevent releasing shippers from offering the same type of pricing in such a transaction. INGAA contends, however, that not all pipelines have language within their tariffs regarding permissible discounts. Therefore, INGAA requests that the Commission clarify that a requirement to allow releasing shippers to release capacity using gas price indices only applies to pipelines with such language in their tariffs and that releases must be consistent with the pipeline tariff. 25 INGAA also requests that the Commission clarify that releasing shippers must specify all aspects of the release, including how to determine the best bid and the amount to bill under the release. Similarly, Carolina Gas requests clarification that releasing shippers desiring to use gas price indices to price capacity releases should only use published index prices that are readily available and agreeable for use by the pipeline. 25 INGAA Comments at 6. 53. Other commenters disagree. For example, NGSA argues the Commission should clarify releasing shippers should have the ability to release capacity using index-based pricing regardless of the pipeline's decision to exercise that authority. It contends that as long as the capacity release shipper is selling its capacity at, or below, the maximum tariff rate, it should be of no consequence how the pipeline prices its own primary capacity. NGSA asks the Commission to clarify the methodology pipelines should use to evaluate bids for primary and secondary market capacity made available at an index-based rate. Finally, NGSA requests that the Commission direct NAESB to establish the necessary data sets to allow for shippers to release capacity at rates which are based on gas price indices. 54. Several commenters, while in support of the Commission's proposed clarification, believe the Commission has limited the flexibility in pricing capacity releases by stating that such prices may not exceed the pipeline's maximum tariff rate. 26 These commenters argue for the removal of the price cap on capacity release transactions. FPL Energy asserts that lifting the price cap in the secondary market will result in more liquidity and competition for pipeline capacity as more shippers decide to purchase and manage their own capacity because they will have more opportunity to defray capacity costs and achieve fair market value for the capacity when it is not needed to generate power. 27 26 *E.g.* , Dominion, Florida Cities, and FPL Energy. 27 FPL Energy Comments at 13. Commission Determination 55. The Commission's regulations permit releasing shippers to use price indices or other formula rates on all pipelines, regardless of whether the pipeline has included a provision allowing the use of indices as part of its discounting provisions, so long as the prices are less than maximum rate in the pipeline's tariff. Section 284.8(b) 28 of the Commission's regulations states that “firm shippers must be permitted to release their capacity, in whole or in part, *without restrictions on the terms or conditions for release* ,” and section 284.8(e) 29 mandates that such a release may not be “over the maximum rate.” All pipelines are permitted to use price indices in discount transactions either through provisions in their tariffs or by means of filing a non-conforming service agreement. 30 Providing releasing shippers with this flexibility is consistent with the “original intent of the Commission's capacity release regulations by providing releasing shippers with the flexibility to structure capacity release transactions that best fit their business needs.” 31 28 18 CFR 284.8(b). 29 18 CFR 284.8(e). 30 *Natural Gas Pipeline Co. of America* , 82 FERC ¶ 61,298, 62,179-80
(1998)(non-conforming provisions relating to discounts “must be on file and approved by the Commission—either in Natural's pro forma service agreement or as nonconforming contracts”). 31 *Standards for Business Practices of Interstate Natural Gas Pipelines* , Order No. 587-N, 67 FR 11906 (March 18, 2002), FERC Stats. & Regs., Regulations Preambles ¶ 31,125 at P 21 (Mar. 11, 2002). 56. INGAA has expressed concern about possible problems in implementing this requirement on pipelines that do not provide for indexed releases in their tariffs. Under the Commission regulations, the releasing shipper is responsible for clearly setting out the terms and conditions of the release and that would include the means for implementing the formula rate. This is also an issue on which NAESB can develop standards to ensure that such releases can be processed quickly and efficiently. 57. Some of the comments suggest that the price cap be lifted for capacity release transactions. This issue is already being addressed by the Commission in Docket Nos. RM06-21-000 and RM07-4-000, so it is not appropriate to address in this proceeding. 2. Pipelines' Ability To Permit Shippers To Choose Alternate Delivery Points 58. In its Final Report, NAESB requested clarification regarding the ability of pipelines to permit shippers to shift gas deliveries from a primary to a secondary delivery point when a pipeline constraint occurs upstream of both points. Such changes would make it easier for shippers to redirect gas supplies to generators during periods when capacity is scarce. NAESB provided, as an example, that a customer has 100 dekatherms scheduled to flow from a primary receipt point through the posted point of restriction to a primary delivery point. Under the same contract, the customer then requests a nomination change to move 50 of the 100 dekatherms to a secondary delivery point that is outside its transportation path but still through the posted point of restriction. 59. In the NOPR, the Commission discussed Order No. 637-B, which provided that pipelines must implement within-the-path scheduling under which a shipper seeking to use a secondary delivery point within its scheduling path has priority over another shipper seeking to use the same delivery point but that point is outside of its transportation path. 32 In addition, it stated that the scenario posed by NAESB was a slight variation of the within-the-path scheduling, and clarified that it would be reasonable to permit the reassignment as posited in most cases. 32 *Regulation of Short-Term Natural Gas Transportation Services* , 92 FERC ¶ 61,062 at 61,168-70 (2000). Comments 60. Salt River supports the ability of a gas shipper to make changes to its delivery point (from primary to alternate) once it has been confirmed through a constraint point without having it be treated as a new nomination. It argues that this ability better enables the electric industry to ensure that gas can move to the facilities that require it on an intra-day basis without having to be concerned about pro-rata curtailments or scheduled quantity cuts. 33 33 Salt River Comments at 3. 61. Dominion agrees with the determination of shipper priority in the Commission's example, it is concerned that there may be other caveats beyond the one posited in which the Commission's specific “clarification” may not be appropriate. Florida Cities has no objection to the Commission's proposed clarification, but states that the Commission should not require all pipelines to require this accommodation without exception. It states that any prior arrangements concerning delivery point nominations are preserved. For example, Florida Cities contends that Florida Gas Transmission Company, LLC has a system in which secondary delivery point nominations are considered on a “jump ball basis”, meaning the ability of a shipper to move its nomination from the primary delivery point to the secondary delivery point will be contingent upon whether secondary point nominations for that flow day create a need for the allocation of capacity instead of by virtue of pathing rights. 34 34 Florida Cities Comments at 8. 62. INGAA requests that the Commission clarify in the Final Rule that its proposed clarification is not intended to revise its policies concerning capacity allocation or to broaden shippers' flexible point rights beyond those set out in Order Nos. 637. 35 El Paso further requests that the Commission state that the normal processes for new standards development apply to any new standards proposed relating to this issue. 36 35 INGAA Comments at 8. 36 El Paso Comments at 4. Commission Determination 63. The Commission is not modifying its requirement for within-the-path scheduling as adopted in Order No. 637. The example posited by NAESB appears consistent with the within-the-path scheduling concept and with pipeline proposals that have been accepted. 37 It would not be appropriate for the Commission here to try to provide generic clarification to cover all possible proposals by pipelines for according flexibility to shippers. These proposals will have to be judged on an individual basis. In addition, NAESB can consider through its consensus process possible standards for according increased receipt and delivery point flexibility. 37 *Algonquin Gas Transmission Co.* , Director Letter Order, Docket No. RP06-69-000 (November 22, 2005); *Texas Eastern Transmission, LP,* Director Letter Order, Docket No. RP06-70-000 (November 22, 2005). 3. Changes to the Intraday Nomination Gas Schedule 64. In its Final Report, NAESB raised the possibility of developing standards that would offer an additional intraday nomination cycle with rights for firm shippers to bump interruptible nominations. NAESB suggested that such a standard would provide more flexibility to shippers, including power generators, with firm transportation rights so that they can nominate for natural gas supporting their market clearing times. In the NOPR, the Commission explained that its bumping policy requires that the last intra-day nomination opportunity would be one in which firm nominations do not bump interruptible nominations, but that NAESB could consider whether to add another intra-day nomination opportunity with bumping rights prior to the final non-bumping opportunity, or to develop additional changes to its nomination timeline to better coordinate with electric scheduling. Comments 65. Various commenters support the development of a standard to modify the timing of the existing nomination schedule or add an additional nomination period. 38 Dominion states that having an additional cycle(s) is desirable, as it would allow firm shippers to ensure their gas flows and thereby help repair the disconnect between the gas and electric scheduling timelines. Duke agrees, and requests that the NAESB WEQ be allowed to determine whether any additional nomination cycle will produce the desired effects of greater shipper flexibility and security. 38 *E.g.* , Dominion, Duke, Florida Cities, FPL Energy, Salt River, TVA. 66. FPL Energy and Florida Cities do not object to the addition of a new intraday nomination cycle so long as any new nomination opportunity does not carry bumping rights in the event that it becomes the next to last nomination opportunity. Florida Cities states that if such rights were afforded, interruptible shippers may be forced into the market late with little chance of finding a replacement market. In addition, FPL Energy is concerned that having more opportunities to bump interruptible service could cause supply sources that cannot shut down quickly to limit their sales to firm shippers, thus harming those shippers wishing to utilize interruptible service. On the other hand, while TVA agrees with the addition of a new intraday nomination cycle, it requests that the Commission eliminate the “no-bump” rule entirely, as it puts interruptible transportation on equal footing with the highest priority firm transportation, *i.e.* , a shipper paying the lowest rate on the system can displace those shippers that pay one of the highest rates on the system. 67. Other participants oppose the introduction of an additional nomination cycle. 39 Carolina Gas states that having another intra-day nomination opportunity would create unnecessary administrative complexities and would require significant modifications to Carolina Gas' Internet Web site. El Paso states that transportation service providers must already complete complex allocation and confirmation processes within a limited timeframe. Among other objectives, these processes are designed to ensure that the nominated gas supply is available and the nominated market is ready to receive the gas. 39 *E.g.* , Carolina Gas, El Paso, EPSA, INGAA. 68. INGAA asserts that neither altering the existing scheduling timeline nor adding an additional intra-day nomination cycle with bumping rights guarantees that a power generator will be able to nominate primary firm transportation capacity when the generator most needs that capacity, and states that any reliability issue concerning gas supply to electric generators should be addressed through individual pipeline proceedings. EPSA states that it is unclear whether the addition of another nomination opportunity with or without bumping rights would produce any significant improvement in the reliable performance of the system. Commission Determination 69. As we stated in the NOPR, the Commission has recognized the interest of interruptible shippers in achieving business certainty by making the last intra-day nomination opportunity one in which firm nominations do not bump interruptible nominations. 40 However, within the confines of current Commission policy, NAESB should actively consider whether changes to existing intra-day schedules would benefit all shippers, and provide for better coordination between gas and electric scheduling. In addition, the NAESB nomination timeline establishes only the minimum requirement to which pipelines must adhere. We fully expect that individual pipelines supporting gas-fired generators will be considering the addition of other intra-day nomination opportunities that would be of benefit to their shippers. 40 NOPR at P 23. III. Implementation Dates and Procedures 70. Pipelines and public utilities are required to implement the standards we are incorporating by reference in this Final Rule by November 1, 2007. In addition, pipelines and public utilities are required to file a statement by November 1, 2007 as to whether they have established the required procedures in WEQ Standard 011-1.2/WGQ Standard 0.3.12 and WEQ Standard 011-1.6/WGQ Standard 0.3.15. To reduce the burden on filers, we are not requiring pipelines and public utilities to make filings to include these standards in their tariffs at this time. These standards will be included in tariffs when the pipelines and public utilities file to incorporate in their tariffs the next revised version of the NAESB standards. IV. Notice of Use of Voluntary Consensus Standards 71. In section 12(d) of the National Technology Transfer and Advancement Act of 1995, Congress affirmatively requires federal agencies to use technical standards developed by voluntary consensus standards organizations, like NAESB, as the means to carry out policy objectives or activities unless use of such standards would be inconsistent with applicable law or otherwise impractical. 41 NAESB approved the standards under its consensus procedures. Office of Management and Budget Circular A-119 (§ 11) (February 10, 1998) provides that federal agencies should publish a request for comment in a NOPR when the agency is seeking to issue or revise a regulation proposing to adopt a voluntary consensus standard or a government-unique standard. On October 25, 2006, the Commission issued a NOPR that proposed to incorporate by reference NAESB's Gas/Electric Coordination Standards. The Commission took comments on the NOPR into account in fashioning this Final Rule. 41 Pub L. No. 104-113, § 12(d), 110 Stat. 775 (1996), 15 U.S.C. § 272 note (1997). V. Information Collection Statement 72. The Office of Management and Budget's
(OMB)regulations in 5 CFR 1320.11
(2005)require that it approve certain reporting and recordkeeping requirements (collections of information) imposed by an agency. Upon approval of a collection of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of this Rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number. 73. The final rule upgrades the Commission's current business practice and communication standards to include standardized communication protocols between interstate pipelines and power plant operators and transmission owners and operators. The implementation of these standards and regulations is necessary to improve coordination between the gas and electric industries, to improve communications about scheduling of gas-fired generators and to improve the reliability in both industries. The following burden estimates include the costs to implement the WEQ's and WGQ's definitions and business practice standards providing for coordination and which will establish communication protocols between interstate natural gas pipelines and power plant operators and transmission owners and the various electric industry operators. The implementation of these data requirements will help the Commission carry out its responsibilities under the Federal Power Act and Natural Gas Act of promoting the efficiency and reliability of the electric and gas industries' operations. The Commission's Office of Energy Markets and Reliability will use the data for general industry oversight. 74. The Commission sought comments to comply with these requirements. Comments were received from sixteen entities. No comments addressed the reporting burden imposed by these requirements and therefore the Commission will use the same estimates in the final rule. The substantive issues raised by the commenters are addressed in this preamble. Data collection Number of respondents Number of responses per respondent Hours per response Total number of hours FERC-549C 93 1 20 1,860 FERC-717 220 1 33 7,260 Totals 9,120 Total Annual Hours for Collection (Reporting and Recordkeeping, (if appropriate)) = 9,120. *Information Collection Costs:* The Commission sought comments on the costs to comply with these requirements but no comments were received addressing these cost estimates. The Commission will therefore use the same estimates in the final rule. It has projected the average annualized cost for all respondents to be the following: 42 42 The total annualized cost for the two information collections is $ 1,368,000. This number is reached by multiplying the total hours to prepare a response (hours) by an hourly wage estimate of $150 (a composite estimate that includes legal, technical and support staff rates). $1,368,000 = $150 × 9,120. FERC-549C FERC-717 Annualized Capital/Startup Costs $279,000 $1,089,000 Annualized Costs (Operations & Maintenance) N/A N/A Total Annualized Costs 279,000 1,089,000 75. OMB regulations 43 require OMB to approve certain information collection requirements imposed by agency rule. The Commission is submitting this Final Rule to OMB for review and approval of the information collections. These information collections are mandatory requirements. 43 5 CFR 1320.11. *Title:* Standards for Business Practices of Interstate Natural Gas Pipelines (FERC-549C) Standards for Business Practices and Communication Protocols for Public Utilities (FERC-717) ( *formerly* Open Access Same Time Information System). *Action:* Proposed collections. *OMB Control No.:* 1902-0174 and 1902-0173. *Respondents:* Business or other for profit, (Public Utilities and Natural Gas Pipelines (Not applicable to small business.)). *Frequency of Responses:* One-time implementation (business procedures, capital/start-up). 76. *Necessity of Information:* The Commission's regulations adopted in this rule are necessary to further the process begun in Order No. 587 of creating a more efficient and integrated pipeline grid by standardizing the business practices and electronic communication of interstate pipelines and expanded in Order No. 676 to create a more efficient and integrated electric transmission grid by standardizing the business practices and electronic communication of public utilities. The Commission has reviewed the requirements pertaining to business practices and electronic communication of public utilities and natural gas pipelines and made a preliminary determination that the proposed revisions are necessary to establish more efficient coordination between the gas and electric industries. Requiring such information ensures both a common means of communication and common business practices to improve communications for participants engaged in the sale of electric energy at wholesale and the transportation of natural gas. 77. Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 [Attention: Michael Miller, Office of the Deputy Chief Information Officer, ED-30,
(202)502-8415, or *michael.miller@ferc.gov* ] or the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention: Desk Officer for the Federal Energy Regulatory Commission, 725 17th Street, NW., Washington, DC 20503. The Desk Officer can also be reached at
(202)395-4650, or fax:
(202)395-7285. VI. Environmental Analysis 78. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. 44 The Commission has categorically excluded certain actions from these requirements as not having a significant effect on the human environment. 45 The actions adopted here fall within categorical exclusions in the Commission's regulations for rules that are clarifying, corrective, or procedural, for information gathering analysis, and dissemination, and for sales, exchange, and transportation of natural gas and electric power that requires no construction of facilities. Therefore, an environmental assessment is unnecessary and has not been prepared in this Final Rule. 44 *Regulations Implementing the National Environmental Policy Act,* Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs., Regulations Preambles 1986-1990 ¶ 30,783 (1987). 45 18 CFR 380.4 (2006). VII. Regulatory Flexibility Act 79. The Regulatory Flexibility Act of 1980
(RFA)46 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. The regulations adopted here impose requirements only on interstate pipelines and public utilities, the majority of which are not small businesses, and would not have a significant economic impact. These requirements are, in fact, designed to benefit all customers, including small businesses. Accordingly, pursuant to section 605(b) of the RFA, the Commission hereby certifies that the regulations adopted herein will not have a significant adverse impact on a substantial number of small entities. 46 5 U.S.C. 601-612. VIII. Document Availability 80. In addition to publishing the full text of this document in the **Federal Register** , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Home Page ( *http://www.ferc.gov* ) and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426. 81. From FERC's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field. User assistance is available for eLibrary and the FERC's Web site during normal business hours from FERC Online Support at
(202)502-6652 (toll-free at 1-866-208-3676) or e-mail at *ferconlinesupport@ferc.gov,* or the Public Reference Room at
(202)502-8371, TTY
(202)502-8659. E-Mail the Public Reference Room at *public.refererenceroom@ferc.gov* . IX. Effective Date and Congressional Notification 82. These regulations are effective August 15, 2007. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996. List of Subjects in 18 CFR Parts 38 and 284 Continental shelf, Natural gas, Incorporation by reference, Reporting and recordkeeping requirements. By the Commission. Kimberly D. Bose, Secretary. In consideration of the foregoing, the Commission amends parts 38 and 284 of Chapter I, Title 18, *Code of Federal Regulations,* as follows. PART 38—BUSINESS PRACTICE STANDARDS AND COMMUNICATION PROTOCOLS FOR PUBLIC UTILITIES 1. The authority citation for part 38 continues to read as follows: Authority: 16 U.S.C. 791-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-7352. 2. Section 38.1 is revised to read as follows: § 38.1 Applicability. This part applies to any public utility that owns, operates, or controls facilities used for the transmission of electric energy in interstate commerce or for the sale of electric energy at wholesale in interstate commerce and to any non-public utility that seeks voluntary compliance with jurisdictional transmission tariff reciprocity conditions. 3. Section 38.2 is amended by adding new paragraph (a)(8) to read as follows: § 38.2 Incorporation by reference of North American Energy Standards Board Wholesale Electric Quadrant standards.
(a)* * *
(8)Gas/Electric Coordination Standards (WEQ-011, Version 1, as adopted in Recommendation R04021 July 8, 2005). PART 284—CERTAIN SALES AND TRANSPORTATION OF NATURAL GAS UNDER THE NATURAL GAS POLICY ACT OF 1978 AND RELATED AUTHORITIES 4. The authority citation for part 284 continues to read as follows: Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352; 43 U.S.C. 1331-1356. 5. In § 284.12, paragraph (a)(1)(i) is revised to read as follows: § 284.12 Standards for pipeline business operations and communications.
(a)* * *
(1)* * *
(i)Additional Standards (General Standards and Creditworthiness Standards) (Version 1.7, December 31, 2003) and Additional Standards (Gas/Electric Operational Communications) (Version 1.8, September 30, 2006, with minor corrections applied December 31, 2006). [FR Doc. E7-13591 Filed 7-13-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [TD 9339] RIN 1545-BG44 Qualified Zone Academy Bonds; Obligations of States and Political Subdivisions AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final and temporary regulations. SUMMARY: This document contains final and temporary regulations that provide guidance to state and local governments that issue qualified zone academy bonds and to banks, insurance companies, and other taxpayers that hold those bonds on the program requirements for qualified zone academy bonds. The temporary regulations implement the amendments to section 1397E of the Internal Revenue Code
(Code)(discussed in this preamble) and provide guidance on the maximum term, permissible use of proceeds, and remedial actions for qualified zone academy bonds. The text of these temporary regulations also serves as the text of the proposed regulations set forth in the notice of proposed rulemaking on this subject in the Proposed Rules section in this issue of the **Federal Register** . The portions of this rule that are final regulations provide necessary cross-references to the temporary regulations. DATES: *Effective Date:* These regulations are effective on September 14, 2007. *Applicability Date:* For dates of applicability, see § 1.1397E-1(m) of these regulations. FOR FURTHER INFORMATION CONTACT: Timothy L. Jones or Zoran Stojanovic,
(202)622-3980 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act These temporary regulations are being issued without prior notice and public procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). For this reason, the collection of information contained in these regulations has been reviewed, and pending receipt and evaluation of public comments, approved by the Office of Management and Budget under control number 1545-1908. Responses to this collection of information are required to obtain or retain a benefit. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. For further information concerning this collection of information, and where to submit comments on the collection of information and the accuracy of the estimated burden, and suggestions for reducing this burden, please refer to the preamble to the cross-referencing notice of proposed rulemaking published in the Proposed Rules section of this issue of the **Federal Register** . Books and records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Background Section 1397E(a) of the Code provides that an eligible taxpayer (within the meaning of section 1397E(d)(6)) that holds a qualified zone academy bond (“QZAB” or “QZABs”) on a credit allowance date is allowed a credit against Federal income tax for the taxable year that includes the credit allowance date. In general, a QZAB is a bond issued by a state or local government to finance certain eligible public school purposes under section 1397E(d). Section 1397E(b) provides that the amount of the QZAB credit equals the product of the credit rate and the face amount of the bond held by the taxpayer on the credit allowance date. Under section 1397E(b)(2), the credit rate is determined by the Treasury Department and equals the percentage that the Department estimates generally will permit the issuance of QZABs without discount and without interest cost to the issuer. Section 1397E(i)(1) defines “credit allowance date” as the last day of the one-year period beginning on the issue date of the issue and the last day of each successive one-year period thereafter. Under section 1397E(d)(3), the maximum term of a QZAB is determined by the Treasury Department and equals the term that the Treasury Department estimates will result in the present value of the obligation to repay the principal on the bond being equal to 50 percent of the face amount of the bond. Section 1397E(j) provides that the amount of the QZAB credit allowed to the taxpayer is included in the taxpayer's gross income. Section 1397E(e) imposes a national limitation on the amount of QZABs that may be issued for each calendar year. The limitation is allocated by the Treasury Department among the States on the basis of their respective populations of individuals below the poverty line. Section 1397E was amended by section 107 of the Tax Relief and Health Care Act of 2006, Public Law 109-432, 120 Stat. 2922
(2006)(the “2006 Act”), by adding certain requirements for a bond to be a QZAB. In general, the 2006 Act added a new five-year spending period requirement, arbitrage investment restrictions, and information reporting requirements. Specifically, the 2006 Act added new section 1397E(f), which generally imposes spending period restrictions under which an issuer of QZABs must reasonably expect, as of the issue date, that:
(1)At least 95 percent of the proceeds from the sale of the issue are to be spent for one or more qualified purposes with respect to qualified zone academies within the 5-year period beginning on the issue date of the QZAB;
(2)a binding commitment with a third party to spend at least 10 percent of the proceeds from the sale of the issue will be incurred within the six-month period beginning on the issue date of the QZAB; and
(3)such purposes will be completed with due diligence and the proceeds from the sale of the issue will be spent with due diligence. New Section 1397E(f)(2) added by the 2006 Act provides authority to the Secretary of the Treasury to extend the five-year spending period. To the extent that less than 95 percent of the proceeds of the issue are spent within the five-year spending period (plus any extension granted by the Secretary of the Treasury), the 2006 Act requires the issuer to redeem the nonqualified bonds within 90 days after the end of such period. In addition, the 2006 Act added new section 1397E(g), which generally requires that an issue of QZABs must satisfy the arbitrage investment restrictions of section 148 with respect to the proceeds of the issue. Finally, the 2006 Act added new section 1397E(h), which generally requires that issuers of QZABs submit information reporting returns to the IRS similar to the information reporting returns required to be submitted to the IRS under section 149(e) for tax-exempt state or local bonds. Temporary regulations (TD 8755) interpreting section 1397E were published on January 7, 1998 (63 FR 671), and amended on July 1, 1999 (TD 8826; 64 FR 35573). Final regulations under section 1397E (TD 8903) were published on September 26, 2000 (65 FR 57732) (the “Final Regulations”). On March 26, 2004, a notice of proposed rulemaking (REG-121475-03) was published in the **Federal Register** (69 FR 15747) (the “2004 Proposed Regulations”). The 2004 Proposed Regulations proposed to amend the existing Final Regulations by providing guidance on the maximum term, permissible use of proceeds, and remedial actions for QZABs. A public hearing was scheduled for July 21, 2004. The public hearing was cancelled because no requests to speak were received. Written comments on the 2004 Proposed Regulations were received. After consideration of the written comments, and in light of the statutory changes made by the 2006 Act, the need for regulatory guidance on those statutory changes, and the close connection between that needed guidance and the guidance in the 2004 Proposed Regulations, the IRS and the Treasury Department have determined to issue coordinated guidance in these temporary regulations (the “Temporary Regulations”), with an opportunity for public comment in the corresponding proposed regulations (the “Proposed Regulations”). Set forth in this preamble is an explanation of certain provisions of the Temporary Regulations. Explanation of Provisions I. Certain Definitions A. In General The Temporary Regulations employ certain definitions used in the tax-exempt bond area. Thus, the Temporary Regulations employ certain definitions used for general tax-exempt bond purposes in § 1.150-1 and certain definitions used for purposes of the arbitrage investment restrictions on tax-exempt bonds in § 1.148-1(b). B. Definitions of Various Types of Proceeds in General In general, § 1.148-1(b) defines “sale proceeds” as any amounts actually or constructively received from the sale of an issue, including amounts used to pay underwriters' discount or compensation. In addition, § 1.148-1(b) defines “investment proceeds” to mean any amounts actually or constructively received from investing proceeds of an issue. Further, § 1.148-1(c) defines “replacement proceeds” to include certain amounts with a reasonable nexus to a bond issue, such as sinking funds reasonably expected to be used to pay debt service on a bond issue and pledged funds pledged to pay debt service on a bond issue with a reasonable assurance that the funds will be available to pay such debt service. C. Proceeds for Purposes of the Use and Spending Requirements In general, the Temporary Regulations provide that, for purposes of the provisions of QZAB provisions regarding the use and expenditure of proceeds for qualified purposes within prescribed periods, “proceeds” means sale proceeds, as defined in § 1.148-1(b), plus investment proceeds, as defined in § 1.148-1(b). Thus, under the Temporary Regulations, the requirement in section 1397E(d)(1)(A) to use at least 95 percent of the proceeds of an issue for a qualified purpose with respect to a qualified zone academy applies by taking into account both the sale proceeds of the issue and any investment proceeds received from investing those sale proceeds. Similarly, under the Temporary Regulations, the requirement in section 1397E(f) to spend at least 95 percent of the proceeds from the sale of an issue on qualified purposes within a five-year period and the associated requirements in section 1397E(f) apply to both sale proceeds of an issue and investment proceeds derived from investing sale proceeds. Some commentators suggested that, for purposes of the 95-percent test, the definition of “proceeds” should be limited to sale proceeds and should exclude amounts received from investing sale proceeds. These commentators suggested that, when sizing a bond issue to comply with the 95-percent test, it could be difficult for an issuer to include investment earnings because interest rates may be volatile and the timing of expenditures may be uncertain. The IRS and the Treasury Department have considered this comment and have concluded that the definition of proceeds in the 2004 Proposed Regulations that applies for purposes of the 95-percent test is appropriate to ensure the use and expenditures of proceeds of QZABs for one or more qualified purposes under section 1397E(d)(5) and (f). Thus, the Temporary Regulations retain this provision. This approach is consistent with the view that, for purposes of certain similar provisions on qualified private activity bonds under section 141, which are based on use of 95% of the net proceeds, as defined in section 150(a)(3), for qualified purposes, net proceeds properly include both sale proceeds and investment proceeds pending expenditures for ultimate qualified governmental purposes, with certain reductions inapplicable to QZABs. D. Proceeds for Purposes of Private Business Contribution Section 1397E(d)(1)(C)(ii) provides that a bond is a QZAB only if, among other requirements, the issuer certifies that it has written assurances that the private business contribution requirement of section 1397E(d)(2) will be met with respect to the qualified zone academy. Section 1397E(d)(2)(A) provides that the private business contribution requirement is met if the eligible local education agency that established the qualified zone academy has written commitments from private entities to make qualified contributions (as defined in section 1397E(d)(2)(B)) having a present value (as of the issue date of the issue) of not less than ten percent of the proceeds of the issue. The 2004 Proposed Regulations provide that, for purposes of the private business contribution requirement of section 1397E(d)(2), proceeds means sale proceeds, as defined in § 1.148-1(b), without regard to any investment proceeds received or expected to be received from investing those sale proceeds. Commentators supported this narrower definition of “proceeds” in the 2004 Proposed Regulations for purposes of the private business contribution requirement. The Temporary Regulations retain this provision. II. Maximum Term Section 1397E(d)(3) provides that the Secretary of the Treasury Department shall determine, during each calendar month, the maximum term for QZABs issued during the following calendar month. Section 1397E(d)(3) states that the maximum term shall be the term that the Secretary estimates will result in the present value of the obligation to repay the principal on the bond being equal to 50 percent of the face amount of the bond. Section 1.1397E-1(d) of the existing Final Regulations provides that the maximum term for a QZAB is determined under section 1397E(d)(3) by using a discount rate equal to 110 percent of the long-term adjusted applicable Federal rate (AFR), compounded semi-annually, for the month in which the bond is issued. The IRS publishes the long-term adjusted AFR each month in a revenue ruling. See § 601.601(d)(2)(ii)( *b* ). Section 1397E(b)(2) provides that the Secretary shall determine, during each calendar month, a credit rate for QZABs issued during the following calendar month. Section 1.1397E-1(b) provides that the Secretary shall determine monthly (or more often as deemed necessary by the Secretary) the credit rate the Secretary estimates generally will permit the issuance of a QZAB without discount and without interest cost to the issuer. Notice 99-35 (1999-2 CB 26), see § 601.601(d)(2)(ii)( *b* ) (“Notice 99-35”), indicates that, until further notice, the credit rate for a QZAB will be published daily by the Bureau of Public Debt on its Internet site for State and Local Government Series securities ( *https://www.treasurydirect.gov* ). Notice 99-35 also provides that the credit rate shall be applied to a QZAB on the first day on which there is a binding contract in writing for the sale or exchange of the bond. Notice 99-35 states that the credit rate will be determined by the Treasury Department based on its estimate of the yield on outstanding AA rated corporate bonds of a similar maturity for the business day immediately prior to the date on which there is a binding contract in writing for the sale or exchange of the bond. Prior to the issuance of the 2004 Proposed Regulations, questions were raised regarding the maximum term of a QZAB that is sold in one month and issued in another month. Section 1.1397E-1(d) of the existing Final Regulations provides that the maximum term is determined based on the month in which the bond is issued. However, under Notice 99-35, the credit rate for a QZAB is determined based on the first day on which there is a binding contract in writing for the sale or exchange of the bond. The credit rate and maximum term should be determined on the same day because the credit rate for a bond depends on its maximum term. Accordingly, the 2004 Proposed Regulations would amend § 1.1397E-1(d) to provide that the maximum term for a QZAB is determined based on the first day on which there is a binding contract in writing for the sale or exchange of the bond. Commentators supported the maximum term provisions in the 2004 Proposed Regulations. The Temporary Regulations retain these provisions. At the present time, the Treasury Department is continuing its current practice of publishing the credit rate and maximum term for QZABs on the Bureau of Public Debt's Internet site for State and Local Government Series securities ( *http://www.publicdebt.treas.gov* ). III. *Use of Proceeds and Remedial Actions* A. In General Section 1397E(d)(1) provides that a bond issued as part of an issue is a QZAB only if, among other requirements, at least 95 percent of the proceeds of the issue are to be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency (as defined in section 1397E(d)(4)(B)) and the issue meets the requirements of section 1397E(f) (relating to spending periods), section 1397E(g) (relating to arbitrage), and section 1397E(h) (relating to information reporting requirements). Section 1397E(d)(5) defines “qualified purposes” for any qualified zone academy to include:
(i)Rehabilitating or repairing the public school facility in which such academy is established,
(ii)providing equipment for use at such academy,
(iii)developing course materials for education to be provided at such academy, and
(iv)training teachers and other school personnel in such academy. Section 1397E(d)(4)(A) defines “qualified zone academy” as any public school (or academic program within a public school) that is established by and operated under the supervision of an eligible local education agency to provide education or training below the postsecondary level if:
(1)The public school or program is designed in cooperation with business in accordance with section 1397E(d)(4)(A)(i);
(2)students in the public school or program will be subject to the same academic standards and assessments as other students educated by the eligible local education agency;
(3)the comprehensive education plan of the public school or program is approved by the eligible local education agency; and
(4)the public school is located in an empowerment zone or enterprise community (as defined in section 1393), or there is a reasonable expectation (as of the issue date of the bonds) that at least 35 percent of the students attending the school or participating in the program will be eligible for free or reduced-cost lunches under the school lunch program established under the Richard B. Russell National School Lunch Act. B. Compliance With 95-Percent Test 1. In General The 2004 Proposed Regulations provide guidance on compliance with the 95-percent test in section 1397E(d)(1)(A). Specifically, the 2004 Proposed Regulations provide that, in general, an issue must satisfy two requirements to comply with section 1397E(d)(1)(A). First, the issuer must reasonably expect, as of the issue date of the issue, to use at least 95 percent of the proceeds of the issue for a qualified purpose with respect to a qualified zone academy for the entire term of the issue (without regard to any redemption provision). Second, except as otherwise provided in the remedial action provisions of the 2004 Proposed Regulations, at least 95 percent of the proceeds of the issue must actually be used for a qualified purpose with respect to a qualified zone academy for the entire term of the issue (without regard to any redemption provision). For these purposes, under the 2004 Proposed Regulations, any unspent proceeds are treated as used for a qualified purpose with respect to a qualified zone academy during any period that the issuer reasonably expects that those proceeds will be spent with due diligence for a qualified purpose with respect to a qualified zone academy. Some commentators suggested a modification of the requirement in the 2004 Proposed Regulations that at least 95 percent of the proceeds of an issue both be reasonably expected to be used and actually be used for a qualified purpose for the entire term of the issue. Specifically, these commentators requested that the requirement be altered to conform to the tax-exempt bond provisions of § 1.141-2(d), which look to a similar standard based on reasonable expectations and deliberate actions within an issuer's control, with certain exceptions for involuntary conversions and actions in response to directives from the Federal government. These commentators noted that use of the standards under section 141 would be appropriate because the statutory language of sections 141 and 1397E both use the phrase “are to be used.” In substance, the standards for interpreting this phrase under the 2004 Proposed Regulations and under section 141 both incorporate reasonable expectations and actual use, with certain special exceptions to actual use in the case of the standard under section 141. The IRS and the Treasury Department believe, however, that compliance standards for the actual use of proceeds appropriately may take into account the particular governmental program involved. The Temporary Regulations do not adopt the suggestion to conform the 95-percent test for QZABs to the deliberate action provisions of § 1.141-2(d). The Temporary Regulations retain the proposed standard based on reasonable expectations and actual use. The actual use test is set forth under section 1397E(f)(3), as introduced by the 2006 Act, and is appropriate for the circumstances involved with QZABs. In addition, the control-based exceptions to actual use under the deliberate action standard under section 141 raise certain administrability concerns in the context of QZABs. For example, it may be particularly difficult to determine if a loss of qualified zone academy status is within an issuer's control. The Temporary Regulations provide guidance on the spending period requirements introduced by the 2006 Act in section 1397E(f). Specifically, the Temporary Regulations provide that an issuer must both reasonably expect to spend and actually spend at least 95 percent of the proceeds of an issue of QZABs within the five-year period beginning on the issue date of the issue of QZABs (or be subject to the additional requirement to redeem bonds from unspent proceeds at the end of that five-year period). The Temporary Regulations clarify that the various requirements relating to “reasonable expectations” for the use of proceeds of QZABs and actual actions to proceed with “due diligence” to spend such proceeds on qualified purposes are based on objective reasonableness standards, as used in the definition of “reasonable expectations or reasonableness” in § 1.148-1(b) of the arbitrage regulations. 2. Proceeds Spent for Rehabilitation, Repair or Equipment Section 1397E(d)(5)(A) and
(B)provides that the term “qualified purpose” with respect to any qualified zone academy includes rehabilitating or repairing the public school facility in which such academy is established, and providing equipment for use at such academy. The 2004 Proposed Regulations specify that, if proceeds of an issue are spent for a purpose described in section 1397E(d)(5)(A) or
(B)with respect to a qualified zone academy, then those proceeds are treated as used for a qualified purpose with respect to the academy during any period after such expenditure that
(1)the property financed with those proceeds is used for the purposes of the academy and
(2)the academy maintains its status as a qualified zone academy. For this purpose, the retirement from service of financed property due to normal wear or obsolescence does not cause the property not to be used for a qualified purpose with respect to a qualified zone academy. The Temporary Regulations provide guidance on the applicable standard for determining whether proceeds of QZABs are used for a qualified purpose of “rehabiliting” a public school facility under section 1397E(d)(5)(A), based on a known existing standard used for purposes of the rehabilitation tax credit under section 47. In particular, in determining whether proceeds of QZABs are used for a qualified purpose of “rehabilitating” a public school facility under section 1397E(d)(5)(A), rules similar to those used for purposes of the rehabilitation tax credit in section 47(c) (other than sections 47(c)(1)(B) and 47(c)(2)(B)(v)) shall apply. Set forth in this preamble is a general description of certain aspects of this rehabilitation expenditure standard. In general, the rehabilitation standard under section 47 requires a substantial rehabilitation involving a building that already has been placed in service and a rehabilitation process that preserves specified portions of the existing walls of the building. Specifically, at least 50 percent of the existing external walls of the rehabilitated building must be retained as external walls, at least 75 percent of the existing external walls must be retained as internal or external walls, and at least 75 percent of the existing internal structural framework must be retained. Under this rehabilitation standard, eligible rehabilitation expenditures include some expenditures for reconstruction, subject, however, to the foregoing restrictions on retention of certain percentages of the existing walls. In addition, however, under this rehabilitation standard, eligible rehabilitation expenditures do not include expenditures to enlarge existing buildings or expenditures to acquire existing buildings. In adopting the rehabilitation standard used in section 47 for purpose of section 1397E, the IRS and the Treasury Department declined to adopt one public comment which suggested that rehabilitation should include complete reconstruction of a building. Here, the IRS and the Treasury Department determined that such a broad interpretation of rehabilitation effectively to include new construction would be beyond Congressional intent. 3. Proceeds Spent to Develop Course Materials or Train Teachers Section 1397E(d)(5)(C) and
(D)provides that the term “qualified purpose” with respect to any qualified zone academy includes developing course materials for education to be provided at such academy, and training teachers and other school personnel in such academy. The 2004 Proposed Regulations provide that, if proceeds of an issue are spent for a purpose described in section 1397E(d)(5)(C) or
(D)with respect to a qualified zone academy, then those proceeds are treated as used for a qualified purpose with respect to the academy during any period after such expenditure. Commentators supported this provision of the 2004 Proposed Regulations. The Temporary Regulations retain this provision. 4. Special Rule for Determining Status as Qualified Zone Academy Section 1397E(d)(4)(A)(iv) provides that a public school (or academic program within a public school) is a qualified zone academy only if, among other requirements, the public school is located in an empowerment zone or enterprise community, or there is a reasonable expectation (as of the issue date of the issue) that at least 35 percent of the students attending the school or participating in the program (as the case may be) will be eligible for free or reduced-cost lunches under the school lunch program established under the Richard B. Russell National School Lunch Act. For purposes of determining whether an issue complies with section 1397E(d)(4)(A)(iv), the 2004 Proposed Regulations provide that a public school is treated as located in an empowerment zone or enterprise community for the entire term of the issue if the public school is located in an empowerment zone or enterprise community on the issue date of the issue. Commentators agreed with this provision of the 2004 Proposed Regulations relating to empowerment zones and enterprise communities. The Temporary Regulations retain this provision. Commentators also requested clarification of the relevant time period for determining compliance with the 35-percent free or reduced-cost school lunch program test. The Temporary Regulations provide that the test looks to whether there is a reasonable expectation (as of the issue date of the bonds) that at least 35 percent of the students attending the school or participating in the program (as the case may be) will be eligible for free or reduced-cost lunches during the one-year period following the date the bonds are issued. C. Remedial Actions 1. In General Prior to the issuance of the 2004 Proposed Regulations, comments were received requesting guidance specifying remedial actions that may be taken to cure a violation of the 95-percent test in section 1397E(d)(1)(A). The 2004 Proposed Regulations specify two remedial actions that may be taken in certain circumstances if less than 95 percent of the proceeds of an issue actually are used for a qualified purpose with respect to a qualified zone academy. These remedial actions are available only if the issuer reasonably expected on the issue date of the bonds that:
(1)The issue would meet the requirements of section 1397E(f)(1)(A), (B), and (C); and
(2)at least 95 percent of the proceeds of the issue would be used for a qualified purpose with respect to a qualified zone academy for the entire term of the issue (without regard to any redemption provision). As discussed in this preamble, the two remedial actions specified in the 2004 Proposed Regulations are
(1)redemption or defeasance of the nonqualified bonds, and
(2)alternative use of the disposition proceeds. If the applicable requirements are met, the redemption or defeasance remedial action is available to cure any failure to satisfy the 95-percent test that was not reasonably expected as of the issue date. The alternative use of disposition proceeds remedial action applies only to certain dispositions of financed property for cash. Commentators recommended that the 2004 Proposed Regulations be amended to provide additional flexibility for issuers if the failure to properly use proceeds is based on a loss of status of the public school or academic program as a qualified zone academy. Consistent with the 2006 Act, the Treasury Department and the IRS have concluded that the remedial actions of redemption and defeasance in the 2004 Proposed Regulations will adequately address situations where there has been a disqualifying change in the status of an academy. The Temporary Regulations retain these two remedial actions with certain modifications relating to the amendments to section 1397E introduced by the 2006 Act. 2. Redemption or Defeasance of Nonqualified Bonds Under the 2004 Proposed Regulations, a redemption or defeasance remedial action is taken if:
(1)All of the nonqualified bonds of the issue (determined by applying the principles of § 1.142-2(e)) are redeemed within 90 days after the date on which the failure to properly use proceeds occurs;
(2)if any nonqualified bonds of the issue are not redeemed within 90 days after the date on which the failure to properly use proceeds occurs (the unredeemed nonqualified bonds), a defeasance escrow is established for the unredeemed nonqualified bonds within 90 days after the date on which the failure to properly use proceeds occurs; or
(3)if the failure to properly use proceeds is a disposition of financed property described in section 1397E(d)(5)(A) or
(B)and the consideration for the disposition is exclusively cash, all of the disposition proceeds (as defined in § 1.141-12(c)(1)) are used within 90 days after the date of the disposition to redeem, or establish a defeasance escrow for, a pro rata portion of the nonqualified bonds of the issue. The Temporary Regulations retain the remedial actions described in this preamble but, in accordance with new section 1397E(f)(3), the Temporary Regulations limit defeasance of nonqualified bonds to bonds the proceeds of which have actually been spent for a qualified purpose with respect to a qualified academy within the 5-year period beginning on the issue date of the bonds. For proceeds that have not been spent within the 5-year period, the only remedial action available to the issuer is redemption of nonqualified bonds under the principles of section 142. 3. Failure to Properly Use Proceeds For unspent proceeds, the 2004 Proposed Regulations provide that a failure to properly use proceeds occurs on the earlier of:
(1)The first date on which the public school (or academic program within the public school) fails to constitute a qualified zone academy; or
(2)the first date on which the issuer fails to have a reasonable expectation to proceed with due diligence to spend at least 95 percent of the proceeds of the issue for a qualified purpose with respect to a qualified zone academy. The Temporary Regulations retain the provisions concerning the failure to properly use unspent proceeds but implement section 1397E(f)(1)(A) by adding a provision that improper use also occurs if 95 percent of the bond proceeds have not been properly spent within the 5-year period beginning on the day the bonds are issued. For proceeds that have been spent for rehabilitation, repair or equipment described in section 1397E(d)(5)(A) or
(B)with respect to a qualified zone academy, the 2004 Proposed Regulations provide that a failure to properly use proceeds occurs on the earlier of:
(1)The first date on which the public school (or academic program within the public school) fails to constitute a qualified zone academy; and
(2)the first date on which an action is taken that causes the issuer to fail actually to use at least 95 percent of the proceeds of the issue for a qualified purpose with respect to a qualified zone academy. If proceeds have been spent for course materials or training described in section 1397E(d)(5)(C) or
(D)with respect to a qualified zone academy, no event subsequent to such expenditure shall constitute a failure to properly use such proceeds under the 2004 Proposed Regulations. 4. Defeasance Escrow The 2004 Proposed Regulations define “defeasance escrow” as an irrevocable escrow established to retire bonds on the earliest call date after the date on which the failure to properly use proceeds occurs in an amount that is sufficient to retire the bonds on that call date. At least 90 percent of the weighted average amount in a defeasance escrow must be invested in investments (as defined in § 1.148-1(b)), except that no amount in a defeasance escrow may be invested in any investment the obligor (or any person that is a related party with respect to the obligor within the meaning of § 1.150-1(b)) of which is a user of proceeds of the bonds. All purchases or sales of an investment in a defeasance escrow must be made at the fair market value of the investment within the meaning of § 1.148-5(d)(6). Under the 2004 Proposed Regulations, the issuer must pay to the United States, at the same time and in the same manner as rebate amounts are required to be paid under § 1.148-3 (or at such other time or in such other manner as the Commissioner may prescribe), 100 percent of the investment earnings on amounts in the defeasance escrow. For this purpose, the first computation period begins on the date on which the failure to properly use proceeds occurs. Under the 2004 Proposed Regulations, proceeds of QZABs (other than unspent proceeds of the issue for which the failure to properly use proceeds occurs) are not permitted to be used to redeem or defease the nonqualified bonds. In addition, the issuer must provide written notice to the Commissioner of the establishment of the defeasance escrow within 90 days of the date the defeasance escrow is established. Commentators suggested various modifications to the requirement that issuers rebate to the United States 100 percent of the investment earnings on amounts in a defeasance escrow. Alternative approaches suggested by commentators included:
(1)Limiting the rebate requirement to investment earnings in excess of the yield on the issue of QZABs;
(2)limiting the rebate amount to investment earnings in excess of the total debt service requirements to be paid out of the defeasance escrow; and
(3)limiting the rebate amount to the amount of the QZAB credit. The IRS and Treasury Department have concluded that the rebate requirement should only apply to earnings in excess of the yield on the issue of QZABs. Thus, the Temporary Regulations provide that the issuer of QZABs with a defeasance escrow must rebate to United States any investment earnings in the defeasance escrow that are in excess of the yield, as defined in § 1.148-1(b), on the issue of QZABs. For this purpose, the credit rate for the QZAB issue is not included in the yield on the issue. Some commentators suggested that the first computation period for rebate purposes begin on the date the defeasance escrow is established, rather than the date on which the failure to properly use proceeds occurs. These commentators noted that the 2004 Proposed Regulations create a possible 90-day period during which an issuer would be required to compute yield on an escrow that is yet to be established. The Temporary Regulations adopt the change in start date for the computation period in accordance with this comment. One commentator recommended that certain small, low-wealth local education agencies be exempt from the rebate requirement. The IRS and the Treasury Department have considered this recommendation and have concluded that the rebate requirement is appropriate to ensure compliance with the 95-percent use-of-proceeds requirement of section 1397E(d)(1)(A), regardless of the size or wealth of the local education agency. Thus, the Temporary Regulations do not adopt this recommendation. Some commentators suggested that the regulations provide that a defeasance of a QZAB in the context of taking a remedial action not be treated as a significant modification (within the meaning of § 1.1001-3) and reissuance of the QZAB. The Temporary Regulations do not address the circumstances in which a reissuance of a QZAB will occur. The Temporary Regulations do provide, however, that, for purposes of determining whether the establishing of a defeasance escrow as a remedial action results in an exchange under § 1.1001-1(a), the QZAB is treated as a tax-exempt bond under § 1.1001-3(e)(5)(ii)(B)( *1* ). Section 1.1001-3(e)(5)(ii)(B)( *1* ) provides that a defeasance of a tax-exempt bond is not a significant modification even if the issuer is released from any liability to make payments under the instrument if the defeasance occurs by operation of the terms of the original bond and the issuer places in trust government securities or tax-exempt government bonds that are reasonably expected to provide interest and principal payments sufficient to satisfy the payment obligations under the bond. 5. Alternative Use of Disposition Proceeds The alternative use of disposition proceeds remedial action in the 2004 Proposed Regulations has four requirements. First, the failure to properly use proceeds must be a disposition of financed property described in section 1397E(d)(5)(A) or
(B)and the consideration for the disposition must be exclusively cash. Second, the issuer must reasonably expect as of the date of the disposition that:
(1)All of the disposition proceeds, plus any amounts received from investing the disposition proceeds, will be spent within two years after the date of the disposition for a qualified purpose with respect to a qualified zone academy; or
(2)to the extent not expected to be so spent, used within 90 days after the date of the disposition to take a redemption or defeasance remedial action. Third, the disposition proceeds, plus any amounts received from investing the disposition proceeds, must be treated as proceeds for purposes of section 1397E. Fourth, if all of the disposition proceeds, plus any amounts received from investing the disposition proceeds, are not actually spent for a qualified purpose within the two-year period beginning on the date of the disposition (or used within 90 days after the date of the disposition to take a redemption or defeasance remedial action), the remainder of such amounts must be used within 90 days after the end of that two-year period for a redemption or defeasance remedial action. Some commentators recommended that the alternative use of disposition proceeds remedial action be modified to provide that the amounts relating to a disposition that are required to be spent for a qualified purpose be capped at the principal amount of the QZAB outstanding at the time of the disposition. The IRS and Treasury Department have considered this comment and have concluded that the requirement in the 2004 Proposed Regulations that all of the disposition proceeds, plus any amounts received from investing the disposition proceeds, be spent for a qualified purpose is appropriate to ensure that QZABs are issued for qualified purposes. Thus, the Temporary Regulations do not adopt this comment. D. Payment of Principal, Interest or Redemption Price The 2004 Proposed Regulations provide that the use of proceeds of a bond to pay principal, interest, or redemption price of the bond or another bond is not a qualified purpose within the meaning of section 1397E(d)(5). Thus, the use of proceeds of a bond to refund another bond is not a qualified purpose under the 2004 Proposed Regulations. In addition, the use of proceeds of a bond to fund a sinking fund to repay the bond is not a qualified purpose under the 2004 Proposed Regulations. One commentator recommended that the 2004 Proposed Regulations be modified to permit proceeds of a QZAB to be used to repay an interim bridge loan incurred with the explicit intent to be refinanced with a subsequent issuance. In response to this comment, the Temporary Regulations provide an exception to the general rule that the use of proceeds of a bond to pay principal, interest, or redemption price of the bond or another bond is not a qualified purpose under section 1397E(d)(5). IV. Arbitrage Investment Restrictions New section 1397E(g) added by the 2006 Act provides that the arbitrage requirements of section 148 applicable to tax-exempt state or local governmental bonds under section 103 also apply to QZABs. The Temporary Regulations provide guidance regarding the application of the arbitrage requirements to QZABs. In general, under section 148, subject to various prompt spending exceptions (for example, the 18-month prompt spending exception to arbitrage rebate for capital projects under § 1.148-7(d) and the 2-year construction spending exception to arbitrage rebate under section 148(f)(4)(C) and § 1.148-7(e)) and other specified exceptions (for example, the bona fide debt service exception for certain long-term tax-exempt governmental, non-private activity bonds under section 148(f)(4)(A)), the arbitrage investment restrictions, including the yield restrictions and the arbitrage rebate requirement, apply broadly to “gross proceeds” of tax-exempt bonds. “Gross proceeds” represents a broad catch-all category of bond proceeds which includes various subsidiary types of proceeds, including, among others, “sale proceeds” derived from the sale of bonds, “investment proceeds” derived from investing proceeds of bonds, and “replacement proceeds” with a reasonable nexus to a bond issue (for example, sinking funds reasonably expected to be used to pay debt service on bonds and pledged funds used to secure bonds). The Temporary Regulation provide that, except as otherwise provided, the arbitrage investment restrictions under section 148 and the exceptions to those restrictions apply to gross proceeds of QZABs issued under section 1397E to the same extent and in the same manner as they apply to gross proceeds of tax-exempt state or local governmental bonds issued under section 103. For this purpose, references in the arbitrage restrictions to tax-exempt bonds generally shall be deemed to refer to QZABs and, to the extent that any particular arbitrage restriction depends on whether bonds are private activity bonds under section 141, the determination of whether QZABs are private activity bonds shall be based on the general definition of private activity bonds under section 141. The Temporary Regulations provide limited guidance to tailor the application of the arbitrage investment restrictions to QZABs in certain specific respects. Thus, the Temporary Regulations provide that a five-year temporary period exception to the arbitrage yield restriction requirement applies to proceeds of QZABs if an issuer reasonably expects to spend 95 percent of the proceeds of an issue of QZABs for qualified purposes within the 5-year period beginning on the issue date of the QZABs. The Temporary Regulations provide that, in determining the yield on an issue of QZABs for arbitrage purposes, the QZAB credit is disregarded. Here, yield focuses on yield paid by the issuer on the QZABs rather than the tax credit benefit to the investor. The Temporary Regulations provide that the yield restriction rules are inapplicable to amounts placed in defeasance escrow as a remedial action. The Treasury Department and IRS have a concern that QZAB issuers may be unable to find appropriate investments of the amounts in the escrow at or below the yield on the bonds. The Temporary Regulations provide that the exception to arbitrage yield restriction for certain investments in non-AMT tax-exempt bonds is inapplicable to QZABs. The IRS and the Treasury Department have a concern about the clear arbitrage investment potential associated with investing zero-yielding QZABs in non-AMT tax-exempt bond investments at materially higher yields. The Temporary Regulations provide that, in determining whether an issue of QZABs qualifies for the small issuer exception to the arbitrage rebate requirement under section 148(f)(4)(D), both QZABs and tax-exempt bonds (other than private activity bonds) that are reasonably expected to be issued or actually issued by the QZAB issuer (and other covered on-behalf-of entities and subordinate entities) within a calendar year are taken into account in measuring the applicable size limitation. Finally, consistent with the treatment of defeasance escrows for purposes of yield restriction, in applying the small issuer exception to the rebate of earnings from investments of amounts in a defeasance escrow, the Temporary Regulations provide that the issuer is not treated as a small issuer and amounts earned from such investments must be rebated to the United States. V. Information Reporting Requirement Issuers of QZABs must submit information reporting returns to the IRS similar to the information reporting returns required to be submitted to the IRS under section 149(e) for tax-exempt State or local bonds at the same time and manner as those reports are required to be submitted to the IRS on such forms as shall be prescribed by the Commissioner for such purpose. Effective/Applicability Dates In general, except as otherwise provided, the Temporary Regulations apply to bonds sold on or after September 14, 2007. In general, except as otherwise provided, § 1.1397E-1(h)(2), (i), and
(j)of the Temporary Regulations regarding the five-year spending period, the arbitrage investment restrictions, and the information reporting requirement added by the 2006 Act apply to bonds issued pursuant to allocations of the national qualified zone academy bond volume cap authority arising in calendar years after 2005 and sold on or after September 14, 2007. Issuers and taxpayers may apply the Temporary Regulations in whole, but not in part, to bonds sold before September 14, 2007. Certain other special effective dates apply to particular provisions under § 1.1397E(m). Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. For applicability of the Regulatory Flexibility Act, please refer to the cross-reference notice of proposed rulemaking published elsewhere in this **Federal Register** . Pursuant to section 7805(f) of the Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Drafting Information The principal authors of these regulations are Timothy L. Jones and Zoran Stojanovic, Office of Division Counsel/Associate Chief Counsel, IRS (Tax Exempt and Governmental Entities). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 602 Reporting and recordkeeping requirements. Amendments to the Regulations Accordingly, 26 CFR parts 1 and 602 are amended as follows: PART 1—INCOME TAXES **Paragraph 1** . The authority citation for part 1 is amended by adding an entry in numerical order to read as follows: Authority: 26 U.S.C. 7805 * * * Section 1.1397E-1T also issued under 26 U.S.C. 1397E. * * * **Par. 2** . Section 1.1397E-1 is amended by: 1. Redesignating paragraphs (i),
(j)and
(k)as (k),
(l)and (m), respectively. 2. Adding new paragraphs
(i)and (j). 3. Revising newly-designated paragraph (m). The additions and revisions read as follows: § 1.1397E-1 Qualified zone academy bonds.
(i)and
(j)[Reserved]. For further guidance, see § 1.1397E-1T(i) and (j).
(m)*Effective/applicability dates.* Except as provided in this paragraph (m), this section applies to bonds sold on or after September 26, 2000. Each of paragraphs
(c)and
(k)of this section may be applied by issuers to bonds that are sold before September 26, 2000. **Par. 3** . Section 1.1397E-1T is added to read as follows: § 1.1397E-1T Qualified zone academy bonds (temporary).
(a)*In general* —(1) *Overview.* In general, a qualified zone academy bond (QZAB or QZABs) is a taxable bond issued by a state or local government the proceeds of which are used to improve certain eligible public schools. An eligible taxpayer that holds a QZAB generally is allowed annual Federal income tax credits in lieu of periodic interest payments. These credits compensate the eligible taxpayer for lending money to the issuer and function as payments of interest on the bond. Accordingly, this section generally treats the allowance of a credit as if it were a payment of interest on the bond. This section also provides other rules for QZABs, including rules governing the credit rate, the private business contribution requirement, the maximum term, use and expenditure of proceeds, remedial actions, eligible issuers, arbitrage investment restrictions, and information reporting.
(2)*Certain definitions* —(i) *In general.* For purposes of this section, except as otherwise provided in this section, the following definitions apply: the definitions set forth in this section; the definitions used for general tax-exempt bond purposes in § 1.150-1; and the definitions used for purposes of the arbitrage investment restrictions on tax-exempt bonds in § 1.148-1(b).
(ii)*Applicable definition of proceeds* —(A) U *se and expenditure provisions.* Except as provided in paragraphs (a)(2)(ii)(B) and (a)(2)(ii)(C) of this section, for purposes of all applicable requirements regarding use and expenditure of proceeds of QZABs under section 1397E and this section, proceeds means “sale proceeds,” as defined in § 1.148-1(b), plus “investment proceeds,” as defined in § 1.148-1(b).
(B)*Private business contribution requirement.* For purposes of the private business contribution requirement of section 1397E(d)(2), proceeds means “sale proceeds,” as defined in § 1.148-1(b).
(C)*Arbitrage investment restrictions.* For purposes of the scope of application of the arbitrage investment restrictions under section 1397E(g) and paragraph
(i)of this section, proceeds generally means gross proceeds, as defined in § 1.148-1(b). In addition, in applying the arbitrage investment restrictions under paragraph
(i)of this section and section 148, the various applicable definitions of the various types of proceeds of tax-exempt bonds under § 1.148-1(b) shall apply.
(b)and
(c)[Reserved]. For further guidance, see § 1.1397E-1(b) and (c).
(d)*Maximum term.* The maximum term for a QZAB is determined under section 1397E(d)(3) by using a discount rate equal to 110 percent of the long-term adjusted applicable Federal rate (AFR), compounded semi-annually, for the month in which the bond is sold. The Internal Revenue Service publishes this figure each month in a revenue ruling that is published in the Internal Revenue Bulletin. See § 601.601(d)(2)(ii)( *b* ) of this chapter. A bond is sold on the sale date, as defined in § 1.150-1(c)(6), which is the first day on which there is a binding contract in writing for the sale or exchange of the bond.
(e)through
(g)[Reserved]. For further guidance, see § 1.1397E-1(e) through (g).
(h)*Use of proceeds* —(1) *In general.* Section 1397E(d)(1) provides that a bond issued as part of an issue is a QZAB only if, among other requirements, at least 95 percent of the proceeds of the issue are to be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency (as defined in section 1397E(d)(4)(B)), and the issue meets the requirements of section 1397E(f) and (g). Section 1397E(d)(5) defines *qualified purpose,* with respect to any qualified zone academy, as rehabilitating or repairing the public school facility in which such academy is established, providing equipment for use at such academy, developing course materials for education to be provided at such academy, and training teachers and other school personnel in such academy. Section 1397E(d)(4)(A) defines *qualified zone academy* as any public school (or academic program within a public school) that is established by and operated under the supervision of an eligible local education agency to provide education or training below the postsecondary level and that meets the requirements of section 1397E(d)(4)(A)(i), (ii),
(iii)and (iv).
(2)*Use of proceeds requirements.* An issue meets the requirements of sections 1397E(d)(1)(A) and
(f)only if—
(i)The issuer reasonably expects, as of the issue date of the issue, that—
(A)At least 95 percent of the proceeds from the sale of the issue are to be spent for 1 or more qualified purposes with respect to qualified zone academies within the 5-year period beginning on the issue date of the QZAB;
(B)A binding commitment with a third party to spend at least 10 percent of the proceeds from the sale of the issue will be incurred within the 6-month period beginning on the issue date of the QZAB;
(C)At least 95 percent of the proceeds from the sale of the issue will be spent for a qualified purpose with respect to a qualified zone academy with due diligence (with due diligence measured by the reasonableness standard under § 1.148-1(b); and
(D)At least 95 percent of the proceeds of the issue will be used for a qualified purpose with respect to a qualified zone academy for the entire term of the issue (without regard to any redemption provision); and
(ii)Except as otherwise provided in paragraph (h)(7) of this section, at least 95 percent of the proceeds of the issue are actually used for a qualified purpose with respect to a qualified academy for the entire term of the issue (without regard to any redemption provision).
(iii)*Extension of 5-year period.* The Commissioner may extend the period described in paragraph (h)(2)(i)(A) of this section if the issuer, prior to the end of such period, submits a private ruling request, and establishes to the satisfaction of the Commissioner that—
(A)The failure to satisfy the 5-year spending requirement is due to reasonable cause; and
(B)The expenditure of at least 95 percent of the proceeds from the sale of the issue will be spent for a qualified purpose with respect to a qualified zone academy will proceed with due diligence.
(3)*Unspent proceeds.* For purposes of paragraphs (h)(2)(i)(D) and (h)(2)(ii) of this section, during the period described in paragraph (h)(2)(i)(A) of this section, including any extension under paragraph (h)(2)(iii) of this section, unspent proceeds are treated as used for a qualified purpose with respect to a qualified zone academy if the issuer reasonably expects to proceed with due diligence to spend those proceeds for a qualified purpose with respect to a qualified zone academy during that period.
(4)*Proceeds spent for rehabilitation, repair or equipment* —(i) *In general.* Under section 1397E(d)(5)(A) the term *qualified purpose* with respect to any qualified zone academy includes rehabilitating or repairing the public school facility in which such academy is established. For this purpose, in determining whether proceeds are spent for rehabilitation, rules similar to those under section 47(c) (other than sections 47(c)(1)(B) and 47(c)(2)(B)(iv)) shall apply. Under section 1397E(d)(5)(B) the term *qualified purpose* also includes providing equipment for use at such academy. If proceeds of an issue are spent for a purpose described in section 1397E(d)(5)(A) or
(B)with respect to a qualified zone academy, then those proceeds are treated as used for a qualified purpose with respect to the academy during any period after such expenditure that—
(A)The property financed with those proceeds is used for the purposes of the academy; and
(B)The academy maintains its status as a qualified zone academy under section 1397E(d)(4).
(ii)*Retirement from service.* The retirement from service of financed property due to normal wear or obsolescence does not cause the property to fail to be used for a qualified purpose with respect to a qualified zone academy.
(5)*Proceeds spent to develop course materials or train teachers.* Section 1397E(d)(5)(C) and
(D)provides that the term *qualified purpose* with respect to any qualified zone academy includes developing course materials for education to be provided at such academy, and training teachers and other school personnel in such academy. If proceeds of an issue are spent for a purpose described in section 1397E(d)(5)(C) or
(D)with respect to a qualified zone academy, then those proceeds are treated as used for a qualified purpose with respect to the academy during any period after such expenditure.
(6)*Special rule for determining status as qualified zone academy.* Section 1397E(d)(4)(A)(iv) provides that a public school (or academic program within a public school) is a qualified zone academy only if, among other requirements, the public school is located in an empowerment zone or enterprise community (as defined in section 1393), or there is a reasonable expectation (as of the issue date of the issue) that at least 35 percent of the students attending the school or participating in the program (as the case may be) will be eligible for free or reduced-cost lunches under the school lunch program established under the Richard B. Russell National School Lunch Act. For purposes of determining whether an issue complies with section 1397E(d)(4)(A)(iv)—
(i)A public school is treated as located in an empowerment zone or enterprise community for the entire term of the issue if the public school is located in an empowerment zone or enterprise community on the issue date of the issue; and
(ii)The determination of whether there is a reasonable expectation (as of the issue date of the issue) that at least 35 percent of the students attending the school or participating in the program (as the case may be) will be eligible for free or reduced-cost lunches under the school lunch program established under the Richard B. Russell National School Lunch Act is based on expectations regarding the one-year period following the issue date.
(7)*Remedial actions* —(i) *General rule.* If less than 95 percent of the proceeds of an issue are properly used (as determined under paragraph (h)(7)(ii)(D) of this section), the issue will be treated as meeting the requirements of section 1397E(d)(1)(A) if the issue met the requirements of paragraph (h)(2)(i) of this section and a remedial action is taken under paragraph (h)(7)(ii) or
(iii)of this section.
(ii)*Redemption or defeasance—*
(A)*In general.* A remedial action is taken under this paragraph (h)(7)(ii) if the requirements of paragraphs (h)(7)(ii)(B) and
(C)of this section are met.
(B)*Retirement of nonqualified bonds* —(1) *In general.* The requirements of this paragraph (h)(7)(ii)(B) are met if— ( *i* ) All of the nonqualified bonds of the issue (determined by applying the principles of § 1.142-2(e)) are redeemed within 90 days after the date on which the failure to properly use proceeds occurs; or ( *ii* ) To the extent of proceeds of the issue that have been actually spent for a qualified purpose with respect to a qualified zone academy, if any nonqualified bonds of the issue are not redeemed within 90 days after the date on which the failure to properly use such proceeds occurs (the unredeemed nonqualified bonds), a defeasance escrow is established for the unredeemed nonqualified bonds within 90 days after the date on which the failure to properly use proceeds occurs. ( *2* ) *Special rule for dispositions for cash.* If the failure to properly use proceeds is a disposition of financed property described in section 1397E(d)(5)(A) or
(B)and the consideration for the disposition is exclusively cash, the requirements of this paragraph (h)(7)(ii)(B) are met if all of the disposition proceeds (as defined in paragraph (h)(7)(iv) of this section) are used within 90 days after the date of the disposition to redeem, or establish a defeasance escrow for, a pro rata portion of the nonqualified bonds of the issue. ( *3* ) *Definition of defeasance escrow.* For purposes of this section, a defeasance escrow is an irrevocable escrow established to retire nonqualified bonds on the earliest call date after the date on which the failure to properly use proceeds occurs in an amount that is sufficient to retire nonqualified bonds on that call date. At least 90 percent of the weighted average amount in a defeasance escrow must be invested in investments (as defined in § 1.148-1(b)), except that no amount in a defeasance escrow may be invested in any investment the obligor (or any person that is a related party with respect to the obligor within the meaning of § 1.150-1(b)) of which is a user of proceeds of the bonds. All purchases or sales of an investment in a defeasance escrow must be made at the fair market value of the investment within the meaning of § 1.148-5(d)(6).
(C)*Additional rules* —( *1* ) *Limitation on source of funding.* Proceeds of an issue of QZABs (other than unspent proceeds of the issue for which the failure to properly use proceeds occurs) must not be used to redeem or defease nonqualified bonds under paragraph (h)(7)(ii)(B) of this section.
(2)*Rebate requirement.* The issuer must pay to the United States, at the same time and in the same manner as rebate amounts are required to be paid under § 1.148-3 (or at such other time or in such other manner as the Commissioner may prescribe), any investment earnings on amounts in a defeasance escrow established under paragraph (h)(7)(ii)(B) of this section that are in excess of the yield on the issue of QZABs with respect to which the defeasance escrow was established. For this purpose, the first computation period begins on the date on which the defeasance escrow is established.
(3)*Notice of defeasance.* The issuer must provide written notice to the Commissioner, at the place designated in § 1.150-5(a), of the establishment of the defeasance escrow within 90 days of the date the defeasance escrow is established.
(D)*When a failure to properly use proceeds occurs* —( *1* ) *Unspent proceeds.* For unspent proceeds, a failure to properly use proceeds occurs on the earlier of— ( *i* ) The first date on which the public school (or academic program within the public school) fails to constitute a qualified zone academy; ( *ii* ) The first date on which the issuer fails to have a reasonable expectation to proceed with due diligence to spend at least 95 percent of the proceeds of the issue for a qualified purpose with respect to a qualified zone academy; or ( *iii* ) The last day of the period described in paragraph (h)(2)(i)(A) of this section, including any extension, if less than 95 percent of the proceeds of the issue are actually spent for a qualified purpose with respect to a qualified zone academy. ( *2* ) *Proceeds spent for rehabilitation, repair or equipment.* For proceeds that have been spent for a purpose described in section 1397E(d)(5)(A) or
(B)with respect to a qualified zone academy, a failure to properly use proceeds occurs on the earlier of— ( *i* ) The first date on which the public school (or academic program within the public school) fails to constitute a qualified zone academy; and ( *ii* ) The first date on which an action is taken that causes the issuer to fail to actually to use at least 95 percent of the proceeds of the issue for a qualified purpose with respect to a qualified zone academy. ( *3* ) *Proceeds spent for course materials or training.* If proceeds have been spent for a purpose described in section 1397E(d)(5)(C) or
(D)with respect to a qualified zone academy, no event subsequent to such expenditure shall constitute a failure to properly use such proceeds.
(iii)*Alternative use of disposition proceeds.* A remedial action is taken under this paragraph (h)(7)(iii) if all of the requirements of paragraphs (h)(7)(iii)(A) through
(D)of this section are met—
(A)The failure to properly use proceeds (as determined under paragraph (h)(7)(ii)(D) of this section) is a disposition of financed property described in section 1397E(d)(5)(A) or
(B)and the consideration for the disposition is exclusively cash;
(B)The issuer reasonably expects as of the date of the disposition that— ( *1* ) All of the disposition proceeds will be spent within the two-year period beginning with the date of the disposition for a qualified purpose with respect to a qualified zone academy; or ( *2* ) To the extent not expected to be so spent, the disposition proceeds will be used within 90 days after the date of the disposition to redeem or defease bonds in a manner that meets the requirements of paragraph (h)(7)(ii) of this section;
(C)The disposition proceeds are treated as proceeds for purposes of section 1397E; and
(D)If all of the disposition proceeds are not actually used in the manner described in paragraph (h)(7)(iii)(B) of this section, the remainder of such amounts are used within 90 days after the end of the period described in paragraph (h)(7)(iii)(B)( *1* ) of this section for a remedial action that meets the requirements of paragraph (h)(7)(ii) of this section.
(iv)*Definition of disposition proceeds and allocation among multiple funding sources.* For purposes of this paragraph (h)(7), disposition proceeds means *disposition proceeds,* as defined in § 1.141-12(c)(1), plus amounts derived from investing disposition proceeds. If property has been financed with an issue of QZABs and one or more other funding sources, any disposition proceeds from that property are allocated to the issue under the principles of § 1.141-12(c)(3).
(8)*Payment of principal, interest or redemption price—(i) In general.* Except as provided in paragraphs (h)(8)(ii) and (h)(8)(iii) of this section, the use of proceeds of a bond to pay principal, interest, or redemption price of the bond or another bond is not a qualified purpose within the meaning of section 1397E(d)(5).
(ii)*Exception for certain eligible reimbursements of interim refinancings.* The use of proceeds of a bond (the refinancing bond) to pay principal, interest or redemption price of another bond (the prior bond) is a qualified purpose within the meaning of section 1397E(d)(5) to the extent that—
(A)The prior bond was not a QZAB (and, in the case of a series of refinancings, no earlier bond in the series was a QZAB);
(B)The proceeds of the prior bond (or the original bond in the case of a series of refinancings, as applicable) were spent for a qualified purpose under section 1397E(d)(5) (the original expenditure); and
(C)The issuer makes a valid reimbursement allocation to allocate the proceeds of the refinancing bond to the payment of the original expenditure (the reimbursement allocation), which allocation satisfies the requirements for reimbursements under paragraph (h)(9) of this section. For purposes of applying the rules for reimbursement, a refinancing bond which otherwise meets the requirements of this paragraph (h)(8)(ii) is eligible for reimbursement and is not treated as a disqualified refunding under § 1.150-2(g).
(iii)*Reissuance of a QZAB.* For purposes of determining whether the establishing of a defeasance escrow under paragraph (h)(7)(ii)(B)( *1* )( *ii* ) of this section results in an exchange under § 1.1001-1(a), the QZAB is treated as a tax-exempt bond under § 1.1001-3(e)(5)(ii)(B)( *1* ).
(9)*Reimbursement.* An expenditure for a qualified purpose may be reimbursed with proceeds of a QZAB. For this purpose, rules similar to those on reimbursement of expenditures in § 1.142-4(b) and § 1.150-2 shall apply. In applying these reimbursement rules, expenditures eligible for reimbursement under § 1.150-2(d)(3) shall be deemed to mean any expenditure for a qualified purpose under section 1397E(d)(5).
(i)*Arbitrage investment restrictions* —(1) *In general.* Under section 1397E(g) and this paragraph (i), and except as otherwise provided in this paragraph (i), the arbitrage investment restrictions and rebate requirements under section 148 and § 1.148-1 to § 1.148-11, inclusive, and the exceptions to those restrictions, apply broadly to gross proceeds of QZABs issued under section 1397E to the same extent and in the same manner as they apply to gross proceeds of tax-exempt state or local governmental bonds. For this purpose, references in those sections to tax-exempt bonds generally shall be deemed to refer to QZABs and, to the extent that any particular arbitrage restriction depends on whether bonds are private activity bonds under section 141, the determination of whether QZABs are private activity bonds shall be based on the general definition of private activity bonds under section 141. In applying section 148 and the regulations under that section to QZABs, the modifications set forth in paragraphs (i)(2) through
(6)of this section shall apply.
(2)*5-year temporary period exception to arbitrage yield restriction.* If an issue of QZABs meets the requirements of section 1397E(f)(1) and paragraph (h)(2)(i) of this section, then the proceeds of the issue of QZABs are treated as qualifying for a 5-year temporary period exception to arbitrage yield restriction under § 1.148-2(e)(2) beginning on issue date of the issue.
(3)*Disregard QZAB credit in QZAB yield for arbitrage purposes.* In determining the yield on an issue of QZABs for arbitrage purposes under § 1.148-4, the QZAB credit allowed under section 1397E(a) is disregarded.
(4)*Non-AMT tax-exempt bond investment exception inapplicable.* The exception to arbitrage yield restriction for investments of gross proceeds of tax-exempt bonds in specified tax-exempt bond investments not subject to section 148(b)(3)(B) (relating to an exception to the definition of “investment property” for specified tax-exempt bonds) and § 1.148-2(d)(2)(v) (relating to a corresponding exception to arbitrage yield limitations) is inapplicable.
(5)*Application of small issuer exception to the arbitrage rebate requirement.* Except as otherwise provided in paragraph (i)(6) of this section, for purposes of the small issuer exception to the arbitrage rebate requirement under section 148(f)(4)(D) and § 1.148-8, both QZABs and tax-exempt bonds (other than private activity bonds) that are actually issued or reasonably expected to be issued by the QZAB issuer (and applicable entities aggregated under section 148(f)(4)(D)) within a calendar year are taken into account in measuring the applicable size limitation.
(6)*Certain defeasance escrow earnings.* With respect to a defeasance escrow established in a remedial action for an issue of QZABs that meets the special rebate requirement under paragraph (d)(7)(ii)(C)( *2* ) of this section, the QZAB issuer is treated as ineligible for the small issuer exception to arbitrage rebate under section 148(f)(4)(D) and paragraph (i)(5) of this section and compliance with that special rebate requirement is treated as satisfying applicable arbitrage investment restrictions under section 148 for that defeasance escrow.
(j)*Information reporting requirement.* Under section 1397E(h) and this paragraph (j), issuers of QZABs are required to submit information reporting returns to the IRS similar to the information reporting returns required to be submitted to the IRS under section 149(e) for tax-exempt state or local governmental bonds at the same time and in the same manner as those reports are required to be submitted to the IRS on such forms as shall be prescribed by the Commissioner for such purpose.
(k)and
(l)[Reserved]. For further guidance, see § 1.1397E-1(k) and (l).
(m)*Effective/applicability dates* —(1) *In general.* Except as otherwise provided in this paragraph (m), this section applies to bonds sold on or after September 14, 2007.
(2)*Special effective dates* —(i) *Effective dates for paragraphs (h)(2), (i), and
(j)of this section in general.* Paragraphs (h)(2), (i), and
(j)of this section apply to bonds issued pursuant to allocations of the national qualified zone academy bond volume cap authority for calendar years after 2005 and sold on or after September 14, 2007.
(ii)*Permissive retroactive application* —(A) *In general.* Except as otherwise provided in this paragraph (m), issuers and taxpayers may apply this section in whole, but not in part, to bonds sold before September 14, 2007.
(B)*Special rule for certain provisions.* For purposes of the permissive retroactive application rule in paragraph (m)(2)(ii)(A) of this section, paragraphs (h)(2), (i), and
(j)of this section need not be applied to any bonds to which those provisions do not otherwise apply under the general effective date provisions for those provisions in paragraph (m)(2)(i) of this section.
(C)*Definition of proceeds.* Issuers and taxpayers may apply paragraphs
(d)and
(h)of this section, without regard to the definition of proceeds in paragraph (a)(2)(ii) of this section, to bonds sold before September 14, 2007.
(D)*Bonds issued before July 1, 1999.* Paragraphs
(d)and (h)(9) of this section may not be applied to bonds issued before July 1, 1999.
(3)*Expiration date.* The applicability of this section expires on or before July 13, 2010. PART 602—OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT **Par. 4** . The authority citation for part 602 continues to read as follows: Authority: 26 U.S.C. 7805. **Par. 5** . In § 602.101, paragraph
(b)is amended by adding the following entry in numerical order to the table to read as follows: § 602.101 OMB Control numbers.
(b)* * * CFR part or section where identified and described Current OMB control No. * * * * 1.1397E-1T 1545-1908 * * * * Kevin M. Brown, Deputy Commissioner for Services and Enforcement. Approved: July 3, 2007. Eric Solomon, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E7-13665 Filed 7-13-07; 8:45 am] BILLING CODE 4830-01-P NATIONAL LABOR RELATIONS BOARD 29 CFR Part 102 Privacy Act of 1974; Implementation AGENCY: National Labor Relations Board. ACTION: Final rule. SUMMARY: The National Labor Relations Board
(NLRB)issues a final rule exempting three systems of records and portions of four other systems of records from certain provisions of the Privacy Act of 1974, 5 U.S.C. 552a, pursuant to Section (k)(2) of that Act, 5 U.S.C. 552a(k)(2), and amending existing Privacy Act regulations for clarity. DATES: Effective July 16, 2007. FOR FURTHER INFORMATION CONTACT: Tommie Gregg, Sr., Privacy Officer, National Labor Relations Board, Room 7608, 1099 14th Street, NW., Washington, DC 20570-0001,
(202)273-2833, *Tommie.Gregg@nlrb.gov.* SUPPLEMENTARY INFORMATION: On December 13, 2006, the NLRB published in the **Federal Register** a notice proposing twelve systems of records under the Privacy Act of 1974, nine of which consist of an electronic case tracking system and associated paper or electronic files, and the remaining three systems consist of electronic case tracking systems only. The same day, the NLRB also published in the **Federal Register** a notice of proposed rule exempting three of the systems of records and portions of four other systems of records from certain provisions of the Privacy Act, and amending the NLRB's existing Privacy Act regulations for clarity. Both notices provided for a public comment period. In the absence of any comments, the proposed systems of records became final 40 days thereafter. No comments were filed regarding the proposed rule exempting three of the systems of records and portions of four other systems of records from certain provisions of the Privacy Act, and amending the NLRB's existing Privacy Act regulations for clarity. Accordingly, the Board has decided to implement the proposed rule as a final rule, with changes to certain CFR section numbers. In particular, the proposed rule amended the Agency's existing Privacy Act regulations by removing them from Sections 102.117(f) through
(q)of subpart K, and inserting them as Sections 102.117a(a) through
(n)of subpart K. In order to maintain the orderly codification of the CFR, the Agency's Privacy Act regulations instead will be inserted as Sections 102.119(a) through
(n)of subpart K. The Agency's current regulation at subpart L, Section 102.119 (Post-employment Restriction on Activities by Former Officers and Employees), is now re-designated as subpart L, Section 102.120. This rule relates to individuals rather than small business entities. Accordingly, pursuant to the requirements of the Regulatory Flexibility Act, 5 U.S.C. 601-612, this rule will not have a significant impact on a substantial number of small business entities. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the Agency has determined that this rule will not impose new recordkeeping, application, reporting, or other types of information collection requirements on the public. The rule will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among levels of government. Therefore, it is determined that this rule does not have federalism implications under Executive Order 13132. In accordance with Executive Order 12866, it has been determined that this rule is not a “significant regulatory action,” and therefore does not require a Regulatory Impact Analysis. List of Subjects in 29 CFR Part 102 Privacy, Reporting and recordkeeping requirements. For the reasons stated in the above Supplementary Information section, Part 102 of title 29, ch. I of the Code of Federal Regulations, is amended as follows: PART 102—RULES AND REGULATIONS, SERIES 8 1. The authority citation for part 102 is revised to read as follows: Authority: Sections 1, 6, National Labor Relations Act (29 U.S.C. 151, 156). Section 102.117 also issued under section 552(a)(4)(A) of the Freedom of Information Act, as amended (5 U.S.C. 552(a)(4)(A)), and Section 102.117a also issued under section 552a(j) and
(k)of the Privacy Act of 1974 (5 U.S.C. 552a(j) and (k)). Sections 102.143 through 102.155 also issued under section 504(c)(1) of the Equal Access to Justice Act, as amended (5 U.S.C. 504(c)(1)). 2. Section 102.117 is amended by removing paragraphs
(f)through
(q)and by revising the section heading to read as follows: § 102.117 Freedom of Information Act Regulations: Board materials and formal documents available for public inspection and copying; requests for described records; time limit for response; appeal from denial of request; fees for document search and duplication; files and records not subject to inspection. § 102.119 [Redesignated as § 102.120] 3. Section 102.119 is redesignated as § 102.120. 4. A new § 102.119 is added to subpart K to read as follows: § 102.119 Privacy Act Regulations: notification as to whether a system of records contains records pertaining to requesting individuals; requests for access to records, amendment of such records, or accounting of disclosures; time limits for response; appeal from denial of requests; fees for document duplication; files and records exempted from certain Privacy Act requirements.
(a)An individual will be informed whether a system of records maintained by this Agency contains a record pertaining to such individual. An inquiry should be made in writing or in person during normal business hours to the official of this Agency designated for that purpose and at the address set forth in a notice of a system of records published by this Agency, in a Notice of Systems of Governmentwide Personnel Records published by the Office of Personnel Management, or in a Notice of Governmentwide Systems of Records published by the Department of Labor. Copies of such notices, and assistance in preparing an inquiry, may be obtained from any Regional Office of the Board or at the Board offices at 1099 14th Street, NW., Washington, DC 20570. The inquiry should contain sufficient information, as defined in the notice, to identify the record. Reasonable verification of the identity of the inquirer, as described in paragraph
(e)of this section, will be required to assure that information is disclosed to the proper person. The Agency shall acknowledge the inquiry in writing within 10 days (excluding Saturdays, Sundays, and legal public holidays) and, wherever practicable, the acknowledgment shall supply the information requested. If, for good cause shown, the Agency cannot supply the information within 10 days, the inquirer shall within that time period be notified in writing of the reasons therefor and when it is anticipated the information will be supplied. An acknowledgment will not be provided when the information is supplied within the 10-day period. If the Agency refuses to inform an individual whether a system of records contains a record pertaining to an individual, the inquirer shall be notified in writing of that determination and the reasons therefor, and of the right to obtain review of that determination under the provisions of paragraph
(f)of this section. The provisions of this paragraph do not apply to the extent that requested information from the relevant system of records has been exempted from this Privacy Act requirement.
(b)An individual will be permitted access to records pertaining to such individual contained in any system of records described in the notice of system of records published by this Agency, or access to the accounting of disclosures from such records. The request for access must be made in writing or in person during normal business hours to the person designated for that purpose and at the address set forth in the published notice of system of records. Copies of such notices, and assistance in preparing a request for access, may be obtained from any Regional Office of the Board or at the Board offices at 1099 14th Street, NW., Washington, DC 20570. Reasonable verification of the identity of the requester, as described in paragraph
(e)of this section, shall be required to assure that records are disclosed to the proper person. A request for access to records or the accounting of disclosures from such records shall be acknowledged in writing by the Agency within 10 days of receipt (excluding Saturdays, Sundays, and legal public holidays) and, wherever practicable, the acknowledgment shall inform the requester whether access will be granted and, if so, the time and location at which the records or accounting will be made available. If access to the record or accounting is to be granted, the record or accounting will normally be provided within 30 days (excluding Saturdays, Sundays, and legal public holidays) of the request, unless for good cause shown the Agency is unable to do so, in which case the individual will be informed in writing within that 30-day period of the reasons therefor and when it is anticipated that access will be granted. An acknowledgment of a request will not be provided if the record is made available within the 10-day period. If an individual's request for access to a record or an accounting of disclosure from such a record under the provisions of this paragraph is denied, the notice informing the individual of the denial shall set forth the reasons therefor and advise the individual of the right to obtain a review of that determination under the provisions of paragraph
(f)of this section. The provisions of this paragraph do not apply to the extent that requested information from the relevant system of records has been exempted from this Privacy Act requirement.
(c)An individual granted access to records pertaining to such individual contained in a system of records may review all such records. For that purpose the individual may be accompanied by a person of the individual's choosing, or the record may be released to the individual's representative who has written consent of the individual, as described in paragraph
(e)of this section. A first copy of any such record or information will ordinarily be provided without charge to the individual or representative in a form comprehensible to the individual. Fees for any other copies of requested records shall be assessed at the rate of 10 cents for each sheet of duplication.
(d)An individual may request amendment of a record pertaining to such individual in a system of records maintained by this Agency. A request for amendment of a record must be in writing and submitted during normal business hours to the person designated for that purpose and at the address set forth in the published notice for the system of records containing the record of which amendment is sought. Copies of such notices, and assistance in preparing a request for amendment, may be obtained from any Regional Office of the Board or at the Board offices at 1099 14th Street, NW., Washington, DC 20570. The requester must provide verification of identity as described in paragraph
(e)of this section, and the request should set forth the specific amendment requested and the reason for the requested amendment. The Agency shall acknowledge in writing receipt of the request within 10 days of receipt (excluding Saturdays, Sundays, and legal public holidays) and, wherever practicable, the acknowledgment shall advise the individual of the determination of the request. If the review of the request for amendment cannot be completed and a determination made within 10 days, the review shall be completed as soon as possible, normally within 30 days (Saturdays, Sundays, and legal public holidays excluded) of receipt of the request unless unusual circumstances preclude completing the review within that time, in which event the requester will be notified in writing within that 30-day period of the reasons for the delay and when the determination of the request may be expected. If the determination is to amend the record, the requester shall be so notified in writing and the record shall be amended in accordance with that determination. If any disclosures accountable under the provisions of 5 U.S.C. 552a(c) have been made, all previous recipients of the record which was amended shall be advised of the amendment and its substance. If it is determined that the request should not be granted, the requester shall be notified in writing of that determination and of the reasons therefor, and advised of the right to obtain review of the adverse determination under the provisions of paragraph
(f)of this section. The provisions of this paragraph do not apply to the extent that requested information from the relevant system of records has been exempted from this Privacy Act requirement.
(e)Verification of the identification of individuals required under paragraphs (a), (b), (c), and
(d)of this section to assure that records are disclosed to the proper person shall be required by the Agency to an extent consistent with the nature, location, and sensitivity of the records being disclosed. Disclosure of a record to an individual in person will normally be made upon the presentation of acceptable identification. Disclosure of records by mail may be made on the basis of the identifying information set forth in the request. Depending on the nature, location, and sensitivity of the requested record, a signed notarized statement verifying identity may be required by the Agency. Proof of authorization as representative to have access to a record of an individual shall be in writing, and a signed notarized statement of such authorization may be required by the Agency if the record requested is of a sensitive nature. (f)(1) Review may be obtained with respect to:
(i)A refusal, under paragraph
(a)or
(g)of this section, to inform an individual if a system of records contains a record concerning that individual,
(ii)A refusal, under paragraph
(b)or
(g)of this section, to grant access to a record or an accounting of disclosure from such a record, or
(iii)A refusal, under paragraph
(d)of this section, to amend a record.
(iv)The request for review should be made to the Chairman of the Board if the system of records is maintained in the office of a Member of the Board, the office of the Executive Secretary, the office of the Solicitor, the Division of Information, or the Division of Administrative Law Judges. Consonant with the provisions of section 3(d) of the National Labor Relations Act, and the delegation of authority from the Board to the General Counsel, the request should be made to the General Counsel if the system of records is maintained by an office of the Agency other than those enumerated above. Either the Chairman of the Board or the General Counsel may designate in writing another officer of the Agency to review the refusal of the request. Such review shall be completed within 30 days (excluding Saturdays, Sundays, and legal public holidays) from the receipt of the request for review unless the Chairman of the Board or the General Counsel, as the case may be, for good cause shown, shall extend such 30-day period.
(2)If, upon review of a refusal under paragraph
(a)or
(g)of this section, the reviewing officer determines that the individual should be informed of whether a system of records contains a record pertaining to that individual, such information shall be promptly provided. If the reviewing officer determines that the information was properly denied, the individual shall be so informed in writing with a brief statement of the reasons therefor.
(3)If, upon review of a refusal under paragraph
(b)or
(g)of this section, the reviewing officer determines that access to a record or to an accounting of disclosures should be granted, the requester shall be so notified and the record or accounting shall be promptly made available to the requester. If the reviewing officer determines that the request for access was properly denied, the individual shall be so informed in writing with a brief statement of the reasons therefor, and of the right to judicial review of that determination under the provisions of 5 U.S.C. 552a(g)(1)(B).
(4)If, upon review of a refusal under paragraph
(i)of this section, the reviewing official grants a request to amend, the requester shall be so notified, the record shall be amended in accordance with the determination, and, if any disclosures accountable under the provisions of 5 U.S.C. 552a(c) have been made, all previous recipients of the record which was amended shall be advised of the amendment and its substance. If the reviewing officer determines that the denial of a request for amendment should be sustained, the Agency shall advise the requester of the determination and the reasons therefor, and that the individual may file with the Agency a concise statement of the reason for disagreeing with the determination, and may seek judicial review of the Agency's denial of the request to amend the record. In the event a statement of disagreement is filed, that statement—
(i)Will be made available to anyone to whom the record is subsequently disclosed together with, at the discretion of the Agency, a brief statement summarizing the Agency's reasons for declining to amend the record, and
(ii)Will be supplied, together with any Agency statements, to any prior recipients of the disputed record to the extent that an accounting of disclosure was made.
(g)To the extent that portions of system of records described in notices of Governmentwide systems of records published by the Office of Personnel Management are identified by those notices as being subject to the management of an officer of this Agency, or an officer of this Agency is designated as the official to contact for information, access, or contents of those records, individual requests for access to those records, requests for their amendment, and review of denials of requests for amendment shall be in accordance with the provisions of 5 CFR part 297, subpart A, § 297.101, *et seq.* , as promulgated by the Office of Personnel Management. To the extent that portions of system of records described in notices of Governmentwide system of records published by the Department of Labor are identified by those notices as being subject to the management of an officer of this Agency, or an officer of this Agency is designated as the official to contact for information, access, or contents of those records, individual requests for access to those records, requests for their amendment, and review of denials of requests for amendment shall be in accordance with the provisions of this rule. Review of a refusal to inform an individual whether such a system of records contains a record pertaining to that individual and review of a refusal to grant an individual's request for access to a record in such a system may be obtained in accordance with the provisions of paragraph
(f)of this section.
(h)Pursuant to 5 U.S.C. 552a(j)(2), the system of records maintained by the Office of the Inspector General of the National Labor Relations Board that contains Investigative Files shall be exempted from the provisions of 5 U.S.C. 552a, except subsections (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and (i), from 29 CFR 102.117(c) and (d), and from 29 CFR 102.119(a), (b), (c), (d), (e), and (f), insofar as the system contains investigatory material compiled for criminal law enforcement purposes.
(i)Pursuant to 5 U.S.C. 552a(k)(2), the system of records maintained by the Office of the Inspector General of the National Labor Relations Board that contains the Investigative Files shall be exempted from 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and (f), from 29 CFR 102.117
(c)and (d), and from 29 CFR 102.119(a), (b), (c), (d), (e), and (f), insofar as the system contains investigatory material compiled for law enforcement purposes not within the scope of the exemption at 29 CFR 102.119(h).
(j)Privacy Act exemptions contained in paragraphs
(h)and
(i)of this section are justified for the following reasons:
(1)5 U.S.C. 552a(c)(3) requires an agency to make the accounting of each disclosure of records available to the individual named in the record at his/her request. These accountings must state the date, nature, and purpose of each disclosure of a record and the name and address of the recipient. Accounting for each disclosure would alert the subjects of an investigation to the existence of the investigation and the fact that they are subjects of the investigation. The release of such information to the subjects of an investigation would provide them with significant information concerning the nature of the investigation and could seriously impede or compromise the investigation, endanger the physical safety of confidential sources, witnesses, law enforcement personnel, and their families and lead to the improper influencing of witnesses, the destruction of evidence, or the fabrication of testimony.
(2)5 U.S.C. 552a(c)(4) requires an agency to inform any person or other agency about any correction or notation of dispute made by the agency in accordance with subsection
(d)of the Act. Since this system of records is being exempted from subsection
(d)of the Act, concerning access to records, this section is inapplicable to the extent that this system of records will be exempted from subsection
(d)of the Act.
(3)5 U.S.C. 552a(d) requires an agency to permit an individual to gain access to records pertaining to him/her, to request amendment to such records, to request a review of an agency decision not to amend such records, and to contest the information contained in such records. Granting access to records in this system of records could inform the subject of an investigation of an actual or potential criminal violation, of the existence of that investigation, of the nature and scope of the information and evidence obtained as to his/her activities, or of the identity of confidential sources, witnesses, and law enforcement personnel and could provide information to enable the subject to avoid detection or apprehension. Granting access to such information could seriously impede or compromise an investigation, endanger the physical safety of confidential sources, witnesses, law enforcement personnel, and their families, lead to the improper influencing of witnesses, the destruction of evidence, or the fabrication of testimony, and disclose investigative techniques and procedures. In addition, granting access to such information could disclose classified, security-sensitive, or confidential business information and could constitute an unwarranted invasion of the personal privacy of others.
(4)5 U.S.C. 552a(e)(1) requires each agency to maintain in its records only such information about an individual as is relevant and necessary to accomplish a purpose of the agency required by statute or by executive order of the President. The application of this provision could impair investigations and law enforcement because it is not always possible to detect the relevance or necessity of specific information in the early stages of an investigation. Relevance and necessity are often questions of judgment and timing, and it is only after the information is evaluated that the relevance and necessity of such information can be established. In addition, during the course of the investigation, the investigator may obtain information which is incidental to the main purpose of the investigative jurisdiction of another agency. Such information cannot readily be segregated. Furthermore, during the course of the investigation, the investigator may obtain information concerning the violation of laws other than those which are within the scope of his/her jurisdiction. In the interest of effective law enforcement, OIG investigators should retain this information, since it can aid in establishing patterns of criminal activity and can provide valuable leads for other law enforcement agencies.
(5)5 U.S.C. 552a(e)(2) requires an agency to collect information to the greatest extent practicable directly from the subject individual when the information may result in adverse determinations about an individual's rights, benefits, and privileges under Federal programs. The application of this provision could impair investigations and law enforcement by alerting the subject of an investigation, thereby enabling the subject to avoid detection or apprehension, to influence witnesses improperly, to destroy evidence, or to fabricate testimony. Moreover, in certain circumstances, the subject of an investigation cannot be required to provide information to investigators and information must be collected from other sources. Furthermore, it is often necessary to collect information from sources other than the subject of the investigation to verify the accuracy of the evidence collected.
(6)5 U.S.C. 552a(e)(3) requires an agency to inform each person whom it asks to supply information, on a form that can be retained by the person, of the authority under which the information is sought and whether disclosure is mandatory or voluntary; of the principal purposes for which the information is intended to be used; of the routine uses which may be made of the information; and of the effects on the person, if any, of not providing all or any part of the requested information. The application of this provision could provide the subject of an investigation with substantial information about the nature of that investigation that could interfere with the investigation. Moreover, providing such a notice to the subject of an investigation could seriously impede or compromise an undercover investigation by revealing its existence and could endanger the physical safety of confidential sources, witnesses, and investigators by revealing their identities.
(H)require an agency to publish a **Federal Register** notice concerning its procedures for notifying an individual, at his/her request, if the system of records contains a record pertaining to him/her, how to gain access to such a record and how to contest its content. Since this system of records is being exempted from subsection
(f)of the Act, concerning agency rules, and subsection
(d)of the Act, concerning access to records, these requirements are inapplicable to the extent that this system of records will be exempt from subsections
(f)and
(d)of the Act. Although the system would be exempt from these requirements, OIG has published information concerning its notification, access, and contest procedures because, under certain circumstances, OIG could decide it is appropriate for an individual to have access to all or a portion of his/her records in this system of records.
(8)5 U.S.C. 552a(e)(4)(I) requires an agency to publish a **Federal Register** notice concerning the categories of sources of records in the system of records. Exemption from this provision is necessary to protect the confidentiality of the sources of information, to protect the privacy and physical safety of confidential sources and witnesses, and to avoid the disclosure of investigative techniques and procedures. Although the system will be exempt from this requirement, OIG has published such a notice in broad generic terms.
(9)5 U.S.C. 552a(e)(5) requires an agency to maintain its records with such accuracy, relevance, timeliness, and completeness as is reasonably necessary to assure fairness to the individual in making any determination about the individual. Since the Act defines “maintain” to include the collection of information, complying with this provision could prevent the collection of any data not shown to be accurate, relevant, timely, and complete at the moment it is collected. In collecting information for criminal law enforcement purposes, it is not possible to determine in advance what information is accurate, relevant, timely, and complete. Facts are first gathered and then placed into a logical order to prove or disprove objectively the criminal behavior of an individual. Material which seems unrelated, irrelevant, or incomplete when collected can take on added meaning or significance as the investigation progresses. The restrictions of this provision could interfere with the preparation of a complete investigative report, thereby impeding effective law enforcement.
(10)5 U.S.C. 552a(e)(8) requires an agency to make reasonable efforts to serve notice on an individual when any record on such individual is made available to any person under compulsory legal process when such process becomes a matter of public record. Complying with this provision could prematurely reveal an ongoing criminal investigation to the subject of the investigation.
(11)5 U.S.C. 552a(f)(1) requires an agency to promulgate rules which shall establish procedures whereby an individual can be notified in response to his/her request if any system of records named by the individual contains a record pertaining to him/her. The application of this provision could impede or compromise an investigation or prosecution if the subject of an investigation were able to use such rules to learn of the existence of an investigation before it could be completed. In addition, mere notice of the fact of an investigation could inform the subject and others that their activities are under or may become the subject of an investigation and could enable the subjects to avoid detection or apprehension, to influence witnesses improperly, to destroy evidence, or to fabricate testimony. Since this system would be exempt from subsection
(d)of the Act, concerning access to records, the requirements of subsection (f)(2) through
(5)of the Act, concerning agency rules for obtaining access to such records, are inapplicable to the extent that this system of records will be exempted from subsection
(d)of the Act. Although this system would be exempt from the requirements of subsection
(f)of the Act, OIG has promulgated rules which establish agency procedures because, under certain circumstances, it could be appropriate for an individual to have access to all or a portion of his/her records in this system of records.
(12)5 U.S.C. 552a(g) provides for civil remedies if an agency fails to comply with the requirements concerning access to records under subsections (d)(1) and
(3)of the Act; maintenance of records under subsection (e)(5) of the Act; and any other provision of the Act, or any rule promulgated thereunder, in such a way as to have an adverse effect on an individual. Since this system of records would be exempt from subsections (c)(3) and (4), (d), (e)(1), (2), and
(3)and (4)(G) through (I), (e)(5), and (8), and
(f)of the Act, the provisions of subsection
(g)of the Act would be inapplicable to the extent that this system of records will be exempted from those subsections of the Act.
(k)Pursuant to 5 U.S.C. 552a(k)(2), the system of records maintained by the NLRB containing Agency Disciplinary Case Files (Nonemployees) shall be exempted from the provisions of 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), and (I), and
(f)insofar as the system contains investigatory material compiled for law enforcement purposes other than material within the scope of 5 U.S.C. 552a(j)(2).
(l)The Privacy Act exemption set forth in paragraph
(k)of this section is claimed on the ground that the requirements of subsections (c)(3), (d), (e)(1), (e)(4) (G), (H), and (I), and
(f)of the Privacy Act, if applied to Agency Disciplinary Case Files, would seriously impair the ability of the NLRB to conduct investigations of alleged or suspected violations of the NLRB's misconduct rules, as set forth in paragraphs (j)(1), (3), (4), (7), (8), and
(11)of this section.
(m)Pursuant to 5 U.S.C. 552a(k)(2), the following three proposed systems of records shall be exempted in their entirety from the provisions of 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f), because the systems contain investigatory material compiled for law enforcement purposes, other than material within the scope of 5 U.S.C. 552a(j)(2): Case Activity Tracking System
(CATS)and Associated Regional Office Files (NLRB-25), Regional Advice and Injunction Litigation System (RAILS) and Associated Headquarters Files (NLRB-28), and Appeals Case Tracking System
(ACTS)and Associated Headquarters Files (NLRB-30). Pursuant to 5 U.S.C. 552a(k)(2), limited categories of information from the following four proposed systems of records shall be exempted from the provisions of 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), and (f), insofar as the systems contain investigatory material compiled for law enforcement purposes, other than material within the scope of 5 U.S.C. 552a(j)(2):
(1)the Judicial Case Management Systems-Pending Case List (JCMS-PCL) and Associated Headquarters Files (NLRB-21)—information relating to requests to file injunctions under 29 U.S.C. 160(j), requests to initiate federal court contempt proceedings, certain requests that the Board initiate litigation or intervene in non-Agency litigation, and any other investigatory material compiled for law enforcement purposes;
(2)the Solicitor's System
(SOL)and Associated Headquarters Files (NLRB-23)—information relating to requests to file injunctions under 29 U.S.C. 160(j), requests to initiate federal court contempt proceedings, certain requests that the Board initiate litigation or intervene in non-Agency litigation, and any other investigatory material compiled for law enforcement purposes;
(3)the Special Litigation Case Tracking System (SPLIT) and Associated Headquarters Files (NLRB-27)—information relating to investigative subpoena enforcement cases, injunction and mandamus actions regarding Agency cases under investigation, bankruptcy case information in matters under investigation, Freedom of Information Act cases involving investigatory records, certain requests that the Board initiate litigation or intervene in non-Agency litigation, and any other investigatory material compiled for law enforcement purposes; and
(4)The Freedom of Information Act Tracking System
(FTS)and Associated Agency Files (NLRB-32)—information requested under the Freedom of Information Act, 5 U.S.C. 552, that relates to the Agency's investigation of unfair labor practice and representation cases or other proceedings described in paragraphs (m)(1) through
(3)of this section.
(n)The reasons for exemption under 5 U.S.C. 552a(k)(2) are as follows:
(1)5 U.S.C. 552a(c)(3) requires an agency to make the accounting of each disclosure of records available to the individual named in the record at such individual's request. These accountings must state the date, nature, and purpose of each disclosure of a record, and the name and address of the recipient. Providing such an accounting of investigatory information to a party in an unfair labor practice or representation matter under investigation could inform that individual of the precise scope of an Agency investigation, or the existence or scope of another law enforcement investigation. Accordingly, this Privacy Act requirement could seriously impede or compromise either the Agency's investigation, or another law enforcement investigation, by causing the improper influencing of witnesses, retaliation against witnesses, destruction of evidence, or fabrication of testimony.
(2)5 U.S.C. 552a(d) requires an agency to permit an individual to gain access to records pertaining to such individual, to request amendment to such records, to request review of an agency decision not to amend such records, and, where the Agency refuses to amend records, to submit a statement of disagreement to be included with the records. Such disclosure of investigatory information could seriously impede or compromise the Agency's investigation by revealing the identity of confidential sources or confidential business information, or causing the improper influencing of witnesses, retaliation against witnesses, destruction of evidence, fabrication of testimony, or unwarranted invasion of the privacy of others. Amendment of the records could interfere with ongoing law enforcement proceedings and impose an undue administrative burden by requiring investigations to be continuously reinvestigated.
(3)5 U.S.C. 552a(e)(1) requires an agency to maintain in its records only such information about an individual as is relevant and necessary to accomplish a purpose of the agency required by statute or by executive order of the President. This requirement could foreclose investigators from acquiring or receiving information the relevance and necessity of which is not readily apparent and could only be ascertained after a complete review and evaluation of all the evidence.
(4)5 U.S.C. 552a(e)(4)(G) and
(H)require an agency to publish a **Federal Register** notice concerning its procedures for notifying an individual, at the individual's request, if the system of records contains a record pertaining to the individual, for gaining access to such a record, and for contesting its content. Because certain information from these systems of records is exempt from subsection
(d)of the Act concerning access to records, and consequently, from subsection
(f)of the Act concerning Agency rules governing access, these requirements are inapplicable to that information.
(5)5 U.S.C. 552a(e)(4)(I) requires an agency to publish a **Federal Register** notice concerning the categories of sources of records in the system of records. Exemption from this provision is necessary to protect the confidentiality of sources of information, to protect against the disclosure of investigative techniques and procedures, to avoid threats or reprisals against informers by subjects of investigations, and to protect against informers refusing to give full information to investigators for fear of having their identities as sources revealed.
(6)5 U.S.C. 552a(f) requires an agency to promulgate rules for notifying individuals of Privacy Act rights granted by subsection
(d)of the Act concerning access and amendment of records. Because certain information from these systems is exempt from subsection
(d)of the Act, the requirements of subsection
(f)of the Act are inapplicable to that information. Dated: Washington, DC, July 10, 2007. By Direction of the Board. Lester A. Heltzer, Executive Secretary. [FR Doc. E7-13684 Filed 7-13-07; 8:45 am] BILLING CODE 7545-01-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 100 [Docket No. CGD05-07-032] RIN 1625-AA08 Special Local Regulations for Marine Events; Pamlico River, Washington, NC AGENCY: Coast Guard, DHS. ACTION: Temporary final rule. SUMMARY: The Coast Guard is establishing temporary special local regulations for the “SBIP—Fountain Powerboats Kilo Run and Super Boat Grand Prix”, a marine event to be held August 3 and August 5, 2007, on the waters of the Pamlico River, near Washington, North Carolina. These special local regulations are necessary to provide for the safety of life on navigable waters during the event. This action is intended to restrict vessel traffic in portions of the Pamlico River during the event. DATES: This rule is effective from 6:30 a.m. on August 3, 2007 to 4:30 p.m. on August 5, 2007. ADDRESSES: Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket [CGD05-07-032] and are available for inspection or copying at Commander, (dpi), Fifth Coast Guard District, Room 415, 431 Crawford Street, Portsmouth, Virginia 23704-5004; between 9 a.m. and 2 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Dennis Sens, Project Manager, Inspections and Investigations Branch, at
(757)398-6204. SUPPLEMENTARY INFORMATION: Regulatory Information On May 4, 2007, we published a notice of proposed rulemaking
(NPRM)entitled Special Local Regulations for Marine Events; Pamlico River, Washington, NC in the **Federal Register** (72 FR 25214). We received no letters commenting on the proposed rule. No public meeting was requested, and none was held. Background and Purpose On August 3 and August 5, 2007, Super Boat International Productions will sponsor the “SBIP—Fountain Powerboats Kilo Run and Super Boat Grand Prix”, on the Pamlico River, near Washington, North Carolina. The event will consist of approximately 40 high-speed powerboats racing in heats along a 5-mile oval course on August 3 and 5, 2007. Preliminary speed trials along a straight one-kilometer course will be conducted on August 3, 2007. Approximately 20 boats will participate in the speed trials. Approximately 100 spectator vessels will gather nearby to view the speed trials and the race. If either the speed trials or races are postponed due to weather, they will be held the next day. During the speed trials and the races, vessel traffic will be temporarily restricted to provide for the safety of participants, spectators and transiting vessels. Discussion of Comments and Changes The Coast Guard did not receive comments in response to the notice of proposed rulemaking
(NPRM)published in the **Federal Register** . Accordingly, the Coast Guard is establishing temporary special local regulations on specified waters of the Pamlico River, Washington, North Carolina. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. Although this regulation prevents traffic from transiting a portion of the Pamlico River, near Washington, North Carolina during the event, the effect of this regulation will not be significant due to the limited duration that the regulated area will be in effect and the extensive advance notifications that will be made to the maritime community via marine information broadcasts, local commercial radio stations, and area newspapers so mariners can adjust their plans accordingly. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit this section of the Pamlico River, Washington, North Carolina during the event. This rule will not have a significant economic impact on a substantial number of small entities for the following reasons. This rule will be in effect for only a short period, from 6:30 a.m. to 12:30 p.m. on August 3, 2007, and from 10:30 a.m. to 4:30 p.m. on August 5, 2007. Affected waterway users may pass safely around the regulated area with approval from the patrol commander. Before the enforcement period, we will issue maritime advisories so mariners can adjust their plans accordingly. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard. Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969
(NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(h), of the Instruction, from further environmental documentation. Under figure 2-1, paragraph (34)(h), of the Instruction, an “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are not required for this rule. List of Subjects in 33 CFR Part 100 Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows: PART 100—SAFETY OF LIFE ON NAVIGABLE WATERS 1. The authority citation for part 100 continues to read as follows: Authority: 33 U.S.C. 1233. 2. Add a temporary section, § 100.35-T05-032 to read as follows: § 100.35-T05-032 Pamlico River, Washington, NC.
(a)*Regulated area* . The regulated area is established for the waters of the Pamlico River including Chocowinity Bay, from shoreline to shoreline, bounded on the south by a line running northeasterly from Camp Hardee at latitude 35°28′23″ North, longitude 076°59′23″ West, to Broad Creek Point at latitude 35°29′04″ North, longitude 076°58′44″ West, and bounded on the north by the Norfolk Southern Railroad Bridge. All coordinates reference Datum NAD 1983.
(b)*Definitions:*
(1)*Coast Guard Patrol Commander* means a commissioned, warrant, or petty officer of the Coast Guard who has been designated by the Commander, Coast Guard Sector North Carolina to act on their behalf.
(2)*Official Patrol* means any vessel assigned or approved by Commander, Coast Guard Sector North Carolina with a commissioned, warrant, or petty officer on board and displaying a Coast Guard ensign.
(3)*Participant* includes all vessels participating in the “Fountain Super Boat Grand Prix” under the auspices of the Marine Event Permit issued to the event sponsor and approved by Commander, Coast Guard Sector North Carolina.
(c)*Special local regulations:*
(1)Except for participating vessels and persons or vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the regulated area.
(2)The operator of any vessel in the regulated area shall:
(i)Stop the vessel immediately when directed to do so by any Official Patrol and then proceed only as directed.
(ii)All persons and vessels shall comply with the instructions of the Official Patrol.
(iii)When authorized to transit the regulated area, all vessels shall proceed at the minimum speed necessary to maintain a safe course that minimizes wake near the race course.
(d)*Enforcement period* . This section will be enforced from 6:30 a.m. to 12:30 p.m. on August 3, 2007, and from 10:30 a.m. to 4:30 p.m. on August 5, 2007. If either the speed trials or the races are postponed due to weather, then the temporary special local regulations will be enforced during the same time period the next day. Dated: July 2, 2007. F.M. Rosa, Jr., Rear Admiral, U.S. Coast Guard, Commander, Fifth Coast Guard District. [FR Doc. E7-13715 Filed 7-13-07; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [CGD09-07-050] RIN 1625-AA00 Safety Zone; Charlevoix Venetian Night Fireworks, Lake Michigan, Charlevoix, MI AGENCY: Coast Guard, DHS. ACTION: Temporary final rule. SUMMARY: The Coast Guard is establishing a temporary safety zone on Lake Michigan near Charlevoix, MI. This zone is intended to restrict vessels from a portion of Lake Michigan during the Charlevoix Venetian Night Fireworks display. This temporary safety zone is necessary to protect spectators and vessels from the hazards associated with fireworks displays. DATES: This rule is effective from 9 p.m. through 11 p.m. on July 27, 2007. ADDRESSES: Documents indicated in this preamble as being available in the docket, are part of docket CGD09-07-050 and are available for inspection or copying at U.S. Coast Guard Sector Lake Michigan, 2420 South Lincoln Memorial Drive, Milwaukee, Wisconsin, 53207 between 8:30 a.m. and 3 p.m. Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Chief Warrant Officer Brad Hinken, U.S. Coast Guard Sector Lake Michigan, Prevention Department, 2420 South Lincoln Memorial Drive, Milwaukee, Wisconsin, 53207,
(414)747-7154. SUPPLEMENTARY INFORMATION: Regulatory Information We did not publish a notice of proposed rulemaking
(NPRM)for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The location of the fireworks display was changed after the initial permit application was received. We did not receive the new location of the fireworks display in time to publish an NPRM followed by a final rule before the effective date. Under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the **Federal Register** . Delaying this rule would be contrary to the public interest of ensuring the safety of spectators and vessels during this event and immediate action is necessary to prevent possible loss of life or property. Background and Purpose On June 12, 2007, the Coast Guard established a permanent safety zone for annual events in the Captain of the Port Lake Michigan zone, including a safety for the Charlevoix Venetian Night Fireworks. 72 FR 32181, 32187. Due to an unexpected change in the location of the event, the permanent safety zone in 72 FR 32181 will not be enforced this year. This temporary safety zone with the new location replaces the permanent safety zone for this year's event. A temporary safety zone is necessary to ensure the safety of vessels and spectators from hazards associated with a fireworks display. Based on accidents that have occurred in other Captain of the Port zones, and the explosive hazards of fireworks, the Captain of the Port Lake Michigan has determined that fireworks launches proximate to watercraft pose significant risk to public safety and property. The likely combination of large numbers of recreation vessels, congested waterways, darkness punctuated by bright flashes of light, alcohol use, and debris falling into the water could easily result in serious injuries or fatalities. Establishing a safety zone to control vessel movement around the location of the launch platform will help ensure the safety of persons and property at these events and help minimize the associated risks. Discussion of Rule A temporary safety zone is necessary to ensure the safety of spectators and vessels during the setup, loading and launching of a fireworks display in conjunction with the Charlevoix Venetian Night fireworks display. The fireworks display will occur between 9 p.m. and 11 p.m. on July 27, 2007. The safety zone for the fireworks will encompass all waters of Lake Michigan within a 1200-foot radius from the fireworks launch site located on a barge in position 45°19′11″ N, 085°16′18″ W. (DATUM: NAD 83). The size of this zone was determined using the National Fire Prevention Association guidelines and local knowledge of wind and currents. All persons and vessels shall comply with the instructions of the Coast Guard Captain of the Port or his designated on-scene representative. Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan or his designated on-scene representative. The Captain of the Port or his on-scene representative may be contacted via VHF Channel 16. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. This determination is based on the minimal time that vessels will be restricted from the zone and the zone is an area where the Coast Guard expects insignificant adverse impact to mariners from the zones' activation. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners and operators of vessels intending to transit or anchor in a portion of Lake Michigan near Charlevoix Michigan from 9 p.m. to 11 p.m. on July 27, 2007. This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: This rule will be in effect for only two hours for one event. Vessel traffic can safely pass outside the safety zone during the event. In the event that this temporary safety zone affects shipping, commercial vessels may request permission from the Captain of the Port Lake Michigan to transit through the safety zone. The Coast Guard will give notice to the public via a Broadcast to Mariners that the regulation is in effect. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy of the Coast Guard. Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule would not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments The Coast Guard recognizes the treaty rights of Native American Tribes. Moreover, the Coast Guard is committed to working with Tribal Governments to implement local policies and to mitigate tribal concerns. We have determined that this safety zone and fishing rights protection need not be incompatible. We have also determined that this Rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Nevertheless, Indian Tribes that have questions concerning the provisions of this Rule or options for compliance are encourage to contact the point of contact listed under FOR FURTHER INFORMATION CONTACT . Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedure; and related management system practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. This event establishes a safety zone therefore paragraph (34)(g) of the Instruction applies. A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES . List of Subjects in 33 CFR Part 165 Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1. 2. A new temporary § 165.T09-050 is added as follows: § 165.T09-050 Safety zone; Charlevoix Venetian Night Fireworks, Lake Michigan, Charlevoix, MI.
(a)*Location.* The following area is a temporary safety zone: All waters of Lake Michigan within a 1200-foot radius from the fireworks launch site located on a barge in position 45°19′11″ N, 085°16′18″ W (NAD 83).
(b)*Enforcement period.* This regulation will be enforced from 9 p.m. through 11 p.m. on July 27, 2007.
(c)*Regulations.*
(1)In accordance with the general regulations in § 165.23 of this part, entry into, transiting, or anchoring within this safety zone is prohibited unless authorized by the Captain of the Port Lake Michigan, or his on-scene representative.
(2)This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Lake Michigan or his on-scene representative.
(3)The “on-scene representative” of the Captain of the Port is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port to act on his behalf. The on-scene representative of the Captain of the Port will be aboard either a Coast Guard or Coast Guard Auxiliary vessel.
(4)Vessel operators desiring to enter or operate within the safety zone shall contact the Captain of the Port Lake Michigan or his on-scene representative to obtain permission to do so. The Captain of the Port or his on-scene representative may be contacted via VHF Channel 16.
(5)Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Lake Michigan or his on-scene representative. Dated: June 28, 2007. Bruce C. Jones, Captain, U.S. Coast Guard, Captain of the Port Lake Michigan. [FR Doc. E7-13732 Filed 7-13-07; 8:45 am] BILLING CODE 4910-15-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 51 and 52 [EPA-HQ-OAR-2006-0903; FRL-8439-6] RIN 2060-AA02 Public Hearings and Submission of Plans AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This action finalizes changes to EPA's regulations specifying the public hearing requirements for State Implementation Plan
(SIP)submissions, identifying the method for submission of SIPs and preliminary review of plans; and the criteria for determining the completeness of plan submission requirements to reflect the changes to the public hearing and plan submission requirements. It also updates the addresses to several Regional offices. DATES: This rule is effective August 15, 2007. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2006-0903. All documents in the docket are listed on the *http://www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *http://www.regulations.gov* or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m. excluding Federal holidays. FOR FURTHER INFORMATION CONTACT: For general questions concerning this rule, please contact Sean Lakeman, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is
(404)562-9043. Mr. Lakeman can also be reached via electronic mail at *lakeman.sean@epa.gov* . SUPPLEMENTARY INFORMATION: The information presented in this preamble is organized as follows: I. Background II. Comments and Responses III. Final Action IV. Statutory and Executive Order Reviews I. Background On March 13, 2007, (72 FR 11307) EPA published a proposed rule to change the requirements of 40 CFR 51.102, 51.103 and Appendix V to Part 51. Also, administrative changes to 40 CFR 52.02 and 52.16 to update the addresses for several of the EPA Regional offices were published. The Clean Air Act
(CAA)provides that each revision to a SIP submitted by a State must be adopted by such State “after reasonable notice and public hearing.” EPA's regulations on public hearings in 40 CFR 51.102(a) states “Except as otherwise provided in paragraph
(c)of this section, States must conduct one or more public hearings on the following prior to adoption and submission to EPA.” The completeness criteria indicate that a complete submission must include “Evidence that public notice was given of the proposed change consistent with procedures approved by EPA, including the date of publication of such notice” and “Certification that public hearings(s) were held in accordance with the information provided in the public notice and the State's laws and constitution, if applicable.” 40 CFR part 51 Appendix V (2.1)(f) and (g). Following these public hearing requirements, states hold public hearings on any revision to a SIP. Many of these plan revisions are minor or noncontroversial in nature and no member of the public or the regulated community attends or participates in the hearing. These hearings consume both valuable time and resources. Rather than requiring a public hearing for all SIP revisions, EPA proposed to revise these regulations to allow states to determine those actions for which there may be little or no interest by the public or the regulated community and, for those actions, to provide the public the opportunity to request a public hearing. If no request for public hearing is made, then the State would have fulfilled the requirements of 40 CFR 51.102(a) and no public hearing is required to be held. Whether or not a public hearing is held, the State is required to provide a 30-day period for the written submission of comments from the public. Forty CFR 51.103(a) and
(b)require states to submit “five copies of the plan to the appropriate Regional Office.” The completeness criteria in 40 CFR part 51 Appendix V(2.1)(d) provide that a complete submission must include “indication of the changes made to the existing approved plan, where applicable.” Since the time these regulations were promulgated, electronic access to documents has become readily available and there is no longer the same need for the State to provide multiple printed copies of the submitted plan. EPA proposed to revise these regulations to allow the Regions and the states flexibility to determine the number of printed and electronic copies of the plan submission necessary to ensure full public access to the submitted plan (including identification of the changes made) and to allow the agency to review the plan for approvability. EPA also proposed to revise 40 CFR 52.02 and 52.16, to reflect the current addresses for the Region 3, Region 4, Region 7 and Region 8 offices. II. Comments and Responses EPA received comments on the proposed action. The majority of commenters were in support of the proposed action and suggested minor changes to the proposed action. Following is a summary of the comments received and EPA's response to those comments. *Comment:* One commenter is concerned that the proposed requirement for states to pre-schedule a public hearing and then cancel it if no one requests the hearing would “(1) create confusion for the public,
(2)require the additional expense of more legal notices to notify the public that a hearing has been cancelled, and
(3)confuse and disrupt the schedule of court reporters set to cover the hearings.” The commenter suggests that “States only schedule a public hearing on a ‘ *nonsubstantive or noncontroversial* ” topic if requested.” The commenter understands that “adoption of a minor amendment or submittal of a minor SIP revision may be delayed by a few weeks if a hearing is not ‘prescheduled” and publicized at the same time as a 30-day comment period.” The commenter also requests that EPA
(1)review and consider the Federal Highway Administration's
(FHWA)approach to “administrative modifications” as published in the **Federal Register** on February 14, 2007 (72 FR 7224); and
(2)define minor SIP revisions that would be considered “ *nonsubstantive or noncontroversial* ” and would require a 30 day comment period but no public hearing. *Response:* This rule revision is designed to provide states some flexibility in the public hearing process. It is EPA's intent to help states reduce the cost of holding public hearings that are not attended by the public, not lengthen the comment period by another 30 days. While one approach is to announce the public hearing when the proposed SIP revision is made available for comment and then to cancel the hearing if not requested, another approach the State may take is the one suggested by the commenter—i.e., the State may allowing the public the opportunity to request a public hearing in the initial notice and then (if a hearing is requested) publish a new 30 day notification (using the same media as the initial 30 day notification) announcing that a public hearing will be held and providing when and where it will be held. We are modifying the regulatory text to allow for this approach. EPA agrees with the commenter that the cancellation of a public hearing without providing some means for the public to determine if the hearing is cancelled may “create confusion for the public.” To avoid confusion, the State should clearly indicate in the notice how it will inform the public of whether the hearing will be held. One option is to announce the cancellation of a hearing in the same medium as the notice was originally published. Another option would be to include a web address (Uniform Resource Locator) where a cancellation notice will be posted and a phone number the public may call to determine if the public hearing has been cancelled. We are revising the regulatory text to make clear that the State must notify the public that the hearing has been cancelled. EPA has not used the phrase “ *nonsubstantive or noncontroversial* ” in its regulation. Rather, we have simply used that term to describe the types of SIP revisions that states have identified as frequently not attracting attendance at a public hearing. We see no need to define that term since it has no regulatory meaning. *Comment:* One commenter requests clarification on whether the language in 40 CFR 51.102(a) that states “If no request for a public hearing is received during the 30-day notification period and the original notice announcing the 30-day notification period clearly states that *if no request for a public hearing is received the hearing will be cancelled,* then the public hearing may be cancelled.” is mandatory language for public hearing notices or permissive language. *Response:* The intent of this language is to allow states the flexibility in the public hearing process. The State may choose whether it wishes to hold a public hearing or whether it wishes to hold a public hearing only if so requested. If it chooses to hold a public hearing only if requested, then the State should use the language in italics above (or substantially similar language) to convey that the hearing will be cancelled if no one requests a hearing. *Comment:* One commenter is concerned that “while many of the documents can be provided electronically, there may be occasions where an exhibit or other document may not lend itself to an electronic format.” The commenter requests that a provision be added to the rule that will allow a State to submit five hard copies of any portion of the submittal that cannot be submitted electronically and, for the remainder of the submittal, submit two hard copies and an electronic copy. *Response:* We believe that the rule already provides this flexibility. The rule as written allows for the State to submit either “five hard copies or at least two hard copies with an electronic version of the hard copy.” The rule also allows the State in conjunction with the Regional Office (in the statement “unless otherwise agreed to by the State and Regional Office”) to resolve unique situations as they arise. *Comment:* One commenter recommends the rule include a requirement for notifying the public when a public hearing will be cancelled and how the public will be notified of the cancellation. *Response:* EPA agrees with commenter and has revised the rule to address this concern. *Comment:* Several commenters are not sure how the revised 40 CFR 51.102(a) is supposed to work and state “Under both the existing and proposed rule, the comment period consists of 30-days, with the hearing held on the 30th day. As proposed, whether or not the State would actually hold a hearing would not be known by the State until the actual day of the hearing, day 30. How will the public know whether or not a hearing is being held? How would the State notify the public? The public would have no advance notice in which to plan to attend or not and the State would have no time in which to inform the public, whether through the current requirement for a newspaper advertisement, or through other electronic means.” Commenters recommend revising section
(a)to read “Except as otherwise provided in paragraphs
(c)and
(d)of this section and within the 30-day notification period as required by paragraph
(e)of this section, States must provide notice, provide the opportunity to submit written comments and allow the public the opportunity to request a public hearing.” A new section
(d)was suggested to read “No hearing will be required for any plan change if the change is identified by the State to consist of minor or administrative revisions that are likely to be of little public interest. As required in paragraph
(a)of the proposal, the State must provide the public the opportunity to request a public hearing in the notice announcing the 30-day notification period. If the State provides the public the opportunity to request a public hearing and a request is received, the State must provide a new 30-day notification period of the hearing in accordance with paragraph
(e)and conduct the hearing at the end of the notification period. If no request for a public hearing is received during the initial 30-day notification period and the original notice announcing the 30-day notification period clearly states that if no request for a public hearing is received there will be no hearing, then no public hearing will be conducted.” *Response:* This rule revision is designed to provide states flexibility in the public hearing process. Under this rule states have several options they can employ in the public hearing process. Here are a few examples: 1. Choose to hold a public hearing and provide the public with the meeting logistics (when and where) in the 30-day notification. States may choose to use this option because they believe the revision(s) will draw public interest and therefore plan to hold a public hearing. 2. Provide the public the opportunity to request a hearing. States may choose to use this option for revisions they believe will not elicit public interest. For example, in the initial notice, the State would include a scheduled public hearing 35 days from the date of the notice and inform the public that if a hearing is not requested by the end of the 30th day, the public hearing will be cancelled. If a hearing is not requested the State would post on the 31st day a cancellation notice in the manner announced at the time of the initial notice (e.g., in a newspaper, the State Register, or on a Web site notifying the public that the hearing was cancelled). 3. Publish a 30-day notice to inform the public of revisions to the SIP and requiring that any request for a public hearing must be submitted within 30-days. If a public hearing is requested, the State would publish a new notice providing 30-days notice of the time and place of the public hearing. We are not adopting the specific language suggested by the commenter. We believe the regulatory language would allow the State to elect to use any of the options noted above. EPA is not creating an exception to the public hearing requirement for *“minor or administrative revisions”* in this rule. Such a line-drawing exercise is difficult, as some things that may appear minor or administrative to one person may have more significant implications than initially believed or may not be minor or insignificant to another person. Providing the opportunity for a public hearing for all changes will allow the public (rather than the State) to decide which revisions are minor and administrative and on which members of the public do not need a public hearing and which revisions members of the public believe may have more significance and for which they need a public forum with the State Agency. *Comment:* Several commenters objected to the revised language in 40 CFR 51.103(b) regarding requests for preliminary review of plans by EPA. The commenter states: “Currently, we make requests for preliminary review by email with a link to the State Web site where the notice and proposal are located. Requiring additional paper copies goes directly against the intent of this regulatory action. While we understand the need to maintain more formal documentation for the official submittal in paragraph (a), the same requirements for paragraph
(b)do not make sense for an optional, voluntary action.” and recommends revising the language to include “or an entirely electronic submittal.” *Response:* As an initial matter, the current rule requires that requests be accompanied by five hard copies . Thus, the commenter incorrectly indicates that the EPA's proposed rule is adding constraints. To the contrary, the regulatory language would provide flexibility by allowing requests to “be accompanied by five hard copies or at least two hard copies with an electronic version of the hard copy” and providing latitude with the clause “unless otherwise agreed to by the State and Regional Office.” This provision would allow the State and the Regional Office to agree to an entirely electronic submittal, where appropriate, but retains the requirement for hard copy submissions where no such agreement is reached. *Comment:* Several commenters requested that Section 2.1(d) of Appendix V of Part 51—Criteria for Determining the Completeness of Plan Submissions, be revised because “Computer terminology comes and goes, not all systems are entirely compatible, and whatever is specified in the CFR now will likely need to be revisited.” Commenters recommended the language to read “If the State submits an electronic copy, it must be an exact duplicate of the hard copy, including signed documents, with changes indicated. The specific electronic formats to be used are to be agreed upon by the State and the Regional Office. Files need to be submitted in manageable amounts (e.g., a file for each section or chapter, depending on size, and separate files for each distinct document) as agreed to by the State and Regional Office.” *Response:* EPA agrees with the commenters that computer technology will continue to change, however, revising the language is not needed. EPA believes it has provided enough latitude with the clause “unless otherwise agreed to by the State and Regional Office” to address future changes in media. *Comment:* Several commenters also encourage EPA to provide the same flexibility for 111(d)/129 plans. *Response:* The regulatory provisions addressed in the proposed rule concern SIP submissions and thus are not the appropriate place to address 111(d)/129 plans. EPA will take the commenter's request under advisement and may consider similar treatment for 111(d)/129 plans may be considered at a later time. *Comment:* The commenter requests “that the requirements for reasonable public notice, as defined in 40 CFR 51.102(d), be strengthened to ensure that the public, and in particular the `regulated community,' are made aware of the proposed plan or plan revision and associated opportunity to submit comments and/or request a public hearing.” The commenter believes “that when a proposed plan or plan revision involves a control measure that the `regulated community' is responsible for implementing, states should be required to explicitly communicate with the affected regulated community to ensure that they are aware of the proposed plan or plan revision and the associated opportunity to submit comments and/or request a public hearing.” Also, the commenter states that “the `prominent advertisement' requirement has typically been met by placing a notice of the public hearing in the State register. Such notices may satisfy the State's requirements for public notice, but in our view they fall far short of reasonable public notice if the proposed plan or plan revision involves a control measure that a regulated community is responsible for implementing.” The commenter wants the following statement added to 40 CFR 51.102(d) “Notification directly to any regulated community responsible for implementing a control measure included in the proposed plan or plan revision.” *Response:* While we agree that ensuring that the regulated community is aware of planning obligations that may affect them, the recommendation is not practicable. Moreover, our experience is that the states attempt to diligently work with the regulated community (and all stakeholders) when developing SIPs. As and initial matter, the recommendation is not practical because it is unclear. Would it impose a burden on the State to contact and provide direct notification to any source that may potentially be affected by regulation? If so, we think the burden would be impossible for the State to meet in many circumstances. Some source categories could include 100's or 1000's of sources and the State would not be able to identify all such sources. Additionally, there may be issues of whom the State is required to notify. For example, if a State made changes to its inspection and maintenance program, would it be obligated to provide direct notification to every owner of a car registered on the State? Also, there may be countless service stations that perform these tests. Would the State be required to maintain a list of every such station? As noted, we believe States generally work with the regulated community in developing programs that may affect them. Typically, such work is a necessary component of developing control strategies since States must understand how sources operate, including the types of equipment they use, and what are the types and amount of emissions. We continue to encourage States to improve outreach efforts in developing SIPs and we believe the use of the internet has provided greater public access to information. *Comment:* One commenter requests that EPA change the requirement for two hard copies to one hard copy. *Response:* We believe a change is unnecessary because the rule provides flexibility for the State and Regional Office to agree on one hard copy and an electronic copy, if they determine that is appropriate. III. Final Action EPA is finalizing the revisions as stated in the proposed rule and has added a provision to capture the cancellation of public hearings, in order to reduce the possibility of confusion regarding whether a public hearing will be held. The provision will require States to include in the initial notice announcing the 30 day notification period, the method they will use to notify the public of whether the hearing will be held and to include a phone number where the public can call to determine if the public hearing has been cancelled. IV. 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
(EO)12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO. B. Paperwork Reduction Act This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 *et seq.* This action modifies the public hearing requirements for SIPs by clarifying that public hearings need only be held when requested by the public rather than automatically and provides a less costly alternative to the pre-existing requirement to submit five printed copies of each SIP revision. The present action does not establish any new information collection burden. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act
(RFA)generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedures Act or any other statute unless the agency certifies the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of today's action on small entities, small entity is defined as:
(1)A small business that is a small industrial entity as defined in the U.S. Small Business Administration
(SBA)size standards. (See 13 CFR 121.);
(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. This action modifies the public hearing requirements that apply to states for purposes of submitting SIPs. It clarifies that public hearings need only be held when requested by the public rather than automatically and provides a less costly alternative to the pre-existing requirement to submit five printed copies of each SIP revision. After considering the economic impacts of today's action on small entities, I certify that this rule will not have a significant economic impact on a substantial number of small entities. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation to 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. Today's action does not include a Federal mandate within the meaning of UMRA that may result in expenditures of $100 million or more in any one year by either State, local, or Tribal governments in the aggregate or to the private sector, and therefore, is not subject to the requirements of sections 202 and 205 of the UMRA. Also, EPA has determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments and therefore, is not subject to the requirements of sections 203. This action modifies the public hearing requirements for SIPs by clarifying that public hearings need only be held when requested by the public rather than automatically and provides a less costly alternative to the pre-existing requirement to submit five printed copies of each SIP revision. E. Executive Order 13132: Federalism Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action modifies the public hearing requirements for SIPs by clarifying that public hearings need only be held when requested by the public rather than automatically and provides a less costly alternative to the pre-existing requirement to submit five printed copies of each SIP revision. Thus, Executive Order 13132 does not apply to this rule. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This action does not have “Tribal implications” as specified in Executive Order 13175. This action modifies the public hearing requirements for SIPs by clarifying that public hearings need only be held when requested by the public rather than automatically and provides a less costly alternative to the pre-existing requirement to submit five printed copies of each SIP revision. The Clean Air Act and the Tribal Authority Rule establish the relationship of the Federal government and Tribes in developing plans to attain the NAAQS, and this rule does nothing to modify that relationship. Thus, Executive Order 13175 does not apply to this rule. G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks Executive Order 13045: “Protection of Children From Environmental Health and Safety Risks” (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 disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. This action is not subject to Executive Order 13045 because it is not economically significant as defined in E.O. 12866, and because the Agency does not have reason to believe the environmental health risks or safety risks addressed by this rule present a disproportionate risk to children. This action modifies the public hearing requirements for SIPs by clarifying that public hearings need only be held when requested by the public rather than automatically and provides a less costly alternative to the pre-existing requirement to submit five printed copies of each SIP revision. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use This action is not subject to Executive Order 13211, “Actions 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 As noted in the proposed rule, Section 12(d) of the National Technology Transfer Advancement Act of 1995 (NTTAA), Pub. L. No. 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. Voluntary consensus standards 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 decides not to use available and applicable VCS. This action 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 this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This action modifies the public hearing requirements for SIPs by clarifying that public hearings need only be held when requested by the public rather than automatically and provides a less costly alternative to the pre-existing requirement to submit five printed copies of each SIP revision. 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 the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This action will be effective August 15, 2007. L. Petitions for Judicial Review Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the District of Columbia Circuit by September 14, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review must be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See CAA Section 307(b)(2). List of Subjects in 40 CFR Parts 51 and 52 Environmental protection, Administrative practice and procedure, Air pollution control, Carbon monoxide, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Transportation, Volatile organic compounds. Dated: July 10, 2007. Stephen L. Johnson, Administrator. Accordingly, 40 CFR parts 51 and 52 are amended as follows: PART 51—[AMENDED] 1. The authority citation for part 51 continues to read as follows: Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q. 2. Section 51.102 is amended by revising paragraphs
(a)introductory text and
(f)to read as follows: § 51.102 Public hearings.
(a)Except as otherwise provided in paragraph
(c)of this section and within the 30 day notification period as required by paragraph
(d)of this section, States must provide notice, provide the opportunity to submit written comments and allow the public the opportunity to request a public hearing. The State must hold a public hearing or provide the public the opportunity to request a public hearing. The notice announcing the 30 day notification period must include the date, place and time of the public hearing. If the State provides the public the opportunity to request a public hearing and a request is received the State must hold the scheduled hearing or schedule a public hearing (as required by paragraph
(d)of this section). The State may cancel the public hearing through a method it identifies if no request for a public hearing is received during the 30 day notification period and the original notice announcing the 30 day notification period clearly states: *If no request for a public hearing is received the hearing will be cancelled; identifies the method and time for announcing that the hearing has been cancelled; and provides a contact phone number for the public to call to find out if the hearing has been cancelled.* These requirements apply for adoption and submission to EPA of:
(f)The State must submit with the plan, revision, or schedule, a certification that the requirements in paragraph
(a)and
(d)of this section were met. Such certification will include the date and place of any public hearing(s) held or that no public hearing was requested during the 30 day notification period. 3. Section 51.103 is revised to read as follows: § 51.103 Submission of plans, preliminary review of plans.
(a)The State makes an official plan submission to EPA only when the submission conforms to the requirements of appendix V to this part, and the State delivers five hard copies or at least two hard copies with an electronic version of the hard copy (unless otherwise agreed to by the State and Regional Office) of the plan to the appropriate Regional Office, with a letter giving notice of such action. If the State submits an electronic copy, it must be an exact duplicate of the hard copy.
(b)Upon request of a State, the Administrator will provide preliminary review of a plan or portion thereof submitted in advance of the date such plan is due. Such requests must be made in writing to the appropriate Regional Office, must indicate changes (such as, redline/strikethrough) to the existing approved plan, where applicable and must be accompanied by five hard copies or at least two hard copies with an electronic version of the hard copy (unless otherwise agreed to by the State and Regional Office). Requests for preliminary review do not relieve a State of the responsibility of adopting and submitting plans in accordance with prescribed due dates. 4. Appendix V to Part 51 is amended by revising paragraphs
(d)and
(g)under Section 2.1 to read as follows: Appendix V of Part 51—Criteria for Determining the Completeness of Plan Submissions 2.1. * * *
(d)A copy of the actual regulation, or document submitted for approval and incorporation by reference into the plan, including indication of the changes made ( *such as, redline/strikethrough* ) to the existing approved plan, where applicable. The submittal shall be a copy of the official State regulation/document signed, stamped and dated by the appropriate State official indicating that it is fully enforceable by the State. The effective date of the regulation/document shall, whenever possible, be indicated in the document itself. *If the State submits an electronic copy, it must be an exact duplicate of the hard copy with changes indicated, signed documents need to be in portable document format, rules need to be in text format and files need to be submitted in manageable amounts (e.g., a file for each section or chapter, depending on size, and separate files for each distinct document) unless otherwise agreed to by the State and Regional Office.*
(g)Certification that public hearing(s) were held in accordance with the information provided in the public notice and the State's laws and constitution, if applicable and consistent with the public hearing requirements in 40 CFR 51.102. PART 52—[AMENDED] 5. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401, *et seq.* 6. Section 52.02 is amended by revising paragraphs (d)(2)(iii), (d)(2)(iv), (d)(2)(vii), and (d)(2)(viii) to read as follows: § 52.02 Introduction.
(d)* * *
(2)* * *
(iii)Delaware, District of Columbia, Pennsylvania, Maryland, Virginia, and West Virginia. Environmental Protection Agency, Region 3, 1650 Arch Street, Philadelphia, PA 19103-2029.
(iv)Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. Environmental Protection Agency, Region 4, 61 Forsyth Street, Atlanta, Georgia 30303.
(vii)Iowa, Kansas, Missouri, and Nebraska. Environmental Protection Agency, Region 7, 901 North 5th Street, Kansas City, KS 66101.
(viii)Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming. Environmental Protection Agency, Region 8, 1595 Wynkoop Street, Denver, CO 80202-1129. 7. Section 52.16 is amended by revising paragraphs (b)(3), (b)(4), (b)(7) and (b)(8) to read as follows: § 52.16 Submission to Administrator.
(b)* * *
(3)Delaware, District of Columbia, Pennsylvania, Maryland, Virginia, and West Virginia. EPA Region 3, 1650 Arch Street, Philadelphia, PA 19103-2029.
(4)Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. EPA Region 4, 61 Forsyth Street, Atlanta, Georgia 30303.
(7)Iowa, Kansas, Missouri, and Nebraska. EPA Region 7, 901 North 5th Street, Kansas City, KS 66101.
(8)Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming. EPA, Region 8, 1595 Wynkoop Street, Denver, CO 80202-1129. [FR Doc. E7-13716 Filed 7-13-07; 8:45 am] BILLING CODE 6560-50-P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 22 [RM No. 11355; FCC 07-103] Cellular Radiotelephone Service Rules AGENCY: Federal Communications Commission. ACTION: Final rule. SUMMARY: In this document, the Commission denies a petition for rulemaking seeking a two-year extension, until February 18, 2010, of the requirement that all cellular licensees provide analog service to subscribers and roamers whose equipment conforms to the Advanced Mobile Phone Service standard. It also adopts related measures to ensure the continuity of wireless coverage to affected consumers following sunset of the analog service requirement and to ensure that interested parties are fully informed of the sunset. DATES: Effective June 15, 2007, except for the implementation of new reporting and recordkeeping requirements imposed by this action pending approval by the Office of Management and Budget. FOR FURTHER INFORMATION CONTACT: Richard Arsenault, Wireless Telecommunications Bureau at
(202)418-0920, TTY
(202)418-7233, or via the Internet at *Richard.Arsenault@fcc.gov;* for additional information concerning the information collections contained in this document, contact Judith Boley-Herman at
(202)418-0214, or via the Internet at *Judith.B-Herman@fcc.gov.* SUPPLEMENTARY INFORMATION: This is a summary of the Commission's *Memorandum Opinion and Order,* in RM No. 11355; FCC 07-103, adopted May 25, 2007, and released June 15, 2007. The complete text of this document is available for inspection and copying during normal business hours in the FCC's Reference Information Center, 445 12th Street SW., Room CY-A257, Washington, DC. Alternative formats (Braille, large print, electronic files, audio format) are available for people with disabilities by sending an e-mail to *FCC504@fcc.gov* or, calling the Consumer and Government Affairs Bureau at
(202)418-0530 (voice),
(202)418-0432 (TTY). The Order also may be downloaded from the Commission's Web site at *http://www.fcc.gov/.* 1. In this *Memorandum Opinion and Order* the Commission denies a Petition for Rulemaking filed by the Alarm Industry Communications Committee
(AICC)and ADT Security Services, Inc. (ADT), seeking a two-year extension, until February 18, 2010, of the requirement that all cellular licensees provide analog service to subscribers and roamers whose equipment conforms to the Advanced Mobile Phone Service
(AMPS)standard. This requirement will sunset on February 18, 2008 (the “analog sunset date”), but cellular licensees may continue to provide AMPS-compatible service after that date. The Commission finds that the alarm industry has sufficient time and equipment to replace all analog alarm radios that are used as a primary communications path before the analog sunset date and that the public interest would not be served by extending the analog service requirement beyond February 18, 2008. The overall effect of this action is to further the public interest by maintaining, and ensuring a smooth transition to, the scheduled analog sunset date for the public. The Commission received and considered over 70 comments on the Petition for Rulemaking in this proceeding. 2. The Commission also takes three related actions to ensure the continuity of wireless coverage to affected consumers following sunset of the analog service requirement and to ensure that interested parties are fully informed of the sunset. First, it requires all cellular licensees to notify any remaining analog service subscribers of the analog sunset. At a minimum, licensees must notify each analog-only subscriber individually of their intention to discontinue analog service at least four months before such discontinuance, and a second time, at least 30 days before such discontinuance. Second, in order to reduce the financial, administrative, and technical burdens that would be associated with filing a revised Cellular Geographic Service Area
(CGSA)determination with the Commission when a carrier decommissions analog service in a CGSA, it permits licensees, in lieu of making a revised CGSA showing, to certify that the discontinuance of AMPS service will not result in any loss of wireless coverage throughout the carrier's CGSA. If a licensee cannot so certify, it must file a revised determination, and any area no longer covered by a CGSA would be forfeited and available for immediate reassignment by the Commission under its cellular unserved area rules. Third, it directs the Commission's Consumer and Governmental Affairs Bureau, in conjunction with the Wireless Telecommunications Bureau, to initiate a public outreach campaign to ensure that consumers, public safety groups, and other interested parties are aware of, and prepared for, the analog sunset in February 2008. I. Procedural Matters A. Paperwork Reduction Act 3. This document contains new information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. Specifically, it requires all cellular radiotelephone service licensees to notify each analog-only subscriber individually of their intention to discontinue analog service at least four months before such discontinuance (by a billing insert, for example), and again, at least 30 days before such discontinuance (by separate letter or direct customer contact, for example). The Commission, as part of its continuing efforts to reduce paperwork burdens, invites the general public, the Office of Management and Budget
(OMB)and other Federal agencies to comment on the information collection requirements contained in this *Memorandum Opinion and Order,* as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due September 14, 2007. Comments should address:
(a)Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility;
(b)the accuracy of the Commission's burden estimates;
(c)ways to enhance the quality, utility, and clarity of the information collected; and
(d)ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, *see* 44 U.S.C. 3506(c)(4), we seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” We do not believe that the information collection burdens herein will affect a significant number of small businesses as defined in the SBPRA. *OMB Control Number:* 3060-xxxx. *Title:* Sunset of the Cellular Radiotelephone Service Analog Service Requirement and Related Matters. *Type of Review:* New collection. *Respondents:* Business or other for-profit. *Number of Respondents:* 452. *Estimated Time Per Response:* 12 hours. *Frequency of Response:* Twice. *Obligation to Respond:* Mandatory. *Total Annual Burden:* 10,848 hours. *Total Annual Costs:* $None. *Privacy Act Impact Assessment:* None. *Nature and Extent of Confidentiality:* None. *Needs and Uses:* The third-party consumer notices will ensure that remaining analog-only cellular service subscribers are adequately notified of the potential loss of analog service and the need to make alternative service arrangements. B. Report to Congress 4. The Commission will send a copy of the *Memorandum Opinion and Order* in a report to be sent to Congress and the Congressional Budget Office pursuant to the Congressional Review Act. C. Ordering Clauses Pursuant to sections 1, 2, 4(i), 4(j) and 309 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j) and 309, and §§ 1.403 and 22.901 of the Commission's rules, the Petition for Rulemaking filed by the Alarm Industry Communications Committee and ADT Security Services, Inc. on November 30, 2006, *is denied* . Pursuant to sections 4(i), 201, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 201, and 303(r); and section 5(d) of the Administrative Procedure Act, 5 U.S.C. 554(e), each cellular radiotelephone service licensee must notify each analog-only subscriber individually of their intention to discontinue Advanced Mobile Phone Service
(AMPS)compatible analog service at least four months before such discontinuance, and a second time, at least 30 days before such discontinuance. Pursuant to sections 1, 4(i), and 4(j) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), and 154(j), and sections 0.131, 0.201 and 0.331 of the Commission's rules, the Consumer and Governmental Affairs Bureau, in conjunction with the Wireless Telecommunications Bureau, shall commence a public outreach campaign to ensure public awareness of the sunset of the analog service requirement. List of Subjects in 47 CFR Part 22 Radio. Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. E7-13727 Filed 7-13-07; 8:45 am] BILLING CODE 6712-01-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [Docket No. 070213032-7032-01] RIN 0648-XB43 Fisheries of the Exclusive Economic Zone Off Alaska; Pacific Ocean Perch in the West Yakutat District of the Gulf of Alaska AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Temporary rule; closure. SUMMARY: NMFS is prohibiting directed fishing for Pacific ocean perch in the West Yakutat District of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the 2007 total allowable catch
(TAC)of Pacific ocean perch in the West Yakutat District of the GOA. DATES: Effective 1200 hrs, Alaska local time (A.l.t.), July 11, 2007, through 2400 hrs, A.l.t., December 31, 2007. FOR FURTHER INFORMATION CONTACT: Jennifer Hogan, 907-586-7228. SUPPLEMENTARY INFORMATION: NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska
(FMP)prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. The 2007 TAC of Pacific ocean perch in the West Yakutat District of the GOA is 1,140 metric tons
(mt)as established by the 2007 and 2008 harvest specifications for groundfish of the GOA (72 FR 9676, March 5, 2007). In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2007 TAC of Pacific ocean perch in the West Yakutat District of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 1,090 mt, and is setting aside the remaining 50 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch in the West Yakutat District of the GOA. After the effective date of this closure the maximum retainable amounts at § 679.20(e) and
(f)apply at any time during a trip. Classification This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of Pacific ocean perch in the West Yakutat District of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of July 10, 2007. The AA also finds good cause to waive the 30 day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment. This action is required by § 679.20 and is exempt from review under Executive Order 12866. Authority: 16 U.S.C. 1801 *et seq.* Dated: July 11, 2007. James P. Burgess, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. 07-3455 Filed 7-11-07; 2:57 pm]
Connectionstraces to 42
Traces to 42 documents
U.S. Code
CFR
38 references not yet in our index
  • 14 CFR 97
  • 1 CFR 51
  • Pub. L. 104-113
  • 5 CFR 1320.11
  • 5 USC 601-612
  • 16 USC 791-825r
  • 42 USC 7101-7352
  • 15 USC 717-717w
  • 43 USC 1331-1356
  • T.D. 9339
  • Pub. L. 109-432
  • 120 Stat. 2922
  • T.D. 8755
  • T.D. 8826
  • T.D. 8903
  • 26 CFR 1
  • 26 CFR 602
  • 26 USC 1397E
  • 29 CFR 102
  • 5 CFR 297
  • 33 CFR 100
  • Pub. L. 104-121
  • 44 USC 3501-3520
  • 2 USC 1531-1538
  • 42 USC 4321-4370f
  • 33 USC 1233
  • 33 CFR 165
  • Pub. L. 107-295
  • 40 CFR 51
  • 40 CFR 9
  • 13 CFR 121
  • Pub. L. 104-4
  • 42 USC 7401-7671q
  • 47 CFR 22
  • Pub. L. 104-13
  • Pub. L. 107-198
  • 50 CFR 679
  • 50 CFR 600
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cites case law
Rules and Regulations
Final rule
U.S.C.§ 552
C.F.R.§ 97.20
Fed. Reg.Notices
U.S.C.§ 106
Stat.Public Law 104–112
U.S.C.§ 272
C.F.R.§ 284.12
C.F.R.§ 284.8
C.F.R.§ 380.4
Cite14 CFR 97
Cite1 CFR 51
Pub. L.Pub. L. 104-113
Cites 80 · showing 12Cited by 0 across 0 sources
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