Rules and Regulations. Correction to final and temporary regulations

47,762 words·~217 min read·/register/2007/10/17/07-5063

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

BILLING CODE 1505-01-D DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9339] RIN 1545-BG44 Qualified Zone Academy Bonds; Obligations of States and Political Subdivisions; Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correction to final and temporary regulations. SUMMARY: This document contains a correction to final and temporary regulations (TD 9339) that were published in the **Federal Register** on Friday, September 14, 2007 (72 FR 52470) providing guidance to state and local governments that issue qualified zone academy bonds and to banks, insurance companies, and other taxpayers that hold those bonds on the program requirements for qualified zone academy bonds.

DATES: The correction is effective October 17, 2007. FOR FURTHER INFORMATION CONTACT: Timothy L. Jones or Zoran Stojanovic,

(202)622-3980 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The final and temporary regulations that are the subject of this correction are under section 1397E of the Internal Revenue Code. Need for Correction As published, final and temporary regulations (TD 9339) contain an error that may prove to be misleading and is in need of clarification. Correction of Publication Accordingly, the publication of the final and temporary regulations (TD 9339), which was the subject of FR Doc. E7-18180, is corrected as follows: On page 52470, column 2, in the preamble, under the paragraph heading “Correction of Publication”, last two lines of the fifth paragraph, the language ““§ 1.1379E(m),” is corrected to read “§ 1.1379E—1T(m).”” is corrected to read ““§ 1.1397E(m),” is corrected to read “§ 1.1397E-1T(m).””. LaNita Van Dyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration). [FR Doc. E7-20488 Filed 10-16-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9360] RIN 1545-BC37 Guidance on Passive Foreign Investment Company

(PFIC)Purging Elections; Correction AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Correcting amendment. SUMMARY: This document contains a correction to final regulations (TD 9360) that were published in the **Federal Register** on Thursday, September 27, 2007 (72 FR 54820) providing certain elections for taxpayers that continue to be subject to the PFIC excess distribution regime of section 1291 of the Internal Revenue Code even though the foreign corporation in which they own stock is no longer treated as a PFIC under section 1297(a) or

(e)of the Code. DATES: This correction is effective October 17, 2007. FOR FURTHER INFORMATION CONTACT: Paul J. Carlino at

(202)622-3840 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background The final regulations (TD 9360) that are the subject of this correction are under sections 1291, 1297 and 1298 of the Internal Revenue Code. Need for Correction As published, final regulations (TD 9360) contain an error that may prove to be misleading and is in need of clarification. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Correction of Publication Accordingly, 26 CFR part 1 is corrected by making the following amendments: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read, in part, as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.1297-3 is amended by revising the fourth sentence of paragraph (e)(5)(ii) *Example* .(i) to read as follows: § 1.1297-3 Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a section 1297(e) PFIC.

(e)* * *

(5)* * *

(ii)* * * *Example* . * * *

(i)* * * In years 1993 and 1994, FC did not satisfy either the income or the asset test of section 1297(a). * * * LaNita Van Dyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration). [FR Doc. E7-20489 Filed 10-16-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [CGD01-07-135] Drawbridge Operation Regulations; Lake Champlain, North Hero and Grand Isle, VT AGENCY: Coast Guard, DHS. ACTION: Notice of temporary deviation from regulations. SUMMARY: The Commander, First Coast Guard District, has issued a temporary deviation from the regulation governing the operation of the US2 Bridge across Lake Champlain, mile 91.8, between North Hero Island and Grande Isle (South Hero Island), Vermont. Under this temporary deviation the US2 Bridge may remain in the closed position from October 22, 2007 through February 1, 2008. Vessels that can pass under the draw without a bridge opening may do so at all times. This deviation is necessary to facilitate bridge rehabilitation construction. DATES: This deviation is effective from October 22, 2007 through February 1, 2008. ADDRESSES: Materials referred to in this document are available for inspection or copying at the First Coast Guard District, Bridge Branch Office, 408 Atlantic Avenue, Boston, Massachusetts, 02110, between 7 a.m. and 3 p.m., Monday through Friday, except Federal holidays. The telephone number is

(617)223-8364. The First Coast Guard District Bridge Branch Office maintains the public docket for this temporary deviation. FOR FURTHER INFORMATION CONTACT: John McDonald, Project Officer, First Coast Guard District, at

(617)223-8364. SUPPLEMENTARY INFORMATION: The US2 Bridge, across Lake Champlain, mile 91.8, between North Hero Island and Grand Isle (South Hero Island), Vermont, has a vertical clearance in the closed position of 13 feet at mean high lake elevation and 16 feet at mean low lake elevation. The existing drawbridge operation regulations are listed at 33 CFR 117.993(b). The owner of the bridge, the Vermont Agency of Transportation (VTrans), requested a temporary deviation to facilitate rehabilitation repairs at the bridge. Under this temporary deviation, in effect from October 22, 2007 through February 1, 2008, the US2 Bridge need not open for the passage of vessel traffic. The US2 Bridge rarely opens during the time period this temporary deviation will be in effect. Vessels that can pass under the bridge without a bridge opening may do so at all times. In accordance with 33 CFR 117.35(e), the bridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35. Should the bridge maintenance authorized by this temporary deviation be completed before the end of the effective period published in this notice, the Coast Guard will rescind the remainder of this temporary deviation, and the bridge shall be returned to its normal operation schedule. Notice of the above action shall be provided to the public in the Local Notice to Mariners and the **Federal Register** , where practicable. Dated: October 4, 2007. Gary Kassof, Bridge Program Manager, First Coast Guard District. [FR Doc. E7-20482 Filed 10-16-07; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [CGD08-07-026] RIN 1625-AA09 Drawbridge Operation Regulations; Upper Mississippi River, Clinton, IA AGENCY: Coast Guard, DHS. ACTION: Notice of deviation from drawbridge regulation. SUMMARY: The Commander, Eighth Coast Guard District, has issued a temporary deviation from the regulation governing the operations of the Clinton Railroad Drawbridge, Mile 518.0, Clinton, Iowa across the Upper Mississippi River. This deviation allows the bridge to open on signal if at least 24 hours advance notice is given from 12:01 a.m. December 15, 2007 until 9 a.m., March 15, 2008. The deviation is necessary to allow time for performing needed maintenance and repairs to the bridge. DATES: This temporary deviation is effective from 12:01 a.m. December 15, 2007 until 9 a.m., March 15, 2008. ADDRESSES: Materials referred to in this document are available for inspection or copying at Room 2.107F in the Robert A. Young Federal Building, 1222 Spruce Street, St. Louis, MO 63103-2832, between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The Bridge Administration Branch maintains the public docket for this temporary deviation. FOR FURTHER INFORMATION CONTACT: Roger K. Wiebusch, Bridge Administrator,

(314)269-2378. SUPPLEMENTARY INFORMATION: The Union Pacific Railroad Company requested a temporary deviation for the Clinton Railroad Drawbridge, mile 518.0, at Clinton, Iowa across the Upper Mississippi to open on signal if at least 24 hours advance notice is given in order to facilitate needed bridge maintenance and repairs. The Clinton Railroad Drawbridge currently operates in accordance with 33 CFR 117.5, which states the general requirement that drawbridges shall open promptly and fully for the passage of vessels when a request to open is given in accordance with the subpart. In order to facilitate the needed bridge work, the drawbridge must be kept in the closed-to-navigation position. This deviation allows the bridge to open on signal if at least 24 hours advance notice is given from 12:01 a.m. December 15, 2007 until 9 a.m., March 15, 2008. There are no alternate routes for vessels transiting this section of the Upper Mississippi River. The Clinton Railroad Drawbridge, in the closed-to-navigation position, provides a vertical clearance of 18.7 feet above normal pool. Navigation on the waterway consists primarily of commercial tows and recreational watercraft. These interests will not be significantly impacted due to the reduced navigation in winter months. This temporary deviation has been coordinated with waterway users. No objections were received. In accordance with 33 CFR 117.35(e), the drawbridge shall return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35. Dated: October 5, 2007. Roger K. Wiebusch, Bridge Administrator. [FR Doc. E7-20494 Filed 10-16-07; 8:45 am] BILLING CODE 4910-15-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R04-OAR-2005-KY-0004-200733, FRL-8482-5] Approval and Promulgation of Implementation Plans Kentucky: Performance Testing and Open Burning AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is taking final action to approve revisions to the Kentucky State Implementation Plan (SIP), submitted by the Kentucky Department of Air Quality

(KDAQ)on September 6, 2005. The revisions include modifications to Kentucky's Administrative Regulations

(KAR)Title 401, Chapters 50:045 and 63:005, which pertain to Kentucky's performance testing and open burning provisions, respectively. These revisions are part of Kentucky's strategy to meet the national ambient air quality standards (NAAQS) by reducing emissions of volatile organic compounds and nitrogen oxides, which are the precursors to ozone formation. Open burning creates smoke that contains fine particles (PM2.5) and precursors to ozone. The approved rules are intended to help control levels of PM2.5 and ozone precursors that contribute to high ozone and PM2.5 levels. This action is being taken pursuant to section 110 of the Clean Air Act (CAA). This final rule also addresses a comment made on EPA's proposed rulemaking for this action published on January 17, 2007. EFFECTIVE DATE: This rule will be effective November 16, 2007. ADDRESSES: EPA has established a docket for this action under Docket Identification No. EPA-R04-OAR-2005-KY-0004. All documents in the docket are listed on the *www.regulations.gov* Web site. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m, excluding Federal holidays. FOR FURTHER INFORMATION CONTACT: Heidi LeSane, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, Region 4, U.S. Environmental Protection Agency, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is

(404)562-9074. Ms LeSane can also be reached via electronic mail at *lesane.heidi@epa.gov.* SUPPLEMENTARY INFORMATION: Table of Contents I. Today's Action II. Background III. Response to Comments IV. Final Action V. Statutory and Executive Order Reviews I. Today's Action EPA is taking final action to approve revisions to the Kentucky SIP incorporating changes made to two Kentucky regulations: 401 KAR 50:045 and 401 KAR 63:005. These revisions pertain to performance testing requirements and open burning, respectively, and are part of the Commonwealth's strategy to meet the NAAQS by reducing emissions of PM2.5 and ozone precursors. This final action also includes a response to a comment made on EPA's proposed rulemaking for this action, published January 17, 2007 (72 FR 1954). II. Background On September 6, 2005, KDAQ submitted to EPA proposed SIP revisions for review and approval into the Kentucky SIP. The proposed revisions include changes made by Kentucky to its performance testing and open burning regulations, found at 401 KAR 50:045 and 401 KAR 63:005, respectively. Both sets of rules were already incorporated into the SIP and the September 6, 2005, revisions were updates to such rules. The rule changes proposed for inclusion in the SIP became state effective on July 13, 2005. 401 KAR 50:045, “Performance Tests,” provide guidelines for the methodology, testing conditions, and reporting requirements for sources required to undertake performance testing. The proposed revisions to 401 KAR 50:045 are essentially a recodification/renumbering in order to maintain necessary performance testing requirements currently found in 401 KAR 50:016, which is being repealed. Since 401 KAR 50:016 was never incorporated into the Kentucky SIP, neither the September 6, 2005, SIP revision, nor this action is addressing the repeal; however, this action is approving those provisions that are being incorporated into 401 KAR 50:045 as a result of the repeal of 401 KAR 50:016. In addition to the recodification/renumbering, some minor changes were made to 401 KAR 50:045. Minor changes made to 401 KAR 50:045 include: the option of submitting alternate Compliance Test Protocol forms, and correction of federal reference citations and typographical errors. These actions were taken as a result of comments received by Kentucky during the public hearing. 401 KAR 63:005, “Open Burning,” was first incorporated into the Kentucky SIP on July 12, 1982 (47 FR 30059). The rule is structured such that open burning in general is prohibited unless certain conditions are met. These conditions are specified under Sections 4 and 5 of 401 KAR 63:005. The proposed revisions, submitted on September 6, 2005, were initiated because as written, the current regulation allowed open burning of garbage in backyard environments. Kentucky amended the rule to address the problems involving the disposal of debris from storms and of other similar items and the open burning of mixed household garbage, and clarified those instances when open burning is permitted. Additionally, the changes explicitly allow fires set by county or municipal governments to dispose of wood waste or clean lumber, which was implied in the previous rule. Restrictions to open burning still exist for those counties, or portions of counties, which are, or were previously designated nonattainment for the 1-hour ozone, 8-hour ozone, PM10, or PM2.5 NAAQS. The changes to Kentucky's open burning rule also assist in the clarity and enforceability of the rule. The amendments to this rule clarify the types of materials that can be burned and the time and places that open burning can occur to minimize the impact on human health and the environment. The amendment also provides added flexibility for local and county governments in disposing of vegetative matter. The changes to both the performance testing and open burning rule are approvable into the Kentucky SIP pursuant to section 110 of the CAA. III. Response to Comments EPA received comments from one commenter regarding the proposed revisions to the Kentucky SIP published on January 17, 2007 (72 FR 1954). A summary of the adverse comments received on the proposed rule and EPA's response to the comments, is presented below. *Comment:* EPA should add the Credible Evidence Rule, either via a Federal Implementation Plan or a SIP Call, at the same time that EPA finalizes this SIP revision. *Response:* The September 6, 2005, SIP revision is specifically related to Kentucky rules regarding performance tests and open burning. The comment is not directly related to the Kentucky rules at issue in the September 6, 2005, SIP submittal. Nonetheless, on June 29, 2007, EPA issued a letter responding to a Petition for Rulemaking filed by the commenter regarding credible evidence and the Kentucky SIP. The June 29, 2007, letter denied commenter's petition for rulemaking and explained why EPA is not taking action, at this time, to require a revision to the Kentucky SIP regarding credible evidence. *Comment:* The **Federal Register** notice must include the complete text of the proposed SIP revision in order to allow for meaningful public participation. *Response:* EPA disagrees with commenter's position on the content of the **Federal Register** notice. Neither the CAA nor the Administrative Procedure Act mandates that the **Federal Register** notice of proposed rulemaking, or final rulemaking action, include the complete text of the proposed SIP revision. The January 17, 2007 (72 FR 1954) proposal satisfies the notice requirements by providing citations to the rules at issue, offering the SIP revision for public review, and describing the subjects and issues involved in the SIP revision. Publication in the **Federal Register** is costly and resource intensive; EPA makes every effort to provide key information in proposal notices while at the same time using Agency resources efficiently. EPA drafts rulemaking notices so as to enable public understanding of the subjects and issues at hand. Should a member of the public wish to review the complete text of the SIP revision, instructions are provided in the notice of proposed rulemaking for how the SIP revision may be accessed. In addition, the public may also contact the listed contact for any further information or questions. *Comment:* The Kentucky SIP cannot allow waiving of performance testing; 401 KAR 50:045 Section 4(1)(d), (2)(d), and (3)(c) cannot be added into the Kentucky SIP. *Response:* The rule changes now being included into the Kentucky SIP regarding performance testing (401 KAR 50:045) are consistent with federal rules found at 40 CFR Part 63. The current changes are minimal; the rules previously included in the SIP contained the waiver provisions discussed by the commenter, so they are not new rules being proposed for inclusion into the SIP for the first time. Generally, rules are necessary to ensure compliance with any emission limitations included in the SIP. The waiver provisions noted by commenter are also included in the federal rule at 40 CFR 63.7(h). The waiver provisions in 40 CFR 63.7(h) are delegable to states pursuant to 40 CFR 63.91(g). EPA Region 4 has delegated the part 63 waiver authorities to the Commonwealth of Kentucky. Kentucky is authorized to implement the waiver provisions described in 401 KAR 50:045, consistent with the federal rules. Kentucky's rules require that both the Cabinet and EPA approve any waivers. As a result, Kentucky's rule has two layers of review and protection. With regard to 401 KAR 50:045(3)(c), this provision applies to sources that are not subject to standards promulgated under 40 CFR 60, 61, or 63. As a result, Kentucky has flexibility to implement its own waiver program, to the extent allowed by federal law, with regard to such sources. Notably, these waiver provisions apply only to performance testing and not to the underlying emissions limits—regulated entities must comply with emissions limits irrespective of any waivers for performance testing. IV. Final Action EPA is taking final action to approve the proposed revisions including changes to 401 KAR 50:045 and 401 KAR 63:045. These revisions pertain to performance testing requirements and open burning, respectively, and are part of the Commonwealth's strategy to meet the NAAQS by reducing emissions of PM2.5 and ozone precursors. This final rule also addresses a comment made on EPA's proposed rulemaking for this action published January 17, 2007 (72 FR 1954). V. Statutory and Executive Order Reviews Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant and because the Agency does not have reason to believe that the rule concerns an environmental health risk or safety risk that may disproportionately affect children. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the Commonwealth to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . A major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by December 17, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2) of the CAA.) List of Subjects in 40 CFR Part 52 Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds. Dated: September 28, 2007. J. I. Palmer, Jr., Regional Administrator, Region 4. 40 CFR part 52 is amended as follows: PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart S—Kentucky 2. Section 52.920(c), Table 1 is amended by revising the entries for “401 KAR 50:045” and “401 KAR 63:005” to read as follows: § 52.920 Identification of plan.

(c)* * * Table 1.—EPA-Approved Kentucky Regulations State citation Title/subject State effective date EPA approval date Explanation Chapter 50 Division for Air Quality; General Administrative Procedures * * * * * * * 401 KAR 50:045 Performance tests 07/13/05 10/17/07 [Insert citation of publication] * * * * * * * Chapter 63 General Standards of Performance * * * * * * * 401 KAR 63:005 Open burning 07/13/05 10/17/07 [Insert citation of publication] * * * * * * * [FR Doc. E7-20334 Filed 10-16-07; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 46 CFR Part 67 [USCG-2007-28098] RIN 1625-AB18 Vessel Documentation; Recording of Instruments AGENCY: Coast Guard, DHS. ACTION: Direct final rule; confirmation of effective date. SUMMARY: On August 2, 2007, we published a direct final rule. The direct final rule notified the public of our intent to amend vessel documentation regulations to eliminate the requirement to provide certain original documents to the National Vessel Documentation Center

(NVDC)for recording, and to eliminate the additional fee for filing by facsimile. We have not received an adverse comment, or notice of intent to submit an adverse comment, on the rule. Therefore, the rule will go into effect as scheduled. DATES: The effective date of the direct final rule published at 72 FR 42310, August 2, 2007, is confirmed as October 31, 2007. FOR FURTHER INFORMATION CONTACT: Mr. Thomas L. Willis, Director, National Vessel Documentation Center, U.S. Coast Guard, telephone

(304)271-2506. SUPPLEMENTARY INFORMATION: We undertook this rulemaking to conform our business practices with similar functions provided by other governmental entities and to allow our customers to avail themselves of better service through electronic filing. This rulemaking is expected to improve efficiency at the NVDC and permit the use of improved information collection technology. Dated: October 11, 2007. Stefan G. Venckus, Chief, Office of Regulations and Administrative Law, United States Coast Guard. [FR Doc. E7-20434 Filed 10-16-07; 8:45 am] BILLING CODE 4910-15-P 72 200 Wednesday, October 17, 2007 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0047; Directorate Identifier 2007-NM-197-AD] RIN 2120-AA64 Airworthiness Directives; Bombardier Model CL-600-2B19 (Regional Jet Series 100 & 440) Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

(AD)for the products listed above that would supersede an existing AD. 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: The Bombardier CL-600-2B19 airplanes have had a history of flap failures at various positions for several years. Flap failure may result in a significant increase in required landing distances and higher fuel consumption than planned during a diversion. * * * 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 November 16, 2007. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *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 W12-40, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov;* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone

(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Dan Parrillo, Aerospace Engineer, Systems and Flight Test Branch, ANE-172, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone

(516)228-7305; fax

(516)794-5531. 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-2007-0047; Directorate Identifier 2007-NM-197-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments. We will post all comments we receive, without change, to *http://www.regulations.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 On August 13, 2007, we issued AD 2007-17-07, Amendment 39-15165 (72 FR 46555, August 21, 2007). That AD required actions intended to address an unsafe condition on certain Bombardier Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes. The actions required by AD 2007-17-07 correspond, in part, to Canadian airworthiness directive CF-2007-10, dated July 18, 2007 (referred to after this as “the MCAI”), issued by Transport Canada Civil Aviation (TCCA), which is the airworthiness authority for Canada. Paragraph

(1)of Note 2 of AD 2007-17-07 specified that the planned compliance times for certain actions required in the Canadian airworthiness directive would allow enough time to provide notice and opportunity for prior public comment on the merits of those actions and that we were considering further rulemaking to address this issue. We have determined that further rulemaking is indeed necessary, and this proposed AD follows from that determination. Accordingly, this proposed AD would supersede AD 2007-17-07. This proposed AD would retain the requirements of AD 2007-17-07, i.e., revising the airplane flight manual

(AFM)by incorporating the information in Canadair Regional Jet Temporary Revision

(TR)RJ/165, dated July 6, 2007, into the AFM and by adding operational procedures to the Limitations section of the AFM; training flight crewmembers and operational control/dispatch personnel on the operational procedures; and doing corrective “maintenance actions.” The corrective “maintenance actions” include the cleaning and lubrication of the flexible shafts, and applicable related investigative and corrective actions (which include a detailed inspection of the actuator connector sealant bead for signs of damage or delamination, repair of damaged sealant, and if necessary, a low temperature torque check on the actuator and, if torque test results are not satisfactory, an installation of a serviceable actuator or, if no serviceable actuators are available, contacting the FAA for corrective action). The corrective “maintenance actions” also include installation of metallic seals in the flexible drive-shafts, and applicable related investigative and corrective actions (which include a detailed inspection of the mating surfaces on the flexible drive-shaft for damage (scratches or dents) and, if mating surfaces have damage, cleaning the sealing washer and mating surfaces and applying sealant). This proposed AD would also require training flight crewmembers on reduced or zero flap landing, and doing additional corrective “maintenance actions” that include a pressure test of the flexible drive-shaft, and corrective actions if necessary. The corrective actions include replacing any flexible drive-shaft which exhibits leakage (any sign of bubbles within one minute during the pressure test in water) with a serviceable flexible drive-shaft; and a low temperature torque test of the flap actuators, and corrective actions (including replacement with a serviceable actuator) if necessary. You may obtain further information by examining the MCAI in the AD docket. FAA's Determination and Requirements of This Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a NOTE within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 684 products of U.S. registry. We also estimate that it would take about 27 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 $1,477,440, or $2,160 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by removing Amendment 39-15165 (72 FR 46555, August 21, 2007) and adding the following new AD: **Bombardier, Inc. (Formerly Canadair):** Docket No. FAA-2007-0047; Directorate Identifier 2007-NM-197-AD. Comments Due Date

(a)We must receive comments by November 16, 2007. Affected ADs

(b)The proposed AD supersedes AD 2007-17-07, Amendment 39-15165. Applicability

(c)This AD applies to Bombardier Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes, certificated in any category, serial numbers 7003 through 7990 and 8000 and subsequent. Subject

(d)Air Transport Association

(ATA)of America Code 27: Flight Controls. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: The Bombardier CL-600-2B19 airplanes have had a history of flap failures at various positions for several years. Flap failure may result in a significant increase in required landing distances and higher fuel consumption than planned during a diversion. * * * This AD includes retaining the requirements of the existing AD: Revising the airplane flight manual by incorporating a temporary revision and by adding operational procedures to the Limitations section; training flight crewmembers and operational control/dispatch personnel on the operational procedures; and doing corrective “maintenance actions.” The corrective “maintenance actions” include the cleaning and lubrication of the flexible shafts, and applicable related investigative and corrective actions (which include a detailed inspection of the actuator connector sealant bead for signs of damage or delamination, repair of damaged sealant, and if necessary, a low temperature torque check on the actuator and if torque test results are not satisfactory, an installation of a serviceable actuator or, if no serviceable actuators are available, contacting the FAA for corrective action), and installing metallic seals in the flexible drive-shafts, and applicable related investigative and corrective actions (which include a detailed inspection of the mating surfaces on the flexible drive-shaft for damage (scratches or dents), and if mating surfaces have damage, cleaning the sealing washer and mating surfaces and applying sealant). This AD also requires training flight crewmembers on reduced or zero flap landing and doing additional corrective “maintenance actions” that include a pressure test of the flexible drive-shaft and corrective actions (which include replacing any flexible drive-shaft which exhibits leakage (any sign of bubbles within one minute during the pressure test in water) with a serviceable flexible drive-shaft) and a low temperature torque test of the flap actuators and corrective actions (which include installation of a serviceable actuator if torque test results are not satisfactory). Restatement of Requirements of AD 2007-17-07

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

(1)Part I. Airplane Flight Manual

(AFM)Change: Within 30 days after September 5, 2007 (the effective date of AD 2007-17-07), revise the Canadair Regional Jet Airplane Flight Manual CSP A-012, by incorporating the information in Canadair Regional Jet Temporary Revision

(TR)RJ/165, dated July 6, 2007, into the AFM. Note 1: The actions required by paragraph (f)(1) of this AD may be done by inserting a copy of Canadair Regional Jet TR RJ/165, dated July 6, 2007, into the Canadair Regional Jet Airplane Flight Manual CSP A-012. When this TR has been included in general revisions of the AFM, the general revisions may be inserted in the AFM.

(2)Part II. Operational Procedures: Within 30 days after September 5, 2007, revise the Limitations Section of the Canadair Regional Jet Airplane Flight Manual CSP A-012, to include the following statement. This may be done by inserting a copy of paragraph (f)(2) of this AD in the AFM. “1. Flap Extended Diversion Upon arrival at the destination airport, an approach shall not be commenced, nor shall the flaps be extended beyond the 0 degree position, unless one of the following conditions exists: a. When conducting a precision approach, the reported visibility (or RVR) is confirmed to be at or above the visibility associated with the landing minima for the approach in use, and can be reasonably expected to remain at or above this visibility until after landing; or b. When conducting a non-precision approach, the reported ceiling and visibility (or RVR) are confirmed to be at or above the ceiling and visibility associated with the landing minima for the approach in use, and can be reasonably expected to remain at or above this ceiling and visibility until after landing; or c. An emergency or abnormal situation occurs that requires landing at the nearest suitable airport; or d. The fuel remaining is sufficient to conduct the approach, execute a missed approach, divert to a suitable airport with the flaps extended to the landing position, conduct an approach at the airport and land with 1000 lb (454 kg) of fuel remaining. Note 1: The fuel burn factor (as per AFM TR/165) shall be applied to the normal fuel consumption for calculation of the flaps extended missed approach, climb, diversion and approach fuel consumption. Note 2: Terrain and weather must allow a minimum flight altitude not exceeding 15,000 feet along the diversion route. Note 3: For the purpose of this AD, a “suitable airport” is an airport that has at least one useable runway, served by an instrument approach if operating under Instrument Flight Rules (IFR), and the airport is equipped as per the applicable regulations and standards for marking and lighting. The existing and forecast weather for this airport shall be at or above landing minima for the approach in use. 2. Flap Failure After Takeoff When a takeoff alternate is filed, terrain and weather must allow a minimum flight altitude not exceeding 15,000 feet along the diversion route to that alternate, or other suitable airport. The fuel at departure shall be sufficient to divert to the takeoff alternate or other suitable airport with the flaps extended to the takeoff position, conduct and approach and land with 1000 lb (454 kg) of fuel remaining. Note: The fuel burn factor (as per AFM TR/165) shall be applied to the normal fuel consumption for calculation of the flaps extended, climb, diversion and approach fuel consumption. 3. Flap Zero Landing Operations where all useable runways at the destination and alternate airports are forecast to be wet or contaminated (as defined in the AFM) are prohibited during the cold weather season (December to March inclusive in the northern hemisphere) unless one of the following conditions exists: a. The flap actuators have been verified serviceable in accordance with Part C (Low Temperature Torque Test of the Flap Actuators) of SB 601R-27-150, July 12, 2007, or b. The flight is conducted at a cruise altitude where the SAT is −60 deg C or warmer. If the SAT in flight is colder than −60 deg C, descent to warmer air shall be initiated within 10 minutes, or c. The Landing Distance Available on a useable runway at the destination airport is at least equal to the actual landing distance required for flaps zero. This distance shall be based on Bombardier performance data, and shall take into account forecast weather and anticipated runway conditions, or d. The Landing Distance Available on a useable runway at the filed alternate airport, or other suitable airport is at least equal to the actual landing distance for flaps zero. This distance shall be based on Bombardier performance data, and shall take into account forecast weather and anticipated runway conditions. Note 1: If the forecast destination weather is less than 200 feet above DH or MDA, or less than 1 mile (1500 meters) above the authorized landing visibility (or equivalent RVR), as applied to the useable runway at the destination airport, condition 3.a., 3.b., or 3.d. above must be satisfied. Note 2: When conducting No Alternate IFR (NAIFR) operations, condition 3.a., 3.b., or 3.c. above must be satisfied.”

(3)Part III. Training: As of 30 days after September 5, 2007, no affected airplane may be operated unless the flight crewmembers of that airplane and the operational control/dispatch personnel for that airplane have received training that is acceptable to the Principal Operations Inspector

(POI)on the operational procedures required by paragraph (f)(2) of this AD.

(4)Part IV. Maintenance Actions: Within 120 days after September 5, 2007, do the cleaning and lubrication of the flexible shafts, installation of metallic seals in the flexible drive-shafts, and all applicable related investigative and corrective actions by doing all the applicable actions specified in “PART A” of the Accomplishment Instructions of Bombardier Service Bulletin 601R-27-150, dated July 12, 2007; except if torque test results are not satisfactory, before further flight, install a serviceable actuator in accordance with the service bulletin or, if no serviceable actuators are available, contact the Manager, New York Aircraft Certification Office, FAA, for corrective action. Do all applicable related investigative and corrective actions before further flight. New Requirements of This AD: Actions and Compliance

(g)Unless already done, do the following actions.

(1)As of November 30, 2008, no affected airplane may be operated unless the flight crewmembers of that airplane have received simulator training on reduced or zero flap landing that is acceptable to the Principal Operations Inspector (POI). Thereafter, this training must be done during the normal simulator training cycle, at intervals not to exceed 12 months.

(2)Within 24 months or 4,000 flight hours after the effective date of this AD, whichever occurs first: Do a pressure test of the flexible drive-shaft, and do all applicable corrective actions, by doing all the applicable actions specified in “PART B” of the Accomplishment Instructions of Bombardier Service Bulletin 601R-27-150, dated July 12, 2007. Do all applicable corrective actions before further flight.

(3)Within 24 months after the effective date of this AD: Do a low temperature torque test of the flap actuators, and do all applicable corrective actions, by doing all the applicable actions specified in “PART C” of the Accomplishment Instructions of Bombardier Service Bulletin 601R-27-150, dated July 12, 2007. Do all applicable corrective actions before further flight. FAA AD Differences Note 2: This AD differs from the MCAI and/or service information as follows:

(1)The maintenance tasks specified in the first row of the table in “Part IV. Maintenance Actions” of the MCAI do not specify a corrective action if an actuator is not serviceable (i.e., torque test results are not satisfactory). However, this AD requires contacting the FAA or installing a serviceable actuator before further flight if torque test results are not satisfactory. (Reference paragraph (f)(4) of this AD.)

(2)Although paragraph 2. of “Part III. Training” of the MCAI recommends accomplishing the initial training within 1 year, this AD requires accomplishing the training before November 30, 2008, in order to ensure that the actions are completed prior to the onset of cold weather operations. Other FAA AD Provisions

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

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, New York Aircraft Certification 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: Dan Parrillo, Aerospace Engineer, Systems and Flight Test Branch, ANE-172, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone

(516)228-7305; fax

(516)794-5531. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

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

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

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget

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

(i)Refer to MCAI Canadian Airworthiness Directive CF-2007-10, dated July 18, 2007; Bombardier Service Bulletin 601R-27-150, dated July 12, 2007; and Canadair Regional Jet Temporary Revision RJ/165, dated July 6, 2007, to the Canadair Regional Jet Airplane Flight Manual CSP A-012; for related information. Issued in Renton, Washington, on October 9, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-20465 Filed 10-16-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0046; Directorate Identifier 2007-NM-173-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-100, -200, -200C, -300, -400, and -500 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for all Boeing Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. This proposed AD would require repetitive inspections for any cracking of or damage to the left side and right side flight deck No. 2, No. 4, and No. 5 windows and corrective actions if necessary. This proposed AD results from reports of in-flight departure and separation of the flight deck windows. We are proposing this AD to detect and correct cracking in the vinyl interlayer or damage to the structural inner glass panes of the flight deck No. 2, No. 4, and No. 5 windows, which could result in loss of a window and rapid loss of cabin pressure. Loss of cabin pressure could cause crew communication difficulties or crew incapacitation. DATES: We must receive comments on this proposed AD by December 3, 2007. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *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. For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.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: Wayne Lockett, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6447; fax

(425)917-6590. 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-2007-0046; Directorate Identifier 2007-NM-173-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://www.regulations.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 We have received one report of in-flight departure of the flight deck No. 3 window, on a Boeing Model 747 series airplane, which resulted in rapid loss of cabin pressure and an emergency landing. That airplane had accumulated 36,131 total flight hours and 5,607 total flight cycles. We have also received two reports of in-flight separation of the left side flight deck No. 5 window, on two Boeing Model 737 series airplanes. One of the Model 737 series airplanes experienced cabin pressure loss at 12,500 feet due to separation of the forward, aft, and upper edges of the left side flight deck No. 5 window. That airplane had accumulated 25,673 total flight hours and 15,669 total flight cycles. The other Model 737 series airplane experienced a pressure leak at 29,000 feet due to partial separation of the upper aft corner of the left side flight deck No. 5 window. That airplane had accumulated 28,139 total flight hours and 16,566 total flight cycles. Vinyl interlayer cracking of the flight deck No. 2, No. 4, and No. 5 windows could decrease the load carrying capability of the affected windows during cabin pressurization if the structural glass pane of the window becomes broken. Vinyl interlayer cracking could also decrease the bird impact resistance capability of the flight deck No. 2 and No. 4 windows. Cracking in the vinyl interlayer or damage to the structural inner glass panes of the flight deck No. 2, No. 4, and No. 5 windows, if not corrected, could result in loss of a window and rapid loss of cabin pressure. Loss of cabin pressure could cause crew communication difficulties or crew incapacitation. On July 18, 2007, we issued AD 2007-15-10, amendment 39-15139 (72 FR 41438, July 30, 2007), to address the unsafe condition on all Model 747 airplanes. A correction was issued on September 10, 2007 (72 FR 53923, September 21, 2007), to fix a typographical error in AD 2007-15-10. Relevant Service Information We have reviewed Boeing Alert Service Bulletin 737-56A1023, dated May 24, 2007. The service bulletin describes procedures for doing repetitive internal and external detailed inspections for any cracking of or damage to the left side and right side flight deck No. 2, No. 4, and No. 5 windows that exceeds the limits given in the Accomplishment Instructions of the service bulletin. The service bulletin also describes procedures for accomplishing corrective actions if necessary, which include replacing any cracked or damaged window with a new or serviceable window. The service bulletin specifies an initial compliance time ranging between 6 months and 24 months, depending on the window location and number of window flight hours. If a replacement window is not new or has an unknown number of flight hours, the service bulletin specifies accomplishing the initial inspection before installation. If a replacement window is new or has zero flight hours, the service bulletin specifies accomplishing the initial inspection at the following times:

(1)7,500 window flight hours or 36 months, whichever occurs first, for flight deck No. 2 windows, and

(2)6,000 window flight hours or 24 months, whichever occurs first, for flight deck No. 4 and No. 5 windows. The service bulletin specifies a repetitive interval of

(1)7,500 window flight hours or 36 months, whichever occurs first, for flight deck No. 2 windows, and

(2)6,000 window flight hours or 24 months, whichever occurs first, for flight deck No. 4 and No. 5 windows. The service bulletin specifies accomplishing the corrective actions before further flight. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance There are about 2,685 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 799 airplanes of U.S. registry. The proposed inspections would take about 2 work hours per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $127,840, or $160 per airplane, per inspection cycle. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-0046; Directorate Identifier 2007-NM-173-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by December 3, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to all Boeing Model 737-100, -200, -200C, -300, -400, and -500 series airplanes, certificated in any category. Unsafe Condition

(d)This AD results from reports of in-flight departure and separation of flight deck windows. We are issuing this AD to detect and correct cracking in the vinyl interlayer or damage to the structural inner glass panes of the flight deck No. 2, No. 4, and No. 5 windows, which could result in loss of a window and rapid loss of cabin pressure. Loss of cabin pressure could cause crew communication difficulties or crew incapacitation. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Repetitive Inspections and Replacement

(f)At the applicable times specified in Tables 1, 2, and 3 of paragraph 1.E. of Boeing Alert Service Bulletin 737-56A1023, dated May 24, 2007, except as provided by paragraph

(g)of this AD: Do the internal and external detailed inspections for any cracking of or damage to the left side and right side flight deck No. 2, No. 4, and No. 5 windows and do the applicable corrective actions before further flight, by accomplishing all of the applicable actions specified in the Accomplishment Instructions of the service bulletin. Repeat the inspections thereafter at the applicable interval specified in paragraph 1.E. of the service bulletin. Exception to Compliance Times

(g)Where Tables 1, 2, and 3 of paragraph 1.E. of Boeing Alert Service Bulletin 737-56A1023, dated May 24, 2007, specify counting the compliance time from “* * * the date on this service bulletin,” this AD requires counting the compliance time from the effective date of this AD. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(2)To request a different method of compliance or a different compliance time for this AD, follow the procedures in 14 CFR 39.19. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

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

(4)Installation of metallic window blanks at cockpit eyebrow windows No. 4 and No. 5 in accordance with Supplemental Type Certificate ST01630SE is approved as an AMOC to the initial and repetitive inspections for the flight deck No. 4 and No. 5 windows required by paragraph

(f)of this AD. All other applicable actions required by paragraph

(f)of this AD must be fully complied with. Issued in Renton, Washington, on October 5, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-20466 Filed 10-16-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0045; Directorate Identifier 2007-NM-169- AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-200F, 747-300, 747-400, and 747-400D Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for certain Boeing Model 747-200F, 747-300, 747-400, and 747-400D series airplanes. This proposed AD would require a detailed inspection to detect missing fasteners from the shear clip at a certain stub frame to auxiliary sill joint, and applicable related investigative and corrective actions. This proposed AD results from reports of missing fasteners from the shear clip of the stub frame to auxiliary sill joint and cracking of the adjacent exterior skin and internal doubler. We are proposing this AD to ensure that fasteners are installed in the shear clip of the stub frame to auxiliary sill joint. Missing fasteners could result in cracks in the adjacent exterior skin and internal doubler, which can propagate and result in loss of structural integrity and sudden in-flight decompression of the airplane. DATES: We must receive comments on this proposed AD by December 3, 2007. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *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. Contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207, for the service information identified in this proposed AD. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.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: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(BS)488. In addition, on one of the airplanes, seven fasteners were missing from the shear clip on the left side of the airplane. The cause of the missing fasteners has been attributed to a manufacturing process error. If any fastener is missing from the shear clip at the stub frame to auxiliary sill joint, cracks could result in the exterior skin and internal doubler. Such cracks can propagate and result in loss of structural integrity and sudden in-flight decompression of the airplane. Relevant Service Information We have reviewed Boeing Alert Service Bulletin 747-53A2685, dated May 31, 2007. The service bulletin describes procedures for doing a detailed inspection to detect missing fasteners from the shear clip at the stub frame to auxiliary sill joint at stringer 30 (left and right sides), BS 488, and applicable related investigative and corrective actions. The related investigative actions include doing an open hole high frequency eddy current inspection to detect cracks at certain fastener locations in the exterior skin and internal doubler, and repetitive low frequency eddy current inspections to detect cracks at the edge row fasteners of any skin repair doubler, as applicable. The corrective actions include trimming out cracks, installing missing fasteners, installing skin repair doublers, and contacting Boeing for certain repair conditions, as applicable. The service bulletin also specifies the following compliance times: • For the initial detailed inspection: Before 6,000 total flight cycles, or within 3,000 flight cycles, whichever occurs later. • For the related investigative actions: Before further flight (for an open hole high frequency eddy current inspection), and within 15,000 flight cycles after installation of repair and thereafter at intervals not to exceed 1,500 flight cycles (for low frequency eddy current inspections). • For the corrective actions: Before further flight. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between the Proposed AD and Service Information.” Differences Between the Proposed AD and Service Information The service bulletin specifies to contact the manufacturer for instructions on how to repair certain conditions, but this proposed AD would require repairing those conditions in one of the following ways: • Using a method that we approve; or • Using data that meet the certification basis of the airplane, and that have been approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization whom we have authorized to make those findings. Costs of Compliance There are about 98 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 8 airplanes of U.S. registry. The proposed actions would take about 1 work hour per airplane, at an average labor rate of $80 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $640, or $80 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-0045; Directorate Identifier 2007-NM-169-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by December 3, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Boeing Model 747-200F, 747-300, 747-400, and 747-400D series airplanes, certificated in any category; as identified in Boeing Alert Service Bulletin 747-53A2685, dated May 31, 2007. Unsafe Condition

(d)This AD results from two reports of cracks found in the exterior skin and internal doubler adjacent to the shear clip at the stub frame to auxiliary sill joint at stringer 30 (left and right sides), body station

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Inspection and Applicable Related Investigative and Corrective Actions

(f)At the applicable compliance time and repeat intervals listed in Tables 1 and 2 of paragraph 1.E., “Compliance,” of Boeing Service Bulletin 747-53A2685, dated May 31, 2007; except that where the service bulletin specifies a compliance time after the date on the service bulletin, this AD requires compliance within the specified compliance time after the effective date of this AD: Do the inspection and applicable related investigative and corrective actions by accomplishing all the applicable actions specified in the Accomplishment Instructions of the service bulletin, except as provided by paragraph

(g)of this AD. Repair of Cracks

(g)If any crack is found during any inspection required by this AD, and Boeing Service Bulletin 747-53A2685, dated May 31, 2007, specifies to contact Boeing for appropriate action: Before further flight, repair the crack using a method approved in accordance with the procedures specified in paragraph

(h)of this AD. Alternative Methods of Compliance (AMOCs) (h)(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

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

(3)An AMOC that provides an acceptable level of safety may be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD. Issued in Renton, Washington, on October 9, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-20467 Filed 10-16-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0048; Directorate Identifier 2007-NM-181-AD] RIN 2120-AA64 Airworthiness Directives; Construcciones Aeronauticas, S.A. (CASA), Model CN-235, CN-235-100, CN-235-200, CN-235-300, and C-295 Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

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

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: Subsequent to accidents involving Fuel Tank System explosions in flight * * * and on ground, * * * Special Federal Aviation Regulation 88 (SFAR88) * * * required a safety review of the aircraft Fuel Tank System * * *. Fuel Airworthiness Limitations are items arising from a systems safety analysis that have been shown to have failure mode(s) associated with an ‘unsafe condition’ * * *. These are identified in Failure Conditions for which an unacceptable probability of ignition risk could exist if specific tasks and/or practices are not performed in accordance with the manufacturers' requirements. 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 November 16, 2007. ADDRESSES: You may send comments by any of the following methods: • *Fax:*

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

(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Shahram Daneshmandi, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-1112; fax

(425)227-1149. 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-2007-0048; Directorate Identifier 2007-NM-181-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments. We will post all comments we receive, without change, to *http://dms.dot.gov* , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD. Discussion The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2007-0007, dated January 9, 2007 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: Subsequent to accidents involving Fuel Tank System explosions in flight * * * and on ground, the FAA published Special Federal Aviation Regulation 88 (SFAR 88) in June 2001. SFAR 88 required a safety review of the aircraft Fuel Tank System to determine that the design meets the requirements of FAR (Federal Aviation Regulation) § 25.901 and § 25.981(a) and (b). A similar regulation has been recommended by the JAA (Joint Aviation Authorities) to the European National Aviation Authorities in JAA letter 04/00/02/07/03-L024 of 3 February 2003. The review was requested to be mandated by NAA's (National Aviation Authorities) using JAR (Joint Aviation Regulation) § 25.901(c), § 25.1309. In August 2005 EASA published a policy statement on the process for developing instructions for maintenance and inspection of Fuel Tank System ignition source prevention (EASA D 2005/CPRO, *www.easa.eu.int/home/cert_policy_statements_en.html* ) that also included the EASA expectations with regard to compliance times of the corrective actions on the unsafe and the not unsafe part of the harmonised design review results. On a global scale the TC (type certificate) holders committed themselves to the EASA published compliance dates (see EASA policy statement). The EASA policy statement has been revised in March 2006: The date of 31-12-2005 for the unsafe related actions was set at 01-07-2006. Fuel Airworthiness Limitations are items arising from a systems safety analysis that have been shown to have failure mode(s) associated with an ‘unsafe condition’ as defined in FAA's memo 2003-112-15 ‘SFAR 88—Mandatory Action Decision Criteria’. These are identified in Failure Conditions for which an unacceptable probability of ignition risk could exist if specific tasks and/or practices are not performed in accordance with the manufacturers' requirements. This EASA Airworthiness Directive mandates the Fuel System Airworthiness Limitations (comprising maintenance/inspection tasks and Critical Design Configuration Control Limitations (CDCCL)) for the type of aircraft, that resulted from the design reviews and the JAA recommendation and EASA policy statement mentioned above. The corrective action is revising the Airworthiness Limitations Section of the Instructions for Continued Airworthiness to incorporate new limitations for fuel tank systems. You may obtain further information by examining the MCAI in the AD docket. The FAA has examined the underlying safety issues involved in fuel tank explosions on several large transport airplanes, including the adequacy of existing regulations, the service history of airplanes subject to those regulations, and existing maintenance practices for fuel tank systems. As a result of those findings, we issued a regulation titled “Transport Airplane Fuel Tank System Design Review, Flammability Reduction and Maintenance and Inspection Requirements” (66 FR 23086, May 7, 2001). In addition to new airworthiness standards for transport airplanes and new maintenance requirements, this rule included Special Federal Aviation Regulation No. 88 (“SFAR 88,” Amendment 21-78, and subsequent Amendments 21-82 and 21-83). Among other actions, SFAR 88 requires certain type design (i.e., type certificate

(TC)and supplemental type certificate (STC)) holders to substantiate that their fuel tank systems can prevent ignition sources in the fuel tanks. This requirement applies to type design holders for large turbine-powered transport airplanes and for subsequent modifications to those airplanes. It requires them to perform design reviews and to develop design changes and maintenance procedures if their designs do not meet the new fuel tank safety standards. As explained in the preamble to the rule, we intended to adopt airworthiness directives to mandate any changes found necessary to address unsafe conditions identified as a result of these reviews. In evaluating these design reviews, we have established four criteria intended to define the unsafe conditions associated with fuel tank systems that require corrective actions. The percentage of operating time during which fuel tanks are exposed to flammable conditions is one of these criteria. The other three criteria address the failure types under evaluation: Single failures, single failures in combination with a latent condition(s), and in-service failure experience. For all four criteria, the evaluations included consideration of previous actions taken that may mitigate the need for further action. The Joint Aviation Authorities

(JAA)has issued a regulation that is similar to SFAR 88. (The JAA is an associated body of the European Civil Aviation Conference

(ECAC)representing the civil aviation regulatory authorities of a number of European States who have agreed to co-operate in developing and implementing common safety regulatory standards and procedures.) Under this regulation, the JAA stated that all members of the ECAC that hold type certificates for transport category airplanes are required to conduct a design review against explosion risks. We have determined that the actions identified in this AD are necessary to reduce the potential of ignition sources inside fuel tanks, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane. Relevant Service Information European Aeronautic Defense and Space Company

(EADS)CASA has issued CN-235/C-295 Technical Document DT-0-C00-05001, Issue C, dated October 2006. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of This Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a **Note** within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect 8 products of U.S. registry. We also estimate that it would take about 1 work-hour 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 $640, or $80 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **Construcciones Aeronauticas, S.A. (CASA):** Docket No. FAA-2007-0048; Directorate Identifier 2007-NM-181-AD. Comments Due Date

(a)We must receive comments by November 16, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to all CASA Model CN-235, CN-235-100, CN-235-200, CN-235-300, and C-295 airplanes; certificated in any category. Note 1: This AD requires revisions to certain operator maintenance documents to include new inspections. Compliance with these inspections is required by 14 CFR 91.403(c). For airplanes that have been previously modified, altered, or repaired in the areas addressed by these inspections, the operator may not be able to accomplish the inspections described in the revisions. In this situation, to comply with 14 CFR 91.403(c), the operator must request approval for an alternative method of compliance according to paragraph

(g)of this AD. The request should include a description of changes to the required inspections that will ensure the continued operational safety of the airplane. Subject

(d)Air Transport Association

(ATA)of America Code 28: Fuel. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: Subsequent to accidents involving Fuel Tank System explosions in flight * * * and on ground, the FAA published Special Federal Aviation Regulation 88 (SFAR 88) in June 2001. SFAR 88 required a safety review of the aircraft Fuel Tank System to determine that the design meets the requirements of FAR (Federal Aviation Regulation) § 25.901 and § 25.981(a) and (b). A similar regulation has been recommended by the JAA (Joint Aviation Authorities) to the European National Aviation Authorities in JAA letter 04/00/02/07/03-L024 of 3 February 2003. The review was requested to be mandated by NAA's (National Aviation Authorities) using JAR (Joint Aviation Regulation) § 25.901(c), § 25.1309. In August 2005 EASA published a policy statement on the process for developing instructions for maintenance and inspection of Fuel Tank System ignition source prevention (EASA D 2005/CPRO, *www.easa.eu.int/home/cert_policy_statements_en.html* ) that also included the EASA expectations with regard to compliance times of the corrective actions on the unsafe and the not unsafe part of the harmonised design review results. On a global scale the TC (type certificate) holders committed themselves to the EASA published compliance dates (see EASA policy statement). The EASA policy statement has been revised in March 2006: the date of 31-12-2005 for the unsafe related actions was set at 01-07-2006. Fuel Airworthiness Limitations are items arising from a systems safety analysis that have been shown to have failure mode(s) associated with an ‘unsafe condition’ as defined in FAA's memo 2003-112-15 ‘SFAR 88—Mandatory Action Decision Criteria’. These are identified in Failure Conditions for which an unacceptable probability of ignition risk could exist if specific tasks and/or practices are not performed in accordance with the manufacturers' requirements. This EASA Airworthiness Directive mandates the Fuel System Airworthiness Limitations (comprising maintenance/inspection tasks and Critical Design Configuration Control Limitations (CDCCL)) for the type of aircraft, that resulted from the design reviews and the JAA recommendation and EASA policy statement mentioned above. The corrective action is revising the Airworthiness Limitations Section of the Instructions for Continued Airworthiness to incorporate new limitations for fuel tank systems. Actions and Compliance

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

(1)Within 3 months after the effective date of this AD, or before December 16, 2008, whichever occurs first, revise the Airworthiness Limitations section of the Instructions for Continued Airworthiness to incorporate the Fuel Airworthiness Limitation maintenance and inspection tasks as defined in European Aeronautic Defense and Space Company

(EADS)CASA CN-235/C295 Technical Document DT-0-C00-05001, Issue C, dated October 2006. For all tasks identified in Technical Document DT-0-C00-05001, the initial compliance times start from the later of the times specified in paragraphs (f)(1)(i) and (f)(1)(ii) of this AD, and the repetitive inspections must be accomplished thereafter at the interval specified in Technical Document DT-0-C00-05001, except as provided by paragraph (f)(3) of this AD.

(i)The effective date of this AD.

(ii)The date of issuance of the original Spanish standard airworthiness certificate or the date of issuance of the original Spanish export certificate of airworthiness.

(2)Within 6 months after the effective date of this AD, or before December 16, 2008, whichever occurs first, revise the Airworthiness Limitations section of the Instructions for Continued Airworthiness to include the CDCCL data contained in EADS CASA CN-235/C-295 Technical Document DT-0-C00-05001, Issue C, dated October 2006.

(3)Except as provided by paragraph

(g)of this AD: After accomplishing the actions specified in paragraphs (f)(1) and (f)(2) of this AD, no alternative inspection, inspection intervals, or CDCCLs may be used. FAA AD Differences Note 2: 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, ANM-116, International Branch, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Shahram Daneshmandi, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-1112; fax

(425)227-1149. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

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

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget

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

(h)Refer to MCAI European Aviation Safety Agency

(EASA)Airworthiness Directive 2007-0007, dated January 9, 2007; and EADS CASA CN-235/C-295 Technical Document DT-0-C00-05001, Issue C, dated October 2006, for related information. Issued in Renton, Washington, on October 9, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-20470 Filed 10-16-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0049; Directorate Identifier 2007-NM-168-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 737-600, -700, -700C, -800, and -900 Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to adopt a new airworthiness directive

(AD)for certain Boeing Model 737-600, -700, -700C, -800, and -900 series airplanes. This proposed AD would require replacing the drain tube assemblies and support clamps on the aft fairings of the engine struts. This proposed AD results from reports of failure of the drain tube assembly and clamp on the aft fairings of an engine strut. We are proposing this AD to prevent failure of the drain tube assemblies and clamps on the aft fairings of the engine struts. Such a failure could allow leaked flammable fluids in the drain systems to discharge on to the heat shields of the aft fairings of the engine struts, which could result in an undetected and uncontrollable fire. DATES: We must receive comments on this proposed AD by December 3, 2007. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *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. For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.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: Kathrine Rask, Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6505; fax

(425)917-6590. 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-2007-0049; Directorate Identifier 2007-NM-168-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://www.regulations.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 We have received reports of failure of the drain tube assembly and support clamp on the aft fairing of an engine strut. In most of the reports, the failure occurred at the brazed joint between the tube and the drain cast fitting. Failure of the drain tube assembly and support clamp on the aft fairing of an engine strut, if not corrected, could allow leaked flammable fluids in the drain system to discharge on to the heat shield of the aft fairing of an engine strut, which may result in an undetected and uncontrollable fire. Relevant Service Information We have reviewed Boeing Special Attention Service Bulletin 737-54-1043, dated May 2, 2007. The service information describes procedures for replacing the drain tube assemblies and support clamps on the aft fairing of the struts of the number 1 and number 2 engines with new drain tube assemblies and new support clamps. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. For this reason, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously. Costs of Compliance There are about 2,058 airplanes of the affected design in the worldwide fleet. This proposed AD would affect about 721 airplanes of U.S. registry. The proposed actions would take about 4 work hours per airplane, at an average labor rate of $80 per work hour. Required parts would cost about $2,351 per airplane. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $1,925,791, or $2,671 per airplane. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-0049; Directorate Identifier 2007-NM-168-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by December 3, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to Boeing Model 737-600, -700, -700C, -800, and -900 series airplanes, certificated in any category; as identified in Boeing Special Attention Service Bulletin 737-54-1043, dated May 2, 2007. Unsafe Condition

(d)This AD results from reports of failure of the drain tube assembly and support clamp on the aft fairing of an engine strut. We are issuing this AD to prevent failure of the drain tube assemblies and clamps on the aft fairings of the struts of the number 1 and number 2 engines. Such a failure could allow leaked flammable fluids in the drain systems to discharge on to the heat shields of the aft fairings of the engine struts, which could result in an undetected and uncontrollable fire. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Replacement

(f)Within 60 months after the effective date of this AD, remove the drain tube assemblies and support clamps on the aft fairing of the struts of engine number 1 and engine number 2. These are to be replaced with new drain tube assemblies and clamps, in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737-54-1043, dated May 2, 2007. Alternative Methods of Compliance (AMOCs) (g)(1) The Manager, Seattle Aircraft Certification Office, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO. Issued in Renton, Washington, on October 9, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-20469 Filed 10-16-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0044; Directorate Identifier 2007-NM-126-AD] RIN 2120-AA64 Airworthiness Directives; BAE Systems (Operations) Limited Model BAe 146 and Avro 146-RJ Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: We propose to adopt a new airworthiness directive

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

(MCAI)originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as: An accumulator cylinder had material defects and suffered an in-flight burst failure causing damage to the aircraft structure. * * * 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 November 16, 2007. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *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 W12-40, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.gov;* or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone

(800)647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Todd Thompson, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)227-1175; fax

(AD)requires all accumulators with cylinders from this supplier to be identified and inspected prior to re-installation. The corrective action includes replacing any accumulator found to have a defect. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information BAE Systems (Operations) Limited has issued Inspection Service Bulletin ISB.29-047, dated October 3, 2006. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA's Determination and Requirements of This Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design. Differences Between This AD and the MCAI or Service Information We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information. We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a **Note** within the proposed AD. Costs of Compliance Based on the service information, we estimate that this proposed AD would affect about 1 product of U.S. registry. We also estimate that it would take about 4 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 $320, or $320 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **BAE Systems (Operations) Limited (Formerly British Aerospace Regional Aircraft):** Docket No. FAA-2007-0044; Directorate Identifier 2007-NM-126-AD. Comments Due Date

(a)We must receive comments by November 16, 2007. Affected ADs

(b)None. Applicability

(c)This AD applies to BAE Systems (Operations) Limited Model BAe 146-100A, -200A, and -300A series airplanes; and Model Avro 146-RJ70A, 146-RJ85A, and 146-RJ100A airplanes; certificated in any category, all models, all serial numbers. Subject

(d)Air Transport Association

(ATA)of America Code 29: Hydraulic power. Reason

(e)The mandatory continuing airworthiness information

(MCAI)states: An accumulator cylinder had material defects and suffered an in-flight burst failure causing damage to the aircraft structure. This resulted in the issue of EASA Emergency AD 2006-0061-E [we issued AD 2006-23-12 to address that EASA AD] that required the identification and check of cylinders from known suspect batches. Further investigations and checks by the accumulator manufacturer have concluded that all cylinders from a particular supplier may not have been correctly inspected at manufacture. To prevent the risk of further failures, this Airworthiness Directive

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

(1)Within 30 months after the effective date of this AD, identify the installed accumulator in accordance with paragraph 2.C. of BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047, dated October 3, 2006, which makes reference to APPH Service Bulletin AIR91666-29-03, dated July 2006.

(2)When an accumulator is identified as being affected by this AD, before further flight after accomplishing the actions required in paragraph (f)(1) of this AD, remove the accumulator in accordance with paragraph 2.D. of BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047, dated October 3, 2006, and do a magnetic particle inspection of the cylinder for any defects in accordance with APPH Service Bulletin AIR91666-29-03, dated July 2006.

(3)If any defect is found during the inspection required in paragraph (f)(2) of this AD, before next flight, replace the accumulator with a serviceable unit in accordance with the Accomplishment Instructions of APPH Service Bulletin AIR91666-29-03, dated July 2006.

(4)After the effective date of this AD, no person may install a spare accumulator identified by APPH Service Bulletin AIR91666-29-03, dated July 2006, as a replacement part, unless it has been inspected in accordance with APPH Service Bulletin AIR91666-29-02, dated March 2006; or APPH Service Bulletin AIR91666-29-03, dated July 2006 (see second Note in paragraph 1.D.(1) of BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047, dated October 3, 2006, for further explanation). FAA AD Differences Note: This AD differs from the MCAI and/or service information as follows:

(1)Where the MCAI specifies to identify the installed accumulator within 6 weeks after the effective date of the AD, we have determined that the identification may be done within 30 months after the effective date of this AD to coincide with the compliance time for the magnetic particle inspection. In making this determination, we considered the maximum interval of time allowable for all affected airplanes to continue to operate without compromising safety, fleet usage, and the availability of replacement parts. Other FAA AD Provisions

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

(1)*Alternative Methods of Compliance (AMOCs):* The Manager, ANM-116, International Branch, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to ATTN: Todd Thompson, Aerospace Engineer, International Branch, ANM-116, FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone

(425)227-1175; fax

(425)227-1149. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector

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

(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget

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

(h)Refer to MCAI European Aviation Safety Agency Airworthiness Directive 2007-0076, dated March 21, 2007, and the service information listed in Table 1 of this AD for related information. Table 1.—Service Information Service Bulletin Date APPH Service Bulletin AIR91666-29-02 March 2006. APPH Service Bulletin AIR91666-29-03 July 2006. BAE Systems (Operations) Limited Inspection Service Bulletin ISB.29-047 October 3, 2006. Issued in Renton, Washington, on October 9, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-20462 Filed 10-16-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0043; Directorate Identifier 2007-NM-058-AD] RIN 2120-AA64 Airworthiness Directives; Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747SR, and 747SP Series Airplanes AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The FAA proposes to supersede an existing airworthiness directive

(AD)that applies to certain Boeing Model 747 series airplanes. The existing AD currently requires inspecting to detect cracking in certain lower lobe fuselage skin lap joints, doing repetitive inspections for cracking at certain fastener locations having countersunk fasteners, and replacing countersunk fasteners with protruding head fasteners at certain fastener locations. This proposed AD would replace a previous high-frequency eddy current

(HFEC)inspection method with a new HFEC inspection method, add a one-time inspection for cracking of certain airplanes, and terminate the adjustment factor for the inspection compliance times based on cabin differential pressure. This proposed AD also would include inspection at an additional lap joint. This proposed AD results from reports of fuselage skin cracks found at certain countersunk fastener locations in the upper row of lap joints near the wing-to-body fairings, and from a report that the presence of alodine-coated rivets could cause faulty results during the required inspections using the optional sliding probe HFEC inspection method specified in the existing AD. We are proposing this AD to prevent reduced structural integrity of the fuselage. DATES: We must receive comments on this proposed AD by December 3, 2007. ADDRESSES: You may send comments by any of the following methods: • *Federal eRulemaking Portal:* Go to *http://www.regulations.gov.* Follow the instructions for submitting comments. • *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. For service information identified in this AD, contact Boeing Commercial Airplanes, P.O. Box 3707, Seattle, Washington 98124-2207. Examining the AD Docket You may examine the AD docket on the Internet at *http://www.regulations.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: Ivan Li, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone

(425)917-6437; fax

(NDI)methods rely on disruptions in the electromagnetic field around cracks in metallic structures to detect cracking. One such NDI method is the sliding probe high frequency eddy current

(HFEC)inspection, which was an optional inspection method specified by AD 94-15-06. The effects of these increases in rivet/skin electricity conductivity could be strong enough to mask a crack indication during the required inspections using the optional sliding probe HFEC inspection method specified in AD 94-15-06. Boeing has informed us that airplanes with line numbers 630 through 814 inclusive could have alodine-coated aluminum rivets installed in the fastener holes that were required to be inspected in accordance with AD 94-15-06. The presence of these rivets could cause faulty results when performing the required inspections using the optional sliding probe HFEC skin inspection method. Consequently, Boeing has issued Boeing Alert Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007. (In AD 94-15-06, we referred to Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992, as the appropriate source of service information for doing the required actions.) Revision 3 of the alert service bulletin updates the sliding probe HFEC skin inspection method, and includes a one-time special HFEC or detailed inspection of the affected fastener holes for airplanes on which the modification required by AD 94-15-06 has not been accomplished and on which the optional sliding probe HFEC inspection method was used during the last skin inspection. The sliding probe HFEC inspection specified in the previous revisions of the service bulletin would no longer be allowed in this proposed AD. In addition, paragraph (e)(2) of AD 94-15-06 did not include the lap joint at stringer location S-46L in the list of lap joints requiring inspection for Model 747SP series airplanes. This proposed AD would include that stringer location. Relevant Service Information We have reviewed Boeing Alert Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007. The procedures in Revision 3 of the alert service bulletin are similar to those in Revision 2, dated October 8, 1992. However, Revision 3 changes the instructions for the optional sliding probe HFEC inspection method and also gives instructions for a special (one-time) inspection for cracking of airplanes that were not previously modified according to the service bulletin and on which the sliding probe HFEC inspection method was used during the last skin inspection, and repair if necessary. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. FAA's Determination and Requirements of the Proposed AD We have evaluated all pertinent information and identified an unsafe condition that is likely to develop on other airplanes of the same type design. For this reason, we are proposing this AD, which would supersede AD 94-15-06 and would retain certain requirements of the existing AD. This proposed AD would also require accomplishing the additional actions specified in the alert service bulletin described previously, except as discussed under “Differences Between the Proposed AD and the Alert Service Bulletin.” Differences Between the Proposed AD and the Alert Service Bulletin Although the alert service bulletin specifies to submit certain information to the manufacturer, this proposed AD does not include that requirement. The service bulletin specifies to contact the manufacturer for appropriate action, but this proposed AD would require inspection or repairing those conditions, as applicable, in one of the following ways: • Using a method that we approve; or • Using data that meet the certification basis of the airplane, and that have been approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization whom we have authorized to make those findings. Changes to Existing AD This proposed AD would retain certain requirements of AD 94-15-06. Paragraphs

(c)and

(d)of that AD specify that it is not necessary to count flight cycles at 2.0 psi or less cabin differential pressure; and that for Boeing Model 747SR airplanes, the modification compliance times specified in paragraphs

(a)and

(b)of that AD may be multiplied by a 1.2 adjustment factor. We find that insufficient data exist to support these adjustments. Consequently, this proposed AD would no longer allow for these adjustment factors. This change has been coordinated with Boeing. In addition, since AD 94-15-06 was issued, the AD format has been revised, and certain paragraphs have been rearranged. As a result, the corresponding paragraph identifiers have changed in this proposed AD, as listed in the following table: Revised Paragraph Identifiers Requirement in AD 94-15-06 Corresponding requirement in this proposed AD Paragraph

(a)Paragraph (f). Paragraph

(b)Paragraph (g). Paragraph

(c)Paragraph (h). Paragraph

(d)Paragraph (i). Paragraph

(e)Paragraph (j). Paragraph

(f)Paragraph (k). Paragraph

(g)Paragraph (l). Paragraph

(h)Paragraph (m). Paragraph

(i)Paragraph (n). Paragraph

(j)Paragraph (o). Paragraph

(k)Paragraph (p). Costs of Compliance This proposed AD would affect about 348 airplanes in the worldwide fleet; 90 of those airplanes are of U.S. registry. The issue associated with alodine-coated aluminum rivets affects 162 airplanes in the worldwide fleet and 24 airplanes of U.S. registry. The following table provides the estimated costs for U.S. operators to comply with this proposed AD. The average labor rate is $80 per work hour. Estimated Costs Action Work hours Parts Number of affected airplanes Cost per airplane Fleet cost Inspections (required by AD 90-10-07 and retained in AD 94-15-06 and this AD) 14 $0 90 $1,120, per inspection cycle $100,800, per inspection cycle. Inspections (required by AD 94-15-06 and retained in this proposed AD) 82 $0 90 $6,560, per inspection cycle $590,400, per inspection cycle. Modification (required by AD 94-15-06 and retained in this proposed AD) 124 Minimal 90 $9,920 $892,800. One-time inspection (new proposed action) 4 $0 24 $320 $7,680. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that the proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. See the ADDRESSES section for a location to examine the regulatory evaluation. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The Federal Aviation Administration

(FAA)amends § 39.13 by removing amendment 39-8977 (59 FR 37659, July 25, 1994) and adding the following new airworthiness directive (AD): **Boeing:** Docket No. FAA-2007-0043; Directorate Identifier 2007-NM-058-AD. Comments Due Date

(a)The FAA must receive comments on this AD action by December 3, 2007. Affected ADs

(b)This AD supersedes AD 94-15-06. Applicability

(c)This AD applies to Boeing Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747SR, and 747SP series airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007. Unsafe Condition

(d)This AD results from reports of fuselage skin cracks found at certain countersunk fastener locations in the upper row of lap joints near the wing-to-body fairings, and from a report that the presence of alodine-coated rivets could cause faulty results during the required inspections using the optional sliding probe HFEC inspection method specified in AD 94-15-06. We are issuing this AD to prevent reduced structural integrity of the fuselage. Compliance

(e)You are responsible for having the actions required by this AD performed within the compliance times specified, unless the actions have already been done. Requirements of AD 94-15-06 Inspections for Airplanes Having Line Numbers 201 Through 765 Inclusive

(f)For airplanes having line numbers 201 through 765 inclusive: Conduct a high frequency eddy current

(HFEC)inspection to detect cracking of the lower lobe lap joints in the vicinity of the wing-to-body fairings, in accordance with Boeing Alert Service Bulletin 747-53A2312, dated June 12, 1989; Revision 1, dated March 29, 1990; Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD; at the time specified in paragraph (f)(1), (f)(2), (f)(3), or (f)(4) of this AD, as applicable. As of the effective date of this AD, only Revision 3 shall be used. Repeat this inspection thereafter at intervals not to exceed 4,000 landings until the inspection required by paragraph

(j)of this AD is accomplished.

(1)For airplanes that have accumulated less than 11,200 total landings as of February 5, 1990 (the effective date of AD 90-01-07, amendment 39-6440, which was superseded by AD 94-15-06): Prior to the accumulation of 11,000 total landings, or within the next 1,000 landings after February 5, 1990, whichever occurs later.

(2)For airplanes that have accumulated 11,200 or more total landings but less than 15,201 total landings as of February 5, 1990: Within the next 1,000 landings after February 5, 1990, or prior to the accumulation of 15,500 total landings, whichever occurs earlier.

(3)For airplanes that have accumulated 15,201 or more total landings but less than 18,200 total landings as of February 5, 1990: Within the next 300 landings after February 5, 1990, or prior to the accumulation of 18,250 total landings, whichever occurs earlier.

(4)For airplanes that have accumulated 18,200 or more landings as of February 5, 1990: Within the next 50 landings after February 5, 1990. Repair and Modification for Airplanes Having Line Numbers 201 Through 765 Inclusive

(g)For airplanes having line numbers 201 through 765 inclusive: Accomplish the requirements of paragraphs (g)(1) and (g)(2) of this AD.

(1)If any cracking is detected during the inspections required by paragraph

(f)of this AD, prior to further flight, repair in accordance with Boeing Alert Service Bulletin 747-53A2312, dated June 12, 1989; Revision 1, dated March 29, 1990; Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used.

(2)Prior to the accumulation of 20,000 total landings or within the next 3,000 landings after February 5, 1990 (the effective date of AD 90-01-07), whichever occurs later, modify the airplane by replacing countersunk fasteners in the upper row of the lower lobe lap joints in the vicinity of the wing-to-body fairings with protruding head fasteners, in accordance with the procedures described in Boeing Alert Service Bulletin 747-53A2312, dated June 12, 1989; Revision 1, dated March 29, 1990; Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used. Adjustments for Cabin Differential Pressure for Airplanes Having Line Numbers 201 Through 765 Inclusive

(h)For airplanes having line numbers 201 through 765 inclusive: Before the effective date of this AD, for purposes of complying with paragraphs

(f)and

(g)of this AD, the number of landings may be determined to equal the number of pressurization cycles where the cabin pressure differential was greater than 2.0 psi.

(i)For airplanes having line numbers 201 through 765 inclusive: Before the effective date of this AD, for Model 747SR series airplanes only, based on continued mixed operation of lower cabin differentials, the inspection and modification compliance times specified in paragraphs

(f)and

(g)of this AD may be multiplied by a 1.2 adjustment factor. General Visual Inspection for Countersunk Fasteners for All Airplanes

(j)For all airplanes: Prior to the accumulation of 11,000 total landings, or within 1,000 landings after August 24, 1994 (the effective date of AD 94-15-06), whichever occurs later, conduct a general visual inspection, unless previously accomplished within the last 3,000 landings prior to August 24, 1994, to determine if countersunk fasteners have been installed in the lap joints listed in paragraph (j)(1) or (j)(2) of this AD, as applicable, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used. Accomplishment of this inspection terminates the inspection requirements of paragraph

(f)of this AD.

(1)For Model 747-100, -200, -300, -400, and 747SR series airplanes: From body stations

(BS)741 to 1000 at Stringers (S-)34L, S-34R, S-39L, S-39R, S-44L, and S-44R, and from BS 1480 to 1741 at S-34L, S-34R, S-40L, and S-40R.

(2)For Model 747SP series airplanes: From BS 520 to 1000 at S-34L, S-34R, S-39L, S-39R, S-44L, and S-44R, and from BS 1480 to 1741 at S-34L, S-34R, S-40L, and S-40R. Corrective Action for Countersunk Fasteners for All Airplanes

(k)For all airplanes: If no countersunk fastener is found in the upper row of a lap joint during the inspection required by paragraph

(j)of this AD, no further action is required by this AD for that lap joint.

(l)For all airplanes: If any countersunk fastener is found in the upper row of a lap joint during the inspection required by paragraph

(j)of this AD, prior to further flight, perform a high frequency eddy current

(HFEC)inspection to detect cracking at all fastener locations in the lap joint where a countersunk fastener was found, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used. Repetitive Inspections

(m)If no cracking is detected during any inspection required by paragraphs

(l)and

(q)of this AD, at any fastener location where a countersunk fastener was found, repeat the HFEC inspection thereafter at intervals not to exceed 4,000 landings, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used. As an alternative to the HFEC inspection, operators may perform a detailed inspection to detect cracking at any fastener location where a countersunk fastener was found, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. Perform the detailed inspection within the next 4,000 landings after the HFEC inspection required by paragraph

(l)of this AD, and repeat the inspection thereafter at intervals not to exceed 500 landings. At any of the subsequent inspection cycles, operator may use either inspection method provided that the corresponding inspection interval is used to determine the compliance time of the next inspection.

(n)If cracking is detected during any inspection required by paragraph (l), (m), (p), or

(q)of this AD, at any fastener location where a countersunk fastener was found, prior to further flight, repair and modify that lap joint in accordance with Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used. Accomplishment of this repair and modification terminates the repetitive inspections required by paragraph

(m)of this AD for that lap joint. Modification of Countersunk Fasteners for All Airplanes

(o)For all airplanes: Prior to the accumulation of 20,000 total landings or within 1,000 landings after August 24, 1994, whichever occurs later, modify all fastener locations where a countersunk fastener was found during the inspections required by paragraph

(j)of this AD, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used. For purposes of complying with the requirements of this paragraph, fastener locations that were previously modified in accordance with paragraph

(g)or

(n)of this AD do not need to be modified again. Accomplishment of this modification terminates the repetitive inspections required by paragraph

(m)of this AD for the modified fastener locations. Post-Modification Inspections for All Airplanes

(p)For all airplanes: Prior to the accumulation of 10,000 total landings following the modification required by paragraph (g), (n), (o),

(q)or

(s)of this AD, perform an HFEC inspection to detect cracking at all fastener locations where a countersunk fastener was found, and repeat this inspection thereafter at intervals not to exceed 4,000 landings, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. As of the effective date of this AD, only Revision 3 shall be used. New Requirements of This AD General Visual Inspection for Countersunk Fasteners and Modification for Model 747SP Airplanes at Stringer S-46L

(q)For Model 747SP series airplanes having line numbers 201 through 814 inclusive, do the actions in paragraphs (q)(1) and (q)(2) of this AD at the times specified in those paragraphs.

(1)Prior to the accumulation of 11,000 total landings, or within 1,000 landings as of the effective date of this AD, whichever occurs later, unless previously accomplished within the last 3,000 landings prior to the effective date of this AD, conduct a general visual inspection of the lap joint from BS 520 to 1000 at stringer S-46L to determine if countersunk fasteners have been installed in the specified area, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD.

(i)If no countersunk fastener is found in the upper row of the lap joint during the inspection, no further action is required by this AD for the lap joint.

(ii)If any countersunk fastener is found in the upper row of the lap joint, prior to further flight, perform an HFEC inspection to detect cracking at all fastener locations where a countersunk fastener was found, in accordance with the procedures described in Boeing Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. A. If no cracking is found, repeat the inspection thereafter in accordance with the requirements of paragraph

(m)of this AD. B. If any cracking is found, prior to further flight, repair and modify the lap joint as required by paragraph

(n)of this AD.

(2)Prior to the accumulation of 20,000 total landings, or within 1,000 landings as of the effective date of this AD, whichever occurs later, modify all fastener locations where a countersunk fastener was found, during the inspection required by paragraph (q)(1) of this AD, in accordance with the Accomplishment Instructions of Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992; or Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. For purposes of complying with the requirements of this AD, fastener locations that were previously modified in accordance with paragraph

(n)of this AD do not need to be modified again. Accomplishment of this modification terminates the repetitive inspections required by paragraph

(m)of this AD for the modified fastener locations. Adjustments to Compliance Time: Cabin Differential Pressure

(r)For the purposes of calculating the compliance threshold and repetitive intervals for actions required by paragraphs

(f)and

(g)of this AD, on or as of the effective date of this AD: All flight cycles, including the number of flight cycles in which cabin differential pressure is at 2.0 psi or less, must be counted when determining the number of flight cycles that have occurred on the airplane, and a 1.2 adjustment factor may not be used. However, for airplanes on which the repetitive intervals for the actions required by paragraph

(f)of this AD have been calculated in accordance with paragraph

(h)and/or

(i)of this AD by excluding the number of flight cycles in which cabin differential pressure is at 2.0 pounds psi or less, and/or by using a 1.2 adjustment factor: Continue to adjust the repetitive intervals in accordance with paragraph

(h)and/or

(i)of this AD until the next inspection required by paragraph

(f)of this AD is accomplished. Thereafter, no adjustment to compliance times based on paragraph

(h)and/or

(i)of this AD is allowed. Special One-Time Inspection for Cracking of Certain Airplanes

(s)For airplanes with line numbers 630 through 814 inclusive that meet the conditions specified in paragraphs (s)(1) and (s)(2) of this AD: Within 300 flight cycles as of the effective date of this AD, or within 500 flight cycles after the most recent sliding probe inspection done in accordance with Boeing Alert Service Bulletin 747-53A2312, Revision 1, dated March 29, 1990; or Revision 2, dated October 8, 1992, whichever occurs later, do a special one-time HFEC inspection or a special one-time detailed inspection for cracking, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007. If any cracking is found in a lap joint, before further flight, repair and modify that lap joint in accordance with Boeing Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007; except as provided by paragraph

(u)of this AD. Accomplishment of this repair and modification terminates the repetitive inspections required by paragraph

(m)of this AD for that lap joint. This special one-time inspection is not required for lap joints that have been modified in accordance with paragraph (g), (n), (o), or

(q)of this AD.

(1)Airplanes that have not been modified in accordance with paragraph

(g)or

(o)of this AD.

(2)Airplanes on which the sliding probe HFEC inspection method specified in Boeing Service Bulletin 747-53A2312, Revision 1, dated March 29, 1990; or Revision 2, dated October 8, 1992; was used during the last skin inspection required by AD 94-15-06. Actions After the Special One-Time Inspection if No Cracking Is Found

(t)For airplanes specified in paragraph

(s)of this AD on which no cracking is found during the special one-time inspection, do the applicable repetitive inspections specified in paragraph (t)(1) or (t)(2) of this AD.

(1)If the special one-time inspection was done using the HFEC inspection method in accordance with paragraph

(s)of this AD, perform the next inspection required by paragraph

(m)of this AD within the next 4,000 flight cycles after doing the inspection required by paragraph

(s)of this AD, and repeat the inspection thereafter in accordance with paragraph

(m)of this AD.

(2)If the special one-time inspection was done using the detailed inspection method in accordance with paragraph

(s)of this AD, perform the next inspection required by paragraph

(m)of this AD within the next 500 flight cycles after doing the inspection required by paragraph

(s)of this AD, and repeat the inspection thereafter in accordance with paragraph

(m)of this AD. Contacting the Manufacturer

(u)Where Boeing Alert Service Bulletin 747-53A2312, Revision 3, dated February 8, 2007 specifies to contact Boeing for appropriate action for a repair or inspection, before further flight, do the applicable action in paragraph (u)(1) or (u)(2) of this AD.

(1)Do the repair using a method approved in accordance with the procedures specified in paragraph

(v)of this AD.

(2)Do the inspection using a method approved by the Manager, Seattle Aircraft Certification Office (ACO), FAA. For a repair method to be approved by the Manager, Seattle ACO, as required by this paragraph, the Manager's approval letter must specifically refer to this AD. Alternative Methods of Compliance (AMOCs) (v)(1) The Manager, Seattle ACO, FAA, has the authority to approve AMOCs for this AD, if requested in accordance with the procedures found in 14 CFR 39.19.

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

(3)An AMOC that provides an acceptable level of safety shall be used for any repair required by this AD, if it is approved by an Authorized Representative for the Boeing Commercial Airplanes Delegation Option Authorization Organization who has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD.

(4)AMOCs approved previously in accordance with AD 94-15-06, are approved as AMOCs for the corresponding provisions of this AD if the AMOC does not involve using the existing sliding probe HFEC skin inspection method specified in Boeing Service Bulletin 747-53A2312, Revision 2, dated October 8, 1992, or an earlier version. In addition, the provisions of paragraph

(r)of this AD must be applied to AMOCs approved previously in accordance with AD 94-15-06, amendment 39-8977, where applicable. Issued in Renton, Washington, on October 5, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-20468 Filed 10-16-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-140206-06] RIN 1545-BF93 Withholding Procedures Under Section 1441 for Certain Distributions to Which Section 302 Applies AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking and notice of public hearing. SUMMARY: This document contains proposed regulations regarding a withholding agent's obligation to withhold and report tax under Chapter 3 of the Internal Revenue Code when there is a distribution in redemption of stock of a corporation that is actively traded on an established financial market. Specifically, the proposed regulations provide an escrow procedure that a withholding agent must apply while making the determination under section 302 as to whether the distribution in redemption of the stock held by a foreign shareholder is treated as a dividend subject to withholding, or a distribution in part or full payment in exchange for stock. These regulations would affect corporations that are actively traded on an established financial market and their shareholders. This document also provides a notice of public hearing on these proposed regulations. DATES: Written or electronic comments must be received by January 16, 2008. Outlines of topics to be discussed at the public hearing scheduled for February 6, 2008 at 10 a.m. must be received by January 16, 2008. ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-140206-06), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-140206-06), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC or sent electronically, via the Federal eRulemaking Portal at *www.regulations.gov* (IRS REG-140206-06). The public hearing will be held in room 2140, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Kathryn Holman,

(202)622-3440 (not a toll-free number); concerning submissions of comments, the hearing, and/or to be placed on the building access list to attend the hearing, e-mail *Richard.A.Hurst@irscounsel.treas.gov.* SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collections of information contained in this notice of proposed rulemaking have been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collections of information should be sent to the Office of Management and Budget, Attn: Desk Office for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by January 16, 2008. Comments are specifically requested concerning: Whether the proposed collection of information is necessary for the proper performance of the functions of the Internal Revenue Service, including whether the information will have practical utility; The accuracy of the estimated burden associated with the proposed collection of information; How the quality, utility, and clarity of the information to be collected may be enhanced; How the burden of complying with the proposed collections of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and Estimates of capital or start-up costs and costs of operation, maintenance and purchase of service to provide information. The collection of information in these proposed regulations is in § 1.1441-3(c)(5)(iii). This information is required to allow a U.S. financial institution that is applying the escrow procedure to properly comply with its withholding and reporting obligations under sections 1441, 1442 and 1443 in the case of a distribution made by a corporation with respect to its stock that is actively traded on an established financial market and that requires a determination under section 302 as to whether the distribution is treated as a dividend or a distribution in part or full payment in exchange for stock. The collection of information is mandatory and the respondents are nonresident aliens and foreign corporations. *Estimated total annual reporting burden:* 1400 hours. *The estimated annual burden per respondent:* 2 hours. *Estimated number of respondents:* 700. *Estimated annual frequency of responses:* 5 times. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential as required by 26 U.S.C. 6103. Background These proposed regulations, REG-140206-06, provide guidance regarding the withholding and reporting obligations of a withholding agent under Chapter 3 of the Internal Revenue Code

(Code)in the case of a distribution in redemption of the stock of a corporation that is actively traded on an established financial market within the meaning of § 1.1092(d)-1 (publicly traded). In general the proposed regulations contemplate a transaction where a publicly traded corporation offers to purchase stock from its shareholders (a self tender), where the amount of stock purchased and the shareholders involved in the transaction (the participating shareholders) depend on a number of factors, including each shareholder's willingness to sell some or all of its stock, and the terms set forth in the offer. The regulations would also apply to transactions described in section 304(a)(2). In the case of a self-tender, a corporation may purchase stock from some or all of its shareholders and, as a result, each participating shareholder's percentage ownership interest in the corporation may increase, decrease, or remain the same. Although the corporation's self tender offer is denominated as an offer to purchase shares, the tax consequences to the corporation and any participating shareholder of the payment to such a shareholder, as described in this preamble, depend on several factors. Further, where the participating shareholder is a foreign person, withholding under Chapter 3 of the Code may or may not be required. Sections 1441 and 1442 and § 1.1441-1(b)(1) generally require a person that makes a payment of an “amount subject to withholding” to a beneficial owner that is a foreign person to deduct and withhold 30 percent of the payment unless the payor can reliably associate the payment with documentation upon which the payor can rely to treat the payment as made to a beneficial owner that is a U.S. person or as made to a beneficial owner that is a foreign person entitled to a reduced rate of withholding under the Code, regulations or an income tax treaty. Section 1.1441-2(a) provides that the term *amounts subject to withholding* means amounts from sources within the United States that constitute fixed or determinable annual or periodical income

(FDAP)described in § 1.1441-2(b) or other amounts subject to withholding described in § 1.1441-2(c). Section 1.1441-2(b)(1) provides that FDAP includes all income described in section 61 of the Code, unless the item of income is described in § 1.1441-2(b)(2). Section 1.1441-2(b)(2)(i) generally excludes from FDAP gains derived from the sale of property. Thus, a distribution to a shareholder that is treated as gain from the sale of stock is excluded from FDAP. Further, to the extent a distribution is a return of capital, it is not gross income under section 61, and thus also is not FDAP. Section 302 provides rules for determining when a distribution in redemption of stock is treated as a distribution in part or full payment in exchange for stock. That section generally requires a comparison of a shareholder's overall interest in the corporation before the distribution and its overall interest in such corporation after the distribution. See section 302(b). In conducting the comparison, the constructive ownership rules of section 318 generally apply. If the shareholder's interest in the corporation has been sufficiently reduced, then the distribution is treated as a payment in exchange for the shareholder's stock under section 302(a). If the shareholder's interest in the corporation has not been sufficiently reduced, the tax consequences of the distribution are determined under section 301, and such distribution is a dividend to the shareholder to the extent the distribution is out of the distributing corporation's earnings and profits, then applied against and reduce the adjusted basis of the stock, and finally treated as gain from the sale or exchange of property. See section 301(c). When a publicly held corporation makes a distribution in redemption of its stock, a determination must be made under section 302 with respect to each shareholder as to whether the redemption is treated as a distribution of property to which section 301 applies (potentially constituting a dividend in whole or in part) or as a distribution in part or full payment in exchange for stock. However, the information necessary for each shareholder to make such a determination generally is not available until after the transaction is completed because the redemption of stock held by other shareholders must be taken into account. Further, because of the application of the constructive ownership rules of section 318, when a distribution is made to a foreign shareholder, a withholding agent will often not be in the best position to make a determination as to whether the distribution to the foreign shareholder should be treated as a payment in exchange for the shareholder's stock or a dividend. There are two revenue rulings that consider the issue of whether the interest of a shareholder in a publicly held corporation has been sufficiently reduced as a result of a distribution to effect exchange treatment under section 302(a). In Rev. Rul. 76-385, 1976-2 CB 92, See § 601.601(d)(2)(ii)( *b* ), the IRS ruled that a shareholder who actually and constructively owned 0.0001118% of a publicly traded corporation's stock before a redemption, but only constructively owned 0.0001081% after the redemption, had experienced a “meaningful reduction in proportionate interest” in the corporation under the principles of *United States* v. *Davis,* 397 U.S. 301 (1970), rehearing denied, 397 U.S. 107 (1970). The shareholder's interest in the corporation after the redemption therefore was approximately 96.7% of the shareholder's interest before the redemption, taking constructive ownership into account. Nevertheless, the reduction was considered meaningful, and so the distribution to the shareholder was treated as not essentially equivalent to a dividend under section 302(b)(1) and as a payment in exchange for the shareholder's stock under section 302(a). Consistent with Rev. Rul. 76-385, in Rev. Rul. 81-289, 1981-2 CB 82, See § 601.601(d)(2)(ii)( *b* ), the IRS ruled that a shareholder who owned 0.2% of the common stock of a publicly traded company before a redemption, and 0.2% of the common stock in the company after the redemption, did not satisfy the “meaningful reduction” standard of *United States* v. *Davis,* and that the redemption did not qualify for exchange treatment under section 302(a). Under the analysis adopted in these revenue rulings, each minority shareholder who participates in a self tender must compute its percentage ownership of the total outstanding stock of the corporation before and after the transaction. If after the transaction the shareholder's percentage ownership is less than it was before the transaction, the shareholder generally has experienced a “meaningful reduction” in the shareholder's proportionate interest in the corporation, and the transaction, at least with respect to that shareholder, is considered a distribution in exchange for the stock under section 302(a) and not a distribution of property to which section 301 applies. This result occurs even if another participating shareholder in the same self tender experiences no change or an increase in its percentage ownership of the corporation, and, therefore, is considered to receive a distribution of property to which section 301 applies. See also section 302(b)(2), (3), and (4). Section 1.1441-3(c) requires a corporation making a distribution with respect to its stock to a foreign shareholder, as well as any intermediary (such as a broker) making a payment of such a distribution, to withhold on the entire amount of the distribution, unless it elects to reduce the amount of withholding under § 1.1441-3(c). Section 1.1441-3(c)(2)(i)(B) provides that a distributing corporation or intermediary may elect to not withhold on a distribution to the extent it represents a distribution in part or full payment in exchange for stock. Section 1.1441-3(c)(2)(i) provides that a corporation or intermediary makes the election by reducing the amount of withholding at the time that the payment is made. However, a withholding agent cannot avail itself of this election unless it knows the extent to which a distribution represents a payment in exchange for stock under section 302(a). As previously noted, in the context of a distribution in redemption of stock held in a publicly traded corporation, the withholding agent generally will not have this information unless, at the time of the redemption, it has obtained information from each participating shareholder regarding actual and constructive ownership of stock for purposes of the foregoing analysis. The Treasury Department and the IRS are aware that, in the context of transactions involving distributions in redemption of stock held by foreign persons where such stock is actively traded on an established financial market, the means of compliance with sections 1441, 1442, and 1443 is varied. The Treasury Department and the IRS believe that the discretion permitted by the current regulations, and the resulting different treatment of similar transactions is not appropriate. Accordingly, these proposed regulations provide the procedure (“escrow procedure”) to be followed by U.S. withholding agents to satisfy the withholding, reporting and deposit requirements of the regulations under sections 1441, 1442, and 1443 with respect to any payment of a corporate distribution in redemption of stock made to a foreign account holder with respect to certain self tenders. Explanation of Provisions The proposed regulations set forth an escrow procedure for withholding agents to follow in the case of a payment made after December 31, 2008 of a corporate distribution in redemption of stock that is actively traded on an established financial market within the meaning of § 1.1092(d)-1 (section 302 payment). In general, the proposed regulations require a U.S. financial institution (withholding agent) to set aside in an escrow account 30 percent (or the applicable dividend rate provided under a treaty) of the amount of the section 302 payment. The withholding agent is then required to provide information to the foreign beneficial owner regarding the distribution, including the total number of the distributing corporation's shares outstanding before and after the distribution. The withholding agent must also provide a written statement explaining the conditions under which the section 302 payment will be treated as a dividend or a payment in exchange for stock (including an explanation of the constructive ownership rules under section 318). In the written explanation provided to the foreign beneficial owner, the withholding agent must request that the beneficial owner provide a written certification to the withholding agent within 60 days as to whether the distribution is either a dividend or a payment in exchange for stock. The certification to be provided by the foreign beneficial owner must contain, among other requirements, the beneficial owner's name and account number, a certification that the distribution is a payment in exchange for stock or is a dividend, and the number of shares actually and constructively owned by the beneficial owner before and after the distribution. The beneficial owner's certification must be signed under penalties of perjury. A withholding agent may generally rely on a certification received from a foreign beneficial owner in determining its section 1441 obligations with respect to payments for such beneficial owner's stock. However, if the withholding agent knows or has reason to know that the certification is unreliable or incorrect, or the withholding agent does not receive a certification from a foreign beneficial owner, the withholding agent is required to treat the amount set aside in escrow as tax withheld on the 61st day, and deposit that amount pursuant to the applicable regulations. Although a qualified intermediary

(QI)may, and a withholding foreign partnership and a withholding foreign trust (WP/WT) must, assume primary withholding responsibility under section 1441 and receive payments without any withholding by the U.S. financial institution, under the proposed regulations, in the case of a section 302 payment, the QI or WP/WT cannot assume primary withholding responsibility and receive the payment in gross. The QI or WP/WT must apply the procedure described in this preamble and provide the U.S. financial institution with a withholding statement that details the appropriate rate of withholding and information reporting for amounts paid to the QI or WP/WT. In addition, if there is a chain of QIs or WPs/WTs this procedure must be followed at each level in the chain. The U.S. financial institution shall treat beneficial owners that are U.S. non-exempt recipients, and that hold stock in the distributing corporation through QIs, WPs/WTs, NQIs and flow-throughs, in accordance with the section 302 payment certifications obtained from those U.S. non-exempt recipients and shall instruct foreign intermediaries and foreign flow-through entities to do the same. These proposed regulations would apply for redemptions of stock that are made after December 31, 2008. However, a withholding agent may, at its option, rely on these proposed regulations for a redemption of stock that occurs before January 1, 2009. The Treasury Department and the IRS are aware that withholding agents serve various customer bases: some may maintain accounts for a small number of account holders, others may maintain accounts for a much greater number of account holders. Comments are requested on alternatives to the escrow procedure described in this proposed regulation for withholding agents that maintain accounts for large numbers of customers. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. These regulations impose a collection of information on small entities, and the Regulatory Flexibility Act (5 U.S.C. chapter 6) applies. This rule regulates securities brokerages that have foreign customers that respond to a tender offer by a U.S. publicly traded corporation to purchase some of its stock from its shareholders. The Small Business Administration

(SBA)has established size standards for types of economic activities which are classified based on the North American Industry Classification Codes (NAICS). The regulations specifying size standards are set forth in Title 13, Code of Federal Regulations, part 121 (13 CFR part 121), Small Business Size Regulations. The NAICS Code for a small securities brokerage is specified at 13 CFR 121.201. Pursuant to subsector 523120 of the NAICS, a small securities brokerage is one with receipts of less than 6.5 million dollars. According to NAICS 523120, U.S. Census Bureau, Statistics of U.S. Business (2002), there are a total of 7,886 securities brokerages of which 7,113 generate revenue less than $5 million and 224 generate revenue between $5 million and $10 million. It is estimated that 7,213 of the securities brokerages are considered small businesses. The IRS requests information regarding the number of transactions these small securities brokerages engage in each year involving self tenders by public corporations. In the case of a tender offer by a publicly held corporation, it is estimated that a brokerage clerk would spend two hours preparing the paperwork and verifying the computations required to accurately withhold with respect to foreign customers. According to the Bureau of Labor Statistics, the mean hourly wage of a brokerage clerk is $18.34, so it is estimated that it will cost a small securities brokerage $36.68 per transaction. This cost is not significant when compared to the annual revenue of the small securities brokerage. Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605, the Chief Counsel certifies that this rule will not have a significant economic impact on a substantial number of small entities. The IRS invites specific comments on the economic impact of compliance from members of the public who believe there will be a significant economic impact on small businesses that are regulated by this rule. Pursuant to section 7805(f) of the Internal Revenue Code, this regulation has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight

(8)copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing has been scheduled for February 6, 2008, beginning at 10 a.m. in room 2140 of the Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Due to building security procedures, visitors must enter at the 12th street entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit electronic or written comments, and an outline of the topics to be discussed, and the time to be devoted to each topic (signed original and eight

(8)copies) by January 16, 2008. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing. Drafting Information The principal author of these proposed regulations is Kathryn Holman, Office of Associate Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is proposed to be amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.1441-3 is amended as follows: 1. A sentence is added at the end of paragraph (c)(2)(i)(B). 2. Paragraph (c)(5) is added. 3. A sentence is added at the end of paragraph (d)(1). The additions read as follows. § 1.1441-3 Determination of amounts to be withheld.

(c)* * *

(2)* * *

(i)* * *

(B)* * * The preceding sentence shall not apply to a public section 302 distribution to which paragraph (c)(5) applies.

(5)*Special rules for certain distributions to which section 302 applies—*

(i)* Withholding responsibility * —(A) *General rule.* A corporation that makes a public section 302 distribution, or any intermediary (described in § 1.1441-1(c)(13)) making a payment of such a distribution, is required to withhold under section 1441, 1442 or 1443 on the entire amount of the distribution unless the provisions of paragraph (c)(5)(iii) of this section have been applied. The provisions of paragraph (c)(2)(i)(B) or (d)(1) of this section do not apply to a public section 302 distribution.

(B)*Effective/applicability date.* The rules of this paragraph (c)(5) apply to public section 302 distributions made after December 31, 2008.

(ii)*Definitions.* Solely for purposes of this paragraph (c)(5), the following definitions shall apply:

(A)*Public section 302 distribution* means a distribution by a corporation in redemption of its stock for which there is an established financial market within the meaning of § 1.1092(d)-1.

(B)*Section 302 payment* means payment of a public section 302 distribution.

(C)*Distributing corporation* means a corporation making or treated as making a public section 302 distribution.

(iii)*Escrow procedure* —(A) *Application* —( *1* ) *In general.* The escrow procedure in this paragraph (c)(5)(iii) may be applied only by an intermediary (described in § 1.1441-1(c)(13)) that is a U.S. financial institution. A U.S. financial institution making a section 302 payment to a foreign account holder, and applying this escrow procedure, is not required to withhold on the entire amount of a section 302 payment under the general rule of paragraph (c)(5)(i).

(B)*Escrow account* —( *1* ) *In general.* A U.S. financial institution shall set aside in an escrow account on the date it receives a section 302 payment from a distributing corporation with respect to stock of a foreign account holder 30 percent (or the applicable dividend rate provided by a tax treaty for a qualifying foreign account holder) of the amount and shall credit the foreign account holder's account with the balance of the section 302 payment. ( *2* ) Qualified intermediaries. The amount set aside, under paragraph (c)(5)(iii)(B)( *1* ) of this section shall include 30 percent (or the applicable dividend rate provided by a treaty) of the amount paid to any qualified intermediary

(QI)(whether or not the QI has assumed primary withholding responsibility) and to any withholding foreign partnership or withholding foreign trust (WP/WT).

(C)*Request for section 302 payment certification.* On or before the date it receives the section 302 payment, the U.S. financial institution shall provide the following information and instructions, in writing, to the foreign beneficial owner— ( *1* ) The total number of distributing corporation's shares outstanding before and after the public section 302 distribution; ( *2* ) An explanation of the conditions under which the section 302 payment will be treated as a dividend or a payment in exchange for stock for Federal income tax purposes (including an explanation of any applicable constructive ownership rules); and ( *3* ) A request that the beneficial owner of the account provide a certification (section 302 payment certification), within 60 days of the section 302 payment, stating whether the section 302 payment is either a dividend or a payment in exchange for stock under the Internal Revenue Code.

(D)*Content of section 302 payment certification.* The section 302 payment certification must include the following information: ( *1* ) The beneficial owner's name and account number. ( *2* ) The distributing corporation's name. ( *3* ) The total shares of the distributing corporation outstanding immediately before and immediately after the public section 302 distribution. ( *4* ) A certification from the beneficial owner that either— ( *i* ) The section 302 payment is a payment in exchange for stock because the beneficial owner's proportionate interest has been reduced but not completely terminated; ( *ii* ) The section 302 payment is a payment in exchange for stock because the beneficial owner's interest in the distributing corporation is completely terminated; or ( *iii* ) The section 302 payment is a dividend. ( *5* ) With respect to the certifications in paragraph (c)(5)(iii)(D)( *4* )( *i* ) and ( *ii* ) of this section, the number of shares actually and constructively owned by the beneficial owner before and after the distribution and the beneficial owner's percentage ownership before and after the distribution. ( *6* ) A penalties of perjury statement. ( *7* ) The signature of the beneficial owner and date of signature.

(E)*Receipt of section 302 payment certification* —( *1* ) *Payment in exchange for stock.* If, within the 60-day period described in paragraph (c)(5)(iii)(C)( *3* ), the U.S. financial institution receives from the foreign beneficial owner a section 302 payment certification stating that the section 302 payment is a payment in exchange for stock, and if the U.S. financial institution does not know or have reason to know that the information in the section 302 payment certification is unreliable or incorrect, the U.S. financial institution shall credit the account with the amount set aside with respect to the beneficial owner who provides the certification. The entire amount paid (including the amount initially set aside) shall be reported as capital gains on Form 1042-S Foreign Person's U.S. Source Income Subject to Withholding. ( *2* ) *Unreliable or incorrect exchange certification.* If the U.S. financial institution knows or has reason to know that the information in the section 302 payment certification is unreliable or incorrect, the U.S. financial institution shall treat the payment as a payment for which no section 302 payment certification has been received and shall follow the withholding and reporting procedures in paragraph (c)(5)(iii)(E)( *4* ) of this section. ( *3* ) *Dividend.* If, within the 60-day period, the U.S. financial institution receives a section 302 payment certification from the foreign beneficial owner stating that the section 302 payment is a dividend, the U.S. financial institution shall treat the amount set aside as tax withheld as of the time it receives the section 302 payment certification, and shall deposit that amount pursuant to the applicable regulations. The entire amount paid shall be reported on Form 1042-S as dividends. ( *4* ) *No timely certification received.* If, within the 60-day period, the U.S. financial institution does not receive a section 302 payment certification, or is treated under paragraph (c)(5)(iii)(E)( *2* ) of this section as not receiving a section 302 payment certification, the U.S. financial institution shall treat the amount set aside as tax withheld as of the 61st day, and shall deposit that amount pursuant to the applicable regulations. The entire amount paid shall be reported on Form 1042-S as dividends. ( *5* ) *Late certification.* If, after the 60-day period has expired, the U.S. financial institution receives a section 302 payment certification from a foreign beneficial owner that the section 302 payment is a payment in exchange for stock and the conditions stated in § 1.1461-2(a) are satisfied, the U.S. financial institution may apply the refund or offset procedures of that paragraph. ( *6* ) *Determination of incorrect treatment.* If, after the 60-day period has expired, the U.S. financial institution determines that the section 302 payment was incorrectly treated as a distribution in exchange for stock, the procedures set forth regarding underwithholding in § 1.1461-2(b) are applicable. ( *7* ) *Undocumented beneficial owners.* The U.S. financial institution shall withhold at 30 percent on the entire amount paid to a beneficial owner that is not properly documented under §§ 1.1441-1, 1.1441-5, etc. and that is presumed to be a foreign person, whether or not the U.S. financial institution has received a section 302 payment certification from such beneficial owner. The U.S. financial institution shall report the entire amount paid on Form 1042-S as dividends.

(F)*Amounts in excess of section 302 payment.* If the amount the U.S. financial institution credits to the account of the foreign beneficial owner from the escrow account includes an amount in excess of the section 302 payment, such as interest accrued on the escrowed funds, the U.S. financial institution shall report and withhold on such excess amount in accordance with the rules under Chapter 3 of the Internal Revenue Code.

(G)*U.S. non-exempt recipients.* The U.S. financial institution shall treat beneficial owners that are U.S. non-exempt recipients, and that hold stock in the distributing corporation through QIs, WPs/WTs, NQIs and flow-throughs, in accordance with the section 302 payment certifications obtained from those U.S. non-exempt recipients and shall instruct foreign intermediaries and foreign flow-through entities to do the same.

(H)*Notice to distributing corporation.* The U.S. financial institution shall notify the distributing corporation, in writing, by the filing date of Form 1042-S, of the aggregate amount of the section 302 payment that the U.S. financial institution has reported on Forms 1042-S as capital gains, and the aggregate amount of the section 302 payment that it has reported on Forms 1042-S as dividends.

(I)*Application of Escrow Procedure to Qualified Intermediaries.* As provided in paragraph (c)(5)(iii)(A) of this section, only the U.S. financial institution may establish an escrow account and the amounts set aside in the escrow account shall include 30 percent (or the applicable treaty rate applicable to dividends) on payments made to a direct account holder that is a QI (including a QI that has assumed primary withholding responsibility). Under the procedure described in paragraph (c)(5)(iii)(I)( *3* ), a QI shall provide the U.S. financial institution with a withholding statement as required in the QI Agreement. If there is a chain of QIs, each QI in the chain shall apply the procedure. The procedures described in this paragraph

(I)shall be applied to withholding foreign partnerships and withholding foreign trusts within the meaning of §§ 1.1441-5(c)(2) and (e)(5)(v), respectively, in the same manner as the procedures apply to a QI. ( *1* ) *Request for section 302 payment certification.* The U.S. financial institution shall provide the information and instructions described in paragraph (c)(5)(iii)(C) of this section to the QI, and the QI shall provide the same information and instructions to its account holders including account holders that are U.S. non-exempt recipients. ( *2* ) *Content of section 302 payment certification.* The content of the section 302 payment certification shall include the information described in paragraph (c)(5)(iii)(D) of this section. ( *3* ) *Receipt of section 302 payment certification—* ( *i* ) Payment in exchange for stock. If, within the 60-day period described in paragraph (c)(5)(iii)(C), the QI receives from the beneficial owner a section 302 payment certification stating that the section 302 payment is a payment in exchange for stock and if the QI does not know or have reason to know that the information in the section 302 payment certification is unreliable or incorrect, the QI shall reflect such treatment in its withholding statement provided to the U.S. financial institution, and, based upon the withholding statement, the U.S. financial institution shall release payment from its escrow and the QI shall credit the beneficial owner's account with the amount set aside by the U.S. financial institution with respect to the beneficial owner who provided the certification. The entire amount paid (including the amount initially set aside) shall be reported on the QI's pooled basis Form 1042-S as capital gains. ( *ii* ) *Unreliable or incorrect exchange certification.* If the QI knows or has reason to know that the information in the section 302 payment certification is unreliable or incorrect, the QI shall treat the payment as a payment for which no section 302 payment certification has been received and shall follow the withholding and reporting procedures in paragraph (c)(5)(iii)(I)( *3* )( *iv* ) of this section. ( *iii* ) *Dividend.* If, within the 60-day period, QI receives a section 302 payment certification stating that the section 302 payment is a dividend, the QI shall reflect such treatment in its withholding statement and shall treat the payment as a dividend for purposes of its reporting and withholding responsibilities under the QI agreement. The entire amount paid shall be reported on its pooled basis Form 1042-S as dividends. ( *iv* ) *No timely certification received.* If, within the 60-day period, the QI does not receive a section 302 payment certification, or is treated under paragraph (c)(5)(iii)(I)( *3* )( *ii* ) of this section as not receiving a section 302 payment certification, the QI shall reflect such treatment in its withholding statement provided to the U.S. financial institution and shall treat the payment as a dividend for purposes of its reporting and withholding responsibilities under the QI agreement. The entire amount paid shall be reported on its pooled basis Form 1042-S as dividends. ( *v* ) *Late certification.* If, after the 60-day period has expired, the QI receives a section 302 payment certification from a beneficial owner that the section 302 payment is a payment in exchange for stock and the conditions stated in the QI agreement regarding the refund and offset procedures are satisfied, the QI may apply such refund or offset procedures. ( *vi* ) *Determination of incorrect treatment.* If, after the 60-day period has expired, the QI determines that the section 302 payment was incorrectly treated as a distribution in exchange for stock, the procedures set forth regarding adjustments for underwithholding in the QI agreement are applicable. ( *vii* ) *Undocumented beneficial owners.* The QI shall withhold at 30 percent on the entire amount paid to a beneficial owner that is not properly documented and that is presumed to be a foreign person, whether or not the QI has received a section 302 payment certification from such beneficial owner. The QI shall report the entire amount paid on its pooled basis Form 1042-S as dividends. ( *4* ) *U.S. non-exempt recipients.* The QI shall treat direct account holders that are U.S. non-exempt recipients, and that hold stock in the distributing corporation, in accordance with the section 302 payment certifications obtained from those U.S. non-exempt recipients and shall instruct foreign intermediaries and foreign flow-through entities to do the same.

(J)*Intermediaries that are not qualified intermediaries.* If the U.S. financial institution has an account holder that is an intermediary that is not a QI (“NQI”), the U.S. financial institution shall apply the rules of paragraph (c)(5)(iii)(J)( *1* ) through ( *4* ) of this section. Where the provisions of this paragraph

(J)refer only to the U.S. financial institution, they shall apply in the same manner to a QI or WP/WT and where they refer to an NQI, they shall apply in the same manner to a flow-through that is not a WP or WT. ( *1* ) The U.S. financial institution shall provide the information and instructions described in paragraph (c)(5)(iii)(C) of this section to the NQI and the NQI shall provide the same information and instructions to its account holders. ( *2* ) The content of the section 302 payment certification shall include the information described in paragraph (c)(5)(iii)(D) of this section. ( *3* ) The NQI shall provide the section 302 payment certification to the U.S. financial institution together with the otherwise required documentation and a withholding statement made in accordance with the section 302 payment certification. ( *4* ) The U.S. financial institution shall treat the section 302 payment as a dividend or a payment in exchange for stock based on the information and documentation provided to it under paragraph (c)(5)(iii)(J)( *3* ) of this section. The U.S. financial institution shall withhold and report on a specific payee basis in accordance with this information.

(d)* * *

(1)* * * This paragraph does not apply to a public section 302 distribution to which paragraph (c)(5) applies. Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-20504 Filed 10-16-07; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-114125-07] RIN 1545-BG57 Compensation for Labor or Personal Services: Artists and Athletes AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking. SUMMARY: This document contains proposed changes to existing final regulations regarding the source of compensation for labor or personal services. The proposed changes are needed to clarify the determination of source of compensation of a person, including an artist or athlete, who is compensated for labor or personal services performed at specific events. These proposed regulations affect such an individual. DATES: Written or electronic comments and requests for a public hearing must be received by January 15, 2008. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-114125-07), room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-114125-07), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at *http://www.regulations.gov* (IRS-REG-114125-07). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, David Bergkuist at

(202)622-3850; concerning the submissions of comments and requests for a hearing, Regina Johnson at

(202)622-7180 (not toll free numbers). SUPPLEMENTARY INFORMATION: Background This document contains proposed amendments under 26 CFR part 1 under section 861 of the Internal Revenue Code (Code). On July 14, 2005, final regulations that revised and amended § 1.861-4 were published in the **Federal Register** (70 FR 40663) as TD 9212. In these final regulations, § 1.861-4(b)(2)(ii)(C)( *3* ) was reserved with respect to compensation for labor or personal services performed partly within and partly without the United States by an artist or an athlete who is an employee. Section 861(a)(3) of the Internal Revenue Code provides that, subject to certain exceptions, compensation for labor or personal services performed in the United States is gross income from sources within the United States. See also § 1.861-4(a) of the regulations. Section 862(a)(3) of the Code provides that compensation for labor or personal services performed without the United States is gross income from sources without the United States. Section 1.861-4(b) provides rules for determining the source of compensation for labor or personal services performed partly within and partly without the United States. Section 1.861-4(b)(2)(i) provides rules for determining the source of compensation for labor or personal services performed partly within and partly without the United States by an individual other than as an employee. Section 1.861-4(b)(2)(ii) provides rules for determining the source of compensation for labor or personal services performed partly within and partly without the United States by an individual as an employee. Under § 1.861-4(b)(2)(ii), if an individual performs labor or personal services as an employee, the source of the individual's compensation is generally determined on a time basis, with certain fringe benefits sourced on a geographic basis. An individual may determine the source of his or her compensation as an employee for labor or personal services performed partly within and partly without the United States under an alternative basis if the individual establishes to the satisfaction of the Commissioner that, under the facts and circumstances of the particular case, the alternative basis more properly determines the source of the compensation than the general rules of § 1.861-4(b)(2)(ii). See § 1.861-4(b)(2)(ii)(C)( *1* )( *i* ). In addition, the Commissioner may, under the facts and circumstances of the particular case, determine the source of compensation that is received by an individual as an employee under an alternative basis if such compensation is not for a specific time period, provided that the Commissioner's alternative basis determines the source of compensation in a more reasonable manner than the basis used by the individual. The final regulations at § 1.861-4(b)(2)(ii)(C)( *3* ) provided a reservation with respect to the source of compensation for labor or personal services performed partly within and partly without the United States by an artist or athlete who is an employee. The preamble of TD 9212 indicated that it was intended that the rule for artists and athletes who are employees, when issued, would require such individuals to determine the proper source of their compensation for labor or personal services on the basis that most correctly reflects the proper source of income under the facts and circumstances of the particular case, consistent with current law. Explanation of Provisions The proposed regulations would set forth a new “events basis” rule in § 1.861-4(b)(2)(ii)(G) and make certain other clarifying changes to the existing final regulations. The proposed regulations also would remove § 1.861-4(b)(2)(ii)(C)( *3* ), which reserved with respect to artists and athletes. The amount of income received by a person, including an individual who is an artist or an athlete, that is properly treated as compensation from the performance of labor or personal services is determined based on all of the facts and circumstances of the particular case. Proposed § 1.861-4(b)(2)(ii)(G) specifies that the amount of compensation for labor or personal services determined on an event basis is the amount of the person's compensation which, based on the facts and circumstances, is attributable to the labor or personal services performed at the location of a specific event. The IRS and the Treasury Department have determined that the proper source of compensation received by a person, including an individual who is an artist or athlete, specifically for performing labor or personal services at an event is the location of the event. A basis that purports to determine the source of compensation from the performance of labor or personal services at a specific event, whether on a time basis or otherwise, by taking into account the location of labor or personal services performed in preparation for the performance of labor or personal services at the specific event will generally not be the basis that most correctly determines the source of the compensation. This rule applies to situations covered by § 1.861-4(a) and (b). Under § 1.861-4(a), the source of compensation for labor or personal services performed wholly within the United States is generally from sources within the United States. Therefore, if a person, including an individual who is an artist or an athlete, is specifically compensated for performing labor or personal services at an event in the United States, the source of such compensation is wholly within the United States because the labor or personal services were performed wholly at an event within the United States. The proposed regulations state that a basis that purports to determine the source of such income on a time basis by taking into account the location of labor or personal services performed in preparation for the performance of labor or personal services at the specific event will generally not be a more reasonable basis for determining source of the compensation. The proposed regulations add an example to § 1.861-4(c) to illustrate the application of this rule. Section 1.861-4(b) applies to instances in which a person is compensated for performing labor or personal services at multiple events, only some of which are within the United States, and at least a portion of the person's compensation cannot be specifically attributed to the person's performance of labor or personal services at a specific location. If the person is not an individual who is compensated as an employee, the source of compensation for labor or personal services is determined on the basis that most correctly reflects the proper source of that income under the facts and circumstances of the particular case. See § 1.861-4(b)(1) and (2)(i). If a person is compensated specifically for labor or personal services performed at multiple events, the basis that most correctly reflects the proper source of that income under the facts and circumstances of the particular case will generally be the location of the events. In addition, a basis that purports to determine the source of such income on a time basis by taking into account the location of labor or personal services performed in preparation for the performance of labor or personal services at the specific event will generally not be the basis that most correctly reflects the proper source of the compensation under proposed § 1.861-4(b)(2)(ii)(G). The Commissioner may, under the facts and circumstances of the particular case, determine the source of compensation that is received by an individual as an employee under an alternative basis if such compensation is not for a specific time period, provided that the Commissioner's alternative basis determines the source of compensation in a more reasonable manner than the basis used by the individual. Compensation specifically for labor or personal services performed at a specific event is not compensation for a specific time period. The basis that most correctly reflects the proper source of that income will generally be the location of the event under proposed § 1.861-4(b)(2)(ii)(G). In addition, a basis that purports to determine the source of such income on a facts and circumstances basis by taking into account the location of labor or personal services performed in preparation for the performance of labor or personal services at the specific event will generally not more properly determine the source of the compensation under proposed § 1.861-4(b)(2)(ii)(G). These proposed regulations provide examples to illustrate the event basis for determining the source of compensation of an individual, including an artist or athlete, who is compensated specifically for performing labor or personal services at an event. The revisions to § 1.861-4(b)(1), (b)(2)(i), and (b)(ii)(C)( *1* )( *i* ) and ( *ii* ) which refer to the event basis; the revisions in § 1.861-4(b)(2)(ii)(C)( *3* ), (b)(2)(ii)(E), and (b)(2)(ii)(F), (b)(2)(ii)(G), and (c); and new *Examples 7* through *11* of § 1.861-4(c) would be effective for taxable years beginning after the date final regulations are published in the **Federal Register** . Special Analysis It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Because these regulations do not impose a collection of information on small entities, the provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Comments and Requests for a Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight

(8)copies) or electronic comment that is submitted timely to the IRS. The Treasury Department and the IRS request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for a public hearing will be published in the **Federal Register** . Drafting Information The principal author of these proposed regulations is David Bergkuist, Office of the Associate Chief Counsel (International). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is proposed to be amended as follows: PART 1—INCOME TAXES **Paragraph 1.** The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 7805 * * * **Par. 2.** Section 1.861-4 is amended by: 1. Removing the heading for paragraph (b)(1)(i). 2. Redesignating paragraph (b)(1)(i) as paragraph (b)(1). 3. In the last sentence of newly designated paragraph (b)(1), adding the language “or on the event basis as defined in paragraph (b)(2)(ii)(G) of this section,” after the language “paragraph (b)(2)(ii)(E) of this section,”. 4. In the last sentence of paragraph (b)(2)(i), adding the language “or on the event basis as defined in paragraph (b)(2)(ii)(G) of this section,” after the language “paragraph (b)(2)(ii)(E) of this section,”. 5. In the first sentence of paragraph (b)(2)(ii)(C)( *1* )( *i* ), adding the language “, including an event basis as defined in paragraph (b)(2)(ii)(G) of this section,” after the language “alternative basis” wherever the language “alternative basis” appears in the sentence. 6. In the first sentence of paragraph (b)(2)(ii)(C)( *1* )( *ii* ), adding the language “event basis as defined in paragraph (b)(2)(ii)(G) of this section or other” after the language “partly without the United States under an”. 7. Removing paragraph (b)(2)(ii)(C)( *3* ). 8. In the first sentence of paragraph (b)(2)(ii)(E), removing the language “individual's” and adding the language “person's” in its place, removing the language “individual” and adding the language “person” in its place, and removing the language “his or hers” and adding the language “such person's” in its place. 9. In the second sentence of paragraph (b)(2)(ii)(F), removing the language “an individual” and adding the language “a person” in its place. 10. Redesignating paragraphs

(c)and

(d)as new paragraphs

(d)and (e), respectively. 11. Redesignating paragraph (b)(2)(ii)(G) as new paragraph (c). 12. Adding a new paragraph (b)(2)(ii)(G). 13. In the introductory language of newly-designated paragraph (c), removing the language “paragraph (b)(2)(ii)” and adding the language “section” in its place. 14. Adding new *Examples 7, 8, 9, and 10* to newly-designated paragraph (c). 15. Redesignating paragraph (b)(1)(ii) *Example* , as new *Example 11* in newly-designated paragraph (c), revising the paragraph heading and removing paragraph (b)(1)(ii). 16. Adding a new sentence at the end of newly-designated paragraph

(e)and revising the paragraph heading. The additions read as follows: § 1.861-4 Compensation for labor or personal services.

(b)* * *

(2)* * *

(ii)* * *

(G)*Event basis.* The amount of compensation for labor or personal services determined on an event basis is the amount of the person's compensation which, based on the facts and circumstances, is attributable to the labor or personal services performed at the location of a specific event. The source of compensation for labor or personal services determined on an event basis is the location of the specific event. A basis that purports to determine the source of compensation from the performance of labor or personal services at a specific event, whether on a time basis or otherwise, by taking into account the location of labor or personal services performed in preparation for the performance of labor or personal services at the specific event will generally not be the basis that most correctly determines the source of the compensation.

(c)*Examples.* * * * Example 7. P, a citizen and resident of Country A, is paid by Company Z to make a presentation in the United States in 2009. In 2010, Company Z pays P to make 10 presentations, four of which are in the United States and six of which are outside the United States. P is compensated separately by Company Z for each presentation. For some presentations P receives a flat fee from Company Z. For the remaining presentations P receives compensation that is based on a formula. Under the facts and circumstances of the particular case, the source of the compensation for each presentation is most correctly reflected on an event basis, as defined in paragraph (b)(2)(ii)(G) of this section. Because P is compensated separately for each presentation, the source of P's compensation from Company Z for the 2009 presentation within the United States and the four 2010 presentations in the United States will be from sources in the United States. The amounts will be determined based on the flat fee or the formula as contractually determined. Example 8.

(i)*Facts.* Group B, a Country N corporation, is a musical group. All of the members of Group B are citizens and residents of Country N. Group B has an employment arrangement with Corp Y, a Country N corporation, to perform as directed by Corp Y. Corp Y and a tour promoter enter into a contract to provide the services of Group B to perform in musical concerts in the United States and Country M during a 45-day period. Under the contract, Group B performs concerts in 15 cities, 10 of which are in the United States. Prior to entering the United States, Group B spends 60 days rehearsing and preparing in Country N. Under the contract with Corp Y, Group B receives a flat fee of $10,000,000 for performing in all 15 cities. The fee is based on expected revenues from the musical concerts. Each concert is expected to require a similar amount and type of labor or personal services by Group B. At the end of the tour, an analysis of the revenues from all of the concerts shows that 80% of the total revenues from the tour were from the performances within the United States.

(ii)*Analysis.* Under the facts and circumstances basis of paragraph (b)(1) of this section, the source of the compensation received under the contract is most correctly reflected on an event basis, as defined in paragraph (b)(2)(ii)(G) of this section, with amounts determined based on the relative gross receipts attributable to the performances within and without the United States. Thus, of the $10,000,000 of compensation included in Group B's gross income, $8,000,000 ($10,000,000 × .80) is attributable to labor or personal services performed by Group B within the United States and $2,000,000 ($10,000,000 × .20) is attributable to the labor or personal services performed by Group B without the United States. Example 9.

(i)*Facts.* A, a citizen and resident of Country M, is an employee of Corp X, a Country M corporation. During 2008, Corp X is contractually obligated to provide A's services to perform in a specific athletic event in the United States. Under A's employment contract with Corp X, A is required to perform at a professional level that requires training and other preparation prior to the event. A undertakes all of this preparation in Country M. Solely as a result of A's performance at the athletic event in the United States, A receives $2,000,000 from Corp X.

(ii)*Analysis.* The entire $2,000,000 received by A for performing labor or personal services at the athletic event in the United States is income from sources within the United States on an event basis as defined in paragraph (b)(2)(ii)(G) of this section. A's compensation is attributable entirely to labor or personal services performed within the United States at the athletic event. It is inappropriate to conclude that the source of A's compensation for labor or personal services is performed partly within and partly without the United States simply because A's preparation for the athletic event involved activities in Country M. Example 10.

(i)*Facts.* X, a citizen and resident of Country M, is employed under a standard player's contract by a professional sports team

(Team)that plays its games both within and without the United States during its season. The term of the contract is for twelve months beginning on October 1. Under the contract, X's salary could be paid in semi-monthly installments beginning with the first game of the regular season and ending with the final game played by the Team. Alternatively, because the regular playing season was shorter than the one-year period covered by the contract, X had the option to receive his salary over a twelve-month period. X elected this option. In addition, during the period of this employment contract, X, as an employee of Team, was required to practice at the direction of the Team as well as to participate in games. During 2008, X participated in all practices and games of Team and received a salary. Team qualified for postseason games in 2008. X also received in 2008 additional amounts for playing in preseason and postseason games for the Team.

(ii)*Analysis.* The salary paid to X by the Team is considered to be personal services compensation of X that X received as an employee of the Team. The source of this compensation within the United States is determined under the time basis method described in paragraph (b)(2)(ii)(A) of this section and accordingly is determined based upon the number of days X performed services for the Team within the United States during 2008 over the total number of days that X performed services for the Team during 2008. The source of the additional amounts X received for playing in preseason and postseason games is determined under the event basis method described in paragraph (b)(2)(ii)(G) of this section and accordingly is determined based on the location where each such preseason or postseason game was played. Example 11. * * *

(e)*Effective/applicability date.* * * * The revisions in paragraphs (b)(1), (b)(2)(i), and (b)(2)(ii)(C)( *1* )( *i* ) and ( *ii* ) of this section which refer to the event basis; the revisions of paragraphs (b)(2)(ii)(C)(3), (b)(2)(ii)(E), (b)(2)(ii)(F), (b)(2)(ii)(G), and

(c)of this section; and *Examples 7* through *11* of paragraph

(c)of this section apply to taxable years beginning after the date final regulations are published in the **Federal Register** . Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E7-20496 Filed 10-16-07; 8:45 am] BILLING CODE 4830-01-P FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION 29 CFR Part 2702 Freedom of Information Act Procedural Rules AGENCY: Federal Mine Safety and Health Review Commission. ACTION: Proposed rule. SUMMARY: The Federal Mine Safety and Health Review Commission (the “Commission”) is an independent adjudicatory agency that provides hearings and appellate review of cases arising under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). Hearings are held before the Commission's Administrative Law Judges, and appellate review is provided by a five-member Review Commission appointed by the President and confirmed by the Senate. The Commission is proposing to revise its rules implementing the Freedom of Information Act (“FOIA”) in light of its experience under the rules, the need to update its fee schedules, and changes in implementing the FOIA mandated by Executive Order 13,392. DATES: Comments must be submitted on or before November 16, 2007. ADDRESSES: Comments and questions may be mailed to Michael A. McCord, General Counsel, Office of the General Counsel, Federal Mine Safety and Health Review Commission, 601 New Jersey Avenue, NW., Suite 9500, Washington, DC 20001, or sent via facsimile to 202-434-9944. FOR FURTHER INFORMATION CONTACT: Michael A. McCord, General Counsel, Office of the General Counsel, 601 New Jersey Avenue, NW., Suite 9500, Washington, DC 20001; telephone 202-434-9935; fax 202-434-9944. SUPPLEMENTARY INFORMATION: I. Background The Commission last made substantive changes to its rules implementing the FOIA in 1997. 62 FR 55,332, Oct. 24, 1997. Since those last rule revisions, the Commission has expanded its use of electronic records, making more relevant the amendments to the FOIA in 1996 that addressed electronic recordkeeping in federal agencies. Additionally, on December 14, 2005, President George W. Bush signed Executive Order 13,392, which mandated changes in practices among federal agencies to ensure timely and effective responses to the public's requests for information. 70 FR 75,373. Further, based on its years of experience in implementing the FOIA, the Commission determined that certain changes in its FOIA rules were also necessary to better reflect agency practice under the rules and to maximize the Commission's utilization of the internet to disseminate information. Finally, there had not been a comprehensive review of the Commission's fee schedule in over ten years, and the present rulemaking is an appropriate time to update and revise those fees. II. Section-by-Section Analysis Set forth below is an analysis of proposed changes to the Commission's rules. Part 2702—Regulations Implementing the Freedom of Information Act 29 CFR 2702.1 The Commission is proposing to clarify 29 CFR 2702.1. First, 29 CFR 2702.1 explains that “all designated information” be made readily available to the public, but it is not clear by whom and under what authority the information would be “designated.” The Commission proposes revising this language to clarify that the type of information that would be made available to the public is information subject to disclosure pursuant to FOIA and the Commission's FOIA rules and not otherwise protected by law. Secondly, the last sentence in 29 CFR 2702.1 states that the scope of the Commission's FOIA regulations may be limited to requests for information that is not presently the “subject of litigation before the Commission.” 29 CFR 2702.1. As currently written, the rule could be read to exclude discovery records from the Commission's disclosure obligation under FOIA. In fact, however, such records could be subject to disclosure pursuant to FOIA, unless they fall under one of the nine exemptions provided in the statute. The Commission proposes revising 29 CFR 2702.1 to clarify that the scope of its FOIA rules is limited to records or information of the agency or within its custody. The proposed rule also includes language stating that the Commission's FOIA rules do not affect discovery in adversary proceedings before the Commission, which are governed by the Commission's Rules of Procedure, 29 CFR part 2700. Finally, the Commission proposes amending 29 CFR 2702.1 to include a reference to the Commission's Web site as an alternative means of obtaining the Commission's FOIA Guide. 29 CFR 2702.3 Initial Requests On December 14, 2005, the President issued Executive Order 13,392, which contained several statements of government-wide FOIA policy as well as several additional planning and reporting requirements. The Executive Order requires agencies to appoint a Chief FOIA Officer who has “agency-wide responsibility for efficient and appropriate compliance with the FOIA.” *See* Executive Order 13,392, sec. 2(b)(I). Under the Commission's current rule, the Executive Director makes the initial determination on a FOIA request with the consent of a majority of the Commissioners. 29 CFR 2702.3(b). Pursuant to the Executive Order, the Commission's current practice is that the Chief FOIA Officer, instead of the Executive Director, responds to initial FOIA requests without consulting with the Commissioners. The Commission's designation of a Chief FOIA Officer and the transfer of FOIA responsibilities to that titled position complies with the requirements of Executive Order 13,392. Accordingly, the Commission proposes revising paragraphs

(a)and

(b)to conform with these administrative changes, reflecting the current practice of initial requests being handled by the Chief FOIA Officer instead of the Executive Director. In addition, the Commission proposes revising paragraph

(b)to delete the requirement that a majority of the Commission must consent to the Chief FOIA Officer's initial determination of a request. Appeals FOIA refers to “the right of [a] person to appeal to the head of the agency any adverse determination.” 5 U.S.C. 552(a)(6)(A)(I). Under the Commission's current FOIA rules, appeals are to be made to the Chairman, who independently makes a determination on appeal. As previously noted, under the Commission's current FOIA rules, initial determinations of FOIA requests are made with the consent of the Commissioners. Thus, under the current rules, the Chairman would be involved in both the initial determination and the determination on appeal. The Commission believes that the statutory language of 5 U.S.C. 552(a)(6)(A)(I) does not mandate that FOIA appeals be decided only by the Commission's Chairman. The House Committee on Government Reform has noted that while “an appeal is filed by sending a letter to the head of the agency, * * * [a]t most agencies, decisions on FOIA appeals have been delegated to other agency officials.” House of Representatives Committee on Government Reform, *A Citizen's Guide on Using the Freedom of Information Act and the Privacy Act of 1974 to Request Government Records* (Second Report), H.R. Rep. No. 226, at 21 & n.32, 109th Cong. (2005). Accordingly, the Commission proposes revising paragraph

(b)to reflect that appeals from the Chief FOIA Officer's initial determinations on FOIA requests should go to the Commission, with a majority vote of the sitting Commissioners determining the disposition of the appeal. The Commission does not believe that FOIA mandates that a quorum of Commissioners is required to consider and decide appeals of FOIA requests, as is required for adjudication under the Mine Act. 30 U.S.C. 823(c). The proposed rule provides that, in the event of a tie vote, the Chief FOIA Officer's determination would be affirmed. Denials The Commission also proposes revising paragraph (f), which currently states only that when a request is denied, the Commission will attempt to provide an estimate of the volume of records denied. When an agency denies a record request, it must comply with additional statutory requirements: First, after denying a FOIA appeal, the agency must notify the requester of his or her right to judicial review, 5 U.S.C. 552(a)(6)(A)(ii); and second, the agency must state the names and titles or positions of each person responsible for the denial of a FOIA request. 5 U.S.C. 552(a)(6)(C)(I). The Commission's current regulations do not address these two requirements. The Commission proposes revising its paragraph

(f)to state that a denial of a request include a requester's right to judicial appeal and the names and titles or positions of each person denying the FOIA request. Other Revisions The Commission proposes adding headings to the paragraphs of 29 CFR 2702.3 to make it easier for a reader to locate important information governing the Commission's processing of FOIA requests. 29 CFR 2702.4 Under FOIA, each agency must make available for public inspection and copying (without the need for a formal FOIA request) in a reading room the following items: Final opinions and orders issued in the adjudication of administrative cases; policy statements and interpretations that have been adopted by the agency but which were not published in the **Federal Register** ; administrative staff manuals that affect members of the public; and records processed and disclosed in response to a FOIA request that the agency determines have or will become the subject of similar requests for substantially the same records (often referred to as “FOIA-processed records”). *See* 5 U.S.C. 552(a)(2). Records in all four categories must be indexed in order to facilitate the public's access to them. The index must be published and distributed at least quarterly unless an agency determines by order published in the **Federal Register** that the publication would be unnecessary and impracticable. Any records that are “promptly published and offered for sale” do not need to be included in the reading room. 5 U.S.C. 552(a)(2). The E-FOIA amendments of 1996 require each agency to make the records created by it on or after November 1, 1996, in all four categories described above, available to the public by electronic means. 5 U.S.C. 552(a)(2). The index of the FOIA-processed records must be made available electronically. Electronic reading rooms must be operational by November 1, 1997. The Commission proposes revising 29 CFR 2702.4 to refer to a Commission on-site reading room, to state that the four categories of documents as described in 5 U.S.C. 552(a)(2) of the FOIA may be made available at that reading room, and to refer to the Commission's electronic reading room available on its Web site at *http://www.fmshrc.gov* . A more detailed listing of materials available in the Commission's reading rooms is provided in the Commission's FOIA Guide, also available on its Web site. 29 CFR 2702.6 The fees the Commission charges for searching, reviewing, and duplicating records pursuant to FOIA requests are set forth in 29 CFR 2702.6. The Commission believes it is appropriate to update its fee schedule, which was last revised in 1997, to ensure that the fees represent “reasonable standard charges” as required by FOIA. 5 U.S.C. 552(a)(4)(A)(ii). Revisions are also necessary to comply with guidelines promulgated by the Office of Management and Budget, Uniform Freedom of Information Act Fee Schedule and Guidelines, 52 FR 10,012, 10,018, Mar. 27, 1987 (“OMB Guidance”), which states that an agency must charge fees that recoup the full allowable direct costs that it incurs. Because salaries have changed significantly since 1997, the Commission concludes that an amendment of the fee schedule is clearly necessary. Accordingly, the Commission proposes to revise its search and review fees to state that it will charge at the salary rates (basic pay plus 16 percent) of the employees making the search or providing the review. This is consistent with the language of the OMB Guidance. The Commission also proposes to include in the rule the address of its Web site, where the specific hourly rates will be listed. The Commission's current fee regulation also states that if search charges are likely to be more than $25, the Commission shall notify the requester of the estimated amount of fees, unless the requester has indicated in advance a willingness to pay fees as high as those anticipated. 29 CFR 2704.6(a). This language originated in the Commission's 1988 interim FOIA rule, 53 FR 737, 739, Jan. 12, 1988, published almost twenty years ago. The Commission proposes increasing the $25 figure to $50. In addition, the Commission proposes a revision to the statement in the current rule that “[t]ime spent on unsuccessful searches shall be fully charged.” 29 CFR 2702.6(a). The term “unsuccessful” is ambiguous, and requires clarification. Pursuant to the OMB Guidance, the Commission proposes clarifying that fees shall be charged even if the documents are not located or if they are located but withheld on the basis of an exemption. Also, the Commission proposes that the reference in 29 CFR 2702.6(b) to the Executive Director should be changed to the Chief FOIA Officer for the reasons stated in the discussion above regarding proposed revisions to 29 CFR 2702.3. The Commission also proposes inserting language in paragraph

(c)which states that the Commission shall charge the actual cost, including operator time, of production for copies prepared by computer (such as tapes or printouts). This is consistent with language in the OMB Guidance and would replace the current language in paragraph

(a)stating that the fee for computer printouts shall be $.40 per page. The Commission proposes moving information about fees for computer copies to paragraph

(c)(duplicating fee) from paragraph

(a)(search fee) because it believes that a fee for computer copies is more similar to a duplicating fee than a search fee. The Commission also proposes adding language to paragraph

(c)stating that for other methods of reproduction or duplication, it will charge the actual direct costs of producing the documents. This is also consistent with the OMB Guidance. 29 CFR 2702.7 The Committee proposes revising paragraph (a). That provision states that fees of less than $10 shall be waived, in essence because it is not cost effective for the Commission to collect sums smaller than $10. 29 CFR 2702.7(a). This figure was first utilized in an interim FOIA rule published by the Commission in 1988. 53 FR 737, 739, Jan. 12, 1988. Taking inflation into account, the Commission proposes amending this figure to $20. The Commission also proposes revising paragraph (b)(2) to reflect that the Chief FOIA Officer, rather than the Executive Director, shall decide whether a waiver or reduction of fees is warranted. Similarly, the Commission proposes that the rule be amended to state that the Commission, rather than the Chairman, decide appeals regarding fee issues. This is consistent with the proposal that the language of 29 CFR 2702.3 be changed to require that an appeal from the Chief FOIA Officer's initial substantive determination should be decided by the full Commission, rather than the Chairman. III. Matters of Regulatory Procedure The Commission is an independent regulatory agency, and as such, is not subject to the requirement of Executive Order 12866, Sept. 30, 1993; 58 FR 51,735, Oct. 4, 1993. The Commission has determined under the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) that these rules will not have a significant economic impact on a substantial number of small entities. Therefore, a Regulatory Flexibility Statement and Analysis has not been prepared. The Commission has determined that the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ) does not apply because these rules do not contain any information collection requirements that require the approval of the OMB. List of Subjects in 29 CFR Part 2702 Freedom of information. For the reasons stated in the preamble, the Federal Mine Safety and Health Review Commission proposes to amend 29 CFR part 2702 as follows: PART 2702—REGULATIONS IMPLEMENTING THE FREEDOM OF INFORMATION ACT 1. The authority citation for part 2702 continues to read as follows: Authority: Sec. 113, Federal Mine Safety and Health Act of 1977, Pub. L. 95-164 (30 U.S.C. 801 *et seq.* ); 5 U.S.C. 552; E.O. 13392, 70 FR 75373. 2. Revise section 2702.1 to read as follows: § 2702.1 Purpose and scope. The Federal Mine Safety and Health Review Commission (Commission) is an independent agency with authority to adjudicate contests between the Mine Safety and Health Administration of the U.S. Department of Labor and private parties, as well as certain disputes solely between private parties, arising under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. 801 *et seq.* The purpose of these rules is to establish procedures for implementing the Freedom of Information Act, 5 U.S.C. 552, as amended by the Electronic Freedom of Information Act Amendments of 1996, Pub. L. 104-231, 110 Stat. 3048; to provide guidance for those seeking to obtain information from the Commission; and to make all information subject to disclosure pursuant to this subchapter and FOIA and not otherwise protected by law readily available to the public. Additional guidance on obtaining information from the Commission can be found in the document entitled “Reference Guide for Obtaining Information from the Federal Mine Safety and Health Review Commission,” which is available upon request from the Commission and on the Commission's Web site ( *http://www.fmshrc.gov* ). These rules apply only to records or information of the Commission or in the Commission's custody. This part does not affect discovery in adversary proceedings before the Commission. Discovery is governed by the Commission's Rules of Procedure in 29 CFR part 2700. 3. In section 2702.3, add paragraph headings to paragraphs

(a)through (g), revise the first sentence of paragraph (a), revise paragraph (b), and revise paragraph

(f)to read as follows: § 2702.3 Requests for information.

(a)*Content of Request.* All requests for information should be in writing and should be mailed or delivered to Chief FOIA Officer, Federal Mine Safety and Health Review Commission, 601 New Jersey Avenue, NW., Suite 9500, Washington, DC 20001-2021. * * *

(b)*Response to Request.* A determination whether to comply with the request will be made by the Chief FOIA Officer. Except in unusual circumstances, as described in paragraph

(c)of this section the determination will be made within 20 working days of receipt. Appeals of adverse decisions may be made, in writing, to the Chairman of the Commission, at the same address, within 20 working days. Determination of appeals will be made by a majority vote of sitting Commissioners within 20 working days after receipt. In the event of a tie vote of those Commissioners, the Chief FOIA Officer's initial determination will be deemed approved by the Commission. If the records to be disclosed are not provided with the initial letter setting forth the determination as to the request, the records will be sent as soon as possible thereafter.

(c)*Processing of Request.* * * *

(d)*Additional Time to Respond to Request.* * * *

(e)*Expedited Processing of Request.* * * *

(f)*Denial of Request.* In denying a request for records, in whole or in part, the Commission shall state the reason for denial, set forth the name and title or position of the person responsible for the denial of the request, make a reasonable effort to estimate the volume of the records denied, and provide this estimate to the person making the request, unless providing such an estimate would harm an interest protected by the exemption pursuant to which the request is denied, and, if an appeal is denied, notify the requester of the right to obtain judicial review of the Commission's action under 5 U.S.C. 552(a)(4)(B)-(G).

(g)*Partial Response to Request.* * * * 4. In section 2702.4, remove the introductory text and paragraphs

(c)and

(d)and revise paragraphs

(a)and

(b)to read as follows: § 2702.4 Materials available.

(a)*FOIA Reading Room.* Materials which may be made publicly available for inspection and copying at the Commission's on-site FOIA Reading Room, 601 New Jersey Ave., NW., Suite 9500, Washington, DC, include, but are not limited to:

(1)Final opinions, including concurring and dissenting opinions, as well as orders, made in the adjudication of cases;

(2)Those statements of policy and interpretations which have been adopted by the agency and are not published in the **Federal Register** ;

(3)Administrative staff manuals and instructions to staff that affect a member of the public;

(4)Copies of all records, regardless of form or format, which have been released to any person under this subpart and which, because of the nature of their subject matter, the Commission determines have become or are likely to become the subject of subsequent requests for substantially the same records; and

(5)A general index of records referred to under this paragraph.

(b)*E-FOIA Reading Room.* Materials created on or after November 1, 1996 under paragraphs (a)(1) through

(5)of this section may also be accessed electronically through the Commission's Web site at *http://www.fmshrc.gov.* 5. Revise section 2702.6 to read as follows: § 2702.6 Fee schedule.

(a)*Search fee.* The fee for searching for information and records shall be the salary rate (that is, basic pay plus 16%) of the employee making the search. This hourly rate is listed on the Commission's Web site at *http://www.fmshrc.gov.* Fees for searches of computerized records shall be the actual cost to the Commission but shall not exceed $300 per hour. This fee includes machine time and that of the operator and clerical personnel. If search charges are likely to exceed $50, the requester shall be notified of the estimated amount of fees, unless the requester has indicated in advance his willingness to pay fees as high as those anticipated. Fees may be charged even if the documents are not located or if they are located but withheld on the basis of an exemption.

(b)*Review fee.* The review fee shall be charged for the initial examination by the Chief FOIA Officer of documents located in response to a request in order to determine if they may be withheld from disclosure, and for the deletion of portions that are exempt from disclosure, but shall not be charged for review by the Chairman or the Commissioners. See § 2702.3. The review fee is the salary rate (that is, basic pay plus 16%) of the employee reviewing the records. This hourly rate is listed on the Commission's Web site at *http://www.fmshrc.gov.*

(c)*Duplicating fee.* The copy fee for each page of paper up to 8 1/2 ″x14″ shall be $.15 per copy per page. Any private sector services required will be assessed at the charge to the Commission. The fee for copying photographs and other nonstandard documents will be the actual direct cost incurred by the Commission. For copies prepared by computer, such as tapes or printouts, the Commission shall charge the actual cost, including operator time, of production of the tape or printout. For other methods of reproduction or duplication, the Commission will charge the actual direct costs of producing the document(s). If duplication charges are likely to exceed $50, the requester shall be notified of the estimated amount of fees, unless the requester has indicated in advance his willingness to pay fees as high as those anticipated. 6. In § 2702.7, revise paragraph

(a)and paragraph (b)(2) to read as follows: § 2702.7 No fees; waiver or reduction of fees.

(a)No fees shall be charged to any requester, including commercial use requesters, if the anticipated cost of processing and collecting the fee would be equal or greater than the fee itself. Accordingly, the Commission has determined that fees of less than $20 shall be waived.

(b)* * *

(2)The Chief FOIA Officer, upon request, shall determine whether a waiver or reduction of fees is warranted. Requests shall be made concurrently with requests for information under Sec. 2702.3. In accordance with the procedures set forth in Sec. 2702.3, appeals of adverse decisions may be made to the Commission within 5 working days. Determination of appeals will be made by the Commission within 10 working days of receipt. Dated: October 11, 2007. Michael F. Duffy, Chairman, Federal Mine Safety and Health Review Commission. [FR Doc. E7-20380 Filed 10-16-07; 8:45 am] BILLING CODE 6735-01-P DEPARTMENT OF THE INTERIOR Fish and Wildlife Service 50 CFR Part 17 RIN 1018-AU84 Endangered and Threatened Wildlife and Plants; Designation of Critical Habitat for Berberis nevinii (Nevin's barberry) AGENCY: Fish and Wildlife Service, Interior. ACTION: Proposed rule; reopening of comment period, revisions to proposed critical habitat, notice of availability of draft economic analysis, and amended Required Determinations. SUMMARY: We, the U.S. Fish and Wildlife Service (Service), announce the reopening of the comment period on the proposed designation of critical habitat for *Berberis nevinii* (Nevin's barberry) under the Endangered Species Act of 1973, as amended (Act). We are also using this comment period to announce revisions to proposed critical habitat subunits 1B, 1D, and 1E as described in the proposed rule published in the **Federal Register** on February 6, 2007, and announce the availability of the draft economic analysis for the proposed critical habitat designation and an amended Required Determinations section of the proposal. The draft economic analysis estimates potential costs to be approximately $169,000 to $172,000 in undiscounted dollars over a 20-year period in areas proposed as critical habitat and approximately $1.7 to $433.5 million in undiscounted dollars over a 20-year period (or 40-year period for impacts related to management of Vail Lake) in areas proposed for exclusion from critical habitat under section 4(b)(2) of the Act. We are reopening the comment period to allow all interested parties to comment simultaneously on the proposed rule, our revisions to the proposed rule, the associated draft economic analysis, and the amended Required Determinations section. Comments previously submitted need not be resubmitted as they will be incorporated into the public record as part of this comment period and will be fully considered in preparation of the final rule. DATES: We will accept public comments until November 16, 2007. ADDRESSES: You may submit written comments and materials to us by any one of the following methods:

(1)*E-mail:* Please submit electronic comments to *fw8cfwocomments@fws.gov* . Include “Nevin's barberry” in the subject line. For more information, please see the Public Comments Solicited section under SUPPLEMENTARY INFORMATION .

(2)*Facsimile:* You may fax your comments to 760/431-5901.

(3)*U.S. mail or hand-delivery:* You may submit written comments and information to Jim Bartel, Field Supervisor, Carlsbad Fish and Wildlife Office, 6010 Hidden Valley Road, Carlsbad, CA 92011.

(4)*Federal eRulemaking Portal: http://www.regulations.gov* . Follow the instructions for submitting comments. FOR FURTHER INFORMATION CONTACT: Jim Bartel, Field Supervisor, Carlsbad Fish and Wildlife Office, at the address listed in the ADDRESSES section (telephone: 760/431-9440). Persons who use a telecommunications device for the deaf

(TDD)may call the Federal Information Relay Service

(FIRS)at 800-877-8339. SUPPLEMENTARY INFORMATION: Public Comments Solicited We will accept written comments and information during this reopened comment period on the proposed critical habitat designation for *Berberis nevinii* published in the **Federal Register** on February 6, 2007 (72 FR 5552), the revisions to proposed critical habitat described herein (see Revisions to Proposed Critical Habitat section), and the draft economic analysis of the revised proposed designation. We will consider information and recommendations from all interested parties. We are particularly interested in comments concerning:

(1)Critical Habitat Subunits 1B, 1D, and 1E as revised in this notice (see Revisions to Proposed Critical Habitat section).

(2)The reasons why habitat should or should not be designated as critical habitat under section 4 of the Act (16 U.S.C. 1531 *et seq.* ), including whether the benefit of designation would outweigh threats to the species caused by the designation such that the designation of critical habitat is prudent.

(3)Specific information on the amount and distribution of *Berberis nevinii* habitat; what habitat or habitat features are essential to the conservation of this species and why; which areas occupied at the time of listing containing these features should be included in the critical habitat designation and why; and which areas not occupied at the time of listing but currently occupied should be included in the final designation and why.

(4)The geographical extent, number of plants, and/or reproductive status of native *Berberis nevinii* occurrences, particularly those in the Loma Linda Hills area (vicinity of San Timoteo Canyon and Scott Canyon) in San Bernardino County and those in western Riverside County (including in the vicinity of Vail Lake, the Agua Tibia Mountain foothills on the Cleveland National Forest (CNF), in the Soboba Badlands east of the San Jacinto Wildlife Area, the Jurupa Hills area, and near the City of Temecula).

(5)Specific information on three historical *Berberis nevinii* records from Los Angeles County—two from the Arroyo Seco near the City of Pasadena (California Natural Diversity Database (CNDDB) element occurrences 8 and 9) and one from the Big Tujunga Wash near San Fernando (CNDDB element occurrence 10)—such as whether the species still exists in these areas and where.

(6)Whether any areas not currently known to be occupied by *Berberis nevinii* , but essential to the conservation of the species, should be included in the designation.

(7)Information that demonstrates a species-specific pollinator-plant relationship for *Berberis nevinii* ; information on seed dispersal mechanisms and dispersal distance for *B. nevinii* ; whether seed banks exist for this species and, if so, for how long and under what conditions; and whether such information should be applied to or considered a primary constituent element for the species.

(8)Land use designations and current or planned activities in the mapped critical habitat subunits and their possible impact on proposed critical habitat.

(9)Our proposed exclusion of *Berberis nevinii* habitat covered under the approved Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP) and whether the benefits of excluding these areas outweigh the benefits of their inclusion under section 4(b)(2) of the Act (see 72 FR 5552, “Relationship of Critical Habitat to Approved Habitat Conservation Plans (HCPs)—Exclusion Under Section 4(b)(2) of the Act” section for details on the Western Riverside County MSHCP). If the Secretary determines the benefits of including these lands outweigh the benefits of excluding them, they will not be excluded from final critical habitat.

(10)Additional information regarding management plans covering lands managed by the Bureau of Land Management

(BLM)on Oak Mountain and by the U.S. Forest Service

(USFS)on the CNF, and whether these plans provide specific management for *Berberis nevinii* such that consideration of exclusion of these lands under section 4(b)(2) of the Act would be appropriate.

(11)Whether the benefits of exclusion of any particular area outweigh the benefits of inclusion under section 4(b)(2) of the Act.

(12)Information on the extent to which any State and local environmental protection measures referred to in the draft economic analysis may have been adopted largely as a result of the listing of *Berberis nevinii.*

(13)Information on whether the draft economic analysis identifies all State and local costs attributable to the proposed critical habitat designation, and information on any costs that have been inadvertently overlooked.

(14)Information on whether the draft economic analysis makes appropriate assumptions regarding current practices and likely regulatory changes imposed as a result of the designation of critical habitat.

(15)Information on whether the draft economic analysis correctly assesses the effect on regional costs associated with any land use controls that may derive from the designation of critical habitat.

(16)Information on whether there are any quantifiable economic benefits that could result from the designation of critical habitat.

(17)Information on areas that could potentially be disproportionately impacted by designation of critical habitat for *Berberis nevinii* .

(18)Any foreseeable economic, national security, or other potential impacts resulting from the proposed designation, and, in particular, any impacts on small entities, and the benefits of including or excluding areas that exhibit these impacts.

(19)Information on whether the draft economic analysis appropriately identifies all costs that could result from the designation.

(20)Economic data on the incremental effects that would result from designating any particular area as critical habitat, since it is our intent to include the incremental costs attributed to the revised critical habitat designation in the final economic analysis.

(21)Information on whether our approach to critical habitat designation could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concern and comments. Pursuant to section 4(b)(2) of the Act, an area may be excluded from critical habitat if it is determined that the benefits of such exclusion outweigh the benefits of including a particular area as critical habitat, unless the failure to designate such area as critical habitat will result in the extinction of the species. We may exclude an area from designated critical habitat based on economic impacts, national security, or any other relevant impact. All previous comments and information submitted during the initial comment period from February 6, 2007, to April 9, 2007, on the proposed rule (72 FR 5552) need not be resubmitted as they will be incorporated into the public record as part of this comment period and will be fully considered in preparation of the final rule. If you wish to comment, you may submit your comments and materials concerning proposed rule, draft economic analysis, or the amended Required Determinations provided in this document by any one of several methods (see ADDRESSES ). Our final designation of critical habitat will take into consideration all written comments and any additional information we have received during both comment periods. On the basis of public comment on this analysis, the revised critical habitat proposal, and the final economic analysis, we may, during the development of our final determination, find that areas proposed are not essential, are appropriate for exclusion under section 4(b)(2) of the Act, or are not appropriate for exclusion. You may submit your comments and material concerning the above actions by any one of several methods (see ADDRESSES ). If you use e-mail to submit your comments, please include “Attn: Nevin's barberry” in your e-mail subject header, preferably with your name and return address in the body of your message. If you do not receive a confirmation from the system that we have received your e-mail, contact us directly by calling our Carlsbad Fish and Wildlife Office at

(760)431-9440. Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. You may obtain copies of the proposed rule and draft economic analysis by mail from the Carlsbad Fish and Wildlife Office (see ADDRESSES ) or by visiting our website at *http://www.fws.gov/carlsbad/.* Background On August 10, 2004, the Center for Biological Diversity and California Native Plant Society challenged our failure to designate critical habitat for *Berberis nevinii* and four other plant species ( *Center for Biological Diversity* *et al.* v. *Gale Norton, Secretary of the Department of the Interior* *et al.* , C-04-3240 JL, N. D. Cal.). In a court approved settlement agreement, the Service agreed to propose critical habitat for *B. nevinii* , if prudent, on or before January 30, 2007, and finalize the designation on or before January 30, 2008. On February 6, 2007, we published a proposed rule to withdraw our previous not prudent finding and designate critical habitat for *B. nevinii* (72 FR 5552), identifying approximately 417 acres

(ac)(169 hectares (ha)) in Riverside County, California, that met the definition of critical habitat for this species. Of this, we proposed to exclude 385 ac (156 ha) of non-Federal land from the final designation under section 4(b)(2) of the Act because these lands are protected by an approved Habitat Conservation Plan

(HCP)(see 72 FR 5552, “Relationship of Critical Habitat to Approved Habitat Conservation Plans—Exclusion Under Section 4(b)(2) of the Act” section for details), leaving a proposed final designation of 32 ac (13 ha) of Federal land. We are now proposing revisions to three of the proposed critical habitat subunits: 1B, 1D, and 1E (see “Revisions to Proposed Critical Habitat” section); accordingly, approximately 361 ac (146 ha) in Riverside County, California, meets the definition of critical habitat for this species, a reduction of 56 ac (23 ha). Of this, we propose to exclude approximately 344 ac (139 ha) of non-Federal land protected by an approved HCP from the final designation under section 4(b)(2) of the Act. These 344 ac (139 ha) are a subset of the 385 ac (156 ha) proposed for exclusion in the proposed rule. Other than these changes, the proposed rule of February 6, 2007, remains intact. Critical habitat is defined in section 3 of the Act as the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features essential to the conservation of the species and that may require special management considerations or protection, and specific areas outside the geographical area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. If the proposed rule as revised herein is made final, section 7 of the Act will prohibit destruction or adverse modification of critical habitat by any activity funded, authorized, or carried out by any Federal agency. Federal agencies proposing actions affecting areas designated as critical habitat must consult with us on the effects of their proposed actions, pursuant to section 7(a)(2) of the Act. Draft Economic Analysis Section 4(b)(2) of the Act requires that we designate or revise critical habitat based upon the best scientific and commercial data available, after taking into consideration the economic impact, impact on national security, or any other relevant impact of specifying any particular area as critical habitat. We have prepared a draft economic analysis of the proposed critical habitat designation based on the February 6, 2007, proposed rule to designate critical habitat for *Berberis nevinii* (72 FR 5552) and subsequent revisions to the proposed rule described herein (see Revisions to Proposed Critical Habitat). The draft economic analysis is intended to quantify the economic impacts of all potential conservation efforts for *Berberis nevinii* ; some of these costs will likely be incurred regardless of whether critical habitat is designated. Potential economic impacts in areas proposed as critical habitat are estimated over a 20-year period, whereas estimated economic impacts in areas proposed for exclusion from critical habitat follow various timeframes, depending on the activity (e.g., a 5-year period for economic impacts related to administration, a 20-year period for economic impacts related to development, and a 40-year period for economic impacts related to management of Vail Lake). The draft economic analysis estimates potential costs to be approximately $169,000 to $172,000 in undiscounted dollars over a 20-year period in areas proposed as critical habitat and approximately $1.7 to $433.5 million in undiscounted dollars over a 20-year period (or 40-year period for impacts related to management of Vail Lake) in areas proposed for exclusion from critical habitat under section 4(b)(2) of the Act. These impacts would only occur if the area proposed for exclusion is instead designated as critical habitat. The cost estimates are based on revisions to the proposed designation of critical habitat described in this notice and include costs coextensive with listing and recovery. Discounted future costs in areas proposed as critical habitat are estimated to be approximately $136,000 to $139,000 ($10,000 annualized) at a 3 percent discount rate or approximately $107,000 to $110,000 ($11,000 annualized) at a 7 percent discount rate. Discounted future costs in areas proposed for exclusion from critical habitat are estimated to be approximately $1.2 to $232.5 million at a 3 percent discount rate ($82,000 to $10.1 million annualized) or approximately $0.9 to $118.1 million at a 7 percent discount rate ($81,000 to $8.9 million annualized). For areas proposed for exclusion, the economic analysis provides an analysis of potential economic impacts related to residential/urban development, management of Vail Lake, and administration, with the timeframe for analysis varying based on the activity (1-5 years, 6-20 years, and 21-40 years). Estimated discounted future costs (3 percent discount rate) associated with management of Vail Lake range from zero to $12.2 million for the 2008 through 2012 timeframe, from zero to $117.4 million for the 2013 through 2027 timeframe, and from zero to $99.7 million for the 2028 through 2047 timeframe. Similarly, estimated discounted future costs (3 percent discount rate) associated with development range from $333,000 to $967,000 for the 2008 through 2012 timeframe and from $873,000 to $2.3 million for the 2013 through 2027 timeframe in areas proposed for exclusion from critical habitat. Lastly, the discounted future cost (3 percent discount rate) associated with administration is estimated at $19,000 for the 2008 through 2012 timeframe in these same subunits. The draft economic analysis considers the potential economic effects of actions relating to the conservation of *Berberis nevinii* , including costs associated with sections 4, 7, and 10 of the Act, and including those attributable to the designation of critical habitat. It further considers the economic effects of protective measures taken as a result of other Federal, State, and local laws that aid habitat conservation for *B. nevinii* in areas containing features essential to the conservation of the species. The draft analysis considers both economic efficiency and distributional effects. In the case of habitat conservation, efficiency effects generally reflect the “opportunity costs” associated with the commitment of resources to comply with habitat protection measures (such as lost economic opportunities associated with restrictions on land use). This analysis also addresses how potential economic impacts are likely to be distributed, including an assessment of any local or regional impacts of habitat conservation and the potential effects of conservation activities on government agencies, private businesses, and individuals. The analysis measures lost economic efficiency associated with residential and commercial development and public projects and activities, such as economic impacts on water management and transportation projects, Federal lands, small entities, and the energy industry. This information can be used by decision-makers to assess whether the effects of the designation might unduly burden a particular group or economic sector. Finally, this draft analysis looks retrospectively at costs that have been incurred since the date *Berberis nevinii* was listed as endangered (October 13, 1998; 63 FR 54956), and considers those costs that may occur in the years following the designation of critical habitat, with the timeframes for this analysis varying by activity. Because the draft economic analysis considers the potential economic effects of all actions relating to the conservation of *B. nevinii* , including costs associated with sections 4, 7, and 10 of the Act and those attributable to designating critical habitat, this may result in an overestimate of the potential economic impacts of the designation. As stated earlier, we are soliciting data and comments from the public on this draft economic analysis, as well as on all aspects of the proposal. We may revise the proposal or its supporting documents to incorporate or address new information received during the comment period. In particular, we may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area as critical habitat, provided such exclusion will not result in the extinction of the species. Changes to the Proposed Rule By this notice, we are also advising the public of revisions to three of the subunits described in the February 6, 2007, proposed rule (72 FR 5552): Subunit 1B (Agua Tibia Mountain Foothills), Subunit 1D (North of Vail Lake), and Subunit 1E (South of Vail Lake/Peninsula). During the first comment period for the proposed rule, we were informed by Cleveland National Forest

(CNF)that proposed Subunit 1B (Agua Tibia Mountain Foothills), which we had identified as including approximately 17 ac (7 ha) of USFS land and approximately 5 ac (2 ha) of adjacent private land, was inaccurately mapped because it was based on inexact location information for the *Berberis nevinii* occurrence on CNF lands. Hence, we are revising the location and boundaries of proposed critical habitat Subunit 1B to reflect new location information provided by the CNF, and we are now proposing to designate less than 3 ac (1 ha) of Federal

(CNF)land in Subunit 1B, rather than the approximately 22 ac (9 ha) of Federal and private land identified in the proposed rule. We delineated critical habitat based on the criteria outlined in the February 6, 2007, proposed rule, which resulted in this subunit no longer including any private land. Revised Subunit 1B was occupied at the time of listing and contains the primary constituent elements (PCEs), those physical or biological features essential to conservation of the species. We also reevaluated proposed critical habitat subunits bordering Vail Lake based on updated aerial photographs and Vail Lake storage/volume data provided by Rancho California Water District

(RCWD)for the economic analysis. We removed areas along the shoreline from subunits 1D (North of Vail Lake) and 1E (South of Vail Lake/Peninsula) that do not contain the PCEs required by *Berberis nevinii* and are not occupied by the species due to lake-level fluctuations and recurrent, episodic inundation, sometimes for relatively long periods of time. We removed approximately 1 ac (1 ha) from proposed Subunit 1D and approximately 34 ac (14 ha) from proposed Subunit 1E, leaving approximately 21 ac (8 ha) and approximately 217 ac (88 ha) in proposed subunits 1D and 1E, respectively. When delineating proposed critical habitat (72 FR 5552), we tried to exclude areas from proposed subunits near Vail Lake that were identified as being under water, and therefore did not contain the PCEs. We based subunit delineations in the proposed rule on USGS 1-meter resolution color-balanced, color infrared aerial photography acquired in May/June 2002 for the Vail Lake area, western Riverside County. Based on information provided by RCWD for the draft economic analysis, the lake was storing between approximately 19,750 acre-feet (May 1, 2002) and 19,180 acre-feet (June 30, 2002) of water during this time period. However, water levels at Vail Lake can fluctuate greatly, depending on the amount of local runoff reaching the lake, both within any given year and annually, frequently exceeding the 2002 water levels for relatively long periods of time. The RCWD, the entity that owns and operates/manages Vail Dam and Vail Lake, has a surface water storage permit in the lake for up to 40,000 acre-feet from November 1 to April 30, annually. Thus, we revised proposed critical habitat boundaries for subunits bordering Vail Lake based on lake levels at RCWD's permitted storage capacity, resulting in boundary changes to proposed subunits 1D and 1E. Water volume in Vail Lake has been known to exceed 40,000 acre-feet, even filling and surpassing lake storage capacity (50,000 acre-feet) with water flowing over the spillway. The creation of Vail Lake in 1948 may have resulted in the loss of some *Berberis nevinii* individuals; however, the occurrences that are now located closest to Vail Lake have not been inundated or affected by rising water levels and fluctuations in the recent past (Boyd 2007). Thus, the revisions to proposed critical habitat subunits 1D and 1E are not likely to result in *B. nevinii* individuals in this area falling outside the revised subunit boundaries. These revisions will, on the other hand, more accurately represent *B. nevinii* habitat in subunits 1D and 1E. Table 1 contains the corrected area values based on revisions to proposed critical habitat subunits 1B, 1D, and 1E. The revisions to these three proposed subunits change the legal description published in the February 6, 2007, proposed rule. This notice republishes the legal descriptions for subunits 1B, 1D, and 1E based on the revisions described herein, along with a map depicting the revised location of proposed critical habitat for *Berberis nevinii* . Table 1.—Areas Proposed as Critical Habitat for Berberis nevinii and Areas Being Considered for Exclusion From the Final Critical Habitat Designation Under Section 4(b)(2) of the Act [Area is displayed in acres

(ac)(hectares (ha)).] Critical habitat unit Land ownership Area proposed as critical habitat Area proposed for exclusion from final critical habitat Area proposed as final critical habitat 1. Agua Tibia/Vail Lake 1A. Big Oak Mountain Summit BLM 14.8 ac (6.0 ha) 0 ac (0 ha) 14.8 ac (6.0 ha). 1B. Agua Tibia Mountain Foothills USFS 2.5 ac (1.0 ha) 0 ac (0 ha) 2.5 ac (1.0 ha). 1C. South Flank Big Oak Mountain Private 86.5 ac (35.0 ha) 86.5 ac (35.0 ha) 0 ac (0 ha). 1D. North of Vail Lake Private 1 20.8 ac (8.4 ha) 20.8 ac (8.4 ha) 0 ac (0 ha). 1E. South of Vail Lake/Peninsula Private 1 216.7 ac (87.7 ha) 216.7 ac (87.7 ha) 0 ac (0 ha). 1F. Temecula Creek East Private 19.8 ac (8.0 ha) 19.8 ac (8.0 ha) 0 ac (0 ha). Total 361.1 ac (146.1 ha) 343.8 ac (139.1 ha) 17.3 ac (7.0 ha). 1 Private lands in Subunits 1D and 1E include a total of 2.8 ac (1.1 ha) owned by the Rancho California Water District. Below, we present brief descriptions of the revised proposed subunits and reasons why they meet the definition of critical habitat for *Berberis nevinii* . These revised subunit descriptions replace those provided in the February 6, 2007, proposed rule (72 FR 5552). Unit Descriptions Subunit 1B: Agua Tibia Mountain Foothills Subunit 1B consists of approximately 3 ac (1 ha) of federally-owned land managed by the USFS on the CNF near the Agua Tibia Wilderness Area in southern Riverside County, California. Five *Berberis nevinii* individuals are known from this area and are located at the edge of a stream channel (PCE 1) growing in association with coast live oak and riparian woodland species (PCE 3). Nearby chaparral includes such species as *Quercus berberidifolia* , *Adenostoma fasciculatum* , and *Haplopappus squarrosus* , and nearby desert species include *Yucca schidigera* (CNDDB 2006). These *B. nevinii* plants are growing under a canopy of *Quercus agrifolia* and *Platanus racemosa* with the following species: Heteromeles arbutifolia, Q. berberidifolia, Elymus condensatus, *Mimulus aurantiacus, Lonicera subspicata* , *Pterostegia drymarioides* , and *Epilobium canum.* Soils in this area are classified as rough broken land and Visalia gravelly sandy loam, with 5 to 9 percent slopes (PCE 2) (Service GIS data 2007). We are proposing this subunit as critical habitat because it contains features essential to conservation of *Berberis nevinii* and it contains a relatively large natural occurrence of the species. Additionally, Service personnel visited this site in June 2006 while *B. nevinii* was in fruit and found that several of the fruits had three to four seeds, which may be significant for a species that appears to rarely set seed. *Berberis nevinii* occupied this subunit at the time of listing, as identified in the final listing rule (63 FR 54956, October 13, 1998). The *Berberis nevinii* occurrence on the CNF is not as well protected as the occurrence on the Angeles National Forest (USFS 2005, p. 238). The primary threats to *B. nevinii* habitat in this area are human recreation (off-highway vehicle use, shooting); wildland fire, including an increased risk of fire ignition due to the proximity of State Highway 79 (USFS 2005, pp. 232, 237); fuels and fire management activities (USFS 2005, p. 237); and invasive, nonnative plants, including potential short-term adverse effects associated with control efforts (USFS 2005, p. 234). The CNF occurrence burned in 1996 followed by vigorous resprouting (USFS 2005, p. 237), and this location has also shown signs of disturbance from road activities, with unauthorized use of off-highway vehicles occurring close to but not within the area occupied by the species (USFS 2005, p. 235). Nonetheless, the magnitude of impacts associated with roads and recreational activity in this area appears to be low (USFS 2005, p. 238). Also, the USFS does not anticipate substantial camping and hiking-related impacts to *B. nevinii* habitat, and these impacts will be avoided or mitigated by use of Forest Plan standards (USFS 2005, p. 234). The February 6, 2007, proposed rule (72 FR 5552) identified the proximity of Highway 79 as a potential threat to the *Berberis nevinii* occurrence and habitat on the CNF, in part due to proposed highway widening and realignment activities. However, we no longer anticipate that these activities, if or when they occur, will affect Subunit 1B as the revised subunit is now more than one-tenth mile (160 meters) south of the highway. Invasive, nonnative plants and their management may also impact the *B. nevinii* occurrence and habitat at this site. Based on the weed management strategy in the USFS’ Revised Land Management Plan for the four Southern California National Forests (USFS 2005), the CNF anticipates an eradication effort of the nonnative Arundo and other invasive grasses present in this subunit. One of the greatest threats to occupied habitat and the PCEs contained therein on the CNF is from wildland fire and the management of fire and fuels (i.e., fire suppression and prevention activities). The Wildland-Urban Interface

(WUI)Defense Zone overlaps about 43 percent of occupied habitat on the CNF (USFS 2005, p. 237; Service 2005, p. 127). Some plants or habitat within the WUI Defense Zone could be removed or degraded under the Revised Land and Resource Management Plan due to fuel removal for fire protection or overly frequent fuel treatments (Service 2005, p. 127). Special management considerations or protection of the PCEs may be required to minimize disturbance to the vegetation and soils within this subunit; control invasive, nonnative plants; and maintain the natural fire regime of the area. Subunit 1B is included in the Western Riverside County Multiple Species Habitat Conservation Plan's (MSHCP) Conservation Area as existing Public/Quasi-Public

(PQP)Conserved Lands. Since the CNF is not a signatory to the MSHCP and is not required to comply with the MSHCP's conservation measures, we are not proposing lands within this subunit for exclusion under section 4(b)(2) of the Act (see 72 FR 5552, “Exclusions under Section 4(b)(2) of the Act for *Berberis nevinii* ” section for a detailed discussion). During the first comment period for the proposed rule, we were informed that the Species Management Guide for *Mahonia* [ *Berberis* ] *nevinii*

(Gray)Fedde (Mistretta and Brown 1989) developed for the Angeles National Forest was subsequently adopted by the CNF (Fege 1992, p. 1; Holtrop 2007, p. 2). Additionally, the CNF informed us that the species account for *Berberis nevinii* developed to support the environmental analysis for the USFS Land Management Plans for four southern California National Forests (USFS 2005) is meant to provide guidance for conservation and management of *B. nevinii* on USFS lands (Young 2007). However, these documents provide general guidance only and do not direct decisions regarding USFS site-specific project proposals. Additionally, these documents do not provide specific recommendations for the *B. nevinii* occurrence on the CNF. Therefore, as stated in the February 6, 2007, proposed rule (72 FR 5552), we are not proposing USFS lands within this subunit for exclusion under section 4(b)(2) of the Act based on these plans. Subunit 1D: North of Vail Lake Subunit 1D consists of approximately 21 ac (8 ha) of private land located immediately north of Vail Lake in southern Riverside County, California. The *Berberis nevinii* occurrence at this location is mapped along a canyon just above the high water line of Vail Lake, and consists of seven plants based on a 1989 survey (CNNDB 2006). *Berberis nevinii* individuals in this area are found in sandy and gravelly soils in a drainage bottom (PCE 1 and 2). The vegetation community is classified as coastal scrub and valley foothill riparian (PCE 3) (Service GIS data 2006). At this site, *B. nevinii* is associated with *Adenostoma fasciculatum* , *Arctostaphylos glauca* , *Rhus integrifolia* , *Juniperus californica* , and *Rhamnus crocea* ; to the north is a large grove of *Prosopis glandulosa* (CNDDB 2006). Soils in this area are classified as badland (PCE 2) (Service GIS data 2006). We are proposing this subunit as critical habitat because it contains the features essential to conservation of *Berberis nevinii* , and it contains a relatively large natural occurrence of the species (CNDDB 2006). This subunit is important for conserving *B. nevinii* as it is one of several relatively large occurrences in the Vail Lake area and thus has a greater potential for regeneration by seed. *Berberis nevinii* occupied this subunit at the time of listing, as identified in the final listing rule (63 FR 54956, October 13, 1998). The primary threat to *Berberis nevinii* habitat in this area that may require special management considerations or protection of the PCEs is urban/residential development. This subunit, as well as subunits 1C, 1E, and 1F, consists entirely of private land that may be developed, excluding flood easement lands held by the RCWD. This and the other subunits just mentioned fall within the Criteria Area of the Western Riverside County MSHCP and are targeted, in whole or in part, for acquisition and inclusion in the MSHCP Conservation Area as Additional Reserve Lands. Regardless, indirect effects of urban development could threaten *B. nevinii* habitat in this area, including human recreation activities; erosion; incursion or spread of invasive, nonnative plants; and changes to the natural fire regime (i.e., increased ignitions and fire frequency and shortened fire return intervals) that can lead to type conversion of shrublands to annual grasslands. Rising lake levels may also pose a threat, though the occurrences closest to Vail Lake have not been inundated or affected by rising water levels and fluctuations in the recent past (Boyd 2007). We are proposing to exclude the private lands within this subunit from the final designation of critical habitat for *Berberis nevinii* based on conservation measures for the species in the MSHCP (see 72 FR 5552, “Relationship of Critical Habitat to Approved Habitat Conservation Plans (HCPs)—Exclusion Under Section 4(b)(2) of the Act—Western Riverside County Multiple Species Habitat Conservation Plan” section for a detailed discussion). Subunit 1E: South of Vail Lake/Peninsula Subunit 1E consists of approximately 217 ac (88 ha) of private land located on the south and southwest side of Vail Lake in southern Riverside County, California. This site has the largest known natural occurrence of *Berberis nevinii* , collectively consisting of 134 plants based on a 1987 survey (Boyd 1987, pp. 7, 61-72; CNDDB 2006). These plants are located in several stands along both sides of the southwest arm of Vail Lake, the south shore and peninsula, and part of the west shore of the southeast arm of Vail Lake. *Berberis nevinii* individuals in this area are found in canyons, in a wash of 15 percent slope, and on north-facing ridges and slopes between 35 and 70 percent slope (PCE 1) (Boyd 1987, p. 61-72; CNDDB 2006), primarily in association with coastal scrub, mixed chaparral, and valley foothill riparian communities (PCE 3) (Service GIS data 2006). Associated species include, but are not limited to: *Artemisia californica, Adenostoma fasciculatum, Eriogonum fasciculatum, Salvia mellifera, Rhamnus crocea, Rhus ovata, Encelia farinosa, Baccharis glutinosa,* and *Yucca* sp. (Boyd 1987, p. 61-72). Soils in this area are classified as sandy loams (Arlington and Greenfield fine sandy loams, 8 to 15 percent slopes, eroded; Cajalco rocky fine sandy loam, 15 to 50 percent slopes, eroded; Hanford coarse sandy loam, 8 to 15 percent slopes, eroded; Lodi rocky loam, 25 to 50 percent slopes, eroded; Monserate sandy loam, 8 to 15 percent slopes, eroded; Monserate sandy loam, 15 to 25 percent slopes, severely eroded; Pachappa fine sandy loam, 2 to 8 percent slopes, eroded), gullied land, riverwash, and rough broken land (PCE 2) (Service GIS data 2006). We are proposing this subunit as critical habitat because it contains features essential to conservation of *Berberis nevinii* , and it contains the largest known natural occurrence of the species (CNDDB 2006). This location also contains the bulk of known individuals in the Vail Lake/Oak Mountain area. Additionally, we interpret that reproduction has occurred at this site in the past based on the presence of several size

(age)classes during Nishida's 1987 survey of the area (Boyd 1987, p. 62). *Berberis nevinii* occupied this subunit at the time of listing, as identified in the final listing rule (63 FR 54956, October 13, 1998). The primary threat to *Berberis nevinii* habitat in this area that may require special management considerations or protection of the PCEs is urban/residential development. This subunit, as well as subunits 1C, 1D, and 1F, consists entirely of private land that may be developed, excluding areas held as flood easement by the RCWD. This and the other subunits just mentioned fall within the Criteria Area of the Western Riverside County MSHCP and are targeted, in whole or in part, for acquisition and inclusion in the MSHCP Conservation Area as Additional Reserve Lands. Regardless, indirect effects of urban development—including human recreation activities; erosion; incursion or spread of invasive, nonnative plants (including annual grasses, *Tamarix* sp., *Nicotiana glauca* , and others); and changes to the natural fire regime (i.e., increased ignitions and fire frequency and shortened fire return intervals) that can lead to type conversion of shrublands to annual grasslands—could threaten *B. nevinii* habitat in this area. This *Berberis nevinii* occurrence has burned in the past, and regeneration by stump sprouting has been observed (CNDDB 2006). Part of this area is fairly inaccessible, except by boat; however, other parts are in close proximity to roads, equestrian trails, and the boat launch area (Boyd 1987, pp. 61-72; CNDDB 2006), and thus may be more heavily impacted by recreational activities. Rising lake levels were also identified as a potential threat to this occurrence by Nishida (Boyd 1987, pp. 61-72; CNNDB 2006), though the occurrences closest to Vail Lake have not been inundated or affected by rising water levels and fluctuations in the recent past (Boyd 2007). We are proposing to exclude the private lands within this subunit from the final designation of critical habitat for *Berberis nevinii* based on conservation measures for the species in the Western Riverside County MSHCP (see 72 FR 5552, “Relationship of Critical Habitat to Approved Habitat Conservation Plans (HCPs)—Exclusion Under Section 4(b)(2) of the Act—Western Riverside County Multiple Species Habitat Conservation Plan” section for a detailed discussion). Required Determinations—Amended In our February 6, 2007, proposed rule (72 FR 5552), we indicated that we would defer our determination of compliance with several statutes and Executive Orders until the information concerning potential economic impacts of the designation and potential effects on landowners and stakeholders was available in the draft economic analysis. Those data are now available for our use in making these determinations. In this notice we are affirming the information contained in the proposed rule concerning Executive Order (E.O.) 13132, E.O. 12988, the Paperwork Reduction Act, and the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951). Based on the information made available to us in the draft economic analysis, we are amending our Required Determinations, as provided below, concerning E.O. 12866 and the Regulatory Flexibility Act, E.O. 13211, E.O. 12630, and the Unfunded Mandates Reform Act. Regulatory Planning and Review In accordance with E.O. 12866, this document is a significant rule because it may raise novel legal and policy issues. Based on our draft economic analysis of the proposed designation of critical habitat for *Berberis nevinii* , costs related to conservation activities for *B. nevinii* pursuant to sections 4, 7, and 10 of the Act are estimated to be approximately $169,000 to $172,000 in undiscounted dollars over a 20-year period in areas proposed as critical habitat and approximately $1.7 to $433.5 million in undiscounted dollars over a 20-year period (or 40-year period for impacts related to management of Vail Lake) in areas proposed for exclusion from critical habitat. These impacts would only occur if the area proposed for exclusion is instead designated as critical habitat. These cost estimates are based on revisions to the proposed designation of critical habitat described in this notice and includes costs coextensive with listing and recovery. Discounted future costs in areas proposed as critical habitat are estimated to be approximately $136,000 to $139,000 ($10,000 annualized) at a 3 percent discount rate or approximately $107,000 to $110,000 ($11,000 annualized) at a 7 percent discount rate. Discounted future costs in areas proposed for exclusion from critical habitat are estimated to be approximately $1.2 to $232.5 million at a 3 percent discount rate ($82,000 to $10.1 million annualized) or approximately $0.9 to $118.1 million at a 7 percent discount rate ($81,000 to $8.9 million annualized). For areas proposed for exclusion, estimated discounted future costs (3 percent discount rate) associated with management of Vail Lake range from zero to $12.2 million for the 2008 through 2012 timeframe, from zero to $117.4 million for the 2013 through 2027 timeframe, and from zero to $99.7 million for the 2028 through 2047 timeframe. Similarly, estimated discounted future costs (3 percent discount rate) associated with development range from $333,000 to $967,000 for the 2008 through 2012 timeframe and from $873,000 to $2.3 million for the 2013 through 2027 timeframe in areas proposed for exclusion from critical habitat. Lastly, the discounted future cost (3 percent discount rate) associated with administration is estimated at $19,000 for the 2008 through 2012 timeframe in these same subunits. Therefore, based on our draft economic analysis, we have determined that the proposed designation of critical habitat for *Berberis nevinii* would not result in an annual effect on the economy of $100 million or more or affect the economy in a material way. Due to the necessary timeline for publication in the **Federal Register** , the Office of Management and Budget

(OMB)has not formally reviewed the proposed rule or accompanying economic analysis. Further, E.O. 12866 directs Federal agencies promulgating regulations to evaluate regulatory alternatives (Office of Management and Budget, Circular A-4, September 17, 2003). Pursuant to Circular A-4, once it has been determined that the Federal regulatory action is appropriate, the agency will then need to consider alternative regulatory approaches. Since the designation of critical habitat is a statutory requirement pursuant to the Act, we must then evaluate alternative regulatory approaches, where feasible, when promulgating a designation of critical habitat. In developing our designations of critical habitat, we consider economic impacts, impacts to national security, and other relevant impacts pursuant to section 4(b)(2) of the Act. Based on the discretion allowable under this provision, we may exclude any particular area from the designation of critical habitat providing that the benefits of such exclusion outweigh the benefits of specifying the area as critical habitat and that such exclusion would not result in the extinction of the species. As such, we believe that the evaluation of the inclusion or exclusion of particular areas, or combination thereof, in a designation constitutes our regulatory alternative analysis. Regulatory Flexibility Act (5 U.S.C. 601 et seq.) Under the Regulatory Flexibility Act

(RFA)(5 U.S.C. 601 et seq.), as amended by the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 802(2)) (SBREFA), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of an agency certifies the rule will not have a significant economic impact on a substantial number of small entities. Based upon our draft economic analysis of the proposed designation, we provide our analysis for determining whether the proposed rule would result in a significant economic impact on a substantial number of small entities. Based on comments received, this determination is subject to revision as part of the final rulemaking. According to the Small Business Administration (SBA), small entities include small organizations, such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and agricultural businesses with annual sales less than $750,000. To determine if potential economic impacts to these small entities are significant, we considered the types of activities that might trigger regulatory impacts under this designation as well as types of project modifications that may result. In general, the term significant economic impact is meant to apply to a typical small business firm's business operations. To determine if the proposed designation of critical habitat for *Berberis nevinii* would affect a substantial number of small entities, we considered the number of small entities affected within particular types of economic activities, such as residential and commercial development. We considered each industry or category individually to determine if certification is appropriate. In estimating the numbers of small entities potentially affected, we also considered whether their activities have any Federal involvement; some kinds of activities are unlikely to have any Federal involvement and thus will not be affected by the designation of critical habitat. Designation of critical habitat only affects activities conducted, funded, permitted, or authorized by Federal agencies; non-Federal activities are not affected by the designation. If this proposed critical habitat designation is made final, Federal agencies must consult with us under section 7 of the Act if their activities may affect designated critical habitat. Consultations to avoid the destruction or adverse modification of critical habitat would be incorporated into the existing consultation process. In our draft economic analysis of the proposed critical habitat designation, we evaluated the potential economic effects on small business entities resulting from conservation actions related to the listing of *Berberis nevinii* and proposed designation of its critical habitat. Impacts of conservation activities are not anticipated to affect small entities in the following categories: Fire management on Federal lands; invasive, nonnative plant species management on Federal lands; recreation management on Federal lands; and surveying, monitoring, and other activities on Federal lands. As described in Chapters 4 through 6 of the draft economic analysis, the cost associated with modifications to activities on Federal lands will be borne by the USFS and BLM. The Federal Government is not considered a small entity by the SBA. As described in Chapter 3 of the draft economic analysis, potential impacts related to management of Vail Lake will be borne entirely by the RCWD and account for the majority of the total anticipated upper-bound future impacts in areas proposed for exclusion from the final designation of critical habitat (up to $429.1 million over the next 40 years in undiscounted dollars). The RCWD is not considered a small entity/governmental jurisdiction by the SBA because it services a population exceeding the criteria for a “small entity.” Additionally, transportation projects that are reasonably foreseeable within the 20-year analysis period are not anticipated to impact areas proposed as critical habitat. Only impacts to land development activities (Chapter 2) are expected to be borne by small entities. Accordingly, the small business analysis (Appendix B of the economic analysis) focuses on the economic impacts of land development activities on private lands. Seventy percent of the development-related impacts are expected to be borne by private landowners ($2.3 million), with the remainder borne by local government (25 percent or $810,000) and State and Federal government (5 percent or $180,000). Three private landowners in Riverside County will be directly impacted by the proposed regulation, with one landowner owning the majority (approximately 85 percent or 291 ac (118 ha)) of the 341 ac (138 ha) of private (non-RCWD) lands proposed as critical habitat. Chapter 2 of the draft economic analysis concludes that some residential/commercial development is likely in or adjacent to proposed critical habitat on private lands near Vail Lake. Current zoning laws limit the type of development that may take place on these private lands to one single-family home per 10 ac (4 ha) or 20 ac (8 ha), depending on specific zoning. Also, RCWD's flood easement for Vail Lake precludes development from approximately 34 ac (14 ha) of private land within proposed critical habitat adjacent to Vail Lake. Lastly, the topography (steepness) of much of this area makes it unlikely that the land will be used for dense development in the future. Still, the likelihood and eventual density of houses in or near proposed critical habitat, and whether such development will pose a threat to *Berberis nevinii* habitat is unknown. The private land proposed as critical habitat for *Berberis nevinii* is located within the Criteria Area of the Western Riverside County MSHCP and is targeted, in whole or in part, for acquisition and inclusion in the MSHCP Conservation Area as Additional Reserve Lands. Based on the MSHCP, the economic analysis assumes 90 percent or approximately 277 ac (112 ha) of the privately-owned land within potential critical habitat and outside RCWD's flood easement (which is approximately 307 of 341 ac (or 124 of 138 ha) of private land) will be targeted for acquisition as Additional Reserve Lands, with compensation to the private landowners. The economic analysis considers the cost of land acquisition, reserve management (including fire, invasive species, and recreation management), biological monitoring, adaptive management, and program administration for preserving these 277 ac (112 ha) of private land with long-term conservation value for *B. nevinii* as the total economic impact of the proposed critical habitat designation as it relates to development. The total economic impact for these activities over the next 20 years is estimated to range from $1.6 to $4.4 million in undiscounted dollars, or $1.2 to $3.3 million per year and $0.8 to $2.3 million per year at the 3 percent and 7 percent discount rate, respectively. Every small land subdivision and construction business in the MSHCP Plan Area is expected to be indirectly affected by conservation efforts for *Berberis nevinii* due to mitigation and density bonus fees that will be required for all new development. The economic analysis estimates that there are 3,146 small land subdivision and building construction businesses in Riverside County, but it is unknown how many of these are within the MSHCP Plan Area, which encompasses only the western part of the County. However, it is expected that these small entities would pass any additional costs associated with conservation measures to the consumer (i.e., the purchaser of the finished building), and thus we do not anticipate that this proposed regulation will result in a significant impact to a substantial number of small business entities. Please refer to our draft economic analysis of the proposed critical habitat designation for a more detailed discussion of potential economic impacts. In summary, we have considered whether this proposed rule would result in a significant economic effect on a substantial number of small entities. For the above reasons and based on currently available information, we certify that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. Therefore, an initial regulatory flexibility analysis is not required. Executive Order 13211—Energy Supply, Distribution, and Use On May 18, 2001, the President issued E.O. 13211 on regulations that significantly affect energy supply, distribution, and use. E.O. 13211 requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This proposed designation of critical habitat for *Berberis nevinii* is considered a significant regulatory action under E.O. 12866 due to its potentially raising novel legal and policy issues. OMB has provided guidance for implementing this Executive Order that outlines nine outcomes that may constitute “a significant adverse effect” when compared without the regulatory action under consideration. The draft economic analysis finds that none of these criteria are relevant to this analysis. Thus, based on information in the draft economic analysis, energy-related impacts associated with *B. nevinii* conservation activities within proposed critical habitat are not expected. As such, the proposed designation of critical habitat is not expected to significantly affect energy supplies, distribution, or use, and a Statement of Energy Effects is not required. Unfunded Mandates Reform Act (2 U.S.C. 1501 *et seq.* ) In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501), the Service makes the following findings:

(a)This rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local, or Tribal governments, or the private sector, and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” These terms are defined in 2 U.S.C. 658(5)-(7). “Federal intergovernmental mandate” includes a regulation that “would impose an enforceable duty upon State, local, or tribal governments,” with two exceptions. It excludes “a condition of federal assistance.” It also excludes “a duty arising from participation in a voluntary Federal program,” unless the regulation “relates to a then-existing Federal program under which $500,000,000 or more is provided annually to State, local, and Tribal governments under entitlement authority,” if the provision would “increase the stringency of conditions of assistance” or “place caps upon, or otherwise decrease, the Federal Government's responsibility to provide funding” and the State, local, or tribal governments “lack authority” to adjust accordingly. (At the time of enactment, these entitlement programs were: Medicaid; Aid to Families with Dependent Children work programs; Child Nutrition; Food Stamps; Social Services Block Grants; Vocational Rehabilitation State Grants; Foster Care, Adoption Assistance, and Independent Living; Family Support Welfare Services; and Child Support Enforcement.) “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector, except

(i)a condition of Federal assistance; or

(ii)a duty arising from participation in a voluntary Federal program.” The designation of critical habitat does not impose a legally binding duty on non-Federal government entities or private parties. Under the Act, the only regulatory effect is that Federal agencies must ensure that their actions do not destroy or adversely modify critical habitat under section 7. Non-Federal entities that receive Federal funding, assistance, permits, or otherwise require approval or authorization from a Federal agency for an action may be indirectly impacted by the designation of critical habitat. However, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly impacted because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandates Reform Act would not apply, nor would critical habitat shift the costs of the large entitlement programs listed above on to State governments.

(b)We do not believe that this rule will significantly or uniquely affect small governments. As discussed in the draft economic analysis, anticipated future impacts in areas proposed for final designation as critical habitat will be borne by the Federal Government; in areas proposed for exclusion from the final designation, the majority of the total anticipated upper-bound future impacts will be borne by the RCWD, with private landowners, local government, and Federal and State governments bearing the rest. The Federal government is not considered a small governmental jurisdiction or entity by the SBA, and neither is the RCWD because it services a population exceeding the criteria for a “small entity.” Consequently, we do not believe that critical habitat designation would significantly or uniquely affect small government entities. As such, a Small Government Agency Plan is not required. Executive Order 12630—Takings In accordance with E.O. 12630 (“Government Actions and Interference with Constitutionally Protected Private Property Rights”), we have analyzed the potential takings implications of proposing critical habitat for *Berberis nevinii* in a takings implications assessment. The takings implications assessment concludes that this proposed designation of critical habitat for *B. nevinii* does not pose significant takings implications. References Cited A complete list of all references cited in this rulemaking is available upon request from the Field Supervisor, Carlsbad Fish and Wildlife Office (see ADDRESSES ). Authors The primary authors of this notice are the staff of the Nevada Fish and Wildlife Office and the Carlsbad Fish and Wildlife Office. List of Subjects in 50 CFR Part 17 Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation. Proposed Regulation Promulgation Accordingly, we propose to further amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as proposed to be amended at 72 FR 5552, February 6, 2007, as set forth below: PART 17—[AMENDED] 1. The authority citation for part 17 continues to read as follows: Authority: 16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 4201-4245; Pub. L. 99-625, 100 Stat. 3500; unless otherwise noted. 2. Critical habitat for *Berberis nevinii* (Nevin's barberry) in § 17.96(a), which was proposed to be added on February 6, 2007, at 72 FR 5552, is proposed to be amended by revising paragraphs (5)(ii), (5)(iv), and (5)(v), and by revising Map 1 in paragraph (5)(vii), as follows: § 17.96 Critical habitat—plants.

(a)*Flowering plants.* Family Berberidaceae: *Berberis nevinii* (Nevin's barberry)

(5)Unit 1. Agua Tibia/Vail Lake, Riverside County, California.

(ii)Subunit 1B for *Berberis nevinii,* Agua Tibia Mountain Foothills Subunit, Riverside County, California. From USGS 1:24,000 quadrangle Vail Lake, lands bounded by the following UTM NAD27 coordinates (E, N): 504200, 3702900; 504300, 3702900; 504300, 3702800; 504200, 3702800; thence returning to 504200, 3702900.

(iv)Subunit 1D for *Berberis nevinii,* North of Vail Lake Subunit, Riverside County, California. From USGS 1:24,000 quadrangles Sage and Vail Lake, lands bounded by the following UTM NAD27 coordinates (E, N): 502600, 3706600; 502900, 3706600; 502900, 3706300; 502626, 3706300; thence follow the 1,461 foot Vail lake contour to 502600, 3706368; thence returning to 502600, 3706600.

(v)Subunit 1E for *Berberis nevinii,* South of Vail Lake/Peninsula Subunit, Riverside County, California. From USGS 1:24,000 quadrangle Vail Lake, lands bounded by the following UTM NAD27 coordinates (E, N): 503300, 3704300; 503600, 3704300; 503600, 3704100; 503500, 3704100; 503500, 3703900; 503200, 3703900; 503200, 3704100; 503100, 3704100; 503100, 3704600; 502700, 3704600; 502700, 3704700; 502300, 3704700; 502300, 3704500; 502200, 3704500; 502200, 3704200; 502000, 3704200; 502000, 3704000; 501600, 3704000; 501600, 3704290; thence follow the 1,461 foot Vail lake contour to 503300, 3704595; thence returning to 503300, 3704300. Continuing to lands bounded by the following UTM NAD27 coordinates (E, N): 501700, 3705100; 501812.94, 3705100; thence follow the 1,461 foot Vail lake contour to 501700, 370444.25; thence returning to 501700, 3705100.

(vii)Map of Subunits 1A through 1F (Map 1) follows: BILLING CODE 4310-55-P EP17OC07.015 Dated: October 5, 2007. David M. Verhey, Assistant Secretary for Fish and Wildlife and Parks. [FR Doc. 07-5063 Filed 10-16-07; 8:45 am]

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