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Code · REGISTER · 2007-12-20 · Federal Aviation Administration (FAA), DOT · Proposed Rules

Proposed Rules. Notice of proposed rulemaking (NPRM)

52,726 words·~240 min read·/register/2007/12/20/07-6152

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

BILLING CODE 4910-13-C DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0368; Directorate Identifier 2007-NM-050-AD] RIN 2120-AA64 Airworthiness Directives; BAE Systems (Operations) Limited Model BAe 146-100A, -200A, and -300A Series 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: Cracking has been found on the centre fuselage top aft longeron at Rib ‘0,’ on an in-service aircraft. * * * This condition could result in reduced structural integrity of the airplane. The proposed AD would require actions that are intended to address the unsafe condition described in the MCAI. DATES: We must receive comments on this proposed AD by January 22, 2008. ADDRESSES: • *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
(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-2007-0368; Directorate Identifier 2007-NM-050-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 The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2006-0215, dated July 14, 2006 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: Cracking has been found on the centre fuselage top aft longeron at Rib ‘0’ on an in-service aircraft. Subsequent investigation has indicated that the currently defined threshold and repeat inspection period must be reduced, and the area of inspection expanded for the BAe 146 series 100 and 200. For the BAe146 series 300, only the repeat inspection period must be reduced, and the area of inspection expanded. Cracking on the center fuselage top aft longeron at Rib ‘0,’ could result in reduced structural integrity of the airplane. Corrective actions include repetitive inspections of the center fuselage top aft longeron for cracking and repair/replacement if necessary. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information BAE Systems (Operations) Limited has issued Service Bulletin ISB.53-173, Revision 2, dated March 28, 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 8 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 $640, or $640 per product. Authority for This Rulemaking Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority. We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action. Regulatory Findings We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify this proposed regulation: 1. Is not a “significant regulatory action” under Executive Order 12866; 2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and 3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Safety. The Proposed Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows: PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new AD: **BAE Systems (Operations) Limited (Formerly British Aerospace Regional Aircraft):** Docket No. FAA-2007-0368; Directorate Identifier 2007-NM-050-AD. Comments Due Date
(a)We must receive comments by January 22, 2008. Affected ADs
(b)None. Applicability
(c)This AD applies to all BAE Systems (Operations) Limited Model BAE 146-100A, -200A, and -300A series airplanes; certificated in any category. Subject
(d)Air Transport Association
(ATA)of America Code 53: Fuselage. Reason
(e)The mandatory continuing airworthiness information
(MCAI)states: Cracking has been found on the centre fuselage top aft longeron at Rib ‘0’ on an in-service aircraft. Subsequent investigation has indicated that the currently defined threshold and repeat inspection period must be reduced, and the area of inspection expanded for the BAe146 series 100 and 200. For the BAe146 series 300, only the repeat inspection period must be reduced, and the area of inspection expanded. Cracking on the center fuselage top aft longeron at Rib ‘0’ could result in reduced structural integrity of the airplane. Corrective actions include repetitive inspections of the center fuselage top aft longeron for cracking and repair/replacement if necessary. Actions and Compliance
(f)Unless already done, do the following actions.
(1)For all BAE 146-100A and BAE 146-200A series airplanes pre-mod HCM01709B or HCM01709C that have not been inspected in accordance with Maintenance Review Board Report
(MRBR)SSI/SII Task No. 53-20-140A (Maintenance Planning Document
(MPD)task 532040-SDI-10000-3) or BAE Systems (Operations) Limited Service Bulletin ISB.53-173 Revision 1, dated May 19, 2004, as of the effective date of this AD: Do the actions in paragraphs (f)(1)(i) and (f)(1)(ii) of this AD at the applicable compliance time, and do all applicable repairs and replacements before further flight.
(i)Inspect and repair cracking of the forward six bolt bores between the subframe and frame 30 in accordance with paragraph 2.B of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, before the accumulation of 17,000 total flight cycles, or within 500 flight cycles after the effective date of this AD, whichever occurs later. If the damage exceeds limits specified in the structural repair manual (SRM), before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 5,000 flight cycles, except as provided by paragraph (f)(3) of this AD.
(ii)Inspect and repair cracking of the remaining fastener bores between the sub-frame and frame 30 in accordance with paragraph 2.B of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, before the accumulation of 17,000 total flight cycles, or within 4,000 flight cycles after the effective date of this AD, whichever occurs later. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 11,900 flight cycles, except as provided by paragraph (f)(3) of this AD.
(2)For all BAe 146-100A and BAe 146-200A series airplanes pre-mod HCM01709B or HCM01709C that have been inspected in accordance with MRBR SSI/SII Task No. 53-20-140A (MPD task 532040-SDI-10000-3) or BAE Systems (Operations) Limited Service Bulletin ISB.53-173 Revision 1, May 19, 2004, as of the effective date of this AD: Do the actions in paragraphs (f)(2)(i), (f)(2)(ii), and (f)(2)(iii) of this AD at the applicable compliance time, and do all applicable repairs and replacements before further flight.
(i)Do an ultrasonic inspection and repair cracking of the forward six bolt bores between the subframe and frame 30 in accordance with paragraph 2.B and Appendix 2 of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, before the accumulation of 5,400 flight cycles since last inspection, or within 500 flight cycles after the effective date of this AD, whichever occurs later. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 5,000 flight cycles, except as provided by paragraph (f)(3) of this AD.
(ii)Do a high frequency eddy current inspection and repair cracking of the forward six bolt bores between the subframe and frame 30 in accordance with paragraph 2.B and Appendix 3 of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, within 4,000 flight cycles after the effective date of this AD. If the damage exceeds limits specified in the SRM, before further flight, contact BAE systems and repair. Repeat the inspection thereafter at intervals not to exceed 5,000 flight cycles, except as provided by paragraph (f)(3) of this AD.
(iii)Do a rotating eddy current inspection and repair cracking of the remaining fastener bores between the sub-frame and frame 30 in accordance with paragraph 2.B of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, and Nondestructive Test Manual
(NTM)Part 6 20-00-03, within 4,000 flight cycles after the effective date of this AD. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 11,900 flight cycles, except as provided by paragraph (f)(3) of this AD.
(3)For all BAe 146-100A and BAe 146-200A series airplanes pre-mod HCM01709B or HCM01709C that have had a replacement aft longeron installed: Prior to the accumulation of 17,000 flight cycles after the aft longeron replacement, or within 500 flight cycles after the effective date of this AD, whichever occurs later, inspect for cracking of the forward six bolt bores and the fastener bores between the sub-frame and frame 30, and repair any crack before further flight in accordance with paragraph 2.B of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 5,000 flight cycles for the forward six bolt bores, and 11,900 flight cycles for the remaining fastener bores between the sub-frame and frame 30. Replacing the longeron terminates the repetitive inspection requirements of paragraph (f)(1) and (f)(2) of this AD; post-replacement inspections must be done in accordance with this paragraph. Note 1: The threshold for an aircraft is reset if a replacement longeron is fitted.
(4)For all BAe 146-300A series airplanes pre-mod HCM01709A that have not been inspected in accordance with MRBR SSI/SII Task No. 53-20-140A (MPD (Maintenance Planning Document) task 532040-SDI-10000-3) or BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 1, dated May 19, 2004, as of the effective date of this AD: Do the actions in paragraphs (f)(4)(i) and (f)(4)(ii) of this AD at the applicable compliance time, and do all applicable repairs and replacements before further flight.
(i)Inspect and repair cracking of the forward six bolt bores between the subframe and frame 30 in accordance with paragraph 2.B of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, prior to the accumulation of 24,000 total flight cycles, or within 500 flight cycles after the effective date of this AD, whichever occurs later. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 4,000 flight cycles, except as provided by paragraph (f)(6) of this AD.
(ii)Inspect and repair cracking of the remaining fastener bores between the sub-frame and frame 30 in accordance with paragraph 2.B of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, at the later of 24,000 total flight cycles, or within 4,000 flight cycles after the effective date of this AD. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 11,900 flight cycles, except as provided by paragraph (f)(6) of this AD.
(5)For all BAe 146-300A series airplanes pre-mod HCM01709A that have been inspected in accordance with MRBR SSI/SII Task No. 53-20-140A (MPD task 532040-SDI-10000-3) or BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 1, May 19, 2004, as of the effective date of this AD: Do the actions in paragraphs (f)(5)(i), (f)(5)(ii), and (f)(5)(iii) of this AD at the applicable compliance time, and do all applicable repairs and replacements before further flight.
(i)Do an ultrasonic inspection and repair cracking of the forward six bores between the subframe and frame 30 in accordance with paragraph 2.B and Appendix 2 of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, within 4,000 flight cycles since last inspection, or within 500 flight cycles after the effective date of this AD, whichever occurs later. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 4,000 flight cycles except as provided by paragraph (f)(6) of this AD.
(ii)Do a high frequency eddy current inspection and repair cracking of the forward six bolt bores between the subframe and frame 30 in accordance with paragraph 2.B and Appendix 3 of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, within 4,000 flight cycles after the effective date of this AD. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 4,000 flight cycles, except as provided by paragraph (f)(6) of this AD.
(iii)Do a rotating eddy current inspection and repair cracking of the remaining fastener bores between the sub-frame and frame 30 in accordance with paragraph 2.B of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, and NTM Part 6 20-00-03 within 4,000 flight cycles after the effective date of this AD. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 11,900 flight cycles, except as provided by paragraph (f)(6) of this AD.
(6)For all BAe 146-300A series airplanes pre-mod HCM01709A that have had a replacement aft longeron installed: Prior to the accumulation of 24,000 flight cycles after the aft longeron replacement, or within 500 flight cycles after the effective date of this AD, whichever occurs later, inspect for cracking of the fastener bores between the sub-frame and frame 30, and repair any crack before further flight in accordance with paragraph 2.B. of BAE Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, March 28, 2006. If the damage exceeds limits specified in the SRM, before further flight, contact BAE Systems and repair. Repeat the inspection thereafter at intervals not to exceed 4,000 flight cycles for the forward six bolt bores, and 11,900 flight cycles for the remaining fastener bores between the sub-frame and frame 30. Replacing the longeron terminates the repetitive inspection requirements of paragraph (f)(4) and (f)(5) of this AD; new inspections must be done in accordance with this paragraph. Note 2: The threshold for an aircraft is reset if a replacement longeron is fitted. FAA AD Differences Note 3: This AD differs from the MCAI and/ or service information as follows: The MCAI specifies doing repetitive inspections until the airplane enters the life extension program (LEP). This program is not defined by the FAA. Operators of airplanes that enter the LEP may request an alternative method of compliance
(AMOC)for the repetitive inspections in accordance with the procedures specified in paragraph
(g)of this AD. Other FAA AD Provisions
(g)The following provisions also apply to this AD:
(1)*AMOC* s: The Manager, ANM-116, Transport Airplane Directorate, International Branch, 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.
(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information
(h)Refer to MCAI EASA Airworthiness Directive 2006-0215, dated July 14, 2006, and BAe Systems (Operations) Limited Service Bulletin ISB.53-173, Revision 2, dated March 28, 2006, for related information. Issued in Renton, Washington, on December 12, 2007. Michael J. Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-24699 Filed 12-19-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2007-0369; Directorate Identifier 2007-NM-258-AD] RIN 2120-AA64 Airworthiness Directives; Dassault Model Mystere-Falcon 50 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: Some occurrences have been reported where life rafts were difficult to remove from inside divan compartment. Investigations revealed that: —Life raft was incorrectly stowed, with deployment straps inboard; —Life raft had not been repacked to specified dimensions. * * 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 January 22, 2008. 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: Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425)227-1137; 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-2007-0369; Directorate Identifier 2007-NM-258-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 The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2006-0366, dated December 11, 2006 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states: Some occurrences have been reported where life rafts were difficult to remove from inside divan compartment. Investigations revealed that: —Life raft was incorrectly stowed, with deployment straps inboard; —Life raft had not been repacked to specified dimensions The purpose of this Airworthiness Directive
(AD)is to verify that all life rafts are stowed correctly with deployment straps outboard, and are repacked to specified dimensions. Corrective actions include correctly reinstalling an incorrectly stowed life raft, installing a properly repacked life raft, and installing placards. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Dassault has issued Service Bulletin F50-480, dated December 5, 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 25 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. Required parts would cost about $68 per product. Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these costs. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $3,700, or $148 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: **Dassault Aviation:** Docket No. FAA-2007-0369; Directorate Identifier 2007-NM-258-AD. Comments Due Date
(a)We must receive comments by January 22, 2008. Affected ADs
(b)None. Applicability
(c)This AD applies to Dassault Model Mystere-Falcon 50 airplanes, certificated in any category, serial numbers 294, 299, 301 through 304, 306, 307, 310, 313, 314, 316 through 320, 322 through 331, 334 through 337 and 339. Subject
(d)Air Transport Association
(ATA)of America Code 25: Equipment/Furnishings. Reason
(e)The mandatory continuing airworthiness information
(MCAI)states: Some occurrences have been reported where life rafts were difficult to remove from inside divan compartment. Investigations revealed that: —Life raft was incorrectly stowed, with deployment straps inboard; —Life raft had not been repacked to specified dimensions The purpose of this Airworthiness Directive
(AD)is to verify that all life rafts are stowed correctly with deployment straps outboard, and are repacked to specified dimensions. Corrective actions include correctly reinstalling an incorrectly stowed life raft, installing a properly repacked life raft, and installing placards. Actions and Compliance
(f)Unless already done, do the following actions.
(1)Within 10 flight cycles after the effective date of this AD: Verify that the life rafts are stowed correctly, with deployment straps outboard, in accordance with the instructions specified in Dassault Service Bulletin F50-480, dated December 5, 2006, and verify that the overall dimensions of the life raft hard pack do not exceed nominal values, as indicated in Part F50-480-1 of the service bulletin.
(i)If a life raft is found incorrectly stowed, before next flight, reinstall it in accordance with the instructions specified in Part F50-480-1 of the service bulletin.
(ii)If nominal values of the overall dimensions of the life raft hard pack are exceeded, within 3 months after the effective date of this AD, install a properly repacked life raft as instructed in Part F50-480-2 of the service bulletin. Note 1: Notice that with no life raft aboard, local national operating regulations may not allow some extended overwater flights.
(2)Within 3 months after the effective date of this AD: Install placards on the sofa in accordance with the instructions specified in Part F50-480-2 of Dassault Service Bulletin F50-480, dated December 5, 2006. 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, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. Send information to *ATTN:* Tom Rodriguez, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone
(425)227-1137; fax
(425)227-1149. Before using any approved AMOC on any airplane to which the AMOC applies, notify your appropriate principal inspector
(PI)in the FAA Flight Standards District Office (FSDO), or lacking a PI, your local FSDO.
(2)*Airworthy Product:* For any requirement in this AD to obtain corrective actions from a manufacturer or other source, use these actions if they are FAA-approved. Corrective actions are considered FAA-approved if they are approved by the State of Design Authority (or their delegated agent). You are required to assure the product is airworthy before it is returned to service.
(3)*Reporting Requirements:* For any reporting requirement in this AD, under the provisions of the Paperwork Reduction Act, the Office of Management and Budget
(OMB)has approved the information collection requirements and has assigned OMB Control Number 2120-0056. Related Information
(h)Refer to MCAI EASA Airworthiness Directive 2006-0366, dated December 11, 2006, and Dassault Service Bulletin F50-480, dated December 5, 2006, for related information. Issued in Renton, Washington, on December 12, 2007. Michael J. Kaszycki, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E7-24698 Filed 12-19-07; 8:45 am] BILLING CODE 4910-13-P SECURITIES AND EXCHANGE COMMISSION 17 CFR PART 239 [Release No. 33-8871; File No. S7-30-07] RIN 3235-AK02 Revisions to Form S-11 To Permit Historical Incorporation by Reference AGENCY: Securities and Exchange Commission. ACTION: Proposed rule. SUMMARY: We are proposing to amend Form S-11, a registration statement used by real estate entities to register offerings under the Securities Act of 1933. The amendments would permit an entity that has filed at least one annual report and that is current in its reporting obligations under the Securities Exchange Act of 1934 to incorporate by reference into Form S-11 information from its previously filed Exchange Act reports and documents. The proposed amendments are identical to amendments to Forms S-1 and F-1 previously adopted by the Commission and effective as of December 1, 2005. DATES: Comments should be received on or before January 22, 2008. ADDRESSES: Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *http://www.sec.gov/rules/proposed.shtml* ); • Send an e-mail to *rule-comments@sec.gov.* Please include File Number S7-30-07 on the subject line; or • Use the Federal Rulemaking Portal ( *http://www.regulations.gov* ). Follow the instructions for submitting comments. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number S7-30-07. This file number should be included on the subject line if e-mail is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/proposed.shtml* ). Comments are also available for public inspection and copying in the Commission's Public Reference Room, 100 F Street, NE., Washington, DC 20549. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. FOR FURTHER INFORMATION CONTACT: Michael McTiernan at
(202)551-3852 or Daniel Greenspan at
(202)551-3430, Division of Corporation Finance, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-3010. SUPPLEMENTARY INFORMATION: On June 29, 2005, we adopted rules 1 that modified the registration, communications and offering processes under the Securities Act of 1933. 2 In order to integrate further the Securities Act and the Securities Exchange Act of 1934, 3 the Commission adopted amendments to Form S-1 4 and Form F-1 5 to permit a reporting issuer that has filed at least one annual report and that is current in its reporting obligation under the Exchange Act to incorporate by reference into its Form S-1 or Form F-1 information from its previously filed Exchange Act reports and documents. At that time, we did not adopt similar amendments to Form S-11. 6 We believe it is appropriate to extend to issuers using Form S-11 the same ability to take advantage of incorporation by reference. The proposed amendments therefore would make the requirements of Form S-11 consistent with Forms S-1 and F-1 with respect to incorporation by reference. 1 See *Securities Offering Reform* , Release No. 33-8591 (Jul. 19, 2005) [70 FR 44722]. 2 15 U.S.C. 77a *et seq.* 3 15 U.S.C. 78a *et seq.* 4 17 CFR 239.13. 5 17 CFR 239.33. 6 17 CFR 239.18. I. Discussion A. Background Form S-11 is the form that real estate entities must use to register offerings under the Securities Act. 7 The form is mandatory for the registration of securities issued by real estate investment trusts and securities issued by other issuers whose business is primarily that of acquiring and holding for investment real estate, interests in real estate, or interests in other issuers whose business is primarily that of acquiring and holding real estate or interests in real estate for investment. 8 Form S-11 currently does not permit an issuer to satisfy the disclosure requirements of the form through incorporation by reference to the reports and other documents that the issuer previously has filed under the Exchange Act. 7 Real estate entities may also use Forms S-3 and S-4 if they meet the applicable eligibility requirements of those forms. When no other form is available, these entities are required to file on Form S-11 rather than Form S-1. 8 See General Instruction A of Form S-11. B. Reasons For Proposal On June 29, 2005 we adopted amendments to Forms S-1 and F-1 to permit companies filing those forms to incorporate by reference information from their previously filed Exchange Act reports and documents. 9 The purpose of the amendments was to integrate further the Exchange Act and the Securities Act. 10 The ability to incorporate by reference is conditioned on the company having filed its annual report for the most recent fiscal year, being current in its reporting obligations under the Exchange Act, and making the incorporated Exchange Act reports and documents available and accessible on a Web site maintained by or for the registrant. 11 Blank check companies, shell companies and penny stock registrants are not permitted to use incorporation by reference. Successor registrants may incorporate by reference if their predecessors are eligible. 12 9 See Release No. 33-8591. 10 Id. at 237. 11 See General Instruction VII of Form S-1 and General Instruction VI of Form F-1. 12 Id. At that time, we did not adopt a similar amendment to Form S-11. However, we believe that Form S-11 should be consistent with Form S-1 with respect to incorporation by reference. Both Form S-11 and Form S-1 are long-form registration statements intended for new and unseasoned issuers. The only substantive difference between the two forms is that Form S-11 contains certain additional disclosure requirements specific to real estate entities. Since the Commission's interest in integrating disclosure under the Exchange Act and Securities Act extends equally to the disclosure obligations of real estate entities, we propose to amend Form S-11 to permit incorporation by reference on the same terms as we permit it in Forms S-1 and F-1. C. Proposed Amendments to Form S-11 1. Eligibility We are proposing to permit a reporting issuer that has filed at least one annual report and that is current in its reporting obligations under the Exchange Act to incorporate by reference into its Form S-11 information from previously filed Exchange Act reports and documents. Under the proposal, a successor registrant would be able to incorporate information by reference on the same terms if its predecessor were eligible to do so. 13 Consistent with Form S-1, the following issuers would not be able to incorporate by reference into a Form S-11: 13 The succession would have to be either primarily for the purpose of changing the state or jurisdiction of incorporation of the issuer or forming a holding company and the assets and liabilities of the successor would have to be substantially the same as the predecessor at the time of the succession, or all of the predecessor issuers would have to be eligible at the time of the succession and the issuer must continue to be eligible. • Reporting issuers who are not current in their Exchange Act reports; 14 14 As with Forms S-1, F-1 and S-3, under the proposal, to be current, at the time of filing the registration statement, the issuer must have filed all materials required to be filed pursuant to Exchange Act Sections 13, 14 or 15(d) [15 U.S.C. 78m, 78n, or 78o(d)] during the preceding 12 calendar months (or for such shorter period that the issuer was required to file such materials). • Issuers who are or were, or any of whose predecessors were during the past three years: ○ Blank check issuers; ○ Shell companies (other than business combination related shell companies); or ○ Issuers for offerings of penny stock. 15 15 See Securities Act Rule 419(a)(2) [17 CFR 230.419(a)(2)], Exchange Act Rule 3a51-1 [17 CFR.240.3a51-1] and Securities Act Rule 405 [17 CFR 230.405)] for definitions of “blank check company,” “penny stock” and “shell company,” respectively. In addition, to enhance the availability to investors of incorporated information, the ability to incorporate by reference would be conditioned on the issuer making its incorporated Exchange Act reports and other materials readily accessible on a Web site maintained by or for the issuer. By conditioning the ability to incorporate by reference on the ready accessibility of an issuer's incorporated Exchange Act reports and other materials on its Web site, we are proposing to provide investors the ability to obtain the information from those reports and materials at the same time that they would have been able to obtain the information if it was set forth directly in the registration statement. Issuers would be able to satisfy this condition by including hyperlinks directly to the reports or other materials filed on EDGAR or on another third-party Web site where the reports or other materials are made available in the appropriate time frame and access to the reports or other materials is free of charge to the user. 2. Procedural Requirements As proposed, the prospectus in the registration statement at effectiveness would identify all previously filed Exchange Act reports and materials, such as proxy and information statements, that are incorporated by reference. There would be no permitted incorporation by reference of Exchange Act reports and materials filed after the registration statement is effective—known as “forward incorporation by reference.” Under the proposal, an issuer eligible to incorporate by reference its Exchange Act reports and other materials into its Form S-11 would include the following in the prospectus that is part of the registration statement: • A list of the incorporated reports and materials; • A statement that it will provide copies of any incorporated reports or materials on request; • An indication that the reports and materials are available from us through our EDGAR system or our public reference room; • Identification of the issuer's Web site address where such incorporated reports and other materials can be accessed; and • Required disclosures regarding material changes in, or updates to, the information that is incorporated by reference from an Exchange Act report or other material required to be filed. D. Request for Comment We request and encourage any interested person to submit comments on the proposal and any other matters that might have an impact on the proposal. With respect to any comments, we note that such comments are of greatest assistance to our rulemaking initiative if accompanied by supporting data and analysis of the issues addressed in those comments. II. Paperwork Reduction Act A. Background The proposed amendments to Form S-11 contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995. 16 We are submitting these to the Office of Management and Budget for review and approval in accordance with the Paperwork Reduction Act. 17 The title for this information is “Form S-11” (OMB Control No. 3235-0067). 16 44 U.S.C. 3501 *et seq.* 17 44 U.S.C. 3507(d) and 5 CFR 1320.11. We adopted existing Form S-11 pursuant to the Securities Act. This form sets forth the disclosure requirements for registration statements prepared by real estate entities to provide investors with the information they need to make informed investment decisions in registered offerings. Our proposed amendments to Form S-11 are intended to allow issuers that are required to use Form S-11 to incorporate by reference previously filed Exchange Act reports and documents. The proposed amendments would conform Form S-11 to Forms S-1 and F-1 with respect to incorporation by reference. The hours and costs associated with preparing disclosure, filing forms, and retaining records constitute reporting and cost burdens imposed by the collection of information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information requirement unless it displays a currently valid control number. The information collection requirements related to registration statements on Form S-11 are mandatory. There is no mandatory retention period for the information disclosed, and the information disclosed would be made publicly available on the EDGAR filing system. B. Summary of Information Collections The proposals would decrease existing disclosure requirements for eligible issuers by eliminating the need to repeat information in a Form S-11 when that information was previously disclosed in Exchange Act filings. Any reporting issuer that has filed at least one annual report and that is current in its reporting obligation would be permitted to incorporate information by reference into its registration statement on Form S-11. C. Paperwork Reduction Act Burden Estimates For purposes of the Paperwork Reduction Act, we expect the annual decrease in the paperwork burden for companies to comply with Form S-11 to be approximately 36,811.5 hours of in-house company personnel time and approximately $44,173,800 for the services of outside professionals. 18 These estimates include the time and the cost of preparing and reviewing disclosure, filing documents, and retaining records. These estimates were based on the following assumptions: 18 Consistent with recent rulemakings and based on discussions with several private law firms, we estimate that the cost of outside professionals retained by the issuer is an average of $400 per hour. • Each year, 82 registration statements on Form S-11, including post-effective amendments, would incorporate information by reference; 19 19 We estimate that issuers that would have been eligible to incorporate by reference under the proposals filed 14 new registration statements on Form S-11 and 68 post-effective amendments to registration statements on Form S-11 (excluding post-effective amendments filed for the purpose of deregistering shares) from September 1, 2006 to August 31, 2007. With the elimination of small business registration forms, we estimate that the number of registration statements filed on Form S-11 will increase by 15 for a total of 29 new registration statements. See SEC Press Release No. 2007-233 (Nov. 15, 2007), available at *http://www.sec.gov/news/press/2007/2007-233.htm* . • The estimated paperwork burden for a Form S-11 that does not incorporate information by reference is 1,977 hours, which consists of 494.25 internal hours and 1,482.75 professional hours. 20 20 Assumes that 25% of total burden is borne by internal staff and 75% by professionals. • The estimated paperwork burden for a Form S-11 that incorporates information by reference would be the same as the burden currently imposed by Form S-3, which is 459 hours, which consists of 114.75 internal hours and 344.25 professional hours. • The amount of time eliminated for each Form S-11 that incorporates information by reference would be 1,518 hours per form (1,977 hours for a Form S-11 that does not incorporate information by reference minus 459 hours for a Form S-11 that incorporates information by reference). • We estimate that the annual decrease in compliance burden resulting from the proposal would be 147,246 hours (97 registration statements multiplied by 1,518 hours per form). This would include 36,811.5 hours of issuer personnel time (97 registration statements times 379.5 21 hours of issuer personnel time per registration statement) and 110,434.5 hours of professional time (97 registration statements times 1,138.5 22 hours of professional time per registration statement). 21 Reflects the difference between the amount of internal time required to prepare a Form S-11 without incorporation by reference (494.25 hours) and the amount of internal time required to prepare a Form S-11 with incorporation by reference (114.75 hours). 22 Reflects the difference between the amount of professional time required to prepare a Form S-11 without incorporation by reference (1,483 hours) and the amount of professional time required to prepare a Form S-11 with incorporation by reference (344.25 hours). • The annual cost savings would be approximately $44,173,800 for the services of outside professionals. D. Request for Comment We request comment in order to evaluate the accuracy of our estimate of the burden of the collection of information. Any member of the public may direct to us any comments concerning the accuracy of these burden estimates. Persons submitting comments on the collection of information requirements should direct their comments to the OMB, Attention: Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Washington, DC 20503, and send a copy of the comments to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090, with reference to File No. S7-30-07. Requests for materials submitted to OMB by the Commission with regard to these collections of information should be in writing, refer to File No. S7-30-07, and be submitted to the Securities and Exchange Commission, Public Reference Room, 100 F Street, NE., Washington, DC, 20549-0609. OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this release. Because the OMB is required to make a decision concerning the collections of information between 30 and 60 days after publication, your comments are best assured of having their full effect if the OMB receives them within 30 days of publication. III. Cost-Benefit Analysis A. Summary of Proposal We are proposing revisions to Form S-11 that would allow real estate entities to take advantage of incorporation by reference for their previously filed Exchange Act reports and documents. Forms S-1 and F-1, which are similar long-form registration statements, currently permit this type of incorporation by reference. The proposed amendment, if adopted, would amend Form S-11 to permit incorporation by reference on the same terms as currently provided in Forms S-1 and F-1. The purpose of the amendments is to integrate further the disclosure obligations of the Exchange Act and the Securities Act for real estate entities. B. Benefits We anticipate that our proposal would enable real estate entities to access the capital markets at a lower cost. It would enable eligible issuers to use their Exchange Act filings to satisfy a portion of their Form S-11 disclosure requirements without having to incur costs to replicate information that they already have disclosed in previously filed Exchange Act reports and other documents. For purposes of our Paperwork Reduction Act analysis, we estimate that our proposed amendments to Form S-11 would reduce the annual paperwork burden by approximately 36,811.5 hours for issuer personnel time at a cost of approximately $6,442,013 23 and by a cost of approximately $44,173,800 for the services of outside professionals. In addition, we believe that the reduction in the size of the prospectus as a result of incorporation by reference would also result in some cost savings and efficiencies in printing and delivering prospectuses. 23 Consistent with recent rulemaking releases, we estimate the value of work performed by the company internally at a cost of $175 per hour. The proposed amendments are intended to result in regulatory simplification and efficiency by permitting incorporation by reference on Form S-11 and conforming the requirements of Form S-11 to the requirements of Forms S-1 and F-1 in that respect. Incorporation by reference would allow eligible issuers to avoid duplicating disclosure in Form S-11 when the information has already been disclosed in Exchange Act reports. In addition, the revisions would simplify the disclosure regime for long-form registration statements by permitting incorporation by reference equally, regardless of industry. C. Costs We expect that, if adopted, the proposed amendments would result in some ongoing costs to issuers that elect to use incorporation by reference. These potential costs relate to the issuer's obligation to make the incorporated Exchange Act reports and documents available on its Web site and include creating and/or maintaining a Web site as well as actually posting the required filings on the Web site. However, we believe that a substantial majority of issuers eligible to use incorporation by reference already maintain Web sites and thus would not have to incur any additional costs to establish a new Web site for this purpose. In addition, we believe that many issuers eligible to use incorporation by reference already post their Exchange Act reports on their Web sites. Those that do not would incur incremental costs to post the required filings. Given that the proposed amendments would not mandate use of incorporation by reference, issuers that are unwilling to bear the cost of complying with the Web site requirement could simply elect not to incorporate information by reference. We also recognize that permitting incorporation by reference may impose an analytical burden on investors. For example, for offerings on Form S-11 today, much of the relevant information regarding an offering and the issuer is required to be contained in the registration statement. Under our proposal, offerings pursuant to Form S-11 could require an investor to assemble and assimilate information from various Exchange Act reports and the registration statement in order to compile all of the relevant information regarding an offering. Investors would have to compile the information integrated into the registration statement or delivered by means outside of the prospectus. We note, however, that Securities Act Forms S-3 and F-3 have long permitted incorporation by reference from the issuer's Exchange Act reports, as have Forms S-1 and F-1 since December 2005, and we know of no indications that investors are unduly burdened when investing in offerings registered on these forms. D. Requests for Comments We request comment on all aspects of the cost-benefit analysis, including identification of any additional costs or benefits of, or suggested alternatives to, the proposed amendments. We also request that those submitting comments provide empirical data and other factual support for their views to the extent possible. IV. Consideration of Promotion on Efficiency, Competition and Capital Formation Section 2(b) of the Securities Act, 24 requires us, when engaged in rulemaking where we are required to consider or determine whether an action is necessary or appropriate in the public interest, to consider, in addition to the protection of investors, whether the action will promote efficiency, competition and capital formation. 24 15 U.S.C. 77b(b). The proposed amendment, if adopted, would amend Form S-11 to permit incorporation by reference on terms equivalent to that currently provided in Forms S-1 and F-1. We believe the amendments would provide benefits, as discussed in further detail above, by reducing the costs of complying with the Form S-11 disclosure requirements by enabling eligible issuers to incorporate their Exchange Act filings. Eased filing burdens resulting from the proposed amendments would promote efficiency in capital formation for real estate entities and may provide a competitive benefit to entities filing on Form S-11 by allowing them to incorporate their periodic reports by reference to the same extent as registrants filing on Forms S-1 and F-1. We request comment on whether the proposed amendment, if adopted, would promote efficiency, competition and capital formation. We request that commenters provide empirical data and other factual support for their views if possible. V. Initial Regulatory Flexibility Act Analysis This Initial Regulatory Flexibility Analysis has been prepared in accordance with 5 U.S.C. 603. It relates to proposed amendments to Form S-11. A. Reasons for the Proposed Action In 2005, the Commission adopted revisions to Forms S-1 and F-1 to permit incorporation by reference from previously filed Exchange Act reports and other documents. Currently, real estate entities are not permitted to use Form S-1 to register offerings under the Securities Act. Consequently, these entities are unable to take advantage of the important benefit of incorporation by reference that is enjoyed by companies in all other industries that file registration statements on Form S-1. The ability to use a prospectus that does not need to include information provided in previous Exchange Act filings permits companies to streamline the preparation of registration statements and raise capital more efficiently. Companies that are not permitted to incorporate by reference have a greater burden in preparing registration statements in connection with their public offerings. We believe there is no reason to distinguish between real estate entities and other industries for purposes of incorporation by reference. B. Objectives The purpose of the proposed amendments is to further integrate the Exchange Act and Securities Act by amending Form S-11 to permit incorporation by reference of Exchange Act filings on terms equivalent to that currently provided in Forms S-1 and F-1. The amendments would extend an important benefit to real estate entities. C. Legal Basis We are proposing the amendments under the authority in Sections 6, 7, 8, 10 and 19(a) of the Securities Act, as amended. D. Small Entities Subject to the Proposed Amendments The Regulatory Flexibility Act defines “small entity” to mean “small business,” “small organization,” or “small governmental jurisdiction.” 25 The Commission's rules define “small business” and “small organization” for purposes of the Regulatory Flexibility Act for each of the types of entities regulated by the Commission. 26 Roughly speaking, a “small business” and “small organization,” when used with reference to an issuer other than an investment company, means an issuer with total assets of $5 million or less on the last day of its most recent fiscal year. We estimate that there are approximately 1,100 issuers, other than investment companies, that may be considered reporting small entities. 27 The proposed amendments would apply to all issuers required to file registration statements on Form S-11. 25 5 U.S.C. 601(6). 26 Rules 157 under the Securities Act [17 CFR 230.157], 0-10 under the Exchange Act [17 CFR 240.0-10] and 0-10 under the Investment Company Act [17 CFR 270.0-10] contain the applicable definitions. 27 The estimated number of reporting small entities is based on 2007 data, including the Commission's EDGAR database and Thomson Financial's Worldscope database. As previously noted, in the 12 months ended August 31, 2007, 82 registration statements on Form S-11 were filed, including new registration statements and post-effective amendments. We estimate that four of those were filed by small entities. We also estimate that approximately 15 registration statements were filed on Form SB-2 in the last fiscal year covering transactions by real estate entities that in the future will be required to register on Form S-11. 28 Thus, we estimate that 19 registration statements by small entities would be subject to the proposed amendments. 28 See SEC Press Release No. 2007-233 (Nov. 15, 2007), available at *http://www.sec.gov/news/press/2007/2007-233.htm* . We request comment on the number of small entities that would be impacted by our proposals, including any available empirical data. E. Reporting, Recordkeeping and Other Compliance Requirements The proposed amendments are expected to impact all capital raising and selling security holder transactions that are registered under the Securities Act on Form S-11. Small entities required to register on Form S-11 would be able to take advantage of the ability to incorporate by reference previously filed Exchange Act reports and documents. We expect that permitting the incorporation by reference of previously filed Exchange Act reports and documents would reduce the costs incurred by small entities of preparing a registration statement on Form S-11 by $9,914,438. 29 29 See n. 18 and n. 23. These estimates were based on the following assumptions: • Each year, 19 registration statements filed by small entities on Form S-11, including post-effective amendments, could incorporate information by reference. • The paperwork burden for a Form S-11 that does not incorporate information by reference is 1,977 hours, which consists of 494.25 internal hours and 1,482.75 professional hours. 30 30 Assumes that 25% of total burden borne by internal staff and 75% by professionals. • The paperwork burden for a Form S-11 that incorporates information by reference would be the same as the burden currently imposed by Form S-3, which is 459 hours, which consists of 114.75 internal hours and 344.25 professional hours. • The amount of time eliminated for each Form S-11 that incorporates information by reference would be 1,518 hours per form (1,977 hours for a Form S-11 that does not incorporate information by reference minus 459 hours for a Form S-11 that incorporates information by reference). • We estimate that the annual decrease in compliance burden to small entities resulting from the proposal would be 28,842 hours (19 registration statements multiplied by 1,518 hours per form). This would include 7,210.5 hours of issuer personnel time (19 registration statements times 379. 5 31 hours of issuer personnel time per registration statement) and 21,631.5 hours of professional time (19 registration statements times 1,138.5 32 hours of professional time per registration statement). 31 Reflects the difference between the amount of internal time required to prepare a Form S-11 without incorporation by reference (494.25 hours) and the amount of internal time required to prepare a Form S-11 with incorporation by reference (114.75 hours). 32 Reflects the difference between the amount of professional time required to prepare a Form S-11 without incorporation by reference (1,483 hours) and the amount of professional time required to prepare a Form S-11 with incorporation by reference (344.25 hours). • The annual cost savings to small entities would be approximately $8,652,600 for the services of outside professionals. We expect that small entities eligible to register on Form S-11 may need to incur some insignificant additional costs related to complying with the Web site requirements related to incorporation by reference, although issuers could avoid such costs by electing not to incorporate information by reference. We encourage written comments regarding this analysis. We solicit comments as to whether the proposed amendments could have an effect that we have not considered. We request that commenters describe the nature of any impact on small entities and provide empirical data to support the extent of the impact. F. Duplicative, Overlapping or Conflicting Federal Rules We believe that the proposed amendments would not duplicate, or overlap or conflict with other federal rules. G. Significant Alternatives The Regulatory Flexibility Act directs us to consider significant alternatives that would accomplish the stated objective, while minimizing any significant adverse impact on small entities. In connection with the proposal, the Regulatory Flexibility Act requires us to consider the following alternatives: 1. Establishing different compliance or reporting requirements that take into account the resources of small entities; 2. The clarification, consolidation, or simplification of disclosure for small entities; 3. Use of performance standards rather than design standards; and 4. Exempting smaller entities from coverage of the disclosure requirements or any part thereof. Our proposal would extend the benefit of incorporation by reference to small entities that are required to file registration statements on Form S-11. Establishing a different standard for small business entities would impose a greater compliance burden on small entities and would be inconsistent with the benefits provided for small entities that register on Form S-1 and Form F-1. H. Solicitation of Comment We encourage comments with respect to any aspect of this Initial Regulatory Flexibility Analysis. In particular, we request comments regarding: • The number of small entities that may be affected by the proposed amendments; • The existence or nature of the potential impact of the proposed amendments on small entities as discussed in this analysis; and • How to quantify the impact of the proposed amendments. We ask those submitting comments to describe the nature of any impact and provide empirical data supporting the extent of the impact. These comments will be considered in the preparation of the Final Regulatory Flexibility Analysis, if the proposed amendments are adopted, and will be placed in the same public file as comments on the proposed amendments themselves. VI. Small Business Regulatory Enforcement Fairness Act For purposes of the Small Business Regulatory Enforcement Fairness Act of 1996, 33 a rule is “major” if it has resulted, or is likely to result in: 33 Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). • An annual effect on the U.S. economy of $100 million or more; • A major increase in costs or prices for consumers or individual industries; or • Significant adverse effects on competition, investment or innovation. We request comment on whether our proposal would be a “major rule” for purposes of the Small Business Regulatory Enforcement Fairness Act. We solicit comment and empirical data on: • The potential effect on the U.S. economy on an annual basis; • Any potential increase in costs or prices for consumers or individual industries; and • Any potential effect on competition, investment, or innovation. VII. Statutory Authority and Text of the Proposed Amendments The amendments described in this release are being proposed under the authority set forth in Sections 6, 7, 8, 10 and 19(a) of the Securities Act, as amended. List of Subjects in 17 CFR Part 239 Reporting and recordkeeping requirements, Securities. For the reasons set out in the preamble, the Commission proposes to amend title 17, chapter II, of the Code of Federal Regulations as follows: PART 239—FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933 1. The authority citation for part 239 continues to read in part as follows: Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78u-5, 78w(a), 78ll, 77mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 80a-29, 80a-30, and 80a-37, unless otherwise noted. 2. Amend Form S-11 (referenced in § 239.18) as follows: a. Add General Instruction H; b. In Part I, add Item 28A; c. Redesignate Item 29 as Item 29A; and d. Add new Item 29. The additions read as follows: Note: The text of Form S-11 does not, and this amendment will not, appear in the Code of Federal Regulations. FORM S-11 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES GENERAL INSTRUCTIONS H. Eligibility To Use Incorporation by Reference If a registrant meets the following requirements immediately prior to the time of filing a registration statement on this Form, it may elect to provide information required by Items 3 through 28 of this Form in accordance with Item 28A and Item 29 of this Form: 1. The registrant is subject to the requirement to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”). 2. The registrant has filed all reports and other materials required to be filed by Sections 13(a), 14, or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports and materials). 3. The registrant has filed an annual report required under Section 13(a) or Section 15(d) of the Exchange Act for its most recently completed fiscal year. 4. The registrant is not:
(a)And during the past three years neither the registrant nor any of its predecessors was:
(i)A blank check company as defined in Rule 419(a)(2) (§ 230.419(a)(2) of this chapter);
(ii)A shell company, other than a business combination related shell company, each as defined in Rule 405 (§ 230.405 of this chapter); or
(iii)A registrant for an offering of penny stock as defined in Rule 3a51-1 of the Exchange Act (§ 240.3a51-1 of this chapter).
(b)Registering an offering that effectuates a business combination transaction as defined in Rule 165(f)(1) (§ 230.165(f)(1) of this chapter). 5. If a registrant is a successor registrant it shall be deemed to have satisfied conditions 1, 2, 3, and 4(b) above if:
(a)Its predecessor and it, taken together, do so, provided that the succession was primarily for the purpose of changing the state of incorporation of the predecessor or forming a holding company and that the assets and liabilities of the successor at the time of succession were substantially the same as those of the predecessor; or
(b)All predecessors met the conditions at the time of succession and the registrant has continued to do so since the succession. 6. The registrant makes its periodic and current reports filed pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference pursuant to Item 28A or Item 29 of this Form readily available and accessible on a Web site maintained by or for the registrant and containing information about the registrant. PART I—INFORMATION REQUIRED IN PROSPECTUS Item 28A. Material Changes If the registrant elects to incorporate information by reference pursuant to General Instruction H, describe any and all material changes in the registrant's affairs which have occurred since the end of the latest fiscal year for which audited financial statements were included in the latest Form 10-K or Form 10-KSB and which have not been described in a Form 10-Q, Form 10-QSB, or Form 8-K filed under the Exchange Act. Item 29. Incorporation of Certain Information by Reference If the registrant elects to incorporate information by reference pursuant to General Instruction H:
(a)It must specifically incorporate by reference into the prospectus contained in the registration statement the following documents by means of a statement to that effect in the prospectus listing all such documents:
(1)The registrant's latest annual report on Form 10-K or Form 10-KSB filed pursuant to Section 13(a) or Section 15(d) of the Exchange Act which contains financial statements for the registrant's latest fiscal year for which a Form 10-K or Form 10-KSB was required to have been filed; and
(2)All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act or proxy or information statements filed pursuant to Section 14 of the Exchange Act since the end of the fiscal year covered by the annual report referred to in paragraph (a)(1) of this Item. Note to Item 29(a). Attention is directed to Rule 439 (§ 230.439 of this chapter) regarding consent to use of material incorporated by reference. (b)(1) The registrant must state:
(i)That it will provide to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports or documents that have been incorporated by reference in the prospectus contained in the registration statement but not delivered with the prospectus;
(ii)That it will provide these reports or documents upon written or oral request;
(iii)That it will provide these reports or documents at no cost to the requester;
(iv)The name, address, telephone number, and e-mail address, if any, to which the request for these reports or documents must be made; and
(v)The registrant's Web site address, including the uniform resource locator
(URL)where the incorporated reports and other documents may be accessed. Note to Item 29(b)(1). If the registrant sends any of the information that is incorporated by reference in the prospectus contained in the registration statement to security holders, it also must send any exhibits that are specifically incorporated by reference in that information.
(2)The registrant must:
(i)Identify the reports and other information that it files with the SEC; and
(ii)State that the public may read and copy any materials it files with the SEC at the SEC's Public Reference Room at 100 F Street, NE., Washington, DC 20549 on official business days between the hours of 10 a.m. and 3 p.m. State that the public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. If the registrant is an electronic filer, state that the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC and state the address of that site ( *http://www.sec.gov* ). By the Commission. Dated: December 14, 2007. Nancy M. Morris, Secretary. [FR Doc. E7-24617 Filed 12-19-07; 8:45 am] BILLING CODE 8011-01-P INTERNATIONAL TRADE COMMISSION 19 CFR Parts 201 and 210 Rules of General Application and Adjudication and Enforcement AGENCY: International Trade Commission. ACTION: Notice of proposed rulemaking. SUMMARY: The United States International Trade Commission (“Commission”) proposes to amend its Rules of Practice and Procedure concerning rules of general application, adjudication, and enforcement. The amendments are necessary to make certain technical corrections, to clarify certain provisions, to harmonize different parts of the Commission's rules, and to address concerns that have arisen in Commission practice. The intended effect of the proposed amendments is to facilitate compliance with the Commission's Rules and improve the administration of agency proceedings. DATES: To be assured of consideration, written comments must be received by 5:15 p.m. within 60 days after publication of this notice of proposed rulemaking. ADDRESSES: You may submit comments, identified by docket number MISC-022, by any of the following methods: — *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. — *Agency Web Site: http://www.usitc.gov* . Follow the instructions for submitting comments on the Web site at *http://www.usitc.gov/secretary/edis.htm* . — *E-mail: eric.frahm@usitc.gov* . Include docket number MISC-022 in the subject line of the message. — *Mail:* For paper submission. U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. — *Hand Delivery/Courier:* U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. From the hours of 8:45 a.m. to 5:15 p.m. *Instructions:* All submissions received must include the agency name and docket number (MISC-022 ) or Regulatory Information Number
(RIN)for this rulemaking. All comments received will be posted without change to *http://www.usitc.gov* , including any personal information provided. For paper copies, a signed original and 14 copies of each set of comments, along with a cover letter stating the nature of the commenter's interest in the proposed rulemaking, should be submitted to Marilyn R. Abbott, Secretary, U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. *Docket:* For access to the docket to read background documents or comments received, go to *http://www.usitc.gov* and/or the U.S. International Trade Commission, 500 E Street, SW., Room 112, Washington, DC 20436. FOR FURTHER INFORMATION CONTACT: Eric Frahm, Office of the General Counsel, United States International Trade Commission, telephone 202-205-3107. Hearing-impaired individuals are advised that information on this matter can be obtained by contacting the Commission's TDD terminal at 202-205-1810. General information concerning the Commission may also be obtained by accessing its Internet server at *http://www.usitc.gov.* SUPPLEMENTARY INFORMATION: The preamble below is designed to assist readers in understanding these proposed amendments to the Commission Rules. This preamble provides background information, a regulatory analysis of the proposed amendments, an explanation of the proposed amendments to part 201, a section-by-section explanation of the proposed amendments to part 210, and a description of the proposed amendments to the rules. The Commission encourages members of the public to comment, in addition to any other comments they wish to make on the proposed amendments, on whether the proposed amendments are in language that is sufficiently clear for users to understand. If the Commission decides to proceed with this rulemaking after reviewing the comments filed in response to this notice, the proposed rule revisions will be promulgated in accordance with the Administrative Procedure Act (“APA”) (5 U.S.C. 553), and will be codified in 19 CFR parts 201 and 210. Background Section 335 of the Tariff Act of 1930 (19 U.S.C. 1335) authorizes the Commission to adopt such reasonable procedures, rules, and regulations as it deems necessary to carry out its functions and duties. This rulemaking seeks to update certain outdated provisions and improve other provisions of the Commission's existing Rules of Practice and Procedure. The Commission proposes amendments to its rules covering investigations under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) (“section 337”) in order to increase the efficiency of its section 337 investigations. This rulemaking effort began in 2003 when the ITC Trial Lawyers Association (“ITCTLA”) submitted a report to the Commission which suggested several rule changes that it believed would make the Commission rules more effective. In the course of considering the ITCTLA proposals, the Office of the General Counsel and the Office of Unfair Import Investigations (“OUII”) also suggested various rule changes. The Commission invites the public to comment on all of these proposed rules amendments. In any comments, please consider addressing whether the proposed amendments are in language that is clear and easy to understand. In addition, in any comments, please consider addressing how the proposed rules amendments could be improved, and/or offering specific constructive alternatives where appropriate. Consistent with its ordinary practice, the Commission is issuing these proposed amendments in accordance with the rulemaking procedure in section 553 of the APA. This procedure entails the following steps:
(1)Publication of a notice of proposed rulemaking;
(2)solicitation of public comments on the proposed amendments;
(3)Commission review of public comments on the proposed amendments; and
(4)publication of final amendments at least thirty days prior to their effective date. Regulatory Analysis of Proposed Amendments to the Commission's Rules The Commission has determined that the final rules do not meet the criteria described in section 3(f) of Executive Order 12866 (58 FR 51735, Oct. 4, 1993) and thus do not constitute a significant regulatory action for purposes of the Executive Order. The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) is inapplicable to this rulemaking because it is not one for which a notice of final rulemaking is required under 5 U.S.C. 553(b) or any other statute. Although the Commission has chosen to publish a notice of final rulemaking, these proposed regulations are “agency rules of procedure and practice,” and thus are exempt from the notice requirement imposed by 5 U.S.C. 553(b). These proposed rules do not contain federalism implications warranting the preparation of a federalism summary impact statement pursuant to Executive Order 13132 (64 FR 43255, Aug. 4, 1999). No actions are necessary under the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 *et seq.* ) because the final rules will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and will not significantly or uniquely affect small governments. The final rules are not major rules as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 *et seq.* ). Moreover, they are exempt from the reporting requirements of the Contract With America Advancement Act of 1996 (Pub. L. 104-121) because they concern rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties. The amendments are not subject to section 3504(h) of the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ), since they do not contain any new information collection requirements. Explanation of the Proposed Amendments to 19 CFR Part 201 The Commission proposes to amend part 201, Rules of General Application, in the manner described below. Subpart B—Initiation and Conduct of Investigations Section 201.16 Section 201.16 provides generally for service of process and other documents, and includes paragraph
(d)which provides for additional time after service by mail. Recently amended sections 210.6 and 210.7 allow one additional day for the parties to respond to Commission documents that are served by overnight delivery. *See* 72 FR 13689, March 23, 2007. The Commission proposes adding new paragraph
(e)of section 201.16 to also provide one additional day for parties to respond to documents served on them by overnight delivery by other parties, and to conform section 201.16 to sections 210.6 and 210.7. The Commission also proposes redesignating existing paragraph
(e)as new paragraph
(f)to allow for this change. Section-by-Section Explanation of the Proposed Amendments to 19 CFR Part 210 The Commission proposes to amend part 210, Adjudication and Enforcement, in the manner described below. Subpart A—Rules of General Applicability Section 210.3 This section provides definitions of words and phrases used in part 210. The phrase “U.S. Customs Service” is used throughout part 210. Pursuant to the Homeland Security Act of 2002, the U.S. Customs Service merged into the Department of Homeland Security. The official name of this entity is now “U.S. Customs and Border Protection.” 72 FR 20131, April 23, 2007. Thus, the Commission proposes to amend section 210.3 to reflect the official name. Section 210.4 Paragraph (f)(1)(i) of section 210.4 sets forth the physical specifications for the filing of documents addressed to the Commission and was adopted when filings were frequently typeset by commercial printers. The Commission proposes revising section 210.4 to remove reference to any physical specifications related to typographic printing processes. Section 210.7 Paragraph (a), Manner of Service Recently, sections 210.6 and 210.7 were amended to include provisions relating to the service of certain Commission documents by overnight delivery. *See* 72 FR 13689-90, March 23, 2007. Although these amendments were intended, *inter alia* , to streamline the service process and promote uniformity of service, the amendments regarding service by overnight delivery have created the prospect of differing response dates for the private parties and OUII. Thus, an unintended consequence of these amendments is that tracking of multiple service dates by the Commission will be necessary for various documents and/or numerous additional requests for extensions of time will be made to conform response dates for all parties. Under existing practice, the Commission normally grants requests for extensions of time which are made to ensure that the due date for responses is uniform as to all parties. Therefore, the Commission proposes to add a new paragraph (a)(3) to section 210.7 so that when the Commission effects service upon the private parties by overnight delivery, service upon OUII shall also be deemed to have been effected by overnight delivery. This amendment to paragraph
(a)of section 210.7 should eliminate multiple response dates for the same document by providing a uniform response date for all parties, thereby obviating the need for recurrent requests to conform response dates and minimizing administrative burdens on Commission personnel. Thus, the amendment is consistent with the aims of the recent overnight service provisions relating to Commission documents. *See* 72 FR 13689, March 23, 2007. New Paragraph (b), Designations for Service of Process Paragraph (a)(1) of section 210.7 generally provides service rules and requires that documents shall be served on all other parties. At present, any entity that files an entry of appearance on behalf of a named party is placed on the service list and is served with all documents. Service of documents containing confidential business information also requires signing onto the protective order for that investigation. This leads to the situation where multiple offices of the same law firm and multiple law firms are being served with documents on behalf of a single party. Redundancy in service is a substantial financial burden on both the private parties and the Commission in terms of copying and delivery costs. The Commission proposes that a lead attorney be designated to accept process for all other attorneys representing the same party in a section 337 investigation. Under this proposal, no limit would be placed on the number of attorneys of record for a party, but each named party would have to designate one attorney-for-service who agrees to accept all service on behalf of that party. The Commission proposes adding new paragraph
(b)to provide designation of a single attorney, selected lead attorney, or representative for service of process. The Commission also proposes redesignating existing paragraph
(b)of section 210.7 (which concerns the publication of notices) as paragraph
(c)to accommodate the addition of new paragraph (b). Subpart B—Commencement of Preinstitution Proceedings and Investigations Sections 210.8 and 210.11 Sections 210.8 and 210.11 generally concern commencement of preinstitution proceedings and service of a complaint and notice of investigation. To make sections 210.8 and 210.11 easier to read and understand, the Commission proposes completely revising each of these sections by distinctly setting out their respective requirements for:
(1)Complaints not seeking temporary relief, and
(2)complaints seeking temporary relief. Specifically, paragraphs (a)(1) of proposed sections 210.8 and 210.11 relate to complaints not seeking temporary relief, and paragraphs (a)(2) of proposed sections 210.8 and 210.11 relate to complaints seeking temporary relief. Further detailed explanation of these revisions follows. Section 210.8 requires that the complainant provide the Secretary with sufficient copies of the complaint, any supplement to the complaint, any motion for temporary relief, and all exhibits to any of these papers so that it may serve them on the proposed respondents should the Commission institute an investigation. Thereafter, section 210.11 requires the Secretary to serve a copy of the complaint, and notice of investigation (and any accompanying motion for temporary relief) upon each respondent and their respective embassies in Washington, DC. Sections 210.8 and 210.11 acknowledge that, for investigations involving temporary relief, section 210.54 requires the complainant to serve nonconfidential copies of the complaint and motion for relief and nonconfidential copies of all attached materials on all proposed respondents and the embassy in Washington, DC. Furthermore, section 210.54 requires that the complainant submit to the Commission actual proof of service on each respondent and embassy within ten days after the filing of the complaint. Thus, sections 210.8 and 210.11 mandate duplicate service of the complaint and temporary relief motion together with all exhibits by the complainant and the Secretary in investigations involving temporary relief and needlessly increase the number of copies that must be supplied to the Secretary and served by the Secretary following the institution of an investigation. Duplicate service, especially of voluminous exhibits, imposes a serious financial burden on both the complainant and the Commission in terms of copying and mailing costs. During the 1988 rules revision, the Commission acknowledged that the rules required double service, but reasoned that service of the complaint by the Commission was necessary because the date of service by the Commission is the date used for computing the date for a response. *See* 53 FR 33046, August 29, 1988. The proposed amendment to this rule provides that in investigations involving temporary relief, the complainant be required to submit only the required number of service copies of any unserved confidential material provided in connection with the complaint or motion for temporary relief and the requisite number of copies of the public complaint (without exhibits) for service by the Secretary. The proposed amendment provides that the Secretary is required, upon institution of an investigation involving temporary relief, to serve only the Notice of Investigation and a copy of the complaint (without exhibits) on each respondent and embassy. The amendment further provides that the service of these documents by the Secretary serves as the operative service for calculating a response date. In the rare event that complainant does not serve a proposed respondent with the exhibits, the respondents may take up the matter with the presiding ALJ under section 210.4, or obtain the public exhibits from the Secretary's office or through the Commission's Electronic Document Information System (“EDIS”). Accordingly, the Commission proposes language to revise sections 210.8 and 210.11 to provide that upon the institution of an investigation involving temporary relief, the Secretary will serve the Notice of Investigation and a copy of the complaint (without exhibits) on each respondent and embassy. In view of the proposed changes to § 210.11(a)(1), the Commission also proposes to revise section 210.54 and section 210.56 to eliminate references to subsequent service of the motion for temporary relief by the Commission. In reviewing the language of section 210.8 with a view toward proposing alternate language to eliminate double-service in temporary relief cases, it was noted that existing section 210.8 is itself rather confusing. Indeed, the Commission frequently receives inquiries from law firms representing prospective complainants that are confused about how many copies of the complaint and associated materials they are required to file to commence a section 337 proceeding. Thus, the Commission proposes revising section 210.8 to make it easier to determine how many copies are required when filing a permanent relief or a temporary relief complaint, and to make it possible for the Commission to eliminate unnecessary effort and expenses associated with the initial storage and subsequent re-service of materials required for complaints involving temporary relief requests. To achieve these ends, the Commission proposes breaking out the filing requirements in section 210.8 into separate paragraphs (paragraph (a)(1) for permanent relief and paragraph (a)(2) for temporary relief proceedings), and setting out numbered lists (§§ 210.8(a)(1)(i)-(iv) for permanent relief and §§ 210.8(a)(2)(i)-(vi) for temporary relief proceedings) specifying the required number of copies of each item to be filed with the Secretary for each type of proceeding. Supplements to such filings are also specifically referenced in the proposed section 210.8. The Commission proposes similarly structured revisions to § 210.11(a)(1), which concerns Commission service of complaints and notices of investigation. The Commission also proposes revising section 210.54 and § 210.56(a) to reflect the aforementioned revisions to sections 210.8 and 210.11. Section 210.10 Paragraph (a)(5)(i) of section 210.10 allows a complainant to withdraw the complaint “as a matter of right” prior to the Commission's vote on institution of the investigation simply by filing a written notice with the Commission. If the complaint is being withdrawn pursuant to a settlement agreement, however, the rule requires that a copy of the settlement agreement be filed with the written notice. The requirement to submit a settlement agreement is consistent with § 210.21(b) regarding termination of an on-going investigation based on a settlement agreement. However, prior to the institution of an investigation, the Commission may not have the knowledge necessary to assess the significance of the terms of any settlement agreement. Also, any review of a settlement agreement before institution contradicts the statement that a complainant may withdraw the complaint “as a matter of right” before institution. Thus, the Commission proposes revising paragraph (a)(5)(i) of section 210.10 to delete the requirement that any copies of the settlement agreement and/or other documents be submitted when a complaint is withdrawn prior to institution. Section 210.11 Section 210.11 requires the Secretary to serve a copy of the complaint, and notice of investigation (and any accompanying motion for temporary relief) upon each respondent and their respective embassies in Washington, DC. The Commission proposes amending section 210.11 by substantially revising paragraphs
(a)and
(b)to make them easier to read and understand as discussed above in relation to section 210.8 and 210.11. Paragraph
(a)of section 210.11 generally provides for service of the complaint and notice of investigation as discussed above with regard to the proposed changes to sections 210.8 and 210.11. The Commission proposes revising paragraph
(a)to eliminate double-service in temporary relief cases and to reduce the number of copies required when serving the complaint and temporary relief motion as previously discussed in relation to sections 210.8 and 210.11. The Commission also proposes adding paragraphs (a)(1)(ii) and (a)(2)(ii) to specifically provide for service of documents on “upon the embassy in Washington, DC, of the country in which each proposed respondent is located as indicated in the Complaint.” Paragraph
(b)of section 210.11 allows a complainant, with leave of the ALJ, to attempt personal service of a complaint after the Secretary's efforts to serve the respondent by certified mail have failed. The Commission proposes that the rule be amended to remove the reference to certified mail because the Commission now serves foreign addressees by overnight delivery. Subpart C—Pleadings Section 210.12 and 210.13 Section 210.12 generally provides the requirements for a complaint, and section 210.13 generally provides for a response. The Commission proposes substituting the phrase “U.S. patent” where appropriate for the phrase “U.S. letters patent” throughout the 210 rules to reflect current usage. This change affects revised §§ 210.12(a)(9), (a)(9)(i), (a)(9)(ii), (a)(9)(iii), (a)(9)(iv), (a)(9)(v), (a)(9)(vi), (a)(9)(vii) (two occurrences), and (a)(9)(viii); revised §§ 210.12(c), (c)(1), and (c)(2); and §§ 210.13(b), (b)(1) (three occurrences), and (b)(3). Section 210.12 Paragraph (a)(1), Verification of Complaint Paragraph (a)(1) of section 210.12 requires a complaint to be under oath and signed by the complainant or his authorized agent (verification of the complaint). To further clarify the meaning of this section, the Commission also proposes that this section be revised to include language that a complaint is to include a verification attesting to the matters in §§ 210.4(c)(1)-(3). Paragraphs (a)(6)(i) and (h), Domestic Industry Paragraphs (a)(6)(i) and
(h)of section 210.12 relate to the requirement that complainants include a showing of domestic industry for certain intellectual property rights. Since the last rules revision, section 337 was amended to add 19 U.S.C. 1337(a)(1)(E), which concerns vessel hull designs, to the statute. The Commission proposes revising § 210.12(a)(6)(i) and § 210.12(a)(6)(i)(C) to include the appropriate references to 19 U.S.C. 1337(a)(1)(E). The Commission also proposes adding new § 210.12(h) concerning vessel hull designs to bring section 210.12 into compliance with the statutory change. The current final paragraph
(h)of section 210.12 would then be redesignated as paragraph (i). Paragraph (a)(9), Content of Complaint Paragraph (a)(9) of section 210.12 relates to the content of a complaint based on infringement of a valid and enforceable U.S. patent. The Commission proposes substituting the phrase “U.S. patent “ where appropriate for the phrase “U.S. letters patent” to reflect current usage. This change was discussed previously with respect to sections 210.12 and 210.13. Paragraphs (a)(9)(iv), (a)(10), (c)(1), (d), (f), and (g); Copies of License Agreements The Commission proposes adding new § 210.12(a)(9)(iv) and §§ 210.12(a)(10)(i) and (a)(10)(ii) to reduce the number of copies of license agreements that complainants must file, and proposes revising §§ 210.12(c)(1), (d), (f), and
(g)to eliminate the language of these paragraphs regarding submission of license agreements. Section 210.12(c)(1) currently requires that a complainant submit the following “additional material” regarding licenses with a patent-based section 337 complaint: Three copies of each license agreement related to each patent, or three copies of any applicable standard license agreement with a corresponding list of licensees operating under the agreement. Sections 210.12(d), (f), and
(g)set forth the same requirement for complaints based upon federally registered trademarks, copyrights, and mask works, respectively. Newly proposed § 210.12(h) concerning vessel hull designs does not call for three copies of license agreements. Because licenses are currently identified in the rules as “additional material to accompany” the complaint, and only three copies of the licenses are required to be filed, licenses (which can be voluminous) are not normally filed as exhibits to the complaint. Rather, they are generally submitted as appendices to the complaint. Licenses are, therefore, not included in the service copies of the complaint that the Commission transmits to the respondents upon institution of an investigation. Also, since licenses are usually deemed to contain confidential business information (“CBI”), they are generally not available to the public via EDIS. Complainants have increasingly expressed concern during the pre-institution process about submitting copies of all or some of their license agreements with the complaint because of non-disclosure provisions in these agreements. While the submission of all license agreements regarding asserted patents and federally registered trademarks, copyrights and mask works is required under the current Rules, such agreements do not normally bear upon the decision to institute an investigation. Indeed, the present requirement burdens the complainant and Office of the Secretary with the reproduction and storage of documents that are not needed by Commission staff at the outset of an investigation and that can later be obtained by the parties through routine discovery requests. Accordingly, the Commission proposes that paragraphs (c)(1), (d), (f), and
(g)of section 210.12 be amended so that the submission of license agreements would be required only in those instances where
(i)the complainant relies upon its status as a licensee for purposes of standing or
(ii)the complainant relies upon the domestic activities of a licensee in support of its domestic industry contentions. Moreover, the Commission proposes that in these instances, the license be submitted as an exhibit to the complaint (which would ultimately be served upon the respondents), rather than as an appendix item (which would remain in the Commission files and would not be served on respondents). In addition, under this proposal, all licensees of the asserted rights would also have to be identified in the complaint. Such identification is currently required for patent licensees under § 210.12(a)(9)(iii), but not for licensees of registered trademarks, copyrights, or mask works. The Commission proposes adding new paragraph
(10)in § 210.12(a) to clearly set forth the requirements regarding licenses for non-patent-based complaints ( *i.e.* , complaints based on the infringement of a federally registered copyright, trademark, mask work, or vessel hull design). Thus, the Commission also proposes that existing paragraph
(10)of § 210.12(a) be redesignated as paragraph (11). Finally, as noted above, the Commission proposes that paragraphs (d), (f), and
(g)of section 210.12 be revised to eliminate the language at the end of each subsection regarding the submission of licenses. Paragraph (a)(9)(iv), Foreign Patent Applications Existing paragraph (a)(9)(iv) of section 210.12 relates to the requirement that a complainant provide a list of each pending foreign patent application and each foreign patent application that has been denied. As currently written, the rule does not require the identification of any foreign patent application that has been abandoned or withdrawn. In current practice, however, OUII has consistently requested that complainants provide this information during OUII's pre-institution investigatory review. The proposed change to current § 210.12(a)(9)(iv) contains language which conforms this section of the rules to current practice. The Commission also proposes redesignating paragraph (a)(9)(iv) as paragraph (a)(9)(v) of this section to allow for the addition of new paragraph (a)(9)(iv) relating to the submission of copies of license agreements in certain circumstances, as discussed above. Paragraphs (a)(9)(vii) and (a)(9)(viii), Infringement/Domestic Industry Charts Paragraphs (a)(9)(vii) and (a)(9)(viii) of section 210.12 require a complainant to supply infringement charts and domestic industry charts along with the complaint, respectively. As currently written, section 210.12 is ambiguous because it begins by requiring a showing of infringement by each respondent and then states that a complainant makes such a showing by providing a claim chart applying an exemplary patent claim to both a representative domestic product and an infringing product of each respondent so named. For clarity, the Commission proposes that there be a requirement for infringement claim charts and a separate requirement for a domestic industry claim chart. This proposal revises section 210.12 to require claim charts for both infringement and the domestic industry, and affects the following paragraphs of section 210.12: Paragraph (a)(9)(vii) is revised to delete the reference to a “domestic article or process,” new paragraph (a)(9)(ix) is added to specifically require domestic industry claim charts, and paragraphs (a)(9)(iv)-(a)(9)(viii) are redesignated as paragraphs (a)(9)(v)-(viii) and (a)(9)(x), respectively, to accomodate new paragraphs (a)(9)(iv) and (a)(9)(ix). Paragraph (c), Material to Accompany Each Patent-based Complaint Paragraph
(c)of section 210.12 relates to additional materials that must accompany each patent-based complaint. The Commission proposes revising paragraphs (c), (c)(1), and (c)(2) of section 210.12 by substituting the phrase “U.S. patent “ for the phrase “U.S. letters patent” to reflect current usage as discussed above with regard to sections 210.12 and 210.13. Paragraph (d), Material to Accompany Registered Trademark-based Complaints Paragraph
(d)of section 210.12 relates to additional materials that must accompany each registered trademark-based complaint. This paragraph currently requires a complaint to include one certified copy of the trademark's federal registration along with three additional copies. The Commission proposes revising this paragraph to add a requirement for one certified copy of the prosecution history for each involved U.S. registered trademark, plus three additional copies. Such information is currently required for patent-based complaints. *See* § 210.12(c)(2). The Commission believes such information will often be useful in crafting an exclusion order of appropriate scope, particularly in cases where all the respondents have defaulted. Section 210.12(d) also currently requires that a complainant submit the following “additional material” regarding licenses with a registered trademark-based section 337 complaint: Three copies of each license agreement related to each trademark, or three copies of any applicable standard license agreement with a corresponding list of licensees operating under the agreement. The Commission proposes revising § 210.12(d) to eliminate the language of this paragraph regarding submission of license agreements as discussed above with regard to paragraphs (a)(9)(iv), (a)(10), and (c)(1). Paragraph (f), Material To Accompany Copyright-Based Complaints Section 210.12(f) currently requires that a complainant submit the following “additional material” regarding licenses with a copyright-based section 337 complaint: Three copies of each license agreement related to each copyright, or three copies of any applicable standard license agreement with a corresponding list of licensees operating under the agreement. The Commission proposes revising § 210.12(f) to eliminate the language of this paragraph regarding submission of license agreements as discussed above with regard to paragraphs (a)(9)(iv), (a)(10), (c)(1), and (d). Paragraph (g), Material To Accompany Mask Work-Based Complaints Section 210.12(g) currently requires that a complainant submit the following “additional material” regarding licenses with a mask work-based section 337 complaint: Three copies of each license agreement related to each mask work, or three copies of any applicable standard license agreement with a corresponding list of licensees operating under the agreement. The Commission proposes revising § 210.12(g) to eliminate the language of this paragraph regarding submission of license agreements as discussed above with regard to paragraphs (a)(9)(iv), (a)(10), (c)(1), (d), and (f). Paragraph (h), Material To Accompany Vessel Hull Design-Based Complaints The Commission proposes adding a new provision, paragraph (h), under section 210.12 relating to additional material to accompany a registered vessel hull design-based complaint. The Commission proposes that a complainant that bases its complaint on a vessel hull design registered under 17 U.S.C. 1301 *et seq.* should be required to provide the same materials as does a complainant bringing an action under other copyright provisions (§ 210.12(f)) or under a federally registered mask work (§ 210.12(g)). Specifically, the proposal requires that a complainant provide one certified copy and three additional copies of the certificate of registration, issued by the Registrar of Copyrights under 17 U.S.C. 1314, and identify any licensees under the registered vessel hull design. To accommodate the insertion of proposed new paragraph (h), and the insertion of proposed new paragraph
(i)discussed below, the Commission also proposes redesignating existing § 210.12(h), which concerns the duty to supplement the complaint, as § 210.12(j). Paragraph (i), Initial Disclosures The Commission proposes adding a new provision, paragraph
(i)under section 210.12 which provides for the service upon counsel for respondent of each document submitted with the complaint within five
(5)business days of service of a notice of appearance and agreement to be bound by the terms of the protective order. Under the current rule, much of the information required to accompany a complaint, such as prosecution histories and license agreements, is submitted as part of an appendix rather than as an exhibit. Consequently, respondents often need to seek copies of these documents through discovery. The addition of new paragraph
(i)was proposed by the ITCTLA to expedite the production of these documents and to provide the respondents with a fuller understanding of the allegations in the complaint. Such early document production may be particularly beneficial in investigations in which the domestic industry is based on an allegation of domestic licensing activity. The proposed new rule protects the complainant's confidential information by requiring service only on counsel for respondents who have agreed to be bound by the terms of the protective order. Subpart D—Motions Section 210.15 The Commission proposes to amend paragraph
(a)of section 210.15 to eliminate reference to the Chief Administrative Law Judge. In current practice, the institution of an investigation and assignment of an administrative law judge occur simultaneously, and there is no Chief Administrative Law Judge. Similarly, the Commission also proposes revising paragraph
(a)of section 210.20, section 210.58, and paragraph (b)(3) of section 210.75 to eliminate references to the Chief Administrative Law Judge. These revisions merely conform the rules to current practice. Section 210.18 The Commission proposes that paragraph
(a)of section 210.18 be revised to require that motions for summary determination be filed 60 days prior to the start of any hearing provided for in § 210.36(a)(1), instead of 30 days before the hearing as the rule currently provides. In its report to the Commission, the ITCTLA proposed such an amendment and noted that the filing of summary determination motions only 30 days before the hearing is burdensome on the administrative law judge and the parties who are attempting to prepare for trial at that time. The ITCTLA commented that such motions often appear to be used as a tactic at that late stage, because, in practice, it is difficult for the administrative law judges to resolve summary determination motions in 30 days, and, in any event, initial determinations granting such motions are subject to review by the Commission for another 30-45 days. However, the ITCTLA also proposed that the administrative law judge be permitted to allow the filing of a summary determination motion out of time under “exceptional circumstances.” The Commission believes the ITCTLA's proposal to amend section 210.18 in these respects is well founded, and proposes to amend section 210.18 accordingly. The Commission also proposes that paragraph
(a)of section 210.18 be revised to provide that the 60 day period begin on the day prior to the scheduled hearing whether or not it is a weekend or holiday, and that if the 60th day is a weekend or holiday, the motion must be filed on the next business day. This proposal also includes that, upon a showing of exceptional circumstances, a motion for summary determination may be filed out of time. Section 210.20 The Commission proposes to amend paragraph
(a)of section 210.20 to eliminate reference to the Chief Administrative Law Judge. This change is the same change previously discussed with respect to paragraph
(a)of section 210.15. The Commission also proposes to amend paragraph
(a)of section 210.20 to specify that if the administrative law judge is no longer employed by the Commission, the motion to declassify confidential documents under § 210.20(a) shall be addressed to the Commission. Section 210.21 Section 210.21 relates to the termination of an investigation in whole or in part by withdrawal of the complaint. The Commission proposes that the rule be amended in two ways. First, as currently written, the rule states that a party may move before the administrative law judge “for an order to terminate” an investigation. However, under § 210.42(c), the administrative law judge is required to grant such a motion by initial determination and deny such a motion by order. Therefore, the Commission proposes to delete the language “for an order” in paragraphs (a)(1) and (a)(2) of section 210.21. The Commission also proposes removing the language “An order of”, which appears throughout section 210.21 in paragraphs (b)(2), (c), (c)(2)(ii), (d), and (e), for the same reason. Second, current § 210.21(a)(1) allows the parties to keep a settlement agreement secret by having the complainant move to terminate the investigation based on withdrawal of the complaint under § 210.21(a)(1), in direct conflict with § 210.21(b), which requires that motions to terminate investigations based on settlement agreements must include the settlement agreement. The current rule, § 210.21(a)(1), states that “any party may move at any time prior to the issuance of an initial determination on violation of section 337 of the Tariff Act of 1930 for an order to terminate an investigation in whole or in part as to any or all respondents on the basis of withdrawal of the complaint. * * *” Thus the current rule allows for the parties to reach a settlement agreement and then keep the agreement secret by having the complainant move to terminate the investigation based on withdrawal of the complaint. As currently written, § 210.21(a)(1) does not require the complainant to acknowledge or provide the settlement agreement to the Commission. The Commission has a public policy interest in reviewing settlement agreements that form the basis for termination of an investigation. The Commission's consideration of the public interest should not be dependent upon a party's choice to designate the termination as one based on withdrawal of the complaint or as one based on a settlement agreement. Thus, the Commission proposes amending paragraph (a)(1) of section 210.21 to make clear that once an investigation has been instituted, any settlement agreement with respect to an investigation must be provided to the Commission even if the complainant is willing to terminate the investigation based on withdrawal of the complaint. In other words, the Commission proposes to amend § 210.21(a) to provide that a complainant requesting withdrawal of all or part of the complaint must affirmatively state that there are no agreements between the parties concerning the subject matter of the investigation, or if there are any such agreements, they must be identified and provided to the Commission. This requirement would alleviate the potential problem discussed above, and would also be consistent with § 210.21(b)(1) requiring such language to terminate an investigation based on a settlement agreement, and proposed § 210.21(c) requiring such language to terminate an investigation based on a consent order. Section 210.22 Section 210.22 provides a mechanism for designating an investigation “more complicated.” This rule was necessary when section 337 provided that Commission investigations were to be completed in no more than one year (18 months in “more complicated” cases). In 1994, the Uruguay Round Agreement Amendments removed statutory deadlines for Commission investigations under section 337, and accordingly there is no longer a need for this provision. While the temporary relief phase is still subject to statutory deadlines, sections 210.51 and 210.60 set forth the procedure for designating the temporary relief phase “more complicated.” Current section 210.22 has no relevance to current practice, and the Commission proposes that this section be removed in its entirety. Deletion of this section does not affect any other sections. Section 210.25 Paragraph
(f)of section 210.25 generally relates to sanctions motions before an administrative law judge and allows an administrative law judge to defer adjudication of a sanctions motion until “no later than 90 days after issuance of the [final] initial determination of violation of section 337 or termination of the investigation.” However, depending upon whether the Commission undertakes review or requires additional time to consider the final initial determination, the 90-day deadline for the administrative law judge's recommended determination may expire on or before the Commission's final initial determination is issued. Issuance of the recommended determination before the Commission issues its decision on the merits may be problematic because the Commission's violation decision may vitiate, or at least call into question, the underpinnings of the sanctions motion. The Commission proposes revising § 210.25(f) to permit an administrative law judge to defer issuing an recommended determination on a sanctions motion until 30 days after the issuance of the Commission's final determination. Subpart E—Discovery and Compulsory Process Section 210.28 Paragraph (d), Service of Deposition Transcripts on the Commission Staff Paragraph
(d)of section 210.28 relates to the taking of depositions and states that the person transcribing the depositions “shall forward one copy of a deposition transcript to each party present or represented at the taking of the deposition.” The mandatory language of this rule does not comport with current practice at the Commission or in the U.S. district courts, where stenographers transcribe the deposition and make copies available (for purchase) to all parties to the investigation regardless of whether that party appeared at the deposition. *See* Federal Rule of Civil Procedure 30(f)(2). Also, under § 210.28(f) of the current rules, the Commission investigative attorney is the only attorney that “must” be served with a copy of the deposition, and the burden of such service is placed on the party taking the deposition, not directly on the stenographer. Moreover, Federal Rule of Civil Procedure 30(f)(2) states that “[u]pon payment of reasonable charges therefor, the officer shall furnish a copy of the transcript or other recording of the deposition to any party or to the deponent.” Therefore, the Commission proposes that § 210.28(d) be amended to conform with the Federal Rules of Civil Procedure. Paragraph (g), Admissibility of Depositions Paragraph
(g)of section 210.28 relates to the admissibility of depositions into the record of the investigation. Section 210.28(g) refers to the “filing” of depositions with the Commission investigative attorney. Since “filing” generally refers to providing documents to the Office of the Secretary for inclusion in the official record of the investigation, the word appears to be inappropriate. Therefore the Commission proposes revising § 210.28(g) to replace the phrase “filed with the Commission investigative attorney” with “served upon the Commission investigative attorney.” Paragraph (i)(4), Completion and Return of Depositions Paragraph (i)(4) of section 210.28 relates to completion and return of depositions, and also refers to the “filing” of depositions. For the same reasons discussed above in connection with § 210.28(g), the Commission proposes revising paragraph (i)(4) to refer to “service” rather than “filing” of depositions. Sections 210.29, 210.30, and 210.31 Currently, the parties rely on administrative law judge ground rules for deadlines. The ITCTLA noted that waiting for the administrative law judge's ground rules to issue has resulted in delays in discovery in some investigations. Specifically, there have been delays concerning responses to interrogatories (paragraph (b)(2) of section 210.29), requests for documents and entry upon land (paragraph (b)(2) of section 210.30), and requests for admissions (paragraph
(b)of section 210.31). Therefore, the Commission proposes to revise §§ 210.29(b)(2), 210.30(b)(2), and 210.31(b), in accordance with the ITCTLA's suggestion, to add a default provision that would impose a ten day deadline for responding to, respectively, interrogatories (paragraph (b)(2) of section 210.29), requests for documents and entry upon land (paragraph (b)(2) of section 210.30), and requests for admissions (paragraph
(b)of section 210.31). The Commission also proposes to revise these rules to provide that the ten day deadline may be modified by the administrative law judge's ground rules. Section 210.31 Paragraph
(d)of section 210.31 states that admissions will be used only for the pending investigation and will not be used against the party “in any other proceeding,” and section 210.3 defines an investigation as the original investigation into a violation of 19 U.S.C. 1337. In *Certain Lens-Fitted Film Packages,* Inv. 337-TA-406, an issue arose regarding the use of a stipulation in an underlying proceeding and whether that stipulation would be binding upon the party in the related enforcement and advisory opinion proceeding. In that case, the administrative law judge determined in an initial determination that a stipulation from the underlying investigation was binding on the parties in the related proceeding. The administrative law judge reasoned: * * * complainant agreed to the stipulation in the underlying proceeding, which stipulation was binding in the underlying proceeding and was relied upon to resolve certain issues with the resultant issuance of the general exclusion order at issue in the current proceedings. Hence, since the current proceedings are ancillary proceedings to the underlying investigation and have been instituted to enforce the general exclusion order from the underlying proceeding, the stipulation should be binding on the parties. *Certain Lens-Fitted Film Packages,* Inv. No. 337-TA-406 ( *Consolidated Enforcement and Advisory Opinion Proceedings* ), *Enforcement Initial Determination* at 40 (Public Version, August 14, 2002). Because the initial determination was not reviewed, this reasoning became part of the Commission's final determination. *See Certain Lens-Fitted Film Packages,* Inv. No. 337-TA-406, *Notice of Review-in-Part, Non-Review-in-Part, and Remand of Enforcement Initial Determination and Initial Advisory Opinion to the Presiding Administrative Law Judge* at 1 (August 7, 2002). The Commission believes that the same rationale should apply in all investigations and proposes that the rule be amended to allow the use of an admission against a party in related Commission proceedings, as defined in section 210.3, *e.g.* , enforcement and advisory opinion proceedings. Section 210.32 Paragraph
(g)of section 210.32 establishes the procedure for obtaining judicial enforcement of a subpoena issued by the presiding administrative law judge. The Commission proposes revising this rule to require the presiding administrative law judge to certify nonconfidential copies of the subpoena for which judicial enforcement is sought, together with nonconfidential copies of any attachment to the subpoena. Nonconfidential copies of these documents are needed for submission to the court in support of the Commission's request for enforcement of the subpoena. Section 210.34 Paragraph (c), Violation of Protective Order Paragraph
(c)of section 210.34 addresses violations of protective orders. For the following reasons, the Commission proposes to revise the undesignated text at the end of § 210.34(c) to provide that the identity of a person who has or is alleged to have violated an administrative protective order (“APO”) is to be given the same treatment accorded to confidential business information (“CBI”). The Privacy Act, 5 U.S.C. 552a, requires that Federal agencies protect certain information in their possession concerning individuals. In particular, § 552a(b) of the statute imposes specific limits on the disclosure of such information. In addition to any statutory requirements, the Commission's interest in keeping an APO breacher's identity confidential is also animated by an acknowledgment that many infractions involve inadvertent and minor disclosures of information by attorneys who practice before the Commission. The Commission has sought to balance the need to sanction transgressions with the concern that the severity of the punishment should not exceed the magnitude of the offense. Disclosing to the public a finding, or even an allegation, of an APO breach can have an adverse effect on the attorney in question, over and above the effect of the sanction itself. Treating the identity of APO breachers as CBI conforms to Commission practice in cases under Title VII of the Tariff Act of 1930. *See* 19 CFR 207.7 (provision governing disclosure of CBI subject to an APO under Title VII). Investigations of alleged APO violations in section 337 cases currently involve participation by all parties in the underlying section 337 proceeding under § 210.34(d)(5). To further this participation, the Commission proposes to permit the parties to an investigation to learn the identity of an alleged breacher. However, the Commission proposes to revise the undesignated text at the end of § 210.34(c) to treat the identity of alleged APO breachers as confidential so that non-parties do not have access to such information. In addition, the undesignated text at the end of paragraph
(c)of section 210.34 provides for the issuance of sanctions when a signatory to an APO violates the APO. It is unclear from the current rule whether ALJs may issue sanctions, and if so, whether they are to do so by order, initial determination, or recommended determination. Accordingly, the Commission also proposes to revise this rule to require ALJs to rule on certain sanctions in the form of a recommended determination. This revision also clarifies that certain sanctions may be imposed only by the Commission and that the Commission must make an affirmative determination that such sanctions are warranted before they take effect. The Commission also proposes to revise paragraph
(c)of section 210.34 by adding the designation “Note to paragraph (c):” at the beginning of the undesignated text at the end of paragraph (c). This change is made for formal purposes, and to provide for clarity in any future reference to the text at the end of the paragraph. Paragraph (d), Reporting Requests for Confidential Business Information Paragraph
(d)of section 210.34 imposes a reporting requirement for APO signatories concerning requests or orders requiring the signatory to disclose information
(CBI)covered by the APO to a person not entitled to receive it under the APO or under § 210.5(b) (which mirrors the provisions of 19 U.S.C. 1337(n) concerning persons who are authorized recipients of CBI submitted to the Commission or exchanged among the parties in investigations or related proceedings under section 337). Administrative protective order breach investigations in the section 337 area have made clear that many attorneys are unaware of the existence of this reporting requirement. To highlight the existence of the reporting requirement, the Commission proposes including the reporting requirement and sanctions in the title of the rule, and revising the text of section 210.34 to place the reporting requirement and applicable sanction in separate paragraphs (paragraph
(d)and new paragraph (e), respectively). The Commission proposes redesignating § 210.34(d)(1) as § 210.34(d), redesignating § 210.34(d)(2) as § 210.34(e), and revising the heading of section 210.34 to reflect the importance of the reporting requirement and the applicable sanction. The Commission also proposes separating the text of revised § 210.34(d) into new paragraphs §§ 210.34(d)(1)-(5) for clarity, and adding a sentence at the end of section 210.34 to make it clear that the reporting requirement applies only to non-Commission requests for CBI. The Commission also proposes to revise paragraph
(d)of section 210.34 by adding the designation “Note to paragraph (d):” at the beginning of the undesignated text at the end of paragraph (d). This change is made for formal purposes, and to provide for clarity in any future reference to the text at the end of the paragraph. Subpart F—Prehearing Conferences and Hearings Section 210.35 Existing section 210.35 provides generally for prehearing conferences. The Commission proposes revising section 210.35 to include new § 210.35(a)(2) to expressly provide for prehearing settlement conferences. Accordingly, it is also proposed that existing §§ 210.35(a)(2)-(6) be renumbered as §§ 210.35(a)(3)-(7). Section 210.38 Paragraph
(a)of section 210.38 lists the items that constitute the record of section 337 investigations. Paragraph
(d)of section 210.38 governs an administrative law judge's certification of the record to the Commission. Missing physical exhibits that the ALJ presumably had returned to the submitting parties were a problem in connection with the transmittal of the record of *Certain Ammonium Octamolybdate Isomers,* Inv. No. 337-TA-477, Comm'n Op. (Jan. 2004) to a U.S. District Court in Colorado pursuant to 28 U.S.C. 1659(b). The Commission proposes amending §§ 210.38(a) and
(d)to require the administrative law judge to certify all physical exhibits entered into evidence and amending § 210.38(d) to indicate that the administrative law judge may use his/her discretion as to whether substitution of a photographic reproduction of a large demonstrative exhibit would be appropriate. Section 210.39 When civil litigation involving the parties to a section 337 investigation is pending concurrently with the investigation, a section 337 respondent who is a party to a civil action may move the court to stay the district court action, pursuant to 28 U.S.C. 1659(a), until the Commission's section 337 determination becomes final. After the stay is lifted, the Commission's section 337 record must be transmitted to the court and will be admissible in the civil action, pursuant to 28 U.S.C. 1659(b). Section 210.39(b) provides for the transmission of a section 337 record to a U.S. District Court in accordance with 28 U.S.C. 1659(b). To make § 210.39(b) consistent with 28 U.S.C. 1659(b), the Commission proposes to revise the current wording of the rule to indicate that the Commission's record is to be transmitted to the court after the court dissolves the stay of the civil proceeding. To facilitate timely Commission compliance with a court order dissolving a stay of the civil action and requiring the Commission to transmit all or part of its section 337 record to the court pursuant to 28 U.S.C. 1659(b), the Commission proposes to amend § 210.39(b) to require the filing of written notice with the Secretary whenever
(1)a section 337 party/civil action litigant asks the court to issue an order staying the civil action, and
(2)whenever the district court issues an order dissolving the stay and directing the Commission to transmit all or part of the record to the court. Subpart G—Determinations and Actions Taken Section 210.42 Paragraph (a)(1) of section 210.42 generally relates to initial determinations on issues concerning violation of section 337. The Commission proposes changing paragraph (a)(1) for reasons explained below with regard to sections 210.42 and 210.43. Paragraph (a)(2) of section 210.42 generally relates to declassification of information. Section 210.42(a)(2) currently does not conform to section 210.20 because it does not make clear that initial determinations on declassification may issue after any decision on termination, not just after the final initial determination issues. The Commission proposes to change § 210.42(a)(2), which concerns initial determinations on declassification, to conform to section 210.20, which also concerns motions for declassification. Sections 210.42 and 210.43 Review of Final Initial Determinations Paragraphs
(a)and
(h)of section 210.42 and paragraph
(d)of section 210.43 provide Commission deadlines for review of final initial determinations. The current rules concerning Commission review were promulgated in the 1970's when there were strict statutory deadlines for completion of Commission investigations, and final initial determinations, petitions, and responses were relatively short. Section 337 investigations during that time period also generally concerned less complicated technologies. Final initial determinations, petitions, and responses to petitions have grown much lengthier over the last 30 years. At the same time, the number of section 337 complaints filed has grown tremendously, and the technology involved in the investigations has become steadily more complex. Recent experience indicates that these factors have combined to render insufficient the number of days allotted to the Commission to complete its investigations. Accordingly, the Commission proposes to amend §§ 210.42(h)(2) and 210.43(d)(1) such that the Commission will have two months to determine whether to review a final initial determination and two additional months for final disposition of the investigation. In this connection, the Commission also proposes to amend § 210.42(a)(1)(i) such that the administrative law judge would issue his final initial determination no later than four
(4)months before the target date for completion of the investigation, regardless of whether the target date has been set at over 15 months. In order to accomplish these changes in Commission practice, the Commission proposes revisions to §§ 210.42(a) and
(h)and § 210.43(d)(1). In order to comport with the change to § 210.42(a)(1)(i) just discussed, the Commission also proposes to revise § 210.50(a) by providing that if the target date does not exceed 16 months from the date of institution the order of the administrative law judge shall be final. The proposed amendment to § 210.43(d)(1), noted above, also includes a reference to the disposition of an initial determination under § 210.42(a)(2) regarding the declassification of CBI. The rules currently do not expressly provide for filing a petition for review of initial determinations concerning declassification. Because such initial determinations are frequently the subject of petitions and responses, the Commission proposes to revise § 210.42(h) to allow the Commission 45 days to determine whether to review initial determinations concerning declassification. Review of Summary Initial Determinations Under the current deadlines in paragraph
(h)of section 210.42 and paragraph
(d)of section 210.43, the Commission often has insufficient time to act on initial determinations granting summary determination that could terminate the investigation on the merits if it becomes the final determination of the Commission. The Commission proposes to add new paragraph (h)(6), and amend § 210.42(h)(3) to refer to new paragraph (h)(6), such that the Commission's time for determining whether to review these summary initial determinations would increase by 15 days, *i.e.* , from 30 days to 45 days. As a result of the addition of § 210.42(h)(6) and the change to § 210.42(h)(3), the Commission also proposes to amend § 210.43(d)(1), which concerns the grant or denial of a petition for review. Section 210.42(i), Notice of Determination Paragraph
(i)of section 210.42 discusses the issuance, service, and **Federal Register** publication of notices announcing the Commission's decision on whether it will review an initial determination. The last sentence of § 210.42(i) indicates that the Commission will publish a notice in the **Federal Register** announcing whether the Commission has decided to review the initial determination only if that decision results in termination of the investigation in its entirety. Section 201.10, however, states that notices will be published in the **Federal Register** , as appropriate. In fact, the Commission routinely publishes notices concerning its decision on whether to review a final initial determination because the notice usually requests submissions from the public on the issues of remedy, the public interest, and bonding. In addition, § 210.49(b) (concerning publication of final determinations that result in the issuance of an order) and § 210.66(f) (concerning final disposition of an initial determination concerning temporary relief) require publication in the **Federal Register** . Accordingly, the Commission proposes to amend § 210.42(i) to clarify which notices related to initial determinations will be published in the **Federal Register** . Section 210.43, Deadlines for Filing Petitions for Review of IDs Section 210.43 provides deadlines for filing petitions for review of initial determinations and responses to petitions. Currently, §§ 210.43(a), 210.43(c), and 210.43(d) provide the following schedule for filing petitions for review of various types of initial determinations: Initial determination concerning Petitions for review due Response to petitions due Commission deadline for determining whether to review the initial determination Violation § 210.42(a)(1) 10 days from service of the initial determination on private parties 5 business days from service of any petition 45 days from service of the initial determination on private parties. Forfeiture of respondent's bond § 210.50(d)(3) 10 days from issuance of the initial determination 5 business days from service of any petition 45 days from service of the initial determination on private parties. Forfeiture of complainant's temporary relief bond § 210.70(c) 10 days from issuance of the initial determination 5 business days from service of any petition 45 days from service of the initial determination on private parties. Other matters § 210.42(c) 5 business days from issuance of the initial determination 5 business days from service of any petition 30 days from service of the initial determination on private parties. Formal enforcement proceedings § 210.75(b) By order of the Commission By order of the Commission 90 days from service of the initial determination on private parties. As this chart shows, the methods for calculating filing dates for petitions for review are not uniform. This lack of uniformity has led to both confusion and gamesmanship by the private parties. Under the recent amendments to sections 210.6 and 210.7, all parties receive initial determinations by overnight delivery, and initial determinations may not be picked up from the Commission. While the amendments to sections 210.6 and 210.7 may have obviated concerns about gamesmanship, they do nothing to eliminate the confusion that sometimes exists concerning when a petition must be filed. Because large initial determinations that are filed near the end of the business day are rarely ready for service on the day of issuance, and are almost always served on the following business day, the Commission proposes that all due dates be calculated from date of service. Thus, the Commission proposes amendments to all rules pertaining to due dates for petitions for review and responses such that all due dates will be counted from the date of service of the initial determination or response. In view of the Commission's proposal to expand certain times for Commission review, it also proposes that petitions for review of final initial determinations be due 12 days after service of a final initial determination and that replies to any such petitions be due eight days from the date of service of the petition. Further, the Commission proposes that the due date for filing a petition for review of a summary determination that would terminate the investigation if it became the final determination of the Commission be 10 days after service of the initial determination, and the date for filing a response to such a petition be five
(5)business days after service of the petition. The due dates as so amended follow: Initial determination concerning Petitions for review due Response to petitions due Commission deadline for determining whether to review the initial determination Violation § 210.42(a)(1) 12 days from service of the initial determination 8 days from service of any petition 60 days from service of the initial determination. Forfeiture of respondent's bond § 210.50(d)(3) 10 days from service of the initial determination 5 business days from service of any petition 45 days from service of the initial determination. Forfeiture of complainant's temporary relief bond § 210.70(c) 10 days from service of the initial determination 5 business days from service of any petition 45 days from service of the initial determination. Summary initial determination that would terminate the investigation if it became the Commission's final determination § 210.42(c) 10 days from service of the initial determination 5 business days from service of any petition 45 days from service of the initial determination. Other matters § 210.42(c) 5 business days from service of the initial determination 5 business days from service of any petition 30 days from service of the initial determination on private parties. Finally, the Commission proposes adding a chart to be designated as Appendix A at the end of Part 210 to summarize the proposed changes to the petition and response due dates discussed above, as well as the existing deadlines and due dates for formal enforcement proceedings as set forth in § 210.75(b). Sections 210.43(b)(1) and (c), Petitions and Responses Paragraph (b)(1) of section 210.43 describes the required content of a petition for review of an initial determination on a matter other than temporary relief. In view of the length of time required to consider lengthy petitions and responses, the Commission proposes amending § 210.43(b)(1) to require that any petition for review exceeding 50 pages in length be accompanied by a summary not to exceed ten pages, that responses to petitions should similarly require such summaries, and that there be a 100 page limit exclusive of the summaries for the length of petitions for review of final initial determinations on a matter other than temporary relief. The Commission also proposes to revise paragraph (b)(1) of section 210.34 by adding the designation “Note to paragraph (b)(1):” at the beginning of the undesignated text at the end of paragraph (b)(1). This change is made for formal purposes, and to provide for clarity in any future reference to the text at the end of the paragraph. Paragraph (b)(3), Contingent Petition Paragraph (b)(3) of section 210.43 currently provides that any petition for review of an initial determination on a matter other than temporary relief which the petitioner designates as a “contingent” petition for review shall be deemed to be a non-contingent petition and shall be processed accordingly. The Commission proposes to revise § 210.43(b)(3) to clarify issues which must be raised in petitions as well as to explain why it is sometimes necessary to file such petitions. New Paragraph (b)(5), Service of Petition Within the context of temporary relief, section 210.54, paragraph
(b)of section 210.56, and paragraph
(c)of section 210.66 currently require the parties to serve certain documents on each other by “messenger, courier, express mail or equivalent means.” The Commission has previously reasoned that such mandated cooperation between the parties is necessary to facilitate the filing of timely and useful responses by serving their initial comments on each other by the fastest means available. *See* 53 FR 33051, August 29, 1988. Because the same rationale applies in the case of petitions for review of initial determinations, the Commission proposes that new paragraph (b)(5) be added to the rules requiring that any petitions for review be served on the parties by hand or by overnight delivery service. In view of the recent amendments to sections 210.6 and 210.7 previously discussed, the Commission proposes that the word “messenger” be used in proposed new § 210.43(b)(5), and that the word “courier” be replaced with the words “overnight delivery” in current section 210.54, paragraph
(b)of section 210.56, and paragraph
(c)of section 210.66. Further, the Commission proposes that “express mail” be eliminated from these rules, as the term is generally the equivalent of “overnight delivery.” The Commission therefore proposes to add new paragraph (b)(5) to section 210.43 to provide that petitions for review of an initial determination be served “by messenger, overnight delivery, or equivalent means.” Paragraph (d), Grant or Denial of Review Paragraph (d)(1) of section 210.43 currently provides deadlines for Commission decisions, whether in whole or in part, on petitions for review of initial determinations. For the reasons discussed above with regard to section 210.43, the Commission proposes to revise paragraph (d)(1) to provide for Commission decisions to grant, whether in whole or in part, petitions for review of initial determinations under § 210.42(a)(1) within 60 days of service of the initial determination on the parties. Section 210.45 Paragraph
(c)of section 210.45 describes the action that the Commission may take upon review of an initial determination on a matter other than temporary relief. As noted by the ITCTLA, the Commission's right to take no position on some issues that are decided in an initial determination has been upheld by the U.S. Court of Appeals for the Federal Circuit in *Beloit Corp.* v. *Valmet Oy,* 742 F.2d 1421, 1423 (Fed. Cir. 1984), where the Court declined to consider issues that were not decided by the Commission. The Commission frequently exercises its right to take no position on a particular issue, and thus proposes revising § 210.45(c) to reflect this practice, as suggested by the ITCTLA. Section 210.49 Paragraph
(b)of section 210.49 provides for publication and transmittal to the President of Commission section 337 determinations, along with actions taken relative to such determinations, to the President. The Commission proposes to amend § 210.49(b) to remove a confusing reference to subpart I, recognize the delegation of Presidential authority under 19 U.S.C. 1337(j)(1) to “an officer assigned the functions of the President” ( *i.e.* , the United States Trade Representative as set forth in Presidential Memorandum, 70 FR 43251, July 26, 2005), and to add language regarding Commission action taken pursuant to section 210.50. Section 210.50 Paragraph
(d)of section 210.50 governs the forfeiture or return of respondents' bonds posted pursuant to 19 U.S.C. 1337(e)(1) during the pendency of a temporary remedial order or pursuant to 19 U.S.C. 1337(j)(1) during the period of Presidential review for a temporary or permanent remedial order. Bond forfeiture proceedings may not be appropriate in cases where the Federal Circuit reverses a Commission finding of violation. Accordingly, the Commission proposes that the time for filing a motion for bond forfeiture be extended to 90 days after expiration of the Presidential period of review. Such an extension would encompass the 60 day period for filing an appeal. If no appeal is filed, the Commission could commence bond forfeiture proceedings immediately. The Commission also proposes to amend § 210.50(d) to clarify the procedure for filing a motion for return or forfeiture of a respondent's bond. Section 210.51 Paragraph
(a)of section 210.51 provides for the period for concluding investigations seeking permanent relief. Specifically, this paragraph currently provides that if the target date does not exceed 15 months from the date of institution the order of the administrative law judge shall be final. In light of the proposed changes to § 210.42(a)(1)(i) concerning issuance of final initial determinations no later than four
(4)months before the target date for completion of the investigation by the administrative law judge discussed above, the Commission proposes to revise § 210.51(a) by providing that if the target date does not exceed 16 months from the date of institution, the order of the administrative law judge shall be final. The Commission also proposes to revise § 210.51(a) by providing that any extensions of the target date beyond 16 months, before the investigation is certified to the Commission, shall be by initial determination. Subpart H-Temporary Relief Section 210.54 Section 210.54 requires a complainant requesting temporary relief to expeditiously serve nonconfidential copies of the complaint, motion for temporary relief, and any materials attached thereto on all proposed respondents and on the embassies in Washington, DC “of each country from which the allegedly unfair imports come.” The Commission proposes four changes to this rule. First, the Commission proposes to amend the rule to explicitly state that any supplemental information supplied to the Commission prior to institution of the investigation must also be served on the proposed respondents in the same manner as the original complaint, motion for temporary relief, and attachments thereto. Second, the Commission proposes to change the rule's requirement for service on the embassies in Washington, DC “of each country from which the allegedly unfair imports come” because it is inconsistent with current practice. Currently, the address of the proposed respondent, rather than a determination of the exporting country, determines which embassies will be served. The language is also inconsistent with paragraph (a)(1) of section 210.11 and section 210.57 which require that the embassy of each foreign government representing the respondents be served with the complaint, motion for temporary relief, and any materials attached thereto. If no proposed respondent is listed as having a foreign address because it is unclear where the accused goods are being imported from, no embassy is served even though goods are being imported. Accordingly, the Commission proposes to revise section 210.54 to reflect that service will be made on the appropriate embassy. Third, the Commission proposes to revise section 210.54 to reflect the changes previously discussed with respect to the revisions of sections 210.8 and 210.11 with regard to eliminating references to subsequent service of the motion for temporary relief by the Commission, and with regard to the changes concerning overnight delivery. Fourth, the Commission proposes to revise 210.54 in the same manner as the changes previously discussed with respect to new paragraph (b)(5) of section 210.43 to require that parties be served “by messenger, overnight delivery, or equivalent means.” Section 210.55 Paragraph
(b)of section 210.55 requires a complainant requesting temporary relief to file and serve new nonconfidential versions of the complaint, motion for temporary relief, or exhibits thereto if any of the original submissions contain excessive designations of confidentiality. The rule as currently written, however, does not specify that such service must be made in the same manner as the original submissions. Section 210.54 requires service by hand or by overnight delivery of the complaint and motion for temporary relief to ensure that proposed temporary relief respondents have adequate notice of the allegations against them. *See* 53 FR 33049, August 29, 1988. The manner of service of a complaint and motion for temporary relief is specified in section 210.54 in order to give the respondent the benefit of at least 30 days to make necessary preliminary arrangements. 53 FR 33049, August 29, 1988. Overly redacted submissions do not serve this notice function, and so § 210.55(b) currently provides that a complainant must re-serve non-confidential copies of the original submissions if they do not give adequate notice. Because an overly redacted complaint and motion for temporary relief will not provide the respondents with the benefit of early notice, the Commission proposes to amend § 210.55(b) to require that the corrected versions of these filings should also be served in the same expeditious manner as the original documents. Section 210.56 Paragraph (a), Sample Notice Paragraph
(a)of section 210.56 sets forth the notice that must accompany any motion for temporary relief, and is designed to notify proposed temporary relief respondents of the nature of Commission temporary relief proceedings. The Commission proposes to amend the sample notice in paragraph
(a)of section 210.56 to change the year listed for the date in the notice so it no longer indicates a date in the 1900s, and instead indicates a date in the 2000s. The Commission also proposes amending § 210.56(a) to reflect the changes previously discussed with respect to the revisions of sections 210.8 and 210.11 with regard to eliminating references to subsequent service of the motion for temporary relief by the Commission. Paragraph (b), Service of Supplementary Notice Paragraph
(b)of section 210.56 provides for the manner of service of supplementary notice on the parties. The Commission proposes to revise paragraph
(b)of section 210.56 in the same manner as the changes previously discussed with respect to new paragraph (b)(5) of section 210.43, and section 210.54 discussed above, to require that parties be served “by messenger, overnight delivery, or equivalent means.” Section 210.58 The Commission proposes to revise section 210.58 to eliminate reference to the Chief Administrative Law Judge. In current practice, the institution of an investigation and assignment of an administrative law judge occur simultaneously, and there is no Chief Administrative Law Judge. This change is the same as the changes previously discussed with respect to paragraph
(a)of section 210.15 and paragraph
(a)of section 210.20 to eliminate references to the Chief Administrative Law Judge, and merely conforms the rules to current practice. Section 210.66 The last sentence of paragraph
(c)of section 210.66 provides for the manner of service of comments pertaining to initial determinations concerning temporary relief. The Commission proposes to revise paragraph
(c)of section 210.66 in the same manner as the changes previously discussed with respect to new paragraph (b)(5) of section 210.43, section 210.54, and paragraph
(b)of section 210.56 to require that parties be served “by messenger, overnight delivery, or equivalent means.” Section 210.67 Section 210.67 relates to the ability of the administrative law judge to compel discovery by respondents during the temporary relief phase of an investigation. Under the current rule, the administrative law judge “may compel discovery regarding bonding by respondents (as provided in § 210.61),” but the rule is silent with regard to compelling discovery regarding bonding by complainants. This differential treatment suggests that respondents' and complainants' bonds are to be treated differently, at least with respect to an administrative law judge's ability to compel discovery. Such an interpretation is inconsistent with sections 210.61 and 210.66(a) and contradicts prior Commission commentary on the breadth of an administrative law judge's ability to compel discovery in temporary relief proceedings. Therefore, the Commission proposes to amend the text of section 210.67 to permit an administrative law judge to compel discovery regarding bonding, regardless of whether by respondents or complainants. The Commission also proposes to revise the heading of section 210.67 to reflect this change. Subpart I—Enforcement Procedures and Advisory Opinions Section 210.70 Section 210.70, which governs forfeiture or return of complainant's temporary relief bond, is currently in Subpart I, which concerns enforcement proceedings and advisory opinions. The Commission proposes to move this rule to Subpart H, which concerns temporary relief. This is a ministerial change made for organizational purposes. Section 210.71 Paragraph (a)(1) of section 210.71 provides for information gathering and relates to the Commission's power to require any person to report facts which will aid U.S. Customs and the Commission in enforcing Commission remedial orders. As currently written, the rule incorrectly suggests that U.S. Customs makes a determination as to whether the conditions that led to the order are changed, whereas the Commission actually determines whether the conditions that led to the order are changed in accordance with § 210.74(a). The Commission proposes to clarify this rule by deleting the reference to U.S. Customs' determination of changed conditions. Section 210.75 Section 210.75 provides generally for enforcement proceedings to enforce exclusion orders, cease and desist orders, consent orders, and other Commission orders. Paragraph
(b)of section 210.75 provides specifically for formal, as opposed to informal ( *see* paragraph
(a)of section 210.75), enforcement proceedings. In addition to the changes discussed below, the Commission proposes adding a table including a summary of the existing deadlines and due dates for formal enforcement proceedings as set forth in § 210.75(b) as Appendix A at the end of Part 210. Paragraph (b)(3), Public Hearings for Enforcement Proceedings The Commission proposes to revise paragraph (b)(3) of section 210.75 to eliminate reference to the Chief Administrative Law Judge. In current practice, the institution of an investigation and assignment of an administrative law judge occur simultaneously, and there is no Chief Administrative Law Judge. This change is the same as the changes previously discussed with respect to paragraph
(a)of section 210.15, paragraph
(a)of section 210.20, and section 210.58 to eliminate references to the Chief Administrative Law Judge, and merely conforms the rules to current practice. Paragraph (b)(4), Enforcement Proceedings Section 210.75 governs proceedings to enforce various Commission orders. Paragraph (b)(4) of section 210.75 lists the actions that the Commission may take at the conclusion of a formal enforcement proceeding. Paragraph
(c)of section 210.75 addresses the initiation of civil actions by the Commission to enforce exclusion orders, cease and desist orders, consent orders, and other Commission orders. Among other things, §§ 210.75(b)(4) and
(c)currently indicate that upon the conclusion of a formal enforcement proceeding, the Commission may bring civil actions in a U.S. District Court “requesting the imposition of a civil penalty or the issuance of injunctions incorporating the relief sought by the Commission.” Those rule provisions are based on 19 U.S.C. 1337(f)(2) of the Tariff Act, but they do not track the statutory language of 19 U.S.C. 1337(f)(2) which states, that “[s]uch penalty shall accrue to the United States and may be recovered for the United States in a civil action brought by the Commission in the Federal District Court for the District of Columbia or for the district in which the violation occurs.” Among other things, 19 U.S.C. 1337(f)(2) does not require the Commission to file a civil action requesting the imposition of a civil penalty. In fact, Commission practice, which has been upheld by the Federal Circuit, is to impose its own civil penalties. *See San Huan New Materials High Tech, Inc.* v. *U.S. Int'l Trade Comm'n* , 161 F.3d 1347 (Fed. Cir. 1998). The Commission also proposes to revise §§ 210.75(b)(4) and
(c)to include a reference to consent orders, since the Federal Circuit has upheld the Commission's long-standing interpretation of 19 U.S.C. 1337(f)(2) that consent orders, like cease and desist orders, are enforceable by civil penalty, imposed by the Commission, and recoverable in the district court in the event of nonpayment. The Commission therefore proposes to revise §§ 210.75(b)(4) and
(c)to make these sections consistent with the language of the statute and Federal Circuit precedent. Section 210.79 Paragraph
(a)of section 210.79 describes the manner in which persons may request and the Commission will render advisory opinions. As used in the Commission rules, the term “person” means an individual, partnership, corporation, association, or public or private organization. 19 CFR 201.2(j). The current language of the rule seems to allow only importers or would-be importers to request advisory opinions. In fact, advisory opinions issued by the Commission during the period January 1981 to May 2004 were all initiated in response to a request or a petition filed by an importer or a would-be importer. In June 2004, however, the complainant in *Certain Lens-Fitted Film Packages,* Inv. No. 337-TA-406, Comm'n Op. (June 1999) requested an advisory opinion concerning disposable cameras that the U.S. Customs Service had allowed to enter for consumption, but that the complainant maintained were in violation of a Commission general exclusion order. The Commission granted Fuji's request and conducted advisory opinion proceedings. On appeal, the Commission argued that its advisory opinion authority is discretionary and not curtailed by the language of the rule. The Court did not comment on the position the Commission took on advisory opinions. *See Fuji Photo Film Co., Ltd.* v. *U.S. Int'l Trade Comm'n et al.* , 386 F.3d 1095 (Fed. Cir. 2004). Accordingly, the Commission proposes to amend § 210.79(a) to make clear that, in accordance with current Commission practice, complainants, as well as importers, may request an advisory opinion from the Commission. List of Subjects 19 CFR Part 201 Administration practice and procedure, Reporting and recordkeeping requirements. 19 CFR Part 210 Administration practice and procedure, Business and industry, Customs duties and inspection, Imports, Investigations. For the reasons stated in the preamble, the United States International Trade Commission proposes to amend 19 CFR parts 201 and 210 as follows: PART 201—RULES OF GENERAL APPLICATION 1. The authority citation for part 201 continues to read as follows: Authority: Sec. 335 of the Tariff Act of 1930 (19 U.S.C. 1335), and sec. 603 of the Trade Act of 1974 (19 U.S.C. 2482), unless otherwise noted. 2. Amend § 201.16 by redesignating paragraph
(e)as paragraph
(f)and adding new paragraph
(e)to read as follows: § 201.16 Service of process and other documents.
(e)*Additional time after service by overnight delivery.* Whenever a party or Federal Agency or department has the right or is required to perform some act or take some action within a prescribed period after the service of a document upon it and the document is served by overnight delivery, one
(1)day shall be added to the prescribed period. “Overnight delivery” is defined as delivery by the next business day. PART 210—ADJUDICATION AND ENFORCEMENT 1. The authority citation for part 210 continues to read as follows: Authority: 19 U.S.C. 1333, 1335, and 1337. Subpart A—Rules of General Applicability 2. Amend § 210.3 by adding a definition of “U.S. Customs Service” in alphabetical order to read as follows: § 210.3 Definitions. *U.S. Customs Service* means U.S. Customs and Border Protection. 3. Amend § 210.4 by revising paragraph (f)(1)(i) to read as follows: § 210.4 Written submission; representations; sanctions.
(f)*Specifications; filing of documents.* (1)(i) Written submissions that are addressed to the Commission during an investigation or a related proceeding shall comply with § 201.8 of this chapter, except for the provisions regarding the number of copies to be submitted. The required number of copies shall be governed by paragraph (f)(2) of this section. Written submissions may be produced by any process which produces a clear black image on white paper. Typed matter shall not exceed 6 1/2 by 9 1/2 inches using 11-point or larger type and shall be double-spaced between each line of text using the standard of 6 lines of type per inch. Text and footnotes shall be in the same size type. Quotations more than two lines long in the text or footnotes may be indented and single-spaced. Headings and footnotes may be single-spaced. 4. Amend § 210.7 by: a. Redesignating paragraph
(b)as paragraph (c); and b. Adding paragraphs (a)(3) and (b). The additions and revisions read as follows: § 210.7 Service of process and other documents; publication of notices.
(a)* * *
(3)Whenever the Commission effects service of documents issued by or on behalf of the Commission or the administrative law judge upon the private parties by overnight delivery, service upon the Office of Unfair Import Investigations shall also be deemed to have occurred by overnight delivery.
(b)*Designation of a single attorney or representative for service of process.* The service list prepared by the Secretary for each investigation will contain the name and address of no more than one attorney or other representative for each party to the investigation. In the event that two or more attorneys or other persons represent one party to the investigation, the party must select one of their number to be the lead attorney or representative for service of process. The lead attorney or representative for service of process shall state, at the time of the filing of its entry of appearance with the Secretary, that it has been so designated by the party it represents. (Only those persons authorized to receive confidential business information under a protective order issued pursuant to § 210.34(a) are eligible to be included on the service list for documents containing confidential business information.) Subpart B—Initiation and Conduct of Investigations 5. Amend § 210.8 by adding introductory text and revising paragraph
(a)to read as follows: § 210.8 Commencement of preinstitution proceedings. *Upon receipt of complaint.* A preinstitution proceeding is commenced by filing with the Secretary a signed original complaint and the requisite number of true copies. (a)(1) *Unless complainant requests temporary relief, the complainant shall file with the Secretary:*
(i)12 copies of the nonconfidential version of the complaint along with 6 copies of the nonconfidential exhibits, and 6 copies of the confidential exhibits;
(ii)12 copies of the confidential version of the complaint, if any;
(iii)For each proposed respondent, one copy of the nonconfidential version of the complaint and one copy of the confidential version of the complaint, if any, along with one copy of the nonconfidential exhibits and one copy of the confidential exhibits, and
(iv)For the government of the foreign country in which each proposed respondent is located as indicated in the Complaint, one copy of the nonconfidential version of the complaint. Note to paragraph (a)(1): The same requirements apply for the filing of a supplement to the complaint.
(2)*If the complainant is seeking temporary relief, the complainant shall file with the Secretary:*
(i)12 copies of the nonconfidential version of the complaint along with 6 copies of the nonconfidential exhibits, and 6 copies of the confidential exhibits;
(ii)12 copies of the confidential version of the complaint, if any;
(iii)For each proposed respondent, one copy of the nonconfidential version of the complaint and one copy of the confidential version of the complaint, if any, along with one copy of the confidential exhibits;
(iv)12 copies of the nonconfidential version of the motion for temporary relief along with 6 copies of any nonconfidential exhibits filed with the motion and 6 copies of the confidential exhibits, if any, filed with the motion;
(v)12 copies of the confidential version of the motion for temporary relief, if any; and
(vi)For each proposed respondent, one copy of the confidential version of the motion along with one copy of the confidential exhibits filed with the motion. Note to paragraph (a)(2): The same requirements apply for the filing of a supplement to the complaint or a supplement to the motion for temporary relief. § 210.10 [Amended] 6. Amend § 210.10 by removing the last two sentences of paragraph (a)(5)(i). 7. Revise § 210.11 to read as follows: § 210.11 Service of complaint and notice of investigation. (a)(1) Unless the Commission institutes temporary relief proceedings, upon institution of an investigation, the Commission shall serve:
(i)Copies of the nonconfidential version of the complaint, the nonconfidential exhibits, and the notice of investigation upon each respondent; and
(ii)Copies of the nonconfidential version of the complaint and the notice of investigation upon the embassy in Washington, DC of the country in which each proposed respondent is located as indicated in the Complaint.
(2)If the Commission institutes temporary relief proceedings, upon institution of an investigation, the Commission shall serve:
(i)Copies of the nonconfidential version of the complaint and the notice of investigation upon each respondent; and
(ii)A copy of the notice of investigation upon the embassy in Washington, DC of the country in which each proposed respondent is located as indicated in the Complaint.
(3)All respondents named after an investigation has been instituted and the governments of the foreign countries in which they are located as indicated in the complaint shall be served as soon as possible after the respondents are named.
(4)The Commission shall serve copies of the notice of investigation upon the U.S. Department of Health and Human Services, the U.S. Department of Justice, the Federal Trade Commission, the U.S. Customs Service, and such other agencies and departments as the Commission considers appropriate.
(b)With leave from the presiding administrative law judge, a party may attempt to effect personal service of the complaint and notice of investigation upon a respondent, if the Secretary's efforts to serve the respondent have been unsuccessful. If the party succeeds in serving the respondent by personal service, the party must notify the administrative law judge and file proof of such service with the Secretary. Subpart C—Pleadings 8. Amend § 210.12 by: a. Republishing the introductory text of paragraph (a); b. Revising paragraphs (a)(1), (a)(6)(i) introductory text, (a)(6)(i)(C), and (a)(9); c. Redesignating paragraph (a)(10) as paragraph (a)(11); d. Adding new paragraph (a)(10); e. Revising paragraph (c); f. Revising the first sentence of paragraph (d); g. Revising paragraphs (f), and (g); h. Redesignating existing paragraph
(h)as paragraph (j); and i. Adding new paragraphs
(h)and (i). The additions and revisions read as follows: § 210.12 The complaint.
(a)*Contents of the complaint.* In addition to conforming with the requirements of § 201.8 of this chapter and §§ 210.4 and 210.5 of this part, the complaint shall—
(1)Be under oath and signed by the complainant or his duly authorized officer, attorney, or agent, with the name, address, and telephone number of the complainant and any such officer, attorney, or agent given on the first page of the complaint, and include a statement attesting to the representations in §§ 210.4(c)(1)-(3); (6)(i) If the complaint alleges a violation of section 337 based on infringement of a U.S. patent, or a federally registered copyright, trademark, mask work, or vessel hull design, under section 337(a)(1) (B), (C), (D), or
(E)of the Tariff Act of 1930, include a description of the relevant domestic industry as defined in section 337(a)(3) that allegedly exists or is in the process of being established, including the relevant operations of any licensees. Relevant information includes but is not limited to:
(C)Substantial investment in the exploitation of the subject patent, copyright, trademark, mask work, or vessel hull design, including engineering, research and development, or licensing; or
(9)Include, when a complaint is based upon the infringement of a valid and enforceable U.S. patent—
(i)The identification of each U.S. patent and a certified copy thereof (a legible copy of each such patent will suffice for each required copy of the complaint);
(ii)The identification of the ownership of each involved U.S. patent and a certified copy of each assignment of each such patent (a legible copy thereof will suffice for each required copy of the complaint);
(iii)The identification of each licensee under each involved U.S. patent;
(iv)A copy of each license agreement (if any) for each involved U.S. patent that complainant relies upon to establish its standing to bring the complaint or to support its contention that a domestic industry as defined in section 337(a)(3) exists or is in the process of being established as a result of the domestic activities of one or more licensees;
(v)When known, a list of each foreign patent, each foreign patent application (not already issued as a patent) and each foreign patent application that has been denied, abandoned or withdrawn corresponding to each involved U.S. patent, with an indication of the prosecution status of each such patent application;
(vi)A nontechnical description of the invention of each involved U.S. patent;
(vii)A reference to the specific claims in each involved U.S. patent that allegedly cover the article imported or sold by each person named as violating section 337 of the Tariff Act of 1930, or the process under which such article was produced;
(viii)A showing that each person named as violating section 337 of the Tariff Act of 1930 is importing or selling the article covered by, or produced under the involved process covered by, the above specific claims of each involved U.S. patent. The complainant shall make such showing by appropriate allegations, and when practicable, by a chart that applies an exemplary claim of each involved U.S. patent to a representative involved article of each person named as violating section 337 of the Tariff Act or to the process under which such article was produced;
(ix)A showing that an industry in the United States, relating to the articles protected by the patent exists or is in the process of being established. The complainant shall make such showing by appropriate allegations, and when practicable, by a chart that applies an exemplary claim of each involved U.S. patent to a representative involved domestic article or to the process under which such article was produced; and
(x)Drawings, photographs, or other visual representations of both the involved domestic article or process and the involved article of each person named as violating section 337 of the Tariff Act of 1930, or of the process utilized in producing the imported article, and, when a chart is furnished under paragraphs (a)(9)(viii) and (a)(9)(ix) of this section, the parts of such drawings, photographs, or other visual representations should be labeled so that they can be read in conjunction with such chart; and
(10)Include, when a complaint is based upon the infringement of a federally registered copyright, trademark, mask work, or vessel hull design—
(i)The identification of each licensee under each involved copyright, trademark, mask work, and vessel hull design;
(ii)A copy of each license agreement (if any) that complainant relies upon to establish its standing to bring the complaint or to support its contention that a domestic industry as defined in section 337(a)(3) exists or is in the process of being established as a result of the domestic activities of one or more licensees; and
(c)*Additional material to accompany each patent-based complaint.* There shall accompany the submission of the original of each complaint based upon the alleged unauthorized importation or sale of an article covered by, or produced under a process covered by, the claims of a valid U.S. patent the following:
(1)One certified copy of the U.S. Patent and Trademark Office prosecution history for each involved U.S. patent, plus three additional copies thereof; and
(2)Four copies of each patent and applicable pages of each technical reference mentioned in the prosecution history of each involved U.S. patent.
(d)*Additional material to accompany each registered trademark-based complaint.* There shall accompany the submission of the original of each complaint based upon the alleged unauthorized importation or sale of an article covered by a federally registered trademark, one certified copy of the Federal registration and three additional copies, and one certified copy of the prosecution history for each federally registered trademark. * * *
(f)*Additional material to accompany each copyright-based complaint.* There shall accompany the submission of the original of each complaint based upon the alleged unauthorized importation or sale of an article covered by a copyright one certified copy of the Federal registration and three additional copies;
(g)*Additional material to accompany each registered mask work-based complaint.* There shall accompany the submission of the original of each complaint based upon the alleged unauthorized importation or sale of a semiconductor chip in a manner that constitutes infringement of a Federally registered mask work, one certified copy of the Federal registration and three additional copies;
(h)*Additional material to accompany each vessel hull design-based complaint.* There shall accompany the submission of the original of each complaint based upon the alleged unauthorized importation or sale of an article covered by a vessel hull design, one certified copy of the Federal registration (including all deposited drawings, photographs, or other pictorial representations of the design), and three additional copies;
(i)*Initial disclosures.* Complainant shall serve on each respondent represented by counsel who has agreed to be bound by the terms of the protective order one copy of each document submitted with the complaint pursuant to §§ 210.12(c)-(h) within five days of service of a notice of appearance and agreement to be bound by the terms of the protective order; and § 210.13 [Amended] 9. Amend § 210.13 by removing the words “U.S. letters patent” and adding in their place the words “U.S. patent” in the following locations: a. § 210.13(b) introductory text, b. § 210.13(b)(1) (three occurrences), and c. § 210.13(b)(3). Subpart D—Motions § 210.15 [Amended] 10. Amend § 210.15 by removing the first sentence of paragraph (a)(1). 11. Amend § 210.18 by revising paragraph
(a)to read as follows: § 210.18 Summary determinations.
(a)*Motions for summary determinations.* Any party may move with any necessary supporting affidavits for a summary determination in its favor upon all or any part of the issues to be determined in the investigation. Counsel or other representatives in support of the complaint may so move at any time after 20 days following the date of service of the complaint and notice instituting the investigation. Any other party or a respondent may so move at any time after the date of publication of the notice of investigation in the **Federal Register** . Any such motion by any party in connection with the issue of permanent relief, however, must be filed at least 60 days before the date fixed for any hearing provided for in § 210.36(a)(1). Notwithstanding any other rule, the deadline for filing summary determinations shall be computed by counting backward at least 60 days including the first calendar day prior to the date the hearing is schedule to commence. If the end of the 60 day period falls on a weekend or holiday, the period extends until the end of the next business day. Under exceptional circumstances and upon motion, the presiding administrative law judge may determine that good cause exists to permit a summary determination motion to be filed out of time. 12. Amend § 210.20 by revising paragraph
(a)to read as follows: § 210.20 Declassification of confidential information.
(a)Any party may move to declassify documents (or portions thereof) that have been designated confidential by the submitter but that do not satisfy the confidentiality criteria set forth in § 201.6(a) of this chapter. All such motions, whether brought at any time during the investigation or after conclusion of the investigation shall be addressed to and ruled upon by the presiding administrative law judge who is presiding or had last presided over the investigation. If that administrative law judge is no longer employed by the Commission, the motion shall be addressed to the Commission. 13. Amend § 210.21 by revising: a. Paragraph (a); b. The last sentence of paragraphs (b)(2),
(c)introductory text, and (d); c. The third sentence of (c)(2)(ii); and d. Paragraph (e). The revisions read as follows: § 210.21 Termination of investigations.
(a)*Motions for termination.*
(1)Any party may move at any time prior to the issuance of an initial determination on violation of section 337 of the Tariff Act of 1930 to terminate an investigation in whole or in part as to any or all respondents, on the basis of withdrawal of the complaint or certain allegations contained therein, or for good cause other than the grounds listed in paragraph (a)(2) of this section. A motion for termination of an investigation based on withdrawal of the complaint shall contain a statement that there are no agreements, written or oral, express or implied between the parties concerning the subject matter of the investigation, or if there are any agreements concerning the subject matter of the investigation, all such agreements shall be identified, and if written, a copy shall be filed with the Commission along with the motion. If the agreement contains confidential business information within the meaning of § 201.6(a) of this chapter, at least one copy of the agreement with such information deleted shall accompany the motion, in addition to a copy of the confidential version. The presiding administrative law judge may grant the motion in an initial determination upon such terms and conditions as he deems proper.
(2)Any party may move at any time to terminate an investigation in whole or in part as to any or all respondents on the basis of a settlement, a licensing or other agreement, including an agreement to present the matter for arbitration, or a consent order, as provided in paragraphs (b),
(c)and
(d)of this section.
(b)* * *
(2)* * * Termination by settlement need not constitute a determination as to violation of section 337 of the Tariff Act of 1930.
(c)* * * Termination by consent order need not constitute a determination as to violation of section 337.
(2)* * *
(ii)* * * Termination by consent order need not constitute a determination as to violation of section 337. * * *
(d)*Termination based upon arbitration agreement.* * * * Termination based on an arbitration agreement does not constitute a determination as to violation of section 337 of the Tariff Act of 1930.
(e)*Effect of termination.* Termination issued by the administrative law judge shall constitute an initial determination. § 210.22 [Removed] 14. Remove and reserve § 210.22. 15. Amend § 210.25 by revising the second sentence of paragraph
(f)to read as follows: § 210.25 Sanctions.
(f)* * * If the administrative law judge defers his adjudication in such a manner, his ruling on the motion for sanctions must be in the form of a recommended determination and shall be issued no later than 30 days after issuance of the Commission's final determination on violation of section 337 or termination of the investigation. * * * Subpart E—Discovery and Compulsory Process 16. Amend § 210.28 by revising the fifth and sixth sentences of paragraph (d), revising the first sentence of paragraph (g), and revising paragraph (i)(4) to read as follows: § 210.28 Depositions.
(d)*Taking of deposition.* * * * When a deposition is recorded by other than stenographic means and is thereafter transcribed, the person transcribing it shall certify that the person heard the witness sworn on the recording and that the transcript is a correct writing of the recording. Thereafter, upon payment of reasonable charges therefor, that person shall furnish a copy of the transcript or other recording of the deposition to any party or to the deponent. * * *
(g)*Admissibility of depositions.* The fact that a deposition is taken and served upon the Commission investigative attorney as provided in this section does not constitute a determination that it is admissible in evidence or that it may be used in the investigation. * * *
(i)* * *
(4)*As to completion and return of deposition.* Errors and irregularities in the manner in which the testimony is transcribed or the deposition is prepared, signed, certified, sealed, indorsed, transmitted, served, or otherwise dealt with by the person before whom it is taken are waived unless a motion to suppress the deposition or some part thereof is made with reasonable promptness after such defect is, or with due diligence might have been, ascertained. 17. Amend § 210.29 by revising the fourth sentence of paragraph (b)(2) to read as follows: § 210.29 Interrogatories.
(b)* * *
(2)* * * The party upon whom the interrogatories have been served shall serve a copy of the answers and objections, if any, within ten days of service of the interrogatories or within the time specified by the administrative law judge. * * * 18. Amend § 210.30 by revising the first sentence of paragraph (b)(2) to read as follows: § 210.30 Request for production of documents and things and entry upon land.
(b)* * *
(2)The party upon whom the request is served shall serve a written response within 10 days or the time specified by the administrative law judge. * * * 19. Amend § 210.31 by revising the second sentence of paragraph
(b)and the last sentence of paragraph
(d)to read as follows: § 210.31 Requests for admission.
(b)*Answers and objections to requests for admission.* * * * The matter may be deemed admitted unless, within 10 days or the period specified by the administrative law judge, the party to whom the request is directed serves upon the party requesting the admission a sworn written answer or objection addressed to the matter. * * *
(d)*Effect of admissions; withdrawal or amendment of admission.* * * * Any admission made by a party under this section is for the purpose of the pending investigation and any related proceeding as defined in § 210.3 of this chapter. 20. Amend § 210.32 by revising paragraph
(g)to read as follows: § 210.32 Subpoenas.
(g)*Obtaining judicial enforcement.* In order to obtain judicial enforcement of a subpoena issued under paragraphs (a)(3) or (c)(2) of this section, the administrative law judge shall certify to the Commission, on motion or sua sponte, a request for such enforcement. The request shall be accompanied by copies of relevant papers and a written report from the administrative law judge concerning the purpose, relevance, and reasonableness of the subpoena. If the request, relevant papers, or written report contain confidential business information, the administrative law judge shall certify nonconfidential copies along with the confidential versions. The Commission will subsequently issue a notice stating whether it has granted the request and authorized its Office of the General Counsel to seek such enforcement. 21. Amend § 210.34 by: a. Revising the section heading; b. Adding the designation “Note to paragraph (c):” to the undesignated text at the end of paragraph
(c)and revising it; c. Revising paragraph (d); and d. Adding new paragraph (e). The additions and revisions read as follows: § 210.34 Protective Orders; reporting requirement; sanctions and other actions.
(c)* * *
(5)* * * Note to paragraph (c): The issue of whether sanctions should be imposed may be raised on a motion by a party, the administrative law judge's own motion, or the Commission's own initiative in accordance with § 210.25(a)(2). Parties, including the party that identifies an alleged breach or makes a motion for sanctions, and the Commission shall treat the identity of the alleged breacher as confidential business information unless the Commission issues a public sanction. The identity of the alleged breacher means the name of any individual against whom allegations are made. The Commission or administrative law judge shall allow the parties to make written submissions and, if warranted, to present oral argument bearing on the issues of violation of a protective order and sanctions therefor. If before an administrative law judge, any determination on sanctions of the type enumerated in paragraphs (c)(1) through
(4)of this section shall be in the form of a recommended determination. When the motion is addressed to the administrative law judge, he shall grant or deny a motion for sanctions under paragraph (c)(5) of this section by issuing an order.
(d)*Reporting Requirement.* Each person who is subject to a protective order issued pursuant to paragraph
(a)of this section shall report in writing to the Commission immediately upon learning that confidential business information disclosed to him or her pursuant to the protective order is the subject of:
(1)A subpoena;
(2)A court or an administrative order (other than an order of a court reviewing a Commission decision);
(3)A discovery request;
(4)An agreement; or
(5)Any other written request, if the request or order seeks disclosure, by him or any other person, of the subject confidential business information to a person who is not, or may not be, permitted access to that information pursuant to either a Commission protective order or § 210.5(b). Note to paragraph (d): This reporting requirement applies only to requests and orders for disclosure made for use of confidential business information in non-Commission proceedings.
(e)*Sanctions and other actions.* After providing notice and an opportunity to comment, the Commission may impose a sanction upon any person who willfully fails to comply with paragraph
(d)of this section, or it may take other action. Subpart F—Prehearing Conferences and Hearings 22. Amend § 210.35 by redesignating existing paragraphs (a)(2) through
(6)as (a)(3) through (7), respectively; and adding new paragraph (a)(2) to read as follows: § 210.35 Prehearing conferences.
(a)* * *
(2)Negotiation, compromise, or settlement of the case, in whole or in part; 23. Amend § 210.38 by revising paragraphs
(a)and
(d)to read as follows: § 210.38 Record.
(a)*Definition of the record.* The record shall consist of all pleadings, the notice of investigation, motions and responses, all briefs and written statements, and other documents and things properly filed with the Secretary, in addition to all orders, notices, and initial determinations of the administrative law judge, orders and notices of the Commission, hearing and conference transcripts, evidence admitted into the record (including physical exhibits), and any other items certified into the record by the administrative law judge or the Commission.
(d)*Certification of record.* The record, including all physical exhibits entered into evidence or such photographic reproductions thereof as the administrative law judge approves, shall be certified to the Commission by the administrative law judge upon his filing of an initial determination or at such earlier time as the Commission may order. 24. Amend § 210.39 by revising paragraph
(b)to read as follows: § 210.39 In camera treatment of confidential information.
(b)*Transmission of certain Commission records to district court.*
(1)In a civil action involving parties that are also parties to a proceeding before the Commission under section 337 of the Tariff Act of 1930, at the request of a party to a civil action that is also a respondent in the proceeding before the Commission, the district court may stay, until the determination of the Commission becomes final, proceedings in the civil action with respect to any claim that involves the same issues involved in the proceeding before the Commission under certain conditions. If such a stay is ordered by the district court, after the determination of the Commission becomes final and the stay is dissolved, the Commission shall certify to the district court such portions of the record of its proceeding as the district court may request. Notwithstanding paragraph
(a)of this section, the in camera record may be transmitted to a district court and be admissible in a civil action, subject to such protective order as the district court determines necessary, pursuant to 28 U.S.C. 1659.
(2)To facilitate timely compliance with any court order requiring the Commission to transmit all or part of the record of its section 337 proceedings to the court, as described in paragraph (b)(1) of this section, a party that requests the court to issue an order staying the civil action or an order dissolving the stay and directing the Commission to transmit all or part of the record to the court must file written notice of the request with the Commission Secretary on the same date that it is filed with the court. Subpart G—Determinations and Actions Taken 25. Amend § 210.42 by revising paragraphs (a)(1)(i) and (2), (h)(2) and (3), and
(i)to read as follows: § 210.42 Initial determinations. (a)(1)(i) *On issues concerning violation of section 337.* Unless otherwise ordered by the Commission, the administrative law judge shall certify the record to the Commission and shall file an initial determination on whether there is a violation of section 337 of the Tariff Act of 1930 no later than four
(4)months before the target date set pursuant to § 210.51(a).
(2)*On certain motions to declassify information.* The decision of the administrative law judge granting a motion to declassify information, in whole or in part, shall be in the form of an initial determination as provided in § 210.20(b).
(h)* * *
(2)An initial determination under § 210.42(a)(1)(i) shall become the determination of the Commission 60 days after the date of service of the initial determination, unless the Commission within 60 days after the date of such service shall have ordered review of the initial determination or certain issues therein or by order has changed the effective date of the initial determination. The findings and recommendations made by the administrative law judge in the recommended determination issued pursuant to § 210.42(a)(1)(ii) will be considered by the Commission in reaching determinations on remedy and bonding by the respondents pursuant to § 210.50(a).
(3)An initial determination filed pursuant to § 210.42(c) shall become the determination of the Commission 30 days after the date of service of the initial determination, except as provided for in paragraph (h)(5) and paragraph (h)(6) of this section, § 210.50(d)(3), and § 210.70(c), unless the Commission, within 30 days after the date of such service shall have ordered review of the initial determination or certain issues therein or by order has changed the effective date of the initial determination.
(6)The disposition of an initial determination filed pursuant to § 210.42(c) which grants a motion for summary determination that would terminate the investigation in its entirety if it were to become the Commission's final determination, shall become the final determination of the Commission 45 days after the date of service of the initial determination, unless the Commission has ordered review of the initial determination or certain issues therein, or by order has changed the effective date of the initial determination.
(i)*Notice of determination.* A notice stating that the Commission's decision on whether to review an initial determination will be issued by the Secretary and served on the parties. Notice of the Commission's decision will be published in the **Federal Register** if the decision results in termination of the investigation in its entirety, if the Commission deems publication of the notice to be appropriate under § 201.10 of subpart B of this part, or if publication of the notice is required under § 210.49(b) of this subpart or § 210.66(f) of subpart H of this part. 26. Amend § 210.43 by: a. Revising paragraphs (a)(1); b. Adding the designation “Note to paragraph (b)(1):” to the undesignated text at the end of paragraph (b)(1) and revising it; c. Adding a sentence to the end of paragraph (b)(3); d. Adding new paragraph (b)(5); and e. Revising paragraphs
(c)and (d)(1). The additions and revisions read as follows: § 210.43 Petitions for review of initial determinations on matters other than temporary relief.
(a)*Filing of the petition.*
(1)Except as provided in paragraph (a)(2) of this section, any party to an investigation may request Commission review of an initial determination issued under § 210.42(a)(1) or (c), § 210.50(d)(3) or § 210.70(c) by filing a petition with the Secretary. A petition for review of an initial determination issued under § 210.42(a)(1) must be filed within 12 days after service of the initial determination. A petition for review of an initial determination issued under § 210.42(c) that terminates the investigation in its entirety on summary determination must be filed within 10 business days after service of the initial determination. Petitions for review of all other initial determinations under § 210.42(c) must be filed within five
(5)business days after service of the initial determination. A petition for review of an initial determination issued under § 210.50(d)(3) or § 210.70(c) must be filed within 10 days after service of the initial determination.
(b)* * * Note to paragraph (b)(1): The petition for review must set forth a concise statement of the facts material to the consideration of the stated issues, and must present a concise argument providing the reasons that review by the Commission is necessary or appropriate to resolve an important issue of fact, law, or policy. If a petition filed under this paragraph exceeds 50 pages in length, it must be accompanied by a summary of the petition not to exceed ten pages. Petitions for review may not exceed 100 pages in length, exclusive of the summary and any exhibits.
(3)* * * In order to preserve an issue for review by the Commission or the U.S. Court of Appeals for the Federal Circuit that was decided adversely to a party, the issue must be raised in a petition for review, whether or not the Commission's determination on the ultimate issue, such as a violation of section 337, was decided adversely to the party.
(5)*Service of Petition.* All petitions for review of an initial determination shall be served on the other parties by messenger, overnight delivery, or equivalent means.
(c)*Responses to the petition.* Any party may file a response within eight
(8)days after service of a petition of a final initial determination under § 210.42(a)(1), and within five
(5)business days after service of all other types of petitions, except that a party who has been found to be in default may not file a response to any issue as to which the party has defaulted. If a response to a petition for review filed under this paragraph exceeds 50 pages in length, it must be accompanied by a summary of the response not to exceed ten pages. Responses to petitions for review may not exceed 100 pages in length, exclusive of the summary and any exhibits.
(d)*Grant or denial of review.*
(1)The Commission shall decide whether to grant, in whole or in part, a petition for review of an initial determination filed pursuant to § 210.42(a)(1) within 60 days of the service of the initial determination on the parties, or by such other time as the Commission may order. The Commission shall decide whether to grant, in whole or in part, a petition for review of an initial determination filed pursuant to § 210.42(a)(2) or § 210.42(c), which grants a motion for summary determination that would terminate the investigation in its entirety if it becomes the final determination of the Commission, § 210.50(d)(3), or § 210.70(c) within 45 days after the service of the initial determination on the parties, or by such other time as the Commission may order. The Commission shall decide whether to grant, in whole or in part, a petition for review of an initial determination filed pursuant to § 210.42(c), except as noted above, within 30 days after the service of the initial determination on the parties, or by such other time as the Commission may order. 27. Amend § 210.45 by revising paragraph
(c)to read as follows: § 210.45 Review of initial determinations on matters other than temporary relief.
(c)*Determination on review.* On review, the Commission may affirm, reverse, modify, set aside or remand for further proceedings, in whole or in part, the initial determination of the administrative law judge. In addition, the Commission may take no position on specific issues or portions of the initial determination of the administrative law judge. The Commission also may make any findings or conclusions that in its judgment are proper based on the record in the proceeding. If the Commission's determination on review terminates the investigation in its entirety, a notice will be published in the **Federal Register** . 28. Amend § 210.49 by revising paragraph
(b)to read as follows: § 210.49 Implementation of Commission action.
(b)*Publication and transmittal to the President.* A Commission determination that there is a violation of section 337 of the Tariff Act of 1930 or that there is reason to believe that there is a violation, together with the action taken relative to such determination under § 210.50(a) or § 210.50(d) of this part, or the modification or rescission in whole or in part of an action taken under § 210.50(a), shall promptly be published in the **Federal Register** . It shall also be promptly transmitted to the President or an officer assigned the functions of the President under 19 U.S.C. 1337(j)(1)(B), 1337(j)(2), and 1337(j)(4), together with the record upon which the determination and the action are based. 29. Amend § 210.50 by revising paragraphs (d)(1)(i) and
(ii)to read as follows: § 210.50 Commission action, the public interest, and bonding by respondents.
(d)*Forfeiture or return of respondents' bonds.* (1)(i) If one or more respondents posts a bond pursuant to 19 U.S.C. 1337(e)(1) or 1337(j)(3), proceedings to determine whether a respondent's bond should be forfeited to a complainant in whole or part may be initiated upon the filing of a motion, addressed to the administrative law judge who last presided over the investigation, by a complainant within 90 days after the expiration of the period of Presidential review under 19 U.S.C. 1337(j). If that administrative law judge is no longer employed by the Commission, the motion shall be addressed to the Commission.
(ii)A respondent may file a motion addressed to the administrative law judge who last presided over the investigation for the return of its bond within 90 days after the expiration of the Presidential review period under 19 U.S.C. 1337(j). If that administrative law judge is no longer employed by the Commission, the motion shall be addressed to the Commission. § 210.51 [Amended] 30. Amend § 210.51 in paragraph
(a)by removing all occurrences of the number “15” and adding in its place the number “16”. Subpart H—Temporary Relief 31. Revise § 210.54 to read as follows: § 210.54 Service of motion by the complainant. Notwithstanding the provisions of § 210.11 regarding service of the complaint by the Commission upon institution of an investigation, on the day the complainant files a complaint with the Commission (see § 201.8(a)(1) and § 201.8(a)(2) of this chapter), the complainant must serve non-confidential copies of both documents (as well as nonconfidential copies of all materials or documents attached thereto) on all proposed respondents and on the embassy in Washington, DC of the country in which each proposed respondent is located as indicated in the complaint. If a complainant files any supplemental information with the Commission prior to institution, nonconfidential copies of that supplemental information must be served on all proposed respondents and on the embassy in Washington, DC of the country in which each proposed respondent is located as indicated in the complaint. The complaint, motion, and supplemental information, if any, shall be served by messenger, overnight delivery, or equivalent means. A signed certificate of service must accompany the complaint and motion for temporary relief. If the certificate does not accompany the complaint and the motion, the Secretary shall not accept the complaint or the motion and shall promptly notify the submitter. Actual proof of service on each respondent and embassy (e.g., certified mail return receipts, messenger, or overnight delivery receipts, or other proof of delivery)—or proof of a serious but unsuccessful effort to make such service—must be filed within 10 days after the filing of the complaint and motion. If the requirements of this section are not satisfied, the Commission may extend its 35-day deadline under § 210.58 for determining whether to provisionally accept the motion for temporary relief and institute an investigation on the basis of the complaint. 32. Amend § 210.55 by revising paragraph
(b)to read as follows: § 210.55 Content of service copies.
(b)If the Commission determines that the complaint, motion for temporary relief, or any exhibits or attachments thereto contain excessive designations of confidentiality that are not warranted under § 201.6(a) of this chapter, the Commission may require the complainant to file and serve new nonconfidential versions of the aforesaid submissions in accordance with § 210.54 and may determine that the 35-day period under § 210.58 for deciding whether to institute an investigation and to provisionally accept the motion for temporary relief for further processing shall begin to run anew from the date the new non-confidential versions are filed with the Commission and served on the proposed respondents in accordance with § 210.54. 33. Amend § 210.56 by revising: a. The first and fourth paragraphs of the sample notice in paragraph (a); and b. The second sentence of paragraph
(b)to read as follows: § 210.56 Notice accompanying service copies.
(a)* * * Notice is hereby given that the attached complaint and motion for temporary relief will be filed with the U.S. International Trade Commission in Washington, DC on ______, 20__. The filing of the complaint and motion will not institute an investigation on that date, however, nor will it begin the period for filing responses to the complaint and motion pursuant to 19 CFR 210.13 and 210.59. If the Commission determines to conduct an investigation of the complaint and motion for temporary relief, the investigation will be formally instituted on the date the Commission publishes a notice of investigation in the **Federal Register** pursuant to 19 CFR 210.10(b). If an investigation is instituted, copies of the complaint, the notice of investigation, and the Commission's Rules of Practice and Procedure (19 CFR part 210) will be served on each respondent by the Commission pursuant to 19 CFR 210.11(a). * * *
(b)* * * The supplementary notice shall be served by messenger, overnight delivery, or equivalent means. * * * 34. Revise § 210.58 to read as follows: § 210.58 Provisional acceptance of the motion. The Commission shall determine whether to accept a motion for temporary relief at the same time it determines whether to institute an investigation on the basis of the complaint. That determination shall be made within 35 days after the complaint and motion for temporary relief are filed unless the 35-day period is restarted pursuant to §§ 210.53(a), 210.54, 210.55 or 210.57 or exceptional circumstances exist which preclude adherence to the prescribed deadline. (See § 210.10(a)(1)). Before the Commission determines whether to provisionally accept a motion for temporary relief, the motion will be examined for sufficiency and compliance with §§ 210.52, 210.53(a) (if applicable), 210.54 through 210.56 as well as §§ 201.8, 210.4 and 210.5. The motion will be subject to the same type of preliminary investigatory activity as the complaint. (See § 210.9(b).) Commission rejection of an insufficient or improperly filed complaint will preclude acceptance of a motion for temporary relief. Commission rejection of a motion for temporary relief will not preclude institution of an investigation on the complaint. 35. Amend § 210.66 by revising the last sentence of paragraph
(c)to read as follows: § 210.66 Initial determination concerning temporary relief; Commission action thereon.
(c)* * * The parties shall serve their comments on other parties by messenger, overnight delivery, or equivalent means. 36. Amend § 210.67 by revising the section heading and paragraph
(a)to read as follows: § 210.67 Remedy, the public interest, and bonding.
(a)While the motion for temporary relief is before the administrative law judge, he may compel discovery on matters relating to remedy, the public interest and bonding (as provided in § 210.61). The administrative law judge also is authorized to make findings pertaining to the public interest, as provided in § 210.66(a). Such findings may be superseded, however, by Commission findings on that issue as provided in paragraph
(c)of this section. Subpart I—Enforcement Procedures and Advisory Opinions § 210.70 [Transferred] 37. Transfer § 210.70 from subpart I to subpart H. 38. Amend § 210.71 by revising paragraph (a)(1) to read as follows: § 210.71 Information gathering.
(a)*Power to require information.*
(1)Whenever the Commission issues an exclusion order, the Commission may require any person to report facts available to that person that will help the Commission assist the U.S. Customs Service in determining whether and to what extent there is compliance with the order. Similarly, whenever the Commission issues a cease and desist order or a consent order, it may require any person to report facts available to that person that will aid the Commission in determining whether and to what extent there is compliance with the order or whether and to what extent the conditions that led to the order are changed. 39. Amend § 210.75 by revising paragraphs (b)(3), (b)(4)(ii), and
(c)to read as follows: § 210.75 Proceedings to enforce exclusion orders, cease and desist orders, consent orders, and other Commission orders.
(b)* * *
(3)The Commission, in the course of a formal enforcement proceeding under this section may hold a public hearing and afford the parties to the enforcement proceeding the opportunity to appear and be heard. The hearing will not be subject to sections 554, 555, 556, 557 and 702 of title 5 of the United States Code. The Commission may delegate the hearing to a presiding administrative law judge, who shall certify an initial determination to the Commission. That initial determination shall become the determination of the Commission 90 days after the date of service of the initial determination unless the Commission, within 90 days after the date of such service shall have ordered review of the initial determination on certain issues therein, or by order shall have changed the effective date of the initial determination.
(4)* * *
(ii)Bring civil actions in a United States district court pursuant to paragraph
(c)of this section (and section 337(f)(2) of the Tariff Act of 1930) to recover for the United States the civil penalty accruing to the United States under that section for the breach of a cease and desist order or a consent order, and to obtain a mandatory injunction incorporating the relief the Commission deems appropriate for enforcement of the cease and desist order or consent order; or
(c)*Court enforcement.* To obtain judicial enforcement of an exclusion order, a cease and desist order, a consent order, or a sanctions order, the Commission may initiate a civil action in the U.S. district court. In a civil action under section 337(f)(2) of the Tariff Act of 1930, the Commission may seek to recover for the United States the civil penalty accruing to the United States under that section for the breach of a cease and desist order or a consent order, and may ask the court to issue a mandatory injunction incorporating the relief the Commission deems appropriate for enforcement of the cease and desist order or consent order. The Commission may initiate a proceeding to obtain judicial enforcement without any other type of proceeding otherwise available under section 337 or this subpart or without prior notice to any person, except as required by the court in which the civil action is initiated. 40. Amend § 210.79 by revising paragraph
(a)to read as follows: § 210.79 Advisory Opinions.
(a)*Advisory opinions.* Upon request of any person, the Commission may, upon such investigation as it deems necessary, issue an advisory opinion as to whether any person's proposed course of action or conduct would violate a Commission exclusion order, cease and desist order, or consent order. The Commission will consider whether the issuance of such an advisory opinion would facilitate the enforcement of section 337 of the Tariff Act of 1930, would be in the public interest, and would benefit consumers and competitive conditions in the United States, and whether the person has a compelling business need for the advice and has framed his request as fully and accurately as possible. Advisory opinion proceedings are not subject to sections 554, 555, 556, 557, and 702 of title 5 of the United States Code. 41. Amend part 210 by adding Appendix A to read as follows: Appendix A to Part 210.—Adjudication and Enforcement Initial determination concerning Petitions for review due Response to petitions due Commission deadline for determining whether to review the initial determination Violation § 210.42(a)(1) 12 days from service of the initial determination 8 days from service of any petition 60 days from service of the initial determination. Forfeiture of respondent's bond § 210.50(d)(3) 10 days from service of the initial determination 5 business days from service of any petition 45 days from service of the initial determination. Forfeiture of complainant's temporary relief bond § 210.70(c) 10 days from service of the initial determination 5 business days from service of any petition 45 days from service of the initial determination. Summary initial determination that would terminate the investigation if it became the Commission's final determination § 210.42(c) 10 days from service of the initial determination 5 business days from service of any petition 45 days from service of the initial determination. Other matters § 210.42(c) 5 business days from service of the initial determination 5 business days from service of any petition 30 days from service of the initial determination on private parties. Formal enforcement proceedings § 210.75(b) By order of the Commission By order of the Commission 90 days from service of the initial determination on private parties. Issued: December 14, 2007. Marilyn R. Abbott, Secretary to the Commission. [FR Doc. E7-24591 Filed 12-19-07; 8:45 am] BILLING CODE 7020-02-P DEPARTMENT OF LABOR Mine Safety and Health Administration 30 CFR Part 75 RIN 1219-AB40 Fire Extinguishers in Underground Coal Mines AGENCY: Mine Safety and Health Administration, Labor. ACTION: Proposed rule; close of comment period. SUMMARY: The Mine Safety and Health Administration (MSHA), is proposing to amend the current standard for the quantity and location of firefighting equipment and materials underground to ensure that they are readily available to quickly extinguish a fire. In lieu of the current requirements for rock dust and other firefighting materials, this proposed rule would allow the use of portable fire extinguishers in working sections of underground anthracite coal mines that have no electrical equipment at the face and produce less than 300 tons of coal per shift. The rule also would require an additional fire extinguisher in lieu of rock dust at temporary electrical installations in all underground coal mines. DATES: All comments must be received at MSHA no later than midnight Eastern Standard Time on February 4, 2008. ADDRESSES:
(1)Identify all comments by “RIN 1219-AB40” and send them to MSHA as follows: • Electronically through the Federal e-Rulemaking portal at *http://www.regulations.gov* or by e-mail to *zzMSHA-comments@dol.gov.* • By facsimile to 202-693-9441. • By mail or hand delivery to MSHA, Office of Standards, Regulations, and Variances, 1100 Wilson Boulevard, Room 2350, Arlington, Virginia 22209-3939. If comments are hand-delivered, please stop by the 21st floor first to check in with the receptionist.
(2)MSHA will post all comments on the internet without change, including any personal information they may contain. Rulemaking comments can be accessed via the internet at *http://www.msha.gov/regsinfo.htm* or in person at MSHA's public reading room at 1100 Wilson Boulevard, Room 2349, Arlington, Virginia.
(3)Subscribe to MSHA's *list serve* at *http://www.msha.gov/subscriptions/subscribe.aspx* to receive an e-mail notification when MSHA publishes rulemaking documents in the **Federal Register** . *Hearings:* Public hearings will be scheduled if requested. *Information Collection Requirements.* Comments concerning the information collection requirements must be clearly identified as such and sent to both the Office of Management and Budget
(OMB)and MSHA as follows:
(1)*To OMB:* All comments may be sent by mail to the Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, 725 17th Street, NW., Washington, DC 20503, *Attn:* Desk Officer for MSHA; and
(2)*To MSHA:* Comments must be clearly identified by RIN: 1219-AB40 as comments on the information collection requirements and transmitted to MSHA as indicated above under ADDRESSES . FOR FURTHER INFORMATION CONTACT: Patricia W. Silvey at 202-693-9440 (Voice), 202-693-9441 (Fax), or *Silvey.Patricia@dol.gov* (E-mail). SUPPLEMENTARY INFORMATION: I. Introduction The existing safety standards under 30 CFR part 75, subpart L—Fire Protection, are designed to ensure that firefighting equipment and materials are readily available to quickly extinguish a fire and prevent its spread. Because of the explosive nature of coal dust and the possible presence of methane gas, there is great potential for a fire to spread to other areas of the underground coal mine. Historical records demonstrate that the consequences of a fire in an underground coal mine can be disastrous. II. Background The Bureau of Mines in the U.S. Department of the Interior (Bureau) promulgated and enforced fire protection standards under the Federal Coal Mine Safety Act (30 U.S.C. 451-483). These standards continued in effect under the Federal Coal Mine Health and Safety Act of 1969 (Coal Act) through a transfer provision in the law. On November 20, 1970 (35 FR 17890), the Bureau revised its standards addressing fire protection in underground coal mines. The revised standards continued in effect under the Federal Mine Safety and Health Act of 1977 (Mine Act) through a transfer provision in the law when the enforcement of mine safety and health standards was moved from the Department of the Interior to the Department of Labor. The standard addressed in this rule has not changed since that time. A. Petition for Modification of a Mandatory Safety Standard Section 101(c) of the Mine Act allows a mine operator or the representative of miners to petition MSHA for a modification of an existing safety standard. After investigating each petition, MSHA may grant a modification from the application of a safety standard when MSHA determines that—
(1)The alternative method for achieving the desired result will at all times guarantee no less than the same measure of protection as the existing standard, or
(2)The application of the existing standard will result in a diminution of safety to miners at that mine. This proposed rule would eliminate the need for a mine operator to file a petition for modification of an existing standard in order to permit the use of portable fire extinguishers in lieu of rock dust and other firefighting materials in the working sections of underground anthracite coal mines that produce less than 300 tons of coal per shift and use no electrical equipment at the face. Also, many underground coal mine operators have filed petitions for modification to use portable fire extinguishers at temporary electrical installations. This proposed rule would eliminate the requirement for rock dust and instead would require portable fire extinguishers at underground temporary electrical installations. Adding this requirement would eliminate the need to petition for permission to use fire extinguishers at these locations. B. Rock Dust for Fire Protection Rock dust is an inorganic, non-combustible dust, such as crushed limestone, that the mine operator spreads on coal surfaces to reduce the chance of stirring up an explosive suspension of coal dust. The rock dust also can work as a fire suppressant by smothering or quenching the flame. It is widely used in coal mining to reduce the likelihood of coal dust explosions or flame propagation. A single bag of rock dust weighs about 40 pounds when dry. In damp environments, a bag of rock dust will absorb water, rendering it unusable for fire prevention or suppression purposes. Damp rock dust becomes somewhat plastic in consistency and dries into a hard, brick-like mass. The presence of bags of rock dust can give a false sense of security for firefighting purposes because the rock dust can absorb water even through a sealed bag. The miner or mine operator can be unaware that the rock dust is useless as a fire suppressant until trying to use it. Bags of rock dust must be protected from moisture, checked frequently, and replaced if wet or hardened. This lifting and moving of heavy bags of rock dust increases the risk of personal injury for miners. C. Requirements for Portable Fire Extinguishers Existing standard § 75.1100-1 sets minimum requirements for the type and quality of firefighting equipment required in 30 CFR part 75, subpart L—Fire Protection. Paragraph
(e)of § 75.1100-1 describes the criteria for a portable fire extinguisher as follows:
(e)*Portable fire extinguisher:* A portable fire extinguisher shall be either
(1)a multipurpose dry chemical type containing a nominal weight of 5 pounds of dry powder and enough expellant to apply the powder or
(2)a foam-producing type containing at least 2 1/2 gallons of foam-producing liquids and enough expellant to supply the foam. Only fire extinguishers approved by the Underwriters Laboratories, Inc., or Factory Mutual Research Corp., carrying appropriate labels as to type and purpose, shall be used. After March 30, 1971, all new portable fire extinguishers acquired for use in a coal mine shall have a 2A 10 BC or higher rating. III. Section-by-Section Discussion Existing standard § 75.1100-2 sets requirements for the quantity and location of firefighting equipment and materials in underground coal mines. At working sections, paragraph
(a)requires 240 pounds of rock dust (about six bags), two portable fire extinguishers, and a ready supply of water or dry chemical. At permanent electrical installations, paragraph (e)(1) requires two portable fire extinguishers or one having twice the minimum capacity specified for a portable fire extinguisher in existing § 75.1100-1(e). Rock dust is not required at permanent electrical installations. At temporary electrical installations, however, paragraph (e)(2) requires one portable fire extinguisher and 240 pounds of rock dust. A. Section 75.1100-2(a): Working Sections Existing § 75.1100-2(a) includes different requirements for readily available firefighting equipment and materials in working sections based on the mine's production. Because anthracite coal mines typically produce only 10 to 20 tons of coal per shift, they are covered by existing § 75.1100-2(a)(2), which requires—
(2)Each working section of coal mines producing less than 300 tons of coal per shift shall be provided with two portable fire extinguishers, 240 pounds of rock dust in bags or other suitable containers, and at least 500 gallons of water and at least 3 pails of 10 quart capacity. In lieu of the 500 gallon water supply a waterline with sufficient hose to reach the working places, a portable water car (500 gallons capacity) or a portable all-purpose dry powder chemical car of at least 125-pounds capacity may be provided. These options, however, do not address or accommodate the typical conditions in the working sections of underground anthracite coal mines. This proposed rule would add new paragraph § 75.1100-2(a)(3) to provide an additional compliance option for underground anthracite coal mines and make nonsubstantive format changes to § 75.1100-2(a)(2). 1. Addition of § 75.1100-2(a)(3) for Underground Anthracite Coal Mines New paragraph § 75.1100-2 would apply only to underground anthracite coal mines. Almost all of these mines still use mining methods that were developed over 150 years ago to suit their unique geological characteristics. Anthracite coal is a hard coal found in undulating, steeply pitched veins, and mined with slow, non-mechanized mining methods. In contrast, bituminous coal is softer and generally found in horizontal veins. Bituminous coal production uses highly mechanized methods and depends on electricity for face equipment. Anthracite mining uses methods and systems that rely on manual labor with little or no mechanization. Electricity that can cause or contribute to a fire hazard is usually non-existent near the face. Typically, anthracite coal mines operate face equipment using air driven motors for coal drills, air driven fans to supplement face ventilation, and air driven saws and hoists for the cutting and placement of timber. Mining conditions in underground anthracite coal mines are generally wet and removal of water from the face areas is a major problem. The steep grade permits natural water drainage in open, on-grade ditches from the face area to a slope sump where it is stored and eventually pumped to a suitable water treatment area. Waterlines are seldom installed to the face. Anthracite coal has a low volatile ratio and the dust does not propagate an explosion. Anthracite coal's ignition temperature is high (925 to 970 degrees Fahrenheit) compared to bituminous coal's ignition temperature (700 to 900 degrees Fahrenheit). Thus, anthracite coal dust is harder to ignite than bituminous coal dust and the risk of a fire is lower in anthracite coal mines than in bituminous coal mines. There has been only one reported fire underground in an anthracite coal mine since implementation of the Mine Act. This fire occurred at a mine that used electrical equipment at the face. In summary, almost all underground anthracite coal mines are steeply sloped with little space underground for storage of firefighting equipment or materials; they use hand-operated or mechanical equipment, rather than electrical equipment (a potential ignition source), underground at the face where coal is mined; and they are wet, causing rock dust to become hard and unusable for firefighting. In addition, anthracite coal mine dust has low volatility, is difficult to ignite, and does not propagate an explosion. 2. Discussion of Alternative for Underground Anthracite Coal Mines Because of the uniqueness of the mining methods and conditions in underground anthracite mines, anthracite mine operators have petitioned MSHA to allow the use of only portable fire extinguishers to replace existing requirements where rock dust, water cars, and other water storage are not practical. The mine operators assert that the alternative method will at all times guarantee no less than the same measure of protection as that afforded by the standard. From 1994 through 2004, MSHA received over 60 petitions for modification of existing paragraph (a)(2) of § 75.1100-2 and granted 54 for working sections at underground anthracite coal mines. The rest were dismissed for reasons unrelated to the merits of the proposed alternative method. For example, one petition was dismissed because the mine went out of business. None of the petitions were denied for safety reasons. MSHA granted the petitions for a modification with the following conditions. 1. Fire extinguisher(s) having at least four times the minimum capacity specified for a portable fire extinguisher in 30 CFR 75.1100-1(e) shall be located no greater than 500 feet from the working face. 2. Fire extinguisher(s) having at least six times the minimum capacity specified for a portable fire extinguisher in 30 CFR 75.1100-1(e) shall be located at the entrance to the gangway at the bottom of the slope. There were no significant adverse comments filed on these petitions. Based on MSHA's experience and investigation of these petitions for modification, MSHA concluded that the use of fire extinguishers in the situations addressed is a safe alternative to existing requirements. The granted alternative method provides for a quick response to any fire on the section and does not reduce protection for miners. In addition, because there are a variety of fire extinguishers currently available, MSHA anticipates no problems in obtaining fire extinguishers. This proposed rule would incorporate the language from these granted petitions for modification into new paragraph § 75.1100-2(a)(3). The Agency has made changes to the language from these petitions to clarify the mine operator's responsibility regarding the size of fire extinguishers required. Thus, this proposed rule would eliminate the need to file a petition for modification to use only portable fire extinguishers, in lieu of the firefighting equipment and materials required by existing paragraph (a)(2), for fighting fires at working sections of underground anthracite coal mines that have no electrical equipment at the working section. The proposed rule would not apply to the few underground anthracite coal mines that use electrical equipment at the working section. B. Section 75.1100-2(e): Electrical Installations Existing § 75.1100-2(e) causes unnecessary compliance difficulties for some mines with temporary electrical installations underground. Under the existing standard, permanent and temporary electrical installations have different requirements for firefighting equipment and materials. Existing § 75.1100-2(e) requires that—
(e)*Electrical installations.*
(1)Two portable fire extinguishers or one extinguisher having at least twice the minimum capacity specified for a portable fire extinguisher in § 75.1100-1(e) shall be provided at each permanent electrical installation.
(2)One portable fire extinguisher and 240 pounds of rock dust shall be provided at each temporary electrical installation. 1. Characteristics of Underground Electrical Installations The difference between permanent and temporary underground electrical installations can be negligible in regard to their potential fire hazard. For example, MSHA generally considers electrical installations located outby the working section to be permanent and those on the working section to be temporary. However, MSHA considers a battery charging station to be temporary because it moves, even though it is outby the working section. If the electrical installation is in a fireproof enclosure, then MSHA considers it to be permanent. If not, MSHA considers it temporary. MSHA considers a power center supplying the belt line to be permanent, but one supplying a portable compressor to be temporary. Typically, temporary electrical installations are unattended pumping stations located in remote areas of the mine, battery charging stations, power installation transformers, and section power centers for operating electrical face equipment. 2. Elimination of Separate Requirements for Permanent and Temporary Electrical Installations From 1994 through 2004, MSHA received 34 petitions for modification of paragraph (e)(2) of § 75.1100-2 and granted all of them. The petitioners asserted that it is difficult to comply with the current standard for temporary electrical installations in wet and damp environments, such as pumping stations, because the rock dust becomes unusable for firefighting purposes. The mine operator must check these locations frequently to assure that the rock dust is kept dry for use in the event of a fire. The petitioners assert that the exclusive use of portable fire extinguishers as an alternative means of extinguishing fires is at least as effective as the existing standard. They also have asserted that, in some cases, portable fire extinguishers may be a safer fire suppressant because lifting the heavy bags of rock dust increases the risk of personal injury. In granting these petitions, MSHA acknowledged the tendency of rock dust to harden over time and become brick-like when exposed to humidity, which greatly reduces the value of the rock dust as a firefighting tool. MSHA has no evidence of adverse outcomes associated with these granted petitions. Although MSHA did not receive any comments contesting the granted petitions, MSHA received a few comments on the petitions requesting that the Agency require a minimum of two fire extinguishers as the alternative method. Two fire extinguishers may be preferable in some situations to allow two miners to fight the fire simultaneously or to provide a backup should one of the portable fire extinguishers fail. 3. Impact of This Proposed Rule This proposed rule would modify existing § 75.1100-2(e) to eliminate the separate requirements for permanent and temporary electrical installations. It would remove the requirement for rock dust at temporary underground electrical installations and require two portable fire extinguishers, or one having twice the minimum capacity, at all electrical installations. Essentially, the proposed rule would make the requirements for fire extinguishers at temporary electrical installations identical to the current requirements at permanent electrical installations. The Agency has made changes to the regulatory language to clarify the mine operator's responsibility regarding the size of fire extinguishers required. This revision would not reduce protection for miners. MSHA believes that all of the proposed revisions offer greater flexibility, provide no less protection to affected miners, and do not result in a diminution of safety to miners. IV. Executive Order 12866 Executive Order (E.O.) 12866 requires that regulatory agencies assess both the costs and benefits of significant regulatory action. Under the Executive Order, a “significant regulatory action” is one meeting any number of specified conditions, including the following: Having an annual effect on the economy of $100 million or more; creating a serious inconsistency or interfering with an action of another agency; materially altering the budgetary impact of entitlements or the rights of entitlement recipients; or raising novel legal or policy issues. MSHA has determined that this proposed rule would not have an annual effect of $100 million or more on the economy and that, therefore, it is not an economically “significant regulatory action” under section 3(f) of E.O. 12866. MSHA, however, has concluded that the proposed rule is otherwise significant under Executive Order 12866 because it raises novel legal or policy issues. A. Population-at-Risk As of 2006, this proposed rule would apply to 670 underground coal mine operators employing 42,667 miners (excluding office workers). B. Costs This proposed rule potentially would affect all coal mines that have temporary electrical installations underground and about 20 active underground anthracite coal mines. As described below, MSHA estimates that the annual cost savings of this proposed rule would be $2,366. 1 1 $2,366 = $929 (savings to new anthracite coal mines) + $1,436 (savings to new temporary electrical installations). 1. Costs of Portable Fire Extinguishers and Rock Dust MSHA experience indicates that a 10-to 20-pound fire extinguisher is the industry standard. In addition, existing standards already require the mine operator to inspect and maintain the fire extinguishers periodically and replace them as necessary. The portable fire extinguishers have a shelf life of about 4 years. The cost to refill an emptied fire extinguisher is about 25 percent of its initial cost of about $25.00 for an industrial strength 2A:10B:C nominal 5-pound fire extinguisher. MSHA does not require mine operators to report fires lasting less than 10 minutes from time of discovery and, therefore, has no estimate of the frequency with which a portable fire extinguisher is used and refilled. MSHA considers the maintenance of portable fire extinguishers to be an essential business practice for underground coal mines. The cost for 240 pounds of rock dust (six 40-pound bags) is about $6.00 ($1.00 per bag). Although rock dust usually does not require maintenance, it has to be replaced routinely in wet or damp environments, or otherwise protected to prevent it from becoming unusable. The shelf life of rock dust varies considerably in damp or wet environments. In addition to the labor cost for routine checking and replacing bags of rock dust, the cost associated with heavy, re-sealable plastic bags or other methods of prolonging the shelf life of rock dust under these conditions is about $2 per bag. 2. Cost Savings for New Underground Anthracite Coal Mines MSHA estimates that this proposed rule would have no cost impact on the 20 active underground anthracite coal mines because, currently, they are operating under an alternative method that allows them to provide and rely solely on portable fire extinguishers for firefighting on the working section. This proposed rule, however, would benefit new underground anthracite coal mines by eliminating the need for the mine operator to file a petition for modification in order to provide and rely solely on portable fire extinguishers in lieu of the water and rock dust required by the existing standard. MSHA estimates that the average cost of filing a petition for modification is $465. MSHA estimates that it takes a mine supervisor, earning $57.82 per hour, 8 hours to prepare the petition for modification and that, on average, it takes a clerical worker, earning $20.96 per hour, 0.1 hours to copy and mail a petition. 2 On average, two new underground anthracite coal mines open each year. 3 Therefore, the associated annual cost savings for new underground anthracite coal mines would be about $929. 4 2 $464.66 = (8 hours × $57.82) + (0.1 hour × $20.96). 3 This is the average number of underground anthracite coal mines that opened in each year from 1999-2005. 4 $929 = 2 petitions × $464.66 per petition. 3. Cost Savings for Temporary Electrical Installations at Underground Coal Mines Existing paragraph (e)(1) of § 75.1100-2 requires two portable fire extinguishers, or one fire extinguisher having at least twice the minimum capacity specified in existing § 75.1100-1(e), at each permanent underground electrical installation. Existing paragraph (e)(2) of § 75.1100-2 requires one portable fire extinguisher and 240 pounds of rock dust at each temporary underground electrical installation. This proposed rule would eliminate the distinction between permanent and temporary electrical installations. It would modify existing § 75.1100-2(e) by removing the sub-paragraph designations
(1)and
(2)and applying the requirements for permanent electrical installations currently in paragraph
(1)to all underground electrical installations. For the purpose of this analysis, MSHA estimates that most existing temporary electrical installations are already in compliance with this proposed rule because they contain two portable fire extinguishers or one having at least twice the minimum capacity. As previously noted, from 1994 through 2004, MSHA received and granted 34 petitions for modification of existing § 75.1100-2(e)(2). This averages to be about 3.1 petitions per year. Under the proposed rule, it would be unnecessary for a mine operator to file a petition for modification to obtain permission to rely exclusively on fire extinguishers for fighting fires at the mine's temporary electrical installations. Based on 3.1 petitions per year at an average cost of $465 for filing a petition for modification, MSHA estimates that the annual cost savings would be about $1,436 for underground coal mines. 5 5 $1,436 = 3.1 petitions × $464.66 per petition. C. Benefits The proposed rule would allow the exclusive use of portable fire extinguishers in certain locations in the mine without the need for a mine operator to file a petition for modification and wait for MSHA approval. The most significant benefit is that rock dust, that can quickly be rendered ineffective by dampness, can be replaced immediately by a more effective and reliable fire suppressant, a portable fire extinguisher. An additional advantage of portable fire extinguishers is that they are easier to transport. A mine operator will usually be able to replace a damaged or spent fire extinguisher more quickly than 240 pounds of rock dust. MSHA also can reasonably anticipate a decreased risk of personal injury related to lifting and moving heavy bags of rock dust that have become hard and unusable. 6 6 MSHA injury data contain 332 injuries between 1999 and September 2005 where the phrase “rock dust” appears in the accident narrative. Of these 332 injuries, 120 (≉39%) involved lifting, carrying, or moving rock dust or bags of rock dust. D. Feasibility MSHA has concluded that the requirements of the proposed rule would be both technologically and economically feasible. This proposed rule would be technologically feasible because it would not be technology-forcing nor involve activities on the frontiers of scientific knowledge. This proposed rule would be economically feasible because it provides a cost saving to underground coal mines. Cost savings are based on new underground anthracite coal mine operators not having to file petitions for modification to use portable fire extinguishers in lieu of rock dust and other fire fighting materials at the working sections of underground anthracite coal mines that use no electrical equipment at the face and produce less than 300 tons of coal per shift. Likewise, there would be a cost savings for both existing and new underground coal mine operators not having to file petitions for modification to use portable fire extinguishers in lieu of rock dust at temporary underground electrical installations. V. The Regulatory Flexibility Act
(RFA)and the Small Business Regulatory Enforcement Fairness Act (SBREFA) Pursuant to the Regulatory Flexibility Act
(RFA)of 1980 as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA), MSHA has analyzed the impact of the proposed rule on small businesses. Further, MSHA has made a determination with respect to whether or not MSHA can certify that the proposed rule would not have a significant economic impact on a substantial number of small entities that are covered by this rulemaking. Under the SBREFA amendments to the RFA, MSHA must include in the rule a factual basis for this certification. If a rule will have a significant economic impact on a substantial number of small entities, MSHA must develop a regulatory flexibility analysis. A. Definition of a Small Mine Under the RFA, in analyzing the impact of a rule on small entities, MSHA must use the Small Business Administration
(SBA)definition for a small entity or, after consultation with the SBA Office of Advocacy, establish an alternative definition for the mining industry by publishing that definition in the **Federal Register** for notice and comment. MSHA has not taken such an action and, consequently, must use the SBA definition. The SBA defines a small entity in the mining industry as an establishment with 500 or fewer miners. MSHA has also looked at the impacts of MSHA's rules on a different subset of mines that MSHA and the mining community have traditionally referred to as “small mines,” those having fewer than 20 miners. In general, these “small mines” differ from mines employing 20 or more miners not only in the number of miners, but also in economies of scale in material produced, in the type and amount of production equipment, and in supply inventory. Therefore, their costs of complying with MSHA's rules and the impact of the rules on them will also tend to be different. It is for this reason that “small mines” employing fewer than 20 miners are of special concern to us. This analysis complies with the legal requirements of the RFA for an analysis of the impacts on “small entities” while continuing MSHA's traditional definition of “small mines.” MSHA concludes that the Agency can certify that the proposed rule would not have a significant economic impact on a substantial number of small entities that are covered by this rulemaking. MSHA has determined that this is the case both for mines affected by this rulemaking with fewer than 20 miners and for mines affected by this rulemaking with 500 or fewer miners. B. Factual Basis for Certification This proposed rule would provide at least the same level of protection for miners as the current standard. It would result in a net cost savings and have no adverse economic impact on the underground coal mining industry. MSHA estimated that 2006 production for underground coal mines was 7,817,859 tons for mines that had fewer than 20 miners and 277,634,777 tons for mines that had 500 or fewer miners. Using the 2005 price of underground coal of $36.42 per ton, MSHA estimates the 2006 underground coal revenues to be about $285 million for mines employing fewer than 20 miners and $10.1 billion for mines employing 500 or fewer miners. Using either MSHA's traditional definition of a small mine (those having fewer than 20 miners) or SBA's definition of a small mine (those having 500 or fewer miners), MSHA estimates that the proposed rule would result in a savings in the compliance cost for underground coal mines. VI. Paperwork Reduction Act of 1995 Due to this rulemaking, mine operators would no longer have to petition MSHA for a modification of existing paragraphs (a)(2) and (e)(2) of § 75.1100-2 in order to rely exclusively on fire extinguishers for firefighting purposes. Existing Office of Management and Budget
(OMB)paperwork package 1219-0065 includes the annual paperwork burden related to the preparation and filing of petitions with MSHA, including petitions for modification to use fire extinguishers. This proposed rule would reduce the paperwork burden in OMB paperwork package 1219-0065 by $2,366 and 41 hours annually. 7 7 $2,366 = $929 (savings for new anthracite coal mines) + $1,436 (savings for temporary electrical installations) and 41 hours = (8 + 0.1) hours per petition × (2 + 3) petitions. Existing OMB paperwork package 1219-0054 includes the annual paperwork burden related to examining fire extinguishers every 6 months and writing the date of the examination on a tag attached to the fire extinguisher. MSHA estimates that the paperwork burden for examining and tagging additional fire extinguishers at temporary electrical installations would be negligible because almost all temporary electrical installations are already in compliance. VII. Other Regulatory Considerations A. The Unfunded Mandates Reform Act of 1995 and Executive Order 12875: Enhancing the Intergovernmental Partnership (58 FR 58093) This proposed rule would not include any Federal mandate that may result in increased expenditures by State, local, or tribal governments; nor would it increase private sector expenditures by more than $100 million annually; nor would it significantly or uniquely affect small governments. Accordingly, the Unfunded Mandates Reform Act (2 U.S.C. 1501 *et seq.* ) requires no further agency action or analysis. B. The Treasury and General Government Appropriations Act of 1999: Assessment of Federal Regulations and Policies on Families This proposed rule would have no affect on family well-being or stability, marital commitment, parental rights or authority, or income or poverty of families and children. Accordingly, section 654 of the Treasury and General Government Appropriations Act of 1999 (5 U.S.C. 601 note) requires no further agency action, analysis, or assessment. C. Executive Order 12630: Government Actions and Interference With Constitutionally Protected Property Rights (53 FR 8859) This proposed rule would not implement a policy with “takings” implications. Accordingly, Executive Order 12630 requires no further agency action or analysis. D. Executive Order 12988: Civil Justice Reform (61 FR 4729) This proposed rule was written to provide a clear legal standard for affected conduct and was carefully reviewed to eliminate drafting errors and ambiguities, so as to minimize litigation and undue burden on the federal court system. Accordingly, this proposed rule meets the applicable standards provided in section 3 of Executive Order 12988. E. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks (62 FR 19885) This proposed rule would have no adverse impact on children. Accordingly, Executive Order 13045, as amended by Executive Orders 13229 and 13296, requires no further agency action or analysis. F. Executive Order 13132: Federalism (64 FR 43255) This proposed rule would not have “federalism implications” because it would not “have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.” Accordingly, Executive Order 13132 requires no further agency action or analysis. G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments (63 FR 27655) This proposed rule would not have “tribal implications” because it would not “have substantial direct effects 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.” Accordingly, Executive Order 13175 requires no further agency action or analysis. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355) This proposed rule would not be a “significant energy action” because it would not be “likely to have a significant adverse effect on the supply, distribution, or use of energy (including a shortfall in supply, price increases, and increased use of foreign supplies).” Accordingly, Executive Order 13211 requires no further agency action or analysis. I. Executive Order 13272: Proper Consideration of Small Entities in Agency Rulemaking (67 FR 53461) MSHA has thoroughly reviewed this proposed rule to assess and take appropriate account of its potential impact on small businesses, small governmental jurisdictions, and small organizations. As discussed in section V of this preamble, MSHA has determined and certified that this proposed rule would not have a significant economic impact on a substantial number of small entities. Accordingly, Executive Order 13272 requires no further agency action or analysis. VIII. Petitions for Modification On the effective date of a final rule, all existing granted petitions for modification for the use of fire extinguishers in lieu of rock dust and other firefighting materials on working sections in underground anthracite coal mines and at temporary electrical installations in underground coal mines under § 75.1100-2 paragraphs (a)(2) and (e)(2), respectively, would be revoked. Thereafter, mine operators would be required to comply with the provisions of the final rule. List of Subjects in 30 CFR Part 75 Coal mines, Fire prevention, Mine safety and health, Safety, Underground mining. Dated: December 12, 2007. Richard E. Stickler, Assistant Secretary for Mine Safety and Health. For the reasons discussed in the preamble, the Mine Safety and Health Administration is proposing to amend 30 CFR part 75 as follows: PART 75—MANDATORY SAFETY STANDARDS—UNDERGROUND COAL MINES 1. The authority citation for part 75 continues to read as follows: Authority: 30 U.S.C. 811. 2. Amend § 75.1100-2 by revising paragraph (a)(2), adding paragraph (a)(3), and revising paragraph
(e)to read as follows: § 75.1100-2 Quantity and location of firefighting equipment.
(a)* * *
(2)Each working section of coal mines producing less than 300 tons of coal per shift shall be provided with the following:
(i)Two portable fire extinguishers; and
(ii)240 pounds of rock dust in bags or other suitable containers; and
(iii)At least 500 gallons of water and at least three pails of 10-quart capacity; OR a waterline with sufficient hose to reach the working places; OR a portable water car of at least 500-gallon capacity; OR a portable, all-purpose, dry-powder chemical car of at least 125-pound capacity.
(3)As an alternative to paragraph (a)(2) of this section, each working section with no electrical equipment at the face of an anthracite coal mine producing less than 300 tons of coal per shift shall be provided with the following:
(i)Portable fire extinguishers containing a total capacity of at least 30 pounds of dry chemical or 15 gallons of foam and located at the entrance to the gangway at the bottom of the slope; and
(ii)Portable fire extinguishers containing a total capacity of at least 20 pounds of dry chemical or 10 gallons of foam and located within 500 feet from the working face.
(e)*Electrical installations.* At each electrical installation, the operator shall provide two portable fire extinguishers or one having at least 10 pounds of dry chemical or 5 gallons of foam. [FR Doc. E7-24747 Filed 12-19-07; 8:45 am] BILLING CODE 4510-43-P DEPARTMENT OF DEFENSE Office of the Secretary [DOD-2007-HA-0010, RIN 0720-AB09] 32 CFR Part 199 TRICARE Program; Overpayments Recovery AGENCY: Office of the Secretary, DoD. ACTION: Proposed rule. SUMMARY: This rule proposes amendments to the CHAMPUS and TRICARE program regulation that governs the recoupment of erroneous payments. The proposed rule implements changes required by the Debt Collection Improvement Act of 1996 and the revised Federal Claims Collection Standards. DATES: Comments must be received on or before February 19, 2008. Do not submit comments directly to the point of contact or mail your comments to any address other that what is shown below. Doing so will delay the posting of the submission. ADDRESSES: You may submit comments, identified by docket number and or RIN number and title, by any of the following methods: • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. • *Mail:* Federal Docket Management System Office, 1160 Defense Pentagon, Washington, DC 20301-1160. *Instructions:* All submissions received must include the agency name and docket number or Regulatory Information Number
(RIN)for this **Federal Register** document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing on the Internet at *http://regulations.gov* as they are received without change, including any personal identifiers or contact information. FOR FURTHER INFORMATION CONTACT: Gail L. Jones,
(303)676-3401. SUPPLEMENTARY INFORMATION: Background and Purpose On December 23, 1985, the Office of the Secretary of Defense published a final rule in the **Federal Register** (50 FR 52315), clarifying specific procedures and criteria in the assertion, collection or compromise of federal claims and the suspension or termination of collection action on such claims arising under the operation of the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). Section 199.11, “Overpayments Recovery,” addresses claims in favor of the United States arising under the Federal Claims Collection Act (recoupment claims). This proposed rule implements changes required by the Debt Collection Improvement Act of 1996
(DCIA)and the revised Federal Claims Collection Standards, which were jointly issued by the Department of the Treasury (Treasury), and the Department of Justice (DOJ). The DCIA centralized the collection of most delinquent non-tax debt at the Department of the Treasury Financial Management Service (Treasury). Agencies are now required to refer debts to Treasury for centralized administrative offset under the Treasury Offset Program
(TOP)and to transfer debts to Treasury for collection on the agencies' behalf, a process known as cross-servicing. Section-by-Section Analysis Paragraph
(a)of this proposed rule provides that it applies to the TRICARE program and the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). Section (b)(1) of this proposed rule has been updated to include the DCIA and the revised Federal Claims Collection Standards, 31 CFR parts 900-904, as authority for collection, as well as Treasury regulations, found at 31 CFR part 285, subpart A, implementing the DCIA and related statutes governing the offset of Federal salaries (5 U.S.C. 5514, 5 CFR 550, subpart K), administrative offset (31 U.S.C. 3716), administrative offset of tax refunds (31 U.S.C. 3720A) and regulations implementing the offset of military pay under Title 37 U.S.C. 1007(c). The reference to waiver of collection authorized by Section 743 of the National Defense Authorization Act for Fiscal Year 1996 has been deleted. The legislation authorizing waiver has expired. Paragraph
(c)of this proposed rule has been updated to reflect that the Director, TRICARE Management Activity (TMA), or a designee, is responsible for ensuring that timely collection action is pursued. The Office of CHAMPUS (OCHAMPUS) has been disestablished. The functions of OCHAMPUS are now being performed by the TMA. The current regulation reflects that agency authority to compromise, suspend, or terminate collection action was limited to claims that did not exceed $20,000. The proposed rule increases this amount to $100,000 at Paragraph (g), the amount authorized by 31 U.S.C. 3711(a)(2). Paragraph
(e)of the proposed rule is updated to reflect that the authority to assert, settle, compromise or to suspend or terminate collection on claims arising under the Federal Claims Collection Act, has been delegated to the Director, TMA. Paragraph (f)(1) of the proposed rule adds a provision that recoupment procedures may be modified or adapted to conform to network agreements and that the recoupment provisions of the proposed rule apply if recoupment under the network agreements is not successful. Paragraph (f)(3) of the proposed rule clarifies a requirement that the TRICARE contractor must first attempt to recover an erroneous payment from another health insurance plan through the contractor's coordination of benefits procedures. If the overpayment cannot be recovered from the other plan, or if the other plan has made payment, the erroneous payment will be recovered from the party that received the erroneous payment from TRICARE. Paragraph (f)(6)(iii) of the proposed rule provides that a minimum of one demand letter is required and states that the specific content, timing and number of demand letters may be tailored to the type and amount of debt and the debtor's response, if any. Paragraph (6)(ii) of the current regulation states that normally a total of three progressively stronger written demands for payment be made to a debtor at approximately 30-day intervals and that the demands for payment will be made by CHAMPUS fiscal intermediary and OCHAMPUS. The proposed rule updates this language to reflect that normally the TRICARE contractor will initiate initial collection action to effect recoupment. Paragraph (f)(6)(iv) of the proposed rule adds language providing that the initial or subsequent demand letter(s) may notify debtors of the mandatory requirement to report delinquent debts to credit reporting agencies and to refer delinquent debts to collection agencies, the Treasury Offset Program
(TOP)for collection by administrative offset from Federal tax refunds and other amounts payable by the Government, offset from state payments as well as the requirement that delinquent debts be transferred to Treasury for collection. It also provides that letters may include TMA policies for referring delinquent debts to the Department of Justice. Paragraph (f)(6)(v) of the proposed rule deletes language found at Paragraph (f)(6)(iii) of the current regulation which stated that offset under the provisions of 31 U.S.C. 3716 was not to be used with respect to debts owed by any state or local government. The collection of debts owed by state and local governments through administrative offset is no longer prohibited. Paragraph (f)(6)(v)(A) of the proposed rule is added to implement a requirement of the DCIA that eligible non-tax debts delinquent over 180 days be referred to Treasury for centralized administrative offset, unless otherwise exempted from referral. Debts that were formerly referred directly to the Internal Revenue Service for Tax Refund Offset will be referred for centralized administrative offset. It also provides that salary offsets under 5 U.S.C. 5514 that were formerly effected through referral to an employee's paying agency, pursuant to Paragraph (f)(6)(vi) of 32 CFR § 199.11 will be effected through referral for centralized administrative offset. Paragraph (f)(6)(vi) of the proposed rule adds this section to implement a mandatory requirement of the DCIA that eligible non-tax debts delinquent over 180 days be transferred to Treasury or a Treasury-Designated Collection Center for collection through cross-servicing, unless otherwise exempted from referral. Paragraph (f)(6)(ix) of the proposed rule increases the minimum amount of installment payment that may be accepted to $75.00 per month unless the debtor demonstrates financial hardship. Paragraph (f)(6)(iv) of the current regulation provides that the minimum amount is $50.00. Paragraph (f)(6)(xi) of the proposed rule adds language that requires TMA to use government-wide collection contracts to obtain debt collection services through private contractors as provided in 31 CFR 901.5(b). The current regulation provides for TMA to contract for such services. Paragraph (f)(6)(xii) of the proposed rule adds language which provides that Treasury will report debts transferred to it for collection to credit reporting agencies on behalf of TMA. Paragraph (g)(1) of the proposed rule updates language to authorize the Director, TMA to compromise, suspend or terminate collection action of debts that do not exceed $100,000 (exclusive of interest, penalties and administrative costs) or less, or such other amount as the Attorney General shall authorize, as provided in 31 CFR 902.1(a). Paragraph
(b)of the current regulation limits this authority to $20,000. Paragraph (g)(3) of the current regulation has been deleted, because the legislation authorizing the waiver has expired. Paragraph
(h)of the proposed rule increases the threshold for referral of cases to the Department of Justice from $600 to $2,500 or such other amount as the Attorney General shall prescribe, as provided in 31 CFR 904.4(a). The effect of the proposed rule would avoid the expense of court proceedings for both the government and the debtor, as well as reduce administrative handling, provide greater flexibility to recovery efforts, and promote timely settlements of outstanding federal claims. This amendment is being published for proposed rulemaking at the same time as it is being coordinated within the Department of Defense, with the Department of Health and Human Services, and with other interested agencies, in order that consideration of both internal and external comments and publication of the final rulemaking document can be expedited. Regulatory Procedures Executive Order 12866, “Regulatory Planning and Review” Executive Order 12886 requires that a comprehensive regulatory impact analysis be performed on any economically significant regulatory action, defined as one that would result in an annual effect of $100 million or more on the national economy or which would have other substantial impacts. Pub. L. 96-354, “Regulatory Flexibility Act” (5 U.S.C. 601) The Regulatory Flexibility Act
(RFA)requires that each Federal Agency prepare and make available for public comment, a regulatory flexibility analysis when the agency issues a Regulation, which would have a significant impact on a substantial number of small entities. This rule is not an economically significant regulatory action and will not have a significant impact on a substantial number of small entities for purposes of the RFA, thus this proposed rule is not subject to any of these requirements. This proposed rule, although not economically significant under E.O. 12866, it has been designated as significant and has been reviewed by the Office of Management and Budget as required under the provisions of E.O. 12866. The changes set forth in the proposed rule are required by the Debt Collection Improvement Act of 1996 (Public Law 104-134, 110 Stat. 1321,1358
(1996)(DCIA)), as implemented by the Federal Claims Collection Standards, joint regulations issued by the Department of the Treasury and the Department of Justice, 31 CFR parts 900-904. Pub. L. 96-511, “Paperwork Reduction Act of 1995” (44 U.S.C. 3501, *et seq.* ) It has been certified that this rule does not impose new information collection requirements for purposes of the Paperwork Reduction Act of 1995. Executive Order 13132, Federalism We have examined the impact of the proposed rule under E.O. 13132 and it does not have policies that have federalism implications that would 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 various levels of government. Therefore, consultation with State and local officials is not required. This is a proposed rule. Public comments are invited. List of Subjects in 32 CFR Part 199 Claims, Dental health, Health care, Health insurance, Individuals with disabilities, and Military personnel. Accordingly, 32 CFR part 199 is proposed to be amended as follows: PART 199— [AMENDED] 1. The authority citation for part 199 continues to read as follows: Authority: 5 U.S.C. 301; 10 U.S.C. chapter 55. 2. Section 199.11 is proposed to be revised to read as follows: § 199.11 Overpayments recovery.
(a)*General.* Actions to recover overpayments arise when the government has a right to recover money, funds or property from any person, partnership, association, corporation, governmental body or other legal entity, foreign or domestic, except another Federal agency, because of an erroneous payment of benefits under both CHAMPUS and the TRICARE program under § 199.17 of this part. The term “Civilian Health and Medical Program of the Uniformed Services” (CHAMPUS) is defined in 10 U.S.C. 1072(4), and referred to under § 199.17 as the basic CHAMPUS program, otherwise known as TRICARE Standard. The term “TRICARE program” is defined in 10 U.S.C. 1072(7) and is referred to under § 199.17 as the triple-option benefit of TRICARE Prime, TRICARE Extra, and TRICARE Standard. It is the purpose of this section to prescribe procedures for investigation, determination, assertion, collection, compromise, waiver and termination of claims in favor of the United States for erroneous benefit payments arising out of the administration of CHAMPUS and the TRICARE program. For the purpose of this section, references herein to TRICARE beneficiaries, claims, benefits, payments, or appeals shall include CHAMPUS beneficiaries, claims, benefits, payments, or appeals. A claim against several joint debtors arising from a single incident or transaction is considered one claim. The Director, TRICARE Management Activity (TMA), or a designee, may pursue collection against all joint debtors and is not required to allocate the burden of payment between debtors.
(b)*Authority—(1) Federal statutory authority.* The Federal Claims Collection Act, 31 U.S.C. 3701, *et seq.* , as amended by the Debt Collection Act of 1982 and the Debt Collection Improvement Act of 1996 (DCIA), provides the basic authority under which claims may be asserted pursuant to this section. The DCIA is implemented by the Federal Claims Collection Standards, joint regulations issued by the Department of the Treasury and the Department of Justice
(DOJ)(31 CFR parts 900-904), that prescribe government-wide standards for administrative collection, offset, compromise, suspension, or termination of agency collection action, disclosure of debt information to credit reporting agencies, referral of debts to private collection contractors for resolution, and referral to the Department of Justice for litigation to collect debts owed the Federal government. The regulations under this part are also issued under Treasury regulations implementing the DCIA (31 CFR part 285) and related statutes and regulations governing the offset of Federal salaries (5 U.S.C. 5514; 5 CFR 550, subpart K), administrative offset (31 U.S.C. 3716; 31 CFR subpart A); administrative offset of tax refunds (31 U.S.C. 3720A) and offset of military pay (37 U.S.C. 1007(c); Volume 7A, Chapter 50 and Volume 7B, Chapter 28 of the Department of Defense Financial Management Regulation, DOD 7000.14-R 1 (DoDFMR)) 1 Copies may be obtained at *http://www.dtic.mil/whs/directives/.*
(2)*Other authority.* Federal claims may arise under authorities other than the federal statutes, referenced above. These include, but are not limited to:
(i)State worker's compensation laws
(ii)State hospital lien laws
(iii)State no-fault automobile statutes
(iv)Contract rights under terms of insurance policies
(c)*Policy.* The Director, TMA, or a designee, shall aggressively collect all debts arising out of its activities. Claims arising out of any incident, which has or probably will generate a claim in favor of the government, will not be compromised, except as otherwise provided in this section, nor will any person not authorized to take final action on the government's claim, compromise or terminate collection action. Title 28 U.S.C. 2415-2416 establishes a statute of limitation applicable to the government where previously neither limitations nor latches were available as a defense. Claims falling within the provisions of this statute will be referred to the Department of Justice without attempting administrative collection action, if such action cannot be accomplished in sufficient time to preclude the running of the statue of limitations.
(d)*Appealability.* This section describes the procedures to be followed in the recovery and collection of federal claims in favor of the United States arising from the operation of TRICARE. Actions taken under this section are not initial determinations for the purpose of the appeal procedures of § 199.10 of this part. However, the proper exercise of the right to appeal benefit or provider status determinations under the procedures set forth in § 199.10 of this part may affect the processing of federal claims arising under this section. Those appeal procedures afford a TRICARE beneficiary or participating provider an opportunity for administrative appellate review in cases in which benefits have been denied and in which there is an appealable issue. For example, a TRICARE contractor may erroneously make payment for services, which are excluded as TRICARE benefits because they are determined to be not medically necessary. In that event, the contractor will initiate recoupment action, and at the same time, the contractor will offer an administrative appeal as provided in § 199.10 of this part on the medical necessity issue raised by the adverse benefit determination. The recoupment action and the administrative appeal are separate actions. However, in an appropriate case, the pendency of the appeal may provide a basis for the suspension of collection in the recoupment case. If an appeal were resolved entirely in favor of the appealing party, it would provide a basis for the termination of collection action in the recoupment case.
(e)*Delegation.* Subject to the limitations imposed by law or contained in this section, the authority to assert, settle, and compromise or to suspend or terminate collection action arising on claims under the Federal Claims Collection Act has been delegated to the Director, TMA, or a designee.
(f)*Recoupment of erroneous payments.*
(1)Erroneous payments are expenditures of government funds, which are not authorized by law or this part. Examples which are sometimes encountered in the administration of TRICARE include mathematical errors, payment for care provided to an ineligible person, payment for care which is not an authorized benefit, payment for duplicate claims, incorrect application of the deductible or co-payment or payment for services which were not medically necessary. Claims in favor of the government arising, as the result of the filing of false TRICARE claims or other fraud, fall under the cognizance of the Department of Justice. Consequently, procedures in this section apply to such claims only when specifically authorized or directed by the Department of Justice. (See 31 CFR 900.3.) Due to the nature of contractual agreements between network providers and TRICARE prime contractors, recoupment procedures may be modified or adapted to conform to network agreements. The provisions of § 199.11 shall apply if recoupment under the network agreements is not successful.
(2)*Scope* —(i) *General.* Paragraph
(f)of this section and the paragraphs following contain requirements and procedures for the assertion, collection or compromise of, and the suspension or termination of collection action on claims for erroneous payments against a sponsor, patient, beneficiary, provider, physician or other supplier of products or services under TRICARE.
(ii)*Debtor defined.* As used herein, “debtor” means a sponsor, beneficiary, provider, physician, other supplier of services or supplies, or any other person who for any reason has been erroneously paid under TRICARE. It includes an individual, partnership, corporation, professional corporation or association, estate, trust or any other legal entity.
(iii)*Delinquency defined.* A debt is “delinquent” if it has not been paid by the date specified in the initial written demand for payment (that is, the initial written notification) or other applicable contractual agreement, unless other satisfactory payment arrangements have been made by the date specified in the initial written demand for payment. A debt is considered delinquent if at any time after entering into a repayment agreement, the debtor fails to satisfy any obligations under that agreement.
(3)*Other health insurance claims.* Claims arising from erroneous TRICARE payments in situations where the beneficiary has entitlement to an insurance, medical service, health and medical plan, including any plan offered by a third party payer as defined in 10 U.S.C. 1095(h)(1) or other government program, except in the case of a plan administered under Title XIX of the Social Security Act (42 U.S.C. 1396, *et. seq.* ), through employment, by law, through membership in an organization, or as a student, or through the purchase of a private insurance or health plan, shall be recouped following the procedures in paragraph
(f)of this section. If the other plan has not made payment to the beneficiary or provider, the contractor shall first attempt to recover the overpayment from the other plan through the contractor's coordination of benefits procedures. If the overpayment cannot be recovered from the other plan, or if the other plan has made payment, the overpayment will be recovered from the party that received the erroneous payment from TRICARE.
(4)*Claim denials due to clarification or change.* In those instances where claim review results in the denial of benefits previously provided, but now denied due to a change, clarification or interpretation of the public law or this part, no recoupment action need be taken to recover funds expended prior to the effective date of such change, clarification or interpretation.
(5)*Good faith payment.*
(i)The Department of Defense, through the Defense Enrollment Eligibility Reporting System (DEERS), is responsible for establishing and maintaining a file listing of persons eligible to receive benefits under TRICARE. However, it is the responsibility of the Uniformed Services to provide eligible TRICARE beneficiaries with accurate and appropriate means of identification. When sources of civilian medical care exercise reasonable care and precaution identifying persons claiming to be eligible TRICARE beneficiaries, and furnish otherwise covered services and supplies to such persons in good faith, TRICARE benefits may be paid subject to prior approval by the Director, TMA, or a designee, notwithstanding the fact that the person receiving the services and supplies is subsequently determined to be ineligible for benefits. Good faith payments will not be authorized for services and supplies provided by a civilian source of medical care because of its own careless identification procedures.
(ii)When it is determined that a person was not a TRICARE beneficiary, the TRICARE contractor and the civilian source of medical care are expected to make all reasonable efforts to obtain payment or to recoup the amount of the good faith payment from the person who erroneously claimed to be the TRICARE beneficiary. Recoupment of good faith payments initiated by the TRICARE contractor will be processed pursuant to the provisions of paragraph
(f)of this section.
(6)*Recoupment procedures* —(i) *Initial action.* When an erroneous payment is discovered, the TRICARE contractor normally will be required to take the initial action to effect recoupment. Such actions will be in accordance with the provisions of this part and the TRICARE contracts and will include a demand (or demands) for refund or an offset against any other TRICARE payment(s) becoming due the debtor. When the efforts of the TRICARE contractor to effect recoupment are not successful within a reasonable time, recoupment cases will be referred to the Office of General Counsel, TMA, for further action in accordance with the provisions of paragraph
(f)of this section. All requests to debtors for refund or notices of intent to offset shall be in writing.
(ii)*Demand for payment.* Written demand(s) for payment shall inform the debtor of the following:
(A)The basis for and amount of the debt and the consequences of failing to cooperate to resolve the debt;
(B)The right to inspect and copy TRICARE records pertaining to the debt;
(C)The opportunity to request an administrative review by the TRICARE contractor; and that such a request must be received by the TRICARE contractor within 90 days from the date of the initial demand letter;
(D)That payment of the debt is due within 30 days from the date of the initial demand notification;
(E)That interest will be assessed on the debt at the Treasury Current Value of Funds rate, pursuant to 31 U.S.C. 3717, and will begin to accrue on the date of the initial demand letter; and that interest will be waived on the debt, or any portion thereof, which is paid within 30 days from the date of the initial demand notification letter;
(F)That administrative costs and penalties will be charged pursuant to 31 CFR 901.9;
(G)That collection by offset against current or subsequent claims or other amounts payable from the government may be taken;
(H)The opportunity to enter into a written agreement to repay the debt;
(I)The name, address, and phone number of a contact person or office that the debtor may contact regarding the debt.
(iii)A minimum of one demand letter is required. However, the specific content, timing and number of demand letters may be tailored to the type and amount of the debt, and the debtor's response, if any. Contractors' demand letters must be mailed or hand-delivered on the same date they are dated.
(iv)The initial or subsequent demand letters may also inform the debtor of the requirement to report delinquent debts to credit reporting agencies and to collection agencies, the requirement to refer debts to the Treasury Offset Program for offset from Federal income tax refunds and other amounts payable by the Government, offset from state payments, the requirement to refer debts to the Department of Treasury for collection and TRICARE policies concerning the referral of delinquent debts to the Department of Justice for enforced collection action. The initial or subsequent demand letter may also inform the debtor of TRICARE policies concerning waiver. When necessary to protect the Government's interest (for example to prevent the running of a statute of limitations), written demand may be preceded by other appropriate actions under this regulation, including referral to the Department of Justice for litigation. There should be no undue delay in responding to any communication received from the debtor. Responses to communications from debtors should be made within 30 days of receipt whenever feasible. If prior to the initiation of the demand process or at any time during or after completion of the demand process, the Director, TMA, or a designee, determines to pursue or is required to pursue offset, the procedures applicable to administrative offset, found at paragraph (f)(6)(v) of this section must be followed. If it appears that initial collection efforts are not productive or if immediate legal action on the claim appears necessary, the claim shall be referred promptly by the contractor to the Office of General Counsel, TMA.
(v)*Collection by administrative offset.* Collections by offset will be undertaken administratively in every instance when feasible. Collections may be taken by administrative offset under 31 U.S.C. 3716, the common law or other applicable statutory authority. No collection by offset may be undertaken unless the debtor has been sent a written demand for payment, including the procedural safeguards described in paragraph (f)(6)(ii) of this section, unless the failure to take the offset would substantially prejudice the Government's ability to collect the debt, and the time before payment is to be made does not reasonably permit the time for sending written notice. Such prior offset must be promptly followed by sending a written notice and affording the debtor the opportunity for a review by the TRICARE contractor. Examples of erroneous payments include, but are not limited to, claims submitted by individuals ineligible for TRICARE benefits, claims submitted for non-covered services or supplies, claims for which payments by another insurance or health plan reduces TRICARE liability and from claims made from participating providers in which payment was initially erroneously made to the beneficiary. The resolution of recoupment claims rarely involves issues of credibility or veracity and a review of the written record is ordinarily an adequate means to correct prior mistakes. For this reason, the pre-offset oral hearing requirements of the Federal Claims Collection Standards, 31 CFR 901.3(e) do not apply to the recoupment of erroneous TRICARE payments. However, in instances where an oral hearing is not required, the debtor will be afforded an administrative review if the TRICARE contractor receives a written request for an administrative review within 90 days from the date of the initial demand letter. The appeals procedures described in § 199.10 of this part, affords a TRICARE beneficiary or participating provider an opportunity for an administrative appellate review, including under certain circumstances, the right to an oral hearing before a hearing officer when an appealable issue exists. TRICARE contractors may take administrative action to offset erroneous payments against other current TRICARE payments owing a debtor. Payments on the claims of a debtor pending at or filed subsequent to the time collection action is initiated should be suspended pending the outcome of the collection action so that these funds will be available for offset. All or part of a debt may be offset depending on the amount available for offset. Any requests for offset received from other agencies and garnishment orders issued by courts of competent jurisdiction will be forwarded to the Office of General Counsel, TMA. Unless otherwise provided by law, administrative offset of payments under the authority of 31 U.S.C. 3716 may not be conducted more than 10 years after the Government's right to collect the debt first accrued, unless facts material to the Government's right to collect the debt were not known and could not reasonably have been known by the TRICARE official or officials charged with the responsibility to discover and collect such debts. This limitation does not apply to debts reduced to judgment. This section does not apply to debts arising under the Social Security Act, except as provided in 42 U.S.C. 404, payments made under the Social Security Act, except as provided for in 31 U.S.C. 3716(c), debts arising under, or payments made under, the Internal Revenue Code, except for offset of tax refunds or tariff laws of the United States; offsets against Federal salaries to the extent these standards are inconsistent with regulations published to implement such offsets under 5 U.S.C. 5514 and 31 U.S.C. 3716; offsets under 31 U.S.C. 3728 against a judgment obtained by a debtor against the United States; offset or recoupment under common law, state law, or federal statutes specifically prohibiting offset or recoupment of particular types of debts or offsets in the course of judicial proceedings, including bankruptcy.
(A)*Referral for centralized administrative offset.* When cost-effective, legally enforceable non-tax debts delinquent over 180 days delinquent that are eligible for collection through administrative offset shall be referred to the Department of the Treasury for administrative offset, unless otherwise exempted from referral. Referrals shall include certification that the debt is past due and legally enforceable and that TMA has complied with all due process requirements of the statute-authorizing offset. Administrative offset, including administrative offset against tax refunds due debtors under 26 U.S.C. 6402, in accordance with 31 U.S.C. 3720A, shall be effected through referral for centralized administrative offset, after debtors have been afforded at least sixty
(60)days notice required in paragraph (f)(6) of this section. Salary offsets shall be effected through referral for centralized administrative offset, after debtors have been afforded due process required by 5 U.S.C. 5514, in accordance with 31 CFR 285.7. Referrals for salary offset shall include certification that the debts are past due, legally enforceable debts and that TMA has complied with all due process requirements under 5 U.S.C. 5514 and applicable agency regulations. The Treasury, Financial Management Service
(FMS)may waive the salary offset certification requirement set forth in 31 CFR 285.7, as a prerequisite to submitting the debt to FMS for offset from other payment types. If FMS waives the certification requirement, before an offset occurs, TMA will provide the employee with the notice and opportunity for a hearing as required by 5 U.S.C. 5514 and applicable regulations, and will certify to FMS that the requirements of 5 U.S.C. 5514 and applicable agency regulations have been met. TMA is not required to duplicate notice and administrative review or salary offset hearing opportunities before referring debts for centralized administrative offset when the debtor has been previously given them.
(B)*Referral for non-centralized administrative offset.* Unless otherwise prohibited by law, when centralized administrative offset is not available or appropriate, past due legally enforceable non-tax delinquent debts that are eligible for referral may be collected through non-centralized administrative offset through a request directly to the payment-authorizing agency. Referrals shall include certification that the debts are past due and that the agency has complied with due process requirements under 31 U.S.C. 3716(a) or other applicable authority and applicable agency regulations concerning administrative offset. Generally, non-centralized administrative offsets will be made on an *ad hoc* case-by-case basis, in cooperation with the agency certifying or authorizing payments to the debtor.
(vi)*Collection by transfer of debts to Treasury or a Treasury-designated debt collection center for collection through cross-servicing.*
(A)The Director, TMA or a designee, is required to transfer legally enforceable non-tax debts that are delinquent 180 days or more to the Department of the Treasury for collection through cross-servicing (31 U.S.C. 3711(g); 31 CFR 285.12.) Debts referred or transferred to Treasury or Treasury-designated debt collection centers shall be serviced, collected, or compromised, or the collection action will be suspended or terminated, in accordance with the statutory requirements and authorities applicable to the collection of such debts. Agencies operating Treasury-designated debt collection centers are authorized to charge a fee for services rendered regarding referred or transferred debts. This fee may be paid out of amounts collected and may be added to the debt as an administrative cost. Referrals will include certification that the debts transferred are valid, legally enforceable debts, that there are no legal bars to collection and that the agency has complied with all prerequisites to a particular collection action under the applicable laws, regulations or policies, unless the agency and Treasury agree that Treasury will do so on behalf of the agency.
(B)The requirement of paragraph
(1)of this section does not apply to any debt that: ( *1* ) Is in litigation or foreclosure. ( *2* ) Will be disposed of under an approved asset sale program. ( *3* ) Has been referred to a private collection contractor for a period of time acceptable to Treasury. ( *4* ) Will be collected under internal offset procedures within 3 years after the debt first became delinquent. ( *5* ) Is exempt from this requirement based on a determination by the Secretary of the Treasury that exemption for a certain class of debt is in the best interest of the United States.
(vii)*Collection by salary offset.* When a debtor is a member of the military service or a retired member and collection by offset against other TRICARE payments due the debtor cannot be accomplished, and there have been no positive responses to a demand for payment, the Director, TMA, or a designee, may refer the debt for offset from the debtor's pay account pursuant to 37 U.S.C. 1007(c), as implemented by Volume 7A, Chapter 50 and Volume 7B, Chapter 28 of the DoDFMR. Collection from a Federal employee may be effected through salary offset under 5 U.S.C. 5514.
(A)For collections by salary offset the Director, TMA, or designee, will issue written notification, as required by 5 CFR 550.1104(d) at least 30 days before any offsets are taken. In addition, the notification will advise the employee that if he or she retires, resigns or his or her employment ends before collection of the debt is completed, collection may be made from subsequent payments of any nature due from the United States (e.g., final salary payment, lump-sum leave under 31 U.S.C. 3716 due the employee as of date of separation.) A debtor's involuntary payment of all or part of a debt being collected will not be construed as a waiver of any rights the debtor may have under 5 U.S.C. 5514 or any other provision of contract or law, unless there are statutory or contractual provisions to the contrary or the employee's paying agency is directed by an administrative or judicial order to refund amounts deducted from his or her current pay. No interest will be paid on amounts waived or determined not to be owed unless there are statutory or contractual provisions to the contrary.
(B)*Petition for hearing.* The notice of the proposed offset will advise the debtor of his or her right to petition for a hearing. The petition for hearing must be signed by the debtor or his or her representative and must state whether he or she is contesting debt validity, debt amount and/or the terms of the proposed offset schedule. It must explain with reasonable specificity all the facts, evidence and witnesses, if any (in the case of an oral hearing and a summary of their anticipated testimony), which the debtor believes support his or her position, and include any supporting documentation. If contesting the terms of the proposed offset schedule, the debtor must provide financial information including a completed Department of Justice Financial Statement of Debtor form (OBD-500 or other form prescribed by DOJ), including specific details concerning income and expenses of the employee, his or her spouse and dependents for 1-year period preceding the debt notification and projected income and expenses for the proposed offset period and a statement of the reason why the debtor believes the salary offset schedule will impose extreme financial hardship. Upon receipt of the petition for hearing, the Director, TMA, or a designee, will complete reconsideration. If the Director, TMA, or a designee determines that the debt amount is not owed, that a less amount is owed, or that the terms of the employee's proposed offset schedule are acceptable, it will advise the debtor and request that the employee accept the results of the reconsideration in lieu of a hearing. If the employee declines to accept the results of reconsideration in lieu of a hearing, the debtor will be afforded a hearing. Ordinarily, a petition for hearing and required submissions that are not timely filed, shall be accepted after expiration of the deadline provided in the notice of the proposed offset, only when the debtor can demonstrate to the Director, TMA, or a designee, that the timely filing of the request was not feasible due to extraordinary circumstances over which the appealing party had no practical control or because of failure to receive notice of the time limit (unless he or she was otherwise aware of it). Each request for an exception to the timely filing requirement will be considered on its own merits. The decision of the Director, TMA, or a designee, on a request for an exception to the timely filing requirement shall be final.
(C)*Extreme financial hardship.* The maximum authorized amount that may be collected through involuntary salary offset is the lesser of 15 percent of the employee's disposable pay or the full amount of the debt. An employee who has petitioned for a hearing may assert that the maximum allowable rate of involuntary offset produces extreme financial hardship. An offset produces an extreme financial hardship if the offset prevents the employee from meeting the costs necessarily incurred for the essential expenses of the employee, employee's spouse and dependents. These essential expenses include costs incurred for food, housing, necessary public utilities, clothing, transportation and medical care. In determining whether the offset would prevent the employee from meeting the essential expenses identified above, the following shall be considered: ( *1* ) Income from all sources of the employee, the employee's spouse, and dependents; ( *2* ) The extent to which assets of the employee, employee's spouse and dependents are available to meet the offset and essential subsistence expenses; ( *3* ) Whether these essential subsistence expenses have been minimized to the greatest extent possible; ( *4* ) The extent to which the employee or the employee's spouse can borrow money to meet the offset and other essential expenses; and ( *5* ) The extent to which the employee and the employee's spouse and dependents have other exceptional expenses that should be taken into account and whether these expenses have been minimized.
(D)*Form and content of hearings.* The resolution of recoupment claims rarely involves issues of credibility or veracity and a review of the written record is ordinarily an adequate means to determine the validity or amount of the debt and/or the terms of a proposed offset schedule. The Director, TMA, or a designee, will determine whether an oral hearing is required. A debtor who has petitioned for a hearing, but who is not entitled to an oral hearing will be given an administrative hearing, based on the written documentation submitted by the debtor and the Director, TMA, or a designee. If the Director, TMA, or a designee, determines that the debtor should be afforded the opportunity for an oral hearing, the debtor may elect to have a hearing based on the written record in lieu of an oral hearing. The Director, TMA, or a designee, will provide the debtor (or his representative) notification of the time, date and location of the oral hearing to be held if the debtor has been afforded an oral hearing. Copies of records documenting the debt will be provided to the debtor or his representative (if they have not been previously provided), at least 3 calendar days prior to the date of the oral hearing. At oral hearings, the only evidence permitted, except oral testimony, will be that which was previously submitted as pre-hearing submissions. At oral hearings, the debtor may not raise any issues not previously raised with TMA. In the absence of good cause shown, a debtor who fails to appear at an oral hearing will be deemed to have waived the right to a hearing and salary offset may be initiated.
(E)*Costs for attendance at oral hearings.* Debtors and their witnesses will bear their own costs for attendance at oral hearings.
(F)*Hearing official's decision.* The Hearing Official's decision will be in writing and will identify the documentation reviewed. It will indicate the amount of debt that he or she determined is valid and shall state the amount of the offset and the estimated duration of the offset. The determination of a hearing official designated under this section is considered an official certification regarding the existence and amount of the debt and/or the terms of the proposed offset schedule for the purposes of executing salary offset under 5 U.S.C. 5514. The Hearing Official's decision must be issued at the earliest practical date, but not later than 60 days from the date the petition for hearing is received by the Office of General Counsel, TMA, unless the debtor requests, and the Hearing Official grants a delay in the proceedings. If a hearing official determines that the debt may not be collected by salary offset, but the Director, TMA, or a designee, finds the debt is still valid, the Director, TMA or a designee, may seek collection through other means, including but not limited to, offset from other payments due from the United States.
(viii)RESERVED
(ix)*Collection of installments.* Debts, including interest, penalty and administrative costs shall be collected in one lump sum whenever possible. However, when the debtor is financially unable to pay the debt in one lump sum, the TRICARE contractor or the Director, TMA, or designee, may accept payment in installments. Debtors claiming that lump sum payment will create financial hardship may be required to complete a Department of Justice Financial Statement of Debtor form or provide other financial information that will permit TMA to verify such representations. TMA may also obtain credit reports to assess installment requests. Normally, debtors will make installment payments on a monthly basis. Installment payment shall bear a reasonable relationship to the size of the debt and the debtor's ability to pay. Except when a debtor can demonstrate financial hardship or another reasonable cause exists, installment payments should be sufficient in size and frequency to liquidate the debt in 3 years or less. (31 CFR 901.8(b)). Normally, installment payments of $75 or less will not be accepted unless the debtor demonstrates financial hardship. Any installment agreement with a debtor in which the total amount of deferred installments will exceed $750, should normally include an executed promissory agreement. Copies of installment agreements will be retained in the contractor's or TMA, Office of General Counsel's files.
(x)*Interest, penalties, and administrative costs.* Title 31 U.S.C. 3717 and the Federal Claims Collection Standards, 31 CFR 901.9, require the assessment of interest, penalty and administrative costs on delinquent debts. Interest shall accrue from the date the initial debt notification is mailed to the debtor. The rate of interest assessed shall be the rate of the current value of funds to the United States Treasury (the Treasury tax and loan account rate). The collection of interest on the debt or any portion of the debt, which is paid within 30 days after the date on which interest begins to accrue, shall be waived. The Director, TMA, or designee, may extend this 30-day period on a case-by-case basis, if it reasonably determines that such action is appropriate. The rate of interest as initially assessed shall remain fixed for the duration of the indebtedness; except that where the debtor has defaulted on a repayment agreement and seeks to enter into a new agreement, a new interest rate may be set which reflects the current value of funds to the Treasury at the time the new agreement is executed. Interest shall not be compounded; that is, interest shall not be charged on interest, penalties, or administrative costs required by this section. However, if a debtor defaults on a previous repayment agreement, charges that accrued but were not collected under the defaulted agreement, shall be added to the principal under the new repayment agreement. The collection of interest, penalties and administrative costs may be waived in whole or in part as a part of the compromise of a debt as provided in paragraph
(g)of this section. In addition, the Director, TMA, or designee may waive in whole or in part, the collection of interest, penalties, or administrative costs assessed herein if he or she determines that collection would be against equity and good conscience and not in the best interest of the United States. Some situations in which a waiver may be appropriate include:
(A)Waiver of interest consistent with 31 CFR 903.2(c)(2) in connection with a suspension of collection when a TRICARE appeal is pending under § 199.10 of this part where there is a substantial issue of fact in dispute.
(B)Waiver of interest where the original debt arose through no fault or lack of good faith on the part of the debtor and the collection of interest would impose a financial hardship or burden on the debtor. Some examples in which such a waiver would be appropriate include: a debt arising when a TRICARE beneficiary in good faith files and is paid for a claim for medical services or supplies, which are later determined not to be covered benefits, or a debt arising when a TRICARE beneficiary is overpaid as the result of a calculation error on the part of the TRICARE contractor or TMA.
(C)Waiver of interest where there has been an agreement to repay a debt in installments, there is no indication of fault or lack of good faith on the part of the debtor, and the amount of interest is so large in relation to the size of the installments that the debtor can reasonably afford to pay, that it is likely the debt will never be repaid in full. When a debt is paid in installments, the installment payments first will be applied to the payment of outstanding penalty and administrative cost charges, second, to accrued interest and then to principal. Administrative costs incurred as the result of a debt becoming delinquent (as defined in paragraph (f)(2)(iii) of this section) shall be assessed against a debtor. These administrative costs represent the additional costs incurred in processing and handling the debt because it became delinquent. The calculation of administrative costs should be based upon cost analysis establishing an average of actual additional costs incurred in processing and handling claims against other debtors in similar stages of delinquency. A penalty charge, not exceeding six percent a year, shall be assessed on the amount due on a debt that is delinquent for more than 90 days. This charge, which need not be calculated until the 91st day of delinquency, shall accrue from the date that the debt became delinquent.
(xi)*Referral to private collection agencies.* TMA shall use government-wide debt collection contracts to obtain debt collection services provided by private contractors in accordance with 31 CFR 901.5(b).
(xii)*Reporting delinquent debts to credit reporting agencies.* Delinquent consumer debts shall be reported to credit reporting agencies. Delinquent debts are debts which are not paid or for which satisfactory payment arrangements are not made by the due date specified in the initial debt notification letter, or those for which the debtor has entered into a written payment agreement and installment payments are past due 30 days or longer. Such referrals shall comply with the Bankruptcy Code and the Privacy Act of 1974, 5 U.S.C. 552a, as amended. The provisions of the Privacy Act do not apply to credit bureaus (31 CFR 901.4(1)). There is no requirement to duplicate the notice and review opportunities before referring debts to credit bureaus. Debtors will be advised of the specific information to be transmitted (i.e., name, address, and taxpayer identification number, information about the debt). Procedures developed for such referrals must ensure that an accounting of the disclosures shall be kept which is available to the debtor; that the credit reporting agencies are provided with corrections and annotations of disagreements of the debtor; and that reasonable efforts are made to ensure that the information to be reported is accurate, complete, timely and relevant. When requested by a credit-reporting agency, verification of the information disclosed will be provided promptly. Once a claim has been reviewed and determined to be valid, a complete explanation of the claim will be given the debtor. When the claim is overdue, the individual will be notified in writing that payment is overdue; that within not less than 60 days, disclosure of the claim shall be made to a consumer reporting agency unless satisfactory payment arrangements are made, or unless the debtor requests an administrative review and demonstrates some basis on which the debt is legitimately disputed; and of the specific information to be disclosed to the consumer reporting agency. The information to be disclosed to the credit reporting agency will be limited to information necessary to establish the identity of the debtor, including name, address and taxpayer identification number; the amount, status and history of the claim; and the agency or program under which the claim arose. Reasonable action will be taken to locate an individual for whom a current address is not available. The requirements of this section do not apply to commercial debts, although commercial debts shall be reported to commercial credit bureaus. The Department of the Treasury will report debts transferred to it for collection to credit reporting agencies on behalf of the Director, TMA, or a designee.
(xiii)*Use and disclosure of mailing addresses.* In attempting to locate a debtor in order to collect or compromise a debt under this section, the Director, TMA, or a designee, may send a written request to the Secretary of the Treasury, or a designee, for current address information from records of the Internal Revenue Service. TMA may disclose mailing addresses obtained under this authority to other agencies and to collection agencies for collection purposes.
(g)*Compromise, suspension or termination of collection actions arising under the Federal Claims Collection Act* —(1) *Basic considerations.* Federal claims against the debtor and in favor of the United States arising out of the administration of TRICARE may be compromised or collection action taken thereon may be suspended or terminated in compliance with the Federal Claims Collection Act, 31 U.S.C. 3711, as implemented by the Federal Claims Collection Standards, 31 CFR parts 900-904. The provisions concerning compromise, suspension or termination of collection activity pursuant to 31 U.S.C. 3711 apply to debts, which do not exceed $100,000 or any higher amount authorized by the Attorney General, exclusive of interest, penalties, and administrative costs, after deducting the amount of partial payments or collections, if any. If, after deducting the amount of any partial payments or collections, the principal amount of a debt exceeds $100,000, or any higher amount authorized by the Attorney General, exclusive of interest, penalties and administrative costs, the authority to suspend or terminate rests solely with the DOJ.
(2)*Authority.* TRICARE contractors are not authorized to compromise or to suspend or terminate collection action on TRICARE claims. Only the Director, TMA, or designee or Uniformed Services claims officers acting under the provisions of their own regulations are so authorized.
(3)*Basis for compromise.* A compromise should be for an amount that bears a reasonable relation to the amount that can be recovered by enforced collection procedures, with regard to the exemptions available to the debtor and the time collection will take. A claim may be compromised hereunder if the government cannot collect the full amount if:
(i)The debtor or the estate of a debtor does not have the present or prospective ability to pay the full amount within a reasonable time;
(ii)The cost of collecting the claim does not justify enforced collection of the full amount; or
(iii)The government is unable to enforce collection of the full amount within a reasonable time by enforced collection proceedings; or
(iv)There is significant doubt concerning the Government's ability to prove its case in court for the full amount claimed; or
(v)The cost of collecting the claim does not justify enforced collection of the full amount.
(4)*Basis for suspension.* Collection action may be suspended for the following reasons if future collection action may be sufficiently productive to justify periodic review and action on the claim, considering its size and the amount, which may be realized thereon:
(i)The debtor cannot be located; or
(ii)The debtor's financial condition is expected to improve; or
(iii)The debtor is unable to make payments on the government's claim or effect a compromise at the time, but the debtor's future prospects justify retention of the claim for periodic review and action and;
(A)The applicable statute of limitations has been tolled or started running anew; or
(B)Future collections can be effected by administrative offset, notwithstanding the expiration of the applicable statute of limitations for litigation of claims with due regard to the 10-year limitation for administrative offset under 31 U.S.C. 3716(e)(1); or
(C)The debtor agrees to pay interest on the amount of the debt on which collection action will be temporarily suspended and such temporary suspension is likely to enhance the debtor's ability fully to pay the principal amount of the debt with interest at a later date.
(iv)Consideration may be given by the Director, TMA, or designee to suspend collection action pending action on a request for a review of the government's claim against the debtor or pending an administrative review under § 199.10 of this part of any TRICARE claim or claims directly involved in the government's claim against the debtor. Suspension under this paragraph will be made on a case-by-case basis as to whether:
(A)There is a reasonable possibility that the debt (in whole or in part) will be found not owing from the debtor;
(B)The Government's interest would be protected if suspension were granted by reasonable assurance that the debt would be recovered if the debtor does not prevail; and
(C)Collection of the debt will cause undue hardship.
(5)Collection action may be terminated for one or more of the following reasons:
(i)TMA cannot collect or enforce collection of any substantial amount through its own efforts or the efforts of others, including consideration of the judicial remedies available to the government, the debtor's future financial prospects, and the exemptions available to the debtor under state and federal law;
(ii)The debtor cannot be located, and either;
(iii)The costs of collection are anticipated to exceed the amount recoverable; or
(iv)It is determined that the debt is legally without merit or enforcement of the debt is barred by any applicable statute of limitations; or
(v)The debt cannot be substantiated; or
(vi)The debt against the debtor has been discharged in bankruptcy. Collection activity may be continued subject to the provisions of the Bankruptcy Code, such as collection of any payments provided under a plan of reorganization or in cases when TMA did not receive notice of the bankruptcy proceedings.
(6)In determining whether the debt should be compromised, suspended or terminated, the responsible TMA collection authority will consider the following factors:
(i)Age and health of the debtor; present and potential income; inheritance prospects; the possibility that assets have been concealed or improperly transferred by the debtor; and the availability of assets or income which may be realized upon by enforced collection proceedings;
(ii)Applicability of exemptions available to a debtor under state or federal law;
(iii)Uncertainty as to the price which collateral or other property may bring at a forced sale;
(iv)The probability of proving the claim in court because of legal issues involved or because of a bona fide dispute of the facts; the probability of full or partial recovery; the availability of necessary evidence and related pragmatic considerations. Debtors may be required to provide a completed Department of Justice Financial Statement of Debtor form (OBD-500 or such other form that DOJ shall prescribe) or other financial information that will permit TMA to verify debtors' representations. TMA may obtain credit reports or other financial information to enable it independently to verify debtors' representations.
(7)*Payment of compromised claims* —(i) *Time and manner.* Compromised claims are to be paid in one lump sum whenever possible. However, if installment payments of a compromised claim are necessary, a legally enforceable compromise agreement must be obtained. Payment of the amount that TMA has agreed to accept as a compromise in full settlement of a TRICARE claim must be made within the time and in the manner prescribed in the compromise agreement. Any such compromised amount is not settled until full payment of the compromised amount has been made within the time and manner prescribed. Compromise agreements must provide for the reinstatement of the prior indebtedness, less sums paid thereon, and acceleration of the balance due upon default in the payment of any installment.
(ii)*Failure to pay the compromised amount.* Failure of any debtor to make payment as provided in the compromise agreement will have the effect of reinstating the full amount of the original claim, less any amounts paid prior to default.
(iii)Effect of compromise, waiver, suspension or termination of collection action. Pursuant to the Internal Revenue Code, 26 U.S.C. 6050P, compromises and terminations of undisputed debts totaling $600 or more for the year will be reported to the Internal Revenue Service in the manner prescribed. Amounts, other than those discharged in bankruptcy, will be included in the debtor's gross income for that year. Any action taken under paragraph
(g)of this section regarding the compromise of a federal claim, or waiver or suspension or termination of collection action on a federal claim is not an initial determination for the purposes of the appeal procedures in § 199.10.
(h)*Referrals for collection* —(1) *Prompt referral.* Federal claims of $2,500, exclusive of interest, penalties and administrative costs, or such other amount as the Attorney General shall from time to time prescribe on which collection action has been taken under the provisions of this section which cannot be collected or compromised or on which collection action cannot be suspended or terminated as provided herein, will be promptly referred to the Department of Justice for litigation in accordance with 31 CFR part 904. Such referrals shall be made as early as possible consistent with aggressive collection action made by TRICARE contractors and TMA. Referral will be made with sufficient time to bring timely suit against the debtor. Referral shall be made by submission of a completed Claims Collection Litigation Report (CCLR), accompanied by a signed Certificate of Indebtedness. Claims of less than the minimum amount shall not be referred unless litigation to collect such smaller claims is important to ensure compliance with TRICARE's policies or programs; the claim is being referred solely for the purpose of securing a judgment against the debtor, which will be filed as a lien against the debtor's property pursuant to 28 U.S.C. 3201 and returned to the referring office for enforcement; or the debtor has the clear ability to pay the claim and the Government effectively can enforce payment, with due regard for the exemptions available to the debtor under state and Federal law and judicial remedies available to the Government.
(2)*Preservation of evidence.* The Director, TMA, or a designee will take such action as is necessary to ensure that all files, records and exhibits on claims referred, hereunder, are properly preserved.
(i)*Claims involving indication of fraud, filing of false claims or misrepresentation.* Any case in which there is an indication of fraud, the filing of a false claim or misrepresentation on the part of the debtor or any party having an interest in the claim, shall be promptly referred to the Director, TMA, or designee. The Director, TMA, or a designee, will investigate and evaluate the case and either refers the case to an appropriate investigative law enforcement agency or return the claim for other appropriate administrative action, including collection action under this section. Payment on all TRICARE beneficiary or provider claims in which fraud, filing false claims or misrepresentation is suspected will be suspended until the Director, TMA, or designee, authorizes payment or denial of the claims. Collection action on all claims in which a suspicion of fraud, misrepresentation or filing false claims arises, will be suspended pending referral to the appropriate law enforcement agencies by the Director, TMA, or a designee. Only the Department of Justice has authority to compromise, suspend or terminate collection of such debts. Dated: December 14, 2007. L.M. Bynum, Alternate OSD Federal Register Liaison Officer, Department of Defense. [FR Doc. E7-24707 Filed 12-19-07; 8:45 am] BILLING CODE 5001-06-P DEPARTMENT OF THE INTERIOR National Park Service 36 CFR Part 7 Establishment of Negotiated Rulemaking Advisory Committee for Off-Road Vehicle Management, Cape Hatteras National Seashore AGENCY: National Park Service (NPS), Interior. ACTION: Notice of establishment and Notice of the first and second meetings of the Negotiated Rulemaking Advisory Committee for Off-Road Vehicle Management at Cape Hatteras National Seashore. SUMMARY: The Negotiated Rulemaking Advisory Committee for Off-Road Vehicle Management at Cape Hatteras National Seashore (Seashore) is established under the authority of 16 U.S.C. 1a-2(c), and in accordance with the Negotiated Rulemaking Act, 5 U.S.C. 561-570. The establishment of this Committee is in the public interest and supports the NPS in performing its duties and responsibilities under the NPS Organic Act, 16 U.S.C. 1 *et seq.* ; Executive Order 11644, as amended by Executive Order 11989; 36 CFR 4.10; the Endangered Species Act, 16 U.S.C. 1531 *et seq.* ; the enabling legislation for the Seashore, 16 U.S.C. 459 *et seq.* ; and other legal authorities. An unusual combination of events in the preparation, approval, and transmission of this notice has resulted in the publication of this notice less than 15 days before the date of the first meeting and official date of establishment. The National Park Service has made extraordinary efforts to provide other forms of notification to all Committee members and to the public. DATES: The Committee will hold its first meeting on January 3-4, 2008, from 8:30 a.m. to 5:30 p.m. on January 3, and from 8:30 a.m. to 3:30 p.m. on January 4. The meetings on both days will be held at the Avon Fire Hall, 40159 Harbor Drive, Avon, North Carolina 27915. The Committee will hold its second meeting on February 26-27, 2008, from 8:30 a.m. to 5:30 p.m. on February 26, and from 8:30 a.m. to 3:30 p.m. on February 27. The meetings on both days will be held at the Ramada Inn, 1701 South Virginia Dare Trail, Kill Devil Hills, North Carolina 27948. FOR FURTHER INFORMATION CONTACT: Mike Murray, Superintendent, Outer Banks Group, 1401 National Park Drive, Manteo, North Carolina 27954,
(252)473-2111, ext. 148. SUPPLEMENTARY INFORMATION: The Committee's function is to assist directly in the development of special regulations for management of off-road vehicles
(ORVs)at Cape Hatteras National Seashore (Seashore). Executive Order 11644, as amended by Executive Order 11989, requires certain Federal agencies to publish regulations that provide for administrative designation of the specific areas and trails on which ORV use may be permitted. In response, the NPS published a general regulation at 36 CFR 4.10, which provides that each park that designates routes and areas for ORV use must do so by promulgating a special regulation specific to that park. It also provides that the designation of routes and areas shall comply with Executive Order 11644, and 36 CFR 1.5 regarding closures. Members of the Committee will negotiate to reach consensus on concepts and language to be used as the basis for a proposed special regulation, to be published by the NPS in the **Federal Register** , governing ORV use at the Seashore. The duties of the Committee are solely advisory. In accordance with the Negotiated Rulemaking Act, 5 U.S.C. 561-570, a Notice of Intent to Establish a Negotiated Rulemaking Advisory Committee was published in the **Federal Register** on June 28, 2007, providing a 30-day public comment period which concluded July 30, 2007. The NPS received 143 comment letters or comment entries in the NPS Planning, Environment, and Public Comment
(PEPC)on-line system during the comment period. Responses to Comments Suggesting Additions to the Committee The NPS received comments from a number of nonresident owners and renters of vacation homes asking that representatives of the Hatteras Landing Homeowners Association, Inc., and the Hatteras Island Homeowners Coalition be appointed as members of the Committee to represent their interests (nonresident property owners/renters and pedestrian and safety issues respectively) and to better balance the representation of interests on the Committee. One commenter noted that Hatteras Island is a premier surfing destination on the East Coast, and asked that NPS consider appointing a local resident from the Eastern Surfers Association or a representative from the Surfrider Foundation to represent interests of surfers. Response The NPS is aware that a balanced Committee is necessary for discussions to be meaningful and fair. The Negotiated Rulemaking Act states that a Federal agency considering negotiated rulemaking must determine that there are a limited number of identifiable interests that will be significantly affected by the rule, and that there is a reasonable likelihood that a committee can be convened with a balanced representation of persons who can adequately represent the interests identified. The Act also states that a Federal agency can use the services of a “convener” to make these determinations. The NPS, working through the U.S. Institute for Environmental Conflict Resolution, contracted with the Consensus Building Institute and Fisher Collaborative Services, which subsequently assisted in identifying interests that would be significantly affected by a proposed rule, and representatives of those interests. The Cape Hatteras National Seashore: Negotiated Rulemaking Feasibility Report (Feasibility Report) noted that there is no Outer Banks-wide organization that represents nonresident property owners and that there is no known, local or regional organized group whose primary interest is pedestrian beach use and public safety. The NPS agrees that nonresident homeowner and pedestrian-only areas interests are underrepresented in its initial proposal. Accordingly, NPS has recommended that the Hatteras Landing Homeowners Association be given a seat on the Committee with its president, Jeffrey Wells, appointed as a member to represent the interests of nonresident homeowners. The NPS has further recommended that the Hatteras Island Homeowners Coalition be given a seat on the Committee with its president, Stephen Kayota, appointed as a member to represent pedestrian and safety interests. The Surfrider Foundation and the Eastern Surfing Association promote conservation and protection of ocean and coastal environments from pollution. Because the conservation and environmental protection interest is represented by other groups with similar perspectives, NPS determined that the interests of surfers would be represented adequately by the other conservation/environmental groups and that the access and experience interests, which are also important to surfers, would be represented adequately by other groups in the user category such as the Cape Hatteras Recreational Alliance and the Watersports Industry Association. Comments Suggesting Restructuring the Committee Several comments stated that the Committee was not balanced, citing the overlapping group memberships of a number of the ORV and recreational fishing proponent members. One comment suggested that a smaller and more balanced Committee should be created. Some comments suggested removing proposed members perceived as argumentative, biased, and not willing to look for consensus. A Commenter also suggested that the two proposed representatives from the Watersports Industry Association be replaced by representatives from the Eastern Surfing Association or the Surfrider Foundation to represent interests of surfers. This comment questioned the appropriateness of appointing individuals with vested business interests in access to the beach for business purposes and stated that the Watersports Industry Association does not have a broad base of support for the sports enjoyed on Hatteras and Ocracoke. Response The NPS understands that a number of representatives have overlapping memberships in different groups. The Feasibility Report also noted this overlap while recognizing that, even though there are common interests, each member also represents a different perspective and interest that needs to be represented for the Committee to negotiate a proposed rule that will consider all interests. All interest groups significantly affected by the ORV regulation must be involved in any meaningful negotiation. Moreover, the final membership proposed must represent a balance of interests. The NPS believes that the final composition of the Committee will accomplish these purposes. The NPS has been advised by the Department of the Interior ethics office that appointment to a negotiated rulemaking committee of individuals with interests in access to the beach for business purposes is acceptable. Further, ethics rules relating to advisory committees will be discussed at an early meeting of the Committee to ensure that members understand them. Finally, NPS agrees that the Watersports Industry Association is concerned with a broader spectrum of activities than are enjoyed at Cape Hatteras National Seashore, but notes that those activities, such as surfing, enjoyed on Hatteras and Ocracoke are included within its interests. Comments on Committee Purpose and Process Comments were received on additional factors surrounding the establishment of the Committee. Broadly categorized, these comments addressed: the willingness of members to negotiate and reach consensus, and proposed procedures and guidelines for the Committee. Response Committee members are required to negotiate in good faith, including considering others' perspectives and approaching negotiations with an open mind. Every proposed Committee member has agreed to do this. Also, to police itself, the Committee will adopt ground rules to enhance its ability to negotiate and reach consensus. Finally, the NPS Designated Federal Official for the Committee has the authority to recommend to the Secretary that a member who is not negotiating in good faith be removed from the Committee. The procedures and guidelines for the Committee that one commenter proposed are similar to those recommended by the Feasibility Report with which the NPS has concurred. The NPS expects that the Committee will consider these procedures and guidelines when it adopts its ground rules. Additional Comments A number of comments were received that did not address the establishment, scope or membership of the negotiated rulemaking Committee, but did address the general issue of ORVs at Cape Hatteras National Seashore. Those comments fell into the following categories: Support or opposition for different levels of ORV access; options for specific elements of an ORV management plan; opinions on the meaning of the Seashore's enabling legislation; support for strict enforcement and penalties for violations of ORV regulations; concerns about visitor safety and beach driving; park values, including recreational surf-fishing, enjoyment of wildlife and nature, opportunity for family bonding, and enjoyment of the park's beaches; potential impacts of ORV management on socioeconomics, visitor use and experience, wildlife and wildlife habitat, and topographic conditions; the recent U.S. District Court Order; the Interim Protected Species Management Strategy/Environmental Assessment; and the proposed critical habitat designation. Response The NPS is preparing an ORV Management Plan and associated environmental impact statement that will evaluate a full range of reasonable alternatives for ORV management at Cape Hatteras National Seashore. The NPS will take these comments into consideration when preparing the plan. Committee Membership The Secretary of the Interior has appointed the following primary and alternate members to the Committee: *Civic and Homeowner Associations* : 1. Rodanthe-Waves-Salvo Civic Association, member C.A. Duke, alternate Pat Weston (Greater Kinnakeet Shores Homeowners, Inc., and Rodanthe-Waves-Salvo Civic Association). 2. Avon Property Owners Association, member Frank Folb, alternate Pat Weston (Greater Kinnakeet Shores Homeowners, Inc., and Rodanthe-Waves-Salvo Civic Association). 3. Hatteras Island Homeowners Coalition, member Steven Kayota, alternate Vincenzo Sanguineti (Hatteras Island Homeowners Coalition). 4. Hatteras Village Civic Association, member Roy Kingery. 5. Hatteras Landing Homeowners Association, Inc., member Jeffrey Wells. *Commercial Fishermen:* 6. North Carolina Fisheries Association, Michael Peele, alternate William Foster (North Carolina Fisheries Association). *Environmental and Natural Resource Conservation Groups, State/Regional/Local:* 7. Southern Environmental Law Center, member Derb Carter, alternate Michelle Nowlin (Southern Environmental Law Center). 8. North Carolina Audubon, member Walker Golder, alternate Sidney Maddock (National Audubon Society). *Environmental and Natural Resource Conservation Groups, National:* 9. Coalition of National Park Service Retirees, member Robert Milne, alternate Dwight Rettie (Coalition of National Park Service Retirees). 10. Defenders of Wildlife, member Jason Rylander, alternate Andrew Hawley (Defenders of Wildlife). 11. Natural Resources Defense Council and The Wilderness Society, member Destry Jarvis, alternate Leslie Jones (The Wilderness Society). 12. The Nature Conservancy, member Sam Pearsall, alternate Aaron McCall (The Nature Conservancy). *Government, County:* 13. Dare County, member Warren Judge, alternate Lee Wrenn (Dare County). 14. Hyde County, member David Scott Esham, alternate Eugene Ballance (Hyde County). *Government, Federal:* 15. Cape Hatteras National Seashore, member Michael Murray, alternate Thayer Broili (Cape Hatteras National Seashore). 16. U.S. Fish and Wildlife Service, member Pete Benjamin, alternate David Rabon (U.S. Fish and Wildlife Service). *Government, State:* 17. North Carolina Marine Fisheries Commission, member Wayne Mathis, alternate Sara Winslow (North Carolina Marine Fisheries Commission). 18. North Carolina Wildlife Resources Commission, member David Allen, alternate Susan Cameron (North Carolina Wildlife Resources Commission). *Tourism, Visitation, and Business organizations:* 19. Cape Hatteras Business Allies, member Judy Swartwood, alternate David Goodwin (Cape Hatteras Business Allies). 20. Outer Banks Chamber of Commerce, member Scott Leggat, alternate Sam Hagedon (Outer Banks Chamber of Commerce). 21. Outer Banks Visitors Bureau, member Carolyn McCormick, alternate Renee Cahoon (Outer Banks Chamber of Commerce). *User Groups, OVR Use:* 22. North Carolina Beach Buggy Association, member Jim Keene, alternate David Joyner (North Carolina Beach Buggy Association). 23. United Four Wheel Drive Associations, member Carla Boucher, alternate Lyle Piner (United Four Wheel Drive Associations). *User Groups, Open Access:* 24. Outer Banks Preservation Association, member John Alley, alternate John Couch (Outer Banks Preservation Association). *User Groups, Other Users:* 25. Cape Hatteras Bird Club, member Ricky Davis, alternate Raymond Moore (Cape Hatteras Bird Club). 26. Cape Hatteras Recreational Alliance, member Jim Lyons, alternate Burnham Gould, Jr. (Cape Hatteras Recreational Alliance). 27. Water Sports Industry Association, member Trip Forman, alternate Matt Nuzzo (Water Sports Industry Association). *User Groups, Recreational Fishing:* 28. American Sportfishing Association, member Bob Eakes, alternate Patricia Doerr (American Sportfishing Association). 29. Cape Hatteras Anglers Club, member Larry Hardham, alternate Robert Davis (Cape Hatteras Anglers Club). 30. Recreational Fishing Alliance, member Patrick Paquette, alternate Ronald Bounds (Recreational Fishing Alliance). In accordance with the Federal Advisory Committee Act, 5 U.S.C. Appendix 2, copies of the Committee's charter will be filed with the appropriate committees of Congress and with the Library of Congress. *Notice of First and Second Meeting:* Notice is hereby given, in accordance with the Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat.770, 5 U.S.C. App 1, section 10), of the first and second meeting of the Negotiated Rulemaking Advisory Committee for Off-Road Vehicle Management at Cape Hatteras National Seashore. (See DATES section.) These, and any subsequent meetings, will be held for the following reason: to work with the National Park Service to assist in potentially developing special regulations for ORV management at Cape Hatteras National Seashore. The proposed agenda for the first and second meeting of the Committee may contain the following items: FACA Ethics Briefing, Managing Administrative Record, Review FACA Charter, Discuss and Approve Groundrules, NEPA Update, Subcommittee Update, Alternatives Discussion, Review and Approve Workplan, and Public Comment. However, the Committee may modify its agenda during the course of its work. The meetings are open to the public. Interested persons may provide brief oral/written comments to the Committee during the public comment period of the meeting or file written comments with the Park Superintendent. Certification I hereby certify that the administrative establishment of the Negotiated Rulemaking Advisory Committee for Off-Road Vehicle Management at Cape Hatteras National Seashore is necessary and in the public interest in connection with the performance of duties imposed on the Department of the Interior by the Act of August 25, 1916, 16 U.S.C. 1 *et seq.* , and other statutes relating to the administration of the National Park System. Dated: November 26, 2007. Dirk Kempthorne, Secretary of the Interior. [FR Doc. 07-6152 Filed 12-19-07; 8:45 am]
Connectionstraces to 80
Traces to 80 documents
U.S. Code
CFR
27 references not yet in our index
  • 14 CFR 39
  • 17 CFR 239
  • 17 CFR 240.3
  • 5 CFR 1320.11
  • Pub. L. 104-121
  • 110 Stat. 857
  • 19 CFR 201
  • 19 CFR 210
  • 742 F.2d 1421
  • 161 F.3d 1347
  • 386 F.3d 1095
  • 30 CFR 75
  • 30 USC 451-483
  • 32 CFR 199
  • 31 CFR 285
  • 5 CFR 550
  • 31 USC 3720A
  • Pub. L. 96-354
  • Pub. L. 104-134
  • Pub. L. 96-511
  • 28 USC 2415-2416
  • 5 CFR 550.1104(d)
  • 26 USC 6050P
  • 31 CFR 904
  • 36 CFR 7
  • 5 USC 561-570
  • Pub. L. 92-463
Citation graph
cites case law
Proposed Rules
Notice of proposed rulemaking (NPRM)
Fed. Reg.Proposed Rules
Fed. Reg.Notices
U.S.C.§ 106
C.F.R.§ 39.19
U.S.C.§ 77a
U.S.C.§ 78a
C.F.R.§ 239.13
C.F.R.§ 239.33
C.F.R.§ 239.18
F. App'x742 F.2d 1421
F. App'x161 F.3d 1347
F. App'x386 F.3d 1095
Cites 107 · showing 12Cited by 0 across 0 sources
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