Rules and Regulations. Notice of proposed determination and public hearing

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BILLING CODE 3510-22-P 72 178 Friday, September 14, 2007 Proposed Rules DEPARTMENT OF ENERGY Office of Energy Efficiency and Renewable Energy 10 CFR Part 490 RIN 1904-AB69 Alternative Fuel Transportation Program; Private and Local Government Fleet Determination AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy (DOE). ACTION: Notice of proposed determination and public hearing. SUMMARY: Pursuant to the Energy Policy Act of 1992 (EPAct 1992), the Department of Energy

(DOE)proposes to determine that a regulatory requirement for the owners and operators of certain private and local government fleets to acquire alternative fueled vehicles

(AFVs)is not necessary to achieve the recently modified EPAct 1992 Replacement Fuel Goal. DOE therefore also proposes to determine that it cannot issue a requirement for certain private and local government fleets to acquire alternative fueled vehicles. DATES: Written comments (eight copies and, if possible, an e-mail copy) on the proposed determination must be received by DOE on or before November 13, 2007; electronic copies of comments may be sent to the e-mail address listed below. Oral views, data, and arguments may be presented at the public hearing, which will be held from 9 a.m. until 4 p.m. on October 17, 2007. The length of each oral presentation is limited to 10 minutes. The public hearing will be held at the U.S. Department of Energy, Room GH-019, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Requests to speak at the hearing must be submitted to DOE no later than 4 p.m. on October 10, 2007. ADDRESSES: Written comments (eight copies) and requests to speak at the public hearing should be addressed to: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, EE-2G, RIN 1904-AB69, 1000 Independence Avenue, SW., Washington, DC 20585-0121. E-mails may be sent to: *regulatory_info@afdc.nrel.gov.* Comments may also be submitted through the Federal Rulemaking Portal at *http://www.regulations.gov.* DOE is currently using Microsoft Word. Organizations are strongly encouraged to submit comments electronically, to facilitate timely receipt of comments and ease inclusion in the electronic docket. Copies of this notice, the transcript from the hearing, and written comments will be placed at the following Web site address: *http://www1.eere.energy.gov/vehiclesandfuels/epact/private/index.html.* Interested parties may also access these documents using a computer in DOE's Freedom of Information

(FOI)Reading Room, U.S. Department of Energy, Forrestal Building, Room 1E-190, 1000 Independence Avenue, SW., Washington, DC 20585-0121,

(202)586-3142, between the hours of 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. For more information concerning public participation in this rulemaking, see the “Opportunity for Public Comment” section found in the SUPPLEMENTARY INFORMATION section of this notice. FOR FURTHER INFORMATION CONTACT: For information concerning this notice, contact Mr. Dana V. O'Hara, Office of Energy Efficiency and Renewable Energy (EE-2G), U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585-0121;

(202)586-9171; *regulatory_info@afdc.nrel.gov;* or Mr. Chris Calamita, Office of the General Counsel, U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585-0121;

(202)586-9507. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. Statutory Requirements A. Definitions B. Key Statutory Requirements C. Other Related Requirements D. No Fuel Use Requirement Authority III. Background A. History B. Previous Rulemakings and Related Court Rulings IV. Analysis for Private and Local Fleets Rule Determination A. Achievability of the Replacement Fuel Goal B. Potential Contribution of a Private and Local Government Fleet Requirement to the Production Capacity of Alternative Fuel V. Proposed Determination VI. Opportunity for Public Comment A. Participation in Rulemaking B. Written Comment Procedures C. Public Hearing Procedures VII. Regulatory Review VIII. Approval by the Office of the Secretary I. Introduction Under the Energy Policy Act of 1992 (EPAct 1992; Pub. L. 102-486), DOE is required to determine if a requirement for certain private and local government vehicle fleets to acquire alternative fueled vehicles

(AFVs)is necessary, as specified in EPAct 1992. (42 U.S.C. 13257(e)) If DOE determines that the Private and Local Government Fleet Requirement is “necessary,” then DOE must issue regulations requiring certain fleets to acquire light-duty AFVs annually. (42 U.S.C. 13257(g)) Fleets subject to such a mandate would include all fleets that have at least 50 light duty motor vehicles, and would exclude Federal fleets, State fleets, and fleets covered under the Alternative Fuel Provider mandate. (42 U.S.C. 13257(g)(1)) If DOE determines that the Private and Local Government Fleet Requirement is not necessary then DOE must publish such determination in the **Federal Register** as a final agency action, including an explanation of the findings on which such a determination is made and the basis for the determination. (42 U.S.C. 13257(f)) Relevant to the evaluation of a Private and Local Government Fleet Requirement is the replacement fuel goal established in section 502(b) of EPAct 1992. (42 U.S.C. 13252(b)) Section 502(b)(2) establishes goals of producing sufficient replacement fuels to replace: At least ten percent by the year 2000, and at least thirty percent by the year 2010 of the projected consumption of motor fuel in the United States for each such year, with at least half of such replacement fuels being domestic fuels. (Replacement Fuel Goal; 42 U.S.C. 13252(b)(2)) Under section 504(b) of EPAct 1992, if DOE determines that the section 502 goals are unachievable, DOE must establish achievable goals. (42 U.S.C. 13254(b)) In determining whether to establish a Private and Local Government Fleet Requirement, DOE is directed to determine if such a requirement is “necessary.” (42 U.S.C. 13257(e)(1)) The “necessity” determination is a two part test. First, DOE must determine if the Replacement Fuel Goal established under section 502, or as modified under section 504 of EPAct 1992, is achievable absent a Private and Local Government Fleet Requirement. (42 U.S.C. 13257(e)(1)(A)) Next, the “necessity” determination requires DOE to determine if such a goal is practicable and actually achievable through implementation of a Private and Local Government Fleet Requirement in combination with voluntary means and other relevant programs. (42 U.S.C. 13257(e)(1)(B)) If DOE determines that the Replacement Fuel Goal is not achievable absent the Private and Local Fleet Requirement, and that such goal would be practicable and actually achievable through implementation of such a requirement, DOE must then establish the Private and Local Fleet Requirement under section 507(g). (42 U.S.C. 13257(e)(1)) If either of these findings cannot be made, then DOE is precluded from establishing the Private and Local Fleet Requirement under section 507(g). Under the Private and Local Government Fleet provisions, if DOE initiates a rulemaking under section 507(g), DOE is again directed to determine whether to modify the Replacement Fuel Goal. (42 U.S.C. 13257(e)(2)) If the Replacement Fuel Goal is not achievable, DOE has to set a Replacement Fuel Goal that is achievable. (42 U.S.C. 13257(e)(2)) In a previous rulemaking, DOE has already determined that the original Replacement Fuel Goal of 30 percent in 2010 is not achievable and a modified Replacement Fuel Goal of 30 percent by 2030 was published March 15, 2007. 72 FR 12042. The purpose of today's document is to propose a determination whether or not the Private and Local Government Fleet Requirement is necessary to achieve the modified Replacement Fuel Goal. DOE proposes to determine that it is not “necessary” to promulgate a regulation requiring private and local government fleets to acquire AFVs. DOE has initially determined that establishment of a Private and Local Government Fleet Requirement is not required for achievement of the Replacement Fuel Goal of 30 percent of U.S. motor fuels by 2030, as modified by DOE in March 2007. 72 FR 12041. As discussed below, this initial determination is based on DOE's analysis in revising the Replacement Fuel Goal, under which DOE demonstrated a pathway to achieve the modified Replacement Fuel Goal without establishment of a Private and Local Government Fleet Requirement. 72 FR 12041. Additionally, DOE also provides an analysis initially demonstrating that were a Private and Local Government Fleet Requirement established, the number of fleets potentially covered by such a requirement, the number of AFVs likely to be acquired, and the amount of replacement fuel likely displaced would not make an appreciable contribution towards achieving the modified Replacement Fuel Goal. Today's document implements the March 6, 2006 order of the U.S. District Court for Northern District of California to prepare and publish a proposed determination on the Private and Local Government Fleets rule. *See Center for Biological Diversity* v. *U.S. Department of Energy et. al.,* C 05-01526 WHA (N.D. Cal. 2006) (Order Re Timing of Relief). II. Statutory Requirements A. Definitions Under EPAct 1992, an “alternative fuel vehicle” is a “dedicated vehicle or a dual fueled vehicle.” (42 U.S.C. 13211(3)) A “dedicated vehicle” means “a dedicated automobile, such as the term is defined in section 513(h)(1)(D) of the Motor Vehicle Information and Cost Savings Act or a motor vehicle other than an automobile, that operates solely on alternative fuels.” (42 U.S.C. 13211(6)) A “dual fuel vehicle” is one “capable of operating on alternative fuel and on gasoline or diesel fuel.” (42 U.S.C. 13211(8)(A)) DOE notes that because a dual fueled vehicle can be operated on gasoline or diesel, the purchase of a dual fueled vehicle does not assure that “alternative” or “replacement” fuel will be used to operate the vehicle. “Replacement fuel” is defined by EPAct 1992 under section 301(14) to mean “ *the portion of any motor fuel* that is methanol, ethanol, or other alcohols, natural gas, liquefied petroleum gas, hydrogen, coal derived liquefied fuels, fuels (other than alcohol) derived from biological materials, electricity (including electricity from solar energy), ethers, or any other fuel that the Secretary determines meets certain statutory requirements.” (42 U.S.C. 13211(14); emphasis added). “Alternative fuel” is defined to include many of the same types of fuels as “replacement fuel” (such as methanol, natural gas, hydrogen and electricity), but also includes certain “mixtures” of petroleum-based fuel and other fuels. (10 CFR 490.2

(2002)1 ) Thus, a certain mixture might constitute an “alternative fuel,” but only the portion of the fuel that is within the definition of “replacement fuel” would actually constitute “replacement fuel.” For example, a mixture of 85 percent methanol and 15 percent gasoline would, in its entirety, constitute “alternative fuel,” but only the 85 percent that was methanol would constitute “replacement fuel.” Also by way of example, B20 (a fuel blend typically consisting of approximately 20 percent biodiesel and 80 percent diesel), considered as a total fuel blend, would not qualify as an “alternative fuel,” but the 20 percent that is biodiesel would qualify as “replacement fuel.” 1 EPAct defines “alternative fuel” ( *see* 42 U.S.C. 13211(2)), but DOE has exercised its authority to modify, by regulation, this definition. Therefore, the currently effective definition of “alternative fuel” is set forth at 10 CFR 490.2 (2006). For the purpose of considering a Private and Local Government Fleet Requirement, the term “covered fleet” is a “fleet, other than Federal fleet, State fleet, or fleet owned, operated, leased, or otherwise controlled by a covered person under section 501 [of EPAct 1992].” (42 U.S.C. 13257(g)) This is interpreted to mean all private and local government fleets not already covered under the existing fleet requirements program. A “fleet” is defined in section 301(9) of EPAct 1992 as follows: [T]he term “fleet” means a group of 20 or more light duty motor vehicles, used primarily in a metropolitan statistical area or consolidated metropolitan statistical area, as established by the Bureau of the Census, with a 1980 population of more than 250,000, that are centrally fueled or capable of being centrally fueled and are owned, operated, leased, or otherwise controlled by a governmental entity or other person who owns, operates, leases, or otherwise controls 50 or more such vehicles, by any person who controls such person, by any person controlled by such person, and by any person under common control with such person, except that such term does not include—

(A)Motor vehicles held for lease or rental to the general public;

(B)Motor vehicles held for sale by motor vehicle dealers, including demonstration motor vehicles;

(C)Motor vehicles used for motor vehicle manufacturer product evaluations or tests;

(D)Law enforcement motor vehicles;

(E)Emergency motor vehicles;

(F)Motor vehicles acquired and used for military purposes that the Secretary of Defense has certified to the Secretary must be exempt for national security reasons;

(G)Nonroad vehicles, including farm and construction motor vehicles; or

(H)Motor vehicles which under normal operations are garaged at personal residences at night. (42 U.S.C. 13211(9)) The key limitations in this definition include:

(1)Only light duty vehicles (i.e., vehicles less that 8,500 GVWR) are covered, and all medium-duty and heavy duty vehicles are excluded;

(2)the vehicles must be part of a fleet of 20 vehicles used primarily in a large metropolitan area;

(3)the vehicles must be centrally fueled or capable of being centrally fueled;

(4)they must be owned or controlled by a local government or an entity that owns at least 50 such vehicles;

(5)fleets of rental vehicles are excluded;

(6)law enforcement and emergency vehicles are excluded; and

(7)vehicles garaged at personal residences are excluded. The Replacement Fuel Goal is in terms of producing sufficient replacement fuels to replace on an energy equivalent basis, a specified percentage of the projected consumption of motor fuel in the United States for each such year, with at least one half of such replacement fuels being domestic fuels. (42 U.S.C. 13252(b)(2)) Section 301(12) of EPAct 1992 defines “motor fuel” as “any substance suitable as fuel for a motor vehicle.” (42 U.S.C. 13211(12)) Moreover, the term motor vehicle is defined in section 301(13) of EPAct 1992, through reference to 42 U.S.C. 7550(2), as a self-propelled vehicle that is designed for transporting persons or property on a street or highway. (42 U.S.C. 13261(13)) As DOE is required to evaluate the Replacement Fuel Goals established in section 502(b)(2) in terms of the capacity of producing sufficient replacement fuels to offset a certain percentage of U.S. “motor fuel” consumption, DOE, for the purposes of Title V of EPAct 1992, has interpreted the term motor fuel to include all fuels that are used in motor vehicles. This includes fuels used in light-, medium-, and heavy-duty on-road vehicles. 71 FR 54771 (September 9, 2006) B. Key Statutory Requirements The issue DOE addresses in this document is whether a Private and Local Government Fleet Requirement is “necessary” under section 507(e) of EPAct 1992. (42 U.S.C. 13257(e)(1)) Under section 507(e)(1) a Private and Local Government Fleet shall be promulgated if DOE determines such a program is “necessary.” (42 U.S.C. 13257(e)(1)) A Private and Local Government Fleet Requirement “shall be considered necessary” only if

(1)DOE finds that “the goal of replacement fuel use * * * is not expected to be actually achieved * * * without such a fleet requirement program;” and

(2)“such goal is practicable and actually achievable * * * through implementation of such a fleet requirement program in combination with voluntary means and the application of other programs relevant to achieving such goals.” (42 U.S.C. 13257(e)(1)(A) and (B)) EPAct 1992 authorizes DOE to conduct two separate rulemakings in order to determine whether to promulgate a Private and Local Government Fleet Requirement. First, section 507(b) directs DOE to conduct an early rulemaking, to be completed by December 15, 1996. (42 U.S.C. 13257(b)) The deadline for the “early rulemaking” passed without final action and has no continuing relevance. The second rulemaking provision is under section 507(e), which directs DOE to make a “necessity” determination by January 1, 2000. (42 U.S.C. 13257(e)(1)) It is under section 507(e) that DOE issues today's document. C. Other Related Requirements There are a number of other sections of EPAct 1992 which must be weighed in considering a potential Private and Local Government Fleet Requirement, primarily under the second prong of the “necessity” determination. These considerations include how such a requirement would be limited in application and practice, and other considerations and steps related to the determination process. Under section 507(i), a promulgated Private and Local Government Fleet Requirement must provide for an exemption of a fleet from the applicable requirements on grounds of:

(1)Non-availability of appropriate AFVs and alternative fuels;

(2)non-availability of appropriate alternative fuels; and

(3)with respect to local government entities, financial hardship. (42 U.S.C. 13527(i)) EPAct 1992 furthermore contains a petition provision in section 507(n). That section provides that: As part of the rule promulgated * * * pursuant to subsection * * *

(g)of this section, the Secretary shall establish procedures for any fleet owner or operator or motor vehicle manufacturer to request that the Secretary modify or suspend a fleet requirement program * * * nationally, by region, or in an applicable fleet area because, as demonstrated by the petitioner, the infrastructure or fuel supply or distribution system for an applicable alternative fuel is inadequate to meet the needs of a fleet. (42 U.S.C. 13527(n)) As a result, even to the extent a fleet constitutes a “fleet” under the narrow EPAct 1992 definition, and does not otherwise qualify for one of the statutory exemptions, it could petition for relief or suspension of a fleet mandate for any one of several different reasons. Section 507(m) of EPAct 1992 requires DOE to consult with the Secretary of Transportation

(DOT)and Administrator of the Environmental Protection Agency

(EPA)and other appropriate agencies in carrying out the requirements of section 507. DOE provided a pre-publication draft of today's notice of proposed rulemaking to DOT, EPA, and the Office of Management and Budget for their review. D. No Fuel Use Requirement Authority It is important to note that the ability of a Private and Local Government Fleet Requirement to affect petroleum consumption also depends, in significant part, on whether DOE can require covered fleets to use alternative or replacement fuels in addition to requiring that they acquire AFVs. The only explicit requirements for fuel use in EPAct 1992 are contained in section 501(a)(4), which applies only to alternative fuel provider fleets, and section 302(a)(2) (amending section 400AA of the Energy Policy and Conservation Act), which applies only to Federal fleets. (42 U.S.C. 13251(a)(4) and 6374(a)) Section 507 of EPAct 1992, which concerns private and local government fleets, does not contain any similar provision, nor does it contain a provision either authorizing DOE to mandate fuel use or explicitly prohibiting DOE from mandating fuel use. DOE believes that because Congress specifically required use of alternative fuel in sections 501(a)(4) and 302(a)(2) of EPAct 1992, but not in section 507, the omission was deliberate. As a result, DOE believes that Congress did not intend for DOE, when acting under section 507, to have authority to promulgate regulations containing a requirement that fleet vehicles use particular types of fuel. This interpretation is consistent with Congressman Philip Sharp(s remarks when he called up the conference report on EPAct 1992 for U.S. House of Representatives approval. Congressman Sharp was one of the key architects of EPAct 1992, and the floor manager for the bill in the House of Representatives. Congressman Sharp said: Under section 501, covered persons must actually run their alternative fueled vehicles on alternative fuels when the vehicle is operating in an area where the fuel is available. This requirement was not included in the fleet requirement program under section 507, because the conferees were concerned that the alternative fuel providers might charge unreasonable fuel prices to the fleets that are not alternative fuel providers if such fleets were required to use the alternative fuel. 138 *Cong. Rec.* H11399 at H11400 (October 5, 1992). III. Background On August 7, 1996, and as required by EPAct 1992 sections 507(a)(3) and (b), DOE published in the **Federal Register** an advance notice of proposed rulemaking (ANOPR) to evaluate progress toward achievement of the Replacement Fuel Goals in EPAct 1992, identify problems with achieving those goals, assess the adequacy and practicability of the goals, and consider actions needed to achieve the goals. 61 FR 41032. DOE intended this notice to stimulate comments to assist DOE in making decisions concerning future rulemaking actions and non-regulatory initiatives to promote alternative fuels and AFVs. Three hearings were held to receive oral comments on the ANOPR. They were held on September 17, 1996, in Dallas, Texas; on September 25, 1996, in Sacramento, California; and on October 9, 1996, in Washington, DC. A total of 70 persons spoke at the three hearings, and 105 written comments were received by November 5, 1996. On April 23, 1997, DOE published in the **Federal Register** a Notice of Termination stating that DOE would not promulgate regulations to implement AFV requirements for private and local government fleets pursuant to the early rulemaking schedule of EPAct 1992 section 507(a)(1). 62 FR 19701. On April 17, 1998, and for the purposes of EPAct 1992 sections 507(e), (g), and (k), DOE published in the **Federal Register** an ANOPR that asked for comments to assist DOE in making decisions concerning future rulemaking actions and non-regulatory initiatives to promote alternative fuels and alternative fueled vehicles. 63 FR 19372. DOE held three hearings to receive oral comments on the ANOPR. They were held on May 20, 1998, in Los Angeles, California; on May 28, 1998, in Minneapolis, Minnesota; and on June 4, 1998, in Washington, DC. A total of 110 persons spoke at the three hearings, and/or submitted written comments. On January 12, 2000, consistent with section 507(h) of EPAct 1992 (42 U.S.C. 13257(h)), DOE published in the **Federal Register** a notice, stating that it was extending by 90 days the January 1, 2000, deadline contained in section 507(e) in order to provide additional time for consultations with State and local officials, as required by Executive Order 13132. 65 FR 1831. On July 20, 2000, DOE published in the **Federal Register** a notice further extending the comment period in order to provide an opportunity for additional public comment, particularly comment from State and local governments, regarding the section 507 rulemaking proceedings. 65 FR 44987. DOE held workshops on August 1, 2000 in Chicago, Illinois; on August 22, 2000, in Denver, Colorado; and on September 26, 2000, in Washington, DC. On January 2, 2002, EarthJustice, on behalf of the Center for Biological Diversity, Bluewater Network, and Sierra Club, filed a lawsuit in the U.S. District Court for the Northern District of California which, in part, sought to compel DOE to “issue a proposed rule and final determination on the necessity of a private and municipal fleet program.” (Plaintiffs Complaint for Injunctive and Declaratory Relief, pg 55, paragraph 171 dated January 2, 2002). On July 26, 2002, the Court granted plaintiffs' motion for summary judgment on the issue of whether DOE had missed the deadline set forth in EPAct 1992 section 507(e) for completing the rulemaking. *See Center for Biological Diversity* v. *Abraham, et al.* (218 F.Supp.2d 1143 (N.D. Cal., 2002)). On September 27, 2002, the District Court ordered DOE to complete its proposed rulemaking by January 27, 2003, and its final rule by November 27, 2003. *See Center for Biological Diversity* v. *Abraham, et al.* , No. C 02-00027 (N.D. Cal., 2002). On January 17, 2003, the Court subsequently granted a 30-day extension (to February 26, 2003) of the deadline for DOE to complete work on this notice of proposed rulemaking. ( *Center for Biological Diversity* v. *Abraham, et al.* No. C 02-00027 (N.D. Cal., 2002), Order No. 55 (Entered 01/23/2003)). On March 4, 2003, as required by section 507 of EPAct 1992 and in accordance with a Court order under *Center for Biological Diversity* v. *Abraham, et al.* , DOE issued a notice of a proposed determination regarding the Private and Local Fleet Requirement, in which DOE tentatively determined that a requirement was not “necessary,” and therefore should not be imposed. 68 FR 10320. DOE finalized the proposed determination that a regulation requiring private and local government fleets to acquire AFVs is not “necessary” and, therefore, cannot be promulgated, which was published January 29, 2004. 69 FR 4219. The necessity determination was based on DOE's findings that a private and local government fleet vehicle acquisition mandate would not appreciably increase the percentage of alternative fuel or replacement fuel used in motor vehicles in the United States and thus would make no more than a negligible contribution to the achievement of EPAct 1992's existing 2010 Replacement Fuel Goal of 30 percent, or of a revised Replacement Fuel Goal were one adopted. Subsequent to the publication of the January 29, 2004, final rule, DOE was sued in Federal court by the Center for Biological Diversity and Friends of the Earth for failing to impose a private and local government fleet acquisition mandate and for not revising the replacement fuel production goal for 2010 as part of its determination. On March 6, 2006, the U.S. District Court for the Northern District of California vacated DOE's final determination regarding the Private and Local Government Fleet Mandate and ordered DOE to revise the replacement fuel production goal for 2010. *See Center for Biological Diversity* v. *U.S. Department of Energy et al.* , 419 F.Supp. 2d 1166 (N.D. Cal 2006). The Court directed DOE to prepare notices of proposed rulemaking and final rules on both the Replacement Fuel Goal for 2010 and the private and local government fleet determination. (Id. at 1171.) On September 19, 2006, DOE published a notice announcing its proposed determination that the EPAct 1992 Replacement Fuel Goal of 30 percent by 2010 was not achievable and announced its proposal to extend the time for achieving the 30 percent replacement fuel production capacity goal to 2030. 71 FR 54771. In that notice, DOE evaluated four scenarios, which identified projected replacement fuel capacities of 8.65 percent, 17.84 percent, 35.25 percent, and 47.06 percent, by 2030. (Updated analyses conducted for the final rule resulted in the first and third of these becoming 7.38 percent and 33.13 percent, respectively.) These projections reflected considerations of numerous variables including oil prices, technological breakthroughs, and market acceptance. The modified goal proposed by DOE fell in the mid-range among these scenarios. On March 15, 2007, DOE published a final rule for the Replacement Fuel Goal. 72 FR 12041. In the final rule, DOE determined that the EPAct 1992 goal of establishing sufficient replacement fuel production capacity to replace 30 percent on an energy equivalent basis of all U.S. motor fuel by 2010 was not achievable. This determination was based on a similar evaluation of the projected U.S. production capacity of replacement fuels as was presented in the notice of proposed rulemaking. The Replacement Fuel Goal final rule extended the 30 percent Replacement Fuel Goal out to 2030 based on an analysis similar to that presented in the notice of proposed rulemaking. The Replacement Fuel Goal final rule complied with DOE's obligation under section 504(b) of EPAct 1992 to “establish goals that are achievable, for the purposes of this title.” (42 U.S.C. 13254(b)) Today's document revisits the Local and Private Fleet Requirement determination in light of the modified Replacement Fuel Goal. IV. Analysis for Private and Local Fleets Rule Determination As stated above, DOE must issue a Private and Local Government Fleet Requirement if DOE determines that such a requirement is “necessary.” (42 U.S.C. 13257(e)(1)) For the purpose of this determination, a Private and Local Government Fleet Requirement is necessary if:

(1)The Replacement Fuel Goal under section 502(b)(2)(B), or as modified under section 504, is not actually expected to be achieved by the 2010, or the date established under section 504, without such a fleet requirement; and

(2)Such a goal is practicable and actually achievable within the appropriate period, through implementation of such a fleet requirement in combination with voluntary means and the application of other programs relevant to achieving such goals. (42 U.S.C. 13257(e)(1)(A) and (B)) A. Achievability of the Replacement Fuel Goal As stated above, DOE recently determined that the Replacement Fuel Goal of 30 percent by 2010 established under section 502(b)(2)(B) is not achievable. 72 FR 12041. Pursuant to its statutory authority to do so, DOE established a modified goal by extending out the goal date to 2030, i.e., establishing a Replacement Fuel Goal of 30 percent by 2030. 72 FR 12041. In establishing the modified Replacement Fuel Goal, DOE determined that such a goal is achievable. In evaluating and modifying the goal, DOE was directed to balance considerations in order to establish goals that are “achievable.” (42 U.S.C. 13254(b)) The Replacement Fuel Goal must promote replacement fuels to the “maximum extent possible” while remaining technologically and economically feasible. (42 U.S.C. 13254(a) and (b)(2)) DOE determined that the modified goal meets these requirements, for several reasons. First, DOE based its analysis on the best information available, from published and peer-reviewed sources. In particular, much of DOE's analysis was based on the Energy Information Administration's

(EIA)Annual Energy Outlook

(AEO)2005 through 2007. Second, DOE's analysis generally was based on the current budget and policy framework, under which many technologies show reasonable potential for success and market penetration. Thus, the analysis assumed virtually no major new policies or funding initiatives beyond those already in place. Third and last, the modified goal balances the minimum and maximum projected replacement fuel production capacities from several reasonable scenarios. A complete discussion of the analysis relied on in the final rule for the modified Replacement Fuel Goal and the supporting documents can be reviewed at *http://www1.eere.energy.gov/vehiclesandfuels/epact/private/plg_docket.html.* In evaluating a modification to the Replacement Fuel Goal, DOE analyzed four scenarios to generate a range of potential replacement fuel production capacities. In none of these scenarios did DOE include potential increases in alternative fuel production as a result of a Private and Local Government Fleet Requirement. As such DOE determined that the modified Replacement Fuel Goal of 30 percent by 2030 is expected to be achieved without establishing a Private and Local Government Fleet Requirement. Given the determination in the modified Replacement Fuel Goal final rule that the modified goal is expected to be achieved by 2030 without a Private and Local Government Fleet Requirement, DOE has tentatively determined that the first prong of the “necessity” determination has not been met. B. Potential Contribution of a Private and Local Government Fleet Requirement to the Production Capacity of Alternative Fuel The second prong of the “necessity” determination requires DOE to find that the Replacement Fuel Goal is actually achievable were a Private and Local Fleet Requirement established. (42 U.S.C. 13257(e)(1)(B)) As stated above, DOE has determined that the modified Replacement Fuel Goal is achievable. Although DOE has tentatively determined that the Private and Local Government Fleet Requirement is not necessary to achieve the modified Replacement Fuel Goal, DOE also performed a preliminary analysis to estimate the contribution that such a requirement would make to the Replacement Fuel Goal, if such a requirement were established. In the mid-1990s, DOE's initial estimate was between 1.7 and 7.3 million AFVs would be acquired over 19 years if a possible Private and Local Government Fleet Requirement was implemented. The purchases of AFVs under such a fleet program level out at approximately 400,000 to 500,000 AFVs annually starting in 2010. As discussed below, however, more detailed analyses showed DOE's initial estimates were probably too high. Several follow-up analyses were conducted by DOE from 1996 to 2000 to attempt to determine not just how many AFVs would be required to be acquired, but more importantly, what the potential contribution of a Private and Local Government Fleet Requirement would be to replacing U.S. motor fuel consumption. The limitations on the potential contribution of a private and local government fleet program to the Replacement Fuel Goal are discussed in section II above. In brief, however, one DOE report issued in 1996 estimated that total fuel use from all fleets, including private and local government fleets, potentially covered by EPAct 1992 fleet programs to be approximately 1.2 percent of U.S. gasoline use. *See Assessment of Costs and Benefits of Flexible and Alternative Fuel Use in the U.S. Transportation Sector, Technical Report Fourteen: Market Potential and Impacts of Alternative Fuel Use in Light-Duty Vehicles: A 2000/2010 Analysis* (DOE/PO-0042) (January 1996) [hereinafter *Technical Report 14* ]. DOE's *Section 506 Report* 2 was only slightly more optimistic, indicating that “[a]lternative fuel use by EPAct [1992] covered fleets, even with the contingent mandates for private and local government fleets, is unlikely to provide more than about 1.5 percent replacement fuel use[.]” Section 506 Report at p. 35. In either case, subtracting out the portion of replacement fuel use represented by the existing (Federal, State, and alternative fuel provider) fleet programs would leave the potential private and local government fleet program contribution closer to a maximum of 1 percent. 2 *See* Energy Efficiency and Renewable Energy, DOE, Replacement Fuel and Alternative Fuel Vehicle—Technical and Policy Analysis p. viii-ix (Dec. 1999—Amendments Sept. 2000); *http:// www.ccities.doe.gov/pdfs/section506.pdf.* However, both these earlier reports included calculations based only upon the percentage of light-duty gasoline fuel use. For purposes of the goal contained in EPAct 1992, DOE has repeatedly asserted that fuel replacement should be considered in the context of all on-highway motor fuel use, including heavy-duty vehicle fuel use, because the goal contained in section 502 of EPAct 1992 are to be considered in the context of the “projected consumption of motor fuel in the United States.” (42 U.S.C. 13252(b)(2)). The figures provided in these earlier reports, when adjusted to reflect the impact on all on-highway motor fuel use, show that a Private and Local Government Fleet Rule—even with a fuel use requirement, which as noted above DOE does not have the authority to impose—would provide at most on the order of 0.7-0.8 percent motor fuel replacement, assuming virtually complete use of alternative fuel in the AFVs required. Both the analyses in *Technical Report 14* and the *Section 506 Report* were conducted before DOE had much experience with implementation and operation of the EPAct 1992 fleet programs. DOE's experience with those programs now has shown that the number of fleets originally envisioned to be covered was far larger than the number of fleets covered in actual practice, and that these fleets could not, in the absence of a specific mandate, be assumed to use alternative fuel in their AFVs 100 percent of the time. Thus, DOE believes that the figures in these reports probably overstated the potential impact of a Private and Local Government Fleet Rule. This view was supported by analyses contained in a later DOE-supported report, * The Alternative Fuel Transition: Results from the TAFV Model of Alternative Fuel Use in Light-Duty Vehicles 1996-2000 3 (TAFV Model Report), * which incorporated more realistic assumptions regarding these fleet programs. The *TAFV Model Report* stated that, 3 ORNL.TM2000/168) (September 17, 2000) *http://pzl1.ed.ornl.gov/tafv99report31a_ornltm.pdf.* In particular, over all of the price scenarios, we find that the [private and local government fleet] rule increases the alternative fuel penetration in 2010 from 0.12 % (without the private and local government rule) to, at most, 0.37 % [with a private and local government rule] of total fuel sales. *TAFV Model Report* at p. 28. Thus, the analysis in the *TAFV Model Report* placed contributions from the Private and Local Government Fleet Rule at 0.25 percent. As with *Technical Report 14* and the *Section 506 Report,* these percentages were calculated based on the total fuel sales of the fuel used by light-duty vehicles only. The projected contribution from a potential rule dropped to below 0.2 percent when evaluated as part of all on-highway motor fuel use and can be reconciled somewhat with those found by the earlier reports. As indicated in section II above, DOE does not have authority to mandate that AFVs acquired actually operate on alternative fuels. Experience with the existing State Fleet Program, where fleets are similarly not required to use alternative fuel, has shown that alternative fuel use rates are typically in the ten to twenty-five percent range. Thus, when adjusting the levels found in *Technical Report 14* and the *Section 506 Report* by such utilization levels, the overall projected impacts likely end up in about the 0.2 percent range. It also should be noted that during earlier rulemaking processes, no commenter presented any persuasive analysis or data to counter or dispute the data and conclusions in *Technical Report 14,* the *Section 506 Report,* or the *TAFV Model Report.* Therefore, DOE concluded from these reports that a Private and Local Government Fleet Requirement under authority provided to DOE by EPAct 1992 section 507 would be expected to contribute, at best, an extremely small amount toward achievement of the Replacement Fuel Goal (below 1 percent and likely below 0.2 percent of all on-highway motor fuel use). Even without the additional statutory limitations described above that EPAct 1992 places on such a Private and Local Government Fleet Requirement, the contribution from such a mandate to the EPAct 1992 Replacement Fuel Goal would be very small. When the prior private and local fleets determination was conducted in 2003 through 2004, the analyses relied upon by DOE were the most recent, relevant analyses that it had. As such, these were all dated 2000 or earlier. With the passage of several more years between that determination and this rulemaking, the DOE believed it was important to conduct an updated analysis to determine if circumstances had changed sufficiently to warrant imposition of acquisition requirements upon fleets. The approach taken was to first conduct a somewhat more simplified analysis than the previous ones, and if this analysis indicated significantly different results, than a more detailed and lengthy analysis would be commissioned. To conduct the current analysis, the Department relied, in large part, upon fleet industry data developed by *Automotive Fleet,* a leading publisher in the field. Each year, *Automotive Fleet* publishes an annual Fact Book, which includes detailed data on a number of fleet subjects. Unfortunately, *Automotive Fleet* does not provide the specific data necessary to support today's draft determination (namely the likely number of AFVs that would need to be acquired by fleets meeting EPAct 1992's coverage criteria). Therefore the Fact Book data was used as a starting point, with other information (such as from the EIA Annual Energy Outlook) and various assumptions used to further refine the data to move closer to the specific types of numbers required for today's action. For the purpose of today's notice, two analyses were conducted in order to determine what portion of U.S. motor fuel use might be replaced with replacement fuels by vehicle acquisitions resulting from a potential fleet rule. The first method compares annual acquisitions under a potential rule to the total annual U.S. acquisitions. The second method of analysis compares vehicles in operation due to a potential rule to all vehicles in operation. Both methods were used as analogs to determine the overall percentage replacement of U.S. motor fuel use. According to the 2005 Fact Book (which reports data for 2004), fleets in the United States acquired 2,849,837 light-duty vehicles (cars and light trucks), of which 1,944,581 (68.2 percent) were acquired for rental fleets. Since rental vehicles are specifically excluded from coverage under EPAct 1992 section 301(9) (42 U.S.C. 13211(9)), the remaining potentially covered vehicle acquisitions drop to 905,256 vehicles. Note that this does not exclude any leased vehicles, of which the Fact Book indicates there were another 326,832 acquired in 2004. Many of these may ultimately be excluded as perhaps either shorter term leases or vehicles specifically held for lease to others (another excluded class). Since there is no way to determine which portion of these leased vehicles would most likely be excluded, the DOE chose to rely on the 905,256 value as the number of vehicles purchased by fleets that would potentially be subject to a Private and Local Government Fleet Requirement. Next, the current annual acquisitions of vehicles already subject to EPAct 1992 fleet requirements needed to be subtracted. Data was obtained from the Department's EPAct 1992 Web sites, at *http://www.eere.energy.gov/vehiclesand fuels/epact/* . For Federal Fleets, there were 18,426 covered light-duty vehicles acquired in 2004. For State and Alternative Fuel Provider Fleets, there were 13,374 covered light-duty vehicles acquired. Thus, the remaining number of potentially covered acquisitions drops to 873,456. In 2004, a total of 16,537,440 light-duty vehicles were acquired throughout the United States. This means that the maximum potential pool of covered light-duty vehicles under a Private and Local Fleet Requirement would represent 5.3 percent of total acquisitions for the year. Because the maximum acquisition requirement percentage under the potential Private and Local Government Fleet Rule is 70 percent (42 U.S.C. 13257(g)), the maximum potential number of AFVs that would need to be acquired on an annual basis would be 611,419. This number represents approximately 3.7 percent of all light-duty vehicles acquired in the United States. DOE's experience, however, is that the maximum potential number of required acquisitions is quite different from the actual number of required acquisitions. This is because section 301(9) includes several basic requirements for coverage of a fleet's acquisitions. (42 U.S.C. 13211(9)) First, the fleet must be owned or controlled by an entity that owns at least 50 light-duty vehicles nationwide, of which 20 must reside in one of the 125 covered Metropolitan Statistical Areas (MSAs, with 1980 population of more than 250,000) and are centrally fueled or capable of being centrally fueled. (42 U.S.C. 13211(9)). In arriving at the 50 and 20 light-duty vehicle minimums, several classes of vehicles are excluded from consideration, including emergency and law enforcement vehicles (42 U.S.C. 13211(9)(D) and (E), vehicles taken home at night by employees (42 U.S.C. 13211(9)(H)), and non-road vehicles (42 U.S.C. 13211(9)(G)). With these exclusions the number of potentially required AFV acquisitions drops even further. For example, if just the 2004 acquisitions of Ford Crown Victorias and Chevy Impalas are reviewed, the non-rental numbers acquired for commercial and government fleets totals nearly 90,000 vehicles (according to the 2005 Fact Book). These two vehicles are often acquired for use as police vehicles, or else taxicabs (a class of vehicles whose status under the program is undetermined for this analysis and for which many might not ultimately be covered due to fleet size, location, or other reasons). Based on DOE's experience with the Federal, State, and Alternative Fuel Provider Fleet requirements and the vehicle classes excluded from consideration by EPAct 1992, DOE considered two scenarios for this analysis, one where 50 percent of the maximum potential annual acquisitions are required (305,710 AFVs), and one (considered much more likely) where 25 percent of the maximum potential annual acquisitions are required (152,855 AFVs). These two scenarios thus represent 1.8 and 0.9 percent, respectively, of overall annual light-duty acquisitions. So the net result of this portion of the analysis is that a fleet rule could result in requirements to acquire between 150,000 and just over 600,000 AFVs each year, representing between approximately 1 to 3.7 percent of total annual light-duty vehicle acquisitions, based on 2004 data. This portion of the annual acquisition analysis is summarized below in Figure 1. Figure 1.—Summary of Annual Acquisition Analysis, Fleet Vehicles Total New Cars and Trucks Registered by Fleets in 2004 2,849,837 Total New Cars and Trucks Registered by Rental Fleets in 2004 1,944,581 Percentage in Rental Fleets 1 68.2 Remainder of New Cars and Trucks, not in Rental Fleets 2004 905,256 New Covered LDV acquisitions in 2004, Federal Fleet 18,426 New Covered LDV acquisitions in 2004, State and Fuel Provider Fleets 13,374 Net New Cars/Truck Registered, not in Fleets Already Covered 873,456 Total New LDV Registrations, 2004 16,537,440 Max Potential Portion of 2004 Fleet acquisitions covered out of total registrations 5.3% EPAct 1992 Maximum Acquisition Requirement 70% Max Potential AFV Acquisitions per year, numbers of AFVs required 611,419 Max Potential AFV Acquisitions per year, percentage of total acquisitions 3.7% If 50% of maximum potential actually covered, number of AFVs required 305,710 If 50% of maximum potential actually covered, percentage of total acquisitions 1.8% If 25% of maximum potential actually covered, number of AFVs required 152,855 If 25% of maximum potential actually covered, percentage of total acquisitions 0.9% The analysis above is in the context of light-duty vehicles and would represent between one and 3.7 percent of motor fuel consumption by light-duty vehicles. For the purpose of section 507(e)(1)(B), DOE must evaluate the potential contribution of a Private and Local Government Fleet Requirement to the Replacement Fuel Goal. (42 U.S.C. 13257(e)(1)(B)) The Replacement Fuel Goal is in terms of motor fuel consumption, including consumption from medium- and heavy-duty vehicles. As indicated in the Energy Information Administration's Annual Energy Outlook 2007 (AEO 2007), light-duty vehicles only account for 75.22 percent of on-road motor fuel use in the U.S., with the remainder consumed by medium- and heavy-duty classes, neither of which is covered by the Private and Local Government Fleet Requirement. In terms of total motor fuel consumption, the contribution of the potential AFV acquisitions under a Private and Local Government Fleet Requirement must be adjusted down to 0.7 to 2.8 percent. The expected contribution of AFVs acquired under a Private and Local Government Fleet to alternative fuel consumption must be further adjusted. As explained above, EPAct 1992 does not allow DOE to require alternative fuel use in the required AFVs, the potential consumption values represent the portion of petroleum consumption replaced at an alternative fuel use level of 100 percent. Experience with programs for which fuel use is not required (such as the State Fleet Program) indicates that the assumption of 100 percent alternative fuel use is not realistic. DOE has seen alternative fuel usage levels as low as 10 percent. For the purposes of this analysis, DOE looked at cases where alternative fuels were used 50, 25, and 10 percent of the time in the potentially required AFVs. These results yielded percentages of overall motor fuel consumption replaced of 0.1 to 1.4 percent, with the high value represented by the maximum potential case (already identified as overly optimistic) with a 50 percent alternative fuel use level. Thus, the likely range of consumption replaced is better represented by the 25 and 50 percent of maximum potential acquisition cases, which ranged from 0.1 to 0.7 percent. The summary for this portion of the analysis is shown in Figure 2, where the shaded zone represents the more likely range of results. Figure 2.—Summary of Annual Acquisition Analysis, Portion of Overall Motor Fuel Consumption Maximum potential acquisitions (percent) 50% of maximum potential acquisitions (percent) 25% of maximum potential acquisitions (percent) AFVs Required, Percentage of Total LDVs 3.7 1.8 0.9 Portion of Total Motor Fuel Use Due to LDVs 75.22 75.22 75.22 Potential Maximum Consumption Percentage for Required AFVs ( *100% Alternative Fuel Use* ) 2.8 1.4 0.7 Potential Consumption Percentage for Required AFVs ( *50% Alternative Fuel Use* ) 1.4 0.7 0.3 Potential Maximum Consumption Percentage for Required AFVs ( *25% Alternative Fuel Use* ) 0.7 0.3 0.2 Potential Maximum Consumption Percentage for Required AFVs ( *10% Alternative Fuel Use* ) 0.3 0.1 0.1 It should be noted that this likely range of consumption replacement under the potential rule, 0.1 to 0.7 percent, is very close to that predicted by the TAFV report in 2000 (0.2 to 0.8 percent). The second analysis, as indicated above, sought to use the portion of the in-use inventory of vehicles on the road in the U.S. that were represented by the cumulative numbers of AFVs acquired under the potential rule as a way to determine the portion of overall motor fuel use replaced. This case then assumes that once the program reaches the maximum acquisition requirement (70 percent), and levels off, that all relationships between the consumption of the required AFVs and the overall on-road fleet are relatively unchanged over time. It also explicitly assumes that the AFVs acquired under this potential rule use the same amount of fuel, on average, as all other light-duty vehicles in operation in the United States. This second analysis, therefore, uses the annual AFV acquisition requirements identified in the first analysis, ranging from just over 150,000 AFVs/year (25 percent of maximum potential acquisitions covered) to just over 610,000 AFVs/year (for maximum potential acquisitions covered). The 2004 Fact Book identifies that the average amount of time a light-duty vehicle stays in a fleet ranges from 31 to 56 months depending on model type, or just a bit less than five years. Therefore, in order to provide an estimate of the maximum portion of the on-road fleet that could be AFVs due to the potential rule, the DOE chose to use a five-year period for AFVs to operate in the covered fleets. DOE requests comment on use of a five-year period, and requests comment on the use of alternative fuels in AFVs after they leave a covered fleet. The approach taken was to develop the percentage of the on-road vehicles in the United States that would be AFVs, once the potential Private and Local Government Fleet Requirements reached maximum, steady-state requirements. (Under section 507(g), the requirements actually include a ramp-up of the AFV acquisition requirements, starting at 20 percent and rising to 70 percent. (42 U.S.C. 13257(g))). This steady-state, maximum case status, therefore, would be determined by looking at the portion of the on-road fleet that would be AFVs based upon five years of acquisitions of the AFVs required under the program. For the maximum potential case, this meant roughly three million AFVs, while for the 50 percent and 25 percent of maximum potential cases this meant 1.5 million and 760,000 AFVs, respectively. Since AEO2007 identified the on-road inventory of light-duty vehicles in the United States in 2004 as just over 215 million vehicles, this means that the AFVs under this program would represent 0.4 to 1.4 percent of all light-duty vehicles on the road in the United States. But, as indicated in the first (annual acquisition) analysis above, light-duty vehicles only represent approximately 75 percent of U.S. motor fuel use. Therefore, even if everything else is equal concerning consumption patterns, the percentage of all light-duty vehicles that the AFVs under the potential program represent must be adjusted before identifying the likely replacement of petroleum consumption. Thus, if these AFVs are assumed to use alternative fuels one hundred percent of the time, the maximum replacement of petroleum due to these vehicles ranges from 0.3 to 1.1 percent. There is, however, one final adjustment that needs to be made. Just as in the first analysis, it must be noted that DOE cannot mandate alternative fuel use in these vehicles. To account for less than complete alternative fuel use, DOE further adjusted the analysis, developing estimates for alternative fuel use from ten to fifty percent of the time. Thus, the more likely contribution from the potential fleet rule ranged from 0.03 to 0.3 percent. Figure 3 summarizes these results. Figure 3.—Summary of Cumulative Analysis Maximum potential acquisitions 50% of maximum potential acquisitions 25% of maximum potential acquisitions AFVs Required Annually 611,419 305,710 152,855 AFVs Added to Fleet over Five Years, at Maximum Fleet Requirement (70%) 3,057,096 1,528,548 764,274 Total Number of Light-Duty Vehicles in Operation in the United States, 2004 215,370,000 215,370,000 215,370,000 Maximum Portion of On-Road LDV Fleet that are AFVs in this Program 1 1.4 1 0.7 1 0.4 Portion of U.S. Motor Fuel Use from Light-Duty Vehicles 75.22% 1 75.22 75.22% Potential Maximum Consumption Percentage for Required AFVs ( *100% Alternative Fuel Use* ) 1 1.1 1 0.5 1 0.3 Potential Consumption Percentage for Required AFVs ( *50% Alternative Fuel Use* ) 1 0.53 1 0.27 1 0.13 Potential Maximum Consumption Percentage for Required AFVs ( *25% Alternative Fuel Use* ) 1 0.27 1 0.13 1 0.07 Potential Maximum Consumption Percentage for Required AFVs ( *10% Alternative Fuel Use* ) 1 0.11 1 0.05 1 0.03 1 Percent. In summary, the updated analysis conducted for today's action does not appear to change significantly from those analyses relied upon for the previous private and local fleet determination. Under either updated analysis approach used now, the potential contribution from a Private and Local Government Fleet rule appears to be far below one percent, probably on the order of 0.2-0.3 percent, similar to the levels identified in the 2003-2004 determination. Therefore no further analyses were deemed necessary by DOE. V. Proposed Determination In the Replacement Fuel Goal rulemaking, DOE demonstrated how the modified goal could be achieved through a number of replacement fuel technologies, including biofuels, other alternative fuels, and energy efficiency. In setting the new goal, DOE did not assume imposition of a Private and Local Government Fleet Requirement. Indeed, given the number of years between now and 2030, and the fact that even if DOE were to establish a Private and Local Government Fleet Requirement, the overall projected impact would likely be on the order of about 0.2 percent, DOE believes there is no basis for finding that such a requirement is “necessary.” Therefore, DOE has tentatively determined that the Private and Local Government Fleet Requirement is not “necessary” as specified in section 507(e)(1) of EPAct 1992, and DOE is not proposing to establish a Private and Local Fleet Requirement. VI. Opportunity for Public Comment A. Participation in Rulemaking Interested persons are invited to participate in this proceeding by submitting written data, views, or comments with respect to the subject set forth in this notice and the proposals made by DOE. DOE encourages the maximum level of public participation possible in this proceeding. Individual consumers, representatives of consumer groups, manufacturers, associations, coalitions, States or other government entities, and others are urged to submit written comments on the proposal. DOE also encourages interested persons to participate in the public hearing announced at the beginning of this notice. Whenever applicable, full supporting rationale, data and detailed analyses should also be submitted. B. Written Comment Procedures Written comments (eight copies) should be identified on the outside of the envelope, and on the comments themselves, with the designation: “Alternative Fuel Transportation Program: Private and Local Government Fleet Determination, NOPR, RIN 1904-AB69” and must be received by the date specified at the beginning of this notice. In the event any person wishing to submit written comments and cannot provide eight copies, alternative arrangements can be made in advance by calling Mr. Dana O'Hara at

(202)586-9171. Additionally, DOE would appreciate an electronic copy of the comments to the extent possible. Electronic copies should be e-mailed to *regulatory_info@afdc.nrel.gov* . DOE is currently using Microsoft Word. All comments received on or before the date specified at the beginning of this notice of proposed rulemaking and other relevant information will be considered by DOE before final action is taken on the proposal. All comments submitted will be made available in the electronic docket set up for this rulemaking. This docket will be available on the World Wide Web at the following address— *http://www1.eere.energy.gov/vehiclesandfuels/epact/private/index.html.* Pursuant to the provisions of 10 CFR 1004.1, anyone submitting information or data that he or she believes to be confidential and exempt by law from public disclosure should submit one complete copy of the document, as well as seven

(7)copies, if possible, from which the information has been deleted. DOE will make a determination as to the confidentiality of the information and treat it accordingly. C. Public Hearing Procedures The time and place of the public hearing are set forth at the beginning of this notice. DOE invites any person who has an interest in this proceeding, or who is a representative of a group or class of persons that has an interest, to make a request for an opportunity to make an oral presentation at the hearing. Requests to speak should be sent to the address or phone number indicated in the ADDRESSES section of this notice and should be received by the time specified in the DATES section of this notice. The person making the request should briefly describe his or her interest in the proceeding and, if appropriate, state why that person is a proper representative of the group or class of persons that has such an interest. The person also should provide a phone number where he or she may be reached during the day. Each person selected to speak at the public hearing will be notified as to the approximate time that he or she will be speaking. A person wishing to speak should bring ten copies of his or her statement to the hearing. In the event any person wishing to speak at the hearing cannot meet this requirement, alternative arrangements can be made in advance by calling Mr. Dana O'Hara, at

(202)586-9171. DOE reserves the right to select persons to be heard at the hearing, to schedule their presentations, and to establish procedures governing the conduct of the hearing. The length of each presentation will be limited to ten minutes, or based on the number of persons requesting to speak. A DOE official will be designated to preside at the hearing. The hearing will not be a judicial or an evidentiary-type hearing, but will be conducted in accordance with 5 U.S.C. 553 and section 501 of the Department of Energy Organization Act. (42 U.S.C. 7191) At the conclusion of all initial oral statements, each person may, if time allows, be given the opportunity to make a rebuttal statement. The rebuttal statements will be given in the order in which the initial statements were made. Any further procedural rules needed for the proper conduct of the hearing will be announced by the Presiding Officer at the hearing. If DOE must cancel the hearing, DOE will make every effort to publish an advance notice of such cancellation in the **Federal Register** . Notice of cancellation will also be given to all persons scheduled to speak at the hearing. The hearing may be canceled in the event no public testimony has been scheduled in advance. VII. Regulatory Review A. Review Under Executive Order 12866 This proposed regulatory action has been determined to be a “significant regulatory action” under Executive Order 12866, Regulatory Planning and Review. 58 FR 51735 (October 4, 1993). Accordingly, today's action was subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA). A draft of today's action and any other documents submitted to OIRA for review are a part of the rulemaking record and are available for public review as provided in the ADDRESSES section of this notice of proposed rulemaking. B. Review Under Regulatory Flexibility Act The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires preparation of a regulatory flexibility analysis for any rule that is likely to have a significant economic impact on a substantial number of small entities. The proposed negative determination under EPAct 1992 section 507(e) would not result in compliance costs on small entities. Therefore, DOE certifies that today's proposed determination will not have a significant economic impact on a substantial number of small entities, and accordingly, no initial regulatory flexibility analysis has been prepared. C. Review Under the Paperwork Reduction Act Because DOE has proposed not to promulgate requirements for private and local government fleets, no new recordkeeping requirements, subject to the Paperwork Reduction Act, 44 U.S.C. 3501, *et seq.* , would be imposed by today's regulatory action. D. Review Under the National Environmental Policy Act of 1969

(NEPA)DOE has not prepared an environmental impact statement

(EIS)or an environmental assessment

(EA)for this rulemaking, and has tentatively determined that neither is required. This notice implements the March 6, 2006, Order of the U.S. District Court of California to issue a proposed determination under section 507(e) of EPAct 1992. *Center for Biological Diversity,* 419 F.Supp 2d 1166. The Court order held that the Secretary is not “obligated to prepare an impact statement under NEPA in either accepting or rejecting a fleet rule.” *Id.* at 1173. EPAct 1992 requires DOE to issue a Private and Local Government Fleet Requirement if such a requirement is necessary. (42 U.S.C. 13257(e)) Today's notice tentatively determines that a Private and Local Government Fleet Requirement is not necessary, and therefore DOE is not proposing a requirement. Once the Secretary has made the determination, the Secretary has no discretion as whether to issue the requirement. *See Center for Biological Diversity,* 419 F.Supp. 2d 1166, 1173. E. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, Civil Justice Reform, 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements:

(1)Eliminate drafting errors and ambiguity;

(2)write regulations to minimize litigation; and

(3)provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation:

(1)Clearly specifies the preemptive effect, if any;

(2)clearly specifies any effect on existing Federal law or regulation;

(3)provides a clear legal standard for affected conduct while promoting simplification and burden reduction;

(4)specifies the retroactive effect, if any;

(5)adequately defines key terms; and

(6)addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive Agencies to review regulations in light of applicable standards in section 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. Executive Order 12988 does not apply to this rulemaking notice because DOE is not proposing any regulations and instead is proposing to determine that regulations are not “necessary” under section 507(e) of EPAct 1992. F. Review Under Executive Order 13132 Executive Order 13132, Federalism, 64 FR 43255 (August 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. DOE has examined today's proposed determination and has determined that it 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. Because DOE is proposing to determine that a private and local government fleet AFV program is not “necessary” under section 507(e) and therefore is not proposing the promulgation of such a program, no significant impacts upon State and local governments are anticipated. The position of State fleets currently covered under the existing EPAct 1992 fleet program is unchanged by this action. G. Review of Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995, Public Law 104-4, requires each Federal agency to assess the effects of Federal regulatory actions on State, local and tribal governments and the private sector. The Act also requires a Federal agency to develop an effective process to permit timely input by elected officials on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published in the **Federal Register** a statement of policy on its process for intergovernmental consultation under the Act (62 FR 12820). Today's notice does not propose or contain any Federal mandate, so the requirements of the Unfunded Mandates Reform Act do not apply. H. Review of Treasury and General Government Appropriations Act, 1999 Section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, requires Federal agencies to issue a Family Policymaking Assessment for any proposed rule that may affect family well-being. Today's notice of proposed determination would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment. I. Review of Treasury and General Government Appropriations Act, 2001 The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today's notice under the OMB and DOE guidelines, and has concluded that it is consistent with applicable policies in those guidelines. J. Review Under Executive Order 13211 Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy, Supply, Distribution, or Use, 66 FR 28355 (May 22, 2001) requires preparation and submission to OMB of a Statement of Energy Effects for significant regulatory actions under Executive Order 12866 that are likely to have a significant adverse effect on the supply, distribution, or use of energy. A determination that a private and local government fleet AFV acquisition program is not “necessary” under EPAct 1992 section 507(e) does not require private and local government fleets, suppliers of energy, or distributors of energy to do or to refrain from doing anything. Thus, although today's proposed negative determination is a significant regulatory action, if finalized the determination is not expected to have a significant adverse impact on the supply, distribution, or use of energy. K. Review Under Executive Order 13432 Executive Order 13432, Cooperation Among Agencies in Protecting the Environment With Respect to Greenhouse Gas Emissions from Motor Vehicles, Nonroad Vehicles, and Nonroad Engines, 72 FR 27717 (May 16, 2007) requires DOE to work with DOT and EPA when conducting rulemakings that could be considered to affect emissions. In particular, this Executive Order requires that “the head of an agency undertaking a regulatory action that can reasonably be expected to directly regulate emissions, or to substantially and predictably affect emissions, of greenhouse gases from motor vehicles, nonroad vehicles, nonroad engines, or the use of motor vehicle fuels, including alternative fuels, shall” conduct the rulemaking jointly with other agencies, to the extent permitted by law; consider, as appropriate, laws, information, and recommendations of the other agencies; exercise the agency's authority effectively; and obtain concurrence or other views by the other agencies throughout the rulemaking process. In meeting this requirement, the Department has consulted with both the Department of Transportation and the Environmental Protection Agency throughout development of this proposed determination. VIII. Approval by the Office of the Secretary The issuance of the proposed determination for the Private and Local Government Fleet Determination has been approved by the Office of the Secretary. Issued in Washington, DC, on September 6, 2007. Alexander A. Karsner, Assistant Secretary, Energy Efficiency and Renewable Energy. [FR Doc. E7-18153 Filed 9-13-07; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF ENERGY 10 CFR Part 1017 RIN 1992-AA35 Identification and Protection of Unclassified Controlled Nuclear Information AGENCY: Office of Health, Safety and Security, Department of Energy. ACTION: Notice of proposed rulemaking and public hearing. SUMMARY: The Department of Energy

(DOE)proposes to amend regulations that prohibit the unauthorized dissemination of certain unclassified but sensitive information identified as Unclassified Controlled Nuclear Information (UCNI). DOE is amending these regulations to clarify the types of information that may be identified as UCNI to prevent overly-broad application of UCNI controls and to streamline the UCNI program by simplifying the process for identifying information as UCNI. DATES: Written comments (7 copies) may be submitted on or before November 13, 2007. A public hearing will be held in Washington, DC, on October 29, 2007. Requests to speak at the hearing must be received by October 22, 2007. ADDRESSES: You may submit comments and requests to speak at the hearing, identified by RIN 1992-AA35, by any of the following methods: *Federal eRulemaking Portal:* *http://www.regulations.gov.* Follow the instructions for submitting comments. *E-mail:* *emily.puhl@hq.doe.gov.* Include RIN 1992-AA35 in the subject line of the message. *Fax:*

(301)903-1230. *Mail:* Emily A. Puhl, Department of Energy, Office of Classification, HS-91/Germantown Building, 1000 Independence Ave., SW., Washington, DC 20585-1290. A public hearing will be held on October 29, 2007, from 9:30 a.m. until 11:30 a.m. at the U.S. Department of Energy, 1000 Independence Ave., SW., Washington, DC, room GJ-015. All submissions must include the agency name for this rulemaking. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Comment Procedures” heading of the SUPPLEMENTARY INFORMATION section of this document. Electronic submissions are encouraged. FOR FURTHER INFORMATION CONTACT: Nicholas G. Prospero, Office of Classification, U.S. Department of Energy, 1000 Independence Ave., SW., Washington, DC 20585-1290,

(301)903-9967; Jo Ann Williams, Office of the General Counsel, U.S. Department of Energy, 1000 Independence Ave., SW., Washington, DC 20585,

(202)586-6899. SUPPLEMENTARY INFORMATION: I. Background II. Description of Proposed Changes III. Procedural Requirements A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under the Treasury and General Government Appropriations Act, 2001 J. Review Under Executive Order 13211 IV. Public Comment Procedures A. Written Comments B. Public Hearing V. Approval of the Office of the Secretary I. Background Under the Atomic Energy Act of 1954 (42 U.S.C. 2011 *et seq.* ), DOE is charged with the operation of programs for:

(1)Research, development, testing, and production of nuclear weapons;

(2)nuclear material production for defense activities; and,

(3)certain defense related nuclear reactors. In 1981, Congress and DOE became increasingly concerned about the possibility of terrorist or other criminal acts directed against a Government nuclear defense activity. This concern was based, in part, on the increased incidence of acts of terrorist-inspired violence, the increased sophistication of these acts, and the increased availability of the technological resources, including information in the public domain, necessary to commit these acts. In response to this threat, Congress, in 1982, amended the Atomic Energy Act of 1954 (hereafter “the Act”) by adding section 148 (“Prohibition Against the Dissemination of Certain Unclassified Information”), which directed DOE to adopt regulations to safeguard certain types of unclassified but sensitive information from unauthorized dissemination in the interest of protecting both the health and safety of the public and the common defense and security of the Nation. Congress recognized that while much information concerning atomic energy defense programs was classified, a new statutory provision was necessary to protect certain sensitive information that could not be classified under statute or executive order for operational or legal reasons. Section 148 was not without precedent. In 1980, the Congress amended the Act to add section 147. Section 147 of the Act requires the Nuclear Regulatory Commission to prohibit the unauthorized disclosure of Safeguards Information, which includes a licensee's or applicant's procedures and security measures for the protection of special nuclear material, source material, or byproduct material. Under section 147, Safeguards Information also includes security measures for the protection of and location of certain plant equipment vital to the safety of production or utilization facilities. The major purpose of section 148 is to require DOE to control similar sensitive information about its atomic energy defense programs as section 147 protects with respect to commercial and other non-DOE nuclear facilities. Section 148 directs the Secretary of Energy (the Secretary) to prescribe regulations, after notice and opportunity for public comment, or issue orders as may be necessary to prohibit the unauthorized dissemination of certain unclassified information concerning atomic energy defense programs. This information must pertain to the following: 1. The design of production or utilization facilities; 2. Security measures (including security plans, procedures, and equipment) for the physical protection of

(a)production or utilization facilities or

(b)nuclear material, regardless of its physical state or form, contained in these facilities or in transit; or, 3. The design, manufacture, or utilization of nuclear weapons or components that were once classified as Restricted Data, as defined in section 11y. of the Act. In order for the information in the above categories to be controlled under section 148, the Secretary must determine that the unauthorized dissemination of such information could reasonably be expected to have a significant adverse effect on the health and safety of the public or the common defense and security by significantly increasing the likelihood of:

(1)The illegal production of nuclear weapons, or

(2)the theft, diversion, or sabotage of nuclear materials, equipment, or facilities. UCNI only includes Government information that:

(1)Is not classified;

(2)concerns atomic energy defense programs;

(3)falls within at least one of the three categories described above;

(4)meets the adverse effect test described above; and

(5)is not exempt from being UCNI under these regulations. II. Description of Proposed Changes The intent of this proposed rule is to describe more precisely the information that may be identified as UCNI. Section II.A. of this preamble describes new definitions intended to more clearly define the kind of information that may be identified as UCNI. Section II.B. discusses proposed changes intended to simplify and to streamline the UCNI program based on experience gained in the program to date. Section II.C. briefly describes a number of conforming technical changes. A. Amendments To Clarify Information That May Be Identified as UCNI 1. New Definitions: “Production Facility” and “Utilization Facility” DOE proposes to add definitions of “production facility” and “utilization facility” to define more precisely the types of information that may be identified as UCNI. These definitions are based on sections 11.v. and 11.cc., respectively, of the Act, and include lists of specific categories of equipment and devices that are subject to UCNI controls. These proposed lists are definitive; no additions may be made to them except through the process for amending these regulations. The inclusion of these more precise definitions of “production facility” and “utilization facility” would clarify what information may be identified as UCNI. DOE emphasizes that the proposed definitions of “production facility” and “utilization facility” are intended to only apply to these proposed regulations and do not constitute a more general interpretation of these statutory terms. The key to determining that a facility is a production or utilization facility for purposes of these proposed regulations is establishing whether the facility ever produced (in the case of a production facility) or ever used (in the case of a utilization facility) “special nuclear material” as defined in section 11.aa. of the Act. Production facilities include uranium enrichment activities and plutonium production reactors since both produce special nuclear material. Conversely, tritium production reactors are not considered production facilities because tritium is not a “special nuclear material.” However, tritium production reactors are considered utilization facilities because they use special nuclear material to make tritium. Similarly, weapons plants, such as DOE's Pantex Plant, that make use of special nuclear material to produce nuclear weapons or components are examples of utilization facilities. In contrast, weapons plants that do not make use of special nuclear material in producing nuclear weapons or components, such as the Kansas City Plant, which makes nonnuclear electronic and mechanical components, are not considered utilization facilities. In addition, special nuclear material storage facilities are not considered to be utilization facilities since storage is not considered use. Therefore, facilities such as the Yucca Mountain waste repository and the Waste Isolation Pilot Plant are not considered utilization facilities, and UCNI controls cannot apply to them. The fact that a facility meets the definition of production or utilization facility does not mean that all information about the facility is automatically treated as UCNI. All of the criteria in proposed § 1017.7 must also be met for information to be identified as UCNI. 2. Simplification of “Adverse Effect Test” In order for information to be identified as UCNI, it must meet the “adverse effect test” described in section 148.a.(2) of the Act and the current regulations in § 1017.9. DOE is proposing to add two new definitions to the regulations (see proposed § 1017.4) that simplify the “adverse effect test” in order to reduce ambiguities in the UCNI determination process. The terms are “essential technology-related information” and “exploitable security-related information.” “Essential technology-related information” means technical information the unauthorized dissemination of which could significantly increase the likelihood of the illegal production of a nuclear weapon. “Exploitable security-related information” means information whose unauthorized dissemination could significantly increase the likelihood of the theft, diversion, or sabotage of nuclear material, equipment, or facilities. If information is not covered by one of these definitions, it cannot be identified as UCNI because it fails to meet the “adverse effect test.” Experience gained in implementing the UCNI program for over 20 years has convinced DOE that the proposed new definitions will eliminate ambiguities and promote consistency in application of the statutory criteria. 3. Clarification of the Concept of “Widely Disseminated in the Public Domain” DOE proposes to clarify the concept of “widely disseminated in the public domain.” In § 1017.6(b)(2) of the current regulations, a document that has been at any time “widely disseminated in the public domain” cannot be protected as UCNI. The intent of this language was to make clear that documents that were not only widely disseminated in the past, but also are currently available in the public domain cannot be protected as UCNI. However, the concept of “widely disseminated in the public domain” was not intended to apply to documents that were disseminated in the past but are no longer available. A document that cannot be located during a reasonable search is not considered “widely disseminated in the public domain” and is eligible to be protected as UCNI today. For example, a report sent to a university library in 1960 that cannot be located today at the university library or anywhere else would not be “widely disseminated in the public domain.” Therefore, copies of the report held by DOE may be protected as UCNI. DOE proposes to address the concept of “widely disseminated in the public domain” in a new section, proposed § 1017.15 (“Review Process”), which is intended to further clarify the concept by describing more clearly the process for reviewing documents or material for UCNI in order to minimize the likelihood of UCNI controls being erroneously applied. 4. Revised Definition for “Atomic Energy Defense Programs” DOE proposes to revise the definition of “atomic energy defense programs” (see proposed § 1017.4) to more clearly reflect the statute's intent to include not only Government activities, equipment, and facilities currently engaged in support of

(1)Developing, producing, testing, sampling, maintaining, repairing, modifying, assembling or disassembling, using, transporting, or retiring nuclear weapons or components of nuclear weapons, or

(2)producing, using, or transporting nuclear material that could be used in nuclear weapons or military-related utilization facilities, but also those activities, equipment, and facilities that are capable of performing these activities. This amendment is necessary to protect nuclear defense activities, equipment, and facilities that are not currently being conducted or used by the U.S. Government to support nuclear weapons or components development, but that were once conducted or used in support of such programs and that could be conducted or used again in the future to support the national security. Information about activities, equipment, and facilities relating to programs that are no longer active clearly may represent a national security risk and, if so, should be protected as UCNI. For example, gaseous diffusion technology is not currently being used to enrich uranium for nuclear weapons production, yet the activities, equipment, and facilities previously involved with this technology remain sensitive because of their potential for misuse by proliferants or terrorists. In addition, we are proposing to delete one part (subparagraph (3)) of the definition of “atomic energy defense programs” that concerns the “safeguarding of activities, equipment, or facilities which support the functions in paragraphs (b)(1) and (b)(2) of this section, including the protection of nuclear weapons, components of nuclear weapons, or nuclear material for military applications at a fixed facility or in transit.” DOE is proposing to delete this subparagraph to clarify the original intent of the definition in these regulations. In order for security measures to be identified as UCNI, they must pertain to the physical protection of production or utilization facilities, nuclear material contained in these facilities, or nuclear material in transit. In other words, the security measures must pertain to nuclear material. Because subparagraph

(3)does not include this “nuclear material” limitation, it does not express the original intent of the definition, and we are therefore proposing to delete it. 5. Clarification of Materials That Can Be Determined To Be “Nuclear Material” DOE proposes to clarify what materials other than byproduct, source, or special nuclear material can be determined to be “nuclear material.” Under § 1017.10(a)(2)(i) of the current regulations, the Secretary may determine that specific material that “could be used as a hazardous environmental contaminant” is within the scope of the term “nuclear material.” DOE is proposing to revise this paragraph to state “could be used as a hazardous, radioactive environmental contaminant” in order to clarify the intent of this section. Adding “radioactive” would ensure that only materials capable of releasing hazardous radioactivity could be determined to be “nuclear material.” B. Changes Made To Simplify and Streamline the UCNI Program 1. Designated Officials DOE proposes to delete the position of “Controlling Official” described in the current regulations in § 1017.3(e) and § 1017.7(a) to simplify the UCNI review process by removing a concept that has often led to confusion and uncertainty. In the current regulations, the Controlling Official is responsible for applying control criteria (i.e., the adverse effect test) to information and using the results of the “test” to develop UCNI guidance, whereas the Reviewing Official is responsible for following instructions in UCNI guidance. This division in responsibilities has led to confusion in implementation over the past 20 years, with the most common error being that Reviewing Officials have attempted to apply the “adverse effect test” during review of a document rather than simply following instructions in UCNI guidance. Deleting the concept of Controlling Official would limit the application of the “adverse effect test” to the Secretary or his or her designee, which would remove any confusion in roles and improve the UCNI review process. In addition, DOE proposes to amend the definition of Denying Official to include a reference to DOE's Freedom of Information Act regulations at 10 CFR part 1004. This amendment would clarify under what authority a Denying Official is empowered to withhold information from the public. 2. Routine Access DOE proposes to revise current § 1017.16 to remove redundancies in the eligibility requirements for routine access to UCNI. No substantive changes would be made to this section. 3. Limited Access A definition of “limited access” is proposed to be added to proposed § 1017.4. The same concept appears in the current regulations in § 1017.16(b) but is identified as “special access” to UCNI. The new term more accurately conveys that this form of access has more restrictions than does routine access to UCNI. 4. Requesting a Deviation A new § 1017.5 is proposed to establish a process for requesting a deviation for any requirements in these regulations. 5. Subject Areas Eligible To Be UCNI DOE proposes to revise § 1017.8 to delete extraneous language; no substantive changes would be made. 6. Information Exempt From Being UCNI Current § 1017.6, Exemptions, would be revised to delete exemptions that are redundant or that are no longer necessary. DOE proposes to delete existing § 1017.6 subparagraphs (a)(1) (non-Government information) and (a)(2) (non-atomic energy defense programs) because these exemptions are covered in the criteria for information to be identified as UCNI in proposed § 1017.7. DOE proposes to delete Restricted Data, Formerly Restricted Data, and National Security Information from current § 1017.6 subparagraph (a)(3) because these are categories of classified information and as such are excluded from being identified as UCNI because only unclassified information may be UCNI. DOE proposes to delete subparagraphs (a)(5), (a)(6), (a)(8), and (a)(10) of current § 1017.6 because the proposed new definitions of “production facility” and “utilization facility” provide explicit language that eliminates ambiguity in these exemptions. 7. Review Process for Documents Although the procedure for reviewing documents for UCNI would not substantively change, DOE is proposing to clarify the review process currently described in § 1017.12 by adding a new § 1017.15. The proposed language would emphasize that reviewing documents to identify UCNI begins with the Reviewing Official determining whether the document is “widely disseminated in the public domain.” This is an essential part of the review process because documents determined to be “widely disseminated in the public domain” cannot be protected as UCNI. The current regulations do not explain this clearly. Proposed § 1017.15 also contains a paragraph that exempts documents already in files from requiring review and clarifies how these documents are to be handled. 8. UCNI Markings on Documents or Material DOE proposes to revise § 1017.15 to clarify the marking procedures for documents and material. Proposed § 1017.16 would add a requirement for separate front markings and page markings. Proposed § 1017.16 would also prohibit the marking of classified documents as UCNI. Finally, proposed § 1017.16 would prohibit the use of the “May Contain UCNI” marking. Although originally intended to protect documents that were likely to contain UCNI pending their transmittal to a Reviewing Official for a determination, a lack of understanding has led to widespread misuse of the stamp. 9. Determining That a Document or Material No Longer Contains or Does Not Contain UCNI DOE proposes to add a new § 1017.17 to address how Reviewing and Denying Officials should handle documents or material that, after review, are determined no longer to contain or not to contain UCNI. A new stamp with the marking, “Does Not Contain UCNI,” is being proposed for use in these situations. 10. Enforcement of Civil Penalty Provisions DOE proposes to revise the civil penalty enforcement provisions in the current regulations to achieve greater consistency with procedures in other DOE civil penalty enforcement regimes, particularly those related to violations of classified information protection requirements. DOE issued “Procedural Rules for the Assessment of Civil Penalties for Classified Information Security Violations” (10 CFR part 824) (70 F.R. 3599, January 26, 2005), to implement section 234B of the Act. To the extent appropriate, the procedures proposed today adopt the procedures in 10 CFR part 824. C. Technical Changes DOE proposes a number of technical changes to the present regulations to reflect, among other matters, DOE organizational changes and minor changes in Federal Government procedures. III. Procedural Requirements A. Review Under Executive Order 12866 Today's regulatory action has been determined not to be a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this notice of proposed rulemaking was not subject to review by OMB under the Executive Order. B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking” (67 FR 53461, August 16, 2002), DOE published procedures and policies to ensure that the potential impacts of its draft rules on small entities are properly considered during the rulemaking process (68 FR 7990, February 19, 2003), and has made them available on the Office of the General Counsel's Web site: *http://www.gc.doe.gov.* DOE has reviewed today's proposed rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. Today's proposed rule would amend DOE's policies and procedures regarding UCNI. The rule, if promulgated, will apply to all agencies, persons, and entities that generate and maintain UCNI documents or material. The Department estimates that fewer than five Federal Government entities have access to UCNI documents or material. Each of these Government entities may, in turn, have contractors or consultants who have access to UCNI documents or material. Section 1017.14 would impose on Government and non-Government entities the requirement that persons who review documents for UCNI be properly trained and certified. The economic impact of the training requirement on non-Government entities would be limited to the labor hours required to familiarize those persons reviewing documents for UCNI with the training materials provided by DOE. Section 1017.16 would require that Government and non-Government Reviewing Officials clearly mark or authorize the marking of a new document or material to convey that it contains UCNI. The burden of the marking requirement would vary depending on the number of documents or amount of material the entity generates. DOE considers the proper marking of a controlled document to be an act integrated in the act of creating the document. As such, the marking of documents or material containing UCNI imposes minimal costs on the entity generating new UCNI documents or material. DOE recognizes that in most cases non-Government entities that generate documents or material containing UCNI will do so pursuant to a Government contract. In such cases, any costs incurred in compliance with these regulations will be charged back to the Government. Infrequently, DOE may enter into an agreement (e.g., a Cooperative Research and Development Agreement) with a non-Government entity in which DOE provides UCNI to the entity without any vehicle for reimbursement by the Government for increased security costs. However, since UCNI is protected in a manner similar to how a company protects proprietary or employees' personal information, the incremental cost of protecting UCNI would be negligible. In these cases, this rule would have only a minor economic impact on very few small entities. On the basis of the foregoing, DOE certifies that the proposed rule, if promulgated, would not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared a regulatory flexibility analysis for this rulemaking. C. Review Under the Paperwork Reduction Act No new information or record keeping requirements are imposed by this rulemaking. Accordingly, no OMB clearance is required under the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ). D. Review Under the National Environmental Policy Act of 1969 DOE has concluded that promulgation of this rule falls into a class of actions that would not individually or cumulatively have a significant impact on the human environment, as determined by DOE's regulations implementing the National Environmental Policy Act of 1969 (42 U.S.C. 4321 *et seq.* ). Specifically, this rule deals only with agency procedures and, therefore, is covered under the Categorical Exclusion in paragraph A6 to subpart D, 10 CFR part 1021. Accordingly, neither an environmental assessment nor an environmental impact statement is required. E. Review Under Executive Order 13132 Executive Order 13132, “Federalism” (64 FR 43255, August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations (65 FR 13735). DOE has examined today's proposed rule and has determined that it does not preempt State law and does 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. No further action is required by Executive Order 13132. F. Review Under Executive Order 12988 With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform” (61 FR 4729, February 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements:

(1)Eliminate drafting errors and ambiguity;

(2)write regulations to minimize litigation; and

(3)provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation:

(1)Clearly specifies the preemptive effect, if any;

(2)clearly specifies any effect on existing Federal law or regulation;

(3)provides a clear legal standard for affected conduct while promoting simplification and burden reduction;

(4)specifies the retroactive effect, if any;

(5)adequately defines key terms; and,

(1)Is a significant regulatory action under Executive Order 12866, or any successor order; and

(2)is likely to have a significant adverse effect on the supply, distribution, or use of energy, or

(3)is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. Today's regulatory action is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects. IV. Public Comment Procedures A. Written Comments Interested persons are invited to participate by submitting data, views, or arguments with respect to the proposed amendments to these regulations set forth in this notice. Written comments should be submitted to the address indicated in the ADDRESSES section of this notice. All comments will be available for public inspection in the DOE Freedom of Information Reading Room, room 1E-190, 1000 Independence Avenue, SW., Washington, DC 20585, between the hours of 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Written comments received by the date indicated in the DATES section of this notice of proposed rulemaking will be assessed and considered prior to publication of the final rule. Any information that a commenter considers to be confidential must be so identified and submitted in writing, one copy only. DOE reserves the right to determine the appropriateness of confidential status for the information and to treat it in accordance with its determination. See 10 CFR 1004.11. B. Public Hearing Requests to speak at the hearing must be submitted to the address and by the date indicated in the DATES section of this notice of proposed rulemaking. Requests for oral presentations should contain a telephone number where the requester may be contacted prior to the hearing. Speakers are requested to submit copies of their statement to DOE at the hearings. DOE reserves the right to select the persons to be heard at the hearing, to schedule their respective presentations, and to establish the procedures governing the conduct of the hearing. The length of each presentation is limited to fifteen minutes. The hearing will begin at 9:30 a.m. A DOE official will be designated to preside at the hearing. It will not be a judicial-type hearing. Questions may be asked only by those conducting the hearing. Any further procedural rules needed for the proper conduct of the hearing will be announced by the presiding officer. A transcript of the hearing will be made available to the public. The entire record of the hearing, including the transcript, will be retained by DOE and made available for inspection in the DOE Freedom of Information Reading Room. Transcripts may be purchased from the hearing transcriber/reporter. V. Approval of the Office of the Secretary The Secretary of Energy has approved the publication of today's proposed rule. List of Subjects in 10 CFR Part 1017 Administrative practice and procedure, Government contracts, Nuclear energy, Penalties, Security measures. Issued in Washington, DC on September 7, 2007. Glenn Podonsky, Office of Health, Safety and Security. For the reasons set out in the preamble, DOE proposes to revise part 1017 of Chapter X of Title 10 of the Code of Federal Regulations to read as follows: PART 1017—IDENTIFICATION AND PROTECTION OF UNCLASSIFIED CONTROLLED NUCLEAR INFORMATION Subpart A—General Overview Sec. 1017.1 Purpose and scope. 1017.2 Applicability. 1017.3 Policy. 1017.4 Definitions. 1017.5 Requesting a deviation. Subpart B—Initially Determining What Information Is Unclassified Controlled Nuclear Information 1017.6 Authority. 1017.7 Criteria. 1017.8 Subject areas eligible to be Unclassified Controlled Nuclear Information. 1017.9 Nuclear material determinations. 1017.10 Adverse effect test. 1017.11 Information exempt from being Unclassified Controlled Nuclear Information. 1017.12 Prohibitions on identifying Unclassified Controlled Nuclear Information. 1017.13 Report concerning determinations. Subpart C—Review of a Document or Material for Unclassified Controlled Nuclear Information 1017.14 Designated officials. 1017.15 Review process. 1017.16 Unclassified Controlled Nuclear Information markings on documents or material. 1017.17 Determining that a document or material no longer contains or does not contain Unclassified Controlled Nuclear Information. 1017.18 Joint documents or material. Subpart D—Access to Unclassified Controlled Nuclear Information 1017.19 Access limitations. 1017.20 Routine access. 1017.21 Limited access. Subpart E—Physical Protection Requirements 1017.22 Notification of protection requirements. 1017.23 Protection in use. 1017.24 Storage. 1017.25 Reproduction. 1017.26 Destruction. 1017.27 Transmission. 1017.28 Processing on Automated Information Systems (AIS). Subpart F—Violations 1017.29 Civil penalty. 1017.30 Criminal penalty. Authority: 42 U.S.C. 7101 *et seq.* ; 50 U.S.C. 2401 *et seq.* ; 42 U.S.C. 2168; 28 U.S.C. 2461. Subpart A—General Overview § 1017.1 Purpose and scope.

(a)This part implements section 148 of the Atomic Energy Act (42 U.S.C. 2168) which prohibits the unauthorized dissemination of certain unclassified Government information. This information identified by the term “Unclassified Controlled Nuclear Information”

(UCNI)consists of certain design and security information concerning nuclear facilities, nuclear materials, and nuclear weapons.

(b)This part:

(1)Provides for the review of information prior to its designation as UCNI;

(2)Describes how information is determined to be UCNI;

(3)Establishes minimum physical protection standards for documents and material containing UCNI;

(4)Specifies who may have access to UCNI; and,

(5)Establishes a procedure for the imposition of penalties on persons who violate section 148 of the Atomic Energy Act or any regulation or order of the Secretary issued under section 148 of the Atomic Energy Act, including these regulations.

(c)This part does not apply to information controlled under 10 U.S.C. 128 by the Department of Defense. § 1017.2 Applicability. This part applies to any person who is or was authorized access to UCNI, requires authorized access to UCNI, or attempts to gain or gains unauthorized access to UCNI. § 1017.3 Policy. The Department of Energy

(DOE)strives to make information publicly available to the fullest extent possible. Therefore, this part must be interpreted and implemented to apply the minimum restrictions needed to protect the health and safety of the public or the common defense and security consistent with the requirement in section 148 of the Atomic Energy Act to prohibit the unauthorized dissemination of UCNI. § 1017.4 Definitions. *As used in this part:* *Atomic Energy Act* means the Atomic Energy Act of 1954, as amended (42 U.S.C. 2011 *et seq.* ). *Atomic energy defense programs* means Government activities, equipment, and facilities that are capable of:

(1)Developing, producing, testing, sampling, maintaining, repairing, modifying, assembling or disassembling, using, transporting, or retiring nuclear weapons or components of nuclear weapons; or

(2)Producing, using, or transporting nuclear material that could be used in nuclear weapons or military-related utilization facilities. *Authorized Individual* means a person who has routine access to UCNI under § 1017.20. *Component* means any operational, experimental, or research-related part, subsection, design, or material used in the manufacture or utilization of a nuclear weapon, nuclear explosive device, or nuclear weapon test assembly. *Denying Official* means a DOE official designated under 10 CFR 1004.2(b) who is authorized to deny a request for unclassified information that is exempt from release when requested under the Freedom of Information Act (FOIA). *Director* means the DOE Official, or his or her designee, to whom the Secretary has assigned responsibility for enforcement of this part. *Document* means the physical medium on or in which information is recorded, regardless of its physical form or characteristics. *DOE* means the United States Department of Energy, including the National Nuclear Security Administration (NNSA). *Essential technology-related information* means technical information whose unauthorized dissemination could significantly increase the likelihood of the illegal production of a nuclear weapon. *Exploitable security-related information* means information whose unauthorized dissemination could significantly increase the likelihood of the theft, diversion, or sabotage of nuclear material, equipment, or facilities. *Government* means the Executive Branch of the United States Government. *Government information* means any fact or concept, regardless of its physical form or characteristics, that is owned by, produced by or for, or otherwise controlled by the United States Government, including such facts or concepts that are provided by the Government to any person, including persons who are not employees of the Government. *Guidance* means detailed written instructions that describe decisions made by the Secretary or his/her designee issued under Subpart B of these regulations concerning what specific information is UCNI. *Illegal production* means the production or manufacture of a nuclear weapon in violation of either domestic (e.g., the Atomic Energy Act) or international (e.g., the Treaty on the Non-Proliferation of Nuclear Weapons) law. *In transit* means the physical movement of a nuclear weapon, a component of a nuclear weapon containing nuclear material, or nuclear material from one part to another part of a facility or from one facility to another facility. An item is considered “in transit” until it has been relinquished to the custody of the authorized recipient and is in storage at its ultimate destination. An item in temporary storage pending shipment to its ultimate destination is “in transit.” *Limited access* means access to specific UCNI granted by the cognizant DOE Program Secretarial Officer or a Deputy Administrator of the NNSA to an individual not eligible for routine access (see § 1017.21). *Material* means a product ( *e.g.* , a part or a machine) or substance ( *e.g.* , a compound or an alloy), regardless of its physical form or characteristics. *Need to know* means a determination made by an Authorized Individual that a person requires access to specific UCNI to perform official duties or other Government-authorized activities. *Nuclear material* means special nuclear material, byproduct material, or source material as defined by sections 11.aa., 11.e., and 11.z., respectively, of the Atomic Energy Act (42 U.S.C. 2014 aa., e., and z), or any other material used in the production, testing, utilization, or assembly of nuclear weapons or components of nuclear weapons that the Secretary determines to be nuclear material under § 1017.9(a). *Nuclear weapon* means atomic weapon as defined in section 11.d. of the Atomic Energy Act (42 U.S.C. 2014 d). *Person* means any person as defined in section 11.s. of the Atomic Energy Act (42 U.S.C. 2014 s) or any affiliate or parent corporation thereof. *Production facility* means:

(1)Any equipment or device capable of producing special nuclear material in such quantity as to be of significance to the common defense and security or in such manner as to affect the health and safety of the public; or

(2)Any important component part especially designed for such equipment or device.

(3)For the purposes of this part, equipment and devices described in paragraphs

(1)and

(2)of this definition include only:

(i)Government uranium isotope enrichment equipment or devices and any other uranium isotope enrichment equipment or devices that use related technology provided by the Government; or

(ii)Government plutonium production reactors, isotope enrichment equipment or devices, and separation and purification equipment or devices and other such equipment or devices that use related technology provided by the Government. *Reviewing Official* means an individual authorized under § 1017.14(a) to make a determination, based on guidance, that a document or material contains UCNI. *Routine access* means access to UCNI granted by an Authorized Individual to an individual eligible to receive UCNI under § 1017.20 in order to perform official duties or other Government-authorized activities. *Secretary* means the Secretary of Energy. *Unauthorized dissemination* means the intentional or negligent transfer of UCNI documents or material to any person other than an Authorized Individual or a person granted limited access to UCNI under § 1017.21. *Unclassified Controlled Nuclear Information or UCNI* means certain unclassified Government information concerning nuclear facilities, materials, weapons, and components whose dissemination is controlled under section 148 of the Atomic Energy Act and this part. *Utilization facility* means:

(1)Any equipment or device, or any important component part especially designed for such equipment or device, except for a nuclear weapon, that is capable of making use of special nuclear material in such quantity as to be of significance to the common defense and security or in such manner as to affect the health and safety of the public. For the purposes of this part, such equipment or devices include only Government equipment or devices that use special nuclear material in the research, development, production, or testing of nuclear weapons, nuclear weapon components, or nuclear material capable of being used in nuclear weapons; or

(2)Any equipment or device, or any important component part especially designed for such equipment or device, except for a nuclear weapon, that is peculiarly adapted for making use of nuclear energy in such quantity as to be of significance to the common defense and security or in such manner as to affect the health and safety of the public. For the purposes of this part, such equipment or devices include only:

(i)Naval propulsion reactors;

(ii)Military reactors and power sources that use special nuclear material;

(iii)Tritium production reactors; and,

(iv)Government research reactors. § 1017.5 Requesting a deviation.

(a)Any person may request a deviation, or condition that diverges from the norm and that is categorized as:

(1)A variance ( *i.e.* , an approved condition that technically varies from a requirement in these regulations);

(2)A waiver (i.e., an approved nonstandard condition that deviates from a requirement in these regulations and which, if uncompensated, would create a potential or real vulnerability); or

(3)An exception (i.e., an approved deviation from a requirement in these regulations for which DOE accepts the risk of a safeguards and security vulnerability) according to the degree of risk involved.

(b)In writing, the person must:

(1)Identify the specific requirement for which the deviation is being requested;

(2)Explain why the deviation is needed; and,

(3)If appropriate, describe the alternate or equivalent means for meeting the requirement.

(c)DOE employees must submit such requests according to internal directives. DOE contractors must submit such requests according to directives incorporated into their contracts. Other individuals must submit such requests to the Office of Classification, Office of Health, Safety and Security, U.S. Department of Energy, 1000 Independence Ave., SW., Washington, DC 20585-1290. The Office of Classification's decision must be made within 30 days. Subpart B—Initially Determining What Information Is Unclassified Controlled Nuclear Information § 1017.6 Authority. The Secretary, or his or her designee, determines whether information is UCNI. These determinations are incorporated into guidance that each Reviewing Official and Denying Official consults in his or her review of a document or material to decide whether the document or material contains UCNI. § 1017.7 Criteria. To be identified as UCNI, the information must meet each of the following criteria:

(a)The information must be Government information as defined in § 1017.4;

(b)The information must concern atomic energy defense programs as defined in § 1017.4;

(c)The information must fall within the scope of at least one of the three subject areas eligible to be UCNI in § 1017.8;

(d)The information must meet the adverse effect test described in § 1017.10; and

(e)The information must not be exempt from being UCNI under § 1017.11. § 1017.8 Subject areas eligible to be Unclassified Controlled Nuclear Information. To be eligible for identification as UCNI, information must concern at least one of the following categories:

(a)The design of production or utilization facilities;

(b)Security measures (including security plans, procedures, and equipment) for the physical protection of production or utilization facilities or nuclear material, regardless of its physical state or form, contained in these facilities or in transit; or

(c)The design, manufacture, or utilization of nuclear weapons or components that were once classified as Restricted Data, as defined in section 11y. of the Atomic Energy Act. § 1017.9 Nuclear material determinations.

(a)The Secretary may determine that a material other than special nuclear material, byproduct material, or source material as defined by the Atomic Energy Act is included within the scope of the term “nuclear material” if it meets the following criteria:

(1)The material is used in the production, testing, utilization, or assembly of nuclear weapons or components of nuclear weapons; and

(2)Unauthorized acquisition of the material could reasonably be expected to result in a significant adverse effect on the health and safety of the public or the common defense and security because the specific material:

(i)Could be used as a hazardous radioactive environmental contaminant; or

(ii)Could be of significant assistance in the illegal production of a nuclear weapon.

(b)Designation of a material as a nuclear material under paragraph

(a)of this section does not make all information about the material UCNI. Specific information about the material must still meet each of the criteria in § 1017.7 prior to its being identified and controlled as UCNI. § 1017.10 Adverse effect test. In order for information to be identified as UCNI, it must be determined that the unauthorized dissemination of the information under review could reasonably be expected to result in a significant adverse effect on the health and safety of the public or the common defense and security by significantly increasing the likelihood of:

(a)Illegal production of a nuclear weapon; or

(b)Theft, diversion, or sabotage of nuclear material, equipment, or facilities. § 1017.11 Information exempt from being Unclassified Controlled Nuclear Information. Information exempt from these regulations includes:

(a)Information protected from disclosure under section 147 of the Atomic Energy Act (42 U.S.C. 2167) that is identified as Safeguards Information and controlled by the United States Nuclear Regulatory Commission;

(b)Basic scientific information (i.e., information resulting from research directed toward increasing fundamental scientific knowledge or understanding rather than any practical application of that knowledge);

(c)Radiation exposure data and all other personal health information; and,

(d)Information concerning the transportation of low level radioactive waste. § 1017.12 Prohibitions on identifying Unclassified Controlled Nuclear Information. Information, documents, and material must not be identified as being or containing UCNI in order to:

(a)Conceal violations of law, inefficiency, or administrative error;

(b)Prevent embarrassment to a person or organization;

(c)Restrain competition; or,

(d)Prevent or delay the release of any information that does not properly qualify as UCNI. § 1017.13 Report concerning determinations. The Office of Classification or successor office shall issue a report by the end of each quarter that identifies any new information that has been determined for the first time to be UCNI during the previous quarter, explains how each such determination meets the criteria in § 1017.7, and explains why each such determination protects from disclosure only the minimum amount of information necessary to protect the health and safety of the public or the common defense and security. A copy of the report may be obtained by writing to the Office of Classification, Office of Health, Safety and Security, U.S. Department of Energy, 1000 Independence Ave., SW., Washington, DC 20585-1290. Subpart C—Review of a Document or Material for Unclassified Controlled Nuclear Information § 1017.14 Designated officials.

(a)*Reviewing Official.* —(1) *Authority.* A Reviewing Official with cognizance over the information contained in a document or material is authorized to determine whether the document or material contains UCNI based on applicable guidance. A Reviewing Official marks or authorizes the marking of the document or material as specified in § 1017.16.

(2)*Request for designation.* Procedures for requesting that a DOE Federal or contractor employee be designated as a Reviewing Official are contained in Departmental directives issued by the Secretary. DOE may also designate other Government agency employees, contractors, or other individuals granted routine access under § 1017.20 as Reviewing Officials.

(3)*Designation.* Prior to being designated as a Reviewing Official, each employee must receive training approved by DOE that covers the requirements in this regulation and be tested on his or her proficiency in using applicable UCNI guidance. Upon successful completion of the training and test, he or she is designated as a Reviewing Official only while serving in his or her current position for a maximum of 3 years. The employee does not retain the authority when he or she leaves his or her current position. The employee cannot delegate this authority to anyone else, and the authority may not be assumed by another employee acting in the employee's position. At the end of 3 years, if the position still requires the authority, the employee must be retested and redesignated by DOE as a Reviewing Official.

(b)*Individuals approved to use DOE or joint DOE classification guidance* —(1) *Authority.* Other Government agency employees who are approved by DOE or another Government agency to use classification guidance developed by DOE or jointly by DOE and another Government agency may also be approved to review documents for UCNI and to make UCNI determinations. This authority is limited to the UCNI subject areas contained in the specific classification guidance that the individual has been approved to use.

(2)*Designation.* Individuals must be designated this authority in writing by the appropriate DOE or other Government agency official with cognizance over the specific DOE or Joint DOE classification guidance.

(c)*Denying Official* —(1) *Authority.* A DOE Denying Official for unclassified information with cognizance over the information contained in a document is authorized to deny a request made under statute (e.g., the FOIA, the Privacy Act) or the mandatory review provisions of Executive Order 12958, as amended, “Classified National Security Information,” and its successor orders, for all or any portion of the document that contains UCNI. The Denying Official bases his or her denial on applicable guidance, ensuring that the Reviewing Official who determined that the document contains UCNI correctly interpreted and applied the guidance.

(2)*Designation.* Information on the designation of DOE Denying Officials is contained in 10 CFR part 1004, *Freedom of Information* (see definition of the term “Authorizing or Denying Official.”) § 1017.15 Review process.

(a)*Reviewing documents for UCNI.* Anyone who originates or possesses a document that he or she thinks may contain UCNI must send the document to a Reviewing Official for a determination before it is finalized, sent outside of his or her organization, or filed. If the originator or possessor must send the document outside of his or her organization for the review, he or she must mark the front of the document with “Protect as UCNI Pending Review” and must transmit the document in accordance with the requirements in § 1017.27. The Reviewing Official must first determine whether or not the document is widely disseminated in the public domain, which means that the document under review can be found in a public library or open literature source, or it can be accessed on the Internet using readily available search methods.

(1)If the document is determined to be widely disseminated in the public domain, it cannot be controlled as UCNI. The Reviewing Official returns the document to the person who sent it to the Reviewing Official and informs him or her why the document cannot be controlled as UCNI. This does not preclude control of the same information as UCNI if it is contained in another document that is not widely disseminated.

(2)If the document is not determined to be widely disseminated in the public domain, the Reviewing Official evaluates the information in the document using guidance to determine whether the document contains UCNI. If the Reviewing Official determines that the document does contain UCNI, the Reviewing Official marks or authorizes the marking of the document as specified in § 1017.16. If the Reviewing Official determines that the document does not contain UCNI, the Reviewing Official returns the document to the person who sent it and informs him or her that the document does not contain UCNI. For documentation purposes, the Reviewing Official may mark or authorize the marking of the document as specified in § 1017.17(b).

(3)If no applicable guidance exists, but the Reviewing Official thinks the information should be identified as UCNI, then the Reviewing Official must send the document to the appropriate official identified in applicable DOE directives issued by the Secretary or his or her designee. The Reviewing Official should also include a written recommendation as to why the information should be identified as UCNI.

(b)*Review exemption for documents in files.* Any document that was permanently filed prior to May 22, 1985, is not required to be reviewed for UCNI while in the files or when retrieved from the files for reference, inventory, or similar purposes as long as the document will be returned to the files and is not accessible by individuals who are not Authorized Individuals for the UCNI contained in the document. However, when a document that is likely to contain UCNI is removed from the files for dissemination within or outside of the immediate organization, it must be reviewed by a Reviewing Official with cognizance over the information.

(c)*Reviewing material for UCNI.* Anyone who produces or possesses material that he or she thinks may contain or reveal UCNI must consult with a Reviewing Official for a determination. If the Reviewing Official determines that the material does contain or reveal UCNI, the Reviewing Official marks or authorizes the marking of the material as specified in § 1017.16(b). § 1017.16 Unclassified Controlled Nuclear Information markings on documents or material.

(a)*Marking documents.* If a Reviewing Official determines that a document contains UCNI, the Reviewing Official must mark or authorize the marking of the document as described in this section.

(1)*Front marking.* The following marking must appear on the front of the document: Unclassified Controlled Nuclear Information Not for Public Dissemination Unauthorized dissemination subject to civil and criminal sanctions under section 148 of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2168). Reviewing Official: *(Name/Organization)* Date: Guidance Used:

(2)*Page marking.* The marking “Unclassified Controlled Nuclear Information” must be placed on the bottom of the front of the document and on the bottom of each interior page of the document that contains text or if more convenient, on the bottom of only those interior pages that contain UCNI. The page marking must also be placed on the back of the last page. If space limitations do not allow for use of the full page marking, the acronym “UCNI” may be used as the page marking.

(3)*Classified documents.* UCNI front and page markings are not applied to a classified document that also contains UCNI. If a classified document is portion marked, the acronym “UCNI” is used to indicate those unclassified portions that contain UCNI.

(4)*Obsolete “May Contain UCNI” marking.* The “May Contain UCNI” marking is no longer used. Any document marked with the “May Contain UCNI” marking is considered to contain UCNI and must be protected accordingly until a Reviewing Official or Denying Official determines otherwise. The obsolete “May Contain UCNI” marking reads as follows: Not for Public Dissemination May contain Unclassified Controlled Nuclear Information subject to section 148 of the Atomic Energy Act of 1954 (42 U.S.C. 2168). Approval by the Department of Energy prior to release is required.

(b)*Marking material.* If possible, material containing or revealing UCNI must be marked as described in § 1017.16(a)(1). If space limitations do not allow for use of the full marking in § 1017.16(a)(1), the acronym “UCNI” may be used. § 1017.17 Determining that a document or material no longer contains or does not contain Unclassified Controlled Nuclear Information.

(a)*Document or material no longer contains UCNI.* A Reviewing Official with cognizance over the information in a document or material marked as containing UCNI may determine that the document or material no longer contains UCNI. A Denying Official may also determine that such a document or material no longer contains UCNI. The official making this determination must base it on guidance and must ensure that any UCNI markings are crossed out (for documents) or removed (for material). The official marks or authorizes the marking of the document (or the material, if space allows) as follows: DOES NOT CONTAIN UNCLASSIFIED CONTROLLED NUCLEAR INFORMATION Reviewing/Denying Official: *(Name and organization)* Date:

(b)*Document or material does not contain UCNI.* A Reviewing Official may confirm that an unmarked document or material does not contain UCNI based on guidance. No markings are required in this case; however, for documentation purposes, the Reviewing Official may mark or may authorize the marking of the document or material with the same marking used in § 1017.17(a). § 1017.18 Joint documents or material. If a document or material marked as containing UCNI is under consideration for decontrol and falls under the cognizance of another DOE organization or other Government agency, the Reviewing Official or Denying Official must coordinate the decontrol review with that DOE organization or other Government agency. Any disagreement concerning the control or decontrol of any document or material that contains UCNI that was originated by or for DOE or another Government agency is resolved by the Secretary or his or her designee. Subpart D—Access to Unclassified Controlled Nuclear Information § 1017.19 Access limitations. A person may only have access to UCNI if he or she has been granted routine access by an Authorized Individual (see § 1017.20) or limited access by the DOE Program Secretarial Officer or NNSA Deputy or Associate Administrator with cognizance over the UCNI (see § 1017.21). The Secretary, or his or her designee, may impose additional administrative controls concerning the granting of routine or limited access to UCNI to a person who is not a U.S. citizen. § 1017.20 Routine access.

(a)*Authorized Individual.* The Reviewing Official who determines that a document or material contains UCNI is the initial Authorized Individual for that document or material. An Authorized Individual, for UCNI in his or her possession or control, may determine that another person is an Authorized Individual who may be granted access to the UCNI, subject to limitations in paragraph

(b)of this section, and who may further disseminate the UCNI under the provisions of this section.

(b)*Requirements for routine access.* To be eligible for routine access to UCNI, the person must have a need to know the UCNI in order to perform official duties or other Government-authorized activities and must be:

(1)A U.S. citizen who is:

(i)An employee of any branch of the Federal Government, including the U.S. Armed Forces;

(ii)An employee or representative of a State, local, or Indian tribal government;

(iii)A member of an emergency response organization;

(iv)An employee of a Government contractor or a consultant, including those contractors or consultants who need access to bid on a Government contract;

(v)A member of Congress or a staff member of a congressional committee or of an individual member of Congress;

(vi)A Governor of a state, his or her designated representative, or a State government official;

(vii)A member of a DOE advisory committee; or,

(viii)A member of an entity that has entered into a formal agreement with the Government, such as a Cooperative Research and Development Agreement or similar arrangement; or,

(2)A person who is not a U.S. citizen but who is:

(i)A Federal Government employee or a member of the U.S. Armed Forces;

(ii)An employee of a Federal Government contractor or subcontractor;

(iii)A Federal Government consultant;

(iv)A member of a DOE advisory committee; or,

(v)A member of an entity that has entered into a formal agreement with the Government, such as a Cooperative Research and Development Agreement or similar arrangement; or,

(3)A person who is not a U.S. citizen but who needs to know the UCNI in conjunction with an activity approved by the DOE Program Secretarial Officer or NNSA Deputy or Associate Administrator with cognizance over the UCNI. § 1017.21 Limited access.

(a)A person who is not eligible for routine access to specific UCNI under § 1017.20 may request limited access to such UCNI by sending a written request to the DOE Program Secretarial Officer or NNSA Deputy or Associate Administrator with cognizance over the information. The written request must include the following:

(1)The name, current residence or business address, birthplace, birth date, and country of citizenship of the person submitting the request;

(2)A description of the specific UCNI for which limited access is being requested;

(3)A description of the purpose for which the UCNI is needed; and,

(4)Certification by the requester that he or she:

(i)Understands and will follow these regulations; and

(ii)Understands that he or she is subject to the civil and criminal penalties under Subpart F of this part.

(b)The decision whether to grant the request for limited access is based on the following criteria:

(1)The sensitivity of the UCNI for which limited access is being requested;

(2)The approving official's evaluation of the likelihood that the requester will disseminate the UCNI to unauthorized individuals; and,

(3)The approving official's evaluation of the likelihood that the requester will use the UCNI for illegal purposes.

(c)Within 30 days of receipt of the request for limited access, the appropriate DOE Program Secretarial Officer or NNSA Deputy or Associate Administrator must notify the requester if limited access is granted or denied, or if the determination cannot be made within 30 days, of the date when the determination will be made.

(d)A person granted limited access to specific UCNI is not an Authorized Individual and may not further disseminate the UCNI to anyone. Subpart E—Physical Protection Requirements § 1017.22 Notification of protection requirements.

(a)An Authorized Individual who grants routine access to specific UCNI under § 1017.20 to a person who is not an employee or contractor of the DOE must notify the person receiving the UCNI of protection requirements described in this subpart and any limitations on further dissemination.

(b)A DOE Program Secretarial Officer or NNSA Deputy or Associate Administrator who grants limited access to specific UCNI under § 1017.21 must notify the person receiving the UCNI of protection requirements described in this subpart and any limitations on further dissemination. § 1017.23 Protection in use. An Authorized Individual or a person granted limited access to UCNI under § 1017.21 must maintain physical control over any document or material marked as containing UCNI that is in use to prevent unauthorized access to it. § 1017.24 Storage. A document or material marked as containing UCNI must be stored to preclude unauthorized disclosure. When not in use, documents or material containing UCNI must be stored in locked receptacles (e.g., file cabinet, desk drawer), or if in secured areas or facilities, in a manner that would prevent inadvertent access by an unauthorized individual. § 1017.25 Reproduction. A document marked as containing UCNI may be reproduced without the permission of the originator to the minimum extent necessary consistent with the need to carry out official duties, provided the reproduced document is marked and protected in the same manner as the original document. § 1017.26 Destruction. A document marked as containing UCNI must be destroyed, at a minimum, by using a cross-cut shredder that produces particles no larger than 1/4 -inch wide and 2 inches long. Other comparable destruction methods may be used. Material containing or revealing UCNI must be destroyed according to agency directives. § 1017.27 Transmission.

(a)Physically transmitting UCNI documents or material.

(1)A document or material marked as containing UCNI may be transmitted by:

(i)U.S. First Class, Express, Certified, or Registered mail;

(ii)Any means approved for transmission of classified documents or material;

(iii)An Authorized Individual or person granted limited access under § 1017.21 as long as physical control of the package is maintained; or,

(iv)Internal mail services.

(2)The document or material must be packaged to conceal the presence of the UCNI from someone who is not authorized access. A single, opaque envelope or wrapping is sufficient for this purpose. The address of the recipient and the sender must be indicated on the outside of the envelope or wrapping along with the words “TO BE OPENED BY ADDRESSEE ONLY.”

(b)Transmitting UCNI documents over telecommunications circuits. Encryption algorithms that comply with all applicable Federal laws, regulations, and standards for the protection of unclassified controlled information must be used when transmitting UCNI over a telecommunications circuit (including the telephone, facsimile, radio, e-mail, Internet). § 1017.28 Processing on Automated Information Systems (AIS). UCNI may be processed or produced on any AIS that complies with the guidance in OMB Circular No. A-130, Revised, Transmittal No. 4, Appendix III, “Security of Federal Automated Information Resources,” or is certified for classified information. Subpart F—Violations § 1017.29 Civil penalty.

(a)Any person who violates an UCNI security requirement of any of the following is subject to a civil penalty under this part:

(1)10 CFR Part 1017—Identification and Protection of Unclassified Controlled Nuclear Information; or

(2)Any other DOE regulation related to the safeguarding or security of UCNI if the regulation provides that violation of its provisions may result in a civil penalty pursuant to section 148 of the Act.

(b)If, without violating a requirement of any regulation issued under section 148, a person by an act or omission causes, or creates a risk of, the loss, compromise or unauthorized disclosure of UCNI, the Secretary may issue a compliance order to that person requiring the person to take corrective action and notifying the person that violation of the compliance order is subject to a notice of violation and assessment of a civil penalty. If a person wishes to contest the compliance order, the person must file a notice of appeal with the Secretary within 15 days of receipt of the compliance order.

(c)The Director may propose imposition of a civil penalty for violation of a requirement of a regulation under paragraph

(a)of this section or a compliance order issued under paragraph

(b)of this section, not to exceed $100,000 for each violation.

(d)*Settlements.* The Director may enter into a settlement, with or without conditions, of an enforcement proceeding at any time if the settlement is consistent with the objectives of DOE's UCNI protection requirements.

(e)*Investigations.* The Director may conduct investigations and inspections relating to the scope, nature and extent of compliance by a person with DOE security requirements specified in these regulations and take such action as the Director deems necessary and appropriate to the conduct of the investigation or inspection, including signing, issuing and serving subpoenas.

(f)*Preliminary notice of violation.*

(1)In order to begin a proceeding to impose a civil penalty under this part, the Director shall notify the person by a written preliminary notice of violation sent by certified mail, return receipt requested, of:

(i)The date, facts, and nature of each act or omission constituting the alleged violation;

(ii)The particular provision of the regulation or compliance order involved in each alleged violation;

(iii)The proposed remedy for each alleged violation, including the amount of any civil penalty proposed;

(iv)The right of the person to submit a written reply to the Director within 30 calendar days of receipt of such preliminary notice of violation; and,

(v)The fact that upon failure of the person to pay any civil penalty imposed, the penalty may be collected by civil action.

(2)A reply to a preliminary notice of violation must contain a statement of all relevant facts pertaining to an alleged violation. The reply must:

(i)State any facts, explanations, and arguments that support a denial of the alleged violation;

(ii)Demonstrate any extenuating circumstances or other reason why a proposed remedy should not be imposed or should be mitigated;

(iii)Discuss the relevant authorities that support the position asserted, including rulings, regulations, interpretations, and previous decisions issued by DOE;

(iv)Furnish full and complete answers to any questions set forth in the preliminary notice; and,

(v)Include copies of all relevant documents.

(3)If a person fails to submit a written reply within 30 calendar days of receipt of a preliminary notice of violation:

(i)The person relinquishes any right to appeal any matter in the preliminary notice; and

(ii)The preliminary notice, including any remedies therein, constitutes a final order.

(4)The Director, at the request of a person notified of an alleged violation, may extend for a reasonable period the time for submitting a reply or a hearing request letter.

(g)*Final notice of violation.*

(1)If a person submits a written reply within 30 calendar days of receipt of a preliminary notice of violation, the Director must make a final determination whether the person violated or is continuing to violate an UCNI security requirement.

(2)Based on a determination by the Director that a person has violated or is continuing to violate an UCNI security requirement, the Director may issue to the person a final notice of violation that concisely states the determined violation, the amount of any civil penalty imposed, and further actions necessary by or available to the person. The final notice of violation also must state that the person has the right to submit to the Director, within 30 calendar days of the receipt of the notice, a written request for a hearing under paragraph

(h)of this section.

(3)The Director must send a final notice of violation by certified mail, return receipt requested, within 30 calendar days of the receipt of a reply.

(4)Subject to paragraphs (g)(7) and (g)(8) of this section, the effect of final notice shall be:

(i)If a final notice of violation does not contain a civil penalty, it shall be deemed a final order 15 days after the final notice is issued.

(ii)If a final notice of violation contains a civil penalty, the person must submit to the Director within 30 days after the issuance of the final notice:

(A)A waiver of further proceedings; or

(B)A request for an on-the-record hearing under paragraph

(h)of this section.

(5)If a person waives further proceedings, the final notice of violation shall be deemed a final order enforceable against the person. The person must pay the civil penalty set forth in the notice of violation within 60 days of the filing of waiver unless the Director grants additional time.

(6)If a person files a request for an on-the-record hearing, then the hearing process commences.

(7)The Director may amend the final notice of violation at any time before the time periods specified in paragraphs (g)(4)(i) or (g)(4)(ii) of this section expire. An amendment shall add 15 days to the time period under paragraph (g)(4) of this section.

(8)The Director may withdraw the final notice of violation, or any part thereof, at any time before the time periods specified in paragraphs (g)(4)(i) or (g)(4)(ii) of this section expire.

(h)*Hearing.*

(1)Any person who receives a final notice of violation under paragraph

(g)may request a hearing concerning the allegations contained in the notice. The person must mail or deliver any written request for a hearing to the Director within 30 calendar days of receipt of the final notice of violation.

(2)Upon receipt from a person of a written request for a hearing, the Director shall:

(i)Appoint a Hearing Counsel; and

(ii)Select an administrative law judge appointed under section 3105 of Title 5, U.S.C., to serve as Hearing Officer.

(i)*Hearing Counsel.* The Hearing Counsel:

(1)Represents DOE;

(2)Consults with the person or the person's counsel prior to the hearing;

(3)Examines and cross-examines witnesses during the hearing; and,

(4)Enters into a settlement of the enforcement proceeding at any time if settlement is consistent with the objectives of the Act and DOE security requirements.

(j)*Hearing Officer.* The Hearing Officer:

(1)Is responsible for the administrative preparations for the hearing;

(2)Convenes the hearing as soon as is reasonable;

(3)Administers oaths and affirmations;

(4)Issues subpoenas, at the request of either party or on the Hearing Officer's motion;

(5)Rules on offers of proof and receives relevant evidence;

(6)Takes depositions or has depositions taken when the ends of justice would be served;

(7)Conducts the hearing in a manner which is fair and impartial;

(8)Holds conferences for the settlement or simplification of the issues by consent of the parties;

(9)Disposes of procedural requests or similar matters;

(10)Requires production of documents; and,

(11)Makes an initial decision under paragraph

(m)of this section.

(k)*Rights of the person at the hearing.* The person may:

(1)Testify or present evidence through witnesses or by documents;

(2)Cross-examine witnesses and rebut records or other physical evidence, except as provided in paragraph (l)(4) of this section;

(3)Be present during the entire hearing, except as provided in paragraph (l)(4) of this section; and

(4)Be accompanied, represented, and advised by counsel of the person's choosing.

(l)*Conduct of the hearing.*

(1)DOE shall make a transcript of the hearing.

(2)Except as provided in paragraph (l)(4) of this section, the Hearing Officer may receive any oral or documentary evidence, but shall exclude irrelevant, immaterial, or unduly repetitious evidence.

(3)Witnesses shall testify under oath and are subject to cross-examination, except as provided in paragraph (l)(4) of this section.

(4)The Hearing Officer must use procedures appropriate to safeguard and prevent unauthorized disclosure of classified information, UCNI, or any other information protected from public disclosure by law or regulation, with minimum impairment of rights and obligations under this part. The UCNI status shall not, however, preclude information from being introduced into evidence. The Hearing Officer may issue such orders as may be necessary to consider such evidence *in camera* including the preparation of a supplemental initial decision to address issues of law or fact that arise out of that portion of the evidence that is protected.

(5)DOE has the burden of going forward with and of proving by a preponderance of the evidence that the violation occurred as set forth in the final notice of violation and that the proposed civil penalty is appropriate. The person to whom the final notice of violation has been addressed shall have the burden of presenting and of going forward with any defense to the allegations set forth in the final notice of violation. Each matter of controversy shall be determined by the Hearing Officer upon a preponderance of the evidence.

(m)*Initial decision.*

(1)The Hearing Officer shall issue an initial decision as soon as practicable after the hearing. The initial decision shall contain findings of fact and conclusions regarding all material issues of law, as well as reasons therefor. If the Hearing Officer determines that a violation has occurred and that a civil penalty is appropriate, the initial decision shall set forth the amount of the civil penalty based on:

(i)The nature, circumstances, extent, and gravity of the violation or violations;

(ii)The violator's ability to pay;

(iii)The effect of the civil penalty on the person's ability to do business;

(iv)Any history of prior violations;

(v)The degree of culpability; and,

(vi)Such other matters as justice may require.

(2)The Hearing Officer shall serve all parties with the initial decision by certified mail, return receipt requested. The initial decision shall include notice that it constitutes a final order of DOE 30 days after the filing of the initial decision unless the Secretary files a Notice of Review. If the Secretary files a Notice of Review, he shall file a final order as soon as practicable after completing his review. The Secretary, at his discretion, may order additional proceedings, remand the matter, or modify the amount of the civil penalty assessed in the initial decision. DOE shall notify the person of the Secretary's action under this paragraph in writing by certified mail, return receipt requested. The person against whom the civil penalty is assessed by the final order shall pay the full amount of the civil penalty assessed in the final order within 30 days unless otherwise agreed by the Director.

(n)*Collection of penalty.*

(1)The Secretary may request the Attorney General to institute a civil action to collect a penalty imposed under this section.

(2)The Attorney General has the exclusive power to uphold, compromise or mitigate, or remit any civil penalty imposed by the Secretary under this section and referred to the Attorney General for collection.

(o)*Direction to NNSA.*

(1)Notwithstanding any other provision of this part, the NNSA Administrator, rather than the Director, signs, issues, serves, or takes the following actions that direct NNSA employees, contractors, subcontractors, or employees of such NNSA contractors or subcontractors.

(i)Subpoenas;

(ii)Orders to compel attendance;

(iii)Disclosures of information or documents obtained during an investigation or inspection;

(iv)Preliminary notices of violation; and,

(v)Final notice of violations.

(2)The Administrator shall act after consideration of the Director's recommendation. If the Administrator disagrees with the Director's recommendation, and the disagreement cannot be resolved by the two officials, the Director may refer the matter to the Deputy Secretary for resolution. § 1017.30 Criminal penalty. Any person who violates section 148 of the Atomic Energy Act or any regulation or order of the Secretary issued under section 148 of the Atomic Energy Act, including these regulations, may be subject to a criminal penalty under section 223 of the Atomic Energy Act (42 U.S.C. 2273). In such case, the Secretary shall refer the matter to the Attorney General for investigation and possible prosecution. [FR Doc. E7-18052 Filed 9-13-07; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-28957; Directorate Identifier 2007-CE-069-AD] RIN 2120-AA64 Airworthiness Directives; CTRM Aviation Sdn. Bhd. (Formerly Eagle Aircraft (Malaysia) Sdn. Bhd.) Model Eagle 150B Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

(AD)for the products listed above. This proposed AD results from mandatory continuing airworthiness information

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: An operator has reported severe exfoliation corrosion on Wing/Canard Flap Hinges, P/N 5731D01-16 (middle and outboard hinges) on his Eagle 150B. The corrosion has been detected during 100-hour inspection. The aircraft has accumulated more than 1000 flight hours. The corrosion is so severe that one of the Flap Hinges thickness has been reduced by 50%. The corrosion is not easily detected because the Flap Hinge is sandwiched between the Flap Hinge Support Bracket P/N 5731D01-01. The failure of the hinge bracket may result in disintegration of flap / canard wing thus leading to loss of control, with catastrophic consequences. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by October 15, 2007. ADDRESSES: You may send comments by any of the following methods: • *DOT Docket Web Site:* Go to *http://dms.dot.gov* and follow the instructions for sending your comments electronically. • *Fax:*

(202)493-2251. • *Mail:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. • *Hand Delivery:* U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at *http://dms.dot.gov;* or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone

(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Karl Schletzbaum, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4146; fax:

(816)329-4090. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-28957; Directorate Identifier 2007-CE-069-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because 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 we receive about this proposed AD. Discussion The Department of Civil Aviation (DCA), which is the aviation authority for Malaysia, has issued AD No. CAM AD 001-07-2007, dated July 20, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: An operator has reported severe exfoliation corrosion on Wing / Canard Flap Hinges, P/N 5731D01-16 (middle and outboard hinges) on his Eagle 150B. The corrosion has been detected during 100-hour inspection. The aircraft has accumulated more than 1000 flight hours. The corrosion is so severe that one of the Flap Hinges thickness has been reduced by 50%. The corrosion is not easily detected because the Flap Hinge is sandwiched between the Flap Hinge Support Bracket P/N 5731D01-01. The failure of the hinge bracket may result in disintegration of flap / canard wing thus leading to loss of control, with catastrophic consequences. The MCAI requires you to visually inspect the flap hinges and flap hinge support brackets for any corrosion. You are to take corrective action if you find any corrosion. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information CTRM Aviation Sdn. Bhd. has issued Mandatory Service Bulletin SB 1126, dated, July 19, 2007. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of the Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This Proposed AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 6 products of U.S. registry. We also estimate that it would take about 3 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $80 per work-hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $1,440, or $240 per product. In addition, we estimate that any necessary follow-on actions would take about 4 work-hours and require parts costing $226, for a cost of $546 per product. We have no way of determining the number of products that may need these actions. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **CTRM Aviation Sdn. Bhd. (Formerly Eagle Aircraft (Malaysia) Sdn. Bhd.):** Docket No. FAA-2007-28957; Directorate Identifier 2007-CE-069-AD. Comments Due Date

(a)We must receive comments by October 15, 2007. Affected ADs

(b)None. Applicability

(c)This AD affects Model Eagle 150B airplanes, all serial numbers, that are certificated in any category. Subject

(d)Air Transport Association of America

(ATA)Code 57: Wings. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: An operator has reported severe exfoliation corrosion on Wing/Canard Flap Hinges, P/N 5731D01-16 (middle and outboard hinges) on his Eagle 150B. The corrosion has been detected during 100-hour inspection. The aircraft has accumulated more than 1000 flight hours. The corrosion is so severe that one of the Flap Hinges thickness has been reduced by 50%. The corrosion is not easily detected because the Flap Hinge is sandwiched between the Flap Hinge Support Bracket P/N 5731D01-01. The failure of the hinge bracket may result in disintegration of flap/canard wing thus leading to loss of control, with catastrophic consequences. The MCAI requires you to visually inspect the flap hinges and flap hinge support brackets for any corrosion. You are to take corrective action if you find any corrosion. Actions and Compliance

(f)Unless already done, do the following actions:

(1)Within the next 25 hours time-in-service

(TIS)after the effective date of this AD, inspect the flap hinges and flap hinge support brackets for any corrosion, following CTRM Aviation Mandatory Service Bulletin SB 1126, dated July 19, 2007.

(2)Before further flight, if you find any corrosion as a result of any inspection required by paragraph (f)(1) of this AD, take corrective action following CTRM Aviation Mandatory Service Bulletin SB 1126, dated July 19, 2007. FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows: No Differences. Other FAA AD Provisions

(g)The following provisions also apply to this AD:

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, Standards Office, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Karl Schletzbaum, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone:

(816)329-4146; fax:

(816)329-4090. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.

(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ), the Office of Management and Budget

(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information

(h)Refer to MCAI Department of Civil Aviation Malaysia AD No. CAM AD 001-07-2007, dated July 20, 2007; and CTRM Aviation Mandatory Service Bulletin SB 1126, dated July 19, 2007, for related information. Issued in Kansas City, Missouri, on September 10, 2007. Kim Smith, Manager, Small Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-18148 Filed 9-13-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF LABOR Office of Labor-Management Standards 29 CFR Part 215 RIN 1215-AB58 Amendment to Guidelines for Processing Applications for Assistance To Conform to Sections 3013(h) and 3031 of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act—A Legacy for Users and To Improve Processing for Administrative Efficiency AGENCY: Office of Labor-Management Standards, Department of Labor. ACTION: Proposed rule SUMMARY: Pursuant to section 5333(b) of the Federal transit law, the Department of Labor (Department) must certify, as a condition of certain grants of Federal financial assistance, fair and equitable labor protective provisions to protect the interests of employees affected by such Federal assistance. 1 The Department administers this program through guidelines set forth at 29 CFR part 215. The Department's proposed changes conform the guidelines to recently enacted federal legislation, in particular, sections 3013(h) and 3031 of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act—A Legacy for Users. In addition to changes mandated by statute, the Department also proposes revisions to the guidelines that will enhance the speed and efficiency of the Department's processing of grant certifications. The proposed revisions to existing procedures for processing grant applications under the Federal transit law are intended to ensure timely certifications in a predictable manner, and remain consistent with the transit law's statutory objectives. 1 See 49 U.S.C. 5333(b). DATES: Comments on these proposed revisions to the guidelines must be received on or before October 15, 2007. ADDRESSES: You may submit comments, identified by RIN 1215-AB58, by any of the following methods: *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. *Fax:*

(202)693-1342. *Mail, Express Delivery, Hand Delivery, and Messenger Service:* Mailed or delivered comments should be addressed to Ann Comer, Chief, Division of Statutory Programs, Office of Labor-Management Standards, Employment Standards Administration, U.S. Department of Labor, 200 Constitution Avenue, NW., Room N-5112, Washington, DC 20210. Because the Department continues to experience delays in U.S. mail delivery due to the ongoing concerns involving toxic contamination of government mail, you should take this into consideration when submitting comments to ensure meeting submission deadlines. It is recommended that you confirm receipt of your comments by contacting

(202)693-0126 (this is not a toll-free number). Individuals with hearing impairments may call

(800)877-8339 (TTY/TDD). *Docket Access:* Electronic access to the docket and comments received is available through the Federal eRulemaking Portal ( *www.regulations.gov* ). Comments will also be available for public inspection and copying during normal business hours in Room N-5112 at the address below. The Department invites written comments on these proposed guidelines from members of the public. The proposed guidelines are available on the Federal eRulemaking Portal at *www.regulations.gov* and on the Web site maintained by the Office of Labor-Management Standards (“OLMS”) at *http://www.olms.dol.gov.* Anyone who is unable to access this information on the Internet can obtain copies by contacting the Division of Statutory Programs, OLMS at *OLMS-TransitGrant@dol.gov* or by calling

(202)693-0126 (this is not a toll-free number). Individuals with hearing impairments may call

(800)877-8339 (TTY/TDD). FOR FURTHER INFORMATION CONTACT: Ann Comer, Chief, Division of Statutory Programs, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210, *OLMS-TransitGrant@dol.gov,*

(202)693-0126 (this is not a toll-free number), or

(800)877-8399 (TTY/TDD). Because comments sent to the docket are available for public inspection, the Department cautions commenters against including in their comments personal information such as social security numbers and birth dates. SUPPLEMENTARY INFORMATION: I. Background Under 49 U.S.C. 5333(b), when Federal funds are used to acquire, improve, or operate a transit system, the Department must ensure that the recipient of those funds establishes arrangements to protect the rights of affected transit employees. Federal law requires such arrangements to be “fair and equitable,” and the Department must certify the arrangements before the U.S. Department of Transportation's Federal Transit Administration

(FTA)can award certain funds to grantees. These employee protective arrangements must include provisions that may be necessary for the preservation of rights, privileges, and benefits under existing collective bargaining agreements or otherwise; the continuation of collective bargaining rights; the protection of individual employees against a worsening of their positions related to employment; assurances of employment to employees of acquired transportation systems; assurances of priority of reemployment of employees whose employment is ended or who are laid off; and paid training or retraining programs. Federal transit grants requiring the Department's certification are processed in accordance with published guidelines, 29 CFR part 215. In most cases, the guidelines call for the Department to refer a pending grant application to interested parties—recipients and representatives of transit employees—to afford them an opportunity to provide their views on substantive employee protections. The parties may object to the proposed terms and conditions and, if the Department finds their objections to be sufficient, they will be afforded an opportunity to negotiate specified provisions. There are, however, exceptions to the general rule requiring the referral of grant applications to the parties for their consideration, and, as explained below, the Safe, Accountable, Flexible, and Efficient Transportation Equity Act—A Legacy for Users (Pub. L. 109-59, 119 Stat. 1144 (2005)) (SAFETEA-LU) incorporates certain of those exceptions into the law. SAFETEA-LU provides for the reauthorization of funds for Federal aid to highways, highway safety programs, transit programs, and other transportation-related programs and projects. In addition to the funding reauthorization, SAFETEA-LU modifies or clarifies statutory standards applicable to the Department's certification of employee protections associated with transit grants. Consequently, the Department proposes a number of revisions to its guidelines to conform to the requirements of the statute. First, section 3031 of SAFETEA-LU mandates that grant applications to purchase like-kind equipment or facilities shall not be referred to parties for review. Second, section 3031 similarly excepts from the Department's referral requirement grant amendments that do not materially revise or amend existing assistance agreements. Third, section 3013(h) of SAFETEA-LU addresses the processing of grants under 49 U.S.C. 5311, which applies to formula grants for “Other Than Urbanized” transit operations. 2 Labor protections for “Other Than Urbanized” grants are currently approved through application of a certified Special Warranty without referral to the affected parties, and a transit grant recipient must accept the certified arrangement as a condition of the grant. SAFETEA-LU codifies this practice of non-referral. 2 The “Other Than Urbanized” transit grant program authorized by 49 U.S.C. 5311 was previously known as the “small urban and rural program.” For clarity and consistency, this program will generally be referred to throughout this document as the “Other Than Urbanized” program and not by its section number in Title 49 of the U.S. code. Another important provision of SAFETEA-LU addresses substantive rights of parties should a dispute arise when a public transit authority replaces one private transit bus service contractor with another through competitive bidding. Section 3031 of SAFETEA-LU directs the Department to follow certain substantive principles enunciated in the Department's decisions for grant NV-90-X021 (decision of September 21, 1994, supplemented by decision of November 7, 1994, also called the “Las Vegas decisions”) when making determinations involving assurances of employment when one private transit bus service contractor replaces another through competitive bidding. See 49 U.S.C. 5333(b)(5). SAFETEA-LU also specifies that, when making determinations regarding the sufficiency of objections, the principles enunciated in the Las Vegas decisions shall not serve as a basis for a party's objection to employee protective arrangements. The Las Vegas decisions involve a number of issues, but key to the new statutory provision are those portions of the decisions that address assurances of employment in the context of an acquisition. The decisions set forth criteria for determining whether an acquisition has occurred, and conclude that where an acquisition has occurred, only subsection 5333(b)(2)(D) provides for assurances of employment. In cases where no acquisition has occurred, subsections 5333(b)(2)(A) and

(B)may provide the bases for providing assurances of employment, if a right to such employment is mandated by other sources, such as other laws, a collective bargaining agreement, a personnel manual, other protective agreements, or past practice. Because the Department's Guidelines are procedural in nature, and do not encompass substantive principles governing the adjudication of rights of parties, this provision of SAFETEA-LU will not be reflected in the revisions of the Guidelines. Although not incorporated in the Guidelines, the Department, of course, will adhere to the statutory mandate of section 3031. In addition to these statutorily mandated changes, the Department proposes to revise certain existing procedures to improve administrative efficiency and ensure that timely certifications are issued in a predictable manner while still adhering to statutory standards. First, the Department proposes the implementation of a Unified Protective Arrangement

(UPA)for new grants for both operating and capital expenditures where the parties do not have a pre-existing negotiated protective agreement or certain other protections explained further below. Under the current guidelines, existing negotiated protective agreements are applied to new grants. Where, however, no such agreement exists, the Department proposes and certifies separate standardized arrangements depending on whether the grant is for operating or capital expenditures. This practice of implementing separate arrangements depending on the nature of the grant expenditure is not required by statute, and has led to a proliferation of protective arrangements. Under the Department's proposal, the Department will apply a Unified Protective Arrangement, which is derived primarily from the Department's current Capital Arrangement, to both capital and operating grants, with the exceptions explained below. Second, the Department proposes to expedite processing of employee protection certifications by applying a warranty arrangement to grants for the Over-the-Road Bus Accessibility Program (OTRB). 3 Presently, a warranty certification process is used only for “Other Than Urbanized” grants under the program established in 49 U.S.C. 5311, as noted above. The Department initially applied the more extensive referral procedure of 29 CFR 215.3(b) to the OTRB grants program, which was established primarily to retrofit over-the-road buses to meet the requirements of the Americans with Disabilities Act of 1990, 42 U.S.C. 12101, *et seq.* (ADA). However, this referral process was not required under the Federal transit law. 4 Moreover, based on the Department's experience with the OTRB program, it is now clear that a warranty process, which applies certified protections without referral, is a suitable procedure for this program and will increase the timely processing of the Department's certifications. The Department is therefore proposing adoption of the warranty procedure for the OTRB program. 3 The OTRB program was first established by Congress in section 3038 of TEA-21, Pub. L. No. 105-178, 112 Stat. 107 (1998). It has been amended a number of times, most recently by section 3039 of SAFETEA-LU. The authority for the program currently appears in the Historical and Statutory Notes to 49 U.S.C. 5310. For clarity and consistency, the OTRB program will be referred to as such throughout this document, and not by reference to either its public law number or to the historical note to section 5310 of title 49 of the U.S. code. 4 See original 49 U.S.C. 5310(f) in Historical and Statutory Notes following 49 U.S.C. 5310 (specifying that OTRB grants “shall be subject to all of the terms and conditions applicable to” grants under section 5311). II. Revisions to Section 5333(b) Processing of Federal Transit Grants A. Processing of Grant Applications To Replace Equipment or Facilities of “Like-Kind” The Department proposes amending the guidelines to conform to section 3031 of SAFETEA-LU, which added a new subparagraph to section 5333(b) relating to grants for the purchase of like-kind equipment or facilities. Section 5333(b)(4) now explicitly requires that employee protective arrangements for grants requesting assistance to purchase like-kind equipment or facilities be certified by the Department without referral to the parties. The current guidelines, at section 215.3(b)(1), reflect this practice, except that this provision creates an exception to non-referral if the Department determines that the grant application has a potential material effect on employees. To conform the Guidelines to the statutory mandate, the proposed guidelines, at section 215.3(a)(4)(iii), provide that employee protections relating to grants funding equipment and/or facilities of like-kind shall be certified without a referral, and the “material effect” exception is deleted. Section 215.3(a)(4)(iii) further addresses the terms the Department will apply in like-kind grant applications. That section states that if the Department determines that changed circumstances, which may include negotiated revisions to previously certified agreements or modifications to State law, render the previously certified arrangement insufficient to satisfy the requirements of the statute, the Department will make minimally necessary modifications to the applicable protections to ensure statutory compliance. B. Processing of Amendatory Grant Applications The Department proposes amending section 215.5 of the guidelines to conform to section 3031 of SAFETEA-LU, which provides that “grant amendments which do not materially amend existing assistance agreements” will not be subject to the Department's referral procedures. The guidelines have been revised to reflect this requirement and to identify some types of grant amendments that will be certified without referral. These include

(1)administrative amendments that modify or clarify in immaterial respects certain terms, conditions or provisions of a previously certified grant without changing the scope, amount or purpose of the grant;

(2)grant amendments that do not include an increase of more than 20 percent of the previously certified total Federal grant amount, and do not add a new project activity; and

(3)Full Funding Grant Agreement

(FFGA)Amendments to grants that included the full budget and scope of activities for the project in a grant previously certified by the Department. The Department will continue to refer grant amendments to the parties for review under the procedures set forth in section 215.3 in those cases in which applications materially amend or revise a grant. Finally, the Department's proposed guidelines include language addressing budget revisions. The Federal Transit Administration permits grant applicants to undertake certain limited changes without prior FTA approval. In those situations the Department's prior certification of the project funded under the existing assistance agreement will also be applicable to any budget revisions. *See* 29 CFR 215.5. C. Special Warranty Procedures for Grant Applications for Other Than Urbanized Areas and Grant Applications for Over-the-Road Bus Accessibility Programs For grant applications for “Other Than Urbanized” areas, SAFETEA-LU requires the use of a warranty as the sole mechanism for protections to be applied to the small urban and rural grant program and eliminates the Secretary of Labor's options to either waive the application of section 5333(b) or to apply alternative comparable arrangements. Section 3013(h) of SAFETEA-LU specifies that employee protections will apply only “if the Secretary of Labor utilizes a special warranty that provides a fair and equitable arrangement to protect the interests of employees.” The procedures in this section will also apply to Over-the-Road Bus grants, which are discussed in greater detail below in subsection E. Prior to the enactment of SAFETEA-LU, the Department followed procedures contained in a “Guidebook” published in September 1979 governing the processing of small urban and rural grants. The Department is discontinuing use of the 1979 Guidebook, and has included in sections 215.3(a)(4)(i) and 215.7 several changes to the process established in its Guidebook for the application of a warranty without referral when processing small urban and rural grants. First, as required under SAFETEA-LU, the Department will eliminate waivers and procedures to request alternative comparable arrangements. Second, the Department will eliminate the requirement that States or other applicants provide the Department with letters of assurance indicating that grant subrecipients have signed the Special Section 13(c) Warranty, as was previously done for small urban and rural grants. Instead, the Department will include a requirement in the new Special Warranty Arrangement, which will be developed for application to the Other Than Urbanized and OTRB programs, that the protective arrangements are binding upon any subrecipients assisted under the grant. Third, the Department will eliminate any need for unions to request to become a party to the Special Warranty Arrangement in connection with a specific grant by specifying in the warranty that any labor organization representing transit employees in the service area of the grant recipient(s) will be deemed a party to the arrangement. Finally, the Department will no longer make findings of “non-compliance” for States or other applicants under the Other Than Urbanized program. The Special Warranty Arrangement will provide dispute resolution procedures for resolution of any disputes concerning the States' or other applicants' compliance with the requirements of the warranty. In addition to the modifications noted above, the Department proposes in revised 215.7 to utilize the Special Warranty for grants under the OTRB program, in addition to its current utilization of the Special Warranty in the “Other Than Urbanized” program. The OTRB was established primarily to retrofit over-the-road buses to meet the requirements of the Americans with Disabilities Act of 1990, 42 U.S.C. 12101, *et seq.* (ADA). As a result, grants under this program routinely involve equipment adaptations or, in some cases, training, and the requests for funds have been very similar over time. Accordingly, because the grants are routine and relatively undifferentiated, standardized protections are more appropriate than project-specific protections. In utilizing the Special Warranty in the OTRB program, employee rights and interests will be continue to be protected, while at the same time permitting enhanced program efficiencies. The Department also intends to revise its internal operating procedures when it utilizes the Special Warranty in both the OTRB and “Other Than Urbanized” programs. These new procedures require that the current version of the Special Warranty Arrangement be included in every contract of assistance between FTA and the applicant receiving assistance for “Other Than Urbanized” or OTRB programs. The FTA will notify the Department that it has funded “Other Than Urbanized” and OTRB grants by transmitting information copies of the grant applications to the Department upon award of the grant. The “Other Than Urbanized” applications will include information identifying labor organizations representing transit employees of each subrecipient, the unions representing employees of other transit providers in the service area, and a list of those other transit providers. To facilitate inclusion of this information in the grant application, a sample form will be posted on the OLMS Web site. The Department will work with FTA to utilize this information to inform labor organizations representing affected transportation employees of OTRB grants and their rights under the Special Warranty Arrangement. The OTRB applications will only need to include information identifying the labor organizations representing employees of the grant recipient(s). If necessary, the Department will use available information or may contact the applicant to identify labor organizations in the service area of OTRB grant recipients. These may include a broad range of unions where charter services that operate throughout the country receive assistance. These revised procedures will be implemented because the Department's prior procedures were not well understood by the regulated community, and permit a more streamlined and certain manner by which to notify the parties of their rights under the protective arrangement. The revised procedures will assure that appropriate, legally-binding and legally-sufficient protections are in place with no diminution of statutory standards, while simultaneously advancing administrative efficiency. The Department intends to modify the Special Warranty Arrangement to limit the Department's involvement as a claims arbitrator under the Other Than Urbanized and OTRB programs. The Special Warranty will now set out a process by which the parties will designate a neutral, third-party arbitrator to resolve claims involving employees represented by a union, in contrast to the current Special Section 13(c) Warranty that requires the Secretary of Labor to act as the arbitrator “in the event [the parties] cannot agree upon such procedure.” Because revisions to the Special Warranty involve programmatic changes that are not within the scope of this NPRM, which deals solely with revisions to the Department's guidelines, specific revisions to the Special Warranty will not be set out in detail here. However, the Department intends to include in the Special Warranty an arbitration process similar to that set out in paragraph 15 of the National Model Agreement, which can be found on the Department's Web site at *http://www.dol.gov/esa/regs/compliance/olms/agreement.htm.* The Department recognizes that a dispute resolution mechanism, although not expressly required by the statute, is essential to a fair and equitable protective arrangement. Private arbitration of disputes over the interpretation, application and enforcement of protective agreements has historically been the preferred dispute resolution mechanism in protective arrangements, both in transit employee protection as well as under other statutes providing for rail labor protection. In addition, designation of a Cabinet-level official as the responsible arbitrator, which is unique in comparison to other statutory programs providing analogous employee protections, has created an excessive burden on Departmental resources during this period of increased fiscal restraint. For these reasons, the Department will remove the Secretary as “fallback” arbitrator for disputes arising under the Special Warranty and specify that parties to claims disputes should employ arbitration by a neutral third party to resolve those disputes. 5 Employees not represented by a labor organization will still be able to request that the Department resolve claims involving the interpretation, application and enforcement of an arrangement. 5 For similar reasons, the Department intends to modify its standard certification letter that currently provides that the Secretary will “designate a neutral third party or appoint a staff member to serve as arbitrator” to resolve disputes by service area employees over the interpretation, application and enforcement of the terms of protective arrangements. In the future, the Department's certification letters will reflect that in those cases in which service area employees are represented by a labor organization that is deemed to be a party to a protective arrangement, the dispute resolution mechanism of that arrangement will be applicable to those service area employees. In those cases in which service area employees are not party to the protective arrangement, the revised certification letter will now set out a process by which the grant recipient and the service area employees will designate a neutral, third-party arbitrator to resolve claims of service area employees. Finally, as to claims by service area employees not represented by a union, the certification letter will state, as is current practice, that the Secretary may designate a neutral third party or appoint a staff member to serve as arbitrator. The new Special Warranty Arrangement will also contain provisions to ensure that employees are provided with appropriate notice that the transit provider is the recipient of Federal transit assistance and has agreed to the requirements of the Special Warranty Arrangement. As with the revised Unified Protective Arrangement discussed below, the Special Warranty Arrangement will be included on the Department's Web site and may be updated from time to time to reflect developments in the employee protection program. The latest version will, in each instance, be incorporated by reference in the contract of assistance between the FTA and any grant recipient. D. Unified Protective Arrangement The Department is proposing to amend section 215.3(b)(2) and

(3)of the guidelines to implement use of a unified protective arrangement

(UPA)for both operating and capital grants where there is no existing appropriate negotiated protective agreement. The Department has determined that the requirements of the statute will be satisfied through the application of a single arrangement that applies for both operating and capital assistance grants. The principal difference between the current Operating and Capital Assistance Protective Arrangements is the “sole provider clause,” which is currently included only in the Operating Arrangement. When the Department developed the Operating Arrangement, which was based on the National (Model) Agreement negotiated between transit unions and operators, it incorporated the sole-provider clause contained in the Model Agreement. The sole provider clause was not included in the Department's Capital Arrangement, because that arrangement was based on the Special Warranty, which did not include the clause. The Department's inclusion of the clause in its Operating Arrangement was not the product of negotiations between the transit unions and operators, and is not required in order to meet the requirements of the statute. Therefore, under this proposal, the UPA will not contain a sole provider clause. Moreover, application of a single unified document to future grants will simplify the preparation of referrals, expedite processing of grant applications, and continue to satisfy the requirements of the statute. In lieu of the multiple Operating and Capital Arrangements certified since January 1996, a single UPA generally will be proposed when certifying future grants. This will prevent the proliferation of new protective arrangements each time a new union is recognized or service is expanded to areas involving additional unions. It will also provide administrative certainty for the applicant and union because, with the exception of existing negotiated agreements and certain arrangements which are the product of negotiations or determinations, only the Unified Protective Arrangement will be applied to any particular grant. The UPA certified for a grant will always reflect current program policies and statutory standards applicable to grants, and will be updated whenever necessary. This process remains consistent with the intent of the Department's 1996 guidelines to preserve existing negotiated protective agreements while providing a process in which arrangements can be put in place quickly for new applicants or subrecipients. The Department proposes to revise section 215.3(b) to provide that a UPA will be proposed for the protection of transit employees represented by a union, except in those cases in which protective terms set by other instruments are appropriate to the grant. Under those exceptions, the Department will make a referral based on labor protective provisions contained in

(1)a signed negotiated protective agreement or the National Model Agreement as subscribed to by unions and grant recipients;

(2)agreed-upon terms adopted by a state or local government;

(3)an arrangement that is based on an agreement by the parties that resolves issues not addressed by the UPA; or

(4)a determination by the Department of disputed protections that are not otherwise addressed in the UPA. In those cases in which unions and grant recipients have previously agreed to modify a proposed protective arrangement or the Department resolved disputed issues in a proposed arrangement, and those same issues are addressed in the UPA in a manner that is consistent with the prior agreed-upon or determined arrangement, the Department will propose application of the UPA to the project. If the parties' arrangement is inconsistent with the UPA, but continues to satisfy the requirements of the statute, the parties' arrangement will continue to be proposed for new projects. For example, assume that an applicant has a pending project including both operating and capital assistance and is also a party to an executed agreement with a union dated September 30, 1985, and several Operating and Capital Assistance Protective Arrangements with various other unions dated between January 29, 1996, when the new process took effect, and September 30, 2005. Under the revised procedures, the Department will propose certification of the applicant's next pending grant on the basis of the September 30, 1985 Agreement for the union covered by that agreement; as to the other unions, however, the Department will propose certification on the basis of the current Unified Protective Arrangement instead of the provisions in the numerous Operating and Capital Arrangements dated between 1996 and 2005. Protections that are the product of negotiations often contain provisions unique to the transit property involved. Such protections may also include a provision allowing an additional local union to become a party. Under the proposed procedures, the Department will accommodate the wishes of the parties to employ such an existing provision in its certification. As previously indicated, the Department will also continue to apply certain existing protective terms certified as a Departmental determination of issues in dispute where those issues are not otherwise addressed in the current Unified Protective Arrangement. The UPA will be available on the OLMS Web site and may be updated from time to time to reflect developments in the employee protective program. The latest version will, in each instance, be incorporated by reference in the contract of assistance between the FTA and the grant applicant. E. Exclusion of Over-the-Road Bus Accessibility Program From the Department's Referral Process The Department is proposing to amend section 215.3(a)(4) of the guidelines to specify that OTRB grants will no longer be subject to its referral process. The OTRB program was established in 1998 by TEA-21, and intended primarily to retrofit over-the-road buses to meet the requirements of the Americans with Disabilities Act of 1990, 42 U.S.C. 12101, *et seq.* (ADA). Section 3038 of TEA-21 stated that OTRB grants “shall be subject to all of the terms and conditions applicable to subrecipients” of grants for the “Other Than Urbanized” program, which requires no referral process. Although TEA-21 did not require use of referral procedures for the certification of protections for Over-the-Road Bus grants, the Department applied the established referral procedure at the outset of the program. The Department's experience with this program now suggests that it is appropriate to apply a warranty arrangement, and eliminate the use of the referral process, as originally contemplated by TEA-21. The Department has included procedures for processing of OTRB grants in new section 215.7, which also provides procedures to be followed for the Other Than Urbanized program. F. Administrative Changes Several adjustments have been made to the guidelines to reflect current administrative practices. First, the Department has eliminated language contained in section 215.2 of the 1999 guidelines indicating that it will process applications that are in “preliminary” form. This section now requires that applications “be in final form,” based on the Department's determination that its administrative processes not be engaged until the grant application reflects the actual project activities to be undertaken. Also, section 215.6 has been revised to further explain how interested parties may utilize the July 23, 1975 Model Agreement. In particular, section 215.6 now contains procedures, comparable to those in paragraphs 26, 27, and 28 of the Model Agreement itself, by which applicants and unions may become a party to or withdraw from the Model Agreement. In addition, section 215.8 will be modified to add an e-mail address and correct the room number of the Statutory Programs office. Finally, the text of section 5333(b) of the Federal transit law, which is set out in its entirety in section 215.1 of the current Guidelines, has been removed from that section in the proposed Guidelines so that modifications of the Guidelines will not be necessary each time statutory changes are enacted. III. Regulatory Procedures Executive Order 12866 This proposed rule has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department has determined that this notice of proposed rulemaking is not a “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. The Department has also determined that this notice of proposed rulemaking is not “economically significant” as defined in section 3(f)(1) of Executive Order 12866. Therefore, the information enumerated in section 6(a)(3)(C) of the order is not required. Regulatory Flexibility Act This proposed rule addresses the procedural steps for obtaining the Department's certification that employee protective arrangements under the Federal transit law are in place as required under SAFETEA-LU. The amendment will not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 605(b)) is not required. The Assistant Secretary for Employment Standards has certified this conclusion to the Chief Counsel for Advocacy of the Small Business Administration. Unfunded Mandates Reform Executive Order 12875—This rule will not create an unfunded Federal mandate upon any State, local or tribal government. Unfunded Mandates Reform Act of 1995—This rule will not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments, in the aggregate, of $100 million or more, or in increased expenditures by the private sector of $100 million or more. Paperwork Reduction Act These guidelines contain no new information collection requirements for purposes of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). Small Business Regulatory Enforcement Fairness Act of 1996 This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of the United States-based companies to compete with foreign- based companies in domestic and export markets. List of Subjects in 29 CFR Part 215 Grant administration; Grants—transportation; Labor-management relations; Labor unions; Mass transportation. In consideration of the foregoing, the Department of Labor, Office of Labor-Management Standards, hereby proposes to amend part 215 of title 29 of the Code of Federal Regulations as set forth below. PART 215—GUIDELINES, SECTION 5333(b), FEDERAL TRANSIT LAW 1. The authority citation for part 215 is revised to read as follows: Authority: Secretary's Order No. 4-2007, 72 FR 26159, May 8, 2007. 2. Section 215.1 is revised to read as follows: § 215.1 Purpose. The purpose of these guidelines is to provide information concerning the Department of Labor's administrative procedures in processing applications for assistance under the Federal Transit law, as codified at 49 U.S.C. chapter 53. § 215.2 [Amended] 3. Section 215.2 is amended by removing “may be in either preliminary or final form” and adding in its place “must be in final form”. 4. Section 215.3 is amended as follows: a. Revise paragraphs (a)(3), (a)(4),

(b)introductory text, (b)(1), and (2); The revisions and additions read as follows: § 215.3 Employees represented by a labor organization.

(a)* * *

(3)If an application involves a grant to a state administrative agency or designated recipient that will pass assistance through to subrecipients, the Department will refer and process each subrecipient's respective portion of the project in accordance with this section. If a state administrative agency or designated recipient has previously provided employee protections on behalf of subrecipients in accordance with the terms of a negotiated agreement, the referral will be based on those terms and conditions.

(4)The referral procedures set forth in paragraphs

(b)through

(h)of this section are not applicable to the following grants:

(i)Grants to applicants for the Over-the-Road Bus Accessibility Program, and grant applications for the Other Than Urbanized Program; a special warranty will be applied to such grants under the procedures in § 215.7.

(ii)Grants to applicants serving populations under 200,000 under the Job Access and Reverse Commute Program or grants to capitalize SIB accounts under the State Infrastructure Bank Program.

(iii)Grants involving only capital assistance for replacement of equipment and/or facilities of like-kind; these will be certified by the Department without referral on the basis of existing agreements or the Unified Protective Arrangement as referenced in paragraphs (b)(1) or (b)(2) of this section. Where application of the existing protective agreement(s) or the Unified Protective Arrangement would not satisfy the requirements of the statute in the circumstances presented, the Department will make any necessary modifications to the existing protections to ensure that the requirements of the statute are satisfied.

(b)Upon receipt from the Federal Transit Administration of an application involving affected employees represented by a labor organization, the Department will refer a copy of the application and proposed terms for certification to that organization and to the applicant, and will also provide a copy to subrecipients with unions in their service area.

(1)The Department's referral will be based on a single Unified Protective Arrangement except in those cases in which the application involves an applicant or subrecipient that has protective terms and conditions, appropriate to the grant, set by:

(i)A signed negotiated agreement or formal acceptance of the July 23, 1975 National (Model) Agreement;

(ii)Agreed-upon terms adopted by a State or local government through a resolution or similar instrument;

(iii)A protective arrangement agreed to by the parties to resolve issues not otherwise addressed by the Unified Protective Arrangement; or

(iv)A determination of protective terms by the Department involving issues not otherwise addressed by the Unified Protective Arrangement. Note to paragraphs (b)(1)(i) through (iv): In the above cases (i-iv), the Department's referral will incorporate such protections as appropriate.

(2)The terms and conditions of the Unified Protective Arrangement shall be similar to those contained in the Department's Capital Arrangement. The Capital Arrangement was derived from the Special Section 13(c) Warranty initially developed and certified for the small urban and rural program in 1979, which incorporates provisions of the July 23, 1975 Model Agreement; 5. Section 215.5 is revised to read as follows: § 215.5 Processing of amendments.

(a)Grant modifications in the form of grant amendments will be transmitted by the Federal Transit Administration to the Department for review. Applications amending a grant for which the Department has already certified fair and equitable arrangements to protect the interests of transit employees affected by the project, will be processed by the Department following one of the two procedures described in paragraphs (a)(1) and

(2)of this section.

(1)When an application amends in immaterial respects a grant for which the Department has already certified fair and equitable arrangements, the Department will, on its own initiative and without referral to the parties, certify the subject grant on the same terms and conditions as were certified for the project as originally constituted. The Department's processing of these applications will be expedited and copies will be forwarded to interested parties. Grants that do not materially amend existing grants of assistance include but are not limited to:

(i)Administrative Amendments that modify or clarify in a purely immaterial manner terms, conditions or provisions of a previously certified grant;

(ii)Grant Amendments and Revised Grants that do not include a total budget increase of more than 20 percent of the previously certified Federal amount and do not add a new project activity; and

(iii)Full Funding Grant Agreement

(FFGA)Amendments that included the full budget and scope of activities for the project in a grant previously certified by the Department.

(2)When an application amends a grant for which the Department has previously certified fair and equitable arrangements in a manner that materially changes or amends an existing grant of assistance, the Department will refer and/or process the labor certification provisions of the amended grant according to procedures specified under §§ 215.3 and 215.4, as appropriate.

(b)Budget Revisions that make minor changes within the scope of the existing grant agreement and do not require a Federal Transit Administration grant amendment, as set forth in Federal Transit Administration guidance, will be covered under the Department's original certifications. 6. Section 215.6 is amended as follows: a. Designate the existing text as paragraph

(a)and remove “(b)(3)(i)” and add in its place “(b)(2)”; b. Add new paragraphs (b), (c), and

(d)to read as follows: § 215.6 The Model Agreement.

(a)* * *

(b)A grant applicant that is an employer not initially a party to the Model Agreement but seeking to use the Model Agreement as the basis of the Department's certification may become party thereto by serving written notice of its desire to do so upon the Secretary of Labor, the American Public Transit Association, or its designee, and the unions signatory to the Model Agreement, or their designee. In the event of any objection to the addition of such employer as a signatory, then the dispute as to whether such employer shall become a signatory shall be determined by the Secretary of Labor.

(c)A labor organization that is the collective bargaining representative of urban mass transportation employees in the service area of a grant recipient but not initially a party to the Model Agreement, and who may be affected by the assistance to the recipient, may become a party to the Model Agreement by serving written notice of its desire to do so upon the other union representatives of the employees affected by the project, the recipient, and the Secretary of Labor. In the event of any disagreement that such labor organization should become a party to the Model Agreement, as applied to the Project, then the dispute as to whether such labor organization shall participate shall be determined by the Secretary of Labor.

(d)Any signatory employer may individually withdraw from the Model Agreement by serving written notice of its intention to withdraw upon the Secretary of Labor, the American Public Transit Association, or its designee, and the unions signatory to the Model Agreement, or their designee. Any labor organization may individually withdraw from the Model Agreement by serving written notice of its intention to withdraw upon the other union representatives of the employees affected by the project, the recipient, and the Secretary of Labor. Written notice to withdraw must be served one hundred twenty

(120)days prior to October 1, which is the annual renewal date of the Model Agreement. 7. Section 215.7 is amended as follows: a. Remove “(b)(3)(ii)” and add “(b)(2)” in its place; b. Remove the phrase “small urban and rural program under section 5311 of the Federal Transit Statute” and add in its place “Other Than Urbanized program”. c. Designate the existing text as paragraph

(a)and add two sentences to the end; and d. Add new paragraphs

(b)and (c). The revisions and additions read as follows: § 215.7 The Special Warranty.

(a)* * * The Special Warranty Arrangement applicable to OTRB and “Other Than Urbanized” grants will be derived from the terms and conditions of the May 1979 Special Section 13(c) Warranty, and the Department's subsequent experience under 49 U.S.C. 5333(b). From time to time, the Department may update this Special Warranty Arrangement to reflect developments in the employee protection program.

(b)The requirements of 49 U.S.C. 5333(b) for OTRB and “Other Than Urbanized” grants are satisfied through application of a Special Warranty Arrangement certified by the Department of Labor; a copy of the current arrangement will be included on the OLMS Web site.

(c)The Federal Transit Administration will include the current version of the Special Warranty Arrangement, through reference in its Master Agreement, in each OTRB and “Other Than Urbanized” grant of assistance under the statute.

(1)The Federal Transit Administration will notify the Department that it is funding an OTRB or “Other Than Urbanized” grant by transmitting to the Department an information copy of each grant application upon approval of the grant.

(i)Each grant of assistance for an “Other Than Urbanized” program will contain a labor section identifying labor organizations representing transit employees of each subrecipient, the labor organizations representing employees of other transit providers in the service area, and a list of those transit providers. A sample format is posted on the OLMS Web site to facilitate the inclusion of this information in the grant application.

(ii)OTRB grants of assistance will contain a labor section identifying labor organizations representing transit employees of the recipient.

(2)The Department will notify labor organizations representing potentially affected transit employees of OTRB grants and inform them of their rights under the Special Warranty Arrangement. § 215.8 [Amended] 8. Section 215.8 is amended as follows: a. Remove “Director,” and add in its place “Chief, Division of”; b. Remove “Suite N5603,”; and c. Add the phrase “or e-mailed to *OLMS-TransitGrant@dol.gov* ” at the end of the paragraph. Victoria Lipnic, Assistant Secretary for Employment Standards. Donald Todd, Deputy Assistant Secretary, Office of Labor-Management Standards. [FR Doc. E7-18040 Filed 9-13-07; 8:45 am] BILLING CODE 4510-CP-P DEPARTMENT OF LABOR Employee Benefits Security Administration 29 CFR Part 2520 RIN 1210-AB21 Multi-Employer Pension Plan Information Made Available on Request AGENCY: Employee Benefits Security Administration, Labor. ACTION: Notice of proposed rulemaking. SUMMARY: This document contains a proposed regulation that, upon adoption, would implement amendments to the Employee Retirement Income Security Act of 1974, as amended (ERISA or the Act), requiring the administrator of a multi-employer plan to provide copies of certain actuarial and financial information about the plan to participants and others upon request. The amendments, enacted by the Pension Protection Act of 2006, added subsection

(k)to section 101 of ERISA. The proposed regulation would affect plan administrators, participants and beneficiaries of multi-employer plans, as well as employee representatives of such participants and employers that have an obligation to contribute to such plans. DATES: Written comments on the proposed regulation should be received by the Department of Labor on or before October 15, 2007. ADDRESSES: To facilitate the receipt and processing of comments, the Department encourages interested persons to submit their comments electronically by e-mail to *e-ORI@dol.gov,* or by using the Federal eRulemaking portal at *www.regulations.gov* (follow instructions for submission of comments). Persons submitting comments electronically are encouraged not to submit paper copies. Persons interested in submitting comments on paper should send or deliver their comments (at least three copies) to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5669, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210, Attention: ERISA 101(k) Regulation. Comments received will be posted without change to *www.regulations.gov* and *www.dol.gov/ebsa,* and available for public inspection at the Public Disclosure Room, N-1513, Employee Benefits Security Administration, 200 Constitution Avenue, NW., Washington, DC 20210, including any personal information provided. FOR FURTHER INFORMATION CONTACT: Stephanie L. Ward, Office of Regulations and Interpretations, Employee Benefits Security Administration,

(202)693-8500. This is not a toll-free number. SUPPLEMENTARY INFORMATION: A. Background Section 502(a)(1) of the Pension Protection Act of 2006, Public Law 109-280, 120 Stat. 780 (PPA), which was enacted on August 17, 2006, amended the Employee Retirement Income Security Act of 1974, as amended (ERISA or the Act), by adding section 101(k). Section 101(k)(1) of ERISA requires the administrator of a multi-employer pension plan, upon written request, to furnish certain documents to any plan participant, beneficiary, employee representative, or any employer that has an obligation to contribute to the plan. The documents that are required to be furnished are:

(A)A copy of any periodic actuarial report (including sensitivity testing) received by the plan for any plan year which has been in the plan's possession for at least 30 days;

(B)a copy of any quarterly, semi-annual, or annual financial report prepared for the plan by any plan investment manager or advisor or other fiduciary which has been in the plan's possession for at least 30 days; and

(C)a copy of any application filed with the Secretary of the Treasury requesting an extension under section 304 of the Act (or section 431(d) of the Internal Revenue Code of 1986) and the determination of such Secretary pursuant to such application. Section 502(a)(2) of the PPA amended section 502(c)(4) of ERISA to provide that the Secretary of Labor may assess a civil penalty of not more than $1,000 a day for each violation of section 101(k). Section 502(a)(3) of the PPA provides that the Secretary of Labor shall prescribe regulations under section 101(k)(2) not later than one year after the date of enactment of the PPA. Section 502(d) of the PPA provides that section 101(k) shall apply to plan years beginning after December 31, 2007. B. Overview of Proposed Regulation Included in this notice is a proposed regulation that, upon adoption, would implement the new disclosure requirement under section 101(k) of the Act. Interested parties are invited to comment on all aspects of the regulation. The Department intends to publish a separate regulation implementing the Secretary's authority to assess civil penalties under section 502(c)(4) of ERISA at a later date. Paragraph

(a)of the proposed regulation provides that the administrator of a multi-employer pension plan shall furnish copies of actuarial, financial and funding-related documents to certain persons who make written requests to the plan. For purposes of paragraph (a), a person entitled to request and receive documents is any participant within the meaning of section 3(7) of the Act; any beneficiary receiving benefits under the plan; any labor organization representing participants under the plan; or any employer that is a party to the collective bargaining agreement(s) pursuant to which the plan is maintained or who otherwise may be subject to withdrawal liability pursuant to section 4203 of the Act. See § 2520.101-6(d). In this regard, the phrase “any employer that has an obligation to contribute to the plan” under section 101(k) of the Act has been construed under paragraph (d)(4) of the proposed regulation in a manner that is consistent with the construction given to similar language under section 101(f) of ERISA, which relates to annual funding notices of multi-employer defined benefit pension plans. 1 1 See 29 CFR 2520.101-4(f)(4); 71 FR 1904, Jan. 11, 2006. Paragraph (b)(1) of the proposed regulation provides that the plan administrator must furnish the requested document or documents to the requester not later than 30 days after the date the written request is received by the plan, subject to the limitations in paragraphs (b)(3) and (b)(4). Paragraph (b)(3) of the proposed regulation provides that a plan administrator is not required to furnish to any requester more than one copy of a document described in paragraph

(c)during any 12-month period. Thus, an eligible requester would not be entitled to receive more than one copy of the same financial report within a 12-month period. This limitation, however, does not mean that an eligible requester would not be entitled to request and receive copies of two different reports (e.g., one financial report and one actuarial report) during any 12-month period. For purposes of the application of this 12-month limitation, the Department is of the view that the 12-month period commences from the earlier of the date the plan actually responds to a request or the 30th day referenced in paragraph (b)(1) of the regulation. Paragraph (b)(4) of the proposed regulation permits the plan administrator to charge the requester for the reasonable costs of furnishing documents. The PPA specifically authorizes the Department to prescribe in regulations the maximum amount that would be considered a reasonable charge for furnishing documents under this section. For this purpose, the Department proposes that a reasonable charge may not exceed the lesser of the actual cost to the plan for the least expensive means of acceptable reproduction of the document, or 25 cents per page, plus the cost of mailing or otherwise delivering the requested document. This standard adopts the existing reasonable charge standard under 29 CFR 2520.104b-30, but also permits the plan administrator to charge the requester the actual cost to the plan of mailing or delivering the document or information. Paragraph (b)(2) provides that such documents must be furnished in a manner consistent with the general furnishing requirements set forth in 29 CFR 2520.104b-1 including the use of electronic media. See § 2520.104b-1(c). In this regard, wherever possible, the Department encourages plan administrators to use electronic media to furnish requested information in order to reduce compliance costs under the regulation. 2 2 As part of a separate rulemaking initiative, the Department is undertaking a review of the rules in paragraph

(c)of § 2520.104b-1 relating to disclosure through electronic media. The Department is reviewing these rules in light of advances in technology and new disclosure requirements under ERISA following enactment of the PPA. Paragraph

(c)of the proposed regulation delineates the documents that must be disclosed pursuant to section 101(k). Paragraph (c)(1) provides that information subject to the disclosure requirement in paragraph

(a)consists of a copy of any periodic actuarial report (including any sensitivity testing) received by the plan that has been in the plan's possession for at least 30 days before the plan receives the written request; a copy of any quarterly, semi-annual, or annual financial report prepared for the plan by any plan investment manager or advisor (without regard to whether such advisor is a fiduciary within the meaning of section 3(21) of the Act) or other fiduciary which has been in the plan's possession for at least 30 days before the plan receives the written request; and a copy of any application filed by the plan sponsor with the Secretary of the Treasury requesting an amortization extension under section 304 of the Act or section 431(d) of the Internal Revenue Code of 1986 and the determination of such Secretary pursuant to such application. To provide plan administrators with clarity regarding their disclosure obligations under section 101(k), the proposed regulation clarifies that financial reports prepared by advisors are subject to disclosure without regard to whether the advisor or advisors are fiduciaries within the meaning of section 3(21) of ERISA. See § 2520.101-6(c)(1)(ii). The Department specifically requests comments on whether this clarification alone provides sufficient certainty as to what financial reports are required to be disclosed, or, whether, in addition, the term “financial report” should also be clarified in regulation and, if so, how. Paragraph (c)(2) provides that documents required to be disclosed under the regulation shall not include certain information. In this regard, paragraph (c)(2)(i) provides that required disclosures do not include the information or data which served as the basis for such report or application, e.g., the data behind or underlying a report or application. In addition, paragraph (c)(2)(ii) of the proposed regulation provides that disclosed reports or applications shall not include any information that the plan administrator reasonably determines to be either individually identifiable information regarding any plan participant, beneficiary, employee, fiduciary, or contributing employer, or proprietary information regarding the plan, any contributing employer, or entity providing services to the plan. The Department specifically invites comment on whether clarification is needed with respect to determinations regarding what information should be considered “proprietary” or “individually identifiable” in this context and, if so, what standards should govern such determinations. In this regard, paragraph (c)(2)(ii) of the proposed rule clarifies that, in responding to a request under the regulation, a plan administrator is required to inform the requester if the plan administrator withholds any information determined to be “proprietary” or “individually identifiable” within the meaning of the restrictions in paragraph (c)(2) of the proposed regulation. Along with the proposed regulation under section 101(k), discussed above, this notice also includes amendments to 29 CFR 2520.104b-30, which provides guidelines for assessing a reasonable charge for furnishing plan documents pursuant to section 104(b)(4) of the Act (e.g., latest updated summary plan description, latest annual report, any terminal report, etc.). Language in § 2520.104b-30 could be construed as contrary to specific language in section 101(k) of ERISA, § 2520.101-6, and other PPA provisions amending title I of ERISA that expressly permit plan administrators to impose reasonable charges on requesters for the cost of furnishing the requested information, including handling and postage charges. Accordingly, minor conforming amendments are being proposed to paragraph

(a)of § 2520.104b-30 to eliminate any ambiguity that may be caused by current § 2520.104b-30. C. Regulatory Impact Analysis Summary The proposed rule contains guidance necessary to implement the amendments made by new section 101(k) of the Act, as enacted by section 502(a)(1) of the PPA, which requires multiemployer plan administrators to provide, upon written request, copies of certain actuarial and financial reports about the plan to participants, beneficiaries, employee representatives, or any employer that has an obligation to contribute to the plan. This disclosure requirement of PPA was enacted because more complete disclosures were considered an important element of measures enacted in PPA to strengthen the long-term health of the multiemployer plan pension system. Providing participants and beneficiaries, employee representatives, and contributing employers with greater access to actuarial and financial information regarding their plans will increase the transparency of the operation of multiemployer pension plans and afford all parties interested in the financial viability of such plans greater opportunity to monitor their funding and financial status and to take appropriate action when necessary. By clarifying certain terms used in section 101(k) of the Act, this regulation will also permit multiemployer plan administrators to fulfill their disclosure responsibilities under this section with greater certainty and less cost. The increase in transparency of plan operations may also contribute to an atmosphere of greater accountability on the part of plan officials. These benefits have not been quantified. The cost of the multiemployer plan disclosure requirement under section 101(k) of the Act and the rule is expected to total approximately $2.3 million in the year of implementation, $2.0 million in the second year, and $1.4 million in the third year. These costs arise from logging in disclosure requests, copying and mailing the reports, and contracting for redacting individually identifiable and proprietary information from the reports. In addition, multiemployer plans will devote in-house staff time to complying with this regulation. The total hour burden is estimated to be 56,000 hours in 2008, 49,000 in 2009 and 37,000 in 2010. Both the dollar burden and the hour burden are projected to fall over the three-year period as interest in the aging inventory of existing documents subject to this regulation wanes. The dollar equivalent of the three-year hour burden is estimated to be $4.4 million. Because the costs of the proposed regulation arise from notice provisions in the PPA, the data and methodology used in developing these estimates are more fully described in the Paperwork Reduction Act section of this analysis of regulatory impact. Executive Order 12866 Statement Under Executive Order 12866 (58 FR 51735), the Department must determine whether a regulatory action is “significant” and therefore subject to review by the Office of Management and Budget (OMB). Section 3(f) of the Executive Order defines a “significant regulatory action” as an action that is likely to result in a rule

(1)having an annual effect on the economy of $100 million or more, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as “economically significant”);

(2)creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency;

(3)materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4)raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Although the Department believes that this regulatory action is not economically significant within the meaning of section 3(f)(1) of the Executive Order, the action has been determined to be significant within the meaning of section 3(f)(4) of the Executive Order, and the Department accordingly provides the following assessment of its potential costs and benefits. As elaborated below, the Department believes that the benefits of the rule justify its costs. In assessing the costs and benefits of the rule and associated provisions of the Act, the Department endeavored to consider all of the major activities that will be carried out pursuant to them. For example, multiemployer pension plan administrators will have to make arrangements for copying and mailing the reports and redacting individually identifiable and proprietary information from the reports. Because the regulation does not require the creation of any new documents, the costs of the rule are limited to those arising from logging in requests and from copying, mailing and redacting disclosed reports. The Department estimates that the total cost 3 for all multiemployer plans to comply with the regulation will average $1,200 per plan year over the 2008-2010 periods. Given that total 2004 assets of multiemployer pension plans averaged about $247 million in defined benefit plans and $50 million in defined contribution plans, this annual cost is approximately 0.0012% of average plan assets in defined benefit plans and 0.0061% of assets in defined contribution plans. The Department believes that the transparency contained in the rule and associated section 101(k) of the Act will provide participants, beneficiaries, employee representatives, and contributing employers with important information regarding the funding and financial status of multiemployer pension plans. These disclosures will allow participants, beneficiaries, employee representatives, and contributing employers to learn more about the financial status of their plans and take action where appropriate. Although the benefits of this increased transparency have not been quantified, the Department has concluded that these benefits of the rule outweigh its modest costs. The Department invites comments on this assessment and its conclusions. 3 Total cost is the sum of the dollar burden and the dollar equivalent of the hour burden. Paperwork Reduction Act As part of its continuing effort to reduce paperwork and respondent burden, the Department of Labor conducts a preclearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, EBSA is soliciting comments concerning the proposed information collection request

(ICR)included in the Proposed Regulation on Multiemployer Pension Plan Information Made Available on Request. A copy of the ICR may be obtained by contacting the PRA addressee shown below. The Department has submitted a copy of the proposed rule to OMB in accordance with 44 U.S.C. 3507(d) for review of its information collections. The Department and OMB are particularly interested in comments that: • Evaluate whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; • Evaluate the accuracy of the agency's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used; • Enhance the quality, utility, and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , permitting electronic submission of responses. Comments should be sent to the Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503; Attention: Desk Officer for the Employee Benefits Security Administration. OMB requests that comments be received within 30 days of publication of the proposed regulation to ensure their consideration. *PRA Addressee:* Address requests for copies of the ICR to Joseph S. Piacentini, Office of Policy and Research, U.S. Department of Labor, Employee Benefits Security Administration, 200 Constitution Avenue, NW., Room N-5647, Washington, DC 20210. Telephone

(202)693-8410; Fax:

(202)219-5333. These are not toll-free numbers. The proposed regulation would, upon adoption, implement the disclosure requirements of new section 101(k) of the Act, as added by section 502(a)(1) of the PPA. As described earlier in the preamble, section 101(k)(1) of the Act requires multiemployer plan administrators, upon written request, to furnish certain documents to any plan participant, beneficiary, employee representative, or any employer that has an obligation to contribute to the plan. The documents that may be requested are

(1)a copy of any periodic actuarial report (including sensitivity testing) received by the plan for any plan year which has been in the plan's possession for at least 30 days;

(2)a copy of any quarterly, semi-annual, or annual financial report prepared for the plan by any plan investment manager or advisor or other fiduciary that has been in the plan's possession for at least 30 days; and

(3)a copy of any application filed with the Secretary of the Treasury requesting an extension under section 304 of the Act (or section 431(d) of the Internal Revenue Code of 1986) and the determination of such Secretary pursuant to such application. The information collection provisions of this proposed rule are found in section 2520.101-6(a) of the proposed rule, which requires multiemployer defined benefit and defined contribution pension plan administrators to furnish copies of actuarial, financial, and funding related documents to plan participants, beneficiaries, employee representatives, and contributing employers upon request. This information constitutes a third-party disclosure from the administrator to participants, beneficiaries, employee representatives, and contributing employers. Pursuant to section 2520.101-6(c)(2) the documents required to be disclosed shall not contain any information that the plan administrator reasonably determines to be either:

(i)Individually identifiable information regarding any plan participant, beneficiary, employee, fiduciary, or contributing employer, or

(ii)proprietary information regarding the plan, any contributing employer, or entity providing services to the plan. The plan administrator must inform the requester if any such information is withheld. Annual Hour Burden In order to estimate the potential costs of the disclosure provisions of section 101(k) of the Act and this proposed rule, the Department estimated the number of multiemployer defined benefit and defined contribution pension plans. Based on data derived exclusively from the Form 5500 for the 2004 plan year, which is the most recent year for which complete data are available, the Department estimates that there are 1,533 multiemployer defined benefit plans 4 and 1,372 multiemployer defined contribution plans that would be subject to this disclosure requirement. Because section 101(k) of the Act and the regulation generally do not limit the class of documents that can be requested in any way by date of creation or receipt, the Department has assumed for purposes of this estimate that each multiemployer defined benefit and defined contribution pension plan will disclose both an existing inventory and newly created periodic actuarial reports (“actuarial reports”), quarterly, semiannual, or annual financial reports (“financial reports”), and amortization extension requests filed with the IRS (hereafter “extension requests”). 5 4 All dollar or hour numbers in this burden analysis have been rounded to either the nearest thousand or the nearest hundred, as appropriate. 5 For purposes of this estimate, the Department assumes that plans will receive no requests for documents in existing inventory for years prior to 2002. In developing burden estimates, the Department has taken into account the total estimated hours required to copy, mail, and contract with a service professional to redact individually identifiable and proprietary information from the reports. With respect to an existing inventory of reports, the Department estimates that multiemployer defined benefit plans will receive 169,000 requests to disclose existing financial reports (an average of 110 per plan), 76,000 requests for existing actuarial reports (an average of 50 per plan), and 340 requests for existing amortization requests (an average of .22 per plan), and defined contribution plans will receive 96,000 requests for existing financial reports (an average of 70 per plan). Therefore, the Department estimates that multiemployer pension plans would receive a total of 341,000 requests for disclosures of existing inventory of reports. The Department estimates that the total hour burden associated with disclosing existing documents upon request over the 2008-2010 period will be 66,000 hours. This would include 61,000 clerical hours to log requests and to locate, copy, and mail paper disclosures 6 and 5,000 of legal hours (1.8 hours per plan for financial reports, .7 hours for actuarial reports, and 0 hours for extension requests) 7 to redact individually identifiable and proprietary information. 8 The equivalent costs of these hours are $2.1 million. 9 6 This is the product of the total documents disclosed times the percentage of documents disclosed on paper times 15 minutes (to locate, copy, and mail paper documents). 7 The Department estimates that 70% of the requested documents will be redacted by outside legal counsel, and that 30% of financial reports and 25% of actuarial reports will require redaction. 8 The Department estimates that 20% of existing financial reports and actuarial reports for defined benefit plans will be available electronically, 50% of existing extension requests for such plans will be available electronically, and 20% of existing defined contribution plan financial reports will be available electronically. The Department invites comments on this estimate. Documents are assumed to be disclosed on paper unless the requester has access to e-mail and requests a document that already exists in paper form. 9 Hourly wage estimates were based on data from the Bureau of Labor Statistics Occupational Employment Survey (November 30, 2004) and the 2005 Employment Cost Trends. Total labor costs (wages plus benefits plus overhead) for clerical staff were estimated to average $25 per hour over the period based on metropolitan wage rates for Executive Secretaries and Administrative Assistants. Total labor cost for legal staff was estimated to average $109 per hour based on metropolitan wage estimates for attorneys. For purposes of this analysis, the Department assumes that 40% of the existing documents would be requested in the year of implementation, 30% in the second year, and 15% in the third year, with the remaining 15% of disclosures of existing documents occurring after 2010. 10 Based on this allocation, the first year hour burden is estimated to be 56,000 hours ($1.7 million equivalent cost), the second year hour burden would be 49,000 hours ($1.5 million equivalent cost), and the third year burden would be 37,000 hours ($1.1 million equivalent cost). 10 This assumption is based on the expectation that interest in receiving existing documents will be high in the initial year of implementation and gradually decrease in subsequent years. With respect to newly created reports, the Department estimates that multiemployer defined benefit plans will receive 107,000 requests to disclose newly created financial reports (an average of 70 per plan), 32,000 requests for newly created actuarial reports (an average of 21 per plan), and 1,600 requests for newly created amortization requests (an average of one per plan), and defined contribution plans will receive 82,000 requests for newly created financial reports (an average of 60 per plan). Therefore, the Department estimates that multiemployer pension plans would receive a total of 223,000 requests for disclosures of newly created reports. The Department estimates that the total hour burden associated with disclosing newly created documents upon request is 25,000 hours. This includes 24,000 clerical hours to copy and mail paper disclosures and 1,200 legal hours to redact individually identifiable and proprietary information. The equivalent costs of these hours are $744,000. Annual Cost Burden The costs arising from this information collection derive from the direct costs of distributing the reports. As discussed above, the Department believes that a substantial number of the existing documents will be available only in paper form; therefore, costs will be incurred to copy and to distribute the reports by mail. 11 Some plans also will incur costs to hire a service provider to review the reports and redact individually identifiable and proprietary information from them. 11 See footnote 9 above. The proposed rule allows plans to charge requesters for the reasonable costs of furnishing documents in an amount that does not exceed the lesser of the actual cost to the plan to furnish the document, or 25 cents per page plus the cost of mailing or otherwise delivering the requested document. The proposed rule does not allow plans to charge for redaction costs. The extent to which plans will impose such charges has not been estimated, but the Department has estimated the amount these charges would reimburse plans for their direct dollar cost if plans were to consistently charge requesters for all allowable charges. Because copy costs will generally not exceed 25 cents per page, the proceeds from these charges, if imposed, would reimburse plans for all mailing costs, for nearly all copy costs, and for an estimated 60 percent of the total dollar burden expected over the 2008-2010 period. With respect to the existing inventory of documents for multiemployer defined benefit plans, the Department estimates copying costs of $791,000 for the existing inventory of financial reports, 12 $171,000 for the existing inventory of actuarial reports, $41 for the existing inventory of extension requests. For multiemployer defined contribution plans, estimated copying costs for existing financial reports is $455,000. Therefore, the total copying costs for the existing inventory of all reports would be $1.4 million. 12 The copying cost estimate is based on a $5.84 average per document cost of disclosure of financial reports (estimated 40 pages per document times $0.15 average copying cost per page), $2.80 for actuarial reports (estimated 50 pages per document times $0.06 average copying cost per page), $0.24 for extension requests (estimated 12 pages per document times $0.02 average copying cost per page), and $5.84 for defined contribution plan financial reports (estimated 50 pages per document times $0.15 average copying cost per page). The average copying costs per page takes into account the estimated percentage of documents that are in color, and will, therefore, require more expensive color copying. The Department assumes that 70% of financial reports and 20% of actuarial reports are in color, and that 0% of extension requests are in color. The Department estimates mailing costs of $271,000 to deliver the existing inventory of financial reports, $152,000 to deliver the existing actuarial reports, and $129 to deliver existing extension requests. 13 Multiemployer defined contribution plans will incur an estimated $157,000 of mailing costs to deliver existing financial reports. Therefore, the total mailing costs for the existing inventory of all reports is estimated to be $581,000. 13 The negligible cost for all plans to mail extension requests results from the interaction of various assumptions regarding these documents—a low request rate, a high rate of electronic disclosure, and a relatively low mailing cost arising from the modest length of these documents. The costs to redact individually identifiable and proprietary information from the existing inventory of financial reports are $702,000 and from the existing inventory of actuarial reports are $263,000. The Department estimates that no costs will be incurred for redacting information from the existing inventory of amortization extensions. For multiemployer defined contribution plans, the redaction costs for existing financial reports are $628,000. Therefore, the total redaction costs for the existing inventory of all reports are $1.6 million. With respect to newly created reports for multiemployer defined benefit plans, the Department estimates that the annual cost for all plans to copy the newly created financial reports would be $212,000, the newly created actuarial reports would be $30,000, and the newly created amortization extension requests would be $21. 14 For multiemployer defined contribution plans, the copy cost for newly created financial reports would be $176,000. Therefore, the total copying costs for all newly created reports would be $416,000. 14 The negligible cost for all plans to copy amortization requests results from a combination of assumptions about these documents—a low request rate, a high rate of electronic disclosure, and a low cost of copying a modest number of black and white pages. The costs to mail the newly created financial reports would be $73,000, newly created actuarial reports would be $27,000, and newly created amortization extension requests would be $66. For multiemployer defined contribution plans, the mailing costs for newly created financial reports would be $55,000. Therefore, the total mailing costs for newly created reports would be $155,000. The estimated costs of contract work 15 to redact individually identifiable and proprietary information for newly created financial reports would be $140,000 and $44,000 for newly created actuarial reports. The Department estimates that no costs will be incurred for redacting information from newly created amortization extension requests. For multiemployer defined contribution plans, the redaction cost for newly created financial reports is estimated to be $126,000. Therefore, the total annual redaction costs for all newly created reports are estimated to be $310,000. 15 The Department has assumed that 70% of redaction work will be contracted. *Type of Review:* New collection. *Agency:* Department of Labor, Employee Benefits Security Administration. *Title:* Multiemployer Pension Plan Information Made Available on Request. *OMB Number:* 1210-NEW. *Affected Public:* Individuals or households; business or other for-profit; not-for-profit institutions. *Respondents:* 2,905. *Frequency of Response:* Occasionally. *Responses:* 960,000. *Estimated Total Annual Hour Burden:* 56,000 (first year); 49,000 (second year); 37,000 (third year). *Estimated Total Annual Cost Burden:* $2.3 million (first year); $2.0 million (second year); $1.4 million (third year). OMB will consider comments submitted in response to this request in its review of the request for approval of the ICR; these comments will also become a matter of public record. Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )

(RFA)imposes certain requirements with respect to Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 *et seq.* ) and which are likely to have a significant economic impact on a substantial number of small entities. Unless an agency certifies that a proposed rule is not likely to have a significant economic impact on a substantial number of small entities, section 603 of RFA requires that the agency present an initial regulatory flexibility analysis at the time of the publication of the notice of proposed rulemaking describing the impact of the rule on small entities and seeking public comment on such impact. Small entities include small businesses, organizations and governmental jurisdictions. The Department has deemed that an employee benefit plan shall be considered a small entity if it has fewer than 100 participants. 16 By this standard, forthcoming data from the EBSA Private Pension Bulletin 2004 show that only 291 multiemployer pension plans or 10% of all multiemployer pension plans are small entities. The Department does not consider this to be a substantial number of small entities. Therefore, pursuant to section 605(b) of RFA, the Department hereby certifies that the proposed rule is not likely to have a significant economic impact on a substantial number of small entities. 16 The basis for this definition is found in section 104(a)(2) of the Act, which permits the Secretary of Labor to prescribe simplified annual reports for pension plans that cover fewer than 100 participants. To the Department's knowledge, there are no federal regulations that might duplicate, overlap, or conflict with the proposed regulation under section 101(k) of ERISA. Congressional Review Act The rule being issued here is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 *et seq.* ) and, if finalized, will be transmitted to Congress and the Comptroller General for review. The rule is not a “major rule” as that term is defined in 5 U.S.C. 804, because it is not likely to 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, or 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. Unfunded Mandates Reform Act For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), as well as Executive Order 12875, the rule does not include any Federal mandate that may result in expenditures by State, local, or tribal governments, and does not impose an annual burden exceeding $100 million on the private sector. Federalism Statement Executive Order 13132 (August 4, 1999) outlines fundamental principles of federalism and requires the adherence to specific criteria by Federal agencies in the process of their formulation and implementation of 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. The proposal does not have federalism implications because it has no 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. Section 514 of the Act provides, with certain exceptions specifically enumerated that are not pertinent here, that the provisions of Titles I and IV of the Act supersede any and all laws of the States as they relate to any employee benefit plan covered under Act. The requirements of the proposal would not alter the fundamental reporting and disclosure requirements of the statute with respect to employee benefit plans, and as such have no implications for the States or the relationship or distribution of power between the national government and the States. List of Subjects in 29 CFR Part 2520 Accounting, Employee benefit plans, Employee Retirement Income Security Act, Pensions, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Department of Labor proposes to amend 29 CFR part 2520 as follows: PART 2520—RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE 1. The authority citation for part 2520 is revised to read as follows: Authority: 29 U.S.C. 1021-1025, 1027, 1029-31, 1059, 1134 and 1135; and Secretary of Labor's Order 1-2003, 68 FR 5374 (Feb. 3, 2003). Sec. 2520.101-2 also issued under 29 U.S.C. 1132, 1181-1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.102-3, 2520.104b-1 and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.104b-1 and 2520.107 also issued under 26 U.S.C. 401 note, 111 Stat. 788. Sec. 2520.101-4 also issued under sec. 103 of Pub. L. 108-218. Sec. 2520.101-6 also issued under sec. 502, Pub. L. 109-280, 120 Stat. 780. § 2520.101-5 [Reserved] 2. Add and reserve § 2520.101-5 of subpart A. 3. Add § 2520.101-6 to subpart A to read as follows: § 2520.101-6 Multiemployer Pension Plan Information Made Available on Request.

(a)*In general* . For purposes of compliance with the requirements of section 101(k) of the Employee Retirement Income Security Act of 1974, as amended (the Act), 29 U.S.C. 1001, *et seq* ., the administrator of a multiemployer pension plan shall, in accordance with the requirements of this section, furnish copies of actuarial, financial and funding-related documents described in paragraph

(c)of this section to plan participants, beneficiaries, employee representatives and contributing employers, described in paragraph

(d)of this section.

(b)*Obligation to furnish* .

(1)Subject to paragraphs (b)(3) and (b)(4) of this section, the administrator of a multiemployer pension plan shall, not later than 30 days after receipt of a written request for a document or documents described in paragraph

(c)of this section from a plan participant, beneficiary, employee representative or contributing employer described in paragraph

(d)of this section, furnish the requested document or documents to the requester.

(2)The plan administrator shall furnish documents pursuant to paragraph (b)(1) of this section in a manner consistent with the requirements of 29 CFR 2520.104b-1, including paragraph

(c)of that section relating to the use of electronic media.

(3)Nothing in this section shall require a plan administrator to furnish to any requester a document described in paragraph

(c)of this section more than once during any 12-month period.

(4)The plan administrator may impose a reasonable charge to cover the costs of furnishing documents pursuant to this section, but in no event may such charge exceed—

(i)The lesser of:

(A)the actual cost to the plan for the least expensive means of acceptable reproduction of the document(s) or

(B)25 cents per page; plus

(ii)The cost of mailing or delivery of the document.

(c)*Documents to be furnished* .

(1)For purposes of paragraph

(a)of this section, and subject to paragraph

(b)of this section, a plan participant, beneficiary, employee representative or contributing employer described in paragraph

(d)of this section, shall be entitled to request and receive a copy of any:

(i)Periodic actuarial report (including any sensitivity testing) received by the plan for any plan year which has been in the plan's possession for at least 30 days prior to the date of the written request;

(ii)Quarterly, semi-annual, or annual financial report prepared for the plan by any plan investment manager or advisor (without regard to whether such advisor is a fiduciary within the meaning of section 3(21) of the Act) or other fiduciary which has been in the plan's possession for at least 30 days prior to the date of the written request; and

(iii)Application filed with the Secretary of the Treasury requesting an extension under section 304 of this Act or section 431(d) of the Internal Revenue Code of 1986 and the determination of such Secretary pursuant to such application.

(2)For purposes of this section, the document(s) required to be disclosed shall not include:

(i)Any information or data which served as the basis for any report or application described in paragraph (c)(1) of this section, although nothing herein shall limit any other right that a person may have to review or obtain such information under the Act; or

(ii)Any information that the plan administrator reasonably determines to be either:

(A)individually identifiable information regarding any plan participant, beneficiary, employee, fiduciary, or contributing employer, or

(B)proprietary information regarding the plan, any contributing employer, or entity providing services to the plan. A plan administrator shall inform the requester if the plan administrator withholds any such information included within a request under paragraph

(b)of this section.

(d)*Persons entitled to request documents* . For purposes of this section, a plan participant, beneficiary, employee representative or contributing employer entitled to request and receive documents includes:

(1)Any participant within the meaning of section 3(7) of the Act;

(2)Any beneficiary receiving benefits under the plan;

(3)Any labor organization representing participants under the plan;

(4)Any employer that is a party to the collective bargaining agreement(s) pursuant to which the plan is maintained or who otherwise may be subject to withdrawal liability pursuant to section 4203 of the Act. 4. Amend § 2520.104b-30 to revise paragraph

(a)to read as follows: § 2520.104b-30 Charges for documents.

(a)*Application* . The plan administrator of an employee benefit plan may impose a reasonable charge to cover the cost of furnishing to participants and beneficiaries upon their written request as required under section 104(b)(4) of the Act, copies of the following information, statements or documents: The latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated. Except where explicitly permitted under the Act, no charge may be assessed for furnishing information, statements or documents as required by other provisions of the Act, which include, in part 1 of title I, sections 104(b)(1), (2),

(3)and

(c)and 105(a) and (c). Signed at Washington, DC, this 7th day of September, 2007. Bradford P. Campbell, Assistant Secretary, Employee Benefits Security Administration, Department of Labor. [FR Doc. E7-18073 Filed 9-13-07; 8:45 am] BILLING CODE 4510-29-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. CGD05-07-088] RIN 1625-AA00 Safety Zone: Holiday Flotilla Fireworks Display, Motts Channel/Banks Channel, Wrightsville Beach, NC AGENCY: Coast Guard, DHS. ACTION: Notice of proposed rulemaking. SUMMARY: The Coast Guard proposes the establishment of a 1000 foot safety zone around a fireworks display for the North Carolina Holiday Flotilla occurring on November 24, 2007, in the vicinity of Motts Channel/Banks Channel and Wrightsville Beach, NC. This action is intended to restrict vessel traffic on Motts Channel. This safety zone is necessary to protect mariners from the hazards associated with fireworks displays. DATES: Comments and related material must reach the Coast Guard on or before October 10, 2007. ADDRESSES: You may mail comments and related material to Commander, Sector North Carolina, 2301 East Fort Macon Road, Atlantic Beach, NC 28512. Sector North Carolina maintains the public docket for this rulemaking. Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, will become part of this docket and will be available for inspection or copying at the Federal Building Fifth Coast Guard District between 9 a.m. and 2 p.m., Monday through Friday, except Federal Holidays. FOR FURTHER INFORMATION CONTACT: MSTC Todd C. Mann, Marine Environmental Response Branch, Coast Guard Marine Safety Unit, Wilmington, North Carolina at

(910)772-2216. SUPPLEMENTARY INFORMATION: Request for Comments We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking CGD05-07-088, indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them. Public Meeting We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to Commander, Sector North Carolina at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the **Federal Register** . Background and Purpose On November 24, 2007, the North Carolina Holiday Flotilla fireworks display will be held adjacent to Motts Channel/Banks Channel, Wrightsville Beach, NC. Spectators will be observing from both the shore and from vessels. Due to the need of protection of mariners and spectators from the hazards associated with the fireworks display, vessel traffic will be temporarily restricted. Discussion of Proposed Rule The Coast Guard is establishing a safety zone on specified waters of Motts Channel. The regulated area will consist of a 1000 foot safety zone around Bird Island position 34-12-42N 077-48-26W south of the Seapath Yacht Club, Wrightsville Beach, NC. The safety zone will be enforced from 6 p.m. to 8 p.m. on November 24, 2007. General navigation in the safety zone will be restricted during the event. Except for participants and vessels authorized by the Coast Guard Patrol Commander, no person or vessel may enter or remain in the regulated area. Regulatory Evaluation This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. Although this regulation restricts access to the regulated area, the effect of this rule will not be significant because:

(i)The COTP may authorize access to the safety zone;

(ii)the safety zone will be in effect for a limited duration; and

(iii)the Coast Guard will make notifications via maritime advisories so mariners can adjust their plans accordingly. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners and operators of vessels intending to transit or anchor in that portion of Motts Channel/Banks Channel from 6 p.m. to 8 p.m. on November 24, 2007. The safety zone will not have a significant impact on a substantial number of small entities, because the zone will only be in place for a few hours and maritime advisories will be issued, so the mariners can adjust their plans accordingly. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact MSTC Todd C. Mann, Marine Environmental Response Branch, Coast Guard Marine Safety Unit Wilmington, North Carolina at

(910)772-2216. 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 proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this proposed 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 proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This proposed rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This proposed 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 proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children. Indian Tribal Governments This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this proposed rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have made a preliminary determination that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, we believe that this rule should be categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation. A preliminary “Environmental Analysis Check List” is available in the docket where indicated under ADDRESSES . Comments on this section will be considered before we make a final decision on whether to categorically exclude this rule from further environmental review. List of Subjects in 33 CFR Part 165 Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, and Waterways. For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 subpart C as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6 and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1 2. Add temporary § 165.T05-088, to read as follows: § 165.T05-088 Safety Zone: Motts Channel/Banks Channel, Wrightsville Beach, North Carolina.

(a)*Location.* The following area is a safety zone: All waters of Motts Channel/Banks Channel within 1000 feet of Bird Island at Wrightsville Beach, NC, approximate position 34-12-42N 077-48-26W in the Captain of the Port Sector North Carolina zone as defined in 33 CFR 3.25-20.

(b)*Definition: Captain of the Port:* means any U.S. Coast Guard commissioned, warrant or petty officer who has been authorized by the Captain of the Port, Sector North Carolina to act on his behalf.

(c)*Regulation:*

(1)In accordance with the general regulations in 165.23 of this part, entry into this zone is prohibited unless authorized by the Captain of the Port, Sector North Carolina, or designated representative.

(2)The operator of any vessel in the immediate vicinity of this safety zone shall:

(i)Stop the vessel immediately upon being directed to do so by any commissioned, warrant or petty officer on board a vessel displaying a U.S. Coast Guard Ensign.

(ii)Proceed as directed by any commissioned, warrant or petty officer on board a vessel displaying a U.S. Coast Guard Ensign.

(3)The Captain of the Port, Sector North Carolina can be contacted at telephone number

(252)247-4570 or

(252)247-4571.

(4)Coast Guard vessels enforcing the safety zone can be contacted on VHF-FM marine band radio, channel 13 (156.65 MHz) and channel 16 (156.8 MHz).

(d)*Enforcement period:* This regulation will be enforced from 6 p.m. to 8 p.m. on November 24, 2007. Dated: September 4, 2007. William D. Lee, Captain, U.S. Coast Guard, Sector North Carolina. [FR Doc. E7-18138 Filed 9-13-07; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF TRANSPORTATION Federal Railroad Administration 49 CFR Parts 229, 232, and 238 [Docket No. FRA-2006-26175, Notice No. 2] RIN 2130-AB84 Electronically Controlled Pneumatic Brake Systems AGENCY: Federal Railroad Administration (FRA), Department of Transportation (DOT). ACTION: Notice of public hearings and technical conference. SUMMARY: By notice of proposed rulemaking

(NPRM)published on September 4, 2007 (71 FR 50820), FRA proposed revisions to the regulations governing the power braking systems and equipment used in freight and other non-passenger railroad train operations. The proposed revisions are intended to permit and promote the implementation of electronically controlled pneumatic

(ECP)brake systems in a safe and effective manner. In that proposed rule, FRA stated that it would hold an oral public hearing on a date to be announced in a forthcoming notice, at which the Administrator or his delegated representative may preside. This document announces public hearings and a technical roundtable discussion. DATES:

(1)*Public Hearings:* Two public hearings will be held on the dates and at the locations listed below to provide interested parties the opportunity to comment on the proposed revisions contained in the NPRM. A technical roundtable will be held in conjunction with the second hearing. The dates of the public hearings are as follows: Thursday, October 4, 2007, at 9:30 a.m. in Washington, DC. Friday, October 19, 2007, at 8:30 a.m. in the Chicago, Illinois area.

(2)*Technical Roundtable:* A technical roundtable will be held on Friday, October 19, 2007, directly following the public hearing scheduled for that day. The technical roundtable is intended to provide interested parties the opportunity to comment on the proposed revisions contained in the NPRM and to provide interested parties the ability to specifically discuss various technical issues related to the implementation and operation of ECP brake systems. ADDRESSES:

(1)*Public Hearings:* Hearings to provide interested parties the opportunity to comment on the proposed revisions contained in the NPRM will be held at these locations: *Washington, DC:* Washington Plaza Hotel, 10 Thomas Circle, NW., Washington, DC 20005. *Chicago, IL area:* Crowne Plaza Chicago O'Hare, 5440 North River Road, Rosemont, IL 60018.

(2)*Technical Roundtable:* A technical conference will be conducted in the Chicago, Illinois at: Crowne Plaza Chicago O'Hare, 5440 North River Road, Rosemont, IL 60018. See SUPPLEMENTARY INFORMATION section for details.

(3)*Docket Clerk:* Written notification should identify the docket number and must be submitted to the FRA Docket Clerk, Office of Chief Counsel, Federal Railroad Administration, 1120 Vermont Avenue, NW., RCC-10, Stop 10, Washington, DC 20590 or faxed to

(202)493-6068. FOR FURTHER INFORMATION, CONTACT: James Wilson, Office of Safety Assurance and Compliance, Motive Power and Equipment Division, RRS-14, Mail Stop 25, Federal Railroad Administration, 1120 Vermont Avenue, NW., Washington, DC 20590 (telephone 202-493-6259); or Jason Schlosberg, Trial Attorney, Office of Chief Counsel, Mail Stop 10, Federal Railroad Administration, 1120 Vermont Avenue, NW., Washington, DC 20590 (telephone 202-493-6032). SUPPLEMENTARY INFORMATION: Interested parties are invited to present oral statements and proffer evidence at the hearings. The hearings will be informal and will be conducted by a representative designated by FRA in accordance with FRA's Rules of Practice (49 CFR 211.25). The hearings will be non-adversarial proceedings; therefore, there will be no cross examination of persons presenting statements or proffering evidence. An FRA representative will make an opening statement outlining the scope of the hearing. After all initial statements have been completed, those persons wishing to make a brief rebuttal will be given the opportunity to do so in the same order in which the initial statements were made. Additional procedures, as necessary for the conduct of the hearing, will be announced at the hearing. The purpose of the hearings is to receive oral comments regarding the specific provisions contained in the proposed rule and to receive evidence and to develop findings to determine whether FRA should invoke its discretionary authority under 49 U.S.C. 20306 to exempt application of section 20303 as it applies to freight trains and freight cars operating with ECP brake systems. Section 20303 requires operators to transport rail vehicles with defective or insecure equipment “from the place at which the defect or insecurity was first discovered to the nearest available place at which the repairs can be made” to avoid incurring civil penalties related to such movement. FRA would be authorized to grant relief from section 20303 only if it were to make findings required by section 20306. That section is reproduced here for ready reference: Section 20306. Exemption for Technological Improvements

(a)General.—Subject to subsection

(b)of this section, the Secretary of Transportation may exempt from the requirements of this chapter railroad equipment or equipment that will be operated on rails, when those requirements preclude the development or implementation of more efficient railroad transportation equipment or other transportation innovations under existing law.

(b)Conditions for exemption.—The Secretary may grant an exemption under subsection

(a)of this section only on the basis of—

(1)findings based on evidence developed at a hearing; or

(2)an agreement between national railroad labor representatives and the developer of the new equipment or technology. To permit and encourage implementation of ECP brake system technology without hindering safety, FRA proposes to invoke its discretionary authority under 49 U.S.C. 20306 to exempt ECP brake-equipped trains and equipment from the specific statutory requirements contained in 49 U.S.C. 20303. The technical roundtable is intended to provide interested parties an informal forum to discuss issues and concerns related to the implementation and operation of trains and equipment utilizing ECP brake system technology. The roundtable discussion may address specific technical issues that might not be addressed in the oral comments presented at the public hearings. This format will provide a more open, freeform exchange of ideas and views related to the technology. The procedures for the technical roundtable will be announced by the FRA representatives conducting the discussions. A transcript of the discussions will be made part of the public docket in this proceeding. Any person wishing to participate in either the public hearings or the technical conference should notify the Docket Clerk by mail or at the address or fax number provided in the ADDRESSES section at least five working days prior to the date of the hearing or technical roundtable discussion and submit three copies of the oral statement that he or she intends to make at the proceeding. The notification should identify the party the person represents, and the particular subject(s) the person plans to address. The notification should also provide the Docket Clerk with the participant's mailing address and other contact information. FRA reserves the right to limit participation in the hearings of persons who fail to provide such notification. Issued in Washington, DC, on September 7, 2007. S. Mark Lindsey, Chief Counsel, Federal Railroad Administration. [FR Doc. E7-18169 Filed 9-13-07; 8:45 am] BILLING CODE 4910-06-P 72 178 Friday, September 14, 2007 Notices DEPARTMENT OF AGRICULTURE Agricultural Marketing Service [Doc. No. AMS-PY-07-0101] Notice of Request for an Extension and Revision of a Currently Approved Information Collection AGENCY: Agricultural Marketing Service, USDA. ACTION: Notice and request for comments. SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), this notice announces the Agricultural Marketing Service's

(AMS)intention to request approval from the Office of Management and Budget, for an extension of, and revision to a currently approved information collection in support of the Regulations Governing the Voluntary Grading of Shell Eggs. DATES: Comments received by November 13, 2007 will be considered. *Additional Information or Comments:* Interested persons are invited to submit written comments on the Internet at *http://www.regulations.gov* or to David Bowden, Jr., Chief; Standards, Promotion & Technology Branch; Poultry Programs, AMS, U.S. Department of Agriculture; 1400 Independence Avenue, SW., Stop 0259; Washington, DC 20250-0259,

(202)690-3148. Comments should reference the docket number and the date and page number of this issue of the **Federal Register** and will be available for public inspection in the Office of the Docket Clerk, Poultry Programs, AMS, USDA, Room 3953-S, 1400 Independence Avenue, SW., Washington, DC 20250-0259 during regular business hours, or can be viewed at: *http://www.regulations.gov.* SUPPLEMENTARY INFORMATION: *Title:* Regulations Governing the Voluntary Grading of Shell Eggs—7 CFR part 56. *OMB Number:* 0581-0128. *Expiration Date of Approval:* May 31, 2008. *Type of Request:* Extension and revision of a currently approved information collection. *Abstract:* The Agricultural Marketing Act of 1946 (60 Stat. 1087-1091, as amended; 7 U.S.C. 1621-1627)

(AMA)directs and authorizes the Department of Agriculture

(USDA)to develop standards of quality, grades, grading programs, and services which facilitate trading of agricultural products and assure consumers of quality products which are graded and identified under USDA programs. To provide programs and services, section 203(h) of the AMA (7 U.S.C. 1622(h)) directs and authorizes the Secretary of Agriculture to inspect; certify and identify; and identify the grade, class, quality, quantity, and condition of agricultural products under such rules and regulations as the Secretary may prescribe, including assessment and collection of fees for the cost of the service. The regulations in 7 CFR part 56 provide a voluntary program for grading shell eggs on the basis of U.S. standards, grades and weight classes. In addition, the shell egg industry and users of the products have requested development and provision of other types of voluntary services under these regulations; e.g., contract and specification acceptance services and certification of quantity. Voluntary grading service is available on a resident basis or on an as-needed bases. The AMA requires Agency costs be assessed and collected from respondents who request voluntary program services. Information provided during the request is used by the Agency to determine cost assessments. The information collection requirements in this request are essential to carry out the intent of the AMA, to provide the respondents the type of service they request, and to administer the program. The information request requires personal data, such as name, type of business, address and description of service requested. The information collected is used only by authorized representatives of USDA (AMS, Poultry Programs' national staff; regional directors and their staffs; Federal-State supervisors and their staffs; and resident Federal-State graders, which includes State agencies) to administer and to conduct and carry out requested grading services. The Agency is the primary user of the information. Information is also used by authorized State agencies under a cooperative agreement with AMS. *Estimate of Burden:* Public reporting burden for this collection of information is estimated to average 0.238 hours per response. *Respondents:* State or local governments, businesses or other for-profits, Federal agencies or employees, small businesses or organizations. *Estimated Number of Respondents:* 630. *Estimated Total Annual Responses:* 23,130.50. *Estimated Number of Responses per Respondent:* 36.72. *Estimated Total Annual Burden on Respondents:* 5,513.64 hours. Copies of this information collection may be obtained from David Bowden, Jr., Chief, Standards, Promotion, & Technology Branch, at

(202)690-3148. Comments are invited on:

(1)Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(2)the accuracy of the agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used;

(3)ways to enhance the quality, utility, and clarity of the information to be collected; and

(4)ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments may be sent to: David Bowden, Jr., Chief, Standards, Promotion & Technology Branch; Poultry Programs, AMS, U.S. Department of Agriculture; 1400 Independence Avenue, SW., Stop 0259; Washington, DC 20250-0259. All comments received will be available for public inspection during regular business hours at the above address and may be viewed at *http://www.regulations.gov.* All responses to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record. Dated: September 10, 2007. Kenneth C. Clayton, Acting Administrator, Agricultural Marketing Service. [FR Doc. E7-18112 Filed 9-13-07; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF AGRICULTURE Forest Service Black Hills National Forest, Northern Hills Ranger District, South Dakota, West Rim Project Area AGENCY: Forest Service, USDA. ACTION: Notice of intent to prepare an environmental impact statement. SUMMARY: The Forest Service will prepare an environmental impact statement on a proposal to implement multiple resource management actions within the West Rim Project Area to implement the amended Black Hills National Forest Land and Resource Management Plan. The West Rim Project Area covers approximately 43,028 acres of National Forest System land and approximately 10,129 acres of interspersed private land southwest of Spearfish, South Dakota. a 1/2 mile buffer around all parcels of private land is identified as Wildland Urban Interface (WUI). Proposed actions include a combination of vegetation and fuels treatments to reduce fire hazard, reduce mountain pine beetle susceptibility, and improve vegetative diversity. The proposed action includes approximately 6,800 acres of commercial thinning, 3,500 acres of overstory removal, 13,700 acres of pre-commercial thinning, 2,300 acres of commercial seed cuts, 470 acres of fuel reduction treatments, and up to 13,800 acres of prescribed burning. Approximately 25 miles of new road construction would be necessary to carry out the proposed vegetation management actions. DATES: Comments concerning the scope of the analysis must be received by October 15, 2007. The draft environmental impact statement is expected to be available February 2008 and the final environmental impact statement is expected to be completed by July 2008. ADDRESSES: Send written comments to: Rhonda O'Byrne, District Ranger, Northern Hills Ranger District, 2014 North Main Street, Spearfish, SD 57783. Telephone number:

(605)642-4622. E-mail: *comments-rocky-mountain-black-hills-northern-hills@fs.fed.us* with ``West Rim Project'' as the subject. FOR FURTHER INFORMATION CONTACT: Chris Stores, Assistant District Planner, Northern Hills Ranger District, 2014 North Main Street, Spearfish, SD 57783. Telephone number:

(605)642-4622. SUPPLEMENTARY INFORMATION: Purpose of and Need for Action The purpose of and need for the actions proposed in the West Rim project area is to reduce fire hazard and the risk of mountain pine beetle infestation and to increase vegetative diversity. All actions are intended to move toward or achieve related forest Plan Goals and Objectives, consistent with forest Plan Standards and Guidelines. Proposed Action Proposed actions include the following: Reduce the acres at moderate-to-high fire hazard by thinning stands to decrease crown proximity and by reducing fuel accumulations. Thinning may use commercial or non-commercial methods. Fuel reduction treatments could include lopping, chipping, crushing, piling and burning, construction of fuel breaks, and broadcast prescribed burning. Reduce acres at high or medium susceptibility to mountain pine beetle by thinning stands and changing stand structure. Commercial and non-commercial (including prescribed burning) methods may be used. Increase vegetative diversity through understory or overstory thinning, including commercial and non-commercial timber harvest. Remove ponderosa pine from hardwood, meadow, and riparian areas. Manage known location of old growth for old growth characteristics. Road construction and maintenance activities necessary to access areas proposed for timber harvest. New roads would be closed following harvest, and existing roads that are not in the National Forest System could also be closed in conjunction with this project. The Forest Service is the sole responsible agency for this project; no cooperators are participating in project planning. Responsible Official Rhonda O'Byrne, District Ranger, Northern Hills Ranger District, 2014 North Main Street, Spearfish, SD 57783. Nature of Decision To Be Made The decision to be made is whether or not to approve the proposed action or alternatives at this time. No Forest Plan amendments are proposed. Scoping Process Comments and input regarding the proposed action are being requested from the public and other interested parties in conjunction with this notice of intent. The comment period will be open for thirty days, beginning on the date of publication of this notice of intent. An open house to gather comments from local individuals and groups will be held on September 19, 2007, at the Northern Hills Ranger District office in Spearfish, SD. Also, response to the draft EIS will be sought from the interested public beginning approximately in February 2008. Comment Requested This notice of intent initiates the scoping process which guides the development of the environmental impact statement. It is our desire to involve interested parties and especially adjacent landowners in identifying the issues related to proposed activities. Comments will assist in identification of key issues and opportunities to develop project alternatives and mitigation measures. *Early Notice of Importance of Public Participation in Subsequent Environmental Review:* A draft environmental impact statement will be prepared for comment. The comment period on the draft environmental impact statement will be 45 days (beginning approximately February 15, 2008) from the date the Environmental Protection Agency publishes the notice of availability in the **Federal Register** . The Forest Service believes, at this early stage, it is important to give reviewers notice of several court rulings related to public participation in the environmental review process. First, reviewers of draft environmental impact statements must structure their participation in the environmental review of the proposal so that it is meaningful and alerts an agency to the reviewer's position and contentions ( *Vermont Yankee Nuclear Power Corp.* v. *NRDC,* 435 U.S. 519, 553 (1978)). Also, environmental objections that could be raised at the draft environmental impact statement stage but that are not raised until after completion of the final environmental impact statement may be waived or dismissed by the courts ( *City of Angoon* v. *Hodel,* 803 F.2d 1016, 1022 (9th Cir. 1986) and *Wisconsin Heritages, Inc.* v. *Harris,* 490 F. Supp. 1334, 1338 (E.D. Wis. 1980)). Because of these court rulings, it is very important that those interested in this proposed action participate by the close of the 45-day comment period so that substantive comments and objections are made available to the Forest Service at a time when it can meaningfully consider them and respond to them in the final environmental impact statement. To assist the Forest Service in identifying and considering issues and concerns on the proposed action, comments on the draft environmental impact statement should be as specific as possible. it is also helpful if comments refer to specific pages or chapters of the draft statement. Comments may also address the adequacy of the draft environmental impact statement or the merits of the alternatives formulated and discussed in the statement. Reviewers may wish to refer to the Council on Environmental Quality Regulations for implementing the procedural provisions of the National Environmental Policy Act at 40 CFR 1503.3 in addressing these points. Comments received, including the names and addresses of those who comment, will be considered part of the public record on this proposal and will be available for public inspection (40 CFR 1501.7 and 1508.22; Forest Service Handbook 1909.15, section 21). Dated: August 31, 2007. Craig Bobzien, Forest Supervisor, Black Hills National Forest. [FR Doc. 07-4373 Filed 9-13-07; 8:45 am]

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