Tap any paragraph to write a margin note. Your notes collect in the Desk below the text and file under cases with @. The side-by-side margin rail opens on a larger screen.

§
Marginalia
Code · REGISTER · 2007-08-24 · PROPOSED RULES · Unknown

Unknown. Final rule; technical amendment

67,148 words·~305 min read·/register/2007/08/24/07-4138

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-2007-08-24.xml --- 72 164 Friday, August 24, 2007 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Cooperative State Research, Education, and Extension Service See Food Safety and Inspection Service See Forest Service Animal Animal and Plant Health Inspection Service RULES Plant-related quarantine, foreign: Fruits and vegetables import regulations; revision; technical amendment, 48547-48548 E7-16832 Antitrust Antitrust Division NOTICES National cooperative research notifications:
Network Centric Operations Industry Consortium, Inc., 48680 07-4146 Army Army Department See Engineers Corps NOTICES Environmental statements; availability, etc.: Army growth and force structure realignment, 48620-48621 07-4149 Blind Blind or Severely Disabled, Committee for Purchase From People Who Are See Committee for Purchase From People Who Are Blind or Severely Disabled Centers Centers for Medicare & Medicaid Services RULES Medicare: Medicare Integrity Program; fiscal intermediary and carrier functions, and conflict of interest requirements, 48870-48888 E7-16606 Medicare and Medicaid:
Hospital participation conditions; laboratory services, 48562-48574 E7-16647 PROPOSED RULES Medicaid: Non-emergency medical transportation program; State option to establish, 48604-48608 E7-16172 NOTICES Agency information collection activities; proposals, submissions, and approvals, 48645-48647 E7-16805 E7-16814 Committees; establishment, renewal, termination, etc.: Ambulatory Payment Classification Groups Advisory Panel, 48647-48648 E7-16151 Grant and cooperative agreement awards:
Deficit Reduction Act Hurricane Katrina Healthcare Related Provider Stabilization Project— Louisiana, Alabama, and Mississippi; single source grant awardees, 48648-48649 E7-16579 Medicaid— Louisiana; Deficit Reduction Act Hurricane Katrina healthcare related professional workforce supply, 48649-48650 E7-16594 Meetings: Clinical research study participation and retention; impact of health insurance coverage and payment; town hall meeting, 48650 E7-16581 Medicare— Emergency Medical Treatment and Labor Act Technical Advisory Group, 48651-48652 E7-16583 Medicare Evidence Development and Coverage Advisory Committee, 48652-48654 E7-16825 Medicare Education Advisory Panel, 48654-48655 E7-16168 Children Children and Families Administration NOTICES Grant and cooperative agreement awards:
Polaris Project, 48655 E7-16842 Coast Guard Coast Guard RULES Drawbridge operations: North Carolina, 48555 E7-16727 Ports and waterways safety; regulated navigation areas, safety zones, security zones, etc.: Honolulu Captain of Port Zone, HI; U.S. Forces vessel SBX-1, 48555-48557 E7-16731 Commerce Commerce Department See Economic Development Administration See Foreign-Trade Zones Board See International Trade Administration See National Institute of Standards and Technology Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement list; additions and deletions, 48610-48611 E7-16788 E7-16789 Cooperative Cooperative State Research, Education, and Extension Service NOTICES Veterinary Medicine Loan Repayment Program; implementation, 48609 07-4138 Corporation Corporation for National and Community Service RULES Criminal history checks;
Senior Companions, Foster Grandparents, and AmeriCorps Program participants, 48574-48585 E7-16681 Defense Defense Department See Army Department See Engineers Corps NOTICES Meetings; Sunshine Act, 48619-48620 07-4186 07-4187 Drug Drug Enforcement Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 48680-48683 E7-16718 E7-16791 E7-16792 Schedules of controlled substances; production quotas: Schedules I and II— Final 2007 aggregate, 48686-48689 E7-16730 Proposed 2008 aggregate, 48683-48686 E7-16729 Economic Economic Development Administration NOTICES Adjustment assistance; applications, determinations, etc.:
Cape Industries et al., 48611-48612 E7-16778 Education Education Department NOTICES Meetings: Historically Black Colleges and Universities, President's Board of Advisors, 48625 E7-16820 Election Election Assistance Commission NOTICES Meetings; Sunshine Act, 48625-48626 07-4156 Employment Employment and Training Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 48689-48690 E7-16800 Reports and guidance documents; availability, etc.:
Rural Industrialization Loan and Grant Program; compliance certfications requests, 48690 E7-16704 Energy Energy Department See Federal Energy Regulatory Commission Engineers Engineers Corps NOTICES Environmental statements; availability, etc.: San Diego County, CA; Carryover Storage and San Vicente Dam Raise Project, 48622-48623 E7-16696 Environmental statements; notice of intent: Homer Harbor, AK; navigation improvements feasibility study, 48623-48625 E7-16796 EPA Environmental Protection Agency RULES Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas:
Kentucky, 48558-48559 E7-16804 Pennsylvania, 48559-48562 E7-16683 NOTICES Agency information collection activities; proposals, submissions, and approvals, 48633-48634 E7-16818 Air programs: State implementation plans; adequacy status for transportation conformity purposes— Georgia; correction, 48634-48635 E7-16802 Environmental statements; availability, etc.: Agency comment availability, 48635-48636 E7-16824 Agency weekly receipts, 48636 E7-16816 Pesticide programs: Risk assessments— Chloropicrin, etc., 48636-48637 E7-16813 Superfund; response and remedial actions, proposed settlements, etc.:
Cornell-Dubilier Electronics, Inc. Site, NJ, 48637 E7-16821 Pennsylvania Railroad Transformer Site, PA, 48637-48638 E7-16598 Westwood Chemical Corp. Site, NY, 48638-48639 E7-16793 Executive Executive Office of the President See Presidential Documents See Science and Technology Policy Office See Trade Representative, Office of United States FAA Federal Aviation Administration RULES Airworthiness directives: Pratt & Whitney, 48549-48551 E7-16665 PROPOSED RULES Airworthiness directives:
Boeing, 48591-48600 E7-16657 E7-16661 E7-16668 NOTICES Airport noise compatibility program: Great Falls International Airport, MT, 48724-48725 07-4153 Passenger facility charges; applications, etc.: Panama City/Bay County International Airport, FL, 48725-48726 07-4152 FCC Federal Communications Commission RULES Common carrier services: Wireless telecommunications services— 698-806 MHz band service rules, public safety spectrum requirements, and anti-collusion rule reporting requirement, 48814-48868 07-4123 Federal Emergency Federal Emergency Management Agency NOTICES Disaster and emergency areas:
Kansas, 48660 E7-16773 New York, 48660 E7-16771 Federal Energy Federal Energy Regulatory Commission NOTICES Electric rate and corporate regulation combined filings, 48629 E7-16739 Environmental statements; availability, etc.: Bradwood Landing LLC et al., 48629-48631 E7-16751 PPL Montana, 48631 E7-16750 Environmental statements; notice of intent: Steckman Ridge, L.P., 48631-48633 E7-16743 *Applications, hearings, determinations, etc.:* Black Marlin Pipeline Co., 48626 E7-16740 CenterPoint Energy Gas Transmission Co., 48626-48627 E7-16747 CenterPoint Energy-Mississippi River Transmission Corp., 48626 E7-16748 Enterprise Texas Pipeline LLC, 48627 E7-16744 National Fuel Gas Supply Corp., 48627 E7-16742 Northern Natural Gas Co., 48627-48628 E7-16746 Northwest Pipeline Corp., 48628 E7-16749 Questar Overthrust Pipeline Co., 48628 E7-16745 WTG Hugoton, LP, 48628-48629 E7-16741 Federal Motor Federal Motor Carrier Safety Administration RULES Motor carrier safety standards:
Unified carrier registration plan and agreement fees, 48585-48590 E7-16482 NOTICES Agency information collection activities; proposals, submissions, and approvals, 48726 E7-16724 Federal Reserve Federal Reserve System RULES Extensions of credit by Federal Reserve Banks (Regulation A): Primary and secondary credit; rates decrease, 48548-48549 E7-16764 NOTICES Agency information collection activities; proposals, submissions, and approvals, 48639-48640 E7-16767 Banks and bank holding companies:
Change in bank control, 48640-48641 E7-16787 FTC Federal Trade Commission PROPOSED RULES Textile Fiber Products Identification Act; implementation: Polyester fibers made from poly(trimethylene terephthalate); new generic fiber subclass name and definition, 48600-48603 E7-16841 NOTICES Premerger notification waiting periods; early terminations, 48641-48644 07-4150 Federal Transit Federal Transit Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 48727 E7-16722 Meetings:
Major Capital Investment Projects; proposed rulemaking, 48727-48728 E7-16831 Food Food and Drug Administration RULES Biological products: Blood and blood components— Current good manufacturing practice; consignees and transfusion recipients notified of increased risk of HCV infection transmission (“lookback”), 48766-48801 E7-16607 NOTICES Agency information collection activities; proposals, submissions, and approvals, 48655-48658 E7-16708 E7-16795 Medical devices: Premarket approval applications, list; safety and effectiveness summaries; availability, 48658 E7-16706 Reports and guidance documents; availability, etc.:
Lookback for Hepatitis C Virus (HCV): Product Quarantine, Consignee Notification, Further Testing, Product Disposition, industry guidance, 48658-48659 E7-16605 Food Food Safety and Inspection Service NOTICES Veterinary Medicine Loan Repayment Program: implementation, 48609 07-4138 Foreign Foreign-Trade Zones Board NOTICES *Applications, hearings, determinations, etc.:* California Grafil, Inc.; carbon fiber products manufacturing facilities, 48612-48613 E7-16827 Massachusetts Mastex Industries, Inc.; airbag fabric for export; manufacturing facility, 48613 E7-16826 New Jersey— Givaudan Fragrances Corp.; flavors and fragrances manufacturing facility; correction, 48613 E7-16828 Forest Forest Service NOTICES Recreation fee areas:
Willamette National Forest, OR; recreational and campground fees, 48610 07-4140 Health Health and Human Services Department See Centers for Medicare & Medicaid Services See Children and Families Administration See Food and Drug Administration NOTICES Meetings: American Health Information Community, 48644-48645 07-4151 Homeland Homeland Security Department See Coast Guard See Federal Emergency Management Agency See Transportation Security Administration Housing Housing and Urban Development Department NOTICES Grants and cooperative agreements; availability, etc.:
Community Development Block Grant Program— Disaster recovery grants provided to States; waivers and alternative requirements, 48804-48806, 48808-48811 E7-16631 E7-16632 Homeless assistance; excess and surplus Federal properties, 48744-48764 E7-16489 Interior Interior Department See Land Management Bureau See National Park Service See Surface Mining Reclamation and Enforcement Office IRS Internal Revenue Service RULES Income taxes: Elimination of country-by-country reporting to shareholders of foreign taxes paid by regulated investment companies, 48551-48555 E7-16737 Employee benefits; cafeteria plans; removed Correction, 48742 Z7-14823 Procedure and administration:
Nonjudicial foreclosure sale and parties making administrative requests for return of wrongfully levied property; notification changes Correction, 48742 Z7-14053 PROPOSED RULES Income taxes: Type III supporting organizations that are not functionally integrated; payout requirements Correction, 48603-48604 E7-16715 NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-16719 48732-48733 E7-16738 Meetings: Taxpayer Advocacy Panels, E7-16714 E7-16720 48733-48734 E7-16721 International International Trade Administration NOTICES Antidumping:
Carbazole violet pigment 23 from— China, 48615 E7-16811 Frozen warmwater shrimp from— Brazil, 48616 E7-16807 Ecuador, 48616-48617 E7-16812 Solid urea from— Russia, 48617-48618 E7-16810 Antidumping and countervailing duties: Administrative review requests, 48613-48615 E7-16808 Countervailing duties: Light-walled rectangular pipe and tube from— China, 48618 E7-16809 Foreign air carriers; exemption from excise taxes; reciprocity eligibility findings; comprehensive review, 48618-48619 E7-16823 Justice Justice Department See Antitrust Division See Drug Enforcement Administration Labor Labor Department See Employment and Training Administration Land Land Management Bureau NOTICES Environmental statements; availability, etc.:
Northeast National Petroleum Reserve, AK— Alaska National Interest Lands Conservation Act subsistence hearings and integrated activity plan, 48661-48662 E7-16694 Overland Pass Natural Gas Liquids Pipeline Project, WY, 48662-48663 E7-16702 Realty actions; sales, leases, etc.: Nevada, 48663-48664 E7-16351 Resource management plans, etc.: Moab Field Office, Grand and San Juan Counties, UT, 48664-48666 E7-16700 Survey plat filings: Wyoming, 48666 E7-16768 Millennium Millennium Challenge Corporation NOTICES Reports and guidance documents; availability, etc.:
Millennium Challenge Account assistance— Candidate countries and countries that would be candidates but for legal prohibitions, 48690-48692 E7-16723 National Institute National Institute of Standards and Technology NOTICES Meetings: Information Security and Privacy Advisory Board, 48619 E7-16817 National Park National Park Service NOTICES Native American human remains, funerary objects; inventory, repatriation, etc.: Alaska State Office of History and Archaeology, Anchorage, AK, and Alutiiq Museum and Archaeological Repository, Kodiak, AK, 48666-48668 E7-16781 E7-16783 Alutiiq Museum and Archaeological Repository, Kodiak, AK, E7-16776 48668-48671 E7-16777 E7-16782 E7-16784 Denver Museum of Nature and Science, Denver, CO, E7-16785 48671-48672 E7-16786 Field Museum of Natural History, Chicago, IL, 48672-48675 E7-16774 E7-16775 Fort Worth Museum of Science and History;
TX, 48675-48676 E7-16798 National Park Service, Intermountain Region, Denver, CO, 48676-48677 E7-16801 Peabody Museum of Archaeology and Ethnology, Harvard University, Cambridge, MA, 48677-48678 E7-16780 Science Museum of Minnesota, St. Paul, MN, 48678 E7-16779 National Science National Science Foundation NOTICES Agency information collection activities; proposals, submissions, and approvals, 48692-48694 07-4141 Nuclear Nuclear Regulatory Commission NOTICES *Applications, hearings, determinations, etc.:* AmerGen Energy Co., LLC, 48694-48695 E7-16853 Office of U.S.
Trade Office of United States Trade Representative See Trade Representative, Office of United States Presidential Presidential Documents PROCLAMATIONS *Special observances:* Constitution Day and Citizenship Day, Constitution Week (Proc. 8168), 48931-48932 07-4199 National Alcohol and Drug Addiction Recovery Month (Proc. 8167), 48927-48930 07-4198 Railroad Railroad Retirement Board NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-16797 48696-48698 E7-16803 E7-16843 Science Science and Technology Policy Office NOTICES Meetings:
President's Council of Advisors on Science and Technology, 48639 E7-16726 SEC Securities and Exchange Commission RULES Electronic Data Gathering, Analysis, and Retrieval System (EDGAR): Interactive data voluntary reporting program; mutual fund risk/return summary information data tagging Correction, 48742 Z7-13738 NOTICES Investment Company Act of 1940: American International Group, Inc., et al ., 48698-48699 E7-16763 HealthShares, Inc., et al., 48699-48700 E7-16762 Reports and guidance documents; availability, etc.:
Financial Reporting Improvements Advisory Committee; discussion paper, 48700-48707 E7-16772 Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC, 48707-48708 E7-16757 Chicago Board Options Exchange, Inc.; correction, 48708 E7-16753 Chicago Stock Exchange, Inc, 48708-48709 E7-16756 Depository Trust Co., 48709-48712 E7-16752 Financial Industry Regulatory Authority, Inc, 48713-48716 E7-16758 E7-16761 NYSE Arca, Inc., 48717-48718 E7-16759 Philadelphia Stock Exchange, Inc., 48718-48724 E7-16754 E7-16755 E7-16760 State State Department NOTICES Meetings:
Overseas Buildings Operations Industry Advisory Panel, 48724 E7-16834 Surface Surface Mining Reclamation and Enforcement Office PROPOSED RULES Surface and underground coal mining activities: Excess spoil and coal mine waste minimization and stream buffer zones for U.S. waters, 48890-48926 E7-16629 NOTICES Environmental statements; availability, etc.: Excess spoil minimization, coal mine waste, and stream buffer zones, 48678-48680 E7-16628 Surface Surface Transportation Board NOTICES Railroad operation, acquisition, construction, etc.:
Michigan Central Railway, LLC, 48728-48729 E7-16794 Mittal Steel USA-Railways Inc., 48729 E7-16466 Northwestern Pacific Railroad Co., 48729-48730 E7-16475 Six County Association of Governments, 48730 E7-16765 Trade Trade Representative, Office of United States NOTICES Tariff rate quota amount determinations: Raw cane sugar and refined sugar; 2008 FY country-by-country allocations, 48695-48696 E7-16736 Transportation Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration See Federal Transit Administration See Surface Transportation Board Transportation Transportation Security Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 48660-48661 E7-16769 Treasury Treasury Department See Internal Revenue Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 48730-48731 E7-16728 E7-16735 E7-16799 U.S.
U.S.-China Economic and Security Review Commission NOTICES Hearings, 48734 07-4139 Veterans Veterans Affairs Department NOTICES Illnesses discussed in National Academy of Sciences Report on Gulf War and Health; determinations, 48734-48741 E7-16733 Separate Parts In This Issue Part II Housing and Urban Development Department, 48744-48764 E7-16489 Part III Health and Human Services Department, Food and Drug Administration, 48766-48801 E7-16607 Part IV Housing and Urban Development Department, 48804-48806 E7-16631 Part V Housing and Urban Development Department, 48808-48811 E7-16632 Part VI Federal Communications Commission, 48814-48868 07-4123 Part VII Health and Human Services Department, Centers for Medicare & Medicaid Services, 48870-48888 E7-16606 Part VIII Interior Department, Surface Mining Reclamation and Enforcement Office, 48890-48926 E7-16629 Part IX Executive Office of the President, Presidential Documents, 48927-48932 07-4198 07-4199 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. 72 164 Friday, August 24, 2007 Rules and Regulations DEPARTMENT OF AGRICULTURE Animal and Plant Health Inspection Service 7 CFR Part 319 [Docket No. APHIS-2005-0106] RIN 0579-AB80 Revision of Fruits and Vegetables Import Regulations;
Technical Amendment AGENCY: Animal and Plant Health Inspection Service, USDA. ACTION: Final rule; technical amendment. SUMMARY: In a final rule published in the **Federal Register** on July 18, 2007, we revised and reorganized the regulations pertaining to the importation of fruits and vegetables. As explained in the preamble, the regulatory text included changes made to the fruits and vegetables regulations by several other final rules that were published just prior to July 18.
This technical amendment is necessary to correct an error in the way we set out the requirements established in a final rule published on June 21, 2007, for importing certain fruit from Thailand. This technical amendment also clarifies requirements for importing pineapple from Thailand into Guam and the Commonwealth of the Northern Mariana Islands. DATES: This technical amendment is effective August 24, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Alex Belano, Import Specialist, Commodity Import Analysis and Operations, PPQ-PRI, APHIS, 4700 River Road Unit 133, Riverdale, MD 20737;
(301)734-8758. SUPPLEMENTARY INFORMATION: In a final rule published in the **Federal Register** on July 18, 2007 (72 FR 39482-39528, Docket No. APHIS-2005-0106), and effective on August 17, 2007, we revised and reorganized our regulations pertaining to the importation of fruits and vegetables. Among other things, the final rule established criteria that, if met, will allow us to approve certain new fruits and vegetables for importation into the United States more effectively and expeditiously by way of a notice-based process and to do away with the practice of listing in the regulations specific commodities that may be imported subject to certain types of phytosanitary measures. As explained in the preamble, the regulatory text included changes made to the fruits and vegetables regulations by several other final rules published just prior to July 18. In one of those other final rules, published on June 21, 2007 (72 FR 34163-34176, Docket No. APHIS-2006-0040), and effective on July 23, 2007, we amended the fruits and vegetables regulations to allow the importation into the United States of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand under certain conditions. As a condition of entry, those fruits must be grown in production areas that are registered with and monitored by the national plant protection organization of Thailand, treated with irradiation in Thailand, and subject to inspection. The fruits must also be accompanied by a phytosanitary certificate with an additional declaration stating that the fruit had been treated with irradiation in Thailand. In the case of litchi, the additional declaration must also state that the fruit had been inspected and found to be free of *Peronophythora litchii,* a fungal pest of litchi. Additionally, under that final rule, litchi and longan imported from Thailand may not be imported into or distributed to the State of Florida, due to the presence of litchi rust mite in Thailand. In the July 18 final rule, we stated that mango, mangosteen, pineapple, and rambutan required only mitigations that were eligible for the notice-based approach and as such, it was not necessary to list those commodities in the regulations. This was incorrect because the growing condition requirements for those fruits exceed the designated measures provided in the July 18 final rule. We also noted that litchi and longan had labeling requirements that went beyond the designated measures set forth in the final rule, making it necessary to add entries for litchi and longan from Thailand to the table in § 319.56-13 of the final rule. While it is necessary to include litchi and longan from Thailand in the regulations, we should have done so by listing their requirements for importation in a new section in order to specify that litchi and longan from Thailand are subject to additional measures besides inspection and labeling requirements. Therefore, the conditions governing the importation of litchi, longan, mango, mangosteen, pineapple, and rambutan from Thailand need to remain in the regulations. In addition, we provide in the table in § 319.56-13 that certain varieties of pineapples from Thailand may be imported into Guam and the Northern Mariana Islands without treatment; however, we neglected to note in the table that pineapples from Thailand may also be imported into the continental United States under the conditions provided in the June 21 final rule. Therefore, in this document we are amending the entry for Thailand in the table in § 319.56-13(a) by amending the provisions for pineapple and by removing the provisions for litchi and longan. We are also adding a new § 319.56-47, “Certain fruits from Thailand.” List of Subjects in 7 CFR Part 319 Coffee, Cotton, Fruits, Imports, Logs, Nursery stock, Plant diseases and pests, Quarantine, Reporting and recordkeeping requirements, Rice, Vegetables. Accordingly, we are amending 7 CFR part 319 as follows: PART 319—FOREIGN QUARANTINE NOTICES 1. The authority citation for part 319 continues to read as follows: Authority: 7 U.S.C. 450, 7701-7772, and 7781-7786; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.3. 2. In § 319.56-13, in the table in paragraph (a), the entry for Thailand is revised and a new footnote 3 is added to the table to read as follows: § 319.56-13 Fruits and vegetables allowed importation subject to specified conditions.
(a)* * * Country/locality of origin Common name Botanical name Plant part(s) Additional requirements * * * * * * * Thailand Pineapple 3 *Ananas comosus* Fruit (b)(2)(xi), (b)(5)(vi). * * * * * * * 3 Also eligible for importation in accordance with the provisions listed in § 319.56-47. 3. A new § 319.56-47 is added to read as follows: § 319.56-47 Certain fruits from Thailand. Litchi ( *Litchi chinensis* ), longan ( *Dimocarpus longan* ), mango ( *Mangifera indica* ), mangosteen ( *Garcinia mangoestana* L.), pineapple ( *Ananas comosus* ), and rambutan ( *Nephelium lappaceum* L.) may be imported into the United States from Thailand only under the following conditions:
(a)*Growing conditions.* Litchi, longan, mango, mangosteen, pineapple, and rambutan must be grown in a production area that is registered with and monitored by the national plant protection organization of Thailand.
(b)*Treatment.* Litchi, longan, mango, mangosteen, pineapple, and rambutan must be treated for plant pests of the class Insecta, except pupae and adults of the order Lepidoptera, with irradiation in accordance with § 305.31 of this chapter. Treatment must be conducted in Thailand prior to importation of the fruits into the United States.
(c)*Phytosanitary certificates.*
(1)Litchi must be accompanied by a phytosanitary certificate with an additional declaration stating that the litchi were treated with irradiation as described in paragraph
(b)of this section and that the litchi have been inspected and found to be free of *Peronophythora litchi.*
(2)Longan, mango, mangosteen, pineapple, and rambutan must be accompanied by a phytosanitary certificate with an additional declaration stating that the longan, mango, mangosteen, pineapple, or rambutan were treated with irradiation as described in paragraph
(b)of this section.
(d)*Labeling.* In addition to meeting the labeling requirements in § 305.31, cartons in which litchi and longan are packed must be stamped “Not for importation into or distribution in FL.” Done in Washington, DC, this 20th day of August 2007. Kevin Shea, Acting Administrator, Animal and Plant Health Inspection Service. [FR Doc. E7-16832 Filed 8-23-07; 8:45 am] BILLING CODE 3410-34-P FEDERAL RESERVE SYSTEM 12 CFR Part 201 [Regulation A] Extensions of Credit by Federal Reserve Banks AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule. SUMMARY: The Board of Governors of the Federal Reserve System (Board) has adopted final amendments to its Regulation A to reflect the Board's approval of a reduction in the primary credit rate at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically decreased by formula as a result of the Board's primary credit rate action. DATES: The amendments to part 201 (Regulation A) are effective August 24, 2007. The rate changes for primary and secondary credit were effective on the dates specified in 12 CFR 201.51, as amended. FOR FURTHER INFORMATION CONTACT: Jennifer J. Johnson, Secretary of the Board (202/452-3259); for users of Telecommunication Devices for the Deaf
(TDD)only, contact 202/263-4869. SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary and secondary credit available to depository institutions as a backup source of funding on a short-term basis, usually overnight. The primary and secondary credit rates are the interest rates that the twelve Federal Reserve Banks charge for extensions of credit under these programs. In accordance with the Federal Reserve Act, the primary and secondary credit rates are established by the boards of directors of the Federal Reserve Banks, subject to the review and determination of the Board. The Board approved requests by the Reserve Banks to reduce by 50 basis points the primary credit rate in effect at each of the twelve Federal Reserve Banks, thereby decreasing from 6.25 percent to 5.75 percent the rate that each Reserve Bank charges for extensions of primary credit. As a result of the Board's action on the primary credit rate, the rate that each Reserve Bank charges for extensions of secondary credit automatically decreased from 6.75 percent to 6.25 percent under the secondary credit rate formula. The final amendments to Regulation A reflect these rate changes. The Board's action narrows the spread between the primary credit rate and the Federal Open Market Committee's target federal funds rate to 50 basis points. As indicated in the Board's press release announcing this action, the changes to the primary credit discount window facility are intended to promote the restoration of orderly conditions in financial markets. In addition, the press release stated: The Board is also announcing a change to the Reserve Banks' usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. Regulatory Flexibility Act Certification Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Board certifies that the new primary and secondary credit rates will not have a significantly adverse economic impact on a substantial number of small entities because the final rule does not impose any additional requirements on entities affected by the regulation. Administrative Procedure Act The Board did not follow the provisions of 5 U.S.C. 553(b) relating to notice and public participation in connection with the adoption of these amendments because the Board for good cause determined that delaying implementation of the new primary and secondary credit rates in order to allow notice and public comment would be unnecessary and contrary to the public interest in fostering price stability and sustainable economic growth. For these same reasons, the Board also has not provided 30 days prior notice of the effective date of the rule under section 553(d). List of Subjects in 12 CFR Part 201 Banks, Banking, Federal Reserve System, Reporting and recordkeeping. Authority and Issuance For the reasons set forth in the preamble, the Board is amending 12 CFR Chapter II to read as follows: PART 201—EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION A) 1. The authority citation for part 201 continues to read as follows: Authority: 12 U.S.C. 248(i)-(j), 343 *et seq.* , 347a, 347b, 347c, 348 *et seq.* , 357, 374, 374a, and 461. 2. In § 201.51, paragraphs
(a)and
(b)are revised to read as follows: § 201.51 Interest rates applicable to credit extended by a Federal Reserve Bank. 1 1 The primary, secondary, and seasonal credit rates described in this section apply to both advances and discounts made under the primary, secondary, and seasonal credit programs, respectively.
(a)*Primary credit.* The interest rates for primary credit provided to depository institutions under § 201.4(a) are: Federal Reserve Bank Rate Effective Boston 5.75 August 17, 2007. New York 5.75 August 17, 2007. Philadelphia 5.75 August 17, 2007. Cleveland 5.75 August 17, 2007. Richmond 5.75 August 17, 2007. Atlanta 5.75 August 17, 2007. Chicago 5.75 August 17, 2007. St. Louis 5.75 August 20, 2007. Minneapolis 5.75 August 17, 2007. Kansas City 5.75 August 17, 2007. Dallas 5.75 August 17, 2007. San Francisco 5.75 August 17, 2007.
(b)*Secondary credit.* The interest rates for secondary credit provided to depository institutions under 201.4(b) are: Federal Reserve Bank Rate Effective Boston 6.25 August 17, 2007. New York 6.25 August 17, 2007. Philadelphia 6.25 August 17, 2007. Cleveland 6.25 August 17, 2007. Richmond 6.25 August 17, 2007. Atlanta 6.25 August 17, 2007. Chicago 6.25 August 17, 2007. St. Louis 6.25 August 20, 2007. Minneapolis 6.25 August 17, 2007. Kansas City 6.25 August 17, 2007. Dallas 6.25 August 17, 2007. San Francisco 6.25 August 17, 2007. By order of the Board of Governors of the Federal Reserve System, August 20, 2007. Jennifer J. Johnson, Secretary of the Board. [FR Doc. E7-16764 Filed 8-23-07; 8:45 am] BILLING CODE 6210-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2006-23742; Directorate Identifier 2005-NE-53-AD; Amendment 39-15180; AD 2007-17-21] RIN 2120-AA64 Airworthiness Directives; Pratt & Whitney
(PW)JT9D-7R4 Series Turbofan Engines AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. SUMMARY: The FAA is adopting a new airworthiness directive
(AD)for PW JT9D-7R4 series turbofan engines. This AD requires removing reduced cooling flow 2nd stage high pressure turbine
(HPT)vane assemblies, part numbers (P/Ns) 797282, 796972, 800082, 800072, 803182, 803282, and 822582, installed in 2nd stage HPT vane cluster assemblies P/Ns 797592, 797372, 799872, 799782, and 822572. It also requires a visual and a fluorescent penetrant inspection
(FPI)of the 2nd stage HPT air seal assembly, P/N 815097. This AD results from a report of an uncontained failure of the 2nd stage HPT air seal assembly, caused by the air seal assembly brace disengaging from the air seal, due to insufficient cooling air flow. We are issuing this AD to prevent uncontained failure of the 2nd stage HPT air seal assembly, leading to engine in-flight shutdown and damage to the airplane. DATES: This AD becomes effective September 28, 2007. The Director of the Federal Register approved the incorporation by reference of certain publications listed in the regulations as of September 28, 2007. ADDRESSES: You can get the service information identified in this AD from Pratt & Whitney, 400 Main St., East Hartford, CT 06108; telephone
(860)565-8770; fax
(860)565-4503. You may examine the AD docket on the Internet at *http://dms.dot.gov* or 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 20590. FOR FURTHER INFORMATION CONTACT: Mark Riley, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; telephone
(781)238-7758, fax
(781)238-7199. SUPPLEMENTARY INFORMATION: The FAA proposed to amend 14 CFR part 39 with a proposed AD. The proposed AD applies to PW JT9D-7R4E1, -7R4E4, -7R4G2, and -7R4H1 turbofan engines. We published the proposed AD in the **Federal Register** on February 2, 2007 (72 FR 4964). That action proposed to require removal of reduced cooling flow 2nd stage HPT vane assemblies. It also proposed to require a visual and an FPI of the 2nd stage HPT air seal assembly. 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 provided in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. Comments We provided the public the opportunity to participate in the development of this AD. We have considered the comments received. Revise the Cost Impact FEDEX requests that we revise the estimated cost impact to implement the AD because they believe that the actual cost of modification (according to PW Alert Service Bulletin
(ASB)JT9D-7R4-A72-596, dated September 15, 2005) for one set of HPT 2nd stage vane assemblies will be approximately $23,000, instead of $5,400 projected by the proposed AD. We do not agree. We provided the estimated material cost of $5,400 per engine from the engine manufacturer in the Costs of Compliance section in the proposed AD. Parts included new 2nd stage HPT vane covers, part number (P/N) 822734, and rivets, P/N ST1219-213, that are required to modify the 2nd stage HPT vane cluster assemblies, as specified in ASB JT9D-7R4-A72-596, dated September 15, 2005. However, based on latest pricing information in the PW spare parts price catalog, we increased the estimated material cost to $6,700. We also estimate that it will take about 65.5 work-hours per engine to perform the actions, and that the average labor rate is $80 per work-hour. Based on these figures, we estimate the total cost of the AD to be $11,940 per engine. Revise the Applicability Section Boeing Company asks that we revise paragraph
(c)of the AD to remove the reference to the Boeing model 747-200B, -200C, -200F, and -300 airplanes. Boeing states that the JT9D-7R4E1, -7R4E4, and -7R4H1 are not used on any model Boeing 747 and the description implies that these engines may be installed on the Boeing 747 airplane. We partially agree. We removed the letter designations for the 747-200 series airplanes. However, we do not agree that the airplane listing in paragraph
(c)implies that the JT9D-7R4E1, -7R4E4, and -7R4H1 engines may be installed on the Boeing 747. The airplane references in paragraph
(c)are informative only. The Type Certificate Data Sheet for an airplane specifies the engines that are installed on the airplane, not the applicability paragraph of an AD. PW asks that we revise the Applicability section to clarify the affected engine models. They also request that we add the following aircraft to the list of airplanes that can have these engines installed: Boeing 767-200, Airbus A300-600, and A310-300. We partially agree and revised the Applicability section of the AD to add Boeing 767-200, and Airbus A300-600 and A310-300 airplane models to paragraph
(c)of the AD. We do not agree that we need to clarify the engine models with Pratt & Whitney internal model designation. We specify the affected engines by the model designations specified in the Type Certificate Data Sheet for the engine. Revise Paragraph
(f)of the Compliance Section PW asks that we revise paragraph
(f)of the Compliance section to delete the specific lenticular seal part number reference, as there are other lenticular seal part numbers in the field that will also require visual and FPI inspections at the next HPT module exposure. We partially agree. The specific lenticular seal part number should be removed from paragraph
(f)of the Compliance section of the AD because there are other lenticular seal part numbers in the field that will also require inspections. However, to prevent further delay in addressing the unsafe condition, we are issuing this AD with the specific lenticular seal part number listed. Removal of the part number will expand the number of parts requiring inspection and we must give the public an opportunity to comment on this change before we can incorporate it. We will supersede this AD to remove the lenticular seal part number. List Required Lenticular Seal Inspections PW asks that we revise paragraph
(f)of the Compliance section to list all of the specific inspections required for the lenticular seal. We agree and listed each inspection procedure in the PW engine manual required for the lenticular seal. We also changed the paragraph to (g). Revise Paragraph
(g)of the Compliance Section PW also asks that we revise paragraph
(g)of the Compliance section to reference the associated 2nd stage HPT vane cluster assemblies (higher level assembly) that have reduced cooling flow 2nd stage HPT vane assemblies installed, because airlines may not recognize individual 2nd stage vane assemblies. We agree. We revised paragraph
(g)of the Compliance section to state the following: “At the next HPT module exposure, remove reduced cooling flow 2nd stage HPT vane assemblies, P/Ns 797282, 796972, 800082, 800072, 803182, 803282, and 822582, installed in 2nd stage HPT vane cluster assemblies, P/Ns 797592, 797372, 799872, 799782, and 822572.” We also designated the paragraph as (f). Correct Errors and Remove Duplicate P/N Reference Boeing Company asks that we correct typographical errors for the engine designations in paragraph
(c)in the Applicability section. Boeing states that the JT9D-74R4E1, -74R4E4, -74R4G2, and -74R4H1 should be JT9D-7R4E1, -7R4E4, -7R4G2, and -7R4H1, respectively. Boeing also asks that we revise paragraph
(g)in the Compliance section to remove a duplicate reference to part number 803182. We agree and corrected the Applicability section and the duplicate P/N reference in paragraph (g). 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 We estimate that this proposed AD would affect 85 PW JT9D-7R4 series turbofan engines installed on airplanes U.S. registry. We also estimate that it will take about 65.5 work-hours per engine to perform the actions, and that the average labor rate is $80 per work-hour. Required parts will cost about $6,700 per engine. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $1,014,900. 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 summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary at the address listed under ADDRESSES . List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. Adoption of the Amendment Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration 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: **2007-17-21 Pratt & Whitney:** Amendment 39-15180. Docket No. FAA-2006-23742; Directorate Identifier 2005-NE-53-AD. Effective Date
(a)This airworthiness directive
(AD)becomes effective September 28, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Pratt & Whitney
(PW)JT9D-7R4G2, -7R4E1, -7R4E4, and -7R4H1 series turbofan engines. These engines are installed on, but not limited to, Boeing 747-200, -300, 767-200, and Airbus A300-600 and A310-300 series airplanes. Unsafe Condition
(d)This AD results from a report of an uncontained failure of the 2nd stage high pressure turbine
(HPT)air seal assembly, caused by the air seal assembly brace disengaging from the air seal, due to insufficient cooling air flow. We are issuing this AD to prevent uncontained failure of the 2nd stage HPT air seal assembly, leading to engine in-flight shutdown and damage to the airplane. Compliance
(e)You are responsible for having the actions required by this AD performed at the next HPT module exposure after the effective date of this AD, unless the actions have already been done.
(f)At the next HPT module exposure, remove reduced cooling flow 2nd stage HPT vane assemblies part numbers (P/Ns): 797282, 796972, 800082, 800072, 803182, 803282, and 822582, installed in 2nd stage HPT vane cluster assemblies: P/Ns 797592, 797372, 799872, 799782, and 822572.
(g)For 2nd stage HPT air seals that have operated in an engine with reduced cooling flow HPT vane assemblies, at the next HPT module exposure do the following:
(1)Perform a onetime visual inspection of the 2nd stage HPT air seal assembly, P/N 815097, using instructions in JT9D-7R4 engine manual, Section 72-51-22, Inspection/Check-01, paragraphs 1.D.(1), 1.D.(4), and 1.D.(6).
(2)Perform a fluorescent penetrant inspection
(FPI)of the 2nd stage HPT air seal assembly for cracks, using instructions in JT9D-7R4 engine manual, Section 71-51-00, Inspection/Check-03. Definition
(h)For the purpose of this AD, an HPT module exposure is defined as removing the 1st stage HPT rotor or the 2nd stage HPT rotor from the HPT case. Alternative Methods of Compliance
(i)The Manager, Engine Certification Office, has the authority to approve alternative methods of compliance for this AD if requested using the procedures found in 14 CFR 39.19. Related Information
(j)Pratt & Whitney Alert Service Bulletin JT9D-7R4-A72-596, dated September 15, 2005, contains information for modifying the reduced cooling flow 2nd stage HPT vane assemblies. Issued in Burlington, Massachusetts, on August 17, 2007. Peter A. White, Acting Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7-16665 Filed 8-23-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [TD 9357] RIN 1545-BE09 Elimination of Country-by-Country Reporting to Shareholders of Foreign Taxes Paid by Regulated Investment Companies AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. SUMMARY: This document contains final regulations that generally eliminate country-by-country reporting by a regulated investment company
(RIC)to its shareholders of foreign source income that the RIC takes into account and foreign taxes that it pays. This change is necessary to conform the regulations to changes in the tax law relating to the foreign tax credit. These final regulations will affect certain RICs that pay foreign taxes and the shareholders of those RICs. DATES: *Effective Date:* These regulations are effective August 24, 2007. *Applicability Date:* These regulations are applicable for RIC taxable years ending on or after December 31, 2007. For reporting purposes, however, a taxpayer may rely on the current regulations for a taxable year ending on or after December 31, 2007, and beginning before August 24, 2007. FOR FURTHER INFORMATION CONTACT: Richard C. LaFalce,
(202)622-3930 (not a toll-free number). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information contained in these final regulations has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-2035. Comments on the accuracy of the estimated burden and suggestions for reducing the burden should be sent to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. The collection of information in these final regulations is in § 1.853-4(c) and (d). A RIC is required to notify the IRS of amounts of income received from sources within foreign countries and possessions of the United States and taxes paid to each such foreign country or possession in order that the IRS may monitor shareholder compliance with the foreign tax credit provisions. The collection of information is required if a RIC elects to pass through the benefits of the foreign tax credit to its shareholders. *Estimated total annual recordkeeping burden:* 80 hours. *Estimated average annual burden per recordkeeper:* 2 hours. *Estimated number of recordkeepers:* 40. *Estimated frequency of recordkeeping:* Annually. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Background This document contains amendments to 26 CFR part 1 under section 853 of the Internal Revenue Code (Code). On September 18, 2006, a notice of proposed rulemaking (REG-105248-04) was published in the **Federal Register** (71 FR 54598). Comments were specifically requested with respect to the effective date of the final regulations. In response, a trade association sent a letter requesting that RICs be allowed to rely on the proposed regulations for 2006. This request was not granted. No public hearing was requested or held. The proposed regulations are adopted by this Treasury decision with minor modifications. The applicability date for these regulations as adopted, balances the industry's desire promptly to eliminate unneeded RIC reporting with the IRS's need for time in which to update its forms and instructions, thereby reducing potential taxpayer confusion that may arise from the new reporting requirements. Section 853 provides a foreign tax credit or deduction to shareholders of a RIC that makes an election under, and that meets the requirements set forth in, that section. A RIC more than 50 percent of the value of whose total assets at the close of a taxable year consists of stock or securities in foreign corporations may make an election under section 853 (a “foreign tax passthrough election”). If the RIC makes this election for that taxable year, it forgoes a deduction or credit for certain taxes paid to foreign countries and possessions of the United States (collectively, “foreign taxes”) (but the amount of the foreign taxes is allowed as an addition to the RIC's deduction for dividends paid for the year). Instead, the RIC passes through to its shareholders a credit or deduction for the foreign taxes it has paid during its taxable year. If the RIC makes this election, each shareholder includes the shareholder's proportionate share of these foreign taxes in gross income and treats this proportionate share as paid by the shareholder. Each shareholder of an electing RIC further treats as gross income from sources within foreign countries and possessions of the United States the sum of the shareholder's proportionate share of these taxes and the portion of any dividend paid by the RIC that represents income derived from sources within foreign countries and possessions of the United States. Each shareholder may then deduct, or claim a credit for the payment of, a proportionate share of these taxes. A RIC electing this treatment must provide information to its shareholders and to the IRS. First, under section 853(c) of the Code, the RIC must designate, in a written notice mailed to shareholders not later than 60 days after the close of its taxable year, each shareholder's proportionate share of foreign taxes paid by the RIC and each shareholder's proportionate share of the RIC's gross income derived from sources within any foreign country or possession of the United States. Section 1.853-3(a) of the current Income Tax Regulations requires that this notice designate the shareholder's portion of foreign taxes paid to each such foreign country or possession of the United States and the portion of the dividend that represents income derived from sources within each foreign country or possession of the United States. Second, under current § 1.853-4(a), the RIC must file with Form 1099-DIV, “Dividends and Distributions,” and Form 1096, “Annual Summary and Transmittal of U.S. Information Returns,” a statement as part of its income tax return (Form 1120-RIC or its successor) that sets forth the total amount of income received from sources within foreign countries and possessions of the United States; the total amount of foreign taxes paid; the date, form, and contents of the notice to its shareholders; and the proportionate share of this income received and these taxes paid during the taxable year attributable to one share of its stock. The RIC must also file as part of its return for the taxable year a Form 1118, “Foreign Tax Credit—Corporations,” that has been modified so that it is a statement in support of the RIC's foreign tax passthrough election. The requirement of current § 1.853-3(a) that an electing RIC provide country-by-country information to its shareholders on foreign-source income received and foreign taxes paid was adopted at a time when many shareholders generally needed the information to apply a per-country limitation on the foreign tax credit. Because of changes to the foreign tax credit provisions of the Code, shareholders generally no longer need country-by-country information on the amounts of foreign-source income and foreign taxes paid. The Treasury Department and the IRS have received comments suggesting that the section 853 regulations should be amended to eliminate per-country reporting to shareholders and that Form 1116, “Foreign Tax Credit—Individual, Estate or Trust,” should be modified to indicate that distributions from RICs are exempt from per-country shareholder reporting. According to these comments, eliminating the reporting of this information not only would reduce the time and expense required of RICs to compile and disseminate this tax information but also would reduce the confusion that their shareholders experience upon receipt of the extensive tables used to report this per-country information. Even though the section 904 foreign tax credit limitation has been applied on a separate-category-of-income basis, instead of on a per-country basis, since 1976, the Treasury Department and the IRS have continued to require the reporting of per-country information by RICs. This per-country information remains relevant to the IRS's monitoring compliance with the section 901 rules that disallow credits for refundable and noncompulsory payments and for taxes paid to certain countries. See § 1.901-2(e)(2) and (5), providing that credit is not allowed for amounts that are in excess of final liability under foreign law for tax, and section 901(j), denying credit for tax paid to countries described in section 901(j)(2)(A) and subjecting income from sources in those countries to separate foreign tax credit limitations. Although per-country information with respect to foreign income and foreign taxes is needed for the IRS to monitor compliance, the Treasury Department and the IRS believe that taxpayer burden can be reduced by continuing to require this information to be supplied with the RIC's tax return but generally not requiring it to be reported to the RIC's shareholders as well. Accordingly, the final regulations revise § 1.853-3 and § 1.853-4 to require that a RIC provide aggregate per-country information on a statement filed with its tax return and require that only summary foreign income and foreign tax amounts be reported to its shareholders. The instructions to Forms 1116 and 1118 will be modified to permit summary reporting at the shareholder level similar to the summary reporting currently permitted with respect to “section 863(b) income” on Forms 1116 and 1118. Explanation of Provisions The final regulations update § 1.853-1 to reflect statutory amendments providing that the foreign tax passthrough election is not applicable to taxes for which the RIC would not be allowed a credit by reason of section 901(j) (denying credit for taxes paid to certain countries, including those with which the United States does not have diplomatic relations), section 901(k) and
(l)(denying credit for withholding taxes paid on certain income where certain holding period requirements are not met), or any similar provision. The final regulations change in two ways the regulations that set forth requirements for a RIC seeking to make and to notify shareholders of a foreign tax passthrough election: First, references in § 1.853-3(a) and
(b)to required statements to shareholders of dollar amounts of taxes paid to specific countries, and to dollar amounts of income considered as received from specific countries, are changed to require that a RIC (or a shareholder of record of the RIC who is a nominee acting as a custodian of a unit investment trust) state only the total amount of the RIC's shareholder's (or the record shareholder nominee's principal's) proportionate share of creditable foreign taxes paid, income from sources within countries described in section 901(j), if any, and income derived from sources within other foreign countries or possessions of the United States. Second, the final regulations extend various deadlines in § 1.853-3(b) to reflect statutory changes since the regulations were issued. Thus the number of days following the close of its taxable year by which a RIC must notify its shareholders in writing of the making of a foreign tax passthrough election is increased to 60. References to the number of days following the close of the taxable year by which a nominee acting as a custodian of a unit investment trust must notify holders of interests in the unit investment trust is increased to 70. Similarly, references to the number of days following the close of a RIC's taxable year by which a statement that holders of interests in unit investment trusts have been directly notified by the RIC (or a statement that the RIC has failed or is unable to notify these holders of interests) must be filed with the IRS and transmitted to a nominee is increased to 60. Section 1.853-4 is modified to create more flexibility in the references to specific forms. The current regulations require a RIC to file statements with Form 1099 and Form 1096 and to file, as a part of its return for the taxable year, a Form 1118, modified so that it becomes a statement in support of the election made by a RIC to pass through taxes paid to a foreign country or a possession of the United States. The first of these requirements, the requirement to file statements with Forms 1099 and 1096, is eliminated. The final regulations retain the general requirement that a RIC must file as part of its return a statement that elects the application of section 853 for the taxable year. Section 1.853-4(a) also requires that a RIC agree to provide certain information on foreign-source income received and foreign taxes paid. The information required to be provided is set forth in § 1.853-4(c). Section 1.853-4(d) continues to provide that this required information is to be provided on or with a modified Form 1118 but adds that it may instead be provided in such other form or manner as may be prescribed by the Commissioner. This change facilitates future changes in administrative practice if, for example, forms are renumbered or become obsolete. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations because these regulations do not impose a collection of information on small entities. Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), it has also been determined that the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply to these regulations because these regulations do not have a significant economic impact on a substantial number of small entities. According to the Small Business Administration definition of a “small business,” 13 CFR 121.201, a RIC is classified as a Portfolio Management company, NAICS code 523920, and is considered a small entity if it accumulates less than 6.5 million dollars in annual receipts. It has been determined that RICs affected by these regulations generally will have greater than 6.5 million dollars in annual receipts and therefore will not generally be classified as small business entities. Because the summary reporting of the foreign tax credit information provided by these regulations is universally less burdensome than the reporting of country-by-country information previously required, it is also clear that these regulations do not have a significant economic impact on affected RICs. Pursuant to section 7805(f) of the Internal Revenue Code, the proposed regulations preceding these regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. Drafting Information The principal author of this regulation is Richard C. LaFalce of the Office of Associate Chief Counsel (Financial Institutions and Products). List of Subjects *26 CFR Part 1* Income taxes, Reporting and recordkeeping requirements. *26 CFR Part 602* Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR parts 1 and 602 are amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 is amended by adding entries in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * * Section 1.853-1 also issued under 26 U.S.C. 901(j). Section 1.853-2 also issued under 26 U.S.C. 901(j). Section 1.853-3 also issued under 26 U.S.C. 901(j). Section 1.853-4 also issued under 26 U.S.C. 901(j) and 26 U.S.C. 6011. * * * **Par. 2.** Section 1.853-1 is amended by adding a sentence at the end of paragraph
(a)and adding paragraph
(c)to read as follows: § 1.853-1 Foreign tax credit allowed to shareholders.
(a)*In general.* * * * In addition, the election is not applicable to any tax with respect to which the regulated investment company is not allowed a credit by reason of any provision of the Internal Revenue Code other than section 853(b)(1), including, but not limited to, section 901(j), section 901(k), or section 901(l).
(c)*Effective/applicability date.* The final sentence of paragraph
(a)of this section is applicable for RIC taxable years ending on or after December 31, 2007. **Par. 3.** Section 1.853-2 is amended by revising paragraph
(d)and adding paragraph
(e)to read as follows: § 1.853-2 Effect of election.
(d)*Example.* This section is illustrated by the following example: Example.
(i)*Facts* . X Corporation, a regulated investment company with 250,000 shares of common stock outstanding, has total assets, at the close of the taxable year, of $10 million ($4 million invested in domestic corporations, $3.5 million in Foreign Country A corporations, and $2.5 million in Foreign Country B corporations). X Corporation received dividend income of $800,000 from the following sources: $300,000 from domestic corporations, $250,000 from Country A corporations, and $250,000 from Country B corporations. All dividends from Country A corporations and from Country B corporations were properly characterized as income from sources without the United States. The dividends from Country A corporations were subject to a 10 percent withholding tax ($25,000) and the dividends from Country B corporations were subject to a 20 percent withholding tax ($50,000). X Corporation's only expenses for the taxable year were $80,000 of operation and management expenses related to both its U.S. and foreign investments. In this case, Corporation X properly apportioned the $80,000 expense based on the relative amounts of its U.S. and foreign source gross income. Thus, $50,000 in expense was apportioned to foreign source income ($80,000 × $500,000/$800,000, total expense times the fraction of foreign dividend income over total dividend income) and $30,000 in expense was apportioned to U.S. source income ($80,000 × $300,000/$800,000, total expense times the fraction of U.S. source dividend income over total dividend income). During the taxable year, X Corporation distributed to its shareholders the entire $645,000 income that was available for distribution ($800,000, less $80,000 in expenses, less $75,000 in foreign taxes withheld).
(ii)*Section 853 election.* X Corporation meets the requirements of section 851 to be considered a RIC for the taxable year and the requirements of section 852(a) for part 1 of subchapter M to apply for the taxable year. X Corporation notifies each shareholder by mail, within the time prescribed by section 853(c), that by reason of the election the shareholders are to treat as foreign taxes paid $0.30 per share of stock ($75,000 of foreign taxes paid, divided by the 250,000 shares of stock outstanding). The shareholders must report as income $2.88 per share ($2.58 of dividends actually received plus the $0.30 representing foreign taxes paid). Of the $2.88 per share, $1.80 per share ($450,000 of foreign source taxable income divided by 250,000 shares) is to be considered as received from foreign sources. The $1.80 consists of $0.30, the foreign taxes treated as paid by the shareholder and $1.50, the portion of the dividends received by the shareholder from the RIC that represents income of the RIC treated as derived from foreign sources ($500,000 of foreign source income, less $50,000 of expense apportioned to foreign source income, less $75,000 of foreign tax withheld, which is $375,000, divided by 250,000 shares).
(e)*Effective/applicability date.* Paragraph
(d)of this section is applicable for RIC taxable years ending on or after December 31, 2007. Notwithstanding the preceding sentence, for a taxable year that ends on or after December 31, 2007, and begins before August 24, 2007, a taxpayer may rely on this section as it was in effect on August 23, 2007. **Par. 4.** Section 1. 853-3 is amended by: 1. Revising paragraph (a). 2. Removing the number “55th” and adding the number “70th” in its place in the first sentence of paragraph (b). 3. Revising the second sentence of paragraph (b). 4. Removing the number “45” and adding the number “60” in its place in each place in which it appears in the fifth sentence of paragraph (b). 5. Adding paragraph (c). The revisions and addition read as follows: § 1.853-3 Notice to shareholders.
(a)*General rule.* If a regulated investment company makes an election under section 853(a), in the manner provided in § 1.853-4, the regulated investment company is required under section 853(c) to furnish its shareholders with a written notice mailed not later than 60 days after the close of its taxable year. The notice must designate the shareholder's portion of creditable foreign taxes paid to foreign countries or possessions of the United States and the portion of the dividend that represents income derived from sources within each country that is attributable to a period during which section 901(j) applies to such country, if any, and the portion of the dividend that represents income derived from other foreign countries and possessions of the United States. For purposes of section 853(b)(2) and § 1.853-2(b), the amount that a shareholder may treat as the shareholder's proportionate share of foreign taxes paid and the amount to be included as gross income derived from any foreign country that is attributable to a period during which section 901(j) applies to such country or gross income from sources within other foreign countries or possessions of the United States shall not exceed the amount so designated by the regulated investment company in such written notice. If, however, the amount designated by the regulated investment company in the notice exceeds the shareholder's proper proportionate share of foreign taxes or gross income from sources within foreign countries or possessions of the United States, the shareholder is limited to the amount correctly ascertained.
(b)* * * The notice shall designate the holder's proportionate share of the amounts of creditable foreign taxes paid to foreign countries or possessions of the United States and the holder's proportionate share of the dividend that represents income derived from sources within each country that is attributable to a period during which section 901(j) applies to such country, if any, and the holder's proportionate share of the dividend that represents income derived from other foreign countries or possessions of the United States shown on the notice received by the nominee pursuant to paragraph
(a)of this section. * * *
(c)*Effective/applicability date.* This section is applicable for RIC taxable years ending on or after December 31, 2007. Notwithstanding the preceding sentence, for a taxable year that ends on or after December 31, 2007, and begins before August 24, 2007, a taxpayer may rely on this section as it was in effect on August 23, 2007. **Par. 5.** Section 1.853-4 is revised to read as follows: § 1.853-4 Manner of making election.
(a)*General rule.* To make an election under section 853 for a taxable year, a regulated investment company must file a statement of election as part of its Federal income tax return for the taxable year. The statement of election must state that the regulated investment company elects the application of section 853 for the taxable year and agrees to provide the information required by paragraph
(c)of this section.
(b)*Irrevocability of the election.* The election shall be made with respect to all foreign taxes described in paragraph (c)(2) of this section, and must be made not later than the time prescribed for filing the return (including extensions). This election, if made, shall be irrevocable with respect to the dividend (or portion thereof), and the foreign taxes paid with respect thereto, to which the election applies.
(c)*Required information.* A regulated investment company making an election under section 853 must provide the following information:
(1)The total amount of taxable income received in the taxable year from sources within foreign countries and possessions of the United States and the amount of taxable income received in the taxable year from sources within each such foreign country or possession.
(2)The total amount of income, war profits, or excess profits taxes (described in section 901(b)(1)) to which the election applies that were paid in the taxable year to such foreign countries or possessions and the amount of such taxes paid to each such foreign country or possession.
(3)The amount of income, war profits, or excess profits taxes paid during the taxable year to which the election does not apply by reason of any provision of the Internal Revenue Code other than section 853(b), including, but not limited to, section 901(j), section 901(k), or section 901(l).
(4)The date, form, and contents of the notice to its shareholders.
(5)The proportionate share of creditable foreign taxes paid to each such foreign country or possession during the taxable year and foreign income received from sources within each such foreign country or possession during the taxable year attributable to one share of stock of the regulated investment company.
(d)*Time and manner of providing information.* The information specified in paragraph
(c)of this section must be provided at the time and in the manner prescribed by the Commissioner and, unless otherwise prescribed, must be provided on or with a modified Form 1118 “Foreign Tax Credit—Corporations” filed as part of the RIC's timely filed Federal income tax return for the taxable year.
(e)*Effective/applicability date.* This section is applicable for RIC taxable years ending on or after December 31, 2007. Notwithstanding the preceding sentence, for a taxable year that ends on or after December 31, 2007, and begins before August 24, 2007, a taxpayer may rely on this section as it was in effect on August 23, 2007. PART 602—OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT **Par. 6.** The authority citation for part 602 continues to read as follows: Authority: 26 U.S.C. 7805. **Par. 7.** In § 602.101, paragraph
(b)is amended by revising the entries for 1.853-3 and 1.853-4 to read as follows: § 602.101 OMB Control numbers.
(b)* * * CFR part or section where identified or described Current OMB control No. * * * * * 1.853-3 1545-2035 1.853-4 1545-2035 * * * * * Kevin M. Brown, Deputy Commissioner for Services and Enforcement. Approved: August 9, 2007. Karen G. Sowell, Deputy Assistant Secretary of the Treasury (Tax Policy). [FR Doc. E7-16737 Filed 8-23-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [CGD05-07-083] Drawbridge Operation Regulations; Atlantic Intracoastal Waterway (AICW), NC AGENCY: Coast Guard, DHS. ACTION: Notice of temporary deviation from regulations. SUMMARY: The Commander, Fifth Coast Guard District, has approved a temporary deviation from the regulations governing the operation of the Onslow Beach Swing Bridge, at AICW mile 240.7, in Camp Lejeune, NC. This deviation allows the drawbridge to remain closed-to-navigation from 8 a.m. on September 11, 2007 until and including 8 a.m. on September 13, 2007, and from 8 a.m. on September 25, 2007 until and including 8 a.m. on September 27, 2007, to facilitate mechanical repairs. DATES: This deviation is effective from 8 a.m. on September 11, 2007 to 8 a.m. on September 27, 2007. ADDRESSES: Materials referred to in this document are available for inspection or copying at Commander (dpb), Fifth Coast Guard District, Federal Building, 1st Floor, 431 Crawford Street, Portsmouth, VA 23704-5004 between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The telephone number is
(757)398-6222. Commander (dpb), Fifth Coast Guard District maintains the public docket for this temporary deviation. FOR FURTHER INFORMATION CONTACT: Bill H. Brazier, Bridge Management Specialist, Fifth Coast Guard District, at
(757)398-6422. SUPPLEMENTARY INFORMATION: The Onslow Beach Swing Bridge has a vertical clearance in the closed position to vessels of 12 feet, above mean high water. The U.S. Navy (the bridge owner) has requested a temporary deviation from the current operating regulations set out in 33 CFR 117.821(a)(2) to close the drawbridge to navigation to facilitate hydraulic repairs on the northeast and southeast ends and the power components of bridge. To facilitate the mechanical repairs, the Onslow Beach Swing Bridge will be maintained in the closed-to-navigation position from 8 a.m. on Tuesday, September 11, 2007 until and including 8 a.m. on Thursday, September 13, 2007, and from 8 a.m. on Tuesday, September 25, 2007 until and including 8 a.m. on Thursday, September 27, 2007. The Coast Guard has informed the known commercial users of the waterway of the change to the regulations concerning this so that these vessels can arrange their transits to minimize any impact caused by the temporary deviation. In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35. Dated: August 16, 2007. Waverly W. Gregory, Jr., Chief, Bridge Administration Branch, Fifth Coast Guard District. [FR Doc. E7-16727 Filed 8-23-07; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [COTP Honolulu 07-005] RIN 1625-AA87 Security Zone; Waters Surrounding U.S. Forces Vessel SBX-1, HI AGENCY: Coast Guard, DHS. ACTION: Temporary final rule. SUMMARY: The Coast Guard is establishing a temporary 500-yard moving security zone around the U.S. Forces vessel SBX-1 during transit within the Honolulu Captain of the Port Zone. The security zone is necessary to protect the SBX-1 from hazards associated with vessels and persons approaching too close during transit. Entry of persons or vessels into this temporary security zone is prohibited unless authorized by the Captain of the Port (COTP). DATES: This rule is effective from 9 a.m.
(HST)on August 1, 2007, through 11:59 p.m.
(HST)on September 30, 2007. ADDRESSES: Documents indicated in this preamble as being available in the docket are part of docket [COTP Honolulu 07-005] and are available for inspection or copying at Coast Guard Sector Honolulu 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 We did not publish a notice of proposed rulemaking
(NPRM)for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The Coast Guard was not given the final voyage plan in time to initiate full rulemaking, and the need for this temporary security zone was not determined until less than 30 days before the SBX-1 will require the zone's protection. Publishing an NPRM and delaying the effective date would be contrary to the public interest since the transit would occur before completion of the rulemaking process, thereby jeopardizing the security of the people and property associated with the operation. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the **Federal Register** . The COTP finds this good cause to be the immediate need for a security zone to allay the waterborne security threats surrounding the SBX-1's transit. Background and Purpose On approximately August 1, 2007, the SBX-1 is scheduled to transit U.S. navigable waters in the Honolulu Captain of the Port Zone from Pearl Harbor, HI to sea for sea trials. The SBX-1 will be returning to Pearl Harbor, HI and departing again as needed for maintenance and logistical reasons. The Coast Guard is establishing this security zone to ensure the vessel's protection during its transit(s). Discussion of Rule This temporary security zone is effective from 9 a.m.
(HST)on August 1, 2007, through 11:59 p.m.
(HST)on September 30, 2007. It is located within the Honolulu Captain of the Port Zone (See 33 CFR 3.70-10) and covers all U.S. navigable waters extending 500 yards in all directions from the U.S. Forces vessel SBX-1, from the surface of the water to the ocean floor. The security zone moves with the SBX-1 while in transit. The security zone becomes fixed when the SBX-1 is anchored, position-keeping, or moored. The SBX-1 is easy to recognize because it contains a large white object shaped like an egg supported by a platform that is larger than a football field. The platform in turn is supported by six pillars similar to those on large oil-drilling platforms. The general regulations governing security zones contained in 33 CFR 165.33 apply. Entry into, transit through, or anchoring within this zone is prohibited unless authorized by the Captain of the Port or a designated representative thereof. The Captain of the Port will cause notice of the enforcement of the security zone described in this section to be made by broadcast notice to mariners. Any Coast Guard commissioned, warrant, or petty officer, and any other Captain of the Port representative permitted by law, may enforce the zone. The Captain of the Port may waive any of the requirements of this rule for any person, vessel, or class of vessel upon finding that application of the security zone is unnecessary or impractical for the purpose of maritime security. Vessels or persons violating this rule are subject to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192. Regulatory Evaluation This rule is not a “significant regulatory action” under § 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under § 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 under the regulatory policies and procedures of DHS is unnecessary. This expectation is based on the limited duration of the zone, the limited geographic area affected by it, and its ability to move with the protected vessel. 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. We expect that there will be little or no impact to small entities due to the narrowly tailored scope of this security zone. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer 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 either preempts State law or imposes 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 is 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, which guides 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 limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, under figure 2-1, paragraph (34)(g) of the Commandant Instruction M16475.1D, this rule is categorically excluded from further environmental documentation because this rule establishes a security zone. A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES . List of Subjects 33 CFR Part 165 Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1. 2. Add temporary § 165.T14-156 to read as follows: § 165.T14-156 Security Zone; Waters Surrounding U.S. Forces Vessel SBX-1, HI.
(a)*Location.* The following area, in U.S. navigable waters within the Honolulu Captain of the Port Zone (See 33 CFR 3.70-10), from the surface of the water to the ocean floor, is a security zone: All waters extending 500 yards in all directions from U.S. Forces vessel SBX-1. The security zone moves with the SBX-1 while it is in transit and becomes fixed when the SBX-1 is anchored, position-keeping, or moored.
(b)*Effective period.* This section is effective from 9 a.m.
(HST)on August 1, 2007, through 11:59 p.m.
(HST)on September 30, 2007.
(c)*Regulations.* The general regulations governing security zones contained in 33 CFR 165.33 apply. Entry into, transit through, or anchoring within this zone is prohibited unless authorized by the Captain of the Port or a designated representative thereof.
(d)*Enforcement.* The Coast Guard will begin enforcement of the security zone described in this section upon the SBX-1's entry into U.S. navigable waters within the Honolulu Captain of the Port Zone.
(e)*Informational notice.* The Captain of the Port of Honolulu will ensure notice of the enforcement of the security zone described in this section is communicated by broadcast notice to mariners.
(f)*Authority to enforce.* Any Coast Guard commissioned, warrant, or petty officer, and any other Captain of the Port representative permitted by law, may enforce this temporary security zone.
(g)*Waiver.* The Captain of the Port may waive any of the requirements of this rule for any person, vessel, or class of vessel upon finding that application of the security zone is unnecessary or impractical for the purpose of maritime security.
(h)*Penalties.* Vessels or persons violating this rule are subject to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192. Dated: August 1, 2007. V.B. Atkins, Captain, U.S. Coast Guard, Captain of the Port, Honolulu. [FR Doc. E7-16731 Filed 8-23-07; 8:45 am] BILLING CODE 4910-15-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 and 81 [EPA-RO4-OAR-2006-0584-200723(c); FRL-8460-6] Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes; Kentucky: Redesignation of the Kentucky Portion of the Louisville 8-Hour Ozone Nonattainment Area to Attainment for Ozone; Technical Amendment AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule; technical amendment. SUMMARY: On July 5, 2007, EPA published in the **Federal Register** a final rule redesignating the Kentucky portion of the bi-state Louisville 8-hour ozone nonattainment area to attainment for the 8-hour ozone National Ambient Air Quality Standard (NAAQS). EPA inadvertently omitted the State effective date in the regulatory text in the final rule for the Louisville 8-hour ozone maintenance plan. This action corrects the July 5, 2007, final rule by adding a State effective date of September 29, 2006. DATES: This action is effective August 24, 2007. ADDRESSES: Copies of the documentation used in the action being corrected are available for inspection during normal business hours at the following location: U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays. FOR FURTHER INFORMATION CONTACT: Heidi LeSane, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is
(404)562-9074. Ms. LeSane can also be reached via electronic mail at *Lesane.heidi@epa.gov.* SUPPLEMENTARY INFORMATION: On July 5, 2007 (72 FR 36601), EPA published in the **Federal Register** a final rule redesignating the Kentucky portion of the bi-state Louisville 8-hour ozone nonattainment area to attainment for the 8-hour ozone NAAQS. On page 33604 in the table titled “EPA-Approved Kentucky Non-Regulatory Provisions” under the subject “State submittal date/effective date” for the entry “Louisville 8-hour Ozone Maintenance Plan” EPA inadvertently omitted the State effective date. This omission is being corrected by adding the State effective date of September 29, 2006. EPA has determined that today's action falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedure Act
(APA)which, upon finding “good cause,” authorizes agencies to dispense with public participation where public notice and comment procedures are impracticable, unnecessary or contrary to the public interest. Public notice and comment for this action are unnecessary because today's action to add the State effective date of the Louisville 8-hour ozone maintenance plan has no substantive impact on EPA's July 5, 2007, redesignation approval. That is, the addition of the State effective date makes no substantive difference to EPA's redesignation analysis as set out in our July 5, 2007, rule, and merely corrects an error made in that prior rulemaking. In addition, EPA can identify no particular reason why the public would be interested in being notified of the correction of this error or in having the opportunity to comment on the correction prior to this action being finalized, since this correction action does not change the redesignation approval and merely states when the Louisville 8-hour ozone maintenance plan was State effective. EPA also finds that there is good cause under APA section 553(d)(3) for this correction to become effective on the date of publication of this action. Section 553(d)(3) of the APA 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.” 5 U.S.C. 553(d)(3). The purpose of the 30-day waiting period prescribed in APA section 553(d)(3) 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 merely corrects an inadvertent omission by adding the State effective date of the Louisville 8-hour ozone maintenance plan. For these reasons, EPA finds good cause under APA section 553(d)(3) for this correction to become effective on the date of publication of this action. 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 corrects an inadvertent omission 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 merely corrects an inadvertent omission by adding the State effective date of the Louisville 8-hour ozone maintenance plan 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 corrects an inadvertent omission, does not impose any new requirements on sources or allow a State to avoid adopting or implementing other requirements, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act (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 is not economically significant and because the Agency does not have reason to believe that the rule concerns an environmental health risk or safety risk that may disproportionately affect children. In reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. 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 23, 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) of the CAA.) List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds. Dated: August 16, 2007. J.I. Palmer, Jr., Regional Administrator, Region 4. 40 CFR part 52 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 S—Kentucky 2. Section 52.920(e) is amended by revising the entry for “Louisville 8-hour Ozone Maintenance Plan” to read as follows: § 52.920 Identification of plan.
(e)* * * EPA-Approved Kentucky Non-regulatory Provisions Name of non-regulatory SIP provision Applicable geographic or nonattainment area State submittal date/effective date EPA approval date Explanation * * * * * * * Louisville 8-hour Ozone Maintenance Plan Bullitt County, Jefferson County, Oldham County 09/26/2006 07/05/07, 72 FR 36601 [FR Doc. E7-16804 Filed 8-23-07; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R03-OAR-2007-0175; FRL-8459-3] Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Redesignation of the Reading 8-Hour Ozone Nonattainment Area to Attainment and Approval of the Area's Maintenance Plan and 2002 Base-Year Inventory AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is approving a redesignation request and State Implementation Plan
(SIP)revisions submitted by the Commonwealth of Pennsylvania. The Pennsylvania Department of Environmental Protection (PADEP) is requesting that the Reading, Berks County, Pennsylvania ozone nonattainment area (Reading Area) be redesignated as attainment for the 8-hour ozone national ambient air quality standard (NAAQS). In conjunction with its redesignation request, the PADEP submitted SIP revisions consisting of a maintenance plan for the Reading Area that provides for continued attainment of the 8-hour ozone NAAQS for at least 10 years after redesignation. EPA is approving the 8-hour maintenance plan. PADEP also submitted a 2002 base-year inventory for the Reading Area which EPA is approving. In addition, EPA is approving the adequacy determination for the motor vehicle emission budgets (MVEBs) that are identified in the Reading Area maintenance plan for purposes of transportation conformity, and is approving those MVEBs. EPA is approving the redesignation request, and the maintenance plan, and the 2002 base-year emissions inventory as revisions to the Pennsylvania SIP in accordance with the requirements of the Clean Air Act. DATES: *Effective Date:* This final rule is effective on September 10, 2007. ADDRESSES: EPA has established a docket for this action under Docket ID Number EPA-R03-OAR-2007-0175. All documents in the docket are listed in the *www.regulations.gov* website. Although listed in the electronic docket, 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 for public inspection during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal are available at the Pennsylvania Department of Environmental Protection, Bureau of Air Quality Control, P.O. Box 8468, 400 Market Street, Harrisburg, Pennsylvania 17105. FOR FURTHER INFORMATION CONTACT: Christopher Cripps,
(215)814-2179, or by e-mail at *cripps.christopher@epa.gov.* SUPPLEMENTARY INFORMATION: I. Background On May 30, 2007 (72 FR 29901), EPA published a notice of proposed rulemaking
(NPR)for the Commonwealth of Pennsylvania. The NPR proposed approval of Pennsylvania's redesignation request, a SIP revision that establishes a maintenance plan for the Reading Area that provides for continued attainment of the 8-hour ozone NAAQS for at least 10 years after redesignation, and a 2002 base-year emissions inventory. The formal SIP revisions were submitted by PADEP on January 25, 2007. Other specific requirements of Pennsylvania's redesignation request and SIP revision for the maintenance plan, and the rationale for EPA's proposed actions are explained in the NPR and will not be restated here. 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 Act 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, 2007 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 nonattainment New Source Review
(NSR)requirements based on an area's 1-hour nonattainment classification;
(2)Section 185 penalty fees for 1-hour severe or extreme nonattainment areas; and
(3)measures to be implemented pursuant to section 172(c)(9) or 182(c)(9) of the Act, on the contingency of an area not making reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain that NAAQS. In addition the June 8, 2007 decision clarified that the Court's reference to conformity requirements for anti-backsliding purposes was limited to requiring the continued use of 1-hour motor vehicle emissions budgets until 8-hour budgets were available for 8-hour conformity determinations, which is already required under EPA's conformity regulations. The Court thus clarified that 1-hour conformity determinations are not required for anti-backsliding purposes. For the reasons set forth in the May 30, 2007 (72 FR 29901) proposed rulemaking, 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 the 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, 2007 decision clarified that for those areas with 1-hour motor vehicle emissions budgets in their 1-hour 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 continue to comply with the applicable requirements of EPA's conformity regulations at 40 CFR Part 93. As discussed elsewhere in this document, EPA is approving 8-hour MVEBs for the Reading Area. Approval of the 8-hour MVEBs means that the 1-hour budgets no longer apply under anti-backsliding. The court clarified that 1-hour conformity determinations are not required for anti-backsliding purposes. II. Comments and EPA's Responses EPA received one comment. The comment did not object to the proposed approvals of the redesignation request, maintenance plan or the 2002 base year inventory. The comment merely pointed out that EPA's notice had incorrectly identified the metropolitan planning organization
(MPO)with jurisdiction over the Reading Area. EPA acknowledges that, as the commenter notes, we mistakenly identified the MPO as the “Northern Tier RPO” in the notice. The MPO, however, is identified correctly in the maintenance plan for the Reading Area (Berks County). The reference to the “Northern Tier RPO” on page 29911 of the May 30, 2007 notice therefore should have been to Reading Metropolitan Planning Organization (“Berks County MPO”). III. Effective Date EPA finds that there is good cause for this redesignation to attainment, and SIP revisions to become effective fifteen days after publication because a more delayed effective date is unnecessary due to the nature of a redesignation to attainment which relieves the area from certain Clean Air Act requirements that would otherwise apply to it. The effective date for this redesignation 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.” IV. Final Actions EPA is approving the Commonwealth of Pennsylvania's redesignation request, maintenance plan, and the 2002 base-year emissions inventory because the requirements for approval have been satisfied. EPA has evaluated Pennsylvania's redesignation request that was submitted on January 25, 2007, and determined that it meets the redesignation criteria set forth in section 107(d)(3)(E) of the Clean Air Act. EPA believes that the redesignation request and monitoring data demonstrate that the Reading Area has attained the 8-hour ozone standard. The final approval of this redesignation request will change the designation of the Reading Area from nonattainment to attainment for the 8-hour ozone standard. EPA is approving the maintenance plan for the Reading Area submitted on January 25, 2007 as a revision to the Pennsylvania SIP. EPA is also approving the MVEBs submitted by PADEP in conjunction with its redesignation request. In addition, EPA is approving the 2002 base-year emissions inventory submitted by PADEP on January 25, 2007, as a revision to the Pennsylvania SIP. In this final rulemaking, EPA is notifying the public that we have found that the MVEBs for nitrogen oxides (NO <sup>X</sup> ) and volatile organic compound
(VOC)emissions in the Reading Area for the 8-hour ozone maintenance plan are adequate and approved for conformity purposes. As a result of our finding, the Reading Area must use the MVEBs from the submitted 8-hour ozone maintenance plan for future conformity determinations. The adequate and approved MVEBs are provided in the following table: Adequate and Approved Motor Vehicle Emissions Budgets in Tons per Day
(TPD)Budget year NO <sup>X</sup> VOC 2009 22.3 14.3 2018 9.0 7.8 V. Statutory and Executive Order Reviews A. General Requirements 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. 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.* ). 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). Because this action affects the status of a geographical area or allows the state to avoid adopting or implementing other requirements and because this action does not impose any new requirements on sources, 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 requirement, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. 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 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 and does not impose any new requirements on sources. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This 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.* ). B. Submission to Congress and the Comptroller General 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** . This rule is not a “major rule” as defined by 5 U.S.C. 804(2). C. Petitions for Judicial Review 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 23, 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, approving the redesignation of the Reading Area to attainment for the 8-hour ozone NAAQS, the associated maintenance plan, the 2002 base-year emissions inventory, and the MVEBs identified in the maintenance plan, may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).) List of Subjects 40 CFR Part 52 Environmental protection, Air pollution control, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements,Volatile organic compounds. 40 CFR Part 81 Air pollution control, National parks, Wilderness areas. Dated: August 9, 2007. William T. Wisniewski, Acting Regional Administrator, Region III. 40 CFR part 52 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 NN—Pennsylvania 2. In § 52.2020, the table in paragraph (e)(1) is amended by adding an entry for the 8-hour Ozone Maintenance Plan and the 2002 Base Year Emissions Inventory for the Reading, Pennsylvania Area at the end of the table to read as follows: § 52.2020 Identification of plan.
(e)* * *
(1)* * * Name of non-regulatory SIP revision Applicable geographic area State submittal date EPA approval date Additional explanation * * * * * * * 8-Hour Ozone Maintenance Plan and 2002 Base Year Emissions Inventory Reading Area (Berks County) 1/25/2007 8/24/2007 [Insert page number where the document begins] PART 81—[AMENDED] 3. The authority citation for part 81 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* 4. In § 81.339, the table entitled “Pennsylvania—Ozone (8-Hour Standard)” is amended by revising the entry for the Reading, PA Area to read as follows: § 81.339 Pennsylvania. Pennsylvania—Ozone (8-Hour Standard) Designated area Designation a Date 1 Type Category/classification Date 1 Type * * * * * * * Reading, PA: Berks County 9/10/2007 Attainment * * * * * * * a Includes Indian County located in each county or area, except otherwise noted. 1 This date is June 15, 2004, unless otherwise noted. [FR Doc. E7-16683 Filed 8-23-07; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 482 [CMS-3014-IFC] RIN 0938-AJ29 Medicare and Medicaid Programs; Hospital Conditions of Participation: Laboratory Services AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Interim final rule with comment period. SUMMARY: This interim final rule with comment period requires hospitals that transfuse blood and blood components to: Prepare and follow written procedures for appropriate action when it is determined that blood and blood components the hospitals received and transfused are at increased risk for transmitting hepatitis C virus (HCV); quarantine prior collections from a donor who is at increased risk for transmitting HCV infection; notify transfusion recipients, as appropriate, of the need for HCV testing and counseling; and extend the records retention period for transfusion-related data to 10 years. These changes are based on recommendations by the Secretary's Advisory Committee on Blood Safety and Availability and are being published in conjunction with the Food and Drug Administration's
(FDA)Final Rule, “Current Good Manufacturing Practice for Blood and Blood Components; Notification of Consignees and Transfusion Recipients Receiving Blood and Blood Components at Increased Risk of Transmitting HCV Infection” (“lookback”) found elsewhere in this issue of the **Federal Register** . The intent is to aid in the prevention of HCV infection and to create opportunities for disease prevention that, in most cases, can occur many years after recipient exposure to a donor. DATES: *Effective Date:* These regulations are effective on February 20, 2008. *Comment date:* To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on October 23, 2007. ADDRESSES: In commenting, please refer to file code CMS-3014-IFC. Because of staff and resource limitations, we cannot accept comments by facsimile
(FAX)transmission. You may submit comments in one of three ways (no duplicates, please): 1. *Electronically.* You may submit electronic comments on specific issues in this regulation to *http://www.cms.hhs.gov/eRulemaking.* Click on the link “Submit electronic comments on CMS regulations with an open comment period.” (Attachments should be in Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft Word.) 2. *By regular mail.* You may mail written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3014-IFC, P.O. Box 8014, Baltimore, MD 21244-8014. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. *By express or overnight mail.* You may send written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3014-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. *By hand or courier.* If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to one of the following addresses. If you intend to deliver your comments to the Baltimore address, please call telephone number
(410)786-9994 in advance to schedule your arrival with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 21244-1850. (Because access to the interior of the HHH Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period. *Submission of comments on paperwork requirements.* You may submit comments on this document's paperwork requirements by mailing your comments to the addresses provided at the end of the “Collection of Information Requirements” section in this document. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Mary Collins,
(410)786-3189. Jeannie Miller,
(410)786-3164. SUPPLEMENTARY INFORMATION: *Submitting Comments:* We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by referencing the file code CMS-3014-IFC and the specific “issue identifier” that precedes the section on which you choose to comment. *Inspection of Public Comments:* All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: *http://www.cms.hhs.gov/eRulemaking.* Click on the link “Electronic Comments on CMS Regulations” on that Web site to view public comments. Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951. This **Federal Register** document is also available from the **Federal Register** online database through *GPO Access* , a service of the U.S. Government Printing Office. The Web site address is: *http://www.access.gpo.gov/fr/index.html.* I. Background In accordance with section 1861(e) of the Social Security Act (the Act), hospitals must meet certain conditions in order to participate in the Medicare program. These conditions are intended to protect patient health and safety and ensure that high-quality care is provided. Hospitals receiving payment under Medicaid must meet the Medicare conditions of participation. Regulations containing the Medicare conditions of participation for hospitals are located in the Code of Federal Regulations
(CFR)at 42 CFR part 482. The condition of participation for hospital laboratory services at § 482.27(c) currently specifies the steps hospitals must take when they become aware they have administered potentially human immunodeficiency virus
(HIV)infectious blood or blood components to a patient. The more detailed requirements for laboratories appear in 42 CFR part 493, which sets forth requirements for all laboratories participating in the Medicare, Medicaid, and Clinical Laboratory Improvement Amendments
(CLIA)programs. The Centers for Medicare & Medicaid Services
(CMS)and Federal agencies that comprise the Public Health Services, including the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), and the National Institutes of Health (NIH), are responsible for ensuring the safety of blood and blood components. In the November 16, 2000 proposed rule (65 FR 69416), we used the term “blood banks” to refer to establishments that supply blood. However, for consistency, we will use the FDA's term of “a blood collecting establishment”
(BCE)since blood suppliers include hospital blood banks and blood donor centers. BCEs are subject to the FDA regulations for current good manufacturing practice and additional standards for the manufacture of blood and blood components under 21 CFR parts 211, 600, 601, 606, 610, and 640. Laboratories that provide transfusion services are subject to CLIA requirements for quality control and health and safety standards (42 CFR part 493, subpart K). Laboratories in hospitals are also subject to the hospital conditions of participation for adequacy of laboratory services (42 CFR 482.27). We coordinate inspections of hospital-based BCEs with the FDA to minimize duplication of effort and reduce the burden on affected facilities. Hepatitis C virus
(HCV)was first discovered and established as a causative agent of transfusion-associated hepatitis in the late 1980s. In October 1989, FDA's Blood Products Advisory Committee
(BPAC)first discussed steps to identify and quarantine potentially HCV infectious blood and blood components remaining in storage and notify recipients that they may possibly have received infectious blood or blood products. (These steps are known as a lookback.) BPAC advised that there was insufficient information available concerning HCV infection to propose either product quarantine or notification of recipients transfused with blood and blood components prepared from prior collections from donors later determined to be at increased risk for transmitting HCV. In 1996, the Tenth Report of the U.S. House of Representatives Committee on Government Reform and Oversight (H. Rpt. No. 104-746) focused attention on the significant public health problem that HCV infections pose for the nation. HCV infection is the most common chronic blood-borne infection in the United States. The CDC estimates that during the 1980s, as many as 230,000 new HCV infections occurred each year. Since 1989, the annual number of new infections has declined by 80 percent. The decline is in part attributed to the blood collection establishments' implementation of a donor screening test (HCV enzyme linked immunosorbent assay
(EIA)screening test) that was licensed in May 1990. In 1996, however, data from the Third National Health and Nutritional Examination Survey conducted from 1988 to 1994 indicated that approximately 3 million individuals in the United States were believed to have been chronically infected with HCV and that chronically infected persons might not be aware of their infection. Despite progression of the disease, HCV infection is often asymptomatic for about 20 years, but in many cases eventually causes serious liver injury that is thought to be a leading cause of end stage liver disease among adults in the United States. HCV is also thought to play a significant role in the development of liver cancer. Between 8,000 and 12,000 deaths annually result from HCV-related chronic liver disease. HCV can be transmitted in a number of ways, including sharing of drug use equipment among injection drug users, blood transfusion and solid organ transplants from infectious donors, exposure to infectious blood or body fluids in healthcare settings (for example, hemodialysis or occupational exposure to blood), perinatal exposure of infants to infected mothers, and possibly by unprotected sex. In response to scientific data that show that HCV is transmissible through blood and blood components, FDA has implemented an extensive system of donor screening and testing procedures performed before, during, and after a donation takes place to help prevent the transfusion of blood and blood components that are infected with HCV. Blood collecting establishments are currently testing each donation of blood and blood components for evidence of HCV infection. Current testing for HCV includes antibody screening, as well as direct viral detection through the current use of nucleic acid tests (NAT). FDA restricts the use of donations that test reactive for evidence of HCV infection for transfusion or further manufacture. (The term “repeatedly reactive” has been used to indicate that the initial HCV antibody screening test is reactive (in which case it is retested in duplicate), and that one or both of the duplicate tests are reactive.) FDA now refers to screening tests as “reactive,” instead of “repeatedly reactive” to accommodate the different testing algorithms established for NAT and other screening tests. In cases where the screening algorithm requires initial and repeat testing as part of a single screening procedure, FDA would interpret the term “reactive” to mean “repeatedly reactive.” As a result of blood donor screening and testing procedures, the risk of transmitting HCV infections through blood transfusion is very low. Despite the best practices of blood establishments, however, a person may donate blood early in the infection process when the testable marker to HCV is not detectable by the test but HCV is nevertheless present in the donor's blood (called a “window” period). If the donor later tests reactive for evidence of HCV infection, or when the blood collecting establishment is made aware of other reliable test results or information indicating evidence of HCV infection, previously collected blood and blood components would be at increased risk for transmitting HCV. We believe that approximately 7 percent of the estimated 3.9 million Americans ever infected with HCV were infected as a result of transfusion of blood components before the availability of donor screening tests or due to past use of non-viral-inactivated plasma derivative products. As a result of advances in identifying the presence of HCV, most notably through screening tests based on nucleic acid amplification technology, the window period and risk of HCV transmission from blood continues to shrink. The preamble to FDA's proposed rule entitled “Current Good Manufacturing Practice for Blood and Blood Components: Notification of Consignees and Transfusion Recipients Receiving Blood and Blood Components at Increased Risk of Transmitting HCV Infection (lookback),” published on November 16, 2000 (65 FR 69378), and FDA's final rule published elsewhere in this issue of the **Federal Register** provide more information on the length of the window period and discuss various diagnostic modalities for HCV infection. The incidence of transfusion-transmitted HCV infection has decreased markedly since the implementation of donor screening and testing for HCV, and viral inactivation of derivatives. Blood establishments implemented donor screening tests after a single antigen, enzyme linked immunosorbent assay
(EIA)for antibody to HCV (HCV EIA 1.0 screening test) was licensed in May 1990. The FDA issued a memorandum to all registered blood establishments in November 1990, “Testing for the Antibody to Hepatitis C Virus Encoded Antigen (Anti-HCV),” recommending use of approved donor screening tests for antibody to HCV. A lookback program was not recommended at that time because:
(1)Screening tests available at the time could not distinguish between on-going infection and recovery, thus making unclear the meaning of a reactive test for any one individual;
(2)donor screening for the antibody to HCV did not include confirmatory testing, and most notification would have been based on false positive donor test results;
(3)there was limited knowledge of routes of transmission for HCV other than parenteral; and
(4)no potential long-term benefits of therapy were known. A significantly more sensitive multiantigen screening test (HCV EIA 2.0 screening test) was licensed in March 1992. In June 1993, FDA licensed an HCV 2.0 strip immunoblot assay (HCV RIBA 2.0), also known as recombinant immunoblot assay (RIBA), a supplemental test for antibody to HCV. Supplemental tests for HCV antibodies are used to counsel and resolve the donor's status. Following the December 1993 BPAC meeting, BPAC recommended product quarantine of prior collections from a donor who later tests repeatedly reactive for the antibody to HCV and tests positive or indeterminate on a supplemental test; however, BPAC only marginally endorsed consignee notification for the purpose of transfusion recipient notification because the public health benefit of the notification was not clear. The Public Health Service Advisory Committee on Blood Safety and Availability (PHS Advisory Committee) discussed improvements in the treatment and management of HCV infection and improvements in testing for the antibody to HCV at public meetings held on April 24, 1997 and on August 11 and 12, 1997. The PHS Advisory Committee also discussed the public health benefits of notifying transfusion recipients receiving prior collections from a donor who subsequently tests repeatedly reactive for evidence of HCV infection. Following the Department of Health and Human Services' acceptance of recommendations from the PHS Advisory Committee, the FDA developed guidance, published in March 1998, regarding procedures for testing blood for HCV, quarantining blood and blood components, and notifying patients who may have received HCV-infected blood and blood components. In response to comments received, the March 1998 guidance was withdrawn and FDA issued a revised guidance dated September 1998, which it announced in the **Federal Register** on October 21, 1998 (63 FR 56198), entitled “Guidance for Industry: Current Good Manufacturing Practice for Blood and Blood Components:
(1)Quarantine and Disposition of Units From Prior Collections From Donors With Repeatedly Reactive Screening Test for Antibody to Hepatitis C Virus (Anti-HCV);
(2)Supplemental Testing, and the Notification of Consignees and Blood Recipients of Donor Test Results for Anti-HCV” (the September 1998 guidance). The September 1998 guidance provided recommendations to enable quarantine and disposition of blood and blood components from prior collections from donors with repeatedly reactive screening test results. At public meetings on November 24, 1998 and January 28, 1999, the PHS Advisory Committee reconsidered the issue of recipient notification related to repeatedly reactive results on the single antigen screening test. The PHS Advisory Committee recommended that targeted lookback should be initiated based on a repeatedly reactive HCV EIA 1.0 screening test result on a repeat donor unless a supplemental test was performed and the result did not indicate increased risk of HCV infection or, in the absence of a supplemental test result, unless the signal to cut off value of the repeatedly reactive HCV EIA 1.0 screening test was less than 2.5 or follow-up testing of the donor was negative. The FDA published a notice in the **Federal Register** on June 22, 1999 (64 FR 33309) announcing the availability of a revised draft guidance titled “Draft Guidance for Industry: Current Good Manufacturing Practice for Blood and Blood Components:
(1)Quarantine and Disposition of Prior Collections from Donors with Repeatedly Reactive Screening Tests for Hepatitis C Virus (HCV);
(2)Supplemental Testing, and the Notification of Consignees and Transfusion Recipients of Donor Test Results for Antibody to HCV (Anti-HCV).” Consistent with the recommendations of the PHS Advisory Committee, this revised draft guidance addressed lookback actions related to donor screening by HCV EIA 1.0 and also recommended that the search of historical testing records of prior donations from donors with repeatedly reactive EIA 1.0, EIA 2.0, or EIA 3.0 screening tests for HCV should extend back indefinitely to the extent that electronic or other retrievable records exist. In October 2004 FDA issued a final guidance, “Guidance for Industry: Use of Nucleic Acid Tests on Pooled and Individual Samples from Donors of Whole Blood and Blood Components (Including Source Plasma and Source Leukocytes) to Adequately and Appropriately Reduce the Risk of Transmission of Human Immunodeficiency Virus Type 1 and Hepatitis C Virus” which was announced in the **Federal Register** on October 28, 2004 (69 FR 62902). The guidance informed blood collecting establishments that FDA had licensed NAT as tests to screen blood donors for HIV-1 RNA and HCV RNA, that the licensed tests could detect evidence of infection at a significantly earlier stage than was possible under previously approved tests using antibody or antigen detection technology, and that the FDA believed that these newly licensed tests were widely available and met the criteria in 21 CFR 610.40(b) for screening tests that are necessary to reduce adequately and appropriately the risk of transmission of communicable disease through blood products. II. Provisions of the Proposed Rule In order to have consistent industry standards for potentially infectious blood and blood components, on November 16, 2000 (65 FR 69416), we proposed to adopt as our requirements for hospitals the procedures for HCV proposed by the FDA in that same **Federal Register** (65 FR 69378). Since our proposed rule was published in conjunction with the FDA's proposed rule, we have considered comments we received in conjunction with the FDA. We specifically requested in the proposed rule comments on the reasonableness of our adopting the FDA requirements. The FDA proposed rule for HCV lookback would require blood establishments (in this IFC we changed the reference of “blood establishments” to “blood collecting establishments” (BCE)) to search historical testing records of prior donations from donors with repeatedly reactive EIA 1.0, EIA 2.0, or EIA 3.0 screening tests for HCV, extending back indefinitely for computerized electronic records, and to January 1, 1988 for other retrievable records. Under the FDA rule, a BCE would be required to notify a hospital if it supplied such hospital with potentially HCV infectious blood. We proposed to amend the hospital conditions of participation to require a hospital to develop agreements with outside BCEs under which the BCE would notify the hospital if it supplied the hospital with potentially HCV infectious blood and blood components. We proposed to establish a lookback, similar to that now in effect for HIV, requiring hospitals, when notified by BCEs, to quarantine prior collections from a donor who later tested repeatedly reactive for evidence of HCV infection, and to notify transfusion recipients of the prior collections, based on further testing of the donor, as appropriate. We proposed to remove current paragraph
(a)in the existing § 482.27 and re-designate paragraphs
(b)and
(c)as
(a)and (b), respectively. In addition, we proposed adding a definition of “potentially HCV infected blood and blood components” as previous collections from a donor—(1) Who tested repeatedly reactive for evidence of HCV infection on a single antigen screening test with a signal to cut off value equal to or greater than 2.5 for at least two of the three EIA tests, or when the signal to cut off value for such donor could not be calculated, with no record of further testing;
(2)who tested repeatedly reactive for evidence of HCV infection and positive on a multiantigen supplemental test licensed at an earlier or later date by FDA;
(3)who tested repeatedly reactive for evidence of HCV infection and indeterminate on a supplemental test for HCV, unless an indeterminate RIBA 3.0 supplemental test result was obtained or a negative EIA 3.0 or negative RIBA 3.0 test result was subsequently obtained;
(4)who tested repeatedly reactive for evidence of HCV infection on a multiantigen screening test with no record of further testing; or
(5)who tested repeatedly reactive for evidence of HCV infection on a single antigen screening test and repeatedly reactive on a subsequent multiantigen screening test, unless a negative supplemental test result or an indeterminate RIBA 3.0 supplemental test result was obtained. (See proposed § 482.27(b)(2).) Our regulations currently require a hospital that regularly uses the services of an outside BCE to have an agreement with the BCE that requires the establishment to notify the hospital if the establishment has supplied the hospital with potentially HIV infected blood. We proposed to amend that provision to also require notification in the case of potentially HCV infected blood. (See proposed § 482.27(b)(3).) In addition, we proposed to revise our regulations to include HCV-relevant testing required by FDA. (See proposed § 482.27(b)(3)(ii).) We also proposed conforming changes to the HIV requirement at § 482.27(b)(3)(i) by removing the word “promptly” and instead require that a blood bank notify a hospital of potentially infected blood within 3 calendar days after testing. Also, hospitals would have been required to make at least three attempts to notify the patient, or to notify the attending physician who ordered the blood or blood components. We proposed additional conforming changes that would have required a hospital's agreement with a BCE to require the BCE to notify the hospital within 3 calendar days of testing if blood tested repeatedly reactive for HCV antibodies. This change provides further clarity of the notification requirement. The FDA proposed a change to the maximum time permitted for a BCE to notify hospitals of the results of the further testing, from 30 to 45 days, in order to create consistency between the HIV and HCV lookback provisions. Although FDA has stated that further testing for HIV and HCV could be completed within 30 days, additional time was needed to notify hospitals following completion of the further testing. We proposed the appropriate changes to § 482.27(b)(3)(ii) to include the change from 30 to 45 days in the agreement a hospital had with a BCE. In § 482.27(c)(3)(i) and
(ii)regarding follow-up testing, we proposed deleting the words in § 482.27(b)(1)(ii) to reflect that the additional follow-up testing was an FDA requirement and not a recommendation. As a new provision, we proposed that hospitals be required to include in agreements with BCEs a provision requiring the BCE to notify the hospital of lookback results under FDA's proposed 21 CFR 610.48(h)(3)(i) and (h)(3)(ii), and (i)(3)(i) and (i)(3)(ii). FDA proposed that hospitals perform a lookback of blood or blood components collected from a donor extending back indefinitely for computerized electronic records and to January 1, 1988 for other retrievable records, or to the date 12 months before the donor's most recent negative multiantigen screening test for the antibody to HCV, whichever is the later date. We also proposed to revise our regulations to apply the provisions regarding the quarantine of potentially HIV infectious blood and blood components currently set forth at § 482.27(c)(3) to potentially HCV infected blood and blood components. (See proposed § 482.27(b)(4).) In addition, we proposed requiring hospitals to destroy or re-label previous collections of blood or blood components held in quarantine if the results of the testing were indeterminate. We proposed that hospitals re-label previous collections of blood or blood components held in quarantine if the results of the testing were indeterminate, in accordance with the FDA regulations at 21 CFR 606.121 and the HCV Lookback Guidance Documents. We proposed a change to § 482.27(b)(4) by adding a parenthetical phrase “(either internal or under an agreement).” We proposed this change to clarify that a blood collecting establishment has a responsibility to notify the hospital of HIV or HCV screening results even when located at a hospital site. Hospitals are currently required to maintain clinical records on all patients for 5 years. We proposed adding a new provision requiring hospitals to maintain adequate records of the source and disposition of all units of blood and blood components for at least 10 years after the date of disposition. The FDA also proposed to increase record retention requirements for blood establishments from 5 years to 10 years. Hospitals would be required to increase the record retention period yearly until 10 years of records from the date of disposition had accrued. (For example, the first year after the effective date of this regulation, hospitals would have had 6 years of records, the second year after the effective date, 7 years, and so on until 10 years had been reached.) Hospitals would then have been able and expected to maintain 10 years of patient records. (See proposed § 482.27(b)(5).) We believed this would be necessary to increase opportunities for disease prevention or treatment years after a recipient had been exposed to a donor later determined to be at risk of transmitting the disease through transfusion. We proposed, as is currently required at § 482.24(b)(2), that hospitals maintain the clinical records in such a manner that would permit prompt retrieval. We also had proposed that hospitals ensure that medical records would be transferred to another hospital or other entity if the former hospital ceased operation for any reason. (See proposed § 482.27(b)(5)(iii).) The FDA had proposed changes in its requirement for patient notification to allow transfusion services to make three attempts to either notify patients directly or notify the attending physician or the physician who ordered the blood. We proposed that hospitals follow the same notification procedures with regard to potentially HIV and HCV infectious blood and blood components. For consistency, we also proposed that the HIV lookback requirements be changed to conform to the requirements for HCV lookback. We had proposed adding a new paragraph
(c)requiring hospitals to comply with FDA regulations pertaining to the appropriate testing and quarantining of infectious blood and blood components and to the notification and counseling of recipients who may receive any infectious blood and blood components that are identified after the publication of this rule. Note that our Medicaid regulations at § 441.17 (“Laboratory services”) provide that the State plan must pay for laboratory services furnished by a hospital-based laboratory meeting the requirements for Medicare participation set forth in § 482.27. Therefore, the provisions of this interim final rule with comment period will also affect the Medicaid program. That is, in order for the laboratory services furnished by a hospital-based laboratory under Medicaid to be covered under the State plan, the hospital will have to meet the new requirements set forth in this rule. III. Analysis of and Responses to Public Comments While we are not issuing a new proposed rule as would otherwise be required under section 1871(a)(3)(B) of the Act, we are considering comments we received on the proposed rule published on November 16, 2000 in this interim final rule with comment period. See section VI below for a more detailed discussion of our decision to publish this matter as an interim final rule with comment period. Six types of organizations, including blood banks, blood centers, the blood industry trade association, and hospitals, submitted comments raising several issues with the proposed rule. The main concerns were with the proposed requirement to make three attempts to notify affected transfusion recipients and the requirement to notify the deceased's relative of possible HCV infection. Both CMS and the FDA received comments related to the complex and prescriptive language in their respective proposed rules. As we stated in section II of this rule, we also reviewed the comments and responses that the FDA received, and we have coordinated our responses with the FDA. *Comment:* One commenter disagreed with adding specific language about the test method in the interim final rule with comment period, stating that the methodology could be obsolete in a few years. *Response:* We agree with the commenter that including specific testing methods in this interim final rule with comment period is too restrictive. We have changed the regulation at § 482.27(b)(2) to reference 21 CFR 610.47, which describes blood and blood components subject to HCV lookback. *Comment:* Several commenters disagreed with our proposal to require a hospital to notify a patient's legal guardian or relative of possible HCV exposure after a patient had already died (of any cause). They noted that there are no clear indications of risk to household contacts of patients with HCV. They request that § 482.27(b)(10) be deleted. *Response:* We agree with respect to HCV. As previously discussed in both the FDA and CMS's rules, direct percutaneous exposure to infected blood, particularly in the setting of drug abuse, accounts for the majority of HCV infections acquired in the United States. Secondary transmission of HCV to sexual partners, care providers, or others with close contact is very unlikely. The proposed rule implies that notification efforts should be continued for HCV transmissions if the recipient is deceased. We will clarify that if the patient is deceased, the requirement to notify the legal guardian or relative of possible exposure applies only to HIV infection and not HCV infection. We have changed § 482.27(b)(10) to reflect the clarification. *Comment:* One commenter stated that since the FDA requires that all blood donors and donated transfusions are screened, the risks of transmission through blood transfusions are currently very low. The commenter stated that there does not appear to be a need to increase the regulatory burden on hospitals because the problem of HCV transmission in hospitals by blood transfusion and tissue transplant has been effectively solved. The commenter stated that the proposed regulation should be withdrawn. *Response:* We understand that due to advanced screening techniques and the fact that hospitals are currently following the FDA's industry guidelines on HCV testing and quarantining of blood and blood components that test reactive for evidence of HCV infection, the risk of transmitting HCV through blood transfusions or administration has been greatly reduced. In addition to reducing the risk of current and future HCV transmission, this rule will ensure that hospitals appropriately notify those Americans who may have been infected with HCV as a result of transfusion of blood components before the broad availability of donor screening tests in 1990. It is important that these individuals are notified of the need for HCV testing and counseling. HCV infection is usually asymptomatic for about 20 years, but may cause serious liver injury that is thought to be a leading cause of end stage liver disease among adults in the United States. HCV is also thought to play a role in the development of liver cancer. Between 8,000 and 12,000 deaths annually result from HCV-related chronic liver disease. This interim final rule with comment period also increases the medical record retention period from 5 to 10 years. The FDA has recommended that the records retention period be increased because advances in medical diagnosis and therapy have created opportunities for disease prevention or treatment many years after recipient exposure to a donor later determined to be at increased risk of transfusion transmitted disease. *Comment:* One commenter stated that the burden of 16 hours for a hospital to develop the required procedures and establish the contract with the BCE is underestimated. They also stated that the estimated cost of $52,653,004 for recipient notification is very low. *Response:* As stated in the proposed rule, we currently require hospitals that receive blood from an outside BCE to have an agreement with the BCE that governs the procurement, transfer, and availability of blood and blood components for HIV. We do not envision that hospitals need a separate or different agreement for HCV. Hospitals will only need to modify their current agreement to include potentially HCV infected blood and blood components. Also, hospitals currently have procedures in place to conduct HIV lookback activities. We think that 16 hours, as stated in the proposed rule, will provide adequate time to incorporate similar procedures for conducting HCV lookback activities. We agree with the commenter regarding the cost for recipient notification. Based on the recent Bureau of Labor Statistics estimates, we have increased the cost for recipient notification. We have increased the hourly wage for a staff medical technologist performing the review from $25.67 to $33.84. Each hospital will incur a one-time cost of $541.44, or about $2.7 million for the entire industry to develop HCV lookback procedures. Thus, the total one-time cost to hospitals for conducting the historical (retrospective) lookback efforts is estimated to be $41.6 million ($2.7 million to develop procedures and $38.9 million for recipient notification). The calculations are based on the latest data available related to hospitals and number of recipients that may need notification. There are approximately 4,980 Medicare- and Medicaid-participating hospitals, excluding 1,041 hospitals that operate blood collection centers, because they are counted among the collection establishments. The CDC estimated in 2000 that 212,000 recipients may need to be notified due to the historical review. *Comment:* One commenter stated that there is no reason for blood records to be kept for 10 years, stating that there is no reason for such records to be kept on a different basis than any other medical records. Having special rules for this narrow class of records will only lead to confusion. Several commenters agreed with requiring hospitals to maintain adequate records of the source and disposition of all units of blood and blood components for at least 10 years from the date of disposition, but recommended that the retention period be phased in. *Response:* We maintain that increasing the record retention period from 5 to 10 years will increase opportunities for disease prevention or treatment years after a recipient has been exposed to a donor that is later determined to be at risk of transmitting a disease through transfusion. In addition, advanced technology has improved the hospital's ability to maintain, store, and retrieve records. The record retention period will be phased in as described above in Section II, “Provisions of the Proposed Regulation.” Hospitals will be required to increase the record retention period yearly until 10 years of records from the date of disposition have accrued. *Comment:* Several commenters agree that the hospital should directly notify the patient, the attending physician, or the physician who ordered the blood and blood component of HCV infection. However, they disagree with requiring, at a minimum, three attempts to notify the patient. They stated that only one notification attempt should be made using a traceable method such as certified mail or return receipt. A returned letter should be proof that notification was attempted and was unsuccessful, and that further attempts would be unsuccessful as well. However, one commenter disagrees with requiring just one notification attempt by certified mail. The commenter stated that there are individuals who will not claim a certified letter. *Response:* We agree that some individuals are reluctant to take possession of a certified letter. We have clarified in the interim final rule with comment period at 482.27(b)(6)(i) and (b)(7) that the hospital must make reasonable attempts to perform the notification within 12 weeks after being notified by the BCE that it has received potentially HIV or HCV infectious blood and blood components. The hospital will be required to notify the recipient, recipient's physician of record, or a legal representative or relative if the recipient is a minor or adjudged incompetent by a State court. *Comment:* Several commenters stated that it is important for both CMS' and FDA's requirements for HCV and HIV lookbacks to be identical in order to ensure that the targeted lookbacks are carried out in a uniform manner throughout the United States. *Response:* We appreciate the comments supporting a unified targeted lookback effort. It is important to have consistent industry standards for maintaining the safety of the nation's blood supply. As previously stated, we have collaborated with the FDA in developing and responding to the comments received on the proposed rule. *Comment:* A commenter stated that the time-frame for non-computerized retrievable records should be from January 1, 1988 instead of January 1, 1998. *Response:* After the effective date of this rule, whenever a hospital or other BCE receives a blood donation that tests infectious for HCV, it must perform a lookback as far back as the period described above (that is, 1988 or to the extent of electronic records), to determine if that donor had previously given blood. If the donor's most recent previous donation (before the current infectious donation) tested non-reactive (that is, uninfected), or tested reactive on a viral detection test (for instance, the nucleic acid test) but non-reactive on the associated antibody screening test on that previous occasion, the hospital and/or BCE must review the record for the 12 months previous to the earlier donation test, to determine if there were any donations during that 12-month period, and to determine if those blood products are still available for use. If so, all such blood products still available for consignment/use 12 months and less before that previous donation must be quarantined retested, and the consignees of the blood products notified. IV. Provisions of the Interim Final Rule With Comment Period For the most part, this interim final rule with comment period incorporates the provisions of the November, 2000 proposed rule. As discussed in section III, “Analysis of and Responses to Public Comments,” we have made minor changes to the proposed rule at § 482.27(b)(2), (6), (7), and (10). We have added § 482.27(b)(11) to establish a cut-off date for retrospective HCV lookback. In § 482.27(b)(2), we removed language that we determined, based on public comment, to be too restrictive. That language was replaced with a reference to FDA's regulations in 21 CFR 610.47. In § 482.27(b)(3)(i) through (iii), we made changes to the regulation citations to conform to the FDA rule. In § 482.27(b)(6) and (7), we changed the proposed requirement that the hospital make three attempts to notify the patient or physician of record that potentially infectious blood was transfused to the patient. Instead, we are requiring the hospital to make reasonable attempts to notify the recipient or the physician of record. We emphasize that a hospital should continue attempting its notification efforts until it is clear that further attempts would not be successful. In § 482.27(b)(10), we have revised the language to clarify that if a patient is deceased, the requirement to notify a legal guardian or relative of possible exposure applies only to HIV infection and not to HCV infection. We have made changes to the interim final rule with comment period in § 482.27(b)(11) to conform with the FDA's rule at § 610.48 whereby a cut-off date has been established for the retrospective lookback. As such, we have established a cut-off date in this rule for the retrospective (historical) HCV lookback. The requirement under § 482.27(b) will remain in effect for 8 years after the date of publication in the **Federal Register** . We clarified the regulation at § 482.27(c) by stating that the lookback activities discussed in this section are related only to new blood safety issues that are identified after the publication of this rule. Hospitals should comply with the FDA regulations pertaining to the appropriate testing and quarantining of infectious blood and blood components, and to the notification and counseling of recipients who may receive any infectious blood and blood components. V. Response to Comments Because of the large number of public comments we normally receive on **Federal Register** documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document. VI. Waiver of Proposed Rulemaking Section 1871(a)(3) of the Act (as added by section 902 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)) provides that, effective December 8, 2003, the Secretary, in consultation with the Director of the Office of Management and Budget (OMB), shall establish and publish a regular timeline for the publication of Medicare final regulations based on the previous publication of a proposed regulation or an interim final regulation. Section 1871(a)(3)(B) of the Act further provides that such timelines may vary among different regulations, but shall not be longer than 3 years except under exceptional circumstances. As noted above, CMS published a proposed rule regarding Hepatitis C Virus and blood collecting establishments on November 16, 2000. On December 30, 2004, we published a notice in the **Federal Register** implementing section 1871(a)(3) of the Act (68 FR 78442). In that notice, we interpreted the effect of that section as generally rendering legally inoperative Medicare proposed rules that were over 3 years old on the MMA's effective date. Therefore, since 3 years had already elapsed since publication of the November, 2000 NPRM on December 8, 2003, we believe that the 2000 NPRM became legally ineffective as of that date. Accordingly, even though we sought and received extensive comments on this interim final rule with comment period in response to the 2000 proposed rule, we are not publishing this rule as a final rule. Under such circumstances, we ordinarily would publish a new proposed rule in the **Federal Register** and invite public comment on the proposed rule. The proposed rule would include a reference to the legal authority under which the rule was proposed, and the terms and substance of the proposed rule or a description of the subjects and issues involved. This procedure can be waived, however, if an agency finds good cause that a notice and comment procedure is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and its reasons in the rule issued. We are waiving publishing a proposed rule, and instead publishing this rule as an interim final rule with comment period. We are specifically going forward because of the importance of keeping this document coordinated with the FDA's lookback rule covering blood establishments, and the present danger to lives and health of individuals that arise from unknown contaminants in the nation's blood supply. Section 1871(a)(3) of the Act does not prohibit us from issuing an interim final rule with comment period based on the expired proposed rule, as long as we issue a final rule no later than 3 years after the interim final rule's publication date (or publish in the **Federal Register** a notice extending the period). The FDA's final rule and CMS's interim final rule on blood safety are very closely related and dependent upon each other. However, the FDA is not restricted by this section of the MMA (which applies only to Medicare rules) and therefore is also issuing its final rule in this issue of the **Federal Register** . We believe that it would not be in the best interest of the public for the FDA to publish a final rule requiring blood establishments to notify hospitals of infectious blood and blood products and CMS not to require hospitals to perform the necessary lookback activities of notifying transfusion recipients of the need for HCV testing and counseling. For the FDA's rule to be effective practically, it is therefore necessary that we issue a companion interim final rule with comment period that covers transfusion services and further supports the notification of recipients of blood and blood components that are at increased risk of infection and transmission of HCV. Therefore, we find good cause to waive the publication of a proposed rule and to issue this interim final rule with comment period. We are providing a 60-day public comment period. VII. Collection of Information Requirements Under the Paperwork Reduction Act of 1995, we are required to provide 30-day notice in the **Federal Register** and solicit public comment when a collection of information requirement is submitted to the Office of Management and Budget
(OMB)for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues: • The need for the information collection and its usefulness in carrying out the proper functions of our agency. • The accuracy of our estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs): Section 482.27 Condition of Participation: Laboratory Services Section 482.27(b)(3) requires a hospital that regularly uses the services of an outside BCE to establish and maintain a written agreement with the BCE that governs the procurement, transfer, and availability of blood and blood components. This section also requires the BCE to notify the hospital within 3 calendar days after the date on which the donor tested reactive for evidence of HCV infection or after the date on which the blood establishment was made aware of other test results indicating evidence of HCV infection, as outlined in (b)(3)(i) through (iii). Section 482.27(b)(5) requires a hospital to maintain, in a manner that permits prompt retrieval, adequate records of the source and disposition of all units of blood and blood components for at least 10 years from the date of disposition. In addition, this section requires a hospital to maintain a fully funded and documented plan that will allow the hospital to transfer these records to another hospital or other entity if such hospital ceases operation for any reason. Section 482.27(b)(6) requires a hospital that has administered potentially HIV or HCV infectious blood or blood components (either directly through its own BCE or under an agreement), or released the blood or blood components to another entity or individual, to make reasonable attempts to notify the patient, or to notify the attending physician or the physician who ordered the blood or blood component and ask the physician to notify the patient, that potentially HIV or HCV infectious blood or blood components were transfused to the patient. Time frame and notification requirements are outlined in § 482.27(b)(6), (b)(7), and (b)(8). Section 482.27(b)(9) requires a hospital to maintain policies and procedures for notification and documentation that conform to Federal, State, and local laws, including requirements for the confidentiality of medical records. Section 482.27(b)(10) requires a physician or hospital, if the patient has been adjudged incompetent by a State court, to notify a legal representative designated in accordance with State law. If the patient is competent, but State law permits a legal representative or relative to receive the information on the patient's behalf, the physician or hospital must notify the patient or his or her legal representative or relative. If the patient is deceased, the physician or hospital must continue the notification process for HIV infection and inform the deceased patient's legal representative or relative. If the patient is a minor, the legal guardian must be notified. While all of the information collection requirements referenced above are subject to the Paperwork Reduction Act, the burden associated with these requirements is captured and discussed in the FDA's final regulation titled “Current Good Manufacturing Practice for Blood and Blood Components: Notification of Consignees and Transfusion Recipients Receiving Blood and Blood Components at Increased Risk of Transmitting HCV Infection” published elsewhere in today's **Federal Register** . Therefore, we are assigning 1 token hour of burden to these requirements. The FDA's rule assigns a one-time burden of 16 hours for hospitals to develop procedures to conduct lookback activities. We also require hospitals that currently receive blood from an outside BCE to have an agreement with the BCE that governs the procurement, transfer, and availability of blood and blood components for HIV. Our rule requires hospitals to modify their current agreements to include HCV. Although the FDA does not require hospitals to have an agreement with a BCE, we believe that the time necessary to perform this task will be minimal and is already captured in the 16 hours allotted in the FDA rule. We received a comment that the burden of 16 hours for a hospital to develop the required procedures and establish the contract with the BCE is underestimated. This interim final rule with comment period will require a hospital to make minor modifications to the current agreement they have with the BCE for HIV. Therefore, we disagree with the comment that the 16 hours is not adequate to develop procedures to conduct lookback activities and modify their agreement with the BCE. We have submitted a copy of this interim final rule with comment period to OMB for its review of the information collection requirements. These requirements are not effective until they have been approved by OMB. A notice will be published in the **Federal Register** when we receive approval. If you comment on any of these information collection and record keeping requirements, please mail copies directly to the following: Centers for Medicare and Medicaid Services, Office of Strategic Operations and Regulatory Affairs, Regulations Development Group, Attn: Melissa Musotto, CMS-3014-IFC, Room C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850; and Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Carolyn Lovett, CMS Desk Officer, CMS-3014-IFC, *carolyn_lovett@omb.eop.gov.* Fax
(202)395-6974. VIII. Regulatory Impact Analysis A. Overall Impact We have examined the impacts of this interim final rule with comment period as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act
(RFA)(September 16, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132. Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis
(RIA)must be prepared for major rules with economically significant effects ($100 million or more annually). Because the projected cost of this rule falls below the threshold for a major rule, we have determined that this rule is not a major rule. The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $31.5 million in any 1 year. For purposes of the RFA, a majority of hospitals are considered small entities due to their non-profit status. The agency has examined the impact on small entities and has determined that this rule will not have a significant economic impact on a substantial number of small entities. Individuals and States are not included in the definition of a small entity. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area (superseded by “core-based statistical areas” (CBSAs)) and has fewer than 100 beds. Because of the lack of information to characterize the number and volume of affected blood and blood components in small rural hospitals, we have prepared an analysis that is consistent with section 604 of the RFA. Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $122 million. We believe that this interim final rule with comment period is not an economically significant rule as described in the Executive Order, or a significant action as defined in the Unfunded Mandates Reform Act. Aggregate impacts of the rule, and aggregate expenditures caused by the rule will not reach $120 million for either the public or the private sector. As discussed in the following paragraphs, because of the lack of information to characterize the number and volumes of affected blood and blood components in hospitals that might qualify as small entities, the impact on small entities is uncertain. It is clear that a number of hospitals that provide blood transfusions will be affected by the implementation of this interim final rule with comment period and that a substantial number of those entities will be required to make changes in their operations. For these reasons, we have prepared the following analysis. This analysis, in combination with the rest of the preamble, is consistent with the analysis set forth by the RFA. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. We have determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we have concluded that the rule does not contain policies that have federalism implications as defined in the Executive Order 13132 and, consequently, a federalism summary impact statement is not required. B. Anticipated Effects 1. Effects on Hospitals This interim final rule with comment period requires hospitals that transfuse blood and blood components to
(1)prepare and follow written procedures for appropriate action when it is determined that blood and blood components the hospitals received and transfused are at increased risk for transmitting HCV;
(2)quarantine prior collections in inventory from a donor who is at increased risk for transmitting HCV infection;
(3)notify transfusion recipients (and, where required, legal representatives or relatives), as appropriate, of the need for HCV testing and counseling; and
(4)extend the records retention period to 10 years. This interim final rule with comment period will affect hospitals that transfuse blood and blood components. There are approximately 4,980 Medicare- and Medicaid-participating hospitals, excluding 1,041 hospitals that operate blood collection centers, because they are counted among the collection establishments. The CDC estimated in 2000 that 212,000 recipients may need to be notified due to the historical review. *Fixed Cost—Standard Operating Procedures and Record Review.* This interim final rule with comment period is expected to generate one-time costs and some additional annual costs for hospitals. One-time costs include the development of procedures and policies for recipient notification and the agreement a hospital should have if it uses the services of an outside BCE. We assume that these tasks will involve a review of current procedures and policies (for example, for HIV lookback) and the adaptation or modification of current procedures and policies to address the provisions of this rule. We estimate, in consultation with the FDA, that the tasks will require an average of 16 hours per facility. In the proposed rule, we estimated, based on the 1997 Bureau of Labor Statistics
(BLS)estimates, that the total hourly compensation for a staff medical technologist is $25.67. We have revised the estimates to increase the hourly compensation to $33.84 to reflect the most recent BLS data. Each hospital will incur a one-time cost of $541.44 ($33.84 × 16 hours = $541.44). The total cost is about $2.7 million ($541.44 × 4980 establishments = $2,696,371.) (See the table in this section.) The proposed rule would have required hospitals to make at least three attempts to notify the transfusion recipient. Several commenters expressed concern that it would be unnecessary to continue notification attempts if the hospital had proof that notification was attempted and was unsuccessful and that further attempts would most likely be unsuccessful. Therefore, we have changed the prescriptive language about the number of attempts. However, hospitals must make a reasonable attempt to contact any affected transfusion recipient within a maximum of 12 weeks from the time they receive from the blood establishment the results of a donor's supplemental positive test for HCV. We did not receive comments on the initial estimate that it would cost $165 to comply with all of the lookback provisions for each affected component. However, based on a recent report the FDA received from Los Angeles County, a vendor was paid $118 per patient to abstract health records, locate and notify transfusion recipients, and to give pretest counseling. Therefore, the FDA has revised the cost for lookback activities. The FDA estimates that the product quarantine accounts for about 40 percent of the unit cost (that is, $66), and the recipient notification accounts for the other 60 percent of the unit cost (that is, $99). [EB2] Without other data from both the prospective and retrospective lookbacks, the FDA continues to use the $66 as the cost of product quarantine, but increased the cost of recipient notification from $99 to $118 based on the experience of Los Angeles County. *Prospective HCV lookback.* The FDA estimates (based on prevalence levels reported by the American Red Cross for 2000) about 2,400 discrete components could trigger recipient notification (780 donations from HCV-infected donors × 3.1 components per donation). The CDC survey found that on average about 85 percent of the at-risk components sent to hospitals were transfused. For the analysis of the proposed rule, FDA assumed that no patient would receive more than one affected component. This assumption suggests that hospitals will quarantine about 2,400 components and attempt about 2,050 recipient notifications (780 HCV positive donors × 3.1 components per donor × 85 percent transfused). Because CMS inspected hospitals account for about 65 percent to 75 percent of the number of transfusions, the annual costs for consignees to conduct the prospective lookback actions range from $260,000 to $300,000 (65 percent by CMS-inspected establishments × 2,400 components annually triggering recipient notification × $66 per component quarantine plus 2050 components annually triggering recipient notification × $118 per recipient notification to 75 percent by CMS-inspected establishments × 2,400 components annually triggering quarantine × $66 per component quarantine plus 2,050 components annually triggering recipient notification × $118 per recipient notification. (See the table in this section. The numbers in the table are rounded). *Retrospective HCV lookback.* For notifications resulting from donors tested before February 20, 2008 under 21 CFR 610.48(c), the hospital must complete the notification effort within 1 year from the time it receives notification from the blood establishment. The recipient notification provided by the hospital must include a basic explanation to the recipient, referral for counseling and further testing, and documentation of the notification or attempts to notify the attending physician or recipient. The estimated one-time cost of recipient notification associated with the review of historical testing records is $41.6 million. This is based on the FDA estimate of blood components of about 212,000 recipients identified for notification produced from donations, and the average cost of $184 ($66 + $118) for staff time per component for recipient notification. Thus, the total one-time cost to hospitals for conducting the historical (retrospective) lookback effort is estimated to be $38.9 million for recipient notification). (See the table in this section.) This interim final rule with comment period requires hospitals to increase the time they keep records from 5 to 10 years. Although we did not include the annual cost of keeping records for a longer period of time in the analysis for the proposed rule, we are including the cost in this interim final rule with comment period. The FDA has estimated in its final rule that it may take 40 hours for a computer programmer to perform routine maintenance of these additional records. At a wage of $34 per hour, including benefits, a hospital would spend an additional $1,360 annually to conform to this provision of the rule. However, according to the AABB (formerly knows as the American Association of Blood Banks), 80 percent of the establishments that transfuse blood are accredited by the AABB and already comply with their standards, including retaining records for 10 years. Taking AABB compliance into account, this analysis includes additional compliance costs for 20 percent of the transfusion facilities at a total annual cost of $1.4 million ($34.00 per hour × 40 hours × 4,980 hospitals × 20 percent). The following table shows the estimated compliance cost of this interim final rule. We believe that hospitals will incur up to $1.7 million in annual compliance costs for the prospective lookback provisions and to retain records for 10 years, and up to $42 million in one-time costs for SOPs and the retrospective lookback based on historical review of records. The annualized costs of this interim final rule over 10 years at 3 and 7 percent interest rates will be $6.5 and $7.6 million. Summary of the Estimated Cost of This Interim Final Rule With Comment Period Type of cost Number affected One-time cost (millions of dollars) Annual cost (millions of dollars) Annualized costs (millions of dollars) 3 percent 7 percent Development of HCV lookback Procedures *4,980 $2.7 $0.3 $0.4 Prospective Review 4,980 0.3 0.3 $0.3 Historical Review (Retrospective lookback) 4,980 $38.9 $4.6 $5.5 Record Retention Retain records for 10 years 4,980 1.4 1.4 $1.4 Total $41.6 $1.7 $6.5 $7.6 * Numbers are rounded. (Excluding 1,041 hospitals that operate blood collection centers, because they are counted among the collection establishments). * The annualized cost is for a 10 year period. 2. Effects on Beneficiaries Timely notification of HCV infection benefits beneficiaries, both directly and indirectly, in several important ways. First, although factors predicting the severity of liver disease due to HCV have not been well defined, recent data indicate that increased alcohol intake is associated with more severe liver disease. According to CDC, even moderate amounts of alcohol in patients with chronic HCV might exacerbate liver disease. Consequently, an HCV-infected patient identified by the lookback program could minimize liver damage associated with alcohol consumption by restricting his or her intake. It is also important to note that identified infected patients will benefit from counseling and treatment with available therapies. Studies of patient characteristics and responsiveness to therapy indicate that when treatment is initiated early in an infection, the best and most cost effective outcomes are achieved. That is, best results are achieved if treatment is initiated earlier in the disease, when patients are younger and have not yet developed cirrhosis. For example, Bennett et al. showed that the years of life gained and cost effectiveness of interferon-alpha 2b treatment decreased as the age of the patient increased from 3.1 years at $500 per year of life
(YLE)for 20-year-old patients to 22 days at $62,000 per YLE for 70-year-old patients. The dollar amounts of $500 and $62,000 represent the cost effectiveness of the treatment when it is given at an earlier age. Finally, infected patients will be informed that they must not donate blood. The lookback program will, therefore, help to ensure the safety and continued availability of the national blood supply. 3. Effects on Medicare and Medicaid Programs This interim final rule with comment period will generate a one-time cost to develop procedures for recipient notification. We estimate this cost to be $2.7 million. Finally, the total one-time cost for the development of HCV lookback procedures and for recipient notification associated with the review of historical testing records is estimated to be $41.6 million ($2.7 + $38.9). These one-time costs would likely be distributed among health programs as follows: Medicare, 33.3 percent; private health insurance, 30.5 percent; Federal Medicaid, 9.8 percent; State Medicaid, 5.8 percent; other private funds, 7.9 percent; other Federal funds, 6.9 percent; and other State and local funds, 5.7 percent. The total Federal distribution would be 50 percent; that is, 33.3 percent for Medicare, 9.8 percent for Medicaid, and 6.9 percent for other Federal sources. The degree to which the Federal programs fund these amounts will vary: Medicaid providers may be able to pass on costs through the States depending on the method of payment the State Medicaid program has adopted, while Medicare payments could be limited because of the hospital outpatient prospective payment system and increase only in accordance with specific rules regarding coverage of HCV testing for patients who have been exposed to HCV-infected blood, including those identified through the FDA lookback process. It is important to note that, although this interim final rule with comment period presents the costs that would be imposed on all payers of hospital services, including the Medicare and Medicaid programs, it merely conforms to the FDA's final rule and has no additional economic impact. We have simply restated the analysis performed in the FDA companion rule; both rules present the same total costs to hospitals. C. Alternatives Considered The PHS Advisory Committee discussed improvements in the treatment and management of HCV infection and improvements in testing for the HCV antibody at public meetings held in April and August 1997. The PHS Advisory Committee recommended that blood establishments and hospitals notify previous recipients of blood components from donors who tested positive for HCV upon a subsequent donation. Following the Department of Health and Human Services' acceptance of recommendations from the PHS Advisory Committee, FDA developed industry guidance for testing blood for HCV, quarantining blood and blood components, and notifying patients who may have received HCV-infected blood and blood components. We explored the possibility of using a program memorandum to notify hospitals that they must follow FDA guidance. We believe, however, that in order to protect the health and safety of beneficiaries, we should publish an enforceable regulation that will enable us to ensure compliance through the survey process. The FDA, in its final rule published elsewhere in this issue of the **Federal Register** , provides a lengthy discussion and cost-benefit analysis regarding a targeted lookback program compared to a general lookback program for HCV. Therefore, the following discussion considers some key elements of successful lookback efforts, describes certain challenges identified in lookback programs already in operation, and reviews the value of targeted recipient notification and treatment efforts. The lookback provisions of this interim final rule with comment period can be characterized as a targeted lookback program, meaning that the notification of infection risk is limited to, or targeted at, individuals identified as recipients of blood from donors subsequently found to test positive for HCV. This program is distinct from general lookback programs, which are aimed at all patients who received blood before the onset of screening and which include the recommendation that the patients be tested for evidence of infection. General and targeted lookback programs may be complementary. General lookback can be conducted in a variety of ways, including use of the broadcast media, education, and letter campaigns addressed to physicians or patients. By contrast, targeted lookback can only be performed successfully if the transfusion service is aware that the donor subsequently tested positive, if donor and product disposition records are available to link blood components with the identified donors, and if the physician or hospital knows the recipient's current whereabouts. Hospitals would locate recipient records for all transfused units from an affected donor and would have current recipient or physician address information available so that the hospitals could deliver notifications. Ideally, the recipient would be located, and would respond to the notification for testing and treatment, if appropriate. Despite the difficulties of implementing targeted lookback, it is considered a valuable means of reaching patients at high risk for HCV. For example, a comparison of Canadian efforts in targeted lookback with general lookback through physician and public education found that a large number of patients and families were unaware that the patient had ever received a transfusion while in the hospital. These recipients would not have been reached through the general lookback effort. Timely notification is important because studies of patient characteristics and responsiveness to therapy indicate that the best results are achieved if patients receive treatment when they are younger and have not yet developed cirrhosis. The primary treatment for chronic hepatitis C is combination therapy with standard or pegylated interferon alpha and ribavirin. Of those patients who undergo combination treatment, a reported 40 to 50 percent show a sustained response
(SR)after 12 months of therapy. However, interferon alpha produces a wide array of adverse side effects, and some patients experience a relapse after therapy. Still, the benefits for patients identified for treatment through HCV lookback are likely to continue to increase as improved therapies are developed. FDA has recently approved the use of this combination therapy for HCV patients who suffer a relapse after initial therapy with interferon alone. As discussed in section I of this document, the BPAC and PHS Advisory Committee have met a number of times to discuss HCV testing and other issues related to HCV lookback. The PHS Advisory Committee made recommendations after considering alternative procedures to notify transfusion recipients. Alternative approaches for lookback are available but are not considered fully effective. Because of the importance of a safe national blood supply and because our mission is to protect the public health, we accepted the recommendations of the PHS Advisory Committee and did not select an alternative approach. D. Conclusion In addition to the prospective HIV lookback that hospitals are currently required to perform, hospitals are also required to conduct a lookback of transfusion recipients of potentially HCV-infected blood. This interim final rule with comment period also requires hospitals to have in their agreements with BCEs that BCEs notify hospitals after performing their own FDA-mandated lookback. Therefore, we have prepared an analysis consistent with the analysis set forth by the RFA. We solicited public comments on the extent that these provisions will significantly economically affect any of the entities. We have reviewed this interim final rule with comment period under the threshold criteria of Executive Order 13132, Federalism. We have determined that it will not significantly affect the rights, roles, and responsibilities of States. In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. List of Subjects in 42 CFR Part 482 Grant programs—health, Hospitals, Medicaid, Medicare, Reporting and recordkeeping requirements. For the reasons set forth in the preamble 42 CFR part 482 is amended as set forth below: PART 482—CONDITIONS OF PARTICIPATION FOR HOSPITALS 1. The authority citation for part 482 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). 2. Amend § 482.27 by— A. Removing the designation of paragraph (a). B. Redesignating paragraphs
(b)and
(c)as paragraphs
(a)and (b), respectively. C. Revising re-designated paragraph (b). D. Adding paragraph (c). The revisions and additions read as follows: § 482.27 Condition of participation: Laboratory services.
(b)*Standard: Potentially infectious blood and blood components* —(1) *Potentially human immunodeficiency virus
(HIV)infectious blood and blood components.* Potentially HIV infectious blood and blood components are prior collections from a donor—
(i)Who tested negative at the time of donation but tests reactive for evidence of HIV infection on a later donation;
(ii)Who tests positive on the supplemental (additional, more specific) test or other follow-up testing required by FDA; and
(iii)For whom the timing of seroconversion cannot be precisely estimated.
(2)*Potentially hepatitis C virus
(HCV)infectious blood and blood components.* Potentially HCV infectious blood and blood components are the blood and blood components identified in 21 CFR 610.47.
(3)*Services furnished by an outside blood collecting establishment.* If a hospital regularly uses the services of an outside blood collecting establishment, it must have an agreement with the blood collecting establishment that governs the procurement, transfer, and availability of blood and blood components. The agreement must require that the blood collecting establishment notify the hospital—
(i)Within 3 calendar days if the blood collecting establishment supplied blood and blood components collected from a donor who tested negative at the time of donation but tests reactive for evidence of HIV or HCV infection on a later donation or who is determined to be at increased risk for transmitting HIV or HCV infection;
(ii)Within 45 days of the test, of the results of the supplemental (additional, more specific) test for HIV or HCV, as relevant, or other follow-up testing required by FDA; and
(iii)Within 3 calendar days after the blood collecting establishment supplied blood and blood components collected from an infectious donor, whenever records are available, as set forth at 21 CFR 610.48(b)(3).
(4)*Quarantine and disposition of blood and blood components pending completion of testing.* If the blood collecting establishment (either internal or under an agreement) notifies the hospital of the reactive HIV or HCV screening test results, the hospital must determine the disposition of the blood or blood product and quarantine all blood and blood components from previous donations in inventory.
(i)If the blood collecting establishment notifies the hospital that the result of the supplemental (additional, more specific) test or other follow-up testing required by FDA is negative, absent other informative test results, the hospital may release the blood and blood components from quarantine.
(ii)If the blood collecting establishment notifies the hospital that the result of the supplemental, (additional, more specific) test or other follow-up testing required by FDA is positive, the hospital must—
(A)Dispose of the blood and blood components; and
(B)Notify the transfusion recipients as set forth in paragraph (b)(6) of this section.
(iii)If the blood collecting establishment notifies the hospital that the result of the supplemental, (additional, more specific) test or other follow-up testing required by FDA is indeterminate, the hospital must destroy or label prior collections of blood or blood components held in quarantine as set forth at 21 CFR 610.46(b)(2), 610.47(b)(2), and 610.48(c)(2).
(5)*Recordkeeping by the hospital.* The hospital must maintain—
(i)Records of the source and disposition of all units of blood and blood components for at least 10 years from the date of disposition in a manner that permits prompt retrieval; and
(ii)A fully funded plan to transfer these records to another hospital or other entity if such hospital ceases operation for any reason.
(6)*Patient notification.* If the hospital has administered potentially HIV or HCV infectious blood or blood components (either directly through its own blood collecting establishment or under an agreement) or released such blood or blood components to another entity or individual, the hospital must take the following actions:
(i)Make reasonable attempts to notify the patient, or to notify the attending physician or the physician who ordered the blood or blood component and ask the physician to notify the patient, or other individual as permitted under paragraph (b)(10) of this section, that potentially HIV or HCV infectious blood or blood components were transfused to the patient and that there may be a need for HIV or HCV testing and counseling.
(ii)If the physician is unavailable or declines to make the notification, make reasonable attempts to give this notification to the patient, legal guardian, or relative.
(iii)Document in the patient's medical record the notification or attempts to give the required notification.
(7)*Timeframe for notification* —(i) *For donors tested on or after February 20, 2008.* For notifications resulting from donors tested on or after February 20, 2008 as set forth at 21 CFR 610.46 and 21 CFR 610.47 the notification effort begins when the blood collecting establishment notifies the hospital that it received potentially HIV or HCV infectious blood and blood components. The hospital must make reasonable attempts to give notification over a period of 12 weeks unless—
(A)The patient is located and notified; or
(B)The hospital is unable to locate the patient and documents in the patient's medical record the extenuating circumstances beyond the hospital's control that caused the notification timeframe to exceed 12 weeks.
(ii)For donors tested before February 20, 2008. For notifications resulting from donors tested before February 20, 2008 as set forth at 21 CFR 610.48(b) and (c), the notification effort begins when the blood collecting establishment notifies the hospital that it received potentially HCV infectious blood and blood components. The hospital must make reasonable attempts to give notification and must complete the actions within 1 year of the date on which the hospital received notification from the outside blood collecting establishment.
(8)*Content of notification.* The notification must include the following information:
(i)A basic explanation of the need for HIV or HCV testing and counseling;
(ii)Enough oral or written information so that an informed decision can be made about whether to obtain HIV or HCV testing and counseling; and
(iii)A list of programs or places where the person can obtain HIV or HCV testing and counseling, including any requirements or restrictions the program may impose.
(9)*Policies and procedures.* The hospital must establish policies and procedures for notification and documentation that conform to Federal, State, and local laws, including requirements for the confidentiality of medical records and other patient information.
(10)*Notification to legal representative or relative.* If the patient has been adjudged incompetent by a State court, the physician or hospital must notify a legal representative designated in accordance with State law. If the patient is competent, but State law permits a legal representative or relative to receive the information on the patient's behalf, the physician or hospital must notify the patient or his or her legal representative or relative. For possible HIV infectious transfusion recipients that are deceased, the physician or hospital must inform the deceased patient's legal representative or relative. If the patient is a minor, the parents or legal guardian must be notified.
(11)*Applicability.* HCV notification requirements resulting from donors tested before February 20, 2008 as set forth at 21 CFR 610.48 will expire on August 24, 2015.
(c)*General blood safety issues.* For lookback activities only related to new blood safety issues that are identified after August 24, 2007, hospitals must comply with FDA regulations as they pertain to blood safety issues in the following areas:
(1)Appropriate testing and quarantining of infectious blood and blood components.
(2)Notification and counseling of recipients that may have received infectious blood and blood components. (Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program) (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program) Dated: July 22, 2005. Mark B. McClellan, Administrator, Centers for Medicare & Medicaid Services. Approved: December 18, 2006. Michael O. Leavitt, Secretary. Editorial Note: This document was received at the Office of the Federal Register on August 17, 2007. [FR Doc. E7-16647 Filed 8-23-07; 8:45 am] BILLING CODE 4120-01-P CORPORATION FOR NATIONAL AND COMMUNITY SERVICE 45 CFR Parts 2510, 2522, 2540, 2551, and 2552 RIN 3045-AA44 National Service Criminal History Checks AGENCY: Corporation for National and Community Service. ACTION: Final rule. SUMMARY: The Corporation for National and Community Service (Corporation) is issuing a regulation requiring grantees to conduct and document National Service Criminal History Checks on Senior Companions and Foster Grandparents, as well as on AmeriCorps State and National (including Education Award Program) participants and grant-funded staff in those programs who, on a recurring basis, have access to children, persons age 60 and older, or individuals with disabilities. A National Service Criminal History Check consists of a State criminal registry check; and a National Sex Offender Public Registry (NSOPR) check. DATES: This final rule is effective November 23, 2007. FOR FURTHER INFORMATION CONTACT: Amy Borgstrom at
(202)606-6930 ( *aborgstrom@cns.gov* ). The TDD/TTY number is
(202)606-3472. You may request this rule in an alternative format for the visually impaired. I. Background—The October 26, 2006, Proposed Rule On October 26, 2006, the Corporation published a proposed rule (71 FR 62573) to require its grantees to conduct and document criminal history checks on Senior Companions and Foster Grandparents, as well as on AmeriCorps State and National (including Education Awards Program) participants and grant-funded staff in those programs who, on a recurring basis, have access to children, persons age 60 and older, or individuals with disabilities. The objective of this rule is to help protect vulnerable individuals who are beneficiaries of programs that are funded by the Corporation. This update to the Corporation's criminal history check policies was prompted by a recommendation by the Corporation's Acting Inspector General in an advisory letter to the Corporation's Chief Executive Officer in January 2005. Emphasis on Protecting Vulnerable Populations Many national and community service programs are dedicated to helping children learn to read, giving children better opportunities to thrive, helping older persons maintain their independence, and otherwise serving vulnerable individuals while striving to recruit diverse participants. With this commitment comes the responsibility to safeguard the well-being of program beneficiaries, including the effective screening of staff, participants, and volunteers. This responsibility is principally determined by State law, and the standard of care required may vary from one State to another. Organizations carrying out national and community service programs should establish and regularly review their screening and supervision practices as measured against the applicable standard of care under State law. The Corporation's Authority Sections 192A, 193, and 193A of the National and Community Service Act of 1990, 42 U.S.C. 12651b-d, give the Corporation broad authority to establish rules to protect program beneficiaries. This authority is reinforced by Executive Order 13331, National and Community Service Programs (Feb. 27, 2004), 60 FR. 9911 (Mar. 3, 2004), which directs the Corporation to “strengthen its oversight of national and community service programs through performance and compliance standards and other management tools.” FBI Fingerprint Checks Rapid advances in technology are increasing the availability and accessibility of information about individuals in our society. However, we have not yet identified any established criminal history check process at the national level that we can mandate for all grantees. The FBI maintains the most complete criminal database in the United States, with records that are fingerprint-based. A fingerprint check of this database is generally considered the most reliable, in part because it screens a physical characteristic rather than a name provided by an applicant. However, FBI-maintained records can sometimes be less complete and less up-to-date than State records, and are available only to organizations specifically authorized by a Federal or State law. Many organizations operating national and community service programs do not currently have access to FBI fingerprint checks. The Attorney General's Report on Criminal History Background Checks In 2006, the U.S. Attorney General issued a report with recommendations for broader access to FBI criminal history records for non-criminal purposes, including screening volunteers for entities providing services to children, the elderly, and individuals with disabilities. *The Attorney General's Report on Criminal History Background Checks (June 2006)* is available on-line at *http://www.usdoj.gov/olp/ag_bgchecks_report.pdf* (hereinafter *The Attorney General's Report* ). As such recommendations are implemented in Federal and State law, grantees operating national and community service programs may have better access to FBI fingerprint checks. In time, they may also have access to State and national criminal history databases that make use of driver's licenses incorporating fingerprint or other biometric data as a result of the Real ID Act of 2005 (Pub. L. 109-13) and new biometric techniques such as DNA identification. The PROTECT Act We are aware of Congressional interest in making accurate information about individuals' criminal history available while appropriately limiting the sharing of such information. For example, the PROTECT Act (Pub. L. 108-21) authorizes the Boys & Girls Club of America, the National Council of Youth Sports, the National Mentoring Partnership, and nonprofit organizations that provide care, treatment, education, training, instruction, supervision, or recreation to children to participate in a pilot program with the National Center for Missing and Exploited Children to obtain FBI fingerprint criminal history checks on volunteer applicants for a fixed fee of $18.00 per individual. Corporation grantees that provide the above types of services to children may consider contacting the National Center for Missing and Exploited Children ( *http://www.missingkids.com* ) to determine if they are eligible to participate in the pilot program. Alternatively, mentoring organizations, such as Foster Grandparent programs and many AmeriCorps programs, may request to participate through the National Mentoring Partnership ( *http://www.mentoring.org* ), a current participant in the pilot program. The lessons learned from the ongoing PROTECT Act's pilot program are likely to inform and spur greater and more effective coordination across State lines. For example, in January, 2007, Senators McCain and Schumer introduced legislation (S.431, *Keeping the Internet Devoid of Sexual Predators Act of 2007, or KIDS Act)* to strengthen national reporting requirements (including the requirement to register online Internet identifiers) for sex offenders. Also, in January, 2007, Congressman Pomeroy introduced legislation (H.R. 719) to establish a National Sex Offender Risk Classification Task Force to create guidelines for a risk-based sex offender classification system for use in sex offender registries. Amid this changing landscape, the Corporation seeks at this time to achieve a consistent baseline practice among Senior Companion and Foster Grandparent programs, and among AmeriCorps State and National programs serving children, persons age 60 and older, or individuals with disabilities. The Requirement for Grantees To Establish a Baseline Screening Process This rule establishes a baseline screening process at the national level. This screening requirement will be a Federal grant condition separate and apart from any State requirement. The Need for a Comprehensive Screening Process This baseline screening requirement does not, however, preclude grantees from conducting a more thorough evaluation of supervising staff and participants if they choose to do so. Criminal history checks are one part of an effective risk management approach to protecting program participants from harm as well as protecting the sponsoring organization from liability. Organizations serving children and other vulnerable populations need to be mindful that no screening process is foolproof. Sponsoring organizations should also note that the design and operation of programs can provide additional safeguards. Examples include programs designed to minimize opportunities for potential abuse; regular child or elder abuse prevention training; restricted one-on-one and other unsupervised contact with vulnerable clients; controlled access to areas where vulnerable clients are present; unannounced observation visits; and the posting and reinforcement of protocols on how to respond to suspected or reported abuse. To assist our grantees, the Corporation has distributed and also made available on our Web site the *Staff Screening Tool Kit, 3rd Edition,* a publication prepared by the Nonprofit Risk Management Center that contains helpful information designed to strengthen an organization's staff and volunteer screening and supervision processes. You can access this resource at *http://www.nationalservice.gov/screeningtoolkit.* Fairness and Confidentially The National Service Criminal History Check also seeks to ensure fairness and confidentiality in handling criminal history information. Such fairness and confidentiality considerations are congruent with the Attorney General's privacy recommendation and discussion of “fair information practices” as applied to criminal history records in *The Attorney General's Report.* As the Attorney General points out, we also have an interest, as a society, in rehabilitating individuals with a criminal history and in avoiding unlawful discrimination. In developing the rule, the Corporation reviewed comments and public statements submitted to DOJ by privacy, civil liberties, and ex-offender advocates concerning the impact of criminal background checks and sex offender registries on privacy, rehabilitation, and discrimination. Because criminal history searches and results often disclose other potentially sensitive identifying data, such as Social Security number, date of birth, driver's license number, and home address, grantees need to protect the individuals concerned from identity theft, physical threats, or other injury. Fairness and confidentiality procedures can also help ensure that qualified prospective program volunteers, participants, and employees are not discouraged from seeking to be involved in national and community service programs. Laws That Prohibit Employment Discrimination Closely related to privacy requirements are Federal and State laws that prohibit discrimination in employment, such as Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e *et seq.* ). This can be an issue, for example, if employment decisions are attributed to the results of criminal history checks, but the results are actually used as a pretext for excluding individuals based on their race, religion, gender, or age. The recently-revised Equal Employment Opportunity Commission
(EEOC)Compliance Manual, Section 15: Race and Color Discrimination (April 19, 2006), refers to court rulings on the potential “disparate impact” of a hiring policy based on arrests or convictions. The EEOC suggests that prospective employers should weigh the following factors in each case to ensure their decisions to disqualify applicants based on criminal history results are grounded on defensible “business needs,” despite any differential impact: • The nature and gravity of the offense; • The time that has passed since the conviction or completion of the sentence; and • The nature of the job held or sought. These considerations apply directly to preventing unlawful discrimination in the employment of persons for covered grant-funded staff positions, and may be relevant to a national and community service program's evaluation of applicants to a position as a staff member or participant. The EEOC Compliance Manual is available online at: *http://www.eeoc.gov/policy/docs/race-color.html.* Preliminary Public Input On October 17, 2005, the Corporation published a notice in the **Federal Register** inviting informal preliminary public input in advance of rulemaking (70 FR 60257). The Corporation also held two conference calls following the notice. The Corporation considered the input received in drafting its proposed rule. 60-Day Comment Period In the **Federal Register** of October 26, 2006 (71 FR 62573), the Corporation published the proposed rule, with a 60-day comment period. In addition to accepting comments in writing, the Corporation held two conference calls in November, 2006. The Corporation received over 70 comments concerning the proposed rule, including those in writing and those received through the conference calls. Comments are discussed in detail in Part III. In general, almost all of the comments supported the requirement that criminal history background and NSOPR checks be conducted on individuals working with vulnerable populations in the positions designated in the proposed rule. II. Discussion of the Final Rule Covered Positions This final rule covers Senior Companions and Foster Grandparents, and participant positions in AmeriCorps State and National and other programs that provide a Corporation-funded living allowance, stipend, education award, or other remuneration to individuals who have recurring access to children, persons age 60 and older, or individuals with disabilities. We define “children” as individuals 17 years of age and younger, consistent with the PROTECT Act. Sixty years of age—the lowest age commonly used by Congress to define elderly persons—is the threshold age for protecting elderly persons. “Individuals with disabilities” has the same meaning given the term in the Rehabilitation Act in 29 U.S.C. 705(20)(B), and includes any person who has a physical or mental impairment which substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. The final rule also covers grant-funded staff with access to the identified vulnerable populations in these programs. Grantees, therefore, must establish the age and disability status of program participants, including beneficiaries. The rule covers the Senior Companion and Foster Grandparent programs because their focus on serving vulnerable populations warrants baseline screening provisions that meet a national standard. The requirement includes specific search elements, as well as fairness considerations. It gives more specific direction to Senior Companion and Foster Grandparent sponsoring organizations in carrying out an important part of their responsibility to establish risk management policies and procedures, and disqualifies registered sex offenders from serving as Senior Companions or Foster Grandparents. Currently, AmeriCorps State and National grant programs, including the Education Awards Program, have a criminal background check requirement in their grant provisions. In light of the Corporation's substantial support for AmeriCorps participants, all of whom are eligible to receive a Corporation-funded education award upon successful completion of service, we believe that baseline screening requirements are appropriate. This rule adds details to the required search elements, establishes procedures to assure fairness and confidentiality, and disqualifies registered sex offenders from AmeriCorps positions with recurring access to children, persons age 60 and older, or individuals with disabilities. The rule also applies to other Corporation-supported grant programs in which service participants receive a Corporation-funded living allowance, stipend, or education award and, on a recurring basis, have access to children, persons age 60 and older, or individuals with disabilities. For example, the rule would also cover a non-AmeriCorps program that provides a stipend to participants who tutor children in an after-school program. Programs Not Covered Under Final Rule The rule's requirements do not cover individuals in the RSVP or Learn and Serve America programs, or unaffiliated volunteers recruited by national and community service programs. Those individuals have an attenuated connection to the Corporation, and the Federal government does not directly facilitate unsupervised contact between vulnerable persons and individuals through those programs. The Corporation therefore defers to existing duties of care under State law. For example, participants in Learn and Serve K-12 programs seldom serve in unsupervised settings. In addition, participants in Learn and Serve Higher Education programs, who concentrate primarily on curriculum development, as well as participants in Community-Based programs who usually serve in supervised, group settings, generally do not have unsupervised access to vulnerable populations. The Corporation emphasizes, however, the importance of ascertaining and meeting the applicable standards of care under State law for all Corporation-supported programs and activities. The final rule also does not cover the AmeriCorps National Civilian Community Corps or the AmeriCorps VISTA programs, as the selection of participants in those programs is made by Federal personnel rather than by grantee organizations. While the Corporation has strengthened our internal screening practices in both of those federally-operated programs through an arrangement with the U.S. Office of Personnel Management, these programs are outside the scope of this rulemaking. Specifics of the Final Rule The rule requires a criminal history review that reflects information that should be reasonably accessible to grantees. The following elements are required: Components of the National Service Criminal History Check Unless the Corporation approves an alternative screening protocol and unless prohibited or otherwise precluded by State law, a covered grantee must, in selecting an individual for participation, conduct and document two searches:
(A)A search (by name or fingerprint) of the State criminal registry for the State in which the program operates and the State in which the applicant resides at the time of application; and
(B)a search of the Department of Justice
(DOJ)National Sex Offender Public Registry (NSOPR) at *http://www.nsopr.gov.* The term “State,” when used in this rule, also includes U.S. Territories, as defined in 45 CFR 2510.20; 2551.12 (u); and 2552.12 (x). Required Procedures Procedures must include:
(a)Verification of the applicant's identity by examining a government-issued photo identification card;
(b)prior, written authorization by the applicant authorizing the program to conduct State criminal registry checks (not required for NSOPR checks), as well as authorization to share the results of that check within the program, as appropriate;
(c)documentation of the applicant's understanding that selection into the program is contingent upon the organization's review of the applicant's criminal history, if any;
(d)an opportunity for the applicant to review and challenge the factual accuracy of a result before action is taken to exclude the applicant from the position;
(e)safeguards to ensure the confidentiality of any information relating to the criminal history check, consistent with the authorization provided by the applicant (grantees may find a useful model in considering confidentiality safeguards in the Federal Trade Commission's Standards for Safeguarding Customer Information, 16 CFR Part 314, posted at *http://www.ftc.gov/os/2002/05/67fr36585.pdf.* ); and
(f)ensuring that an individual, for whom the results of a required State criminal registry check are pending, is not permitted to have access to vulnerable beneficiaries without being accompanied by an authorized program representative who has previously been cleared for such access. An individual who refuses to authorize a program to conduct a criminal history State registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, may not serve in a covered position. Required Documentation A grantee must document in writing that it (or its designee) verified the identity of the individual by examining the individual's government-issued photo identification card, conducted the required checks, maintained the results of the National Service Criminal History Check (unless precluded by State law), and considered the results in selecting or retaining an individual for a covered position. NSOPR Checks Required on All Covered Positions, Including Those Currently Serving The NSOPR is a DOJ-sponsored Internet-based, searchable Web site that provides one-stop access to registries from all 50 States, Guam, Puerto Rico, and the District of Columbia. To assist the public, the FBI also has a link on its Web site to each State's sexual offender registry. The FBI Web site can be accessed at *http://www.fbi.gov/hq/cid/cac/States.htm.* The NSOPR check must be conducted on any applicant for a covered position, as well as on any individual currently serving in a covered position at the time this rule becomes effective. Grantees should know that the NSOPR compiles, but does not independently verify or analyze, data that is provided by each State, and even if current legislative proposals to establish national reporting standards are adopted, there may continue to be differences in the content and currency of data held respectively in the NSOPR and State sex offender registries. Effective Dates for Conducting State Criminal Registry and NSOPR Checks A Senior Companion or Foster Grandparent sponsoring organization must demonstrate that any required State criminal registry check is conducted at least once for any Senior Companion or Foster Grandparent who begins serving with the program on or after the effective date of this rule. An AmeriCorps grantee must document that the required State criminal registry check is conducted the first time an individual applies for a covered position in its program on or after the rule's effective date. NSOPR checks must, however, be conducted for all Senior Companion, Foster Grandparent, and AmeriCorps covered positions, including those currently serving at the time this final rule becomes effective. Programs must complete the NSOPR check on their current participants and grant-funded employees in covered positions within 90 days from the publication date of the final rule. Alternative Search Procedures If a grantee demonstrates that, for good cause, including a conflict with State law, it is unable to conduct the required searches or that it can obtain substantially equivalent or better information through an alternative process, the Corporation will consider approving an alternative search protocol proposed in writing by the grantee. This includes, but is not limited to, situations where a State or local government body has established screening and documentation requirements designed to protect one or more vulnerable populations covered by the final rule. A school board, for example, acting pursuant to State legislation, may have set requirements for screening staff and volunteers that provide substantially equivalent protections to the vulnerable populations identified in this rule. Consequently, a teacher corps, whose members are all school district employees screened pursuant to a requirement imposed by a school board or other governing body, would satisfy the criteria for an approved alternative search procedure. In determining whether an alternative process results in substantially equivalent or better information, the Corporation will review the nature of the sources included in the alternative process, as well as the reliability of the information obtained. A current grantee can submit a written request within 90 days after the publication of this rule to the Corporation for approval of an alternative search protocol. A grantee qualifying for an exception must still conduct NSOPR checks on its participants and grant-funded employees, if not already required under State or local authority. Grantees must submit any applicable alternative protocol requests for approval in writing to the Corporation's Office of Grants Management. The Office of Grants Management will review the alternative protocol and will consider factors including, but not limited to:
(1)That it sufficiently verifies the identity of the applicant; and
(2)that it includes a search of an alternative criminal database that is sufficient to identify the existence, or absence of, a criminal offense. In addition, a grantee that conducts and documents a criminal history check through the FBI or through a national name-based check that, at a minimum, includes a search of the State criminal registry in the State in which the program is operating, as well as in the State in which the applicant resides, will be deemed to have satisfied the required State criminal registry check and does not need separate approval by the Corporation. Additional Safeguards Establishing a baseline process as a grant condition is in no way intended to discourage grantees from undertaking additional measures to screen applicants. For example, grantees should be aware that individuals might provide a false name during the application process. Consequently, while a grantee must verify an applicant's identity with a government-issued photo identification card, such as a driver's license, the Corporation also strongly encourages grantees to take other precautionary steps such as consistently checking references or past employment. Additional screening practices include conducting a personal interview or, for an individual whose program assignment will include driving a vehicle, examining driving records. In addition, some programs have access to State-based child abuse or elder abuse registries. A grantee's decision to take any of these additional steps reflects the organization's own judgment about appropriate screening and is not considered a requirement under the Corporation grant. Terminations and the Corporation's Refill Policy The Corporation's refill policy may enable AmeriCorps program grantees that have fully enrolled their awarded slots to replace a participant who terminates service before completing a required minimum (currently 30 percent) of his or her term and without having receiving a pro-rated education award. If the background screening results in the participant being ineligible to serve and the participant has already served more than the term of service specified under the refill policy, a grantee may seek an exception to the refill policy by submitting a written request for an exception to the Corporation's Office of Grants Management. The Office of Grants Management will review the request based on factors including, but not limited to, whether the delay in obtaining the criminal history check for the participant was a result of the grantee's lack of due diligence, or was for a reason that was beyond the grantee's control, and will reply within 30 days of receipt of such requests. Disqualification of Registered Sex Offenders States have developed sexual offender registries to inform the public concerning the presence and location of individuals who have been convicted of certain sex-related offenses, either committed within that State, or in another State. Depending on the severity of the convicted offense, individuals are required to register as sex offenders either for a specified number of years (e.g., 10 years) or for life. An individual who is subject to a State sex offender registration requirement is deemed unsuitable for, and may not serve in, a covered position. The disqualification includes individuals who are applicants for covered positions, as well as individuals who are currently serving with the organization in a covered position. Grantees not Precluded From Adopting Other Disqualifying Offenses In developing the proposed rule, the Corporation considered other disqualifying factors and offenses, such as convictions for serious and violent felonies, but ultimately determined that the selection criteria for covered positions—beyond any statutory eligibility criteria and the disqualification of registered sex offenders—should continue to be the responsibility of each grantee organization. Therefore, this rule does not preclude a grantee from adopting additional grounds for disqualification if it decides that it is appropriate or necessary for a particular program. Grantees should, however, be aware that State law may specifically prohibit the consideration of conviction or arrest records under certain circumstances. Finally, grantees should look at criminal history checks as but one of many sources of information to assess whether an individual is suitable for a program. Selection of Applicants Pending Criminal History Results A grantee may not select an individual for a position that has recurring access to children, persons age 60 and older, or individuals with disabilities prior to determining whether the individual is subject to a State sex offender registration requirement, which is readily ascertainable through an on-line search. Because the additionally-required search of State criminal registries, or an approved alternative search, may take more time, a grantee is not precluded under this rule from selecting or placing an individual contingent upon obtaining these additional results subsequently. However, until all required State criminal registry check results are received and reviewed by the grantee, an applicant may not have access to a vulnerable beneficiary without being accompanied by an authorized program representative who has previously been cleared to have such access. A grantee should take other reasonable precautions to ensure that safeguards are in place while the results are pending, including additional monitoring, and other risk mitigation steps, as determined by the grantee. The Corporation again emphasizes that the NSOPR check must be conducted before the individual begins to serve, as it is a no-cost, almost instantaneous search that can be conducted by accessing the DOJ Web site. Use of Intermediary Permitted A grantee may ascertain and assess an individual's criminal history or sex offender status directly from the applicable government agency, or indirectly through a duly authorized intermediary selected by the grantee such as a commercial entity or nonprofit organization. However, as a prudential matter, grantees should routinely review the intermediary's criminal history check procedures and practices to ensure that they are in compliance with the Corporation's requirements. In addition, because the amount of time from application until actual enrollment can be substantial, grantees should ensure that the criminal history result that it reviews before selecting the applicant is as current as possible. Costs The final rule requires grantees (or their designees) to obtain and document a National Service Criminal History Check for covered individuals. The Corporation considers the cost of this required criminal history check a reasonable and necessary program grant expense, such costs being presumptively eligible for reimbursement. A grantee should include the costs associated with its screening process in the grant budget it submits for approval to the Corporation. Unless specifically approved by the Corporation, a grantee may not charge an individual for the cost of a criminal history check required under this rule. The Corporation will consider approving, for example, a long-standing school district policy of charging staff, volunteers, and others who work or serve in schools for the cost of criminal history checks, provided the income is treated in accordance with applicable grant conditions. In addition, because criminal history checks are inherently attributable to operating a program, such costs may not be charged to a State commission administrative grant. We will monitor the screening and documentation requirement as a material condition of receiving a Corporation grant. A grantee's material failure to comply with this requirement (including the NSOPR check) will result in the Corporation taking appropriate action, up to and including denial of the grantee's claim for reimbursements, suspending the grantee's access to grant funds, or restricting (or denying) the grantee's eligibility to obtain future grants from the Corporation. And specifically, a grantee jeopardizes eligibility for reimbursement of costs related to a disqualified individual if it fails to perform or document the required check. III. Comments and Response Of the more than 70 comments received, the vast majority of the comments supported the requirement that national service programs conduct and document criminal history checks on individuals in covered positions. The comments and our responses are set forth below. *Comment:* Several commenters inquired as to why the Corporation was not including the RSVP or Learn and Serve programs under this rule. *Response:* The Corporation's connections with individual participants in the RSVP and Learn and Serve programs are sufficiently attenuated to rely on existing duties of care under State law. At the same time, the Corporation recognizes the importance of protecting all Corporation-supported program beneficiaries; therefore, we wish to emphasize the importance and need for all programs to ascertain and meet the applicable duties of care under State law. *Comment:* Several commenters asked for clarification concerning the term “recurring access,” expressing concern that it may be too broad in its scope. *Response:* The term is defined in the final rule at § 2510.20 Definitions. The Corporation believes that the definition of recurring access in the proposed rule is appropriate, and that it is prudent to include more applicants under this requirement than to exclude them by limiting the definition to a narrower category of individuals. A definition other than “more than once” would be likely to result in additional documentation requirements and collateral disputes about the adequacy of such documentation. Note that the definition does not apply to Senior Companions and Foster Grandparents, all of whom are covered by the requirements. *Comment:* Some commenters expressed concern that including persons age 60 and older as vulnerable individuals may offend individuals in this age category. *Response:* While we acknowledge that many individuals, age 60 and older, would not consider themselves vulnerable, we thought it would be prudent, from a policy and safety perspective, to be more inclusive than exclusive on this point. In addition, we have determined that sixty years of age appears to be the lowest age commonly used by Congress to define elderly persons in legislation that establishes a threshold age for elderly persons (e.g., Older Americans Act; Food Stamp Act) (§§ 2522.205; 2540.200; 2551.26; 2552.26)). *Comment:* One commenter asked us to clarify which State criminal registry checks are required for a program that operates in more than one State. *Response:* The final rule requires a search of the criminal registry for the State in which a program operates and the State in which the applicant resides at the time of application. “State in which your program operates” refers to the actual geographic location where an individual will be serving on a permanent basis while participating in the program. For example, if the program's headquarters is in Florida, but the individual is applying to serve in an operating site in another State, the program must conduct a criminal history check in the State in which the operating site is located. If a program is unsure where an applicant is going to serve at the time that the applicant submits an application, the program must check each State in which the applicant could be assigned to serve on a permanent basis. (§§ 2540.202 (a); 2551.27 (a); 2552.27 (a)). *Comment:* One commenter asked for clarification as to what has to be documented when conducting the NSOPR check. *Response:* The program must document in writing that it conducted the NSOPR check on all covered positions, and considered the results in determining the individual's suitability. Any individual who is registered, or who is required to be registered, on a State sex offender registry is deemed unsuitable for, and may not serve in, a covered position (§§ 2540.202(b); 2551.27(b); 2552.27(b)); (§§ 2522.206; 2540.201; 2551.42; 2552.42). *Comment:* Another commenter asked us to clarify the term “consecutive terms of service” as it relates to a grantee's requirement to conduct a separate criminal history check for a subsequent term of service. There is an exception to this requirement if an individual is serving “consecutive terms of service.” *Response:* A consecutive term of service means that there is no intervening break in service of more than 30 days during which the applicant did not serve in that specific program. Consequently, if there is no break in service, there is no requirement that a grantee conduct a new State criminal registry and NSOPR check (§ 2540.203). Notwithstanding this exception, any AmeriCorps participant who is serving in a covered position at the time this rule becomes effective will be required to submit to a criminal registry check if the participant decides to serve another term, even if it is with the same program and there is no 30-day break in service. *Comment:* We were asked to clarify when the requirement takes effect and to whom it applies. *Response:* Both the State criminal registry check and NSOPR requirements take effect 90 days after publication of the Final Rule in the **Federal Register** . The State criminal registry check requirement applies only to those covered individuals who apply after the effective date of the final rule. The NSOPR check, however, applies to all covered individuals who apply to serve, or who are currently serving with, or working in, the affected programs (See paragraph V, Effective Dates). *Comment:* One commenter asked if costs (such as a living allowance) attributable to an individual under a grant were allowable if the grantee subsequently determines that the individual must leave the program as a result of a criminal history check. *Response:* The costs are allowable unless the delay in determining that an individual is ineligible to serve is caused by non-compliance or unreasonable delay by the grantee (e.g., failure to conduct the NSOPR check before enrolling or hiring the individual). *Comment:* Some commenters asked whether staff members of a grantee whose salaries are paid with matching funds are included under this requirement. *Response:* If the staff members are included in the grantee's proposed budget as grant-funded employees, whether supported by Corporation or matching funds, they are included under this requirement (§§ 2522.205; 2540.200; 2551.26; 2552.26). *Comment:* A commenter asked for clarification as to which States' criminal registry must be checked for a college student who is attending college in a State that is not his or her home of record. *Response:* For the purpose of this rule, a student who is attending college in a State that is not the student's “home of record” (i.e., where the student's parent(s) reside) is deemed to be residing in the State in which the college is located. The final rule requires programs to conduct a criminal registry check in the State in which the program is operating, as well as in the State in which the applicant is residing at the time the application is submitted. There is nothing, however, to preclude a program from including additional States (i.e., the applicant's home of record or other States in which the student has lived) in its criminal registry check (§§ 2540.202(a); 2551.27(a); 2552.27(a)). *Comment:* One commenter expressed concern that the prospective nature of the rule would leave unchecked potentially unsuitable participants who are currently in the programs. *Response:* In establishing this new requirement as a grant condition, we were mindful of the costs associated with retrospective application. Because the criminal history State registry check requirement is prospective, grantees should design their programs' applications in a manner that appropriately reflects their screening practices. Programs with relatively less stringent screening practices are well advised to build in compensating controls to minimize the risks to their program beneficiaries. In addition, because an NSOPR check is cost-free and relatively easy to conduct, we are requiring all programs subject to this rule to conduct NSOPR checks on all applicants for covered positions, as well as on all individuals who are currently serving in covered positions (See paragraph V, Effective Dates). *Comment:* One individual submitted a written comment asking why the final rule disqualifies registered sex offenders, but not those individuals convicted of other offenses. *Response:* Disqualifying registered sex offenders from positions with recurring access to children, older persons, or individuals with disabilities takes advantage of the newly established national registry of sex offenders, accessible online across the country, and is consistent with our objective of establishing by rule an achievable baseline set of screening practices. Advances in information sharing at the national level may make it possible to strengthen this baseline in the future. To this end, the Corporation intends, at a later date, to consider adding other disqualifying factors, including specific offenses. Accordingly, we invite grantees and other interested parties to provide input on additional disqualifying factors. Input should be submitted to the individual listed at, FOR FURTHER INFORMATION CONTACT (§§ 2522.206; 2540.201; 2551.42; 2552.42). *Comment:* One commenter asked for clarification concerning the eligibility of an individual who refuses to consent to a State criminal registry check. *Response:* We have added language in the final rule clarifying that an individual who refuses to consent to a State criminal registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, is not eligible to serve in a covered position (§§ 2540.207; 2551.32; 2552.32). *Comment:* One commenter asked for clarification concerning an individual's right to review and challenge the factual accuracy of a criminal history check before any action is taken to exclude the individual from serving in, or working with, the program. *Response:* We believe that the ability of an applicant to review and challenge the results of State criminal registry and NSOPR checks is a basic right that all programs must give to each individual. With the potential for false positives, it is essential that all Corporation programs safeguard an individual's personal information and give the individual the opportunity to challenge any adverse findings that may surface (§§ 2540.204 (d); 2551.29 (d); 2552.29 (d)). *Comment:* Several commenters expressed concern that their individual States may not permit them to conduct criminal history checks without specific statutory authority to conduct the search. *Response:* We are prepared to approve an alternative search protocol if a program is prohibited or otherwise precluded from complying with the Corporation's criminal history check requirement (§§ 2540.206(c); 2551.31(c); 2552.31(c)). *Comment:* Several commenters expressed that the Corporation's criminal history requirement could be redundant if a program is already required to comply with a State or local government-mandated criminal history check that is equivalent to the Corporation's requirement. *Response:* Based upon these comments, we have included preamble language making clear that a program that is required to comply with a State or local government-mandated criminal history check that parallels the Corporation's requirement may request that the Corporation approve this alternative search protocol. A program qualifying for this exception must, however, in addition to satisfying State criminal history check requirements, conduct NSOPR checks on its participants and grant-funded employees, if not already required (§§ 2540.206(c); 2551.31(c); 2552.31(c)). *Comment:* Several commenters thought the criminal history requirement was necessary and prudent but were concerned about the cost of conducting the criminal history checks. They asked whether the Corporation would provide more funding to pay for the checks. *Response:* Although there are no additional funds designated for these checks, these costs are allowable. In addition, the NSOPR check is a no-cost Internet search. While the Corporation will provide guidance to assist grantees on effective and economic ways to reduce costs in this area, we remind our grantees that it is their responsibility when operating programs that serve vulnerable populations to ensure that they establish appropriate safeguards to meet their respective States' existing duties of care. It should also be noted that many programs are already managing within their budgets to secure the types of criminal history checks that we are requiring. For example, many local law enforcement agencies offer in-kind support to non-profit organizations that require this type of assistance. IV. Relationship to State Laws To the extent that any element of the final rule is prohibited, or is otherwise precluded under State law, the Corporation's Office of Grants Management is prepared to approve an alternative that is consistent with State law, within 30 days of receiving such notice. V. Effective Dates The final rule takes effect November 23, 2007. The State criminal registry search requirement applies prospectively to the selection of any individual who applies on or after the effective date. However, an AmeriCorps participant who is serving in a covered position at the time this rule becomes effective will be required to submit to a criminal registry check if the participant desires to serve another term, even if it is with the same program. The NSOPR requirement applies:
(1)To any applicant for a covered position beginning on or after the effective date, as well as
(2)to an individual who is serving as a participant or grant-funded employee in a covered position on the effective date. VI. Regulatory Procedures Executive Order 12866 The Corporation has determined that this rule is not an “economically significant” rule within the meaning of E.O. 12866 because it is not likely to result in:
(1)An annual effect on the economy of $100 million or more, or an adverse and material effect on a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal government or communities;
(2)the creation of a serious inconsistency or interference with an action taken or planned by another agency;
(3)a material alteration in the budgetary impacts of entitlement, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4)the raising of novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in E.O. 12866. It is, however, a significant rule and has been reviewed by the Office of Management and Budget in accordance with E.O. 12866. Regulatory Flexibility Act As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the Corporation certifies that this rule will not have a significant economic impact on a substantial number of small entities. This regulatory action will not result in
(1)An annual effect on the economy of $100 million or more;
(2)a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or
(3)significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, the Corporation has not performed the initial regulatory flexibility analysis that is required under the Regulatory Flexibility Act, 5 U.S.C. 601 *et seq.* , for major rules that are expected to have such results. Unfunded Mandates For purposes of Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. § 1531-1538, as well as Executive Order 12875, this regulatory action does not contain any Federal mandate that may result in increased expenditures in either Federal, State, local, or tribal governments in the aggregate, or impose an annual burden exceeding $100 million on the private sector. Paperwork Reduction Act This rule contains no information collection requirements and is therefore not subject to the requirements of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 *et seq.* ). Executive Order 13132, Federalism Executive Order 13132, Federalism, prohibits an agency from publishing any rule that has Federalism implications if the rule either imposes substantial direct compliance costs on State and local governments and is not required by statute, or the rule preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. The rule does not have any Federalism implications, as described above. List of Subjects 45 CFR Part 2510 Grant programs—social programs, Volunteers. 45 CFR Part 2522 Grant programs—social programs, Reporting and recordkeeping requirements, Volunteers. 45 CFR Part 2540 Administrative practice and procedure, Grant programs—social programs, Reporting and recordkeeping requirements, Volunteers. 45 CFR Part 2551 Aged, Grant programs—social programs, Volunteers. 45 CFR Part 2552 Aged, Grant programs—social programs, Volunteers. For the reasons stated in the preamble, the Corporation for National and Community Service amends chapter XXV, title 45 of the Code of Federal Regulations as follows: PART 2510—OVERALL PURPOSES AND DEFINITIONS 1. The authority citation for part 2510 continues to read as follows: Authority: 42 U.S.C. 12501 *et seq.* 2. Amend § 2510.20 by adding the definitions of “children,” and “recurring access” in alphabetical order to read as follows: § 2510.20 Definitions. *Children.* The term *children* means individuals 17 years of age and younger. *Recurring access.* The term *recurring access* means the ability on more than one occasion to approach, observe, or communicate with, an individual, through physical proximity or other means, including but not limited to, electronic or telephonic communication. PART 2522—AMERICORPS PARTICIPANTS, PROGRAMS, AND APPLICANTS 1. The authority citation for part 2522 is revised to read as follows: Authority: 42 U.S.C. 12571-12595; 12651b-12651d; E.O. 13331, 69 FR 9911. 2. Add the following new sections: § 2522.205, § 2522.206, and § 2522.207 to read as follows: § 2522.205 To whom must I apply suitability criteria relating to criminal history? You must apply suitability criteria relating to criminal history to a participant or staff position for which an individual receives a Corporation grant-funded living allowance, stipend, education award, salary, or other remuneration, and which involves recurring access to children, persons age 60 and older, or individuals with disabilities. § 2522.206 What suitability criteria must I apply to a covered position? Any individual who is registered, or required to be registered, on a State sex offender registry is deemed unsuitable for, and may not serve in, a covered position. § 2522.207 What are the procedures I must follow to determine an individual's suitability to serve in a covered position? In determining an individual's suitability to serve in a covered position, you must follow the procedures in part 2540 of this title. PART 2540-GENERAL ADMINISTRATIVE PROVISIONS 1. The authority citation for part 2540 is revised to read as follows: Authority: 42 U.S.C. 12651b-12651d; E.O. 13331, 69 FR 9911. § 2540.200 [Redesignated as § 2540.208] 2. Redesignate § 2540.200 as § 2540.208. 3. Add the following sections: §§ 2540.200, 2540.201, 2540.202, 2540.203, 2540.204, 2540.205, 2540.206, and 2540.207. § 2540.200 To whom must I apply suitability criteria relating to criminal history? You must apply suitability criteria relating to criminal history to an individual applying for, or serving in, a position for which an individual receives a Corporation grant-funded living allowance, stipend, education award, salary, or other remuneration, and which involves recurring access to children, persons age 60 and older, or individuals with disabilities. § 2540.201 What suitability criteria must I apply to a covered position? Any individual who is registered, or required to be registered, on a State sex offender registry is deemed unsuitable for, and may not serve in, a position covered by suitability criteria. § 2540.202 What two search components of the National Service Criminal History Check must I satisfy to determine an individual's suitability to serve in a covered position? Unless the Corporation approves an alternative screening protocol, in determining an individual's suitability to serve in a covered position, you are responsible for conducting and documenting a National Service Criminal History Check, which consists of the following two search components:
(a)*State criminal registry search.* A search (by name or fingerprint) of the State criminal registry for the State in which your program operates and the State in which the individual resides at the time of application; and
(b)*National Sex Offender Public Registry.* A name-based search of the Department of Justice
(DOJ)National Sex Offender Public Registry (NSOPR). § 2540.203 When must I conduct a State criminal registry check and a NSOPR check on an individual in a covered position?
(a)The State criminal registry check must be conducted on an individual who enrolls in, or is hired by, your program after November 23, 2007.
(b)The NSOPR check must be conducted on an individual who is serving, or applies to serve, in a covered position on or after November 23, 2007.
(c)For an individual who serves consecutive terms of service in your program with a break in service of no more than 30 days, no additional check is required after the first term. § 2540.204 What procedures must I follow in conducting a National Service Criminal History Check for a covered position? You are responsible for following these procedures:
(a)Verify the individual's identity by examining the individual's government-issued photo identification card, such as a driver's license;
(b)Obtain prior, written authorization for the State criminal registry check and the appropriate sharing of the results of that check within the program from the individual (but not for the NSOPR check);
(c)Document the individual's understanding that selection into the program is contingent upon the organization's review of the individual's criminal history, if any;
(d)Provide a reasonable opportunity for the individual to review and challenge the factual accuracy of a result before action is taken to exclude the individual from the position;
(e)Provide safeguards to ensure the confidentiality of any information relating to the criminal history check, consistent with authorization provided by the applicant; and
(f)Ensure that an individual, for whom the results of a required State criminal registry check are pending, is not permitted to have access to children, persons age 60 and older, or individuals with disabilities without being accompanied by an authorized program representative who has previously been cleared for such access. § 2540.205 What documentation must I maintain regarding a National Service Criminal History Check for a covered position? You must:
(a)Document in writing that you verified the identity of the individual in a covered position by examining the individual's government-issued photo identification card, and that you conducted the required checks for the covered position; and
(b)Maintain the results of the National Service Criminal History check (unless precluded by State law) and document in writing that you considered the results in selecting the individual. § 2540.206 Under what circumstances may I follow alternative procedures in conducting a State criminal registry check for a covered position?
(a)*FBI fingerprint-based check.* If you conduct and document a fingerprint-based criminal history check through the Federal Bureau of Investigation, you will be deemed to have satisfied the State criminal registry check requirement and do not need separate approval by the Corporation.
(b)*Name-based search.* If you conduct and document a name-based criminal history check through a source other than the FBI that includes a check of the criminal records repository in the State in which your program is operating, as well as in the State in which the applicant lives, you will be deemed to have satisfied the State criminal registry check requirement and do not need separate approval by the Corporation.
(c)*Alternative search approval.* If you demonstrate that you are prohibited or otherwise precluded under State law from complying with a Corporation requirement relating to criminal history checks or that you can obtain substantially equivalent or better information through an alternative process, the Corporation will consider approving an alternative search protocol that you submit in writing to the Corporation's Office of Grants Management. The Office of Grants Management will review the alternative protocol to ensure that it:
(1)Verifies the identity of the individual; and
(2)Includes a search of an alternative criminal database that is sufficient to identify the existence, or absence of, criminal offenses. § 2540.207 Is an individual who refuses to consent to a State criminal registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, eligible to serve in a covered position? An individual who refuses to consent to a State criminal registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, is not eligible to serve in a covered position. PART 2551—SENIOR COMPANION PROGRAM 1. The authority citation for part 2551 is revised to read as follows: Authority: 42 U.S.C. 4950 *et seq.* ; 42 U.S.C. 12651b-12651d; E.O. 13331, 69 FR 9911. Subpart C of Part 2551—[Amended] § 2551.31 [Redesignated as § 2551.34] 2. Amend subpart C by redesignating § 2551.31 as § 2551.34. Subpart B of Part 2551—[Amended] § 2551.26 [Redesignated as § 2551.33] 3. Amend subpart B of part 2551 by redesignating § 2551.26 as § 2551.33. 4. Add the following sections to subpart B: §§ 2551.26, 2551.27, 2551.28, 2551.29, 2551.30, 2551.31, and 2551.32. § 2551.26 To whom does this part apply? This part applies to Senior Companion Sponsors when determining the suitability of Senior Companions, as well as to Senior Companion grant-funded employees who, on a recurring basis, have access to children, persons age 60 and older, or individuals with disabilities. § 2551.27 What two search components of the National Service Criminal History Check must I satisfy to determine an individual's suitability to serve in a covered position? Unless the Corporation approves an alternative screening protocol, in determining the suitability of an individual to serve as a Senior Companion or as a covered grant-funded employee, you are responsible for ensuring, unless prohibited by State law, that you conduct and document a National Service Criminal History Check, which consists of the following two search components:
(a)*State criminal registry search.* A search (by name or fingerprint) of the State criminal registry for the State in which the program operates and the State in which the individual resides at the time of application; and
(b)*National Sex Offender Public Registry.* A name-based search of the Department of Justice
(DOJ)National Sex Offender Public Registry (NSOPR). § 2551.28 When must I conduct a State criminal registry check and a NSOPR check on an individual in a covered position?
(a)The State criminal registry check must be conducted on an individual who enrolls in, or is hired by, your program after the effective date of this regulation.
(b)The NSOPR check must be conducted on an individual who is serving, or applies to serve, in a covered position on or after the effective date of this regulation. § 2551.29 What procedures must I follow in conducting a National Service Criminal History Check? You are responsible for ensuring that the following procedures are satisfied:
(a)Verify the individual's identity by examining the individual's government-issued photo identification card, such as a driver's license;
(b)Obtain prior, written authorization for the State criminal registry check and the appropriate sharing of the results of that check within the program from the individual (but not for the NSOPR check);
(c)Document the individual's understanding that selection into the program is contingent upon the organization's review of the individual's criminal history, if any;
(d)Provide a reasonable opportunity for the individual to review and challenge the factual accuracy of a result before action is taken to exclude the individual from the position;
(e)Provide safeguards to ensure the confidentiality of any information relating to the criminal history check, consistent with authorization provided by the individual; and
(f)Ensure that an individual, for whom the results of a required State criminal registry check are pending, is not permitted to have access to children, persons age 60 and older, or individuals with disabilities without being accompanied by an authorized program representative who has previously been cleared for such access. § 2551.30 What documentation must I maintain regarding a National Service Criminal History Check? You must:
(a)Document in writing that you verified the identity of the individual in a covered position by examining the individual's government-issued photo identification card, and that you conducted the required checks for the covered position; and
(b)Maintain the results of the National Service Criminal History check (unless precluded by State law) and document in writing that you considered the results in selecting the individual. § 2551.31 Under what circumstances may I follow alternative procedures in conducting a State criminal registry check?
(a)*FBI fingerprint-based check.* If you or your designee conduct and document a fingerprint-based criminal history check through the Federal Bureau of Investigation, you will be deemed to have satisfied the State criminal registry check requirement and do not need separate approval by the Corporation.
(b)*Name-based search.* If you conduct and document a name-based criminal history check through a source other than the FBI that, includes a check of the criminal records repository, in the State in which your program is operating, as well as in the State in which the individual lives, you will be deemed to have satisfied the State criminal registry check requirement and do not need separate approval by the Corporation.
(c)*Alternative search approval.* If you demonstrate that you are prohibited or otherwise precluded under State law from complying with a Corporation requirement relating to criminal history checks or that you can obtain substantially equivalent or better information through an alternative process, the Corporation will consider approving an alternative search protocol that you submit in writing to the Office of Grants Management. The Office of Grants Management will review the alternative protocol to ensure that it:
(1)Verifies the identity of the individual; and
(2)Includes a search of an alternative criminal database that is sufficient to identify the existence, or absence of, criminal offenses. § 2551.32 Is an individual who refuses to consent to a State criminal registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, eligible to serve in a covered position? An individual who refuses to consent to a State criminal registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, is not eligible to serve in a covered position. §§ 2551.42, 2551.43, 2551.44, 2551.45, and 2551.46 [Redesignated as §§ 2551.43, 2551.44, 2551.45, 2551.46, and 2551.47] 5. Amend subpart D of part 2551 by redesignating §§ 2551.42, 2551.43, 2551.44, 2551.45, 2551.46 as §§ 2551.43, 2551.44, 2551.45, 2551.46, 2551.47, respectively. 6. Add the following new section to subpart D: § 2551.42. § 2551.42 May an individual who is subject to a State sex offender registration requirement serve as a Senior Companion or as a Senior Companion grant-funded employee? Any individual who is registered, or who is required to be registered, on a State sex offender registry is deemed unsuitable for, and may not serve in, a position as a Senior Companion or as a Senior Companion grant-funded employee. PART 2552—FOSTER GRANDPARENT PROGRAM 1. The authority citation for part 2552 is revised to read as follows: Authority: 42 U.S.C. 4950 *et seq.* ; 42 U.S.C. 12651b-12651d; E.O. 13331, 69 FR 9911. Subpart C of Part 2552—[Amended] § 2552.31 [Redesignated as § 2552.34] 2. Amend subpart C by redesignating § 2552.31 as § 2552.34. Subpart B of Part 2552—[Amended] § 2552.26 [Redesignated as § 2552.33] 3. Amend subpart B of part 2552 by redesignating § 2552.26 as § 2552.33. 4. Add the following sections to subpart B: §§ 2552.26, 2552.27, 2552.28, 2552.29, 2552.30, 2552.31, and 2552.32. § 2552.26 To whom does this part apply? This part applies to Foster Grandparent Sponsors in determining the suitability of Foster Grandparents, as well as to Foster Grandparent grant-funded employees who, on a recurring basis, have access to children, persons age 60 and older, or individuals with disabilities. § 2552.27 What two search components of the National Service Criminal History Check must I satisfy to determine an individual's suitability to serve in a covered position? Unless the Corporation approves an alternative screening protocol, in selecting an individual as a Foster Grandparent or as a covered grant-funded employee, you are responsible for ensuring, unless prohibited by State law, that you conduct and document a National Service Criminal History Check, which consists of the following two search components:
(a)*State criminal registry search.* A search (by name or fingerprint) of the State criminal registry for the State in which the program operates and the State in which the individual resides at the time of application; and
(b)*National Sex Offender Public Registry.* A name-based search of the Department of Justice
(DOJ)National Sex Offender Public Registry (NSOPR). § 2552.28 When must I conduct a State criminal registry check and a NSOPR check on an individual in a covered position?
(a)The State criminal registry check must be conducted on an individual who enrolls in, or is hired by, your program after November 23, 2007.
(b)The NSOPR check must be conducted on an individual who is serving, or applies to serve, in a covered position on or after November 23, 2007. § 2552.29 What procedures must I follow in conducting a National Service Criminal History Check? You are responsible for ensuring that the following procedures are satisfied:
(a)Verify the individual's identity by examining the individual's government-issued photo identification card, such as a driver's license;
(b)Obtain prior, written authorization for the State criminal registry check and the appropriate sharing of the results of that check within the program from the individual (but not for the NSOPR check);
(c)Document the individual's understanding that selection into program is contingent upon the organization's review of the individual's criminal history, if any;
(d)Provide a reasonable opportunity for the individual to challenge the factual accuracy of a result before action is taken to exclude the individual from the position;
(e)Provide safeguards to ensure the confidentiality of any information relating to the criminal history check, consistent with authorization provided by the individual; and
(f)Ensure that an individual, for whom the results of a required State criminal registry check are pending, is not permitted to have access to children, persons age 60 and older, or individuals with disabilities without being accompanied by an authorized program representative who has previously been cleared for such access. § 2552.30 What documentation must I maintain regarding a National Service Criminal History Check? You must:
(a)Document in writing that you verified the identity of the individual in a covered position by examining the individual's government-issued photo identification card, and that you conducted the required checks for the covered position; and
(b)Maintain the results of the National Service Criminal History check (unless precluded by State law) and document in writing that you considered the results in selecting the individual. § 2552.31 Under what circumstances may I follow alternative procedures in conducting a State criminal registry check?
(a)*FBI fingerprint-based check.* If you or your designee conduct and document a fingerprint-based criminal history check through the Federal Bureau of Investigation, you will be deemed to have satisfied the State criminal registry check requirement and do not need separate approval by the Corporation.
(b)*Name-based search.* If you conduct and document a name-based criminal history check through a source other than the FBI that, includes a check of the criminal records repository, in the State in which your program is operating, as well as in the State in which the individual lives, you will be deemed to have satisfied the State criminal registry check requirement and do not need separate approval by the Corporation.
(c)*Alternative search approval.* If you demonstrate that you are prohibited or otherwise precluded under State law from complying with a Corporation requirement relating to criminal history checks or that you can obtain substantially equivalent or better information through an alternative process, the Corporation will consider approving an alternative search protocol that you submit in writing to the Office of Grants Management. The Office of Grants Management will review the alternative protocol to ensure that it:
(1)Verifies the identity of the individual; and
(2)Includes a search of an alternative criminal database that is sufficient to identify the existence, or absence of, criminal offenses. § 2552.32 Is an individual who refuses to consent to a State criminal registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, eligible to serve in a covered position? An individual who refuses to consent to a State criminal registry check, or who makes a false statement in connection with a grantee's inquiry concerning the individual's criminal history, is not eligible to serve in a covered position. §§ 2552.42, 2552.43, 2552.44, 2552.45, and 2552.46 [Redesignated as §§ 2552.43, 2552.44, 2552.45, 2552.46, and 2552.47] 5. Amend subpart D of part 2552 by redesignating §§ 2552.42, 2552.43, 2552.44, 2552.45, and 2552.46 as §§ 2552.43, 2552.44, 2552.45, 2552.46, and 2552.47, respectively. 6. Add adding the following new section to subpart D: § 2552.42. § 2552.42 May an individual who is subject to a State sex offender registration requirement serve as a Foster Grandparent or as a Foster Grandparent grant-funded employee? Any individual who is registered, or required to be registered, on a State sex offender registry is deemed unsuitable for, and may not serve in, a position as a Foster Grandparent or as a Foster Grandparent grant-funded employee. Dated: August 16, 2007. Frank R. Trinity, General Counsel. [FR Doc. E7-16681 Filed 8-23-07; 8:45 am] BILLING CODE 6050-28-P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Part 367 [Docket No. FMCSA-2007-27871] RIN 2126-AB09 Fees for Unified Carrier Registration Plan and Agreement AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Final rule. SUMMARY: This rule establishes initial fees for 2007 and a fee bracket structure for the Unified Carrier Registration Agreement. This action is required under the Uniform Carrier Registration Act of 2005, enacted as Subtitle C of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. EFFECTIVE DATE: August 24, 2007. FOR FURTHER INFORMATION CONTACT: Mr. David Miller, Regulatory Development Division,
(202)366-5370, or by e-mail at: FMCSAregs@dot.gov. Availability of Rulemaking Documents For access to the docket to read background documents and comments received, go to *http://dms.dot.gov* at any time or to U.S. Department of Transportation, Room W12-140, 1200 New Jersey Ave., SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: I. Legal Basis for the Rulemaking This rule involves the fees to be set for the Unified Carrier Registration Agreement established by 49 U.S.C. 14504a, enacted by section 4305(b) of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (119 Stat. 1144, 1764 (2005)). Section 14504a states that the “Unified Carrier Registration Plan * * * mean[s] the organization * * * responsible for developing, implementing, and administering the unified carrier registration agreement” (49 U.S.C. 14504a(a)(9)) (UCR Plan). The Unified Carrier Registration Agreement (UCR Agreement) developed by the UCR Plan is the “interstate agreement governing the collection and distribution of registration and financial responsibility information provided and fees paid by motor carriers, motor private carriers, brokers, freight forwarders and leasing companies * * *” (49 U.S.C. 14504a(a)(8)). Congress also repealed the statutory provisions of 49 U.S.C. 14504 governing the Single State Registration System
(SSRS)(SAFETEA-LU section 4305(a)). 1 The legislative history indicates that the purpose of the UCR Plan and Agreement is both to “replace the existing outdated system [SSRS]” for registration of interstate motor carrier entities with the States and to “ensure that States don't lose current revenues derived from SSRS” (S. Rep. 109-120, at 2 (2005)). 2 1 This repeal became effective on January 1, 2007, in accordance with section 4305(a). 2 The Senate bill's provisions were enacted “with modifications.” H. Conf. Rep. No. 109-203, at 1020 (2005). The statute provides for a 15-member Board of Directors for the UCR Plan and Agreement (Board) appointed by the Secretary of Transportation. The statute specified that the Board should consist of one individual (either the FMCSA Deputy Administrator or another Presidential appointee) from the Department of Transportation; four directors, including one from each of the four FMCSA service areas, selected from among the chief administrative officers of the State agencies responsible for administering the UCR Agreement; five directors from among the professional staffs of State agencies responsible for administering the UCR Agreement, to be nominated by the National Conference of State Transportation Specialists (NCSTS); and five directors representing the motor carrier industry, of whom at least one must be from a national trade association representing the general motor carrier of property industry and one from a motor carrier that falls within the smallest fleet fee bracket. The establishment of the Board was announced in the **Federal Register** on May 12, 2006 (71 FR 27777). Among its responsibilities, the Board was required to submit to the Secretary of Transportation 3 a recommendation for the initial annual fees to be assessed on motor carriers, motor private carriers, freight forwarders, brokers and leasing companies under the UCR Agreement (49 U.S.C. 14504a(d)(7)(A)). The FMCSA then was directed to set the fees within 90 days after receiving the Board's recommendation and after notice and opportunity for public comment (49 U.S.C. 14504a(d)(7)(B)). 3 The Secretary's functions under section 14504a have been delegated to the Administrator of the Federal Motor Carrier Safety Administration. 49 CFR 1.73(a)(7), as amended, 71 FR 30833 (May 31, 2006). II. Statutory Requirements for UCR Fees The statute specifies several relevant factors that must be considered by the Board and FMCSA in setting the fees (see 49 U.S.C. 14504a(d)(7)(A), (f)(1) and (g)). It specifies that fees are to be determined by FMCSA based upon the recommendation of the Board. The FMCSA described the statutory requirements in detail in a Notice of Proposed Rulemaking
(NPRM)published on May 29, 2007 (72 FR 29472). Section 14504a(f)(1) also stipulates that for the purpose of charging fees the Board shall develop no less than 4 and no more than 6 brackets of carriers based on the size of the fleet, i.e. the number of commercial motor vehicles owned or operated. Finally, the fee scale is required to be progressive in the amount of the fee. Overall, the fees assessed under the UCR Agreement must produce a level of revenues established by the statute. Section 14504a(g) establishes the revenue entitlements for States that choose to participate in the UCR Plan. That section provides that a participating State, which participated in the SSRS in the registration year prior to the enactment of the Unified Carrier Registration Act of 2005 (i.e., the 2004 registration year), is entitled to receive revenues under the UCR Agreement equivalent to the revenues it received in 2004. Participating States that collected intrastate registration fees from interstate motor carrier entities (whether or not they participated in SSRS) are entitled to receive revenues of this type under the UCR Agreement equivalent to the amount received in the 2004 registration year. The section also requires that States which did not participate in SSRS in 2004, but which choose to participate in the UCR Plan, will receive revenues not to exceed $500,000 per year. III. Background Following receipt by FMCSA of the Board's fee recommendation, a copy of which is included in the docket for this rulemaking, FMCSA conducted a review of the recommendation and prepared a detailed Regulatory Evaluation, also included in the docket. The FMCSA described the results of that review in the NPRM. The FMCSA carefully examined the Board's entire fee recommendation, including the methodology and specific findings of the Board. The FMCSA also independently considered the factors specified in section 14504a, and verified and utilized the data and analysis provided by the Board in its fee recommendation. In the NPRM, FMCSA provided a detailed description of its examination of the Board's recommendation and announced its conclusion that the Board's recommendation was reasonable and that the Board considered all required factors. The FMCSA also described the basis for its conclusion that the Board had satisfied the requirements for establishing the fees to be charged under the Unified Carrier Registration Agreement. The Board has provided an adequate opportunity for all States to participate in the UCR Plan and Agreement for registration year 2007 and the Board had adequately calculated the total revenue to be collected under the UCR. In a correction of the NPRM published on June 5, 2007 (72 FR 31048), FMCSA explained that the comment period for the proposed rulemaking was limited to fifteen days because of the very short time period set by section 14504a(d)(7)(B) for completion of the rulemaking. The FMCSA also provided corrections to its May 29, 2007, NPRM, none of which materially affected the proposed rule, and provided notice concerning the new address for the Department of Transportation. IV. Discussion of Comments to the NPRM FMCSA received 17 comments, including comments from commercial motor carriers, the Commercial Vehicle Safety Alliance (CVSA), the California Trucking Association (CTA), the National School Transportation Association (NSTA), the Transportation Intermediaries Association (TIA), an attorney representing an interstate transportation carrier, an interstate property and household goods broker, private individuals, the North Dakota Department of Transportation (NDDOT), and three State public service commissions. After reviewing and evaluating the comments, as described below, FMCSA has concluded that no revisions are necessary to the annual fees and bracket structure for the Unified Carrier Registration Agreement that were specified in the NPRM. The FMCSA, therefore, is adopting those annual fees and the bracket structure in this Final Rule. Two of the public service commissions (Alabama and Michigan), TIA, and CVSA supported the proposed fee structure and urged FMCSA to expedite promulgation of the final rule. The other commenters suggested changes to the fees or bracket structure or made other recommendations regarding UCR. CTA, the attorney to the interstate carrier, and four private individuals questioned the fairness of the fee structure, calling attention to disparities between smaller and larger carriers. Their recommendations for addressing the issue included adding another bracket to the fee structure to divide carriers with more than 20 and less than 50 vehicles and assessing the fee on a per-truck basis. One commenter argued that the last bracket represents too significant an increase in fees for carriers operating just over 1,000 units when compared to carriers operating 1,000 units. Another stated that the fee schedules penalized carriers with fewer than 100 vehicles for being small because they were required to pay “substantially more” than large carriers. NDDOT believes the Board needs the flexibility to be able to make reasonable adjustments to the fees if the revenue goals cannot be reached, without going through the rulemaking amendment process every year. NDDOT argues the Board should be allowed to adjust the fee schedule for the first three years with a modified rule amendment process so as not to hinder the timeliness of states' keeping the program operating efficiently. However, the statutory requirements for the UCR fee structure, the statutory limitation of the number of brackets to a maximum of six in 49 U.S.C. 14504a(f)(1), and the statutory process for adjusting the amount of the fees in subsequent years preclude FMCSA from adopting the actions these commenters advocate. The statute does not grant either the Board or FMCSA the latitude to set fees on a per-vehicle basis, to add more brackets, or to adjust the fee schedule without complying with section 14504a(d)(7)(B) and the Administrative Procedure Act (5 U.S.C. 551 et seq.). FMCSA has ensured that the fee scale is progressive across the brackets, in that the fees per carrier increase as the size of the carrier increases. The statute only requires that the “fee scale shall be progressive in the amount of the fee.” 49 U.S.C. 14504a(f)(1)(D). The fee scale is clearly “progressive” in this sense, because the fee scale increases with each bracket containing a larger range of commercial motor vehicles for the motor carrier entities included. Moreover, the statute also requires that the fees be applied uniformly to entities in each bracket “based on the size of the fleet.” 49 U.S.C. 14504a(f)(1)(C). For particular entities, the fee may or may not be progressive as compared to a carrier in another bracket that is close in size, or that has almost the same number of commercial motor vehicles in its fleet, but that is an expected result of a fee scale based on applying uniform fees to entities with a range of fleet sizes. Another commenter, TIA, expressed agreement with the findings of the Board concerning the size of the industry and supported the adoption of the maximum number of fee levels and the proposed breakdown within each level. TIA found the proposed fee levels “fair, equitable, and proportional.” TIA did, however, request clarification on two fee-related topics. It asked, first, that freight forwarders that are not part of a trucking company pay at the same level as brokers and leasing companies. It also noted what it considered a conflict between the definition of freight forwarder in section 14504a and the definition in 49 U.S.C. 13102(8), and urged that freight forwarders that are not part of trucking companies should register in the same category as brokers and leasing companies. The FMCSA has determined there is no conflict. Freight forwarders that operate commercial motor vehicles in line-haul service to transport consolidated shipments in interstate commerce are required to register as motor carriers, and are treated as such under the UCR Plan. 49 U.S.C. 13903(b). Freight forwarders that operate motor vehicles providing transfer, collection and delivery service are required to file proof of financial responsibility with FMCSA by 49 U.S.C. 13906(c)(1). Freight forwarders operating commercial motor vehicles in such local service “shall be subject to the provisions of [section 14504a] as if the freight forwarder is a motor carrier.” 49 U.S.C. 14504a(b). Therefore, all freight forwarders that operate commercial motor vehicles are subject to fees under the UCR Plan and Agreement in accordance with the number of such vehicles operated. If a freight forwarder operates no such vehicles, it is subject to the fee set for the lowest bracket. See also 49 U.S.C. 14504a(f)(1)(A)(i). This is the interpretation of the statute utilized by the Board and FMCSA in determining the fees, because any freight forwarder that also had a USDOT number (only issued to operators of commercial motor vehicles) was treated as a motor carrier. TIA also requested a clarification on whether fees are cumulative or a company should pay only once at the highest applicable rate, noting that a company could have motor carrier authority, broker authority, and freight forwarder authority. TIA recommended adoption of the highest applicable fee approach rather than the cumulative fee approach. FMCSA and the Board both adopted the highest applicable fee approach in their analyses. The FMCSA notes that the commenters, in discussing the brackets and fee structure, consistently referred to trucks, vehicles, and/or power units rather than to commercial motor vehicles, the term used in the proposed and final rules. The statute defines “commercial motor vehicle,” in general, as including both self-propelled and towed vehicles (49 U.S.C. 14504a(a)(1)(A) and 31101(1)). Both self-propelled and towed vehicles should be considered in deciding the appropriate bracket for determining the fee to be paid by a motor carrier, motor private carrier, or freight forwarder. A commercial carrier argued that the proposed fee structure ignored the fact that some motor carriers do not have traffic in every participating State and that vehicles without extensive interstate operations are included in determining brackets and fees. An individual commenter also asserted that the Board's calculation of fees had included commercial motor vehicles that operate only in intrastate commerce. If such vehicles did leave the State, according to this commenter, they would be required to purchase a Trip Permit, and thus would be charged out-of-State fees twice. The FMCSA notes, however, that section 14504a does not allow either the Board or FMCSA to adjust the fees to account for the extent of interstate operations. The statute requires that interstate carriers of the same size be assessed the same fees regardless of the number of States in which they operate. After considering these comments in light of the statute, FMCSA determined that the proposed fee structure adequately accounts for equity concerns within the statute's constraints. The NSTA noted what it perceived to be a conflict between the possibility under the UCR Plan that private interstate school bus carriers that register with DOT and obtain a USDOT number will be required to pay the UCR fees in spite of the provisions of 49 U.S.C. 13506(a)(1) from the ICC Termination Act of 1995 (Pub. L. 104-88, title I, Sec. 103, Dec. 29, 1995, 109 Stat. 861) that exempt such carriers from registration requirements for school bus carriers under the proposed Unified Registration System (URS). One individual asked for clarification on whether farmers and ranchers are considered private carriers under UCR. For the purpose of the UCR agreement, the statutory definition of “motor carrier,” as modified by 49 U.S.C. 14504a(a)(5) includes for-hire carriers that are otherwise exempt such as farmers, ranchers and school bus operators because they are now subject to the fees in connection with the filing of proof of financial responsibility under the UCR agreement. In addition, motor private carriers that meet the applicable statutory definition in 49 U.S.C. 13102(15) are subject to the fees in connection with the filing of proof of financial responsibility under the UCR agreement. This is the interpretation of section 14504a followed by the Board and FMCSA in recommending and setting the fees. Some commenters addressed implementation of the UCR fee system. TIA argued that an unreasonable burden could be placed on small businesses and on interstate commerce if companies are required to register in person at their base State. Instead, TIA asked for the creation of a national registration interface through which companies could pay by credit card. Another suggested that the fees should be collected along with the heavy-duty vehicle tax. TIA and the NDDOT expressed support for the Board's decision to set aside funds to pay various administrative costs, including development of a web-based registration and payment system, communications, credit card processing fees, operation of a depository, and Board travel and expenses and staffing of a help desk, as well as a set-aside to cover the risk of under collection of revenue. TIA noted that additional amounts could be needed for information technology and communications. TIA also noted that the Board may not have the necessary funds to pay administrative costs until fees are collected. NDDOT suggested that rule language be added stipulating that administrative costs can only be paid after participating States are made whole. Because section 14504a assigned implementation of the UCR Agreement to the Board, FMCSA has concluded that the comments pertaining to the method adopted for registration, and the mechanisms for fee collection and distribution are outside the scope of this rulemaking and should be directed to the Board. FMCSA will provide the Board with a copy of all comments received. In addition, FMCSA will place a document outlining the UCR Board's mechanisms for fee collection and distribution in docket FMCSA-2007-27871. This document will be updated as information becomes available from the UCR Board. The public may consult the Board or the docket for up to date information about the mechanisms for fee collection and distribution. The FMCSA reviewed the estimated administrative costs as part of the analysis described in the May 29, 2007, NPRM and concluded that they were reasonable. As TIA points out, however, once the new system has developed a “proven track record,” estimates of the amounts needed for administration may change. The NDDOT commented that it is not concerned about the number of leasing companies in calculating the affected population or the revenues from the leasing companies. NDDOT estimates the number is less than 2,600 and the revenues will be about $101,000. NDDOT believes this amount is less than one tenth of one percent of the total UCR revenues. FMCSA agrees with NDDOT. The Michigan Public Service Commission
(MPSC)suggested that if for some reason the program cannot be implemented in 2007, FMCSA should allow States to collect both 2007 and 2008 revenue simultaneously. In addition to being outside the scope of this rulemaking, FMCSA believes that this approach would be contrary to the terms of section 14504a. MPSC also recommended that credit card fees for revenue collected on line should not be deducted from the total due to States. The revenue target for 2007 is composed of State revenue entitlement, administrative expenses, and revenue reserve. The credit card operating expense is a component of the administrative cost and is separate from the State revenue entitlement. Thus, including credit card expenses in the revenue target does not affect the State revenue entitlement, (see 49 U.S.C. 14504a(h)) and FMCSA has concluded that the MPSC concern is unwarranted. CVSA encouraged FMCSA to consider making a loan to the Board to support the development of the infrastructure necessary to register the carriers and collect and to deposit the fees in an efficient manner. Although FMCSA takes note of the suggestion, it has concluded that the comment is outside the scope of this rulemaking. CVSA also encouraged FMCSA to use the opportunity presented through UCR to consolidate the regulations, requirements, and information systems relative to operation authority, registration, and licensing/insurance. The FMCSA has concluded this comment is outside the scope of this rulemaking. TIA asked that the UCR should not become a new system to regulate brokers and freight forwarders by the States, noting that section 14504a(f)(1)(A) refers to UCR fees charged “in connection with the filing of proof of financial responsibility under the UCR Agreement.” TIA requested FMCSA to limit specifically any reporting or enforcement of proof of financial responsibility by brokers and freight forwarders to their required filings with the Department of Transportation. However, as discussed above under “II. Statutory Requirements for UCR Fees,” the fees charged to the various entities are required to be in connection with the requirement in 49 U.S.C. 14504a(f)(1)(A). Not all of the entities included in the five categories are currently required to file financial responsibility information with FMCSA. The Board has authority to issue rules and regulations to govern the UCR Agreement, and to require annual submission of a set of information required of a motor carrier, motor private carrier, leasing company, broker, or freight forwarder (49 U.S.C. 14504a(d)(2)(A)(i)). FMCSA expects that the Board will establish requirements for filing of financial responsibility information as necessary to subject all entities in all five categories to the UCR fees, and to ensure that the required revenue levels will be achieved. Similarly, FMCSA notes TIA's request that DOT and the Board work together to ensure that participating States provide usable safety and enforcement data to DOT's reporting systems, but finds the comment outside the scope of this rule. One commenter recommended that the State revenue requirements increase over time to reflect growing needs. Another commenter noted that impacts on small entities could become a problem if fees increase over time. Capping UCR revenues at 2004 levels, according to the commenter, is not viable in the long term. The FMCSA notes in response that section 14504a provides that fees under UCR are to be established on a yearly basis. Therefore, fees for future years will be the subject of subsequent rulemaking, if and when the Board asks for an adjustment in the fees in accordance with section 14504a(f)(1)(E). On the other hand, the revenues to be derived from the fees were fixed by Congress as of 2004 by section 14504a(g). The only variation would occur because of changes in the participating States under section 14504a(e) or Congressional action. The Pennsylvania Public Utility Commission (PaPUC), contends that Pennsylvania, which did not participate in SSRS, may be prohibited from collecting assessments from intra-state revenues of motor carriers to support its motor carrier safety enforcement program. PaPUC interprets 49 U.S.C. 14504a(c) of the UCR Act as potentially preempting such assessments. The FMCSA believes that this issue involves a legal interpretation of the preemption provisions of section 14504a(c); and, therefore, is outside the scope of this rulemaking. PaPUC, supported by CVSA, then requests that the UCR program fee schedule provide a mechanism to make it whole. However, Pennsylvania has not complied with 49 U.S.C. 14504a(e), is therefore not a participating State in the UCR agreement, and is not entitled to any revenues under 49 U.S.C. 14504a(g)(2) and (3). An interstate property and household goods broker noted that some States currently do not recognize the Federal broker license issued by FMCSA and do not issue intrastate broker licenses. This commenter asked FMCSA to preempt State law and to secure agreements from States participating in the UCR that they will acknowledge broker's rights to arrange for transportation without the need for intrastate motor carrier authority. The FMCSA has concluded that this comment requests actions that are outside the scope of this rulemaking. V. The Final Rule The FMCSA is adopting the proposed rule as final without any changes. In addition, the FMCSA has verified that the Board has accurately reflected in its recommendations the revenue entitlements certified by each State for 2007. In accordance with 49 U.S.C. 14504a(g)(4), FMCSA proposed in the NPRM to approve the amount of revenue under the UCR Agreement to which each State participating in 2007 is entitled. FMCSA received no comment on this aspect of the proposal. FMCSA, is, therefore, approving the amount of revenue under the UCR Agreement to which each State participating in 2007 is entitled, as specified in the following table 1. Table 1.—2007 State UCR Revenue Entitlements State Total 2007 UCR revenue entitlements Alabama $2,939,964.00 Arkansas 1,817,360.00 Colorado 1,817,215.00 Connecticut 3,129,840.00 Georgia 2,660,060.00 Idaho 547,696.68 Illinois 3,516,993.00 Indiana 2,364,879.00 Iowa 474,742.00 Kansas 4,344,290.00 Kentucky 5,365,980.00 Louisiana 5,992,820.00 Maine 1,555,672.00 Massachusetts 2,282,887.00 Michigan 7,520,717.00 Minnesota 1,137,132.30 Missouri 2,342,000.00 Mississippi 4,322,100.00 Montana 1,049,063.00 Nebraska 741,974.00 New Hampshire 2,273,299.00 New Mexico 3,292,233.00 New York 4,414,538.00 North Dakota 2,010,434.00 Ohio 4,813,877.74 Oklahoma 2,457,796.00 Rhode Island 2,285,486.00 South Carolina 2,420,120.00 South Dakota 855,623.00 Tennessee 4,759,329.00 Texas 2,718,628.06 Utah 2,098,408.00 Virginia 4,852,865.00 Washington 2,467,971.00 West Virginia 1,431,727.03 Wisconsin 2,196,680.00 Total 101,272,399.81 Oregon 500,000 Total State Entitlement—2007 101,772,399.81 Regulatory Analyses and Notices Administrative Procedure Act The Administrative Procedure Act's rulemaking provision in subsection (d)(3) of 5 U.S.C. 553 allows FMCSA to make a final rule effective on its publication date for good cause. Congress expected the Board to make recommendations and the Agency to set the fees through this final rule well before January 1, 2007. The Board experienced delays Congress had not envisioned in promulgating 49 U.S.C. 14504a. Making this final rule effective on the date of publication will not cause harm to any person or regulated entity. No commenter opposed the proposal and the fees are required by statute. Due to the exhaustive efforts of the Board in developing the recommendations and the amount of time needed, the States participating in the UCR have been losing current revenues they would have been deriving from SSRS to offset expenses involved in administering their enforcement and compliance of State motor carrier laws and regulations. Michigan and Alabama authorities made these points in their comments in the docket. These States and the others in the UCR may have to lay off State employees and curtail enforcement and compliance efforts if the States cannot collect 2007 revenue. Congress intends section 14504a to “ensure that States don't lose current revenues derived from SSRS” (S. Rep. 109-120, at 2 (2005)). This intent remains unfulfilled as long as this final rule setting the fees is not effective. FMCSA finds that it is necessary to make this final rule effective immediately upon publication to reduce the serious dislocation of State government programs and reduce or avoid imminent harm to State employees and the traveling public in the UCR States that may have to, or have had to, curtail their compliance and enforcement efforts. Executive Order 12866 (Regulatory Planning and Review) and DOT Regulatory Policies and Procedures The FMCSA has determined that this action is a significant regulatory action within the meaning of Executive Order 12866 due to its subject matter and the impact on the participating States. However, this rule is not economically significant based on the size of the fees to be collected under the UCR. The costs of the rule are required pursuant to an explicit Congressional mandate in section 14504a. Because a majority of the fees under the rule will replace fees motor carriers paid under the SSRS system, the total cost of the rule will be substantially less than $100 million per year. New entities paying fees under UCR that did not pay under SSRS are estimated to account for slightly less than half the fees, or about $50 million in new costs per year. The Agency has prepared a regulatory analysis analyzing the rule. A copy of the regulatory analysis document is included in the docket referenced at the beginning of this notice. The Office of Management and Budget
(OMB)has reviewed this document. Regulatory Flexibility Act In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-612), FMCSA considered the effects of this regulatory action on small entities and determined that this rule will affect a substantial number of small entities, as defined by the U.S. Small Business Administration's Office of Size Standards. Accordingly, FMCSA has considered the economic impacts of the requirements on small entities and determines that this rule will not have a significant economic impact on a substantial number of small entities. The fees adopted in this rule would affect large numbers of small entities because the rule sets fees for hundreds of thousands of carriers, brokers, and freight forwarders of all sizes, and small entities are defined to include all entities that are not dominant in their industries. In previous rulemakings, FMCSA identified for-hire carriers with fewer than 145 power units (i.e., trucks or tractors) as small. The FMCSA estimates that carrier size to be equivalent to a carrier operating about 300 commercial motor vehicles. Thus, all of the for-hire carriers in Brackets 1 through 4 would be considered small, as would many of those in Bracket 5. After careful consideration, however, FMCSA has determined that the UCR fee will, in every case involving a viable small entity, be well below the threshold level of one percent of revenues used for determining significant impacts. This conclusion is based on the observation that the maximum fee per vehicle is $39, which is less than one percent of the annual salary of even a single employee working 40 hours per week for 50 weeks per year and earning the current Federal minimum wage of $5.85. Because an entity without sufficient revenues to pay even one employee per vehicle or per broker or freight-forwarder operation would not be viable, it is clear that the UCR fees will not reach the threshold of one percent of revenues. Additionally, more than 50 percent of the fees collected under the new UCR system were already being paid by many of these entities under the SSRS system, meaning the UCR fees will simply serve as substitutes for the SSRS fees these firms were previously being assessed. Thus, the FMCSA Administrator certifies that the rule will not have a significant economic impact on a substantial number of small entities. Unfunded Mandates Reform Act of 1995 This rulemaking will not impose an unfunded Federal mandate, as defined by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532, *et seq.* ), that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $128.1 million or more in any one year. Executive Order 12988 (Civil Justice Reform) This action will meet 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. Executive Order 13045 (Protection of Children) The FMCSA analyzed this action under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. We determined that this rulemaking would not concern an environmental risk to health or safety that may disproportionately affect children. Executive Order 12630 (Taking of Private Property) This rulemaking does not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Executive Order 13132 (Federalism) The FMCSA analyzed this rule in accordance with the principles and criteria contained in Executive Order 13132. FMCSA has determined that this rulemaking will not have a substantial direct effect on States, nor will it limit the policy-making discretion of the States. Nothing in this document will preempt any State law or regulation. The FMCSA has therefore determined this rule does not have sufficient federalism implications to warrant the preparation of a federalism assessment. Executive Order 12372 (Intergovernmental Review) The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program. Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that FMCSA consider the impact of paperwork and other information collection burdens imposed on the public. We have determined that there are no new information collection requirements associated with this final rule. National Environmental Policy Act The FMCSA analyzed this final rule for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 *et seq.* ) and determined under our environmental procedures Order 5610.1, issued March 1, 2004 (69 FR 9680), that this action is categorically excluded
(CE)under Appendix 2, paragraph 6.h of the Order from further environmental documentation. In addition, the Agency believes that this action includes no extraordinary circumstances that will have any effect on the quality of the environment. Thus, the action does not require an environmental assessment or an environmental impact statement. The FMCSA also analyzed this rule under the Clean Air Act, as amended (CAA), section 176(c) (42 U.S.C. 7401 *et seq.* ), and implementing regulations promulgated by the Environmental Protection Agency. Approval of this action is exempt from the CAA's general conformity requirement since it involves policy development. Executive Order 13211 (Energy Effects) The FMCSA analyzed this action under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We determined that it is not a “significant energy action” under that Executive Order because it will not be likely to have a significant adverse effect on the supply, distribution, or use. List of Subjects in 49 CFR Part 367 Commercial motor vehicle, Financial responsibility, Motor carriers, Motor vehicle safety, Registration, Reporting and recordkeeping requirements. In consideration of the foregoing, FMCSA amends title 49, Code of Federal Regulations, part 367, as follows: PART 367—STANDARDS FOR REGISTRATION WITH STATES 1. The authority citation for part 367 is revised to read as follows: Authority: 49 U.S.C. 13301, 14504, 14504a; and 49 CFR 1.73. 2. Add a new Subpart A heading preceding § 367.1 to read as follows: Subpart A—Single State Registration System Appendix A [Amended] 3. Amend the heading of Appendix A to part 367 by removing the phrase “Part 367” and adding in its place “Subpart A”. 4. Add a new Subpart B to read as follows: Subpart B—Fees Under the Unified Carrier Registration Plan and Agreement § 367.20 Fees under the Unified Carrier Registration Plan and Agreement for Registration Year 2007. Fees Under the Unified Carrier Registration Plan and Agreement for Registration Year 2007 Bracket Number of commercial motor vehicles owned or operated by exempt or non-exempt motor carrier, motor private carrier, or freight forwarder Fee per company for exempt or non-exempt motor carrier, motor private carrier, or freight forwarder Fee per company for broker or leasing company B1 0-2 $39 $39 B2 3-5 116 B3 6-20 231 B4 21-100 806 B5 101-1,000 3,840 B6 1,001 and above 37,500 Issued on: August 15, 2007. John H. Hill, Administrator. [FR Doc. E7-16482 Filed 8-23-07; 8:45 am] BILLING CODE 4910-EX-P 72 164 Friday, August 24, 2007 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-29045; Directorate Identifier 2007-NM-048-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 767-200, -300, and -400ER Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for certain Boeing Model 767-200, -300, and -400ER series airplanes. This proposed AD would require installing new relay(s) and wiring to allow the flightcrew to turn off electrical power to the in-flight entertainment
(IFE)systems and certain circuit breakers through a utility bus switch, and doing other specified actions. This proposed AD results from an IFE systems review. We are proposing this AD to ensure that the flightcrew is able to turn off electrical power to IFE systems and other non-essential electrical systems through a switch in the flight compartment. The flightcrew's inability to turn off power to IFE systems 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: We must receive comments on this proposed AD by October 9, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: 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: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-29045; Directorate Identifier 2007-NM-048-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov* . Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion The Federal Aviation Administration
(FAA)completed a review of in-flight entertainment
(IFE)systems on transport category airplanes. The review focused on the interface between the IFE system and airplane electrical system, with the objective of determining if any unsafe conditions exist with regard to the interface. The type of IFE systems considered for review were those that contain video monitors (cathode ray tubes or liquid crystal displays, either hanging above the aisle or mounted on individual seat backs or seat trays), or complex circuitry ( *i.e.* , power supplies, electronic distribution boxes, extensive wire routing, relatively high power consumption, multiple layers of circuit protection, etc.). In addition, in-seat power supply systems that provide power to more than 20 percent of the total passenger seats were also considered for the review. The types of IFE systems not considered for review include systems that provide only audio signals to each passenger seat, ordinary in-flight telephone systems ( *e.g.* , one telephone handset per group of seats or bulkhead-mounted telephones), systems that have only a video monitor on the forward bulkhead(s) (or a projection system) to provide passengers with basic airplane and flight information, and in-seat power supply systems that provide power to less than 20 percent of the total passenger seats. Items considered during the review include the following: • Can the electrical bus(es) supplying power to the IFE system be de-energized when necessary without removing power from systems that might be required for continued safe flight and landing? • Can IFE system power be removed when required without pulling IFE system circuit breakers (i.e., is there a switch (dedicated to the IFE system or a combination of loads) located in the flight deck or cabin that can be used to remove IFE power?)? • If the IFE system requires changes to flightcrew procedures, has the airplane flight manual
(AFM)been properly amended? • If the IFE system requires changes to cabin crew procedures, have they been properly amended? • Does the IFE system require periodic or special maintenance? In all, we reviewed approximately 180 IFE systems. The review results indicate that potential unsafe conditions exist on some IFE systems installed on various transport category airplanes. These conditions can be summarized as: • Electrical bus(es) supplying power to the IFE system cannot be de-energized when necessary without removing power from systems that might be required for continued safe flight and landing. • Power cannot be removed from the IFE system when required without pulling IFE system circuit breakers (i.e., there is no switch dedicated to the IFE system or combination of systems for the purpose of removing power). • Installation of the IFE system has affected crew (flightcrew and/or cabin crew) procedures, but the procedures have not been properly revised. Boeing has received numerous reports of smoke or flames in the passenger cabin of Model 767-200, -300, and -400ER series airplanes. Investigation revealed that the source of the smoke and flames was the wiring for non-essential equipment in the passenger cabin. Currently, the flightcrew is not able to turn off power to the IFE system and other non-essential passenger cabin systems through utility bus switches in the flight compartment, in the event of smoke or fumes. The flightcrew's inability to turn off electrical power to the IFE system and other non-essential passenger cabin systems, if not corrected, could result in the inability to control smoke or fumes in the airplane flight deck or passenger cabin during a non-normal or emergency situation. Relevant Service Information We have reviewed Boeing Service Bulletin 767-24-0147, dated February 20, 2003, for Model 767-400ER series airplanes. This service bulletin describes procedures for installing a new relay and wiring to allow the flightcrew to turn off electrical power to the IFE systems and certain circuit breakers through the left utility bus switch and doing other specified actions. The other specified actions include installing a terminal module in the P87 panel, rerouting certain wires, and testing the electrical power for the video system. We have also reviewed Boeing Service Bulletin 767-24-0148, dated September 14, 2006; Boeing Service Bulletin 767-24-0149, dated September 14, 2006; Boeing Service Bulletin 767-24-0150, dated September 21, 2006; and Boeing Service Bulletin 767-24-0151, dated September 14, 2006; for Model 767-300 series airplanes. These service bulletins describe procedures for installing new relay(s) and wiring to allow the flightcrew to turn off electrical power to the IFE system and the IFE video and audio circuit breakers through the right utility bus switch and doing other specified actions. The other specified actions include removing certain wire(s), rerouting certain wires, and testing the passenger IFE and video systems. We have also reviewed Boeing Service Bulletin 767-24-0152, dated September 29, 2006; and Boeing Service Bulletin 767-24-0153, dated September 29, 2006; for Model 767-200 and -300 series airplanes. These service bulletins describe procedures for installing new relays and wiring to allow the flightcrew to turn off electrical power to the IFE system and the IFE video and audio circuit breakers through the right utility bus switch and doing other specified actions. The other specified actions include replacing the electrical system control panel with a new or modified control panel, installing a terminal module, removing certain wires, rerouting certain wires, and testing the passenger IFE and video systems. We have also reviewed Boeing Service Bulletin 767-24-0154, dated September 26, 2002, for Model 767-200 and -300 series airplanes. This service bulletin describes procedures for installing a new relay and wiring to allow the flightcrew to turn off electrical power to the IFE systems and certain circuit breakers through the right utility bus switch and doing other specified actions. The other specified actions include installing a terminal module in the P101 panel, rerouting certain wires, and testing the electrical power for the video system. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously, except as discussed under “Difference Between the Proposed AD and Certain Service Bulletins.” Difference Between the Proposed AD and Certain Service Bulletins Boeing Service Bulletins 767-24-0147 and 767-24-0154 do not recommend a compliance time for installing the new relays and wiring. In developing an appropriate compliance time for accomplishing the actions in that service bulletin, we considered the degree of urgency associated with the subject unsafe condition, the average utilization of the affected fleet, and the time necessary to perform the installation (10 hours). We also considered the recommended compliance time in other service bulletins that describe accomplishing similar actions on Model 767-200 and -300 series airplanes. In light of all of these factors, we find that a 60-month compliance time represents an appropriate amount of time for affected airplanes to continue to operate without compromising safety. This difference has been coordinated with Boeing. Costs of Compliance There are about 316 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs, at an average labor rate of $80 per hour, for U.S. operators to comply with this proposed AD. Estimated Costs Model Boeing Service Bulletin Work hours Parts Cost per airplane Number of U.S.- registered airplanes U.S. fleet cost 767-400ER series airplanes 767-24-0147 10 $995 $1,795 2 $3,590 767-300 series airplanes 767-24-0148 Up to 59 Up to $5,079 Up to $9,799 0 0 767-300 series airplanes 767-24-0149 49 $4,077 $7,997 7 55,979 767-300 series airplanes 767-24-0150 42 $5,812 $9,172 1 9,172 767-300 series airplanes 767-24-0151 Up to 42 Up to $10,047 Up to $13,407 0 0 767-200 and -300 series airplanes 767-24-0152 42 $12,280 $15,640 86 1,345,040 767-200 and -300 series airplanes 767-24-0153 42 $7,751 $11,111 5 55,555 767-200 and -300 series airplanes 767-24-0154 9 $1,257 $1,977 10 19,770 Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-29045; Directorate Identifier 2007-NM-048-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by October 9, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to the airplanes identified in paragraphs (c)(1), (c)(2), and (c)(3) of this AD, certificated in any category.
(1)Boeing Model 767-200 and -300 series airplanes, as identified in Boeing Service Bulletin 767-24-0152, dated September 29, 2006; Boeing Service Bulletin 767-24-0153, dated September 29, 2006; and Boeing Service Bulletin 767-24-0154, dated September 26, 2002.
(2)Boeing Model 767-300 series airplanes, as identified in Boeing Service Bulletin 767-24-0148, dated September 14, 2006; Boeing Service Bulletin 767-24-0149, dated September 14, 2006; Boeing Service Bulletin 767-24-0150, dated September 21, 2006; and Boeing Service Bulletin 767-24-0151, dated September 14, 2006.
(3)Boeing Model 767-400ER series airplanes, as identified in Boeing Service Bulletin 767-24-0147, dated February 20, 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 IFE systems and other non-essential electrical systems through a switch in the flight compartment. The flightcrew's inability to turn off power to IFE systems 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. Installing New Relays on Certain Model 767-200 and -300 Series Airplanes
(f)For the airplanes identified in paragraph (c)(1) of this AD: Within 60 months after the effective date of this AD, install new relays and wiring to allow the flightcrew to turn off electrical power to the IFE system and certain circuit breakers through the right utility bus switch and do all other specified actions, by accomplishing all of the applicable actions specified in the Accomplishment Instructions of Boeing Service Bulletin 767-24-0152, dated September 29, 2006; Boeing Service Bulletin 767-24-0153, dated September 29, 2006; and Boeing Service Bulletin 767-24-0154, dated September 26, 2002; as applicable. The other specified actions must be done before further flight after installing the new relays and wiring. Installing New Relays on Certain Model 767-300 Series Airplanes
(g)For the airplanes identified in paragraph (c)(2) of this AD: Within 60 months after the effective date of this AD, install new relay(s) and wiring to allow the flightcrew to turn off electrical power to the IFE system and the IFE video and audio circuit breakers through the right utility bus switch and do all other specified actions as applicable, by accomplishing all of the applicable actions specified in the Accomplishment Instructions of Boeing Service Bulletin 767-24-0148, dated September 14, 2006; Boeing Service Bulletin 767-24-0149, dated September 14, 2006; Boeing Service Bulletin 767-24-0150, dated September 21, 2006; and Boeing Service Bulletin 767-24-0151, dated September 14, 2006; as applicable. The other specified actions must be done before further flight after installing the new relay(s) and wiring. Installing New Relays on Certain Model 767-400ER Series Airplanes
(h)For the airplanes identified in paragraph (c)(3) of this AD: Within 60 months after the effective date of this AD, install a new relay and wiring to allow the flightcrew to turn off electrical power to some of the IFE systems and certain circuit breakers through the left utility bus switch and do all other specified actions, by accomplishing all of the actions specified in the Accomplishment Instructions of Boeing Service Bulletin 767-24-0147, dated February 20, 2003. The other specified actions must be done before further flight after installing the new relay and wiring. 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. Issued in Renton, Washington, on August 14, 2007. Stephen P. Boyd, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-16661 Filed 8-23-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-29031; Directorate Identifier 2007-NM-130-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-600, -700, -700C, -800, and -900 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for certain Boeing Model 737-600, -700, -700C, -800, and -900 series airplanes. This proposed AD would require repetitive inspections of either the aft side or forward side of the aft pressure bulkhead for oil can conditions or bulges, a one-time inspection of the aft pressure bulkhead to identify any previously installed web repair, and corrective actions if necessary. This proposed AD results from web oil can conditions found on the aft pressure bulkhead of several airplanes. We are proposing this AD to detect and correct oil can conditions, bulges, or previous repairs in the aft pressure bulkhead, which could lead to web cracks and consequently result in rapid decompression of the airplane. DATES: We must receive comments on this proposed AD by October 9, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Howard Hall, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)917-6430; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-29031; Directorate Identifier 2007-NM-130-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground floor of the West Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the Docket Management System receives them. Discussion We have received a report indicating that “oil cans” or “bulges” have been found on the aft pressure bulkhead web of several Boeing Model 737-600, -700, -700C, -800, and -900 series airplanes. (An oil can is defined as an area on the pressure dome web that has visibly deviated forward from the initial contour of the pressured dome web. A bulge is defined as an area on the pressure dome web that has visibly deviated aft from the initial contour of the pressure dome web.) Oil can conditions or bulges in the aft pressure bulkhead, if not corrected, could lead to web cracks and consequently result in rapid decompression of the airplane. In addition, some operators may have previously repaired an oil can condition in accordance with the Boeing 737-600/700/700C/800/900 Structural Repair Manuals (SRMs). The latest revision of the SRM currently requires accomplishing an initial nondestructive testing
(NDT)inspection of the repair and incorporating repetitive supplemental inspections of the repair into the airplane's maintenance program. Repair procedures in earlier revisions of the SRMs did not specify doing an initial NDT inspection and/or repetitive supplemental inspections. If the initial NDT inspection and repetitive supplemental inspections of the repair are not accomplished, web cracks could also develop and consequently result in loss of cabin pressurization. Relevant Service Information We have reviewed Boeing Alert Service Bulletin 737-53A1253, dated May 18, 2007. The service bulletin describes procedures for doing repetitive general visual inspections of either the aft side or forward side of the aft pressure bulkhead for oil can conditions or bulges, a one-time general visual inspection of the aft pressure bulkhead to identify any previously installed web repair, and corrective actions as applicable. The corrective actions include: • If the oil can condition is within a certain limit,
(1)doing repetitive inspections of aft pressure bulkhead for web cracks until an oil can condition is repaired, or
(2)before further flight, doing one-time NDT inspections of aft pressure bulkhead for web cracks and repairing the oil can condition. • If the oil can condition is beyond a certain limit, doing a one-time NDT inspection of the affected web bay at the fastener locations where the web intersects the surrounding structure for cracks and repairing the oil can condition. • If existing bulkhead repairs or bulging of tear straps prevent accomplishing low and high frequency eddy current inspections, contacting Boeing for instructions. • Repairing any cracks or bulges found during any inspection and contacting Boeing for repair instructions if necessary. • If a previously installed oil can repair is found, doing one-time NDT inspections of the web at the surrounding structure interfaces for cracks. • If follow-on supplemental inspections of a previously installed repair are not being accomplished, determining the FAA-approved, follow-on inspection procedures, thresholds, and repetitive intervals and incorporating them into the airplane maintenance program. Table 1 of paragraph 1.E. of the service bulletin recommends the following compliance times for the general visual inspections for oil can conditions or bulges in the aft pressure bulkhead:
(1)The initial inspection at or before 15,000 total flight cycles or within 1,200 flight cycles from the release date of the bulletin,
(2)the first repetitive inspection thereafter at or before 10,000 flight cycles, and
(3)the subsequent repetitive general visual inspections thereafter at or before 6,000 flight cycles. Table 1 also recommends repairing an oil can condition at or before 12,000 flight cycles, or before further flight, depending upon the extent of the oil can condition. Table 1 also recommends repairing any crack or bulge before further flight. Table 2 of paragraph 1.E. of the service bulletin specifies a compliance time of 15,000 total flight cycles or within 1,200 flight cycles after the date on the service bulletin, for doing the one-time general visual inspection to identify repairs to the gore web ( *i.e.* , the tapered web segments). If any repair is found that does not have follow-on supplemental inspections, Table 2 specifies to determine the FAA-approved, follow-on inspection procedures, thresholds, and repetitive intervals and to incorporate them into the airplane maintenance program within 12 months after accomplishing the inspection given in Section 53-80-08-2R of the Boeing 737-600/700/700C/800/900 SRMs. For Model 737-700 and -800 series airplanes on which Boeing Business Jet
(BBJ)Lower Cabin Altitude Modification has been incorporated in accordance with Supplemental Type Certificate
(STC)ST01697SE: Paragraph 1.E. of the service bulletin recommends that all initial compliance times (thresholds) specified in flight cycles be reduced to one-half of those specified in the service bulletin, and that all repeat interval compliance times specified in flight cycles be reduced to one-quarter of those specified in the service bulletin. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between the Proposed AD and Service Bulletin.” Differences Between the Proposed AD and Service Bulletin The service bulletin specifies to contact the manufacturer for instructions on how to repair certain conditions, but this proposed AD would require 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. The service bulletin specifies to contact Boeing for further instructions in developing an FAA-approved supplemental inspection program if an aft pressure bulkhead is found that does not have supplemental inspections specified in either the Boeing 737-600/700/700C/800/900 SRMs or the service bulletin. This proposed AD would instead require contacting the Manager, Seattle Aircraft Certification Office, or an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization. If any repair is found that does not have follow-on supplemental inspections, Table 2 of paragraph 1.E. of the service bulletin specifies to determine the FAA-approved follow-on inspections procedures, thresholds, and repetitive intervals and to incorporate them into the airplane maintenance program within 12 months after accomplishing the inspection in Section 53-80-08-2R of the Boeing 737-600/700/700C/800/900 SRMs. This proposed AD, however, would require that those corrective actions, if applicable, be done within 12 months after accomplishing the one-time general visual inspection of the aft pressure bulkhead for any previously installed web repair. Tables 1 and 2 of paragraph 1.E. of the service bulletin specify a compliance time of 15,000 total flight cycles or within 1,200 flight cycles from the release date or after the date on the service bulletin, for the general visual inspections. This proposed AD would require accomplishing the applicable inspection at the later of those compliance times. This proposed AD would also require starting the compliance time from the effective date of this AD, not from the service bulletin date. Although the service bulletin specifies to submit certain information to the manufacturer, this proposed AD does not include that requirement. We do not need this information from operators. Costs of Compliance There are about 1,755 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 600 airplanes of U.S. registry. The proposed inspection would take about 6 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $288,000, or $480 per airplane, per inspection cycle. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-29031; Directorate Identifier 2007-NM-130-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by October 9, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to Boeing Model 737-600, -700, -700C, -800, and -900 series airplanes, certificated in any category; as identified in Boeing Alert Service Bulletin 737-53A1253, dated May 18, 2007. Unsafe Condition
(d)This AD results from web oil can conditions found on the aft pressure bulkhead of several airplanes. We are issuing this AD to detect and correct oil can conditions, bulges, or previous repairs in the aft pressure bulkhead, which could lead to web cracks and consequently result in rapid decompression 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)At the applicable times specified in paragraph 1.E. of Boeing Alert Service Bulletin 737-53A1253, dated May 18, 2007, except as provided by paragraph
(g)of this AD: Do repetitive general visual inspections of either the aft side or forward side of the aft pressure bulkhead for oil can conditions or bulges and a one-time general visual inspection of the aft pressure bulkhead to identify any previously installed web repair, and do all applicable corrective actions, by accomplishing all of the applicable actions specified in the Accomplishment Instructions of Boeing Alert Service Bulletin 737-53A1253, dated May 18, 2007, except as provided by paragraphs
(h)and
(i)of this AD. Exceptions to Compliance Times
(g)Where Tables 1 and 2 of paragraph 1.E. of Boeing Alert Service Bulletin 737-53A1253, dated May 18, 2007, specify a compliance time of “at or before 15,000 total flight cycles or within 1,200 flight cycles” for the general visual inspections, this AD would require accomplishing the applicable inspection at the later of those compliance times. Where Tables 1 and 2 of paragraph 1.E. of the service bulletin specify counting the compliance time from the “release date of this service bulletin” or “after the date on this service bulletin,” this proposed requires starting the compliance time from the effective date of this AD. Where Table 2 of paragraph 1.E. of the service bulletin specifies to determine the FAA-approved, follow-on inspection procedures, thresholds, and repeat intervals and to incorporate them into the airplane maintenance program within 12 months after accomplishing the inspection given in Section 53-80-08-2R of the Boeing 737-600/700/700C/800/900 Structural Repair Manuals (SRMs), this AD requires that those corrective actions, if applicable, be done within 12 months after accomplishing the one-time general visual inspection of the aft pressure bulkhead for any previously installed web repair as required by paragraph
(f)of this AD. Exceptions to Corrective Actions
(h)If any crack or bulge is found during any inspection required by paragraph
(f)of this AD and Boeing Alert Service Bulletin 737-53A1253, dated May 18, 2007, specifies to contact Boeing for repair instructions, before further flight, repair according to a method approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA, or according to data meeting the certification basis of the airplane approved by an Authorized Representative for the Boeing 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. If a previously installed aft pressure bulkhead web repair is found during any inspection required by paragraph
(f)of this AD, and the FAA-approved supplemental inspection program cannot be determined from either the Boeing 737-600/700/700C/800/900 SRMs or the service bulletin, and the service bulletin specifies to contact Boeing for further instructions, within 12 months after accomplishing the inspection, contact the Manager, SACO, or an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization to develop a supplemental inspection program. No Reporting Requirement
(i)Although Boeing Alert Service Bulletin 737-53A1253, dated May 18, 2007, specifies to submit certain information to the manufacturer, this AD does not require that action. Alternative Methods of Compliance (AMOCs) (j)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(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 14 CFR 25.571, Amendment 45, and the approval must specifically refer to this AD. Issued in Renton, Washington, on August 14, 2007. Stephen P. Boyd, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-16657 Filed 8-23-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-29043; Directorate Identifier 2007-NM-177-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-300, -400, and -500 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive
(AD)for all Boeing Model 737-300, -400, and -500 series airplanes. This proposed AD would require revising the FAA-approved maintenance inspection program to include inspections that will give no less than the required damage tolerance rating for each structural significant item (SSI), doing repetitive inspections to detect cracks of all SSIs, and repairing cracked structure. This proposed AD results from a report of incidents involving fatigue cracking and corrosion in transport category airplanes that are approaching or have exceeded their design service objective. We are proposing this AD to maintain the continued structural integrity of the entire fleet of Model 737-300, -400, and -500 series airplanes. DATES: We must receive comments on this proposed AD by October 9, 2007. ADDRESSES: Use one of the following addresses to submit comments on this proposed AD. • *DOT Docket Web site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Government-wide rulemaking Web site:* Go to *http://www.regulations.gov* and follow the instructions for sending your comments electronically. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Fax:*
(202)493-2251. • *Hand Delivery:* Room W12-140 on the ground floor of the West Building, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. FOR FURTHER INFORMATION CONTACT: Nancy Marsh, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)917-6440; fax
(425)917-6590. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed in the ADDRESSES section. Include the docket number “FAA-2007-29043; Directorate Identifier 2007-NM-177-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments received by the closing date and may amend the proposed AD in light of those comments. We will post all comments we receive, without change, to *http://dms.dot.gov,* including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (65 FR 19477-78), or you may visit *http://dms.dot.gov.* Examining the Docket You may examine the AD docket on the Internet at *http://dms.dot.gov,* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone
(800)647-5527) is located on the ground 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. Discussion In the early 1980's, as part of its continuing work to maintain the structural integrity of older transport category airplanes, we concluded that the incidence of fatigue cracking may increase as these airplanes reach or exceed their design service objective (DSO). In light of this, and as a result of increased utilization, and longer operational lives, we determined that a supplemental structural inspection program
(SSIP)was necessary to maintain the continued structural integrity for all airplanes in the transport fleet. Issuance of Advisory Circular
(AC)As a follow-on from that determination, we issued AC No. 91-56, “Supplemental Structural Inspection Program for Large Transport Category Airplanes,” dated May 6, 1981. That AC provides guidance material to manufacturers and operators for use in developing a continuing structural integrity program to ensure safe operation of older airplanes throughout their operational lives. This guidance material applies to transport airplanes that were certified under the fail-safe requirements of part 4b (“Airplane Airworthiness, Transport Categories”) of the Civil Air Regulations or damage tolerance structural requirements of part 25 (“Airworthiness Standards: Transport Category Airplanes”) of the Federal Aviation Regulations
(FAR)(14 CFR part 25), and that have a maximum gross weight greater than 75,000 pounds. The procedures set forth in that AC are applicable to transport category airplanes operated under subpart D (“Special Flight Operations”) of part 91 of the FAR (14 CFR part 91); part 121 (“Operating Requirements: Domestic, Flag, and Supplemental Operations”); part 125 (“Certification and Operations: Airplanes having a Seating Capacity of 20 or More Passengers or a Maximum Payload of 6,000 Pounds or More”); and part 135 (“Operating Requirements: Commuter and On-Demand Operations”) of the FAR (14 CFR parts 121, 125, and 135). The objective of the SSIP was to establish inspection programs to ensure timely detection of fatigue cracking. Development of the SSIP In order to evaluate the effect of increased fatigue cracking with respect to maintaining fail-safe design and damage tolerance of the structure of Boeing Model 737-300, -400, and -500 series airplanes, Boeing conducted a structural reassessment of those airplanes, using damage tolerance evaluation techniques. Boeing accomplished this reassessment using the criteria contained in AC No. 91-56, as well as Amendment 25-45 of section 25.571 (“Damage-tolerance and fatigue evaluation of structure”) of the FAR (14 CFR 25.571). During the reassessment, members of the airline industry participated with Boeing in working group sessions and developed the SSIP for Model 737-300, -400, and -500 series airplanes. Engineers and maintenance specialists from the FAA also supported these sessions. Subsequently, based on the working group's recommendations, Boeing developed the Supplemental Structural Inspection Document (SSID). Relevant Service Information We have reviewed Boeing Models 737-300/400/500 Airplanes Document No. D6-82669, “Supplemental Structural Inspection Document,” Original Release, dated May 2007 (hereafter “the SSID”). The SSID describes procedures for revising the FAA-approved maintenance inspection program to include inspections that will give no less than the required damage tolerance rating
(DTR)for each supplemental significant item (SSI), doing repetitive inspections to detect cracks of all SSIs, and repairing cracked structure. Accomplishing the actions specified in the SSID is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require the following actions: Paragraph
(g)of the proposed AD would require incorporation of a revision into the FAA-approved maintenance inspection program that provides no less than the required DTR for each SSI listed in the SSID. Paragraph
(h)of the proposed AD would require repetitive inspections to detect cracks of all SSIs. Paragraph
(i)of the proposed AD would require repairing any cracked structure in accordance with a method approved by the FAA or an Authorized Representative
(AR)for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the FAA to make those findings. Paragraph
(j)of the proposed AD specifies the requirements of the inspection program for transferred airplanes. Before any airplane that is subject to this proposed AD can be added to an air carrier's operations specifications, a program for doing the inspections required by this proposed AD must be established. Differences Between the Proposed AD and Service Information Section 3.0, “Structural Significant Items (SSIs)” of the SSID specifies a threshold of 66,000 flight cycles for accomplishing the initial inspections; however, it does not specify a grace period for airplanes that are near or have passed that threshold. This proposed AD would allow a grace period of 12 months after the effective date of the AD to incorporate the SSID into the FAA-approved maintenance inspection program. This proposed AD also would allow a grace period of 4,000 flight cycles measured from 12 months after the effective date of the AD to initiate the applicable inspections to detect cracks of all SSIs. The SSID does not specify instructions on how to repair certain conditions. This proposed AD would require repairing those conditions in one of the following ways: • Using a method that we approve; or • Using data that have been approved by an AR for the Boeing Commercial Airplanes Delegation Option Authorization Organization whom we have authorized to make those findings. Costs of Compliance There are about 1,961 airplanes of the affected design in the worldwide fleet. The following table provides the estimated costs for U.S. operators to comply with this proposed AD. Estimated Costs Action Work hours Average labor rate per hour Cost Number of U.S.-registered airplanes Fleet cost Revision of maintenance inspection program 1,200 per operator (26 U.S. operators) $80 $96,000 per operator 599 $2,496,000. Inspections 600 per airplane 80 $48,000, per airplane, per inspection cycle 599 $28,752,000 per inspection cycle. The number of inspection work hours, as indicated above, is presented as if the accomplishment of the actions in this proposed AD are to be conducted as “stand alone” actions. However, in actual practice, these actions for the most part will be done coincidentally or in combination with normally scheduled airplane inspections and other maintenance program tasks. Therefore, the actual number of necessary additional inspection work hours will be minimal in many instances. Additionally, any costs associated with special airplane scheduling will be minimal. Further, compliance with this proposed AD would be a means of compliance with the aging airplane safety final rule (AASFR) for the baseline structure of Model 737-300, -400, and -500 series airplanes. The AASFR final rule requires certain operators to incorporate damage tolerance inspections into their maintenance inspection programs. These requirements are described in 14 CFR 121.370(a) and 129.16. Accomplishment of the actions required by this proposed AD will meet the requirements of these CFR sections for the baseline structure. The costs for accomplishing the inspection portion of this proposed AD were accounted for in the regulatory evaluation of the AASFR final rule. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration
(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-29043; Directorate Identifier 2007-NM-177-AD. Comments Due Date
(a)The FAA must receive comments on this AD action by October 9, 2007. Affected ADs
(b)None. Applicability
(c)This AD applies to all Boeing Model 737-300, -400, and -500 series airplanes, certificated in any category. Unsafe Condition
(d)This AD results from a report of incidents involving fatigue cracking and corrosion in transport category airplanes that are approaching or have exceeded their design service objective. We are issuing this AD to maintain the continued structural integrity of the entire fleet of Model 737-300, -400, and -500 series airplanes. Compliance
(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Service Information
(f)The term “the SSID,” as used in this AD, means Boeing Models 737-300/400/500 Airplanes Document No. D6-82669, “Supplemental Structural Inspection Document,” Original Release, dated May 2007. Revision of the FAA-Approved Maintenance Inspection Program
(g)Before the accumulation of 66,000 total flight cycles, or within 12 months after the effective date of this AD, whichever occurs later, incorporate a revision into the FAA-approved maintenance inspection program that provides no less than the required damage tolerance rating
(DTR)for each structural significant item
(SSI)listed in the SSID. (The required DTR value for each SSI is listed in the SSID.) The revision to the maintenance inspection program must include and must be implemented in accordance with the procedures in Section 5.0, “Damage Tolerance Rating
(DTR)System Application,” and Section 6.0, “SSI Discrepancy Reporting” of the SSID. Under the provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 *et seq.* ), the Office of Management and Budget
(OMB)has approved the information collection requirements contained in this AD and has assigned OMB Control Number 2120-0056. Initial and Repetitive Inspections
(h)Before the accumulation of 66,000 total flight cycles, or within 4,000 flight cycles measured from 12 months after the effective date of this AD, whichever occurs later, do the applicable initial inspections to detect cracks of all SSIs, in accordance with the SSID. Repeat the applicable inspections thereafter at the intervals specified in Section 3.0, “Implementation” of the SSID. Repair
(i)If any cracked structure is found during any inspection required by paragraph
(h)of this AD, before further flight, repair the cracked structure using a method approved in accordance with the procedures specified in paragraph
(k)of this AD. Inspection Program for Transferred Airplanes
(j)Before any airplane that is subject to this AD and that has exceeded the applicable compliance times specified in paragraph
(h)of this AD can be added to an air carrier's operations specifications, a program for the accomplishment of the inspections required by this AD must be established in accordance with paragraph (j)(1) or (j)(2) of this AD, as applicable.
(1)For airplanes that have been inspected in accordance with this AD: The inspection of each SSI must be done by the new operator in accordance with the previous operator's schedule and inspection method, or the new operator's schedule and inspection method, at whichever time would result in the earlier accomplishment for that SSI inspection. The compliance time for accomplishment of this inspection must be measured from the last inspection accomplished by the previous operator. After each inspection has been done once, each subsequent inspection must be performed in accordance with the new operator's schedule and inspection method.
(2)For airplanes that have not been inspected in accordance with this AD: The inspection of each SSI required by this AD must be done either before adding the airplane to the air carrier's operations specification, or in accordance with a schedule and an inspection method approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. After each inspection has been done once, each subsequent inspection must be done in accordance with the new operator's schedule. Alternative Methods of Compliance (AMOCs) (k)(1) The Manager, Seattle ACO, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.
(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(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 approval must specifically refer to this AD. Issued in Renton, Washington, on August 12, 2007. Stephen P. Boyd, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-16668 Filed 8-23-07; 8:45 am] BILLING CODE 4910-13-P FEDERAL TRADE COMMISSION 16 CFR Part 303 Rules and Regulations Under the Textile Fiber Products Identification Act AGENCY: Federal Trade Commission. ACTION: Request for public comment. SUMMARY: The Federal Trade Commission (“Commission”), pursuant to a petition filed by Mohawk Industries, Inc. (“Mohawk”), E. I. du Pont de Nemours and Company (“DuPont”), and PTT Poly Canada (“PTT Canada”) (all hereinafter “Petitioners”) solicits comments on amending Rule 7(c) of the Rules and Regulations Under the Textile Fiber Products Identification Act (“Textile Rules”) to establish a new generic fiber subclass name and definition within the existing definition of “polyester” for a specifically proposed subclass of polyester fibers made from poly(trimethylene terephthalate) (“PTT”). Petitioners state that PTT fiber, while having the same general chemical composition of polyester, has distinctive features of durability, resilience, softness, and ability to stretch with recovery that make PTT fiber significantly more suitable than conventional polyester (“PET”) for carpet and apparel. This notice also seeks comments on whether to amend Rule 7(c) to broaden or clarify its definition of polyester to describe more accurately the molecular structure and physical characteristics of PTT and any similar fibers, in the event that the petition does not warrant the establishment of a new subclass for PTT. DATES: Comments will be accepted until November 12, 2007. ADDRESSES: Interested parties are invited to submit written comments. Comments should refer to “16 CFR Part 303—Textile Rule 8, Mohawk, DuPont, and PTT Canada Comment, Matter No. P074201” to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission/Office of the Secretary, Room H-135 (Annex K), 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Comments containing confidential material, however, must be filed in paper form, must be clearly labeled “Confidential,” and must comply with Commission Rule 4.9(c). 1 The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. 1 The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission’s General Counsel, consistent with applicable law and the public interest. *See* Commission Rule 4.9(c), 16 CFR 4.9(c). Comments filed in electronic form should be submitted by following the instructions on the web-based form at *http://secure.commentworks.com/ftc-Mohawk, DuPont and PTT Canada Comment* . To ensure that the Commission considers an electronic comment, you must file it on that web-based form. You may also visit *http://www.regulations.gov* to read this Notice, and may file an electronic comment through that website. The Commission will consider all comments that *www.regulations.gov* forwards to it. The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives, whether filed in paper or electronic form. Comments received will be available to the public on the FTC website, to the extent practicable, at *http://www.ftc.gov.* As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC's privacy policy at *http://www.ftc.gov/ftc/privacy.htm.* FOR FURTHER INFORMATION CONTACT: Janice Podoll Frankle, Attorney, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC, 20580;
(202)326-3022. SUPPLEMENTARY INFORMATION: I. Background A. Statutory and Regulatory Framework The Textile Fiber Products Identification Act (“Textile Act”) requires certain disclosures in textile labeling and advertising, and authorizes the Commission to promulgate rules needed to enforce the Textile Act and establish generic fiber names. Section 4(b)(1) of the Textile Act states that a textile product is misbranded unless it is labeled to show, among other elements, the percentages, by weight, of the constituent fibers in the product, designated by their generic names and in order of predominance by weight. 15 U.S.C. 70b(b)(1). Section 4(c) provides that the same information required by section 4(b)(1) (except the percentages) must appear in written advertisements if any disclosure or implication of fiber content is made about a covered textile product. 15 U.S.C. 70b(c). Section 7(c) directs the Commission to promulgate such rules, including the establishment of generic names of manufactured fibers, as are necessary to enforce the Textile Act’s directives. 15 U.S.C. 70e(c). The Commission’s Textile Rules address the Textile Act’s fiber content disclosure requirements, including the establishment of generic fiber names. Rule 6 (16 CFR 303.6) requires manufacturers to use the generic names of the fibers contained in their textile products in making fiber content disclosures. Rule 7 of the Textile Rules (16 CFR 303.7) sets forth the generic names and definitions that the Commission has established for manufactured fibers. Rule 8 (16 CFR 303.8) describes the procedures for establishing new generic names. B. Procedural History On February 21, 2006, Petitioners petitioned the Commission for the establishment of a new generic subclass within the existing polyester category for fibers made from PTT 2 and submitted a revised petition (“Petition”) on September 7, 2006. 3 After an initial analysis with the assistance of a textile expert, tentatively and without the benefit of public comment, the Commission agreed with Petitioners that PTT fiber technically falls within Rule 7(c)’s definition of “polyester” 4 (16 CFR 303.7(c)). The Commission further determined that Petitioners’ petition for a new subclass name and definition merits further consideration. Accordingly, on April 18, 2006, the Commission assigned Petitioners the designation “PTT001” for temporary use in identifying PTT fiber pending a final determination as to the merits of their petition. 2 Mohawk sells a line of carpets manufactured from PTT under the trademark SmartStrand®. DuPont markets PTT under the trademark Sorona®. PTT Poly Canada markets PTT under the trademark Corterra® Polymers. 3 The revised petition, which restates and supplements the contents of the February 21, 2006 petition is available in electronic form at: *http://www.ftc.gov/os/statutes/textile/info/PTTGenAppRev8-30-06.pdf.* The revised petition, as well as any comments filed in this proceeding, will be available for public inspection in accordance with the Freedom of Information Act, 5 U.S.C. 552, and the Commission’s Rules of Practice, 16 CFR 4.11, at the Consumer Response Center, Public Reference Section, Room 130, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC. Any comments that are filed will be found under the Rules and Regulations Under the Textile Fiber Products Identification Act, 16 CFR Part 303, Matter No. P074201, “Mohawk, DuPont, and PTT Canada Generic Fiber Petition Rulemaking.” The comments also may be viewed on the Commission’s website at *www.ftc.gov.* 4 Rule 7(c) defines “polyester” as “a manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 85% by weight of an ester of a substituted aromatic carboxylic acid, including but not restricted to substituted terephthalate units, and para substituted hydroxy-benzoate units.” II. Summary of the Petition Petitioners state that PTT fiber satisfies the Commission’s standard for establishing a generic subclass because PTT has the same general chemical composition as the Commission’s established polyester generic fiber category, but also has distinctive properties of importance to the general public as a result of its unique chemistry, molecular design, and fiber structure. In order to differentiate PTT from PET, Petitioners submitted tests showing that PTT fiber is superior to PET fiber with respect to durability, resilience, softness, and ability to stretch with recovery. According to Petitioners, these features make PTT fiber significantly more suitable than PET for carpet and apparel applications. Regarding carpet applications, Petitioners state that, prior to the use of PTT in residential carpet, the principal types of man-made fiber used to manufacture carpet were nylon, PET, and polypropylene. Petitioners observe that carpet made from PET is less highly regarded than nylon carpet because PET lacks the durability and resilience of nylon. Petitioners further state that, with the introduction of carpet made from PTT, consumers have a choice of a fiber that has stain resistance properties superior to those of nylon, along with durability, resilience, and softness that matches that of the highest quality nylon residential carpet. 5 5 Petitioners did not submit testing to support their statement that PTT has stain resistance properties superior to nylon. Petitioners contend that apparel made from PTT is superior to apparel made from PET with respect to two attributes important to consumers. Specifically, Petitioners state that DuPont conducted a survey to determine the attributes of fabrics of greatest importance to consumers. From a list of eight attributes, 6 consumers identified ease of care, softness, and ability to stretch with recovery as the most important attributes. Petitioners state that PTT fiber is superior to PET fiber with regard to two of the three attributes, softness and ability to stretch with recovery. 6 The eight attributes were: ability to stretch, softness (also referred to as “drape”), ability to dye easily, ease of care, composition from renewable resources, stain resistance, resilience, and printability. III. Petitioners’ Testing Petitioners submitted testing to illustrate the improved performance of PTT fibers over PET fibers with respect to durability/resilience and softness for residential carpet, and softness and ability to stretch with recovery for apparel. 7 7 *See* pages 13-19 of the Petition. A. Carpet Durability/Resilience Petitioners submitted three tests that purportedly measured carpet durability and resilience. The first, the Hexapod Wear Test (three trials were conducted), which simulates carpet wear through a mechanical device, was conducted on three identical constructions of nylon, PET, and PTT fiber carpet samples. According to Petitioners, all three of the trials performed on these materials 8 revealed that both nylon and PTT fibers wear significantly better than PET. The second test measured wear after 20, 40, and 60 thousand cycles of human footsteps on the carpet (“Walk Test”). Consistent with the Hexapod wear results, Petitioners stated that both nylon and PTT carpet performed much better than PET carpet. The third test examined the durability and resilience of PTT and PET carpets using the Hexapod Wear Test and the Walk Test. Table 4 of the Petition indicates that PTT outperformed PET on both tests. 9 These tests did not find any significant difference between PTT and nylon. 8 Tests were performed after 12, 24, and 36 thousand wear cycles. According to the Petition, the Hexapod Wear Test is an appearance retention test endorsed by the Carpet and Rug Institute. The test stimulates the most aggressive parts of a walking action using an accelerated process. 9 *See* page 18 of the Petition. B. Carpet and Apparel Softness Petitioners submitted a test measuring softness as well. According to the Petition, fabric softness can be measured by the force or stress required to deflect or strain the fiber a given distance. Thus, in order to test carpet softness, Petitioners tested the stress versus the strain performance of PET and PTT fibers, as compared to nylon, and also compared the force required to deflect these yarns a given distance. This second measure was performed by placing the yarns between two clamps and depressing the yarns a particular distance. Figure 16 of the Petition indicates that PTT is softer than nylon and PET because it takes less force to deflect the PTT fiber. 10 10 *See* pages 20-21 of the Petition. C. Fabric Stretch with Recovery Petitioners also conducted two tests comparing the stretch and recovery properties of fabrics knitted or woven from PTT and PET. In the first test, knitted fabrics, with identical constructions and made from PTT and PET yarns, were dyed, heat-set, and softened. Figure 17 of the Petition indicates that PTT has better recovery 11 and a lower set 12 than PET. 13 In the second test, PTT woven fabric has more stretch than PET. 14 11 “Recovery” refers to the extent to which the fabric returns to its original shape after being stretched. 12 “Set” refers to the extent to which the fabric remains stretched when it does not recover completely. 13 *See* page 22 of the Petition. 14 *See* page 23 of the Petition. IV. Additional Information A. Proposed Subclass Definition Petitioners propose the following definition for a new subclass of polyester at 16 CFR 303.7(c): “[a] manufactured fiber in which the fiber-forming substance is any long chain synthetic polymer composed of at least 85% by weight of an ester of a substituted aromatic carboxylic acid, including but not restricted to substituted terephthalate units, [formula omitted] and para substituted hydroxy-benzoate units, [formula omitted] and where specifically the glycol used to form the ester consists of at least ninety mole percent 1,3-propanediol.” B. Extent of PTT Fiber Commercialization Petitioners state that PTT is currently being used in both carpet and apparel applications and has been commercialized by DuPont and PTT Canada. Also, Petitioners observe that carpet fiber spun from PTT has been commercialized by Mohawk (including Lees Carpets), Shaw Industries, and CAF Extrusions. The Petition additionally states that apparel fibers spun from PTT have been commercialized by more than 20 different mills. 15 15 *See* page 24 of the Petition for PTT apparel fiber mills grouped by apparel type. C. Recycling Properties Petitioners observe that while recycling of man-made polymers currently is of secondary importance to U.S. consumers, to the extent that PET and PTT are included in the same polymer pool for recycling (because they are currently both classified as “polyester”), mixing of the two polyesters could have adverse effects on the melt temperature and tenacity properties of the recycled polymer. Petitioners state that if the two polymers are mixed during processing, different safe handling procedures will be required and thus suggest that the two polymers should be separated during recycling. Accordingly, Petitioners argue that use of a different generic name would facilitate the separation of polymers during recycling. 16 16 Petitioners also observe that the byproducts of PTT and PET have different properties and thus different Occupational Safety and Health Administration (“OSHA”) exposure limits; accordingly, recycling firms need to be aware of these differences. Thus, Petitioners argue that a new generic name for PTT could help such firms comply with OSHA regulations. V. Invitation to Comment The Commission is soliciting comment on whether the petition meets the standard for granting applications for new generic fiber subclass names, and thus, whether it should amend Rule 7(c)’s polyester definition by creating a separate subclass name and definition for PTT and other similar qualifying fibers within the polyester category. The Commission articulated a standard for establishing a new generic fiber “subclass” in the “lyocell” proceeding (16 CFR 303.7(d)). There, the Commission noted that: Where appropriate, in considering applications for new generic names for fibers that are of the same general chemical composition as those for which a generic name already has been established, rather than of a chemical composition that is radically different, but that have distinctive properties of importance to the general public as a result of a new method of manufacture or their substantially differentiated physical characteristics, such as their fiber structure, the Commission may allow such fiber to be designated in required information disclosures by either its generic name or, alternatively, by its “subclass” name. The Commission will consider this disposition when the distinctive feature or features of the subclass fiber make it suitable for uses for which other fibers under the established generic name would not be suited, or would be significantly less well suited. 17 17 60 FR 62352, 62353 (Dec. 6, 1995). Therefore, a new generic fiber subclass for PTT may be appropriate if it:
(1)has the same general chemical composition as an established generic fiber category, and
(2)has distinctive properties of importance to the general public as a result of a new method of manufacture or substantially differentiated physical characteristics, such as fiber structure. The Commission also seeks comment on two alternatives, if the Commission were to find that the petition does not meet the above standard:
(1)amending Rule 7(c) to address PTT without establishing a subclass ( *e.g.* , by broadening or clarifying the definition of polyester); or
(2)retaining Rule 7(c) in its current form. In addition to soliciting comments on the merits of Petitioners’ proposed amendment to Rule 7(c)’s definition of polyester, the Commission solicits comments on Petitioners’ suggested names for the proposed new subclass. Petitioners propose, in order of preference, the following names: “triexta,” “resisoft,” and “durares.” 18 18 Petitioners state that they conducted word searches for each of the proposed generic subclass names and found no confusing similar use of these names. Before deciding whether to amend Rule 7, the Commission will consider any comments submitted to the Secretary of the Commission within the above-mentioned comment period. The full text of the Petition can be found on the Commission’s website at: *http://www.ftc.gov/os/statutes/textilejump.htm.* VI. Communications by Outside Parties to Commissioners or Their Advisors Written communications and summaries or transcripts of oral communications respecting the merits of this proceeding from any outside party to any Commissioner or Commissioner’s advisor will be placed on the public record. *See* 16 CFR 1.26(b)(5). VII. Regulatory Flexibility Act The provisions of the Regulatory Flexibility Act relating to an initial regulatory analysis (5 U.S.C. 603-605) do not apply to this proposal because the Commission believes that neither of the amendments under consideration, if promulgated, will affect small entities. The Commission has tentatively reached this conclusion with respect to the proposed alternative amendments because neither would impose additional obligations, penalties, or costs. The alternative amendments simply would:
(1)allow covered companies to use a new generic fiber subclass name and definition for polyester, or
(2)broaden or clarify the definition of polyester to describe more accurately the molecular structure of polyester. Likewise, the alternative amendments impose no additional labeling requirements. Accordingly, based on available information, the Commission certifies, pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), that neither of the proposed amendments, if promulgated, would affect small entities. This document serves as notice to the Small Business Administration of the agency’s certification of no effect. To ensure that no substantial economic impact is being overlooked, however, the Commission requests public comment on the effect of the proposed alternative amendments on costs, profits, and competitiveness of, and employment in, small entities. After receiving public comment, the Commission will decide whether preparation of a final regulatory flexibility analysis is warranted. Moreover, while the Commission, as explained above, concludes that it is not required to prepare an initial regulatory flexibility analysis for this matter, the Commission nonetheless has prepared the following such analysis to facilitate public comment on the impact, if any, of the proposed alternative amendments on small entities: A. Description of the Reasons that Action by the Agency Is Being Considered The Commission, pursuant to Petitioners’ petition, solicits comments on whether to
(1)amend Rule 7(c) of the Textile Rules to establish a new generic fiber subclass name and definition to the existing definition of “polyester” for a specifically proposed subclass of polyester fibers made from PTT; or
(2)amend Rule 7(c) to broaden or clarify the definition of “polyester” to describe more accurately the allegedly unique molecular structure and physical characteristics of polyester fibers made from PTT and any similar fibers; or
(3)retain Rule 7(c)’s definition of polyester. B. Statement of the Objectives of, and Legal Basis for, the Proposed Alternative Amendments As explained above, the Commission’s Textile Rules address the Textile Act’s requirements for disclosure of fiber content in textile labeling, including the establishment of generic fiber names. Rule 6 of the Textile Rules (16 CFR 303.6) requires manufacturers to use the generic names of the fibers contained in their textile products in making fiber content disclosures on labels. Rule 7 of the Textile Rules (16 CFR 303.7) sets forth the generic names and definitions that the Commission has established for manufactured fibers. Rule 8 (16 CFR 303.8) describes the procedures for establishing new generic names. In accordance with Rule 8, Petitioners have petitioned the Commission to amend Rule 7(c)’s definition of “polyester” by creating a separate subcategory and definition for PTT. The Commission seeks comment on this proposal and the alternatives of amending Rule 7(c) to broaden or clarify the definition of “polyester” or not amending the Rule. C. Description of and, Where Feasible, Estimate of the Number of Small Entities to Which the Proposed Alternative Amendments Will Apply The Commission believes that the proposed alternative amendments would not affect small entities because neither the Petitioners nor any other entity affected by these proposed alternative amendments would be a “small entity” under the Small Business Administration Size Standards. Although there may be some “downstream” textile manufacturers that could be “small entities” whose labeling may change as a result of these proposed alternative amendments, the amendments would impose no new or different compliance obligations, penalties, or costs on them. The Commission, however, invites comment and information on this issue. D. Projected Reporting, Recordkeeping, and Other Compliance Requirements The Textile Rules impose disclosure requirements, and the proposed alternative amendments would not impose any additional obligations. One of the proposed alternative amendments simply would allow covered companies to use a new generic fiber subclass name and definition as an alternative to an existing generic name. The other proposed alternative amendment would simply broaden or clarify the definition of polyester. Neither of the proposed amendments would impose any additional labeling or advertising requirements. E. Duplicative, Overlapping, or Conflicting Federal Rules The Commission has not identified any other federal statutes, rules, or policies that would duplicate, overlap, or conflict with the proposed alternative amendments. F. Significant Alternatives to the Proposed Amendments The provisions of the Textile Rules directly reflect the requirements of the Textile Act and there are no other alternatives to the proposed alternative amendments, which reflect the nature of the Petitioners’ fiber product. VIII. Paperwork Reduction Act Pursuant to the Paperwork Reduction Act (“PRA”), 44 U.S.C. 3501-3520, the Office of Management and Budget (“OMB”) approved the information collection requirements contained in the Textile Rules and assigned OMB Control Number 3084-0101. 19 The proposed rule amendments, as discussed above, would broaden the definition of polyester to describe more accurately the allegedly unique molecular structure and physical characteristics of PTT or, alternatively, allow covered companies to use a new generic fiber subclass name and definition for polyester. Neither proposal would change the existing paperwork burden on covered companies. Accordingly, neither proposed alternative amendment would impose any new or affect any existing reporting, recordkeeping, or third-party disclosure requirements that are subject to review by OMB under the PRA. 19 The OMB clearance for the Textile Rules expires on February 28, 2009. List of Subjects in 16 CFR Part 303 Labeling, Textile, Trade Practices. **Authority:** Sec. 7(c) of the Textile Fiber Products Identification Act (15 U.S.C. 70e(c)). By direction of the Commission. Donald S. Clark Secretary [FR Doc. E7-16841 Filed 8-23-07: 8:45 am] BILLING CODE 6750-01-S DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-155929-06] RIN 1545-BG31 Payout Requirements for Type III Supporting Organizations That Are Not Functionally Integrated; Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correction to advance notice of proposed rulemaking. SUMMARY: This document contains corrections to advance notice of proposed rulemaking (REG-155929-06) that was published in the **Federal Register** on Thursday, August 2, 2007 (72 FR 42335) regarding the payout requirements for Type III supporting organizations that are not functionally integrated, the criteria for determining whether a Type III supporting organization is functionally integrated, the modified requirements for Type III supporting organizations that are organized as trusts, and the requirements regarding the type of information a Type III supporting organization must provide to its supported organization(s) to demonstrate that it is responsive to its supported organization(s). FOR FURTHER INFORMATION CONTACT: Philip T. Hackney or Michael B. Blumenfeld at
(202)622-6070 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The correction notice that is the subject of this document is under sections 501(c)(3) and 509(a)(3) of the Internal Revenue Code. Need for Correction As published, the advance notice of proposed rulemaking (REG-155929-06) contains errors that may prove to be misleading and are in need of clarification. Correction of Publication Accordingly, the publication of advance notice of proposed rulemaking (REG-155929-06), which was the subject of FR Doc. E7-14925, is corrected as follows: 1. On page 42336, column 2, in the preamble, under the paragraph heading *“Qualification Requirements for Type III Supporting Organizations Prior to Enactment of the Pension Protection Act”,* first and second lines of the second paragraph of the column, the language “Responsiveness Test: Charitable Trusts. Before enactment of the PPA,” is corrected to read *“Responsiveness Test: Charitable Trusts.* Before enactment of the PPA,”. 2. On page 42336, column 2, in the preamble, under the paragraph heading *“Qualification Requirements for Type III Supporting Organizations Prior to Enactment of the Pension Protection Act”,* seventh line of the second paragraph of the column, the language “trust under state law,
(2)each publicly” is corrected to read “trust under State law,
(2)each publicly”. 3. On page 42336, column 3, in the preamble, under the paragraph heading *“PPA Amendments to Qualification Requirements for Type III Supporting Organizations”,* second line of the second paragraph, the language “enacted Code sections 509(d) and” is corrected to read “enacted Code sections 509(f) and”. 4. On page 42336, column 3, in the preamble, under the paragraph heading *“PPA Amendments to Qualification Requirements for Type III Supporting Organizations”,* third line from the bottom of the column, the language “Protection of 2006,” as Passed by the” is corrected to read “Protection Act of 2006,” as Passed by the”. LaNita Van Dyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration). [FR Doc. E7-16715 Filed 8-23-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 440 [CMS-2234-P] RIN 0938-A045 Medicaid Program; State Option To Establish Non-Emergency Medical Transportation Program AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Proposed rule. SUMMARY: This proposed rule would implement section 6083 of the Deficit Reduction Act of 2005 which provides States with additional State plan flexibility to establish a non-emergency, medical transportation brokerage program, and to receive the Federal medical assistance percentage rate. This authority supplements the current authority that States have to provide non-emergency medical transportation to Medicaid beneficiaries who need access to medical care, but have no other means of transportation. DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on September 24, 2007. ADDRESSES: In commenting, please refer to file code CMS-2234-P. Because of staff and resource limitations, we cannot accept comments by facsimile
(FAX)transmission. You may submit comments in one of four ways (no duplicates, please): 1. *Electronically.* You may submit electronic comments on specific issues in this regulation to *http://www.cms.hhs.gov/eRulemaking.* Click on the link “Submit electronic comments on CMS regulations with an open comment period.” (Attachments should be in Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft Word.) 2. *By regular mail.* You may mail written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-2244-P, P.O. Box 8017, Baltimore, MD 21244-8017. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. *By express or overnight mail.* You may send written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-2234-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. *By hand or courier.* If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to one of the following addresses. If you intend to deliver your comments to the Baltimore address, please call telephone number
(410)786-7195 in advance to schedule your arrival with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 21244-1850. (Because access to the interior of the HHH Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period. *Submission of comments on paperwork requirements.* You may submit comments on this document's paperwork requirements by mailing your comments to the addresses provided at the end of the “Collection of Information Requirements” section in this document. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Donna Schmidt,
(410)786-5532. SUPPLEMENTARY INFORMATION: *Submitting Comments:* We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by referencing the file code CMS-2234-P and the specific “issue identifier” that precedes the section on which you choose to comment. *Inspection of Public Comments:* All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: *http://www.cms.hhs.gov/eRulemaking.* Click on the link “Electronic Comments on CMS Regulations” on that Web site to view public comments. Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951. I. Background A. General For more than a decade, States have been asking for the tools to modernize their Medicaid programs. With the enactment of section 6083 of the Deficit Reduction Act of 2005 (DRA), Pub. L. 109-171, on February 8, 2006, States now have new options to create programs that are more aligned with today's Medicaid populations and the health care environment. Cost sharing, benefit flexibility through benchmark plans, the health opportunity accounts (HOA), and the flexibility to design cost-effective transportation programs provide opportunities to modernize Medicaid, make the cost of the program and health care more affordable, and expand coverage for the uninsured. B. Statutory Authority Section 6083 of the DRA amended section 1902(a) of the Social Security Act (the Act) by adding a new section 1902(a)(70), which allows States to amend their Medicaid State plans to establish a non-emergency medical transportation brokerage program without regard to statutory requirements for comparability, state-wideness, and freedom of choice. This proposed regulation would provide States with the flexibility granted by the statute. II. Provisions of the Proposed Regulations [If you choose to comment on issues in this section, please include the caption “Provisions of the Proposed Regulations” at the beginning of your comments.] A. Overview The Department of Health and Human Services
(DHHS)began issuing guidance about the new flexibilities available to States within months of the enactment of the DRA. On March 31, 2006, DHHS issued a State Medicaid Director letter providing guidance on the implementation of section 6083 of the DRA. The proposed regulation would formalize the guidance issued on non-emergency medical transportation programs. The proposed regulation would add a new paragraph
(4)to 42 CFR 440.170(a). B. Requirements of the Provision for State Plans Under § 431.53, States are required in their Title XIX State plans to ensure necessary transportation of Medicaid beneficiaries to and from providers. Expenditures for transportation may be claimed as administrative costs, or a State may elect to include transportation as medical assistance under its State Medicaid plan. Before enactment of the DRA, if a State wanted to provide transportation as medical assistance under the State plan, it could not restrict beneficiary choice by selectively contracting with a broker, nor could it provide services differently in different areas of the State without receiving, under section 1915(b) of the Act, a waiver of freedom of choice, comparability, and state-wideness otherwise required at section 1902(a) of the Act. These waivers allowed States to selectively contract with brokers and to operate their programs differently in different areas of the State. The DRA gives the States greater flexibility in providing non-emergency medical transportation. States are no longer required to obtain a section 1915(b) waiver in order to provide non-emergency transportation as an optional medical service through a competitively contracted broker. A State plan amendment for such a brokerage program eliminates the administrative burden of the 1915(b) biannual waiver renewal. Under new section 1902(a)(70) of the Act, a State may now use a non-emergency medical transportation brokerage program when providing transportation as medical assistance under the State plan, notwithstanding the provisions of sections 1902(a)(1), 1902(a)(10)(B), and 1902(a)(23) of the Act, concerning state-wideness, comparability, and freedom of choice, respectively. Current regulations provide that when a State includes transportation in its State plan as medical assistance, it is required to use a direct vendor payment system that is consistent with applicable regulations at § 440.170(a), and it must also comply with all other requirements related to medical services, including freedom of choice, comparability, and state-wideness. To implement the provisions of section 1902(a)(70) of the Act, we propose revising § 440.170(a) to add a new paragraph (4), Non-emergency medical transportation brokerage program, to reflect the increased flexibility allowed by the DRA. We propose allowing, at the option of the State, the establishment of a non-emergency medical transportation brokerage program. We believe that this may prove to be a more cost-effective way of providing transportation for individuals eligible for medical assistance under the State plan, who need access to medical care or services and have no other means of transportation. As provided by the statute, we propose specifying in § 440.170(a)(4) that the broker could provide for transport services that include wheelchair vans, taxis, stretcher cars, bus passes and tickets, secured transportation. We are interpreting “secured transportation” in this context to mean a form of transportation containing an occupant protection system that addresses the safety needs of disabled or special needs individuals. The Deficit Reduction Act also provides that other forms of transportation may be included as determined by the Secretary to be appropriate. At this time, we are not proposing to determine any additional transportation services to be generally appropriate. We are proposing, however, to allow States to identify additional transportation alternatives that are otherwise covered under the State plan (and not specific to services available through transportation brokers). CMS will review these alternatives in the State plan amendment approval process for transportation services generally. In that process, we will consider individual circumstances in the State and applicable utilization controls. For example, air transportation may be appropriate in States with significant rural populations and low population density, but not in other States. Even in those States, air transportation may only be appropriate with appropriate utilization controls. Thus, we are proposing to make this determination in the context of our review of State plan amendments based on the information furnished by the State. At § 440.170(a)(4), we propose that the competitive bidding process be consistent with applicable Department regulations at 45 CFR 92.36, based on the State's evaluation of the broker's experience, performance, references, resources, qualifications and cost, and that the contract with the broker include oversight procedures to monitor beneficiary access and complaints, and ensure that transport personnel are licensed, qualified, competent, and courteous. We are proposing that State and local bodies that wish to serve as brokers compete on the same terms as non-governmental entities. We propose in paragraph (a)(4)(iv) to include prohibitions on broker self-referrals and conflict of interest, based on the prohibitions on physician referrals under section 1877 of the Act (42 U.S.C. 1395(nn)). Section 1877 of the Act generally prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity, with which he or she (or an immediate family member) has a financial relationship (ownership or compensation) unless an exception applies. In addition, to prevent other types of fraud and abuse, the anti-kickback provisions in section 1128B(b)of the Act (42 U.S.C. 1320a-7b(b)) and the provisions in the civil False Claims Act (31 U.S.C. 3729) also apply to this transportation program as they apply to the Medicaid program generally. We believe that the Congress intended that section 1877 of the Act and the applicable regulations be used as a model for establishing broker prohibitions on referrals, conflicts of interest, and impermissible kickbacks, in order to prevent fraud and abuse. A financial relationship, as defined in our regulations implementing section 1877 of the Act at § 411.354(a), includes any direct or indirect ownership or investment interest in the entity that furnishes designated health services and any compensation arrangement between such an entity and the physician or an immediate family member of the physician. Section 1877 of the Act includes certain ownership and investment exceptions, compensation exceptions, and some exceptions that apply to ownership, investment, and compensation relationships. In addition, section 1877(b)(4) of the Act allows the Secretary to create an exception in the case of any other financial relationship that does not pose a risk of program or patient abuse. For purposes of new § 440.170(a), we propose that the term “transportation broker” include contractors, owners, investors, Boards of Directors, corporate officers, and employees. We propose to use the definition of “financial relationship” as set forth in regulations at § 411.354(a) by means of cross-reference, with the term “transportation broker” substituted for “physician” and “non-emergency transportation” substituted for “DHS.” We propose to use the definition of “immediate family member” or member of a “physician's immediate family” as set forth in the physician self-referral provisions in § 411.351, with the term “transportation broker” substituted for “physician.” Based on the prohibitions in section 1877 of the Act, we propose that the broker be an independent entity, in that the broker may not itself provide transportation under the contract with the State and that the broker may not refer or subcontract to a transportation service provider with which it has certain financial relationships, unless certain exceptions apply. Federal funds may not be used for any prohibited referrals. Similar to some of the ownership exceptions in section 1877 of the Act, we propose including exceptions for a non-governmental broker that provides transportation in a rural area when there is no other qualified provider available; when the necessary transportation provided by the non-governmental broker is so specialized that no other qualified provider is available; or when the availability of qualified providers other than the non-governmental broker is insufficient to meet the existing need. For purposes of this regulation we propose that a qualified provider would be any Medicaid participating provider or other provider determined by the State to be qualified. A “rural area,” as defined in § 412.62(f)(iii), is any area that is outside an urban area. These exceptions address specific circumstances in which there is a lack of transportation resources and there is documentation to support these exceptions. Governmental Brokerages We did not wish to prevent a government entity that is awarded a brokerage contract through the competitive bidding process from referring an individual in need of transportation service to a government transportation provider that is generally available in the community. Therefore, we have included an exception to allow such a governmental broker to provide an individual transportation service or to arrange for the individual transportation service by referring to or subcontracting with another government-owned or -controlled transportation provider, when certain conditions have been met that will assure an arms-length transaction. The broker would first be required to be a distinct governmental unit, and the contract could not include payment of costs other than those unique to the distinct brokerage function. This means the contract could not provide for payment of costs normally shared with or paid by other governmental units (such as a regional transportation authority). This requirement would ensure that the distinct broker unit did not have direct financial conflicts of interest resulting from commingling funding with State or local general revenue funds. Second, the broker would have to document, after considering the specific transportation needs of the individual, that the government provider was the most appropriate, effective, and lowest cost alternative for each individual transportation service. And third, the broker would have to document that for each individual transportation service, the Medicaid program was paying no more than the rate charged to the general public. Because there could still be conflicts of interest resulting from management oversight from a parent or related governmental unit, we considered proposing to limit the exception to circumstances where the distinct unit governmental broker was independent of external review and oversight by the parent entity. However, we currently believe that the proposed conditions would be sufficient to protect against inappropriate inter-governmental referrals. We are soliciting comments, suggestions, and examples regarding the following exceptions mentioned above: the service area is rural and there is no other Medicaid participating or qualified provider available except the non-governmental broker; the transportation provided by the non-governmental broker is so specialized that no other qualified provider is available (including comments on how “specialized” should be defined); available qualified providers other than the non-governmental broker are insufficient to meet the need; the broker is a distinct government unit and is paid only for costs that are unique to the distinct brokerage function and the broker documents that services provided by any other governmental entity are the most appropriate, least costly alternative, and the Medicaid program is paying no more than the rate charged to the public. Additionally, we are proposing to include a prohibition on a broker accepting any form of remuneration or payment from a transportation provider in exchange for influencing a referral or subcontract for transportation services. We also propose that in referring or subcontracting with transportation providers, the broker be prohibited from withholding necessary transportation from a recipient or providing transportation that is not the most appropriate and cost-effective means of transportation. Under section 1905(a)(28) of the Act, the Secretary is given the authority to specify any other medical care which can be covered by the State. We would therefore use authority to make Federal financial participation available at the medical assistance rate for the cost of the brokerage contract, providing that such a contract complied with the requirements set forth in this regulation. In accordance with Federal requirements in sections 1902(a)(2) and 1903(w) of the Act and applicable Federal regulations described at § 433.50 through § 433.74, under the brokerage contract with the State Medicaid agency, the non-Federal share of the Medicaid payments made for operating a transportation brokerage program could only be derived from permissible sources and must comply with the applicable statute and regulations cited above. Also, the return of any Medicaid payments (directly or indirectly) to a State or local government entity under the non-emergency transportation brokerage program is prohibited. We propose that the State, in contracting with the broker, would be required to specify that violation of these provisions would be deemed to be a breach of contract and that the State could move to terminate the contract with the broker. III. Collection of Information Requirements Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the **Federal Register** and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget
(OMB)for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues: • The need for the information collection and its usefulness in carrying out the proper functions of our agency. • The accuracy of our estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements: Section 6083 of the DRA (Non-emergency Medical Transportation Brokerage Program) provides States with the option to submit a State Plan amendment
(SPA)to establish a non-emergency medical transportation brokerage program. To effectuate this option, States must submit an amendment to their existing State Plan. CMS has provided States with a letter providing guidance on this provision and the implementation of the DRA, and an associated SPA template for use by States to modify their Medicaid State plan if they choose to implement this option. The template is a total of five pages and we estimate that it will take no more than 12 minutes for a State to actually complete and submit the template to CMS. The potential number of respondents is 56 (50 States, DC, and five territories); however, we do not expect the territories and/or all 50 states to respond. We estimate that only five States will submit annually. Once approved, the State will not need to resubmit unless it is materially changing the brokerage program. At this rate, it will cost no more than $50 (or $50 × 1/5 hrs × 5 states); the national total for the first year could be potentially $560 (56 × $10). We have submitted a copy of this proposed rule to OMB for its review of the information collection requirements described above. These requirements are not effective until they have been approved by OMB. If you comment on these information collection and recordkeeping requirements, please mail copies directly to the following: Centers for Medicare & Medicaid Services, Office of Strategic Operations and Regulatory Affairs, Division of Regulations Development, Attn: Melissa Musotto, [CMS-2234-P], Room C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850; and Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Katherine Astrich, CMS Desk Officer, CMS-2244-P, *katherine_astrich@omb.eop.gov* . Fax
(202)395-6974. IV. Regulatory Impact Statement [If you choose to comment on issues in this section, please include the caption “Regulatory Impact Statement” at the beginning of your comments.] We have examined the impact of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act
(RFA)(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132. Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis
(RIA)must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We estimate that this regulation will have estimated budget savings of $60 million between FY 2006 and FY 2010 due to the implementation of section 6083 of the Deficit Reduction Act of 2005. This rule would not reach the economic threshold and thus is not considered a major rule. The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6.5 million to $30.5 million in any 1 year. Individuals and States are not included in the definition of a small entity. We are not preparing an analysis for the RFA because we have determined, and the Secretary certifies, that this rule would not have a significant economic impact on a substantial number of small entities. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this rule would not have a significant impact on the operations of a substantial number of small rural hospitals. Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $120 million. This rule would have no consequential effect on State, local, or tribal governments or on the private sector. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule and subsequent final rule that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Since this regulation would not impose any costs on State or local governments, the requirements of E.O. 13132 are not applicable. In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. List of Subjects in 42 CFR Part 440 Grant programs—health, Medicaid. For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services would amend 42 CFR chapter IV as set forth below: PART 440—SERVICES: GENERAL PROVISIONS 1. The authority citation for part 440 continues to read as follows: Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 1302), as amended. 2. A new authority citation is added in numerical order to § 440.1 to read as follows: § 440.1 Basis and purpose. 1902(a)(70), State option to establish a non-emergency medical transportation program. 3. Section 440.170 is amended by revising paragraph (a)(2) and adding new paragraph (a)(4) to read as follows: § 440.170 Any other medical care or remedial care recognized under State law and specified by the Secretary.
(a)* * *
(2)Except as provided in paragraph (a)(4), transportation, as defined in this section, is furnished only by a provider to whom a direct vendor payment can appropriately be made by the agency.
(3)* * *
(4)*Non-emergency medical transportation brokerage program* . At the option of the State, and notwithstanding § 431.50 (statewide operation) and § 431.51 (freedom of choice of providers) of this chapter and § 440.240 (comparability of services for groups), a State plan may provide for the establishment of a non-emergency medical transportation brokerage program in order to more cost-effectively provide non-emergency medical transportation services for individuals eligible for medical assistance under the State plan who need access to medical care or services, and have no other means of transportation. These transportation services include wheelchair vans, taxis, stretcher cars, bus passes and tickets, secured transportation containing an occupant protection system that addresses safety needs of disabled or special needs individuals, and other forms of transportation otherwise covered under the state plan.
(i)Non-emergency medical transportation services may be provided under contract with an individual or entity that meets the following requirements:
(A)Is selected through a competitive bidding process that is consistent with 45 CFR part 92.36 and is based on the State's evaluation of the broker's experience, performance, references, resources, qualifications, and costs.
(B)Has oversight procedures to monitor beneficiary access and complaints and ensure that transport personnel are licensed, qualified, competent, and courteous.
(C)Is subject to regular auditing and oversight by the State in order to ensure the quality of the transportation services provided and the adequacy of beneficiary access to medical care and services.
(D)Is subject to a written contract that imposes the requirements related to prohibitions on referrals and conflicts of interest described at § 440.170(a)(4)(ii), and provides for the broker to be liable for the full cost of services resulting from a prohibited referral or subcontract.
(ii)Federal financial participation is available at the medical assistance rate for the cost of a written brokerage contract that:
(A)Except as provided in paragraph (a)(4)(ii)(B) of this section, prohibits the broker (including contractors, owners, investors, Boards of Directors, corporate officers, and employees) from providing non-emergency medical transportation services or making a referral or subcontracting to a transportation service provider if: ( *1* ) The broker has a financial relationship with the transportation provider as defined at § 411.354(a) of this chapter with “transportation broker” substituted for “physician” and “non-emergency transportation” substituted for “DHS”; or ( *2* ) The broker has an immediate family member, as defined at § 411.351 of this chapter, that has a direct or indirect financial relationship with the transportation provider, with the term “transportation broker” substituted for “physician.”
(B)Exceptions: The prohibitions described at clause
(A)of this paragraph do not apply if there is documentation to support the following: ( *1* ) Transportation is provided in a rural area, as defined at § 412.62(f), and there is no other available Medicaid participating provider or other provider determined by the State to be qualified except the non-governmental broker. ( *2* ) Transportation is so specialized that there is no other available Medicaid participating provider or other provider determined by the State to be qualified except the non-governmental broker. ( *3* ) Except for the non-governmental broker, the availability of other Medicaid participating providers or other providers determined by the State to be qualified is insufficient to meet the need for transportation. ( *4* ) The broker is a distinct government entity and the individual service is provided by the broker, or is referred to or subcontracted with another government-owned or operated transportation provider generally available in the community, if the following conditions are met: ( *i* ) The contract with the broker provides for payment that does not exceed actual costs calculated as a distinct unit, excluding personnel or other costs shared with or allocated from parent or related entities; ( *ii* ) The broker documents that, with respect to the individual's specific transportation needs, the government provider is the most appropriate and lowest cost alternative; and ( *iii* ) The broker documents that the Medicaid program is paying no more than the rate charged to the general public.
(C)Transportation providers may not offer or make any payment or other form of remuneration, including any kickback, rebate, cash, gifts, or service in kind to the broker in order to influence referrals or subcontracting for non-emergency medical transportation provided to a Medicaid recipient.
(D)In referring or subcontracting for non-emergency medical transportation with transportation providers, a broker may not withhold necessary non-emergency medical transportation from a Medicaid recipient or provide non-emergency medical transportation that is not the most appropriate and a cost-effective means of transportation for that recipient for the purpose of financial gain, or for any other purpose.
(E)The non-Federal share of all Medicaid payments under the transportation brokerage program must be in compliance with applicable Federal requirements in sections 1902(a)(2) and 1903(w) of the Act, and applicable Federal regulations set forth at § 433.50 through § 433.74 of this chapter. (Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program) Dated: August 30, 2006. Mark B. McClellan, Administrator, Centers for Medicare & Medicaid Services. Approved: May 10, 2007. Michael O. Leavitt, Secretary. Editorial Note: This document was received at the Office of the Federal Register on August 13, 2007. [FR Doc. E7-16172 Filed 8-23-07; 8:45 am] BILLING CODE 4120-01-P 72 164 Friday, August 24, 2007 Notices DEPARTMENT OF AGRICULTURE Cooperative State Research, Education, and Extension Service Food Safety and Inspection Service Implementation of the Veterinary Medicine Loan Repayment Program Authorized by the National Veterinary Medical Service Act AGENCY: Cooperative State Research, Education, and Extension Service and Food Safety and Inspection Service, USDA. ACTION: Notice of use of funds. SUMMARY: USDA's Cooperative State Research, Education, and Extension Service (CSREES) and Food Safety and Inspection Service
(FSIS)jointly announce their implementation of the Veterinary Medicine Loan Repayment Program authorized in 2003 by the National Veterinary Medical Service Act (NVMSA) (7 U.S.C. 3151a) and first funded in fiscal year
(FY)2006. To enable the first phase of this program, and in keeping with the existing Federal Student Loan Repayment Authority, CSREES has made funds appropriated to carry out the NVMSA available to FSIS to facilitate their recruitment of food animal veterinarians for designated hard-to-fill positions in food safety and supply, especially in rural communities, through the addition of loan repayment incentives to qualifying service agreements. FSIS, in turn, has posted information about positions eligible to receive loan repayments on the careers page of its Web site at *http://www.fsis.usda.gov/careers/Student_Loan_Repayments_VMO/index.asp.* DATES: Effective August 24, 2007, FSIS is accepting applications for positions eligible to receive NVMSA loan repayments. FOR FURTHER INFORMATION CONTACT: For information about FSIS NVMSA loan repayment opportunities: Ronald K. Jones, Phone: 202-720-9521 or *Ronald.Jones@fsis.usda.gov.* For information about overall implementation of NVMSA: Gary B. Sherman, Phone: 202-401-4952 or *Gary.Sherman@csrees.usda.gov.* SUPPLEMENTARY INFORMATION: In January, 2003, the NVMSA passed into law. It established a new Veterinary Medicine Loan Repayment program authorizing the Secretary to carry out a program of entering into agreements with veterinarians under which they provide veterinary services in veterinarian shortage situations. In determining veterinarian shortage situations the Act authorizes the Secretary to consider:
(1)Urban or rural areas that the Secretary determines have a shortage of veterinarians;
(2)areas of veterinary practice that the Secretary determines have a shortage of veterinarians, such as public health, epidemiology, and food safety;
(3)areas of veterinary need in the Federal Government; and
(4)other factors the Secretary considers to be relevant. In November 2005, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2006 (Pub. L. 109-97) appropriated $500,000 for CSREES to implement the Veterinary Medicine Loan Repayment program and represented the first time funds had been expressly appropriated for this program. In February 2007, the Revised Continuing Appropriations Resolution, 2007 (Pub. L. 110-5) appropriated an additional $495,000 for CSREES for the program. Beginning in the fall of 2005, CSREES hosted information sharing meetings on NVMSA and created a working group to explore implementation strategies that took into consideration the relatively modest appropriation for the loan repayment program. The working group developed a plan to lead a program that meets the intent of the authorizing legislation, is congruent with the mission and capabilities of the Agency, and draws on the expertise of other agencies, as appropriate. The plan received the support of the Secretary of Agriculture, and, on March 19, 2007, the authority to implement the Veterinary Medicine Loan Repayment program was delegated to CSREES which allowed the agency to proceed with implementing the first phase of the program (7 CFR Part 2). As a first step toward implementing the authorizing legislation this FY and in keeping with the already-existing Federal Student Loan Repayment Authority (5 U.S.C. 5379), in May 2007, CSREES made $750,000 in FY 2006 and 2007 NVMSA funds available to facilitate FSIS' recruitment of food animal veterinarians for designated hard-to-fill positions in food safety and supply, especially in rural communities. In addition to existing hiring incentives, and according to the above repayment authority and service agreements between FSIS and eligible recruits, FSIS intends to use these funds to offer 25 veterinarians payments of $10,000 per year over 3 years to repay their educational debt in exchange for practicing in areas of veterinarian shortage or need. A current listing of shortage or need areas and other timely information about NVMSA loan repayments to Federal veterinarians are available on the careers page of the FSIS Web site at *http://www.fsis.usda.gov/careers/Student_Loan_Repayments_VMO/index.asp.* Anticipating the possibility of future budgetary growth and intending to extend this program to non-federal positions, CSREES plans to publish in the **Federal Register** a Request for Information from stakeholders to gather input on the best way(s) to define veterinarian shortage situations within the limits of the authorizing legislation and cost-effectively administer a larger-scale loan repayment program for non-Federal veterinarians who serve in these situations. Done at Washington, DC this 20th day of August, 2007. Colien Hefferan, Administrator, Cooperative State Research, Education, and Extension Service. Alfred V. Almanza, Administrator, Food Safety and Inspection Service. [FR Doc. 07-4138 Filed 8-23-07; 8:45 am]
Connectionstraces to 73
Traces to 73 documents
U.S. Code
CFR
59 references not yet in our index
  • 7 CFR 319
  • 7 CFR 2.22
  • 12 CFR 201
  • 14 CFR 39
  • T.D. 9357
  • 26 CFR 1
  • 26 CFR 602
  • 33 CFR 117
  • 33 CFR 165
  • 33 USC 1232
  • 5 USC 601-612
  • Pub. L. 104-121
  • 44 USC 3501-3520
  • 2 USC 1531-1538
  • 42 USC 4321-4370f
  • Pub. L. 107-295
  • 40 CFR 52
  • Pub. L. 104-4
  • 472 F.3d 882
  • 40 CFR 93
  • 40 CFR 81
  • 42 CFR 482
  • 42 CFR 493
  • 42 CFR 482.27
  • 21 CFR 610.48(h)(3)(i)
  • Pub. L. 96-354
  • 21 CFR 610.48(c)
  • 21 CFR 610.48(b)(3)
  • 21 CFR 610.48(b)
  • 21 CFR 610.48
  • Pub. L. 109-13
  • Pub. L. 108-21
  • 45 CFR 2510.20
  • 16 CFR 314
  • 45 CFR 2510
  • 45 CFR 2522
  • 45 CFR 2540
  • 45 CFR 2551
  • 45 CFR 2552
  • 42 USC 12571-12595
+ 19 more
Citation graph
cites case law
Unknown
Final rule; technical amendment
U.S.C.§ 450
U.S.C.§ 136
C.F.R.§ 201.51
U.S.C.§ 605
U.S.C.§ 553
U.S.C.§ 248
Fed. Reg.Proposed Rules
Fed. Reg.Notices
U.S.C.§ 106
F. App'x472 F.3d 882
Cite7 CFR 319
Cite7 CFR 2.22
Cites 132 · showing 12Cited by 0 across 0 sources
★   the supreme law of the land   ★
Don't Tread on Me
E Pluribus Unum — out of many, one

"If you don't know your rights, you don't have any."

Marginalia · a citizen's law index
A research desk, not legal advice. Always read the cited source before relying on a summary.
Questions or an issue? support@self-law.org
disclaimerMarginalia is a research index, not a law firm. Nothing on this site is legal, tax, or financial advice and no attorney–client relationship is formed by using it. Statutes, regulations, and case law change; summaries, search results, AI output, and member posts may be incomplete, out of date, or wrong. Any interpretation drawn from material on this site should be validated by a licensed attorney in your jurisdiction before you act on it.