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Code · REGISTER · 2007-08-02 · Animal and Plant Health Inspection Service, USDA · Rules and Regulations

Rules and Regulations. Proposed rule

62,988 words·~286 min read·/register/2007/08/02/07-3783

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

BILLING CODE 3510-NK-M 72 148 Thursday, August 2, 2007 Proposed Rules DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 9 CFR Part 93 [Docket No. APHIS-2006-0164] RIN 0579-AC35 Temporary Importation of Horses; Noncompetitive Entertainment Horses From Countries Affected With Contagious Equine Metritis AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Proposed rule. SUMMARY: We are proposing to amend the regulations to allow noncompetitive entertainment horses from countries affected with contagious equine metritis to be temporarily imported into the United States under certain conditions.
The regulations currently provide for the temporary importation of horses from countries affected with contagious equine metritis to compete in specified events. In recent years it has become evident that similar provisions are needed for noncompetitive entertainment horses. This action would allow the temporary importation of horses into the United States solely for public exhibition and entertainment purposes while continuing to protect against the introduction and dissemination of contagious equine metritis.
DATES: We will consider all comments that we receive on or before October 1, 2007. ADDRESSES: You may submit comments by either of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2006-0164 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. • *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No.
APHIS-2006-0164, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2006-0164. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays.
To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: Dr. Ellen M. Buck, Veterinary Medical Officer, Import/Export Animals, National Center for Import and Export, VS, APHIS, 4700 River Road Unit 39, Riverdale, MD 20737-1231;
(301)734-8364. SUPPLEMENTARY INFORMATION: Background The regulations in 9 CFR part 93 (referred to below as the regulations) prohibit or restrict the importation of certain animals into the United States to prevent the introduction of communicable diseases of livestock and poultry. Subpart C—Horses, §§ 93.300 through 92.326 of the regulations, pertains to the importation of horses into the United States. Section 93.301 of the regulations contains specific provisions for the quarantine and testing of horses from regions affected with contagious equine metritis (CEM), a highly contagious bacterial venereal disease that affects breeding and fertility. This section also identifies regions where CEM exists and regions that trade horses freely with those where CEM exists without testing for CEM. To prevent the introduction of CEM into the United States, § 93.301(c)(1) prohibits the importation of horses into the United States from listed regions unless the horses are imported in accordance with certain requirements. To be eligible for importation, the horses must fall into one of the following categories: • Wild (non-domesticated) species of equidae if captured in the wild or imported from a zoo or other facility where it would be unlikely that the animal would come in contact with domesticated horses used for breeding; • Geldings; • Weanlings or yearlings whose age is certified on the import health certificate required under § 93.314(a); • Horses imported in accordance with conditions prescribed by the Administrator as provided in § 93.301(a); • Spanish Pure Breed horses imported for permanent entry from Spain or thoroughbred horses imported for permanent entry from France, Germany, Ireland, or the United Kingdom as provided in § 93.301(d); • Stallions or mares over 731 days of age imported for permanent entry as provided in § 93.301(e); • Horses over 731 days of age imported into the United States for no more than 90 days to compete in specified events as provided in § 93.301(f); and • U.S. horses returning to the United States as provided in § 93.301(g). The Animal and Plant Health Inspection Service (APHIS) has used the provisions in § 93.301(f), relating to the temporary importation of horses for competition, to allow the temporary importation of noncompetitive entertainment horses into the United States. Several performance horse groups have asked APHIS to extend the 90-day limit provided for in § 93.301(f) so that they may exhibit and show their horses in the United States for longer periods of time. In addition, the United States Animal Health Association has recommended that APHIS amend the regulations to establish a category for noncompetitive entertainment horses. APHIS has conducted a risk assessment to evaluate the risk of allowing the extended importation of noncompetitive entertainment horses from countries affected by CEM without requiring CEM testing, and the risk of the U.S. Department of Agriculture
(USDA)losing track of these horses during extended importation. The risk assessment, titled “Assessment of the Risk of Introduction of Contagious Equine Metritis
(CEM)through the Extended Importation of Noncompetitive Entertainment Horses from CEM-affected countries,” may be viewed on the Regulations.gov Web site (see ADDRESSES at the beginning of this document for instructions for accessing Regulations.gov). Copies of the risk assessment may be obtained by calling or writing to the person listed under FOR FURTHER INFORMATION CONTACT . The risk assessment concluded that the risk posed by allowing the extended importation of noncompetitive entertainment horses from CEM-affected countries would be extremely low, with the application of the restrictions described in this proposed rule. In addition, the risk assessment concluded that the risk of USDA losing track of the animals was extremely low due to the extensive supervision and involvement of APHIS personnel and the accredited veterinarian. Accordingly, we are proposing to amend the regulations in § 93.301 to establish conditions under which noncompetitive entertainment horses from CEM-affected regions may be imported into the United States for longer than 90 days solely for public exhibition and entertainment purposes. Because the conditions would be very similar to the conditions in § 93.301(f), which provides for the temporary importation of horses to compete in specified events, we would amend § 93.301(f) to apply to both types of imported horses. We would also amend the regulations pertaining to import permits in § 93.304 to require the submission of additional information with the application for an import permit. As with horses imported for competition, we are proposing to provide two primary safeguards against the horses transmitting CEM while in the United States. First, a representative of APHIS would monitor the horses whenever they are not in transit in the United States. Second, we would require stringent measures to ensure that the horses are kept apart from other horses, except when performing or being exhibited or exercised. Because CEM is a venereal disease transmitted by sexual contact, there is virtually no risk that a horse will transmit the disease through casual contact with other horses during a performance, exhibition, or exercise. Import Permit and Health Certificate In addition to the current requirements in § 93.304(a) for an import permit, we are proposing that the owner or importer would have to supply the following information to APHIS with the application for the permit: • The individual identifying information for all horses to be imported; • The permanent electronic identification of each horse to be imported, if applicable; • Photographs (head and lateral views) of each horse that are sufficient to identify the horse on an electronic medium approved by APHIS; • The proposed total length of stay in the United States; • A description of the shows or events in which the horse would perform while in the United States; • The names and locations of the venues in which the horse would perform while in the United States, and the dates the horse would perform at each venue; • The names and locations of the premises on which the horse would be kept while in the United States, and the dates the horse would be kept on each premises; • The methods and routes by which the horse would be transported while in the United States; • A written plan for handling sick or injured horses that includes the name, address, and phone number of each accredited veterinarian who would provide veterinary services in the United States; the name, address, and phone number of medical facilities to be used to diagnose or treat sick or injured horses while in the United States; and a plan to return sick or injured horses to performance condition; and • An application for a trust fund or escrow account agreement with APHIS. This information would allow APHIS to monitor the location of the horse while it is in the United States and to confirm compliance with the required isolation and handling procedures to ensure that the horse does not transmit CEM to any other horse while in this country. Given the potential for long stays in the United States for noncompetitive entertainment horses, APHIS must have current information about the horses and their itinerary in order to effectively monitor the horses for compliance with the regulations. Therefore, we would require that while in the United States, the owner or importer apply for and obtain from APHIS an import permit each year prior to the anniversary date of the horse's arrival in the United States. This would ensure that APHIS has current information about the horses and their itinerary for monitoring purposes. As with horses imported for competition, we would require that, at the time of importation, each horse be accompanied by an import permit in accordance with § 93.304 and a health certificate in accordance with § 93.314. However, we would also require the health certificates for noncompetitive entertainment horses to certify that cultures negative for CEM have been collected from each horse on three separate occasions within a 7-day period, with the last set of specimens collected within 30 days of exportation. This would help to ensure that horses infected with CEM do not enter this country and jeopardize the health of the U.S. horse population. Restrictions Following Arrival in the United States We are proposing to allow horses over 731 days of age to be imported into the United States solely for noncompetitive public exhibition and entertainment purposes. Such horses would be allowed to remain in the United States indefinitely as long as the conditions in the regulations are met. While in the United States, the horse would be prohibited from entering competitions and would have to be regularly used in performances or exhibitions, unless sick or injured. A horse that is no longer performing or being exhibited would be required to be exported or made eligible for permanent entry. In addition, a noncompetitive entertainment horse would have to be kept with the other horses listed on the import permit, unless otherwise approved by an APHIS representative. We expect that such approvals would be granted for diagnosis or treatment of a medical condition, pre-export isolation, or quarantine for permanent entry. As with horses imported for competition, we would require a noncompetitive entertainment horse to be moved according to the itinerary and methods of transport specified in the import permit. However, we are proposing to allow horses imported for competition and noncompetitive entertainment horses to be moved for diagnosis or treatment of a medical condition with the prior approval of an APHIS representative. APHIS has always allowed such movements; however, we are proposing to add that provision to the regulations to make it clear to the public. We are proposing that, while in the United States, the horse would be monitored by an accredited veterinarian or APHIS representative to ensure that the horse is moved according to the itinerary and methods specified in the import permit, kept separated from other horses not listed on the import permit, and not used for breeding purposes (including artificial insemination or semen collection) or has any other sexual contact with other horses. The horse could not be kept on a breeding premises. We would require that the horse be kept in a pasture or stall separate from other horses not listed on the import permit, except when actually performing or being exhibited or exercised. The stall in which the horse is kept would have to be separated from other stalls containing horses that are not listed on the import permit, either by an empty stall, by an open area across which horses cannot touch each other, or by a solid wall that is at least 8 feet (2.4 meters) high. The premises on which the horse is kept would have to be approved in writing by an APHIS representative. As noted above, we would require that the horse not be used for breeding purposes or have any other sexual contact with other horses. However, in contrast to horses imported for competition, we would allow a noncompetitive entertainment horse to undergo genital examinations necessary for diagnosis or treatment of a medical condition with the prior approval of an APHIS representative. This provision would allow the horse to receive appropriate medical care during its extended stay in the country. We are also proposing to apply the transportation and cleaning and disinfection requirements for horses imported for competition that are contained in the current regulations to noncompetitive entertainment horses. Thus, we would require that, while the horse is in transit, it would have to be moved either in an aircraft or a sealed van or trailer and, except in situations where the horse's life is in danger, only an APHIS representative would be permitted to break the seal on a van or trailer used to move the horse. Additionally, we would require that after the horse is transported anywhere in the United States, any vehicle in which the horse was transported would have to be cleaned and disinfected in the presence of an APHIS representative, according to the procedures for cleaning and disinfection specified in 9 CFR 71.7 through 71.12 of the regulations. We would also require that, in most instances, the cleaning and disinfection would have to be done before the vehicle is moved from the place where the horse is unloaded. However, in cases where there are inadequate facilities or equipment for cleaning and disinfection at the place where the horse is unloaded, the Administrator would have the discretion to allow the vehicle to be moved to another location for cleaning and disinfection, when the move would not pose a disease risk to other horses in the United States. Change in Itinerary We are proposing that if the owner or importer wishes to change the horse's itinerary or the methods by which the horse is transported from those specified in the import permit, the owner or importer would have to make the request for change in writing to the Administrator. Such requests would have to be submitted at least 15 days before the proposed date of any change. We propose that this provision would also apply to horses imported for competition. This would ensure that APHIS has enough time to process the request, including inspecting any new premises, and to arrange for the required monitoring before the date of the proposed change. The change in itinerary or means of transport would not be permitted without the written approval of the Administrator, who would have the discretion to grant the request for change when he or she determines that granting the request would not endanger other horses in the United States, and that sufficient APHIS personnel would be available to provide the services requested by the owner or importer. Permanent Entry We are proposing that noncompetitive entertainment stallions or mares over 731 days of age would be eligible to remain in the United States if the horse meets the provisions for permanent entry in the current regulations. Specifically, the horse's owner or importer would have to:
(1)Apply for and receive a new import permit from APHIS that specifies that the stallion or mare would be moved to an approved State; and
(2)transport the stallion or mare in a sealed vehicle that has been cleaned and disinfected to an approved facility in an approved State where it is quarantined under State or Federal supervision until the stallion or mare has met the testing and treatment requirements of § 93.301(e)(3) or (e)(5). Cancellation of Import Permit We are proposing to apply to noncompetitive entertainment horses the provisions relating to the cancellation of an import permit and the appeals process that currently appear in the regulations pertaining to horses imported for competition. Specifically, we are proposing that if the provisions described in this proposed rule are not met, the Administrator would cancel the import permit that allows the importation of the horse into the United States and that allows the horse to stay in this country. If the cancellation is oral, the decision and the reason for cancellation of the permit would be confirmed in writing as promptly as circumstances allow. The owner or importer would be able to appeal the cancellation of the permit in writing to the Administrator within 10 days after receiving either oral or written notification of the cancellation, whichever is earlier. If the appeal is sent by mail, it would have to be postmarked within 10 days after the owner or importer receives the notification of cancellation. The appeal would have to include all of the facts and reasons upon which the person relies to show that the import permit was wrongfully canceled. If there is a conflict as to any material fact, a hearing would be held to resolve the conflict. These provisions would satisfy due process requirements pertaining to the cancellation of an import permit. We are also proposing that, except in those cases where an appeal is in process, any person whose import permit is canceled would have to move his or her horse out of the United States within 10 days after receiving an oral or written notice of cancellation, whichever is earlier. The horse would not be permitted to perform or be exhibited from the date the owner or importer receives the notice of cancellation until the horse is moved out of the United States or until resolution of an appeal in favor of the owner or importer. Except when being exercised, the horse would have to be kept in a stall that is separated from other stalls containing horses that are not listed on the import permit, either by an empty stall, an open area across which horses cannot touch each other, or a solid wall that is at least 8 feet (2.4 meters) high. Until the horse is removed from the United States or an appeal is resolved in favor of the owner or importer, the horse would have to be kept, at the expense of the owner or importer, either on the premises at which the horse is located when the notice of cancellation is received or, if the horse is in transit when the notice of cancellation is received, on the premises at which it is next scheduled to perform or be exhibited. However, in cases where the owners of the premises do not permit the horse to stay on those premises, or when the Administrator determines that keeping the horse at the premises would pose a disease risk to other horses in the United States, the horse would have to be kept, at the expense of the owner or importer, on an alternative premises approved by the Administrator. Trust Fund Agreement and Cost of Government-Provided Services We are proposing to require that noncompetitive entertainment horses be imported and maintained in the United States in accordance with a trust fund agreement executed by the horse's owner or importer. The current regulations already require that a trust fund agreement be executed for horses imported into the United States to compete in specified events. We would extend these provisions to noncompetitive entertainment horses to ensure that the government is reimbursed for the services it provides. Under the trust fund agreement, the owner or importer would have to deposit with APHIS an amount equal to the estimated cost, including travel, subsistence, administrative expenses, and incidental expenses, as determined by APHIS, for an APHIS representative to:
(1)Inspect the premises at which the horse would perform or be exhibited;
(2)conduct the required monitoring of the horse at the premises at which it competes; and
(3)supervise cleaning and disinfecting the means of conveyance in which the horses travels while in the United States. The estimated costs would be based on the following factors: • Number of hours needed for an APHIS representative to conduct the required inspection and monitoring; • For services provided during regular business hours (8 a.m. to 4:30 p.m., Monday through Saturday, except holidays), the average salary, per hour, for an APHIS representative; • For services provided outside regular business hours, the applicable rate for overtime, night differential, or Sunday or holiday pay, based on the average salary, per hour, for an APHIS representative; • Number of miles from the premises at which the horse competes, performs, or is exhibited to the APHIS office or facility that is monitoring the activities; • Government rate per mile for automobile travel or, if appropriate, cost of other means of transportation between the premises at which the horse competes, performs, or is exhibited and the APHIS office or facility; • Number of trips between the premises at which the horse competes, performs, or is exhibited and the APHIS office or facility that APHIS representatives are required to make in order to conduct the required inspection and monitoring; • Number of days the APHIS representative conducting the inspection and monitoring must be in “travel status;” • Applicable government per diem rate; and • Cost of related administrative support services. During the horse's stay in the United States, if we determine that the amount deposited would not fully cover the services we are scheduled to provide during the remainder of the horse's stay, we would issue a bill for the difference to the horse's owner or importer. The horse's owner or importer would have to pay amounts billed within 14 days after receiving the bill. If the bill is not paid within that time, we would cease to perform the services provided for in this proposed rule until the bill is paid. The Administrator would inform the owner or importer of the cessation of services orally or in writing. If the notice is oral, it would be confirmed in writing as soon as circumstances permit, along with the reasons for it. In such a case, the horse would have to be kept, at the expense of the owner or importer and until the bill is paid, either on the premises at which the horse is located when the notice of cessation of services is received or, if the horse is in transit when the notice of cessation is received, on the premises at which it is next scheduled to perform or be exhibited according to the import permit. The horse would have to be kept in a stall that is separated from other stalls containing horses that are not listed on the import permit either by an empty stall, an open area across which horses cannot touch each other, or a solid wall that is at least 8 feet (2.4 meters) high. In cases where the owners of the premises where the horse would be expected to stay do not permit the horse to be kept on those premises, or when the Administrator determines that keeping the horse on the premises would pose a disease risk to other horses in the United States, the horse would have to be kept, at the expense of the owner or importer, on an alternative premises approved by the Administrator. Until the bill is paid, the horse would not be permitted to perform or be exhibited. Any amount deposited in excess of the cost to APHIS of providing the services required would be refunded to the owner or importer. Miscellaneous In this document, we are also updating the name of the breed association in Spain that is specifically approved by the U.S. Department of Agriculture to provide factual, current information regarding the activities of Spanish Pure Breed horses for the purposes of § 93.301(d). The current regulations identify the breed association in Spain as “Jefatura de Cria Caballar Registro Matricula.” The Spanish Government has notified APHIS that the name of the breed association has been changed to “Asociacion Nacional de Criadores de Caballos de Pura Raza Espanola.” Executive Order 12866 and Regulatory Flexibility Act This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. Currently, § 93.301(f) provides that mares and stallions over 731 days old from CEM-affected countries may be temporarily imported into the United States to compete in specified events for no longer than 90 days without meeting CEM quarantine and testing requirements that would otherwise apply to such horses. These same provisions have been used to authorize the temporary importation of noncompetitive entertainment horses. Several performance horse groups have requested that APHIS extend the 90-day limit so that they may exhibit and show their horses in the United States for longer periods. We are proposing to amend the regulations to establish conditions under which noncompetitive entertainment horses (stallions and mares) over 731 days of age from CEM-affected countries could remain in the United States for longer than 90 days for public exhibition and entertainment purposes without undergoing the CEM quarantine and testing prescribed in the regulations. The horse industry plays an important role in the U.S. economy. There were 542,223 farms with 3.644 million horses valued at $9.9 billion in the U.S. in 2002. 1 According to a recent study done for the American Horse Council, the number and value of horses are much larger than those reported in the 2002 Census of Agriculture: 2 million people owning 9.2 million horses with direct value of about $39 billion. 2 Both sets of data underscore the importance of the equine industry. In addition, other agricultural and non-agricultural sectors are dependent on the horse industry for their economic activity. Horses are a highly valued asset, especially those with a specific pedigree. 1 2002 Census of Agriculture (NASS). 2 Deloitte Consulting LLP for American Horse Council, National Economic Impact of the U.S. Horse Industry, 2005. Horses also play an important role in U.S. international trade. The value of U.S. horse exports ($449 million) was more than the combined export value of cattle, hogs and sheep and goats ($65 million) between 2003 and 2005. 3 3 Global Trade Information Services (GTIS), World Trade Atlas. The United States imported a total of 31,198 horses in 2005. Nearly 67 percent of horses imported were from Canada and 7.6 percent were from Mexico. Of the total imports, 25,564 were from non-CEM countries and the remaining 5,634 were from CEM countries. The proportion of horse imports that are pure breeding horses is small. Of the above total, 2,341 were purebred breeding horses. Only 340 purebred breeding horses were imported from CEM countries. 4 However, horses supplied by CEM-affected countries are generally highly valued. In 2005, for example, the average value of purebred breeding horses imported from CEM-affected regions was $41,220, whereas the average value of purebred breeding horses imported from countries not affected by CEM was $17,180. 4 Id. Although the disease does not result in death, CEM can be economically costly. The direct consequence may include the closing of breeding operations, production losses as a result of abortion, and costs of disease control. A CEM outbreak would result in the quarantine of affected horse farms, temporary cessation of breeding operations, and restriction of both intrastate and interstate movement. For some breeders, this could mean the loss of thousands or even millions of dollars in stud fees and breeding losses. Other consequences include trade restrictions that may be imposed by international trading partners. The noncompetitive entertainment horses that would be affected by this rule would not be allowed to have direct contact with horses outside those listed on their permit and could not be used for breeding purposes at any time while in the United States, including breeding with horses in the same show. Additionally, these horses may not undergo any genital examinations (unless required for diagnosis and treatment of a medical condition with prior approval of an APHIS representative), semen collection, or artificial insemination. Furthermore, since these are very specialized performance animals, domestic breeders would not be affected if this rule were to increase the amount of time the imported horses are in the United States. Horses arriving in the United States from abroad are quarantined at a USDA Animal Import Center, generally for 3 days. Horses temporarily imported are required to exit the United States and be readmitted, following quarantine and testing, every 90 days. Each entry after 90 days is considered a new entry into the United States. The USDA charges a minimum of $810 for the 3-day quarantine. In addition to this facility charge, user fees of $80 are paid for blood testing, resulting in a total quarantine and testing cost per horse of $890. The proposed rule would allow imported performance horses to stay in the U.S. longer than 90 days without their owners having again to pay USDA import quarantine and testing costs. This is a saving that accrues to the importing entities and is likely to counterbalance their costs associated with supervisory activities of APHIS and/or an accredited veterinarian. The number of entities and horses expected to be directly affected by this rule is not large. We anticipate that between 1 and 10 performing groups varying in size from 5 to 40 horses (or a total of between 5 and 400 horses) would utilize the proposed exception each year. Given that there are over a million domestic show horses, even the upper quantity represents a very small fraction of the total supply (0.04 percent). The Small Business Administration
(SBA)has established guidelines for determining which types of firms are to be considered small under the Regulatory Flexibility Act. This rule may affect operations such as zoological parks (North American Industry Classification System [NAICS] code 712130), and animal performances including circuses, carnivals, and amusement parks (NAICS code 711190). SBA classifies these operations as small entities if their annual receipts are not more than $6.5 million. Of the approximately 850 such establishments, about 12.5 percent are considered to be large. The subset of these entities that temporarily import noncompetitive entertainment horses from CEM countries would benefit from the forgone costs of having the horses exit and reenter the United States every 90 days. On the other hand, they would bear the cost of supervisory activities by APHIS and/or an accredited veterinarian. The overall impact is expected to be insignificant, given the relatively small number of noncompetitive entertainment horses imported from CEM countries. Other operations that may remotely be affected are domestic suppliers of similar horses (NAICS code 112920). According to the 2002 Census of Agriculture, that year there were 542,223 horse farms with 3,644,278 horses in the United States, of which 124,596 farms sold 470,423 horses that had a total value of over $1.13 billion. 5 An unknown share of these farms supply show horses that could be comparable to the noncompetitive entertainment horses imported temporarily from CEM affected countries. SBA classifies horse farms as small entities if their annual receipts are not more than $750,000; 6 over 99 percent are considered to be small. 5 As stated above, the census total is much less than the total reported by the American Horse Council Foundation. According to that report, there were 9,222,847 horses in 2005 (Deloitte Consulting LLP, National Economic Impact of the U.S. Horse Industry). Of this total, 9 percent were racing, 30 percent showing, 42 percent recreation and 19 percent other ( *http://www.horsecouncil.org/statistics.htm* ). 6 SBA, Small Business Size Standards matched to North American Industry Classification System, Effective July 31, 2006; and U.S. Census Bureau, 2002 Economic Census: Manufacturing-Industries Series, Wholesale Trade-Subject Series and Transportation and Warehousing-Subject Series, Issued August, 2006. Entities that may be affected by the rule are principally small businesses, but the impact of the rule is not expected to be significant. Because the pool of noncompetitive entertainment horses that are temporarily imported is a small fraction of the total number of show horses in the United States, any effects of the proposed rule for U.S. entities would be very small. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities. Executive Order 12988 This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted:
(1)All State and local laws and regulations that are inconsistent with this rule will be preempted;
(2)no retroactive effect will be given to this rule; and
(3)administrative proceedings will not be required before parties may file suit in court challenging this rule. Paperwork Reduction Act In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comments refer to Docket No. APHIS-2006-0164. Please send a copy of your comments to:
(1)Docket No. APHIS-2006-0164, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and
(2)Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue, SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule. We are proposing to amend the regulations to allow noncompetitive entertainment horses from countries affected with CEM to be temporarily imported into the United States under conditions very similar to the conditions in § 93.301(f), which provides for the temporary importation of horses to compete in specified events. In addition, we are proposing to require the submission of additional information with the application for an import permit. We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us:
(1)Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;
(2)Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses). *Estimate of burden:* Public reporting burden for this collection of information is estimated to average 1.4 hours per response. *Respondents:* Importers of noncompetitive entertainment horses. *Estimated annual number of respondents:* 15. *Estimated annual number of responses per respondent:* 1.333333333. *Estimated annual number of responses:* 20. *Estimated total annual burden on respondents:* 28 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. E-Government Act Compliance The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this proposed rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. List of Subjects in 9 CFR Part 93 Animal diseases, Imports, Livestock, Poultry and poultry products, Quarantine, Reporting and recordkeeping requirements. Accordingly, we propose to amend 9 CFR part 93 as follows: PART 93—IMPORTATION OF CERTAIN ANIMALS, BIRDS, FISH, AND POULTRY, AND CERTAIN ANIMAL, BIRD, AND POULTRY PRODUCTS; REQUIREMENTS FOR MEANS OF CONVEYANCE AND SHIPPING CONTAINERS 1. The authority citation for part 93 continues to read as follows: Authority: 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4. 2. Section 93.301 is amended as follows: a. In paragraph (c)(2)(vii), by removing the words “paragraph (f)” and adding the words “paragraph (f)(1)” in their place, and by removing the word “and” at the end of the sentence. b. By redesignating paragraph (c)(2)(viii) as paragraph (c)(2)(ix) and adding a new paragraph (c)(2)(viii) to read as set forth below. c. In footnote 6, by removing the words “Jefatura de Cria Caballar Registro Matricula for Spain” and adding the words “Asociacion National de Criadores de Caballos de Pura Raza Espanola for Spain” in their place. d. By revising paragraph
(f)to read as set forth below. § 93.301 General prohibitions; exceptions.
(c)* * *
(2)* * *
(viii)Horses over 731 days of age imported into the United States for noncompetitive public exhibition and entertainment purposes if the horses meet the requirements of paragraph (f)(2) of this section; and
(f)*Special provisions for temporary importation for competition or entertainment purposes.*
(1)Horses over 731 days of age may be imported into the United States for no more than 90 days to compete in specified events provided that the conditions in paragraphs (f)(3) through (f)(12) of this section are met.
(2)Horses over 731 days of age may be temporarily imported into the United States solely for noncompetitive public exhibition and entertainment purposes provided that the conditions in paragraphs (f)(3) through (f)(12) of this section are met.
(3)At the time of importation, each horse must be accompanied by an import permit in accordance with § 93.304 and a health certificate issued in accordance with § 93.314. For horses imported in accordance with paragraph (f)(2) of this section, the health certificate must also certify that cultures negative for CEM were obtained from sets of specimens collected on three separate occasions within a 7-day period from the mucosal surfaces of the clitoral fossa and the clitoral sinuses of any female horses and from the surfaces of the prepuce, the urethral sinus, and the fossa glandis, including the diverticulum of the fossa glandis, of any male horses. For both female and male horses, the sets of specimens must be collected on days 1, 4, and 7 of the 7-day period, and the last of these sets of specimens must be collected within 30 days of exportation. All specimens required by this paragraph must be collected by a licensed veterinarian who either is, or is acting in the presence of, the veterinarian signing the certificate.
(4)Following the horse's arrival in the United States:
(i)A horse imported in accordance with paragraph (f)(1) of this section may remain in the United States for not more than 90 days, except as provided in paragraph (f)(9) of this section.
(ii)A horse imported in accordance with paragraph (f)(2) of this section may remain in the United States indefinitely, except as provided in paragraph (f)(9) of this section, as long as the conditions of paragraphs (f)(3) through (f)(12) of this section are met and the horse's owner or importer applies for and obtains from APHIS an import permit, as provided for in § 93.304, each year prior to the anniversary date of the horse's arrival in the United States.
(5)While the horse is in the United States, the following conditions must be met:
(i)A horse imported in accordance with paragraph (f)(2) of this section:
(A)Must not be entered in competitions.
(B)Must be regularly used in performances or exhibitions, unless sick or injured. A horse that is no longer performing or being exhibited must be exported or made eligible for permanent entry in accordance with paragraph (f)(9) of this section.
(C)Must be kept with the other horses listed on the import permit, unless otherwise approved by an APHIS representative.
(ii)Except as provided in paragraph (f)(5)(viii) of this section, the horse must be moved according to the itinerary and methods of transport specified in the import permit provided for in § 93.304.
(iii)The horse must be monitored by an accredited veterinarian or APHIS representative to ensure that the provisions of paragraphs (f)(5)(ii), (f)(5)(vi), and (f)(5)(vii) of this section are met. If the monitoring is performed by an accredited veterinarian, the Veterinarian in Charge will ensure that the accredited veterinarian is familiar with the requirements of this section and spot checks will be conducted by an APHIS representative to ensure that the requirements of this section are being met. If an APHIS representative finds that requirements are not being met, the Administrator may require that all remaining monitoring be conducted by APHIS representatives to ensure compliance.
(iv)Except when in transit, the horse must be kept on a premises that has been approved by an APHIS representative. For horses imported in accordance with paragraph (f)(1) of this section, such approval may be oral or in writing. If the approval is oral, it will be confirmed in writing by the Administrator as soon as circumstances permit. For horses imported in accordance with paragraph (f)(2) of this section, the approval will be in writing. To receive approval, the premises:
(A)Must not be a breeding premises; and
(B)Must be or contain a building in which the horse can be kept in a stall that is separated from other stalls that contain horses that are not listed on the import permit, either by an empty stall, by an open area across which horses cannot touch each other, or by a solid wall that is at least 8 feet (2.4 meters) high.
(v)While in transit, the horse must be moved in either an aircraft or a sealed van or trailer. If the horse is moved in a sealed van or trailer, the seal may be broken only by an APHIS representative at the horse's destination, except in situations where the horse's life is in danger.
(vi)Except when actually competing, performing, or being exhibited or exercised, the horse must be kept in a pasture approved by APHIS or in a stall that is separated from other stalls containing horses that are not listed on the import permit, either by an empty stall, by an open area across which horses cannot touch each other, or by a solid wall that is at least 8 feet (2.4 meters) high.
(vii)The horse may not be used for breeding purposes (including artificial insemination or semen collection) and may not have any other sexual contact with other horses. The horse may not undergo any genital examinations, except that a horse imported in accordance with paragraph (f)(2) of this section may undergo genital examinations for diagnosis or treatment of a medical condition with the prior approval of an APHIS representative.
(viii)The horse may be moved for diagnosis or treatment of a medical condition with the prior approval of an APHIS representative.
(ix)After the horse is transported anywhere in the United States, any vehicle in which the horse was transported must be cleaned and disinfected in the presence of an APHIS representative, according to the procedures specified in §§ 71.7 through 71.12 of this chapter, before any other horse is transported in the vehicle.
(x)The cleaning and disinfection specified in paragraph (f)(5)(ix) of this section must be completed before the vehicle is moved from the place where the horse is unloaded. In those cases where the facilities or equipment for cleaning and disinfection are inadequate at the place where the horse is unloaded, the Administrator may allow the vehicle to be moved to another location for cleaning and disinfection when the move will not pose a disease risk to other horses in the United States.
(xi)The owner or importer of the horse must comply with any other provisions of this part applicable to him or her.
(6)If the owner or importer wishes to change the horse's itinerary or the methods by which the horse is transported from that which he or she specified in the application for the import permit, the owner or importer must make the request for change in writing to the Administrator. Requests for change must be submitted to APHIS no less than 15 days before the proposed date of the change. Requests should be sent to the Administrator, c/o Import-Export Animals Staff, VS, APHIS, 4700 River Road Unit 39, Riverdale, MD 20737-1231. The change in itinerary or method of transport may not be made without the written approval of the Administrator, who may grant the request for change when he or she determines that granting the request will not endanger other horses in the United States and that sufficient APHIS personnel are available to provide the services required by the owner or importer.
(7)The Administrator may cancel, orally or in writing, the import permit provided for under § 93.304 whenever the Administrator finds that the owner or importer of the horse has not complied with the provisions of paragraphs (f)(3) through (f)(6) of this section or any conditions imposed under those provisions. If the cancellation is oral, the Administrator will confirm the cancellation and the reasons for the cancellation in writing as soon as circumstances permit. Any person whose import permit is cancelled may appeal the decision in writing to the Administrator within 10 days after receiving oral or written notification of the cancellation, whichever is earlier. If the appeal is sent by mail, it must be postmarked within 10 days after the owner or importer receives oral or written notification of the cancellation, whichever is earlier. The appeal must include all of the facts and reasons upon which the person relies to show that the import permit was wrongfully cancelled. The Administrator will grant or deny the appeal in writing as promptly as circumstances permit, stating the reason for his or her decision. If there is a conflict as to any material fact, a hearing will be held to resolve the conflict. Rules of practice concerning the hearing will be adopted by the Administrator.
(8)Except in those cases where an appeal is in process, any person whose import permit is cancelled must move the horse identified in the import permit out of the United States within 10 days after receiving oral or written notification of cancellation, whichever is earlier. The horse is not permitted to enter competition, perform, or be exhibited from the date the owner or importer receives the notice of cancellation until the horse is moved out of the United States or until resolution of an appeal in favor of the owner or importer. Except when being exercised, the horse must be kept, at the expense of the owner or importer, in a stall on the premises where the horse is located when the notice of cancellation is received or, if the horse is in transit when the notice of cancellation is received, on the premises where it is next scheduled to compete, perform, or be exhibited according to the import permit. The stall in which the horse is kept must be separated from other stalls containing horses that are not listed on the import permit, either by an empty stall, by an open area across which horses cannot touch each other, or a by solid wall that is at least 8 feet (2.4 meters) high. In cases where the owners of the above specified premises do not permit the horse to be kept on those premises, or when the Administrator determines that keeping the horse on the above specified premises will pose a disease risk to horses in the United States, the horse must be kept, at the expense of the owner or importer, on an alternative premises approved by the Administrator.
(9)Stallions or mares over 731 days of age that are imported in accordance with paragraphs (f)(1) or (f)(2) of this section may be eligible to remain in the United States if the following is completed:
(i)Following completion of the itinerary specified in the import permit provided for in § 93.304, the horse's owner or importer applies for and receives a new import permit that specifies that the stallion or mare will be moved to an approved State listed in paragraph (h)(6) or (h)(7) of this section; and
(ii)The stallion or mare is transported in a sealed vehicle that has been cleaned and disinfected to an approved facility in an approved State where it is quarantined under State or Federal supervision until the stallion or mare has met the testing and treatment requirements of paragraph (e)(3) or (e)(5) of this section.
(10)All costs and charges associated with the supervision and maintenance of a horse imported under paragraphs (f)(1) or (f)(2) of this section will be borne by the horse's owner or importer. The costs associated with the supervision and maintenance of the horse by an APHIS representative at his or her usual places of duty will be reimbursed by the horse's owner or importer through user fees payable under part 130 of this chapter.
(11)In the event that an APHIS representative must be temporarily detailed from his or her usual place of duty in connection with the supervision and maintenance of a horse imported under this paragraph (f), the owner or importer of the horse must execute a trust fund agreement with APHIS to reimburse all expenses (including travel costs, salary, per diem or subsistence, administrative expenses, and incidental expenses) incurred by the Department in connection with the temporary detail. Under the trust fund agreement, the horse's owner or importer must deposit with APHIS an amount equal to the estimated cost, as determined by APHIS, for the APHIS representative to inspect the premises at which the horse will compete, perform, or be exhibited; to conduct the monitoring required by paragraph (f)(5)(iii) of this section; and to supervise the cleaning and disinfection required by paragraph (f)(5)(ix) of this section. The estimated costs will be based on the following factors:
(i)Number of hours needed for an APHIS representative to conduct the required inspection and monitoring;
(ii)For services provided during regular business hours (8 a.m. to 4:30 p.m., Monday through Saturday, except holidays), the average salary, per hour, for an APHIS representative;
(iii)For services provided outside regular business hours, the applicable rate for overtime, night differential, or Sunday or holiday pay, based on the average salary, per hour, for an APHIS representative;
(iv)Number of miles from the premises at which the horse competes, performs, or is exhibited to the APHIS office or facility that is monitoring the activities;
(v)Government rate per mile for automobile travel or, if appropriate, cost of other means of transportation between the premises at which the horse competes, performs, or is exhibited and the APHIS office or facility;
(vi)Number of trips between the premises at which the horse competes, performs, or is exhibited and the APHIS office or facility that APHIS representatives are required to make in order to conduct the required inspection and monitoring;
(vii)Number of days the APHIS representative conducting the inspection and monitoring must be in “travel status;”
(viii)Applicable government per diem rate; and
(ix)Cost of related administrative support services.
(12)If a trust fund agreement with APHIS has been executed by the owner or importer of a horse in accordance with paragraph (f)(11) of this section and APHIS determines, during the horse's stay in the United States, that the amount deposited will be insufficient to cover the services APHIS is scheduled to provide during the remainder of the horse's stay, APHIS will issue to the horse's owner or importer a bill to restore the deposited amount to a level sufficient to cover the estimated cost to APHIS for the remainder of the horse's stay in the United States. The horse's owner or importer must pay the amount billed within 14 days after receiving the bill. If the bill is not paid within 14 days after its receipt, APHIS will cease to perform the services provided for in paragraph (f)(5) of this section until the bill is paid. The Administrator will inform the owner or importer of the cessation of services orally or in writing. If the notice of cessation is oral, the Administrator will confirm, in writing, the notice of cessation and the reason for the cessation of services as soon as circumstances permit. In such a case, the horse must be kept, at the expense of the owner or importer and until the bill is paid, in a stall either on the premises at which the horse is located when the notice of cessation of services is received or, if the horse is in transit when the notice of cessation of services is received, on the premises at which it is next scheduled to compete, perform, or be exhibited according to the import permit. The stall in which the horse is kept must be separated from other stalls containing horses that are not listed on the import permit either by an empty stall, an open area across which horses cannot touch each other, or a solid wall that is at least 8 feet (2.4 meters) high. In cases where the owners of the premises where the horse would be kept following a cessation of services do not permit the horse to be kept on those premises, or when the Administrator determines that keeping the horse on the premises will pose a disease risk to other horses in the United States, the horse must be kept, at the expense of the owner or importer, on an alternative premises approved by the Administrator. Until the bill is paid, the horse is not permitted to enter competition, perform, or be exhibited. Any amount deposited in excess of the costs to APHIS to provide the required services will be refunded to the horse's owner or importer. 3. Section 93.304 is amended as follows: a. In paragraph (a)(1)(ii), by removing the citation “§ 93.301(f)” and adding the citation “§ 93.301(f)(1)” in its place. b. By redesignating paragraph (a)(1)(iii) as paragraph (a)(1)(iv) and adding a new paragraph (a)(1)(iii) to read as set forth below. § 93.304 Import permits for horses from regions affected with CEM and for horse specimens for diagnostic purposes; reservation fees for space at quarantine facilities maintained by APHIS.
(a)*Application for permit; reservation required.*
(1)* * *
(iii)Horses intended for importation under § 93.301(f)(2) must meet the permit requirements of paragraph (a)(1)(i) of this section. Additionally, for horses intended for importation under § 93.301(f)(2), the horse's owner or importer must include the following information with the application for permit that is required by paragraph (a)(1)(i) of this section:
(A)The individual identifying information required in paragraph (a)(1)(i) of this section for all horses to be imported.
(B)The permanent electronic identification of each horse to be imported, if applicable. In the event that a horse has permanent electronic identification, the horse must be accompanied by a compatible reader.
(C)Photographs (head and lateral views) that are sufficient to identify each horse on an electronic medium approved by APHIS.
(D)The proposed total length of stay in the United States.
(E)A description of the shows or events in which the horse will perform while in the United States.
(F)The names, dates, and locations of the venues in which the horse will perform while in the United States.
(G)The names and locations of the premises on which the horse will be kept while in the United States, and the dates the horse will be kept on each premises.
(H)The methods and routes by which the horse will be transported while in the United States.
(I)A written plan for handling sick or injured horses that includes: ( *1* ) The name, address, and phone number of each accredited veterinarian who will provide veterinary services in the United States; ( *2* ) The name, address, and phone number of medical facilities to be used to diagnose or treat sick or injured horses while in the United States; and ( *3* ) A plan to return sick or injured horses to performance condition.
(J)An application for a trust fund or escrow account agreement with APHIS in accordance with § 93.301(f)(11). Done in Washington, DC, this 27th day of July 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-14994 Filed 8-1-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28854; Directorate Identifier 2007-NM-109-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 777-200, -200LR, -300, and -300ER Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for all Boeing Model 777-200, -200LR, -300, and -300ER series airplanes. This proposed AD would require doing initial and repetitive inspections for cracking of the elevator actuator fittings, and replacing any cracked fitting with a new fitting. This proposed AD results from a report that a cracked left elevator actuator fitting was found on a Model 777 airplane. We are proposing this AD to detect and correct a cracked actuator fitting, which could detach from the elevator and lead to an unrestrained elevator and an unacceptable flutter condition, which could result in loss of airplane control. DATES: We must receive comments on this proposed AD by September 17, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • DOT Docket Web site: Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • Government-wide rulemaking Web site: Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • Fax:
(202)493-2251. • Hand Delivery: Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Gary Oltman, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)917-6443; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-28854; Directorate Identifier 2007-NM-109-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* , or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion We have received a report indicating that a cracked left elevator actuator fitting was found on a Model 777 airplane with 17,346 total flight hours and 14,043 total flight cycles. The crack extended through the lower inboard flange of the fitting and into the vertical flange. Analysis by Boeing indicates that this crack resulted from fatigue due to higher than anticipated stress levels in the fitting flanges. Cracked elevator actuator fittings could lack adequate residual strength to react to design flight loads and become detached from the elevator. This condition, if not corrected, could allow a cracked actuator fitting to detach from the elevator and lead to an unrestrained elevator and an unacceptable flutter condition, which could result in loss of airplane control. Relevant Service Information We have reviewed Boeing Alert Service Bulletin 777-55A0015, dated April 19, 2007. The service bulletin describes procedures for doing an initial dye penetrant or high-frequency eddy current
(HFEC)inspection to detect cracking of the elevator actuator fittings; repetitive dye penetrant, HFEC, or detailed inspections of the fittings thereafter; and replacing any cracked fitting with a new fitting having the same part number or an approved optional part number. Compliance times for the initial inspections, depending upon airplane condition, are: • For airplanes having 14,000 total flight-cycles or more as of the date on the service bulletin, within 90 days after the date on the service bulletin; • For airplanes having 10,000 total flight-cycles or more, but less than 14,000 total flight-cycles, as of the date on the service bulletin, within 12 months after the date on the service bulletin or within 90 days after the airplane reaches 14,000 total flight-cycles, whichever occurs first; or • For airplanes having less than 10,000 total flight-cycles as of the date on the service bulletin, before the accumulation of 10,000 total flight cycles or within 12 months after the date on the service bulletin, whichever occurs first. The next inspection, depending upon the type of initial inspection, is to be done at 1,000 or 1,200 flight cycles after the initial inspection, and repetitive inspections thereafter are to be done at intervals not to exceed 350 to 1,200 flight cycles. Any fitting found cracked during any inspection must be replaced before further flight. Any replacement fitting must receive an initial inspection before the accumulation of 10,000 total flight cycles after the replacement date, and repetitive inspections thereafter as described in this paragraph. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Interim Action We consider this proposed AD interim action. The manufacturer is currently developing a modification that will address the unsafe condition identified in this AD. Once this modification is developed, approved, and available, we might consider additional rulemaking. Costs of Compliance There are about 619 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 138 airplanes of U.S. registry. The proposed inspections would take about 4 work hours per airplane, per inspection cycle, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $44,160, or $320 per airplane, per inspection cycle. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-28854; Directorate Identifier 2007-NM-109-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by September 17, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to all Boeing Model 777-200, -200LR, -300, and -300ER series airplanes, certificated in any category. Unsafe Condition
(d)This AD results from a report that a cracked left elevator actuator fitting was found on a Model 777 airplane. We are issuing this AD to detect and correct a cracked actuator fitting, which could detach from the elevator and lead to an unrestrained elevator and an unacceptable flutter condition, which could result in loss of airplane control. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Inspections
(f)At the applicable time specified in paragraph 1.E. “Compliance” of Boeing Alert Service Bulletin 777-55A0015, dated April 19, 2007, do an initial dye penetrant or high-frequency eddy current
(HFEC)inspection for cracking of the elevator actuator fittings, and, thereafter, do repetitive dye penetrant, HFEC, or detailed inspections at the applicable times specified in paragraph 1.E. “Compliance.” Before further flight, replace any fitting found to be cracked during any inspection required by this AD with a new fitting having the same part number, or an optional part number as identified in the service bulletin. Thereafter, do initial and repetitive inspections of the replacement fitting as described in paragraph 1.E. of the service bulletin. Do all inspections and actions described in this paragraph in accordance with the Accomplishment Instructions of the alert service bulletin; except, where the service bulletin specifies a compliance time after the date on the service bulletin, this AD requires compliance within the specified compliance time after the effective date of this AD. Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(3)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD. Issued in Renton, Washington, on July 25, 2007. Stephen P. Boyd, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15025 Filed 8-1-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28855; Directorate Identifier 2007-NM-098-AD] RIN 2120-AA64 Airworthiness Directives; EMBRAER Model EMB-120, -120ER, -120FC, -120QC, and -120RT Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive
(AD)for the products listed above. This proposed AD results from mandatory continuing airworthiness information
(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: Icing tunnel tests on an EMB-120 wing section, conducted under a joint Embraer-NASA-(National Aeronautics and Space Administration) FAA-CTA (Centro Técnico Aeroespacial) research program well after the EMB-120( ) was type-certificated, have shown that stick shaker to stick pusher speed margins may drop below the minimum required by the applicable regulations in certain icing conditions. Although flight tests have shown that the aircraft handling qualities are not adversely affected, these reduced speed margins may significantly increase crew workload in certain flight phases. The unsafe condition is reduced ability of the flightcrew to maintain the safe flight and landing of the airplane. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by September 4, 2007. ADDRESSES: You may send comments by any of the following methods: • DOT Docket Web Site: Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • Fax:
(202)493-2251. • Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • Hand Delivery: Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov* ; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received and other information. The street address for the Docket Operations office (telephone
(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Dan Rodina, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)227-2125; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Streamlined Issuance of AD The FAA is implementing a new process for streamlining the issuance of ADs related to MCAI. This streamlined process will allow us to adopt MCAI safety requirements in a more efficient manner and will reduce safety risks to the public. This process continues to follow all FAA AD issuance processes to meet legal, economic, Administrative Procedure Act, and **Federal Register** requirements. We also continue to meet our technical decision-making responsibilities to identify and correct unsafe conditions on U.S.-certificated products. This proposed AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The proposed AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-28855; Directorate Identifier 2007-NM-098-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion The Agência Nacional de Aviaçãao Civil (ANAC), which is the airworthiness authority for Brazil, has issued Brazilian Airworthiness Directive 2007-03-03, effective April 10, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: Icing tunnel tests on an EMB-120 wing section, conducted under a joint Embraer-NASA—(National Aeronautics and Space Administration) FAA-CTA (Centro Técnico Aeroespacial) research program well after the EMB-120( ) was type-certificated, have shown that stick shaker to stick pusher speed margins may drop below the minimum required by the applicable regulations in certain icing conditions. Although flight tests have shown that the aircraft handling qualities are not adversely affected, these reduced speed margins may significantly increase crew workload in certain flight phases. The unsafe condition is reduced ability of the flightcrew to maintain the safe flight and landing of the airplane. The corrective action includes modification of certain electrical wiring and installation of a new Stall Warning Computer. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information EMBRAER has issued Service Bulletins 120-27-0091, Change 02, dated September 29, 2003; and 120-27-0092, Revision 01, dated December 29, 2006. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of This Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 107 products of U.S. registry. We also estimate that it would take about 58 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $80 per work-hour. Required parts would cost up to $2,000 per product, depending on airplane configuration. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be up to $710,480, or $6,640 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **Empresa Brasileira de Aeronautica S.A. (EMBRAER):** Docket No. FAA-2007-28855; Directorate Identifier 2007-NM-098-AD. Comments Due Date
(a)We must receive comments by September 4, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to all EMBRAER Model EMB-120, -120ER, -120FC, -120QC, and -120RT airplanes; certificated in any category. Subject
(d)Air Transport Association
(ATA)of America Code 27: Flight controls. Reason
(e)The mandatory continuing airworthiness information
(MCAI)states: Icing tunnel tests on an EMB-120 wing section, conducted under a joint Embraer-NASA—(National Aeronautics and Space Administration) FAA-CTA (Centro Técnico Aeroespacial) research program well after the EMB-120( ) was type-certificated, have shown that stick shaker to stick pusher speed margins may drop below the minimum required by the applicable regulations in certain icing conditions. Although flight tests have shown that the aircraft handling qualities are not adversely affected, these reduced speed margins may significantly increase crew workload in certain flight phases. The unsafe condition is reduced ability of the flightcrew to maintain the safe flight and landing of the airplane. The corrective action includes modification of certain electrical wiring and installation of a new Stall Warning Computer. Actions and Compliance
(f)Within 36 months after the effective date of this AD, unless already done, do the following actions.
(1)Replace the current Stall Warning Computers with new improved ones in accordance with detailed instructions and procedures described in the Embraer Service Bulletin 120-27-0092, Revision 01, dated December 29, 2006.
(2)Before installing the improved Stall Warning Computers, accomplish the detailed instructions and procedures described in the Embraer Service Bulletin 120-27-0091, Change 02, dated September 29, 2003.
(3)As of 36 months after the effective date of this AD, no person may install a Stall Warning Computer; part number C-81806-1 or -2, Mod. A, or C-81806-3, on any airplane. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows: No differences. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*Alternative Methods of Compliance (AMOCs):* The Manager, International Branch, ANM-116, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Dan Rodina, Aerospace Engineer, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-2125; fax
(425)227-1149. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information
(h)Refer to MCAI Brazilian Airworthiness Directive 2007-03-03, effective April 10, 2007; and Embraer Service Bulletins 120-27-0091, Change 02, dated September 29, 2003; and 120-27-0092, Revision 01, dated December 29, 2006; for related information. Issued in Renton, Washington, on July 25, 2007. Stephen P. Boyd, Acting Manager,Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15026 Filed 8-1-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 385 [Docket No. RM07-16-000] Filing Via the Internet July 23, 2007. AGENCY: Federal Energy Regulatory Commission, Department of Energy. ACTION: Notice of proposed rulemaking. SUMMARY: The Commission is proposing to amend its regulations to implement the latest version of its eFiling system. The upgraded system will permit most documents filed with the Commission to be submitted via the Internet. This will include, among other things, large documents such as maps and some confidential documents. DATES: Comments are due October 1, 2007. ADDRESSES: You may submit comments, identified by docket number by any of the following methods: • *Agency Web Site: http://ferc.gov/docs-filing/efiling.asp* . Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. • *Mail/Hand Delivery:* Commenters unable to file comments electronically must mail or hand deliver an original and 14 copies of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street, NE., Washington, DC 20426. *Instructions:* For detailed instructions on submitting comments and additional information on the rulemaking process, see the Comment Procedures Section of this document. FOR FURTHER INFORMATION CONTACT: Wilbur Miller, 888 First Street, NE., Washington, DC 20426, telephone:
(202)502-8953, e-mail: *wtmiller@ferc.gov* . SUPPLEMENTARY INFORMATION: I. Background 1. On September 21, 2000, the Commission issued Order No. 619, which implemented the use of the Internet for submission of documents to the Commission for filing. 1 Such submissions were limited to categories of documents specified by the Secretary of the Commission, with the intention of gradually expanding the range of eligible documents. 2 The eFiling system plays an important role in the Commission's efforts to comply with the Government Paperwork Elimination Act, which requires that agencies provide the option to submit information electronically, when practicable, as a substitute for paper. 3 The Commission also has established a system of electronic registration, or eRegistration, which is required for users of its eFiling system and other specified activities. 4 Filing via the Internet is optional for eligible documents. 5 The eFiling system now is receiving approximately one third of all documents filed at the Commission. The system is accessible through the Commission's Web site at *http://www.ferc.gov/docs-filing/efiling.asp* . 1 *Electronic Filing of Documents* , Order No. 619, 65 FR 57088 (Sept. 21, 2000), FERC Stats. & Regs. ¶ 31,107 (2000). 2 *See* Rule 2003(c) of the Commission's Rules of Practice and Procedure, 18 CFR 385.2003(c). 3 Pub. L. 105-277, Sec. 1702-1704 (1998); *see* OMB Circular A-130 Para 8.a.1(k). 4 18 CFR 390.1 & 390.2. 5 Rule 2001(a) of the Commission's Rules of Practice and Procedure, 18 CFR 385.2001(a). 2. The Commission is proposing to implement, in late 2007, eFiling 7.0, which will significantly expand the capabilities of the system. As part of this implementation, the Commission proposes to expand the range of documents that may be filed via the Internet to include all filings, with specified exceptions. Most notably, it will be possible for regulated entities to make complex filings in their entireties in electronic format. 6 The Commission also proposes to implement other changes and technical enhancements, and is seeking comments on the advisability of these changes and the best methods of implementing them. 6 The process for making tariff filings by the electric, gas, and oil industries is being addressed in *Electronic Tariff Filings* , Docket No. RM01-5-000. *See Electronic Tariff Filings* , Notice of Proposed Rulemaking, 69 FR 43929 (July 23, 2004), FERC Stats. & Regs. ¶ 32,575 (July 8, 2004); *Notice of Additional Proposals and Procedures* , 70 FR 40941 (July 15, 2005), FERC Stats. & Regs. ¶ 35,551 (July 6, 2005). The Commission allows Open Access Transmission Tariffs (OATTs) and revisions to be eFiled as described at *http://www.ferc.gov/help/filing-guide/file-OATT.asp* . II. Discussion A. Eligible Documents 3. Under the Commission's regulations, only “qualified documents” may be filed via the Internet, and the Secretary is authorized to specify which documents are qualified. 7 A list of qualified documents is published on the Commission's web site. Currently, there are over forty categories of qualified documents. 8 The Secretary also is authorized to issue filing instructions. 9 7 Rule 2003(c), 18 CFR 385.2003(c). 8 *See http://www.ferc.gov/docs-filing/efiling/docs-efiled.asp* . 9 Rule 2003(c)(1)(ii), 18 CFR 385.2003(c)(1)(ii); *see http://www.ferc.gov/docs-filing/efiling/user-guide.asp* . 4. To implement eFiling 7.0, the Commission proposes to revise its regulations to permit users to submit via the Internet all documents filed in Commission proceedings pursuant to Chapter I of Title 18 of the Code of Federal Regulations, with specified exceptions. As before, the Secretary will specify the documents that may be submitted to the eFiling system, but now the Secretary would list exceptions rather than eligible documents. The Secretary would continue to issue filing instructions for allowable file formats, electronic document formats and electronic filings having multiple components. However, where specific regulations require that a filing include particular content, those regulations will continue to apply. Similarly, where specific regulations or other instructions contain requirements applicable to electronic documents, such as allowable file formats, 10 those instructions also will continue to apply. The Commission invites comment on the proposals described below and generally on which documents should be accepted through the eFiling system. 10 *E.g., http://www.ferc.gov/industries/electric/gen-info/qual-fac/completing.asp* (Form 556 for Qualifying Facilities). 5. The Commission proposes to revise Rule 2003(c) of the its Rules of Practice and Procedure 11 to provide specifically that all documents may be filed via the Internet unless excluded by the Secretary. It is not necessary, however, to revise the regulations to allow the Secretary to issue instructions regarding allowable file formats and other aspects of eFiling, as that authority is already included in Rule 2003(c)(2). Although they will not be the subject of revisions to the regulations, this notice of proposed rulemaking seeks comment on issues such as appropriate file formats and the filing of paper copies of oversized documents. Matters such as file formats and filing instructions would be contained in the instructions to be issued by the Secretary rather than being covered by regulations. 11 18 CFR 385.2003(c). 6. There are several types of filings that the Commission anticipates will not be made initially through eFiling 7.0. Electronic filing of tariffs, tariff revisions and rate change applications is the subject of a separate rulemaking. 12 Certain forms will not be accepted through eFiling. For example, the following forms are currently, and would continue to be, submitted through eForms: FERC Form No.1, FERC Form No. 2, FERC Form No. 2-A, FERC Form No. 3-Q, FERC Form No. 6, FERC Form No. 6-Q, Form 60, Form 714, and Electric Quarterly Reports. 13 Requests for extensions of time to file these forms, however, would be submitted through eFiling. 12 *See Electronic Tariff Filings* , Docket No. RM01-5-000, FERC Statutes and Regulations ¶ 35,551 (2005). 13 FERC Form 1-F is currently not included in eForms, so it could be efiled. The same is true with OATTs, as explained in footnote 6. 7. Finally, the Commission proposes to begin accepting, through eFiling, documents for which participants request confidential treatment pursuant to the Commission's regulations, 14 including critical energy infrastructure information (CEII). 15 Although the Commission proposes to begin accepting confidential documents with the eFiling 7.0 release, it does not propose to accept documents that are subject to protective order. There likely will be separate file uploads for Public, Confidential, and CEII files. Filers also will be able to revise security designations—for example, move a file from Confidential to Public. Filers will be able to load multiple files under each security class or they may upload .zip files containing numerous files if the files all have the same security class. The Commission will create separate accession numbers for the files uploaded under each security class and pass the files under each accession number to eLibrary with the appropriate security designation. This mirrors the current process for paper filings containing non-public material. 14 18 CFR 388.112. 15 18 CFR 388.113. 8. In some cases, the Commission will require paper copies of filings although it will also be possible to submit the documents through eFiling 7.0. This paper back-up will apply most notably to oversized documents such as maps, diagrams and drawings. Due to the size of standard monitors and other hardware and software limitations, it is impractical at this time for Commission staff to review such documents in electronic form. The Commission therefore anticipates that it will continue to need paper copies of most documents that are larger than 8.5 x 11 inches. As the Commission upgrades its resources, it expects to be able to reduce or eliminate the requirement for paper copies. The Commission also is considering whether to require paper copies of long documents, such as those exceeding 500 pages. The instructions posted by the Secretary will include directions specifying whether, and how many, paper copies of electronically filed documents are required. Appendix A contains examples of some documents that participants will be able to file via the Internet, but for which the Commission will also require paper copies. B. File Formats 9. The acceptance through eFiling 7.0 of documents that are not in standard word processing formats will present some issues involving file formats. As noted above, the Commission has issued instructions regarding file formats for specific documents in some regulations. In addition, staff has provided instructions in specific instances. Those requirements will continue to apply. The Secretary will specify formats in filing instructions that will apply in all other cases. The need for specific formatting may arise in connection with oversized documents, spreadsheets and other documents that contain data, to ensure that the documents will be in formats that users can reasonably be expected to find accessible. 10. The Secretary has already issued instructions specifying acceptable file formats for filings submitted on CD-ROM, DVD and other electronic media. These can be found at *http://www.ferc.gov/help/submission-guide/electronic-media/acceptable.asp* . The Commission anticipates that these instructions will be updated concurrent with eFiling 7.0 and will apply to documents submitted through the eFiling system via the Internet. The Commission is required to establish standards for the creation, use, preservation, and disposition of electronic records to retain them in a usable format until their authorized disposition dates. The Commission therefore invites comment on the current instructions, particularly on the question whether they provide adequate accessibility and accuracy. Based on guidance from the National Archives and Records Administration (NARA), the Commission is considering accepting exclusively waveform audio (.wav) format files for audio content and either audio-video interleave (.avi) or quicktime (.mov) format files for video content except where specific regulations contain requirements for other file formats. Also, the Commission intends to enforce, to the extent it is technically able to do so, the instructions issued with the eFiling 7.0 system rather than rely on voluntary compliance. We also plan to continue to improve our technical ability to enforce the instructions. For example, when the Commission has a technical solution for reliably and rapidly detecting a password-protected document, it will prevent the uploading of that document through eFiling. 11. In some instances, the Commission may issue more detailed instructions requiring particular document formats in connection with specific types of filings. For example, the Commission's regulations set out required exhibits for applications under section 7 of the Natural Gas Act, 16 such as articles of incorporation and a statement showing state authorization to do business, 17 as well as various types of data. 18 The Commission anticipates that the Secretary will issue instructions specifying required formats for many exhibits that must be included in section 7 applications. For documents such as Articles of Incorporation, it is likely that PDF versions would be required. For documents containing data, the Secretary likely will specify that they shall be filed in native spreadsheet application. 19 16 18 CFR 157.14. 17 18 CFR 157.14(1)-(2) (Exhibits A and B). 18 *E.g.* , 18 CFR 157.14(11) (Exhibit I—Market Data),
(13)(Exhibit K—Cost of Facilities). 19 The Commission anticipates that spreadsheet files in native application would be required for Exhibit K and the data portions of Exhibits I, L, and N through P of Section 157.14. 12. Another formatting issue concerns the presentation of filed documents in eLibrary. In the original conception of e-Library, the Commission would convert filings in native application to PDF and to Text. 20 This is intended to make filings accessible to the public in an open format without the need for purchasing proprietary software. As eFiling has increased and more complex documents have been filed, the conversion tools used by the Commission have not always been able to produce accurate renditions of filed documents. The degree of reliability decreases as the complexity of the electronic files increases and the costs of staff intervention to ensure reliability are prohibitive. For example, electronic spread sheets commonly contain multiple worksheets, with each worksheet containing many potential paper pages of data in many different formats. The conversion tools however frequently convert only the first worksheet. 20 *See* Electronic Filing of the Application for Authorization for the Issuance of Securities or the Assumption of Liabilities, 70 FR 35372 (June 20, 2005), FERC Stats. & Regs. Regulations Preambles 2001-2005 ¶ 31,188 at p. 6 (May 27, 2005); Electronic Filing of Documents, 65 FR 57088 (September 21, 2000), FERC Stats. & Regs. Regulations Preambles July 1996-December 2000 ¶ 31,107, at 31,820 (September 14, 2000). 13. The Commission therefore is considering whether to discontinue creating PDF and Text versions of submitted documents and post only the electronic files as filed with the Commission, although it intends to continue providing PDF versions of its own issuances. We are requesting comments on the effect this would have on public accessibility to the files. Discontinuing the conversion to open formats could require users to purchase proprietary software. There would also be some inconvenience to participants in Commission proceedings when they are citing to page numbers, as the vast majority of filers do not use paragraph numbers. The Commission requests comments on this proposal. 14. Should the Commission discontinue the practice of creating PDF versions of submissions, it could implement several measures. It could require that all word processing filings be made in open file formats, such as text, html, rtf, or possibly PDF. Open source file types would be the most easily accessible to all users. Alternatively, the Commission could permit filings in open file formats as well as in certain Microsoft Office formats. The Commission notes that Microsoft provides a free viewer that can be downloaded and used to view these files. Alternatively, the Commission could require that documents created with proprietary software be filed in the proprietary software along with an open source format to ensure that all viewers are able to download and read that document. Such filings would duplicate the current Commission practice of scanning all filings to create PDF formats. 15. Spreadsheets may be even more complicated because spreadsheet conversions do not retain formulas and may be difficult for the public to use. Thus, while spreadsheets need to be filed in native application, the Commission could require the filer to provide a PDF or open source file that could be used, at least, to obtain the numbers presented in the spreadsheet. The Commission invites comment on these alternatives, as well as on the possibility of discontinuing the Commission's practice of creating PDF and Text versions. 16. As a related issue, the Commission seeks input on whether the Secretary should require that documents created electronically by the filer using word processing software be filed in native applications or print-to-PDF format and not in a scanned format. The Commission has found that many ordinary text documents are being scanned and then converted to PDF formats. This removes the advantages of the native application, most notably the ability to search the text of the document and to copy and paste. It is unclear what advantage is derived from the submission of scanned PDF versions in such instances. 21 The Commission's regulations regarding signatures are intended to allow participants to submit pleadings, sworn statements and the like without the need for physical signatures or notarization, 22 which in turn should eliminate the need for scanned versions to ensure authenticity. The Commission understands that, in some situations, a scanned, non-searchable document is the only reasonable alternative. For instance, a filer may possess an exhibit only in hard copy and therefore cannot submit it in text-searchable form. The Commission would allow for such situations. 21 Many courts prohibit or discourage the filing of scanned PDF documents. *E.g.* , *http://www.txs.uscourts.gov/attorneys/cmecf/dcfaq.htm* ; *http://www.utd.uscourts.gov/documents/utahdraftadminproc.pdf* ; *http://www.med.uscourts.gov/ecf/adminprocedures.htm* . 22 *See* Rule 2005(b)(3) of the Commission's Rules of Practice and Procedure, 18 CFR 385.2005(b)(3) (permitting declaration under oath pursuant to 28 U.S.C. 1746); Rule 2005(c) of the Commission's Rules of Practice and Procedure, 18 CFR 385.2005(c) (in electronic documents, typed characters suffice as signature). C. Documentless Intervention 17. As part of eFiling 7.0, the Commission is proposing to permit documentless intervention. This proposal will permit users to intervene in Commission proceedings via the Internet through an online form or web interface, without actually uploading a document to serve as the motion or notice. 23 This change would not, however, affect in any way the issue of whether a participant is entitled to intervene. The Commission does not propose revising any regulation in connection with this proposed change. Instructions relating to this proposal would be issued by the Secretary. 24 The Commission invites comment on the proposal as described below. 23 *See* Rule 214 of the Commission's Rules of Practice and Procedure, 18 CFR 385.214. 24 24 *See* Rule 2003 of the Commission's Rules of Practice and Procedure, 18 CFR 385.2003 (Secretary's authority for issuing instructions for filings made via the Internet). 18. The current online system allows the entry of only the docket number, the party or parties, and at least one registered contact for each party. If a person who has not eRegistered attempts to file a motion/notice to intervene with the Commission online, the system will prompt the user first to eRegister. 25 Under the current system the user must then attach a document that contains the basis for intervention. The proposed change to online filing of interventions will add a section for the user to enter the basis for intervention directly into the system without attaching a separate document. 26 The system would allow users to submit online only motions/notices of intervention and would require that users file protests, substantive comments and other matters besides the intervention as separate documents using the existing eFiling process. 25 Rule 2010 requires persons eligible to receive service under that rule to eRegister pursuant to 18 C.F.R. 390.1. A person may eRegister through the FERC Online page at *http://www.ferc.gov/docs-filing/ferconline.asp.* 26 *See* 18 CFR 385.214(3)(b), setting forth the acceptable bases for intervention. 19. As a part of the proposed change regarding interventions, the Commission will issue a confirmation via electronic mail for receipt of each motion/notice of intervention that it receives online. This confirmation will identify the information submitted by the filer, including the filing date and time. The Commission will also create a placeholder document in eLibrary that will specify the date and time the filing was submitted, the docket number, the name of the applicant in the docket, the name of the intervening party(ies), contact information for the intervening party, and the basis for intervening. Anyone eSubscribed to the docket will receive an eSubscription e-mail with a link to the “document” that the Commission created and added to eLibrary on behalf of the submitter. This placeholder document will also be stamped with the Commission's standard watermark. The intervening party(ies), as identified, will be added to the service list for the specified docket. Where intervention is late or is opposed on other grounds, the party(ies) attempting to intervene would be removed from the service list if and when intervention was denied. D. Quick Comment 20. As part of eFiling 7.0, the Commission is proposing to create a “quick comment” feature that will operate in a manner similar to documentless intervention by allowing users to submit comments without uploading documents. The Commission believes that this feature will be particularly helpful to individuals who do not participate routinely in Commission proceedings and wish to make brief comments in certain proceedings, such as users impacted by a single project. To submit a documentless, or quick, comment the user will first fill out a form with name and e-mail address, and send this information to FERC. If the e-mail address provided is valid, an e-mail will be sent to the user, which will include a link to the quick comment form. The form will be pre-filled with the contact information captured during the prior step. The user will be required to input a docket number for the proceeding to which the comment will apply. At this time, the Commission anticipates that the quick comment feature will be available only for P (Hydropower Project), PF (Pre-Filing NEPA activities for proposed gas pipelines), and CP (Certificates for Interstate Natural Gas Pipelines) proceedings. After the user has identified the docket(s), he or she would enter a comment in the text box by typing or copying and pasting. Once the information is submitted to the Commission, a PDF document will be created and added to eLibrary, where it will be searchable in the same manner as all other documents in the system. As with documentless intervention, the Commission does not propose to revise any regulation in connection with this proposed change. Instructions relating to quick comment would be issued by the Secretary. 27 The Commission invites comments on this proposal. 27 *See* Rule 2003. E. Filing Deadlines for Documents Submitted Via the Internet 21. In connection with the conversion to eFiling 7.0, the Commission seeks comment on the advisability of extending hours for filing online to allow Internet filers to make submissions until midnight Eastern Standard or Daylight Savings Time. For example, a document filed via the Internet would be considered received by the Commission on the date of filing as long as the last byte of information is received by midnight Eastern Standard or Daylight Savings Time on that date. 28 Currently, both Internet and paper filings must be received by the close of business, *i.e.* , 5 p.m., to be considered to have been filed on that date. Otherwise, the document is considered to have been filed on the next business day. 29 28 *See* Rule 2003(c)(3). 29 Rule 2001(a)(2) of the Commission's Rules of Practice and Procedure, 18 CFR 385.2001(a)(2). 22. Paper filings must be received by close of business because there must be staff available to stamp the date and time of receipt. However, internet submissions have no such limitation because the eFiling system records the date and time of the submission separately from the actual file date. The Commission is interested in receiving public comments on the effect of bifurcated filing deadlines. F. Technical Conference 23. Commission staff may conduct one or more technical conferences to discuss issues relating to electronic file format and electronic document standards. Any conference will be held prior to the deadline for filing comments on this proposal and will be separately noticed. III. Information Collection Statement 24. Office of Management and Budget
(OMB)regulations require OMB to approve certain information collection requirements imposed by agency rule. 30 This Final Rule does not contain any information collection requirements and compliance with the OMB regulations is thus not required. 30 5 CFR 1320.12 IV. Environmental Analysis 25. 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. 31 Issuance of this Final Rule does not represent a major federal action having a significant adverse effect on the quality of the human environment under the Commission's regulations implementing the National Environmental Policy Act. Part 380 of the Commission's regulations lists exemptions to the requirement to draft an Environmental Analysis or Environmental Impact Statement. Included is an exemption for procedural, ministerial or internal administrative actions. 32 This rulemaking is exempt under that provision. 31 Order No. 486, Regulations Implementing the National Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs., Regulations Preambles 1986-1990 ¶ 30,783 (1987). 32 18 CFR 380.4(1) and (5). V. Regulatory Flexibility Act Certification 26. The Regulatory Flexibility Act of 1980
(RFA)33 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. This Final Rule concerns procedural matters and is expected to increase the ease and convenience of filing. The Commission certifies that it will not have a significant economic impact upon participants in Commission proceedings. An analysis under the RFA is not required. 33 5 U.S.C. 601-612. VI. Comment Procedures 27. The Commission invites interested persons to submit comments on the matters and issues proposed in this notice to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due October 1, 2007. Comments must refer to Docket No. RM07-16-000, and must include the commenter's name, the organization he/she represents, if applicable, and his/her address in the comments. 28. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's Web site at *http://ferc.gov/docs-filing/efiling.asp.* The Commission accepts most standard word processing formats. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make paper filings. It is not necessary to serve copies of rulemaking comments on other commenters. 29. Commenters that are not able to file comments electronically must send an original and 14 copies of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street, NE., Washington, DC 20426. 30. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. VII. Document Availability 31. 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. 32. 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. 33. User assistance is available for eLibrary and the FERC's website during normal business hours from our Help line at
(202)502-8222 or the Public Reference Room at
(202)502-8371 Press 0, TTY
(202)502-8659. E-mail the Public Reference Room at *public.referenceroom@ferc.gov.* List of Subjects in 18 CFR Part 385 Administrative practice and procedure, Electric utilities, Penalties, Pipelines, Reporting and recordkeeping requirements. By direction of the Commission. Kimberly D. Bose, Secretary. In consideration of the foregoing, the Commission proposes to amend part 385, Chapter I, Title 18, *Code of Federal Regulations,* as follows. PART 385—RULES OF PRACTICE AND PROCEDURE 1. The authority citation for part 385 continues to read as follows: Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717z, 3301-3432; 16 U.S.C. 791a-825v, 2601-2645; 28 U.S.C. 2461; 31 U.S.C. 3701, 9701; 42 U.S.C. 7101-7352, 16441, 16451-16463; 49 U.S.C. 60502; 49 App. U.S.C. 1-85 (1988). 2. Section 385.2001 is amended by revising paragraph (a)(1)(iii) to read as follows: § 385.2001 Filings (Rule 2001).
(a)* * *
(1)* * *
(iii)By filing via the Internet pursuant to Rule 2003 through the links provided at *http://www.ferc.gov.* 3. Section 385.2003 is amended by revising paragraph
(c)to read as follows: § 385.2003 Specifications (Rule 2003).
(c)*Filing via the Internet.*
(1)All documents filed under this Chapter may be filed via the Internet except those listed by the Secretary. Except as otherwise specifically provided in this Chapter, filing via the Internet is in lieu of other methods of filing. Internet filings must be made in accordance with instructions issued by the Secretary and made available online at *http://www.ferc.gov.* Provisions of this chapter or directions from the Commission containing requirements as to the content and format of specific types of filings remain applicable.
(2)The Secretary will make available on the Commission's web site a list of document types that may not be filed via the Internet, as well as instructions pertaining to allowable electronic file and document formats, the filing of complex documents, whether paper copies are required, and procedural guidelines.
(3)For purposes of statutes or regulations governing timeliness, a document filed via the Internet will be deemed to have been received by the Commission at the time the last byte of the document is received by the Commission. Note: The following appendix will not appear in the Code of Federal Regulations. APPENDIX A (Partial list of eFiling-eligible documents for which paper copies may be required.) Environmental and Electric Transmission Filings • USGS 7.5 minute topographic maps. • National Wetland Inventory maps. • Alignment sheets. • Aerial photographs. • Major waterbody crossing plans and HDD (horizontal directional drill) diagrams. • Drawings/figures showing project boundaries, footprints, building locations, etc. • Drawings of valve and piping details at compressor stations, meter stations and pipeline interconnections. Liquefied Natural Gas
(LNG)• Engineering diagrams and plot plans. • Process flow diagrams. • Detailed piping and instrumentation diagrams (PSID's). • Equipment/tank detailed drawings of LNG storage tanks and process equipment. • Hazard detection and control location diagrams/plot plans. Pipeline Engineering • Flow diagrams required under Exhibits G and G-1 (18 CFR 157.14). Storage • Isopach, isobaric, structural, and stratigraphic maps. • Well logs. [FR Doc. E7-14724 Filed 8-1-07; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-155929-06] RIN 1545-BG31 Payout Requirements for Type III Supporting Organizations That Are Not Functionally Integrated AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Advance notice of proposed rulemaking. SUMMARY: This document describes rules that the Treasury Department and the IRS anticipate proposing, in a notice of proposed rulemaking, regarding the payout requirements for Type III supporting organizations that are not functionally integrated, the criteria for determining whether a Type III supporting organization is functionally integrated, the modified requirements for Type III supporting organizations that are organized as trusts, and the requirements regarding the type of information a Type III supporting organization must provide to its supported organization(s) to demonstrate that it is responsive to its supported organization(s). Sections 1241 and 1243 of the Pension Protection Act of 2006 amended the law with respect to Type III supporting organizations prompting a need to revise the Treasury Regulations regarding the four matters mentioned above. These new requirements and criteria would apply to Type III supporting organizations as defined under sections 509(a)(3)(B)(iii) and 4943(f)(5) of the Internal Revenue Code (Code). This document also invites comments from the public regarding the proposed payout requirement and the proposed criteria for qualifying as functionally integrated. All materials submitted will be available for public inspection and copying. DATES: Written or electronic comments must be submitted by October 31, 2007. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-155929-06), room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-155929-06), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at *http://www.regulations.gov/* (IRS REG-155929-06). FOR FURTHER INFORMATION CONTACT: Concerning submissions, Richard A. Hurst at
(202)622-2949 (TDD Telephone) and his e-mail address is *Richard.A.Hurst@irscounsel.treas.gov;* concerning the proposed rules, Philip T. Hackney or Michael B. Blumenfeld at
(202)622-6070 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background The Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780
(2006)(PPA), amended the requirements that an organization exempt from tax under section 501(c)(3) of the Code must meet to qualify as a Type III supporting organization under section 509(a)(3) of the Code. This advanced notice of proposed rulemaking describes the rules that the Treasury Department and the IRS expect to propose to implement the new qualification requirements for Type III supporting organizations enacted by Congress and solicits comments from the public. Public Charities Versus Private Foundations Under section 509(a), an organization described in section 501(c)(3) is a private foundation unless it meets the requirements of section 509(a)(1), (2), (3), or (4). Organizations described in section 501(c)(3) that meet the requirements of section 509(a)(1), (2), (3), or
(4)are referred to as public charities. Private foundations, which are generally divided into two categories, operating and non-operating, depending on the type of activity in which the foundation engages, are subject to a different set of requirements than those applicable to public charities. Sections 4940 through 4948 impose various restrictions and excise taxes on private foundations along with their disqualified persons and foundation managers, that are generally not applicable to public charities. Furthermore, more stringent deduction limitations apply to contributions made to private non-operating foundations than apply to contributions to public charities. For example, under section 170(b)(1)(A), an individual who makes a cash contribution to a public charity may deduct up to fifty percent of his or her contribution base (a modified adjusted gross income amount) in the year of his or her contribution, while the same contribution to a private non-operating foundation would be limited to thirty percent of the individual's contribution base under section 170(b)(1)(B). In addition, deductions for contributions of certain appreciated property to a private non-operating foundation are limited to the contributor's basis in the property under section 170(e)(1)(A), while the same contribution to a public charity could result in a deduction based on the property's fair market value under section 170(e)(1)(B)(ii). Supporting Organizations Public charities that meet the requirements of section 509(a)(3) are known as supporting organizations. To be classified as a supporting organization, an organization must satisfy an organizational test, an operational test, a relationship test, and a disqualified person control test. The organizational and operational tests require that the organization be organized and at all times thereafter operated exclusively for the benefit of, to perform the functions of, or to conduct the purposes of one or more publicly supported organizations described in section 509(a)(1) or (2). The relationship test requires that the organization be operated, supervised, or controlled by or in connection with one or more publicly supported organizations. Finally, the disqualified person control test requires that the organization not be controlled directly or indirectly by certain disqualified persons. Relationship Test Treasury Regulation (Treas. Reg.) § 1.509(a)-4(f)(2) sets forth three structural or operational relationships a supporting organization is permitted to have with its supported organization(s). Each supporting organization must have one of the three types of relationships with the organization(s) it supports to be a supporting organization described in section 509(a)(3) of the Code. The purpose of the relationship requirement is to ensure that a supporting organization has a sufficiently close tie to one or more publicly supported organizations such that the supporting organization will be accountable to a broader public constituency. A supporting organization that is operated, supervised or controlled by one or more publicly supported organizations is commonly known as a Type I supporting organization. The relationship a Type I supporting organization has with its supported organization(s) is comparable to that of a parent-subsidiary relationship. A supporting organization supervised or controlled in connection with one or more publicly supported organizations is commonly known as a Type II supporting organization. The relationship a Type II supporting organization has with its supported organization(s) is comparable to a brother-sister corporate relationship. A supporting organization that is operated in connection with one or more publicly supported organizations is commonly known as a Type III supporting organization. Qualification Requirements for Type III Supporting Organizations Prior to Enactment of the Pension Protection Act In general, Treas. Reg. § 1.509(a)-4(i)(1) requires an organization to meet a “responsiveness test” and an “integral part test” to satisfy the relationship requirement for a Type III supporting organization. *Responsiveness Test: General Rule.* Treas. Reg. § 1.509(a)-4(i)(2)(i) provides that an organization is “considered to meet the ‘responsiveness test’ if the organization is responsive to the needs or demands of” its publicly supported organizations. Treas. Reg. § 1.509(a)-4(i)(2)(ii) provides that a supporting organization may demonstrate responsiveness to its publicly supported organization(s) if: (1)(a) One or more of its officers, directors, or trustees are elected or appointed by the officers, directors, trustees, or membership of its publicly supported organization(s),
(b)one or more members of the governing bodies of its publicly supported organization(s) are also officers, directors, or trustees of, or hold other important offices in, the supporting organization, or
(c)the officers, directors, or trustees of the supporting organization maintain a close, continuous working relationship with the officers, directors, or trustees of its publicly supported organization(s); and
(2)by reason of such arrangement, the officers, directors, or trustees of its publicly supported organization(s) have a significant voice in the investment policies of the supporting organization, the timing and the manner of making grants, the selection of the grant recipients by the supporting organization, and otherwise directing the use of the income or assets of the supporting organization. In addition, with respect to an organization that was supporting a publicly supported organization before November 20, 1970, Treas. Reg. § 1.509(a)-4(i)(1)(ii) provides that additional facts and circumstances, such as a historic and continuing relationship between the supporting organization and its supported organization(s), may be taken into account, in addition to the factors described in the general responsiveness test above, to establish compliance with the responsiveness test. Responsiveness Test: Charitable Trusts. Before enactment of the PPA, one way of satisfying the responsiveness test, under Treas. Reg. § 1.509(a)-4(i)(2)(iii), required that
(1)the supporting organization be a charitable trust under state law,
(2)each publicly supported organization that the trust supports be named as a beneficiary under the charitable trust's governing instrument, and
(3)each beneficiary organization have the power to enforce the trust and compel an accounting under State law. As described below, this method of satisfying the responsiveness test was effectively removed by the PPA. *Integral Part Test.* Treas. Reg. § 1.509(a)-4(i)(3)(i) provides that a supporting organization is required to establish that “it maintains a significant involvement in the operations of one or more publicly supported organizations and such publicly supported organizations are in turn dependent upon the supporting organization for the type of support which it provides.” Treas. Reg. § 1.509(a)-4(i)(3)(ii) and
(iii)sets forth two alternative ways to meet the integral part test. The first method is typically referred to as the “but for” test. In this advance notice of proposed rulemaking, the second method of meeting the integral part test will be referred to as the “attentiveness” test. *Integral Part Test, Alternative I: the “but for” test.* Under Treas. Reg. § 1.509(a)-4(i)(3)(ii) the “but for” test is satisfied if “the activities engaged in [by the supporting organization] for or on behalf of the publicly supported organizations are activities to perform the functions of, or to carry out the purposes of, such organizations, and, but for the involvement of the supporting organization, would normally be engaged in by the publicly supported organizations themselves.” *Integral Part Test, Alternative II: the “attentiveness” test.* The “attentiveness” test, under Treas. Reg. § 1.509(a)-4(i)(3)(iii), requires a supporting organization to
(1)make payments of substantially all of its income to or for the use of one or more publicly supported organizations,
(2)provide enough support to one or more publicly supported organizations to insure the attentiveness of such organizations to the operations of the supporting organization, and
(3)pay a substantial amount of the total support of the supporting organization to those publicly supported organizations that meet the attentiveness requirement. Rev. Rul. 76-208, 1976-1 CB 161, (see § 601.601(d)(2) of this chapter), provides that the phrase “substantially all of its income” in Treas. Reg. § 1.509(a)-4(i)(3)(iii) means at least 85 percent of its adjusted net income. PPA Amendments to Qualification Requirements for Type III Supporting Organizations The PPA amended the qualification requirements for Type III supporting organizations, modifying both the integral part test and the responsiveness test. Sections 1241 and 1243 of the PPA enacted Code sections 509(d) and 4943(f)(5). These provisions define the term Type III supporting organization and distinguish between functionally integrated and non-functionally integrated Type III supporting organizations. These two new categories appear to reflect the distinction drawn in the Treasury Regulations between those organizations that meet the integral part test by meeting the “but for” test and those that meet the integral part test by meeting the “attentiveness” test. In conformity with existing Treasury Regulations, new section 4943(f)(5)(A) defines a Type III supporting organization as a supporting organization that is operated in connection with one or more section 509(a)(1) or
(2)organizations. New section 4943(f)(5)(B) defines a functionally integrated Type III supporting organization as a Type III supporting organization that is not required under regulations established by the Secretary to make payments to supported organizations due to the activities of the organization related to performing the functions of, or carrying out the purposes of, such supported organizations. Although this language appears similar to the “but for” prong of the integral part test, the Staff of the Joint Committee on Taxation in its technical explanation of the provision notes that there is “concern that the current regulatory standards for satisfying the integral part test not by reason of a payout [i.e., the existing “but for” test] are not sufficiently stringent to ensure that there is a sufficient nexus between the supporting and supported organizations.” See Staff of the Joint Committee on Taxation, Technical Explanation of H.R. 4, the “Pension Protection of 2006,” as Passed by the House on July 28, 2006, and as Considered by the Senate on August 3, 2006 (JCX-38-06) at 360 n. 571, August 3, 2006 (Technical Explanation). In particular, the Technical Explanation states that in revising the Type III supporting organization regulations the Secretary “shall strengthen the standard for qualification as [a Type III supporting] organization that is not required to pay out.” *Id.* Section 1241(d)(1) of the PPA directed the Secretary to promulgate new regulations on the payments required by Type III supporting organizations that are not functionally integrated. Section 1241(d)(1) of the PPA provides that such regulations shall require non-functionally integrated Type III supporting organizations to make distributions of a “percentage of either income or assets to supported organizations (defined in new section 509(f)(3) of [the] Code) in order to ensure that a significant amount is paid” to their supported organizations. The Technical Explanation notes that there is concern that merely requiring a Type III supporting organization to pay out substantially all of its net income (as under the “attentiveness” prong of the integral part test) does not necessarily result in significant distributions to publicly supported organizations relative to the value of the assets held by the Type III supporting organization and “as compared to amounts paid out by nonoperating private foundations.” See Technical Explanation at 360 n. 571. Section 1241(c) of the PPA modified the responsiveness test as it applies to charitable trusts. Effectively, section 1241(c) provides that having each organization that the trust supports be a publicly supported organization named as a beneficiary under the trust's governing instrument and establishing that each beneficiary organization has the power to enforce the trust and compel an accounting is no longer sufficient to satisfy the responsiveness test as provided in Treas. Reg. § 1.509(a)-4(i)(2)(iii). The Technical Explanation states that a Type III supporting organization organized as a trust must now “establish to the satisfaction of the Secretary, that it has a close and continuous relationship with the supported organization such that the trust is responsive to the needs or demands of the supported organization.” Technical Explanation at 362. Under section 1241(e)(2)(A) of the PPA, trusts that operated in connection with a publicly supported organization on August 17, 2006, have until August 17, 2007 to satisfy the modified responsiveness test under Treas. Reg. 1.509(a)-4(i)(2)(ii). For other trusts, the provision was effective on August 17, 2006. Finally, section 1241(b) added section 509(f)(1)(A), which contains another requirement for Type III supporting organizations. The provision requires a Type III supporting organization to provide each of its supported organizations with “such information as the Secretary may require to ensure that such organization is responsive to the needs or demands of the supported organization.” As described in this advanced notice of proposed rulemaking, the Treasury Department and the IRS intend to propose regulations that provide
(1)the payout requirements for Type III supporting organizations that are not functionally integrated,
(2)the criteria for determining whether a Type III supporting organization is functionally integrated,
(3)the modified responsiveness test for Type III supporting organizations that are organized as charitable trusts, and
(4)the type of information a Type III supporting organization will be required to provide to its supported organization(s) to demonstrate that it is responsive. Explanation of Provisions Summary of Proposed Criteria for Qualifying as a Type III Supporting Organization The Treasury Department and the IRS expect that all Type III supporting organizations will be required to meet the responsiveness test under Treas. Reg. § 1.509(a)-4(i)(2)(ii). In addition, it is expected that Type III supporting organizations that are functionally integrated will be required to meet:
(A)The “but for” test in existing Treas. Reg. § 1.509(a)-4(i)(3)(ii);
(B)an expenditure test that will resemble the qualifying distributions test for private operating foundations; and
(C)an assets test that will resemble the alternative assets test for private operating foundations. Finally, it is expected that a Type III supporting organization that is not functionally integrated will be required to meet a payout requirement equal to the qualified distribution requirement of a private non-operating foundation. In addition, there will be a limit on the number of publicly supported organizations a non-functionally integrated Type III supporting organization may support. These proposed criteria for qualifying as a Type III supporting organization will replace the integral part test in the existing regulations. These provisions are explained in more detail below. Definition of Functionally Integrated Type III Supporting Organization and the Applicability of Private Operating Foundation Rules Private operating foundations under section 4942(j)(3) share strong similarities with Type III functionally integrated supporting organizations under section 4943(f)(5)(B) in that both are expected to be directly engaged in the active conduct of charitable activities rather than only making grants to, or for the use of, charitable organizations. The Code and Treasury Regulations provide extensive rules used to determine whether a private foundation is a private operating foundation. See section 4942(j)(3) and Treas. Reg. § 53.4942(b). The Treasury Department and the IRS believe that these rules provide a useful model for developing standards to determine whether a Type III supporting organization is functionally integrated, and that adoption of similar rules under section 4943(f)(5)(B) will further the Congressional purpose articulated in the Technical Explanation of strengthening the nexus between a functionally integrated Type III supporting organization and the publicly supported organization(s) it supports. To qualify as a private operating foundation under section 4942(j)(3), an organization must satisfy a qualifying distributions test and one of three alternative tests described below. Under the qualifying distributions test, a private operating foundation must make qualifying distributions “directly for the active conduct of the activities constituting the purpose or function for which it is organized and operated,” equal to substantially all (at least 85 percent) of the lesser of its adjusted net income or its minimum investment return. Under section 4942(e)(1), the minimum investment return is equal to 5 percent of the excess of
(A)the aggregate fair market value of all the foundation's assets other than those used (or held for use) directly in carrying out the organization's exempt purpose over
(B)the acquisition indebtedness with respect to such assets. Under Treas. Reg. § 53.4942(b)-1(b)(1), a qualifying distribution directly for the active conduct of activities constituting the foundation's exempt purpose is a distribution that is used by the foundation itself to carry out its exempt activities rather than paid to other organizations to help them carry out their exempt activities. In addition, a private operating foundation must meet one of three alternative tests: An assets test, an endowment test or a support test. The assets test, under section 4942(j)(3)(B)(i) and Treas. Reg. § 53.4942(b)-2(a), requires that substantially more than half (at least 65 percent) of the assets of an operating foundation must be devoted directly to the private operating foundation's exempt purpose activities, or to functionally related businesses (see section 4942(j)(4)), or both, or are stock of a corporation controlled by, and substantially all (at least 85 percent) of the assets of which are devoted to, the foundation. The endowment test, under Treas. Reg. § 53.4942(b)-2(b), requires a foundation to make qualifying distributions directly for the active conduct of its exempt activities in an amount not less than two thirds of its minimum investment return. The support test, under Treas. Reg. § 53.4942(b)-2(c), is satisfied if substantially all (85 percent) of a foundation's support (other than gross investment income) is normally received from the general public and from five or more exempt organizations that are not related to each other or the recipient foundation, if the foundation does not normally receive more than 25 percent of its support from any one such exempt organization; and if the foundation does not normally receive more than 50 percent of its support from gross investment income. Description of the Proposed Functionally Integrated Test The Treasury Department and the IRS anticipate that the proposed regulations will define the term functionally integrated Type III supporting organization as a Type III supporting organization that meets:
(A)The “but for” test in existing Treas. Reg. § 1.509(a)-4(i)(3)(ii);
(B)an expenditure test consistent with section 4942(j)(3)(A); and
(C)an assets test consistent with section 4942(j)(3)(B)(i). It is expected that the expenditure test will require a functionally integrated Type III supporting organization to use substantially all of the lesser of
(a)its adjusted net income or
(b)five percent of the aggregate fair market value of all its assets (other than assets that are used, or held for use, directly in supporting the charitable programs of the supported organizations) directly for the active conduct of activities that directly further the exempt purposes of the organizations it supports. The assets test will require the organization to devote at least 65 percent of the aggregate fair market value of all its assets directly for the active conduct of activities that directly further the exempt purposes of the organizations it supports. The Treasury Department and the IRS believe that requiring functionally integrated Type III supporting organizations to satisfy the expenditure and assets tests, in addition to the “but for” test, will be stronger than the existing integral part test and ensure a sufficient nexus between a supporting organization and the organization(s) it supports. These tests also will ensure that a sufficient amount is being dedicated directly to the active conduct of activities that further the exempt purposes of publicly supported organizations. The term “adjusted net income” is expected to have substantially the same meaning as that term has in section 4942(f) and Treas. Reg. § 53.4942(a)-2(d). The valuation of assets is expected to be determined in a manner similar to the rules under section 4942(e)(2) and Treas. Reg. § 53.4942(a)-2(c)(4). The Treasury Department and the IRS also intend that certain Type III supporting organizations that oversee or facilitate the operation of an integrated system that includes one or more charities and that may be unable to satisfy the “direct active conduct” and “directly further” requirements of the expenditure and assets tests, such as certain hospital systems, will be classified as functionally integrated in the proposed regulations if they satisfy the existing “but for” test. The proposed regulations will not permit a functionally integrated Type III supporting organization to qualify as functionally integrated by using the endowment or support tests that are available to private operating foundations as alternatives to the proposed assets test. Because the endowment test is similar to the expenditure test, the Treasury Department and the IRS believe that the endowment test would not provide sufficient additional assurances of a tight nexus between a functionally integrated supporting organization and its supported organizations. Furthermore the support test, which focuses on sources of support received by a private foundation rather than on its activities, appears to be inapplicable to the functionally integrated concept. By requiring at least 65 percent of the value of all assets of each functionally integrated supporting organization to be devoted directly for the active conduct of the activities of its supported organizations, the proposed assets test is intended to ensure that the connection between the supporting and supported organizations is significant. Payout Requirement for Type III Supporting Organizations That Are Not Functionally Integrated In establishing a payout requirement for non-functionally integrated Type III supporting organizations, the Treasury Department and the IRS expect to follow the framework of the existing section 4942 qualifying distribution regulations applicable to private non-operating foundations. Private non-operating foundations have operated under these qualifying distribution regulations for many years. The Treasury Department and the IRS believe these rules are appropriate for Type III grant-making organizations, and would further the Congressional purpose articulated in the Technical Explanation of ensuring that, as compared to amounts paid out by private non-operating foundations, significant amounts are being paid to supported organizations even if the supporting organization's assets produce little or no income. A private non-operating foundation is required under section 4942 to make certain qualifying distributions or pay an excise tax. A private non-operating foundation is generally liable for this excise tax under section 4942(a) and
(b)if it does not make qualifying distributions each year equal to its minimum investment return. The minimum investment return is five percent of the aggregate fair market value of all the foundation's assets other than those used (or held for use) directly in carrying out the organization's exempt purpose over the acquisition indebtedness with respect to such assets. Qualifying distributions under section 4942(g) are generally those distributions (including reasonable and necessary administrative expenses) paid to accomplish charitable purposes. Description of the Proposed Payout Rule The Treasury Department and the IRS anticipate that the proposed regulations will
(A)require a non-functionally integrated Type III supporting organization to meet a payout requirement and
(B)limit the number of publicly supported organizations a non-functionally integrated Type III supporting organization may support. The payout requirement will call for a Type III supporting organization that is not functionally integrated to distribute annually to or for the use of its supported organizations an amount equal to at least five percent of the aggregate fair market value of all its assets (other than assets that are used, or held for use, directly in supporting the charitable programs of its supported organizations). Additionally, the Treasury Department and the IRS are concerned that a supporting organization's relationship with and accountability to its supported organizations is diminished as the number of its supported organizations increases. Accordingly, except for organizations in existence on or before the date the regulations are proposed, it is expected that the proposed regulations will also provide that non-functionally integrated Type III supporting organizations will be limited to supporting no more than five publicly supported organizations. An organization in existence on or prior to the date regulations are proposed may support more than five supported organizations only if the organization distributes at least 85 percent of its total required payout amount to, or for the use of, publicly supported organizations to which the supporting organization is responsive pursuant to Treas. Reg. § 1.509(a)-4(i)(2)(ii). The anticipated proposed payout rules are intended to ensure that a non-functionally integrated Type III supporting organization has a tight nexus with its supported organization(s). The Treasury Department and the IRS recognize that requiring an existing Type III supporting organization that supports more than five supported organizations to provide 85 percent of its total required payout to those supported organizations to which it is responsive may affect existing donee relationships. The Treasury Department and the IRS solicit comments on whether transitional rules are needed with respect to this proposed limitation regarding distributions to supported organizations. The valuation of assets for purposes of the payout requirement is expected to be determined in a manner similar to that under section 4942(e)(2) and Treas. Reg. § 53.4942(a)-2(c)(4). The proposed distribution rules will be similar to the distribution rules under section 4942. It is expected that amounts paid by an organization to accomplish the exempt purposes of its supported organizations will be considered as distributed to or for the use of its supported organization(s). Responsiveness Test Except as explained below with respect to charitable trusts, the Treasury Department and the IRS do not expect to modify the responsiveness test. Thus, all Type III supporting organizations will be expected to meet the responsiveness test under Treas. Reg. § 1.509(a)-4(i)(2)(ii). Accordingly, a Type III supporting organization will be expected to demonstrate the necessary relationship between its officers, directors or trustees and those of its supported organization(s), and further show that this relationship results in the officers, directors or trustees of its supported organization(s) having a significant voice in the operations of the supporting organization. Responsiveness Test for Charitable Trusts Consistent with section 1241(c) of the PPA, discussed in the Background section above, the proposed regulations will provide that charitable trusts must satisfy the responsiveness test under Treas. Reg. § 1.509(a)-4(i)(2)(ii). Thus, for instance, a trust would be expected to show that its trustees have a close, continuous working relationship with the officers, directors, or trustees of the publicly supported organization(s) it supports and that through such relationship the officers, directors or trustees of its publicly supported organization(s) have a significant voice in the operations of the supporting organization. Comments are requested with respect to potential transition relief given that the statute directs that this modified test apply as of August 17, 2007 to trusts already in existence on the date of enactment of the PPA. Requirement To Provide Supported Organizations With Information Regarding Responsiveness The proposed regulations will provide rules for the form, content and timing of the information Type III supporting organizations are required to provide their supported organization(s) under section 509(f)(1)(A). The Treasury Department and the IRS solicit comments as to what information the Secretary should require a Type III supporting organization to provide to each of its supported organizations to ensure that such supporting organization is responsive to the needs or demands of its supported organization(s). Consequences for Failing To Satisfy the Proposed Tests The proposed regulations will clarify that an organization that would otherwise be classified as a Type III supporting organization, but either does not establish that it is functionally integrated or does not satisfy the payout requirement for non-functionally integrated organizations in a taxable year, will be classified as a private foundation for such taxable year and all subsequent taxable years until it terminates its private foundation status under section 507. The Treasury Department and the IRS solicit comments on how the requirements for a private foundation termination under section 507 should apply in these circumstances. Transitional Issues Implementation of the new qualification requirements for Type III supporting organizations enacted in the PPA will raise transitional issues for certain organizations. For instance, an organization that currently qualifies as a Type III supporting organization by meeting the attentiveness prong of the integral part test might be prohibited by its current governing instrument from distributing capital or corpus, thus preventing it from being able to satisfy the new payout requirement for non-functionally integrated Type III supporting organizations without a change to such instrument. The Treasury Department and the IRS invite comments regarding potential transition rules for supporting organizations in existence as of the date of enactment of the PPA that will provide such organizations a reasonable opportunity to amend their governing instruments or make other changes to comply with the law as amended by the PPA. Proposed Effective Date Except as otherwise noted, the Treasury Department and the IRS anticipate that these new proposed rules for Type III supporting organizations would apply to taxable years with respect to each organization beginning after the date these rules are published in the **Federal Register** as final or temporary regulations. Request for Comments Before the notice of proposed rulemaking is issued, consideration will be given to any written comments (a signed original and eight
(8)copies) or electronic comments that are submitted timely to the IRS. All comments will be available for public inspection and copying. Drafting Information The principal authors of this advance notice of proposed rulemaking are Philip T. Hackney and Michael B. Blumenfeld, Office of the Chief Counsel (Tax-exempt and Government Entities), however, other personnel from the IRS and the Treasury Department participated in its development. Kevin M. Brown, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-14925 Filed 8-1-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 26 [REG-128843-05] RIN 1545-BE70 Severance of a Trust for Generation-Skipping Transfer
(GST)Tax Purposes II AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: These proposed regulations provide guidance regarding the generation-skipping transfer
(GST)tax consequences of the severance of trusts in a manner that is effective under state law, but that does not meet the requirements of a qualified severance under section 2642(a)(3) of the Internal Revenue Code. These proposed regulations also provide guidance regarding the GST tax consequences of a qualified severance of a trust with an inclusion ratio between zero and one into more than two resulting trusts. These proposed regulations also provide special funding rules applicable to the non pro rata division of certain assets between or among resulting trusts. The regulations will affect trusts that are subject to the GST tax. DATES: Written or electronic comments and requests for a public hearing must be received by October 31, 2007. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-128843-05), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-128843-05), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically, via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS REG-128843-05). FOR FURTHER INFORMATION CONTACT: Mayer R. Samuels,
(202)622-3090 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background On August 24, 2004, proposed regulations under section 2642(a)(3) regarding qualified severances were published in the **Federal Register** (REG-145987-03, 2004-39 IRB 519, 69 FR 51967). Final regulations were published on August 2, 2007. The Treasury Department and the IRS determined that certain comments received in response to the proposed regulations under section 2642(a)(3) should be addressed in a separate notice of proposed rulemaking, instead of in the final regulations published on August 2, 2007. Accordingly, this notice of proposed rulemaking proposes additional changes to the regulations in response to those comments. Section 2642(a)(3) was added to the Internal Revenue Code
(Code)by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), Public Law 107-16 (115 Stat. 38 (2001)). Under section 2642(a)(3), if a trust is divided into two or more trusts in a “qualified severance,” the trusts resulting from the severance (resulting trusts), which may have different inclusion ratios, will be recognized as separate trusts for GST tax purposes. Once the resulting trusts are recognized as separate trusts, the transferor's lifetime GST tax exemption may be allocated separately to either trust. In addition, whether or not a GST taxable event occurs is determined separately for each resulting trust. One commentator with respect to the notice of proposed rulemaking under section 2642(a)(3) suggested that those regulations should expressly address the GST tax consequences of dividing a trust in a manner that does not satisfy the regulatory requirements of a qualified severance, but nonetheless is effective to create separate trusts under applicable state law. Specifically, the commentator requested that the regulations be amended to provide that the separate trusts created as the result of a trust's division that is effective under state law, but that does not qualify as a qualified severance, will be respected prospectively as separate trusts for GST tax purposes, but that the inclusion ratio of each of the resulting trusts will be the same as the inclusion ratio of the original trust immediately before its severance. As noted by a commentator, however, such a result would require an amendment to the existing regulations under section 2654. Generally, section 2654(b)(2) provides that “substantially separate and independent shares” of different beneficiaries in a trust will be treated as separate trusts for GST tax purposes. Section 26.2654-1(a)(1)(i) provides that, for purposes of section 2654(b)(2), the term “substantially separate and independent shares” generally has the same meaning as provided in § 1.663(c)(3). However, these regulations further provide that a portion of a trust is not a separate share “unless such share exists from and at all times after creation of the trust.” Section 26.2654-1(a)(5), *Example 8,* illustrates this rule. In *Example 8,* T creates a discretionary trust with discretionary power in the trustee to distribute income and principal among T's children and grandchildren. The trust agreement directs that, when T's youngest child reaches age 21, the trust be divided into separate shares, with one such share for each child of T; the income from a particular share is to be paid to T's child (for whom that share was created) for life, with the remainder from that share to be distributed to that child's own children. The example concludes that the separate shares that come into existence when the youngest child reaches age 21 are not recognized as separate trusts for GST tax purposes because the separate shares did not constitute separate and independent shares of a single trust at all times from the date of creation of the original trust, as required by § 26.2654-1(a)(1). Thus, any allocation of GST tax exemption to the original trust, or to any of the separate shares after the division, will apply with respect to the entire trust. The example provides that the result would be the same if the original trust was divided into separate trusts rather than separate shares. Another commentator with respect to the notice of proposed rulemaking under section 2642(a)(3) requested that the regulations provide additional flexibility in severing a trust that has an inclusion ratio between zero and one. Generally, the final regulations apply section 2642(a)(3)(B)(ii) by requiring that the trust first be severed into two identical trusts, one of which would then have an inclusion ratio of zero and the other an inclusion ratio of one. The final regulations confirm that either or both of these trusts may then be further severed into a trust for the benefit of the skip person(s) and a trust for the benefit of the non-skip person(s). However, under this two-step procedure, one of the resulting trusts for the benefit of skip persons would have an inclusion ratio of one, and one of the trusts for the benefit of the non-skip persons would have an inclusion ratio of zero. The commentator requested that the regulations allow severances in a manner that would permit a more effective utilization of the exemption. The Treasury Department and the IRS believe that each of these suggestions merits further consideration in a new notice of proposed rulemaking. In addition, the new proposed regulations clarify the rules in the final regulations regarding the funding of resulting trusts. Explanation of Provisions The proposed regulations amend the regulations under § 26.2642-6 to provide that trusts resulting from a severance that does not meet the requirements of a qualified severance nevertheless will be treated, after the severance, as separate trusts for GST tax purposes, provided that the resulting trusts are recognized as separate trusts under applicable state law. Because the severance is not a qualified severance, each such resulting trust will have the same inclusion ratio immediately after the severance as the original trust immediately before the severance. Nevertheless, GST tax exemption allocated after the severance may be separately allocated to one or more of the resulting trusts and the trusts will otherwise be treated as separate trusts for GST tax purposes. An example of a nonqualified severance is added to the regulations. The proposed regulations also revise § 26.2654-1(a)(1)(i) and (a)(5), *Example 8* . In addition, pursuant to the authority granted in section 2642(a)(3)(B)(iii), these proposed regulations provide for an additional type of qualified severance. Specifically, the proposed regulations provide that a trust with an inclusion ratio between zero and one may be severed in a qualified severance into more than two resulting trusts. One or more of the resulting trusts in the aggregate must receive that fractional share of the total value of the original trust as of the date of severance that is equal to the applicable fraction used to determine the inclusion ratio of the original trust immediately before the severance. The trust or trusts receiving such fractional share shall have an inclusion ratio of zero, and each of the other resulting trust or trusts shall have an inclusion ratio of one. Further, the trustee may designate the beneficiary of each separate resulting trust, provided that the designation results in each beneficiary having the same beneficial interest (within the meaning of § 26.2642-6(d)(5)) after the severance as that beneficiary had in the original trust corpus. Guidance illustrating the application of this rule is included in § 26.2642-6(d)(7)(ii) and *Example 9* of § 26.2642-6(j) of these proposed regulations. Finally, these proposed regulations clarify a provision of the final regulations issued contemporaneously with these proposed regulations. Specifically, § 26.2642-6(d)(4) requires that each resulting trust be funded with a fraction or percentage of the entire trust and that, although particular assets may be divided among the resulting trusts on a non pro rata basis based on the fair market value of the assets on the date of severance, the sum of those fractions or percentages must be one or one hundred percent, respectively. Thus, if the resulting trusts are funded on a non pro rata basis, the sum of the values distributed to the resulting trusts must equal the fair market value of the trust being severed. These proposed regulations clarify that no discounts or other reductions from the value of an asset owned by the original trust, arising by reason of the division of the original trust's interest in the asset between or among the resulting trusts, are permitted in funding the resulting trusts. Instead, solely for funding purposes, each resulting trust's interest in the stock of a closely held corporation, partnership interest, or other single asset must be valued by multiplying the fair market value of the asset held in the original trust as of the date of severance by the fractional or percentage interest in that asset being distributed to that resulting trust. This clarification is proposed to be effective with respect to severances occurring on or after the date these proposed regulations are published in the **Federal Register** . Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) applies only to § 26.2642-6(d)(7)(ii) of these regulations. It is hereby certified that this provision will not have a significant economic impact on a substantial number of small entities. Accordingly, a Regulatory Flexibility Analysis is not required. This provision directly affects individuals, not entities. Because the remaining sections of these regulations do not impose on small entities a collection of information requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight
(8)copies) or electronic comments that are submitted timely to the IRS. The IRS and Treasury Department request comments on the substance of the proposed regulations, as well as on the clarity of the proposed rules and how they may be made easier to understand. All comments will be available for public inspection and copying. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the public hearing will be published in the **Federal Register** . Drafting Information The principal author of these proposed regulations is Mayer R. Samuels, Office of the Associate Chief Counsel (Passthroughs and Special Industries), IRS. Other personnel from the IRS and the Treasury Department participated in their development. List of Subjects in 26 CFR Part 26 Estate taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 26 is proposed to be amended as follows: PART 26—GENERATION-SKIPPING TRANSFER TAX REGULATIONS UNDER THE TAX REFORM ACT OF 1986 **Paragraph 1.** The authority citation for part 26 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** In § 26.2600-1, the table of contents is amended by adding the entry for § 26.2642-6(h) to read as follows: § 26.2600-1 Table of contents. § 26.2642-6 Qualified severance.
(h)Treatment of trusts resulting from a severance that is not a qualified severance. **Par. 3.** Section 26.2642-6 is amended as follows: 1. Paragraphs (d)(4) and (d)(7) are revised. 2. Paragraph
(h)is added. 3. Paragraph
(j)*Examples 6, 9, 12* and *13* are added. 4. Paragraph (k)(1) is revised. The additions and revisions read as follows: § 26.2642-6 Qualified severance.
(d)* * *
(4)The single trust (original trust) is severed on a fractional basis, such that each new trust (resulting trust) is funded with a fraction or percentage of the original trust, and the sum of those fractions or percentages is one or one hundred percent, respectively. For this purpose, the fraction or percentage may be determined by means of a formula (for example, that fraction of the trust the numerator of which is equal to the transferor's unused GST tax exemption, and the denominator of which is the fair market value of the original trust's assets on the date of severance). The severance of a trust based on a pecuniary amount does not satisfy this requirement. For example, the severance of a trust is not a qualified severance if the trust is divided into two trusts, with one trust to be funded with $1,500,000 and the other trust to be funded with the balance of the original trust's assets. With respect to the particular assets to be distributed to each resulting trust, each resulting trust may be funded with the appropriate fraction or percentage (pro rata portion) of each asset held by the original trust. Alternatively, the assets may be divided among the resulting trusts on a non-pro rata basis, based on the fair market value of the assets on the date of severance. However, if a resulting trust is funded on a non-pro rata basis, each asset received by a resulting trust must be valued, solely for funding purposes, by multiplying the fair market value of the asset held in the original trust as of the date of severance by the fraction or percentage of that asset received by that resulting trust. Thus, the assets must be valued without taking into account any discount or premium arising from the severance, for example, any valuation discounts that might arise because the resulting trust receives less than the entire interest held by the original trust. See paragraph (j), *Example 6* of this section.
(7)In the case of a qualified severance occurring after GST tax exemption has been allocated to the trust (whether by an affirmative allocation, a deemed allocation, or an automatic allocation pursuant to the rules contained in section 2632), if the trust has an inclusion ratio as defined in § 26.2642-1 that is greater than zero and less than one, then either paragraph (d)(7)(i) or
(ii)of this section must be satisfied.
(i)The trust is severed initially into only two resulting trusts. One resulting trust must receive that fractional share of the total value of the original trust as of the date of severance that is equal to the applicable fraction, as defined in § 26.2642-1(b) and (c), used to determine the inclusion ratio of the original trust immediately before the severance. The other resulting trust must receive that fractional share of the total value of the original trust as of the date of severance that is equal to the excess of one over the fractional share described in the preceding sentence. The trust receiving the fractional share equal to the applicable fraction shall have an inclusion ratio of zero, and the other trust shall have an inclusion ratio of one. If the applicable fraction with respect to the original trust is .50, then, with respect to the two equal trusts resulting from the severance, the Trustee may designate which of the resulting trusts will have an inclusion ratio of zero and which will have an inclusion ratio of one. Each separate trust resulting from the severance then may be further divided in accordance with the rules of this section. See paragraph (j), *Example 7* of this section.
(ii)The trust is severed initially into more than two resulting trusts. One or more of the resulting trusts in the aggregate must receive that fractional share of the total value of the original trust as of the date of severance that is equal to the applicable fraction used to determine the inclusion ratio of the original trust immediately before the severance. The trust or trusts receiving such fractional share shall have an inclusion ratio of zero, and each of the other resulting trust or trusts shall have an inclusion ratio of one. (If, however, two or more of the resulting trusts each receives the fractional share of the total value of the original trust equal to the applicable fraction, the trustee may designate which of those resulting trusts will have an inclusion ratio of zero and which will have an inclusion ratio of one.) The resulting trust or trusts with an inclusion ratio of one must receive in the aggregate that fractional share of the total value of the original trust as of the date of severance that is equal to the excess of one over the fractional share described in the second sentence of this paragraph. See paragraph (j), *Example 9* of this section.
(h)*Treatment of trusts resulting from a severance that is not a qualified severance.* Trusts resulting from a severance (other than a severance under § 26.2654-1) that does not meet the requirements of a qualified severance under paragraph
(b)of this section will be treated, after the date of severance, as separate trusts for purposes of the generation-skipping transfer
(GST)tax, provided that the trusts resulting from such severance are recognized as separate trusts under applicable state law. The post-severance treatment of the resulting trusts as separate trusts for GST tax purposes generally permits the allocation of GST tax exemption, the making of various elections permitted for GST tax purposes, and the occurrence of a taxable distribution or termination with regard to a particular resulting trust, with no GST tax impact on any other trust resulting from that severance. Each trust resulting from a severance described in this paragraph, however, will have the same inclusion ratio immediately after the severance as that of the original trust immediately before the severance. (See § 26.2654-1 for the inclusion ratio of each trust resulting from a severance described in that section.)
(j)* * * Example 6. *Funding of severed trusts on a non-pro rata basis.* T's will establishes an irrevocable trust, Trust, for the benefit of T's descendants. As a result of the allocation of GST tax exemption, the applicable fraction with respect to Trust is .60 and Trust's inclusion ratio is .40 [1-.60]. Pursuant to authority granted under applicable state law, on August 1, 2008, the trustee executes a document severing Trust into two trusts, Trust 1 and Trust 2, each of which is identical to Trust. The instrument of severance provides that the severance is intended to qualify as a qualified severance within the meaning of section 2642(a)(3) and designates August 3, 2008, as the date of severance (within the meaning of paragraph (d)(3) of this section). The instrument further provides that Trust 1 and Trust 2 are to be funded on a non-pro rata basis with Trust 1 funded with assets having a fair market value on the date of severance equal to 40% of the value of Trust's assets on that date and Trust 2 funded with assets having a fair market value equal to 60% of the value of Trust's assets on that date. The fair market value of the assets used to fund each trust is to be determined in compliance with the requirements of paragraph (d)(4) of this section. On August 3, 2008, the fair market value of the Trust assets totals $4,000,000, consisting of 52% of the outstanding common stock in Company, a closely-held corporation, valued at $3,000,000 and $1,000,000 in cash and marketable securities. Trustee proposes to divide the Company stock equally between Trust 1 and Trust 2, and thus transfer 26% of the Company stock to Trust 1 and 26% of the stock to Trust 2. In addition, the appropriate amount of cash and marketable securities will be distributed to each trust. In accordance with paragraph (d)(4) of this section, for funding purposes, the interest in the Company stock distributed to each trust is valued as a pro rata portion of the value of the 52% interest in Company held by Trust before severance, without taking into account, for example, any valuation discount that might otherwise apply in valuing the noncontrolling interest distributed to each resulting trust. Accordingly, for funding purposes, each 26% interest in Company stock distributed to Trust 1 and Trust 2 is valued at $1,500,000 (.5 × $3,000,000). Therefore, Trust 1, which is to be funded with $1,600,000 (.40 × $4,000,000), receives $100,000 in cash and marketable securities valued as of August 3, 2008, in addition to the Company stock, and Trust 2, which is to be funded with $2,400,000 (.60 × $4,000,000), receives $900,000 in cash and marketable securities in addition to the Company stock. Therefore, the severance is a qualified severance, provided that all other requirements of section 2642(a)(3) and this section are satisfied. Example 9. *Regulatory qualified severance.* In 2004, T establishes an inter vivos irrevocable trust (Trust) providing that Trust income is to be paid annually in equal shares to T's children, A and B, for 10 years. If either (or both) dies prior to the expiration of the 10-year term, the deceased child's share of trust income is to be paid to the child's then living descendants, per stirpes, for the balance of the trust term. At the expiration of the 10-year trust term, the corpus is to be distributed equally to A and B; if A and B (or either or them) is not then living, then such decedent's share is to be distributed instead to such decedent's then living descendants, per stirpes. T allocates GST tax exemption to Trust such that Trust's applicable fraction is .25 and its inclusion ratio is .75. In 2006, pursuant to applicable state law, the trustee severs the trust into three trusts: Trust 1, Trust 2, and Trust 3. The instrument severing Trust provides that Trust 1 is to receive 50% of Trust's assets, Trust 2 is to receive 25% of Trust's assets, and Trust 3 is to receive 25% of Trust's assets. All three resulting trusts are identical to Trust, except that each has different beneficiaries: A and A's issue are designated as the beneficiaries of Trust 1, and B and B's issue are designated as the beneficiaries of Trust 2 and Trust 3. The severance constitutes a qualified severance, provided that all other requirements of section 2642(a)(3) and this section are satisfied. Trust 1 will have an inclusion ratio of 1. Because both Trust 2 and Trust 3 have each received the fractional share of Trust's assets equal to Trust's applicable fraction of .25, trustee designates that Trust 2 will have an inclusion ratio of one and that Trust 3 will have an inclusion ratio of zero. Example 12. *Mandatory severance that does not qualify as a qualified severance.* In 1996, T creates an irrevocable inter vivos trust (Trust) that provides the trustee with the discretionary power to distribute income or corpus from time to time to one or more of T's children and grandchildren. Trust provides that, when T's youngest child reaches age 30, Trust is to be divided equally into separate trusts (resulting trusts), with one resulting trust for each child of T who is then living, and one resulting trust for each child of T who is then deceased and who has then living descendants. The income from a child's resulting trust will be paid to that child during the child's life, with the remainder passing to such child's descendants (grandchildren and younger generation descendants of T). On a timely filed Form 709, “United States Gift (and Generation-Skipping Transfer) Tax Return,” reporting the transfer, T allocates all of T's remaining GST tax exemption to Trust. As a result of the allocation, the applicable fraction with respect to Trust is .20, so Trust's inclusion ratio is .80 [1 -.20]. T's youngest child reaches age 30 in 2008. (No additional gifts are made through 2008 and Trust's inclusion ratio does not change.) In accordance with Trust's terms, Trust is divided in 2008 into three separate trusts (Trust 1, Trust 2, and Trust 3), one trust for each of T's three children, each of whom is then living. Trust 1, Trust 2, and Trust 3 are each recognized as a separate trust under applicable state law. With the consent of all interested parties, each resulting trust is funded with assets different from the assets distributed to the other two resulting trusts in a manner that does not meet the requirements of paragraph (d)(3) of this section. As a result, the severance does not satisfy the requirements of a qualified severance under this section. Under paragraph
(h)of this section, however, Trust 1, Trust 2, and Trust 3 are each recognized as a separate trust for GST tax purposes prospectively from the date of severance, because the severance was effective to create three separate trusts under applicable state law. Therefore, after the severance, if T becomes entitled to any additional GST tax exemption pursuant to subsequent changes in applicable Federal tax law, T may allocate that additional GST tax exemption to any one or more of these three resulting trusts. Because the severance is not a qualified severance, however, the inclusion ratio of each of the three new trusts immediately after the severance will be .80, the same as Trust's inclusion ratio immediately before the severance. Example 13. *Other severance that does not qualify as a qualified severance.* In 2004, T establishes an irrevocable inter vivos trust (Trust) providing that Trust income is to be paid to T's children, A and B, in equal shares for their joint lives. Upon the death of the first to die of A and B, all Trust income will be paid to the survivor of A and B. At the death of the survivor, the corpus is to be distributed in equal shares to T's grandchildren, W and X (with any then-deceased grandchild's share being paid in accordance with that grandchild's testamentary general power of appointment). W is A's child and X is B's child. T elects under section 2632(c)(5) not to have the automatic allocation rules contained in section 2632(c) apply with respect to T's transfers to Trust, and T does not otherwise allocate GST tax exemption to Trust. In 2006, the trustee of Trust, as permitted by applicable state law, divides Trust into two separate trusts, Trust 1 and Trust 2. Trust 1 provides that trust income is to be paid to A for life and, on A's death, the remainder is to be distributed to W (or pursuant to W's testamentary general power of appointment). Trust 2 provides that trust income is to be paid to B for life and, on B's death, the remainder is to be distributed to X (or pursuant to X's testamentary general power of appointment). Because Trust 1 and Trust 2 do not provide A and B with the contingent survivor income interests that were provided to A and B under the terms of Trust, Trust 1 and Trust 2 do not provide for the same succession of interests in the aggregate as provided by Trust. Therefore, the severance does not satisfy the requirements of this section and is not a qualified severance. However, under paragraph
(h)of this section, provided that Trust 1 and Trust 2 are recognized as separate trusts under applicable state law, Trust 1 and Trust 2 will be recognized as separate trusts for GST tax purposes, prospectively from the date of the severance. Trust 1 and Trust 2 each have the same inclusion ratio immediately after the severance as Trust's inclusion ratio immediately before the severance.
(k)* * *
(1)*In general.* Except as otherwise provided, this section applies to severances occurring on or after August 2, 2007. Paragraph (d)(7)(ii), paragraph (h), and *Examples 9, 12,* and *13* of paragraph
(j)of this section apply to severances occurring on or after [DATE THIS DOCUMENT IS PUBLISHED IN THE **Federal Register** AS FINAL REGULATIONS]. Paragraph (d)(4) and *Example 6* of paragraph
(j)apply to severances occurring on or after August 2, 2007. **Par. 4.** Section 26.2654-1 is amended as follows: 1. Paragraph (a)(1)(i) is revised. 2. A new paragraph (a)(1)(iii) is added. 3. In paragraph (a)(5), *Example 8* is revised. The additions and revisions read as follows: § 26.2654-1 Certain trusts treated as separate trusts.
(a)*Single trust treated as separate trusts* —(1) *Substantially separate and independent shares* —(i) *In general.* If a single trust consists solely of substantially separate and independent shares for different beneficiaries, the share attributable to each beneficiary (or group of beneficiaries) is treated as a separate trust for purposes of chapter 13. The phrase “substantially separate and independent shares” generally has the same meaning as provided in § 1.663(c)-3 of this chapter. However, except as provided in paragraph (a)(1)(iii) of this section, a portion of a trust is not a separate share unless such share exists from and at all times after the creation of the trust. For purposes of this paragraph (a)(1), a trust is treated as created at the date of death of the grantor if the trust is includible in its entirety in the grantor's gross estate for Federal estate tax purposes. Further, treatment of a single trust as separate trusts under this paragraph (a)(1) does not permit treatment of those portions as separate trusts for purposes of filing returns and payment of tax or for purposes of computing any other tax imposed under the Internal Revenue Code. Also, additions to, and distributions from, such trusts are allocated pro rata among the separate trusts, unless the governing instrument expressly provides otherwise. See § 26.2642-6 and paragraph
(b)of this section regarding the treatment, for purposes of chapter 13, of separate trusts resulting from the actual severance of a single trust.
(iii)*Mandatory severances.* For purposes of this section, if the governing instrument of a trust requires the division or severance of a single trust into separate trusts upon the future occurrence of a particular event not within the discretion of the trustee or any other person, and if the trusts resulting from such a division or severance are recognized as separate trusts under applicable state law, then each resulting trust is treated as a separate trust for purposes of chapter 13. For this purpose, the rules of paragraph (b)(1)(ii)(C) of this section apply with respect to the severance and funding of the trusts. Similarly, if the governing instrument requires the division of a single trust into separate shares under the circumstances described in this paragraph, each such resulting share is treated as a separate trust for purposes of chapter 13. The post-severance treatment of the resulting trusts or shares as separate trusts for GST tax purposes generally permits the allocation of GST tax exemption, the making of various elections permitted for GST tax purposes, and the occurrence of a taxable distribution or termination with regard to a particular resulting trust or share, with no GST tax impact on any other trust or share resulting from that severance. The treatment of a single trust as separate trusts under this paragraph (a)(1), however, does not permit treatment of those portions as separate trusts for purposes of filing returns and payment of tax or for purposes of computing any other tax imposed under the Internal Revenue Code. Also, additions to, and distributions from, such trusts are allocated pro rata among the separate trusts, unless the governing instrument expressly provides otherwise. Each separate share and each trust resulting from a mandatory division or severance described in this paragraph will have the same inclusion ratio immediately after the severance as that of the original trust immediately before the division or severance.
(5)* * * Example 8. *Subsequent mandatory division into separate trusts.* T creates an irrevocable trust that provides the trustee with the discretionary power to distribute income or corpus to T's children and grandchildren. The trust provides that, when T's youngest child reaches age 21, the trust will be divided into separate shares, one share for each child of T. The income from a respective child's share will be paid to the child during the child's life, with the remainder passing on the child's death to such child's children (grandchildren of T). The separate shares that come into existence when the youngest child reaches age 21 will be recognized as of that date as separate trusts for purposes of Chapter 13. Any allocation of GST tax exemption to the trust after T's youngest child reaches age 21 may be made to any one or more of the separate shares. The result would be the same if the trust instrument provided that the trust was to be divided into separate trusts when T's youngest child reached age 21, provided that the severance and funding of the separate trusts meets the requirements of this section. Linda E. Stiff, Acting Deputy Commissioner for Services and Enforcement. [FR Doc. E7-14850 Filed 8-1-07; 8:45 am] BILLING CODE 4830-01-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2007-0360-200717; FRL-8449-2] Approval of Implementation Plans of Florida: Clean Air Interstate Rule AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: EPA is proposing to approve a revision to the Florida State Implementation Plan
(SIP)submitted on March 16, 2007. This revision addresses the requirements of EPA's Clean Air Interstate Rule (CAIR), promulgated on May 12, 2005, and subsequently revised on April 28, 2006, and December 13, 2006. EPA is proposing to determine that the SIP revision fully implements the CAIR requirements for Florida. Therefore, as a consequence of the SIP approval, EPA will also withdraw the CAIR Federal Implementation Plans (CAIR FIPs) concerning sulfur dioxide (SO <sup>2</sup> ), nitrogen oxides (NO <sup>X</sup> ) annual, and NO <sup>X</sup> ozone season emissions for Florida. The CAIR FIPs for all States in the CAIR region were promulgated on April 28, 2006, and subsequently revised on December 13, 2006. CAIR requires States to reduce emissions of SO <sup>2</sup> and NO <sup>X</sup> that significantly contribute to nonattainment of, and interfere with maintenance of, the national ambient air quality standards (NAAQS) for fine particulates and/or ozone in any downwind state. CAIR establishes State budgets for SO <sup>2</sup> and NO <sup>X</sup> and requires States to submit SIP revisions that implement these budgets in States that EPA concluded did contribute to nonattainment in downwind states. States have the flexibility to choose which control measures to adopt to achieve the budgets, including participating in the EPA-administered cap-and-trade programs. In the SIP revision that EPA is proposing to approve, Florida would meet CAIR requirements by participating in the EPA-administered cap-and-trade programs addressing SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season emissions. DATES: Comments must be received on or before September 4, 2007. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-OAR-2007-0360 by one of the following methods: 1. *http://www.regulations.gov:* Follow the on-line instructions for submitting comments. 2. *E-mail: harder.stacy@epa.gov.* 3. *Fax:* 404-562-9019. 4. *Mail:* “EPA-R04-OAR-2007-0360,” 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. 5. *Hand Delivery or Courier:* Stacy Harder, 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. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding federal holidays. *Instructions:* Direct your comments to Docket ID No. “EPA-R04-OAR-2007-0360.” EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *http://www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit through *http://www.regulations.gov* or e-mail, information that you consider to be CBI or otherwise protected. The *http://www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information, unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *http://www.regulations.gov* , your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters and any form of encryption and should be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm.* *Docket:* All documents in the electronic docket are listed in the *http://www.regulations.gov* index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in *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 to 4:30, excluding federal holidays. FOR FURTHER INFORMATION CONTACT: If you have questions concerning this proposal, please contact Ms. Stacy Harder, 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)562-9042. Ms. Harder can also be reached via electronic mail at *harder.stacy@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. What Action Is EPA Proposing To Take? II. What Is the Regulatory History of CAIR and the CAIR FIPs? III. What Are the General Requirements of CAIR and the CAIR FIPs? IV. What Are the Types of CAIR SIP Submittals? V. Analysis of Florida's CAIR SIP Submittal A. State Budgets for Allowance Allocations B. CAIR Cap-and-Trade Programs C. Applicability Provisions for non-EGU NO <sup>X</sup> SIP Call Sources D. NO <sup>X</sup> Allowance Allocations E. Allocation of NO <sup>X</sup> Allowances from Compliance Supplement Pool F. Individual Opt-In Units VI. Proposed Actions VII. Statutory and Executive Order Reviews I. What Action Is EPA Proposing To Take? EPA is proposing to approve a revision to Florida's SIP, submitted on March 16, 2007. In its SIP revision, Florida would meet CAIR requirements by requiring certain electric generating units
(EGUs)to participate in the EPA-administered State CAIR cap-and-trade programs addressing SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season emissions. EPA is proposing to determine that the SIP, as revised, will meet the applicable requirements of CAIR. Any final action approving the SIP will be taken by the Regional Administrator for Region 4. As a consequence of the SIP approval, the Administrator of EPA will also issue a final rule to withdraw the FIPs concerning SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season emissions for Florida. This action will delete and reserve 40 CFR 52.540 and 40 CFR 52.541. The withdrawal of the CAIR FIPs for Florida is a conforming amendment that must be made once the SIP is approved because EPA's authority to issue the FIPs was premised on a deficiency in the SIP for Florida. Once the SIP is fully approved, EPA no longer has authority for the FIPs. Thus, EPA will not have the option of maintaining the FIPs following the full SIP approval. Accordingly, EPA does not intend to offer an opportunity for a public hearing or an additional opportunity for written public comment on the withdrawal of the FIPs. II. What Is the Regulatory History of the CAIR and the CAIR FIPs? The CAIR was published by EPA on May 12, 2005 (70 FR 25162). In this rule, EPA determined that 28 States and the District of Columbia contribute significantly to nonattainment and interfere with maintenance of the NAAQS for fine particles (PM <sup>2.5</sup> ) and/or 8-hour ozone in downwind States in the eastern part of the country. As a result, EPA required those upwind States to revise their SIPs to include control measures that reduce emissions of SO <sup>2</sup> , which is a precursor to PM <sup>2.5</sup> formation, and/or NO <sup>X</sup> , which is a precursor to both ozone and PM <sup>2.5</sup> formation. For jurisdictions that contribute significantly to downwind PM <sup>2.5</sup> nonattainment, CAIR sets annual State-wide emission reduction requirements (i.e., budgets) for SO <sup>2</sup> and annual State-wide emission reduction requirements for NO <sup>X</sup> . Similarly, for jurisdictions that contribute significantly to 8-hour ozone nonattainment, CAIR sets State-wide emission reduction requirements for NO <sup>X</sup> for the ozone season (May 1st to September 30th). Under CAIR, States may implement these reduction requirements by participating in the EPA-administered cap-and-trade programs or by adopting any other control measures. CAIR explains to subject States what must be included in SIPs to address the requirements of section 110(a)(2)(D) of the Clean Air Act
(CAA)with regard to interstate transport with respect to the 8-hour ozone and PM <sup>2.5</sup> NAAQS. EPA made national findings, effective on May 25, 2005, that the States had failed to submit SIPs meeting the requirements of section 110(a)(2)(D). The SIPs were due in July 2000, three years after the promulgation of the 8-hour ozone and PM <sup>2.5</sup> NAAQS. These findings started a two-year clock for EPA to promulgate a FIP to address the requirements of section 110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP anytime after such findings are made and must do so within two years, unless a SIP revision correcting the deficiency is approved by EPA before the FIP is promulgated. On April 28, 2006, EPA promulgated FIPs for all States covered by CAIR in order to ensure the emissions reductions required by CAIR are achieved on schedule. Each CAIR State is subject to the FIPs until the State fully adopts, and EPA approves, a SIP revision meeting the requirements of CAIR. The CAIR FIPs require EGUs to participate in the EPA-administered CAIR SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading programs, as appropriate. The CAIR FIP SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading programs impose essentially the same requirements as, and are integrated with, the respective CAIR SIP trading programs. The integration of the FIP and SIP trading programs means that these trading programs will work together to create effectively a single trading program for each regulated pollutant (SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season) in all States covered by the CAIR FIP or SIP trading program for that pollutant. The CAIR FIPs also allow States to submit abbreviated SIP revisions that, if approved by EPA, will automatically replace or supplement certain CAIR FIP provisions (e.g., the methodology for allocating NO <sup>X</sup> allowances to sources in the State), while the CAIR FIP remains in place for all other provisions. On April 28, 2006, EPA published two additional CAIR-related final rules that added the States of Delaware and New Jersey to the list of States subject to CAIR for PM <sup>2.5</sup> and announced EPA's final decisions on reconsideration of five issues, without making any substantive changes to the CAIR requirements. III. What Are the General Requirements of CAIR and the CAIR FIPs? CAIR establishes State-wide emission budgets for SO <sup>2</sup> and NO <sup>X</sup> and is to be implemented in two phases. The first phase of NO <sup>X</sup> reductions starts in 2009 and continues through 2014, while the first phase of SO <sup>2</sup> reductions starts in 2010 and continues through 2014. The second phase of reductions for both NO <sup>X</sup> and SO <sup>2</sup> starts in 2015 and continues thereafter. CAIR requires States to implement the budgets by either:
(1)Requiring EGUs to participate in the EPA-administered cap-and-trade programs; or
(2)adopting other control measures of the State's choosing and demonstrating that such control measures will result in compliance with the applicable State SO <sup>2</sup> and NO <sup>X</sup> budgets. The May 12, 2005, and April 28, 2006, CAIR rules provide model rules that States must adopt (with certain limited changes, if desired) if they want to participate in the EPA-administered trading programs. With two exceptions, only States that choose to meet the requirements of CAIR through methods that exclusively regulate EGUs are allowed to participate in the EPA-administered trading programs. One exception is for States that adopt the opt-in provisions of the model rules to allow non-EGUs individually to opt into the EPA-administered trading programs. The other exception is for States that include all non-EGUs from their NO <sup>X</sup> SIP Call trading programs in their CAIR NO <sup>X</sup> ozone season trading programs. IV. What Are the Types of CAIR SIP Submittals? States have the flexibility to choose the type of control measures they will use to meet the requirements of CAIR. EPA anticipates that most States will choose to meet the CAIR requirements by selecting an option that requires EGUs to participate in the EPA-administered CAIR cap-and-trade programs. For such States, EPA has provided two approaches for submitting and obtaining approval for CAIR SIP revisions. States may submit full SIP revisions that adopt the model CAIR cap-and-trade rules. If approved, these SIP revisions will fully replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP revisions. These SIP revisions will not replace the CAIR FIPs; however, the CAIR FIPs provide that, when approved, the provisions in these abbreviated SIP revisions will be used instead of or in conjunction with, as appropriate, the corresponding provisions of the CAIR FIPs (e.g., the NO <sup>X</sup> allowance allocation methodology). A State submitting a full SIP revision may either adopt regulations that are substantively identical to the model rules or incorporate by reference the model rules. CAIR provides that States may only make limited changes to the model rules if the States want to participate in the EPA-administered trading programs. A full SIP revision may change the model rules, only by altering their applicability and allowance allocation provisions to: 1. Include NO <sup>X</sup> SIP Call trading sources that are not EGUs under CAIR in the CAIR NO <sup>X</sup> ozone season trading program; 2. Provide for State allocation of NO <sup>X</sup> annual or ozone season allowances using a methodology chosen by the State; 3. Provide for State allocation of NO <sup>X</sup> annual allowances from the compliance supplement pool
(CSP)using the State's choice of allowed, alternative methodologies; or 4. Allow units that are not otherwise CAIR units to opt individually into the CAIR SO <sup>2</sup> , NO <sup>X</sup> annual, or NO <sup>X</sup> ozone season trading programs under the opt-in provisions in the model rules. An approved CAIR full SIP revision addressing EGUs' SO <sup>2</sup> , NO <sup>X</sup> annual, or NO <sup>X</sup> ozone season emissions will replace the CAIR FIP for that State for the respective EGU emissions. V. Analysis of Florida's CAIR SIP Submittal A. State Budgets for Allowance Allocations The CAIR NO <sup>X</sup> annual and ozone season budgets were developed from historical heat input data for EGUs. Using these data, EPA calculated annual and ozone season regional heat input values, which were multiplied by 0.15 pounds per million British thermal units (lb/mmBtu), for phase 1, and 0.125 lb/mmBtu, for phase 2, to obtain regional NO <sup>X</sup> budgets for 2009-2014 and for 2015 and thereafter, respectively. EPA derived the State NO <sup>X</sup> annual and ozone season budgets from the regional budgets using State heat input data adjusted by fuel factors. The CAIR State SO <sup>2</sup> budgets were derived by discounting the tonnage of emissions authorized by annual allowance allocations under the Acid Rain Program under title IV of the CAA. Under CAIR, each allowance allocated in the Acid Rain Program for the years in phase 1 of CAIR (2010 through 2014) authorizes 0.5 ton of SO <sup>2</sup> emissions in the CAIR trading program, and each Acid Rain Program allowance allocated for the years in phase 2 of CAIR (2015 and thereafter) authorizes 0.35 ton of SO <sup>2</sup> emissions in the CAIR trading program. In this action, EPA is proposing approval of Florida's SIP revision that adopts the budgets established for the State in CAIR, i.e., 99,445 (2009-2014) and 82,871 (2015-thereafter) tons for NO <sup>X</sup> annual emissions, 47,912 (2009-2014) and 39,926 (2015-thereafter) tons for NO <sup>X</sup> ozone season emissions, and 253,450 (2010-2014) and 177,415 (2015-thereafter) tons for SO <sup>2</sup> emissions. Florida's SIP revision sets these budgets as the total amounts of allowances available for allocation for each year under the EPA-administered cap-and-trade programs. Florida has committed to revising the definitions of “permitting authority” and “State” in its CAIR rules in order to ensure that allowances issued by all States with approved rules providing for participation in the respective EPA-administered cap-and-trade programs are fungible and can be traded and used by all sources in all these States, as intended. EPA discovered after review of other States' rules, but after Florida had adopted its CAIR rules, that there was an issue related to these definitions when they are revised to refer only to a specific State. In Florida's rules for CAIR, the EPA model trading rules were revised to limit all references to “permitting authority” to refer to the Florida Department of Environmental Protection. Similarly, references to “State” were limited to refer to Florida. These changes are acceptable in most, but not all, instances under the current model rules. In certain definitions in the model rules incorporated by Florida (i.e., “allocate” or “allocation,” “CAIR NO <sup>X</sup> allowance,” “CAIR SO <sup>2</sup> allowance,” and “CAIR NO <sup>X</sup> Ozone Season allowance”), it is important that the term “permitting authority” cover permitting authorities in all States that choose to participate in the respective EPA-administered trading programs and that the term “State” cover all such States. This is necessary to ensure that all allowances issued in each EPA-administered trading program are fungible and can be traded and used for compliance with the allowance-holding requirement in any State in the program. On May 24, 2007, EPA participated in a teleconference with Florida and outlined necessary definition revisions. EPA received a letter from Florida dated June 22, 2007, and a supplemental electronic mail submission on July 11, 2007, that provide a commitment to make these rule revisions in its CAIR rules in early 2008. Specifically, in the June 22, 2007, letter and supplemental submission on July 11, 2007, Florida commits to revising section 62-296.470(1) of Florida's rule to state that: the limitation of the “permitting authority” definition only to Florida does not apply when this term is used in the definitions of “‘allocate’ or ‘allocation’,” “CAIR NO <sup>X</sup> allowance,” “CAIR SO <sup>2</sup> allowance,” and “CAIR NO <sup>X</sup> Ozone Season allowance;” and the limitation of the “State” definition only to Florida does not apply when the term is used in the definitions of “CAIR NO <sup>X</sup> allowance,” “CAIR SO <sup>2</sup> allowance,” and “CAIR NO <sup>X</sup> Ozone Season allowance.” B. CAIR Cap-and-Trade Programs The CAIR NO <sup>X</sup> annual and ozone-season model trading rules both largely mirror the structure of the NO <sup>X</sup> SIP Call model trading rule in 40 CFR part 96, subparts A through I. While the provisions of the NO <sup>X</sup> annual and ozone-season model rules are similar, there are some differences. For example, the NO <sup>X</sup> annual model rule (but not the NO <sup>X</sup> ozone season model rule) provides for a CSP, which is discussed below and under which allowances may be awarded for early reductions of NO <sup>X</sup> annual emissions. As a further example, the NO <sup>X</sup> ozone season model rule reflects the fact that the CAIR NO <sup>X</sup> ozone season trading program replaces the NO <sup>X</sup> SIP Call trading program after the 2008 ozone season and is coordinated with the NO <sup>X</sup> SIP Call program. The NO <sup>X</sup> ozone season model rule provides incentives for early emissions reductions by allowing banked, pre-2009 NO <sup>X</sup> SIP Call allowances to be used for compliance in the CAIR NO <sup>X</sup> ozone-season trading program. In addition, States have the option of continuing to meet their NO <sup>X</sup> SIP Call requirement by participating in the CAIR NO <sup>X</sup> ozone season trading program and including all their NO <sup>X</sup> SIP Call trading sources in that program. The provisions of the CAIR SO <sup>2</sup> model rule are also similar to the provisions of the NO <sup>X</sup> annual and ozone season model rules. However, the SO <sup>2</sup> model rule is coordinated with the ongoing Acid Rain SO <sup>2</sup> cap-and-trade program under CAA title IV. The SO <sup>2</sup> model rule uses the title IV allowances for compliance, with each allowance allocated for 2010-2014 authorizing only 0.5 ton of emissions and each allowance allocated for 2015 and thereafter authorizing only 0.35 ton of emissions. Banked title IV allowances allocated for years before 2010 can be used at any time in the CAIR SO <sup>2</sup> cap-and-trade program, with each such allowance authorizing 1 ton of emissions. Title IV allowances are to be freely transferable among sources covered by the Acid Rain Program and sources covered by the CAIR SO <sup>2</sup> cap-and-trade program. EPA also used the CAIR model trading rules as the basis for the trading programs in the CAIR FIPs. The CAIR FIP trading rules are virtually identical to the CAIR model trading rules, with changes made to account for federal rather than state implementation. The CAIR model SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading rules and the respective CAIR FIP trading rules are designed to work together as integrated SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading programs. In the SIP revision, Florida chooses to implement its CAIR budgets by requiring EGUs to participate in EPA-administered cap-and-trade programs for SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season emissions. Florida has adopted a full SIP revision that adopts, with certain allowed changes discussed below, the CAIR model cap-and-trade rules for SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season emissions. C. Applicability Provisions for Non-EGU NO <sup>X</sup> SIP Call Sources In general, the CAIR model trading rules apply to any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time, since the later of November 15, 1990, or the start-up of the unit's combustion chamber, a generator with nameplate capacity of more than 25 MWe producing electricity for sale. States have the option of bringing in, for the CAIR NO <sup>X</sup> ozone season program only, those units in the State's NO <sup>X</sup> SIP Call trading program that are not EGUs as defined under CAIR. EPA advises States exercising this option to add the applicability provisions in the State's NO <sup>X</sup> SIP Call trading rule for non-EGUs to the applicability provisions in 40 CFR 96.304 in order to include in the CAIR NO <sup>X</sup> ozone season trading program all units required to be in the State's NO <sup>X</sup> SIP Call trading program that are not already included under 40 CFR 96.304. Under this option, the CAIR NO <sup>X</sup> ozone season program must cover all large industrial boilers and combustion turbines, as well as any small EGUs (i.e. units serving a generator with a nameplate capacity of 25 MWe or less) that the State currently requires to be in the NO <sup>X</sup> SIP Call trading program. Because Florida was not included in the NO <sup>X</sup> SIP Call trading program, Florida did not have an option of expanding the applicability provisions of the CAIR NO <sup>X</sup> ozone season trading program. D. NO <sup>X</sup> Allowance Allocations Under the NO <sup>X</sup> allowance allocation methodology in the CAIR model trading rules and in the CAIR FIP, NO <sup>X</sup> annual and ozone season allowances are allocated to units that have operated for five years, based on heat input data from a three-year period that are adjusted for fuel type by using fuel factors of 1.0 for coal, 0.6 for oil, and 0.4 for other fuels. The CAIR model trading rules and the CAIR FIP also provide a new unit set-aside from which units without five years of operation are allocated allowances based on the units' prior year emissions. States may establish in their SIP submissions a different NO <sup>X</sup> allowance allocation methodology that will be used to allocate allowances to sources in the States, if certain requirements are met concerning the timing of submission of units' allocations to the Administrator for recordation and the total amount of allowances allocated for each control period. In adopting alternative NO <sup>X</sup> allowance allocation methodologies, States have flexibility with regard to: 1. The cost to recipients of the allowances, which may be distributed for free or auctioned; 2. The frequency of allocations; 3. The basis for allocating allowances, which may be distributed, for example, based on historical heat input or electric and thermal output; and 4. The use of allowance set-asides and, if used, their size. Florida has chosen to replace the provisions of the CAIR NO <sup>X</sup> annual model trading rule concerning the allocation of NO <sup>X</sup> annual allowances with its own methodology. Florida has chosen to distribute NO <sup>X</sup> annual allowances based upon a methodology that is similar, but not identical, to that in the CAIR model trading rule for existing and new units. Under Florida's rule and the CAIR model rule, existing units are allocated NO <sup>X</sup> allowances in proportion to their “fuel-adjusted control period heat input” during the baseline period. However, in addition to the fuel adjustment factors used to calculate adjusted heat input in the CAIR model rule, Florida has also developed a separate 150% fuel factor for existing biomass-fired units that use best available control technology (BACT). Further, in Florida's rule, as in the CAIR model rule, new units are allocated NO <sup>X</sup> allowances in proportion to their “converted control period heat input.” However, unlike the CAIR model rule, Florida's rule categorizes new units as those commencing operation on or after January 1, 2007, (rather than January 1, 2001), and establishes a new unit set set-aside of five percent for all control years (rather than five percent through 2014 and three percent thereafter). Moreover, under Florida's rule, allocations are scheduled to be made in 2006, 2009, and every three years thereafter, with three-year blocks of allocations being made generally four years in advance. Florida's rule also limits the number of years for which permanently retired units are allocated allowances after retirement. Florida has chosen to replace the provisions of the CAIR NO <sup>X</sup> ozone season model trading rule concerning allowance allocations with its own methodology. Florida has chosen to distribute NO <sup>X</sup> ozone season allowances based upon the same allowance allocation methodology described above for NO <sup>X</sup> annual allowances. E. Allocation of NO <sup>X</sup> Allowances From Compliance Supplement Pool The CAIR rule establishes a CSP to provide an incentive for early reductions in NO <sup>X</sup> annual emissions. The CSP consists of 200,000 CAIR NO <sup>X</sup> annual allowances of vintage 2009 for the entire CAIR region, and a State's share of the CSP is based upon the projected magnitude of the emission reductions required by CAIR in that State. States may distribute CSP allowances, one allowance for each ton of early reduction, to sources that make NO <sup>X</sup> reductions during 2007 or 2008 beyond what is required by any applicable State or Federal emission limitation. States also may distribute CSP allowances based upon a demonstration of need for an extension of the 2009 deadline for implementing emission controls. The CAIR annual NO <sup>X</sup> model trading rule establishes specific methodologies for allocations of CSP allowances. States may choose an allowed, alternative CSP allocation methodology to be used to allocate CSP allowances to sources in the States. Florida has not chosen to modify the provisions of the CAIR NO <sup>X</sup> annual model trading rule concerning the allocation of allowances from the CSP. Florida has chosen to distribute CSP allowances using an allocation methodology that is the same as EPA's model rule. The CSP is an additional 8,335 annual NO <sup>X</sup> allowances given to the State for 2009, and there is no CSP for ozone-season allowances. F. Individual Opt-In Units The opt-in provisions of the CAIR SIP model trading rules allow certain non-EGUs (i.e., boilers, combustion turbines, and other stationary fossil-fuel-fired devices) that do not meet the applicability criteria for a CAIR trading program to participate voluntarily in (i.e., opt into) the CAIR trading program. A non-EGU may opt into one or more of the CAIR trading programs. In order to qualify to opt into a CAIR trading program, a unit must vent all emissions through a stack and be able to meet monitoring, recordkeeping, and recording requirements of 40 CFR part 75. The owners and operators seeking to opt a unit into a CAIR trading program must apply for a CAIR opt-in permit. If the unit is issued a CAIR opt-in permit, the unit becomes a CAIR unit, is allocated allowances, and must meet the same allowance-holding and emissions monitoring and reporting requirements as other units subject to the CAIR trading program. The opt-in provisions provide for two methodologies for allocating allowances for opt-in units, one methodology that applies to opt-in units in general and a second methodology that allocates allowances only to opt-in units that the owners and operators intend to repower before January 1, 2015. States have several options concerning the opt-in provisions. States may adopt the CAIR opt-in provisions entirely or may adopt them but exclude one of the methodologies for allocating allowances. States may also decline to adopt the opt-in provisions at all. Florida has chosen not to allow non-EGUs meeting certain requirements to opt into the CAIR NO <sup>X</sup> annual trading program. Florida has chosen not to allow non-EGUs meeting certain requirements to opt into the CAIR NO <sup>X</sup> ozone season trading program. Florida has chosen not to allow certain non-EGUs to opt into the CAIR SO <sup>2</sup> trading program. VI. Proposed Actions EPA is proposing to approve Florida's full CAIR SIP revision submitted on March 16, 2007. Under this SIP revision, Florida is choosing to participate in the EPA-administered cap-and-trade programs for SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season emissions. The SIP revision (revised as discussed above) meets the applicable requirements in 40 CFR 51.123(o) and (aa), with regard to NO <sup>X</sup> annual and NO <sup>X</sup> ozone season emissions, and 40 CFR 51.124(o), with regard to SO <sup>2</sup> emissions. Further, Florida has agreed to make the technical corrections to certain definitions as discussed above. Therefore, EPA is proposing to determine that the SIP, as revised, will meet the requirements of CAIR. As a consequence of the SIP approval, the Administrator of EPA will also issue, without providing an opportunity for a public hearing or an additional opportunity for written public comment, a final rule to withdraw the CAIR FIPs concerning SO <sup>2</sup> , NO <sup>X</sup> annual, NO <sup>X</sup> ozone season emissions for Florida. This action will delete and reserve 40 CFR 52.540 and 40 CFR 52.541. VII. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely proposes to approve State law as meeting Federal requirements and would impose no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this action proposes to approve pre-existing requirements under State law and would not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This proposal also does not have tribal implications because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This proposed action also does not have Federalism implications because it would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely proposes to approve a State rule implementing a Federal standard and will result, as a consequence of that approval, in the Administrator's withdrawal of the CAIR FIP. It does not alter the relationship or the distribution of power and responsibilities established in the CAA. This proposed rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it would approve a State rule implementing a Federal Standard. In reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule would not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Electric utilities, Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide. Authority: 42 U.S.C. 7401 *et seq.* Dated: July 25, 2007. J.I. Palmer, Jr., Regional Administrator, Region 4. [FR Doc. E7-14981 Filed 8-1-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2007-0251-200719; FRL-8449-3] Approval of Implementation Plans of Georgia: Clean Air Interstate Rule AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: EPA is proposing to approve a revision to the Georgia State Implementation Plan
(SIP)submitted on March 28, 2007. This revision addresses the requirements of EPA's Clean Air Interstate Rule (CAIR), promulgated on May 12, 2005, and subsequently revised on April 28, 2006, and December 13, 2006. EPA is proposing to determine that the SIP revision fully implements the CAIR requirements for Georgia. Therefore, as a consequence of the SIP approval, EPA will also withdraw the CAIR Federal Implementation Plans (CAIR FIPs) concerning sulfur dioxide (SO <sup>2</sup> ) and nitrogen oxides (NO <sup>X</sup> ) annual emissions for Georgia. The CAIR FIPs for all States in the CAIR region were promulgated on April 28, 2006, and subsequently revised on December 13, 2006. CAIR requires States to reduce emissions of SO <sup>2</sup> and NO <sup>X</sup> that significantly contribute to nonattainment of, and interfere with maintenance of, the national ambient air quality standards (NAAQS) for fine particulates and/or ozone in any downwind state. CAIR establishes State budgets for SO <sup>2</sup> and NO <sup>X</sup> and requires States to submit SIP revisions that implement these budgets in States that EPA concluded did contribute to nonattainment in downwind states. States have the flexibility to choose which control measures to adopt to achieve the budgets, including participating in the EPA-administered cap-and-trade programs. In the SIP revision that EPA is proposing to approve, Georgia would meet CAIR requirements by participating in the EPA-administered cap-and-trade programs addressing SO <sup>2</sup> and NO <sup>X</sup> annual emissions. DATES: Comments must be received on or before September 4, 2007. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-OAR-2007-0251, by one of the following methods: 1. *http://www.regulations.gov* : Follow the online instructions for submitting comments. 2. *E-mail:* *harder.stacy@epa.gov* . 3. *Fax:* 404-562-9019. 4. *Mail:* “EPA-R04-OAR-2007-0251,” 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. 5. *Hand Delivery or Courier:* Stacy Harder, 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. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding federal holidays. *Instructions:* Direct your comments to Docket ID No. “EPA-R04-OAR-2007-0251.” EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *http://www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit through *http://www.regulations.gov* or e-mail, information that you consider to be CBI or otherwise protected. The *http://www.regulations.gov* website is an “anonymous access” system, which means EPA will not know your identity or contact information, unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *http://www.regulations.gov* , your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters and any form of encryption and should be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm.* *Docket:* All documents in the electronic docket are listed in the *http://www.regulations.gov* index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in *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: If you have questions concerning this proposal, please contact Ms. Stacy Harder, 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)562-9042. Ms. Harder can also be reached via electronic mail at *harder.stacy@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. What Actions Is EPA Proposing To Take? II. What Is the Regulatory History of CAIR and the CAIR FIPs? III. What Are the General Requirements of CAIR and the CAIR FIPs? IV. What Are the Types of CAIR SIP Submittals? V. Analysis of Georgia's CAIR SIP Submittal A. State Budgets for Allowance Allocations B. CAIR Cap-and-Trade Programs C. Applicability Provisions for Non-EGU NO <sup>X</sup> SIP Call Sources D. NO <sup>X</sup> Allowance Allocations E. Allocation of NO <sup>X</sup> Allowances From Compliance Supplement Pool F. Individual Opt-In Units VI. Proposed Actions VII. Statutory and Executive Order Reviews I. What Action Is EPA Proposing to Take? EPA is proposing to approve a revision to Georgia's SIP, submitted on March 28, 2007. In its SIP revision, Georgia would meet CAIR requirements by requiring certain electric generating units
(EGUs)to participate in the EPA-administered State CAIR cap-and-trade programs addressing SO <sup>2</sup> and NO <sup>X</sup> annual emissions. EPA is proposing to determine that the SIP, as revised, will meet the applicable requirements of CAIR. Any final action approving the SIP will be taken by the Regional Administrator for Region 4. As a consequence of the SIP approval, the Administrator of EPA will also issue a final rule to withdraw the FIPs concerning SO <sup>2</sup> and NO <sup>X</sup> annual emissions for Georgia. This action will delete and reserve 40 CFR 52.584 and 40 CFR 52.585. The withdrawal of the CAIR FIPs for Georgia is a conforming amendment that must be made once the SIP is approved because EPA's authority to issue the FIPs was premised on a deficiency in the SIP for Georgia. Once the SIP is fully approved, EPA no longer has authority for the FIPs. Thus, EPA will not have the option of maintaining the FIPs following the full SIP approval. Accordingly, EPA does not intend to offer an opportunity for a public hearing or an additional opportunity for written public comment on the withdrawal of the FIPs. II. What Is the Regulatory History of the CAIR and the CAIR FIPs? CAIR was published by EPA on May 12, 2005 (70 FR 25162). In this rule, EPA determined that 28 States and the District of Columbia contribute significantly to nonattainment and interfere with maintenance of the NAAQS for fine particles (PM <sup>2.5</sup> ) and/or 8-hour ozone in downwind States in the eastern part of the country. As a result, EPA required those upwind States to revise their SIPs to include control measures that reduce emissions of SO <sup>2</sup> , which is a precursor to PM <sup>2.5</sup> formation, and/or NO <sup>X</sup> , which is a precursor to both ozone and PM <sup>2.5</sup> formation. For jurisdictions that contribute significantly to downwind PM <sup>2.5</sup> nonattainment, CAIR sets annual State-wide emission reduction requirements (i.e., budgets) for SO <sup>2</sup> and annual State-wide emission reduction requirements for NO <sup>X</sup> . Similarly, for jurisdictions that contribute significantly to 8-hour ozone nonattainment, CAIR sets State-wide emission reduction requirements for NO <sup>X</sup> for the ozone season (May 1st to September 30th). Under CAIR, States may implement these reduction requirements by participating in the EPA-administered cap-and-trade programs or by adopting any other control measures. CAIR explains to subject States what must be included in SIPs to address the requirements of section 110(a)(2)(D) of the Clean Air Act
(CAA)with regard to interstate transport with respect to the 8-hour ozone and PM <sup>2.5</sup> NAAQS. EPA made national findings, effective on May 25, 2005, that the States had failed to submit SIPs meeting the requirements of section 110(a)(2)(D). The SIPs were due in July 2000, three years after the promulgation of the 8-hour ozone and PM <sup>2.5</sup> NAAQS. These findings started a two-year clock for EPA to promulgate a FIP to address the requirements of section 110(a)(2)(D). Under CAA section 110(c)(1), EPA may issue a FIP anytime after such findings are made and must do so within two years, unless a SIP revision correcting the deficiency is approved by EPA before the FIP is promulgated. On April 28, 2006, EPA promulgated FIPs for all States covered by CAIR in order to ensure the emissions reductions required by CAIR are achieved on schedule. Each CAIR State is subject to the FIPs until the State fully adopts, and EPA approves, a SIP revision meeting the requirements of CAIR. The CAIR FIPs require EGUs to participate in the EPA-administered CAIR SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading programs, as appropriate. The CAIR FIP SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading programs impose essentially the same requirements as, and are integrated with, the respective CAIR SIP trading programs. The integration of the FIP and SIP trading programs means that these trading programs will work together to create effectively a single trading program for each regulated pollutant (SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season) in all States covered by the CAIR FIP or SIP trading program for that pollutant. The CAIR FIPs also allow States to submit abbreviated SIP revisions that, if approved by EPA, will automatically replace or supplement certain CAIR FIP provisions (e.g., the methodology for allocating NO <sup>X</sup> allowances to sources in the State), while the CAIR FIP remains in place for all other provisions. On April 28, 2006, EPA published two additional CAIR-related final rules that added the States of Delaware and New Jersey to the list of States subject to CAIR for PM <sup>2.5</sup> and announced EPA's final decisions on reconsideration of five issues, without making any substantive changes to the CAIR requirements. III. What are the General Requirements of CAIR and the CAIR FIPs? CAIR establishes State-wide emission budgets for SO <sup>2</sup> and NO <sup>X</sup> and is to be implemented in two phases. The first phase of NO <sup>X</sup> reductions starts in 2009 and continues through 2014, while the first phase of SO <sup>2</sup> reductions starts in 2010 and continues through 2014. The second phase of reductions for both NO <sup>X</sup> and SO <sup>2</sup> starts in 2015 and continues thereafter. CAIR requires States to implement the budgets by either:
(1)Requiring EGUs to participate in the EPA-administered cap-and-trade programs; or
(2)adopting other control measures of the State's choosing and demonstrating that such control measures will result in compliance with the applicable State SO <sup>2</sup> and NO <sup>X</sup> budgets. The May 12, 2005, and April 28, 2006, CAIR rules provide model rules that States must adopt (with certain limited changes, if desired) if they want to participate in the EPA-administered trading programs. With two exceptions, only States that choose to meet the requirements of CAIR through methods that exclusively regulate EGUs are allowed to participate in the EPA-administered trading programs. One exception is for States that adopt the opt-in provisions of the model rules to allow non-EGUs individually to opt into the EPA-administered trading programs. The other exception is for States that include all non-EGUs from their NO <sup>X</sup> SIP Call trading programs in their CAIR NO <sup>X</sup> ozone season trading programs. IV. What are the Types of CAIR SIP Submittals? States have the flexibility to choose the type of control measures they will use to meet the requirements of CAIR. EPA anticipates that most States will choose to meet the CAIR requirements by selecting an option that requires EGUs to participate in the EPA-administered CAIR cap-and-trade programs. For such States, EPA has provided two approaches for submitting and obtaining approval for CAIR SIP revisions. States may submit full SIP revisions that adopt the model CAIR cap-and-trade rules. If approved, these SIP revisions will fully replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP revisions. These SIP revisions will not replace the CAIR FIPs; however, the CAIR FIPs provide that, when approved, the provisions in these abbreviated SIP revisions will be used instead of or in conjunction with, as appropriate, the corresponding provisions of the CAIR FIPs (e.g., the NO <sup>X</sup> allowance allocation methodology). A State submitting a full SIP revision may either adopt regulations that are substantively identical to the model rules or incorporate by reference the model rules. CAIR provides that States may only make limited changes to the model rules, if the States want to participate in the EPA-administered trading programs. A full SIP revision may change the model rules only by altering their applicability and allowance allocation provisions to: 1. Include NO <sup>X</sup> SIP Call trading sources that are not EGUs under CAIR in the CAIR NO <sup>X</sup> ozone season trading program; 2. Provide for State allocation of NO <sup>X</sup> annual or ozone season allowances using a methodology chosen by the State; 3. Provide for State allocation of NO <sup>X</sup> annual allowances from the compliance supplement pool
(CSP)using the State's choice of allowed, alternative methodologies; or 4. Allow units that are not otherwise CAIR units to opt individually into the CAIR SO <sup>2</sup> , NO <sup>X</sup> annual, or NO <sup>X</sup> ozone season trading programs under the opt-in provisions in the model rules. An approved CAIR full SIP revision addressing EGUs' SO <sup>2</sup> , NO <sup>X</sup> annual, or NO <sup>X</sup> ozone season emissions will replace the CAIR FIP for that State for the respective EGU emissions. V. Analysis of Georgia's CAIR SIP Submittal A. State Budgets for Allowance Allocations The CAIR NO <sup>X</sup> annual and ozone season budgets were developed from historical heat input data for EGUs. Using these data, EPA calculated annual and ozone season regional heat input values, which were multiplied by 0.15 pounds per million British thermal units (0.15lb/mmBtu), for phase 1, and 0.125 lb/mmBtu, for phase 2, to obtain regional NO <sup>X</sup> budgets for 2009-2014 and for 2015 and thereafter, respectively. EPA derived the State NO <sup>X</sup> annual and ozone season budgets from the regional budgets using State heat input data adjusted by fuel factors. The CAIR State SO <sup>2</sup> budgets were derived by discounting the tonnage of emissions authorized by annual allowance allocations under the Acid Rain Program under title IV of the CAA. Under CAIR, each allowance allocated in the Acid Rain Program for the years in phase 1 of CAIR (2010 through 2014) authorizes 0.5 ton of SO <sup>2</sup> emissions in the CAIR trading program, and each Acid Rain Program allowance allocated for the years in phase 2 of CAIR (2015 and thereafter) authorizes 0.35 ton of SO <sup>2</sup> emissions in the CAIR trading program. In this action, EPA is proposing approval of Georgia's SIP revision that adopts the budgets established for the State in CAIR, i.e., 66,321 (2009-2014) and 55,268 (2015-thereafter) tons for NO <sup>X</sup> annual emissions, and 213,057 (2010-2014) and 149,140 (2015-thereafter) tons for SO <sup>2</sup> emissions. Georgia's SIP revision sets these budgets as the total amounts of allowances available for allocation for each year under the EPA-administered cap-and-trade programs. B. CAIR Cap-and-Trade Programs The CAIR NO <sup>X</sup> annual and ozone-season model trading rules both largely mirror the structure of the NO <sup>X</sup> SIP Call model trading rule in 40 CFR part 96, subparts A through I. While the provisions of the NO <sup>X</sup> annual and ozone-season model rules are similar, there are some differences. For example, the NO <sup>X</sup> annual model rule (but not the NO <sup>X</sup> ozone season model rule) provides for a CSP, which is discussed below and under which allowances may be awarded for early reductions of NO <sup>X</sup> annual emissions. As a further example, the NO <sup>X</sup> ozone season model rule reflects the fact that the CAIR NO <sup>X</sup> ozone season trading program replaces the NO <sup>X</sup> SIP Call trading program after the 2008 ozone season and is coordinated with the NO <sup>X</sup> SIP Call program. The NO <sup>X</sup> ozone season model rule provides incentives for early emissions reductions by allowing banked, pre-2009 NO <sup>X</sup> SIP Call allowances to be used for compliance in the CAIR NO <sup>X</sup> ozone-season trading program. In addition, States have the option of continuing to meet their NO <sup>X</sup> SIP Call requirement by participating in the CAIR NO <sup>X</sup> ozone season trading program and including all their NO <sup>X</sup> SIP Call trading sources in that program. The provisions of the CAIR SO <sup>2</sup> model rule are also similar to the provisions of the NO <sup>X</sup> annual and ozone season model rules. However, the SO <sup>2</sup> model rule is coordinated with the ongoing Acid Rain SO <sup>2</sup> cap-and-trade program under CAA title IV. The SO <sup>2</sup> model rule uses the title IV allowances for compliance, with each allowance allocated for 2010-2014 authorizing only 0.50 ton of emissions and each allowance allocated for 2015 and thereafter authorizing only 0.35 ton of emissions. Banked title IV allowances allocated for years before 2010 can be used at any time in the CAIR SO <sup>2</sup> cap-and-trade program, with each such allowance authorizing one ton of emissions. Title IV allowances are to be freely transferable among sources covered by the Acid Rain Program and sources covered by the CAIR SO <sup>2</sup> cap-and-trade program. EPA also used the CAIR model trading rules as the basis for the trading programs in the CAIR FIPs. The CAIR FIP trading rules are virtually identical to the CAIR model trading rules, with changes made to account for federal rather than state implementation. The CAIR model SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading rules and the respective CAIR FIP trading rules are designed to work together as integrated SO <sup>2</sup> , NO <sup>X</sup> annual, and NO <sup>X</sup> ozone season trading programs. In the SIP revision, Georgia chooses to implement its CAIR budgets by requiring EGUs to participate in EPA-administered cap-and-trade programs for SO <sup>2</sup> and NO <sup>X</sup> annual emissions. Georgia has adopted a full SIP revision that adopts, with certain allowed changes discussed below, the CAIR model cap-and-trade rules for SO <sup>2</sup> , and NO <sup>X</sup> annual emissions. C. Applicability Provisions for Non-EGU NO <sup>X</sup> SIP Call Sources In general, the CAIR model trading rules apply to any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time, since the later of November 15, 1990, or the start-up of the unit's combustion chamber, a generator with nameplate capacity of more than 25 MWe producing electricity for sale. States have the option of bringing in, for the CAIR NO <sup>X</sup> ozone season program only, those units in the State's NO <sup>X</sup> SIP Call trading program that are not EGUs as defined under CAIR. EPA advises States exercising this option to add the applicability provisions in the State's NO <sup>X</sup> SIP Call trading rule for non-EGUs to the applicability provisions in 40 CFR 96.304 in order to include in the CAIR NO <sup>X</sup> ozone season trading program all units required to be in the State's NO <sup>X</sup> SIP Call trading program that are not already included under 40 CFR 96.304. Under this option, the CAIR NO <sup>X</sup> ozone season program must cover all large industrial boilers and combustion turbines, as well as any small EGUs (i.e. units serving a generator with a nameplate capacity of 25 MWe or less) that the State currently requires to be in the NO <sup>X</sup> SIP Call trading program. Because Georgia is not subject to the CAIR NO <sup>X</sup> ozone season requirements, Georgia will not participate in the CAIR NO <sup>X</sup> ozone season trading program and therefore did not have an option of expanding the applicability provisions of the CAIR NO <sup>X</sup> ozone season trading program to include all non-EGUs in the State's NO <sup>X</sup> SIP Call trading program. D. NO <sup>X</sup> Allowance Allocations Under the NO <sup>X</sup> allowance allocation methodology in the CAIR model trading rules and in the CAIR FIP, NO <sup>X</sup> annual and ozone season allowances are allocated to units that have operated for five years, based on heat input data from a three-year period that are adjusted for fuel type by using fuel factors of 1.0 for coal, 0.6 for oil, and 0.4 for other fuels. The CAIR model trading rules and the CAIR FIP also provide a new unit set-aside from which units without five years of operation are allocated allowances based on the units' prior year emissions. States may establish in their SIP submissions a different NO <sup>X</sup> allowance allocation methodology that will be used to allocate allowances to sources in the States, if certain requirements are met concerning the timing of submission of units' allocations to the Administrator for recordation and the total amount of allowances allocated for each control period. In adopting alternative NO <sup>X</sup> allowance allocation methodologies, States have flexibility with regard to: 1. The cost to recipients of the allowances, which may be distributed for free or auctioned; 2. The frequency of allocations; 3. The basis for allocating allowances, which may be distributed, for example, based on historical heat input or electric and thermal output; and 4. The use of allowance set-asides and, if used, their size. Georgia has chosen to replace the provisions of the CAIR NO <sup>X</sup> annual model trading rule concerning the allocation of NO <sup>X</sup> annual allowances with its own methodology. Georgia has chosen to distribute NO <sup>X</sup> annual allowances based upon allocation methods for both existing and new units. Georgia defines an existing unit as one that commences operation prior to January 1, 2006, rather than 2001 as in EPA's model rule. Georgia defines new sources as those that have commenced operation on or after January 1, 2006, and do not yet have a baseline heat input. Under Georgia's cap and trade program, allowances will be allocated to EGUs in an amount no greater than the NO <sup>X</sup> budget established in EPA's model rule. Allocations are based on the highest annual amount of heat input during a baseline period, using heat input figures that are fuel-adjusted as set forth in EPA's model rule. Allowances are initially allocated for 2010 through 2011 and are allocated on a year-by-year basis, about three years in advance, for 2012 and each subsequent year. The baseline period for initial allocations is 2001-2005, and will be updated annually for subsequent allocations. For years 2010 and thereafter, 97 percent of the budget will be allocated to existing sources, with the remaining three percent allocated to new sources. A new-unit set aside will be established for each control period, and will be allocated CAIR NO <sup>X</sup> allowances equal to 1,990 and 1,658 for control periods 2009-2014, and 2015 and thereafter, respectively. However, the new-unit set aside provisions in Georgia's rule contain certain cross-citation errors and, for example (in Rule 391-3-1.02(12)(f)(3)(iii)), inadvertently fail to reference the provisions establishing the size of the new-unit set aside. Further, the allowance recordation provisions in Georgia's rule contain certain citation errors and establish deadlines for the EPA Administrator's recordation of the allowance allocations in the allowance tracking system that are inconsistent with the allocation schedule established in Georgia's rule. While the allocation schedule requires allocations to be made about three years in advance, the recordation schedule (in Rule 391-3-1-.02(g)(1)(i) and (ii)) does not require allocations to be recorded in advance at all. Georgia indicated in its response to comments in its CAIR SIP rulemaking that the State will revise the rule to correct all of these errors. *See* Responses to Comments Received During the Public Comment Period Regarding Proposed Revisions to Air Quality Rules, Chapter 391-3-1 at C.-10 through C-11 (February 12, 2007). Moreover, EPA interprets Georgia's existing rule to limit total annual allocations to new units to the amount of the allowances in the applicable new-unit set aside and intends to record allowances in a manner consistent with the allocation schedule. E. Allocation of NO <sup>X</sup> Allowances From Compliance Supplement Pool The CAIR rule establishes a CSP to provide an incentive for early reductions in NO <sup>X</sup> annual emissions. The CSP consists of 200,000 CAIR NO <sup>X</sup> annual allowances of vintage 2009 for the entire CAIR region, and a State's share of the CSP is based upon the projected magnitude of the emission reductions required by CAIR in that State. States may distribute CSP allowances, one allowance for each ton of early reduction, to sources that make NO <sup>X</sup> reductions during 2007 or 2008 beyond what is required by any applicable State or Federal emission limitation. States also may distribute CSP allowances based upon a demonstration of need for an extension of the 2009 deadline for implementing emission controls. The CAIR annual NO <sup>X</sup> model trading rule establishes specific methodologies for allocations of CSP allowances. States may choose an allowed, alternative CSP allocation methodology to be used to allocate CSP allowances to sources in the States. Georgia has not chosen to modify the provisions of the CAIR NO <sup>X</sup> annual model trading rule concerning the allocation of allowances from the CSP. Georgia has chosen to distribute CSP allowances using an allocation methodology that is the same as EPA's model rule. The CSP provides up to 12,397 CAIR NO <sup>X</sup> annual allowances to be allocated by the State for 2009. F. Individual Opt-In Units The opt-in provisions of the CAIR SIP model trading rules allow certain non-EGUs (i.e., boilers, combustion turbines, and other stationary fossil-fuel-fired devices) that do not meet the applicability criteria for a CAIR trading program to participate voluntarily in (i.e., opt into) the CAIR trading program. A non-EGU may opt into one or more of the CAIR trading programs. In order to qualify to opt into a CAIR trading program, a unit must vent all emissions through a stack and be able to meet monitoring, recordkeeping, and recording requirements of 40 CFR part 75. The owners and operators seeking to opt a unit into a CAIR trading program must apply for a CAIR opt-in permit. If the unit is issued a CAIR opt-in permit, the unit becomes a CAIR unit, is allocated allowances, and must meet the same allowance-holding and emissions monitoring and reporting requirements as other units subject to the CAIR trading program. The opt-in provisions provide for two methodologies for allocating allowances for opt-in units, one methodology that applies to opt-in units in general and a second methodology that allocates allowances only to opt-in units that the owners and operators intend to repower before January 1, 2015. States have several options concerning the opt-in provisions. States may adopt the CAIR opt-in provisions entirely or may adopt them but exclude one of the methodologies for allocating allowances. States may also decline to adopt the opt-in provisions at all. Georgia has chosen not to allow non-EGUs meeting certain requirements to opt into the CAIR NO <sup>X</sup> annual trading program. Georgia has chosen not to allow certain non-EGUs to opt into the CAIR SO <sup>2</sup> trading program. VI. Proposed Actions EPA is proposing to approve Georgia's full CAIR SIP revision submitted on March 28, 2007. Under this SIP revision, Georgia is choosing to participate in the EPA-administered cap-and-trade programs for SO 2 and NO X annual emissions. The SIP revision (interpreted by EPA as discussed above) meets the applicable requirements in 40 CFR 51.123(o) and (aa), with regard to NO X annual emissions, and 40 CFR 51.124(o), with regard to SO 2 emissions. Further, Georgia has agreed to make the technical corrections discussed above to clarify the allowance allocation procedures and make the allowance recordation procedures consistent with the allocation procedures. Therefore, EPA is proposing to determine that the SIP, as revised, will meet the requirements of CAIR. As a consequence of the SIP approval, the Administrator of EPA will also issue, without providing an opportunity for a public hearing or an additional opportunity for written public comment, a final rule to withdraw the CAIR FIPs concerning SO 2 and NO X annual emissions for Georgia. This action will delete and reserve 40 CFR 52.584 and 40 CFR 52.585. VII. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely proposes to approve State law as meeting Federal requirements and would impose no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this action proposes to approve pre-existing requirements under State law and would not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This proposal also does not have tribal implications because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This proposed action also does not have Federalism implications because it would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely proposes to approve a State rule implementing a Federal standard and will result, as a consequence of that approval, in the Administrator's withdrawal of the CAIR FIP. It does not alter the relationship or the distribution of power and responsibilities established in the CAA. This proposed rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it would approve a State rule implementing a Federal Standard. In reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule would not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Electric utilities, Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide. Authority: 42 U.S.C. 7401 *et seq.* Dated: July 25, 2007. J.I. Palmer, Jr., Regional Administrator, Region 4. [FR Doc. E7-15055 Filed 8-1-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R04-OAR-2007-0548-200728; FRL-8449-4] Approval and Promulgation of Implementation Plans and Designations of Areas for Air Quality Planning Purposes; Georgia: Redesignation of the Macon 8-Hour Ozone Nonattainment Area to Attainment for Ozone AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: On June 15, 2007, the State of Georgia, through the Georgia Environmental Protection Division (EPD), submitted a request to redesignate the Macon 8-hour ozone nonattainment area to attainment for the 8-hour ozone National Ambient Air Quality Standard (NAAQS); and to approve a State Implementation Plan
(SIP)revision containing a maintenance plan for the Macon Area. The Macon 8-hour ozone area is comprised of Bibb County, and a portion of Monroe County located in middle Georgia (hereafter referred to as the “Macon Area”). In this action, EPA is proposing to approve Georgia's 8-hour ozone redesignation request for the Macon Area. Additionally, EPA is proposing to approve the 8-hour ozone maintenance plan for the Macon Area, including the regional motor vehicle emissions budgets (MVEBs) for nitrogen oxides (NO <sup>X</sup> ) and volatile organic compounds (VOCs). This proposed approval of Georgia's redesignation request is based on EPA's determination that Georgia has demonstrated that the Macon Area has met the criteria for redesignation to attainment specified in the Clean Air Act (CAA), including the determination that the entire Macon 8-hour ozone nonattainment area has attained the 8-hour ozone standard. In this action, EPA is also describing the status of its transportation conformity adequacy determination for the new regional MVEBs for 2020 that are contained in the 8-hour ozone maintenance plan for the Macon Area. DATES: Comments must be received on or before September 4, 2007. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-OAR-2007-0548, by one of the following methods:
(a)*http://www.regulations.gov:* Follow the on-line instructions for submitting comments.
(b)*E-mail:* *Harder.Stacy@epa.gov* .
(c)*Fax:*
(404)562-9019.
(d)*Mail:* EPA-R04-OAR-2007-0548, 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.
(e)*Hand Delivery or Courier:* Stacy Harder, 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. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal holidays. *Instructions:* Direct your comments to Docket ID No. EPA-R04-OAR-2007-0548. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *http://www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit through *http://www.regulations.gov* or e-mail, information that you consider to be CBI or otherwise protected. The *http://www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *http://www.regulations.gov* , your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm* . *Docket:* All documents in the electronic docket are listed in the *http://www.regulations.gov* index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in *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: Ms. Stacy Harder of the Regulatory Development Section at the Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Ms. Harder's telephone number is
(404)562-9042. She can also be reached via electronic mail at *harder.stacy@epa.gov* . SUPPLEMENTARY INFORMATION: Table of Contents I. What Proposed Actions Is EPA Taking? II. What Is the Background for EPA's Proposed Actions? III. What Are the Criteria for Redesignation? IV. Why Is EPA Proposing These Actions? V. What Is the Effect of EPA's Proposed Actions? VI. What Is EPA's Analysis of the Request? VII. What Are the Proposed Regional MVEBs for the Macon Area? VIII. What Is the Status of EPA's Adequacy Determination for MVEBs for the Year 2020 for the Macon Area? IX. Proposed Action on the Redesignation Request and Maintenance Plan SIP Revision Including Proposed Approval of the 2020 MVEBs X. Statutory and Executive Order Reviews I. What Proposed Actions Is EPA Taking? EPA is proposing to take three related actions which are summarized below and described in greater detail throughout this notice of proposed rulemaking:
(1)To redesignate the Macon Area to attainment for the 8-hour ozone NAAQS;
(2)to approve Georgia's 8-hour ozone maintenance plan into the Georgia SIP, including the associated MVEBs; and
(3)to notify the public of the status of EPA's adequacy determination for the Macon Area MVEBs. First, EPA is proposing to determine that the Macon Area has attained the 8-hour ozone standard, and that the Macon Area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. EPA is now proposing to approve a request to change the legal designation of the Macon Area from nonattainment to attainment for the 8-hour ozone NAAQS. Second, EPA is proposing to approve Georgia's 8-hour ozone maintenance plan for the Macon Area (such approval being one of the CAA criteria for redesignation to attainment status). The maintenance plan is designed to help keep the Macon Area in attainment for the 8-hour ozone NAAQS through 2020. Consistent with the CAA, the maintenance plan that EPA is proposing to approve today also includes 2020 regional MVEBs for NO <sup>X</sup> and VOCs. Therefore, EPA is proposing to approve into the Georgia SIP the 2020 regional MVEBs that are included as part of Georgia's maintenance plan. These regional MVEBs apply to the entire Macon Area. Third, EPA is notifying the public of the status of EPA's adequacy process for the newly-established 2020 MVEBs for the Macon Area. The adequacy comment period for the Macon Area's 2020 MVEBs began on June 21, 2007, with EPA's posting of the availability of this submittal on EPA's Adequacy Web site ( *http://www.epa.gov/otaq/stateresources/transconf/currsips.htm* ). The adequacy comment period for these MVEBs closed on July 23, 2007. No adverse comments were received on this submittal during the adequacy public comment period. Please see section VIII of this rulemaking for further explanation of this process, and for more details on the MVEBs. Today's notice of proposed rulemaking is in response to Georgia's June 15, 2007, SIP submittal. The June 15, 2007, submittal requested redesignation of the Macon Area, and included a SIP revision addressing the specific issues summarized above, and the necessary elements for redesignation described in section 107(d)(3)(E) of the CAA. II. What Is the Background for EPA's Proposed Actions? Ground-level ozone is not emitted directly by sources. Rather, emissions of NO <sup>X</sup> and VOCs react in the presence of sunlight to form ground-level ozone. NO <sup>X</sup> and VOCs are referred to as precursors of ozone. The CAA establishes a process for air quality management through the NAAQS. On July 18, 1997, EPA promulgated a revised 8-hour ozone standard of 0.08 parts per million (ppm). This new standard is more stringent than the previous 1-hour ozone standard. Under EPA regulations at 40 CFR part 50, the 8-hour ozone standard is attained when the 3-year average of the annual fourth highest daily maximum 8-hour average ambient air quality ozone concentration is less than or equal to 0.08 ppm (i.e., 0.084 ppm when rounding is considered). (See, 69 FR 23857 (April 30, 2004) for further information.) Ambient air quality monitoring data for the 3-year period must meet a data completeness requirement. The ambient air quality monitoring data completeness requirement is met when the average percent of days with valid ambient monitoring data is greater than 90 percent, and no single year has less than 75 percent data completeness as determined in Appendix I of part 50. Specifically, section 2.3 of 40 CFR part 50, Appendix I, “Comparisons with the Primary and Secondary Ozone Standards” states: “The primary and secondary ozone ambient air quality standards are met at an ambient air quality monitoring site when the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentration is less than or equal to 0.08 ppm. The number of significant figures in the level of the standard dictates the rounding convention for comparing the computed 3-year average annual fourth-highest daily maximum 8-hour average ozone concentration with the level of the standard. The third decimal place of the computed value is rounded, with values equal to or greater than 5 rounding up. Thus, a computed 3-year average ozone concentration of 0.085 ppm is the smallest value that is greater than 0.08 ppm.” The CAA required EPA to designate as nonattainment any area that was violating the 8-hour ozone NAAQS based on the three most recent years of ambient air quality data. The Macon 8-hour ozone nonattainment area was designated using 2001-2003 ambient air quality data. The **Federal Register** document making these designations was signed on April 15, 2004, and published on April 30, 2004 (69 FR 23857). The CAA contains two sets of provisions—subpart 1 and subpart 2—that address planning and control requirements for ozone nonattainment areas. (Both are found in title I, part D.) Subpart 1 (which EPA refers to as “basic” nonattainment) contains general, less prescriptive, requirements for nonattainment areas for any pollutant—including ozone—governed by a NAAQS. Subpart 2 (which EPA refers to as “classified” nonattainment) provides more specific requirements for certain ozone nonattainment areas. Some 8-hour ozone nonattainment areas are subject only to the provisions of subpart 1. Other 8-hour ozone nonattainment areas are also subject to the provisions of subpart 2. Under EPA's Phase 1 8-hour ozone implementation rule (69 FR 23857) (Phase 1 Rule), signed on April 15, 2004, and published April 30, 2004, an area was classified under subpart 2 based on its 8-hour ozone design value (i.e., the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations), if it had a 1-hour design value at or above 0.121 ppm (the lowest 1-hour design value in Table 1 of subpart 2). All other areas are covered under subpart 1, based upon their 8-hour ambient air quality design values. On April 30, 2004, EPA designated the Macon Area as a “basic” 8-hour ozone nonattainment area (see, 69 FR 23857, April 30, 2004). On June 15, 2007, when Georgia submitted its final redesignation request, the Macon Area was classified under subpart 1 of the CAA, and was obligated to meet only the subpart 1 requirements. Various aspects of EPA's Phase 1 8-hour ozone implementation rule were challenged in court. On December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit Court) vacated EPA's Phase 1 Implementation Rule for the 8-hour Ozone Standard (69 FR 23951, April 30, 2004). *South Coast Air Quality Management Dist. (SCAQMD)* v. *EPA,* 472 F.3d 882 (DC Cir. 2006). On June 8, 2007, in response to several petitions for rehearing, the DC Circuit Court clarified that the Phase 1 Rule was vacated only with regard to those parts of the Rule that had been successfully challenged. Therefore, the Phase 1 Rule provisions related to classifications for areas currently classified under subpart 2 of title I, part D of the CAA as 8-hour nonattainment areas, the 8-hour attainment dates and the timing for emissions reductions needed for attainment of the 8-hour ozone NAAQS remain effective. The June 8th decision left intact the Court's rejection of EPA's reasons for implementing the 8-hour standard in certain nonattainment areas under subpart 1 in lieu of subpart 2. By limiting the vacatur, the Court let stand EPA's revocation of the 1-hour standard and those anti-backsliding provisions of the Phase 1 Rule that had not been successfully challenged. The June 8th decision reaffirmed the December 22, 2006, decision that EPA had improperly failed to retain measures required for 1-hour nonattainment areas under the anti-backsliding provisions of the regulations:
(1)Nonattainment area New Source Review
(NSR)requirements based on an area's 1-hour nonattainment classification;
(2)Section 185 penalty fees for 1-hour severe or extreme nonattainment areas; and
(3)measures to be implemented pursuant to section 172(c)(9) or 182(c)(9) of the CAA, on the contingency of an area not making reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain that NAAQS. The June 8th decision clarified that the Court's reference to conformity requirements for anti-backsliding purposes was limited to requiring the continued use of 1-hour motor vehicle emissions budgets until 8-hour budgets were available for 8-hour conformity determinations, which is already required under EPA's conformity regulations. The Court thus clarified that 1-hour conformity determinations are not required for anti-backsliding purposes. This section sets forth EPA's views on the potential effect of the Court's rulings on this proposed redesignation action. For the reasons set forth below, EPA does not believe that the Court's rulings alter any requirements relevant to this redesignation action so as to preclude redesignation, and do not prevent EPA from proposing or ultimately finalizing this redesignation. EPA believes that the Court's December 22, 2006, and June 8, 2007, decisions impose no impediment to moving forward with redesignation of the Macon Area to attainment. Even in light of the Court's decisions, redesignation is appropriate under the relevant redesignation provisions of the CAA and long-standing policies regarding redesignation requests. With respect to the 8-hour standard, the Court's ruling rejected EPA's reasons for classifying areas under subpart 1 for the 8-hour standard, and remanded that matter to the Agency. Consequently, it is possible that this Area could, during a remand to EPA, be reclassified under subpart 2. Although any future decision by EPA to classify this area under subpart 2 might trigger additional future requirements for the area, EPA believes that this does not mean that redesignation of the area cannot now go forward. This belief is based upon
(1)EPA's long-standing policy of evaluating redesignation requests in accordance with the requirements due at the time the request is submitted; and
(2)consideration of the inequity of applying retroactively any requirements that might in the future be applied. First, at the time the redesignation request was submitted, the Macon Area was classified under subpart 1 and was obligated to meet only subpart 1 requirements. Under EPA's long-standing interpretation of section 107(d)(3)(E) of the CAA to qualify for redesignation, states requesting redesignation to attainment must meet only the relevant SIP requirements that came due prior to the submittal of a complete redesignation request. September 4, 1992, Calcagni Memorandum (“Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division). See also, Michael Shapiro Memorandum, September 17, 1993, and 60 FR 12459, 12465-66 (March 7, 1995) (Redesignation of Detroit-Ann Arbor, Michigan). See, *Sierra Club* v. *EPA,* 375 F.3d 537 (7th Cir. 2004), which upheld this interpretation. See, *e.g.* also, 68 FR 25418, 25424, 25427 (May 12, 2003) (redesignation of St. Louis, Missouri). Moreover, it would be inequitable to retroactively apply any new SIP requirements that were not applicable at the time the request was submitted. The DC Circuit Court has recognized the inequity in such retroactive rulemaking, (See, *Sierra Club* v. *Whitman,* 285 F.3d 63 (DC Cir. 2002)), in which the Court upheld a district court's ruling refusing to make retroactive an EPA determination of nonattainment that was past the statutory due date. Such a determination would have resulted in the imposition of additional requirements on the area. The Court stated, “Although EPA failed to make the nonattainment determination within the statutory time frame, Sierra Club's proposed solution only makes the situation worse. Retroactive relief would likely impose large costs on the States, which would face fines and suits for not implementing air pollution prevention plans in 1997, even though they were not on notice at the time.” *Id.* at 68. Similarly, with regard to Georgia's redesignation request, it would be unfair to penalize the Macon Area by applying to it for purposes of redesignation, additional SIP requirements under subpart 2 that were not in effect at the time it submitted its redesignation request. As noted earlier, in 2005, the ambient ozone data for the Macon Area indicated no further violations of the 8-hour ozone NAAQS, using data from the 3-year period of 2003-2005 to demonstrate attainment. As a result, on June 15, 2007, Georgia requested redesignation of the Macon Area to attainment for the 8-hour ozone NAAQS. The redesignation request included three years of complete, quality-assured ambient air quality data for the ozone seasons (March 1st until October 31st) of 2003-2005, indicating that the 8-hour ozone NAAQS has been achieved for the entire Macon Area. Under the CAA, nonattainment areas may be redesignated to attainment if sufficient, complete, quality-assured data is available for the Administrator to determine that the area has attained the standard and the area meets the other CAA redesignation requirements in section 107(d)(3)(E). III. What Are the Criteria for Redesignation? The CAA provides the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) of the CAA allows for redesignation providing that:
(1)The Administrator determines that the area has attained the applicable NAAQS;
(2)the Administrator has fully approved the applicable implementation plan for the area under section 110(k);
(3)the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP and applicable Federal air pollutant control regulations and other permanent and enforceable reductions;
(4)the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A; and,
(5)the state containing such area has met all requirements applicable to the area under section 110 and part D of the CAA. EPA provided guidance on redesignation in the General Preamble for the Implementation of Title I of the CAA Amendments of 1990, on April 16, 1992 (57 FR 13498), and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents: 1. “Ozone and Carbon Monoxide Design Value Calculations,” Memorandum from Bill Laxton, Director, Technical Support Division, June 18, 1990; 2. “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992; 3. “Contingency Measures for Ozone and Carbon Monoxide
(CO)Redesignations,” Memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992; 4. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (hereafter referred to as the “Calcagni Memorandum”); 5. “State Implementation Plan
(SIP)Actions Submitted in Response to Clean Air Act
(ACT)Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992; 6. “Technical Support Documents (TSD's) for Redesignation of Ozone and Carbon Monoxide
(CO)Nonattainment Areas,” Memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993; 7. “State Implementation Plan
(SIP)Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide
(CO)National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993; 8. “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, November 30, 1993; 9. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and 10. “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995. IV. Why Is EPA Proposing These Actions? On June 15, 2007, Georgia requested redesignation of the Macon 8-hour ozone nonattainment area to attainment for the 8-hour ozone standard. EPA's evaluation indicates that Georgia has demonstrated that the Macon Area has attained the standard and has met the requirements for redesignation set forth in section 107(d)(3)(E) of the CAA. EPA is also announcing the status of its adequacy determination for the 2020 regional MVEBs, which is relevant to the requested redesignation. V. What Is the Effect of EPA's Proposed Actions? EPA's proposed actions establish the basis upon which EPA may take final action on the issues being proposed for approval today. Approval of Georgia's redesignation request would change the official designation of the Macon Area for the 8-hour ozone NAAQS found at 40 CFR part 81. Approval of Georgia's request would also incorporate into the Georgia SIP, a plan for the Macon Area for maintaining the 8-hour ozone NAAQS in the area through 2020. This maintenance plan includes contingency measures to remedy future violations of the 8-hour ozone NAAQS. The maintenance plan also establishes regional MVEBs for the year 2020 of 7.8744 tpd for VOCs and 14.7712 tpd for NO <sup>X</sup> , for the Macon Area. Approval of Georgia's maintenance plan would also result in approval of the regional MVEBs. Additionally, EPA is notifying the public of the status of its adequacy determination for the 2020 regional MVEBs, pursuant to 40 CFR 93.118(f)(1). VI. What Is EPA's Analysis of the Request? EPA is proposing to make the determination that the Macon Area has attained the 8-hour ozone standard, and that all other redesignation criteria have been met for the Macon Area. The basis for EPA's determination for the area is discussed in greater detail below. Criteria (1)—The Macon Area Has Attained the 8-hour Ozone NAAQS EPA is proposing to determine that the Macon Area has attained the 8-hour ozone NAAQS. For ozone, an area may be considered to be attaining the 8-hour ozone NAAQS if there are no violations, as determined in accordance with 40 CFR 50.10 and Appendix I of part 50, based on three complete, consecutive calendar years of quality-assured air quality monitoring data. To attain this standard, the 3-year average of the fourth-highest daily maximum 8-hour average ozone concentrations measured at each monitor within an area over each year must not exceed 0.08 ppm. Based on the rounding convention described in 40 CFR part 50, Appendix I, the standard is attained if the design value is 0.084 ppm or below. The data must be collected and quality-assured in accordance with 40 CFR part 58, and recorded in the EPA Air Quality System (AQS). The monitors generally should have remained at the same location for the duration of the monitoring period required for demonstrating attainment. EPA reviewed ozone monitoring data from the ambient ozone monitoring station in the Macon Area for the ozone season from 2003-2005. This data has been quality assured and is recorded in AQS. The fourth high average for 2003, 2004, and 2005, and the 3-year average of these values (i.e., design values), are summarized in Table 1 below. The 2006 data continues to demonstrate attainment. Table 1.—Annual 4th Max High and Design Value Concentration for 8-hour Ozone for the Macon Area (In parts per million) Site name 4th Highest value
(ppm)2003 2004 2005 2006 3-year average 2003-2005 2004-2006 Macon SE 0.081 0.086 0.082 0.077 0.083 0.082 As discussed above, the design value for an area is the highest design value recorded at any monitor in the area. Therefore, the design value for the Macon Area is (0.083) ppm, which meets the standard as described above. As discussed in more detail below, Georgia has committed to continue monitoring in this area in accordance with 40 CFR part 58. The data submitted by Georgia provides an adequate demonstration that the Macon Area has attained the 8-hour ozone NAAQS. Criteria (2)—Georgia Has a Fully Approved SIP Under Section 110(k) for the Macon Area and Criteria (5)—Has Met All Applicable Requirements Under Section 110 and Part D of the CAA Below is a summary of how these two criteria were met. EPA has determined that Georgia has met all applicable SIP requirements for the Macon Area under section 110 of the CAA (general SIP requirements). EPA has also determined that the Georgia SIP satisfies the criterion that it meet applicable SIP requirements under part D of title I of the CAA (requirements specific to subpart 1 basic 8-hour ozone nonattainment areas) in accordance with section 107(d)(3)(E)(v). In addition, EPA has determined that the SIP is fully approved with respect to all applicable requirements in accordance with section 107(d)(3)(E)(ii). In making these determinations, EPA ascertained which requirements are applicable to the area and that if applicable, they are fully approved under section 110(k). SIPs must be fully approved only with respect to applicable requirements. *a. The Macon Area has met all applicable requirements under section 110 and part D of the CAA. * The September 4, 1992, Calcagni Memorandum (see “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992) describes EPA's interpretation of section 107(d)(3)(E). Under this interpretation, to qualify for redesignation, states requesting redesignation to attainment must meet only the relevant CAA requirements that come due prior to the submittal of a complete redesignation request. See also, Michael Shapiro Memorandum, (“SIP Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide NAAQS On or After November 15, 1992,” September 17, 1993), and 60 FR 12459, 12465-66 (March 7, 1995) (redesignation of Detroit-Ann Arbor, Michigan). Applicable requirements of the CAA that come due subsequent to the area's submittal of a complete redesignation request remain applicable until a redesignation is approved, but are not required as a prerequisite to redesignation. See, section 175A(c) of the CAA; *Sierra Club,* 375 F.3d 537 (7th Cir. 2004); see also, 68 FR 25424, 25427 (May 12, 2003) (redesignation of St. Louis, Missouri). General SIP requirements. Section 110(a)(2) of title I of the CAA delineates the general requirements for a SIP, which include enforceable emissions limitations and other control measures, means, or techniques, provisions for the establishment and operation of appropriate devices necessary to collect data on ambient air quality, and programs to enforce the limitations. General SIP elements and requirements are delineated in section 110(a)(2) of title I, part A of the CAA. These requirements include, but are not limited to, the following: Submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; implementation of a source permit program; provisions for the implementation of part C requirements (Prevention of Significant Deterioration (PSD)) and provisions for the implementation of part D requirements (NSR permit programs); provisions for air pollution modeling; and provisions for public and local agency participation in planning and emission control rule development. Section 110(a)(2)(D) requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address the transport of air pollutants (NO <sup>X</sup> SIP Call, Clean Air Interstate Rule (CAIR)). EPA has also found, generally, that states have not submitted SIPs under section 110(a)(1) to meet the interstate transport requirements of section 110(a)(2)(D)(i). However, the section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. EPA believes that the requirements linked with a particular nonattainment area's designation and classifications are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, we do not believe that the CAA's interstate transport requirements should be construed to be applicable requirements for purposes of redesignation. In addition, EPA believes that the other section 110 elements not connected with nonattainment plan submissions and not linked with an area's attainment status are not applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated. The section 110 and part D requirements, which are linked with a particular area's designation and classification, are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability (i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See, Reading, Pennsylvania, proposed and final rulemakings (61 FR 53174-53176, October 10, 1996), (62 FR 24826, May 7, 1997); Cleveland-Akron-Loraine, Ohio, final rulemaking (61 FR 20458, May 7, 1996); and Tampa, Florida, final rulemaking at (60 FR 62748, December 7, 1995). See also, the discussion on this issue in the Cincinnati, Ohio redesignation (65 FR 37890, June 19, 2000), and in the Pittsburgh, Pennsylvania redesignation (66 FR 50399, October 19, 2001). EPA believes that section 110 elements not linked to the area's nonattainment status are not applicable for purposes of redesignation. Any section 110 requirements that are linked to the part D requirements for 8-hour ozone nonattainment areas are not yet due, since, as explained below, no part D requirements for 8-hour standard became due prior to submission of the redesignation request. Therefore, as discussed above, for purposes of redesignation, they are both not considered applicable requirements. Nonetheless, EPA notes it has previously approved provisions in the Georgia SIP addressing section 110 elements under the 1-hour ozone NAAQS (70 FR 34660, June 15, 2005). EPA believes that the section 110 SIP approved for the 1-hour ozone NAAQS is also sufficient to meet the requirements under the 8-hour ozone NAAQS (as well as satisfying the issues raised by the D.C. Circuit Court in the *SCAQMD* case). Part D requirements. EPA has also determined that the Georgia SIP meets applicable SIP requirements under part D of the CAA since no requirements became due prior to the submission of the area's redesignation request. Sections 172-176 of the CAA, found in subpart 1 of part D, set forth the basic nonattainment requirements applicable to all nonattainment areas. Section 182 of the CAA, found in subpart 2 of part D, establishes additional specific requirements depending on the area's nonattainment classification. Subpart 2 is not applicable to the Macon Area. Part D, subpart 1 applicable SIP requirements. For purposes of evaluating this redesignation request, the applicable part D, subpart 1 SIP requirements for all nonattainment areas are contained in sections 172(c)(1)-(9). A thorough discussion of the requirements contained in section 172 can be found in the General Preamble for Implementation of title I (57 FR 13498). No requirements applicable for purposes of redesignation under part D became due prior to the submission of the redesignation request, and therefore none are applicable to the area for purposes of redesignation. For example, the requirements for an attainment demonstration that meets the requirements of section 172(c)(1) are not yet applicable, nor are the requirements for Reasonably Achievable Control Technology
(RACT)and Reasonably Available Control Measures
(RACM)(section 172(c)(1)), reasonable further progress
(RFP)(section 172(c)(2)), and contingency measures (section 172(c)(9)). In addition to the fact that no part D requirements applicable for purposes of redesignation became due prior to submission of the redesignation request and therefore are not applicable, EPA believes it is reasonable to interpret the conformity and NSR requirements as not requiring approval prior to redesignation. Section 176 Conformity Requirements. Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that Federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other Federally supported or funded projects (general conformity). State conformity revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that the CAA required the EPA to promulgate. EPA believes it is reasonable to interpret the conformity SIP requirements as not applying for purposes of evaluating the redesignation request under section 107(d) because state conformity rules are still required after redesignation and Federal conformity rules apply where state rules have not been approved. See, *Wall* , 265 F.3d 426 ((upholding this interpretation). See also, 60 FR 62748 (December 7, 1995, Tampa, Florida.) EPA has also determined that areas being redesignated need not comply with the requirement that a NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the standard without a part D NSR program in effect since PSD requirements will apply after redesignation. The rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment.” Georgia has demonstrated that the area will be able to maintain the standard without a part D NSR program in effect, and therefore, Georgia need not have a fully approved part D NSR program prior to approval of the redesignation request. Georgia's PSD program will become effective in the Macon Area upon redesignation to attainment. See, rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorraine, Ohio (61 FR 20458, 20469-70, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). Thus, the Macon Area has satisfied all applicable requirements for purposes of redesignation under section 110 and part D of the CAA. *b. The area has a fully approved applicable SIP under section 110(k) of the CAA. * EPA has fully approved the applicable Georgia SIP for the Macon Area (including Bibb and a portion of Monroe County) under section 110(k) of the CAA for all requirements applicable for purposes of redesignation. EPA may rely on prior SIP approvals in approving a redesignation request, see Calcagni Memorandum at p. 3; *Southwestern Pennsylvania Growth* *Alliance* v. *Browner,* 144 F.3d 984, 989-90 (6th Cir. 1998); *Wall* , 265 F.3d 426, plus any additional measures it may approve in conjunction with a redesignation action. See, 68 FR 25426 (May 12, 2003) and citations therein. Following passage of the CAA of 1970, Georgia has adopted and submitted, and EPA has fully approved at various times, provisions addressing the various 1-hour ozone standard SIP elements applicable in Macon, Georgia (70 FR 34660, June 15, 2005). As indicated above, EPA believes that the section 110 elements not connected with nonattainment plan submissions and not linked to the area's nonattainment status are not applicable requirements for purposes of redesignation. EPA also believes that since the part D requirements applicable for purposes of redesignation did not become due prior to submission of the redesignation request, they also are therefore not applicable requirements for purposes of redesignation. Criteria (3)—The Air Quality Improvement in the Macon Area Is Due to Permanent and Enforceable Reductions in Emissions Resulting From Implementation of the SIP and Applicable Federal Air Pollution Control Regulations and Other Permanent and Enforceable Reductions EPA believes that Georgia has demonstrated that the observed air quality improvement in the Macon Area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP, Federal measures, and other state adopted measures. Additionally, new emissions control programs for fuels and motor vehicles will help ensure a continued decrease in emissions throughout the region. Table 2.—Macon Area Emission Reductions Programs Onboard Refueling Vapor Recovery for Light-Duty Vehicles. Architectural and Industrial Maintenance Coatings. Automobile Refinishing. The National Emission Standards for Hazardous Air Pollutants (NESHAP); the majority of which are also VOCs. Phase II Acid Rain Program for NO <sup>X</sup> . Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control Requirements. Regional NO <sup>X</sup> SIP Call. Notably, no credit specific emission reduction is being claimed in the SIP for the NO <sup>X</sup> SIP Call reductions although this program has resulted in measurable emissions reductions. Criteria (4)—The Area Has a Fully Approved Maintenance Plan Pursuant to Section 175A of the CAA In its request to redesignate the Macon Area to attainment, EPD submitted a SIP revision to provide for the maintenance of the 8-hour ozone NAAQS for at least 10 years after the effective date of redesignation to attainment. a. What is required in a maintenance plan? Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the State of Georgia must submit a revised maintenance plan which demonstrates that attainment will continue to be maintained for the 10 years following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain such contingency measures, with a schedule for implementation as EPA deems necessary to assure prompt correction of any future 8-hour ozone violations. Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. The Calcagni Memorandum provides additional guidance on the content of a maintenance plan. The Calcagni Memorandum explains that an ozone maintenance plan should address five requirements: the attainment emissions inventory, maintenance demonstration, monitoring, verification of continued attainment, and a contingency plan. As is discussed more fully below, Georgia's maintenance plan includes all the necessary components and is approvable as part of the redesignation request. b. Attainment Emissions Inventory Georgia selected 2005 as “the attainment year” for the Macon Area for the purposes of demonstrating attainment of the 8-hour ozone NAAQS. This attainment inventory identifies the level of emissions in the area which is sufficient to attain the 8-hour ozone standard. Georgia began development of this attainment inventory by first developing a baseline emissions inventory for the Macon Area. The year 2003 was chosen as the base year for developing a comprehensive ozone precursor emissions inventory for which projected emissions could be developed for 2005, 2008, 2011, 2014, 2017, and 2020. Non-road mobile emissions estimates were based on the EPA's NONROAD2005 model. On-road mobile source emissions were calculated using EPA's MOBILE6.2 emission factors model. The 2005 VOCs and NO <sup>X</sup> emissions, as well as the emissions for other years, for the Macon Area were developed consistent with EPA guidance, and are summarized in Tables 3 and 4 in the following subsection. c. Maintenance Demonstration The June 15, 2007, final submittal includes a maintenance plan for the Macon Area. This demonstration:
(i)Shows compliance and maintenance of the 8-hour ozone standard by providing information to support the demonstration that current and future emissions of VOCs and NO <sup>X</sup> remain at or below attainment year 2005 emissions levels. The year 2005 was chosen as the attainment year because it is one of the most recent three years (i.e., 2003, 2004, and 2005) for which the Macon Area has clean air quality data for the 8-hour ozone standard.
(ii)Uses 2005 as the attainment year and includes future emission inventory projections for 2005, 2008, 2011, 2014, 2017, and 2020.
(iii)Identifies an “out year,” at least 10 years after the time necessary for EPA to review and approve the maintenance plan. Per 40 CFR part 93, MVEBs were established for the last year
(2020)of the maintenance plan. See, section VII below.
(iv)Provides the following actual and projected emissions inventories for the Macon nonattainment Area. See, Tables 3 and 4. Table 3.—Macon Area Emissions of VOCs [Tons per summer day] Source category 2003 2005 2008 2011 2014 2017 2020 Non-EGU 5.4752 4.9767 4.2290 4.1672 4.4484 4.7295 4.8890 EGU 1.0197 0.9818 0.9249 0.9060 0.9060 0.9060 0.9060 Area 16.7094 16.6437 16.5452 17.1532 18.1145 19.0758 19.1643 Mobile* 16.1605 14.7602 12.6598 10.5215 8.3645 6.6906 5.2581 Nonroad 4.5063 4.4556 4.3797 4.1626 3.8751 3.5875 3.1884 Total 43.8711 41.8180 38.7385 36.9105 35.7084 34.9894 33.4058 Safety Margin** N/A 2.0531 5.1326 6.9606 8.1627 8.8817 10.4653 *Calculated using MOBILE 6.2. **After assigning 2.6163 TPD of the 2020 VOCs safety margin to the MVEB, the revised 2020 safety margin will be 7.8490 TPD. Table 4.—Macon Area NO <sup>X</sup> Emissions [Tons per summer day] Source category 2003 2005 2008 2011 2014 2017 2020 Non-EGU 5.9471 5.6213 5.1325 5.0792 5.2435 5.4079 5.5590 EGU 74.9781 67.7887 57.0046 53.4099 53.4099 53.4099 53.4099 Area 1.5008 1.5136 1.5328 1.5641 1.6013 1.6385 1.6609 Mobile* 18.4512 16.8661 14.4883 11.8974 9.2000 7.2225 5.6051 Nonroad 4.1467 3.9555 3.6687 3.3229 2.9475 2.5722 2.1246 Total 105.0239 95.7452 81.8270 75.2734 72.4022 70.2509 68.3595 Safety Margin** N/A 9.2787 23.1969 29.7505 32.6217 34.7730 36.6644 *Calculated using MOBILE 6.2. **After assigning 9.1661 TPD of the 2020 NO <sup>X</sup> safety margin to the MVEB, the revised 2020 safety margin will be 27.4983 TPD. A safety margin is the difference between the attainment level of emissions (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. The attainment level of emissions is the level of emissions during one of the years in which the area met the NAAQS. Georgia has decided to allocate a portion of the available safety margin to the regional 2020 MVEBs for NO <sup>X</sup> and VOCs for the Macon Area, and has calculated the safety margin in its submittal. See, Tables 3 and 4 above. This allocation and the resulting available safety margin for the Macon Area are discussed further in section VII of this rulemaking. d. Monitoring Network There are currently two monitors measuring ozone in the Macon Area. Only one of the monitors was in place during the 2003-2005 monitoring period. The second monitor was installed and began collecting data for the 2005 ozone season. Georgia has committed in the maintenance plan to continue operation of these monitors in compliance with 40 CFR part 58, and has addressed the requirement for monitoring. e. Verification of Continued Attainment Georgia has the legal authority to enforce and implement the requirements of the ozone maintenance plan for the Macon Area. This includes the authority to adopt, implement and enforce any subsequent emissions control contingency measures determined to be necessary to correct future ozone attainment problems. Georgia will track the progress of the maintenance plan by performing future reviews of actual emissions for the area using the latest emissions factors, models and methodologies. For these periodic inventories Georgia will review the assumptions made for the purpose of the maintenance demonstration concerning projected growth of activity levels. If any of these assumptions appear to have changed substantially, Georgia will re-project emissions. f. Contingency Plan The contingency plan provisions are designed to promptly correct a violation of the NAAQS that occurs after redesignation. Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation. The maintenance plan should identify the contingency measures to be adopted, a schedule and procedure for adoption and implementation, and a time limit for action by the state. A state should also identify specific indicators to be used to determine when the contingency measures need to be implemented. The maintenance plan must include a requirement that a state will implement all measures with respect to control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d). In the June 15, 2007, submittal, Georgia affirms that all programs instituted by the State and EPA will remain enforceable, and that sources are prohibited from reducing emissions controls following the redesignation of the Macon Area. In the submittal, if there is a measured violation of the 8-hour ozone NAAQS in the Macon Area, contingency measures would be adopted and implemented as expeditiously as possible, but no later than eighteen to twenty four months after the triggering event. The proposed schedule for these actions would be as follows: • Six months to perform a comprehensive analysis; • Three months to identify potential sources for reductions; • Three months to identify applicable control measures; • Three months to initiate a stakeholder process; • Three months to draft SIP regulations; and • Six months to initiate the rulemaking process. This step would include the time required to hold a public comment period, hearing, and board adoption, and submit the final plans to EPA. This process may be initiated simultaneous with drafting the regulations. Georgia will consider one or more of the following contingency measures to re-attain the standard. • RACM for all sources of NO <sup>X</sup> • RACT for all existing point sources of NO <sup>X</sup> • Expansion of RACM/RACT to area(s) of transport within the State • Mobile Source Measures • Additional NO <sup>X</sup> reduction measures yet to be identified EPA has concluded that the maintenance plan adequately addresses the five basic components of a maintenance plan: attainment inventory, maintenance demonstration, monitoring network, verification of continued attainment, and a contingency plan. The maintenance plan SIP revision submitted by Georgia for the Macon Area meets the requirements of section 175A of the CAA and is approvable. VII. What Are the Proposed Regional MVEBs for the Macon Area? Under the CAA, states are required to submit, at various times, control strategy SIPs and maintenance plans in ozone areas. These control strategy SIPs (reasonable further progress SIPs and attainment demonstration SIPs etc.) and maintenance plans create MVEBs for criteria pollutants and/or their precursors to address pollution from cars and trucks. Per 40 CFR part 93, an MVEB is established for the last year of the maintenance plan. The MVEB is the portion of the total allowable emissions in the maintenance demonstration that is allocated to highway and transit vehicle use and emissions. See, 40 CFR 93.101. The MVEB serves as a ceiling on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993, transportation conformity rule (58 FR 62188). The preamble also describes how to establish the MVEB in the SIP and revise the MVEB. Georgia, after interagency consultation with the transportation partners for the Macon Area, has elected to develop regional MVEBs for NO <sup>X</sup> and VOCs for this entire area. Georgia is developing these MVEBs, as required, for the last year of its maintenance plan (2020). The MVEBs reflect the total on-road emissions for 2020, plus an allocation from the available VOCs and NO <sup>X</sup> safety margin. Under 40 CFR 93.101, the term safety margin is the difference between the attainment level (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. The safety margin can be allocated to the transportation sector; however, the total emissions must remain below the attainment level. These MVEBs and allocation from the safety margin were developed in consultation with the transportation partners and were added to account for uncertainties in population growth, changes in model VMT and new emission factor models. The regional MVEBs for the Macon Area are defined in Table 5, below. Table 5.—Macon Area MVEBs [Tons per day] 2020* NO <sup>X</sup> 14.7712 VOCs 7.8744 * Includes an allocation for the available NO <sup>X</sup> and VOCs safety margins. As mentioned above, Georgia has chosen to allocate a portion of the available safety margin to the 2020 MVEBs. This allocation is 9.1661 tpd for NO <sup>X</sup> and 2.6163 tpd for VOCs. The 2020 regional MVEBs are derived as follows for NO <sup>X</sup> : (5.6051 tpd for total mobile emissions) + (9.1661 tpd from available safety margin) = 14.7712 tpd; and for VOCs: (5.2581 tpd for total mobile emissions) + (2.6163 tpd from available safety margin) = 7.8744 tpd. Thus, the remaining safety margin in 2020 is 27.4983 tpd for NO <sup>X</sup> and 7.8490 tpd for VOCs. Through this rulemaking, EPA is proposing to approve the 2020 regional MVEBs for NO <sup>X</sup> and VOCs for the Macon Area because EPA has determined that the Area maintains the 8-hour ozone standard with the emissions at the levels of the budgets. As mentioned above, these MVEBs are regional MVEBs for the entire Macon Area. Once the new regional MVEBs for the Macon Area (the subject of this rulemaking) are approved or found adequate (whichever is done first), they must be used for future conformity determinations. As is discussed in greater detail below, EPA is also announcing the status of its adequacy determination for the proposed 2020 MVEBs for the Macon Area pursuant to 40 CFR 93.118(f)(1). VIII. What Is the Status of EPA's Adequacy Determination for MVEBs for the Year 2020 for the Macon Area? Under section 176(c) of the CAA, new transportation projects, such as the construction of new highways, must “conform” to (i.e., be consistent with) the part of the State's air quality plan that addresses pollution from cars and trucks. “Conformity” to the SIP means that transportation activities will not cause new air quality violations, worsen existing violations, or delay timely attainment of the NAAQS. If a transportation plan does not “conform,” most new projects that would expand the capacity of roadways cannot go forward. Regulations at 40 CFR part 93 set forth EPA policy, criteria, and procedures for demonstrating and assuring conformity of such transportation activities to a SIP. The regional emissions analysis is one, but not the only, requirement for implementing transportation conformity. Transportation conformity is a requirement for nonattainment and maintenance areas. Maintenance areas are areas that were previously nonattainment for a particular NAAQS but have since been redesignated to attainment with a maintenance plan for that NAAQS. When reviewing submitted “control strategy” SIPs or maintenance plans containing MVEBs, EPA must affirmatively find the MVEB contained therein “adequate” for use in determining transportation conformity. Once EPA affirmatively finds the submitted MVEB is adequate for transportation conformity purposes, that MVEB can be used by state and Federal agencies in determining whether proposed transportation projects “conform” to the SIP as required by section 176(c) of the Clean Air Act. EPA's substantive criteria for determining “adequacy” of an MVEB are set out in 40 CFR 93.118(e)(4). The process for determining “adequacy” consists of three basic steps: public notification of a SIP submission, a public comment period, and EPA's adequacy finding. This process for determining the adequacy of submitted SIP MVEBs was initially outlined in EPA's May 14, 1999, guidance, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision.” This guidance was finalized in the Transportation Conformity Rule Amendments for the “New 8-Hour Ozone and PM <sup>2.5</sup> National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas; Transportation Conformity Rule Amendments—Response to Court Decision and Additional Rule Change,” on July 1, 2004 (69 FR 40004). EPA follows this guidance and rulemaking in making its adequacy determinations. Georgia's maintenance plan submission contained new regional MVEBs for VOCs and NO <sup>X</sup> for the Macon Area for the year 2020. The availability of the Georgia SIP submission with the Macon MVEBs was available for public comment on EPA's adequacy Web site on June 21, 2007, at: *http://www.epa.gov/otaq/stateresources/transconf/currsips.htm.* The EPA public comment period on adequacy of the 2020 regional MVEBs for the Macon Area closed on July 23, 2007. EPA did not receive any comments or requests for the submittal. EPA intends to make its determination of the adequacy of the 2020 MVEBs for the Macon Area for transportation conformity purposes in the final rulemaking on the redesignation of the Macon Area. If EPA finds the 2020 MVEBs adequate and approves these MVEBs in the final rulemaking action, the new MVEBs must be used for future transportation conformity determinations. The new 2020 MVEBs, if found adequate and approved in the final rulemaking, will be effective on the date of publication of EPA's final rulemaking in the **Federal Register** . For required regional emissions analysis years that involve the year 2019 or before, the area will continue to use the interagency consultation group for this area to determine the appropriate interim test to use to demonstrate conformity. For required regional emissions analysis years that involve 2020 or beyond, the applicable budgets will be the new 2020 MVEBs. The 2020 MVEBs are defined in section VII of this rulemaking. IX. Proposed Actions on the Redesignation Request and the Maintenance Plan SIP Revision Including Proposed Approval of the 2020 MVEBs EPA is now proposing to make the determination that the Macon Area has met the criteria for redesignation from nonattainment to attainment for the 8-hour ozone NAAQS. Further, EPA is proposing to approve Georgia's redesignation request for the Macon Area. After evaluating Georgia's SIP submittal requesting redesignation, EPA has determined that it meets the redesignation criteria set forth in section 107(d)(3)(E) of the CAA. EPA believes that the redesignation request and monitoring data demonstrate that the Macon Area has attained, and will continue to maintain the 8-hour ozone standard. EPA is also proposing to approve the June 15, 2007, SIP revision containing Georgia's 8-hour ozone maintenance plan for the Macon Area. The maintenance plan includes regional MVEBs for 2020 for NO <sup>X</sup> and VOCs, among other requirements. EPA is proposing to approve the 2020 MVEBs for the Macon Area, because the maintenance plan demonstrates that expected emissions for all other source categories will continue to maintain the 8-hour ozone standard. Further, as part of today's action, EPA is describing the status of its adequacy determination for the 2020 MVEBs in accordance with 40 CFR 93.118(f)(1). Within 24 months from the effective date of EPA's adequacy finding for the MVEBs, or the publication date for the final rule for this action, the transportation partners will need to demonstrate conformity to these new MVEBs pursuant to 40 CFR 93.104(e) as effectively amended by section 172(c)(2)(E) of the CAA as added by the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU), which was signed into law on August 10, 2005. X. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This proposed action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Redesignation of an area to attainment under section 107(d)(3)(e) of the CAA does not impose any new requirements on small entities. Redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on sources. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This proposed rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely affects the status of a geographical area, does not impose any new requirements on sources, or allow a state to avoid adopting or implementing other requirements and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This proposed rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997); because it is not economically significant and because the Agency does not have reason to believe that the rule concerns an environmental health risk or safety risk that may disproportionately affect children. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission; to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Redesignation is an action that affects the status of a geographical area but does not impose any new requirements on sources. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. 40 CFR Part 81 Environmental protection, Air pollution control, National parks, Wilderness areas. Authority: 42 U.S.C. 7401 *et seq.* Dated: July 25, 2007. J.I. Palmer, Jr., Regional Administrator, Region 4. [FR Doc. E7-14983 Filed 8-1-07; 8:45 am] BILLING CODE 6560-50-P LEGAL SERVICES CORPORATION 45 CFR Part 1626 Restrictions on Legal Assistance to Aliens AGENCY: Legal Services Corporation. ACTION: Termination of Rulemaking and Notice of Proposed Rulemaking. SUMMARY: LSC is terminating a rulemaking it initiated in 2001 to consider broad revisions to its regulation on restrictions on legal assistance. Contemporaneously, LSC is initiating a new rulemaking to consider a proposal of limited scope to amend section 1626.10(a) of this regulation to permit LSC grant recipients to provide legal assistance to otherwise financially eligible citizens of the Federated States of Micronesia, the Republic of the Marshall Islands and the Republic of Palau legally residing in the United States. DATES: The open rulemaking published on September 10, 2001 (66 FR 46977) is terminated as of August 2, 2007. Comments on this NPRM are due on September 4, 2007. ADDRESSES: Written comments on the NPRM may be submitted by mail, fax or e-mail to Mattie Cohan, Senior Assistant General Counsel, Office of Legal Affairs, Legal Services Corporation, 3333 K Street, NW., Washington, DC 20007; 202-295-1624 (ph); 202-337-6519 (fax); *mcohan@lsc.gov.* FOR FURTHER INFORMATION CONTACT: Mattie Cohan, Senior Assistant General Counsel, 202-295-1624 (ph); *mcohan@lsc.gov.* SUPPLEMENTARY INFORMATION: Termination of Open Rulemaking The LSC Board of Directors identified 45 CFR Part 1626 as an appropriate subject for rulemaking on January 27, 2001. On June 30, 2001, the LSC President and the Chair of the Operations and Regulations Committee made a determination to proceed with the initiation of a Negotiated Rulemaking to consider amendments to Part 1626. In accordance with the LSC Rulemaking Protocol, LSC published a notice in the **Federal Register** formally soliciting suggestions for appointment to the Negotiated Rulemaking Working Group from the regulated community, its clients, advocates, the organized bar and other interested parties (66 FR 46977, September 10, 2001). After receiving submissions of interest, a Working Group was appointed. Each organization which timely requested to participate was appointed to the Working Group. The Working Group met three times without coming to consensus on several issues. Subsequently, work on the 2001 rulemaking was deferred in 2003 by the previous Board of Directors pending the appointment and confirmation of the present Board. No further action on the rulemaking has been taken since that time. During the past several years as LSC has considered its rulemaking agenda, neither Management nor recipients have suggested reinitiating work on this broad rulemaking. As such, LSC is of the opinion that consideration of broad revision of Part 1626 is no longer necessary or appropriate. Accordingly, with the publication of this notice LSC is terminating the open rulemaking. New Notice of Proposed Rulemaking LSC-funded legal services providers are permitted to provide legal assistance only to citizens of the United States and aliens upon whom eligibility has been expressly conferred by statute. LSC regulations at 45 CFR Part 1626 implement the various existing statutory authorities and set forth the eligibility standards based on citizenship and eligible alien status. Since 1996 Part 1626 has limited the eligibility of citizens of the Republic of the Marshall Islands (“RMI”) and the Federated States of Micronesia (“FSM”) and the Republic of Palau to services provided in those respective nations (unless the applicant is otherwise eligible under Part 1626). In connection with LSC's development of a 2007 Rulemaking Agenda, the Legal Aid Society of Hawai'i
(LASH)and Legal Aid of Arkansas
(LAA)have both requested that LSC engage in rulemaking to change the section 1626.10(a) to provide for the eligibility of citizens of RMI, FSM and Palau legally residing in the United States for legal assistance from LSC-funded programs. LSC agrees that there is sufficient reason and authority for LSC to amend its regulation in this regard. To that end, the Operations and Regulations Committee of the LSC Board of Directors considered a Draft NPRM and the Board of Directors approved this NPRM for publication and comment at their respective meetings on July 28, 2007. History of FAS Eligibility for Legal Assistance From LSC-Funded Programs At the time of the creation of LSC in 1974, the countries that are now the sovereign nations of the Republic of the Marshall Islands (“RMI”), the Federated States of Micronesia (“FSM”), and the Republic of Palau were possessions of the United States, known as the Trust Territories of the Pacific Islands (“the Trust Territories”). The LSC Act defined the Trust Territories as a “State” for the purposes of the Act. The Act thus conferred eligibility for LSC-funded legal services to Trust Territory residents to the same extent provided to residents of any other State of the United States. Section 1002(8) of the LSC Act, 42 U.S.C. 2996a(8). In 1983, Congress placed the first statutory restrictions on representation of aliens on LSC recipients in LSC's appropriations bill for that year, Public Law 97-377. That law provided that none of the funds appropriated could be expended to provide legal assistance for or on behalf of any alien unless the alien was a resident of the U.S. and otherwise met certain statutorily specified criteria. On its face, this language would have appeared to imply that all non-U.S. citizens, including residents of RMI, FSM and Palau would be subject to these restrictions, notwithstanding their eligibility under the LSC Act. To deal with this problem, LSC included a “special eligibility section” (§ 1626.10) in the implementing regulations on representation of aliens, 45 CFR part 1626, to exempt residents of the Trust Territory from the alien restrictions imposed by Congress. In 1986 the trust governing the relationship between the U.S. and the Trust Territories was terminated. At that time the former Trust Territories were recognized as independent nations and a new relationship with RMI, FSM and Palau was created by the signing of two Compacts of Free Association, one with RMI and FSM and the other with Palau. The Compact with RMI and FSM contemplates the provision of certain services and programs of the U.S. to those nations. Specifically, section 224 of the Compact of Free Association with RMI and FSM provides that: The Government of the United States and the Government of the Marshall Islands or the Federated States of Micronesia may agree from time to time to the extension of additional United States grant assistance, services and programs as provided by the laws of the United States, to the Marshall Islands or the Federated States of Micronesia, respectively. The Compact of Free Association Act of 1985 (“CFA Act”) (Pub. L. 99-239, codified at 48 U.S.C. 1901 *et seq.* ), which implemented the Compact, provides express authority for the provision of LSC-funded legal services. Specifically, section 105(h)(1)(A) of the CFA Act provides that: * * * pursuant to section 224 of the Compact the programs and services of the [Legal Services Corporation] shall be made available to the Federated States of Micronesia and to the Marshall Islands. The implementing act for the Compact with Palau makes section 105 of the CFA Act applicable to the Republic of Palau. 48 U.S.C. 1932(b). 1 1 RMI, FSM and Palau are collectively referred to as the “Freely Associated States” or “FAS.” This designation will be used throughout the remainder of the supplementary information section. After the signing of the respective Compacts and the corresponding implementing statutes, the FAS remained covered by the special eligibility section of Part 1626, notwithstanding their change in legal status vis-à-vis their relationship with the United States. In 1989 that section of the regulation was amended to make the section more precise in light of the termination of the trust. Under this version of the rule, the special eligibility section provided:
(a)*Micronesia.* The alien restriction stated in the appropriations acts is not applicable to the legal services program in the following Pacific island entities:
(1)Commonwealth of the Northern Marianas;
(2)Republic of Palau;
(3)Federated States of Micronesia;
(4)Republic of the Marshall Islands All citizens of these entities are eligible to receive legal assistance, provided they are otherwise eligible under the [LSC] Act. 54 FR 18812 (April 29, 1989). The preamble to the Final Rule adopting this language explained that this change was intended to “restate[] congressional intent that residents of these political entities be eligible to be clients of a legal services program.” Id. at 18110. The special eligibility section addressing the FAS remained as set forth above until 1996. As a result of new statutory restrictions contained in the LSC FY 1996 appropriations legislation (Pub. L. 104-134), additional changes to Part 1626 were made in 1996. Although the statutory amendments did not address this issue, § 1626.10(a) was again revised, this time in response to comments from the LSC Office of Inspector General (OIG). As explained in the preamble to the 1996 Final Rule: The OIG suggested that both the prior rule and the interim rule dealt with the question of special eligibility incorrectly and urged that the final rule refer only to the legal services programs serving people who were citizens of those jurisdictions. The effect of this change would be to make financially eligible citizens of the Federated States of Micronesia, the Republic of the Marshall Islands and the Republic of Palau only eligible for legal services from the recipients serving those areas * * *. They would not be eligible for services from any other recipients unless they also came within one of the categories of eligible aliens listed in section 1626.5 * * *. 62 FR 19413 (April 21, 1997). The OIG's comments were based upon its interpretation of the CFA Act that the language of the CFA Act provides authority for the provision of services within those nations, but does not expressly confer individual eligibility for services to the citizens of those nations without reference to where the service is to be provided. The Board considered the matter, agreed with the OIG analysis, and revised § 1626.10(a) as follows. This part [1626] is not applicable to recipients providing services in the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, or the Republic of the Marshall Islands. 62 FR 19413 (April 21, 1997); 45 CFR 1626.10(a). Thus, since 1996 otherwise financially eligible residents of the FAS seeking assistance from legal services providers in the United States may only receive such assistance if they meet the alien eligibility requirements of § 1626.5. Alternative Interpretation of the Compact Act During the last session of Congress, legislation was passed in the Senate by unanimous consent on September 29, 2006, which would have definitively clarified the issue by clearly stating that LSC services were to be available to the citizens of the FAS. Specifically, section 5 of S.1830, provided: SEC. 5. AVAILABILITY OF LEGAL SERVICES. Section 105(f)(1)(C) of the Compact of Free Association Amendments Act of 2003 (48 U.S.C. 1921d(f)(1)(C)) is amended by inserting before the period at the end the following: “, which shall also continue to be available to the citizens of the Federated States of Micronesia, the Republic of Palau, and the Republic of the Marshall Islands who legally reside in the United States (including territories and possessions)”. The report accompanying S.1830 explained that: Section 5 clarifies that section 105(f)(1)(C) of the CFAAA is intended to continue eligibility for the programs and services of the Legal Services Corporation for FSM and RMI migrants who legally reside in the United States. Legal Services Corporation eligibility was extended by the first Compact Act in 1986 (Pub. L. 99-239), but in 1996, without any further action by Congress, the Legal Services Corporation, by rule, terminated the eligibility of FSM and RMI migrants. Section 104(e) of the original Compact Act, and of the CFAAA, state that it is `not the intent of Congress to cause any adverse consequences for an affected area,' which are defined as Hawaii, Guam, the CNMI, and American Samoa. The Legal Services Corporation is one of those programs which had assisted local communities, in both the ‘affected areas' and in the mainland U.S., in responding to the impacts and needs of FSM and RMI citizens who were residing in U.S. communities. This section would restore eligibility as it existed from 1986 to 1996. Similar legislation was introduced in the House, but was not acted on during the course of the 109th Congress. Accordingly, there was no final legislation enacted into law on this subject in the last Congress. More recently, on January 12, 2007, S. 283, the Compact of Free Association Amendments Act was introduced in the Senate. On February 15, 2007, the bill was reported out of the Senate Committee on Energy and Natural Resources, accompanied by a written report. The operative language of the bill and report dealing with the availability of legal assistance from LSC recipients to citizens of the FAS, regardless of where they are obtaining those services, is the same as in last year's Senate bill (quoted above). A similar bill, H.R. 2705, has also been introduced in the House. As of the publication of this notice, both of the bills are still pending. In addition, LSC received a letter dated June 1, 2007, from David Cohen, Deputy Assistant Secretary for Insular Affairs at the Department of Interior. In his letter, Deputy Assistant Secretary Cohen stated: I can assure you that it is consistent with Federal policy under the Compacts and the [implementing] public laws * * * to allow FAS citizens lawfully resident in the United States to receive LSC services. * * * We are not aware of any intention to permit the extension of LSC benefits to FAS citizens in the FAS but to prevent the extension of those benefits to FAS citizens during their lawful residence in the United States. Subsequently, representatives of LSC met with the Deputy Assistant Secretary, several members of his staff and an attorney from the Department of State. They reiterated their understanding of the Compact and the CFA Act. In particular, they explained that the United States and the FAS countries negotiated the Compacts as essentially an aid package and that the Departments of Interior and State, as well as the FAS nations themselves, consider the extension of benefits to the FAS to include the extension of benefits to FAS citizens, regardless of where those citizens are lawfully residing (in the FAS or the United States). As an example, they noted that the CFA Act extends the Pell Grant (educational grants) program to the FAS and that the grants are provided to FAS citizens regardless of whether they are attending institutions of higher education in the FAS or in the United States. Similarly, FAS citizens are eligible for Job Corps services being provided in the United States. In light of the above, it would appear that LSC's interpretation of the CFA Act, while permissible, was not the only permissible reading and perhaps, in hindsight, not the best available reading. Moreover, LSC appears to be within its legal authority under the law to amend § 1626.10 to permit FAS citizens to receive legal assistance anywhere LSC services are provided without requiring independent eligibility under Part 1626. Need for Amendment of the Regulation—FAS Citizens in the United States When LSC was created in 1974, there were probably no more than a few thousand Micronesians living in Guam and Hawai'i, and a scattering in the continental United States. Even when the first Compact was negotiated in 1986, there were probably still less than ten thousand Micronesians living within U.S. territory, still mostly in Guam and Honolulu. However, when the Compact was renegotiated and extended in 2002 it was then known that the migration pattern was showing greatly increased numbers in the continental United States. According to the Embassy of FSM there are, in addition to the traditionally high populations of Micronesians in Guam and Hawai'i, at least 30,000 to 40,000 FSM citizens living or going to school in the continental U.S. Further, LAA has noted in its request to LSC for rulemaking on this issue that there are also 6,000 to 10,000 Marshallese living in Northwest Arkansas alone. Thus, while there was relatively little demand for legal services among FAS citizens in the United States in 1996, the increased migration of FAS citizens to the United States has significantly increased the potential demand for legal services among members of that community. The inability of financially eligible FAS citizens in the U.S. to access legal services from LSC programs assistance is a growing problem for the U.S. FAS community. LASH, for example, has noted that that FAS citizens working in Hawai'i are more likely to be victims of unscrupulous employers because they believe that such citizens have little recourse to legal services to protect their employment rights. Proposed Amendment of Section 1626.10(a) LSC is proposing to amend section 1626.10(a) to redesignate the existing language in paragraph
(a)as paragraph (a)(1) and to add a new paragraph (a)(2) to read as follows: “All citizens of the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands residing in the United States are eligible to receive legal assistance provided that are they otherwise eligible under the Act.” This language makes explicit that FAS citizens are eligible under Part 1626 for legal assistance and is consistent with the other eligibility provision in section 1626.10 addressing the eligibility of Canadian-born American Indians at least 50% Indians by blood, members of the Texas Band of Kickapoo and foreign nationals seeing assistance pursuant to the Hague Convention. 45 CFR 1626.10(b); 1626.10(c); and 1626.10(d). The “otherwise eligible” language is meant to refer to financial eligibility (for the provision of LSC-funded legal assistance”) and to the permissibility of the legal assistance provided under applicable law and regulation. List of Subjects in 45 CFR Part 1626 Aliens, Grant programs—law, Legal services, Migrant labor, Reporting and recordkeeping requirements. For reasons set forth above, and under the authority of 42 U.S.C. 2996g(e), LSC proposes to amend 45 CFR Part 1626 as follows: PART 1626—Restrictions on Legal Assistance to Aliens 1. The authority citation for part 1626 continues to read as follows: Authority: Pub. L. 104-208, 110 Stat 1321; Pub L. 104-134, 110 Stat. 3009. 2. Amend § 1626.10 by revising paragraph
(a)to read as follows: § 1626.10 Special eligibility questions. (a)(1) This part is not applicable to recipients providing services in the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, or the Republic of the Marshall Islands.
(2)All citizens of the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands residing in the United States are eligible to receive legal assistance provided that are they otherwise eligible under the Act. Victor M. Fortuno, Vice President and General Counsel. [FR Doc. E7-15043 Filed 8-1-07; 8:45 am] BILLING CODE 7050-01-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 216, 232, and 252 RIN 0750-AF71 Defense Federal Acquisition Regulation Supplement; Payments on Cost-Reimbursement Contracts for Services (DFARS Case 2006-D066) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule with request for comments. SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to provide for interim payments under cost-reimbursement contracts for services within 30 days, instead of the current DoD policy of making payments within 14 days. The change will not apply to small business concerns. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before October 1, 2007, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D066, using any of the following methods: • *Federal eRulemaking Portal:* *http://www.regulations.gov.* Follow the instructions for submitting comments. • *E-mail: dfars@osd.mil.* Include DFARS Case 2006-D066 in the subject line of the message. • *Fax:*
(703)602-7887. • *Mail:* Defense Acquisition Regulations System, Attn: Mr. John McPherson, OUSD(AT&L)DPAP(CPF), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • *Hand Delivery/Courier:* Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov,* including any personal information provided. FOR FURTHER INFORMATION CONTACT: Mr. John McPherson,
(703)602-0296. SUPPLEMENTARY INFORMATION: A. Background DFARS 232.906 presently provides for interim payments on cost-reimbursement contracts for services within 14 days after receipt of a proper payment request. The proposed rule would revise this policy to provide for payment to other than small business concerns within 30 days. The proposed change will allow DoD to better cash manage payments without having a significant impact on small business concerns. The proposed change is consistent with the policies of other Government agencies, which do not pay in 14 days. These payments are subject to the Prompt Payment Act. This proposed rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the proposed rule makes no change to payment procedures for small business concerns. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D066. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the proposed rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Parts 216, 232, and 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, DoD proposes to amend 48 CFR Parts 216, 232, and 252 as follows: 1. The authority citation for 48 CFR Parts 216, 232, and 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 216—TYPES OF CONTRACTS 2. Section 216.307 is added to read as follows: 216.307 Contract clauses. (a)(i) The following apply to interim payments on cost-reimbursement contracts for services:
(A)For contracts with other than small business concerns, insert the standard due date of the “30th” day in paragraph (a)(3) of the clause at FAR 52.216-7.
(B)For contracts with small business concerns, insert the “14th” day in paragraph (a)(3) of the clause at FAR 52.216-7.
(ii)For interim payments on cost-reimbursement contracts for other than services, insert the “14th” day in paragraph (a)(3) of the clause at FAR 52.216-7. PART 232—CONTRACT FINANCING 3. Section 232.906 is revised to read as follows: 232.906 Making payments. (a)(i) The restrictions of FAR 32.906 prohibiting early payment do not apply to interim payments made to small business concerns. However, contractors shall not be entitled to interest penalties if the Government fails to make early payment.
(ii)It is DoD policy to make payments within 14 days for cost-reimbursement contracts for services with small business concerns. 4. Section 232.908 is added to read as follows: 232.908 Contract clauses. (c)(3) For cost-reimbursement contracts for services with small business concerns, use the clause at 252.232-7XXX, Payments on Cost-Reimbursement Contracts for Services with Small Business Concerns, instead of Alternate I of the clause at FAR 52.232-25. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 5. Section 252.232-7XXX is added to read as follows: 252.232-7XXX Payments on Cost-Reimbursement Contracts for Services with Small Business Concerns. As prescribed in 232.908(c)(3), use the following clause: PAYMENTS ON COST-REIMBURSEMENT CONTRACTS FOR SERVICES WITH SMALL BUSINESS CONCERNS (XXX 2007)
(a)Paragraphs (a)(2), (a)(3), (a)(4)(ii), (a)(4)(iii), and (a)(5)(i) of the Allowable Cost and Payment clause (FAR 52.216-7) do not apply to this contract.
(b)Although accelerated payments may be made in 14 days in accordance with section 232.906(a)(ii) of the Defense Federal Acquisition Regulation Supplement, for purposes of computing late payment interest penalties that may apply, the due date for payment is the 30th day after the designated billing office receives a proper payment request.
(c)The Contractor shall submit requests for interim payments in accordance with paragraph
(a)of FAR 52.216-7, Allowable Cost and Payment. If the payment request does not comply with contract requirements, it will be returned within 7 days after the date the designated billing office received the request. (End of clause) [FR Doc. E7-14921 Filed 8-1-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 252 RIN 0750-AF73 Defense Federal Acquisition Regulation Supplement; Item Identification and Valuation Clause Update (DFARS Case 2007-D007) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule with request for comments. SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update and clarify requirements for unique identification and valuation of items delivered under DoD contracts. The proposed rule revises the applicable contract clause to reflect the current requirements. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before October 1, 2007, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2007-D007, using any of the following methods: *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. *E-mail:* *dfars@osd.mil.* Include DFARS Case 2007-D007 in the subject line of the message. *Fax:*
(703)602-7887. *Mail:* Defense Acquisition Regulations System, Attn: Mr. Gary Delaney, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. *Hand Delivery/Courier:* Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov,* including any personal information provided. FOR FURTHER INFORMATION CONTACT: Mr. Gary Delaney,
(703)602-8384. SUPPLEMENTARY INFORMATION: A. Background The contract clause at DFARS 252.211-7003, Item Identification and Valuation, requires unique identification for all delivered items for which the Government's unit acquisition cost is $5,000 or more, and for other items designated by the Government. In addition, the clause requires identification of the Government's unit acquisition cost for all delivered items, and provides instructions to contractors regarding the identification and valuation processes. This proposed rule revises the clause at DFARS 252.211-7003 to update and clarify instructions for the identification and valuation processes. The changes include: Updating of references to standards and other documents; clarification of the definition of unique item identifier; specifically addressing the DoD recognized unique identification equivalent, where applicable; clarification of data submission requirements for end items and embedded items; and clarification of requirements for inclusion of the clause in subcontracts. This proposed rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the proposed rule does not significantly change existing requirements relating to the identification and valuation of items delivered under DoD contracts. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2007-D007. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the proposed rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, DoD proposes to amend 48 CFR Part 252 as follows: PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 1. The authority citation for 48 CFR Part 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 252.211-7003 is amended as follows: a. By revising the clause date; b. In paragraph (a), by revising the definitions of “Issuing agency” and “Unique item identifier”; and c. By revising paragraphs
(c)through
(g)to read as follows: 252.211-7003 Item Identification and Valuation. Item Identification and Valuation (XXX 2007)
(a)* * * *Issuing agency* means an organization responsible for assigning a non-repeatable identifier to an enterprise (i.e., Dun & Bradstreet's Data Universal Numbering System
(DUNS)Number, GS1 Company Prefix, or Defense Logistics Information System
(DLIS)Commercial and Government Entity
(CAGE)Code). *Unique item identifier* means a set of data elements marked on items that is globally unique and unambiguous. The term includes a concatenated unique item identifier or a DoD recognized unique identification equivalent.
(c)*Unique item identifier.*
(1)The Contractor shall provide a unique item identifier for—(i) All delivered items for which the Government's unit acquisition cost is $5,000 or more;
(ii)The following items for which the Government's unit acquisition cost is less than $5,000: Contract line, subline, or exhibit line item number Item description
(iii)Subassemblies, components, and parts embedded within delivered items as specified in Attachment Number _.
(2)The unique item identifier and the component data elements of the DoD unique item identification shall not change over the life of the item.
(3)*Data syntax and semantics of unique item identifiers.* The Contractor shall ensure that—
(i)The encoded data elements (except issuing agency code) of the unique item identifier are marked on the item using one of the following three types of data qualifiers, as determined by the Contractor:
(A)Application Identifiers
(AIs)(Format Indicator 05 of ISO/IEC International Standard 15434), in accordance with ISO/IEC International Standard 15418, Information Technology—EAN/UCC Application Identifiers and Fact Data Identifiers and Maintenance and ANSI MH 10.8.2 Data Identifier and Application Identifier Standard.
(B)Data Identifiers
(DIs)(Format Indicator 06 of ISO/IEC International Standard 15434), in accordance with ISO/IEC International Standard 15418, Information Technology—EAN/UCC Application Identifiers and Fact Data Identifiers and Maintenance and ANSI MH 10.8.2 Data Identifier and Application Identifier Standard.
(C)Text Element Identifiers
(TEIs)(Format Indicator 12 of ISO/IEC International Standard 15434), in accordance with the Air Transport Association Common Support Data Dictionary; and
(ii)The encoded data elements of the unique item identifier conform to the transfer structure, syntax, and coding of messages and data formats specified for Format Indicators 05, 06, and 12 in ISO/IEC International Standard 15434, Information Technology—Transfer Syntax for High Capacity Automatic Data Capture Media.
(4)*Unique item identifier.* *(i)* The Contractor shall—(A) Determine whether to—(1) Serialize within the enterprise identifier; *(2)* Serialize within the part, lot, or batch number; or *(3)* Use a DoD recognized unique identification equivalent; and
(B)Place the data elements of the unique item identifier (enterprise identifier; serial number; DoD recognized unique identification equivalent; and for serialization within the part, lot, or batch number only: original part, lot, or batch number) on items requiring marking by paragraph (c)(1) of this clause, based on the criteria provided in the version of MIL-STD-130, Identification Marking of U.S. Military Property, cited in the contract Schedule.
(ii)The issuing agency code—
(A)Shall not be placed on the item; and
(B)Shall be derived from the data qualifier for the enterprise identifier.
(d)For each item that requires unique item identification under paragraph (c)(1)(i) or
(ii)of this clause, in addition to the information provided as part of the Material Inspection and Receiving Report specified elsewhere in this contract, the Contractor shall report at the time of delivery, either as part of, or associated with, the Material Inspection and Receiving Report, the following information:
(1)Unique item identifier.
(2)Unique item identifier type.
(3)Issuing agency code (if concatenated unique item identifier is used).
(4)Enterprise identifier (if concatenated unique item identifier is used).
(5)Original part number (if there is serialization within the original part number).
(6)Lot or batch number (if there is serialization within the lot or batch number).
(7)Current part number (optional and only if not the same as the original part number).
(8)Current part number effective date (optional and only if current part number is used).
(9)Serial number (if concatenated unique item identifier is used).
(10)Government's unit acquisition cost.
(11)Unit of measure.
(e)For embedded subassemblies, components, and parts that require DoD unique item identification under paragraph (c)(1)(iii) of this clause, the Contractor shall report as part of, or associated with, the Material Inspection and Receiving Report specified elsewhere in this contract, the following information:
(1)Unique item identifier of the parent item under paragraph (c)(1) of this clause that contains the embedded subassembly, component, or part.
(2)Unique item identifier of the embedded subassembly, component, or part.
(3)Unique item identifier type.**
(4)Issuing agency code (if concatenated unique item identifier is used).**
(5)Enterprise identifier (if concatenated unique item identifier is used).**
(6)Original part number (if there is serialization within the original part number).**
(7)Lot or batch number (if there is serialization within the lot or batch number).**
(8)Current part number (optional and only if not the same as the original part number).**
(9)Current part number effective date (optional and only if current part number is used).**
(10)Serial number (if concatenated unique item identifier is used).**
(11)Description. ** Once per item.
(f)The Contractor shall submit the information required by paragraphs
(d)and
(e)of this clause in accordance with the data submission procedures at *http://www.acq.osd.mil/dpap/UID/DataSubmission.htm.*
(g)*Subcontracts.* If the Contractor acquires by subcontract, any item(s) for which unique item identification is required in accordance with paragraph (c)(1) of this clause, the Contractor shall include this clause, including this paragraph (g), in the applicable subcontract(s). [FR Doc. E7-14896 Filed 8-1-07; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 679 [I.D. 013006I] RIN 0648-AU93 Fisheries of the Exclusive Economic Zone Off Alaska; Groundfish, Crab, Salmon, and Scallop Fisheries of the Bering Sea and Aleutian Islands Management Area and Gulf of Alaska, Essential Fish Habitat Rule Correction AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Notice of reopening of a comment period. SUMMARY: On June 19, 2007, NMFS published a proposed rule in the **Federal Register** to correct certain provisions of a June 28, 2006, essential fish habitat
(EFH)rule for Alaska fisheries. The comment period deadline for written comments for the proposed rule was June 19, 2007. NMFS is reopening the comment period on this proposed rule because the E-mail account listed in the proposed rule for the submission of comments was in error and did not accept comments as intended. The proposed rule would clarify that portions of EFH management areas in the vicinity of the Aleutian Islands are located in State of Alaska waters. The proposed action also would apply EFH vessel monitoring system and closure requirements to federally permitted vessels operating in State of Alaska waters adjacent to the Gulf of Alaska
(GOA)and Aleutian Islands subarea. This action is necessary to ensure federally permitted vessels operating in State of Alaska waters comply with EFH protection measures. DATES: Written comments must be received by September 4, 2007. ADDRESSES: Send comments to Sue Salveson, Assistant Regional Administrator, Sustainable Fisheries Division, Alaska Region, NMFS, Attn: Records Officer. Comments may be submitted by: • Mail: P.O. Box 21668, Juneau, AK 99802; • Hand delivery: 709 West 9th Street, Room 420A, Juneau, AK; • Fax: 907-586-7557; • E-mail: *VMS-PR-0648-AU93@noaa.gov* . Include in the subject line the following document identifier: “VMS PR.” E-mail comments, with or without attachments, are limited to 5 megabytes; or • Webform at the Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the instructions at that site for submitting comments. FOR FURTHER INFORMATION CONTACT: Melanie Brown, 907-586-7228 or e-mail at *melanie.brown@noaa.gov* . SUPPLEMENTARY INFORMATION: The proposed rule was published in the **Federal Register** on June 19, 2007 (72 FR 33732). Additional information on the proposed management measures are described in the proposed rule. Dated: July 30, 2007. Emily H. Menashes, Acting Director, Office of Sustainable Fisheries, National Marine Fisheries Service. [FR Doc. E7-15045 Filed 8-1-07; 8:45 am] BILLING CODE 3510-22-S 72 148 Thursday, August 2, 2007 Notices DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request July 30, 2007. The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding
(a)Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(b)the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used;
(c)ways to enhance the quality, utility and clarity of the information to be collected;
(d)ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), *OIRA_Submission@OMB.EOP.GOV* or fax
(202)395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Comments regarding these information collections are best assured of having their full effect if received within 30 days of this notification. Copies of the submission(s) may be obtained by calling
(202)720-8958. An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number. *Animal and Plant Health Inspection Service,* *Title:* Blood and Tissue Collection at Slaughtering Establishments *OMB Control Number:* 0579-0212 *Summary of Collection:* Title 21, U.S.C. 117, Animal Industry Act of 1884, authorizes the Secretary to prevent, control and eliminate domestic diseases such as brucellosis and chronic wasting disease, as well as to take action to prevent and to manage exotic diseases such as foot-and-mouth disease, rinderpest, and other foreign animal diseases. Regulations in 9 CFR, subchapter C, part 71, provide for the collection of blood and tissue samples from livestock (horses, cattle, bison, captive cervids, sheep and goats, swine, and other farmed animals) and poultry at slaughter. Disease surveillance plays an important role in the APHIS mission of protecting the health of the U.S. livestock and poultry population, and testing animals for disease is an important surveillance tool. The Animal and Plant Health Inspection Service (APHIS) will collect information using VS form 10-4 and 10-4A, Specimen Submission Form and Supplemental Sheet and VS form 10-5, Facility Inspection Report. *Need and Use of the Information:* APHIS will collect information to identify specimens (blood and tissue) submitted for laboratory analysis and to identify the individual animal from which the specimen was taken as well as the animal's herd or flock; the type of specimen submitted, and the purpose for submitting the specimen. Without the information contained on the form, personnel at the National Veterinary Services Laboratories or other Federal laboratories would have no way of identifying or processing the specimens being sent to them for analysis. *Description of Respondents:* Business or other for-profit. *Number of Respondents:* 155. *Frequency of Responses:* Reporting: On occasion. *Total Burden Hours:* 4,209. Ruth Brown, Departmental Information Collection Clearance Officer. [FR Doc. E7-15010 Filed 8-1-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service [Docket No. APHIS-2007-0083] Notice of Request for Extension of Approval of an Information Collection; Virus-Serum-Toxin Act and Regulations AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Extension of approval of an information collection; comment request. SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request an extension of approval of an information collection associated with the Virus-Serum-Toxin Act and regulations. DATES: We will consider all comments that we receive on or October 1, 2007. ADDRESSES: You may submit comments by either of the following methods: *Federal eRulemaking Portal:* Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2007-0083 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. *Postal Mail/Commercial Delivery:* Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2007-0083, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2007-0083. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: For information on the Virus-Serum-Toxin Act and regulations, contact Dr. Albert Morgan, Section Leader, Operational Support Staff, Center for Veterinary Biologics, VS, APHIS, 4700 River Road Unit 148, Riverdale MD 20737,
(301)734-8245. For copies of more detailed information on the information collection, contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. SUPPLEMENTARY INFORMATION: *Title:* Virus-Serum-Toxin Act and Regulations. *OMB Number:* 0579-0013. *Type of Request:* Extension of approval of an information collection. *Abstract:* The Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture is responsible for ensuring that veterinary biological products are pure, safe, potent, and effective. This program is conducted under the Virus-Serum-Toxin Act (21 U.S.C. 151 *et seq.* ) and the regulations in 9 CFR, chapter I, subchapter E. Veterinary biological products are defined as all viruses, serums, toxins (excluding substances that are selectively toxic to microorganisms, e.g., antibiotics), or analogous products at any stage of production, shipment, distribution, or sale, which are intended for use in the treatment of animals and which act primarily through the direct stimulation, supplementation, enhancement, or modulation of the immune system or immune response. The term “biological products” includes, but is not limited to, vaccines, bacterins, allergens, antibodies, antitoxins, toxoids, immunostimulants, certain cytokines, antigenic or immunizing components of live organisms, and diagnostic components that are of natural or synthetic origin or that are derived from synthesizing or altering various substances or components of substances, such as microorganisms, genes or genetic sequences, carbohydrates, proteins, antigens, allergens, or antibodies. To accomplish its mission, APHIS issues licenses to qualified establishments that produce biological products and issues permits to importers of such products. We also enforce requirements concerning production, packaging, labeling, and shipping of these products and set standards for the testing of these products. Fulfilling this responsibility requires us to use certain information collection activities such as establishment license applications, product license applications, product import permit applications, product and test report forms, and field study summaries. This information helps us to ensure that biological products used in the United States are pure, safe, potent, and effective. If we did not collect this information, we would be unable to carry out this mission. We are asking the Office of Management and Budget
(OMB)to approve our use of these information collection activities for an additional 3 years. The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning these information collection activities. These comments will help us:
(1)Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2)Evaluate the accuracy of our estimate of the burden of the information collection, including the validity of the methodology and assumptions used;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)Minimize the burden of the information collection on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies; e.g., permitting electronic submission of responses. *Estimate of burden:* The public reporting burden for this collection of information is estimated to average 4.337559606 hours per response. *Respondents:* U.S. importers, exporters, and shippers of veterinary biological products; State veterinary authorities; and operators of establishments that produce or test veterinary biological products or that engage in product research and development. *Estimated Annual Number of Respondents:* 500. *Estimated Annual Number of Responses per Respondent:* 43.452. *Estimated Annual Number of Responses:* 21,726. *Estimated Total Annual Burden on Respondents:* 94,237.82 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Done in Washington, DC, this 27th day of August 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-14988 Filed 8-1-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service [Docket No. APHIS-2007-0076] Notice of Request for Extension of Approval of an Information Collection; Importation of Tomatoes From Spain, Chile, France, Morocco, and Western Sahara AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Extension of approval of an information collection; comment request. SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request an extension of approval of an information collection associated with our regulations governing the importation of tomatoes from Spain, Chile, France, Morocco, and Western Sahara. DATES: We will consider all comments that we receive on or before October 1, 2007. ADDRESSES: You may submit comments by either of the following methods: Federal eRulemaking Portal: Go to *http://www.regulations.gov,* select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2007-0076 to submit or view public comments and to view supporting and related materials available electronically. Information on using *http://www.Regulations.gov,* including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. Postal Mail/Commercial Delivery: Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2007-0076, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road, Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2007-0076. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: For information regarding foreign quarantine regulations, contact Ms. Sharon Porsche, Import Specialist, Commodity Import Analysis and Operations, PPQ, APHIS, 4700 River Road Unit 133, Riverdale, MD 20737-1236;
(301)734-5281. For copies of more detailed information on the information collection, contact Mrs. Celeste Sickles, APHIS* Information Collection Coordinator, at
(301)734-7477. SUPPLEMENTARY INFORMATION: *Title:* Importation of Tomatoes from Spain, Chile, France, Morocco, and Western Sahara. *OMB Number:* 0579-0131. *Type of Request:* Extension of Approval of an Information Collection. *Abstract:* The Plant Protection Act (PPA, 7 U.S.C. 7701 *et seq.* ) authorizes the Secretary of Agriculture to restrict the importation, entry, or interstate movement of plants, plant products, and other articles to prevent the introduction of plant pests, including fruit flies, into the United States or their dissemination within the United States. Regulations authorized by the PPA concerning the importation of fruits and vegetables into the United States from certain parts of the world are contained in “Subpart—Fruits and Vegetables” (7 CFR 319.56 through 319.56-46). The regulations in 319.56-28 allow tomatoes from Spain, Chile, France, Morocco, and Western Sahara to be imported into the United States subject to certain conditions designed to protect the tomatoes from infestation by the Mediterranean fruit fly (Medfly). Allowing tomatoes to be imported necessitates the use of certain information collection activities, including completing phytosanitary inspection certificates and maintaining records regarding trap placement and Medfly captures. The information we collect serves as the supporting documentation needed to confirm that the tomatoes meet the conditions set forth in the regulations. We are asking the Office of Management and Budget
(OMB)to approve our use of this information collection activity for an additional 3 years. The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection. These comments will help us:
(1)Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2)Evaluate the accuracy of our estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)Minimize the burden of the collection of information on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies; e.g., permitting electronic submission of responses. *Estimate of Burden:* The public reporting burden for this collection of information is estimated to average 0.6960 hour per response. *Respondents:* Importers, foreign officials, shippers. *Estimated Annual Number of Respondents:* 34. *Estimated Annual Number of Responses Per Respondent:* 72. *Estimated Annual Number of Responses:* 2,448. *Estimated Total Annual Burden on Respondents:* 1,704 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Done in Washington, DC, this 27th day of July 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-15008 Filed 8-1-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service [Docket No. APHIS-2007-0077] Notice of Request for Extension of Approval of an Information Collection; Black Stem Rust; Identification Requirements for Addition of Rust-Resistant Varieties AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Extension of Approval of an Information Collection; Comment Request. SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request an extension of approval of an information collection associated with the black stem rust quarantine and regulations. DATES: We will consider all comments that we receive on or before October 1, 2007. ADDRESSES: You may submit comments by either of the following methods: Federal eRulemaking Portal: Go to *http://www.regulations.gov* , select “Animal and Plant Health Inspection Service” from the agency drop-down menu, then click “Submit.” In the Docket ID column, select APHIS-2007-0077 to submit or view public comments and to view supporting and related materials available electronically. Information on using Regulations.gov, including instructions for accessing documents, submitting comments, and viewing the docket after the close of the comment period, is available through the site's “User Tips” link. Postal Mail/Commercial Delivery: Please send four copies of your comment (an original and three copies) to Docket No. APHIS-2007-0077, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road, Unit 118, Riverdale, MD 20737-1238. Please state that your comment refers to Docket No. APHIS-2007-0077. *Reading Room:* You may read any comments that we receive on this docket in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. *Other Information:* Additional information about APHIS and its programs is available on the Internet at *http://www.aphis.usda.gov.* FOR FURTHER INFORMATION CONTACT: For information regarding regulations for the black stem rust quarantine and regulations, contact Dr. Vedpal S. Malik, Agriculturist, Emergency and Domestic Programs, PPQ, APHIS, 4700 River Road Unit 134, Riverdale MD 20737;
(301)734-6774. For copies of more detailed information on the information collection, contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at
(301)734-7477. SUPPLEMENTARY INFORMATION: *Title:* Black Stem Rust; Identification Requirements for Addition of Rust-Resistant Varieties. *OMB Number:* 0579-0186. *Type of Request:* Extension of approval of an information collection. *Abstract:* The Plant Protection Act (7 U.S.C. 7701 *et seq.* ) authorizes the Secretary of Agriculture to prohibit or restrict the importation, entry, or interstate movement of plants and plant products to prevent the introduction of plant pests into the United States or their dissemination within the United States. Black stem rust is one of the most destructive plant diseases of small grains that is known to exist in the United States. The disease is caused by a fungus that reduces the quality and yield of infected wheat, oat, barley, and rye crops by robbing host plants of food and water. In addition to infecting small grains, the fungus lives on a variety of alternate host plants that are species of the genera *Berberis* , *Mahoberberis* , and *Mahonia.* The fungus is spread from host to host by wind-borne spores. The black stem rust quarantine and regulations, contained in 7 CFR 301.38 through 301.38-8 (referred to below as the regulations), quarantine the conterminous 48 States and the District of Columbia and govern the interstate movement of certain plants of the genera *Berberis* , *Mahoberberis* , and *Mahonia* , known as barberry plants. The species of these plants are categorized as either rust-resistant or rust-susceptible. Rust-resistant plants do not pose a risk of spreading black stem rust or of contributing to the development of new races of the rust; rust-susceptible plants do pose such risks. Persons who request the Animal and Plant Health Inspection Service to add a variety to the list of rust-resistant barberry varieties in the regulations must provide the Agency with a description of the variety, including a written description and color pictures that can be used by State nursery inspectors to clearly identify the variety and distinguish it from other varieties. This requirement helps to ensure that State plant inspectors can clearly determine whether plants moving into or through their States are rust-resistant varieties listed in 7 CFR 301.38-2. We are asking the Office of Management and Budget
(OMB)to approve our use of these information collection activities for an additional 3 years. The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection activity. APHIS needs this outside input to help accomplish the following:
(1)Evaluate whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;
(2)Evaluate the accuracy of our estimate of the burden of the information collection, including the validity of the methodology and assumptions used;
(3)Enhance the quality, utility, and clarity of the information to be collected; and
(4)Minimize the burden of the information collection on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies, *e.g.* , permitting electronic submission of responses. *Estimate of Burden:* The public reporting burden for this collection of information is estimated to average 4 hours per response. *Respondents:* Nurseries. *Estimated Annual Number of Respondents :* 4. *Estimated Annual Number of Responses per Respondent:* 2. *Estimated Annual Number of Responses:* 8. *Estimated Total Annual Burden on Respondents:* 32 hours. (Due to averaging, the total annual burden hours may not equal the product of the annual number of responses multiplied by the reporting burden per response.) All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. Done in Washington, DC, this 27th day of July 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-15009 Filed 8-1-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service [Docket No. APHIS-2006-0195] Monsanto Company; Determination of Nonregulated Status for Soybean Genetically Engineered for Glyphosate Herbicide Tolerance AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Notice. SUMMARY: We are advising the public of our determination that a soybean line developed by the Monsanto Company, designated as transformation event MON 89788, which has been genetically engineered for tolerance to the herbicide glyphosate, is no longer considered a regulated article under our regulations governing the introduction of certain genetically engineered organisms. Our determination is based on our evaluation of data submitted by the Monsanto Company in its petition for a determination of nonregulated status, our analysis of other scientific data, and comments received from the public in response to a previous notice announcing the availability of the petition for nonregulated status and an environmental assessment. This notice also announces the availability of our written determination and finding of no significant impact. DATES: *Effective Date:* July 23, 2007. ADDRESSES: You may read the petition, environmental assessment, determination, finding of no significant impact, the comments we received on our previous notice, and our responses to those comments in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue, SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call
(202)690-2817 before coming. To view those documents on the Internet, go to *http://www.regulations.gov,* click on the “Advanced Search” tab, and select “Docket Search.” In the Docket ID field, enter APHIS-2006-0195, then click “Submit.” Clicking on the Docket ID link in the search results page will produce a list of all documents in the docket. FOR FURTHER INFORMATION CONTACT: Dr. Virgil Meier, Biotechnology Regulatory Services, APHIS, 4700 River Road, Unit 147, Riverdale, MD 20737-1236;
(301)734-3363. To obtain copies of the petition, environmental assessment, or the finding of no significant impact, contact Ms. Cynthia Eck at
(301)734-0667; *cynthia.a.eck@aphis.usda.gov.* Those documents may also be viewed on the Internet at *http://www.aphis.usda.gov/brs/aphisdocs/06_17801p.pdf* and *http://www.aphis.usda.gov/brs/aphisdocs/06_17801p_ea.pdf* . SUPPLEMENTARY INFORMATION: Background The regulations in 7 CFR part 340, “Introduction of Organisms and Products Altered or Produced Through Genetic Engineering Which Are Plant Pests or Which There Is Reason to Believe Are Plant Pests,” regulate, among other things, the introduction (importation, interstate movement, or release into the environment) of organisms and products altered or produced through genetic engineering that are plant pests or that there is reason to believe are plant pests. Such genetically engineered organisms and products are considered “regulated articles.” The regulations in § 340.6(a) provide that any person may submit a petition to the Animal and Plant Health Inspection Service (APHIS) seeking a determination that an article should not be regulated under 7 CFR part 340. Paragraphs
(b)and
(c)of § 340.6 describe the form that a petition for a determination of nonregulated status must take and the information that must be included in the petition. On June 27, 2006, APHIS received a petition seeking a determination of nonregulated status (APHIS Petition Number 06-178-01p) from Monsanto Company of St. Louis, MO (Monsanto), for soybean ( *Glycine max* L.) designated as transformation event MON 89788, which has been genetically engineered for tolerance to the herbicide glyphosate, stating that soybean line MON 89788 does not present a plant pest risk and, therefore, should not be a regulated article under APHIS' regulations in 7 CFR part 340. As described in the petition, MON 89788 soybean plants have been genetically engineered to express a 5-enolpyruvylshikimate-3-phosphate synthase protein from *Agrobacterium* sp. strain CP4 (CP4 EPSPS), which confers tolerance to the herbicide glyphosate. Expression of the added gene is controlled, in part, by gene sequences derived from *Arabidopsis thaliana* and the plant pathogen figwort mosaic virus. The *Agrobacterium tumefaciens* transformation method was used to transfer the added genetic material into the recipient parental soybean line A3244. MON 89788 soybean plants have been considered regulated articles under the regulations in 7 CFR part 340 because they contain gene sequences from plant pathogens. MON 89788 soybean plants have been field tested in the United States since 2001 under notifications authorized by APHIS. In the process of reviewing the notifications for field trials of the subject soybean plants, APHIS determined that the vectors and other elements were disarmed and that field trials, which were conducted under conditions of reproductive and physical confinement or isolation, would not present a risk of plant pest introduction or dissemination. In a notice 1 published in the **Federal Register** on February 5, 2007 (72 FR 5261-5263, Docket No. APHIS-2006-0195), APHIS announced the availability of Monsanto's petition and the associated environmental assessment (EA). APHIS solicited comments on whether the subject soybean would present a plant pest risk for 60 days ending April 6, 2007. APHIS received 23 comments during the comment period, with 12 comments submitted in support of the conclusions drawn in the EA and 11 opposed. APHIS' responses to these comments can be found in an attachment to the finding of no significant impact. 1 To view the notice, the EA, and the comments we received, go to *http://www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=APHIS-2006-0195. * Determination Based on APHIS' analysis of field, greenhouse, and laboratory data submitted by Monsanto, references provided in the petition, other relevant information described in the EA, and comments provided by the public, APHIS has determined that Monsanto's soybean line, designated as MON 89788, will not pose a plant pest risk for the following reasons:
(1)Gene introgression from MON 89788 soybean into its sexually compatible relatives in the United States and its territories is extremely unlikely and consequently the potential impact of introgression is not foreseeable;
(2)the subgenus *Glycine max,* on which MON 89788 is based, is not considered to be a weed and does not persist in unmanaged ecosystems;
(3)it does not pose a risk to non-target organisms, including beneficial organisms and threatened or endangered species, because the CP4 EPSPS protein is not known to have any toxic properties and has minimal potential to be a food allergen;
(4)MON 89788 exhibits no traits that should cause increased weediness, and that its unconfined cultivation should not lead to increased weediness of other sexually compatible relatives (of which there are none in the United States);
(5)if MON 89788 were to be grown commercially, the effect on agricultural practices from introducing MON 89788 into the environment should be no different than for the previously deregulated Roundup Ready 40-3-2 soybean line expressing the same CP4 EPSPS protein from *Agrobacterium* sp. Strain CP4, with which APHIS has over 10 years of experience;
(6)APHIS does not expect MON 89788 to have any impacts on the development of herbicide resistant weeds or a cumulative impact in combination with other glyphosate tolerant crops;
(7)there should be no significant impact from the stacking of herbicide resistant traits;
(8)if MON 89788 were to be grown commercially, the potential impact on organic farming should not change from the current situation where close to 90 percent of soybeans produced are Roundup Ready and organic farmers or other farmers who choose not to plant or sell Roundup Ready soybean or other transgenic soybeans will still be able to purchase and grow nontransgenic soybeans and will be able to coexist with biotech soybean producers as they do now;
(9)APHIS' analysis of data on agronomic performance, disease and insect susceptibility, and compositional profiles of MON 89788 and its non-genetically engineered counterpart indicates no significant differences between the two that would be expected to cause either a direct or indirect plant pest effect on raw or processed plant commodities from the deregulation of MON 89788;
(10)APHIS has reviewed field performance data submitted by the petitioner, and these data indicate that the engineered plant is not different in any fitness characteristics from its parent that might cause MON 89788 to become invasive; and
(11)none of the alternatives proposed in the EA are expected to have significant human health or environmental effects. National Environmental Policy Act To provide the public with documentation of APHIS' review and analysis of any potential environmental impacts associated with the determination of nonregulated status for MON 89788, an EA was prepared. The EA was prepared in accordance with
(1)The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 *et seq.* ),
(2)regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508),
(3)USDA regulations implementing NEPA (7 CFR part 1b), and
(4)APHIS' NEPA Implementing Procedures (7 CFR part 372). Based on that EA, APHIS has reached a finding of no significant impact with regard to the determination that Monsanto soybean line MON 89788 and lines developed from it are no longer regulated articles under its regulations in 7 CFR part 340. Copies of the EA and finding of no significant impact are available as indicated in the ADDRESSES and FOR FURTHER INFORMATION CONTACT sections of this notice. Authority: 7 U.S.C. 7701-7772 and 7781-7786; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.3. Done in Washington, DC, this 27th day of July 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-15001 Filed 8-1-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service [Docket No. APHIS-2007-0106] Secretary's Advisory Committee on Foreign Animal and Poultry Diseases; Meeting AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Notice of meeting. SUMMARY: Pursuant to the Federal Advisory Committee Act (5 U.S.C. App. II), we are giving notice of a meeting of the Secretary's Advisory Committee on Foreign Animal and Poultry Diseases. DATES: A session open to the public will be held on August 21, 2007, from 8 a.m. to 5 p.m. ADDRESSES: The meeting will be held in the Jamie L. Whitten Federal Building, 12th Street and Jefferson Drive, SW., Washington, DC, in room 107A. FOR FURTHER INFORMATION CONTACT: Dr. Bethany O'Brien, Acting Director Interagency Coordination, National Center for Animal Health Emergency Management, VS, APHIS, 4700 River Road, Unit 41, Riverdale, MD 20737;
(301)734-0825. SUPPLEMENTARY INFORMATION: The Secretary's Advisory Committee on Foreign Animal and Poultry Diseases (the Committee) advises the Secretary of Agriculture on actions necessary to prevent the introduction of foreign diseases of livestock and poultry into the United States. In addition, the Committee advises the Secretary on contingency planning and on maintaining a state of preparedness to deal with these diseases, if introduced. The meeting will focus on the U.S. animal health emergency management system and on the foreign animal disease situation worldwide and its relevance to the United States. The session will be open to the public. However, due to time constraints, the public will not be allowed to participate in the Committee's discussions. You may obtain an agenda for the meeting by contacting Dr. Bethany O'Brien at the address listed under FOR FURTHER INFORMATION CONTACT . Written statements on meeting topics may be filed with the Committee before or after the meeting by sending them to the person listed under FOR FURTHER INFORMATION CONTACT . Written statements may also be filed at the meeting. Please refer to Docket No. APHIS-2007-0106 when submitting your statements. Upon entering the Whitten Building, visitors should inform security personnel that they are attending the Advisory Committee meeting on Foreign Animal and Poultry Diseases. Photo identification is required. Visitor badges must be worn at all times while inside the building. Done in Washington, DC, this 27th day of July 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-14987 Filed 8-1-07; 8:45 am] BILLING CODE 3410-34-P DEPARTMENT OF AGRICULTURE Food Safety and Inspection Service [Docket No. FSIS-2007-0027] National Advisory Committee on Meat and Poultry Inspection AGENCY: Food Safety and Inspection Service, USDA. ACTION: Notice of public meeting. SUMMARY: Pursuant to the Federal Advisory Committee Act, 5 U.S.C. App., the National Advisory Committee on Meat and Poultry Inspection (NACMPI) will hold a public meeting on August 8-9, 2007, to review and discuss the following issues:
(1)Data Collection and Analysis at the Food Safety and Inspection Service (FSIS): Standard Operating Procedures,
(2)Linking FSIS Activities to its Public Health Goals, and
(3)Pilot Project to Explore Mechanisms for Sharing Industry Data with FSIS. The first issue, Data Collection and Analysis at FSIS: Standard Operating Procedures, will be presented to the entire Committee for discussion during the morning session on August 8, 2007. The other two issues will be presented to the entire Committee in the afternoon session. The committee will then divide into two subcommittees. These subcommittees will meet in the afternoon of August 8, 2007, to discuss the issues Linking FSIS Activities to its Public Health Goals and Pilot Project to Explore Mechanisms for Sharing Industry Data with FSIS. Each subcommittee will provide a report of their comments and recommendations to the full committee on the morning of August 9, 2007. DATES: The full Committee will hold a public meeting on Wednesday, August 8, and Thursday, August 9, 2007, from 8:30 a.m. to 2 p.m. Subcommittees will hold open meetings on Wednesday, August 8, 2007, from 2 p.m. to 6 p.m. ADDRESSES: All Committee meetings will take place at George Mason University, 3401 N. Fairfax Drive, Arlington, VA 22201. A meeting agenda is available on the Internet at the NACMPI Web site, *http://www.fsis.usda.gov/about_fsis/nacmpi/index.asp.* The NACMPI meeting agenda, together with information and resource materials on public health-based inspection, is also available on the Internet at, *http://www.fsis.usda.gov/Regulations_&_Policies/Risk_Based_Inspection/index.asp.* FSIS welcomes comments on the topics to be discussed at the NACMPI public meeting. Comments may be submitted by any of the following methods: *Electronic mail: NACMPI@fsis.usda.gov.* *Mail, including floppy disks or CD-ROMs:* Send to National Advisory Committee on Meat and Poultry Inspection, United States Department of Agriculture, Food Safety and Inspection Service, 14th & Independence Avenue, SW., Mail Drop 405 Aerospace, Washington, DC 20250. *Hand- or courier-delivered items:* Deliver to Loraine Cannon at 901 D Street SW., Washington, DC. To deliver these items, the building security guard must first call
(202)690-6520. *Facsimile:* Send to Loraine Cannon,
(202)690-6519. All submissions received must include the Agency name and docket number FSIS-2007-0027. FOR FURTHER INFORMATION CONTACT: Robert Tynan for technical information at
(202)720-3884, or e-mail *robert.tynan@fsis.usda.gov* and Loraine Cannon for meeting information at
(202)690-6647, Fax
(202)690-6519, or e-mail *NACMPI@fsis.usda.gov.* Persons requiring a sign language interpreter or other special accommodations should notify Loraine Cannon at the numbers above or by e-mail. SUPPLEMENTARY INFORMATION: Background The NACMPI provides advice and recommendations to the Secretary of Agriculture pertaining to the Federal and State meat and poultry inspection programs, pursuant to sections 7(c), 24, 205, 301(a)(3), 301(a)(4), and 301(c) of the Federal Meat Inspection Act [21 U.S.C. 607(c), 624, 645, 661(a)(3), 661(a)(4), and 661(c)] and sections 5(a)(3), 5(a)(4), 5(c), 8(b), and 11(e) of the Poultry Products Inspection Act [21 U.S.C. 454(a)(3), 454(a)(4), 454(c), 457(b), and 460(e)]. The Administrator of FSIS is the chairperson of the Committee. Membership of the Committee is drawn from representatives of consumer groups; producers, processors, and marketers from the meat, poultry and egg product industries; State and local government officials; and academia. The current members of the NACMPI are: Ms. Kibbe M. Conti, Northern Plains Nutrition Consulting, Rapid City, SD; Mr. Brian R. Covington, Keystone Foods LLC, West Conshohocken, PA; Dr. Catherine N. Cutter, Pennsylvania State University, University Park, PA; Dr. James S. Dickson, Iowa State University, Ames, IA; Mr. Kevin M. Elfering, Minnesota Department of Agriculture, St. Paul, MN; Mr. Mike W. Finnegan, Montana Meat & Poultry Inspection Bureau, Helena, MT; Ms. Carol Tucker Foreman, Consumer Federation of America, Chevy Chase, MD; Dr. Andrea L. Grondahl, North Dakota Department of Agriculture, Bismarck, ND; Dr. Joseph J. Harris, Southwest Meat Association, Bryan, TX; Dr. Craig W. Henry, Food Products Association, Washington, DC; Ms. Cheryl D. Jones, Morehouse School of Medicine, Atlanta, GA; Mr. Michael E. Kowalcyk, DunnhumbyUSA LLC, Cincinnati, OH; Dr. Shelton E. Murinda, California State Polytechnic University, Pomona, CA; Dr. Edna Negron-Bravo, University of Puerto Rico, Mayaguez, PR; Dr. Michael L. Rybolt, National Turkey Federation, Washington, DC; Mr. Mark P. Schad, Schad Meats, Inc., Cincinnati, OH; and Dr. Stanley A. Stromberg, Oklahoma Department of Agriculture, Food, and Forestry, Oklahoma City, OK. The Committee has subcommittees to deliberate on specific issues and make recommendations to the whole Committee. The Committee makes recommendations to the Secretary of Agriculture. All interested parties are welcome to attend the Meetings and to submit written comments and suggestions concerning issues the Committee will review and discuss. The comments and the official transcript of the meeting, when they become available, will be kept in the FSIS Docket Room, U.S. Department of Agriculture, Food Safety and Inspection Service, 300 12th Street, SW., Room 102, Cotton Annex, Washington, DC 20250, and posted on the Agency's NACMPI Web site, *http://www.fsis.usda.gov/about_fsis/nacmpi/index.asp.* Members of the public will be required to register before entering the meeting. Additional Public Notification Public awareness of all segments of rulemaking and policy development is important. Consequently, in an effort to ensure that minorities, women, and persons with disabilities are aware of this notice, FSIS will announce it on-line through the FSIS Web page located at *http://www.fsis.usda.gov/regulations/2007 Notices Index/* . FSIS will also make copies of this **Federal Register** publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, **Federal Register** notices, FSIS public meetings, and other types of information that could affect or would be of interest to constituents and stakeholders. The Update is communicated via Listserv, a free electronic mail subscription service for industry, trade and farm groups, consumer interest groups, allied health professionals, and other individuals who have asked to be included. The Update is available on the FSIS Web page. Through the Listserv and Web page, FSIS is able to provide information to a much broader and more diverse audience. In addition, FSIS offers an e-mail subscription service which provides automatic and customized access to selected food safety news and information. This service is available at *http://www.fsis.usda.gov/news and events/email subscription/* . Options range from recalls to export information to regulations, directives and notices. Customers can add or delete subscriptions themselves and have the option to password protect their account. Done in Washington, DC on July 24, 2007. Alfred V. Almanza, Administrator. [FR Doc. 07-3783 Filed 7-30-07; 4:29 pm]
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  • 9 CFR 93
  • 9 CFR 71.7
  • 7 CFR 2.22
  • 14 CFR 39
  • 18 CFR 385
  • Pub. L. 105-277
  • 5 CFR 1320.12
  • 5 USC 601-612
  • 5 USC 551-557
  • 15 USC 717-717z
  • 16 USC 791a-825v
  • 42 USC 7101-7352
  • 26 CFR 1
  • Pub. L. 109-280
  • 120 Stat. 780
  • Treas. Reg. 1.509(a)
  • Rev. Rul. 76-208
  • Treas. Reg. 53.4942(b)
  • Treas. Reg. 53.4942(a)
  • 26 CFR 26
  • Pub. L. 107-16
  • 115 Stat. 38
  • 40 CFR 52
  • 40 CFR 52.541
  • 40 CFR 96
  • 40 CFR 96.304
  • 40 CFR 75
  • Pub. L. 104-4
  • 40 CFR 50
  • 472 F.3d 882
  • 375 F.3d 537
  • 285 F.3d 63
  • 40 CFR 81
  • 40 CFR 93.118(f)(1)
  • 40 CFR 58
  • 265 F.3d 426
  • 144 F.3d 984
  • 40 CFR 93
  • 40 CFR 93.101
  • 40 CFR 93.118(e)(4)
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U.S.C.§ 106
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F. App'x472 F.3d 882
F. App'x375 F.3d 537
F. App'x285 F.3d 63
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