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Code · REGISTER · 2007-08-09 · Agricultural Agricultural Marketing Service RULES Nectarines and peaches grown in California, 44725-44728 E7-15393 Agriculture Agriculture Department See Agricultural Marketing Service See Forest Serv · Unknown

Unknown. Final rule

72,863 words·~331 min read·/register/2007/08/09/07-3871

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

--- schema: federal-register doc_type: fedreg source_file: FR-2007-08-09.xml --- 72 153 Thursday, August 9, 2007 Contents Agricultural Agricultural Marketing Service RULES Nectarines and peaches grown in California, 44725-44728 E7-15393 Agriculture Agriculture Department See Agricultural Marketing Service See Forest Service See Rural Housing Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 44819 E7-15600 Army Army Department See Engineers Corps Coast Guard Coast Guard RULES Ports and waterways safety; regulated navigation areas, safety zones, security zones, etc.:
Oahu, Maui, Hawaii, and Kauai, HI, 44775-44778 E7-15508 NOTICES Agency information collection activities; proposals, submissions, and approvals, 44847-44848 E7-15482 Committees; establishment, renewal, termination, etc.: National Boating Safety Advisory Council, 44849 E7-15505 Meetings: Houston/Galveston Navigation Safety Advisory Committee, 44849-44850 E7-15513 Commerce Commerce Department See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration NOTICES Committees; establishment, renewal, termination, etc.:
Departmental Performance Review Board, 44821 07-3886 Comptroller Comptroller of the Currency NOTICES Agency information collection activities; proposals, submissions, and approvals, 44920-44921 E7-15502 Defense Defense Department See Engineers Corps See Navy Department NOTICES Meetings: Scientific Advisory Board, 44835 07-3880 Drug Drug Enforcement Administration NOTICES *Applications, hearings, determinations, etc.:* Alcan Packaging-Bethlehem, 44858-44859 E7-15498 Almac Clinical Services Inc., 44859 E7-15512 Aptuit (Allendale) Inc, 44859-44860 E7-15553 Cambrex North Brunswick, Inc., 44860 E7-15500 E7-15510 Chattem Chemicals, Inc., 44860-44861 E7-15499 Noramco Inc., 44861 E7-15514 Penick Corp., 44861 E7-15515 Sigma Aldrich Research, Biochemicals, Inc., 44861-44862 E7-15507 Education Education Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 44836-44837 E7-15532 Employment Employment and Training Administration NOTICES Adjustment assistance; applications, determinations, etc.:
Bemis Co., Inc., 44862 E7-15536 Everbrite et al., 44862-44863 E7-15534 Freightliner, LLC, 44863 E7-15533 Nielsen Co., 44863 E7-15538 Paxar Corp., 44864 E7-15537 Quaker Fabric Corp. of Fall River et al., 44864-44866 E7-15535 Energy Energy Department See Federal Energy Regulatory Commission Engineers Engineers Corps NOTICES Environmental statements; notice of intent: Broward County, FL; Water Conservation Area 3 Decompartmentalization and Sheetflow Enhancement Project, 44835-44836 07-3876 EPA Environmental Protection Agency RULES Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas:
Kansas, 44781-44784 E7-15251 Missouri, 44778-44781 E7-15264 Ohio, 44784-44787 E7-15474 Superfund program: National oil and hazardous substances contingency plan priorities list, 44787-44790 E7-15332 PROPOSED RULES Air quality implementation plans; approval and promulgation; various States: Kansas, 44816-44817 E7-15255 Missouri, 44817 E7-15258 Superfund program: National oil and hazardous substances contingency plan priorities list, 44817-44818 E7-15331 NOTICES Agency information collection activities; proposals, submissions, and approvals, 44843-44845 E7-15601 Meetings:
Gulf of Mexico Program Management Committee, 44845 E7-15605 Executive Executive Office of the President See Presidential Documents FAA Federal Aviation Administration RULES Airworthiness directives: Airbus, 44737-44740, 44748-44753 E7-15225 E7-15413 E7-15414 Boeing, 44728-44734, 44740-44746, 44753-44756 E7-14866 E7-15220 E7-15410 E7-15416 E7-15419 Empresa Brasileira de Aeronautica S.A. (EMBRAER), 44734-44737 E7-15412 Fokker, 44746-44748 E7-15417 PROPOSED RULES Airworthiness directives:
Hawker Beechcraft, 44813-44814 E7-15424 Class E airspace, 44815-44816 E7-15578 NOTICES Airport noise compatibility program: Noise exposure maps— Des Moines International Airport, IA, 44913-44914 07-3883 Springfield-Beckley Municipal Airport, IL, 44914-44915 07-3884 Federal Energy Federal Energy Regulatory Commission NOTICES Complaints filed: Midwest Municipal Transmission Group, 44838-44839 E7-15523 Tesoro Refining and Marketing Co., 44839 E7-15524 Electric rate and corporate regulation combined filings, 44839-44841 E7-15530 Hydroelectric applications, 44842 E7-15525 Meetings:
Reliability Standard Compliance and Enforcement in Regions with Independent System Operators and Regional Transmission Organizations; technical conference, 44842-44843 E7-15527 *Applications, hearings, determinations, etc.:* Cheniere Creole Trail Pipeline, L.P., et al., 44837 E7-15522 Columbia Gulf Transmission Corp. et al., 44838 E7-15526 Steuben Gas Storage Co., 44838 E7-15521 Federal Highway Federal Highway Administration NOTICES Environmental statements; notice of intent:
Whiteside County, IL, 44915 07-3874 FMC Federal Maritime Commission NOTICES Ocean transportation intermediary licenses: Green Sea Logistics et al., 44845-44846 E7-15564 Federal Motor Federal Motor Carrier Safety Administration RULES Motor carrier safety standards: Commercial motor vehicle accidents involving fires; recording; regulatory guidance Correction, 44792 E7-15599 NOTICES Motor carrier safety standards: Driver qualifications; epilepsy and seizure disorders exemptions, 44916-44918 E7-15495 Driver qualifications; vision requirement exemptions, 44915-44916 E7-15492 Federal Railroad Federal Railroad Administration RULES Railroad safety:
Locomotive horns use at highway-rail grade crossings; sounding requirements; technical amendments, 44790-44792 07-3871 Fish Fish and Wildlife Service NOTICES Environmental statements; notice of intent: Modoc National Wildlife Refuge; comprehensive conservation plan, 44850-44851 E7-15603 Forest Forest Service NOTICES Meetings: Eastern Region Recreation Resource Advisory Committee, 44819-44820 07-3870 Southern Recreation Resource Advisory Committee, 44820 07-3869 Health Health and Human Services Department See Health Resources and Services Administration Health Health Resources and Services Administration NOTICES Privacy Act; systems of records; correction, 44846-44847 07-3873 Homeland Homeland Security Department See Coast Guard Industry Industry and Security Bureau NOTICES Export privileges, actions affecting:
Lachman, Walter L.; correction, 44821 07-3887 Subilia, Maurice; correction, 44821 07-3888 Interior Interior Department See Fish and Wildlife Service See Land Management Bureau See Minerals Management Service See National Park Service NOTICES Meetings: Blackstone River Valley National Heritage Corridor Commission, 44850 E7-15428 International International Trade Administration NOTICES Antidumping: Hot-rolled carbon steel flat products from— Romania, 44821-44825 E7-15573 Polyethylene retail carrier bags from— Malaysia, 44825-44827 E7-15570 Preserved mushrooms from— China, 44827-44830 E7-15575 Steel concrete reinforcing bars from— South Korea, 44830 E7-15571 Various countries, 44830-44831 E7-15572 Overseas trade missions: 2007 trade missions— Vietnam; secretarial business development mission, 44831-44833 E7-15576 Justice Justice Department See Drug Enforcement Administration PROPOSED RULES Death sentences in Federal cases; implementation:
State capital counsel systems; certification process, 44816 E7-15254 NOTICES Pollution control; consent judgments: Cook Development Corp., et al., 44857 07-3866 Country Acres Farm, Inc., 44857-44858 07-3867 Marcal Paper Mills, Inc., 44858 07-3865 San Diego Baykeeper, et al., 44858 07-3868 Labor Labor Department See Employment and Training Administration See Labor Statistics Bureau Labor Labor Statistics Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 44866-44867 E7-15540 Land Land Management Bureau NOTICES Environmental statements; notice of intent:
Woods Cross, UT to Las Vegas, NV; liquid petroleum products pipeline, 44851-44852 E7-15580 Oil and gas leases: Utah, 44852-44853 E7-15584 Survey plat filings: Oregon/Washington, 44853 E7-15559 Maritime Maritime Administration NOTICES Coastwise trade laws; administrative waivers: MANITOU, 44918-44919 E7-15497 SIVE, 44919 E7-15501 WINDSONG, 44919-44920 E7-15496 Millennium Millennium Challenge Corporation NOTICES Reports and guidance documents; availability, etc.: Quarterly report, 44867-44873 07-3879 Minerals Minerals Management Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 44853-44856 E7-15590 NASA National Aeronautics and Space Administration NOTICES Grants and cooperative agreements; availability, etc.:
Centennial Challenges Beam Power Challenge, 44873-44874 E7-15519 Centennial Challenges Tether Challenge, 44873 E7-15518 National Archives National Archives and Records Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 44874-44875 E7-15609 Agency records schedules; availability, 44875-44877 E7-15610 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management: Alaska; fisheries of Exclusive Economic Zone— Bering Sea and Aleutian Islands Pacific cod, 44792-44793 07-3889 Pacific halibut and sablefish, 44795-44812 E7-15341 Pacific Ocean perch, 44794-44795 07-3893 Rock sole, flathead sole, and other flatfish, 44793 07-3894 Alaska; fisheries of Exclusive Economic Zone— Yellowfin sole, 44794 07-3892 NOTICES Committees; establishment, renewal, termination, etc.:
Pinniped-Fishery Interaction Task Force; meeting, 44833-44834 E7-15516 Exempted fishing permit applications, determinations, etc., 44834-44835 E7-15511 National Park National Park Service NOTICES Environmental statements; availability, etc.: Bandelier National Monument, NM, 44856 E7-15562 Environmental statements; notice of intent: Grand Teton National Park, WY, 44856-44857 E7-15561 Navy Navy Department NOTICES Meetings: Chief of Naval Operations Executive Panel, 44836 E7-15597 Nuclear Nuclear Regulatory Commission NOTICES *Applications, hearings, determinations, etc.:* Shaw AREVA MOX Services, 44877-44878 E7-15557 Peace Peace Corps NOTICES Privacy Act; systems of records, 44878-44880 E7-15602 Pipeline Pipeline and Hazardous Materials Safety Administration RULES Hazardous materials transportation:
Lithium batteries, 44930-44950 E7-15213 Postal Postal Regulatory Commission NOTICES Practice and procedure: Premium Forwarding Service; status change from experimental to permanent, 44880-44881 E7-15529 Presidential Presidential Documents PROCLAMATIONS *Special observances:* Women's Equality Day (Proc. 8164), 44723-44724 07-3918 Rural Rural Housing Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 44820 E7-15520 SEC Securities and Exchange Commission RULES Securities:
Significant deficiency; definition, 44924-44927 E7-15556 Securities and investment advisers: Pooled investment vehicles, investor protections; prohibition of fraud by advisors, 44756-44763 E7-15531 NOTICES Investment Company Act of 1940: Sentinel Variable Products Trust et al., 44881-44890 E7-15550 Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC, 44890-44891 E7-15541 Boston Stock Exchange, Inc., 44891-44892 E7-15545 Chicago Board Options Exchange, Inc., 44892-44899 E7-15543 E7-15544 E7-15547 Financial Industry Regulatory Authority, Inc., 44899-44902 E7-15551 Fixed Income Clearing Corp., 44902-44903 E7-15542 International Securities Exchange, LLC, 44903-44904 E7-15549 New York Stock Exchange LLC, 44904-44906 E7-15546 NYSE Arca, Inc., 44906-44907 E7-15552 Philadelphia Stock Exchange, Inc., 44907 E7-15548 Social Social Security Administration RULES Social security benefits and supplemental security income:
Federal old age, survivors, and disability insurance and aged, blind, and disabled— Attorney Advisory program; amendment, 44763-44765 E7-15422 Social security benefits and supplementary security income: Federal old age, survivors, and disability insurance and aged, blind, and disabled— Attorney Fee Payment System extended, eligible non-attorney representatives fee withholding and payment procedures, and past-due benefits definition, 44765-44768 E7-15242 State State Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 44908 E7-15574 Environmental statements; availability, etc.:
TransCanada Keystone Pipeline Project, LLC, 44908-44910 07-3872 Surface Surface Transportation Board NOTICES Railroad services abandonment: Norfolk Southern Railway Co., 44920 E7-15346 TVA Tennessee Valley Authority NOTICES Reports and guidance documents; availability, etc.: Public Utility Regulatory Policies Act (PURPA) standards in Energy Policy Act of 2005; determinations, 44910-44913 E7-15563 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Motor Carrier Safety Administration See Federal Railroad Administration See Maritime Administration See Pipeline and Hazardous Materials Safety Administration See Surface Transportation Board Treasury Treasury Department See Comptroller of the Currency RULES Currency and foreign transactions; financial reporting and recordkeeping requirements:
USA PATRIOT Act; implementation— Anti-money laundering programs; special due diligence programs for foreign accounts, 44768-44775 E7-15467 Separate Parts In This Issue Part II Securities and Exchange Commission, 44924-44927 E7-15556 Part III Transportation Department, Pipeline and Hazardous Materials Safety Administration, 44930-44950 E7-15213 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 72 153 Thursday, August 9, 2007 Rules and Regulations DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Parts 916 and 917 [Docket No. AMS-FV-07-0053; FV07-916/917-5 FR] Nectarines and Peaches Grown in California;
Decreased Assessment Rates AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This rule decreases the assessment rates established for the Nectarine Administrative Committee and the Peach Commodity Committee (committees) for the 2007-08 and subsequent fiscal periods from $0.21 to $0.06 per 25-pound container or container equivalent of nectarines and peaches handled. The committees locally administer the marketing orders that regulate the handling of nectarines and peaches grown in California.
Assessments upon nectarine and peach handlers are used by the committees to fund reasonable and necessary expenses of the programs. The fiscal period runs from March 1 through the last day of February. The assessment rates will remain in effect indefinitely unless modified, suspended, or terminated. DATES: Effective August 10, 2007. FOR FURTHER INFORMATION CONTACT: Jennifer Garcia, Marketing Specialist, or Kurt Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA;
Telephone:(559) 487-5901, Fax:
(559)487-5906; or E-mail: *Jennifer.Garcia3@usda.gov* or *Kurt.Kimmel@usda.gov.* Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone:
(202)720-2491, Fax:
(202)720-8938, or E-mail: *Jay.Guerber@usda.gov.* SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing Order Nos. 916 and 917, both as amended (7 CFR parts 916 and 917), regulating the handling of nectarines and peaches grown in California, respectively, hereinafter referred to as the “orders.” The orders are effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Department of Agriculture
(USDA)is issuing this rule in conformance with Executive Order 12866. This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing orders now in effect, California nectarine and peach handlers are subject to assessments. Funds to administer the orders are derived from such assessments. It is intended that the assessment rates will be applicable to all assessable nectarines and peaches beginning on March 1, 2007, and continue until amended, suspended, or terminated. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. This rule decreases the assessment rates established for the Nectarine Administrative Committee
(NAC)and the Peach Commodity Committee
(PCC)for the 2007-08 and subsequent fiscal periods from $0.21 to $0.06 per 25-pound container or container equivalent of nectarines and peaches handled. The nectarine and peach marketing orders provide authority for the committees, with the approval of USDA, to formulate annual budgets of expenses and collect assessments from handlers to administer the programs. The members of NAC and PCC are producers of California nectarines and peaches, respectively. They are familiar with the committees' needs, and with the costs for goods and services in their local area and are, therefore, in a position to formulate appropriate budgets and assessment rates. The assessment rates are formulated and discussed in public meetings. Thus, all directly affected persons have an opportunity to participate and provide input. NAC Assessment and Expenses For the 2006-07 fiscal period, the NAC recommended, and USDA approved, an assessment rate of $0.21 per 25-pound container or container equivalent of nectarines that will continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committee or other information available to USDA. The NAC met on May 1, 2007, and unanimously recommended 2007-08 expenditures of $1,446,654 and an assessment rate of $0.06 per 25-pound container or container equivalent of nectarines. In comparison, the budgeted expenditures for the 2006-07 fiscal period were $4,473,764. The assessment rate of $0.06 per 25-pound container or container equivalent of nectarines is $0.15 lower than the rate currently in effect. Combining expected assessment revenue of $1,140,000 with the $322,051 carryover available from the 2006-07 fiscal period and other income, such as interest and research grants, should be adequate to meet committee needs. The assessment rate is also likely to provide a $127,133 reserve, which may be used to cover administrative expenses prior to the beginning of the 2008-09 shipping season as provided in the order (§ 916.42). Funds in the reserve will be kept within the maximum permitted by the order, approximately one year's expenses. The NAC recommended a substantially reduced 2007-08 fiscal period budget and assessment rate because promotional activities, as well as portions of the committee's administrative and inspection programs, have been discontinued. A new California State marketing program that will conduct such activities has been implemented. An interim final rule discussing the implementation of this marketing program was published on April 16, 2007, in the **Federal Register** at 72 FR 18847. Expenditures recommended by the NAC for the 2007-08 fiscal period include $262,444 for administration, $37,476 for inspection and compliance, $196,147 for production research, and $950,587 for consumer and category research. Budgeted expenses for these items in 2006-07 were $567,856 for administration; $1,070,832 for inspection; $201,702 for production research; and $2,633,374 for promotions, which included consumer and category research. The NAC 2007-08 fiscal period assessment rate was derived after considering anticipated fiscal year expenses; estimated assessable nectarines of 19,000,000 25-pound containers or container equivalents; the estimated income from other sources, such as interest; and the need for an adequate financial reserve to carry the NAC into the 2008-09 fiscal period. Therefore, the NAC recommended an assessment rate of $0.06 per 25-pound container or container equivalent. PCC Assessment and Expenses For the 2006-07 fiscal period, the PCC recommended, and USDA approved, an assessment rate of $0.21 per 25-pound container or container equivalent of peaches that will continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committee or other information available to USDA. The PCC met on May 1, 2007, and recommended 2007-08 expenditures of $1,486,971 and an assessment rate of $0.06 per 25-pound container or container equivalent of peaches. In comparison, budgeted expenditures for the 2006-07 fiscal period were $4,988,914. The assessment rate of $0.06 per 25-pound container or container equivalent of peaches is $0.15 lower than the rate currently in effect. Combining expected assessment revenues of $1,200,000 with the $420,386 carryover available from the 2006-07 fiscal period and other income such as interest and research grants should be adequate to meet committee needs. The assessment rate is also likely to provide a $188,222 reserve, which may be used to cover administrative expenses prior to the beginning of the 2008-09 shipping season as provided in the order (§ 917.38). Funds in the reserve will be kept within the maximum permitted by the order, approximately one year's expenses. The PCC recommended a substantially reduced 2007-08 fiscal period budget and assessment rate because promotional activities, as well as portions of the committee's administrative and inspection programs, have been discontinued. A new California State marketing program that will conduct such activities has been implemented. An interim final rule discussing the implementation of this marketing program was published on April 16, 2007, in the **Federal Register** at 72 FR 18847. Expenditures recommended by the PCC for the 2007-08 fiscal period include $267,025 for administration, $87,693 for inspection and compliance, $196,149 for production research, and $936,104 for consumer and category research. Budgeted expenses for these items in 2006-07 were $936,104 for administration; $1,299,211 for inspection; $210,718 for production research; and $2,849,961 for promotions, which included consumer and category research. The PCC 2007-08 fiscal period assessment rate was derived after considering anticipated fiscal year expenses; estimated assessable peaches of 20,000,000 25-pound containers or container equivalents; the estimated income from other sources, such as interest; and the need for an adequate financial reserve to carry the PCC into the 2008-09 fiscal period. Therefore, the PCC recommended an assessment rate of $0.06 per 25-pound container or container equivalent. The assessment rates established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the committees or other available information. Although these assessment rates will be in effect for an indefinite period, the committees will continue to meet prior to or during each fiscal period to recommend budgets of expenses and consider recommendations for modification of the assessment rates. The dates and times of committee meetings are available from the committees' Web site at *http://www.eatcaliforniafruit.com* or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate the committees' recommendations and other available information to determine whether modification of the assessment rate for each committee is needed. Further rulemaking will be undertaken as necessary. The committees' 2007-08 fiscal period budgets and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by USDA. Final Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service
(AMS)has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. There are approximately 676 producers of nectarines and peaches in the production area and approximately 175 handlers subject to regulation under the orders. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $6,500,000. According to the committees' staff, approximately 85 percent of all the handlers within the industry may be classified as small entities. For the 2006 marketing season, staff estimated that the average handler price received was $9.00 per container or container equivalent of nectarines or peaches. A handler would have to ship at least 722,223 containers to have annual receipts of $6,500,000. Also, the committees' staff has estimated that more than 90 percent of all the producers in the industry may be classified as small entities. For the 2006 marketing season, staff estimated the average producer price received was $4.50 per container or container equivalent for nectarines and peaches. A producer would have to produce at least 166,667 containers of nectarines and peaches to have annual receipts of $750,000. With an average producer price of $4.50 per container or container equivalent, and a combined packout of nectarines and peaches of 36,388,996 containers, the value of the 2006 packout is estimated to be $163,750,482. Dividing this total estimated grower revenue figure by the estimated number of producers
(676)yields an estimate of average revenue per producer of about $242,234 from the sales of peaches and nectarines. This rule decreases the assessment rates established for NAC and PCC for the 2007-08 and subsequent fiscal periods from $0.21 to $0.06 per 25-pound container or container equivalent of nectarines or peaches. The NAC recommended 2007-08 fiscal period expenditures of $1,446,654 for nectarines and an assessment rate of $0.06 per 25-pound container or container equivalent of nectarines. The PCC recommended 2007-08 fiscal period expenditures of $1,486,971 for peaches and an assessment rate of $0.06 per 25-pound container or container equivalent of peaches. The assessment rates of $0.06 are $0.15 lower than the rates currently in effect. Analysis of NAC Budget The quantity of assessable nectarines for the 2007-08 fiscal period is estimated at 19,000,000 25-pound containers or container equivalents. Thus, the $0.06 rate should provide $1,140,000 in assessment income. The major expenditures recommended by the NAC for the 2007-08 year include $262,444 for administration; $37,476 for inspection and compliance; $196,147 for production research; and $950,587 for consumer and category research, which were previously included in the promotions budget. Budgeted expenses for these items in 2006-07 were $567,856, $1,070,832, $201,702, and $2,633,374, respectively. The NAC recommended a decrease in the assessment rate to meet anticipated 2007-08 expenses and provide a financial reserve of $127,133, which is needed to fund expenses for the following year until assessments for that year are received. Analysis of PCC Budget The quantity of assessable peaches for the 2007-08 fiscal year is estimated at 20,000,000 25-pound containers or container equivalents. Thus, the $0.06 rate should provide $1,200,000 in assessment income. The major expenditures recommended by PCC for the 2007-08 year include $267,025 for administration; $87,693 for inspection and compliance; $196,149 for production research; and $936,104 for consumer and category research, which were previously included in the promotions budget. Budgeted expenses for these items in 2006-07 were $629,024, $1,299,211, $210,718, and $2,849,961, respectively. The PCC recommended a decrease in the assessment rate to meet anticipated 2007-08 fiscal period expenses and provide a financial reserve of $188,222, which is needed to fund expenses for the following year until assessments for that year are received. Considerations in Determining Expenses and Assessment Rates Prior to arriving at these budgets, the committees considered information and recommendations from various sources, including, but not limited to: their Executive Committee, their Research Subcommittee, their International Programs Subcommittee, their Domestic Promotion Subcommittee, and the Nectarine and Peach Estimating Committees. Because fewer programs will be conducted under the Federal orders during this fiscal year compared to previous years, the committees decided the assessment rates should be reduced to prevent the accumulation of reserves beyond the levels allowed under the orders. Therefore, they recommended decreasing the assessment rates to $0.06 per 25-pound container or container equivalent. This will allow them to meet their 2007-08 fiscal period expenses and carry over necessary reserves to finance operations before 2008-09 fiscal period assessments are collected. A review of historical and preliminary information pertaining to the upcoming fiscal period indicates that the grower price for nectarines and peaches for the 2007-08 season could range between $6.00 and $8.00 per 25-pound container or container equivalent. Therefore, the estimated assessment revenue for the 2007-08 fiscal period as a percentage of total grower revenue could range between .75 and 1 percent. This action decreases the assessment obligation imposed on handlers. Assessments are applied uniformly on all handlers, and some of the costs may be passed on to producers. However, decreasing the assessment rate will reduce the burden on handlers, and may reduce the burden on producers. In addition, the committees' meetings were widely publicized throughout the California nectarine and peach industries and all interested persons were invited to attend the meetings and were encouraged to participate in the committees' deliberations on all issues. Like all committee meetings, the May 1, 2007, meetings were public meetings and entities of all sizes were able to express views on this issue. This rule imposes no additional reporting or recordkeeping requirements on either small or large handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. The AMS is committed to complying 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. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. A proposed rule concerning this action was published in the **Federal Register** on June 20, 2007 (72 FR 33919). Copies of the proposed rule were distributed via the committees' Web site. In addition, the rule was made available through the Internet by USDA and the Office of the Federal Register. A 10-day comment period which ended July 2, 2007, was provided for interested persons to respond to the proposal. One comment supporting the proposal was received. A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: *http://www.ams.usda.gov/fv/moab.html.* Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section. After consideration of all relevant material presented, including the information and recommendation submitted by the committees and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the act. Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the **Federal Register** because:
(1)The 2007-08 fiscal period began on March 1, 2007, and the marketing orders require that the rates of assessment for each fiscal period apply to all assessable nectarines and peaches handled during such fiscal period;
(2)this rule decreases the assessment rates for assessable nectarines and peaches beginning with the 2007-08 fiscal period; and
(3)handlers are aware of this action, which was discussed by the committees at public meetings and recommended at their meetings on May 1, 2007, and is similar to other assessment rate actions issued in past years. Also, a 10-day comment period was provided for in the proposed rule. List of Subjects 7 CFR Part 916 Marketing agreements, Nectarines, Reporting and recordkeeping requirements. 7 CFR Part 917 Marketing agreements, Peaches, Pears, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, 7 CFR parts 916 and 917 are amended as follows: 1. The authority citation for 7 CFR parts 916 and 917 continues to read as follows: Authority: 7 U.S.C. 601-674. PART 916—NECTARINES GROWN IN CALIFORNIA 2. Section 916.234 is revised to read as follows: § 916.234 Assessment rate. On and after March 1, 2007, an assessment rate of $0.06 per 25-pound container or container equivalent of nectarines is established for California nectarines. PART 917—FRESH PEARS AND PEACHES GROWN IN CALIFORNIA 3. Section 917.258 is revised to read as follows: § 917.258 Assessment rate. On and after March 1, 2007, an assessment rate of $0.06 per 25-pound container or container equivalent of peaches is established for California peaches. Dated: August 2, 2007. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E7-15393 Filed 8-8-07; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28015; Directorate Identifier 2006-NM-210-AD; Amendment 39-15147; AD 2007-16-08] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive (AD), which applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR series airplanes. That AD currently requires repetitive inspections for cracking of the station 800 frame assembly, and repair if necessary. This new AD revises certain applicabilities and compliance times in the existing AD. This AD results from several reports of cracks of the station 800 frame assembly on airplanes that had accumulated fewer total flight cycles than the initial inspection threshold in the original AD. We are issuing this AD to detect and correct fatigue cracks that could extend and fully sever the frame, which could result in development of skin cracks that could lead to rapid depressurization of the airplane. DATES: This AD becomes effective September 13, 2007. On July 17, 2006 (71 FR 33595, June 12, 2006), the Director of the Federal Register approved the incorporation by reference of Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005. On August 30, 2001 (66 FR 38891, July 26, 2001), the Director of the Federal Register approved the incorporation by reference of Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)917-6437; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: 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. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that supersedes AD 2006-12-12, amendment 39-14638 (71 FR 33595, June 12, 2006). The existing AD applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR series airplanes. That NPRM was published in the **Federal Register** on April 26, 2007 (72 FR 20782). That NPRM proposed to continue to require repetitive inspections for cracking of the station 800 frame assembly, and repair if necessary. That NPRM also proposed to revise certain applicabilities and compliance times in the existing AD. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the single comment that has been received on the NPRM. The commenter, Boeing, supports the NPRM. Clarification of Alternative Method of Compliance
(AMOC)Paragraph We have revised this action to clarify the appropriate procedure for notifying the principal inspector before using any approved AMOC on any airplane to which the AMOC applies. Conclusion We have carefully reviewed the available data, including the comment that has been received, and determined that air safety and the public interest require adopting the AD with the change described previously. We have determined that this change will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance There are about 900 airplanes of the affected design in the worldwide fleet. This AD affects about 156 airplanes of U.S. registry. The repetitive inspections take between 12 and 14 work hours per airplane, depending on the airplane configuration. The average labor rate is $80 per work hour. Based on these figures, the estimated cost of the currently required actions is between $149,760 and $174,720, or between $960 and $1,120 per airplane, per inspection cycle. The repetitive inspections of the expanded area take between 18 and 20 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the new actions specified in this AD for U.S. operators is between $224,640 and $249,600, or between $1,440 and $1,600 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)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 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, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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 removing amendment 39-14638 (71 FR 33595, June 12, 2006) and by adding the following new airworthiness directive (AD): **2007-16-08 Boeing:** Amendment 39-15147. Docket No. FAA-2007-28015; Directorate Identifier 2006-NM-210-AD. Effective Date
(a)This AD becomes effective September 13, 2007. Affected ADs
(b)This AD supersedes AD 2006-12-12. Applicability
(c)This AD applies to all Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-300, 747-400, 747-400D, and 747SR series airplanes, certificated in any category. Unsafe Condition
(d)This AD results from several reports of cracks of the station 800 frame assembly on airplanes that had accumulated fewer total flight cycles than the initial inspection threshold in the original AD. We are issuing this AD to detect and correct fatigue cracks that could extend and fully sever the frame, which could result in development of skin cracks that could lead to rapid depressurization of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Requirements of AD 2006-12-12 With Revised Appicabilities and Thresholds Repetitive Inspections
(f)For Boeing Model 747-100, 747-100B, 747-200B, 747-200C, and 747SR series airplanes, as identified in Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000: Do detailed, surface high-frequency eddy current (HFEC), and open-hole HFEC inspections, as applicable, for cracking of the station 800 frame assembly (including the inner chord strap, angles, and exposed web) between stringers 14 and 18, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000; or Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005; after the effective date of this AD, only Revision 1 of the service bulletin may be used. Except as provided by paragraph
(g)of this AD, do the inspection at the applicable time specified in Table 1 or Table 2 of this AD, as applicable, and repeat the inspections thereafter at intervals not to exceed 3,000 flight cycles until the initial inspections required by paragraph
(h)of this AD are accomplished. Table 1.—Compliance Times for Boeing Model 747-100, 747-100B, 747-200B, and 747-200C Series Airplanes Total flight cycles as of August 30, 2001 (the effective date of AD 2001-14-22, amendment 39-12333, which was superseded by AD 2006-12-12) Do the inspection in paragraph
(f)of this AD at this time
(1)Fewer than 19,000 Before the accumulation of 19,000 total flight cycles, or within 1,500 flight cycles after August 30, 2001, whichever comes later.
(2)19,000 or more, but 24,250 or fewer Within 1,500 flight cycles or 12 months after August 30, 2001, whichever comes first.
(3)24,251 or more Within 750 flight cycles or 12 months after August 30, 2001, whichever comes first. Table 2.—Compliance Times for Boeing Model 747SR Series Airplanes Total flight cycles as of the effective date of this AD Do the inspection in paragraph
(f)of this AD at this time
(4)Fewer than 19,000 Before the accumulation of 19,000 total flight cycles, or within 1,500 flight cycles after the effective date of this AD, whichever comes later.
(5)19,000 or more, but 24,250 or fewer Within 1,500 flight cycles or 12 months after the effective date of this AD, whichever comes first.
(6)24,251 or more Within 750 flight cycles or 12 months after the effective date of this AD, whichever comes first. Adjustments to Compliance Time: Cabin Differential Pressure
(g)For Boeing Model 747-100, 747-100B, 747-200B, and 747-200C series airplanes, as identified in Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000, that were inspected before July 17, 2006 (the effective date of AD 2006-12-12); and for Boeing Model 747SR airplanes, as identified in Boeing Alert Service Bulletin 747-53A2451, that were inspected before the effective date of this AD: Except as provided by paragraph
(i)of this AD, for the purposes of calculating the compliance threshold and repetitive interval for the actions required by paragraph
(f)of this AD, the number of flight cycles in which cabin differential pressure is at 2.0 pounds per square inch
(psi)or less need not be counted when determining the number of flight cycles that have occurred on the airplane, provided that the flight cycles with momentary spikes in cabin differential pressure above 2.0 psi are included as full pressure cycles. For this provision to apply, all cabin pressure records must be maintained for each airplane: No fleet-averaging of cabin pressure is allowed. Repetitive Inspections of Expanded Area at a New Reduced Threshold
(h)For all airplanes, at the applicable time specified in Table 3 of this AD, except as provided by paragraph
(i)of this AD, do the following inspections of the station 800 frame assembly in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005: A detailed inspection for cracking of the inner chord strap, angles, and exposed web adjacent to the inner chords on the station 800 frame between stringer 14 and stringer 18; and surface HFEC and open-hole HFEC inspections for cracking of the inner chord strap and angles. Do the initial inspections at the applicable time specified in Table 3 of this AD, and repeat the inspections thereafter at intervals not to exceed 3,000 flight cycles. Accomplishing the initial inspections required by this paragraph terminates the inspection requirements of paragraph
(f)of this AD. Table 3.—Revised Compliance Times Total flight cycles as of July 17, 2006— Do the inspections in paragraph
(h)of this AD at this time—
(1)Fewer than 16,000 Before the accumulation of 16,000 total flight cycles, or within 1,500 flight cycles after July 17, 2006, whichever comes later.
(2)16,000 or more, but 21,250 or fewer Within 1,500 flight cycles after July 17, 2006, or within 1,000 flight cycles after the effective date of this AD, whichever comes later.
(3)21,251 or more Within 750 flight cycles after July 17, 2006, or within 500 flight cycles after the effective date of this AD, whichever comes later. Adjustments to Compliance Time: Cabin Differential Pressure
(i)For the purposes of calculating the compliance threshold and repetitive interval for actions required by paragraphs
(f)and
(h)of this AD, for Boeing Model 747-100, 747-100B, 747-200B, and 747-200C series airplanes, on or after July 17, 2006; and for Boeing Model 747SR series airplanes, on or after the effective date of this AD: All flight cycles, including the number of flight cycles in which cabin differential pressure is at 2.0 psi or less, must be counted when determining the number of flight cycles that have occurred on the airplane. However, for airplanes on which the repetitive interval for the actions required by paragraph
(f)of this AD have been calculated in accordance with paragraph
(g)of this AD by excluding the number of flight cycles in which cabin differential pressure is at 2.0 pounds psi or less: Continue to adjust the repetitive inspection interval in accordance with paragraph
(g)of this AD until the initial inspections required by paragraph
(h)of this AD are accomplished. Thereafter, no adjustment to compliance times based on paragraph
(g)of this AD is allowed. Repair
(j)If any cracking is detected during any inspection required by paragraph
(f)or
(h)of this AD, and the service bulletin specifies to contact Boeing for appropriate action: Before further flight, repair using a method approved in accordance with the procedures specified in paragraph
(l)of this AD. No Report Required
(k)Although the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000; and Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005; describe procedures for reporting certain information to the manufacturer, this AD does not require that report. Alternative Methods of Compliance (AMOCs) (l)(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.
(4)AMOCs approved previously in accordance with AD 2001-14-22, are approved as AMOCs for the corresponding provisions of paragraphs
(f)and
(j)of this AD.
(5)AMOCS approved previously in accordance with AD 2006-12-12, are approved as alternative methods of compliance with this AD. Material Incorporated by Reference
(m)You must use Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000; or Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005; as applicable, to perform the actions that are required by this AD, unless the AD specifies otherwise.
(1)On July 17, 2006 (71 FR 33595, June 12, 2006), the Director of the Federal Register approved the incorporation by reference of Boeing Alert Service Bulletin 747-53A2451, Revision 1, dated November 10, 2005.
(2)On August 30, 2001 (66 FR 38891, July 26, 2001), the Director of the Federal Register approved the incorporation by reference of Boeing Alert Service Bulletin 747-53A2451, including Appendix A, dated October 5, 2000.
(3)Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15416 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-27741; Directorate Identifier 2006-NM-261-AD; Amendment 39-15141; AD 2007-16-02] RIN 2120-AA64 Airworthiness Directives; Airbus Model A330-201, -202, -203, -223, -243, -301, -321, -322, -323, -341, -342, and -343 Airplanes; and Model A340-200 and -300 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive
(AD)for the products listed above. This AD results from mandatory continuing airworthiness information
(MCAI)issued by an airworthiness authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as keel beam rupture, which affects the structural integrity of the area. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective September 13, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of September 13, 2007. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. FOR FURTHER INFORMATION CONTACT: Tim Backman, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)227-2797; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Discussion 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 allow 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 AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. We issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on March 30, 2007 (72 FR 15067). That NPRM proposed to require a repetitive special detailed inspection on the horizontal flange of the keel beam in the area of the first fastener hole aft of FR (frame) 40, follow-up actions (further inspections, installation of new fasteners, and sealing the fasteners), and repair if necessary. The MCAI states that during the A330 and A340 aircraft fatigue test, cracks appeared on the right and left sides between the crossing area of the keel beam fitting and the front spar on the center wing box (CWB). This situation if not corrected can lead in the worst case to keel beam rupture, which affects the structural integrity of the area. Comments We gave the public the opportunity to participate in developing this AD. We considered the comment received. Request To Refer to Revised MCAI Airbus requests we refer to European Aviation Safety Agency
(EASA)Airworthiness Directive 2006-0315 R1, dated October 26, 2006, in the AD. (We referred to EASA Airworthiness Directive 2006-0315, dated October 13, 2006, in the NPRM.) Airbus notes that Revision 1 of the EASA airworthiness directive adds an optional terminating action for the repetitive inspections. We agree with Airbus, and have revised this AD to refer to Revision 1 of the EASA Airworthiness Directive. Revision 1 refers to the following Airbus Service Bulletins as the appropriate sources of service information for doing the optional terminating action: A330-57-3090, dated March 27, 2006; and A340-57-4098, dated March 27, 2006. The modification can be done only on airplanes without Airbus Modification 41652. The optional terminating action is a modification that involves disconnecting one or more fasteners from the keel beam/bottom skin panel junction, removing two adjacent fasteners in order to perform cold working, and installing interference fit fasteners. The modification also involves inspections and repairing any cracking detected during the modification; in some instances the repair for cracking or for any bushing that has a diameter beyond certain limits specified in the service bulletin is contacting Airbus for repair instructions. We have added paragraph (e)(6) to this AD, and revised paragraph
(d)of this AD to include the optional terminating action. We have revised paragraph
(g)of this AD to refer to Revision 1 of the MCAI. Explanation of Change to Paragraph (c)(3) “Applicability” When we issued the NPRM we noted in paragraph (c)(3) that we were considering rulemaking regarding EASA airworthiness directive 2006-0314. EASA airworthiness directive 2006-0314 applies to Model A340-200 and -300 series airplanes repaired in accordance with certain Airbus repair drawings, and paragraph (c)(3) of the NPRM notes that those airplanes are not affected by the current action. We have since issued AD 2007-12-08, amendment 39-15086 (72 FR 31171, June 6, 2007), which is the parallel FAA AD to EASA airworthiness directive 2006-0314. We have changed paragraph (c)(3) of this AD to refer to AD 2007-12-08. Conclusion We reviewed the available data, including the comment received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We determined that these changes will not increase the economic burden on any operator or increase the scope of the AD. 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 a U.S. court of law. 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 required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are described in a separate paragraph of the AD. These requirements, if any, take precedence over the actions copied from the MCAI. Costs of Compliance We estimate that this AD will affect about 9 products of U.S. registry. We also estimate that it will take about 12 work-hours per product to comply with this AD. The average labor rate is $80 per work-hour. Required parts will cost about $382 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these parts. 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 this AD to the U.S. operators to be $12,078, or $1,342 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)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 AD and placed it in the AD Docket. 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 the NPRM, 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. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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: **2007-16-02** **Airbus:** Amendment 39-15141. Docket No. FAA-2007-27741; Directorate Identifier 2006-NM-261-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective September 13, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to the airplanes identified in paragraphs (c)(1) and (c)(2) of this AD; certificated in any category; except as provided by paragraph (c)(3) of this AD.
(1)Airbus Model A330-201, -202, -203, -223, -243, -301, -321, -322, -323, -341, -342, and -343 airplanes, all serial numbers, except those on which Airbus modification 49202 has been embodied in production, or Airbus Service Bulletin A330-57-3090 has been embodied in service.
(2)Airbus Model A340-200 and -300 series airplanes, all certified models, all serial numbers, except those on which Airbus modification 49202 has been embodied in production or Airbus Service Bulletin A340-57-4098 has been embodied in service.
(3)This AD does not apply to Model A340-200 and -300 series airplanes repaired in accordance with Airbus Repair Drawing R57115053, R57115051, or R57115047 (installation of titanium doubler). These airplanes are covered by European Aviation Safety Agency
(EASA)airworthiness directive 2006-0314, dated October 13, 2006. On May 25, 2007, we issued AD 2007-12-08, amendment 39-15086 (72 FR 31171, June 6, 2007), which is the parallel FAA AD to EASA airworthiness directive 2006-0314. Reason
(d)The mandatory continuing airworthiness information
(MCAI)states that during the A330 and A340 aircraft fatigue test, cracks appeared on the right and left sides between the crossing area of the keel beam fitting and the front spar on the center wing box (CWB). This situation if not corrected can lead in the worst case to keel beam rupture which affects the structural integrity of the area. In order to maintain the structural integrity of the aircraft, the MCAI requires a repetitive special detailed inspection on the horizontal flange of the keel beam in the area of the first fastener hole aft of FR (frame) 40, follow-up actions, and repair if necessary. The MCAI also includes an optional terminating action for the repetitive inspections. Actions and Compliance
(e)Unless already done, do the following actions.
(1)Within the mandatory threshold (flight cycles or flight hours) mentioned in the paragraph 1.E.(2) of Airbus Service Bulletin A340-57-4089, Revision 02; or A330-57-3081, Revision 02; both dated January 24, 2006, depending on the configuration of the aircraft model; or within 3 months after the effective date of this AD; whichever occurs later: Carry out the NDT (non-destructive test) inspection of the hole(s) of the horizontal flange of the keel beam located on FR 40 datum on RH (right-hand) and/or LH (left-hand) side of the fuselage, in accordance with the instructions of Airbus Service Bulletin A340-57-4089, Revision 02; or A330-57-3081, Revision 02; as applicable. Inspection in accordance with Airbus A330/A340 Technical Disposition F57D03012810, Issue B, dated August 18, 2003; or 582.0651/2002, Issue A, dated October 17, 2002; satisfies the inspection requirements for the first rotating probe inspection which is specified at the inspection threshold of this AD. Note 1: In order to prevent large repairs or heavy maintenance, Airbus recommends to perform the above inspection according to recommended thresholds mentioned in paragraph 1.E.(2) of Airbus Service Bulletin A340-57-4089, Revision 02; or Airbus Service Bulletin A330-57-3081, Revision 02; both dated January 24, 2006.
(2)In case of any crack finding, before further flight, contact Airbus in order to get repair instructions before next flight, and repair before further flight.
(3)Should no crack be detected:
(i)Before further flight: Follow up the actions indicated in the flow charts, figure 7, 8, or 9, of Airbus Service Bulletin A340-57-4089, including Appendix 01, Revision 02, dated January 24, 2006; or figure 5, 6, or 7, of Airbus Service Bulletin A330-57-3081, including Appendix 01, Revision 02, dated January 24, 2006; in accordance with the instructions of the applicable service bulletin.
(ii)Within 30 days after the effective date of this AD, or within 30 days after doing the inspection required by paragraph (e)(1) of this AD, whichever occurs later: Send the report of actions carried out in paragraph (e)(3)(i) of this AD to Airbus.
(iii)Renew the inspection at mandatory intervals given in paragraph 1.E.(2) of Airbus Service Bulletin A340-57-4089, Revision 02, dated January 24, 2006; or Airbus Service Bulletin A330-57-3081, Revision 02, dated January 24, 2006; as applicable; in accordance with the instructions of Service Bulletin A340-57-4089, Revision 02, or Service Bulletin A330-57-3081, Revision 02; as applicable, and send the inspection results to Airbus. Note 2: In order to prevent large repairs or heavy maintenance, Airbus recommends to perform the above repetitive inspection according to recommended intervals mentioned in paragraph 1.E.(2) of Airbus Service Bulletin A340-57-4089, Revision 02, dated January 24, 2006; or Airbus Service Bulletin A330-57-3081, Revision 02, dated January 24, 2006.
(4)Upon detection of a crack during a repetitive inspection, before further flight, contact Airbus to get repair instructions, and repair before further flight.
(5)No additional work is required for aircraft inspected in accordance with the instructions of Airbus Service Bulletin A330-57-3081, dated October 30, 2003, or Revision 01, dated May 18, 2004; or Airbus Service Bulletin A340-57-4089, dated October 30, 2003, or Revision 01, dated March 2, 2004. Nevertheless, the operators must check that their inspection program is in accordance with paragraph 1.E.(2) of Airbus Service Bulletin A340-57-4089, Revision 02, dated January 24, 2006; or Airbus Service Bulletin A330-57-3081, Revision 02, dated January 24, 2006; as applicable; for the repetitive inspection.
(6)For aircraft on which Airbus Modification 41652 is not embodied: When the aircraft has been modified in accordance with Airbus Service Bulletin A330-57-3090, dated March 27, 2006; or Airbus Service Bulletin A340-57-4098, dated March 27, 2006; as applicable; the repetitive inspections required by this AD are cancelled. In case of any crack finding during the modification: Where the applicable service bulletin specifies to contact Airbus, before further flight, contact Airbus to get repair instructions, and repair. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows. The MCAI did not have a required action if cracks are found during a repetitive inspection. This AD requires contacting Airbus for repair instructions and repairing before further flight. Other FAA AD Provisions
(f)The following provisions also apply to this AD:
(1)Alternative Methods of Compliance (AMOCs): The Manager, ANM-116, Transport Airplane Directorate, 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: Tim Backman, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington 98057-3356. 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
(g)Refer to MCAI EASA Airworthiness Directive 2006-0315 R1, dated October 26, 2006, and the service information listed in Table 1 of this AD, for related information. Table 1.—Related Service Information Airbus Service Bulletin Revision level Date A330-57-3081 02 January 24, 2006. A330-57-3090 Original March 27, 2006. A340-57-4089 02 January 24, 2006. A340-57-4098 Original March 27, 2006. Material Incorporated by Reference
(h)You must use the applicable service information specified in Table 2 of this AD to do the actions required by this AD, unless the AD specifies otherwise. If you accomplish the optional terminating modification specified in this AD, you must use the applicable service information specified in Table 3 of this AD. Table 2.—Required Material Incorporated by Reference Airbus Service Bulletin Revision Date A330-57-3081, including Appendix 01 02 January 24, 2006. A340-57-4089, including Appendix 01 02 January 24, 2006. Table 3.—Optional Material Incorporated by Reference Airbus Service Bulletin Date A330-57-3090 March 27, 2006. A340-57-4098 March 27, 2006.
(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.
(2)For service information identified in this AD, contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France.
(3)You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Renton, Washington, on July 24, 2007. Stephen P. Boyd, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-14866 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28094; Directorate Identifier 2006-NM-258-AD; Amendment 39-15148; AD 2007-16-09] RIN 2120-AA64 Airworthiness Directives; Empresa Brasileira de Aeronautica S.A. (EMBRAER) Model ERJ 170 Airplanes and Model ERJ 190 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is superseding an existing airworthiness directive (AD), which applies to all EMBRAER Model ERJ 170-100 LR, -100 STD, -100 SE, and -100 SU airplanes. That AD currently requires repetitively replacing the low-stage check valve and associated seals of the right-hand engine bleed system. This new AD adds new airplanes to that existing requirement. For all airplanes, this AD also requires repetitively replacing the low-stage check valve and associated seals of the left-hand engine bleed system with a new check valve and new seals. This AD results from a report that an engine shut down during flight due to the failure of the low-stage check valve to close. We are issuing this AD to prevent failure of the low-stage check valve, which could result in an engine shutting down during flight. DATES: This AD becomes effective September 13, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of September 13, 2007. On November 29, 2005 (70 FR 69075, November 14, 2005), the Director of the Federal Register approved the incorporation by reference of a certain service bulletin. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. Contact Empresa Brasileira de Aeronautica S.A. (EMBRAER), P.O. Box 343-CEP 12.225, Sao Jose dos Campos—SP, Brazil, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Todd Thompson, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-1175; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: 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. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that supersedes AD 2005-23-14, amendment 39-14372 (70 FR 69075, November 14, 2005). The existing AD applies to all EMBRAER Model ERJ 170-100 LR, -100 STD, -100 SE, and -100 SU airplanes. That NPRM was published in the **Federal Register** on May 8, 2007 (72 FR 26008). That NPRM proposed to continue to require repetitively replacing the low-stage check valve and associated seals of the right-hand
(RH)engine bleed system. That NPRM also proposed to add new airplanes to that existing requirement. For all airplanes, that NPRM also proposed to require repetitively replacing the low-stage check valve and associated seals of the left-hand
(LH)engine bleed system with a new check valve and new seals. Comments We provided the public the opportunity to participate in the development of this AD. No comments have been received on the NPRM or on the determination of the cost to the public. Changes to This AD We have reviewed Revision 01 of EMBRAER Service Bulletin 190-36-0004, dated November 14, 2006, and have determined that the accomplishment instructions of Revision 01 are the same as those in the original issue of the service bulletin. In the NPRM, we referred to the original issue of EMBRAER Service Bulletin 190-36-0004, dated October 18, 2006, as the appropriate source of service information for replacing the low-stage check valves and associated seals of the RH and LH engine bleed system, on Model ERJ 190-100 STD, -100 LR, and -100 IGW airplanes. Therefore, we have revised paragraphs
(j)and
(k)of this AD to also refer to Revision 01 of EMBRAER Service Bulletin 190-36-0004, dated November 14, 2006, as an appropriate source of service information. We have also revised paragraph
(n)of this AD to specify that this AD does not require sending to the manufacturer any check valve removed in accordance with Revision 01 of EMBRAER Service Bulletin 190-36-0004. Conclusion We have carefully reviewed the available data and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Interim Action This AD is considered to be interim action. The manufacturer has advised that it currently is developing a modification that will address the unsafe condition addressed by this AD. Once this modification is approved we might consider additional rulemaking. Costs of Compliance The following table provides the estimated costs, at an average labor rate of $80 per work hour, for U.S. operators to comply with this AD. The parts manufacturer states that it will supply required parts to operators at no cost. Estimated Costs Action Work hours Cost per airplane Number of U.S.-registered airplanes Fleet cost Replacement of RH check valves on Model ERJ 170-100 LR, -100 STD, -100 SE, and -100 SU airplanes (required by AD 2005-23-14) 3 $240, per replacement cycle 55 $13,200, per replacement cycle. Replacement of LH check valves on Model ERJ 170-100 LR, -100 STD, -100 SE, -100 SU, -200 LR, -200 STD, and -200 SU airplanes (new action) 3 $240, per replacement cycle 75 $18,000, per replacement cycle. Replacement of RH check valves on Model ERJ 190 airplanes (new action) 3 $240, per replacement cycle 23 $5,520, per replacement cycle. Replacement of LH check valves on Model ERJ 190 airplanes (new action) 3 $240, per replacement cycle 23 $5,520, per replacement 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)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 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, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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 removing amendment 39-14372 (70 FR 69075, November 14, 2005) and by adding the following new airworthiness directive (AD): **2007-16-09 Empresa Brasileira de Aeronautica S.A. (EMBRAER):** Amendment 39-15148. Docket No. FAA-2007-28094; Directorate Identifier 2006-NM-258-AD. Effective Date
(a)This AD becomes effective September 13, 2007. Affected ADs
(b)This AD supersedes AD 2005-23-14. Applicability
(c)This AD applies to all EMBRAER Model ERJ 170-100 LR, -100 STD, -100 SE, -100 SU, -200 LR, -200 STD, and -200 SU airplanes; and Model ERJ 190-100 STD, -100 LR, and -100 IGW airplanes; certificated in any category. Unsafe Condition
(d)This AD results from a report that an engine shut down during flight due to the failure of the low-stage check valve to close. We are issuing this AD to prevent failure of the low-stage check valve, which could result in an engine shutting down during flight. 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. Restatement of Requirements of AD 2005-23-14 Replacement for Right-Hand
(RH)Engine on Model ERJ 170-100 LR, -100 STD, -100 SE, and -100 SU Airplanes With New Service Bulletin
(f)For Model ERJ 170-100 LR, -100 STD, -100 SE, and -100 SU airplanes: Within 100 flight hours after November 29, 2005 (the effective date of AD 2005-23-14), or prior to the accumulation of 3,000 total flight hours, whichever occurs later, replace the low-stage check valve and associated seals of the RH engine's engine bleed system with a new check valve and new seals, in accordance with the Accomplishment Instructions of EMBRAER Alert Service Bulletin 170-36-A004, dated September 28, 2005; or paragraph 3.C. of the Accomplishment Instructions of EMBRAER Service Bulletin 170-36-0004, dated November 18, 2005. Repeat the replacement thereafter at intervals not to exceed 3,000 flight hours. Parts Installation for RH Engine on Model ERJ 170-100 LR, -100 STD, -100 SE, and -100 SU Airplanes
(g)For Model ERJ 170-100 LR, -100 STD, -100 SE, and -100 SU airplanes: As of November 29, 2005, no engine may be installed in the RH position unless the low-stage check valve has been replaced in accordance with the actions required by paragraph
(f)of this AD. Removed Check Valves
(h)Although EMBRAER Alert Service Bulletin 170-36-A004, dated September 28, 2005, specifies to send removed check valves to the manufacturer, this AD does not include that requirement. New Requirements of This AD Replacement for Left-Hand
(LH)Engine on All Model ERJ 170 Airplanes
(i)For Model ERJ 170-100 LR, -100 STD, -100 SE, -100 SU, -200 LR, -200 STD, and -200 SU airplanes: Within 300 flight hours after the effective date of this AD or prior to the accumulation of 3,000 total flight hours, whichever occurs later, replace the low-stage check valve and associated seals of the LH engine's engine bleed system with a new check valve and new seals, in accordance with paragraph 3.B. of the Accomplishment Instructions of EMBRAER Service Bulletin 170-36-0004, dated November 18, 2005. Repeat the replacement thereafter at intervals not to exceed 3,000 flight hours. Replacement for RH Engine on Model ERJ 190 Airplanes
(j)For Model ERJ 190-100 STD, -100 LR, and -100 IGW airplanes: Within 100 flight hours after the effective date of this AD or prior to the accumulation of 1,500 total flight hours, whichever occurs later, replace the low-stage check valve and associated seals of the RH engine's engine bleed system with a new check valve and new seals, in accordance with paragraph 3.C. of the Accomplishment Instructions of EMBRAER Service Bulletin 190-36-0004, dated October 18, 2006; or Revision 01, dated November 14, 2006. Repeat the replacement thereafter at intervals not to exceed 1,500 flight hours. Replacement for LH Engine on Model ERJ 190 Airplanes
(k)For Model ERJ 190-100 STD, -100 LR, and -100 IGW airplanes: Within 600 flight hours after the effective date of this AD or prior to the accumulation of 1,500 total flight hours, whichever occurs later, replace the low-stage check valve and associated seals of the LH engine's engine bleed system with a new check valve and new seals, in accordance with paragraph 3.B. of the Accomplishment Instructions of EMBRAER Service Bulletin 190-36-0004, dated October 18, 2006; or Revision 01, dated November 14, 2006. Repeat the replacement thereafter at intervals not to exceed 1,500 flight hours. Parts Installation for LH Engine on Model ERJ 170 Airplanes
(l)For Model ERJ 170-100 LR, -100 STD, -100 SE, -100 SU, -200 LR, -200 STD, and -200 SU airplanes: As of the effective date of this AD, no engine may be installed in the LH position unless the low-stage check valve has been replaced in accordance with the actions required by paragraph
(i)of this AD. Parts Installation for RH and LH Engine on Model ERJ 190 Airplanes
(m)For Model ERJ 190-100 STD, -100 LR, and -100 IGW airplanes: As of the effective date of this AD; no engine may be installed in the RH position unless the low-stage check valve has been replaced in accordance with the actions required by paragraph
(j)of this AD; and no engine may be installed in the LH position unless the low-stage check valve has been replaced in accordance with the actions required by paragraph
(k)of this AD. Removed Check Valves in Accordance With New Service Bulletins
(n)Although EMBRAER Service Bulletin 170-36-0004, dated November 18, 2005; EMBRAER Service Bulletin 190-36-0004, dated October 18, 2006; and EMBRAER Service Bulletin 190-36-0004, Revision 01, dated November 14, 2006; specify to send removed check valves to the manufacturer, this AD does not include that requirement. Alternative Methods of Compliance (AMOCs) (o)(1) The Manager, International Branch, ANM-116, Transport Airplane Directorate, 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. Related Information
(p)Brazilian airworthiness directive 2005-09-03R1, effective May 23, 2006; and Brazilian airworthiness directive 2006-11-01R1, effective March 21, 2007; also address the subject of this AD. Material Incorporated by Reference
(q)You must use the service information identified in Table 1 of this AD, as applicable, to perform the actions that are required by this AD, unless the AD specifies otherwise. Table 1.—All Material Incorporated by Reference Service Bulletin Revision level Date EMBRAER Alert Service Bulletin 170-36-A004 Original September 28, 2005. EMBRAER Service Bulletin 170-36-0004 Original November 18, 2005. EMBRAER Service Bulletin 190-36-0004 Original October 18, 2006. EMBRAER Service Bulletin 190-36-0004 01 November 14, 2006.
(1)The Director of the Federal Register approved the incorporation by reference of the documents identified in Table 2 of this AD in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Table 2.—New Material Incorporated by Reference Service Bulletin Revision level Date EMBRAER Service Bulletin 170-36-0004 Original November 18, 2005. EMBRAER Service Bulletin 190-36-0004 Original October 18, 2006. EMBRAER Service Bulletin 190-36-0004 01 November 14, 2006.
(2)On November 29, 2005 (70 FR 69075, November 14, 2005), the Director of the Federal Register approved the incorporation by reference of EMBRAER Alert Service Bulletin 170-36-A004, dated September 28, 2005.
(3)Contact Empresa Brasileira de Aeronautica S.A. (EMBRAER), P.O. Box 343—CEP 12.225, Sao Jose dos Campos—SP, Brazil, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15412 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28036; Directorate Identifier 2006-NM-278-AD; Amendment 39-15145; AD 2007-16-06] RIN 2120-AA64 Airworthiness Directives; Airbus Model A330-200 and A330-300 Series Airplanes; and Model A340-200, A340-300, A340-500, and A340-600 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive
(AD)for the products listed above. This AD results from mandatory continuing airworthiness information
(MCAI)issued by an airworthiness authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as failure of an evacuation slide raft to inflate, which could delay the evacuation of passengers in case of an emergency. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective September 13, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of September 13, 2007. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. FOR FURTHER INFORMATION CONTACT: Tim Backman, Aerospace Engineer, ANM-116, International Branch, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)227-2797; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Discussion 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 allow 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 AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. We issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on April 30, 2007 (72 FR 21164). That NPRM proposed to require a set of modifications of the slide raft assembly of each door and the slide raft, as applicable, which consists of: continuous “speed lacing” cord and new soft covers with rounded grommets; and a new shorter firing cable, a new anchor block for the slide raft packboard and a new folding procedure. The MCAI states that several operators have reported non-automatic deployment of slide rafts during ground operational testing. In all cases, the slide raft released correctly from the door but did not inflate automatically. Pulling the manual backup handle correctly inflated the slide raft. Investigation conducted by the slide raft manufacturer showed that non-automatic deployments have two potential root causes: non-opening of the lacing; and stiffness and stiction (static friction) on the painted inflatable material. This situation, if not corrected, could delay the evacuation of passengers in case of an emergency. A new design solution has been developed to ensure the automatic slide raft deployment, which consists of: continuous “speed lacing” cord and new soft covers with rounded grommets (this modification ensures that the lacing opens); and a new shorter firing cable, a new anchor block for the slide raft packboard and a new folding procedure (this modification ensures automatic deployment regardless of the inflatable paint condition). Both modifications together ensure the automatic deployment function. The MCAI requires accomplishment of the set of modifications. Comments We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public. Clarification of Applicability We have revised the applicability of this AD to match the MCAI and the current FAA type certification data sheet for the affected airplanes. The revision clarifies the applicability and does not add to or change the affected airplanes. Conclusion We reviewed the available data and determined that air safety and the public interest require adopting the AD with the change described previously. We determined that this change will not increase the economic burden on any operator or increase the scope of the AD. 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 a U.S. court of law. 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 required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are described in a separate paragraph of the AD. These requirements, if any, take precedence over the actions copied from the MCAI. Costs of Compliance Based on the service information, we estimate that this AD affects about 28 products of U.S. registry. We also estimate that it takes about 66 work-hours per product to comply with this AD. The average labor rate is $80 per work-hour. Required parts cost about $3,860 per product. Based on these figures, we estimate the cost of the AD on U.S. operators to be $255,920, or $9,140 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)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 AD and placed it in the AD Docket. 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 the NPRM, 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. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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: **2007-16-06 Airbus:** Amendment 39-15145. Docket No. FAA-2007-28036; Directorate Identifier 2006-NM-278-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective September 13, 2007. Affected ADs
(b)The requirements of this AD relate to those specified in AD 2006-04-03, amendment 39-14484. Applicability
(c)This AD applies to Airbus Model A330-200 and A330-300 series airplanes; and Model A340-200, A340-300, A340-500, and A340-600 series airplanes, certificated in any category; all certified models, all serial numbers; except those with the European Aviation Safety Agency
(EASA)specified modifications installed in production, or the equivalent service bulletins installed in service (as specified in Tables 1 and 2 of this AD), provided no slide has been replaced since either airplane delivery or service bulletin installation, as applicable. Table 1.—Exceptions to Applicability Airplane model Configuration Airbus modifications installed in production A330, A340-200, -300 With Modification 40161 (optional Type A door 3) 50806, 50807, 55071, and 55072. A330, A340-200, -300 Without Modification 40161 (Type 1 door 3) 50806 and 55071. A340-500 All Either 50806, 50807, and 55071, or 50806 and 55071. A340-600 All 50806, 50808, 55071, and 55073. Table 2.—Exceptions to Applicability Airplane model Airbus Service Bulletins installed in service A330 A330-25-3173, Revision 01, dated August 2, 2006; and A330-25-3301, dated March 24, 2006. A340-200, -300 A340-25-4191, Revision 01, dated August 2, 2006; and A340-25-4273, dated March 24, 2006. A340-500, -600 A340-25-5004, Revision 01, dated August 2, 2006; and A340-25-5110, dated March 24, 2006. Reason
(d)The mandatory continuing airworthiness information
(MCAI)states that several operators have reported non-automatic deployment of slide rafts during ground operational testing. In all cases, the slide raft released correctly from the door but did not inflate automatically. Pulling the manual backup handle correctly inflated the slide raft. Investigation conducted by the slide raft manufacturer showed that non-automatic deployments have two potential root causes: Non-opening of the lacing; and stiffness and stiction (static friction) on the painted inflatable material. This situation, if not corrected, could delay the evacuation of passengers in case of an emergency. A new design solution has been developed to ensure the automatic slide raft deployment, which consists of: Continuous “speed lacing” cord and new soft covers with rounded grommets (this modification ensures that the lacing opens); and a new shorter firing cable, a new anchor block for the slide raft packboard and a new folding procedure (this modification ensures automatic deployment regardless of the inflatable paint condition). Both modifications together ensure the automatic deployment function. The MCAI requires accomplishment of the set of modifications. Actions and Compliance
(e)Unless already done, do the following actions.
(1)For slide raft part numbers (P/Ns) 7A1508-003/-005/-007/-023/-025/-027/ -029/-115; P/Ns 7A1539-003/-004/-005/ -006/-007/-008/-023/-024/-025/-026/-027/ -028/-029/-030/-115/ -116; P/Ns 7A1510 -003/-004/-005/-006/-007/-008/-023/-024/ -025/-026/-027/-028/-029/-030/-115/-116; and P/Ns 4A3934-1/-2/-001/-002: No later than 36 months after the effective date of this AD, modify the slide raft in accordance with the instructions given in Airbus Service Bulletin A330-25-3173, A340-25-4191, or A340-25-5004, all Revision 01, all dated August 2, 2006; as applicable; and modify the slide raft assembly of each door in accordance with the instructions given in Airbus Service Bulletin A330-25-3301, A340-25-4273, or A340-25-5110, all dated March 24, 2006; as applicable.
(2)For slide raft P/Ns 7A1508-033/-035/-037/-119/-121; P/Ns 7A1539-033/-034/ -035/-036/-037/-038/-119/-120/-121/-122; P/Ns 7A1510-033/-034/-035/-036/-037/ -038/ -119/-120/-121/-122; and P/Ns 4A3934-5/-6/-7/-8: No later than 36 months after the effective date of this AD, modify the slide raft assembly of each door in accordance with the instructions given in Airbus Service Bulletin A330-25-3301, A340-25-4273, or A340-25-5110, all dated March 24, 2006; as applicable. FAA AD Differences Note: This AD differs from the MCAI and/ or service information as follows: No differences. Other FAA AD Provisions
(f)The following provisions also apply to this AD:
(1)Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, 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: Tim Backman, Aerospace Engineer, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)227-2797; 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
(g)Refer to MCAI EASA Airworthiness Directive 2006-0354, dated November 28, 2006; and the Airbus Service Bulletins specified in Table 3 of this AD for related information. Table 3.—Airbus Service Bulletins Service Bulletin Revision level Date A330-25-3173 01 August 2, 2006. A330-25-3301 Original March 24, 2006. A340-25-4191 01 August 2, 2006. A340-25-4273 Original March 24, 2006. A340-25-5004 01 August 2, 2006. A340-25-5110 Original March 24, 2006. Material Incorporated by Reference
(h)You must use the service information specified in Table 4 of this AD to do the actions required by this AD, unless the AD specifies otherwise.
(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.
(2)For service information identified in this AD, contact Airbus, 1 Rond Point, Maurice Bellonte, 31707 Blagnac Cedex, France.
(3)You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Table 4.—Material Incorporated by Reference Service Bulletin Revision Date A330-25-3173 01 August 2, 2006. A330-25-3225 01 September 30, 2004. A330-25-3301 Original March 24, 2006. A340-25-4191 01 August 2, 2006. A340-25-4228 01 September 30, 2004. A340-25-4273 Original March 24, 2006. A340-25-5004 01 August 2, 2006. A340-25-5054 Original August 2, 2004. A340-25-5110 Original March 24, 2006. Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15413 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-25326; Directorate Identifier 2006-NM-081-AD; Amendment 39-15151; AD 2007-16-12] RIN 2120-AA64 Airworthiness Directives; Boeing Model 757-200 and -300 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for certain Boeing Model 757-200 and -300 series airplanes. This AD requires changes to existing wiring; installation of new circuit breakers, relays, relay connectors, and wiring; and replacement of certain circuit breakers with higher-rated circuit breakers. For certain airplanes, this AD also requires modification of wiring of the control module assembly for the electrical systems. This AD results from an in-flight entertainment
(IFE)systems review. We are issuing this AD to ensure that the flightcrew is able to turn off electrical power to the IFE system and other non-essential electrical systems through utility bus switches in the flight compartment. The flightcrew's inability to turn off power to the IFE system and other non-essential electrical systems during a non-normal or emergency situation could result in the inability to control smoke or fumes in the airplane flight deck or cabin. DATES: This AD becomes effective September 13, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of September 13, 2007. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Shohreh Safarian, Aerospace Engineer, Systems and Equipment Branch, ANM-130S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)917-6418; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(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 street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to certain Boeing Model 757-200 and -300 series airplanes. That NPRM was published in the **Federal Register** on July 13, 2006 (71 FR 39597). That NPRM proposed to require changes to existing wiring; installation of new circuit breakers, relays, relay connectors, and wiring; and replacement of certain circuit breakers with higher-rated circuit breakers. For certain airplanes, that NPRM also proposed to require modification of wiring of the control module assembly for the electrical systems. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Support of the NPRM Boeing, Northwest Airlines (NWA), and the Air Transport Association
(ATA)agree with the intent of the NPRM. Request To Clarify Affected Control Module Assemblies The ATA, on behalf of its member US Airways, requests that we clarify which control module assemblies are required to be modified. US Airways states that it believes the intent of the NPRM would be to require concurrent modification of the control module assemblies identified in Boeing Service Bulletin 757-24-0093, dated August 14, 2003. However, US Airways points out that the effectivity of Boeing Component Service Bulletin 233N3209-24-04, Revision 1, dated August 14, 2003, identifies additional parts not found in Boeing Service Bulletin 757-24-0093. We agree that the intent of paragraph
(g)of the NPRM was to propose modification of certain control module assemblies identified in paragraph 2.C.3. of Boeing Service Bulletin 757-24-0093. The affected part numbers (P/Ns) are 233N3209-1025, -1026, -1028, -1300, and -1302. We have revised paragraph
(g)of this AD to identify those affected part numbers. Further, we have revised paragraph
(h)of this AD, “Credit for Accomplishment of Previous Service Bulletin,” to specify that doing the modification in accordance with the original issue of Boeing Component Service Bulletin 233N3209-24-04, dated April 10, 2003, is acceptable only for control module assembly, P/Ns 233N3209-1025, -1300, and -1302, since only these part numbers are referenced in the effectivity of the original issue of Boeing Component Service Bulletin 233N3209-24-04. Request To Address an Additional Circuit Breaker NWA states that Boeing Service Bulletin 757-24-0093, dated August 14, 2003, does not address the shedding of direct current
(DC)power on Model 757-200 airplanes, variable numbers NE311 through NE325 inclusive. NWA further states that circuit breaker C9009, which controls 28-volt DC power on these airplanes, is also not addressed by the service bulletin. We infer that NWA would like Boeing to revise the service bulletin to provide instructions for addressing the unsafe condition on these specific airplanes. We do not agree. The airplanes mentioned in NWA's comment above are identified as Group 40 airplanes in Boeing Service Bulletin 757-24-0093. Circuit breaker C9009 was not installed as part of the IFE system on Boeing airplanes. That circuit breaker was installed in accordance with a supplemental type certificate (STC), and we are currently evaluating that issue separately from this AD. This AD affects only IFE systems that were installed in production by Boeing. Therefore, we have not changed this AD in this regard. Request To Exclude Other Non-Essential Electrical Systems NWA requests that we revise the NPRM to address the IFE system only. NWA states that, in addition to addressing the IFE systems, the NPRM and referenced Boeing service bulletins address other non-essential systems. As justification for its request, NWA states that the non-essential systems are unrelated to the Interim Policy Guidance for Certification of In-Flight Entertainment Systems on Title 14 CFR Part 25 Aircraft, Policy Number PS-ANM100-2000-00105, dated September 18, 2000. We do not agree that the other non-essential electrical systems can be excluded from the requirements of this AD. If we excluded non-essential electrical systems from the requirements of this AD and electrical power to those systems had to be shut off due to smoke or fire, then power might also be shut off to other electrical systems that are essential for safe flight and landing. For this reason, control of the IFE and other non-essential electrical systems must be independent from other electrical systems essential for safe flight and landing. Therefore, we have determined that the actions required by this AD are necessary to ensure the continued safety of the affected fleet. We have revised the Summary section and paragraph
(d)of this AD to clarify that the flightcrew's inability to turn off power to the IFE system and other non-essential electrical systems during a non-normal or emergency situation could result in the inability to control smoke or fumes in the airplane flight deck or cabin. Request To Add an Alternative Method of Compliance
(AMOC)NWA requests that we revise this AD to allow use of a master “kill switch” in the airplane flight deck and/or cabin to shut off electrical power to the IFE system. As justification, NWA states that kill switches give the flightcrew or flight attendants the ability to shut off power to the IFE system without disturbing operation of flight essential systems. NWA further states that the kill switches in the flight deck should be positioned within easy reach of the flightcrew, and that kill switches in the cabin should be within easy access of the cabin crew. NWA asserts that adding kill switches meets and exceeds the intent of the NPRM. We do not agree with use of a master “kill switch” in either the flight deck or the cabin, in general without understanding the specific design details. To adequately address the unsafe condition, it is necessary to supply power to all non-essential electrical systems through a utility bus and to provide the flightcrew with a means of deactivating all non-essential electrical systems to control smoke or fumes in the flight deck or cabin. Deactivation of non-essential electrical loads might not necessarily be achieved through use of a master “kill switch.” However, under the provisions of paragraph
(i)of this AD, we may consider requests for approval of an AMOC if sufficient data are submitted to substantiate that such a design change would provide an acceptable level of safety. This AD affects only IFE systems that were installed in production by Boeing. We have not changed this AD in this regard. Request To Exempt Airplanes With Deactivated Systems NWA recommends that we revise this AD to include a waiver for IFE systems that have been permanently deactivated. NWA states that these systems would have all system power removed (capped and stowed) at the breaker. NWA asserts that, if power is removed at the breaker level, there is no possibility of the IFE system causing non-normal emergencies due to the IFE system. We do not agree to exempt airplanes with deactivated IFE systems from the requirements of this AD. Since the IFE system has been identified as the source of the unsafe condition, we need to evaluate the method of deactivation with respect to its interaction with the unsafe condition. Therefore, any request to exempt airplanes with deactivated IFE systems should be submitted as an AMOC in accordance with the provisions of paragraph
(i)of this AD. We have not changed this AD in this regard. Request To Extend Compliance Time NWA requests that we extend the compliance time from 60 months to 72 months. NWA states that the work specified in the referenced Boeing service bulletins is complicated and accomplished best at a heavy check, which occurs at 72-month intervals. We do not agree with the commenter's request to extend the compliance time. We have determined that the compliance time, as proposed in the NPRM, represents the maximum interval of time allowable for the affected airplanes to continue to safely operate before the modification is done. Since maintenance schedules vary among operators, there would be no assurance that the airplane would be modified during that maximum interval. However, paragraph
(i)of this AD provides affected operators the opportunity to apply for an adjustment of the compliance time if the operator also presents data justifying the adjustment. Request To Publish Service Information The Modification and Replacement Parts Association (MARPA) states that, typically, ADs are based on service information originating with the type certificate holder or its suppliers. MARPA adds that manufacturer service documents are privately authored instruments generally having copyright protection against duplication and distribution. MARPA notes that when a service document is incorporated by reference into a public document, such as an AD, it loses its private, protected status and becomes a public document. MARPA adds that if a service document is used as a mandatory element of compliance, it should not simply be referenced, but should be incorporated into the regulatory document; by definition, public laws must be public, which means they cannot rely upon private writings. MARPA adds that service documents incorporated by reference should be made available to the public by publication in the Department of Transportation's Docket Management System (DMS), keyed to the action that incorporates them. MARPA notes that the stated purpose of the incorporation by reference method is brevity, to keep from expanding the **Federal Register** needlessly by publishing documents already in the hands of the affected individuals; traditionally, “affected individuals” means aircraft owners and operators, who are generally provided service information by the manufacturer. MARPA adds that a new class of affected individuals has emerged, since the majority of aircraft maintenance is now performed by specialty shops instead of aircraft owners and operators. MARPA notes that this new class includes maintenance and repair organizations, component servicing and repair shops, parts purveyors and distributors, and organizations manufacturing or servicing alternatively certified parts under section 21.303 (“Replacement and modification parts”) of the Federal Aviation Regulations (14 CFR 21.303). MARPA adds that the concept of brevity is now nearly archaic as documents exist more frequently in electronic format than on paper. Therefore, MARPA asks that the service document deemed essential to the accomplishment of the NPRM be incorporated by reference into the regulatory instrument and published in DMS. We acknowledge MARPA's comment concerning incorporation by reference. The Office of the Federal Register
(OFR)requires that documents that are necessary to accomplish the requirements of the AD be incorporated by reference during the final rule phase of rulemaking. This AD incorporates by reference the documents necessary for the accomplishment of the requirements mandated by this AD. Further, we point out that while documents that are incorporated by reference do become public information, they do not lose their copyright protection. For that reason, we advise the public to contact the manufacturer to obtain copies of the referenced service information. In regard to the commenter's request to post the service bulletin on DMS, we are currently in the process of reviewing issues surrounding the posting of service bulletins on DMS as part of an AD docket. Once we have thoroughly examined all aspects of this issue and have made a final determination, we will consider whether our current practice needs to be revised. No change to this AD is necessary in response to this comment. Request To Allow Use of Parts Manufacturer Approval
(PMA)Parts MARPA states that the practice of requiring the replacement of a defective part with a certain part conflicts with 14 CFR 21.303. MARPA asserts that requiring installation of a certain part prevents installation of other good parts and prohibits the development of new parts. MARPA also states that the practice of requiring an AMOC to install a PMA part should be stopped. MARPA concludes that this practice presumes that all PMA parts are inherently defective and require an additional layer of approval. MARPA further states the NPRM does not comply with FAA Order 8040.2; that order states that replacement or installation of certain parts could have replacement parts approved under 14 CFR 21.303 based on a finding of identicality. That order also states that any parts approved under this regulation and installed should be subject to the actions of the AD and included in the applicability. MARPA states that if a PMA part is defective, then it must be addressed in an AD and not just simply implied by an AMOC requirement. MARPA suggests that we adopt language used in ADs issued by directorates other than the Transport Airplane Directorate, which specify installing an “FAA-approved equivalent part number” or “airworthy parts.” MARPA contends that the mandates contained in Section 1, paragraph (b)(1) of Executive Order 12866 are not being met because the directorates differ in their treatment of this issue. MARPA, therefore, requests that we revise the NPRM to allow use of PMA parts. We do not agree to revise this AD. The NPRM does not address PMA parts, as provided in draft FAA Order 8040.2, because the Order was only a draft that was out for comment at the time. After issuance of the NPRM, the Order was revised and issued as FAA Order 8040.5 with an effective date of September 29, 2006. FAA Order 8040.5 does not address PMA parts in ADs. We acknowledge the need to ensure that unsafe PMA parts are identified and addressed in ADs in a standardized way at the national level. We are currently examining all aspects of this issue, including input from industry. Once we have made a final determination, we will consider how our policy regarding PMA parts in ADs needs to be revised. However, the Transport Airplane Directorate considers that to delay this particular AD action would be inappropriate, since we have determined that an unsafe condition exists and that replacement of certain parts must be accomplished to ensure continued safety. Therefore, no change has been made to this AD in this regard. Clarification of Alternative Method of Compliance
(AMOC)Paragraph We have revised this action to clarify the appropriate procedure for notifying the principal inspector before using any approved AMOC on any airplane to which the AMOC applies. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance There are about 548 airplanes of the affected design in the worldwide fleet. This AD affects about 332 Model 757-200 and -300 airplanes of U.S. registry. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this AD. The estimated work hours and cost of parts in the following table depend on the relay and wiring configuration of an airplane. Estimated Costs Model Action Work hours Parts Cost per airplane Number of U.S.- registered airplanes Fleet cost 757-200 series airplanes Installation 38 to 46 $2,781 to $5,917 $5,821 to $9,597 318 $1,851,078 to $3,051,846. Concurrent modification 3 $73 to $90 $313 to $330 318 $99,534 to $104,940. 757-300 series airplanes Installation 22 $2,080 to $4,632 $3,840 to $6,392 14 $53,760 to $89,488. 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)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 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, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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): **2007-16-12 Boeing:** Amendment 39-15151. Docket No. FAA-2006-25326; Directorate Identifier 2006-NM-081-AD. Effective Date
(a)This AD becomes effective September 13, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to the Boeing airplanes identified in paragraphs (c)(1) and (c)(2) of this AD, certificated in any category.
(1)Model 757-200 series airplanes, as identified in Boeing Service Bulletin 757-24-0093, dated August 14, 2003.
(2)Model 757-300 series airplanes, as identified in Boeing Service Bulletin 757-24-0094, dated April 17, 2003. Unsafe Condition
(d)This AD results from an in-flight entertainment
(IFE)systems review. We are issuing this AD to ensure that the flightcrew is able to turn off electrical power to the IFE system and other non-essential electrical systems through utility bus switches in the flight compartment. The flightcrew's inability to turn off power to the IFE system and other non-essential electrical systems during a non-normal or emergency situation could result in the inability to control smoke or fumes in the airplane flight deck or cabin. 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. Installation of Circuit Breakers, Relays, and Wiring
(f)Within 60 months after the effective date of this AD, do the applicable actions specified in paragraphs (f)(1) through (f)(6) of this AD, in accordance with the Accomplishment Instructions of Boeing Service Bulletin 757-24-0093, dated August 14, 2003 (for Model 757-200 series airplanes); or Boeing Service Bulletin 757-24-0094, dated April 17, 2003 (for Model 757-300 series airplanes); as applicable.
(1)For all airplanes: Change the wiring at the P5 and P11 panel assemblies in the flight compartment, at the P36 panel assembly in the forward cargo compartment, and at the P37 and P70 panel assemblies in the main electronics compartment. Install a new relay and relay connector, if applicable, at the P36 panel assembly and at the P37 panel assembly.
(2)For Model 757-200 series airplanes identified as Group 1 in Boeing Service Bulletin 757-24-0093, dated August 14, 2003: Install new circuit breakers C3090 and C3089 at the P37 and P70 panel assemblies, respectively, in the main electronics compartment.
(3)For Model 757-200 series airplanes identified as Groups 21 and 22 in Boeing Service Bulletin 757-24-0093, dated August 14, 2003: Replace circuit breaker C311 at the P31 panel assembly in the main electronics compartment with a higher-rated circuit breaker.
(4)For Model 757-200 series airplanes identified as Groups 1 through 20 inclusive and 23 through 40 inclusive in Boeing Service Bulletin 757-24-0093, dated August 14, 2003: Replace circuit breakers C311 and C315 at the P31 and P32 panel assemblies, respectively, in the main electronics compartment with higher-rated circuit breakers.
(5)For Model 757-300 series airplanes identified as Groups 1 and 4 in Boeing Service Bulletin 757-24-0094, dated April 17, 2003: Replace circuit breakers C311 and C315 at the P31 and P32 panel assemblies, respectively, in the main electronics compartment with higher-rated circuit breakers.
(6)For Model 757-300 series airplanes identified as Groups 1, 2, and 3 in Boeing Service Bulletin 757-24-0094, dated April 17, 2003: Install new wires between the P5 panel assembly in the flight compartment and the P36 and P37 panel assemblies in the main electronics compartment. Concurrent Requirement for Certain Airplanes
(g)For the Model 757-200 series airplanes identified as Groups 8, 9, 12, 15, 20, 21 through 32 inclusive, and 34 through 40 inclusive in Boeing Service Bulletin 757-24-0093, dated August 14, 2003, equipped with control module assembly, part number (P/N) 233N3209-1025, -1026, -1028, -1300, or -1302: Prior to or concurrently with accomplishing the actions specified in paragraph
(f)of this AD, modify the wiring of the control module assembly for the electrical systems, by accomplishing all of the actions specified in the Accomplishment Instructions of Boeing Component Service Bulletin 233N3209-24-04, Revision 1, dated August 14, 2003, as applicable. Credit for Accomplishment of Previous Service Bulletin
(h)Modification of the control module assembly, P/N 233N3209-1025, -1300, or -1302, done before the effective date of this AD in accordance with Boeing Component Service Bulletin 233N3209-24-04, dated April 10, 2003, is acceptable for compliance with the requirements of paragraph
(g)of this AD. Alternative Methods of Compliance (AMOCs) (i)(1) The Manager, Seattle Aircraft Certification Office, 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. Material Incorporated by Reference
(j)You must use the service information listed Table 1 of this AD to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of these documents in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Table 1.—Material Incorporated by Reference Service information Revision level Date Boeing Component Service Bulletin 233N3209-24-04 1 August 14, 2003. Boeing Service Bulletin 757-24-0093 Original August 14, 2003. Boeing Service Bulletin 757-24-0094 Original April 17, 2003. Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15410 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2004-18814; Directorate Identifier 2003-NM-286-AD; Amendment 39-15144; AD 2007-16-05] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-100, -200, -200C, -300, -400, and -500 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for all Boeing Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. This AD requires repetitive inspections for discrepancies of the elevator tab control rod assemblies and/or damage to the surrounding structure, and related corrective action. This AD results from reports indicating loose jam nuts and/or thread wear at the rod ends on the elevator tab control rod assembly. We are issuing this AD to find and fix discrepancies of the elevator tab control rod assembly, which could result in excessive freeplay in the elevator tab control rods. Such freeplay could cause loss of both load paths, subsequent elevator tab flutter, and consequent reduced structural integrity and loss of controllability of the airplane. DATES: This AD becomes effective September 13, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of September 13, 2007. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Kenneth Frey, Aerospace Engineer, Systems and Equipment Branch, ANM-130S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)917-6468; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(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 street address stated in the ADDRESSES section. Discussion The FAA issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to all Boeing Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. The NPRM was published in the **Federal Register** on August 10, 2004 (69 FR 48424). That NPRM proposed to require repetitive inspections for discrepancies of the elevator tab control rod assemblies and/or damage to the surrounding structure, and related corrective action. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments that have been submitted on the NPRM. Supportive Comments Airline Pilots Association International concurs with the NPRM and the proposed implementation schedule therein. Air Transport Association
(ATA)and Alaska Airlines (Alaska) generally support the intent of the AD. ATA, on behalf of its member, Alaska, states that the inspection action specified in the NPRM is acceptable provided there are adequate parts available for replacement when discrepancies are discovered. Alaska adds that the proposed compliance intervals and repeat inspections are acceptable as proposed, as they will allow compliance at heavy check maintenance visits. We have verified with Boeing that adequate replacement parts are available. Request To Revise Service Information Jet Airways asks that the FAA advise Boeing to revise the referenced service bulletin. Jet Airways states that since there is a difference between the NPRM and the service bulletin, in that the service bulletin recommends a one-time inspection of the control rod tab assemblies and the NPRM requires repetitive inspections, the service bulletin should be revised to include the repetitive inspections. We agree with Jet Airways for the reasons provided. Since we issued the NPRM, Boeing has issued Alert Service Bulletin 737-27A1266, Revision 1, dated January 2, 2007. The procedures in Revision 1 are essentially the same as those in the original issue of the service bulletin; however, Revision 1 clarifies procedures for visually inspecting for the presence of inspection putty on each jam nut and ensuring that the inspection putty is intact and is not cracked or damaged. In addition, the one-time inspection for discrepancies of the elevator tab control rod assemblies and/or damage to the surrounding structure was changed to repetitive inspections. Therefore, Revision 1 eliminates the difference between this AD and the service bulletin that was noted in the NPRM. We have changed paragraph
(f)of this AD to refer to Revision 1 and give credit for inspections and corrective action accomplished using the original issue of Boeing Alert Service Bulletin 737-27A1266, dated September 18, 2003. Request for Locking Provision for Control Rod Jam Nuts Jet Airways also states that the repetitive inspection requirement is only needed because there is no locking provision for the jam nuts. Jet Airways adds that the FAA and Boeing should develop a provision for installation of lockwire to avoid looseness of the jam nuts and to terminate the repetitive inspection requirement. We partially agree with Jet Airways, as follows: We agree that locking provisions for certain elevator tab control rods with lockwire might be beneficial; however, we do not agree that the repetitive inspection requirement is needed only because there is no locking provision for the jam nuts. Repetitive inspections of the elevator control tab assemblies will identify discrepancies of the inspection putty, loose jam nuts, worn threads, and damage to surrounding structure that resulted from improperly torqued jam nuts. As previously described, Revision 1 of the service bulletin clarifies procedures for visually inspecting for the presence of inspection putty on each jam nut and ensuring that the inspection putty is intact and is not cracked or damaged. We have made no change to the AD in this regard. Request To Change Description of the Unsafe Condition Boeing states that the unsafe condition, as specified in the NPRM, is incorrect. That unsafe condition states, “We are proposing this AD to find and fix excessive freeplay in the tab control mechanism, which could result in elevator tab flutter and consequent loss of controllability of the airplane.” Boeing states that there is no freeplay check identified in the procedure specified in the referenced service information. Boeing asks that the wording be changed to read, “We are proposing this AD to prevent excessive thread wear in the rod ends of the elevator tab control rods as a result of loose jam nuts. Excessive rod end thread wear results in increased freeplay in the elevator tab control loop. Airframe vibration can occur with sufficient freeplay, leading to a degradation of handling characteristics of the airplane.” Boeing also asks that the unsafe condition, as specified in the Discussion section of the NPRM, be changed for the same reason to read, “Excessive freeplay in the elevator tab control rods, if not found and fixed, could result in the loss of both load paths, leading to elevator tab flutter and consequent loss of controllability of the airplane.” We agree to change the description of the unsafe condition because Boeing is accurate in the statement that there is no freeplay check identified in the procedure specified in the referenced service bulletin. We have changed the description of the unsafe condition to read, “We are issuing this AD to find and fix discrepancies of the elevator tab control rod assembly, which could result in excessive freeplay in the elevator tab control rods. Such freeplay could cause loss of both load paths, subsequent elevator tab flutter, and consequent reduced structural integrity and loss of controllability of the airplane.” We have changed the wording for the unsafe condition to include the intent of the information provided by Boeing. The discrepancies (loose jam nuts and/or thread wear at the rod ends) are referred to in the sentence immediately preceding the unsafe condition and do not need to be repeated. Concerning Boeing's comment on the Discussion section of the NPRM, since that section of the preamble does not reappear in the final rule, no change to the AD is necessary. Clarification of Alternative Method of Compliance
(AMOC)Paragraph We have revised this AD to clarify the appropriate procedure for notifying the principal inspector before using any approved AMOC on any airplane to which the AMOC applies. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance There are about 2,878 airplanes of the affected design in the worldwide fleet. This AD affects about 1,078 airplanes of U.S. registry. The inspection takes about 2 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the AD for U.S. operators is $172,480, or $160 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)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 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, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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 airworthiness directive (AD): **2007-16-05 Boeing:** Amendment 39-15144. Docket No. FAA-2004-18814; Directorate Identifier 2003-NM-286-AD. Effective Date
(a)This AD becomes effective September 13, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to all Boeing Model 737-100, -200, -200C, -300, -400, and -500 series airplanes; certificated in any category. Unsafe Condition
(d)This AD results from reports indicating loose jam nuts and/or thread wear at the rod ends on the elevator tab control rod assembly. We are issuing this AD to find and fix discrepancies of the elevator tab control rod assembly, which could result in excessive freeplay in the elevator tab control rods. Such freeplay could cause loss of both load paths, subsequent elevator tab flutter, and consequent reduced structural integrity and loss of controllability of the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Repetitive Inspections
(f)Within 4,500 flight cycles or 6,000 flight hours after the effective date of this AD, whichever is first: Do a detailed inspection for discrepancies of the inspection putty of the elevator tab control rod assemblies and/or damage to the surrounding structure, by doing all the actions, including all applicable related corrective actions, as specified in paragraph 3.B. of the Accomplishment Instructions of Boeing Alert Service Bulletin 737-27A1266, Revision 1, dated January 2, 2007. Do all applicable related corrective actions before further flight, in accordance with the service bulletin. Repeat the inspection thereafter at intervals not to exceed 4,500 flight cycles or 6,000 flight hours, whichever is first. Actions accomplished before the effective date of this AD in accordance with Boeing Alert Service Bulletin 737-27A1266, dated September 18, 2003, are considered acceptable for compliance with the corresponding actions specified in this paragraph. Note 1: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.” Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, Seattle Aircraft Certification Office, 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. Material Incorporated by Reference
(h)You must use Boeing Alert Service Bulletin 737-27A1266, Revision 1, dated January 2, 2007, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15220 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28911; Directorate Identifier 2007-NM-002-AD; Amendment 39-15150; AD 2007-16-11] RIN 2120-AA64 Airworthiness Directives; Fokker Model F27 Mark 050 Airplanes Equipped With Dowty Type R.352 or R.410 Series Propellers AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for certain Fokker Model F27 Mark 050 airplanes equipped with Dowty Type R.352 or R.410 series propellers. This AD requires checking the maintenance records to determine whether Minnesota Mining and Manufacture Co.
(3M)1300L adhesive was used to attach the de-icer assembly overshoes (boots) to the propeller blades, repetitive inspections of affected boots, and replacing boots attached with defective adhesive. This AD results from three events of propeller blade de-icer assembly boots debonding and detaching during flight. This condition was caused by using 3M 1300L adhesive to attach the boot to the propeller blade. We are issuing this AD to detect and correct boots attached with defective adhesive, which could result in debonding and separation of a boot from the airplane, consequent reduced structural integrity of the airplane, and possible injury to passengers and crew. DATES: This AD becomes effective August 24, 2007. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of August 24, 2007. We must receive comments on this AD by September 10, 2007. ADDRESSES: Use one of the following addresses to submit comments on this 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 Fokker Services B.V., Technical Services Dept., P.O. Box 231, 2150 AE Nieuw-Vennep, the Netherlands, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington 98055-4056; telephone
(425)227-1137; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Discussion The Civil Aviation Authority-The Netherlands (CAA-NL), which is the airworthiness authority for the Netherlands, notified us that an unsafe condition may exist on certain Fokker Model F27 Mark 050 airplanes equipped with Dowty Type R.352 or R.410 series propellers. The CAA-NL advises that there have been three events of propeller blade de-icer assembly boots debonding and detaching during flight. In two of the incidents, the boot impacted the fuselage causing considerable damage, but did not penetrate into the fuselage. In the third incident the boot hit a passenger cabin window shattering the pane and penetrating into the fuselage, and subsequently injuring two passengers. Investigation revealed that all of the affected boots had been attached using Minnesota Mining and Manufacture Co.
(3M)1300L adhesive. This condition, if not corrected, could result in debonding and separation of a boot from the airplane, consequent reduced structural integrity of the airplane, and possible injury to passengers and crew. Relevant Service Information Dowty has issued Service Bulletin F50-61-158, including Appendix 1, dated September 30, 2005. The service bulletin describes procedures for checking the maintenance records to determine whether 3M 1300L adhesive has been applied to attach the de-icer assembly overshoes (boots) to the propeller blades, repetitive inspections of affected boots, and replacing boots attached with defective adhesive. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. The CAA-NL reviewed the service information and issued Dutch airworthiness directive NL-2005-016, dated December 16, 2005, to ensure the continued airworthiness of these airplanes in the Netherlands. FAA's Determination and Requirements of This AD These airplanes are manufactured in the Netherlands and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the CAA-NL has kept the FAA informed of the situation described above. We have examined the CAA-NL's findings, evaluated all pertinent information, and determined that we need to issue an AD for products of this type design that are certificated for operation in the United States. Therefore, we are issuing this AD to detect and correct boots with defective adhesive, which could result in separation of a boot from the airplane, possible injury to passengers and crew, and consequent reduced structural integrity of the airplane. This AD requires accomplishing the actions specified in the service information described previously. Costs of Compliance None of the airplanes affected by this action are on the U.S. Register. All airplanes affected by this AD are currently operated by non-U.S. operators under foreign registry; therefore, they are not directly affected by this AD action. However, we consider this AD necessary to ensure that the unsafe condition is addressed if any affected airplane is imported and placed on the U.S. Register in the future. If an affected airplane is imported and placed on the U.S. Register in the future, the required inspections would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the AD would be $80 per airplane, per inspection cycle. FAA's Determination of the Effective Date No airplane affected by this AD is currently on the U.S. Register. Therefore, providing notice and opportunity for public comment is unnecessary before this AD is issued, and this AD may be made effective in less than 30 days after it is published in the **Federal Register** . Comments Invited This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any relevant written data, views, or arguments regarding this AD. Send your comments to an address listed in the ADDRESSES section. Include “Docket No. FAA-2007-28911; Directorate Identifier 2007-NM-002-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD that might suggest a need to modify it. 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 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 the 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 street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the 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 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, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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): **2007-16-11 Fokker Services B.V.:** Amendment 39-15150. Docket No. FAA-2007-28911; Directorate Identifier 2007-NM-002-AD. Effective Date
(a)This AD becomes effective August 24, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Fokker Model F27 Mark 050 airplanes, certificated in any category; equipped with Dowty Type R.352 or R.410 series propellers. Unsafe Condition
(d)This AD results from three events of propeller blade de-icer assembly overshoes (boots) debonding and detaching during flight. This condition was caused by using Minnesota Mining and Manufacture Co.
(3M)1300L adhesive to attach the boots to the propeller blade. We are issuing this AD to detect and correct boots attached with defective adhesive, which could result in debonding and separation of a boot from the airplane, consequent reduced structural integrity of the airplane, and possible injury to passengers and crew. 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. Identification of Affected Boots/Repetitive Inspections/Replacement
(f)Within 30 days after the effective date of this AD: Check the maintenance records to determine whether 3M 1300L adhesive was used to attach the de-icer assembly boots to the propeller blades.
(1)If 3M 1300L adhesive was not used: No further action is required by this paragraph.
(2)If 3M 1300L adhesive was used, or the type of adhesive cannot be determined: Within 650 flight hours, do a general visual inspection for signs of lifting or bubbling of the adhesive in accordance with the Accomplishment Instructions of Dowty Service Bulletin F50-61-158, including Appendix 1, dated September 30, 2005.
(i)If no signs of lifting or bubbling are found: Repeat the inspection at intervals not to exceed 650 flight hours.
(ii)If any signs of lifting or bubbling are found: Before further flight, replace the affected de-icer assembly boot in accordance with Accomplishment Instructions of the service bulletin. Note 1: For the purposes of this AD, a general visual inspection is: “A visual examination of an interior or exterior area, installation, or assembly to detect obvious damage, failure, or irregularity. This level of inspection is made from within touching distance unless otherwise specified. A mirror may be necessary to ensure visual access to all surfaces in the inspection area. This level of inspection is made under normally available lighting conditions such as daylight, hangar lighting, flashlight, or droplight and may require removal or opening of access panels or doors. Stands, ladders, or platforms may be required to gain proximity to the area being checked.” Parts Installation
(g)As of the effective date of this AD, no person may use 3M 1300L adhesive to attach a boot to the propeller blade, on any airplane. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, International Branch, Transport Airplane Directorate, 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. Related Information
(i)Dutch airworthiness directive NL-2005-016, dated December 16, 2005, also addresses the subject of this AD. Material Incorporated by Reference
(j)You must use Dowty Service Bulletin F50-61-158, including Appendix 1, dated September 30, 2005, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Fokker Services B.V., Technical Services Dept., P.O. Box 231, 2150 AE Nieuw-Vennep, the Netherlands, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html* . Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. 10 [FR Doc. E7-15417 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28017; Directorate Identifier 2007-NM-005-AD; Amendment 39-15146; AD 2007-16-07] RIN 2120-AA64 Airworthiness Directives; Airbus Model A310-203, A310-204, A310-222, A310-304, A310-322, and A310-324 Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: We are adopting a new airworthiness directive
(AD)for the products listed above. This 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: * * * some structural areas have been identified for which existing recommended SB (service bulletin) needs to be rendered mandatory. As a consequence, and because it has been shown that the torque applied to the tension bolts connecting the beam (stringer 49) to the forward and aft beam extension at FR11 and FR17 may be insufficient, this AD renders mandatory the replacement of those tension bolts, in order to limit the risks of damage or corrosion of the specified areas. Damage or corrosion of the specified areas could result in reduced structural integrity of the airplane. We are issuing this AD to require actions to correct the unsafe condition on these products. DATES: This AD becomes effective September 13, 2007. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of September 13, 2007. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. FOR FURTHER INFORMATION CONTACT: Tom Stafford, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-1622; 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 AD references the MCAI and related service information that we considered in forming the engineering basis to correct the unsafe condition. The AD contains text copied from the MCAI and for this reason might not follow our plain language principles. Discussion We issued a notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the **Federal Register** on April 26, 2007 (72 FR 20785). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states: During the A310 life extension exercise performed by Airbus, the Airlines Representatives and the Airworthiness Authorities, some structural areas have been identified for which existing recommended SB (service bulletin) needs to be rendered mandatory. As a consequence, and because it has been shown that the torque applied to the tension bolts connecting the beam (stringer 49) to the forward and aft beam extension at FR11 and FR17 may be insufficient, this AD renders mandatory the replacement of those tension bolts, in order to limit the risks of damage or corrosion of the specified areas. Damage or corrosion of the specified areas could result in reduced structural integrity of the airplane. You may obtain further information by examining the MCAI in the AD docket. Comments We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM or on the determination of the cost to the public. Conclusion We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed. 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 required different actions in this AD from those in the MCAI in order to follow our FAA policies. Any such differences are highlighted in a NOTE within the AD. Costs of Compliance Based on the service information, we estimate that this AD affects about 29 products of U.S. registry. We also estimate that it will take about 9 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $80 per work-hour. Required parts will cost about $886 per product. 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 this AD on U.S. operators to be $46,574, or $1,606 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this AD: 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 AD and placed it in the AD docket. 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 the NPRM, 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. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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: **2007-16-07 Airbus:** Amendment 39-15146. Docket No. FAA-2007-28017; Directorate Identifier 2007-NM-005-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective September 13, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Airbus Model A310-203, A310-204, A310-222, A310-304, A310-322, and A310-324 airplanes, certificated in any category, manufacturing serial numbers 283 through 434 inclusive. Airplanes which have received application of Airbus Service Bulletin A310-53-2045 at original issue up to Revision 05 are not affected by this AD. Subject
(d)Fuselage. Reason
(e)The mandatory continuing airworthiness information
(MCAI)states: During the A310 life extension exercise performed by Airbus, the Airlines Representatives and the Airworthiness Authorities, some structural areas have been identified for which existing recommended SB (service bulletin) needs to be rendered mandatory. As a consequence, and because it has been shown that the torque applied to the tension bolts connecting the beam (stringer 49) to the forward and aft beam extension at FR11 and FR17 may be insufficient, this AD renders mandatory the replacement of those tension bolts, in order to limit the risks of damage or corrosion of the specified areas. Damage or corrosion of the specified areas could result in reduced structural integrity of the airplane. Actions and Compliance
(f)Unless already done, do the following actions at the applicable time specified in paragraph (f)(1) or (f)(2) of this AD: Rework the structure between frame 11 and frame 17 of the nose landing gear well of the fuselage in accordance with the instructions of Airbus Service Bulletin A310-53-2045, Revision 05, dated July 20, 2006.
(1)For Model A310-300 airplanes: Prior to accumulation of 35,000 total flight cycles from first flight of the airplane, or within 30 days after the effective date of this AD, whichever occurs later.
(2)For Model A310-200 airplanes: Prior to the accumulation of 40,000 total flight cycles from the first flight of the airplane, or within 30 days after the effective date of this AD, whichever occurs later.
(3)Actions done before the effective date of this AD in accordance with Airbus Service Bulletin A310-53-2045, dated March 11, 1988; Revision 1, dated June 16, 1988; Revision 2, dated September 7, 1988; Revision 3, dated October 4, 1989; or Revision 4, dated April 20, 1990; is acceptable for compliance with the requirements of this AD. 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, Transport Airplane Directorate, 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: Tom Stafford, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)227-1622; fax
(425)227-1149. Before using any AMOC approved in accordance with § 39.19 on any airplane to which the AMOC applies, notify the 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 European Aviation Safety Agency Airworthiness Directive 2006-0367, dated December 5, 2006; and Airbus Service Bulletin A310-53-2045, Revision 05, dated July 20, 2006; for related information. Material Incorporated by Reference
(i)You must use Airbus Service Bulletin A310-53-2045, Revision 05, dated July 20, 2006, to do the actions required by this AD, unless the AD specifies otherwise.
(1)The Director of the Federal Register approved the incorporation by reference of this service information under 5 U.S.C. 552(a) and 1 CFR part 51.
(2)For service information identified in this AD, contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France.
(3)You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call
(202)741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15414 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2005-22918; Directorate Identifier 2005-NM-172-AD; Amendment 39-15143; AD 2007-16-04] RIN 2120-AA64 Airworthiness Directives; Airbus Model A319-100 and A320-200 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for certain Airbus Model A319-100 and A320-200 series airplanes. This AD requires repetitive inspections of the wing-tank fuel pumps, canisters, and wing fuel tanks for detached identification labels, and corrective action if necessary. This AD also requires modification of the fuel strainers at the fuel pump and suction bypass intakes, which would end the repetitive inspections. This AD results from several incidents of detached plastic identification labels found floating in the wing fuel tanks. We are issuing this AD to prevent plastic identification labels being ingested into the fuel pumps and consequently entering the engine fuel feed system, which could result in an engine shutdown. DATES: This AD becomes effective September 13, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the AD as of September 13, 2007. ADDRESSES: You may examine the AD docket on the Internet at *http://dms.dot.gov* or in person at the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC. Contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, for service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Tim Dulin, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-2141; fax
(425)227-1149. SUPPLEMENTARY INFORMATION: Examining the Docket You may examine the airworthiness directive
(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 street address stated in the ADDRESSES section. Discussion The FAA issued a supplemental notice of proposed rulemaking
(NPRM)to amend 14 CFR part 39 to include an AD that would apply to certain Airbus Model A319-100 and Model A320-200 series airplanes. That supplemental NPRM was published in the **Federal Register** on March 29, 2007 (72 FR 14715). That supplemental NPRM proposed to require repetitive inspections of the wing-tank fuel pumps, canisters, and wing fuel tanks for detached identification labels, and corrective action if necessary. That supplemental NPRM also proposed to mandate modification of the fuel strainers at the fuel pump and suction bypass intakes. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Request To Add Revised Service Information Air Transport Association (ATA), on behalf of US Airways, asks that we update the service bulletin reference for the modification specified in paragraph
(j)of the supplemental NPRM to Revision 01 of Airbus Service Bulletin A320-28-1149, dated October 9, 2006. We agree with the request. Airbus has issued Service Bulletin A320-28-1149, Revision 01, dated October 9, 2006. We referred to the original issue of the service bulletin, dated June 14, 2006, as the appropriate source of service information for accomplishing the modification. The procedures in Revision 01 are essentially the same as those in the original issue; however, the procedures in Revision 01 add certain clarifications, and the work hours for accomplishing the modification have been increased. We have changed paragraph
(j)of this AD to refer to Revision 01 of the service bulletin, added a new paragraph
(k)to this AD to give credit for the original issue of the service bulletin, and re-identified subsequent paragraphs accordingly. Request To Change Applicability/Add Revised Service Information Airbus asks that we change the applicability specified in paragraph
(c)of the supplemental NPRM. Airbus states that the applicability refers to Airbus Service Bulletins A320-28-1102, Revision 02, dated July 10, 2006; and A320-57-1117, Revision 02, dated March 13, 2006. Airbus notes that the service bulletins are being revised to remove manufacturer's serial numbers
(MSNs)1083, 1310, 1314, and 1360, because Airbus has confirmed that labels were never installed on these airplanes. Airbus also notes that European Aviation Safety Agency
(EASA)airworthiness directive 2006-0236, also referred to in the supplemental NPRM, has been revised to remove the MSNs; however, due to an administrative error, MSN 1083 remains in the compliance section of the EASA airworthiness directive. In conclusion, Airbus asks that the applicability section be updated to reflect these changes. We agree to change the applicability specified in paragraph
(c)of this AD to exclude airplanes having MSNs 1083, 1310, 1314, and 1360. However, since the referenced service bulletins have not yet been revised to remove these airplanes, we will retain the reference to Revision 2 of the service bulletin in paragraph
(c)as well as paragraph
(f)of this AD, which is repetitive inspections and corrective actions of the four wing-tank fuel pumps and canisters. Request To Change Costs of Compliance Section Northwest Airlines
(NWA)states that it is in the process of implementing the modification of the fuel pump strainers specified in Service Bulletin A320-28-1149. NWA adds that its work-hour estimate is 54 hours for implementation, after access to the tanks is gained. NWA does not provide a specific request. We infer that NWA is asking that we increase the number of work hours for accomplishing the modification, as specified in the Costs of Compliance section of the supplemental NPRM. Revision 01 of Service Bulletin A320-28-1149 specifies an increase in the work hours for accomplishing the modification from 20 to 36; therefore, we have changed the work hours in the Costs of Compliance section of this AD to match the work hours specified in the subject service bulletin. However, modification costs will likely vary depending on the operator and the airplane configuration. Request To Change Repetitive Inspection Requirement NWA agrees with the 3,000-flight-hour repetitive inspection interval after the initial label removal has been completed. However, NWA has not found any labels in the wing pumps on affected airplanes after the removal procedure has been done. NWA would like the exception “following any wing-tank fuel pump failure” removed from the repetitive inspection requirement specified in paragraph (g)(2) of the supplemental NPRM to simplify the continued inspections. We do not agree with the NWA request. Accomplishment of the label removal procedure does not completely remove the risk of detached labels getting into the fuel system, since some of the labels are not accessible during the label removal procedure. The FAA-approved Master Minimum Equipment List prohibits dispatch with one wing-tank fuel pump inoperative on the airplanes affected by the requirements in this AD. Therefore, the fuel pump would have to be repaired before further flight, and inspecting for labels would not impose any additional burden. We have made no change to the AD in this regard. Conclusion We have carefully reviewed the available data, including the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously. We have determined that these changes will neither increase the economic burden on any operator nor increase the scope of the AD. Costs of Compliance The following table provides the estimated costs for U.S. operators to comply with this AD. Estimated Costs Action Work hours Average labor rate per hour Parts Cost per airplane Number of U.S.-registered airplanes Fleet cost Inspection specified in Service Bulletin A320-28-1102 3 $80 $0 $240, per inspection cycle 70 $16,800, per inspection cycle. Inspection specified in Service Bulletin A320-57-1117 20 80 0 $1,600, per inspection cycle 70 $112,000, per inspection cycle. Modification specified in Service Bulletin A320-28-1149, Revision 01 36 80 0 $2,880 70 $201,600. 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD:
(1)Is not a “significant regulatory action” under Executive Order 12866;
(2)Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and
(3)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 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, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 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): **2007-16-04 Airbus:** Amendment 39-15143. Docket No. FAA-2005-22918; Directorate Identifier 2005-NM-172-AD. Effective Date
(a)This AD becomes effective September 13, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Airbus Model A319-100 and Model A320-200 series airplanes, certificated in any category; as identified in Airbus Service Bulletins A320-28-1102, Revision 02, dated July 10, 2006; and A320-57-1117, Revision 02, dated March 13, 2006; except airplanes having manufacturer's serial numbers 1083, 1310, 1314, and 1360. Unsafe Condition
(d)This AD results from several incidents of detached plastic identification labels found floating in the wing fuel tanks. We are issuing this AD to prevent plastic identification labels being ingested into the fuel pumps and consequently entering the engine fuel feed system, which could result in an engine shutdown. 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. Repetitive Inspections/Corrective Actions of Four Wing-Tank Fuel Pumps and Canisters
(f)Perform a detailed inspection for detached identification labels in the four wing-tank fuel pumps and canisters, and do all applicable corrective actions, by doing all the actions in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-28-1102, Revision 02, dated July 10, 2006; except as provided by paragraph
(j)of this AD. Do all applicable corrective actions before further flight. Inspect at the earlier of the compliance times specified in paragraphs (f)(1) and (f)(2) of this AD.
(1)Within 600 flight hours after the effective date of this AD.
(2)Before the next flight following any wing-tank fuel pump failure.
(g)Repeat the inspection required by paragraph
(f)of this AD thereafter at the applicable time specified in paragraph (g)(1) or (g)(2) of this AD, until accomplishment of paragraph
(j)of this AD.
(1)For airplanes on which the inspection required by paragraph
(i)of this AD has not been done: Repeat the inspection at intervals not to exceed the earlier of the times specified in paragraphs (g)(1)(i) and (g)(1)(ii) of this AD.
(i)600 flight hours.
(ii)Before the next flight following any wing-tank fuel pump failure.
(2)For airplanes on which the inspection required by paragraph
(i)of this AD has been done: Repeat the inspection at intervals not to exceed the earlier of the times specified in paragraphs (g)(2)(i) and (g)(2)(ii) of this AD.
(i)3,000 flight hours.
(ii)Before the next flight following any wing-tank fuel pump failure. Note 1: For the purposes of this AD, a detailed inspection is: “An intensive examination of a specific item, installation, or assembly to detect damage, failure, or irregularity. Available lighting is normally supplemented with a direct source of good lighting at an intensity deemed appropriate. Inspection aids such as mirror, magnifying lenses, etc., may be necessary. Surface cleaning and elaborate procedures may be required.” Credit for Actions Accomplished Using Previous Service Information
(h)Inspections and corrective actions accomplished before the effective date of this AD in accordance with Airbus Service Bulletin A320-28-1102, dated August 20, 2002; or Revision 01, dated February 11, 2005; are considered acceptable for compliance with the corresponding actions specified in paragraph
(f)of this AD. Inspection/Corrective Actions of the Collector Cells, Surge Tank, Wing Fuel Tank and Vent Box
(i)Within 60 months after the effective date of this AD: Perform a detailed inspection for detached identification labels in the collector cells between ribs 1 and 2, the surge tank between ribs 22 and 26, and the wing fuel tank and vent box, and do any applicable corrective actions, by doing all the applicable actions in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-57-1117, Revision 02, including Appendix 01, dated March 13, 2006. Do any applicable corrective action before further flight. Modification
(j)Before the accumulation of 162 months since first flight of the airplane, or within 6 months after the effective date of this AD, whichever is later: Modify the fuel strainers at the fuel pump and suction bypass intakes by doing all the actions in accordance with Airbus Service Bulletin A320-28-1149, Revision 01, dated October 9, 2006. Accomplishment of the modification in this paragraph ends the repetitive inspections required by paragraph
(g)of this AD. Credit for Actions Accomplished Using Previous Service Information
(k)Modifications accomplished before the effective date of this AD in accordance with Airbus Service Bulletin A320-28-1149, dated June 14, 2006, are considered acceptable for compliance with the corresponding actions specified in paragraph
(j)of this AD. No Reporting Required
(l)Although Airbus Service Bulletin A320-28-1102, Revision 02, dated July 10, 2006, specifies submitting an inspection report to the manufacturer, this AD does not include that requirement. Alternative Methods of Compliance (AMOCs) (m)(1) The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)Before using any AMOC approved in accordance with § 39.19 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. Related Information
(n)European Aviation Safety Agency airworthiness directive 2006-0236R1, dated March 9, 2007, also addresses the subject of this AD. Material Incorporated by Reference
(o)You must use the Airbus service bulletins specified in Table 1 of this AD to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of these documents in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Airbus, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Table 1.—Material Incorporated by Reference Airbus Service Bulletin Revision level Date A320-28-1102, excluding Appendix 01 02 July 10, 2006. A320-57-1117, including Appendix 01 02 March 13, 2006. A320-28-1149 01 October 9, 2006. Issued in Renton, Washington, on July 30, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15225 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28920; Directorate Identifier 2007-NM-162-AD; Amendment 39-15152; AD 2007-16-13] RIN 2120-AA64 Airworthiness Directives; Boeing Model 757-200, -200PF, and -200CB Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. SUMMARY: The FAA is superseding an existing airworthiness directive
(AD)that applies to certain Boeing Model 757-200, -200PF, and -200CB series airplanes. The existing AD currently requires repetitive inspections of the shim installation between the vertical flange and bulkhead, and repair if necessary. This new AD adds, for certain airplanes, an inspection for cracking of the four critical fastener holes in the horizontal flange, and repair if necessary. This AD results from reports of cracking in the pylon under bolts that appear to be undamaged during the existing AD inspections. We are issuing this AD to detect and correct cracks, loose and broken bolts, and shim migration in the joint between the aft torque bulkhead and the strut-to-diagonal brace fitting, which could result in damage to the strut and consequent separation of the strut and engine from the airplane. DATES: This AD becomes effective August 24, 2007. The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of August 24, 2007. We must receive any comments on this AD by October 9, 2007. ADDRESSES: Use one of the following addresses to submit comments on this 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 service information identified in this AD. FOR FURTHER INFORMATION CONTACT: Dennis Stremick, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)917-6450; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Discussion On May 26, 2005, we issued AD 2005-12-04, amendment 39-14120 (70 FR 34313, June 14, 2005). That AD applies to certain Boeing Model 757-200, -200PF, and -200CB series airplanes. That AD requires repetitive inspections of the shim installation between the vertical flange and bulkhead, and repair if necessary. That AD resulted from reports of cracks, loose and broken bolts, and shim migration in the joint between the aft torque bulkhead and the strut-to-diagonal brace fitting. The actions specified in that AD are intended to detect and correct such cracks, loose and broken bolts, and shim migration, which could result in damage to the strut and consequent separation of the strut and engine from the airplane. Actions Since AD Was Issued Since we issued that AD, we have received reports of cracking in the pylon under bolts that appear to be undamaged during the existing AD inspections. Although the cracking was underneath non-discrepant bolts, it was adjacent to bolts subject to AD 2005-12-04 that were loose for a period of time long enough to cause this cracking. Other Relevant Rulemaking On May 25, 2004, we issued AD 2004-12-07, amendment 39-13666 (69 FR 33561, June 16, 2004), for certain Boeing Model 757 series airplanes. That AD requires, for certain airplanes, repetitive detailed inspections of certain aft bulkhead fasteners for loose or missing fasteners, and corrective action if necessary. That AD also requires, for certain other airplanes, a one-time detailed inspection of the middle gusset of the inboard side load fitting for proper alignment and realignment if necessary; a one-time eddy current inspection of certain fastener holes for cracking, and repair if necessary; and a detailed inspection of certain fasteners for loose or missing fasteners; and replacement with new fasteners if necessary. Accomplishing the actions specified in this AD terminates the requirements specified in paragraphs
(b)and
(c)of AD 2004-12-07. Relevant Service Information We have reviewed Boeing Alert Service Bulletin 757-54A0047, Revision 3, dated June 27, 2007 (we referred to Boeing Service Bulletin 757-54A0047, Revision 1, dated March 24, 2005, as the appropriate source of service information for accomplishing the required actions specified in AD 2005-12-04). The alert service bulletin describes basically the same procedures (as required by AD 2005-12-04) for repetitive detailed inspections of the shim installation between the vertical flange and bulkhead and repair if necessary; however, the description of the actions has been revised. The alert service bulletin specifies to do repetitive inspections as follows: • Do detailed inspections of the shim installations between the vertical flange and bulkhead to determine if there are signs of movement. • Do detailed inspections of the four fasteners in the vertical flange to determine if there are signs of movement or if there are gaps under the head or collar. • Do detailed inspections of the fasteners that hold the strut to the horizontal flange of the strut-to-diagonal brace fitting to determine if there are signs of movement or if there are gaps under the head or collar. The alert service bulletin specifies to do related investigative actions and repairs as follows: • Repair the shim if cumulative movement is 0.50 inch or less. • Replace the shim if cumulative movement is more than 0.50 inch and do the inspection and repair of the four critical fastener holes on the horizontal flange specified in Part IV of the alert service bulletin. • If any fastener is rejected, inspect the fastener hole for cracking and repair if necessary, increase the diameter of the hole, install oversize fasteners, and do the inspection and repair of the four critical fastener holes on the horizontal flange specified in Part IV of the alert service bulletin. In addition to the repetitive inspections, the alert service bulletin describes procedures for an additional one-time inspection as follows: If any findings from inspections done in accordance with the original issue or Revision 1 of the service bulletin led to a rejection of any fasteners, or if there were any equivalent findings prior to the original issue of the service bulletin (except for findings on airplanes identified as Group 1, Configuration 2 in Revision 3 of the alert service bulletin that are prior to the incorporation of Boeing Service Bulletin 757-54-0035), the alert service bulletin describes a high frequency eddy current
(HFEC)inspection for cracking of the four critical fastener holes in the horizontal flange and repair if necessary. Depending on the group and configuration specified in the alert service bulletin, the initial compliance time ranges from 90 days after the date on the service bulletin to 6,000 flight cycles or 36 months, whichever occurs first, after the incorporation of Boeing Service Bulletin 757-54-0035. Depending on the group and configuration specified in the alert service bulletin, the repetitive interval ranges from 6,000 flight cycles or 36 months, whichever occurs first, to 9,000 flight cycles or 54 months, whichever occurs first. FAA's Determination and Requirements of This AD The unsafe condition described previously is likely to exist or develop on other airplanes of the same type design. For this reason, we are issuing this AD to supersede AD 2005-12-04. This new AD continues to require repetitive inspections of the shim installation between the vertical flange and bulkhead, and repair if necessary. This AD also requires, for certain airplanes, an inspection for cracking of the four critical fastener holes in the horizontal flange, and repair if necessary. Differences Between This AD and the Alert Service Bulletin The alert service bulletin specifies to contact the manufacturer for instructions on how to repair certain conditions, but this AD requires repairing those conditions in one of the following ways: • Using a method that we approve; or • Using data that meet the certification basis of the airplane, and that have been approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization whom we have authorized to make those findings. FAA's Determination of the Effective Date An unsafe condition exists that requires the immediate adoption of this AD; therefore, providing notice and opportunity for public comment before the AD is issued is impracticable, and good cause exists to make this AD effective in less than 30 days. Comments Invited This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any relevant written data, views, or arguments regarding this AD. Send your comments to an address listed in the ADDRESSES section. Include “Docket No. FAA-2007-28920; Directorate Identifier 2007-NM-162-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD that might suggest a need to modify it. 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 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 the 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 level 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. 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the 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 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, Incorporation by reference, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends part 39 of the Federal Aviation Regulations (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 removing amendment 39-14120 (70 FR 34313, June 14, 2005) and adding the following new airworthiness directive (AD): **2007-16-13 Boeing:** Docket No. FAA-2007-28920; Directorate Identifier 2007-NM-162-AD; Amendment 39-15152. Effective Date
(a)This AD becomes effective August 24, 2007. Affected ADs
(b)This AD supersedes AD 2005-12-04. Accomplishing the actions specified in this AD terminates certain requirements of AD 2004-12-07, amendment 39-13666. Applicability
(c)This AD applies to Boeing Model 757-200, -200PF, and -200CB series airplanes; certificated in any category; line numbers 1 through 1048 inclusive; powered by Rolls-Royce engines. Unsafe Condition
(d)This AD results from reports of cracking in the pylon under bolts that appear to be undamaged during the existing AD inspections. We are issuing this AD to detect and correct cracks, loose and broken bolts, and shim migration in the joint between the aft torque bulkhead and the strut-to-diagonal brace fitting, which could result in damage to the strut and consequent separation of the strut and engine from the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Bulletin Reference
(f)The term “alert service bulletin,” as used in this AD, means Boeing Alert Service Bulletin 757-54A0047, Revision 3, dated June 27, 2007. One-Time Inspection and Repair
(g)For airplanes identified in paragraphs (g)(1) and (g)(2) of this AD: Within 90 days after the effective date of this AD, do a high frequency eddy current
(HFEC)inspection for cracking of the four critical fastener holes in the horizontal flange and, before further flight, do all applicable repairs, in accordance with Part IV of the Accomplishment Instructions of the alert service bulletin, except as required by paragraph
(k)of this AD.
(1)Airplanes on which findings on the horizontal or vertical fasteners or the shims led to a rejection of any fastener during the actions specified in Boeing Alert Service Bulletin 757-54A0047, dated November 13, 2003; or Boeing Service Bulletin 757-54A0047, Revision 1, dated March 24, 2005.
(2)Airplanes that had equivalent findings prior to Boeing Alert Service Bulletin 757-54A0047, dated November 13, 2003, except for findings on airplanes identified as Group 1, Configuration 2 in the alert service bulletin that were prior to the incorporation of Boeing Service Bulletin 757-54-0035. Repetitive Inspections and Repair
(h)At the applicable times specified in paragraph 1.E., “Compliance,” of the alert service bulletin, except as required by paragraphs
(i)and
(j)of this AD: Do the inspections specified in paragraphs (h)(1), (h)(2), and (h)(3) of this AD and, before further flight, do all applicable related investigative actions and repairs, by doing all the actions specified in Parts I and II of the Accomplishment Instructions of the alert service bulletin, except as required by paragraph
(k)of this AD.
(1)Do detailed inspections of the shim installations between the vertical flange and bulkhead to determine if there are signs of movement.
(2)Do detailed inspections of the four fasteners in the vertical flange to determine if there are signs of movement or if there are gaps under the head or collar.
(3)Do detailed inspections of the fasteners that hold the strut to the horizontal flange of the strut-to-diagonal brace fitting to determine if there are signs of movement or if there are gaps under the head or collar. Exceptions to Alert Service Bulletin Procedures
(i)Where the alert service bulletin specifies a compliance time relative to “the date on this service bulletin,” this AD requires compliance within the corresponding specified time relative to the effective date of this AD.
(j)Where the alert service bulletin specifies a compliance time relative to the “date of issuance of airworthiness certificate,” this AD requires compliance within the corresponding time relative to the date of issuance of the original standard airworthiness certificate or the date of issuance of the original export certificate of airworthiness.
(k)If any crack is found during any inspection required by this AD, and the alert service bulletin specifies to contact Boeing for appropriate action: Before further flight, repair the crack using a method approved in accordance with the procedures specified in paragraph
(o)of this AD Credit for Actions Done Using Previous Service Information
(l)Actions done before the effective date of this AD in accordance with Boeing Service Bulletin 757-54A0047, Revision 1, dated March 24, 2005; and Boeing Alert Service Bulletin 757-54A0047, Revision 2, dated January 31, 2007; are considered acceptable for compliance with the corresponding actions specified in this AD.
(m)An inspection and corrective actions done before June 29, 2005 (the effective date of AD 2005-12-04), in accordance with paragraph
(b)or (c), as applicable, of AD 2004-12-07, are acceptable for compliance with the initial inspection requirement of paragraph
(h)of this AD. An Acceptable Method of Compliance With Certain Requirements of AD 2004-12-07
(n)Accomplishing the actions specified in this AD terminates the requirements specified in paragraphs
(b)and
(c)of AD 2004-12-07. Alternative Methods of Compliance (AMOCs) (o)(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.
(4)AMOCs approved previously in accordance with AD 2004-12-07 are approved as AMOCs for the corresponding provisions of this AD.
(5)AMOCs approved previously in accordance with AD 2005-12-04 are approved as AMOCs for the corresponding provisions of this AD. Material Incorporated by Reference
(p)You must use Boeing Alert Service Bulletin 757-54A0047, Revision 3, dated June 27, 2007, to perform the actions that are required by this AD, unless the AD specifies otherwise. The Director of the Federal Register approved the incorporation by reference of this document in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for a copy of this service information. You may review copies at the FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal-register/cfr/ibr-locations.html.* Issued in Renton, Washington, on July 31, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-15419 Filed 8-8-07; 8:45 am] BILLING CODE 4910-13-P SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 275 [Release No. IA-2628; File No. S7-25-06] RIN 3235-AJ67 Prohibition of Fraud by Advisers to Certain Pooled Investment Vehicles AGENCY: Securities and Exchange Commission. ACTION: Final rule. SUMMARY: The Securities and Exchange Commission is adopting a new rule that prohibits advisers to pooled investment vehicles from making false or misleading statements to, or otherwise defrauding, investors or prospective investors in those pooled vehicles. This rule is designed to clarify, in light of a recent court opinion, the Commission's ability to bring enforcement actions under the Investment Advisers Act of 1940 against investment advisers who defraud investors or prospective investors in a hedge fund or other pooled investment vehicle. DATES: *Effective Date:* September 10, 2007. FOR FURTHER INFORMATION CONTACT: David W. Blass, Assistant Director, Daniel S. Kahl, Branch Chief, or Vivien Liu, Senior Counsel, at 202-551-6787, Division of Investment Management, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-5041. SUPPLEMENTARY INFORMATION: The Commission is adopting new rule 206(4)-8 under the Investment Advisers Act of 1940 (“Advisers Act”). 1 1 15 U.S.C. 80b. Unless otherwise noted, when we refer to the Advisers Act, or any paragraph of the Advisers Act, we are referring to 15 U.S.C. 80b of the United States Code, at which the Advisers Act is codified. I. Introduction On December 13, 2006, we proposed a new rule under the Advisers Act that would prohibit advisers to pooled investment vehicles from defrauding investors or prospective investors in pooled investment vehicles they advise. 2 We proposed the rule in response to the opinion of the Court of Appeals for the District of Columbia Circuit in *Goldstein* v. *SEC,* which created some uncertainty regarding the application of sections 206(1) and 206(2) of the Advisers Act in certain cases where investors in a pool are defrauded by an investment adviser to that pool. 3 In addressing the scope of the exemption from registration in section 203(b)(3) of the Advisers Act and the meaning of “client” as used in that section, the Court of Appeals expressed the view that, for purposes of sections 206(1) and
(2)of the Advisers Act, the “client” of an investment adviser managing a pool is the pool itself, not an investor in the pool. As a result, it was unclear whether the Commission could continue to rely on sections 206(1) and
(2)of the Advisers Act to bring enforcement actions in certain cases where investors in a pool are defrauded by an investment adviser to that pool. 4 2 *Prohibition of Fraud by Advisers to Certain Pooled Investment Vehicles; Accredited Investors in Certain Private Investment Vehicles* , Investment Advisers Act Release No. 2576 (Dec. 27, 2006) [72 FR 400 (Jan. 4, 2007)] (the “Proposing Release”). In the Proposing Release, we also proposed two new rules that would define the term “accredited natural person” under Regulation D and section 4(6) of the Securities Act of 1933 [15 U.S.C. 77d(6)] (“Securities Act”). As proposed, these rules would add to the existing definition of “accredited investor” and apply to private offerings of certain unregistered investment pools. On May 23, 2007, we voted to propose more general amendments to the definition of accredited investor. Proposed Modernization of Smaller Company Capital-Raising and Disclosure Requirements, Securities Act Release No. __ (__, 2007) [72 FR __ (__, 2007)]. We plan to defer consideration of our proposal to define the term accredited natural person until we have had the opportunity to evaluate fully the comments we received on that proposal together with those we receive on our May 2007 proposal. 3 451 F.3d 873 (D.C. Cir. 2006) (“Goldstein”). 4 Prior to the issuance of the *Goldstein* decision, we brought enforcement actions against advisers alleging false and misleading statements to investors under sections 206(1) and
(2)of the Advisers Act. *See, e.g., SEC* v. *Kirk S. Wright, International Management Associates, LLC* , Litigation Release No. 19581 (Feb. 28, 2006); *SEC* v. *Wood River Capital Management, LLC* , Litigation Release No. 19428 (Oct. 13, 2005); *SEC* v. *Samuel Israel III; Daniel E. Marino; Bayou Management, LLC; Bayou Accredited Fund, LLC; Bayou Affiliates Fund, LLC; Bayou No Leverage Fund, LLC; and Bayou Superfund, LLC* , Litigation Release No. 19406 (Sept. 29, 2005); *SEC* v. *Beacon Hill Asset Management LLC* , Litigation Release No. 18745A (June 16, 2004). In its opinion, the Court of Appeals distinguished sections 206(1) and
(2)from section 206(4) of the Advisers Act, which is not limited to conduct aimed at clients or prospective clients of investment advisers. 5 Section 206(4) provides us with rulemaking authority to define, and prescribe means reasonably designed to prevent, fraud by advisers. 6 We proposed rule 206(4)-8 under this authority. 5 *See Goldstein, supra* note 3, at note 6. *See also United States* v. *Elliott* , 62 F.3d 1304, 1311 (11th Cir. 1995). 6 Section 206(4) of the Advisers Act makes it unlawful for an investment adviser to “engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative” and authorizes us “by rules and regulations [to] define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.” We received 45 comment letters in response to our proposal. 7 Most commenters generally supported the proposal. Eighteen endorsed the rule as proposed, noting that the rule would strengthen the antifraud provisions of the Advisers Act or that the rule would clarify the Commission's enforcement authority with respect to advisers. 8 Others, however, urged that we make revisions that would restrict the scope of the rule to more narrowly define the conduct or acts it prohibits. 9 7 We received over 600 comment letters that addressed the proposed amendments to the term “accredited natural person” under Regulation D and section 4(6) of the Securities Act. All of the public comments we received are available for inspection in our Public Reference Room at 100 F Street, NE., Washington DC, 20549 in File No. S7-25-06, or may be viewed at *http://www.sec.gov/comments/s7-25-06/s72506.shtml.* 8 *E.g.* , Letter of the Alternative Investments Compliance Association (Mar. 5, 2007); Letter of the CFA Center for Financial Market Integrity (Mar. 9, 2007) (“CFA Center Letter”); Letter of the Coalition of Private Investment Companies (Mar. 9, 2007); Letter of the Commonwealth of Massachusetts (Mar. 9, 2007) (“Massachusetts Letter”); Letter of the Department of Banking of the State of Connecticut (Mar. 8, 2007); Letter of the North America Securities Administrators Association (Apr. 2, 2007) (“NASAA Letter”); and Letter of the U.S. Chamber of Commerce (Mar. 9, 2007). Another commenter observed that the proposed rules are broadly similar to current U.K. legislation and regulations. *See* Letter of Alternative Investment Management Association (Mar. 9, 2007) (“AIMA Letter”). 9 *E.g.* , Letter of American Bar Association (Mar. 12, 2007) (“ABA Letter”); Letter of Davis Polk & Wardwell (Mar. 9, 2007) (“Davis Polk Letter”); Letter of Dechert LLP (Mar. 8, 2007) (“Dechert Letter”); Letter of New York City Bar (Mar. 8, 2007) (“NYCB Letter”); Letter of Schulte Roth & Zabel LLP (Mar. 9, 2007) (“Schulte Roth Letter”); and Letter of Sullivan & Cromwell LLP (Mar. 9, 2007) (“Sullivan & Cromwell Letter”). Today, we are adopting new rule 206(4)-8 as proposed. The rule prohibits advisers from
(i)making false or misleading statements to investors or prospective investors in hedge funds and other pooled investment vehicles they advise, or
(ii)otherwise defrauding these investors. The rule clarifies that an adviser's duty to refrain from fraudulent conduct under the federal securities laws extends to the relationship with ultimate investors and that the Commission may bring enforcement actions under the Advisers Act against investment advisers who defraud investors or prospective investors in those pooled investment vehicles. II. Discussion Rule 206(4)-8 prohibits advisers to pooled investment vehicles from
(i)making false or misleading statements to investors or prospective investors in those pools or
(ii)otherwise defrauding those investors or prospective investors. We will enforce the rule through civil and administrative enforcement actions against advisers who violate it. Section 206(4) authorizes the Commission to adopt rules and regulations that “define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.” In adopting rule 206(4)-8, we intend to employ all of the broad authority that Congress provided us in section 206(4) and direct it at adviser conduct affecting an investor or potential investor in a pooled investment vehicle. A. Scope of Rule 206(4)-8 Some commenters questioned the scope of the rule, arguing that the Commission should define fraud. 10 We believe that we have done so, only more broadly than some commenters would have us do. As the Proposing Release indicated, our intent is to prohibit all fraud on investors in pools managed by investment advisers. Congress expected that we would use the authority provided by section 206(4) to “promulgate general antifraud rules capable of flexibility.” 11 The terms material false statements or omissions and “acts, practices, and courses of business as are fraudulent, deceptive, or manipulative” encompass the well-developed body of law under the antifraud provisions of the federal securities laws. The legal authorities identifying the types of acts, practices, and courses of business that are fraudulent, deceptive, or manipulative under the federal securities laws are numerous, and we believe that the conduct prohibited by rule 206(4)-8 is sufficiently clear and well understood. 12 10 *E.g.* , ABA Letter, *supra* note 9; Letter of Debevoise & Plimpton LLP (Mar. 14, 2007); and NYCB Letter, *supra* note 9. 11 S. Rep. No. 1760, 86th Cong., 2d. Sess. (June 28, 1960) at 4. *See* rule 206(4)-1(a)(5) [17 CFR. 275.206(4)-1(a)(5)] under the Advisers Act; rule 17j-1(b) [17 CFR 270.17j-1(b)] under the Investment Company Act of 1940 [15 U.S.C. 80a-1] (“Investment Company Act”); and rule 13e-3(b)(1) [17 CFR 240.13e-3(b)(1)] under the Securities Exchange Act of 1934 [15 U.S.C. 77a] (“Exchange Act”). 12 Loss, Seligman, & Paredes, *Securities Regulation* , Chap. 9 (Fraud) (Fourth Ed. 2006); Hazen, *Treatise on The Law of Securities Regulation* , Vol. 3, Ch. 12 (Manipulation and Fraud—Civil Liability; Implied Private Remedies; SEC Rule 10b-5; Fraud in Connection With the Purchase or Sale of Securities; Improper Trading on Nonpublic Material Information) (Fifth Ed. 2005). *See, e.g.* , Superintendent of Insurance of New York v. *Bankers Life & Casualty Co.* , 404 U.S. 6, 11 n. 7
(1971)(“ ‘We believe that section 10(b) and Rule 10b-5 prohibit all fraudulent schemes in connection with the purchase or sale of securities, whether the artifices employed involve a garden type variety of fraud, or present a unique form of deception. Novel or atypical methods should not provide immunity from the securities laws.' ” (quoting *A. T. Brod & Co.* v. *Perlow* , 375 F.2d 393, 397 (CA2 1967))); *Santa Fe Industries, Inc* . v. *Green* , 430 U.S. 462, 477
(1977)(“No doubt Congress meant to prohibit the full range of ingenious devices that might be used to manipulate securities prices.”). Moreover, the established legal principles are sufficiently flexible to encompass future novel factual scenarios. *United States* v. *Brown* , 555 F.2d 336, 339-40 (2d Cir. 1977) (“The fact that there is no litigated fact pattern precisely in point may constitute a tribute to the cupidity and ingenuity of the malefactors involved but hardly provides an escape from the penal sanctions of the securities fraud provisions here involved.”). 1. Investors and Prospective Investors Rule 206(4)-8 prohibits investment advisers from making false or misleading statements to, or engaging in other fraud on, investors or prospective investors in a pooled investment vehicle they manage. The scope of the rule is modeled on that of sections 206(1) and
(2)of the Advisers Act, which make unlawful fraud by advisers against clients or prospective clients. Rule 206(4)-8 prohibits false or misleading statements made, for example, to existing investors in account statements as well as to prospective investors in private placement memoranda, offering circulars, or responses to “requests for proposals,” electronic solicitations, and personal meetings arranged through capital introduction services. Some commenters argued that the rule should not prohibit fraud against prospective investors in a pooled investment vehicle, asserting that such fraud does not actually harm investors until they, in fact, make an investment. 13 We disagree. False or misleading statements and other frauds by advisers are no less objectionable when made in an attempt to draw in new investors than when made to existing investors. 14 For similar policy reasons that we believe led Congress to apply the protections of sections 206(1) and
(2)to prospective clients, we have decided to apply those of rule 206(4)-8 to prospective investors. 15 We believe that prohibiting false or misleading statements made to, or other fraud on, any prospective investors is a means reasonably designed to prevent fraud. 13 Davis Polk Letter, *supra* note 9; Dechert Letter, *supra* note 9; NYCB Letter, *supra* note 9; Letter of the Securities Industry and Financial Markets Association (Mar. 9, 2007); Sullivan & Cromwell Letter, *supra* note 9. 14 *See* CFA Center Letter, *supra* note 8. 15 We have used the term “prospective investor” to give the term similar scope to the term “prospective client” in sections 206(1) and (2). *See, e.g., In the Matter of Ralph Harold Seipel* , 38 S.E.C. 256, 257-58
(1958)(the solicitation of clients is part of the activity of an investment adviser and it is immaterial for purposes of an enforcement action under sections 206(1) and
(2)that an adviser engaging in fraudulent solicitations was not successful in his efforts to obtain clients). 2. Unregistered Investment Advisers Rule 206(4)-8 applies to both registered and unregistered investment advisers. 16 As we noted in the Proposing Release, many of our enforcement cases against advisers to pooled investment vehicles have been brought against advisers that are not registered under the Advisers Act, and we believe it is critical that we continue to be in a position to bring actions against unregistered advisers that manage pools and that defraud investors in those pools. 17 The two commenters that expressed an explicit view on this aspect of the proposal supported our application of the rule to advisers that are not registered with the Commission. 18 16 A few commenters requested that we clarify how we intend to apply rule 206(4)-8 to offshore advisers' interaction with non-U.S. investors. *See* AIMA Letter, *supra* note 8; Letter of Jones Day (Mar. 9, 2007); Sullivan & Cromwell Letter, *supra* note 9. Our adoption of this rule will not alter our jurisdictional authority. 17 Proposing Release, *supra* note 2, at note 14. 18 Massachusetts Letter, *supra* note 8; NASAA Letter, *supra* note 8. 3. Pooled Investment Vehicles The rule we are adopting today applies to investment advisers with respect to any “pooled investment vehicle” they advise. The rule defines a pooled investment vehicle 19 as any investment company defined in section 3(a) of the Investment Company Act 20 and any privately offered pooled investment vehicle that is excluded from the definition of investment company by reason of either section 3(c)(1) or 3(c)(7) of the Investment Company Act. 21 As a result, the rule applies to advisers to hedge funds, private equity funds, venture capital funds, and other types of privately offered pools that invest in securities, as well as advisers to investment companies that are registered with us. 22 19 Rule 206(4)-8(b). 20 15 U.S.C. 80a-3(a). Unless otherwise noted, when we refer to the Investment Company Act, or any paragraph of the Investment Company Act, we are referring to 15 U.S.C. 80a of the United States Code, at which the Company Act is codified. 21 Section 3(c)(1) of the Investment Company Act excludes from the definition of investment company an issuer the securities (other than short-term paper) of which are beneficially owned by not more than 100 persons and that is not making or proposing to make a public offering of its securities. Section 3(c)(7) of the Investment Company Act excludes from the definition of investment company an issuer the outstanding securities of which are owned exclusively by persons who, at the time of acquisition of such securities, are “qualified purchasers” and that is not making or proposing to make a public offering of its securities. “Qualified purchaser” is defined in section 2(a)(51) of the Investment Company Act generally to include a natural person (or a company owned by two or more related natural persons) who owns not less than $5,000,000 in investments; a person, acting for its own account or accounts of other qualified purchasers, who owns and invests on a discretionary basis, not less than $25,000,000; and a trust whose trustee, and each of its settlors, is a qualified purchaser. 22 We have brought enforcement actions under the Advisers Act against advisers to these types of funds. *See, e.g., In the Matter of Askin Capital Management, L.P and David J. Askin* , Investment Advisers Act Release No. 1492 (May 23, 1995) (hedge fund); *In the Matter of Thayer Capital Partners* , Investment Advisers Act Release No. 2276 (Aug. 12, 2004) (private equity fund); *SEC* v. *Michael A. Liberty* , Litigation Release No. 19601 (Mar. 8, 2006) (venture capital fund). Several commenters supported applying the protection of the new antifraud rule to investors in all these kinds of pooled investment vehicles, noting, for example, that every investor, not just the wealthy or sophisticated that typically invest in private pools, should be protected from fraud. 23 Some other commenters urged us not to apply the rule to advisers to registered investment companies, arguing that the rule is unnecessary because other provisions of the federal securities laws prohibiting fraud are available to the Commission to address these matters. 24 They expressed concern that application of another antifraud provision with different elements would be burdensome. These commenters claimed that the rule would, for example, make it necessary for advisers to conduct extensive reviews of all communications with clients. But the other antifraud provisions available to us contain different elements because they were not specifically designed to address frauds by investment advisers with respect to investors in pooled investment vehicles. In some cases, the other antifraud provisions may not permit us to proceed against the adviser. 25 As a result, the existing antifraud provisions may not be available to us in all cases. As we discussed above, before the *Goldstein* decision we had brought actions against advisers to mutual funds under sections 206(1) and
(2)for defrauding investors in mutual funds. 26 Because, before the *Goldstein* decision, advisers to pooled investment vehicles operated with the understanding that the Advisers Act prohibited the conduct that this rule prohibits, we believe that advisers that are attentive to their traditional compliance responsibilities will not need to alter their business practices or take additional steps and incur new costs as a result of this rule's adoption. 23 *E.g.* , NASAA Letter, *supra* note 8. 24 *E.g.* , ABA Letter, *supra* note 9; Letter of Investment Adviser Association (Mar. 9, 2007); Letter of Investment Company Institute (Mar. 9, 2007) (“ICI Letter”); Sullivan & Cromwell Letter, *supra* note 9. Commenters noted in particular that section 34(b) of the Investment Company Act already prohibits an adviser from making fraudulent material statements or omissions in a fund's registration statement or in required records. 25 This may be the case with respect to section 34(b) of the Investment Company Act, for example, if the adviser's fraudulent statements are not made in a document described in that section, or with respect to rule 10b-5 under the Exchange Act, where the fraudulent conduct does not relate to a misstatement or omission in connection with the purchase or sale of any security. 26 *See, e.g., In the Matter of Van Kampen Investment Advisory Corp.* , Investment Advisers Act Release No. 1819 (Sept. 8, 1999); *In the Matter of The Dreyfus Corporation* , Investment Advisers Act Release No. 1870 (May 10, 2000); *In the Matter of Federated Investment Management Company* , Investment Advisers Act Release No. 2448 (Nov. 28, 2005). B. Prohibition on False or Misleading Statements Rule 206(4)-8(a)(1) prohibits any investment adviser to a pooled investment vehicle from making an untrue statement of a material fact to any investor or prospective investor in the pooled investment vehicle, or omitting to state a material fact necessary in order to make the statements made to any investor or prospective investor in the pooled investment vehicle, in the light of the circumstances under which they were made, not misleading. 27 27 A fact is material if there is a substantial likelihood that a reasonable investor in making an investment decision would consider it as having significantly altered the total mix of information available. *Basic, Inc* . v. *Levinson* , 485 U.S. 224, 231-32 (1988); *TSC Industries, Inc* . v. *Northway, Inc.* , 426 U.S. 438, 449 (1976). *See also In the Matter of Van Kampen Investment Advisory Corp., supra* note 26; *In the Matter of the Dreyfus Corporation, supra* note 26. The provision is very similar to those in many of our antifraud laws and rules that, depending upon the circumstances, may also be applicable to the same investor communications. 28 Sections 206(1) and
(2)have imposed similar obligations on advisers since 1940 and, before *Goldstein* , were commonly accepted as imposing similar requirements on communications with investors in a fund. For these reasons, and because the nature of the duty to communicate without false statements is so well developed in current law, we believe that commenters' concerns about the breadth of the prohibition or any chilling effect the new rule might have on investor communications are misplaced. 29 Advisers to pooled investment vehicles attentive to their traditional compliance responsibilities will not need to alter their communications with investors. 28 *See, e.g.* , sections 12 and 17 of the Securities Act [15 U.S.C. 77l, 77q]; section 14 of the Exchange Act [15 U.S.C. 78n]; section 34 of the Investment Company Act; rules 156, 159, and 610 under the Securities Act [17 CFR 230.156, 230.159, 230.610]; rules 10b-5, 13e-3, 13e-4, and 15c1-2 under the Exchange Act [17 CFR 240.10b-5, 240.13e-3, 240.13e-4, 240.15c1-2]; and rule 17j-1 under the Investment Company Act [17 CFR 270.17j-1]). 29 Letter of Managed Funds Association (Mar. 9, 2007) (“MFA Letter”); NYCB Letter, *supra* note 9; Davis Polk Letter, *supra* note 9; Dechert Letter, *supra* note 9; Letter of Seward & Kissel LLP (Mar. 8, 2007) (“Seward & Kissel Letter”). Rule 206(4)-8(a)(1) prohibits advisers to pooled investment vehicles from making any materially false or misleading statements to investors in the pool regardless of whether the pool is offering, selling, or redeeming securities. While the new rule differs in this aspect from rule 10b-5 under the Exchange Act, the conduct prohibited is similar. The new rule prohibits, for example, materially false or misleading statements regarding investment strategies the pooled investment vehicle will pursue, the experience and credentials of the adviser (or its associated persons), the risks associated with an investment in the pool, the performance of the pool or other funds advised by the adviser, the valuation of the pool or investor accounts in it, and practices the adviser follows in the operation of its advisory business such as how the adviser allocates investment opportunities. 30 30 We have previously brought enforcement actions alleging these or similar types of frauds. *See* Proposing Release, *supra* note 2, at note 29. C. Prohibition of Other Frauds Rule 206(4)-8(a)(2) makes it a fraudulent, deceptive, or manipulative act, practice, or course of business for any investment adviser to a pooled investment vehicle to “otherwise engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in the pooled investment vehicle.” 31 As we noted in the Proposing Release, the wording of this provision is drawn from the first sentence of section 206(4) and is designed to apply more broadly to deceptive conduct that may not involve statements. 32 31 Rule 206(4)-8(a)(2). 32 *See* Section II.C of the Proposing Release, *supra* note 2. Some commenters asserted that section 206(4) provides us authority only to adopt prophylactic rules that explicitly identify conduct that would be fraudulent under the new rule. 33 We believe our authority is broader. We do not believe that the commenters' suggested approach would be consistent with the purposes of the Advisers Act or the protection of investors. That approach would have us adopt the rule prohibiting fraudulent communications but not fraudulent conduct. 34 But, section 206(4) itself specifically authorizes us to adopt rules defining and prescribing “acts, practices and courses of business,” ( *i.e.* , conduct), and does not explicitly refer to communications, which, nonetheless, represent a form of an act, practice, or course of business. In addition, rule 206(4)-8 as adopted would provide greater protection to investors in pooled investment vehicles. 33 ABA Letter, *supra* note 9; ICI Letter, *supra* note 24; Schulte Roth Letter, *supra* note 9; Sullivan & Cromwell Letter, *supra* note 9. 34 *See, e.g.* , ABA Letter, *supra* note 9. Alternatively, commenters would have us adopt a rule prohibiting identified known fraudulent conduct or would have us provide detailed commentary describing specific forms of fraudulent conduct that the rule would prohibit. 35 Either approach would fail to prohibit fraudulent conduct we did not identify, and could provide a roadmap for those wishing to engage in fraudulent conduct. This approach would be inconsistent with our historical application of the federal securities laws under which broad prohibitions have been applied against specific harmful activity. 35 *Id* . D. Other Matters We noted in the Proposing Release that, unlike violations of rule 10b-5 under the Exchange Act, the Commission would not need to demonstrate that an adviser violating rule 206(4)-8 acted with scienter. 36 Commenters questioned whether the rule should encompass negligent conduct, arguing that it would “expand the concept of fraud itself beyond its original meaning.” 37 We read the language of section 206(4) as not by its terms limited to knowing or deliberate conduct. For example, section 206(4) encompasses “acts, practices, and courses of business as are * * * deceptive,” thereby reaching conduct that is negligently deceptive as well as conduct that is recklessly or deliberately deceptive. In addition, the Court of Appeals for the District of Columbia Circuit concluded that “scienter is not required under section 206(4).” 38 We believe use of a negligence standard also is appropriate as a method reasonably designed to prevent fraud. As the Supreme Court noted in *U.S.* v. *O'Hagan* , “[a] prophylactic measure, because its mission is to prevent, typically encompasses more than the core activity prohibited.” 39 In *O'Hagan* , the Court held that under section 14(e) “the Commission may prohibit acts, not themselves fraudulent under the common law or § 10(b), if the prohibition is ‘reasonably designed to prevent * * * acts and practices [that] are fraudulent.' ” 40 Along these lines, the prohibitions in rule 206(4)-8 are reasonably designed to prevent fraud. We believe that, by taking sufficient care to avoid negligent conduct, advisers will be more likely to avoid reckless deception. Since the Commission clearly is authorized to prescribe conduct that goes beyond fraud as a means reasonably designed to prevent fraud, prohibiting deceptive conduct done negligently is a way to accomplish this objective. 36 Section II.B of the Proposing Release, *supra* note 2. 37 *See* ABA Letter, *supra* note 9 at page 3. 38 *SEC* v. *Steadman* , 967 F.2d 636, at 647 (D.C. Cir. 1992). The court in *Steadman* analogized section 206(4) of the Advisers Act to section 17(a)(3) of the Securities Act, which the Supreme Court had held did not require a finding of scienter, *id* . (citing *Aaron* v. *SEC* , 446 U.S. 680 (1980)). In discussing section 17(a)(3) and its lack of a scienter requirement, the *Steadman* court observed that, similarly, a violation of section 206(2) of the Advisers Act could rest on a finding of simple negligence. *Id* . at 643, note 5. *But see Aaron* at 690-91 (citing *Ernst & Ernst* v. *Hochfelder* , 425 U.S. 185, 199 (1976)); *cf* . S. Rep. No. 1760, 86th Cong., 2d. Sess. (June 28, 1960) at 8 and H. R. Rep. 2179, 86th Cong., 2d Sess. (Aug. 26, 1960) at 8 (comparing section 206(4) to section 15(c)(2) of the Exchange Act). 39 *U.S.* v. *O'Hagan* , 521 U.S. 642, 672-73 (1997). 40 *Id.* at 673. Rule 206(4)-8 does not create under the Advisers Act a fiduciary duty to investors or prospective investors in a pooled investment vehicle not otherwise imposed by law. Nor does the rule alter any duty or obligation an adviser has under the Advisers Act, any other federal law or regulation, or any state law or regulation (including state securities laws) to investors in a pooled investment vehicle it advises. 41 The rule, for example, will permit us to bring an enforcement action against an investment adviser that violates a fiduciary duty imposed by other law if the violation of such law or obligation also constitutes an act, practice, or course of business that is fraudulent, deceptive, or manipulative within the meaning of the rule and section 206(4). 42 41 For example, under the Uniform Limited Partnership Act, advisers who serve as general partners owe fiduciary duties to the limited partners. Unif. Limited Partnership Act section 408 (2001). 42 For example, if an adviser has a duty from a source other than the rule to make a material disclosure to an investor in a fund and negligently or deliberately fails to make the disclosure, the rule would apply to the failure. Finally, the rule does not create a private right of action. 43 43 The Supreme Court has held that “there exists a limited private remedy under the Investment Advisers Act of 1940 to void an investment adviser's contract, but that the Act confers no other private causes of action, legal or equitable.” *Transamerica Mortgage Advisors, Inc.* v. *Lewis* , 444 U.S. 11 at 24
(1979)(footnote omitted). III. Paperwork Reduction Act The Paperwork Reduction Act of 1995 does not apply because rule 206(4)-8 does not impose a new “collection of information” within the meaning of the Paperwork Reduction Act of 1995. The rule does not create any filing, reporting, recordkeeping, or disclosure requirements for investment advisers subject to the rule. Accordingly, there is no “collection of information” under the Paperwork Reduction Act that requires the approval of the Office of Management and Budget under 44 U.S.C. 3501. IV. Cost-Benefit Analysis The Commission is sensitive to costs imposed by our rules and the benefits that derive from them. In the Proposing Release, we encouraged commenters to discuss any potential costs and benefits that we did not consider in our discussion. Three commenters addressed the issue of cost. Two of them stated their belief that the rule would increase advisers' costs of compliance, by, for example, making it necessary for advisers to conduct extensive reviews of all communications with clients. 44 One stated that the rule would achieve a reasonable balance of providing important benefits to investors at an acceptable cost. 45 None of the three commenters, however, provided analysis or empirical data in connection with their statements. 44 NYCB Letter, *supra* note 9; Seward & Kissel Letter, *supra* note 29. 45 CFA Center Letter, *supra* note 8. The rule makes it a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) for any investment adviser to a pooled investment vehicle to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, to any investor or prospective investor in the pooled investment vehicle. The rule also makes it a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) for any investment adviser to a pooled investment vehicle to otherwise engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in the pooled investment vehicle. For the reasons discussed, we do not believe that the rule will require advisers to incur new or additional costs. Investment advisers to pooled investment vehicles should not be making untrue statements or omitting material facts or otherwise be engaged in fraud with respect to investors or prospective investors in pooled investment vehicles today, because federal authorities, state authorities, and private litigants often can, and do, seek redress from the adviser for the untrue statements or omissions or other frauds. In most cases, the conduct that the rule prohibits is already prohibited by federal securities statutes, 46 other federal statutes (including federal wire fraud statutes), 47 as well as state law. 48 46 *See, e.g.* , section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and section 17(a) of the Securities Act [15 U.S.C. 77q] which would apply when the false statements are made “in connection with the purchase or sale of a security” or involve the “offer or sale” of a security, and section 34(b) of the Investment Company Act which makes it unlawful “to make any untrue statement of a material fact in any registration statement, application, report, account, record, or other document filed or transmitted pursuant to [the Investment Company Act] * * *.” 47 *See, e.g.* , 18 U.S.C. 1341 (Frauds and Swindles) and 18 U.S.C. 1343 (Fraud by wire, radio, or television) which make it a criminal offense to use the mails or to communicate by means of wire, having devised a scheme to defraud or for obtaining money or property by means of false or fraudulent pretenses, and 18 U.S.C. 1957 (Engaging in monetary transactions in property derived from specified unlawful activity) which makes it a criminal racketeering offense to engage or attempt to engage in a transaction in criminally derived property of a value greater than $10,000. 48 *See, e.g., Metro Communications Corp. BVI* v. *Advanced Mobilecomm Technologies* , 854 A.2d 121, 156 (Del. Ch. 2004) (court held that plaintiff-former member of LLC had sufficiently alleged a common law fraud claim based on the allegation that a series of reports by LLC's managers contained misleading statements; court stated that “[i]n the usual fraud case, the speaking party who is subject to an accusation of fraud is on the opposite side of a commercial transaction from the plaintiff, who alleges that but for the material misstatements or omissions of the speaking party he would not have contracted with the speaking party”). We recognize that there are costs involved in assuring that communications to investors and prospective investors do not contain untrue or misleading statements and preventing other frauds. Advisers have incurred, and will continue to incur, these costs due to the prohibitions and deterrent effect of the law and rules that apply under these circumstances. While each of the provisions noted above may have different limitation periods, apply in different factual circumstances, or require the government (or a private litigant) to prove different states of mind than the rule, as discussed above we believe that the multiple prohibitions against fraud, and the consequences under both criminal and civil law for fraud, should currently cause an adviser to take the precautions it deems necessary to refrain from such conduct. Furthermore, prior to *Goldstein* , advisers operated with the understanding that the Advisers Act prohibited the same conduct that would be prohibited by the rule. Accordingly, we do not believe that advisers to pooled investment vehicles attentive to their traditional compliance responsibilities will need to take steps or alter their business practices in such a way that will require them to incur new or additional costs as a result of the adoption of the rule. We also recognize that the rule may cause some advisers to pay more attention to the information they present to better guard against making an untrue or misleading statement to an investor or prospective investor and to reevaluate measures that are intended to prevent fraud. As a consequence, some advisers might seek guidance, legal or otherwise, and more closely review the information that they disseminate to investors and prospective investors and the antifraud related policies and procedures they have implemented. While increased concern about making false statements or committing fraud could be attributable to the new rule, advisers should already be incurring these costs to ensure truthfulness and prevent fraud, regardless of the rule, because of the myriad of laws or regulations that may already apply. The principal benefit of the rule is that it clearly enables the Commission to bring enforcement actions under the Advisers Act, if an adviser to a pooled investment vehicle disseminates false or misleading information to investors or prospective investors or otherwise commits fraud with respect to any investor or prospective investor. As noted above, the existing antifraud provisions may not be available to us in all cases. Through our enforcement actions we are able to protect fund investor assets by stopping ongoing frauds, 49 barring persons that have committed certain specified violations or offenses from being associated with an investment adviser, 50 imposing penalties, 51 seeking court orders to protect fund assets, 52 and to order disgorgement of ill-gotten gains. 53 Moreover, we believe that rule 206(4)-8 will deter advisers to pooled investment vehicles from engaging in fraudulent conduct with respect to investors in those pools and will provide investors with greater confidence when investing in pooled investment vehicles. 49 *See* section 203(k) of the Advisers Act (Commission authority to issue cease and desist orders). 50 *See* section 203(f) of the Advisers Act (Commission authority to bar a person from being associated with an investment adviser). 51 *See* section 203(i) of the Advisers Act (Commission authority to impose civil penalties). 52 *See* section 209(d) of the Advisers Act (Commission authority to seek injunctions and restraining orders in federal court). 53 *See* section 203(j) of the Advisers Act (Commission authority to order disgorgement). V. Regulatory Flexibility Act Analysis The Commission certified, pursuant to section 605(b) of the Regulatory Flexibility Act, that rule 206(4)-8 will not have a significant economic impact on a substantial number of small entities. 54 This certification was included in the Proposing Release. 55 While we encouraged written comment regarding this certification, none of the commenters responded to this request. 54 5 U.S.C. 605(b). 55 Section VII.A of the Proposing Release, *supra* note 2. VI. Statutory Authority We are adopting new rule 206(4)-8 pursuant to our authority set forth in sections 206(4) and 211(a) of the Advisers Act (15 U.S.C. 80b-6(4) and 80b-11(a)). List of Subjects in 17 CFR Part 275 Reporting and recordkeeping requirements, Securities. VII. Text of Rules For the reasons set out in the preamble, Title 17, Chapter II of the Code of Federal Regulations is amended as follows: PART 275—RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 1. The authority citation for Part 275 continues to read in part as follows: Authority: 15 U.S.C. 80b-2(a)(11)(F), 80b-2(a)(17), 80b-3, 80b-4, 80b-4a, 80b-6(4), 80b-6a, and 80b-11, unless otherwise noted. 2. Section 275.206(4)-8 is added to read as follows: § 206(4)-8 Pooled investment vehicles.
(a)*Prohibition.* It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Act (15 U.S.C. 80b-6(4)) for any investment adviser to a pooled investment vehicle to:
(1)Make any untrue statement of a material fact or to omit to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading, to any investor or prospective investor in the pooled investment vehicle; or
(2)Otherwise engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in the pooled investment vehicle.
(b)*Definition.* For purposes of this section “pooled investment vehicle” means any investment company as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(a)) or any company that would be an investment company under section 3(a) of that Act but for the exclusion provided from that definition by either section 3(c)(1) or section 3(c)(7) of that Act (15 U.S.C. 80a-3(c)(1) or (7)). Dated: August 3, 2007. By the Commission. Nancy M. Morris, Secretary. Concurrence of Commissioner Paul S. Atkins to the Prohibition of Fraud by Advisers to Certain Pooled Investment Vehicles New Rule 206(4)-8 under the Investment Advisers Act of 1940 (“Advisers Act”), 56 which we adopt today, prohibits advisors from
(i)making false or misleading statements to investors or prospective investors in hedge funds and other pooled investment vehicles they advise, or
(ii)otherwise defrauding these investors. 57 Although the SEC has other ways to reach fraud by advisors, this new rule will fill in gaps in the coverage of other transaction-based, anti-fraud provisions so that the SEC may pursue advisors of pooled investment vehicles who have defrauded investors and prospective investors in the course of their acting as fund advisors. I support the new rule, but I am writing separately to express my disagreement with the conclusions in the Adopting Release 58 related to the requisite mental state for violation of the rule. 59 56 15 U.S.C. 80b. 57 17 CFR 275.206(4)-8. Paragraph
(a)of the new rule provides: *Prohibition.* It shall constitute a fraudulent, deceptive, or manipulative act, practice or course of business within the meaning of section 206(4) of the Act (15 U.S.C. 80b-6(4)) for any investment adviser to a pooled investment vehicle to:
(1)Make any untrue statement of a material fact or to omit to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading, to any investor or prospective investor in the pooled investment vehicle; or
(2)Otherwise engage in any act, practice, or course of business that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in the pooled investment vehicle. Paragraph
(b)of the rule defines a “pooled investment vehicle” to include any investment company and any company that relies on an exclusion from the definition of “investment company” in Section (3)(c)(1) or (3)(c)(7) of the Investment Company Act [15 U.S.C. 80a-3(c)(1) or (7))]. 58 Prohibition of Fraud by Advisers to Certain Pooled Investment Vehicles, Advisers Act Release No. 2628 (Aug. 3, 2007) (“Adopting Release”). 59 *See* Section II.D of the Adopting Release. I agree with the Section's conclusions with respect to fiduciary duty (Rule 206(4)-8 does not create a fiduciary duty) and private rights of action (Rule 206(4)-8 does not create any private rights of action). In discussing the mental state required for violation of the rule, the Adopting Release states that “the Commission would not need to demonstrate that an adviser violating rule 206(4)-8 acted with scienter.” 60 According to the Adopting Release, therefore, the rule covers negligent conduct as well as intentional conduct. My objections to this interpretation of the rule's scope are twofold. First, I do not believe that a negligence standard is consistent with the Commission's authority under Section 206(4). Second, even if a negligence standard were within our authority, for policy reasons, we should require a finding of scienter 61 as part of establishing a violation under this anti-fraud rule. 60 Adopting Release, at text accompanying note 36. 61 “Scienter” is “a mental state embracing intent to deceive, manipulate, or defraud.” *Ernst & Ernst* v. *Hochfelder,* 425 U.S. 185, 194 (1976). Recklessness has also been found to satisfy a scienter standard. The Adopting Release offers several arguments in support of a negligence standard. First, it argues that the language of section 206(4) is not limited to knowing or deliberate conduct. In support of this argument, it cites the decision by the United States Court of Appeals for the District of Columbia Circuit in *SEC* v. *Steadman.* 62 Second, the Adopting Release contends that use of a negligence standard is an appropriate method reasonably designed to prevent fraud. In support of this contention, it cites *U.S* . v. *O'Hagan.* 63 I will discuss each of these in turn. 62 *SEC* v. *Steadman,* 967 F.2d 636 (D.C. Cir. 1992). 63 *U.S.* v. *O'Hagan,* 521 U.S. 642, 672-73 (1997). The language of Section 206(4) does not reach negligent conduct. Section 206(4) makes it unlawful for an advisor “to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative” and directs the Commission “by rules and regulations [to] define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.” The Adopting Release maintains that, because Section 206(4) “encompasses ‘acts, practices, and courses of business as are * * * deceptive,’ ” it reaches “conduct that is negligently deceptive as well as conduct that is recklessly or deliberately deceptive.” 64 As the Supreme Court has said, however, “it is a ‘familiar principle of statutory construction that words grouped in a list should be given related meaning.’ ” 65 Hence, it is inappropriate to base a conclusion that negligent conduct is reached by looking at the term “deceptive” apart from its companion terms. 64 Adopting Release at Section II.D. 65 *Schreiber* v. *Burlington Northern, Inc.* 472 U.S. 1, 8
(1985)(quoting *Securities Industry Assn.* v. *Board of Governors, FRS,* 468 U.S. 207, 218 (1984). In the Section 10(b) context, the Supreme Court has accorded special significance to the term “manipulative”: Use of the word “manipulative” is especially significant. It is and was virtually a term of art when used in connection with securities markets. It connotes intentional or willful conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities. 66 66 *Hochfelder,* 425 U.S. at 199 (footnote to dictionary definition omitted). *Hochfelder* considered whether scienter was a necessary component of a private action under Section 10(b). In a subsequent case, the Court considered whether scienter was a necessary element of an injunctive action by the SEC and concluded that it was. *Aaron* v. *SEC,* 446 U.S. 680, 691
(1980)(“the rationale of *Hochfelder* ineluctably leads to the conclusion that scienter is an element of a violation of section 10(b) and Rule 10b-5, regardless of the identity of the plaintiff or the nature of the relief sought.”). The language of Section 206(4), like the language of Section 10(b), would seem then to suggest a scienter requirement. The Adopting Release, however, cites for the contrary conclusion a decision by the United States Court of Appeals for the District of Columbia. Indeed, it is true that in *SEC* v. *Steadman* , the court held that “scienter is not required under section 206(4).” 67 The court reached its conclusion by comparing the language of Section 206(4) to the language of Section 17(a)(3) under the Securities Act of 1933, 68 which makes it unlawful “to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.” 69 The *Steadman* court drew a comparison between Section 17(a)(3)'s “transaction, practice, or course of business” and Section 206(4)'s “act, practice, or course of business.” The court, relying on the Supreme Court's decision in *Aaron* , held that, in both cases, the focus was on effect. 70 The Supreme Court in *Aaron* , however, placed considerable weight on the terms “operate” or “would operate,” neither of which appears in Section 206(4). 71 In fact, Section 206(4) instead uses the affirmative word “is,” which would seem to de-emphasize effect. 72 Further, while Section 17(a)(3) speaks of only “fraud” and “deceit,” Section 206(4) also includes “manipulative.” 67 *Steadman,* 967 F.2d at 647. 68 15 U.S.C. 77a *et seq.* 69 15 U.S.C. 77q(a)(3). 70 *Steadman* at 647. 71 *Aaron,* 446 U.S. at 696-97 (“the language of section 17(a)(3), under which it is unlawful for any person to `engage in any transaction, practice, or course of business which *operates* or *would operate* as a fraud or deceit,' quite plainly focuses upon the *effect* of particular conduct * * * rather than upon the culpability of the person responsible.”) (emphasis in original). 72 Section 206(4) makes it unlawful “to engage in any act, practice, or course of business which *is* fraudulent, deceptive, or manipulative.” (Emphasis added.) It is also helpful to note that Section 206(4), which was adopted in 1960, 73 was modeled on Section 15(c)(2) under the Securities Exchange Act of 1934. 74 Section 15(c)(2) makes it unlawful for brokers and dealers to effect transactions in or induce the purchase or sale of securities in connection with which they “engage[] in any fraudulent, deceptive, or manipulative act or practices, or make[] any fictitious quotation.” 75 Hence, as the legislative history of Section 206(4) noted, Section 206(4) “is comparable to section 15(c)(2).” 76 The *Steadman* opinion did not address the link between Sections 206(4) and 15(c)(2). 73 S. Rep. No. 86-1760, at 4
(1960)(“The proposal has precedent in similar authority granted to the SEC over brokers and dealers by the Securities Exchange Act of 1934.”). 74 15 U.S.C. 78a *et seq.* 75 15 U.S.C. 78o(c)(2). 76 H.R. Rep. No. 86-2179, at 8 (1960). *See also* S. Rep. No. 86-1760, at 8
(1960)(“almost the identical wording of section 15(c)(2)”). Section 14(e) under the Exchange Act, which relates to tender offers, also follows the Section 15(c)(2) pattern. 77 Section 14(e), like Section 206(4), includes both a proscription against “engag[ing] in any fraudulent, deceptive, or manipulative acts or practices” and a directive that the SEC “by rules and regulations define, and prescribe means reasonably designed to prevent such acts and practices as are fraudulent, deceptive, or manipulative.” Because of the similarities, it is useful to look at the Supreme Court's interpretation of Section 14(e). In *Schreiber* v. *Burlington Northern,* the Supreme Court relied on *Hochfelder's* interpretation of the term “manipulative” in the Section 10(b) context to interpret that term in the Section 14(e) context. 78 The *Schreiber Court* noted that the addition of the rulemaking authorization to Section 14(e) did not “suggest[] any change in the meaning of `manipulative' itself.” 79 In *U.S.* v. *O'Hagan,* The Supreme Court again looked at Section 14(e). This time, it considered whether Rule 14e-3(a), which prohibits trading on undisclosed information in connection with a tender offer, exceeds the SEC's authority under Section 14(e) given that the prohibition applies regardless of whether there is a duty to disclose. The Court held that Rule 14e-3(a) was within the SEC's authority under Section 14(e) because Section 14(e) allows the SEC to “prohibit acts, not themselves fraudulent under the common law or § 10(b), if the prohibition is ‘reasonably designed to prevent * * * acts and practices [that] are fraudulent.’ ” 80 The lesson from both of these cases is that the SEC cannot effect a change in the meaning of specific statutory terms under its comparable Section 206(4) rulemaking authority. 77 15 U.S.C. 78n(e). 78 *Schreiber,* 472 U.S. at 12 (“We hold that the term, `manipulative' as used in § 14(e) requires misrepresentation or nondisclosure. It connotes `conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities.”) (citing *Hochfelder,* 425 U.S. at 199). 79 *Id.* at 12 n.11. 80 *O'Hagan,* 521 U.S. at 672-73. The Adopting Release asserts that, under *O'Hagan,* a negligence standard is a means reasonably designed to prevent fraud. As the Adopting Release notes, conduct outside of the bounds of the statutory prohibition can be prohibited by Commission rule under Section 206(4). The rule that we are adopting here, however, differs markedly from the rules at issue in *O'Hagan* and *Steadman.* 81 Both of those rules were narrowly targeted rules that covered clearly-defined behavior. They were designed to prohibit conduct, that, although outside of the “core activity prohibited” by the statute, were designed to “assure the efficacy” of the statute. 82 81 *O'Hagan* dealt with Rule 14e-3(a), which governed trading on non-public, material information in connection with a tender offer. *Steadman* dealt with Rule 206(4)-2, the investment advisor custody rule. 82 *O'Hagan,* 521 U.S. at 673-74. Rule 206(4)-8(a)(2), by contrast, is as broad as the statute itself. It essentially repeats the statutory prohibition. It does not logically follow, therefore, that lowering the standard of care would be the type of “means reasonably designed to prevent” within the contemplation of the regulatory mandate within Section 206(4). Lowering the standard of care is instead an attempt to rewrite the statute by assigning new definitions to the words of the statute. A potential unfortunate consequence of the Adopting Release's change in mental state is that it is now arguably contrary to statute and therefore might interfere with the SEC's ability to use the rule effectively. 83 Congress included a rulemaking directive in order to give the SEC the necessary authority to provide clarity in this area about the types of practices covered by the statute's broad prohibition, 84 not to alter the standard of care that Congress selected through the language it used. 85 Imposing a negligence standard is particularly improper given that, as the Adopting Release notes, “Rule 206(4)-8 does not create under the Advisers Act a fiduciary duty to investors and prospective investors in a pooled investment vehicle.” 86 83 *See Chevron U.S.A. Inc.* v. *Natural Resources Defense Council, Inc.* , 467 U.S. 837, 844 (1984). The Adopting Release states: “Since the Commission is clearly authorized to prescribe [sic] conduct that goes beyond fraud as a means reasonably designed to prevent fraud, prohibiting deceptive conduct done negligently is a way to accomplish this objective.” Adopting Release at Section II.D. This does not answer the question, however, of whether “fraudulent, deceptive, or manipulative” conduct can arise from negligent acts. 84 Up until now under Section 206(4), we have done exactly this. We have adopted rules covering advertisements [17 CFR 275.206(4)-1], custody of client funds and securities [17 CFR 275.206(4)-2], cash payments for client solicitations [17 CFR 275.206(4)-3], disclosure of financial and disciplinary information [17 CFR 275.206(4)-4], proxy voting [17 CFR 275.206(4)-6], and compliance procedures [17 CFR 275.206(4)-7]. 85 *See* H.R. Rep. No. 2179 at 7
(1960)(identifying as the “problem” that Section 206(4) was intended to remedy: “there has always been a question as to the scope of the fraudulent and deceptive activities which are prohibited and the extent to which the Commission is limited in this area by common law concepts of fraud and deceit.”). 86 Adopting Release at Section II.D. Finally, from a purely practical perspective, I dispute the regulatory approach underlying the contention that “by taking sufficient care to avoid negligent conduct, advisers will be more likely to avoid reckless deception.” 87 By an extension of that same logic, a strict liability standard would evoke even more care by advisors. Even if the SEC is authorized to pick the standard of care that applies broadly to all “fraudulent, deceptive, or manipulative” acts and practices, arbitrarily selecting a higher standard of care “just to be on the safe side” has the potential of misdirecting enforcement and inspection resources and chilling well-intentioned advisors from serving their investors. 87 Adopting Release at Section II.D. [FR Doc. E7-15531 Filed 8-8-07; 8:45 am] BILLING CODE 8010-01-P SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404 and 416 [Docket No. SSA 2007-0036] RIN 0960-AG49 Amendment to the Attorney Advisor Program AGENCY: Social Security Administration. ACTION: Interim final rule with request for comments. SUMMARY: We are announcing this interim final rule to modify, on a temporary basis, the prehearing procedures we follow in claims for Social Security disability benefits or supplemental security income
(SSI)payments based on disability or blindness. Under the interim final rule, we may allow certain attorney advisors, under managerial oversight, to conduct certain prehearing proceedings, and where the documentary record developed as a result of these proceedings warrants, issue decisions that are wholly favorable to the parties to the hearing. DATES: *Effective date:* This rule is effective August 9, 2007. *Comment date:* To be sure that your comments are considered, we must receive them no later than October 9, 2007. ADDRESSES: You may give us your comments by: Internet through the Federal eRulemaking Portal at *http://www.regulations.gov* ; e-mail to *regulations@ssa.gov* ; telefax to
(410)966-2830; or letter to the Commissioner of Social Security, P.O. Box 17703, Baltimore, MD 21235-7703. You may also deliver them to the Office of Regulations, Social Security Administration, 107 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, between 8 a.m. and 4:30 p.m. on regular business days. Comments are posted on the Federal eRulemaking Portal, or you may inspect them on regular business days by making arrangements with the contact person shown in this preamble. FOR FURTHER INFORMATION CONTACT: Marilyn Hull, Social Security Administration, 5107 Leesburg Pike, Falls Church, VA 22041-3260, 703-605-8500 for information about this notice. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at *http://www.socialsecurity.gov* . SUPPLEMENTARY INFORMATION: Electronic Version The electronic file of this document is available on the date of publication in the **Federal Register** at *http://www.gpoaccess.gov/fr/index.html* . Explanation of Changes We are dedicated to providing high-quality service to the American public. Today and for the foreseeable future, we face significant challenges in our ability to provide the level of service that disability benefit claimants deserve because of the significantly increased number and complexity of these benefit claims. Consequently, we are publishing a temporary modification to the procedures we follow in the administrative law judge
(ALJ)hearings process in claims for Social Security disability benefits or SSI payments based on disability or blindness. This temporary modification will help us provide accurate and timely service to claimants for Social Security disability benefits and SSI payments based on disability or blindness. With this modification, we are permitting attorney advisors, under managerial oversight, to conduct certain prehearing proceedings to help develop claims, and issue fully favorable decisions in appropriate claims before a hearing is conducted. We expect that this change will help us reduce the very high number of pending cases at the hearing level by enhancing claims development before the hearing and by permitting attorney advisors to issue fully favorable decisions in appropriate claims. This temporary modification applies only to claims processed under parts 404 and 416 of our regulations; it does not apply to claims processed under part 405 of our regulations, which concerns only disability claims filed in the Boston region after July 31, 2006. Parts 404 and 416 of our regulations concern disability cases in every area outside the Boston region and non-disability cases in every location. Generally, when a claim is filed for Social Security disability benefits or SSI payments based on disability or blindness, a State agency makes the initial and reconsideration disability determination for us. ALJs conduct hearings after we have made a reconsideration determination. Under this interim final rule, attorney advisors who serve as decision writers or managers within the hearing operation may conduct certain prehearing proceedings and, where appropriate, issue decisions that are wholly favorable to claimants and any other party to the hearing. Attorney advisors have performed these duties in the past. In June 1995, we announced final rules establishing the attorney advisor program for a limited period of 2 years. 60 FR 34126 (June 30, 1995). The program's success prompted us to extend the program several times, until it finally ended in April 2001. 62 FR 35073 (June 30, 1997), 63 FR 35515 (June 30, 1998), 64 FR 13677, 64 FR 51892. Requests for hearings have significantly increased in recent years, and we expect even more such requests in the future due to the projected increase in disability claims as the baby boomers move into their disability-prone years. Additionally, the very high number of pending cases at the hearing level has grown to an alarming level. We plainly must do everything that we can to address this workload. This interim final rule is an important part of our efforts designed to help us decide these cases more efficiently. These regulations will allow us to expedite the processing of cases pending at the hearing level without infringing on the right of a claimant to a hearing before an ALJ. The attorney advisor's conduct of certain prehearing proceedings will not delay the scheduling of a hearing before an ALJ. If the prehearing proceedings are not concluded before the hearing date, the case will be sent to the ALJ unless a decision wholly favorable to the claimant and all other parties is in process, or the claimant and all other parties to the hearing agree in writing to delay the hearing until the prehearing proceedings are completed. Prehearing proceedings may be conducted by the attorney advisor under this interim final rule if one of the following criteria is met: new and material evidence is submitted, there is an indication that additional evidence is available, there is a change in the law or regulations, or there is an error in the file or some other indication that a wholly favorable decision could be issued. A decision by an attorney advisor will be mailed to all parties. The notice of decision will state the basis for the decision and advise the parties that an ALJ will dismiss the hearing request unless a request to proceed with the hearing is made by a party within 30 days after the date the notice of the decision was mailed. These procedures will remain in effect for a period of time not to exceed 2 years from the effective date of this interim final rule, unless we terminate or extend them by publication of a final rule in the **Federal Register** . If we publish such a final rule, we need not request further public comment. Clarity of These Rules Executive Order 12866, as amended, requires each agency to write all rules in plain language. In addition to your substantive comments on these interim final rules, we invite your comments on how to make them easier to understand. *For example:* Have we organized the material to suit your needs? Are the requirements in the rules clearly stated? Do the rules contain technical language or jargon that isn't clear? Would a different format (grouping and order of sections, use of headings, paragraphing) make the rules easier to understand? Would more (but shorter) sections be better? Could we improve clarity by adding tables, lists, or diagrams? What else could we do to make the rules easier to understand? Regulatory Procedures Pursuant to sections 205(a), 702(a)(5), and 1631(d)(1) of the Social Security Act, 42 U.S.C. 405(a), 902(a)(5), and 1383(d)(1), we follow the Administrative Procedure Act
(APA)rulemaking procedures specified in 5 U.S.C. 553 in the development of our regulations. The APA provides exceptions to its prior notice and public comment procedures when an agency finds there is good cause for dispensing with such procedures on the basis that they are impracticable, unnecessary, or contrary to the public interest. We have determined that, under 5 U.S.C. 553(b)(B), good cause exists for issuing this regulatory change as an interim final rule. However, we are inviting public comment on the interim final rule and will consider any responsive comments we receive within 60 days of the publication of the interim final rule. We are not changing the substantive provisions of the attorney advisor program, which still appear in the regulations. We are merely re-enacting the provisions that we have used in the past. The substantive rules were promulgated with notice and public comment procedures, with a notice of proposed rulemaking published on April 14, 1995 (60 FR 19008) and final rules published on June 30, 1995 (60 FR 34126). Accordingly, we find that an additional opportunity for public comment prior to re-enactment of this program is unnecessary. We also find that it would be contrary to the public interest not to effectuate these rules as quickly as we can. The attorney advisor program will help, along with a series of other initiatives that we are contemplating, reduce the pending hearing requests to a manageable level. We must address the hearing backlog as quickly as possible. If we do not address this issue now, the situation could easily worsen, possibly resulting in over one million cases awaiting a hearing within 3 years. Of course, such a state of affairs is acceptable neither to us nor to the public at large. For these reasons, we believe we must take swift action and implement this rule as quickly as possible. Executive Order 12866, as Amended We have consulted with the Office of Management and Budget
(OMB)and determined that this rule meets the criteria for a significant regulatory action under Executive Order 12866, as amended. Thus, it was reviewed by OMB. Regulatory Flexibility Act We certify that this interim final rule will not have a significant economic impact on a substantial number of small entities as it affects only States and individuals. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required. Paperwork Reduction Act This rule will impose no additional reporting or recordkeeping requirements requiring OMB clearance. Federalism Impact and Unfunded Mandates Impact We have reviewed this rule under the threshold criteria of Executive Order 13132 and the Unfunded Mandates Reform Act and have determined that it does not have substantial direct effects on the States, on the relationship between the national government and the States, on the distribution of power and responsibilities among the various levels of government, or on imposing any costs on State, local, or tribal governments. This rule does not affect the roles of the State, local, or tribal governments. However, the rule takes administrative notice of existing statutes governing the roles and relationships of the State agencies and SSA with respect to disability determinations under the Act. (Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; 96.006, Supplemental Security Income.) List of Subjects 20 CFR Part 404 Administrative practice and procedure; Blind, Disability benefits; Old-Age, Survivors, and Disability Insurance; Reporting and recordkeeping requirements; Social Security. 20 CFR Part 416 Administrative practice and procedure; Aged, Blind, Disability benefits, Public assistance programs, Reporting and recordkeeping requirements; Supplemental Security Income (SSI). Dated: May 22, 2007. Michael J. Astrue, Commissioner of Social Security. For the reasons set out in the preamble, we are amending subpart J part 404 and subpart N of part 416 as set forth below: PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950- ) Subpart J—[Amended]. 1. The authority citation for subpart J of part 404 continues to read as follows: Authority: Secs. 201(j), 204(f), 205(a), (b), (d)-(h), and (j), 221, 223(i), 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 401(j), 404(f), 405(a), (b), (d)-(h), and (j), 421, 423(i), 425, and 902(a)(5)); sec. 5, Pub. L. 97-455, 96 Stat. 2500 (42 U.S.C. 405 note); secs. 5, 6(c)-(e), and 15, Pub. L. 98-460, 98 Stat. 1802 (42 U.S.C. 421 note); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note). 2. Amend § 404.942 by revising the first sentence of paragraph
(a)and paragraph
(g)to read as follows: § 404.942 Prehearing proceedings and decisions by attorney advisors.
(a)*General.* After a hearing is requested but before it is held, an attorney advisor may conduct prehearing proceedings as set out in paragraph
(c)of this section. * * *
(g)*Sunset provision.* The provisions of this section will no longer be effective on August 10, 2009, unless we terminate them earlier or extend them beyond that date by notice of a final rule in the **Federal Register** . PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED Subpart N—[Amended] 3. The authority citation for subpart N continues to read as follows: Authority: Secs. 702(a)(5), 1631, and 1633 of the Social Security Act (42 U.S.C. 902(a)(5), 1383, and 1383b); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note). 4. Amend § 416.1442 by revising the first sentence of paragraph
(a)and paragraph
(g)to read as follows: § 416.1442 Prehearing proceedings and decisions by attorney advisors.
(a)*General.* After a hearing is requested but before it is held, an attorney advisor may conduct prehearing proceedings as set out in paragraph
(c)of this section. * * *
(g)*Sunset provision.* The provisions of this section will no longer be effective on August 10, 2009, unless we terminate them earlier or extend them beyond that date by notice of a final rule in the **Federal Register** . [FR Doc. E7-15422 Filed 8-8-07; 8:45 am] BILLING CODE 4191-02-P SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404 and 416 [Docket No. SSA 2006-0097] RIN 0960-AG35 Temporary Extension of Attorney Fee Payment System to Title XVI; 5-Year Demonstration Project Extending Fee Withholding and Payment Procedures to Eligible Non-Attorney Representatives; Definition of Past-Due Benefits; and Assessment for Fee Payment Services AGENCY: Social Security Administration. ACTION: Final rules. SUMMARY: We are issuing these final rules to adopt without change the interim final rules published on April 5, 2007 to reflect in our regulations three self-implementing statutory provisions in the Social Security Protection Act of 2004
(SSPA)and three related self-implementing provisions in earlier legislation. These earlier provisions are in the Omnibus Budget Reconciliation Act of 1990 (OBRA), the Social Security Independence and Program Improvements Act of 1994 (SSIPIA), and the Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA). DATES: The interim rule published on April 5, 2007, is confirmed as final effective August 9, 2007. FOR FURTHER INFORMATION CONTACT: Marg Handel, Supervisory Social Insurance Specialist, Office of Income Security Programs, Social Security Administration, 239 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401,
(410)965-4639. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at *http://www.socialsecurity.gov* . SUPPLEMENTARY INFORMATION: Electronic Version The electronic file of this document is available on the date of publication in the **Federal Register** at *http://www.gpoaccess.gov/fr/index.html* . Background Sections 206(a) and 1631(d) of the Social Security Act
(Act)direct the Commissioner of Social Security (Commissioner) to determine the maximum fees representatives may charge claimants for services that they perform in claims before the Social Security Administration
(SSA)under title II or title XVI of the Act. For claims under title II in which the claimant is found entitled to past-due benefits, section 206 of the Act further authorizes the Commissioner to pay attorneys' fees, approved by the Commissioner or by a Federal court, out of a portion of the past-due benefits in the case. Prior to enactment of the SSPA (Pub. L. 108-203), we were not authorized to withhold and pay fees approved for attorneys in title XVI cases or for non-attorney representatives in cases under either title of the Act. Direct Payment of Attorneys' Fees in Title XVI Section 302 of the SSPA amended section 1631(d)(2) of the Act to extend the attorney fee withholding and direct payment procedures to claims under title XVI of the Act. The amendments made by section 302 apply with respect to attorney fees that were first required to be paid from title XVI past-due benefits on or after February 28, 2005, and we began paying fees directly to attorneys in cases effectuated on or after that date. Section 302 includes a sunset provision. Under that provision, the amendments made by section 302 will not apply to claims for benefits with respect to which the claimant and the representative enter into the agreement for representation after February 28, 2010. Direct Payment of Fees to Eligible Non-Attorney Representatives Section 303 of the SSPA directs the Commissioner to carry out a 5-year nationwide demonstration project to determine the potential results of extending the fee withholding and direct payment procedures that apply to attorneys under titles II and XVI of the Act, to non-attorney representatives who meet certain minimum prerequisites specified in section 303 and any additional prerequisites that the Commissioner may prescribe. Under the prerequisites specified in section 303, individuals applying to participate in the demonstration project must have a bachelor's degree or equivalent education, possess liability insurance or equivalent insurance adequate to protect claimants in the event of malpractice by the representative, pass a criminal background check ensuring fitness to practice before SSA, pass an examination testing knowledge of the relevant provisions of the Act and the most recent developments in Agency and court decisions, and demonstrate ongoing completion of qualified continuing education courses. In addition, the Commissioner has required that individuals applying to participate in the demonstration project show that they have sufficient prior experience representing claimants before SSA. More detailed information about these prerequisites may be found in the **Federal Register** notices published at the start of the demonstration project in 2005 (70 FR 2447, January 13, 2005; 70 FR 14490, March 22, 2005; and 70 FR 41250, July 18, 2005). The 5-year demonstration project on direct payment of fees to eligible non-attorneys under section 303 of the SSPA commenced on February 28, 2005. We began making direct payment to non-attorneys under the demonstration project on July 28, 2005, the date on which we determined that the initial group of applicants had satisfied the prerequisites for participation in the project. The demonstration project established by SSPA section 303 applies to claims for benefits with respect to which the agreement for representation is entered into after February 27, 2005, and before March 1, 2010. In these final rules, we are amending our regulations to reflect the fact that non-attorney representatives participating in the demonstration project may have their approved fees withheld from their clients' past-due benefits and paid directly to them. Definition of “Past-Due Benefits” The amount of “past-due benefits” is important in calculating the fees of representatives and in determining the maximum amount we can pay directly for representation. Since we last defined the term “past-due benefits” in our regulations, there have been several legislative enactments that affect the definition of past-due benefits. In section 5106 of the OBRA (Pub. L. 101-508), section 321(f) of the SSIPIA (Pub. L. 103-296), and section 302 of the SSPA, the Act was amended to exclude from past-due benefits any continued benefits paid pursuant to § 404.1597a of part 404, any interim benefits paid pursuant to section 223(h) of the Act, any continued benefits paid pursuant to § 416.996 of part 416, any continued benefits paid pursuant to § 416.1336(b) of part 416, and any interim benefits paid pursuant to section 1631(a)(8) of the Act; to specify how a reduction under section 1127 of the Act (for receipt of benefits for the same period under both title II and title XVI) affects the past-due benefit computation; and to address the effect of interim assistance reimbursement payments. We are amending our regulations to reflect these statutory changes. Assessment on Direct Payment of Fees Section 406 of the TWWIIA (Pub. L. 106-170) amended section 206 of the Act by adding section 206(d), which imposed an assessment on attorneys for the services we provide in determining and paying fees directly to attorneys from the benefits due claimants under title II of the Act. When that provision took effect on February 1, 2000, the amount of the assessment was 6.3 percent of the direct payment amount, with a provision allowing the Commissioner to determine for future years the percentage (not to exceed 6.3 percent) necessary to achieve full recovery of the costs of determining and paying fees to attorneys. Effective September 1, 2004, section 301 of the SSPA revised section 206(d) to cap the assessment at the lesser of the amount calculated using the percentage rate determined by the Commissioner or $75, and to provide for annual adjustment of the $75 cap based on the cost-of-living computation in section 215(i)(2)(A)(ii) of the Act. Sections 302 and 303 of the SSPA extended this assessment to the direct payment of fees to attorneys under title XVI and to the direct payment of fees to non-attorney representatives participating in the demonstration project authorized by section 303. Explanation of Changes We are amending our regulations on representation in 20 CFR parts 404 and 416 to reflect the legislative changes to sections 206, 1127 and 1631(d) of the Act that were enacted under section 5106 of OBRA, section 321(f) of the SSIPIA, section 406 of the TWWIIA, and sections 301 and 302 of the SSPA. In addition, we are revising the regulations to reflect the provisions of section 303 of the SSPA. We are making only those substantive changes necessary to conform our regulations to these currently applicable statutory provisions. In these changes we are: • Amending § 404.1703 to revise the definition of “past-due benefits” to explain that we determine past-due benefits before any applicable reduction for receipt of benefits for the same period under title XVI and that past-due benefits do not include continued payment of disability benefits during appeal or interim benefits in cases of delayed final decision. • Adding to § 416.1503 the definition of “past-due benefits” for title XVI benefits to explain that when we determine the amount of past-due benefits, we subtract the amount of any reduction under section 1127 for the concurrent receipt of benefits for the same period under both title II and title XVI, regardless of whether the actual reduction was applied to the title II benefits or to the title XVI benefits, and that past-due benefits do not include continued benefits or interim benefits. • Adding new §§ 404.1717 and 416.1517 to reflect the demonstration project extending benefit withholding and direct fee payment to non-attorneys under title II and title XVI. These sections also define “eligible to participate in the direct payment demonstration project” and describe the claims to which the demonstration project applies. • Amending § 404.1720 to revise paragraph (b)(4) to provide that we make direct fee payments from title II past-due benefits both to attorneys and to non-attorney representatives eligible to participate in the direct payment demonstration project, and that we assume no responsibility for the payment of any fee that we have authorized to a non-attorney if the representative is not eligible to participate in the demonstration project. We are also revising paragraph (c)(3) to provide that our notice of a fee determination will state whether we are responsible for paying the representative's fee from past-due benefits. • Amending § 416.1520 to add a new paragraph (b)(4) stating that we make direct payment of fees from past-due benefits under title XVI to attorneys and to non-attorneys eligible to participate in the direct payment demonstration project, and that we assume no responsibility for the payment of any fee that we have authorized to a non-attorney if the representative is not eligible to participate in the demonstration project. We are revising paragraph (c)(3) to state that our notice of fee determination will state whether we are responsible for paying the fee, rather than that we are not responsible for paying the fee. We are also revising paragraph (d)(3) to state that we assume no responsibility for fee payment based on a revised determination if the representative does not file the request for administrative review timely. • Revising § 416.1528 to place the existing text in a newly designated paragraph
(a)having the heading, “Representation of a party in court proceedings” and to add a new paragraph
(b)that has the heading “Attorney fee allowed by a Federal court.” Paragraph
(b)states that the court may allow a reasonable fee to an attorney as part of its favorable judgment in a proceeding under title XVI of the Act and that we may pay the attorney the amount of the fee out of, but not in addition to, the amount of the past-due benefits payable to the claimant by reason of the court judgment. • Amending § 404.1730 to insert a previously omitted “the” in paragraph (a), to add a cross-reference to the definition of “past-due benefits” in § 404.1703, and to reflect in paragraphs
(b)and
(c)the extension of the direct payment of fees from past-due benefits under title II to non-attorneys eligible to participate in the direct payment demonstration project. We are also adding a new paragraph
(d)to reflect that we impose an assessment on the representative when we pay a fee directly to the representative; to explain how we calculate the assessment; and to state that the representative may not, directly or indirectly, request or otherwise obtain reimbursement of the amount of the assessment from the claimant. • Adding new § 416.1530 to state that direct payment of fees under title XVI extends to attorneys for fees we authorize and for fees a Federal court allows, and extends to non-attorneys eligible to participate in the direct payment demonstration project for fees we authorize. This section also describes the maximum amount we will pay to the representative; shows that we impose an assessment on the representative when we pay a fee directly to the representative; explains how we calculate the assessment; and states that the representative may not, directly or indirectly, request or otherwise obtain reimbursement of the amount of the assessment from the claimant. In addition to these substantive changes, we are revising §§ 404.1720(b)(4) and 404.1730(a),
(b)and
(c)to refer to the person claiming a right under the old-age, disability, dependents', or survivors' benefits program in the second person, and thus make the language in these sections consistent with the use of the second person throughout the regulations. Interim Final Rule On April 5, 2007 (72 FR 16720), we published interim final rules with request for comments. The interim final rules were effective on that date. We received no public comments on the interim final rules. Thus, we are adopting them without change. Regulatory Procedures Executive Order 12866, as amended The Office of Management and Budget
(OMB)earlier determined that the interim final rules we published on April 5, 2007, met the criteria for a significant regulatory action under Executive Order 12866, as amended. Accordingly, those interim final rules were subject to OMB review. Because these final rules merely adopt the provisions of the earlier interim final rules without change, however, OMB determined that it did not need to review these rules again. We also have determined that these rules meet the plain language requirement of Executive Order 12866, as amended. Regulatory Flexibility Act We certify that these final rules will not have a significant economic impact on a substantial number of small entities. Also, these final rules simply reflect legislation already in effect. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required. Paperwork Reduction Act The Paperwork Reduction Act
(PRA)of 1995 says that no persons are required to respond to a collection of information unless it displays a valid OMB control number. In accordance with the PRA, SSA is providing notice that OMB has approved the information collection requirements contained in §§ 404.1717, 404.1730(c)(1), 404.1730(c)(2)(i), 404.1730(c)(2)(ii), 416.1517, 416.1528(a), 416.1530(c)(1), 416.1530(c)(2)(i), and 416.1530(c)(2)(ii) of these final rules. The OMB Control Number for this (these) collection(s) is 0960-0745, expiring 06/30/2010. (Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security-Disability Insurance; 96.002, Social Security-Retirement Insurance; 96.004, Social Security-Survivors Insurance; and 96.006, Supplemental Security Income) List of Subjects 20 CFR Part 404 Administrative practice and procedure, Blind, Disability benefits, Old-Age, Survivors, and Disability Insurance, Reporting and recordkeeping requirements, Social Security. 20 CFR Part 416 Administrative practice and procedure, Aged, Blind, Disability benefits, Public assistance programs, Reporting and recordkeeping requirements, Supplemental Security Income. Dated: July 31, 2007. Michael J. Astrue, Commissioner of Social Security. Accordingly, the interim final rules amending subpart R of part 404 and subpart O of part 416 of chapter III of title 20 of the Code of Federal Regulations, which were published at 72 FR 16720 on April 5, 2007, are adopted as final rules without change. [FR Doc. E7-15242 Filed 8-8-07; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF THE TREASURY 31 CFR Part 103 RIN 1506-AA29 Financial Crimes Enforcement Network; Anti-Money Laundering Programs; Special Due Diligence Programs for Certain Foreign Accounts AGENCY: Financial Crimes Enforcement Network, Treasury. ACTION: Final rule. SUMMARY: The Financial Crimes Enforcement Network is issuing this final rule to implement the enhanced due diligence requirements for correspondent accounts for certain foreign banks set forth in section 312 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), Pub. L. No. 107-56. Section 312 requires U.S. financial institutions to establish due diligence and, where necessary, enhanced due diligence, policies, procedures, and controls reasonably designed to detect and report money laundering through correspondent accounts and private banking accounts established or maintained by U.S. financial institutions for non-U.S. persons. We issued final rules implementing the due diligence requirements for correspondent accounts and the due diligence and enhanced due diligence requirements for private banking accounts for non-U.S. persons on January 4, 2006. This final rule completes the section 312 rulemaking process. DATES: This final rule is effective September 10, 2007. Applicability Dates: On February 5, 2008, the enhanced due diligence provisions of this final rule will apply to correspondent accounts for certain foreign banks established on or after such date. On May 5, 2008, the enhanced due diligence provisions of this final rule will apply to correspondent accounts for certain foreign banks established before February 5, 2008. See 31 CFR 103.176(f) of this final rule. FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs Division, Financial Crimes Enforcement Network,
(800)949-2732. SUPPLEMENTARY INFORMATION I. Background Section 312 of the USA PATRIOT Act amended the Bank Secrecy Act 1 to add new subsection
(i)to 31 U.S.C. 5318. This provision requires each U.S. financial institution that establishes, maintains, administers, or manages a correspondent account or a private banking account in the United States for a non-U.S. person to subject such accounts to certain anti-money laundering measures. In particular, a covered financial institution 2 must establish appropriate, specific and, where necessary, enhanced due diligence policies, procedures, and controls that are reasonably designed to enable the financial institution to detect and report instances of money laundering through these accounts. 1 Bank Secrecy Act, Pub. L. No. 91-508 (codified as amended at 12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31 U.S.C. 5311-5314 and 5316-5332). 2 31 CFR 103.175(f) (defining a “covered financial institution ” as any one of a number of specific U.S. financial institutions, including banks, broker-dealers, futures commission merchants, and mutual funds). On May 30, 2002, we published a notice of proposed rulemaking in the **Federal Register** , proposing to implement the requirements of section 312 in their entirety. 3 In that proposal, we set forth a series of specific measures that covered financial institutions could, and in some instances would be required to, apply to correspondent accounts and private banking accounts established or maintained for non-U.S. persons. We received comments on that proposal raising concerns about the definitions in the proposal, the scope of the requirements contained in the proposed rule text, and the types of financial institutions that would be subject to the proposal's requirements. 3 *Due Diligence Anti-Money Laundering Programs for Certain Foreign Accounts,* 67 FR 37736 (May 30, 2002) (First Proposed Rule). To have adequate time to review the comments we received in response to the proposal, to determine the appropriate resolution of the issues raised, and to give direction to financial institutions that would be subject to section 312, 4 we issued an interim final rule on July 23, 2002. 5 In the interim final rule, we exercised our authority under 31 U.S.C. 5318(a)(6) to defer temporarily the application of section 312 to certain financial institutions. 6 For those financial institutions that were not subject to the deferral, 7 we provided interim guidance for compliance with the statute by generally describing the scope of coverage, duties, and obligations under that provision, pending issuance of a final rule. 4 Section 312(b)(2) of the Act provides that section 5318(i) of the Bank Secrecy Act would take effect on July 23, 2002, whether or not final rules had been issued by that date. 5 *Due Diligence Anti-Money Laundering Programs for Certain Foreign Accounts,* 67 FR 48348 (July 23, 2002). 6 Pursuant to the interim final rule, banks, savings associations, and credit unions had to comply with the correspondent account and private banking account provisions of section 312. Securities broker-dealers, futures commission merchants, and introducing brokers had to comply with the private banking account provisions of section 312. We deferred the application of section 312 to all other financial institutions. 7 *See* id. Thereafter, on January 4, 2006, we issued final rules implementing section 312, excepting the enhanced due diligence provisions for correspondent accounts established or maintained for certain foreign banks. 8 Also on January 4, we published a second notice of proposed rulemaking (Second Proposed Rule or proposed rule), 9 seeking comment on a new approach to implementing the enhanced due diligence provisions of section 312 with respect to correspondent accounts established or maintained for certain statutorily designated foreign banks (“respondent banks”). 10 8 *Anti-Money Laundering Programs; Special Due Diligence for Certain Foreign Accounts* , 71 FR 496 (January 4, 2006). 9 *Anti-Money Laundering Programs; Special Due Diligence for Certain Foreign Accounts* , 71 FR 516 (January 4, 2006). 10 Section 312 contains enhanced due diligence provisions for both correspondent accounts and private banking accounts for non-U.S. persons. Unless otherwise provided in this release, the term “enhanced due diligence provisions” relates exclusively to the correspondent account provisions of section 312. As required by section 312, the enhanced due diligence measures proposed would apply to correspondent accounts maintained for a foreign bank operating under an offshore banking license, 11 under a license issued by a country that has been designated as being non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization of which the United States is a member and with which designation the United States representative to the group or organization concurs, 12 or under a license issued by a country designated by the Secretary of the Treasury (Secretary) as warranting special measures due to money laundering concerns. 13 With respect to these accounts, we proposed that a covered financial institution would be required to conduct risk-based enhanced due diligence with regard to a correspondent account maintained for or on behalf of such a foreign bank to guard against money laundering and to report suspicious activity; to ascertain whether such a foreign bank maintains correspondent accounts for other foreign banks 14 and, if so, to conduct appropriate due diligence; and to identify the owners of such a foreign bank if its shares are not publicly traded. This final rule adopts the risk-based enhanced due diligence rule that we proposed on January 4, 2006. 11 *See* 31 U.S.C. 5318(i)(4)(A) and 31 CFR 103.175(k) (defining “offshore banking license”). 12 The Financial Action Task Force
(FATF)is the only intergovernmental organization of which the United States is a member that has designated countries as non-cooperative with international anti-money laundering principles (no such countries currently are designated). The United States has concurred with all FATF designations to date. 13 The Secretary is authorized under section 311 of the USA Patriot Act, after finding that reasonable grounds exist for concluding that a foreign jurisdiction, foreign financial institution, international class of transaction, or type of account is of “primary money laundering concern,” to require domestic financial institutions and domestic financial agencies to take certain statutorily defined “special measures” against the primary money laundering concern. Section 311 requires the Secretary to consult with various Federal agencies before making such a finding or imposing special measures. For a listing of findings and rulemakings issued pursuant to section 311, *see http://www.fincen.gov/reg_section311.html* . 14 In the preamble to the Second Proposed Rule, we referred to these relationships as nested accounts or nested banks. It has been suggested that the term “nested” is not synonymous with indirect use of a correspondent account. We have not employed the terminology in this final rule. Finally, section 312(b)(1) of the USA PATRIOT Act provides that the Secretary shall issue implementing regulations under this section “in consultation with the appropriate federal functional regulators (as defined in section 509 of the Gramm-Leach-Bliley Act) of the affected financial institutions.” This final rule was developed in consultation with the staffs of the federal functional regulators. 15 15 Section 509 of the Gramm-Leach-Bliley Act defines federal functional regulators to include the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration Board, and the U.S. Securities and Exchange Commission. *See* 15 U.S.C. 6809. The Commodity Futures Trading Commission was defined in section 321 of the USA PATRIOT Act as a federal functional regulator for the purposes of implementing that Act. II. Summary of Comments and Revisions A. Comments We received seven comment letters on the Second Proposed Rule. Commenters included U.S. banks, an association of state banking supervisors, and trade associations representing U.S. banks, foreign banks, the futures industry, investment companies, the securities industry, and the bond markets. 16 Eleven trade associations representing covered financial institutions jointly signed one of the comment letters. In general, commenters expressed support for the risk-based approach elaborated in the Second Proposed Rule. We respond to the submitted comments in the *Section-by-Section Analysis* , below. 16 The comment letters may be inspected at the Financial Crimes Enforcement Network reading room in Vienna, Virginia between 10 a.m. and 4 p.m. Persons wishing to inspect comments must request an appointment by telephone at
(202)354-6400 (not a toll-free number). The comment letters are also available on our Web site at *http://www.fincen.gov/71fr516.htm.* B. Revisions This final rule is substantially similar to the Second Proposed Rule. The following revisions to the rule, which we will explain more fully in the Section-by-Section Analysis below, have been made in response to comments received on the Second Proposed Rule. First, the provisions requiring covered financial institutions, in appropriate circumstances, to obtain and review “documentation” relating to a respondent bank's anti-money laundering program and to “consider[ ] whether such program appears to be reasonably designed to detect and prevent money laundering” have been revised to require covered financial institutions, in appropriate circumstances, to obtain and consider “information” relating to a respondent bank's anti-money laundering program in order to assess the risk of money laundering presented by the respondent bank's account. Second, the provision requiring a covered financial institution, in certain circumstances, to take reasonable steps to assess and “minimize” money laundering risks related to the customers of their respondent banks has been revised to require a covered financial institution, in certain circumstances, to take reasonable steps to assess and “mitigate” such money laundering risks. III. Section-by-Section Analysis A. Section 103.176(b)—Enhanced Due Diligence for Certain Foreign Banks Section 103.176(b) of this final rule requires a covered financial institution to establish enhanced due diligence procedures that, at a minimum, include taking reasonable steps to
(1)Conduct risk-based enhanced scrutiny of correspondent accounts established or maintained for respondent banks to guard against money laundering and to identify and report suspicious transactions,
(2)determine whether the subject respondent bank in turn maintains correspondent accounts for other foreign banks that enable those other foreign banks to gain access to the respondent bank's correspondent account with the covered financial institution and, if so, to take reasonable steps to obtain information to assess and mitigate the money laundering risks associated with such accounts, and
(3)determine the identity of each owner of a respondent bank whose shares are not publicly traded, and the nature and extent of each owner's ownership interest. The commenters generally expressed support for the risk-based approach of the Second Proposed Rule. One commenter suggested that the five risk factors enumerated in our rules implementing the due diligence requirements for correspondent accounts contained in section 312 should also be applied to determine the appropriate extent of enhanced due diligence. 17 17 As part of its general due diligence program for foreign correspondent accounts, a covered financial institution is expected to establish policies, procedures, and controls that include assessing the money laundering risk of a correspondent account based upon consideration of all the risk factors, including
(1)The nature of the foreign financial institution's business and the markets it serves;
(2)the type, purpose, and anticipated activity of the correspondent account;
(3)the nature and duration of the covered financial institution's relationship with the foreign financial institution;
(4)the anti-money laundering and supervisory regime of the jurisdiction that issued a charter or license to the foreign financial institution, and its owners if applicable, to the extent that such information is reasonably available; and
(5)information known or reasonably available to the covered financial institution about the foreign financial institution's anti-money laundering record. 31 C.F.R. 103.176(a)(2). As these five risk factors are meant to apply to all respondent banks, including those subject to the enhanced due diligence provisions of section 312, it would be appropriate to consider the five factors listed in subsection (a)(2) when assessing the risk posed by a respondent bank subject to the provisions of this final rule to help determine the level of enhanced due diligence required. The fourth risk factor in particular—the anti-money laundering regime of the jurisdiction that issued a charter or license to the foreign bank and, to the extent reasonably available, of the home jurisdiction of the foreign bank or its parent 18 —may be especially relevant in a covered financial institution's determination of the nature and extent of the risks posed by the correspondent accounts for the foreign banks covered by this rule and the extent of the enhanced due diligence that is necessary and appropriate to mitigate these risks. 19 18 31 CFR 103.176(a)(2)(iv). 19 *See* Second Proposed Rule, 71 FR at 517 (adopting a risk-based approach to enhanced due diligence as an alternative to creating exceptions to the enhanced due diligence provisions for foreign banks operating under an offshore banking license). 1. 103.176(b)(1)— *Enhanced scrutiny to guard against money laundering.* Section 103.176(b)(1) of the Second Proposed Rule would have required a covered financial institution to conduct risk-based enhanced scrutiny of correspondent accounts established or maintained for respondent banks to guard against money laundering and to identify and report suspicious transactions. This provision is adopted in the final rule without substantial change. Section 103.176(b)(1)(i) and
(ii)of the Second Proposed Rule would have required covered financial institutions, as part of their enhanced due diligence programs when appropriate, to obtain and review documentation related to a respondent bank's anti-money laundering program and consider whether the program appears to be reasonably designed to detect and prevent money laundering. Several commenters questioned the utility of the requirement and expressed concern about the cost of complying with it. One commenter read the Second Proposed Rule as effectively requiring a covered financial institution to perform an audit of a respondent bank's anti-money laundering program, despite guidance in the preamble stating that an audit was not required. Another commenter similarly expressed concern that this and other provisions of the Second Proposed Rule would cause covered financial institutions to become policemen and regulators. A third commenter was concerned that this provision ultimately would be enforced as a default or mandatory requirement. Other commenters additionally suggested that obtaining and reviewing documentation frequently would be a difficult and expensive proposition, as such documents may be written only in the native language of a respondent bank. One commenter questioned the utility of reviewing the documentation of a respondent bank's anti-money laundering program and suggested that other due diligence measures, such as reviewing and monitoring transactions conducted by the foreign bank, would be more productive. Other commenters offered that administering a questionnaire to a respondent bank about its anti-money laundering practices, when appropriate, would be more effective than a review of its anti-money laundering program documents. In response to these comments, section 103.176(b)(1)(i) of the final rule now requires a covered financial institution, in appropriate circumstances, to obtain and consider information related to the anti-money laundering program of the respondent bank to assess the risk of money laundering presented by the respondent bank's correspondent account. This provision of the final rule is not meant to be a mandatory requirement. Rather, it is intended to be risk-based. We emphasize that whether enhanced due diligence should include a reasonable inquiry into the anti-money laundering program of a respondent bank will depend on the extent to which reviewing the anti-money laundering program of the respondent bank would be appropriate based upon the nature of the correspondent account. 20 While covered financial institutions have discretion with respect to implementing this provision, as with other risk-based provisions of the BSA and its implementing regulations, a covered financial institution is responsible for reasonably demonstrating that it is effectively exercising that discretion on a risk-assessed basis. 20 For example, a covered financial institution may maintain a correspondent account for a respondent bank with which it has had a longstanding relationship, for a respondent bank that only conducts proprietary transactions through the correspondent account, for a respondent bank that is controlled by a U.S. institution, or for a respondent bank whose licensing or home jurisdiction is known for maintaining a comprehensive anti-money laundering regime. In such circumstances, a covered financial institution may determine through experience and due diligence that reviewing information related to the anti-money laundering program of the respondent bank will not provide information that is relevant to the covered financial institution's risk-assessment or monitoring of the respondent bank's correspondent account. In contrast, a respondent bank that permits or conducts transactions on behalf of other foreign banks, or operates payable-through accounts, through the covered financial institution may pose a greater money laundering risk. In such circumstances, conducting due diligence that includes a review of information related to the respondent bank's anti-money laundering program may be appropriate. We revised this due diligence provision of the Second Proposed Rule to clarify that covered financial institutions are expected neither to conduct an audit of the anti-money laundering programs of their respondent bank customers, nor to determine the extent to which the respondent bank's anti-money laundering program is “reasonably designed to detect and prevent money laundering,” which may be difficult to determine without conducting an audit. 21 Rather, under the final rule, a covered financial institution is required to consider and assess more generally the extent to which it may be exposed to money laundering risk by the respondent bank's correspondent account. The revision also was made to reduce the burdens associated with reviewing documents, such as language barriers, as well as to provide covered financial institutions with flexibility to determine how to conduct due diligence with respect to a respondent bank's anti-money laundering efforts. 21 *See, e.g.* , Second Proposed Rule, 71 FR at 518 (“[w]e do not contemplate that the covered financial institution would conduct an audit of the foreign correspondent bank's written anti-money laundering program”). For example, a covered financial institution may, in appropriate circumstances, use a questionnaire, as several commenters suggested, to gather information related to the anti-money laundering program of a respondent bank, provided that the questionnaire and the responses thereto enable a covered financial institution to assess effectively the risk of money laundering presented by the respondent bank. In appropriate situations, such as where a covered financial institution has a sufficient transaction history with a respondent bank, a covered financial institution may also conduct a review of that transaction history to assess the money laundering risk presented by the respondent bank. As one commenter suggested, a covered financial institution may also, in appropriate circumstances, incorporate its enhanced due diligence efforts into the certification process available under the rules implementing sections 313 and 319(b) of the USA PATRIOT Act. 22 Incorporating a questionnaire into the certification form would not alone affect the safe harbor provided under the rules implementing sections 313 and 319(b), 23 provided that the covered financial institution also obtains and maintains all of the information required under those rules. 22 *See* 31 CFR 103.177. 23 31 CFR 103.177(b). We caution, however, that the certifications are subject to renewal only every three years. Waiting until the next certification is required before obtaining information about the respondent bank's anti-money laundering program may not be reasonable for purposes of complying with the enhanced due diligence provisions of section 312. We also remind covered financial institutions incorporating a questionnaire into their certifications that doing so will not extend the section 313 and 319(b) safe harbor to this final rule. Finally, one commenter asked whether a covered financial institution would be required to formulate additional due diligence measures for its accounts for foreign banks that are subject of this final rule if the covered financial institution applies the equivalent of enhanced due diligence required in this final rule to all of its correspondent accounts for foreign financial institutions. 24 If a covered financial institution applies both the due diligence program for foreign correspondent accounts 25 and the enhanced due diligence requirements of this final rule to all of its correspondent accounts for foreign financial institutions, then the covered financial institution would not be required to formulate additional due diligence measures for the correspondent accounts it establishes and maintains for foreign banks that are the subjects of this final rule. 24 *See* 31 CFR 103.175(h) (defining “foreign financial institution” to include banks, broker-dealers in securities, futures commission merchants, and mutual funds). 25 31 CFR 103.176(a). Section 103.176(b)(1)(iii) of the Second Proposed Rule would have required covered financial institutions to monitor transactions to, from, or through a respondent bank in a manner that is reasonably designed to detect money laundering and suspicious activity. In the preamble to the Second Proposed Rule, we emphasized that monitoring is an important aspect of enhanced due diligence. 26 This monitoring may be conducted manually or electronically, may be done on an individual account basis or by product activity, and should reflect the risk assessment conducted by the covered financial institution on each respondent bank subject of the enhanced due diligence provisions. Section 103.176(b)(1)(iii) has been incorporated into the final rule without change, and has been re-designated as Section 103.176(b)(1)(ii). 26 Second Proposed Rule, 71 FR at 518. Section 103.176(b)(1)(iv) of the Second Proposed Rule would have required covered financial institutions to obtain information from the foreign bank about the identity of any person with authority to direct transactions through any correspondent account that is a payable-through account, and the sources and beneficial owners of funds or other assets in the payable-through account. This provision has been incorporated into the final rule without change, and has been re-designated as Section 103.176(b)(1)(iii). 2. 103.176(b)(2)—Foreign bank customers. Section 103.176(b)(2) of the Second Proposed Rule would have required a covered financial institution to determine whether a respondent bank in turn maintains correspondent accounts for other foreign banks that enable those other foreign banks to gain access to the respondent bank's account with the covered financial institution. If such a situation exists, the Second Proposed Rule would have required the covered financial institution to take reasonable steps to assess and minimize the potential money laundering risk posed by the respondent bank's accounts for those other foreign banks. Commenters were concerned about the extent to which they would be expected to obtain lists of foreign bank customers from their respondent banks, for the purposes of complying with section 103.176(b)(2). 27 One commenter, for example, stated that it may not be possible to obtain a list of the foreign bank customers of respondent banks due to strict privacy laws in some countries. 28 Two commenters suggested that there are situations where it is unlikely, due to the nature of the correspondent account, that funds transfers will be conducted through the account, and therefore the covered financial institution should not be required to obtain lists of, or other information about, foreign bank customers of their respondent banks. 27 Other commenters requested clarification that the provisions of subsection (b)(2) are risk-based. 28 One commenter expressed the view that it should not be required to obtain the anti-money laundering programs of the foreign bank customers of a respondent bank. Section 103.176(b)(2) does not contain such a requirement. Obtaining and considering information related to the anti-money laundering program of a foreign respondent bank, and not the program of its foreign bank customers, is set forth in this final rule as an enhanced due diligence procedure when appropriate. *See* 31 CFR 103.176(b)(1)(i). As a general rule, we do not expect that a covered financial institution will request and obtain lists of foreign bank customers from their respondent banks. We do expect, however, that covered financial institutions, based upon their risk assessment of a respondent bank and as part of their enhanced due diligence efforts, will make appropriate inquiries about such factors as the nature of the foreign bank customers the respondent bank serves (if any) and the extent to which transactions for any such foreign bank customer may be conducted through the respondent bank's correspondent account. The covered financial institution also could consult bank reference guides, and monitor or otherwise assess transaction activity to the extent it may contain foreign bank customer information. 29 29 In situations where it is unlikely that funds transfers will be conducted through a correspondent account, covered financial institutions may determine that it would not be necessary to obtain a list of the respondent bank's foreign bank customers. We note, however, that correspondent accounts that may not be used to conduct funds transfers nonetheless may be used to launder money and conduct other illicit financial activity. There may be circumstances, such as in the highest risk situations, where it may be necessary and appropriate to request and obtain the identity of a respondent bank's foreign bank customers directly from the respondent bank. If obtaining such information in appropriate circumstances is not possible—including by monitoring account activity—the covered financial institution should determine, pursuant to section 103.176(d) of this final rule, how to proceed in light of the particular circumstances. One commenter expressed concern that covered financial institutions may be held responsible, according to the provisions of section 103.176(b)(2), for monitoring and reporting suspicious activity of the foreign bank customers of their respondent banks. The obligation to monitor for and report suspicious activity arises from the rules implementing 31 U.S.C. 5318(g). Under those rules, covered financial institutions must report suspicious activity involving any of their accounts to the extent they know, suspect, or have reason to suspect a violation of law or regulation, including suspicious activity attempted or conducted by, at, or through correspondent accounts they establish or maintain for respondent banks. 30 Such activity may involve the respondent bank's foreign bank customers. 30 *See* 31 CFR 103.15(a) (suspicious activity reporting requirements for mutual funds), 31 CFR 103.17(a) (same for futures commission merchants), 31 CFR 103.18(a) (for banks), and 31 CFR 103.19(a) (for broker-dealers in securities). *See also* In the Matter of the Federal Branch of Arab Bank PLC, FinCEN enforcement action 2005-2 (Aug. 17, 2005) and In the Matter of the New York Branch of ABN Amro Bank N.V., FinCEN enforcement action 2005-5 (Dec. 19, 2005) (financial institutions responsible for monitoring the transactions through correspondent accounts maintained on behalf of foreign financial institutions), available at *http://www.fincen.gov/reg_enforcement.html* . One commenter was concerned by the level of due diligence that may be required by the use of the word “minimize” in section 103.176(b)(2) of the Second Proposed Rule and suggested replacing with the word *mitigate.* Accordingly, in this final rule, we have revised the relevant clause to require a covered financial institution to “take reasonable steps to obtain information relevant to assess and *mitigate* money laundering risks associated with the foreign bank's correspondent accounts for other foreign banks” 31 as the commenter suggested. 31 Emphasis added. Finally, commenters sought clarification as to whether section 103.176(b)(2) is risk-based. The first part of this sub-paragraph requires a covered financial institution to take reasonable steps to “[d]etermine whether the foreign bank for which the correspondent account is established or maintained in turn maintains correspondent accounts for other foreign banks that use the foreign correspondent account established or maintained by the covered financial institution.” Making that initial determination is not dependent on the risks associated with a particular respondent bank. However, once a covered financial institution has taken reasonable steps to make such a determination, it may “take reasonable steps to obtain information relevant to assess and mitigate money laundering risks associated with the foreign bank's correspondent accounts for other foreign banks, including, as appropriate, the identity of those foreign banks,” as section 103.176(b)(2) provides and the authorizing statute contemplates. A covered financial institution may take a risk-based approach when determining what steps to gather due diligence information are appropriate. 3. 103.176(b)(3)— *Identification of the owners of foreign banks.* Section 103.176(b)(3) of the Second Proposed Rule would require a covered financial institution to take reasonable steps to identify the owners of a respondent bank if the respondent bank's shares are not publicly traded. The section defined an owner as “any person who directly or indirectly owns, controls, or has the power to vote 10 percent or more of any class of securities” of the respondent bank. One commenter suggested that we increase the proposed 10% threshold for identifying the interest of the owners of respondent banks to 25% for banks that are considered to represent a relatively low level of money laundering risk. Other commenters requested clarification that the provisions of subsection (b)(3) are risk-based. After consideration, we adopted the proposed threshold into the final rule without change. The final rule covers three specific and relatively small categories of foreign banks that have been designated by statute. We believe that tiered ownership thresholds would undermine the benefit of identifying the owners of high-risk respondent banks while not appreciably reducing the burden of identifying such owners. Accordingly, we have not adopted a risk-based approach to section 103.176(b)(3). B. Section 103.176(c)—Foreign Banks Subject to Enhanced Due Diligence Section 103.176(c) of the Second Proposed Rule set forth the types of foreign banks for which enhanced due diligence would be required, as provided by section 312 of the USA PATRIOT Act. The enhanced due diligence provisions would apply to foreign banks operating under
(1)An offshore banking license; 32
(2)a license issued by a country designated as being non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization of which the United States is a member and with which designation the United States representative to the group or organization concurs; 33 or
(3)a license issued by a country designated by the Secretary as warranting special measures due to money laundering concerns. 34 The final rule adopts this provision without change. 32 *See supra* note 11. 33 *See supra* note 12. 34 *See supra* note 13. One commenter suggested that we reinstate the proposed exception from the enhanced due diligence requirements of section 312 for an offshore bank that “has been found, or is chartered in a jurisdiction where one or more foreign banks have been found, by the Board of Governors of the Federal Reserve System under the Bank Holding Company Act or the International Banking Act, to be subject to comprehensive supervision or regulation on a consolidated basis by the relevant supervisors in that jurisdiction.” 35 After consideration, we did not include such an exception in this final rule. 35 *See* First Proposed Rule, 67 FR at 37743. We believe that the risk-based provisions of the final rule are better suited to addressing the various risk profiles of respondent banks subject to enhanced due diligence than the proposed exception. Thus, when dealing with an offshore booking location of a bank located in a country with a strong anti-money laundering regime, for example, a covered financial institution ordinarily will not be required to conduct enhanced due diligence to the same degree as it would with a stand-alone offshore bank. 36 36 *See supra* note 19 and accompanying text (recognizing that the anti-money laundering and supervisory regime of the jurisdiction that issued a charter or license to a foreign bank may be particularly relevant in assessing the money laundering risk posed by the foreign bank and a mitigating risk factor for the purposes of complying with the enhanced due diligence provisions, as also may be the regime of the home jurisdiction of the foreign bank or its parent to the extent relevant information is readily available). One commenter was concerned that a covered financial institution may be cited for a violation of this final rule if it failed to subject an account established or maintained for a high-risk foreign bank to the enhanced due diligence requirements of the rule even when the foreign bank was not in one of the three designated categories of banks subject to enhanced due diligence. However, section 103.176(b) is expressly limited to the foreign banks enumerated at section 103.176(c). With respect to high-risk foreign banks not enumerated in section 103.176(c), a failure to apply appropriate due diligence to a correspondent account maintained for such a foreign bank would constitute a violation of the general due diligence provisions of the correspondent account rule, 37 but not the enhanced due diligence provisions of this final rule. 37 *See* 31 CFR 103.176(a). C. Section 103.176(d)—Special Procedures According to the provisions of proposed section 103.176(d), a covered financial institution would be required to establish special procedures for circumstances in which appropriate due diligence or enhanced due diligence cannot be performed with respect to a correspondent account. We received no comments on this provision of the Second Proposed Rule. It has been adopted in this final rule without change. D. Section 103.176(e) and (f)—Applicability Rules This final rule revises section 103.176(e) and adds new section
(f)to reflect the applicability dates of the obligations under this section. The Second Proposed Rule did not address the issue of applicability dates. We are mindful, however, of the obligations that will result from the statutory requirement that enhanced due diligence apply to all correspondent accounts maintained for certain foreign banks, regardless of when the accounts were opened. Effective 180 days after the date of publication of this final rule, the requirements of this final rule will apply to correspondent accounts opened on or after that date. Effective 270 days after the date of publication of this final rule, the rule's requirements will apply to all correspondent accounts opened prior to the date that is 180 days after the date of publication of this final rule. Section 103.176(f)(2) contains a special implementation rule for banks. This special implementation rule requires banks that have been subject to the provisions of our interim final rule 38 to continue to comply with the existing enhanced due diligence requirements for correspondent accounts of section 312 until the effective dates described in section 103.176(f)(1) are triggered. 38 *See supra* note 5 and accompanying text. Section 103.176(f)(3) contains a special implementation rule for all other covered financial institutions. This section provides that securities broker-dealers, futures commission merchants, introducing brokers, mutual funds, and trust banks or trust companies that have a federal regulator are not required to comply with the enhanced due diligence provisions until the effective dates described in section 103.176(f)(1) are triggered. E. Section 103.176(g)—Exemptions New section 103.176(g) restates and conforms the exemption for certain financial institutions from the due diligence and enhanced due diligence requirements of section 103.176. IV. Regulatory Flexibility Act We certified that the January 4, 2006 proposed rule would not have a significant economic impact on a substantial number of small entities. We made this certification because the proposed rule would provide guidance concerning certain mandated enhanced due diligence requirements in section 312 of the Act, and because the financial institutions that would be covered by the rule tend to be larger institutions. One commenter expressed concern that the final rule will make it prohibitive for smaller institutions to engage in the foreign correspondent banking business. However, this final rule does not impose significant new burdens on covered financial institutions of any size. Since at least 2002, the depository institutions covered by this rule have been subject to an interim final rule containing substantially similar enhanced due diligence requirements. 39 Other covered financial institutions have been required to establish and maintain anti-money laundering programs reasonably designed, among other things, to prevent money laundering through correspondent accounts generally. 40 39 *Due Diligence Anti-Money Laundering Programs for Certain Foreign Accounts,* 67 FR 48348 (July 23, 2002). 40 *See* Anti-Money Laundering Programs for Financial Institutions, 67 FR 21110 (April 29, 2002) (establishing anti-money laundering program requirements for federally regulated depository institutions, broker-dealers in securities, futures commission merchants, and introducing brokers in commodities). *See also Anti-Money Laundering Program for Mutual Funds,* 67 FR 21117 (April 29, 2002). Because the terms of the interim rule and the final rule are substantially similar, and because the single comment does not provide evidence of any significant economic impact created by the interim or final rule, we believe that the final rule will not have a significant economic impact on a substantial number of small businesses. We also note that even if, as the comment asserts, the rule made foreign correspondent banking prohibitive for small entities, this would establish neither that a substantial number of small entities engage in foreign correspondent banking, nor that any that do derive significant revenue from such business. Moreover, we have incorporated flexibility into this final rule, particularly by shifting from the prescriptive approach to compliance proposed in the First Proposed Rule to the risk-based approach adopted in this final rule. This flexibility will permit each covered financial institution to tailor its enhanced due diligence program for statutorily designated foreign banks 41 to fit its size and the risks of its customer base. 41 *See supra* text accompanying footnotes 11-13. For these reasons, it is hereby certified, pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ), that this final rule will not have a significant economic impact on a substantial number of small businesses. V. Executive Order 12866 This final rule is not a “significant regulatory action” as defined in Executive Order 12866. Accordingly, a regulatory assessment is not required. VI. Paperwork Reduction Act The collection of information contained in this final rule has been approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), and was assigned Office of Management and Budget Control Number 1506-0046. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. The only requirements in the final rule that are subject to the Paperwork Reduction Act are set forth in 31 CFR 103.176(b)(1)(i), 103.176(b)(1)(iii)(A), and 103.176(b)(3), requiring covered financial institutions to obtain information relating to certain foreign banks' anti-money laundering programs, when appropriate, to obtain information from such foreign banks about the identity of any person with authority to direct transactions through a correspondent account that is a payable-through account and the sources and beneficial owner of funds or other assets in the payable-through account, when appropriate, and to obtain the identity of certain owners of any such foreign bank that is privately owned and the nature and extent of the ownership interest. The estimated annual average burden associated with this collection of information was one hour per recordkeeper. We estimated that there would be 28,163 recordkeepers, for a total of 28,163 annual burden hours. 42 We received two comments on this burden estimate. 42 Second Proposed Rule, 71 FR at 519. One commenter argued that the burden would “number into the hundreds of hours, at a minimum.” The number of burden hours set forth under the Paperwork Reduction Act is designed to be an average, however, and includes recordkeepers subject to the provisions of this final rule that may not maintain correspondent accounts for statutorily designated foreign banks. Moreover, the number of burden hours pertains only to the collection of information when appropriate, and not to the review of the information. Another commenter suggested that the number of burden hours may be two hours per year instead of one hour. We accept that estimate and, accordingly, have adjusted our final estimate of burden hours to two hours per recordkeeper. Comments concerning the accuracy of this recordkeeping burden estimate and suggestions for reducing this burden should be sent (preferably by fax (202-395-6974)) to Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Office of Management and Budget, Paperwork Reduction Project (1506), Washington, DC 20503 (or by the internet to *ahunt@omb.eop.gov* ), with a copy by regular mail to Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183, “ATTN: Regulation Identifier Number 1506-AA29” or by electronic mail to *regcomments@fincen.treas.gov* with the caption “ATTN: Regulatory Information Number 1506-AA29” in the body of the text. List of Subjects in 31 CFR Part 103 Banks, Banking, Brokers, Counter-money laundering, Counter-terrorism, Currency, Foreign banking, Reporting and recordkeeping requirements. Authority and Issuance For the reasons set forth above, we are amending subpart I of 31 CFR Part 103 as follows: PART 103—FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS 1. The authority citation for part 103 continues to read as follows: Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 and 5316-5332; title III, secs. 311, 312, 313, 314, 319, 326, 352, Pub. L. 107-56, 115 Stat. 307. 2. In subpart I, amend § 103.176 by adding paragraphs
(b)and (c), revising paragraphs
(d)and (e), and adding paragraphs
(f)and
(g)to read as follows: § 103.176 Due diligence programs for correspondent accounts for foreign financial institutions.
(b)*Enhanced due diligence for certain foreign banks.* In the case of a correspondent account established, maintained, administered, or managed in the United States for a foreign bank described in paragraph
(c)of this section, the due diligence program required by paragraph
(a)of this section shall include enhanced due diligence procedures designed to ensure that the covered financial institution, at a minimum, takes reasonable steps to:
(1)Conduct enhanced scrutiny of such correspondent account to guard against money laundering and to identify and report any suspicious transactions in accordance with applicable law and regulation. This enhanced scrutiny shall reflect the risk assessment of the account and shall include, as appropriate:
(i)Obtaining and considering information relating to the foreign bank's anti-money laundering program to assess the risk of money laundering presented by the foreign bank's correspondent account;
(ii)Monitoring transactions to, from, or through the correspondent account in a manner reasonably designed to detect money laundering and suspicious activity; and (iii)(A) Obtaining information from the foreign bank about the identity of any person with authority to direct transactions through any correspondent account that is a payable-through account, and the sources and beneficial owner of funds or other assets in the payable-through account.
(B)For purposes of paragraph (b)(1)(iii)(A) of this section, a *payable-through account* means a correspondent account maintained by a covered financial institution for a foreign bank by means of which the foreign bank permits its customers to engage, either directly or through a subaccount, in banking activities usual in connection with the business of banking in the United States.
(2)Determine whether the foreign bank for which the correspondent account is established or maintained in turn maintains correspondent accounts for other foreign banks that use the foreign correspondent account established or maintained by the covered financial institution and, if so, take reasonable steps to obtain information relevant to assess and mitigate money laundering risks associated with the foreign bank's correspondent accounts for other foreign banks, including, as appropriate, the identity of those foreign banks. (3)(i) Determine, for any correspondent account established or maintained for a foreign bank whose shares are not publicly traded, the identity of each owner of the foreign bank and the nature and extent of each owner's ownership interest.
(ii)For purposes of paragraph (b)(3)(i) of this section:
(A)*Owner* means any person who directly or indirectly owns, controls, or has the power to vote 10 percent or more of any class of securities of a foreign bank. For purposes of this paragraph (b)(3)(ii)(A):
(1)Members of the same family shall be considered to be one person; and
(2)*Same family* has the meaning provided in § 103.175(l)(2)(ii).
(B)*Publicly traded* means shares that are traded on an exchange or an organized over-the-counter market that is regulated by a foreign securities authority as defined in section 3(a)(50) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(50)).
(c)*Foreign banks to be accorded enhanced due diligence.* The due diligence procedures described in paragraph
(b)of this section are required for any correspondent account maintained for a foreign bank that operates under:
(1)An offshore banking license;
(2)A banking license issued by a foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization of which the United States is a member and with which designation the U.S. representative to the group or organization concurs; or
(3)A banking license issued by a foreign country that has been designated by the Secretary as warranting special measures due to money laundering concerns.
(d)*Special procedures when due diligence or enhanced due diligence cannot be performed.* The due diligence program required by paragraphs
(a)and
(b)of this section shall include procedures to be followed in circumstances in which a covered financial institution cannot perform appropriate due diligence or enhanced due diligence with respect to a correspondent account, including when the covered financial institution should refuse to open the account, suspend transaction activity, file a suspicious activity report, or close the account.
(e)*Applicability rules for general due diligence.* The provisions of paragraph
(a)of this section apply to covered financial institutions as follows:
(1)*General rules* —(i) *Correspondent accounts established on or after July 5, 2006.* Effective July 5, 2006, the requirements of paragraph
(a)of this section shall apply to each correspondent account established on or after that date.
(ii)*Correspondent accounts established before July 5, 2006.* Effective October 2, 2006, the requirements of paragraph
(a)of this section shall apply to each correspondent account established before July 5, 2006.
(2)*Special rules for certain banks.* Until the requirements of paragraph
(a)of this section become applicable as set forth in paragraph (e)(1) of this section, the due diligence requirements of 31 U.S.C. 5318(i)(1) shall continue to apply to any covered financial institution listed in § 103.175(f)(1)(i) through (vi).
(3)*Special rules for all other covered financial institutions.* The due diligence requirements of 31 U.S.C 5318(i)(1) shall not apply to a covered financial institution listed in § 103.175(f)(1)(vii) through
(x)until the requirements of paragraph
(a)of this section become applicable as set forth in paragraph (e)(1) of this section.
(f)*Applicability rules for enhanced due diligence.* The provisions of paragraph
(b)of this section apply to covered financial institutions as follows:
(1)*General rules* —(i) *Correspondent accounts established on or after* February 5, 2008. Effective February 5, 2008, the requirements of paragraph
(b)of this section shall apply to each correspondent account established on or after such date.
(ii)*Correspondent accounts established before* February 5, 2008. Effective May 5, 2008, the requirements of paragraph
(b)of this section shall apply to each correspondent account established before February 5, 2008.
(2)*Special rules for certain banks.* Until the requirements of paragraph
(b)of this section become applicable as set forth in paragraph (f)(1) of this section, the enhanced due diligence requirements of 31 U.S.C. 5318(i)(2) shall continue to apply to any covered financial institutions listed in § 103.175(f)(1)(i) through (vi).
(3)*Special rules for all other covered financial institutions.* The enhanced due diligence requirements of 31 U.S.C. 5318(i)(2) shall not apply to a covered financial institution listed in § 103.175(f)(1)(vii) through
(x)until the requirements of paragraph
(b)of this section become applicable, as set forth in paragraph (f)(1) of this section.
(g)*Exemptions* —(1) *Exempt financial institutions.* Except as provided in this section, a financial institution defined in 31 U.S.C. 5312(a)(2) or (c)(1), or § 103.11(n) is exempt from the requirements of 31 U.S.C. 5318(i)(1) and (i)(2) pertaining to correspondent accounts.
(2)*Other compliance obligations of financial institutions unaffected.* Nothing in paragraph
(g)of this section shall be construed to relieve a financial institution from its responsibility to comply with any other applicable requirement of law or regulation, including title 31, United States Code, and this part. Dated: August 2, 2007. James H. Freis, Jr., Director, Financial Crimes Enforcement Network. [FR Doc. E7-15467 Filed 8-8-07; 8:45 am] BILLING CODE 4810-02-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [CGD14-07-001] RIN 1625-AA87 Security Zones; Oahu, Maui, Hawaii, and Kauai, HI AGENCY: Coast Guard, DHS. ACTION: Final rule. SUMMARY: The Coast Guard is changing the permanent security zones in waters adjacent to the islands of Oahu, Maui, Hawaii, and Kauai, Hawaii. Review of the established zones indicated the need for some adjustment to better suit vessel and facility security in and around Hawaiian ports. The changes are intended to enhance the protection of personnel, vessels, and facilities from acts of sabotage or other subversive acts, accidents, or other causes of a similar nature. DATES: This rule is effective September 10, 2007. ADDRESSES: Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket CGD14-07-001 and are available for inspection and copying at U.S. Coast Guard Sector Honolulu, Sand Island Parkway, Honolulu, Hawaii 96819-4398 between 7 a.m. and 3:30 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Lieutenant (Junior Grade) Jasmin Parker, U.S. Coast Guard Sector Honolulu at
(808)842-2600. SUPPLEMENTARY INFORMATION: Regulatory Information On June 19, 2007, we published a notice of proposed rulemaking
(NPRM)entitled Security Zones; Oahu, Maui, Hawaii, and Kauai, HI in the **Federal Register** (72 FR 33711). We received no letters commenting on the proposed rule. No public meeting was requested, and none was held. Background and Purpose The terrorist attacks against the United States that occurred on September 11, 2001, have emphasized the need for the United States to establish heightened security measures in order to protect the public, ports and waterways, and the maritime transportation system from future acts of terrorism or other subversive acts. The terrorist organization al-Qaeda and other similar groups remain committed to conducting armed attacks against U.S. interests, including civilian targets within the United States. National security and intelligence officials warn that future terrorist attacks are likely. In response to this threat, on December 19, 2005, the Coast Guard published a final rule establishing the current permanent security zones in designated waters surrounding the Hawaiian Islands (70 FR 75036, December 19, 2005). The current zones replaced zones established by a final rule issued in 2003 (68 FR 20344, April 25, 2003) which in turn replaced temporary zones that had been established, and then extended, in the waters surrounding the Hawaiian Islands soon after the attacks (66 FR 52693, October 17, 2001). The existing permanent security zones have been in operation for more than 18 months. We have recently completed a periodic review of port and harbor security procedures and considered the oral feedback that local vessel operators gave to Coast Guard units enforcing the zones. In response, the Coast Guard is reducing the scope of the *Honolulu International Airport, North Section* security zone. The Coast Guard is also establishing new zones at Kawaihae Harbor, Hawaii and Kahe Point, Oahu to address a new vessel operation and recent identification of a critical facility. Additionally, we are clarifying the application of large cruise ship
(LCS)security zones to the new Hawaii SuperFerry. Our action with respect to the *Honolulu International Airport, North Section* zone (33 CFR 165.1407(a)(4)(i)) is to change it from one that is perpetually activated and enforced to one that is used only in response to a threat. This change, permitting a reduced security posture in the waters adjacent to Honolulu International Airport, is based on a 2006 reevaluation of airport protection requirements. The new arrangement offers us the opportunity to decrease disruption to maritime commerce and inconvenience to small entities by making the zone subject to activation and enforcement only under certain conditions rather than all the time. All of the security zones described in this final rule are permanently established. We use the word “activated” to describe when these permanently established zones are subject to enforcement. Our addition of a Kawaihae Harbor security zone is due to the arrival of the Hawaii SuperFerry. In June 2004, Hornblower Marine Services, Inc. signed a Marine Management Operating Agreement and Construction Oversight contract for the new Hawaii SuperFerry operation, an inter-island ferry service. The service will transport passengers and vehicles to Hawaiian island ports, including Kawaihae Harbor on the island of Hawaii. Each day, these ferries will carry many passengers as well as cargo and vehicles, presenting the same security vulnerabilities as the large cruise ships that operate in those areas. Kawaihae Harbor, however, lacked a security zone to protect such vessels, so we are creating one there. Additionally, the definition of *large cruise ship*
(LCS)in 33 CFR 165.1408(b), 165.1409(b), and 165.1410(b) did not adequately describe the Hawaii SuperFerry or any other vessel of similar size and carriage capacity. Therefore, the Coast Guard is revising the term *large cruise ship* to clarify that the presence of Superferry-type vessels triggers the activation and enforcement of the Maui, Hawaii, and Kauai security zones described in those three sections. Our creation of a Kahe Point security zone is meant to protect the Hawaiian Electric Company power plant at Kahe Point, which produces a significant portion of the electricity for the island of Oahu. This beach-front power plant uses sea water piped in directly from the ocean to cool its turbines. Loss or damage to this cooling water system due to sabotage would reduce the power-generating capacity of the plant and overburden the other island facilities. The *Kahe Point, Oahu* zone is intended to enhance the plant's security. Discussion of Comments and Changes We did not receive any comments in response to our NPRM. Our review of the regulation text, however, revealed a typo in the proposed amendment of 33 CFR 165.1410(b). In that paragraph, the word “ferries” should have been singular, so we made that change for this final rule. No other changes were made to the regulation text proposed in the NPRM. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. The Coast Guard expects the economic impact of this rule to be so minimal that a full Regulatory Evaluation is unnecessary. This expectation is based on the short activation and enforcement duration of the zones created or impacted by this rule, as well as the limited geographic area affected by them. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. While we are aware that affected areas have small commercial entities, including canoe and boating clubs and small commercial businesses that provide recreational services, we anticipate that there will be little or no impact to these small entities due to the narrowly tailored scope of these changes. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding this rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard. Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969
(NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g) of the Instruction, from further environmental documentation. That provision excludes regulations establishing or changing security zones. A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES . List of Subjects in 33 CFR Part 165 Harbors, Marine safety, Navigation (water), Reports and record keeping requirements, Security measures, Waterways. For the reasons set out in the preamble, the Coast Guard amends 33 CFR part 165 as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1. 2. Amend § 165.1407 to add paragraph (a)(7) and to revise the paragraph
(d)heading and the introductory text of paragraph (d)(1) to read as follows: § 165.1407 Security Zones; Oahu, HI.
(a)* * *
(7)*Kahe Point, Oahu.* All waters adjacent to the Hawaiian Electric Company power plant at Kahe Point within 500 yards of 21° 21.30' N/158′ 07.7° W (lighted tower).
(d)*Notice of enforcement or suspension of enforcement of security zones.*
(1)The security zones described in paragraphs (a)(3) (Kalihi Channel and Keehi Lagoon, Oahu), (a)(4)(i) (Honolulu International Airport, North Section), (a)(4)(ii) (Honolulu International Airport, South Section), and (a)(6) (Barbers Point Harbor, Oahu) of this section, will be enforced only upon the occurrence of one of the following events— 3. Amend § 165.1408 to revise paragraphs (a)(1), (a)(2), (b), (c)(1), and (c)(2) to read as follows: § 165.1408 Security Zones; Maui, HI.
(a)* * *
(1)*Kahului Harbor, Maui.* All waters extending 100 yards in all directions from each large passenger vessel in Kahului Harbor, Maui, HI or within 3 nautical miles seaward of the Kahului Harbor COLREGS DEMARCATION (See 33 CFR 80.1460). This is a moving security zone when the LPV is in transit and becomes a fixed zone when the LPV is anchored, position-keeping, or moored.
(2)*Lahaina, Maui.* All waters extending 100 yards in all directions from each large passenger vessel in Lahaina, Maui, whenever the LPV is within 3 nautical miles of Lahaina Light (LLNR 28460). The security zone around each LPV is activated and enforced whether the LPV is underway, moored, position-keeping, or anchored, and will continue in effect until such time as the LPV departs Lahaina and the 3-mile enforcement area.
(b)*Definitions.* As used in this section, *large passenger vessel* or *LPV* means a cruise ship more than 300 feet in length that carries passengers for hire, and any passenger ferry more than 300 feet in length that carries passengers for hire.
(c)*Regulations.*
(1)Under 33 CFR 165.33, entry into the security zones created by this section is prohibited unless authorized by the Coast Guard Captain of the Port, Honolulu or his or her designated representatives. When authorized passage through a large passenger vessel security zone, all vessels must operate at the minimum speed necessary to maintain a safe course and must proceed as directed by the Captain of the Port or his or her designated representatives. No person is allowed within 100 yards of an LPV that is underway, moored, position-keeping, or at anchor, unless authorized by the Captain of the Port or his or her designated representative.
(2)When conditions permit, the Captain of the Port, or his or her designated representative, may permit vessels that are at anchor, restricted in their ability to maneuver, or constrained by draft to remain within an LPV security zone in order to ensure navigational safety. 4. Amend § 165.1409 to revise paragraphs (a)(1), (a)(2), (b), (c)(1), and (c)(2) and to add paragraph (a)(3) to read as follows: § 165.1409 Security Zones; Hawaii, HI.
(a)* * *
(1)*Hilo Harbor, Hawaii.* All waters extending 100 yards in all directions from each large passenger vessel in Hilo Harbor, Hawaii, HI or within 3 nautical miles seaward of the Hilo Harbor COLREGS DEMARCATION (See 33 CFR 80.1480). This is a moving security zone when the LPV is in transit and becomes a fixed zone when the LPV is anchored, position-keeping, or moored.
(2)*Kailua-Kona,* Hawaii. All waters extending 100 yards in all directions from each large passenger vessel in Kailua-Kona, Hawaii, whenever the LPV is within 3 nautical miles of Kukailimoku Point. The 100-yard security zone around each LPV is activated and enforced whether the LPV is underway, moored, position-keeping, or anchored and will continue in effect until such time as the LPV departs Kailua-Kona and the 3-mile enforcement area.
(3)*Kawaihae Harbor, Hawaii.* All waters extending 100 yards in all directions from each large passenger vessel in Kawaihae Harbor, Hawaii, or within 3 nautical miles seaward of the Kawaihae Harbor COLREGS DEMARCATION (See 33 CFR 80.1470). The 100-yard security zone around each LPV is activated and enforced whether the LPV is underway, moored, position-keeping, or anchored.
(b)*Definitions.* As used in this section, *large passenger vessel* or *LPV* means a cruise ship more than 300 feet in length that carries passengers for hire, and any passenger ferry more than 300 feet in length that carries passengers for hire.
(c)*Regulations.*
(1)Under 33 CFR 165.33, entry into the security zones created by this section is prohibited unless authorized by the Coast Guard Captain of the Port, Honolulu or his or her designated representative. When authorized passage through a large passenger vessel security zone, all vessels must operate at the minimum speed necessary to maintain a safe course and must proceed as directed by the Captain of the Port or his or her designated representatives. No person is allowed within 100 yards of a large passenger vessel that is underway, moored, position-keeping, or at anchor, unless authorized by the Captain of the Port or his or her designated representatives.
(2)When conditions permit, the Captain of the Port, or his or her designated representatives, may permit vessels that are at anchor, restricted in their ability to maneuver, or constrained by draft to remain within an LPV security zone in order to ensure navigational safety. 5. Amend § 165.1410 to revise paragraphs (a)(1), (a)(2), (b), (c)(1), and (c)(2) to read as follows: § 165.1410 Security Zones; Kauai, HI.
(a)* * *
(1)*Nawiliwili Harbor, Lihue, Kauai.* All waters extending 100 yards in all directions from each large passenger vessel in Nawiliwili Harbor, Kauai, HI or within 3 nautical miles seaward of the Nawiliwili Harbor COLREGS DEMARCATION (See 33 CFR 80.1450). This is a moving security zone when the LPV is in transit and becomes a fixed zone when the LPV is anchored, position-keeping, or moored.
(2)*Port Allen, Kauai.* All waters extending 100 yards in all directions from each large passenger vessel in Port Allen, Kauai, HI or within 3 nautical miles seaward of the Port Allen COLREGS DEMARCATION (See 33 CFR 80.1440). This is a moving security zone when the LPV is in transit and becomes a fixed zone when the LPV is anchored, position-keeping, or moored.
(b)*Definitions.* As used in this section, *large passenger vessel* or *LPV* means a cruise ship more than 300 feet in length that carries passengers for hire, and any passenger ferry more than 300 feet in length that carries passengers for hire.
(c)*Regulations.*
(1)Under 33 CFR 165.33, entry into the security zones created by this section is prohibited unless authorized by the Coast Guard Captain of the Port, Honolulu or his or her designated representative. When authorized passage through an LPV security zone, all vessels must operate at the minimum speed necessary to maintain a safe course and must proceed as directed by the Captain of the Port or his or her designated representative. No person is allowed within 100 yards of a large passenger vessel that is underway, moored, position-keeping, or at anchor, unless authorized by the Captain of the Port or his or her designated representative.
(2)When conditions permit, the Captain of the Port, or his or her designated representative, may permit vessels that are at anchor, restricted in their ability to maneuver, or constrained by draft to remain within an LPV security zone in order to ensure navigational safety. Dated: July 30, 2007. Sally Brice-O'Hara, Rear Admiral, U.S. Coast Guard, Commander, Fourteenth Coast Guard District. [FR Doc. E7-15508 Filed 8-8-07; 8:45 am] BILLING CODE 4910-15-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R07-OAR-2007-0619; FRL-8450-7] Approval and Promulgation of Implementation Plans; State of Missouri AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final rule. SUMMARY: The EPA is approving a revision to the maintenance plan prepared by Missouri to maintain the 8-hour national ambient air quality standard (NAAQS) for ozone in the Missouri portion of the Kansas City area. The Kansas City area is designated attainment for the ozone NAAQS. This revision is required by the Clean Air Act. A similar final action pertaining to the Kansas portion of the Kansas City maintenance area is being done in conjunction with this rulemaking. The effect of this approval is to ensure Federal enforceability of the state air program plan and to maintain consistency between the state-adopted plan and the approved SIP. DATES: This direct final rule will be effective October 9, 2007, without further notice, unless EPA receives adverse comment by September 10, 2007. If adverse comment is received, EPA will publish a timely withdrawal of the direct final rule in the **Federal Register** informing the public that the rule will not take effect. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-OAR-2007-0619, by one of the following methods: 1. *http://www.regulations.gov.* Follow the on-line instructions for submitting comments. 2. *E-mail: algoe-eakin.amy@epa.gov.* 3. *Mail:* Amy Algoe-Eakin, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. 4. *Hand Delivery or Courier.* Deliver your comments to Amy Algoe-Eakin, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. *Instructions:* Direct your comments to Docket ID No. EPA-R07-OAR-2007-0619. EPA's policy is that all comments received will be included in the public docket without change and may be made available on-line at *http://www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit 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, any form of encryption, and be free of any defects or viruses. *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 Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. The Regional Office's official hours of business are Monday through Friday, 8 to 4:30 excluding Federal holidays. The interested persons wanting to examine these documents should make an appointment with the office at least 24 hours in advance. FOR FURTHER INFORMATION CONTACT: Amy Algoe-Eakin at
(913)551-7942, or by e-mail at *algoe-eakin.amy@epa.gov.* SUPPLEMENTARY INFORMATION: Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This section provides additional information by addressing the following questions: What is a Section 110(a)(1) maintenance plan? What are the components of a Section 110(a)(1) 8-hour ozone maintenance plan? How has the state addressed the components of a Section 110(a)(1) 8-hour ozone maintenance plan? What action is EPA taking? What is a Section 110(a)(1) maintenance plan? Section 110(a)(1) of the Clean Air Act (CAA or Act) requires, in part, that states submit to EPA plans to maintain any NAAQS promulgated by EPA. EPA interprets this provision to require that areas that were maintenance areas for the 1-hour ozone NAAQS but attainment for the 8-hour ozone NAAQS submit a plan to demonstrate the continued maintenance of the 8-hour ozone NAAQS. EPA established June 15, 2007, three years after the effective date of the initial 8-hour ozone designations, as the deadline for submission of plans for these areas. Missouri's Section 110(a)(1) maintenance plan was received by EPA on May 23, 2007. What are the components of a Section 110(a)(1) 8-hour ozone maintenance plan? On May 20, 2005, EPA issued guidance that applies, in part, to areas that are designated attainment/unclassifiable for the 8-hour ozone standard and that had an approved 1-hour ozone maintenance plan. The purpose of the guidance, referred to as Section 110(a)(1) guidance, is to assist the states in the development of a SIP which addresses the maintenance requirements found in Section 110(a)(1) of the CAA. There are five components of the Section 110(a)(1) maintenance plan which are:
(1)An attainment inventory, which is based on actual typical summer day emissions of volatile organic compounds
(VOCs)and oxides of nitrogen (NO <sup>X</sup> ) for a ten-year period from a base year as chosen by the state;
(2)a maintenance demonstration which shows how the area will remain in compliance with the 8-hour ozone standard for 10 years after the effective date of designations (June 15, 2004);
(3)a commitment to continue to operate air quality monitors;
(4)a contingency plan that will ensure that a violation of the 8-hour ozone NAAQS is promptly addressed; and
(5)an explanation of how the state will track the progress of the maintenance plan. How has the state addressed the components of a Section 110(a)(1) 8-hour ozone maintenance plan? Missouri Department of Natural Resources'
(MDNR)8-hour ozone maintenance plan addresses the components of the Section 110(a)(1) 8-hour ozone maintenance as outlined in EPA's May 20, 2005, guidance. Missouri has requested that the Section 110(a)(1) 8-hour ozone maintenance plan replace the existing Section 175A 1-hour ozone maintenance plan. *Emissions Inventory:* An emissions inventory is an itemized list of emission estimates for sources of air pollution in a given area for a specified time period. MDNR has provided a comprehensive and current emissions inventory for ozone precursors (NO <sup>X</sup> and VOCs) in the area. MDNR has chosen to use 2002 as the base year from which it projects emissions. The maintenance plan also includes an explanation of the methodology used for determining the anthropogenic (point, area, and mobile sources) emissions in the maintenance area. The inventory is based on emissions for a typical ozone season day. The term “typical” refers to emissions expected on a typical weekday during the months where ozone concentrations are typically the highest. For Kansas City, these months are June through August. *Maintenance Demonstration and Tracking Progress:* With regard to demonstrating continued maintenance of the 8-hour ozone standard, Missouri projects that the total emissions from the entire Kansas City Maintenance Area
(KCMA)will decrease during the ten-year maintenance period. MDNR has projected emissions for 10 years from the effective date of initial designations, or 2014. In 2002, the total anthropogenic emissions in the entire KCMA were 226.42 tons/ozone season day for VOCs and 316.09 tons/ozone season day for NO <sup>X</sup> . The projected 2014 anthropogenic emissions from the entire KCMA are 181.07 tons/ozone season day for VOCs and 180.08 tons/ozone season day for NO <sup>X</sup> . As such, the plan demonstrates that, from an emissions projections standpoint, emissions are projected to decrease. It is important to note that the formation of ozone is dependent on a number of variables which cannot be estimated through emissions growth and reduction calculations. A few of these variables include weather and the transport of ozone precursors from outside the maintenance area. In the Section 110(a)(1) maintenance plan, MDNR has indicated that the state will track the progress of the maintenance plan by updating the emissions inventory for the KCMA approximately every three years. The years of 2005, 2008, and 2011 were chosen as the years in which emissions will be reviewed. A review of the 2005 emissions inventory is underway. The emissions inventory update will include point, area, and onroad and offroad emissions. Information from these future updates will be compared with the projected growth estimates for the 2002 base inventory data to track maintenance of the standard. *Ambient Monitoring:* With regard to the ambient air monitoring component of the maintenance plan, Missouri's plan describes the ozone monitoring network in Kansas City and explains that states and local air agencies are responsible for the operation, maintenance and data collection at these monitoring sites. MDNR commits to continue operating air quality monitors in accordance with 40 CFR Part 58 to verify maintenance of the 8-hour ozone standard. If any changes to the monitoring locations become necessary, MDNR commits to working with EPA to ensure that the adequacy of the monitoring network is maintained. *Contingency Measures:* EPA interprets Section 110(a)(1) of the CAA to require that the state develop a contingency plan that will ensure that any violation of a NAAQS is promptly corrected. The purposes of the contingency measures, outlined in MDNR's maintenance plan, are to achieve sufficient VOC and/or NO <sup>X</sup> emissions to reduce further ozone monitored concentrations. Missouri and Kansas worked together to design a two-phased approach for the contingency measure portion of the maintenance plan. The approach includes specific triggers for each phase. The triggers are the same for both states although the measures vary slightly. For Phase 1, the Missouri plan provides that a violation of the 8-hour ozone standard, once quality assured, would trigger two control measures, which are
(1)early implementation of control devices on Clean Air Interstate Rule-(CAIR) affected coal-fired electric generating units; and
(2)an idle reduction regulation. Phase 2 contingency measures would be triggered by the occurrences of either of the following two events:
(1)A three-year design value for the area equaling or exceeding 0.089 parts per million
(ppm)which would become active one year following the end of the ozone season that triggered the Phase 1 contingency measures or
(2)three consecutive years following the Phase 1 trigger year with a design value greater than 0.084 ppm. Either of these events would implement the selection of control measures of Phase 2. Following the implementation of Phase 1, if any one year has a three-year design value equaling or exceeding 0.085 ppm, an evaluation to determine appropriate action will be undertaken by MDNR. The purpose of delaying the potential implementation of Phase 2 control measures for a period of time following the implementation of Phase 1 is to allow for Phase 1 controls to be initiated and have an effect on air quality in the region before Phase 2 is implemented. It also allows for further evaluation of the various control measures that could be implemented under Phase 2. Below are a few of the controls options being considered for Phase 2: NO <sup>X</sup> reductions to coal-fired electric generating units
(EGUs)not covered under CAIR that exceed 100 tons of NO <sup>X</sup> emissions per year; NO <sup>X</sup> reductions from industrial boilers and process heaters that exceed 100 tons of NO <sup>X</sup> emissions per year; NO <sup>X</sup> reductions from cement kilns that exceed 100 tons of NO <sup>X</sup> emissions per year; lowering the threshold for major sources of VOCs to 75 tons per year; enacting regulations to reduce VOC emissions from 46 architectural and industrial maintenance coatings, including traffic coatings; enacting emissions offsets of 1.1:1.0 for new sources; diesel Engine Chip Re-Flashing regulations; or enacting the gas-cap testing program. If triggered, the Phase 2 measures will be selected based on emission reduction benefits, cost effectiveness and timeframe for implementation. MDNR also would consider additional potential measures if other beneficial emission reduction methods are determined to be useful to the air quality in the KCMA. What action is EPA taking? Missouri has addressed the components of a maintenance plan pursuant to EPA's May 20, 2005, guidance. The Section 110(a)(1) 8-hour ozone Kansas City maintenance plan approved in this action will replace the existing Section 175A 1-hour ozone maintenance plan. Existing VOC control rules included in the 1-hour maintenance plan will remain in place. Missouri has committed to implementing the contingency measures within 24 months of the trigger date and will take action to maintain the standard in the event the contingency measures are triggered. We are processing this action as a direct final action because we do not anticipate any adverse comments. Please note that if EPA receives adverse comment on part of this rule and if that part can be severed from the remainder of the rule, EPA may adopt as final those parts of the rule that are not the subject of an adverse comment. 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 approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). 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 approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard. In reviewing state 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 state submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a state submission, to use VCS in place of a state 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 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.* ). The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 9, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Carbon monoxide, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds. Dated: July 27, 2007. John B. Askew, Regional Administrator, Region 7. Chapter I, title 40 of the Code of Federal Regulations is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart AA—Missouri 2. In § 52.1320(e) the table is amended by adding an entry in numerical order to read as follows: § 52.1320 Identification of plan.
(e)* * * EPA-Approved Missouri Nonregulatory SIP Provisions Name of nonregulatory SIP provision Applicable geographic or nonattainment area State submittal date EPA approval date Explanation * * * * * * *
(53)Maintenance Plan for the 8-hour ozone standard in the Missouri portion of the Kansas City area Kansas City 5/23/07 8/9/07 [ *insert FR page number where the document begins* ] This plan replaces numbers
(46)and (50). [FR Doc. E7-15264 Filed 8-8-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R07-OAR-2007-0620; FRL-8450-5] Approval and Promulgation of Implementation Plans; State of Kansas AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final rule. SUMMARY: The EPA is approving a revision to the Kansas State Implementation Plan
(SIP)prepared by Kansas to maintain the 8-hour national ambient air quality standard (NAAQS) for ozone in the Kansas portion of the Kansas City area. The Kansas City area is designated attainment for the ozone NAAQS. This revision is required by the Clean Air Act. A similar final rulemaking pertaining to the Missouri portion of the Kansas City maintenance area is being done in conjunction with this rulemaking. The effect of this approval is to ensure Federal enforceability of the state air program plan and to maintain consistency between the state-adopted plan and the approved SIP. DATES: This direct final rule will be effective October 9, 2007, without further notice, unless EPA receives adverse comment by September 10, 2007. If adverse comment is received, EPA will publish a timely withdrawal of the direct final rule in the **Federal Register** informing the public that the rule will not take effect. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-OAR-2007-0620, by one of the following methods: 1. *http://www.regulations.gov.* Follow the on-line instructions for submitting comments. 2. *E-mail:* *algoe-eakin.amy@epa.gov.* 3. *Mail:* Amy Algoe-Eakin, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. 4. Hand Delivery or Courier. Deliver your comments to Amy Algoe-Eakin, Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. *Instructions:* Direct your comments to Docket ID No. EPA-R07-OAR-2007-0620. 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. *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 Environmental Protection Agency, Air Planning and Development Branch, 901 North 5th Street, Kansas City, Kansas 66101. The Regional Office's official hours of business are Monday through Friday, 8 to 4:30 excluding Federal holidays. The interested persons wanting to examine these documents should make an appointment with the office at least 24 hours in advance. FOR FURTHER INFORMATION CONTACT: Amy Algoe-Eakin at
(913)551-7942, or by e-mail at *algoe-eakin.amy@epa.gov.* SUPPLEMENTARY INFORMATION: Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This section provides additional information by addressing the following questions: What is a Section 110(a)(1) maintenance plan? What are the components of a Section 110(a)(1) 8-hour ozone maintenance plan? How has the state addressed the components of a Section 110(a)(1) 8-hour ozone maintenance plan? What action is EPA taking? What is a Section 110(a)(1) maintenance plan? Section 110(a)(1) of the Clean Air Act (CAA or Act) requires, in part, that states submit to EPA plans to maintain any NAAQS promulgated by EPA. EPA interprets this provision to require that areas that were maintenance areas for the 1-hour ozone NAAQS but attainment for the 8-hour ozone NAAQS submit a plan to demonstrate the continued maintenance of the 8-hour ozone NAAQS. EPA established June 15, 2007, three years after the effective date of the initial 8-hour ozone designations, as the deadline for submission of plans for these areas. Kansas's Section 110(a)(1) maintenance plan was received by EPA on May 23, 2007. What are the components of a Section 110(a)(1) 8-hour ozone maintenance plan? On May 20, 2005, EPA issued guidance that applies, in part, to areas that are designated attainment/unclassifiable for the 8-hour ozone standard and that had an approved 1-hour ozone maintenance plan. The purpose of the guidance, referred to as Section 110(a)(1) guidance, is to assist the states in the development of a SIP which addresses the maintenance requirements found in Section 110(a)(1) of the CAA. There are five components of the Section 110(a)(1) maintenance plan which are:
(1)An attainment inventory, which is based on actual typical summer day emissions of volatile organic compounds
(VOCs)and oxides of nitrogen (NO <sup>X</sup> ) for a ten-year period from a base year as chosen by the state;
(2)a maintenance demonstration which shows how the area will remain in compliance with the 8-hour ozone standard for 10 years after the effective date of designations (June 15, 2004);
(3)a commitment to continue to operate air quality monitors;
(4)a contingency plan that will ensure that a violation of the 8-hour ozone NAAQS is promptly addressed; and
(5)an explanation of how the state will track the progress of the maintenance plan. How has the state addressed the components of a Section 110(a)(1) 8-hour ozone maintenance plan? The Kansas Department of Health and Environment's
(KDHE)8-hour ozone maintenance plan addresses the components of the Section 110(a)(1) 8-hour ozone maintenance plan as outlined in EPA's May 20, 2005, guidance. Kansas has requested that the Section 110(a)(1) 8-hour ozone maintenance plan replace the existing Section 175A 1-hour ozone maintenance plan. *Emissions Inventory:* An emissions inventory is an itemized list of emission estimates for sources of air pollution in a given area for a specified time period. KDHE has provided a comprehensive and current emissions inventory for ozone precursors (NO <sup>X</sup> , and VOCs) in the area. KDHE has chosen to use 2002 as the base year from which they project emissions. The maintenance plan also includes an explanation of the methodology used for determining the anthropogenic (point, area, and mobile sources) emissions in the maintenance area. The inventory is based on emissions for a typical ozone season day. The term “typical” refers to emissions expected on a typical weekday during the months where ozone concentrations are typically the highest. For Kansas City, these months are June through August. *Maintenance Demonstration and Tracking Progress:* With regard to demonstrating continued maintenance of the 8-hour ozone standard, Kansas projects that the total emissions from the entire Kansas City Maintenance Area
(KCMA)will decrease during the ten-year maintenance period. KDHE has projected emissions for 10 years from the effective date of initial designations, or 2014. In 2002, the total anthropogenic emissions in the entire KCMA were 226.42 tons/ozone season day for VOCs and 316.09 tons/ozone season day for NO <sup>X</sup> . The projected 2014 anthropogenic emissions from the entire KCMA are 181.07 tons/ozone season day for VOCs and 180.08 tons/ozone season day for NO <sup>X</sup> . As such, the plan demonstrates that, from an emissions projections standpoint, emissions are projected to decrease. It is important to note that the formation of ozone is dependent on a number of variables which cannot be estimated through emissions growth and reduction calculations. A few of these variables include weather and the transport of ozone precursors from outside the maintenance area. In the Section 110(a)(1) maintenance plan, KDHE has indicated that the state will track the progress of the maintenance plan by updating the emissions inventory for the KCMA approximately every three years. The years of 2005, 2008, and 2011 were chosen as the years in which emissions will be reviewed. A review of the 2005 emissions inventory is underway. The emissions inventory update will include point, area, and onroad and offroad emissions. Information from these future updates will be compared with the projected growth estimates for the 2002 base inventory data to track maintenance of the standard. *Ambient Monitoring:* With regard to the ambient air monitoring component of the maintenance plan, Kansas's plan describes the ozone monitoring network in Kansas City and explains that states and local air agencies are responsible for the operation, maintenance and data collection at these monitoring sites. KDHE commits to continue operating air quality monitors in accordance with 40 CFR Part 58 to verify maintenance of the 8-hour ozone standard. If any changes to the monitoring locations become necessary, KDHE commits to working with EPA to ensure that the adequacy of the monitoring network is maintained. *Contingency Measures:* EPA interprets Section 110(a)(1) of the CAA to require that the state develop a contingency plan which will ensure that any violation of an NAAQS is promptly corrected. The purposes of the contingency measures, outlined in KDHE's maintenance plan, are to achieve sufficient VOC and/or NO <sup>X</sup> emissions to reduce ozone monitored concentrations. Kansas and Missouri worked to design a two-phased approach for the contingency measure portion of the maintenance plan. The approach includes specific triggers for each phase. The triggers are the same for both states, although the measures vary slightly. For Phase 1, the Kansas plan provides that a violation of the 8-hour ozone standard, once quality assured, would trigger two control measures, which are,
(1)reduction in NO <sup>X</sup> emission from point sources greater than 1000 tons of actual annual emissions from the entire facility averaged over the last three years of complete, quality-assured inventory data in Wyandotte and Johnson Counties. This would be accomplished through either NO <sup>X</sup> Reasonable Available Control Technology
(RACT)rules or signed agreements with affected sources, and
(2)diesel idle reduction in Wyandotte and Johnson Counties through administrative regulations or local ordinances. If this measure is implemented, KDHE would develop the enforcement mechanism through contracts with local agencies. Phase 2 contingency measures would be triggered by the occurrences of either of the following two events:
(1)A three-year design value for the area equaling or exceeding 0.089 parts per million
(ppm)which would become active one year following the end of the ozone season that triggered the Phase 1 contingency measures or
(2)three consecutive years following the Phase 1 trigger year with a design value greater than 0.084 ppm. Either of these events would implement the selection of control measures of Phase 2. Following the implementation of Phase 1, if any one year has a three-year design value equaling or exceeding 0.085 ppm, an evaluation to determine appropriate action will be undertaken by KDHE. The purpose of delaying the potential implementation of Phase 2 control measures for a period of time following the implementation of Phase 1 is to allow for Phase 1 controls to be initiated and have an effect on air quality in the region before Phase 2 is implemented. It also allows for further evaluation of the various control measures that could be implemented under Phase 2. Below are a few of the control options being considered for Phase 2: • Reductions in NO <sup>X</sup> emissions from point sources that exceed 100 tons of actual annual emissions from the entire facility averaged over the last three years of complete, quality-assured inventory data in Wyandotte and Johnson Counties. This would be accomplished through either NO <sup>X</sup> RACT rules or signed agreements with affected sources. • Reductions in NO <sup>X</sup> emissions from point sources greater than 1000 tons of *actual* annual emissions from the entire facility averaged over the last three years of complete, quality-assured inventory data in areas located south of and outside the KCMA (Miami and Linn Counties). Based on current emissions inventory, this would affect two sources. Reductions would be accomplished through either a regional NO <sup>X</sup> administrative regulation or signed agreements with affected sources. • Open burning restrictions in Wyandotte and Johnson Counties. • Lower threshold for major sources of VOC to 75 tons per year
(tpy)in Wyandotte and Johnson Counties. The KDHE would evaluate remaining large VOC emitters subject to existing VOC RACT rules to determine if further reductions could be achieved (VOC RACT rules). • VOC control for 46 Architectural and Industrial Maintenance Coatings, including traffic coatings in Wyandotte and Johnson Counties. • Diesel Engine Chip Re-Flashing regulations in Wyandotte and Johnson Counties. If triggered, the Phase 2 measures will be selected based on emission reduction benefits, cost effectiveness and timeframe for implementation. KDHE also would consider additional potential measures if other beneficial emission reduction methods are determined to be useful to the air quality in the KCMA. What action is EPA taking? Kansas has addressed the components of a maintenance plan pursuant to EPA's May 20, 2005, guidance. The section 110(a)(1) 8-hour ozone Kansas City maintenance plan approved in this action will replace the existing section 175A 1-hour ozone maintenance plan. Kansas has committed to continue implementation of the VOC control measures in the 1-hour maintenance plan. Kansas has also committed to implementing the contingency measures no later than 24 months after the trigger date and will take action to maintain the standard in the event the contingency measures are triggered. We are processing this action as a direct final action because we do not anticipate any adverse comments. Please note that if EPA receives adverse comment on part of this rule and if that part can be severed from the remainder of the rule, EPA may adopt as final those parts of the rule that are not the subject of an adverse comment. 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 approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). 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 approves a State rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a State rule implementing a Federal standard. In reviewing state 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 state submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a state submission, to use VCS in place of a state 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 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.). The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 9, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds. Dated: July 27, 2007. John B. Askew, Regional Administrator, Region 7. Chapter I, title 40 of the Code of Federal Regulations is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart R—Kansas 2. In § 52.870(e) the table is amended by adding an entry at the end of the table to read as follows: § 52.870 Identification of plan.
(e)* * * EPA-Approved Kansas Nonregulatory Provisions Name of nonregulatory SIP provision Applicable geographic or nonattainment area State submittal date EPA approval date Explanation * * * * * * *
(31)Maintenance Plan for the 8-hour ozone standard in the Kansas portion of the Kansas City area Kansas City 5/23/07 8/9/07 [ *insert FR page number where the document begins* ] This plan replaces numbers
(28)and (29). [FR Doc. E7-15251 Filed 8-8-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R05-OAR-2007-0001; FRL-8451-9] Determination of Attainment, Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes; Ohio; Redesignation of the Toledo Area 8-Hour Ozone Nonattainment Area to Attainment AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: The Ohio Environmental Protection Agency (Ohio EPA) submitted a request on December 22, 2006, and supplemented it on March 9, 2007, for redesignation of the Toledo, Ohio area (Lucas and Wood Counties) to attainment for the 8-hour ozone standard. The submission also includes a maintenance plan that provides for continued attainment through 2018. On June 12, 2007, EPA proposed to approve this submission. EPA provided a 30-day review and comment period. One comment, from BP Products, North America Inc., was received supporting EPA's proposal. Today, EPA is approving Ohio's request and corresponding State Implementation Plan
(SIP)revision. In so doing, EPA is making a determination that the Toledo, Ohio area has attained the 8-hour ozone National Ambient Air Quality Standard (NAAQS). This determination is based on three years of complete, quality-assured ambient air quality monitoring data for the 2004-2006 ozone seasons that demonstrate that the 8-hour ozone NAAQS has been attained in the area. Preliminary 2007 air quality data show that the area continues to attain the 8-hour ozone standard. EPA is approving the maintenance plan for this area and is redesignating the area to attainment. Finally, EPA is approving, for purposes of transportation conformity, the motor vehicle emission budgets (MVEBs) for the years 2009 and 2018. DATES: This final rule is effective on August 9, 2007. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-R05-OAR-2007-0001. All documents in the docket are listed on the *www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy at the Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays. We recommend that you telephone Michael G. Leslie, Environmental Engineer, at
(312)353-6680 before visiting the Region 5 office. FOR FURTHER INFORMATION CONTACT: Michael G. Leslie, Environmental Engineer, Criteria Pollutant Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604,
(312)353-6680, *leslie.michael@epa.gov.* SUPPLEMENTARY INFORMATION: In the following, whenever “we,” “us,” or “our” are used, we mean the United States Environmental Protection Agency. Table of Contents I. What Is the Background for This Rule? II. What Comments Did We Receive on the Proposed Action? III. What Are Our Final Actions? IV. Statutory and Executive Order Review I. What Is the Background for This Rule? The background for today's action is discussed in detail in EPA's June 12, 2007, proposal (72 FR 32246). In that rulemaking, we noted that, 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 ozone concentrations is less than or equal to 0.08 ppm. (See 69 FR 23857 (April 30, 2004) for further information). The data completeness requirement is met when the average percent of days with valid ambient monitoring data is greater than 90%, and no single year has less than 75% data completeness, as determined in accordance with Appendix I of part 50. Under the CAA, EPA may redesignate nonattainment areas to attainment if sufficient complete, quality-assured data are available to determine that the area has attained the standard and that it meets the other CAA redesignation requirements in section 107(d)(3)(E). The Ohio EPA submitted a request on December 22, 2006, and supplemented it on March 9, 2007, for redesignation of the Toledo, Ohio area, which includes Lucas and Wood Counties, to attainment for the 8-hour ozone standard. The request included three years of complete, quality-assured data for the period of 2004 through 2006, indicating that the 8-hour NAAQS for ozone had been achieved. Preliminary 2007 air quality data show that the area continues to attain the 8-hour ozone standard. The data satisfy the applicable CAA requirements discussed above. The June 12, 2007, proposed rule provides a detailed discussion of how Ohio met these requirements. On December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit 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.* v. *EPA,* 472 F.3d 882 (D.C. Cir. 2006). On June 8, 2007, in *South Coast Air Quality Management Dist.* v. *EPA,* Docket No. 04-1201, in response to several petitions for rehearing, the D.C. Circuit 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 8 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 8 decision reaffirmed the December 22, 2006, decision that EPA had improperly failed to retain four 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;
(3)measures to be implemented pursuant to section 172(c)(9) or 182(c)(9) of the CAA, contingent on an area not making reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain that NAAQS; and
(4)certain transportation conformity requirements for certain types of Federal actions. The June 8 decision clarified that the Court's reference to conformity requirements 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. For the reasons set forth in the proposal, 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 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 this area to attainment, because even in light of the Court's decisions, redesignation is appropriate under the relevant redesignation provisions of the Act and longstanding policies regarding redesignation requests. With respect to the requirement for transportation conformity under the 1-hour standard, the Court in its June 8 decision clarified that for those areas with 1-hour motor vehicle emissions budgets in their maintenance plans, anti-backsliding requires only that those 1-hour budgets must be used for 8-hour conformity determinations until replaced by 8-hour budgets. To meet this requirement, conformity determinations in such areas must comply with the applicable requirements of EPA's conformity regulations at 40 CFR part 93. II. What Comments Did We Receive on the Proposed Action? EPA provided a 30-day review and comment period. One comment, from BP Products, North America Inc., was received supporting EPA's proposal. III. What Are Our Final Actions? EPA is taking several related actions for the Toledo, Ohio area. First, EPA is making a determination that the Toledo, Ohio area has attained the 8-hour ozone standard. EPA is approving Ohio's maintenance plan SIP revision for the Toledo, Ohio area (such approval being one of the CAA criteria for redesignation to attainment status). The maintenance plan is designed to keep the Toledo, Ohio area in attainment of the 8-hour ozone NAAQS through 2018 by ensuring that the 2018 Volatile Organic Compounds
(VOC)and Oxides of Nitrogen (NO <sup>X</sup> ) emissions are less than 2004 emissions, the attainment year. EPA is also approving the State's request to change the legal designation of the Toledo, Ohio area from nonattainment to attainment of the 8-hour ozone NAAQS. Finally, as supported by and consistent with the ozone maintenance plan, EPA is approving the 2009 and the 2018 VOC and NO <sup>X</sup> MVEBs for the Toledo, Ohio area. The 2009 MVEBs are 18.99 tons/day of VOC and 33.75 tons/day for NO <sup>X</sup> . The 2018 MVEBs are 11.20 tons/day of VOCs and 14.11 tons/day for NO <sup>X</sup> . In accordance with 5 U.S.C. 553(d), EPA finds that there is good cause for these actions to become effective immediately upon publication. This is because a delayed effective date is unnecessary due to the nature of a redesignation to attainment, which relieves the area from certain CAA requirements that would otherwise apply to it. The immediate effective date for this action is authorized under both 5 U.S.C. 553(d)(1), which provides that rulemaking actions may become effective less than 30 days after publication if the rule “grants or recognizes an exemption or relieves a restriction,” and section 553(d)(3) which allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” The purpose of the 30-day waiting period prescribed in 553(d) is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. Today's rule, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, today's rule relieves the State of planning requirements for these 8-hour ozone nonattainment areas. For these reasons, EPA finds good cause under 5 U.S.C. 553(d)(3) for these actions to become effective on the date of publication of these actions. IV. Statutory and Executive Order Review Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and, therefore, is not subject to review by the Office of Management and Budget. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). Regulatory Flexibility Act This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Redesignation of an area to attainment under section 107(d)(3)(E) of the Clean Air Act does not impose any new requirements on small entities. Redesignation is an action that affects the status of a geographical area and does not impose any new regulatory requirements on sources. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Unfunded Mandates Reform Act Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Order 13175: Consultation and Coordination With Indian Tribal Governments This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). Executive Order 13132: Federalism This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). Redesignation is an action that merely affects the status of a geographical area, and does not impose any new requirements on sources, or allows a state to avoid adopting or implementing additional requirements, and does not alter the relationship or distribution of power and responsibilities established in the Clean Air Act. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. National Technology Transfer Advancement Act In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Redesignation is an action that affects the status of a geographical area but does not impose any new requirements on sources. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. Paperwork Reduction Act This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under Section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 9, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review, nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to force its requirements. (See Section 307(b)(2).) List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Volatile organic compounds. 40 CFR Part 81 Air pollution control, Environmental protection, National parks, Wilderness areas. Dated: July 31, 2007. Steve Rothblatt, Acting Regional Administrator, Region 5. Parts 52 and 81, chapter I, title 40 of the Code of Federal Regulations is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart 1885—Ohio 2. Section 52.1885 is amended by adding paragraph (ff)(6) to read as follows: § 52.1885 Control strategy: Ozone.
(ff)* * *
(6)On December 22, 2006, and supplemented on March 9, 2007, the State of Ohio submitted a redesignation request and maintenance plan for the Toledo area, including Lucas and Wood Counties. The maintenance plan for this area establishes motor vehicle emission budgets
(MVEB)for 2009 and 2018. The 2009 MVEBs are 18.99 tons/day of Volatile Organic Compounds
(VOC)and 33.75 tons/day for Oxides of Nitrogen (NO <sup>X</sup> ). The 2018 MVEBs are 11.20 tons/day of VOCs and 14.11 tons/day for NO <sup>X</sup> . PART 81—[AMENDED] 3. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* 4. Section 81.336 is amended by revising the entry for Toledo, Ohio area: Lucas and Wood Counties in the table entitled “Ohio—Ozone (8-Hour Standard)” to read as follows: § 81.336 Ohio. Ohio—Ozone (8-Hour Standard) Designated area Designation a Date 1 Type Classification Date 1 Type * * * * * * * Toledo Area: Lucas County 08/09/07 Attainment Wood County * * * * * * * a Includes Indian Country located in each county or area, except as otherwise specified. 1 This date is June 15, 2004, unless otherwise noted. [FR Doc. E7-15474 Filed 8-8-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 300 [EPA-R04-SFUND-2007-0613; FRL-8451-4] National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final notice of deletion for the Rochester Property Superfund Site from the National Priorities list. SUMMARY: EPA Region 4 is publishing a direct final notice of deletion of the Rochester Property, Superfund Site (Site), located in Travelers Rest, South Carolina, from the National Priorities List (NPL). The NPL, promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, is appendix B of 40 CFR part 300, which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). This direct final notice of deletion is being published by EPA with the concurrence of the State of South Carolina, through the South Carolina Department of Health and Environmental Control (SCDHEC) because EPA has determined that all appropriate response actions under CERCLA have been completed and, therefore, further remedial action pursuant to CERCLA is not appropriate. DATES: This direct final notice is effective October 9, 2007 without further notice, unless EPA receives adverse comment by September 10, 2007. If adverse comment is received, EPA will publish a timely withdrawal of the direct final notice in the **Federal Register** and inform the public that the notice will not take effect. ADDRESSES: Submit your comments, identified by EPA-R04-SFUND-2007-0613, by one of the following methods: 1. *http://www.regulations.gov:* Follow the on-line instructions for submitting comments. 2. *E-mail: webster.donna@epa.gov.* 3. *Fax:*
(404)562-8788. 4. *Mail:* EPA-R04-SFUND-2007-0613, Superfund Remedial & Site Evaluation Branch, Superfund Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. 5. * Hand Delivery or Courier:* Donna K. Webster, Remedial Project Manager, Superfund Remedial & Site Evaluation Branch, Superfund 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 to 4:30, excluding federal holidays. *Instructions:* Direct your comments to EPA-R04-SFUND-2007-0613. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit through www.regulations.gov or e-mail, information that you consider to be CBI or otherwise protected. The www.regulations.gov Web site is an “anonymous access” systems, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through www.regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. 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 www.regulations.gov index. Although listed in the index, some information is not publicly available, *i.e.* , CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the 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 legal holidays. Comprehensive information on this Site is available through the Region 4 public docket, which is available for viewing at the Rochester Property Site information repositories at two locations. Locations, contacts, phone numbers and viewing hours are: Rochester Property Site Repository, Travelers Rest Library, 17 Center Street, Travelers Rest, SC 29690, Hours: Monday through Thursday—9 a.m. until 9 p.m., Friday and Saturday—9 a.m. until 6 p.m. U.S. EPA Record Center, Attn: Ms. Debbie Jourdan, Atlanta Federal Center, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960, Phone:
(404)562-8862, Hours 8 a.m. to 4 p.m., Monday through Friday by appointment only. FOR FURTHER INFORMATION CONTACT: Donna K. Webster, Remedial Project Manager, Superfund Remedial & Site Evaluation Branch, Superfund Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960, Phone:
(404)562-8870, Electronic Mail: *webster.donna@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. NPL Deletion Criteria III. Deletion Procedures IV. Basis for Site Deletion V. Deletion Action I. Introduction EPA Region 4 is publishing this direct final notice of deletion of the Rochester Property Superfund Site from the NPL. The EPA identifies Sites that appear to present a significant risk to public health or the environment and maintains the NPL as the list of those Sites. As described in the Section 300.425(e)(3) of the NCP, Sites deleted from the NPL remain eligible for remedial actions if conditions at a deleted Site warrant such action. Section II of this document explains the criteria for deleting Sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Rochester Property Superfund Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period. II. NPL Deletion Criteria Section 300.425(e) of the NCP provides that releases may be deleted from the NPL where no further response is appropriate. In making a determination to delete a Site from the NPL, EPA shall consider, in consultation with the State, whether any of the following criteria have been met: i. Responsible parties or other persons have implemented all appropriate response actions required; ii. All appropriate Fund-financed (Hazardous Substance Superfund) response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate. Even if a Site is deleted from the NPL, where hazardous substances, pollutants, or contaminants remain at the deleted Site above levels that allow for unlimited use and unrestricted exposure, CERCLA section 121(c), 42 U.S.C. 9621(c) requires that a subsequent review of the Site be conducted at least every five years after the initiation of the remedial action at the deleted Site to ensure that the action remains protective of public health and the environment. In the case of this site, the selected remedy is protective of human health and the environment. EPA has determined that all remedial action objectives and cleanup goals have been attained, that all cleanup actions are completed at this site, and there are no hazardous substances, pollutants, or contaminants remaining at the site above levels that allow for unlimited use and unrestricted exposure. If new information becomes available which indicates a need for further action, EPA may initiate remedial actions. Whenever there is a significant release from a Site deleted from the NPL, the deleted Site may be restored to the NPL without application of the hazard ranking system. III. Deletion Procedures The following procedures apply to deletion of the Site:
(1)The EPA consulted with the State of South Carolina on the deletion of the Site from the NPL prior to developing this direct final notice of deletion.
(2)South Carolina concurred with deletion of the Site from the NPL.
(3)Concurrently with the publication of this direct final notice of deletion, a notice of the availability of the parallel notice of intent to delete published today in the “Proposed Rules” section of the **Federal Register** is being published in a major local newspaper of general circulation at or near the Site and is being distributed to appropriate federal, state, and local government officials and other interested parties; the newspaper notice announces the 30-day public comment period concerning the notice of intent to delete the Site from the NPL.
(4)The EPA placed copies of documents supporting the deletion in the Site information repositories identified above.
(5)If adverse comments are received within the 30-day public comment period on this document, EPA will publish a timely notice of withdrawal of this direct final notice of deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. Deletion of a Site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a Site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a Site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions. IV. Basis for Site Deletion The following information provides EPA's rationale for deleting the Site from the NPL: Site Background and History The Rochester Property Site
(Site)is located west of the town of Travelers Rest, in Greenville County, South Carolina, in a rural, sparsely populated area. The 4.5 acre site lies approximately 300 feet north of County Road 268, also known as Ledbetter Road, and approximately one-quarter mile east of County Road 102. The area where waste was disposed, and later removed, is located within a 0.6 acre fenced area. The northern portion of the property is a pine and deciduous forest, while the southern portion is grassed. A small house is located at the east end of the site. In late 1971 and early 1972, waste materials were placed in four trenches on the site. Each of the trenches was approximately 40 feet long, 3 feet wide and 10 feet deep. The wastes were thought to include wood glue, print binders, powder materials, natural guar gums, adhesive for food packages, and adhesive restick for envelopes. Response Actions The site was included on the NPL on October 4, 1989. On June 5, 1989, EPA and the Potentially Responsible Party
(PRP)signed an Administrative Order on Consent (AOC), Docket No. 89-09-C, requiring that the PRP characterize the vertical and horizontal extent of affected media and remove the buried waste. In January 1990, 1400 cubic yards of waste and surrounding soil were excavated and disposed of off-site at a secure hazardous waste landfill. EPA and the PRP signed another AOC, Docket Number 92-04-C, dated February 19, 1992, to conduct the Remedial Investigation and Feasibility Study (RI/FS). RMT, Inc.
(RMT)submitted to EPA, on behalf of the PRP, the Final RI Report in April 1993, and the Final FS Report in May 1993. A ROD was signed August 31, 1993. Cleanup Goals The ROD specified that the preferred remedy for groundwater at the site would be the installation and operation of a dual trench, in-situ air sparging system, in order to meet the remedial goals (RGs). The RGs were set at the Maximum Contaminant Level
(MCL)of .005 ppm for trichlorethylene
(TCE)and 0.006 ppm for bis (2-ethylhexyl) phthalate, and a risk-based level of 0.180 ppm for manganese (Mn). Construction of the system was completed by June 1995. After approximately three years of air sparging, the monitoring wells that had the highest concentration of organic contaminants of concern during the RI did not show any concentrations exceeding the RGs. However, in 1996, one monitoring well, located downgradient of the air sparging trenches, began to show TCE concentrations above the RG. On July 8, 2002, an ESD to the ROD was issued to address the downgradient contamination. The significant change to the ROD was that a mixture of air and ozone would be sparged, rather than air only. The supplemental remedy for the site, ozone sparging and recirculation, was installed at the site in 2002 and began operation in October 2002. Since the ROD was signed, the toxicity criterion for Mn in USEPA's Integrated Risk Information System
(IRIS)database was changed; Mn is now believed to be less toxic than previously thought and the hazard quotient for Mn in groundwater is an order of magnitude lower. As a result, on January 31, 2006, a second ESD was issued removing the RG for Mn from the site remedy. Confirmatory sampling verifies that all remedial action objectives and cleanup goals have been attained, and all cleanup actions are complete as specified in the ROD, as changed by the ESDs issued July 2002 and January 2006. Three annual confirmatory groundwater sampling events were conducted to provide further assurance that the site is currently protective, no longer poses any threats to human health or the environment, all areas of concern described in the NPL listing have been adequately addressed, and no further Superfund response is needed to protect human health and the environment. The final groundwater sampling event was conducted in November 2006. No further operations and maintenance (O&M) activities are required. Operation and Maintenance The cleanup of the site complies with the “clean closure” requirements, consistent with the Resource Conservation and Recovery Act of 1976, as amended, CERCLA, as amended, and to the extent practicable, the NCP. No further site O&M activities are required. Five-Year Review CERCLA requires a five-year review of all sites with hazardous substances remaining above the health-based levels for unrestricted use of the site. EPA conducted two five-year reviews at the site while the remedial action was being implemented. Since there are no hazardous substances, pollutants, or contaminants remaining at the site above levels that allow for unlimited use and restricted exposure, no further five-year reviews are required. Community Involvement An information repository was established at the Travelers Rest Library and all of the documents used to make the decision were placed there before the final ROD was signed. All other reports and fact sheets were sent to the repository as they were completed. Since the remedy was initiated at this site, public interest or concern about the site has not been expressed. Applicable Deletion Criteria/State Concurrence. One of the three criteria for site deletion specifies that EPA may delete a site from the NPL if all appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate. 40 CFR 300.425(e)(1)(ii). EPA, with the concurrence of the State of South Carolina through the SCDHEC in a letter dated July 5, 2007, believes that this criterion for deletion has been met. All the completion requirements for this Site have been met as described in the Final Close-Out Report
(COR)dated June 8, 2007. The Final COR documents the completion of all remedial and operation and maintenance activities. Consequently, EPA is proposing deletion of this Site from the NPL. Documents supporting this action are available in the docket. V. Deletion Action The EPA, with concurrence of the State of South Carolina, has determined that all appropriate responses under CERCLA have been completed, and that no further response actions under CERCLA are necessary. Therefore, EPA is deleting the Site from the NPL. Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective October 9, 2007 unless EPA receives adverse comments by September 10, 2007. If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion and it will not take effect and, EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment. List of Subjects in 40 CFR Part 300 Environmental protection, Chemicals, Hazardous substances, Hazardous waste, Superfund, Water pollution control, Water supply. Dated: July 23, 2007. J.I. Palmer, Jr., Regional Administrator, Region 4. 40 CFR part 300 is amended as follows: PART 300—[AMENDED] 1. The authority citation for part 300 continues to read as follows: Authority: 33 U.S.C. 1321(c)(2); 42 U.S.C. 9601-9657; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p.351; E.O. 12580, 52 FR 2923, 3 CFR, 1987 Comp., p.193. Appendix B—[Amended] 2. Table 1 of Appendix B to Part 300 is amended by removing the site “Rochester Property, Travelers Rest, SC.” [FR Doc. E7-15332 Filed 8-8-07; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF TRANSPORTATION Federal Railroad Administration 49 CFR Part 222 [Docket No. FRA-2007-27285, Notice No. 1] RIN 2130-AB86 Use of Locomotive Horns at Highway-Rail Grade Crossings; Technical Amendments to Appendix D AGENCY: Federal Railroad Administration (FRA), Department of Transportation (DOT). ACTION: Direct final rule. SUMMARY: This direct final rule makes technical amendments to appendix D of part 222 of the Code of Federal Regulations to update information contained in the appendix and direct the public to the most recent value of the Nationwide Significant Risk Threshold (NSRT). The amendments are intended to eliminate confusion regarding the data and calculations that will be used to determine the NSRT on an annual basis. Interested parties may submit written adverse comments or request an oral hearing on these amendments during the thirty
(30)day period following publication of this direct final rule. DATES: *Effective Date:* Unless FRA receives written adverse comment or a request for an oral hearing on this direct final rule, the effective date will be October 9, 2007. *Written Comments:* Comments or a request for an oral hearing must be received by September 10, 2007. ADDRESSES: You may submit comments identified by DOT DMS Docket Number FRA-2007-27285 by any of the following methods: • *Web site: http://dms.dot.gov.* Follow the instructions for submitting comments on the DOT electronic docket site. • *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 West Building Ground Floor, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal e-Rulemaking Portal:* Go to *http://www.regulations.gov.* Follow the online instructions for submitting comments. *Instructions:* All submissions must include the agency name and docket name and docket number or Regulatory Identification Number
(RIN)for this rulemaking. Note that all comments received will be posted without change to *http://dms.dot.gov* , including any personal information provided. Please see the Privacy Act heading later in this document for more information. *Docket:* For access to the docket to read comments received, go to *http://dms.dot.gov* at any time or go to Room W12-140 on the West Building Ground Floor, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Ronald Ries, Office of Safety, Mail Stop 25, FRA, 1120 Vermont Avenue, NW., Washington, DC 20590 (telephone:
(202)493-6299); or Kathryn Shelton, Office of Chief Counsel, Mail Stop 10, FRA, 1120 Vermont Avenue, NW., Washington, DC 20590 (telephone:
(202)493-6038). SUPPLEMENTARY INFORMATION: Background Appendix D of part 222 of title 49 of the Code of Federal Regulations was included in the interim final rule (68 FR 70586) in order to provide additional information about the calculations underlying various risk calculations discussed within the part. Even though a minor modification was made to appendix D when the final rule was issued (70 FR 21844, April 27, 2005), the appendix was not revised to reflect necessary variations in the data that would be used in future risk index calculations. Changes to Appendix D FRA has determined that appendix D needs to be revised in order to eliminate confusion about the data that will be used in certain risk index calculations. As currently written, portions of appendix D contain specific numbers and dates that are required to be revised on an annual basis, in order to properly calculate the NSRT. For example, in paragraph
(e)under the section titled “Risk Index”, a specific value is listed for the total number of collisions identified over a five-year period. However, each year that the NSRT is recalculated, this number and the date range will need to change. Otherwise, the NSRT value will not accurately reflect current risk levels at gated crossings nationwide where train horns are routinely sounded. Therefore, FRA is revising appendix D by removing references to specific numbers and dates that will change from year to year and simply leaving the relevant formulas. (Actual numbers will be provided in annual **Federal Register** notices announcing FRA's recalculation of the NSRT value.) FRA believes these technical amendments will avoid any misunderstanding or confusion over how the NSRT is calculated. Notice and Comment Procedures FRA has determined that these technical amendments to appendix D are nonsubstantive clarifications that will make the appendix more accurate, without changing the actual risk index calculations that were contained in the final rule. While FRA does not anticipate any adverse comment, interested parties may submit written adverse comments or request an oral hearing on these amendments during the thirty
(30)day period immediately following publication of this direct final rule. Regulatory Impact Executive Order 12866 and DOT Regulatory Policies and Procedures This rule has been evaluated in accordance with existing policies and procedures, and determined to be non-significant under both Executive Order 12866 and DOT policies and procedures (44 FR 11034 (Feb. 26, 1979)). Regulatory Flexibility Act The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires a review of proposed and final rules to assess their impact on small entities, unless the Secretary certifies that the rule will not have a significant economic impact on a substantial number of small entities. Pursuant to Section 312 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), FRA has issued a final policy that formally establishes “small entities” as including railroads that meet the line-haulage revenue requirements of a Class III railroad. 49 CFR part 209, app. C. For other entities, the same dollar limit in revenues governs whether a railroad, contractor, or other respondent is a small entity. Id. FRA certifies that this direct final rule will have no significant economic impact on a substantial number of small entities. To the extent that this rule has any impact on small entities, the impact will not be significant. Paperwork Reduction Act There are no new information collection requirements associated with this direct final rule. Therefore, no estimate of a public reporting burden is required. Federalism Implications Executive Order 13132, entitled, “Federalism,” issued on August 4, 1999, requires that each agency “in a separately identified portion of the preamble to the regulation as it is to be issued in the **Federal Register** , provide[ ] to the Director of the Office of Management and Budget a federalism summary impact statement, which consists of a description of the extent of the agency's prior consultation with State and local officials, a summary of the nature of their concerns and the agency's position supporting the need to issue the regulation, and a statement of the extent to which the concerns of the State and local officials have been met * * *.” This rulemaking action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132. This rule will not have a substantial direct effect on States, on the relationship between the National Government and the States, or on the distribution of power and the responsibilities among the various levels of government, as specified in the Executive Order 13132. Accordingly, FRA has determined that this rule will not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism assessment. Accordingly, a federalism assessment has not been prepared. Environmental Impact FRA has evaluated this regulation in accordance with its “Procedures for Considering Environmental Impacts” (FRA's Procedures) (64 FR 28545, May 26, 1999) as required by the National Environmental Policy Act (42 U.S.C. 4321 *et seq.* ), other environmental statutes, Executive Orders, and related regulatory requirements. FRA has determined that this regulation is not a major FRA action (requiring the preparation of an environmental impact statement or environmental assessment) because it is categorically excluded from detailed environmental review pursuant to section 4(c)(20) of FRA's Procedures. 64 FR 28545, 28547, May 26, 1999. In accordance with section 4(c) and
(e)of FRA's Procedures, the agency has further concluded that no extraordinary circumstances exist with respect to this regulation that might trigger the need for a more detailed environmental review. As a result, FRA finds that this regulation is not a major Federal action significantly affecting the quality of the human environment. Unfunded Mandates Reform Act of 1995 Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of [$120,800,000 or more (as adjusted for inflation)] in any 1 year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and tribal governments and the private sector. The direct final rule will not result in the expenditure, in the aggregate, of $120,800,000 or more in any one year, and thus preparation of such a statement is not required. Energy Impact Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” 66 FR 28355 (May 22, 2001). Under the Executive Order, a “significant energy action” is defined as any action by an agency (normally published in the **Federal Register** ) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: That (1)(i) is a significant regulatory action under Executive Order 12866 or any successor order, and
(ii)is likely to have a significant adverse effect on the supply, distribution, or use of energy; or
(2)that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. FRA has evaluated this direct final rule in accordance with Executive Order 13211. FRA has determined that this direct final rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Consequently, FRA has determined that this regulatory action is not a “significant energy action” within the meaning of Executive Order 13211. Privacy Act Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit *http://dms.dot.gov.* List of Subjects in 49 CFR Part 222 Use of locomotive horns, Railroad safety. The Rule In consideration of the foregoing, FRA amends part 222 of chapter II, subtitle B of title 49, Code of Federal Regulations, as follows: PART 222—[AMENDED] 1. The authority citation for part 222 continues to read as follows: Authority: 28 U.S.C. 2461, note; 49 U.S.C. 20103, 20107, 20153, 21301, 21304; 49 CFR 1.49. 2. Appendix D to Part 222 is amended by revising paragraphs
(b)through
(e)in the section titled “RISK INDEX” to read as follows: Appendix D to Part 222—Determining Risk Levels Risk Index
(b)The average number of fatalities observed in fatal collisions and the average number of injuries in collisions involving injuries are calculated by FRA as described in paragraphs
(c)through (e).
(c)FRA will match the highway-rail incident files for the past five years against a data file containing the list of grade crossings where the train horn was not routinely sounded over that five-year period to identify two types of collisions involving trains and motor vehicles:
(1)Those that occurred at crossings where the train horn was not routinely sounded during the period, and
(2)those that occurred at crossings equipped with automatic gates where the train horn was routinely sounded. Certain records will be excluded, including records pertaining to incidents where the driver was not in the motor vehicle or where the motor vehicle struck the train beyond the fourth locomotive or rail car that entered the crossing. FRA believes that sounding the train horn would not be very effective at preventing such incidents. 1 1 The data used to make these exclusions is contained in blocks 18—Position of Car Unit in Train; 19—Circumstance: Rail Equipment Struck/Struck by Highway User; 28—Number of Locomotive Units; and 29—Number of Cars on the current FRA Form 6180-57 Highway-Rail Grade Crossing Accident/Incident Report.
(d)Collisions in the group containing the gated crossings nationwide where horns were routinely sounded will then be identified as fatal, injury only or no casualty. Collisions will be identified as fatal if one or more deaths occurred, regardless of whether injuries were also sustained. Collisions will be identified as injury only when injuries, but no fatalities, resulted.
(e)The collisions (incidents) will be summarized by year for the five-year period preceding the year in which the risk index is being updated. The fatality rate for each year will be calculated by dividing the number of fatalities by the number of fatal incidents. The injury rate will be calculated by dividing the number of injuries in injury only incidents by the number of injury only incidents. FRA will publish updated fatality and injury rates on an annual basis in the **Federal Register** . 3. Appendix D to Part 222 is amended by revising the section titled, “Nationwide Significant Risk Threshold” to read as follows: Appendix D to Part 222—Determining Risk Levels Nationwide Significant Risk Threshold The Nationwide Significant Risk Threshold is simply an average of the risk indexes for all of the gated public crossings nationwide where train horns are routinely sounded. This value will be recalculated annually and published in a notice in the **Federal Register** . For the most recent value of the Nationwide Significant Risk Threshold, please visit FRA's public Web site at *http://www.fra.dot.gov.* 4. Appendix D to Part 222 is amended by revising the section titled, “Crossing Corridor Risk Index” to read as follows: Appendix D to Part 222—Determining Risk Levels Crossing Corridor Risk Index The Crossing Corridor Risk Index is the average of the risk indexes of all the public crossings in a defined rail corridor. Issued in Washington, DC on August 2, 2007. Clifford C. Eby, Federal Railroad Deputy Administrator. [FR Doc. 07-3871 Filed 8-8-07; 8:45 am]
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  • 7 USC 601-674
  • 7 CFR 916
  • 7 CFR 917
  • 14 CFR 39
  • 1 CFR 51
  • 14 CFR 25
  • 17 CFR 275
  • 15 USC 80b
  • 451 F.3d 873
  • 62 F.3d 1304
  • 17 CFR 275.206(4)
  • 17 CFR 270.17
  • 17 CFR 240.13
  • 404 U.S. 6
  • 375 F.2d 393
  • 430 U.S. 462
  • 555 F.2d 336
  • 15 USC 80a
  • 485 U.S. 224
  • 426 U.S. 438
  • 17 CFR 240.10
  • 967 F.2d 636
  • 446 U.S. 680
  • 425 U.S. 185
  • 521 U.S. 642
  • 444 U.S. 11
  • 472 U.S. 1
  • 468 U.S. 207
  • 467 U.S. 837
  • 20 CFR 404
  • 20 CFR 416
  • Pub. L. 97-455
  • 96 Stat. 2500
  • Pub. L. 98-460
  • 98 Stat. 1802
  • Pub. L. 108-203
  • 118 Stat. 509
  • Pub. L. 101-508
  • Pub. L. 103-296
  • Pub. L. 106-170
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F. App'x451 F.3d 873
F. App'x62 F.3d 1304
SCOTUS404 U.S. 6
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